[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: 27CFR27.40] [Page 782-783] TITLE 27--ALCOHOL, TOBACCO PRODUCTS AND FIREARMS CHAPTER I--ALCOHOL AND TOBACCO TAX AND TRADE BUREAU, DEPARTMENT OF THE TREASURY PART 27_IMPORTATION OF DISTILLED SPIRITS, WINES, AND BEER--Table of Contents Subpart D_Tax On Imported Distilled Spirits, Wines, and Beer Sec. 27.40 Distilled spirits. Distilled Spirits (a) A tax is imposed on all distilled spirits in customs bonded warehouses or imported into the United States at the rate prescribed by 26 U.S.C. 5001 on each proof gallon and a proportionate tax at a like rate on all fractional parts of each proof gallon. All products of distillation, by whatever name known, which contain distilled spirits, are considered to be distilled spirits and are taxed as such. The tax will be determined at the time of importation, or, if entered into bond, at the time of withdrawal therefrom. (b) A credit against the tax imposed on distilled spirits by 26 U.S.C. 5001 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. (c) Where credit against the tax is desired, the person liable for the tax shall establish an effective tax rate in accordance with Sec. 27.41. The effective tax [[Page 783]] rate established will be applied to each entry. (Approved by the Office of Management and Budget under control number 1512-0352.) (Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended (26 U.S.C. 5001); Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended (26 U.S.C. 5201); Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended (26 U.S.C. 5010)) [T.D. ATF-297, 55 FR 18069, Apr. 30, 1990]