PRIA Logo™
Title 26, Internal Revenue CodeRelease 119-110

§5010 Credit for Wine Content and for Flavors Content

Title 26 › Subtitle E — Alcohol, Tobacco, and Certain Other Excise Taxes › CHAPTER 51 — DISTILLED SPIRITS, WINES, AND BEER › Subchapter A — Gallonage and Occupational Taxes › PART I — GALLONAGE TAXES › Subpart A — Distilled Spirits › § 5010

Last updated Sep 22, 2026|Official source

Summary

Allows a tax credit against the tax on distilled spirits for the alcohol that comes from wine and for alcohol that comes from flavoring materials. For each proof gallon of wine-derived alcohol, the credit equals $13.50 minus the tax that would apply to that wine if it were removed to bonded storage. For each proof gallon of flavor-derived alcohol, the credit is $13.50. Partial proof gallons get a proportional credit. The credit is figured when the usual tax on the spirits is worked out and is applied when that tax is paid, like a lower tax rate. For imports, wine and flavor amounts are shown by chemical tests or other methods set by the Treasury. "Wine content" means alcohol from wine. "Flavors content" means alcohol from flavorings that can get a tax refund, but not flavor alcohol made or distilled at a distillery and not flavor alcohol over 2½ percent of the finished product.

Full Legal Text

Title 26, §5010

Internal Revenue Code, Source: USLM XML via OLRC

(a)Allowance of credit
(1)Wine content
On 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)
(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 content
On 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 gallon
In 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 general
The 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 imports
For 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)Definitions
For purposes of this section
(1) Wine content
(2)Flavors content
(A)In general
Except 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)Exceptions
The 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.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section 5010, act Aug. 16, 1954, ch. 736, 68A Stat. 603, related to miscellaneous stamp provisions, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

2005—Subsec. (c)(2)(A). Pub. L. 109–59 substituted “section 5114” for “section 5134”. 1990—Subsec. (a)(1), (2). Pub. L. 101–508 substituted “$13.50” for “$12.50”. 1988—Subsec. (c)(2)(B). Pub. L. 100–647 added cl. (ii) and redesignated former cl. (ii) as (iii). 1984—Subsec. (a)(1), (2). Pub. L. 98–369 substituted “$12.50” for “$10.50”.

Statutory Notes and Related Subsidiaries

Effective Date

of 2005 AmendmentAmendment by Pub. L. 109–59 effective July 1, 2008, but inapplicable to taxes imposed for periods before such date, see section 11125(c) of Pub. L. 109–59, set out as a note under section 5002 of this title.

Effective Date

of 1990 AmendmentAmendment by Pub. L. 101–508 effective Jan. 1, 1991, see section 11201(d) of Pub. L. 101–508, set out as a note under section 5001 of this title.

Effective Date

of 1988 Amendment Pub. L. 100–647, title V, § 5063(b), Nov. 10, 1988, 102 Stat. 3681, provided that: “The

Amendments

made by this section [amending this section] shall apply with respect to distilled spirits withdrawn from bond after the date of the enactment of this Act [Nov. 10, 1988].”

Effective Date

of 1984 AmendmentAmendment by Pub. L. 98–369 effective Oct. 1, 1985, see section 27(d)(1) of Pub. L. 98–369, set out as a note under section 5001 of this title.

Effective Date

Pub. L. 96–598, § 6(c), Dec. 24, 1980, 94 Stat. 3489, provided that: “The

Amendments

made by subsections (a) and (b) [enacting this section] shall take effect on January 1, 1980.”

Reference

Citations & Metadata

Citation

26 U.S.C. § 5010

Title 26, Internal Revenue Code

Last Updated

Sep 22, 2026

Release point: 119-110