26 U.S.C. § 5373 — Wine spirits

Page 3219 TITLE 26—INTERNAL REVENUE CODE § 5373 Editorial Notes PRIOR PROVISIONS A prior section 5369, act Aug. 16, 1954, ch. 736, 68A Stat. 666, 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’’. § 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 Sec- retary shall find that the theft occurred with- out connivance, collusion, fraud, or negligence on the part of the proprietor or other person responsible for the tax, or the owner, con- signor, 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 su- pervision, 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 de- stroyed, whether by theft or otherwise, the Sec- retary may require by regulations the propri- etor 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 propri- etor or other person liable for the tax to estab- lish to the satisfaction of the Secretary, that such loss did not occur as the result of conniv- ance, 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 Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1381; amended Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.) Editorial Notes PRIOR PROVISIONS A prior section 5370, act Aug. 16, 1954, ch. 736, 68A Stat. 666, 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. § 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 indem- nified or recompensed for the tax. (Added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1382.) Editorial Notes PRIOR PROVISIONS A prior section 5371, 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. § 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 Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1382; amended Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.) Editorial Notes PRIOR PROVISIONS A prior section 5372, 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’’. § 5373. Wine spirits (a) In general The wine spirits authorized to be used in wine production shall be brandy or wine spirits pro- duced in a distilled spirits plant (with or with- out 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 condi- tions as the Secretary may by regulations pre- scribe; 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 pro- vide, at less than 140 degrees of proof (except that commercial brandy aged in wood for a pe- riod 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 con- centrated 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 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