MEAD Act

To amend the Internal Revenue Code of 1986 to modify rules relating to the taxation of mead and other agricultural wine, and for other purposes. 1. Short title This Act may be cited as the Mead Equality And Definition Act of 2016 MEAD Act 2. Repeal of limitations relating to use of spirits, fruits, herbs, etc (a) In general Section 5387 (b) Regulations Not later than 1 year after the date of the enactment of this Act, the Secretary of the Treasury shall modify subpart I of part 24 of subchapter A of chapter 1 (1) Allow the use of spirits in the production of agricultural wine in a manner similar to the use of spirits in the production of natural wine. (2) Eliminate any limitation on the quantity of hops used in the production of mead. (3) Allow, in the production of mead, the addition of wholesome fruits (including fruit juices, fruit puree, fruit extract, or fruit concentrate), vegetables, spices, and other ingredients suitable for human food consumption that are generally recognized as safe for use in an alcoholic beverage, but only to the extent the addition thereof contributes to less than 50 percent of the total Brix of the mead. (4) Allow, in the production mead, the density of the honey and water mixture to be below 13 degrees Brix in the case of an addition described in paragraph (3), but only to the extent the resulting mixture is not less than 13 degrees Brix. (5) Provide that after complete fermentation mead may not have an alcohol content of more than 24 percent by volume. (c) Rule of construction Nothing in this section shall be construed to revoke, prescribe, or limit any other exemptions from the requirements under subpart I of part 24 of subchapter A of chapter I of title 27, Code of Federal Regulations, for any ingredient that has been recognized before, on, or after the date of the enactment of this Act as a traditional ingredient in the production of fermented beverages. (d) Effective date The amendments made by subsection (a) shall take effect on the date that is 1 year after the date of the enactment of the this Act. 3. Modification of formula requirement for agricultural wine Not later than 1 year after the date of the enactment of this Act, the Secretary of the Treasury shall modify subpart I of part 24 of subchapter A of chapter 1 4. Rate of taxation for mead (a) In general Section 5041(b) and ; and (7) On meads containing not more than 0.64 grams of carbon dioxide per hundred millimeters of mead, at 22.6 cents per gallon (except that the Secretary may by regulations prescribe such tolerances to this limitation as may be reasonably necessary in good commercial practice). . (b) Credit for small producers Section 5041(c) of such Code is amended by inserting or (b)(7) (b)(6) (c) Effective date The amendments made by this section shall apply to mead removed during calendar years beginning after December 31, 2016.

Summary: Mead Equality And Definition Act of 2016 or the MEAD Act This bill amends the Internal Revenue Code to modify rules regarding the taxation of mead (honey wine) and other agricultural wines. The bill repeals the limitations on adding wine spirits to an agricultural wine or using any coloring material, herbs, or other flavoring material (except hops in the case of honey wine) in the production. The Department of the Treasury must modify regulations for the production of agricultural wine to allow: (1) the use of spirits in the production of agricultural wine; and (2) additional ingredients to be added during the production of mead, including limited amounts of fruits, vegetables, spices, and other ingredients that are suitable for human food consumption and safe for use in an alcoholic beverage. In modifying the regulations, Treasury must also: eliminate limitations on the quantity of hops used in mead; specify certain requirements for the density of the honey and water mixture when additional ingredients are added to mead; limit the alcohol content of mead to 24% by volume; and allow an agricultural wine to be produced for research and development without an approved formula, as long as the wine is not marketed or sold prior to approval of the formula. The bill also: (1) specifies a tax rate of 22.6 cents per gallon for mead containing not more than 0.64 grams of carbon dioxide per hundred milliliters of mead, and (2) allows a credit against such tax on meads for small domestic producers.