2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART VI - Taxes on Alcoholic Beverages (§§ 32401 — 32570) › Chapter 1051 - Definitions (§ 32401) › § 32401 - Definitions

(a) For purposes of this part, the following terms shall have the general meaning expressed below and the same may be amended through regulations as the Secretary may determine from time to time in view of the changes in the liquor industry:
(1) Gauging.— The measure of any spirits or alcoholic beverages taken by gauge tanks, steelyards, hydrometers, thermometers, ebulliometers, small stills, or any other method prescribed by the Secretary to determine the volume, weight, proof, temperature, and alcohol percentage in alcoholic beverages based on a wine gallon at one hundred (100) proof gallons at sixty (60) degrees Fahrenheit, for the purpose of determining the correct number of gallons of any container of alcoholic beverages.
(2) Agent.— Any Internal Revenue Agent of the Department of the Treasury.
(3) Distillery or still.— Any apparatus designed, or that may be used, for the purpose of separating alcoholic vapors or liquids from any alcoholic mixture through the process of distillation.
(4) Absolute alcohol.— Includes all distilled spirits with:
(A) An alcohol content of not less than one hundred ninety eight (198) degrees proof at sixty (60) degrees Fahrenheit;
(B) an ester content in the form of ethyl acetate of not more than five (5) milligrams for each one hundred (100) milliliters;
(C) a total acid content in the form of acetic acid of not more than two (2) milligrams for each one hundred (100) milliliters, and
(D) such a permanganate time for reducing substances that the typical change in color of this test does not occur before the first five (5) minutes after the reaction has begun.
(5) Industrial alcohol.— Includes all distilled spirits with:
(A) An alcohol content of not less than one hundred ninety (190) degrees proof;
(B) an ester content in the form of ethyl acetate of not more than eight (8) milligrams for each one hundred (100) milliliters;
(C) a total acid content of not more than three (3) milligrams for each one hundred (100) milliliters, and
(D) such a permanganate time for reducing substances that the typical change in color of this test does not occur before the first five (5) minutes after the reaction has begun.
(6) Neutral alcohol.— Any distilled spirit with:
(A) An ester content in the form of ethyl acetate of not more than eight (8) milligrams for each one hundred (100) milliliters of absolute alcohol;
(B) a total acid content in the form of acetic acid of not more than three (3) milligrams for each one hundred (100) milliliters of absolute alcohol, and
(C) such a permanganate time for reducing substances that the typical change in color of this test does not occur before the first five (5) minutes after the reaction has begun.
(7) Bonded warehouses.— Those buildings or sites exclusively used or devoted to store, deposit, and keep products subject taxation according to this part, but which taxes have not been paid. There shall be two types of bonded warehouses: (i) private and (ii) public. Private bonded warehouses shall be those belonging to distillers, rectifiers, manufacturers, or wholesale import dealers of alcoholic beverages, who use them solely and exclusively to store their own products. Public bonded warehouses shall be those in which products belonging to persons other than their owners or operators can be deposited.
(8) Alcoholic beverages.— All spirits that have been reduced to a proof suitable for human consumption, as well as liquors and beverages that contain alcohol, whether produced by fermentation or distillation, and whose alcohol content is more than half of one percent (½ of 1%) of alcohol per volume.
(9) Special alcoholic beverages.— Distilled spirits with added fruit flavors such as, but not limited to, lemon, grapefruit, orange, pineapple, or spices, and bottled at not less than forty (40) degrees proof.
(10) Beverages derived from wine.— Alcoholic beverages manufactured by mixing wines, distilled spirits, fruit juices, aromas or flavors, and cane sugar, including sangria, wine coolers, and any product by any other name used to label these, whose alcohol content does not exceed twenty-four percent (24%) of alcohol per volume. The tax corresponding to these beverages shall be that which applies to the wine category that prevails in the mixture.
(11) Beer and other malt products.— Any beverage with an alcohol content that is manufactured by the fermentation in drinking water of an infusion of malt, barley, or their byproducts, or of rice or any other substitute, with or without the addition of other grains, whether prepared or not, of other carbohydrates or byproducts, of carbonic acid, or of other substances suitable for human consumption.
(12) Champagne and sparkling or carbonated wines.— Sparkling wine is made effervescent by the carbonic gas produced in a later fermentation of wine inside a closed tank or bottle; champagne is sparkling wine from the Champagne region of France. Carbonated wines are those wines which are made effervescent by adding carbonic gas so that such an addition shall produce a total content of said gas of zero point three hundred ninety-two (0.392) grams or more in one hundred (100) cubic centimeters of wine. For purposes of the labeling requirements provided in § 32505 of this title, the term “Champagne” may be used even if the beverage has not originated in said region of France, provided, that the label includes the actual place of origin of said sparkling wine.
(13) Sparkling or carbonated wines from concentrated must.— Those wines made effervescent by the carbonic gas produced in a later fermentation of the wine from concentrated must inside a closed tank or bottle, or those wines from concentrated must made effervescent by the addition of carbonic gas so that such an addition produces a total content greater than zero point three hundred ninety-two (0.392) grams in one hundred (100) cubic centimeters of wine.
(14) Substandard sparkling or carbonated wines.— Those wines made effervescent by the carbonic gas produced in a later fermentation of the substandard wine inside a closed tank or bottle, or those substandard wines made effervescent by the addition of carbonic gas so that such an addition produces a total content greater than zero point three hundred ninety-two (0.392) grams in one hundred (100) cubic centimeters of wine.
(15) Cocktail.— Alcoholic beverage concocted by mixing distilled spirits such as rum, wines, fruit juices, soda pop, spices, and other flavors, and whose alcohol content is less than twenty percent (20%) of alcohol per volume.
(16) Beer concentrate.— The product, whether in liquid form or emulsion, paste, flakes, grains, or powder, obtained from any industrial process employed during any stage in the manufacture of beer to extract a portion of or all the water that beer normally contains.
(17) Congenerics.— Includes all chemical components in distilled spirits which may be classified as acid, ester, aldehyde, or alcohol, except for ethyl alcohol, as well as any other component that is a natural product of the process of fermentation, distillation, or aging of distilled spirits.
(18) Cordials.— Alcoholic beverages prepared by mixing or distilling spirits with fruits, essences, or aromatic preparations, and whose sugar content is not less than two and one half percent (21/2 %) per weight of the final product.
(19) Distillers.— Any person who produces distilled spirits or who, through any process of distillation or evaporation, separates pure or impure spirits from any substance, whether fermented or not, or who, being in possession of or using a still, makes, prepares, or is in possession of any substance suitable for distillation.
(20) Age of the spirits.— The age of the manufactured spirits shall be the time these have remained kept in good quality wooden casks of the type traditionally used by the industry for aging strong alcoholic beverages.
(21) Bottlers or canners.— Any person who, habitually engaged in business, has in his/her possession distilled spirits, alcohol, alcoholic spirits, wines, beer, cider, or any other alcoholic beverage in large containers and who, without needing to rectify these, transfers them from their original containers to smaller ones, such as demijohns, bottles, cans, or any other container for the purpose of marketing them.
(22) Container.— This term includes any receptacle or vessel that may be used to deposit or keep alcoholic beverages.
(23) School.— Includes all public or private schools, including nurseries or preschools, kindergartens, elementary, secondary, and postsecondary schools, and universities.
(24) Distilled spirits.— Distilled spirits, spirits, alcohol, and alcoholic spirits are those substances known as ethyl alcohol, hydrated ethyl oxide or wine spirit, that are commonly produced by the fermentation of grain, starch, molasses, sugar, sugarcane juice, beet juice, or any other substance obtained by distillation, including all dilutions and mixtures of said substances.
(25) Handcrafted distilled spirits.— Any distilled spirit obtained by fermenting or distilling any product derived from sugarcane, excluding wines fortified with sugarcane alcohol, when the production of the manufacturer or distiller (within or outside of Puerto Rico) for the preceding calendar year is less than one hundred thousand (100,000) gallons, considering all sugarcane byproducts, without regard to the percentage of alcohol by volume thereof. Spirits shall be considered to be derived from sugar cane only if:
(A) They are derived exclusively from the fermentation and distillation of sugarcane, or
(B) they are mixed with spirits obtained from the fermentation and distillation of products that are not derived from sugar cane, have an alcohol content that does not exceed one hundred and twenty (120) degrees proof, and are used as ingredients in a proportion that does not exceed two and a half percent (21/2 %) for the manufacture of rum and a proportion of five percent (5%) for the manufacture of other liquors.
(26) Proof spirits.— All alcoholic liquor containing half its volume of alcohol of a specific weight in air of seven thousand, nine hundred thirty-six ten-thousandths and a half (0.79365) at sixty (60) degrees Fahrenheit.
(27) Rectified spirits.— All alcoholic beverages manufactured by a rectifier, as said term is defined in this part. This term also includes distilled spirits that have been subjected to a partial process of manufacture or elaboration subsequent to distillation.
(28) Commercial establishment.— Site or place where alcoholic beverages are sold, at wholesale or retail, including any division or branch that has direct communication with said site or place.
(29) Export.— The act of sending taxable products, in accordance with this part, from Puerto Rico to a territory other than the United States.
(30) Manufacturer.— Any person who, not being a distiller or rectifier, is engaged in the manufacture of products subject to taxation under this part.
(31) Formula.— The description of the processes and ingredients used in the manufacture of alcoholic beverages.
(32) Wine gallon.— The standard liquid measure recognized in the United States, containing two hundred thirty-one (231) cubic inches.
(33) Gin.— Alcoholic beverage prepared by mixing or distilling spirits with aromatic substances, mainly with juniper, and bottled at not less than eighty (80) degrees proof.
(34) Church.— Includes, but is not limited to, seminaries, temples, monasteries, chapels, and other similar places used mainly for religious purposes.
(35) Import.— The act of bringing taxable products to Puerto Rico, in accordance with this part, from a territory other than the United States.
(36) License.— The official document issued by the Secretary as evidence of payment of the duties prescribed in this part to engage in any occupation or trade authorized in this part.
(37) Liter.— The metric unit with a capacity equal to one thousand (1,000) cubic centimeters measured at a temperature of four degrees Celsius (4C), for wines, or at a temperature of fifteen point fifty-six degrees Celsius (15.56C), for distilled spirits. For purposes of this part, one liter of wine equals zero point twenty-six thousand, four hundred seventeen (0.26417) wine gallons, and one liter of distilled spirits equals zero point two hundred sixty-four thousand, one hundred seventy-two (0.264172) wine gallons.
(38) Sticker or label.— Shall be understood to mean the combination of words or phrases which describe the contents of a container, be it printed or painted on paper, lithographed, or engraved, which appears on the stopper, cap, or body of the container or a combination of these.
(39) Bureau.— The Alcoholic Beverages Licensing Bureau of the Department of the Treasury.
(40) Foreign country.— Territory, place, or region which is outside the sovereignty of the United States.
(41) Permit.— The written authorization of the Secretary which shall specifically indicate the business, trade, or activity which is authorized or allowed.
(42) Person.— Any natural or juridical person, the latter including partnerships, companies, societies, associations, and corporations, whatever the name by which they may be known.
(43) Denaturing plants.— [Includes those buildings or localities that are utilized for the denaturalization of distilled spirits in accordance with] the formulas approved and following the procedure established by the Secretary.
(44) Industrial plants.— Includes distilleries, rectifying plants, wineries, breweries, and alcoholic beverage bottling plants.
(45) Sugar cane byproducts.— Include molasses, sugar, juices, honey, syrups, sugar cane solutions, and any other sugar cane byproduct.
(46) Rectifier.— Any person who uses distilled spirits to manufacture alcoholic beverages by methods other than the original distillation of fermented batters, except in the manufacturing operations of wine or beer.
(47) Rum.— Includes all distilled spirits below one hundred ninety (190) degrees proof and any mixture of said spirits derived from the fermentation of juices, molasses, syrups and solutions of sugar cane and other similar byproducts of sugar cane, whether or not such proof is later reduced to not less than eighty (80) degrees proof, and which, through the manufacturing process, have come to acquire the maturity, bouquet, flavor, and other characteristics attributed to what the market and the consumers recognize as rum. The rum to be exported may have an alcohol content of less than eighty (80) degrees proof, according to the limitations established by the country to where the rum is to be exported.
(48) Secretary.— The Secretary of the Treasury of Puerto Rico.
(49) Cider.— The product of the fermentation of apple juice or of any substitute thereof.
(50) Dealer.— Any person who, on his/her own or through his/her employees, sells, exchanges, changes, offers or displays for sale, or has for sale in his/her commercial establishment or in any other location, any product subject to taxation under this part. All products subject to taxation under this part which are displayed to the public in a commercial establishment shall be treated as being sold there. The distillers, manufacturers, and rectifiers who sell or dispose of their products in their respective factories shall not be treated as dealers.
(51) Retail dealer.— Includes all merchants, commission merchants, and other persons who sell to persons, other than merchants or dealers, any product subject to taxation under this part in quantities that are generally sold for individual use and consumption.
(52) Wholesale dealer.— Includes all merchants, commission merchants, and other persons who sell to other dealers, or who are engaged, in Puerto Rico, in the sale, delivery, or distribution to other dealers of any product subject to taxation under this part.
(53) Wholesale importer.— Includes all merchants engaged in the import, distribution, and sale of distilled spirits and alcoholic beverages within the geographical boundaries of Puerto Rico.
(54) Wine.— The product of the regular alcoholic fermentation of the juice of fresh grapes or raisins, or of the juices and byproducts of other fruits (with the exception of tropical fruits), and agricultural products, including champagne and sparkling, carbonated, or fortified wines.
(55) Tropical fruit wine.— The product of the regular alcoholic fermentation of citrus fruit, pineapple, acerola, tomato, gooseberry, and passion fruit, and the maceration of guava, mango, banana, papaya, soursop, and other fruits commonly produced in tropical zones and whose alcoholic content does not exceed twenty-four percent (24%) of alcohol per volume. This product may be offered either in its simple or carbonated state.
(56) Concentrated must wine.— The product of the normal alcoholic fermentation of the pure must of grapes and other fruits, except tropical fruits, concentrated to a minimum density of twenty-eight (28) degrees Baumé and a maximum density of forty-two point five (42.5) degrees Baumé, and diluted by adding water to the original and exact concentration of fresh juice. The product may have a carbonation level of carbonic gas of up to zero point three hundred ninety-two (0.392) grams in one hundred (100) cubic centimeters of wine.
(57) Substandard wine.— Any wine manufactured in its country of origin using sugar, water, sugarcane alcohol, or any other substance in excess of what is needed to correct the natural deficiencies of the fruit, and the alcoholic content by fermentation of which has been complemented by fortifying it exclusively with distilled spirits obtained from the fermentation or distillation of products derived from sugar cane. The product may have a carbonation level of up to zero point three hundred ninety-two (0.392) grams in one hundred (100) cubic centimeters of wine. To convert wines manufactured under other categories into substandard wines by merely adding sugar, water, or sugarcane alcohol shall not be permitted. In addition, in order to qualify under this category, the total wine production of the manufacturer (within and outside of Puerto Rico) for the preceding calendar year, must be less than two million (2,000,000) gallons.
(58) Foreign trade zone.— An isolated and restricted area regulated to operate as a public service, in or adjacent to a port, with facilities for loading, unloading, handling, manufacturing, manipulating, storing, displaying and reshipping products, established pursuant to Public Law No. 397, 73rd Congress, approved on June 18, 1934, 48 Stat. 998, as amended, known as the Foreign Trade Zone Act.
History —Jan. 31, 2011, No. 1, § 5001.01, retroactive to Jan. 1, 2011; Dec. 10, 2011, No. 232, § 147.