MODIFICATION OF TAX TREATMENT OF HARD CIDER.

SEC. 908. MODIFICATION OF TAX TREATMENT OF HARD CIDER. (a) Hard Cider Containing Less Than 7 Percent Alcohol Taxed as Wine.—Subsection (b) of section 5041 (relating to imposition and rate of tax) is amended by striking “and” at the end of paragraph (4), by striking the period at the end of paragraph (5) and inserting and”, and by adding at the end the following new paragraph: “(6) On hard cider derived primarily from apples or apple concentrate and water, containing no other fruit product, and containing at least one-half of 1 percent and less than 7 percent alcohol by volume, 22.6 cents per wine gallon.”. (b) Application of Small Producer Credit.—Paragraph (1) of section 5041(c) (relating to credit for small domestic producers) is amended by adding at the end the following new sentence: “In the case of wine described in subsection (b)(6), the preceding sentence shall be applied by substituting ‘5.6 cents’ for ‘90 cents’.”. (c) Effective Date.—The amendments made by this section shall take effect on October 1, 1997.