Internal Revenue Code:Sec. 5005. Persons liable for tax
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Location in Internal Revenue Code
TITLE 26 - INTERNAL REVENUE CODE
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
Statute
Sec. 5005. Persons liable for tax
(a) General
The distiller or importer of distilled spirits shall be liable
for the taxes imposed thereon by section 5001(a)(1).
(b) Domestic distilled spirits
(1) Liability of persons interested in distilling
Every proprietor or possessor of, and every person in any
manner interested in the use of, any still, distilling apparatus,
or distillery, shall be jointly and severally liable for the
taxes imposed by law on the distilled spirits produced therefrom.
(2) Exception
A person owning or having the right of control of not more than
10 percent of any class of stock of a corporate proprietor of a
distilled spirits plant shall not be deemed to be a person liable
for the tax for which such proprietor is liable under the
provisions of paragraph (1). This exception shall not apply to an
officer or director of such corporate proprietor.
(c) Proprietors of distilled spirits plants
(1) Bonded storage
Every person operating bonded premises of a distilled spirits
plant shall be liable for the internal revenue tax on all
distilled spirits while the distilled spirits are stored on such
premises, and on all distilled spirits which are in transit to
such premises (from the time of removal from the transferor's
bonded premises) pursuant to application made by him. Such
liability for the tax on distilled spirits shall continue until
the distilled spirits are transferred or withdrawn from bonded
premises as authorized by law, or until such liability for tax is
relieved by reason of the provisions of section 5008(a). Nothing
in this paragraph shall relieve any person from any liability
imposed by subsection (a) or (b).
(2) Transfers in bond
When distilled spirits are transferred in bond in accordance
with the provisions of section 5212, persons liable for the tax
on such spirits under subsection (a) or (b), or under any similar
prior provisions of internal revenue law, shall be relieved of
such liability, if proprietors of transferring and receiving
premises are independent of each other and neither has a
proprietary interest, directly or indirectly, in the business of
the other, and all persons liable for the tax under subsection
(a) or (b), or under any similar prior provisions of internal
revenue law, have divested themselves of all interest in the
spirits so transferred. Such relief from liability shall be
effective from the time of removal from the transferor's bonded
premises, or from the time of divestment of interest, whichever
is later.
(d) Withdrawals free of tax
All persons liable for the tax under subsection (a) or (b), or
under any similar prior provisions of internal revenue law, shall
be relieved of such liability as to distilled spirits withdrawn
free of tax under the provisions of section 5214(a)(1), (2), (3),
(11), or (12), or under section 7510, at the time such spirits are
so withdrawn from bonded premises.
(e) Withdrawals without payment of tax
(1) Liability for tax
Any person who withdraws distilled spirits from the bonded
premises of a distilled spirits plant without payment of tax, as
provided in section 5214(a)(4), (5), (6), (7), (8), (9), (10), or
(13), shall be liable for the internal revenue tax on such
distilled spirits, from the time of such withdrawal; and all
persons liable for the tax on such distilled spirits under
subsection (a) or (b), or under any similar prior provisions of
internal revenue law, shall, at the time of such withdrawal, be
relieved of any such liability on the distilled spirits so
withdrawn if the person withdrawing such spirits and the person,
or persons, liable for the tax under subsection (a) or (b), or
under any similar prior provisions of internal revenue law, are
independent of each other and neither has a proprietary interest,
directly or indirectly, in the business of the other, and all
persons liable for the tax under subsection (a) or (b), or under
any similar prior provisions of internal revenue law, have
divested themselves of all interest in the spirits so withdrawn.
(2) Relief from liability
All persons liable for the tax on distilled spirits under
paragraph (1) of this subsection, or under subsection (a) or (b),
or under any similar prior provisions of internal revenue law,
shall be relieved of any such liability at the time, as the case
may be, the distilled spirits are exported, deposited in a
foreign-trade zone, used in the production of wine, used in the
production of nonbeverage wine or wine products, deposited in
customs bonded warehouses, laden as supplies upon, or used in the
maintenance or repair of, certain vessels or aircraft, or used in
certain research, development, or testing, as provided by law.
(f) Cross references
(1) For provisions requiring bond covering operations at, and
withdrawals from, distilled spirits plants, see section 5173.
(2) For provisions relating to transfer of tax liability to
redistiller in case of redistillation, see section 5223.
(3) For liability for tax on denatured distilled spirits,
articles, and volatile fruit-flavor concentrates, see section
5001(a)(5) and (6).
(4) For liability for tax on distilled spirits withdrawn free
of tax, see section 5001(a)(4).
(5) For liability of wine producer for unlawfully using wine
spirits withdrawn for the production of wine, see section 5391.
(6) For provisions relating to transfer of tax liability for
wine, see section 5043(a)(1)(A).
Sources
(Added Pub. L. 85-859, title II, Sec. 201, Sept. 2, 1958, 72 Stat.
1318; amended Pub. L. 94-455, title XIX, Sec. 1905(a)(1), Oct. 4,
1976, 90 Stat. 1818; Pub. L. 95-176, Sec. 4(b), (d), Nov. 14, 1977,
91 Stat. 1366; Pub. L. 96-39, title VIII, Sec. 807(a)(3), July 26,
1979, 93 Stat. 280; Pub. L. 96-223, title II, Sec. 232(e)(2)(D),
Apr. 2, 1980, 94 Stat. 280; Pub. L. 98-369, div. A, title IV, Sec.
455(b), July 18, 1984, 98 Stat. 823; Pub. L. 103-465, title I, Sec.
136(c)(2), Dec. 8, 1994, 108 Stat. 4841.)
Miscellaneous
PRIOR PROVISIONS
A prior section 5005, acts Aug. 16, 1954, ch. 736, 68A Stat. 599;
Sept. 2, 1958, Pub. L. 85-859, title II, Sec. 206(d), 72 Stat.
1431, consisted of provisions similar to those comprising this
section, prior to the general revision of this chapter by Pub. L.
85-859.
Provisions similar to those comprising subsec. (c)(1), (2) of
this section were contained in prior sections 5194(f), 5217(a), and
5232(a), act Aug. 16, 1954, ch. 736, 68A Stat. 634, 641, 643, prior
to the general revision of this chapter by Pub. L. 85-859.
AMENDMENTS
1994 - Subsec. (f)(3). Pub. L. 103-465, Sec. 136(c)(2)(A),
substituted ''section 5001(a)(5) and (6)'' for ''section 5001(a)(6)
and (7)''.
Subsec. (f)(4). Pub. L. 103-465, Sec. 136(c)(2)(B), substituted
''section 5001(a)(4)'' for ''section 5001(a)(5)''.
1984 - Subsec. (e)(1). Pub. L. 98-369, Sec. 455(b)(1),
substituted ''(10), or (13)'' for ''or (10)''.
Subsec. (e)(2). Pub. L. 98-369, Sec. 455(b)(2), inserted ''used
in the production of nonbeverage wine or wine products,''.
1980 - Subsec. (d). Pub. L. 96-223 substituted ''(11), or (12),''
for ''or (11),''.
1979 - Subsec. (c)(3). Pub. L. 96-39, Sec. 807(a)(3)(A), struck
out par. (3) which related to liability for taxes with regard to
withdrawals of distilled spirits from the bonded premises of a
distilled spirits plant.
Subsec. (d). Pub. L. 96-39, Sec. 807(a)(3)(B), substituted ''(3),
or (11)'' for ''or (3)''.
Subsec. (f)(1). Pub. L. 96-39, Sec. 807(a)(3)(C), substituted
''requiring bond covering operations at, and withdrawals from,
distilled spirits plants'' for ''conditioning warehousing bonds on
the payment of the tax'' and ''5173'' for ''5173(c)''.
Subsec. (f)(6). Pub. L. 96-39, Sec. 807(a)(3)(D), added par. (6).
1977 - Subsec. (d). Pub. L. 95-176, Sec. 4(d)(1), struck out
reference to par. (9) of section 5214(a).
Subsec. (e)(1). Pub. L. 95-176, Sec. 4(d)(2), inserted reference
to pars. (9) and (10) of section 5214(a).
Subsec. (e)(2). Pub. L. 95-176, Sec. 4(b), substituted ''customs
bonded warehouses'' for ''customs manufacturing bonded warehouses''
and provided for relief from liability for tax on distilled spirits
used in certain research, development, or testing.
1976 - Subsec. (c)(2). Pub. L. 94-455 substituted ''Such relief
from liability shall be effective from the time of removal from the
transferor's bonded premises, or from the time of divestment of
interest, whichever is later.'' for ''Such liability for the tax on
distilled spirits shall continue until the distilled spirits are
transferred or withdrawn from bonded premises as authorized by law,
or until such liability for tax is relieved by reason of the
provisions of section 5008(a). Nothing in this paragraph shall
relieve any person from any liability imposed by subsection (a) or
(b).''.
EFFECTIVE DATE OF 1994 AMENDMENT
Amendment by Pub. L. 103-465 effective Jan. 1, 1995, see section
136(d) of Pub. L. 103-465, set out as a note under section 5001 of
this title.
EFFECTIVE DATE OF 1984 AMENDMENT
Amendment by Pub. L. 98-369 effective July 18, 1984, see section
456(c) of Pub. L. 98-369, set out as an Effective Date note under
section 5101 of this title.
EFFECTIVE DATE OF 1980 AMENDMENT
Amendment by Pub. L. 96-223 effective on first day of first
calendar month beginning more than 60 days after Apr. 2, 1980, see
section 232(h)(3) of Pub. L. 96-223, set out as an Effective Date
note under section 5181 of this title.
EFFECTIVE DATE OF 1979 AMENDMENT
Amendment 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 1977 AMENDMENT
Amendment by Pub. L. 95-176 effective on first day of first
calendar month beginning more than 90 days after Nov. 14, 1977, see
section 7 of Pub. L. 95-176, set out as a note under section 5003
of this title.
EFFECTIVE DATE OF 1976 AMENDMENT
Section 1905(d) of Pub. L. 94-455 provided that: ''The amendments
made by this section (amending this section and sections 5007 to
5009, 5025, 5026, 5043, 5054, 5061, 5105, 5111, 5113, 5114, 5117,
5121, 5122, 5131, 5142, 5148, 5171, 5174, 5177, 5179, 5214, 5222,
5232 to 5234, 5272, 5314, 5362, 5368, 5392, 5505, 5551, 5601, 5662,
5685, 5701, 5703, 5704, 5712, 5723, 5751, 5752, 5762, and 5763 of
this title and repealing sections 5104, 5144, 5315, 5676, and 5689
of this title) shall take effect on the first day of the first
month which begins more than 90 days after the date of the
enactment of this Act (Oct. 4, 1976).''
