II 

115TH CONGRESS 

1ST SESSION S. 1837 

To amend the Internal Revenue Code of 1986 to provide tax rate parity 

among all tobacco products, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 19, 2017 

Mr. DURBIN (for himself, Mr. BROWN, Mr. REED, Mr. BLUMENTHAL, Mr. 

MARKEY, and Mr. FRANKEN) introduced the following bill; which was 

read twice and referred to the Committee on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

tax rate parity among all tobacco products, and for other 

purposes. 

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

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Tobacco Tax Equity 

5 Act of 2017’’. 

6 SEC. 2. ESTABLISHING EXCISE TAX EQUITY AMONG ALL TO7 BACCO PRODUCT TAX RATES. 

8 (a) TAX PARITY FOR PIPE TOBACCO AND ROLL9 YOUR-OWN TOBACCO.—Section 5701(f) of the Internal 


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1 Revenue Code of 1986 is amended by striking ‘‘$2.8311 

2 cents’’ and inserting ‘‘$24.78’’. 

3 (b) TAX PARITY FOR SMOKELESS TOBACCO.— 

4 (1) Section 5701(e) of the Internal Revenue 

5 Code of 1986 is amended— 

6 (A) in paragraph (1), by striking ‘‘$1.51’’ 

7 and inserting ‘‘$13.42’’; 

8 (B) in paragraph (2), by striking ‘‘50.33 

9 cents’’ and inserting ‘‘$5.37’’; and 

10 (C) by adding at the end the following: 

11 ‘‘(3) SMOKELESS TOBACCO SOLD IN DISCRETE

12 SINGLE-USE UNITS.—On discrete single-use units, 

13 $50.33 per thousand.’’. 

14 (2) Section 5702(m) of such Code is amend15 ed— 

16 (A) in paragraph (1), by striking ‘‘or chew17 ing tobacco’’ and inserting ‘‘, chewing tobacco, 

18 or discrete single-use unit’’; 

19 (B) in paragraphs (2) and (3), by inserting 

20 ‘‘that is not a discrete single-use unit’’ before 

21 the period in each such paragraph; and 

22 (C) by adding at the end the following: 

23 ‘‘(4) DISCRETE SINGLE-USE UNIT.—The term 

24 ‘discrete single-use unit’ means any product con25 taining tobacco that— 


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1 ‘‘(A) is not intended to be smoked; and 

2 ‘‘(B) is in the form of a lozenge, tablet, 

3 pill, pouch, dissolvable strip, or other discrete 

4 single-use or single-dose unit.’’. 

5 (c) TAX PARITY FOR LARGE CIGARS.— 

6 (1) IN GENERAL.—Paragraph (2) of section 

7 5701(a) of the Internal Revenue Code of 1986 is 

8 amended by striking ‘‘52.75 percent’’ and all that 

9 follows through the period and inserting the fol10 lowing: ‘‘$24.78 per pound and a proportionate tax 

11 at the like rate on all fractional parts of a pound but 

12 not less than 5.033 cents per cigar.’’. 

13 (2) GUIDANCE.—The Secretary of the Treas14 ury, or the Secretary’s delegate, may issue guidance 

15 regarding the appropriate method for determining 

16 the weight of large cigars for purposes of calculating 

17 the applicable tax under section 5701(a)(2) of the 

18 Internal Revenue Code of 1986. 

19 (d) TAX PARITY FOR ROLL-YOUR-OWN TOBACCO

20 AND CERTAIN PROCESSED TOBACCO.—Subsection (o) of 

21 section 5702 of the Internal Revenue Code of 1986 is 

22 amended by inserting ‘‘, and includes processed tobacco 

23 that is removed for delivery or delivered to a person other 

24 than a person with a permit provided under section 5713, 


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1 but does not include removals of processed tobacco for ex2 portation’’ after ‘‘wrappers thereof’’. 

3 (e) CLARIFYING TAX RATE FOR OTHER TOBACCO

4 PRODUCTS.— 

5 (1) IN GENERAL.—Section 5701 of the Internal 

6 Revenue Code of 1986 is amended by adding at the 

7 end the following new subsection: 

8 ‘‘(i) OTHER TOBACCO PRODUCTS.—Any product not 

9 otherwise described under this section that has been deter10 mined to be a tobacco product by the Food and Drug Ad11 ministration through its authorities under the Family 

12 Smoking Prevention and Tobacco Control Act shall be 

13 taxed at a level of tax equivalent to the tax rate for ciga14 rettes on an estimated per use basis as determined by the 

15 Secretary.’’. 

16 (2) ESTABLISHING PER USE BASIS.—For pur17 poses of section 5701(i) of the Internal Revenue 

18 Code of 1986, not later than 12 months after the 

19 later of the date of the enactment of this Act or the 

20 date that a product has been determined to be a to21 bacco product by the Food and Drug Administra22 tion, the Secretary of the Treasury (or the Secretary 

23 of the Treasury’s delegate) shall issue final regula24 tions establishing the level of tax for such product 


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1 that is equivalent to the tax rate for cigarettes on 

2 an estimated per use basis. 

3 (f) CLARIFYING DEFINITION OF TOBACCO PROD4 UCTS.— 

5 (1) IN GENERAL.—Subsection (c) of section 

6 5702 of the Internal Revenue Code of 1986 is 

7 amended to read as follows: 

8 ‘‘(c) TOBACCO PRODUCTS.—The term ‘tobacco prod9 ucts’ means— 

10 ‘‘(1) cigars, cigarettes, smokeless tobacco, pipe 

11 tobacco, and roll-your-own tobacco, and 

12 ‘‘(2) any other product subject to tax pursuant 

13 to section 5701(i).’’. 

14 (2) CONFORMING AMENDMENTS.—Subsection 

15 (d) of section 5702 of such Code is amended by 

16 striking ‘‘cigars, cigarettes, smokeless tobacco, pipe 

17 tobacco, or roll-your-own tobacco’’ each place it ap18 pears and inserting ‘‘tobacco products’’. 

19 (g) TAX RATES ADJUSTED FOR INFLATION.—Sec20 tion 5701 of such Code, as amended by subsection (e), 

21 is amended by adding at the end the following new sub22 section: 

23 ‘‘(j) INFLATION ADJUSTMENT.— 

24 ‘‘(1) IN GENERAL.—In the case of any calendar 

25 year beginning after 2017, the dollar amounts proVerDate Sep 11 2014 02:26 Sep 23, 2017 Jkt 069200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1837.IS S1837

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1 vided under this chapter shall each be increased by 

2 an amount equal to— 

3 ‘‘(A) such dollar amount, multiplied by 

4 ‘‘(B) the cost-of-living adjustment deter5 mined under section 1(f)(3) for the calendar 

6 year, determined by substituting ‘calendar year 

7 2016’ for ‘calendar year 1992’ in subparagraph 

8 (B) thereof. 

9 ‘‘(2) ROUNDING.—If any amount as adjusted 

10 under paragraph (1) is not a multiple of $0.01, such 

11 amount shall be rounded to the next highest multiple 

12 of $0.01.’’. 

13 (h) EFFECTIVE DATES.— 

14 (1) IN GENERAL.—Except as provided in para15 graphs (2) through (4), the amendments made by 

16 this section shall apply to articles removed (as de17 fined in section 5702(j) of the Internal Revenue 

18 Code of 1986) after the last day of the month which 

19 includes the date of the enactment of this Act. 

20 (2) DISCRETE SINGLE-USE UNITS AND PROC21 ESSED TOBACCO.—The amendments made by sub22 sections (b)(1)(C), (b)(2), and (d) shall apply to ar23 ticles removed (as defined in section 5702(j) of the 

24 Internal Revenue Code of 1986) after the date that 


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1 is 6 months after the date of the enactment of this 

2 Act. 

3 (3) LARGE CIGARS.—The amendments made by 

4 subsection (c) shall apply to articles removed after 

5 December 31, 2017. 

6 (4) OTHER TOBACCO PRODUCTS.—The amend7 ments made by subsection (e)(1) shall apply to prod8 ucts removed after the last day of the month which 

9 includes the date that the Secretary of the Treasury 

10 (or the Secretary of the Treasury’s delegate) issues 

11 final regulations establishing the level of tax for 

12 such product. 

Æ 


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