§5362 — Title 26 Internal Revenue Code | U.S. Code

Summary

Wine leaves a bonded wine cellar in two main ways. The normal way is paying the federal tax when it is withdrawn. But untaxed wine can also move "in bond" between bonded premises, meaning a bonded wine cellar or the bonded part of a distilled spirits plant, without the move counting as a taxable removal. Wine sent to a distilled spirits plant can be used to make a distilled spirits product but cannot leave that plant to be sold or drunk as wine, and the tax liability sticks with it until it is used in a spirits product. Untaxed wine can also be withdrawn without paying tax for export, transfer to a foreign-trade zone or customs bonded warehouse, use on certain vessels and aircraft, making vinegar, or distillation at an authorized plant. It can be withdrawn completely free of tax for scientific research at universities and research institutions, for the proprietor's own analysis and testing, and for use by the federal government or by state and local governments for testing and research. Wine made unfit for drinking can be withdrawn tax-free if it has no more than 21 percent alcohol by volume and is not used in beverage products. Wine in customs bonded warehouses may be withdrawn tax-free for the official or family use of foreign governments and diplomats who are entitled to that benefit, but that wine cannot be sold or used for anything else.

Title 26, §5362

Internal Revenue Code — Source: USLM XML via OLRC

(a)Wine may be withdrawn from bonded wine cellars on payment or determination of the tax thereon, under such regulations as the Secretary shall prescribe.

(b)(1)Wine on which the tax has not been paid or determined may, under such regulations as the Secretary shall prescribe, be transferred in bond between bonded premises.

(2)Any wine transferred to the bonded premises of a distilled spirits plant—

(A)may be used in the manufacture of a distilled spirits product, and

(B)may not be removed from such bonded premises for consumption or sale as wine.

(3)The liability for tax on wine transferred to the bonded premises of a distilled spirits plant pursuant to paragraph (1) shall (except as otherwise provided by law) continue until the wine is used in a distilled spirits product.

(4)For purposes of this chapter, the removal of wine for transfer in bond between bonded premises shall not be treated as a removal for consumption or sale.

(5)For purposes of this subsection, the term “bonded premises” means a bonded wine cellar or the bonded premises of a distilled spirits plant.

(c)Wine on which the tax has not been paid or determined may, under such regulations and bonds as the Secretary may deem necessary to protect the revenue, be withdrawn from bonded wine cellars—

(1)without payment of tax for export by the proprietor or by any authorized exporter;

(2)without payment of tax for transfer to any foreign-trade zone;

(3)without payment of tax for use of certain vessels and aircraft as authorized by law;

(4)without payment of tax for transfer to any customs bonded warehouse;

(5)without payment of tax for use in the production of vinegar;

(6)without payment of tax for use in distillation in any distilled spirits plant authorized to produce distilled spirits;

(7)free of tax for experimental or research purposes by any scientific university, college of learning, or institution of scientific research;

(8)free of tax for use by or for the account of the proprietor or his agents for analysis or testing, organoleptic or otherwise; and

(9)free of tax for use by the United States or any agency thereof, and for use for analysis, testing, research, or experimentation by the governments of the several States and the District of Columbia or of any political subdivision thereof or by any agency of such governments. No bond shall be required of any such government or agency under this paragraph.

(d)Under such regulations as the Secretary may deem necessary to protect the revenue, wine, or wine products made from wine, when rendered unfit for beverage use, on which the tax has not been paid or determined, may be withdrawn from bonded wine cellars free of tax. The wine or wine products to be so withdrawn may be treated with methods or materials which render such wine or wine products suitable for their intended use. No wine or wine products so withdrawn shall contain more than 21 percent of alcohol by volume, or be used in the compounding of distilled spirits or wine for beverage use or in the manufacture of any product intended to be used in such compounding.

(e)(1)Notwithstanding any other provision of law, wine entered into customs bonded warehouses under subsection (c)(4) may, under such regulations as the Secretary may prescribe, be withdrawn from such warehouses for consumption in the United States by and for the official or family use of such foreign governments, organizations, and individuals who are entitled to withdraw imported wines from such warehouses free of tax. Wines transferred to customs bonded warehouses under subsection (c)(4) shall be entered, stored, and accounted for in such warehouses under such regulations and bonds as the Secretary may prescribe, and may be withdrawn therefrom by such governments, organizations, and individuals free of tax under the same conditions and procedures as imported wines.

(2)Wine entered into customs bonded warehouses under subsection (c)(4) for purposes of removal under paragraph (1) may be withdrawn therefrom for domestic use. Wines so withdrawn shall be treated as American goods exported and returned.

(3)Wine withdrawn from customs bonded warehouses or otherwise brought into the United States free of tax for the official or family use of foreign governments, organizations, or individuals authorized to obtain wine free of tax shall not be sold and shall not be disposed of or possessed for any use other than an authorized use. The provisions of paragraphs (1)(B) and (3) of section 5043(a) are hereby extended and made applicable to any person selling, disposing of, or possessing any wine in violation of the preceding sentence, and to the wine involved in any such violation.

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section 5362, act Aug. 16, 1954, ch. 736, 68A Stat. 665, consisted of provisions similar to those comprising this section, prior to the general revision of this chapter by Pub. L. 85–859.

Amendments

1980—Subsec. (c)(4). Pub. L. 96–601, § 2(a), substituted “customs bonded” for “class 6 customs manufacturing”. Subsec. (e). Pub. L. 96–601, § 2(b), added subsec. (e). 1979—Subsec. (b). Pub. L. 96–39 substituted references to bonded premises for references to bonded wine cellars and inserted provisions relating to wine transferred in bond to a distilled spirits plant which may not be removed for consumption or sale as wine, provisions relating to continued liability for tax on wine transferred to bonded premises, and provisions defining “bonded premises”. 1976—Subsecs. (a) to (c). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary” wherever appearing. Subsec. (c)(9). Pub. L. 94–455, § 1905(c)(4), struck out “and Territories” after “the several States”. Subsec. (d). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”. 1967—Subsec. (d). Pub. L. 90–73 added subsec. (d).

Statutory Notes and Related Subsidiaries

Effective Date

of 1980 Amendment Pub. L. 96–601, § 2(c), Dec. 24, 1980, 94 Stat. 3496, provided that: “The

Amendments

made by this section [amending this section] shall take effect on the first day of the first calendar month which begins more than 90 days after the date of the enactment of this Act [Dec. 24, 1980].”

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

of 1976 AmendmentAmendment by section 1905(c)(4) of Pub. L. 94–455 effective on first day of first month which begins more than 90 days after Oct. 4, 1976, see section 1905(d) of Pub. L. 94–455, set out as a note under section 5005 of this title.

Effective Date

of 1967 Amendment Pub. L. 90–73, § 1(b), Aug. 29, 1967, 81 Stat. 175, provided that: “The amendment made by subsection (a) [amending this section] shall become effective on the first day of the first month which begins 90 days or more after the date of the enactment of this Act [Aug. 29, 1967].”

§5362 Removals of Wine From Bonded Wine Cellars

Summary

Title 26, §5362

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Amendments

Effective Date

Effective Date

Effective Date

Citations & Metadata