This blog post was cited in the November 6, 2026, 2FIRSTS article, “Texas Extends Tobacco Tax Interpretation to a 6-Methylnicotine Product, Citing VELO Ruling.”

In June, we reported on the Texas Supreme Court’s decision holding that RJR Vapor’s VELO oral nicotine pouches are subject to the “tobacco products” tax under Texas law. The Texas Comptroller has now relied on the Court’s reasoning in that case to extend the applicability of the Texas tobacco products tax beyond oral nicotine products. In a September private letter ruling (PLR), the Texas Comptroller considered a request from a taxpayer seeking guidance as to whether its smokeable “ersatz cigarettes” or “ercigs,” containing non-tobacco plant matter and a synthetic nicotine analog, are taxable as “cigarettes” or “tobacco products” under the Texas Tax Code. The Comptroller found that the ercigs are not taxable “cigarettes,” but they are taxable “tobacco products” under Texas Tax Code § 155.001(15)(E), even though the ercigs contain no tobacco or quantifiable nicotine. The PLR is the Texas Comptroller’s written determination of how relevant tax laws, rules, and guidance apply to the taxpayer’s specific set of facts. It is binding on the Comptroller, and the taxpayer may rely on it. The PLR is also the first public document of which we are aware that illustrates how the Texas Comptroller can interpret the Court’s recent decision to expand the applicability of the Texas tobacco products tax to novel products. As discussed below, the PLR also reaches a question the Court expressly left open.