Tiered Wine Production Credit

§ 5041. Imposition and rate of tax(a) ImpositionThere is hereby imposed on all wines (including imitation, substandard, or artificial wine, and compounds sold as wine) having not in excess of 24 percent of alcohol by volume, in bond in, produced in, or imported into, the United States, taxes at the rates shown in subsection (b), such taxes to be determined as of the time of removal for consumption or sale. All wines containing more than 24 percent of alcohol by volume shall be classed as distilled spirits and taxed accordingly. Subject to subsection (h), still wines shall include those wines containing not more than 0.392 gram of carbon dioxide per hundred milliliters of wine; except that the Secretary may by regulations prescribe such tolerances to this maximum limitation as may be reasonably necessary in good commercial practice. (b) Rates of tax(1) On still wines containing not more than 16 percent of alcohol by volume, $1.07 per wine gallon; (2) On still wines containing more than 16 percent and not exceeding 21 percent of alcohol by volume, $1.57 per wine gallon; (3) On still wines containing more than 21 percent and not exceeding 24 percent of alcohol by volume, $3.15 per wine gallon; (4) On champagne and other sparkling wines, $3.40 per wine gallon; (5) On artificially carbonated wines, $3.30 per wine gallon; and (6) On hard cider, 22.6 cents per wine gallon. (c) Credit(1) Allowance of credit(A) In generalThere shall be allowed as a credit against any tax imposed by this title (other than chapters 2, 21, and 22) an amount equal to the sum of—(i) $1 per wine gallon on the first 30,000 wine gallons of wine, plus (ii) 90 cents per wine gallon on the first 100,000 wine gallons of wine to which clause (i) does not apply, plus (iii) 53.5 cents per wine gallon on the first 620,000 wine gallons of wine to which clauses (i) and (ii) do not apply, which are produced by the producer and removed during the calendar year for consumption or sale, or which are imported by the importer into the United States during the calendar year but only if the importer is an electing importer under paragraph (6) and the wine gallons of wine have been assigned to the importer pursuant to such paragraph. (B) Adjustment of credit for hard ciderIn the case of wine described in subsection (b)(6), subparagraph (A) of this paragraph shall be applied—(i) in clause (i) of such subparagraph, by substituting “6.2 cents” for “$1”, (ii) in clause (ii) of such subparagraph, by substituting “5.6 cents” for “90 cents”, and (iii) in clause (iii) of such subparagraph, by substituting “3.3 cents” for “53.5 cents”. (2) Time for determining and allowing creditThe credit allowable by paragraph (1)—(A) shall be determined at the same time the tax is determined under subsection (a) of this section, and