taxes

Texas Sales and Use Tax Frequently Asked Questions

Electronic Cigarettes and Cigarettes

Electronic Cigarettes

What are electronic cigarettes (also known as E-cigarettes, personal vaporizers (PVs) or electronic nicotine delivery systems (ENDS))?

E-cigarettes are battery-powered vaporizers that simulate tobacco smoking by producing an aerosol that resembles smoke. They generally use a heating element known as an atomizer that vaporizes e-liquid, a liquid solution that usually contains a mixture of propylene glycol, vegetable glycerin, nicotine and flavorings; however, some e-liquids do not contain nicotine. Neither E-cigarettes nor e-liquids contain tobacco.

Are E-cigarettes subject to the cigarette tax?

No. The cigarette tax is imposed only on cigarettes made of tobacco or tobacco mixed with another ingredient. Currently, E-cigarettes do not fall within this definition because they do not contain tobacco.

Are E-cigarettes subject to Texas Sales and Use Tax?

Yes, E-cigarettes are subject to sales and use tax.

Are E-Cigarettes that contain nicotine subject to the cigarette tax?

No. E-cigarettes containing nicotine are not subject to the tobacco tax because nicotine does not meet the definition of tobacco in the Tax Code, even though nicotine is a component of tobacco.

Cigarettes

Are cigarettes subject to both the sales and use tax and the cigarette tax?

Yes. Cigarette distributors pay cigarette tax when that distributor receives cigarettes for the purpose of making a first sale in Texas. The consumer pays sales tax on the cigarettes at the time of purchase from the retailer.