Occupational Taxes on the Alcohol Industry Should Be Repealed

GGD-75-111: Published: Jan 16, 1976. Publicly Released: Jan 16, 1976.

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Alcoholic beverage occupational taxes collected in fiscal year 1975 amounted to $21.5 million.

Taxpayer compliance with the alcohol-related occupational tax has dropped below acceptable levels; enforcement by the Bureau of Alcohol, Tobacco, and Firearms is inadequate. Although additional manpower in this area would undoubtedly increase both revenue and compliance, repeal of the occupational taxes appears preferable to increased enforcement.

Matters for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: Several sections of the Code have been repealed as GAO suggested (sections 5081 thru 5084). Occupational taxes in section 5101, 5105, and 5129 were repealed by the Deficit Reduction Act of 1984 (P.L. 98-369) which was enacted on July 18, 1984. Treasury contends that the remaining sections should not be repealed. GAO is conducting a followup review to reaffirm its position.

    Matter: Congress should repeal all occupational taxes in sections 5081 through 5148 of the Internal Revenue Code on retail and wholesale dealers in distilled spirits, wines, and beer; manufacturers of nonbeverage alcoholic products; brewers; manufacturers of stills; and rectifiers.

  2. Status: Closed - Not Implemented

    Comments: While the Bureau of Alcohol agrees with the thrust of the recommendation, it does not intend to pursue remedial legislation because it is unlikely that Congress would consider it favorably and industry is now cooperating with the Bureau under its current operating procedures.

    Matter: Congress should amend the Federal Alcohol Administration Act to clarify the authority of the Bureau of Alcohol, Tobacco, and Firearms to investigate possible consumer and/or unfair trade practice violations of the Act prior to a permit hearing.


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