State Tax Day - Current, S.7, Texas—Sales and Use, Tobacco Taxes: Electronic Cigarettes FAQ, (Nov 4, 2025)

Texas has revised its list of sales and use tax frequently asked questions regarding electronic cigarettes. The revision adds a discussion of whether electronic cigarettes may be sold through vending machines, which is permitted only if the retailer holds an e-cigarette retailer permit for the entire commercial business location at which the vending machine is located.

Otherwise, the content remains the same. It clarifies that cigarette tax is only due on cigarettes made of tobacco or tobacco mixed with another ingredient and E-cigarettes do not fall within this definition because they do not contain tobacco. However, E-cigarettes are subject to sales and use tax. E-cigarettes containing nicotine are not subject to the tobacco tax. Even though nicotine is a component of tobacco, it does not meet the definition of tobacco.

Letter No. 202510003W, Texas Comptroller of Public Accounts, October 30, 2025, ¶405-136