I 
108TH CONGRESS 
1ST SESSION H. R. 2252
To amend the Internal Revenue Code of 1986 to increase the taxes on 
certain alcoholic beverages and to provide additional funds for alcohol 
abuse prevention programs. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 22, 2003
Ms. NORTON introduced the following bill; which was referred to the Com-
mittee on Ways and Means, and in addition to the Committee on Energy 
and Commerce, for a period to be subsequently determined by the Speak-
er, in each case for consideration of such provisions as fall within the ju-
risdiction of the committee concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to increase 
the taxes on certain alcoholic beverages and to provide 
additional funds for alcohol abuse prevention programs.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Alcohol Tax Equali-
zation Act of 2003’’.
SEC. 2. INCREASE IN EXCISE TAXES ON WINE AND BEER TO 
ALCOHOLIC EQUIVALENT OF TAXES ON DIS-
TILLED SPIRITS. 
(a) WINE.—
(1) WINES CONTAINING NOT MORE THAN 14 
PERCENT
ALCOHOL.—Paragraph (1) of section 
5041(b) of the Internal Revenue Code of 1986 (re-
lating to rates of tax on wines) is amended by strik-
ing ‘‘$1.07’’ and inserting ‘‘$2.97’’. 
(2) WINES CONTAINING MORE THAN 14 (BUT 
NOT
MORE
THAN
21)
PERCENT
ALCOHOL.—Para-
graph (2) of section 5041(b) of such Code is amend-
ed by striking ‘‘$1.57’’ and inserting ‘‘$4.86’’. 
(3) WINES CONTAINING MORE THAN 21 (BUT 
NOT
MORE
THAN
24)
PERCENT
ALCOHOL.—Para-
graph (3) of section 5041(b) of such Code is amend-
ed by striking ‘‘$3.15’’ and inserting ‘‘$6.08’’. 
(b) BEER.—
(1) IN
GENERAL.—Paragraph (1) of section 
5051(a) of such Code (relating to imposition and 
rate of tax on beer) is amended by striking ‘‘$18’’ 
and inserting ‘‘$37.67’’. 
(2) SMALL
BREWERS.—Subparagraph (A) of 
section 5051(a)(2) of such Code (relating to reduced 
rate for certain domestic production) is amended by
striking ‘‘$7’’ each place it appears and inserting 
‘‘$26.67’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect on January 1, 2004. 
(d) FLOOR STOCKS TAXES.—
(1) IMPOSITION OF TAX.—
(A) IN GENERAL.—In the case of any tax-
increased article—
(i) on which tax was determined 
under part I of subchapter A of chapter 51 
of the Internal Revenue Code of 1986 or 
section 7652 of such Code before January 
1, 2004, and 
(ii) which is held on such date for sale 
by any person, 
there shall be imposed a tax at the applicable 
rate on each such article. 
(B) APPLICABLE RATE.—For purposes of 
clause (i), the applicable rate is—
(i) $1.90 per wine gallon in the case 
of wine described in paragraph (1) of sec-
tion 5041(b) of such Code, 
(ii) $3.29 per wine gallon in the case 
of wine described in paragraph (2) of sec-
tion 5041(b) of such Code,
(iii) $2.93 per wine gallon in the case 
of wine described in paragraph (3) of sec-
tion 5041(b) of such Code, and 
(iv) $19.67 per barrel in the case of 
beer. 
In the case of a fraction of a gallon or barrel, 
the tax imposed by subparagraph (A) shall be 
the same fraction of the amount of such tax im-
posed on a whole gallon or barrel. 
(C) TAX-INCREASED
ARTICLE.—For pur-
poses of this subsection, the term ‘‘tax-in-
creased article’’ means wine described in para-
graph (1), (2), or (3) of section 5041(b) of such 
Code and beer. 
(2) EXCEPTION FOR CERTAIN SMALL WHOLE-
SALE OR RETAIL DEALERS.—No tax shall be im-
posed by paragraph (1) on tax-increased articles 
held on January 1, 2004, by any dealer if—
(A) the aggregate liquid volume of tax-in-
creased articles held by such dealer on such 
date does not exceed 500 wine gallons, and 
(B) such dealer submits to the Secretary 
(at the time and in the manner required by the 
Secretary) such information as the Secretary 
shall require for purposes of this subparagraph.
(3) LIABILITY FOR TAX AND METHOD OF PAY-
MENT.—
(A) LIABILITY FOR TAX.—A person hold-
ing any tax-increased article on January 1, 
2004, to which the tax imposed by paragraph 
(1) applies shall be liable for such tax. 
(B) METHOD OF PAYMENT.—The tax im-
posed by paragraph (1) shall be paid in such 
manner as the Secretary shall prescribe by reg-
ulations. 
(C) TIME
FOR
PAYMENT.—The tax im-
posed by paragraph (1) shall be paid on or be-
fore June 30, 2004. 
(4) CONTROLLED GROUPS.—
(A) CORPORATIONS.—In the case of a con-
trolled group of corporations, the 500 wine gal-
lon amount specified in paragraph (2) shall be 
apportioned among the dealers who are compo-
nent members of such group in such manner as 
the Secretary shall by regulations prescribe. 
For purposes of the preceding sentence, the 
term ‘‘controlled group of corporations’’ has the 
meaning given to such term by subsection (a) 
of section 1563 of such Code; except that for 
such purposes the phrase ‘‘more than 50 per-
cent’’ shall be substituted for the phrase ‘‘at 
least 80 percent’’ each place it appears in such 
subsection. 
(B) NONINCORPORATED DEALERS UNDER 
COMMON
CONTROL.—Under regulations pre-
scribed by the Secretary, principles similar to 
the principles of subparagraph (A) shall apply 
to a group of dealers under common control 
where 1 or more of such dealers is not a cor-
poration. 
(5) OTHER LAWS APPLICABLE.—
(A) IN GENERAL.—All provisions of law, 
including penalties, applicable to the com-
parable excise tax with respect to any tax-in-
creased article shall, insofar as applicable and 
not inconsistent with the provisions of this sec-
tion, apply to the floor stocks taxes imposed by 
paragraph (1) to the same extent as if such 
taxes were imposed by the comparable excise 
tax. 
(B) COMPARABLE EXCISE TAX.—For pur-
poses of subparagraph (A), the term ‘‘com-
parable excise tax’’ means—
(i) the tax imposed by section 5041 of 
such Code in the case of wine, and
(ii) the tax imposed by section 5051 
of such Code in the case of beer. 
(6) DEFINITIONS.—For purposes of this sub-
section—
(A) IN
GENERAL.—Terms used in this 
paragraph which are also used in subchapter A 
of chapter 51 of such Code shall have the re-
spective meanings such terms have in such sub-
chapter. 
(B) PERSON.—The term ‘‘person’’ includes 
any State or political subdivision thereof, or any 
agency or instrumentality of a State or political 
subdivision thereof. 
(C) SECRETARY.—The term ‘‘Secretary’’ 
means the Secretary of the Treasury or his del-
egate. 
SEC. 3. INDEXATION OF TAX RATES APPLICABLE TO ALCO-
HOLIC BEVERAGES. 
(a) GENERAL RULE.—Subpart E of part I of sub-
chapter A of chapter 51 of the Internal Revenue Code of 
1986 is amended by inserting before section 5061 the fol-
lowing new section:
‘‘SEC. 5060. INDEXATION OF RATES. 
‘‘(a) GENERAL RULE.—Effective during each cal-
endar year after 2004, each tax rate set forth in sub-
section (b) shall be increased by an amount equal to—
‘‘(1) such rate as in effect without regard to 
this section, multiplied by 
‘‘(2) the cost-of-living adjustment for such cal-
endar year determined under section 1(f)(3) by sub-
stituting ‘calendar year 2003’ for ‘calendar year 
1992’ in subparagraph (B) thereof. 
Any increase determined under the preceding sentence 
shall be rounded to the nearest multiple of 1 cent. 
‘‘(b) TAX RATES.—The tax rates set forth in this 
subsection are the rates contained in the following provi-
sions: 
‘‘(1) Paragraph (1) of section 5001(a). 
‘‘(2) Paragraphs (1), (2), (3), (4), and (5) of 
section 5041(b). 
‘‘(3) Paragraphs (1) and (2)(A) of section 
5051(a).’’
(b) TECHNICAL AMENDMENT.—Paragraphs (1)(A) 
and (2) of section 5010(a) are each amended by striking 
‘‘$13.50’’ and inserting ‘‘the rate in effect under section 
5001(a)(1)’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart E of part I of subchapter A of chapter 51
of such Code is amended by inserting before the item re-
lating to section 5061 the following new item:
‘‘Sec. 5060. Indexation of rates.’’
SEC. 4. SUBSTANCE ABUSE PREVENTION TRUST FUND. 
(a) GENERAL RULE.—Subchapter A of chapter 98 of 
the Internal Revenue Code of 1986 (relating to establish-
ment of trust funds) is amended by adding at the end the 
following new section: 
‘‘SEC. 9511. SUBSTANCE ABUSE PREVENTION TRUST FUND. 
‘‘(a) CREATION OF TRUST FUND.—There is estab-
lished in the Treasury of the United States a trust fund 
to be known as the ‘Substance Abuse Prevention Trust 
Fund’, consisting of such amounts as may be appropriated 
or credited to such Trust Fund as provided in this section 
or section 9602(b). 
‘‘(b) TRANSFERS TO TRUST FUND.—There are here-
by appropriated to the Substance Abuse Prevention Trust 
Fund amounts equivalent to the additional taxes received 
in the Treasury under chapter 51 by reason of the amend-
ments made by sections 2 and 3 of the Alcohol Tax 
Equalization Act of 2003 and the additional taxes received 
in the Treasury by reason of section 2(d) of such Act. 
‘‘(c) EXPENDITURES FROM TRUST FUND.—Amounts 
in the Substance Abuse Prevention Trust Fund shall be 
available, as provided in appropriation Acts, for appropria-
tion to—
‘‘(1) the Substance Abuse and Mental Health 
Services Administration, and 
‘‘(2) the National Highway Traffic Safety Ad-
ministration, 
for alcohol abuse prevention programs.’’
(b) CLERICAL AMENDMENT.—The table of sections 
for subchapter A of chapter 98 is amended by adding at 
the end the following new item:
‘‘Sec. 9511. Substance abuse prevention trust fund.’’
Æ