[Congressional Record Volume 161, Number 23 (Wednesday, February 11, 2015)]
[Senate]
[Pages S927-S928]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DURBIN (for himself, Mr. Blumenthal, Mr. Reed, and Mr. 
        Brown):
  S. 450. A bill to amend the Internal Revenue Code of 1986 to provide 
tax rate parity among all tobacco products, and for other purposes; to 
the Committee on Finance.
  Mr. DURBIN. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                 S. 450

       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 ``Tobacco Tax Equity Act of 
     2015''.

     SEC. 2. ESTABLISHING EXCISE TAX EQUITY AMONG ALL TOBACCO 
                   PRODUCT TAX RATES.

       (a) Tax Parity for Pipe Tobacco and Roll-Your-Own 
     Tobacco.--Section 5701(f) of the Internal Revenue Code of 
     1986 is amended by striking ``$2.8311 cents'' and inserting 
     ``$24.78''.
       (b) Tax Parity for Smokeless Tobacco.--
       (1) Section 5701(e) of the Internal Revenue Code of 1986 is 
     amended--
       (A) in paragraph (1), by striking ``$1.51'' and inserting 
     ``$13.42'';
       (B) in paragraph (2), by striking ``50.33 cents'' and 
     inserting ``$5.37''; and

[[Page S928]]

       (C) by adding at the end the following:
       ``(3) Smokeless tobacco sold in discrete single-use 
     units.--On discrete single-use units, $50.33 per thousand.''.
       (2) Section 5702(m) of such Code is amended--
       (A) in paragraph (1), by striking ``or chewing tobacco'' 
     and inserting ``, chewing tobacco, or discrete single-use 
     unit'';
       (B) in paragraphs (2) and (3), by inserting ``that is not a 
     discrete single-use unit'' before the period in each such 
     paragraph;
       (C) by adding at the end the following:
       ``(4) Discrete single-use unit.--The term `discrete single-
     use unit' means any product containing tobacco 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.''.
       (c) Tax Parity for Large Cigars.--
       (1) In general.--Paragraph (2) of section 5701(a) of the 
     Internal Revenue Code of 1986 is amended by striking ``52.75 
     percent'' and all that follows through the period and 
     inserting the following: ``$24.78 per pound and a 
     proportionate tax at the like rate on all fractional parts of 
     a pound but not less than 5.033 cents per cigar.''.
       (2) Guidance.--The Secretary may issue guidance regarding 
     the appropriate method for determining the weight of large 
     cigars for purposes of calculating the applicable tax under 
     section 5701(a)(2) of the Internal Revenue Code of 1986.
       (d) Tax Parity for Roll-your-own Tobacco and Certain 
     Processed Tobacco.--Subsection (o) of section 5702 of the 
     Internal Revenue Code of 1986 is amended by inserting ``, and 
     includes processed tobacco that is removed for delivery or 
     delivered to a person other than a person with a permit 
     provided under section 5713, but does not include removals of 
     processed tobacco for exportation'' after ``wrappers 
     thereof''.
       (e) Clarifying Tax Rate for Other Tobacco Products.--
       (1) In general.--Section 5701 of the Internal Revenue Code 
     of 1986 is amended by adding at the end the following new 
     subsection:
       ``(i) Other Tobacco Products.--Any product not otherwise 
     described under this section that has been determined to be a 
     tobacco product by the Food and Drug Administration through 
     its authorities under the Family Smoking Prevention and 
     Tobacco Control Act shall be taxed at a level of tax 
     equivalent to the tax rate for cigarettes on an estimated per 
     use basis as determined by the Secretary.''.
       (2) Establishing per use basis.--For purposes of section 
     5701(i) of the Internal Revenue Code of 1986, not later than 
     12 months after the date that a product has been determined 
     to be a tobacco product by the Food and Drug Administration, 
     the Secretary of the Treasury (or the Secretary of the 
     Treasury's delegate) shall issue final regulations 
     establishing the level of tax for such product that is 
     equivalent to the tax rate for cigarettes on an estimated per 
     use basis.
       (f) Clarifying Definition of Tobacco Products.--
       (1) In general.--Subsection (c) of section 5702 of the 
     Internal Revenue Code of 1986 is amended to read as follows:
       ``(c) Tobacco Products.--The term `tobacco products' 
     means--
       ``(1) cigars, cigarettes, smokeless tobacco, pipe tobacco, 
     and roll-your-own tobacco, and
       ``(2) any other product subject to tax pursuant to section 
     5701(i).''.
       (2) Conforming amendments.--Subsection (d) of section 5702 
     of such Code is amended by striking ``cigars, cigarettes, 
     smokeless tobacco, pipe tobacco, or roll-your-own tobacco'' 
     each place it appears and inserting ``tobacco products''.
       (g) Tax Rates Adjusted for Inflation.--Section 5701 of such 
     Code is amended by adding at the end the following new 
     subsection:
       ``(i) Inflation Adjustment.--
       ``(1) In general.--In the case of any calendar year 
     beginning after 2015, the dollar amounts provided under this 
     chapter shall each be increased by an amount equal to--
       ``(A) such dollar amount, multiplied by
       ``(B) the cost-of-living adjustment determined under 
     section 1(f)(3) for the calendar year, determined by 
     substituting `calendar year 2014' for `calendar year 1992' in 
     subparagraph (B) thereof.
       ``(2) Rounding.--If any amount as adjusted under paragraph 
     (1) is not a multiple of $0.01, such amount shall be rounded 
     to the next highest multiple of $0.01.''.
       (h) Effective Dates.--
       (1) In general.--Except as provided in paragraphs (2) 
     through (4), the amendments made by this section shall apply 
     to articles removed (as defined in section 5702(j) of the 
     Internal Revenue Code of 1986) after the last day of the 
     month which includes the date of the enactment of this Act.
       (2) Discrete single-use units and processed tobacco.--The 
     amendments made by subsections (b)(1)(C), (b)(2), and (d) 
     shall apply to articles removed (as defined in section 
     5702(j) of the Internal Revenue Code of 1986) after the date 
     that is 6 months after the date of the enactment of this Act.
       (3) Large cigars.--The amendments made by subsection (c) 
     shall apply to articles removed after December 31, 2015.
       (4) Other tobacco products.--The amendments made by 
     subsection (e)(1) shall apply to products removed after the 
     last day of the month which includes the date that the 
     Secretary of the Treasury (or the Secretary of the Treasury's 
     delegate) issues final regulations establishing the level of 
     tax for such product.
                                 ______