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. * 

### 300

OFFICEiOFTHEAmORNEY GENERALOFTEXAS **AUSTIN**

Bollorabl8'R.Lea O'rnnlrl Ootsrnor of Teaar Aurtln, Texas

**Dear tllrr** 



### WI8r8 Inreo with lttaohrd lattar to ntary of **St*te,** quaatlonof whet Vernon*

8 AMot ata purohamr of 01

oau8a under ter lew of Artlole 70(70, 8 a 

### dlraot tax upon the

wered **oatogorioally,** be**ml** faots, the **olgrmttr** upon the puroha8rr 

### of instance8the tax 18 upon la not a dirrot taxupon
018 70478, vernon’d hnotatea civil

**aur** and payable as loon 18 mob 

### oigarrttes ralc,in Texa8, it bring **lntwaded to**  **im** 8 ruoh oigarrttar 6r6 rroafrd **by** an;rprrr the purpoir **of** raeking

### a 'flrrt 8618'of mn4." saotlon 1 (h)of the **Ci&arrtte hx**  **Law drfinra**  **“ ffrrt**  rela* a8 follonr

a(h) *rfrrt381a' rhall mraa ana in0iuae tha firrt role or airtribution of **olaarrtbra** In lntrartatli~ort usa or con8umDtionor aigsretterwithin thfr fstets.w (!lndrrroorina ours)
In oonnrotfonwiththe statutory deflnltlon **of** ***first**Ronaabla w. Lae 3T?anlal, Page 2

~ala,~ tha Lagialatrtra, by 9aOtiOn 1 (a) Or the **AOt,** har dafinad **wdlstributorw a8**  **followa:**

*(III) 'Dlatributorlahall uaan and lnoluda 

### arrry **paraon** 

### in this Statswho 

### 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** *frat aala’ of tha **Sam** 

### In this fitat- r *ala tarn ah511 l

lro mha4 araw **9araon** in thla Stat4 who **in** any 148~8~ 

## l aquirir

or porr- 808aS **tmrtamprd 0i~5~5tt.8**  tar tha pur 084 **making** a 'that 8016' of 

### tha SW with n this P Of **State."** (Endaraoorlng **curs)** From the foragolng raiaranoa8to 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, 8lth8rWho158514 or ratall~ (2) upon thr us4 or oonsu!4ptlon0r olgarettar hot purohaaadunaar tta 

### rora~olag aonaltioas.



### Under tha first 

### factual situation, t&a daalar **Is** oon5tltutaaa Vl5trlbutor,* 55 dariaatl by 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~arattrrno 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 ultlraeta puroha5ar 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 underwhich tbir kr 00ula aoorua aealn5t thr ultimata uaar or purohaaer of tha ofgarattarwould **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 tatupon 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 

### Clrllstatutaa, is both a aalaa tax and a 

### gu#awtax. It la an exoiaa levy with a dual purpora of raaohlng aIth5r the a5llaror the puroharar of olgarattaa ln Texas, QaprnQlngupon t&8a5thoa 0r aopulring and di$ppoalag of tb cigarettar in thI8 8tata. Slaply rtataa, Ii tha b~aratta8 are 5old in Taxer, thlr axoira tax la 15rlaa upon the par8on, rim or corporationamking .thaVlrrt ralr" or the oigaratte588 defined by statute;on tha other hand, Ii the o~arattar err aoqulrad through the Oh5lrn4~8

or later-8tata 4o5maroa -a without a 8014 &wing tran8pirad In T5zas, the tax i.4 a lrop and burden upon the ulttiata purohesrr or Us5r oi the olgeratt58, as 5xI410185 or Fririlaga tax oron th4uaa or COnSIUQptiOn Of ruoh OiiprattSe. Trustlxigtha rorrgolng ruiiy answam your Inquiry, we 9ra

Yours very truly ATTOR?SYGBGSP.AL

OF TZXAS

Assistant
FXf/oa APPROVE1)uY 29,kg40

ATlTPJiEY

GENEBALOF TaY;BS