I
104TH CONGRESS
1ST SESSION
H. R. 2585
To amend the Internal Revenue Code of 1986 to increase the excise taxes
on smokeless tobacco to an amount equivalent to the tax on cigarettes
and to use the resulting revenues to fund a trust fund for programs
to reduce the use of smokeless tobacco.
IN THE HOUSE OF REPRESENTATIVES
NOVEMBER 6, 1995
Mrs. SCHROEDER (for herself, Mr. ACKERMAN, Mr. DURBIN, Mr. ROMERO-
BARCELO´, Mr. EVANS, Mr. LAFALCE, Mr. LIPINSKI, and Miss COLLINS
of Michigan) introduced the following bill; which was referred to the Com-
mittee on Ways and Means, and in addition to the Committee on Com-
merce, for a period to be subsequently determined by the Speaker, in
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned
A BILL
To amend the Internal Revenue Code of 1986 to increase
the excise taxes on smokeless tobacco to an amount
equivalent to the tax on cigarettes and to use the result-
ing revenues to fund a trust fund for programs to reduce
the use of smokeless tobacco.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Smokeless Tobacco
Consumption Reduction and Education Act of 1995’’.
SEC. 2. INCREASE IN TAXES ON SMOKELESS TOBACCO
PRODUCTS.
(a) IN GENERAL.—
(1) SNUFF.—Paragraph (1) of section 5701(e)
of the Internal Revenue Code of 1986 (relating to
rate of tax on smokeless tobacco) is amended by
striking ‘‘36 cents (30 cents on snuff removed dur-
ing 1991 or 1992)’’ and inserting ‘‘$4.25’’.
(2) CHEWING TOBACCO.—Paragraph (2) of sec-
tion 5701(e) of such Code is amended by striking
‘‘12 cents (10 cents on chewing tobacco removed
during 1991 or 1992)’’ and inserting ‘‘$1.12’’.
(3) ADJUSTMENT FOR SUBSEQUENT INCREASES
IN CIGARETTE TAX.—Subsection (e) of section 5701
of such Code is amended by adding at the end there-
of the following new sentences:
‘‘If after the date of the enactment of this sentence there
is an increase in the rate of the tax imposed under sub-
section (b)(1), effective on and after the date on which
such increase takes effect, the rate of the tax imposed by
paragraph (1) of this subsection shall be an amount per
pound (as determined by the Secretary) which is the same
percentage of the national average wholesale price per
pound for snuff (as so determined) as the tax imposed
by subsection (b)(1) is of the national average wholesale
price for cigarettes (as so determined). A similar adjust-
ment shall be made to the rate of the tax imposed under
paragraph (2) of this subsection.’’
(b) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act.
(c) FLOOR STOCKS.—
(1) IMPOSITION OF TAX.—On snuff and chew-
ing tobacco manufactured in or imported into the
United States which is removed before the date of
the enactment of this Act, and held on such date for
sale by any person, there shall be imposed the fol-
lowing taxes:
(A) SNUFF.—On snuff, $3.87 per pound
and a proportionate tax at the like rate on all
fractional parts of a pound.
(B) CHEWING TOBACCO.—On chewing to-
bacco, $1.00 per pound and a proportionate tax
at the like rate on all fractional parts of a
pound.
(2) LIABILITY FOR TAX AND METHOD OF PAY-
MENT.—
(A) LIABILITY FOR TAX.—A person hold-
ing snuff and chewing tobacco on the date of
the enactment of this Act to which any tax im-
posed by paragraph (1) applies shall be liable
for such tax.
(B) METHOD OF PAYMENT.—The tax im-
posed by paragraph (1) shall be treated as a
tax imposed under section 5701 of the Internal
Revenue Code of 1986 and shall be due and
payable on the day 45 days after the date of
the enactment of this Act, in the same manner
as the tax imposed under such section is pay-
able with respect to snuff and chewing tobacco,
removed on the date of the enactment of this
Act.
(3) SNUFF AND CHEWING TOBACCO.—For pur-
poses of this subsection, the terms ‘‘snuff’’ and
‘‘chewing tobacco’’ have the respective meanings
given to such terms by section 5702 of the Internal
Revenue Code of 1986.
(4) EXCEPTION
FOR
RETAIL
STOCKS.—The
taxes imposed by paragraph (1) shall not apply to
snuff and chewing tobacco in retail stocks held on
the date of the enactment of this Act at the place
where intended to be sold at retail.
(5) FOREIGN TRADE ZONES.—Notwithstanding
the Act of June 18, 1934 (19 U.S.C. 81a et seq.)
or any other provision of law—
(A) snuff and chewing tobacco—
(i) on which taxes imposed by Federal
law are determined, or customs duties are
liquidated, by a customs officer pursuant
to a request made under the first proviso
of section 3(a) of the Act of June 18, 1934
(19 U.S.C. 81c(a)) before the date of the
enactment of this Act, and
(ii) which are entered into the cus-
toms territory of the United States on or
after such date of enactment, from a for-
eign trade zone, and
(B) snuff and chewing tobacco which—
(i) are placed under the supervision of
a customs officer pursuant to the provi-
sions of the second proviso of section 3(a)
of the Act of June 18, 1934 (19 U.S.C.
81c(a)) before such date of enactment, and
(ii) are entered into the customs terri-
tory of the United States on or after such
date of enactment, from a foreign trade
zone,
shall be subject to the tax imposed by paragraph (1)
and such snuff and chewing tobacco shall, for pur-
poses of paragraph (1), be treated as being held on
such date of enactment for sale.
SEC. 3. ESTABLISHMENT OF TRUST FUND.
(a) IN GENERAL.—Subchapter A of chapter 98 of the
Internal Revenue Code of 1986 (relating to Trust Fund
Code) is amended by adding at the end the following new
section:
‘‘SEC. 9512. SMOKELESS TOBACCO EDUCATION AND PRE-
VENTION TRUST FUND.
‘‘(a) CREATION OF TRUST FUND.—There is estab-
lished in the Treasury of the United States a trust fund
to be known as the ‘Smokeless Tobacco Education and
Prevention Trust Fund’ (hereafter referred to in this sec-
tion as the ‘Trust Fund’), consisting of such amounts as
may be appropriated or credited to the Trust Fund as pro-
vided in this section or section 9602(b).
‘‘(b) TRANSFERS TO TRUST FUND.—The Secretary
shall transfer to the Trust Fund an amount equivalent
to the 10 percent of the net increase in revenues received
in the Treasury by reason of the amendments made to
section 5701 by section 2(a), and the provisions contained
in section 2(c), of the Smokeless Tobacco Consumption
Reduction and Education Act of 1995, as estimated by
the Secretary.
‘‘(c) EXPENDITURES FROM TRUST FUND.—Amounts
in the Trust Fund shall be available, as provided in appro-
priation Acts, for programs of public education regarding
the risks of smokeless tobacco and other programs to re-
duce the consumption of smokeless tobacco.’’
(b) CLERICAL AMENDMENT.—The table of sections
for such subchapter A is amended by adding at the end
the following new item:
‘‘Sec. 9512. Smokeless Tobacco Education and Prevention Trust
Fund.’’
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