By: Hinojosa S.B. No. 1390
(In the Senate - Filed March 7, 2017; March 16, 2017, read
first time and referred to Committee on Finance; April 3, 2017,
reported favorably by the following vote: Yeas 14, Nays 0;
April 3, 2017, sent to printer.)
Click here to see the committee vote
A BILL TO BE ENTITLED
AN ACT
relating to taxes and fees imposed on cigarettes and other tobacco
products, including an exemption to the cigarette tax, related
administrative matters, and the elements of certain related
offenses.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 161.604(b), Health and Safety Code, is
amended to read as follows:
(b) Beginning in January 2014, and in February [January] of
each subsequent year, the comptroller shall compute the rate of the
fee applicable during that calendar year by increasing the rate for
the preceding calendar year by the greater of:
(1) three percent; or
(2) the actual total percentage change in the Consumer
Price Index for All Urban Consumers (CPI-U), as published by the
Bureau of Labor Statistics of the United States Department of
Labor, during the preceding calendar year, calculated by comparing
the CPI-U for December of the preceding calendar year with the CPI-U
for December a year earlier.
SECTION 2. Section 161.605(e), Health and Safety Code, is
amended to read as follows:
(e) Notwithstanding any other law, a distributor that
remits a monthly fee under this section is[, subject to Section
154.051, Tax Code,] entitled to a stamping allowance of three
percent of the face value of all stamps purchased under Section
154.041, Tax Code, for providing the service of affixing stamps to
cigarette packages.
SECTION 3. Subchapter B, Chapter 154, Tax Code, is amended
by adding Section 154.026 to read as follows:
Sec. 154.026. CIGARETTES USED EXCLUSIVELY FOR RESEARCH
PURPOSES. (a) Cigarettes are exempt from the tax imposed by
Section 154.021 if the cigarettes are:
(1) contained in a package labeled with "Experimental
Use Only," "Reference Cigarettes," or other similar wording
indicating that the manufacturer intends for the product to be used
exclusively for experimental purposes in compliance with 27 C.F.R.
Section 40.232;
(2) sold directly by a manufacturer to a research
facility in this state, including:
(A) a laboratory, hospital, medical center,
college, or university; or
(B) a facility designated as a Tobacco Center of
Regulatory Science by the National Institutes of Health;
(3) used by the research facility exclusively for
experimental purposes; and
(4) not resold by the research facility.
(b) Sections 154.041, 154.302, 154.502, 154.503, and
154.515 do not apply to cigarettes exempted by Subsection (a).
SECTION 4. Section 154.210(a), Tax Code, is amended to read
as follows:
(a) A distributor shall deliver to the comptroller, on or
before the 25th [last] day of each month, a report for the preceding
month.
SECTION 5. Section 154.502, Tax Code, is amended to read as
follows:
Sec. 154.502. UNSTAMPED CIGARETTES. Except as provided by
Section 154.026(b), a [A] person commits an offense if the person:
(1) makes a first sale of unstamped cigarettes;
(2) sells, offers for sale, or presents as a prize or
gift unstamped cigarettes; or
(3) knowingly consumes, uses, or smokes cigarettes
taxed under this chapter without a stamp affixed to each individual
package.
SECTION 6. Section 154.503(a), Tax Code, is amended to read
as follows:
(a) Except as provided by Sections 154.026(b) and [Section]
154.042 [of this code], a person commits an offense if the person
possesses unstamped cigarettes in quantities less than 10,000.
SECTION 7. Section 154.515(a), Tax Code, is amended to read
as follows:
(a) Except as provided by Sections 154.026(b) and [Section]
154.042 [of this code], a person commits an offense if the person
possesses unstamped cigarettes in quantities of 10,000 or more.
SECTION 8. Section 155.111(a), Tax Code, is amended to read
as follows:
(a) A distributor shall file with the comptroller on or
before the 25th [last] day of each month[,] a report for the
preceding month.
SECTION 9. (a) The changes in law made by this Act do not
affect taxes and fees imposed before the effective date of this Act,
and the law in effect before the effective date of this Act is
continued in effect for purposes of the liability for and
collection of those taxes and fees.
(b) The changes in law made by this Act to Sections 154.210
and 155.111, Tax Code, apply only to a distributor's report
originally due on or after the effective date of this Act. A
distributor's report originally due before that date is governed by
the law in effect on the date the report was due, and the former law
is continued in effect for that purpose.
(c) The changes in law made by this Act to Sections 154.502,
154.503, and 154.515, Tax Code, apply only to an offense committed
on or after the effective date of this Act. An offense committed
before the effective date of this Act is governed by the law in
effect when the offense was committed, and the former law is
continued in effect for that purpose. For purposes of this
subsection, an offense was committed before the effective date of
this Act if any element of the offense occurred before that date.
SECTION 10. This Act takes effect September 1, 2017.
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