# § 5704. Exemption from tax
**(a)** **Tobacco products furnished for employee use or experimental purposes** Tobacco products may be furnished by a manufacturer of such products, without payment of tax, for use or consumption by employees or for experimental purposes, in such quantities, and in such manner as the Secretary shall by regulation prescribed.
**(b)** **Tobacco products and cigarette papers and tubes transferred or removed in bond from domestic factories and export warehouses** A manufacturer or export warehouse proprietor may transfer tobacco products and cigarette papers and tubes, without payment of tax, to the bonded premises of another manufacturer or export warehouse proprietor, or remove such articles, without payment of tax, for shipment to a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States, or for consumption beyond the jurisdiction of the internal revenue laws of the United States; and manufacturers may similarly remove such articles for use of the United States; in accordance with such regulations and under such bonds as the Secretary shall prescribe. Tobacco products and cigarette papers and tubes may not be transferred or removed under this subsection unless such products or papers and tubes bear such marks, labels, or notices as the Secretary shall by regulations prescribe.
**(c)** **Tobacco products and cigarette papers and tubes released in bond from customs custody** Tobacco products and cigarette papers and tubes, imported or brought into the United States, may be released from customs custody, without payment of tax, for delivery to the proprietor of an export warehouse, or to a manufacturer of tobacco products or cigarette papers and tubes if such articles are not put up in packages, in accordance with such regulations and under such bond as the Secretary shall prescribe.
**(d)** **Tobacco products and cigarette papers and tubes exported and returned** Tobacco products and cigarette papers and tubes classifiable under item 804.00 of title I of the Tariff Act of 1930 (relating to duty on certain articles previously exported and returned) may be released from customs custody, without payment of that part of the duty attributable to the internal revenue tax for delivery to the original manufacturer of such tobacco products or cigarette papers and tubes or to the proprietor of an export warehouse authorized by such manufacturer to receive such articles, in accordance with such regulations and under such bond as the Secretary shall prescribe. Upon such release such products, papers, and tubes shall be subject to this chapter as if they had not been exported or otherwise removed from internal-revenue bond.
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**Source Credit**: (Aug. 16, 1954, ch. 736, 68A Stat. 708; Pub. L. 85–859, title II, § 202, Sept. 2, 1958, 72 Stat. 1418; Pub. L. 88–342, § 1(b), June 30, 1964, 78 Stat. 234; Pub. L. 89–44, title V, § 502(b)(4), June 21, 1965, 79 Stat. 151; Pub. L. 94–455, title XIX, §§ 1905(a)(26), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1821, 1834; Pub. L. 99–509, title VIII, § 8011(a)(2), Oct. 21, 1986, 100 Stat. 1952; Pub. L. 101–239, title VII, § 7508(a), Dec. 19, 1989, 103 Stat. 2370; Pub. L. 105–33, title IX, § 9302(h)(1)(A), Aug. 5, 1997, 111 Stat. 673; Pub. L. 106–476, title IV, § 4002(b), Nov. 9, 2000, 114 Stat. 2177.)
## Editorial Notes
### References in Text
Item 804.00 of title I of the Tariff Act of 1930, referred to in subsec. (d), was classified to item 804.00 of the Tariff Schedules of the United States. The Tariff Schedules of the United States were replaced by the Harmonized Tariff Schedule of the United States. The Harmonized Tariff Schedule of the United States is not set out in the Code. See Publication of Harmonized Tariff Schedule note set out under , Customs Duties.
### Amendments
2000—Subsec. (d). substituted “the original manufacturer of such” for “a manufacturer of” and inserted “authorized by such manufacturer to receive such articles” after “proprietor of an export warehouse”.
1997—Subsec. (b). inserted at end “Tobacco products and cigarette papers and tubes may not be transferred or removed under this subsection unless such products or papers and tubes bear such marks, labels, or notices as the Secretary shall by regulations prescribe.”
1989—Subsec. (c). inserted “or to a manufacturer of tobacco products or cigarette papers and tubes if such articles are not put up in packages,” after “export warehouse,”.
1986—Subsec. (c). struck out “to a manufacturer of tobacco products or cigarette papers and tubes or” after “for delivery”.
1976—Subsecs. (a), (b). , struck out “or his delegate” after “Secretary”.
Subsecs. (c), (d). , §§ 1905(a)(26), 1906(b)(13)(A), inserted “or to the proprietor of an export warehouse” after “to a manufacturer of tobacco products or cigarette papers and tubes” and struck out “or his delegate” after “Secretary”.
1965—Subsec. (c). , redesignated subsec. (d) as (c), struck out all references to tobacco materials, and repealed former subsec. (c) which related to tobacco materials shipped or delivered in bond.
Subsecs. (d), (e). , redesignated subsec. (e) as (d). Former subsec. (d) redesignated (c).
1964—Subsec. (e). added subsec. (e).
1958—Subsec. (b). included transfers by export warehouse proprietors, and substituted “tobacco products and cigarette papers and tubes” for “articles”, before “without payment of tax”.
Subsec. (c). authorized shipments without payment of tax of tobacco stems and waste only, to any person for use by him as fertilizer or insecticide or in the production of fertilizer, insecticide, or nicotine.
Subsec. (d). substituted “tobacco products, cigarette papers and tubes” for “articles” wherever appearing, and struck out provisions which related to delivery to bonded premises of manufacturers and dealers.
## Statutory Notes and Related Subsidiaries
### Effective Date of 2000 Amendment
> “The amendments made by this section [amending this section and sections 5754 and 5761 of this title] shall take effect 90 days after the date of the enactment of this Act [Nov 9, 2000].”
, , , provided that:
### Effective Date of 1997 Amendment
Amendment by applicable to articles removed, as defined in , after , with transition rule, see , set out as a note under .
### Effective Date of 1989 Amendment
> “The amendment made by subsection (a) [amending this section] shall apply to articles imported or brought into the United States after the date of the enactment of this Act [
>
> ].”
, , , provided that:
### Effective Date of 1986 Amendment
Amendment by applicable to articles imported, entered for warehousing, or brought into the United States or a foreign trade zone after , see , set out as a note under .
### Effective Date of 1976 Amendment
Amendment by effective on first day of first month which begins more than 90 days after , see , set out as a note under .
### Effective Date of 1965 Amendment
Amendment by applicable on and after , see , set out as a note under .
### Effective Date of 1964 Amendment
, , , provided that the amendment made by shall apply with respect to articles entered, or withdrawn from warehouse, for consumption after .
### Effective Date of 1958 Amendment
Amendment by effective , see , set out as an Effective Date note under .
### Report
> “The Secretary of the Treasury shall report to Congress on the impact of requiring export warehouses to be authorized by the original manufacturer to receive relanded export-labeled cigarettes.”
, , , provided that: