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RULE §3.1207E-cigarette Retailer Permits

(a) Definitions. The following words and terms, when used in this section, have the following meanings, unless the context clearly indicates otherwise.

  (1) Commercial business location--The entire premises occupied by a permit applicant or a person required to hold a permit under Health and Safety Code, §147.0051 (E-cigarette Retailer Permit Required).

  (2) E-cigarette--An electronic cigarette or any other device that simulates smoking by using a mechanical heating element, battery, or electronic circuit to deliver nicotine or other substances to the individual inhaling from the device; or a consumable liquid solution or other material aerosolized or vaporized during the use of an electronic cigarette or other device described by this paragraph.

    (A) The term "e-cigarette" includes:

      (i) a device described by this paragraph regardless of whether the device is manufactured, distributed, or sold as an e-cigarette, e-cigar, or e-pipe or under another product name or description; and

      (ii) a component, part, or accessory for the device, regardless of whether the component, part, or accessory is sold separately from the device.

    (B) The term "e-cigarette" does not include a prescription medical device unrelated to the cessation of smoking.

  (3) E-cigarette retailer--A person who engages in the business of selling e-cigarettes to consumers, including a person who sells e-cigarettes to consumers through a marketplace.

  (4) Marketplace--A physical or electronic medium through which persons other than the owner or operator of the medium make sales of taxable items. The term includes a store, Internet website, software application, or catalog.

  (5) Marketplace provider--A person who owns or operates a marketplace and directly or indirectly processes sales or payments for marketplace sellers.

  (6) Marketplace seller--A seller, other than the marketplace provider, who makes a sale of a taxable item through a marketplace.

  (7) Permit holder--A person who obtains a permit under Health and Safety Code, §147.0052 (Issuance of Permit).

  (8) Place of business--

    (A) a commercial business location where e-cigarettes are sold;

    (B) a commercial business location where e-cigarettes are kept for sale or consumption or otherwise stored; or

    (C) a vehicle from which e-cigarettes are sold.

(b) Inapplicability. This section does not apply to a product that is:

  (1) approved by the United States Food and Drug Administration for use in the treatment of nicotine or smoking addiction; and

  (2) labeled with a "Drug Facts" panel in accordance with regulations of the United States Food and Drug Administration.

(c) E-cigarette retailer permits.

  (1) Requirements.

    (A) Beginning January 1, 2022, a person may not engage in business as an e-cigarette retailer in Texas without a permit issued by the comptroller.

    (B) An e-cigarette retailer shall obtain a permit for each place of business owned or operated by the e-cigarette retailer.

    (C) The comptroller may not issue a permit for a place of business that is a residence or a unit in a public storage facility.

    (D) A marketplace seller shall obtain a permit for each marketplace where the seller makes sales of e-cigarettes.

    (E) A marketplace provider shall obtain a permit when selling e-cigarettes on behalf of marketplace sellers.

  (2) Application.

    (A) The applicant shall complete Form AP-242, Texas Application for E-Cigarette Retailer Permit, or any successor to that form promulgated by the comptroller.

    (B) The applicant shall accurately complete all information required by the application and provide the comptroller with any additional information the comptroller considers necessary.

    (C) Each applicant that applies for a permit to sell e-cigarettes from a vehicle shall provide the make, model, vehicle identification number, registration number, and any other information concerning the vehicle the comptroller requires.

    (D) All financial information provided under this section is confidential and not subject to Government Code, Chapter 552 (Public Information).

(d) Permit period; fees.

  (1) An initial application and a renewal of an existing permit shall be accompanied by the permit fee.

    (A) A permit issued under this section expires on the last day of May of each even-numbered year.

    (B) The permit fee for the full two years is $180. A new applicant permit fee is prorated according to the number of months remaining during the period that the permit is to be in effect.

    (C) A person who holds an active cigarette or tobacco product permit under Tax Code, §§154.101 (Permits), 154.102 (Combination Permit) or 155.041 (Permits), for the same business location at the time of an application or renewal of an application, pays a reduced amount of one-half the retailer permit fee.

  (2) A person who does not renew an e-cigarette retailer permit by the expiration of a current permit shall pay a late fee of $50 in addition to the application fee for the permit.

  (3) If a permit expires within three months from the date of issuance, the comptroller may collect the prorated permit fee amount for the remaining months of the current period and, with the consent of the permit holder, may collect the permit fee amount for the next permit period and issue permits for both periods.

  (4) 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.

(e) Payment for e-cigarette retailer permit.

  (1) An applicant for a permit shall remit the required fee with the application.

  (2) The payment shall be made in cash or by money order, check, or credit card.

  (3) The comptroller may not issue a permit in exchange for a check until after the comptroller receives full payment on the check.

(f) Issuance of an e-cigarette retailer permit.

  (1) The comptroller will issue a permit to an applicant if the comptroller:

    (A) has received an application and fee;

    (B) does not reject the application and deny the permit under subsection (h) of this section; and

    (C) determines that issuing the permit will not jeopardize the administration and enforcement of Health and Safety Code, Chapter 147 (E-cigarette Retailer Permits).

  (2) The permit will be issued for a designated place of business, except as provided by subsection (h) of this section.

  (3) Permits for engaging in business as an e-cigarette retailer are non-assignable.

(g) Display of an e-cigarette retailer permit.

  (1) A permit holder shall keep the permit on public display at the place of business for which the permit was issued.

  (2) A permit holder who has a permit assigned to a vehicle shall post the permit in a conspicuous place on the vehicle.

(h) Denial of e-cigarette retailer permit. The comptroller may reject an application and deny a permit if the comptroller finds, after notice and opportunity for hearing:

  (1) the premises where business will be conducted are not adequate to protect the e-cigarettes; or

  (2) the applicant or managing employee, or if the applicant is a corporation, an officer, director, manager, or any stockholder who holds directly or through family or partner relationship 10% or more of the corporation's stock, or, if the applicant is a partnership, a partner or manager:

    (A) has failed to disclose any of the information required by subsection (c)(2) of this section; or

    (B) has previously violated provisions of Health and Safety Code, Chapter 147.

(i) Summary suspension of permit.

  (1) The comptroller may suspend a permit holder's permit without notice or a hearing for the permit holder's failure to comply with this section if the permit holder's continued operation constitutes an immediate and substantial threat.

  (2) If the comptroller summarily suspends a permit holder's permit, proceedings for a preliminary hearing before the comptroller or the comptroller's representative must be initiated simultaneously with the summary suspension. The preliminary hearing shall be set for a date not later than the 10th day after the date of the summary suspension, unless the parties agree to a later date.


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