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Title 26 — Internal Revenue CodeRelease 119-73

§5010 Credit for Wine Content and for Flavors Content

Title 26 › Subtitle 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 Apr 6, 2026|Official source

Summary

Makers of distilled spirits that contain wine or certain flavors get a credit against the federal spirits tax. For the wine portion, the credit is the difference between $13.50 per proof gallon and the lower tax rate the wine would normally carry. For the flavors portion, the credit is the full $13.50 per proof gallon, but alcohol from flavors above 2½ percent of the finished product does not count. Partial gallons get a proportional credit. The credit works like a cut in the tax rate, applied when the tax on the spirits is figured and paid. For imported spirits, the wine and flavor content must be proven by chemical analysis, certification, or other methods the government approves.

Full Legal Text

Title 26, §5010

Internal Revenue Code — Source: USLM XML via OLRC

(a)(1)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)$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)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)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)(1)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)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)For purposes of this section—
(1)(A)The term “wine content” means alcohol derived from wine.
(B)The 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)(A)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)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

Apr 6, 2026

Release point: 119-73