Tobacco Product Employee Use Exemption

IRC §5723(e)

Tobacco products furnished by manufacturers for use or consumption by their employees may be exempted from standard packaging and marking requirements, potentially reducing compliance and operational costs.

Eligibility

Must be a manufacturer of tobacco products providing products specifically for employee use or consumption in accordance with Secretary regulations.

Frequently Asked Questions

Who is eligible for the Tobacco Product Employee Use Exemption?

Must be a manufacturer of tobacco products providing products specifically for employee use or consumption in accordance with Secretary regulations.

How does the Tobacco Product Employee Use Exemption work?

Tobacco products furnished by manufacturers for use or consumption by their employees may be exempted from standard packaging and marking requirements, potentially reducing compliance and operational costs.

What law authorizes the Tobacco Product Employee Use Exemption?

The Tobacco Product Employee Use Exemption is authorized under IRC §5723(e) of the Internal Revenue Code (Title 26, United States Code).

Statutory Text — IRC §5723

Source: Internal Revenue Code, Title 26, United States Code

§ 5723. Packages, marks, labels, and notices(a) PackagesAll tobacco products, processed tobacco, and cigarette papers and tubes shall, before removal, be put up in such packages as the Secretary shall by regulation prescribe. (b) Marks, labels, and noticesEvery package of tobacco products, processed tobacco, or cigarette papers or tubes shall, before removal, bear the marks, labels, and notices if any, that the Secretary by regulation prescribes. (c) Lottery featuresNo certificate, coupon, or other device purporting to be or to represent a ticket, chance, share, or an interest in, or dependent on, the event of a lottery shall be contained in, attached to, or stamped, marked, written, or printed on any package of tobacco products, processed tobacco, or cigarette papers or tubes. (d) Indecent or immoral material prohibitedNo indecent or immoral picture, print, or representation shall be contained in, attached to, or stamped, marked, written, or printed on any package of tobacco products, processed tobacco, or cigarette papers or tubes. (e) ExceptionsTobacco products furnished by manufacturers of such products for use or consumption by their employees, or for experimental purposes, and tobacco products, processed tobacco, and cigarette papers and tubes transferred to the bonded premises of another manufacturer or export warehouse proprietor or released in bond from customs custody for deliver to a manufacturer of tobacco products, processed tobacco, or cigarette papers and tubes, may be exempted from subsection (a) and (b) in accordance with such regulations as the Secretary shall prescribe. (Aug. 16, 1954, ch. 736, 68A Stat. 713; Pub. L. 85–859, title II, § 202, Sept. 2, 1958, 72 Stat. 1422; Pub. L. 94–455, title XIX, §§ 1905(a)(28), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1821, 1834; Pub. L. 111–3, title VII, § 702(a)(2)(C), Feb. 4, 2009, 123 Stat. 108.)

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Legal Sources

US Code (Official) — 26 USC §5723 → Cornell Law Institute — 26 USC §5723 → Search IRS.gov for IRC §5723(e) → Treasury Regulations (26 CFR) →

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