H.R. 5490 – Reading Mode

111th CONGRESS

2d Session

H. R. 5490

IN THE HOUSE OF REPRESENTATIVES

June 9, 2010

Ms. Ginny Brown-Waite of Florida 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 allow a credit against excise taxes with respect to distilled spirits and wine for certain distilled spirits or wine produced from domestic agricultural waste or byproducts.

Excise tax credit for certain distilled spirits produced from domestic agricultural waste or byproducts

(a)

In general

Subchapter B of chapter 65 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

6433.

Credit for certain distilled spirits produced from agricultural waste or byproducts

(a)

In general

There shall be allowed against the taxes imposed by chapter 51 an amount equal to the sum of the credits determined under subsections (b) and (c).

(b)

Credit for distilled spirits produced from domestic agricultural waste or byproducts

(1)

In general

For purposes of this section, the credit determined under this subsection is an amount equal to the product of—

(A)

10 percent of the rate in effect under section 5001(a), multiplied by

(B)

the number of proof gallons of rum produced in the United States by the taxpayer using domestic agricultural waste or domestic agricultural byproducts as the principal distilling source.

(2)

Rum

For purposes of this subsection, the term rum has the meaning given such term by section 7652(e)(3).

(3)

Credit available to producer

The credit determined under this subsection shall be allowed only to the producer of the rum described in paragraph (1)(B), without regard to whether the tax on such rum under section 5001(a) is paid by such producer or by any other person.

(4)

Value added requirement

Any proof gallon of rum shall in no event be treated as produced in the United States for purposes of this subsection unless the sum of—

(A)

the cost or value of the rum produced in the United States, plus

(B)

the direct costs of processing operations performed in the United States,

equals or exceeds 50 percent of the value of such rum as of the time of its sale at retail (determined without regard to the tax imposed by section 5001).

(c)

Credit for certain distilled spirits or wine produced from domestic citrus waste or byproducts

(1)

In general

For purposes of this section, the credit determined under this subsection is an amount equal to the product of—

(A)

the number of gallons of distilled spirits or wines which are produced in the United States by the taxpayer using domestic citrus waste or domestic citrus byproducts as the principal distilling or fermenting source, multiplied by

(B)

10 percent of the rate applicable to such distilled spirits or wine under section 5041(b).

(2)

Coordination with credit for small domestic producers

In the case of any wine to which paragraph (1)(A) and section 5041(c) both apply, the amount of the credit otherwise allowed under section 5041(c) with respect to such wine shall be reduced by the amount of the credit under this subsection.

(3)

Credit available to producer

The credit determined under this subsection shall be allowed only to the producer of the distilled spirits or wines described in paragraph (1)(A), without regard to whether the tax on such distilled spirits or wines under section 5041(a) is paid by such producer or by any other person.

(4)

Value added requirement

Any gallon of distilled spirits or wines shall in no event be treated as produced in the United States for purposes of this subsection unless the sum of—

(A)

the cost or value of the distilled spirits or wines produced in the United States, plus

(B)

the direct costs of processing operations performed in the United States,

equals or exceeds 50 percent of the value of such distilled spirits or wines as of the time of their sale at retail (determined without regard to the tax imposed by section 5041).

(b)

Clerical amendment

The table of sections for subchapter B of chapter 65 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:

Sec. 6433. Credit for certain distilled spirits produced from agricultural waste or byproducts.

(c)

Effective date

The amendments made by this section shall apply to distilled spirits and wine produced after the date of the enactment of this Act.