| (iv) The rate for the state Fiscal Year 2013 (September
1, 2012 through August 31, 2013), is $1.19 per ounce plus the proportionate
rate on all fractional parts of an ounce.
(v) The rate for state Fiscal Year 2014 (which begins
September 1, 2013) and for each fiscal year thereafter, is $1.22 per
ounce plus the proportionate rate on all fractional parts of an ounce.
(C) The tax imposed on a unit that contains multiple
individual cans or packages is the sum of the taxes imposed under
paragraph (1)(B) of this subsection, on each individual can or package
intended for sale or distribution at retail. For example, on November
1, 2009 (Fiscal Year 2010) a distributor receives from a manufacturer
for the purpose of making a first sale in Texas a unit of snuff that
consists of 10 individual cans. Each can weighs 1.3 ounces. The effective
tax rate for each can is $1.43. The total tax due for the unit is
calculated by multiplying the effective tax rate on each individual
can ($1.43) by the total number of individual cans in the unit (10
cans), for a total tax due of $14.30.
(2) Free goods shall be taxed at the prevailing factory
list price, except that each tobacco product other than cigars shall
be taxed according to the manufacturer's listed net weight for the
product and the applicable fiscal year rate for each ounce and proportionate
rate for all fractional parts of an ounce according to paragraph (1)(B)
of this subsection.
(3) A person who receives or possesses tobacco products
on which a tax of more than $50 would be due is presumed to receive
or possess the tobacco products for the purpose of making a first
sale in this state. This presumption does not apply to common carriers
or to manufacturers.
(4) A tax is imposed on manufacturers, who manufacture
tobacco products in this state, at the time the tobacco products are
first transferred in connection with a purchase, sale, or any exchange
for value in intrastate commerce.
(5) The delivery of tobacco products by a principal
to its bonded agent in this state is not a first sale.
(6) If a manufacturer sells tobacco products to a purchaser
in Texas and ships the products at the purchaser's request to a third
party distributor in Texas, then the purchaser has received the tobacco
products for first sale in Texas.
(7) The person in possession of cigars or tobacco products
has the burden to prove payment of the tax.
(c) Sales and purchase requirements for permit holders.
Except for retail sales to consumers, cigarettes may only be sold
or distributed by and between permit holders as provided by this section.
A permit holder may engage in the following business activities:
(1) A manufacturer outside this state who is not a
permitted distributor may sell tobacco products only to a permitted
distributor.
(2) A permitted distributor may sell tobacco products
only to a permitted distributor, wholesaler, or retailer.
(3) A permitted importer may sell tobacco products
only to a permitted distributor, wholesaler, or retailer.
(4) A permitted wholesaler may sell tobacco products
only to a permitted distributor, wholesaler, or retailer.
(5) A permitted retailer may sell tobacco products
only to the consumer and may purchase tobacco products only from a
permitted distributor or wholesaler.
(6) A permitted export warehouse may sell tobacco products
only to persons authorized to sell or consume untaxed tobacco products
outside the United States.
(7) A manufacturer's representative may sell tobacco
products only to a permitted distributor, wholesaler, or retailer.
(d) Liability of a permitted distributor. A permitted
distributor who makes a first sale to a permitted distributor in this
state is liable for and shall pay the tax.
(e) Permits required. To engage in business as a distributor,
importer, manufacturer, export warehouse, wholesaler, bonded agent,
or retailer a person must apply for and receive the applicable permit
from the comptroller. The permits are not transferable.
(1) A person who engages in the business of a bonded
agent, distributor, importer, manufacturer, export warehouse, wholesaler,
or retailer without a valid permit is subject to a penalty of not
more than $2,000 for each violation. Each day on which a violation
occurs is a separate offense. A new application is required if a change
in ownership occurs (sole ownership to partnership, sole ownership
to corporation, partnership to limited liability company, etc.). Each
legal entity must apply for its own permit(s). All permits issued
to a legal entity will have the same taxpayer number.
(2) Each distributor, importer, manufacturer, wholesaler,
bonded agent, export warehouse, or retailer shall obtain a permit
for each place of business owned or operated by the distributor, importer,
manufacturer, wholesaler, bonded agent, or retailer. A new permit
shall be required for each physical change in the location of the
place of business. Correction or change of street listing by a city,
state, or U.S. Post Office shall not require a new permit so long
as the physical location remains unchanged.
(3) Permits are valid for one place of business at
the location shown on the permit. If the location houses more than
one place of business under common ownership, an additional permit
is required for each separate place of business. For example, a retailer
must have a separate permit for each vending machine including several
machines at one location.
(4) A vehicle from which cigars and tobacco products
are sold is a place of business and requires a permit. A motor vehicle
permit is issued to a bonded agent, retailer, distributor, or wholesaler
holding a current permit. Vehicle permits are issued bearing a specific
motor vehicle identification number and are valid only when physically
carried in the vehicle having the corresponding motor vehicle identification
number. Vehicle permits may not be moved from one vehicle to another.
Each cigar or tobacco product manufacturer's sales representative
is required to purchase a wholesale dealer's permit for each manufacturer's
vehicle operated. No cigar and tobacco product permit is required
for a vehicle used only to deliver invoiced tobacco products.
(5) The comptroller may issue a combination permit
for cigarettes, tobacco products, or cigarettes and tobacco products
to a person who is a distributor, importer, manufacturer, wholesaler,
bonded agent, or retailer as defined by Tax Code, Chapter 154 (Cigarette
Tax) and Chapter 155 (Cigars and Tobacco Products Tax). A person who
receives a combination permit pays only the higher of the two permit
fees.
(6) The comptroller will not issue permits for a residence
or a unit in a public storage facility because tobacco products cannot
be stored at such places.
(f) Permit Period.
(1) Bonded agent, distributor, export warehouse, importer,
manufacturer, wholesaler, and motor vehicle permits expire on the
last day of February of each year.
(2) Retailer permits expire on the last day of May
of each even-numbered year.
(g) Permit Fees. An application for a bonded agent,
distributor, manufacturer, wholesaler, motor vehicle, or retailer
permit must be accompanied by the required fee.
(1) The permit fee for a bonded agent is $300.
(2) The permit fee for a distributor is $300.
(3) The permit fee for a manufacturer with representation
in Texas is $300.
(4) The permit fee for a wholesaler is $200.
(5) The permit fee for a motor vehicle is $15.
(6) The permit fee for a retailer permit issued or
renewed is $180. Retailers who fail to obtain or renew a retailer
permit in a timely manner are liable for the fee in effect for the
applicable permit period, in addition to the fee described in paragraph
(8) of this subsection.
(7) No permit fee is required to obtain an importer
permit, export warehouse, or to register a manufacturer when the manufacturer
is located out of state with no representation in Texas.
(8) A $50 fee is assessed for failure to obtain or
renew a permit in a timely manner.
(9) The comptroller prorates the permit fee for new
permits according to the number of months remaining in the permit
period. If a permit will expire within three months of the date of
issuance, the comptroller may collect the prorated permit fee for
the current permit period and the total permit fee for the next permit
period.
(10) A person issued a permit for a place of business
that permanently closes before the permit expiration date is not entitled
to a refund of the permit fee.
(h) Permit issuance, denial, suspension, or revocation.
Cont'd... |
