27 C.F.R. Subpart D—Taxes
Title 27 - Alcohol, Tobacco Products and Firearms
Pipe tobacco and roll-your-own tobacco are taxed at the following rates under 26 U.S.C. 5701(f) and (g), respectively: [T.D. ATF–420, 64 FR 71942, Dec. 22, 1999] (a) Cigars are taxed at the following rates under 26 U.S.C. 5701(a): (b) See §41.39 of this part for rules concerning determination of sale price of large cigars. (c) Cigars not exempt from tax under 26 U.S.C. chapter 52 and the provisions of this part which are removed but not intended for sale shall be taxed at the same rate as similar cigars removed for sale. [T.D. ATF–420, 64 FR 71942, Dec. 22, 1999. Redesignated and amended by T.D. TTB–16, 69 FR 52424, 52425, Aug. 26, 2004] Cigarettes are taxed at the following rates under 26 U.S.C. 5701(b): [T.D. ATF–420, 64 FR 71943, Dec. 22, 1999] Smokeless tobacco products are taxed at the following rates under 26 U.S.C. 5701(e): [T.D. ATF–420, 64 FR 71943, Dec. 22, 1999] Cigarette papers are taxed at the following rates under 26 U.S.C. 5701(c): [T.D. ATF–420, 64 FR 71943, Dec. 22, 1999] Cigarette tubes are taxed at the following rates under 26 U.S.C. 5701(d): [T.D. ATF–420, 64 FR 71943, Dec. 22, 1999] For internal revenue tax purposes, small cigarettes are designated Class A and large cigarettes are designated Class B. (72 Stat. 1414; 26 U.S.C. 5701) [26 FR 8191, Aug. 31, 1961. Redesignated at 40 FR 16835, Apr. 15, 1975] The tax imposed on large cigars is computed based on the sale price (the price for which the large cigars are sold by the importer or manufacturer). In addition to money, goods or services exchanged for cigars may be considered as part of the sale price. See §40.22(b) of this chapter for information on determining the sale price in special cases. [T.D. ATF–420, 64 FR 71944, Dec. 22, 1999; T.D. ATF–422, 64 FR 71948, Dec. 22, 1999; T.D. ATF–422a, 65 FR 15058, Mar. 31, 2000; T.D. ATF–460, 66 FR 39093, July 27, 2001] The importer of tobacco products or cigarette papers and tubes will be liable for the internal revenue taxes imposed thereon by 26 U.S.C. 5701 or 7652: Provided, That tobacco products or cigarette papers or tubes (other than those previously exported and returned) imported or brought into the United States, may be released from customs custody without payment of tax, for delivery to the proprietor of an export warehouse, to a manufacturer of tobacco products, or to a manufacturer of cigarette papers or tubes (except for tobacco products), if such articles are not put up in packages (see §41.11). Under these circumstances the transferee will become liable for the internal revenue tax on such articles upon release from customs custody and the importer will thereupon be relieved of the liability for such tax. If the transferee is also the importer, then the importer will not be relieved of the liability for such tax. (Aug. 16, 1954, Chapter 736, 68A Stat. 907, as amended (26 U.S.C. 7652); sec. 201, Pub. L. 85–859, Stat. 1417, as amended (26 U.S.C. 5703)) [T.D. ATF–422, 64 FR 71948, Dec. 22, 1999. Redesignated and amended by T.D. TTB–16, 69 FR 52424, 52425, Aug. 26, 2004] Tobacco products and cigarette papers and tubes, imported or brought into the United States, on which internal revenue taxes are due and payable, must not be released from customs custody until such taxes have been determined and paid. (68A Stat. 907, as amended, 72 Stat. 1417; 26 U.S.C. 7652, 5703) [T.D. ATF–422, 64 FR 71949, Dec. 22, 1999] The Harmonized Tariff Schedule of the United States (19 U.S.C. 1202) and Customs Regulations, 19 CFR, chapter I, provide for certain exemptions from internal revenue taxes with respect to tobacco products and cigarette papers and tubes imported into the United States. These exemptions include, but are not limited to, certain importations in passengers' baggage, for use of crew members, and by foreign officials. Those persons importing tobacco products and cigarette papers or tubes as described in this section are not required to obtain a permit. [T.D. 6871, 31 FR 41, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 15, 1975, and amended by T.D. ATF–232, 51 FR 28084, Aug. 5, 1986; T.D. ATF–243, 52 FR 43194, Dec. 1, 1986; T.D. ATF–284, 54 FR 12190, Mar. 24, 1989; T.D. ATF–422, 64 FR 71949, Dec. 22, 1999] Whenever any person required by law to pay internal revenue tax on tobacco products or cigarette papers or tubes fails to pay such tax, the tax shall be ascertained and assessed against such person, subject to the limitations prescribed in 26 U.S.C. 6501. The tax so assessed shall be in addition to the penalties imposed by law for failure to pay such tax when required. Except in cases where delay may jeopardize collection of the tax, or where the amount is nominal or the result of an evident mathematical error, no such assessment shall be made until and after notice has been afforded such person to show cause against assessment. The person will be allowed 45 days from the date of such notice to show cause, in writing, against such assessment. (72 Stat. 1417; 26 U.S.C. 5703) [T.D. 6871, 31 FR 41, Jan. 4, 1966. Redesignated at 40 FR 16835, Apr. 15, 1975, and amended by T.D. ATF–48, 44 FR 55855, Sept. 28, 1979; T.D. ATF–232, 51 FR 28084, Aug. 5, 1986; T.D. ATF–243, 51 FR 43194, Dec. 1, 1986] Internal revenue taxes on tobacco products and cigarette papers and tubes, imported or brought into the United States, which are to be paid to the Port Director of Customs or other authorized customs employee, in accordance with this part, must be collected, accounted for, and deposited as internal revenue collections by the Port Director of Customs, in accordance with customs procedures and regulations. [T.D. ATF–422, 64 FR 71949, Dec. 22, 1999] (a) Each importer who was liable, during a calendar year, for a gross amount equal to or exceeding five million dollars in taxes on cigars, cigarettes, cigarette papers, and cigarette tubes combining tax liabilities incurred under this part and part 40 of this chapter, shall use a commercial bank in making payment by electronic fund transfer (EFT) of such taxes during the succeeding calendar year. Payment of such taxes by cash, check, or money order is not authorized for an importer who is required, by this section, to make remittances by EFT. For purposes of this section, the dollar amount of tax liability is defined as the gross tax liability on all taxable withdrawals and importations (including similar products brought into the United States from Puerto Rico or the Virgin Islands) during the calendar year, without regard to any drawbacks, credits, or refunds, for all premises from which such activities are conducted by the taxpayer. (b) For the purposes of this section, a taxpayer includes a controlled group of corporations, as defined in 26 U.S.C. 1563, and implementing regulations in 26 CFR 1.1563–1 through 1.1563–4, except that the words “at least 80 percent” shall be replaced by the words “more than 50 percent” in each place it appears in subsection (a) of 26 U.S.C. 1563, as well as in the implementing regulations. Also, the rules for a “controlled group of corporations” apply in a similar fashion to groups which include partnerships and/or sole proprietorships. If one entity maintains more than 50% control over a group consisting of corporations and one, or more, partnerships and/or sole proprietorships, all of the members of the controlled group are one taxpayer for the purpose of determining who is required to make remittances by EFT. (c) For the purposes of this section, (1) electronic fund transfer or EFT means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, or computer of magnetic tape, so as to order, instruct, or authorize a financial institution to either debit or credit an account, in accordance with procedures established by the U.S. Customs Service, and (2) electronic fund transfer or EFT does not have the meaning defined in §41.11 for use elswhere in this part. (d) An importer who is required by this section to make remittances by EFT, shall make the EFT remittance in accordance with the requirements of the U.S. Customs Service. (Act of August 16, 1954, 68A Stat. 775, as amended (26 U.S.C. 6302); Sec. 202, Pub. L. 85–859, 72 Stat. 1417, as amended (26 U.S.C. 5703)) [T.D. ATF–245, 52 FR 534, Jan. 7, 1987, as amended by T.D. ATF–384, 61 FR 54095, Oct. 17, 1996. Redesignated and amended by T.D. TTB–16, 69 FR 52424, 52425, Aug. 26, 2004]
Title 27: Alcohol, Tobacco and Firearms
PART 41—IMPORTATION OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES
Subpart D—Taxes
Tax Rates
§ 41.30 Pipe tobacco and roll-your-own tobacco.
---------------------------------------------------------------------------------------------------------------- Tax rate per pound \1\ for removals during the years Product ------------------------------------------------------------------------- 1993 to 1999 2000 and 2001 2002 and after----------------------------------------------------------------------------------------------------------------Pipe tobacco.......................... $0.675 $0.9567 $1.0969Roll-your-own tobacco................. No tax 0.9567 1.0969----------------------------------------------------------------------------------------------------------------\1\ Prorate tax for fractions of a pound.
§ 41.31 Cigar tax rates.
---------------------------------------------------------------------------------------------------------------- Tax rate for removals during the years Product ------------------------------------------------------------------------- 1993 to 1999 2000 and 2001 2002 and after----------------------------------------------------------------------------------------------------------------Small cigars (per thousand)........... $1.125 $1.594 $1.828Large cigars \1\ percentage of sale price.......... 12.75% 18.063% 20.719% but not to exceed per thousand.... $30 $42.50 $48.75----------------------------------------------------------------------------------------------------------------\1\ For large cigars, the percentage tax rate applies when the sale price is $235.294 per thousand or less, and the flat tax rate applies when the sale price is more than $235.294.
§ 41.32 Cigarette tax rates.
---------------------------------------------------------------------------------------------------------------- Tax rate per thousand for removals during the years Product ------------------------------------------------------------------------- 1993 to 1999 2000 and 2001 2002 and after----------------------------------------------------------------------------------------------------------------Small cigarettes...................... $12 $17 $19.50Large cigarettes up to 6\1/2\[inch] 25.20 35.70 40.95 long.Large cigarettes over 6\1/2\[inch] Use tax rates for small long. cigarettes, but count each 2\3/4\ inches or fraction thereof of the length of each as one cigarette.----------------------------------------------------------------------------------------------------------------
§ 41.33 Smokeless tobacco tax rates.
------------------------------------------------------------------------ Tax rate per pound \1\ for removals during the years Product -------------------------------------- 1993 to 2000 or 2002 and 1999 2001 after------------------------------------------------------------------------Snuff............................ $0.36 $0.51 $0.585Chewing tobacco.................. $0.12 $0.17 $0.195------------------------------------------------------------------------\1\ Prorate tax for fractions of a pound.
§ 41.34 Cigarette papers.
------------------------------------------------------------------------ Tax rate for each 50 papers \1\ for removals during the years Product -------------------------------------- 1993 to 2000 or 2002 and 1999 \2\ 2001 after------------------------------------------------------------------------Cigarette papers up to 6\1/ $0.0075 $0.0106 $0.0122 2\[inch] long...................Cigarette papers over 6\1/ Use rates 2\[inch] long................... above, but count each 2\3/4\ inches, or fraction thereof, of the length of each as one cigarette paper.------------------------------------------------------------------------\1\ Tax rate for less than 50 papers is the same. The tax is not prorated.\2\ Before January 1, 2000, books or sets containing 25 papers or less were not taxable. On and after January 1, 2000, all cigarette papers are taxable.
§ 41.35 Cigarette tubes.
------------------------------------------------------------------------ Tax rate for each 50 tubes \1\ for removals during the years Product -------------------------------------- 1993 to 2000 and 2002 and 1999 2001 after------------------------------------------------------------------------Cigarette tubes up to 6\1/ $0.015 $0.0213 $0.0244 2\[inch] long...................Cigarette tubes over 6\1/2\[inch] Use rates long............................ above, but count each 2\3/4\ inches, or fraction thereof, of the length of each as one cigarette tube.------------------------------------------------------------------------\1\ Tax rate for less than 50 tubes is the same. The tax is not prorated.
Classification of Large Cigars and Cigarettes
§ 41.37 [Reserved]
§ 41.38 Cigarettes.
§ 41.39 Determination of sale price of large cigars.
Liability for and Payment of Taxes
§ 41.40 Persons liable for tax.
§ 41.41 Determination and payment of tax.
Exemptions From Taxes and Permits
§ 41.50 Exemptions.
Assessment of Taxes
§ 41.60 Assessment.
Customs' Collection of Taxes
§ 41.62 Customs' collection of internal revenue taxes on tobacco products and cigarette papers and tubes, imported or brought into the United States.
§ 41.63 Payment of tax by electronic fund transfer.
