Texas Tax Code 154.025 – Lien to Secure Payment of Tax
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(a) In this section, “collecting agent” means a person who pays or who is liable for payment of the tax imposed under § 154.022 and who is not the consumer of the cigarettes on which the tax is imposed.
(b) A collecting agent is an agent of the state for the purpose of collecting the cigarette tax for the state.
Terms Used In Texas Tax Code 154.025
- Attachment: A procedure by which a person's property is seized to pay judgments levied by the court.
- Comptroller: means the Comptroller of Public Accounts of the State of Texas. See Texas Tax Code 1.04
- Damages: Money paid by defendants to successful plaintiffs in civil cases to compensate the plaintiffs for their injuries.
- Foreclosure: A legal process in which property that is collateral or security for a loan may be sold to help repay the loan when the loan is in default. Source: OCC
- Lien: A claim against real or personal property in satisfaction of a debt.
- Person: includes corporation, organization, government or governmental subdivision or agency, business trust, estate, trust, partnership, association, and any other legal entity. See Texas Government Code 311.005
(c) A collecting agent has a lien on:
(1) cigarettes on which the collecting agent has paid or is liable for the payment of the tax imposed under § 154.022; and
(2) the proceeds from the sale of the cigarettes.
(d) The lien under this section attaches to all cigarettes purchased from a collecting agent and all proceeds from the sale of the cigarettes on the date that the cigarettes are sold by the collecting agent. An action by the collecting agent or any other person is not required to perfect the lien.
(e) The lien under this section takes priority over any other lien on the cigarettes purchased from a collecting agent and the proceeds from the sale of the cigarettes, except the preferred state tax lien under § 154.413.
(f) A collecting agent may enforce a lien under this section through any legal proceeding, including a proceeding under Title 11, U.S.C., and assertion of an administrative priority claim to the extent that the lien does not adequately protect the collecting agent.
(g) A prior demand is not required to commence an action to enforce a lien under this section.
(h) In an action to enforce a lien under this section, a court may prevent the resale of any cigarettes on which a collecting agent has the lien by any appropriate order, including the seizure of the cigarettes by an appropriate legal officer through attachment, sequestration, or other procedure. It is not a defense to the granting of injunctive relief by the court that remedies at law, including a suit for damages, are available.
(i) A court shall distribute money received from the foreclosure of a lien under this section in the following order:
(1) payment of all costs and expenses, including attorney fees, incurred by a collecting agent to enforce the lien;
(2) payment of taxes on the cigarettes purchased from the collecting agent and subject to the lien, including not only the taxes on the cigarettes and proceeds subject to the foreclosure but also the taxes on all cigarettes for which the collecting agent has not received payment in accordance with the terms of the agreement between the collecting agent and the person to whom the collecting agent sold the cigarettes; and
(3) any remaining money to the person against whom the lien operates.
(j) A lien under this section may not be waived if the tax payment that is secured by the lien has not been paid to the collecting agent. A purported waiver of the tax payment is void.
(k) To the extent allowed by law, the priority claim of the comptroller under 11 U.S.C. § 507(d) for taxes imposed by § 154.022 is assigned to the collecting agent.