DOMESTIC SPIRITS TRANSFERRED TO CUSTOMS BONDED
WAREHOUSES UNDER 26 U.S.C. 5066(a)
Proprietors of Distilled Spirits Plants,
Wholesale Liquor Dealers, and Others Concerned:
Purpose. The purpose of this circular is to remind
proprietors of distilled spirits plants, wholesale
liquor dealers, and others concerned, that domestic dis-
tilled spirits transferred to a customs bonded warehouse
under the authority of 26 U.S.C. 5066(a) may be removed
from such warehouse free of tax only for the specific
purposes described in 26 U.S.C. 5066(b).
Background. The Bureau of Alcohol, Tobacco and
Firearms has been informed that domestic distilled
spirits transferred to customs bonded warehouses under
the provisions of 26 U.S.C. 5066(a) have been removed
from such warehouses free of tax for use as supplies on
vessels and aircraft and possibly for sale at duty free
stores. Removals for these purposes are not permissible
under 26 U.S.C. 5066(b).
Permissible Operations Under 26 U.S.C. 5066. Section
5066 of the Internal Revenue Code of 1954 was added to
the Code by Public Law 91-659, 84 Stat. 1964. Section
5066(b) states, among other things, that domestic dis-
tilled spirits which have been entered into a customs
bonded warehouse under Sections 5066(a) or 5521(d)(2)
may be withdrawn therefrom "for consumption in the
United States by and for the official or family use of
such foreign governments, organizations, and individuals
who are entitled to withdraw imported distilled spirits
from such warehouses free of tax."
Section 5066(a) provides for the transfer to customs
bonded warehouses of both (a) distilled spirits bottled
in bond (on domestic distilled spirits plant premises)
for export, and (b) taxpaid distilled spirits which have
been bottled on the premises of a domestic distilled
spirits plant and which are eligible for export with
benefit of drawback.
Section 5521(d)(2) provides for the transfer of dis-
tilled spirits from a manufacturing bonded warehouse to
a customs warehouse.
Domestic distilled spirits transferred to a customs
bonded warehouse under the provisions of 26 U.S.C. 5066(a)
may not be withdrawn therefrom for (1) sale outside
the United States, or for (2) consumption outside the
United States. If such spirits are withdrawn for regu-
lar domestic use they shall be treated as American goods
exported and returned, and customs duties must then be
paid on such spirits in amounts equal to the internal
revenue taxes that otherwise would have applied (26
U.S.C. 5066 and Senate Report No. 91-1468, of December
16, 1970).
Domestic distilled spirits transferred to a customs
bonded warehouse under the provisions of 26 U.S.C.
5066(a) may not be removed free of tax from such ware-
house for such purposes as supplies on vessels and
aircraft or for sale at duty-free stores.
Inquiries. Inquiries concerning this circular
should refer to its number and be addressed to the
Assistant Director (Regulatory Enforcement), Bureau of
Alcohol, Tobacco and Firearms, 1200 Pennsylvania Avenue,
NW., Washington, DC 20226.
Rex D. Davis
Director |