State of Texas – Fiscal Management

Manual of Accounts

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Revenue Object 3278 – Cigar and Tobacco Products Tax
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Legal Citations:
Revenue Type: Cash — Tobacco
Origin Date: 1959 by the 56th Leg. as now collected. Formerly under Cigarette Tax Law originally enacted in 1935.
Issue Date:
Revised Date: 2018-02-07

Description


Tax on cigars is based on weight per 1,000 and retail selling price.

  • Cigars weighing not more than 3 pounds per 1,000: 1 cent for each 10 cigars.
  • Cigars weighing more than 3 pounds per 1,000 and retailing for not more than 3.3 cents each: $7.50 per 1,000.
  • Cigars weighing more than 3 pounds per 1,000 and retailing for over 3.3 cents each, containing no substantial amount of non-tobacco ingredients: $11 per 1,000.
  • Cigars weighing more than 3 pounds per 1,000 and retailing for over 3.3¢ each, containing a substantial amount of non-tobacco ingredients: $15 per 1,000.

Tax on each can or package of tobacco products (other than cigars, cheroots or stogies) is $1.22 per ounce and a proportionate rate on all fractional parts of an ounce. 



Due Date


Distributors report monthly on or before the 10th day of each month, for activities of the preceding month. Solicitors report monthly on or before the 5th day of each month, for activities of the preceding month. Distributing agents report daily, except Sunday and holidays, for activities of the previous day.



Deposit Funds


  • Beginning  September 1, 2009, H.B. 2154 and H.B. 4583, 81st Leg., R.S. directed the tax be deposited to the Property Tax Relief Fund (0304), General Revenue, and GR Account - Physicians Education Loan Repayment Program (5144). Although the tax was changed to weight-based, the split between these funds is based on applying previous percentages of the retail sales tax to the total tax amount. An amount equal to the difference between 40% and 35.213% goes to the Property Tax Relief Fund. An amount attributable to a tax rate of 35.213% goes to General Revenue. And the remaining proceeds were split between GR Account - Physicians Education Loan Repayment Program (No. 5144) and General Revenue as follows:

    • FY 10 -- 85% to GR and 15% to 5144;
    • FY 11 -- 75% to GR and 25% to 5144; and
    • FY 12 and forward -- 50% to GR and 50% to 5144.

    Beginning 9/1/2015, if the balance in GR Account 5144 is sufficient to fund appropriations, remaining revenue is deposited to General Revenue.



Notes


Amended by H.B. 122, 68th Leg., 2nd C.S., effective October 2, 1984.

Amended by H.B. 61, 70th Leg., 2nd C.S.

Amended by H.B. 1421, 71st Leg., R.S.

Amended by H.B. 6, 71st Leg., 6th C.S.

Amended by S.B. 689, 72nd Leg., R.S.

Rate (based on sales price) increased from 35.213% to 40% by H.B. 5, 79th Leg., 3rd C.S.

Effective January 1, 2007, per H.B. 2 and H.B. 4, 79th Leg., 3rd C.S., taxes attributable to the rate increase in excess of 35.213% of the manufacturer's list price are deposited to the Property Tax Relief Fund (0304).

Rate changed from 40% of list price to weight based-tax by H.B. 2154, 81st Leg., R.S. The rate increase is implemented as follows: FY 10 $1.10; FY 11 $1.13; FY 12 $1.16; FY 13 $1.19; FY 14 and forward $1.22.

H.B. 2154, 81st Leg., R.S. changed deposit of tax.

H.B. 7, 84th Leg., R.S. added deposit to General Revenue if GR Account 5144 balance will cover appropriations.



USAS Values


Appropriation Year 26
USAS Title CIGAR & TOBACCO PRODUCTS TAX
Receipt Category 07 – Tobacco
Receipt Type 01 – Taxes
Object Group 30 – Revenues
USAS Status A
Rev/Exp Category 10 – CIGARETTE AND TOBACCO TAXES



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