PlainBillCongress, translated.Legislation. Context. Public interest.Referred to the House Committee on Ways and Means.
Congressional Research Service
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People & committees
Rep. Krishnamoorthi, Raja [D-IL-8] · D–IL
Legislative record
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Referred to the House Committee on Ways and Means.
Introduced in House
Introduced in House
Primary sources
Text links open the official source. We also preserved the text version used in the PlainBill explanation below.
Source last updated: Dec 5, 2025. Consult Congress.gov for the current record.
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PlainBill explanation
Based on the full Introduced in House · 2025-03-03 text. This explanation has not received human editorial review. This overview describes the proposal’s major provisions; it does not establish what its real-world effects would be.
The proposed End Tobacco Loopholes Act would raise federal tobacco taxes and add a tax on extracted, concentrated, or synthesized nicotine, including nicotine used for vaping. It would affect manufacturers and importers and people holding covered tobacco products for sale when rates increase, whether or not a prior tax was imposed. Qualifying medical and investigational uses would be excluded from the new taxable-nicotine category. Changes would take effect on different schedules, with annual inflation adjustments beginning after 2026.
This Act may be cited as the End Tobacco Loopholes Act.
Small cigarettes Section 5701(b)(1) of such Code is amended by striking $50.33 and inserting $100.66.
(h) Nicotine On taxable nicotine, manufactured in or imported into the United States, there shall be imposed a tax equal to the dollar amount specified in section 5701(b)(1) per 1,810 milligrams of nicotine (and a proportionate tax at the like rate on any fractional part thereof).
Except as otherwise provided in this subsection, the term taxable nicotine means any nicotine which has been extracted, concentrated, or synthesized.
On tobacco products manufactured in or imported into the United States which are removed before any tax increase date and held on such date for sale by any person, there is hereby imposed a tax in an amount equal to the excess of— (A) the tax which would be imposed under section 5701 of the Internal Revenue Code of 1986 on the article if the article had been removed on such date, over (B) the prior tax (if any) imposed under section 5701 of such Code on such article.
Such term shall not include any nicotine if the manufacturer or importer thereof demonstrates to the satisfaction of the Secretary of Health and Human Services that such nicotine will be used in— (A) a drug— (i) that is approved under section 505 of the Federal Food, Drug, and Cosmetic Act or licensed under section 351 of the Public Health Service Act; or (ii) for which an investigational use exemption has been authorized under section 505(i) of the Federal Food, Drug, and Cosmetic Act or under section 351(a) of the Public Health Service Act; or (B) a combination product (as described in section 503(g) of the Federal Food, Drug, and Cosmetic Act), the constituent parts of which were approved or cleared under section 505, 510(k), or 515 of such Act.
In the case of any calendar year beginning after 2026, the dollar amounts provided under this chapter shall each be increased
Except as provided in paragraphs (2) through (4), the amendments made by this section shall apply to articles removed (as defined in section 5702(j) of the Internal Revenue Code of 1986) after the last day of the month which includes the date of the enactment of this Act.
The proposal would replace the roll-your-own tobacco tax amount of $24.78 with $49.56. For pipe tobacco, it would replace the text “$2.8311 cents” with “$49.56.” These amendment instructions do not reproduce the existing provisions' quantity units.
(a) Tax parity for Roll-Your-Own tobacco Section 5701(g) of the Internal Revenue Code of 1986 is amended by striking $24.78 and inserting $49.56. (b) Tax parity for pipe tobacco Section 5701(f) of the Internal Revenue Code of 1986 is amended by striking $2.8311 cents and inserting $49.56.
For two existing smokeless-tobacco tax categories, the proposal would replace $1.51 with $26.84 and 50.33 cents with $10.74. The amendment instructions do not reproduce those categories' names or quantity units.
(c) Tax parity for smokeless tobacco (1) Section 5701(e) of the Internal Revenue Code of 1986 is amended— (A) in paragraph (1), by striking $1.51 and inserting $26.84; (B) in paragraph (2), by striking 50.33 cents and inserting $10.74;
A new smokeless-tobacco category would cover individual single-use or single-dose products containing, made from, or derived from tobacco or nicotine that are not intended to be smoked. Examples include lozenges, tablets, pills, pouches, and dissolvable strips. The proposed tax would be $100.66 per thousand units, and these units would be excluded from the two existing smokeless-tobacco definitions being amended.
(3) Smokeless tobacco sold in discrete single-use units On discrete single-use units, $100.66 per thousand.
(A) in paragraph (1), by striking or chewing tobacco and inserting , chewing tobacco, or discrete single-use unit; (B) in paragraphs (2) and (3), by inserting that is not a discrete single-use unit before the period in each such paragraph;
The term discrete single-use unit means any product containing, made from, or derived from tobacco or nicotine that— (A) is not intended to be smoked; and (B) is in the form of a lozenge, tablet, pill, pouch, dissolvable strip, or other discrete single-use or single-dose unit.
The proposal would double the listed tax amounts for small cigars and small cigarettes from $50.33 to $100.66, and for large cigarettes from $105.69 to $211.38. The amendment instructions do not reproduce the quantity units to which these amounts apply.
(d) Tax parity for small cigars Paragraph (1) of section 5701(a) of the Internal Revenue Code of 1986 is amended by striking $50.33 and inserting $100.66.
(h) Increasing tax on cigarettes (1) Small cigarettes Section 5701(b)(1) of such Code is amended by striking $50.33 and inserting $100.66. (2) Large cigarettes Section 5701(b)(2) of such Code is amended by striking $105.69 and inserting $211.38.
For large cigars, the proposal would replace rate language beginning with “52.75 percent” with a tax of $49.56 per pound, including proportional amounts for fractions of a pound, with a minimum of 10.066 cents per cigar. Treasury could issue guidance on weighing large cigars. The proposal would also delete section 5702(l), whose existing text is not supplied.
Paragraph (2) of section 5701(a) of the Internal Revenue Code of 1986 is amended by striking 52.75 percent and all that follows through the period and inserting the following: $49.56 per pound and a proportionate tax at the like rate on all fractional parts of a pound but not less than 10.066 cents per cigar.
The Secretary of the Treasury, or the Secretary's delegate, may issue guidance regarding the appropriate method for determining the weight of large cigars for purposes of calculating the applicable tax under section 5701(a)(2) of the Internal Revenue Code of 1986.
(3) Conforming amendment Section 5702 of such Code is amended by striking subsection (l).
The roll-your-own tobacco definition would expand to include processed tobacco removed for delivery or delivered to someone without a permit under section 5713. The added language expressly excludes processed tobacco removed for export.
(f) Tax parity for Roll-Your-Own tobacco and certain processed tobacco Subsection (o) of section 5702 of the Internal Revenue Code of 1986 is amended by inserting , and includes processed tobacco that is removed for delivery or delivered to a person other than a person with a permit provided under section 5713, but does not include removals of processed tobacco for exportation after wrappers thereof.
Extracted, concentrated, or synthesized nicotine manufactured in or imported into the United States would face a new tax, subject to the stated exceptions. For each 1,810 milligrams of nicotine, the tax would equal the dollar amount specified for small cigarettes, with proportional tax on fractional amounts.
(h) Nicotine On taxable nicotine, manufactured in or imported into the United States, there shall be imposed a tax equal to the dollar amount specified in section 5701(b)(1) per 1,810 milligrams of nicotine (and a proportionate tax at the like rate on any fractional part thereof).
Except as otherwise provided in this subsection, the term taxable nicotine means any nicotine which has been extracted, concentrated, or synthesized.
Small cigarettes Section 5701(b)(1) of such Code is amended by striking $50.33 and inserting $100.66.
Nicotine would be excluded from the new taxable-nicotine category if its manufacturer or importer demonstrates to the satisfaction of the Secretary of Health and Human Services that it will be used in a qualifying approved or licensed drug, an authorized investigational drug use, or a combination product whose parts received the specified approvals or clearances. The exclusion therefore covers some authorized research uses as well as approved products.
Such term shall not include any nicotine if the manufacturer or importer thereof demonstrates to the satisfaction of the Secretary of Health and Human Services that such nicotine will be used in— (A) a drug— (i) that is approved under section 505 of the Federal Food, Drug, and Cosmetic Act or licensed under section 351 of the Public Health Service Act; or (ii) for which an investigational use exemption has been authorized under section 505(i) of the Federal Food, Drug, and Cosmetic Act or under section 351(a) of the Public Health Service Act; or (B) a combination product (as described in section 503(g) of the Federal Food, Drug, and Cosmetic Act), the constituent parts of which were approved or cleared under section 505, 510(k), or 515 of such Act.
Products meeting the definitions of cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own tobacco would remain taxed in those categories even if their nicotine is concentrated or nicotine is added during manufacturing. The Secretary would have to issue regulations or guidance as necessary or appropriate, including to coordinate tobacco and nicotine taxation, protect revenue, and prevent double taxation.
Tobacco products meeting the definition of cigars, cigarettes, smokeless tobacco, pipe tobacco, and roll-your-own tobacco in this section shall be classified and taxed as such despite any concentration of the nicotine inherent in those products or any addition of nicotine to those products during the manufacturing process.
The Secretary shall prescribe such regulations or other guidance as is necessary or appropriate to carry out the purposes of this subsection, including regulations or other guidance for coordinating the taxation of tobacco products and taxable nicotine to protect revenue and prevent double taxation.
Taxable nicotine would be added to the tobacco-product definition. Anyone extracting, concentrating, or synthesizing nicotine would be treated as a taxable-nicotine manufacturer, and references to tobacco-product manufacturing and manufacturers would include them.
(3) Taxable nicotine treated as a tobacco product Section 5702(c) of such Code is amended by striking and roll-your-own tobacco and inserting roll-your-own tobacco, and taxable nicotine.
Any person who extracts, concentrates, or synthesizes nicotine shall be treated as a manufacturer of taxable nicotine (and as manufacturing such taxable nicotine).
Any reference to a manufacturer of tobacco products, or to manufacturing tobacco products, shall be treated as including a reference to a manufacturer of taxable nicotine, or to manufacturing taxable nicotine, respectively.
For calendar years after 2026, the proposal would increase the chapter's dollar amounts using a cost-of-living formula with a 2025 reference year. Adjusted amounts would be rounded upward to the next cent when necessary.
In the case of any calendar year beginning after 2026, the dollar amounts provided under this chapter shall each be increased by an amount equal to— (A) such dollar amount, multiplied by (B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year, determined by substituting ‘calendar year 2025’ for ‘calendar year 2016’ in subparagraph (A)(ii) thereof.
If any amount as adjusted under paragraph (1) is not a multiple of $0.01, such amount shall be rounded to the next highest multiple of $0.01.
The proposal would impose a “floor stocks” tax—an additional tax on inventory held for sale—on covered tobacco products manufactured domestically or imported and removed before a tax increase date. The amount would be the new applicable tax minus any prior tax imposed on the product; coverage would not depend on a prior tax having been imposed. The person holding the inventory would owe it.
On tobacco products manufactured in or imported into the United States which are removed before any tax increase date and held on such date for sale by any person, there is hereby imposed a tax in an amount equal to the excess of— (A) the tax which would be imposed under section 5701 of the Internal Revenue Code of 1986 on the article if the article had been removed on such date, over (B) the prior tax (if any) imposed under section 5701 of such Code on such article.
A person holding tobacco products on any tax increase date to which any tax imposed by paragraph (1) applies shall be liable for such tax.
Each person liable for the inventory tax would be allowed a credit of up to $500, limited to the tax owed on that date and subject to the bill's separately incorporated controlled-group rules. Payment would be due on or before the date 120 days after the tax increase takes effect, using a payment method prescribed by Treasury regulations.
Each person shall be allowed as a credit against the taxes imposed by paragraph (1) an amount equal to $500. Such credit shall not exceed the amount of taxes imposed by paragraph (1) on such date for which such person is liable.
(6) Controlled groups Rules similar to the rules of section 5061(e)(3) of such Code shall apply for purposes of this subsection.
The tax imposed by paragraph (1) shall be paid in such manner as the Secretary shall prescribe by regulations.
The tax imposed by paragraph (1) shall be paid on or before the date that is 120 days after the effective date of the tax rate increase.
The term Secretary means the Secretary of the Treasury or the Secretary’s delegate.
Covered products in foreign trade zones would also face the inventory tax despite other laws if internal revenue taxes had been determined or customs duties liquidated before the increase under the specified request procedure, or if the products were held under the specified Customs and Border Protection supervision.
Notwithstanding the Act of June 18, 1934 (commonly known as the Foreign Trade Zone Act, 48 Stat. 998, 19 U.S.C. 81a et seq.), or any other provision of law, any article which is located in a foreign trade zone on any tax increase date shall be subject to the tax imposed by paragraph (1) if— (A) internal revenue taxes have been determined, or customs duties liquidated, with respect to such article before such date pursuant to a request made under the first proviso of section 3(a) of such Act, or (B) such article is held on such date under the supervision of an officer of the United States Customs and Border Protection of the Department of Homeland Security pursuant to the second proviso of such section 3(a).
The inventory-tax provisions would use definitions from section 5702. Under a provision headed “Controlled groups,” they would apply rules similar to section 5061(e)(3); that referenced law is not supplied, so the details of those rules cannot be established here. The definition of “tax increase date” includes an exception referring to “subsection (j) thereof”; the supplied language leaves the referent unclear.
Any term used in this subsection which is also used in section 5702 of such Code shall have the same meaning as such term has in such section.
The term tax increase date means the effective date of any increase in any tobacco product excise tax rate pursuant to the amendments made by this section (other than subsection (j) thereof).
(6) Controlled groups Rules similar to the rules of section 5061(e)(3) of such Code shall apply for purposes of this subsection.
Existing tobacco-tax laws, including penalties, would apply to the inventory tax where applicable and consistent with the new provisions. Treasury could treat the person who ultimately bore that tax's cost as the person eligible for a credit or refund under those laws.
All provisions of law, including penalties, applicable with respect to the taxes imposed by section 5701 of such Code shall, insofar as applicable and not inconsistent with the provisions of this subsection, apply to the floor stocks taxes imposed by paragraph (1), to the same extent as if such taxes were imposed by such section 5701.
The Secretary may treat any person who bore the ultimate burden of the tax imposed by paragraph (1) as the person to whom a credit or refund under such provisions may be allowed or made.
Except for specified delayed or fixed-date provisions, the amendments would apply to products “removed,” as defined in the tax code, after the end of the month in which the bill becomes law. The source does not reproduce that legal definition of removal.
Except as provided in paragraphs (2) through (4), the amendments made by this section shall apply to articles removed (as defined in section 5702(j) of the Internal Revenue Code of 1986) after the last day of the month which includes the date of the enactment of this Act.
The new single-use-unit tax and related smokeless-tobacco definitions, along with the processed-tobacco definition change, would apply to products removed after the date six months after enactment.
(2) Discrete single-use units and processed tobacco The amendments made by subsections (c)(1)(C), (c)(2), and (f) shall apply to articles removed (as defined in section 5702(j) of the Internal Revenue Code of 1986) after the date that is 6 months after the date of the enactment of this Act.
The large-cigar amendments would apply to products removed after December 31, 2025. This is a fixed date in the proposal, not evidence that the changes took effect.
(3) Large cigars The amendments made by subsection (e) shall apply to articles removed after December 31, 2025.
The taxable-nicotine amendments would apply to products removed during calendar quarters beginning after the date 180 days following enactment.
(4) Taxable nicotine The amendments made by subsection (g) shall apply to articles removed in calendar quarters beginning after the date which is 180 days after the date of the enactment of this Act.
A taxable-nicotine manufacturer or importer lawfully operating when the bill becomes law would receive temporary protection from interruption under the newly applicable permit and bond requirements if it applies within 90 days of enactment. The protection would apply only to businesses newly subject to those requirements because of this bill and would last until final action on the application.
(l) Transition rule for permit and bond requirements A person which is lawfully engaged in business as a manufacturer or importer of taxable nicotine (within the meaning of subchapter A of chapter 52 of the Internal Revenue Code of 1986, as amended by this section) on the date of the enactment of this Act, first becomes subject to the requirements of subchapter B of chapter 52 of such Code by reason of the amendments made by this section, and submits an application under such subchapter B to engage in such business not later than 90 days after the date of the enactment of this Act, shall not be denied the right to carry on such business by reason of such requirements before final action on such application.
The supplied official-actions snapshot, updated December 5, 2025, records introduction in the House and referral to the House Committee on Ways and Means on March 3, 2025. It does not establish later legislative action or enactment.
Source snapshot updated 2025-12-05T21:32:31Z. 2025-03-03: Referred to the House Committee on Ways and Means. 2025-03-03: Introduced in House
A closer look
Reviewed version: Introduced in House · 2025-03-03. These findings describe provisions and who may benefit; they are not judgments of waste, corruption, or motive.
This review covers the supplied bill text. “None identified” does not rule out provisions in later versions or accompanying reports and disclosures.
Provisions outside the bill’s main subject, or policy changes attached to appropriations.
None identified in the reviewed text
No unrelated provision or policy change attached to appropriations was identified in the complete supplied introduced text. This conclusion applies only to that version and does not establish absence in other versions or accompanying materials.
Spending directed to particular recipients or places outside ordinary competitive or formula-based allocation.
None identified in the reviewed text
No congressionally directed spending for particular recipients or places was identified in the complete supplied introduced text. This conclusion applies only to that version and does not establish absence or formal earmark status in other versions or accompanying materials.
Narrow exceptions, exemptions, or preferential treatment that warrant a closer look.
Findings to examine
The complete supplied introduced text contains narrow exceptions warranting scrutiny under this category. Classification does not establish that the benefits are unjustified.
Manufacturers and importers whose nicotine is destined for qualifying medical products or authorized investigational drug uses would receive an exclusion from the new taxable-nicotine category. They would have to demonstrate the qualifying use to the satisfaction of the Secretary of Health and Human Services. This is a targeted exception to the proposal's general coverage of extracted, concentrated, or synthesized nicotine.
Except as otherwise provided in this subsection, the term taxable nicotine means any nicotine which has been extracted, concentrated, or synthesized.
Such term shall not include any nicotine if the manufacturer or importer thereof demonstrates to the satisfaction of the Secretary of Health and Human Services that such nicotine will be used in— (A) a drug— (i) that is approved under section 505 of the Federal Food, Drug, and Cosmetic Act or licensed under section 351 of the Public Health Service Act; or (ii) for which an investigational use exemption has been authorized under section 505(i) of the Federal Food, Drug, and Cosmetic Act or under section 351(a) of the Public Health Service Act; or (B) a combination product (as described in section 503(g) of the Federal Food, Drug, and Cosmetic Act), the constituent parts of which were approved or cleared under section 505, 510(k), or 515 of such Act.
Taxable-nicotine manufacturers and importers lawfully operating on the enactment date would receive a limited transition protection if the bill first subjects them to the referenced permit and bond requirements and they submit an application within 90 days of enactment. Those requirements could not be used to deny their continued operation before final action on the application. This is a temporary exception for qualifying existing businesses as the bill extends tobacco-product rules to taxable nicotine; it does not provide a general exemption from the new tax.
(3) Taxable nicotine treated as a tobacco product Section 5702(c) of such Code is amended by striking and roll-your-own tobacco and inserting roll-your-own tobacco, and taxable nicotine.
(l) Transition rule for permit and bond requirements A person which is lawfully engaged in business as a manufacturer or importer of taxable nicotine (within the meaning of subchapter A of chapter 52 of the Internal Revenue Code of 1986, as amended by this section) on the date of the enactment of this Act, first becomes subject to the requirements of subchapter B of chapter 52 of such Code by reason of the amendments made by this section, and submits an application under such subchapter B to engage in such business not later than 90 days after the date of the enactment of this Act, shall not be denied the right to carry on such business by reason of such requirements before final action on such application.
Full text preserved for this analysis. Legislative record snapshot: Dec 5, 2025. How PlainBill uses AI