HBA-AMW C.S.H.B. 3382 77(R)BILL ANALYSIS


Office of House Bill AnalysisC.S.H.B. 3382
By: Davis, Yvonne
Ways & Means
4/20/2001
Committee Report (Substituted)



BACKGROUND AND PURPOSE 

Most excise tax rates, such as the rates on alcohol, are determined by
volume or weight; however, taxes on smokeless tobacco are based on the
manufacturer's list price.  Currently, certain types of smokeless tobacco
are considered premium products and have a higher manufacturer's list
price.  The quality of premium and non-premium tobacco products is
essentially comparable.  However, premium smokeless tobacco producers are
required to remit a higher tax to the comptroller of public accounts.
C.S.H.B. 3382 modifies the standards by which taxes are assessed for
smokeless tobacco products. 

RULEMAKING AUTHORITY

It is the opinion of the Office of House Bill Analysis that this bill does
not expressly delegate any additional rulemaking authority to a state
officer, department, agency, or institution. 

ANALYSIS

C.S.H.B. 3382 amends the Tax Code to establish the tax rate for each can or
package of moist snuff, dry snuff, chewing tobacco, pipe tobacco, and
roll-your-own tobacco and to provide requirements for computing the total
tax for these products.  The bill requires that an ambiguity regarding the
proper classification of a tobacco product for taxation purposes to be
resolved by reference to the classification of the tobacco product for
federal tobacco tax purposes (Sec. 155.0211).   

The bill provides that records of purchase or receipt, distributor and
wholesaler reports of sale or use, manufacturer's records and reports, and
distributor's reports required to be filed with the comptroller of public
accounts must show the net weight as listed by the manufacturer for each
unit and the aggregate net weight of moist snuff, dry snuff, chewing
tobacco, pipe tobacco, and roll-your-own tobacco listed on each invoice
(Secs. 155.101-155.103, 155.111).   

EFFECTIVE DATE

September 1, 2001.

COMPARISON OF ORIGINAL TO SUBSTITUTE

C.S.H.B. 3382 modifies the original bill by increasing from 58 to 72 cents
per ounce the tax rate for each can or package of moist snuff, from 33 to
46 cents per ounce the tax rate for each can or package of dry snuff, and
from 16 to 23 cents per ounce the tax rate for each can or package of
chewing tobacco.  The substitute also modifies the original bill by
increasing from 42 to 58 cents per ounce the tax rate for each can or
package of pipe tobacco and from 39 to 54 cents per ounce the tax rate for
each can or package of roll-your-own tobacco (Sec. 155.0211, Tax Code).