I

107TH CONGRESS

1ST SESSION H. R. 984

To amend the Internal Revenue Code of 1986 to repeal the occupational

taxes relating to distilled spirits, wine, and beer.

IN THE HOUSE OF REPRESENTATIVES

MARCH 13, 2001

Mr. CAMP (for himself, Mr. MATSUI, Mr. FOLEY, Mr. TOWNS, Mr.

CHAMBLISS, Mr. SAM JOHNSON of Texas, Mr. MANZULLO, Mr. THOMPSON of California, Mr. MCINNIS, Mr. SESSIONS, Ms. DUNN, Mr. WATKINS, Mr. SHIMKUS, Mr. RANGEL, Mr. COLLINS, Mr. CRAMER, Mr. CANNON, Mr. LEWIS of Georgia, Mrs. THURMAN, Mr. REYNOLDS, Mr. AKIN,

Mr. RYAN of Wisconsin, and Mr. GRAHAM) 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 repeal

the occupational taxes relating to distilled spirits, wine,

and beer.

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

3 SECTION 1. REPEAL OF OCCUPATIONAL TAXES RELATING

4 TO DISTILLED SPIRITS, WINE, AND BEER.

5 (a) REPEAL OF OCCUPATIONAL TAXES.—

6 (1) IN GENERAL.—The following provisions of

7 part II of subchapter A of chapter 51 of the Internal
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1 Revenue Code of 1986 (relating to occupational

2 taxes) are hereby repealed:

3 (A) Subpart A (relating to proprietors of

4 distilled spirits plants, bonded wine cellars,

5 etc.).

6 (B) Subpart B (relating to brewer).

7 (C) Subpart D (relating to wholesale deal8 ers) (other than sections 5114 and 5116).

9 (D) Subpart E (relating to retail dealers)

10 (other than section 5124).

11 (E) Subpart G (relating to general provi12 sions) (other than sections 5142, 5143, 5145,

13 and 5146).

14 (2) NONBEVERAGE DOMESTIC DRAWBACK.—

15 Section 5131 of such Code is amended by striking

16 ‘‘, on payment of a special tax per annum,’’.

17 (3) INDUSTRIAL USE OF DISTILLED SPIRITS.—

18 Section 5276 of such Code is hereby repealed.

19 (b) CONFORMING AMENDMENTS.—

20 (1)(A) The heading for part II of subchapter A

21 of chapter 51 of such Code and the table of subparts

22 for such part are amended to read as follows:

23 ‘‘PART II—MISCELLANEOUS PROVISIONS

‘‘Subpart A. Manufacturers of stills.

‘‘Subpart B. Nonbeverage domestic drawback claimants.

‘‘Subpart C. Recordkeeping by dealers.

‘‘Subpart D. Other provisions.’’
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1 (B) The table of parts for such subchapter A

2 is amended by striking the item relating to part II

3 and inserting the following new item:

‘‘Part II. Miscellaneous provisions.’’

4 (2) Subpart C of part II of such subchapter

5 (relating to manufacturers of stills) is redesignated

6 as subpart A.

7 (3)(A) Subpart F of such part II (relating to

8 nonbeverage domestic drawback claimants) is redes9 ignated as subpart B and sections 5131 through

10 5134 are redesignated as sections 5111 through

11 5114, respectively.

12 (B) The table of sections for such subpart B,

13 as so redesignated, is amended—

14 (i) by redesignating the items relating to

15 sections 5131 through 5134 as relating to sec16 tions 5111 through 5114, respectively, and

17 (ii) by striking ‘‘and rate of tax’’ in the

18 item relating to section 5111, as so redesig19 nated.

20 (C) Section 5111 of such Code, as redesignated

21 by subparagraph (A), is amended—

22 (i) by striking ‘‘AND RATE OF TAX’’ in

23 the section heading,

24 (ii) by striking the subsection heading for

25 subsection (a), and
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1 (iii) by striking subsection (b).

2 (4) Part II of subchapter A of chapter 51 of

3 such Code is amended by adding after subpart B, as

4 redesignated by paragraph (3), the following new

5 subpart:

6 ‘‘Subpart C—Recordkeeping by Dealers

‘‘Sec. 5121. Recordkeeping by wholesale dealers.

‘‘Sec. 5122. Recordkeeping by retail dealers.

‘‘Sec. 5123. Preservation and inspection of records, and entry of

premises for inspection.’’

7 (5)(A) Section 5114 of such Code (relating to

8 records) is moved to subpart C of such part II and

9 inserted after the table of sections for such subpart.

10 (B) Section 5114 of such Code is amended—

11 (i) by striking the section heading and in12 serting the following new heading:

13 ‘‘SEC. 5121. RECORDKEEPING BY WHOLESALE DEALERS.’’,

14 and

15 (ii) by redesignating subsection (c) as sub16 section (d) and by inserting after subsection (b)

17 the following new subsection:

18 ‘‘(c) WHOLESALE DEALERS.—For purposes of this

19 part—

20 ‘‘(1) WHOLESALE DEALER IN LIQUORS.—The

21 term ‘wholesale dealer in liquors’ means any dealer

22 (other than a wholesale dealer in beer) who sells, or
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1 offers for sale, distilled spirits, wines, or beer, to an2 other dealer.

3 ‘‘(2) WHOLESALE DEALER IN BEER.—The term

4 ‘wholesale dealer in beer’ means any dealer who

5 sells, or offers for sale, beer, but not distilled spirits

6 or wines, to another dealer.

7 ‘‘(3) DEALER.—The term ‘dealer’ means any

8 person who sells, or offers for sale, any distilled spir9 its, wines, or beer.

10 ‘‘(4) PRESUMPTION IN CASE OF SALE OF 20

11 WINE GALLONS OR MORE.—The sale, or offer for

12 sale, of distilled spirits, wines, or beer, in quantities

13 of 20 wine gallons or more to the same person at

14 the same time, shall be presumptive evidence that

15 the person making such sale, or offer for sale, is en16 gaged in or carrying on the business of a wholesale

17 dealer in liquors or a wholesale dealer in beer, as the

18 case may be. Such presumption may be overcome by

19 evidence satisfactorily showing that such sale, or

20 offer for sale, was made to a person other than a

21 dealer.’’

22 (C) Paragraph (3) of section 5121(d) of such

23 Code, as so redesignated, is amended by striking

24 ‘‘section 5146’’ and inserting ‘‘section 5123’’.
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1 (6)(A) Section 5124 of such Code (relating to

2 records) is moved to subpart C of part II of sub3 chapter A of chapter 51 of such Code and inserted

4 after section 5121.

5 (B) Section 5124 of such Code is amended—

6 (i) by striking the section heading and in7 serting the following new heading:

8 ‘‘SEC. 5122. RECORDKEEPING BY RETAIL DEALERS.’’,

9 (ii) by striking ‘‘section 5146’’ in sub10 section (c) and inserting ‘‘section 5123’’, and

11 (iii) by redesignating subsection (c) as sub12 section (d) and inserting after subsection (b)

13 the following new subsection:

14 ‘‘(c) RETAIL DEALERS.—For purposes of this

15 section—

16 ‘‘(1) RETAIL DEALER IN LIQUORS.—The term

17 ‘retail dealer in liquors’ means any dealer (other

18 than a retail dealer in beer) who sells, or offers for

19 sale, distilled spirits, wines, or beer, to any person

20 other than a dealer.

21 ‘‘(2) RETAIL DEALER IN BEER.—The term ‘re22 tail dealer in beer’ means any dealer who sells, or of23 fers for sale, beer, but not distilled spirits or wines,

24 to any person other than a dealer.
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1 ‘‘(3) DEALER.—The term ‘dealer’ has the

2 meaning given such term by section 5121(c)(3).’’

3 (7) Section 5146 of such Code is moved to sub4 part C of part II of subchapter A of chapter 51 of

5 such Code, inserted after section 5122, and redesig6 nated as section 5123.

7 (8) Part II of subchapter A of chapter 51 of

8 such Code is amended by inserting after subpart C

9 the following new subpart:

10 ‘‘Subpart D—Other Provisions

‘‘Sec. 5131. Packaging distilled spirits for industrial uses.

‘‘Sec. 5132. Prohibited purchases by dealers.’’

11 (9) Section 5116 of such Code is moved to sub12 part D of part II of subchapter A of chapter 51 of

13 such Code, inserted after the table of sections, redes14 ignated as section 5131, and amended by inserting

15 ‘‘(as defined in section 5121(c))’’ after ‘‘dealer’’ in

16 subsection (a).

17 (10) Subpart D of part II of subchapter A of

18 chapter 51 of such Code is amended by adding at

19 the end thereof the following new section:

20 ‘‘SEC. 5132. PROHIBITED PURCHASES BY DEALERS.

21 ‘‘(a) IN GENERAL.—Except as provided in regula22 tions prescribed by the Secretary, it shall be unlawful for

23 a dealer to purchase distilled spirits from any person other
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1 than a wholesale dealer in liquors who is required to keep

2 the records prescribed by section 5121.

3 ‘‘(b) PENALTY AND FORFEITURE.—

‘‘For penalty and forfeiture provisions applicable

to violations of subsection (a), see sections 5687 and

7302.’’

4 (11) Subsection (b) of section 5002 of such

5 Code is amended—

6 (A) by striking ‘‘section 5112(a)’’ and in7 serting ‘‘section 5121(c)(3)’’,

8 (B) by striking ‘‘section 5112’’ and insert9 ing ‘‘section 5121(c)’’,

10 (C) by striking ‘‘section 5122’’ and insert11 ing ‘‘section 5122(c)’’.

12 (12) Subparagraph (A) of section 5010(c)(2) of

13 such Code is amended by striking ‘‘section 5134’’

14 and inserting ‘‘section 5114’’.

15 (13) Subsection (d) of section 5052 of such

16 Code is amended to read as follows:

17 ‘‘(d) BREWER.—For purposes of this chapter, the

18 term ‘brewer’ means any person who brews beer or pro19 duces beer for sale. Such term shall not include any person

20 who produces only beer exempt from tax under section

21 5053(e).’’

22 (14) The text of section 5182 of such Code is

23 amended to read as follows:
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1 ‘‘For provisions requiring recordkeeping by

2 wholesale liquor dealers, see section 5112, and by re3 tail liquor dealers, see section 5122.’’

4 (15) Subsection (b) of section 5402 of such

5 Code is amended by striking ‘‘section 5092’’ and in6 serting ‘‘section 5052(d)’’.

7 (16) Section 5671 of such Code is amended by

8 striking ‘‘or 5091’’.

9 (17)(A) Part V of subchapter J of chapter 51

10 of such Code is hereby repealed.

11 (B) The table of parts for such subchapter J is

12 amended by striking the item relating to part V.

13 (18)(A) Sections 5142, 5143, and 5145 of such

14 Code are moved to subchapter D of chapter 52 of

15 such Code, inserted after section 5731, redesignated

16 as sections 5732, 5733, and 5734, respectively, and

17 amended by striking ‘‘this part’’ each place it ap18 pears and inserting ‘‘this subchapter’’.

19 (B) Section 5732 of such Code, as redesignated

20 by subparagraph (A), is amended by striking ‘‘(ex21 cept the tax imposed by section 5131)’’ each place

22 it appears.

23 (C) Subsection (c) of section 5733 of such

24 Code, as redesignated by subparagraph (A), is
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1 amended by striking paragraph (2) and by redesig2 nating paragraph (3) as paragraph (2).

3 (D) The table of sections for subchapter D of

4 chapter 52 of such Code is amended by adding at

5 the end thereof the following:

‘‘Sec. 5732. Payment of tax.

‘‘Sec. 5733. Provisions relating to liability for occupational taxes.

‘‘Sec. 5734. Application of State laws.’’

6 (E) Section 5731 of such Code is amended by

7 striking subsection (c) and by redesignating sub8 section (d) as subsection (c).

9 (19) Subsection (c) of section 6071 of such

10 Code is amended by striking ‘‘section 5142’’ and in11 serting ‘‘section 5732’’.

12 (20) Paragraph (1) of section 7652(g) of such

13 Code is amended—

14 (A) by striking ‘‘subpart F’’ and inserting

15 ‘‘subpart B’’, and

16 (B) by striking ‘‘section 5131(a)’’ and in17 serting ‘‘section 5111(a)’’.

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

19 this section shall take effect on the date of the enactment

20 of this Act, but shall not apply to taxes imposed for peri21 ods before such date.

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