DESCRIPTION OF THE REVENUE PROVISIONS 

OF THE 

“CHILDREN’S HEALTH INSURANCE 

PROGRAM REAUTHORIZATION ACT OF 2009” 

Scheduled for Markup 

before the 

SENATE COMMITTEE ON FINANCE 

on January 15, 2009 

Prepared by the Staff 

of the 

JOINT COMMITTEE ON TAXATION 

 

January 13, 2009 

JCX-1-09
i 

CONTENTS 

Page

INTRODUCTION .......................................................................................................................... 1

I. INCREASE TOBACCO TAX RATES AND MODIFY CERTAIN DEFINITIONS ....... 2

A. Increase Excise Tax Rates on Tobacco Products and Cigarette Papers and Tubes ...... 2

B. Modify Definition of Roll-Your-Own Tobacco ........................................................... 6

II. STRENGTHEN REGULATORY AND ENFORCEMENT AUTHORITY WITH 

RESPECT TO TOBACCO AND ALCOHOL ................................................................... 7

A. Permit, Inventory, Reporting, and Recordkeeping Requirements for 

Manufacturers and Importers of Processed Tobacco .................................................... 7

B. Broaden Authority to Deny, Suspend, and Revoke Tobacco Permits .......................... 9

C. Clarify Statute of Limitations Pertaining to Excise Taxes Imposed on 

Imported Alcohol, Tobacco Products and Cigarette Papers and Tubes ...................... 11

D. Impose Immediate Tax on Unlawfully Manufactured Tobacco Products and 

Cigarette Papers and Tubes ......................................................................................... 12

E. Use of Tax Information in Tobacco Assessments ...................................................... 13

F. Study Concerning Magnitude of Tobacco Smuggling in the United States ............... 15

III. CORPORATE ESTIMATED TAX PROVISION ............................................................ 16

A. Modifications to corporate estimated tax payments ................................................... 16
1

INTRODUCTION 

This document,1

 prepared by the staff of the Joint Committee on Taxation, provides a 

description of the revenue provisions of the “Children’s Health Insurance Program 

Reauthorization Act of 2009,” scheduled for markup by the Senate Committee on Finance on 

January 15, 2009.

 1

 This document may be cited as follows: Joint Committee on Taxation, “Description of the 

Revenue Provisions of the Children’s Health Insurance Program Reauthorization Act of 2009” 

(JCX-1-09), January 13, 2009. This document can also be found on the web at www.jct.gov. 
2 

I. INCREASE TOBACCO TAX RATES AND MODIFY CERTAIN DEFINITIONS 

A. Increase Excise Tax Rates on Tobacco Products 

and Cigarette Papers and Tubes 

Present Law

Rates of excise tax on tobacco products and cigarette papers and tubes

Tobacco products and cigarette papers and tubes manufactured in the United States or 

imported into the United States are subject to Federal excise tax at the following rates:2 

 Cigars weighing not more than three pounds per thousand (“small cigars”) are taxed 

at the rate of $1.828 per thousand; 

 Cigars weighing more than three pounds per thousand (“large cigars”) are taxed at the 

rate equal to 20.719 percent of the manufacturer’s or importer’s sales price but not 

more than $48.75 per thousand; 

 Cigarettes weighing not more than three pounds per thousand (“small cigarettes”) are 

taxed at the rate of $19.50 per thousand ($0.39 per pack); 

 Cigarettes weighing more than three pounds per thousand (“large cigarettes”) are 

taxed at the rate of $40.95 per thousand, except that, if they measure more than six 

and one-half inches in length, they are taxed at the rate applicable to small cigarettes, 

counting each two and three-quarter inches (or fraction thereof) of the length of each 

as one cigarette; 

 Cigarette papers are taxed at the rate of $0.0122 for each 50 papers or fractional part 

thereof, except that, if they measure more than six and one-half inches in length, they 

are taxable by counting each two and three-quarter inches (or fraction thereof) of the 

length of each as one cigarette paper; 

 Cigarette tubes are taxed at the rate of $0.0244 for each 50 tubes or fractional part 

thereof, except that, if they measure more than six and one-half inches in length, they 

are taxable by counting each two and three-quarter inches (or fraction thereof) of the 

length of each as one cigarette tube; 

 Snuff is taxed at the rate of $0.585 per pound, and proportionately at that rate on all 

fractional parts of a pound; 

 Chewing tobacco is taxed at the rate of $0.195 per pound, and proportionately at that 

rate on all fractional parts of a pound; 

 2

 Sec. 5701. Except where otherwise stated, all section references are to the Internal Revenue 

Code of 1986, as amended (the “Code”). 
3 

 Pipe tobacco is taxed at the rate of $1.0969 per pound, and proportionately at that rate 

on all fractional parts of a pound; and 

 Roll-your-own tobacco is taxed at the rate of $1.0969 per pound, and proportionately 

at that rate on all fractional parts of a pound. 

In general, excise taxes on tobacco products and cigarette papers and tubes manufactured 

in the United States are determined at the time of removal. 

Floor stocks tax and foreign trade zones

Special tax and duty rules apply with respect to foreign trade zones. In general, 

merchandise may be brought into a foreign trade zone without being subject to the general 

customs laws of the United States. Such merchandise may be stored in a foreign trade zone or 

may be subjected to manufacturing or other processes there. The United States Customs and 

Border Protection agency of the Department of Homeland Security (“Customs”) may determine 

internal revenue taxes and liquidate duties imposed on foreign merchandise in such foreign trade 

zones. Articles on which such taxes and applicable duties have already been paid, or which have 

been admitted into the United States free of tax, that have been taken into a foreign trade zone 

from inside the United States, may be held under the supervision of a customs officer. Such 

articles may later be released back into the United States free of further taxes and duties.3

Description of Proposal

Rate increases

Under the provision, the rates of excise tax on tobacco products and cigarette papers and 

tubes are increased, generally in a proportionate manner. The special rules relating to the 

application of the tax rates to large cigarettes and cigarette papers and tubes longer than six and 

one-half inches apply under the provision in the same manner as under present law. The rates 

under the provision are as follows: 

 Small cigars are taxed at the rate of $50.00 per thousand ($1.00 per pack); 

 Large cigars are taxed at the rate equal to 52.4 percent of the manufacturer’s or 

importer’s sales price but not more than $0.40 per cigar; 

 Small cigarettes are taxed at the rate of $50.00 per thousand ($1.00 per pack); 

 Large cigarettes are taxed at the rate of $105.00 per thousand; 

 Cigarette papers are taxed at the rate of $0.0313 for each 50 papers or fractional part 

thereof; 

 3

 19 U.S.C. sec. 81c(a). 
4 

 Cigarette tubes are taxed at the rate of $0.0626 for each 50 tubes or fractional part 

thereof; 

 Snuff is taxed at the rate of $1.50 per pound, and proportionately at that rate on all 

fractional parts of a pound; 

 Chewing tobacco is taxed at the rate of $0.50 per pound, and proportionately at that 

rate on all fractional parts of a pound; 

 Pipe tobacco is taxed at the rate of $2.8126 per pound, and proportionately at that rate 

on all fractional parts of a pound; and 

 Roll-your-own tobacco is taxed at the rate of $24.62 per pound, and proportionately 

at that rate on all fractional parts of a pound. The rate for roll-your-own tobacco is 

intended to approximate the rate for small cigarettes. 

Floor stocks tax and foreign trade zone treatment

The provision imposes a tax on floor stocks. Taxable articles (i.e., those articles listed 

above), except for large cigars, manufactured in the United States or imported into the United 

States which are removed before April 1, 2009 and held on that date for sale by any person are 

subject to a floor stocks tax. The floor stocks tax is equal to the excess of the applicable tax 

under the new rates over the applicable tax at the present-law rates. The person holding the 

article on April 1, 2009 to which the floor stocks tax applies is liable for the tax. Each such 

person is allowed a $500 credit against the floor stocks tax. 

Notwithstanding any other provision of law, the floor stocks tax applies to an article 

located in a foreign trade zone on April 1, 2009, provided that internal revenue taxes have been 

determined, or customs duties have been liquidated, with respect to such article before such date, 

or such article is held on a tax-and-duty-paid basis on such date under the supervision of a 

customs officer. 

For purposes of determining the floor stocks tax, component members of a “controlled 

group” (as modified) are treated as one taxpayer.4

 “Controlled group” for these purposes means 

a parent-subsidiary, brother-sister, or combined corporate group with more than 50-percent 

ownership with respect to either combined voting power or total value. Under regulations, 

similar principles may apply to a group of persons under common control where one or more 

persons are not a corporation. 

The floor stocks tax shall be paid on or before August 1, 2009, in the manner prescribed 

by Treasury regulations. In general, all of the rules, including penalties, applicable with respect 

to taxes on tobacco products and cigarette papers and tubes apply to the floor stocks tax. The 

Secretary of the Treasury or his delegate (“Secretary”) may treat person who bore the ultimate 

burden of the floor stocks tax as the person entitled to a credit of refund of such tax. 

 4

 Controlled group is defined in section 1563. 
5 

Effective Date

The provision applies to articles removed after March 31, 2009. 
6 

B. Modify Definition of Roll-Your-Own Tobacco 

Present Law

Federal excise taxes are imposed upon tobacco products and cigarette papers and tubes.5 

Tobacco products are cigars, cigarettes, snuff, chewing tobacco, pipe tobacco, and roll-your-own 

tobacco. A “cigar” is any roll of tobacco wrapped in leaf tobacco or in any substance containing 

tobacco, other than any roll of tobacco which is a cigarette. A “cigarette” is (i) any roll of 

tobacco wrapped in paper or in any substance not containing tobacco; and (ii) any roll of tobacco 

wrapped in any substance containing tobacco which, because of its appearance, the type of 

tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased 

by, consumers as a cigarette. “Roll-your-own tobacco” is any tobacco, which because of its 

appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or 

purchased by, consumers as tobacco for making cigarettes. “Cigarette paper” is paper, or any 

other material except tobacco, prepared for use as a cigarette wrapper. A “cigarette tube” is 

cigarette paper made into a hollow cylinder for use in making cigarettes.6

Wrappers containing tobacco are not within the definition of cigarette papers or tubes 

because they contain tobacco. They are also not generally within the definition of roll-your-own 

tobacco because they are usually used to make cigars, not cigarettes. For the same reason, loose 

tobacco suitable for making roll-your-own cigars is not considered to be roll-your-own tobacco. 

Description of Proposal

Under the provision, roll-your-own tobacco also includes any tobacco, which because of 

its appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or 

purchased by, consumers as tobacco for making cigars, or for use as wrappers for making cigars. 

Effective Date

The provision applies to articles removed after March 31, 2009. 

 5

 Sec. 5701. 

6

 Sec. 5702. 
7 

II. STRENGTHEN REGULATORY AND ENFORCEMENT AUTHORITY 

WITH RESPECT TO TOBACCO AND ALCOHOL 

A. Permit, Inventory, Reporting, and Recordkeeping Requirements 

for Manufacturers and Importers of Processed Tobacco 

Present Law

Tobacco products and cigarette papers and tubes are subject to Federal excise tax.7

 

Tobacco products are cigars, cigarettes, smokeless tobacco, pipe tobacco, and roll-your-own 

tobacco.8

 Manufacturers and importers of tobacco products and export warehouse proprietors 

must obtain a permit from the Secretary of the Treasury or his delegate (“Secretary”).9

 

Manufacturers and importers of tobacco products or cigarette papers or tubes, and export 

warehouse proprietors, must also periodically make an inventory and certain reports and keep 

certain records, all as prescribed by the Secretary.10 

Description of Proposal

The provision creates a new category of manufacturers and importers who are subject to 

regulation but not to Federal excise tax. Under the provision, manufacturers and importers of 

“processed tobacco” are subject to the present-law permit, inventory, reporting, and 

recordkeeping requirements. Processed tobacco is any tobacco other than tobacco products.11 A 

manufacturer of processed tobacco is any person who processes any tobacco other than tobacco 

products, and an importer includes an importer of processed tobacco. However, the processing 

of tobacco does not include the farming or growing of tobacco or the handling of whole tobacco 

leaf solely for sale, shipment, or delivery to a manufacturer of tobacco products or processed 

tobacco. For example, under the provision an importer of “cut rag” tobacco or a leaf processor 

that manufactures such tobacco is subject to the general permit, inventory, reporting, and 

recordkeeping requirements of the Code but is not subject to Federal excise tax (unless it also 

imports or manufactures tobacco products or cigarette papers or tubes). 

Under the provision, any person who is engaged in business as a manufacturer or 

importer of processed tobacco on the effective date of the provision and who submits a permit 

application within 90 days of the effective date of this provision may continue to engage in such 

business pending action on their permit application. Such persons will be subject to the 

 7

 Sec. 5701. 

8

 Sec. 5702. 

9

 Sec. 5713. 

10 Sec. 5721 (inventories); sec. 5722 (reports); sec. 5741 (records). 

11 Sec. 5702(c) defines tobacco products as cigars, cigarettes, smokeless tobacco, pipe tobacco, 

and roll-your-own tobacco. 
8 

requirements of this provision to the same extent as if the person was a permit holder while final 

action on the permit application is pending. 

Effective Date

The provision is effective on April 1, 2009.
9 

B. Broaden Authority to Deny, Suspend, and Revoke Tobacco Permits 

Present Law

Manufacturers and importers of tobacco products and proprietors of export warehouses 

must obtain a permit to engage in such businesses.12 A permit is obtained by application to the 

Secretary. The Secretary may deny the application if (1) the business premises are inadequate to 

protect the revenue; (2) the activity to be carried out at the business premises does not meet such 

minimum capacity or activity requirements as prescribed by the Secretary; (3) the applicant is, 

by reason of his business experience, financial standing, or trade connections, not likely to 

maintain operations in compliance with the applicable provisions of the Code; or (4) such 

applicant has failed to disclose any material information required or made any material false 

statement in the application.13 In the case of a corporation, an applicant includes any officer, 

director, or principal stockholder and, in the case of a partnership, a partner. 

A permit is conditioned upon compliance with the rules of the Code and related 

regulations pertaining to taxes and regulation of tobacco products and cigarette papers and tubes. 

The Secretary may suspend or revoke a permit after a notice and hearing if the holder (1) has not 

in good faith complied with those rules or has violated any other provision of the Code involving 

intent to defraud; (2) has violated the conditions of the permit; (3) has failed to disclose any 

material information required or made any material false statement in the permit application; or 

(4) has failed to maintain the business premises in such a manner as to protect the revenue.14

Description of Proposal

The provision broadens the present-law authority of the Secretary to deny, suspend, and 

revoke tobacco permits. Under the provision, the Secretary may deny an application for a permit 

if the applicant has been convicted of a felony violation of a Federal or State criminal law 

relating to tobacco products or cigarette papers or tubes, or if, by reason of previous or current 

legal proceedings involving a violation of Federal criminal felony laws relating to tobacco 

products or cigarette papers or tubes, such applicant is not likely to maintain operations in 

compliance with the applicable provisions of the Code. 

Similarly, a permit may be suspended or revoked if the holder is convicted of a felony 

violation of a Federal or State criminal law relating to tobacco products or cigarette papers or 

tubes, or if, by reason of previous or current legal proceedings involving a violation of Federal 

criminal felony laws relating to tobacco products or cigarette papers or tubes, such applicant is 

not likely to maintain operations in compliance with the applicable provisions of the Code. 

 12 Sec. 5713. 

13 Sec. 5712. 

14 Sec. 5713. 
10 

Effective Date

The provision is effective on the date of enactment. 
11 

C. Clarify Statute of Limitations Pertaining to Excise Taxes 

Imposed on Imported Alcohol, Tobacco Products 

and Cigarette Papers and Tubes 

Present Law

Under the Code, amounts of tax must generally be assessed within three years after a tax 

return is filed, and no proceeding in court without assessment for the collection of such tax may 

begin after such period has expired.15 If no return is filed (but is required), the tax may be 

assessed, or a proceeding in court for the collection of such tax may be initiated without 

assessment, at any time.16

Customs collects duties and excise taxes on imports. Importers of taxable articles 

relating to tobacco and alcohol must file a tax return with Customs.17 In general, the limitations 

period for fixing and assessing duties and taxes with respect to an import is one year from the 

date of entry or removal.18 Under the applicable customs law, with some limited exceptions, any 

duty or tax imposed on an import is final and conclusive upon all persons, including the United 

States, unless a protest is filed within 180 days or a court action is timely commenced.19

Description of Proposal

The provision clarifies the tax and customs law in the area of alcohol and tobacco 

products by providing that, notwithstanding customs law, the general statute of limitations for 

assessment under the Code (sec. 6501) applies with respect to taxes imposed under chapters 51 

(relating to distilled spirits, wines, and beer) and 52 (relating to tobacco products and cigarette 

papers and tubes) of the Code. 

No inference is intended regarding the applicability of the statute of limitations under the 

Code to pending cases or to excise taxes imposed other than under chapters 51 and 52 of the 

Code. 

Effective Date

The provision is effective for articles imported into the United States after the date of 

enactment. 

 15 Sec. 6501(a). 

16 Sec. 6501(c)(3). 

17 24 C.F.R. sec. 41.81(b) (tobacco products and cigarette papers and tubes); sec. 5061(a) 

(distilled spirits, wines, and beer). 

18 19 U.S.C. sec. 1504(a). The Secretary may extend this period under certain circumstances and 

with notice to the importer. 

19 19 U.S.C. sec. 1514(a) & (c)(3). 
12 

D. Impose Immediate Tax on Unlawfully Manufactured Tobacco 

Products and Cigarette Papers and Tubes 

Present Law

Manufacturers and importers of tobacco products and proprietors of export warehouses 

must obtain a permit to engage in such businesses.20 A permit is obtained by application to the 

Secretary.21 A manufacturer of tobacco products or cigarette papers or tubes, or an export 

warehouse proprietor, must file a bond and obtain approval of such bond from the Secretary.22 

In general, excise taxes on tobacco products and cigarette papers and tubes manufactured in the 

United States are determined at the time of removal. In the case of taxes on tobacco products 

and cigarette papers and tubes removed during any semimonthly period under bond for deferred 

payment of tax, payment is due no later than the 14th day after the last day of such semimonthly 

period.23

Distilled spirits, wines, and beer produced at any place other than a place required by the 

Code are subject to tax immediately on production.24 There is no such rule imposing immediate 

tax on tobacco products and cigarette papers and tubes that are produced by an out-ofcompliance manufacturer. 

Description of Proposal

Under the provision, in the case of any tobacco products or cigarette papers or tubes 

produced in the United States at any place other than the premises of a manufacturer that has 

obtained a permit (if required) and approval of a bond, the excise tax is due and payable 

immediately upon manufacture, unless they are produced solely for the person’s own personal 

consumption or use. 

Effective Date

The provision is effective on the date of enactment. 

 20 Sec. 5713. A “manufacturer of tobacco products” does not include (1) a person who produces 

tobacco products solely for the person’s own personal consumption or use, and (2) a proprietor of a 

customs bonded manufacturing warehouse with respect to the operation of such warehouse. Sec. 5702(d). 

21 Sec. 5712. 

22 Sec. 5711. 

23 Sec. 5703. 

24 Sec. 5006(c)(2) (distilled spirits); sec. 5041(f) (wines); sec. 5054(a)(3) (beer). 
13 

E. Use of Tax Information in Tobacco Assessments 

Present Law

Section 6103 provides that returns and return information are confidential and may not be 

disclosed by the IRS, other Federal employees, State employees, and certain others having access 

to the information except as provided in the Code.25 A “return” is any tax or information return, 

declaration of estimated tax, or claim for refund required by, or permitted under, the Code, that is 

filed with the Secretary by, on behalf of, or with respect to any person.26 “Return” also includes 

any amendment or supplement thereto, including supporting schedules, attachments, or lists 

which are supplemental to, or part of, the return so filed. 

The definition of “return information” is very broad and includes any information 

gathered by the IRS with respect to a person’s liability or possible liability under the Code.27 

However, data in a form that cannot be associated with, or otherwise identify, directly or 

indirectly a particular taxpayer is not "return information" for section 6103 purposes. 

Section 6103 contains a number of exceptions to the general rule of confidentiality, 

which permit disclosure in specifically identified circumstances when certain conditions are 

satisfied.28

 25 Sec. 6103(a). 

26 Sec. 6103(b)(1). 

27 Sec. 6103(b)(2). Return information is: 

 a taxpayer’s identity, the nature, source, or amount of his income, payments, receipts, 

deductions, exemptions, credits, assets, liabilities, net worth, tax liability, tax withheld, 

deficiencies, overassessments, or tax payments, whether the taxpayer’s return was, is being, 

or will be examined or subject to other investigation or processing, or any other data, received 

by, recorded by, prepared by, furnished to, or collected by the Secretary with respect to a 

return or with respect to the determination of the existence, or possible existence, of liability 

(or the amount thereof) of any person under this title for any tax, penalty, interest, fine, 

forfeiture, or other imposition, or offense, 

 any part of any written determination or any background file document relating to such 

written determination (as such terms are defined in section 6110(b)) which is not open to 

public inspection under section 6110, 

 any advance pricing agreement entered into by a taxpayer and the Secretary and any 

background information related to such agreement or any application for an advance pricing 

agreement, and 

 any closing agreement under section 7121, and any similar agreement, and any background 

information related to such an agreement or request for such an agreement. 
14 

For example, under section 6103(o) of the Code, returns and return information with 

respect to the taxes imposed on alcohol, tobacco and firearms are open to inspection by or 

disclosure to officers and employees of a Federal agency whose official duties require such 

inspection or disclosure. 

The Fair and Equitable Tobacco Reform Act of 200429 repealed the Federal tobacco 

support program and created a Tobacco Trust Fund. Funds from the Tobacco Trust Fund are 

used to provide transitional payments to tobacco quota holders and eligible tobacco producers. 

The Tobacco Trust Fund is funded by quarterly assessments paid by manufacturers and 

importers of tobacco products. The Farm Service Agency receives tax information from the 

Department of the Treasury's Alcohol and Tobacco Tax and Trade Bureau as part of its 

administration of the Tobacco Trust Fund assessments. 

A September 2008 Department of Agriculture inspector general report indicated that a 

number of companies were delinquent in paying their assessments and have been referred to the 

Department of Justice for debt collection.30 Section 6103(o) does not provide for the use of the 

tax information received in civil actions against the delinquent companies. The Department of 

Justice could proceed with the lawsuits based on information provided by other entities, other 

than the tax data. 

Description of Proposal

The proposal provides that returns and return information provided to a Federal agency 

under section 6103(o) may be used in an action or proceeding, or in the preparation for an action 

or proceeding, brought under section 625 the Fair and Equitable Tobacco Reform Act of 2004 

for any unpaid assessments or penalties arising under such Act. 

Effective Date

The proposal is effective on and after the date of enactment. 

 28 Sec. 6103(c) - (o). Such exceptions include disclosures by consent of the taxpayer, disclosures 

to State tax officials, disclosures to the taxpayer and persons having a material interest, disclosures to 

Committees of Congress, disclosures to the President, disclosures to Federal employees for tax 

administration purposes, disclosures to Federal employees for nontax criminal law enforcement purposes 

and to the Government Accountability Office, disclosures for statistical purposes, disclosures for 

miscellaneous tax administration purposes, disclosures for purposes other than tax administration, 

disclosures of taxpayer identity information, disclosures to tax administration contractors and disclosures 

with respect to wagering excise taxes. 

29 Title VI of the American Jobs Creation Act of 2004 (Pub. L. No. 108-357). 

30 U.S. Department of Agriculture, Office of Inspector General, Southeast Region, Report No. 

03601-15-At, Audit Report: Tobacco Transition Payment Program Tobacco Assessments Against 

Tobacco Manufacturers and Importers (September 2008).
15 

F. Study Concerning Magnitude of Tobacco Smuggling in the United States 

Present Law

Present law does not require the Secretary to submit a tobacco smuggling study to 

Congress. 

Description of Proposal

The provision requires the Secretary to submit to Congress a study concerning the 

magnitude of tobacco smuggling in the United States and to recommend the most effective steps 

to reduce it. The study would include a review of the loss of Federal tax revenue due to illicit 

tobacco trade in the United States, and the role of imported tobacco products in such illicit trade. 

Effective Date

The study will be completed no later than one year after the date of enactment. 
16 

III. CORPORATE ESTIMATED TAX PROVISION 

A. Modifications to corporate estimated tax payments 

Present Law

In general, corporations are required to make quarterly estimated tax payments of their 

income tax liability. For a corporation whose taxable year is a calendar year, these estimated 

payments must be made by April 15, June 15, September 15, and December 15. For tax years 

beginning on any date other than January 1, the payments are due in months of the fiscal year 

that correspond to the calendar year payment months. 

Under the Tax Increase Prevention Act of 2005 (“TIPRA”), as amended, in the case of a 

corporation with assets of at least $1 billion, the payments due in July, August, and September, 

2013, shall be increased to 120.00 percent of the payment otherwise due and the next required 

payment shall be reduced accordingly. 

Explanation of Provision

The provision increases the otherwise applicable percentage for 2013 (120.00) by 0.5 

percentage points. 

Effective Date

The provision is effective on the date of enactment.