Inventory - Export Warehouse Proprietor

In general, chapter 52 of the Internal Revenue Code (IRC, 26 U.S.C. chapter 52) imposes a Federal excise tax on all tobacco products and cigarette papers and tubes manufactured in, or imported into, the United States, while exempting such articles removed for export, as well as all processed tobacco, from that tax. Export warehouses receive and store such non-taxpaid articles until they are removed without payment of tax for export to a foreign country, Puerto Rico, or the U.S. Virgin Islands, or for consumption beyond the internal revenue laws of the United States. In addition, section 5721 of the IRC requires export warehouse proprietors to take an inventory of all tobacco products, cigarette papers and tubes, and processed tobacco on hand at the commencement of business, the conclusion of business, and at other times as the Secretary of the Treasury shall prescribe by regulation. Under that IRC authority, the TTB regulations in 27 CFR part 44 require all export warehouse proprietors to take and report an inventory on TTB F 5220.3 at the opening and closing of their business, when certain changes in control of the business occur, and when required to by the appropriate TTB officer. As authorized by section 5741 of the IRC, the TTB regulations in part 44 also require export warehouse proprietors to retain record copies their inventory reports for 3 years following the close of the calendar year in which the inventory was taken, available for inspection by any appropriate TTB officer upon request. TTB uses the collected information to protect the revenue. Because export warehouse proprietors hold untaxed tobacco products and cigarette papers and tubes until such articles are exported without payment of tax, transferred in bond to another export warehouse, or returned to the manufacturer, TTB uses these inventories to establish a contingent Federal excise tax liability on such articles. These inventories also aid TTB in detecting diversion of untaxed articles into the taxable domestic market. In addition, inventories of processed tobacco, which is not subject to tax, help TTB detect and prevent diversion of materials used for making tobacco products to unauthorized manufacturers who would not be accountable to TTB.

The latest form for Inventory - Export Warehouse Proprietor expires 2026-06-30 and can be found here.