[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[S. 2047 Introduced in Senate (IS)]







107th CONGRESS
  2d Session
                                S. 2047

 To amend the Internal Revenue Code of 1986 to allow distilled spirits 
  wholesalers a credit against income tax for their cost of carrying 
 Federal excise taxes prior to the sale of the product bearing the tax.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 21, 2002

 Mr. Breaux (for himself and Mr. Bond) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to allow distilled spirits 
  wholesalers a credit against income tax for their cost of carrying 
 Federal excise taxes prior to the sale of the product bearing the tax.

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

SECTION 1. SHORT TITLE: AMENDMENT OF 1986 CODE.

    (a) Short Title.--This Act may be cited as the ``Domestic Spirits 
Tax Equity Act of 2002''.

SEC. 2. INCOME TAX CREDIT TO DISTILLED SPIRITS WHOLESALERS FOR COST OF 
              CARRYING FEDERAL EXCISE TAXES ON BOTTLED DISTILLED 
              SPIRITS.

    (a) In General.--Subpart A of part I of subchapter A of chapter 51 
of the Internal Revenue Code of 1986 (relating to gallonage and 
occupational taxes) is amended by adding at the end the following new 
section:

``SEC. 5011. INCOME TAX CREDIT FOR WHOLESALER'S AVERAGE COST OF 
              CARRYING EXCISE TAX.

    ``(a) In General.--For purposes of section 38, in the case of an 
eligible wholesaler, the amount of the distilled spirits wholesalers 
credit for any taxable year is the amount equal to the product of--
            ``(1) the number of cases of bottled distilled spirits--
                    ``(A) which were bottled in the United States, and
                    ``(B) which are purchased by such wholesaler during 
                the taxable year directly from the bottler of such 
                spirits, and
            ``(2) the average tax-financing cost per case for the most 
        recent calendar year ending before the beginning of such 
        taxable year.
    ``(b) Eligible Wholesaler.--For purposes of this section, the term 
`eligible wholesaler' means any person who holds a permit under the 
Federal Alcohol Administration Act as a wholesaler of distilled 
spirits.
    ``(c) Average Tax-Financing Cost.--
            ``(1) In general.--For purposes of this section, the 
        average tax-financing cost per case for any calendar year is 
        the amount of interest which would accrue at the deemed 
        financing rate during a 60-day period on an amount equal to the 
        deemed Federal excise per case.
            ``(2) Deemed financing rate.--For purposes of paragraph 
        (1), the deemed financing rate for any calendar year is the 
        average of the corporate overpayment rates under paragraph (1) 
        of section 6621(a) (determined without regard to the last 
        sentence of such paragraph) for calendar quarters of such year.
            ``(3) Deemed federal excise tax based on case of 12 80-
        proof 750ml bottles.--For purposes of paragraph (1), the deemed 
        Federal excise tax per case is $25.68.
            ``(4) Number of cases in lot.--For purposes of this 
        section, the number of cases in any lot of distilled spirits 
        shall be determined by dividing the number of liters in such 
        lot by 9.''.
    (b) Conforming Amendments.--
            (1) Subsection (b) of section 38 of the Internal Revenue 
        Code of 1986 is amended by striking ``plus'' at the end of 
        paragraph (14), by striking the period at the end of paragraph 
        (15) and inserting ``, plus'', and by adding at the end the 
        following new paragraph:
            ``(16) in the case of an eligible wholesaler (as defined in 
        section 5011(b)), the distilled spirits wholesaler credit 
        determined under section 5011(a).''.
            (2) Subsection (d) of section 39 of such Code (relating to 
        carryback and carryforward of unused credits) is amended by 
        adding at the end the following new paragraph:
            ``(11) No carryback of section 5011 credit before january 
        1, 2002.--No portion of the unused business credit for any 
        taxable year which is attributable to the credit determined 
        under section 5011(a) may be carried back to a taxable year 
        beginning before January 1, 2002.''.
            (3) The table of sections for subpart A of part I of 
        subchapter A of chapter 51 of such Code is amended by adding at 
        the end the following new item:

                              ``Sec. 5011. Income tax credit for 
                                        wholesaler's average cost of 
                                        carrying excise tax.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2001.
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