[Federal Register: November 21, 2007 (Volume 72, Number 224)]
[Rules and Regulations]
[Page 65456-65457]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21no07-8]
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DEPARTMENT OF THE TREASURY
Alcohol and Tobacco Tax and Trade Bureau
27 CFR Part 45
[T.D. TTB-63; Re: T.D. TTB-26]
RIN 1513-AA99
Removal of Tobacco Products and Cigarette Papers and Tubes,
Without Payment of Tax, for United States Use in Law Enforcement
Activities (2003R-268P)
AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.
ACTION: Final rule; Treasury decision.
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SUMMARY: This Treasury decision adopts as a final rule, without change,
a temporary rule that allows manufacturers of tobacco products and
cigarette papers and tubes to remove these articles without payment of
tax for use by Federal agencies in law enforcement activities, and
without inclusion of the otherwise required tax-exempt label.
DATES: Effective Date: November 21, 2007.
FOR FURTHER INFORMATION CONTACT: Amy Greenberg, Alcohol and Tobacco Tax
and Trade Bureau, Regulations and Rulings Division, 1310 G Street, NW.,
Suite 200-E, Washington, DC 20220; telephone 202-927-8210; or e-mail
Amy.Greenberg@ttb.gov.
SUPPLEMENTARY INFORMATION:
Statutory and Regulatory Provisions
Section 5704(b) of the Internal Revenue Code of 1986 (26 U.S.C.
5704(b)) provides that a manufacturer may, among other things, remove
tobacco products and cigarette papers and tubes without payment of tax
for use of the United States, in accordance with regulations prescribed
by the Secretary of the Treasury. The regulations administered by the
Alcohol and Tobacco Tax and Trade Bureau (TTB) include, in part 45 (27
CFR part 45), provisions that implement this aspect of section 5704(b).
Section 45.31 of those regulations (27 CFR 45.31) previously set forth
two circumstances in which manufacturers of tobacco products and
cigarette papers and tubes were permitted to remove those articles
without payment of Federal excise tax for gratuitous distribution under
the supervision of a Federal agency. Neither of those circumstances
included the removal of articles for use by Federal agencies in law
enforcement activities.
In addition, Section 45.46 of the TTB regulations (27 CFR 45.46)
provided that every package of tobacco products and cigarette papers
and tubes removed under part 45 must have the words ``Tax-Exempt. For
Use of U.S. Not To Be Sold.'' adequately imprinted on the package or on
a label securely affixed to the package.
Publication of Temporary Rule
On April 15, 2005, TTB published in the Federal Register at 70 FR
19888, as T.D. TTB-26, a temporary rule that amended the TTB
regulations to eliminate the need for manufacturers of tobacco products
and cigarette papers and tubes to obtain a variance to remove their
products without payment of tax for use by a Federal Agency in an
investigation or other law enforcement activity. Under the temporary
rule, the supplying of tobacco products and cigarette papers and tubes
by manufacturers to Federal agencies continued to be voluntary. The
changes to the regulations did not impose additional cost, compliance,
or reporting burdens on manufacturers. The temporary rule revised Sec.
45.31 by dividing that section into paragraphs (a) and (b) in order to
include the substantive change and improve the readability of the
section.
In addition, we amended Sec. 45.46 by adding an exception to the
tax exempt labeling requirements.
The Bureau received three comments on the temporary rule. One
commenter specifically endorsed the temporary changes, recognizing that
they would significantly help law enforcement
[[Page 65457]]
efforts. The second commenter, a cigarette importer, supported the
temporary rule for purposes of facilitating law enforcement. The third
commenter supported the principle of tax-free removals for certain
purposes.
Based on the reasons set forth above and on comments received, we
believe it is appropriate to adopt the temporary rule as a final rule
without change.
Inapplicability of Delayed Effective Date Requirement
Because these regulations recognize an exemption to tax payment,
relieve manufacturers of the requirement to file a variance, and are
identical to temporary regulations currently in effect, it has been
determined pursuant to 5 U.S.C. 553(d)(1) and (3) that good cause
exists to issue these regulations without a delayed effective date.
Regulatory Flexibility Act
We certify that this regulation will not have a significant impact
on a substantial number of small entities. This regulation provides
greater flexibility for manufacturers of tobacco products and cigarette
papers and tubes to remove these products without being subject to tax
and imposes no new reporting, recordkeeping, or other administrative
requirement. Therefore, no regulatory flexibility analysis is required.
Executive Order 12866
We have determined that this notice of final rulemaking is not a
significant regulatory action as defined by Executive Order 12866.
Therefore, a regulatory assessment is not required.
Drafting Information
Maria Mahone of the Knowledge Management Staff drafted this final
rule.
List of Subjects in 27 CFR Part 45
Authority delegations (Government agencies), Cigars and cigarettes,
Excise taxes, Labeling, Packaging and containers, Reporting and
recordkeeping requirements, Tobacco.
The Regulatory Amendment
0
For the reasons discussed in the preamble, the temporary rule amending
27 CFR part 45 published in the Federal Register at 70 FR 19888 on
April 15, 2005, is adopted as a final rule without change.
Signed: September 18, 2007.
John J. Manfreda,
Administrator.
Approved: November 5, 2007.
Timothy E. Skud,
Deputy Assistant Secretary (Tax, Trade, and Tariff Policy).
[FR Doc. E7-22703 Filed 11-20-07; 8:45 am]
BILLING CODE 4810-31-P