[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: 27CFR26.35]

[Page 692-693]
 
            TITLE 27--ALCOHOL, TOBACCO PRODUCTS AND FIREARMS
 
 CHAPTER I--ALCOHOL AND TOBACCO TAX AND TRADE BUREAU, DEPARTMENT OF THE 
                                TREASURY
 
PART 26_LIQUORS AND ARTICLES FROM PUERTO RICO AND THE VIRGIN ISLANDS
--Table of Contents
 
   Subpart Cb_Products Coming Into the United States From Puerto Rico
 
Sec. 26.35  Taxable status.


    (a) Liquors coming into the United States from Puerto Rico, except 
as provided in Sec. 26.36, are subject to a tax equal to the internal 
revenue tax imposed on the production in the United States of like 
liquors. Articles coming into the United States from Puerto Rico, except 
as provided in Sec. 26.36, are subject to tax on the liquors contained 
therein at the rates imposed in the

[[Page 693]]

United States on like liquors of domestic production.
    (b) The excise taxes collected on distilled spirits or articles 
containing distilled spirits shall be deposited into the Treasury of 
Puerto Rico only if at least 92 percent of the alcoholic content of such 
products is rum. The amount deposited into the Treasury of Puerto Rico 
shall not exceed the lesser of $10.50, or the rate imposed by 26 U.S.C. 
5001(a)(1) (including adjustments to the effective tax rate under 26 
U.S.C. 5010), on each proof gallon of such distilled spirits or 
articles, other than eligible articles, containing distilled spirits 
coming into the United States or consumed on the island. Such excise tax 
deposits will be reduced by the estimated amount necessary for payment 
of refunds and drawbacks.
    (c) Except for products described in 26 U.S.C. 7652(c), no excise 
taxes shall be deposited into the Treasury of Puerto Rico if an excise 
tax subsidy is provided by Puerto Rico that is of a kind different from, 
or in an amount per value or volume of production greater than, any 
subsidy offered by Puerto Rico to industries manufacturing products not 
subject to Federal excise tax.

(Sec. 2682, Pub. L. 98-369, 98 Stat. 494 (26 U.S.C. 7652))

[T.D. ATF-175, 49 FR 20804, May 16, 1984, as amended by T.D. ATF-203, 50 
FR 15888, Apr. 23, 1985; T.D. ATF-263, 52 FR 46593, Dec. 9, 1987. 
Redesignated and amended by T.D. ATF-459, 66 FR 38550, July 25, 2001]