
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document affected by Public Law 106-554 Section 1(a)(7)]
[CITE: 26USC5701]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
      Subtitle E--Alcohol, Tobacco, and Certain Other Excise Taxes
 
       CHAPTER 52--TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES
 
Subchapter A--Definitions; Rate and Payment of Tax; Exemption From Tax; 
                     and Refund and Drawback of Tax
 
Sec. 5701. Rate of tax


(a) Cigars

    On cigars, manufactured in or imported into the United States, there 
shall be imposed the following taxes:

                          (1) Small cigars

        On cigars, weighing not more than 3 pounds per thousand, $1.828 
    cents per thousand ($1.594 cents per thousand on cigars removed 
    during 2000 or 2001);

                          (2) Large cigars

        On cigars weighing more than 3 pounds per thousand, a tax equal 
    to 20.719 percent (18.063 percent on cigars removed during 2000 or 
    2001) of the price for which sold but not more than $48.75 per 
    thousand ($42.50 per thousand on cigars removed during 2000 or 
    2001).

Cigars not exempt from tax under this chapter which are removed but not 
intended for sale shall be taxed at the same rate as similar cigars 
removed for sale.

(b) Cigarettes

    On cigarettes, manufactured in or imported into the United States, 
there shall be imposed the following taxes:

                        (1) Small cigarettes

        On cigarettes, weighing not more than 3 pounds per thousand, 
    $19.50 per thousand ($17 per thousand on cigarettes removed during 
    2000 or 2001);

                        (2) Large cigarettes

        On cigarettes, weighing more than 3 pounds per thousand, $40.95 
    per thousand ($35.70 per thousand on cigarettes removed during 2000 
    or 2001); except that, if more than 6\1/2\ inches in length, they 
    shall be taxable at the rate prescribed for cigarettes weighing not 
    more than 3 pounds per thousand, counting each 2\3/4\ inches, or 
    fraction thereof, of the length of each as one cigarette.

(c) Cigarette papers

    On cigarette papers, manufactured in or imported into the United 
States, there shall be imposed a tax of 1.22 cents (1.06 cents on 
cigarette papers removed during 2000 or 2001) for each 50 papers or 
fractional part thereof; except that, if cigarette papers measure more 
than 6\1/2\ inches in length, they shall be taxable at the rate 
prescribed, counting each 2\3/4\ inches, or fraction thereof, of the 
length of each as one cigarette paper.

(d) Cigarette tubes

    On cigarette tubes, manufactured in or imported into the United 
States, there shall be imposed a tax of 2.44 cents (2.13 cents on 
cigarette tubes removed during 2000 or 2001) for each 50 tubes or 
fractional part thereof, except that if cigarette tubes measure more 
than 6\1/2\ inches in length, they shall be taxable at the rate 
prescribed, counting each 2\3/4\ inches, or fraction thereof, of the 
length of each as one cigarette tube.

(e) Smokeless tobacco

    On smokeless tobacco, manufacturered \1\ in or imported into the 
United States, there shall be imposed the following taxes:
---------------------------------------------------------------------------
    \1\ So in original. Probably should be ``manufactured''.
---------------------------------------------------------------------------

                              (1) Snuff

        On snuff, 58.5 cents (51 cents on snuff removed during 2000 or 
    2001) per pound and a proportionate tax at the like rate on all 
    fractional parts of a pound.

                         (2) Chewing tobacco

        On chewing tobacco, 19.5 cents (17 cents on chewing tobacco 
    removed during 2000 or 2001) per pound and a proportionate tax at 
    the like rate on all fractional parts of a pound.

(f) Pipe tobacco

    On pipe tobacco, manufactured in or imported into the United States, 
there shall be imposed a tax of $1.0969 cents (95.67 cents on pipe 
tobacco removed during 2000 or 2001) per pound (and a proportionate tax 
at the like rate on all fractional parts of a pound).

(g) Roll-your-own tobacco

    On roll-your-own tobacco, manufactured in or imported into the 
United States, there shall be imposed a tax of $1.0969 cents (95.67 
cents on roll-your-own tobacco removed during 2000 or 2001) per pound 
(and a proportionate tax at the like rate on all fractional parts of a 
pound).

(h) Imported tobacco products and cigarette papers and tubes

    The taxes imposed by this section on tobacco products and cigarette 
papers and tubes imported into the United States shall be in addition to 
any import duties imposed on such articles, unless such import duties 
are imposed in lieu of internal revenue tax.

(Aug. 16, 1954, ch. 736, 68A Stat. 705; Mar. 30, 1955, ch. 18, 
Sec. 3(a)(9), 69 Stat. 14; Mar. 29, 1956, ch. 115, Sec. 3(a)(9), 70 
Stat. 66; Pub. L. 85-12, Sec. 3(a)(7), Mar. 29, 1957, 71 Stat. 9; Pub. 
L. 85-475, Sec. 3(a)(7), June 30, 1958, 72 Stat. 259; Pub. L. 85-859, 
title II, Sec. 202, Sept. 2, 1958, 72 Stat. 1414; Pub. L. 86-75, 
Sec. 3(a)(7), June 30, 1959, 73 Stat. 157; Pub. L. 86-564, title II, 
Sec. 202(a)(9), June 30, 1960, 74 Stat. 290; Pub. L. 86-779, Sec. 1, 
Sept. 14, 1960, 74 Stat. 998; Pub. L. 87-72, Sec. 3(a)(9), June 30, 
1961, 75 Stat. 193; Pub. L. 87-508, Sec. 3(a)(8), June 28, 1962, 76 
Stat. 114; Pub. L. 88-52, Sec. 3(a)(9), June 29, 1963, 77 Stat. 72; Pub. 
L. 88-348, Sec. 2(a)(9), June 30, 1964, 78 Stat. 237; Pub. L. 89-44, 
title V, Secs. 501(f), 502(a), June 21, 1965, 79 Stat. 150; Pub. L. 90-
240, Sec. 4(a), Jan. 2, 1968, 81 Stat. 776; Pub. L. 94-455, title XIX, 
Sec. 1905(a)(24), title XXI, Sec. 2128(a), Oct. 4, 1976, 90 Stat. 1821, 
1921; Pub. L. 97-248, title II, Sec. 283(a), Sept. 3, 1982, 96 Stat. 
568; Pub. L. 99-272, title XIII, Sec. 13202(a), Apr. 7, 1986, 100 Stat. 
311; Pub. L. 100-647, title V, Sec. 5061(a), Nov. 10, 1988, 102 Stat. 
3679; Pub. L. 101-508, title XI, Sec. 11202(a)-(f), Nov. 5, 1990, 104 
Stat. 1388-419; Pub. L. 105-33, title IX, Sec. 9302(a)-(g)(1), (h)(3), 
Aug. 5, 1997, 111 Stat. 671, 672, 674.)


                               Amendments

    1997--Subsec. (a)(1). Pub. L. 105-33, Sec. 9302(b)(1), substituted 
``$1.828 cents per thousand ($1.594 cents per thousand on cigars removed 
during 2000 or 2001)'' for ``$1.125 cents per thousand (93.75 cents per 
thousand on cigars removed during 1991 or 1992)''.
    Subsec. (a)(2). Pub. L. 105-33, Sec. 9302(b)(2), substituted ``equal 
to 20.719 percent (18.063 percent on cigars removed during 2000 or 2001) 
of the price for which sold but not more than $48.75 per thousand 
($42.50 per thousand on cigars removed during 2000 or 2001).'' for 
``equal to--
        ``(A) 10.625 percent of the price for which sold but not more 
    than $25 per thousand on cigars removed during 1991 or 1992, and
        ``(B) 12.75 percent of the price for which sold but not more 
    than $30 per thousand on cigars removed after 1992.''
    Subsec. (b)(1). Pub. L. 105-33, Sec. 9302(a)(1), substituted 
``$19.50 per thousand ($17 per thousand on cigarettes removed during 
2000 or 2001)'' for ``$12 per thousand ($10 per thousand on cigarettes 
removed during 1991 or 1992)''.
    Subsec. (b)(2). Pub. L. 105-33, Sec. 9302(a)(2), substituted 
``$40.95 per thousand ($35.70 per thousand on cigarettes removed during 
2000 or 2001)'' for ``$25.20 per thousand ($21 per thousand on 
cigarettes removed during 1991 or 1992)''.
    Subsec. (c). Pub. L. 105-33, Sec. 9302(h)(3), substituted ``On 
cigarette papers,'' for ``On each book or set of cigarette papers 
containing more than 25 papers,''.
    Pub. L. 105-33, Sec. 9302(c), substituted ``1.22 cents (1.06 cents 
on cigarette papers removed during 2000 or 2001)'' for ``0.75 cent 
(0.625 cent on cigarette papers removed during 1991 or 1992)''.
    Subsec. (d). Pub. L. 105-33, Sec. 9302(d), substituted ``2.44 cents 
(2.13 cents on cigarette tubes removed during 2000 or 2001)'' for ``1.5 
cents (1.25 cents on cigarette tubes removed during 1991 or 1992)''.
    Subsec. (e)(1). Pub. L. 105-33, Sec. 9302(e)(1), substituted ``58.5 
cents (51 cents on snuff removed during 2000 or 2001)'' for ``36 cents 
(30 cents on snuff removed during 1991 or 1992)''.
    Subsec. (e)(2). Pub. L. 105-33, Sec. 9302(e)(2), substituted ``19.5 
cents (17 cents on chewing tobacco removed during 2000 or 2001)'' for 
``12 cents (10 cents on chewing tobacco removed during 1991 or 1992)''.
    Subsec. (f). Pub. L. 105-33, Sec. 9302(f), substituted ``$1.0969 
cents (95.67 cents on pipe tobacco removed during 2000 or 2001)'' for 
``67.5 cents (56.25 cents on pipe tobacco removed during 1991 or 
1992)''.
    Subsecs. (g), (h). Pub. L. 105-33, Sec. 9302(g)(1), added subsec. 
(g) and redesignated former subsec. (g) as (h).
    1990--Subsec. (a)(1). Pub. L. 101-508, Sec. 11202(a)(1), substituted 
``$1.125 cents per thousand (93.75 cents per thousand on cigars removed 
during 1991 or 1992)'' for ``75 cents per thousand''.
    Subsec. (a)(2). Pub. L. 101-508, Sec. 11202(a)(2), substituted 
``equal to--'' and subpars. (A) and (B) for ``equal to 8\1/2\ percent of 
the wholesale price, but not more than $20 per thousand.''
    Subsec. (b)(1). Pub. L. 101-508, Sec. 11202(b)(1), substituted ``$12 
per thousand ($10 per thousand on cigarettes removed during 1991 or 
1992)'' for ``$8 per thousand''.
    Subsec. (b)(2). Pub. L. 101-508, Sec. 11202(b)(2), substituted 
``$25.20 per thousand ($21 per thousand on cigarettes removed during 
1991 or 1992)'' for ``$16.80 per thousand''.
    Subsec. (c). Pub. L. 101-508, Sec. 11202(c), substituted ``0.75 cent 
(0.625 cent on cigarette papers removed during 1991 or 1992)'' for ``\1/
2\ cent''.
    Subsec. (d). Pub. L. 101-508, Sec. 11202(d), substituted ``1.5 cents 
(1.25 cents on cigarette tubes removed during 1991 or 1992)'' for ``1 
cent''.
    Subsec. (e)(1). Pub. L. 101-508, Sec. 11202(e)(1), substituted ``36 
cents (30 cents on snuff removed during 1991 or 1992)'' for ``24 
cents''.
    Subsec. (e)(2). Pub. L. 101-508, Sec. 11202(e)(2), substituted ``12 
cents (10 cents on chewing tobacco removed during 1991 or 1992)'' for 
``8 cents''.
    Subsec. (f). Pub. L. 101-508, Sec. 11202(f), substituted ``67.5 
cents (56.25 cents on pipe tobacco removed during 1991 or 1992)'' for 
``45 cents''.
    1988--Subsecs. (f), (g). Pub. L. 100-647 added subsec. (f) and 
redesignated former subsec. (f) as (g).
    1986--Subsecs. (e), (f). Pub. L. 99-272 added subsec. (e) and 
redesignated former subsec. (e) as (f).
    1982--Subsec. (b)(1). Pub. L. 97-248, Sec. 283(a)(1), substituted 
``$8'' for ``$4''.
    Subsec. (b)(2). Pub. L. 97-248, Sec. 283(a)(2), substituted 
``$16.80'' for ``$8.40''.
    1976--Subsec. (a). Pub. L. 94-455, Sec. 2128(a), substituted 
provisions setting a tax of 8\1/2\ percent of the wholesale price, but 
not more than $20 per thousand, on cigars weighing more than 3 pounds 
per thousand for provisions setting the tax according to a graduated 
table running from $2.50 per thousand for large cigars if removed to 
retail at not more than 2\1/2\ cents each to $20 per thousand if removed 
to retail at more than 20 cents each, and struck out provisions that, in 
determining the retail price, for tax purposes, regard be had to the 
ordinary retail price of a single cigar in its principal market, 
exclusive of any State or local taxes imposed on cigars as a commodity, 
and that, for purposes of that determination, the amount of State or 
local tax excluded from the retail price be the actual tax imposed, 
except that, if the combined taxes resulted in a numerical figure ending 
in a fraction of a cent, the amount so excluded would be rounded to the 
next highest full cent unless such rounding would result in a tax lower 
than the tax which would be imposed in the absence of State or local 
tax.
    Subsec. (e). Pub. L. 94-455, Sec. 1905(a)(24), inserted ``, unless 
such import duties are imposed in lieu of internal revenue tax'' after 
``such articles''.
    1968--Subsec. (a). Pub. L. 90-240 provided that the amount of State 
and local tax excluded from the retail price be the actual tax imposed, 
except that, if the combined taxes result in a numerical figure ending 
in a fraction of a cent, the amount so excluded be rounded to the next 
highest full cent unless such rounding would result in a tax lower than 
the tax which would be imposed in the absence of State and local taxes.
    1965--Pub. L. 89-44, Sec. 502(a), struck out subsec. (a) relating to 
tobacco and redesignated subsecs. (b) to (f) as subsecs. (a) to (e), 
respectively.
    Subsec. (b)(1). Pub. L. 89-44, Sec. 501(f), removed the July 1, 
1965, time limit for the $4 per thousand rate as well as the provision 
for imposition of a $3.50 rate on and after July 1, 1965.
    1964--Subsec. (c)(1). Pub. L. 88-348 substituted ``July 1, 1965'' 
for ``July 1, 1964'' in two places.
    1963--Subsec. (c)(1). Pub. L. 88-52 substituted ``July 1, 1964'' for 
``July 1, 1963'' in two places.
    1962--Subsec. (c)(1). Pub. L. 87-508 substituted ``July 1, 1963'' 
for ``July 1, 1962'' in two places.
    1961--Subsec. (c)(1). Pub. L. 87-72 substituted ``July 1, 1962'' for 
``July 1, 1961'' in two places.
    1960--Subsec. (b). Pub. L. 86-779 substituted ``imposed on cigars as 
a commodity'' for ``imposed on the retail sales of cigars''.
    Subsec. (c)(1). Pub. L. 86-564 substituted ``July 1, 1961'' for 
``July 1, 1960'' in two places.
    1959--Subsec. (c)(1). Pub. L. 86-75 substituted ``July 1, 1960'' for 
``July 1, 1959'' in two places.
    1958--Subsec. (b). Pub. L. 85-859 provided that in determining the 
retail price, for tax purposes, regard shall be had to the ordinary 
retail price of a single cigar in its principal market, exclusive of any 
State or local taxes imposed on the retail sale of cigars, and required 
cigars not exempt from tax under this chapter which are removed but not 
intended for sale to be taxed at the same rate as similar cigars removed 
for sale.
    Subsec. (c)(1). Pub. L. 85-475 substituted ``July 1, 1959'' for 
``July 1, 1958'' in two places.
    Subsec. (d). Pub. L. 85-859 substituted ``On each book or set of 
cigarette papers containing more than 25 papers, manufactured in or 
imported into the United States, there shall be imposed'' for ``On 
cigarette papers, manufactured in or imported into the United States, 
there shall be imposed, on each package, book, or set containing more 
than 25 papers''.
    Subsec. (f). Pub. L. 85-859 substituted ``imposed by this section on 
tobacco products and cigarette papers and tubes imported into the United 
States'' for ``imposed on articles by this section''.
    1957--Subsec. (c)(1). Pub. L. 85-12 substituted ``July 1, 1958'' for 
``April 1, 1957'' in two places.
    1956--Subsec. (c)(1). Act Mar. 29, 1956, substituted ``April 1, 
1957'' for ``April 1, 1956'' in two places.
    1955--Subsec. (c)(1). Act Mar. 30, 1955, substituted ``April 1, 
1956'' for ``April 1, 1955'' in two places.


                    Effective Date of 1997 Amendment

    Section 9302(i) of Pub. L. 105-33 provided that:
    ``(1) In general.--The amendments made by this section [enacting 
section 5754 of this title and amending this section and sections 5702, 
5704, 5712, 5713, 5721, 5722, and 5761 to 5763 of this title] shall 
apply to articles removed (as defined in section 5702(k) [now section 
5702(j)] of the Internal Revenue Code of 1986, as amended by this 
section) after December 31, 1999.
    ``(2) Transitional rule.--Any person who--
        ``(A) on the date of the enactment of this Act [Aug. 5, 1997] is 
    engaged in business as a manufacturer of roll-your-own tobacco or as 
    an importer of tobacco products or cigarette papers and tubes, and
        ``(B) before January 1, 2000, submits an application under 
    subchapter B of chapter 52 of such Code to engage in such business,
may, notwithstanding such subchapter B, continue to engage in such 
business pending final action on such application. Pending such final 
action, all provisions of such chapter 52 shall apply to such applicant 
in the same manner and to the same extent as if such applicant were a 
holder of a permit under such chapter 52 to engage in such business.''


                    Effective Date of 1990 Amendment

    Section 11202(h) of Pub. L. 101-508 provided that: ``The amendments 
made by this section [amending this section and section 5702 of this 
title] shall apply with respect to articles removed after December 31, 
1990.''


                    Effective Date of 1988 Amendment

    Section 5061(d) of Pub. L. 100-647 provided that:
    ``(1) In general.--The amendments made by this section [amending 
this section and section 5702 of this title] shall apply to pipe tobacco 
removed (within the meaning of section 5702(k) [now section 5702(j)] of 
the 1986 Code) after December 31, 1988.
    ``(2) Transitional rule.--Any person who--
        ``(A) on the date of the enactment of this Act [Nov. 10, 1988], 
    is engaged in business as a manufacturer of pipe tobacco, and
        ``(B) before January 1, 1989, submits an application under 
    subchapter B of chapter 52 of the 1986 Code to engage in such 
    business,
may, notwithstanding such subchapter B, continue to engage in such 
business pending final action on such application. Pending such final 
action, all provisions of chapter 52 of the 1986 Code shall apply to 
such applicant in the same manner and to the same extent as if such 
applicant were a holder of a permit to manufacture pipe tobacco under 
such chapter 52.''


                    Effective Date of 1986 Amendment

    Section 13202(c) of Pub. L. 99-272, as amended by Pub. L. 99-514, 
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
    ``(1) In general.--The amendments made by this section [amending 
this section and section 5702 of this title] shall apply to smokeless 
tobacco removed after June 30, 1986.
    ``(2) Transitional rule.--Any person who--
        ``(A) on the date of the enactment of this Act [Apr. 7, 1986], 
    is engaged in business as a manufacturer of smokeless tobacco, and
        ``(B) before July 1, 1986, submits an application under 
    subchapter B of chapter 52 of the Internal Revenue Code of 1986 
    [formerly I.R.C. 1954] to engage in such business,
may, notwithstanding such subchapter B, continue to engage in such 
business pending final action on such application. Pending such final 
action, all provisions of chapter 52 of such Code shall apply to such 
applicant in the same manner and to the same extent as if such applicant 
were a holder of a permit to manufacture smokless [sic] tobacco under 
such chapter 52.''


                    Effective Date of 1982 Amendment

    Section 283(c) of Pub. L. 97-248, as amended by Pub. L. 99-107, 
Sec. 2, Sept. 30, 1985, 99 Stat. 479; Pub. L. 99-155, Sec. 2(a), Nov. 
14, 1985, 99 Stat. 814; Pub. L. 99-181, Sec. 1, Dec. 13, 1985, 99 Stat. 
1172; Pub. L. 99-189, Sec. 1, Dec. 18, 1985, 99 Stat. 1184; Pub. L. 99-
201, Sec. 1, Dec. 23, 1985, 99 Stat. 1665; Pub. L. 99-272, title XIII, 
Sec. 13201(a), Apr. 7, 1986, 100 Stat. 311, provided that: ``The 
amendment made by subsection (a) [amending this section] shall apply 
with respect to cigarettes removed after December 31, 1982.''
    [Pub. L. 99-272, title XIII, Sec. 13201(b), Apr. 7, 1986, 100 Stat. 
311, provided that: ``For purposes of all Federal and State laws, the 
amendment made by subsection (a) [amending section 283(c) of Pub. L. 97-
248, set out above] shall be treated as having taken effect on March 14, 
1986.'']


                    Effective Date of 1976 Amendment

    Amendment by section 1905(a)(24) of Pub. L. 94-455 effective on 
first day of first month which begins more than 90 days after Oct. 4, 
1976, see section 1905(d) of Pub. L. 94-455, set out as a note under 
section 5005 of this title.
    Section 2128(e) of Pub. L. 94-455 provided that: ``The amendments 
made by this section [amending this section and sections 5702 and 5741 
of this title] shall take effect on the first month which begins more 
than 90 days after the date of the enactment of this Act [Oct. 4, 
1976].''


                    Effective Date of 1968 Amendment

    Section 4(b) of Pub. L. 90-240 provided that: ``The amendment made 
by subsection (a) [amending this section] shall apply to the removal of 
cigars on or after the first day of the first calendar quarter which 
begins more than 30 days after the date of the enactment of this Act 
[Jan. 2, 1968].''


                    Effective Date of 1965 Amendment

    Section 701(d) of Pub. L. 89-44 provided that: ``The amendments made 
by section 501 [repealing sections 5063 and 5707 of this title and 
provisions formerly set out below and amending this section and sections 
5001, 5022, 5041, and 5051 of this title] shall apply on and after July 
1, 1965. The amendments made by section 502 [striking out subchapter D 
of chapter 52 of this title and redesignating subchapters E, F, and G as 
subchapters D, E, and F respectively, and amending this section and 
sections 5702, 5704, 5711, 5741, 5753, 5762, and 5763 of this title] 
shall apply on and after January 1, 1966.''


                    Effective Date of 1960 Amendment

    Section 2 of Pub. L. 86-779 provided that: ``The amendment made by 
the first section of this Act [amending this section] shall apply with 
respect to cigars removed on or after the ninth day of the first month 
which begins after the date of the enactment of this Act [Sept. 14, 
1960].''


                    Effective Date of 1958 Amendment

    Amendment by Pub. L. 85-859 effective Sept. 3, 1958, see section 
210(a)(1) of Pub. L. 85-859, set out as a note under section 5001 of 
this title.


         Coordination With Tobacco Industry Settlement Agreement

    Section 9302(k) of Pub. L. 105-33, as added by Pub. L. 105-34, title 
XVI, Sec. 1604(f)(3), Aug. 5, 1997, 111 Stat. 1099, which provided that 
the increase in excise taxes collected as a result of the amendments 
made by subsections (a), (e), and (g) of section 9302 of Pub. L. 105-33 
(amending this section and section 5702 of this title) were to be 
credited against the total payments made by parties pursuant to Federal 
legislation implementing the tobacco industry settlement agreement of 
June 20, 1997, was repealed by Pub. L. 105-78, title V, Sec. 519, Nov. 
13, 1997, 111 Stat. 1519.


                           Floor Stocks Taxes

    Section 9302(j) of Pub. L. 105-33, as amended by Pub. L. 106-554, 
Sec. 1(a)(7) [title III, Sec. 315(a)(1)], Dec. 21, 2000, 114 Stat. 2763, 
2763A-643, provided that:
    ``(1) Imposition of tax.--On cigarettes 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--
        ``(A) 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
        ``(B) the prior tax (if any) imposed under section 5701 of such 
    Code on such article.
    ``(2) Authority to exempt cigarettes held in vending machines.--To 
the extent provided in regulations prescribed by the Secretary, no tax 
shall be imposed by paragraph (1) on cigarettes held for retail sale on 
any tax increase date, by any person in any vending machine. If the 
Secretary provides such a benefit with respect to any person, the 
Secretary may reduce the $500 amount in paragraph (3) with respect to 
such person.
    ``(3) Credit against tax.--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 
any tax increase date, for which such person is liable.
    ``(4) Liability for tax and method of payment.--
        ``(A) Liability for tax.--A person holding cigarettes on any tax 
    increase date, to which any tax imposed by paragraph (1) applies 
    shall be liable for such tax.
        ``(B) Method of payment.--The tax imposed by paragraph (1) shall 
    be paid in such manner as the Secretary shall prescribe by 
    regulations.
        ``(C) Time for payment.--The tax imposed by paragraph (1) shall 
    be paid on or before April 1 following any tax increase date.
    ``(5) Articles in foreign trade zones.--Notwithstanding the Act of 
June 18, 1934 (48 Stat. 998, 19 U.S.C. 81a) and 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--
        ``(A) 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 [19 U.S.C. 81c(a)], or
        ``(B) such article is held on such date under the supervision of 
    a customs officer pursuant to the 2d proviso of such section 3(a).
    ``(6) Definitions.--For purposes of this subsection--
        ``(A) In general.--Terms used in this subsection which are also 
    used in section 5702 of the Internal Revenue Code of 1986 shall have 
    the respective meanings such terms have in such section, as amended 
    by this Act.
        ``(B) Tax increase date.--The term `tax increase date' means 
    January 1, 2000, and January 1, 2002.
        ``(C) Secretary.--The term `Secretary' means the Secretary of 
    the Treasury or the Secretary's delegate.
    ``(7) Controlled groups.--Rules similar to the rules of section 
5061(e)(3) of such Code shall apply for purposes of this subsection.
    ``(8) Other laws applicable.--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.''
    Section 11202(i) of Pub. L. 101-508 provided that:
    ``(1) Imposition of tax.--On cigarettes 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 shall be imposed the 
following taxes:
        ``(A) Small cigarettes.--On cigarettes, weighing not more than 3 
    pounds per thousand, $2 per thousand.
        ``(B) Large cigarettes.--On cigarettes weighing more than 3 
    pounds per thousand, $4.20 per thousand; except that, if more than 
    6\1/2\ inches in length, they shall be taxable at the rate 
    prescribed for cigarettes weighing not more than 3 pounds per 
    thousand, counting each 2\3/4\ inches, or fraction thereof, of the 
    length of each as one cigarette.
    ``(2) Exception for certain amounts of cigarettes.--
        ``(A) In general.--No tax shall be imposed by paragraph (1) on 
    cigarettes held on any tax-increase date by any person if--
            ``(i) the aggregate number of cigarettes held by such person 
        on such date does not exceed 30,000, and
            ``(ii) such person submits to the Secretary (at the time and 
        in the manner required by the Secretary) such information as the 
        Secretary shall require for purposes of this subparagraph.
    For purposes of this subparagraph, in the case of cigarettes 
    measuring more than 6\1/2\ inches in length, each 2\3/4\ inches (or 
    fraction thereof) of the length of each shall be counted as one 
    cigarette.
        ``(B) Authority to exempt cigarettes held in vending machines.--
    To the extent provided in regulations prescribed by the Secretary, 
    no tax shall be imposed by paragraph (1) on cigarettes held for 
    retail sale on any tax-increase date by any person in any vending 
    machine. If the Secretary provides such a benefit with respect to 
    any person, the Secretary may reduce the 30,000 amount in 
    subparagraph (A) and the $60 amount in paragraph (3) with respect to 
    such person.
    ``(3) Credit against tax.--Each person shall be allowed as a credit 
against the taxes imposed by paragraph (1) an amount equal to $60. Such 
credit shall not exceed the amount of taxes imposed by paragraph (1) for 
which such person is liable.
    ``(4) Liability for tax and method of payment.--
        ``(A) Liability for tax.--A person holding cigarettes on any 
    tax-increase date to which any tax imposed by paragraph (1) applies 
    shall be liable for such tax.
        ``(B) Method of payment.--The tax imposed by paragraph (1) shall 
    be paid in such manner as the Secretary shall prescribe by 
    regulations.
        ``(C) Time for payment.--The tax imposed by paragraph (1) shall 
    be paid on or before the 1st June 30 following the tax-increase 
    date.
    ``(5) Definitions.--For purposes of this subsection--
        ``(A) Tax-increase date.--The term `tax-increase date' means 
    January 1, 1991, and January 1, 1993.
        ``(B) Other definitions.--Terms used in this subsection which 
    are also used in section 5702 of the Internal Revenue Code of 1986 
    shall have the respective meanings such terms have in such section.
        ``(C) Secretary.--The term `Secretary' means the Secretary of 
    the Treasury or his delegate.
    ``(6) Controlled groups.--Rules similar to the rules of section 
11201(e)(6) [Pub. L. 101-508, set out in a note under section 5001 of 
this title] shall apply for purposes of this subsection.
    ``(7) Other laws applicable.--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.''
    Section 5061(e) of Pub. L. 100-647 provided that:
    ``(1) Imposition of tax.--On pipe tobacco manufactured in or 
imported into the United States which is removed before January 1, 1989, 
and held on such date for sale by any person, there is hereby imposed a 
tax of 45 cents per pound (and a proportionate tax at the like rate on 
all fractional parts of a pound).
    ``(2) Liability for tax and method of payment.--
        ``(A) Liability for tax.--A person holding pipe tobacco on 
    January 1, 1989, to which the tax imposed by paragraph (1) applies 
    shall be liable for such tax.
        ``(B) Method of payment.--The tax imposed by paragraph (1) shall 
    be treated as a tax imposed by section 5701 of the 1986 Code and 
    shall be due and payable on February 14, 1989, in the same manner as 
    the tax imposed by such section is payable with respect to pipe 
    tobacco removed on or after January 1, 1989.
        ``(C) Treatment of pipe tobacco in foreign trade zones.--
    Notwithstanding the Act of June 18, 1934 (48 Stat. 998, 19 U.S.C. 
    81a) or any other provision of law, pipe tobacco which is located in 
    a foreign trade zone on January 1, 1989, shall be subject to the tax 
    imposed by paragraph (1) and shall be treated for purposes of this 
    subsection as held on such date for sale if--
            ``(i) internal revenue taxes have been determined, or 
        customs duties liquidated, with respect to such pipe tobacco 
        before such date pursuant to a request made under the first 
        proviso of section 3(a) of such Act [19 U.S.C. 81c(a)], or
            ``(ii) such pipe tobacco is held on such date under the 
        supervision of a customs officer pursuant to the second proviso 
        of such section 3(a).
        ``Under regulations prescribed by the Secretary of the Treasury 
    or his delegate, provisions similar to sections 5706 and 5708 of the 
    1986 Code shall apply to pipe tobacco with respect to which tax is 
    imposed by paragraph (1) by reason of this subparagraph.
    ``(3) Pipe tobacco.--For purposes of this subsection, the term `pipe 
tobacco' shall have the meaning given to such term by subsection (o) 
[now subsection (n)] of section 5702 of the 1986 Code.
    ``(4) Exception where liability does not exceed $1,000.--No tax 
shall be imposed by paragraph (1) on any person if the tax which would 
but for this paragraph be imposed on such person does not exceed $1,000. 
For purposes of the preceding sentence, all persons who are treated as a 
single taxpayer under section 5061(e)(3) of the 1986 Code shall be 
treated as 1 person.''
    Section 283(b) of Pub. L. 97-248, as amended by Pub. L. 97-448, 
title III, Sec. 306(a)(14), Jan. 12, 1983, 96 Stat. 2405; Pub. L. 99-
514, Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that:
    ``(1) Imposition of tax.--On cigarettes manufactured in or imported 
into the United States which are removed before January 1, 1983, and 
held on such date for sale by any person, there shall be imposed the 
following taxes:
        ``(A) Small cigarettes.--On cigarettes, weighing not more than 3 
    pounds per thousand, $4 per thousand;
        ``(B) Large cigarettes.--On cigarettes, weighing more than 3 
    pounds per thousand, $8.40 per thousand; except that, if more than 
    6\1/2\ inches in length, they shall be taxable at the rate 
    prescribed for cigarettes weighing not more than 3 pounds per 
    thousand, counting each 2\3/4\ inches, or fraction thereof, of the 
    length of each as one cigarette.
    ``(2) Liability for tax and method of payment.--
        ``(A) Liability for tax.--A person holding cigarettes on January 
    1, 1983, to which any tax imposed by paragraph (1) applies shall be 
    liable for such tax.
        ``(B) Method of payment.--The tax imposed by paragraph (1) shall 
    be treated as a tax imposed under section 5701 and shall be due and 
    payable on February 17, 1983 in the same manner as the tax imposed 
    under such section is payable with respect to cigarettes removed on 
    January 1, 1983.
    ``(3) Cigarette.--For purposes of this subsection, the term 
`cigarette' shall have the meaning given to such term by subsection (b) 
of section 5702 of the Internal Revenue Code of 1986 [formerly I.R.C. 
1954].
    ``(4) Exception for retailers.--The taxes imposed by paragraph (1) 
shall not apply to cigarettes in retail stocks held on January 1, 1983, 
at the place where intended to be sold at retail.''

                  Section Referred to in Other Sections

    This section is referred to in sections 5702, 5703 of this title.
