Source: http://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title26-section7652&num=0&edition=prelim
Timestamp: 2019-04-24 01:54:50+00:00

Document:
Except as provided in section 5314, articles of merchandise of Puerto Rican manufacture coming into the United States and withdrawn for consumption or sale shall be subject to a tax equal to the internal revenue tax imposed in the United States upon the like articles of merchandise of domestic manufacture.
The Secretary shall by regulations prescribe the mode and time for payment and collection of the tax described in paragraph (1), including any discretionary method described in section 6302(b) and (c). Such regulations shall authorize the payment of such tax before shipment from Puerto Rico, and the provisions of section 7651(2)(B) shall be applicable to the payment and collection of such tax in Puerto Rico.
All taxes collected under the internal revenue laws of the United States on articles produced in Puerto Rico and transported to the United States (less the estimated amount necessary for payment of refunds and drawbacks), or consumed in the island, shall be covered into the treasury of Puerto Rico.
Except as provided in section 5314, there shall be imposed in the United States, upon articles coming into the United States from the Virgin Islands, a tax equal to the internal revenue tax imposed in the United States upon like articles of domestic manufacture.
Such articles shipped from such islands to the United States shall be exempt from the payment of any tax imposed by the internal revenue laws of such islands.
(A) The payment of an estimated amount shall be made to the government of the Virgin Islands before the commencement of each fiscal year as set forth in section 4(c)(2) of the Act entitled "An Act to authorize appropriations for certain insular areas of the United States, and for other purposes", approved August 18, 1978 (48 U.S.C. 1645), as in effect on the date of the enactment of the Trade and Development Act of 2000. The payment so made shall constitute a separate fund in the treasury of the Virgin Islands and may be expended as the legislature may determine.
(B) Any amounts remaining shall be deposited in the Treasury of the United States as miscellaneous receipts.
If at the end of any fiscal year the total of the Federal contribution made under subparagraph (A) with respect to the four calendar quarters immediately preceding the beginning of that fiscal year has not been obligated or expended for an approved purpose, the balance shall continue available for expenditure during any succeeding fiscal year, but only for emergency relief purposes and essential public projects. The aggregate amount of moneys available for expenditure for emergency relief purposes and essential public projects only shall not exceed the sum of $5,000,000 at the end of any fiscal year. Any unobligated or unexpended balance of the Federal contribution remaining at the end of a fiscal year which would cause the moneys available for emergency relief purposes and essential public projects only to exceed the sum of $5,000,000 shall thereupon be transferred and paid over to the Treasury of the United States as miscellaneous receipts.
For purposes of subsections (a)(3) and (b)(3), any article containing distilled spirits shall in no event be treated as produced in Puerto Rico or the Virgin Islands unless at least 92 percent of the alcoholic content in such article is attributable to rum.
equals or exceeds 50 percent of the value of such article as of the time it is brought into the United States.
No amount shall be transferred under subsection (a)(3) or (b)(3) in respect of taxes imposed on any article, other than an article containing distilled spirits, if the Secretary determines that a Federal excise tax subsidy was provided by Puerto Rico or the Virgin Islands (as the case may be) with respect to such article.
the subsidy which Puerto Rico or the Virgin Islands offers generally to industries producing articles not subject to Federal excise taxes.
For purposes of this subsection, the term "direct cost of processing operations" has the same meaning as when used in section 213 of the Caribbean Basin Economic Recovery Act.
All taxes collected under section 5001(a)(1) on rum imported into the United States (less the estimated amount necessary for payment of refunds and drawbacks) shall be covered into the treasuries of Puerto Rico and the Virgin Islands.
The Secretary shall, from time to time, prescribe by regulation a formula for the division of such tax collections between Puerto Rico and the Virgin Islands and the timing and methods for transferring such tax collections.
For purposes of this subsection, the term "rum" means any article classified under subheading 2208.40.00 of the Harmonized Tariff Schedule of the United States (19 U.S.C. 1202).
Paragraph (1) shall not apply with respect to any rum subject to tax under subsection (a) or (b).
For purposes of this subsection, the amount of taxes collected under section 5001(a)(1) shall be determined without regard to section 5001(c).
(2) the tax imposed under subsection (a)(1) of section 5001, determined as if subsection (c)(1) of such section did not apply, on each proof gallon.
(g) Drawback for medicinal alcohol, etc.
(2) no amount shall be covered into the treasuries of Puerto Rico or the Virgin Islands.
(2) whether such provision of law is a subsequently enacted provision or directly or indirectly seeks to waive the application of this subsection.
The date of the enactment of the Trade and Development Act of 2000, referred to in subsec. (b)(3)(A), is the date of enactment of Pub. L. 106–200, which was approved May 18, 2000.
Section 213 of the Caribbean Basin Economic Recovery Act, referred to in subsec. (d)(3), is classified to section 2703 of Title 19, Customs Duties.
The Harmonized Tariff Schedule of the United States (19 U.S.C. 1202), referred to in subsec. (e)(3), is not set out in the Code. See Publication of Harmonized Tariff Schedule note set out under section 1202 of Title 19.
2018-Subsec. (e)(5). Pub. L. 115–123, §41102(b)(1), added par. (5).
Subsec. (f)(1). Pub. L. 115–123, §41102(a)(1), substituted "January 1, 2022" for "January 1, 2017".
2017-Subsec. (f)(2). Pub. L. 115–97 substituted "subsection (a)(1) of section 5001, determined as if subsection (c)(1) of such section did not apply" for "section 5001(a)(1)".
2015-Subsec. (f)(1). Pub. L. 114–113 substituted "January 1, 2017" for "January 1, 2015".
2014-Subsec. (f)(1). Pub. L. 113–295 substituted "January 1, 2015" for "January 1, 2014".
2013-Subsec. (f)(1). Pub. L. 112–240 substituted "January 1, 2014" for "January 1, 2012".
2010-Subsec. (f)(1). Pub. L. 111–312 substituted "January 1, 2012" for "January 1, 2010".
2008-Subsec. (f)(1). Pub. L. 110–343 substituted "January 1, 2010" for "January 1, 2008".
2006-Subsec. (f)(1). Pub. L. 109–432 substituted "2008" for "2006".
2005-Subsec. (g)(1). Pub. L. 109–59, §11125(b)(22)(A), substituted "subpart B" for "subpart F" in introductory provisions.
Subsec. (g)(1)(A). Pub. L. 109–59, §11125(b)(22)(B), substituted "section 5111" for "section 5131(a)".
2004-Subsec. (f)(1). Pub. L. 108–311 substituted "January 1, 2006" for "January 1, 2004".
2002-Subsec. (f)(1). Pub. L. 107–147 substituted "January 1, 2004" for "January 1, 2002".
"(A) There shall be transferred and paid over, as soon as practicable after the close of the quarter, to the Government of the Virgin Islands from the amounts so determined a sum equal to the total amount of the revenue collected by the Government of the Virgin Islands during the quarter, as certified by the Government Comptroller of the Virgin Islands. The moneys so transferred and paid over shall constitute a separate fund in the treasury of the Virgin Islands and may be expended as the legislature may determine."
Subsec. (h). Pub. L. 106–200, §602(c), added subsec. (h).
1999-Subsec. (f)(1). Pub. L. 106–170 amended par. (1) generally. Prior to amendment, par. (1) read as follows: "$10.50 ($11.30 in the case of distilled spirits brought into the United States during the 5-year period beginning on October 1, 1993), or."
1994-Subsec. (g). Pub. L. 103–465 substituted "flavoring extracts, or perfume" for "or flavoring extracts" in introductory provisions.
1993-Subsec. (f)(1). Pub. L. 103–66 amended par. (1) generally, substituting present provisions for "$10.50, or".
1988-Subsec. (e)(3). Pub. L. 100–418 substituted "subheading 2208.40.00 of the Harmonized Tariff Schedule of the United States" for "item 169.13 or 169.14 of the Tariff Schedules of the United States".
1986-Subsec. (g). Pub. L. 99–514 added subsec. (g).
1984-Subsecs. (c)–(e). Pub. L. 98–369, §2681(a), added subsecs. (c) and (d) and redesignated former subsec. (c) as (e).
Subsec. (f). Pub. L. 98–369, §2682(a), added subsec. (f).
1983-Subsec. (b)(3). Pub. L. 98–213, §5(c), amended language of Pub. L. 94–455, §1906(a)(55). See 1976 Amendment note below.
Subsec. (c). Pub. L. 98–67 added subsec. (c).
1976-Subsec. (a)(2). Pub. L. 94–455, §1906(b)(13)(A), struck out "or his delegate" after "Secretary".
Subsec. (b)(3). Pub. L. 94–455, §1906(b)(13)(A), struck out "or his delegate" after "Secretary" in provisions following subpar. (B).
Pub. L. 94–455, §1906(a)(55)(B), as amended by Pub. L. 98–213, §5(c)(1), substituted "emergency relief purposes and essential public projects" for "emergency relief purposes and essential public projects, with the prior approval of the President or his designated representative" in provisions following subpar. (B). Prior to amendment by Pub. L. 98–213, the latter phrase had been substituted for "approved emergency relief purposes and essential public projects as provided in subparagraph (B)".
Pub. L. 94–455, §1906(a)(55)(C), struck out "including payments under subparagraph (B)" after "public projects only" in provisions following subpar. (B).
Subsec. (b)(3)(A). Pub. L. 94–455, §1906(a)(55)(D), as added by Pub. L. 98–213, §5(c)(2), struck out proviso after "determine" requiring approval of the President or his designated representative before such moneys may be obligated or expended.
Subsec. (b)(3)(B), (C). Pub. L. 94–455, §1906(a)(55)(A), redesignated subpar. (C) as (B). Former subpar. (B) relating to disposition of internal revenue collections in Virgin Islands for fiscal years ending June 30, 1955 and 1956 was struck out.
Pub. L. 94–202 substituted "calendar quarter ending September 30, 1975, and quarterly" for "fiscal year ending June 30, 1954, and annually" and "quarter" for "fiscal year" in provisions preceding subpar. (A), substituted "paid over, as soon as practicable after the close of the quarter," for "paid over" and "quarter" for "fiscal year" in subpar. (A), and substituted "with respect to the four calendar quarters immediately preceding the beginning" for "at the beginning" in provisions following subpar. (C).
1965-Subsec. (a)(3). Pub. L. 89–44 inserted "(less the estimated amount necessary for payment of refunds and drawbacks)" after "transported to the United States".
1958-Subsec. (a)(1). Pub. L. 85–859, §204(17), substituted "section 5314" for "section 5318".
Subsec. (b)(1). Pub. L. 85–859, §204(18), substituted "section 5314" for "section 5318".
Pub. L. 115–123, div. D, title II, §41102(a)(2), Feb. 9, 2018, 132 Stat. 155 , provided that: "The amendment made by this subsection [amending this section] shall apply to distilled spirits brought into the United States after December 31, 2016."
Pub. L. 115–123, div. D, title II, §41102(b)(2), Feb. 9, 2018, 132 Stat. 155 , provided that: "The amendment made by this subsection [amending this section] shall apply to distilled spirits brought into the United States after December 31, 2017."
Amendment by Pub. L. 115–97 applicable to distilled spirits removed after Dec. 31, 2017, see section 13807(d) of Pub. L. 115–97, set out as a note under section 5001 of this title.
Pub. L. 114–113, div. Q, title I, §172(b), Dec. 18, 2015, 129 Stat. 3071 , provided that: "The amendment made by this section [amending this section] shall apply to distilled spirits brought into the United States after December 31, 2014."
Pub. L. 113–295, div. A, title I, §140(b), Dec. 19, 2014, 128 Stat. 4020 , provided that: "The amendment made by this section [amending this section] shall apply to distilled spirits brought into the United States after December 31, 2013."
Pub. L. 112–240, title III, §329(b), Jan. 2, 2013, 126 Stat. 2335 , provided that: "The amendment made by this section [amending this section] shall apply to distilled spirits brought into the United States after December 31, 2011."
Pub. L. 111–312, title VII, §755(b), Dec. 17, 2010, 124 Stat. 3322 , provided that: "The amendment made by this section [amending this section] shall apply to distilled spirits brought into the United States after December 31, 2009."
Pub. L. 110–343, div. C, title III, §308(b), Oct. 3, 2008, 122 Stat. 3869 , provided that: "The amendment made by this section [amending this section] shall apply to distilled spirits brought into the United States after December 31, 2007."
Pub. L. 109–432, div. A, title I, §114(b), Dec. 20, 2006, 120 Stat. 2940 , provided that: "The amendment made by subsection (a) [amending this section] shall apply to articles brought into the United States after December 31, 2005."
Amendment by Pub. L. 109–59 effective July 1, 2008, but inapplicable to taxes imposed for periods before such date, see section 11125(c) of Pub. L. 109–59, set out as a note under section 5002 of this title.
Pub. L. 108–311, title III, §305(b), Oct. 4, 2004, 118 Stat. 1179 , provided that:"The amendment made by this section [amending this section] shall apply to articles brought into the United States after December 31, 2003."
Pub. L. 107–147, title VI, §609(b), Mar. 9, 2002, 116 Stat. 60 , provided that: "The amendment made by subsection (a) [amending this section] shall apply to articles brought into the United States after December 31, 2001."
Pub. L. 106–200, title VI, §602(d), May 18, 2000, 114 Stat. 306 , provided that: "The amendments made by this section [amending this section and provisions set out as a note under this section] shall apply with respect to transfers or payments made after the date of the enactment of this Act [May 18, 2000]."
Pub. L. 106–170, title V, §512(c), Dec. 17, 1999, 113 Stat. 1925 , provided that: "The amendment made by subsection (a) [amending this section] shall take effect on July 1, 1999."
Amendment by Pub. L. 103–465 effective Jan. 1, 1995, see section 136(d) of Pub. L. 103–465, set out as a note under section 5001 of this title.
Amendment by Pub. L. 103–66 effective Oct. 1, 1993, see section 13227(f) of Pub. L. 103–66, set out as a note under section 56 of this title.
Pub. L. 99–514, title XVIII, §1879(i)(2), Oct. 22, 1986, 100 Stat. 2907 , provided that: "The amendment made by paragraph (1) [amending this section] shall apply to articles brought into the United States after the date of the enactment of this Act [Oct. 22, 1986]."
"(1) In general.-Except as provided in paragraph (2), the amendments made by subsection (a) [amending this section] shall apply with respect to articles brought into the United States on or after March 1, 1984.
"(A) In general.-Subject to the limitations of subparagraphs (B) and (C), the amendments made by subsection (a) [amending this section] shall not apply with respect to articles containing distilled spirits brought into the United States from Puerto Rico after February 29, 1984, and before January 1, 1985.
"(ii) the aggregate amount payable to Puerto Rico under section 7652(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] with respect to such articles which were brought into the United States after June 30, 1983, and before March 1, 1984, and which would not meet the requirements of section 7652(c) of such Code.
"(iv) which do not contain distilled spirits derived from cane.
"(A) In general.-In the case of articles to which this paragraph applies, the aggregate amount of incentive payments paid to any United States distiller with respect to such articles shall not exceed the limitation described in subparagraph (C).
"(B) Articles to which paragraph applies.-This paragraph shall apply to any article containing distilled spirits described in clauses (i) through (iv) of paragraph (2)(C).
"(i) In general.-The limitation described in this subparagraph is $1,500,000.
"(ii) Special rule.-The limitation described in this subparagraph shall be zero with respect to any distiller who was not entitled to or receiving incentive payments as of March 1, 1984.
"(D) Payments in excess of limitation.-If any United States distiller receives any incentive payment with respect to articles to which this paragraph applies in excess of the limitation described in subparagraph (C), such distiller shall pay to the United States the total amount of such incentive payments with respect to such articles in the same manner, and subject to the same penalties, as if such amount were tax due and payable under section 5001 of such Code on the date such payments were received.
"(i) In general.-For purposes of this paragraph, the term 'incentive payment' means any payment made directly or indirectly by the commonwealth of Puerto Rico to any United States distiller as an incentive to engage in redistillation operations.
"(ii) Transportation payments excluded.-Such term shall not include any payment of a direct cost of transportation to or from Puerto Rico with respect to any article to which this paragraph applies."
Pub. L. 98–369, div. B, title VI, §2682(b), July 18, 1984, 98 Stat. 1175 , provided that "The amendment made by this section [amending this section] shall apply to articles containing distilled spirits brought into the United States after September 30, 1985."
Pub. L. 98–67, title II, §221(b), Aug. 5, 1983, 97 Stat. 395 , provided that: "The amendment made by subsection (a) [amending this section] shall apply to articles imported into the United States after June 30, 1983."
Pub. L. 94–202, §10(b), Jan. 2, 1976, 89 Stat. 1141 , provided that: "The amendments made by paragraphs (1) and (2) of subsection (a) [amending this section] shall apply with respect to all taxes imposed by, and collected after June 30, 1975, under, the internal revenue laws of the United States on articles produced in the Virgin Islands and transported to the United States."
Amendment by Pub. L. 89–44 effective July 1, 1965, see section 808(d)(1) of Pub. L. 89–44, set out as a note under section 5702 of this title.
Amendment by Pub. L. 85–859 effective July 1, 1959, see section 210(a)(1) of Pub. L. 85–859, set out as an Effective Date note under section 5001 of this title.
"(B) the amount of the transfer described in paragraph (1)."
"(A) Section 7652 of the Internal Revenue Code of 1954 [now 1986] (other than subsection (f) thereof) shall not prevent the payment to Puerto Rico or the Virgin Islands of amounts with respect to medicines, medicinal preparations, food products, flavors, or flavoring extracts containing distilled spirits, which are unfit for beverage purposes and which are brought into the United States from Puerto Rico or the Virgin Islands on or before the date of the enactment of this Act [Oct. 22, 1986].
"(B) With respect to articles brought into the United States after September 27, 1985, subparagraph (A) shall apply only if the Secretary of the Treasury or his delegate is satisfied that the amounts paid to Puerto Rico or the Virgin Islands under subparagraph (A) are being repaid to the proper persons who used the distilled spirits in such articles."
Ex. Ord. No. 10602, Mar. 24, 1955, 20 F.R. 1795, provided: "By virtue of the authority vested in me by section 7652(b)(3) of the Internal Revenue Code of 1954 [now I.R.C. 1986] (Public Law 591, 83rd Congress, 68A Stat. 907), I hereby designate the Secretary of the Interior as the representative of the President to approve the obligation and expenditure by the government of the Virgin Islands of the moneys referred to in the said section 7652(b)(3)."

References: §41102
 §41102
 §11125
 §11125
 §602
 §2681
 §2682
 §5
 §1906
 §1906
 §1906
 §1906
 §5
 §1906
 §1906
 §5
 §1906
 §204
 §204
 §41102
 §41102
 §172
 §140
 §329
 §755
 §308
 §114
 §305
 §609
 §602
 §512
 §1879
 §2682
 §221
 §10