‘‘(3) SMOKELESS TOBACCO SOLD IN DISCRETE 
SINGLE-USE
UNITS.—On discrete single-use units, 
$100.66 per thousand.’’. 
(2) Section 5702(m) of such Code is amend-
ed— 
(A) in paragraph (1), by striking ‘‘or chew-
ing tobacco’’ and inserting ‘‘, chewing tobacco, 
or 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, made from, or derived from tobacco or nico-
tine 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.’’. 
(d) TAX PARITY FOR SMALL CIGARS.—Paragraph 
(1) of section 5701(a) of the Internal Revenue Code of 
1986 is amended by striking ‘‘$50.33’’ and inserting 
‘‘$100.66’’. 
(e) TAX PARITY FOR LARGE CIGARS.— 
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(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 the fol-
lowing: ‘‘$49.56 per pound and a proportionate tax 
at the like rate on all fractional parts of a pound but 
not less than 10.066 cents per cigar.’’. 
(2) GUIDANCE.—The Secretary of the Treas-
ury, or the Secretary’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. 
(f) TAX PARITY
FOR ROLL-YOUR-OWN TOBACCO 
AND CERTAIN PROCESSED TOBACCO.—Subsection (o) of 
section 5702 of the Internal Revenue Code of 1986 is 
amended by inserting ‘‘, and includes processed tobacco 
that is removed for delivery or delivered to a person other 
than a person with a permit provided under section 5713, 
but does not include removals of processed tobacco for ex-
portation’’ after ‘‘wrappers thereof’’. 
(g) CLARIFYING TAX RATE FOR OTHER TOBACCO 
PRODUCTS.— 
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(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 
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 
later of the date of the enactment of this Act or 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. 
(h) CLARIFYING DEFINITION OF TOBACCO PROD-
UCTS.— 
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(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).’’. 
(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’’. 
(i) INCREASING TAX ON CIGARETTES.— 
(1) SMALL
CIGARETTES.—Section 5701(b)(1) 
of such Code is amended by striking ‘‘$50.33’’ and 
inserting ‘‘$100.66’’. 
(2) LARGE
CIGARETTES.—Section 5701(b)(2) 
of such Code is amended by striking ‘‘$105.69’’ and 
inserting ‘‘$211.38’’. 
(j) TAX RATES ADJUSTED FOR INFLATION.—Section 
5701 of such Code, as amended by subsection (g), is 
amended by adding at the end the following new sub-
section: 
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‘‘(j) INFLATION ADJUSTMENT.— 
‘‘(1) IN GENERAL.—In the case of any calendar 
year beginning after 2021, the dollar amounts pro-
vided under this chapter shall each be increased by 
an amount equal to— 
‘‘(A) such dollar amount, multiplied by 
‘‘(B) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar 
year, determined by substituting ‘calendar year 
2020’ for ‘calendar year 2016’ in subparagraph 
(A)(ii) 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.’’. 
(k) FLOOR STOCKS TAXES.— 
(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 
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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. 
(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. 
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(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 first proviso of 
section 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 second proviso of such section 3(a). 
(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 
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increase in any tobacco product excise tax rate 
pursuant to the amendments made by this sec-
tion (other than subsection (j) 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 
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. 
(l) EFFECTIVE DATES.— 
(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 
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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 (c)(1)(C), (c)(2), and (f) 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 (e) shall apply to articles removed after 
December 31, 2021. 
(4) OTHER TOBACCO PRODUCTS.—The amend-
ments made by subsection (g)(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 
final regulations establishing the level of tax for 
such product. 
Æ 
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