Tobacco-related legislative bills that have been introduced by Congress are listed below:
S. 411, S. 1314, and H.R. 2786: Three different bills are pending in Congress this year to increase the federal excise tax rates on cigarettes and other tobacco products, clarify which smokeless tobacco products would be taxed as a “single-use unit” tobacco product, and assess a new tax on electronic cigarettes, and all other tobacco products regulated by the FDA (e.g., oral nicotine products), which would be equivalent to the tax on cigarettes. These bills are Senate Bill S. 411, Senate Bill S. 1314, and House Bill H.R. 2786.
The tax provisions of S. 411, S. 1314 and H.R. 2786 are all identical and increase the federal excise tax rates on cigarettes, small cigars, large cigars, pipe tobacco, chewing tobacco, snuff, roll-your- own tobacco, single-use unit products, and electronic cigarette/nicotine vapor products. Note that these bills define “single-use unit” products as “any product containing, made from, or derived from tobacco or nicotine that: (A) is not intended to be smoked; and (B) is in the form of lozenge, tablet, pill, pouch, dissolvable strip, or other discrete single-use or single-dose unit.”
In addition, regarding electronic cigarettes and oral nicotine products, the bills state that any product that has been determined to be a tobacco product by the Food and Drug Administration 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 Secretary [of the Treasury].” The legislation goes on to provide that the Secretary of the Treasury shall have 12 months after the bill is enacted to issue a final regulation establishing the level of tax for such products that is equivalent to the tax rate for cigarettes on an estimated per use basis. This means that the actual tax rate for these products would be determined by the Secretary of the Treasury in the event the legislation was passed and signed into law.
Finally, the bills also include a provision to increase each tax rate on an annual basis by a cost-of-living adjustment factor.
S. 411, S. 1314, and H.R. 2786
Summary of Current and Proposed Tax Rates
|Tobacco Products||1,000 units (Current Rate)||1,000 units (Proposed)||Pack of 20 (Current Rate)||Pack of 20 (Proposed)|
* Small cigarettes/small cigars weigh not more than 3 pounds per thousand cigarettes or cigars. **Large cigarettes weigh more than 3 pounds per thousand cigarettes and have generally not been manufactured for a number of years.
|Tobacco Products||1000 units (Current Rate)||1 lb. (Proposed)||Each (Current Rate)||Each (Proposed)|
|Large Cigars*||52.75% of sales price but not to exceed $402.60 per 1,000||$49.56||$0.4026 maximum per cigar||Not less than 10.066 cents per cigar|
*Large cigars weigh more than 3 pounds per thousand cigars.
|Tobacco Products||1 lb. (Current Rate)||1 lb. (Proposed)||1 Ounce Tin or Pouch (Current Rate)||1 Ounce Tin or Pouch (Proposed)|
|Single Unit Smokeless (lozenge, tablet, pill, pouch or dissolvable strip)||$100.66 per thousand|
|Electronic Cigarettes and nicotine vapor products||None||Taxed at a level equivalent to the tax rate for cigarettes on an estimated “per use basis”|