CHAPTER 52-TOBACCO, CIGARS, CIGARETTES, AND CIGARETTE PAPERS AND TUBES SUBCHAPTER B. SUBCHAPTER A. Definitions; rate and payment of tax; exemption from tax; and refund and drawback of tax. Qualification requirements for manufacturers of tobacco products and cigarette papers and tubes, export warehouse proprietors, and dealers in tobacco materials. SUBCHAPTER C. Operations by manufacturers and importers of tobacco products and cigarette papers and tubes and export warehouse proprietors. SUBCHAPTER D. Operations by dealers in tobacco materials. Records of manufacturers of tobacco products and cigarette papers and tubes, export warehouse proprietors, and dealers in tobacco materials. SUBCHAPTER F. General provisions. SUBCHAPTER G. Penalties and forfeitures. Subchapter A-Definitions; Rate and Payment of Tax; Exemption From Tax; and Refund and Drawback of Tax Sec. 5701. Rate of tax. Sec. 5703. Liability for tax and method of payment. Sec. 5704. Exemption from tax. Sec. 5705. Refund or allowance of tax. Sec. 5706. Drawback of tax. Sec. 5707. Floor stocks refund on cigarettes. Sec. 5708. Losses caused by disaster. SEC. 5701. RATE OF TAX. (a) TOBACCO. On tobacco, manufactured in or imported into the United States, there shall be imposed a tax of 10 cents per pound (b) CIGARS.-On cigars, manufactured in or imported into the United States, there shall be imposed the following taxes: (1) SMALL CIGARS.-On cigars, weighing not more than 3 pounds per thousand, 75 cents per thousand; (2) LARGE CIGARS.-On cigars, weighing more than 3 pounds per thousand; (A) If removed to retail at not more than 2%1⁄2 cents each, $2.50 per thousand; (B) If removed to retail at more than 2%1⁄2 cents each and not more than 4 cents each, $3 per thousand; (C) If removed to retail at more than 4 cents each and not more than 6 cents each, $4 per thousand; (D) If removed to retail at more than 6 cents each and not more than 8 cents each, $7 per thousand; (E) If removed to retail at more than 8 cents each and not more than 15 cents each, $10 per thousand; (F) If removed to retail at more than 15 cents each and not more than 20 cents each, $15 per thousand; (G) If removed to retail at more than 20 cents each, $20 per thousand. In determining the retail price, for tax purposes, regard shall be had to the ordinary retail price of a single cigar in its principal market, exclusive of any State or local taxes imposed on cigars as a commodity. Cigars not exempt from tax under this chapter which are removed but not intended for sale shall be taxed at the same rate as similar cigars removed for sale. (c) CIGARETTES.-On cigarettes, manufactured in or imported into the United States, there shall be imposed the following taxes: (1) SMALL CIGARETTES.-On cigarettes, weighing not more than 3 pounds per thousand, $4 per thousand until July 1, 1961, and $3.50 per thousand on and after July 1, 1961; (2) LARGE CIGARETTES.-On cigarettes, weighing more than 3 pounds per thousand, $8.40 per thousand; except that, if more than 6%1⁄2 inches in length, they shall be taxable at the rate prescribed for cigarettes weighing not more than 3 pounds per thousand, counting each 2% inches, or fraction thereof, of the length of each as one cigarette. (d) CIGARETTE PAPERS.-On each book or set of cigarette papers containing more than 25 papers, manufactured in or imported into the United States, there shall be imposed a tax of 1⁄2 cent for each 50 papers or fractional part thereof; except that, if cigarette papers measure more than 61⁄2 inches in length, they shall be taxable at the rate prescribed, counting each 24 inches, or fraction thereof, of the length of each as one cigarette paper. (e) CIGARETTE TUBES.-On cigarette tubes, manufactured in or imported into the United States, there shall be imposed a tax of 1 cent for each 50 tubes or fractional part thereof, except that if cigarette tubes measure more than 6%1⁄2 inches in length, they shall be taxable at the rate prescribed, counting each 24 inches, or fraction thereof, of the length of each as one cigarette tube. (f) IMPORTED TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES. The taxes imposed by this section on tobacco products and cigarette papers and tubes imported into the United States shall be in addition to any import duties imposed on such articles. SEC. 5702. DEFINITIONS. When used in this chapter (a) MANUFACTURED TOBACCO.-"Manufactured tobacco" means tobacco (other than cigars and cigarettes) prepared, processed, manipulated, or packaged, for removal, or merely removed, for consumption by smoking or for use in the mouth or nose, and any tobacco (other than cigars and cigarettes), not exempt from tax under this chapter, sold or delivered to any person contrary to this chapter or regulations prescribed thereunder. (b) CIGAR.-"Cigar" means any roll of tobacco wrapped in tobacco. (c) CIGARETTE.-"Cigarette" means any roll of tobacco, wrapped in paper or any substance other than tobacco. (d) TOBACCO PRODUCTS.-"Tobacco products" means manufactured tobacco, cigars, and cigarettes. (e) MANUFACTURER OF TOBACCO PRODUCTS.-"Manufacturer of tobacco products" means any person who manufactures cigars or cigarettes, or who prepares, processes, manipulates, or packages, for removal, or merely removes, tobacco (other than cigars and cigarettes) for consumption by smoking or for use in the mouth or nose, or who sells or delivers any tobacco (other than cigars and cigarettes) contrary to this chapter or regulations prescribed thereunder. The term "manufacturer of tobacco products" shall not include (1) a person who in any manner prepares tobacco, or produces cigars or cigarettes, solely for his own personal consumption or use; or (2) a proprietor of a customs bonded manufacturing warehouse with respect to the operation of such warehouse; or (3) a farmer or grower of tobacco with respect to the sale of leaf tobacco of his own growth or raising, if it is in the condition as cured on the farm; or (4) a bona fide association of farmers or growers of tobacco with respect to sales of leaf tobacco grown by farmer or grower members, if the tobacco so sold is in the condition as cured on the farm, and if the association maintains records of all leaf tobacco, acquired or received and sold or otherwise disposed of, in such manner as the Secretary or his delegate shall by regulations prescribe. (f) CIGARETTE PAPER. "Cigarette paper" means paper, or any other material except tobacco, prepared for use as a cigarette wrapper. (g) CIGARETTE PAPERS.-"Cigarette papers" means taxable books or sets of cigarette papers. (h) CIGARETTE TUBE.-"Cigarette tube" means cigarette paper made into a hollow cylinder for use in making cigarettes. (i) MANUFACTURER OF CIGARETTE PAPERS AND TUBES.-"Manufacturer of cigarette papers and tubes" means any person who makes up cigarette paper into books or sets containing more than 25 papers each, or into tubes, except for his own personal use or consumption. (i) EXPORT WAREHOUSE.-"Export warehouse" means a bonded internal revenue warehouse for the storage of tobacco products and cigarette papers and tubes, upon which the internal revenue tax has not been paid, for subsequent shipment to a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States, or for consumption beyond the jurisdiction of the internal revenue laws of the United States. (k) EXPORT WAREHOUSE PROPRIETOR.-"Export warehouse proprietor" means any person who operates an export warehouse. (1) TOBACCO MATERIALS. "Tobacco materials" means tobacco other than manufactured tobacco, cigars, and cigarettes. (m) DEALER IN TOBACCO MATERIALS.-"Dealer in tobacco materials" means any person who receives and handles tobacco materials for sale, shipment, or delivery to another dealer in such materials, to a manufacturer of tobacco products, or to a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States, or who receives tobacco materials, other than stems and waste, for use by him in the production of fertilizer, insecticide, or nicotine. The term "dealer in tobacco materials" shall not include (1) an operator of a warehouse who stores tobacco materials solely for a qualified dealer in tobacco materials, for a qualified manufacturer of tobacco products, for a farmer or grower of tobacco, or for a bona fide association of farmers or growers of tobacco; or (2) a farmer or grower of tobacco with respect to the sale of leaf tobacco of his own growth or raising, or a bona fide association of farmers or growers of tobacco with respect to sales of leaf tobacco grown by farmer or grower members, if the tobacco so sold is in the condition as cured on the farm: Provided, That such association maintains records of all leaf tobacco acquired or received and sold or otherwise disposed of by the association, in such manner as the Secretary or his delegate shall by regulation prescribe; or (3) a person who buys leaf tobacco on the floor of an auction warehouse, or who buys leaf tobacco from a farmer or grower, and places the tobacco on the floor of such a warehouse, or who purchases and sells warehouse receipts without taking physical possession of the tobacco covered thereby; or (4) a qualified manufacturer of tobacco products with respect to tobacco materials received by him under his bond as such a manufacturer. (n) REMOVAL OR REMOVE.-"Removal" or "remove" means the removal of tobacco products or cigarette papers or tubes from the factory or from internal revenue bond, as the Secretary or his delegate shall by regulation prescribe, or release from customs custody, and shall also include the smuggling or other unlawful importation of such articles into the United States. (0) IMPORTER.-"Importer" means any person in the United States to whom nontaxpaid tobacco products or cigarette papers or tubes manufactured in a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States are shipped or consigned; any person who removes cigars or cigarettes for sale or consumption in the United States from a customs bonded manufacturing warehouse; and any person who smuggles or otherwise unlawfully brings tobacco products or cigarette papers or tubes into the United States. SEC. 5703. LIABILITY FOR TAX AND Method of PAYMENT. (a) LIABILITY FOR TAX. (1) ORIGINAL LIABILITY.-The manufacturer or importer of tobacco products and cigarette papers and tubes shall be liable for the taxes imposed thereon by section 5701. (2) TRANSFER OF LIABILITY.-When tobacco products and cigarette papers and tubes are transferred, without payment of tax, pursuant to section 5704, the liability for tax shall be transferred in accordance with the provisions of this paragraph. When tobacco products and cigarette papers and tubes are transferred between the bonded premises of manufacturers and export warehouse proprietors, the transferee shall become liable for the tax upon receipt by him of such articles, and the transferor shall thereupon be relieved of his liability for such tax. When tobacco products and cigarette papers and tubes are released in bond from customs custody for transfer to the bonded premises of a manufacturer of tobacco products or cigarette papers and tubes, the transferee shall become liable for the tax on such articles upon release from customs custody, and the importer shall thereupon be relieved of his liability for such tax. (b) METHOD OF PAYMENT OF TAX.-The taxes imposed by section. 5701 shall be determined at the time of removal of the tobacco prod |