26 U.S.C. § 5053 — Exemptions

Page 3162 TITLE 26—INTERNAL REVENUE CODE § 5053 rial) 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 pro- duced 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 ‘‘re- moved for consumption or sale’’, for the pur- poses 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 ‘‘brew- er’’ means any person who brews beer or pro- duces beer for sale. Such term shall not include any person who produces only beer exempt from tax under section 5053(e). (Added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1333; amended Pub. L. 91–673, § 1(b), Jan. 12, 1971, 84 Stat. 2056; Pub. L. 109–59, title XI, § 11125(b)(15), Aug. 10, 2005, 119 Stat. 1956.) Editorial Notes PRIOR PROVISIONS A prior section 5052, act Aug. 16, 1954, ch. 736, 68A Stat. 612, consisted of provisions similar to those com- prising this section, prior to the general revision of this chapter by Pub. L. 85–859. AMENDMENTS 2005—Subsec. (d). Pub. L. 109–59 amended subsec. (d) generally. Prior to amendment, text read as follows: ‘‘For definition of brewer, see section 5092.’’ 1971—Subsec. (c)(2). Pub. L. 91–673 struck out proviso that removal of beer shall not include beer returned to the brewery on the same day such beer is removed from the brewery. 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 1971 AMENDMENT Amendment by Pub. L. 91–673 effective on first day of first calendar month which begins more than 90 days after Jan. 12, 1971, see section 5 of Pub. L. 91–673, set out as a note under section 5056 of this title. § 5053. Exemptions (a) Removals for export Beer may be removed from the brewery, with- out payment of tax, for export, in such con- tainers and under such regulations, and on the giving of such notices, entries, and bonds and other security, as the Secretary may by regula- tions 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 re- move the same from his brewery without pay- ment of tax, for manufacturing purposes, under such regulations as the Secretary may pre- scribe. (c) Removals for laboratory analysis Beer may be removed from the brewery, with- out payment of tax, for laboratory analysis, sub- ject to such limitations and under such regula- tions as the Secretary may prescribe. (d) Removals for research, development, or test- ing 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 anal- ysis) of processes, systems, materials, or equip- ment relating to beer or brewery operations. (e) Beer for personal or family use Subject to regulation prescribed by the Sec- retary, 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) estab- lished 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, lega- tions, etc. (1) In general Subject to such regulations as the Secretary may prescribe— (A) beer may be withdrawn from the brew- ery 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 ware- house under subparagraph (A) shall be entered, stored, and accounted for in such warehouse Page 3163 TITLE 26—INTERNAL REVENUE CODE § 5054 under such regulations and bonds as the Sec- retary may prescribe, and may be withdrawn therefrom by such governments, organiza- tions, 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 pur- poses 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 (19 U.S.C. 1309). (Added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1334; amended Pub. L. 89–44, title VIII, § 807(b), June 21, 1965, 79 Stat. 164; Pub. L. 91–673, § 2, Jan. 12, 1971, 84 Stat. 2056; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 95–458, § 2(b)(1), Oct. 14, 1978, 92 Stat. 1255; Pub. L. 105–34, title XIV, §§ 1414(b), 1418(a), 1419(a), Aug. 5, 1997, 111 Stat. 1047–1049.) Editorial Notes PRIOR PROVISIONS A prior section 5053, act Aug. 16, 1954, ch. 736, 68A Stat. 612, consisted of provisions similar to those com- prising this section, prior to the general revision of this chapter by Pub. L. 85–859. AMENDMENTS 1997—Subsec. (f). Pub. L. 105–34, § 1414(b), added sub- sec. (f). Former subsec. (f) redesignated (i). Subsec. (g). Pub. L. 105–34, § 1418(a), added subsec. (g). Subsec. (h). Pub. L. 105–34, § 1419(a), added subsec. (h). Subsec. (i). Pub. L. 105–34, § 1414(b), redesignated sub- sec. (f) as (i). 1978—Subsecs. (e), (f). Pub. L. 95–458 added subsec. (e) and redesignated former subsec. (e) as (f). 1976—Subsecs. (a) to (d). Pub. L. 94–455 struck out ‘‘or his delegate’’ after ‘‘Secretary’’ wherever appearing. 1971—Subsecs. (d), (e). Pub. L. 91–673 added subsec. (d) and redesignated former subsec. (d) as (e). 1965—Subsec. (a). Pub. L. 89–44 struck out ‘‘to a for- eign country’’ after ‘‘export’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1997 AMENDMENT Pub. L. 105–34, title XIV, § 1414(d), Aug. 5, 1997, 111 Stat. 1047, provided that: ‘‘The amendments made by this section [amending this section and sections 5056 and 5222 of this title] shall take effect on the 1st day of the 1st calendar quarter that begins at least 180 days after the date of the enactment of this Act [Aug. 5, 1997].’’ Pub. L. 105–34, title XIV, § 1418(b), Aug. 5, 1997, 111 Stat. 1049, provided that: ‘‘The amendment made by subsection (a) [amending this section] shall take effect on the 1st day of the 1st calendar quarter that begins at least 180 days after the date of the enactment of this Act [Aug. 5, 1997].’’ Pub. L. 105–34, title XIV, § 1419(b), Aug. 5, 1997, 111 Stat. 1049, provided that: ‘‘The amendment made by subsection (a) [amending this section] shall take effect on the 1st day of the 1st calendar quarter that begins at least 180 days after the date of the enactment of this Act [Aug. 5, 1997].’’ EFFECTIVE DATE OF 1978 AMENDMENT Amendment by Pub. L. 95–458 effective on first day of first calendar month beginning more than 90 days after Oct. 14, 1978, see section 2(c) of Pub. L. 95–458, set out as a note under section 5042 of this title. EFFECTIVE DATE OF 1971 AMENDMENT Amendment by Pub. L. 91–673 effective on first day of first calendar month which begins more than 90 days after Jan. 12, 1971, see section 5 of Pub. L. 91–673, set out as a note under section 5056 of this title. EFFECTIVE DATE OF 1965 AMENDMENT Amendment by Pub. L. 89–44 effective July 1, 1965, see section 807(c) of Pub. L. 89–44, set out as a note under section 5002 of this title. § 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 ac- cordance 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 consump- tion or sale, including the tax imposed by sec- tion 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.