REPEAL OF TAX ON TOBACCO OTHER THAN CIGARS AND CIGARETTES.

SEC. 502. REPEAL OF TAX ON TOBACCO OTHER THAN CIGARS AND CIGARETTES. (a) Repeal.—Section 5701 (relating to rates of taxes on tobacco, cigars, cigarettes, etc.) is amended by striking out subsection (a) (relating to tobacco) and redesignating subsections (b), (c), (d), (e), and (f) as subsections (a), (b), (c), (d), and (e), respectively. (b) Conforming and Clerical Amendments.— (1) The heading of chapter 52 is amended by striking out “TOBACCO,”. (2) The table of subchapters for chapter 52 is amended— (A) by striking out in the item relating to subchapter B “export warehouse proprietors, and dealers in tobacco materials” and inserting in lieu thereof “and export warehouse proprietors”; (B) by striking out the item relating to subchapter D and redesignating the items relating to subchapters E, F, and G as relating to subchapters D, E, and F, respectively; and (C) by striking out in the item relating to subchapter D79 Stat. 151 (as redesignated by subparagraph (B)) “export warehouse proprietors, and dealers in tobacco materials” and inserting in lieu thereof “and export warehouse proprietors”. (3) Section 5702 (relating to definitions applicable to the taxes on tobacco, cigars, cigarettes, etc.) is amended— (A) by striking out subsections (a), (l), and (m) and redesignating subsections (b), (c), (d), (e), (f), (g), (h), (i), (j), (k), (n), and (o) as subsections (a), (b), (c), (d), (e), (f), (g), (h), (i), (j), (k), and (l), respectively; (B) by striking out “manufactured tobacco, cigars, and”; in subsection (c) (as redesignated) and inserting in lieu thereof “cigars and”; and (C) by striking out subsection (d) (as redesignated) and inserting in lieu thereof the following: “(d) Manufacturer of Tobacco Products.— ‘Manufacturer of tobacco products’ means any person who manufactures cigars or cigarettes, except that such term shall not include— “(1) a person who produces cigars or cigarettes solely for his own personal consumption or use; or “(2) a proprietor of a customs bonded manufacturing warehouse with respect to the operation of such warehouse.” (4) Section 5704 (relating to exemption from tax) is amended— (A) by striking out subsection (c) and redesignating subsections (d) and (e) as (c) and (d), respectively; and (B) by striking out subsection (c) (as redesignated) and inserting in lieu thereof the following: “(c) Tobacco Products and Cigarette Papers and Tubes Released in Bond From Customs Custody.— Tobacco products and cigarette papers and tubes, imported or brought into the United States, may be released from customs custody, without payment of tax, for delivery to a manufacturer of tobacco products or cigarette papers and tubes, in accordance with such regulations and under such bond as the Secretary or his delegate shall prescribe.” (5) The heading of subchapter B of chapter 52 is amended by striking out “Export Warehouse Proprietors, and Dealers in Tobacco Materials” and inserting in lieu thereof “and Export Warehouse Proprietors”. (6) Section 5711(a) (relating to requirement for bond) is amended by striking out “as an export warehouse proprietor, or as a dealer in tobacco materials,” and inserting in lieu thereof “or as an export warehouse proprietor,”. (7) Chapter 52 (relating to cigars, cigarettes, and cigarette papers and tubes) is amended by striking out subchapter D and redesignating subchapters E, F, and G as subchapters D, E, and F, respectively. (8) The heading of subchapter D (as redesignated) is amended by striking out “Export Warehouse Proprietors, and Dealers in Tobacco Materials” and inserting in lieu thereof “and Export Warehouse Proprietors”. (9) Section 5741 (relating to records) is amended by striking out “every export warehouse proprietor, and every dealer in tobacco materials” and inserting in lieu thereof “and every export warehouse proprietor,”. 79 Stat. 152 (10) The table of sections for subchapter E (as redesignated) is amended by striking out in the item relating to section 5753 “cigarette papers and tubes, and tobacco materials” and inserting in lieu thereof “and cigarette papers and tubes”. (11) Section 5753 (relating to disposal of forfeited, condemned, and abandoned tobacco products, cigarette papers and tubes, and tobacco materials) is amended to read as follows: “SEC. 5753. DISPOSAL OF FORFEITED, CONDEMNED, AND ABANDONED TOBACCO PRODUCTS, AND CIGARETTE PAPERS AND TUBES. “If it appears that any forfeited, condemned, or abandoned tobacco products, or cigarette papers and tubes, when offered for sale, will not bring a price equal to the tax due and payable thereon, and the expenses incident to the sale thereof, such articles shall not be sold for consumption in the United States but shall be disposed of in accordance with such regulations as the Secretary or his delegate shall prescribe.” (12) Section 5762 (relating to criminal penalties) is amended— (A) by striking out “as an export warehouse proprietor, or as a dealer in tobacco materials” in subsection (a)(1) and inserting in lieu thereof “or as an export warehouse proprietor,”; and (B) by striking out subsection (a)(2) and inserting in lieu thereof the following: “(2) Failing to furnish information or furnishing false information.—Fails to keep or make any record, return, report, or inventory, or keeps or makes any false or fraudulent record, return, report, or inventory, required by this chapter or regulations thereunder; or”. (13) Section 5763 (relating to forfeitures) is amended— (A) by striking out subsection (b) and inserting in lieu thereof the following: “(b) Personal Property of Qualified Manufacturers, and Export Warehouse Proprietors, Acting With Intent To Defraud.—All tobacco products and cigarette papers and tubes, packages, internal revenue stamps, machinery, fixtures, equipment, and all other materials and personal property on the premises of any qualified manufacturer of tobacco products or cigarette papers and tubes, or export warehouse proprietor, who, with intent to defraud the United States, fails to keep or make any record, return, report, or inventory, or keeps or makes any false or fraudulent record, return, report, or inventory, required by this chapter; or refuses to pay any tax imposed by this chapter, or attempts in any manner to evade or defeat the tax or the payment thereof; or removes, contrary to any provision of this chapter, any article subject to tax under this chapter, shall be forfeited to the United States.” and (B) by striking out subsection (c) and inserting in lieu thereof the following: “(c) Real and Personal Property of Illicit Operators.—All tobacco products, cigarette papers and tubes, machinery, fixtures, equipment, and other materials and personal property on the premises of any person engaged in business as a manufacturer of tobacco products or cigarette papers and tubes, or export warehouse proprietor,79 Stat. 153 without filing the bond or obtaining the permit, as required by this chapter, together with all his right, title, and interest in the building in which such business is conducted, and the lot or tract of ground on which the building is located, shall be forfeited to the United States.”