(a) Cigars are taxed at the following rates under 26 U.S.C. 5701(a): ------------------------------------------------------------------------
Tax rate for removals during the
following periods:
Type and amount ---------------------------------------
2002 to March 31, April 1, 2009 and
2009 after------------------------------------------------------------------------Small cigars per thousand....... $1.828............. $50.33Large cigars*
percentage of 20.719%............ 52.750%
sale price.
but not to $48.75 per thousand $0.4026 per
exceed--. cigar.------------------------------------------------------------------------* For large cigars: Until March 31, 2009, the percentage tax rate
applies when the sale price is $235.294 per thousand or less, and the
flat tax rate applies when the sale price is more than $235.294 per
thousand. On and after April 1, 2009, the percentage tax rate applies
when the sale price is $763.222 or less per thousand cigars, and the
flat tax rate applies when the sale price is more than $763.222 per
thousand cigars.
(b) See Sec. 41.39 of this part for rules concerning determination of sale price of large cigars.
(c) Cigars not exempt from tax under 26 U.S.C. chapter 52 and the provisions of this part which are removed but not intended for sale shall be taxed at the same rate as similar cigars removed for sale. [T.D. ATF-420, 64 FR 71942, Dec. 22, 1999. Redesignated and amended by T.D. TTB-16, 69 FR 52424, 52425, Aug. 26, 2004; T.D. TTB-75, 74 FR 14484, Mar. 31, 2009]