HR 777
112th CONGRESS
1st Session
H. R. 777
To amend the Internal Revenue Code of 1986 to reduce the rate of
tax on distilled spirits produced by small producers.
IN THE HOUSE OF REPRESENTATIVES
February 17, 2011
Mr. HINCHEY introduced the following bill; which was referred to the Committee
on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to reduce the rate of
tax on distilled spirits produced by small producers.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Small Distillery Excise Tax Act of 2011'.
SEC. 2. REDUCED RATE OF TAX ON DISTILLED SPIRITS PRODUCED BY SMALL PRODUCERS.
(a) In General- Section 5001 of the Internal Revenue Code of 1986 (relating
to imposition, rate, and attachment of tax on distilled spirits) is amended
by redesignating subsection (c) as subsection (d) and by inserting after subsection
(b) the following new subsection:
`(c) Credit for Small Producers-
`(1) ALLOWANCE OF CREDIT- In the case of a small distilled spirits producer,
there shall be allowed as a credit against the tax imposed by this title
(other than chapters 2, 21, and 22) an amount equal to 80 percent of the
otherwise applicable tax on the first 65,000 of proof gallons of distilled
spirits produced by such producer during the calendar year at qualified
facilities in the United States.
`(2) SMALL DISTILLED SPIRITS PRODUCER- For purposes of this subsection,
the term `small distilled spirits producer' means any person who produces
not more than 100,000 proof gallons of distilled spirits during the calendar
year.
`(3) TIME FOR DETERMINING AND ALLOWING CREDIT- The credit allowable by paragraph
(1)--
`(A) shall be determined at the same time the tax is determined under
subsection (a), and
`(B) shall be allowable at the time the tax imposed by subsection (a)
is payable as if the credit allowable by this subsection constituted a
reduction in the rate of such tax.
`(4) CONTROLLED GROUPS- Rules similar to rules of section 5051(a)(2)(B)
shall apply for purposes of this subsection.
`(5) DENIAL OF DEDUCTION- Any deduction under subtitle A with respect to
any tax against which a credit is allowed under this subsection shall only
be for the amount of such tax as reduced by such credit.
`(6) CREDIT FOR TRANSFEREE IN BOND- If--
`(A) distilled spirits produced by any person would be eligible for any
credit under paragraph (1) if removed by such person during the calendar
year,
`(B) distilled spirits 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 distilled spirits were transferred
in bond and who is liable for the tax imposed by this section with respect
to such spirits, and
`(C) such producer holds title to such spirits 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 distilled
spirits removed by the transferee had been removed by the producer on that
date.
`(7) REGULATIONS- The Secretary may prescribe such regulations as may be
necessary to carry out the purposes of this subsection, including--
`(A) regulations to prevent the credit provided by this subsection from
benefiting any person who produces more than 100,000 proof gallons of
distilled spirits during a calendar year, and
`(B) regulations which reduce the credits allowable by sections 5010 and
5011 in order to properly reflect the reduced effective rate of tax on
distilled spirits under this subsection.'.
(b) Effective Date- The amendments made by this section shall apply to distilled
spirits produced in calendar years ending after the date of the enactment
of this Act, but shall not apply to distilled spirits on which tax is required
to be paid before the date of the enactment of this Act.
END
