• May 21, 2024

FDA: Premium Cigars Exempt from User Fees

 FDA: Premium Cigars Exempt from User Fees

Image: J A Nicoli

Image: J A Nicoli

The U.S. Food and Drug Administration will not assess user fees for premium cigars in the fourth quarter of fiscal year 2024, the agency told manufacturers and distributors, according to Halfwheel.

The statement follows last month’s outcome of Cigar Association of America et al. v. United States Food and Drug Administration et al., which led to deeming regulations not being applied to cigars that meet the definition of “premium cigar.”

User fees help fund the Center for Tobacco Products. The amount of user fees is set by Congress; companies that import or manufacture cigarettes, roll-your-own products, snuff, chewing tobacco, cigars or pipe tobacco are assessed fees, and individual shares are calculated based on excise taxes paid on each product compared to the total amount of excise taxes paid by all products.

The FDA, however, does not know whether a cigar company is selling premium cigars, nonpremium cigars or a mixture of both. Due to this, the FDA is asking companies to submit dispute letters within 45 days of the assessment of user fees. The agency is allowing companies the option of either paying the full amount of user fees with the intent of getting refunded for user fees assessed to premium cigars or paying what the company believes it will owe for nonpremium cigars.

The FDA has stated that it will introduce a better process going forward, but it has not released information regarding what that will look like.

There was no mention as to whether the FDA plans to refund user fees paid for premium cigars from August 2016 to the second quarter of fiscal year 2023.