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.

E-cigarettes and e-liquids do not contain tobacco.

Are E-cigarettes subject to the cigarette tax?

No. The cigarette tax is only due 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. Even though nicotine is a component of tobacco, it does not meet the definition of tobacco.


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

Yes. Cigarette distributors pay cigarette tax when they receive cigarettes for the purpose of making a first sale in Texas. Customers pay sales tax when they buy cigarettes from the retailer.