Requirements for Manufacturers of Tobacco Products

Except for removals in bond and transfers in bond, the taxes on tobacco products will be determined at the time of removal, and paid on the basis of a return. When you send your tax payment, you must include sufficient information to identify you as the taxpayer, the nature and purpose of the payment, and the tobacco products covered by the payment.

• Excise Tax Return, TTB Form 5000.24
  Tobacco products removed for consumption or sale must be taxpaid on a semimonthly basis (see 27CFR 40.161 through 40.171). For prepayment requirements see 27 CFR 40.166 and 40.167. See tax rates.

• Tax Period
  Tax periods run from the 1st - 15th, and from the 16th to the end of the month (see 27 CFR 40.163).  In September, three excise tax returns are due.  For non-EFT payers, the second semimonthly period is divided into two payment periods, from the 16th through the 25th, and from the 26th through the 30th.  For EFT payers, the second semimonthly period is divided into two payment periods, from the 16th through the 26th, and from the 27th through the 30th.  (See 27 CFR 40.164).
  
  With the exception of the two accelerated payments in September, the due dates are not later than 14 days after the close of the return period.  If the 14th day falls on Saturday, Sunday, or legal holiday, the return is due on the immediately preceding day which is not a Saturday, Sunday, or legal holiday.
  
  See the most recent excise tax due date schedule.
  
  NOTE:  Penalties and interest will be assessed if a return is not timely filed/paid.

• Mail excise tax returns to:
  TTB
  Excise Tax
  P.O. Box 790353
  St. Louis, MO 63179-0353

Return to Top

Every manufacturer of tobacco products must make true and accurate inventories which must include all tobacco products and processed tobacco on hand required to be accounted for in the records kept under 27 CFR Part 40.

Every manufacturer of tobacco products must make a report for each month and for any portion of a month during which they engage in such business (see 27 CFR 40.201 and 202).

• TTB F 5210.5, Monthly Report – Manufacturer of Tobacco Products Or Cigarette Papers and Tubes as required by 27 CFR 40.202
  The first reporting period begins with the effective date of your original permit to the end of the month. You must file the report whether or not any operations or transactions occurred during the reporting period.
  
  Send reports to:
  TTB Tobacco Unit
  550 Main Street, Ste 8002
  Cincinnati, OH 45202-5215
  
  The reports are due no later than the 20th day of the succeeding month.

• TTB F 5210.9, Inventory – Manufacturer of Tobacco Products Or Processed Tobacco as required by 27 CFR 40.201
  The manufacturer must make such an inventory when they commence business, which must be the effective date of the permit issued upon original qualification under this part.

Return to Top

For a description of the records, inventories, and reports to be kept regarding the manufacture and disposition of tobacco products, see 27 CFR 40.181 through 40.202.

Return to Top

You should have been given an Identification Number (ID) and automatically enrolled in Pay.gov. If you do not have a user ID see the information below under “User Agreement”.  We highly recommend you use this system for reports, excise tax payments and filing.

Return to Top

• What is an Electronic Funds Transfer (EFT)?
  An EFT is a non-paper, computer-to-computer transfer of funds from a taxpayer's financial institution account to Treasury's account at a Federal Reserve Bank.  Such transfers are initiated through an electronic terminal and not by check, money order, or other paper instrument.

• Payments
  TTB accepts electronic payments through the Federal Reserve Communications System and through Automated Clearing House (ACH) credit transfers.

• Fedwire Transfers
  EFT payments through the Federal Reserve Communications System (using Fedwire) to Treasury's main account at the Federal Reserve Bank of New York are completed on the day they are initiated, generally in a matter of minutes. The Federal Reserve guarantees the payment is final as soon as the receiving institution is notified.  At that time the Federal Reserve debits the taxpayer’s bank account and the payment is credited to Treasury's for TTB.

• ACH Credit Transfers
  The ACH system is an electronic network for financial transactions in the United States. ACH credit transfers are completed on the following business day.

For general information on making EFT payments to TTB and to find out if you are required to make payments by EFT, please see our EFT Web page.

Return to Top

Manufacturers of tobacco products must pay Special Occupational Tax (SOT) per 27 CFR 40.31 through 40.33. As a manufacturer of tobacco products you are liable for this SOT on or before beginning business as a manufacturer of tobacco products.

• Registration
  All manufacturers of tobacco products must register and pay SOT on or before the date you begin business for the first time, and then on or before July 1 of each year thereafter. We strongly recommend that you use Permits Online to register and pay SOT electronically. If filing online is not an option, you may alternatively mail TTB F 5630.5t with your payment to the address on the form.

• Due Date
  SOT is due prior to beginning your business operations and on July 1st of each year thereafter. The tax year runs from July 1st each year through the next June 30th. For example: the tax for the period July 1, 2009 through June 30, 2010, was due on July 1, 2009. The tax may be prorated the first year if operations begin after the month of July. SOT cannot be paid monthly. The full tax is due at the beginning of each tax period.  You will not receive notification from TTB that the SOT is due. It is your responsibility to timely file the SOT return, along with payment.

• How much is the Tax?
  The SOT imposed on a manufacturer of tobacco products is $1,000 per year; however, if the business had gross receipts of less than $500,000 in the previous income tax year, the rate is $500 per year.
  
  You must take into account all gross sales receipts, not just those derived from the business subject to special tax. For instance, sales receipts from other businesses such as a retail outlet, selling either tobacco or other property or services, must be included.
  
  If you are a member of a controlled group as defined in section 5061(e)(3) of the Internal Revenue Code, you are not eligible for this reduced rate unless the total gross receipts for the entire group are less than $500,000. Please note, that the annual renewal form will always be prepared at the non-reduced rate. It will be your responsibility each tax year to determine whether or not you are eligible for the reduced rate.

• Operations at More than One Location
  If you receive a permit to manufacture tobacco products from TTB, which authorizes you to conduct operations at more than one location, and you are in fact conducting operations at more than one location, special tax is due for each location.

• A special tax stamp is not transferable. Therefore, if there is a change in ownership of your business or business structure, such as a sole owner incorporating, or going into a partnership, the new owner is required to file a special tax registration and return and pay the tax from the month the change occurs through the next June 30.

Return to Top

If you submitted your application through Permits Online as well. This will ensure a more efficient application process with the capability to view existing information.

NOTE: Amendments within Permits Online are divided into two categories: commonly filed and commodity specific. Listed below are commonly filed amendments. See Permits Online for amendments specifically for tobacco manufacturers.

• Reporting Changes
  Any change that affects your permit to manufacturer tobacco products such as the name, address, ownership, management or control of the business must be reported to TTB's National Revenue Center, 550 Main Street, Cincinnati, OH 45202, or you may call 1-877-882-3277.

• Change in Factory Premises
  Select this amendment if you will be moving your business operations to another location within the same state.  If moving to another state you will need to file an original application.  You will need to submit a new diagram, lease agreement, registration as a foreign corporation/LLC, if applicable and a superseding bond.

• Change in Mailing Address and/or USPS change
  Select this amendment if there has been a change to where you will receive mail, or if your address was changed by the US Postal Service but no physical move has taken place.

• Add/Remove Signing Authority
  Select this amendment if you will be making any changes to the existing signing authority on file.  You will be required to attach the appropriate documentation showing where the authorization is granted.

• Add/Remove Power of Attorney
  Select this amendment if adding or removing individuals from outside your company with the power to sign and/or act on behalf of the company.  When adding a Power of Attorney you are required to provide TTB F 5000.8. (Upload in Permits Online).

• Change in Business Name
  Select this amendment if there has been a change to your legal business entity’s name.  You will need to attach a copy of your amended Articles showing the name change.

• Add/Remove Trade Name
  Proof of trade name registration, if required by the state or the county, must be uploaded and attached to your application.  If the state or county does not require trade name registration, a signed and dated statement of this fact should be submitted.

• Change in Control
  A change in actual or legal control occurs when there are changes in stock ownership, LLC membership ownership, or possibly major changes in the corporate officers or directors of a corporation. In such situations, the legal business entity which operated the business in the past continues to operate the subject business. In other words, the same legal entity remains in existence which continues to operate the business in question.
  
  If adding a new person an Owner Officer Information Application must be completed through Permits Online.

• Change in Officer, Director, Member, or Stockholder/Interest
  Select this amendment when there is a change in the officers, directors, members and managers, as well as any stockholders/interest holders who hold 10 percent or more.  An Owner Office Information Application must be completed for each new person through Permits Online.

• Add/Remove Variance or Alternate Method
  Selecting this amendment is a request to vary from the regulations.  You will need a letterhead notice stating the regulations you wish to vary from along with a reason why this variance is needed.

• Termination of Business
  Select this amendment if you are discontinuing business.

If you submitted your application through Permits Online all future amendments should be completed through Permits Online as well. This will ensure a more efficient application process with the capability to view existing information.

Return to Top

• Change of Corporate Officers and Directors (27 CFR 40.103)
  Change must be made in writing to TTB within 30 days of action.  Complete TTB F 5000.9 Personnel Questionnaire and updated signing authority, if appropriate

• Partnership Changes (27 CFR 40.102)
  Change in member of partnership is the same as original qualification (includes husband and wife partners)

• Limited Partnership
  Change of General Partner – Same as Original Qualification

• Limited Liability Company (27 CFR 40.103)
  For change in manager contact the National Revenue Center for guidance.

• Change in Member within 30 days of change
  Written notification to include updated list of members including titles, addresses and TTB F 5000.9 Personnel Questionnaire form or personnel information required on the application form.

• Change of Stockholders holding more than 10 percent of stock of a corporation (27 CFR 40.103)
  Within 30 days of action, notify TTB in writing setting out new stock distribution, number of shares held, and number of shares authorized by the Articles of Incorporation. Include a copy of corporate documents supporting the change on TTB F 5000.9 Personnel Questionnaire, within 30 days of change if more than 10 percent stock is held and not already on file with TTB.

• Change of Ownership Interest for Members of LLC with more than 10 percent ownership interest (27 CFR 40.103)
  Within 30 days of action, notify TTB in writing setting out new owners and their percentage of ownership interest.  Include a copy of LLC documents supporting the change on TTB F 5000.9 Personnel Questionnaire within 30 days of change for interest holder of more than 10 percent and not already on file with TTB.

• Change of Stock Control (27 CFR 40.104)
  Within 30 days after change occurs, file TTB F 5200.3, Application for Permit form. Include copies of corporate documents supporting the change and updated TTB F 5100.1, Signing Authority form or TTB F 5000.8, Power of Attorney form if appropriate.

• Change in Location (27 CFR 40.111)
  Include –

• • TTB F 5200.16, Application for Amended Permit form  (Surrender current permit)
  • Lease/proof of ownership for space
  • New diagram of factory

• Change of Address by the United States Postal Service (27 CFR 40.112)
  Application for Amended Permit F 5200.16 (Surrender current permit)

• Extension or curtailment of factory (27 CFR 40.114)
  Must include –

• • TTB F 5200.16, Application for Amended Permit form  (Surrender current permit)
  • Diagram of factory, if required by 27 CFR 40.69
  • Non-Contiguous Extension of Premises (see 27 CFR 40.69)
  • TTB F 5200.16, Application for Amended Permit form  (Surrender current permit)
  • Diagram of factory, if required by 27 CFR 40.69
  • If leased space, copy of lease

• Addition/Deletion of Trade Name/Operating Name (27 CFR 40.92)
• • TTB F 5200.16, Application for Amended Permit form  (Surrender current permit)
  • If addition of trade name, copy of registration issued by the State or local authority.  If not required, a statement to that effect and
  • Amended Articles of Incorporation or Amended Articles of Organization

• Change of Corporate Name (27 CFR 40.93)
• • TTB F 5200.16, Application for Amended Permit form
  • Copy of registration issued by the State or local authority—if not required, a statement to that effect
  • Amended Articles of Incorporation or Amended Articles of Organization

• Signature Authority (27 CFR 40.68)
  Forms include –

• • Sole owner: TTB F 5000.8 Power of Attorney form for any designee
  • Partnership: TTB F 5000.8 Power of Attorney form for each partner and any designee
  • Corporation: Authorized in corporate documents, resolution or TTB F 5100.1 Signing Authority form; TTB F 5000.8 Power of Attorney form for any designee
  • LLC: Authorized in organizational documents, resolution or TTB F 5100.1 Signing Authority form; TTB F 5000.8 Power of Attorney form for any designee

• Alternate Method or Procedure (27 CFR 40.45)
  Written Application with specific description and reason for alternate method or procedure

• Change of Bond Amount (27 CFR 40.133 through 136)
• • TTB F 5200.25, Strengthening/superseding Bond
  • TTB F 5200.26, Surety Tobacco Bond–Surety
  • TTB F 5200.29, Tobacco Bond

• Change of Surety Company (27 CFR 40.136)
• • TTB F 5200.26, Surety Tobacco Bond–Surety
  • See list of approved sureties

• Discontinuance of Operations (27 CFR 40.331)
  Letterhead notice stating date of discontinuance, name of successor (if applicable) AND certify that all tobacco products disposed of, and
  Surrender permit with concluding inventory and concluding report (see 27 CFR 40.201 and 40.202).

Return to Top

For Federal regulations pertaining to your operations, refer to Title 27 Code of Federal Regulations (CFR), Alcohol, Tobacco Products and Firearms, Part 40 or see our tobacco regulations Web page.

• Tobacco Authority Under Title 26, Internal Revenue Code
  Chapter 52 -- Tobacco Products and Cigarette Papers and Tubes

Return to Top

There are additional responsibilities and requirements that you may have to meet including state laws.

• TTB personnel have the right of entry into your premises.

• All taxpaid products on the bonded premises must be clearly marked and segregated.

• Please ensure you are in compliance with your state and local authorities before beginning operations (including building/use permits and zoning requirements).

If you have any questions, please contact the National Revenue Center at 1-877-882-3277 or at National Revenue Center.

Return to Top