Title: E-Cigarette Tax Parity Act
Policy area: Taxation

Summary:
E-Cigarette Tax Parity Act
This bill amends the Internal Revenue Code to provide for the taxation of electronic cigarettes and alternative nicotine products at rates applicable to other tobacco products. An "alternative nicotine product" is defined as any product containing nicotine which is suitable for and likely to be offered to, or purchased by, a consumer for the inhalation, ingestion, absorption, or consumption of nicotine, but does not include tobacco, processed tobacco, cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own tobacco, or any product approved by the Food and Drug Administration for sale as a tobacco cessation product.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2463 Introduced in Senate (IS)]

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116th CONGRESS
  1st Session
                                S. 2463

 To amend the Internal Revenue Code of 1986 to provide for regulation 
    and taxation of electronic cigarettes and alternative nicotine 
                               products.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 11, 2019

   Mr. Wyden (for himself, Mrs. Feinstein, Mr. Reed, Mr. Carper, Ms. 
  Stabenow, Mr. Cardin, Mr. Whitehouse, Mr. Udall, Mrs. Shaheen, Mr. 
Merkley, Mr. Bennet, Mr. Coons, Mr. Heinrich, Mr. King, Mr. Markey, Mr. 
  Van Hollen, Ms. Hassan, Ms. Smith, and Mrs. Murray) introduced the 
 following bill; which was read twice and referred to the Committee on 
                                Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to provide for regulation 
    and taxation of electronic cigarettes and alternative nicotine 
                               products.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``E-Cigarette Tax Parity Act''.

SEC. 2. REGULATION AND TAXATION OF ELECTRONIC CIGARETTES AND 
              ALTERNATIVE NICOTINE PRODUCTS.

    (a) Imposition, Rate, and Attachment of Tax.--Section 5701 of the 
Internal Revenue Code of 1986 is amended--
            (1) by redesignating subsection (h) as subsection (i), and
            (2) by inserting after subsection (g) the following new 
        subsection:
    ``(h) Alternative Nicotine Products.--
            ``(1) In general.--On alternative nicotine products, 
        manufactured in or imported into the United States, there shall 
        be imposed a tax equal to the applicable dollar amount per gram 
        of nicotine (and a proportionate tax at the like rate on all 
        fractional parts of a gram) contained in such product.
            ``(2) Applicable dollar amount.--For purposes of this 
        subsection, the applicable dollar amount shall be equal to--
                    ``(A) $50.33, or
                    ``(B) for any specified class of alternative 
                nicotine products which is identified pursuant to 
                regulations prescribed by the Secretary, such amount as 
                may be determined by the Secretary (in consultation 
                with the Secretary of Health and Human Services) to be 
                equivalent to the rate of tax imposed on cigarettes 
                under subsection (b)(1) on an estimated per use basis 
                for such class of alternative nicotine products.''.
    (b) Definitions.--Section 5702 of the Internal Revenue Code of 1986 
is amended--
            (1) in subsection (c), by striking ``and roll-your-own 
        tobacco'' and inserting ``roll-your-own tobacco, and 
        alternative nicotine products'',
            (2) in subsection (d), by striking ``or roll-your-own 
        tobacco'' each place it appears and inserting ``roll-your-own 
        tobacco, or alternative nicotine products'', and
            (3) by adding at the end the following new subsection:
    ``(q) Alternative Nicotine Product.--
            ``(1) In general.--Subject to paragraph (2), the term 
        `alternative nicotine product' means any product containing 
        nicotine which is--
                    ``(A) suitable for and likely to be offered to, or 
                purchased by--
                            ``(i) a consumer for the inhalation, 
                        ingestion, absorption, or consumption of 
                        nicotine, or
                            ``(ii) a person for the production of a 
                        product described in clause (i), and
                    ``(B) sold, transferred, or delivered to any person 
                not possessing a permit provided for in section 5713(a) 
                as a manufacturer, importer, or export warehouse 
                proprietor.
            ``(2) Exceptions.--Pursuant to regulations prescribed by 
        the Secretary, the term `alternative nicotine product' shall 
        not include--
                    ``(A) tobacco, processed tobacco, cigars, 
                cigarettes, smokeless tobacco, pipe tobacco, or roll-
                your-own tobacco, or
                    ``(B) any product which--
                            ``(i) has been approved by the Food and 
                        Drug Administration for sale as a tobacco 
                        cessation product or for other therapeutic 
                        purposes, and
                            ``(ii) is marketed and sold solely for a 
                        purpose approved as described in clause (i).''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date that is 180 days after the date of the enactment of 
this Act.
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