Texas Senate Bill SB1336

Texas 2009 - 81st Regular

Caption

Relating to the tax imposed on certain tobacco products.

Impact

The implications of SB1336 extend to record-keeping requirements for distributors and retailers of tobacco products. Under the proposed legislation, all entities within the tobacco supply chain would need to maintain detailed records of transactions, including the net weight of products and additional reporting to the comptroller. These changes are expected to enhance transparency and facilitate more effective monitoring of tax compliance, which could lead to better enforcement of tax laws concerning tobacco products. In the broader context of state fiscal policy, the revenue generated from these taxes is allocated to the property tax relief fund, which is beneficial for local governments by providing financial relief to taxpayers.

Summary

Senate Bill 1336 seeks to amend the Texas Tax Code by introducing specific taxation measures related to tobacco products, particularly focusing on snuff. This bill defines 'snuff' as finely cut, ground, or powdered tobacco that is not intended to be smoked. Furthermore, the legislation proposes changes to the existing tax rates on tobacco products, establishing a singular tax rate of one dollar per ounce for snuff, while maintaining a different tax rate for other tobacco products, including a 40% tax on manufacturers' list prices for products such as cigars. This approach aims to simplify the taxation framework regarding tobacco products and could lead to increased revenue from the tobacco industry.

Contention

Notable points of contention surrounding SB1336 revolve around the potential economic impact on small businesses involved in the tobacco industry. Opponents might argue that while increased taxation may provide short-term revenue benefits to the state, it could also drive small retailers out of business due to higher operational costs. Additionally, there may be concerns regarding how tax burdens on specific products like snuff might affect consumer purchasing behavior, potentially leading to illicit sales as consumers seek less-regulated sources. Furthermore, discussions might arise surrounding the ethics of taxing products that are already heavily regulated and associated with health concerns.

Additional_comments

Overall, SB1336 represents a significant shift in the tax structure related to the tobacco industry in Texas. The emphasis on defining and taxing snuff more explicitly reflects ongoing discussions about public health, revenue generation, and the regulation of tobacco products. The bill is expected to spur debate in legislative committees and among stakeholders as it moves through the legislative process.