27 CFR 40.22 - Determination of sale price of large cigars.

§ 40.22 Determination of sale price of large cigars.

(a)General rule. The tax imposed on large cigars is computed based on the sale price (the price for which the large cigars are sold by the manufacturer). In addition to money, goods or services exchanged for cigars may be considered as part of the sale price.

(b)Special cases -

(1)In general. If there is any question concerning the applicable sale price for tax purposes, the appropriate TTB officer will determine such price, applying rules similar to the constructive sale price rules in 26 U.S.C. 4216(b) and the implementing regulations in 26 CFR 48.4216(b)-1 through 48.4216(b)-4. These constructive sale price rules apply to cigars sold by a manufacturer at retail, sold on consignment, or sold (otherwise than through an arm's length transaction) at less than the fair market price. Sales of cigars between affiliated corporations may be analyzed under the constructive sale price rules. The appropriate TTB officer may make this analysis on his or her own initiative or upon the written request of a manufacturer. If TTB decides it is necessary, we will publish constructive sale price determinations in the TTB Bulletin in accordance with § 70.701(d) of this chapter.

(2)Adjustments in sale price -

(i)Reasons for adjustment. Adjustments to the sale price may occur as a result of a discount or price increase by the manufacturer or as a result of a TTB determination pursuant to paragraph (b)(1) above. In either case, the manufacturer must make conforming changes to the tax that was computed on the sale price before the adjustment.

(ii)Time of adjustment. If an adjustment is made before the end of the same tax return period as the original determination of the tax, the adjustment may be made on the same return. If the price is increased or decreased retroactively (during a later return period), either by the manufacturer or by TTB's determination, the manufacturer must make an adjustment on the tax return for the current return period in which the price change was determined.

(iii)Amount of adjustment. The taxpayer must compute the adjustment to the tax as the difference between the tax that was paid and the tax that should have been paid, based on the newly determined sale price, together with interest thereon and any applicable penalties. The interest must be computed from the time of payment of the original tax until the time the adjustment was made. Upon request, the appropriate TTB officer will provide information regarding interest rates applicable to specific time periods and any applicable penalties.

(3)Pricing for different packaging. If different bona fide sale prices are applicable to different types of packaging (e. g., boxes of 25 and boxes of 50), then the cigars in each type of packaging are taxed on the basis of their respective sale prices.

(4)Pricing of seconds. If some of an otherwise identical cigar brand and size:

(i) Are distinctive from other such cigars because of physical imperfections, (ii) Are offered to the consumer through clear labeling as “imperfects”, “seconds”, “throw-outs”, or a comparable commonly understood term, and

(iii) The manufacturer has a separate sale price for such cigars, then they are taxed on the basis of this separate sale price.

(5)Combination packages. If a manufacturer has a sale price for a combination package containing cigars of different sizes, the cigars are taxed based on that combination sale price. If there is no sale price for the combination, then the cigars are taxed based on their individual sale prices.

(6)Removals for another person. If a manufacturer makes taxable removals of a brand and size of cigar only for distribution by others who establish the sale price, the tax is based on such sale price even though the manufacturer who makes the removals does not establish the price.

[T.D. ATF-420, 64 FR 71939, Dec. 22, 1999, as amended by T.D. TTB-91, 76 FR 5479, Feb. 1, 2011]

This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.

This list is taken from the Parallel Table of Authorities and Rules provided by GPO [Government Printing Office].

It is not guaranteed to be accurate or up-to-date, though we do refresh the database weekly. More limitations on accuracy are described at the GPO site.

United States Code

§ 5701 - Rate of tax

§ 5703 - Liability for tax and method of payment

§ 5704 - Exemption from tax

§ 5705 - Credit, refund, or allowance of tax

§ 5711 - Bond

§ 5712 - Application for permit

§ 5713 - Permit

§ 5721 - Inventories

§ 5722 - Reports

§ 5723 - Packages, marks, labels, and notices

§ 5731 - Imposition and rate of tax

§ 5732 - Payment of tax

§ 5733 - Provisions relating to liability for occupational taxes

§ 5734 - Application of State laws

§ 5741 - Records to be maintained

§ 5751 - Purchase, receipt, possession, or sale of tobacco products and cigarette papers and tubes, after removal

§ 5753 - Disposal of forfeited, condemned, and abandoned tobacco products, and cigarette papers and tubes

§ 5761 - Civil penalties

§ 5762 - Criminal penalties

§ 5763 - Forfeitures

§ 6061 - Signing of returns and other documents

§ 6065 - Verification of returns

§ 6109 - Identifying numbers

§ 6151 - Time and place for paying tax shown on returns

§ 6301 - Collection authority

§ 6302 - Mode or time of collection

§ 6311 - Payment of tax by commercially acceptable means

§ 6313 - Fractional parts of a cent

§ 6402 - Authority to make credits or refunds

§ 6404 - Abatements

§ 6423 - Conditions to allowance in the case of alcohol and tobacco taxes

§ 6676 - Erroneous claim for refund or credit

§ 6806 - Occupational tax stamps

§ 7011 - Registration—persons paying a special tax

§ 7212 - Attempts to interfere with administration of internal revenue laws

§ 7325 - Personal property valued at $100,000 or less

§ 7342 - Penalty for refusal to permit entry or examination

§ 7502 - Timely mailing treated as timely filing and paying

§ 7503 - Time for performance of acts where last day falls on Saturday, Sunday, or legal holiday

§ 7606 - Entry of premises for examination of taxable objects

§ 7805 - Rules and regulations

U.S. Code: Title 31 - MONEY AND FINANCE

Title 27 published on 13-Jun-2017 12:22

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 27 CFR Part 40 after this date.

  • 2016-06-21; vol. 81 # 119 - Tuesday, June 21, 2016
    1. 81 FR 40183 - Importer Permit Requirements for Tobacco Products and Processed Tobacco, and Other Requirements for Tobacco Products, Processed Tobacco and Cigarette Papers and Tubes
      GPO FDSys XML | Text
      DEPARTMENT OF THE TREASURY, Alcohol and Tobacco Tax and Trade Bureau
      Final rule; Treasury decision.
      Effective July 21, 2016, the temporary regulations published in the Federal Register as T.D. TTB-115 at 78 FR 38555 on June 27, 2013, are adopted as final, and those temporary regulations will no longer have a sunset date of August 26, 2016.
      27 CFR Parts 40, 41, and 44