taxes

Cigarette/Roll Your Own (RYO) Cigarette Tobacco Product Special Fee

Who is responsible for this fee?

Distributors must pay a fee on the sale, use, consumption or distribution in Texas of the following:

This fee is in addition to any other privilege, license, fee or tax required or imposed by state law.

Texas law requires detailed reporting of SPM and NSM sales with respect to the fee (see Health and Safety Code Section 161.605). For summary reporting of these sales and the fee to be remitted, use:

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 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.

Rates

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 are valid for 12 consecutive months.

Rates for Feb. 1, 2017 through Jan. 31, 2018 (statutory minimum increase)

  • NSM or SPM (with credit amendment) – 3.0952 cents per cigarette stick or 0.09 ounces of cigarette tobacco product.
  • SPM – 0.8442 cents per cigarette stick or 0.09 ounces of cigarette tobacco product.
Previous Rates

Due Date

Distributors
Beginning with the August 2017 report, distributors report monthly on the 25th day of each month for the preceding month’s activity.

For reports before August 2017, distributors report monthly on the last day of each month for the preceding month’s activity.

Penalties and Interest

Penalties

A minimum penalty of $50 is due for failure to pay the fee on or before the due date.

  • If tax is paid 1-30 days after the due date, a 5 percent penalty is assessed.
  • If tax is paid over 30 days after the due date, a 10 percent penalty is assessed.
Interest

Discounts

An additional 0.5 percent cigarette stamping allowance when cigarette distributors report and remit the Cigarette/Roll Your Own (RYO) Cigarette Tobacco Product Special Fee (3 percent total when the standard 2.5 percent stamping allowance is included)

Additional Resources