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Number of six-packs of beer that must be sold in Texas to produce the same state excise tax revenue generated by one carton of cigarettes: 36.8

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Number of bottles of wine that must be sold in Texas to produce the same state excise tax revenue generated by one carton of cigarettes: 101.4

Texas Smokers' Contributions
to the State Economy - FY2005

In 2004, the 20.4% of adults who comprise Texas’s smoker population paid more than their fair share in taxes and tobacco settlement payments because they chose to buy a legal product:

Excise Taxes	Sales Taxes	Tobacco Settlement Payments	Total Smoker Payments
$507,341,000	$261,377,000	$519,900,000	$1,288,618,000

Texas Smokers’ Economic/Tax Profile 2004:

Ø       Texas smokers’ median household income                                                                             $29,593

Ø       Texas nonsmokers’ median household income                                                                       $40,083

Ø       43.4% of Texas smokers had household incomes LESS THAN $25,000

Ø       Only 15.4% of Texas smokers had household incomes EQUAL TO or GREATER

THAN $75,000

The impact of smoker payments on the incomes of working families was disproportionately greater – more than THREE TIMES higher – than the impact on the minority of smokers who have higher incomes. 

Tax and settlement payment liability paid only by smokers in FY2005:

Ø       Total average paid per Texas smoker in excise and sales taxes                                              $252

Ø       Cost per Texas smoker for settlement payments to Texas                                                         $170

Total annual payments to Texas per smoker                                                                 $422

Payments by Texas smokers in FY2005 were:

Ø       More than twice as large as FY2005 state excise taxes on alcohol ($626.3 million).

Ø       Nearly twice as large as FY2005 oil production taxes ($681.9 million).

Ø       More than three times as large as utility taxes ($380 million) in FY2005.

Ø       Nearly five times as large as FY2005 hotel occupancy taxes ($262.1 million).

Texas smoker payments of OVER $1.2 BILLION were large enough to support FY2005 general revenue funds budgeted for:

Ø       The Department of State Health Services ($787.8 million)  AND  the Department of Family and Protective Services ($255.8 million)  AND  Texas Tech University ($111 million)

OR

Ø       The University of Texas-Austin ($242 million)  AND  the Youth Commission ($214.6 million)  AND  Texas A&M ($208.3 million)  AND  Natural Resources ($207.7 million)

OR

Ø       All of the health-related institutions within the Agencies for Education ($922.3 million).

TOTAL SMOKER CIGARETTE PAYMENTS TO TEXAS FY2005 Per year:        $1,288,618,000 Per day:          $       3,528,044 Per hour:        $          147,002 Per minute:    $              2,450    Per second:   $                  41

 

CIGARETTES DON’T PAY TAXES – TEXAS SMOKERS DO!!

Texas Smokers' Contributions
to the State Economy - FY2003

Smokers Pay Excise Taxes2	$	490,719,000
Smokers Pay Sales Taxes2	$	251,268,000
Smokers Pay Tobacco Settlement Payments3	$	494,918,000
	$	1,236,905,000

• Income1

Texas smokers' median household income	$	29,913
Texas nonsmokers' median household income	$	38,113

• Working Families Pay More1

41% of Texas smokers had household income LESS THAN $25,000




12% of Texas smokers had household income EQUAL TO or GREATER THAN $75,000




The impact of smoker payments on the incomes of working families was more than THREE TIMES the impact on higher income smokers. Those who can afford it least pay a disproportionate percentage of their hard-earned income in smoker payments.

• Smoker excise tax/sales tax/tobacco settlement payments liability in 20024

Total average paid per Texas smoker in excise and sales taxes	$	216
Cost per Texas smoker for settlement payments to Texas	$	144
Total annual payments to Texas per smoker	$	360
Total annual payments to Texas per nonsmoker	$	0

TOTAL SMOKER CIGARETTE PAYMENTS TO TEXAS   Per year: $ 1,236,905,000 Per day: $ 3,386,461 Per hour: $ 141,103 Per minute: $ 2,352 Per second: $ 39

1 Centers for Disease Control's Behavioral Risk Factor Surveillance System, 2002
2 Orzechowski & Walker, Arlington, Virginia; from state revenue department.
3 PriceWaterhouseCooper
4 U.S. Census Bureau, 2000 state population and Centers for Disease Control's Behavioral Risk Surveillance System, 2002
5 Tax and budget comparisons are from the Texas Legislative Budget Board, Fiscal Size-up, Texas State Services, 2002-03 Biennium, January 2002. Online at http://www.rjrt.com/common/pages/LeavingRJRT.asp?URL=http://www.lbb.state.tx.us/Fiscal_Size-up/Fiscal_Size-up_2004-2005_1203.pdf.

A summary of Texas state law is provided below
(for specific questions regarding state law, contact your legal advisor.)

Minimum Age	Customers must be 18 years or older to purchase tobacco products. In addition, selling or giving tobacco products to a person who intends to deliver it to someone who is younger than 18 years of age is prohibited.
Restricted Products	Cigarettes or tobacco products including cigars, pipe or cigarette tobacco, chewing tobacco, snuff, or any article or product that is made of tobacco or a tobacco substitute.
Acceptable Forms of Identification	A document containing a physical description and photograph, issued by a governmental agency, establishing the buyer as at least 18 years of age.
Fine/Penalty Schedule for Selling to Minors	If an offense is committed by an employee, the employee is criminally responsible for the offense, guilty of a Class C misdemeanor, and subject to a fine of up to $500. The retailer will also be charged if an employee commits an offense and the retailer failed to prevent the offense through adequate supervision and training of the employee. Permit holders found in violation at least twice within 12 months, can be fined an amount up to $1,000 and may have their permit suspended for up to three days. Four or more violations can result in permit revocation. As a condition of employment, retailers are required to notify each employee engaged in the sale of tobacco (within 72 hours of employee’s beginning to sell tobacco products) that state law prohibits the sale or distribution of cigarettes or tobacco products to any person who is under 18 years of age, that a violation is a Class C misdemeanor, that employees are required to ensure that tobacco outlets post a warning sign that is always properly displayed, and that employees are required to sign a card stating that they have been trained to sell tobacco products. The individual shall signify that the individual has received the notice by signing a form stating that the law has been fully explained, that the individual understands the law, and that the individual, as a condition of employment, agrees to comply with the law. Each form signed by an individual shall indicate the date of the signature and the current address and social security number of the individual. The retailer shall retain the form signed by each retail sales clerk until 60 days after the employee leaves the job. A retailer required by this section to notify employees commits an offense if the retailer fails, on demand of a peace officer or an agent of the comptroller, to provide the forms prescribed by this section. An offense under this section is a Class C misdemeanor. It is a defense to prosecution to show proof that the employee did complete, sign, and date the required forms. Proof must be shown to the comptroller or an agent of the comptroller within 7 days after demand is made.
Affirmative Defense	Proof that an employee demanded, examined and reasonably relied upon proof of age before selling or distributing a tobacco product is a defense to prosecution.
Minor Possession	The possession, purchase, consumption, or receipt of cigarettes or tobacco products by minors, except in the presence of an employer if within the performance of the employee’s duties, is prohibited. Displaying false, fraudulent or not actual proof of the individual’s own age to obtain, purchase or receive a cigarette or tobacco product, is prohibited. Violators are subject to a fine of up to $250, and shall be required to complete a Tobacco Awareness Program within 90 days of the offense.
Sign Requirement	Each person who sells cigarettes or tobacco products at retail is required to post conspicuously and maintain a sign in a location close to the place at which cigarettes or tobacco products may be purchased, which states: PURCHASING OR ATTEMPTING TO PURCHASE TOBACCO PRODUCTS BY A MINOR UNDER 18 YEARS OF AGE IS PROHIBITED BY LAW. SALE OR PROVISION OF TOBACCO PRODUCTS TO A MINOR UNDER 18 YEARS OF AGE IS PROHIBITED BY LAW. UPON CONVICTION, A CLASS C MISDEMEANOR INCLUDING A FINE OF UP TO $500 MAY BE IMPOSED. VIOLATIONS MAY BE REPORTED TO THE COMPTROLLER’S OFFICE BY CALLING 1-800-345-8647. Signs may be obtained free of charge from the Comptroller. Failure to post a sign will result in a Class C misdemeanor.
Compliance Checks	As a condition of receiving federal substance abuse block grant funds, federal law requires the State of Texas to conduct random, unannounced inspections of tobacco outlets to determine compliance rates. With written consent, a minor may act as a "decoy" to assist law enforcement officers in conducting compliance checks of retailers. The Texas Comptroller Office coordinates the inspections.
Visual Characteristics of State Issued License	"PROVISIONAL DRIVER LICENSE" appears in purple for licensees under the age of 18. In addition, the photographs of licensees are taken from a side view.
DISCLAIMER: This information summary is provided as a service of the Coalition, but is not intended to provide legal advice or analysis. These summaries are not intended to be complete representations of state law, which may contain additional rules and restrictions relating to tobacco products not mentioned in this summary, as well as retailing prohibitions related to matters including, but not limited to, state required training, minimum pack size, the sale of loose cigarettes and other restrictions. Retailers should not rely on these summaries as complete or accurate descriptions of applicable federal, state or local law. Users with questions about the law should seek the advice of counsel. Each state law is unique and possibly represents multiple legislative or regulatory acts. Local laws may differ. Check with local authorities for variations from state law. These summaries are not intended to be complete representations of state law.

The reprinting of this information from the Coalition, does not constitute a representation or admission by RJRT that such information is accurate, complete, or a proper characterization of the laws concerned. The Coalition for Responsible Tobacco Retailing is a cooperative effort among retailers, wholesalers and manufacturers who share a common goal: to do all they can to prevent tobacco sales to minors. Texas Direct-to-Consumer Sales Disclosures 1. Cigarette sales to individuals below the legal minimum-purchase age are illegal under state law. 2. Sales of cigarettes are restricted to those individuals who provide verifiable proof-of-age in accordance with the following age-verification requirement (see below). 3. Cigarette sales are taxable under Chapter 154, Tax Code, and an explanation of how that tax has been or is to be paid with respect to the delivery sale. Texas Age-Verification Requirement Before mailing or shipping the cigarettes the seller first: 1. Obtains from the prospective customer a certification that includes: a. reliable confirmation that the purchaser is at least 18 years of age; and b. a statement signed by the prospective purchaser in writing and under penalty of law which: (1) certifies the prospective purchaser's address and date of birth, and (2) confirms that the prospective purchaser understands that signing another person's name to the certification is illegal, that sales of cigarettes to individuals under age 18 are illegal under state law, and that the purchase of cigarettes by individuals under age 18 is illegal under state law; and (3) confirms that the prospective purchaser wants to receive mailings from a tobacco company.

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