Internal Revenue Code:Sec. 5042. Exemption from tax

From TaxAlmanac

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 C - Wines
        

Statute

    Sec. 5042. Exemption from tax
 
    (a) Tax-free production
      (1) Cider
        Subject to regulations prescribed by the Secretary, the
      noneffervescent product of the normal alcoholic fermentation of
      apple juice only, which is produced at a place other than a
      bonded wine cellar and without the use of preservative methods or
      materials, and which is sold or offered for sale as cider and not
      as wine or as a substitute for wine, shall not be subject to tax
      as wine nor to the provisions of subchapter F.
      (2) Wine for personal or family use
        Subject to regulations prescribed by the Secretary -
        (A) Exemption
          Any adult may, without payment of tax, produce wine for
        personal or family use and not for sale.
        (B) Limitation
          The aggregate amount of wine exempt from tax under this
        paragraph with respect to any household shall not exceed -
            (i) 200 gallons per calendar year if there are 2 or more
          adults in such household, or
            (ii) 100 gallons per calendar year if there is only 1 adult
          in such household.
        (C) Adults
          For purposes of this paragraph, the term ''adult'' means an
        individual who has attained 18 years of age, or the minimum age
        (if any) established by law applicable in the locality in which
        the household is situated at which wine may be sold to
        individuals, whichever is greater.
      (3) Experimental wine
        Subject to regulations prescribed by the Secretary, any
      scientific university, college of learning, or institution of
      scientific research may produce, receive, blend, treat, and store
      wine, without payment of tax, for experimental or research use
      but not for consumption (other than organoleptical tests) or
      sale, and may receive such wine spirits without payment of tax as
      may be necessary for such production.
    (b) Cross references
          (1) For provisions relating to exemption of tax on losses of
        wine (including losses by theft or authorized destruction), see
        section 5370.
          (2) For provisions exempting from tax samples of wine, see
        section 5372.
          (3) For provisions authorizing withdrawals of wine free of
        tax or without payment of tax, see section 5362.
 

Sources

    (Added Pub. L. 85-859, title II, Sec. 201, Sept. 2, 1958, 72 Stat.
    1331; amended Pub. L. 94-455, title XIX, Sec. 1906(b)(13)(A), Oct.
    4, 1976, 90 Stat. 1834; Pub. L. 95-458, Sec. 2(a), Oct. 14, 1978,
    92 Stat. 1255.)
 

Miscellaneous

                              PRIOR PROVISIONS
      A prior section 5042, act Aug. 16, 1954, ch. 736, 68A Stat. 610,
    consisted of provisions similar to those comprising this section,
    prior to the general revision of this chapter by Pub. L. 85-859.
                                 AMENDMENTS
      1978 - Subsec. (a)(2). Pub. L. 95-458 substituted in heading
    ''Wine for personal or family use'' for ''Family wine'' and in text
    provision permitting an adult to produce 200 gallons of wine per
    calendar year if there are 2 or more adults in the household or 100
    gallons of wine per calendar year if there is one adult in the
    household for provision which permitted the duly registered head of
    any family to produce an amount of wine not exceeding 200 gallons
    of wine per annum.
      1976 - Subsec. (a)(1) to (3). Pub. L. 94-455 struck out ''or his
    delegate'' after ''Secretary'' wherever appearing.
                      EFFECTIVE DATE OF 1978 AMENDMENT
      Section 2(c) of Pub. L. 95-458 provided that: ''The amendments
    made by this section (amending this section and sections 5051,
    5053, 5054, 5092, 5222, and 5674 of this title) 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 (Oct. 14,
    1978).''
 

References

                   SECTION REFERRED TO IN OTHER SECTIONS
      This section is referred to in sections 5041, 5222, 5351 of this
    title.