,
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300
OFFICEi OFTHEAmORNEY GENERALOFTEXAS
AUSTIN
Bollorabl8'R.Lea O'rnnlrl
Ootsrnor of Teaar
Aurtln, Texas
Dear tllrr
WI 8r8 In reo
with lttaohrd lattar to
ntary of St*te,
quaatlon of whet Artlole 70(70,
Vernon *8 AMot ata 8 a dlraot tax upon the
purohamr of 01
wered oatogorioally, be-
oau8a under ml faots, the olgrmttr
ter lew of upon the puroha8rr of
instance8 the tax 18 upon
la not a dirrot tax upon
018 70478, vernon’d hnotatea civil
and payable as loon 18 mob oigarrttes
aur
ralc,in Texa8, it bring lntwaded to im-
8 ruoh oigarrttar 6r6 rroafrd by an;rprr-
r the purpoir of raekinga 'flrrt 8618' of mn4."
saotlon 1 (h) of the Ci&arrtte hx Law drfinra “ffrrt
rela* a8 follonr
a(h) *rfrrt 381a' rhall mraa ana in0iuae tha
firrt role or airtribution of olaarrtbra In lntra-
rtatli~ort usa or con8umDtion or
aigsretter within thfr fstets.w (!lndrrroorinaours)
In oonnrotfon with the statutory deflnltlon of *first
Ronaabla w. Lae 3T?anlal, Page 2
~ala,~ tha Lagialatrtra,by 9aOtiOn 1 (a) Or the AOt, har da-
finad wdlstributorw a8 followa:
*(III)'Dlatributorl ahall uaan and lnoluda
arrry paraon in this Stats who manafaoturaa or
pr0duoa8 olg4ratte8 or who rhlpr, tran8port8,
or lmrtortrinto thlr Stat4 or in anf raannar
a0 l$ai or p04848848 oigaratta8 ad ziakrs a
*frrat aala’ of tha Sam In this fitat-
*ala tarn ah511 llr o mha4 araw 9araon in
thla Stat4 who in any 148~8~ l a q uir ir
or porr-
808aS tmrtamprd 0i~5~5tt.8 tar tha pur 084 Of
making a 'that 8016' of tha SW with Pn this
State." (Endaraoorlng curs)
From the foragolng raiaranoa8 to the C&aratta Tax
L4r it a5y ba raabily raan that tha 4x0184 ai6ar5tta tax
i445a tharaby la oausaa to aoorua in tvo oontlngaaoia8r (1)
upon tha firrt 5ala or dlatributloa of olgrrattar intro-rtata,
br a ol~aratta d8518r, 8lth8r Who158514 or ratall~ (2) upon
thr us4 or oonsu!4ptlon 0r olgarettar hot purohaaad unaar tta
rora~olag aonaltioas.
Under tha first factual situation, t&a daalar Is
oon5tltutaa a Vl5trlbutor,* 55 dariaatlby rtatuta abora
quotad, by rlrtua,of tha Vlrrt aala,m as Uatlard, of tha
oigaratta8 in this stata. Th4 quantum 0r tha tax 18 maaauraa
by tha nuaber of ol~arattrr no sold lntra-rtatr, end although
the 52iount0r such tax bay, in thr aiaoratlon or ruoh aaalar,
ba pa888d on 88 part Of thr pu~OE844 priO4 t0 be paid by
tha ultimate oonawaar, navarthele55 ln this Instance tha
olgaratta tax ia no8 a tax a&alnrt tha ultlraetapuroha5ar
or suoh olgarattrs.
3ut in tha 84OOad fhSt5BO4 abova 8~ated, t&a Oiea-
ratta tax dOa SOOl'Ua 5na.18 Q,c.p&ruS agalnrt the u1tls4ta
Puroharar or oon4u9ar of‘tha ofaarattas In Taxaa a5 a dlraot
tax, eueh ultlaatr user or oonsu5W in this 0458 baoomlng a
'di8trfbutors of olgarattar by virtue ot .xaking tha first
Uaa of the olgarattar in Taxaa. It 18 ObVioUS that th. Only
r5kauai 51tuatlon under which tbir kr 00ula aoorua aealn5t
thr ultimata uaar or purohaaer of tha ofgarattar would ba up-
on olgarattas purohasad in lntar-stat5 oO3UarOa rathrr than
in intr5-stat8 oozni55roa
fro4 a lioanrad daalor in auoh oigarattaa.
. ’
302
Ronorablr PT.Lee O~Danl51, Fags 3
In this ~onblngaxioy,th5 oigarrtta tax levy partaka8 0r th5
n5tura 0r an 0x0154 or prlrilaga tat upon the prlrllrga oi
U8b4 or cOM~8iag Oi$Or@ttSa wlthln this 8t4t4.
In auaaat~on, we adviaa that #a olgarrtta tax
lariad by Artlola 70478, Varnon*8 AnnOtataa Clrll statutaa,
is both a aalaa tax and a gu#awtax. It la an exoiaa levy
with a dual purpora of raaohlng aIth5r the a5llar or the pur-
oharar of olgarattaa ln Texas, QaprnQlng upon t&8 a5thoa 0r
aopulring and di$ppoalagof tb cigarettar in thI8 8tata.
Slaply rtataa, Ii tha b~aratta8 are 5old in Taxer, thlr ax-
oira tax la 15rlaa upon the par8on, rim or corporation amking
.tha Vlrrt ralr" or the oigaratte5 88 defined by statute; on
tha other hand, Ii the o~arattar err aoqulrad through the
Oh5lrn4~8or later-8tata 4o5maroa -a without a 8014 &wing
tran8pirad In T5zas, the tax i.4a lrop and burden upon the
ulttiata purohesrr or Us5r oi the olgeratt58, as 5xI410185 or
Fririlaga tax oron th4 uaa or COnSIUQptiOnOf ruoh OiiprattSe.
Trustlxigtha rorrgolng ruiiy answam your Inquiry,
we 9ra
Yours very truly
ATTOR?SY GBGSP.ALOF TZXAS
Assistant
FXf/oa APPROVE1)uY 29, kg40
ATlTPJiEYGENEBAL OF TaY;BS