us-tx/regs
34 Tex. Admin. Code § 3.1206 — Delivery Sales of E-Cigarettes (Health and Safety Code, Chapter 161, Subchapter R)
(a)
Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.
(1) Delivery sale--A sale of e-cigarettes to a consumer in Texas regardless of whether the seller is located outside or within Texas:
(A) in which the purchaser submits the order for the sale:
(i) by telephone or any other method of voice transmission;
(ii) by mail or any other delivery service; or
(iii) through the Internet or other on-line service; or
(B) in which the e-cigarettes are delivered by mail or other delivery service;
(C) the term does not include a sale of e-cigarettes for resale to a person who is a wholesale dealer or a retail dealer.
(2) Delivery service--A person, including the United States Postal Service, who is engaged in the commercial delivery of letters, packages, or other containers.
(3) E-cigarette--An electronic cigarette or any other device that simulates smoking by using a mechanical heating element, battery, or electronic circuit to deliver nicotine or other substances to the individual inhaling from the device. The term includes a prescription medical device related to the cessation of smoking. The term also includes:
(A) a device described in paragraph (3) regardless of whether the device is manufactured, distributed, or sold as an e-cigarette, e-cigar, or e-pipe or under another product name or description; and
(B) a component, part, or accessory for the device, regardless of whether the component, part, or accessory is sold separately from the device.
(4) Minor--A person under 21 years of age. The term "minor" does not include a person who is at least 18 years of age and is in the United States military forces or the state military forces. The term "minor" does not include a person who was born on or before August 31, 2001.
(5) Seller--A person, located outside or within Texas, who takes or accepts delivery sale orders or who mails or ships e-cigarettes in connection with a delivery sale.
(b)
Seller responsibilities.
(1) Sales and use tax permit. A seller who is engaged in business in Texas, or who intends to engage in business in Texas, must obtain a sales and use tax permit from the comptroller's office as described in §3.286 of this title (relating to Seller's and Purchaser's Responsibilities).
(2) Delivery sale registration.
(A) Before making a delivery sale of e-cigarettes in Texas, a seller must file a statement with the comptroller that includes:
(i) seller's name and trade name;
(ii) the address of the seller's principal place of business and any other place of business;
(iii) the seller's telephone number; and
(iv) the seller's e-mail address.
(B) The registration requirement described in this paragraph applies to all sellers, whether they are within or outside of Texas and regardless of whether they are engaged in business in Texas.
(3) Collection and payment of taxes. As provided in Tax Code, Chapter 151 (Limited Sales, Excise, and Use Tax), a seller engaged in business in Texas is required to collect and remit to the comptroller's office sales and use tax on all e-cigarette sales made in Texas. For more information on sales and use tax collection responsibilities, refer to §3.286 of this title.
(c)
Notice to purchasers. A delivery sale of an e-cigarette must include a prominent and clearly legible statement that:
(1) Texas law prohibits e-cigarette sales to minors; and
(2) sales of e-cigarettes are restricted to individuals who can provide verifiable proof of age.
(d)
Age verification. A seller taking a delivery sale order must verify that the purchaser is not a minor.
(1) Unless the seller is eligible to use the age verification methods described in paragraph (2), each seller who makes a delivery sale must:
(A) verify the age of the prospective purchaser through a commercially available database or an aggregate of databases that is regularly used for the purpose of age and identity verification before accepting a delivery sale order; and
(B) use a method of mailing or shipping the e-cigarettes that requires an adult signature.
(2) A seller located in Texas who primarily makes retail sales of e-cigarettes, and complies with applicable laws relating to such retail sales, may verify the age of a purchaser placing a delivery sale order by:
(A) verifying the age of the prospective purchaser with a commercially available database or a photocopy or other image of a government-issued identification bearing a photograph of the prospective purchaser and stating the date of birth or age of the prospective purchaser;
(B) obtaining a written statement signed by the prospective purchaser, under penalty of law, certifying the prospective purchaser's address and date of birth; and
(C) receiving payment for the delivery sale from the prospective purchaser by a credit card or debit card that has been issued in the prospective purchaser's name or by a check that is associated with a bank account in the prospective purchaser's name.
(e)
Reporting requirements.
(1) Except as provided by paragraph (2) of this subsection, each seller who has made a delivery sale, and each person who has delivered e-cigarettes in connection with a delivery sale, is required to file a delivery sales report with the comptroller's office.
(A) For each delivery sale, a person must file a memorandum, or a copy of the invoice, that provides:
(i) the name, address, telephone number, and e-mail address of the individual to whom the delivery sale was made;
(ii) the brand or brands of the e-cigarettes that were sold; and
(iii) the quantity of e-cigarettes that were sold.
(B) A person may comply with the reporting requirement described in this paragraph by filing a Texas Cigarette/E-Cigarette Delivery Sales Report. The report is available on the comptroller's website.
(C) This filing is due on or before the 10th day of each month based on delivery sales made in the previous month. The first report is due November 10, 2015.
(2) A person is exempt from the filing requirements in this subsection, if in the preceding two years from the date the report is due, the person is not in violation of the requirements under Health and Safety Code, Chapter 161, Subchapter R (Delivery Sales of Cigarettes and E-Cigarettes), and has not been reported under §161.090 (Reports of Violations) to the comptroller for violating Health and Safety Code, Chapter 161, Subchapter H (Distribution of Cigarettes, E-Cigarettes, or Tobacco Products). A person may be exempt from the delivery sale filing requirements even if the person does not have a two-year history of delivery sales, provided that during the time the person has been in business, the person has not committed a violation and has not been reported to the comptroller under Health and Safety Code, §161.090.
(3) If a person violates the requirements under Health and Safety Code Chapter 161, Subchapter R, or is reported to the comptroller under §161.090 for violating Health and Safety Code, Chapter 161, Subchapter H, the person must comply with the monthly filing requirements described in this subsection for the previous two years for each delivery sale in this state. A person who does not have two years of prior delivery sales will file the information from its first day of business, but no earlier than October 1, 2015, unless the report has already been filed.
(f)
Violations and Penalties.
(1) Criminal Penalties.
(A) Knowing violation. A person who knowingly violates the requirements for delivery sales of e-cigarettes in Health and Safety Code, Chapter 161, Subchapter R, commits a felony of the third degree.
(B) Other violation. Any violation of the requirements for delivery sales of e-cigarettes in Health and Safety Code, Chapter 161, Subchapter R for which a criminal penalty is not otherwise provided is a Class C misdemeanor for a first offense and a Class B misdemeanor for subsequent offenses.
(2) Civil penalty. In addition to any other penalty, a seller who fails to remit the sales and use tax due in connection with a delivery sale must pay to the state a civil penalty in an amount equal to five times the amount of tax due.
(3) Forfeiture of e-cigarettes and property. E-cigarettes that a seller sold or attempted to sell in a delivery sale that does not comply with Health and Safety Code, Chapter 161, Subchapter R, are forfeited to the state and will be destroyed. Any equipment, material, or other personal property on the premises of a seller who, with the intent to defraud the state, fails to comply with the provisions of Health and Safety Code, Chapter 161, Subchapter R, is also forfeited to the state.
Source Note: The provisions of this §3.1206 adopted to be effective February 21, 2017, 42 TexReg 694; amended to be effective February 19, 2020, 45 TexReg 1039.
Source: official text