On each proof gallon of the wine content of distilled spirits, there shall be allowed a credit against the tax imposed by section 5001 (or 7652) equal to the excess of—
(A) $13.50, over
(B) the rate of tax which would be imposed on the wine under section 5041(b) but for its removal to bonded premises.
On each proof gallon of the flavors content of distilled spirits, there shall be allowed a credit against the tax imposed by section 5001 (or 7652) equal to $13.50.
In the case of any fractional part of a proof gallon of the wine content, or of the flavors content, of distilled spirits, a proportionate credit shall be allowed.
The credit allowable by subsection (a)—
(A) shall be determined at the same time the tax is determined under section 5006 (or 7652) on the distilled spirits containing the wine or flavors, and
(B) shall be allowable at the time the tax imposed by section 5001 (or 7652) on such distilled spirits is payable as if the credit allowable by this section constituted a reduction in the rate of tax.
For purposes of this section, the wine content, and the flavors content, of imported distilled spirits shall be established by such chemical analysis, certification, or other methods as may be set forth in regulations prescribed by the Secretary.
For purposes of this section—
The term "wine content" means alcohol derived from wine.
The term "wine"—
(i) means wine on which tax would be imposed by paragraph (1), (2), or (3) of section 5041(b) but for its removal to bonded premises, and
(ii) does not include any substance which has been subject to distillation at a distilled spirits plant after receipt in bond.
Except as provided in subparagraph (B), the term "flavors content" means alcohol derived from flavors of a type for which drawback is allowable under section 5114.
The term "flavors content" does not include—
(i) alcohol derived from flavors made at a distilled spirits plant,
(ii) alcohol derived from flavors distilled at a distilled spirits plant, and
(iii) in the case of any distilled spirits product, alcohol derived from flavors to the extent such alcohol exceeds (on a proof gallon basis) 2½ percent of the finished product.
(Added Pub. L. 96–598, §6(a), Dec. 24, 1980, 94 Stat. 3488; amended Pub. L. 98–369, div. A, title I, §27(a)(2), July 18, 1984, 98 Stat. 507; Pub. L. 100–647, title V, §5063(a), Nov. 10, 1988, 102 Stat. 3681; Pub. L. 101–508, title XI, §11201(a)(2), Nov. 5, 1990, 104 Stat. 1388–415; Pub. L. 109–59, title XI, §11125(b)(14), Aug. 10, 2005, 119 Stat. 1956.)
A prior section 5010, act Aug. 16, 1954, ch. 736, 68A Stat. 603, related to miscellaneous stamp provisions, prior to the general revision of this chapter by Pub. L. 85–859.
2005—Subsec. (c)(2)(A). Pub. L. 109–59 substituted "section 5114" for "section 5134".
1990—Subsec. (a)(1), (2). Pub. L. 101–508 substituted "$13.50" for "$12.50".
1988—Subsec. (c)(2)(B). Pub. L. 100–647 added cl. (ii) and redesignated former cl. (ii) as (iii).
1984—Subsec. (a)(1), (2). Pub. L. 98–369 substituted "$12.50" for "$10.50".
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.
Amendment by Pub. L. 101–508 effective Jan. 1, 1991, see section 11201(d) of Pub. L. 101–508, set out as a note under section 5001 of this title.
Pub. L. 100–647, title V, §5063(b), Nov. 10, 1988, 102 Stat. 3681, provided that: "The amendments made by this section [amending this section] shall apply with respect to distilled spirits withdrawn from bond after the date of the enactment of this Act [Nov. 10, 1988]."
Amendment by Pub. L. 98–369 effective Oct. 1, 1985, see section 27(d)(1) of Pub. L. 98–369, set out as a note under section 5001 of this title.
Pub. L. 96–598, §6(c), Dec. 24, 1980, 94 Stat. 3489, provided that: "The amendments made by subsections (a) and (b) [enacting this section] shall take effect on January 1, 1980."
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