[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1620 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 1620

To amend the Internal Revenue Code of 1986 to repeal the special taxes 
   on wholesale and retail dealers in liquor and beer, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 15, 1997

    Mr. Radanovich (for himself, Mr. Bunning, and Mr. Rohrabacher) 
 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 repeal the special taxes 
   on wholesale and retail dealers in liquor and beer, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. REPEAL OF SPECIAL TAX ON RETAIL DEALERS IN LIQUOR AND BEER, 
              AND ON RECTIFIERS, BREWERS, AND MANUFACTURERS OF STILLS.

    (a) In General.--Part II of subchapter A of chapter 51 of the 
Internal Revenue Code of 1986 (relating to occupational tax) is amended 
by striking the following subparts:
            (1) Subpart A (relating to rectifier).
            (2) Subpart B (relating to brewer).
            (3) Subpart C (relating to manufacturers of stills).
            (4) Subpart D (relating to wholesale dealers).
            (5) Subpart E (relating to retail dealers).
    (b) Clerical and Conforming Amendments.--
            (1) The table of subparts for part II of subchapter A of 
        chapter 51 of such Code is amended by striking items relating 
        to subparts A, B, C, D, and E.
            (2) Subchapter B of chapter 51 of such Code is amended by 
        striking section 5182 (relating to cross references).
            (3) The table of sections for subchapter B of chapter 51 of 
        such Code is amended by striking the item relating to section 
        5182.
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.

SEC. 2. PROHIBITION OF ASSESSMENT AND COLLECTION OF OUTSTANDING TAXES.

    Notwithstanding any other provision of law--
            (1) no assessment of any tax imposed by subpart A, B, C, D, 
        or E of part II of subchapter A of chapter 51 of the Internal 
        Revenue Code of 1986 may be made after the date of the 
        enactment of this Act, and
            (2) if such tax was assessed (but not collected) on or 
        before such date, such assessment shall be abated.

SEC. 3. SIMPLIFICATION OF TAX ON CERTAIN DISTILLED SPIRITS USED IN 
              NONBEVERAGE PRODUCTS.

    (a) In General.--Subpart F of part II of subchapter A of chapter 51 
of the Internal Revenue Code of 1986 (relating to nonbeverage domestic 
drawback claimants) is amended to read as follows:

      ``Subpart F--Special Rules for Nonbeverage Domestic Products

                              ``Sec. 5131. Eligibility and rate of tax.
                              ``Sec. 5132. Registration and regulation.
                              ``Sec. 5133. Investigation.
                              ``Sec. 5134. Penalty.

``SEC. 5131. ELIGIBILITY AND RATE OF TAX.

    ``(a) In General.--In the case of distilled spirits on which a tax 
would be determined under this subchapter (other than this subpart) but 
for this section, used in the manufacture or production of medicines, 
medicinal preparations, food products, flavors, flavoring extracts, or 
perfume, which are unfit for beverage purposes, in lieu of the tax so 
determined there is hereby imposed a tax at the rate of $1 on each 
proof gallon of distilled spirits, or a proportionate tax at the like 
rate on all fractional parts of a proof gallon of distilled spirits 
withdrawn for the manufacture of such nonbeverage products.
    ``(b) Bond or Other Security.--The Secretary may require persons 
eligible for the application of this subpart to file with him a bond or 
other security in such amount such conditions as he shall by 
regulations prescribe.
    ``(c) Allowance of Special Tax Rate Even Where Certain Requirements 
Not Met.--Application of this shall not be denied in the case of a 
failure to comply with any requirement imposed under this subpart, or 
any rule or regulation issued thereunder, upon the person manufacturing 
or producing the nonbeverage product set forth in subsection (a) that 
distilled spirits on which the tax has been paid or determined were in 
fact used in the manufacture or production of medicines, medicinal 
preparations, food products, flavors, flavoring extracts, or perfume 
which were unfit for beverage purposes.

``SEC. 5132. REGISTRATION AND REGULATION.

    ``Every person subject to the application of this subpart shall 
register annually with the Secretary; keep such books and records as 
may be necessary to establish the fact that distilled spirits received 
by him and on which the tax has been determined were used in the 
manufacture or production of medicines, medicinal preparations, food 
products, flavors, flavoring extracts, or perfume which were unfit for 
beverage purposes and be subject to such rules and regulations in 
relations to such books and records as the Secretary shall prescribe to 
secure the Treasury against frauds.

``SEC. 5133. INVESTIGATION.

    ``For the purpose of ascertaining the correctness of the 
application of this subpart, the Secretary is authorized to examine any 
books, papers, records, or memoranda as may be necessary to establish 
the fact that distilled spirits received were used in the manufacture 
or production of medicines, medicinal preparations, food products, 
flavors, flavoring extracts, or perfume which were unfit for beverage 
purposes, to require the attendance of the person or of any officer or 
employee of such person or the attendance of any other person having 
knowledge in the premises, to take testimony with reference to any 
matter covered by the claim, and to administer oaths to any person 
giving such testimony.

``SEC. 5134. PENALTY.

    ``(a) In General.--In the case of a failure to comply with any 
requirement imposed under this subpart or any rule or regulation issued 
thereunder, the taxpayer shall be liable for a penalty of $1,000 for 
each failure to comply unless it is shown that the failure to comply 
was due to reasonable cause.
    ``(b) Penalty May Not Exceed Amount of Tax Reduction.--The 
aggregate amount of the penalties imposed under subsection (a) for 
failures described in section 5131(c) shall not exceed the difference 
between the amount of tax which would be determined under section 5131 
and the amount of tax which would be determined under this subchapter 
without regard to section 5131 (determined without regard to subsection 
(a)).
    ``(c) Penalty Treated as Tax.--The penalty imposed by subsection 
(b) shall be assessed, collected, and paid in the same manner as taxes, 
as provided in section 6665(a).''
    (b) Conforming Amendments.--
            (1) Subparagraph (A) of section 5010(c)(2) is amended by 
        striking ``type for which'' and all that follows and inserting 
        the following: ``type with respect to which section 5131 
        applies.''
            (2) Subsections (a) and (b) of section 5142 of such Code 
        are each amended by striking ``(except the tax imposed by 
        section 5131)''.
            (3) Subsection (g) of section 7652 of such Code is amended 
        to read as follows:
    ``(g) Treatment of Medicinal Alcohol, Etc.--In the case of 
medicines, medicinal preparations, food products, flavors, flavoring 
extracts, or perfume which were unfit for beverage purposes and which 
are brought into the United States from Puerto Rico or the Virgin 
Islands--
            ``(1) subpart F of part II of subchapter A of chapter 51 
        shall be applied as if--
                    ``(A) the use and tax determined described in 
                section 5131(a) had occurred in the United States by a 
                United States person at the time the article is brought 
                into the United States, and
                    ``(B) the rate of tax so determined were the rate 
                applicable under subsection (f) of this section, and
            ``(2) no amount shall be covered into the treasuries of 
        Puerto Rico or the Virgin Islands.''
            (4) The table of subparts for part II of subchapter A of 
        chapter 51 of such Code is amended by striking the item 
        relating to subpart F and inserting the following new item:

``Subpart F--Special rules for nonbeverage domestic products.''
    (c) Effective Date.--The amendments made by this section shall take 
effect on the date of the enactment of this Act.
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