I
103D CONGRESS
2D SESSION
H. R. 4376
To amend the Internal Revenue Code of 1986 to increase the taxes on
certain alcoholic beverages and to provide additional funds for mental
health and substance abuse benefits under health care reform legislation.
IN THE HOUSE OF REPRESENTATIVES
MAY 10, 1994
Ms. NORTON introduced the following bill; which was referred jointly to the
Committees on Ways and Means and Energy and Commerce
A BILL
To amend the Internal Revenue Code of 1986 to increase
the taxes on certain alcoholic beverages and to provide
additional funds for mental health and substance abuse
benefits under health care reform legislation.
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’’.
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
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, 1995.
(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, 1995, 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 as the amount of such tax
imposed 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 subparagraph (A) on tax-increased articles
held on January 1, 1995, 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,
1995, 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, 1995.
(4) CONTROLLED GROUPS.—
(A) CORPORATIONS.—In the case of a con-
trolled group, the 500 wine gallon amount spec-
ified in paragraph (2), shall be apportioned
among the dealers who are component members
of such group in such manner as the Secretary
shall by regulations prescribe. For purposes of
the preceding sentence, the term ‘‘controlled
group’’ has the meaning given to such term by
subsection (a) of section 1563 of such Code; ex-
cept that for such purposes the phrase ‘‘more
than 50 percent’’ shall be substituted for the
phrase ‘‘at least 80 percent’’ each place it ap-
pears 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
paragraph, apply to the floor stocks taxes im-
posed 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
for purposes of providing mental health and substance
abuse benefits under health care reform legislation here-
after enacted.’’
(b) CLERICAL AMENDMENT.—The table of sections
for subchapter A of chapter 98 is amended by adding at
the end thereof the following new item:
‘‘Sec. 9512. Mental health and substance abuse benefits trust
fund.’’
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