I 
115TH CONGRESS 
1ST SESSION 
H. R. 729 
To amend the Internal Revenue Code of 1986 to reform and enforce taxation 
of tobacco products. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 30, 2017 
Mrs. LAWRENCE 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 reform 
and enforce taxation of tobacco products. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Tobacco Excise Tax and Parity Act of 2017’’. 
(b) TABLE OF CONTENTS.—The table of contents of 
this Act is as follows: 
Sec. 1. Short title and table of contents. 
TITLE I—TOBACCO EXCISE TAX AND PARITY 
Sec. 101. Tobacco excise tax and parity. 
TITLE II—AMENDMENTS TO INTERNAL REVENUE CODE OF 1986 
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Sec. 201. Amendment of 1986 code. 
Sec. 202. Machines used to manufacture or package tobacco products or proc-
essed tobacco. 
Sec. 203. Improved marking and labeling. 
Sec. 204. Wholesalers and manufacturers, importers, and sellers of tobacco pro-
duction machines required to have permit. 
Sec. 205. Conditions of permit. 
Sec. 206. Records to be maintained. 
Sec. 207. Reports. 
Sec. 208. Fraudulent offenses. 
Sec. 209. Penalties. 
Sec. 210. Coordination with other government officials. 
Sec. 211. Definitions. 
Sec. 212. Conforming amendments. 
Sec. 213. Effective date. 
TITLE III—IMPORT FRAUD 
Sec. 301. Maximum penalty for importation of tobacco products and cigarette 
papers and tubes by fraudulent means. 
TITLE IV—EXCLUSIONS REGARDING INDIAN TRIBES AND TRIBAL 
MATTERS 
Sec. 401. Exclusions regarding Indian tribes and tribal matters. 
TITLE I—TOBACCO EXCISE TAX 
AND PARITY 
SEC. 101. TOBACCO EXCISE TAX AND PARITY. 
(a) INCREASE IN EXCISE TAX ON SMALL CIGARS 
AND CIGARETTES.— 
(1) SMALL CIGARS.—Section 5701(a)(1) of the 
Internal Revenue Code of 1986 is amended by strik-
ing ‘‘$50.33’’ and inserting ‘‘$97.65’’. 
(2) CIGARETTES.—Section 5701(b) of such 
Code is amended— 
(A) by striking ‘‘$50.33’’ in paragraph (1) 
and inserting ‘‘$97.65’’, and 
(B) by striking ‘‘$105.69’’ in paragraph 
(2) and inserting ‘‘$205.06’’. 
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(b) TAX PARITY FOR PIPE TOBACCO AND ROLL- 
YOUR-OWN TOBACCO.— 
(1) PIPE TOBACCO.—Section 5701(f) of the In-
ternal Revenue Code of 1986 is amended by striking 
‘‘$2.8311 cents’’ and inserting ‘‘$48.08’’. 
(2) 
ROLL-YOUR-OWN
TOBACCO.—Section 
5701(g) of such Code is amended by striking 
‘‘$24.78’’ and inserting ‘‘$48.08’’. 
(c) TAX PARITY FOR LARGE CIGARS.— 
(1) IN
GENERAL.—Paragraph (2) of section 
5701(a) of the Internal Revenue Code of 1986 is 
amended by striking ‘‘52.75 percent’’ and all that 
follows through the period and inserting ‘‘$24.78 per 
pound (and a proportionate tax at the like rate on 
all fractional parts of a pound) but not less than 
5.033 cents per cigar.’’. 
(2) GUIDANCE.—The Secretary of the Treasury 
or the Secretary of the Treasury’s delegate may 
issue guidance regarding the appropriate method for 
determining the weight of large cigars for purposes 
of calculating the applicable tax under section 
5701(a)(2) of the Internal Revenue Code of 1986. 
(d) TAX PARITY
FOR ROLL-YOUR-OWN TOBACCO 
AND CERTAIN PROCESSED TOBACCO.—Subsection (o) of 
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section 5702 of the Internal Revenue Code of 1986 is 
amended to read as follows: 
‘‘(o) ROLL-YOUR-OWN TOBACCO.—The term ‘roll- 
your-own tobacco’ means— 
‘‘(1) any tobacco which, because of its appear-
ance, type, packaging, or labeling, is suitable for use 
and likely to be offered to, or purchased by, con-
sumers as tobacco for making cigarettes or cigars, 
or for use as wrappers thereof, or 
‘‘(2) any processed tobacco which is— 
‘‘(A) not removed for exportation, and 
‘‘(B) removed or transferred to a person 
who has not been issued a permit pursuant to 
section 5713.’’. 
(e) TAX PARITY FOR SMOKELESS TOBACCO.— 
(1) IN GENERAL.—Section 5701(e) of the Inter-
nal Revenue Code of 1986 is amended— 
(A) in paragraph (1), by striking ‘‘$1.51’’ 
and inserting ‘‘$26.04’’; 
(B) in paragraph (2), by striking ‘‘50.33 
cents’’ and inserting ‘‘$10.42’’; and 
(C) by adding at the end the following: 
‘‘(3) SMOKELESS TOBACCO SOLD IN DISCRETE 
SINGLE-USE
UNITS.—On discrete single-use units, 
$97.65 per each 1,000 single-use units.’’. 
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(2) 
DISCRETE
SINGLE-USE
UNIT.—Section 
5702(m) of such Code is amended— 
(A) in paragraph (1), by striking ‘‘or chew-
ing tobacco’’ and inserting ‘‘chewing tobacco, 
discrete single-use unit’’; 
(B) in paragraphs (2) and (3), by inserting 
‘‘that is not a discrete single-use unit’’ before 
the period in each such paragraph; and 
(C) by adding at the end the following: 
‘‘(4) DISCRETE SINGLE-USE UNIT.—The term 
‘discrete single-use unit’ means any product con-
taining tobacco that— 
‘‘(A) is not intended to be smoked, and 
‘‘(B) is in the form of a lozenge, tablet, 
pill, pouch, dissolvable strip, or other discrete 
single-use or single-dose unit.’’. 
(f) OTHER TOBACCO PRODUCTS.— 
(1) IN GENERAL.—Section 5701 of the Internal 
Revenue Code of 1986 is amended by adding at the 
end the following new subsection: 
‘‘(i) OTHER TOBACCO PRODUCTS.—Any product not 
otherwise described under this section that has been deter-
mined to be a tobacco product by the Food and Drug Ad-
ministration through its authorities under the Family 
Smoking Prevention and Tobacco Control Act shall be 
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taxed at a level of tax equivalent to the tax rate for ciga-
rettes on an estimated per use basis as determined by the 
Secretary.’’. 
(2) ESTABLISHING PER USE BASIS.—For pur-
poses of section 5701(i) of the Internal Revenue 
Code of 1986, not later than 12 months after the 
date that a product has been determined to be a to-
bacco product by the Food and Drug Administra-
tion, the Secretary of the Treasury (or the Secretary 
of the Treasury’s delegate) shall issue final regula-
tions establishing the level of tax for such product 
that is equivalent to the tax rate for cigarettes on 
an estimated per use basis. 
(g) CLARIFYING DEFINITION OF TOBACCO PROD-
UCTS.— 
(1) IN
GENERAL.—Subsection (c) of section 
5702 of the Internal Revenue Code of 1986 is 
amended to read as follows: 
‘‘(c) TOBACCO PRODUCTS.—The term ‘tobacco prod-
ucts’ means— 
‘‘(1) cigars, cigarettes, smokeless tobacco, pipe 
tobacco, and roll-your-own tobacco, and 
‘‘(2) any other product subject to tax pursuant 
to section 5701(i).’’. 
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(2) CONFORMING
AMENDMENTS.—Subsection 
(d) of section 5702 of such Code is amended by 
striking ‘‘cigars, cigarettes, smokeless tobacco, pipe 
tobacco, or roll-your-own tobacco’’ each place it ap-
pears and inserting ‘‘tobacco products’’. 
(h) INFLATION ADJUSTMENT.—Section 5701 of the 
Internal Revenue Code of 1986, as amended by subsection 
(f), is amended by adding at the end the following new 
subsection: 
‘‘(j) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of any calendar 
year after 2017, each amount set forth in this sec-
tion shall be increased by an amount equal to— 
‘‘(A) such amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for such calendar 
year by substituting ‘calendar year 2016’ for 
‘calendar year 1992’ in subparagraph (B) 
thereof. 
‘‘(2) ROUNDING.—If any amount as adjusted 
under paragraph (1) is not a multiple of $0.01, such 
amount shall be rounded to the next highest multiple 
of $0.01.’’. 
(i) FLOOR STOCKS TAXES.— 
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(1) IMPOSITION OF TAX.—On tobacco products 
manufactured in or imported into the United States 
which are removed before any tax increase date and 
held on such date for sale by any person, there is 
hereby imposed a tax in an amount equal to the ex-
cess of— 
(A) the tax which would be imposed under 
section 5701 of the Internal Revenue Code of 
1986 on the article if the article had been re-
moved on such date, over 
(B) the prior tax (if any) imposed under 
section 5701 of such Code on such article. 
(2) CREDIT AGAINST TAX.—Each person shall 
be allowed as a credit against the taxes imposed by 
paragraph (1) an amount equal to $500. Such credit 
shall not exceed the amount of taxes imposed by 
paragraph (1) on such date for which such person 
is liable. 
(3) LIABILITY FOR TAX AND METHOD OF PAY-
MENT.— 
(A) LIABILITY FOR TAX.—A person hold-
ing tobacco products on any tax increase date 
to which any tax imposed by paragraph (1) ap-
plies shall be liable for such tax. 
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(B) METHOD OF PAYMENT.—The tax im-
posed by paragraph (1) shall be paid in such 
manner as the Secretary shall prescribe by reg-
ulations. 
(C) TIME
FOR
PAYMENT.—The tax im-
posed by paragraph (1) shall be paid on or be-
fore the date that is 120 days after the effective 
date of the tax rate increase. 
(4) ARTICLES
IN
FOREIGN
TRADE
ZONES.— 
Notwithstanding the Act of June 18, 1934 (com-
monly known as the Foreign Trade Zone Act, 48 
Stat. 998, 19 U.S.C. 81a et seq.), or any other pro-
vision of law, any article which is located in a for-
eign trade zone on any tax increase date shall be 
subject to the tax imposed by paragraph (1) if— 
(A) internal revenue taxes have been deter-
mined, or customs duties liquidated, with re-
spect to such article before such date pursuant 
to a request made under the 1st proviso of sec-
tion 3(a) of such Act, or 
(B) such article is held on such date under 
the supervision of an officer of the United 
States Customs and Border Protection of the 
Department of Homeland Security pursuant to 
the 2d proviso of such section 3(a). 
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(5) DEFINITIONS.—For purposes of this sub-
section— 
(A) IN GENERAL.—Any term used in this 
subsection which is also used in section 5702 of 
such Code shall have the same meaning as such 
term has in such section. 
(B) TAX INCREASE DATE.—The term ‘‘tax 
increase date’’ means the effective date of any 
increase in any tobacco product excise tax rate 
pursuant to the amendments made by this sec-
tion (other than subsection (g) thereof). 
(C) SECRETARY.—The term ‘‘Secretary’’ 
means the Secretary of the Treasury or the 
Secretary’s delegate. 
(6) CONTROLLED
GROUPS.—Rules similar to 
the rules of section 5061(e)(3) of such Code shall 
apply for purposes of this subsection. 
(7) OTHER LAWS APPLICABLE.—All provisions 
of law, including penalties, applicable with respect to 
the taxes imposed by section 5701 of such Code 
shall, insofar as applicable and not inconsistent with 
the provisions of this subsection, apply to the floor 
stocks taxes imposed by paragraph (1), to the same 
extent as if such taxes were imposed by such section 
5701. The Secretary may treat any person who bore 
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the ultimate burden of the tax imposed by para-
graph (1) as the person to whom a credit or refund 
under such provisions may be allowed or made. 
(j) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graphs (2) through (4), the amendments made by 
this section shall apply to articles removed (as de-
fined in section 5702(j) of the Internal Revenue 
Code of 1986) after the last day of the month which 
includes the date of the enactment of this Act. 
(2) DISCRETE SINGLE-USE UNITS AND PROC-
ESSED TOBACCO.—The amendments made by sub-
sections (d), (e)(1)(C), and (e)(2) shall apply to arti-
cles removed (as defined in section 5702(j) of the 
Internal Revenue Code of 1986) after the date that 
is 6 months after the date of the enactment of this 
Act. 
(3) LARGE CIGARS.—The amendments made by 
subsection (c) shall apply to articles removed after 
December 31, 2017. 
(4) OTHER TOBACCO PRODUCTS.—The amend-
ments made by subsection (f)(1) shall apply to prod-
ucts removed after the last day of the month which 
includes the date that the Secretary of the Treasury 
(or the Secretary of the Treasury’s delegate) issues 
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final regulations establishing the level of tax for 
such product. 
TITLE II—AMENDMENTS TO IN-
TERNAL REVENUE CODE OF 
1986 
SEC. 201. AMENDMENT OF 1986 CODE. 
Except as otherwise expressly provided, whenever in 
this title an amendment or repeal is expressed in terms 
of an amendment to, or repeal of, a section or other provi-
sion, the reference shall be considered to be made to a 
section or other provision of the Internal Revenue Code 
of 1986. 
SEC. 202. MACHINES USED TO MANUFACTURE OR PACKAGE 
TOBACCO PRODUCTS OR PROCESSED TO-
BACCO. 
(a) IN GENERAL.—Section 5762 is amended— 
(1) by redesignating subsection (b) as sub-
section (c), and 
(2) by inserting after subsection (a) the fol-
lowing new subsection: 
‘‘(b) MACHINES USED TO MANUFACTURE OR PACK-
AGE TOBACCO PRODUCTS OR PROCESSED TOBACCO.— 
‘‘(1) TRANSFER OF MANUFACTURING MACHINES 
TO
LICENSED
PERSONS.—Any tobacco production 
machine may be sold, leased, imported, exported, de-
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livered, or otherwise made available only to per-
sons— 
‘‘(A) lawfully engaged in— 
‘‘(i) the sale, lease, importation, ex-
portation, or delivery of such machines, 
‘‘(ii) the manufacture or packaging of 
tobacco products or processed tobacco, or 
‘‘(iii) the application of unique identi-
fication markings onto tobacco product or 
processed tobacco packages pursuant to 
section 5723, and 
‘‘(B) that have all Federal, State, local, 
and Indian tribal government permits, registra-
tions, and licenses required to engage in such 
activities. 
‘‘(2) TRANSFER OF MACHINES TO PERSONS EN-
GAGED
IN
ILLEGAL
MANUFACTURE
OF
CONTRA-
BAND.—No tobacco production machine shall know-
ingly be manufactured for or be (directly or indi-
rectly) sold, leased, imported, exported, delivered, or 
otherwise made available to any person engaged in 
the illegal manufacture, distribution, or sale of coun-
terfeit or contraband tobacco products or processed 
tobacco, unique identification markings, or other 
tax-payment indicia. 
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‘‘(3) REGISTRATION OF MACHINES.— 
‘‘(A) IN GENERAL.—Every person having 
possession or custody of, or having control over, 
the installation of any tobacco production ma-
chine shall register such machine with the Sec-
retary immediately on its being installed, by 
subscribing and filing with the Secretary a 
statement, in writing, setting forth the par-
ticular place where such machine is installed, 
the kind of machine and its capacity, the owner 
thereof, the owner’s place of residence, and the 
purpose for which the machine has been or is 
intended to be used. 
‘‘(B) EXCEPTION.—Under regulations pre-
scribed by the Secretary, this paragraph shall 
not apply to any tobacco production machine 
not used or intended to be used— 
‘‘(i) for the manufacture or produc-
tion of cigarette or cigars, or to manufac-
ture any other tobacco product or proc-
essed tobacco, 
‘‘(ii) to package any tobacco product 
or processed tobacco, or 
‘‘(iii) to apply unique identification 
markings to any package. 
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‘‘(4) RECORDS.— 
‘‘(A) IN
GENERAL.—Any person selling, 
leasing, importing, exporting, delivering, or oth-
erwise making available a tobacco production 
machine shall maintain and keep records, as the 
Secretary prescribes by regulation, relating to 
any transfers of the machine, including the 
name, address, other contact information, and 
any permit, registration, or license number of 
the person receiving delivery of the machine, or 
to whom the machine is otherwise transferred, 
as the case may be. 
‘‘(B) 
5-YEAR
HOLDING
PERIOD
FOR 
RECORDS.—Any record required to be main-
tained and kept under subparagraph (A) shall 
be kept for the 5-year period beginning on the 
first date such record is required to be so main-
tained and kept. 
‘‘(C) AVAILABILITY
OF
RECORDS.—Such 
records shall be available for inspection by any 
internal revenue officer during business hours. 
‘‘(D) SAFE
HARBOR.—An ordinary com-
mercial record or invoice shall satisfy the re-
quirements of this paragraph if such record or 
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invoice contains all of the information required 
under subparagraph (A). 
‘‘(5) VIOLATIONS.— 
‘‘(A) IN
GENERAL.—Whoever knowingly 
violates paragraph (1), (2), or (3) shall, for 
each offense, be fined not more than $10,000 or 
an amount equal to 3 times the fair market 
value of the tobacco product machine involved 
(whichever is greater), or imprisoned not more 
than five years, or both. 
‘‘(B) RECORDKEEPING.—Whoever know-
ingly violates paragraph (4) shall, for each of-
fense, be fined not more than $10,000.’’. 
(b) TOBACCO PRODUCTION MACHINE.—Section 5702 
is amended by adding at the end the following new sub-
section: 
‘‘(q) TOBACCO PRODUCTION MACHINE.—The term 
‘tobacco production machine’ means any machine (or com-
ponent integral to the operation of such a machine) used 
to manufacture or package tobacco products or processed 
tobacco or to apply unique identification markings or 
other tax-payment indicia to packages of tobacco products 
or processed tobacco. Such term includes any machine 
used to produce tobacco products for compensation, lease, 
or hire, or otherwise used in a commercial setting.’’. 
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(c) CONFORMING AMENDMENT.—Subsection (c) of 
section 5762 (as so redesignated) is amended by striking 
‘‘subsection (a)’’ and inserting ‘‘subsections (a) and (b)’’. 
(d) EFFECTIVE DATE.—The amendment made by 
this section shall apply to transfers more than 6 months 
after the date of the enactment of this Act. 
SEC. 203. IMPROVED MARKING AND LABELING. 
(a) IN GENERAL.—Subsection (b) of section 5723 is 
amended to read as follows: 
‘‘(b) MARKS, LABELS, AND NOTICES.— 
‘‘(1) IN GENERAL.—Subject to paragraphs (2), 
(3), and (4), every package of tobacco products, 
processed tobacco, or cigarette papers or tubes shall, 
before removal, bear the marks, labels, and notices 
that the Secretary by regulation prescribes. 
‘‘(2) MARKING REQUIREMENTS FOR DOMESTIC 
MARKET.— 
‘‘(A) IN GENERAL.—Each person who is a 
manufacturer or importer of tobacco products 
or processed tobacco shall (in accordance with 
regulations prescribed by the Secretary) ensure 
that, before any product intended for sale or 
distribution within the United States is re-
moved, a unique identification marking is af-
fixed to or forms part of each package of to-
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bacco product or processed tobacco manufac-
tured or imported by such person for sale or 
distribution. 
‘‘(B) MARKINGS
ON
INDIVIDUAL
PACK-
AGES.—Any markings required to be placed on 
a tobacco product or processed tobacco package 
by this subsection shall be placed on the inner-
most sealed container visible from the outside 
of the individual package. For any tobacco 
product or processed tobacco package that con-
tains multiple smaller packages of tobacco prod-
ucts or processed tobacco, any markings re-
quired to be so placed on tobacco product or 
processed tobacco packages shall be placed on 
all the individual tobacco product or processed 
tobacco packages. 
‘‘(C) MARKINGS ON AGGREGATE PACKING 
MODES.—To facilitate efficient tracking and 
tracing of tobacco products or processed to-
bacco through the distribution system, all man-
ufacturers or importers of tobacco products or 
processed tobacco shall, in addition to such 
unique identification marking, also, in accord-
ance with regulations prescribed by the Sec-
retary, ensure that unique identification mark-
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ings are affixed to or form part of aggregate 
packing modes (such as cartons, cases, and 
master cases for cigarettes). The Secretary 
shall determine the size, location, and methods 
for such markings. The Secretary shall estab-
lish regulations requiring that all persons with-
in the distribution chain, up to but not includ-
ing the ultimate retailer, utilize the unique 
identification markings on aggregate packing 
modes to facilitate the tracking and tracing of 
tobacco products or processed tobacco through 
the distribution system. 
‘‘(3) 
MARKING
REQUIREMENTS
FOR
EX-
PORTS.—A unique identification marking shall be af-
fixed to or form part of each package of tobacco 
product or processed tobacco that is exported, or 
sold for export, that distinguishes it from those 
products or processed tobacco intended for sale or 
distribution within the United States. The Secretary 
shall by regulation prescribe the size, location, and 
other characteristics of such marking, and it may 
contain a serial number that is assigned to the coun-
try of export, except that no such serial number 
shall be required on tobacco products or processed 
tobacco sold at retail to consumers by duty free 
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stores for consumption beyond the jurisdiction of the 
internal revenue laws of the United States. Such to-
bacco products or processed tobacco shall instead 
bear markings indicating the tobacco product or 
processed tobacco is only for duty-free sale to con-
sumers, as prescribed through regulation by the Sec-
retary, before the product or processed tobacco is re-
moved. 
‘‘(4) AUTHORIZATION
OF
FEDERAL
UNIQUE 
IDENTIFICATION MARKING.—Not later than 3 years 
after the date of the enactment of the Tobacco Ex-
cise Tax and Parity Act of 2017, the Secretary shall 
by regulation require the use of a unique identifica-
tion marking on all products subject to tax under 
this chapter.’’. 
(b) UNIQUE IDENTIFICATION MARKING.—Section 
5723 is amended by adding at the end the following new 
subsection: 
‘‘(f) UNIQUE IDENTIFICATION MARKING.— 
‘‘(1) IN
GENERAL.—No tobacco product or 
processed tobacco may be sold, offered for sale, dis-
tributed, mailed, or otherwise delivered for final sale 
to any consumer in the United States unless the 
unique identification marking that meets the re-
quirements of this section (and any regulations pre-
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scribed thereunder) is affixed to or forms part of the 
package in which it is contained. 
‘‘(2) SYSTEM SPECIFICATIONS.— 
‘‘(A) The Secretary shall design such sys-
tem to coordinate and avoid interference with 
State, local, and Indian tribal tax stamps and 
markings, facilitate collection of the tax im-
posed by this chapter, impede contraband to-
bacco trafficking, minimize counterfeit marking, 
allow for more effective tracking and tracing of 
tobacco products and processed tobacco, facili-
tate the enforcement of related Federal laws, 
and utilize such available technology as may 
promote the purposes of this chapter. 
‘‘(B) The Secretary shall prescribe the 
method and manner in which such unique iden-
tification markings are to be distributed, pur-
chased, and applied to or made part of tobacco 
product and processed tobacco packages, and 
may provide for the cancellation of such mark-
ings. 
‘‘(C) The unique identification marking 
must provide (through the marking or record 
associated with the marking) such information 
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as the Secretary by regulation prescribes, in-
cluding: 
‘‘(i) A unique serial number or track-
ing code for each tobacco product or proc-
essed tobacco package or aggregate pack-
age. 
‘‘(ii) The name and address of the 
person purchasing the marking (and, if dif-
ferent, of the person ensuring the marking 
is affixed to or made part of the package). 
‘‘(iii) The name and address of the 
first unrelated person purchasing or other-
wise receiving the tobacco product or proc-
essed tobacco from the person who ensures 
the marking is affixed to or made part of 
the package and the date of such purchase 
or receipt. 
‘‘(D) The information described in sub-
paragraph (C) may be required to, to the extent 
practicable— 
‘‘(i) be cryptographically encrypted, 
and 
‘‘(ii)(I) be readable by a portable 
scanning device (or similar device) to be 
utilized by regulatory and law enforcement 
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officials at the time and place of inspec-
tion, or 
‘‘(II) be otherwise accessible remotely 
at such time and place. 
‘‘(3) UNRELATED
PERSON.—For purposes of 
this subsection, the term ‘unrelated person’ means a 
person other than a related person within the mean-
ing of section 267(b) or 707(b)(1).’’. 
(c) DEFINITIONS.—Section 5723, as amended by 
subsection (b), is amended by adding at the end the fol-
lowing new subsections: 
‘‘(g) PACKAGE DEFINED.—For purposes of this sec-
tion, the term ‘package’ means a pack, box, carton, or con-
tainer of any kind or, if no other container, any wrapping 
(including cellophane), in which a tobacco product or proc-
essed tobacco is sold, offered for sale, distributed, or oth-
erwise delivered for final sale to any consumer. 
‘‘(h) 
UNIQUE
IDENTIFICATION
MARKING
DE-
FINED.—For purposes of this section, the term ‘unique 
identification marking’ means a device in such design and 
denomination as the Secretary authorizes by regulation 
that is affixed to or made part of a package of a tobacco 
product or processed tobacco. Such markings shall contain 
overt security features for public authentication and covert 
security features embedding a unique, secure, encrypted 
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