Cigarette/Roll Your Own (RYO)
Cigarette Tobacco Product
Effective Sept. 1, 2013, the law imposes a fee on the sale, use, consumption, or distribution in Texas of the following:
- Non-Settling Manufacturer (NSM) or Subsequent Participating Manufacturer (SPM) cigarette tobacco products (RYO) if taxed under Texas Tax Code Section 155.0211, or
- NSM or SPM cigarettes if a stamp is required to be affixed to a package of those cigarettes under Texas Tax Code Section 154.041.
This fee is in addition to any other privilege, license, fee or tax required or imposed by state law.
Every January, the Comptroller will set new fee rates by increasing the previous year’s rate by the greater of 3 percent or the rate of inflation as calculated using the Consumer Price Index for All Urban Consumers (CPI-U). The new computed rates will take effect on February 1 of each year and be valid for 12 consecutive months.
Rates for Feb. 1, 2014 through Jan. 31, 2015 (statutory minimum increase)
- NSM or SPM (with credit amendment) – 2.8325 cents per cigarette stick or 0.09 ounces of cigarette tobacco product.
- SPM – 0.7725 cents per cigarette stick or 0.09 ounces of cigarette tobacco product.
Rates for the remainder of calendar year 2013
- NSM or SPM (with credit amendment) – 2.75 cents per cigarette stick or 0.09 ounces of cigarette tobacco product.
- SPM – 0.75 cents per cigarette stick or 0.09 ounces of cigarette tobacco product.
Distributors, monthly – last day of the month for the preceding month’s activity.
Texas law requires detailed reporting of SPM and NSM sales with respect to the fee (see Section 161.605, Health and Safety Code). Reports 69-100, 69-133 and 69-134 have been enhanced to allow summary reporting of these sales and the fee to be remitted. Supplemental reporting of NSM/SPM sales detail must be filed electronically.
The law provides an additional 0.5 percent cigarette stamping allowance when distributors report and remit this new fee (3 percent total when the standard 2.5 percent stamping allowance is included).
Non-Settling Manufacturers must file a report with the Texas Office of Attorney General detailing certain information required by law. The report forms and a detailed description of the requirement can be found on the Attorney General's website.