Title VII, SEC. 7111. INCREASE IN EXCISE TAXES ON TOBACCO _PRODUCTS. 
      (a) Cigarettes. Subsection (b) of section 5701 is amended 

        (1) by striking ``$12 per thousand ($10 per thousand on cigarettes 
      removed during 1991 or 1992)'' in paragraph (1) and inserting ``$49.50 
      per thousand'', and 

        (2) by striking ``$25.20 per thousand ($21 per thousand on cigarettes 
      removed during 1991 or 1992)'' in paragraph (2) and inserting ``$103.95 
      per thousand''. 

      (b) Cigars. Subsection (a) of section 5701 is amended 

        (1) by striking ``$1.125 cents per thousand (93.75 cents per thousand 
      on cigars removed during 1991 or 1992)'' in paragraph (1) and inserting 
      ``$38.62\1/2\ per thousand'', and 

        (2) by striking ``equal to'' and all that follows in paragraph (2) and 
      inserting ``equal to 52.594 percent of the price for which sold but not 
      more than $123.75 per thousand.'' 

      (c) Cigarette Papers. Subsection (c) of section 5701 is amended by 
    striking ``0.75 cent (0.625 cent on cigarette papers removed during 1991 or 
    1992)'' and inserting ``3.09 cents''. 

      (d) Cigarette Tubes. Subsection (d) of section 5701 is amended by 
    striking ``1.5 cents (1.25 cents on cigarette tubes removed during 1991 or 
    1992)'' and inserting ``6.19 cents''. 

      (e) Smokeless Tobacco. Subsection (e) of section 5701 is amended 

        (1) by striking ``36 cents (30 cents on snuff removed during 1991 or 
      1992)'' in paragraph (1) and inserting ``$12.86'', and 

        (2) by striking ``12 cents (10 cents on chewing tobacco removed during 
      1991 or 1992)'' in paragraph (2) and inserting ``$12.62''. 

      (f) Pipe Tobacco. Subsection (f) of section 5701 is amended by striking 
    ``67.5 cents (56.25 cents on pipe tobacco removed during 1991 or 1992)'' 
    and inserting ``$13.17\1/2\''. 

      (g) Effective Date. The amendments made by this section shall apply to 
    articles removed (as defined in section 5702(k) of the Internal Revenue 
    Code of 1986, as amended by this Act) after September 30, 1994. 

      (h) Floor Stocks Taxes. 

        (1) Imposition of tax. On tobacco products and cigarette papers and 
      tubes manufactured in or imported into the United States which are 
      removed before October 1, 1994, 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 or 7652 of such 
        Code on such article. 

        (2) Authority to exempt cigarettes held in vending machines. To the 
      extent provided in regulations prescribed by the Secretary, no tax shall 
      be imposed by paragraph (1) on cigarettes held for retail sale on October 
      1, 1994, by any person in any vending machine. If the Secretary provides 
      such a benefit with respect to any person, the Secretary may reduce the 
      $500 amount in paragraph (3) with respect to such person. 

        (3) Credit against tax. 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) for 
      which such person is liable. 

        (4) Liability for tax and method of payment. 

          (A) Liability for tax. A person holding cigarettes on October 1, 
        1994, to which any tax imposed by paragraph (1) applies shall be liable 
        for such tax. 

          (B) Method of payment. The tax imposed by paragraph (1) shall be paid 
        in such manner as the Secretary shall prescribe by regulations. 

          (C) Time for payment. The tax imposed by paragraph (1) shall be paid 
        on or before December 31, 1994. 

        (5) Articles in foreign trade zones. Notwithstanding the Act of June 
      18, 1934 (48 Stat. 998, 19 U.S.C. 81a) and any other provision of law, 
      any article which is located in a foreign trade zone on October 1, 1994, 
      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 1st proviso of section 3(a) of such Act, or 

          (B) such article is held on such date under the supervision of a 
        customs officer pursuant to the 2d proviso of such section 3(a). 

        (6) Definitions. For purposes of this subsection 

          (A) In general. Terms used in this subsection which are also used in 
        section 5702 of the Internal Revenue Code of 1986 shall have the 
        respective meanings such terms have in such section, and such term 
        shall include articles first subject to the tax imposed by section 5701 
        of such Code by reason of the amendments made by this Act. 

          (B) Secretary. The term ``Secretary'' means the Secretary of the 
        Treasury or his delegate. 

        (7) Controlled groups. Rules similar to the rules of section 5061(e)(3) 
      of such Code shall apply for purposes of this subsection. 

        (8) Other laws applicable. 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.