Tax News

CCH (cch.taxgroup.com) reports:

  The Senate Finance Committee on January 15 approved legislation to renew and expand the State Children's Health Insurance Program (SCHIP) by a vote of 12 to 7. The $31.5-billion measure would fund investment in the SCHIP program with a 61-cent increase in federal tax on cigarettes, with proportional increases for other tobacco products, raising approximately $65 million over 10 years. The House passed a similar measure (the Children's Health Insurance Program Reauthorization Bill of 2009 (CHIPRA) (HR 2)) on January 14 by a vote of 289 to 13. The full Senate is expected to take up its version during the week beginning January 19.

  The revenue would primarily be raised through increases in tobacco excise tax rates and, to a lesser degree, by modifying certain definitions pertaining to tobacco products. The measure would modify the definition of roll-your-own tobacco and would strengthen regulatory and enforcement authority with respect to tobacco and alcohol. In addition, the bill would modify corporate quarterly estimated tax payments, increasing the applicable percentage for 2013 (120.00) created under the Tax Increase Prevention Act of 2005 (TIPRA) (P.L. 109-222), by 0.5 percentage points.

  Other provisions would tighten reporting and recordkeeping requirements for permits and inventory, clarify the three-year statute of limitations pertaining to excise taxes imposed on imported alcohol, tobacco products and cigarette papers and tubes, and allow the Treasury Department broader authority to revoke licenses for violations of the tax code and impose an immediate tax on unlawfully manufactured tobacco products, including cigarette papers and tubes. Additional provisions would allow the use of tax information provided under Code Sec. 6103(o) in tobacco assessments and provide for a study of the amount of lost tax revenue through tobacco smuggling in the United States.

  By Jeff Carlson, CCH News Staff

Children's Health Insurance Program Reauthorization Act of 2009, as Passed by the House on January 14, 2009, HR 2