CHAPTER 154. CIGARETTE TAX
TAX CODE
TITLE 2. STATE TAXATION
SUBTITLE E. SALES, EXCISE, AND USE TAXES
CHAPTER 154. CIGARETTE TAX
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 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 in
interstate commerce and stores the cigarettes for distribution or
delivery to distributors under orders from the person outside
this state.
(2) "Cigarette" means 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; and
(B) that is not a cigar.
(3) "Commercial business location" means the entire premises
occupied by a permit applicant or a person required to hold a
permit under this chapter.
(4) "Common carrier" means a motor carrier registered under
Chapter 643, Transportation Code, or a motor carrier operating
under a certificate issued by the Interstate Commerce Commission
or a successor agency to the Interstate Commerce Commission.
(5) "Consumer" means a person who possesses cigarettes for
personal consumption.
(6) "Counterfeit stamp" means a sticker, label, print, tag, or
token that is used or is intended to be used to simulate a stamp
and that is not authorized or issued by the comptroller.
(7) "Distributor" means a person who:
(A) is authorized to purchase for the purpose of making a first
sale in this state cigarettes in unstamped packages from
manufacturers who distribute cigarettes in this state and to
stamp cigarette packages;
(B) ships, transports, imports into this state, acquires, or
possesses cigarettes and makes a first sale of the cigarettes in
this state;
(C) manufactures or produces cigarettes; or
(D) is an importer or import broker.
(8) "Export warehouse" means a person in this state who receives
cigarettes in unstamped packages from manufacturers and stores
the cigarettes for the purpose of making sales to authorized
persons for resale, use, or consumption outside the United
States.
(9) "First sale" means, except as otherwise provided by this
chapter:
(A) the first transfer of possession in connection with a
purchase, sale, or any exchange for value of cigarettes in
intrastate commerce;
(B) the first use or consumption of cigarettes in this state; or
(C) the loss of cigarettes in this state whether through
negligence, theft, or other unaccountable loss.
(10) "Importer" or "import broker" means a person who ships,
transports, or imports into this state cigarettes manufactured or
produced outside the United States for the purpose of making a
first sale in this state.
(11) "Individual package of cigarettes" means a package that
contains not fewer than 10 cigarettes.
(12) "Manufacturer" means a person who manufactures and sells
cigarettes to a distributor.
(13) "Manufacturer's representative" means a person employed by
a manufacturer to sell or distribute the manufacturer's stamped
cigarette packages.
(14) "Permit holder" means a bonded agent, distributor,
wholesaler, manufacturer, importer, or retailer required to
obtain a permit under Section 154.101.
(15) "Place of business" means:
(A) a commercial business location where cigarettes are sold;
(B) a commercial business location where cigarettes are kept for
sale or consumption or otherwise stored; or
(C) a vehicle from which cigarettes are sold.
(16) "Previously used stamp" means a stamp that has been used to
show payment of a tax imposed by this chapter and is again used,
sold, or possessed for sale or use to show payment of a tax
imposed by this chapter.
(17) "Retailer" means a person who engages in the practice of
selling cigarettes to consumers and includes the owner of a
coin-operated cigarette vending machine.
(18) "Stamp" includes only a stamp that:
(A) is printed, manufactured, or made by authority of the
comptroller;
(B) shows payment of the tax imposed by this chapter; and
(C) is consecutively numbered and uniquely identifiable as a
Texas tax stamp.
(19) "Wholesaler" means a person, including a manufacturer's
representative, who sells or distributes cigarettes in this state
for resale but who is not a distributor.
Acts 1981, 67th Leg., p. 1638, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 1, eff. March
1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 1, eff. Oct. 1,
1989; Acts 1991, 72nd Leg., ch. 409, Sec. 1, eff. June 7, 1991;
Acts 1995, 74th Leg., ch. 705, Sec. 10, eff. Sept. 1, 1995; Acts
1997, 75th Leg., ch. 165, Sec. 30.262, eff. Sept. 1, 1997; Acts
1997, 75th Leg., ch. 1040, Sec. 40, eff. Sept. 1, 1997; Acts
1997, 75th Leg., ch. 1423, Sec. 19.15, eff. Sept. 1, 1997; Acts
2001, 77th Leg., ch. 540, Sec. 1, eff. Sept. 1, 2001; Acts 2001,
77th Leg., ch. 1263, Sec. 46, eff. Oct. 1, 2001.
Sec. 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 2001, 77th Leg., ch. 540, Sec. 2, eff. Sept. 1,
2001.
SUBCHAPTER B. IMPOSITION AND RATE OF TAX
Sec. 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 thousand on cigarettes weighing three pounds or
less per thousand; and
(2) the rate provided by Subdivision (1) plus $2.10 per thousand
on cigarettes weighing more than three pounds per thousand.
Acts 1981, 67th Leg., p. 1640, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1984, 68th Leg., 2nd C.S., ch. 31, art. 2,
Sec. 1, eff. Aug. 1, 1984, Sec. 2, eff. Sept. 1, 1985; Acts 1987,
70th Leg., 2nd C.S., ch. 5, art. 4, Sec. 1; Acts 1990, 71st Leg.,
6th C.S., ch. 5, Sec. 2.01, eff. July 1, 1990.
Amended by:
Acts 2006, 79th Leg., 3rd C.S., Ch.
7, Sec. 1, eff. January 1, 2007.
Sec. 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, 67th Leg., p. 1640, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1991, 72nd Leg., ch. 409, Sec. 2, eff. June
7, 1991.
Sec. 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 amount of the tax is added to
the price to the ultimate consumer or user.
Acts 1981, 67th Leg., p. 1640, ch. 389, Sec. 1, eff. Jan. 1,
1982.
Sec. 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
imposed by this chapter if the person uses the cigarettes and
does not sell them or offer them for sale. A person who imports
and personally transports 200 or fewer cigarettes into this state
from a foreign country shall pay the tax imposed by this chapter
and have affixed on each individual package of cigarettes a stamp
to show payment of the tax.
(b) Employees of the Texas Alcoholic Beverage Commission who
collect taxes on alcoholic beverages at ports of entry shall
collect at the ports of entry the tax imposed by this chapter on
cigarettes imported into this state. In computing the amount of
taxes to be collected, the commission may round the total amount
up to the nearest quarter of a dollar.
(c) The comptroller and the Texas Alcoholic Beverage Commission
shall make rules for the administration of this section.
Acts 1981, 67th Leg., p. 1640, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 2, eff. Oct.
1, 1989; Acts 1997, 75th Leg., ch. 1423, Sec. 19.16, eff. Sept.
1, 1997; Acts 1999, 76th Leg., ch. 1110, Sec. 1, eff. Sept. 1,
1999.
Amended by:
Acts 2005, 79th Leg., Ch.
792, Sec. 2, eff. September 1, 2005.
Sec. 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
who is not the consumer of the cigarettes on which the tax is
imposed.
(b) A collecting agent is an agent of the state for the purpose
of collecting the cigarette tax for the state.
(c) A collecting agent has a lien on:
(1) cigarettes on which the collecting agent has paid or is
liable for the payment of the tax imposed under Section 154.022;
and
(2) the proceeds from the sale of the cigarettes.
(d) The lien under this section attaches to all cigarettes
purchased from a collecting agent and all proceeds from the sale
of the cigarettes on the date that the cigarettes are sold by the
collecting agent. An action by the collecting agent or any other
person is not required to perfect the lien.
(e) The lien under this section takes priority over any other
lien on the cigarettes purchased from a collecting agent and the
proceeds from the sale of the cigarettes, except the preferred
state tax lien under Section 154.413.
(f) A collecting agent may enforce a lien under this section
through any legal proceeding, including a proceeding under Title
11, U.S.C., and assertion of an administrative priority claim to
the extent that the lien does not adequately protect the
collecting agent.
(g) A prior demand is not required to commence an action to
enforce a lien under this section.
(h) In an action to enforce a lien under this section, a court
may prevent the resale of any cigarettes on which a collecting
agent has the lien by any appropriate order, including the
seizure of the cigarettes by an appropriate legal officer through
attachment, sequestration, or other procedure. It is not a
defense to the granting of injunctive relief by the court that
remedies at law, including a suit for damages, are available.
(i) A court shall distribute money received from the foreclosure
of a lien under this section in the following order:
(1) payment of all costs and expenses, including attorney fees,
incurred by a collecting agent to enforce the lien;
(2) payment of taxes on the cigarettes purchased from the
collecting agent and subject to the lien, including not only the
taxes on the cigarettes and proceeds subject to the foreclosure
but also the taxes on all cigarettes for which the collecting
agent has not received payment in accordance with the terms of
the agreement between the collecting agent and the person to whom
the collecting agent sold the cigarettes; and
(3) any remaining money to the person against whom the lien
operates.
(j) A lien under this section may not be waived if the tax
payment that is secured by the lien has not been paid to the
collecting agent. A purported waiver of the tax payment is void.
(k) To the extent allowed by law, the priority claim of the
comptroller under 11 U.S.C. Section 507(d) for taxes imposed by
Section 154.022 is assigned to the collecting agent.
Added by Acts 1991, 72nd Leg., ch. 409, Sec. 3, eff. June 7,
1991. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.17, eff.
Sept. 1, 1997.
SUBCHAPTER C. TAX STAMPS
Sec. 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 of the tax.
(b) Except as provided by Section 154.152, each distributor
shall obtain the necessary stamps before receiving or accepting
delivery of unstamped packages of cigarettes. The possession of
unstamped packages of cigarettes without the possession of the
requisite amount or number of stamps is prima facie evidence that
the cigarettes are possessed for the purpose of making a first
sale without stamps and without payment of the tax imposed by
this chapter.
(c) The absence of a stamp on an individual package of
cigarettes is notice that the tax has not been paid.
(d) A manufacturer of cigarettes outside this state may purchase
a stamp and affix it to the individual package and no further
payment of the tax is required.
(e) The transfer of possession of cigarettes by a bonded agent
to a distributor in this state, under instructions received from
outside this state, is not a first sale.
Acts 1981, 67th Leg., p. 1640, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1983, 68th Leg., p. 788, ch. 188, Sec. 1,
eff. May 21, 1983; Acts 1991, 72nd Leg., ch. 409, Sec. 4, eff.
June 7, 1991.
Sec. 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
Act (15 U.S.C. Section 1331 et seq.) for the placement of labels,
warnings, or any other information for a package of cigarettes to
be sold within the United States;
(2) is labeled "For Export Only," "U.S. Tax Exempt," "For Use
Outside U.S.," or other wording indicating that the manufacturer
did not intend that the product be sold in the United States;
(3) has been altered by adding or deleting wording, labels, or
warnings described in Subdivision (1) or (2);
(4) has been imported into the United States in violation of 26
U.S.C. Section 5754;
(5) in any way violates federal trademark or copyright laws; or
(6) contains cigarettes with respect to which any person is not
in compliance with 15 U.S.C. Section 1335a, as amended, relating
to submission of ingredient information to federal authorities,
19 U.S.C. Sections 1681-1681b, as amended, relating to imports of
certain cigarettes, 26 U.S.C. Section 5754, as amended, or
relating to previously exported tobacco products.
Added by Acts 1999, 76th Leg., ch. 1539, Sec. 1, eff. Sept. 1,
1999. Amended by Acts 2001, 77th Leg., ch. 1104, Sec. 1, eff.
Sept. 1, 2001.
Sec. 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
transported.
(b) Except as provided by Subsection (c), each distributor in
this state shall affix the required stamps within 96 hours after
receiving the cigarettes, excluding Saturdays, Sundays, and legal
holidays.
(c) If a distributor reasonably foresees that the distributor
will receive cigarettes in quantities that will make compliance
with Subsection (b) commercially impracticable in the normal
course of business, the distributor shall provide the
comptroller, before receipt of the cigarettes, with advance
written notice of the anticipated noncompliance and a plan for
achieving compliance. On receipt of the written notice, the
comptroller shall review the plan and determine whether to
provide an extension of time in which the tax stamps must be
affixed after the distributor receives the cigarettes. The
comptroller may not unreasonably withhold an extension of time.
(d) A plan for achieving compliance that is submitted to the
comptroller under Subsection (c) is confidential and not subject
to Chapter 552, Government Code.
Acts 1981, 67th Leg., p. 1641, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1991, 72nd Leg., ch. 409, Sec. 5, eff. June
7, 1991; Acts 1995, 74th Leg., ch. 76, Sec. 5.95(88), eff. Sept.
1, 1995; Acts 1995, 74th Leg., ch. 1000, Sec. 37, eff. Oct. 1,
1995; Acts 1997, 75th Leg., ch. 1423, Sec. 19.18, eff. Sept. 1,
1997.
Sec. 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 available
by the comptroller. The purchaser shall place the order for
stamps directly with the comptroller.
Acts 1981, 67th Leg., p. 1641, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1985, 69th Leg., ch. 89, Sec. 1, eff. Aug.
26, 1985; Acts 1997, 75th Leg., ch. 1423, Sec. 19.19, eff. Sept.
1, 1997.
Sec. 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 purchase the required
stamps from any distributor through a requisition from the
comptroller so that the unstamped cigarettes may be stamped
immediately under the direction of the comptroller.
(b) The comptroller may issue the requisition. The requisition
shall be in triplicate on a form prescribed by the comptroller.
The copies shall be designated "original," "duplicate," and
"triplicate." The comptroller shall keep the original and send
the duplicate to the purchaser and the triplicate to the seller.
The purchaser and seller shall keep their respective copies
available at all times for four years for inspection by the
comptroller and the attorney general.
Acts 1981, 67th Leg., p. 1641, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 3, eff. Oct.
1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 6, eff. June 7,
1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.20, eff. Sept. 1,
1997.
Sec. 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
comptroller for exchange.
(c) If the comptroller recalls stamps and receives them from the
purchaser, the comptroller shall issue stamps with different
serial numbers for the recalled stamps.
Acts 1981, 67th Leg., p. 1641, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 4, eff. Oct.
1, 1989; Acts 1997, 75th Leg., ch. 1423, Sec. 19.21, eff. Sept.
1, 1997.
Sec. 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 numbered
consecutively. The invoice must show:
(1) the date of sale;
(2) the name and address of the distributor;
(3) the number of stamps;
(4) the serial numbers of the stamps; and
(5) the denomination and value of the stamps.
(c) The distributor shall have the original invoice available at
all times for four years for inspection by the comptroller and
the attorney general.
Acts 1981, 67th Leg., p. 1641, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 5, eff. Oct.
1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 7, eff. June 7,
1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.22, eff. Sept. 1,
1997.
Sec. 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 state depository under Section 404.022, Government
Code. The comptroller may ship the stamps to the bank with the
invoice required by Section 154.046 and a form draft.
(b) The comptroller shall prescribe the form of the draft. The
draft must show:
(1) the amount of the draft;
(2) the name of the distributor;
(3) the name and address of the bank; and
(4) the date of shipment.
(c) If the draft is not paid within 20 days after the date of
the draft, the bank shall return the draft and stamps to the
comptroller. The comptroller shall notify the distributor to
appear before the comptroller to show cause why the distributor
should not be denied the privilege of ordering stamps shipped
with draft attached. If the distributor fails to show good cause,
the comptroller may stop shipping stamps with draft attached.
Acts 1981, 67th Leg., p. 1642, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1985, 69th Leg., ch. 89, Sec. 2, eff. Aug.
26, 1985; Acts 1991, 72nd Leg., ch. 409, Sec. 8, eff. June 7,
1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.23, eff. Sept. 1,
1997.
Sec. 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 the comptroller are
received by the distributor, except that at the close of each
biennium, payment for stamps purchased or received on or before
August 31 of that fiscal year shall be made in full on or before
August 31 of that fiscal year, providing that such payment be
received in the office of the comptroller no later than August 31
of that fiscal year notwithstanding any other statute regarding
tax due dates to the contrary.
(b) The comptroller may not ship stamps without advance payment
under this section unless the distributor has satisfied all
requirements imposed under Section 154.051.
(c) Payment for stamps must be made by cashier's check payable
to the comptroller, electronic funds transfer to the comptroller,
or any other method of payment authorized by the comptroller.
(d) The dishonor of a check delivered to the comptroller for
payment of stamps constitutes a failure to pay the tax when due.
Acts 1981, 67th Leg., p. 1642, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1981, 67th Leg., p. 2779, ch. 752, Sec. 12,
eff. Jan. 1, 1982; Acts 1987, 70th Leg., ch. 580, Sec. 1, eff.
Sept. 1, 1987; Acts 1989, 71st Leg., ch. 240, Sec. 7, eff. Oct.
1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 10, eff. June 7,
1991; Acts 1997, 75th Leg., ch. 1040, Sec. 42, eff. Sept. 1,
1997; Acts 1997, 75th Leg., ch. 1423, Sec. 19.26, eff. Sept. 1,
1997.
Sec. 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 payment of cigarette taxes by distributors
who contribute to the fund. The fund is composed of the total
amount in the separate accounts maintained in trust for all
contributing distributors as provided by this section. The assets
of the fund, including interest earned by those assets, are to be
held in trust for the benefit and protection of the state
treasury, and may not be diverted, distributed, or appropriated
for any purpose other than as provided by this section. Interest
earned by a distributor's account but not yet refunded to the
distributor pursuant to Subsection (d) shall, on a monthly basis,
be paid to the comptroller as provided by Subsection (b) or
credited to the distributor's account.
(b) The comptroller is the trustee of the fund as provided by
Section 404.073, Government Code, and shall manage the fund as
provided by this section. In investing the assets of the fund,
the comptroller has the obligations, duties, and powers provided
for the investment of state funds by Sections 404.021 through
404.0245, Government Code. The comptroller shall receive five
percent of the interest earned on all assets of the fund as
compensation for serving as trustee of the fund.
(c) A distributor who orders stamps from the comptroller under
this chapter without advance payment shall contribute to an
account maintained in the distributor's name in the fund money in
the amount of each allowance to which the distributor is entitled
under Section 154.052. When the money in the distributor's
account equals 20 percent of the designated amount of stamps
requested by the distributor and approved by the comptroller to
be purchased in any one month, the distributor's interest in the
fund becomes vested.
(d) Except as provided by Subsection (g) of this section, on the
last day of each quarter after the quarter in which a
distributor's interest in the fund becomes vested, the
comptroller shall refund to the distributor all money contributed
to the fund by the distributor under Subsection (c) of this
section in the earliest preceding quarter for which a refund has
not been paid, plus interest earned on that amount, as long as
the distributor's interest in the fund remains vested.
(e) Until a distributor who orders stamps without advance
payment acquires a vested interest in the fund, the comptroller
may require the distributor to post with the comptroller an
irrevocable letter of credit drawn in the form and amount
specified by the comptroller to secure the payment of cigarette
taxes by that distributor. The comptroller may not ship stamps to
a distributor not having a vested interest in the fund without
advance payment until the distributor posts the required letter
of credit.
(f) In addition to any other requirement under this section, the
comptroller as a condition for shipping stamps without advance
payment may:
(1) require a fiscal-year-end financial statement, including a
balance sheet and income statement verifiable as to its accuracy
or other financial information acceptable to the comptroller and
verifiable as to its accuracy;
(2) require indemnification from each officer, director, and
stockholder owning 10 percent or more of outstanding stock, if
the distributor is a corporation, from each partner, if the
distributor is a partnership, from each member or owner of a
joint venture or syndication, and from the owner of a sole
proprietorship;
(3) require the distributor to obtain and provide the
comptroller with a credit report from a credit reporting agency
acceptable to the comptroller;
(4) require a distributor to increase the balance in its account
in the fund;
(5) require a distributor to post a letter of credit;
(6) reduce a distributor's credit time or amount; or
(7) take any other reasonable and necessary action to protect
the state treasury from loss due to the nonpayment of cigarette
taxes.
(g) If a distributor who has an account in the fund fails to pay
in full a tax imposed by this chapter by the due date, the
comptroller, without prior notice to the distributor or any other
preliminary procedure, may seize any unaffixed stamps and any
stamped cigarette packages, up to and including the full amount
of unpaid tax. If the proceeds from the seizure do not satisfy
the total tax deficiency or the comptroller does not seize any
unaffixed stamps or stamped cigarette packages, the comptroller
may withdraw immediately from the fund an amount equal to the
amount of unpaid taxes due. The comptroller shall first withdraw
the amount from the account of the defaulting distributor. The
comptroller shall use the comptroller's best efforts to collect
the tax due from the defaulting distributor before withdrawing
money from the other accounts in the fund to satisfy the tax
liability. If that distributor's account does not contain
sufficient money to satisfy the tax liability in full, the
comptroller shall withdraw the additional amount necessary to
satisfy that liability from the other accounts in the fund in
proportion to the balance of each account, except that the
withdrawal from any other distributor's account in the fund is
limited to an amount not greater than 50 percent of the
designated amount of stamps requested by the distributor under
Subsection (c) or of the amount required by the comptroller under
Subsection (f)(4). Not later than the fifth day after the date of
a withdrawal, the comptroller shall notify each distributor of
the withdrawal from its account and the amount withdrawn. If as a
result of a withdrawal made under this subsection a distributor's
balance in its account is reduced to an amount less than the
minimum required under this section, the distributor's interest
in the fund is no longer vested, and the comptroller may
discontinue refunds to the distributor under Subsection (d) until
the distributor again acquires a vested interest in the fund. The
comptroller may require a distributor whose interest in the fund
is no longer vested to post an irrevocable letter of credit with
the comptroller to secure the payment of cigarette taxes by the
distributor. To protect the fund, each distributor having an
account in the fund must indemnify the fund against any amount
withdrawn from the fund under this subsection because of the
failure of the distributor to pay in full a tax imposed by this
chapter by the due date.
(h) If distributor accounts, other than a defaulting distributor
account, are drawn pursuant to Subsection (g), each affected,
nondefaulting distributor shall have a claim against the
defaulting distributor for the amount so drawn. The comptroller
is hereby appointed trustee, agent, and assignee of each
affected, nondefaulting distributor for purposes of seeking
recovery of the amount so drawn. The comptroller shall have the
sole judgment and discretion in deciding whether or not to pursue
such a claim and shall have discretion to handle any such claim
on any basis that in the opinion of the comptroller is in the
best interest of the fund. The comptroller is released from any
liability related to the handling of the claims described in this
section except for intentional or wilful misconduct.
(i) A distributor or person authorized to act on behalf of a
distributor may notify the comptroller in writing that the
distributor no longer desires to have stamps shipped or a meter
set without advance payment, and may request that the money in
the distributor's account in the fund be paid to the distributor
or the distributor's heirs or assigns. The comptroller shall pay
the money in the distributor's account as requested at the end of
the next quarter after all outstanding taxes owed to the state by
the distributor have been paid.
(j) Under no circumstances shall the comptroller return to any
distributor an amount greater than the balance in the
distributor's account within the cigarette tax recovery trust
fund less any sums drawn pursuant to Subsection (g). The State of
Texas' liability to any distributor pursuant to this section is
expressly limited to the sums on deposit in the distributor's
account at the time the request for return of funds is made.
(k) The comptroller may adopt and enforce rules necessary to
carry out this section.
(l) For purposes of this section, "quarter" refers to a quarter
of the state's fiscal year.
(m) Information provided under Subsection (f) is confidential
and not subject to Chapter 552, Government Code.
(n) The comptroller shall regularly distribute financial
information regarding the performance of the fund to
participating distributors on a regular basis. On the written
request of a participating distributor, the comptroller shall
provide the distributor with the name and address of each
distributor participating in the fund, the percentage of the
total fund represented by each distributor's account, and the
total amount of money in the fund.
(o) In lieu of participation in the cigarette tax recovery trust
fund to secure payment for stamps and in lieu of advance payment
for stamps, a distributor may pledge to the comptroller
sufficient collateral to secure payment for stamps. Such pledge
shall be evidenced by a pledge agreement in a form promulgated by
the comptroller, and such collateral shall consist of
certificates of deposit, treasury notes, treasury bills, or other
similar types of collateral acceptable to the comptroller and
held in a separate trust fund established in the Texas Treasury
Safekeeping Trust Company. All interest earned on such collateral
shall belong to the distributor. The comptroller may require the
pledge of additional collateral in the event the comptroller
determines that the fair market value of the pledged collateral
is less than the amount due the comptroller for stamps. On the
written request of the distributor, the comptroller shall release
collateral from the pledge agreement or allow the substitution of
collateral subject to the pledge agreement if after such release
or substitution the fair market value of the collateral subject
to the pledge will be equal to or greater than the amount due the
comptroller for stamps. If a distributor fails to pay tax in full
when due, the comptroller may, if the distributor does not pay
such past due tax and any penalty related thereto within three
days after receipt of written notice of such failure from the
comptroller, sell or dispose of the collateral and apply the
proceeds to the payment of taxes, interest, penalties, and costs
due to the comptroller by the distributor, with any remaining
proceeds being refunded to the distributor.
Acts 1981, 67th Leg., p. 1643, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1985, 69th Leg., ch. 89, Sec. 3, eff. Aug.
26, 1985; Acts 1987, 70th Leg., ch. 580, Sec. 2, eff. Sept. 1,
1987; Acts 1991, 72nd Leg., ch. 409, Sec. 11, eff. June 7, 1991;
Acts 1995, 74th Leg., ch. 76, Sec. 5.95(88), eff. Sept. 1, 1995;
Acts 1995, 74th Leg., ch. 1000, Sec. 38, eff. Oct. 1, 1995; Acts
1997, 75th Leg., ch. 891, Sec. 3.20, eff. Sept. 1, 1997; Acts
1997, 75th Leg., ch. 1040, Sec. 43, eff. Sept. 1, 1997; Acts
1997, 75th Leg., ch. 1423, Sec. 19.27, eff. Sept. 1, 1997.
Sec. 154.052. DISTRIBUTOR'S STAMPING ALLOWANCE. (a) A
distributor is, subject to the provisions of Section 154.051,
entitled to three percent of the face value of stamps purchased
as a stamping allowance for providing the service of affixing
stamps to cigarette packages, except that an out-of-state
distributor is entitled to receive only the same percentage of
stamping allowance as that given to Texas distributors doing
business in the state of the distributor.
(b) If a distributor violates a provision of this chapter, the
distributor is not entitled to receive a stamping allowance for
the period of the violation. On a determination by the
comptroller that the distributor is no longer in violation of a
provision of this chapter, the distributor is entitled to receive
a stamping allowance.
Acts 1981, 67th Leg., p. 1643, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1987, 70th Leg., ch. 580, Sec. 3, eff.
Sept. 1, 1987; Acts 1989, 71st Leg., ch. 240, Sec. 8, eff. Oct.
1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 12, eff. June 7,
1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.28, eff. Sept. 1,
1997.
Sec. 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 of this chapter, the comptroller may change the
design, color, or denomination of the stamps. The comptroller
shall determine the size, design, color, or denomination, and
quantity of stamps manufactured. The stamps shall be manufactured
so that they may be easily and securely attached to an individual
package of cigarettes. The comptroller may designate the method
of identification for the stamps and shall award the contract for
the printing or manufacturing to the person submitting the bid
that will give the best protection to the state in enforcing this
chapter.
(b) The comptroller shall designate the date of issue of new
stamps by issuing a proclamation. The date of the proclamation is
the date of issue.
(c) The comptroller shall design and furnish stamps in a manner
that permits identification of the person that affixed the stamp
to the particular package of cigarettes by means of a number or
other mark on the stamp. The comptroller shall maintain for at
least four years the information identifying the person that
affixed the stamp to each package of cigarettes.
Acts 1981, 67th Leg., p. 1643, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 9, eff. Oct.
1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 13, eff. June 7,
1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.29, eff. Sept. 1,
1997; Acts 2001, 77th Leg., ch. 1104, Sec. 2, eff. Sept. 1, 2001.
Sec. 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 stamps in the manner the
comptroller considers best.
Acts 1981, 67th Leg., p. 1643, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 10, eff.
Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 14, eff. June
7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.3, eff. Sept. 1,
1997.
Sec. 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 of an old design, color, or denomination shall
immediately inventory the packages and any unused stamps of an
old design, color, or denomination and file a report of the
inventory with the comptroller.
(b) Not later than the 30th day after the date of the increase,
each distributor, wholesaler, and retailer shall pay the amount
of the additional tax due because of the tax increase by
attaching to the inventory a cashier's check payable to the
comptroller, by electronic funds transfer to the comptroller or
by any other method of payment authorized by the comptroller.
(c) Each distributor, wholesaler, and retailer shall keep a copy
of the inventory and must be able to document the method of
payment used.
(d) This section does not affect the date payment is due for
stamps of an old design, color, or denomination if payment has
not been made for the stamps on or before the effective date of
the tax increase.
Acts 1981, 67th Leg., p. 1644, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 2, eff. March
1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 12, eff. Oct. 1,
1989; Acts 1991, 72nd Leg., ch. 409, Sec. 15, eff. June 7, 1991;
Acts 1997, 75th Leg., ch. 1423, Sec. 19.31, eff. Sept. 1, 1997.
Sec. 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 the
genuineness of the stamp.
Acts 1981, 67th Leg., p. 1644, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 13, eff.
Oct. 1, 1989; Acts 1997, 75th Leg., ch. 1423, Sec. 19.32, eff.
Sept. 1, 1997.
Sec. 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 penalty, and if
the distributor fails to pay the tax within 30 days after the day
on which the tax is due, the distributor shall pay an additional
five percent.
(b) The minimum penalty imposed by this section is $50.
(c) The dishonor of a check delivered to the treasury for
payment of taxes constitutes a failure to pay the tax when due.
Added by Acts 1991, 72nd Leg., ch. 409, Sec. 16, eff. June 7,
1991.
SUBCHAPTER D. PERMITS
Sec. 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
received the applicable permit from the comptroller.
(b) Each distributor, wholesaler, bonded agent, manufacturer,
importer, or retailer shall obtain a permit for each place of
business owned or operated by the distributor, wholesaler, bonded
agent, manufacturer, importer, or retailer.
(c) The comptroller shall prescribe the form and content of an
application for a permit and shall furnish the form on request of
an applicant.
(d) The applicant shall accurately complete all information
required by the application and provide the comptroller with such
additional information as the comptroller deems necessary.
(e) The comptroller may require each corporation, association,
joint venture, syndicate, partnership, or proprietorship to
furnish financial information regarding the applicant and to
provide the identity of each officer, director, stockholder
owning 10 percent or more of the outstanding stock, partner,
member, owner, or managing employee.
(f) Each distributor, wholesaler, and retailer that applies for
a permit to sell cigarettes from a vehicle must provide the make,
model, vehicle identification number, registration number, and
any other information required by the comptroller.
(g) All financial information provided under this section is
confidential and not subject to Chapter 552, Government Code.
(h) Permits for engaging in business as a distributor,
wholesaler, bonded agent, manufacturer, importer, or retailer
shall be governed exclusively by the provisions of this code.
Acts 1981, 67th Leg., p. 1645, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 3, eff. March
1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 14, eff. Oct. 1,
1989; Acts 1991, 72nd Leg., ch. 409, Sec. 17, eff. June 7, 1991;
Acts 1995, 74th Leg., ch. 76, Sec. 5.95(88), eff. Sept. 1, 1995;
Acts 1995, 74th Leg., ch. 1000, Sec. 39, eff. Oct. 1, 1995; Acts
1997, 75th Leg., ch. 1423, Sec. 19.33, eff. Sept. 1, 1997; Acts
2001, 77th Leg., ch. 1263, Sec. 47, eff. Oct. 1, 2001.
Sec. 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 a permit holder may not sell or
distribute more than 200 individual cigarettes to any person.
Added by Acts 1991, 72nd Leg., ch. 409, Sec. 18, eff. June 7,
1991.
Sec. 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, or retailer as defined by this chapter
and Chapter 155 for both cigarettes and tobacco products.
(b) A person who receives a combination permit pays only the
higher of the two permit fees.
Added by Acts 1991, 72nd Leg., ch. 409, Sec. 19, eff. June 7,
1991. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.34, eff.
Sept. 1, 1997; Acts 2001, 77th Leg., ch. 1263, Sec. 48, eff. Oct.
1, 2001.
Sec. 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) the premises where business will be conducted are not
adequate to protect the cigarettes or cigarette stamps; 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
percent or more of the corporation's stock, or, if the applicant
is a partnership, a partner or manager:
(A) has failed to disclose any information required by Sections
154.101(d), (e), and (f), including prior business experience,
financial condition of the permit holder, present or previous
business affiliations, prior employment, and any conviction of a
felony, or has made a false statement in the application; or
(B) has previously violated provisions of this chapter.
Acts 1981, 67th Leg., p. 1646, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1989, 71st Leg., ch. 240, Sec. 19, eff.
Oct. 1, 1989; Acts 1991, 72nd Leg., ch. 409, Sec. 20, eff. June
7, 1991; Acts 1997, 75th Leg., ch. 1423, Sec. 19.35, eff. Sept.
1, 1997.
Sec. 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 and fee, if required;
(2) believes that the applicant has complied with Section
154.101; and
(3) determines that issuing the permit will not jeopardize the
administration and enforcement of this chapter.
(b) The permit shall be issued for a designated place of
business, except as provided by Section 154.117.
(c) The permits are nonassignable.
(d) The permit must indicate the type of permit that it is and
authorize the sale of cigarettes in this state. The permit must
show that it is revocable and shall be forfeited or suspended if
the conditions of issuance, provisions of this chapter, or rules
of the comptroller are violated.
Acts 1981, 67th Leg., p. 1646, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 7, eff. March
1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 21, eff. Oct. 1,
1989; Acts 1991, 72nd Leg., ch. 409, Sec. 21, eff. June 7, 1991;
Acts 1997, 75th Leg., ch. 1423, Sec. 19.36, eff. Sept. 1, 1997;
Acts 2001, 77th Leg., ch. 1263, Sec. 49, eff. Oct. 1, 2001.
Sec. 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 154.101 expires on
the last day of May of each even-numbered year.
(b) An application for a permit required by this chapter must be
accompanied by a fee of:
(1) $300 for a bonded agent's permit;
(2) $300 for a distributor's permit;
(3) $200 for a wholesaler's permit;
(4) $15 for each permit for a vehicle if the applicant is also
applying for a permit as a bonded agent, distributor, or
wholesaler or has received a current permit from the comptroller
under Sections 154.101 and 154.110; and
(5) $180 for a retailer's permit.
(c) Repealed by Acts 1997, 75th Leg., ch. 671, Sec. 4.01, eff.
Sept. 1, 1997.
(d) For a new or renewal permit required by Section 154.101, the
comptroller shall prorate the fee according to the number of
months remaining during the calendar year that the permit is to
be in effect.
(e) A person who does not obtain a permit each year in a timely
manner must pay a fee of $50 in addition to the application fee
for the permit.
(f) If at the date of issuance a permit will expire within three
months, the comptroller may collect the prorated permit fee or
the fee for the current year and, with the consent of the permit
holder, may collect the fee for the next permit year and issue a
permit or permits for both periods, as applicable.
(g) Expired.
Acts 1981, 67th Leg., p. 1647, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 8, eff. March
1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 22, eff. Oct. 1,
1989; Acts 1991, 72nd Leg., ch. 409, Sec. 21, eff. June 7, 1991;
Acts 1997, 75th Leg., ch. 671, Sec. 4.01, eff. Sept. 1, 1997;
Acts 1997, 75th Leg., ch. 1423, Sec. 19.37, eff. Sept. 1, 1997.
Sec. 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 or by money order or check.
(c) A permit may not be issued in exchange for a check until
after the comptroller has received full payment on the check.
Added by Acts 1991, 72nd Leg., ch. 409, Sec. 22, eff. June 7,
1991. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.38, eff.
Sept. 1, 1997.
Sec. 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 permit holder violated this chapter or an
administrative rule made under this chapter.
(b) If the comptroller intends to suspend or revoke a permit,
the comptroller shall provide the permit holder with written
notice that includes a statement:
(1) of the reason for the intended revocation or suspension;
(2) that the permit holder is entitled to a hearing by the
comptroller on the proposed suspension or revocation of the
permit; and
(3) of the date, time, and place of the hearing.
(c) The comptroller shall deliver the written notice by personal
service or by mail to the permit holder's mailing address as it
appears on the comptroller's records. Service by mail is complete
when the notice is deposited with the U.S. Postal Service.
(d) The comptroller shall give the permit holder not less than
10 days' notice of a final hearing.
(e) A permit holder may appeal the decision of the comptroller
to a district court in Travis County not later than the 30th day
after the date the comptroller's decision becomes final.
(f) A person whose permit is suspended or revoked may not sell,
offer for sale, or distribute cigarettes from the place of
business to which the permit applied until a new permit is
granted or the suspension is removed.
(g) If the comptroller suspends or revokes a permit, the
comptroller shall provide written notice of the suspension or
revocation, within a reasonable time, to each distributor and
wholesaler permit holder in the state. A distributor or
wholesaler permit holder violates Section 154.1015(a) by selling
or distributing cigarettes to a person whose permit has been
suspended or revoked only after the distributor or wholesaler
permit holder receives written notice of the suspension or
revocation from the comptroller.
Acts 1981, 67th Leg., p. 1647, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 9, eff. March
1, 1986; Acts 1989, 71st Leg., ch. 240, Sec. 25, eff. Oct. 1,
1989; Acts 1991, 72nd Leg., ch. 409, Sec. 23, eff. June 7, 1991;
Acts 1995, 74th Leg., ch. 1000, Sec. 40, eff. Oct. 1, 1995; Acts
1997, 75th Leg., ch. 1423, Sec. 19.39, eff. Sept. 1, 1997; Acts
1999, 76th Leg., ch. 1467, Sec. 2.39, eff. Oct. 1, 1999.
Sec. 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 adopted under this chapter if the person's continued
operation constitutes an immediate and substantial threat to the
collection of taxes imposed by this chapter and attributable to
the person's operation.
(b) If the comptroller summarily suspends a person'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 10 days after the date of the summary
suspension, unless the parties agree to a later date.
(c) At the preliminary hearing, the permit holder must show
cause why the permit should not remain suspended pending a final
hearing on suspension or revocation.
(d) Chapter 2001, Government Code, does not apply to a summary
suspension under this section.
(e) To initiate a proceeding to suspend summarily a person's
permit, the comptroller shall serve notice on the permit holder
informing the permit holder of the right to a preliminary hearing
before the comptroller or the comptroller's representative and of
the time and place of the preliminary hearing. The notice must be
personally served on the permit holder or an officer, employee,
or agent of the permit holder or sent by certified or registered
mail, return receipt requested, to the permit holder's mailing
address as it appears in the comptroller's records. The notice
must state the alleged violations that constitute the grounds for
summary suspension. The suspension is effective at the time the
notice is served. If the notice is served in person, the permit
holder shall immediately surrender the permit to the comptroller
or the comptroller's representative. If notice is served by mail,
the permit holder shall immediately return the permit to the
comptroller.
(f) Section 154.114, governing hearings for final suspension or
revocation of a permit under this chapter, governs a final
administrative hearing under this section.
Added by Acts 1995, 74th Leg., ch. 1000, Sec. 41, eff. Oct. 1,
1995. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.40, eff.
Sept. 1, 1997.
Sec. 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
under Subchapter H, Chapter 161, Health and Safety Code; and
(2) the retailer, with criminal negligence, failed to prevent
the offense through adequate supervision and training of the
agent or employee.
(b) If the comptroller finds, after notice and an opportunity
for a hearing as provided by this subchapter, that a permit
holder has violated Subchapter H or K, Chapter 161, Health and
Safety Code, at a place of business for which a permit is issued,
the comptroller may suspend the permit for that place of business
or administratively assess a fine as follows:
(1) if the permit holder has not been found to have violated
Subchapter H or K, Chapter 161, Health and Safety Code, at that
place of business during the preceding 12 months, the comptroller
may require the permit holder to pay a fine in an amount not to
exceed $500;
(2) if the permit holder has been found to have violated
Subchapter H or K, Chapter 161, Health and Safety Code, at that
place of business once during the preceding 12 months, the
comptroller may require the permit holder to pay a fine in an
amount not to exceed $750; and
(3) if the permit holder has been found to have violated
Subchapter H or K, Chapter 161, Health and Safety Code, at that
place of business at least twice during the preceding 12 months,
the comptroller may require the permit holder to pay a fine in an
amount not to exceed $1,000 or suspend the permit for that place
of business for not more than three days.
(c) Except as provided by Section 154.1143, if the permit holder
has been found to have violated Section 161.082(b), Health and
Safety Code, on four or more previous and separate occasions at
the same place of business during the preceding 12 months, the
comptroller shall revoke the permit.
(d) A retailer whose permit has been revoked under this section
may not apply for a retailer's permit for the same place of
business before the expiration of six months after the effective
date of the revocation.
Added by Acts 1997, 75th Leg., ch. 671, Sec. 4.03, eff. Sept. 1,
1997. Amended by Acts 1999, 76th Leg., ch. 1157, Sec. 1, eff.
Sept. 1, 1999.
Sec. 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
cigarettes or tobacco products to a minor, the comptroller may
suspend a permit but may not revoke the permit under Section
154.1142(c) if the comptroller finds that:
(1) the employer has not violated Section 161.082(b), Health and
Safety Code, more than seven times at the place of business for
which the permit is issued in the 24-month period preceding the
violation in question;
(2) the employer requires its employees to attend a
comptroller-approved seller training program;
(3) the employee has actually attended a comptroller-approved
seller training program; and
(4) the employer has not directly or indirectly encouraged the
employee to violate the law.
(b) The comptroller shall adopt rules or policies establishing
the minimum requirements for approved seller training programs.
On application, the comptroller shall approve seller training
programs meeting the requirements that are sponsored privately or
by public community colleges. The comptroller may charge an
application fee in an amount necessary to defray the expense of
processing the application.
(c) The comptroller may approve under this section a seller
training program sponsored by a permit holder for the purpose of
training its employees without regard to whether the employees
are located at the same place of business. This subsection
applies only to a permit holder who employs at least 100 persons
at any one time during the permit year who sell cigarettes or
tobacco products.
Added by Acts 1997, 75th Leg., ch. 671, Sec. 4.04, eff. Sept. 1,
1997.
Sec. 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 may designate one or more representatives to
conduct the hearings and may prescribe the rules of procedure
governing the hearings.
Added by Acts 1991, 72nd Leg., ch. 409, Sec. 24, eff. June 7,
1991. Amended by Acts 1995, 74th Leg., ch. 76, Sec. 5.95(49),
eff. Sept. 1, 1995; Acts 1995, 74th Leg., ch. 1000, Sec. 42, eff.
Oct. 1, 1995; Acts 1997, 75th Leg., ch. 1423, Sec. 19.41, eff.
Sept. 1, 1997.
Sec. 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 a valid permit.
Acts 1981, 67th Leg., p. 1648, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1997, 75th Leg., ch. 1423, Sec. 19.42, eff.
Sept. 1, 1997.
Sec. 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 holder who has a permit assigned to a vehicle
shall post the permit in a conspicuous place on the vehicle.
(c) Each retailer who operates a cigarette vending machine shall
place a retailer's permit on the machine.
Acts 1981, 67th Leg., p. 1648, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1991, 72nd Leg., ch. 409, Sec. 25, eff.
June 7, 1991.
Sec. 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 as
other revenue allocated by Subchapter J.
(b) Revenue from the sale of retailer's permits shall be
deposited to the general revenue fund and may be appropriated
only as provided by this section. The money may be appropriated
first to the comptroller for administration of licensing of
retailers under this chapter or Chapter 155.
(c) If, after any appropriation is made under Subsection (b),
revenue remains from the sale of retailer's permits, the
remaining money may be appropriated to the comptroller for
administration and enforcement of Subchapters H, K, and N,
Chapter 161, Health and Safety Code, and to the Texas Department
of Health, for the administration and enforcement of Section
161.253, Health and Safety Code.
(d) If, after any appropriation is made under Subsections (b)
and (c), revenue remains from the sale of retailer's permits, the
remaining money may be appropriated to the Texas Department of
Health to administer the commissioner of public health's
responsibilities under Section 161.301, Health and Safety Code.
(e) If, after any appropriation is made under Subsections (b),
(c), and (d), revenue remains from the sale of retailer's
permits, the remaining money may be appropriated to the
appropriate entity to administer that entity's responsibilities
under Section 161.302, Health and Safety Code.
Acts 1981, 67th Leg., p. 1648, ch. 389, Sec. 1, eff. Jan. 1,
1982. Amended by Acts 1985, 69th Leg., ch. 58, Sec. 12, eff.
March 1, 1986; Acts 1991, 72nd Leg., ch. 409, Sec. 25, eff. June
7, 1991; Acts 1997, 75th Leg., ch. 671, Sec. 4.02, eff. Sept. 1,
1997.
SUBCHAPTER E. INTERSTATE BUSINESS
Sec. 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 part of the
building from the stamped packages. If the unstamped packages for
interstate sale or for which no tax is due under federal law are
not stored separately, the cigarettes are subject to the same
requirements as cigarettes possessed for the purpose of a first
sale in this state.
(b) A distributor who possesses unstamped cigarette packages for
interstate sale must possess a number of unused stamps from the
appropriate state sufficient to stamp the distributor's inventory
of unstamped interstate cigarettes, except for cigarette packages
for which no tax is due under federal law. Any unstamped packages
of cigarettes that exceed the number of out-of-state stamps on
hand shall be presumed to be held for sale in this state, except
for cigarette packages for which no tax is due under federal law.
(c) A person may not transport or cause to be transp