[Congressional Record Volume 143, Number 93 (Friday, June 27, 1997)]
[Senate]
[Page S6763]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 SENATE RESOLUTION--104--RELATIVE TO THE TAX STATUS OF PAYMENTS IN THE 
                      TOBACCO LIABILITY SETTLEMENT

  Mr. HARKIN (for himself, Mr. Lautenberg, and Mr. Kennedy) submitted 
the following resolution, which was referred to the Committee on 
Finance:

                              S. Res. 104

       Resolved,
       Whereas the tobacco industry, State attorneys general, and 
     individual plaintiffs' attorneys have reached an agreement to 
     settle tobacco litigation in 40 States and the tobacco 
     industry has agreed to pay $368.5 billion over 25 years, most 
     of which would go to States;
       Whereas under the terms of this agreement, this payment 
     will be counted as a ``normal and necessary'' business 
     expense and will therefore be considered tax deductible for 
     Federal tax purposes, potentially requiring American 
     taxpayers to subsidize up to $147 billion of the settlement 
     payment; and
       Whereas while many of the details of the agreement will 
     require further examination and possible alteration, the 
     United States Senate should go on record stating its concern 
     about this provision's potential impact on federal revenues 
     and the deficit: Therefore be it
       Resolved, It is the sense of the Senate that to protect the 
     interests of the American taxpayer, any legislation 
     implementing the tobacco liability settlement shall prohibit 
     parties to the agreement from claiming Federal tax deductions 
     for these payments.

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