§5010 Credit for Wine Content and for Flavors Content

Summary

Gives a tax credit for the alcohol in distilled spirits that comes from wine or from flavorings. For the wine part, the credit equals $13.50 per proof gallon minus whatever tax would have applied to that wine if it had not been moved to bonded storage. For the flavors part, the credit is $13.50 per proof gallon. Partial proof gallons get a matching smaller credit. The credit is calculated when the spirits tax is figured and is applied when the tax is paid, acting like a lower tax rate. Imported spirits’ wine and flavors amounts must be shown by testing, paperwork, or other methods set by the Treasury Secretary. Wine content means alcohol that comes from wine. Wine means wine that would normally be taxed if not moved to bonded storage and does not include things that were redistilled at a spirits plant after arriving in bond. Flavors content means alcohol from flavorings that qualify for a tax drawback, but not alcohol from flavors made or distilled at a spirits plant, and not the portion that is more than 2.5% (by proof gallon) of the finished product.