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Cigar & Tobacco Products Tax Manual
Revised 07/2012
Disclaimer: This manual has been written for the purposes of a training tool and as a reference guide for the auditor. Any references to taxability, administrative policies, laws, and rules are subject to change due to administrative hearings and actions of the courts or legislature. While the content of the manual is current as of the revision date, the reader is responsible for any changes occurring after this date and should verify the current status of any information by contacting the Comptroller of Public Accounts toll free at 1-800-252-5555.
Table of Contents
- Chapter 1 – Permits, Records, and Reports
- Chapter 2 – Pre-Audit Research
- Chapter 3 – Entrance Conference
- Chapter 4 – Audit Procedures for Texas Distributors
- Chapter 5 – Audit Procedures for Out-of-State Distributors
- Chapter 6 – Audit Write-Up
- Appendix: Statute, Rules and Tax Rates
Introduction
The Texas Legislature enacted the cigarette and tobacco tax laws in 1931. The tax on cigars and tobacco products in 1931 was $0.03 of the manufacturer's list price on tobacco products other than cigars. Effective September 1, 2009, the Legislature enacted a new tax base for tobacco products, other than cigars, based on weight. A link to the tax chart is included, in this audit manual appendix, for tax rates increased by fiscal year. Revenues from cigar and tobacco products tax are deposited to the state's general revenue fund and allocated according to Tax Code Section 155.2415, Allocation of Certain Revenue to Property Tax Relief and Certain Other Funds.
The Comptroller was originally charged with the enforcement of the cigar and tobacco products tax. Starting September 1989, the Texas State Treasury handled this responsibility until it was abolished in 1997. As a result, the Comptroller resumed responsibility for tax collections, account maintenance, enforcement, and audit of cigar and tobacco products permit holders.
This audit procedure manual has been written for the auditor to be used as a training tool and reference guide. The information is current as of the date this manual was published. The reader is responsible for any changes that occur after that date.