I
106TH CONGRESS
2D SESSION
H. R. 5128
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
SEPTEMBER 7, 2000
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 2000’’.
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 purchased by such wholesaler during the tax-
able year directly from the distiller or importer 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 80 PROOF 750ML BOTTLES.—For purposes
of paragraph (1), the deemed Federal excise tax per
case is $25.68.’’
(b) CONFORMING AMENDMENTS.—
(1) Subsection (b) of section 38 of such Code
is amended by striking ‘‘plus’’ at the end of para-
graph (11), by striking the period at the end of
paragraph (12) and inserting ‘‘, plus’’, and by add-
ing at the end the following new paragraph:
‘‘(13) in the case of an eligible wholesaler (as
defined in section 5011(b)), the distilled spirits
wholesaler 
credit 
determined 
under 
section
5011(a).’’
(2) Subsection (d) of section 39 of such Code
(relating to carryback and carryforward of unused
credits) is amended by adding at the end the fol-
lowing new paragraph:
‘‘(9) NO CARRYBACK OF SECTION 5011 CREDIT
BEFORE JANUARY 1, 2001.—No portion of the un-
used business credit for any taxable year which is
attributable to the credit determined under section
5011(a) may be carried back to a taxable year be-
ginning before January 1, 2001.’’.
(3) The table of sections for subpart A of part
I of subchapter A of chapter 51 of such Code is
amended by adding at the end the following new
item:
‘‘Sec. 5011. Income tax credit for wholesaler’s average cost of car-
rying excise tax.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2000.
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