Distilled Spirits Tax Payment Simplification Act of 1995

Summary: Distilled Spirits Tax Payment Simplification Act of 1995 - Amends the Internal Revenue Code to modify or impose requirements regarding: (1) the transfer of distilled spirits between bonded premises and between importation and bonded premises; (2) operations as a bonded dealer conducted on the bonded premises of a distilled spirits plant; (3) establishment and operation of such a plant by a bonded dealer; (4) election to be treated as a bonded dealer; (5) the time at which the tax on distilled spirits is determined; (6) distilled spirits lost or destroyed in bond or returned to bonded premises; (7) the time for tax payment and payment by electronic transfer; and (8) application to a plant used by a bonded dealer of provisions relating to sales by proprietors of controlled premises.

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE.

    (a) Short Title.--This Act may be cited as the ``Distilled Spirits 
Tax Payment Simplification Act of 1995''.
    (b) Amendment of 1986 Code.--Except as otherwise expressly 
provided, whenever an amendment or repeal is expressed in terms of an 
amendment to, or repeal of, a section or other provision, the reference 
shall be considered to be made to a section or other provision of the 
Internal Revenue Code of 1986.

SEC. 2. TRANSFER OF DISTILLED SPIRITS BETWEEN BONDED PREMISES.

    (a) Section 5212 is amended to read as follows:

``SEC. 5212. TRANSFER OF DISTILLED SPIRITS BETWEEN BONDED PREMISES.

    ``Distilled spirits on which the internal revenue tax has not been 
paid as authorized by law may, under such regulations as the Secretary 
shall prescribe, be transferred in bond between bonded premises in any 
approved container. For the purposes of this chapter, except in the 
case of any transfer from a premise of a bonded dealer, the removal of 
distilled spirits for transfer in bond between bonded premises shall 
not be construed to be a withdrawal from bonded premises.''
    (b) The first sentence of section 5232 is amended to read as 
follows:
    ``Distilled spirits imported or brought into the United States, 
under such regulations as the Secretary shall prescribe, may be 
withdrawn from customs custody and transferred to the bonded premises 
of a distilled spirits plant without payment of the internal revenue 
tax imposed on such distilled spirits.''

SEC. 3. ESTABLISHMENT OF DISTILLED SPIRITS PLANT.

    Section 5171 is amended by--
            (1) striking from subsection (a) the phrase ``or 
        processor'' and inserting therein ``processor, or bonded 
        dealer;'' and
            (2) deleting from subsection (b) the ``or both.'' and 
        inserting thereafter ``as a bonded dealer, or as any 
        combination thereof.''

SEC. 4. DISTILLED SPIRITS PLANTS.

    Section 5178(a) is amended by adding the following new paragraph 
after paragraph (4) to read as follows:
            ``(5) Bonded dealer operations.--Any person establishing a 
        distilled spirits plant to conduct operations as a bonded 
        dealer may, as described in the application for registration--
                    ``(A) store distilled spirits in any approved 
                container on the bonded premises of such plant, and
                    ``(B) under such regulations as the Secretary shall 
                prescribe, store taxpaid distilled spirits, beer and 
                wine and such other beverages and items (products) not 
                subject to tax or regulation under this title on such 
                bonded premises.''

SEC. 5. BONDED DEALERS.

    (a) Section 5002(a) is amended by inserting after subsection 
(a)(15) the following new paragraphs:
    ``(16) Bonded Dealer.--The term `bonded dealer' means any person 
who has elected under section 5011 to be treated as a bonded dealer.
    ``(17) Control State Entity.--The term `control State entity' means 
a State or a political subdivision of a State in which only the State 
or a political subdivision thereof is allowed under applicable law to 
perform distilled spirit operations, or any instrumentality of such a 
State or political subdivision.''
    (b) Subpart A of part I of subchapter A of chapter 51 (relating to 
distilled spirits) is amended by adding at the end thereof the 
following new section:

``SEC. 5011. ELECTION TO BE TREATED AS BONDED DEALER.

    ``(a) Election.--Any wholesale dealer, or any control State entity, 
may elect, at such time and in such manner as the Secretary shall 
prescribe, to be treated as a bonded dealer if such wholesale dealer or 
entity sells bottled distilled spirits exclusively to a wholesale 
dealer in liquor, to an independent retail dealer subject to the 
limitation set forth in subsection (b), or to another bonded dealer.
    ``(b) Special Rules.--(1) Any person, other than a control State 
entity, who is a bonded dealer shall not be considered as selling to an 
independent retail dealer if the bonded dealer has a greater than 10 
percent ownership interest in, or control of the retail dealer; the 
retail dealer has a greater than 10 percent ownership interest in, or 
control of the bonded dealer; or where any person has a greater than 10 
percent ownership interest in, or control of both the bonded and retail 
dealer. For purposes of this subparagraph, ownership interest, not 
limited to stock ownership, shall be attributed to other persons in the 
manner prescribed by section 318.
    ``(2) In the case of any control State entity, subsection (a) shall 
be applied without regard to the word `independent'''.
    ``(c) Inventory Owned at Time of Election.--Any bottled distilled 
spirits in the inventory of any person electing under section 5011 to 
be treated as a bonded dealer shall, to the extent that the Federal 
excise tax previously has been determined and paid at the time the 
election becomes effective, not be subject to additional Federal excise 
tax on such spirits as a result of the election being in effect.
    ``(d) Revocation of Election.--The election made under this section 
may be revoked by the bonded dealer at any time, but once revoked shall 
not be made again without the consent of the Secretary. When the 
election is revoked, the bonded dealer shall immediately withdraw the 
distilled spirits on determination of tax in accordance with a tax 
payment procedure established by the Secretary.
    ``(e) Equitable Treatment of Bonded Dealers Using LIFO Inventory.--
The Secretary shall provide such rules as may be necessary to assure 
that taxpayers using the last-in first-out method of inventory 
valuation do not suffer a recapture of their LIFO reserve by reason of 
making the election under section 5011 or by reason of operating a 
bonded wine cellar as permitted by section 5351.
    ``(f) Approval of Application.--Any person submitting an 
application under section 5171(c) and electing under this section to be 
treated as a bonded dealer shall be entitled to approval of such 
application to the same extent they would be entitled to approval of an 
application for a basic permit under section 204(a)(2) of title 27 of 
the United States Code (the Federal Alcohol Administration Act) and 
shall be accorded notice and hearing as described in section 204(b) of 
such title 27.''
    (c) Conforming amendment.--The tables of sections of subpart A of 
part I of subchapter A of chapter 51 and the table of contents of 
subtitle E are amended by adding at the appropriate places:

                              ``Sec. 5011. Election To Be Treated As 
                                        Bonded Dealer.''
SEC. 6. DETERMINATION OF TAX.

    Section 5006 is amended by amending the first sentence of 
subsection (a)(1) to read as follows: ``Except as otherwise provided in 
this section, the tax on distilled spirits shall be determined when the 
spirits are transferred from a distilled spirits plant to a bonded 
dealer or are withdrawn from bond.''

SEC. 7. LOSS OR DESTRUCTION OF DISTILLED SPIRITS.

    (a) Subsections (a)(1)(A) and (a)(2) of section 5008 are amended by 
adding ``bonded dealer,'' immediately after ``distilled spirits 
plant''.
    (b) Subsection (c)(1) of section 5008 is amended by striking the 
words ``of a distilled spirits plant''.
    (c) Subsection (c)(2) of section 5008 is amended by striking the 
words ``distilled spirits plant'' and inserting in lieu thereof the 
words ``bonded premises''.

SEC. 8. TIME FOR COLLECTING TAX ON DISTILLED SPIRITS.

    (a) In section 5061(d) redesignate paragraph (5) as paragraph (6) 
and insert after paragraph (4) the following new paragraph:
            ``(5) Advanced payment of distilled spirits tax.--
        Notwithstanding the preceding provisions of this subsection, in 
        the case of any tax imposed by section 5001 with respect to a 
        bonded dealer who has an election in effect on September 20 of 
        any year, any payment of which would, but for this paragraph, 
        be due in October or November of that year, shall be made on 
        such September 20. No penalty or interest shall be imposed for 
        the period from such September 20 until the due date determined 
        without regard to this paragraph to the extent that tax due 
        exceeds the tax which would have been due with respect to 
        distilled spirits in the preceding October and November had the 
        election under section 5011 been in effect.''
    (b) Section 5061(e) is amended by inserting in paragraph (1) the 
words ``or any bonded dealer,'' immediately after ``respectively,''.

SEC. 9. EXEMPTION FROM OCCUPATIONAL TAX NOT APPLICABLE.

    Section 5113(a) is amended by adding immediately after the last 
sentence the following new sentence to read as follows: ``This 
exemption shall not apply to a proprietor of a distilled spirits plant 
whose premises are used for operations of a bonded dealer.''

SEC. 10. TECHNICAL, CONFORMING AND CLERICAL AMENDMENTS.

    (a) Technical and Conforming Amendments.--
            (1) Section 5003(3) is amended to delete the term 
        ``certain'' from the sentence.
            (2) Section 5214 is amended by redesignating subsection (b) 
        as (c) and inserting a new subsection (b) to read as follows:
    ``(b) Exception.--Subsections (a) (1), (2), (3), (5), (10), (11), 
and (12) of this section shall not apply to distilled spirits withdrawn 
from premises used for operations as a bonded dealer.''
            (3) Section 5215(a) is amended by inserting a period after 
        the word ``plant'' and striking the words ``but only for 
        destruction, denaturation, redistillation, reconditioning, or 
        rebottling:''.
            (4) Section 5362(b)(5) is amended by adding the following 
        sentence to read as follows: ``This term will not apply to 
        premises used for operations as a bonded dealer.''.
            (5) Section 5551(a) is amended by inserting after the term 
        ``processor'' at each place it appears the phrase ``bonded 
        dealer,''.
            (6) Section 5601(a) (2), (3), (4), (5), and (b) are amended 
        by inserting ``, bonded dealer'' immediately before the word 
        ``processor'' at each place it appears.
            (7) Section 5602 is amended by inserting ``, warehouseman, 
        processor, or bonded dealer'' immediately after the word 
        ``distiller''.
            (8) Section 5115, 5180, and 5681 are repealed.
    (b) Clerical Amendments.--
            (1) The table of sections for part II of subchapter A of 
        chapter 51 is amended by striking out the item relating to 
        section 5115.
            (2) The table of sections for subchapter B of chapter 51 is 
        amended by striking out the item relating to section 5180.
            (3) The table of sections for part IV of subchapter J of 
        chapter 51 is amended by striking out the item relating to 
        section 5681.

SEC. 11. EFFECTIVE DATE.

    (a) Except as provided in subsection (b) the provisions of this Act 
shall take effect one hundred and twenty days following enactment.
    (b)(1) The amendments made by section 3 of this Act shall take 
effect on the date of enactment of this Act, and
    (2) Each wholesale dealer who is required to file an application 
for registration under section 5171(c) whose operations are required to 
be covered by a basic permit under the Federal Alcohol Administration 
Act (27 U.S.C. 203 and 204) and who has received such basic permits as 
an importer, wholesaler, or as both, and has obtained a bond required 
under this subchapter before the close of the fourth month following 
enactment of this Act, shall be qualified to operate bonded premises 
until such time as the Secretary takes final action on the application. 
Any control State entity that has obtained a bond required under this 
subchapter shall be qualified to operate bonded premises until such 
time as the Secretary takes final action on the application for 
registration under section 5171(c).