88R4635 CJD-F
By: Springer S.B. No. 339
A BILL TO BE ENTITLED
AN ACT
relating to taxation of electronic nicotine delivery system vapor
products and related transactions; imposing taxes.
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 ELECTRONIC NICOTINE DELIVERY SYSTEM VAPOR
PRODUCTS AND RELATED TRANSACTIONS
Sec. 164.0001. DEFINITIONS. In this chapter:
(1) "Bundled transaction" means a sale of a vapor
product and at least one other item:
(A) sold for a single, non-itemized sales price;
or
(B) in which the purchaser receives the vapor
product free of charge as a result of purchasing the other item.
(2) "Electronic nicotine delivery system" has the
meaning assigned to "e-cigarette" by Section 161.081, Health and
Safety Code.
(3) "Vapor product" means a consumable liquid
solution, which may or may not contain nicotine, suitable for use in
an electronic nicotine delivery system.
Sec. 164.0002. ELECTRONIC NICOTINE DELIVERY SYSTEM VAPOR
PRODUCT OR RELATED TRANSACTION SALES TAX. (a) A tax is imposed on
each sale in this state of:
(1) a vapor product; or
(2) the items included in a bundled transaction.
(b) The tax rate is 1.5 percent of the sales price of:
(1) the vapor product; or
(2) the items included in the bundled transaction,
except as provided by Subsection (c).
(c) The tax imposed under this section applies only to the
portion of the sales price of a bundled transaction attributable to
vapor products included in the transaction if the seller maintains
books and records identifying that portion through reasonable and
verifiable standards.
(d) The tax imposed under this section is in addition to the
tax imposed under Subchapter C, Chapter 151. The 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. ELECTRONIC NICOTINE DELIVERY SYSTEM VAPOR
PRODUCT OR RELATED TRANSACTION USE TAX. (a) A tax is imposed on the
storage, use, or other consumption in this state of:
(1) a vapor product purchased from a retailer for
storage, use, or other consumption in this state; or
(2) the items included in a bundled transaction
purchased from a retailer for storage, use, or other consumption in
this state.
(b) The tax rate is 1.5 percent of the sales price of:
(1) the vapor product stored, used, or otherwise
consumed in this state; or
(2) the items included in the bundled transaction
stored, used, or otherwise consumed in this state, except as
provided by Subsection (c).
(c) The tax imposed under this section applies only to the
portion of the sales price of a bundled transaction attributable to
vapor products included in the transaction if the seller maintains
books and records identifying that portion through reasonable and
verifiable standards.
(d) The tax imposed under this section is in addition to the
tax imposed under Subchapter D, Chapter 151. The tax imposed under
this section does not apply to the storage, use, or other
consumption of a vapor product unless the tax imposed under
Subchapter D, Chapter 151, applies to the storage, use, or other
consumption.
Sec. 164.0004. DISCLOSURE OF TAX. A seller or retailer that
makes a sale of a vapor product or of items included in a bundled
transaction shall provide on the sales invoice, billing, or other
receipt provided to the purchaser:
(1) a separate statement of the amount of tax imposed
under this chapter on the vapor product or items included in the
bundled transaction; or
(2) a statement of the combined amount of taxes
imposed under this chapter and Chapter 151 on the vapor product or
items included in the bundled transaction.
Sec. 164.0005. 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 a vapor product under Chapter 151 also applies to the
sales or use tax imposed under this chapter.
Sec. 164.0006. 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 vapor products and items included in bundled
transactions sold by the seller during the reporting period;
(2) for use tax purposes, the amount of total receipts
from vapor products and items included in bundled transactions 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 vapor
products and items included in bundled transactions 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. 164.0007. 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 vapor products and items included
in bundled transactions 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. 164.0008. DISPOSITION OF PROCEEDS. The comptroller
shall deposit the proceeds from taxes imposed under this chapter to
the credit of the general revenue fund.
SECTION 2. This Act takes effect September 1, 2023.