Sec. 138504. Increase in tax on certain tobacco products and imposition of tax on nicotine
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Section 5701(b)(1) is amended by striking $50.33 and inserting $100.66 . Section 5701(b)(2) is amended by striking $105.69 and inserting $211.39 . Section 5701(a)(1) is amended by striking $50.33 and inserting $100.66 . Section 5701(a)(2) is amended by striking 52.75 percent and all that follows through the period and inserting $49.56 per pound and a proportionate tax at the like rate on all fractional parts of a pound but not less than 10.06 cents per cigar. . Section 5701(e) is amended— in paragraph (1), by striking $1.51 and inserting $26.84 , in paragraph (2), by striking 50.33 cents and inserting $10.70 , and by adding at the end the following new paragraph:
On discrete single-use units, $100 per thousand. . Section 5702(m) 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 and that is not a discrete single-use unit before the period at the end of each such paragraph, and by adding at the end the following new paragraph: 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(f) is amended by striking $2.8311 cents and inserting $49.56 . Section 5701(g) is amended by striking $24.78 and inserting $49.56 . Section 5702(o) 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 is amended by redesignating subsection
(h)as subsection
(i)and by inserting after subsection
(g)the following new subsection: On taxable nicotine, manufactured in or imported into the United States, there shall be imposed a tax equal to the dollar amount specified in section 5701(b)(1) per 1,810 milligrams of nicotine (and a proportionate tax at the like rate on any fractional part thereof). . Section 5702 is amended by adding at the end the following new subsection: Except as otherwise provided in this subsection, the term taxable nicotine means any nicotine which has been extracted, concentrated, or synthesized. Such term shall not include any nicotine if the manufacturer or importer thereof demonstrates to the satisfaction of the Secretary of Health and Human Services that such nicotine will be used in— a drug— that is approved under section 505 of the Federal Food, Drug, and Cosmetic Act or licensed under section 351 of the Public Health Service Act; or for which an investigational use exemption has been authorized under section 505(i) of the Federal Food, Drug, and Cosmetic Act or under section 351(a) of the Public Health Service Act; or a combination product (as described in section 503(g) of the Federal Food, Drug, and Cosmetic Act), the constituent parts of which were approved or cleared under section 505, 510(k), or 515 of such Act. Tobacco products meeting the definition of cigars, cigarettes, smokeless tobacco, pipe tobacco, and roll-your-own tobacco in this section shall be classified and taxed as such despite any concentration of the nicotine inherent in those products or any addition of nicotine to those products during the manufacturing process. The Secretary shall prescribe such regulations or other guidance as is necessary or appropriate to carry out the purposes of this subsection, including regulations or other guidance for coordinating the taxation of tobacco products and taxable nicotine to protect revenue and prevent double taxation. . Section 5702(c) is amended by striking and roll-your-own tobacco and inserting roll-your-own tobacco, and taxable nicotine . Section 5702 , as amended by paragraph (2), is amended by adding at the end the following new subsection: Any person who extracts, concentrates, or synthesizes nicotine shall be treated as a manufacturer of taxable nicotine (and as manufacturing such taxable nicotine). Any reference to a manufacturer of tobacco products, or to manufacturing tobacco products, shall be treated as including a reference to a manufacturer of taxable nicotine, or to manufacturing taxable nicotine, respectively. . Section 5702 is amended by striking subsection (l). On covered tobacco products, and cigarette papers and tubes, manufactured in or imported into the United States which are removed before the 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. For purposes of this subsection, the term covered tobacco products means any tobacco product other than— cigars described in section 5701(a)(2) of the Internal Revenue Code of 1986, discrete single-use units (as defined in section 5702(m)(4) of such Code, as amended by this section), and taxable nicotine (as defined in section 5702(q) of such Code, as amended by this section). Each person shall be allowed as a credit against the taxes imposed by paragraph
(1)an amount equal to the lesser of $1,000 or the amount of such taxes. For purposes of the preceding sentence, all persons treated as a single employer under subsection (b), (c), (m), or
(o)of section 414 of the Internal Revenue Code of 1986 shall be treated as 1 person for purposes of this paragraph. The person referred to in paragraph
(1)shall be liable for the tax imposed by such paragraph. The tax imposed by paragraph
(1)shall be paid in such manner as the Secretary may provide. 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 covered tobacco products, or cigarette papers and tubes, which are located in a foreign trade zone on the 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, the term tax increase date means the first day of the first calendar quarter described in subsection (k)(1). Terms used in this subsection which are also used in section 5702 of the Internal Revenue Code of 1986 shall have the same meaning as when used in such section. Except as otherwise provided in this subsection, the amendments made by this section shall apply to articles removed in calendar quarters beginning after the date of the enactment of this Act. The amendments made by subsections (c), (d)(1)(C), (d)(2), and
(h)shall apply to articles removed in calendar quarters beginning after the date which is 180 days after the date of the enactment of this Act. A person which is lawfully engaged in business as a manufacturer or importer of taxable nicotine (within the meaning of subchapter A of chapter 52 of the Internal Revenue Code of 1986, as amended by this section) on the date of the enactment of this Act, first becomes subject to the requirements of subchapter B of chapter 52 of such Code by reason of the amendments made by this section, and submits an application under such subchapter B to engage in such business not later than 90 days after the date of the enactment of this Act, shall not be denied the right to carry on such business by reason of such requirements before final action on such application.
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Sec. 138504
Increase in tax on certain tobacco products and imposition of tax on nicotine
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