Frequently Asked Questions
Who is eligible for the Major Disaster Tobacco Tax Refund?
Available to persons holding tobacco products for sale at the time of a disaster. Claim must be filed within 6 months of the disaster determination and the claimant must not have been indemnified by insurance for the tax amount.
How does the Major Disaster Tobacco Tax Refund work?
The Secretary shall pay an amount equal to the internal revenue taxes and customs duties paid on tobacco products lost, rendered unmarketable, or condemned due to a Presidentially declared major disaster.
What law authorizes the Major Disaster Tobacco Tax Refund?
The Major Disaster Tobacco Tax Refund is authorized under IRC §5708 of the Internal Revenue Code (Title 26, United States Code).
Statutory Text — IRC §5708
Source: Internal Revenue Code, Title 26, United States Code
§ 5708. Losses caused by disaster(a) AuthorizationWhere the President has determined under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, that a “major disaster” as defined in such Act has occurred in any part of the United States, the Secretary shall pay (without interest) an amount equal to the amount of the internal revenue taxes paid or determined and customs duties paid on tobacco products and cigarette papers and tubes removed, which were lost, rendered unmarketable, or condemned by a duly authorized official by reason of such disaster occurring in such part of the United States on and after the effective date of this section, if such tobacco products or cigarette papers or tubes were held and intended for sale at the time of such disaster. The payments authorized by this section shall be made to the person holding such tobacco products or cigarette papers or tubes for sale at the time of the disaster.
(b) ClaimsNo claim shall be allowed under this section unless—(1) filed within 6 months after the date on which the President makes the determination that the disaster referred to in subsection (a) has occurred; and
(2) the claimant furnishes proof to the satisfaction of the Secretary that—(A) he was not indemnified by any valid claim of insurance or otherwise in respect of the tax, or tax and duty, on the tobacco products or cigarette papers or tubes covered by the claim, and
(B) he is entitled to payment under this section.
Claims under this section shall be filed under such regulations as the Secretary shall prescribe.
(c) Destruction of tobacco products or cigarette papers or tubesBefore the Secretary makes payment under this section in respect of the tax, or tax and duty, on the tobacco products or cigarette papers or tubes condemned by a duly authorized official or rendered unmarketable, such tobacco products or cigarette papers or tubes shall be destroyed under such supervision as the Secretary may prescribe, unless such tobacco products or cigarette papers or tubes were previously destroyed under supervision satisfactory to the Secretary.
(d) Other laws applicableAll provisions of law, including penalties, applicable in respect of internal revenue taxes on tobacco products and cigarette papers and tubes shall, insofar as applicable and not inconsistent with this section, be applied in respect of the payments provided for in this section to the same extent as if such payments constituted refunds of such taxes.
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