26 U.S.C. § 5010 — Credit for wine content and for flavors

Page 3150 TITLE 26—INTERNAL REVENUE CODE § 5010 prising this section, prior to the general revision of this chapter by Pub. L. 85–859. See sections 5205(c)(1), (f), (i)(4) and 5206(c) of this title. 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. § 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 dis- tilled spirits is payable as if the credit al- lowable by this section constituted a reduc- tion in the rate of tax. (2) Determination of content in the case of im- ports For purposes of this section, the wine con- tent, and the flavors content, of imported dis- tilled 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 sec- tion 5041(b) but for its removal to bonded premises, and (ii) does not include any substance which has been subject to distillation at a dis- tilled 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 in- clude— (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) 21⁄2 percent of the finished product. (Added Pub. L. 96–598, § 6(a), Dec. 24, 1980, 94 Stat. 3488; amended Pub. L. 98–369, div. A, title I, § 27(a)(2), July 18, 1984, 98 Stat. 507; Pub. L. 100–647, title V, § 5063(a), Nov. 10, 1988, 102 Stat. 3681; Pub. L. 101–508, title XI, § 11201(a)(2), Nov. 5, 1990, 104 Stat. 1388–415; Pub. L. 109–59, title XI, § 11125(b)(14), Aug. 10, 2005, 119 Stat. 1956.) Editorial Notes PRIOR PROVISIONS A prior section 5010, act Aug. 16, 1954, ch. 736, 68A Stat. 603, related to miscellaneous stamp provisions, prior to the general revision of this chapter by Pub. L. 85–859. AMENDMENTS 2005—Subsec. (c)(2)(A). Pub. L. 109–59 substituted ‘‘section 5114’’ for ‘‘section 5134’’. 1990—Subsec. (a)(1), (2). Pub. L. 101–508 substituted ‘‘$13.50’’ for ‘‘$12.50’’. 1988—Subsec. (c)(2)(B). Pub. L. 100–647 added cl. (ii) and redesignated former cl. (ii) as (iii). 1984—Subsec. (a)(1), (2). Pub. L. 98–369 substituted ‘‘$12.50’’ for ‘‘$10.50’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2005 AMENDMENT Amendment by Pub. L. 109–59 effective July 1, 2008, but inapplicable to taxes imposed for periods before such date, see section 11125(c) of Pub. L. 109–59, set out as a note under section 5002 of this title. EFFECTIVE DATE OF 1990 AMENDMENT Amendment by Pub. L. 101–508 effective Jan. 1, 1991, see section 11201(d) of Pub. L. 101–508, set out as a note under section 5001 of this title. EFFECTIVE DATE OF 1988 AMENDMENT Pub. L. 100–647, title V, § 5063(b), Nov. 10, 1988, 102 Stat. 3681, provided that: ‘‘The amendments made by this section [amending this section] shall apply with respect to distilled spirits withdrawn from bond after the date of the enactment of this Act [Nov. 10, 1988].’’ EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98–369 effective Oct. 1, 1985, see section 27(d)(1) of Pub. L. 98–369, set out as a note under section 5001 of this title. EFFECTIVE DATE Pub. L. 96–598, § 6(c), Dec. 24, 1980, 94 Stat. 3489, pro- vided that: ‘‘The amendments made by subsections (a) Page 3151 TITLE 26—INTERNAL REVENUE CODE [§§ 5021 to 5026 and (b) [enacting this section] shall take effect on Jan- uary 1, 1980.’’ § 5011. Income tax credit for average cost of car- rying 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 whole- saler 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 spir- its which are stored in a warehouse operated by, or on behalf of, a State or political sub- division thereof, or an agency of either, on which title has not passed on an uncondi- tional sale basis, and (2) the average tax-financing cost per case for the most recent calendar year ending be- fore the beginning of such taxable year. (b) Eligible wholesaler For purposes of this section, the term ‘‘eligi- ble wholesaler’’ means any person which holds a permit under the Federal Alcohol Administra- tion 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 ac- crue 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 fi- nancing rate for any calendar year is the aver- age 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-milli- liter bottles. (2) Number of cases in lot The number of cases in any lot of distilled spirits shall be determined by dividing the number of liters in such lot by 9. (Added Pub. L. 109–59, title XI, § 11126(a), Aug. 10, 2005, 119 Stat. 1957.) Editorial Notes REFERENCES IN TEXT The Federal Alcohol Administration Act, referred to in subsec. (b), is act Aug. 29, 1935, ch. 814, 49 Stat. 977, which is classified generally to subchapter I (§ 201 et seq.) of chapter 8 of Title 27, Intoxicating Liquors. For complete classification of this Act to the Code, see sec- tion 201 of Title 27 and Tables. PRIOR PROVISIONS A prior section 5011, act Aug. 16, 1954, ch. 736, 68A Stat. 604, related to abatement, remission, refund and allowance for loss or destruction of distilled spirits, prior to the general revision of this chapter by Pub. L. 85–859. A prior section 5012, act Aug. 16, 1954, ch. 736, 68A Stat. 605, related to drawback on exportation of dis- tilled spirits, prior to the general revision of this chap- ter by Pub. L. 85–859. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section applicable to taxable years beginning after Sept. 30, 2005, see section 11126(d) of Pub. L. 109–59, set out as an Effective Date of 2005 Amendments note under section 38 of this title. [SUBPART B—REPEALED] [§§ 5021 to 5026. Repealed. Pub. L. 96–39, title VIII, § 803(a), July 26, 1979, 93 Stat. 274] Section 5021, added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1328, provided for imposition of a tax on rectified distilled spirits or wines. A prior section 5021, act Aug. 16, 1954, ch. 736, 68A Stat. 606, related to imposition and rate of tax, prior to the general revision of this chapter by Pub. L. 85–859. Section 5022, added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1328; amended Pub. L. 86–75, § 3(a)(4), June 30, 1959, 73 Stat. 157; Pub. L. 86–564, title II, § 202(a)(6), June 30, 1960, 74 Stat. 290; Pub. L. 87–72, § 3(a)(6), June 30, 1961, 75 Stat. 193; Pub. L. 87–508, § 3(a)(5), June 28, 1962, 76 Stat. 114; Pub. L. 88–52, § 3(a)(6), June 29, 1963, 77 Stat. 72; Pub. L. 88–348, § 2(a)(6), June 30, 1964, 78 Stat. 237; Pub. L. 89–44, title V, § 501(b), June 21, 1965, 79 Stat. 150, imposed a tax on cordials and liqueurs containing wine. A prior section 5022, acts Aug. 16, 1954, ch. 736, 68A Stat. 606; Mar. 30, 1955, ch. 18, § 3(a)(6), 69 Stat. 14; Mar. 29, 1956, ch. 115, § 3(a)(6), 70 Stat. 66; Mar. 29, 1957, Pub. L. 85–12, § 3(a)(4), 71 Stat. 9; June 30, 1958, Pub. L. 85–475, § 3(a)(4), 72 Stat. 259, imposed a tax on cordials and li- queurs containing wine, prior to the general revision of this chapter by Pub. L. 85–859. Section 5023, added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1328, imposed a tax on the blending of beverage rums and brandies. A prior section 5023, act Aug. 16, 1954, ch. 736, 68A Stat. 606, imposed a tax on blending of beverage brand- ies, prior to the general revision of this chapter by Pub. L. 85–859. Section 5024, added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1328, indicated the sources for the defi- nitions of ‘‘rectifier’’, ‘‘products of rectification’’, and ‘‘distilled spirits’’ and referred to other definitions re- lating to distilled spirits as well as other definitions of general application to this title. A prior section 5024, act Aug. 16, 1954, ch. 736, 68A Stat. 607, defined ‘‘rectifier’’ and ‘‘products of rectifica- tion’’, prior to the general revision of this chapter by Pub. L. 85–859. Section 5025, added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1328; amended Pub. L. 89–44, title VIII, § 805(b), (f)(2)–(5), June 21, 1965, 79 Stat. 161; Pub. L. 94–455, title XIX, §§ 1905(a)(4), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1818, 1834; Pub. L. 95–176, §§ 5(b), 6, Nov. 14, 1977,