PART 1. COMPTROLLER OF PUBLIC ACCOUNTS
SUBCHAPTER H. CIGAR AND TOBACCO TAX
The Comptroller of Public Accounts proposes an amendment to §3.121, concerning definitions, imposition of tax, permits, and reports. Subsections (a)(9) and (a)(11) are amended to clarify the terms "manufacturer" and "manufacturer's list price." Subsection (a)(9) amendment clarifies "manufacturer" to include a person who "produces" other tobacco products at the direction of a manufacturer, and defines the term "produces." Subsection (a)(11) amendment clarifies the term "manufacturer's list price" specifying that the price upon which the tax is based is the price reported monthly by manufacturers to the comptroller as required by Tax Code, §155.103(a)(4), which is the highest price at which a product is offered to distributors in Texas. Amended subsection (a)(11) clarifies and underscores manufacturers' statutory duty to file reports each month that include manufacturer's list price information. Subsection (b)(1)(B)(2) is amended to clarify that free cigars are taxed at the prevailing factory list price and free tobacco products are taxed at the prevailing manufacturer's list price. Subsection (b)(1)(B)(4) is amended to make a technical correction. Subsection (e)(6) is amended to delete wording that was included for clarification prior to September 1, 1999, but since that date has passed, the wording is no longer needed.
John Heleman, Chief Revenue Estimator, has determined that for the first five-year period the rule will be in effect, the proposed amendment would have no significant fiscal impact on units of local government.
Mr. Heleman also has determined that for each year of the first five years the rule is in effect, the proposed amendment would benefit the public by eliminating confusion that has resulted in refund claims, threatened litigation and settlements over taxes due from distributors of tobacco products other than cigars. The resulting clarification would help ensure that the state collects the full amount of the tax imposed by the Legislature from all parties. Since the Legislature dedicated this tax in part to property tax relief, the public will enjoy the benefit of this improvement in the form of greater property tax relief.
Mr. Heleman also has determined that the proposed amendment would have a positive fiscal impact on state government revenues, with gains to both the General Revenue Fund 0001 and the Property Tax Relief Fund 0304. This rule is adopted under Tax Code, Title 2, and does not require a statement of fiscal implications for small businesses. There is no significant anticipated economic cost to individuals who are required to comply with the proposed rule.
Figure: 34 TAC Chapter 3 - Preamble
Comments on the proposal may be submitted to Bryant K. Lomax, Manager, Tax Policy Division, P.O. Box 13528, Austin, Texas 78711-3528.
This amendment is proposed under Tax Code, §111.002 and §111.0022, which provides the comptroller with the authority to prescribe, adopt, and enforce rules relating to the administration and enforcement of the provisions of Tax Code, Title 2, and taxes, fees, or other charges which the comptroller administers under other law.
The amendment implements Tax Code, §155.021(b) and §155.0211(b).
§3.121.Definitions, Imposition of Tax, Permits, and Reports.
(a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.
(1) - (8) (No change.)
(9) Manufacturer--A person who manufactures or produces tobacco products and sells tobacco products to a distributor. The term "produces" includes marketing, labeling or otherwise preparing for sale in Texas other tobacco products at the direction of a manufacturer.
(10) (No change.)
(11) Manufacturer's list price--The price required
to be reported monthly to the comptroller under Tax Code, §155.103(a)(4),
which shall be the highest gross price for purchase at which units
of a product are offered to distributors in Texas, inclusive of all
delivery, destination or other charges of any kind that are assessed
based on the number of units sold. A selling price less than the manufacturer's
list price is assumed to include a trade discount, special discount
or deal [published manufacturer gross cost to the distributor.
The term is synonymous with factory list price].
(12) - (18) (No change.)
(b) Imposition of tax. A tax is imposed and becomes due and payable when a permit holder receives cigars or tobacco products for the purpose of making a first sale in this state.
(1) (No change.)
(2) Free cigars [goods] shall
be taxed at the prevailing factory list price and free tobacco
products shall be taxed at the prevailing manufacturer's list price.
(3) (No change.)
(4) A tax is imposed on manufacturers, who manufacture tobacco products in this state, at the time the tobacco products are first transferred in connection with a purchase, sale, or any exchange for value in intrastate commerce.
(5) - (7) (No change.)
(c) - (d) (No change.)
(e) Permit Fees. An application for a bonded agent, distributor, importer, manufacturer, wholesaler, motor vehicle, or retailer permit must be accompanied by the required fee.
(1) - (5) (No change.)
(6) The permit fee for a retailer permit [issued
or renewed after August 31, 1999,] is $180. Retailers who fail
to obtain or renew a retailer permit in a timely manner are liable
for the fee in effect for the applicable permit period, in addition
to the fee described in paragraph (7) of this subsection.
(7) - (10) (No change.)
(f) - (h) (No change.)
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on August 18, 2008.
TRD-200804432
Ashley Harden
Chief Deputy General Counsel
Comptroller of Public Accounts
Earliest possible date of adoption: September 28, 2008
For further information, please call: (512) 475-0387
CHAPTER 181. BOND REVIEW BOARD
SUBCHAPTER A. BOND REVIEW RULES
The Texas Bond Review Board (BRB) proposes amendments to §181.2, concerning Notice of Intention to Issue. Texas Government Code, Chapter 1231 was amended by the Texas Legislature, 80th Regular Session, Senate Bill 1332 effective September 1, 2007. The proposed amendments to the rule are to clarify processes related to the issuance of state securities.
Robert Kline, Executive Director for the BRB, has determined that for the first five-year period the amendments are in effect there will be no fiscal implications for state or local government as a result of enforcing or administering the amendments to this section.
Mr. Kline has also determined that for each year of the first five years the amendments are in effect the public will benefit from clearer debt issuance and reporting procedures. There will be no effect on small businesses. There is no additional anticipated economic cost to persons to comply with the amendments to this section.
Comments on the proposal may be submitted in writing to Robert Kline, Texas Bond Review Board, P.O. Box 13292, Austin, Texas 78711-3292. Comments may also be submitted electronically to kline@brb.state.tx.us or faxed to (512) 475-4802.
The amendments are proposed under Texas Government Code, §1231.022, which gives BRB the authority to adopt rules governing application for review, the review process, and reporting requirements involved in the issuance of state securities.
The proposed amendments implement the Texas Government Code, Chapter 1231.
§181.2.Notice of Intention to Issue.
(a) Unless exempt pursuant to §181.9 of this title (relating to State Exemptions), an issuer intending to issue state securities shall submit a written or electronic notice of intention to issue to the bond finance office no later than the last Wednesday of the month prior to the month requested for Board consideration. Prospective issuers are encouraged to file the notice of intention as early in the issuance planning stage as possible. A notice of intention under this subsection is not required prior to each new issuance of commercial paper if the issuer's commercial paper program has been approved by the Board or if it is exempt from approval pursuant to the provisions of §181.9 of this title. Except as required for Board approval pursuant to §181.3(f) of this title (relating to Application for Board Approval of State Securities Issuance), a notice of intention under this subsection is not required prior to each new issuance of commercial paper notes if the notes are issued in conformity with the terms of the commercial paper program that has been approved by the Board or is exempt from approval pursuant to the provisions of §181.9 of this title.
(b) A notice of intention to issue under subsection (a) of this section shall include:
(1) - (4) (No change.)
(c) - (d) (No change.)
(e) An issuer intending to issue state securities that
are exempt from approval pursuant to §181.9 of this title shall
submit during regular business hours a written or electronic notice
of intent to the bond finance office at least seven business days
prior to the date the securities are to be issued. Prospective issuers
are encouraged to file the notice of intent [intention]
as early in the issuance planning stage as possible. A notice
of intent under this subsection is not required prior to each new
issuance of commercial paper notes if the notes are issued in conformity
with the terms of the commercial paper program for which a notice
of intent has been filed with the bond finance office or that has
been approved by the Board pursuant to §181.9(d) of this title.
(1) (No change.)
(2) Exempt issuers are required to submit a notice of intent which must contain:
(A) a completed exempt issuer state debt notice of intent in the form required by the bond finance office. A notice of intent is not required under this subsection for an issuance of commercial paper notes if the notes are issued in conformity with the terms of the commercial paper program for which a notice of intent has been filed with the bond finance office or that has been approved by the Board;
(B) - (H) (No change.)
This agency hereby certifies that the proposal has been reviewed by legal counsel and found to be within the agency's legal authority to adopt.
Filed with the Office of the Secretary of State on August 18, 2008.
TRD-200804434
Robert Kline
Executive Director
Texas Bond Review Board
Earliest possible date of adoption: September 28, 2008
For further information, please call: (512) 475-4800