Rev. Ruling 68-8

A manufacturer submitted for examination two sample cigarette assemblies and requested a ruling that each assembly constituted a single cigarette for tax purposes under section 5701(b) of the Internal Revenue Code of
1954.

One sample was a roll of tobacco wrapped in paper and assembled with a filter at midpoint. The other sample was a roll of tobacco wrapped in paper and assembled with a filter at each end. The manufacturer stated that these articles would be sold in packages of twenty assemblies and that each assembly was designed so the consumer could cut or break each one in half for two filtered cigarette smokes.

Neither the sample with a filter at each end nor the sample with the filter at midpoint was constructed to be smoked by consumer as one cigarette.

Section 5701(b) of the Code provides as follows:

(b) CIGARETTES. - On cigarettes, manufactured in or imported into the United States, there shall be imposed the following taxes:

(1) SMALL CIGARETTES. - On cigarettes weighing not more than 3 pounds per thousand, $4 per thousand.

(2) LARGE CIGARETTES. - On cigarettes, weighing more than 3 pounds per thousand, $8.40 per thousand; except that, if more than 6-1/2 inches in length, they shall be taxable at the rate prescribed for cigarettes weighing not more than 3 pounds per thousand, counting each 2-3/4 inches, or fraction thereof, of the length of each as one cigarette.

It is held that, where a roll of tobacco wrapped in paper is constructed with a filter at each end or a filter a midpoint so that the consumer can cut or separate the original assembly in to two filter cigarettes, the original assembly is in fact two cigarettes and is taxable as two cigarettes.

26 U.S.C. 5701; 27 CFR 270.23