1513-0043
26 U.S.C.
Sec. 5212. Transfer of distilled spirits between bonded premises
Bulk distilled spirits on which the internal revenue tax has not
been paid or determined as authorized by law may, under such regulations as the Secretary shall prescribe, be transferred in bond between bonded premises in any approved container. For the purposes of this chapter, the removal of bulk distilled spirits for transfer in bond between bonded premises shall not be construed to be a withdrawal from bonded premises. The provisions of this section restricting transfers to bulk distilled spirits shall not apply to alcohol bottled under the provisions of section 5235 which is to be withdrawn for industrial purposes.
(Added Pub. L. 85-859, title II, Sec. 201, Sept. 2, 1958, 72 Stat. 1362; amended Pub. L. 94-455, title XIX, Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 96-39, title VIII, Sec. 805(b)(2), July 26, 1979, 93 Stat. 276; Pub. L. 96-598, Sec. 6(d), Dec. 24, 1980, 94 Stat. 3490.)
Sec. 5314. Special applicability of certain provisions
(a) Puerto Rico
(1) Applicability
The provisions of this subsection shall not apply to the
Commonwealth of Puerto Rico unless the Legislative Assembly of the
Commonwealth of Puerto Rico expressly consents thereto in the
manner prescribed in the constitution of the Commonwealth of Puerto
Rico, for the enactment of a law.
(2) In general
Distilled spirits for the purposes authorized in section
5214(a)(2) and (3), denatured distilled spirits, and articles, as
described in this paragraph, produced or manufactured in Puerto
Rico, may be brought into the United States free of any tax imposed
by section 5001(a)(10) \1\ or 7652(a)(1) for disposal under the
same conditions as like spirits, denatured spirits, and articles,
produced or manufactured in the United States; and the provisions
of this chapter and regulations promulgated thereunder (and all
other provisions of the internal revenue laws applicable to the
enforcement thereof, including the penalties of special application
thereto) relating to the production, bonded warehousing, and
denaturation of distilled spirits, to the withdrawal of distilled
spirits or denatured distilled spirits, and to the manufacture of
articles from denatured distilled spirits, shall, insofar as
applicable, extend to and apply in Puerto Rico in respect of--
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(A) distilled spirits for shipment to the United States for
the purposes authorized in section 5214(a)(2) and (3);
(B) distilled spirits for denaturation;
(C) denatured distilled spirits for shipment to the United
States;
(D) denatured distilled spirits for use in the manufacture
of articles for shipment to the United States; and
(E) articles, manufactured from denatured distilled
spirits, for shipment to the United States.
(3) Withdrawals authorized by Puerto Rico
Distilled spirits (including denatured distilled spirits) may
be withdrawn from the bonded premises of a distilled spirits plant
in Puerto Rico pursuant to authorization issued under the laws of
the Commonwealth of Puerto Rico; such spirits so withdrawn, and
products containing such spirits so withdrawn, may not be
brought into the United States free of tax.
(4) Costs of administration
Any expenses incurred by the Treasury Department in connection
with the enforcement in Puerto Rico of the provisions of this
subtitle and section 7652(a), and regulations promulgated
thereunder, shall be charged against and retained out of taxes
collected under this title in respect of commodities of Puerto
Rican manufacture brought into the United States. The funds so
retained shall be deposited as a reimbursement to the appropriation
to which such expenses were originally charged.
(b) Virgin Islands
(1) In general
Distilled spirits for the purposes authorized in section
5214(a)(2) and (3), denatured distilled spirits, and articles, as
described in this paragraph, produced or manufactured in the Virgin
Islands, may be brought into the United States free of any tax
imposed by section 7652(b)(1) for disposal under the same
conditions as like spirits, denatured spirits, and articles,
produced or manufactured in the United States; and the provisions
of this chapter and regulations promulgated thereunder (and all
other provisions of the internal revenue laws applicable to the
enforcement thereof, including the penalties of special application
thereto) relating to the production, bonded warehousing, and
denaturation of distilled spirits, to the withdrawal of distilled
spirits or denatured distilled spirits, and to the manufacture of
articles from denatured distilled spirits, shall, insofar as
applicable, extend to and apply in the Virgin Islands in respect
of--
(A) distilled spirits for shipment to the United States for
the purposes authorized in section 5214(a)(2) and (3);
(B) distilled spirits for denaturation;
(C) denatured distilled spirits for shipment to the United
States;
(D) denatured distilled spirits for use in the manufacture
of articles for shipment to the United States; and
(E) articles, manufactured from denatured distilled
spirits, for shipment to the United States.
(2) Advance of funds
The insular government of the Virgin Islands shall advance to
the Treasury of the United States such funds as may be required
from time to time by the Secretary for the purpose of defraying all
expenses incurred by the Treasury Department in connection with the
enforcement in the Virgin Islands of paragraph (1) and regulations
promulgated thereunder. The funds so advanced shall be deposited in
a separate trust fund in the Treasury of the United States and
shall be available to the Treasury Department for the purposes of
this subsection.
(3) Regulations issued by Virgin Islands
The Secretary may authorize the Governor of the Virgin Islands,
or his duly authorized agents, to issue or adopt such regulations,
to approve such bonds, and to issue, suspend, or revoke such
permits, as are necessary to carry out the provisions of this
subsection. When regulations have been issued or adopted under this
paragraph with concurrence of the Secretary he may exempt the
Virgin Islands from any provisions of law and regulations otherwise
made applicable by the provisions of paragraph (1), except that
denatured distilled spirits, articles and distilled spirits for
tax-free purposes which are brought into the United States from the
Virgin Islands under the provisions of this subsection shall in all
respects conform to the requirements of law and regulations imposed
on like products of domestic manufacture.
(Added Pub. L. 85-859, title II, Sec. 201, Sept. 2, 1958, 72 Stat. 1375; amended Pub. L. 94-455, title XIX, Secs. 1905(a)(18), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1820, 1834.)
Sec. 7652. Shipments to the United States
(a) Puerto Rico
(1) Rate of tax
Except as provided in section 5314, articles of merchandise of
Puerto Rican manufacture coming into the United States and
withdrawn for consumption or sale shall be subject to a tax equal
to the internal revenue tax imposed in the United States upon the
like articles of merchandise of domestic manufacture.
(2) Payment of tax
The Secretary shall by regulations prescribe the mode and time
for payment and collection of the tax described in paragraph (1),
including any discretionary method described in section 6302(b) and
(c). Such regulations shall authorize the payment of such tax
before shipment from Puerto Rico, and the provisions of section
7651(2)(B) shall be applicable to the payment and collection of
such tax in Puerto Rico.
(3) Deposit of internal revenue collections
All taxes collected under the internal revenue laws of the
United States on articles produced in Puerto Rico and transported
to the United States (less the estimated amount necessary for
payment of refunds and drawbacks), or consumed in the island, shall
be covered into the treasury of Puerto Rico.
(b) Virgin Islands
(1) Taxes imposed in the United States
Except as provided in section 5314, there shall be imposed in
the United States, upon articles coming into the United States from
the Virgin Islands, a tax equal to the internal revenue tax imposed
in the United States upon like articles of domestic manufacture.
(2) Exemption from tax imposed in the Virgin Islands
Such articles shipped from such islands to the United States
shall be exempt from the payment of any tax imposed by the internal
revenue laws of such islands.
(3) Disposition of internal revenue collections
The Secretary shall determine the amount of all taxes imposed
by, and collected under the internal revenue laws of the United
States on articles produced in the Virgin Islands and transported
to the United States. The amount so determined less 1 percent and
less the estimated amount of refunds or credits shall be subject to
disposition as follows:
(A) The payment of an estimated amount shall be made to the
government of the Virgin Islands before the commencement of
each fiscal year as set forth in section 4(c)(2) of the Act
entitled ``An Act to authorize appropriations for certain
insular areas of the United States, and for other purposes'',
approved August 18, 1978 (48 U.S.C. 1645), as in effect on the
date of the enactment of the Trade and Development Act of 2000.
The payment so made shall constitute a separate fund in the
treasury of the Virgin Islands and may be expended as the
legislature may determine.
(B) Any amounts remaining shall be deposited in the
Treasury of the United States as miscellaneous receipts.
If at the end of any fiscal year the total of the Federal
contribution made under subparagraph (A) with respect to the four
calendar quarters immediately preceding the beginning of that
fiscal year has not been obligated or expended for an approved
purpose, the balance shall continue available for expenditure
during any succeeding fiscal year, but only for emergency relief
purposes and essential public projects. The aggregate amount of
moneys available for expenditure for emergency relief purposes and
essential public projects only shall not exceed the sum of
$5,000,000 at the end of any fiscal year. Any unobligated or
unexpended balance of the Federal contribution remaining at the end
of a fiscal year which would cause the moneys available for
emergency relief purposes and essential public projects only to
exceed the sum of $5,000,000 shall thereupon be transferred and
paid over to the Treasury of the United States as miscellaneous
receipts.
(c) Articles containing distilled spirits
For purposes of subsections (a)(3) and (b)(3), any article
containing distilled spirits shall in no event be treated as produced
in Puerto Rico or the Virgin Islands unless at least 92 percent of the
alcoholic content in such article is attributable to rum.
(d) Articles other than articles containing distilled spirits
For purposes of subsections (a)(3) and (b)(3)--
(1) Value added requirement for Puerto Rico
Any article, other than an article containing distilled
spirits, shall in no event be treated as produced in Puerto Rico
unless the sum of--
(A) the cost or value of the materials produced in Puerto
Rico, plus
(B) the direct costs of processing operations performed in
Puerto Rico,
equals or exceeds 50 percent of the value of such article as of the
time it is brought into the United States.
(2) Prohibition of Federal excise tax subsidies
(A) In general
No amount shall be transferred under subsection (a)(3) or
(b)(3) in respect of taxes imposed on any article, other than
an article containing distilled spirits, if the Secretary
determines that a Federal excise tax subsidy was provided by
Puerto Rico or the Virgin Islands (as the case may be) with
respect to such article.
(B) Federal excise tax subsidy
For purposes of this paragraph, the term ``Federal excise
tax subsidy'' means any subsidy--
(i) of a kind different from, or
(ii) in an amount per value or volume of production
greater than, the subsidy which Puerto Rico or the Virgin
Islands offers generally to industries producing articles
not subject to Federal excise taxes.
(3) Direct costs of processing operations
For purposes of this subsection, the term ``direct cost of
processing operations'' has the same meaning as when used in
section 213 of the Caribbean Basin Economic Recovery Act.
(e) Shipments of rum to the United States
(1) Excise taxes on rum covered into treasuries of Puerto
Rico and Virgin Islands
All taxes collected under section 5001(a)(1) on rum imported
into the United States (less the estimated amount necessary for
payment of refunds and drawbacks) shall be covered into the
treasuries of Puerto Rico and the Virgin Islands.
(2) Secretary prescribes formula
The Secretary shall, from time to time, prescribe by regulation
a formula for the division of such tax collections between Puerto
Rico and the Virgin Islands and the timing and methods for
transferring such tax collections.
(3) Rum defined
For purposes of this subsection, the term ``rum'' means any
article classified under subheading 2208.40.00 of the Harmonized
Tariff Schedule of the United States (19 U.S.C. 1202).
(4) Coordination with subsections (a) and (b)
Paragraph (1) shall not apply with respect to any rum subject to tax under subsection (a) or (b).
(f) Limitation on cover over of tax on distilled spirits
For purposes of this section, with respect to taxes imposed under
section 5001 or this section on distilled spirits, the amount covered
into the treasuries of Puerto Rico and the Virgin Islands shall not
exceed the lesser of the rate of--
(1) $10.50 ($13.25 in the case of distilled spirits brought into the United States after June 30, 1999, and before January 1, 2004), or
(2) the tax imposed under section 5001(a)(1), on each proof
gallon.
(g) Drawback for medicinal alcohol, etc.
In the case of medicines, medicinal preparations, food products,
flavors, flavoring extracts, or perfume containing distilled spirits,
which are unfit for beverage purposes and which are brought into the
United States from Puerto Rico or the Virgin Islands--
(1) subpart F of part II of subchapter A of chapter 51 shall be
applied as if--
(A) the use and tax determination described in section
5131(a) had occurred in the United States by a United States
person at the time the article is brought into the United
States, and
(B) the rate of tax were the rate applicable under
subsection (f) of this section, and
(2) no amount shall be covered into the treasuries of Puerto
Rico or the Virgin Islands.
(h) Manner of cover over of tax must be derived from this title
No amount shall be covered into the treasury of Puerto Rico or the
Virgin Islands with respect to taxes for which cover over is provided
under this section unless made in the manner specified in this section
without regard to--
any provision of law which is not contained in this title
or in a revenue Act; and
(2) whether such provision of law is a subsequently enacted
provision or directly or indirectly seeks to waive the application
of this subsection.
(Aug. 16, 1954, ch. 736, 68A Stat. 907; Pub. L. 85-859, title II,
Sec. 204(17), (18), Sept. 2, 1958, 72 Stat. 1430; Pub. L. 89-44, title
VIII, Sec. 808(b)(3), June 21, 1965, 79 Stat. 164; Pub. L. 94-202,
Sec. 10(a), Jan. 2, 1976, 89 Stat. 1141; Pub. L. 94-455, title XIX,
Sec. 1906(a)(55), (b) (13)(A), Oct. 4, 1976, 90 Stat. 1832, 1834; Pub.
L. 98-67, title II, Sec. 221(a), Aug. 5, 1983, 97 Stat. 395; Pub. L. 98-213, Sec. 5(c), Dec. 8, 1983, 97 Stat. 1460; Pub. L. 98-369, div. B,
title VI, Secs. 2681(a), 2682(a), July 18, 1984, 98 Stat. 1172, 1174;
Pub. L. 99-514, title XVIII, Sec. 1879(i)(1), Oct. 22, 1986, 100 Stat.
2907; Pub. L. 100-418, title I, Sec. 1214(p)(1), Aug. 23, 1988, 102
Stat. 1159; Pub. L. 103-66, title XIII, Sec. 13227(e), Aug. 10, 1993,
107 Stat. 494; Pub. L. 103-465, title I, Sec. 136(b), Dec. 8, 1994, 108
Stat. 4841; Pub. L. 106-170, title V, Sec. 512(a), Dec. 17, 1999, 113
Stat. 1924; Pub. L. 106-200, title VI, Sec. 602(b), (c), May 18, 2000,
114 Stat. 305, 306; Pub. L. 107-147, title VI, Sec. 609(a), Mar. 9,
2002, 116 Stat. 60.)
27 CFR
Sec. 26.199a Action by revenue agent.
(a) Gauge. Puerto Rican spirits to be withdrawn for shipment to the
United States as provided in this subpart shall be gauged by the revenue agent prior to withdrawal from the consignor premises. The revenue agent shall record the quantity and proof of the spirits gauged on TTB Form 5110.31. If the spirits are in packages, the revenue agent shall prepare in sextuplicate a package gauge record according to Sec. 26.164a, attach the package gauge record to TTB Form 5110.31, and dispose of the form (and any attachments) according to the instructions thereon.
(b) Sealing bulk conveyances. When a shipment is made in a tank,
van, or other bulk conveyance (other than barrels, drums, or similar
packages that are not containerized), all openings affording access to
the spirits shall be sealed by the Puerto Rican revenue agent is such
manner as will prevent unauthorized removal of spirits without
detection.
(Approved by the Office of Management and Budget under control number
1513-0056)
[T.D. ATF-198, 50 FR 8551, Mar. 1, 1985. Redesignated and amended by
T.D. ATF-459, 66 FR 38550, 38551, July 25, 2001]
Sec. 26.199b Issuance and disposition of permit.
When the Secretary receives an application on TTB Form 5110.31 and
he finds that the applicant is in compliance with law and regulations,
he will execute the permit to ship on all copies of TTB Form 5110.31,
retain one copy, and any accompanying package gauge record as provided
in Sec. 26.164a, and return the remaining copies to the consignor who
shall distribute them in accordance with the instructions on TTB Form
5110.31.
(Approved by the Office of Management and Budget under control number
1513-0056)
[T.D. ATF-198, 50 FR 8552, Mar. 1, 1985. Redesignated and amended by
T.D. ATF-459, 66 FR 38550, 38551, July 25, 2001]
Sec. 26.199c Action by carrier.
The carrier of the spirits specified on the TTB Form 5110.31 shall,
at the time of unlading at the port of arrival in the United States,
segregate and arrange the containers of spirits of convenient customs
examination and shall assume any expense incurred in connection
therewith.
Sec. 26.199d Customs inspection and release.
On receipt of a properly executed TTB Form 5110.31 from the
consignor, the customs officer at the port of arrival in the United
States shall inspect the corresponding shipment of spirits:
(a) If a shipment is in a bulk conveyance, and:
(1) The seals are intact, he shall release the shipment; or
(2) If the seals are broken, he shall, before release of the
spirits, affix customs seals.
(b) If a shipment in packages does not arrive in a sealed
conveyance, the packages shall be inspected, and if it appears that any
package has sustained a loss, the package shall be weighed and its new
gross weight shall be entered in contrasting color on the package gauge
record attached to the related TTB Form 5110.31. The serial numbers of
any seals affixed by the customs officers shall be reported on TTB Form
5110.31 under remarks with an explanation and description of any
evidence of loss. After completing his inspection, the customs officer shall execute his certificate on each copy of TTB Form 5110.31 and show thereon any exceptions found at the time of his release for transfer of the spirits to internal revenue bond. Missing packages should be reported separately from packages which have sustained losses. The customs officer shall then release the spirits to the consignee's representative and distribute all forms in accordance with the instructions on TTB Form 5110.31.
(Approved by the Office of Management and Budget under control number
1513-0056)
[T.D. ATF-198, 50 FR 8552, Mar. 1, 1985]
Sec. 26.199f Consignee premises.
(a) General. When Puerto Rican spirits are received from customs
custody under the provisions of this subpart, the consignee proprietor
shall execute the certificate of receipt on TTB Form 5110.31 and examine all containers for evidence of loss. If it appears that spirits were lost by theft or unusual event, the proprietor shall determine the
quantity of spirits lost and report the loss according to 27 CFR 19.562.
(b) Packages. Packages shall be received on bonded premises by the
proprietor on the basis of the most recent official gauge.
(c) Distribution of forms. The proprietor shall keep and send copies according the instructions on the form.
(Approved by the Office of Management and Budget under control numbers
1513-0043 and 1513-0056)
[T.D. ATF-198, 50 FR 8552, Mar. 1, 1985, as amended by T.D. ATF-451, 66
FR 21670, May 1, 2001]
| File Type | application/msword |
| File Title | From the U |
| Author | TTB |
| Last Modified By | TTB |
| File Modified | 2008-11-25 |
| File Created | 2005-10-03 |