Industry Circular

Number: 92-5
Date: October 9, 1992

Department of the Treasury
Bureau of Alcohol, Tobacco, and Firearms
Washington, D.C. 20226

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INCREASE IN FEDERAL EXCISE TAX ON TOBACCO PRODUCTS AND ITS EFFECT ON BOND COVERAGE

Tobacco Export Warehouse Proprietors and Others Concerned:

Purpose. This Industry Circular is issued to advise businesses who receive tobacco products in bond, of certain provisions of the Omnibus Budget Reconciliation Act of 1990
(Public Law 101-508, 104 Stat., 1388) and its impact on their bond coverage.

Background. Public Law 101-508, 104 Stat., 1388, enacted on November 5, 1990, increased the rate of tax on tobacco products and cigarette papers and tubes in two increments, effective January 1, 1991 and January 1, 1993. As of January 1, 1993 all such products are subject to the second tax rate increase imposed by the law. The new excise tax rates are listed in Exhibit 1.

Effect on bond coverage. The change in tax rates may increase the liability which must be covered by a bond. Therefore, export warehouse proprietors and other persons who may be qualified to receive tobacco products in bond (who do not already have a maximum bond) should recompute their bond coverage in accordance with applicable regulations, using the new higher tax rates. If present coverage is inadequate, a strengthening or superseding bond must be filed.

Inquiries. If you have any questions, please contact the following ATF office in your area:

Taxpayers in: Call or write, Technical
Services, Bureau of Alcohol,
Tobacco and Firearms at the
following:

Illinois, Indiana, Kentucky, 550 Main Street, Room 6525
Michigan, Minnesota, North Dakota, Federal Office Bldg.
Ohio, South Dakota, Wisconsin, Cincinnati, OH 45202
West Virginia (513) 684-3335
FAX (513) 684-3168

Connecticut, District of Columbia, The Curtis Center, Suite 875
Delaware, Massachusetts, Maryland, Independence Square West
Maine, New Hampshire, New Jersey, Philadelphia, PA 19106
New York, Pennsylvania, (215) 597-2246
Rhode Island, and Vermont: FAX (215) 597-7255

Taxpayers in:Call or write, Technical
Services, Bureau of Alcohol,
Tobacco and Firearms at the
following:

Alabama, Florida, Georgia, 2600 Century Parkway NE,
Mississippi, North Carolina, Suite 305
South Carolina, Tennessee and Atlanta, GA 30345
Virginia: (404) 679-5080
FAX (404) 679-5099

Arkansas, Colorado, Iowa, 1114 Commerce Street
Kansas, Louisiana, Missouri, 7th Floor
Nebraska, New Mexico, Oklahoma, Dallas, TX 75242
Texas, and Wyoming: (214) 767-2277
FAX (214) 767-2750

Alaska, Arizona, California, 221 Main Street
Hawaii, Idaho, Montana, Nevada, 11th Floor
Oregon, Utah, Washington: San Francisco, CA 94105
(415) 744-7011
FAX (415) 744-9443

Stephen E. Higgins

Director

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