I
103D CONGRESS
1ST SESSION
H. R. 592
To amend the Internal Revenue Code of 1986 to increase to 32 cents per
pack the Federal excise tax on cigarettes and to provide that the revenues
from the additional tax shall be deposited in the Federal Hospital Insur-
ance Trust Fund under the Social Security Act.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 26, 1993
Mr. JACOBS 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 increase
to 32 cents per pack the Federal excise tax on cigarettes
and to provide that the revenues from the additional
tax shall be deposited in the Federal Hospital Insurance
Trust Fund under the Social Security Act.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. INCREASE IN FEDERAL EXCISE TAX ON ALL
CIGARETTES.
(a) IN GENERAL.—Subsection (b) of section 5701 of
the Internal Revenue Code of 1986 (relating to imposition
of tax on cigarettes) is amended—
(1) by striking ‘‘$12 per thousand ($10 per
thousand on cigarettes removed during 1991 or
1992)’’ in paragraph (1) and inserting ‘‘$16 per
thousand’’, and
(2) by striking ‘‘$25.20 per thousand ($21 per
thousand on cigarettes removed during 1991 or
1992)’’ in paragraph (2) and inserting ‘‘$33.60’’.
(b) FLOOR STOCKS.—
(1) IMPOSITION OF TAX.—On cigarettes manu-
factured in or imported into the United States which
are removed before October 1, 1993, and held on
such date for sale by any person, there shall be im-
posed the following taxes:
(A) SMALL
CIGARETTES.—On cigarettes,
weighing not more than 3 pounds per thousand,
$4 per thousand; and
(B) LARGE
CIGARETTES.—On cigarettes,
weighing more than 3 pounds per thousand,
$8.40 per thousand; except that, if more than
61⁄2 inches in length, they shall be taxable at
the rate prescribed for cigarettes weighing not
more than 3 pounds per thousand, counting
each 23⁄4 inches, or fraction thereof, of the
length of each as one cigarette.
(2) EXCEPTION
FOR
CERTAIN
AMOUNTS
OF
CIGARETTES.—
(A) IN
GENERAL.—No tax shall be im-
posed by paragraph (1) on cigarettes held on
any tax-increase date by any person if—
(i) the aggregate number of cigarettes
held by such person on such date does not
exceed 30,000, and
(ii) such person submits to the Sec-
retary (at the time and in the manner re-
quired by the Secretary) such information
as the Secretary shall require for purposes
of this subparagraph.
For purposes of this subparagraph, in the case
of cigarettes measuring more than 61⁄2 inches
in length, each 23⁄4 inches (or fraction thereof)
of the length of each shall be counted as one
cigarette.
(B) AUTHORITY TO EXEMPT CIGARETTES
HELD IN VENDING MACHINES.—To the extent
provided in regulations prescribed by the Sec-
retary, no tax shall be imposed by paragraph
(1) on cigarettes held for retail sale on any tax-
increase date by any person in any vending ma-
chine. If the Secretary so provides with respect
to any person, the Secretary may reduce the
30,000 amount in subparagraph (A) and the
$60 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 $60. 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 cigarettes on October 1, 1993, 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 March 31, 1994.
(5) DEFINITIONS.—For purposes of this sub-
section—
(A) CIGARETTE.—The term ‘‘cigarette’’
shall have the meaning given to such term by
subsection (b) of section 5702 of the Internal
Revenue Code of 1986.
(B) SECRETARY.—The term ‘‘Secretary’’
means the Secretary of the Treasury or his
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.
(c) EFFECTIVE DATE.—The amendments made by
subsection (a) shall apply to cigarettes removed after
September 30, 1993.
SEC. 2. TRANSFER OF ADDITIONAL REVENUES TO FEDERAL
HOSPITAL INSURANCE TRUST FUND.
(a) IN GENERAL.—There are hereby appropriated for
deposit into the Federal Hospital Insurance Trust Fund
established under section 1817(a) of the Social Security
Act amounts determined by the Secretary of the Treasury
or his delegate to be equivalent to—
(1) the excess of the amount of the taxes re-
ceived in the Treasury under section 5701(b) of the
Internal Revenue Code of 1986 over the amount
which would be so received if section 1 of this Act
had not been enacted, reduced by
(2) the amount of credits or payments allowable
under such Code which are properly chargeable
against the amount of such excess.
(b) METHOD OF TRANSFER.—The amounts appro-
priated by subsection (a) shall be transferred at least
monthly from the general fund of the Treasury on the
basis of estimates made by the Secretary of the Treasury
or his delegate of the amounts referred to in subsection
(a) received in the Treasury. Proper adjustments shall be
made in the amounts subsequently transferred to the ex-
tent prior estimates were in excess of or less than the
amounts required to be transferred.
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