PRIA Logo™
Take the PRIA Score
Title 26 — Internal Revenue CodeRelease 119-73

§5373 Wine spirits

Title 26 › Subtitle Subtitle E— - Alcohol, Tobacco, and Certain Other Excise Taxes › Chapter CHAPTER 51— - DISTILLED SPIRITS, WINES, AND BEER › Subchapter Subchapter F— - Bonded and Taxpaid Wine Premises › Part PART II— - OPERATIONS › § 5373

Last updated Apr 6, 2026|Official source

Summary

Only brandy or wine spirits made in a distillery from fresh or dried fruit (or their leftovers), from wine (or its leftovers), or from certain natural wine allowed by the Secretary can be used to make wine. The owner of a bonded wine cellar may take those wine spirits tax-free from a distillery or another bonded cellar to make natural wine, to add to grape juice for wine, or for other uses the law allows. If the spirits are not used as allowed, they can be moved back to a distillery or bonded cellar, or taxes can be paid and they removed. When spirits are used, moved, or taxed, the government will credit the owner for the amount involved and for losses in transit or on the cellar up to the limit in section 5008(a). If spirits were used in making wine in violation of the rules but the owner proves they did not know, the credit still applies. Small samples of brandy or wine spirits may be taken tax-free for testing under the Secretary’s rules. The Secretary may also let unfinished distillates that contain aldehydes be moved tax-free to a nearby bonded wine cellar and used there to ferment wine that will later be used as distilling material, if that will not hurt tax revenue or create extra supervision.

Full Legal Text

Title 26, §5373

Internal Revenue Code — Source: USLM XML via OLRC

(a)The wine spirits authorized to be used in wine production shall be brandy or wine spirits produced in a distilled spirits plant (with or without the use of water to facilitate extraction and distillation) exclusively from—
(1)fresh or dried fruit, or their residues,
(2)the wine or wine residues, therefrom, or
(3)special natural wine under such conditions as the Secretary may by regulations prescribe;
(b)(1)The proprietor of any bonded wine cellar may withdraw and receive wine spirits without payment of tax from the bonded premises of any distilled spirits plant, or from any bonded wine cellar as provided in paragraph (2), for use in the production of natural wine, for addition to concentrated or unconcentrated juice for use in wine production, or for such other uses as may be authorized in this subchapter.
(2)Wine spirits so withdrawn, and not used in wine production or as otherwise authorized in this subchapter, may, as provided by regulations prescribed by the Secretary, be transferred to the bonded premises of any distilled spirits plant or bonded wine cellar, or may be taxpaid and removed as provided by law.
(3)On such use, transfer, or taxpayment, the Secretary shall credit the proprietor with the amount of wine spirits so used or transferred or taxpaid and, in addition, with such portion of wine spirits so withdrawn as may have been lost either in transit or on the bonded wine cellar premises, to the extent allowable under section 5008(a). Where the proprietor has used wine spirits in actual wine production but in violation of the requirements of this subchapter, the Secretary shall also extend such credit to the wine spirits so used if the proprietor satisfactorily shows that such wine spirits were not knowingly used in violation of law.
(4)Suitable samples of brandy or wine spirits may, under regulations prescribed by the Secretary, be withdrawn free of tax from the bonded premises of any distilled spirits plant, bonded wine cellar, or authorized experimental premises, for analysis or testing.
(c)When the Secretary deems such removal and use will not jeopardize the revenue nor unduly increase administrative supervision, distillates containing aldehydes may, under such regulations as the Secretary may prescribe, be removed without payment of tax from the bonded premises of a distilled spirits plant to an adjacent bonded wine cellar and used therein in fermentation of wine to be used as distilling material at the distilled spirits plant from which such unfinished distilled spirits were removed.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section 5373, act Aug. 16, 1954, ch. 736, 68A Stat. 667, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

1976—Pub. L. 94–455 struck out “or his delegate” after “Secretary” wherever appearing. 1968—Subsec. (a). Pub. L. 90–619 inserted special natural wine, under conditions prescribed by

Regulations

, as one of the materials from which wine spirits may be produced and extended to special natural wines the existing prohibition on the use of natural wine whose sugars have been refermented.

Statutory Notes and Related Subsidiaries

Effective Date

of 1968 Amendment Pub. L. 90–619, § 6, Oct. 22, 1968, 82 Stat. 1237, provided that: “The

Amendments

made by this Act [amending this section and sections 5382 to 5387 of this title] shall take effect on the first day of the first month which begins 90 days or more after the date of the enactment of this Act [Oct. 22, 1968].”

Reference

Citations & Metadata

Citation

26 U.S.C. § 5373

Title 26 — Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73