I
103D CONGRESS
1ST SESSION
H. R. 1246
To amend the Internal Revenue Code of 1986 to increase excise taxes on
cigarettes and other tobacco and tobacco-related products and to use
the increased revenues to expand Medicaid eligibility, and for other
purposes.
IN THE HOUSE OF REPRESENTATIVES
MARCH 8, 1993
Mr. ANDREWS
of Texas (for himself, Mr. STARK, Mr. LEVIN, Mr.
MCDERMOTT, Mr. SYNAR, and Mr. HUFFINGTON) introduced the follow-
ing bill; which was referred jointly to the Committees on Ways and
Means, Energy and Commerce, and Agriculture
A BILL
To amend the Internal Revenue Code of 1986 to increase
excise taxes on cigarettes and other tobacco and tobacco-
related products and to use the increased revenues to
expand Medicaid eligibility, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Tobacco Health Tax Act of 1993’’.
(b) AMENDMENT OF 1986 CODE.—Except as other-
wise expressly provided, whenever in this Act an amend-
ment or repeal is expressed in terms of an amendment
to, or repeal of, a section or other provision, the reference
shall be considered to be made to a section or other provi-
sion of the Internal Revenue Code of 1986.
SEC. 2. INCREASE IN EXCISE TAXES ON TOBACCO PROD-
UCTS.
(a) CIGARS.—Subsection (a) of section 5701 is
amended—
(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
‘‘$4.69 per thousand’’, and
(2) by striking ‘‘equal to’’ and all that follows
in paragraph (2) and inserting ‘‘equal to 53.17 per-
cent of the price for which sold but not more than
$120 per thousand.’’
(b) CIGARETTES.—Subsection (b) of section 5701 is
amended—
(1) by striking ‘‘$12 per thousand ($10 per
thousand on cigarettes removed during 1991 or
1992)’’ in paragraph (1) and inserting ‘‘$50.00 per
thousand’’,
(2) by striking ‘‘$25.20 per thousand ($21 per
thousand on cigarettes removed during 1991 or
1992)’’ in paragraph (2) and inserting ‘‘$105 per
thousand’’, and by adding at the end thereof the fol-
lowing new paragraph:
‘‘(3) ADDITIONAL TAX ON PACKS CONTAINING
FEWER
THAN
CIGARETTES.—On any pack of
cigarettes containing fewer than 20 cigarettes, the
excess of $1 over the tax imposed by paragraphs (1)
and (2) on the cigarettes in such pack.’’
(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 ‘‘3.18 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 ‘‘6.25 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 ‘‘$10’’, and
(2) by striking ‘‘12 cents (10 cents on chewing
tobacco removed during 1991 or 1992)’’ in para-
graph (2) and inserting ‘‘$4.80’’.
(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
‘‘$2.82’’.
(g) IMPOSITION OF TAX ON CIGARETTE TOBACCO.—
(1) IN GENERAL.—Section 5701 of such Code
is amended by redesignating subsection (g) as sub-
section (h) and by inserting after subsection (f) the
following new subsection:
‘‘(g) CIGARETTE TOBACCO.—On cigarette tobacco,
manufactured in or imported into the United States, there
shall be imposed a tax of $22.40 per pound (and a propor-
tionate tax at the like rate on all fractional parts of a
pound).’’
(2) CIGARETTE
TOBACCO
DEFINED.—Section
5702 of such Code is amended by adding at the end
thereof the following new subsection:
‘‘(p) CIGARETTE TOBACCO.—The term ‘cigarette to-
bacco’ means any tobacco which, because of its appear-
ance, type, packaging, or labeling, is suitable for use and
likely to offered to, or purchased by, consumers as tobacco
to be rolled into a cigarette.’’
(3) CONFORMING AMENDMENTS.—
(A) Subsection (c) of section 5702 of such
Code is amended by striking ‘‘and pipe to-
bacco’’ and inserting ‘‘pipe tobacco, and ciga-
rette tobacco’’.
(B) Subsection (d) of section 5702 of such
Code is amended by striking ‘‘or pipe tobacco’’
and inserting ‘‘pipe tobacco, or cigarette to-
bacco’’.
(h) INFLATION ADJUSTMENT
OF TOBACCO TAX
RATES.—Section 5701 is amended by adding at the end
thereof the following new subsection:
‘‘(i) INFLATION ADJUSTMENT.—In the case of arti-
cles removed in any calendar year after 1993, each dollar
amount contained in this subsection shall be increased by
an amount equal to—
‘‘(1) such dollar amount, multiplied by
‘‘(2) the greater of—
‘‘(A) the cost-of-living adjustment deter-
mined under section 1(f)(3) for the calendar
year in which the removal occurs by substitut-
ing ‘calendar year 1992’ for ‘calendar year
1989’ in subparagraph (B) thereof, or
‘‘(B) the cost-of-living adjustment which
would be determined under subparagraph (A) if
only changes in the tobacco and smoking prod-
ucts component of the Consumer Price Index
(as defined in section 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.’’
(i) EFFECTIVE DATE.—The amendments made by
this section shall apply with respect to articles removed
after December 31, 1993.
(j) FLOOR STOCK TAXES.—
(1) IMPOSITION OF TAX.—On tax-increased ar-
ticles manufactured in or imported into the United
States which are removed before January 1, 1994,
and held on such date for sale by any person, there
shall be imposed the following taxes:
(A) SMALL CIGARS.—On cigars, weighing
not more than 3 pounds per thousand, $3.565
per thousand.
(B) LARGE CIGARS.—On cigars weighing
more than 3 pounds per thousand, 40.42 per-
cent of the wholesale price, but not more than
$120 per thousand.
(C) SMALL
CIGARETTES.—On cigarettes,
weighing not more than 3 pounds per thousand,
$38 per thousand.
(D) LARGE
CIGARETTES.—On cigarettes
weighing more than 3 pounds per thousand,
$79.80 per thousand; except that, if more than