Texas Tax Code Title 2, Chapter 154 - Cigarette Tax

SUBCHAPTER A GENERAL PROVISIONS

• Texas Section 154.001 - Definitions
  In this chapter: (1) "Bonded agent" means a person in this state who is an agent of a person outside this state and receives cigarettes...

SUBCHAPTER B IMPOSITION AND RATE OF TAX

• Texas Section 154.002 - Storage
  The commercial business location where cigarettes are stored or kept cannot be a residence or a unit in a public storage facility. Added by Acts...
• Texas Section 154.021 - Imposition And Rate Of Tax
  (a) A tax is imposed on a person who uses or disposes of cigarettes in this state. (b) The tax rates are: (1) $70.50 per...
• Texas Section 154.022 - Tax Imposed On First Sale Of Cigarettes
  The cigarette tax is imposed and becomes due and payable when a person in this state receives cigarettes to make a first sale. Acts 1981,...
• Texas Section 154.023 - Impact Of Tax
  The ultimate consumer or user in this state bears the impact of the tax imposed by this chapter. If another person pays the tax, the...
• Texas Section 154.024 - Importation Of Small Quantities
  (a) A person who imports and personally transports 200 or fewer cigarettes into this state from another state is not required to pay the tax...

SUBCHAPTER C TAX STAMPS

• Texas Section 154.025 - Lien To Secure Payment Of Tax
  (a) In this section, "collecting agent" means a person who pays or who is liable for payment of the tax imposed under Section 154.022 and...
• Texas Section 154.041 - Stamp Required
  (a) A person who pays a tax imposed by this chapter shall securely affix a stamp to each individual package of cigarettes to show payment...
• Texas Section 154.0415 - Cigarettes To Which Stamps May Not Be Affixed
  A person may not affix a stamp to a package of cigarettes if the package: (1) does not comply with the Cigarette Labeling and Advertising...
• Texas Section 154.042 - Distributor
  (a) A distributor shall affix the required tax stamps to each individual package that is to be sold, offered for sale, consumed, distributed, handled, or...
• Texas Section 154.043 - Sale Of Stamps
  Except as provided in Section 154.044 of this code, only the comptroller may sell cigarette stamps. The stamps may be sold only in quantities made...
• Texas Section 154.044 - Purchase From A Distributor
  (a) If a distributor does not possess sufficient unused stamps to cover the distributor's inventory of unstamped cigarettes, the comptroller may allow the distributor to...
• Texas Section 154.045 - Recall By Comptroller
  (a) The comptroller may recall unused stamps. (b) If the comptroller recalls stamps, the purchaser, on the comptroller's demand, shall surrender the stamps to the...
• Texas Section 154.046 - Invoice For Stamps
  (a) The comptroller shall send an original invoice along with any stamps shipped to a distributor. (b) The invoice shall be issued in duplicate and...
• Texas Section 154.047 - Stamps Shipped With Draft Attached
  (a) A distributor may order stamps to be shipped to a bank with which the distributor regularly transacts business if the bank is a designated...
• Texas Section 154.050 - Payment
  (a) The comptroller shall require that payment in full for stamps be made within 30 days after the date stamps and an accompanying invoice from...
• Texas Section 154.051 - Cigarette Tax Recovery Trust Fund
  (a) The cigarette tax recovery trust fund is a private trust fund established outside the state treasury and as provided by this section secures the...
• Texas Section 154.052 - Distributor's Stamping Allowance
  (a) A distributor is, subject to the provisions of Section 154.051, entitled to 2.5 percent of the face value of stamps purchased as a stamping...
• Texas Section 154.053 - Manufacture Of Stamps
  (a) The comptroller shall design and have printed or manufactured cigarette tax stamps. If the comptroller determines that it is necessary for the best enforcement...
• Texas Section 154.054 - Redemption And Destruction Of Stamps
  (a) The comptroller may redeem unused cigarette tax stamps that were lawfully issued before a design, color, or denomination change. (b) The comptroller may destroy...
• Texas Section 154.058 - Inventory On Tax Increase
  (a) On the effective date of a tax increase, each distributor, wholesaler, and retailer who has 2,000 or more cigarettes in packages stamped with stamps...
• Texas Section 154.060 - Cancellation
  No person may cancel, mark, or mutilate a stamp on a package of cigarettes so that the comptroller is prevented from or hindered in examining...

SUBCHAPTER D PERMITS

• Texas Section 154.061 - Penalty For Failure To Pay Tax
  (a) A distributor who fails to timely pay the tax when due shall pay five percent of the amount of tax then due as a...
• Texas Section 154.101 - Permits
  (a) A person may not engage in business as a distributor, wholesaler, bonded agent, manufacturer, importer, or retailer unless the person has applied for and...
• Texas Section 154.1015 - Sales; Permit Holders And Nonpermit Holders
  (a) Except for retail sales to consumers, cigarettes may only be sold or distributed by and between permit holders. (b) A person who is not...
• Texas Section 154.102 - Combination Permit
  (a) The comptroller may issue a combination permit for cigarettes and tobacco products to a person who is a distributor, wholesaler, bonded agent, manufacturer, importer,...
• Texas Section 154.107 - Denial Of Permit
  The comptroller may reject an application and deny a permit if the comptroller finds, after notice and opportunity for hearing, any of the following: (1)...
• Texas Section 154.110 - Issuance Of Permit
  (a) The comptroller shall issue a permit to a distributor, wholesaler, bonded agent, manufacturer, importer, or retailer if the comptroller: (1) has received an application...
• Texas Section 154.111 - Permit Year; Fees
  (a) A permit required by this chapter expires on the last day of February of each year, except that the retailer's permit required by Section...
• Texas Section 154.1135 - Payment For Permits
  (a) An applicant for a permit required by Section 154.101 shall send the required fee with the application. (b) The payment must be in cash...
• Texas Section 154.114 - Final Suspension Or Revocation Of A Permit
  (a) The comptroller may suspend or revoke a person's permit if the comptroller finds, after notice and hearing as provided by this section, that the...
• Texas Section 154.1141 - Summary Suspension Of A Permit
  (a) The comptroller may suspend a person's permit without notice or a hearing for the person's failure to comply with this chapter or a rule...
• Texas Section 154.1142 - Disciplinary Action For Certain Violations
  (a) A retailer is subject to disciplinary action as provided by this section if: (1) an agent or employee of the retailer commits an offense...
• Texas Section 154.1143 - Actions Of Employee
  (a) For purposes of Subchapter H, Chapter 161, Health and Safety Code, and the provisions of this code relating to the sale or delivery of...
• Texas Section 154.1145 - Hearings
  Unless otherwise provided by this chapter, the comptroller shall conduct all hearings required by this chapter in accordance with Chapter 2001, Government Code. The comptroller...
• Texas Section 154.116 - Comptroller May Refuse To Sell Stamps
  The comptroller may refuse to sell stamps to a person who has not obtained a distributor's permit or to a distributor who does not have...
• Texas Section 154.117 - Display Of Permit
  (a) Each permit holder shall keep the permit on public display at the place of business for which the permit was issued. (b) Each permit...

SUBCHAPTER E INTERSTATE BUSINESS

• Texas Section 154.121 - Revenue
  (a) Except as provided by Subsection (b), revenue from the sale of permits to distributors, wholesalers, and bonded agents is allocated in the same manner...

SUBCHAPTER F RECORDS AND REPORTS

• Texas Section 154.152 - Interstate Stock
  (a) A distributor shall set aside unstamped cigarette packages for interstate sale and for which no tax is due under federal law in a separate...
• Texas Section 154.201 - Record Of Purchase Or Receipt
  Each distributor, wholesaler, bonded agent, and export warehouse shall keep records at each place of business of all cigarettes purchased or received, including records of...
• Texas Section 154.202 - Record Of Stamps
  (a) A distributor shall keep at each place of business in this state the invoices for all stamps purchased or received from the comptroller and...
• Texas Section 154.203 - Report Of Sale Or Use
  (a) Each distributor and wholesaler shall keep at each place of business in this state records of each sale, distribution, exchange, or use of cigarettes...
• Texas Section 154.204 - Manufacturer's Records And Reports
  (a) A manufacturer who sells cigarettes to a permit holder in this state shall keep records showing: (1) the number and kind of cigarettes in...
• Texas Section 154.205 - Manufacturer's Representative's Records
  A manufacturer's representative shall retain copies of the invoices prepared for each purchase or sale of cigarettes from or to a permittee of the state....
• Texas Section 154.207 - Common Carrier Records
  (a) Each common carrier shall keep records of cigarettes transported in this state. (b) The comptroller and the attorney general are entitled to access during...
• Texas Section 154.208 - Bonded Agent's Records
  (a) Each bonded agent shall keep, at each place of business in this state, records of all cigarettes received, distributed, and delivered. (b) The records...
• Texas Section 154.209 - Availability Of Records
  (a) Except as provided by Section 111.0041, each permit holder shall keep records available for inspection and copying by the comptroller and the attorney general...
• Texas Section 154.210 - Distributor's Report
  (a) A distributor shall deliver to the comptroller, on or before the last day of each month, a report for the preceding month. (b) The...
• Texas Section 154.211 - Failure To Produce Records
  (a) A person's failure to produce the records required by this subchapter or a person's inability to provide other proof of tax payment, on demand...

SUBCHAPTER G ADMINISTRATION BY COMPTROLLER

• Texas Section 154.212 - Reports By Wholesalers And Distributors Of Cigarettes
  (a) The comptroller may, when considered necessary by the comptroller for the administration of a tax under this chapter, require each wholesaler or distributor of...
• Texas Section 154.301 - Compliance Investigation And Recovery Of Costs
  (a) If the comptroller has reason to believe that a person has failed to pay a tax or penalty in the proper manner when due,...
• Texas Section 154.302 - Payment Of Double Amount
  (a) If the comptroller finds that a person has sold unstamped cigarettes, the comptroller may require the person to pay the state through the comptroller...
• Texas Section 154.304 - Inspection
  (a) To determine the tax liability of a person dealing in cigarettes or compliance by the person with this chapter, the comptroller may: (1) inspect...
• Texas Section 154.305 - Refund For Stamps
  (a) The comptroller may provide credit or a refund on stamps that are unfit for sale or use because of damage and on unused stamps...
• Texas Section 154.306 - Exchange Of Stamps
  The comptroller may exchange or replace, without cost, stamps affixed to a package of cigarettes if the cigarettes have become unfit for sale, use, or...
• Texas Section 154.307 - Records
  The comptroller shall keep a record of: (1) stamps sold by the comptroller or under the comptroller's direction; (2) stamps exchanged by the comptroller; and...
• Texas Section 154.308 - Deficiency Determination, Penalties, And Interest
  (a) If the comptroller has reasonable cause to believe that a tax report or the amount of tax paid is inaccurate, the comptroller may compute...

SUBCHAPTER H ENFORCEMENT OF TAX

• Texas Section 154.309 - Redetermination
  (a) A person who receives notice of a deficiency determination may submit a written request to the comptroller for redetermination. If the person desires a...
• Texas Section 154.403 - Seizure
  (a) The comptroller with or without process may seize: (1) cigarettes taxed under this chapter that are possessed or controlled by a person for the...
• Texas Section 154.404 - Comptroller's Report
  (a) If the comptroller seizes property under Section 154.403, the comptroller shall immediately make a written report showing: (1) the name of the person making...
• Texas Section 154.4045 - Sale Of Seized Cigarettes
  (a) Cigarettes are perishable items. (b) If the seized cigarettes are in a salable condition, the comptroller may: (1) sell the cigarettes, return the cigarettes...
• Texas Section 154.405 - Forfeiture Proceeding
  (a) The owner of property seized under this chapter is entitled to written notice of the seizure. (b) The comptroller shall give the notice by...
• Texas Section 154.406 - Disposition Of Forfeited Property
  (a) The comptroller may sell property forfeited to the state at public or private sale in any commercially reasonable manner or retain the property for...
• Texas Section 154.407 - Photographic Evidence In Cases Involving Seized Cigarettes
  (a) The comptroller may photograph cigarettes seized under Section 154.403 before their sale under this subchapter. (b) In a proceeding arising out of this chapter,...
• Texas Section 154.409 - Unstamped Cigarettes
  If cigarettes seized under Section 154.403 of this code are unstamped, an officer selling the cigarettes shall affix the required stamps to the cigarettes and...
• Texas Section 154.4095 - Deceptive Trade Practice
  Selling a package of cigarettes described by Section 154.0415, with or without a stamp, is a deceptive trade practice for the purpose of Subchapter E,...
• Texas Section 154.410 - Seizure Or Sale No Defense
  The seizure, forfeiture, and sale of cigarettes or property under this chapter, with or without court action, is not a defense to criminal prosecution for...
• Texas Section 154.411 - Waiver Permitted
  (a) The comptroller may waive a forfeiture proceeding for property seized under Section 154.403 of this code if the owner or possessor of the property:...
• Texas Section 154.412 - Payment To Treasury
  The comptroller shall deposit all taxes collected under Section 154.411, after payment of costs, in the treasury to be allocated as provided by Subchapter J....
• Texas Section 154.413 - Preferred State Tax Lien
  (a) All taxes, fines, interest, penalties, and costs due under this chapter are secured by a preferred lien in favor of the state, first and...
• Texas Section 154.414 - Reciprocal Agreements
  (a) The comptroller may enter into a reciprocal agreement with a tax official of another state or an official of the United States allowing the...

SUBCHAPTER I PENALTIES

• Texas Section 154.415 - Donations
  The comptroller may accept gifts, grants, and donations for the administration and enforcement of this chapter. Added by Acts 1989, 71st Leg., ch. 240, Sec....
• Texas Section 154.501 - Penalties
  (a) A person violates this chapter if the person: (1) is a distributor, wholesaler, manufacturer, importer, bonded agent, manufacturer's representative, or retailer and fails to...
• Texas Section 154.502 - Unstamped Cigarettes
  A person commits an offense if the person: (1) makes a first sale of unstamped cigarettes; (2) sells, offers for sale, or presents as a...
• Texas Section 154.5025 - Affixing Stamps To Certain Cigarettes
  A person commits an offense if the person knowingly affixes stamps to cigarettes in violation of Section 154.0415. Added by Acts 1999, 76th Leg., ch....
• Texas Section 154.503 - Possession In Quantities Less Than 10,000
  (a) Except as provided by Section 154.042 of this code, a person commits an offense if the person possesses unstamped cigarettes in quantities less than...
• Texas Section 154.504 - Possession Of Quantities Less Than Individual Package
  A person commits an offense and is subject to a $100 fine if the person sells cigarettes in quantities less than an individual package containing...
• Texas Section 154.505 - Cancellation Of Stamp
  A person commits an offense if the person knowingly cancels or mutilates, with fraudulent intent or to conceal a violation of this chapter, a stamp...
• Texas Section 154.506 - Concealment Of A Violation
  A person commits an offense if the person uses any artful device or deceptive practice to conceal a violation of this chapter. Acts 1981, 67th...
• Texas Section 154.507 - Misleading The Comptroller
  A person commits an offense if the person misleads the comptroller in the enforcement of this chapter. Acts 1981, 67th Leg., p. 1660, ch. 389,...
• Texas Section 154.508 - Refusing To Surrender Cigarettes
  A person commits an offense if the person refuses to surrender to the comptroller on demand cigarettes possessed in violation of this chapter. Acts 1981,...
• Texas Section 154.509 - Permits
  A person commits an offense if the person: (1) as a distributor, wholesaler, or retailer, receives or possesses cigarettes without having a valid permit; (2)...
• Texas Section 154.5095 - Fingerprints
  The comptroller may refuse to grant a permit or may revoke or suspend a permit if the applicant or permit holder fails, on request, to...
• Texas Section 154.510 - Misdemeanor
  An offense under Sections 154.502, 154.503, or 154.505 through 154.509 is a Class A misdemeanor. Acts 1981, 67th Leg., p. 1660, ch. 389, Sec. 1,...
• Texas Section 154.511 - Transportation Of Cigarettes
  A person, other than a common carrier, commits an offense if the person: (1) knowingly transports cigarettes without a stamp affixed to each individual package,...
• Texas Section 154.512 - Inspection Of Premises
  A person commits an offense if the person refuses to permit a complete inspection by an authorized representative of the comptroller of any premises where...
• Texas Section 154.513 - Previously Used Or Old Design Stamps
  A person commits an offense if the person: (1) uses, sells, offers for sale, or possesses for use or sale previously used stamps; (2) attaches...
• Texas Section 154.514 - Sale Of Stamps
  A person commits an offense if the person, without having the requisition from the comptroller as provided by Section 154.044 of this code: (1) purchases...
• Texas Section 154.515 - Possession In Quantities Of 10,000 Or More
  (a) Except as provided by Section 154.042 of this code, a person commits an offense if the person possesses unstamped cigarettes in quantities of 10,000...
• Texas Section 154.516 - Books And Records
  A person commits an offense if the person: (1) knowingly makes, delivers to, and files with the comptroller a false return or report or an...
• Texas Section 154.517 - Felony
  An offense under Sections 154.511 through 154.516 is a felony of the third degree. Acts 1981, 67th Leg., p. 1662, ch. 389, Sec. 1, eff....
• Texas Section 154.518 - Overlap Of Penalties
  If an offense is punishable under Section 154.510 of this code and also under Section 154.517 of this code, the punishment prescribed by Section 154.517...
• Texas Section 154.519 - Venue
  Venue of a prosecution for an offense punishable under Section 154.510 or 154.517 of this code is in Travis County or in the county where...

SUBCHAPTER J NATURE OF TAX AND DISPOSITION OF FUNDS

• Texas Section 154.520 - Counterfeit Stamps
  (a) A person commits an offense if the person: (1) prints, engraves, makes, issues, sells, or circulates counterfeit stamps; (2) possesses with intent to use,...
• Texas Section 154.601 - Nature Of Tax
  (a) The tax imposed by this chapter is not an occupation tax. (b) If a court of competent jurisdiction declares the tax imposed by this...
• Texas Section 154.602 - Funds For Enforcement
  The legislature may appropriate money from the cigarette tax to the comptroller for manufacturing and printing of cigarette tax stamps and for the administration of...
• Texas Section 154.603 - Disposition Of Revenue
  (a) After the deductions for the purposes provided by Section 154.602 of this code, the revenue remaining of the first $2 of tax received per...
• Texas Section 154.6035 - Allocation Of Certain Revenue To Property Tax Relief Fund
  Notwithstanding Section 154.603, all proceeds from the collection of taxes imposed by this chapter attributable to the portion of the tax rate in excess of...

Last modified: September 28, 2016