To engage in business as a manufacturer, distributor, importer, wholesaler, bonded agent, or retailer, a person must apply for and receive the applicable permit from the Comptroller. Permits are required for each place of business owned or operated by a manufacturer, distributor, importer, wholesaler, bonded agent, or retailer. The types of permits include:
A distributor who does not want to pay in advance for cigarette stamps must be part of the Cigarette Tax Recovery Trust Fund. ( Tax Code Section 154.051) The Cigarette Tax Recovery Trust Fund is a private trust fund established outside the state treasury to secure the payment of cigarette taxes by distributors who contribute to the fund. The distributors contribute to an account in the trust fund in the distributor's name. When the balance in the account equals 20 percent of the designated amount of stamps requested by the distributor to be purchased in any one month, the distributor's account becomes vested and the distributor can purchase stamps without advance payment.
Until a distributor acquires a vested interest in the fund, they may be required to post with the Comptroller an irrevocable letter of credit to secure the payment of cigarette taxes by the distributor. The Comptroller may not ship stamps to a distributor not having a vested interest in the trust fund without payment until the distributor posts the required letter of credit.
The Comptroller is the trustee of the fund and receives five percent of the interest earned as compensation for serving as trustee of the fund.
Distributors, wholesalers, bonded agents, and export warehouses are required to keep records at each place of business for all cigarettes purchased or received, including records of those cigarettes for which no tax is due. Retailers are required to keep records of all cigarettes purchased and received at their principal place of business. Specific requirements are found in Tax Code Section 154.201.
Distributors are required to keep at each place of business records for stamps purchased or received from the Comptroller. See Tax Code Section 154.202.
Distributors and wholesalers are required to keep at each place of business records of sales, distributions, exchanges, or use of cigarettes. Specific requirements are found in Tax Code Section 154.203.
Manufacturers are required to keep records of sales of cigarettes to permit holders. These requirements are found in Tax Code Section 154.204. A manufacturer's representative is also required to maintain records for purchases or sales of cigarettes from or to a permittee in Texas. See Tax Code Section 154.205.
Records must be maintained for four years. Failure to produce records is considered evidence that the cigarettes were received for the purpose of making a first sale without payment of the tax. Refer to Tax Code Section 154.209 and Tax Code Section 154.211.
Chapter 154 of the Tax Code requires distributors to file with the Comptroller Form 69-100 Texas Distributor Monthly Report of Cigarettes and Stamps on or before the last day of each month. In addition to this report, the following supplementary reports are required as supporting documentation:
These forms can be found on our website.
Chapter 154 of the Tax Code also requires manufacturers who sell cigarettes to a permit holder to file a report on or before the last day of each month. There is no set form for this report.