
Alerts & Updates
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Waco Texas Reverses New Cigar Lounge Ban
[Washington, DC — January 18, 2023] The Premium Cigar Association (PCA) actively supported the Waco Texas City Council’s effort to […]
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27 States + DC Enact Laws Related to Raising Smoking Age to 21
Following the Federal Age of Tobacco Purchase increase from 18 to 21 that occurred in December of last year, 27 […]
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Texas Legislature Passes New Statewide Age Restriction
Today, Texas joins 14 other states in adopting tobacco 21 legislation. The Senate concurred with House amendments to Senate Bill […]
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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
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.
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:
- Sale of cigarettes by a distributor located outside of this state to a distributor, wholesaler, or a retailer within this state
- Sale of cigarettes by a distributor inside this state who sells to a distributor, wholesaler, or a retailer within this state
- 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.
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).
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.
Form Type / Name | Form Number / Link |
Texas Comptroller of Public Accounts: Cigarette, Cigar, and Tobacco Products Report Forms | Tax Forms |
Texas web file eStems | Texas web file eStems |
Cigar and Smoking Tobacco Definitions
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.
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.
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 TYPE | FEE |
Bonded Agent | $300 |
Distributor | $300 |
Manufacturer | $300 |
Wholesaler | $200 |
Vehicle | $15 |
Importer | NO 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.
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.
Localities may require additional business licenses.
Form Type / Name | Form Number / Link |
Texas Comptroller of Public Accounts: Cigarette, Cigar, and Tobacco Products Report Forms | Forms |
Political Involvement
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:
- Obtain an electronic filing password (Form LOBBY PASS) and electronically file the Lobby Registration Form (Form REG)
- File Schedules A and B
- File a Confidential Social Security Information form (Form SSN)
- Remit the appropriate registration fee:
ENTITY TYPE | REGISTRATION FEE |
Registrants | $750 |
Tax-Exempt Organizations | $150 |
Independent Contractors | $75 |
Registrations expire on December 31stof each year and must be renewed annually.
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.
Form Type / Name | Form Number / Link |
Registration of Lobbyists | Tex. Gov. Code § 305 |
Texas Ethics Commission: Lobbying Resources | Lobbying 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.
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.