Texas – New Fee on Cigarette and Cigarette Tobacco Products

SALT Report 3087 – The Texas Comptroller issued a reminder that, effective September 1, 2013, a new law was enacted that requires a fee to be imposed on the sale, use, consumption or distribution of certain cigarette and tobacco products in Texas. The law applies to cigarettes and tobacco products manufactured by companies that did not participate in the Settlement Agreement with the State, or the Master Settlement Agreement, which includes Non-Settling Manufacturers and Subsequent Participating Manufacturers.

The new fee that cigarette and tobacco distributors must collect is 2.75 cents per cigarette stick or 0.09 ounces of cigarette tobacco product.  Cigarette distributors are allowed an additional 0.5% cigarette stamping allowance, for a total of 3% of all cigarette stamps purchased, when the fee is paid and reported on the monthly stamping reports.

To reflect these new requirements the Department has made the following changes:

  • Form 69-100 – Cigarette distributors should calculate the additional 0.5% stamping allowance in Item 25 and report the new fee in Item 26
  • Forms 69-133 and 69-134 – Tobacco distributor should calculate the new fee in Items 5d and 6d on Form 69-134, and report it in Item 14 on Form 69-133
  • In addition to the forms above, distributors must now file an electronic report.  The report is located on the Retailer Inventory Tracking System that is currently used to report tobacco sales

Lastly, the law allows for an increase in the fee each year, therefore the Department will publish the new fee rate online every January with an effective date of February 1.

For Further Information

Texas Comptroller of Public Accounts – Notice