Sec. 101. Tobacco excise tax 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 $97.65 . Section 5701(b) of such Code is amended— by striking $50.33 in paragraph
(1)and inserting $97.65 , and by striking $105.69 in paragraph
(2)and inserting $205.06 . Section 5701(f) of the Internal Revenue Code of 1986 is amended by striking $2.8311 cents and inserting $48.08 . Section 5701(g) of such Code is amended by striking $24.78 and inserting $48.08 . Paragraph
(2)of section 5701(a) of the Internal Revenue Code of 1986 is amended by striking 52.75 percent and all that follows through the period and inserting $24.78 per pound (and a proportionate tax at the like rate on all fractional parts of a pound) but not less than 5.033 cents per cigar. . The Secretary of the Treasury or the Secretary of the Treasury's delegate may issue guidance regarding the appropriate method for determining the weight of large cigars for purposes of calculating the applicable tax under section 5701(a)(2) of the Internal Revenue Code of 1986. Subsection
(o)of section 5702 of the Internal Revenue Code of 1986 is amended to read as follows: The term roll-your-own tobacco means— any tobacco which, because of its appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or purchased by, consumers as tobacco for making cigarettes or cigars, or for use as wrappers thereof, or any processed tobacco which is— not removed for exportation, and removed or transferred to a person who has not been issued a permit pursuant to section 5713. . Section 5701(e) of the Internal Revenue Code of 1986 is amended— in paragraph (1), by striking $1.51 and inserting $26.04 ; in paragraph (2), by striking 50.33 cents and inserting $10.42 ; and by adding at the end the following: On discrete single-use units, $97.65 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 not intended to be smoked, 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 the Internal Revenue Code of 1986 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 Tobacco 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. . For purposes of section 5701(i) of the Internal Revenue Code of 1986, not later than 12 months after the date that a product has been determined to be a tobacco product by the Food and Drug Administration, the Secretary of the Treasury (or the Secretary of the Treasury's delegate) shall issue final regulations establishing the level of tax for such product that is equivalent to the tax rate for cigarettes on an estimated per use basis. Subsection
(c)of section 5702 of the Internal Revenue Code of 1986 is amended to read as follows: The term tobacco products means— cigars, cigarettes, smokeless tobacco, pipe tobacco, and roll-your-own tobacco, and any other product subject to tax pursuant to section 5701(i). . Subsection
(d)of section 5702 of such Code is amended by striking cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own tobacco each place it appears and inserting tobacco products . Section 5701 of the Internal Revenue Code of 1986, as amended by subsection (f), is amended by adding at the end the following new subsection: In the case of any calendar year after 2017, 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 2016 for calendar year 1992 in subparagraph
(B)thereof. If any amount as adjusted under paragraph
(1)is not a multiple of $0.01, such amount shall be rounded to the next highest multiple of $0.01. . 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. Except as provided in paragraphs
(2)through (4), 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 the last day of the month which includes the date of the enactment of this Act. The amendments made by subsections (d), (e)(1)(C), and (e)(2) shall apply to articles removed (as defined in section 5702(j) of the Internal Revenue Code of 1986) after the date that is 6 months after the date of the enactment of this Act. The amendments made by subsection
(c)shall apply to articles removed after December 31, 2017. The amendments made by subsection (f)(1) shall apply to products removed after the last day of the month which includes the date that the Secretary of the Treasury (or the Secretary of the Treasury's delegate) issues final regulations establishing the level of tax for such product.
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