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Title 26, Internal Revenue CodeRelease 119-110

§5731 Imposition and Rate of Tax

Title 26 › Subtitle E — Alcohol, Tobacco, and Certain Other Excise Taxes › CHAPTER 52 — TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES › Subchapter D — Occupational Tax › § 5731

Last updated Sep 22, 2026|Official source

Summary

Businesses that make tobacco products, make cigarette papers or tubes, or run an export warehouse must pay a $1,000 tax each year for every place they operate. If a business’s gross receipts in the most recent taxable year ending before the tax period are under $500,000, the yearly tax is $500 instead. Businesses treated as one taxpayer under section 5061(e)(3) count as one for the smaller rate, and rules like section 448(c)(3)(B) and (C) apply. If someone willfully fails to pay this tax, they can be fined up to $5,000, put in jail up to 2 years, or both, for each offense.

Full Legal Text

Title 26, §5731

Internal Revenue Code, Source: USLM XML via OLRC

(a)General rule
Every person engaged in business as—
(1)a manufacturer of tobacco products,
(2)a manufacturer of cigarette papers and tubes, or
(3)an export warehouse proprietor,
shall pay a tax of $1,000 per year in respect of each premises at which such business is carried on.
(b)Reduced rates for small proprietors
(1)In general
Subsection (a) shall be applied by substituting “$500” for “$1,000” with respect to any taxpayer the gross receipts of which (for the most recent taxable year ending before the 1st day of the taxable period to which the tax imposed by subsection (a) relates) are less than $500,000.
(2)Controlled group rules
All persons treated as 1 taxpayer under section 5061(e)(3) shall be treated as 1 taxpayer for purposes of paragraph (1).
(3)Certain rules to apply
For purposes of paragraph (1), rules similar to the rules of subparagraphs (B) and (C) of section 448(c)(3) shall apply.
(c)Penalty for failure to register
Any person engaged in a business referred to in subsection (a) who willfully fails to pay the tax imposed by subsection (a) shall be fined not more than $5,000, or imprisoned not more than 2 years, or both, for each such offense.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section 5731, acts Aug. 16, 1954, ch. 736, 68A Stat. 714; Sept. 2, 1958, Pub. L. 85–859, title II, § 202, 72 Stat. 1423, restricted shipment and delivery of tobacco materials to shipment and delivery pursuant to

Regulations

, prior to repeal by Pub. L. 89–44, title V, § 502(b)(7), title VII, § 701(d), June 21, 1965, 79 Stat. 151, 157, applicable on and after Jan. 1, 1966.

Amendments

2005—Subsecs. (c), (d). Pub. L. 109–59 redesignated subsec. (d) as (c) and struck out former subsec. (c). Text read as follows: “Rules similar to the rules of subpart G of part II of subchapter A of chapter 51 shall apply for purposes of this section.”

Statutory Notes and Related Subsidiaries

Effective Date

of 2005 AmendmentAmendment by Pub. L. 109–59 effective July 1, 2008, but inapplicable to taxes imposed for periods before such date, see section 11125(c) of Pub. L. 109–59, set out as a note under section 5002 of this title.

Effective Date

Section effective Jan. 1, 1988, see section 10512(h) of Pub. L. 100–203, set out as an

Effective Date

of 1987 Amendment note under section 5111 of this title.

Reference

Citations & Metadata

Citation

26 U.S.C. § 5731

Title 26, Internal Revenue Code

Last Updated

Sep 22, 2026

Release point: 119-110