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       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
