[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 52 Introduced in House (IH)]







108th CONGRESS
  1st Session
                                H. R. 52

To amend the Internal Revenue Code of 1986 to repeal the ``luxury tax'' 
  on beer, enacted in the Omnibus Budget Reconciliation Act of 1990, 
                 which doubled previous excise levels.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            January 7, 2003

   Mr. Cox 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 ``luxury tax'' 
  on beer, enacted in the Omnibus Budget Reconciliation Act of 1990, 
                 which doubled previous excise levels.

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

SECTION 1. FINDINGS.

    The Congress finds the following:
            (1) The 1990 Omnibus Budget Reconciliation Act, which 
        contained several so-called ``luxury taxes'', increased the 
        Federal excise tax on beer by 100 percent, to $18 per barrel. 
        As a result, as much as 44 percent of the retail price of beer 
        is now consumed by taxes.
            (2) Middle and lower-income Americans, who comprise the 
        vast majority of our Nation's 90,000,000 beer drinkers, cannot 
        afford this tax on one of their few ``luxuries''. Those who 
        would presume to indulge in the ``luxury'' of purchasing beer 
        are now among the most heavily taxed people in our society.
            (3) The 100 percent increase in the Federal beer tax--this 
        so-called ``luxury tax''--has destroyed 31,000 jobs. It has, 
        however, succeeded in preventing people from enjoying this 
        ``luxury'': after the passage of the tax in 1990, total beer 
        sales suffered the worst decline in 30 years.
            (4) As a result of the ``luxury tax'' on beer, $463,000,000 
        in wages has been lost in the brewing, wholesaling, and 
        retailing industries. In addition, direct purchases of products 
        needed to make beer, including agricultural products, has 
        fallen by $207,000,000.
            (5) The 100 percent increase in the Federal beer tax has 
        not, unfortunately, resulted in a doubling of Federal revenues. 
        To the contrary: the decline in demand, the resultant loss of 
        jobs, and the reduction of direct purchases has cost Federal 
        and State governments hundreds of millions of dollars in lost 
        tax revenues. The ``luxury tax'' on beer has cost millions more 
        in increased outlays for unemployment compensation and other 
        social services to help those who were put out of work by this 
        ill-conceived tax increase.
            (6) Because of the regressive nature of the ``luxury tax'' 
        on beer, its negative impact on the economy, and its 
        unreliability as a source of Federal income, this ``luxury 
        tax'' should be repealed.

SEC. 2. REPEAL OF ``LUXURY TAX'' ON BEER.

    (a) In General.--Paragraph (1) of section 5051(a) of the Internal 
Revenue Code of 1986 (relating to imposition and rate of tax on beer) 
is amended by striking ``$18'' and inserting ``$9''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act.
    (c) Floor Stocks Refunds.--
            (1) In general.--In the case of any beer--
                    (A) on which tax was determined before the date of 
                the enactment of this Act, and
                    (B) which is held on such date for sale by any 
                dealer,
        there shall be credited or refunded (without interest) to the 
        brewer or importer an amount equal to the decreased tax (if 
        any) with respect to such beer.
            (2) Decreased tax.--For purposes of paragraph (1), the term 
        ``decreased tax'' means, with respect to any beer, the excess 
        of--
                    (A) the tax imposed by section 5051 of such Code 
                with respect to such beer (to the extent a credit or 
                refund of such tax is not allowable without regard to 
                this subsection), over
                    (B) the amount of tax which would be imposed by 
                section 5051 of such Code with respect to such beer 
                were such tax determined on the date of the enactment 
                of this Act.
            (3) Time for filing claim.--Credit or refund shall be 
        allowed or made under this subsection only if claim therefor is 
        filed with the Secretary of the Treasury or his delegate on or 
        before the date which is 6 months after the date of the 
        enactment of this Act.
            (4) Held by dealer.--For purposes of this subsection, beer 
        shall be treated as held by a dealer if title thereto has 
        passed to such dealer (whether or not delivery to him has been 
        made), and if for purposes of consumption, title to such beer 
        or possession thereof has not at any time been transferred to 
        any person other than a dealer.
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