§ 270.22a - Determination of sale price of large cigars removed on or after January 1, 1991.

(a) General rule. The tax imposed on large cigars is computed based on the price for which the large cigars are sold by the manufacturer. Large cigars are taxed at a percentage of the sale price, as prescribed by § 270.21. For example, for cigars removed during 1991 and 1992, if the price for which they are sold is $235.294 per thousand or less, the tax imposed will be 10.625% of such price. For large cigars sold for a price of more than $235.294 per thousand, the maximum tax is $25 per thousand for removals during 1991 and 1992. A similar computation, with the increased percent figure and maximum tax rate, is applicable for removals on or after January 1, 1993.

(b) Price for which sold. The “price” for which cigars are sold includes the total consideration paid for the cigars. Any charge which is made incident to placing the cigars in condition ready for use is included in the sale price. Similar rules to 26 U.S.C. 4216(a) and the regulations thereunder, relating to charges to be included in the price and excluded from the price, shall apply.

(c) Exclusions from price. The tax imposed by 26 U.S.C. chapter 52 or section 7652 is excluded in determining the price for which large cigars are sold. The amount of any retail sales tax imposed by any state or political subdivision thereof or the District of Columbia is likewise excluded (whether the liability for such tax is imposed on the vendor or vendee), if the retail sales tax is stated as a separate charge.

(d) Constructive sale price rules. Rules similar to the constructive sale price rules set forth in 26 U.S.C. 4216(b) and the implementing regulations in 26 CFR 48.4216(b)-1 through 48.4216(b)-4 shall be applied for purposes of determining the price for which large cigars are sold.

(e) Readjustments in sale price. Anticipated downward readjustments in sale price are not taken into account in computing the tax. The tax must be based upon the original price for which the cigars were sold unless the readjustments have actually been made prior to the close of the period for which the tax return is filed. However, if the price upon which the tax was computed is subsequently readjusted, credit may be taken against the tax due on a subsequent return of a claim for refund filed as provided in § 270.286.