26 U.S.C. § 5041 — Imposition and rate of tax

Page 3152 TITLE 26—INTERNAL REVENUE CODE § 5041 1 See Codification note below. 91 Stat. 1366, 1367, enumerated 12 exemptions from the rectification tax. A prior section 5025, act Aug. 16, 1954, ch. 736, 68A Stat. 607, related to exemption from rectification tax, prior to the general revision of this chapter by Pub. L. 85–859. Provisions similar to those comprising section 5025(e)(1), (2), (4) of this title were contained in former sections 5023, 5217(a), and 5306 of this title, act Aug. 16, 1954, ch. 736, 68A Stat. 606, 641, 657, prior to the general revision of this chapter by Pub. L. 85–859. Section 5026, added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1330; Pub. L. 94–455, title XIX, §§ 1905(b)(2)(B), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1822, 1834, related to the determination and collection of the rectification tax. A prior section 5026, act Aug. 16, 1954, ch. 736, 68A Stat. 608, related to determination and collection of rectification tax, prior to the general revision of this chapter by Pub. L. 85–859. A prior section 5027, act Aug. 16, 1954, ch. 736, 68A Stat. 609, related to stamp provisions applicable to rec- tifiers, prior to the general revision of this chapter by Pub. L. 85–859. A prior section 5028, act Aug. 16, 1954, ch. 736, 68A Stat. 609, related to cross references for penalty provi- sions, prior to the general revision of this chapter by Pub. L. 85–859. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF REPEAL Repeal effective Jan. 1, 1980, see section 810 of Pub. L. 96–39, set out as an Effective Date of 1979 Amendment note under section 5001 of this title. SUBPART C—WINES Sec. 5041. Imposition and rate of tax. 5042. Exemption from tax. 5043. Collection of taxes on wines. 5044. Refund of tax on wine. 5045. Cross references. Editorial Notes PRIOR PROVISIONS A prior subpart C, comprising sections 5041 to 5045, re- lated to wines, prior to the general revision of this chapter by Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1313. AMENDMENTS 1997—Pub. L. 105–34, title XIV, § 1416(b)(3), Aug. 5, 1997, 111 Stat. 1048, struck out ‘‘unmerchantable’’ before ‘‘wine’’ in item 5044. § 5041. Imposition and rate of tax (a) Imposition There is hereby imposed on all wines (includ- ing imitation, substandard, or artificial wine, and compounds sold as wine) having not in ex- cess 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 Sec- retary may by regulations prescribe such toler- ances to this maximum limitation as may be reasonably necessary in good commercial prac- tice. (b) Rates of tax (1) On still wines containing not more than 16 percent of alcohol by volume, $1.07 per wine gal- lon; (2) On still wines containing more than 16 per- cent and not exceeding 21 percent of alcohol by volume, $1.57 per wine gallon; (3) On still wines containing more than 21 per- cent 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 re- moved during the calendar year for con- sumption 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 con- stituted 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 Page 3153 TITLE 26—INTERNAL REVENUE CODE § 5041 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 re- moved during such calendar year by any other person (hereafter in this paragraph re- ferred to as the ‘‘transferee’’) to whom such wine was transferred in bond and who is lia- ble 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 nec- essary to properly determine the trans- feree’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 re- moved by the producer on that date. (6) Allowance of credit for foreign manufactur- ers 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 para- graph as the ‘‘foreign producer’’), provided that such person makes an election de- scribed in subparagraph (B)(ii), to any elect- ing importer of such wine gallons pursuant to the requirements established by the Sec- retary under subparagraph (B). (B) Assignment The Secretary of the Treasury, after con- sultation with the Secretary of the Depart- ment of Homeland Security, shall, through such rules, regulations, and procedures as are determined appropriate, establish proce- dures for assignment of the tax credit pro- vided under this paragraph, which shall in- clude— (i) a limitation to ensure that the num- ber 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 cal- endar 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 im- porter to receive the tax credit provided under this paragraph, (iii) requirements that the foreign pro- ducer provide any information as the Sec- retary determines necessary and appro- priate 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 er- roneous or fraudulent information pro- vided under clause (iii) which the Sec- retary deems to be material to qualifying for such credit. (C) Controlled group For purposes of this section, any importer making an election described in subpara- graph (B)(ii) shall be deemed to be a member of the controlled group of the foreign pro- ducer, 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 sub- paragraph (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 sec- tion. (B) Amount of refund The amount determined under this sub- paragraph 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 re- ferred 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 ap- plied 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) deter- mined under clause (i) for the number of days in the filing period for which the re- fund under this paragraph is being deter- mined. (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. Page 3154 TITLE 26—INTERNAL REVENUE CODE § 5041 (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 regula- tions as may be necessary to carry out the purposes of this subsection, including regula- tions 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 gal- lon). (e) Tolerances Where the Secretary finds that the revenue will not be endangered thereby, he may by regu- lation prescribe tolerances (but not greater than 1⁄2 of 1 percent) for bottles and other containers, and, if such tolerances are prescribed, no assess- ment 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 pro- duced 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 re- moved 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 commer- cial 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 per- cent and less than 8.5 percent alcohol by vol- ume. (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 nec- essary 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 nec- essary 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 Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1331; amended Pub. L. 86–75, § 3(a)(5), June 30, 1959, 73 Stat. 157; Pub. L. 86–564, title II, § 202(a)(7), June 30, 1960, 74 Stat. 290; Pub. L. 87–72, § 3(a)(7), June 30, 1961, 75 Stat. 193; Pub. L. 87–508, § 3(a)(6), June 28, 1962, 76 Stat. 114; Pub. L. 88–52, § 3(a)(7), June 29, 1963, 77 Stat. 72; Pub. L. 88–348, § 2(a)(7), June 30, 1964, 78 Stat. 237; Pub. L. 89–44, title V, § 501(c), title VIII, § 806(a), June 21, 1965, 79 Stat. 150, 162; Pub. L. 93–490, § 6(a), Oct. 26, 1974, 88 Stat. 1468; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 100–647, title VI, § 6101(a), Nov. 10, 1988, 102 Stat. 3710; Pub. L. 101–508, title XI, § 11201(b)(1), (2), Nov. 5, 1990, 104 Stat. 1388–415, 1388–416; Pub. L. 104–188, title I, § 1702(b)(5), Aug. 20, 1996, 110 Stat. 1868; Pub. L. 105–34, title IX, § 908(a), (b), Aug. 5, 1997, 111 Stat. 876; Pub. L. 105–206, title VI, § 6009(a), July 22, 1998, 112 Stat. 812; Pub. L. 114–113, div. Q, title III, § 335(a), Dec. 18, 2015, 129 Stat. 3109; Pub. L. 115–97, title I, §§ 13804(a)–(c), 13805(a), 13806(a), Dec. 22, 2017, 131 Stat. 2173–2175; Pub. L. 116–94, div. Q, title I, § 144(d)(1), (2), (e)(1), (f)(1), (j)(1), Dec. 20, 2019, 133 Stat. 3235; Pub. L. 116–260, div. EE, title I, §§ 106(d)(1), (2), (e)(1), (f)(1), 107(c)(1), Dec. 27, 2020, 134 Stat. 3043, 3044, 3047.) Editorial Notes CODIFICATION Pub. L. 116–260, div. EE, title I, § 110(b), Dec. 27, 2020, 134 Stat. 3049, provided that, for single taxpayer rules relating to wine, see the cross reference under subsec. (c)(3) of this section. PRIOR PROVISIONS A prior section 5041, acts Aug. 16, 1954, ch. 736, 68A Stat. 609; Mar. 30, 1955, ch. 18, § 3(a)(7), 69 Stat. 14; Mar. Page 3155 TITLE 26—INTERNAL REVENUE CODE § 5041 29, 1956, ch. 115, § 3(a)(7), 70 Stat. 66; Mar. 29, 1957, Pub. L. 85–12, § 3(a)(5), 71 Stat. 9; June 30, 1958, Pub. L. 85–475, § 3(a)(5), 72 Stat. 259, consisted of provisions similar to those comprising this section, prior to the general revi- sion of this chapter by Pub. L. 85–859. AMENDMENTS 2020—Subsec. (b)(1), (2). Pub. L. 116–260, § 106(e)(1), sub- stituted ‘‘16 percent’’ for ‘‘14 percent (16 percent in the case of wine removed after December 31, 2017, and be- fore January 1, 2021’’. Subsec. (c). Pub. L. 116–260, § 106(d)(1)(A), struck out ‘‘for small domestic producers’’ after ‘‘Credit’’ in head- ing. Subsec. (c)(1). Pub. L. 116–260, § 106(d)(1)(B), amended par. (1) generally. Prior to amendment, text read as fol- lows: ‘‘Except as provided in paragraph (2), in the case of a person who produces not more than 250,000 wine gallons of wine during the calendar year, there shall be allowed as a credit against any tax imposed by this title (other than chapters 2, 21, and 22) of 90 cents per wine gallon on the 1st 100,000 wine gallons of wine (other than wine described in subsection (b)(4)) which are removed during such year for consumption or sale and which have been produced at qualified facilities in the United States. In the case of wine described in sub- section (b)(6), the preceding sentence shall be applied by substituting ‘5.6 cents’ for ‘90 cents’.’’ Subsec. (c)(1)(A). Pub. L. 116–260, § 106(d)(2)(A), in- serted ‘‘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 para- graph’’ after ‘‘into the United States during the cal- endar year’’ in concluding provisions. Subsec. (c)(2) to (5). Pub. L. 116–260, § 106(d)(1)(C), (D), redesignated pars. (3) to (6) as (2) to (5), respectively, and struck out former par. (2). Prior to amendment, text of par. (2) read as follows: ‘‘The credit allowable by paragraph (1) shall be reduced (but not below zero) by 1 percent for each 1,000 wine gallons of wine produced in excess of 150,000 wine gallons of wine during the cal- endar year.’’ Subsec. (c)(6). Pub. L. 116–260, § 106(d)(1)(E), which di- rected only the redesignation of par. (9) as (6), was exe- cuted by redesignating par. (9) as (6) and transferring it so as to appear after par. (5), to reflect the probable in- tent of Congress. Former par. (6) redesignated (5). Subsec. (c)(6)(A). Pub. L. 116–260, § 106(d)(2)(B)(i), sub- stituted ‘‘paragraph (1)’’ for ‘‘paragraph (8)’’. Subsec. (c)(6)(B). Pub. L. 116–260, § 106(d)(2)(B)(ii), sub- stituted ‘‘The Secretary of the Treasury, after con- sultation with the Secretary of the Department of Homeland Security,’’ for ‘‘The Secretary’’ in introduc- tory provisions. Subsec. (c)(6)(C). Pub. L. 116–260, § 106(d)(2)(B)(iii), substituted ‘‘paragraph (3)’’ for ‘‘paragraph (4)’’. Subsec. (c)(7). Pub. L. 116–260, § 107(c)(1), added par. (7). Former par. (7) redesignated (8). Pub. L. 116–260, § 106(d)(1)(F), amended par. (7) gen- erally. Prior to amendment, text read as follows: ‘‘The Secretary may prescribe such regulations as may be necessary to carry out the purposes of this subsection, including regulations— ‘‘(A) to prevent the credit provided in this sub- section from benefiting any person who produces more than 250,000 wine gallons of wine during a cal- endar 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). Pub. L. 116–260, § 107(c)(1), redesignated par. (7) as (8). Pub. L. 116–260, § 106(d)(1)(C), struck out par. (8) which related to a special rule for wine and hard cider re- moved between Dec. 31, 2017, and Jan. 1, 2021. Subsec. (c)(9). Pub. L. 116–260, § 106(d)(1)(E), redesig- nated par. (9) as (6). Subsec. (h)(2)(A)(i), (B)(i). Pub. L. 116–260, § 106(f)(1)(A), substituted ‘‘the Secretary may’’ for ‘‘the Secretary shall’’. Subsec. (h)(3). Pub. L. 116–260, § 106(f)(1)(B), struck out par. (3). Text read as follows: ‘‘This subsection shall not apply to wine removed after December 31, 2020.’’ 2019—Subsec. (b)(1), (2). Pub. L. 116–94, § 144(e)(1), sub- stituted ‘‘January 1, 2021’’ for ‘‘January 1, 2020’’. Subsec. (c)(8). Pub. L. 116–94, § 144(d)(2), substituted ‘‘Temporary special rule’’ for ‘‘Special rule for 2018 and 2019’’ in heading. Subsec. (c)(8)(A). Pub. L. 116–94, § 144(d)(1), substituted ‘‘January 1, 2021’’ for ‘‘January 1, 2020’’ in introductory provisions. Subsec. (c)(8)(C). Pub. L. 116–94, § 144(j)(1), added sub- par. (C). Subsec. (h)(3). Pub. L. 116–94, § 144(f)(1), substituted ‘‘December 31, 2020’’ for ‘‘December 31, 2019’’. 2017—Subsec. (a). Pub. L. 115–97, § 13806(a)(1), sub- stituted ‘‘Subject to subsection (h), still wines’’ for ‘‘Still wines’’. Subsec. (b)(1), (2). Pub. L. 115–97, § 13805(a), inserted ‘‘(16 percent in the case of wine removed after Decem- ber 31, 2017, and before January 1, 2020’’ after ‘‘14 per- cent’’. Subsec. (c)(4). Pub. L. 115–97, § 13804(b), substituted ‘‘section 5051(a)(5)’’ for ‘‘section 5051(a)(2)(B)’’. Subsec. (c)(8). Pub. L. 115–97, § 13804(a), added par. (8). Subsec. (c)(8)(A). Pub. L. 115–97, § 13804(c)(1), inserted ‘‘but only if the importer is an electing importer under paragraph (9) and the wine gallons of wine have been assigned to the importer pursuant to such paragraph’’ after ‘‘into the United States during the calendar year’’ in concluding provisions. Subsec. (c)(9). Pub. L. 115–97, § 13804(c)(2), added par. (9). Subsec. (h). Pub. L. 115–97, § 13806(a)(2), added subsec. (h). 2015—Subsec. (b)(6). Pub. L. 114–113, § 335(a)(1), struck out ‘‘which is a still wine derived primarily from apples or apple concentrate and water, containing no other fruit product, and containing at least one-half of 1 per- cent and less than 7 percent alcohol by volume’’ after ‘‘hard cider’’. Subsec. (g). Pub. L. 114–113, § 335(a)(2), added subsec. (g). 1998—Subsec. (b)(6). Pub. L. 105–206 inserted ‘‘which is a still wine’’ after ‘‘hard cider’’. 1997—Subsec. (b)(6). Pub. L. 105–34, § 908(a), added par. (6). Subsec. (c)(1). Pub. L. 105–34, § 908(b), inserted at end ‘‘In the case of wine described in subsection (b)(6), the preceding sentence shall be applied by substituting ‘5.6 cents’ for ‘90 cents’.’’ 1996—Subsec. (c)(6), (7). Pub. L. 104–188 added pars. (6) and (7) and struck out former par. (6) which read as fol- lows: ‘‘(6) REGULATIONS.—The Secretary may prescribe such regulations as may be necessary to prevent the credit provided in this subsection from benefiting any person who produces more than 250,000 wine gallons of wine during a calendar year and to assure proper reduc- tion of such credit for persons producing more than 150,000 wine gallons of wine during a calendar year.’’ 1990—Subsec. (b)(1). Pub. L. 101–508, § 11201(b)(1)(A), substituted ‘‘$1.07’’ for ‘‘17 cents’’. Subsec. (b)(2). Pub. L. 101–508, § 11201(b)(1)(B), sub- stituted ‘‘$1.57’’ for ‘‘67 cents’’. Subsec. (b)(3). Pub. L. 101–508, § 11201(b)(1)(C), sub- stituted ‘‘$3.15’’ for ‘‘$2.25’’. Subsec. (b)(5). Pub. L. 101–508, § 11201(b)(1)(D), sub- stituted ‘‘$3.30’’ for ‘‘$2.40’’. Subsecs. (c) to (f). Pub. L. 101–508, § 11201(b)(2), added subsec. (c) and redesignated former subsecs. (c) to (e) as (d) to (f), respectively. 1988—Subsecs. (d), (e). Pub. L. 100–647 added subsec. (d) and redesignated former subsec. (d) as (e). 1976—Subsec. (a). Pub. L. 94–455 struck out ‘‘or his delegate’’ after ‘‘Secretary’’. 1974—Subsec. (a). Pub. L. 93–490 substituted ‘‘0.392’’ for ‘‘0.277’’. 1965—Subsec. (a). Pub. L. 89–44, § 806(a), substituted ‘‘0.277’’ for ‘‘0.256’’. Page 3156 TITLE 26—INTERNAL REVENUE CODE § 5042 Subsec. (b). Pub. L. 89–44, § 501(c)(1)–(5), struck out provisions at end of each par. setting out a specified re- duced rate to be applied on and after July 1, 1965. 1964—Subsec. (b). Pub. L. 88–348 substituted ‘‘July 1, 1965’’ for ‘‘July 1, 1964’’ in five places. 1963—Subsec. (b). Pub. L. 88–52 substituted ‘‘July 1, 1964’’ for ‘‘July 1, 1963’’ in five places. 1962—Subsec. (b). Pub. L. 87–508 substituted ‘‘July 1, 1963’’ for ‘‘July 1, 1962’’ in five places. 1961—Subsec. (b). Pub. L. 87–72 substituted ‘‘July 1, 1962’’ for ‘‘July 1, 1961’’ in five places. 1960—Subsec. (b). Pub. L. 86–564 substituted ‘‘July 1, 1961’’ for ‘‘July 1, 1960’’ in five places. 1959—Subsec. (b). Pub. L. 86–75 substituted ‘‘July 1, 1960’’ for ‘‘July 1, 1959’’ in five places. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2020 AMENDMENT Pub. L. 116–260, div. EE, title I, § 106(d)(3), Dec. 27, 2020, 134 Stat. 3044, provided that: ‘‘The amendments made by this subsection [amending this section] shall apply to wine removed after December 31, 2020.’’ Pub. L. 116–260, div. EE, title I, § 106(e)(2), Dec. 27, 2020, 134 Stat. 3044, provided that: ‘‘The amendments made by this subsection [amending this section] shall apply to wine removed after December 31, 2020.’’ Pub. L. 116–260, div. EE, title I, § 106(f)(2), Dec. 27, 2020, 134 Stat. 3044, provided that: ‘‘The amendments made by this subsection [amending this section] shall apply to wine removed after December 31, 2020.’’ Pub. L. 116–260, div. EE, title I, § 107(c)(2), Dec. 27, 2020, 134 Stat. 3048, provided that: ‘‘The amendments made by this subsection [amending this section] shall apply to wine removed after December 31, 2022.’’ EFFECTIVE DATE OF 2019 AMENDMENT Pub. L. 116–94, div. Q, title I, § 144(d)(3), Dec. 20, 2019, 133 Stat. 3235, provided that: ‘‘The amendments made by this subsection [amending this section] shall apply to wine removed after December 31, 2019.’’ Pub. L. 116–94, div. Q, title I, § 144(e)(2), Dec. 20, 2019, 133 Stat. 3235, provided that: ‘‘The amendments made by this subsection [amending this section] shall apply to wine removed after December 31, 2019.’’ Pub. L. 116–94, div. Q, title I, § 144(f)(2), Dec. 20, 2019, 133 Stat. 3235, provided that: ‘‘The amendment made by this subsection [amending this section] shall apply to wine removed after December 31, 2019.’’ Pub. L. 116–94, div. Q, title I, § 144(j)(2), Dec. 20, 2019, 133 Stat. 3236, provided that: ‘‘The amendment made by this subsection [amending this section] shall take ef- fect as if included in section 13804 of Public Law 115–97.’’ EFFECTIVE DATE OF 2017 AMENDMENT Pub. L. 115–97, title I, § 13804(d), Dec. 22, 2017, 131 Stat. 2175, provided that: ‘‘The amendments made by this section [amending this section] shall apply to wine re- moved after December 31, 2017.’’ Pub. L. 115–97, title I, § 13805(b), Dec. 22, 2017, 131 Stat. 2175, provided that: ‘‘The amendments made by this section [amending this section] shall apply to wine re- moved after December 31, 2017.’’ Pub. L. 115–97, title I, § 13806(b), Dec. 22, 2017, 131 Stat. 2175, provided that: ‘‘The amendments made by this section [amending this section] shall apply to wine re- moved after December 31, 2017.’’ EFFECTIVE DATE OF 2015 AMENDMENT Pub. L. 114–113, div. Q, title III, § 335(b), Dec. 18, 2015, 129 Stat. 3109, provided that: ‘‘The amendments made by this section [amending this section] shall apply to hard cider removed during calendar years beginning after December 31, 2016.’’ EFFECTIVE DATE OF 1998 AMENDMENT Amendment by Pub. L. 105–206 effective, except as otherwise provided, as if included in the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105–34, to which such amendment relates, see section 6024 of Pub. L. 105–206, set out as a note under section 1 of this title. EFFECTIVE DATE OF 1997 AMENDMENT Pub. L. 105–34, title IX, § 908(c), Aug. 5, 1997, 111 Stat. 876, provided that: ‘‘The amendments made by this sec- tion [amending this section] shall take effect on Octo- ber 1, 1997.’’ EFFECTIVE DATE OF 1996 AMENDMENT Amendment by Pub. L. 104–188 effective, except as otherwise expressly provided, as if included in the pro- vision of the Revenue Reconciliation Act of 1990, Pub. L. 101–508, title XI, to which such amendment relates, see section 1702(i) of Pub. L. 104–188, set out as a note under section 38 of this title. EFFECTIVE DATE OF 1990 AMENDMENT Amendment by Pub. L. 101–508 effective Jan. 1, 1991, see section 11201(d) of Pub. L. 101–508, set out as a note under section 5001 of this title. EFFECTIVE DATE OF 1988 AMENDMENT Pub. L. 100–647, title VI, § 6101(b), Nov. 10, 1988, 102 Stat. 3710, provided that: ‘‘The amendment made by subsection (a) [amending this section] shall apply to wine removed after December 31, 1988.’’ EFFECTIVE DATE OF 1974 AMENDMENT Pub. L. 93–490, § 6(b), Oct. 26, 1974, 88 Stat. 1468, pro- vided that: ‘‘The amendment made by this section [amending this section] shall take effect on the first day of the first calendar month which begins more than 90 days after the date of enactment of this Act [Oct. 26, 1974].’’ EFFECTIVE DATE OF 1965 AMENDMENT Amendment by section 501(c) of Pub. L. 89–44 applica- ble on and after July 1, 1965, see section 701(d) of Pub. L. 89–44, set out as a note under section 5701 of this title. Pub. L. 89–44, title VIII, § 806(d)(1), June 21, 1965, 79 Stat. 164, provided that: ‘‘The amendment made by sub- section (a) [amending this section] shall take effect on July 1, 1965.’’ EFFECTIVE DATE Section effective July 1, 1959, see section 210(a)(1) of Pub. L. 85–859, set out as a note under section 5001 of this title. FLOOR STOCKS TAXES ON DISTILLED SPIRITS, WINE, AND BEER Imposition of tax on wine, exception for small domes- tic producers, exception for certain small wholesale or retail dealers, credit against tax, liability for tax and method of payment, controlled groups, other laws ap- plicable, and definitions, see section 11201(e) of Pub. L. 101–508, set out as a note under section 5001 of this title. § 5042. Exemption from tax (a) Tax-free production (1) Cider Subject to regulations prescribed by the Sec- retary, the noneffervescent product of the nor- mal 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 Sec- retary—