Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 64-27

1964-1 C.B. 593

Caution: Obsoleted by Rev. Rul. 66-22

IRS Headnote

A retail dealer in tobacco products may blend and repackage or merely repackage taxpaid manufactured tobacco for `over-the-counter' delivery to waiting customers without qualifying as a manufacturer of tobacco products; however, if for other than `over-the-counter' delivery to waiting customers he must qualify as a manufacturer of tobacco products.

Revenue Ruling 55-550, C.B. 1955-2, 475, superseded.

Full Text

Rev. Rul. 64-27 /1/

A question has been raised whether a retail dealer in tobacco products may mix blends of taxpaid smoking tobacco and thereafter repackage the taxpaid tobacco for sale to waiting customers or to retail tobacco stores without qualifying as a manufacturer of tobacco products.

Under section 5751(a)(3) of the Internal Revenue Code of 1954 and section 296.166 of the Miscellaneous Regulations Relating to Tobacco Materials, Tobacco Products, and Cigarette Papers and Tubes, all tobacco products purchased, received, possessed, offered for sale, sold or otherwise disposed of, by a dealer ( wholesale or retail) must be in proper packages (as put up by the manufacturer or importer) which bear the mark and notice as prescribed in the Manufacture of Tobacco Products Regulations and the Regulations relating to the Importation of Tobacco Materials, Tobacco Products, and Cigarette Papers and Tubes. Tobacco products may be sold or offered for sale at retail from such packages, provided the products remain in the packages until removed by the customer or in the presence of the customer.

A retail dealer may blend and repackage or merely repackage taxpaid manufactured tobacco for immediate delivery to waiting customers without qualifying as a manufacturer. Where a dealer desires to blend and repackage or merely repackage taxpaid manufactured tobacco for other than `over-the-counter' delivery to waiting customers, he must qualify as a manufacturer of tobacco products under chapter 52 of the Code and the Manufacture of Tobacco Products Regulations, and comply with all requirements relating to manufactured tobacco, including putting up the tobacco in packages with the required mark and notice and paying tax on such tobacco. However, where he qualifies as a manufacturer of tobacco products, manufactured tobacco may be received in bond (without payment of tax) and the tax determined at the time of removal of the product and paid on the basis of a return in accordance with the provisions of the above regulations.

Revenue Ruling 55-550, C.B. 1955-2, 475, is hereby superseded.

/1/ Prepared pursuant to Revenue Procedure 62-24, C.B. 1962-2, 489.