I 

118TH CONGRESS 

1ST SESSION H. R. 5715 

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

among all tobacco products, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 26, 2023 

Mr. KRISHNAMOORTHI 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 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 2023’’. 


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1 SEC. 2. INCREASING EXCISE TAXES ON CIGARETTES AND 

2 ESTABLISHING EXCISE TAX EQUITY AMONG 

3 ALL TOBACCO PRODUCT TAX RATES. 

4 (a) TAX PARITY FOR ROLL-YOUR-OWN TOBACCO.— 

5 Section 5701(g) of the Internal Revenue Code of 1986 is 

6 amended by striking ‘‘$24.78’’ and inserting ‘‘$49.56’’. 

7 (b) TAX PARITY FOR PIPE TOBACCO.—Section 

8 5701(f) of the Internal Revenue Code of 1986 is amended 

9 by striking ‘‘$2.8311 cents’’ and inserting ‘‘$49.56’’. 

10 (c) TAX PARITY FOR SMOKELESS TOBACCO.— 

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

12 Code of 1986 is amended— 

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

14 and inserting ‘‘$26.84’’; 

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

16 cents’’ and inserting ‘‘$10.74’’; and 

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

18 ‘‘(3) SMOKELESS TOBACCO SOLD IN DISCRETE

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

20 $100.66 per thousand.’’. 

21 (2) Section 5702(m) of such Code is amend22 ed— 

23 (A) in paragraph (1), by striking ‘‘or chew24 ing tobacco’’ and inserting ‘‘, chewing tobacco, 

25 or discrete single-use unit’’; 


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

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

3 the period in each such paragraph; and 

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

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

6 ‘discrete single-use unit’ means any product con7 taining, made from, or derived from tobacco or nico8 tine that— 

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

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

11 pill, pouch, dissolvable strip, or other discrete 

12 single-use or single-dose unit.’’. 

13 (d) TAX PARITY FOR SMALL CIGARS.—Paragraph 

14 (1) of section 5701(a) of the Internal Revenue Code of 

15 1986 is amended by striking ‘‘$50.33’’ and inserting 

16 ‘‘$100.66’’. 

17 (e) TAX PARITY FOR LARGE CIGARS.— 

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

19 5701(a) of the Internal Revenue Code of 1986 is 

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

21 follows through the period and inserting the fol22 lowing: ‘‘$49.56 per pound and a proportionate tax 

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

24 not less than 10.066 cents per cigar.’’. 


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1 (2) GUIDANCE.—The Secretary of the Treas2 ury, or the Secretary’s delegate, may issue guidance 

3 regarding the appropriate method for determining 

4 the weight of large cigars for purposes of calculating 

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

6 Internal Revenue Code of 1986. 

7 (3) CONFORMING AMENDMENT.—Section 5702 

8 of such Code is amended by striking subsection (l). 

9 (f) TAX PARITY FOR ROLL-YOUR-OWN TOBACCO

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

11 section 5702 of the Internal Revenue Code of 1986 is 

12 amended by inserting ‘‘, and includes processed tobacco 

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

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

15 but does not include removals of processed tobacco for ex16 portation’’ after ‘‘wrappers thereof’’. 

17 (g) IMPOSITION OF TAX ON NICOTINE FOR USE IN

18 VAPING, ETC.— 

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

20 Revenue Code of 1986 is amended by redesignating 

21 subsection (h) as subsection (i) and by inserting 

22 after subsection (g) the following new subsection: 

23 ‘‘(h) NICOTINE.—On taxable nicotine, manufactured 

24 in or imported into the United States, there shall be im25 posed a tax equal to the dollar amount specified in section 


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1 5701(b)(1) per 1,810 milligrams of nicotine (and a pro2 portionate tax at the like rate on any fractional part there3 of).’’. 

4 (2) TAXABLE NICOTINE.—Section 5702 of such 

5 Code is amended by adding at the end the following 

6 new subsection: 

7 ‘‘(q) TAXABLE NICOTINE.— 

8 ‘‘(1) IN GENERAL.—Except as otherwise pro9 vided in this subsection, the term ‘taxable nicotine’ 

10 means any nicotine which has been extracted, con11 centrated, or synthesized. 

12 ‘‘(2) EXCEPTION FOR PRODUCTS APPROVED BY

13 FOOD AND DRUG ADMINISTRATION.—Such term 

14 shall not include any nicotine if the manufacturer or 

15 importer thereof demonstrates to the satisfaction of 

16 the Secretary of Health and Human Services that 

17 such nicotine will be used in— 

18 ‘‘(A) a drug— 

19 ‘‘(i) that is approved under section 

20 505 of the Federal Food, Drug, and Cos21 metic Act or licensed under section 351 of 

22 the Public Health Service Act; or 

23 ‘‘(ii) for which an investigational use 

24 exemption has been authorized under sec25 tion 505(i) of the Federal Food, Drug, and 


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1 Cosmetic Act or under section 351(a) of 

2 the Public Health Service Act; or 

3 ‘‘(B) a combination product (as described 

4 in section 503(g) of the Federal Food, Drug, 

5 and Cosmetic Act), the constituent parts of 

6 which were approved or cleared under section 

7 505, 510(k), or 515 of such Act. 

8 ‘‘(3) COORDINATION WITH TAXATION OF OTHER

9 TOBACCO PRODUCTS.—Tobacco products meeting 

10 the definition of cigars, cigarettes, smokeless to11 bacco, pipe tobacco, and roll-your-own tobacco in 

12 this section shall be classified and taxed as such de13 spite any concentration of the nicotine inherent in 

14 those products or any addition of nicotine to those 

15 products during the manufacturing process. 

16 ‘‘(4) REGULATIONS.—The Secretary shall pre17 scribe such regulations or other guidance as is nec18 essary or appropriate to carry out the purposes of 

19 this subsection, including regulations or other guid20 ance for coordinating the taxation of tobacco prod21 ucts and taxable nicotine to protect revenue and pre22 vent double taxation.’’. 

23 (3) TAXABLE NICOTINE TREATED AS A TO24 BACCO PRODUCT.—Section 5702(c) of such Code is 

25 amended by striking ‘‘and roll-your-own tobacco’’ 


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1 and inserting ‘‘roll-your-own tobacco, and taxable 

2 nicotine’’. 

3 (4) MANUFACTURER OF TAXABLE NICOTINE.— 

4 Section 5702 of such Code, as amended by para5 graph (2), is amended by adding at the end the fol6 lowing new subsection: 

7 ‘‘(r) MANUFACTURER OF TAXABLE NICOTINE.— 

8 ‘‘(1) IN GENERAL.—Any person who extracts, 

9 concentrates, or synthesizes nicotine shall be treated 

10 as a manufacturer of taxable nicotine (and as manu11 facturing such taxable nicotine). 

12 ‘‘(2) APPLICATION OF RULES RELATED TO

13 MANUFACTURERS OF TOBACCO PRODUCTS.—Any 

14 reference to a manufacturer of tobacco products, or 

15 to manufacturing tobacco products, shall be treated 

16 as including a reference to a manufacturer of tax17 able nicotine, or to manufacturing taxable nicotine, 

18 respectively.’’. 

19 (h) INCREASING TAX ON CIGARETTES.— 

20 (1) SMALL CIGARETTES.—Section 5701(b)(1) 

21 of such Code is amended by striking ‘‘$50.33’’ and 

22 inserting ‘‘$100.66’’. 

23 (2) LARGE CIGARETTES.—Section 5701(b)(2) 

24 of such Code is amended by striking ‘‘$105.69’’ and 

25 inserting ‘‘$211.38’’. 


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1 (i) TAX RATES ADJUSTED FOR INFLATION.—Section 

2 5701 of such Code, as amended by subsection (g), is 

3 amended by adding at the end the following new sub4 section: 

5 ‘‘(j) INFLATION ADJUSTMENT.— 

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

7 year beginning after 2023, the dollar amounts pro8 vided under this chapter shall each be increased by 

9 an amount equal to— 

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

11 ‘‘(B) the cost-of-living adjustment deter12 mined under section 1(f)(3) for the calendar 

13 year, determined by substituting ‘calendar year 

14 2022’ for ‘calendar year 2016’ in subparagraph 

15 (A)(ii) thereof. 

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

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

18 amount shall be rounded to the next highest multiple 

19 of $0.01.’’. 

20 (j) FLOOR STOCKS TAXES.— 

21 (1) IMPOSITION OF TAX.—On tobacco products 

22 manufactured in or imported into the United States 

23 which are removed before any tax increase date and 

24 held on such date for sale by any person, there is 


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1 hereby imposed a tax in an amount equal to the ex2 cess of— 

3 (A) the tax which would be imposed under 

4 section 5701 of the Internal Revenue Code of 

5 1986 on the article if the article had been re6 moved on such date, over 

7 (B) the prior tax (if any) imposed under 

8 section 5701 of such Code on such article. 

9 (2) CREDIT AGAINST TAX.—Each person shall 

10 be allowed as a credit against the taxes imposed by 

11 paragraph (1) an amount equal to $500. Such credit 

12 shall not exceed the amount of taxes imposed by 

13 paragraph (1) on such date for which such person 

14 is liable. 

15 (3) LIABILITY FOR TAX AND METHOD OF PAY16 MENT.— 

17 (A) LIABILITY FOR TAX.—A person hold18 ing tobacco products on any tax increase date 

19 to which any tax imposed by paragraph (1) ap20 plies shall be liable for such tax. 

21 (B) METHOD OF PAYMENT.—The tax im22 posed by paragraph (1) shall be paid in such 

23 manner as the Secretary shall prescribe by reg24 ulations. 


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1 (C) TIME FOR PAYMENT.—The tax im2 posed by paragraph (1) shall be paid on or be3 fore the date that is 120 days after the effective 

4 date of the tax rate increase. 

5 (4) ARTICLES IN FOREIGN TRADE ZONES.— 

6 Notwithstanding the Act of June 18, 1934 (com7 monly known as the Foreign Trade Zone Act, 48 

8 Stat. 998, 19 U.S.C. 81a et seq.), or any other pro9 vision of law, any article which is located in a for10 eign trade zone on any tax increase date shall be 

11 subject to the tax imposed by paragraph (1) if— 

12 (A) internal revenue taxes have been deter13 mined, or customs duties liquidated, with re14 spect to such article before such date pursuant 

15 to a request made under the first proviso of 

16 section 3(a) of such Act, or 

17 (B) such article is held on such date under 

18 the supervision of an officer of the United 

19 States Customs and Border Protection of the 

20 Department of Homeland Security pursuant to 

21 the second proviso of such section 3(a). 

22 (5) DEFINITIONS.—For purposes of this sub23 section— 

24 (A) IN GENERAL.—Any term used in this 

25 subsection which is also used in section 5702 of 


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1 such Code shall have the same meaning as such 

2 term has in such section. 

3 (B) TAX INCREASE DATE.—The term ‘‘tax 

4 increase date’’ means the effective date of any 

5 increase in any tobacco product excise tax rate 

6 pursuant to the amendments made by this sec7 tion (other than subsection (j) thereof). 

8 (C) SECRETARY.—The term ‘‘Secretary’’ 

9 means the Secretary of the Treasury or the 

10 Secretary’s delegate. 

11 (6) CONTROLLED GROUPS.—Rules similar to 

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

13 apply for purposes of this subsection. 

14 (7) OTHER LAWS APPLICABLE.—All provisions 

15 of law, including penalties, applicable with respect to 

16 the taxes imposed by section 5701 of such Code 

17 shall, insofar as applicable and not inconsistent with 

18 the provisions of this subsection, apply to the floor 

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

20 extent as if such taxes were imposed by such section 

21 5701. The Secretary may treat any person who bore 

22 the ultimate burden of the tax imposed by para23 graph (1) as the person to whom a credit or refund 

24 under such provisions may be allowed or made. 

25 (k) EFFECTIVE DATES.— 


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1 (1) IN GENERAL.—Except as provided in para2 graphs (2) through (4), the amendments made by 

3 this section shall apply to articles removed (as de4 fined in section 5702(j) of the Internal Revenue 

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

6 includes the date of the enactment of this Act. 

7 (2) DISCRETE SINGLE-USE UNITS AND PROC8 ESSED TOBACCO.—The amendments made by sub9 sections (c)(1)(C), (c)(2), and (f) shall apply to arti10 cles removed (as defined in section 5702(j) of the 

11 Internal Revenue Code of 1986) after the date that 

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

13 Act. 

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

15 subsection (e) shall apply to articles removed after 

16 December 31, 2023. 

17 (4) TAXABLE NICOTINE.—The amendments 

18 made by subsection (g) shall apply to articles re19 moved in calendar quarters beginning after the date 

20 which is 180 days after the date of the enactment 

21 of this Act. 

22 (l) TRANSITION RULE FOR PERMIT AND BOND RE23 QUIREMENTS.—A person which is lawfully engaged in 

24 business as a manufacturer or importer of taxable nicotine 

25 (within the meaning of subchapter A of chapter 52 of the 


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1 Internal Revenue Code of 1986, as amended by this sec2 tion) on the date of the enactment of this Act, first be3 comes subject to the requirements of subchapter B of 

4 chapter 52 of such Code by reason of the amendments 

5 made by this section, and submits an application under 

6 such subchapter B to engage in such business not later 

7 than 90 days after the date of the enactment of this Act, 

8 shall not be denied the right to carry on such business 

9 by reason of such requirements before final action on such 

10 application. 

Æ 


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