I 
108TH CONGRESS 
1ST SESSION 
H. R. 791
To amend the Internal Revenue Code of 1986 to allow distilled spirits whole-
salers a credit against income tax for their cost of carrying Federal 
excise taxes prior to the sale of the product bearing the tax. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 13, 2003
Mr. COLLINS (for himself and Mr. NEAL of Massachusetts) 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 allow dis-
tilled spirits wholesalers a credit against income tax for 
their cost of carrying Federal excise taxes prior to the 
sale of the product bearing the tax.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE: AMENDMENT OF 1986 CODE. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Domestic Spirits Tax Equity Act of 2003’’.
SECTION 2. INCOME TAX CREDIT TO DISTILLED SPIRITS 
WHOLESALERS FOR COST OF CARRYING FED-
ERAL EXCISE TAXES ON BOTTLED DISTILLED 
SPIRITS. 
(a) IN GENERAL.—Subpart A of part I of subchapter 
A of chapter 51 of the Internal Revenue Code of 1986 
(relating to gallonage and occupational taxes) is amended 
by adding at the end the following new section: 
‘‘SEC. 5011. INCOME TAX CREDIT FOR WHOLESALER’S AV-
ERAGE COST OF CARRYING EXCISE TAX. 
‘‘(a) IN GENERAL.—For purposes of section 38, in 
the case of an eligible wholesaler, the amount of the dis-
tilled spirits wholesalers credit for any taxable year is the 
amount equal to the product of—
‘‘(1) the number of cases of bottled distilled 
spirits—
‘‘(A) which were bottled in the United 
States, and 
‘‘(B) which are purchased by such whole-
saler during the taxable year directly from the 
bottler of such spirits, and 
‘‘(2) the average tax-financing cost per case for 
the most recent calendar year ending before the be-
ginning of such taxable year. 
‘‘(b) ELIGIBLE WHOLESALER.—For purposes of this 
section, the term ‘eligible wholesaler’ means any person
who holds a permit under the Federal Alcohol Administra-
tion Act as a wholesaler of distilled spirits. 
‘‘(c) AVERAGE TAX-FINANCING COST.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the average tax-financing cost per case for any 
calendar year is the amount of interest which would 
accrue at the deemed financing rate during a 60-day 
period on an amount equal to the deemed Federal 
excise per case. 
‘‘(2) DEEMED FINANCING RATE.—For purposes 
of paragraph (1), the deemed financing rate for any 
calendar year is the average of the corporate over-
payment rates under paragraph (1) of section 
6621(a) (determined without regard to the last sen-
tence of such paragraph) for calendar quarters of 
such year. 
‘‘(3) DEEMED FEDERAL EXCISE TAX BASED ON 
CASE OF 12 80-PROOF 750ML BOTTLES.—For pur-
poses of paragraph (1), the deemed Federal excise 
tax per case is $25.68. 
‘‘(4) NUMBER OF CASES IN LOT.—For purposes 
of this section, the number of cases in any lot of dis-
tilled spirits shall be determined by dividing the 
number of liters in such lot by 9.’’
(b) CONFORMING AMENDMENTS.—
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2003.
Æ