We previously reported that in February 2011, Philip Morris filed a federal lawsuit challenging the United States Department of Agriculture’s (“USDA”) calculation of tobacco buyout assessments under the Fair and Equitable Tobacco Reform Act of 2004 (“FETRA”) for fiscal years 2011-2014.  The lawsuit challenged a USDA regulation providing that buyout assessments for large cigars for fiscal years 2011-2014 would be calculated using the federal excise tax rate (“FET”) in effect in fiscal year 2005, rather than the new increased FET rates that took effect under the Children’s Heath Insurance Program Reauthorization Act (“CHIPRA”) in April 2009.

On June 21, 2012, the Alcohol and Tobacco Tax and Trade Bureau (TTB) of the U.S. Treasury Department issued final regulations, effective immediately, governing permit and related requirements for manufacturers and importers of processed tobacco.  TTB also issued new regulations relating to the definition of roll-your-own tobacco.  However, TTB deferred issuing regulations on perhaps the most controversial issue — the distinction between pipe tobacco and roll-your-own cigarette tobacco for federal excise tax purposes.