, 

. * 

300 

OFFICEi OFTHEAmORNEY GENERALOFTEXAS 

AUSTIN 

Bollorabl8 'R. Lea O'rnnlrl 

Ootsrnor of Teaar 

Aurtln, Texas 

Dear tllrr 

WI 8r8 In reo 

with l ttaohrd lattar to 

ntary of St*te, 

quaatlon of whet 

Vernon * 8 AMot ata 

purohamr of 01 

oau8a under 

ter lew of 

Artlole 70(70, 

8 a dlraot tax upon the 

wered oatogorioally, beml faots, the olgrmttr 

upon the puroha8rr of 

instance8 the tax 18 upon 

la not a dirrot tax upon 

018 70478, vernon’d hnotatea civil 

aur and payable as loon 18 mob oigarrttes 

ralc, in Texa8, it bring lntwaded to im8 ruoh oigarrttar 6r6 rroafrd by an;r prrr 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) *rfrrt 381a' rhall mraa ana in0iuae tha 

firrt role or airtribution of olaarrtbra In lntrartatli~ort usa or con8umDtion or 

aigsretter within thfr fstets.w (!lndrrroorina ours) 

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 dafinad wdlstributorw a8 followa: 

*(III) 'Dlatributorl ahall uaan and lnoluda 

arrry paraon in this Stats who manafaoturaa or 

pr0duoa8 olg4ratte8 or who rhlpr, tran8port8, 

or lmrtortr into thlr Stat4 or in anf raannar 

a0 l$ai or p04848848 oigaratta8 ad ziakrs a 

*f r rat aala’ of tha Sam In this fitat- 

*ala tarn ah511 l lro mha4 araw 9araon in 

thla Stat4 who in any 148~8~ l a q uior r porr- ir 

808aS tmrtamprd 0i~5~5tt.8 tar tha pur 084 

making a 'that 8016' of tha SW with P n this 

Of 

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 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~arattrr no sold lntra-rtatr, end although 

the 52iount 0r 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 Oiearatta 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 upon 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#aw tax. It la an exoiaa levy 

with a dual purpora of raaohlng aIth5r the a5llar or the puroharar of olgarattaa ln Texas, QaprnQlng upon t&8 a5thoa 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 corporation amking 

.tha Vlrrt ralr" or the oigaratte5 88 defined by statute; on 

tha other hand, Ii the o~arattar err aoqulrad through the 

Oh5lrn4~8 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 5xI 410185 or 

Fririlaga tax oron th4 uaa or COnSIUQptiOn Of ruoh OiiprattSe. 

Trustlxig tha rorrgolng ruiiy answam your Inquiry, 

we 9ra 

Yours very truly 

ATTOR?SY GBGSP.AL OF TZXAS 

Assistant 

FXf/oa APPROVE1)uY 29, kg40 

ATlTPJiEY GENEBAL OF TaY;BS