85R7478 GRM-D     By: Lucio S.B. No. 596       A BILL TO BE ENTITLED   AN ACT   relating to imposing a tax on certain sweetened beverages and   ingredients used to make certain sweetened beverages; providing a   penalty.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Subtitle E, Title 2, Tax Code, is amended by   adding Chapter 165 to read as follows:   CHAPTER 165.  TAX ON SWEETENED BEVERAGES   SUBCHAPTER A. GENERAL PROVISIONS          Sec. 165.0001.  DEFINITIONS. In this chapter:                (1)  "Retailer" means a person, other than a   manufacturer, distributor, or wholesaler, who receives, stores,   mixes, compounds, or manufactures sweetened beverages and who sells   or otherwise distributes sweetened beverages in this state to the   ultimate consumer.                (2)  "Sweetened beverage" means a carbonated or   non-carbonated nonalcoholic beverage that contains natural or   artificial sweeteners. The term does not include:                      (A)  a beverage that:                            (i)  is sweetened only by a sweetener that   does not add calories to the beverage;                            (ii)  is 100 percent vegetable or fruit   juice by volume;                            (iii)  contains more than one-half of one   percent alcohol per ounce; or                            (iv)  is intended by the manufacturer for   consumption by an infant and is commonly referred to as "infant   formula";                      (B)  milk or milk products that do not contain   sweeteners that add calories to the milk or milk products;                      (C)  non-carbonated water or water without any   additional substances except for minerals and flavoring agents that   do not add calories to the water; or                      (D)  coffee or tea that does not contain   sweeteners that add calories to the coffee or tea.                (3)  "Sweetened beverage powder" means a solid mixture   of basic ingredients used to make, mix, or compound sweetened   beverages.                (4)  "Sweetened beverage syrup" means a liquid mixture   of basic ingredients used to make, mix, or compound sweetened   beverages.          Sec. 165.0002.  RULES.  The comptroller may adopt rules   necessary for the implementation of this chapter and the collection   of taxes imposed by this chapter.   SUBCHAPTER B. IMPOSITION AND COLLECTION OF TAX          Sec. 165.0051.  TAX IMPOSED ON SWEETENED BEVERAGES. (a) A   tax is imposed on the sale to a retailer of a sweetened beverage in   this state.          (b)  A tax is imposed on the importation into this state of a   sweetened beverage for sale in this state to the ultimate consumer.          (c)  Except as provided by Subsection (d), the rate of the   tax imposed by this section is one cent for each ounce or fractional   part of an ounce of sweetened beverage.          (d)  On January 1 of each year, the comptroller shall   increase the rate of the tax prescribed by Subsection (c) or in   effect the preceding year, whichever is greater, by a percentage   equal to the percentage increase in the most recent annual revised   Consumer Price Index for All Urban Consumers, as published by the   federal Bureau of Labor Statistics of the United States Department   of Labor.          Sec. 165.0052.  TAX IMPOSED ON SWEETENED BEVERAGE POWDER.   (a) A tax is imposed on the sale to a retailer of sweetened beverage   powder in this state.          (b)  A tax is imposed on the importation into this state of   sweetened beverage powder for sale in this state to the ultimate   consumer.          (c)  Except as provided by Subsection (d), the rate of the   tax imposed by this section is one cent for the greater of:                (1)  each ounce or fractional part of an ounce of   sweetened beverage that may be produced from the powder by   following the manufacturer's directions; or                (2)  each ounce or fractional part of an ounce of   sweetened beverage actually produced by the retailer, as determined   by the comptroller.          (d)  On January 1 of each year, the comptroller shall   increase the rate of the tax prescribed by Subsection (c) or in   effect the preceding year, whichever is greater, by a percentage   equal to the percentage increase in the most recent annual revised   Consumer Price Index for All Urban Consumers, as published by the   federal Bureau of Labor Statistics of the United States Department   of Labor.          Sec. 165.0053.  TAX IMPOSED ON SWEETENED BEVERAGE SYRUP.   (a) A tax is imposed on the sale to a retailer of sweetened beverage   syrup in this state.          (b)  A tax is imposed on the importation into this state of   sweetened beverage syrup for sale in this state to the ultimate   consumer.          (c)  Except as provided by Subsection (d), the rate of the   tax imposed by this section is one cent for the greater of:                (1)  each ounce or fractional part of an ounce of   sweetened beverage that may be produced from the syrup by following   the manufacturer's directions; or                (2)  each ounce or fractional part of an ounce of   sweetened beverage actually produced by the retailer, as determined   by the comptroller.          (d)  On January 1 of each year, the comptroller shall   increase the rate of the tax prescribed by Subsection (c) or in   effect the preceding year, whichever is greater, by a percentage   equal to the percentage increase in the most recent annual revised   Consumer Price Index for All Urban Consumers, as published by the   federal Bureau of Labor Statistics of the United States Department   of Labor.          Sec. 165.0054.  EXEMPTION FROM TAX.  The tax imposed by this   chapter does not apply to:                (1)  sweetened beverages that:                      (A)  the comptroller determines are unsalable; or                      (B)  this state is prohibited from taxing under   federal law; or                (2)  a sale of sweetened beverages, sweetened beverage   powder, or sweetened beverage syrup that occurs after a sale that is   taxed under this chapter.          Sec. 165.0055.  IMPACT OF TAX.  The ultimate consumer or user   in this state bears the impact of the tax imposed by this chapter.   If another person pays the tax, the amount of the tax is added to the   price to the ultimate consumer or user.          Sec. 165.0056.  PAYMENT OF TAX. (a) The manufacturer,   distributor, wholesaler, or other person selling sweetened   beverages, sweetened beverage syrup, or sweetened beverage powder   in this state to a retailer or importing sweetened beverages,   sweetened beverage syrup, or sweetened beverage powder for sale in   this state to the ultimate consumer shall pay the tax imposed by   this chapter.          (b)  On or before the 25th day of each month, the person   responsible for paying the tax shall send to the comptroller the   amount of tax due under this chapter for the preceding month.          Sec. 165.0057.  REPORTS. On or before the 25th day of each   month, the person responsible for paying the tax under this chapter   shall file with the comptroller a report stating:                (1)  the volume of sweetened beverages, sweetened   beverage powder, and sweetened beverage syrup sold in this state to   retailers;                (2)  the volume of sweetened beverages, sweetened   beverage powder, and sweetened beverage syrup imported into this   state for sale in this state to the ultimate consumer; and                (3)  any other information required by the comptroller.          Sec. 165.0058.  RECORDS.  (a) The person responsible for   paying the tax under this chapter shall keep a complete record of:                (1)  the volume of sweetened beverages, sweetened   beverage powder, and sweetened beverage syrup sold in this state to   retailers;                (2)  the volume of sweetened beverages, sweetened   beverage powder, and sweetened beverage syrup imported into this   state for sale in this state to the ultimate consumer; and                (3)  any other information required by the comptroller.          (b)  A record required by this section must be kept or   maintained for at least two years after the date the record is made.   SUBCHAPTER C. SALES PERMITS          Sec. 165.0101.  SALES PERMITS. (a) The comptroller shall   issue to an applicant who qualifies under Section 165.0102 a   separate permit for each place of business in this state.          (b)  The holder of a permit shall display it conspicuously in   the place of business to which it applies.          (c)  A permit is valid only for the person and the place of   business to which it applies and is non-assignable.          (d)  A permit issued under this chapter must be renewed   annually.          Sec. 165.0102.  APPLICATION FOR PERMIT. (a) A person   desiring to sell to a retailer, or import for sale in this state to   the ultimate consumer, sweetened beverages, sweetened beverage   powder, or sweetened beverage syrup shall file with the comptroller   an application for a permit for each place of business.          (b)  The application must:                (1)  be on a form prescribed by the comptroller;                (2)  state the name under which the applicant transacts   or intends to transact business;                (3)  give the address of the place of business to which   the permit is to apply;                (4)  contain any other information required by the   comptroller; and                (5)  be signed by the applicant or a person authorized   to act on behalf of the applicant.   SUBCHAPTER D.  PENALTIES          Sec. 165.0151.  INTEREST ON DELINQUENT TAX. A tax imposed by   this chapter that is delinquent draws interest as provided by   Section 111.060.          Sec. 165.0152.  PENALTY.  (a) A person who is responsible   for paying the tax imposed by this chapter and who fails to file a   report as required by this chapter or does not pay the tax when it is   due forfeits to the state a penalty of 25 percent of the amount of   the delinquent tax.          (b)  The minimum penalty under this section is $1.   SUBCHAPTER E. DISPOSITION OF REVENUE          Sec. 165.0201.  DISPOSITION OF REVENUE. The revenue from   the tax imposed by this chapter shall be deposited to the credit of   the general revenue fund.          SECTION 2.  Not later than December 1, 2017, the comptroller   of public accounts shall adopt rules necessary for the   implementation and administration of Chapter 165, Tax Code, as   added by this Act.          SECTION 3.  Chapter 165, Tax Code, as added by this Act,   applies to a sweetened beverage, sweetened beverage powder, or   sweetened beverage syrup sold in this state or imported into this   state on or after January 1, 2018. A sweetened beverage, sweetened   beverage powder, or sweetened beverage syrup sold or imported   before January 1, 2018, is governed by the law in effect when the   sweetened beverage, sweetened beverage powder, or sweetened   beverage syrup was sold or imported, and that law is continued in   effect for that purpose.          SECTION 4.  (a) Except as provided by Subsection (b) of this   section, this Act takes effect January 1, 2018.          (b)  Section 2 of this Act takes effect September 1, 2017.