I 

108TH CONGRESS 

1ST SESSION H. R. 786

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 

FEBRUARY 13, 2003

Mr. CAMP (for himself, Mr. MATSUI, Mr. AKIN, Mr. BACA, Mr. BACHUS, Mr. 

BLUNT, Mr. BOEHNER, Mr. BONILLA, Mrs. BONO, Mr. BURGESS, Mr. 

CANNON, Mrs. CAPITO, Mr. CARDOZA, Mr. CARSON of Oklahoma, Mr. 

COLE, Mr. CRAMER, Mr. CRANE, Mr. CUNNINGHAM, Mr. DOOLITTLE, 

Ms. DUNN, Mrs. EMERSON, Mr. ENGLISH, Mr. FOLEY, Mr. FOSSELLA, 

Mr. GORDON, Mr. GRAVES, Mr. GREEN of Wisconsin, Ms. HARRIS, Mr. 

HASTINGS of Washington, Mr. HAYWORTH, Mr. HINCHEY, Mr. HOEKSTRA, Mr. ISAKSON, Mr. JOHN, Mr. KELLER, Mr. LEWIS of Kentucky, 

Mr. MANZULLO, Mrs. MILLER of Michigan, Mr. NEY, Mr. OTTER, Mr. 

POMBO, Mr. QUINN, Mr. RADANOVICH, Mr. RANGEL, Mr. REYNOLDS, 

Mr. ROGERS of Michigan, Mr. SANDLIN, Mr. SCHROCK, Mr. SESSIONS, 

Mr. SHIMKUS, Mr. SHUSTER, Mr. SIMMONS, Mr. SIMPSON, Mr. SULLIVAN, Mr. TANCREDO, Mr. THOMPSON of California, Mr. TOWNS, Mr. 

WELLER, Mr. WILSON of South Carolina, and Mr. MCHUGH) 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,
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1 SECTION 1. REPEAL OF OCCUPATIONAL TAXES RELATING 

2 TO DISTILLED SPIRITS, WINE, AND BEER. 

3 (a) REPEAL OF OCCUPATIONAL TAXES.—

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

5 part II of subchapter A of chapter 51 of the Internal 

6 Revenue Code of 1986 (relating to occupational 

7 taxes) are hereby repealed: 

8 (A) Subpart A (relating to proprietors of 

9 distilled spirits plants, bonded wine cellars, 

10 etc.). 

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

12 (C) Subpart D (relating to wholesale deal13 ers) (other than sections 5114 and 5116). 

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

15 (other than section 5124). 

16 (E) Subpart G (relating to general provi17 sions) (other than sections 5142, 5143, 5145, 

18 and 5146). 

19 (2) NONBEVERAGE DOMESTIC DRAWBACK.—

20 Section 5131 of such Code is amended by striking 

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

22 (3) INDUSTRIAL USE OF DISTILLED SPIRITS.—

23 Section 5276 of such Code is hereby repealed. 

24 (b) CONFORMING AMENDMENTS.—
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1 (1)(A) The heading for part II of subchapter A 

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

3 for such part are amended to read as follows: 

4 ‘‘PART II—MISCELLANEOUS PROVISIONS

‘‘Subpart A. Manufacturers of stills. 

‘‘Subpart B. Nonbeverage domestic drawback claimants. 

‘‘Subpart C. Recordkeeping by dealers. 

‘‘Subpart D. Other provisions.’’

5 (B) The table of parts for such subchapter A 

6 is amended by striking the item relating to part II 

7 and inserting the following new item:

‘‘Part II. Miscellaneous provisions.’’

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

9 (relating to manufacturers of stills) is redesignated 

10 as subpart A. 

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

12 nonbeverage domestic drawback claimants) is redes13 ignated as subpart B and sections 5131 through 

14 5134 are redesignated as sections 5111 through 

15 5114, respectively. 

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

17 as so redesignated, is amended—

18 (i) by redesignating the items relating to 

19 sections 5131 through 5134 as relating to sec20 tions 5111 through 5114, respectively, and 
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1 (ii) by striking ‘‘and rate of tax’’ in the 

2 item relating to section 5111, as so redesig3 nated. 

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

5 by subparagraph (A), is amended—

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

7 the section heading, 

8 (ii) by striking the subsection heading for 

9 subsection (a), and 

10 (iii) by striking subsection (b). 

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

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

13 redesignated by paragraph (3), the following new 

14 subpart: 

15 ‘‘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.’’

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

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

18 inserted after the table of sections for such subpart. 

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

20 (i) by striking the section heading and in21 serting the following new heading: 

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

23 and 
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1 (ii) by redesignating subsection (c) as sub2 section (d) and by inserting after subsection (b) 

3 the following new subsection: 

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

5 part—

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

7 term ‘wholesale dealer in liquors’ means any dealer 

8 (other than a wholesale dealer in beer) who sells, or 

9 offers for sale, distilled spirits, wines, or beer, to an10 other dealer. 

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

12 ‘wholesale dealer in beer’ means any dealer who 

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

14 or wines, to another dealer. 

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

16 person who sells, or offers for sale, any distilled spir17 its, wines, or beer. 

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

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

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

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

22 the same time, shall be presumptive evidence that 

23 the person making such sale, or offer for sale, is en24 gaged in or carrying on the business of a wholesale 

25 dealer in liquors or a wholesale dealer in beer, as the 
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1 case may be. Such presumption may be overcome by 

2 evidence satisfactorily showing that such sale, or 

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

4 dealer.’’

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

6 Code, as so redesignated, is amended by striking 

7 ‘‘section 5146’’ and inserting ‘‘section 5123’’. 

8 (6)(A) Section 5124 of such Code (relating to 

9 records) is moved to subpart C of part II of sub10 chapter A of chapter 51 of such Code and inserted 

11 after section 5121. 

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

13 (i) by striking the section heading and in14 serting the following new heading: 

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

16 (ii) by striking ‘‘section 5146’’ in sub17 section (c) and inserting ‘‘section 5123’’, and 

18 (iii) by redesignating subsection (c) as sub19 section (d) and inserting after subsection (b) 

20 the following new subsection: 

21 ‘‘(c) RETAIL DEALERS.—For purposes of this sec22 tion—

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

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

25 than a retail dealer in beer) who sells, or offers for 
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1 sale, distilled spirits, wines, or beer, to any person 

2 other than a dealer. 

3 ‘‘(2) RETAIL DEALER IN BEER.—The term ‘re4 tail dealer in beer’ means any dealer who sells, or of5 fers for sale, beer, but not distilled spirits or wines, 

6 to any person other than a dealer. 

7 ‘‘(3) DEALER.—The term ‘dealer’ has the 

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

9 (7) Section 5146 of such Code is moved to sub10 part C of part II of subchapter A of chapter 51 of 

11 such Code, inserted after section 5122, and redesig12 nated as section 5123. 

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

14 such Code is amended by inserting after subpart C 

15 the following new subpart: 

16 ‘‘Subpart D—Other Provisions

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

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

17 (9) Section 5116 of such Code is moved to sub18 part D of part II of subchapter A of chapter 51 of 

19 such Code, inserted after the table of sections, redes20 ignated as section 5131, and amended by inserting 

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

22 subsection (a). 
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1 (10) Subpart D of part II of subchapter A of 

2 chapter 51 of such Code is amended by adding at 

3 the end thereof the following new section: 

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

5 ‘‘(a) IN GENERAL.—Except as provided in regula6 tions prescribed by the Secretary, it shall be unlawful for 

7 a dealer to purchase distilled spirits from any person other 

8 than a wholesale dealer in liquors who is required to keep 

9 the records prescribed by section 5121. 

10 ‘‘(b) PENALTY AND FORFEITURE.—

‘‘For penalty and forfeiture provisions applicable 

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

7302.’’ 

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

12 Code is amended—

13 (A) by striking ‘‘section 5112(a)’’ and in14 serting ‘‘section 5121(c)(3)’’, 

15 (B) by striking ‘‘section 5112’’ and insert16 ing ‘‘section 5121(c)’’, 

17 (C) by striking ‘‘section 5122’’ and insert18 ing ‘‘section 5122(c)’’. 

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

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

21 and inserting ‘‘section 5114’’. 

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

23 Code is amended to read as follows: 
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1 ‘‘(d) BREWER.—For purposes of this chapter, the 

2 term ‘brewer’ means any person who brews beer or pro3 duces beer for sale. Such term shall not include any person 

4 who produces only beer exempt from tax under section 

5 5053(e).’’

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

7 amended to read as follows: 

8 ‘‘For provisions requiring recordkeeping by 

9 wholesale liquor dealers, see section 5112, and by re10 tail liquor dealers, see section 5122.’’

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

12 Code is amended by striking ‘‘section 5092’’ and in13 serting ‘‘section 5052(d)’’. 

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

15 striking ‘‘or 5091’’. 

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

17 of such Code is hereby repealed. 

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

19 amended by striking the item relating to part V. 

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

21 Code are moved to subchapter D of chapter 52 of 

22 such Code, inserted after section 5731, redesignated 

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

24 amended by striking ‘‘this part’’ each place it ap25 pears and inserting ‘‘this subchapter’’. 
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1 (B) Section 5732 of such Code, as redesignated 

2 by subparagraph (A), is amended by striking ‘‘(ex3 cept the tax imposed by section 5131)’’ each place 

4 it appears. 

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

6 Code, as redesignated by subparagraph (A), is 

7 amended by striking paragraph (2) and by redesig8 nating paragraph (3) as paragraph (2). 

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

10 chapter 52 of such Code is amended by adding at 

11 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.’’

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

13 striking subsection (c) and by redesignating sub14 section (d) as subsection (c). 

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

16 Code is amended by striking ‘‘section 5142’’ and in17 serting ‘‘section 5732’’. 

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

19 Code is amended—

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

21 ‘‘subpart B’’, and 

22 (B) by striking ‘‘section 5131(a)’’ and in23 serting ‘‘section 5111(a)’’. 
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1 (c) EFFECTIVE DATE.—The amendments made by 

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

3 of this Act, but shall not apply to taxes imposed for peri4 ods before such date.

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