TAXES ON LARGE CIGARS
Manufacturers and importers of large cigars;
and proprietors of customs bonded
manufacturing warehouses, class 6:
Purpose. This is to advise you of the enactment of Public
Law 86-779, 86th Congress, 2nd Session, which amends section 5701(b)
of the Internal Revenue Code by striking out "exclusive of any State
or local taxes imposed on the retail sale of cigars" and inserting
in lieu thereof "exclusive of any State or local taxes imposed on
cigars as a commodity."
Effect. Section 5701(b) of the Internal Revenue Code, as
amended by this Act, provides that in determining the retail price
for Federal tax purposes regard is to be had to the ordinary retail
price of a single cigar in its principal market, exclusive of any
State or local taxes imposed on cigars as a commodity, whether
they are taxes on the wholesale, retail, or manufacturers' price.
However, this is not intended to provide any exclusion for taxes
such as those on gross receipts, income, or personal property.
Effective date. Public Law 86-779 is effective with respect
to cigars removed from domestic factories or released from customs
custody on and after October 9, 1960.
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 Division