26 U.S.C. § 5382 — Cellar treatment of natural wine

Page 3220 TITLE 26—INTERNAL REVENUE CODE § 5381 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the amount of wine spirits so used or transferred or taxpaid and, in addition, with such portion of wine spirits so withdrawn as may have been lost either in transit or on the bonded wine cellar premises, to the extent allowable under section 5008(a).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 spir- its in actual wine production but in violation of the requirements of this subchapter, the Sec- retary 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 (4) Suitable samples of brandy or wine spirits may, under regulations prescribed by the Sec- retary, be withdrawn free of tax from the bonded premises of any distilled spirits plant, bonded wine cellar, or authorized experimental prem- ises, for analysis or testing.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 regula- tions as the Secretary may prescribe, be re- moved without payment of tax from the bonded premises of a distilled spirits plant to an adja- cent bonded wine cellar and used therein in fer- mentation of wine to be used as distilling mate- rial at the distilled spirits plant from which such unfinished distilled spirits were removed. (Added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1382; amended Pub. L. 90–619, § 1, Oct. 22, 1968, 82 Stat. 1236; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.) Editorial Notes PRIOR PROVISIONS A prior section 5373, act Aug. 16, 1954, ch. 736, 68A Stat. 667, consisted of provisions similar to those com- prising this section, prior to the general revision of this chapter by Pub. L. 85–859. AMENDMENTS 1976—Pub. L. 94–455 struck out ‘‘or his delegate’’ after ‘‘Secretary’’ wherever appearing. 1968—Subsec. (a). Pub. L. 90–619 inserted special nat- ural wine, under conditions prescribed by regulations, as one of the materials from which wine spirits may be produced and extended to special natural wines the ex- isting prohibition on the use of natural wine whose sug- ars have been refermented. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1968 AMENDMENT Pub. L. 90–619, § 6, Oct. 22, 1968, 82 Stat. 1237, provided that: ‘‘The amendments made by this Act [amending this section and sections 5382 to 5387 of this title] shall take effect on the first day of the first month which be- gins 90 days or more after the date of the enactment of this Act [Oct. 22, 1968].’’ PART III—CELLAR TREATMENT AND CLASSIFICATION OF WINE Sec. 5381. Natural wine. 5382. Cellar treatment of natural wine. Sec. 5383. Amelioration and sweetening limitations for natural grape wines. 5384. Amelioration and sweetening limitations for natural fruit and berry wines. 5385. Specially sweetened natural wines. 5386. Special natural wines. 5387. Agricultural wines. 5388. Designation of wines. Editorial Notes PRIOR PROVISIONS A prior part III consisted of sections 5381 to 5388 of this title, prior to the general revision of this chapter by Pub. L. 85–859, title II, Sept. 2, 1958, 72 Stat. 1313. § 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 sol- ids. Any wine conforming to such definition ex- cept for having become substandard by reason of its condition shall be deemed not to be natural wine, unless the condition is corrected. (Added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1383; amended Pub. L. 96–39, title VIII, § 807(a)(48), July 26, 1979, 93 Stat. 288.) Editorial Notes PRIOR PROVISIONS A prior section 5381, act Aug. 16, 1954, ch. 736, 68A Stat. 668, consisted of provisions similar to those com- prising this section, prior to the general revision of this chapter by Pub. L. 85–859. AMENDMENTS 1979—Pub. L. 96–39 struck out provisions authorizing removal for distillation of wine deemed not to be nat- ural wine, destruction of such wine under government supervision, and transfer of such wine to premises in which other than natural wine may be stored or used. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1979 AMENDMENT Amendment by Pub. L. 96–39 effective Jan. 1, 1980, see section 810 of Pub. L. 96–39, set out as a note under sec- tion 5001 of this title. EFFECTIVE DATE Section effective July 1, 1959, see section 210(a)(1) of Pub. L. 85–859, set out as a note under section 5001 of this title. § 5382. Cellar treatment of natural wine (a) Proper cellar treatment (1) In general Proper cellar treatment of natural wine con- stitutes— (A) subject to paragraph (2), those prac- tices and procedures in the United States, whether historical or newly developed, of using various methods and materials to cor- rect or stabilize the wine, or the fruit juice from which it is made, so as to produce a fin- ished product acceptable in good commercial practice in accordance with regulations pre- scribed by the Secretary; and Page 3221 TITLE 26—INTERNAL REVENUE CODE § 5382 (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 trea- ty. (2) Recognition of continuing treatment For purposes of paragraph (1)(A), where a particular treatment has been used in cus- tomary commercial practice in the United States, it shall continue to be recognized as a proper cellar treatment in the absence of regu- lations prescribed by the Secretary finding such treatment not to be proper cellar treat- ment 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 impor- tation— (i) the Secretary has on file or is pro- vided with a certification from the govern- ment of the producing country, accom- panied 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 pro- vided with such certification, if any, as may be required by an international agree- ment 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 con- stitute 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 (27 U.S.C. 211(a)(4)) and includes a winery’s parent or subsidiary or any other entity in which the winery’s par- ent or subsidiary has an ownership interest. (b) Specifically authorized treatments The practices and procedures specifically enu- merated in this subsection shall be deemed prop- er cellar treatment for natural wine: (1) The preparation and use of pure con- centrated 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 con- centrated 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 cel- lars 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 accord- ance 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 spir- its, if the wines, juice, or wine spirits are from the same kind of fruit. (8) Such use of acids to correct natural defi- ciencies and stabilize the wine as may be ac- ceptable 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 produc- tion, of volatile fruit-flavor concentrate pro- duced 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 con- centrate 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 clari- fying, 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 bond- Page 3222 TITLE 26—INTERNAL REVENUE CODE § 5383 ed wine cellar, there is added to such juice, con- centrated juice, or must, or (in the case of a bonded wine cellar) to wine of the winemaker’s own production made therefrom, either the iden- tical volatile flavor removed or— (1) in the case of natural grape or berry wine of the winemaker’s own production, an equiva- lent quantity of volatile fruit-flavor con- centrate 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 Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1383; amended Pub. L. 88–653, §§ 1, 2, Oct. 13, 1964, 78 Stat. 1085; Pub. L. 89–44, title VIII, § 806(c)(1), June 21, 1965, 79 Stat. 164; Pub. L. 90–619, § 2, Oct. 22, 1968, 82 Stat. 1237; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 108–429, title II, § 2002(a), Dec. 3, 2004, 118 Stat. 2588; Pub. L. 109–432, div. D, title III, § 3007, Dec. 20, 2006, 120 Stat. 3176.) Editorial Notes PRIOR PROVISIONS A prior section 5382, act Aug. 16, 1954, ch. 736, 68A Stat. 668, consisted of provisions similar to those com- prising this section, prior to the general revision of this chapter by Pub. L. 85–859. AMENDMENTS 2006—Subsec. (a)(1)(A). Pub. L. 109–432 substituted ‘‘correct or stabilize’’ for ‘‘stabilize’’. 2004—Subsec. (a). Pub. L. 108–429 amended heading and text of subsec. (a) generally. Prior to amendment text read as follows: ‘‘Proper cellar treatment of nat- ural wine constitutes those practices and procedures in the United States and elsewhere, whether historical or newly developed, of using various methods and mate- rials to correct or stabilize the wine, or the fruit juice from which it is made, so as to produce a finished prod- uct acceptable in good commercial practice. Where a particular treatment has been used in customary com- mercial practice, 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 a proper cellar treatment within the meaning of this subsection.’’ 1976—Pub. L. 94–455 struck out ‘‘or his delegate’’ after ‘‘Secretary’’ wherever appearing. 1968—Subsec. (b)(2)(B). Pub. L. 90–619 permitted wine spirits to be added to natural wine produced by fer- mentation in any bonded wine cellars located within the same State in which the addition is to take place. 1965—Subsec. (b)(2). Pub. L. 89–44 struck out ‘‘made without added sugar or reserved as provided in sections 5383(b) and 5384(b)’’ after ‘‘winemaker’s own produc- tion’’. 1964—Subsec. (b)(9). Pub. L. 88–653, § 1, added par. (9). Subsec. (d). Pub. L. 88–653, § 2, added subsec. (d). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2004 AMENDMENT Pub. L. 108–429, title II, § 2002(b), Dec. 3, 2004, 118 Stat. 2589, provided that: ‘‘The amendment made by this sec- tion [amending this section] shall take effect on Janu- ary 1, 2005.’’ EFFECTIVE DATE OF 1968 AMENDMENT Amendment by Pub. L. 90–619 effective on first day of first month which begins 90 days or more after Oct. 22, 1968, see section 6 of Pub. L. 90–619, set out as a note under section 5373 of this title. EFFECTIVE DATE OF 1965 AMENDMENT Amendment by Pub. L. 89–44 effective Jan. 1, 1966, see section 806(d)(2) of Pub. L. 89–44, set out as a note under section 5383 of this title. EFFECTIVE DATE OF 1964 AMENDMENT Pub. L. 88–653, § 4, Oct. 13, 1964, 78 Stat. 1085, provided that: ‘‘The amendments made by the first section [amending this section] and sections 2 and 3 of this Act [amending this section and section 5511 of this title] shall take effect on the first day of the second month which begins more than 10 days after the date on which this Act is enacted [Oct. 13, 1964].’’ § 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 alco- holic content of the finished wine after sweet- ening is not more than 14 percent by volume; ex- cept that the use under this subsection of liquid sugar shall be limited so that the resultant vol- ume will not exceed the volume which could re- sult from the maximum authorized use of pure dry sugar only. (b) High acid wines (1) Amelioration Before, during, and after fermentation, ame- liorating 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 fer- mentation 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 sol- ids content of the finished wine does not ex- ceed (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 con- tent 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 al- cohol by volume derived from fermentation.