26 U.S.C. § 5011 — Income tax credit for average cost of carrying excise tax

submitted 21 years ago by Pub. L. 109-59 to r/title-26-INTERNAL-REVENUE-CODE · 367 words · no verdicts yet

in plain englishAI-generated · not legal advice

This section gives certain distilled-spirits wholesalers or permit holders a tax credit for excise-tax financing costs. The credit equals the number of qualifying cases times an average financing cost per case. That average cost is set by a formula using a fixed $25.68 tax figure and current interest rates.

(a) This credit counts toward the general business credit under section 38. Certain wholesalers and permit holders can claim a distilled spirits credit for a taxable year. The credit equals two numbers multiplied together. The first number depends on who is claiming it. If the claimant is an "eligible wholesaler," the number is the cases of bottled distilled spirits it bought directly from the bottler that year. Those cases must have been bottled in the United States. If the claimant is a person subject to section 5005 who is not an eligible wholesaler, the number is different. It is the cases stored in a warehouse run by, or for, a state, its subdivision, or an agency of either. Title to those cases must not yet have passed on an unconditional sale. The second number is the "average tax-financing cost per case" for the most recent calendar year ending before the tax year begins.

(b) An "eligible wholesaler" is a person who holds a Federal Alcohol Administration Act wholesaler permit. It cannot be a state, a political subdivision, or an agency of either.

(c) The average tax-financing cost per case is a kind of interest calculation. It is the interest that would build up over 60 days, at the "deemed financing rate," on the "deemed Federal excise tax per case." The deemed financing rate for a year is the average of the corporate overpayment interest rates under section 6621(a)(1) for that year's calendar quarters. The deemed Federal excise tax per case is a fixed $25.68.

(d) A "case" means twelve 80-proof, 750-milliliter bottles. To find the number of cases in any lot, divide the number of liters in that lot by 9.

facts

- Located at 26 U.S.C. § 5011, titled "Income tax credit for average cost of carrying excise tax," within the federal tax code's alcohol excise provisions. - Added by Pub. L. 109–59, title XI, § 11126(a), on August 10, 2005 (119 Stat. 1957). - Comprises 367 words across four subsections: (a) general rule, (b) eligible wholesaler definition, (c) average tax-financing cost, and (d) other definitions and special rules. - Contains a single source-credit reference reflecting its original enactment, with no subsequent amendments noted beyond that one entry. - Sets the deemed Federal excise tax per case at $25.68 for purposes of calculating the average tax-financing cost.

the actual law source: uscode.house.gov ↗public domain

(a) In general

For purposes of section 38, the amount of the distilled spirits credit for any taxable year is the amount equal to the product of—

(1)

in the case of—

(A)

any eligible wholesaler, the number of cases of bottled distilled spirits—

(i)

which were bottled in the United States, and

(ii)

which are purchased by such wholesaler during the taxable year directly from the bottler of such spirits, or

(B)

any person which is subject to section 5005 and which is not an eligible wholesaler, the number of cases of bottled distilled spirits which are stored in a warehouse operated by, or on behalf of, a State or political subdivision thereof, or an agency of either, on which title has not passed on an unconditional sale basis, and

(2)

the average tax-financing cost per case for the most recent calendar year ending before the beginning of such taxable year.

(b) Eligible wholesaler

For purposes of this section, the term “eligible wholesaler” means any person which holds a permit under the Federal Alcohol Administration Act as a wholesaler of distilled spirits which is not a State or political subdivision thereof, or an agency of either.

(1) In general

For purposes of this section, the average tax-financing cost per case for any calendar year is the amount of interest which would accrue at the deemed financing rate during a 60-day period on an amount equal to the deemed Federal excise tax per case.

(2) Deemed financing rate

For purposes of paragraph (1), the deemed financing rate for any calendar year is the average of the corporate overpayment rates under paragraph (1) of section 6621(a) (determined without regard to the last sentence of such paragraph) for calendar quarters of such year.

(3) Deemed Federal excise tax per case

For purposes of paragraph (1), the deemed Federal excise tax per case is $25.68.

(d) Other definitions and special rules

For purposes of this section—

(1) Case

The term “case” means 12 80-proof 750-milliliter bottles.

(2) Number of cases in lot

The number of cases in any lot of distilled spirits shall be determined by dividing the number of liters in such lot by 9.

Source credit: (Added Pub. L. 109–59, title XI, § 11126(a), Aug. 10, 2005, 119 Stat. 1957.)

history & why it existsrecord from the source credit

2005Enacted · Pub. L. 109-59 · 119 Stat. 1957

The record. According to the source credit, 26 U.S.C. § 5011 was added by Public Law 109-59, title XI, § 11126(a), enacted August 10, 2005, and published at 119 Stat. 1957. The source credit reflects a single legislative action establishing this section, with no amendment activity noted beyond its original enactment. Historical context. Public Law 109-59 is widely known as the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU), a major surface transportation authorization measure. Such transportation bills are commonly understood to combine core highway and transit funding provisions with a range of revenue and offset provisions, often addressed in a title devoted to revenue measures, needed to satisfy budgetary rules or to fund specific programs. Provisions like § 5011, which supplies an income tax credit tied to the cost of carrying federal excise tax on distilled spirits, are consistent with the kind of narrowly targeted tax adjustments frequently attached to larger authorization acts to address industry-specific financing burdens. Beyond this general pattern, the record does not establish the specific policy rationale Congress had for including this distilled spirits credit within SAFETEA-LU, nor does it document any particular problem, industry request, or legislative history behind the provision. Any more specific account of legislative intent would be speculative and is not supported by the materials provided.

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