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Tobacco Importers Must Report User Fee Information to FDA, Not USDA, Beginning Oct. 1

Thursday, July 17, 2014
Sandler, Travis & Rosenberg Trade Report

The Food and Drug Administration has issued a final rule that will require domestic tobacco product manufacturers and importers to submit to the FDA information needed to calculate the amount of user fees assessed under the Federal Food, Drug and Cosmetic Act. The Department of Agriculture has been collecting and providing this information to the FDA but intends to cease collecting it starting in fiscal year 2015.

Beginning Oct. 1, 2014, each domestic manufacturer and importer of cigarettes, snuff, chewing tobacco and roll-your-own tobacco must submit to the FDA specific information regarding units of product removed into domestic commerce and federal excise taxes paid for each class of tobacco product. This information must be submitted on a monthly basis, even in months when no tobacco product is removed into domestic commerce.

Under this final rule the FDA will continue to follow the current method for allocating the total fees among classes of tobacco product; i.e., by multiplying the total units removed (sticks or pounds) for the class by the 2003 maximum excise tax rate for that class and then calculating each class’ percentage of the total quarterly assessment. The FDA will also continue to use the current method of assessing user fees within each tobacco product class, by multiplying the total amount assessed to the class by the percentage share of federal excise taxes paid by each domestic manufacturer and importer using information required to be provided under this final rule. The final rule also includes provisions about notification and payment of assessments, procedures for disputing an assessment, and penalties for failure to report required information or pay tobacco product user fees.

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