[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 702 Introduced in Senate (IS)]







109th CONGRESS
  1st Session
                                 S. 702

 To amend the Internal Revenue Code of 1986 to repeal the occupational 
          taxes relating to distilled spirits, wine, and beer.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 5, 2005

Mr. Baucus (for himself, Mr. Bunning, Mr. Johnson, Mr. Talent, and Mr. 
Craig) 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 repeal the occupational 
          taxes relating to distilled spirits, wine, and beer.

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

SECTION 1. REPEAL OF OCCUPATIONAL TAXES RELATING TO DISTILLED SPIRITS, 
              WINE, AND BEER.

    (a) Repeal of Occupational Taxes.--
            (1) In general.--The following provisions of part II of 
        subchapter A of chapter 51 of the Internal Revenue Code of 1986 
        (relating to occupational taxes) are hereby repealed:
                    (A) Subpart A (relating to proprietors of distilled 
                spirits plants, bonded wine cellars, etc.).
                    (B) Subpart B (relating to brewer).
                    (C) Subpart D (relating to wholesale dealers) 
                (other than sections 5114 and 5116).
                    (D) Subpart E (relating to retail dealers) (other 
                than section 5124).
                    (E) Subpart G (relating to general provisions) 
                (other than sections 5142, 5143, 5145, and 5146).
            (2) Nonbeverage domestic drawback.--Section 5131 of such 
        Code is amended by striking ``, on payment of a special tax per 
        annum,''.
            (3) Industrial use of distilled spirits.--Section 5276 of 
        such Code is hereby repealed.
    (b) Conforming Amendments.--
            (1)(A) The heading for part II of subchapter A of chapter 
        51 of the Internal Revenue Code of 1986 and the table of 
        subparts for such part are amended to read as follows:

                  ``PART II--MISCELLANEOUS PROVISIONS

                              ``Subpart A. Manufacturers of stills. 
                              ``Subpart B. Nonbeverage domestic 
                                        drawback claimants. 
                              ``Subpart C. Recordkeeping and 
                                        registration by dealers. 
                              ``Subpart D. Other provisions.''.
            (B) The table of parts for such subchapter A is amended by 
        striking the item relating to part II and inserting the 
        following new item:

                              ``Part II. Miscellaneous provisions.''.
            (2) Subpart C of part II of such subchapter (relating to 
        manufacturers of stills) is redesignated as subpart A.
            (3)(A) Subpart F of such part II (relating to nonbeverage 
        domestic drawback claimants) is redesignated as subpart B and 
        sections 5131 through 5134 are redesignated as sections 5111 
        through 5114, respectively.
            (B) The table of sections for such subpart B, as so 
        redesignated, is amended--
                    (i) by redesignating the items relating to sections 
                5131 through 5134 as relating to sections 5111 through 
                5114, respectively, and
                    (ii) by striking ``and rate of tax'' in the item 
                relating to section 5111, as so redesignated.
            (C) Section 5111 of such Code, as redesignated by 
        subparagraph (A), is amended--
                    (i) by striking ``and rate of tax'' in the section 
                heading,
                    (ii) by striking the subsection heading for 
                subsection (a), and
                    (iii) by striking subsection (b).
            (4) Part II of subchapter A of chapter 51 of such Code is 
        amended by adding after subpart B, as redesignated by paragraph 
        (3), the following new subpart:

                 ``Subpart C--Recordkeeping by Dealers

                              ``Sec. 5121. Recordkeeping by wholesale 
                                        dealers.
                              ``Sec. 5122. Recordkeeping by retail 
                                        dealers.
                              ``Sec. 5123. Preservation and inspection 
                                        of records, and entry of 
                                        premises for inspection.''.
            (5)(A) Section 5114 of such Code (relating to records) is 
        moved to subpart C of such part II and inserted after the table 
        of sections for such subpart.
            (B) Section 5114 of such Code is amended--
                    (i) by striking the section heading and inserting 
                the following new heading:

``SEC. 5121. RECORDKEEPING BY WHOLESALE DEALERS.'',

                and
            (ii) by redesignating subsection (c) as subsection (d) and 
        by inserting after subsection (b) the following new subsection:
    ``(c) Wholesale Dealers.--For purposes of this part--
            ``(1) Wholesale dealer in liquors.--The term `wholesale 
        dealer in liquors' means any dealer (other than a wholesale 
        dealer in beer) who sells, or offers for sale, distilled 
        spirits, wines, or beer, to another dealer.
            ``(2) Wholesale dealer in beer.--The term `wholesale dealer 
        in beer' means any dealer who sells, or offers for sale, beer, 
        but not distilled spirits or wines, to another dealer.
            ``(3) Dealer.--The term `dealer' means any person who 
        sells, or offers for sale, any distilled spirits, wines, or 
        beer.
            ``(4) Presumption in case of sale of 20 wine gallons or 
        more.--The sale, or offer for sale, of distilled spirits, 
        wines, or beer, in quantities of 20 wine gallons or more to the 
        same person at the same time, shall be presumptive evidence 
        that the person making such sale, or offer for sale, is engaged 
        in or carrying on the business of a wholesale dealer in liquors 
        or a wholesale dealer in beer, as the case may be. Such 
        presumption may be overcome by evidence satisfactorily showing 
        that such sale, or offer for sale, was made to a person other 
        than a dealer.''.
            (C) Paragraph (3) of section 5121(d) of such Code, as so 
        redesignated, is amended by striking ``section 5146'' and 
        inserting ``section 5123''.
            (6)(A) Section 5124 of such Code (relating to records) is 
        moved to subpart C of part II of subchapter A of chapter 51 of 
        such Code and inserted after section 5121.
            (B) Section 5124 of such Code is amended--
                    (i) by striking the section heading and inserting 
                the following new heading:

``SEC. 5122. RECORDKEEPING BY RETAIL DEALERS.'',

                    (ii) by striking ``section 5146'' in subsection (c) 
                and inserting ``section 5123'', and
                    (iii) by redesignating subsection (c) as subsection 
                (d) and inserting after subsection (b) the following 
                new subsection:
    ``(c) Retail Dealers.--For purposes of this section--
            ``(1) Retail dealer in liquors.--The term `retail dealer in 
        liquors' means any dealer (other than a retail dealer in beer 
        or a limited retail dealer) who sells, or offers for sale, 
        distilled spirits, wines, or beer, to any person other than a 
        dealer.
            ``(2) Retail dealer in beer.--The term `retail dealer in 
        beer' means any dealer (other than a limited retail dealer) who 
        sells, or offers for sale, beer, but not distilled spirits or 
        wines, to any person other than a dealer.
            ``(3) Limited retail dealer.--The term `limited retail 
        dealer' means any fraternal, civic, church, labor, charitable, 
        benevolent, or ex-servicemen's organization making sales of 
        distilled spirits, wine or beer on the occasion of any kind of 
        entertainment, dance, picnic, bazaar, or festival held by it, 
        or any person making sales of distilled spirits, wine or beer 
        to the members, guests, or patrons of bona fide fairs, 
        reunions, picnics, carnivals, or other similar outings, if such 
        organization or person is not otherwise engaged in business as 
        a dealer.
            ``(4) Dealer.--The term `dealer' has the meaning given such 
        term by section 5121(c)(3).''.
            (7) Section 5146 of such Code is moved to subpart C of part 
        II of subchapter A of chapter 51 of such Code, inserted after 
        section 5122, and redesignated as section 5123.
            (8) Subpart C of part II of subchapter A of chapter 51 of 
        such Code, as amended by paragraph (7), is amended by adding at 
        the end the following new section:

``SEC. 5124. REGISTRATION BY DEALERS.

    ``Every dealer who is subject to the recordkeeping requirements 
under section 5121 or 5122 shall register with the Secretary such 
dealer's name or style, place of residence, trade or business, and the 
place where such trade or business is to be carried on. In case of a 
firm or company, the names of the several persons constituting the 
same, and the places of residence, shall be so registered.''.
            (9) Section 7012 of such Code is amended by redesignating 
        paragraphs (4) and (5) as paragraphs (5) and (6), respectively, 
        and by inserting after paragraph (3) the following new 
        paragraph:
            ``(4) For provisions relating to registration by dealers in 
        distilled spirits, wines, and beer, see section 5124.''.
            (10) Part II of subchapter A of chapter 51 of such Code is 
        amended by inserting after subpart C the following new subpart:

                     ``Subpart D--Other Provisions

                              ``Sec. 5131. Packaging distilled spirits 
                                        for industrial uses.
                              ``Sec. 5132. Prohibited purchases by 
                                        dealers.''.
            (11) Section 5116 of such Code is moved to subpart D of 
        part II of subchapter A of chapter 51 of such Code, inserted 
        after the table of sections, redesignated as section 5131, and 
        amended by inserting ``(as defined in section 5121(c))'' after 
        ``dealer'' in subsection (a).
            (12) Subpart D of part II of subchapter A of chapter 51 of 
        such Code is amended by adding at the end the following new 
        section:

``SEC. 5132. PROHIBITED PURCHASES BY DEALERS.

    ``(a) In General.--Except as provided in regulations prescribed by 
the Secretary, it shall be unlawful for a dealer to purchase distilled 
spirits for resale from any person other than a wholesale dealer in 
liquors who is required to keep the records prescribed by section 5121.
    ``(b) Limited Retail Dealers.--A limited retail dealer may lawfully 
purchase distilled spirits for resale from a retail dealer in liquors.
    ``(c) Penalty and Forfeiture.--

        ``For penalty and forfeiture provisions applicable to 
                            violations of subsection (a), see sections 
                            5687 and 7302.''.
            (13) Subsection (b) of section 5002 of such Code is 
        amended--
                    (A) by striking ``section 5112(a)'' and inserting 
                ``section 5121(c)(3)'',
                    (B) by striking ``section 5112'' and inserting 
                ``section 5121(c)'',
                    (C) by striking ``section 5122'' and inserting 
                ``section 5122(c)''.
            (14) Subparagraph (A) of section 5010(c)(2) of such Code is 
        amended by striking ``section 5134'' and inserting ``section 
        5114''.
            (15) Subsection (d) of section 5052 of such Code is amended 
        to read as follows:
    ``(d) Brewer.--For purposes of this chapter, the term `brewer' 
means any person who brews beer or produces beer for sale. Such term 
shall not include any person who produces only beer exempt from tax 
under section 5053(e).''.
            (16) The text of section 5182 of such Code is amended to 
        read as follows:

        ``For provisions requiring recordkeeping by wholesale liquor 
                            dealers, see section 5112, and by retail 
                            liquor dealers, see section 5122.''.
            (17) Subsection (b) of section 5402 of such Code is amended 
        by striking ``section 5092'' and inserting ``section 5052(d)''.
            (18) Section 5671 of such Code is amended by striking ``or 
        5091''.
            (19)(A) Part V of subchapter J of chapter 51 of such Code 
        is hereby repealed.
            (B) The table of parts for such subchapter J is amended by 
        striking the item relating to part V.
            (20)(A) Sections 5142, 5143, and 5145 of such Code are 
        moved to subchapter D of chapter 52 of such Code, inserted 
        after section 5731, redesignated as sections 5732, 5733, and 
        5734, respectively, and amended by striking ``this part'' each 
        place it appears and inserting ``this subchapter''.
            (B) Section 5732 of such Code, as redesignated by 
        subparagraph (A), is amended by striking ``(except the tax 
        imposed by section 5131)'' each place it appears.
            (C) Paragraph (2) of section 5733(c) of such Code, as 
        redesignated by subparagraph (A), is amended by striking 
        ``liquors'' both places it appears and inserting ``tobacco 
        products and cigarette papers and tubes''.
            (D) The table of sections for subchapter D of chapter 52 of 
        such Code is amended by adding at the end the following:

                              ``Sec. 5732. Payment of tax.
                              ``Sec. 5733. Provisions relating to 
                                        liability for occupational 
                                        taxes.
                              ``Sec. 5734. Application of State 
                                        laws.''.
            (E) Section 5731 of such Code is amended by striking 
        subsection (c) and by redesignating subsection (d) as 
        subsection (c).
            (21) Subsection (c) of section 6071 of such Code is amended 
        by striking ``section 5142'' and inserting ``section 5732''.
            (22) Paragraph (1) of section 7652(g) of such Code is 
        amended--
                    (A) by striking ``subpart F'' and inserting 
                ``subpart B'', and
                    (B) by striking ``section 5131(a)'' and inserting 
                ``section 5111''.
    (c) Effective Date.--The amendments made by this section shall take 
effect on July 1, 2005, but shall not apply to taxes imposed for 
periods before such date.
                                 <all>