1. U.S. Code
  2. title 26
  3. subtitle E
  4. chapter 51
  5. subchapter F
  6. part II
  7. § 5370

Collapse to view only § 5370. Losses

§ 5361. Bonded wine cellar operations

In addition to the operations described in section 5351, the proprietor of a bonded wine cellar may, subject to regulations prescribed by the Secretary, on such premises receive taxpaid wine for return to bond, reconditioning, or destruction; prepare for market and store commercial fruit products and by-products not taxable as wines; produce or receive distilling material or vinegar stock; produce (with or without added wine spirits, and without added sugar) or receive on wine premises, subject to tax as wine but not for sale or consumption as beverage wine, (1) heavy bodied blending wines and Spanish-type blending sherries, and (2) other wine products made from natural wine for nonbeverage purposes; and such other operations as may be conducted in a manner that will not jeopardize the revenue or conflict with wine operations.

(Added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1380; amended Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 96–39, title VIII, § 807(a)(43), July 26, 1979, 93 Stat. 287; Pub. L. 105–34, title XIV, § 1416(b)(1), Aug. 5, 1997, 111 Stat. 1048.)

CITE AS: 26 USC 5361

§ 5362. Removals of wine from bonded wine cellars
(a) Withdrawals on determination of tax
(b) Transfers of wine between bonded premises
(1) In general
(2) Wine transferred to a distilled spirits plant may not be removed for consumption or sale as wine
Any wine transferred to the bonded premises of a distilled spirits plant—
(A) may be used in the manufacture of a distilled spirits product, and
(B) may not be removed from such bonded premises for consumption or sale as wine.
(3) Continued liability for tax
(4) Transfer in bond not treated as removal for consumption or sale
(5) Bonded premises
(c) Withdrawals of wine free of tax or without payment of tax
Wine on which the tax has not been paid or determined may, under such regulations and bonds as the Secretary may deem necessary to protect the revenue, be withdrawn from bonded wine cellars—
(1) without payment of tax for export by the proprietor or by any authorized exporter;
(2) without payment of tax for transfer to any foreign-trade zone;
(3) without payment of tax for use of certain vessels and aircraft as authorized by law;
(4) without payment of tax for transfer to any customs bonded warehouse;
(5) without payment of tax for use in the production of vinegar;
(6) without payment of tax for use in distillation in any distilled spirits plant authorized to produce distilled spirits;
(7) free of tax for experimental or research purposes by any scientific university, college of learning, or institution of scientific research;
(8) free of tax for use by or for the account of the proprietor or his agents for analysis or testing, organoleptic or otherwise; and
(9) free of tax for use by the United States or any agency thereof, and for use for analysis, testing, research, or experimentation by the governments of the several States and the District of Columbia or of any political subdivision thereof or by any agency of such governments. No bond shall be required of any such government or agency under this paragraph.
(d) Withdrawal free of tax of wine and wine products unfit for beverage use
(e) Withdrawal from customs bonded warehouses for use of foreign embassies, legations, etc.
(1) In general
(2) Withdrawal for domestic use
(3) Sale or unauthorized use prohibited
(Added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1380; amended Pub. L. 90–73, § 1(a), Aug. 29, 1967, 81 Stat. 175; Pub. L. 94–455, title XIX, §§ 1905(c)(4), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1823, 1834; Pub. L. 96–39, title VIII, § 807(a)(44), July 26, 1979, 93 Stat. 287; Pub. L. 96–601, § 2(a), (b), Dec. 24, 1980, 94 Stat. 3495.)

CITE AS: 26 USC 5362

§ 5363. Taxpaid wine bottling house operations

In addition to the operations described in section 5352, the proprietor of a taxpaid wine bottling house may, subject to regulations issued by the Secretary, on such premises mix wine of the same kind and taxable grade to facilitate handling; preserve, filter, or clarify wine; and conduct operations not involving wine where such operations will not jeopardize the revenue or conflict with wine operations.

(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; Pub. L. 96–39, title VIII, § 807(a)(45), July 26, 1979, 93 Stat. 287.)

CITE AS: 26 USC 5363

§ 5364. Wine imported in bulk

Natural wine (as defined in section 5381) imported or brought into the United States in bulk containers may, under such regulations as the Secretary may prescribe, be withdrawn from customs custody and transferred in such bulk containers to the premises of a bonded wine cellar without payment of the internal revenue tax imposed on such wine. The proprietor of a bonded wine cellar to which such wine is transferred shall become liable for the tax on the wine withdrawn from customs custody under this section upon release of the wine from customs custody, and the importer, or the person bringing such wine into the United States, shall thereupon be relieved of the liability for such tax.

(Added Pub. L. 105–34, title XIV, § 1422(a), Aug. 5, 1997, 111 Stat. 1050; amended Pub. L. 105–206, title VI, § 6014(b)(3), July 22, 1998, 112 Stat. 820.)

CITE AS: 26 USC 5364

§ 5365. Segregation of operations

The Secretary may require by regulations such segregation of operations within the premises, by partitions or otherwise, as may be necessary to prevent jeopardy to the revenue, to prevent confusion between untaxpaid wine operations and such other operations as are authorized in this subchapter, to prevent substitution with respect to the several methods of producing effervescent wines, and to prevent the commingling of standard wines with other than standard wines.

(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; Pub. L. 96–39, title VIII, § 807(a)(47), July 26, 1979, 93 Stat. 287.)

CITE AS: 26 USC 5365

§ 5366. Supervision

The Secretary may by regulations require that operations at a bonded wine cellar or taxpaid wine bottling house be supervised by an internal revenue officer where necessary for the protection of the revenue or for the proper enforcement of this subchapter.

(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.)

CITE AS: 26 USC 5366

§ 5367. Records

The proprietor of a bonded wine cellar or a tax-paid wine bottling house shall keep such rec­ords and file such returns, in such form and containing such information, as the Secretary may by regulations provide.

(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.)

CITE AS: 26 USC 5367

§ 5368. Gauging and marking
(a) Gauging and marking
(b) Marking
(Added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1381; amended Pub. L. 94–455, title XIX, §§ 1905(a)(20), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1820, 1834.)

CITE AS: 26 USC 5368

§ 5369. Inventories

Each proprietor of premises subject to the provisions of this subchapter shall take and report such inventories as the Secretary may by regulations prescribe.

(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.)

CITE AS: 26 USC 5369

§ 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
(2) Voluntary destruction
(b) Proof of loss
(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.)

CITE AS: 26 USC 5370

§ 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 indemnified or recompensed for the tax.

(Added Pub. L. 85–859, title II, § 201, Sept. 2, 1958, 72 Stat. 1382.)

CITE AS: 26 USC 5371

§ 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.)

CITE AS: 26 USC 5372

§ 5373. Wine spirits
(a) In general
The wine spirits authorized to be used in wine production shall be brandy or wine spirits produced in a distilled spirits plant (with or without 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 conditions as the Secretary may by regulations prescribe;
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 provide, at less than 140 degrees of proof (except that commercial brandy aged in wood for a period 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 concentrated 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 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 spirits in actual wine production but in violation of the requirements of this subchapter, the Secretary 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 Secretary, be withdrawn free of tax from the bonded premises of any distilled spirits plant, bonded wine cellar, or authorized experimental premises, for analysis or testing.
(c) Distillates containing aldehydes
(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.)

CITE AS: 26 USC 5373