(1) by striking ‘‘$1.125 cents per thousand
(93.75 cents per thousand on cigars removed during
1991 or 1992)’’ in paragraph (1) and inserting
‘‘$89.14 per thousand’’, and
(2) by striking ‘‘equal to’’ and all that follows
in paragraph (2) and inserting ‘‘equal to 105.8 per-
cent of the price for which sold but not more than
$250.03 per thousand.’’
(c) CIGARETTE PAPERS.—Subsection (c) of section
5701 is amended by striking ‘‘0.75 cent (0.625 cent on
cigarette papers removed during 1991 or 1992)’’ and in-
serting ‘‘6.24 cents’’.
(d) CIGARETTE TUBES.—Subsection (d) of section
5701 is amended by striking ‘‘1.5 cents (1.25 cents on
cigarette tubes removed during 1991 or 1992)’’ and in-
serting ‘‘12.5 cents’’.
(e) SMOKELESS TOBACCO.—Subsection (e) of section
5701 is amended—
(1) by striking ‘‘36 cents (30 cents on snuff re-
moved during 1991 or 1992)’’ in paragraph (1) and
inserting ‘‘$29.70’’, and
(2) by striking ‘‘12 cents (10 cents on chewing
tobacco removed during 1991 or 1992)’’ in para-
graph (2) and inserting ‘‘$29.46’’.
(f) PIPE TOBACCO.—Subsection (f) of section 5701
is amended by striking ‘‘67.5 cents (56.25 cents on pipe
tobacco removed during 1991 or 1992)’’ and inserting
‘‘$30.01’’.
(g) INFLATION ADJUSTMENT
OF TOBACCO TAX
RATES.—Section 5701 is amended by adding at the end
thereof the following new subsection:
‘‘(i) INFLATION ADJUSTMENT.—
‘‘(1) IN GENERAL.—In the case of articles re-
moved in any calendar year after 1995, each rate of
tax contained in this section shall be increased by an
amount equal to—
‘‘(A) such rate, multiplied by
‘‘(B) the greater of—
‘‘(i) the cost-of-living adjustment de-
termined under section 1(f)(3) for the cal-
endar year in which the removal occurs by
substituting ‘calendar year 1994’ for ‘cal-
endar year 1992’ in subparagraph (B)
thereof, or
‘‘(ii) the cost-of-living adjustment
which would be determined under clause
(i) if only changes in the tobacco and
smoking 
products 
component 
of 
the
Consumer Price Index (as defined in sec-
tion 1(f)(5)) were taken into account.
If any increase determined under this subsection is
not a multiple of 1⁄4 cent, such increase shall be
rounded to the nearest 1⁄4 cent.
‘‘(2) SPECIAL RULE.—No adjustment shall be
made under paragraph (1) in the percentage rate set
forth in subsection (a)(2) but such adjustment shall
apply to the dollar amount contained therein.’’
(h) EFFECTIVE DATE.—The amendments made by
this section shall apply to articles removed (as defined in
section 5702(k) of the Internal Revenue Code of 1986,
as amended by this Act) after September 30, 1995.
(i) FLOOR STOCKS TAXES.—
(1) IMPOSITION OF TAX.—On tobacco products
and cigarette papers and tubes manufactured in or
imported into the United States which are removed
before October 1, 1995, and held on such date for
sale by any person, there is hereby imposed a tax in
an amount equal to the excess 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 or 7652 of such Code on such
article.
(2) AUTHORITY TO EXEMPT CIGARETTES HELD
IN VENDING MACHINES.—To the extent provided in
regulations prescribed by the Secretary, no tax shall
be imposed by paragraph (1) on cigarettes held for
retail sale on October 1, 1995, by any person in any
vending machine. If the Secretary provides such a
benefit with respect to any person, the Secretary
may reduce the $500 amount in paragraph (3) with
respect to such person.
(3) 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) for which such person is liable.
(4) LIABILITY FOR TAX AND METHOD OF PAY-
MENT.—
(A) LIABILITY FOR TAX.—A person hold-
ing on October 1, 1995, articles to which any
tax imposed by paragraph (1) applies shall be
liable for such tax.
(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 December 31, 1995.
(5) ARTICLES
IN
FOREIGN
TRADE
ZONES.—
Notwithstanding the Act of June 18, 1934 (48 Stat.
998, 19 U.S.C. 81a) and any other provision of law,
any article which is located in a foreign trade zone
on October 1, 1995, shall be subject to the tax im-
posed 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 a customs officer pursuant to
the 2d proviso of such section 3(a).
(6) DEFINITIONS.—For purposes of this sub-
section:
(A) IN GENERAL.—Terms used in this sub-
section which are also used in section 5702 of
the Internal Revenue Code of 1986 shall have
the respective meanings such terms have in