INCREASE IN EXCISE TAXES ON TOBACCO PRODUCTS.

SEC. 11202. INCREASE IN EXCISE TAXES ON TOBACCO PRODUCTS. (a) Cigars.— Subsection (a) of section 5701 is amended— (1) by striking “75 cents per thousand” in paragraph (1) and inserting “$1,125 cents per thousand (93.75 cents per thousand on cigars removed during 1991 or 1992)”, and (2) by striking “equal to” and all that follows in paragraph (2) and inserting “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.” (b) Cigarettes.— Subsection (b) of section 5701 is amended— (1) by striking “$8 per thousand” in paragraph (1) and inserting “$12 per thousand ($10 per thousand on cigarettes removed during 1991 or 1992)”, and (2) by striking “$16.80 per thousand” in paragraph (2) and inserting “$25.20 per thousand ($21 per thousand on cigarettes removed during 1991 or 1992)”. (c) Cigarette Papers.— Subsection (c) of section 5701 is amended by striking “½ cent” and inserting “0.75 cent (0.625 cent on cigarette papers removed during 1991 or 1992)”. (d) Cigarette Tubes.— Subsection (d) of section 5701 is amended by striking “1 cent” and inserting “1.5 cents (1.25 cents on cigarette tubes removed during 1991 or 1992)”. (e) Smokeless Tobacco.— Subsection (e) of section 5701 is amended— (1) by striking “24 cents” in paragraph (1) and inserting “36 cents (30 cents on snuff removed during 1991 or 1992)”, and (2) by striking “8 cents” in paragraph (2) and inserting “12 cents (10 cents on chewing tobacco removed during 1991 or 1992)”. (f) Pipe Tobacco.— Subsection (f) of section 5701 is amended by striking “45 cents” and inserting “67.5 cents (56.25 cents on pipe tobacco removed during 1991 or 1992)”. (g) Determination of Price.— Subsection (m) of section 5702 is amended to read as follows: 104 STAT. 1388–420 “(m) Determination of Price on Cigars.— In determining price for purposes of section 5701(a)(2)— “(1) there shall be included any charge incident to placing the article in condition ready for use, “(2) there shall be excluded— “(A) the amount of the tax imposed by this chapter or section 7652, and “(B) if stated as a separate charge, the amount of any retail sales tax imposed by any State or political subdivision thereof or the District of Columbia, whether the liability for such tax is imposed on the vendor or vendee, and “(3) rules similar to the rules of section 4216(b) shall apply.” (h) Effective Date.— The amendments made by this section shall apply with respect to articles removed after December 31, 1990. (i) Floor Stocks Taxes on Cigarettes.— (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 6½ inches in length, they shall be taxable at the rate prescribed for cigarettes weighing not more than 3 pounds per thousand, counting each 2% 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 Vs inches in length, each 2% 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.— 104 STAT. 1388–421 (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) 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.