ATF Ruling 76-5
The Bureau of Alcohol, Tobacco and Firearms has been asked to rule on whether certain rolls of tobacco would be taxable under 26 U.S.C. 5701.
The products in question are (1) rolls of tobacco approximately 65 mm long and 8 mm in diameter, wrapped in cellophane or similar film, or in porous or perforated paper or reconstituted tobacco, and (2) rolls of tobacco about 25 mm long and 9 mm in diameter, wrapped in reconstituted tobacco. Because of the nature of the cellophane film or porous materials used to enclose the 65 mm products, and because of the length of the 25 mm product, the rolls are not suitable for smoking in the form in which presented. Rather, they could be smoked only after placing in a pipe or after further rolling in or placing into other wrappers, such as cigarette papers or cigarette tubes. A small hand operated mechanical device would be used to insert the 65 mm length rolls into cigarette tubes, or they could be manually wrapped in cigarette papers or inserted into pipes. The 25 mm length roll is intended only for manual insertion into pipes.
A cigar is defined in 26 U.S.C. 5702(a) as "any roll of tobacco wrapped in leaf tobacco or in any substance containing tobacco (other than any roll of tobacco which is a cigarette within the meaning of subsection (b)(2))." A cigarette is defined in 26 U.S.C. 5702(b) as "(1) any roll of tobacco wrapped in paper or in any substance not containing tobacco, and (2) any roll of tobacco wrapped in any substance containing tobacco which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchases by, consumers as a cigarette described in paragraph (1)."
Neither of these definitions exclude from their coverage rolls of tobacco which are in a form not capable of being smoked without further manipulation. The very purpose of the rolls in question is that they ultimately be smoked. The fact that some further act on the part of the consumer is necessary before smoking can occur would not cause the rolls to be excluded from the definitions of the products to be taxed in view of their clear inclusion in the language of the definitions.
Held, rolls of tobacco, such as those described above, designed for loading into a pipe or for making a cigarette, even though not suitable for smoking as constituted, are rolls of tobacco as contemplated by 26 U.S.C. 5701 and 5702. Consequently, such products are subject to tax under the provisions of 26 U.S.C. 5701, either as a cigarette or cigar, as determined by the criteria set forth in ATF Ruling 73-22, ATF C.B. 1973, 89.