Public Law 109-59

Public Law 109-59.txt

Special (occupational) Tax Registration and Return

Public Law 109-59

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SAFE, ACCOUNTABLE, FLEXIBLE, EFFICIENT TRANSPORTATION EQUITY ACT: A 
                            LEGACY FOR USERS

[[Page 119 STAT. 1144]]

Public Law 109-59
109th Congress

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     TITLE XI--HIGHWAY REAUTHORIZATION AND EXCISE TAX SIMPLIFICATION

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            Subtitle B--Excise Tax Reform and Simplification

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                    PART 4--TAXES RELATING TO ALCOHOL

SEC. 11125. REPEAL OF SPECIAL OCCUPATIONAL TAXES ON PRODUCERS AND 
            MARKETERS OF ALCOHOLIC BEVERAGES.

    (a) Repeal of Occupational Taxes.--
            (1) In general.--The following provisions of part II of 
        subchapter A of chapter 51 (relating to occupational taxes) are 
        hereby repealed:
                    (A) <<NOTE: 26 USC 5081.>> Subpart A (relating to 
                proprietors of distilled spirits plants, bonded wine 
                cellars, etc.).
                    (B) <<NOTE: 26 USC 5091-5093. 26 USC 5111-5113, 
                5117. 26 USC 5121-5123.>> 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) <<NOTE: 26 USC 5141, 5147-5149.>> Subpart G 
                (relating to general provisions) (other than sections 
                5142, 5143, 5145, and 5146).
            (2) Nonbeverage domestic drawback.--Section 5131 is amended 
        by striking ``, on payment of a special tax per annum,''.
            (3) Industrial use of distilled spirits.--Section 5276 is 
        hereby repealed.

    (b) Conforming Amendments.--
            (1)(A) The heading for part II of subchapter A of chapter 51 
        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 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

[[Page 119 STAT. 1954]]

                    (ii) by striking ``and rate of tax'' in the item 
                relating to section 5111, as so redesignated.
            (C) Section 5111, 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 is amended by 
        adding after subpart B, as redesignated by paragraph (3), the 
        following new subpart:

         ``Subpart C--Recordkeeping and Registration 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.
``Sec. 5124. Registration by dealers.''.

            (5)(A) Section 5114 (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 is amended--
                    (i) by striking the section heading and inserting 
                the following new heading:

``SEC. 5432. 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), as so redesignated, is 
        amended by striking ``section 5146'' and inserting ``section 
        5123''.

[[Page 119 STAT. 1955]]

            (6)(A) Section 5124 (relating to records) is moved to 
        subpart C of part II of subchapter A of chapter 51 and inserted 
        after section 5121.
            (B) Section 5124 is amended--
                    (i) by striking the section heading and inserting 
                the following new heading:

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

            (ii) <<NOTE: 26 USC 5122.>> by striking ``section 5146'' in 
        subsection (c) and inserting ``section 5123'', and
            (iii) <<NOTE: 26 USC 5122.>> 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 is moved to subpart C of part II of 
        subchapter A of chapter 51, inserted after section 5122, and 
        redesignated as section 5123.
            (8) Subpart C of part II of subchapter A of chapter 51, 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 the 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 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 is amended by 
        inserting after subpart C the following new subpart:

[[Page 119 STAT. 1956]]

                      ``Subpart D--Other Provisions

``Sec. 5131. Packaging distilled spirits for industrial uses.
``Sec. 5132. Prohibited purchases by dealers.''.

            (11) Section 5116 is moved to subpart D of part II of 
        subchapter A of chapter 51, 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 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 is amended--
                    (A) by striking ``section 5112(a)'' and inserting 
                ``section 5121(c)(3)'',
                    (B) by striking ``section 5112'' and inserting 
                ``section 5121(c)'', and
                    (C) by striking ``section 5122'' and inserting 
                ``section 5122(c)''.
            (14) Subparagraph (A) of section 5010(c)(2) is amended by 
        striking ``section 5134'' and inserting ``section 5114''.
            (15) Subsection (d) of section 5052 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 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 is amended by striking 
        ``section 5092'' and inserting ``section 5052(d)''.
            (18) Section 5671 is amended by striking ``or 5091''.
            (19)(A) Part V of subchapter J of chapter 51 <<NOTE: 26 USC 
        5691.>> 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 are moved to 
        subchapter D of chapter 52, 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, as redesignated by subparagraph (A), is 
        amended by striking ``(except the tax imposed by section 5131)'' 
        each place it appears.

[[Page 119 STAT. 1957]]

            (C) Paragraph (2) of section 5733(c), 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 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 is amended by striking subsection (c) and 
        by redesignating subsection (d) as subsection (c).
            (21) Subsection (c) of section 6071 is amended by striking 
        ``section 5142'' and inserting ``section 5732''.
            (22) Paragraph (1) of section 7652(g) is amended--
                    (A) by striking ``subpart F'' and inserting 
                ``subpart B'', and
                    (B) by striking ``section 5131(a)'' and inserting 
                ``section 5111''.

    (c) <<NOTE: 26 USC 5002 note.>> Effective Date.--The amendments made 
by this section shall take effect on July 1, 2008, but shall not apply 
to taxes imposed for periods before such date.

SEC. 11126. INCOME TAX CREDIT FOR DISTILLED SPIRITS WHOLESALERS AND FOR 
            DISTILLED SPIRITS IN CONTROL STATE BAILMENT WAREHOUSES FOR 
            COSTS OF CARRYING FEDERAL EXCISE TAXES ON BOTTLED DISTILLED 
            SPIRITS.

    (a) In General.--Subpart A of part I of subchapter A of chapter 51 
(relating to gallonage and occupational taxes) is amended by adding at 
the end the following new section:

``SEC. 5011. INCOME TAX CREDIT FOR AVERAGE COST OF CARRYING EXCISE TAX.

    ``(a) In General.--For purposes of section 38, the amount of the 
distilled spirits credit for any taxable year is the amount equal to the 
product of--
            ``(1) in the case of--
                    ``(A) any eligible wholesaler, the number of cases 
                of bottled distilled spirits--
                          ``(i) which were bottled in the United States, 
                      and
                          ``(ii) which are purchased by such wholesaler 
                      during the taxable year directly from the bottler 
                      of such spirits, or
                    ``(B) any person which is subject to section 5005 
                and which is not an eligible wholesaler, the number of 
                cases of bottled distilled spirits which are stored in a 
                warehouse operated by, or on behalf of, a State or 
                political subdivision thereof, or an agency of either, 
                on which title has not passed on an unconditional sale 
                basis, and
            ``(2) the average tax-financing cost per case for the most 
        recent calendar year ending before the beginning of such taxable 
        year.

    ``(b) Eligible Wholesaler.--For purposes of this section, the term 
`eligible wholesaler' means any person which holds a permit under the 
Federal Alcohol Administration Act as a wholesaler of distilled spirits 
which is not a State or political subdivision thereof, or an agency of 
either.
    ``(c) Average Tax-Financing Cost.--

[[Page 119 STAT. 1958]]

            ``(1) In general.--For purposes of this section, the average 
        tax-financing cost per case for any calendar year is the amount 
        of interest which would accrue at the deemed financing rate 
        during a 60-day period on an amount equal to the deemed Federal 
        excise tax per case.
            ``(2) Deemed financing rate.--For purposes of paragraph (1), 
        the deemed financing rate for any calendar year is the average 
        of the corporate overpayment rates under paragraph (1) of 
        section 6621(a) (determined without regard to the last sentence 
        of such paragraph) for calendar quarters of such year.
            ``(3) Deemed federal excise tax per case.--For purposes of 
        paragraph (1), the deemed Federal excise tax per case is $25.68.

    ``(d) Other Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Case.--The term `case' means 12 80-proof 750-
        milliliter bottles.
            ``(2) Number of cases in lot.--The number of cases in any 
        lot of distilled spirits shall be determined by dividing the 
        number of liters in such lot by 9.''.

    (b) Credit Treated as Part of General Business Credit.--Section 
38(b) (relating to current year business credit) is amended by striking 
``plus'' at the end of paragraph (18), by striking the period at the end 
of paragraph (19), and inserting ``, plus'', and by adding at the end 
the following new paragraph:
            ``(20) the distilled spirits credit determined under section 
        5011(a).''.

    (c) Conforming Amendment.--The table of sections for subpart A of 
part I of subchapter A of chapter 51 is amended by adding at the end the 
following new item:

``Sec. 5011. Income tax credit for average cost of carrying excise 
           tax.''.

    (d) <<NOTE: 26 USC 38 note.>> Effective Date.--The amendments made 
by this section shall apply to taxable years beginning after September 
30, 2005.

SEC. 11127. QUARTERLY EXCISE TAX FILING FOR SMALL ALCOHOL EXCISE 
            TAXPAYERS.

    (a) In General.--Subsection (d) of section 5061 (relating to time 
for collecting tax on distilled spirits, wines, and beer) 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) Taxpayers liable for taxes of not more than $50,000.--
                    ``(A) In general.--In the case of any taxpayer who 
                reasonably expects to be liable for not more than 
                $50,000 in taxes imposed with respect to distilled 
                spirits, wines, and beer under subparts A, C, and D and 
                section 7652 for the calendar year and who was liable 
                for not more than $50,000 in such taxes in the preceding 
                calendar year, the last day for the payment of tax on 
                withdrawals, removals, and entries (and articles brought 
                into the United States from Puerto Rico) under bond for 
                deferred payment shall be the 14th day after the last 
                day of the calendar quarter during which the action 
                giving rise to the imposition of such tax occurs.
                    ``(B) <<NOTE: Deadline.>> No application after limit 
                exceeded.--Subparagraph (A) shall not apply to any 
                taxpayer for any

[[Page 119 STAT. 1959]]

                portion of the calendar year following the first date on 
                which the aggregate amount of tax due under subparts A, 
                C, and D and section 7652 from such taxpayer during such 
                calendar year exceeds $50,000, and any tax under such 
                subparts which has not been paid on such date shall be 
                due on the 14th day after the last day of the 
                semimonthly period in which such date occurs.
                    ``(C) Calendar quarter.--For purposes of this 
                paragraph, the term `calendar quarter' means the three-
                month period ending on March 31, June 30, September 30, 
                or December 31.''.

    (b) Conforming Amendment.--Section 5061(d)(6), as redesignated by 
subsection (a), is amended by striking ``paragraph (4)'' and inserting 
``paragraph (5)''.
    (c) <<NOTE: 26 USC 5061 note.>> Effective Date.--The amendments made 
by this section shall apply with respect to quarterly periods beginning 
on and after January 1, 2006.

                       PART 5--SPORT EXCISE TAXES

SEC. 11131. CUSTOM GUNSMITHS.

    (a) Small Manufacturers Exempt From Firearms Excise Tax.--Section 
4182 (relating to exemptions) is amended by redesignating subsection (c) 
as subsection (d) and by inserting after subsection (b) the following 
new subsection:
    ``(c) Small Manufacturers, Etc.--
            ``(1) In general.--The tax imposed by section 4181 shall not 
        apply to any pistol, revolver, or firearm described in such 
        section if manufactured, produced, or imported by a person who 
        manufactures, produces, and imports less than an aggregate of 50 
        of such articles during the calendar year.
            ``(2) Controlled groups.--All persons treated as a single 
        employer for purposes of subsection (a) or (b) of section 52 
        shall be treated as one person for purposes of paragraph (1).''.

    (b) <<NOTE: 26 USC 4182 note.>> Effective Date.--
            (1) In general.--The amendments made by this section shall 
        apply to articles sold by the manufacturer, producer, or 
        importer after September 30, 2005.
            (2) No inference.--Nothing in the amendments made by this 
        section shall be construed to create any inference with respect 
        to the proper tax treatment of any sales before the effective 
        date of such amendments.

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