There’s another added cost of doing business for cigar companies, at least for those that sell tobacco products in the United States—quarterly user fees. Whether a large or small cigar company, most will have to pay the Food and Drug Administration user fees that could add up to a combined $65 million per year for the industry.
Last month, the FDA expanded its authority over tobacco products by issuing a final rule that placed all tobacco products, including cigars, under federal regulation. As part of the new ruling, domestic manufacturers and importers of cigars are now required to submit federal excise tax information to the FDA on a monthly basis, starting August 8, 2016, under the Federal Food, Drug, and Cosmetic Act (FD&C Act). The FDA will use this data to calculate user fees for cigar companies on a quarterly basis. User fees will be paid directly to the FDA, and will fund the organization’s ongoing tobacco regulation activities.
“Tobacco product user fees are the sole source of funding for FDA’s regulation of tobacco products,” stated the FDA in its official user fee document issued on May 10. “Therefore, FDA considers these fees to be critical to the agency’s ability to achieve its mission to protect and promote the public health. User fees provide FDA with a source of stable, consistent funding that has made possible our implementation of the Tobacco Control Act.”
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