I

103D CONGRESS

1ST SESSION H. R. 592

To amend the Internal Revenue Code of 1986 to increase to 32 cents per

pack the Federal excise tax on cigarettes and to provide that the revenues

from the additional tax shall be deposited in the Federal Hospital Insurance Trust Fund under the Social Security Act.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 26, 1993

Mr. JACOBS introduced the following bill; which was referred to the Committee

on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to increase

to 32 cents per pack the Federal excise tax on cigarettes

and to provide that the revenues from the additional

tax shall be deposited in the Federal Hospital Insurance

Trust Fund under the Social Security Act.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. INCREASE IN FEDERAL EXCISE TAX ON ALL

4 CIGARETTES.

5 (a) IN GENERAL.—Subsection (b) of section 5701 of

6 the Internal Revenue Code of 1986 (relating to imposition

7 of tax on cigarettes) is amended—
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1 (1) by striking ‘‘$12 per thousand ($10 per

2 thousand on cigarettes removed during 1991 or

3 1992)’’ in paragraph (1) and inserting ‘‘$16 per

4 thousand’’, and

5 (2) by striking ‘‘$25.20 per thousand ($21 per

6 thousand on cigarettes removed during 1991 or

7 1992)’’ in paragraph (2) and inserting ‘‘$33.60’’.

8 (b) FLOOR STOCKS.—

9 (1) IMPOSITION OF TAX.—On cigarettes manu10 factured in or imported into the United States which

11 are removed before October 1, 1993, and held on

12 such date for sale by any person, there shall be im13 posed the following taxes:

14 (A) SMALL CIGARETTES.—On cigarettes,

15 weighing not more than 3 pounds per thousand,

16 $4 per thousand; and

17 (B) LARGE CIGARETTES.—On cigarettes,

18 weighing more than 3 pounds per thousand,

19 $8.40 per thousand; except that, if more than

61 20 ⁄2 inches in length, they shall be taxable at

21 the rate prescribed for cigarettes weighing not

22 more than 3 pounds per thousand, counting

each 23 23 ⁄4 inches, or fraction thereof, of the

24 length of each as one cigarette.
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1 (2) EXCEPTION FOR CERTAIN AMOUNTS OF

2 CIGARETTES.—

3 (A) IN GENERAL.—No tax shall be im4 posed by paragraph (1) on cigarettes held on

5 any tax-increase date by any person if—

6 (i) the aggregate number of cigarettes

7 held by such person on such date does not

8 exceed 30,000, and

9 (ii) such person submits to the Sec10 retary (at the time and in the manner re11 quired by the Secretary) such information

12 as the Secretary shall require for purposes

13 of this subparagraph.

14 For purposes of this subparagraph, in the case

of cigarettes measuring more than 61 15 ⁄2 inches

in length, each 23 16 ⁄4 inches (or fraction thereof)

17 of the length of each shall be counted as one

18 cigarette.

19 (B) AUTHORITY TO EXEMPT CIGARETTES

20 HELD IN VENDING MACHINES.—To the extent

21 provided in regulations prescribed by the Sec22 retary, no tax shall be imposed by paragraph

23 (1) on cigarettes held for retail sale on any tax24 increase date by any person in any vending ma25 chine. If the Secretary so provides with respect
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1 to any person, the Secretary may reduce the

2 30,000 amount in subparagraph (A) and the

3 $60 amount in paragraph (3) with respect to

4 such person.

5 (3) CREDIT AGAINST TAX.—Each person shall

6 be allowed as a credit against the taxes imposed by

7 paragraph (1) an amount equal to $60. Such credit

8 shall not exceed the amount of taxes imposed by

9 paragraph (1) for which such person is liable.

10 (4) LIABILITY FOR TAX AND METHOD OF PAY11 MENT.—

12 (A) LIABILITY FOR TAX.—A person hold13 ing cigarettes on October 1, 1993, to which any

14 tax imposed by paragraph (1) applies shall be

15 liable for such tax.

16 (B) METHOD OF PAYMENT.—The tax im17 posed by paragraph (1) shall be paid in such

18 manner as the Secretary shall prescribe by reg19 ulations.

20 (C) TIME FOR PAYMENT.—The tax im21 posed by paragraph (1) shall be paid on or be22 fore March 31, 1994.

23 (5) DEFINITIONS.—For purposes of this sub24 section—
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1 (A) CIGARETTE.—The term ‘‘cigarette’’

2 shall have the meaning given to such term by

3 subsection (b) of section 5702 of the Internal

4 Revenue Code of 1986.

5 (B) SECRETARY.—The term ‘‘Secretary’’

6 means the Secretary of the Treasury or his

7 delegate.

8 (6) CONTROLLED GROUPS.—Rules similar to

9 the rules of section 5061(e)(3) of such Code shall

10 apply for purposes of this subsection.

11 (7) OTHER LAWS APPLICABLE.—All provisions

12 of law, including penalties, applicable with respect to

13 the taxes imposed by section 5701 of such Code

14 shall, insofar as applicable and not inconsistent with

15 the provisions of this subsection, apply to the floor

16 stocks taxes imposed by paragraph (1), to the same

17 extent as if such taxes were imposed by such section

18 5701.

19 (c) EFFECTIVE DATE.—The amendments made by

20 subsection (a) shall apply to cigarettes removed after

21 September 30, 1993.

22 SEC. 2. TRANSFER OF ADDITIONAL REVENUES TO FEDERAL

23 HOSPITAL INSURANCE TRUST FUND.

24 (a) IN GENERAL.—There are hereby appropriated for

25 deposit into the Federal Hospital Insurance Trust Fund
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1 established under section 1817(a) of the Social Security

2 Act amounts determined by the Secretary of the Treasury

3 or his delegate to be equivalent to—

4 (1) the excess of the amount of the taxes re5 ceived in the Treasury under section 5701(b) of the

6 Internal Revenue Code of 1986 over the amount

7 which would be so received if section 1 of this Act

8 had not been enacted, reduced by

9 (2) the amount of credits or payments allowable

10 under such Code which are properly chargeable

11 against the amount of such excess.

12 (b) METHOD OF TRANSFER.—The amounts appro13 priated by subsection (a) shall be transferred at least

14 monthly from the general fund of the Treasury on the

15 basis of estimates made by the Secretary of the Treasury

16 or his delegate of the amounts referred to in subsection

17 (a) received in the Treasury. Proper adjustments shall be

18 made in the amounts subsequently transferred to the ex19 tent prior estimates were in excess of or less than the

20 amounts required to be transferred.

Æ