PCA

Texas

Alerts & Updates

Key Contacts

Texas Comptroller of Public Accounts
(512) 463-3731

Texas Ethics Commission
(512) 463-5800

PCA Contact

Glynne Loope glynn@premiumcigars.org

Legislative Information

State Representatives

ex: 1600 Pennsylvania Ave, Washington, DC 20500

2019 Session Info
2019 Partisan Splits

Taxation

Texas imposes a tax on cigars and other tobacco products when a distributor receives them for the purpose of making the first sale in Texas.

First sale = the first transfer of possession in connection with a purchase, sale, or any exchange for value of tobacco products in intrastate commerce; the first use or consumption of tobacco products in Texas; or the loss of tobacco products in Texas whether through negligence, theft, or other unaccountable loss.

A tax is imposed on manufacturers who manufacture tobacco products in Texas at the time the tobacco products are first transferred in connection with a purchase, sale, or any exchange for value in intrastate commerce.

Tex. Tax Code § 155.021

Tex. Tax Code § 155.0211

Tex. Tax Code § 155.022

Texas HB 3475 (2019) states that a permitted distributor who makes the first sale to a permitted distributor in this state is liable for and shall pay the tax.

Raw tobacco sold to a permitted manufacturer in this state for the purpose of using the tobacco in manufacturing is not subject to the 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 charged to the ultimate consumer or user.

Texas HB 4614 (2019) imposes a tax on the first sale of cigarettes. A first sale includes at least one of the following: 

  1. Sale of cigarettes by a distributor located outside of this state to a distributor, wholesaler, or a retailer within this state
  2. Sale of cigarettes by a distributor inside this state who sells to a distributor, wholesaler, or a retailer within this state
  3. Sale of cigarettes by a manufacturer located in this state who transfers the cigarettes in this state.

A first sale does not include the sale of cigarettes by a manufacturer located outside of this state to a distributor in this state or the transfer of cigarettes from a manufacturer to a bonded agent in this state.

Each distributor, wholesaler, bonded agent, manufacturer, export warehouse, importer, or retailer shall obtain a permit for each place of business owned or operated by the distributor, wholesaler, bonded agent, manufacturer, export warehouse, importer, or retailer.

A research facility that only possesses and uses cigarettes for experimental purposes is not subject to the provisions of this section.

A person engaged in the business of selling cigarettes for commercial purposes and who provides a roll-your-own machine available for use by consumers must obtain a manufacturer’s, distributor’s, and a retailer’s permit.

The tax rates on cigars are as follows:

  • $0.01 per 10 or fraction of 10 on cigars weighing 3 pounds or less per 1,000
  • $7.50 per 1,000 on cigars that:
    • weigh more than 3 pounds per 1,000; and
    • sell at factory list price for $0.033 each
  • $11 per 1,000 on cigars that:
    • weigh more than 3 pounds per 1,000;
    • sell at factory list price for more than $0.033 each; and
    • contain no substantial amount of nontobacco ingredients
  • $15 per 1,000 on cigars that:
    • weigh more than 3 pounds per 1,000;
    • sell at factory list price for more than $0.033 each; and
    • contain a substantial amount of non-tobacco ingredients

The tax rate on tobacco products other than cigars is $1.22 per ounce and a proportionate rate on all fractional parts of an ounce.

Tex. Tax Code § 155.021

Tex. Tax Code § 155.0211

Every entity that intends to store or offer for sale any cigarette, cigar, and/or tobacco products, or that owns cigars in a humidor and sells them to the public, must first obtain a Sales and Use Tax Permit by filing a Texas Sales and Use Tax Application (Form AP-201).

Tex. Tax Code § 155.041

Tex. Tax Code § 155.049

Each permitted distributor who receives cigars and/or tobacco products for the purpose of making the first sale in Texas must also file, by the last day of each month, the Texas Distributor Monthly Report of Cigar and/or Tobacco Products (Form 69-133), the Class W Worksheet (Form 69-134), the Distributor Report of Interstate Sales of Cigars and Tobacco Products (Form 69-135), and the Distributor Receiving Record of Cigar and Tobacco Products (Form 69-136), along with payment for taxes due.

Tex. Tax Code § 155.111

Form Type / NameForm Number / Link
Texas Comptroller of Public Accounts: Cigarette, Cigar, and Tobacco Products Report FormsTax Forms
Texas web file eStemsTexas web file eStems

Cigar and Smoking Tobacco Definitions

“Cigar” means a roll of fermented tobacco that is wrapped in tobacco and the mainstream of smoke from which produces an alkaline reaction to litmus paper.

Tex. Tax Code § 155.001(2)

“Tobacco product” means: a cigar; smoking tobacco, including granulated, plug-cut, crimp-cut, ready-rubbed, and any form of tobacco suitable for smoking in a pipe or as a cigarette; chewing tobacco, including Cavendish, twist, plug, scrap, and any kind of tobacco suitable for chewing; snuff or other preparations of pulverized tobacco; or an article or product that is made of tobacco or a tobacco substitute and that is not a cigarette.

Tex. Tax Code § 155.001(15)

“First sale” means: the first transfer of possession in connection with a purchase, sale, or any exchange for value of tobacco products in intrastate commerce; the first use or consumption of tobacco products in Texas; or the loss of tobacco products in Texas whether through negligence, theft, or other unaccountable loss.

Tex. Tax Code § 155.001(8)

A “distributor” is a person who: receives tobacco products from a manufacturer for the purpose of making the first sale in Texas or otherwise brings or causes to be brought into Texas tobacco products for sale, use, or consumption; manufactures or produces tobacco products; or is an importer or import broker.

Tex. Tax Code § 155.001(6)

An “importer” or “import broker” is a person who ships, transports, or imports into Texas tobacco products manufactured or produced outside the United States for the purpose of making the first sale in Texas.

Tex. Tax Code § 155.001(9)

“Manufacturer” means a person who manufactures, fabricates, or assembles cigarettes, or causes or arranges for the manufacture, fabrication, or assembly of cigarettes, for sale or distribution.

Texas HB 3475 (2019)

A “retailer” is a person who engages in the practice of selling tobacco products to consumers and includes the owner of a coin-operated vending machine.

Tex. Tax Code § 155.001(14)

A “wholesaler” is a person who sells or distributes tobacco products in Texas for resale but who is not a distributor.

Tex. Tax Code § 155.001(16)

“Engage in business” means, in relation to cigarettes, engaging by a person, either directly or through a representative, in any of the following activities:

  • selling cigarettes in or into this state; 
  • using a warehouse or another location to store cigarettes; or
  • otherwise conducting through a physical presence cigarette-related business in this state.

Texas HB 3475 (2019)

Restrictions

Texas law prohibits smoking in a facility of a public primary or secondary school, elevator, enclosed theater or movie house, library, museum, hospital, transit system bus or intrastate bus, plane, or train, at a child-care center or on its premises, or at a school-related or school-sanctioned activity on or off school property.

Tex. Penal Code § 48.01: Smoking Tobacco

Tex. Educ. Code § 38.006: Tobacco on School Property

Tex. Admin. Code, Title 40, Part 19, Subchapter S, Division 1, § 746.3703(d)

Texas law contains no specific provisions concerning state preemption of local smoking restrictions, so cities may enact and enforce more stringent smoking restrictions. 

Smoking is allowed in most public places and workplaces. A specific exception is made for a participant in an authorized theatrical performance.

Tex. Penal Code § 48.01: Smoking Tobacco

As of September 1, 2019, it will be explicitly illegal to sell, give, supply or otherwise provide tobacco to individuals under 21, US Military personnel exempt. In addition, anyone born on or before 31 August 2001 is exempt. Minors may not purchase, attempt to purchase, possess, attempt to possess or consume tobacco products in public.

Exception: Any individual between 18 and 21 years of age possessing a cigarette or tobacco product in the presence of an adult parent, a guardian, or a spouse of the individual or an employer of the individual, if possession or receipt of the tobacco product is required in the performance of the employee’s duties as an employee.

Tex. Health & Safety Code § 161.252(a) and (b)

A person may not sell, give, or cause to be sold or given a cigarette or tobacco product to someone younger than 27 years of age unless the person to whom the product was sold or given presents apparently valid proof of identification.

Tex. Health & Safety Code § 161.083

Retail sellers of cigarettes or tobacco products must post a conspicuous sign that states:

PURCHASING OR ATTEMPTING TO PURCHASE TOBACCO PRODUCTS BY A MINOR UNDER 21 YEARS OF AGE IS PROHIBITED BY LAW. SALE OR PROVISION OF TOBACCO PRODUCTS TO A MINOR UNDER 21 YEARS OF AGE IS PROHIBITED BY LAW. UPON CONVICTION, A CLASS C MISDEMEANOR, INCLUDING A FINE OF UP TO $500, MAY BE IMPOSED. VIOLATIONS MAY BE REPORTED TO THE TEXAS COMPTROLLER’S OFFICE BY CALLING (insert toll-free telephone number). PREGNANT WOMEN SHOULD NOT SMOKE. SMOKERS ARE MORE LIKELY TO HAVE BABIES WHO ARE BORN PREMATURE OR WITH LOW BIRTH WEIGHT.

Tex. Health & Safety Code § 161.084(b)

State law does not preempt a local regulation of the sale, distribution, or use of cigarettes or tobacco products or affect the authority of a political subdivision to adopt or enforce an ordinance or requirement relating to the sale, distribution, or use of cigarettes or tobacco products if the regulation, ordinance, or requirement: is compatible with and equal to or more stringent than state requirements; or relates to an issue not specifically addressed by state law.

Tex. Health & Safety Code § 161.089

In Texas, it is illegal for a person to distribute to persons younger than 21 years of age a free sample of a cigarette or tobacco product; or a coupon or other item that the recipient may use to receive a free or discounted cigarette or tobacco product; or a sample cigarette or tobacco product.

Tex. Health & Safety Code § 161.087(a)

Staff reported that the tobacco products tax must be paid by manufacturers who distribute promotional or “gratis” tobacco products in Texas.

State law does not preempt a local regulation of the sale, distribution, or use of cigarettes or tobacco products or affect the authority of a political subdivision to adopt or enforce an ordinance or requirement relating to the sale, distribution, or use of cigarettes or tobacco products if the regulation, ordinance, or requirement: is compatible with and equal to or more stringent than state requirements; or relates to an issue not specifically addressed by state law.

Tex. Health & Safety Code § 161.089

Operating Your Business

Every entity or person engaged in business in Texas must obtain a Texas Sales and Use Tax Permit by submitting a Texas Application for Texas Sales and Use Tax Permit (Form AP-201). This form may be submitted online. 

Every entity that intends to manufacture, import, wholesale, distribute, or store any cigarette, cigar, and/or tobacco product in Texas must first obtain the following:

  • Non-Retailer Cigarette, Cigar, and/or Tobacco Products Permit for each place of business by filing the Texas Application for Non-Retailer Cigarette, Cigar, and/or Tobacco Products Permit (Form AP-175)
  • Corresponding permit fee:
ENTITY TYPEFEE
Bonded Agent$300
Distributor$300
Manufacturer$300
Wholesaler$200
Vehicle$15
ImporterNO FEE

Non-Retailer Permits expire on the last day of February each year and must be renewed annually. Pre-printed renewal packets are mailed to the taxpayer’s mailing address during the second week of November.

Every entity that intends to store or offer for sale any cigarette, cigar, and/or tobacco products, or that owns cigars in a humidor and sells them to the public, must first obtain a Sales and Use Tax Permit by filing a Texas Sales and Use Tax Application (Form AP-201). All retailers must then obtain a Retailer Cigarette, Cigar, and/or Tobacco Products Taxes Permit by filing a Texas Application for Retailer Cigarette, Cigar, and/or Tobacco Products Taxes Permit (Form AP-193) and a permit fee of $180. Retailer permits expire on the last day of May of each even-numbered year. Pre-printed renewal packets are mailed to the taxpayer’s mailing address during the first week of February of each even-numbered year.

Tex. Tax Code § 155.041

Tex. Tax Code § 155.049

Each permitted distributor who receives cigars and/or tobacco products for the purpose of making the first sale in Texas must also file, by the last day of each month, the Texas Distributor Monthly Report of Cigar and/or Tobacco Products (Form 69-133), the Class W Worksheet (Form 69-134), the Distributor Report of Interstate Sales of Cigars and Tobacco Products (Form 69-135), and the Distributor Receiving Record of Cigar and Tobacco Products (Form 69-136), along with payment for taxes due.

Tex. Tax Code § 155.111

Localities may require additional business licenses.

Form Type / NameForm Number / Link
Texas Comptroller of Public Accounts: Cigarette, Cigar, and Tobacco Products Report FormsForms

Political Involvement

A person must register as a “lobbyist” if said person:

  • Makes a total expenditure of more than $500 in a calendar quarter, not including the person’s own travel, food, or lodging expenses or the person’s own membership dues, on transportation and lodging, food and beverages, entertainment, gifts, and other expenses made to communicate directly with one or more members of the legislative or executive branch to influence legislation or administrative action; or
  • Receives, or is entitled to receive under an agreement under which the person is retained or employed, compensation or reimbursement, not including reimbursement for the person’s own travel, food, or lodging expenses or the person’s own membership dues, of more than $1,000 in a calendar quarter from another person to communicate directly with a member of the legislative or executive branch to influence legislation or administrative action.

Tex. Gov. Code § 305.003: Persons Required to Register

Tex. Gov. Code § 305.006: Activities Report

1 Tex. Admin. Code § 34.41: Expenditure Threshold

1 Tex. Admin. Code § 34.43: Compensation and Reimbursement Threshold

However, the following persons are not required to register as lobbyists:

  • one who owns, publishes, or is employed by a newspaper, any other regularly published periodical, a radio station, a television station, a wire service, or any other bona fide news medium that in the ordinary course of business disseminates news, letters to the editors, editorial or other comment, or paid advertisements that directly or indirectly oppose or promote legislation or administrative action, if the person does not engage in further or other activities that require registration under this chapter and does not represent another person in connection with influencing legislation or administrative action;
  • one whose only direct communication with a member of the legislative or executive branch to influence legislation or administrative action is an appearance before or testimony to one or more members of the legislative or executive branch in a hearing conducted by or on behalf of either the legislative or the executive branch and who does not receive special or extra compensation for the appearance other than actual expenses incurred in attending the hearing;
  • one whose only activity is to encourage or solicit members, employees, or stockholders of an entity by whom the person is reimbursed, employed, or retained to communicate directly with members of the legislative or executive branch to influence legislation or administrative action;
  • one whose only activity to influence legislation or administrative action is to compensate or reimburse an individual registrant to act in the person’s behalf to communicate directly with a member of the legislative or executive branch to influence legislation or administrative action;
  • one whose only activity to influence legislation or administrative action is attendance at a meeting or entertainment event attended by a member of the legislative or executive branch if the total cost of the meeting or entertainment event is paid by a business entity, union, or association;
  • one whose only compensation consists of reimbursement for any wages not earned due to attendance at a meeting or entertainment event, travel to and from the meeting or entertainment event, admission to the meeting or entertainment event, and any food and beverage consumed at the meeting or entertainment event if the meeting or entertainment event is attended by a member of the legislative or executive branch and if the total cost of the meeting or entertainment event is paid by a business entity, union, or association; and
  • one who communicates directly with a member of the legislative or executive branch on behalf of a political party concerning legislation or administrative action, and whose expenditures and compensation combined do not exceed $5,000 a calendar year.

Tex. Gov. Code § 305.004

“Lobby activity” means direct communication with and preparation for direct communication with a member of the legislative or executive branch to influence legislation or administrative action.

Tex. Ethics. Comm. Rules § 34.1

Each person who meets either the Expenditure Threshold (more than $500 in a calendar quarter) or the Compensation and Reimbursement Threshold (more than $1,000 in a calendar quarter) must register as a lobbyist with the Texas Ethics Commission.

To register, each lobbyist must complete the following:

  1. Obtain an electronic filing password (Form LOBBY PASS) and electronically file the Lobby Registration Form (Form REG)
  2. File Schedules A and B
  3. File a Confidential Social Security Information form (Form SSN)
  4. Remit the appropriate registration fee:
ENTITY TYPEREGISTRATION FEE
Registrants$750
Tax-Exempt Organizations$150
Independent Contractors$75

Registrations expire on December 31stof each year and must be renewed annually.

Tex. Gov. Code § 305.005

All lobbyists registered with the Texas Ethics Commission are also required to file a Lobby Activities Report (Form LA) and Schedules A through G, detailing lobby expenditures, by the 10th day of each month.

Tex. Gov. Code § 305.006

Form Type / NameForm Number / Link
Registration of LobbyistsTex. Gov. Code § 305
Texas Ethics Commission: Lobbying ResourcesLobbying Resources

Shipping Regulations

Texas does not have any specific restrictions concerning the shipping of tobacco products to consumers. However, Texas has specific restrictions concerning the shipping of cigarettes to consumers. 

Every entity or person engaged in business in Texas must obtain a Texas Sales and Use Tax Permit by submitting a Texas Application for Texas Sales and Use Tax Permit (Form AP-201). This form may be submitted online with Comptroller.Texas.Gov. 

Additional information about licensing in Texas is available under the Operating Your Business and Definitions tabs above.

Texas does not have any specific age verification requirements for the shipping of tobacco products. Sellers must comply with general age verification requirements. 

Texas imposes a tax on cigars and other tobacco products when a distributor receives them for the purpose of making the first sale in Texas.

First sale = the first transfer of possession in connection with a purchase, sale, or any exchange for value of tobacco products in intrastate commerce; the first use or consumption of tobacco products in Texas; or the loss of tobacco products in Texas whether through negligence, theft, or other unaccountable loss.

A tax is imposed on manufacturers who manufacture tobacco products in Texas at the time the tobacco products are first transferred in connection with a purchase, sale, or any exchange for value in intrastate commerce.Staff reported that Texas localities do not levy additional tobacco products excise taxes, but retailers may be responsible for collecting additional local sales taxes on tobacco products.

Tex. Tax Code § 155.021

Tex. Tax Code § 155.0211

Tex. Tax Code § 155.022

There are no additional tax requirements for the shipment of tobacco products. Sellers must pay all applicable taxes.

Disclaimer: PCA believes the information on this site is accurate. However, tobacco laws and regulations are subject to frequent change and court interpretation. Statements above are not intended as legal advice or restatement of law. PCA does not guarantee or assume responsibility for the accuracy, completeness or timeliness of this information, nor that this information complies with all federal laws or the laws of all 50 states. Parties acknowledge and agree it is not the intention of PCA to provide specific legal advice for particular individuals, but rather to provide users with general information to better understand these issues. Users shall neither construe any of these materials as legal advice nor make this site the primary basis for any legal decisions made by or on your behalf and agree to release and waive any claims against PCA for the same. You shall consult with legal advisors concerning any contemplated individual decision.