(a) General. Except as otherwise provided in paragraph (b) of this section, every person who manufactures tobacco products must qualify for, and obtain, a permit as a manufacturer of tobacco products in accordance with the provisions of this part.
(b) Exceptions. The following persons are not considered to be engaged in the business of manufacturing tobacco products for purposes of this part:
(1) A person who produces tobacco products solely for that person's own consumption or use;
(2) A proprietor of a customs bonded manufacturing warehouse with respect to the operation of such warehouse;
(3) A retailer of tobacco products, such as a tobacconist, who takes taxpaid tobacco products out of the package, as that term is defined in Sec. 40.11, in front of waiting customers and places the tobacco products into a different container for immediate delivery to those customers; or
(4) A person whose operations are limited to, and who holds a permit as, a manufacturer of processed tobacco.
(c) Minimum manufacturing and activity requirements. A permit to manufacture tobacco products will only be granted to those persons whose principal business activity under such permit will be the manufacture of tobacco products. A permit will not be granted to any person whose principal business activity under such permit will be to receive or transfer tobacco products in bond. As a minimum activity requirement, in order to qualify for a permit, the quantity of tobacco products manufactured under the permit must be equivalent to, or exceed, the quantity to be transferred or received in bond under the permit. For the purposes of this section, the activity of packaging processed tobacco may be sufficient to qualify as a manufacturing activity. [T.D. TTB-78, 74 FR 29409, June 22, 2009] Sec. 40.61a Transitional rule.
Any person who:
(a) On August 5, 1997, was engaged in business as a manufacturer of roll-your-own tobacco, and
(b) Before January 1, 2000, submits an application, as provided in this part, to engage in such business, may, continue to engage in such business pending final action on such application. Pending such final action, all provisions of chapter 52 of the Internal Revenue Code of 1986 shall apply to such applicant in the same manner and to the same extent as if such applicant were a holder of a permit to manufacture roll-your-own tobacco under such chapter 52. [T.D. ATF-424, 64 FR 71931, Dec. 22, 1999]