II 

114TH CONGRESS 

1ST SESSION S. 450 

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 

FEBRUARY 11, 2015 

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

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 2015’’. 

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 may issue guid14 ance regarding the appropriate method for deter15 mining the weight of large cigars for purposes of cal16 culating the applicable tax under section 5701(a)(2) 

17 of the Internal Revenue Code of 1986. 

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

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

20 section 5702 of the Internal Revenue Code of 1986 is 

21 amended by inserting ‘‘, and includes processed tobacco 

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

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

24 but does not include removals of processed tobacco for ex25 portation’’ after ‘‘wrappers thereof’’. 


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1 (e) CLARIFYING TAX RATE FOR OTHER TOBACCO

2 PRODUCTS.— 

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

4 Revenue Code of 1986 is amended by adding at the 

5 end the following new subsection: 

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

7 otherwise described under this section that has been deter8 mined to be a tobacco product by the Food and Drug Ad9 ministration through its authorities under the Family 

10 Smoking Prevention and Tobacco Control Act shall be 

11 taxed at a level of tax equivalent to the tax rate for ciga12 rettes on an estimated per use basis as determined by the 

13 Secretary.’’. 

14 (2) ESTABLISHING PER USE BASIS.—For pur15 poses of section 5701(i) of the Internal Revenue 

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

17 date that a product has been determined to be a to18 bacco product by the Food and Drug Administra19 tion, the Secretary of the Treasury (or the Secretary 

20 of the Treasury’s delegate) shall issue final regula21 tions establishing the level of tax for such product 

22 that is equivalent to the tax rate for cigarettes on 

23 an estimated per use basis. 

24 (f) CLARIFYING DEFINITION OF TOBACCO PROD25 UCTS.— 


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

2 5702 of the Internal Revenue Code of 1986 is 

3 amended to read as follows: 

4 ‘‘(c) TOBACCO PRODUCTS.—The term ‘tobacco prod5 ucts’ means— 

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

7 tobacco, and roll-your-own tobacco, and 

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

9 to section 5701(i).’’. 

10 (2) CONFORMING AMENDMENTS.—Subsection 

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

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

13 tobacco, or roll-your-own tobacco’’ each place it ap14 pears and inserting ‘‘tobacco products’’. 

15 (g) TAX RATES ADJUSTED FOR INFLATION.—Sec16 tion 5701 of such Code is amended by adding at the end 

17 the following new subsection: 

18 ‘‘(i) INFLATION ADJUSTMENT.— 

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

20 year beginning after 2015, the dollar amounts pro21 vided under this chapter shall each be increased by 

22 an amount equal to— 

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

24 ‘‘(B) the cost-of-living adjustment deter25 mined under section 1(f)(3) for the calendar 


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1 year, determined by substituting ‘calendar year 

2 2014’ for ‘calendar year 1992’ in subparagraph 

3 (B) thereof. 

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

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

6 amount shall be rounded to the next highest multiple 

7 of $0.01.’’. 

8 (h) EFFECTIVE DATES.— 

9 (1) IN GENERAL.—Except as provided in para10 graphs (2) through (4), the amendments made by 

11 this section shall apply to articles removed (as de12 fined in section 5702(j) of the Internal Revenue 

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

14 includes the date of the enactment of this Act. 

15 (2) DISCRETE SINGLE-USE UNITS AND PROC16 ESSED TOBACCO.—The amendments made by sub17 sections (b)(1)(C), (b)(2), and (d) shall apply to ar18 ticles removed (as defined in section 5702(j) of the 

19 Internal Revenue Code of 1986) after the date that 

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

21 Act. 

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

23 subsection (c) shall apply to articles removed after 

24 December 31, 2015. 


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1 (4) OTHER TOBACCO PRODUCTS.—The amend2 ments made by subsection (e)(1) shall apply to prod3 ucts removed after the last day of the month which 

4 includes the date that the Secretary of the Treasury 

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

6 final regulations establishing the level of tax for 

7 such product. 

Æ 


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