Subtitle E—Alcohol, Tobacco, and Certain Other Excise Taxes
Editorial Notes
Amendments
2002—
1997—
1988—
1987—
1 Section numbers editorially supplied.
2 Chapter heading amended by
CHAPTER 51 —DISTILLED SPIRITS, WINES, AND BEER
Editorial Notes
Prior Provisions
The provisions of a prior
Subchapter A, Gallonage and occupational taxes, comprising sections 5001 to 5012, 5021 to 5028, 5041 to 5045, 5051 to 5057, 5061 to 5065, 5081 to 5084, 5091 to 5093, 5101 to 5106, 5111 to 5116, 5121 to 5124, 5131 to 5134, and 5141 to 5149.
Subchapter B, Distilleries, comprising sections 5171 to 5180, 5191 to 5197, and 5211 to 5217.
Subchapter C, Internal Revenue bonded warehouses, comprising sections 5231 to 5233 and 5241 to 5252.
Subchapter D, Rectifying plants, comprising sections 5271 to 5275 and 5281 to 5285.
Subchapter E, Industrial alcohol plants, bonded warehouses, denaturing plants, and denaturation, comprising sections 5301 to 5320 and 5331 to 5334.
Subchapter F, Bonded and taxpaid wine premises, comprising sections 5351 to 5357, 5361 to 5373, 5381 to 5388, 5391, and 5392.
Subchapter G, Breweries, comprising sections 5401 to 5403 and 5411 to 5416.
Subchapter H, Miscellaneous plants and warehouses, comprising sections 5501, 5502, 5511, 5512, and 5521 to 5523.
Subchapter I, Miscellaneous general provisions, comprising sections 5551 to 5557.
Subchapter J, Penalties, seizures, and forfeitures relating to liquors, comprising sections 5601 to 5650, 5661 to 5663, 5671 to 5676, 5681 to 5690, and 5691 to 5693.
1 Section numbers editorially supplied.
Subchapter A—Gallonage and Occupational Taxes
Editorial Notes
Amendments
2005—
PART I—GALLONAGE TAXES
Editorial Notes
Amendments
1979—
Subpart A—Distilled Spirits
Editorial Notes
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
Amendments
2005—
1980—
1979—
§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) Reduced rate
(1) In general
In the case of a distilled spirits operation, the otherwise applicable tax rate under subsection (a)(1) shall be—
(A) $2.70 per proof gallon on the first 100,000 proof gallons of distilled spirits, and
(B) $13.34 per proof gallon on the first 22,130,000 of 1 proof gallons of distilled spirits to which subparagraph (A) does not apply,
which have been distilled or processed by such operation and removed during the calendar year for consumption or sale, or which have been imported by the importer into the United States during the calendar year but only if the importer is an electing importer under paragraph (3) and the proof gallons of distilled spirits have been assigned to the importer pursuant to such paragraph.
(2) Controlled groups
(A) In general
In the case of a controlled group, the proof gallon quantities specified under subparagraphs (A) and (B) of paragraph (1) shall be applied to such group and apportioned among the members of such group in such manner as the Secretary or their delegate shall by regulations prescribe.
(B) Definition
For purposes of subparagraph (A), the term "controlled group" shall have the meaning given 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.
(C) Rules for non-corporations
Under regulations prescribed by the Secretary, principles similar to the principles of subparagraphs (A) and (B) shall be applied to a group under common control where one or more of the persons is not a corporation.
(D) Single taxpayer
Pursuant to rules issued by the Secretary, two or more entities (whether or not under common control) that produce or process distilled spirits under a license, franchise, or other arrangement shall be treated as a single taxpayer for purposes of the application of this subsection.
(3) Reduced tax rate for foreign manufacturers and importers
(A) In general
In the case of any proof gallons of distilled spirits which have been produced outside of the United States and imported into the United States, the rate of tax applicable under paragraph (1) (referred to in this paragraph as the "reduced tax rate") may be assigned by the distilled spirits operation (provided that such operation makes an election described in subparagraph (B)(ii)) to any electing importer of such proof gallons pursuant to the requirements established by the Secretary under subparagraph (B).
(B) Assignment
The Secretary of the Treasury, after consultation with the Secretary of the Department of Homeland Security, shall, through such rules, regulations, and procedures as are determined appropriate, establish procedures for assignment of the reduced tax rate provided under this paragraph, which shall include—
(i) a limitation to ensure that the number of proof gallons of distilled spirits for which the reduced tax rate has been assigned by a distilled spirits operation—
(I) to any importer does not exceed the number of proof gallons produced by such operation during the calendar year which were imported into the United States by such importer, and
(II) to all importers does not exceed the 22,230,000 proof gallons of distilled spirits to which the reduced tax rate applies,
(ii) procedures that allow the election of a distilled spirits operation to assign and an importer to receive the reduced tax rate provided under this paragraph,
(iii) requirements that the distilled spirits operation provide any information as the Secretary determines necessary and appropriate for purposes of carrying out this paragraph, and
(iv) procedures that allow for revocation of eligibility of the distilled spirits operation and the importer for the reduced tax rate provided under this paragraph in the case of any erroneous or fraudulent information provided under clause (iii) which the Secretary deems to be material to qualifying for such reduced rate.
(C) Controlled group
(i) In general
For purposes of this section, any importer making an election described in subparagraph (B)(ii) shall be deemed to be a member of the controlled group of the distilled spirits operation, as described under paragraph (2).
(ii) Apportionment
For purposes of this paragraph, in the case of a controlled group, rules similar to section 5051(a)(5)(B) shall apply.
(4) Refunds in lieu of reduced rates for foreign production removed after December 31, 2022
(A) In general
In the case of any proof gallons of distilled spirits which have been produced outside the United States and imported into the United States, if such proof gallons of distilled spirits are removed after December 31, 2022—
(i) paragraph (1) shall not apply, and
(ii) the amount determined under subparagraph (B) shall be allowed as a refund, determined for periods not less frequently than quarterly, to the importer in the same manner as if such amount were an overpayment of tax imposed by this section.
(B) Amount of refund
The amount determined under this subparagraph with respect to any importer for any period is an amount equal to the sum of—
(i) the excess (if any) of—
(I) the amount of tax imposed under this subpart on proof gallons of distilled spirits referred to in subparagraph (A) which were removed during such period, over
(II) the amount of tax which would have been imposed under this subpart on such proof gallons of distilled spirits if this section were applied without regard to this paragraph, plus
(ii) the amount of interest which would be allowed and paid on an overpayment of tax at the overpayment rate established under section 6621(a)(1) (without regard to the second sentence thereof) were such rate applied to the excess (if any) determined under clause (i) for the number of days in the filing period for which the refund under this paragraph is being determined.
(C) Application of rules related to elections and assignments
Subparagraph (A)(ii) shall apply only if the importer is an electing importer under paragraph (3) and the proof gallons of distilled spirits have been assigned to the importer pursuant to such paragraph.
(D) Rules for refunds within 90 days
For purposes of refunds allowed under this paragraph, section 6611(e) shall be applied by substituting "90 days" for "45 days" each place it appears.
(5) Processed distilled spirits
A distilled spirit shall not be treated as processed for purposes of this subsection unless a process described in section 5002(a)(5)(A) (other than bottling) is performed with respect to such distilled spirit.
(d) 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
Editorial Notes
Prior Provisions
A prior section 5001, acts Aug. 16, 1954, ch. 736,
Amendments
2020—Subsec. (c).
Subsec. (c)(2)(D).
Subsec. (c)(3)(B).
Subsec. (c)(4).
Subsec. (c)(5).
2019—Subsec. (c).
Subsec. (c)(4).
2017—Subsec. (c).
Subsec. (c)(1).
Subsec. (c)(3), (4).
Subsec. (d).
1994—Subsec. (a)(3) to (10).
1990—Subsec. (a)(1), (3).
1984—Subsec. (a)(1), (3).
1979—Subsec. (a)(1).
Subsec. (a)(2).
1965—Subsec. (a)(1).
Subsec. (a)(3).
1964—Subsec. (a)(1).
Subsec. (a)(3).
1963—Subsec. (a)(1).
Subsec. (a)(3).
1962—Subsec. (a)(1).
Subsec. (a)(3).
1961—Subsec. (a)(1).
Subsec. (a)(3).
1960—Subsec. (a)(1).
Subsec. (a)(3).
1959—Subsec. (a)(1).
Subsec. (a)(3).
Statutory Notes and Related Subsidiaries
Effective Date of 2020 Amendment
Effective Date of 2019 Amendment
Effective Date of 2017 Amendment
Effective Date of 1994 Amendment
Effective Date of 1990 Amendment
Effective Date of 1984 Amendment
"(1)
"(2)
Effective Date of 1979 Amendment
Effective Date of 1965 Amendment
Amendment by
Effective Date
Short Title
Regulations
Savings Provision
References to Other Provisions of Law
Repeal of Acts Mar. 3, 1877 and Oct. 18, 1888
Administration of Refunds
Floor Stocks Taxes on Distilled Spirits, Wine, and Beer
"(1)
"(A)
"(i) on which tax was determined under part I of subchapter A of
"(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)
"(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)
"(2)
"(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
"(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)
"(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)
"(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)
"(A)
"(B)
"(C)
"(6)
"(A)
"(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)
"(7)
"(A)
"(B)
"(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)
"(A)
"(B)
"(C)
"(9)
Floor Stocks Tax Treatment of Articles in Foreign Trade Zones
"(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 [
"(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
"(1)
"(2)
"(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)
"(4)
"(A)
"(B)
"(C)
"(i)
"(ii)
"(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)
"(5)
"(A)
"(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)
"(6)
"(7)
"(A)
"(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)
"(C)
"(D)
"(E)
"(F)
"(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 [
"(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
(Added
Editorial Notes
Prior Provisions
A prior section 5002, act Aug. 16, 1954, ch. 736,
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,
Amendments
2005—Subsec. (b)(2).
Subsec. (b)(3).
Subsec. (b)(4).
1994—Subsec. (b)(1) to (6).
1979—Subsec. (a)(1).
Subsec. (a)(2), (3).
Subsec. (a)(4).
Subsec. (a)(5) to (7).
Subsec. (a)(8).
Subsec. (a)(9).
Subsec. (a)(10) to (15).
Subsec. (b).
1976—Subsec. (a)(10).
1965—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 2005 Amendment
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1965 Amendment
§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
(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
(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
Editorial Notes
Prior Provisions
A prior section 5003, act Aug. 16, 1954, ch. 736,
Amendments
1979—Par. (9).
Pars. (15) to (17).
1977—Par. (9).
Par. (14).
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1977 Amendment
§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
Editorial Notes
Prior Provisions
A prior section 5004, act Aug. 16, 1954, ch. 736,
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,
Amendments
1980—Subsec. (a)(2)(B).
1979—Subsec. (a)(2)(B).
Subsecs. (b), (c).
1977—Subsec. (a)(2).
1976—Subsec. (b)(3)(B), (4).
1965—Subsec. (c).
Statutory Notes and Related Subsidiaries
Effective Date of 1980 Amendment
Amendment by
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1977 Amendment
Amendment by
Effective Date of 1965 Amendment
§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
Editorial Notes
Prior Provisions
A prior section 5005, acts Aug. 16, 1954, ch. 736,
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,
Amendments
1994—Subsec. (f)(3).
Subsec. (f)(4).
1984—Subsec. (e)(1).
Subsec. (e)(2).
1980—Subsec. (d).
1979—Subsec. (c)(3).
Subsec. (d).
Subsec. (f)(1).
Subsec. (f)(6).
1977—Subsec. (d).
Subsec. (e)(1).
Subsec. (e)(2).
1976—Subsec. (c)(2).
Statutory Notes and Related Subsidiaries
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1977 Amendment
Amendment by
Effective Date of 1976 Amendment
§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
Editorial Notes
Prior Provisions
A prior section 5006, acts Aug. 16, 1954, ch. 736,
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,
Amendments
1979—Subsec. (a)(1).
Subsec. (a)(2), (3).
Subsec. (b)(1).
Subsec. (b)(2), (3).
1976—Subsecs. (a) to (c).
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
Application of 1972 Amendments to Prior Sections
"(1) The amendments made by this section [amending this section and
"(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
Editorial Notes
Prior Provisions
A prior section 5007, act Aug. 16, 1954, ch. 736,
Prior section 5007(c) related to "payment of tax on alcoholic compounds from Puerto Rico and Virgin Islands". See
Prior section 5007(e)(1) related to "assessment for deficiencies in production and excess of materials used" and "requirement". See
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).
Subsec. (c)(3).
1979—Subsec. (a).
1976—Subsec. (a)(2).
Subsec. (b)(1).
Subsecs. (b)(2), (c)(1).
Statutory Notes and Related Subsidiaries
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by section 1905(b)(2)(A) of
§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
Editorial Notes
Prior Provisions
A prior section 5008, act Aug. 16, 1954, ch. 736,
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,
Amendments
1997—Subsec. (c)(1).
1979—Subsec. (a)(1)(C).
Subsec. (a)(5).
Subsec. (b).
Subsec. (c).
Subsec. (d).
Subsec. (e).
Subsec. (f).
Subsecs. (g), (h).
1977—Subsec. (d).
Subsec. (f)(5).
1976—Subsec. (b)(1).
Subsec. (b)(2).
Subsec. (c)(1).
Subsec. (c)(2), (3).
Subsec. (c)(5).
Subsec. (d)(1).
1971—Subsec. (b)(2).
Subsec. (c)(1)(A).
Subsec. (c)(5).
1968—Subsec. (c)(1).
1965—Subsec. (d)(2).
Statutory Notes and Related Subsidiaries
Effective Date of 1997 Amendment
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1977 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by section 1905(a)(2) of
Effective Date of 1971 Amendment
Amendment by
Effective Date of 1968 Amendment
"(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
Effective Date of 1965 Amendment
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
[§5009. Repealed. Pub. L. 96–39, title VIII, §807(a)(7), July 26, 1979, 93 Stat. 281 ]
Section, added
A prior section 5009, act Aug. 16, 1954, ch. 736,
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal effective Jan. 1, 1980, see section 810 of
§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
Editorial Notes
Prior Provisions
A prior section 5010, act Aug. 16, 1954, ch. 736,
Amendments
2005—Subsec. (c)(2)(A).
1990—Subsec. (a)(1), (2).
1988—Subsec. (c)(2)(B).
1984—Subsec. (a)(1), (2).
Statutory Notes and Related Subsidiaries
Effective Date of 2005 Amendment
Amendment by
Effective Date of 1990 Amendment
Amendment by
Effective Date of 1988 Amendment
Effective Date of 1984 Amendment
Amendment by
Effective Date
§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
Editorial Notes
References in Text
The Federal Alcohol Administration Act, referred to in subsec. (b), is act Aug. 29, 1935, ch. 814,
Prior Provisions
A prior section 5011, act Aug. 16, 1954, ch. 736,
A prior section 5012, act Aug. 16, 1954, ch. 736,
Statutory Notes and Related Subsidiaries
Effective Date
Section applicable to taxable years beginning after Sept. 30, 2005, see section 11126(d) of
[Subpart B—Repealed]
[§§5021 to 5026. Repealed. Pub. L. 96–39, title VIII, §803(a), July 26, 1979, 93 Stat. 274 ]
Section 5021, added
A prior section 5021, act Aug. 16, 1954, ch. 736,
Section 5022, added
A prior section 5022, acts Aug. 16, 1954, ch. 736,
Section 5023, added
A prior section 5023, act Aug. 16, 1954, ch. 736,
Section 5024, added
A prior section 5024, act Aug. 16, 1954, ch. 736,
Section 5025, added
A prior section 5025, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising
Section 5026, added
A prior section 5026, act Aug. 16, 1954, ch. 736,
A prior section 5027, act Aug. 16, 1954, ch. 736,
A prior section 5028, act Aug. 16, 1954, ch. 736,
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal effective Jan. 1, 1980, see section 810 of
Subpart C—Wines
Editorial Notes
Prior Provisions
A prior subpart C, comprising sections 5041 to 5045, related to wines, prior to the general revision of this chapter by
Amendments
1997—
§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. Subject to subsection (h), 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 16 percent of alcohol by volume, $1.07 per wine gallon;
(2) On still wines containing more than 16 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
(1) Allowance of credit
(A) In general
There shall be allowed as a credit against any tax imposed by this title (other than chapters 2, 21, and 22) an amount equal to the sum of—
(i) $1 per wine gallon on the first 30,000 wine gallons of wine, plus
(ii) 90 cents per wine gallon on the first 100,000 wine gallons of wine to which clause (i) does not apply, plus
(iii) 53.5 cents per wine gallon on the first 620,000 wine gallons of wine to which clauses (i) and (ii) do not apply,
which are produced by the producer and removed during the calendar year for consumption or sale, or which are imported by the importer into the United States during the calendar year but only if the importer is an electing importer under paragraph (6) and the wine gallons of wine have been assigned to the importer pursuant to such paragraph.
(B) Adjustment of credit for hard cider
In the case of wine described in subsection (b)(6), subparagraph (A) of this paragraph shall be applied—
(i) in clause (i) of such subparagraph, by substituting "6.2 cents" for "$1",
(ii) in clause (ii) of such subparagraph, by substituting "5.6 cents" for "90 cents", and
(iii) in clause (iii) of such subparagraph, by substituting "3.3 cents" for "53.5 cents".
(2) 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.
(3) 1 Controlled groups
Rules similar to rules of section 5051(a)(5) shall apply for purposes of this subsection.
(4) 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.
(5) 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.
(6) Allowance of credit for foreign manufacturers and importers
(A) In general
In the case of any wine gallons of wine which have been produced outside of the United States and imported into the United States, the credit allowable under paragraph (1) (referred to in this paragraph as the "tax credit") may be assigned by the person who produced such wine (referred to in this paragraph as the "foreign producer"), provided that such person makes an election described in subparagraph (B)(ii), to any electing importer of such wine gallons pursuant to the requirements established by the Secretary under subparagraph (B).
(B) Assignment
The Secretary of the Treasury, after consultation with the Secretary of the Department of Homeland Security, shall, through such rules, regulations, and procedures as are determined appropriate, establish procedures for assignment of the tax credit provided under this paragraph, which shall include—
(i) a limitation to ensure that the number of wine gallons of wine for which the tax credit has been assigned by a foreign producer—
(I) to any importer does not exceed the number of wine gallons of wine produced by such foreign producer during the calendar year which were imported into the United States by such importer, and
(II) to all importers does not exceed the 750,000 wine gallons of wine to which the tax credit applies,
(ii) procedures that allow the election of a foreign producer to assign and an importer to receive the tax credit provided under this paragraph,
(iii) requirements that the foreign producer provide any information as the Secretary determines necessary and appropriate for purposes of carrying out this paragraph, and
(iv) procedures that allow for revocation of eligibility of the foreign producer and the importer for the tax credit provided under this paragraph in the case of any erroneous or fraudulent information provided under clause (iii) which the Secretary deems to be material to qualifying for such credit.
(C) Controlled group
For purposes of this section, any importer making an election described in subparagraph (B)(ii) shall be deemed to be a member of the controlled group of the foreign producer, as described under paragraph (3).
(7) Refunds in lieu of tax credits for foreign production removed after December 31, 2022
(A) In general
In the case of any wine gallons of wine which have been produced outside the United States and imported into the United States, if such wine gallons are removed after December 31, 2022—
(i) paragraph (1) shall not apply, and
(ii) the amount determined under subparagraph (B) shall be allowed as a refund, determined for periods not less frequently than quarterly, to the importer in the same manner as if such amount were an overpayment of tax imposed by this section.
(B) Amount of refund
The amount determined under this subparagraph with respect to any importer for any period is an amount equal to the sum of—
(i) excess (if any) of—
(I) the amount of tax imposed under this section on wine gallons of wine referred to in subparagraph (A) which were removed during such period, over
(II) the amount of tax which would have been imposed under this section (including any allowable credits) on such gallons of wine if this section were applied without regard to this paragraph, plus
(ii) the amount of interest which would be allowed and paid on an overpayment of tax at the overpayment rate established under section 6621(a)(1) (without regard to the second sentence thereof) were such rate applied to the excess (if any) determined under clause (i) for the number of days in the filing period for which the refund under this paragraph is being determined.
(C) Application of rules related to elections and assignments
Subparagraph (A)(ii) shall apply only if the importer is an electing importer under paragraph (6) and the wine gallons of wine have been assigned to the importer pursuant to such paragraph.
(D) Rules for refunds within 90 days
For purposes of refunds allowed under this paragraph, section 6611(e) shall be applied by substituting "90 days" for "45 days" each place it appears.
(8) Regulations
The Secretary may prescribe such regulations as may be necessary to carry out the purposes of this subsection, including regulations to ensure proper calculation of the credit provided in this subsection.
(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.
(h) Mead and low alcohol by volume wine
(1) In general
For purposes of subsections (a) and (b)(1), mead and low alcohol by volume wine shall be deemed to be still wines containing not more than 16 percent of alcohol by volume.
(2) Definitions
(A) Mead
For purposes of this section, the term "mead" means a wine—
(i) 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,
(ii) which is derived solely from honey and water,
(iii) which contains no fruit product or fruit flavoring, and
(iv) which contains less than 8.5 percent alcohol by volume.
(B) Low alcohol by volume wine
For purposes of this section, the term "low alcohol by volume wine" means a wine—
(i) 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,
(ii) which is derived—
(I) primarily from grapes, or
(II) from grape juice concentrate and water,
(iii) which contains no fruit product or fruit flavoring other than grape, and
(iv) which contains less than 8.5 percent alcohol by volume.
(Added
Editorial Notes
Codification
Prior Provisions
A prior section 5041, acts Aug. 16, 1954, ch. 736,
Amendments
2020—Subsec. (b)(1), (2).
Subsec. (c).
Subsec. (c)(1).
Subsec. (c)(1)(A).
Subsec. (c)(2) to (5).
Subsec. (c)(6).
Subsec. (c)(6)(A).
Subsec. (c)(6)(B).
Subsec. (c)(6)(C).
Subsec. (c)(7).
"(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."
Subsec. (c)(8).
Subsec. (c)(9).
Subsec. (h)(2)(A)(i), (B)(i).
Subsec. (h)(3).
2019—Subsec. (b)(1), (2).
Subsec. (c)(8).
Subsec. (c)(8)(A).
Subsec. (c)(8)(C).
Subsec. (h)(3).
2017—Subsec. (a).
Subsec. (b)(1), (2).
Subsec. (c)(4).
Subsec. (c)(8).
Subsec. (c)(8)(A).
Subsec. (c)(9).
Subsec. (h).
2015—Subsec. (b)(6).
Subsec. (g).
1998—Subsec. (b)(6).
1997—Subsec. (b)(6).
Subsec. (c)(1).
1996—Subsec. (c)(6), (7).
"(6)
1990—Subsec. (b)(1).
Subsec. (b)(2).
Subsec. (b)(3).
Subsec. (b)(5).
Subsecs. (c) to (f).
1988—Subsecs. (d), (e).
1976—Subsec. (a).
1974—Subsec. (a).
1965—Subsec. (a).
Subsec. (b).
1964—Subsec. (b).
1963—Subsec. (b).
1962—Subsec. (b).
1961—Subsec. (b).
1960—Subsec. (b).
1959—Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 2020 Amendment
Effective Date of 2019 Amendment
Effective Date of 2017 Amendment
Effective Date of 2015 Amendment
Effective Date of 1998 Amendment
Amendment by
Effective Date of 1997 Amendment
Effective Date of 1996 Amendment
Amendment by
Effective Date of 1990 Amendment
Amendment by
Effective Date of 1988 Amendment
Effective Date of 1974 Amendment
Effective Date of 1965 Amendment
Amendment by section 501(c) of
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
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
1 See Codification note below.
§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
Editorial Notes
Prior Provisions
A prior section 5042, act Aug. 16, 1954, ch. 736,
Amendments
1978—Subsec. (a)(2).
1976—Subsec. (a)(1) to (3).
Statutory Notes and Related Subsidiaries
Effective Date of 1978 Amendment
§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
Editorial Notes
Prior Provisions
A prior section 5043, act Aug. 16, 1954, ch. 736,
Amendments
1998—Subsec. (a)(2).
1979—Subsec. (a)(1)(A).
1976—Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 1998 Amendment
Amendment by
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by
§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
Editorial Notes
Prior Provisions
A prior section 5044, act Aug. 16, 1954, ch. 736,
Amendments
1998—Subsec. (a).
1997—
Subsec. (a).
1976—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 1998 Amendment
Amendment by
Effective Date of 1997 Amendment
§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
Editorial Notes
Prior Provisions
A prior section 5045, act Aug. 16, 1954, ch. 736,
Subpart D—Beer
Editorial Notes
Prior Provisions
A prior subpart D, comprising
§5051. Imposition and rate of tax
(a) Rate of tax
(1) In general
(A) Imposition of tax
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—
(i) $16 on the first 6,000,000 barrels of beer—
(I) brewed by the brewer and removed during the calendar year for consumption or sale, or
(II) imported by the importer into the United States during the calendar year but only if the importer is an electing importer under paragraph (4) and the barrels have been assigned to the importer pursuant to such paragraph, and
(ii) $18 on any barrels of beer to which clause (i) does not apply.
(B) Barrel
For purposes of this section, a barrel shall contain not more than 31 gallons of beer, and any tax imposed under this section shall be applied at a like rate for any other quantity or for fractional parts of a barrel.
(2) Reduced rate for certain domestic production
(A) $3.50 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 $3.50 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) 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.
(4) Reduced tax rate for foreign manufacturers and importers
(A) In general
In the case of any barrels of beer which have been brewed or produced outside of the United States and imported into the United States, the rate of tax applicable under clause (i) of paragraph (1)(A) (referred to in this paragraph as the "reduced tax rate") may be assigned by the brewer (provided that the brewer makes an election described in subparagraph (B)(ii)) to any electing importer of such barrels pursuant to the requirements established by the Secretary under subparagraph (B).
(B) Assignment
The Secretary, after consultation with the Secretary of the Department of Homeland Security, shall, through such rules, regulations, and procedures as are determined appropriate, establish procedures for assignment of the reduced tax rate provided under this paragraph, which shall include—
(i) a limitation to ensure that the number of barrels of beer for which the reduced tax rate has been assigned by a brewer—
(I) to any importer does not exceed the number of barrels of beer brewed or produced by such brewer during the calendar year which were imported into the United States by such importer, and
(II) to all importers does not exceed the 6,000,000 barrels to which the reduced tax rate applies,
(ii) procedures that allow the election of a brewer to assign and an importer to receive the reduced tax rate provided under this paragraph,
(iii) requirements that the brewer provide any information as the Secretary determines necessary and appropriate for purposes of carrying out this paragraph, and
(iv) procedures that allow for revocation of eligibility of the brewer and the importer for the reduced tax rate provided under this paragraph in the case of any erroneous or fraudulent information provided under clause (iii) which the Secretary deems to be material to qualifying for such reduced rate.
(C) Controlled group
For purposes of this section, any importer making an election described in subparagraph (B)(ii) shall be deemed to be a member of the controlled group of the brewer, as described under paragraph (5).
(5) Controlled group and single taxpayer rules
(A) In general
Except as provided in subparagraph (B), in the case of a controlled group, the 6,000,000 barrel quantity specified in paragraph (1)(A)(i) and the 2,000,000 barrel quantity specified in paragraph (2)(A) shall be applied to the controlled group, and the 6,000,000 barrel quantity specified in paragraph (1)(A)(i) and the 60,000 barrel quantity specified in paragraph (2)(A) shall be apportioned among the brewers who are members of such group in such manner as the Secretary or their delegate shall by regulations prescribe. 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, 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.
(B) Foreign manufacturers and importers
For purposes of paragraph (4), in the case of a controlled group, the 6,000,000 barrel quantity specified in paragraph (1)(A)(i) shall be applied to the controlled group and apportioned among the 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 such term under subparagraph (A). Under regulations prescribed by the Secretary, 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) Single taxpayer
Pursuant to rules issued by the Secretary, two or more entities (whether or not under common control) that produce beer under a license, franchise, or other arrangement shall be treated as a single taxpayer for purposes of the application of this subsection.
(6) Refunds in lieu of reduced rates for foreign production removed after December 31, 2022
(A) In general
In the case of any barrels of beer which have been produced outside the United States and imported into the United States, if such barrels of beer are removed after December 31, 2022—
(i) paragraph (1)(A)(i) shall not apply, and
(ii) the amount determined under subparagraph (B) shall be allowed as a refund, determined for periods not less frequently than quarterly, to the importer in the same manner as if such amount were an overpayment of tax imposed by this section.
(B) Amount of refund
The amount determined under this subparagraph with respect to any importer for any period is an amount equal to the sum of—
(i) excess (if any) of—
(I) the amount of tax imposed under this section on barrels of beer referred to in subparagraph (A) which were removed during such period, over
(II) the amount of tax which would have been imposed under this section on such barrels of beer if this section were applied without regard to this paragraph, plus
(ii) the amount of interest which would be allowed and paid on an overpayment of tax at the overpayment rate established under section 6621(a)(1) (without regard to the second sentence thereof) were such rate applied to the excess (if any) determined under clause (i) for the number of days in the filing period for which the refund under this paragraph is being determined.
(C) Application of rules related to elections and assignments
Subparagraph (A)(ii) shall apply only if the importer is an electing importer under paragraph (4) and the barrels of beer have been assigned to the importer pursuant to such paragraph.
(D) Rules for refunds within 90 days
For purposes of refunds allowed under this paragraph, section 6611(e) shall be applied by substituting "90 days" for "45 days" each place it appears.
(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
Editorial Notes
Prior Provisions
A prior section 5051, act Aug. 16, 1954, ch. 736,
Amendments
2020—Subsec. (a)(1).
Subsec. (a)(1)(A)(i)(II).
Subsec. (a)(2)(A).
Subsec. (a)(4)(A).
Subsec. (a)(4)(B).
Subsec. (a)(5).
Subsec. (a)(5)(C).
Subsec. (a)(6).
2019—Subsec. (a)(1)(C), (2)(A).
2017—Subsec. (a)(1).
Subsec. (a)(1)(C)(i)(II).
Subsec. (a)(2)(A).
Subsec. (a)(2)(B), (C).
Subsec. (a)(4).
Subsec. (a)(5).
1990—Subsec. (a)(1).
Subsec. (a)(2)(C).
1978—Subsec. (c).
1976—Subsec. (a).
1965—Subsec. (a).
1964—Subsec. (a).
1963—Subsec. (a).
1962—Subsec. (a).
1961—Subsec. (a).
1960—Subsec. (a).
1959—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 2020 Amendment
Amendment by section 110(a) of
Effective Date of 2019 Amendment
Effective Date of 2017 Amendment
Effective Date of 1990 Amendment
Amendment by
Effective Date of 1978 Amendment
Amendment by
Effective Date of 1976 Amendment
Effective Date of 1965 Amendment
Amendment by
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
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
§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
Editorial Notes
Prior Provisions
A prior section 5052, act Aug. 16, 1954, ch. 736,
Amendments
2005—Subsec. (d).
1971—Subsec. (c)(2).
Statutory Notes and Related Subsidiaries
Effective Date of 2005 Amendment
Amendment by
Effective Date of 1971 Amendment
Amendment by
§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 (
(Added
Editorial Notes
Prior Provisions
A prior section 5053, act Aug. 16, 1954, ch. 736,
Amendments
1997—Subsec. (f).
Subsec. (g).
Subsec. (h).
Subsec. (i).
1978—Subsecs. (e), (f).
1976—Subsecs. (a) to (d).
1971—Subsecs. (d), (e).
1965—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 1997 Amendment
Effective Date of 1978 Amendment
Amendment by
Effective Date of 1971 Amendment
Amendment by
Effective Date of 1965 Amendment
Amendment by
§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 section 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
Editorial Notes
Prior Provisions
A prior section 5054, act Aug. 16, 1954, ch. 736,
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,
Amendments
2018—Subsec. (a)(3)(B).
1998—Subsec. (a)(1).
Subsec. (a)(2).
1988—Subsec. (a)(2).
1986—Subsec. (a)(2).
1978—Subsec. (a)(3).
1976—Subsec. (a)(2).
Subsecs. (c), (d).
Statutory Notes and Related Subsidiaries
Effective Date of 1998 Amendment
Amendment by
Effective Date of 1988 Amendment
Amendment by
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1978 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by section 1905(a)(5) of
§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 (
(Added
Editorial Notes
Prior Provisions
A prior section 5055, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5056, act Aug. 16, 1954, ch. 736,
Amendments
1997—
1976—
Statutory Notes and Related Subsidiaries
Effective Date of 1997 Amendment
§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
Editorial Notes
Prior Provisions
A prior section 5056, act Aug. 16, 1954, ch. 736,
A prior section 5057, act Aug. 16, 1954, ch. 736,
Amendments
1998—Subsecs. (a) to (c).
1997—Subsec. (c).
Subsec. (d).
1976—Subsecs. (a), (b).
1971—Subsec. (a).
Subsec. (b).
Subsec. (c).
Statutory Notes and Related Subsidiaries
Effective Date of 1998 Amendment
Amendment by
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1971 Amendment
Subpart E—General Provisions
Editorial Notes
Prior Provisions
A prior subpart E, comprising sections 5061 to 5065, related to general provisions, prior to the general revision of this chapter by
Amendments
2020—
1978—
1971—
1965—
1 So in original. Does not conform to section catchline.
§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
Editorial Notes
Prior Provisions
A prior section 5061, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising subsec. (d) of this section were contained in former section 5001(c), act Aug. 16, 1954, ch. 736,
Amendments
2015—Subsec. (d)(4)(A).
Subsec. (d)(4)(B).
2005—Subsec. (d)(4) to (6).
1996—Subsec. (b)(3).
1994—Subsec. (b)(1).
Subsec. (d)(4).
Subsec. (d)(5).
1990—Subsec. (b)(3).
1988—Subsec. (d)(2)(A), (B), (3).
1986—Subsec. (d).
Subsec. (e)(3).
1984—Subsec. (e).
1979—Subsec. (a).
Subsec. (b).
Subsec. (d).
1976—Subsec. (a).
Subsec. (b).
Subsec. (c).
Subsec. (d).
Statutory Notes and Related Subsidiaries
Effective Date of 2015 Amendment
Effective Date of 2005 Amendment
Effective Date of 1996 Amendment
Amendment by
Effective Date of 1994 Amendment
Amendment by section 136(c)(5) of
Effective Date of 1990 Amendment
Amendment by section 11201(b)(3) of
Effective Date of 1988 Amendment
Effective Date of 1986 Amendments
Amendment by
"(1)
"(2)
"(3)
"(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)
"(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
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by section 1905(a)(6), (b)(2)(E)(iii) of
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
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
Transitional Rules Relating to Determination and Payment of Tax
"(a)
"(b)
"(1)
"(2)
"(3)
"(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)
"(c)
"(1)
"(2)
"(d)
"(e)
"(f)
§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
Editorial Notes
Prior Provisions
A prior section 5062, act Aug. 16, 1954, ch. 736,
Amendments
1984—Subsec. (b).
1977—Subsec. (b).
1976—Subsecs. (a), (b), (c)(1).
1968—Subsec. (b).
1965—Subsec. (c)(1).
1964—Subsec. (c).
Statutory Notes and Related Subsidiaries
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1977 Amendment
Amendment by
Effective Date of 1968 Amendment
Amendment by
Effective Date of 1965 Amendment
Amendment by
Effective Date of 1964 Amendment
[§5063. Repealed. Pub. L. 89–44, title V, §501(e), June 21, 1965, 79 Stat. 150 ]
Section,
A prior section 5063, act Aug. 16, 1954, ch. 736,
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal applicable on and after July 1, 1965, see section 701(d) of
§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
Editorial Notes
References in Text
The Robert T. Stafford Disaster Relief and Emergency Assistance Act, referred to in subsec. (b)(3), is
Prior Provisions
A prior section 5064, act Aug. 16, 1954, ch. 736,
Amendments
2004—Subsec. (b)(3).
1988—Subsec. (b)(3).
1979—
1978—
Subsec. (a).
Subsec. (b).
1976—Subsecs. (a) to (c).
1974—Subsec. (a).
1970—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1978 Amendment
Effective Date of 1974 Amendment
Amendment by
Effective Date of 1970 Amendment
Amendment by
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
Exception to Effective Date
Beer Lost by Reason of Floods of 1951 or Hurricanes of 1954
Losses of Alcoholic Liquors Caused by Disaster
§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
Editorial Notes
Prior Provisions
A prior section 5065, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in former section 5064, act Aug. 16, 1954, ch. 736,
§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)(4) 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
Editorial Notes
Prior Provisions
A prior section 5066 was renumbered 5068 of this title.
Amendments
2018—Subsec. (d).
1984—Subsec. (a)(2).
1979—Subsec. (a)(1).
Subsec. (b).
1977—Subsec. (a)(1).
1976—Subsecs. (a), (b).
Statutory Notes and Related Subsidiaries
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1977 Amendment
Amendment by
Effective Date
§5067. Reduced rates not allowed for smuggled or illegally produced beer, wine, or spirits
In the case of beer, wine, or distilled spirits that are smuggled into the United States or produced other than as authorized by this chapter—
(1) the rates of tax under paragraphs (1)(A)(i) and (2) of section 5051(a) shall not apply in the case of any such beer,
(2) the credit under section 5041(c) shall not apply in the case of any such wine, and
(3) the rates of tax under section 5001(c) shall not apply in the case of any such distilled spirits.
(Added
Editorial Notes
Prior Provisions
A prior section 5067 was renumbered
Statutory Notes and Related Subsidiaries
Effective Date
§5068. Cross reference
For general administrative provisions applicable to the assessment, collection, refund, etc., of taxes, see subtitle F.
(Added
Editorial Notes
Prior Provisions
Provisions similar to those comprising this section were contained in former section 5065, act Aug. 16, 1954, ch. 736,
A prior section 5081, added
Another prior section 5081, added
Another prior section 5081, act Aug. 16, 1954, ch. 736,
A prior section 5082, added
Another prior section 5082, act Aug. 16, 1954, ch. 736,
A prior section 5083, added
Another prior section 5083, act Aug. 16, 1954, ch. 736,
A prior section 5084, added
Another prior section 5084, act Aug. 16, 1954, ch. 736,
A prior section 5091, added
Another prior section 5091, act Aug. 16, 1954, ch. 736,
A prior section 5092, added
Another prior section 5092, act Aug. 16, 1954, ch. 736,
A prior section 5093, added
Another prior section 5093, act Aug. 16, 1954, ch. 736,
PART II—MISCELLANEOUS PROVISIONS
Editorial Notes
Prior Provisions
A prior part II, consisting of subparts A to G, related to occupational tax, prior to the general revision of this chapter by
Amendments
2018—
2005—
1987—
1979—
1 So in original. Probably should be followed by a period.
Subpart A—Manufacturers of Stills
Editorial Notes
Prior Provisions
A prior subpart A, consisting of
Another prior subpart A, consisting of
Amendments
2005—
§5101. Notice of manufacture of still; notice of set up of still
(a) Notice requirements
(1) Notice of manufacture of still
The Secretary may, pursuant to regulations, require any person who manufactures any still, boiler, or other vessel to be used for the purpose of distilling, to give written notice, before the still, boiler, or other vessel is removed from the place of manufacture, setting forth by whom it is to be used, its capacity, and the time of removal from the place of manufacture.
(2) Notice of set up of still
The Secretary may, pursuant to regulations, require that no still, boiler, or other vessel be set up without the manufacturer of the still, boiler, or other vessel first giving written notice to the Secretary of that purpose.
(b) Penalties, etc.
(1) For penalty and forfeiture for failure to give notice of manufacture, or for setting up a still without first giving notice, when required by the Secretary, see sections 5615(2) and 5687.
(2) For penalty and forfeiture for failure to register still or distilling apparatus when set up, see section 5601(a)(1) and 5615(1).
(Added
Editorial Notes
Prior Provisions
A prior section 5101, added
Another prior section 5101, act Aug. 16, 1954, ch. 736,
Statutory Notes and Related Subsidiaries
Effective Date
"(a)
"(b)
"(c)
"(d)
§5102. Definition of manufacturer of stills
Any person who manufactures any still or condenser to be used in distilling shall be deemed a manufacturer of stills.
(Added
Editorial Notes
Prior Provisions
A prior section 5102, added
Another prior section 5102, act Aug. 16, 1954, ch. 736,
A prior section 5103, added
Another prior section 5103, act Aug. 16, 1954, ch. 736,
A prior section 5104, added
Another prior section 5104, act Aug. 16, 1954, ch. 736,
A prior section 5105, added
Another prior section 5105, act Aug. 16, 1954, ch. 736,
A prior section 5106, added
Another prior section 5106, act Aug. 16, 1954, ch. 736,
Statutory Notes and Related Subsidiaries
Effective Date
Section effective on first day of first calendar month which begins more than 90 days after July 18, 1984, see section 456(a) of
Subpart B—Nonbeverage Domestic Drawback Claimants
Editorial Notes
Prior Provisions
A prior subpart B, consisting of sections 5091 to 5093, related to brewers, prior to repeal by
Another prior subpart B, consisting of sections 5091 to 5093, related to brewers, prior to the general revision of this chapter by
Amendments
2005—
1997—
§5111. Eligibility
Any person using distilled spirits on which the tax has been determined, in the manufacture or production of medicines, medicinal preparations, food products, flavors, flavoring extracts, or perfume, which are unfit for beverage purposes shall be eligible for drawback at the time when such distilled spirits are used in the manufacture of such products as provided for in this subpart.
(Added
Editorial Notes
Prior Provisions
A prior section 5111, added
Another prior section 5111, act Aug. 16, 1954, ch. 736,
Amendments
2005—
Subsec. (a).
1994—Subsec. (a).
1987—Subsec. (b).
1976—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 2005 Amendment
Amendment by
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1987 Amendment
"(1)
"(2)
"(A)
"(B)
"(i) the rate of such tax as in effect on January 1, 1988, over
"(ii) the rate of such tax as in effect on December 31, 1987.
"(C)
"(D)
Effective Date of 1976 Amendment
Amendment by
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
§5112. Registration and regulation
Every person claiming drawback under this subpart shall register annually with the Secretary; keep such books and records as may be necessary to establish the fact that distilled spirits received by him and on which the tax has been determined were used in the manufacture or production of medicines, medicinal preparations, food products, flavors, flavoring extracts, or perfume, which were unfit for use for beverage purposes; and be subject to such rules and regulations in relation thereto as the Secretary shall prescribe to secure the Treasury against frauds.
(Added
Editorial Notes
Prior Provisions
A prior section 5112, added
Another prior section 5112, act Aug. 16, 1954, ch. 736,
Amendments
2005—
1994—
1976—
Statutory Notes and Related Subsidiaries
Effective Date of 1994 Amendment
Amendment by
§5113. Investigation of claims
For the purpose of ascertaining the correctness of any claim filed under this subpart, the Secretary is authorized to examine any books, papers, records, or memoranda bearing upon the matters required to be alleged in the claim, to require the attendance of the person filing the claim or of any officer or employee of such person or the attendance of any other person having knowledge in the premises, to take testimony with reference to any matter covered by the claim, and to administer oaths to any person giving such testimony.
(Added
Editorial Notes
Prior Provisions
A prior section 5113, added
Another prior section 5113, act Aug. 16, 1954, ch. 736,
Amendments
2005—
1976—
§5114. Drawback
(a) Rate of drawback
In the case of distilled spirits on which the tax has been paid or determined, and which have been used as provided in this subpart, a drawback shall be allowed on each proof gallon at a rate of $1 less than the rate at which the distilled spirits tax has been paid or determined.
(b) Claims
Such drawback shall be due and payable quarterly upon filing of a proper claim with the Secretary; except that, where any person entitled to such drawback shall elect in writing to file monthly claims therefor, such drawback shall be due and payable monthly upon filing of a proper claim with the Secretary. The Secretary may require persons electing to file monthly drawback claims to file with him a bond or other security in such amount and with such conditions as he shall by regulations prescribe. Any such election may be revoked on filing of notice thereof with the Secretary. No claim under this subpart shall be allowed unless filed with the Secretary within the 6 months next succeeding the quarter in which the distilled spirits covered by the claim were used as provided in this subpart.
(c) Allowance of drawback even where certain requirements not met
(1) In general
No claim for drawback under this section shall be denied in the case of a failure to comply with any requirement imposed under this subpart or any rule or regulation issued thereunder upon the claimant's establishing to the satisfaction of the Secretary that distilled spirits on which the tax has been paid or determined were in fact used in the manufacture or production of medicines, medicinal preparations, food products, flavors, flavoring extracts, or perfume, which were unfit for beverage purposes.
(2) Penalty
(A) In general
In the case of a failure to comply with any requirement imposed under this subpart or any rule or regulation issued thereunder, the claimant shall be liable for a penalty of $1,000 for each failure to comply unless it is shown that the failure to comply was due to reasonable cause.
(B) Penalty may not exceed amount of claim
The aggregate amount of the penalties imposed under subparagraph (A) for failures described in paragraph (1) in respect of any claim shall not exceed the amount of such claim (determined without regard to subparagraph (A)).
(3) Penalty treated as tax
The penalty imposed by paragraph (2) shall be assessed, collected, and paid in the same manner as taxes, as provided in section 6665(a).
(Added
Editorial Notes
Prior Provisions
A prior section 5114 was renumbered
Another prior section 5114, act Aug. 16, 1954, ch. 736,
A prior section 5115, added
Another prior section 5115, act Aug. 16, 1954, ch. 736,
A prior section 5116 was renumbered
Another prior section 5116, act Aug. 16, 1954, ch. 736,
A prior section 5117, added
Amendments
2005—
1996—Subsec. (c)(3).
1994—Subsec. (c)(1).
1984—Subsec. (c).
1976—
1968—Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1968 Amendment
Subpart C—Recordkeeping and Registration by Dealers
Editorial Notes
Prior Provisions
A prior subpart C was redesignated subpart A of this part.
Another prior subpart C, consisting of sections 5101 to 5106, related to manufacturers of stills, prior to the general revision of this subpart by
Another prior subpart C, consisting of sections 5101 to 5106, related to manufacturers of stills, prior to the general revision of this chapter by
Amendments
2005—
§5121. Recordkeeping by wholesale dealers
(a) Requirements
(1) Distilled spirits
Every wholesale dealer in liquors who sells distilled spirits to other dealers shall keep daily a record of distilled spirits received and disposed of by him, in such form and at such place and containing such information, and shall submit correct summaries of such records to the Secretary at such time and in such form and manner, as the Secretary shall by regulations prescribe. Such dealer shall also submit correct extracts from or copies of such records, at such time and in such form and manner as the Secretary may by regulations prescribe; however, the Secretary may on application by such dealer, in accordance with such regulations, relieve him from this requirement until further notice, whenever the Secretary deems that the submission of such extracts or copies serves no useful purpose in law enforcement or in protection of the revenue.
(2) Wines and beer
Every wholesale dealer in liquors and every wholesale dealer in beer shall provide and keep, at such place as the Secretary shall by regulations prescribe, a record in book form of all wines and beer received, showing the quantities thereof and from whom and the dates received, or shall keep all invoices of, and bills for, all wines and beer received.
(b) Exemption of States, political subdivisions, etc.
The provision of subsection (a) shall not apply to a State, to a political subdivision of a State, to the District of Columbia, or to liquor stores operated by any of them, if they maintain and make available for inspection by internal revenue officers such records as will enable such officers to trace all distilled spirits, wines, and beer received, and all distilled spirits disposed of by them. Such States, subdivisions, District, or liquor stores shall, upon the request of the Secretary, furnish him such transcripts, summaries and copies of their records with respect to distilled spirits as he shall require.
(c) Wholesale dealers
For purposes of this part—
(1) Wholesale dealer in liquors
The term "wholesale dealer in liquors" means any dealer (other than a wholesale dealer in beer) who sells, or offers for sale, distilled spirits, wines, or beer, to another dealer.
(2) Wholesale dealer in beer
The term "wholesale dealer in beer" means any dealer who sells, or offers for sale, beer, but not distilled spirits or wines, to another dealer.
(3) Dealer
The term "dealer" means any person who sells, or offers for sale, any distilled spirits, wines, or beer.
(4) Presumption in case of sale of 20 wine gallons or more
The sale, or offer for sale, of distilled spirits, wines, or beer, in quantities of 20 wine gallons or more to the same person at the same time, shall be presumptive evidence that the person making such sale, or offer for sale, is engaged in or carrying on the business of a wholesale dealer in liquors or a wholesale dealer in beer, as the case may be. Such presumption may be overcome by evidence satisfactorily showing that such sale, or offer for sale, was made to a person other than a dealer.
(d) Cross references
(1) For provisions requiring proprietors of distilled spirits plants to keep records and submit reports of receipts and dispositions of distilled spirits, see section 5207.
(2) For penalty for violation of subsection (a), see section 5603.
(3) For provisions relating to the preservation and inspection of records, and entry of premises for inspection, see section 5123.
(Added
Editorial Notes
Prior Provisions
A prior section 5121, added
Another prior section 5121, act Aug. 16, 1954, ch. 736,
Amendments
2007—
2005—
Subsecs. (c), (d).
Subsec. (d)(3).
1976—Subsec. (a).
Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 2005 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by section 1905(c)(1) of
§5122. Recordkeeping by retail dealers
(a) Receipts
Every retail dealer in liquors and every retail dealer in beer shall provide and keep in his place of business a record in book form of all distilled spirits, wines, and beer received, showing the quantity thereof and from whom and the dates received, or shall keep all invoices of, and bills for, all distilled spirits, wines, and beer received.
(b) Dispositions
When he deems it necessary for law enforcement purposes or the protection of the revenue, the Secretary may by regulations require retail dealers in liquors and retail dealers in beer to keep records of the disposition of distilled spirits, wines, or beer, in such form or manner and of such quantities as the Secretary may prescribe.
(c) Retail dealers
For purposes of this section—
(1) Retail dealer in liquors
The term "retail dealer in liquors" means any dealer (other than a retail dealer in beer or a limited retail dealer) who sells, or offers for sale, distilled spirits, wines, or beer, to any person other than a dealer.
(2) Retail dealer in beer
The term "retail dealer in beer" means any dealer (other than a limited retail dealer) who sells, or offers for sale, beer, but not distilled spirits or wines, to any person other than a dealer.
(3) Limited retail dealer
The term "limited retail dealer" means any fraternal, civic, church, labor, charitable, benevolent, or ex-servicemen's organization making sales of distilled spirits, wine or beer on the occasion of any kind of entertainment, dance, picnic, bazaar, or festival held by it, or any person making sales of distilled spirits, wine or beer to the members, guests, or patrons of bona fide fairs, reunions, picnics, carnivals, or other similar outings, if such organization or person is not otherwise engaged in business as a dealer.
(4) Dealer
The term "dealer" has the meaning given such term by section 5121(c)(3).
(d) Cross references
For provisions relating to the preservation and inspection of records, and entry of premises for inspection, see section 5123.
(Added
Editorial Notes
Prior Provisions
A prior section 5122, added
Another prior section 5122, act Aug. 16, 1954, ch. 736,
Amendments
2005—
Subsec. (c).
Subsec. (d).
1976—Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 2005 Amendment
Amendment by
§5123. Preservation and inspection of records, and entry of premises for inspection
(a) Preservation and inspection of records
Any records or other documents required to be kept under this part or regulations issued pursuant thereto shall be preserved by the person required to keep such records or documents, as the Secretary may by regulations prescribe, and shall be kept available for inspection by any internal revenue officer during business hours.
(b) Entry of premises for inspection
The Secretary may enter during business hours the premises (including places of storage) of any dealer for the purpose of inspecting or examining any records or other documents required to be kept by such dealer under this chapter or regulations issued pursuant thereto and any distilled spirits, wines, or beer kept or stored by such dealer on such premises.
(Added
Editorial Notes
Prior Provisions
A prior section 5123, added
Another prior section 5123, act Aug. 16, 1954, ch. 736,
Amendments
2005—
1976—
§5124. Registration by dealers
Every dealer who is subject to the recordkeeping requirements under section 5121 or 5122 shall register with the Secretary such dealer's name or style, place of residence, trade or business, and the place where such trade or business is to be carried on. In the case of a firm or company, the names of the several persons constituting the same, and the places of residence, shall be so registered.
(Added
Editorial Notes
Prior Provisions
A prior section 5124 was renumbered
Another prior section 5124, act Aug. 16, 1954, ch. 736,
A prior section 5125, added
Statutory Notes and Related Subsidiaries
Effective Date
Section effective July 1, 2008, but inapplicable to taxes imposed for periods before such date, see section 11125(c) of
Subpart D—Other Provisions
Editorial Notes
Prior Provisions
A prior subpart D, consisting of sections 5111 to 5117, related to wholesale dealers in liquors or beer, prior to repeal, except for sections 5114 and 5116, by
Another prior subpart D, consisting of sections 5111 to 5116, related to wholesale dealers, prior to the general revision of this chapter by
A prior subpart E, consisting of sections 5121 to 5125, related to retail dealers, prior to repeal, except for section 5124, by
Another prior subpart E, consisting of sections 5121 to 5124, related to retail dealers, prior to the general revision of this chapter by
A prior subpart F was redesignated subpart B of this part.
Another prior subpart F, consisting of sections 5131 to 5134, related to nonbeverage domestic drawback claimants, prior to the general revision of this chapter by
A prior subpart G, consisting of sections 5141 to 5149, related to general provisions, prior to repeal, except for sections 5142, 5143, 5145, and 5146, by
Another prior subpart G, consisting of sections 5141 to 5149, related to general provisions, prior to the general revision of this chapter by
Amendments
2005—
§5131. Packaging distilled spirits for industrial uses
(a) General
The Secretary may, at his discretion and under such regulations as he may prescribe, authorize a dealer (as defined in section 5121(c)) engaging in the business of supplying distilled spirits for industrial uses to package distilled spirits, on which the tax has been paid or determined, for such uses in containers of a capacity in excess of 1 wine gallon and not more than 5 wine gallons.
(b) Cross reference
For provisions relating to containers of distilled spirits, see section 5206.
(Added
Editorial Notes
Prior Provisions
A prior section 5131 was renumbered
Another prior section 5131, act Aug. 16, 1954, ch. 736,
Amendments
2005—
Subsec. (a).
1984—Subsec. (b).
1979—Subsec. (b)(1).
1976—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 2005 Amendment
Amendment by
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1979 Amendment
Amendment by
§5132. Prohibited purchases by dealers
(a) In general
Except as provided in regulations prescribed by the Secretary, it shall be unlawful for a dealer to purchase distilled spirits for resale from any person other than a wholesale dealer in liquors who is required to keep the records prescribed by section 5121.
(b) Limited retail dealers
A limited retail dealer may lawfully purchase distilled spirits for resale from a retail dealer in liquors.
(c) Penalty and forfeiture
For penalty and forfeiture provisions applicable to violations of subsection (a), see sections 5687 and 7302.
(Added
Editorial Notes
Prior Provisions
A prior section 5132 was renumbered
Another prior section 5132, act Aug. 16, 1954, ch. 736,
A prior section 5133 was renumbered
Another prior section 5133, act Aug. 16, 1954, ch. 736,
A prior section 5134 was renumbered
Another prior section 5134, acts Aug. 16, 1954, ch. 736,
A prior section 5141, added
Another prior section 5141, act Aug. 16, 1954, ch. 736,
A prior section 5142 was renumbered
Another prior section 5142, act Aug. 16, 1954, ch. 736,
A prior section 5143 was renumbered
Another prior section 5143, act Aug. 16, 1954, ch. 736,
A prior section 5144, added
Another prior section 5144, act Aug. 16, 1954, ch. 736,
A prior section 5145 was renumbered
Another prior section 5145, act Aug. 16, 1954, ch. 736,
A prior section 5146 was renumbered
Another prior section 5146, act Aug. 16, 1954, ch. 736,
A prior section 5147, added
Another prior section 5147, act Aug. 16, 1954, ch. 736,
A prior section 5148, added
Another prior section 5148 was renumbered
Another prior section 5148, act Aug. 16, 1954, ch. 736,
A prior section 5149, added
Another prior section 5149, act Aug. 16, 1954, ch. 736,
Statutory Notes and Related Subsidiaries
Effective Date
Section effective July 1, 2008, but inapplicable to taxes imposed for periods before such date, see section 11125(c) of
Subchapter B—Qualification Requirements for Distilled Spirits Plants
Editorial Notes
Prior Provisions
A prior subchapter B, Distilleries, consisted of part I, Establishment, part II, Operation, and part III, General Provisions Relating to Distilleries and Distilled Spirits, and consisted of sections 5171 to 5180, 5191 to 5197, and 5211 to 5217, respectively, prior to the general revision of this chapter by
Amendments
2018—
1980—
1979—
§5171. Establishment
(a) Certain operations may be conducted only on bonded premises
Except as otherwise provided by law, operations as a distiller, warehouseman, or processor may be conducted only on the bonded premises of a distilled spirits plant by a person who is qualified under this subchapter.
(b) Establishment of distilled spirits plant
A distilled spirits plant may be established only by a person who intends to conduct at such plant operations as a distiller, as a warehouseman, or as both.
(c) Registration
(1) In general
Each person shall, before commencing operations at a distilled spirits plant (and at such other times as the Secretary may by regulations prescribe), make application to the Secretary for, and receive notice of, the registration of such plant.
(2) Application required where new operations are added
No operation in addition to those set forth in the application made pursuant to paragraph (1) may be conducted at a distilled spirits plant until the person has made application to the Secretary for, and received notice of, the registration of such additional operation.
(3) Secretary may establish minimum capacity and level of activity requirements
The Secretary may by regulations prescribe for each type of operation minimum capacity and level of activity requirements for qualifying premises as a distilled spirits plant.
(4) Applicant must comply with law and regulations
No plant (or additional operation) shall be registered under this section until the applicant has complied with the requirements of law and regulations in relation to the qualification of such plant (or additional operation).
(d) Permits
(1) Requirements
Each person required to file an application for registration under subsection (c) whose distilled spirits operations (or any part thereof) are not required to be covered by a basic permit under the Federal Alcohol Administration Act (27 U.S.C. secs. 203 and 204) shall, before commencing the operations (or part thereof) not so covered, apply for and obtain a permit under this subsection from the Secretary to engage in such operations (or part thereof). Subsections (b), (c), (d), (e), (f), (g), and (h) of section 5271 are hereby made applicable to persons filing applications and permits required by or issued under this subsection.
(2) Exceptions for agencies of a State or political subdivisions
Paragraph (1) shall not apply to any agency of a State or political subdivision thereof or to any officer or employee of any such agency, and no such agency, officer, or employee shall be required to obtain a permit thereunder.
(e) Cross references
(1) For penalty for failure of a distiller or processor to file application for registration as required by this section, see section 5601(a)(2).
(2) For penalty for the filing of a false application by a distiller, warehouseman, or processor of distilled spirits, see section 5601(a)(3).
(Added
Editorial Notes
References in Text
The Federal Alcohol Administration Act, referred to in subsec. (d)(1), is act Aug. 29, 1935, ch. 814,
Prior Provisions
A prior section 5171, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising subsecs. (a), (b)(1) and (c) of this section were contained in prior sections of act Aug. 16, 1954, prior to the general revision of this chapter by
| Present subsecs.: | Prior sections |
|---|---|
| (a) | 5172, 5175(a), 5177(a), 5178, 5231, 5243(a), 5271(a), 5301–5303, 5305, 5331(a)(1). |
| (b)(1) | 5301–5303, 5304(a)(1). |
| (c) | 5175(b), 5271(b). |
The prior sections, act Aug. 16, 1954, ch. 736, are set out in
Amendments
1979—Subsecs. (a), (b).
Subsec. (c).
Subsec. (d).
Subsec. (e).
1976—Subsec. (b)(1).
Subsec. (b)(3).
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by section 1905(a)(13) of
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
Transitional Rules Relating to All-In-Bond Method
"(a)
"(1)
"(2)
"(b)
"(1) the person engaged in operations at such premises is registered under such section with respect to such premises as a distiller or warehouseman, and
"(2) such premises meet the minimum capacity and level of activity requirements for that type of operation."
§5172. Application
The application for registration required by section 5171(c) shall, in such manner and form as the Secretary may by regulations prescribe, identify the applicant and persons interested in the business (or businesses) covered by the application, show the nature, location and extent of the premises, show the specific type or types of operations to be conducted on such premises, and show any other information which the Secretary may by regulations require for the purpose of carrying out the provisions of this chapter.
(Added
Editorial Notes
Prior Provisions
A prior section 5172, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior sections 5175(a), 5178, 5231, 5243(a), 5271, 5301 to 5303, 5305, and 5331(a)(1), act Aug. 16, 1954, ch. 736,
Amendments
1979—
1976—
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
§5173. Bonds
(a) Operations at, and withdrawals from, distilled spirits plant must be covered by bond
(1) Operations
Except as provided under section 5551(d), no person intending to establish a distilled spirits plant may commence operations at such plant unless such person has furnished bond covering operations at such plant.
(2) Withdrawals
Except as provided under section 5551(d), no distilled spirits (other than distilled spirits withdrawn under section 5214 or 7510) may be withdrawn from bonded premises except on payment of tax unless the proprietor of the bonded premises has furnished bond covering such withdrawal.
(b) Operations bonds
The bond required by paragraph (1) of subsection (a) shall meet the requirements of paragraph (1), (2), or (3) of this subsection:
(1) One plant bond
The bond covers operations at a single distilled spirits plant.
(2) Adjacent wine cellar bond
The bond covers operations at a distilled spirits plant and at an adjacent bonded wine cellar.
(3) Area bond
The bond covers operations at 2 or more distilled spirits plants (and adjacent bonded wine cellars) which—
(A) are located in the same geographical area (as designated in regulations prescribed by the Secretary), and
(B) are operated by the same person (or, in the case of a corporation, by such corporation and its controlled subsidiaries).
(c) Withdrawal bonds
The bond required by paragraph (2) of subsection (a) shall cover withdrawals from 1 or more bonded premises the operations at which could be covered by the same operations bond under subsection (b).
(d) Unit bonds
Under regulations prescribed by the Secretary, the requirements of paragraphs (1) and (2) of subsection (a) shall be treated as met by a unit bond which covers both operations at, and withdrawals from, 1 or more bonded premises which could be covered by the same operations bond under subsection (b).
(e) Terms and conditions
(1) In general
Any bond furnished under this section shall be conditioned that the person furnishing the bond—
(A) will faithfully comply with all provisions of law and regulations relating to the activities covered by such bond, and
(B) will pay—
(i) all taxes imposed by this chapter, and
(ii) all penalties incurred by, or fines imposed on, such person for violation of any such provision.
(2) Other terms and conditions
Any bond furnished under this section shall contain such other terms and conditions as may be required by regulations prescribed by the Secretary.
(f) Amount
(1) In general
The penal sum of any bond shall be the amount determined under regulations prescribed by the Secretary.
(2) Maximum and minimum amount
The Secretary shall by regulations prescribe a minimum amount and a maximum amount for each type of bond which may be furnished under this section.
(g) Total amount available
The total amount of any bond furnished under this section shall be available for the satisfaction of any liability incurred under the terms and conditions of such bond.
(h) Special rules
For purposes of this section—
(1) Withdrawal bonds
In the case of any bond furnished under this section which covers withdrawals but not operations—
(A) such bond shall be in addition to the operations bond, and
(B) if distilled spirits are withdrawn under such bond, the operations bond shall no longer cover liability for payment of the tax on the spirits withdrawn.
(2) Adjacent wine cellars
(A) Requirements
No wine cellar shall be treated as being adjacent to a distilled spirits plant unless—
(i) such distilled spirits plant is qualified under this subchapter for the production of distilled spirits, and
(ii) such wine cellar and the distilled spirits plant are operated by the same person (or, in the case of a corporation, by such corporation and its controlled subsidiaries).
(B) Bond in lieu of wine cellar bond
In the case of any adjacent wine cellar, a bond furnished under this section which covers operations at such wine cellar shall be in lieu of any bond which would otherwise be required under section 5354 with respect to such wine cellar (other than supplemental bonds required under the second sentence of section 5354).
(Added
Editorial Notes
Prior Provisions
A prior section 5173, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising subsecs. (a), (b), (b)(1), (b)(1)(A) to (C), (b)(3), (c), (c)(1), (d) and (e)(1) of this section were contained in prior sections of act Aug. 16, 1954, prior to the general revision of this chapter by
| Present subsecs.: | Prior sections |
|---|---|
| (a) | 5172, 5176(a), 5231, 5232(a), 5272(a), 5301–5303, 5304(a)(5), 5305, 5311(a)(3). |
| (b) | 5176 (a), (d). |
| (b)(1) | 5176(a), 5177(c). |
| (b)(1)(A)–(C) | 5177(b)(1)–(3). |
| (b)(3) | 5177(b)(4). |
| (c) | 5232(a), 5302, 5303, 5306, 5331(a)(3). |
| (c)(1) | 5232(a). |
| (d) | 5272(a). |
| (e)(1) | 5304(a)(5). |
The prior sections, act Aug. 16, 1954, ch. 736, are set out in
Amendments
2015—Subsec. (a)(1).
Subsec. (a)(2).
1979—
1976—
1971—Subsec. (b)(1).
Subsec. (b)(2).
Subsec. (b)(4).
Statutory Notes and Related Subsidiaries
Effective Date of 2015 Amendment
Amendment by
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1971 Amendment
Amendment by
Transitional Rules Relating to All-In-Bond Method
[§5174. Repealed. Pub. L. 96–39, title VIII, §807(a)(14), July 26, 1979, 93 Stat. 282 ]
Section, added
A prior section 5174, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising subsec. (a)(1) of section 5174, added by
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal effective Jan. 1, 1980, see section 810 of
§5175. Export bonds
(a) Requirements
No distilled spirits shall be withdrawn from bonded premises for exportation, or for transfer to a customs bonded warehouse, without payment of tax unless the exporter has furnished bond to cover such withdrawal under such regulations and conditions, and in such form and penal sum, as the Secretary may prescribe.
(b) Exception where proprietor withdraws spirits for exportation
In the case of distilled spirits withdrawn from bonded premises by the proprietor for exportation without payment of tax, the bond of such proprietor required to be furnished under paragraph (1) of section 5173(a) covering such premises shall cover such exportation, and subsection (a) shall not apply.
(c) Cancellation or credit of export bonds
The bonds given under subsection (a) shall be cancelled or credited and the bonds liable under subsection (b) credited if there is such proof of exportation as the Secretary may by regulations require.
(Added
Editorial Notes
Prior Provisions
A prior section 5175, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in a prior section 5247(a), act Aug. 16, 1954, ch. 736,
Amendments
1997—Subsec. (c).
1979—Subsec. (a).
Subsec. (b).
1977—Subsec. (a).
1976—
Statutory Notes and Related Subsidiaries
Effective Date of 1997 Amendment
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1977 Amendment
Amendment by
Continuation of Distiller's Notice and Bond
§5176. New or renewed bonds
(a) General
New bonds shall be required under sections 5173 and 5175 in case of insolvency or removal of any surety, and may, at the discretion of the Secretary, be required in any other contingency affecting the validity or impairing the efficiency of such bond.
(b) Bonds
If the proprietor of a distilled spirits plant fails or refuses to furnish a bond required under paragraph (1) of section 5173(a) or to renew the same, and neglects to immediately withdraw the spirits and pay the tax thereon, the Secretary shall proceed to collect the tax.
(Added
Editorial Notes
Prior Provisions
A prior section 5176(c), act Aug. 16, 1954, ch. 736,
Prior section 5176(a), (b), (d), (e), related to distiller's bond: form and approval; additional bond; exemption from survey requirements; and cross references, prior to the general revision of this chapter by
Provisions similar to those comprising this section were contained in prior section 5232(c), act Aug. 16, 1954, ch. 736,
Amendments
1979—Subsec. (a).
Subsec. (b).
1976—
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
Continuation of Distiller's Notice and Bond
Authority to waive requirements for filing notice and executing new bond on May 1, 1959, if distiller and surety have executed consent to continuation of the terms of existing bond to cover operations from May 1, 1959 to June 30, 1959, see section 210(f) of
§5177. Other provisions relating to bonds
(a) General provisions relating to bonds
The provisions of section 5551 shall be applicable to the bonds required by or given under sections 5173 and 5175.
(b) Cross references
(1) For deposit of United States bonds or notes in lieu of sureties, see
(2) For penalty and forfeiture for failure or refusal to give bond, or for giving false, forged, or fraudulent bond, or carrying on the business of a distiller without giving bond, see sections 5601(a)(4), 5601(a)(5), 5601(b), and 5615(3).
(Added
Editorial Notes
Prior Provisions
A prior section 5177, act Aug. 16, 1954, ch. 736,
Prior section 5177(a) was a general provision. See
Prior section 5177(b)(1) to (3) related to ownership, consent of owner, or indemnity bond. See section 5173(b)(1)(A) to (C) of this title.
Prior section 5177(b)(4) related to judicial sale. See
Prior section 5177(c) related to situation of distillery. See
Prior section 5177(d) was a cross reference to penalty for improper approval of distiller's bond, and to general provisions relating to approval, disapproval and appeal on bonds. See subsec. (a) of this section and
Provisions similar to those comprising subsec. (b) of this section were contained in prior sections 5176(e) and 5232(d), act Aug. 16, 1954, ch. 736,
Amendments
1982—Subsec. (b)(1).
1979—Subsec. (a).
1976—Subsec. (b)(2).
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by
§5178. Premises of distilled spirits plants
(a) Location, construction, and arrangement
(1) General
(A) The premises of a distilled spirits plant shall be as described in the application required by section 5171(c). The Secretary shall prescribe such regulations relating to the location, construction, arrangement, and protection of distilled spirits plants as he deems necessary to facilitate inspection and afford adequate security to the revenue.
(B) No distilled spirits plant for the production of distilled spirits shall be located in any dwelling house, in any shed, yard, or inclosure connected with any dwelling house, or on board any vessel or boat, or on premises where beer or wine is made or produced, or liquors of any description are retailed, or on premises where any other business is carried on (except when authorized under subsection (b)).
(C) Notwithstanding any other provision of this chapter relating to distilled spirits plants the Secretary may approve the location, construction, arrangement, and method of operation of any establishment which was qualified to operate on the date preceding the effective date of this section if he deems that such location, construction, arrangement, and method of operation will afford adequate security to the revenue.
(2) Production operations
(A) Any person establishing a distilled spirits plant may, as described in his application for registration, produce distilled spirits from any source or substance.
(B) The distilling system shall be continuous and shall be so designed and constructed and so connected as to prevent the unauthorized removal of distilled spirits before their production gauge.
(C) The Secretary is authorized to order and require—
(i) such identification of, changes of, and additions to, distilling apparatus, connecting pipes, pumps, tanks, and any machinery connected with or used in or on the premises, and
(ii) such fastenings, locks, and seals to be part of any of the stills, tubs, pipes, tanks, and other equipment, as he may deem necessary to facilitate inspection and afford adequate security to the revenue.
(3) Warehousing operations
(A) Any person establishing a distilled spirits plant for the production of distilled spirits may, as described in the application for registration, warehouse bulk distilled spirits on the bonded premises of such plant.
(B) Distilled spirits plants for the bonded warehousing of bulk distilled spirits elsewhere than as described in subparagraph (A) may be established at the discretion of the Secretary by proprietors referred to in subparagraph (A) or by other persons under such regulations as the Secretary shall prescribe.
(4) Processing operations
Any person establishing a distilled spirits plant may, as described in the application for registration, process distilled spirits on the bonded premises of such plant.
(b) Use of premises for other businesses
The Secretary may authorize the carrying on of such other businesses (not specifically prohibited by section 5601(a)(6)) on premises of distilled spirits plants, as he finds will not jeopardize the revenue. Such other businesses shall not be carried on until an application to carry on such business has been made to and approved by the Secretary.
(c) Cross references
(1) For provisions authorizing the Secretary to require installation of meters, tanks, and other apparatus, see section 5552.
(2) For penalty for distilling on prohibited premises, see section 5601(a)(6).
(3) For provisions relating to the bottling of distilled spirits labeled as alcohol, see section 5235.
(4) For provisions relating to the unauthorized use of distilled spirits in any manufacturing process, see section 5601(a)(9).
(Added
Editorial Notes
Prior Provisions
A prior section 5178, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising subsecs. (a)(1)(A), (B), (2)(A) to (C), (3), (4)(A), (B), (D), (5), (b), (c)(1), (2), (4) of this section were contained in prior sections of act Aug. 16, 1954, prior to the general revision of this chapter by
| Present subsecs.: | Prior sections |
|---|---|
| (a)(1)(A) | 5172, 5173(a), 5231, 5271(a), 5273(a), 5305. |
| (a)(1)(B) | 5171(a). |
| (a)(2)(A) | 5307. |
| (a)(2)(B) | 5173(b). |
| (a)(2)(C) | 5173(a), (c). |
| (a)(3) | 5231, 5243(a), 5302. |
| (a)(4)(A) | 5243(a). |
| (a)(4)(B), (D) | 5271(a), 5273(a). |
| (a)(5) | 5303, 5305, 5331(a)(1). |
| (b) | 5171(a). |
| (c)(1) | 5173(d)(1), 5273(b)(1). |
| (c)(2) | 5171(b). |
| (c)(4) | 5216(b). |
The prior sections, act Aug. 16, 1954, ch. 736, are set out in
Amendments
1979—Subsec. (a)(1)(A).
Subsec. (a)(2).
Subsec. (a)(3).
Subsec. (a)(4).
Subsec. (a)(5).
1977—Subsec. (a)(3)(D).
1976—
1971—Subsec. (a)(4)(A).
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1977 Amendment
Amendment by
Effective Date of 1971 Amendment
Amendment by
§5179. Registration of stills
(a) Requirements
Every person having in his possession or custody, or under his control, any still or distilling apparatus set up, shall register such still or apparatus with the Secretary immediately on its being set up, by subscribing and filing with the Secretary a statement, in writing, setting forth the particular place where such still or distilling apparatus is set up, the kind of still and its capacity, the owner thereof, his place of residence, and the purpose for which said still or distilling apparatus has been or is intended to be used (except that stills or distilling apparatus not used or intended to be used for the distillation, redistillation, or recovery of distilled spirits are not required to be registered under this section).
(b) Cross references
(1) For penalty and forfeiture provisions relating to unregistered stills, see sections 5601(a)(1) and 5615(1).
(2) For provisions requiring notification to set up a still, boiler, or other vessel for distilling, see section 5101(a)(2).
(Added
Editorial Notes
Prior Provisions
A prior section 5179, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior sections 5174 and 5275(2), act Aug. 16, 1954, ch. 736,
Amendments
1984—Subsec. (b)(2).
1976—Subsec. (a).
Subsec. (b)(1).
Statutory Notes and Related Subsidiaries
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by section 1905(b)(6)(C) of
§5180. Signs
(a) Requirements
Every person engaged in distilled spirits operations shall place and keep conspicuously on the outside of his place of business a sign showing the name of such person and denoting the business, or businesses, in which engaged. The sign required by this subsection shall be in such form and contain such information as the Secretary shall by regulations prescribe.
(b) Penalty
For penalty and forfeiture relating to failure to post sign or improperly posting such sign, see section 5681.
(Added
Editorial Notes
Prior Provisions
A prior section 5180, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5274, act Aug. 16, 1954, ch. 736,
Amendments
1979—Subsec. (a).
1976—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
§5181. Distilled spirits for fuel use
(a) In general
(1) Purposes for which plant may be established
On such application and bond and in such manner as the Secretary may prescribe by regulation, a person may establish a distilled spirits plant solely for the purpose of—
(A) producing, processing, and storing, and
(B) using or distributing,
distilled spirits to be used exclusively for fuel use.
(2) Regulations
In prescribing regulations under paragraph (1) and in carrying out the provisions of this section, the Secretary shall, to the greatest extent possible, take steps to—
(A) expedite all applications;
(B) establish a minimum bond; and
(C) generally encourage and promote (through regulation or otherwise) the production of alcohol for fuel purposes.
(b) Authority to exempt
The Secretary may by regulation provide for the waiver of any provision of this chapter (other than this section or any provision requiring the payment of tax) for any distilled spirits plant described in subsection (a) if the Secretary finds it necessary to carry out the provisions of this section.
(c) Special rules for small plant production
(1) Applications
(A) In general
An application for an operating permit for an eligible distilled spirits plant shall be in such a form and manner, and contain such information, as the Secretary may by regulations prescribe; except that the Secretary shall, to the greatest extent possible, take steps to simplify the application so as to expedite the issuance of such permits.
(B) Receipt of application
Within 15 days of receipt of an application under subparagraph (A), the Secretary shall send a written notice of receipt to the applicant, together with a statement as to whether the application meets the requirements of subparagraph (A). If such a notice is not sent and the applicant has a receipt indicating that the Secretary has received an application, paragraph (2) shall apply as if a written notice required by the preceding sentence, together with a statement that the application meets the requirements of subparagraph (A), had been sent on the 15th day after the date the Secretary received the application.
(C) Multiple applications
If more than one application is submitted with respect to any eligible distilled spirits plant in any calendar quarter, the provisions of this section shall apply only to the first application submitted with respect to such plant during such quarter. For purposes of the preceding sentence, if a corrected or amended first application is filed, such application shall not be considered as a separate application, and the 15-day period referred to in subparagraph (A) shall commence with receipt of the corrected or amended application.
(2) Determination
(A) In general
In any case in which the Secretary under paragraph (1)(B) has notified an applicant of receipt of an application which meets the requirements of paragraph (1)(A), the Secretary shall make a determination as to whether such operating permit is to be issued, and shall notify the applicant of such determination, within 45 days of the date on which notice was sent under paragraph (1)(B).
(B) Failure to make determination
If the Secretary has not notified an applicant within the time prescribed under subparagraph (A), the application shall be treated as approved.
(C) Rejection of application
If the Secretary determines under subparagraph (A) that a permit should not be issued—
(i) the Secretary shall include in the notice to the applicant of such determination under subparagraph (A) detailed reasons for such determination, and
(ii) such determination shall not prejudice any further application for such operating permit.
(3) Bond
No bond shall be required for an eligible distilled spirits plant. For purposes of section 5212 and subsection (e)(2) of this section, the premises of an eligible distilled spirits plant shall be treated as bonded premises.
(4) Eligible distilled spirits plant
The term "eligible distilled spirits plant" means a plant which is used to produce distilled spirits exclusively for fuel use and the production from which does not exceed 10,000 proof gallons per year.
(d) Withdrawal free of tax
Distilled spirits produced under this section may be withdrawn free of tax from the bonded premises (and any premises which are not bonded by reason of subsection (c)(3)) of a distilled spirits plant exclusively for fuel use as provided in section 5214(a)(12).
(e) Prohibited withdrawal, use, sale, or disposition
(1) In general
Distilled spirits produced under this section shall not be withdrawn, used, sold, or disposed of for other than fuel use.
(2) Rendering unfit for use
For protection of the revenue and under such regulations as the Secretary may prescribe, distilled spirits produced under this section shall, before withdrawal from the bonded premises of a distilled spirits plant, be rendered unfit for beverage use by the addition of substances which will not impair the quality of the spirits for fuel use.
(f) Definition of distilled spirits
For purposes of this section, the term "distilled spirits" does not include distilled spirits produced from petroleum, natural gas, or coal.
(Added
Editorial Notes
Prior Provisions
A prior section 5181 was renumbered 5182 of this title.
Statutory Notes and Related Subsidiaries
Effective Date
§5182. Cross references
For provisions requiring recordkeeping by wholesale liquor dealers, see section 5121, and by retail liquor dealers, see section 5122.
(Added
Editorial Notes
Prior Provisions
Provisions similar to those comprising this section were contained in a prior section 5275(3), act Aug. 16, 1954, ch. 736,
Amendments
2018—
2005—
1979—
Statutory Notes and Related Subsidiaries
Effective Date of 2005 Amendment
Amendment by
Effective Date of 1979 Amendment
Amendment by
Subchapter C—Operation of Distilled Spirits Plants
Editorial Notes
Prior Provisions
A prior subchapter C, Internal Revenue Bonded Warehouses, consisted of part I, Establishment, and part II, Operation, and consisted of sections 5231 to 5233 and 5241 to 5252, respectively, prior to the general revision of this chapter by
Amendments
1979—
PART I—GENERAL PROVISIONS
Editorial Notes
Prior Provisions
A prior part I, Establishment, consisted of sections 5231 to 5233, prior to the general revision of this chapter by
Amendments
1984—
§5201. Regulation of operations
(a) General
Proprietors of distilled spirits plants shall conduct all operations authorized to be conducted on the premises of such plants under such regulations as the Secretary shall prescribe.
(b) Distilled spirits for industrial uses
The regulations of the Secretary under this chapter respecting the production, warehousing, denaturing, distribution, sale, export, and use of distilled spirits for industrial purposes shall be such as he deems necessary, advisable, or proper to secure the revenue, to prevent diversion to illegal uses, and to place the distilled spirits industry and other industries using such distilled spirits as a chemical raw material or for other lawful industrial purposes on the highest possible plane of scientific and commercial efficiency and development consistent with the provisions of this chapter. Where nonpotable chemical mixtures containing distilled spirits are produced for transfer to the bonded premises of a distilled spirits plant for completion of processing, the Secretary may waive any provision of this chapter with respect to the production of such mixtures, and the processing of such mixtures on the bonded premises shall be deemed to be production of distilled spirits for purposes of this chapter.
(c) Hours of operations
The Secretary may prescribe regulations relating to hours for distillery operations and to hours for removal of distilled spirits from distilled spirits plants; however, such regulations shall not be more restrictive, as to any operation or function, that the provisions of internal revenue law and regulations relating to such operation or function in effect on the day preceding the effective date of this section.
(d) Identification of distilled spirits
The Secretary may provide by regulations for the addition of tracer elements to distilled spirits to facilitate the enforcement of this chapter. Tracer elements to be added to distilled spirits at any distilled spirits plant under provisions of this subsection shall be of such character and in such quantity as the Secretary may authorize or require, and such as will not impair the quality of the distilled spirits for their intended use.
(Added
Editorial Notes
Prior Provisions
Provisions similar to those comprising subsecs. (a) to (c) of this section were contained in prior sections of act Aug. 16, 1954, prior to the general revision of this chapter by
| Present subsecs.: | Prior sections |
|---|---|
| (a) | 5193(a), 5194(g), 5241(a), 5281, 5282(a), 5302, 5305–5307, 5319(6). |
| (b) | 5305. |
| (c) | 5195, 5215, 5306. |
The prior sections, act Aug. 16, 1954, ch. 736, are set out in
Amendments
1979—Subsec. (a).
1976—Subsecs. (a) to (d).
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
§5202. Supervision of operations
All operations on the premises of a distilled spirits plant shall be conducted under such supervision and controls (including the use of Government locks and seals) as the Secretary shall by regulations prescribe.
(Added
Editorial Notes
Prior Provisions
Provisions similar to those comprising this section were contained in prior sections of act Aug. 16, 1954, prior to the general revision of this chapter by
| Present subsecs.: | Prior sections |
|---|---|
| (a) | 5192(a), (c), 5241(a), (b), 5282(b). |
| (b) | 5173(b), 5192(b), (c). |
| (c) | 5241(a), (b). |
| (d) | 5241(b). |
| (e) | 5331(a)(1). |
| (f) | 5193(a), 5250(a), (b). |
| (g) | 5243(b). |
The prior sections, act Aug. 16, 1954, ch. 736, are set out in
Amendments
1979—
1976—Subsecs. (a) to (g).
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
§5203. Entry and examination of premises
(a) Keeping premises accessible
Every proprietor of a distilled spirits plant shall furnish the Secretary such keys as may be required for internal revenue officers to gain access to the premises and any structures thereon, and such premises shall always be kept accessible to any officer having such keys.
(b) Right of entry and examination
It shall be lawful for any internal revenue officer at all times, as well by night as by day, to enter any distilled spirits plant, or any other premises where distilled spirits operations are carried on, or structure or place used in connection therewith for storage or other purposes; to make examination of the materials, equipment, and facilities thereon; and make such gauges and inventories as he deems necessary. Whenever any officer, having demanded admittance, and having declared his name and office, is not admitted into such premises by the proprietor or other person having charge thereof, it shall be lawful for such officer, at all times, as well by night as by day, to use such force as is necessary for him to gain entry to such premises.
(c) Furnishing facilities and assistance
On the demand of any internal revenue officer or agent, every proprietor of a distilled spirits plant shall furnish the necessary facilities and assistance to enable the officer or agent to gauge the spirits in any container or to examine any apparatus, equipment, containers, or materials on such premises. Such proprietor shall also, on demand of such officer or agent, open all doors, and open for examination all boxes, packages, and all casks, barrels, and other vessels on such premises.
(d) Authority to break up grounds or walls
It shall be lawful for any internal revenue officer, and any person acting in his aid, to break up the ground on any part of a distilled spirits plant or any other premises where distilled spirits operations are carried on, or any ground adjoining or near to such plant or premises, or any wall or partition thereof, or belonging thereto, or other place, to search for any pipe, cock, private conveyance, or utensil; and, upon finding any such pipe or conveyance leading therefrom or thereto, to break up any ground, house, wall, or other place through or into which such pipe or other conveyance leads, and to break or cut away such pipe or other conveyance, and turn any cock, or to examine whether such pipe or other conveyance conveys or conceals any distilled spirits, mash, wort, or beer, or other liquor, from the sight or view of the officer, so as to prevent or hinder him from taking a true account thereof.
(e) Penalty
For penalty for violation of this section, see section 5687.
(Added
Editorial Notes
Prior Provisions
Provisions similar to those comprising this section were contained in prior sections of act Aug. 16, 1954, prior to the general revision of this chapter by
| Present subsecs.: | Prior sections |
|---|---|
| (a) | 5196(a). |
| (b) | 5196(b), (e). |
| (c) | 5196(c), (e), 5283, 5615. |
| (d) | 5196(d), 5283. |
| (e) | 5615, 5687. |
The prior sections, act Aug. 16, 1954, ch. 736, are set out in
Amendments
1979—Subsec. (b).
Subsec. (c).
Subsec. (d).
1976—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
§5204. Gauging
(a) General
The Secretary may by regulations require the gauging of distilled spirits for such purposes, as he may deem necessary, and all required gauges shall be made at such times and under such conditions as he may by regulations prescribe.
(b) Gauging instruments
For the determination of tax and the prevention and detection of frauds, the Secretary may prescribe for use such hydrometers, saccharometers, weighing and gauging instruments, or other means or methods for ascertaining the quantity, gravity, and producing capacity of any mash, wort, or beer used, or to be used, in the production of distilled spirits, and the strength and quantity of spirits subject to tax, as he may deem necessary; and he may prescribe regulations to secure a uniform and correct system of inspection, weighing, marking, and gauging of spirits.
(c) Gauging, marking, and branding by proprietors
The Secretary may by regulations require the proprietor of a distilled spirits plant, at the proprietor's expense and under such supervision as the Secretary may require, to do such gauging, marking, and branding and such mechanical labor pertaining thereto as the Secretary deems proper and determines may be done without danger to the revenue.
(Added
Editorial Notes
Prior Provisions
Provisions similar to those comprising this section were contained in prior sections of act Aug. 16, 1954, prior to the general revision of this chapter by
| Present subsecs.: | Prior sections |
|---|---|
| (a) | 5193(a), 5194(g), 5245, 5282(b). |
| (b) | 5212. |
| (c) | 5193(d), 5250(b), 5282(b), 5306. |
The prior sections, act Aug. 16, 1954, ch. 736, are set out in
Amendments
1984—Subsec. (c).
1979—Subsec. (a).
1976—Subsecs. (a) to (c).
Statutory Notes and Related Subsidiaries
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1979 Amendment
Amendment by
[§5205. Repealed. Pub. L. 98–369, div. A, title IV, §454(a), July 18, 1984, 98 Stat. 820 ]
Section, added
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal effective July 1, 1985, see section 456(b) of
§5206. Containers
(a) Authority to prescribe
The Secretary shall by regulations prescribe the types or kinds of containers which may be used to contain, store, transfer, convey, remove, or withdraw distilled spirits.
(b) Standards of fill
The Secretary may by regulations prescribe the standards of fill for approved containers.
(c) Marking, branding, or identification
Containers of distilled spirits (and cases containing bottles or other containers of such spirits) shall be marked, branded, or identified in such manner as the Secretary shall by regulations prescribe.
(d) Effacement of marks and brands on emptied containers
Every person who empties, or causes to be emptied, any container of distilled spirits bearing any mark or brand required by law (or regulations pursuant thereto) shall at the time of emptying such container efface and obliterate such mark or brand; except that the Secretary may, by regulations, waive any requirement of this subsection where he determines that no jeopardy to the revenue will be involved.
(e) Applicability
This section shall be applicable exclusively with respect to containers of distilled spirits for industrial use, with respect to containers of distilled spirits of a capacity of more than one gallon for other than industrial use, and with respect to cases containing bottles or other containers of distilled spirits.
(f) Cross references
(1) For other provisions relating to regulation of containers of distilled spirits, see section 5301.
(2) For provisions relating to labeling containers of distilled spirits of one gallon or less for nonindustrial uses, see section 105(e) of the Federal Alcohol Administration Act (
(3) For provisions relating to the marking and branding of containers of distilled spirits by proprietors, see section 5204(c).
(4) For penalties and forfeitures relating to marks and brands, see sections 5604 and 5613.
(Added
Editorial Notes
Prior Provisions
Provisions similar to those comprising subsecs. (a) to (c) of this section were contained in prior sections of act Aug. 16, 1954, prior to the general revision of this chapter by
| Present subsecs.: | Prior sections |
|---|---|
| (a) | 5193(a), (b), 5194, 5247(a), (d), 5302. |
| (b) | 5193(c). |
| (c) | 5009(a), 5193(a), 5194, 5243(d), (e), 5250(a), 5282(b). |
The prior sections, act Aug. 16, 1954, ch. 736, are set out in
Amendments
1996—Subsec. (f)(2).
1984—Subsecs. (d) to (f).
1976—Subsecs. (a) to (c).
Statutory Notes and Related Subsidiaries
Effective Date of 1984 Amendment
Amendment by
§5207. Records and reports
(a) Records of distilled spirits plant proprietors
Every distilled spirits plant proprietor shall keep records in such form and manner as the Secretary shall by regulations prescribe of:
(1) The following production activities—
(A) the receipt of materials intended for use in the production of distilled spirits, and the use thereof,
(B) the receipt and use of distilled spirits received for redistillation, and
(C) the kind and quantity of distilled spirits produced.
(2) The following storage activities—
(A) the kind and quantity of distilled spirits, wines, and alcoholic ingredients entered into storage,
(B) the kind and quantity of distilled spirits, wines, and alcoholic ingredients removed, and the purpose for which removed, and
(C) the kind and quantity of distilled spirits returned to storage.
(3) The following denaturation activities—
(A) the kind and quantity of denaturants received and used or otherwise disposed of,
(B) the kind and quantity of distilled spirits denatured, and
(C) the kind and quantity of denatured distilled spirits removed.
(4) The following processing activities—
(A) all distilled spirits, wines, and alcoholic ingredients received or transferred,
(B) the kind and quantity of distilled spirits packaged or bottled, and
(C) the kind and quantity of distilled spirits removed from his premises.
(5) Such additional information with respect to activities described in paragraphs (1), (2), (3), and (4), and with respect to other activities, as may by regulations be required.
(b) Reports
Every person required to keep records under subsection (a) shall render such reports covering his operations, at such times and in such form and manner and containing such information, as the Secretary shall by regulations prescribe.
(c) Preservation and inspection
The records required by subsection (a) and a copy of each report required by subsection (b) shall be available for inspection by any internal revenue officer during business hours, and shall be preserved by the person required to keep such records and reports for such period as the Secretary shall by regulations prescribe.
(d) Penalty
For penalty and forfeiture for refusal or neglect to keep records required under this section, or for false entries therein, see sections 5603 and 5615(5).
(Added
Editorial Notes
Prior Provisions
Provisions similar to those comprising this section were contained in prior sections of act Aug. 16, 1954, prior to the general revision of this chapter by
| Present subsecs.: | Prior sections: |
|---|---|
| (a) | 5197(a)(1)(A), (a)(2), 5305, 5331(a)(3). |
| (b) | 5285, 5555(a). |
| (c) | 5197(b), 5285, 5305, 5331(a)(3), 5555(a). |
| (d) | 5197(a)(1)(B), 5285, 5305, 5331(a)(3), 5555(a). |
| (e) | 5197(c)(2), 5285. |
The prior sections, act Aug. 16, 1954, ch. 736, are set out in
Amendments
1997—Subsec. (c).
1984—Subsec. (a)(4)(D).
1979—Subsec. (a).
Subsec. (b).
Subsec. (c).
Subsecs. (d), (e).
1977—Subsec. (a)(10), (11).
1976—Subsecs. (a) to (d). Pub. L. 94—455 struck out "or his delegate" after "Secretary" wherever appearing.
Statutory Notes and Related Subsidiaries
Effective Date of 1997 Amendment
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1977 Amendment
Amendment by
PART II—OPERATIONS ON BONDED PREMISES
Editorial Notes
Prior Provisions
A prior part II, Operation, consisted of sections 5241 to 5252, prior to the general revision of this chapter by
Subpart A—General
§5211. Production and entry of distilled spirits
Distilled spirits in the process of production in a distilled spirits plant may be held prior to the production gauge only for so long as is reasonably necessary to complete the process of production. Under such regulations as the Secretary shall prescribe, all distilled spirits produced in a distilled spirits plant shall be gauged and a record made of such gauge within a reasonable time after the production thereof has been completed. The proprietor shall, pursuant to such production gauge and in accordance with such regulations as the Secretary shall prescribe, make appropriate entry for—
(1) deposit of such spirits on bonded premises for storage or processing;
(2) withdrawal upon determination of tax as authorized by law;
(3) withdrawal under the provisions of section 5214; and
(4) transfer for redistillation under the provisions of section 5223.
(Added
Editorial Notes
Prior Provisions
A prior section 5211, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior sections 5193(a), 5194(a), (e) to (g), 5242(a), 5305, act Aug. 16, 1954, ch. 736,
Amendments
1979—Pars. (1), (5).
1976—
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
§5212. Transfer of distilled spirits between bonded premises
Bulk distilled spirits on which the internal revenue tax has not been paid or determined as authorized by law may, under such regulations as the Secretary shall prescribe, be transferred in bond between bonded premises in any approved container. For the purposes of this chapter, the removal of bulk distilled spirits for transfer in bond between bonded premises shall not be construed to be a withdrawal from bonded premises. The provisions of this section restricting transfers to bulk distilled spirits shall not apply to alcohol bottled under the provisions of section 5235 which is to be withdrawn for industrial purposes. In the case of distilled spirits transferred in bond after December 31, 2017, between bonded premises belonging to the same person or members of the same controlled group (within the meaning of section 5001(c)(2)) this section shall be applied without regard to whether distilled spirits are bulk distilled spirits. In the case of distilled spirits transferred in bond from the person who distilled or processed such distilled spirits (hereinafter referred to as "transferor") to another person for bottling or storage of such distilled spirits, and returned to the transferor for removal, this section shall be applied without regard to whether distilled spirits are bulk distilled spirits, but only if the transferor retains title during the entire period between such distillation, or processing, and removal.
(Added
Editorial Notes
Prior Provisions
A prior section 5212, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior sections 5194(a), (e) to (g), 5217(a), 5246, 5308, act Aug. 16, 1954, ch. 736,
Amendments
2020—
2019—
2017—
1980—
1979—
1976—
Statutory Notes and Related Subsidiaries
Effective Date of 2020 Amendment
Effective Date of 2019 Amendment
Effective Date of 2017 Amendment
Effective Date of 1979 Amendment
Amendment by
§5213. Withdrawal of distilled spirits from bonded premises on determination of tax
Subject to the provisions of section 5173, distilled spirits may be withdrawn from the bonded premises of a distilled spirits plant on payment or determination of tax thereon, in approved containers, under such regulations as the Secretary shall prescribe.
(Added
Editorial Notes
Prior Provisions
A prior section 5213, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior sections 5194(a), (e) and 5244, act Aug. 16, 1954, ch. 736,
Amendments
1979—
1976—
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
§5214. Withdrawal of distilled spirits from bonded premises free of tax or without payment of tax
(a) Purposes
Distilled spirits on which the internal revenue tax has not been paid or determined may, subject to such regulations as the Secretary shall prescribe, be withdrawn from the bonded premises of any distilled spirits plant in approved containers—
(1) free of tax after denaturation of such spirits in the manner prescribed by law for—
(A) exportation;
(B) use in the manufacture of ether, chloroform, or other definite chemical substance where such distilled spirits are changed into some other chemical substance and do not appear in the finished product; or
(C) any other use in the arts and industries (except for uses prohibited by section 5273(b) or (d)) and for fuel, light, and power; or
(2) free of tax by, and for the use of, the United States or any governmental agency thereof, any State, any political subdivision of a State, or the District of Columbia, for nonbeverage purposes; or
(3) free of tax for nonbeverage purposes and not for resale or use in the manufacture of any product for sale—
(A) for the use of any educational organization described in section 170(b)(1)(A)(ii) which is exempt from income tax under section 501(a), or for the use of any scientific university or college of learning;
(B) for any laboratory for use exclusively in scientific research;
(C) for use at any hospital, blood bank, or sanitarium), (including use in making any analysis or test at such hospital, blood bank, or sanitarium), or at any pathological laboratory exclusively engaged in making analyses, or tests, for hospitals or sanitariums; or
(D) for the use of any clinic operated for charity and not for profit (including use in the compounding of bona fide medicines for treatment outside of such clinics of patients thereof); or
(4) without payment of tax for exportation, after making such application and entries, filing such bonds as are required by section 5175, and complying with such other requirements as may by regulations be prescribed; or
(5) without payment of tax for use in wine production, as authorized by section 5373; or
(6) without payment of tax for transfer to manufacturing bonded warehouses for manufacturing in such warehouses for export, as authorized by law; or
(7) without payment of tax for use of certain vessels and aircraft, as authorized by law; or
(8) without payment of tax for transfer to foreign-trade zones, as authorized by law; or
(9) without payment of tax, for transfer (for the purpose of storage pending exportation) to any customs bonded warehouse from which distilled spirits may be exported, and distilled spirits transferred to a customs bonded warehouse under this paragraph shall be entered, stored, and accounted for under such regulations and bonds as the Secretary may prescribe; or
(10) without payment of tax by a proprietor of bonded premises for use in research, development, or testing (other than consumer testing or other market analysis) of processes, systems, materials, or equipment, relating to distilled spirits or distilled spirits operations, under such limitations and conditions as to quantities, use, and accountability as the Secretary may by regulations require for the protection of the revenue; or
(11) free of tax when contained in an article (within the meaning of section 5002(a)(14)); or
(12) free of tax in the case of distilled spirits produced under section 5181; or
(13) without payment of tax for use on bonded wine cellar premises in the production of wine or wine products which will be rendered unfit for beverage use and removed pursuant to section 5362(d); or
(14) with respect to distilled spirits removed after December 31, 2019, and before January 1, 2021, free of tax for use in or contained in hand sanitizer produced and distributed in a manner consistent with any guidance issued by the Food and Drug Administration that is related to the outbreak of virus SARS–CoV–2 or coronavirus disease 2019 (COVID–19).
(b) Cross references
(1) For provisions relating to denaturation, see sections 5241 and 5242.
(2) For provisions requiring permit for users of distilled spirits withdrawn free of tax and for users of specially denatured distilled spirits, see section 5271.
(3) For provisions relating to withdrawal of distilled spirits without payment of tax for use of certain vessels and aircraft, as authorized by law, see
(4) For provisions relating to withdrawal of distilled spirits without payment of tax for manufacture in manufacturing bonded warehouse, see
(5) For provisions relating to foreign-trade zones, see
(6) For provisions authorizing regulations for withdrawal of distilled spirits free of tax for use of the United States, see section 7510.
(7) For provisions authorizing removal of distillates to bonded wine cellars for use in the production of distilling material, see section 5373(c).
(8) For provisions relating to distilled spirits for use of foreign embassies, legations, etc., see section 5066.
(Added
Editorial Notes
Prior Provisions
A prior section 5214, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising subsecs. (a)(1) to (4), (9) and (b)(3) to (5) of this section were contained in prior sections of act Aug. 16, 1954, prior to the general revision of this chapter by
| Present subsecs.: | Prior sections |
|---|---|
| (a) | 5243(e), 5247, 5310(a)–(c), 5331 (a)(1), (b), 5373(b)(4), 5522(a). |
| (a)(1) | 5310(a), 5331(a)(1), (b). |
| (a)(2), (3) | 5310(b), (c). |
| (a)(4) | 5243(e), 5247. |
| (a)(9) | 5373(b)(4). |
| (b)(3) | 5248(2). |
| (b)(4) | 5248(4). |
| (b)(5) | 5248(3). |
The prior sections, act Aug. 16, 1954, ch. 736, are set out in
Amendments
2020—Subsec. (a)(14).
1984—Subsec. (a)(13).
1980—Subsec. (a)(12).
1979—Subsec. (a)(6).
Subsec. (a)(9).
Subsec. (a)(10).
Subsec. (a)(11).
Subsec. (b)(4) to (8).
1977—Subsec. (a)(9).
Subsec. (a)(10).
Subsec. (b)(7).
1976—Subsec. (a).
1969—Subsec. (a)(3)(A).
Statutory Notes and Related Subsidiaries
Effective Date of 2020 Amendment
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1980 Amendment
Amendment by
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1977 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by section 1905(c)(2) of
Effective Date of 1969 Amendment
Amendment by
Application of Other Laws
"(1) section 105 or 106 of the Federal Alcohol Administration Act (
"(2) section 204 of the Alcoholic Beverage Labeling Act of 1988 (
§5215. Return of tax determined distilled spirits to bonded premises
(a) General rule
Under such regulations as the Secretary may prescribe, distilled spirits on which tax has been determined or paid may be returned to the bonded premises of a distilled spirits plant but only for destruction, denaturation, redistillation, reconditioning, or rebottling.
(b) Applicability of chapter to distilled spirits returned to a distilled spirits plant
All provisions of this chapter applicable to distilled spirits in bond shall be applicable to distilled spirits returned to bonded premises under the provisions of this section on such return.
(c) Return of bottled distilled spirits for relabeling and reclosing
Under such regulations as the Secretary shall prescribe, bottled distilled spirits withdrawn from bonded premises may be returned to bonded premises for relabeling or reclosing, and the tax under section 5001 shall not again be collected on such spirits.
(d) Cross reference
For provisions relating to the abatement, credit, or refund of tax on distilled spirits returned to a distilled spirits plant under this section, see section 5008(c).
(Added
Editorial Notes
Prior Provisions
A prior section 5215, act Aug. 16, 1954, ch. 736,
Amendments
1984—Subsec. (c).
1979—
1977—Subsec. (a).
Subsecs. (b), (c).
Subsec. (d).
Subsec. (e).
1976—Subsec. (a).
1971—Subsec. (a).
Subsec. (b).
1965—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1977 Amendment
Amendment by
Effective Date of 1971 Amendment
Amendment by
Effective Date of 1965 Amendment
Amendment by
Distilled Spirits to Which Alcoholic Ingredients Other Than Distilled Spirits Have Been Added and Which Have Been Withdrawn From Distilled Spirits Plants Before January 1, 1980
Subsec. (a) of this section to apply 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 Jan. 1, 1980, only if such spirits are returned to the distilled spirits plant from which withdrawn, see section 808(e) of
§5216. Regulation of operations
For general provisions relating to operations on bonded premises see part I of this subchapter.
(Added
Editorial Notes
Prior Provisions
A prior section 5216, act Aug. 16, 1954, ch. 736,
A prior section 5217, acts Aug. 16, 1954, ch. 736,
Subpart B—Production
Editorial Notes
Amendments
1965—
§5221. Commencement, suspension, and resumption of operations
(a) Commencement, suspension, and resumption
The proprietor of a distilled spirits plant authorized to produce distilled spirits shall not commence production operations until written notice has been given to the Secretary stating when operations will begin. Any proprietor of a distilled spirits plant desiring to suspend production of distilled spirits shall give notice in writing to the Secretary, stating when he will suspend such operations. Pursuant to such notice, an internal revenue officer shall take such action as the Secretary shall prescribe to prevent the production of distilled spirits. No proprietor, after having given such notice, shall, after the time stated therein, produce distilled spirits on such premises until he again gives notice in writing to the Secretary stating the time when he will resume operations. At the time stated in the notice of resuming such operations an internal revenue officer shall take such action as is necessary to permit operations to be resumed. The notices submitted under this section shall be in such form and submitted in such manner as the Secretary may by regulations require. Nothing in this section shall apply to suspensions caused by unavoidable accidents; and the Secretary shall prescribe regulations to govern such cases of involuntary suspension.
(b) Penalty
For penalty and forfeiture for carrying on the business of distiller after having given notice of suspension, see sections 5601(a)(14) and 5615(3).
(Added
Editorial Notes
Prior Provisions
Provisions similar to those comprising subsec. (a) of this section were contained in prior section 5191(a), act Aug. 16, 1954, ch. 736,
Amendments
1979—Subsec. (a).
1976—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
§5222. Production, receipt, removal, and use of distilling materials
(a) Production, removal, and use
(1) No mash, wort, or wash fit for distillation or for the production of distilled spirits shall be made or fermented in any building or on any premises other than on the bonded premises of a distilled spirits plant duly authorized to produce distilled spirits according to law; and no mash, wort, or wash so made or fermented shall be removed from any such premises before being distilled, except as authorized by the Secretary; and no person other than an authorized distiller shall, by distillation or any other process, produce distilled spirits from any mash, wort, wash, or other material.
(2) Nothing in this subsection shall be construed to apply to—
(A) authorized operations performed on the premises of vinegar plants established under part I of subchapter H;
(B) authorized production and removal of fermented materials produced on authorized brewery or bonded wine cellar premises as provided by law;
(C) products exempt from tax under the provisions of section 5042 or 5053(e); or
(D) fermented materials used in the manufacture of vinegar by fermentation.
(b) Receipt
Under such regulations as the Secretary may prescribe, fermented materials to be used in the production of distilled spirits may be received on the bonded premises of a distilled spirits plant authorized to produce distilled spirits as follows—
(1) from the premises of a bonded wine cellar authorized to remove such material by section 5362(c)(6);
(2) beer conveyed without payment of tax from brewery premises, beer which has been lawfully removed from brewery premises upon determination of tax, or
(3) cider exempt from tax under the provisions of section 5042(a)(1).
(c) Processing of distilled spirits containing extraneous substances
The Secretary may by regulations provide for the removal from the distilling system, and the addition to the fermented or unfermented distilling material, of distilled spirits containing substantial quantities of fusel oil or aldehydes, or other extraneous substances.
(d) Penalty
For penalty and forfeiture for unlawful production, removal, or use of material fit for distillation or for the production of distilled spirits, and for penalty and forfeiture for unlawful production of distilled spirits, see sections 5601(a)(7), 5601(a)(8), and 5615(4).
(Added
Editorial Notes
Prior Provisions
Provisions similar to those comprising subsecs. (a)(1), (2)(D), (b), and (d) of this section were contained in prior sections of act Aug. 16, 1954, prior to the general revision of this chapter by
| Present subsecs.: | Prior sections |
|---|---|
| (a)(1), (2)(D) | 5216(a)(1), (4). |
| (b) | 5309, 5362(7), 5412. |
| (d) | 5216(b). |
The prior sections, act Aug. 16, 1954, ch. 736, are set out in
Amendments
1997—Subsec. (b)(2).
1979—Subsec. (c).
1978—Subsec. (a)(2)(C).
1976—Subsecs. (a)(1), (b), (c).
Subsec. (d).
Statutory Notes and Related Subsidiaries
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1978 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by section 1905(b)(6)(D) of
§5223. Redistillation of spirits, articles, and residues
(a) Spirits on bonded premises
The proprietor of a distilled spirits plant authorized to produce distilled spirits may, under such regulations as the Secretary shall prescribe, redistill any distilled spirits which have not been withdrawn from bonded premises.
(b) Distilled spirits returned for redistillation
Distilled spirits which have been lawfully removed from bonded premises free of tax or without payment of tax may, under such regulations as the Secretary may prescribe, be returned for redistillation to the bonded premises of a distilled spirits plant authorized to produce distilled spirits.
(c) Redistillation of articles and residues
Articles, containing denatured distilled spirits, which were manufactured under the provisions of subchapter D or on the bonded premises of a distilled spirits plant, and the spirits residues of manufacturing processes related thereto, may be received, and the distilled spirits therein recovered by redistillation, on the bonded premises of a distilled spirits plant authorized to produce distilled spirits, under such regulations as the Secretary may prescribe.
(d) Denatured distilled spirits, articles, and residues
Distilled spirits recovered by the redistillation of denatured distilled spirits, or by the redistillation of the articles or residues described in subsection (c), may not be withdrawn from bonded premises except for industrial use or after denaturation thereof in the manner prescribed by law.
(e) Products of redistillation
All distilled spirits redistilled on bonded premises subsequent to production gauge shall be treated the same as if such spirits had been originally produced by the redistiller and all provisions of this chapter applicable to the original production of distilled spirits shall be applicable thereto. Any prior obligation as to taxes, liens, and bonds with respect to such distilled spirits shall be extinguished on redistillation. Nothing in this subsection shall be construed as affecting any provision of law relating to the labeling of distilled spirits or as limiting the authority of the Secretary to regulate the marking, branding, or identification of distilled spirits redistilled under this section.
(Added
Editorial Notes
Prior Provisions
Provisions similar to those comprising subsecs. (a) and (d) of this section were contained in prior sections of act Aug. 16, 1954, prior to the general revision of this chapter by
| Present subsecs.: | Prior sections |
|---|---|
| (a) | 5194(f), 5217(a), 5305, 5308. |
| (d) | 5194(f). |
The prior sections, act Aug. 16, 1954, ch. 736, are set out in
Amendments
1979—Subsec. (c).
Subsec. (e).
1976—Subsecs. (a) to (c), (e).
1965—
Subsec. (c).
Subsec. (d).
Subsec. (e).
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1965 Amendment
Amendment by
Subpart C—Storage
Editorial Notes
Amendments
1979—
§5231. Entry for deposit
All distilled spirits entered for deposit on the bonded premises of a distilled spirits plant under section 5211 shall, under such regulations as the Secretary shall prescribe, be deposited in the facilities on the bonded premises designated in the entry for deposit.
(Added
Editorial Notes
Prior Provisions
A prior section 5231, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5242(a), (b)(5), act Aug. 16, 1954, ch. 736,
Amendments
1979—
1976—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
§5232. Imported distilled spirits
(a) Transfer to distilled spirits plant without payment of tax
Distilled spirits imported or brought into the United States in bulk containers may, under such regulations as the Secretary shall prescribe, be withdrawn from customs custody and transferred in such bulk containers or by pipeline to the bonded premises of a distilled spirits plant without payment of the internal revenue tax imposed on such distilled spirits. The person operating the bonded premises of the distilled spirits plant to which such spirits are transferred shall become liable for the tax on distilled spirits withdrawn from customs custody under this section upon release of the spirits from customs custody, and the importer, or the person bringing such distilled spirits into the United States, shall thereupon be relieved of his liability for such tax.
(b) Withdrawals, etc.
Distilled spirits transferred pursuant to subsection (a)—
(1) may be redistilled or denatured only if of 185 degrees or more of proof, and
(2) may be withdrawn for any purpose authorized by this chapter, in the same manner as domestic distilled spirits.
(Added
Editorial Notes
Prior Provisions
A prior section 5232, acts Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5311, act Aug. 16, 1954, ch. 736,
Amendments
1979—Subsec. (b).
1976—Subsec. (a).
1971—Subsec. (a).
Subsec. (b).
1968—
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by
Effective Date of 1971 Amendment
Amendment by
Effective Date of 1968 Amendment
Amendment by
[§5233. Repealed. Pub. L. 96–39, title VIII, §807(a)(34), July 26, 1979, 93 Stat. 286 ]
Section, added
A prior section 5233, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising subsecs. (a) to (d) and (e)(1) of section 5233 added by
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal effective Jan. 1, 1980, see section 810 of
[§5234. Repealed. Pub. L. 96–39, title VIII, §807(a)(35), July 26, 1979, 93 Stat. 286 ]
Section, added
Provisions similar to those comprising section 5234(a)(1)(A) and (b) to (d) of this title were contained in prior sections of act Aug. 16, 1954, ch. 736, prior to the general revision of this chapter by
| Subsecs.: | Prior sections |
|---|---|
| (a)(1)(A) | 5306. |
| (b) | 5217(a). |
| (c) | 5023. |
| (d) | 5251. |
The prior sections, act Aug. 16, 1954, ch. 736, are set out in
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal effective Jan. 1, 1980, see section 810 of
§5235. Bottling of alcohol for industrial purposes
Alcohol for industrial purposes may be bottled, labeled, and cased on bonded premises of a distilled spirits plant prior to payment or determination of tax, under such regulations as the Secretary may prescribe.
(Added
Editorial Notes
Prior Provisions
Provisions similar to those comprising this section were contained in prior section 5305, act Aug. 16, 1954, ch. 736,
Amendments
1984—
1979—
1976—
Statutory Notes and Related Subsidiaries
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1979 Amendment
Amendment by
§5236. Discontinuance of storage facilities and transfer of distilled spirits
When the Secretary finds any facilities for the storage of distilled spirits on bonded premises to be unsafe or unfit for use, or the spirits contained therein subject to great loss or wastage he may require the discontinuance of the use of such facilities and require the spirits contained therein to be transferred to such other storage facilities as he may designate. Such transfer shall be made at such time and under such supervision as the Secretary may require and the expense of the transfer shall be paid by the owner or the warehouseman of the distilled spirits. Whenever the owner of such distilled spirits or the warehouseman fails to make such transfer within the time prescribed, or to pay the just and proper expense of such transfer, as ascertained and determined by the Secretary, such distilled spirits may be seized and sold by the Secretary in the same manner as goods are sold on distraint for taxes, and the proceeds of such sale shall be applied to the payment of the taxes due thereon and the cost and expenses of such sale and removal, and the balance paid over to the owner of such distilled spirits.
(Added
Editorial Notes
Prior Provisions
Provisions similar to those comprising this section were contained in prior section 5252, act Aug. 16, 1954, ch. 736,
Amendments
1976—
Subpart D—Denaturation
§5241. Authority to denature
Under such regulations as the Secretary shall prescribe, distilled spirits may be denatured on the bonded premises of a distilled spirits plant qualified for the processing of distilled spirits. Distilled spirits to be denatured under this section shall be of such kind and such degree of proof as the Secretary shall by regulations prescribe. Distilled spirits denatured under this section may be used on the bonded premises of a distilled spirits plant in the manufacture of any article.
(Added
Editorial Notes
Prior Provisions
A prior section 5241, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior sections 5194(c), 5303, 5310(a), 5331(a)(1), act Aug. 16, 1954, ch. 736,
Amendments
1979—
1976—
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
§5242. Denaturing materials
Methanol or other denaturing materials suitable to the use for which the denatured distilled spirits are intended to be withdrawn shall be used for the denaturation of distilled spirits. Denaturing materials shall be such as to render the spirits with which they are admixed unfit for beverage or internal human medicinal use. The character and the quantity of denaturing materials used shall be as prescribed by the Secretary by regulations.
(Added
Editorial Notes
Prior Provisions
A prior section 5242, acts Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior sections 5303, 5310(a) and 5331(a)(1), (2), act Aug. 16, 1954, ch. 736,
Amendments
1976—
§5243. Sale of abandoned spirits for denaturation without collection of tax
Notwithstanding any other provision of law, any distilled spirits abandoned to the United States may be sold, in such cases as the Secretary may by regulation provide, to the proprietor of any distilled spirits plant for denaturation, or redistillation and denaturation, without the payment of the internal revenue tax thereon.
(Added
Editorial Notes
Prior Provisions
A prior section 5243, acts Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5333, act Aug. 16, 1954, ch. 736,
Amendments
1976—
§5244. Cross references
(1) For provisions authorizing the withdrawal from the bonded premises of a distilled spirits plant of denatured distilled spirits, see section 5214(a)(1).
(2) For provisions requiring a permit to procure specially denatured distilled spirits, see section 5271.
(Added
Editorial Notes
Prior Provisions
A prior section 5244, act Aug. 16, 1954, ch. 736,
[PART III—REPEALED]
[§§5251, 5252. Repealed. Pub. L. 96–39, title VIII, §807(a)(38), July 26, 1979, 93 Stat. 286 ]
Section 5251, added
A prior section 5251, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising
Section 5252, added
A prior section 5252, act Aug. 16, 1954, ch. 736,
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal effective Jan. 1, 1980, see section 810 of
Subchapter D—Industrial Use of Distilled Spirits
Editorial Notes
Prior Provisions
A prior subchapter D, Rectifying Plants, consisted of part I, Establishment, and part II, Operation, and comprised sections 5271 to 5275 and 5281 to 5285, respectively, prior to the general revision of this chapter by
Amendments
1987—
1 Section repealed by
§5271. Permits
(a) Requirements
No person shall—
(1) procure or use distilled spirits free of tax under the provisions of section 5214(a)(2) or (3); or
(2) procure, deal in, or use specially denatured distilled spirits; or
(3) recover specially or completely denatured distilled spirits, until he has filed an application with and received a permit to do so from the Secretary.
(b) Form of application and permit
(1) The application required by subsection (a) shall be in such form, shall be submitted at such times, and shall contain such information, as the Secretary shall by regulations prescribe.
(2) Permits under this section shall, under such regulations as the Secretary shall prescribe, designate and limit the acts which are permitted, and the place where and time when such acts may be performed. Such permits shall be issued in such form and under such conditions as the Secretary may by regulations prescribe.
(c) Disapproval of application
Any application submitted under this section may be disapproved and the permit denied if the Secretary, after notice and opportunity for hearing, finds that—
(1) in case of an application to withdraw and use distilled spirits free of tax, the applicant is not authorized by law or regulations issued pursuant thereto to withdraw or use such distilled spirits; or
(2) the applicant (including, in the case of a corporation, any officer, director, or principal stockholder, and, in the case of a partnership, a partner) is, by reason of his business experience, financial standing, or trade connections, not likely to maintain operations in compliance with this chapter; or
(3) the applicant has failed to disclose any material information required, or made any false statement as to any material fact, in connection with his application; or
(4) the premises on which it is proposed to conduct the business are not adequate to protect the revenue.
(d) Changes after issuance of permit
With respect to any change relating to the information contained in the application for a permit issued under this section, the Secretary may by regulations require the filing of written notice of such change and, where the change affects the terms of the permit, require the filing of an amended application.
(e) Suspension or revocation
If, after notice and hearing, the Secretary finds that any person holding a permit issued under this section—
(1) has not in good faith complied with the provisions of this chapter or regulations issued thereunder; or
(2) has violated the conditions of such permit; or
(3) has made any false statement as to any material fact in his application therefor; or
(4) has failed to disclose any material information required to be furnished; or
(5) has violated or conspired to violate any law of the United States relating to intoxicating liquor, or has been convicted of any offense under this title punishable as a felony or of any conspiracy to commit such offense; or
(6) is, in the case of any person who has a permit under subsection (a)(1) or (a)(2), by reason of his operations, no longer warranted in procuring or using the distilled spirits or specially denatured distilled spirits authorized by his permit; or
(7) has, in the case of any person who has a permit under subsection (a)(2), manufactured articles which do not correspond to the descriptions and limitations prescribed by law and regulations; or
(8) has not engaged in any of the operations authorized by the permit for a period of more than 2 years;
such permit may, in whole or in part, be revoked or be suspended for such period as the Secretary deems proper.
(f) Duration of permits
Permits issued under this section, unless terminated by the terms of the permit, shall continue in effect until suspended or revoked as provided in this section, or until voluntarily surrendered.
(g) Posting of permits
Permits issued under this section, to use distilled spirits free of tax, to deal in, or use specially denatured distilled spirits, or to recover specially or completely denatured distilled spirits, shall be kept posted available for inspection on the premises covered by the permit.
(h) Regulations
The Secretary shall prescribe all necessary regulations relating to issuance, denial, suspension, or revocation, of permits under this section, and for the disposition of distilled spirits (including specially denatured distilled spirits) procured under permit pursuant to this section which remain unused when such permit is no longer in effect.
(Added
Editorial Notes
Prior Provisions
A prior section 5271, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising subsecs. (a) to (f) and (h) of this section were contained in prior section 5304(a)(1) to (4), (b), (c), act Aug. 16, 1954, ch. 736,
Amendments
1976—Subsecs. (a) to (e), (h).
Statutory Notes and Related Subsidiaries
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
§5272. Bonds
(a) Requirements
Before any permit required by section 5271(a) is granted, the Secretary may require a bond, in such form and amount as he may prescribe, to insure compliance with the terms of the permit and the provisions of this chapter.
(b) Exceptions
No bond shall be required in the case of permits issued to the United States or any governmental agency thereof, or to the several States or any political subdivision thereof, or to the District of Columbia.
(Added
Editorial Notes
Prior Provisions
A prior section 5272, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior sections 5304(a)(5) and 5310(d), act Aug. 16, 1954, ch. 736,
Amendments
1976—Subsec. (a).
Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 1976 Amendment
Amendment by section 1905(c)(3) of
§5273. Sale, use, and recovery of denatured distilled spirits
(a) Use of specially denatured distilled spirits
Any person using specially denatured distilled spirits in the manufacture of articles shall file such formulas and statements of process, submit such samples, and comply with such other requirements, as the Secretary shall by regulations prescribe, and no person shall use specially denatured distilled spirits in the manufacture or production of any article until approval of the article, formula, and process has been obtained from the Secretary.
(b) Internal medicinal preparations and flavoring extracts
(1) Manufacture
No person shall use denatured distilled spirits in the manufacture of medicinal preparations or flavoring extracts for internal human use where any of the spirits remains in the finished product.
(2) Sale
No person shall sell or offer for sale for internal human use any medicinal preparations or flavoring extracts manufactured from denatured distilled spirits where any of the spirits remains in the finished product.
(c) Recovery of spirits for reuse in manufacturing
Manufacturers employing processes in which denatured distilled spirits withdrawn under section 5214(a)(1) are expressed, evaporated, or otherwise removed, from the articles manufactured shall be permitted to recover such distilled spirits and to have such distilled spirits restored to a condition suitable solely for reuse in manufacturing processes under such regulations as the Secretary may prescribe.
(d) Prohibited withdrawal or sale
No person shall withdraw or sell denatured distilled spirits, or sell any article containing denatured distilled spirits for beverage purposes.
(e) Cross references
(1) For penalty and forfeiture for unlawful use or concealment of denatured distilled spirits, see section 5607.
(2) For applicability of all provisions of law relating to distilled spirits that are not denatured, including those requiring payment of tax, to denatured distilled spirits or articles produced, withdrawn, sold, transported, or used in violation of law or regulations, see section 5001(a)(5).
(3) For definition of "articles", see section 5002(a)(14).
(Added
Editorial Notes
Prior Provisions
A prior section 5273, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior sections of act Aug. 16, 1954, prior to the general revision of this chapter by
| Present subsecs.: | Prior sections |
|---|---|
| (a) | 5331(a), (b). |
| (b) | 5303, 5305, 5310(a), 5331(a)(1), (2), (b), 5647. |
| (c) | 5332. |
| (d) | 5303, 5305, 5310(a), 5331(a), 5647. |
| (e)(1), (2) | 5334. |
The prior sections, act Aug. 16, 1954, ch. 736, are set out in
Amendments
2018—Subsec. (e)(2).
1979—Subsec. (e)(3).
1976—Subsecs. (a), (c).
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
§5274. Applicability of other laws
The provisions, including penalties, of sections 9, and 10 of the Federal Trade Commission Act (
(Added
Editorial Notes
Prior Provisions
A prior section 5274, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5317(b), act Aug. 16, 1954, ch. 736,
Amendments
1976—
§5275. Records and reports
Every person procuring or using distilled spirits withdrawn under section 5214(a)(2) or (3), or procuring, dealing in, or using specially denatured distilled spirits, or recovering specially denatured or completely denatured distilled spirits, shall keep such records and file such reports of the receipt and use of distilled spirits withdrawn free of tax, of the receipt, disposition, use, and recovery of denatured distilled spirits, the manufacture and disposition of articles, and such other information as the Secretary may be regulations require. The Secretary may require any person reprocessing, bottling or repackaging articles, or dealing in completely denatured distilled spirits or articles, to keep such records, submit such reports, and comply with such other requirements as he may by regulations prescribe. Records required to be kept under this section and a copy of all reports required to be filed shall be preserved as regulations shall prescribe and shall be kept available for inspection by any internal revenue officer during business hours. Such officer may also inspect and take samples of distilled spirits, denatured distilled spirits, or articles (including any substances for use in the manufacture thereof), to which such records or reports relate.
(Added
Editorial Notes
Prior Provisions
A prior section 5275, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior sections 5305, 5313(b), and 5331(a)(3), act Aug. 16, 1954, ch. 736,
Amendments
1976—
[§5276. Repealed. Pub. L. 109–59, title XI, §11125(a)(3), Aug. 10, 2005, 119 Stat. 1953 ]
Section, added
Editorial Notes
Prior Provisions
A prior section 5281, act Aug. 16, 1954, ch. 736,
A prior section 5282, act Aug. 16, 1954, ch. 736,
A prior section 5283, act Aug. 16, 1954, ch. 736,
A prior section 5284, act Aug. 16, 1954, ch. 736,
A prior section 5285, act Aug. 16, 1954, ch. 736,
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal effective July 1, 2008, but inapplicable to taxes imposed for periods before such date, see section 11125(c) of
Subchapter E—General Provisions Relating to Distilled Spirits
Editorial Notes
Prior Provisions
A prior subchapter E, Industrial Alcohol Plants, Bonded Warehouses, Denaturing Plants, and Denaturation, consisted of part I, Industrial Alcohol Plants, Bonded Warehouses, and Denaturing Plants and part II, Denaturation, and consisted of sections 5301 to 5320 and 5331 to 5334, respectively, prior to the general revision of this chapter by
PART I—RETURN OF MATERIALS USED IN THE MANUFACTURE OR RECOVERY OF DISTILLED SPIRITS
Editorial Notes
Prior Provisions
A prior part I, Industrial Alcohol Plants, Bonded Warehouses, and Denaturing Plants, consisted of sections 5301 to 5320, prior to the general revision of this chapter by
§5291. General
(a) Requirement
Every person disposing of any substance of the character used in the manufacture of distilled spirits, or disposing of denatured distilled spirits or articles from which distilled spirits may be recovered, shall, when required by the Secretary, render a correct return, in such form and manner as the Secretary may by regulations prescribe, showing the name and address of the person to whom each disposition was made, with such details, as to the quantity so disposed of or other information which the Secretary may require as to each such disposition, as will enable the Secretary to determine whether all taxes due with respect to any distilled spirits manufactured or recovered from any such substance, denatured, distilled spirits, or articles, have been paid. Every person required to render a return under this section shall keep such records as will enable such person to render a correct return. Such records shall be preserved for such period as the Secretary shall by regulations prescribe, and shall be kept available for inspection by any internal revenue officer during business hours.
(b) Cross references
(1) For the definition of distilled spirits, see section 5002(a)(8).
(2) For the definition of articles, see section 5002(a)(14).
(3) For penalty for violation of subsection (a), see section 5605.
(Added
Editorial Notes
Prior Provisions
Provisions similar to those comprising this section were contained in prior section 5213, act Aug. 16, 1954, ch. 736,
Amendments
1979—Subsec. (b)(1).
Subsec. (b)(2).
1976—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
PART II—REGULATION OF TRAFFIC IN CONTAINERS OF DISTILLED SPIRITS
Editorial Notes
Prior Provisions
A prior part II, Denaturation, consisted of section 5331 to 5334, prior to the general revision of this chapter by
§5301. General
(a) Requirements
Whenever in his judgment such action is necessary to protect the revenue, the Secretary is authorized, by the regulations prescribed by him and permits issued thereunder if required by him—
(1) to regulate the kind, size, branding, marking, sale, resale, possession, use, and reuse of containers (of a capacity of not more than 5 wine gallons) designed or intended for use for the sale of distilled spirits (within the meaning of such term as it is used in section 5002(a)(8) for other than industrial use; and
(2) to require, of persons manufacturing, dealing in, or using any such containers, the submission to such inspection, the keeping of such records, and the filing of such reports as may be deemed by him reasonably necessary in connection therewith.
Any requirements imposed under this section shall be in addition to any other requirements imposed by, or pursuant to, law and shall apply as well to persons not liable for tax under the internal revenue laws as to persons so liable.
(b) Disposition
Every person disposing of containers of the character used for the packaging of distilled spirits shall, when required by the Secretary for protection of the revenue, render a correct return, in such form and manner as the Secretary may by regulations prescribe, showing the name and address of the person to whom each disposition was made, with such details as to the quantities so disposed of or other information which the Secretary may require as to each such disposition. Every person required to render a return under this section shall keep such records as will enable such person to render a correct return. Such records shall be preserved for such period as the Secretary shall by regulations prescribe, and shall be kept available for inspection by any internal revenue officer during business hours.
(c) Refilling of liquor bottles
No person who sells, or offers for sale, distilled spirits, or agent or employee of such person, shall—
(1) place in any liquor bottle any distilled spirits whatsoever other than those contained in such bottle at the time of tax determination under the provisions of this chapter; or
(2) possess any liquor bottle in which any distilled spirits have been placed in violation of the provisions of paragraph (1); or
(3) by the addition of any substance whatsoever to any liquor bottle, in any manner alter or increase any portion of the original contents contained in such bottle at the time of tax determination under the provisions of this chapter; or
(4) possess any liquor bottle, any portion of the contents of which has been altered or increased in violation of the provisions of paragraph (3);
except that the Secretary may by regulations authorize the reuse of liquor bottles, under such conditions as he may by regulations prescribe. When used in this subsection the term "liquor bottle" shall mean a liquor bottle or other container which has been used for the bottling or packaging of distilled spirits under regulations issued pursuant to subsection (a).
(d) Closures
The immediate container of distilled spirits withdrawn from bonded premises, or from customs custody, on determination of tax shall bear a closure or other device which is designed so as to require breaking in order to gain access to the contents of such container. The preceding sentence shall not apply to containers of bulk distilled spirits.
(e) Penalty
For penalty for violation of this section, see section 5606.
(Added
Editorial Notes
Prior Provisions
A prior section 5301, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising subsecs. (a), (c), and (d) of this section were contained in prior section 5214, act Aug. 16, 1954, ch. 736,
A prior section 5302, act Aug. 16, 1954, ch. 736,
A prior section 5303, act Aug. 16, 1954, ch. 736,
A prior section 5304, act Aug. 16, 1954, ch. 736,
A prior section 5305, act Aug. 16, 1954, ch. 736,
A prior section 5306, act Aug. 16, 1954, ch. 736,
A prior section 5307, act Aug. 16, 1954, ch. 736,
A prior section 5308, act Aug. 16, 1954, ch. 736,
A prior section 5309, act Aug. 16, 1954, ch. 736,
A prior section 5310, act Aug. 16, 1954, ch. 736,
Amendments
1984—Subsec. (c).
Subsec. (d).
1979—Subsec. (a)(1).
1976—Subsecs. (a) to (c).
Statutory Notes and Related Subsidiaries
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1979 Amendment
Amendment by
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
PART III—MISCELLANEOUS PROVISIONS
Editorial Notes
Amendments
1976—
§5311. Detention of containers
It shall be lawful for any internal revenue officer to detain any container, containing or supposed to contain, distilled spirits, wines, or beer, when he has reason to believe that the tax imposed by law on such distilled spirits, wines, or beer has not been paid or determined as required by law, or that such container is being removed in violation of law; and every such container may be held by him at a safe place until it shall be determined whether the property so detained is liable by law to be proceeded against for forfeiture; but such summary detention shall not continue in any case longer than 72 hours without process of law or intervention of the officer to whom such detention is to be reported.
(Added
Editorial Notes
Prior Provisions
A prior section 5311, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5211, act Aug. 16, 1954, ch. 736,
Statutory Notes and Related Subsidiaries
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
§5312. Production and use of distilled spirits for experimental research
(a) Scientific institutions and colleges of learning
Under such regulations as the Secretary may prescribe and on the filing of such bonds and applications as he may require, any scientific university, college of learning, or institution of scientific research may produce, receive, blend, treat, test, and store distilled spirits, without payment of tax, for experimental or research use but not for consumption (other than organoleptic tests) or sale, in such quantities as may be reasonably necessary for such purposes.
(b) Experimental distilled spirits plants
Under such regulations as the Secretary may prescribe and on the filing of such bonds and applications as he may require, experimental distilled spirits plants may, at the discretion of the Secretary, be established and operated for specific and limited periods of time solely for experimentation in, or development of—
(1) sources of materials from which distilled spirits may be produced;
(2) processes by which distilled spirits may be produced or refined; or
(3) industrial uses of distilled spirits.
(c) Authority to exempt
The Secretary may by regulations provide for the waiver of any provision of this chapter (other than this section) to the extent he deems necessary to effectuate the purposes of this section, except that he may not waive the payment of any tax on distilled spirits removed from any such university, college, institution, or plant.
(Added
Editorial Notes
Prior Provisions
A prior section 5312, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior sections of act Aug. 16, 1954, prior to the general revision of this chapter by
| Present subsecs.: | Prior sections |
|---|---|
| (a) | 5215. |
| (b) | 5305. |
| (c) | 5215, 5306. |
The prior sections, act Aug. 16, 1954, ch. 736, are set out in
Amendments
1976—Subsecs. (a) to (c).
§5313. Withdrawal of distilled spirits from customs custody free of tax for use of the United States
Distilled spirits may be withdrawn free of tax from customs custody by the United States or any governmental agency thereof for its own use for nonbeverage purposes, under such regulations as may be prescribed by the Secretary.
(Added
Editorial Notes
Prior Provisions
A prior section 5313, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5310(b), act Aug. 16, 1954, ch. 736,
Amendments
1976—
§5314. Special applicability of certain provisions
(a) Puerto Rico
(1) Applicability
The provisions of this subsection shall not apply to the Commonwealth of Puerto Rico unless the Legislative Assembly of the Commonwealth of Puerto Rico expressly consents thereto in the manner prescribed in the constitution of the Commonwealth of Puerto Rico, for the enactment of a law.
(2) In general
Distilled spirits for the purposes authorized in section 5214(a)(2) and (3), denatured distilled spirits, and articles, as described in this paragraph, produced or manufactured in Puerto Rico, may be brought into the United States free of any tax imposed by section 5001(a)(9) or 7652(a)(1) for disposal under the same conditions as like spirits, denatured spirits, and articles, produced or manufactured in the United States; and the provisions of this chapter and regulations promulgated thereunder (and all other provisions of the internal revenue laws applicable to the enforcement thereof, including the penalties of special application thereto) relating to the production, bonded warehousing, and denaturation of distilled spirits, to the withdrawal of distilled spirits or denatured distilled spirits, and to the manufacture of articles from denatured distilled spirits, shall, insofar as applicable, extend to and apply in Puerto Rico in respect of—
(A) distilled spirits for shipment to the United States for the purposes authorized in section 5214(a)(2) and (3);
(B) distilled spirits for denaturation;
(C) denatured distilled spirits for shipment to the United States;
(D) denatured distilled spirits for use in the manufacture of articles for shipment to the United States; and
(E) articles, manufactured from denatured distilled spirits, for shipment to the United States.
(3) Withdrawals authorized by Puerto Rico
Distilled spirits (including denatured distilled spirits) may be withdrawn from the bonded premises of a distilled spirits plant in Puerto Rico pursuant to authorization issued under the laws of the Commonwealth of Puerto Rico; such spirits so withdrawn, and products containing such spirits so withdrawn, may not be brought into the United States free of tax.
(4) Costs of administration
Any expenses incurred by the Treasury Department in connection with the enforcement in Puerto Rico of the provisions of this subtitle and section 7652(a), and regulations promulgated thereunder, shall be charged against and retained out of taxes collected under this title in respect of commodities of Puerto Rican manufacture brought into the United States. The funds so retained shall be deposited as a reimbursement to the appropriation to which such expenses were originally charged.
(b) Virgin Islands
(1) In general
Distilled spirits for the purposes authorized in section 5214(a)(2) and (3), denatured distilled spirits, and articles, as described in this paragraph, produced or manufactured in the Virgin Islands, may be brought into the United States free of any tax imposed by section 7652(b)(1) for disposal under the same conditions as like spirits, denatured spirits, and articles, produced or manufactured in the United States; and the provisions of this chapter and regulations promulgated thereunder (and all other provisions of the internal revenue laws applicable to the enforcement thereof, including the penalties of special application thereto) relating to the production, bonded warehousing, and denaturation of distilled spirits, to the withdrawal of distilled spirits or denatured distilled spirits, and to the manufacture of articles from denatured distilled spirits, shall, insofar as applicable, extend to and apply in the Virgin Islands in respect of—
(A) distilled spirits for shipment to the United States for the purposes authorized in section 5214(a)(2) and (3);
(B) distilled spirits for denaturation;
(C) denatured distilled spirits for shipment to the United States;
(D) denatured distilled spirits for use in the manufacture of articles for shipment to the United States; and
(E) articles, manufactured from denatured distilled spirits, for shipment to the United States.
(2) Advance of funds
The insular government of the Virgin Islands shall advance to the Treasury of the United States such funds as may be required from time to time by the Secretary for the purpose of defraying all expenses incurred by the Treasury Department in connection with the enforcement in the Virgin Islands of paragraph (1) and regulations promulgated thereunder. The funds so advanced shall be deposited in a separate trust fund in the Treasury of the United States and shall be available to the Treasury Department for the purposes of this subsection.
(3) Regulations issued by Virgin Islands
The Secretary may authorize the Governor of the Virgin Islands, or his duly authorized agents, to issue or adopt such regulations, to approve such bonds, and to issue, suspend, or revoke such permits, as are necessary to carry out the provisions of this subsection. When regulations have been issued or adopted under this paragraph with concurrence of the Secretary he may exempt the Virgin Islands from any provisions of law and regulations otherwise made applicable by the provisions of paragraph (1), except that denatured distilled spirits, articles and distilled spirits for tax-free purposes which are brought into the United States from the Virgin Islands under the provisions of this subsection shall in all respects conform to the requirements of law and regulations imposed on like products of domestic manufacture.
(Added
Editorial Notes
Prior Provisions
A prior section 5314, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising subsec. (a)(2) of this section were contained in prior section 5318, act Aug. 16, 1954, ch. 736,
Amendments
2018—Subsec. (a)(2).
1976—Subsec. (a)(2).
Subsec. (b)(2), (3).
Statutory Notes and Related Subsidiaries
Effective Date of 1976 Amendment
Amendment by section 1905(a)(18) of
[§5315. Repealed. Pub. L. 94–455, title XIX, §1905(a)(19), Oct. 4, 1976, 90 Stat. 1820 ]
Section 5315, added
A prior section 5316, act Aug. 16, 1954, ch. 736,
A prior section 5317, act Aug. 16, 1954, ch. 736,
A prior section 5318, act Aug. 16, 1954, ch. 736,
A prior section 5319, act Aug. 16, 1954, ch. 736,
A prior section 5320, act Aug. 16, 1954, ch. 736,
A prior section 5331, act Aug. 16, 1954, ch. 736,
A prior section 5332, act Aug. 16, 1954, ch. 736,
A prior section 5333, act Aug. 16, 1954, ch. 736,
A prior section 5334, act Aug. 16, 1954, ch. 736,
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal effective on first day of first month which begins more than 90 days after Oct. 4, 1976, see section 1905(d) of
Subchapter F—Bonded and Taxpaid Wine Premises
Editorial Notes
Prior Provisions
A prior subchapter F, Bonded and Taxpaid Wine Premises, consisted of part I, Establishment, part II, Operations, part III, Cellar Treatment and Classification of Wine, and part IV, General, and comprised sections 5351 to 5357, 5361 to 5373, 5381 to 5388, and 5391 to 5392, respectively, prior to the general revision of this chapter by
PART I—ESTABLISHMENT
Editorial Notes
Prior Provisions
A prior part I consisted of
§5351. Bonded wine cellar
(a) In general
Any person establishing premises for the production, blending, cellar treatment, storage, bottling, packaging, or repackaging of untaxpaid wine (other than wine produced exempt from tax under section 5042), including the use of wine spirits in wine production, shall, before commencing operations, make application to the Secretary and, except as provided under section 5551(d), file bond and receive permission to operate.
(b) Definitions
For purposes of this chapter—
(1) Bonded wine cellar
The term "bonded wine cellar" means any premises described in subsection (a), including any such premises established by a taxpayer described in section 5551(d).
(2) Bonded winery
At the discretion of the Secretary, any bonded wine cellar that engages in production operations may be designated as a "bonded winery".
(Added
Editorial Notes
Prior Provisions
A prior section 5351, act Aug. 16, 1954, ch. 736,
Amendments
2015—
1976—
Statutory Notes and Related Subsidiaries
Effective Date of 2015 Amendment
Amendment by
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
§5352. Taxpaid wine bottling house
Any person bottling, packaging, or repackaging taxpaid wines shall, before commencing such operations, make application to the Secretary and receive permission to operate. Such premises shall be known as "tax-paid wine bottling houses."
(Added
Editorial Notes
Prior Provisions
A prior section 5352, act Aug. 16, 1954, ch. 736,
Amendments
1979—
1976—
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
§5353. Bonded wine warehouse
Any responsible warehouse company or other responsible person may, upon filing application with the Secretary and consent of the proprietor and the surety on the bond of any bonded wine cellar, under regulations prescribed by the Secretary, establish on such premises facilities for the storage of wines and allied products for credit purposes, to be known as a "bonded wine warehouse". The proprietor of the bonded wine cellar shall remain responsible in all respects for operations in the warehouse and the tax on the wine or wine spirit stored therein.
(Added
Editorial Notes
Prior Provisions
A prior section 5353, act Aug. 16, 1954, ch. 736,
Amendments
1976—
§5354. Bond
The bond for a bonded wine cellar shall be in such form, on such conditions, and with such adequate surety, as regulations issued by the Secretary shall prescribe, and shall be in a penal sum not less than the tax on any wine or distilled spirits possessed or in transit at any one time (taking into account the appropriate amount of credit with respect to such wine under section 5041(c)), but not less than $1,000 nor more than $50,000; except that where the tax on such wine and on such distilled spirits exceeds $250,000, the penal sum of the bond shall be not more than $100,000. Where additional liability arises as a result of deferral of payment of tax payable on any return, the Secretary may require the proprietor to file a supplemental bond in such amount as may be necessary to protect the revenue. The liability of any person on any such bond shall apply whether the transaction or operation on which the liability of the proprietor is based occurred on or off the proprietor's premises.
(Added
Editorial Notes
Prior Provisions
A prior section 5354, act Aug. 16, 1954, ch. 736,
Amendments
1996—
1984—
1976—
Statutory Notes and Related Subsidiaries
Effective Date of 1996 Amendment
Amendment by
Effective Date of 1984 Amendment
Amendment by
§5355. General provisions relating to bonds
The provisions of section 5551 (relating to bonds) shall be applicable to the bonds required under section 5354.
(Added
Editorial Notes
Prior Provisions
A prior section 5355, act Aug. 16, 1954, ch. 736,
§5356. Application
The application required by this part shall disclose, as regulations issued by the Secretary shall provide, such information as may be necessary to enable the Secretary to determine the location and extent of the premises, the type of operations to be conducted on such premises, and whether the operations will be in conformity with law and regulations.
(Added
Editorial Notes
Prior Provisions
A prior section 5356, act Aug. 16, 1954, ch. 736,
Amendments
1976—
§5357. Premises
Bonded wine cellar premises, including noncontiguous portions thereof, shall be so located, constructed, and equipped, as to afford adequate protection to the revenue, as regulations prescribed by the Secretary may provide.
(Added
Editorial Notes
Prior Provisions
A prior section 5357, act Aug. 16, 1954, ch. 736,
Amendments
1976—
PART II—OPERATIONS
Editorial Notes
Prior Provisions
A prior part II consisted of
Amendments
1997—
1979—
1976—
§5361. Bonded wine cellar operations
In addition to the operations described in section 5351, the proprietor of a bonded wine cellar may, subject to regulations prescribed by the Secretary, on such premises receive taxpaid wine for return to bond, reconditioning, or destruction; prepare for market and store commercial fruit products and by-products not taxable as wines; produce or receive distilling material or vinegar stock; produce (with or without added wine spirits, and without added sugar) or receive on wine premises, subject to tax as wine but not for sale or consumption as beverage wine, (1) heavy bodied blending wines and Spanish-type blending sherries, and (2) other wine products made from natural wine for nonbeverage purposes; and such other operations as may be conducted in a manner that will not jeopardize the revenue or conflict with wine operations.
(Added
Editorial Notes
Prior Provisions
A prior section 5361, act Aug. 16, 1954, ch. 736,
Amendments
1997—
1979—
1976—
Statutory Notes and Related Subsidiaries
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1979 Amendment
Amendment by
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
§5362. Removals of wine from bonded wine cellars
(a) Withdrawals on determination of tax
Wine may be withdrawn from bonded wine cellars on payment or determination of the tax thereon, under such regulations as the Secretary shall prescribe.
(b) Transfers of wine between bonded premises
(1) In general
Wine on which the tax has not been paid or determined may, under such regulations as the Secretary shall prescribe, be transferred in bond between bonded premises.
(2) Wine transferred to a distilled spirits plant may not be removed for consumption or sale as wine
Any wine transferred to the bonded premises of a distilled spirits plant—
(A) may be used in the manufacture of a distilled spirits product, and
(B) may not be removed from such bonded premises for consumption or sale as wine.
(3) Continued liability for tax
The liability for tax on wine transferred to the bonded premises of a distilled spirits plant pursuant to paragraph (1) shall (except as otherwise provided by law) continue until the wine is used in a distilled spirits product.
(4) Transfer in bond not treated as removal for consumption or sale
For purposes of this chapter, the removal of wine for transfer in bond between bonded premises shall not be treated as a removal for consumption or sale.
(5) Bonded premises
For purposes of this subsection, the term "bonded premises" means a bonded wine cellar or the bonded premises of a distilled spirits plant.
(c) Withdrawals of wine free of tax or without payment of tax
Wine on which the tax has not been paid or determined may, under such regulations and bonds as the Secretary may deem necessary to protect the revenue, be withdrawn from bonded wine cellars—
(1) without payment of tax for export by the proprietor or by any authorized exporter;
(2) without payment of tax for transfer to any foreign-trade zone;
(3) without payment of tax for use of certain vessels and aircraft as authorized by law;
(4) without payment of tax for transfer to any customs bonded warehouse;
(5) without payment of tax for use in the production of vinegar;
(6) without payment of tax for use in distillation in any distilled spirits plant authorized to produce distilled spirits;
(7) free of tax for experimental or research purposes by any scientific university, college of learning, or institution of scientific research;
(8) free of tax for use by or for the account of the proprietor or his agents for analysis or testing, organoleptic or otherwise; and
(9) free of tax for use by the United States or any agency thereof, and for use for analysis, testing, research, or experimentation by the governments of the several States and the District of Columbia or of any political subdivision thereof or by any agency of such governments. No bond shall be required of any such government or agency under this paragraph.
(d) Withdrawal free of tax of wine and wine products unfit for beverage use
Under such regulations as the Secretary may deem necessary to protect the revenue, wine, or wine products made from wine, when rendered unfit for beverage use, on which the tax has not been paid or determined, may be withdrawn from bonded wine cellars free of tax. The wine or wine products to be so withdrawn may be treated with methods or materials which render such wine or wine products suitable for their intended use. No wine or wine products so withdrawn shall contain more than 21 percent of alcohol by volume, or be used in the compounding of distilled spirits or wine for beverage use or in the manufacture of any product intended to be used in such compounding.
(e) Withdrawal from customs bonded warehouses for use of foreign embassies, legations, etc.
(1) In general
Notwithstanding any other provision of law, wine entered into customs bonded warehouses under subsection (c)(4) 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 wines from such warehouses free of tax. Wines transferred to customs bonded warehouses under subsection (c)(4) 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 wines.
(2) Withdrawal for domestic use
Wine entered into customs bonded warehouses under subsection (c)(4) for purposes of removal under paragraph (1) may be withdrawn therefrom for domestic use. Wines so withdrawn shall be treated as American goods exported and returned.
(3) Sale or unauthorized use prohibited
Wine withdrawn from customs bonded warehouses or otherwise brought into the United States free of tax for the official or family use of foreign governments, organizations, or individuals authorized to obtain wine free of tax shall not be sold and shall not be disposed of or possessed for any use other than an authorized use. The provisions of paragraphs (1)(B) and (3) of section 5043(a) are hereby extended and made applicable to any person selling, disposing of, or possessing any wine in violation of the preceding sentence, and to the wine involved in any such violation.
(Added
Editorial Notes
Prior Provisions
A prior section 5362, act Aug. 16, 1954, ch. 736,
Amendments
1980—Subsec. (c)(4).
Subsec. (e).
1979—Subsec. (b).
1976—Subsecs. (a) to (c).
Subsec. (c)(9).
Subsec. (d).
1967—Subsec. (d).
Statutory Notes and Related Subsidiaries
Effective Date of 1980 Amendment
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by section 1905(c)(4) of
Effective Date of 1967 Amendment
§5363. Taxpaid wine bottling house operations
In addition to the operations described in section 5352, the proprietor of a taxpaid wine bottling house may, subject to regulations issued by the Secretary, on such premises mix wine of the same kind and taxable grade to facilitate handling; preserve, filter, or clarify wine; and conduct operations not involving wine where such operations will not jeopardize the revenue or conflict with wine operations.
(Added
Editorial Notes
Prior Provisions
A prior section 5363, act Aug. 16, 1954, ch. 736,
Amendments
1979—
1976—
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
§5364. Wine imported in bulk
Natural wine (as defined in section 5381) imported or brought into the United States in bulk containers may, under such regulations as the Secretary may prescribe, be withdrawn from customs custody and transferred in such bulk containers to the premises of a bonded wine cellar without payment of the internal revenue tax imposed on such wine. The proprietor of a bonded wine cellar to which such wine is transferred shall become liable for the tax on the wine withdrawn from customs custody under this section upon release of the wine from customs custody, and the importer, or the person bringing such wine into the United States, shall thereupon be relieved of the liability for such tax.
(Added
Editorial Notes
Prior Provisions
A prior section 5364, added
Another prior section 5364, act Aug. 16, 1954, ch. 736,
Amendments
1998—
Statutory Notes and Related Subsidiaries
Effective Date of 1998 Amendment
Amendment by
Effective Date
§5365. Segregation of operations
The Secretary may require by regulations such segregation of operations within the premises, by partitions or otherwise, as may be necessary to prevent jeopardy to the revenue, to prevent confusion between untaxpaid wine operations and such other operations as are authorized in this subchapter, to prevent substitution with respect to the several methods of producing effervescent wines, and to prevent the commingling of standard wines with other than standard wines.
(Added
Editorial Notes
Prior Provisions
A prior section 5365, act Aug. 16, 1954, ch. 736,
Amendments
1979—
1976—
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
§5366. Supervision
The Secretary may by regulations require that operations at a bonded wine cellar or taxpaid wine bottling house be supervised by an internal revenue officer where necessary for the protection of the revenue or for the proper enforcement of this subchapter.
(Added
Editorial Notes
Prior Provisions
A prior section 5366, act Aug. 16, 1954, ch. 736,
Amendments
1976—
§5367. Records
The proprietor of a bonded wine cellar or a tax-paid wine bottling house shall keep such records and file such returns, in such form and containing such information, as the Secretary may by regulations provide.
(Added
Editorial Notes
Prior Provisions
A prior section 5367, act Aug. 16, 1954, ch. 736,
Amendments
1976—
§5368. Gauging and marking
(a) Gauging and marking
All wine or wine spirits shall be locked, sealed, and gauged, and shall be marked, branded, labeled, or otherwise identified, in such manner as the Secretary may by regulations prescribe.
(b) Marking
Wines shall be removed in such containers (including vessels, vehicles, and pipelines) bearing such marks and labels evidencing compliance with this chapter, as the Secretary may by regulations prescribe.
(Added
Editorial Notes
Prior Provisions
A prior section 5368, act Aug. 16, 1954, ch. 736,
Amendments
1976—
Statutory Notes and Related Subsidiaries
Effective Date of 1976 Amendment
Amendment by section 1905(a)(20) of
§5369. Inventories
Each proprietor of premises subject to the provisions of this subchapter shall take and report such inventories as the Secretary may by regulations prescribe.
(Added
Editorial Notes
Prior Provisions
A prior section 5369, act Aug. 16, 1954, ch. 736,
Amendments
1976—
§5370. Losses
(a) General
No tax shall be collected in respect of any wines lost or destroyed while in bond, except that tax shall be collected—
(1) Theft
In the case of loss by theft, unless the Secretary shall find that the theft occurred without connivance, collusion, fraud, or negligence on the part of the proprietor or other person responsible for the tax, or the owner, consignor, consignee, bailee, or carrier, or the agents or employees of any of them; and
(2) Voluntary destruction
In the case of voluntary destruction, unless the wine was destroyed under Government supervision, or on such adequate notice to, and approval by, the Secretary as regulations shall provide.
(b) Proof of loss
In any case in which the wine is lost or destroyed, whether by theft or otherwise, the Secretary may require by regulations the proprietor of the bonded wine cellar 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 on the proprietor or other person liable for the 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, owner, consignor, consignee, bailee, or carrier, or the agents or employees of any of them.
(Added
Editorial Notes
Prior Provisions
A prior section 5370, act Aug. 16, 1954, ch. 736,
Amendments
1976—
§5371. Insurance coverage, etc.
Any remission, abatement, refund, or credit of, or other relief from, taxes on wines or wine spirits authorized by law shall be allowed only to the extent that the claimant is not indemnified or recompensed for the tax.
(Added
Editorial Notes
Prior Provisions
A prior section 5371, act Aug. 16, 1954, ch. 736,
§5372. Sampling
Under regulations prescribed by the Secretary, wine may be utilized in any bonded wine cellar for testing, tasting, or sampling, free of tax.
(Added
Editorial Notes
Prior Provisions
A prior section 5372, act Aug. 16, 1954, ch. 736,
Amendments
1976—
§5373. Wine spirits
(a) In general
The wine spirits authorized to be used in wine production shall be brandy or wine spirits produced in a distilled spirits plant (with or without the use of water to facilitate extraction and distillation) exclusively from—
(1) fresh or dried fruit, or their residues,
(2) the wine or wine residues, therefrom, or
(3) special natural wine under such conditions as the Secretary may by regulations prescribe;
except that where, in the production of natural wine or special natural wine, sugar has been used, the wine or the residuum thereof may not be used if the unfermented sugars therein have been refermented. Such wine spirits shall not be reduced with water from distillation proof, nor be distilled, unless regulations otherwise provide, at less than 140 degrees of proof (except that commercial brandy aged in wood for a period of not less than 2 years, and barreled at not less than 100 degrees of proof, shall be deemed wine spirits for the purpose of this subsection).
(b) Withdrawal of wine spirits
(1) The proprietor of any bonded wine cellar may withdraw and receive wine spirits without payment of tax from the bonded premises of any distilled spirits plant, or from any bonded wine cellar as provided in paragraph (2), for use in the production of natural wine, for addition to concentrated or unconcentrated juice for use in wine production, or for such other uses as may be authorized in this subchapter.
(2) Wine spirits so withdrawn, and not used in wine production or as otherwise authorized in this subchapter, may, as provided by regulations prescribed by the Secretary, be transferred to the bonded premises of any distilled spirits plant or bonded wine cellar, or may be taxpaid and removed as provided by law.
(3) On such use, transfer, or taxpayment, the Secretary shall credit the proprietor with the amount of wine spirits so used or transferred or taxpaid and, in addition, with such portion of wine spirits so withdrawn as may have been lost either in transit or on the bonded wine cellar premises, to the extent allowable under section 5008(a). Where the proprietor has used wine spirits in actual wine production but in violation of the requirements of this subchapter, the Secretary shall also extend such credit to the wine spirits so used if the proprietor satisfactorily shows that such wine spirits were not knowingly used in violation of law.
(4) Suitable samples of brandy or wine spirits may, under regulations prescribed by the Secretary, be withdrawn free of tax from the bonded premises of any distilled spirits plant, bonded wine cellar, or authorized experimental premises, for analysis or testing.
(c) Distillates containing aldehydes
When the Secretary deems such removal and use will not jeopardize the revenue nor unduly increase administrative supervision, distillates containing aldehydes may, under such regulations as the Secretary may prescribe, be removed without payment of tax from the bonded premises of a distilled spirits plant to an adjacent bonded wine cellar and used therein in fermentation of wine to be used as distilling material at the distilled spirits plant from which such unfinished distilled spirits were removed.
(Added
Editorial Notes
Prior Provisions
A prior section 5373, act Aug. 16, 1954, ch. 736,
Amendments
1976—
1968—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 1968 Amendment
PART III—CELLAR TREATMENT AND CLASSIFICATION OF WINE
Editorial Notes
Prior Provisions
A prior part III consisted of
§5381. Natural wine
Natural wine is the product of the juice or must of sound, ripe grapes or other sound, ripe fruit, made with such cellar treatment as may be authorized under section 5382 and containing not more than 21 percent by weight of total solids. Any wine conforming to such definition except for having become substandard by reason of its condition shall be deemed not to be natural wine, unless the condition is corrected.
(Added
Editorial Notes
Prior Provisions
A prior section 5381, act Aug. 16, 1954, ch. 736,
Amendments
1979—
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
§5382. Cellar treatment of natural wine
(a) Proper cellar treatment
(1) In general
Proper cellar treatment of natural wine constitutes—
(A) subject to paragraph (2), those practices and procedures in the United States, whether historical or newly developed, of using various methods and materials to correct or stabilize the wine, or the fruit juice from which it is made, so as to produce a finished product acceptable in good commercial practice in accordance with regulations prescribed by the Secretary; and
(B) subject to paragraph (3), in the case of wine produced and imported subject to an international agreement or treaty, those practices and procedures acceptable to the United States under such agreement or treaty.
(2) Recognition of continuing treatment
For purposes of paragraph (1)(A), where a particular treatment has been used in customary commercial practice in the United States, it shall continue to be recognized as a proper cellar treatment in the absence of regulations prescribed by the Secretary finding such treatment not to be proper cellar treatment within the meaning of this subsection.
(3) Certification of practices and procedures for imported wine
(A) In general
In the case of imported wine produced after December 31, 2004, the Secretary shall accept the practices and procedures used to produce such wine, if, at the time of importation—
(i) the Secretary has on file or is provided with a certification from the government of the producing country, accompanied by an affirmed laboratory analysis, that the practices and procedures used to produce the wine constitute proper cellar treatment under paragraph (1)(A),
(ii) the Secretary has on file or is provided with such certification, if any, as may be required by an international agreement or treaty under paragraph (1)(B), or
(iii) in the case of an importer that owns or controls or that has an affiliate that owns or controls a winery operating under a basic permit issued by the Secretary, the importer certifies that the practices and procedures used to produce the wine constitute proper cellar treatment under paragraph (1)(A).
(B) Affiliate defined
For purposes of this paragraph, the term "affiliate" has the meaning given such term by section 117(a)(4) of the Federal Alcohol Administration Act (
(b) Specifically authorized treatments
The practices and procedures specifically enumerated in this subsection shall be deemed proper cellar treatment for natural wine:
(1) The preparation and use of pure concentrated or unconcentrated juice or must. Concentrated juice or must reduced with water to its original density or to not less than 22 degrees Brix or unconcentrated juice or must reduced with water to not less than 22 degrees Brix shall be deemed to be juice or must, and shall include such amounts of water to clear crushing equipment as regulations prescribed by the Secretary may provide.
(2) The addition to natural wine, or to concentrated or unconcentrated juice or must, from one kind of fruit, of wine spirits (whether or not tax-paid) distilled in the United States from the same kind of fruit; except that (A) the wine, juice, or concentrate shall not have an alcoholic content in excess of 24 percent by volume after the addition of wine spirits, and (B) in the case of still wines, wine spirits may be added in any State only to natural wines produced by fermentation in bonded wine cellars located within the same State.
(3) Amelioration and sweetening of natural grape wines in accordance with section 5383.
(4) Amelioration and sweetening of natural wines from fruits other than grapes in accordance with section 5384.
(5) In the case of effervescent wines, such preparations for refermentation and for dosage as may be acceptable in good commercial practice, but only if the alcoholic content of the finished product does not exceed 14 percent by volume.
(6) The natural darkening of the sugars or other elements in juice, must, or wine due to storage, concentration, heating processes, or natural oxidation.
(7) The blending of natural wines with each other or with heavy-bodied blending wine or with concentrated or unconcentrated juice, whether or not such juice contains wine spirits, if the wines, juice, or wine spirits are from the same kind of fruit.
(8) Such use of acids to correct natural deficiencies and stabilize the wine as may be acceptable in good commercial practice.
(9) The addition—
(A) to natural grape or berry wine of the winemaker's own production, of volatile fruit-flavor concentrate produced from the same kind and variety of grape or berry at a plant qualified under section 5511, or
(B) to natural fruit wine (other than grape or berry) of the winemaker's own production, of volatile fruit-flavor concentrate produced from the same kind of fruit at such a plant,
so long as the proportion of the volatile fruit-flavor concentrate to the wine does not exceed the proportion of the volatile fruit-flavor concentrate to the original juice or must from which it was produced. The transfer of volatile fruit-flavor concentrate from a plant qualified under section 5511 to a bonded wine cellar and its storage and use in such a cellar shall be under such applications and bonds, and under such other requirements, as may be provided in regulations prescribed by the Secretary.
(c) Other authorized treatment
The Secretary may by regulations prescribe limitations on the preparation and use of clarifying, stabilizing, preserving, fermenting, and corrective methods or materials, to the extent that such preparation or use is not acceptable in good commercial practice.
(d) Use of juice or must from which volatile fruit flavor has been removed
For purposes of this part, juice, concentrated juice, or must processed at a plant qualified under section 5511 may be deemed to be pure juice, concentrated juice, or must even though volatile fruit flavor has been removed if, at a plant qualified under section 5511 or at the bonded wine cellar, there is added to such juice, concentrated juice, or must, or (in the case of a bonded wine cellar) to wine of the winemaker's own production made therefrom, either the identical volatile flavor removed or—
(1) in the case of natural grape or berry wine of the winemaker's own production, an equivalent quantity of volatile fruit-flavor concentrate produced at such a plant and derived from the same kind and variety of grape or berry, or
(2) in the case of natural fruit wine (other than grape or berry wine) of the winemaker's own production, an equivalent quantity of volatile fruit-flavor concentrate produced at such a plant and derived from the same kind of fruit.
(Added
Editorial Notes
Prior Provisions
A prior section 5382, act Aug. 16, 1954, ch. 736,
Amendments
2006—Subsec. (a)(1)(A).
2004—Subsec. (a).
1976—
1968—Subsec. (b)(2)(B).
1965—Subsec. (b)(2).
1964—Subsec. (b)(9).
Subsec. (d).
Statutory Notes and Related Subsidiaries
Effective Date of 2004 Amendment
Effective Date of 1968 Amendment
Amendment by
Effective Date of 1965 Amendment
Amendment by
Effective Date of 1964 Amendment
§5383. Amelioration and sweetening limitations for natural grape wines
(a) Sweetening of grape wines
Any natural grape wine may be sweetened after fermentation and before taxpayment with pure dry sugar or liquid sugar if the total solids content of the finished wine does not exceed 12 percent of the weight of the wine and the alcoholic content of the finished wine after sweetening is not more than 14 percent by volume; except that the use under this subsection of liquid sugar shall be limited so that the resultant volume will not exceed the volume which could result from the maximum authorized use of pure dry sugar only.
(b) High acid wines
(1) Amelioration
Before, during, and after fermentation, ameliorating materials consisting of pure dry sugar or liquid sugar, water, or a combination of sugar and water, may be added to natural grape wines of a winemaker's own production when such wines are made from juice having a natural fixed acid content of more than five parts per thousand (calculated before fermentation and as tartaric acid). Ameliorating material so added shall not reduce the natural fixed acid content of the juice to less than five parts per thousand, nor exceed 35 percent of the volume of juice (calculated exclusive of pulp) and ameliorating material combined.
(2) Sweetening
Any wine produced under this subsection may be sweetened by the producer thereof, after amelioration and fermentation, with pure dry sugar or liquid sugar if the total solids content of the finished wine does not exceed (A) 17 percent by weight if the alcoholic content is more than 14 percent by volume, or (B) 21 percent by weight if the alcoholic content is not more than 14 percent by volume. The use under this paragraph of liquid sugar shall be limited to cases where the resultant volume does not exceed the volume which could result from the maximum authorized use of pure dry sugar only.
(3) Wine spirits
Wine spirits may be added (whether or not wine spirits were previously added) to wine produced under this subsection only if the wine contains not more than 14 percent of alcohol by volume derived from fermentation.
(Added
Editorial Notes
Prior Provisions
A prior section 5383, act Aug. 16, 1954, ch. 736,
Amendments
1968—Subsec. (a).
Subsec. (b).
1965—
Statutory Notes and Related Subsidiaries
Effective Date of 1968 Amendment
Amendment by
Effective Date of 1965 Amendment
§5384. Amelioration and sweetening limitations for natural fruit and berry wines
(a) In general
To natural wine made from berries or fruit other than grapes, pure dry sugar or liquid sugar may be added to the juice in the fermenter, or to the wine after fermentation; but only if such wine has not more than 14 percent alcohol by volume after complete fermentation, or after complete fermentation and sweetening, and a total solids content not in excess of 21 percent by weight; and except that the use under this subsection of liquid sugar shall be limited so that the resultant volume will not exceed the volume which could result from the maximum authorized use of pure dry sugar only.
(b) Ameliorated fruit and berry wines
(1) Any natural fruit or berry wine (other than grape wine) of a winemaker's own production may, if not made under subsection (a) of this section, be ameliorated to correct high acid content. Ameliorating material calculations and accounting shall be separate for wines made from each different kind of fruit.
(2) Pure dry sugar or liquid sugar may be used in the production of wines under this subsection for the purpose of correcting natural deficiencies, but not to such an extent as would reduce the natural fixed acid in the corrected juice or wine to five parts per thousand. The quantity of sugar so used shall not exceed the quantity which would have been required to adjust the juice, prior to fermentation, to a total solids content of 25 degrees (Brix). Such sugar shall be added prior to the completion of fermentation of the wine. After such addition of the sugar, the wine or juice shall be treated and accounted for as provided in section 5383(b), covering the production of high acid grape wines, except that—
(A) Natural fixed acid shall be calculated as malic acid for apple wine and as citric acid for other fruit and berry wines, instead of tartaric acid;
(B) Juice adjusted with pure dry sugar or liquid sugar as provided in this paragraph shall be treated in the same manner as original natural juice under the provisions of section 5383(b); except that if liquid sugar is used, the volume of water contained therein must be deducted from the volume of ameliorating material authorized;
(C) Wines made under this subsection shall have a total solids content of not more than 21 percent by weight, whether or not wine spirits have been added; and
(D) Wines made exclusively from any fruit or berry with a natural fixed acid of 20 parts per thousand or more (before any correction of such fruit or berry) shall be entitled to a volume of ameliorating material not in excess of 60 percent (in lieu of 35 percent).
(Added
Editorial Notes
Prior Provisions
A prior section 5384, act Aug. 16, 1954, ch. 736,
Amendments
1997—Subsec. (b)(2)(D).
1968—Subsec. (a).
1965—Subsec. (a).
Subsec. (b).
Subsec. (b)(1).
Subsec. (b)(2).
Subsec. (b)(2)(B).
Subsec. (b)(2)(C).
Statutory Notes and Related Subsidiaries
Effective Date of 1997 Amendment
Effective Date of 1968 Amendment
Amendment by
Effective Date of 1965 Amendment
Amendment by
§5385. Specially sweetened natural wines
(a) Definition
Specially sweetened natural wine is the product made by adding to natural wine of the winemaker's own production a sufficient quantity of pure dry sugar, or juice or concentrated juice from the same kind of fruit, separately or in combination, to produce a finished product having a total solids content in excess of 17 percent by weight and an alcoholic content of not more than 14 percent by volume, and shall include extra sweet kosher wine and similarly heavily sweetened wines.
(b) Cellar treatment
Specially sweetened natural wines may be blended with each other, or with natural wine or heavy bodied blending wine in the further production of specially sweetened natural wine only, if the wines so blended are made from the same kind of fruit. Wines produced under this section may be cellar treated under the provisions of section 5382(a) and (c). Wine spirits may not be added to specially sweetened natural wine.
(Added
Editorial Notes
Prior Provisions
A prior section 5385, act Aug. 16, 1954, ch. 736,
Amendments
1968—Subsec. (a).
Subsec. (b).
1965—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 1968 Amendment
Amendment by
Effective Date of 1965 Amendment
Amendment by
§5386. Special natural wines
(a) In general
Special natural wines are the products made, pursuant to a formula approved under this section, from a base of natural wine (including heavy-bodied blending wine) exclusively, with the addition, before, during or after fermentation, of natural herbs, spices, fruit juices, aromatics, essences, and other natural flavorings in such quantities or proportions as to enable such products to be distinguished from any natural wine not so treated, and with or without carbon dioxide naturally or artificially added, and with or without the addition, separately or in combination, of pure dry sugar or a solution of pure dry sugar and water, or caramel. No added wine spirits or alcohol or other spirits shall be used in any wine under this section except as may be contained in the natural wine (including heavy-bodied blending wine) used as a base or except as may be necessary in the production of approved essences or similar approved flavorings. The Brix degree of any solution of pure dry sugar and water used may be limited by regulations prescribed by the Secretary in accordance with good commercial practice.
(b) Cellar treatment
Special natural wines may be cellar treated under the provisions of section 5382(a) and (c).
(Added
Editorial Notes
Prior Provisions
A prior section 5386, act Aug. 16, 1954, ch. 736,
Amendments
1976—
1968—Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 1968 Amendment
Amendment by
§5387. Agricultural wines
(a) In general
Wines made from agricultural products other than the juice of fruit shall be made in accordance with good commercial practice as may be prescribed by the Secretary by regulations. Wines made in accordance with such regulations shall be classed as "standard agricultural wines". Wines made under this section may be cellar treated under the provisions of section 5382(a) and (c).
(b) Limitations
No wine spirits may be added to wines produced under this section, nor shall any coloring material or herbs or other flavoring material (except hops in the case of honey wine) be used in their production.
(c) Restriction on blending
Wines from different agricultural commodities shall not be blended together.
(Added
Editorial Notes
Prior Provisions
A prior section 5387, act Aug. 16, 1954, ch. 736,
Amendments
1976—
1968—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 1968 Amendment
Amendment by
§5388. Designation of wines
(a) Standard wines
Standard wines may be removed from premises subject to the provisions of this subchapter and be marked, transported, and sold under their proper designation as to kind and origin, or, if there is no such designation known to the trade or consumers, then under a truthful and adequate statement of composition.
(b) Other wines
Wines other than standard wines may be removed for consumption or sale and be marked, transported, or sold only under such designation as to kind and origin as adequately describes the true composition of such products and as adequately distinguish them from standard wines, as regulations prescribed by the Secretary shall provide.
(c) Use of semi-generic designations
(1) In general
Semi-generic designations may be used to designate wines of an origin other than that indicated by such name only if—
(A) there appears in direct conjunction therewith an appropriate appellation of origin disclosing the true place of origin of the wine, and
(B) the wine so designated conforms to the standard of identity, if any, for such wine contained in the regulations under this section or, if there is no such standard, to the trade understanding of such class or type.
(2) Determination of whether name is semi-generic
(A) In general
Except as provided in subparagraph (B), a name of geographic significance, which is also the designation of a class or type of wine, shall be deemed to have become semi-generic only if so found by the Secretary.
(B) Certain names treated as semi-generic
The following names shall be treated as semi-generic: Angelica, Burgundy, Claret, Chablis, Champagne, Chianti, Malaga, Marsala, Madeira, Moselle, Port, Rhine Wine or Hock, Sauterne, Haut Sauterne, Sherry, Tokay.
(3) Special rule for use of certain semi-generic designations
(A) In general
In the case of any wine to which this paragraph applies—
(i) paragraph (1) shall not apply,
(ii) in the case of wine of the European Community, designations referred to in subparagraph (C)(i) may be used for such wine only if the requirement of subparagraph (B)(ii) is met, and
(iii) in the case any other wine bearing a brand name, or brand name and fanciful name, semi-generic designations may be used for such wine only if the requirements of clauses (i), (ii), and (iii) of subparagraph (B) are met.
(B) Requirements
(i) The requirement of this clause is met if there appears in direct conjunction with the semi-generic designation an appropriate appellation of origin disclosing the origin of the wine.
(ii) The requirement of this clause is met if the wine conforms to the standard of identity, if any, for such wine contained in the regulations under this section or, if there is no such standard, to the trade understanding of such class or type.
(iii) The requirement of this clause is met if the person, or its successor in interest, using the semi-generic designation held a Certificate of Label Approval or Certificate of Exemption from Label Approval issued by the Secretary for a wine label bearing such brand name, or brand name and fanciful name, before March 10, 2006, on which such semi-generic designation appeared.
(C) Wines to which paragraph applies
(i) In general
Except as provided in clause (ii), this paragraph shall apply to any grape wine which is designated as Burgundy, Claret, Chablis, Champagne, Chianti, Malaga, Marsala, Madeira, Moselle, Port, Retsina, Rhine Wine or Hock, Sauterne, Haut Sauterne, Sherry, or Tokay.
(ii) Exception
This paragraph shall not apply to wine which—
(I) contains less than 7 percent or more than 24 percent alcohol by volume,
(II) is intended for sale outside the United States, or
(III) does not bear a brand name.
(Added
Editorial Notes
Prior Provisions
A prior section 5388, act Aug. 16, 1954, ch. 736,
Amendments
2006—Subsec. (c)(3).
1997—Subsec. (c).
1976—
Statutory Notes and Related Subsidiaries
Effective Date of 2006 Amendment
Effective Date of 1997 Amendment
PART IV—GENERAL
Editorial Notes
Prior Provisions
A prior part IV consisted of
Amendments
1979—
§5391. Exemption from distilled spirits taxes
Notwithstanding any other provision of law, the tax imposed by section 5001 on distilled spirits shall not, except as provided in this subchapter, be assessed, levied, or collected from the proprietor of any bonded wine cellar with respect to his use of wine spirits in wine production, in such premises; except that, whenever wine or wine spirits are used in violation of this subchapter, the applicable tax imposed by section 5001 shall be collected unless the proprietor satisfactorily shows that such wine or wine spirits were not knowingly used in violation of law.
(Added
Editorial Notes
Prior Provisions
A prior section 5391, act Aug. 16, 1954, ch. 736,
Amendments
1979—
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
§5392. Definitions
(a) Standard wine
For purposes of this subchapter the term "standard wine" means natural wine, specially sweetened natural wine, special natural wine, and standard agricultural wine, produced in accordance with the provisions of sections 5381, 5385, 5386, and 5387, respectively.
(b) Heavy bodied blending wine
For purposes of this subchapter the term "heavy bodied blending wine" means wine made from fruit without added sugar, and with or without added wine spirits, and conforming to the definition of natural wine in all respects except as to maximum total solids content.
(c) Pure sugar
For purposes of this subchapter the term "pure sugar" means pure refined sugar, suitable for human consumption, having a dextrose equivalent of not less than 95 percent on a dry basis, and produced from cane, beets, or fruit, or from grain or other sources of starch. Invert sugar syrup produced from such pure sugar by recognized methods of inversion may be used to prepare any sugar syrup, or solution of water and pure sugar, authorized in this subchapter.
(d) Total solids
For purposes of this subchapter the term "total solids", in the case of wine, means the degrees Brix of the dealcoholized wine.
(e) Same kind of fruit
For purposes of this subchapter the term "same kind of fruit" includes, in the case of grapes, all of the several species and varieties of grapes. In the case of fruits other than grapes, this term includes all of the several species and varieties of any given kind; except that this shall not preclude a more precise identification of the composition of the product for the purpose of its designation.
(f) Own production
For purposes of this subchapter the term "own production", when used with reference to wine in a bonded wine cellar, means wine produced by fermentation in the same bonded wine cellar, whether or not produced by a predecessor in interest at such bonded wine cellar. This term may also include, under regulations, wine produced by fermentation in bonded wine cellars owned or controlled by the same or affiliated persons or firms when located within the same State; the term "affiliated" shall be deemed to include any one or more bonded wine cellar proprietors associated as members of any farm cooperative, or any one or more bonded wine cellar proprietors affiliated within the meaning of section 117(a)(5) of the Federal Alcohol Administration Act, as amended (
(g) Liquid sugar
For purposes of this subchapter the term "liquid sugar" means a substantially colorless pure sugar and water solution containing not less than 60 percent pure sugar by weight (60 degrees Brix.)
(Added
Editorial Notes
Prior Provisions
A prior section 5392, act Aug. 16, 1954, ch. 736,
Amendments
2018—Subsec. (f).
1976—Subsec. (f).
1965—Subsec. (c).
Subsec. (g).
Statutory Notes and Related Subsidiaries
Effective Date of 1976 Amendment
Amendment by
Effective Date of 1965 Amendment
Amendment by
Subchapter G—Breweries
Editorial Notes
Prior Provisions
A prior subchapter G consisted of parts I and II, contained sections 5401 to 5403 and 5411 to 5416, respectively, prior to the general revision of this chapter by
PART I—ESTABLISHMENT
Editorial Notes
Prior Provisions
A prior part I consisted of
§5401. Qualifying documents
(a) Notice
Every brewer shall, before commencing or continuing business, file with the officer designated for that purpose by the Secretary a notice in writing, in such form and containing such information as the Secretary shall by regulations prescribe as necessary to protect and insure collection of the revenue.
(b) Bonds
Every brewer, on filing notice as provided by subsection (a) of his intention to commence business, shall execute a bond to the United States in such reasonable penal sum as the Secretary shall by regulation prescribe as necessary to protect and insure collection of the revenue. The bond shall be conditioned (1) that the brewer shall pay, or cause to be paid, as herein provided, the tax required by law on all beer, including all beer removed for transfer to the brewery from other breweries owned by him as provided in section 5414; (2) that he shall pay or cause to be paid the tax on all beer removed free of tax for export as provided in section 5053(a), which beer is not exported or returned to the brewery; and (3) that he shall in all respects faithfully comply, without fraud or evasion, with all requirements of law relating to the production and sale of any beer aforesaid. Once in every 4 years, or whenever required so to do by the Secretary, the brewer shall execute a new bond or a continuation certificate, in the penal sum prescribed in pursuance of this section, and conditioned as above provided, which bond or continuation certificate shall be in lieu of any former bond or bonds, or former continuation certificate or certificates, of such brewer in respect to all liabilities accruing after its approval. If the contract of surety between the brewer and the surety on an expiring bond or continuation certificate is continued in force between the parties for a succeeding period of not less than 4 years, the brewer may submit, in lieu of a new bond, a certificate executed, under penalties of perjury, by the brewer and the surety attesting to continuation of the bond, which certificate shall constitute a bond subject to all provisions of law applicable to bonds given pursuant to this section.
(c) Exception from bond requirements for certain breweries
Subsection (b) shall not apply to any taxpayer for any period described in section 5551(d).
(Added
Editorial Notes
Prior Provisions
A prior section 5401, act Aug. 16, 1954, ch. 736,
Amendments
2015—Subsec. (c).
1976—
1971—Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 2015 Amendment
Amendment by
Effective Date of 1971 Amendment
Amendment by
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
§5402. Definitions
(a) Brewery
The brewery shall consist of the land and buildings described in the brewer's notice. The continuity of the brewery must be unbroken except where separated by public passageways, streets, highways, waterways, or carrier rights-of-way, or partitions; and if parts of the brewery are so separated they must abut on the dividing medium and be adjacent to each other. Notwithstanding the preceding sentence, facilities under the control of the brewer for case packing, loading, or storing which are located within reasonable proximity to the brewery packaging facilities may be approved by the Secretary as a part of the brewery if the revenue will not be jeopardized thereby.
(b) Brewer
For definition of brewer, see section 5052(d).
(Added
Editorial Notes
Prior Provisions
A prior section 5402, act Aug. 16, 1954, ch. 736,
Amendments
2005—Subsec. (b).
1976—
1971—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 2005 Amendment
Amendment by
Effective Date of 1971 Amendment
Amendment by
§5403. Cross references
(1) For authority of Secretary to disapprove brewers' bonds, see section 5551.
(2) For authority of Secretary to require the installation and use of meters, tanks, and other apparatus, see section 5552.
(3) For deposit of United States bonds or notes in lieu of sureties, see
(Added
Editorial Notes
Prior Provisions
A prior section 5403, act Aug. 16, 1954, ch. 736,
Amendments
1982—Par. (3).
1976—Par. (1).
PART II—OPERATIONS
Editorial Notes
Prior Provisions
A prior part II consisted of sections 5411 to 5416, prior to the general revision of this chapter by
Amendments
1997—
1971—
§5411. Use of brewery
The brewery shall be used under regulations prescribed by the Secretary only for the purpose of producing, packaging, and storing beer, cereal beverages containing less than one-half of 1 percent of alcohol by volume, vitamins, ice, malt, malt sirup, and other byproducts and of soft drinks; for the purpose of processing spent grain, carbon dioxide, and yeast; and for such other purposes as the Secretary by regulation may find will not jeopardize the revenue.
(Added
Editorial Notes
Prior Provisions
A prior section 5411, act Aug. 16, 1954, ch. 736,
Amendments
1976—
1971—
Statutory Notes and Related Subsidiaries
Effective Date of 1971 Amendment
Amendment by
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
§5412. Removal of beer in containers or by pipeline
Beer may be removed from the brewery for consumption or sale only in hogsheads, packages, and similar containers, marked, branded, or labeled in such manner as the Secretary may by regulation require, except that beer may be removed from the brewery pursuant to section 5414 or by pipeline to contiguous distilled spirits plants under section 5222.
(Added
Editorial Notes
Prior Provisions
A prior section 5412, act Aug. 16, 1954, ch. 736,
Amendments
2017—
1976—
1971—
Statutory Notes and Related Subsidiaries
Effective Date of 2017 Amendment
Effective Date of 1971 Amendment
Amendment by
§5413. Brewers procuring beer from other brewers
A brewer, under such regulations as the Secretary shall prescribe, may obtain beer in his own hogsheads, barrels, and kegs, marked with his name and address, from another brewer, with taxpayment thereof to be by the producer in the manner prescribed by section 5054.
(Added
Editorial Notes
Prior Provisions
A prior section 5413, act Aug. 16, 1954, ch. 736,
Amendments
1976—
§5414. Transfer of beer between bonded facilities
(a) In general
Beer may be removed from one brewery to another brewery, without payment of tax, and may be mingled with beer at the receiving brewery, subject to such conditions, including payment of the tax, and in such containers, as the Secretary by regulations shall prescribe, which shall include—
(1) any removal from one brewery to another brewery belonging to the same brewer,
(2) any removal from a brewery owned by one corporation to a brewery owned by another corporation when—
(A) one such corporation owns the controlling interest in the other such corporation, or
(B) the controlling interest in each such corporation is owned by the same person or persons, and
(3) any removal from one brewery to another brewery when—
(A) the 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
(B) the transferor has divested itself of all interest in the beer so transferred and the transferee has accepted responsibility for payment of the tax.
(b) Transfer of liability for tax
For purposes of subsection (a)(3), such relief from liability shall be effective from the time of removal from the transferor's premises, or from the time of divestment of interest, whichever is later.
(Added
Editorial Notes
Prior Provisions
A prior section 5414, act Aug. 16, 1954, ch. 736,
Amendments
2020—
2019—Subsec. (b)(3).
2017—
1976—
Statutory Notes and Related Subsidiaries
Effective Date of 2020 Amendment
Effective Date of 2019 Amendment
Effective Date of 2017 Amendment
Amendment by
§5415. Records and returns
(a) Records
Every brewer shall keep records, in such form and containing such information as the Secretary shall prescribe by regulations as necessary for protection of the revenue. These records shall be preserved by the person required to keep such records for such period as the Secretary shall by regulations prescribe, and shall be available during business hours for examination and taking of abstracts therefrom by any internal revenue officer.
(b) Returns
Every brewer shall make true and accurate returns of his operations and transactions in the form, at the times, and for such periods as the Secretary shall by regulation prescribe.
(Added
Editorial Notes
Prior Provisions
A prior section 5415, act Aug. 16, 1954, ch. 736,
Amendments
1976—Subsecs. (a), (b).
§5416. Definitions of package and packaging
For purposes of this subchapter, the term "package" means a bottle, can, keg, barrel, or other original consumer container, and the term "packaging" means the filling of any package.
(Added
Editorial Notes
Prior Provisions
A prior section 5416, act Aug. 16, 1954, ch. 736,
Amendments
1971—
Statutory Notes and Related Subsidiaries
Effective Date of 1971 Amendment
Amendment by
§5417. Pilot brewing plants
Under such regulations as the Secretary may prescribe, and on the filing of such bonds and applications as he may require, pilot brewing plants may, at the discretion of the Secretary be established and operated off the brewery premises for research, analytical, experimental, or development purposes with regard to beer or brewery operations. Nothing in this section shall be construed as authority to waive the filing of any bond or the payment of any tax provided for in this chapter.
(Added
Editorial Notes
Amendments
1976—
Statutory Notes and Related Subsidiaries
Effective Date
Section effective on first day of first calendar month which begins more than 90 days after Jan. 12, 1971, see section 5 of
§5418. Beer imported in bulk
Beer imported or brought into the United States in bulk containers may, under such regulations as the Secretary may prescribe, be withdrawn from customs custody and transferred in such bulk containers to the premises of a brewery without payment of the internal revenue tax imposed on such beer. The proprietor of a brewery to which such beer is transferred shall become liable for the tax on the beer withdrawn from customs custody under this section upon release of the beer from customs custody, and the importer, or the person bringing such beer into the United States, shall thereupon be relieved of the liability for such tax.
(Added
Statutory Notes and Related Subsidiaries
Effective Date
Subchapter H—Miscellaneous Plants and Warehouses
Editorial Notes
Prior Provisions
A prior subchapter H consisted of parts I to III, prior to the general revision of this chapter by
Amendments
1979—
PART I—VINEGAR PLANTS
Editorial Notes
Prior Provisions
A prior part I consisted of sections 5501 and 5502, prior to the general revision of this chapter by
§5501. Establishment
Plants for the production of vinegar by the vaporizing process, where distilled spirits of not more than 15 percent of alcohol by volume are to be produced exclusively for use in the manufacture of vinegar on the premises, may be established under this part.
(Added
Editorial Notes
Prior Provisions
A prior section 5501, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5216(a)(1), act Aug. 16, 1954, ch. 736,
Statutory Notes and Related Subsidiaries
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
§5502. Qualification
(a) Requirements
Every person, before commencing the business of manufacturing vinegar by the vaporizing process, and at such other times as the Secretary may by regulations prescribe, shall make application to the Secretary for the registration of his plant and receive permission to operate. No application required under this section shall be approved until the applicant has complied with all requirements of law, and regulations prescribed by the Secretary, in relation to such business. With respect to any change in such business after approval of an application, the Secretary may by regulations authorize the filing of written notice of such change or require the filing of an application to make such change.
(b) Form of application
The application required by subsection (a) shall be in such form and contain such information as the Secretary shall by regulations prescribe to enable him to determine the identity of the applicant, the location and extent of the premises, the type of operations to be conducted on such premises, and whether the operations will be in conformity with law and regulations.
(Added
Editorial Notes
Prior Provisions
A prior section 5502, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising subsec. (a) of this section were contained in prior section 5216(a)(1), act Aug. 16, 1954, ch. 736,
Amendments
1976—Subsecs. (a), (b).
§5503. Construction and equipment
Plants established under this part for the manufacture of vinegar by the vaporizing process shall be constructed and equipped in accordance with such regulations as the Secretary shall prescribe.
(Added
Editorial Notes
Prior Provisions
Provisions similar to those comprising this section were contained in prior sections 5216(a)(1) and 5552, act Aug. 16, 1954, ch. 736,
Amendments
1976—
§5504. Operation
(a) General
Any manufacturer of vinegar qualified under this part may, under such regulations as the Secretary shall prescribe, separate by a vaporizing process the distilled spirits from the mash produced by him, and condense the vapor by introducing it into the water or other liquid used in making vinegar in his plant.
(b) Removals
No person shall remove, or cause to be removed, from any plant established under this part any vinegar or other fluid or material containing a greater proportion than 2 percent of proof spirits.
(c) Records
Every person manufacturing vinegar by the vaporizing process shall keep such records and file such reports as the Secretary shall by regulations prescribe of the kind and quantity of materials received on his premises and fermented or mashed, the quantity of low wines produced, the quantity of such low wines used in the manufacture of vinegar, the quantity of vinegar produced, the quantity of vinegar removed from the premises, and such other information as may by regulations be required. Such records, and a copy of such reports, shall be preserved as regulations shall prescribe, and shall be kept available for inspection by any internal revenue officer during business hours.
(Added
Editorial Notes
Prior Provisions
Provisions similar to those comprising subsecs. (a) and (b) of this section were contained in prior section 5216(a)(1)(2), act Aug. 16, 1954, ch. 736,
Amendments
1976—Subsecs. (a), (c).
§5505. Applicability of provisions of this chapter
(a) Tax
The taxes imposed by subchapter A shall be applicable to any distilled spirits produced in violation of section 5501 or removed in violation of section 5504(b).
(b) Prohibited premises
Plants established under this part shall not be located on any premises where distilling is prohibited under section 5601(a)(6).
(c) Entry and examination of premises
The provisions of section 5203(b), (c), and (d), relating to right of entry and examination, furnishing facilities and assistance, and authority to break up grounds or walls, shall be applicable to all premises established under this part, and to all proprietors thereof, and their workmen or other persons employed by them.
(d) Registration of stills
Stills on the premises of plants established under this part shall be registered as provided in section 5179.
(e) Installation of meters, tanks, and other apparatus
The provisions of section 5552 relating to the installation of meters, tanks, and other apparatus shall be applicable to plants established under this part.
(f) Assignment of internal revenue officers
The provisions of section 5553(a) relating to the assignment of internal revenue officers shall be applicable to plants established under this part.
(g) Authority to waive records, statements, and returns
The provisions of section 5555(b) relating to the authority of the Secretary to waive records, statements, and returns shall be applicable to records, statements, or returns required by this part.
(h) Regulations
The provisions of section 5556 relating to the prescribing of regulations shall be applicable to this part.
(i) Penalties
The penalties and forfeitures provided in sections 5601(a)(1), (6), and (12), 5603, 5615(1) and (4), 5686, and 5687 shall be applicable to this part.
(j) Other provisions
This chapter (other than this part and the provisions referred to in subsection (a), (b), (c), (d), (e), (f), (g), (h), (i) shall not be applicable with respect to plants established or operations conducted under this part.
(Added
Editorial Notes
Prior Provisions
Provisions similar to those comprising subsecs. (a) to (i) of this section were contained in prior sections of act Aug. 16, 1954, prior to the general revision of this chapter by
| Present subsecs.: | Prior sections |
|---|---|
| (a) | 5216(a)(1). |
| (b) | 5171. |
| (c) | 5216(a)(3). |
| (d) | 5174. |
| (e) | 5552. |
| (f) | 5553(a). |
| (g) | 5555(b). |
| (h) | 5556. |
| (i) | 5601, 5607, 5608, 5686(b). |
The prior sections, act Aug. 16, 1954, ch. 736, are set out in
Amendments
1976—Subsec. (i).
Statutory Notes and Related Subsidiaries
Effective Date of 1976 Amendment
Amendment by
PART II—VOLATILE FRUIT-FLAVOR CONCENTRATE PLANTS
Editorial Notes
Prior Provisions
A prior part II consisted of sections 5511 and 5512, prior to the general revision of this chapter by
§5511. Establishment and operation
This chapter (other than sections 5178(a)(2)(C), 5179, 5203(b), (c), and (d), and 5552) shall not be applicable with respect to the manufacture, by any process which includes evaporations from the mash or juice of any fruit, of any volatile fruit-flavor concentrate if—
(1) such concentrate, and the mash or juice from which it is produced, contains no more alcohol than is reasonably unavoidable in the manufacture of such concentrate; and
(2) such concentrate is rendered unfit for use as a beverage before removal from the place of manufacture, or (in the case of a concentrate which does not exceed 24 percent alcohol by volume) such concentrate is transferred to a bonded wine cellar for use in production of natural wine as provided in section 5382; and
(3) the manufacturer thereof makes such application, keeps such records, renders such reports, files such bonds, and complies with such other requirements with respect to the production, removal, sale, transportation, and use of such concentrate and of the mash or juice from which such concentrate is produced, as the Secretary may by regulations prescribe as necessary for the protection of the revenue.
(Added
Editorial Notes
Prior Provisions
A prior section 5511, act Aug. 16, 1954, ch. 736,
Amendments
1976—Par. (3).
1964—Par. (2).
Statutory Notes and Related Subsidiaries
Effective Date of 1964 Amendment
Amendment by
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
§5512. Control of products after manufacture
For applicability of all provisions of this chapter pertaining to distilled spirits and wines, including those requiring payment of tax, to volatile fruit-flavor concentrates sold, transported, or used in violation of law or regulations, see section 5001(a)(6).
(Added
Editorial Notes
Prior Provisions
A prior section 5512, act Aug. 16, 1954, ch. 736,
Amendments
2018—
[PART III—REPEALED]
[§§5521 to 5523. Repealed. Pub. L. 96–39, title VIII, §807(a)(50), July 26, 1979, 93 Stat. 288 ]
Section 5521, added
A prior section 5521, act Aug. 16, 1954, ch. 736,
Section 5522, added
A prior section 5522, act Aug. 16, 1954, ch. 736,
Section 5523, added
A prior section 5523, act Aug. 16, 1954, ch. 736,
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal effective Jan. 1, 1980, see section 810 of
Subchapter I—Miscellaneous General Provisions
Editorial Notes
Prior Provisions
A prior subchapter I consisted of sections 5551 to 5557, prior to the general revision of this chapter by
§5551. General provisions relating to bonds
(a) Approval as condition to commencing business
Except as provided under subsection (d), no individual, firm, partnership, corporation, or association, intending to commence or to continue the business of a distiller, warehouseman, processor, brewer, or winemaker, shall commence or continue the business of a distiller, warehouseman, processor, brewer, or winemaker until all bonds in respect of such a business, required by any provision of law, have been approved by the Secretary of the Treasury or the officer designated by him.
(b) Disapproval
The Secretary of the Treasury or any officer designated by him may disapprove any such bond or bonds if the individual, firm, partnership, or corporation, or association giving such bond or bonds, or owning, controlling, or actively participating in the management of the business of the individual, firm, partnership, corporation, or association giving such bond or bonds, shall have been previously convicted, in a court of competent jurisdiction, of—
(1) any fraudulent noncompliance with any provision of any law of the United States, if such provision related to internal revenue or customs taxation of distilled spirits, wines, or beer, or if such an offense shall have been compromised with the individual, firm, partnership, corporation, or association on payment of penalties or otherwise, or
(2) any felony under a law of any State, or the District of Columbia, or the United States, prohibiting the manufacture, sale, importation, or transportation of distilled spirits, wine, beer, or other intoxicating liquor.
(c) Appeal from disapproval
In case the disapproval is by an officer designated by the Secretary of the Treasury to approve or disapprove such bonds, the individual, firm, partnership, corporation, or association giving the bond may appeal from such disapproval to the Secretary of the Treasury or an officer designated by him to hear such appeals, and the disapproval of the bond by the Secretary of the Treasury or officer designated to hear such appeals shall be final.
(d) Removal of bond requirements
(1) In general
During any period to which subparagraph (A) of section 5061(d)(4) applies to a taxpayer (determined after application of subparagraph (B) thereof), such taxpayer shall not be required to furnish any bond covering operations or withdrawals of distilled spirits or wines for nonindustrial use or of beer.
(2) Satisfaction of bond requirements
Any taxpayer for any period described in paragraph (1) shall be treated as if sufficient bond has been furnished for purposes of covering operations and withdrawals of distilled spirits or wines for nonindustrial use or of beer for purposes of any requirements relating to bonds under this chapter.
(Added
Editorial Notes
Prior Provisions
A prior section 5551, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising subsec. (c) of this section were contained in prior section 5177(c), act Aug. 16, 1954, ch. 736,
Amendments
2015—Subsec. (a).
Subsec. (d).
1979—Subsec. (a).
1976—Subsec. (a).
Subsec. (b).
Subsec. (c).
Statutory Notes and Related Subsidiaries
Effective Date of 2015 Amendment
Amendment by
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by section 1905(c)(5) of
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
§5552. Installation of meters, tanks, and other apparatus
The Secretary is authorized to require at distilled spirits plants, breweries, and at any other premises established pursuant to this chapter as in his judgment may be deemed advisable, the installation of meters, tanks, pipes, or any other apparatus for the purpose of protecting the revenue, and such meters, tanks, and pipes and all necessary labor incident thereto shall be at the expense of the person on whose premises the installation is required. Any such person refusing or neglecting to install such apparatus when so required by the Secretary shall not be permitted to conduct business on such premises.
(Added
Editorial Notes
Prior Provisions
A prior section 5552, act Aug. 16, 1954, ch. 736,
For application to vinegar plants of provisions of prior section 5552 relating to installation of meters, tanks, and other apparatus, see also
Amendments
1976—
§5553. Supervision of premises and operations
(a) Assignment of internal revenue officers
The Secretary is authorized to assign to any premises established under the provisions of this chapter such number of internal revenue officers as may be deemed necessary.
(b) Functions of internal revenue officer
When used in this chapter, the term "internal revenue officer assigned to the premises" means the internal revenue officer assigned by the Secretary to duties at premises established and operated under the provisions of this chapter.
(Added
Editorial Notes
Prior Provisions
A prior section 5553, act Aug. 16, 1954, ch. 736,
For application to vinegar plants of provisions of prior section 5553(a) relating to assignment of storekeeper-gaugers, see also
Amendments
1976—Subsecs. (a), (b).
§5554. Pilot operations
For the purpose of facilitating the development and testing of improved methods of governmental supervision (necessary for the protection of the revenue) over distilled spirits plants established under this chapter, the Secretary is authorized to waive any regulatory provisions of this chapter for temporary pilot or experimental operations. Nothing in this section shall be construed as authority to waive the filing of any bond or the payment of any tax provided for in this chapter.
(Added
Editorial Notes
Prior Provisions
A prior section 5554, act Aug. 16, 1954, ch. 736,
Amendments
1976—
§5555. Records, statements, and returns
(a) General
Every person liable to any tax imposed by this chapter, or for the collection thereof, shall keep such records, render such statements, make such returns, and comply with such rules and regulations as the Secretary may prescribe. The Secretary shall permit a person to employ a unified system for any records, statements, and returns required to be kept, rendered, or made under this section for any beer produced in the brewery for which the tax imposed by section 5051 has been determined, including any beer which has been removed for consumption on the premises of the brewery.
(b) Authority to waive
Whenever in this chapter any record is required to be made or kept, or statement or return is required to be made by any person, the Secretary may by regulation waive, in whole or in part, such requirement when he deems such requirement to no longer serve a necessary purpose. This subsection shall not be construed as authorizing the waiver of the payment of any tax.
(c) Photographic copies
Whenever in this chapter any record is required to be made and preserved by any person, the Secretary may by regulations authorize such person to record, copy, or reproduce by any photographic, photostatic, microfilm, microcard, miniature photographic, or other process, which accurately reproduces or forms a durable medium for so reproducing the original of such record and to retain such reproduction in lieu of the original. Every person who is authorized to retain such reproduction in lieu of the original shall, under such regulations as the Secretary may prescribe, preserve such reproduction in conveniently accessible files and make provision for examining, viewing, and using such reproduction the same as if it were the original. Such reproduction shall be treated and considered for all purposes as though it were the original record and all provisions of law applicable to the original shall be applicable to such reproduction. Such reproduction, or enlargement or facsimile thereof, shall be admissible in evidence in the same manner and under the same conditions as provided for the admission of reproductions, enlargements, or facsimiles of records made in the regular course of business under
(Added
Editorial Notes
Prior Provisions
A prior section 5555, act Aug. 16, 1954, ch. 736,
Prior section 5555(a), relating to general provisions respecting records, statements, and returns, is also incorporated in section 5207(b) to (d) of this title.
Prior section 5555(b), relating to authority to waive records, statements, and returns, is also incorporated in
Amendments
2020—Subsec. (a).
2019—Subsec. (a).
2018—Subsec. (a).
1984—Subsec. (a).
1976—Subsecs. (a) to (c).
Statutory Notes and Related Subsidiaries
Effective Date of 2020 Amendment
Effective Date of 2019 Amendment
Effective Date of 2018 Amendment
Effective Date of 1984 Amendment
Amendment by
§5556. Regulations
The regulations prescribed by the Secretary for enforcement of this chapter may make such distinctions in requirements relating to construction, equipment, or methods of operation as he deems necessary or desirable due to differences in materials or variations in methods used in production, processing, or storage of distilled spirits.
(Added
Editorial Notes
Prior Provisions
A prior section 5556, act Aug. 16, 1954, ch. 736,
For application to vinegar plants of regulatory provisions of prior section 5556, see also
Amendments
1976—
Statutory Notes and Related Subsidiaries
Applicability of Rules and Regulations
§5557. Officers and agents authorized to investigate, issue search warrants, and prosecute for violations
(a) General
The Secretary shall investigate violations of this subtitle and in any case in which prosecution appears warranted the Secretary shall report the violation to the United States Attorney for the district in which such violation was committed, who is hereby charged with the duty of prosecuting the offenders, subject to the direction of the Attorney General, as in the case of other offenses against the laws of the United States; and the Secretary may swear out warrants before United States magistrate judges or other officers or courts authorized to issue warrants for the apprehension of such offenders, and may, subject to the control of such United States Attorney, conduct the prosecution at the committing trial for the purpose of having the offenders held for the action of a grand jury.
(b) Cross reference
For provisions relating to the issuance of search warrants, see the Federal Rules of Criminal Procedure.
(Added
Editorial Notes
References in Text
The Federal Rules of Criminal Procedure, referred to in subsec. (b), are set out in the Appendix of Title 18, Crimes and Criminal Procedure.
Prior Provisions
A prior section 5557, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5314, act Aug. 16, 1954, ch. 736,
Amendments
1976—Subsec. (a).
Statutory Notes and Related Subsidiaries
Change of Name
"United States magistrate judges" substituted for "United States magistrates" in subsec. (a) pursuant to section 321 of
§5558. Authority of enforcement officers
For provisions relating to the authority of internal revenue enforcement officers, see section 7608.
(Added
§5559. Determinations
Whenever the Secretary is required or authorized, in this chapter, to make or verify any quantitative determination, such determination or verification may be made by actual count, weight, or measurement, or by the application of statistical methods, or by other means, under such regulations as the Secretary may prescribe.
(Added
Editorial Notes
Amendments
1976—
§5560. Other provisions applicable
All provision of subtitle F, insofar as applicable and not inconsistent with the provisions of this subtitle, are hereby extended to and made a part of this subtitle.
(Added
Editorial Notes
Prior Provisions
Provisions similar to those comprising this section were contained in prior section 5557, act Aug. 16, 1954, ch. 736,
§5561. Exemptions to meet the requirements of the national defense
The Secretary may temporarily exempt proprietors of distilled spirits plants from any provision of the internal revenue laws relating to distilled spirits, except those requiring payment of the tax thereon, whenever in his judgment it may seem expedient to do so to meet the requirements of the national defense. Whenever the Secretary shall exercise the authority conferred by this section he may prescribe such regulations as may be necessary to accomplish the purpose which caused him to grant the exemption.
(Added
Editorial Notes
Prior Provisions
Provisions similar to those comprising this section were contained in prior section 5217(b), act Aug. 16, 1954, ch. 736,
Amendments
1976—
§5562. Exemptions from certain requirements in cases of disaster
Whenever the Secretary finds that it is necessary or desirable, by reason of disaster, to waive provisions of internal revenue law with regard to distilled spirits, he may temporarily exempt proprietors of distilled spirits plants from any provision of the internal revenue laws relating to distilled spirits, except those requiring payment of the tax thereon, to the extent he may deem necessary or desirable.
(Added
Editorial Notes
Prior Provisions
Provisions similar to those comprising this section were contained in prior section 5215, act Aug. 16, 1954, ch. 736,
Amendments
1976—
Subchapter J—Penalties, Seizures, and Forfeitures Relating to Liquors
Editorial Notes
Prior Provisions
A prior subchapter J consisted of parts I to V, prior to the general revision of this chapter by
Amendments
2005—
PART I—PENALTY, SEIZURE, AND FORFEITURE PROVISIONS APPLICABLE TO DISTILLING, RECTIFYING, AND DISTILLED AND RECTIFIED PRODUCTS
Editorial Notes
Prior Provisions
A prior part I consisted of sections 5601 to 5650, prior to the general revision of this chapter by
Amendments
1984—
§5601. Criminal penalties
(a) Offenses
Any person who—
(1) Unregistered stills
has in his possession or custody, or under his control, any still or distilling apparatus set up which is not registered, as required by section 5179(a); or
(2) Failure to file application
engages in the business of a distiller or processor without having filed application for and received notice of registration, as required by section 5171(c); or
(3) False or fraudulent application
engages, or intends to engage, in the business of distiller, warehouseman, or processor of distilled spirits, and files a false or fraudulent application under section 5171; or
(4) Failure or refusal of distiller, warehouseman, or processor to give bond
carries on the business of a distiller, warehouseman, or processor without having given bond as required by law; or
(5) False, forged, or fraudulent bond
engages, or intends to engage, in the business of distiller, warehouseman, or processor of distilled spirits, and gives any false, forged, or fraudulent bond, under subchapter B; or
(6) Distilling on prohibited premises
uses, or possesses with intent to use, any still, boiler, or other utensil for the purpose of producing distilled spirits, or aids or assists therein, or causes or procures the same to be done, in any dwelling house, or in any shed, yard, or inclosure connected with such dwelling house (except as authorized under section 5178(a)(1)(C)), or on board any vessel or boat, or on any premises where beer or wine is made or produced, or where liquors of any description are retailed, or on premises where any other business is carried on (except when authorized under section 5178(b)); or
(7) Unlawful production, removal, or use of material fit for production of distilled spirits
except as otherwise provided in this chapter, makes or ferments mash, wort, or wash, fit for distillation or for the production of distilled spirits, in any building or on any premises other than the designated premises of a distilled spirits plant lawfully qualified to produce distilled spirits, or removes, without authorization by the Secretary, any mash, wort, or wash, so made or fermented, from the designated premises of such lawfully qualified plant before being distilled; or
(8) Unlawful production of distilled spirits
not being a distiller authorized by law to produce distilled spirits, produces distilled spirits by distillation or any other process from any mash, wort, wash, or other material; or
(9) Unauthorized use of distilled spirits in manufacturing processes
except as otherwise provided in this chapter, uses distilled spirits in any process of manufacture unless such spirits—
(A) have been produced in the United States by a distiller authorized by law to produce distilled spirits and withdrawn in compliance with law; or
(B) have been imported (or otherwise brought into the United States) and withdrawn in compliance with law; or
(10) Unlawful processing
engages in or carries on the business of a processor—
(A) with intent to defraud the United States of any tax on the distilled spirits processed by him; or
(B) with intent to aid, abet, or assist any person or persons in defrauding the United States of the tax on any distilled spirits; or
(11) Unlawful purchase, receipt, or processing of distilled spirits
purchases, receives, or processes any distilled spirits, knowing or having reasonable grounds to believe that any tax due on such spirits has not been paid or determined as required by law; or
(12) Unlawful removal or concealment of distilled spirits
removes, other than as authorized by law, any distilled spirits on which the tax has not been paid or determined, from the place of manufacture or storage, or from any instrument of transportation, or conceals spirits so removed; or
(13) Creation of fictitious proof
adds, or causes to be added, any ingredient or substance (other than ingredients or substances authorized by law to be added) to any distilled spirits before the tax is paid thereon, or determined as provided by law, for the purpose of creating fictitious proof; or
(14) Distilling after notice of suspension
after the time fixed in the notice given under section 5221(a) to suspend operations as a distiller, carries on the business of a distiller on the premises covered by the notice of suspension, or has mash, wort, or beer on such premises, or on any premises connected therewith, or has in his possession or under his control any mash, wort, or beer, with intent to distill the same on such premises; or
(15) Unauthorized withdrawal, use, sale, or distribution of distilled spirits for fuel use
withdraws, uses, sells, or otherwise disposes of distilled spirits produced under section 5181 for other than fuel use;
shall be fined not more than $10,000, or imprisoned not more than 5 years, or both, for each such offense.
(b) Presumptions
Whenever on trial for violation of subsection (a)(4) the defendant is shown to have been at the site or place where, and at the time when, the business of a distiller or processor was so engaged in or carried on, such presence of the defendant shall be deemed sufficient evidence to authorize conviction, unless the defendant explains such presence to the satisfaction of the jury (or of the court when tried without jury).
(Added
Editorial Notes
Prior Provisions
A prior section 5601, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising subsecs. (a)(2) to (8), (9)(A), (10) to (14) of this section were contained in prior sections of act Aug. 16, 1954, prior to the general revision of this chapter by
| Present subd. of subsec. (a): | Prior sections |
|---|---|
| (2) | 5172, 5603. |
| (3) | 5603. |
| (4) | 5172, 5604, 5606. |
| (5) | 5604. |
| (6) | 5171, 5607. |
| (7) | 5216(a)(1), (4), 5608(a). |
| (8) | 5216(a)(1), 5608(a). |
| (9) | 5216(a)(1), 5608(a). |
| (10) | 5628, 5629. |
| (11) | 5629. |
| (12) | 5608(a), 5631, 5632, 5643, 5647. |
| (13) | 5634. |
| (14) | 5650. |
The prior sections, act Aug. 16, 1954, ch. 736, are set out in
Amendments
2018—Subsec. (a)(15).
1980—Subsec. (a)(15).
1979—Subsec. (a)(2).
Subsec. (a)(3).
Subsec. (a)(4).
Subsec. (a)(5).
Subsec. (a)(10).
Subsec. (a)(11).
Subsec. (b).
1976—Subsec. (a)(7).
Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 1980 Amendment
Amendment by
Effective Date of 1979 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
Prosecution and Punishment of Offenses Committed and Penalties or Forfeitures Incurred; Savings Provision
§5602. Penalty for tax fraud by distiller
Whenever any person engaged in or carrying on the business of a distiller defrauds, attempts to defraud, or engages in such business with intent to defraud the United States of the tax on the spirits distilled by him, or of any part thereof, he shall be fined not more than $10,000, or imprisoned not more than 5 years, or both. No discontinuance or nolle prosequi of any prosecution under this section shall be allowed without the permission in writing of the Attorney General.
(Added
Editorial Notes
Prior Provisions
A prior section 5602, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior sections 5606, 5626, act Aug. 16, 1954, ch. 736,
§5603. Penalty relating to records, returns, and reports
(a) Fraudulent noncompliance
Any person required by this chapter (other than subchapters F and G) or regulations issued pursuant thereto to keep or file any record, return, report, summary, transcript, or other document, who, with intent to defraud the United States, shall—
(1) fail to keep any such document or to make required entries therein; or
(2) make any false entry in such document; or
(3) cancel, alter, or obliterate any part of such document or any entry therein, or destroy any part of such document or any entry therein; or
(4) hinder or obstruct any internal revenue officer from inspecting any such document or taking any abstracts therefrom; or
(5) fail or refuse to preserve or produce any such document, as required by this chapter or regulations issued pursuant thereto;
or who shall, with intent to defraud the United States, cause or procure the same to be done, shall be fined not more than $10,000, or imprisoned not more than 5 years, or both, for each such offense.
(b) Failure to comply
Any person required by this chapter (other than subchapters F and G) or regulations issued pursuant thereto to keep or file any record, return, report, summary, transcript, or other document, who, otherwise than with intent to defraud the United States, shall—
(1) fail to keep any such document or to make required entries therein; or
(2) make any false entry in such document; or
(3) cancel, alter, or obliterate any part of such document or any entry therein, or destroy any part of such document, or any entry therein, except as provided by this title or regulations issued pursuant thereto; or
(4) hinder or obstruct any internal revenue officer from inspecting any such document or taking any abstracts therefrom; or
(5) fail to refuse to preserve or produce any such document, as required by this chapter or regulations issued pursuant thereto;
or who shall, otherwise than with intent to defraud the United States, cause or procure the same to be done, shall be fined not more than $1,000, or imprisoned not more than 1 year, or both, for each such offense.
(Added
Editorial Notes
Prior Provisions
A prior section 5603, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior sections 5610, 5611, 5620, 5621, 5692, act Aug. 16, 1954, ch. 736,
Amendments
2018—
§5604. Penalties relating to marks, brands, and containers
(a) In general
Any person who shall—
(1) transport, possess, buy, sell, or transfer any distilled spirits unless the immediate container bears the type of closure or other device required by section 5301(d),
(2) with intent to defraud the United States, empty a container bearing the closure or other device required by section 5301(d) without breaking such closure or other device,
(3) empty, or cause to be emptied, any distilled spirits from an immediate container bearing any mark or brand required by law without effacing and obliterating such mark or brand as required by section 5206(d),
(4) place any distilled spirits in any bottle, or reuse any bottle for the purpose of containing distilled spirits, which has once been filled and fitted with a closure or other device under the provisions of this chapter, without removing and destroying such closure or other device,
(5) willfully and unlawfully remove, change, or deface any mark, brand, label, or seal affixed to any case of distilled spirits, or to any bottle contained therein,
(6) with intent to defraud the United States, purchase, sell, receive with intent to transport, or transport any empty cask or package having thereon any mark or brand required by law to be affixed to any cask or package containing distilled spirits, or
(7) change or alter any mark or brand on any cask or package containing distilled spirits, or put into any cask or package spirits of greater strength than is indicated by the inspection mark thereon, or fraudulently use any cask or package having any inspection mark thereon, for the purpose of selling other spirits, or spirits of quantity or quality different from the spirits previously inspected,
shall be fined not more than $10,000 or imprisoned not more than 5 years, or both, for each such offense.
(b) Cross references
For provisions relating to the authority of internal revenue officers to enforce provisions of this section, see sections 5203, 5557, and 7608.
(Added
Editorial Notes
Prior Provisions
A prior section 5604, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior sections of act Aug. 16, 1954, prior to the general revision of this chapter by
| Present subsecs.: | Prior sections |
|---|---|
| (a)(1) | 5008(b)(1), 5642. |
| (a)(2), (3) | 5636. |
| (a)(4), (5) | 5642, 5644. |
| (a)(6) | 5642. |
| (a)(7) to (9) | 5636. |
| (a)(10) | 5642, 5644. |
| (a)(11) | 5643. |
| (a)(12) | 5642, 5643. |
| (a)(13) to (15) | 5642. |
| (a)(16) | 5643. |
| (a)(17) | 5635, 5636. |
| (a)(18) | 5637. |
| (a)(19) | 5638. |
| (b) | 5642. |
The prior sections, act Aug. 16, 1954, ch. 736, are set out in
Amendments
1984—Subsec. (a).
Subsec. (b).
1979—Subsec. (a)(1).
Subsec. (a)(2).
Subsec. (a)(3).
Subsec. (a)(6).
Subsec. (a)(13).
Statutory Notes and Related Subsidiaries
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1979 Amendment
Amendment by
§5605. Penalty relating to return of materials used in the manufacture of distilled spirits, or from which distilled spirits may be recovered
Any person who willfully violates any provision of section 5291(a), or of any regulation issued pursuant thereto, and any officer, director, or agent of any such person who knowingly participates in such violation, shall be fined not more than $1,000, or imprisoned not more than 2 years, or both.
(Added
Editorial Notes
Prior Provisions
A prior section 5605, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5609, act Aug. 16, 1954, ch. 736,
§5606. Penalty relating to containers of distilled spirits
Whoever violates any provision of section 5301, or of any regulation issued pursuant thereto, or the terms or conditions of any permit issued pursuant to the authorization contained in such section, and any officer, director, or agent of any corporation who knowingly participates in such violation, shall, upon conviction, be fined not more than $1,000, or imprisoned not more than 1 year, or both, for each such offense.
(Added
Editorial Notes
Prior Provisions
A prior section 5606, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5641, act Aug. 16, 1954, ch. 736,
§5607. Penalty and forfeiture for unlawful use, recovery, or concealment of denatured distilled spirits, or articles
Any person who—
(1) uses denatured distilled spirits withdrawn free of tax under section 5214(a)(1) in the manufacture of any medicinal preparation or flavoring extract in violation of the provisions of section 5273(b)(1) or knowingly sells, or offers for sale, any such medicinal preparation or flavoring extract in violation of section 5273(b)(2); or
(2) knowingly withdraws any denatured distilled spirits free of tax under section 5214(a)(1) for beverage purposes; or
(3) knowingly sells any denatured distilled spirits withdrawn free of tax under section 5214(a)(1), or any articles containing such denatured distilled spirits, for beverage purposes; or
(4) recovers or attempts to recover by redistillation or by any other process or means (except as authorized in section 5223 or in section 5273(c)) any distilled spirits from any denatured distilled spirits withdrawn free of tax under section 5214(a)(1), or from any articles manufactured therefrom, or knowingly uses, sells, conceals, or otherwise disposes of distilled spirits so recovered or redistilled;
shall be fined not more than $10,000, or imprisoned not more than 5 years, or both, for each such offense; and all personal property used in connection with his business, together with the buildings and ground constituting the premises on which such unlawful acts are performed or permitted to be performed shall be forfeited to the United States.
(Added
Editorial Notes
Prior Provisions
A prior section 5607, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5647, act Aug. 16, 1954, ch. 736,
§5608. Penalty and forfeiture for fraudulent claims for export drawback or unlawful relanding
(a) Fraudulent claim for drawback
Every person who fraudulently claims, or seeks, or obtains an allowance of drawback on any distilled spirits, or fraudulently claims any greater allowance or drawback than the tax actually paid or determined thereon, shall forfeit and pay to the Government of the United States triple the amount wrongfully and fraudulently sought to be obtained, and shall be imprisoned not more than 5 years; and every owner, agent, or master of any vessel or other person who knowingly aids or abets in the fraudulent collection or fraudulent attempts to collect any drawback upon, or knowingly aids or permits any fraudulent change in the spirits so shipped, shall be fined not more than $5,000, or imprisoned not more than 3 years, or both, and the ship or vessel on board of which such shipment was made or pretended to be made shall be forfeited to the United States, whether a conviction of the master or owner be had or otherwise, and proceedings may be had in admiralty by libel for such forfeiture.
(b) Unlawful relanding
Every person who, with intent to defraud the United States, relands within the jurisdiction of the United States any distilled spirits which have been shipped for exportation under the provisions of this chapter, or who receives such relanded distilled spirits, and every person who aids or abets in such relanding or receiving of such spirits, shall be fined not more than $5,000, or imprisoned not more than 3 years, or both; and all distilled spirits so relanded, together with the vessel from which the same were relanded within the jurisdiction of the United States, and all vessels, vehicles, or aircraft used in relanding and removing such distilled spirits, shall be forfeited to the United States.
(Added
Editorial Notes
Prior Provisions
A prior section 5608, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5648, act Aug. 16, 1954, ch. 736,
Amendments
1965—Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 1965 Amendment
Amendment by
§5609. Destruction of unregistered stills, distilling apparatus, equipment, and materials
(a) General
In the case of seizure elsewhere than on premises qualified under this chapter of any unregistered still, distilling or fermenting equipment or apparatus, or distilling or fermenting material, for any offense involving forfeiture of the same, where it shall be impracticable to remove the same to a place of safe storage from the place where seized, the seizing officer is authorized to destroy the same. In the case of seizure, other than on premises qualified under this chapter or in transit thereto or therefrom, of any distilled spirits on which the tax has not been paid or determined, for any offense involving forfeiture of the same, the seizing officer is authorized to destroy the distilled spirits forthwith. Any destruction under this subsection shall be in the presence of at least one credible witness. The seizing officer shall make such report of said seizure and destruction and take such samples as the Secretary may require.
(b) Claims
Within 1 year after destruction made pursuant to subsection (a) the owner of, including any person having an interest in, the property so destroyed may make application to the Secretary for reimbursement of the value of such property. If the claimant establishes to the satisfaction of the Secretary that—
(1) such property had not been used in violation of law; or
(2) any unlawful use of such property had been without his consent or knowledge,
the Secretary shall make an allowance to such claimant not exceeding the value of the property destroyed.
(Added
Editorial Notes
Prior Provisions
A prior section 5609, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5623, act Aug. 16, 1954, ch. 736,
Amendments
1976—Subsecs. (a), (b).
§5610. Disposal of forfeited equipment and material for distilling
All boilers, stills, or other vessels, tools and implements, used in distilling or processing, and forfeited under any of the provisions of this chapter, and all condemned material, together with any engine or other machinery connected therewith, and all empty barrels, and all grain or other material suitable for fermentation or distillation, shall be sold at public auction or otherwise disposed of as the court in which forfeiture was recovered shall in its discretion direct.
(Added
Editorial Notes
Prior Provisions
A prior section 5610, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5622, act Aug. 16, 1954, ch. 736,
Statutory Notes and Related Subsidiaries
Amendments
1979—
Effective Date of 1979 Amendment
Amendment by
§5611. Release of distillery before judgment
Any distillery or distilling apparatus seized on any premises qualified under this chapter, for any violation of law, may, in the discretion of the court, be released before final judgment to a receiver appointed by the court to operate such distillery or apparatus. Such receiver shall give bond, which shall be approved in open court, with corporate surety, for the full appraised value of all the property seized, to be ascertained by three competent appraisers designated and appointed by the court. Funds obtained from such operation shall be impounded as the court shall direct pending such final judgment.
(Added
Statutory Notes and Related Subsidiaries
Prior Provisions
A prior section 5611, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5624, act Aug. 16, 1954, ch. 736,
§5612. Forfeiture of taxpaid distilled spirits remaining on bonded premises
(a) General
No distilled spirits on which tax has been paid or determined shall be stored or allowed to remain on the bonded premises of any distilled spirits plant, under the penalty of forfeiture of all spirits so found.
(b) Exceptions
Subsection (a) shall not apply in the case of—
(1) distilled spirits in the process of prompt removal from bonded premises on payment or determination of the tax; or
(2) distilled spirits returned to bonded premises in accordance with the provisions of section 5215.
(Added
Editorial Notes
Prior Provisions
A prior section 5612, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising subsec. (a) of this section were contained in prior section 5625, act Aug. 16, 1954, ch. 736,
Amendments
1979—Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
Suspension of Subsection (a) During 1980
§5613. Forfeiture of distilled spirits not closed, marked, or branded as required by law
(a) Unmarked or unbranded casks or packages
All distilled spirits found in any cask or package required by this chapter or any regulation issued pursuant thereto to bear a mark, brand, or identification, which cask or package is not marked, branded, or identified in compliance with this chapter and regulations issued pursuant thereto, shall be forfeited to the United States.
(b) Containers without closures
All distilled spirits found in any container which is required by this chapter to bear a closure or other device and which does not bear a closure or other device in compliance with this chapter shall be forfeited to the United States.
(Added
Editorial Notes
Prior Provisions
A prior section 5613, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior sections 5639 and 5640, act Aug. 16, 1954, ch. 736,
Amendments
1984—
Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 1984 Amendment
Amendment by
§5614. Burden of proof in cases of seizure of spirits
Whenever seizure is made of any distilled spirits found elsewhere than on the premises of a distilled spirits plant, or than in any warehouse authorized by law, or than in the store or place of business of a wholesale liquor dealer, or than in transit from any one of said places; or of any distilled spirits found in any one of the places aforesaid, or in transit therefrom, which have not been received into or sent out therefrom in conformity to law, or in regard to which any of the entries required by law, or regulations issued pursuant thereto, to be made in respect of such spirits, have not been made at the time or in the manner required, or in respect to which any owner or person having possession, control, or charge of said spirits, has omitted to do any act required to be done, or has done or committed any act prohibited in regard to said spirits, the burden of proof shall be upon the claimant of said spirits to show that no fraud has been committed, and that all the requirements of the law in relation to the payment of the tax have been complied with.
(Added
Editorial Notes
Prior Provisions
A prior section 5614, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5649, act Aug. 16, 1954, ch. 736,
§5615. Property subject to forfeiture
The following property shall be forfeited to the United States:
(1) Unregistered still or distilling apparatus
Every still or distilling apparatus not registered as required by section 5179, together with all personal property in the possession or custody or under the control of the person required by section 5179 to register the still or distilling apparatus, and found in the building or in any yard or inclosure connected with the building in which such still or distilling apparatus is set up; and
(2) Distilling apparatus removed without notice or set up without notice
Any still, boiler, or other vessel to be used for the purpose of distilling—
(A) which is removed without notice having been given when required by section 5101(a)(1), or
(B) which is set up without notice having been given when required by section 5101(a)(2); and
(3) Distilling without giving bond or with intent to defraud
Whenever any person carries on the business of a distiller without having given bond as required by law or gives any false, forged, or fraudulent bond; or engages in or carries on the business of a distiller with intent to defraud the United States of the tax on the distilled spirits distilled by him, or any part thereof; or after the time fixed in the notice declaring his intention to suspend work, filed under section 5221(a), carries on the business of a distiller on the premises covered by such notice, or has mash, wort, or beer on such premises, or on any premises connected therewith, or has in his possession or under his control any mash, wort, or beer, with intent to distill the same on such premises—
(A) all distilled spirits or wines, and all stills or other apparatus fit or intended to be used for the distillation or rectification of spirits, or for the compounding of liquors, owned by such person, wherever found; and
(B) all distilled spirits, wines, raw materials for the production of distilled spirits, and personal property found in the distillery or in any building, room, yard, or inclosure connected therewith and used with or constituting a part of the premises; and
(C) all the right, title, and interest of such person in the lot or tract of land on which the distillery is situated; and
(D) all the right, title, and interest in the lot or tract of land on which the distillery is located of every person who knowingly has suffered or permitted the business of a distiller to be there carried on, or has connived at the same; and
(E) all personal property owned by or in possession of any person who has permitted or suffered any building, yard, or inclosure, or any part thereof, to be used for purposes of ingress or egress to or from the distillery, which shall be found in any such building, yard, or inclosure; and
(F) all the right, title, and interest of every person in any premises used for ingress or egress to or from the distillery who knowingly has suffered or permitted such premises to be used for such ingress or egress; and
(4) Unlawful production and removals from vinegar plants
(A) all distilled spirits in excess of 15 percent of alcohol by volume produced on the premises of a vinegar plant; and
(B) all vinegar or other fluid or other material containing a greater proportion than 2 percent of proof spirits removed from any vinegar plant; and
(5) False or omitted entries in records, returns, and reports
Whenever any person required by section 5207 to keep or file any record, return, report, summary, transcript, or other document, shall, with intent to defraud the United States—
(A) fail to keep any such document or to make required entries therein; or
(B) make any false entry in such document; or
(C) cancel, alter, or obliterate any part of such document, or any entry therein, or destroy any part of such document, or entry therein; or
(D) hinder or obstruct any internal revenue officer from inspecting any such document or taking any abstracts therefrom; or
(E) fail or refuse to preserve or produce any such document, as required by this chapter or regulations issued pursuant thereto; or
(F) permit any of the acts described in the preceding subparagraphs to be performed;
all interest of such person in the distilled spirits plant where such acts or omissions occur, and in the equipment thereon, and in the lot or tract of land on which such distilled spirits plant stands, and in all personal property on the premises of the distilled spirits plant where such acts or omissions occur, used in the business there carried on; and
(6) Unlawful removal of distilled spirits
All distilled spirits on which the tax has not been paid or determined which have been removed, other than as authorized by law, from the place of manufacture, storage, or instrument of transportation; and
(7) Creation of fictitious proof
All distilled spirits on which the tax has not been paid or determined as provided by law to which any ingredient or substance has been added for the purpose of creating fictitious proof.
(Added
Editorial Notes
Prior Provisions
A prior section 5615, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior sections of act Aug. 16, 1954, prior to the general revision of this chapter by
| Present subds.: | Prior sections |
|---|---|
| (1) | 5601. |
| (2) | 5602. |
| (3) | 5604, 5606, 5626, 5650. |
| (4) | 5608(b). |
| (5) | 5620. |
| (6) | 5631, 5632, 5643, 5647. |
| (7) | 5634. |
The prior sections, act Aug. 16, 1954, ch. 736, are set out in
A prior section 5616, act Aug. 16, 1954, ch. 736,
A prior section 5617, act Aug. 16, 1954, ch. 736,
A prior section 5618, act Aug. 16, 1954, ch. 736,
A prior section 5619, act Aug. 16, 1954, ch. 736,
A prior section 5620, act Aug. 16, 1954, ch. 736,
A prior section 5621, act Aug. 16, 1954, ch. 736,
A prior section 5622, act Aug. 16, 1954, ch. 736,
A prior section 5623, act Aug. 16, 1954, ch. 736,
A prior section 5624, act Aug. 16, 1954, ch. 736,
A prior section 5625, act Aug. 16, 1954, ch. 736,
A prior section 5626, act Aug. 16, 1954, ch. 736,
A prior section 5627, act Aug. 16, 1954, ch. 736,
A prior section 5628, act Aug. 16, 1954, ch. 736,
A prior section 5629, act Aug. 16, 1954, ch. 736,
A prior section 5630, act Aug. 16, 1954, ch. 736,
A prior section 5631, act Aug. 16, 1954, ch. 736,
A prior section 5632, act Aug. 16, 1954, ch. 736,
A prior section 5633, act Aug. 16, 1954, ch. 736,
A prior section 5634, act Aug. 16, 1954, ch. 736,
A prior section 5635, act Aug. 16, 1954, ch. 736,
A prior section 5636, act Aug. 16, 1954, ch. 736,
A prior section 5637, act Aug. 16, 1954, ch. 736,
A prior section 5638, act Aug. 16, 1954, ch. 736,
A prior section 5639, act Aug. 16, 1954, ch. 736,
A prior section 5640, act Aug. 16, 1954, ch. 736,
A prior section 5641, act Aug. 16, 1954, ch. 736,
A prior section 5642, act Aug. 16, 1954, ch. 736,
A prior section 5643, act Aug. 16, 1954, ch. 736,
A prior section 5644, act Aug. 16, 1954, ch. 736,
A prior section 5645, act Aug. 16, 1954, ch. 736,
A prior section 5646, act Aug. 16, 1954, ch. 736,
A prior section 5647, act Aug. 16, 1954, ch. 736,
A prior section 5648, act Aug. 16, 1954, ch. 736,
A prior section 5649, act Aug. 16, 1954, ch. 736,
A prior section 5650, act Aug. 16, 1954, ch. 736,
Amendments
1984—Par. (2).
1979—Par. (5).
Statutory Notes and Related Subsidiaries
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1979 Amendment
Amendment by
PART II—PENALTY AND FORFEITURE PROVISIONS APPLICABLE TO WINE AND WINE PRODUCTION
Editorial Notes
Prior Provisions
A prior part II consisted of
§5661. Penalty and forfeiture for violation of laws and regulations relating to wine
(a) Fraudulent offenses
Whoever, with intent to defraud the United States, fails to pay any tax imposed upon wine or violates, or fails to comply with, any provision of subchapter F or subpart C of part I of subchapter A, or regulations issued pursuant thereto, or recovers or attempts to recover any spirits from wine, shall be fined not more than $5,000, or imprisoned not more than 5 years, or both, for each such offense, and all products and materials used in any such violation shall be forfeited to the United States.
(b) Other offenses
Any proprietor of premises subject to the provisions of subchapter F, or any employee or agent of such proprietor, or any other person, who otherwise than with intent to defraud the United States violates or fails to comply with any provision of subchapter F or subpart C of part I of subchapter A, or regulations issued pursuant thereto, or who aids or abets in any such violation, shall be fined not more than $1,000, or imprisoned not more than 1 year, or both, for each such offense.
(Added
Editorial Notes
Prior Provisions
A prior section 5661, act Aug. 16, 1954, ch. 736,
Prior section 5661(a) also provided for an additional penalty "of double the tax due, to be assessed, levied and collected in the same manner as taxes are collected". See
Statutory Notes and Related Subsidiaries
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
§5662. Penalty for alteration of wine labels
Any person who, without the permission of the Secretary, so alters as to materially change the meaning of any mark, brand, or label required to appear upon any wine upon its removal from premises subject to the provisions of subchapter F, or from customs custody, or who, after such removal, represents any wine, whether in its original containers or otherwise, to be of an identity or origin other than its proper identity or origin as shown by such stamp, mark, brand, or label, or who, directly or indirectly, and whether by manner of packaging or advertising or any other form of representation, represents any still wine to be an effervescent wine or a substitute for an effervescent wine, shall be fined not more than $1,000, or imprisoned not more than 1 year, or both, for each such offense.
(Added
Editorial Notes
Prior Provisions
A prior section 5662, act Aug. 16, 1954, ch. 736,
Amendments
1976—
Statutory Notes and Related Subsidiaries
Effective Date of 1976 Amendment
Amendment by section 1905(b)(2)(D) of
§5663. Cross reference
For penalties of common application pertaining to liquors, including wines, see part IV.
(Added
Editorial Notes
Prior Provisions
A prior section 5663, act Aug. 16, 1954, ch. 736,
Amendments
1979—
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
PART III—PENALTY, SEIZURE, AND FORFEITURE PROVISIONS APPLICABLE TO BEER AND BREWING
Editorial Notes
Prior Provisions
A prior part III consisted of
Amendments
1978—
1976—
§5671. Penalty and forfeiture for evasion of beer tax and fraudulent noncompliance with requirements
Whoever evades or attempts to evade any tax imposed by section 5051, or with intent to defraud the United States fails or refuses to keep and file true and accurate records and returns as required by section 5415 and regulations issued pursuant thereto, shall be fined not more than $5,000, or imprisoned not more than 5 years, or both, for each such offense, and shall forfeit all beer made by him or for him, and all the vessels, utensils, and apparatus used in making the same.
(Added
Editorial Notes
Prior Provisions
A prior section 5671, act Aug. 16, 1954, ch. 736,
Amendments
2005—
Statutory Notes and Related Subsidiaries
Effective Date of 2005 Amendment
Amendment by
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
§5672. Penalty for failure of brewer to comply with requirements and to keep records and file returns
Every brewer who, otherwise than with intent to defraud the United States, fails or refuses to keep the records and file the returns required by section 5415 and regulations issued pursuant thereto, or refuses to permit any internal revenue officer to inspect his records in the manner provided, or violates any of the provisions of subchapter G or regulations issued pursuant thereto shall be fined not more than $1,000, or imprisoned not more than 1 year, or both, for each such offense.
(Added
Editorial Notes
Prior Provisions
A prior section 5672, act Aug. 16, 1954, ch. 736,
§5673. Forfeiture for flagrant and willful removal of beer without taxpayment
For flagrant and willful removal of taxable beer for consumption or sale, with intent to defraud the United States of the tax thereon, all the right, title, and interest of each person who knowingly has suffered or permitted such removal, or has connived at the same, in the lands and buildings constituting the brewery shall be forfeited by a proceeding in rem in the District Court of the United States having jurisdiction thereof.
(Added
Editorial Notes
Prior Provisions
A prior section 5673, act Aug. 16, 1954, ch. 736,
§5674. Penalty for unlawful production or removal of beer
(a) Unlawful production
Any person who brews beer or produces beer shall be fined not more than $1,000, or imprisoned not more than 1 year, or both, unless such beer is brewed or produced in a brewery qualified under subchapter G or such production is exempt from tax under section 5053(e) (relating to beer for personal or family use).
(b) Unlawful removal
Any brewer or other person who removes or in any way aids in the removal from any brewery of beer without complying with the provisions of this chapter or regulations issued pursuant thereto shall be fined not more than $1,000, or imprisoned not more than 1 year, or both.
(Added
Editorial Notes
Prior Provisions
A prior section 5674, act Aug. 16, 1954, ch. 736,
Amendments
1978—
Statutory Notes and Related Subsidiaries
Effective Date of 1978 Amendment
Amendment by
§5675. Penalty for intentional removal or defacement of brewer's marks and brands
Every person other than the owner, or his agent authorized so to do, who intentionally removes or defaces any mark, brand, or label required by section 5412 and regulations issued pursuant thereto shall be liable to a penalty of $50 for each barrel or other container from which such mark, brand, or label is so removed or defaced.
(Added
Editorial Notes
Prior Provisions
A prior section 5675, act Aug. 16, 1954, ch. 736,
[§5676. Repealed. Pub. L. 94–455, title XIX, §1905(b)(1)(A), Oct. 4, 1976, 90 Stat. 1822 ]
Section, added
A prior section 5676, act Aug. 16, 1954, ch. 736,
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal effective on first day of first month which begins more than 90 days after Oct. 4, 1976, see section 1905(d) of
PART IV—PENALTY, SEIZURE, AND FORFEITURE PROVISIONS COMMON TO LIQUORS
Editorial Notes
Prior Provisions
A prior part IV consisted of
Amendments
1976—
§5681. Penalty relating to signs
(a) Failure to post required sign
Every person engaged in distilled spirits operations who fails to post the sign required by section 5180(a) shall be fined not more than $1,000, or imprisoned not more than 1 year, or both.
(b) Posting or displaying false sign
Every person, other than a distiller, warehouseman, or processor of distilled spirits who has received notice of registration of his plant under the provisions of section 5171(c), or other than a wholesale dealer in liquors who meets the requirements of section 5121(a) and section 5124 (or who is exempt from such requirements by reason of section 5121(b)), who puts up or keeps up any sign indicating that he may lawfully carry on the business of a distiller, warehouseman, or processor of distilled spirits, or wholesale dealer in liquors, as the case may be, shall be fined not more than $1,000, or imprisoned not more than 1 year, or both.
(c) Premises where no sign is placed or kept
Every person who works in any distilled spirits plant on which no sign required by section 5180(a) is placed or kept, and every person who knowingly receives at, or carries or conveys any distilled spirits to or from any such distilled spirits plant or who knowingly carries or delivers any grain, molasses, or other raw material to any distilled spirits plant on which such a sign is not placed and kept, shall forfeit all vehicles, aircraft, or vessels used in carrying or conveying such property and shall be fined not more than $1,000, or imprisoned not more than 1 year, or both.
(d) Presumption
Whenever on trial for violation of subsection (c) by working in a distilled spirits plant on which no sign required by section 5180(a) is placed or kept, the defendant is shown to have been present at such premises, such presence of the defendant shall be deemed sufficient evidence to authorize conviction, unless the defendant explains such presence to the satisfaction of the jury (or of the court when tried without jury).
(Added
Editorial Notes
Prior Provisions
A prior section 5681, act Aug. 16, 1954, ch. 736,
Amendments
2018—Subsec. (b).
1997—Subsec. (a).
Subsec. (c).
1979—Subsec. (a).
Subsec. (b).
Subsec. (c).
Subsec. (d).
Statutory Notes and Related Subsidiaries
Effective Date of 2018 Amendment
Effective Date of 1997 Amendment
Effective Date of 1979 Amendment
Amendment by
Effective Date
Section effective July 1, 1959, see section 210(a)(1) of
§5682. Penalty for breaking locks or gaining access
Every person, who destroys, breaks, injures, or tampers with any lock or seal which may be placed on any room, building, tank, vessel, or apparatus, by any authorized internal revenue officer or any approved lock or seal placed thereon by a distilled spirits plant proprietor, or who opens said lock, seal, room, building, tank, vessel, or apparatus, or in any manner gains access to the contents therein, in the absence of the proper officer, or otherwise than as authorized by law, shall be fined not more than $5,000, or imprisoned not more than 3 years, or both.
(Added
Editorial Notes
Prior Provisions
A prior section 5682, act Aug. 16, 1954, ch. 736,
Amendments
1979—
Statutory Notes and Related Subsidiaries
Effective Date of 1979 Amendment
Amendment by
§5683. Penalty and forfeiture for removal of liquors under improper brands
Whenever any person ships, transports, or removes any distilled spirits, wines, or beer, under any other than the proper name or brand known to the trade as designating the kind and quality of the contents of the casks or packages containing the same, or causes such act to be done, he shall be fined not more than $1,000, or imprisoned not more than 1 year, or both, and shall forfeit such distilled spirits, wines, or beer, and casks or packages.
(Added
Editorial Notes
Prior Provisions
A prior section 5683, act Aug. 16, 1954, ch. 736,
§5684. Penalties relating to the payment and collection of liquor taxes
(a) Failure to pay tax
Whoever fails to pay any tax imposed by part I of subchapter A at the time prescribed shall, in addition to any other penalty provided in this title, be liable to a penalty of 5 percent of the tax due but unpaid.
(b) Applicability of section 6665
The penalties imposed by subsection (a) shall be assessed, collected, and paid in the same manner as taxes, as provided in section 6665(a).
(c) Cross references
(1) For provisions relating to interest in the case of taxes not paid when due, see section 6601.
(2) For penalty for failure to file tax return or pay tax, see section 6651.
(3) For additional penalties for failure to pay tax, see section 6653.
(4) For penalty for failure to make deposits or for overstatement of deposits, see section 6656.
(5) For penalty for attempt to evade or defeat any tax imposed by this title, see section 7201.
(6) For penalty for willful failure to file return, supply information, or pay tax, see section 7203.
(Added
Editorial Notes
Prior Provisions
A prior section 5684, act Aug. 16, 1954, ch. 736,
Amendments
1989—Subsec. (b).
1984—Subsec. (b).
1981—Subsec. (b).
Subsec. (c).
Subsec. (d).
1969—Subsec. (d)(2).
Statutory Notes and Related Subsidiaries
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1984 Amendment
Amendment by section 714(h)(1) of
Amendment by section 722(a)(5) of
Effective Date of 1981 Amendment
Amendment by section 724(b)(4) of
Effective Date of 1969 Amendment
Amendment by
§5685. Penalty and forfeiture relating to possession of devices for emitting gas, smoke, etc., explosives and firearms, when violating liquor laws
(a) Penalty for possession of devices for emitting gas, smoke, etc.
Whoever, when violating any law of the United States, or of any possession of the United States, or of the District of Columbia, in regard to the manufacture, taxation, or transportation of or traffic in distilled spirits, wines, or beer, or when aiding in any such violation, has in his possession or in his control any device capable of causing emission of gas, smoke, or fumes, and which may be used for the purpose of hindering, delaying, or preventing pursuit or capture, any explosive, or any firearm (as defined in section 5845), except a machine gun, or a shotgun having a barrel or barrels less than 18 inches in length, or a rifle having a barrel or barrels less than 16 inches in length, shall be fined not more than $5,000, or imprisoned not more than 10 years, or both, and all persons engaged in any such violation or in aiding in any such violation shall be held to be in possession or control of such device, firearm, or explosive.
(b) Penalty for possession of machine gun, etc.
Whoever, when violating any such law, has in his possession or in his control a machine gun, or any shotgun having a barrel or barrels less than 18 inches in length, or a rifle having a barrel or barrels less than 16 inches in length, shall be imprisoned not more than 20 years; and all persons engaged in any such violation or in aiding in any such violation shall be held to be in possession and control of such machine gun, shotgun, or rifle.
(c) Forfeiture of firearms, devices, etc.
Every such firearm or device for emitting gas, smoke, or fumes, and every such explosive, machine gun, shotgun, or rifle, in the possession or control of any person when violating any such law, shall be seized and shall be forfeited and disposed of in the manner provided by section 5872.
(d) Definition of machine gun
As used in this section the term "machine gun" means a machine gun as defined in section 5845(b).
(Added
Editorial Notes
Prior Provisions
A prior section 5685, act Aug. 16, 1954, ch. 736,
Amendments
1976—Subsec. (a).
Subsec. (c).
Subsec. (d).
1960—Subsecs. (a), (b).
Statutory Notes and Related Subsidiaries
Effective Date of 1976 Amendment
Amendment by
Effective Date of 1960 Amendment
Amendment by
§5686. Penalty for having, possessing, or using liquor or property intended to be used in violating provisions of this chapter
(a) General
It shall be unlawful to have or possess any liquor or property intended for use in violating any provision of this chapter or regulations issued pursuant thereto, or which has been so used, and every person so having or possessing or using such liquor or property, shall be fined not more than $5,000, or imprisoned not more than 1 year, or both.
(b) Cross reference
For seizure and forfeiture of liquor and property had, possessed, or used in violation of subsection (a), see section 7302.
(Added
Editorial Notes
Prior Provisions
A prior section 5686, act Aug. 16, 1954, ch. 736,
Prior section 5686(a) related to offenses as to operation of industrial alcohol or denaturing plants or unlawful withdrawal of taxable alcohol. See
§5687. Penalty for offenses not specifically covered
Whoever violates any provision of this chapter or regulations issued pursuant thereto, for which a specific criminal penalty is not prescribed by this chapter, shall be fined not more than $1,000, or imprisoned not more than 1 year, or both, for each such offense.
(Added
Editorial Notes
Prior Provisions
A prior section 5687, act Aug. 16, 1954, ch. 736,
Prior section 5687 also related to forfeitures applicable to distillers, rectifiers, and wholesale liquor dealers for offenses not specifically covered. See
Provisions similar to those comprising this section were contained in prior sections 5602, 5608(c), 5612 to 5619, 5627, 5628, 5630, 5631, 5643, 5684(a) and 5686(a), act Aug. 16, 1954, ch. 736,
§5688. Disposition and release of seized property
(a) Forfeiture
(1) Delivery
All distilled spirits, wines, and beer forfeited, summarily or by order of court, under any law of the United States, shall be delivered to the Administrator of General Services to be disposed of as hereinafter provided.
(2) Disposal
The Administrator of General Services shall dispose of all distilled spirits, wines, and beer which have been delivered to him pursuant to paragraph (1)—
(A) by delivery to such Government agencies as, in his opinion, have a need for such distilled spirits, wines, or beer for medicinal, scientific, or mechanical purposes, or for any other official purpose for which appropriated funds may be expended by a Government agency; or
(B) by gifts to such eleemosynary institutions as, in his opinion, have a need for such distilled spirits, wines, or beer for medicinal purposes; or
(C) by destruction.
(3) Limitation on disposal
Except as otherwise provided by law, no distilled spirits, wines, or beer which have been seized under any law of the United States may be disposed of in any manner whatsoever except after forfeiture and as provided in this subsection.
(4) Regulations
The Administrator of General Services is authorized to make all rules and regulations necessary to carry out the provisions of this subsection.
(5) Remission or mitigation of forfeitures
Nothing in this section shall affect the authority of the Secretary, under the customs or internal revenue laws, to remit or mitigate the forfeiture, or alleged forfeiture, of such distilled spirits, wines, or beer, or the authority of the Secretary, to compromise any civil or criminal case in respect of such distilled spirits, wines, or beer prior to commencement of suit thereon, or the authority of the Secretary to compromise any claim under the customs laws in respect to such distilled spirits, wines, or beer.
(b) Distraint or judicial process
Except as provided in section 5243, all distilled spirits sold by order of court, or under process of distraint, shall be sold subject to tax; and the purchaser shall immediately, and before he takes possession of said spirits, pay the tax thereon, pursuant to the applicable provisions of this chapter and in accordance with regulations to be prescribed by the Secretary.
(c) Release of seized vessels or vehicles by courts
Notwithstanding any provisions of law relating to the return on bond of any vessel or vehicle seized for the violation of any law of the United States, the court having jurisdiction of the subject matter may, in its discretion and upon good cause shown by the United States, refuse to order such return of any such vessel or vehicle to the claimant thereof. As used in this subsection, the word "vessel" includes every description of watercraft used, or capable of being used, as a means of transportation in water or in water and air; and the word "vehicle" includes every animal and description of carriage or other contrivance used, or capable of being used, as a means of transportation on land or through the air.
(Added
Editorial Notes
Prior Provisions
A prior section 5688, act Aug. 16, 1954, ch. 736,
Amendments
1976—Subsecs. (a)(5), (b).
[§5689. Repealed. Pub. L. 94–455, title XIX, §1905(b)(2)(E)(i), Oct. 4, 1976, 90 Stat. 1822 ]
Section, added
A prior section 5689, act Aug. 16, 1954, ch. 736,
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal effective on first day of first month which begins more than 90 days after Oct. 4, 1976, see section 1905(d) of
§5690. Definition of the term "person"
The term "person", as used in this subchapter, includes an officer or employee of a corporation or a member or employee of a partnership, who as such officer, employee, or member is under a duty to perform the act in respect of which the violation occurs.
(Added
Editorial Notes
Prior Provisions
A prior section 5690, act Aug. 16, 1954, ch. 736,
[PART V—REPEALED]
Editorial Notes
Prior Provisions
A prior part V consisted of sections 5691 to 5693, prior to the general revision of this chapter by
[§5691. Repealed. Pub. L. 109–59, title XI, §11125(b)(19)(A), Aug. 10, 2005, 119 Stat. 1956 ]
Section, added
Editorial Notes
Prior Provisions
A prior section 5691, act Aug. 16, 1954, ch. 736,
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal effective July 1, 2008, but inapplicable to taxes imposed for periods before such date, see section 11125(c) of
[§5692. Repealed. Pub. L. 90–618, title II, §206(a), Oct. 22, 1968, 82 Stat. 1235 ]
Section, added
A prior section 5692, act Aug. 16, 1954, ch. 736,
A prior section 5693, act Aug. 16, 1954, ch. 736,
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal effective Oct. 22, 1968, see section 207 of
CHAPTER 52 —TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES
Editorial Notes
Amendments
1997—
1988—
1987—
1986—
1976—
1965—
1958—
1 Section numbers editorially supplied.
Subchapter A—Definitions; Rate and Payment of Tax; Exemption From Tax; and Refund and Drawback of Tax
Editorial Notes
Amendments
1965—
1958—
§5701. Rate of tax
(a) Cigars
On cigars, manufactured in or imported into the United States, there shall be imposed the following taxes:
(1) Small cigars
On cigars, weighing not more than 3 pounds per thousand, $50.33 per thousand;
(2) Large cigars
On cigars weighing more than 3 pounds per thousand, a tax equal to 52.75 percent of the price for which sold but not more than 40.26 cents per cigar.
Cigars not exempt from tax under this chapter which are removed but not intended for sale shall be taxed at the same rate as similar cigars removed for sale.
(b) Cigarettes
On cigarettes, manufactured in or imported into the United States, there shall be imposed the following taxes:
(1) Small cigarettes
On cigarettes, weighing not more than 3 pounds per thousand, $50.33 per thousand;
(2) Large cigarettes
On cigarettes, weighing more than 3 pounds per thousand, $105.69 per thousand; except that, if more than 6½ inches in length, they shall be taxable at the rate prescribed for cigarettes weighing not more than 3 pounds per thousand, counting each 2¾ inches, or fraction thereof, of the length of each as one cigarette.
(c) Cigarette papers
On cigarette papers, manufactured in or imported into the United States, there shall be imposed a tax of 3.15 cents for each 50 papers or fractional part thereof; except that, if cigarette papers measure more than 6½ inches in length, they shall be taxable at the rate prescribed, counting each 2¾ inches, or fraction thereof, of the length of each as one cigarette paper.
(d) Cigarette tubes
On cigarette tubes, manufactured in or imported into the United States, there shall be imposed a tax of 6.30 cents for each 50 tubes or fractional part thereof, except that if cigarette tubes measure more than 6½ inches in length, they shall be taxable at the rate prescribed, counting each 2¾ inches, or fraction thereof, of the length of each as one cigarette tube.
(e) Smokeless tobacco
On smokeless tobacco, manufactured in or imported into the United States, there shall be imposed the following taxes:
(1) Snuff
On snuff, $1.51 per pound and a proportionate tax at the like rate on all fractional parts of a pound.
(2) Chewing tobacco
On chewing tobacco, 50.33 cents per pound and a proportionate tax at the like rate on all fractional parts of a pound.
(f) Pipe tobacco
On pipe tobacco, manufactured in or imported into the United States, there shall be imposed a tax of $2.8311 cents per pound (and a proportionate tax at the like rate on all fractional parts of a pound).
(g) Roll-your-own tobacco
On roll-your-own tobacco, manufactured in or imported into the United States, there shall be imposed a tax of $24.78 per pound (and a proportionate tax at the like rate on all fractional parts of a pound).
(h) Imported tobacco products and cigarette papers and tubes
The taxes imposed by this section on tobacco products and cigarette papers and tubes imported into the United States shall be in addition to any import duties imposed on such articles, unless such import duties are imposed in lieu of internal revenue tax.
(Aug. 16, 1954, ch. 736,
Editorial Notes
Amendments
2018—Subsec. (e).
2009—Subsec. (a)(1).
Subsec. (a)(2).
Subsec. (b)(1).
Subsec. (b)(2).
Subsec. (c).
Subsec. (d).
Subsec. (e)(1).
Subsec. (e)(2).
Subsec. (f).
Subsec. (g).
1997—Subsec. (a)(1).
Subsec. (a)(2).
"(A) 10.625 percent of the price for which sold but not more than $25 per thousand on cigars removed during 1991 or 1992, and
"(B) 12.75 percent of the price for which sold but not more than $30 per thousand on cigars removed after 1992."
Subsec. (b)(1).
Subsec. (b)(2).
Subsec. (c).
Subsec. (d).
Subsec. (e)(1).
Subsec. (e)(2).
Subsec. (f).
Subsecs. (g), (h).
1990—Subsec. (a)(1).
Subsec. (a)(2).
Subsec. (b)(1).
Subsec. (b)(2).
Subsec. (c).
Subsec. (d).
Subsec. (e)(1).
Subsec. (e)(2).
Subsec. (f).
1988—Subsecs. (f), (g).
1986—Subsecs. (e), (f).
1982—Subsec. (b)(1).
Subsec. (b)(2).
1976—Subsec. (a).
Subsec. (e).
1968—Subsec. (a).
1965—
Subsec. (b)(1).
1964—Subsec. (c)(1).
1963—Subsec. (c)(1).
1962—Subsec. (c)(1).
1961—Subsec. (c)(1).
1960—Subsec. (b).
Subsec. (c)(1).
1959—Subsec. (c)(1).
1958—Subsec. (b).
Subsec. (c)(1).
Subsec. (d).
Subsec. (f).
1957—Subsec. (c)(1).
1956—Subsec. (c)(1). Act Mar. 29, 1956, substituted "April 1, 1957" for "April 1, 1956" in two places.
1955—Subsec. (c)(1). Act Mar. 30, 1955, substituted "April 1, 1956" for "April 1, 1955" in two places.
Statutory Notes and Related Subsidiaries
Effective Date of 2009 Amendment
Except as otherwise provided, amendment by
Effective Date of 1997 Amendment
"(1)
"(2)
"(A) on the date of the enactment of this Act [Aug. 5, 1997] is engaged in business as a manufacturer of roll-your-own tobacco or as an importer of tobacco products or cigarette papers and tubes, and
"(B) before January 1, 2000, submits an application under subchapter B of
may, notwithstanding such subchapter B, continue to engage in such business pending final action on such application. Pending such final action, all provisions of such
Effective Date of 1990 Amendment
Effective Date of 1988 Amendment
"(1)
"(2)
"(A) on the date of the enactment of this Act [Nov. 10, 1988], is engaged in business as a manufacturer of pipe tobacco, and
"(B) before January 1, 1989, submits an application under subchapter B of
may, notwithstanding such subchapter B, continue to engage in such business pending final action on such application. Pending such final action, all provisions of
Effective Date of 1986 Amendment
"(1)
"(2)
"(A) on the date of the enactment of this Act [Apr. 7, 1986], is engaged in business as a manufacturer of smokeless tobacco, and
"(B) before July 1, 1986, submits an application under subchapter B of
may, notwithstanding such subchapter B, continue to engage in such business pending final action on such application. Pending such final action, all provisions of
Effective Date of 1982 Amendment
[
Effective Date of 1976 Amendment
Amendment by section 1905(a)(24) of
Effective Date of 1968 Amendment
Effective Date of 1965 Amendment
Effective Date of 1960 Amendment
Effective Date of 1958 Amendment
Amendment by
Coordination With Tobacco Industry Settlement Agreement
Floor Stocks Taxes
"(1)
"(A) the tax which would be imposed under section 5701 of such Code on the article if the article had been removed on such date, over
"(B) the prior tax (if any) imposed under section 5701 of such Code on such article.
"(2)
"(3)
"(A)
"(B)
"(C)
"(4)
"(A) 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 [
"(B) such article is held on such date under the supervision of an officer of the United States Customs and Border Protection of the Department of Homeland Security pursuant to the 2d proviso of such section 3(a).
"(5)
"(A)
"(B)
"(6)
"(7)
"(1)
"(A) the tax which would be imposed under section 5701 of the Internal Revenue Code of 1986 on the article if the article had been removed on such date, over
"(B) the prior tax (if any) imposed under section 5701 of such Code on such article.
"(2)
"(3)
"(4)
"(A)
"(B)
"(C)
"(5)
"(A) 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 [
"(B) such article is held on such date under the supervision of a customs officer pursuant to the 2d proviso of such section 3(a).
"(6)
"(A)
"(B)
"(C)
"(7)
"(8)
"(1)
"(A)
"(B)
"(2)
"(A)
"(i) the aggregate number of cigarettes held by such person on such date does not exceed 30,000, and
"(ii) such person 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 subparagraph.
For purposes of this subparagraph, in the case of cigarettes measuring more than 6½ inches in length, each 2¾ inches (or fraction thereof) of the length of each shall be counted as one cigarette.
"(B)
"(3)
"(4)
"(A)
"(B)
"(C)
"(5)
"(A)
"(B)
"(C)
"(6)
"(7)
"(1)
"(2)
"(A)
"(B)
"(C)
"(i) internal revenue taxes have been determined, or customs duties liquidated, with respect to such pipe tobacco before such date pursuant to a request made under the first proviso of section 3(a) of such Act [
"(ii) such pipe tobacco is held on such date under the supervision of a customs officer pursuant to the second proviso of such section 3(a).
"Under regulations prescribed by the Secretary of the Treasury or his delegate, provisions similar to sections 5706 and 5708 of the 1986 Code shall apply to pipe tobacco with respect to which tax is imposed by paragraph (1) by reason of this subparagraph.
"(3)
"(4)
"(1)
"(A)
"(B)
"(2)
"(A)
"(B)
"(3)
"(4)
§5702. Definitions
When used in this chapter—
(a) Cigar
"Cigar" means any roll of tobacco wrapped in leaf tobacco or in any substance containing tobacco (other than any roll of tobacco which is a cigarette within the meaning of subsection (b)(2)).
(b) Cigarette
"Cigarette" means—
(1) any roll of tobacco wrapped in paper or in any substance not containing tobacco, and
(2) any roll of tobacco wrapped in any substance containing tobacco which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette described in paragraph (1).
(c) Tobacco products
"Tobacco products" means cigars, cigarettes, smokeless tobacco, pipe tobacco, and roll-your-own tobacco.
(d) Manufacturer of tobacco products
"Manufacturer of tobacco products" means any person who manufactures cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own tobacco, except that such term shall not include—
(1) a person who produces cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own tobacco solely for the person's own personal consumption or use, and
(2) a proprietor of a customs bonded manufacturing warehouse with respect to the operation of such warehouse.
Such term shall include any person who for commercial purposes makes available for consumer use (including such consumer's personal consumption or use under paragraph (1)) a machine capable of making cigarettes, cigars, or other tobacco products. A person making such a machine available for consumer use shall be deemed the person making the removal as defined by subsection (j) with respect to any tobacco products manufactured by such machine. A person who sells a machine directly to a consumer at retail for a consumer's personal home use is not making a machine available for commercial purposes if such machine is not used at a retail premises and is designed to produce tobacco products only in personal use quantities.
(e) Cigarette paper
"Cigarette paper" means paper, or any other material except tobacco, prepared for use as a cigarette wrapper.
(f) Cigarette tube
"Cigarette tube" means cigarette paper made into a hollow cylinder for use in making cigarettes.
(g) Manufacturer of cigarette papers and tubes
"Manufacturer of cigarette papers and tubes" means any person who manufactures cigarette paper, or makes up cigarette paper into tubes, except for his own personal use or consumption.
(h) Export warehouse
"Export warehouse" means a bonded internal revenue warehouse for the storage of tobacco products or cigarette papers or tubes or any processed tobacco, upon which the internal revenue tax has not been paid, for subsequent shipment to a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States, or for consumption beyond the jurisdiction of the internal revenue laws of the United States.
(i) Export warehouse proprietor
"Export warehouse proprietor" means any person who operates an export warehouse.
(j) Removal or remove
"Removal" or "remove" means the removal of tobacco products or cigarette papers or tubes, or any processed tobacco, from the factory or from internal revenue bond under section 5704, as the Secretary shall by regulation prescribe, or release from customs custody, and shall also include the smuggling or other unlawful importation of such articles into the United States.
(k) Importer
"Importer" means any person in the United States to whom nontaxpaid tobacco products or cigarette papers or tubes, or any processed tobacco, manufactured in a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States are shipped or consigned; any person who removes cigars or cigarettes for sale or consumption in the United States from a customs bonded manufacturing warehouse; and any person who smuggles or otherwise unlawfully brings tobacco products or cigarette papers or tubes, or any processed tobacco, into the United States.
(l) Determination of price on cigars
In determining price for purposes of section 5701(a)(2)—
(1) there shall be included any charge incident to placing the article in condition ready for use,
(2) there shall be excluded—
(A) the amount of the tax imposed by this chapter or section 7652, and
(B) if stated as a separate charge, the amount of any retail sales tax imposed by any State or political subdivision thereof or the District of Columbia, whether the liability for such tax is imposed on the vendor or vendee, and
(3) rules similar to the rules of section 4216(b) shall apply.
(m) Definitions relating to smokeless tobacco
(1) Smokeless tobacco
The term "smokeless tobacco" means any snuff or chewing tobacco.
(2) Snuff
The term "snuff" means any finely cut, ground, or powdered tobacco that is not intended to be smoked.
(3) Chewing tobacco
The term "chewing tobacco" means any leaf tobacco that is not intended to be smoked.
(n) Pipe tobacco
The term "pipe tobacco" means any tobacco which, because of its appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or purchased by, consumers as tobacco to be smoked in a pipe.
(o) Roll-your-own tobacco
The term "roll-your-own tobacco" means any tobacco which, because of its appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or purchased by, consumers as tobacco for making cigarettes or cigars, or for use as wrappers thereof.
(p) Manufacturer of processed tobacco
(1) In general
The term "manufacturer of processed tobacco" means any person who processes any tobacco other than tobacco products.
(2) Processed tobacco
The processing of tobacco shall not include the farming or growing of tobacco or the handling of tobacco solely for sale, shipment, or delivery to a manufacturer of tobacco products or processed tobacco.
(Aug. 16, 1954, ch. 736,
Editorial Notes
Amendments
2012—Subsec. (d).
2009—Subsec. (h).
Subsec. (j).
Subsec. (k).
Subsec. (o).
Subsec. (p).
2000—Subsec. (f).
Subsec. (g).
Subsec. (h).
Subsecs. (i) to (p).
1997—Subsec. (c).
Subsec. (d).
Subsec. (d)(1).
Subsec. (k).
Subsec. (p).
1990—Subsec. (m).
1988—Subsec. (c).
Subsec. (d).
Subsec. (o).
1986—Subsec. (c).
Subsec. (d).
Subsec. (n).
1976—Subsec. (k).
Subsec. (m).
1965—Subsec. (a).
Subsec. (b).
Subsec. (c).
Subsec. (d).
Subsecs. (e) to (k).
Subsec. (l).
Subsec. (m).
Subsecs. (n), (o).
1958—Subsec. (a).
Subsecs. (b) to (d).
Subsec. (e).
Subsec. (f).
Subsec. (g).
Subsec. (i).
Subsec. (j).
Subsec. (k).
Subsec. (l).
Subsec. (m).
Subsec. (n).
Subsec. (o).
Statutory Notes and Related Subsidiaries
Effective Date of 2012 Amendment
Effective Date of 2009 Amendment
Except as otherwise provided, amendment by
Effective Date of 2000 Amendment
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1990 Amendment
Amendment by
Effective Date of 1988 Amendment
Amendment by
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by section 2128(b) of
Effective Date of 1965 Amendment
Amendment by section 502(b)(3) of
Effective Date of 1958 Amendment
Amendment by
§5703. Liability for tax and method of payment
(a) Liability for tax
(1) Original liability
The manufacturer or importer of tobacco products and cigarette papers and tubes shall be liable for the taxes imposed thereon by section 5701.
(2) Transfer of liability
When tobacco products and cigarette papers and tubes are transferred, without payment of tax, pursuant to section 5704, the liability for tax shall be transferred in accordance with the provisions of this paragraph. When tobacco products and cigarette papers and tubes are transferred between the bonded premises of manufacturers and export warehouse proprietors, the transferee shall become liable for the tax upon receipt by him of such articles, and the transferor shall thereupon be relieved of his liability for such tax. When tobacco products and cigarette papers and tubes are released in bond from customs custody for transfer to the bonded premises of a manufacturer of tobacco products or cigarette papers and tubes, the transferee shall become liable for the tax on such articles upon release from customs custody, and the importer shall thereupon be relieved of his liability for such tax. All provisions of this chapter applicable to tobacco products and cigarette papers and tubes in bond shall be applicable to such articles returned to bond upon withdrawal from the market or returned to bond after previous removal for a tax-exempt purpose.
(b) Method of payment of tax
(1) In general
The taxes imposed by section 5701 shall be determined at the time of removal of the tobacco products and cigarette papers and tubes. Such taxes shall be paid on the basis of return. The Secretary shall, by regulations, prescribe the period or the event for which such return shall be made and the information to be furnished on such return. Any postponement under this subsection of the payment of taxes determined at the time of removal shall be conditioned upon the filing of such additional bonds, and upon compliance with such requirements, as the Secretary may prescribe for the protection of the revenue. The Secretary may, by regulations, require payment of tax on the basis of a return prior to removal of the tobacco products and cigarette papers and tubes where a person defaults in the postponed payment of tax on the basis of a return under this subsection or regulations prescribed thereunder. All administrative and penalty provisions of this title, insofar as applicable, shall apply to any tax imposed by section 5701.
(2) Time for payment of taxes
(A) In general
Except as otherwise provided in this paragraph, in the case of taxes on tobacco products and cigarette papers and tubes removed during any semimonthly period under bond for deferred payment of tax, the last day for payment of such taxes shall be the 14th day after the last day of such semimonthly period.
(B) Imported articles
In the case of tobacco products and cigarette papers and tubes which are imported into the United States—
(i) 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.
(ii) Special rule for entry for warehousing
Except as provided in clause (iv), 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.
(iii) Foreign trade zones
Except as provided in clause (iv) 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.
(iv) Exception for articles destined for export
Clauses (ii) and (iii) shall not apply to any article which is shown to the satisfaction of the Secretary to be destined for export.
(C) Tobacco products and cigarette papers and tubes brought into the United States from Puerto Rico
In the case of tobacco products and cigarette papers and tubes which are brought into the United States 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.
(D) Special rule for tax due in September
(i) In general
Notwithstanding the preceding provisions of this paragraph, the taxes on tobacco products and cigarette papers and tubes for the period beginning on September 16 and ending on September 26 shall be paid not later than September 29.
(ii) Safe harbor
The requirement of clause (i) shall be treated as met if the amount paid not later than September 29 is not less than 11/15 of the taxes on tobacco products and cigarette papers and tubes for the period beginning on September 1 and ending on September 15.
(iii) Taxpayers not required to use electronic funds transfer
In the case of payments not required to be made by electronic funds transfer, clauses (i) and (ii) shall be applied by substituting "September 25" for "September 26", "September 28" for "September 29", and "2/3" for "11/15".
(E) Special rule where due date falls on Saturday, Sunday, or holiday
Notwithstanding section 7503, if, but for this subparagraph, the due date under this paragraph would fall on a Saturday, Sunday, or a legal holiday (as defined in 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 subparagraph (D) falls on a Sunday).
(F) Special rule for unlawfully manufactured tobacco products
In the case of any tobacco products, cigarette paper, or cigarette tubes manufactured in the United States at any place other than the premises of a manufacturer of tobacco products, cigarette paper, or cigarette tubes that has filed the bond and obtained the permit required under this chapter, tax shall be due and payable immediately upon manufacture.
(3) Payment by electronic fund transfer
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 tobacco products and cigarette papers and tubes by section 5701 (or 7652) shall pay such taxes during the succeeding calendar year by electronic fund transfer (as defined in section 5061(e)(2)) to a Federal Reserve Bank. Rules similar to the rules of section 5061(e)(3) shall apply to the $5,000,000 amount specified in the preceding sentence.
(c) Use of government depositaries
The Secretary may authorize Federal Reserve banks, and incorporated banks or trust companies which are depositaries or financial agents of the United States, to receive any tax imposed by this chapter, in such manner, at such times, and under such conditions as he may prescribe; and he shall prescribe the manner, time, and condition under which the receipt of such tax by such banks and trust companies is to be treated as payment for tax purposes.
(d) Assessment
Whenever any tax required to be paid by this chapter is not paid in full at the time required for such payment, it shall be the duty of the Secretary, subject to the limitations prescribed in section 6501, on proof satisfactory to him, to determine the amount of tax which has been omitted to be paid, and to make an assessment therefor against the person liable for the tax. The tax so assessed shall be in addition to the penalties imposed by law for failure to pay such tax when required. Except in cases where delay may jeopardize collection of the tax, or where the amount is nominal or the result of an evident mathematical error, no such assessment shall be made until and after the person liable for the tax has been afforded reasonable notice and opportunity to show cause, in writing, against such assessment.
(Aug. 16, 1954, ch. 736,
Editorial Notes
Amendments
2009—Subsec. (b)(2)(F).
1994—Subsec. (b)(2)(D).
Subsec. (b)(2)(E).
1988—Subsec. (b)(2)(B)(i), (ii), (C).
1986—Subsec. (b)(2).
Subsec. (b)(3).
1984—Subsec. (b)(3).
1983—Subsec. (b).
1976—Subsec. (a).
Subsec. (b).
Subsec. (c).
Subsecs. (d), (e).
1958—Subsec. (a)(1).
Subsec. (a)(2).
Subsec. (b).
Subsec. (c).
Subsec. (d).
Subsec. (e).
Statutory Notes and Related Subsidiaries
Effective Date of 2009 Amendment
Effective Date of 1994 Amendment
Amendment by
Effective Date of 1988 Amendment
Amendment by
Effective Date of 1986 Amendments
Amendment by
Amendment by
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1983 Amendment
Effective Date of 1976 Amendment
Amendment by section 1905(a)(25) of
Effective Date of 1958 Amendment
Amendment by
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
§5704. Exemption from tax
(a) Tobacco products furnished for employee use or experimental purposes
Tobacco products may be furnished by a manufacturer of such products, without payment of tax, for use or consumption by employees or for experimental purposes, in such quantities, and in such manner as the Secretary shall by regulation prescribed.
(b) Tobacco products and cigarette papers and tubes transferred or removed in bond from domestic factories and export warehouses
A manufacturer or export warehouse proprietor may transfer tobacco products and cigarette papers and tubes, without payment of tax, to the bonded premises of another manufacturer or export warehouse proprietor, or remove such articles, without payment of tax, for shipment to a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States, or for consumption beyond the jurisdiction of the internal revenue laws of the United States; and manufacturers may similarly remove such articles for use of the United States; in accordance with such regulations and under such bonds as the Secretary shall prescribe. Tobacco products and cigarette papers and tubes may not be transferred or removed under this subsection unless such products or papers and tubes bear such marks, labels, or notices as the Secretary shall by regulations prescribe.
(c) Tobacco products and cigarette papers and tubes released in bond from customs custody
Tobacco products and cigarette papers and tubes, imported or brought into the United States, may be released from customs custody, without payment of tax, for delivery to the proprietor of an export warehouse, or to a manufacturer of tobacco products or cigarette papers and tubes if such articles are not put up in packages, in accordance with such regulations and under such bond as the Secretary shall prescribe.
(d) Tobacco products and cigarette papers and tubes exported and returned
Tobacco products and cigarette papers and tubes classifiable under item 804.00 of title I of the Tariff Act of 1930 (relating to duty on certain articles previously exported and returned) may be released from customs custody, without payment of that part of the duty attributable to the internal revenue tax for delivery to the original manufacturer of such tobacco products or cigarette papers and tubes or to the proprietor of an export warehouse authorized by such manufacturer to receive such articles, in accordance with such regulations and under such bond as the Secretary shall prescribe. Upon such release such products, papers, and tubes shall be subject to this chapter as if they had not been exported or otherwise removed from internal-revenue bond.
(Aug. 16, 1954, ch. 736,
Editorial Notes
References in Text
Item 804.00 of title I of the Tariff Act of 1930, referred to in subsec. (d), was classified to item 804.00 of the Tariff Schedules of the United States. The Tariff Schedules of the United States were replaced by the Harmonized Tariff Schedule of the United States. The Harmonized Tariff Schedule of the United States is not set out in the Code. See Publication of Harmonized Tariff Schedule note set out under
Amendments
2000—Subsec. (d).
1997—Subsec. (b).
1989—Subsec. (c).
1986—Subsec. (c).
1976—Subsecs. (a), (b).
Subsecs. (c), (d).
1965—Subsec. (c).
Subsecs. (d), (e).
1964—Subsec. (e).
1958—Subsec. (b).
Subsec. (c).
Subsec. (d).
Statutory Notes and Related Subsidiaries
Effective Date of 2000 Amendment
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1989 Amendment
Effective Date of 1986 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by section 1905(a)(26) of
Effective Date of 1965 Amendment
Amendment by
Effective Date of 1964 Amendment
Effective Date of 1958 Amendment
Amendment by
Report
§5705. Credit, refund, or allowance of tax
(a) Credit or refund
Credit or refund of any tax imposed by this chapter or section 7652 shall be allowed or made (without interest) to the manufacturer, importer, or export warehouse proprietor, on proof satisfactory to the Secretary that the claimant manufacturer, importer, or export warehouse proprietor has paid the tax on tobacco products and cigarette papers and tubes withdrawn by him from the market; or on such articles lost (otherwise than by theft) or destroyed, by fire, casualty, or act of God, while in the possession of ownership of the claimant.
(b) Allowance
If the tax has not yet been paid on tobacco products and cigarette papers and tubes provided to have been withdrawn from the market or lost or destroyed as aforesaid, relief from the tax on such articles may be extended upon the filing of a claim for allowance therefor in accordance with such regulations as the Secretary shall prescribe.
(c) Limitation
Any claim for credit or refund of tax under this section shall be filed within 6 months after the date of the withdrawal from the market, loss, or destruction of the articles to which the claim relates, and shall be in such form and contain such information as the Secretary shall by regulations prescribe.
(Aug. 16, 1954, ch. 736,
Editorial Notes
Amendments
1976—
1965—
Subsec. (a).
Subsec. (c).
1958—Subsec. (a).
Subsec. (b).
Subsec. (c).
Statutory Notes and Related Subsidiaries
Effective Date of 1965 Amendment
Effective Date of 1958 Amendment
Amendment by
§5706. Drawback of tax
There shall be an allowance of drawback of tax paid on tobacco products and cigarette papers and tubes, when shipped from the United States, in accordance with such regulations and upon the filing of such bond as the Secretary shall prescribe.
(Aug. 16, 1954, ch. 736,
Editorial Notes
Amendments
1976—
1958—
Statutory Notes and Related Subsidiaries
Effective Date of 1958 Amendment
Amendment by
[§5707. Repealed. Pub. L. 89–44, title V, §501(g), June 21, 1965, 79 Stat. 150 ]
Section, acts Aug. 16, 1954, ch. 736,
Statutory Notes and Related Subsidiaries
Effective Date of Repeal
Repeal applicable on and after July 1, 1965, see section 701(d) of
§5708. Losses caused by disaster
(a) Authorization
Where 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, the Secretary shall pay (without interest) an amount equal to the amount of the internal revenue taxes paid or determined and customs duties paid on tobacco products and cigarette papers and tubes removed, which were lost, rendered unmarketable, or condemned by a duly authorized official by reason of such disaster occurring in such part of the United States on and after the effective date of this section, if such tobacco products or cigarette papers or tubes were held and intended for sale at the time of such disaster. The payments authorized by this section shall be made to the person holding such tobacco products or cigarette papers or tubes for sale at the time of the disaster.
(b) Claims
No claim shall be allowed under this section unless—
(1) filed within 6 months after the date on which the President makes the determination that the disaster referred to in subsection (a) has occurred; and
(2) the claimant furnishes proof to the satisfaction of the Secretary that—
(A) he was not indemnified by any valid claim of insurance or otherwise in respect of the tax, or tax and duty, on the tobacco products or cigarette papers or tubes covered by the claim, and
(B) he is entitled to payment under this section.
Claims under this section shall be filed under such regulations as the Secretary shall prescribe.
(c) Destruction of tobacco products or cigarette papers or tubes
Before the Secretary makes payment under this section in respect of the tax, or tax and duty, on the tobacco products or cigarette papers or tubes condemned by a duly authorized official or rendered unmarketable, such tobacco products or cigarette papers or tubes shall be destroyed under such supervision as the Secretary may prescribe, unless such tobacco products or cigarette papers or tubes were previously destroyed under supervision satisfactory to the Secretary.
(d) Other laws applicable
All provisions of law, including penalties, applicable in respect of internal revenue taxes on tobacco products and cigarette papers and tubes 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
Editorial Notes
References in Text
The Robert T. Stafford Disaster Relief and Emergency Assistance Act, referred to in subsec. (a), is
Amendments
2004—Subsec. (a).
1988—Subsec. (a).
1976—
1974—Subsec. (a).
1970—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 1974 Amendment
Amendment by
Effective Date of 1970 Amendment
Amendment by
Effective Date
Section effective Sept. 3, 1958, see section 210(a)(1) of
Losses of Tobacco Products Caused by Disaster
Subchapter B—Qualification Requirements for Manufacturers and Importers of Tobacco Products and Cigarette Papers and Tubes, and Export Warehouse Proprietors
Editorial Notes
Amendments
1997—
1965—
§5711. Bond
(a) When required
Every person, before commencing business as a manufacturer of tobacco products or cigarette papers and tubes, or as an export warehouse proprietor, shall file such bond, conditioned upon compliance with this chapter and regulations issued thereunder, in such form, amount, and manner as the Secretary shall by regulation prescribe. A new or additional bond may be required whenever the Secretary considers such action necessary for the protection of the revenue.
(b) Approval or disapproval
No person shall engage in such business until he receives notice of approval of such bond. A bond may be disapproved, upon notice to the principal on the bond, if the Secretary determines that the bond is not adequate to protect the revenue.
(c) Cancellation
Any bond filed hereunder may be canceled, upon notice to the principal on the bond, whenever the Secretary determines that the bond no longer adequately protects the revenue.
(Aug. 16, 1954, ch. 736,
Editorial Notes
Amendments
1976—
1965—Subsec. (a).
1958—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 1965 Amendment
Amendment by
Effective Date of 1958 Amendment
Amendment by
Transitional Rule
"(1) on April 1, 2009[,] is engaged in business as a manufacturer of processed tobacco or as an importer of processed tobacco, and
"(2) before the end of the 90-day period beginning on such date, submits an application under subchapter B of
§5712. Application for permit
Every person, before commencing business as a manufacturer or importer of tobacco products or processed tobacco or as an export warehouse proprietor, and at such other time as the Secretary shall by regulation prescribe, shall make application for the permit provided for in section 5713. The application shall be in such form as the Secretary shall prescribe and shall set forth, truthfully and accurately, the information called for on the form. Such application may be rejected and the permit denied if the Secretary, after notice and opportunity for hearing, find that—
(1) the premises on which it is proposed to conduct the business are not adequate to protect the revenue;
(2) the activity proposed to be carried out at such premises does not meet such minimum capacity or activity requirements as the Secretary may prescribe,1 or
(3) such person (including, in the case of a corporation, any officer, director, or principal stockholder and, in the case of a partnership, a partner)—
(A) is, by reason of his business experience, financial standing, or trade connections or by reason of previous or current legal proceedings involving a felony violation of any other provision of Federal criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes, not likely to maintain operations in compliance with this chapter,
(B) has been convicted of a felony violation of any provision of Federal or State criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes, or
(C) has failed to disclose any material information required or made any material false statement in the application therefor.
(Aug. 16, 1954, ch. 736,
Editorial Notes
Amendments
2009—
Par. (3).
1997—
1976—
1958—
Statutory Notes and Related Subsidiaries
Effective Date of 2009 Amendment
Amendment by section 702(a)(1)(A) of
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by section 1905(a)(27) of
Effective Date of 1958 Amendment
Amendment by
1 So in original. The comma probably should be a semicolon.
§5713. Permit
(a) Issuance
A person shall not engage in business as a manufacturer or importer of tobacco products or processed tobacco or as an export warehouse proprietor without a permit to engage in such business. Such permit, conditioned upon compliance with this chapter and regulations issued thereunder, shall be issued in such form and in such manner as the Secretary shall by regulation prescribe, to every person properly qualified under sections 5711 and 5712. A new permit may be required at such other time as the Secretary shall by regulation prescribe.
(b) Suspension or revocation
(1) Show cause hearing
If the Secretary has reason to believe that any person holding a permit—
(A) has not in good faith complied with this chapter, or with any other provision of this title involving intent to defraud,
(B) has violated the conditions of such permit,
(C) has failed to disclose any material information required or made any material false statement in the application for such permit,
(D) has failed to maintain his premises in such manner as to protect the revenue,
(E) is, by reason of previous or current legal proceedings involving a felony violation of any other provision of Federal criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes, not likely to maintain operations in compliance with this chapter, or
(F) has been convicted of a felony violation of any provision of Federal or State criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes,
the Secretary shall issue an order, stating the facts charged, citing such person to show cause why his permit should not be suspended or revoked.
(2) Action following hearing
If, after hearing, the Secretary finds that such person has not shown cause why his permit should not be suspended or revoked, such permit shall be suspended for such period as the Secretary deems proper or shall be revoked.
(Aug. 16, 1954, ch. 736,
Editorial Notes
Amendments
2009—Subsec. (a).
Subsec. (b).
1997—Subsec. (a).
1976—
1958—Subsec. (a).
Subsecs. (b), (c).
Statutory Notes and Related Subsidiaries
Effective Date of 2009 Amendment
Amendment by section 702(b)(2) of
Amendment by section 702(a)(1)(B) of
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1958 Amendment
Amendment by
Subchapter C—Operations by Manufacturers and Importers of Tobacco Products and Cigarette Papers and Tubes and Export Warehouse Proprietors
Editorial Notes
Amendments
1976—
1958—
§5721. Inventories
Every manufacturer or importer of tobacco products, processed tobacco, or cigarette papers and tubes, and every export warehouse proprietor, shall make a true and accurate inventory at the time of commencing business, at the time of concluding business, and at such other times, in such manner and form, and to include such items, as the Secretary shall by regulation prescribe. Such inventories shall be subject to verification by any internal revenue officer.
(Aug. 16, 1954, ch. 736,
Editorial Notes
Amendments
2009—
1997—
1976—
1958—
Statutory Notes and Related Subsidiaries
Effective Date of 2009 Amendment
Amendment by
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1958 Amendment
Amendment by
§5722. Reports
Every manufacturer or importer of tobacco products, processed tobacco, or cigarette papers and tubes, and every export warehouse proprietor, shall make reports containing such information, in such form, at such times, and for such periods as the Secretary shall by regulation prescribe.
(Aug. 16, 1954, ch. 736,
Editorial Notes
Amendments
2009—
1997—
1976—
1958—
Statutory Notes and Related Subsidiaries
Effective Date of 2009 Amendment
Amendment by
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1958 Amendment
Amendment by
§5723. Packages, marks, labels, and notices
(a) Packages
All tobacco products, processed tobacco, and cigarette papers and tubes shall, before removal, be put up in such packages as the Secretary shall by regulation prescribe.
(b) Marks, labels, and notices
Every package of tobacco products, processed tobacco, or cigarette papers or tubes shall, before removal, bear the marks, labels, and notices if any, that the Secretary by regulation prescribes.
(c) Lottery features
No certificate, coupon, or other device purporting to be or to represent a ticket, chance, share, or an interest in, or dependent on, the event of a lottery shall be contained in, attached to, or stamped, marked, written, or printed on any package of tobacco products, processed tobacco, or cigarette papers or tubes.
(d) Indecent or immoral material prohibited
No indecent or immoral picture, print, or representation shall be contained in, attached to, or stamped, marked, written, or printed on any package of tobacco products, processed tobacco, or cigarette papers or tubes.
(e) Exceptions
Tobacco products furnished by manufacturers of such products for use or consumption by their employees, or for experimental purposes, and tobacco products, processed tobacco, and cigarette papers and tubes transferred to the bonded premises of another manufacturer or export warehouse proprietor or released in bond from customs custody for deliver to a manufacturer of tobacco products, processed tobacco, or cigarette papers and tubes, may be exempted from subsection (a) and (b) in accordance with such regulations as the Secretary shall prescribe.
(Aug. 16, 1954, ch. 736,
Editorial Notes
Amendments
2009—
1976—
Subsecs. (a), (e).
Subsec. (b).
1958—Subsec. (a).
Subsec. (b).
Subsec. (c).
Subsec. (d).
Subsec. (e).
Statutory Notes and Related Subsidiaries
Effective Date of 2009 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by section 1905(a)(28) of
Effective Date of 1958 Amendment
Amendment by
Subchapter D—Occupational Tax
Editorial Notes
Prior Provisions
A prior subchapter D, relating to records of manufacturers and importers of tobacco products, etc., was redesignated subchapter E by
Another prior subchapter D, which consisted of
Amendments
2005—
§5731. Imposition and rate of tax
(a) General rule
Every person engaged in business as—
(1) a manufacturer of tobacco products,
(2) a manufacturer of cigarette papers and tubes, or
(3) an export warehouse proprietor,
shall pay a tax of $1,000 per year in respect of each premises at which such business is carried on.
(b) Reduced rates for small proprietors
(1) In general
Subsection (a) shall be applied by substituting "$500" for "$1,000" with respect to any taxpayer the gross receipts of which (for the most recent taxable year ending before the 1st day of the taxable period to which the tax imposed by subsection (a) relates) are less than $500,000.
(2) Controlled group rules
All persons treated as 1 taxpayer under section 5061(e)(3) shall be treated as 1 taxpayer for purposes of paragraph (1).
(3) Certain rules to apply
For purposes of paragraph (1), rules similar to the rules of subparagraphs (B) and (C) of section 448(c)(3) shall apply.
(c) Penalty for failure to register
Any person engaged in a business referred to in subsection (a) who willfully fails to pay the tax imposed by subsection (a) shall be fined not more than $5,000, or imprisoned not more than 2 years, or both, for each such offense.
(Added
Editorial Notes
Prior Provisions
A prior section 5731, acts Aug. 16, 1954, ch. 736,
Amendments
2005—Subsecs. (c), (d).
Statutory Notes and Related Subsidiaries
Effective Date of 2005 Amendment
Amendment by
Effective Date
Section effective Jan. 1, 1988, see section 10512(h) of
§5732. Payment of tax
(a) Condition precedent to carrying on business
No person shall be engaged in or carry on any trade or business subject to tax under this subchapter until he has paid the special tax therefor.
(b) Computation
All special taxes under this subchapter shall be imposed as of on the first day of July in each year, or on commencing any trade or business on which such tax is imposed. In the former case the tax shall be reckoned for 1 year, and in the latter case it shall be reckoned proportionately, from the first day of the month in which the liability to a special tax commenced, to and including the 30th day of June following.
(c) How paid
(1) Payment by return
The special taxes imposed by this subchapter shall be paid on the basis of a return under such regulations as the Secretary shall prescribe.
(2) Stamp denoting payment of tax
After receiving a properly executed return and remittance of any special tax imposed by this subchapter, the Secretary shall issue to the taxpayer an appropriate stamp as a receipt denoting payment of the tax. This paragraph shall not apply in the case of a return covering liability for a past period.
(Added
Editorial Notes
Prior Provisions
A prior section 5732, acts Aug. 16, 1954, ch. 736,
Amendments
2007—Subsec. (c)(2).
2005—
Subsecs. (a), (b).
Subsec. (c)(1).
1976—Subsec. (c).
Statutory Notes and Related Subsidiaries
Effective Date of 2005 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by
§5733. Provisions relating to liability for occupational taxes
(a) Partners
Any number of persons doing business in partnership at any one place shall be required to pay but one special tax.
(b) Different businesses of same ownership and location
Whenever more than one of the pursuits or occupations described in this subchapter are carried on in the same place by the same person at the same time, except as otherwise provided in this subchapter, the tax shall be paid for each according to the rates severally prescribed.
(c) Businesses in more than one location
(1) Liability for tax
The payment of a special tax imposed by this subchapter shall not exempt from an additional special tax the person carrying on a trade or business in any other place than that stated in the register kept in the office of the official in charge of the internal revenue district.
(2) Storage
Nothing contained in paragraph (1) shall require a special tax for the storage of tobacco products and cigarette papers and tubes at a location other than the place where tobacco products and cigarette papers and tubes are sold or offered for sale.
(3) Definition of place
The term "place" as used in this section means the entire office, plant or area of the business in any one location under the same proprietorship; and passageways, streets, highways, rail crossings, waterways, or partitions dividing the premises, shall not be deemed sufficient separation to require additional special tax, if the various divisions are otherwise contiguous.
(d) Death or change of location
Certain persons, other than the person who has paid the special tax under this subchapter for the carrying on of any business at any place, may secure the right to carry on, without incurring additional special tax, the same business at the same place for the remainder of the taxable period for which the special tax was paid. The persons who may secure such right are:
(1) the surviving spouse or child, or executor or administrator or other legal representative, of a deceased taxpayer;
(2) a husband or wife succeeding to the business of his or her living spouse;
(3) a receiver or trustee in bankruptcy, or an assignee for benefit of creditors; and
(4) the partner or partners remaining after death or withdrawal of a member of a partnership.
When any person moves to any place other than the place for which special tax was paid for the carrying on of any business, he may secure the right to carry on, without incurring additional special tax, the same business at his new location for the remainder of the taxable period for which the special tax was paid. To secure the right to carry on the business without incurring additional special tax, the successor, or the person relocating his business, must register the succession or relocation with the Secretary in accordance with regulations prescribed by the Secretary.
(e) Federal agencies or instrumentalities
Any tax imposed by this subchapter shall apply to any agency or instrumentality of the United States unless such agency or instrumentality is granted by statute a specific exemption from such tax.
(Added
Editorial Notes
Amendments
2005—
Subsec. (c)(2).
1976—Subsec. (d)(4).
Statutory Notes and Related Subsidiaries
Effective Date of 2005 Amendment
Amendment by
§5734. Application of State laws
The payment of any tax imposed by this subchapter for carrying on any trade or business shall not be held to exempt any person from any penalty or punishment provided by the laws of any State for carrying on such trade or business within such State, or in any manner to authorize the commencement or continuance of such trade or business contrary to the laws of such State or in places prohibited by municipal law; nor shall the payment of any such tax be held to prohibit any State from placing a duty or tax on the same trade or business, for State or other purposes.
(Added
Editorial Notes
Amendments
2005—
Statutory Notes and Related Subsidiaries
Effective Date of 2005 Amendment
Amendment by
Subchapter E—Records of Manufacturers and Importers of Tobacco Products and Cigarette Papers and Tubes, and Export Warehouse Proprietors
Editorial Notes
Amendments
1987—
1976—
1965—
1958—
§5741. Records to be maintained
Every manufacturer of tobacco products, processed tobacco, or cigarette papers and tubes, every importer, and every export warehouse proprietor shall keep such records in such manner as the Secretary shall by regulation prescribe. The records required under this section shall be available for inspection by any internal revenue officer during business hours.
(Aug. 16, 1954, ch. 736,
Editorial Notes
Amendments
2009—
1976—
1965—
1958—
Statutory Notes and Related Subsidiaries
Effective Date of 2009 Amendment
Amendment by
Effective Date of 1965 Amendment
Amendment by
Effective Date of 1958 Amendment
Amendment by
Subchapter F—General Provisions
Editorial Notes
Amendments
1997—
1987—
1976—
1965—
1958—
§5751. Purchase, receipt, possession, or sale of tobacco products and cigarette papers and tubes, after removal
(a) Restriction
No person shall—
(1) with intent to defraud the United States, purchase, receive, possess, offer for sale, or sell or otherwise dispose of, after removal, any tobacco products or cigarette papers or tubes—
(A) upon which the tax has not been paid or determined in the manner and at the time prescribed by this chapter or regulations thereunder; or
(B) which, after removal without payment of tax pursuant to section 5704, have been diverted from the applicable purpose or use specified in that section; or
(2) with intent to defraud the United States, purchase, receive, possess, offer for sale, or sell or otherwise dispose of, after removal, any tobacco products or cigarette papers or tubes, which are not put up in packages as required under section 5723 or which are put up in packages not bearing the marks, labels, and notices, as required under such section; or
(3) otherwise than with intent to defraud the United States, purchase, receive, possess, offer for sale, or sell or otherwise dispose of, after removal, any tobacco products or cigarette papers or tubes, which are not put up in packages as required under section 5723 or which are put up in packages not bearing the marks, labels, and notices, as required under such section. This paragraph shall not prevent the sale or delivery of tobacco products or cigarette papers or tubes directly to consumers from proper packages, nor apply to such articles when so sold or delivered.
(b) Liability to tax
Any person who possesses tobacco products or cigarette papers or tubes in violation of subsection (a)(1) or (a)(2) shall be liable for a tax equal to the tax on such articles.
(Aug. 16, 1954, ch. 736,
Editorial Notes
Amendments
1976—Subsec. (a)(2), (3).
1958—
Subsec. (a) amended generally by
Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 1976 Amendment
Amendment by
Effective Date of 1958 Amendment
Amendment by
§5752. Restrictions relating to marks, labels, notices, and packages
No person shall, with intent to defraud the United States, destroy, obliterate, or detach any mark, label, or notice prescribed or authorized, by this chapter or regulations thereunder, to appear on, or be affixed to, any package of tobacco products or cigarette papers or tubes, before such package is emptied.
(Aug. 16, 1954, ch. 736,
Editorial Notes
Amendments
1976—
1958—
Statutory Notes and Related Subsidiaries
Effective Date of 1976 Amendment
Amendment by
Effective Date of 1958 Amendment
Amendment by
§5753. Disposal of forfeited, condemned, and abandoned tobacco products, and cigarette papers and tubes
If it appears that any forfeited, condemned, or abandoned tobacco products, or cigarette papers and tubes, when offered for sale, will not bring a price equal to the tax due and payable thereon, and the expenses incident to the sale thereof, such articles shall not be sold for consumption in the United States but shall be disposed of in accordance with such regulations as the Secretary shall prescribe.
(Aug. 16, 1954, ch. 736,
Editorial Notes
Amendments
1976—
1965—
1958—
Statutory Notes and Related Subsidiaries
Effective Date of 1965 Amendment
Amendment by
Effective Date of 1958 Amendment
Amendment by
§5754. Restriction on importation of previously exported tobacco products
(a) Export-labeled tobacco products
(1) In general
Tobacco products and cigarette papers and tubes manufactured in the United States and labeled for exportation under this chapter—
(A) may be transferred to or removed from the premises of a manufacturer or an export warehouse proprietor only if such articles are being transferred or removed without tax in accordance with section 5704;
(B) may be imported or brought into the United States, after their exportation, only if such articles either are eligible to be released from customs custody with the partial duty exemption provided in section 5704(d) or are returned to the original manufacturer of such article as provided in section 5704(c); and
(C) may not be sold or held for sale for domestic consumption in the United States unless such articles are removed from their export packaging and repackaged by the original manufacturer into new packaging that does not contain an export label.
(2) Alterations by persons other than original manufacturer
This section shall apply to articles labeled for export even if the packaging or the appearance of such packaging to the consumer of such articles has been modified or altered by a person other than the original manufacturer so as to remove or conceal or attempt to remove or conceal (including by the placement of a sticker over) any export label.
(3) Exports include shipments to Puerto Rico
For purposes of this section, section 5704(d), section 5761, and such other provisions as the Secretary may specify by regulations, references to exportation shall be treated as including a reference to shipment to the Commonwealth of Puerto Rico.
(b) Export label
For purposes of this section, an article is labeled for export or contains an export label if it bears the mark, label, or notice required under section 5704(b).
(c) Cross references
(1) For exception to this section for personal use, see section 5761(d).
(2) For civil penalties related to violations of this section, see section 5761(c).
(3) For a criminal penalty applicable to any violation of this section, see section 5762(b).
(4) For forfeiture provisions related to violations of this section, see section 5761(c).
(Added
Editorial Notes
Amendments
2006—Subsec. (c)(1).
2000—
"(a)
"(b)
"For penalty for the sale of tobacco products and cigarette papers and tubes in the United States which are labeled for export, see section 5761(c)."
Statutory Notes and Related Subsidiaries
Effective Date of 2006 Amendment
Amendment by
Effective Date of 2000 Amendment
Amendment by
Effective Date
Section applicable to articles removed, as defined in
Subchapter G—Penalties and Forfeitures
Editorial Notes
Amendments
1987—
1965—
1958—
§5761. Civil penalties
(a) Omitting things required or doing things forbidden
Whoever willfully omits, neglects, or refuses to comply with any duty imposed upon him by this chapter, or to do, or cause to be done, any of the things required by this chapter, or does anything prohibited by this chapter, shall in addition to any other penalty provided in this title, be liable to a penalty of $1,000, to be recovered, with costs of suit, in a civil action, except where a penalty under subsection (b) or (c) or under section 6651 or 6653 or part II of subchapter A of
(b) Failure to pay tax
Whoever fails to pay any tax imposed by this chapter at the time prescribed by law or regulations, shall, in addition to any other penalty provided in this title, be liable to a penalty of 5 percent of the tax due but unpaid.
(c) Sale of tobacco products and cigarette papers and tubes for export
Except as provided in subsections (b) and (d) of section 5704—
(1) every person who sells, relands, or receives within the jurisdiction of the United States any tobacco products or cigarette papers or tubes which have been labeled or shipped for exportation under this chapter,
(2) every person who sells or receives such relanded tobacco products or cigarette papers or tubes, and
(3) every person who aids or abets in such selling, relanding, or receiving,
shall, in addition to the tax and any other penalty provided in this title, be liable for a penalty equal to the greater of $1,000 or 5 times the amount of the tax imposed by this chapter. All tobacco products and cigarette papers and tubes relanded within the jurisdiction of the United States shall be forfeited to the United States and destroyed. All vessels, vehicles, and aircraft used in such relanding or in removing such products, papers, and tubes from the place where relanded, shall be forfeited to the United States. This subsection and section 5754 shall not apply to any person who relands or receives tobacco products in the quantity allowed entry free of tax and duty under subchapter IV of
(d) Personal use quantities
(1) In general
No quantity of tobacco products other than the quantity referred to in paragraph (2) may be relanded or received as a personal use quantity.
(2) Exception for personal use quantity
Subsection (c) and section 5754 shall not apply to any person who relands or receives tobacco products in the quantity allowed entry free of tax and duty under
(3) Special rule for delivery sales
(A) In general
Paragraph (2) shall not apply to any tobacco product sold in connection with a delivery sale.
(B) Delivery sale
For purposes of subparagraph (A), the term "delivery sale" means any sale of a tobacco product to a consumer if—
(i) the consumer submits the order for such sale by means of a telephone or other method of voice transmission, the mail, or the Internet or other online service, or the seller is otherwise not in the physical presence of the buyer when the request for purchase or order is made, or
(ii) the tobacco product is delivered by use of a common carrier, private delivery service, or the mail, or the seller is not in the physical presence of the buyer when the buyer obtains personal possession of the tobacco product.
(e) Applicability of section 6665
The penalties imposed by subsections (b) and (c) shall be assessed, collected, and paid in the same manner as taxes, as provided in section 6665(a).
(f) Cross references
For penalty for failure to make deposits or for overstatement of deposits, see section 6656.
(Aug. 16, 1954, ch. 736,
Editorial Notes
References in Text
The Harmonized Tariff Schedule of the United States, referred to in subsecs. (c) and (d)(2), is not set out in the Code. See Publication of Harmonized Tariff Schedule note set out under
Amendments
2006—Subsec. (c).
Subsecs. (d) to (f).
2000—Subsec. (c).
1997—Subsec. (a).
Subsec. (c).
Subsec. (d).
Subsec. (e).
1989—Subsec. (a).
Subsec. (c).
1984—Subsec. (c).
1983—Subsec. (c).
1981—Subsec. (c).
Subsec. (d).
1958—Subsec. (a).
Subsec. (b).
Subsec. (c).
Subsec. (d).
Statutory Notes and Related Subsidiaries
Effective Date of 2006 Amendment
Amendment by
Effective Date of 2000 Amendments
Amendment by
Amendment by section 4002 of
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1989 Amendment
Amendment by
Effective Date of 1984 Amendment
Amendment by
Effective Date of 1983 Amendment
Amendment by
Effective Date of 1981 Amendment
Amendment by section 722(a)(3) of
Amendment by section 724(b)(5) of
Effective Date of 1958 Amendment
Amendment by
§5762. Criminal penalties
(a) Fraudulent offenses
Whoever, with intent to defraud the United States—
(1) Engaging in business unlawfully
Engages in business as a manufacturer or importer of tobacco products or cigarette papers and tubes, or as an export warehouse proprietor, without filing the bond and obtaining the permit where required by this chapter or regulations thereunder; or
(2) Failing to furnish information or furnishing false information
Fails to keep or make any record, return, report, or inventory, or keeps or makes any false or fraudulent record, return, report, or inventory, required by this chapter or regulations thereunder; or
(3) Refusing to pay or evading tax
Refuses to pay any tax imposed by this chapter, or attempts in any manner to evade or defeat the tax or the payment thereof; or
(4) Removing tobacco products or cigarette papers or tubes unlawfully
Removes, contrary to this chapter or regulations thereunder, any tobacco products or cigarette papers or tubes subject to tax under this chapter; or
(5) Purchasing, receiving, possessing, or selling tobacco products or cigarette papers or tubes unlawfully
Violates any provision of section 5751(a)(1) or (a)(2); or
(6) Destroying, obliterating, or detaching marks, labels, or notices before packages are emptied
Violates any provision of section 5752;
shall, for each such offense, be fined not more than $10,000, or imprisoned not more than 5 years, or both.
(b) Other offenses
Whoever, otherwise than as provided in subsection (a), violates any provision of this chapter, or of regulations prescribed thereunder, shall, for each such offense, be fined not more than $1,000, or imprisoned not more than 1 year, or both.
(Aug. 16, 1954, ch. 736,
Editorial Notes
Amendments
1997—Subsec. (a)(1).
1976—Subsec. (a)(6).
Subsec. (a)(7).
Subsec. (a)(8) to (11).
1965—Subsec. (a)(1).
Subsec. (a)(2).
1958—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by
Effective Date of 1965 Amendment
Amendment by
Effective Date of 1958 Amendment
Amendment by
§5763. Forfeitures
(a) Tobacco products and cigarette papers and tubes unlawfully possessed
(1) Tobacco products and cigarette papers and tubes possessed with intent to defraud
All tobacco products and cigarette papers and tubes which, after removal, are possessed with intent to defraud the United States shall be forfeited to the United States.
(2) Tobacco products and cigarette papers and tubes not property packaged
All tobacco products and cigarette papers and tubes not in packages as required under section 5723 or which are in packages not bearing the marks, labels, and notices, as required under such section, which, after removal, are possessed otherwise than with intent to defraud the United States, shall be forfeited to the United States. This paragraph shall not apply to tobacco products or cigarette papers or tubes sold or delivered directly to consumers from proper packages.
(b) Personal property of qualified manufacturers, qualified importers, and export warehouse proprietors, acting with intent to defraud
All tobacco products and cigarette papers and tubes, packages, machinery, fixtures, equipment, and all other materials and personal property on the premises of any qualified manufacturer or importer of tobacco products or cigarette papers and tubes, or export warehouse proprietor, who, with intent to defraud the United States, fails to keep or make any record, return, report, or inventory, or keeps or makes any false or fraudulent record, return, report, or inventory, required by this chapter; or refuses to pay any tax imposed by this chapter, or attempts in any manner to evade or defeat the tax or the payment thereof; or removes, contrary to any provision of this chapter, any article subject to tax under this chapter, shall be forfeited to the United States.
(c) Real and personal property of illicit operators
All tobacco products, cigarette papers and tubes, machinery, fixtures, equipment, and other materials and personal property on the premises of any person engaged in business as a manufacturer or importer of tobacco products or cigarette papers and tubes, or export warehouse proprietor, without filing the bond or obtaining the permit, as required by this chapter, together with all his right, title, and interest in the building in which such business is conducted, and the lot or tract of ground on which the building is located, shall be forfeited to the United States.
(d) General
All property intended for use in violating the provisions of this chapter, or regulations thereunder, or which has been so used, shall be forfeited to the United States as provided in section 7302.
(Aug. 16, 1954, ch. 736,
Editorial Notes
Amendments
1997—Subsec. (b).
Subsec. (c).
1976—Subsec. (a)(2).
Subsec. (b).
1965—Subsec. (b).
Subsec. (c).
1958—Subsec. (a).
Subsecs. (b), (c).
Subsec. (d).
Statutory Notes and Related Subsidiaries
Effective Date of 1997 Amendment
Amendment by
Effective Date of 1976 Amendment
Amendment by
Effective Date of 1965 Amendment
Amendment by
Effective Date of 1958 Amendment
Amendment by
CHAPTER 53 —MACHINE GUNS, DESTRUCTIVE DEVICES, AND CERTAIN OTHER FIREARMS
Editorial Notes
Prior Provisions
A prior
"Machine Guns, Destructive Devices, and Certain Other Firearms" for "Machine Guns and Certain Other Firearms" in the chapter heading;
"General provisions and exemptions" for "General provisions" in subchapter B;
"Prohibited acts" for "Unlawful acts" in subchapter C.
1 Section numbers editorially supplied.
Subchapter A—Taxes
Editorial Notes
Prior Provisions
A prior subchapter A consisted of parts I to IV, prior to the general revision of this chapter by
PART I—SPECIAL (OCCUPATIONAL) TAXES
Editorial Notes
Prior Provisions
A prior part I, act Aug. 16, 1964, ch. 736,
Amendments
1987—
§5801. Imposition of tax
(a) General rule
On 1st engaging in business and thereafter on or before July 1 of each year, every importer, manufacturer, and dealer in firearms shall pay a special (occupational) tax for each place of business at the following rates:
(1) Importers and manufacturers: $1,000 a year or fraction thereof.
(2) Dealers: $500 a year or fraction thereof.
(b) Reduced rates of tax for small importers and manufacturers
(1) In general
Paragraph (1) of subsection (a) shall be applied by substituting "$500" for "$1,000" with respect to any taxpayer the gross receipts of which (for the most recent taxable year ending before the 1st day of the taxable period to which the tax imposed by subsection (a) relates) are less than $500,000.
(2) Controlled group rules
All persons treated as 1 taxpayer under section 5061(e)(3) shall be treated as 1 taxpayer for purposes of paragraph (1).
(3) Certain rules to apply
For purposes of paragraph (1), rules similar to the rules of subparagraphs (B) and (C) of section 448(c)(3) shall apply.
(Added
Editorial Notes
Prior Provisions
A prior section 5801, acts Aug. 16, 1954, ch. 736,
Amendments
1987—
"(1) Importers.—$500 a year or fraction thereof;
"(2) Manufacturers.—$500 a year or fraction thereof;
"(3) Dealers.—$200 a year or fraction thereof.
Except an importer, manufacturer, or dealer who imports, manufactures, or deals in only weapons classified as 'any other weapon' under section 5845(e), shall pay a special (occupational) tax for each place of business at the following rates: Importers, $25 a year or fraction thereof; manufacturers, $25 a year or fraction thereof; dealers, $10 a year or fraction thereof."
Statutory Notes and Related Subsidiaries
Effective Date of 1987 Amendment
Amendment by
Effective Date
"(a)
"(b) Notwithstanding the provisions of subsection (a) or any other provision of law, any person possessing a firearm as defined in section 5845(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] (as amended by this title) which is not registered to him in the National Firearms Registration and Transfer Record shall register each firearm so possessed with the Secretary of the Treasury or his delegate in such form and manner as the Secretary or his delegate may require within the thirty days immediately following the effective date of section 201 of this Act [see subsec. (a) of this section]. Such registrations shall become a part of the National Firearms Registration and Transfer Record required to be maintained by section 5841 of the Internal Revenue Code of 1986 (as amended by this title). No information or evidence required to be submitted or retained by a natural person to register a firearm under this section shall be used, directly or indirectly, as evidence against such person in any criminal proceeding with respect to a prior or concurrent violation of law.
"(c) The amendments made by
"(d) The Secretary of the Treasury, after publication in the Federal Register of his intention to do so, is authorized to establish such period of amnesty, not to exceed ninety days in the case of any single period, and immunity from liability during any such period, as the Secretary determines will contribute to the purposes of this title [adding this chapter, and
§5802. Registration of importers, manufacturers, and dealers
On first engaging in business and thereafter on or before the first day of July of each year, each importer, manufacturer, and dealer in firearms shall register with the Secretary in each internal revenue district in which such business is to be carried on, his name, including any trade name, and the address of each location in the district where he will conduct such business. An individual required to register under this section shall include a photograph and fingerprints of the individual with the initial application. Where there is a change during the taxable year in the location of, or the trade name used in, such business, the importer, manufacturer, or dealer shall file an application with the Secretary to amend his registration. Firearms operations of an importer, manufacturer, or dealer may not be commenced at the new location or under a new trade name prior to approval by the Secretary of the application.
(Added
Editorial Notes
Prior Provisions
A prior section 5802, act Aug. 16, 1954, ch. 736,
A prior section 5803, act Aug. 16, 1954, ch. 736,
Amendments
1994—
1976—
PART II—TAX ON TRANSFERRING FIREARMS
Editorial Notes
Prior Provisions
A prior part II consisted of sections 5811 to 5814, prior to the general revision of this chapter by
§5811. Transfer tax
(a) Rate
There shall be levied, collected, and paid on firearms transferred a tax at the rate of $200 for each firearm transferred, except, the transfer tax on any firearm classified as any other weapon under section 5845(e) shall be at the rate of $5 for each such firearm transferred.
(b) By whom paid
The tax imposed by subsection (a) of this section shall be paid by the transferor.
(c) Payment
The tax imposed by subsection (a) of this section shall be payable by the appropriate stamps prescribed for payment by the Secretary.
(Added
Editorial Notes
Prior Provisions
A prior section 5811, acts Aug. 16, 1954, ch. 736,
Amendments
1976—Subsec. (c).
Statutory Notes and Related Subsidiaries
Effective Date
Section effective on first day of first month following October 1968, see section 207 of
§5812. Transfers
(a) Application
A firearm shall not be transferred unless (1) the transferor of the firearm has filed with the Secretary a written application, in duplicate, for the transfer and registration of the firearm to the transferee on the application form prescribed by the Secretary; (2) any tax payable on the transfer is paid as evidenced by the proper stamp affixed to the original application form; (3) the transferee is identified in the application form in such manner as the Secretary may by regulations prescribe, except that, if such person is an individual, the identification must include his fingerprints and his photograph; (4) the transferor of the firearm is identified in the application form in such manner as the Secretary may by regulations prescribe; (5) the firearm is identified in the application form in such manner as the Secretary may by regulations prescribe; and (6) the application form shows that the Secretary has approved the transfer and the registration of the firearm to the transferee. Applications shall be denied if the transfer, receipt, or possession of the firearm would place the transferee in violation of law.
(b) Transfer of possession
The transferee of a firearm shall not take possession of the firearm unless the Secretary has approved the transfer and registration of the firearm to the transferee as required by subsection (a) of this section.
(Added
Editorial Notes
Prior Provisions
A prior section 5812, act Aug. 16, 1954, ch. 736,
A prior section 5813, act Aug. 16, 1954, ch. 736,
A prior section 5814, acts Aug. 16, 1954, ch. 736,
Amendments
1976—Subsecs. (a), (b).
PART III—TAX ON MAKING FIREARMS
Editorial Notes
Prior Provisions
A prior part III consisted of section 5821, prior to the general revision of this chapter by
A prior part IV consisted of section 5831, prior to the general revision of this chapter by
§5821. Making tax
(a) Rate
There shall be levied, collected, and paid upon the making of a firearm a tax at the rate of $200 for each firearm made.
(b) By whom paid
The tax imposed by subsection (a) of this section shall be paid by the person making the firearm.
(c) Payment
The tax imposed by subsection (a) of this section shall be payable by the stamp prescribed for payment by the Secretary.
(Added
Editorial Notes
Prior Provisions
A prior section 5821, acts Aug. 16, 1954, ch. 736,
Amendments
1976—Subsec. (c).
Statutory Notes and Related Subsidiaries
Effective Date
Section effective on first day of first month following October 1968, see section 207 of
§5822. Making
No person shall make a firearm unless he has (a) filed with the Secretary a written application, in duplicate, to make and register the firearm on the form prescribed by the Secretary; (b) paid any tax payable on the making and such payment is evidenced by the proper stamp affixed to the original application form; (c) identified the firearm to be made in the application form in such manner as the Secretary may by regulations prescribe; (d) identified himself in the application form in such manner as the Secretary may by regulations prescribe, except that, if such person is an individual, the identification must include his fingerprints and his photograph; and (e) obtained the approval of the Secretary to make and register the firearm and the application form shows such approval. Applications shall be denied if the making or possession of the firearm would place the person making the firearm in violation of law.
(Added
Editorial Notes
Prior Provisions
A prior section 5831, act Aug. 16, 1954, ch. 736,
Amendments
1976—
Subchapter B—General Provisions and Exemptions
Editorial Notes
Prior Provisions
A prior subchapter B consisted of sections 5841 to 5848, prior to the general revision of this chapter by
PART I—GENERAL PROVISIONS
Editorial Notes
Amendments
2018—
§5841. Registration of firearms
(a) Central registry
The Secretary shall maintain a central registry of all firearms in the United States which are not in the possession or under the control of the United States. This registry shall be known as the National Firearms Registration and Transfer Record. The registry shall include—
(1) identification of the firearm;
(2) date of registration; and
(3) identification and address of person entitled to possession of the firearm.
(b) By whom registered
Each manufacturer, importer, and maker shall register each firearm he manufactures, imports, or makes. Each firearm transferred shall be registered to the transferee by the transferor.
(c) How registered
Each manufacturer shall notify the Secretary of the manufacture of a firearm in such manner as may by regulations be prescribed and such notification shall effect the registration of the firearm required by this section. Each importer, maker, and transferor of a firearm shall, prior to importing, making, or transferring a firearm, obtain authorization in such manner as required by this chapter or regulations issued thereunder to import, make, or transfer the firearm, and such authorization shall effect the registration of the firearm required by this section.
(d) Firearms registered on effective date of this Act
A person shown as possessing a firearm by the records maintained by the Secretary pursuant to the National Firearms Act in force on the day immediately prior to the effective date of the National Firearms Act of 1968 1 shall be considered to have registered under this section the firearms in his possession which are disclosed by that record as being in his possession.
(e) Proof of registration
A person possessing a firearm registered as required by this section shall retain proof of registration which shall be made available to the Secretary upon request.
(Added
Editorial Notes
References in Text
The National Firearms Act in force prior to the effective date of the National Firearms Act of 1968, referred to in subsec. (d), probably means the National Firearms Act in force prior to the effective date of the National Firearms Act Amendments of 1968, which is act Aug. 16, 1954, ch. 736,
The effective date of this Act and the effective date of the National Firearms Act of 1968, referred to in subsec. (d) catchline and text, probably means the effective date of the National Firearms Act Amendments of 1968, which is Nov. 1, 1968. See section 207(a) of
Prior Provisions
A prior section 5841, act Aug. 16, 1954, ch. 736,
Amendments
1976—Subsecs. (a), (c) to (e).
Statutory Notes and Related Subsidiaries
Effective Date
Section effective on first day of first month following October 1968, see section 207 of
1 So in original. See References in Text notes below.
§5842. Identification of firearms
(a) Identification of firearms other than destructive devices
Each manufacturer and importer and anyone making a firearm shall identify each firearm, other than a destructive device, manufactured, imported, or made by a serial number which may not be readily removed, obliterated, or altered, the name of the manufacturer, importer, or maker, and such other identification as the Secretary may by regulations prescribe.
(b) Firearms without serial number
Any person who possesses a firearm, other than a destructive device, which does not bear the serial number and other information required by subsection (a) of this section shall identify the firearm with a serial number assigned by the Secretary and any other information the Secretary may by regulations prescribe.
(c) Identification of destructive device
Any firearm classified as a destructive device shall be identified in such manner as the Secretary may by regulations prescribe.
(Added
Editorial Notes
Prior Provisions
A prior section 5842, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5843, act Aug. 16, 1954, ch. 736,
Amendments
1976—
§5843. Records and returns
Importers, manufacturers, and dealers shall keep such records of, and render such returns in relation to, the importation, manufacture, making, receipt, and sale, or other disposition, of firearms as the Secretary may by regulations prescribe.
(Added
Editorial Notes
Prior Provisions
A prior section 5843, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5842, act Aug. 16, 1954,
Amendments
1976—
§5844. Importation
No firearm shall be imported or brought into the United States or any territory under its control or jurisdiction unless the importer establishes, under regulations as may be prescribed by the Secretary, that the firearm to be imported or brought in is—
(1) being imported or brought in for the use of the United States or any department, independent establishment, or agency thereof or any State or possession or any political subdivision thereof; or
(2) being imported or brought in for scientific or research purposes; or
(3) being imported or brought in solely for testing or use as a model by a registered manufacturer or solely for use as a sample by a registered importer or registered dealer;
except that, the Secretary may permit the conditional importation or bringing in of a firearm for examination and testing in connection with classifying the firearm.
(Added
Editorial Notes
Prior Provisions
A prior section 5844, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5845, act Aug. 16, 1954, ch. 736,
Amendments
1976—
§5845. Definitions
For the purpose of this chapter—
(a) Firearm
The term "firearm" means (1) a shotgun having a barrel or barrels of less than 18 inches in length; (2) a weapon made from a shotgun if such weapon as modified has an overall length of less than 26 inches or a barrel or barrels of less than 18 inches in length; (3) a rifle having a barrel or barrels of less than 16 inches in length; (4) a weapon made from a rifle if such weapon as modified has an overall length of less than 26 inches or a barrel or barrels of less than 16 inches in length; (5) any other weapon, as defined in subsection (e); (6) a machinegun; (7) any silencer (as defined in
(b) Machinegun
The term "machinegun" means any weapon which shoots, is designed to shoot, or can be readily restored to shoot, automatically more than one shot, without manual reloading, by a single function of the trigger. The term shall also include the frame or receiver of any such weapon, any part designed and intended solely and exclusively, or combination of parts designed and intended, for use in converting a weapon into a machinegun, and any combination of parts from which a machinegun can be assembled if such parts are in the possession or under the control of a person.
(c) Rifle
The term "rifle" means a weapon designed or redesigned, made or remade, and intended to be fired from the shoulder and designed or redesigned and made or remade to use the energy of the explosive in a fixed cartridge to fire only a single projectile through a rifled bore for each single pull of the trigger, and shall include any such weapon which may be readily restored to fire a fixed cartridge.
(d) Shotgun
The term "shotgun" means a weapon designed or redesigned, made or remade, and intended to be fired from the shoulder and designed or redesigned and made or remade to use the energy of the explosive in a fixed shotgun shell to fire through a smooth bore either a number of projectiles (ball shot) or a single projectile for each pull of the trigger, and shall include any such weapon which may be readily restored to fire a fixed shotgun shell.
(e) Any other weapon
The term "any other weapon" means any weapon or device capable of being concealed on the person from which a shot can be discharged through the energy of an explosive, a pistol or revolver having a barrel with a smooth bore designed or redesigned to fire a fixed shotgun shell, weapons with combination shotgun and rifle barrels 12 inches or more, less than 18 inches in length, from which only a single discharge can be made from either barrel without manual reloading, and shall include any such weapon which may be readily restored to fire. Such term shall not include a pistol or a revolver having a rifled bore, or rifled bores, or weapons designed, made, or intended to be fired from the shoulder and not capable of firing fixed ammunition.
(f) Destructive device
The term "destructive device" means (1) any explosive, incendiary, or poison gas (A) bomb, (B) grenade, (C) rocket having a propellent charge of more than four ounces, (D) missile having an explosive or incendiary charge of more than one-quarter ounce, (E) mine, or (F) similar device; (2) any type of weapon by whatever name known which will, or which may be readily converted to, expel a projectile by the action of an explosive or other propellant, the barrel or barrels of which have a bore of more than one-half inch in diameter, except a shotgun or shotgun shell which the Secretary finds is generally recognized as particularly suitable for sporting purposes; and (3) any combination of parts either designed or intended for use in converting any device into a destructive device as defined in subparagraphs (1) and (2) and from which a destructive device may be readily assembled. The term "destructive device" shall not include any device which is neither designed nor redesigned for use as a weapon; any device, although originally designed for use as a weapon, which is redesigned for use as a signaling, pyrotechnic, line throwing, safety, or similar device; surplus ordnance sold, loaned, or given by the Secretary of the Army pursuant to the provisions of
(g) Antique firearm
The term "antique firearm" means any firearm not designed or redesigned for using rim fire or conventional center fire ignition with fixed ammunition and manufactured in or before 1898 (including any matchlock, flintlock, percussion cap, or similar type of ignition system or replica thereof, whether actually manufactured before or after the year 1898) and also any firearm using fixed ammunition manufactured in or before 1898, for which ammunition is no longer manufactured in the United States and is not readily available in the ordinary channels of commercial trade.
(h) Unserviceable firearm
The term "unserviceable firearm" means a firearm which is incapable of discharging a shot by means of an explosive and incapable of being readily restored to a firing condition.
(i) Make
The term "make", and the various derivatives of such word, shall include manufacturing (other than by one qualified to engage in such business under this chapter), putting together, altering, any combination of these, or otherwise producing a firearm.
(j) Transfer
The term "transfer" and the various derivatives of such word, shall include selling, assigning, pledging, leasing, loaning, giving away, or otherwise disposing of.
(k) Dealer
The term "dealer" means any person, not a manufacturer or importer, engaged in the business of selling, renting, leasing, or loaning firearms and shall include pawnbrokers who accept firearms as collateral for loans.
(l) Importer
The term "importer" means any person who is engaged in the business of importing or bringing firearms into the United States.
(m) Manufacturer
The term "manufacturer" means any person who is engaged in the business of manufacturing firearms.
(Added
Editorial Notes
Prior Provisions
A prior section 5845, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5848, act Aug. 16, 1954, ch. 736,
Amendments
2018—Subsec. (f).
1986—Subsec. (a)(7).
Subsec. (b).
1976—Subsec. (a).
Subsec. (f).
Statutory Notes and Related Subsidiaries
Effective Date of 2018 Amendment
Amendment by
Effective Date of 1986 Amendment
Amendment by
Effective Date
Section effective on first day of first month following October 1968, except as to persons possessing firearms as defined in subsec. (a) of this section which are not registered to such persons in the National Firearms Registration and Transfer Record, see section 207 of
§5846. Other laws applicable
All provisions of law relating to special taxes imposed by
(Added
Editorial Notes
Prior Provisions
A prior section 5846, act Aug. 16, 1954, ch. 736,
§5847. Effect on other laws
Nothing in this chapter shall be construed as modifying or affecting the requirements of section 38 of the Arms Export Control Act (
(Added
Editorial Notes
Prior Provisions
A prior section 5847, act Aug. 16, 1954, ch. 736,
Amendments
2018—
§5848. Restrictive use of information
(a) General rule
No information or evidence obtained from an application, registration, or records required to be submitted or retained by a natural person in order to comply with any provision of this chapter or regulations issued thereunder, shall, except as provided in subsection (b) of this section, be used, directly or indirectly, as evidence against that person in a criminal proceeding with respect to a violation of law occurring prior to or concurrently with the filing of the application or registration, or the compiling of the records containing the information or evidence.
(b) Furnishing false information
Subsection (a) of this section shall not preclude the use of any such information or evidence in a prosecution or other action under any applicable provision of law with respect to the furnishing of false information.
(Added
Editorial Notes
Prior Provisions
A prior section 5848, act Aug. 16, 1954, ch. 736,
§5849. Citation of chapter
This chapter may be cited as the "National Firearms Act" and any reference in any other provision of law to the "National Firearms Act" shall be held to refer to the provisions of this chapter.
(Added
Editorial Notes
Prior Provisions
A prior section 5849,
Statutory Notes and Related Subsidiaries
Short Title
PART II—EXEMPTIONS
Editorial Notes
Amendments
2018—
§5851. Special (occupational) tax exemption
(a) Business with United States
Any person required to pay special (occupational) tax under section 5801 shall be relieved from payment of that tax if he establishes to the satisfaction of the Secretary that his business is conducted exclusively with, or on behalf of, the United States or any department, independent establishment, or agency thereof. The Secretary may relieve any person manufacturing firearms for, or on behalf of, the United States from compliance with any provision of this chapter in the conduct of such business.
(b) Application
The exemption provided for in subsection (a) of this section may be obtained by filing with the Secretary an application on such form and containing such information as may by regulations be prescribed. The exemptions must thereafter be renewed on or before July 1 of each year. Approval of the application by the Secretary shall entitle the applicant to the exemptions stated on the approved application.
(Added
Editorial Notes
Prior Provisions
A prior section 5851, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5812, act Aug. 16, 1954, ch. 736,
Amendments
1976—Subsecs. (a), (b).
Statutory Notes and Related Subsidiaries
Effective Date
Section effective on first day of first month following October 1968, see section 207 of
§5852. General transfer and making tax exemption
(a) Transfer
Any firearm may be transferred to the United States or any department, independent establishment, or agency thereof, without payment of the transfer tax imposed by section 5811.
(b) Making by a person other than a qualified manufacturer
Any firearm may be made by, or on behalf of, the United States, or any department, independent establishment, or agency thereof, without payment of the making tax imposed by section 5821.
(c) Making by a qualified manufacturer
A manufacturer qualified under this chapter to engage in such business may make the type of firearm which he is qualified to manufacture without payment of the making tax imposed by section 5821.
(d) Transfers between special (occupational) taxpayers
A firearm registered to a person qualified under this chapter to engage in business as an importer, manufacturer, or dealer may be transferred by that person without payment of the transfer tax imposed by section 5811 to any other person qualified under this chapter to manufacture, import, or deal in that type of firearm.
(e) Unserviceable firearm
An unserviceable firearm may be transferred as a curio or ornament without payment of the transfer tax imposed by section 5811, under such requirements as the Secretary may by regulations prescribe.
(f) Right to exemption
No firearm may be transferred or made exempt from tax under the provisions of this section unless the transfer or making is performed pursuant to an application in such form and manner as the Secretary may by regulations prescribe.
(Added
Editorial Notes
Prior Provisions
A prior section 5852, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5814, act Aug. 16, 1954, ch. 736,
Amendments
1976—Subsecs. (e), (f).
§5853. Transfer and making tax exemption available to certain governmental entities
(a) Transfer
A firearm may be transferred without the payment of the transfer tax imposed by section 5811 to any State, possession of the United States, any political subdivision thereof, or any official police organization of such a government entity engaged in criminal investigations.
(b) Making
A firearm may be made without payment of the making tax imposed by section 5821 by, or on behalf of, any State, or possession of the United States, any political subdivision thereof, or any official police organization of such a government entity engaged in criminal investigations.
(c) Right to exemption
No firearm may be transferred or made exempt from tax under this section unless the transfer or making is performed pursuant to an application in such form and manner as the Secretary may by regulations prescribe.
(Added
Editorial Notes
Prior Provisions
A prior section 5853, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5821, act Aug. 16, 1954, ch. 736,
Amendments
1976—Subsec. (c).
§5854. Exportation of firearms exempt from transfer tax
A firearm may be exported without payment of the transfer tax imposed under section 5811 provided that proof of the exportation is furnished in such form and manner as the Secretary may by regulations prescribe.
(Added
Editorial Notes
Prior Provisions
A prior section 5854,
Provisions similar to those comprising this section were contained in prior section 5844, act Aug. 16, 1954, ch. 736,
A prior section 5855,
Amendments
1976—
Subchapter C—Prohibited Acts
Editorial Notes
Prior Provisions
A prior subchapter C consisted of sections 5851 to 5854, prior to the general revision of this chapter by
1 Editorially supplied. Subchapter added by
§5861. Prohibited acts
It shall be unlawful for any person—
(a) to engage in business as a manufacturer or importer of, or dealer in, firearms without having paid the special (occupational) tax required by section 5801 for his business or having registered as required by section 5802; or
(b) to receive or possess a firearm transferred to him in violation of the provisions of this chapter; or
(c) to receive or possess a firearm made in violation of the provisions of this chapter; or
(d) to receive or possess a firearm which is not registered to him in the National Firearms Registration and Transfer Record; or
(e) to transfer a firearm in violation of the provisions of this chapter; or
(f) to make a firearm in violation of the provisions of this chapter; or
(g) to obliterate, remove, change, or alter the serial number or other identification of a firearm required by this chapter; or
(h) to receive or possess a firearm having the serial number or other identification required by this chapter obliterated, removed, changed, or altered; or
(i) to receive or possess a firearm which is not identified by a serial number as required by this chapter; or
(j) to transport, deliver, or receive any firearm in interstate commerce which has not been registered as required by this chapter; or
(k) to receive or possess a firearm which has been imported or brought into the United States in violation of section 5844; or
(l) to make, or cause the making of, a false entry on any application, return, or record required by this chapter, knowing such entry to be false.
(Added
Editorial Notes
Prior Provisions
A prior section 5861, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising subsecs. (a), (b), (d), (g), (j), and (k) of this section were contained in prior sections of act Aug. 16, 1954, prior to the general revision of this chapter by
| Present subsecs.: | Prior sections |
|---|---|
| (a) | 5854. |
| (b) | 5851. |
| (d) | 5854. |
| (g) | 5852. |
| (j) | 5855. |
| (k) | 5853. |
The prior sections 5851 to 5853, act Aug. 16, 1954, ch. 736, are set out in
The prior sections 5854 and 5855,
A prior section 5862, act Aug. 16, 1954, ch. 736,
Statutory Notes and Related Subsidiaries
Effective Date
Section effective on first day of first month following October 1968, see section 207 of
Subchapter D—Penalties and Forfeitures
Editorial Notes
Prior Provisions
A prior subchapter D, consisted of sections 5861 and 5862, prior to the general revision of this chapter by
§5871. Penalties
Any person who violates or fails to comply with any provision of this chapter shall, upon conviction, be fined not more than $10,000, or be imprisoned not more than ten years, or both.
(Added
Editorial Notes
Prior Provisions
A prior section 5871, act Aug. 16, 1954, ch. 736,
Provisions similar to those comprising this section were contained in prior section 5861, act Aug. 16, 1954, ch. 736,
Amendments
1984—
Statutory Notes and Related Subsidiaries
Effective Date of 1984 Amendment
Effective Date
Section effective on first day of first month following October 1968, see section 207(a) of
§5872. Forfeitures
(a) Laws applicable
Any firearm involved in any violation of the provisions of this chapter shall be subject to seizure and forfeiture, and (except as provided in subsection (b)) all the provisions of internal revenue laws relating to searches, seizures, and forfeitures of unstamped articles are extended to and made to apply to the articles taxed under this chapter, and the persons to whom this chapter applies.
(b) Disposal
In the case of the forfeiture of any firearm by reason of a violation of this chapter, no notice of public sale shall be required; no such firearm shall be sold at public sale; if such firearm is forfeited for a violation of this chapter and there is no remission or mitigation of forfeiture thereof, it shall be delivered by the Secretary to the Administrator of General Services, General Services Administration, who may order such firearm destroyed or may sell it to any State, or possession, or political subdivision thereof, or at the request of the Secretary, may authorize its retention for official use of the Treasury Department, or may transfer it without charge to any executive department or independent establishment of the Government for use by it.
(Added
Editorial Notes
Prior Provisions
Provisions similar to those comprising this section were contained in prior section 5862, act Aug. 16, 1954, ch. 736,
Amendments
1976—Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date
Section effective on first day of first month following October 1968, see section 207(a) of
CHAPTER 54 —GREENMAIL
§5881. Greenmail
(a) Imposition of tax
There is hereby imposed on any person who receives greenmail a tax equal to 50 percent of gain or other income of such person by reason of such receipt.
(b) Greenmail
For purposes of this section, the term "greenmail" means any consideration transferred by a corporation (or any person acting in concert with such corporation) to directly or indirectly acquire stock of such corporation from any shareholder if—
(1) such shareholder held such stock (as determined under section 1223) for less than 2 years before entering into the agreement to make the transfer,
(2) at some time during the 2-year period ending on the date of such acquisition—
(A) such shareholder,
(B) any person acting in concert with such shareholder, or
(C) any person who is related to such shareholder or person described in subparagraph (B),
made or threatened to make a public tender offer for stock of such corporation, and
(3) such acquisition is pursuant to an offer which was not made on the same terms to all shareholders.
For purposes of the preceding sentence, payments made in connection with, or in transactions related to, an acquisition shall be treated as paid in such acquisition.
(c) Other definitions
For purposes of this section—
(1) Public tender offer
The term "public tender offer" means any offer to purchase or otherwise acquire stock or assets in a corporation if such offer was or would be required to be filed or registered with any Federal or State agency regulating securities.
(2) Related person
A person is related to another person if the relationship between such persons would result in the disallowance of losses under section 267 or 707(b).
(d) Tax applies whether or not amount recognized
The tax imposed by this section shall apply whether or not the gain or other income referred to in subsection (a) is recognized.
(e) Administrative provisions
For purposes of the deficiency procedures of subtitle F, any tax imposed by this section shall be treated as a tax imposed by subtitle A.
(Added
Editorial Notes
Amendments
1988—Subsec. (a).
Subsec. (b).
Subsec. (d).
Subsec. (e).
Statutory Notes and Related Subsidiaries
Effective Date of 1988 Amendment
Amendment by section 2004(o)(1)(A), (C), (2) of
Effective Date
CHAPTER 55 —STRUCTURED SETTLEMENT FACTORING TRANSACTIONS
§5891. Structured settlement factoring transactions
(a) Imposition of tax
There is hereby imposed on any person who acquires directly or indirectly structured settlement payment rights in a structured settlement factoring transaction a tax equal to 40 percent of the factoring discount as determined under subsection (c)(4) with respect to such factoring transaction.
(b) Exception for certain approved transactions
(1) In general
The tax under subsection (a) shall not apply in the case of a structured settlement factoring transaction in which the transfer of structured settlement payment rights is approved in advance in a qualified order.
(2) Qualified order
For purposes of this section, the term "qualified order" means a final order, judgment, or decree which—
(A) finds that the transfer described in paragraph (1)—
(i) does not contravene any Federal or State statute or the order of any court or responsible administrative authority, and
(ii) is in the best interest of the payee, taking into account the welfare and support of the payee's dependents, and
(B) is issued—
(i) under the authority of an applicable State statute by an applicable State court, or
(ii) by the responsible administrative authority (if any) which has exclusive jurisdiction over the underlying action or proceeding which was resolved by means of the structured settlement.
(3) Applicable State statute
For purposes of this section, the term "applicable State statute" means a statute providing for the entry of an order, judgment, or decree described in paragraph (2)(A) which is enacted by—
(A) the State in which the payee of the structured settlement is domiciled, or
(B) if there is no statute described in subparagraph (A), the State in which either the party to the structured settlement (including an assignee under a qualified assignment under section 130) or the person issuing the funding asset for the structured settlement is domiciled or has its principal place of business.
(4) Applicable State court
For purposes of this section—
(A) In general
The term "applicable State court" means, with respect to any applicable State statute, a court of the State which enacted such statute.
(B) Special rule
In the case of an applicable State statute described in paragraph (3)(B), such term also includes a court of the State in which the payee of the structured settlement is domiciled.
(5) Qualified order dispositive
A qualified order shall be treated as dispositive for purposes of the exception under this subsection.
(c) Definitions
For purposes of this section—
(1) Structured settlement
The term "structured settlement" means an arrangement—
(A) which is established by—
(i) suit or agreement for the periodic payment of damages excludable from the gross income of the recipient under section 104(a)(2), or
(ii) agreement for the periodic payment of compensation under any workers' compensation law excludable from the gross income of the recipient under section 104(a)(1), and
(B) under which the periodic payments are—
(i) of the character described in subparagraphs (A) and (B) of section 130(c)(2), and
(ii) payable by a person who is a party to the suit or agreement or to the workers' compensation claim or by a person who has assumed the liability for such periodic payments under a qualified assignment in accordance with section 130.
(2) Structured settlement payment rights
The term "structured settlement payment rights" means rights to receive payments under a structured settlement.
(3) Structured settlement factoring transaction
(A) In general
The term "structured settlement factoring transaction" means a transfer of structured settlement payment rights (including portions of structured settlement payments) made for consideration by means of sale, assignment, pledge, or other form of encumbrance or alienation for consideration.
(B) Exception
Such term shall not include—
(i) the creation or perfection of a security interest in structured settlement payment rights under a blanket security agreement entered into with an insured depository institution in the absence of any action to redirect the structured settlement payments to such institution (or agent or successor thereof) or otherwise to enforce such blanket security interest as against the structured settlement payment rights, or
(ii) a subsequent transfer of structured settlement payment rights acquired in a structured settlement factoring transaction.
(4) Factoring discount
The term "factoring discount" means an amount equal to the excess of—
(A) the aggregate undiscounted amount of structured settlement payments being acquired in the structured settlement factoring transaction, over
(B) the total amount actually paid by the acquirer to the person from whom such structured settlement payments are acquired.
(5) Responsible administrative authority
The term "responsible administrative authority" means the administrative authority which had jurisdiction over the underlying action or proceeding which was resolved by means of the structured settlement.
(6) State
The term "State" includes the Commonwealth of Puerto Rico and any possession of the United States.
(d) Coordination with other provisions
(1) In general
If the applicable requirements of sections 72, 104(a)(1), 104(a)(2), 130, and 461(h) were satisfied at the time the structured settlement involving structured settlement payment rights was entered into, the subsequent occurrence of a structured settlement factoring transaction shall not affect the application of the provisions of such sections to the parties to the structured settlement (including an assignee under a qualified assignment under section 130) in any taxable year.
(2) No withholding of tax
The provisions of section 3405 regarding withholding of tax shall not apply to the person making the payments in the event of a structured settlement factoring transaction.
(Added
Statutory Notes and Related Subsidiaries
Effective Date
"(1)
"(2)
"(3)
"(A) the structured settlement payee is domiciled in a State (or possession of the United States) which has not enacted a statute providing that the structured settlement factoring transaction is ineffective unless the transaction has been approved by an order, judgment, or decree of a court (or where applicable, a responsible administrative authority) which finds that such transaction—
"(i) does not contravene any Federal or State statute or the order of any court (or responsible administrative authority); and
"(ii) is in the best interest of the structured settlement payee or is appropriate in light of a hardship faced by the payee; and
"(B) the person acquiring the structured settlement payment rights discloses to the structured settlement payee in advance of the structured settlement factoring transaction the amounts and due dates of the payments to be transferred, the aggregate amount to be transferred, the consideration to be received by the structured settlement payee for the transferred payments, the discounted present value of the transferred payments (including the present value as determined in the manner described in section 7520 of such Code), and the expenses required under the terms of the structured settlement factoring transaction to be paid by the structured settlement payee or deducted from the proceeds of such transaction."