CERTAIN PROVISIONS RELATED TO BEER, WINE, AND DISTILLED SPIRITS.

SEC. 106. CERTAIN PROVISIONS RELATED TO BEER, WINE, AND DISTILLED SPIRITS. (a) Production Period for Beer, Wine, and Distilled Spirits.— (1) In general.—Section 263A(f)(4) is amended to read as follows: “(4) Exemption for aging process of beer, wine, and distilled spirits.—For purposes of this subsection, the production period shall not include the aging period for— “(A) beer (as defined in section 5052(a)), “(B) wine (as described in section 5041(a)), or “(C) distilled spirits (as defined in section 5002(a)(8)), except such spirits that are unfit for use for beverage purposes.” . (2) [26 U.S.C. 263A note] Effective date.—The amendment made by this subsection shall apply to interest costs paid or accrued after December 31, 2020. (b) Reduced Rate of Excise Tax on Beer.— (1) [26 U.S.C. 5051] In general.—Section 5051(a)(1) is amended to read as follows: “(1) In general.— “(A) Imposition of tax.—A tax is hereby imposed on all beer brewed or produced, and removed for consumption or sale, within the United States, or imported into the United States. Except as provided in paragraph (2), the rate of such tax shall be— “(i) $16 on the first 6,000,000 barrels of beer— “(I) brewed by the brewer and removed during the calendar year for consumption or sale, or “(II) imported by the importer into the United States during the calendar year, and “(ii) $18 on any barrels of beer to which clause (i) does not apply. “(B) Barrel.—For purposes of this section, a barrel shall contain not more than 31 gallons of beer, and any tax imposed under this section shall be applied at a like rate for any other quantity or for fractional parts of a barrel.” . (2) Reduced rate for certain domestic production.—Section 5051(a)(2)(A) is amended— (A) in the heading, by inserting “ $3.50 a barrel” before “rate”, and (B) by striking “ $7” and all that follows through “January 1, 2021)” and inserting “ $3.50”. (3) Application of reduced tax rate for foreign manufacturers and importers.—Section 5051(a) is amended— (A) in paragraph (1)(A)(i)(II), as amended by paragraph (1) of this subsection, by inserting “but only if the importer is an electing importer under paragraph (4) and the barrels have been assigned to the importer pursuant to such paragraph” after “during the calendar year”, and (B) in paragraph (4)— (i) in subparagraph (A), by striking “paragraph (1)(C)” and inserting “paragraph (1)(A)”, and (ii) in subparagraph (B), by striking “The Secretary” and inserting “The Secretary, after consultation with the Secretary of the Department of Homeland Security,”. (4) Controlled group and single taxpayer rules.—Section 5051(a)(5) is amended by striking “paragraph (1)(C)(i)” each place it appears and inserting “paragraph (1)(A)(i)”. (5) [26 U.S.C. 5051 note] Effective date.—The amendments made by this subsection shall apply to beer removed after December 31, 2020. (c) Transfer of Beer Between Bonded Facilities.— (1) In general.—Section 5414 is amended to read as follows: “SEC. 5414. TRANSFER OF BEER BETWEEN BONDED FACILITIES “(a) In General.—Beer may be removed from one brewery to another brewery, without payment of tax, and may be mingled with beer at the receiving brewery, subject to such conditions, including payment of the tax, and in such containers, as the Secretary by regulations shall prescribe, which shall include— “(1) any removal from one brewery to another brewery belonging to the same brewer, “(2) any removal from a brewery owned by one corporation to a brewery owned by another corporation when— “(A) one such corporation owns the controlling interest in the other such corporation, or “(B) the controlling interest in each such corporation is owned by the same person or persons, and “(3) any removal from one brewery to another brewery when— “(A) the 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 “(B) the transferor has divested itself of all interest in the beer so transferred and the transferee has accepted responsibility for payment of the tax. “(b) Transfer of Liability for Tax.—For purposes of subsection (a)(3), such relief from liability shall be effective from the time of removal from the transferor’s premises, or from the time of divestment of interest, whichever is later.” . (2) [26 U.S.C. 5414 note] Effective date.—The amendment made by this subsection shall apply to any calendar quarters beginning after December 31, 2020. (d) Reduced Rate of Excise Tax on Certain Wine.— (1) [26 U.S.C. 5041] In general.—Section 5041(c) is amended— (A) in the heading, by striking “for Small Domestic Producers”, (B) by amending paragraph (1) to read as follows: “(1) Allowance of credit.— “(A) In general.—There shall be allowed as a credit against any tax imposed by this title (other than chapters 2, 21, and 22) an amount equal to the sum of— “(i) $1 per wine gallon on the first 30,000 wine gallons of wine, plus “(ii) 90 cents per wine gallon on the first 100,000 wine gallons of wine to which clause (i) does not apply, plus “(iii) 53.5 cents per wine gallon on the first 620,000 wine gallons of wine to which clauses (i) and (ii) do not apply, which are produced by the producer and removed during the calendar year for consumption or sale, or which are imported by the importer into the United States during the calendar year. “(B) Adjustment of credit for hard cider.—In the case of wine described in subsection (b)(6), subparagraph (A) of this paragraph shall be applied— “(i) in clause (i) of such subparagraph, by substituting ‘6.2 cents’ for ‘ $1’, “(ii) in clause (ii) of such subparagraph, by substituting ‘5.6 cents’ for ‘90 cents’, and “(iii) in clause (iii) of such subparagraph, by substituting ‘3.3 cents’ for ‘53.5 cents’.” , (C) by striking paragraphs (2) and (8), (D) by redesignating paragraphs (3) through (6) as paragraphs (2) through (5), respectively, (E) by redesignating paragraph (9) as paragraph (6), and (F) by amending paragraph (7) to read as follows: “(7) Regulations.—The Secretary may prescribe such regulations as may be necessary to carry out the purposes of this subsection, including regulations to ensure proper calculation of the credit provided in this subsection.” . (2) Allowance of credit for foreign manufacturers and importers.—Section 5041(c), as amended by paragraph (1), is amended— (A) in paragraph (1)(A), by inserting “but only if the importer is an electing importer under paragraph (6) and the wine gallons of wine have been assigned to the importer pursuant to such paragraph” after “into the United States during the calendar year”, and (B) in paragraph (6)— (i) in subparagraph (A), by striking “paragraph (8)” and inserting “paragraph (1)”, (ii) in subparagraph (B), by striking “The Secretary” and inserting “The Secretary of the Treasury, after consultation with the Secretary of the Department of Homeland Security,”, and (iii) in subparagraph (C), by striking “paragraph (4)” and inserting “paragraph (3)”. (3) [26 U.S.C. 5041 note] Effective date.—The amendments made by this subsection shall apply to wine removed after December 31, 2020. (e) Adjustment of Alcohol Content Level for Application of Excise Tax Rates.— (1) In general.—Paragraphs (1) and (2) of section 5041(b) are each amended by striking “14 percent” and all that follows through “January 1, 2021” and inserting “16 percent”. (2) [26 U.S.C. 5041 note] Effective date.—The amendments made by this subsection shall apply to wine removed after December 31, 2020. (f) Definition of Mead and Low Alcohol by Volume Wine.— (1) In general.—Section 5041(h) is amended— (A) in paragraph (2), by striking “the Secretary shall” each place it appears and inserting “the Secretary may”, and (B) by striking paragraph (3). (2) [26 U.S.C. 5041 note] Effective date.—The amendments made by this subsection shall apply to wine removed after December 31, 2020. (g) Reduced Rate of Excise Tax on Certain Distilled Spirits.— (1) [26 U.S.C. 5001] In general.—Section 5001(c) is amended— (A) in the heading, by striking “Temporary Reduced Rate” and inserting “Reduced Rate”, (B) in paragraph (3)(B), by striking “The Secretary” and inserting “The Secretary of the Treasury, after consultation with the Secretary of the Department of Homeland Security,”, and (C) by striking paragraph (4). (2) [26 U.S.C. 5001 note] Effective date.—The amendments made by this subsection shall apply to distilled spirits removed after December 31, 2020. (h) Bulk Distilled Spirits.— (1) [26 U.S.C. 5212] In general.—Section 5212 is amended by striking “and before January 1, 2021,” and inserting “between bonded premises belonging to the same person or members of the same controlled group (within the meaning of section 5001(c)(2))”. (2) Non-bulk transfers related to bottling or storage.—Section 5212 is amended by adding at the end the following new sentence: “In the case of distilled spirits transferred in bond from the person who distilled or processed such distilled spirits (hereinafter referred to as ‘transferor’) to another person for bottling or storage of such distilled spirits, and returned to the transferor for removal, this section shall be applied without regard to whether distilled spirits are bulk distilled spirits, but only if the transferor retains title during the entire period between such distillation, or processing, and removal.”. (3) [26 U.S.C. 5212 note] Effective date.—The amendments made by this subsection shall apply to distilled spirits transferred in bond after December 31, 2020. (i) Simplification of Rules Regarding Records, Statements, and Returns.— (1) In general.—Section 5555(a) is amended by striking “For calendar quarters beginning after the date of the enactment of this sentence, and before January 1, 2021, the Secretary” and inserting “The Secretary”. (2) [26 U.S.C. 5555 note] Effective date.—The amendment made by this subsection shall apply to calendar quarters beginning after December 31, 2020.