Texas House Bill HB1289

Texas 2009 - 81st Regular

Caption

Relating to the tax imposed on certain tobacco products.

Impact

The adjustments made by HB 1289 are expected to streamline the tax collection process for tobacco products, particularly for snuff, thus enhancing compliance and reducing administrative burdens on both distributors and retailers. Furthermore, the bill mandates that detailed records be kept by distributors and retailers, ensuring a clear line of accountability and facilitating easier tracking of tobacco product sales, thereby enhancing revenue assurance for the state.

Summary

House Bill 1289 is aimed at modifying the tax structure related to tobacco products, particularly focusing on 'snuff', a finely cut tobacco not meant for smoking. The bill introduces several amendments to the Texas Tax Code, specifying a fixed tax rate for snuff and clarifying definitions related to the taxation of tobacco products. Notably, the bill sets the tax rate for snuff at one dollar per ounce, establishing a standardized approach for taxing this specific tobacco product, which previously may have faced varying rates under more general tobacco taxation rules.

Contention

While the bill focuses on creating a uniform tax structure for snuff and potentially increasing state revenues through more effective collection, there may be concerns regarding the implications it has for consumers, particularly in terms of increased prices for tobacco products as a result of higher taxes. Opponents of such tax increases often argue that this could disproportionately affect lower-income individuals and lead to higher rates of smuggling or illegal sales as consumers seek more affordable alternatives.