[Federal Register Volume 70, Number 209 (Monday, October 31, 2005)]
[Proposed Rules]
[Pages 62258-62261]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-21562]


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DEPARTMENT OF THE TREASURY

Alcohol and Tobacco Tax and Trade Bureau

27 CFR Parts 17, 19, 24, 25, 26, 27, and 31

[Notice No. 52]
RIN 1513--AB04


Suspension of Special (Occupational) Tax (2004R-778P)

AGENCY: Alcohol and Tobacco Tax and Trade Bureau, Treasury.

ACTION: Notice of proposed rulemaking; cross-reference to temporary 
rule.

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SUMMARY: Elsewhere in this issue of the Federal Register, the Alcohol 
and Tobacco Tax and Trade Bureau (TTB) is issuing a temporary rule 
amending the TTB regulations relating to special (occupational) tax, to 
reflect a 3-year tax suspension effected by section 246 of the American 
Jobs Creation Act of 2004. Section 246 amends the Internal Revenue Code 
of 1986 to provide that, during the period from July 1, 2005, through 
June 30, 2008, the rate of special (occupational) tax on certain 
occupations will be zero. The occupations affected by the 3-year tax 
suspension are: Manufacturers of nonbeverage products who claim tax 
drawback; proprietors of distilled spirits plants, alcohol fuel plants, 
bonded and taxpaid wine premises, and breweries; and wholesale and 
retail dealers in distilled spirits, wine, and beer. The requirements 
to register annually and keep prescribed records remain in effect. In 
this notice of proposed rulemaking, we are soliciting comments from all 
interested parties on these regulatory amendments. The text of the 
regulations in the temporary rule published in the Rules and 
Regulations section of this issue of the Federal Register serves as the 
text of the proposed regulations.

DATES: Comments must be received on or before December 30, 2005.

ADDRESSES: You may send comments to any of the following addresses--
     Director, Regulations and Rulings Division, Alcohol and 
Tobacco Tax and Trade Bureau, Attn: Notice No. 52, P.O. Box 14412, 
Washington, DC 20044--4412.
     202-927-8525 (facsimile).
     [email protected] (e-mail).
     http://www.ttb.gov/alcohol/rules/index.htm. An online 
comment form is posted with this notice on our Web site.
     http://www.regulations.gov. Federal e-rulemaking portal; 
follow instructions for submitting comments.
    You may view copies of any comments we receive about this notice by 
appointment at the TTB Library, 1310 G Street, NW., Washington, DC 
20220. To make an appointment, call 202-927-2400. You may also access 
copies of this notice and any comments online at http://www.ttb.gov/alcohol/rules/index.htm.
    See the Public Participation section of this document for specific 
instructions and requirements for submitting comments, and for 
information on how to request a public hearing.

FOR FURTHER INFORMATION CONTACT: Steve Simon, Alcohol and Tobacco Tax 
and Trade Bureau, Regulations and Rulings Division, Suite 200E, 1310 G 
Street NW., Washington, DC 20220; telephone (202) 927-8210.

SUPPLEMENTARY INFORMATION:

Background

    In the Rules and Regulations section of this issue of the Federal 
Register, we are publishing a temporary rule implementing section 246 
of the American Jobs Creation Act of 2004, Public Law 108-357, 118 
Stat. 1418 (``the Act''), signed by President Bush on October 22, 2004. 
Section 246 of the Act, entitled ``Suspension of Occupational Taxes 
Relating to Distilled Spirits, Wine, and Beer,'' amended subpart G of 
part II of subchapter A of chapter 54 of the Internal Revenue Code of 
1986 (IRC) by redesignating section 5148 as section 5149 and adding a 
new section 5148 (26 U.S.C. 5148) entitled ``Suspension of Occupational 
Tax.'' New section 5148 provides that, during the 3-year period from 
July 1, 2005, through June 30, 2008, the rate of special (occupational) 
tax imposed under sections 5081, 5091, 5111, 5121, and 5131 will be 
zero.
    The effect of new section 5148 is that the following occupations 
are not subject to payment of special (occupational) tax during the 
suspension period: manufacturer of nonbeverage products, proprietor of 
distilled spirits plant, proprietor of alcohol fuel plant, proprietor 
of bonded wine cellar, proprietor of bonded wine warehouse, proprietor 
of taxpaid wine bottling house, brewer, wholesale dealer in liquors 
(distilled spirits, wines, and beer), wholesale dealer in beer, retail 
dealer in liquors (distilled spirits, wines, and beer), and retail 
dealer in beer. On the other hand, the following occupations, which are 
not covered by the IRC sections listed in new section 5148, are not 
affected by the suspension and remain subject to the special 
(occupational) tax during the suspension period: User of or dealer in

[[Page 62259]]

specially denatured alcohol, user of tax-free alcohol, manufacturer of 
tobacco products (that is, cigars, cigarettes, smokeless tobacco, pipe 
tobacco, and roll-your-own tobacco), manufacturer of cigarette papers 
or tubes, and export warehouse proprietor (for the export of tobacco 
products, cigarette papers, or cigarette tubes).
    Although the tax rate for the occupations affected by the 
suspension will be zero during the suspension period, new section 5148 
further provides that persons engaging in those occupations must still 
register annually and comply with applicable recordkeeping 
requirements. Finally, section 246 of the Act amended section 5117 of 
the IRC (26 U.S.C. 5117) by adding a new subsection (d) to provide that 
during the suspension period a dealer may purchase distilled spirits, 
for resale, only from persons required to keep records as a wholesale 
liquor dealer, except as otherwise specifically provided by law or 
regulations. The Alcohol and Tobacco Tax and Trade Bureau (TTB) is 
responsible for the administration of the IRC provisions relating to 
special (occupational) tax.
    The temporary regulations published elsewhere in this issue of the 
Federal Register involve amendments to parts 17, 19, 24, 25, 26, 27, 
and 31 of the TTB regulations (27 CFR parts 17, 19, 24, 25, 26, 27, and 
31). The text of the temporary regulations serves as the text of these 
proposed regulations. The preamble to the temporary regulations 
explains the proposed regulations.

Public Participation

Comments Sought

    We request comments from everyone interested. All comments must 
reference Notice No. 52 and must include your name and mailing address. 
They must be legible and written in language acceptable for public 
disclosure. Although we do not acknowledge receipt, we will consider 
your comments if we receive them on or before the closing date. We 
regard all comments as originals.

Confidentiality

    All comments are part of the public record and subject to 
disclosure. Do not enclose any material in your comments that you 
consider confidential or inappropriate for public disclosure.

Submitting Comments

    You may submit comments in any of five ways:
     Mail: You may send written comments to TTB at the address 
listed in the ADDRESSES section of this document.
     Facsimile: You may submit comments by facsimile 
transmission to 202-927-8525. Faxed comments must:
    (1) Be on 8.5- by 11-inch paper;
    (2) Contain a legible, written signature; and
    (3) Be no more than five pages long. This limitation ensures 
electronic access to our equipment. We will not accept faxed comments 
that exceed five pages.
     E-mail: You may e-mail comments to [email protected]. Comments 
transmitted by electronic mail must:
    (1) Contain your e-mail address;
    (2) Reference Notice No. 52 on the subject line; and
    (3) Be legible when printed on 8.5- by 11-inch paper.
     Online form: We provide a comment form with the online 
copy of this document on our Web site at http://www.ttb.gov/alcohol/rules/index.htm. Select the ``Send comments via e-mail'' link under 
Notice No. 52.
     Federal e-Rulemaking Portal: To submit comments to us via 
the Federal e-rulemaking portal, visit http://www.regulations.gov and 
follow the instructions for submitting comments.
    You may also write to the Administrator before the comment closing 
date to ask for a public hearing. The Administrator reserves the right 
to determine, in light of all circumstances, whether to hold a public 
hearing.

Public Disclosure

    You may view copies of the temporary rule, this document, and any 
comments we receive by appointment at the TTB Library at 1310 G Street, 
NW., Washington, DC 20220. You may also obtain copies at 20 cents per 
8.5- x 11-inch page. Contact our librarian at the above address or 
telephone 202-927-2400 to schedule an appointment or to request copies 
of comments.
    For your convenience, we will post the temporary rule, this 
document, and any comments we receive on the TTB Web site. We may omit 
voluminous attachments or material that we consider unsuitable for 
posting. In all cases, the full comment will be available in the TTB 
Library. To access the online copy of this document and the submitted 
comments, visit http://www.ttb.gov/alcohol/rules/index.htm. Select the 
``View Comments'' link under this document's number and title to view 
the posted comments.

Regulatory Flexibility Act

    Although we are issuing this notice of proposed rulemaking, it has 
been determined that it is not subject to the provisions of 5 U.S.C. 
553(b). Because this proposed rule contains no new collections of 
information, the provisions of the Regulatory Flexibility Act (5 U.S.C. 
601 et seq.) do not apply.

Executive Order 12866

    We have determined that this notice of proposed rulemaking is not a 
significant regulatory action as defined by Executive Order 12866. 
Therefore, a regulatory assessment is not required.

Paperwork Reduction Act

    Under the Paperwork Reduction Act of 1995, no persons are required 
to respond to a collection of information unless it displays a valid 
OMB control number. The collections of information contained in the 
regulations amended by this temporary rule have been previously 
reviewed and approved by the Office of Management and Budget in 
accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3504(h)) 
under control numbers 1513-0005, 1513-0088, 1513-0112, and 1513-0113. 
There is no new or revised collection of information imposed by this 
proposed rule, and there is no change in the reporting or recordkeeping 
burden. Thus, no new OMB control numbers will be obtained.

Drafting Information

    The principal author of this document is Steve Simon, Regulations 
and Rulings Division, Alcohol and Tobacco Tax and Trade Bureau. 
However, other personnel participated in its development.

List of Subjects

27 CFR Part 17

    Administrative practice and procedure, Claims, Cosmetics, Customs 
duties and inspection, Drugs, Excise taxes, Exports, Imports, Liquors, 
Packaging and containers, Puerto Rico, Reporting and recordkeeping 
requirements, Spices and flavorings, Surety bonds, Virgin Islands.

27 CFR Part 19

    Administrative practice and procedure, Alcohol and alcoholic 
beverages, Authority delegations (Government agencies), Chemicals, 
Claims, Customs duties and inspection, Electronic fund transfers, 
Excise taxes, Exports, Gasohol, Imports, Labeling, Liquors, Packaging 
and containers, Puerto Rico, Reporting and recordkeeping requirements, 
Research, Security measures, Spices and flavorings, Stills, Surety 
bonds, Transportation, Vinegar, Virgin Islands, Warehouses, Wine.

27 CFR Part 24

    Administrative practice and procedure, Claims, Electronic funds 
transfers, Excise taxes, Exports, Food

[[Page 62260]]

additives, Fruit juices, Labeling, Liquors, Packaging and containers, 
Reporting and recordkeeping requirements, Research, Scientific 
equipment, Spices and flavorings, Surety bonds, Vinegar, Warehouses, 
Wine.

27 CFR Part 25

    Beer, Claims, Electronic fund transfers, Excise taxes, Exports, 
Labeling, Liquors, Packaging and containers, Reporting and 
recordkeeping requirements, Research, Surety bonds.

27 CFR Part 26

    Alcohol and alcoholic beverages, Caribbean Basin initiative, 
Claims, Customs duties and inspection, Electronic funds transfers, 
Excise taxes, Packaging and containers, Puerto Rico, Reporting and 
recordkeeping requirements, Surety bonds, Virgin Islands, Warehouses.

27 CFR Part 27

    Alcohol and alcoholic beverages, Beer, Cosmetics, Customs duties 
and inspection, Electronic funds transfers, Excise taxes, Imports, 
Labeling, Liquors, Packaging and containers, Reporting and 
recordkeeping requirements, Wine.

27 CFR Part 31

    Alcohol and alcoholic beverages, Beer, Claims, Excise taxes, 
Exports, Labeling, Liquors, Packaging and containers, Reporting and 
recordkeeping requirements, Wine.

Proposed Amendments to the Regulations

    For the reasons discussed in the preamble, TTB proposes to amend 27 
CFR parts 17, 19, 24, 25, 26, 27, and 31 as follows:

PART 17--DRAWBACK ON TAXPAID DISTILLED SPIRITS USED IN 
MANUFACTURING NONBEVERAGE PRODUCTS

    1. The authority citation for part 17 is revised to read as 
follows:

    Authority: 26 U.S.C. 5010, 5131-5134, 5143, 5146, 5148, 5206, 
5273, 6011, 6065, 6091, 6109, 6151, 6402, 6511, 7011, 7213, 7652, 
7805; 31 U.S.C. 9301, 9303, 9304, 9306.

    2. The proposed amendatory instructions and the proposed amended 
regulatory text for part 17 are the same as the amendatory instructions 
and the amended regulatory text set forth in the temporary rule on this 
subject published in the Rules and Regulations section of this issue of 
the Federal Register.

PART 19--DISTILLED SPIRITS PLANTS

    3. The authority citation for part 19 is revised to read as 
follows:

    Authority: 19 U.S.C. 81c, 1311; 26 U.S.C. 5001, 5002, 5004-5006, 
5008, 5010, 5041, 5061, 5062, 5066, 5081, 5101, 5111-5113, 5142, 
5143, 5146, 5148, 5171-5173, 5175, 5176, 5178-5181, 5201-5204, 5206, 
5207, 5211-5215, 5221-5223, 5231, 5232, 5235, 5236, 5241-5243, 5271, 
5273, 5301, 5311-5313, 5362, 5370, 5373, 5501-5505, 5551-5555, 5559, 
5561, 5562, 5601, 5612, 5682, 6001, 6065, 6109, 6302, 6311, 6676, 
6806, 7011, 7510, 7805; 31 U.S.C. 9301, 9303, 9304, 9306.

    4. The proposed amendatory instructions and the proposed amended 
regulatory text for part 19 are the same as the amendatory instructions 
and the amended regulatory text set forth in the temporary rule on this 
subject published in the Rules and Regulations section of this issue of 
the Federal Register.

PART 24--WINE

    5. The authority citation for part 24 is revised to read as 
follows:

    Authority: 5 U.S.C. 552(a); 26 U.S.C. 5001, 5008, 5041, 5042, 
5044, 5061, 5062, 5081, 5111-5113, 5121, 5122, 5142, 5143, 5148, 
5173, 5206, 5214, 5215, 5351, 5353, 5354, 5356, 5357, 5361, 5362, 
5364-5373, 5381-5388, 5391, 5392, 5511, 5551, 5552, 5661, 5662, 
5684, 6065, 6091, 6109, 6301, 6302, 6311, 6651, 6676, 7011, 7302, 
7342, 7502, 7503, 7606, 7805, 7851; 31 U.S.C. 9301, 9303, 9304, 
9306.

    6. The proposed amendatory instructions and the proposed amended 
regulatory text for part 24 are the same as the amendatory instructions 
and the amended regulatory text set forth in the temporary rule on this 
subject published in the Rules and Regulations section of this issue of 
the Federal Register.

PART 25--BEER

    7. The authority citation for part 25 is revised to read as 
follows:

    Authority: 19 U.S.C. 81c; 26 U.S.C. 5002, 5051-5054, 5056, 5061, 
5091, 5111, 5113, 5142, 5143, 5146, 5148, 5222, 5401-5403, 5411-
5417, 5551, 5552, 5555, 5556, 5671, 5673, 5684, 6011, 6061, 6065, 
6091, 6109, 6151, 6301, 6302, 6311, 6313, 6402, 6651, 6656, 6676, 
6806, 7011, 7342, 7606, 7805; 31 U.S.C. 9301, 9303-9308.

    8. The proposed amendatory instructions and the proposed amended 
regulatory text for part 25 are the same as the amendatory instructions 
and the amended regulatory text set forth in the temporary rule on this 
subject published in the Rules and Regulations section of this issue of 
the Federal Register.

PART 26--LIQUORS AND ARTICLES FROM PUERTO RICO AND THE VIRGIN 
ISLANDS

    9. The authority citation for part 26 is revised to read as 
follows:

    Authority: 19 U.S.C. 81c; 26 U.S.C. 5001, 5007, 5008, 5010, 
5041, 5051, 5061, 5081, 5111, 5112, 5114, 5121, 5122, 5124, 5131--
5134, 5141, 5146, 5148, 5207, 5232, 5271, 5276, 5301, 5314, 5555, 
6001, 6301, 6302, 6804, 7101, 7102, 7651, 7652, 7805; 27 U.S.C. 203, 
205; 31 U.S.C. 9301, 9303, 9304, 9306.

    10. The proposed amendatory instructions and the proposed amended 
regulatory text for part 26 are the same as the amendatory instructions 
and the amended regulatory text set forth in the temporary rule on this 
subject published in the Rules and Regulations section of this issue of 
the Federal Register.

PART 27--IMPORTATION OF DISTILLED SPIRITS, WINES, AND BEER

    11. The authority citation for part 27 is revised to read as 
follows:

    Authority: 5 U.S.C. 552(a), 19 U.S.C. 81c, 1202; 26 U.S.C. 5001, 
5007, 5008, 5010, 5041, 5051, 5054, 5061, 5148, 5111, 5112, 5114, 
5121, 5122, 5124, 5201, 5205, 5207, 5232, 5273, 5301, 5313, 5555, 
6302, 7805.

    12. The proposed amendatory instructions and the proposed amended 
regulatory text for part 27 are the same as the amendatory instructions 
and the amended regulatory text set forth in the temporary rule on this 
subject published in the Rules and Regulations section of this issue of 
the Federal Register.

PART 31--ALCOHOL BEVERAGE DEALERS

    13. The authority citation for part 31 is revised to read as 
follows:

    Authority: 26 U.S.C. 5001, 5002, 5111-5114, 5116, 5117, 5121-
5124, 5142, 5143, 5145, 5146, 5148, 5206, 5207, 5301, 5352, 5555, 
5613, 5681, 5691, 6001, 6011, 6061, 6065, 6071, 6091, 6109, 6151, 
6311, 6314, 6402, 6511, 6601, 6621, 6651, 6657, 7011, 7805.

    14. The proposed amendatory instructions and the proposed amended 
regulatory text for part 31 are the same as the amendatory instructions 
and the amended regulatory text set forth in the temporary rule on this 
subject published in the Rules and Regulations section of this issue of 
the Federal Register.


[[Page 62261]]


    Signed: July 6, 2005.
John J. Manfreda,
Administrator.
    Approved: September 14, 2005.
Timothy E. Skud,
Deputy Assistant Secretary, (Tax, Trade, and Tariff Policy).
[FR Doc. 05-21562 Filed 10-28-05; 8:45 am]
BILLING CODE 4810-31-P