[Code of Federal Regulations]
[Title 27, Volume 1]
[Revised as of April 1, 2005]
From the U.S. Government Printing Office via GPO Access
[CITE: 27CFR19.50]

[Page 329]
 
            TITLE 27--ALCOHOL, TOBACCO PRODUCTS AND FIREARMS
 
 CHAPTER I--ALCOHOL AND TOBACCO TAX AND TRADE BUREAU, DEPARTMENT OF THE 
                                TREASURY
 
PART 19_DISTILLED SPIRITS PLANTS--Table of Contents
 
                 Subpart Ca_Special (Occupational) Taxes
 
Sec. 19.50  Rates of special tax.

    (a) General. Title 26 U.S.C. 5081(a)(1) imposes a special tax of 
$1,000 per year on every proprietor of a distilled spirits plant.
    (b) Reduced rate for small proprietors. Title 26 U.S.C. 5081(b) 
provides for a reduced rate of $500 per year with respect to any 
distilled spirits plant proprietor whose gross receipts (for the most 
recent taxable year ending before the first day of the taxable period to 
which the special tax imposed by Sec. 19.49 relates) are less than 
$500,000. The ``taxable year'' to be used for determining gross receipts 
is the taxpayer's income tax year. All gross receipts of the taxpayer 
shall be included, not just the gross receipts of the business subject 
to special tax. Proprietors of new businesses that have not yet begun a 
taxable year, as well as proprietors of existing businesses that have 
not yet ended a taxable year, who commence a new activity subject to 
special tax, qualify for the reduced special (occupational) tax rate, 
unless the business is a member of a ``controlled group''; in that case, 
the rules of paragraph (c) of this section shall apply.
    (c) Controlled group. All persons treated as one taxpayer under 26 
U.S.C. 5061(e)(3) shall be treated as one taxpayer for the purpose of 
determining gross receipts under paragraph (b) of this section. 
``Controlled group'' means a controlled group of corporations, as 
defined in 26 U.S.C. 1563 and implementing regulations in 26 CFR 1.1563-
1 through 1.1563-4, except that the words ``at least 80 percent'' shall 
be replaced by the words ``more than 50 percent'' in each place they 
appear in subsection (a) of 26 U.S.C. 1563, as well as in the 
implementing regulations. Also, the rules for a ``controlled group of 
corporations'' apply in a similar fashion to groups which include 
partnerships and/or sole proprietorships. If one entity maintains more 
than 50% control over a group consisting of corporations and one, or 
more, partnerships and/or sole proprietorships, all of the members of 
the controlled group are one taxpayer for the purpose of this section.
    (d) Short taxable year. Gross receipts for any taxable year of less 
than 12 months shall be annualized by multiplying the gross receipts for 
the short period by 12 and dividing the result by the number of months 
in the short period, as required by 26 U.S.C. 448(c)(3).
    (e) Returns and allowances. Gross receipts for any taxable year 
shall be reduced by returns and allowances made during that year under 
26 U.S.C. 448(c)(3).

(26 U.S.C. 448, 5061, 5081)