Sec. 201. Establishing excise tax equity among all tobacco product tax rates
810 words·~4 min read·
/bill/116/hr/293/ih/section-201A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Section 5701(f) of the Internal Revenue Code of 1986 is amended by striking $2.8311 cents and inserting $24.78 . Section 5701(e) of the Internal Revenue Code of 1986 is amended— in paragraph (1), by striking $1.51 and inserting $13.42 ; in paragraph (2), by striking 50.33 cents and inserting $5.37 ; and by adding at the end the following: On discrete single-use units, $50.33 per thousand. . Section 5702(m) of such Code is amended— in paragraph (1), by striking or chewing tobacco and inserting , chewing tobacco, or 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. . 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 the following: $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'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 by inserting , and includes processed tobacco that is removed for delivery or delivered to a person other than a person with a permit provided under section 5713, but does not include removals of processed tobacco for exportation after wrappers thereof . 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 later of the date of the enactment of this Act or 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 such Code, as amended by subsection (e), is amended by adding at the end the following new subsection: In the case of any calendar year beginning after 2019, the dollar amounts provided under this chapter shall each be increased by an amount equal to— such dollar amount, multiplied by the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting ‘calendar year 2018’ for ‘calendar year 2016’ in subparagraph (A)(ii) 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. . 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 (b)(1)(C), (b)(2), and
(d)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, 2019. The amendments made by subsection (e)(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.