Sponsors (4)
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Amends the rate-of-tax provisions to change tax rates and add new tax provisions including a tax on 'taxable nicotine', and adds an inflation adjustment subsection. Also updates rates and treatment for various tobacco product categories and adds provisions related to floor stocks taxes.
Modifies definitions in the chapter: adds a definition for 'discrete single-use unit', adds a new subsection defining 'taxable nicotine' with an FDA-approval exception and rulemaking authority, treats taxable nicotine as a tobacco product in subsection (c), and adds a new subsection defining 'manufacturer of taxable nicotine'. Also strikes subsection (l) and makes related conforming changes.
Raises federal excise taxes on tobacco and nicotine products and makes the tax rules consistent across product types. It adds a new tax on nicotine that is extracted, concentrated, or synthesized (such as in many vaping liquids and oral nicotine pouches), clarifies treatment of certain single‑use smokeless products, and imposes a one‑time “floor stocks” tax on inventories when the higher rates take effect. After 2026, all tobacco and nicotine excise tax amounts are adjusted for inflation. The measure sets staggered effective dates and transition rules to give businesses time to comply, and it authorizes the Treasury Department and other agencies to issue regulations and guidance to implement and enforce the changes.
Increase tax parity for roll-your-own tobacco by replacing the cited tax figure with $49.56. This changes the tax amount applied to roll-your-own tobacco.
Increase tax parity for pipe tobacco by replacing the cited tax figure with $49.56. This changes the tax amount applied to pipe tobacco.
Amend smokeless tobacco tax rules: (A) amend specified paragraph (text shows numeric edits), (B) amend another paragraph (text shows numeric edits), and (C) add a new per‑thousand rate for smokeless tobacco sold in discrete single‑use units of $100.66 per 1,000 units.
Define the term “discrete single-use unit” to mean any tobacco- or nicotine-derived product that (A) is not intended to be smoked, and (B) is in the form of a lozenge, tablet, pill, pouch, dissolvable strip, or other discrete single‑use or single‑dose unit. This definition is added to section 5702.
Amend tax parity for small cigars by replacing a cited tax figure (text shows edits). (Text includes an amendment to section 5701(a) to change the tax cited for small cigars.)
Referred to the House Committee on Ways and Means.
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Introduced March 3, 2025 by S. Raja Krishnamoorthi · Last progress March 3, 2025
Referred to the House Committee on Ways and Means.
Introduced in House