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Title 26 — Internal Revenue CodeRelease 119-73

§5201 Regulation of Operations

Title 26 › Subtitle Subtitle E— Alcohol, Tobacco, and Certain Other Excise Taxes › Chapter 51— DISTILLED SPIRITS, WINES, AND BEER › Subchapter C— Operation of Distilled Spirits Plants › Part I— GENERAL PROVISIONS › § 5201

Last updated Apr 6, 2026|Official source

Summary

Distilled spirits plants must run all their operations under rules written by the Treasury Secretary. For spirits used in industry, the regulations are meant to protect tax revenue, prevent diversion of alcohol to illegal uses, and keep the industry operating efficiently. When nonpotable chemical mixtures containing spirits are made for transfer to a plant's bonded premises for further processing, the Secretary can waive certain requirements, and the later processing counts as production of distilled spirits. The Secretary may also set hours for distillery operations and for removing spirits from plants, but those rules cannot be more restrictive than the ones in effect just before this section took effect. Finally, the Secretary can require tracer elements to be added to distilled spirits to help enforcement, as long as they do not impair the quality of the spirits for their intended use.

Full Legal Text

Title 26, §5201

Internal Revenue Code — Source: USLM XML via OLRC

(a)Proprietors of distilled spirits plants shall conduct all operations authorized to be conducted on the premises of such plants under such regulations as the Secretary shall prescribe.
(b)The regulations of the Secretary under this chapter respecting the production, warehousing, denaturing, distribution, sale, export, and use of distilled spirits for industrial purposes shall be such as he deems necessary, advisable, or proper to secure the revenue, to prevent diversion to illegal uses, and to place the distilled spirits industry and other industries using such distilled spirits as a chemical raw material or for other lawful industrial purposes on the highest possible plane of scientific and commercial efficiency and development consistent with the provisions of this chapter. Where nonpotable chemical mixtures containing distilled spirits are produced for transfer to the bonded premises of a distilled spirits plant for completion of processing, the Secretary may waive any provision of this chapter with respect to the production of such mixtures, and the processing of such mixtures on the bonded premises shall be deemed to be production of distilled spirits for purposes of this chapter.
(c)The Secretary may prescribe regulations relating to hours for distillery operations and to hours for removal of distilled spirits from distilled spirits plants; however, such regulations shall not be more restrictive, as to any operation or function, that the provisions of internal revenue law and regulations relating to such operation or function in effect on the day preceding the effective date of this section.
(d)The Secretary may provide by regulations for the addition of tracer elements to distilled spirits to facilitate the enforcement of this chapter. Tracer elements to be added to distilled spirits at any distilled spirits plant under provisions of this subsection shall be of such character and in such quantity as the Secretary may authorize or require, and such as will not impair the quality of the distilled spirits for their intended use.

Legislative History

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

Provisions similar to those comprising subsecs. (a) to (c) of this section were contained in prior sections of act Aug. 16, 1954, prior to the general revision of this chapter by Pub. L. 85–859, as follows: Present subsecs.:Prior sections (a)5193(a), 5194(g), 5241(a), 5281, 5282(a), 5302, 5305–5307, 5319(6). (b)5305 (c)5195, 5215, 5306. The prior sections, act Aug. 16, 1954, ch. 736, are set out in 68A Stat. 633, 636, 640, 644, 651, 654, 657, 661.

Amendments

1979—Subsec. (a). Pub. L. 96–39 substituted “all operations authorized to be conducted” for “their operations relating to the production, storage, denaturing, rectification and bottling of distilled spirits, and all other operations authorized to be conducted”. 1976—Subsecs. (a) to (d). Pub. L. 94–455 struck out “or his delegate” after “Secretary” wherever appearing.

Statutory Notes and Related Subsidiaries

Effective Date

of 1979 AmendmentAmendment by Pub. L. 96–39 effective Jan. 1, 1980, see section 810 of Pub. L. 96–39, set out as a note under section 5001 of this title.

Effective Date

Section effective July 1, 1959, see section 210(a)(1) of Pub. L. 85–859, set out as a note under section 5001 of this title.

Reference

Citations & Metadata

Citation

26 U.S.C. § 5201

Title 26 — Internal Revenue Code

Last Updated

Apr 6, 2026

Release point: 119-73