26 USC 7652 - Shipments to the United States

U.S Code last checked for updates: Apr 26, 2024

§ 7652.

Shipments to the United States

(a)

Puerto Rico

(1)

Rate of tax

(2)

Payment of tax

(3)

Deposit of internal revenue collections

(b)

Virgin Islands

(1)

Taxes imposed in the United States

(2)

Exemption from tax imposed in the Virgin Islands

(3)

Disposition of internal revenue collections

The Secretary shall determine the amount of all taxes imposed by, and collected under the internal revenue laws of the United States on articles produced in the Virgin Islands and transported to the United States. The amount so determined less 1 percent and less the estimated amount of refunds or credits shall be subject to disposition as follows:

(A)

The payment of an estimated amount shall be made to the government of the Virgin Islands before the commencement of each fiscal year as set forth in section 4(c)(2) of the Act entitled “An Act to authorize appropriations for certain insular areas of the United States, and for other purposes”, approved August 18, 1978 (48 U.S.C. 1645), as in effect on the date of the enactment of the Trade and Development Act of 2000. The payment so made shall constitute a separate fund in the treasury of the Virgin Islands and may be expended as the legislature may determine.

(B)

Any amounts remaining shall be deposited in the Treasury of the United States as miscellaneous receipts.

If at the end of any fiscal year the total of the Federal contribution made under subparagraph (A) with respect to the four calendar quarters immediately preceding the beginning of that fiscal year has not been obligated or expended for an approved purpose, the balance shall continue available for expenditure during any succeeding fiscal year, but only for emergency relief purposes and essential public projects. The aggregate amount of moneys available for expenditure for emergency relief purposes and essential public projects only shall not exceed the sum of $5,000,000 at the end of any fiscal year. Any unobligated or unexpended balance of the Federal contribution remaining at the end of a fiscal year which would cause the moneys available for emergency relief purposes and essential public projects only to exceed the sum of $5,000,000 shall thereupon be transferred and paid over to the Treasury of the United States as miscellaneous receipts.

(c)

Articles containing distilled spirits

(d)

Articles other than articles containing distilled spirits

For purposes of subsections (a)(3) and (b)(3)—

(1)

Value added requirement for Puerto Rico

Any article, other than an article containing distilled spirits, shall in no event be treated as produced in Puerto Rico unless the sum of—

(A)

the cost or value of the materials produced in Puerto Rico, plus

(B)

the direct costs of processing operations performed in Puerto Rico,

equals or exceeds 50 percent of the value of such article as of the time it is brought into the United States.

(2)

Prohibition of Federal excise tax subsidies

(A)

In general

(B)

Federal excise tax subsidy

For purposes of this paragraph, the term “Federal excise tax subsidy” means any subsidy—

(i)

of a kind different from, or

(ii)

in an amount per value or volume of production greater than,

the subsidy which Puerto Rico or the Virgin Islands offers generally to industries producing articles not subject to Federal excise taxes.

(3)

Direct costs of processing operations

(e)

Shipments of rum to the United States

(1)

Excise taxes on rum covered into treasuries of Puerto Rico and Virgin Islands

(2)

Secretary prescribes formula

(3)

Rum defined

(4)

Coordination with subsections (a) and (b)

(f)

Limitation on cover over of tax on distilled spirits

For purposes of this section, with respect to taxes imposed under section 5001 or this section on distilled spirits, the amount covered into the treasuries of Puerto Rico and the Virgin Islands shall not exceed the lesser of the rate of—

(1)

$10.50 ($13.25 in the case of distilled spirits brought into the United States after June 30, 1999, and before January 1, 2022), or

(2)

the tax imposed under subsection (a)(1) of section 5001, determined as if subsection (c)(1) of such section did not apply, on each proof gallon.

(g)

Drawback for medicinal alcohol, etc.

In the case of medicines, medicinal preparations, food products, flavors, flavoring extracts, or perfume containing distilled spirits, which are unfit for beverage purposes and which are brought into the United States from Puerto Rico or the Virgin Islands—

(1)

subpart B of part II of subchapter A of chapter 51 shall be applied as if—

(A)

the use and tax determination described in section 5111 had occurred in the United States by a United States person at the time the article is brought into the United States, and

(B)

the rate of tax were the rate applicable under subsection (f) of this section, and

(2)

no amount shall be covered into the treasuries of Puerto Rico or the Virgin Islands.

(h)

Manner of cover over of tax must be derived from this title

No amount shall be covered into the treasury of Puerto Rico or the Virgin Islands with respect to taxes for which cover over is provided under this section unless made in the manner specified in this section without regard to—

(1)

any provision of law which is not contained in this title or in a revenue Act; and

(2)

whether such provision of law is a subsequently enacted provision or directly or indirectly seeks to waive the application of this subsection.

(i)

Determination of taxes collected

(Aug. 16, 1954, ch. 736, 68A Stat. 907; Pub. L. 85–859, title II, § 204(17), (18), Sept. 2, 1958, 72 Stat. 1430; Pub. L. 89–44, title VIII, § 808(b)(3), June 21, 1965, 79 Stat. 164; Pub. L. 94–202, § 10(a), Jan. 2, 1976, 89 Stat. 1141; Pub. L. 94–455, title XIX, § 1906(a)(55), (b) (13)(A), Oct. 4, 1976, 90 Stat. 1832, 1834; Pub. L. 98–67, title II, § 221(a), Aug. 5, 1983, 97 Stat. 395; Pub. L. 98–213, § 5(c), Dec. 8, 1983, 97 Stat. 1460; Pub. L. 98–369, div. B, title VI, §§ 2681(a), 2682(a), July 18, 1984, 98 Stat. 1172, 1174; Pub. L. 99–514, title XVIII, § 1879(i)(1), Oct. 22, 1986, 100 Stat. 2907; Pub. L. 100–418, title I, § 1214(p)(1), Aug. 23, 1988, 102 Stat. 1159; Pub. L. 103–66, title XIII, § 13227(e), Aug. 10, 1993, 107 Stat. 494; Pub. L. 103–465, title I, § 136(b), Dec. 8, 1994, 108 Stat. 4841; Pub. L. 106–170, title V, § 512(a), Dec. 17, 1999, 113 Stat. 1924; Pub. L. 106–200, title VI, § 602(b), (c), May 18, 2000, 114 Stat. 305, 306; Pub. L. 107–147, title VI, § 609(a), Mar. 9, 2002, 116 Stat. 60; Pub. L. 108–311, title III, § 305(a), Oct. 4, 2004, 118 Stat. 1179; Pub. L. 109–59, title XI, § 11125(b)(22), Aug. 10, 2005, 119 Stat. 1957; Pub. L. 109–432, div. A, title I, § 114(a), Dec. 20, 2006, 120 Stat. 2940; Pub. L. 110–343, div. C, title III, § 308(a), Oct. 3, 2008, 122 Stat. 3869; Pub. L. 111–312, title VII, § 755(a), Dec. 17, 2010, 124 Stat. 3322; Pub. L. 112–240, title III, § 329(a), Jan. 2, 2013, 126 Stat. 2335; Pub. L. 113–295, div. A, title I, § 140(a), Dec. 19, 2014, 128 Stat. 4020; Pub. L. 114–113, div. Q, title I, § 172(a), Dec. 18, 2015, 129 Stat. 3071; Pub. L. 115–97, title I, § 13807(b), Dec. 22, 2017, 131 Stat. 2176; Pub. L. 115–123, div. D, title II, § 41102(a)(1), (b)(1), Feb. 9, 2018, 132 Stat. 155; Pub. L. 116–260, div. EE, title I, § 107(a)(2), Dec. 27, 2020, 134 Stat. 3046.)

cite as: 26 USC 7652