[Code of Federal Regulations]
[Title 27, Volume 1]
[Revised as of January 1, 2008]
From the U.S. Government Printing Office via GPO Access
[CITE: 27CFR20.38]

[Page 498-499]
 
            TITLE 27--ALCOHOL, TOBACCO PRODUCTS AND FIREARMS
 
 CHAPTER I--ALCOHOL AND TOBACCO TAX AND TRADE BUREAU, DEPARTMENT OF THE 
                                TREASURY
 
PART 20_DISTRIBUTION AND USE OF DENATURED ALCOHOL AND RUM--Table of Contents
 
                 Subpart Ca_Special (Occupational) Taxes
 
Sec.  20.38  Liability for special tax.

    Source: T.D. ATF-271, 53 FR 17544, May 17, 1988, unless otherwise 
noted.


    (a) Industrial alcohol permittee. Except as otherwise provided in 
this section, every person required to hold a permit under 26 U.S.C. 
5271 to procure, use, sell, and/or recover denatured distilled spirits 
for industrial purposes shall pay a special (occupational) tax at the 
rate of $250 per year. A separate tax shall be paid for each industrial 
alcohol permit which the permittee holds, and permits issued under this 
part shall not be valid unless special tax is paid. The tax shall be 
paid on or before the date of commencing business as an industrial 
alcohol permittee, and thereafter every year on or before July 1. On 
commencing business, the tax shall be computed from the first day of the 
month in which liability is incurred, through the following June 30. 
Thereafter, the tax shall be computed for the entire year (July 1 
through June 30).

[[Page 499]]

    (b) Transition rule. For purposes of paragraph (a) of this section, 
a permittee engaged in denatured distilled spirits operations on January 
1, 1988, shall be treated as having commenced business on that date. The 
special tax imposed by this transition rule shall cover the period 
January 1, 1988, through June 30, 1988, and shall be paid on or before 
April 1, 1988.
    (c) Each place of business taxable. Special (occupational) tax 
liability is incurred at each place of business for which a permit under 
subpart D of this part to procure, use, sell, and/or recover denatured 
distilled spirits has been issued. A place of business means the entire 
office, plant or area of the business in any one location under the same 
proprietorship. Passageways, streets, highways, rail crossings, 
waterways, or partitions dividing the premises are not sufficient 
separation to require additional special tax, if the divisions of the 
premises are otherwise contiguous.
    (d) Exception for United States. Agencies and instrumentalities of 
the United States are not required to pay special tax under this 
subpart.
    (e) Exemption for certain educational institutions (effective July 
1, 1989). (1) On and after July 1, 1989, a scientific university, 
college of learning, or institution of scientific research, which holds 
a permit to procure and use specially denatured spirits under this part, 
is exempt from payment of special tax under this subpart if--
    (i) The university, college, or institution procures less than 25 
gallons of specially denatured spirits per calendar year; and
    (ii) Such spirits are procured for use exclusively for experimental 
or research use and not for consumption (other than organoleptic tests) 
or sale.
    (2) A scientific university, college of learning, or institution of 
scientific research, which holds a permit under this part, and which 
does not operate as described in paragraphs (e)(1)(i) and (ii) of this 
section during any calendar year, shall pay special tax as provided in 
Sec.  20.38(a) for the special tax year (July 1 through June 30) 
commencing during that calendar year.

(26 U.S.C. 5143, 5276)

[T.D. ATF-271, 53 FR 17544, May 17, 1988, as amended by T.D. ATF-285, 54 
FR 12610, Mar. 28, 1989]