Title 26 — Internal Revenue CodeRelease 119-73
§5734 Application of State Laws
Title 26 › Subtitle Subtitle E— Alcohol, Tobacco, and Certain Other Excise Taxes › Chapter 52— TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES › Subchapter D— Occupational Tax › § 5734
Summary
Paying the federal tax for carrying on a tobacco-related trade or business does not protect you from state penalties for running that business, and it does not make the business legal where state or local law forbids it. States may still impose their own taxes on the same trade or business.
Full Legal Text
Title 26, §5734
Internal Revenue Code — Source: USLM XML via OLRC
The payment of any tax imposed by this subchapter for carrying on any trade or business shall not be held to exempt any person from any penalty or punishment provided by the laws of any State for carrying on such trade or business within such State, or in any manner to authorize the commencement or continuance of such trade or business contrary to the laws of such State or in places prohibited by municipal law; nor shall the payment of any such tax be held to prohibit any State from placing a duty or tax on the same trade or business, for State or other purposes.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
Amendments
2005—Pub. L. 109–59 renumbered section 5145 of this title as this section, transferred section to this subchapter, and substituted “this subchapter” for “this part” in text.
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.
Reference
Citations & Metadata
Citation
26 U.S.C. § 5734
Title 26 — Internal Revenue Code
Last Updated
Apr 6, 2026
Release point: 119-73