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Texas Sales and Use Tax Frequently Asked Questions
Electronic Cigarettes and Cigarettes
Electronic Cigarettes
What are electronic cigarettes (also known as e-cigarettes, personal vaporizers (PVs) or electronic nicotine delivery systems (ENDS)?
E-cigarettes are battery-powered vaporizers that simulate tobacco smoking by producing an aerosol that resembles smoke. They generally use a heating element known as an atomizer that vaporizes e-liquid, a liquid solution that usually contains a mixture of propylene glycol, vegetable glycerin, nicotine and flavorings; however, some e-liquids do not contain nicotine.
E-cigarettes and e-liquids do not contain tobacco.
Are e-cigarettes and e-liquids, regardless of contents, subject to the cigarette tax?
No. E-cigarettes and e-liquids do not meet the statutory definition of a cigarette, so they are not subject to the cigarette tax. However, they are subject to state and local sales taxes.
Are e-cigarettes subject to Texas Sales and Use Tax?
Yes, e-cigarettes are subject to sales and use tax.
Are e-cigarettes that contain nicotine subject to the cigarette tax?
No. E-cigarettes and e-liquids do not meet the statutory definition of a cigarette, so they are not subject to the cigarette tax. However, they are subject to state and local sales taxes.
Cigarettes
Are cigarettes subject to both the sales and use tax and the cigarette tax?
Yes. Cigarette distributors pay cigarette tax when they receive cigarettes for the purpose of making a first sale in Texas. Customers pay sales tax when they buy cigarettes from the retailer.