taxes

Cigarette Tax and Tobacco Products Tax Frequently Asked Questions

Do I need a permit to sell cigarettes or tobacco products at my business location?

Yes, a retailer permit is required for each place of business where cigarettes and tobacco products are sold. You also need a sales and use tax permit.

A retailer permit is issued for a period beginning on the first day of June of each even-numbered year or the location’s actual first business date. The permit expires on the last day of May of each even-numbered year.

The permit fee is $180, but this fee is prorated based on the actual first business date of the location subject to permitting. A permitted retailer will receive a renewal packet prior to the expiration date of their permit(s). Failure to renew a required permit by the renewal due date results in a $50 late fee.

There are no cigarette/tobacco reporting requirements for permitted retailers. However, sales tax must be collected and reported on the sale of cigarettes, and tobacco products.

Must cigarettes and/or tobacco products be sold from a commercial location?

Yes. The statute defines a place of business as one of the following:

  • a commercial business location where cigarettes are sold
  • a commercial business location where cigarettes are kept for sale or consumption or otherwise stored
  • a vehicle from which cigarettes are sold
  • a vending machine from which cigarettes are sold
I have a humidor at my place of business. Do I need a permit?

Yes, if you own the cigars in the humidor and sell them to the public.

Do retailers who operate cigarette/tobacco products vending machines need a permit?

Yes, a retailer permit is required and you will be issued a decal to affix to each machine registered with the Comptroller’s office.

How long does it take to get a retailer permit for cigarette/tobacco products?

If your business location is actively permitted for sales and use taxes, your request will be processed within three days of the receipt of your properly completed application and the required fees.

What is a distributor?

A cigarette distributor is one of the following:

  • a person who is authorized to purchase (and affix cigarette tax stamps to) unstamped cigarette packages from manufacturers for the purpose of making a first sale in Texas
  • a person who ships, transports, imports into Texas, acquires, or possesses cigarettes and makes a first sale of the cigarettes in Texas
  • a person who manufactures or produces cigarettes
  • an importer

A tobacco products distributor is one of the following:

  • a person who receives untaxed tobacco products from a manufacturer inside or outside of Texas, for the purpose of use, consumption, or making a first sale in this state
  • a person who manufactures or produces tobacco products
  • a person who is an importer

A distributor permit is required to perform any of these activities. The distributor permit is issued for a period beginning on the first day of March each year (or the actual first business date if that date is after March 1). The permit expires on the last day of February the following year. The fee for a distributor permit is $300 annually, but this fee is prorated based on the first business date the distributor is subject to permitting. Each permitted distributor will receive a renewal packet prior to the expiration date of their permit. Failure to renew a required permit by the renewal due date results in a $50 late fee.

Combination permits (to sell both cigarettes and tobacco products) are available. The cost of a combination permit is the higher of the two applicable permit fees.

Distributors must file monthly reports with the Comptroller’s office. To sell directly to the public, a retailer permit is also required.

Can I obtain a list of permitted distributors?

Yes, you may access permitted distributors information online or mail a written request to:

Comptroller of Public Accounts
Tax Applications and Tobacco Tax Section
111 East 17th Street
Austin, Texas 78774-0100