Rev. Ruling 70-96

Advice has been requested whether a corporation which manufacturers cigarette paper would be required to obtain a permit and otherwise qualify under the Internal Revenue Code of 1954 as a manufacturer of tobacco products to occasionally make up a small quantity of cigarettes for experimental research and testing of the cigarette paper. The cigarettes will not be removed from the premises but will be destroyed at the plant.

Since cigarettes are made only for research and testing directly related to the business of manufacturing cigarettes paper and tubes, it is held that the corporation is not a manufacturer of tobacco products within the meaning of Chapter 52 of the Code and need not qualify under section 5712 of the Code to occasionally make cigarettes in its laboratory for testing cigarette paper, provided the cigarettes are destroyed and not removed from the premises.

26 U.S.C. 5712; 27 CFR 270.62