S. 2463 - E-Cigarette Tax Parity Act

116TH CONGRESS
1ST SESSION

S. 2463

To amend the Internal Revenue Code of 1986 to provide for regulation
and taxation of electronic cigarettes and alternative nicotine products.

IN THE SENATE OF THE UNITED STATES

SEPTEMBER 11, 2019

Mr. WYDEN (for himself, Mrs. FEINSTEIN, Mr. REED, Mr. CARPER, Ms. STABENOW,
Mr. CARDIN, Mr. WHITEHOUSE, Mr. UDALL, Mrs. SHAHEEN, Mr. MERKLEY, Mr. BENNET,
Mr. COONS, Mr. HEINRICH, Mr. KING, Mr. MARKEY, Mr. VAN HOLLEN, Ms. HASSAN,
and Ms. SMITH) introduced the following bill; which was read twice
and referred to the Committee on _____

A BILL

To amend the Internal Revenue Code of 1986 to provide for regulation and taxation of electronic cigarettes and alternative nicotine products.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the "E-Cigarette Tax Parity Act".

SEC. 2. REGULATION AND TAXATION OF ELECTRONIC CIGARETTES AND ALTERNATIVE NICOTINE PRODUCTS.

(a) IMPOSITION, RATE, AND ATTACHMENT OF TAX. — Section 5701 of the Internal Revenue Code of 1986  is amended — 

(1) by redesignating subsection (h) as subsection (i), and

(2) by inserting after subsection (g) the following new subsection:

"(h) ALTERNATIVE NICOTINE PRODUCTS. — 

"(1) IN GENERAL. — On alternative nicotine products, manufactured in or imported into the United States, there shall be imposed a tax equal to the applicable dollar amount per gram of nicotine (and a proportionate tax at the like rate on all fractional parts of a gram) contained in such product.

"(2) APPLICABLE DOLLAR AMOUNT. — For purposes of this subsection, the applicable dollar amount shall be equal to — 

‘‘(A) $50.33, or

‘‘(B) for any specified class of alternative nicotine products which is identified pursuant to regulations prescribed by the Secretary, such amount as may be determined by the Secretary (in consultation with the Secretary of Health and Human Services) to be equivalent to the rate of tax imposed on cigarettes under subsection (b)(1) on an estimated per use basis for such class of alternative nicotine products.’’.

(b) DEFINITIONS. — Section 5702 of the Internal Revenue Code of 1986 is amended — 

(1) in subsection (c), by striking "and roll-your-own tobacco" and inserting "roll-your-own tobacco, and alternative nicotine products",

(2) in subsection (d), by striking "or roll-your-own tobacco" each place it appears and inserting "roll-your-own tobacco, or alternative nicotine products", and

(3) by adding at the end the following new subsection:

"(q) ALTERNATIVE NICOTINE PRODUCT. — 

"(1) IN GENERAL. — Subject to paragraph (2), the term 'alternative nicotine product' means any product containing nicotine which is — 

"(A) suitable for and likely to be offered to, or purchased by — 

"(i) a consumer for the inhalation, ingestion, absorption, or consumption of nicotine, or

‘‘(ii) a person for the production of a product described in clause (i), and 

‘‘(B) sold, transferred, or delivered to any person not possessing a permit provided for in section 5713(a) as a manufacturer, importer, or export warehouse proprietor.

‘‘(2) EXCEPTIONS. — Pursuant to regulations prescribed by the Secretary, the term ‘alternative nicotine product’ shall not include — 

‘‘(A) tobacco, processed tobacco, cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own tobacco, or 

‘‘(B) any product which — 

‘‘(i) has been approved by the Food and Drug Administration for sale as a tobacco cessation product or for other therapeutic purposes, and

‘‘(ii) is marketed and sold solely for a purpose approved as described in clause (i).’’.

(c) EFFECTIVE DATE. — The amendments made by this section shall take effect on the date that is 180 days after the date of the enactment of this Act.