An Act to amend certain provisions of the Internal Revenue Code of 1954 relating to distilled spirits, and for other purposes
PL 90-630 (H.R.11394), enacted 10/22/1968

1328 
PUBLIC LAW 90-630-OCT. 22, 1968 
[82 STAT. 
apply to this Act unless it refers specifically to this Act or refers gen-
erally to sales of defense articles and defense services under any Act. 
SEC. 46. SAVING PROVISIONS.—Except as may be expressly provided 
to the contrary in this Act, all determinations, authorizations, regula-
tions, orders, contracts, agreements, and other actions issued, under-
taken, or entered into under authority of any provision of law repealed 
by section 45(a) .shall continue in full force and effect until modified 
by appropriate authority. 
Approved October 22, 1968. 
October 22, 1968 
[H.R. 11394] 
Taxes. 
Distilled spirits. 
72 Stat. 1324. 
26 use 5008. 
46 Stat. 694; 
49 Stat. I960. 
72 Stat. 1366. 
Public Law 90-630 
AN ACT 
To amend certain provisions of the Internal Revenue Code of 1954 relating to 
distilled spirits, and for other purposes. 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled, That paragraph (1) 
of section 5008(c) of the Internal Revenue Code of 1954 (relating to 
loss or destruction of distilled spirits) is amended— 
(1) by striking out "before the completion of the bottling and 
casing or other packaging of such spirits for removal from the 
bottling premises" and inserting in lieu thereof "before removal 
from the premises", and 
(2) by inserting after "such loss occurred" in subparagraph 
(B) the following: "(i) before the completion of the bottling 
and casing or other packaging of such spirits for removal from the 
bottling premises and (ii)'. 
SEC. 2. (a) The second sentence of section 5062(b) of the Internal 
Revenue Code of 1954 (relating to drawback in the case of exportation 
of distilled spirits) is amended to read as follows: "In the case of 
distilled spirits, the preceding sentence shall not apply unless the claim 
for drawback is filed by the bottler or packager of the spirits and unless 
such spirits have been stamped or restamped, and marked, especially 
for export, under regulations prescribed by the Secretary or his 
delegate." 
(b) The second paragraph of section 313(d) of the TarilT Act of 
amended— 
1930, as amended (19 U.S.C. 1313(d)) (relating to drawback) is 
(1) by inserting "or determined" after "been paid" each place 
it appears, 
(2) by striking out the colon and the proviso, and 
(3) by adding at the end thereof the following new sentence: 
"In the case of distilled spirits, the preceding sentence shall not 
apply unless the claim for drawback is filed by the bottler or 
packager of the spirits and unless such spirits have been stamped 
or restamped, ana marked, especially for export, under regula-
tions prescribed by the Commissioner of Internal Revenue, with 
the approval of the Secretary of the Treasury." 
SEC. 3. (a) Section 5232 of the Internal Revenue Code of 1954 
(relating to imported distilled spirits) is amended to read as 
follows: 
"SEC. 5232. IMPORTED DISTILLED SPIRITS. 
"(a) 
TRANSFER TO DISTILLED SPIRITS PLANT WITHOUT PAYMENT OF 
TAX.—Imported distilled spirits in bulk containers may, under such 
regulations as the Secretary or his delegate shall prescribe, be with-
drawn from customs custody and transferred in such bulk containers 
or by pipeline to the bonded premises of a distilled spirits plant with-
82 STAT. ] 
PUBLIC LAW 90-630-OCT. 22, 1968 
1329 
out payment of the internal revenue tax imposed on imported distilled 
spirits by section 5001. The person operating the bonded premises of 
^
^ stat. isu-
the distilled spirits plant to which such spirits are transferred shall 
become liable for the tax on distilled sjjirits withdrawn from customs 
custody under this section upon release of the spirits from customs 
custody, and the impoiter shall thereupon be relieved of his liability 
for such tax. 
"(b) WITHDRAWALS, ETC.—Imported distilled spirits transferred 
pursuant to subsection (a)— 
" (1) may not be bottled in bond under section 5233, 
"(2) may be redistilled or denatured only if of 185 degrees or 
more of proof, and 
"(3) may be withdrawn for any purpose authorized by this 
chapter, in the same manner as domestic distilled spirits." 
(b) Headnote 3 for part 12 of schedule 1 of the Tariff Schedules of 
the United States (19 U.S.C, sec. 1202) is amended to read as follows: 
77A stat. 63. 
"3. The duties prescribed on products covered by this part are in 
addition to the internal-revenue taxes imposed under existing law or 
any subsequent Act. The duties imposed on products covered by this 
part which are subject also to internal-revenue taxes are imposed only 
on the quantities subject to such taxes; except that, in tlie case of 
distilled spirits transferred to the bonded premises of a distilled 
spirits plant under the provisions of section 5232 of tlie Internal 
Revenue Code of 1954, the duties are imposed on the quantity with- 
^"'^' P- ^328. 
drawn from customs custody."' 
SEC. 4. (a) For purposes of subsection (b), the effective date of 
Effective date, 
this Act is the first day of the first calendar month which begins more 
flian 90 days after the date of the enactment of this Act. 
(b) The amendments made by the first section of this Act shall 
apply only to losses sustained on or after such effective date. The 
amendments made by section 2 shall apply only to articles exported on 
or after such effective date. The amendments made by section 3 shall 
appljr only to withdrawals from customs custody on or after such 
effective date. 
SEC. 5. (a) Section 175(c) (1) of the Internal Revenue Code of 1954 ^/„°^^,^"fi;^^^*' 
(relating to soil and water conservation expenditures) is amended by pendft'irres"" ^"^ 
striking out the last sentence and inserting in lieu thereof the 
^^^ stat. 67. 
tollowmg: 
"Notwithstanding the preceding sentences, such term also includes 
any amount, not otherwise allowable as a deduction, paid or 
incurred to satisfy any part of an assessment levied by a soil or 
water conservation or drainage district to defray expenditures 
made by such district (i) which, if paid or incurred by the tax-
l^ayer, would without regard to this sentence constitute expendi-
tures deductible under this section, or (ii) for property of a 
character subject to the allowance for depreciation provided in 
section 167 and used in the soil or water conservation or drainage 
district's business as such (to the extent that the taxpayer's share 
of the assessment levied on the members of the district for such 
property does not exceed 10 percent of such assessment)," 
(b) Section 175 of such Code is amended by adding at the end 
thereof the following new subsection: 
"(f) 
RULES 
APPLICABLE 
TO 
ASSESSMENTS 
FOR 
DEPRECIABLE 
PROPERTY.— 
"(1) 
AMOUNTS TREATED AS PAID OR INCURRED OVER 9-YEAR 
PERIOD.—In the case of an assessment levied to defray expend-
itures for property deecribed in clause (ii) of the last sentence of 
subsection (c)(1), if the amount of such assessment paid or 
incurred by the taxpayer during the taxable year (determined 
without the application of this paragraph) is in excess of an 
26 use 175. 
1330 
PUBLIC LAW 90-630-OCT. 22, 1968 
[82 STAT. 
Effective date. 
Denial of 
exemption. 
68A Stat. 168-
26 use 504-
Charitable de-
ductions, limita-
tion. 
Effective date. 
64 Stat. 954, 
958. 
amount equal to 10 percent of the aggregate amounts which have 
been and will be assessed as the taxpayer's share of the expend-
itures by the district for such property, and if such excess is more 
than $500, the entire excess shall be treated as paid or incurred 
ratably over each of the 9 succeeding taxable years. 
" (2) DISPOSITION OF LAND DURING 9-YEAR PERIOD.—If paragraph 
(1) applies to an assessment and the land with respect to which 
such assessment was made is sold or otherwise disposed of by the 
taxpayer (other than by the reason of his death) during the 9 
succeeding taxable years, any amount of the excess described in 
paragraph (1) which has not been treated as paid or incurred for 
a taxable year ending on or before the sale or other disposition 
shall be added to the adjusted basis of Such land immediately 
prior to its sale or other disposition and shall not thereafter be 
treated as paid or incurred ratably under paragraph (1). 
"(3) DISPOSITION BY REASON OF DEATH.—If paragraph 
(1) 
applies to an assessment and the taxpayer dies during the 9 suc-
ceeding taxable years, any amount of the excess described in para-
graph (1) which has not been treated as paid or incurred for a 
taxable year ending before his death shall be treated as paid or 
incurred in the taxable year in which he dies." 
(c) The amendments made by subsections (a) and (b) shall apply 
to assessments levied after the date of the enactment of this Act in 
taxable years ending after such date. 
SEC. 6. (a) Section 504(a) of the Internal Eevenue Code of 1954 
(relating to denial of exemption) is amended by inserting after the 
second sentence thereof the following new sentence: "Paragraph (1) 
shall not apply to income attributable to property transferred to a t r u ^ 
before January 1, 1951, by the creator of such trust, if such trust was 
irrevocable on such date and if such income is required to be accu-
mulated pursuant to the mandatory terms (as in effect on such date 
and at all times thereafter) of the instrument creating such trust." 
(b) Section 681(c) of such Code (relating to limitation on charitable 
deduction of trusts by reason of accumulated income) is amended by 
inserting after the second sentence thereof the following new sentence: 
"Paragraph (1) shall not apply to income attributable to property 
transferred to a trust before January 1, 1951, by the creator of such 
trust, if such trust was irrevocable on such date and if such income is 
required to be accumulated pursuant to the mandatory terms (as in 
effect on such date and at all times thereafter) of the instrument 
creating such trust," 
(c) The amendments made by subsection (a) and (b) shall apply 
with respeot to taxable years beginning after December 31, 1953, and 
ending after August 16, 1954. For purposes of section 3814 and 162 
(g) (4) of the Internal Revenue Code of 1939, provisions having the 
same effect as such amendments shall be treated as included in such 
sections effective with respect to taxable years beginning after Decem-
l)er 31, 1950. 
Approved October 22, 1968.