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TTB PROPOSES REVISED REGULATORY STANDARDS FOR DISTINGUISHING BETWEEN CIGARS AND CIGARETTES 

On October 25, 2006, the Alcohol and Tobacco Tax and Trade Bureau (TTB) published a notice of proposed rulemaking, Notice No. 65, Tax Classification of Cigars and Cigarettes, in the Federal Register proposing changes to the regulations that govern the classification and labeling of cigars and cigarettes for Federal excise tax purposes under the Internal Revenue Code.  The proposed regulatory changes contained in this document address concerns that TTB has regarding the adequacy of the current regulatory standards for distinguishing between cigars and cigarettes.  Notice No. 65 also summarizes and responds to three petitions received by TTB requesting rulemaking action regarding the classification of cigars and cigarettes.  The proposals contained in Notice No. 65 clarify the application of existing statutory definitions and update and codify administrative policy in order to provide clearer and more objective tobacco product classification criteria.  The clarifications contained in Notice No. 65 are intended to reduce possible revenue losses through the misclassification of cigarettes as little cigars.

Among the regulatory changes proposed in Notice No. 65, TTB proposes to use the total reducing sugars content of tobacco products as an objective standard for distinguishing between cigars and cigarettes.  Therefore, TTB also published Notice No. 66, Total Reducing Sugars Analytical Method, to describe the analytical method the TTB Laboratory uses to determine the total reducing sugars content of tobacco products.  We published this analytical method so that interested members of industry and the public may use the same method to evaluate the total reducing sugars of tobacco products for the purpose of commenting on the proposed regulatory changes contained in Notice No. 65.

Comments on Notice No. 65 are now due on or before March 26, 2007.  (In Notice No. 69, TTB extended the comment period for Notice No. 65 from December 26, 2006, to March 26, 2007.)