Instructions Relative to
Reporting Unstemmed Leaf Tobacco
Manufacturers of tobacco products:
1. The purpose of this industry circular is to furnish
information concerning the manner of reporting certain tobacco
in tobacco products manufacturers' factory revenue records and
monthly reports.
2. The question has been raised as to whether certain leaf
tobacco as, for example, the Turkish and Puerto Rican varieties,
in which the stem is so fine that the leaf is frequently used in
manufacture in its entirety, should be shown in the factory revenue
records and monthly reports as unstemmed or stemmed leaf tobacco
when received.
3. Leaf tobacco, as defined by regulations, includes both
unstemmed and stemmed tobacco. Unstemmed tobacco is tobacco from
which the stem or mid-rib has not been removed. Conversely, stemmed
tobacco is tobacco from which the stem or mid-rib has been removed.
4. Therefore, in making entries in their factory revenue records
and in preparing monthly reports, manufacturers should show all leaf
tobacco received and shipped from which the stem or mid-rib has not
been removed under unstemmed leaf tobacco, regardless of whether such
tobacco will or will not be stemmed when used in the manufacture of
tobacco products. The subsequent accounting for unstemmed tobacco
used in the manufacture of tobacco products, and the question of
a loss allowance for stems, will be determined on the basis of
whether the whole leaf is used or whether the stems are removed and
are not used in manufacturing.
5. Inquiries in regard to this industry circular should refer
to the number thereof and should be directed to the appropriate
Assistant Regional Commissioner, Alcohol and Tobacco Tax.
Dwight E. Avis
Director, Alcohol and Tobacco Tax Division
IRS-20631
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