34 Tex. Admin. Code § 3.1205 - Delivery Sales of Cigarettes (Health and Safety Code, Chapter 161, Subchapter R)
(a) Definitions.
The following words and terms, when used in this section shall have the
following meanings, unless the context clearly indicates otherwise.
(1) 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.
(2) Delivery
sale--A sale of cigarettes to a consumer in Texas in which:
(A) the purchaser submits the order for the
sale:
(i) by telephone or any other method of
voice transmission;
(ii) by mail or
any other delivery service; or
(iii) through the Internet or another on-line
service; or
(B) the
cigarettes are delivered by mail or another delivery service.
(C) A sale of cigarettes not for personal
consumption to a person who is a wholesale dealer or a retail dealer is not a
delivery sale.
(D) A sale of
cigarettes is a delivery sale regardless of whether the seller is located
outside or within Texas.
(3) Delivery service--A person, including the
United States Postal Service, who is engaged in the commercial delivery of
letters, packages, or other containers.
(4) Minor--A person under 21 years of age.
The term "minor" does not include a person who is at least 18 years of age and
is in the United States military forces or the state military forces. The term
"minor" does not include a person who was born on or before August 31,
2001.
(5) Seller--A person, located
outside or within Texas, who takes or accepts delivery sale orders from the
public by telephone, mail, or on the Internet, or who mails or ships cigarettes
in connection with a delivery sale.
(b) Seller permits and registration.
(1) Cigarette tax permits and sales and use
tax permits.
(A) Out-of-state sellers who
intend to make delivery sales to Texas customers must apply for and obtain a
cigarette retailer's permit and, unless purchasing Texas stamped cigarettes, a
cigarette distributor's permit from the comptroller's office as described in
§
3.102 of this title (relating to
Applications, Definitions, Permits, and Reports).
(B) Sellers located in Texas who intend to
make delivery sales to Texas customers must apply for and obtain a cigarette
retailer's permit from the comptroller's office, as described in §
3.102 of this title, and must
obtain a Texas sales and use tax permit, as described in §
3.286 of this title (relating to
Seller's and Purchaser's Responsibilities).
(2) Delivery sale registration. Before making
a delivery sale in Texas, all sellers must register with the comptroller by
filing a statement that includes:
(A) the
seller's name and trade name;
(B)
the address of the seller's principal place of business and any other place of
business;
(C) the seller's
telephone number; and
(D) the
person's e-mail address.
(c) Seller and purchaser responsibilities.
(1) Collection and payment of taxes. The
comptroller's office collects cigarette excise tax through the sale of
cigarette tax stamps to permitted distributors. A seller located outside of
Texas who has obtained a distributor permit is required to purchase and pay for
tax stamps before the comptroller's office will ship the stamps to the seller.
In addition, as provided in Tax Code, Chapter 151 (Limited Sales, Excise, and
Use Tax), a seller engaged in business in Texas is required to collect and
remit to the comptroller's office sales tax on all cigarette sales made in
Texas.
(2) Stamping requirements. A
seller located outside of Texas must affix a Texas tax stamp to each package of
cigarettes that is to be shipped or delivered to a purchaser in Texas before
shipment. A Texas seller can purchase only stamped packages of cigarettes from
distributors and wholesalers.
(3)
Age verification. A seller must confirm the age of the prospective purchaser
placing an order for cigarettes to be delivered by the United States Postal
Service or by a delivery service before the cigarettes can be mailed or
delivered to a purchaser in Texas.
(A)
Purchaser verification. A seller is required to obtain from the prospective
purchaser a written certification that includes a reliable confirmation that
the prospective purchaser is not a minor and a statement signed by the
prospective purchaser under penalty of law:
(i) certifying the prospective purchaser's
address and date of birth;
(ii)
confirming that the prospective purchaser understands that signing another
person's name to the certification is illegal, that sales of cigarettes to, and
the purchase of cigarettes by a minor, are illegal under state law;
and
(iii) confirming that the
prospective purchaser wants to receive mailings from a tobacco
company.
(B) Seller
verification. A seller must make a good faith effort to verify the information
contained in the certification required under subparagraph (A) of this
paragraph. A seller may compare the information against a commercially
available database or obtain a photocopy or other image of a government-issued
identification bearing a photograph and date of birth of the prospective
purchaser.
(4) Disclosure
requirements. A seller must send a prospective purchaser, by e-mail or other
means, a notice that includes a prominent and clearly legible statement that:
(A) cigarette sales to minors are illegal
under state law;
(B) sales of
cigarettes are restricted to those individuals who provide verifiable proof of
age in accordance with paragraph (3) of this subsection;
(C) sales of cigarettes are taxable under
Texas Tax Code, Chapter 154 (Cigarette Tax);
(D) the excise tax due on the cigarettes has
been paid by the purchase of a tax stamp for each cigarette package;
and
(E) that a tax stamp has been
affixed to each cigarette package sold.
(5) Purchaser age certification. A person
placing an order for cigarettes to be mailed or delivered must first:
(A) provide the seller with proof of
age;
(B) provide the seller with a
signed written statement that confirms:
(i)
the purchaser's address and date of birth;
(ii) the purchaser's permission for a tobacco
company to send mailings to the purchaser;
(iii) the purchaser's knowledge that signing
another person's name to the written statement is illegal, and that state law
prohibits the sales of cigarettes to, and the purchase of cigarettes by a
minor; and
(C) pay for
the cigarettes ordered by mail or over the Internet by check or by a credit or
debit card that has been issued in the purchaser's name.
(d) Reporting requirements.
(1) Each seller who has made a delivery sale,
and each person who has delivered cigarettes in connection with a delivery
sale, is required to file a delivery sales report with the comptroller's
office.
(A) For each delivery sale, a person
must file a memorandum or a copy of an invoice that provides:
(i) the name, address, telephone number, and
e-mail address of the individual to whom the delivery sale was made;
(ii) the brand or brands of the cigarettes
that were sold; and
(iii) the
quantity of cigarettes that were sold.
(B) A person may comply with the reporting
requirement described in this paragraph by filing a Texas Cigarette/E-Cigarette
Delivery Sales Report. The report is available on the comptroller's
website.
(C) This filing is due on
or before the 10th day of each month based on delivery sales made in the
previous month.
(2) A
seller who submits a monthly "Jenkins Act" report required by
15 U.S.C. Section
376, as amended, to the comptroller's office
has complied with the monthly delivery sales reporting requirement and no
further report is required.
(3) A
person is exempt from the filing requirement in this subsection, if in the
preceding two years from the date the report is due, the person is not in
violation of the requirements under Health and Safety Code, Chapter 161,
Subchapter R (Delivery Sales of Cigarettes and E-Cigarettes) and has not been
reported under Health & Safety Code, §161.090 (Reports of Violations)
to the comptroller as having violated Subchapter H (Distribution of Cigarettes,
E-Cigarettes, or Tobacco Products).
(A) A
person is exempt from the filing requirement in this subsection, even if the
person does not have a two-year report filing history, provided that the person
has not committed a violation during the time the person has been making
delivery sales.
(B) If a person
violates the requirements of Health and Safety Code, Chapter 161, Subchapter R,
or is reported to the comptroller under §161.090 for violating Health and
Safety Code, Chapter 161, Subchapter H, the person must comply with the monthly
filing requirements described in this subsection.
(i) A person who commits a violation, and who
does not have two years of prior delivery sales, must file the required
information from its first day of business.
(ii) A seller who commits a violation is
liable for reporting all delivery sales for all business locations of the
seller.
(e) Violations and Penalties.
(1) A person commits an offense if the person
violates a provision of Health and Safety Code, Chapter 161, Subchapter R for
which a criminal penalty is not otherwise provided, or Tax Code, Chapter 154.
For example, a seller who makes a delivery sale of cigarettes to a minor
commits an offense. The person's first offense is a Class C misdemeanor. If it
is shown on the trial of a person that the person has previously been convicted
of an offense under Health and Safety Code, Chapter 161, Subchapter R, the
offense is a Class B misdemeanor.
(2) Knowing violations. A person who
knowingly violates a provision of Health and Safety Code, Chapter 161,
Subchapter R, or knowingly submits a certification described in subsection
(c)(3)(A) of this section, in another person's name commits a felony of the
third degree.
(3) Non-payment of
tax. A person who fails to pay the cigarette tax or remit the sales and use tax
due in connection with a delivery sale must pay to the state a civil penalty in
an amount equal to five times the amount of tax due. This penalty is in
addition to penalties imposed under Tax Code, Chapter 154.
(4) Forfeiture of cigarettes and property.
Cigarettes sold, or cigarettes that a person attempted to sell in a delivery
sale that does not comply with Health and Safety Code, Chapter 161, Subchapter
R, are forfeited to the state and will be destroyed. A fixture, equipment, or
other material or personal property on the premises of a person who, with the
intent to defraud the state, fails to comply with the provisions of Health and
Safety Code, Chapter 161, Subchapter R, is also forfeited to the
state.
(5) Tax code violations. If
the comptroller finds that a person violates Tax Code, Chapter 154, or a rule
made pursuant to Chapter 154, the comptroller may impose a penalty of not more
than $2,000 for each violation per day and suspend or revoke the person's
permit pursuant to Tax Code, §
154.1141 (Summary Suspension
of a Permit).
Notes
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