Sec. 101. Tobacco tax increase and parity
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Section 5701(a)(1) of the Internal Revenue Code of 1986 is amended by striking $50.33 and inserting $97.55 . Section 5701(b) of such Code is amended— by striking $50.33 in paragraph
(1)and inserting $97.55 , and by striking $105.69 in paragraph
(2)and inserting $204.09 . Section 5701(f) of the Internal Revenue Code of 1986 is amended by striking $2.8311 cents and inserting $49.55 . Section 5701(g) of such Code is amended by striking $24.78 and inserting $49.55 . Paragraphs
(1)and
(2)of section 5701(a) of the Internal Revenue Code of 1986 are each amended by striking three pounds per thousand and inserting four and one-half pounds per thousand . Paragraph
(2)of section 5702(b) of the Internal Revenue Code of 1986 is amended by inserting before the final period the following: , which includes any roll for smoking containing tobacco that weighs no more than four and a half pounds per thousand, unless it is wrapped in whole tobacco leaf and does not have a cellulose acetate or other cigarette-style filter . Section 5701(e) of the Internal Revenue Code of 1986 is amended— in paragraph (1), by striking $1.51 and inserting $25.91 ; in paragraph (2), by striking 50.33 cents and inserting $10.37 ; and by adding at the end the following: On discrete single-use units, $97.55 per each 1,000 single-use units. . Section 5702(m) of such Code is amended— in paragraph (1), by striking or chewing tobacco and inserting chewing tobacco, discrete single-use unit ; in paragraphs
(2)and (3), by inserting that is not a discrete single-use unit before the period in each such paragraph; and by adding at the end the following: The term discrete single-use unit means any product containing tobacco that— is intended or expected to be consumed without being combusted; and is in the form of a lozenge, tablet, pill, pouch, dissolvable strip, or other discrete single-use or single-dose unit. . Section 5701 of such Code is amended by adding at the end the following new subsection: Any product not otherwise described under this section that has been determined to be a tobacco product by the Food and Drug Administration through its authorities under the Family Smoking Prevention and Control Act shall be taxed at a level of tax equivalent to the tax rate for cigarettes on an estimated per use basis as determined by the Secretary. . Section 5702(c) of the Internal Revenue Code of 1986 is amended by inserting before the period the following: , and any other product containing tobacco that is intended or expected to be consumed . Section 5702(f) of such Code is amended by inserting before the period or cigars . Section 5702(k) of such Code is amended by inserting or any other tobacco product after cigars or cigarettes . Section 5702(n) of such Code is amended— by striking The term and inserting the following: The term ; and by adding at the end the following: Any tobacco that meets the definition under both this subsection and section 5702(o) shall be treated as roll-your-own tobacco under section 5702(o). Paragraph
(2)shall not apply to a product that, as of January 1, 2009, was either commercially marketed in the United States in packaging that bore, pursuant to part 40 or 41 of title 27, Code of Federal Regulations, a designation as pipe tobacco or Tax Class L , or is substantially equivalent to such product, provided that such product is widely used as pipe tobacco. . Section 5701 of the Internal Revenue Code of 1986, as amended by subsection (f)(3), is amended by adding at the end the following new subsection: In the case of any calendar year after 2013, each amount set forth in this section shall be increased by an amount equal to— such amount, multiplied by the cost-of-living adjustment determined under section 1(f)(3) for such calendar year by substituting calendar year 2012 for calendar year 1992 in subparagraph
(B)thereof. . On tobacco products manufactured in or imported into the United States which are removed before any tax increase date and held on such date for sale by any person, there is hereby imposed a tax in an amount equal to the excess of— the tax which would be imposed under section 5701 of the Internal Revenue Code of 1986 on the article if the article had been removed on such date, over the prior tax (if any) imposed under section 5701 of such Code on such article. Each person shall be allowed as a credit against the taxes imposed by paragraph
(1)an amount equal to $500. Such credit shall not exceed the amount of taxes imposed by paragraph
(1)on such date for which such person is liable. A person holding tobacco products on any tax increase date to which any tax imposed by paragraph
(1)applies shall be liable for such tax. The tax imposed by paragraph
(1)shall be paid in such manner as the Secretary shall prescribe by regulations. The tax imposed by paragraph
(1)shall be paid on or before the date that is 120 days after the effective date of the tax rate increase. Notwithstanding the Act of June 18, 1934 (commonly known as the Foreign Trade Zone Act, 48 Stat. 998, 19 U.S.C. 81a et seq.), or any other provision of law, any article which is located in a foreign trade zone on any tax increase date shall be subject to the tax imposed by paragraph
(1)if— internal revenue taxes have been determined, or customs duties liquidated, with respect to such article before such date pursuant to a request made under the 1st proviso of section 3(a) of such Act, or such article is held on such date under the supervision of an officer of the United States Customs and Border Protection of the Department of Homeland Security pursuant to the 2d proviso of such section 3(a). For purposes of this subsection— Any term used in this subsection which is also used in section 5702 of such Code shall have the same meaning as such term has in such section. The term tax increase date means the effective date of any increase in any tobacco product excise tax rate pursuant to the amendments made by this section (other than subsection
(g)thereof). The term Secretary means the Secretary of the Treasury or the Secretary’s delegate. Rules similar to the rules of section 5061(e)(3) of such Code shall apply for purposes of this subsection. All provisions of law, including penalties, applicable with respect to the taxes imposed by section 5701 of such Code shall, insofar as applicable and not inconsistent with the provisions of this subsection, apply to the floor stocks taxes imposed by paragraph (1), to the same extent as if such taxes were imposed by such section 5701. The Secretary may treat any person who bore the ultimate burden of the tax imposed by paragraph
(1)as the person to whom a credit or refund under such provisions may be allowed or made. The amendments made by this section shall apply to articles removed (as defined in section 5702(j) of the Internal Revenue Code of 1986) after December 31, 2013.
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