Small Distillery Excise Tax Act of 2011

Small Distillery Excise Tax Act of 2011 - Amends the Internal Revenue Code to allow small distilled spirits producers a credit against the excise tax on distilled spirits equal to 80% of the otherwise applicable tax on the first 65,000 of proof gallons of distilled spirits produced in or imported into the United States. Defines "small distilled spirits producer" as any person who produces not more than 100,000 proof gallons of distilled spirits during the calendar year.

[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 777 Introduced in House (IH)]

112th CONGRESS
  1st Session
                                H. R. 777

To amend the Internal Revenue Code of 1986 to reduce the rate of tax on 
             distilled spirits produced by small producers.


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                    IN THE HOUSE OF REPRESENTATIVES

                           February 17, 2011

 Mr. Hinchey introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
To amend the Internal Revenue Code of 1986 to reduce the rate of tax on 
             distilled spirits produced by small producers.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Small Distillery Excise Tax Act of 
2011''.

SEC. 2. REDUCED RATE OF TAX ON DISTILLED SPIRITS PRODUCED BY SMALL 
              PRODUCERS.

    (a) In General.--Section 5001 of the Internal Revenue Code of 1986 
(relating to imposition, rate, and attachment of tax on distilled 
spirits) is amended by redesignating subsection (c) as subsection (d) 
and by inserting after subsection (b) the following new subsection:
    ``(c) Credit for Small Producers.--
            ``(1) Allowance of credit.--In the case of a small 
        distilled spirits producer, there shall be allowed as a credit 
        against the tax imposed by this title (other than chapters 2, 
        21, and 22) an amount equal to 80 percent of the otherwise 
        applicable tax on the first 65,000 of proof gallons of 
        distilled spirits produced by such producer during the calendar 
        year at qualified facilities in the United States.
            ``(2) Small distilled spirits producer.--For purposes of 
        this subsection, the term `small distilled spirits producer' 
        means any person who produces not more than 100,000 proof 
        gallons of distilled spirits during the calendar year.
            ``(3) Time for determining and allowing credit.--The credit 
        allowable by paragraph (1)--
                    ``(A) shall be determined at the same time the tax 
                is determined under subsection (a), and
                    ``(B) shall be allowable at the time the tax 
                imposed by subsection (a) is payable as if the credit 
                allowable by this subsection constituted a reduction in 
                the rate of such tax.
            ``(4) Controlled groups.--Rules similar to rules of section 
        5051(a)(2)(B) shall apply for purposes of this subsection.
            ``(5) Denial of deduction.--Any deduction under subtitle A 
        with respect to any tax against which a credit is allowed under 
        this subsection shall only be for the amount of such tax as 
        reduced by such credit.
            ``(6) Credit for transferee in bond.--If--
                    ``(A) distilled spirits produced by any person 
                would be eligible for any credit under paragraph (1) if 
                removed by such person during the calendar year,
                    ``(B) distilled spirits produced by such person is 
                removed during such calendar year by any other person 
                (hereafter in this paragraph referred to as the 
                `transferee') to whom such distilled spirits were 
                transferred in bond and who is liable for the tax 
                imposed by this section with respect to such spirits, 
                and
                    ``(C) such producer holds title to such spirits at 
                the time of its removal and provides to the transferee 
                such information as is necessary to properly determine 
                the transferee's credit under this paragraph,
        then, the transferee (and not the producer) shall be allowed 
        the credit under paragraph (1) which would be allowed to the 
        producer if the distilled spirits removed by the transferee had 
        been removed by the producer on that date.
            ``(7) Regulations.--The Secretary may prescribe such 
        regulations as may be necessary to carry out the purposes of 
        this subsection, including--
                    ``(A) regulations to prevent the credit provided by 
                this subsection from benefiting any person who produces 
                more than 100,000 proof gallons of distilled spirits 
                during a calendar year, and
                    ``(B) regulations which reduce the credits 
                allowable by sections 5010 and 5011 in order to 
                properly reflect the reduced effective rate of tax on 
                distilled spirits under this subsection.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to distilled spirits produced in calendar years ending after the 
date of the enactment of this Act, but shall not apply to distilled 
spirits on which tax is required to be paid before the date of the 
enactment of this Act.
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