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103D CONGRESS

1ST SESSION H. R. 1928

To amend the Internal Revenue Code of 1986 to repeal the ‘‘luxury tax’’

on beer, enacted in the Omnibus Budget Reconciliation Act of 1990,

which doubled previous excise levels.

IN THE HOUSE OF REPRESENTATIVES

APRIL 29, 1993

Mr. COX 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 ‘‘luxury tax’’ on beer, enacted in the Omnibus

Budget Reconciliation Act of 1990, which doubled previous excise levels.

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

3 SECTION 1. FINDINGS.

4 The Congress finds the following:

5 (1) The 1990 Omnibus Budget Reconciliation

6 Act, which contained several so-called ‘‘luxury

7 taxes’’, increased the Federal excise tax on beer by

8 100 percent, to $18 per barrel. As a result, as much
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1 as 20 percent of the retail price of beer is now Fed2 eral tax; and total taxes now account for nearly 75

3 cents on the retail price of every 6-pack of beer.

4 (2) Middle and lower-income Americans, who

5 comprise the vast majority of our Nation’s

6 80,000,000 beer drinkers, cannot afford this tax on

7 one of their few ‘‘luxuries’’. As a result of this re8 gressive tax increase, beer is now taxed at 3 times

9 the rate of most other consumer products. Those

10 who would presume to indulge in the ‘‘luxury’’ of

11 purchasing beer are now among the most heavily

12 taxed people in our society.

13 (3) The 100 percent increase in the Federal

14 beer tax—this new, so-called ‘‘luxury tax’’—has de15 stroyed 31,000 jobs. It has, however, succeeded in

16 preventing people from enjoying this ‘‘luxury’’: total

17 beer sales have suffered the worst decline in 30

18 years.

19 (4) As a result of the ‘‘luxury tax’’ on beer,

20 $463,000,000 in wages has been lost in the brewing,

21 wholesaling, and retailing industries. In addition, di22 rect purchases of products needed to make beer, in23 cluding agricultural products, has fallen by

24 $207,000,000.
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1 (5) The 100 percent increase in the Federal

2 beer tax has not, unfortunately, resulted in a dou3 bling of Federal revenues. To the contrary: the de4 cline in demand, the resultant loss of jobs, and the

5 reduction of direct purchases has cost Federal and

6 State governments hundreds of millions of dollars in

7 lost tax revenues. The ‘‘luxury tax’’ on beer has cost

8 millions more in increased outlays for unemployment

9 compensation and other social services to help those

10 who were put out of work by this ill-conceived tax

11 increase.

12 (6) Because of the regressive nature of the

13 ‘‘luxury tax’’ on beer, its negative impact on the

14 economy, and its unreliability as a source of Federal

15 income, this ‘‘luxury tax’’ of 1990 should be re16 pealed.

17 SEC. 2. REPEAL OF ‘‘LUXURY TAX’’ ON BEER.

18 (a) IN GENERAL.—Paragraph (1) of section 5051(a)

19 of the Internal Revenue Code of 1986 (relating to imposi20 tion and rate of tax on beer) is amended by striking ‘‘$18’’

21 and inserting ‘‘$9’’.

22 (b) EFFECTIVE DATE.—The amendment made by

23 subsection (a) shall take effect on the date of the enact24 ment of this Act.

25 (c) FLOOR STOCKS REFUNDS.—
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1 (1) IN GENERAL.—In the case of any beer—

2 (A) on which tax was determined before

3 the date of the enactment of this Act, and

4 (B) which is held on such date for sale by

5 any dealer,

6 there shall be credited or refunded (without interest)

7 to the brewer or importer an amount equal to the

8 decreased tax (if any) with respect to such beer.

9 (2) DECREASED TAX.—For purposes of para10 graph (1), the term ‘‘decreased tax’’ means, with re11 spect to any beer, the excess of—

12 (A) the tax imposed by section 5051 of

13 such Code with respect to such beer (to the ex14 tent a credit or refund of such tax is not allow15 able without regard to this subsection), over

16 (B) the amount of tax which would be im17 posed by section 5051 of such Code with re18 spect to such beer were such tax determined on

19 the date of the enactment of this Act.

20 (3) TIME FOR FILING CLAIM.—Credit or refund

21 shall be allowed or made under this subsection only

22 if claim therefor is filed with the Secretary of the

23 Treasury or his delegate on or before the date which

24 is 6 months after the date of the enactment of this

25 Act.
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1 (4) HELD BY DEALER.—For purposes of this

2 subsection, beer shall be treated as held by a dealer

3 if title thereto has passed to such dealer (whether or

4 not delivery to him has been made), and if for pur5 poses of consumption, title to such beer or posses6 sion thereof has not at any time been transferred to

7 any person other than a dealer.

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