34 Tex. Admin. Code § 3.102 - Applications, Definitions, Permits, and Reports
(a) Definitions.
The following words and terms, when used in this section, shall have the
following meanings, unless the context clearly indicates otherwise.
(1) Agency--The Comptroller of Public
Accounts of the State of Texas or the comptroller's duly authorized agents and
employees.
(2) Bonded agent--A
person in this state who is a third-party agent of a manufacturer outside this
state and who receives cigarettes in interstate commerce and stores the
cigarettes for distribution or delivery to distributors under orders from the
manufacturer.
(3) Cigar--A roll of
fermented tobacco that is wrapped in tobacco and the main stream of smoke from
which produces an alkaline reaction to litmus paper.
(4) Cigarette--A roll for smoking:
(A) that is made of tobacco or tobacco mixed
with another ingredient and wrapped or covered with a material other than
tobacco; and
(B) that is not a
cigar.
(5) Commercial
business location--The entire premises occupied by a permit applicant or a
person required to hold a permit under Tax Code, Chapter 154 (Cigarette Tax). A
commercial business location cannot include a residence or a unit in a public
storage facility.
(6) Consumer--A
person who possesses cigarettes for personal consumption.
(7) Distributor--A person who:
(A) is authorized to purchase, for the
purpose of making a first sale in this state, cigarettes in unstamped packages
from manufacturers who distribute cigarettes in this state and to stamp
cigarette packages;
(B) ships,
transports, imports into this state, acquires, or possesses cigarettes and
makes a first sale of the cigarettes in this state;
(C) manufactures or produces cigarettes;
or
(D) is an
importer.
(8) Engage in
business--A person engaging either directly or through a representative, in any
of the following activities:
(A) selling
cigarettes in or into this state;
(B) using a warehouse or another location to
store cigarettes; or
(C) otherwise
conducting through a physical presence cigarette-related business in this
state.
(9) Export
warehouse--A person in this state who receives cigarettes in unstamped packages
from manufacturers and stores the cigarettes for the purpose of making sales to
authorized persons for resale, use, or consumption outside the United
States.
(10) First sale--Except as
otherwise provided in this section;
(A) the
first transfer of possession in connection with a purchase, sale, or any
exchange for value of cigarettes in or into this state, which includes:
(i) the sale of cigarettes by:
(ii) a distributor in or outside this state
to a distributor, wholesaler, or retailer in this state; and
(iii) a manufacturer in this state who
transfers the tobacco products in this state; and
(iv) does not include:
(I) the sale of cigarettes by a manufacturer
outside this state to a distributor in this state;
(II) the transfer of cigarettes from a
manufacturer outside this state to a bonded agent in this state;
(III) the sale of cigarettes by a
manufacturer, bonded agent, distributor, or importer to an interstate warehouse
in this state; or
(IV) the transfer
of cigarettes by an interstate warehouse in an interstate warehouse
transaction;
(B) the first use or consumption of
cigarettes in this state; or
(C)
the loss of cigarettes in this state whether through negligence, theft, or
other unaccountable loss. First sale also includes giving away cigarettes as
promotional items.
(11)
Importer--A person who ships, transports, or imports into this state cigarettes
manufactured or produced outside the United States for the purpose of making a
first sale in this state.
(12)
Interstate warehouse--A person in this state who receives unstamped cigarettes
from a manufacturer, bonded agent, distributor, or importer and stores the
cigarettes exclusively for an interstate warehouse transaction.
(13) Interstate warehouse transaction--The
sale or delivery of cigarettes from an interstate warehouse to a person located
in another state who is licensed or permitted by the other state to affix that
state's cigarette stamps or otherwise pay the state's excise tax on cigarettes
as required.
(14) Manufacturer--A
person who manufactures, fabricates, or assembles cigarettes, or causes or
arranges for the manufacture, fabrication, or assembly of cigarettes, for sale
or distribution.
(15)
Manufacturer's representative--A person employed by a manufacturer to sell or
distribute the manufacturer's stamped cigarette packages.
(16) Permit--Any agency license, certificate,
approval, registration, or similar form of permission required by law to buy,
sell, stamp, store, transport, or distribute cigarettes. A permit includes a
vending machine decal.
(17) Permit
holder--A person who has been issued a bonded agent, interstate warehouse,
distributor, importer, export warehouse, manufacturer, wholesaler, or retailer
permit under Tax Code, §
154.101(Permits).
(18) Place of business--
(A) a commercial business location where
cigarettes are sold;
(B) a
commercial business location where cigarettes are kept for sale or consumption
or otherwise stored;
(C) a vehicle
from which cigarettes are sold; or
(D) a vending machine from which cigarettes
are sold.
(19)
Retailer--A person who engages in the business of selling cigarettes to
consumers. The owner of a cigarette vending machine is a retailer.
(20) Stamp--Includes only a stamp that:
(A) is printed, manufactured, or made by
authority of the comptroller;
(B)
shows payment of the tax imposed by Tax Code, §
154.021 (Imposition and Rate
of Tax);
(C) is consecutively
numbered and uniquely identifiable as a Texas cigarette tax stamp;
and
(D) is not damaged beyond
recognition as a valid Texas tax stamp.
(21) Wholesaler--A person, including a
manufacturer's representative, who sells or distributes cigarettes in this
state for resale. A wholesaler is not a distributor.
(b) Permits required.
(1) To engage in business as a distributor,
importer, manufacturer, export warehouse, wholesaler, bonded agent, interstate
warehouse, or retailer, a person must apply for and receive the applicable
permit from the comptroller. The permits are not transferable. A new
application is required if a change in ownership occurs (sole ownership to
partnership, sole ownership to corporation, partnership to limited liability
company, etc.). Each legal entity must apply for its own permit(s). All permits
issued to a legal entity will have the same taxpayer number. Tax Code, §
154.501(a)(2)
(Penalties), provides that a person who
engages in the business of a bonded agent, interstate warehouse, distributor,
importer, manufacturer, export warehouse, wholesaler, or retailer without a
valid permit is subject to a penalty of not more than $2,000 for each
violation. Tax Code, §
154.501(c),
provides that a separate offense is committed each day on which a violation
occurs.
(2) Each distributor,
importer, manufacturer, export warehouse, wholesaler, bonded agent, interstate
warehouse, or retailer shall obtain a permit for each place of business owned
or operated by the distributor, importer, manufacturer, wholesaler, bonded
agent, interstate warehouse, or retailer. A new permit shall be required for
each physical change in the location of the place of business. Correction or
change of street listing by a city, state, or U.S. Post Office shall not
require a new permit so long as the physical location remains
unchanged.
(3) Permits are valid
for one place of business at the location shown on the permit. If the location
houses more than one place of business under common ownership, an additional
permit is required for each separate place of business. For example, each
retailer who operates a cigarette vending machine shall place a retailer's
permit on the machine.
(4) A
vehicle from which cigarettes are sold is considered to be a place of business
and requires a permit. A motor vehicle permit is issued to a distributor or
wholesaler holding a current permit. Vehicle permits are issued bearing a
specific motor vehicle identification number and are valid only when physically
carried in the vehicle having the corresponding motor vehicle identification
number. Vehicle permits may not be moved from one vehicle to another. No
cigarette permit is required for a vehicle used only to deliver invoiced
cigarettes.
(5) The comptroller may
issue a combination permit for cigarettes and tobacco products to a person who
is a distributor, importer, manufacturer, wholesaler, bonded agent, interstate
warehouse, or retailer as defined by Tax Code, Chapter 154 and Chapter 155
(Cigars and Tobacco Products Tax). A person who receives a combination permit
pays only the higher of the two permit fees.
(6) The comptroller will not issue a permit
for a residence or a unit in a public storage facility because cigarettes may
not be stored at such places.
(7) A
permit is not required for a research facility that possesses and only uses
cigarettes for experimental purposes.
(8) A person who engages in the business of
selling cigarettes for commercial purposes who provides a roll-your-own machine
that is available for use by consumers must obtain a manufacturer's,
distributor's and a retailer's permit.
(9) The comptroller may not issue a
distributor's permit and an interstate warehouse permit to the same
location.
(10) A person who engages
in the business of importing cigarettes from a foreign country into Texas is
required to be permitted as a cigarette distributor.
(c) Sales and purchase requirements for
permit holders. Except for retail sales to consumers, cigarettes may only be
sold or distributed by and between permit holders as provided by this section.
A permit holder may engage in the following business activities:
(1) A manufacturer outside this state who is
not a permitted distributor may sell cigarettes only to a permitted distributor
or interstate warehouse.
(2) A
permitted distributor may sell cigarettes only to a permitted distributor,
wholesaler, or retailer. A permitted distributor who manufactures or produces
cigarettes in this state may sell those cigarettes to a permitted interstate
warehouse.
(3) A permitted importer
may sell cigarettes only to a permitted interstate warehouse, distributor,
wholesaler, or retailer.
(4) A
permitted wholesaler may sell cigarettes only to a permitted distributor,
wholesaler, or retailer.
(5) A
permitted retailer may sell cigarettes only to the consumer and may purchase
cigarettes only from a permitted distributor or wholesaler.
(6) A permitted export warehouse may sell
cigarettes only to persons authorized to sell or consume unstamped cigarettes
outside the United States.
(7) A
manufacturer's representative may sell cigarettes only to a permitted
distributor, wholesaler, or retailer.
(8) A permitted interstate warehouse may sell
cigarettes only in an interstate warehouse transaction. An interstate warehouse
may not make an intrastate sale of cigarettes without written authorization by
the comptroller.
(d)
Permit period.
(1) Bonded agent, interstate
warehouse, distributor, importer, manufacturer, wholesaler, and motor vehicle
permits expire on the last day of February of each year.
(2) Retailer permits expire on the last day
of May of each even-numbered year.
(e) Permit fees. An application for a bonded
agent, interstate warehouse, distributor, manufacturer, wholesaler, motor
vehicle, or retailer permit must be accompanied by the appropriate fee. The
permit fee payment must be made in cash, by money order, check, or credit card.
(1) The permit fee for a bonded agent is
$300.
(2) The permit fee for an
interstate warehouse is $300.
(3)
The permit fee for a distributor is $300.
(4) The permit fee for a manufacturer with
representation in Texas is $300.
(5) The permit fee for a wholesaler is
$200.
(6) The permit fee for a
motor vehicle is $15.
(7) The
permit fee for a retailer permit is $180.
(8) No permit fee is required to obtain an
importer or an export warehouse permit.
(9) A $50 fee is assessed for failure to
obtain a permit in a timely manner.
(10) The comptroller prorates the permit fee
for new permits according to the number of months remaining in the permit
period. If a permit will expire within three months of the date of issuance,
the comptroller may collect the prorated permit fee for the current permit
period and the total permit fee for the next permit period.
(11) A person issued a permit for a place of
business that permanently closes before the permit expiration date is not
entitled to a refund of the permit fee.
(f) Permit issuance, denial, suspension, or
revocation.
(1) The comptroller shall issue a
permit to a distributor, importer, manufacturer, export warehouse, wholesaler,
bonded agent, interstate warehouse or retailer if the comptroller receives an
application and any applicable fee, believes that the applicant has complied
with Tax Code, §
154.101, and determines that
issuing the permit will not jeopardize the administration and enforcement of
Tax Code, Chapter 154.
(2) If the
comptroller determines that an existing permit should be suspended or revoked
or a permit should be denied because of the applicant's prior conviction of a
crime and the relationship of the crime to the license, the comptroller will
notify the applicant or permittee in writing by personal service or by mail of
the reasons for the denial, suspension, revocation, or disqualification, the
review procedure provided by Occupations Code, §
53.052 (Judicial
Review), and the earliest date that the permit holder or applicant may appeal
the denial, suspension, revocation, or disqualification.
(g) Reports.
(1) Manufacturer reports must be filed on or
before the 25th day of each month for transactions that occurred during the
preceding month.
(2) All cigarette
distributor and wholesaler reports and payments must be filed on or before the
25th day of each month for transactions that occurred during the preceding
month.
(3) All wholesaler and
distributor reports of sales to retailers required by the comptroller under Tax
Code, §
154.212 (Reports by
Wholesalers and Distributors of Cigarettes), shall be filed in accordance with
§
3.9 of this title (relating to
Electronic Filing of Returns and Reports; Electronic Transfer of Certain
Payments by Certain Taxpayers).
Notes
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