,,ii #aafth ,,congress #ast ,session ,s4 #beag ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,september #ai1 #bjai,mr4 ,durbin 7for himself1 ,mr4 ,brown1 ,mr4 ,markey1 ,mr4 ,blumenthal1 ,mr4 ,reed1 ,ms4 ,hirono1 ,mr4 ,wyden1 ,mrs4 ,murray1 and ,mr4 ,merkley7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to provide tax rate parity among all tobacco products1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,tobacco ,tax ,equity ,act of #bjai4 #b4 ,increasing excise taxes on cigarettes and establishing excise tax equity among all tobacco product tax rates 7a7 ,tax parity for ,roll-,your-,own tobacco ,section #egja7;g7 of the ,internal ,revenue ,code of #aihf is amended by striking #bd4gh and inserting #di4ef4 7b7 ,tax parity for pipe tobacco ,section #egja7;f7 of the ,internal ,revenue ,code of #aihf is amended by striking #b4hcaa cents and inserting #di4ef4 7c7 ,tax parity for smokeless tobacco 7#a7 ,section #egja7;e7 of the ,internal ,revenue ,code of #aihf is amended-- 7,a7 in paragraph 7#a71 by striking #a4ea and inserting #bf4hd2 7,b7 in paragraph 7#b71 by striking #ej4cc cents and inserting #aj4gd2 and 7,c7 by adding at the end the following3 7#c7 ,smokeless tobacco sold in discrete single-use units ,on discrete single-use units1 #ajj4ff per thousand4 4 7#b7 ,section #egjb7m7 of such ,code is amended-- 7,a7 in paragraph 7#a71 by striking or chewing tobacco and inserting 1 chewing tobacco1 or discrete single-use unit2 7,b7 in paragraphs 7#b7 and 7#c71 by inserting that is not a discrete single-use unit before the period in each such paragraph2 and 7,c7 by adding at the end the following3 7#d7 ,discrete single-use unit ,the term discrete single-use unit means any product containing tobacco that-- 7,a7 is not intended to be smoked2 and 7,b7 is in the form of a lozenge1 tablet1 pill1 pouch1 dissolvable strip1 or other discrete single-use or single-dose unit4 4 7d7 ,tax parity for small cigars ,paragraph 7#a7 of section #egja7;a7 of the ,internal ,revenue ,code of #aihf is amended by striking #ej4cc and inserting #ajj4ff4 7e7 ,tax parity for large cigars 7#a7 ,in general ,paragraph 7#b7 of section #egja7;a7 of the ,internal ,revenue ,code of #aihf is amended by striking #eb4ge percent and all that follows through the period and inserting the following3 #di4ef per pound and a proportionate tax at the like rate on all fractional parts of a pound but not less than #aj4jff cents per cigar44 7#b7 ,guidance ,the ,secretary of the ,treasury1 or the ,secretary's delegate1 may issue guidance regarding the appropriate method for determining the weight of large cigars for purposes of calculating the applicable tax under section #egja7;a77#b7 of the ,internal ,revenue ,code of #aihf4 7f7 ,tax parity for ,roll-,your-,own tobacco and certain processed tobacco ,subsection 7o7 of section #egjb of the ,internal ,revenue ,code of #aihf is amended by inserting 1 and includes processed tobacco that is removed for delivery or delivered to a person other than a person with a permit provided under section #egac1 but does not include removals of processed tobacco for exportation after wrappers thereof4 7g7 ,clarifying tax rate for other tobacco products 7#a7 ,in general ,section #egja of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new subsection3 7i7 ,other tobacco products ,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 ,secretary4 4 7#b7 ,establishing per use basis ,for purposes of section #egja7;i7 of the ,internal ,revenue ,code of #aihf1 not later than #ab 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 ,administration1 the ,secretary of the ,treasury 7or the ,secretary of the ,treasury's delegate7 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 basis4 7h7 ,clarifying definition of tobacco products 7#a7 ,in general ,subsection 7c7 of section #egjb of the ,internal ,revenue ,code of #aihf is amended to read as follows3 7c7 ,tobacco products ,the term tobacco products means-- 7#a7 cigars1 cigarettes1 smokeless tobacco1 pipe tobacco1 and roll-your-own tobacco1 and 7#b7 any other product subject to tax pursuant to section #egja7;i74 4 7#b7 ,conforming amendments ,subsection 7d7 of section #egjb of such ,code is amended by striking cigars1 cigarettes1 smokeless tobacco1 pipe tobacco1 or roll-your-own tobacco each place it appears and inserting tobacco products4 7i7 ,increasing tax on cigarettes 7#a7 ,small cigarettes ,section #egja7;b77#a7 of such ,code is amended by striking #ej4cc and inserting #ajj4ff4 7#b7 ,large cigarettes ,section #egja7;b77#b7 of such ,code is amended by striking #aje4fi and inserting #baa4ch4 7j7 ,tax rates adjusted for inflation ,section #egja of such ,code1 as amended by subsection 7g71 is amended by adding at the end the following new subsection3 7j7 ,inflation adjustment 7#a7 ,in general ,in the case of any calendar year beginning after #bjai1 the dollar amounts provided under this chapter shall each be increased by an amount equal to-- 7,a7 such dollar amount1 multiplied by 7,b7 the cost-of-living adjustment determined under section #a7;f77#c7 for the calendar year1 determined by substituting #8calendar year #bjah' for #8calendar year #bjaf' in subparagraph 7,a77ii7 thereof4 7#b7 ,rounding ,if any amount as adjusted under paragraph 7#a7 is not a multiple of #j4ja1 such amount shall be rounded to the next highest multiple of #j4ja4 4 7k7 ,floor ,stocks ,taxes 7#a7 ,imposition of tax ,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 person1 there is hereby imposed a tax in an amount equal to the excess of-- 7,a7 the tax which would be imposed under section #egja of the ,internal ,revenue ,code of #aihf on the article if the article had been removed on such date1 over 7,b7 the prior tax 7if any7 imposed under section #egja of such ,code on such article4 7#b7 ,credit against tax ,each person shall be allowed as a credit against the taxes imposed by paragraph 7#a7 an amount equal to #ejj4 ,such credit shall not exceed the amount of taxes imposed by paragraph 7#a7 on such date for which such person is liable4 7#c7 ,liability for tax and method of payment 7,a7 ,liability for tax ,a person holding tobacco products on any tax increase date to which any tax imposed by paragraph 7#a7 applies shall be liable for such tax4 7,b7 ,method of payment ,the tax imposed by paragraph 7#a7 shall be paid in such manner as the ,secretary shall prescribe by regulations4 7,c7 ,time for payment ,the tax imposed by paragraph 7#a7 shall be paid on or before the date that is #abj days after the effective date of the tax rate increase4 7#d7 ,articles in foreign trade zones ,notwithstanding the ,act of ,june #ah1 #aicd 7commonly known as the ,foreign ,trade ,zone ,act1 #dh ,stat4 #iih1 #ai ,u4,s4,c4 #ha;a et seq471 or any other provision of law1 any article which is located in a foreign trade zone on any tax increase date shall be subject to the tax imposed by paragraph 7#a7 if-- 7,a7 internal revenue taxes have been determined1 or customs duties liquidated1 with respect to such article before such date pursuant to a request made under the #ast proviso of section #c7;a7 of such ,act1 or 7,b7 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 #b;d proviso of such section #c7;a74 7#e7 ,definitions ,for purposes of this subsection-- 7,a7 ,in general ,any term used in this subsection which is also used in section #egjb of such ,code shall have the same meaning as such term has in such section4 7,b7 ,tax increase date ,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 7other than subsection 7j7 thereof74 7,c7 ,secretary ,the term ,secretary means the ,secretary of the ,treasury or the ,secretary's delegate4 7#f7 ,controlled groups ,rules similar to the rules of section #ejfa7;e77#c7 of such ,code shall apply for purposes of this subsection4 7#g7 ,other laws applicable ,all provisions of law1 including penalties1 applicable with respect to the taxes imposed by section #egja of such ,code shall1 insofar as applicable and not inconsistent with the provisions of this subsection1 apply to the floor stocks taxes imposed by paragraph 7#a71 to the same extent as if such taxes were imposed by such section #egja4 ,the ,secretary may treat any person who bore the ultimate burden of the tax imposed by paragraph 7#a7 as the person to whom a credit or refund under such provisions may be allowed or made4 7l7 ,effective dates 7#a7 ,in general ,except as provided in paragraphs 7#b7 through 7#d71 the amendments made by this section shall apply to articles removed 7as defined in section #egjb7;j7 of the ,internal ,revenue ,code of #aihf7 after the last day of the month which includes the date of the enactment of this ,act4 7#b7 ,discrete single-use units and processed tobacco ,the amendments made by subsections 7c77#a77;,c71 7c77#b71 and 7f7 shall apply to articles removed 7as defined in section #egjb7;j7 of the ,internal ,revenue ,code of #aihf7 after the date that is #f months after the date of the enactment of this ,act4 7#c7 ,large cigars ,the amendments made by subsection 7e7 shall apply to articles removed after ,december #ca1 #bjai4 7#d7 ,other tobacco products ,the amendments made by subsection 7g77#a7 shall apply to products removed after the last day of the month which includes the date that the ,secretary of the ,treasury 7or the ,secretary of the ,treasury's delegate7 issues final regulations establishing the level of tax for such product4