27 C.F.R. Subpart D—Tax On Imported Distilled Spirits, Wines, and Beer
Title 27 - Alcohol, Tobacco Products and Firearms
(a) A tax is imposed on all distilled spirits in customs bonded warehouses or imported into the United States at the rate prescribed by 26 U.S.C. 5001 on each proof gallon and a proportionate tax at a like rate on all fractional parts of each proof gallon. All products of distillation, by whatever name known, which contain distilled spirits, are considered to be distilled spirits and are taxed as such. The tax will be determined at the time of importation, or, if entered into bond, at the time of withdrawal therefrom. (b) A credit against the tax imposed on distilled spirits by 26 U.S.C. 5001 is allowable under 26 U.S.C. 5010 on each proof gallon of alcohol derived from eligible wine or from eligible flavors which do not exceed 2 (c) Where credit against the tax is desired, the person liable for the tax shall establish an effective tax rate in accordance with §27.41. The effective tax rate established will be applied to each entry. (Sec. 201, Pub. L. 85–859, 72 Stat. 1314, as amended (26 U.S.C. 5001); Sec. 201, Pub. L. 85–859, 72 Stat. 1356, as amended (26 U.S.C. 5201); Sec. 6, Pub. L. 96–598, 94 Stat. 3488, as amended (26 U.S.C. 5010)) [T.D. ATF–297, 55 FR 18069, Apr. 30, 1990] (a) The proprietor shall compute the effective tax rate for distilled spirits containing eligible wine or eligible flavors as the ratio of the numerator and denominator as follows: (1) The numerator will be the sum of: (i) The proof gallons of all distilled spirits used in the product (exclusive of distilled spirits derived from eligible flavors), multiplied by the tax rate prescribed by 26 U.S.C. 5001; (ii) The wine gallons of each eligible wine used in the product, multiplied by the tax rate prescribed by 26 U.S.C. 5041(b)(1), (2), or (3), as applicable; and (iii) The proof gallons of all distilled spirits derived from eligible flavors used in the product, multiplied by the tax rate prescribed by 26 U.S.C. 5001, but only to the extent that such distilled spirits exceed 2 (2) The denominator will be the sum of: (i) The proof gallons of all distilled spirits used in the product, including distilled spirits derived from eligible flavors; and (ii) The wine gallons of each eligible wine used in the product, multiplied by twice the percentage of alcohol by volume of each, divided by 100. (b) In determining the effective tax rate, quantities of distilled spirits, eligible wine, and eligible flavors will be expressed to the nearest tenth of a proof gallon. The effective tax rate may be rounded to as many decimal places as the proprietor deems appropriate, provided that, such rate is expressed no less exactly than the rate rounded to the nearest whole cent, and the effective tax rates for all products will be consistently expressed to the same number of decimal places. In such case, if the number is less than five it will be dropped; if it is five or over, a unit will be added. (c) The following is an example of the use of the formula. 1 Proof gallons by which distilled spirits derived from eligible flavors exceed 2 (Sec. 6, Pub. L. 96–598, 94 Stat. 3488, as amended (26 U.S.C. 5010)) [T.D. ATF–297, 55 FR 18069, Apr. 30, 1990, as amended by T.D. ATF–307, 55 FR 52742, Dec. 21, 1990. Redesignated by T.D. ATF–474, 67 FR 11232, Mar. 13, 2002] All wines (including imitation, substandard, or artificial wine, and compounds sold as wine) having not in excess of 24 percent of alcohol by volume, in customs bonded warehouse or imported into the United States are subject to an internal revenue tax at the rates prescribed by law; such tax to be determined at the time of removal from customs custody for consumption or sale. The tax is imposed on each wine gallon and at a like rate on fractional parts of a wine gallon. Fractions of less than one-tenth gallon shall be converted to the nearest one-tenth gallon, and five-hundredths gallon shall be converted to the next full one-tenth gallon. All wines containing more than 24 percent of alcohol by volume shall be classed as distilled spirits and shall be taxed accordingly. (72 Stat. 1331, as amended; 26 U.S.C. 5041) [T.D. 6644, 28 FR 3165, Apr. 2, 1963. Redesignated at 40 FR 16835, Apr. 15, 1975] Still wines may contain not more than 0.392 gram of carbon dioxide per 100 milliliters of wine; except that a tolerance to this maximum limitation, not to exceed 0.009 gram of carbon dioxide per 100 milliliters of wine, will be allowed where the amount of carbon dioxide in excess of 0.392 gram per 100 milliliters of wine was due to mechanical variations which could not be completely controlled under good commercial practices. Such tolerance will not be allowed where it is found that the limitation of 0.392 gram of carbon dioxide per 100 milliliters of wine is continuously or intentionally exceeded. [T.D. ATF–13, 40 FR 4419, Jan. 30, 1975. Redesignated at 40 FR 16835, Apr. 15, 1975] A tax is imposed by 26 U.S.C. 5001 on all liqueurs, cordials, and similar compounds, containing distilled spirits, in a customs bonded warehouse or imported into the United States at the rate prescribed in such section on each proof gallon, and a proportionate tax at a like rate on all fractional parts of such proof gallon. The tax shall be determined at the time of importation, or, if entered into bond, at the time of withdrawal therefrom. Fortified or unfortified wines, containing not over 24 percent alcohol by volume, to which sweetening or flavoring materials, but no distilled spirits, have been added are not classified as liqueurs, cordials, or similar compounds, but are considered to be flavored wines only and are subject to internal revenue tax at the rates applicable to wines. (Sec. 201, Pub. L. 85–859, 72 Stat. 1314, as amended, 1331, as amended (26 U.S.C. 5001, 5041)) [T.D. ATF–62, 44 FR 71718, Dec. 11, 1979] Compounds and preparations, other than those specified in §27.43 containing distilled spirits, which are fit for beverage purposes, in customs bonded warehouse or imported into the United States are subject to internal revenue tax at the rates applicable to distilled spirits. Compounds and preparations, containing fortified or unfortified wine, but no distilled spirits, which are fit for beverage purposes and which are sold as wine, are subject to internal revenue tax at the rates applicable to wines. (68A Stat. 595, as amended, 609, as amended; 26 U.S.C. 5001, 5041) A tax is imposed by 26 U.S.C. 5051, on all beer imported into the United States, at the rate prescribed in such section, for every barrel containing not more than 31 gallons, and at a like rate for any other quantity or for fractional parts of a barrel. The tax on beer shall be determined at the time of importation, or, if entered into customs custody, at the time of removal from such custody. (Sec. 201, Pub. L. 85–859, 72 Stat. 1333, as amended, 1334, as amended (26 U.S.C. 5051, 5054)) [T.D. 6644, 28 FR 3165, Apr. 2, 1963. Redesignated at 40 FR 16835, Apr. 15, 1975, and amended by T.D. ATF–48, 44 FR 55853, Sept. 28, 1979] The tax on imported beer shall be computed on the basis of the actual quantity in a container, at the rate prescribed by law. (72 Stat. 1333, as amended; 26 U.S.C. 5051) [T.D. 6644, 28 FR 3165. Apr. 2, 1963. Redesignated at 40 FR 16835, Apr. 15, 1975] Internal revenue taxes payable on imported distilled spirits, including perfumes containing distilled spirits, and on wines and beer, are collected, accounted for, and deposited as internal revenue collections by directors of customs in accordance with customs requirements: Provided, That the taxes on distilled spirits withdrawn from customs custody without payment of tax under the provisions of subpart L and thereafter withdrawn from bonded premises of a distilled spirits plant subject to tax shall be collected and paid under the provisions of part 19 of this chapter. (72 Stat. 1314, 1366; 26 U.S.C. 5001, 5232) [20 FR 3561, May 21, 1955, as amended by T.D. 6477, 25 FR 6204, July 1, 1960; T.D. 7006, 34 FR 2250, Feb. 15, 1969. Redesignated at 40 FR 16835, Apr. 15, 1975] Editorial Note: For (a) Each importer who was liable, during a calendar year, for a gross amount equal to or exceeding five million dollars in distilled spirits taxes combining tax liabilities incurred under this part and parts 19 and 26 of this chapter, a gross amount equal to or exceeding five million dollars in wine taxes combining tax liabilities incurred under this part and parts 24 and 26 of this chapter, or a gross amount equal to or exceeding five million dollars in beer taxes combining tax liabilities incurred under this part and parts 25 and 26 of this chapter, shall use a commercial bank in making payment by electronic fund transfer (EFT), as defined in paragraph (c) of this section, of such taxes during the succeeding calendar year. Payment of such taxes by cash, check, or money order is not authorized for an importer who is required, by this section, to make remittances by EFT. For purposes of this section, the dollar amount of tax liability is to be summarized separately for distilled spirits taxes, wine taxes, or beer taxes, and is defined as the gross tax liability on all taxable withdrawals from premises in the United States and importations (including products of the same tax class brought into the United States from Puerto Rico or the Virgin Islands) during the calendar year, without regard to any drawbacks, credits, or refunds, for all premises from which such activities are conducted by the taxpayer. (b) For the purposes of this section, a taxpayer includes a controlled group of corporations, as defined in 26 U.S.C. 1563, and implementing regulations in 26 CFR 1.1563–1 through 1.1563–4, except that the words “at least 80 percent” shall be replaced by the words “more than 50 percent” in each place it appears in subsection (a) of 26 U.S.C. 1563, as well as in the implementing regulations. Also, the rules for a “controlled group of corporations” apply in a similar fashion to groups which include partnerships and/or sole proprietorships. If one entity maintains more than 50% control over a group consisting of corporations and one, or more, partnerships and/or sole proprietorships, all of the members of the controlled group are one taxpayer for the purpose of determining who is required to make remittances by EFT. (c) Electronic fund transfer or EFT means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, or computer of magnetic tape, so as to order, instruct, or authorize a financial institution to either debit or credit an account, in accordance with procedures established by the U.S. Customs Service. (d) An importer who is required by this section to make remittances by EFT shall make the EFT remittance in accordance with the requirements of the U.S. Customs Service. (Act of August 16, 1954, 68A Stat. 775, as amended (26 U.S.C. 6302); Sec. 201, Pub. L. 85–859, 72 Stat. 1335, as amended (26 U.S.C. 5061)) [T.D. ATF–245, 52 FR 533, Jan. 7, 1987, as amended by T.D. ATF–459, 66 FR 38550, July 25, 2001] Samples of distilled spirits, beer, and wine, to be used in the United States by persons importing alcoholic beverages in commercial quantities, are, subject to the limitations in this section, exempt from the payment of any internal revenue tax imposed on, or by reason of, importation. This exemption applies only to samples to be used for soliciting orders for products of foreign countries. In no case shall this exemption apply to more than one sample of each alcoholic beverage product admitted during any calendar quarter for the use of each such person. No sample of beer shall contain more than 8 ounces, no sample of wine shall contain more than 4 ounces, and no sample of distilled spirits shall contain more than 2 ounces. (76 Stat. 72; 19 U.S.C. 1202) [T.D. 6300, 23 FR 5168, July 8, 1958; T.D. ATF–2, 37 FR 22740, Oct. 21, 1972. Redesignated at 40 FR 16835, Apr. 15, 1975]
Title 27: Alcohol, Tobacco and Firearms
PART 27—IMPORTATION OF DISTILLED SPIRITS, WINES, AND BEER
Subpart D—Tax On Imported Distilled Spirits, Wines, and Beer
Distilled Spirits
§ 27.40 Distilled spirits.
§ 27.41 Computation of effective tax rate.
BATCH RECORD -------------------------------------------------Distilled spirits 2249.1 proof gallons.Eligible wine 2265.0 wine gallons. (14% alcohol by volume)Eligible wine 1020.0 wine gallons. (19% alcohol by volume)Eligible flavors 100.9 proof gallons.
(Approved by the Office of Management and Budget under control number 1512–0352)
Wines
§ 27.42 Wines.
§ 27.42a Still wines containing carbon dioxide.
Liqueurs, Cordials, and Other Compounds and Preparations
§ 27.43 Liqueurs, cordials, and similar compounds.
§ 27.44 Other compounds and preparations.
Beer
§ 27.45 Rate of tax.
§ 27.46 Computation of tax.
Collection of Internal Revenue Taxes
§ 27.48 Imported distilled spirits, wines, and beer.
§ 27.48a Payment of tax by electronic fund transfer.
Exemption of Certain Samples From Internal Revenue Taxes
§ 27.49 Commercial samples of alcoholic beverages.
