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TITLE 34PUBLIC FINANCE
PART 1COMPTROLLER OF PUBLIC ACCOUNTS
CHAPTER 3TAX ADMINISTRATION
SUBCHAPTER JJCIGARETTE AND TOBACCO PRODUCTS REGULATION
RULE §3.1201Fee for Outdoor Advertising of Cigarettes or Tobacco Products

(a) Definitions. The following words and terms, when used in this section shall have the following meanings, unless the context clearly indicates otherwise.

  (1) Cigarettes--This term has the meaning assigned by Tax Code, §154.001.

  (2) Gross sales price--The sum of:

    (A) production costs, including the cost of layout, paper, materials, printing, distribution, and sign installation, but not the cost of design and artwork;

    (B) media costs, including the cost for leasing billboards, or any other outdoor space where a message or sign is displayed; and

    (C) cost of sales or commissions paid to an agency or broker.

  (3) Outdoor advertising--A medium, including a structure, display, light device, figure, painting, drawing, message, plaque, poster, sign, or billboard, that:

    (A) is used to advertise or to inform;

    (B) is visible from the main-traveled way of a street or highway; and

    (C) does not include:

      (i) a medium displayed inside a building, even if the medium is visible from outside the building; or

      (ii) a medium that displays the name of the business, unless that medium also contains a cigarette or tobacco product trademark, brand or trade name, or logo type.

  (4) Purchase--A transaction, including:

    (A) an installment and credit purchase;

    (B) an exchange of service for service or money;

    (C) a signed contract between a purchaser and a seller; and

    (D) any other transaction that is the functional equivalent of a purchase.

  (5) Tobacco product--This term has the meaning assigned by the Tax Code, §155.001.

(b) Fee imposed. A fee is imposed on each purchaser of outdoor advertising in an amount that is equal to 10% of the gross sales price of any outdoor advertising of cigarettes or tobacco products in this state.

(c) Reporting period. A purchaser of outdoor advertising for cigarettes or tobacco products shall file a report on or before the 20th day of the month following the end of the calendar quarter in which the advertising was purchased.

  (1) Except as provided in paragraph (2) of this subsection, the calendar quarter report due dates and the corresponding reporting periods are:

Attached Graphic

  (2) The first report due will cover the period of September 1, 1997, through December 31, 1997. The due date for the report due October 20, 1997, is extended to January 20, 1998.

(d) Report forms. Each purchaser must report the outdoor advertising fee on the Texas cigarettes or tobacco products outdoor advertising fee report as prescribed by the comptroller. The fact that a purchaser does not receive the form or does not receive the correct form from the comptroller for the filing of the report does not relieve the purchaser of the responsibility of filing a report and paying the required fee.

(e) Payment of the fee. On or before the 20th day of the month following each reporting period, every purchaser shall remit the total fee amount due.

(f) Records required.

  (1) Invoices, purchase contracts, installment or credit agreements, or any other records relating to the outdoor advertising purchase must be kept by the purchaser for at least four years after the date each report is filed with the comptroller.

  (2) Any records or equipment of any person liable for the fee must be made available to the comptroller or the comptroller's representative for examination to verify the accuracy of any report made or to determine the fee liability in the event no report is filed.

  (3) Each purchaser must maintain records showing:

    (A) the location at which outdoor advertising is displayed in this state;

    (B) the date on which the advertising was purchased;

    (C) the gross sales price paid for outdoor advertising displayed in this state; and

    (D) if outdoor advertising is purchased for display in more than one state, information to support an allocation to Texas of the appropriate portion of the total amount paid.

(g) Penalty and interest.

  (1) A purchaser who does not file a report as provided by subsection (c) of this section, shall pay a penalty of 5.0% of the amount of the fee due and payable. If the purchaser does not file the report and pay the fee before the 30th day after the date on which the fee or report is due, the person shall pay a penalty of an additional 5.0% of the amount of the fee due and payable.

  (2) The provisions of the Tax Code, Chapter 101 and Chapters 111 through 113, apply to the administration, payment, collection, and enforcement of fees imposed under this section, in the same manner as those chapters and sections apply to the administration, payment, collection, and enforcement of taxes imposed under the Tax Code, Title 2.

(h) Administrative remedies.

  (1) A purchaser of outdoor advertising who violates any part of the Health and Safety Code, §161.123, or a rule adopted under that section, will be subject to an administrative penalty and will be notified by certified mail of the reasons for the penalty. The recourse for a purchaser who does not agree with the imposed administrative penalty will be governed by the provisions of the Tax Code, Chapter 111, the Government Code, Chapter 2001, and §§1.1-1.42 of this title (relating to Practice and Procedure).

  (2) The administrative penalty for a violation may be in an amount not to exceed $5,000. Each day a violation continues or occurs is a separate violation for the purpose of imposing a penalty.

  (3) The following factors shall be taken into consideration when an administrative penalty is imposed:

    (A) the amount of fees due and owing;

    (B) the attempted concealment of misconduct by the person who committed the violation;

    (C) premeditated misconduct by the person who committed the violation;

    (D) intentional misconduct by the person who committed the violation;

    (E) the motive of the person who committed the violation;

    (F) prior misconduct of a similar or related nature by the person who committed the violation;

    (G) prior written warnings from any government agency or official regarding statutes or regulations pertaining to the misconduct;

    (H) violation by the person who committed the violation of an order of the comptroller;

    (I) lack of rehabilitative potential or likelihood for future misconduct of a similar nature;

    (J) relevant circumstances increasing the seriousness of the misconduct; and

    (K) any other matter justice may require.

  (4) If the comptroller finds that a violation has occurred and imposes an administrative penalty, the comptroller shall give notice of the violation by certified mail to the permit holder within 15 days of the finding of a violation. The notice must include a statement of the rights of the permit holder to judicial review.

  (5) If the permit holder does not respond to the written notice of violation within 15 calendar days, an order finding that a violation has occurred may be entered and the maximum penalty may be imposed. If the permit holder requests an administrative hearing, a hearing will be set. The notice of the setting of the hearing shall be governed by §§1.1-1.42 of this title. The permit holder will have 15 days in which to respond to the setting of the hearing.

  (6) If the comptroller finds that a purchaser of outdoor advertising violates this section or Health and Safety Code, Subchapter K, §161.123, or a rule made pursuant to these sections, the comptroller may impose an administrative fine and/or suspend or revoke a permit pursuant to the Tax Code, §154.1142.

  (7) An administrative hearing will be held at the office of the Comptroller of Public Accounts in Austin, Texas. The recourse for a permit holder who does not agree with the administrative decision will be governed by the provisions of the Tax Code, Chapter 111; Government Code, Chapter 2001; and §§1.1-1.42 of this title.

  (8) The burden of proof in an administrative hearing pursuant to this rule is by a preponderance of the evidence unless otherwise provided by statute.

  (9) A penalty collected under this section shall be deposited in the general revenue fund.

(i) If the purchaser of outdoor advertising does not pay the amount of the administrative penalty, the comptroller may refer the matter to the attorney general for collection of the amount of the penalty.

(j) Effective date. The fee is imposed on all outdoor advertising of cigarettes or tobacco products purchased after August 31, 1997.


Source Note: The provisions of this §3.1201 adopted to be effective January 5, 1998, 22 TexReg 12786; amended to be effective March 14, 2000, 25 TexReg 2156

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