Recordkeeping for Tobacco Products Removed in Bond from a Manufacturer's Premises for Experimental Purposes -- 27 CFR 40.232(e)

The Internal Revenue Code (IRC) at 26 U.S.C. 5704(a) provides that manufacturers of tobacco products (cigars, cigarettes, smokeless tobacco, pipe tobacco, and roll-your-own tobacco) may remove such products for experimental purposes without payment of Federal excise tax, as prescribed by regulation. Under that IRC authority, the Alcohol and Tobacco Tax and Trade Bureau (TTB) regulations at 27 CFR 40.232(e) require tobacco product manufacturers to keep certain usual and customary business records documenting the amount, kind, recipient, use, and disposition of tobacco products removed for experimental purposes outside of a factory. These records, which are subject to TTB inspection. are necessary to protect the revenue as they allow TTB to account for the lawful use and disposition of nontaxpaid tobacco products removed from a factory and detect diversion of such products into the domestic market.

The latest form for Recordkeeping for Tobacco Products Removed in Bond from a Manufacturer's Premises for Experimental Purposes -- 27 CFR 40.232(e) expires 2026-06-30 and can be found here.