[Federal Register Volume 61, Number 115 (Thursday, June 13, 1996)] [Proposed Rules] [Pages 30021-30023] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 96-14852] ----------------------------------------------------------------------- DEPARTMENT OF THE TREASURY 27 CFR Part 250 [Notice No. 825] RIN: 1512-AB50 Liquors and Articles From Puerto Rico and the Virgin Islands (1512-AB50) AGENCY: Bureau of Alcohol, Tobacco and Firearms (ATF), Department of the Treasury. ACTION: Advance notice of proposed rulemaking. ----------------------------------------------------------------------- SUMMARY: ATF is considering the revision and recodification of the regulations regarding liquors and articles (hereinafter ``alcoholic products'') which are brought into the United States from Puerto Rico or the Virgin Islands. The purpose of the proposed revision/ recodification is to update and simplify the regulations in 27 CFR Part 250 and to reissue those regulations as part of the same chapter. ATF is issuing this advance notice to solicit comments on its proposal to eliminate application and transaction forms required to be submitted by persons who bring alcoholic products into the United States from Puerto Rico. Comments are also being solicited on proposals to coordinate with the U.S. Customs Service to reduce duplicate efforts involving shipments of merchandise from Puerto Rico to the United States. ATF would also like to receive comments regarding other suggestions for reducing or eliminating unnecessary regulatory burdens on proprietors in both Puerto Rico and the United States while continuing to provide adequate protection to the revenue. DATES: Written comments must be received on or before September 11, 1996. ADDRESSES: Comments must be submitted to the Chief, Wine, Beer, and Spirits Branch, P.O. Box 50221, Washington, DC 20091-0221. ATTN Notice No. 825. FOR FURTHER INFORMATION CONTACT: Tami Light, Wine, Beer and Spirits Branch, Bureau of Alcohol, Tobacco and Firearms, Washington, DC 20226, (202) 927-8210. [[Page 30022]] SUPPLEMENTARY INFORMATION: Background Pursuant to section 7652 of the Internal Revenue Code of 1986, alcoholic products of Puerto Rican manufacture which are brought into the United States for consumption or sale, and alcoholic products coming into the United States from the Virgin Islands, are subject to a tax equal to the tax imposed on similar products of domestic manufacturer. Under section 5232, distilled spirits brought into the United States in bulk containers from Puerto Rico or the Virgin Islands may be withdrawn from Customs custody and transferred to the bonded premises of a distilled spirits plant without payment of tax. On September 8, 1992, ATF published in the Federal Register an advanced notice of proposed rulemaking, Notice No. 751, 57 FR 40885, in order to solicit comments on its proposal to review and update the regulations pertaining to shipments of alcoholic products from Puerto Rico or the Virgin Islands to the United States, and plans to recodify and reissue such regulations now in 27 CFR part 250 as part 26 of the same chapter. In response to Notice No. 751, two favorable comments were received from the Jim Beam Co. (Beam) and the National Association of Beverage Importers, Inc. In general, both of these comments supported ATF's proposed simplification of application and recordkeeping requirements. In addition, Beam supported ATF's proposed coordination with the U.S. Customs Service to streamline regulation of Puerto Rican products. Given ATF's continued interest in these proposals, the relative lack of comments received during its initial airing, and the length of time since these issues were first considered, ATF is reairing its proposal in its entirety to give industry and concerned citizens another opportunity to comment. Proposals ATF would like to reorganize the regulations to eliminate often lengthy duplication of requirements that apply equally to operations in Puerto Rico and the Virgin Islands. We are considering deleting many regulatory requirements which may be unnecessary. In updating the regulations, primary emphasis will be given to the simplification of procedures for the taxpayment and shipment of alcoholic products from Puerto Rico to the United States. ATF is also considering proposals to coordinate with the U.S. Customs Service to reduce duplicate efforts at the port of arrival in the United States when such products are shipped from Puerto Rico, however, the responsibilities of Customs with respect to shipments from the Virgin Islands would remain unchanged. Under current regulations, before distilled spirits, wine or beer may be shipped from Puerto Rico to the United States, an application on ATF Form 5110.51, Application, Permit and Report-Wine and Beer (Puerto Rico), must be submitted and a permit received to verify computation of the internal revenue tax. After tax determination, a second application and permit on ATF Form 487-B (5170.5) Application and Permit to Ship Liquors and Articles of Puerto Rican Manufacturer Taxpaid to the United States, is required in order to ship the taxpaid or tax determined products to the United States. ATF is considering ways to reduce paperwork and simplify the procedures for shipping distilled spirits, beer or wine from Puerto Rico to the United States. We would like comments on the following proposals: (1) Should the regulations be amended to permit the proprietor of qualified premises in Puerto Rico to maintain a record of tax determination in lieu of the application and permit to compute the tax? ATF is proposing that, in lieu of the initial application and permit currently required to compute the tax, a record of tax determination be kept by the proprietor containing sufficient information to allow an ATF officer to verify the tax liability represented by the document. (2) Should the regulations be amended to allow such record of tax determination to be an invoice, bill of lading, or other commercial document which would contain the necessary data elements? (3) If ATF adopts the above proposals what additional safeguards to the revenue would be necessary? (4) Do the current provisions in part 250 adequately address the bulk shipment of distilled spirits from Puerto Rico to the United States? ATF is interested in whether or not the regulations reflect the current technology or shipment and distribution practices in this area. (5) In this advance notice, ATF would like to solicit comments on specific ways in which it could reduce paperwork, simplify existing procedures and eliminate unnecessary regulations in any area concerning Puerto Rico or the Virgin Islands that is currently covered in part 250, while continuing to maintain adequate safeguards to the revenue. (6) ATF would like specific comments on the experience of the industry with respect to any duplicative regulatory efforts by ATF and the U.S. Customs Service on shipments of distilled spirits from Puerto Rico to the United States. (7) Finally, under the current regulations, ATF may grant an industry member's request for an alternate method or procedure as a variance from some regulatory requirements. ATF is interested in comments from industry members concerning their experience with such variances and whether these regulations should be revised to incorporate some of the practices authorized by existing variances. Public Participation ATF requests comments from all interested persons. All comments received on or before the closing date will be carefully considered. Comments received after the closing date will be given the same consideration if it is practical to do so, but assurance of consideration cannot be given except as to comments received on or before the closing date. ATF will not recognize any material or comments as confidential. All comments submitted in response to this advance notice will be available for public inspection during normal business hours at: ATF Public Reading Room, room 6480, 650 Massachusetts Avenue NW., Washington, DC. Any material that the commenter considers confidential or inappropriate for disclosure to the public should not be included in the comment. The name of the person submitting a comment is not exempt from disclosure. Executive Order 12866 It has been determined that this proposed regulation is not a significant regulatory as defined by Executive Order 12866. Accordingly, this proposal is not subject to the analysis required by this Executive Order. Drafting Information: The principal author of this document is Tami Light of the Wine, Beer and Spirits Branch, Bureau of Alcohol, Tobacco and Firearms. List of Subjects in 27 CFR Part 250 Administrative practice and procedure, Alcohol and alcoholic beverages, Authority delegations, Beer, Customs duties and inspection, Electronic fund transfers, Excise taxes, Liquors, Packaging and containers, Puerto Rico, Reporting and recordkeeping requirements, Surety bonds, Transportation, Virgin Islands, Warehouses, Wine. [[Page 30023]] Authority: This advance notice of proposed rulemaking is issued under the authority in 26 U.S.C. 7805. Signed: May 17, 1996. Bradley A. Buckles, Acting Director. Approved: May 24, 1996. John P. Simpson. Deputy Assistant Secretary (Regulatory, Tariff and Trade Enforcement). [FR Doc. 96-14852 Filed 6-12-96; 8:45 am] BILLING CODE 4810-31-U