|(a) Definitions. The following words and terms, when
used in this section shall have the following meanings, unless the
context clearly indicates otherwise.
(1) Cigarette--A roll for smoking:
(A) that is made of tobacco or tobacco mixed with another
ingredient and wrapped or covered with a material other than tobacco;
(B) that is not a cigar.
(2) Delivery sale--A sale of cigarettes to a consumer
in Texas in which:
(A) the purchaser submits the order for the sale:
(i) by telephone or any other method of voice transmission;
(ii) by mail or any other delivery service; or
(iii) through the Internet or another on-line service;
(B) the cigarettes are delivered by mail or another
(C) A sale of cigarettes not for personal consumption
to a person who is a wholesale dealer or a retail dealer is not a
(D) A sale of cigarettes is a delivery sale regardless
of whether the seller is located outside or within Texas.
(3) Delivery service--A person, including the United
States Postal Service, who is engaged in the commercial delivery of
letters, packages, or other containers.
(4) Minor--A person under 21 years of age. The term
"minor" does not include a person who is at least 18 years of age
and is in the United States military forces or the state military
forces. The term "minor" does not include a person who was born on
or before August 31, 2001.
(5) Seller--A person, located outside or within Texas,
who takes or accepts delivery sale orders from the public by telephone,
mail, or on the Internet, or who mails or ships cigarettes in connection
with a delivery sale.
(b) Seller permits and registration.
(1) Cigarette tax permits and sales and use tax permits.
(A) Out-of-state sellers who intend to make delivery
sales to Texas customers must apply for and obtain a cigarette retailer's
permit and, unless purchasing Texas stamped cigarettes, a cigarette
distributor's permit from the comptroller's office as described in §3.102
of this title (relating to Applications, Definitions, Permits, and
(B) Sellers located in Texas who intend to make delivery
sales to Texas customers must apply for and obtain a cigarette retailer's
permit from the comptroller's office, as described in §3.102
of this title, and must obtain a Texas sales and use tax permit, as
described in §3.286 of this title (relating to Seller's and Purchaser's
(2) Delivery sale registration. Before making a delivery
sale in Texas, all sellers must register with the comptroller by filing
a statement that includes:
(A) the seller's name and trade name;
(B) the address of the seller's principal place of
business and any other place of business;
(C) the seller's telephone number; and
(D) the person's e-mail address.
(c) Seller and purchaser responsibilities.
(1) Collection and payment of taxes. The comptroller's
office collects cigarette excise tax through the sale of cigarette
tax stamps to permitted distributors. A seller located outside of
Texas who has obtained a distributor permit is required to purchase
and pay for tax stamps before the comptroller's office will ship the
stamps to the seller. In addition, as provided in Tax Code, Chapter
151 (Limited Sales, Excise, and Use Tax), a seller engaged in business
in Texas is required to collect and remit to the comptroller's office
sales tax on all cigarette sales made in Texas.
(2) Stamping requirements. A seller located outside
of Texas must affix a Texas tax stamp to each package of cigarettes
that is to be shipped or delivered to a purchaser in Texas before
shipment. A Texas seller can purchase only stamped packages of cigarettes
from distributors and wholesalers.
(3) Age verification. A seller must confirm the age
of the prospective purchaser placing an order for cigarettes to be
delivered by the United States Postal Service or by a delivery service
before the cigarettes can be mailed or delivered to a purchaser in
(A) Purchaser verification. A seller is required to
obtain from the prospective purchaser a written certification that
includes a reliable confirmation that the prospective purchaser is
not a minor and a statement signed by the prospective purchaser under
penalty of law:
(i) certifying the prospective purchaser's address
and date of birth;
(ii) confirming that the prospective purchaser understands
that signing another person's name to the certification is illegal,
that sales of cigarettes to, and the purchase of cigarettes by a minor
are illegal under state law; and
(iii) confirming that the prospective purchaser wants
to receive mailings from a tobacco company.
(B) Seller verification. A seller must make a good
faith effort to verify the information contained in the certification
required under subparagraph (A) of this paragraph. A seller may compare
the information against a commercially available database or obtain
a photocopy or other image of a government-issued identification bearing
a photograph and date of birth of the prospective purchaser.
(4) Disclosure requirements. A seller must send a prospective
purchaser, by e-mail or other means, a notice that includes a prominent
and clearly legible statement that:
(A) cigarette sales to minors are illegal under state
(B) sales of cigarettes are restricted to those individuals
who provide verifiable proof of age in accordance with paragraph (3)
of this subsection;
(C) sales of cigarettes are taxable under Texas Tax
Code, Chapter 154 (Cigarette Tax);
(D) the excise tax due on the cigarettes has been paid
by the purchase of a tax stamp for each cigarette package; and
(E) that a tax stamp has been affixed to each cigarette
(5) Purchaser age certification. A person placing an
order for cigarettes to be mailed or delivered must first:
(A) provide the seller with proof of age;
(B) provide the seller with a signed written statement
(i) the purchaser's address and date of birth;
(ii) the purchaser's permission for a tobacco company
to send mailings to the purchaser;
(iii) the purchaser's knowledge that signing another
person's name to the written statement is illegal, and that state
law prohibits the sales of cigarettes to, and the purchase of cigarettes
by a minor; and
(C) pay for the cigarettes ordered by mail or over
the Internet by check or by a credit or debit card that has been issued
in the purchaser's name.
(d) Reporting requirements.
(1) Each seller who has made a delivery sale, and each
person who has delivered cigarettes in connection with a delivery
sale, is required to file a delivery sales report with the comptroller's
(A) For each delivery sale, a person must file a memorandum
or a copy of an invoice that provides:
(i) the name, address, telephone number, and e-mail
address of the individual to whom the delivery sale was made;
(ii) the brand or brands of the cigarettes that were
(iii) the quantity of cigarettes that were sold.
(B) A person may comply with the reporting requirement
described in this paragraph by filing a Texas Cigarette/E-Cigarette
Delivery Sales Report. The report is available on the comptroller's
(C) This filing is due on or before the 10th day of
each month based on delivery sales made in the previous month.
(2) A seller who submits a monthly "Jenkins Act" report
required by 15 U.S.C. Section 376, as amended, to the comptroller's
office has complied with the monthly delivery sales reporting requirement
and no further report is required.
(3) A person is exempt from the filing requirement
in this subsection, if in the preceding two years from the date the
report is due, the person is not in violation of the requirements
under Health and Safety Code, Chapter 161, Subchapter R (Delivery
Sales of Cigarettes and E-Cigarettes) and has not been reported under
Health & Safety Code, §161.090 (Reports of Violations) to
the comptroller as having violated Subchapter H (Distribution of Cigarettes,
E-Cigarettes, or Tobacco Products).
(A) A person is exempt from the filing requirement
in this subsection even if the person does not have a two-year report
filing history, provided that the person has not committed a violation
during the time the person has been making delivery sales.
(B) If a person violates the requirements of Health
and Safety Code, Chapter 161, Subchapter R, or is reported to the
comptroller under §161.090 for violating Health and Safety Code,
Chapter 161, Subchapter H, the person must comply with the monthly
filing requirements described in this subsection.
(i) A person who commits a violation, and who does
not have two years of prior delivery sales, must file the required
information from its first day of business.
(ii) A seller who commits a violation is liable for
reporting all delivery sales for all business locations of the seller.
(e) Violations and Penalties.
(1) A person commits an offense if the person violates
a provision of Health and Safety Code, Chapter 161, Subchapter R for
which a criminal penalty is not otherwise provided, or Tax Code, Chapter
154. For example, a seller who makes a delivery sale of cigarettes
to a minor commits an offense. The person's first offense is a Class
C misdemeanor. If it is shown on the trial of a person that the person
has previously been convicted of an offense under Health and Safety
Code, Chapter 161, Subchapter R, the offense is a Class B misdemeanor.
(2) Knowing violations. A person who knowingly violates
a provision of Health and Safety Code, Chapter 161, Subchapter R,
or knowingly submits a certification described in subsection (c)(3)(A)
of this section, in another person's name commits a felony of the
(3) Non-payment of tax. A person who fails to pay the
cigarette tax or remit the sales and use tax due in connection with
a delivery sale must pay to the state a civil penalty in an amount
equal to five times the amount of tax due. This penalty is in addition
to penalties imposed under Tax Code, Chapter 154.
(4) Forfeiture of cigarettes and property. Cigarettes
sold, or cigarettes that a person attempted to sell in a delivery
sale that does not comply with Health and Safety Code, Chapter 161,
Subchapter R, are forfeited to the state and will be destroyed. A
fixture, equipment, or other material or personal property on the
premises of a person who, with the intent to defraud the state, fails
to comply with the provisions of Health and Safety Code, Chapter 161,
Subchapter R, is also forfeited to the state.
(5) Tax code violations. If the comptroller finds that
a person violates Tax Code, Chapter 154, or a rule made pursuant to
Chapter 154, the comptroller may impose a penalty of not more than
$2,000 for each violation per day and suspend or revoke the person's
permit pursuant to Tax Code, §154.1141 (Summary Suspension of