86R19909 SRA-D
By: Miller, Thierry, Zerwas, Oliverson, H.B. No. 4013
Springer, et al.
Substitute the following for H.B. No. 4013:
By: Murphy C.S.H.B. No. 4013
A BILL TO BE ENTITLED
AN ACT
relating to sales and use taxes on e-cigarettes and vapor products;
imposing taxes; providing an administrative penalty; authorizing
the imposition of a fee.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle E, Title 2, Tax Code, is amended by
adding Chapter 164 to read as follows:
CHAPTER 164. TAX ON E-CIGARETTES AND VAPOR PRODUCTS
Sec. 164.0001. DEFINITIONS. In this chapter:
(1) "E-cigarette" has the meaning assigned by Section
161.081, Health and Safety Code.
(2) "Vapor product" means a consumable liquid solution
or other material aerosolized or vaporized during the use of an
e-cigarette, regardless of whether the liquid contains nicotine.
Sec. 164.0002. E-CIGARETTE AND VAPOR PRODUCT SALES TAX.
(a) A tax is imposed on each sale of an e-cigarette or vapor product
in this state.
(b) The tax rate is 10 percent of the sales price of an
e-cigarette or vapor product sold.
(c) A tax imposed under this section is in addition to the
tax imposed under Subchapter C, Chapter 151. A tax imposed under
this section does not apply to a sale unless the tax imposed under
Subchapter C, Chapter 151, applies to the sale.
Sec. 164.0003. E-CIGARETTE AND VAPOR PRODUCT USE TAX. (a)
A tax is imposed on the storage, use, or other consumption in this
state of an e-cigarette or vapor product purchased from a retailer
for storage, use, or other consumption in this state.
(b) The tax rate is 10 percent of the sales price of an
e-cigarette or vapor product stored, used, or otherwise consumed in
this state.
(c) A tax imposed under this section is in addition to the
tax imposed under Subchapter D, Chapter 151. A tax imposed under
this section does not apply to the storage, use, or other
consumption of an e-cigarette or vapor product unless the tax
imposed under Subchapter D, Chapter 151, applies to the storage,
use, or other consumption.
Sec. 164.0004. APPLICATION OF OTHER PROVISIONS OF CODE.
(a) Except as provided by this chapter:
(1) the taxes imposed under this chapter are
administered, imposed, collected, and enforced in the same manner
as the taxes under Chapter 151 are administered, imposed,
collected, and enforced; and
(2) the provisions of Chapter 151 applicable to the
sales tax imposed under Subchapter C, Chapter 151, and the use tax
imposed under Subchapter D, Chapter 151, apply to the sales and use
taxes imposed under this chapter.
(b) A change in the law relating to the taxation of the sale
or use of an e-cigarette or vapor product under Chapter 151 also
applies to the sales or use tax imposed under this chapter.
Sec. 164.0005. REPORTS. (a) A person required to file a
report under Section 151.403 who is also required to collect or pay
a tax under this chapter shall file with the comptroller a report
stating:
(1) for sales tax purposes, the amount of total
receipts from e-cigarettes and vapor products sold by the seller
during the reporting period;
(2) for use tax purposes, the amount of total receipts
from e-cigarettes and vapor products sold by the retailer during
the reporting period for storage, use, or other consumption in this
state;
(3) the amount of the total sales prices of
e-cigarettes and vapor products subject to the use tax that were
acquired during the reporting period for storage, use, or other
consumption in this state by a purchaser who did not pay the tax to a
retailer;
(4) the amount of the taxes due under this chapter for
the reporting period; and
(5) any other information required by the comptroller.
(b) The report required by this section for a reporting
period is due on the same date that the tax payment for the period is
due.
Sec. 164.0006. RECORDS. (a) A person required to file a
report under Section 151.403 who is also required to collect or pay
a tax under this chapter shall keep a complete record of:
(1) all gross receipts from each sale to which this
chapter applies occurring during each reporting period, along with
documentation relating to those receipts;
(2) all purchases of e-cigarettes and vapor products,
including the constituent parts of e-cigarettes and vapor products,
from every source during each reporting period, along with
documentation relating to those purchases;
(3) all sales and use taxes, and any money represented
to be sales or use tax, collected under this chapter during each
reporting period; and
(4) any other information required by the comptroller.
(b) A person shall keep the records required by Subsection
(a) for the period required by Section 151.025(b).
Sec. 164.0007. DISPOSITION OF PROCEEDS. The comptroller
shall deposit the proceeds from taxes imposed under this chapter to
the credit of the foundation school fund.
Sec. 164.0008. DISCIPLINARY ACTION FOR CERTAIN VIOLATIONS.
(a) A person required to file a report under Section 151.403 who is
also required to collect or pay a tax under this chapter is subject
to disciplinary action as provided by this section if:
(1) an agent or employee of the person commits an
offense under Subchapter H, Chapter 161, Health and Safety Code;
and
(2) the person, with criminal negligence, failed to
prevent the offense through adequate supervision and training of
the agent or employee.
(b) If the comptroller finds, after notice and an
opportunity for a hearing, that a person described by Subsection
(a) has violated Subchapter H, Chapter 161, Health and Safety Code,
at a place of business for which a sales tax permit under Chapter
151 has been issued, the comptroller may suspend the permit for that
place of business or administratively assess a fine as follows:
(1) if the person has not been found to have violated
Subchapter H, Chapter 161, Health and Safety Code, at that place of
business during the preceding 12 months, the comptroller may
require the person to pay a fine in an amount not to exceed $500;
(2) if the person has been found to have violated
Subchapter H, Chapter 161, Health and Safety Code, at that place of
business once during the preceding 12 months, the comptroller may
require the person to pay a fine in an amount not to exceed $750; and
(3) if the person has been found to have violated
Subchapter H, Chapter 161, Health and Safety Code, at that place of
business at least twice during the preceding 12 months, the
comptroller may require the person to pay a fine in an amount not to
exceed $1,000 or suspend the sales tax permit for that place of
business for not more than three days.
(c) Except as provided by Section 164.0009, if the person
has been found to have violated Section 161.082(b), Health and
Safety Code, on four or more previous and separate occasions at the
same place of business during the preceding 24 months, the
comptroller shall revoke the sales tax permit for that place of
business.
(d) A person whose sales tax permit has been revoked under
this section may not apply for a sales tax permit under Chapter 151
for the same place of business before the expiration of six months
after the effective date of the revocation.
Sec. 164.0009. ACTIONS OF EMPLOYEE. (a) For purposes of
Subchapter H, Chapter 161, Health and Safety Code, relating to the
sale or delivery of e-cigarettes to a minor, the comptroller may
suspend a sales tax permit of a person required to file a report
under Section 151.403 who is also required to collect or pay a tax
under this chapter but may not revoke the permit under Section
164.0008 if the comptroller finds that:
(1) the person has not violated Section 161.082(b),
Health and Safety Code, more than four times at the place of
business for which the permit is issued in the 24-month period
preceding the violation in question;
(2) the person requires its employees to attend a
comptroller-approved seller training program;
(3) the employee has actually attended a
comptroller-approved seller training program; and
(4) the person has not directly or indirectly
encouraged the employee to violate the law.
(b) The comptroller shall adopt rules or policies
establishing the minimum requirements for approved seller training
programs. On application, the comptroller shall approve seller
training programs meeting the requirements that are sponsored
privately or by public community colleges. The comptroller may
charge an application fee in an amount necessary to defray the
expense of processing the application.
(c) The comptroller may approve under this section a seller
training program sponsored by a person described by Subsection (a)
for the purpose of training the person's employees without regard
to whether the employees are located at the same place of business.
This subsection applies only to a person who employs at least 100
persons at any one time during the permit year who sell
e-cigarettes.
SECTION 2. This Act takes effect September 1, 2019.