Credit for Wine and Flavors Content

§ 5010. Credit for wine content and for flavors content(a) Allowance of credit(1) Wine contentOn each proof gallon of the wine content of distilled spirits, there shall be allowed a credit against the tax imposed by section 5001 (or 7652) equal to the excess of—(A) $13.50, over (B) the rate of tax which would be imposed on the wine under section 5041(b) but for its removal to bonded premises. (2) Flavors contentOn each proof gallon of the flavors content of distilled spirits, there shall be allowed a credit against the tax imposed by section 5001 (or 7652) equal to $13.50. (3) Fractional part of proof gallonIn the case of any fractional part of a proof gallon of the wine content, or of the flavors content, of distilled spirits, a proportionate credit shall be allowed. (b) Time for determining and allowing credit(1) In generalThe credit allowable by subsection (a)—(A) shall be determined at the same time the tax is determined under section 5006 (or 7652) on the distilled spirits containing the wine or flavors, and (B) shall be allowable at the time the tax imposed by section 5001 (or 7652) on such distilled spirits is payable as if the credit allowable by this section constituted a reduction in the rate of tax. (2) Determination of content in the case of importsFor purposes of this section, the wine content, and the flavors content, of imported distilled spirits shall be established by such chemical analysis, certification, or other methods as may be set forth in regulations prescribed by the Secretary. (c) DefinitionsFor purposes of this section—(1) Wine content(A) In generalThe term “wine content” means alcohol derived from wine. (B) WineThe term “wine”—(i) means wine on which tax would be imposed by paragraph (1), (2), or (3) of section 5041(b) but for its removal to bonded premises, and (ii) does not include any substance which has been subject to distillation at a distilled spirits plant after receipt in bond. (2) Flavors content(A) In generalExcept as provided in subparagraph (B), the term “flavors content” means alcohol derived from flavors of a type for which drawback is allowable under section 5114. (B) ExceptionsThe term “flavors content” does not include—(i) alcohol derived from flavors made at a distilled spirits plant, (ii) alcohol derived from flavors distilled at a distilled spirits plant, and (iii) in the case of any distilled spirits product, alcohol derived from flavors to the extent such alcohol exceeds (on a proof gallon basis) 2½ percent of the finished product. (Added Pub. L. 96–598, § 6(a), Dec. 24, 1980, 94 Stat. 3488; amended Pub. L. 98–369, div. A, title I, § 27(a)(2), July 18, 1984, 98 Stat. 507; Pub. L. 100–647, title V, § 5063(a), Nov. 10, 1988, 102 Stat. 3681; Pub. L. 101–508, title XI, § 11201(a)(2), Nov. 5, 1990, 104 Stat. 1388–415; Pub. L. 109–59, title XI, § 11125(b)(14), Aug. 10, 2005, 119 Stat. 1956.)