I 

108TH CONGRESS 

1ST SESSION H. R. 2252

To amend the Internal Revenue Code of 1986 to increase the taxes on 

certain alcoholic beverages and to provide additional funds for alcohol 

abuse prevention programs. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 22, 2003

Ms. NORTON introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Energy 

and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL

To amend the Internal Revenue Code of 1986 to increase 

the taxes on certain alcoholic beverages and to provide 

additional funds for alcohol abuse prevention programs.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Alcohol Tax Equali5 zation Act of 2003’’. 
2

•HR 2252 IH 

1 SEC. 2. INCREASE IN EXCISE TAXES ON WINE AND BEER TO 

2 ALCOHOLIC EQUIVALENT OF TAXES ON DIS3 TILLED SPIRITS. 

4 (a) WINE.—

5 (1) WINES CONTAINING NOT MORE THAN 14

6 PERCENT ALCOHOL.—Paragraph (1) of section 

7 5041(b) of the Internal Revenue Code of 1986 (re8 lating to rates of tax on wines) is amended by strik9 ing ‘‘$1.07’’ and inserting ‘‘$2.97’’. 

10 (2) WINES CONTAINING MORE THAN 14 (BUT

11 NOT MORE THAN 21) PERCENT ALCOHOL.—Para12 graph (2) of section 5041(b) of such Code is amend13 ed by striking ‘‘$1.57’’ and inserting ‘‘$4.86’’. 

14 (3) WINES CONTAINING MORE THAN 21 (BUT

15 NOT MORE THAN 24) PERCENT ALCOHOL.—Para16 graph (3) of section 5041(b) of such Code is amend17 ed by striking ‘‘$3.15’’ and inserting ‘‘$6.08’’. 

18 (b) BEER.—

19 (1) IN GENERAL.—Paragraph (1) of section 

20 5051(a) of such Code (relating to imposition and 

21 rate of tax on beer) is amended by striking ‘‘$18’’ 

22 and inserting ‘‘$37.67’’. 

23 (2) SMALL BREWERS.—Subparagraph (A) of 

24 section 5051(a)(2) of such Code (relating to reduced 

25 rate for certain domestic production) is amended by 
3

•HR 2252 IH 

1 striking ‘‘$7’’ each place it appears and inserting 

2 ‘‘$26.67’’. 

3 (c) EFFECTIVE DATE.—The amendments made by 

4 this section shall take effect on January 1, 2004. 

5 (d) FLOOR STOCKS TAXES.—

6 (1) IMPOSITION OF TAX.—

7 (A) IN GENERAL.—In the case of any tax8 increased article—

9 (i) on which tax was determined 

10 under part I of subchapter A of chapter 51 

11 of the Internal Revenue Code of 1986 or 

12 section 7652 of such Code before January 

13 1, 2004, and 

14 (ii) which is held on such date for sale 

15 by any person, 

16 there shall be imposed a tax at the applicable 

17 rate on each such article. 

18 (B) APPLICABLE RATE.—For purposes of 

19 clause (i), the applicable rate is—

20 (i) $1.90 per wine gallon in the case 

21 of wine described in paragraph (1) of sec22 tion 5041(b) of such Code, 

23 (ii) $3.29 per wine gallon in the case 

24 of wine described in paragraph (2) of sec25 tion 5041(b) of such Code, 
4

•HR 2252 IH 

1 (iii) $2.93 per wine gallon in the case 

2 of wine described in paragraph (3) of sec3 tion 5041(b) of such Code, and 

4 (iv) $19.67 per barrel in the case of 

5 beer. 

6 In the case of a fraction of a gallon or barrel, 

7 the tax imposed by subparagraph (A) shall be 

8 the same fraction of the amount of such tax im9 posed on a whole gallon or barrel. 

10 (C) TAX-INCREASED ARTICLE.—For pur11 poses of this subsection, the term ‘‘tax-in12 creased article’’ means wine described in para13 graph (1), (2), or (3) of section 5041(b) of such 

14 Code and beer. 

15 (2) EXCEPTION FOR CERTAIN SMALL WHOLE16 SALE OR RETAIL DEALERS.—No tax shall be im17 posed by paragraph (1) on tax-increased articles 

18 held on January 1, 2004, by any dealer if—

19 (A) the aggregate liquid volume of tax-in20 creased articles held by such dealer on such 

21 date does not exceed 500 wine gallons, and 

22 (B) such dealer submits to the Secretary 

23 (at the time and in the manner required by the 

24 Secretary) such information as the Secretary 

25 shall require for purposes of this subparagraph.
5

•HR 2252 IH 

1 (3) LIABILITY FOR TAX AND METHOD OF PAY2 MENT.—

3 (A) LIABILITY FOR TAX.—A person hold4 ing any tax-increased article on January 1, 

5 2004, to which the tax imposed by paragraph 

6 (1) applies shall be liable for such tax. 

7 (B) METHOD OF PAYMENT.—The tax im8 posed by paragraph (1) shall be paid in such 

9 manner as the Secretary shall prescribe by reg10 ulations. 

11 (C) TIME FOR PAYMENT.—The tax im12 posed by paragraph (1) shall be paid on or be13 fore June 30, 2004. 

14 (4) CONTROLLED GROUPS.—

15 (A) CORPORATIONS.—In the case of a con16 trolled group of corporations, the 500 wine gal17 lon amount specified in paragraph (2) shall be 

18 apportioned among the dealers who are compo19 nent members of such group in such manner as 

20 the Secretary shall by regulations prescribe. 

21 For purposes of the preceding sentence, the 

22 term ‘‘controlled group of corporations’’ has the 

23 meaning given to such term by subsection (a) 

24 of section 1563 of such Code; except that for 

25 such purposes the phrase ‘‘more than 50 per-
6

•HR 2252 IH 

1 cent’’ shall be substituted for the phrase ‘‘at 

2 least 80 percent’’ each place it appears in such 

3 subsection. 

4 (B) NONINCORPORATED DEALERS UNDER

5 COMMON CONTROL.—Under regulations pre6 scribed by the Secretary, principles similar to 

7 the principles of subparagraph (A) shall apply 

8 to a group of dealers under common control 

9 where 1 or more of such dealers is not a cor10 poration. 

11 (5) OTHER LAWS APPLICABLE.—

12 (A) IN GENERAL.—All provisions of law, 

13 including penalties, applicable to the com14 parable excise tax with respect to any tax-in15 creased article shall, insofar as applicable and 

16 not inconsistent with the provisions of this sec17 tion, apply to the floor stocks taxes imposed by 

18 paragraph (1) to the same extent as if such 

19 taxes were imposed by the comparable excise 

20 tax. 

21 (B) COMPARABLE EXCISE TAX.—For pur22 poses of subparagraph (A), the term ‘‘com23 parable excise tax’’ means—

24 (i) the tax imposed by section 5041 of 

25 such Code in the case of wine, and 
7

•HR 2252 IH 

1 (ii) the tax imposed by section 5051 

2 of such Code in the case of beer. 

3 (6) DEFINITIONS.—For purposes of this sub4 section—

5 (A) IN GENERAL.—Terms used in this 

6 paragraph which are also used in subchapter A 

7 of chapter 51 of such Code shall have the re8 spective meanings such terms have in such sub9 chapter. 

10 (B) PERSON.—The term ‘‘person’’ includes 

11 any State or political subdivision thereof, or any 

12 agency or instrumentality of a State or political 

13 subdivision thereof. 

14 (C) SECRETARY.—The term ‘‘Secretary’’ 

15 means the Secretary of the Treasury or his del16 egate. 

17 SEC. 3. INDEXATION OF TAX RATES APPLICABLE TO ALCO18 HOLIC BEVERAGES. 

19 (a) GENERAL RULE.—Subpart E of part I of sub20 chapter A of chapter 51 of the Internal Revenue Code of 

21 1986 is amended by inserting before section 5061 the fol22 lowing new section:
8

•HR 2252 IH 

1 ‘‘SEC. 5060. INDEXATION OF RATES. 

2 ‘‘(a) GENERAL RULE.—Effective during each cal3 endar year after 2004, each tax rate set forth in sub4 section (b) shall be increased by an amount equal to—

5 ‘‘(1) such rate as in effect without regard to 

6 this section, multiplied by 

7 ‘‘(2) the cost-of-living adjustment for such cal8 endar year determined under section 1(f)(3) by sub9 stituting ‘calendar year 2003’ for ‘calendar year 

10 1992’ in subparagraph (B) thereof. 

11 Any increase determined under the preceding sentence 

12 shall be rounded to the nearest multiple of 1 cent. 

13 ‘‘(b) TAX RATES.—The tax rates set forth in this 

14 subsection are the rates contained in the following provi15 sions: 

16 ‘‘(1) Paragraph (1) of section 5001(a). 

17 ‘‘(2) Paragraphs (1), (2), (3), (4), and (5) of 

18 section 5041(b). 

19 ‘‘(3) Paragraphs (1) and (2)(A) of section 

20 5051(a).’’

21 (b) TECHNICAL AMENDMENT.—Paragraphs (1)(A) 

22 and (2) of section 5010(a) are each amended by striking 

23 ‘‘$13.50’’ and inserting ‘‘the rate in effect under section 

24 5001(a)(1)’’. 

25 (c) CLERICAL AMENDMENT.—The table of sections 

26 for subpart E of part I of subchapter A of chapter 51 
9

•HR 2252 IH 

1 of such Code is amended by inserting before the item re2 lating to section 5061 the following new item:

‘‘Sec. 5060. Indexation of rates.’’

3 SEC. 4. SUBSTANCE ABUSE PREVENTION TRUST FUND. 

4 (a) GENERAL RULE.—Subchapter A of chapter 98 of 

5 the Internal Revenue Code of 1986 (relating to establish6 ment of trust funds) is amended by adding at the end the 

7 following new section: 

8 ‘‘SEC. 9511. SUBSTANCE ABUSE PREVENTION TRUST FUND. 

9 ‘‘(a) CREATION OF TRUST FUND.—There is estab10 lished in the Treasury of the United States a trust fund 

11 to be known as the ‘Substance Abuse Prevention Trust 

12 Fund’, consisting of such amounts as may be appropriated 

13 or credited to such Trust Fund as provided in this section 

14 or section 9602(b). 

15 ‘‘(b) TRANSFERS TO TRUST FUND.—There are here16 by appropriated to the Substance Abuse Prevention Trust 

17 Fund amounts equivalent to the additional taxes received 

18 in the Treasury under chapter 51 by reason of the amend19 ments made by sections 2 and 3 of the Alcohol Tax 

20 Equalization Act of 2003 and the additional taxes received 

21 in the Treasury by reason of section 2(d) of such Act. 

22 ‘‘(c) EXPENDITURES FROM TRUST FUND.—Amounts 

23 in the Substance Abuse Prevention Trust Fund shall be 

24 available, as provided in appropriation Acts, for appropria25 tion to—
10

•HR 2252 IH 

1 ‘‘(1) the Substance Abuse and Mental Health 

2 Services Administration, and 

3 ‘‘(2) the National Highway Traffic Safety Ad4 ministration, 

5 for alcohol abuse prevention programs.’’

6 (b) CLERICAL AMENDMENT.—The table of sections 

7 for subchapter A of chapter 98 is amended by adding at 

8 the end the following new item:

‘‘Sec. 9511. Substance abuse prevention trust fund.’’

Æ