Texas cigar, tobacco and e-cigarette compliance

Cigar and tobacco products distributor permit

Who needs it

Distributor or wholesaler, Importer, US manufacturer

Agency

Texas Comptroller

Fee

$300 per year per place of business (may be prorated)

Bond

None found in statute or Comptroller pages for cigars and tobacco products

Term

March 1 to last day of February

Renewal

Annual; expires last day of February. Comptroller mails renewal packets; renew on paper or Webfile. $50 late fee if postmarked after the deadline.

A distributor is anyone who receives untaxed tobacco products for a first sale in Texas or brings untaxed product into Texas for sale, use or consumption, anyone who manufactures tobacco products, and any importer. Permit required for each place of business; nonassignable. Combination cigarette/tobacco permits exist.

Tax Code 155.001(6), 155.041, 155.048, 155.049; Form AP-175 Source

Cigar and tobacco products wholesaler permit

Who needs it

Distributor or wholesaler

Agency

Texas Comptroller

Fee

$200 per year per place of business

Bond

None found

Term

March 1 to last day of February

Renewal

Annual; expires last day of February; $50 late fee.

A wholesaler (including a manufacturer's representative) sells or distributes tax-paid tobacco products in Texas for resale. May sell to interstate warehouses, distributors, wholesalers or retailers.

Tax Code 155.001, 155.041, 155.0415, 155.049; Form AP-175 Source

Bonded agent permit

Who needs it

Manufacturer outside the US, US manufacturer, Distributor or wholesaler

Agency

Texas Comptroller

Fee

$300 per year

Bond

None found (the name refers to the agent role, not a surety bond)

Term

March 1 to last day of February

Renewal

Annual; expires last day of February

A person in Texas who is a third-party agent of an out-of-state manufacturer and receives tobacco products in interstate commerce.

Tax Code 155.001, 155.041, 155.049 Source

Manufacturer, importer and export warehouse permits

Who needs it

Manufacturer outside the US, US manufacturer, Importer

Agency

Texas Comptroller

Fee

No fee for importers, manufacturers without Texas representation and export warehouses; $300 for manufacturers with Texas representation

Bond

None found

Term

Annual, March 1 to last day of February

Renewal

Annual; Comptroller renewal packets go to manufacturers, importers, bonded agents, export and import warehouses

Tax Code 155.041 bars doing business as a manufacturer or importer without a permit. Importer means one who brings in tobacco products made outside the US for a first sale in Texas; an importer is also a distributor for tax purposes. Interstate warehouse permit is $300. Manufacturer includes a person who causes or arranges for the manufacture, fabrication or assembly of tobacco products for sale (Tax Code 155.001(10)), so a brand owner using a contract factory is a manufacturer that needs a permit (155.041) and files the monthly 155.103 report. A manufacturer outside Texas that is not a permitted distributor may sell only to a permitted distributor or interstate warehouse (155.0415(c)), and its sale to a Texas distributor is not a first sale (155.001(8)(A)(ii)(a)).

Tax Code 155.001(8), (9), (10), 155.041, 155.0415(c), 155.049; Form AP-175 Source

Retailer cigarette, cigar and/or tobacco products permit

Who needs it

Retailer, Online or remote seller

Agency

Texas Comptroller

Fee

$180 for the two-year period, prorated by month of application (table on Comptroller page). Applying between March and May of an even-numbered year costs up to $202.50, because the permit covers the rest of the current term plus the next two years.

Bond

None

Term

Two years, June 1 of an even-numbered year to May 31 of the next even-numbered year

Renewal

Expires last day of May in each even-numbered year (next: May 31, 2028). Renew by Webfile.

Required for each place of business for retailers who sell, store or make a delivery sale of cigars or tobacco products to Texas consumers, including internet/mail order sellers, mobile vendors and vending machine owners. Must also hold an active sales tax permit. Retailers may buy only from a Texas-permitted distributor or wholesaler. Operating without a permit: civil penalty up to $2,000 per day and possible criminal charges.

Tax Code 155.041, 155.049, 155.0415(g); Health and Safety Code 161.0901; Form AP-193 Source

Vehicle permit

Who needs it

Distributor or wholesaler, Retailer

Agency

Texas Comptroller

Fee

$15 per vehicle per year

Bond

None

Term

Annual

Renewal

With the underlying permit

Distributors, wholesalers and retailers selling from vehicles must list each vehicle (Form 69-122).

Tax Code 155.041, 155.049 Source

E-cigarette retailer permit

Who needs it

Retailer, Online or remote seller

Agency

Texas Comptroller

Fee

$180 per two-year period if no cigarette/tobacco retail permit; $90 if the location already holds one (prorated)

Bond

None

Term

Two years, ending May 31 of even-numbered years

Renewal

Expires last day of May in even-numbered years; renew by Webfile

Required for each location of a retailer that sells, stores or makes a delivery sale of e-cigarettes to Texas consumers, including online and mail/phone sellers. Must hold a sales tax permit. Vending machines, residences and storage units cannot be permitted. Penalty up to $2,000 per day without a permit.

Health and Safety Code ch. 147 (147.0051, 147.0151); Form AP-242 Source

Cigar tax, cigars weighing 3 pounds or less per 1,000 (Class B)

Rate

1 cent per 10 cigars or fraction of 10 ($1.00 per 1,000)

Base

Count of cigars

Who pays

Permit holder (distributor, importer, in-state manufacturer) receiving cigars for a first sale in Texas

Effective

Long-standing (last amended 1991)

Texas does not tax little cigars as cigarettes under ch. 155; check the Tax Code 154 cigarette definition for heavy-filter little cigars.

Tax Code 155.021(b)(1) Source

Cigar tax, over 3 pounds per 1,000, list price 3.3 cents or less each (Class C)

Rate

$7.50 per 1,000

Base

Count of cigars

Who pays

Distributor on receipt for first sale

Effective

Long-standing

Price test uses manufacturer's list price.

Tax Code 155.021(b)(2) Source

Cigar tax, over 3 pounds per 1,000, over 3.3 cents each, no substantial nontobacco ingredients (Class D, natural leaf)

Rate

$11 per 1,000

Base

Count of cigars

Who pays

Distributor on receipt for first sale

Effective

Long-standing

Cigars are presumed to contain substantial nontobacco ingredients (and taxed at $15) unless the report is accompanied by a manufacturer or distributor affidavit that the cigars contain no sheet wrapper, binder or filler. This is the rate for most premium handmade cigars. No premium cap: tax is per stick, not a percentage of price.

Tax Code 155.021(b)(3), (c) Source

Cigar tax, over 3 pounds per 1,000, over 3.3 cents each, with substantial nontobacco ingredients (Class F)

Rate

$15 per 1,000

Base

Count of cigars

Who pays

Distributor on receipt for first sale

Effective

Long-standing

Default rate when no affidavit is filed.

Tax Code 155.021(b)(4) Source

Tobacco products tax (other than cigars), Class W

Rate

$1.22 per ounce plus a proportionate rate on fractions of an ounce; packages under 1.2 ounces are taxed as 1.2 ounces

Base

Net weight as listed by the manufacturer, computed per can or package intended for retail sale

Who pays

Permit holder receiving the products for a first sale in Texas (distributor/importer)

Effective

$1.22 since September 1, 2013 (rate stepped up from $1.10 in FY2010); no scheduled change found

Wraps are taxable if made of tobacco. Nicotine pouches: Texas Supreme Court held VELO pouches are tobacco products 'made of a tobacco substitute' (Hancock v. RJR Vapor Co., No. 24-0052, May 8, 2026); constitutional challenges remanded. RYO is also subject to the separate cigarette/RYO special fee for non-settling manufacturers (0.09 oz = 1 stick), Health and Safety Code ch. 161 subch. V.

Tax Code 155.0211; 155.001(15)(E) Source

Cigarette/RYO special fee (non-settling manufacturers)

Rate

Feb 1, 2026 to Jan 31, 2027: 4.35471 cents per stick-equivalent (0.09 oz) for NSM or SPM with credit amendment; 1.18767 cents for SPM

Base

0.09 ounces of RYO tobacco = one cigarette

Who pays

Distributor

Effective

February 1, 2026 (adjusted each February 1)

Spillover from cigarette rules onto RYO only.

Health and Safety Code 161.603 Source

State and local sales and use tax

Rate

6.25% state plus local up to 2%

Base

Retail sales price

Who pays

Retailer collects from consumer

Effective

Ongoing

E-cigarettes and e-liquids are not cigarettes and carry no excise tax, but are subject to sales tax.

Tax Code ch. 151; Comptroller e-cigarette sales tax FAQ Source

Distributor Monthly Report of Cigar and/or Tobacco Products

Form

69-133 with 69-134 (Class W worksheet), 69-135 (interstate sales), 69-136 (receiving record), 69-208 (authorized credits letter), 69-315 (exempt sale certificate), 69-114 (credit worksheet)

How often

Monthly

Due

25th day of the month following the reporting month (Tax Code 155.111(a)); tax is paid with the report

Where

Comptroller says a paper report is the only reporting method; pay by Webfile EFT/credit card, TEXNET or check (TEXNET required at $500,000+ per year)

Report shows purchases, receipts, list price, sales, losses, beginning and ending inventory and net weight. Distributors selling over 50% of untaxed product outside Texas report only in-state sales. Premium cigar affidavit needed for $11 rate.

Tax Code 155.111(a), 155.023 Source

Manufacturer's monthly report of sales to Texas permit holders

Form

No set form

How often

Monthly

Due

Last day of the month following the reporting month (Tax Code 155.103(b)); the Comptroller's cigar and tobacco page says the 25th, so filing by the 25th is the conservative course

Where

Not specified

Manufacturers selling to Texas permit holders report quantity, type, date, permit holder name and number, list price, ship-to location, carrier, and net weight for non-cigar products. Brand owners that arrange contract manufacture are manufacturers and file this report (Tax Code 155.001(10)).

Tax Code 155.103(b), 155.001(10) Source

Distributor and wholesaler monthly report of sales to retailers

Form

Electronic CSV file through Webfile

How often

Monthly

Due

25th day of the following month

Where

Webfile (CSV upload)

Required since September 1, 2007 under Comptroller Rule 3.102 for distributors and wholesalers. Reports each retailer customer, outlet address, permit number and sales.

Tax Code 155.105; 34 TAC 3.102 Source

Cigarette / E-Cigarette Delivery Sales Report

Form

69-140

How often

Monthly

Due

10th day of the following month

Where

Comptroller (form 69-140)

Delivery sellers of e-cigarettes to Texas consumers file a registration statement and report each customer's name, address, brands and quantity. Rule allows an exemption for sellers with no violations in the prior two years. Cigars are not covered by the delivery sales subchapter.

Health and Safety Code 161.452, 161.456; 34 TAC 3.1206 Source

PACT Act report

Form

FTA uniform PACT Act report form

How often

Monthly

Due

10th day of the following month

Where

Email to mfg.reports@cpa.texas.gov

For anyone selling, transferring or shipping cigarettes, RYO, smokeless tobacco or ENDS into Texas in interstate commerce (15 U.S.C. 376). Cigars are not PACT Act products.

15 U.S.C. 376; Comptroller PACT Act page Source

Minimum age

Effective

September 1, 2019

Minor means under 21. Sales of cigarettes, e-cigarettes and tobacco products to persons under 21 are prohibited; retailers must keep signed employee notifications (Form 69-117) and post warning signs.

Health and Safety Code 161.081, 161.082, 161.085 Source

SB 1313: retailer signs, logos and design marks appealing to minors

Effective

September 1, 2025

A retailer commits a Class B misdemeanor if it uses, in any manner related to its marketing, advertising or sale of cigarettes, e-cigarettes or tobacco products (which includes cigars), a sign, logo or other design mark that: shows a cartoon-like fictional character primarily aimed at entertaining minors; imitates a trademark or trade dress of products primarily marketed to minors; uses a symbol primarily used to market to minors; includes a celebrity image; or includes an image resembling a food product such as candy or juice. The offense applies to retailers, not to manufacturers directly, and it is not a school-proximity rule.

Health and Safety Code 161.124 (SB 1313, 89th Leg., R.S.) Source

SB 2024: e-cigarette product restrictions (not cigars)

Effective

September 1, 2025 (Comptroller enforcement with no grace period)

Class A misdemeanor to market, advertise, sell or offer an e-cigarette product that: is in a container with a cartoon character aimed at minors, youth trademark imitation, youth-marketing symbol, celebrity image or food-product image; is shaped like or disguised as school or office supplies, phones, watches, headphones, clothing, backpacks, cosmetics or toys; is wholly or partly manufactured in China or a country designated a foreign adversary by the US Commerce Secretary (Comptroller lists Cuba, Iran, North Korea, Russia as of April 2026), or is marketed as made there; or contains cannabinoids, alcohol, kratom, kava, mushrooms or tianeptine. Also removes the nicotine requirement from the e-cigarette definition. Country-of-origin labeling creates a rebuttable presumption; warehousing product destined outside Texas is allowed. The bill does not apply to cigars or other tobacco products.

Health and Safety Code 161.081(1-a), 161.0876 (SB 2024, 89th Leg., R.S.) Source

SB 1316: outdoor signs near churches and schools

Effective

September 1, 2025

Signs advertising cigarettes, e-cigarettes or tobacco products may not be located closer than 1,000 feet to a church or school, measured along street lines; pre-September 1, 1997 signs between 500 and 1,000 feet are grandfathered.

Health and Safety Code 161.121, 161.122 (SB 1316, 89th Leg., R.S.) Source

Flavors

Effective

n/a

No statewide flavor ban found. SB 2024 restricts youth-appealing e-cigarette packaging and certain additives, not flavors as such.

Comptroller 2025 Legislative Update Source

Shipping rule

Retailers who make delivery sales of cigars or tobacco products to Texas consumers (internet, mail, phone), including out-of-state sellers, must hold a Texas retailer permit and a sales tax permit. A permitted retailer may buy only from a Texas-permitted distributor or wholesaler, so product shipped to Texas consumers must be Texas tax-paid unless the seller is itself a permitted distributor.

Tax Code 155.001(6), 155.041, 155.0415(g); Comptroller retailer permit page Source

Shipping rule

Delivery sales of e-cigarettes to Texas consumers require an e-cigarette retailer permit, a delivery sale registration with the Comptroller, age verification (under 21 prohibited) using a commercial database plus adult signature on delivery, required disclosures, and a monthly report by the 10th (Form 69-140).

Health and Safety Code 161.452 to 161.456; ch. 147; 34 TAC 3.1206 Source

Shipping rule

Federal PACT Act reports for RYO, smokeless and ENDS shipped into Texas go to the Comptroller by the 10th of each month.

15 U.S.C. 376 Source

Local rule

No local cigar, tobacco or vapor excise tax or local tobacco license was confirmed. Local sales tax (up to 2%) applies to retail sales of all these products, including e-cigarettes.

Tax Code ch. 151, 321, 323; Comptroller e-cigarette sales tax FAQ Source

Records

All permit holders must keep records available for inspection and copying by the Comptroller and Attorney General for at least four years, and longer while tax may be assessed. Vehicle and vending permit holders must designate a permanent location for records.

Tax Code 155.110 Source

Records

Distributors, wholesalers and interstate warehouses keep at each place of business records of every sale, with original invoices showing purchaser name, address and permit number, carrier, date, quantity and type, price, manufacturer's list price and net weight for non-cigar products; give duplicate invoices to buyers. Distributors, wholesalers, bonded agents and export warehouses keep purchase and receipt records.

Tax Code 155.101, 155.102, 155.108, 155.109 Source

Records

Manufacturers keep records of each sale to Texas permit holders, including list price, net weight, ship-to location and carrier.

Tax Code 155.103 Source

Records

The person in possession of tobacco products bears the burden of proving the tax was paid.

Tax Code 155.023 Source

Penalty

Late payment: minimum $50 penalty; 5% if paid 1 to 30 days late; 10% if more than 30 days late. Interest begins 61 days after the due date.

Tax Code 111.060, 111.061; Comptroller cigar and tobacco page Source

Penalty

$50 late fee for permits not obtained or renewed on time (renewals postmarked after February 28 for non-retail permits).

Tax Code 155.049 Source

Penalty

Selling without a retailer or e-cigarette retailer permit: civil penalty up to $2,000, each day a separate violation, plus possible criminal charges.

Health and Safety Code 161.0901, 147.0151 Source

Penalty

The Comptroller may summarily suspend a permit if the holder fails to comply and continued operation threatens tax collection (hearing within 10 days), and may suspend or revoke permits after hearing. Untaxed product can be seized and forfeited.

Tax Code 155.0591, 155.059, 155.143 Source

Penalty

SB 1313 violations are a Class B misdemeanor; SB 2024 violations are a Class A misdemeanor.

Health and Safety Code 161.124, 161.0876 Source

September 1, 2025

SB 2024: bans marketing or sale of e-cigarette products made in China or foreign-adversary countries, disguised products, youth-appealing containers, and products with cannabinoids, kratom and similar additives; Class A misdemeanor. Applies only to e-cigarettes. Comptroller warned in April 2026 about fraudulent SB 2024 compliance letters naming 'prohibited brands'.

Health and Safety Code 161.0876 Source

September 1, 2025

SB 1313: retailers may not use youth-appealing, celebrity or food-image signs, logos or design marks for cigarettes, e-cigarettes or tobacco products (cigars included).

Health and Safety Code 161.124 Source

September 1, 2025

SB 1316: the 1,000-foot church and school sign setback, which already covered cigarettes and tobacco products, now also covers e-cigarettes.

Health and Safety Code 161.122 Source

Decided May 8, 2026

Texas Supreme Court held nicotine pouches (VELO) are taxable tobacco products at $1.22 per ounce; constitutional claims remanded to the court of appeals.

Hancock v. RJR Vapor Co., No. 24-0052 Source

February 1, 2026

Cigarette/RYO special fee reset for Feb 1, 2026 to Jan 31, 2027.

Health and Safety Code 161.603 Source

Texas Comptroller of Public Accounts, Tax Administration

Handles

Administers the cigar and tobacco products tax (Tax Code ch. 155), cigarette tax, non-retail and retail permits, e-cigarette retailer permits (Health and Safety Code ch. 147), delivery sale registration and PACT Act reports, and enforcement of SB 2024 e-cigarette product restrictions.

Online

Webfile / eSystems: https://security.app.cpa.state.tx.us/ (permit applications and renewals, tax payments); TEXNET for EFT payments

Source

Texas Comptroller Tobacco Enforcement Program

Handles

Retailer compliance support, required warning signs, employee notification form 69-117, training for vendors and peace officers on under-21 sales.

Online

none (materials by phone 800-862-2260)

Source

Texas Legislature (statutes)

Handles

Tax Code ch. 155 (cigars and tobacco products), Health and Safety Code ch. 161 (age 21, marketing, delivery sales) and ch. 147 (e-cigarette retailer permits).

Online

none

Source

Supreme Court of Texas

Handles

Decided Hancock v. RJR Vapor Co., No. 24-0052 (May 8, 2026), holding VELO nicotine pouches are taxable tobacco products.

Online

none

Source