Rev. Ruling 66-136

Cigars Sold in Vending Machines

Advice has been requested whether a single cigar may be sold from a vending machine if the cigar is put up by the manufacturer in a package (cellophane, tube, etc.) which bears the manufacturer's permit number and the class designation "E," the ordinary retail price of this cigar is intended by the manufacturer to be more than 8 cents and not more than 15 cents.

26 CFR 296.166 provides that all cigars and cigarettes purchased, received, possessed, offered for sale, sold or otherwise disposed of, by any dealer must be in proper packages which bear the prescribed mark and notice. Cigars and cigarettes may be sold, or offered for sale, at retail from such packages, provided the products remain in the packages until removed by the customer or in the presence of a customer. Where a vending machine is used, cigars and cigarettes must similarly be vended in proper packages or directly from such packages.

26 CFR 270.212 provides, in pertinent part, that every packages of cigars or cigarettes packed in a domestic factory shall, before removal subject to tax, have adequately printed thereon, or on a label securely affixed thereto, certain specified information, or the permit number of the factory from which such products are to be so removed.

26 U.S.C. 5751; 27 CFR 296.166