26 USC 5044 - Refund of tax on wine

Collapse to view only § 5044. Refund of tax on wine

§ 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

§ 5041. Imposition and rate of tax

(a) Imposition

(b) Rates of tax

(1) On still wines containing not more than 16 percent of alcohol by volume, $1.07 per wine gallon;

(2) On still wines containing more than 16 percent and not exceeding 21 percent of alcohol by volume, $1.57 per wine gallon;

(3) On still wines containing more than 21 percent 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.

(1) Allowance of credit

(A) In generalThere 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 removed during the calendar year for consumption 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 ciderIn 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 creditThe 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 constituted a reduction in the rate of such tax.

(3)1

1 See Codification note below.

Controlled groups

(4) Denial of deduction

(5) Credit for transferee in bondIf—

(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 removed during such calendar year by any other person (hereafter in this paragraph referred to as the “transferee”) to whom such wine was transferred in bond and who is liable 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 necessary to properly determine the transferee’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 removed by the producer on that date.

(6) Allowance of credit for foreign manufacturers and importers

(A) In general

(B) AssignmentThe Secretary of the Treasury, after consultation with the Secretary of the Department of Homeland Security, shall, through such rules, regulations, and procedures as are determined appropriate, establish procedures for assignment of the tax credit provided under this paragraph, which shall include—

(i) a limitation to ensure that the number 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 calendar 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 importer to receive the tax credit provided under this paragraph,

(iii) requirements that the foreign producer provide any information as the Secretary determines necessary and appropriate 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 erroneous or fraudulent information provided under clause (iii) which the Secretary deems to be material to qualifying for such credit.

(7) Refunds in lieu of tax credits for foreign production removed after December 31, 2022

(A) In generalIn 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 subparagraph (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 section.

(B) Amount of refundThe amount determined under this subparagraph 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 referred 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 applied 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) determined under clause (i) for the number of days in the filing period for which the refund under this paragraph is being determined.

(D) Rules for refunds within 90 days

(8) Regulations

(d) Wine gallon

(e) Tolerances

(f) Illegally produced wine

(g) Hard ciderFor 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 commercial 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 percent and less than 8.5 percent alcohol by volume.

(h) Mead and low alcohol by volume wine

(1) In general

(2) Definitions

(A) MeadFor 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 necessary 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 wineFor purposes of this section, the term “low alcohol by volume wine” means a wine—

(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.)

§ 5042. Exemption from tax

(a) Tax-free production

(1) Cider

(2) Wine for personal or family use

Subject to regulations prescribed by the Secretary—

(A) Exemption

(B) Limitation

The aggregate amount of wine exempt from tax under this paragraph with respect to any household shall not exceed—

(i) 200 gallons per calendar year if there are 2 or more adults in such household, or

(ii) 100 gallons per calendar year if there is only 1 adult in such household.

(3) Experimental wine

(b) Cross references

(1) For provisions relating to exemption of tax on losses of wine (including losses by theft or authorized destruction), see section 5370.

(2) For provisions exempting from tax samples of wine, see section 5372.

(3) For provisions authorizing withdrawals of wine free of tax or without payment of tax, see section 5362.

(Added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1331; amended Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 95–458, § 2(a), Oct. 14, 1978, 92 Stat. 1255.)

§ 5043. Collection of taxes on wines

(a) Persons liable for payment

The taxes on wine provided for in this subpart shall be paid—

(1) Bonded wine cellars

In the case of wines removed from any bonded wine cellar, by the proprietor of such bonded wine cellar; except that—

(A) in the case of any transfer of wine in bond as authorized under the provisions of section 5362(b), the liability for payment of the tax shall become the liability of the transferee from the time of removal of the wine from the transferor’s premises, and the transferor shall thereupon be relieved of such liability; and

(B) in the case of any wine withdrawn by a person other than such proprietor without payment of tax as authorized under the provisions of section 5362(c), the liability for payment of the tax shall become the liability of such person from the time of the removal of the wine from the bonded wine cellar, and such proprietor shall thereupon be relieved of such liability.

(2) Foreign wine

(3) Other wines

(b) Payment of tax

(Added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1332; amended Pub. L. 94–455, title XIX, § 1905(b)(2)(C), Oct. 4, 1976, 90 Stat. 1822; Pub. L. 96–39, title VIII, § 807(a)(8), July 26, 1979, 93 Stat. 281; Pub. L. 105–206, title VI, § 6014(b)(1), July 22, 1998, 112 Stat. 820.)

§ 5044. Refund of tax on wine

(a) General

In the case of any wine removed from a bonded wine cellar and returned to bond under section 5361—

(1) any tax imposed by section 5041 shall, if paid, be refunded or credited, without interest, to the proprietor of the bonded wine cellar to which such wine is delivered; or

(2) if any tax so imposed has not been paid, the person liable for the tax may be relieved of liability therefor,

under such regulations as the Secretary may prescribe. Such regulations may provide that claim for refund or credit under paragraph (1), or relief from liability under paragraph (2), may be made only with respect to minimum quantities specified in such regulations. The burden of proof in all such cases shall be on the applicant.

(b) Date of filing

(Added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1332; amended Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 105–34, title XIV, § 1416(a), (b)(2), Aug. 5, 1997, 111 Stat. 1048; Pub. L. 105–206, title VI, § 6014(b)(2), July 22, 1998, 112 Stat. 820.)

§ 5045. Cross references

For provisions relating to the establishment and operation of wineries, see subchapter F, and for penalties pertaining to wine, see subchapter J.

(Added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1333.)