Section 1 Short title
This Act may be cited at the “Wine Excise Tax Modernization Act of 2016”.
To amend the Internal Revenue Code of 1986 to modify the excise tax on wine.
A BILL
Sec. 2 Modification of small wine producer credit
In general— Section 5041(c) of the Internal Revenue Code of 1986 is amended by striking paragraphs (1) and (2) and inserting the following new paragraphs:
“(1) Allowance of credit—In the case of any person who produces wine in, or imports wine into, the United States during the calendar year, there shall be allowed as a credit against any tax imposed by this title (other than chapters 2, 21, and 22) of—
“(A) $1 per wine gallon on the 1st 30,000 wine gallons of wine which are removed during such year for consumption or sale and which have been produced in, or imported into, the United States,
“(B) 90 cents per wine gallon on wine in excess of 30,000 wine gallons and not in excess of 130,000 wine gallons so removed and produced or imported, and
“(C) 53.5 cents per wine gallon on wine in excess of 130,000 wine gallons and not in excess of 750,000 wine gallons so removed and produced or imported.
“(2) Adjustment of credit for hard cider—In the case of wine described in subsection (b)(6), paragraph (1) shall be applied—
“(A) by substituting “6.2 cents” for “$1” in subparagraph (A) thereof,
“(B) by substituting “5.6 cents” for “90 cents” in subparagraph (B) thereof,
“(C) by substituting “3.3 cents” for “53.5 cents” in subparagraph (C) thereof, and
“(D) by taking such wine into account last in applying such subparagraphs.”
Conforming amendment— Section 5041(c)(7) of such Code is amended by striking “, including regulations—” and all that follows and inserting a period.
Effective date— The amendments made by this section shall apply to wine removed during calendar years beginning after December 31, 2016.
Sec. 3 Alcohol by volume limitation for table wine excise tax rate increased to 16 percent
In general— Paragraphs (1) and (2) of section 5041(b) of the Internal Revenue Code of 1986 are each amended by striking “14 percent” and inserting “16 percent”.
Effective date— The amendments made by this section shall apply to wine removed during calendar years beginning after December 31, 2016.
Sec. 4 Increase in carbonation limitation for taxation as still wine
In general— Section 5041(a) of the Internal Revenue Code of 1986 is amended by striking “0.392 gram” and inserting “0.64 gram”.
Effective date— The amendments made by this section shall apply to wine removed during calendar years beginning after December 31, 2016.