88R4635 CJD-F     By: Springer S.B. No. 339       A BILL TO BE ENTITLED   AN ACT   relating to taxation of electronic nicotine delivery system vapor   products and related transactions; imposing taxes.          BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:          SECTION 1.  Subtitle E, Title 2, Tax Code, is amended by   adding Chapter 164 to read as follows:   CHAPTER 164. TAX ON ELECTRONIC NICOTINE DELIVERY SYSTEM VAPOR   PRODUCTS AND RELATED TRANSACTIONS          Sec. 164.0001.  DEFINITIONS. In this chapter:                (1)  "Bundled transaction" means a sale of a vapor   product and at least one other item:                      (A)  sold for a single, non-itemized sales price;   or                      (B)  in which the purchaser receives the vapor   product free of charge as a result of purchasing the other item.                (2)  "Electronic nicotine delivery system" has the   meaning assigned to "e-cigarette" by Section 161.081, Health and   Safety Code.                (3)  "Vapor product" means a consumable liquid   solution, which may or may not contain nicotine, suitable for use in   an electronic nicotine delivery system.          Sec. 164.0002.  ELECTRONIC NICOTINE DELIVERY SYSTEM VAPOR   PRODUCT OR RELATED TRANSACTION SALES TAX. (a) A tax is imposed on   each sale in this state of:                (1)  a vapor product; or                (2)  the items included in a bundled transaction.          (b)  The tax rate is 1.5 percent of the sales price of:                (1)  the vapor product; or                (2)  the items included in the bundled transaction,   except as provided by Subsection (c).          (c)  The tax imposed under this section applies only to the   portion of the sales price of a bundled transaction attributable to   vapor products included in the transaction if the seller maintains   books and records identifying that portion through reasonable and   verifiable standards.          (d)  The tax imposed under this section is in addition to the   tax imposed under Subchapter C, Chapter 151. The tax imposed under   this section does not apply to a sale unless the tax imposed under   Subchapter C, Chapter 151, applies to the sale.          Sec. 164.0003.  ELECTRONIC NICOTINE DELIVERY SYSTEM VAPOR   PRODUCT OR RELATED TRANSACTION USE TAX. (a) A tax is imposed on the   storage, use, or other consumption in this state of:                (1)  a vapor product purchased from a retailer for   storage, use, or other consumption in this state; or                (2)  the items included in a bundled transaction   purchased from a retailer for storage, use, or other consumption in   this state.          (b)  The tax rate is 1.5 percent of the sales price of:                (1)  the vapor product stored, used, or otherwise   consumed in this state; or                (2)  the items included in the bundled transaction   stored, used, or otherwise consumed in this state, except as   provided by Subsection (c).          (c)  The tax imposed under this section applies only to the   portion of the sales price of a bundled transaction attributable to   vapor products included in the transaction if the seller maintains   books and records identifying that portion through reasonable and   verifiable standards.          (d)  The tax imposed under this section is in addition to the   tax imposed under Subchapter D, Chapter 151. The tax imposed under   this section does not apply to the storage, use, or other   consumption of a vapor product unless the tax imposed under   Subchapter D, Chapter 151, applies to the storage, use, or other   consumption.          Sec. 164.0004.  DISCLOSURE OF TAX. A seller or retailer that   makes a sale of a vapor product or of items included in a bundled   transaction shall provide on the sales invoice, billing, or other   receipt provided to the purchaser:                (1)  a separate statement of the amount of tax imposed   under this chapter on the vapor product or items included in the   bundled transaction; or                (2)  a statement of the combined amount of taxes   imposed under this chapter and Chapter 151 on the vapor product or   items included in the bundled transaction.          Sec. 164.0005.  APPLICATION OF OTHER PROVISIONS OF CODE.   (a) Except as provided by this chapter:                (1)  the taxes imposed under this chapter are   administered, imposed, collected, and enforced in the same manner   as the taxes under Chapter 151 are administered, imposed,   collected, and enforced; and                (2)  the provisions of Chapter 151 applicable to the   sales tax imposed under Subchapter C, Chapter 151, and the use tax   imposed under Subchapter D, Chapter 151, apply to the sales and use   taxes imposed under this chapter.          (b)  A change in the law relating to the taxation of the sale   or use of a vapor product under Chapter 151 also applies to the   sales or use tax imposed under this chapter.          Sec. 164.0006.  REPORTS. (a) A person required to file a   report under Section 151.403 who is also required to collect or pay   a tax under this chapter shall file with the comptroller a report   stating:                (1)  for sales tax purposes, the amount of total   receipts from vapor products and items included in bundled   transactions sold by the seller during the reporting period;                (2)  for use tax purposes, the amount of total receipts   from vapor products and items included in bundled transactions sold   by the retailer during the reporting period for storage, use, or   other consumption in this state;                (3)  the amount of the total sales prices of vapor   products and items included in bundled transactions subject to the   use tax that were acquired during the reporting period for storage,   use, or other consumption in this state by a purchaser who did not   pay the tax to a retailer;                (4)  the amount of the taxes due under this chapter for   the reporting period; and                (5)  any other information required by the comptroller.          (b)  The report required by this section for a reporting   period is due on the same date that the tax payment for the period is   due.          Sec. 164.0007.  RECORDS. (a) A person required to file a   report under Section 151.403 who is also required to collect or pay   a tax under this chapter shall keep a complete record of:                (1)  all gross receipts from each sale to which this   chapter applies occurring during each reporting period, along with   documentation relating to those receipts;                (2)  all purchases of vapor products and items included   in bundled transactions from every source during each reporting   period, along with documentation relating to those purchases;                (3)  all sales and use taxes, and any money represented   to be sales or use tax, collected under this chapter during each   reporting period; and                (4)  any other information required by the comptroller.          (b)  A person shall keep the records required by Subsection   (a) for the period required by Section 151.025(b).          Sec. 164.0008.  DISPOSITION OF PROCEEDS. The comptroller   shall deposit the proceeds from taxes imposed under this chapter to   the credit of the general revenue fund.          SECTION 2.  This Act takes effect September 1, 2023.