[USC03] 26 USC Subtitle E, CHAPTER 51, Subchapter A, PART I: GALLONAGE TAXES
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26 USC Subtitle E, CHAPTER 51, Subchapter A, PART I: GALLONAGE TAXES
From Title 26—INTERNAL REVENUE CODESubtitle E—Alcohol, Tobacco, and Certain Other Excise TaxesCHAPTER 51—DISTILLED SPIRITS, WINES, AND BEERSubchapter A—Gallonage and Occupational Taxes

PART I—GALLONAGE TAXES

Subpart
A.
Distilled spirits.
[B.
Repealed.]
C.
Wines.
D.
Beer.
E.
General provisions.

        

Amendments

1979Pub. L. 96–39, title VIII, §807(b)(1), July 26, 1979, 93 Stat. 290, struck out item relating to subpart B "Rectification".

Subpart A—Distilled Spirits

Sec.
5001.
Imposition, rate, and attachment of tax.
5002.
Definitions.
5003.
Cross references to exemptions, etc.
5004.
Lien for tax.
5005.
Persons liable for tax.
5006.
Determination of tax.
5007.
Collection of tax on distilled spirits.
5008.
Abatement, remission, refund, and allowance for loss or destruction of distilled spirits.
[5009.
Repealed.]
5010.
Credit for wine content and for flavors content.
5011.
Income tax credit for average cost of carrying excise tax.

        

Prior Provisions

A prior subpart A, comprising sections 5001 to 5012, related to tax on distilled spirits, prior to the general revision of this chapter by Pub. L. 85–859, title II, 201, Sept. 2, 1958, 72 Stat. 1313.

Amendments

2005Pub. L. 109–59, title XI, §11126(c), Aug. 10, 2005, 119 Stat. 1958, added item 5011.

1980Pub. L. 96–598, §6(b), Dec. 24, 1980, 94 Stat. 3489, added item 5010.

1979Pub. L. 96–39, title VIII, §807(b)(2), July 26, 1979, 93 Stat. 290, struck out item 5009 "Drawback".

§5001. Imposition, rate, and attachment of tax

(a) Rate of tax

(1) General

There is hereby imposed on all distilled spirits produced in or imported into the United States a tax at the rate of $13.50 on each proof gallon and a proportionate tax at the like rate on all fractional parts of a proof gallon.

(2) Products containing distilled spirits

All products of distillation, by whatever name known, which contain distilled spirits, on which the tax imposed by law has not been paid, and any alcoholic ingredient added to such products, shall be considered and taxed as distilled spirits.

(3) Wines containing more than 24 percent alcohol by volume

Wines containing more than 24 percent of alcohol by volume shall be taxed as distilled spirits.

(4) Distilled spirits withdrawn free of tax

Any person who removes, sells, transports, or uses distilled spirits, withdrawn free of tax under section 5214(a) or section 7510, in violation of laws or regulations now or hereafter in force pertaining thereto, and all such distilled spirits shall be subject to all provisions of law relating to distilled spirits subject to tax, including those requiring payment of the tax thereon; and the person so removing, selling, transporting, or using the distilled spirits shall be required to pay such tax.

(5) Denatured distilled spirits or articles

Any person who produces, withdraws, sells, transports, or uses denatured distilled spirits or articles in violation of laws or regulations now or hereafter in force pertaining thereto, and all such denatured distilled spirits or articles shall be subject to all provisions of law pertaining to distilled spirits that are not denatured, including those requiring the payment of tax thereon; and the person so producing, withdrawing, selling, transporting, or using the denatured distilled spirits or articles shall be required to pay such tax.

(6) Fruit-flavor concentrates

If any volatile fruit-flavor concentrate (or any fruit mash or juice from which such concentrate is produced) containing one-half of 1 percent or more of alcohol by volume, which is manufactured free from tax under section 5511, is sold, transported, or used by any person in violation of the provisions of this chapter or regulations promulgated thereunder, such person and such concentrate, mash, or juice shall be subject to all provisions of this chapter pertaining to distilled spirits and wines, including those requiring the payment of tax thereon; and the person so selling, transporting, or using such concentrate, mash, or juice shall be required to pay such tax.

(7) Imported liqueurs and cordials

Imported liqueurs and cordials, or similar compounds, containing distilled spirits, shall be taxed as distilled spirits.

(8) Imported distilled spirits withdrawn for beverage purposes

There is hereby imposed on all imported distilled spirits withdrawn from customs custody under section 5232 without payment of the internal revenue tax, and thereafter withdrawn from bonded premises for beverage purposes, an additional tax equal to the duty which would have been paid had such spirits been imported for beverage purposes, less the duty previously paid thereon.

(9) Alcoholic compounds from Puerto Rico

Except as provided in section 5314, upon bay rum, or any article containing distilled spirits, brought from Puerto Rico into the United States for consumption or sale there is hereby imposed a tax on the spirits contained therein at the rate imposed on distilled spirits produced in the United States.

(b) Time of attachment on distilled spirits

The tax shall attach to distilled spirits as soon as this substance is in existence as such, whether it be subsequently separated as pure or impure spirits, or be immediately, or at any subsequent time, transferred into any other substance, either in the process of original production or by any subsequent process.

(c) Cross reference

For provisions relating to the tax on shipments to the United States of taxable articles from Puerto Rico and the Virgin Islands, see section 7652.

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1314; amended Pub. L. 86–75, §3(a)(2), (3), June 30, 1959, 73 Stat. 157; Pub. L. 86–564, title II, §202(a)(4), (5), June 30, 1960, 74 Stat. 290; Pub. L. 87–72, §3(a)(4), (5), June 30, 1961, 75 Stat. 193; Pub. L. 87–508, §3(a)(3), (4), June 28, 1962, 76 Stat. 114; Pub. L. 88–52, §3(a)(4), (5), June 29, 1963, 77 Stat. 72; Pub. L. 88–348, §2(a)(4), (5), June 30, 1964, 78 Stat. 237; Pub. L. 89–44, title V, §501(a), June 21, 1965, 79 Stat. 150; Pub. L. 96–39, title VIII, §§802, 805(d), July 26, 1979, 93 Stat. 273, 278; Pub. L. 98–369, div. A, title I, §27(a)(1), July 18, 1984, 98 Stat. 507; Pub. L. 101–508, title XI, §11201(a)(1), Nov. 5, 1990, 104 Stat. 1388–415; Pub. L. 103–465, title I, §136(a), Dec. 8, 1994, 108 Stat. 4841.)

Prior Provisions

A prior section 5001, acts Aug. 16, 1954, ch. 736, 68A Stat. 595; Mar. 30, 1955, ch. 18, §3(a)(4), (5), 69 Stat. 14; Mar. 29, 1956, ch. 115, §3(a)(4), (5), 70 Stat. 66; Mar. 29, 1957, Pub. L. 85–12, §3(a)(2), (3), 71 Stat. 9; June 30, 1958, Pub. L. 85–475, §3(a)(2), (3), 72 Stat. 259, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859. See section 5061(d) of this title.

Amendments

1994—Subsec. (a)(3) to (10). Pub. L. 103–465 redesignated pars. (4) to (10) as (3) to (9), respectively, and struck out former par. (3), "Imported perfumes containing distilled spirits", which read as follows: "There is hereby imposed on all perfumes imported into the United States containing distilled spirits a tax of $13.50 per wine gallon, and a proportionate tax at a like rate on all fractional parts of such wine gallon."

1990—Subsec. (a)(1), (3). Pub. L. 101–508 substituted "$13.50" for "$12.50".

1984—Subsec. (a)(1), (3). Pub. L. 98–369 substituted "$12.50" for "$10.50".

1979—Subsec. (a)(1). Pub. L. 96–39, §802, struck out "in bond or" after "distilled spirits" and "or wine gallon when below proof" after "each proof gallon" and substituted "a tax" for "an internal revenue tax" and "proof gallon" for "such proof or wine gallon".

Subsec. (a)(2). Pub. L. 96–39, §805(d), inserted ", and any alcoholic ingredient added to such products" after "has not been paid".

1965—Subsec. (a)(1). Pub. L. 89–44 struck out last sentence which provided that the rate of tax imposed by par. (1) would be $9 on and after July 1, 1965.

Subsec. (a)(3). Pub. L. 89–44 struck out last sentence which provided that the rate of tax imposed by par. (3) would be $9 on and after July 1, 1965.

1964—Subsec. (a)(1). Pub. L. 88–348 substituted "July 1, 1965" for "July 1, 1964".

Subsec. (a)(3). Pub. L. 88–348 substituted "July 1, 1965" for "July 1, 1964".

1963—Subsec. (a)(1). Pub. L. 88–52, §3(a)(4), substituted "July 1, 1964" for "July 1, 1963".

Subsec. (a)(3). Pub. L. 88–52, §3(a)(5), substituted "July 1, 1964" for "July 1, 1963".

1962—Subsec. (a)(1). Pub. L. 87–508, §3(a)(3), substituted "July 1, 1963" for "July 1, 1962".

Subsec. (a)(3). Pub. L. 87–508, §3(a)(4), substituted "July 1, 1963" for "July 1, 1962".

1961—Subsec. (a)(1). Pub. L. 87–72, §3(a)(4), substituted "July 1, 1962" for "July 1, 1961".

Subsec. (a)(3). Pub. L. 87–72, §3(a)(5), substituted "July 1, 1962" for "July 1, 1961".

1960—Subsec. (a)(1). Pub. L. 86–564, §202(a)(4), substituted "July 1, 1961" for "July 1, 1960".

Subsec. (a)(3). Pub. L. 86–564, §202(a)(5), substituted "July 1, 1961" for "July 1, 1960".

1959—Subsec. (a)(1). Pub. L. 86–75, §3(a)(2), substituted "July 1, 1960" for "July 1, 1959".

Subsec. (a)(3). Pub. L. 86–75, §3(a)(3), substituted "July 1, 1960" for "July 1, 1959".

Effective Date of 1994 Amendment

Pub. L. 103–465, title I, §136(d), Dec. 8, 1994, 108 Stat. 4842, provided that: "The amendments made by this section [amending this section and sections 5002, 5005, 5007, 5061, 5131, 5132, 5134, and 7652 of this title] shall take effect on January 1, 1995."

Effective Date of 1990 Amendment

Pub. L. 101–508, title XI, §11201(d), Nov. 5, 1990, 104 Stat. 1388–417, provided that: "The amendments made by this section [amending this section and sections 5010, 5041, 5051, and 5061 of this title] shall take effect on January 1, 1991."

Effective Date of 1984 Amendment

Pub. L. 98–369, div. A, title I, §27(d), July 18, 1984, 98 Stat. 509, provided that:

"(1) In general.—Except as provided in paragraph (2), the amendments made by this section [amending this section and section 5010 of this title and enacting provisions set out as a note under this section] shall take effect on October 1, 1985.

"(2) Electronic transfer provisions.—The amendments made by subsection (c) [amending sections 5061 and 5703 of this title] shall apply to taxes required to be paid on or after September 30, 1984."

Effective Date of 1979 Amendment

Pub. L. 96–39, title VIII, §810, July 26, 1979, 93 Stat. 292, provided that: "The amendments made by this title [amending this section and sections 5002 to 5008, 5043, 5061, 5064, 5066, 5116, 5171 to 5173, 5175 to 5178, 5180, 5181, 5201 to 5205, 5207, 5211 to 5215, 5221 to 5223, 5231, 5232, 5235, 5241, 5273, 5291, 5301, 5352, 5361 to 5363, 5365, 5381, 5391, 5551, 5601, 5604, 5610, 5612, 5615, 5663, 5681, 5682, and 5691 of this title, repealing sections 5009, 5021 to 5026, 5081 to 5084, 5174, 5233, 5234, 5251, 5252, 5364, and 5521 to 5523 of this title, and enacting provisions set out as notes under sections 1, 5061, 5171, and 5173 of this title] shall take effect on January 1, 1980."

Effective Date of 1965 Amendment

Amendment by Pub. L. 89–44 applicable on and after July 1, 1965, see section 701(d) of Pub. L. 89–44, set out as a note under section 5701 of this title.

Effective Date

Pub. L. 85–859, title II, §210(a)(1), Sept. 2, 1958, 72 Stat. 1435, provided that: "The amendments made by sections 201 and 205 [amending this chapter and repealing acts Mar. 3, 1877, 114, 19 Stat. 393, and Oct. 18, 1888, ch. 1194, 25 Stat. 560] shall take effect on July 1, 1959, except that any provision having the effect of a provision contained in such amendments may be made effective at an earlier date by the promulgation of regulations by the Secretary or his delegate to effectuate such provision, in which case the effective date shall be that prescribed in such regulations. The amendments made by paragraphs (17) and (18) of section 204 [amending section 7652 of this title] shall take effect on July 1, 1959. Except as provided in section 206(f), all other provisions of this title [enacting sections 5849, 5854, 5855, and 7608 of this title, amending chapter 52 of this title and sections 5801, 5811, 5814, 5821, 5843, 5848, 5851, 6071, 6207, 6422, 7214, 7272, 7301, 7324 to 7326, 7609, and 7655 of this title, and repealing former section 5854 of this title] shall take effect on the day following the date of the enactment of this Act [Sept. 2, 1958]."

Short Title

Pub. L. 85–859, §1(a), Sept. 2, 1958, 72 Stat. 1275, provided that: "This Act [see Tables for classification] may be cited as the 'Excise Tax Technical Changes Act of 1958'."

Savings Provision

Pub. L. 85–859, title II, §210(b), Sept. 2, 1958, 72 Stat. 1435, as amended by Pub. L. 99–514, §2, Oct. 22, 1986, 100 Stat. 2095, provided that: "The amendment of any provision of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] by this title [enacting sections 5849, 5854, 5855, and 7608 of this title, amending this chapter, chapter 52 of this title and sections 5801, 5811, 5814, 5821, 5843, 5848, 5851, 6071, 6207, 6422, 7214, 7272, 7301, 7324 to 7326, 7609, 7652, and 7655 of this title, and enacting provisions set out as notes under this section and sections 5006, 5025, 5064, 5175, 5304, and 5601 of this title] shall not affect any act done or any right accruing or accrued, or any suit or proceeding had or commenced in any civil cause before such amendment; but all rights and liabilities under such code prior to such amendment shall continue, and may be enforced in the same manner, as if such amendment had not been made."

References to Other Provisions of Law

Pub. L. 85–859, title II, §210(d), Sept. 2, 1958, 72 Stat. 1435, provided that: "For the purpose of applying any provision of this title [see Savings Provision note above] to any occurrence on or after the effective date of such provision, any reference in this title to another provision thereof shall also be deemed to be a reference to the corresponding provision of prior law, when consistent with the purpose of the provision to be applied."

Repeal of Acts Mar. 3, 1877 and Oct. 18, 1888

Pub. L. 85–859, title II, §205, Sept. 2, 1958, 72 Stat. 1430, repealed acts March 3, 1877, ch. 114, 19 Stat. 393 and Oct. 18, 1888, ch. 1194, 25 Stat. 560, which related to production and warehousing of fruit brandy, and are covered by this chapter. For effective date of repeal, see section 210(a)(1) of Pub. L. 85–859, set out as an Effective Date note above.

Floor Stocks Taxes on Distilled Spirits, Wine, and Beer

Pub. L. 101–508, title XI, §11201(e), Nov. 5, 1990, 104 Stat. 1388–417, provided that:

"(1) Imposition of tax.—

"(A) In general.—In the case of any tax-increased article—

"(i) on which tax was determined under part I of subchapter A of chapter 51 of the Internal Revenue Code of 1986 or section 7652 of such Code before January 1, 1991, and

"(ii) which is held on such date for sale by any person,

there shall be imposed a tax at the applicable rate on each such article.

"(B) Applicable rate.—For purposes of subparagraph (A), the applicable rate is—

"(i) $1 per proof gallon in the case of distilled spirits,

"(ii) $0.90 per wine gallon in the case of wine described in paragraph (1), (2), (3), or (5) of section 5041(b) of such Code, and

"(iii) $9 per barrel in the case of beer.

In the case of a fraction of a gallon or barrel, the tax imposed by subparagraph (A) shall be the same fraction as the amount of such tax imposed on a whole gallon or barrel.

"(C) Tax-increased article.—For purposes of this subsection, the term 'tax-increased article' means distilled spirits, wine described in paragraph (1), (2), (3), or (5) of section 5041(b) of such Code, and beer.

"(2) Exception for small domestic producers.—

"(A) In the case of wine held by the producer thereof on January 1, 1991, if a credit would have been allowable under section 5041(c) of such Code (as added by this section) on such wine had the amendments made by subsection (b) [amending sections 5041 and 5061 of this title] applied to all wine removed during 1990 and had the wine so held been removed for consumption on December 31, 1990, the tax imposed by paragraph (1) on such wine shall be reduced by the credit which would have been so allowable.

"(B) In the case of beer held by the producer thereof on January 1, 1991, if the rate of the tax imposed by section 5051 of such Code would have been determined under subsection (a)(2) thereof had the beer so held been removed for consumption on December 31, 1990, the tax imposed by paragraph (1) on such beer shall not apply.

"(C) For purposes of this paragraph, an article shall not be treated as held by the producer if title thereto had at any time been transferred to any other person.

"(3) Exception for certain small wholesale or retail dealers.—No tax shall be imposed by paragraph (1) on tax- increased articles held on January 1, 1991, by any dealer if—

"(A) the aggregate liquid volume of tax-increased articles held by such dealer on such date does not exceed 500 wine gallons, and

"(B) such dealer submits to the Secretary (at the time and in the manner required by the Secretary) such information as the Secretary shall require for purposes of this paragraph.

"(4) Credit against tax.—Each dealer shall be allowed as a credit against the taxes imposed by paragraph (1) an amount equal to—

"(A) $240 to the extent such taxes are attributable to distilled spirits,

"(B) $270 to the extent such taxes are attributable to wine, and

"(C) $87 to the extent such taxes are attributable to beer.

Such credit shall not exceed the amount of taxes imposed by paragraph (1) with respect to distilled spirits, wine, or beer, as the case may be, for which the dealer is liable.

"(5) Liability for tax and method of payment.—

"(A) Liability for tax.—A person holding any tax-increased article on January 1, 1991, to which the tax imposed by paragraph (1) applies shall be liable for such tax.

"(B) Method of payment.—The tax imposed by paragraph (1) shall be paid in such manner as the Secretary shall prescribe by regulations.

"(C) Time for payment.—The tax imposed by paragraph (1) shall be paid on or before June 30, 1991.

"(6) Controlled groups.—

"(A) Corporations.—In the case of a controlled group—

"(i) the 500 wine gallon amount specified in paragraph (3), and

"(ii) the $240, $270, and $87 amounts specified in paragraph (4),

shall be apportioned among the dealers who are component members of such group in such manner as the Secretary shall by regulations prescribe. For purposes of the preceding sentence, the term 'controlled group' has the meaning given to such term by subsection (a) of section 1563 of such Code; except that for such purposes the phrase 'more than 50 percent' shall be substituted for the phrase 'at least 80 percent' each place it appears in such subsection.

"(B) Nonincorporated dealers under common control.—Under regulations prescribed by the Secretary, principles similar to the principles of subparagraph (A) shall apply to a group of dealers under common control where 1 or more of such dealers is not a corporation.

"(7) Other laws applicable.—

"(A) In general.—All provisions of law, including penalties, applicable to the comparable excise tax with respect to any tax-increased article shall, insofar as applicable and not inconsistent with the provisions of this subsection, apply to the floor stocks taxes imposed by paragraph (1) to the same extent as if such taxes were imposed by the comparable excise tax.

"(B) Comparable excise tax.—For purposes of subparagraph (A), the term 'comparable excise tax' means—

"(i) the tax imposed by section 5001 of such Code in the case of distilled spirits,

"(ii) the tax imposed by section 5041 of such Code in the case of wine, and

"(iii) the tax imposed by section 5051 of such Code in the case of beer.

"(8) Definitions.—For purposes of this subsection—

"(A) In general.—Terms used in this subsection which are also used in subchapter A of chapter 51 of such Code shall have the respective meanings such terms have in such part.

"(B) Person.—The term 'person' includes any State or political subdivision thereof, or any agency or instrumentality of a State or political subdivision thereof.

"(C) Secretary.—The term 'Secretary' means the Secretary of the Treasury or his delegate.

"(9) Treatment of imported perfumes containing distilled spirits.—For purposes of this subsection, any article described in section 5001(a)(3) of such Code shall be treated as distilled spirits; except that the tax imposed by paragraph (1) shall be imposed on a wine gallon basis in lieu of a proof gallon basis. To the extent provided by regulations prescribed by the Secretary, the preceding sentence shall not apply to any article held on January 1, 1991, on the premises of a retail establishment."

Floor Stocks Tax Treatment of Articles in Foreign Trade Zones

Pub. L. 101–508, title XI, §11218, Nov. 5, 1990, 104 Stat. 1388–438, provided that: "Notwithstanding the Act of June 18, 1934 (48 Stat. 998, 19 U.S.C. 81a) or any other provision of law, any article which is located in a foreign trade zone on the effective date of any increase in tax under the amendments made by this part or part I [part I (§§11201–11203) or part II (§§11211–11218) of subtitle B of title XI of Pub. L. 101–508, see Tables for classification] shall be subject to floor stocks taxes imposed by such parts if—

"(1) internal revenue taxes have been determined, or customs duties liquidated, with respect to such article before such date pursuant to a request made under the 1st proviso of section 3(a) of such Act [19 U.S.C. 81c(a)], or

"(2) such article is held on such date under the supervision of a customs officer pursuant to the 2d proviso of such section 3(a)."

Floor Stocks Taxes on Distilled Spirits

Pub. L. 98–369, div. A, title I, §27(b), July 18, 1984, 98 Stat. 507, as amended by Pub. L. 99–514, §2, title XVIII, §1801(c)(3), Oct. 22, 1986, 100 Stat. 2095, 2786, provided that:

"(1) Imposition of tax.—On distilled spirits on which tax was imposed under section 5001 or 7652 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] before October 1, 1985, and which were held on such date for sale by any person, there shall be imposed a tax at the rate of $2.00 for each proof gallon and a proportionate tax at the like rate on all fractional parts of a proof gallon.

"(2) Exception for certain small wholesale or retail dealers.—No tax shall be imposed by paragraph (1) on distilled spirits held on October 1, 1985, by any dealer if—

"(A) the aggregate liquid volume of distilled spirits held by such dealer on such date does not exceed 500 wine gallons, and

"(B) such dealer submits to the Secretary (at the time and in the manner required by the Secretary) such information as the Secretary shall require for purposes of this paragraph.

"(3) Credit against tax.—Each dealer shall be allowed as a credit against the taxes imposed by paragraph (1) an amount equal to $800. Such credit shall not exceed the amount of taxes imposed by paragraph (1) for which the dealer is liable.

"(4) Liability for tax and method of payment.—

"(A) Liability for tax.—A person holding distilled spirits on October 1, 1985, to which the tax imposed by paragraph (1) applies shall be liable for such tax.

"(B) Method of payment.—The tax imposed by paragraph (1) shall be paid in such manner as the Secretary shall by regulations prescribe.

"(C) Time for payment.—

"(i) In general.—Except as provided in clause (ii), the tax imposed by paragraph (1) shall be paid on or before April 1, 1986.

"(ii) Installment payment of tax in case of small or middle-sized dealers.—In the case of any small or middle-sized dealer, the tax imposed by paragraph (1) may be paid in 3 equal installments due as follows:

"(I) The first installment shall be paid on or before April 1, 1986.

"(II) The second installment shall be paid on or before July 1, 1986.

"(III) The third installment shall be paid on or before October 1, 1986.

  If the taxpayer does not pay any installment under this clause on or before the date prescribed for its payment, the whole of the unpaid tax shall be paid upon notice and demand from the Secretary.

"(iii) Small or middle-sized dealer.—For purposes of clause (ii), the term 'small or middle-sized dealer' means any dealer if the aggregate gross sales receipts of such dealer for its most recent taxable year ending before October 1, 1985, does not exceed $500,000.

"(5) Controlled groups.—

"(A) Controlled groups of corporations.—In the case of a controlled group—

"(i) the 500 wine gallon amount specified in paragraph (2),

"(ii) the $800 amount specified in paragraph (3), and

"(iii) the $500,000 amount specified in paragraph (4)(C)(iii),

shall be apportioned among the dealers who are component members of such group in such manner as the Secretary shall by regulations prescribe. For purposes of the preceding sentence, the term 'controlled group' has the meaning given to such term by subsection (a) of section 1563 of the Internal Revenue Code of 1986; except that for such purposes the phrase 'more than 50 percent' shall be substituted for the phrase 'at least 80 percent' each place it appears in such subsection.

"(B) Nonincorporated dealers under common control.—Under regulations prescribed by the Secretary, principles similar to the principles of subparagraph (A) shall apply to a group of dealers under common control where 1 or more of such dealers is not a corporation.

"(6) Other laws applicable.—All provisions of law, including penalties, applicable with respect to the taxes imposed by section 5001 of the Internal Revenue Code of 1986 shall, insofar as applicable and not inconsistent with the provisions of this subsection, apply in respect of the taxes imposed by paragraph (1) to the same extent as if such taxes were imposed by such section 5001.

"(7) Definitions and special rules.—For purposes of this subsection—

"(A) Dealer.—The term 'dealer' means—

"(i) any wholesale dealer in liquors (as defined in section 5112(b) of the Internal Revenue Code of 1986), and

"(ii) any retail dealer in liquors (as defined in section 5122(a) of such Code).

"(B) Distilled spirits.—The term 'distilled spirits' has the meaning given such term by section 5002(a)(8) of the Internal Revenue Code of 1986.

"(C) Person.—The term 'person' includes any State or political subdivision thereof, or any agency or instrumentality of a State or political subdivision thereof.

"(D) Secretary.—The term 'Secretary' means the Secretary of the Treasury or his delegate.

"(E) Treatment of imported perfumes containing distilled spirits.—Any article described in section 5001(a)(3) of such Code shall be treated as distilled spirits; except that the tax imposed by paragraph (1) shall be imposed on a wine gallon basis in lieu of a proof gallon basis. To the extent provided in regulations prescribed by the Secretary, the preceding sentence shall not apply to any article held on October 1, 1985, on the premises of a retail establishment.

"(F) Treatment of distilled spirits in foreign trade zones.—Notwithstanding the Act of June 18, 1934 (48 Stat. 998, 19 U.S.C. 81a) or any other provision of law, distilled spirits which are located in a foreign trade zone on October 1, 1985, shall be subject to the tax imposed by paragraph (1) and shall be treated for purposes of this subsection as held on such date for sale if—

"(i) internal revenue taxes have been determined, or customs duties liquidated, with respect to such distilled spirits before such date pursuant to a request made under the first proviso of section 3(a) of such Act [19 U.S.C. 81c(a)], or

"(ii) such distilled spirits are held on such date under the supervision of customs pursuant to the second proviso of such section 3(a).

Under regulations prescribed by the Secretary, provisions similar to sections 5062 and 5064 of such Code shall apply to distilled spirits with respect to which tax is imposed by paragraph (1) by reason of this subparagraph."

§5002. Definitions

(a) In general

For purposes of this chapter—

(1) Distilled spirits plant

The term "distilled spirits plant" means an establishment which is qualified under subchapter B to perform any distilled spirits operation.

(2) Distilled spirits operation

The term "distilled spirits operation" means any operation for which qualification is required under subchapter B.

(3) Bonded premises

The term "bonded premises", when used with respect to distilled spirits, means the premises of a distilled spirits plant, or part thereof, on which distilled spirits operations are authorized to be conducted.

(4) Distiller

The term "distiller" includes any person who—

(A) produces distilled spirits from any source or substance,

(B) brews or makes mash, wort, or wash fit for distillation or for the production of distilled spirits (other than the making or using of mash, wort, or wash in the authorized production of wine or beer, or the production of vinegar by fermentation),

(C) by any process separates alcoholic spirits from any fermented substance, or

(D) making or keeping mash, wort, or wash, has a still in his possession or use.

(5) Processor

(A) In general

The term "processor", when used with respect to distilled spirits, means any person who—

(i) manufactures, mixes, or otherwise processes distilled spirits, or

(ii) manufactures any article.

(B) Rectifier, bottler, etc., included

The term "processor" includes (but is not limited to) a rectifier, bottler, and denaturer.

(6) Certain operations not treated as processing

In applying paragraph (5), there shall not be taken into account—

(A) Operations as distiller

Any process which is the operation of a distiller.

(B) Mixing of taxpaid spirits for immediate consumption

Any mixing (after determination of tax) of distilled spirits for immediate consumption.

(C) Use by apothecaries

Any process performed by an apothecary with respect to distilled spirits which such apothecary uses exclusively in the preparation or making up of medicines unfit for use for beverage purposes.

(7) Warehouseman

The term "warehouseman", when used with respect to distilled spirits, means any person who stores bulk distilled spirits.

(8) Distilled spirits

The terms "distilled spirits", "alcoholic spirits", and "spirits" mean that substance known as ethyl alcohol, ethanol, or spirits of wine in any form (including all dilutions and mixtures thereof from whatever source or by whatever process produced).

(9) Bulk distilled spirits

The term "bulk distilled spirits" means distilled spirits in a container having a capacity in excess of 1 wine gallon.

(10) Proof spirits

The term "proof spirits" means that liquid which contains one-half its volume of ethyl alcohol of a specific gravity of 0.7939 at 60 degrees Fahrenheit (referring to water at 60 degrees Fahrenheit as unity).

(11) Proof gallon

The term "proof gallon" means a United States gallon of proof spirits, or the alcoholic equivalent thereof.

(12) Container

The term "container", when used with respect to distilled spirits, means any receptacle, vessel, or form of package, bottle, tank, or pipeline used, or capable of use, for holding, storing, transferring, or conveying distilled spirits.

(13) Approved container

The term "approved container", when used with respect to distilled spirits, means a container the use of which is authorized by regulations prescribed by the Secretary.

(14) Article

Unless another meaning is distinctly expressed or manifestly intended, the term "article" means any substance in the manufacture of which denatured distilled spirits are used.

(15) Export

The terms "export", "exported", and "exportation" include shipments to a possession of the United States.

(b) Cross references

(1) For definition of manufacturer of stills, see section 5102.

(2) For definition of dealer, see section 5121(c)(3).

(3) For definitions of wholesale dealers, see section 5121(c).

(4) For definitions of retail dealers, see section 5122(c).

(5) For definitions of general application to this title, see chapter 79.

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1315; amended Pub. L. 89–44, title VIII, §807(a), June 21, 1965, 79 Stat. 164; Pub. L. 94–455, title XIX, §1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 96–39, title VIII, §805(e), July 26, 1979, 93 Stat. 278; Pub. L. 103–465, title I, §136(c)(1), Dec. 8, 1994, 108 Stat. 4841; Pub. L. 109–59, title XI, §11125(b)(13), Aug. 10, 2005, 119 Stat. 1956.)

Prior Provisions

A prior section 5002, act Aug. 16, 1954, ch. 736, 68A Stat. 597, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859.

Provisions similar to those comprising subsec. (a)(6), (9), and (11) of this section were contained in prior sections 5213(a)(1) and 5319(1), (2), and (7), act Aug. 16, 1954, ch. 736, 68A Stat. 639, 661, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

2005—Subsec. (b)(2). Pub. L. 109–59, §11125(b)(13)(A), substituted "section 5121(c)(3)" for "section 5112(a)".

Subsec. (b)(3). Pub. L. 109–59, §11125(b)(13)(B), substituted "section 5121(c)" for "section 5112".

Subsec. (b)(4). Pub. L. 109–59, §11125(b)(13)(C), substituted "section 5122(c)" for "section 5122".

1994—Subsec. (b)(1) to (6). Pub. L. 103–465 redesignated pars. (2) to (6) as (1) to (5), respectively, and struck out former par. (1) which provided a cross reference to section 5041(c) of this title for definition of "wine gallon".

1979—Subsec. (a)(1). Pub. L. 96–39 substituted "distilled spirits operation" for "operation, or any combination of operations, for which qualification is required under such subchapter".

Subsec. (a)(2), (3). Pub. L. 96–39 added par. (2) and redesignated former par. (2) as (3). Former par. (3), defining "bottling premises", was struck out.

Subsec. (a)(4). Pub. L. 96–39 redesignated par. (5) as (4). Former par. (4), defining "bonded warehouseman", was struck out.

Subsec. (a)(5) to (7). Pub. L. 96–39 added pars. (5) to (7) and redesignated former pars. (5) to (7) as (4), (8), and (10), respectively.

Subsec. (a)(8). Pub. L. 96–39 redesignated former par. (6) as (8). Former par. (8) redesignated (11).

Subsec. (a)(9). Pub. L. 96–39 added par. (9) and redesignated par. (9) as (12).

Subsec. (a)(10) to (15). Pub. L. 96–39 redesignated former pars. (7) to (12) as (10) to (15), respectively.

Subsec. (b). Pub. L. 95–39 struck out par. (2) which provided for a cross reference to section 5082 for a definition of rectifier and redesignated pars. (3) to (7) as (2) to (6), respectively.

1976—Subsec. (a)(10). Pub. L. 94–455 struck out "or his delegate" after "Secretary".

1965—Subsec. (a). Pub. L. 89–44 added par. (12).

Effective Date of 2005 Amendment

Pub. L. 109–59, title XI, §11125(c), Aug. 10, 2005, 119 Stat. 1957, provided that: "The amendments made by this section [see Tables for classification] shall take effect on July 1, 2008, but shall not apply to taxes imposed for periods before such date."

Effective Date of 1994 Amendment

Amendment by Pub. L. 103–465 effective Jan. 1, 1995, see section 136(d) of Pub. L. 103–465, set out as a note under section 5001 of this title.

Effective Date of 1979 Amendment

Amendment by Pub. L. 96–39 effective Jan. 1, 1980, see section 810 of Pub. L. 96–39, set out as a note under section 5001 of this title.

Effective Date of 1965 Amendment

Pub. L. 89–44, title VIII, §807(c), June 21, 1965, 79 Stat. 164, provided that: "The amendments made by subsections (a) and (b) [amending this section and section 5053 of this title] shall take effect on July 1, 1965."

§5003. Cross references to exemptions, etc.

(1) For provisions authorizing the withdrawal of distilled spirits free of tax for use by Federal or State agencies, see sections 5214(a)(2) and 5313.

(2) For provisions authorizing the withdrawal of distilled spirits free of tax by nonprofit educational organizations, scientific universities or colleges of learning, laboratories, hospitals, blood banks, sanitariums, and charitable clinics, see section 5214(a)(3).

(3) For provisions authorizing the withdrawal of certain imported distilled spirits from customs custody without payment of tax, see section 5232.

(4) For provisions authorizing the withdrawal of denatured distilled spirits free of tax, see section 5214(a)(1).

(5) For provisions exempting from tax distilled spirits for use in production of vinegar by the vaporizing process, see section 5505(j).

(6) For provisions relating to the withdrawal of wine spirits without payment of tax for use in the production of wine, see section 5373.

(7) For provisions exempting from tax volatile fruit-flavor concentrates, see section 5511.

(8) For provisions authorizing the withdrawal of distilled spirits from bonded premises without payment of tax for export, see section 5214(a)(4).

(9) For provisions authorizing withdrawal of distilled spirits without payment of tax to customs bonded warehouses for export, see section 5214(a)(9).

(10) For provisions relating to withdrawal of distilled spirits without payment of tax as supplies for certain vessels and aircraft, see 19 U.S.C. 1309.

(11) For provisions authorizing regulations for withdrawal of distilled spirits for use of United States free of tax, see section 7510.

(12) For provisions relating to withdrawal of distilled spirits without payment of tax to foreign-trade zones, see 19 U.S.C. 81c.

(13) For provisions relating to exemption from tax of taxable articles going into the possessions of the United States, see section 7653(b).

(14) For provisions authorizing the withdrawal of distilled spirits without payment of tax for use in certain research, development, or testing, see section 5214(a)(10).

(15) For provisions authorizing the withdrawal of distilled spirits without payment of tax for transfer to manufacturing bonded warehouses for manufacturing for export, see section 5214(a)(6).

(16) For provisions authorizing the withdrawal of articles from the bonded premises of a distilled spirits plant free of tax when contained in an article, see section 5214(a)(11).

(17) For provisions relating to allowance for certain losses in bond, see section 5008(a).

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1316; amended Pub. L. 95–176, §§3(c), 4(f), Nov. 14, 1977, 91 Stat. 1365, 1366; Pub. L. 96–39, title VIII, §807(a)(1), July 26, 1979, 93 Stat. 280.)

Prior Provisions

A prior section 5003, act Aug. 16, 1954, ch. 736, 68A Stat. 597, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

1979—Par. (9). Pub. L. 96–39, §807(a)(1)(A), struck out "section 5522(a) and" before "section 5214(a)(9)".

Pars. (15) to (17). Pub. L. 96–39, §807(a)(1)(B), added pars. (15) and (16) and redesignated former par. (15) as (17).

1977—Par. (9). Pub. L. 95–176, §3(c), struck out "manufacturing" after "customs" and inserted reference to section 5214(a)(9).

Par. (14). Pub. L. 95–176, §4(f), substituted "withdrawal of distilled spirits without payment of tax for use in certain research, development, or testing, see section 5214(a)(10)" for "removal of samples free of tax for making tests or laboratory analyses, see section 5214(a)(9)".

Effective Date of 1979 Amendment

Amendment by Pub. L. 96–39 effective Jan. 1, 1980, see section 810 of Pub. L. 96–39, set out as a note under section 5001 of this title.

Effective Date of 1977 Amendment

Pub. L. 95–176, §7, Nov. 14, 1977, 91 Stat. 1367, provided that: "The amendments made by this Act [amending this section and sections 5004, 5005, 5008, 5025, 5062, 5066, 5175, 5178, 5205, 5207, 5214, 5215, and 5234 of this title] shall take effect on the first day of the first calendar month which begins more than 90 days after the date of the enactment of this Act [Nov. 14, 1977]."

§5004. Lien for tax

(a) Distilled spirits subject to lien

(1) General

The tax imposed by section 5001(a)(1) shall be a first lien on the distilled spirits from the time the spirits are in existence as such until the tax is paid.

(2) Exceptions

The lien imposed by paragraph (1), or any similar lien imposed on the spirits under prior provisions of internal revenue law, shall terminate in the case of distilled spirits produced on premises qualified under internal revenue law for the production of distilled spirits when such distilled spirits are—

(A) withdrawn from bonded premises on determination of tax; or

(B) withdrawn from bonded premises free of tax under provisions of section 5214(a)(1), (2), (3), (11), or (12), or section 7510; or

(C) exported, deposited in a foreign-trade zone, used in the production of wine, laden as supplies upon, or used in the maintenance or repair of, certain vessels or aircraft, deposited in a customs bonded warehouse, or used in certain research, development, or testing, as provided by law.

(b) Cross reference

For provisions relating to extinguishing of lien in case of redistillation, see section 5223(e).

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1317; amended Pub. L. 89–44, title VIII, §805(f)(1), June 21, 1965, 79 Stat. 161; Pub. L. 94–455, title XIX, §1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 95–176, §4(c), Nov. 14, 1977, 91 Stat. 1366; Pub. L. 96–39, title VIII, §807(a)(2), July 26, 1979, 93 Stat. 280; Pub. L. 96–223, title II, §232(e)(2)(C), Apr. 2, 1980, 94 Stat. 280.)

Prior Provisions

A prior section 5004, act Aug. 16, 1954, ch. 736, 68A Stat. 598, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859.

Provisions similar to those comprising subsec. (b)(1) of this section were contained in prior section 5007(e)(1), act Aug. 16, 1954, ch. 736, 68A Stat. 600, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

1980—Subsec. (a)(2)(B). Pub. L. 96–223 substituted "(11), or (12)," for "or (11),".

1979—Subsec. (a)(2)(B). Pub. L. 96–39, §807(a)(2)(C), substituted "(3), or (11)" for "or (3)".

Subsecs. (b), (c). Pub. L. 96–39, §807(a)(2)(A), (B), redesignated subsec. (c) as (b). Former subsec. (b), relating to other property subject to lien, was repealed.

1977—Subsec. (a)(2). Pub. L. 95–176 struck out reference to par. (9) of section 5214(a) in subpar. (B), and in subpar. (C) substituted "a customs bonded warehouse" for "customs manufacturing bonded warehouses" and provided for termination of the lien for tax when the distilled spirits are used in certain research, development, or testing.

1976—Subsec. (b)(3)(B), (4). Pub. L. 94–455 struck out "or his delegate" after "Secretary", wherever appearing.

1965—Subsec. (c). Pub. L. 89–44 substituted "5223(e)" for "5223(d)".

Effective Date of 1980 Amendment

Amendment by Pub. L. 96–223 effective on the first day of the first calendar month beginning more than 60 days after Apr. 2, 1980, see section 232(h)(3) of Pub. L. 96–223, set out as an Effective Date note under section 5181 of this title.

Effective Date of 1979 Amendment

Amendment by Pub. L. 96–39 effective Jan. 1, 1980, see section 810 of Pub. L. 96–39, set out as a note under section 5001 of this title.

Effective Date of 1977 Amendment

Amendment by Pub. L. 95–176 effective on first day of first calendar month beginning more than 90 days after Nov. 14, 1977, see section 7 of Pub. L. 95–176, set out as a note under section 5003 of this title.

Effective Date of 1965 Amendment

Pub. L. 89–44, title VIII, §805(g)(2), June 21, 1965, 79 Stat. 162, provided that: "The amendments made by subsections (b), (d), and (f) (other than paragraph (6)) [amending this section and sections 5025, 5083, 5223, and 5234 of this title], shall take effect on October 1, 1965."

§5005. Persons liable for tax

(a) General

The distiller or importer of distilled spirits shall be liable for the taxes imposed thereon by section 5001(a)(1).

(b) Domestic distilled spirits

(1) Liability of persons interested in distilling

Every proprietor or possessor of, and every person in any manner interested in the use of, any still, distilling apparatus, or distillery, shall be jointly and severally liable for the taxes imposed by law on the distilled spirits produced therefrom.

(2) Exception

A person owning or having the right of control of not more than 10 percent of any class of stock of a corporate proprietor of a distilled spirits plant shall not be deemed to be a person liable for the tax for which such proprietor is liable under the provisions of paragraph (1). This exception shall not apply to an officer or director of such corporate proprietor.

(c) Proprietors of distilled spirits plants

(1) Bonded storage

Every person operating bonded premises of a distilled spirits plant shall be liable for the internal revenue tax on all distilled spirits while the distilled spirits are stored on such premises, and on all distilled spirits which are in transit to such premises (from the time of removal from the transferor's bonded premises) pursuant to application made by him. Such liability for the tax on distilled spirits shall continue until the distilled spirits are transferred or withdrawn from bonded premises as authorized by law, or until such liability for tax is relieved by reason of the provisions of section 5008(a). Nothing in this paragraph shall relieve any person from any liability imposed by subsection (a) or (b).

(2) Transfers in bond

When distilled spirits are transferred in bond in accordance with the provisions of section 5212, persons liable for the tax on such spirits under subsection (a) or (b), or under any similar prior provisions of internal revenue law, shall be relieved of such liability, if proprietors of transferring and receiving premises are independent of each other and neither has a proprietary interest, directly or indirectly, in the business of the other, and all persons liable for the tax under subsection (a) or (b), or under any similar prior provisions of internal revenue law, have divested themselves of all interest in the spirits so transferred. Such relief from liability shall be effective from the time of removal from the transferor's bonded premises, or from the time of divestment of interest, whichever is later.

(d) Withdrawals free of tax

All persons liable for the tax under subsection (a) or (b), or under any similar prior provisions of internal revenue law, shall be relieved of such liability as to distilled spirits withdrawn free of tax under the provisions of section 5214(a)(1), (2), (3), (11), or (12), or under section 7510, at the time such spirits are so withdrawn from bonded premises.

(e) Withdrawals without payment of tax

(1) Liability for tax

Any person who withdraws distilled spirits from the bonded premises of a distilled spirits plant without payment of tax, as provided in section 5214(a)(4), (5), (6), (7), (8), (9), (10), or (13), shall be liable for the internal revenue tax on such distilled spirits, from the time of such withdrawal; and all persons liable for the tax on such distilled spirits under subsection (a) or (b), or under any similar prior provisions of internal revenue law, shall, at the time of such withdrawal, be relieved of any such liability on the distilled spirits so withdrawn if the person withdrawing such spirits and the person, or persons, liable for the tax under subsection (a) or (b), or under any similar prior provisions of internal revenue law, are independent of each other and neither has a proprietary interest, directly or indirectly, in the business of the other, and all persons liable for the tax under subsection (a) or (b), or under any similar prior provisions of internal revenue law, have divested themselves of all interest in the spirits so withdrawn.

(2) Relief from liability

All persons liable for the tax on distilled spirits under paragraph (1) of this subsection, or under subsection (a) or (b), or under any similar prior provisions of internal revenue law, shall be relieved of any such liability at the time, as the case may be, the distilled spirits are exported, deposited in a foreign-trade zone, used in the production of wine, used in the production of nonbeverage wine or wine products, deposited in customs bonded warehouses, laden as supplies upon, or used in the maintenance or repair of, certain vessels or aircraft, or used in certain research, development, or testing, as provided by law.

(f) Cross references

(1) For provisions requiring bond covering operations at, and withdrawals from, distilled spirits plants, see section 5173.

(2) For provisions relating to transfer of tax liability to redistiller in case of redistillation, see section 5223.

(3) For liability for tax on denatured distilled spirits, articles, and volatile fruit-flavor concentrates, see section 5001(a)(5) and (6).

(4) For liability for tax on distilled spirits withdrawn free of tax, see section 5001(a)(4).

(5) For liability of wine producer for unlawfully using wine spirits withdrawn for the production of wine, see section 5391.

(6) For provisions relating to transfer of tax liability for wine, see section 5043(a)(1)(A).

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1318; amended Pub. L. 94–455, title XIX, §1905(a)(1), Oct. 4, 1976, 90 Stat. 1818; Pub. L. 95–176, §4(b), (d), Nov. 14, 1977, 91 Stat. 1366; Pub. L. 96–39, title VIII, §807(a)(3), July 26, 1979, 93 Stat. 280; Pub. L. 96–223, title II, §232(e)(2)(D), Apr. 2, 1980, 94 Stat. 280; Pub. L. 98–369, div. A, title IV, §455(b), July 18, 1984, 98 Stat. 823; Pub. L. 103–465, title I, §136(c)(2), Dec. 8, 1994, 108 Stat. 4841.)

Prior Provisions

A prior section 5005, acts Aug. 16, 1954, ch. 736, 68A Stat. 599; Sept. 2, 1958, Pub. L. 85–859, title II, §206(d), 72 Stat. 1431, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859.

Provisions similar to those comprising subsec. (c)(1), (2) of this section were contained in prior sections 5194(f), 5217(a), and 5232(a), act Aug. 16, 1954, ch. 736, 68A Stat. 634, 641, 643, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

1994—Subsec. (f)(3). Pub. L. 103–465, §136(c)(2)(A), substituted "section 5001(a)(5) and (6)" for "section 5001(a)(6) and (7)".

Subsec. (f)(4). Pub. L. 103–465, §136(c)(2)(B), substituted "section 5001(a)(4)" for "section 5001(a)(5)".

1984—Subsec. (e)(1). Pub. L. 98–369, §455(b)(1), substituted "(10), or (13)" for "or (10)".

Subsec. (e)(2). Pub. L. 98–369, §455(b)(2), inserted "used in the production of nonbeverage wine or wine products,".

1980—Subsec. (d). Pub. L. 96–223 substituted "(11), or (12)," for "or (11),".

1979—Subsec. (c)(3). Pub. L. 96–39, §807(a)(3)(A), struck out par. (3) which related to liability for taxes with regard to withdrawals of distilled spirits from the bonded premises of a distilled spirits plant.

Subsec. (d). Pub. L. 96–39, §807(a)(3)(B), substituted "(3), or (11)" for "or (3)".

Subsec. (f)(1). Pub. L. 96–39, §807(a)(3)(C), substituted "requiring bond covering operations at, and withdrawals from, distilled spirits plants" for "conditioning warehousing bonds on the payment of the tax" and "5173" for "5173(c)".

Subsec. (f)(6). Pub. L. 96–39, §807(a)(3)(D), added par. (6).

1977—Subsec. (d). Pub. L. 95–176, §4(d)(1), struck out reference to par. (9) of section 5214(a).

Subsec. (e)(1). Pub. L. 95–176, §4(d)(2), inserted reference to pars. (9) and (10) of section 5214(a).

Subsec. (e)(2). Pub. L. 95–176, §4(b), substituted "customs bonded warehouses" for "customs manufacturing bonded warehouses" and provided for relief from liability for tax on distilled spirits used in certain research, development, or testing.

1976—Subsec. (c)(2). Pub. L. 94–455 substituted "Such relief from liability shall be effective from the time of removal from the transferor's bonded premises, or from the time of divestment of interest, whichever is later." for "Such liability for the tax on distilled spirits shall continue until the distilled spirits are transferred or withdrawn from bonded premises as authorized by law, or until such liability for tax is relieved by reason of the provisions of section 5008(a). Nothing in this paragraph shall relieve any person from any liability imposed by subsection (a) or (b).".

Effective Date of 1994 Amendment

Amendment by Pub. L. 103–465 effective Jan. 1, 1995, see section 136(d) of Pub. L. 103–465, set out as a note under section 5001 of this title.

Effective Date of 1984 Amendment

Amendment by Pub. L. 98–369 effective July 18, 1984, see section 456(c) of Pub. L. 98–369, set out as an Effective Date note under section 5101 of this title.

Effective Date of 1980 Amendment

Amendment by Pub. L. 96–223 effective on first day of first calendar month beginning more than 60 days after Apr. 2, 1980, see section 232(h)(3) of Pub. L. 96–223, set out as an Effective Date note under section 5181 of this title.

Effective Date of 1979 Amendment

Amendment by Pub. L. 96–39 effective Jan. 1, 1980, see section 810 of Pub. L. 96–39, set out as a note under section 5001 of this title.

Effective Date of 1977 Amendment

Amendment by Pub. L. 95–176 effective on first day of first calendar month beginning more than 90 days after Nov. 14, 1977, see section 7 of Pub. L. 95–176, set out as a note under section 5003 of this title.

Effective Date of 1976 Amendment

Pub. L. 94–455, title XIX, §1905(d), Oct. 4, 1976, 90 Stat. 1824, provided that: "The amendments made by this section [amending this section and sections 5007 to 5009, 5025, 5026, 5043, 5054, 5061, 5105, 5111, 5113, 5114, 5117, 5121, 5122, 5131, 5142, 5148, 5171, 5174, 5177, 5179, 5214, 5222, 5232 to 5234, 5272, 5314, 5362, 5368, 5392, 5505, 5551, 5601, 5662, 5685, 5701, 5703, 5704, 5712, 5723, 5751, 5752, 5762, and 5763 of this title and repealing sections 5104, 5144, 5315, 5676, and 5689 of this title] shall take effect on the first day of the first month which begins more than 90 days after the date of the enactment of this Act [Oct. 4, 1976]."

§5006. Determination of tax

(a) Requirements

(1) In general

Except as otherwise provided in this section, the tax on distilled spirits shall be determined when the spirits are withdrawn from bond. Such tax shall be determined by such means as the Secretary shall by regulations prescribe, and with the use of such devices and apparatus (including but not limited to tanks and pipelines) as the Secretary may require. The tax on distilled spirits withdrawn from the bonded premises of a distilled spirits plant shall be determined upon completion of the gauge for determination of tax and before withdrawal from bonded premises, under such regulations as the Secretary shall prescribe.

(2) Distilled spirits not accounted for

If the Secretary finds that the distiller has not accounted for all the distilled spirits produced by him, he shall, from all the evidence he can obtain, determine what quantity of distilled spirits was actually produced by such distiller, and an assessment shall be made for the difference between the quantity reported and the quantity shown to have been actually produced at the rate of tax imposed by law for every proof gallon.

(b) Taxable loss

(1) On original quantity

Where there is evidence satisfactory to the Secretary that there has been any loss of distilled spirits from any cask or other package deposited on bonded premises, other than a loss which by reason of section 5008(a) is not taxable, the Secretary may require the withdrawal from bonded premises of such distilled spirits, and direct the officer designated by him to collect the tax accrued on the original quantity of distilled spirits entered for deposit on bonded premises in such cask or package; except that, under regulations prescribed by the Secretary, when the extent of any loss from causes other than theft or unauthorized voluntary destruction can be established by the proprietor to the satisfaction of the Secretary an allowance of the tax on the loss so established may be credited against the tax on the original quantity. If such tax is not paid on demand it shall be assessed and collected as other taxes are assessed and collected.

(2) Alternative method

Where there is evidence satisfactory to the Secretary that there has been access, other than is authorized by law, to the contents of casks or packages stored on bonded premises, and the extent of such access is such as to evidence a lack of due diligence or a failure to employ necessary and effective controls on the part of the proprietor, the Secretary (in lieu of requiring the casks or packages to which such access has been had to be withdrawn and tax paid on the original quantity of distilled spirits entered for deposit on bonded premises in such casks or packages as provided in paragraph (1)) may assess an amount equal to the tax on 5 proof gallons of distilled spirits at the prevailing rate on each of the total number of such casks or packages as determined by him.

(3) Application of subsection

The provisions of this subsection shall apply to distilled spirits which are filled into casks or packages, as authorized by law, after entry and deposit on bonded premises, whether by recasking, filling from storage tanks, consolidation of packages, or otherwise; and the quantity filled into such casks or packages shall be deemed to be the original quantity for the purpose of this subsection, in the case of loss from such casks or packages.

(c) Distilled spirits not bonded

(1) General

The tax on any distilled spirits, removed from the place where they were distilled and (except as otherwise provided by law) not deposited in storage on bonded premises of a distilled spirits plant, shall, at any time within the period of limitation provided in section 6501, when knowledge of such fact is obtained by the Secretary, be assessed on the distiller of such distilled spirits (or other person liable for the tax) and payment of such tax immediately demanded and, on the neglect or refusal of payment, the Secretary shall proceed to collect the same by distraint. This paragraph shall not exclude any other remedy or proceeding provided by law.

(2) Production at other than qualified plants

Except as otherwise provided by law, the tax on any distilled spirits produced in the United States at any place other than a qualified distilled spirits plant shall be due and payable immediately upon production.

(d) Unlawfully imported distilled spirits

Distilled spirits smuggled or brought into the United States unlawfully shall, for purposes of this chapter, be held to be imported into the United States, and the internal revenue tax shall be due and payable at the time of such importation.

(e) Cross reference

For provisions relating to removal of distilled spirits from bonded premises on determination of tax, see section 5213.

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1320; amended Pub. L. 94–455, title XIX, §1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 96–39, title VIII, §§804(a), 807(a)(4), July 26, 1979, 93 Stat. 274, 280.)

Prior Provisions

A prior section 5006, acts Aug. 16, 1954, ch. 736, 68A Stat. 599; Sept. 2, 1958, Pub. L. 85–859, title II, §206(a), 72 Stat. 1431, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859.

Provisions similar to those comprising subsecs. (a)(2)(A), (3) of this section were contained in prior sections 5007(e)(1) and 5232(a), act Aug. 16, 1954, ch. 736, 68A Stat. 600, 643, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

1979—Subsec. (a)(1). Pub. L. 96–39, §804(a), struck out "internal revenue" after "provided in this section, the" and "storage, gauging, and bottling" after "but not limited to".

Subsec. (a)(2), (3). Pub. L. 96–39, §804(a), redesignated par. (3) as (2). Former par. (2), relating to distilled spirits entered for storage, was struck out.

Subsec. (b)(1). Pub. L. 96–39, §807(a)(4)(A), (B), substituted "on bonded premises" for "in storage in internal revenue bond" in two places and "; except" for ", notwithstanding that the time specified in any bond given for the withdrawal of the spirits entered in storage in such cask or package has not expired, except".

Subsec. (b)(2), (3). Pub. L. 96–39, §807(a)(4)(B), substituted "on bonded premises" for "in storage in internal revenue bond".

1976—Subsecs. (a) to (c). Pub. L. 94–455 struck out "or his delegate" after "Secretary".

Effective Date of 1979 Amendment

Amendment by Pub. L. 96–39 effective Jan. 1, 1980, see section 810 of Pub. L. 96–39, set out as a note under section 5001 of this title.

Application of 1972 Amendments to Prior Sections

Pub. L. 85–859, title II, §206(f), Sept. 2, 1958, 72 Stat. 1431, as amended by Pub. L. 99–514, §2, Oct. 22, 1986, 100 Stat. 2095, provided:

"(1) The amendments made by this section [amending this section and sections 5005, 5232, 5242, and 5243 of this title] shall apply with respect to:

"(A) distilled spirits which on the date of the enactment of this Act [Sept. 2, 1958] are in internal revenue bonded warehouses or are in transit to or between such warehouses, and in respect of which the 8-year bonding period has not expired before the date of enactment of this Act; and

"(B) distilled spirits which after the date of the enactment of this Act [Sept. 2, 1958] are entered for deposit in an internal revenue bonded warehouse.

"(2) If the 8 years from the date of original entry of any distilled spirits for deposit in internal revenue bonded warehouses expires at any time during the 10-day period which begins on the date of the enactment of this Act [Sept. 2, 1958], the amendments made by this section shall apply with respect to such spirits if (and only if) before the close of such 10-day period there is filed with the Secretary of the Treasury or his delegate either—

"(A) a consent of surety which changes (for periods on and after the date of the enactment of this Act) the condition based on the withdrawal of spirits from the internal revenue bonded warehouse within 8 years from the date of original entry for deposit to a condition based on the withdrawal of spirits from the internal revenue bonded warehouse within 20 years from the date of original entry for deposit, or

"(B) a bond which applies to periods on and after the date of the enactment of this Act and which satisfies the requirements of the Internal Revenue Code of 1986 [formerly I.R.C. 1954], as amended by this section, and is conditioned on the withdrawal of spirits from the internal revenue bonded warehouse within 20 years from the date of original entry for deposit."

§5007. Collection of tax on distilled spirits

(a) Tax on distilled spirits removed from bonded premises

The tax on domestic distilled spirits and on distilled spirits removed from customs custody under section 5232 shall be paid in accordance with section 5061.

(b) Collection of tax on imported distilled spirits

The internal revenue tax imposed by section 5001(a)(1) and (2) upon imported distilled spirits shall be collected by the Secretary and deposited as internal revenue collections, under such regulations as the Secretary may prescribe. Section 5688 shall be applicable to the disposition of imported spirits.

(c) Cross references

(1) For authority of the Secretary to make determinations and assessments of internal revenue taxes and penalties, see section 6201(a).

(2) For authority to assess tax on distilled spirits not bonded, see section 5006(c).

(3) For provisions relating to payment of tax, under certain conditions, on distilled spirits withdrawn free of tax, denatured distilled spirits, articles, and volatile fruit-flavor concentrates, see section 5001(a)(4), (5), and (6).

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1322; amended Pub. L. 94–455, title XIX, §§1905(b)(2)(A), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1822, 1834; Pub. L. 96–39, title VIII, §807(a)(5), July 26, 1979, 93 Stat. 280; Pub. L. 103–465, title I, §136(c)(3), (4), Dec. 8, 1994, 108 Stat. 4841, 4842.)

Prior Provisions

A prior section 5007, act Aug. 16, 1954, ch. 736, 68A Stat. 600, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859.

Prior section 5007(c) related to "payment of tax on alcoholic compounds from Puerto Rico and Virgin Islands". See section 7652 of this title.

Prior section 5007(e)(1) related to "assessment for deficiencies in production and excess of materials used" and "requirement". See sections 5004(b)(1) and 5006(a)(3) of this title.

Prior section 5007(e)(2) related to "relief from assessment for deficiencies in production and excess of materials used" and is obsolete.

Amendments

1994—Subsec. (b). Pub. L. 103–465, §136(c)(3), amended subsec. (b) generally, striking out provisions relating to collection and deposit as internal revenue collections of taxes on imported perfumes containing distilled spirits.

Subsec. (c)(3). Pub. L. 103–465, §136(c)(4), substituted "section 5001(a)(4), (5), and (6)" for "section 5001(a)(5), (6), and (7)".

1979—Subsec. (a). Pub. L. 96–39 struck out "(1) General" before "The tax on domestic" and par. (2) which related to distilled spirits withdrawn to bottling premises under withdrawal bond.

1976—Subsec. (a)(2). Pub. L. 94–455, §1906(b)(13)(A), struck out "or his delegate" after "Secretary".

Subsec. (b)(1). Pub. L. 94–455, §§1905(b)(2)(A), 1906(b)(13)(A), struck out second sentence "Such tax shall be in addition to any customs duty imposed under the Tariff Act of 1930 (46 Stat. 590; 19 U.S.C., chapter 4), or any subsequent act." and "or his delegate" after "Secretary" wherever appearing.

Subsecs. (b)(2), (c)(1). Pub. L. 94–455, §1906(b)(13)(A), struck out "or his delegate" after "Secretary" wherever appearing.

Effective Date of 1994 Amendment

Amendment by Pub. L. 103–465 effective Jan. 1, 1995, see section 136(d) of Pub. L. 103–465, set out as a note under section 5001 of this title.

Effective Date of 1979 Amendment

Amendment by Pub. L. 96–39 effective Jan. 1, 1980, see section 810 of Pub. L. 96–39, set out as a note under section 5001 of this title.

Effective Date of 1976 Amendment

Amendment by section 1905(b)(2)(A) of Pub. L. 94–455 effective on first day of first month which begins more than 90 days after Oct. 4, 1976, see section 1905(d) of Pub. L. 94–455, set out as a note under section 5005 of this title.

§5008. Abatement, remission, refund, and allowance for loss or destruction of distilled spirits

(a) Distilled spirits lost or destroyed in bond

(1) Extent of loss allowance

No tax shall be collected in respect of distilled spirits lost or destroyed while in bond, except that such tax shall be collected—

(A) Theft

In the case of loss by theft, unless the Secretary finds that the theft occurred without connivance, collusion, fraud, or negligence on the part of the proprietor of the distilled spirits plant, owner, consignor, consignee, bailee, or carrier, or the employees or agents of any of them;

(B) Voluntary destruction

In the case of voluntary destruction, unless such destruction is carried out as provided in subsection (b); and

(C) Unexplained shortage

In the case of an unexplained shortage of bottled distilled spirits.

(2) Proof of loss

In any case in which distilled spirits are lost or destroyed, whether by theft or otherwise, the Secretary may require the proprietor of the distilled spirits plant or other person liable for the tax to file a claim for relief from the tax and submit proof as to the cause of such loss. In every case where it appears that the loss was by theft, the burden shall be upon the proprietor of the distilled spirits plant or other person responsible for the distilled spirits tax to establish to the satisfaction of the Secretary that such loss did not occur as the result of connivance, collusion, fraud, or negligence on the part of the proprietor of the distilled spirits plant, owner, consignor, consignee, bailee, or carrier, or the employees or agents of any of them.

(3) Refund of tax

In any case where the tax would not be collectible by virtue of paragraph (1), but such tax has been paid, the Secretary shall refund such tax.

(4) Limitations

Except as provided in paragraph (5), no tax shall be abated, remitted, credited, or refunded under this subsection where the loss occurred after the tax was determined (as provided in section 5006(a)). The abatement, remission, credit, or refund of taxes provided for by paragraphs (1) and (3) in the case of loss of distilled spirits by theft shall only be allowed to the extent that the claimant is not indemnified against or recompensed in respect of the tax for such loss.

(5) Applicability

The provisions of this subsection shall extend to and apply in respect of distilled spirits lost after the tax was determined and before completion of the physical removal of the distilled spirits from the bonded premises.

(b) Voluntary destruction

The proprietor of the distilled spirits plant or other persons liable for the tax imposed by this chapter or by section 7652 with respect to any distilled spirits in bond may voluntarily destroy such spirits, but only if such destruction is under such supervision and under such regulations as the Secretary may prescribe.

(c) Distilled spirits returned to bonded premises

(1) In general

Whenever any distilled spirits on which tax has been determined or paid are returned to the bonded premises of a distilled spirits plant under section 5215(a), the Secretary shall abate or (without interest) credit or refund the tax imposed under section 5001(a)(1) (or the tax equal to such tax imposed under section 7652) on the spirits so returned.

(2) Claim must be filed within 6 months of return of spirits

No allowance under paragraph (1) may be made unless claim therefor is filed within 6 months of the date of the return of the spirits. Such claim may be filed only by the proprietor of the distilled spirits plant to which the spirits were returned, and shall be filed in such form as the Secretary may by regulations prescribe.

(d) Distilled spirits withdrawn without payment of tax

The provisions of subsection (a) shall be applicable to loss of distilled spirits occurring during transportation from bonded premises of a distilled spirits plant to—

(1) the port of export, in case of withdrawal under section 5214(a)(4);

(2) the customs manufacturing bonded warehouse, in case of withdrawal under section 5214(a)(6);

(3) the vessel or aircraft, in case of withdrawal under section 5214(a)(7);

(4) the foreign-trade zone, in case of withdrawal under section 5214(a)(8); and

(5) the customs bonded warehouse in the case of withdrawal under sections 5066 and 5214(a)(9).


The provisions of subsection (a) shall be applicable to loss of distilled spirits withdrawn from bonded premises without payment of tax under section 5214(a)(10) for certain research, development, or testing, until such distilled spirits are used as provided by law.

(e) Other laws applicable

All provisions of law, including penalties, applicable in respect of the internal revenue tax on distilled spirits, shall, insofar as applicable and not inconsistent with subsection (c), be applicable to the credits or refunds provided for under such subsection to the same extent as if such credits or refunds constituted credits or refunds of such tax.

(f) Cross reference

For provisions relating to allowance for loss in case of wine spirits withdrawn for use in wine production, see section 5373(b)(3).

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1323; amended Pub. L. 89–44, title VIII, §805(a), June 21, 1965, 79 Stat. 160; Pub. L. 90–630, §1, Oct. 22, 1968, 82 Stat. 1328; Pub. L. 91–659, §§1, 2(a), (b), Jan. 8, 1971, 84 Stat. 1964; Pub. L. 94–273, §47, Apr. 21, 1976, 90 Stat. 382; Pub. L. 94–455, title XIX, §§1905(a)(2), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1818, 1834; Pub. L. 95–176, §§2(f), 4(e), Nov. 14, 1977, 91 Stat. 1364, 1366; Pub. L. 96–39, title VIII, §807(a)(6), July 26, 1979, 93 Stat. 281; Pub. L. 105–34, title XIV, §1411(a), Aug. 5, 1997, 111 Stat. 1046.)

Prior Provisions

A prior section 5008, act Aug. 16, 1954, ch. 736, 68A Stat. 602, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859. See sections 5205(a), (g) and 5604(a)(1) of this title.

Provisions similar to those comprising subsecs. (a)(1) to (4) and (f)(1), (2) of this section were contained in prior sections 5011(a)(1) to (4), 5023, 5247(e) and 5522(b), act Aug. 16, 1954, ch. 736, 68A Stat. 604, 606, 648, 679, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

1997—Subsec. (c)(1). Pub. L. 105–34 substituted "on which tax has been determined or paid" for "withdrawn from bonded premises on payment or determination of tax".

1979—Subsec. (a)(1)(C). Pub. L. 96–39, §807(a)(6)(A), added subpar. (C).

Subsec. (a)(5). Pub. L. 96–39, §807(a)(6)(B), substituted "before" for "prior to the completion" and struck out provisions relating to the applicability of this subsection where the loss occurred after the time prescribed for the withdrawal of the distilled spirits from the bonded premises under section 5006(a)(2) and relating to the applicability of this paragraph to any loss of distilled spirits for which abatement, remission, credit, or refund of tax is allowed under subsec. (c).

Subsec. (b). Pub. L. 96–39, §807(a)(6)(C), struck out "(1) Distilled spirits in bond" before "The proprietor of" and provisions relating to distilled spirits withdrawn for rectification or bottling.

Subsec. (c). Pub. L. 96–39, §807(a)(6)(C), added subsec. (c). Former subsec. (c), which related to loss of distilled spirits withdrawn from bond for rectification or bottling, was struck out.

Subsec. (d). Pub. L. 96–39, §807(a)(6)(D), redesignated subsec. (f) as (d). Former subsec. (d), which related to distilled spirits returned to bonded premises, was struck out.

Subsec. (e). Pub. L. 96–39, §807(a)(6)(D), (E), redesignated subsec. (g) as (e) and substituted "subsection (c)" for "subsections (b)(2), (c), and (d)" and "under such subsection" for "under such subsections". Former subsec. (e), which related to samples of distilled spirits used for analysis or testing by United States, was struck out.

Subsec. (f). Pub. L. 96–39, §807(a)(6)(D), redesignated subsec. (h) as (f). Former subsec. (f) redesignated (d).

Subsecs. (g), (h). Pub. L. 96–39, §807(a)(6)(D), redesignated subsecs. (g) and (h) as (e) and (f), respectively.

1977—Subsec. (d). Pub. L. 95–176, §2(f), reenacted par. (1) and substituted heading "General" for "Allowance of tax" and "(or the tax equal to such tax imposed under section 7652)" for "or under section 7652"; added pars. (2) and (3); and redesignated as par. (4) provisions of former par. (2) and inserted reference to allowance of claims under par. (2) or (3).

Subsec. (f)(5). Pub. L. 95–176, §4(e), added par. (5).

1976—Subsec. (b)(1). Pub. L. 94–455, §§1905(a)(2)(A), 1906(b)(13)(A), inserted "or by section 7652" after "tax imposed by this chapter" and struck out "or his delegate" after "Secretary".

Subsec. (b)(2). Pub. L. 94–455, §§1905(a)(2)(B), 1906(b)(13)(A), struck out "or his delegate" after "Secretary" and inserted ", or under section 7652" after "under subpart B of this part".

Subsec. (c)(1). Pub. L. 94–455, §§1905(a)(2)(C), 1906(b)(13)(A), struck out "or his delegate" after "Secretary" wherever appearing and inserted "or under section 7652" after "under section 5001(a)(1)".

Subsec. (c)(2), (3). Pub. L. 94–273 substituted "computation year" for "fiscal year" wherever appearing.

Subsec. (c)(5). Pub. L. 94–455, §1906(b)(13)(A), struck out "or his delegate" after "Secretary".

Subsec. (d)(1). Pub. L. 94–455, §§1905(a)(2)(C), (D), 1906(b)(13)(A), struck out "on or after July 1, 1959," after "from bonded premises," and "or his delegate" after "Secretary" and inserted "or under section 7652" after "under section 5001(a)(1)".

1971—Subsec. (b)(2). Pub. L. 91–659, §2(a), struck out condition that the distilled spirits can be destroyed only before bottling and permitted destruction after completion of bottling so long as the distilled spirits are on the bottling premises and added taxes imposed under subpart B of this Part as additional taxes which can be claimed for abatement, remission, credit or refund.

Subsec. (c)(1)(A). Pub. L. 91–659, §1, added cl. (iii).

Subsec. (c)(5). Pub. L. 91–659, §2(b), permits distilled spirits returned to bottling premises to be treated for purposes of the various loss provisions as though they had not been removed from the bottling premises.

1968—Subsec. (c)(1). Pub. L. 90–630 inserted provisions allowing abatement, remission, and refund if the casualty loss occurs after completion of the packaging but before the spirits have been removed from the premises of the distilled spirits plant to which the spirits were removed from bond.

1965—Subsec. (d)(2). Pub. L. 89–44 struck out final clause prohibiting the allowance of a claim in respect to any distilled spirits withdrawn from bonded premises of a distilled spirits plant more than 6 months prior to the date of such return.

Effective Date of 1997 Amendment

Pub. L. 105–34, title XIV, §1411(b), Aug. 5, 1997, 111 Stat. 1046, provided that: "The amendment made by subsection (a) [amending this section] shall take effect on the 1st day of the 1st calendar quarter that begins at least 180 days after the date of the enactment of this Act [Aug. 5, 1997]."

Effective Date of 1979 Amendment

Amendment by Pub. L. 96–39 effective Jan. 1, 1980, see section 810 of Pub. L. 96–39, set out as a note under section 5001 of this title.

Effective Date of 1977 Amendment

Amendment by Pub. L. 95–176 effective on first day of first calendar month beginning more than 90 days after Nov. 14, 1977, see section 7 of Pub. L. 95–176, set out as a note under section 5003 of this title.

Effective Date of 1976 Amendment

Amendment by section 1905(a)(2) of Pub. L. 94–455 effective on first day of first month which begins more than 90 days after Oct. 4, 1976, see section 1905(d) of Pub. L. 94–455, set out as a note under section 5005 of this title.

Effective Date of 1971 Amendment

Amendment by Pub. L. 91–659 effective on first day of first calendar month which begins more than 90 days after Jan. 8, 1971, see section 6 of Pub. L. 91–659, set out as an Effective Date note under section 5066 of this title.

Effective Date of 1968 Amendment

Pub. L. 90–630, §4, Oct. 22, 1968, 82 Stat. 1329, provided that:

"(a) For purposes of subsection (b), the effective date of this Act is the first day of the first calendar month which begins more than 90 days after the date of the enactment of this Act [Oct. 22, 1968].

"(b) The amendments made by the first section of this Act [amending this section] shall apply only to losses sustained on or after such effective date. The amendments made by section 2 [amending section 5062 of this title and section 1313 of Title 19, Customs Duties] shall apply only to articles exported on or after such effective date. The amendments made by section 3 [amending section 5232 of this title] shall apply only to withdrawals from customs custody on or after such effective date."

Effective Date of 1965 Amendment

Pub. L. 89–44, title VIII, §805(g)(1), June 21, 1965, 79 Stat. 162, provided that: "The amendments made by subsections (a), (c), (e), and (f)(6) [amending this section and sections 5062, 5215, and 5608 of this title] shall take effect on July 1, 1965."

Distilled Spirits Returned to Bonded Premises of Distilled Spirits Plant During 1980

Subsec. (c)(1) of this section to be treated as including a reference to section 5041 of this title with respect to distilled spirits returned to the bonded premises of distilled spirits plants during 1980, see section 808(d) of Pub. L. 96–39, set out as a note under section 5061 of this title.

[§5009. Repealed. Pub. L. 96–39, title VIII, §807(a)(7), July 26, 1979, 93 Stat. 281]

Section, added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1327; amended Pub. L. 94–455, title XIX, §§1905(a)(3), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1818, 1834, related to drawback on exportation of distilled spirits in casks or packages.

A prior section 5009, act Aug. 16, 1954, ch. 736, 68A Stat. 603, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859. See sections 5205(c)(1), (f), (i)(4) and 5206(c) of this title.

Effective Date of Repeal

Repeal effective Jan. 1, 1980, see section 810 of Pub. L. 96–39, set out as an Effective Date of 1979 Amendment note under section 5001 of this title.

§5010. Credit for wine content and for flavors content

(a) Allowance of credit

(1) Wine content

On each proof gallon of the wine content of distilled spirits, there shall be allowed a credit against the tax imposed by section 5001 (or 7652) equal to the excess of—

(A) $13.50, over

(B) the rate of tax which would be imposed on the wine under section 5041(b) but for its removal to bonded premises.

(2) Flavors content

On each proof gallon of the flavors content of distilled spirits, there shall be allowed a credit against the tax imposed by section 5001 (or 7652) equal to $13.50.

(3) Fractional part of proof gallon

In the case of any fractional part of a proof gallon of the wine content, or of the flavors content, of distilled spirits, a proportionate credit shall be allowed.

(b) Time for determining and allowing credit

(1) In general

The credit allowable by subsection (a)—

(A) shall be determined at the same time the tax is determined under section 5006 (or 7652) on the distilled spirits containing the wine or flavors, and

(B) shall be allowable at the time the tax imposed by section 5001 (or 7652) on such distilled spirits is payable as if the credit allowable by this section constituted a reduction in the rate of tax.

(2) Determination of content in the case of imports

For purposes of this section, the wine content, and the flavors content, of imported distilled spirits shall be established by such chemical analysis, certification, or other methods as may be set forth in regulations prescribed by the Secretary.

(c) Definitions

For purposes of this section—

(1) Wine content

(A) In general

The term "wine content" means alcohol derived from wine.

(B) Wine

The term "wine"—

(i) means wine on which tax would be imposed by paragraph (1), (2), or (3) of section 5041(b) but for its removal to bonded premises, and

(ii) does not include any substance which has been subject to distillation at a distilled spirits plant after receipt in bond.

(2) Flavors content

(A) In general

Except as provided in subparagraph (B), the term "flavors content" means alcohol derived from flavors of a type for which drawback is allowable under section 5114.

(B) Exceptions

The term "flavors content" does not include—

(i) alcohol derived from flavors made at a distilled spirits plant,

(ii) alcohol derived from flavors distilled at a distilled spirits plant, and

(iii) in the case of any distilled spirits product, alcohol derived from flavors to the extent such alcohol exceeds (on a proof gallon basis) 2½ percent of the finished product.

(Added Pub. L. 96–598, §6(a), Dec. 24, 1980, 94 Stat. 3488; amended Pub. L. 98–369, div. A, title I, §27(a)(2), July 18, 1984, 98 Stat. 507; Pub. L. 100–647, title V, §5063(a), Nov. 10, 1988, 102 Stat. 3681; Pub. L. 101–508, title XI, §11201(a)(2), Nov. 5, 1990, 104 Stat. 1388–415; Pub. L. 109–59, title XI, §11125(b)(14), Aug. 10, 2005, 119 Stat. 1956.)

Prior Provisions

A prior section 5010, act Aug. 16, 1954, ch. 736, 68A Stat. 603, related to miscellaneous stamp provisions, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

2005—Subsec. (c)(2)(A). Pub. L. 109–59 substituted "section 5114" for "section 5134".

1990—Subsec. (a)(1), (2). Pub. L. 101–508 substituted "$13.50" for "$12.50".

1988—Subsec. (c)(2)(B). Pub. L. 100–647 added cl. (ii) and redesignated former cl. (ii) as (iii).

1984—Subsec. (a)(1), (2). Pub. L. 98–369 substituted "$12.50" for "$10.50".

Effective Date of 2005 Amendment

Amendment by Pub. L. 109–59 effective July 1, 2008, but inapplicable to taxes imposed for periods before such date, see section 11125(c) of Pub. L. 109–59, set out as a note under section 5002 of this title.

Effective Date of 1990 Amendment

Amendment by Pub. L. 101–508 effective Jan. 1, 1991, see section 11201(d) of Pub. L. 101–508, set out as a note under section 5001 of this title.

Effective Date of 1988 Amendment

Pub. L. 100–647, title V, §5063(b), Nov. 10, 1988, 102 Stat. 3681, provided that: "The amendments made by this section [amending this section] shall apply with respect to distilled spirits withdrawn from bond after the date of the enactment of this Act [Nov. 10, 1988]."

Effective Date of 1984 Amendment

Amendment by Pub. L. 98–369 effective Oct. 1, 1985, see section 27(d)(1) of Pub. L. 98–369, set out as a note under section 5001 of this title.

Effective Date

Pub. L. 96–598, §6(c), Dec. 24, 1980, 94 Stat. 3489, provided that: "The amendments made by subsections (a) and (b) [enacting this section] shall take effect on January 1, 1980."

§5011. Income tax credit for average cost of carrying excise tax

(a) In general

For purposes of section 38, the amount of the distilled spirits credit for any taxable year is the amount equal to the product of—

(1) in the case of—

(A) any eligible wholesaler, the number of cases of bottled distilled spirits—

(i) which were bottled in the United States, and

(ii) which are purchased by such wholesaler during the taxable year directly from the bottler of such spirits, or


(B) any person which is subject to section 5005 and which is not an eligible wholesaler, the number of cases of bottled distilled spirits which are stored in a warehouse operated by, or on behalf of, a State or political subdivision thereof, or an agency of either, on which title has not passed on an unconditional sale basis, and


(2) the average tax-financing cost per case for the most recent calendar year ending before the beginning of such taxable year.

(b) Eligible wholesaler

For purposes of this section, the term "eligible wholesaler" means any person which holds a permit under the Federal Alcohol Administration Act as a wholesaler of distilled spirits which is not a State or political subdivision thereof, or an agency of either.

(c) Average tax-financing cost

(1) In general

For purposes of this section, the average tax-financing cost per case for any calendar year is the amount of interest which would accrue at the deemed financing rate during a 60-day period on an amount equal to the deemed Federal excise tax per case.

(2) Deemed financing rate

For purposes of paragraph (1), the deemed financing rate for any calendar year is the average of the corporate overpayment rates under paragraph (1) of section 6621(a) (determined without regard to the last sentence of such paragraph) for calendar quarters of such year.

(3) Deemed Federal excise tax per case

For purposes of paragraph (1), the deemed Federal excise tax per case is $25.68.

(d) Other definitions and special rules

For purposes of this section—

(1) Case

The term "case" means 12 80-proof 750-milliliter bottles.

(2) Number of cases in lot

The number of cases in any lot of distilled spirits shall be determined by dividing the number of liters in such lot by 9.

(Added Pub. L. 109–59, title XI, §11126(a), Aug. 10, 2005, 119 Stat. 1957.)

References in Text

The Federal Alcohol Administration Act, referred to in subsec. (b), is act Aug. 29, 1935, ch. 814, 49 Stat. 977, as amended, which is classified generally to subchapter I (§201 et seq.) of chapter 8 of Title 27, Intoxicating Liquors. For complete classification of this Act to the Code, see section 201 of Title 27 and Tables.

Prior Provisions

A prior section 5011, act Aug. 16, 1954, ch. 736, 68A Stat. 604, related to abatement, remission, refund and allowance for loss or destruction of distilled spirits, prior to the general revision of this chapter by Pub. L. 85–859.

A prior section 5012, act Aug. 16, 1954, ch. 736, 68A Stat. 605, related to drawback on exportation of distilled spirits, prior to the general revision of this chapter by Pub. L. 85–859.

Effective Date

Section applicable to taxable years beginning after Sept. 30, 2005, see section 11126(d) of Pub. L. 109–59, set out as an Effective Date of 2005 Amendments note under section 38 of this title.

[Subpart B—Repealed]

[§§5021 to 5026. Repealed. Pub. L. 96–39, title VIII, §803(a), July 26, 1979, 93 Stat. 274]

Section 5021, added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1328, provided for imposition of a tax on rectified distilled spirits or wines.

A prior section 5021, act Aug. 16, 1954, ch. 736, 68A Stat. 606, related to imposition and rate of tax, prior to the general revision of this chapter by Pub. L. 85–859.

Section 5022, added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1328; amended Pub. L. 86–75, §3(a)(4), June 30, 1959, 73 Stat. 157; Pub. L. 86–564, title II, §202(a)(6), June 30, 1960, 74 Stat. 290; Pub. L. 87–72, §3(a)(6), June 30, 1961, 75 Stat. 193; Pub. L. 87–508, §3(a)(5), June 28, 1962, 76 Stat. 114; Pub. L. 88–52, §3(a)(6), June 29, 1963, 77 Stat. 72; Pub. L. 88–348, §2(a)(6), June 30, 1964, 78 Stat. 237; Pub. L. 89–44, title V, §501(b), June 21, 1965, 79 Stat. 150, imposed a tax on cordials and liqueurs containing wine.

A prior section 5022, acts Aug. 16, 1954, ch. 736, 68A Stat. 606; Mar. 30, 1955, ch. 18, §3(a)(6), 69 Stat. 14; Mar. 29, 1956, ch. 115, §3(a)(6), 70 Stat. 66; Mar. 29, 1957, Pub. L. 85–12, §3(a)(4), 71 Stat. 9; June 30, 1958, Pub. L. 85–475, §3(a)(4), 72 Stat. 259, imposed a tax on cordials and liqueurs containing wine, prior to the general revision of this chapter by Pub. L. 85–859.

Section 5023, added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1328, imposed a tax on the blending of beverage rums and brandies.

A prior section 5023, act Aug. 16, 1954, ch. 736, 68A Stat. 606, imposed a tax on blending of beverage brandies, prior to the general revision of this chapter by Pub. L. 85–859.

Section 5024, added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1328, indicated the sources for the definitions of "rectifier", "products of rectification", and "distilled spirits" and referred to other definitions relating to distilled spirits as well as other definitions of general application to this title.

A prior section 5024, act Aug. 16, 1954, ch. 736, 68A Stat. 607, defined "rectifier" and "products of rectification", prior to the general revision of this chapter by Pub. L. 85–859.

Section 5025, added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1328; amended Pub. L. 89–44, title VIII, §805(b), (f)(2)–(5), June 21, 1965, 79 Stat. 161; Pub. L. 94–455, title XIX, §§1905(a)(4), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1818, 1834; Pub. L. 95–176, §§5(b), 6, Nov. 14, 1977, 91 Stat. 1366, 1367, enumerated 12 exemptions from the rectification tax.

A prior section 5025, act Aug. 16, 1954, ch. 736, 68A Stat. 607, related to exemption from rectification tax, prior to the general revision of this chapter by Pub. L. 85–859.

Provisions similar to those comprising section 5025(e)(1), (2), (4) of this title were contained in former sections 5023, 5217(a), and 5306 of this title, act Aug. 16, 1954, ch. 736, 68A Stat. 606, 641, 657, prior to the general revision of this chapter by Pub. L. 85–859.

Section 5026, added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1330; Pub. L. 94–455, title XIX, §§1905(b)(2)(B), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1822, 1834, related to the determination and collection of the rectification tax.

A prior section 5026, act Aug. 16, 1954, ch. 736, 68A Stat. 608, related to determination and collection of rectification tax, prior to the general revision of this chapter by Pub. L. 85–859.

A prior section 5027, act Aug. 16, 1954, ch. 736, 68A Stat. 609, related to stamp provisions applicable to rectifiers, prior to the general revision of this chapter by Pub. L. 85–859.

A prior section 5028, act Aug. 16, 1954, ch. 736, 68A Stat. 609, related to cross references for penalty provisions, prior to the general revision of this chapter by Pub. L. 85–859.

Effective Date of Repeal

Repeal effective Jan. 1, 1980, see section 810 of Pub. L. 96–39, set out as an Effective Date of 1979 Amendment note under section 5001 of this title.

Subpart C—Wines

Sec.
5041.
Imposition and rate of tax.
5042.
Exemption from tax.
5043.
Collection of taxes on wines.
5044.
Refund of tax on wine.
5045.
Cross references.

        

Prior Provisions

A prior subpart C, comprising sections 5041 to 5045, related to wines, prior to the general revision of this chapter by Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1313.

Amendments

1997Pub. L. 105–34, title XIV, §1416(b)(3), Aug. 5, 1997, 111 Stat. 1048, struck out "unmerchantable" before "wine" in item 5044.

§5041. Imposition and rate of tax

(a) Imposition

There is hereby imposed on all wines (including imitation, substandard, or artificial wine, and compounds sold as wine) having not in excess of 24 percent of alcohol by volume, in bond in, produced in, or imported into, the United States, taxes at the rates shown in subsection (b), such taxes to be determined as of the time of removal for consumption or sale. All wines containing more than 24 percent of alcohol by volume shall be classed as distilled spirits and taxed accordingly. Still wines shall include those wines containing not more than 0.392 gram of carbon dioxide per hundred milliliters of wine; except that the Secretary may by regulations prescribe such tolerances to this maximum limitation as may be reasonably necessary in good commercial practice.

(b) Rates of tax

(1) On still wines containing not more than 14 percent of alcohol by volume, $1.07 per wine gallon;

(2) On still wines containing more than 14 percent and not exceeding 21 percent of alcohol by volume, $1.57 per wine gallon;

(3) On still wines containing more than 21 percent and not exceeding 24 percent of alcohol by volume, $3.15 per wine gallon;

(4) On champagne and other sparkling wines, $3.40 per wine gallon;

(5) On artificially carbonated wines, $3.30 per wine gallon; and

(6) On hard cider, 22.6 cents per wine gallon.

(c) Credit for small domestic producers

(1) Allowance of credit

Except as provided in paragraph (2), in the case of a person who produces not more than 250,000 wine gallons of wine during the calendar year, there shall be allowed as a credit against any tax imposed by this title (other than chapters 2, 21, and 22) of 90 cents per wine gallon on the 1st 100,000 wine gallons of wine (other than wine described in subsection (b)(4)) which are removed during such year for consumption or sale and which have been produced at qualified facilities in the United States. In the case of wine described in subsection (b)(6), the preceding sentence shall be applied by substituting "5.6 cents" for "90 cents".

(2) Reduction in credit

The credit allowable by paragraph (1) shall be reduced (but not below zero) by 1 percent for each 1,000 wine gallons of wine produced in excess of 150,000 wine gallons of wine during the calendar year.

(3) Time for determining and allowing credit

The credit allowable by paragraph (1)—

(A) shall be determined at the same time the tax is determined under subsection (a) of this section, and

(B) shall be allowable at the time any tax described in paragraph (1) is payable as if the credit allowable by this subsection constituted a reduction in the rate of such tax.

(4) Controlled groups

Rules similar to rules of section 5051(a)(2)(B) shall apply for purposes of this subsection.

(5) Denial of deduction

Any deduction under subtitle A with respect to any tax against which a credit is allowed under this subsection shall only be for the amount of such tax as reduced by such credit.

(6) Credit for transferee in bond

If—

(A) wine produced by any person would be eligible for any credit under paragraph (1) if removed by such person during the calendar year,

(B) wine produced by such person is removed during such calendar year by any other person (hereafter in this paragraph referred to as the "transferee") to whom such wine was transferred in bond and who is liable for the tax imposed by this section with respect to such wine, and

(C) such producer holds title to such wine at the time of its removal and provides to the transferee such information as is necessary to properly determine the transferee's credit under this paragraph,


then, the transferee (and not the producer) shall be allowed the credit under paragraph (1) which would be allowed to the producer if the wine removed by the transferee had been removed by the producer on that date.

(7) Regulations

The Secretary may prescribe such regulations as may be necessary to carry out the purposes of this subsection, including regulations—

(A) to prevent the credit provided in this subsection from benefiting any person who produces more than 250,000 wine gallons of wine during a calendar year, and

(B) to assure proper reduction of such credit for persons producing more than 150,000 wine gallons of wine during a calendar year.

(d) Wine gallon

For the purpose of this chapter, the term "wine gallon" means a United States gallon of liquid measure equivalent to the volume of 231 cubic inches. On lesser quantities the tax shall be paid proportionately (fractions of less than one-tenth gallon being converted to the nearest one-tenth gallon, and five-hundredths gallon being converted to the next full one-tenth gallon).

(e) Tolerances

Where the Secretary finds that the revenue will not be endangered thereby, he may by regulation prescribe tolerances (but not greater than ½ of 1 percent) for bottles and other containers, and, if such tolerances are prescribed, no assessment shall be made and no tax shall be collected for any excess in any case where the contents of a bottle or other container are within the limit of the applicable tolerance prescribed.

(f) Illegally produced wine

Notwithstanding subsection (a), any wine produced in the United States at any place other than the bonded premises provided for in this chapter shall (except as provided in section 5042 in the case of tax-free production) be subject to tax at the rate prescribed in subsection (b) at the time of production and whether or not removed for consumption or sale.

(g) Hard cider

For purposes of subsection (b)(6), the term "hard cider" means a wine—

(1) containing not more than 0.64 gram of carbon dioxide per hundred milliliters of wine, except that the Secretary may by regulations prescribe such tolerances to this limitation as may be reasonably necessary in good commercial practice,

(2) which is derived primarily—

(A) from apples or pears, or

(B) from—

(i) apple juice concentrate or pear juice concentrate, and

(ii) water,


(3) which contains no fruit product or fruit flavoring other than apple or pear, and

(4) which contains at least one-half of 1 percent and less than 8.5 percent alcohol by volume.

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1331; amended Pub. L. 86–75, §3(a)(5), June 30, 1959, 73 Stat. 157; Pub. L. 86–564, title II, §202(a)(7), June 30, 1960, 74 Stat. 290; Pub. L. 87–72, §3(a)(7), June 30, 1961, 75 Stat. 193; Pub. L. 87–508, §3(a)(6), June 28, 1962, 76 Stat. 114; Pub. L. 88–52, §3(a)(7), June 29, 1963, 77 Stat. 72; Pub. L. 88–348, §2(a)(7), June 30, 1964, 78 Stat. 237; Pub. L. 89–44, title V, §501(c), title VIII, §806(a), June 21, 1965, 79 Stat. 150, 162; Pub. L. 93–490, §6(a), Oct. 26, 1974, 88 Stat. 1468; Pub. L. 94–455, title XIX, §1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 100–647, title VI, §6101(a), Nov. 10, 1988, 102 Stat. 3710; Pub. L. 101–508, title XI, §11201(b)(1), (2), Nov. 5, 1990, 104 Stat. 1388–415, 1388-416; Pub. L. 104–188, title I, §1702(b)(5), Aug. 20, 1996, 110 Stat. 1868; Pub. L. 105–34, title IX, §908(a), (b), Aug. 5, 1997, 111 Stat. 876; Pub. L. 105–206, title VI, §6009(a), July 22, 1998, 112 Stat. 812; Pub. L. 114–113, div. Q, title III, §335(a), Dec. 18, 2015, 129 Stat. 3109.)

Prior Provisions

A prior section 5041, acts Aug. 16, 1954, ch. 736, 68A Stat. 609; Mar. 30, 1955, ch. 18, §3(a)(7), 69 Stat. 14; Mar. 29, 1956, ch. 115, §3(a)(7), 70 Stat. 66; Mar. 29, 1957, Pub. L. 85–12, §3(a)(5), 71 Stat. 9; June 30, 1958, Pub. L. 85–475, §3(a)(5), 72 Stat. 259, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

2015—Subsec. (b)(6). Pub. L. 114–113, §335(a)(1), struck out "which is a still wine derived primarily from apples or apple concentrate and water, containing no other fruit product, and containing at least one-half of 1 percent and less than 7 percent alcohol by volume" after "hard cider".

Subsec. (g). Pub. L. 114–113, §335(a)(2), added subsec. (g).

1998—Subsec. (b)(6). Pub. L. 105–206 inserted "which is a still wine" after "hard cider".

1997—Subsec. (b)(6). Pub. L. 105–34, §908(a), added par. (6).

Subsec. (c)(1). Pub. L. 105–34, §908(b), inserted at end "In the case of wine described in subsection (b)(6), the preceding sentence shall be applied by substituting '5.6 cents' for '90 cents'."

1996—Subsec. (c)(6), (7). Pub. L. 104–188 added pars. (6) and (7) and struck out former par. (6) which read as follows:

"(6) Regulations.—The Secretary may prescribe such regulations as may be necessary to prevent the credit provided in this subsection from benefiting any person who produces more than 250,000 wine gallons of wine during a calendar year and to assure proper reduction of such credit for persons producing more than 150,000 wine gallons of wine during a calendar year."

1990—Subsec. (b)(1). Pub. L. 101–508, §11201(b)(1)(A), substituted "$1.07" for "17 cents".

Subsec. (b)(2). Pub. L. 101–508, §11201(b)(1)(B), substituted "$1.57" for "67 cents".

Subsec. (b)(3). Pub. L. 101–508, §11201(b)(1)(C), substituted "$3.15" for "$2.25".

Subsec. (b)(5). Pub. L. 101–508, §11201(b)(1)(D), substituted "$3.30" for "$2.40".

Subsecs. (c) to (f). Pub. L. 101–508, §11201(b)(2), added subsec. (c) and redesignated former subsecs. (c) to (e) as (d) to (f), respectively.

1988—Subsecs. (d), (e). Pub. L. 100–647 added subsec. (d) and redesignated former subsec. (d) as (e).

1976—Subsec. (a). Pub. L. 94–455 struck out "or his delegate" after "Secretary".

1974—Subsec. (a). Pub. L. 93–490 substituted "0.392" for "0.277".

1965—Subsec. (a). Pub. L. 89–44, §806(a), substituted "0.277" for "0.256".

Subsec. (b). Pub. L. 89–44, §501(c)(1)–(5), struck out provisions at end of each par. setting out a specified reduced rate to be applied on and after July 1, 1965.

1964—Subsec. (b). Pub. L. 88–348 substituted "July 1, 1965" for "July 1, 1964" in five places.

1963—Subsec. (b). Pub. L. 88–52 substituted "July 1, 1964" for "July 1, 1963" in five places.

1962—Subsec. (b). Pub. L. 87–508 substituted "July 1, 1963" for "July 1, 1962" in five places.

1961—Subsec. (b). Pub. L. 87–72 substituted "July 1, 1962" for "July 1, 1961" in five places.

1960—Subsec. (b). Pub. L. 86–564 substituted "July 1, 1961" for "July 1, 1960" in five places.

1959—Subsec. (b). Pub. L. 86–75 substituted "July 1, 1960" for "July 1, 1959" in five places.

Effective Date of 2015 Amendment

Pub. L. 114–113, div. Q, title III, §335(b), Dec. 18, 2015, 129 Stat. 3109, provided that: "The amendments made by this section [amending this section] shall apply to hard cider removed during calendar years beginning after December 31, 2016."

Effective Date of 1998 Amendment

Amendment by Pub. L. 105–206 effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates, see section 6024 of Pub. L. 105–206, set out as a note under section 1 of this title.

Effective Date of 1997 Amendment

Pub. L. 105–34, title IX, §908(c), Aug. 5, 1997, 111 Stat. 876, provided that: "The amendments made by this section [amending this section] shall take effect on October 1, 1997."

Effective Date of 1996 Amendment

Amendment by Pub. L. 104–188 effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990, Pub. L. 101–508, title XI, to which such amendment relates, see section 1702(i) of Pub. L. 104–188, set out as a note under section 38 of this title.

Effective Date of 1990 Amendment

Amendment by Pub. L. 101–508 effective Jan. 1, 1991, see section 11201(d) of Pub. L. 101–508, set out as a note under section 5001 of this title.

Effective Date of 1988 Amendment

Pub. L. 100–647, title VI, §6101(b), Nov. 10, 1988, 102 Stat. 3710, provided that: "The amendment made by subsection (a) [amending this section] shall apply to wine removed after December 31, 1988."

Effective Date of 1974 Amendment

Pub. L. 93–490, §6(b), Oct. 26, 1974, 88 Stat. 1468, provided that: "The amendment made by this section [amending this section] shall take effect on the first day of the first calendar month which begins more than 90 days after the date of enactment of this Act [Oct. 26, 1974]."

Effective Date of 1965 Amendment

Amendment by section 501(c) of Pub. L. 89–44 applicable on and after July 1, 1965, see section 701(d) of Pub. L. 89–44, set out as a note under section 5701 of this title.

Pub. L. 89–44, title VIII, §806(d)(1), June 21, 1965, 79 Stat. 164, provided that: "The amendment made by subsection (a) [amending this section] shall take effect on July 1, 1965."

Effective Date

Section effective July 1, 1959, see section 210(a)(1) of Pub. L. 85–859, set out as a note under section 5001 of this title.

Floor Stocks Taxes on Distilled Spirits, Wine, and Beer

Imposition of tax on wine, exception for small domestic producers, exception for certain small wholesale or retail dealers, credit against tax, liability for tax and method of payment, controlled groups, other laws applicable, and definitions, see section 11201(e) of Pub. L. 101–508, set out as a note under section 5001 of this title.

§5042. Exemption from tax

(a) Tax-free production

(1) Cider

Subject to regulations prescribed by the Secretary, the noneffervescent product of the normal alcoholic fermentation of apple juice only, which is produced at a place other than a bonded wine cellar and without the use of preservative methods or materials, and which is sold or offered for sale as cider and not as wine or as a substitute for wine, shall not be subject to tax as wine nor to the provisions of subchapter F.

(2) Wine for personal or family use

Subject to regulations prescribed by the Secretary—

(A) Exemption

Any adult may, without payment of tax, produce wine for personal or family use and not for sale.

(B) Limitation

The aggregate amount of wine exempt from tax under this paragraph with respect to any household shall not exceed—

(i) 200 gallons per calendar year if there are 2 or more adults in such household, or

(ii) 100 gallons per calendar year if there is only 1 adult in such household.

(C) Adults

For purposes of this paragraph, the term "adult" means an individual who has attained 18 years of age, or the minimum age (if any) established by law applicable in the locality in which the household is situated at which wine may be sold to individuals, whichever is greater.

(3) Experimental wine

Subject to regulations prescribed by the Secretary, any scientific university, college of learning, or institution of scientific research may produce, receive, blend, treat, and store wine, without payment of tax, for experimental or research use but not for consumption (other than organoleptical tests) or sale, and may receive such wine spirits without payment of tax as may be necessary for such production.

(b) Cross references

(1) For provisions relating to exemption of tax on losses of wine (including losses by theft or authorized destruction), see section 5370.

(2) For provisions exempting from tax samples of wine, see section 5372.

(3) For provisions authorizing withdrawals of wine free of tax or without payment of tax, see section 5362.

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1331; amended Pub. L. 94–455, title XIX, §1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 95–458, §2(a), Oct. 14, 1978, 92 Stat. 1255.)

Prior Provisions

A prior section 5042, act Aug. 16, 1954, ch. 736, 68A Stat. 610, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

1978—Subsec. (a)(2). Pub. L. 95–458 substituted in heading "Wine for personal or family use" for "Family wine" and in text provision permitting an adult to produce 200 gallons of wine per calendar year if there are 2 or more adults in the household or 100 gallons of wine per calendar year if there is one adult in the household for provision which permitted the duly registered head of any family to produce an amount of wine not exceeding 200 gallons of wine per annum.

1976—Subsec. (a)(1) to (3). Pub. L. 94–455 struck out "or his delegate" after "Secretary" wherever appearing.

Effective Date of 1978 Amendment

Pub. L. 95–458, §2(c), Oct. 14, 1978, 92 Stat. 1257, provided that: "The amendments made by this section [amending this section and sections 5051, 5053, 5054, 5092, 5222, and 5674 of this title] shall take effect on the first day of the first calendar month which begins more than 90 days after the date of the enactment of this Act [Oct. 14, 1978]."

§5043. Collection of taxes on wines

(a) Persons liable for payment

The taxes on wine provided for in this subpart shall be paid—

(1) Bonded wine cellars

In the case of wines removed from any bonded wine cellar, by the proprietor of such bonded wine cellar; except that—

(A) in the case of any transfer of wine in bond as authorized under the provisions of section 5362(b), the liability for payment of the tax shall become the liability of the transferee from the time of removal of the wine from the transferor's premises, and the transferor shall thereupon be relieved of such liability; and

(B) in the case of any wine withdrawn by a person other than such proprietor without payment of tax as authorized under the provisions of section 5362(c), the liability for payment of the tax shall become the liability of such person from the time of the removal of the wine from the bonded wine cellar, and such proprietor shall thereupon be relieved of such liability.

(2) Foreign wine

In the case of foreign wines which are not transferred to a bonded wine cellar free of tax under section 5364, by the importer thereof.

(3) Other wines

Immediately, in the case of any wine produced, imported, received, removed, or possessed otherwise than as authorized by law, by any person producing, importing, receiving, removing, or possessing such wine; and all such persons shall be jointly and severally liable for such tax with each other as well as with any proprietor, transferee, or importer who may be liable for the tax under this subsection.

(b) Payment of tax

The taxes on wines shall be paid in accordance with section 5061.

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1332; amended Pub. L. 94–455, title XIX, §1905(b)(2)(C), Oct. 4, 1976, 90 Stat. 1822; Pub. L. 96–39, title VIII, §807(a)(8), July 26, 1979, 93 Stat. 281; Pub. L. 105–206, title VI, §6014(b)(1), July 22, 1998, 112 Stat. 820.)

Prior Provisions

A prior section 5043, act Aug. 16, 1954, ch. 736, 68A Stat. 610, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

1998—Subsec. (a)(2). Pub. L. 105–206 inserted "which are not transferred to a bonded wine cellar free of tax under section 5364" after "foreign wines".

1979—Subsec. (a)(1)(A). Pub. L. 96–39 struck out "between bonded wine cellars" after "transfer of wine in bond".

1976—Subsec. (b). Pub. L. 94–455 substituted "The taxes" for "Except as provided in subsection (a)(3), the taxes".

Effective Date of 1998 Amendment

Amendment by Pub. L. 105–206 effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates (see section 1422(c) of Pub. L. 105–34 set out as an Effective Date note under section 5364 of this title), see section 6024 of Pub. L. 105–206, set out as a note under section 1 of this title.

Effective Date of 1979 Amendment

Amendment by Pub. L. 96–39 effective Jan. 1, 1980, see section 810 of Pub. L. 96–39, set out as a note under section 5001 of this title.

Effective Date of 1976 Amendment

Amendment by Pub. L. 94–455 effective on first day of first month which begins more than 90 days after Oct. 4, 1976, see section 1905(d) of Pub. L. 94–455, set out as a note under section 5005 of this title.

§5044. Refund of tax on wine

(a) General

In the case of any wine removed from a bonded wine cellar and returned to bond under section 5361—

(1) any tax imposed by section 5041 shall, if paid, be refunded or credited, without interest, to the proprietor of the bonded wine cellar to which such wine is delivered; or

(2) if any tax so imposed has not been paid, the person liable for the tax may be relieved of liability therefor,


under such regulations as the Secretary may prescribe. Such regulations may provide that claim for refund or credit under paragraph (1), or relief from liability under paragraph (2), may be made only with respect to minimum quantities specified in such regulations. The burden of proof in all such cases shall be on the applicant.

(b) Date of filing

No claim under subsection (a) shall be allowed unless filed within 6 months after the date of the return of the wine to bond.

(c) Status of wine returned to bond

All provisions of this chapter applicable to wine in bond on the premises of a bonded wine cellar and to removals thereof shall be applicable to wine returned to bond under the provisions of this section.

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1332; amended Pub. L. 94–455, title XIX, §1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 105–34, title XIV, §1416(a), (b)(2), Aug. 5, 1997, 111 Stat. 1048; Pub. L. 105–206, title VI, §6014(b)(2), July 22, 1998, 112 Stat. 820.)

Prior Provisions

A prior section 5044, act Aug. 16, 1954, ch. 736, 68A Stat. 611, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

1998—Subsec. (a). Pub. L. 105–206 substituted "removed from a bonded wine cellar" for "produced in the United States" in introductory provisions.

1997Pub. L. 105–34, §1416(b)(2), struck out "unmerchantable" after "tax on" in section catchline.

Subsec. (a). Pub. L. 105–34, §1416(a), struck out "as unmerchantable" after "to bond" in introductory provisions.

1976—Subsec. (a). Pub. L. 94–455 struck out "or his delegate" after "Secretary".

Effective Date of 1998 Amendment

Amendment by Pub. L. 105–206 effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates, see section 6024 of Pub. L. 105–206, set out as a note under section 1 of this title.

Effective Date of 1997 Amendment

Pub. L. 105–34, title XIV, §1416(c), Aug. 5, 1997, 111 Stat. 1048, provided that: "The amendments made by this section [amending this section and section 5361 of this title] shall take effect on the 1st day of the 1st calendar quarter that begins at least 180 days after the date of the enactment of this Act [Aug. 5, 1997]."

§5045. Cross references

For provisions relating to the establishment and operation of wineries, see subchapter F, and for penalties pertaining to wine, see subchapter J.

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1333.)

Prior Provisions

A prior section 5045, act Aug. 16, 1954, ch. 736, 68A Stat. 611, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859.

Subpart D—Beer

Sec.
5051.
Imposition and rate of tax.
5052.
Definitions.
5053.
Exemptions.
5054.
Determination and collection of tax on beer.
5055.
Drawback of tax.
5056.
Refund and credit of tax, or relief from liability.

        

Prior Provisions

A prior subpart D, comprising sections 5051 to 5057 of this title, related to beer, prior to the general revision of this chapter by Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1313.

§5051. Imposition and rate of tax

(a) Rate of tax

(1) In general

A tax is hereby imposed on all beer brewed or produced, and removed for consumption or sale, within the United States, or imported into the United States. Except as provided in paragraph (2), the rate of such tax shall be $18 for every barrel containing not more than 31 gallons and at a like rate for any other quantity or for fractional parts of a barrel.

(2) Reduced rate for certain domestic production

(A) $7 a barrel rate

In the case of a brewer who produces not more than 2,000,000 barrels of beer during the calendar year, the per barrel rate of the tax imposed by this section shall be $7 on the first 60,000 barrels of beer which are removed in such year for consumption or sale and which have been brewed or produced by such brewer at qualified breweries in the United States.

(B) Controlled groups

In the case of a controlled group, the 2,000,000 barrel quantity specified in subparagraph (A) shall be applied to the controlled group, and the 60,000 barrel quantity specified in subparagraph (A) shall be apportioned among the brewers who are component members of such group in such manner as the Secretary or his delegate shall by regulations prescribed. For purposes of the preceding sentence, the term "controlled group" has the meaning assigned to it by subsection (a) of section 1563, except that for such purposes the phrase "more than 50 percent" shall be substituted for the phrase "at least 80 percent" in each place it appears in such subsection. Under regulations prescribed by the Secretary or his delegate, principles similar to the principles of the preceding two sentences shall be applied to a group of brewers under common control where one or more of the brewers is not a corporation.

(C) Regulations

The Secretary may prescribe such regulations as may be necessary to prevent the reduced rates provided in this paragraph from benefiting any person who produces more than 2,000,000 barrels of beer during a calendar year.

(3) Tolerances

Where the Secretary or his delegate finds that the revenue will not be endangered thereby, he may by regulations prescribe tolerances for barrels and fractional parts of barrels, and, if such tolerances are prescribed, no assessment shall be made and no tax shall be collected for any excess in any case where the contents of a barrel or a fractional part of a barrel are within the limit of the applicable tolerance prescribed.

(b) Assessment on materials used in production in case of fraud

Nothing contained in this subpart or subchapter G shall be construed to authorize an assessment on the quantity of materials used in producing or purchased for the purpose of producing beer, nor shall the quantity of materials so used or purchased be evidence, for the purpose of taxation, of the quantity of beer produced; but the tax on all beer shall be paid as provided in section 5054, and not otherwise; except that this subsection shall not apply to cases of fraud, and nothing in this subsection shall have the effect to change the rules of law respecting evidence in any prosecution or suit.

(c) Illegally produced beer

The production of any beer at any place in the United States shall be subject to tax at the rate prescribed in subsection (a) and such tax shall be due and payable as provided in section 5054(a)(3) unless—

(1) such beer is produced in a brewery qualified under the provisions of subchapter G, or

(2) such production is exempt from tax under section 5053(e) (relating to beer for personal or family use).

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1333; amended Pub. L. 86–75, §3(a)(6), June 30, 1959, 73 Stat. 157; Pub. L. 86–564, title II, §202(a)(8), June 30, 1960, 74 Stat. 290; Pub. L. 87–72, §3(a)(8), June 30, 1961, 75 Stat. 193; Pub. L. 87–508, §3(a)(7), June 28, 1962, 76 Stat. 114; Pub. L. 88–52, §3(a)(8), June 29, 1963, 77 Stat. 72; Pub. L. 88–348, §2(a)(8), June 30, 1964, 78 Stat. 237; Pub. L. 89–44, title V, §501(d), June 21, 1965, 79 Stat. 150; Pub. L. 94–529, §1, Oct. 17, 1976, 90 Stat. 2485; Pub. L. 95–458, §2(b)(2)(A), Oct. 14, 1978, 92 Stat. 1256; Pub. L. 101–508, title XI, §11201(c), Nov. 5, 1990, 104 Stat. 1388–416.)

Prior Provisions

A prior section 5051, act Aug. 16, 1954, ch. 736, 68A Stat. 611, as amended by acts Mar. 30, 1955, ch. 18, §3(a)(8), 69 Stat. 14; Mar. 29, 1956, ch. 115, §3(a)(8), 70 Stat. 66; Mar. 29, 1957, Pub. L. 85–12, §3(a)(6), 71 Stat. 9; June 30, 1958, Pub. L. 85–475, §3(a)(6), 72 Stat. 259, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

1990—Subsec. (a)(1). Pub. L. 101–508, §11201(c)(1), substituted "$18" for "$9".

Subsec. (a)(2)(C). Pub. L. 101–508, §11201(c)(2), added subpar. (C).

1978—Subsec. (c). Pub. L. 95–458 added subsec. (c).

1976—Subsec. (a). Pub. L. 94–529 reduced the excise tax on beer for small brewers to $7 per barrel on the first 60,000 barrels produced in the United States and removed for sale or consumption or sale during the calendar year, the reduced rate to be applicable only to brewers producing no more than 2 million barrels of beer in a calendar year, and inserted provision that if several brewers are members of a controlled group, the 2–million barrel limit is to be applied to the controlled group and the 60,000–barrel limit is to be apportioned among the members of the controlled group in accordance with Treasury Department regulations promulgated by the Secretary or his delegate.

1965—Subsec. (a). Pub. L. 89–44 struck out sentence providing for the imposition on and after July 1, 1965, of a tax of $8 in lieu of the tax imposed by the section.

1964—Subsec. (a). Pub. L. 88–348 substituted "July 1, 1965" for "July 1, 1964".

1963—Subsec. (a). Pub. L. 88–52 substituted "July 1, 1964" for "July 1, 1963".

1962—Subsec. (a). Pub. L. 87–508 substituted "July 1, 1963" for "July 1, 1962".

1961—Subsec. (a). Pub. L. 87–72 substituted "July 1, 1962" for "July 1, 1961".

1960—Subsec. (a). Pub. L. 86–564 substituted "July 1, 1961" for "July 1, 1960".

1959—Subsec. (a). Pub. L. 86–75 substituted "July 1, 1960" for "July 1, 1959".

Effective Date of 1990 Amendment

Amendment by Pub. L. 101–508 effective Jan. 1, 1991, see section 11201(d) of Pub. L. 101–508, set out as a note under section 5001 of this title.

Effective Date of 1978 Amendment

Amendment by Pub. L. 95–458 effective on first day of first calendar month beginning more than 90 days after Oct. 14, 1978, see section 2(c) of Pub. L. 95–458, set out as a note under section 5042 of this title.

Effective Date of 1976 Amendment

Pub. L. 94–529, §2, Oct. 17, 1976, 90 Stat. 2486, provided that: "The amendment made by the first section of this Act [amending this section] shall take effect on the first day of the first calendar year which begins after the date of the enactment of this Act [Oct. 17, 1976]."

Effective Date of 1965 Amendment

Amendment by Pub. L. 89–44 applicable on and after July 1, 1965, see section 701(d) of Pub. L. 89–44, set out as a note under section 5701 of this title.

Effective Date

Section effective July 1, 1959, see section 210(a)(1) of Pub. L. 85–859, set out as a note under section 5001 of this title.

Floor Stocks Taxes on Distilled Spirits, Wine, and Beer

Imposition of tax on beer, exception for small domestic producers, exception for certain small wholesale or retail dealers, credit against tax, liability for tax and method of payment, controlled groups, other laws applicable, and definitions, see section 11201(e) of Pub. L. 101–508, set out as a note under section 5001 of this title.

§5052. Definitions

(a) Beer

For purposes of this chapter (except when used with reference to distilling or distilling material) the term beer means beer, ale, porter, stout, and other similar fermented beverages (including sake or similar products) of any name or description containing one-half of 1 percent or more of alcohol by volume, brewed or produced from malt, wholly or in part, or from any substitute therefor.

(b) Gallon

For purposes of this subpart, the term gallon means the liquid measure containing 231 cubic inches.

(c) Removed for consumption of sale

Except as provided for in the case of removal of beer without payment of tax, the term "removed for consumption or sale", for the purposes of this subpart means—

(1) Sale of beer

The sale and transfer of possession of beer for consumption at the brewery; or

(2) Removals

Any removal of beer from the brewery.

(d) Brewer

For purposes of this chapter, the term "brewer" means any person who brews beer or produces beer for sale. Such term shall not include any person who produces only beer exempt from tax under section 5053(e).

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1333; amended Pub. L. 91–673, §1(b), Jan. 12, 1971, 84 Stat. 2056; Pub. L. 109–59, title XI, §11125(b)(15), Aug. 10, 2005, 119 Stat. 1956.)

Prior Provisions

A prior section 5052, act Aug. 16, 1954, ch. 736, 68A Stat. 612, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

2005—Subsec. (d). Pub. L. 109–59 amended subsec. (d) generally. Prior to amendment, text read as follows: "For definition of brewer, see section 5092."

1971—Subsec. (c)(2). Pub. L. 91–673 struck out proviso that removal of beer shall not include beer returned to the brewery on the same day such beer is removed from the brewery.

Effective Date of 2005 Amendment

Amendment by Pub. L. 109–59 effective July 1, 2008, but inapplicable to taxes imposed for periods before such date, see section 11125(c) of Pub. L. 109–59, set out as a note under section 5002 of this title.

Effective Date of 1971 Amendment

Amendment by Pub. L. 91–673 effective on first day of first calendar month which begins more than 90 days after Jan. 12, 1971, see section 5 of Pub. L. 91–673, set out as a note under section 5056 of this title.

§5053. Exemptions

(a) Removals for export

Beer may be removed from the brewery, without payment of tax, for export, in such containers and under such regulations, and on the giving of such notices, entries, and bonds and other security, as the Secretary may by regulations prescribe.

(b) Removals when unfit for beverage use

When beer has become sour or damaged, so as to be incapable of use as such, a brewer may remove the same from his brewery without payment of tax, for manufacturing purposes, under such regulations as the Secretary may prescribe.

(c) Removals for laboratory analysis

Beer may be removed from the brewery, without payment of tax, for laboratory analysis, subject to such limitations and under such regulations as the Secretary may prescribe.

(d) Removals for research, development, or testing

Under such conditions and regulations as the Secretary may prescribe, beer may be removed from the brewery without payment of tax for use in research, development, or testing (other than consumer testing or other market analysis) of processes, systems, materials, or equipment relating to beer or brewery operations.

(e) Beer for personal or family use

Subject to regulation prescribed by the Secretary, any adult may, without payment of tax, produce beer for personal or family use and not for sale. The aggregate amount of beer exempt from tax under this subsection with respect to any household shall not exceed—

(1) 200 gallons per calendar year if there are 2 or more adults in such household, or

(2) 100 gallons per calendar year if there is only 1 adult in such household.


For purposes of this subsection, the term "adult" means an individual who has attained 18 years of age, or the minimum age (if any) established by law applicable in the locality in which the household is situated at which beer may be sold to individuals, whichever is greater.

(f) Removal for use as distilling material

Subject to such regulations as the Secretary may prescribe, beer may be removed from a brewery without payment of tax to any distilled spirits plant for use as distilling material.

(g) Removals for use of foreign embassies, legations, etc.

(1) In general

Subject to such regulations as the Secretary may prescribe—

(A) beer may be withdrawn from the brewery without payment of tax for transfer to any customs bonded warehouse for entry pending withdrawal therefrom as provided in subparagraph (B), and

(B) beer entered into any customs bonded warehouse under subparagraph (A) may be withdrawn for consumption in the United States by, and for the official and family use of, such foreign governments, organizations, and individuals as are entitled to withdraw imported beer from such warehouses free of tax.


Beer transferred to any customs bonded warehouse under subparagraph (A) shall be entered, stored, and accounted for in such warehouse under such regulations and bonds as the Secretary may prescribe, and may be withdrawn therefrom by such governments, organizations, and individuals free of tax under the same conditions and procedures as imported beer.

(2) Other rules to apply

Rules similar to the rules of paragraphs (2) and (3) of section 5362(e) shall apply for purposes of this subsection.

(h) Removals for destruction

Subject to such regulations as the Secretary may prescribe, beer may be removed from the brewery without payment of tax for destruction.

(i) Removal as supplies for certain vessels and aircraft

For exemption as to supplies for certain vessels and aircraft, see section 309 of the Tariff Act of 1930, as amended (19 U.S.C. 1309).

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1334; amended Pub. L. 89–44, title VIII, §807(b), June 21, 1965, 79 Stat. 164; Pub. L. 91–673, §2, Jan. 12, 1971, 84 Stat. 2056; Pub. L. 94–455, title XIX, §1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 95–458, §2(b)(1), Oct. 14, 1978, 92 Stat. 1255; Pub. L. 105–34, title XIV, §§1414(b), 1418(a), 1419(a), Aug. 5, 1997, 111 Stat. 1047–1049.)

Prior Provisions

A prior section 5053, act Aug. 16, 1954, ch. 736, 68A Stat. 612, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

1997—Subsec. (f). Pub. L. 105–34, §1414(b), added subsec. (f). Former subsec. (f) redesignated (i).

Subsec. (g). Pub. L. 105–34, §1418(a), added subsec. (g).

Subsec. (h). Pub. L. 105–34, §1419(a), added subsec. (h).

Subsec. (i). Pub. L. 105–34, §1414(b), redesignated subsec. (f) as (i).

1978—Subsecs. (e), (f). Pub. L. 95–458 added subsec. (e) and redesignated former subsec. (e) as (f).

1976—Subsecs. (a) to (d). Pub. L. 94–455 struck out "or his delegate" after "Secretary" wherever appearing.

1971—Subsecs. (d), (e). Pub. L. 91–673 added subsec. (d) and redesignated former subsec. (d) as (e).

1965—Subsec. (a). Pub. L. 89–44 struck out "to a foreign country" after "export".

Effective Date of 1997 Amendment

Pub. L. 105–34, title XIV, §1414(d), Aug. 5, 1997, 111 Stat. 1047, provided that: "The amendments made by this section [amending this section and sections 5056 and 5222 of this title] shall take effect on the 1st day of the 1st calendar quarter that begins at least 180 days after the date of the enactment of this Act [Aug. 5, 1997]."

Pub. L. 105–34, title XIV, §1418(b), Aug. 5, 1997, 111 Stat. 1049, provided that: "The amendment made by subsection (a) [amending this section] shall take effect on the 1st day of the 1st calendar quarter that begins at least 180 days after the date of the enactment of this Act [Aug. 5, 1997]."

Pub. L. 105–34, title XIV, §1419(b), Aug. 5, 1997, 111 Stat. 1049, provided that: "The amendment made by subsection (a) [amending this section] shall take effect on the 1st day of the 1st calendar quarter that begins at least 180 days after the date of the enactment of this Act [Aug. 5, 1997]."

Effective Date of 1978 Amendment

Amendment by Pub. L. 95–458 effective on first day of first calendar month beginning more than 90 days after Oct. 14, 1978, see section 2(c) of Pub. L. 95–458, set out as a note under section 5042 of this title.

Effective Date of 1971 Amendment

Amendment by Pub. L. 91–673 effective on first day of first calendar month which begins more than 90 days after Jan. 12, 1971, see section 5 of Pub. L. 91–673, set out as a note under section 5056 of this title.

Effective Date of 1965 Amendment

Amendment by Pub. L. 89–44 effective July 1, 1965, see section 807(c) of Pub. L. 89–44, set out as a note under section 5002 of this title.

§5054. Determination and collection of tax on beer

(a) Time of determination

(1) Beer produced in the United States; certain imported beer

Except as provided in paragraph (3), the tax imposed by section 5051 on beer produced in the United States, or imported into the United States and transferred to a brewery free of tax under section 5418, shall be determined at the time it is removed for consumption or sale, and shall be paid by the brewer thereof in accordance with section 5061.

(2) Beer imported into the United States

Except as provided in paragraph (4), the tax imposed by section 5051 on beer imported into the United States and not transferred to a brewery free of tax under section 5418 shall be determined at the time of the importation thereof, or, if entered for warehousing, at the time of removal from the 1st such warehouse.

(3) Illegally produced beer

The tax on any beer produced in the United States shall be due and payable immediately upon production unless—

(A) such beer is produced in a brewery qualified under the provisions of subchapter G, or

(B) such production is exempt from tax under sections 1 5053(e) (relating to beer for personal or family use).

(4) Unlawfully imported beer

Beer smuggled or brought into the United States unlawfully shall, for purposes of this chapter, be held to be imported into the United States, and the internal revenue tax shall be due and payable at the time of such importation.

(b) Tax on returned beer

Beer which has been removed for consumption or sale and is thereafter returned to the brewery shall be subject to all provisions of this chapter relating to beer prior to removal for consumption or sale, including the tax imposed by section 5051. The tax on any such returned beer which is again removed for consumption or sale shall be determined and paid without respect to the tax which was determined at the time of prior removal of the beer for consumption or sale.

(c) Applicability of other provisions of law

All administrative and penal provisions of this title, insofar as applicable, shall apply to any tax imposed by section 5051.

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1334; amended Pub. L. 94–455, title XIX, §§1905(a)(5), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1818, 1834; Pub. L. 95–458, §2(b)(2)(B), Oct. 14, 1978, 92 Stat. 1256; Pub. L. 99–509, title VIII, §8011(b)(2), Oct. 21, 1986, 100 Stat. 1953; Pub. L. 100–647, title I, §1018(u)(19), Nov. 10, 1988, 102 Stat. 3591; Pub. L. 105–206, title VI, §6014(a)(1), (2), July 22, 1998, 112 Stat. 820.)

Prior Provisions

A prior section 5054, act Aug. 16, 1954, ch. 736, 68A Stat. 613, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859.

Provisions similar to those comprising subsecs. (a)(1), (2) and (b) to (d) of this section were contained in prior sections 5055 and 5057(a), act Aug. 16, 1954, ch. 736, 68A Stat. 613, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

1998—Subsec. (a)(1). Pub. L. 105–206, §6014(a)(1), in heading inserted "; certain imported beer" after "United States" and in text inserted ", or imported into the United States and transferred to a brewery free of tax under section 5418," after "United States".

Subsec. (a)(2). Pub. L. 105–206, §6014(a)(2), inserted "and not transferred to a brewery free of tax under section 5418" after "United States".

1988—Subsec. (a)(2). Pub. L. 100–647 added period at end.

1986—Subsec. (a)(2). Pub. L. 99–509 substituted "if entered for warehousing, at the time of removal from the 1st such warehouse" for "if entered into customs custody, at the time of removal from such custody, and shall be paid under such regulations as the Secretary shall prescribe.".

1978—Subsec. (a)(3). Pub. L. 95–458 inserted provision excluding from tax the beer exempt from tax under section 5053(e).

1976—Subsec. (a)(2). Pub. L. 94–455, §1906(b)(13)(A), struck out "or his delegate" after "Secretary".

Subsecs. (c), (d). Pub. L. 94–455, §1905(a)(5), redesignated subsec. (d) as (c) and struck out former subsec. (c) respecting stamps or other devices as evidence of payment of tax.

Effective Date of 1998 Amendment

Amendment by Pub. L. 105–206 effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates (see section 1421(c) of Pub. L. 105–34 set out as an Effective Date note under section 5418 of this title), see section 6024 of Pub. L. 105–206, set out as a note under section 1 of this title.

Effective Date of 1988 Amendment

Amendment by Pub. L. 100–647 effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 1019(a) of Pub. L. 100–647, set out as a note under section 1 of this title.

Effective Date of 1986 Amendment

Amendment by Pub. L. 99–509 applicable to articles imported, entered for warehousing, or brought into the United States or a foreign trade zone after Dec. 15, 1986, see section 8011(c) of Pub. L. 99–509, set out as a note under section 5061 of this title.

Effective Date of 1978 Amendment

Amendment by Pub. L. 95–458 effective on first day of first calendar month beginning more than 90 days after Oct. 14, 1978, see section 2(c) of Pub. L. 95–458, set out as a note under section 5042 of this title.

Effective Date of 1976 Amendment

Amendment by section 1905(a)(5) of Pub. L. 94–455 effective on first day of first month which begins more than 90 days after Oct. 4, 1976, see section 1905(d) of Pub. L. 94–455, set out as a note under section 5005 of this title.

1 So in original. Probably should be "section".

§5055. Drawback of tax

On the exportation of beer, brewed or produced in the United States, the brewer thereof shall be allowed a drawback equal in amount to the tax paid on such beer if there is such proof of exportation as the Secretary may by regulations require. For the purpose of this section, exportation shall include delivery for use as supplies on the vessels and aircraft described in section 309 of the Tariff Act of 1930, as amended (19 U.S.C. 1309).

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1335; amended Pub. L. 94–455, title XIX, §1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 105–34, title XIV, §1420(a), Aug. 5, 1997, 111 Stat. 1049.)

Prior Provisions

A prior section 5055, act Aug. 16, 1954, ch. 736, 68A Stat. 613, related to "determination and collection of tax on beer", prior to the general revision of this chapter by Pub. L. 85–859. See section 5054(a)(1), (2), (c), (d) of this title.

Provisions similar to those comprising this section were contained in prior section 5056, act Aug. 16, 1954, ch. 736, 68A Stat. 613, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

1997Pub. L. 105–34 substituted "paid on such beer if there is such proof of exportation as the Secretary may by regulations require." for "found to have been paid on such beer, to be paid on submission of such evidence, records and certificates indicating exportation, as the Secretary may by regulations prescribe."

1976Pub. L. 94–455 struck out "or his delegate" after "Secretary".

Effective Date of 1997 Amendment

Pub. L. 105–34, title XIV, §1420(b), Aug. 5, 1997, 111 Stat. 1049, provided that: "The amendment made by subsection (a) [amending this section] shall take effect on the 1st day of the 1st calendar quarter that begins at least 180 days after the date of the enactment of this Act [Aug. 5, 1997]."

§5056. Refund and credit of tax, or relief from liability

(a) Beer returned or voluntarily destroyed

Any tax paid by any brewer on beer removed for consumption or sale may be refunded or credited to the brewer, without interest, or if the tax has not been paid, the brewer may be relieved of liability therefor, under such regulations as the Secretary may prescribe, if such beer is returned to any brewery of the brewer or is destroyed under the supervision required by such regulations. In determining the amount of tax due on beer removed on any day, the quantity of beer returned to the same brewery from which removed shall be allowed, under such regulations as the Secretary may prescribe, as an offset against or deduction from the total quantity of beer removed from that brewery on the day of such return.

(b) Beer lost by fire, theft, casualty, or act of God

Subject to regulations prescribed by the Secretary, the tax paid by any brewer on beer removed for consumption or sale may be refunded or credited to the brewer, without interest, or if the tax has not been paid, the brewer may be relieved of liability therefor, if such beer is lost, whether by theft or otherwise, or is destroyed or otherwise rendered unmerchantable by fire, casualty, or act of God before the transfer of title thereto to any other person. In any case in which beer is lost or destroyed, whether by theft or otherwise, the Secretary may require the brewer to file a claim for relief from the tax and submit proof as to the cause of such loss. In every case where it appears that the loss was by theft, the first sentence shall not apply unless the brewer establishes to the satisfaction of the Secretary that such theft occurred before removal from the brewery and occurred without connivance, collusion, fraud, or negligence on the part of the brewer, consignor, consignee, bailee, or carrier, or the employees or agents of any of them.

(c) Beer received at a distilled spirits plant

Any tax paid by any brewer on beer removed for consumption or sale may be refunded or credited to the brewer, without interest, or if the tax has not been paid, the brewer may be relieved of liability therefor, under regulations as the Secretary may prescribe, if such beer is received on the bonded premises of a distilled spirits plant pursuant to the provisions of section 5222(b)(2), for use in the production of distilled spirits.

(d) Limitations

No claim under this section shall be allowed (1) unless filed within 6 months after the date of the return, loss, destruction, rendering unmerchantable, or receipt on the bonded premises of a distilled spirits plant or (2) if the claimant was indemnified by insurance or otherwise in respect of the tax.

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1335; amended Pub. L. 91–673, §1(a), Jan. 12, 1971, 84 Stat. 2056; Pub. L. 94–455, title XIX, §1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 105–34, title XIV, §1414(c), Aug. 5, 1997, 111 Stat. 1047; Pub. L. 105–206, title VI, §6014(a)(3), July 22, 1998, 112 Stat. 820.)

Prior Provisions

A prior section 5056, act Aug. 16, 1954, ch. 736, 68A Stat. 613, related to "drawback of tax" prior to the general revision of this chapter by Pub. L. 85–859. See section 5055 of this title.

A prior section 5057, act Aug. 16, 1954, ch. 736, 68A Stat. 613, related to refund and credit of tax or relief from liability, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

1998—Subsecs. (a) to (c). Pub. L. 105–206 substituted "removed for consumption or sale" for "produced in the United States".

1997—Subsec. (c). Pub. L. 105–34, §1414(c)(1), added subsec. (c). Former subsec. (c) redesignated (d).

Subsec. (d). Pub. L. 105–34 redesignated subsec. (c) as (d) and substituted "rendering unmerchantable, or receipt on the bonded premises of a distilled spirits plant" for "or rendering unmerchantable".

1976—Subsecs. (a), (b). Pub. L. 94–455 struck out "or his delegate" after "Secretary" wherever appearing.

1971—Subsec. (a). Pub. L. 91–673 inserted provision permitting credit or refund of tax if the beer is returned to any brewery of the brewer who paid the tax, and provided for offset or deduction against amount of beer removed from the brewery on the day of return if the beer is returned to the same brewery from which it was withdrawn.

Subsec. (b). Pub. L. 91–673 inserted provisions for credit or refund or relief from liability of tax when the beer is lost by theft or otherwise or rendered unmerchantable by fire, casualty or act of God, before the transfer of title to any other party, and required the brewer to file claim for relief from the tax and submit proof of the cause of the loss, and in the case of theft, to further prove that such theft occurred before removal from the brewery and without connivance, collusion, fraud, or negligence on the part of the brewer, consignor, consignee, bailee, or carrier, or the employees or agents of any of them.

Subsec. (c). Pub. L. 91–673 substantially reenacted subsec. (c) to reflect changes in subsec. (b).

Effective Date of 1998 Amendment

Amendment by Pub. L. 105–206 effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates, see section 6024 of Pub. L. 105–206, set out as a note under section 1 of this title.

Effective Date of 1997 Amendment

Amendment by Pub. L. 105–34 effective on the 1st day of the 1st calendar quarter that begins at least 180 days after Aug. 5, 1997, see section 1414(d) of Pub. L. 105–34, set out as a note under section 5053 of this title.

Effective Date of 1971 Amendment

Pub. L. 91–673, §5, Jan. 12, 1971, 84 Stat. 2058, provided that: "The amendments made by the first four sections of this Act [enacting section 5417 of this title and amending this section and sections 5052, 5053, 5401, 5402, 5411, 5412, and 5416 of this title] shall take effect on the first day of the first calendar month which begins more than 90 days after the date of the enactment of this Act [Jan. 12, 1971]."

Subpart E—General Provisions

Sec.
5061.
Method of collecting tax.
5062.
Refund and drawback in case of exportation.
[5063.
Repealed.]
5064.
Losses resulting from disaster, vandalism, or malicious mischief.
5065.
Territorial extent of law.
5066.
Distilled spirits for use of foreign embassies, legations, etc.
5067.
Cross reference.

        

Prior Provisions

A prior subpart E, comprising sections 5061 to 5065, related to general provisions, prior to the general revision of this chapter by Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1313.

Amendments

1978Pub. L. 95–423, §1(b), Oct. 6, 1978, 92 Stat. 936, substituted "Losses resulting from disaster, vandalism, or malicious mischief" for "Losses caused by disaster" in item 5064.

1971Pub. L. 91–659, §3(b), Jan. 8, 1971, 84 Stat. 1966, added item 5066 and redesignated former item 5066 as 5067.

1965Pub. L. 89–44, title V, §501(e), June 21, 1965, 79 Stat. 150, struck out item 5063 "Floor stocks tax refunds on distilled spirits, wines, cordials, and beer".

§5061. Method of collecting tax

(a) Collection by return

The taxes on distilled spirits, wines, and beer shall be collected on the basis of a return. The Secretary shall, by regulation, prescribe the period or event for which such return shall be filed, the time for filing such return, the information to be shown in such return, and the time for payment of such tax.

(b) Exceptions

Notwithstanding the provisions of subsection (a), any taxes imposed on, or amounts to be paid or collected in respect of, distilled spirits, wines, and beer under—

(1) section 5001(a)(4), (5), or (6),

(2) section 5006(c) or (d),

(3) section 5041(f),

(4) section 5043(a)(3),

(5) section 5054(a)(3) or (4), or

(6) section 5505(a),


shall be immediately due and payable at the time provided by such provisions (or if no specific time for payment is provided, at the time the event referred to in such provision occurs). Such taxes and amounts shall be assessed and collected by the Secretary on the basis of the information available to him in the same manner as taxes payable by return but with respect to which no return has been filed.

(c) Import duties

The internal revenue taxes imposed by this part shall be in addition to any import duties unless such duties are specifically designated as being in lieu of internal revenue tax.

(d) Time for collecting tax on distilled spirits, wines, and beer

(1) In general

Except as otherwise provided in this subsection, in the case of distilled spirits, wines, and beer to which this part applies (other than subsection (b) of this section) which are withdrawn under bond for deferred payment of tax, the last day for payment of such tax shall be the 14th day after the last day of the semimonthly period during which the withdrawal occurs.

(2) Imported articles

In the case of distilled spirits, wines, and beer which are imported into the United States (other than in bulk containers)—

(A) In general

The last day for payment of tax shall be the 14th day after the last day of the semimonthly period during which the article is entered into the customs territory of the United States.

(B) Special rule for entry for warehousing

Except as provided in subparagraph (D), in the case of an entry for warehousing, the last day for payment of tax shall not be later than the 14th day after the last day of the semimonthly period during which the article is removed from the 1st such warehouse.

(C) Foreign trade zones

Except as provided in subparagraph (D) and in regulations prescribed by the Secretary, articles brought into a foreign trade zone shall, notwithstanding any other provision of law, be treated for purposes of this subsection as if such zone were a single customs warehouse.

(D) Exception for articles destined for export

Subparagraphs (B) and (C) shall not apply to any article which is shown to the satisfaction of the Secretary to be destined for export.

(3) Distilled spirits, wines, and beer brought into the United States from Puerto Rico

In the case of distilled spirits, wines, and beer which are brought into the United States (other than in bulk containers) from Puerto Rico, the last day for payment of tax shall be the 14th day after the last day of the semimonthly period during which the article is brought into the United States.

(4) Taxpayers liable for taxes of not more than $50,000

(A) In general

(i) More than $1,000 and not more than $50,000 in taxes

Except as provided in clause (ii), in the case of any taxpayer who reasonably expects to be liable for not more than $50,000 in taxes imposed with respect to distilled spirits, wines, and beer under subparts A, C, and D and section 7652 for the calendar year and who was liable for not more than $50,000 in such taxes in the preceding calendar year, the last day for the payment of tax on withdrawals, removals, and entries (and articles brought into the United States from Puerto Rico) shall be the 14th day after the last day of the calendar quarter during which the action giving rise to the imposition of such tax occurs.

(ii) Not more than $1,000 in taxes

In the case of any taxpayer who reasonably expects to be liable for not more than $1,000 in taxes imposed with respect to distilled spirits, wines, and beer under subparts A, C, and D and section 7652 for the calendar year and who was liable for not more than $1,000 in such taxes in the preceding calendar year, the last day for the payment of tax on withdrawals, removals, and entries (and articles brought into the United States from Puerto Rico) shall be the 14th day after the last day of the calendar year.

(B) No application after limit exceeded

(i) Exceeds $50,000 limit

Subparagraph (A)(i) shall not apply to any taxpayer for any portion of the calendar year following the first date on which the aggregate amount of tax due under subparts A, C, and D and section 7652 from such taxpayer during such calendar year exceeds $50,000, and any tax under such subparts which has not been paid on such date shall be due on the 14th day after the last day of the semimonthly period in which such date occurs.

(ii) Exceeds $1,000 limit

Subparagraph (A)(ii) shall not apply to any taxpayer for any portion of the calendar year following the first date on which the aggregate amount of tax due under subparts A, C, and D and section 7652 from such taxpayer during such calendar year exceeds $1,000, and any tax under such subparts which has not been paid on such date shall be due on the 14th day after the last day of the calendar quarter in which such date occurs.

(C) Calendar quarter

For purposes of this paragraph, the term "calendar quarter" means the three-month period ending on March 31, June 30, September 30, or December 31.

(5) Special rule for tax due in September

(A) In general

Notwithstanding the preceding provisions of this subsection, the taxes on distilled spirits, wines, and beer for the period beginning on September 16 and ending on September 26 shall be paid not later than September 29.

(B) Safe harbor

The requirement of subparagraph (A) shall be treated as met if the amount paid not later than September 29 is not less than 11/15 of the taxes on distilled spirits, wines, and beer for the period beginning on September 1 and ending on September 15.

(C) Taxpayers not required to use electronic funds transfer

In the case of payments not required to be made by electronic funds transfer, subparagraphs (A) and (B) shall be applied by substituting "September 25" for "September 26", "September 28" for "September 29", and "2/3" for "11/15".

(6) Special rule where due date falls on Saturday, Sunday, or holiday

Notwithstanding section 7503, if, but for this paragraph, the due date under this subsection for payment of tax would fall on a Saturday, Sunday, or a legal holiday (within the meaning of section 7503), such due date shall be the immediately preceding day which is not a Saturday, Sunday, or such a holiday (or the immediately following day where the due date described in paragraph (5) falls on a Sunday).

(e) Payment by electronic fund transfer

(1) In general

Any person who in any 12-month period ending December 31, was liable for a gross amount equal to or exceeding $5,000,000 in taxes imposed on distilled spirits, wines, or beer by sections 5001, 5041, and 5051 (or 7652), respectively, shall pay such taxes during the succeeding calendar year by electronic fund transfer to a Federal Reserve Bank.

(2) Electronic fund transfer

The term "electronic fund transfer" means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, or computer or magnetic tape so as to order, instruct, or authorize a financial institution to debit or credit an account.

(3) Controlled groups

(A) In general

In the case of a controlled group of corporations, all corporations which are component members of such group shall be treated as 1 taxpayer. For purposes of the preceding sentence, the term "controlled group of corporations" has the meaning given to such term by subsection (a) of section 1563, except that "more than 50 percent" shall be substituted for "at least 80 percent" each place it appears in such subsection.

(B) Controlled groups which include nonincorporated persons

Under regulations prescribed by the Secretary, principles similar to the principles of subparagraph (A) shall apply to a group of persons under common control where 1 or more of such persons is not a corporation.

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1335; amended Pub. L. 94–455, title XIX, §§1905(a)(6), (b)(2)(E)(iii), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1819, 1822, 1834; Pub. L. 96–39, title VIII, §§804(b), 807(a)(9), July 26, 1979, 93 Stat. 274, 281; Pub. L. 98–369, div. A, title I, §27(c)(1), July 18, 1984, 98 Stat. 509; Pub. L. 99–509, title VIII, §8011(b)(1), Oct. 21, 1986, 100 Stat. 1952; Pub. L. 99–514, title XVIII, §1801(c)(1), Oct. 22, 1986, 100 Stat. 2786; Pub. L. 100–647, title II, §2003(b)(1)(A), (B), Nov. 10, 1988, 102 Stat. 3598; Pub. L. 101–508, title XI, §§11201(b)(3), 11704(a)(21), Nov. 5, 1990, 104 Stat. 1388–416, 1388-519; Pub. L. 103–465, title I, §136(c)(5), title VII, §712(b), Dec. 8, 1994, 108 Stat. 4842, 5000; Pub. L. 104–188, title I, §1702(b)(6), Aug. 20, 1996, 110 Stat. 1869; Pub. L. 109–59, title XI, §11127(a), (b), Aug. 10, 2005, 119 Stat. 1958, 1959; Pub. L. 114–113, div. Q, title III, §332(a), Dec. 18, 2015, 129 Stat. 3104.)

Prior Provisions

A prior section 5061, act Aug. 16, 1954, ch. 736, 68A Stat. 614, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859.

Provisions similar to those comprising subsec. (d) of this section were contained in former section 5001(c), act Aug. 16, 1954, ch. 736, 68A Stat. 597, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

2015—Subsec. (d)(4)(A). Pub. L. 114–113, §332(a)(1), designated existing provisions as cl. (i), inserted heading, substituted "Except as provided in clause (ii), in the case of" for "In the case of", struck out "under bond for deferred payment" before "shall be the 14th day", and added cl. (ii).

Subsec. (d)(4)(B). Pub. L. 114–113, §332(a)(2), designated existing provisions as cl. (i), inserted heading, substituted "Subparagraph (A)(i)" for "Subparagraph (A)", and added cl. (ii).

2005—Subsec. (d)(4) to (6). Pub. L. 109–59 added par. (4), redesignated former pars. (4) and (5) as (5) and (6), respectively, and in par. (6) substituted "paragraph (5)" for "paragraph (4)".

1996—Subsec. (b)(3). Pub. L. 104–188 substituted "section 5041(f)," for "section 5041(e),".

1994—Subsec. (b)(1). Pub. L. 103–465, §136(c)(5), amended par. (1) generally. Prior to amendment, par. (1) read as follows: "section 5001(a)(5), (6), or (7),".

Subsec. (d)(4). Pub. L. 103–465, §712(b)(1), added par. (4). Former par. (4) redesignated (5).

Subsec. (d)(5). Pub. L. 103–465, §712(b), redesignated par. (4) as (5), substituted "due date" for "14th day" in heading, and inserted "(or the immediately following day where the due date described in paragraph (4) falls on a Sunday)" before period at end.

1990—Subsec. (b)(3). Pub. L. 101–508, §§11201(b)(3), 11704(a)(21), amended par. (3) identically, substituting "section 5041(e)" for "section 5041(d)".

1988—Subsec. (d)(2)(A), (B), (3). Pub. L. 100–647 substituted "last day of the semimonthly period during" for "date on".

1986—Subsec. (d). Pub. L. 99–509 amended subsec. (d) generally, substituting provisions relating to time for collecting tax on distilled spirits, wines, and beer, for provisions relating to extension of time for collecting tax on distilled spirits.

Subsec. (e)(3). Pub. L. 99–514 added par. (3).

1984—Subsec. (e). Pub. L. 98–369 added subsec. (e).

1979—Subsec. (a). Pub. L. 96–39, §807(a)(9)(A), struck out "rectified distilled spirits and wines," after "distilled spirits, wines,".

Subsec. (b). Pub. L. 96–39, §807(a)(9)(B), in provisions preceding par. (1) struck out "rectified distilled spirits and wines" after "spirits, wines," and redesignated pars. (4) to (7) as (3) to (6), respectively. Former par. (3), which made reference to section 5026(a)(2), was struck out.

Subsec. (d). Pub. L. 96–39, §804(b), added subsec. (d).

1976—Subsec. (a). Pub. L. 94–455, §§1905(a)(6)(A), 1906(b)(13)(A), struck out last sentence providing for continued payment of taxes by stamp until the Secretary shall by regulation provide for collection of the taxes on the basis of a return and struck out "or his delegate" after "Secretary".

Subsec. (b). Pub. L. 94–455, §1905(a)(6)(B), substituted the exceptions provisions for discretion method of collection providing that "Whether or not the method of collecting any tax imposed by this part is specifically provided in this part, any such tax may, under regulations prescribed by the Secretary or his delegate, be collected by stamp, coupon, serially-numbered ticket, or the use of tax-stamp machines, or by such other reasonable device or method as may be necessary or helpful in securing collection of the tax."

Subsec. (c). Pub. L. 94–455, §1905(a)(6)(C), substituted the import duties provision for provision respecting applicability of other provisions of law and reading "All administrative and penalty provisions of this title, insofar as applicable, shall apply to the collection of any tax which the Secretary or his delegate determines or prescribes shall be collected in any manner provided in this section."

Subsec. (d). Pub. L. 94–455, §1905(b)(2)(E)(iii), struck out subsec. (d) which provided cross reference to section 5689 for penalty and forfeiture for tampering with a stamp machine.

Effective Date of 2015 Amendment

Pub. L. 114–113, div. Q, title III, §332(c), Dec. 18, 2015, 129 Stat. 3106, provided that: "The amendments made by this section [amending this section and sections 5173, 5351, 5401, and 5551 of this title] shall apply to any calendar quarters beginning more than 1 year after the date of the enactment of this Act [Dec. 18, 2015]."

Effective Date of 2005 Amendment

Pub. L. 109–59, title XI, §11127(c), Aug. 10, 2005, 119 Stat. 1959, provided that: "The amendments made by this section [amending this section] shall apply with respect to quarterly periods beginning on and after January 1, 2006."

Effective Date of 1996 Amendment

Amendment by Pub. L. 104–188 effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990, Pub. L. 101–508, title XI, to which such amendment relates, see section 1702(i) of Pub. L. 104–188, set out as a note under section 38 of this title.

Effective Date of 1994 Amendment

Amendment by section 136(c)(5) of Pub. L. 103–465 effective Jan. 1, 1995, see section 136(d) of Pub. L. 103–465, set out as a note under section 5001 of this title.

Pub. L. 103–465, title VII, §712(e), Dec. 8, 1994, 108 Stat. 5001, provided that: "The amendments made by this section [amending this section and sections 5703 and 6302 of this title] shall take effect on January 1, 1995."

Effective Date of 1990 Amendment

Amendment by section 11201(b)(3) of Pub. L. 101–508 effective Jan. 1, 1991, see section 11201(d) of Pub. L. 101–508, set out as a note under section 5001 of this title.

Effective Date of 1988 Amendment

Pub. L. 100–647, title II, §2003(b)(2), Nov. 10, 1988, 102 Stat. 3598, provided that: "The amendments made by paragraph (1) [amending this section and section 5703 of this title] shall take effect as if included in the amendments made by section 8011 of the Omnibus Budget Reconciliation Act of 1986 [Pub. L. 99–509]."

Effective Date of 1986 Amendments

Amendment by Pub. L. 99–514 effective, except as otherwise provided, as if included in the provisions of the Tax Reform Act of 1984, Pub. L. 98–369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99–514, set out as a note under section 48 of this title.

Pub. L. 99–509, title VIII, §8011(c), Oct. 21, 1986, 100 Stat. 1953, as amended by Pub. L. 99–514, §2, Oct. 22, 1986, 100 Stat. 2095, provided that:

"(1) In general.—Except as provided in paragraph (2), the amendments made by this section [amending this section and sections 5054, 5703, and 5704 of this title] shall apply to removals during semimonthly periods ending on or after December 31, 1986.

"(2) Imported articles, etc.—Subparagraphs (B) and (C) of section 5703(b)(2) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as added by this section), paragraphs (2) and (3) of section 5061(d) of such Code (as amended by this section), and the amendments made by subsections (a)(2) and (b)(2) [amending sections 5054 and 5704 of this title] shall apply to articles imported, entered for warehousing, or brought into the United States or a foreign trade zone after December 15, 1986.

"(3) Special rule for distilled spirits and tobacco for semimonthly period ending december 15, 1986.—With respect to remittances of—

"(A) taxes imposed on distilled spirits by section 5001 or 7652 of such Code, and

"(B) taxes imposed on tobacco products and cigarette papers and tubes by section 5701 or 7652 of such Code,

for the semimonthly period ending December 15, 1986, the last day for payment of such remittances shall be January 14, 1987.

"(4) Treatment of smokeless tobacco in inventory on June 30, 1986.—The tax imposed by section 5701(e) of the Internal Revenue Code of 1986 shall not apply to any smokeless tobacco which—

"(A) on June 30, 1986, was in the inventory of the manufacturer or importer, and

"(B) on such date was in a form ready for sale."

Effective Date of 1984 Amendment

Amendment by Pub. L. 98–369 applicable to taxes required to be paid on or after Sept. 30, 1984, see section 27(d)(2) of Pub. L. 98–369, set out as a note under section 5001 of this title.

Effective Date of 1979 Amendment

Amendment by Pub. L. 96–39 effective Jan. 1, 1980, see section 810 of Pub. L. 96–39, set out as a note under section 5001 of this title.

Effective Date of 1976 Amendment

Amendment by section 1905(a)(6), (b)(2)(E)(iii) of Pub. L. 94–455 effective on first day of first month which begins more than 90 days after Oct. 4, 1976, see section 1905(d) of Pub. L. 94–455, set out as a note under section 5005 of this title.

Effective Date

Section effective July 1, 1959, see section 210(a)(1) of Pub. L. 85–859, set out as a note under section 5001 of this title.

Plan Amendments Not Required Until January 1, 1989

For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§1101–1147 and 1171–1177] or title XVIII [§§1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title.

Transitional Rules Relating to Determination and Payment of Tax

Pub. L. 96–39, title VIII, §808, July 26, 1979, 93 Stat. 291, as amended by Pub. L. 99–514, §2, Oct. 22, 1986, 100 Stat. 2095, provided that:

"(a) Liability for Payment of Tax.—Except as otherwise provided in this section, the tax on all distilled spirits which have been withdrawn from bond on determination of tax and on which tax has not been paid by the close of December 31, 1979, shall become due on January 1, 1980, and shall be payable in accordance with section 5061 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954].

"(b) Treatment of Controlled Stock and Bulk Wine.—

"(1) Election with respect to controlled stock.—The proprietor of a distilled spirits plant may elect to convert any distilled spirits or wine which on January 1, 1980, is controlled stock.

"(2) Election with respect to wine.—The proprietor of a distilled spirits plant may elect to convert any bulk wine which on January 1, 1980, is on the premises of a distilled spirits plant.

"(3) Effect of election.—If an election under paragraph (1) or (2) is in effect with respect to any controlled stock or wine—

"(A) any distilled spirits, wine, or rectification tax previously paid or determined on such controlled stock or wine shall be abated or (without interest) credited or refunded under such regulations as the Secretary shall prescribe, and

"(B) such controlled stock or wine shall be treated as distilled spirits or wine on which tax has not been paid or determined.

"(4) Making of elections.—The elections under this subsection shall be made at such time and in such manner as the Secretary shall by regulations prescribe.

"(c) Taxpaid Stock.—

"(1) Taxpaid stock may remain on bonded premises during 1980.—Section 5612(a) of the Internal Revenue Code of 1986 (relating to forfeiture of taxpaid distilled spirits remaining on bonded premises) shall not apply during 1980.

"(2) Separation of taxpaid stock.—All distilled spirits and wine on which tax has been paid and which are on the bonded premises of a distilled spirits plant shall be physically separated from other distilled spirits and wine. Such separation shall be by the use of separate tanks, rooms, or buildings, or by partitioning, or by such other methods as the Secretary finds will distinguish such distilled spirits and wine from other distilled spirits and wine on the bonded premises of the distilled spirits plant.

"(d) Return of Distilled Spirits Products Containing Taxpaid Wine.—With respect to distilled spirits returned to the bonded premises of distilled spirits plants during 1980, section 5008(c)(1) of the Internal Revenue Code of 1986 (relating to refunds for distilled spirits returned to bonded premises) shall be treated as including a reference to section 5041 of such Code.

"(e) Return of Distilled Spirits Products Containing Other Alcoholic Ingredients.—With respect to distilled spirits to which alcoholic ingredients other than distilled spirits have been added and which have been withdrawn from a distilled spirits plant before January 1, 1980, section 5215(a) of the Internal Revenue Code of 1986 shall apply only if such spirits are returned to the distilled spirits plant from which withdrawn.

"(f) Secretary Defined.—For purposes of this section, the term 'Secretary' means the Secretary of the Treasury or his delegate."

§5062. Refund and drawback in case of exportation

(a) Refund

Under such regulations as the Secretary may prescribe, the amount of any internal revenue tax erroneously or illegally collected in respect to exported articles may be refunded to the exporter of the article, instead of to the manufacturer, if the manufacturer waives any claim for the amount so to be refunded.

(b) Drawback

On the exportation of distilled spirits or wines manufactured, produced, bottled, or packaged in casks or other bulk containers in the United States on which an internal revenue tax has been paid or determined, and which are contained in any cask or other bulk container, or in bottles packed in cases or other containers, there shall be allowed, under regulations prescribed by the Secretary, a drawback equal in amount to the tax found to have been paid or determined on such distilled spirits or wines. In the case of distilled spirits, the preceding sentence shall not apply unless the claim for drawback is filed by the bottler or packager of the spirits and unless such spirits have been marked, especially for export, under regulations prescribed by the Secretary. The Secretary is authorized to prescribe regulations governing the determination and payment or crediting of drawback of internal revenue tax on spirits and wines eligible for drawback under this subsection, including the requirements of such notices, bonds, bills of lading, and other evidence indicating payment or determination of tax and exportation as shall be deemed necessary.

(c) Exportation of imported liquors

(1) Allowance of tax

Upon the exportation of imported distilled spirits, wines, and beer upon which the duties and internal revenue taxes have been paid or determined incident to their importation into the United States, and which have been found after entry to be unmerchantable or not to conform to sample or specifications, and which have been returned to customs custody, the Secretary shall, under such regulations as he shall prescribe, refund, remit, abate, or credit, without interest, to the importer thereof, the full amount of the internal revenue taxes paid or determined with respect to such distilled spirits, wines, or beer.

(2) Destruction in lieu of exportation

At the option of the importer, such imported distilled spirits, wines, and beer, after return to customs custody, may be destroyed under customs supervision and the importer thereof granted relief in the same manner and to the same extent as provided in this subsection upon exportation.

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1336; amended Pub. L. 88–539, §1, Aug. 31, 1964, 78 Stat. 746; Pub. L. 89–44, title VIII, §805(f)(6), June 21, 1965, 79 Stat. 161; Pub. L. 90–630, §2(a), Oct. 22, 1968, 82 Stat. 1328; Pub. L. 94–455, title XIX, §1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 95–176, §1, Nov. 14, 1977, 91 Stat. 1363; Pub. L. 98–369, div. A, title IV, §454(c)(1), July 18, 1984, 98 Stat. 820.)

Prior Provisions

A prior section 5062, act Aug. 16, 1954, ch. 736, 68A Stat. 614, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

1984—Subsec. (b). Pub. L. 98–369 substituted "have been marked" for "have been stamped or restamped, and marked".

1977—Subsec. (b). Pub. L. 95–176 substituted in first sentence "manufactured, produced, bottled, or packaged in casks or other bulk containers" and "other bulk container" for "manufactured or produced" and "package" and in last sentence "spirits and wines eligible for drawback under this subsection, including the requirements" for "domestic distilled spirits and wines, including the requirement".

1976—Subsecs. (a), (b), (c)(1). Pub. L. 94–455 struck out "or his delegate" after "Secretary" wherever appearing.

1968—Subsec. (b). Pub. L. 90–630 permitted, under Treasury regulations, drawback of the tax where the stamping, restamping, or marking is done after the spirits have been removed from the original bottling plant.

1965—Subsec. (c)(1). Pub. L. 89–44 struck out "within six months of their release therefrom" after "customs custody".

1964—Subsec. (c). Pub. L. 88–539 added subsec. (c).

Effective Date of 1984 Amendment

Amendment by Pub. L. 98–369 effective July 1, 1985, see section 456(b) of Pub. L. 98–369, set out as an Effective Date note under section 5101 of this title.

Effective Date of 1977 Amendment

Amendment by Pub. L. 95–176 effective on first day of first calendar month beginning more than 90 days after Nov. 14, 1977, see section 7 of Pub. L. 95–176, set out as a note under section 5003 of this title.

Effective Date of 1968 Amendment

Amendment by Pub. L. 90–630 applicable only to articles exported on or after first day of first calendar month which begins more than 90 days after Oct. 22, 1968, see section 4 of Pub. L. 90–630, set out as a note under section 5008 of this title.

Effective Date of 1965 Amendment

Amendment by Pub. L. 89–44 effective July 1, 1965, see section 805(g)(1) of Pub. L. 89–44, set out as a note under section 5008 of this title.

Effective Date of 1964 Amendment

Pub. L. 88–539, §2, Aug. 31, 1964, 78 Stat. 746, provided that: "The amendment made by the first section of this Act [amending this section] shall apply with respect to articles exported or destroyed after the date of the enactment of this Act [Aug. 31, 1964]."

[§5063. Repealed. Pub. L. 89–44, title V, §501(e), June 21, 1965, 79 Stat. 150]

Section, Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1336; Pub. L. 86–75, §3(b)(1), June 30, 1959, 73 Stat. 157; Pub. L. 86–564, title II, §202(b)(1), June 30, 1960, 74 Stat. 290; Pub. L. 87–72, §3(b)(1), June 30, 1961, 75 Stat. 193; Pub. L. 87–508, §3(b)(1), June 28, 1962, 76 Stat. 114; Pub. L. 88–52, §3(b)(1)(A), June 29, 1963, 77 Stat. 72; Pub. L. 88–348, §2(b)(1)(A), June 30, 1964, 78 Stat. 237, made provision for floor stocks refunds on distilled spirits, wines, cordials, and beer and set out limitations on the eligibility for such refunds or credits.

A prior section 5063, act Aug. 16, 1954, ch. 736, 68A Stat. 615, consisted of provisions similar to those comprising section 5063, prior to the general revision of this chapter by Pub. L. 85–859.

Effective Date of Repeal

Repeal applicable on and after July 1, 1965, see section 701(d) of Pub. L. 89–44, set out as an Effective Date of 1965 Amendment note under section 5701 of this title.

§5064. Losses resulting from disaster, vandalism, or malicious mischief

(a) Payments

The Secretary, under such regulations as he may prescribe, shall pay (without interest) an amount equal to the amount of the internal revenue taxes paid or determined and customs duties paid on distilled spirits, wines, and beer previously withdrawn, which were lost, rendered unmarketable, or condemned by a duly authorized official by reason of—

(1) fire, flood, casualty, or other disaster, or

(2) breakage, destruction, or other damage (but not including theft) resulting from vandalism or malicious mischief,


if such disaster or damage occurred in the United States and if such distilled spirits, wines, or beer were held and intended for sale at the time of such disaster or other damage. The payments provided for in this section shall be made to the person holding such distilled spirits, wines, or beer for sale at the time of such disaster or other damage.

(b) Claims

(1) Period for making claim; proof

No claim shall be allowed under this section unless—

(A) filed within 6 months after the date on which such distilled spirits, wines, or beer were lost, rendered unmarketable, or condemned by a duly authorized official, and

(B) the claimant furnishes proof satisfactory to the Secretary that the claimant—

(i) was not indemnified by any valid claim of insurance or otherwise in respect of the tax, or tax and duty, on the distilled spirits, wines, or beer covered by the claim; and

(ii) is entitled to payment under this section.

(2) Minimum claim

Except as provided in paragraph (3)(A), no claim of less than $250 shall be allowed under this section with respect to any disaster or other damage (as the case may be).

(3) Special rules for major disasters

If the President has determined under the Robert T. Stafford Disaster Relief and Emergency Assistance Act that a "major disaster" (as defined in such Act) has occurred in any part of the United States, and if the disaster referred to in subsection (a)(1) occurs in such part of the United States by reason of such major disaster, then—

(A) paragraph (2) shall not apply, and

(B) the filing period set forth in paragraph (1)(A) shall not expire before the day which is 6 months after the date on which the President makes the determination that such major disaster has occurred.

(4) Regulations

Claims under this section shall be filed under such regulations as the Secretary shall prescribe.

(c) Destruction of distilled spirits, wines, or beer

When the Secretary has made payment under this section in respect of the tax, or tax and duty, on the distilled spirits, wines, or beer condemned by a duly authorized official or rendered unmarketable, such distilled spirits, wines, or beer shall be destroyed under such supervision as the Secretary may prescribe, unless such distilled spirits, wines, or beer were previously destroyed under supervision satisfactory to the Secretary.

(d) Products of Puerto Rico

The provisions of this section shall not be applicable in respect of distilled spirits, wines, and beer of Puerto Rican manufacture brought into the United States and so lost or rendered unmarketable or condemned.

(e) Other laws applicable

All provisions of law, including penalties, applicable in respect of internal revenue taxes on distilled spirits, wines, and beer shall, insofar as applicable and not inconsistent with this section, be applied in respect of the payments provided for in this section to the same extent as if such payments constituted refunds of such taxes.

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1337; amended Pub. L. 91–606, title III, §301(i), Dec. 31, 1970, 84 Stat. 1759; Pub. L. 93–288, title VII, §702(i), formerly title VI, §602(i), May 22, 1974, 88 Stat. 164, renumbered title VII, §702(i), Pub. L. 103–337, div. C, title XXXIV, §3411(a)(1), (2), Oct. 5, 1994, 108 Stat. 3100; Pub. L. 94–455, title XIX, §1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 95–423, §1(a), Oct. 6, 1978, 92 Stat. 935; Pub. L. 96–39, title VIII, §807(a)(10), July 26, 1979, 93 Stat. 282; Pub. L. 100–707, title I, §109(l), Nov. 23, 1988, 102 Stat. 4709; Pub. L. 108–311, title IV, §408(a)(7)(D), Oct. 4, 2004, 118 Stat. 1191.)

References in Text

The Robert T. Stafford Disaster Relief and Emergency Assistance Act, referred to in subsec. (b)(3), is Pub. L. 93–288, May 22, 1974, 88 Stat. 143, as amended, which is classified principally to chapter 68 (§5121 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under section 5121 of Title 42 and Tables.

Prior Provisions

A prior section 5064, act Aug. 16, 1954, ch. 736, 68A Stat. 615, related to "territorial extent of law", prior to the general revision of this chapter by Pub. L. 85–859. See section 5065 of this title.

Amendments

2004—Subsec. (b)(3). Pub. L. 108–311 inserted "Robert T. Stafford" before "Disaster Relief and Emergency Assistance Act" in introductory provisions.

1988—Subsec. (b)(3). Pub. L. 100–707 substituted "and Emergency Assistance Act" for "Act of 1974".

1979Pub. L. 96–39 struck out "rectified products," after "distilled spirits, wines," wherever appearing.

1978Pub. L. 95–423 substituted "Losses resulting from disaster, vandalism, or malicious mischief" for "Losses caused by disaster" in section catchline.

Subsec. (a). Pub. L. 95–423 substituted provisions authorizing the Secretary, under such regulations as he may prescribe, to pay the prescribed amount on distilled spirits, etc., lost, rendered unmarketable, or condemned by a duly authorized official by reason of fire, flood, casualty or other disaster, breakage, destruction, or other damage (but not including theft) resulting from vandalism or malicious mischief, for provisions authorizing such payment where the President has determined under the Disaster Relief Act of 1974 that a "major disaster" has occurred, and that distilled spirits, etc., were lost, rendered unmarketable, or condemned by a duly authorized official by reason of such disaster occurring after June 30, 1959.

Subsec. (b). Pub. L. 95–423 redesignated par. (1) as (1)(A), substituted provisions disallowing a claim unless filed within 6 months after such distilled spirits, etc., were lost, rendered unmarketable or condemned, for provisions disallowing a claim unless filed within 6 months after the President determined that such disaster occurred, and added par. (1)(B); in par. (2) substituted provisions limiting claims to no less than $250, except as provided in par. (3)(A), for provisions demanding proof that claimant was not indemnified by any valid claim of insurance and that he is entitled to payment under this section; and added pars. (3) and (4).

1976—Subsecs. (a) to (c). Pub. L. 94–455 struck out "or his delegate" after "Secretary" wherever appearing.

1974—Subsec. (a). Pub. L. 93–288 substituted "Disaster Relief Act of 1974" for "Disaster Relief Act of 1970".

1970—Subsec. (a). Pub. L. 91–606 substituted "Disaster Relief Act of 1970" for "Act of September 30, 1950 (42 U.S.C. 1855)".

Effective Date of 1979 Amendment

Amendment by Pub. L. 96–39 effective Jan. 1, 1980, see section 810 of Pub. L. 96–39, set out as a note under section 5001 of this title.

Effective Date of 1978 Amendment

Pub. L. 95–423, §1(c), Oct. 6, 1978, 92 Stat. 936, provided that: "The amendments made by this section [amending this section] shall apply to disasters (or other damage) occurring on or after the first day of the first calendar month which begins more than 90 days after the date of the enactment of this Act [Oct. 6, 1978]."

Effective Date of 1974 Amendment

Amendment by Pub. L. 93–288 effective Apr. 1, 1974, see section 605 of Pub. L. 93–288, formerly set out as an Effective Date note under section 5121 of Title 42, The Public Health and Welfare.

Effective Date of 1970 Amendment

Amendment by Pub. L. 91–606 effective Dec. 31, 1970, see section 304 of Pub. L. 91–606, set out as a note under section 165 of this title.

Effective Date

Section effective July 1, 1959, see section 210(a)(1) of Pub. L. 85–859, set out as a note under section 5001 of this title.

Exception to Effective Date

Pub. L. 85–859, title II, §210(a)(3), Sept. 2, 1958, 72 Stat. 1435, as amended by Pub. L. 99–514, §2, Oct. 22, 1986, 100 Stat. 2095, provided that: "Provisions having the effect of section 5064 of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as such section is included in chapter 51 of such Code as amended by section 201 of this Act) shall be deemed to be included in the Internal Revenue Code of 1986, effective on the day following the date of the enactment of this Act [Sept. 2, 1958], and shall apply with respect to disasters occurring after such date of enactment, and not later than June 30, 1959."

Beer Lost by Reason of Floods of 1951 or Hurricanes of 1954

Pub. L. 85–859, title II, §207, Sept. 2, 1958, 72 Stat. 1432, provided for payment of an amount equal to the amount of taxes paid under section 3150(a) of the Internal Revenue Code of 1939 on fermented malt liquor which was lost, rendered unmarketable, or condemned by reason of the floods of 1951 or the hurricanes of 1954, under certain conditions and under regulations to be prescribed.

Losses of Alcoholic Liquors Caused by Disaster

Pub. L. 85–859, title II, §208, Sept. 2, 1958, 72 Stat. 1432, provided for payment of an amount equal to the amount of taxes and customs duties paid on distilled spirits, wines, rectified products, and beer previously withdrawn, which were lost, rendered unmarketable, or condemned by reason of a major disaster occurring after Dec. 31, 1954, and not later than Sept. 2, 1958, under certain conditions and under regulations to be prescribed.

§5065. Territorial extent of law

The provisions of this part imposing taxes on distilled spirits, wines, and beer shall be held to extend to such articles produced anywhere within the exterior boundaries of the United States, whether the same be within an internal revenue district or not.

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1337.)

Prior Provisions

A prior section 5065, act Aug. 16, 1954, ch. 736, 68A Stat. 615, made a cross reference to general administrative provisions applicable to assessment, collection, refund, etc., of taxes, prior to the general revision of this chapter by Pub. L. 85–859.

Provisions similar to those comprising this section were contained in former section 5064, act Aug. 16, 1954, ch. 736, 68A Stat. 615, prior to the general revision of this chapter by Pub. L. 85–859.

§5066. Distilled spirits for use of foreign embassies, legations, etc.

(a) Entry into customs bonded warehouses

(1) Bottled distilled spirits withdrawn from bonded premises

Under such regulations as the Secretary may prescribe, bottled distilled spirits may be withdrawn from bonded premises as provided in section 5214(a)(4) for transfer to customs bonded warehouses in which imported distilled spirits are permitted to be stored in bond for entry therein pending withdrawal therefrom as provided in subsection (b). For the purposes of this chapter, the withdrawal of distilled spirits from bonded premises under the provisions of this paragraph shall be treated as a withdrawal for exportation and all provisions of law applicable to distilled spirits withdrawn for exportation under the provisions of section 5214(a)(4) shall apply with respect to spirits withdrawn under this paragraph.

(2) Bottled distilled spirits eligible for export with benefit of drawback

Under such regulations as the Secretary may prescribe, distilled spirits marked especially for export under the provisions of section 5062(b) may be shipped to a customs bonded warehouse in which imported distilled spirits are permitted to be stored, and entered in such warehouses pending withdrawal therefrom as provided in subsection (b), and the provisions of this chapter shall apply in respect of such distilled spirits as if such spirits were for exportation.

(3) Time deemed exported

For the purposes of this chapter, distilled spirits entered into a customs bonded warehouse as provided in this subsection shall be deemed exported at the time so entered.

(b) Withdrawal from customs bonded warehouses

Notwithstanding any other provisions of law, distilled spirits entered into customs bonded warehouses under the provisions of subsection (a) may, under such regulations as the Secretary may prescribe, be withdrawn from such warehouses for consumption in the United States by and for the official or family use of such foreign governments, organizations, and individuals who are entitled to withdraw imported distilled spirits from such warehouses free of tax. Distilled spirits transferred to customs bonded warehouses under the provisions of this section shall be entered, stored, and accounted for in such warehouses under such regulations and bonds as the Secretary may prescribe, and may be withdrawn therefrom by such governments, organizations, and individuals free of tax under the same conditions and procedures as imported distilled spirits.

(c) Withdrawal for domestic use

Distilled spirits entered into customs bonded warehouses as authorized by this section may be withdrawn therefrom for domestic use, in which event they shall be treated as American goods exported and returned.

(d) Sale or unauthorized use prohibited

No distilled spirits withdrawn from customs bonded warehouses or otherwise brought into the United States free of tax for the official or family use of such foreign governments, organizations, or individuals as are authorized to obtain distilled spirits free of tax shall be sold, or shall be disposed of or possessed for any use other than an authorized use. The provisions of section 5001(a)(5) 1 are hereby extended and made applicable to any person selling, disposing of, or possessing any distilled spirits in violation of the preceding sentence, and to the distilled spirits involved in any such violation.

(Added Pub. L. 91–659, §3(a), Jan. 8, 1971, 84 Stat. 1965; amended Pub. L. 94–455, title XIX, §1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 95–176, §2(d), Nov. 14, 1977, 91 Stat. 1364; Pub. L. 96–39, title VIII, §807(a)(11), July 26, 1979, 93 Stat. 282; Pub. L. 98–369, div. A, title IV, §454(c)(2), July 18, 1984, 98 Stat. 820.)

References in Text

Section 5001(a)(5), referred to in subsec. (d), was redesignated section 5001(a)(4) by Pub. L. 103–465, title I, §136(a), Dec. 8, 1994, 108 Stat. 4841.

Prior Provisions

A prior section 5066 was renumbered 5067 of this title.

Amendments

1984—Subsec. (a)(2). Pub. L. 98–369 substituted "marked" for "stamped or restamped, and marked,".

1979—Subsec. (a)(1). Pub. L. 96–39, §807(a)(11)(A), substituted "bottled distilled spirits" for "distilled spirits bottled in bond for export under the provisions of section 5233, or bottled distilled spirits returned to bonded premises under section 5215(b),".

Subsec. (b). Pub. L. 96–39, §807(a)(11)(B), struck out "or domestic distilled spirits transferred to customs bonded warehouses under section 5521(d)(2)" after "the provisions of subsection (a)".

1977—Subsec. (a)(1). Pub. L. 95–176 substituted par. (1) heading "Bottled distilled spirits withdrawn from bonded premises" for "Distilled spirits bottled in bond for export" and authorized withdrawal of bottled distilled spirits returned to bonded premises under section 5215(b) as provided in section 5214(a)(4).

1976—Subsecs. (a), (b). Pub. L. 94–455 struck out "or his delegate" after "Secretary" wherever appearing.

Effective Date of 1984 Amendment

Amendment by Pub. L. 98–369 effective July 1, 1985, see section 456(b) of Pub. L. 98–369, set out as an Effective Date note under section 5101 of this title.

Effective Date of 1979 Amendment

Amendment by Pub. L. 96–39 effective Jan. 1, 1980, see section 810 of Pub. L. 96–39, set out as a note under section 5001 of this title.

Effective Date of 1977 Amendment

Amendment by Pub. L. 95–176 effective on first day of first calendar month beginning more than 90 days after Nov. 14, 1977, see section 7 of Pub. L. 95–176, set out as a note under section 5003 of this title.

Effective Date

Pub. L. 91–659, §6, Jan. 8, 1971, 84 Stat. 1966, provided that: "This Act [enacting this section and amending sections 5008, 5173, 5178, 5215, and 5232 of this title] shall take effect on the first day of the first calendar month which begins more than 90 days after the date of the enactment of this Act [Jan. 8, 1971]."

1 See References in Text note below.

§5067. Cross reference

For general administrative provisions applicable to the assessment, collection, refund, etc., of taxes, see subtitle F.

(Added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1338, §5066; renumbered §5067, Pub. L. 91–659, §3(a), Jan. 8, 1971, 84 Stat. 1965.)

Prior Provisions

Provisions similar to those comprising this section were contained in former section 5065, act Aug. 16, 1954, ch. 736, 68A Stat. 615, prior to the general revision of this chapter by Pub. L. 85–859.

A prior section 5081, added Pub. L. 100–203, title X, §10512(a)(1)(A), Dec. 22, 1987, 101 Stat. 1330–447; amended Pub. L. 100–647, title VI, §6106(a), (b), Nov. 10, 1988, 102 Stat. 3712, related to tax on proprietors of distilled spirits plants, bonded wine cellars, etc., prior to repeal by Pub. L. 109–59, title XI, §11125(a)(1)(A), (c), Aug. 10, 2005, 119 Stat. 1953, 1957, effective July 1, 2008, but inapplicable to taxes imposed for periods before such date.

Another prior section 5081, added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1338, imposed a tax on rectifiers of distilled spirits or wines, prior to repeal by Pub. L. 96–39, title VIII, §§803(b), 810, July 26, 1979, 93 Stat. 274, 292, effective Jan. 1, 1980.

Another prior section 5081, act Aug. 16, 1954, ch. 736, 68A Stat. 615, imposed a tax on rectifiers of distilled spirits or wines, prior to the general revision of this chapter by Pub. L. 85–859.

A prior section 5082, added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1338, defined "rectifier", prior to repeal by Pub. L. 96–39, title VIII, §§803(b), 810, July 26, 1979, 93 Stat. 274, 292, effective Jan. 1, 1980.

Another prior section 5082, act Aug. 16, 1954, ch. 736, 68A Stat. 616, defined "rectifier", prior to the general revision of this chapter by Pub. L. 85–859.

A prior section 5083, added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1338; amended Pub. L. 89–44, title VIII, §805(f)(7), June 21, 1965, 79 Stat. 161, enumerated source authority for certain exemptions from tax under sections 5021 and 5081 of this title, prior to repeal by Pub. L. 96–39, title VIII, §§803(b), 810, July 26, 1979, 93 Stat. 274, 292, effective Jan. 1, 1980.

Another prior section 5083, act Aug. 16, 1954, ch. 736, 68A Stat. 616, enumerated source authority for certain exemptions from tax under sections 5021 and 5081 of this title, prior to the general revision of this chapter by Pub. L. 85–859.

A prior section 5084, added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1339, made cross references to other provisions relating to rectification, prior to repeal by Pub. L. 96–39, title VIII, §§803(b), 810, July 26, 1979, 93 Stat. 274, 292, effective Jan. 1, 1980.

Another prior section 5084, act Aug. 16, 1954, ch. 736, 68A Stat. 616, made cross references to other provisions relating to rectification, prior to the general revision of this chapter by Pub. L. 85–859.

A prior section 5091, added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1339; amended Pub. L. 100–203, title X, §10512(a)(2), Dec. 22, 1987, 101 Stat. 1330–448, related to imposition of tax on brewers, prior to repeal by Pub. L. 109–59, title XI, §11125(a)(1)(B), (c), Aug. 10, 2005, 119 Stat. 1953, 1957, effective July 1, 2008, but inapplicable to taxes imposed for periods before such date.

Another prior section 5091, act Aug. 16, 1954, ch. 736, 68A Stat. 616, related to imposition of tax on brewers, prior to the general revision of this chapter by Pub. L. 85–859.

A prior section 5092, added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1339; amended Pub. L. 95–458, §2(b)(3), Oct. 14, 1978, 92 Stat. 1256, defined "brewer", prior to repeal by Pub. L. 109–59, title XI, §11125(a)(1)(B), (c), Aug. 10, 2005, 119 Stat. 1953, 1957, effective July 1, 2008, but inapplicable to taxes imposed for periods before such date.

Another prior section 5092, act Aug. 16, 1954, ch. 736, 68A Stat. 617, defined "brewer", prior to the general revision of this chapter by Pub. L. 85–859.

A prior section 5093, added Pub. L. 85–859, title II, §201, Sept. 2, 1958, 72 Stat. 1339, set out cross references, prior to repeal by Pub. L. 109–59, title XI, §11125(a)(1)(B), (c), Aug. 10, 2005, 119 Stat. 1953, 1957, effective July 1, 2008, but inapplicable to taxes imposed for periods before such date.

Another prior section 5093, act Aug. 16, 1954, ch. 736, 68A Stat. 617, set out cross references, prior to the general revision of this chapter by Pub. L. 85–859.