H.R. 1126 – Aged Distilled Spirits Competitiveness Act

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Updated April 15, 2026 at 12:51 PM UTC

The Aged Distilled Spirits Competitiveness Act changes how the tax code treats the aging of distilled spirits. It removes the aging period from the definition of a product’s “production period” when calculating capitalized interest costs. This benefits distilleries by allowing them to exclude aging time from interest capitalization, potentially lowering their tax burden.

Key Provisions

Amends IRC §263A(f) to add a new paragraph stating that the aging period for distilled spirits is not part of the production period for interest capitalization, except for spirits unfit for beverage use.
Revises the related paragraph to reference the new exemption when determining the end of the production period.
Specifies that the changes apply to interest costs incurred in taxable years beginning on or after the law’s enactment date.

Legislative Activity

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1 earlier action

HouseIntro Referral Latest Action

Referred to the House Committee on Ways and Means.

Ways and Means Committee

February 16, 2017

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HouseIntro Referral

Introduced in House

February 16, 2017

HouseIntro Referral

Referred to the House Committee on Ways and Means.

Ways and Means Committee

February 16, 2017

Bill Text

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Introduced in HouseIssued February 16, 2017

I

115th CONGRESS

1st Session

H. R. 1126

IN THE HOUSE OF REPRESENTATIVES

February 16, 2017

Mr. Barr (for himself, Mr. Guthrie, Mr. Comer, Mr. Massie, and Mr. Rogers of Kentucky) introduced the following bill; which was referred to the Committee on Ways and Means

A BILL

To exempt the aging process of distilled spirits from the production period for purposes of capitalization of interest costs.

1.

Short title

This Act may be cited as the Aged Distilled Spirits Competitiveness Act.

2.

Production period of distilled spirits

(a)

In general

Section 263A(f) of the Internal Revenue Code of 1986 is amended—

(1)

by redesignating paragraph (4) as paragraph (5), and

(2)

by inserting after paragraph (3) the following new paragraph:

(4)

Exemption for aging process of distilled spirits

For purposes of this subsection, the production period shall not include the aging period for distilled spirits (as described in section 5002(a)(8)), except such spirits that are unfit for use for beverage purposes.

.

(b)

Conforming amendment

Paragraph (5)(B)(ii) of section 263A(f) of the Internal Revenue Code of 1986, as redesignated by this section, is amended by inserting except as provided in paragraph (4), before ending on the date.

(c)

Effective date

The amendments made by this section shall apply to interest costs paid or incurred in taxable years beginning on or after the date of the enactment of this Act.