H.R. 4404: Hookah Clarification Act of 2025

The Hookah Clarification Act of 2025 proposes to amend the Internal Revenue Code to establish a tax specifically for waterpipe tobacco. Here are the key elements of the bill:

Definition of Waterpipe Tobacco

The bill defines "waterpipe tobacco" as any tobacco product that is consumed or intended for consumption in a waterpipe. This includes various terms such as hookah tobacco, shisha, maassel, narghile, and argileh.

Tax Rates Established

The bill introduces specific tax rates for different types of tobacco:

• Pipe Tobacco: A tax of $2.8311 per pound will be applied to pipe tobacco produced or imported into the United States, excluding those categorized as waterpipe tobacco.
• Waterpipe Tobacco: A tax of $0.5662 per pound will be imposed on waterpipe tobacco, with a proportionate tax applied to any fractional parts of a pound.

Implementation and Impact

The new tax rates will take effect for tobacco that is manufactured or imported after the bill is enacted into law. This means that the adjustments to the tax code will not apply retroactively to previously imported or manufactured products.

Conforming Amendments

The amendments include changes to the existing tax code to incorporate the definition and taxation of waterpipe tobacco. This clarifies how different types of tobacco are treated under the law.

Purpose of the Bill

While the bill does not specify its intended outcomes, establishing a tax on waterpipe tobacco is likely aimed at regulating the market for these products, potentially addressing public health concerns related to their consumption.

Relevant Companies

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