[Code of Federal Regulations]
[Title 27, Volume 1]
[Revised as of April 1, 2007]
From the U.S. Government Printing Office via GPO Access
[CITE: 27CFR26.77]

[Page 740-741]
 
            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 
 
       Subpart E_Taxpayment of Liquors and Articles in Puerto Rico
 
Sec.  26.77  Subject to tax.

    (a) Distilled spirits of Puerto Rican manufacture, and any products 
containing such distilled spirits, brought into the United States and 
withdrawn for consumption or sale are subject to a tax equal to the tax 
imposed in the United States by 26 U.S.C. 5001.
    (b) A credit against the tax imposed on distilled spirits by 26 
U.S.C. 7652 is allowable under 26 U.S.C. 5010 on each proof gallon of 
alcohol derived from eligible wine or from eligible flavors which do not 
exceed 2\1/2\ percent of the finished product on a proof gallon basis. 
The credit is allowable at the time the tax is payable as if it 
constituted a reduction in the rate of tax.

[[Page 741]]

    (c) Where credit against the tax is desired, the person liable for 
the tax shall establish an effective tax rate in accordance with Sec.  
26.79a. The effective tax rate established will be applied to each 
withdrawal or other disposition of the distilled spirits for consumption 
or sale within the United States.

(Approved by Office of Management and Budget under control number 1512-
0203)

(Act of August 16, 1954, Pub. L. 591, 68A Stat. 907, as amended (26 
U.S.C. 7652); Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 
U.S.C. 5001); Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 
U.S.C. 5010))

[T.D. ATF-297, 55 FR 18066, Apr. 30, 1990. Redesignated and amended by 
T.D. ATF-459, 66 FR 38550, 38551, July 25, 2001]