II
109th CONGRESS
1st Session
S. 646
IN THE SENATE OF THE UNITED STATES
March 17, 2005
Mr. Bunning (for himself, Mrs. Lincoln, Mr. Lott, Mr. Bond, and Mr. Chambliss) introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to allow distilled spirits wholesalers a credit against income tax for their cost of carrying Federal excise taxes prior to the sale of the product bearing the tax.
Short title
This Act may be cited as the
Domestic Spirits Tax Equity Act of
2005
.
Income tax credit for distilled spirits wholesalers and for distilled spirits in control State bailment warehouses for costs of carrying Federal excise taxes on bottled distilled spirits
In general
Subpart A of part I of subchapter A of chapter 51 of the Internal Revenue Code of 1986 (relating to gallonage and occupational taxes) is amended by adding at the end the following new section:
Income tax credit for average cost of carrying excise tax
In general
For purposes of section 38, the amount of the distilled spirits credit for any taxable year is the amount equal to the product of—
in the case of—
any eligible wholesaler—
the number of cases of bottled distilled spirits—
which were bottled in the United States, and
which are purchased by such wholesaler during the taxable year directly from the bottler of such spirits, or
any person which is subject to section 5005 and which is not an eligible wholesaler, the number of cases of bottled distilled spirits which are stored in a warehouse operated by, or on behalf of, a State, or agency or political subdivision thereof, on which title has not passed on an unconditional sale basis, and
the average tax-financing cost per case for the most recent calendar year ending before the beginning of such taxable year.
Eligible wholesaler
For purposes of this section, the term eligible wholesaler means any person which holds a permit under the Federal Alcohol Administration Act as a wholesaler of distilled spirits which is not a State, or agency or political subdivision thereof.
Average Tax-Financing cost
In general
For purposes of this section, the average tax-financing cost per case for any calendar year is the amount of interest which would accrue at the deemed financing rate during a 60-day period on an amount equal to the deemed Federal excise tax per case.
Deemed financing rate
For purposes of paragraph (1), the deemed financing rate for any calendar year is the average of the corporate overpayment rates under paragraph (1) of section 6621(a) (determined without regard to the last sentence of such paragraph) for calendar quarters of such year.
Deemed Federal excise tax per case
For purposes of paragraph (1), the deemed Federal excise tax per case is $25.68.
Other definitions and special rules
For purposes of this section—
Case
The term case means 12 80-proof 750 milliliter bottles.
Number of cases in lot
The number of cases in any lot of distilled spirits shall be determined by dividing the number of liters in such lot by 9.
.
Conforming amendments
Subsection (b) of
section 38 of the Internal Revenue Code of 1986 is amended by striking
plus
at the end of paragraph (18), by striking the period at the
end of paragraph (19) and inserting , plus
, and by adding at the
end the following new paragraph:
the distilled spirits credit determined under section 5011(a).
.
The table of sections for subpart A of part I of subchapter A of chapter 51 of such Code is amended by adding at the end the following new item:
Sec. 5011. Income tax credit for average cost of carrying excise tax.
.
Effective date
The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.