PROPOSED REGULATIONS CONCERNING THE MANUFACTURE OF TOBACCO
PRODUCTS AND CIGARETTE PAPERS AND TUBES
Manufacturers of tobacco products
and cigarette papers and tubes:
Purpose. This industry circular is to call your attention to
notices of proposed rule making with respect to regulations in 26
CFR Part 270, entitled "Manufacture of Tobacco Products," and in
26 CFR Part 285, entitled "Manufacture of Cigarette Papers and Tubes,"
published in the Federal Register on June 7, 1961 (26 F. R. 5046 and
5071).
Background. As enacted by Congress, the Excise Tax Technical
Changes Act of 1958 (Public Law 85-859, 72 Stat. 1275) contemplated
the eventual elimination from regulatory provisions of the require-
ment for separate qualification and factory premises for the produc-
tion of cigars and cigarettes apart from those for the production
of manufactured tobacco. Since the enactment of that bill, studies
have been made and means developed whereby this change and certain
other improvements are proposed to be effected. Provisions relating
to the importation of tobacco products and cigarette papers and tubes
(as well as tobacco materials) are being prescribed in a new Part 275,
also published as a notice of proposed rule making on June 7, 1961.
Effect of Proposed Regulations. The proposed regulations in Part
270 would institute the tobacco products factory concept and eliminate
the requirements for separate premises, permits, bonds, records, re-
ports, inventories, and tax returns, by abolishing the requirement
for separation of manufacturing facilities for the production of
manufactured tobacco from those facilities for cigars and cigarettes.
The proposed regulations would also make optional the supervision of
the disposition of tobacco products withdrawn from the market and the
verification of schedules prepared in connection with claims for re-
fund or allowance of tax; would authorize the assistant regional
commissioner to waive the filing of a tax return for any period for
which tax is not due or payable; would clarify the standards and
procedures for removing tobacco products for experimental purposes;
would permit the use of an alternate method or procedure in lieu of
a method or procedure prescribed, and would permit other businesses
within the factory and the filing of a blanket bond by a manufacturer
who operates more than one factory in the same region.
The proposed amendments to Part 285 would remove all provisions
relating to the importation of cigarette papers and tubes from that
part; would prescribe the use of certain forms in connection with
claims; and would make conforming, clarifying, and editorial changes
in the regulations.
Comments or suggestions. Comments or suggestions may be sub-
mitted in writing to the Director, Alcohol and Tobacco Tax Division,
Internal Revenue Service, Washington 25, D. C., within 30 days from
the date of publication in the Federal Register of the notice of
proposed rule making. Any person, submitting such comments or sug-
gestions, may, in a similar manner, request an opportunity for a
public hearing. In such case, a notice of the time, place, and date
of the public hearing will be published in a later issue of the
Federal Register.
Inquiries. Inquiries in regard to this industry circular should
refer to its number and be addressed to the office of your assistant
regional commissioner (alcohol and tobacco tax).
Dwight E. Avis
Director, Alcohol and Tobacco Tax Division |