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United States Code (Last Updated: May 24, 2014) |
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Title 26. INTERNAL REVENUE CODE |
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SubTitle F. Procedure and Administration |
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Chapter 78. DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE |
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SubChapter D. Possessions |
§ 7652. Shipments to the United States
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(a) Puerto Rico (1) Rate of tax Except as provided in section 5314, articles of merchandise of Puerto Rican manufacture coming into the United States and withdrawn for consumption or sale shall be subject to a tax equal to the internal revenue tax imposed in the United States upon the like articles of merchandise of domestic manufacture.
(2) Payment of tax The Secretary shall by regulations prescribe the mode and time for payment and collection of the tax described in paragraph (1), including any discretionary method described in section 6302(b) and (c). Such regulations shall authorize the payment of such tax before shipment from Puerto Rico, and the provisions of section 7651(2)(B) shall be applicable to the payment and collection of such tax in Puerto Rico.
(3) Deposit of internal revenue collections All taxes collected under the internal revenue laws of the United States on articles produced in Puerto Rico and transported to the United States (less the estimated amount necessary for payment of refunds and drawbacks), or consumed in the island, shall be covered into the treasury of Puerto Rico.
(b) Virgin Islands (1) Taxes imposed in the United States Except as provided in section 5314, there shall be imposed in the United States, upon articles coming into the United States from the Virgin Islands, a tax equal to the internal revenue tax imposed in the United States upon like articles of domestic manufacture.
(2) Exemption from tax imposed in the Virgin Islands Such articles shipped from such islands to the United States shall be exempt from the payment of any tax imposed by the internal revenue laws of such 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 For purposes of subsections (a)(3) and (b)(3), any article containing distilled spirits shall in no event be treated as produced in Puerto Rico or the Virgin Islands unless at least 92 percent of the alcoholic content in such article is attributable to rum.
(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 No amount shall be transferred under subsection (a)(3) or (b)(3) in respect of taxes imposed on any article, other than an article containing distilled spirits, if the Secretary determines that a Federal excise tax subsidy was provided by Puerto Rico or the Virgin Islands (as the case may be) with respect to such article.
(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 For purposes of this subsection, the term “direct cost of processing operations” has the same meaning as when used in section 213 of the Caribbean Basin Economic Recovery Act.
(e) Shipments of rum to the United States (1) Excise taxes on rum covered into treasuries of Puerto Rico and Virgin Islands All taxes collected under section 5001(a)(1) on rum imported into the United States (less the estimated amount necessary for payment of refunds and drawbacks) shall be covered into the treasuries of Puerto Rico and the Virgin Islands.
(2) Secretary prescribes formula The Secretary shall, from time to time, prescribe by regulation a formula for the division of such tax collections between Puerto Rico and the Virgin Islands and the timing and methods for transferring such tax collections.
(3) Rum defined For purposes of this subsection, the term “rum” means any article classified under subheading 2208.40.00 of the Harmonized Tariff Schedule of the United States (19 U.S.C. 1202).
(4) Coordination with subsections (a) and (b) Paragraph (1) shall not apply with respect to any rum subject to tax under subsection (a) or (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 beforeJanuary 1, 2014 ), or(2) the tax imposed under section 5001(a)(1), 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.
References In Text
The date of the enactment of the Trade and Development Act of 2000, referred to in subsec. (b)(3)(A), is the date of enactment of Pub. L. 106–200, which was approved
Section 213 of the Caribbean Basin Economic Recovery Act, referred to in subsec. (d)(3), is classified to section 2703 of Title 19, Customs Duties.
The Harmonized Tariff Schedule of the United States (19 U.S.C. 1202), referred to in subsec. (e)(3), is not set out in the Code. See Publication of Harmonized Tariff Schedule note set out under section 1202 of Title 19.
Amendments
2013—Subsec. (f)(1). Pub. L. 112–240 substituted “
2010—Subsec. (f)(1). Pub. L. 111–312 substituted “
2008—Subsec. (f)(1). Pub. L. 110–343 substituted “
2006—Subsec. (f)(1). Pub. L. 109–432 substituted “2008” for “2006”.
2005—Subsec. (g)(1). Pub. L. 109–59, § 11125(b)(22)(A), substituted “subpart B” for “subpart F” in introductory provisions.
Subsec. (g)(1)(A). Pub. L. 109–59, § 11125(b)(22)(B), substituted “section 5111” for “section 5131(a)”.
2004—Subsec. (f)(1). Pub. L. 108–311 substituted “
2002—Subsec. (f)(1). Pub. L. 107–147 substituted “
2000—Subsec. (b)(3). Pub. L. 106–200, § 602(b), amended generally par. (3) heading and text of par. (3) introductory provisions and subpar. (A). Prior to amendment, text of par. (3) introductory provisions and subpar. (A) read as follows: “Beginning with the calendar quarter ending
“(A) There shall be transferred and paid over, as soon as practicable after the close of the quarter, to the Government of the Virgin Islands from the amounts so determined a sum equal to the total amount of the revenue collected by the Government of the Virgin Islands during the quarter, as certified by the Government Comptroller of the Virgin Islands. The moneys so transferred and paid over shall constitute a separate fund in the treasury of the Virgin Islands and may be expended as the legislature may determine.”
Subsec. (h). Pub. L. 106–200, § 602(c), added subsec. (h).
1999—Subsec. (f)(1). Pub. L. 106–170 amended par. (1) generally. Prior to amendment, par. (1) read as follows: “$10.50 ($11.30 in the case of distilled spirits brought into the United States during the 5-year period beginning on
1994—Subsec. (g). Pub. L. 103–465 substituted “flavoring extracts, or perfume” for “or flavoring extracts” in introductory provisions.
1993—Subsec. (f)(1). Pub. L. 103–66 amended par. (1) generally, substituting present provisions for “$10.50, or”.
1988—Subsec. (e)(3). Pub. L. 100–418 substituted “subheading 2208.40.00 of the Harmonized Tariff Schedule of the United States” for “item 169.13 or 169.14 of the Tariff Schedules of the United States”.
1986—Subsec. (g). Pub. L. 99–514 added subsec. (g).
1984—Subsecs. (c)–(e). Pub. L. 98–369, § 2681(a), added subsecs. (c) and (d) and redesignated former subsec. (c) as (e).
Subsec. (f). Pub. L. 98–369, § 2682(a), added subsec. (f).
1983—Subsec. (b)(3). Pub. L. 98–213, § 5(c), amended language of Pub. L. 94–455, § 1906(a)(55). See 1976 Amendment note below.
Subsec. (c). Pub. L. 98–67 added subsec. (c).
1976—Subsec. (a)(2). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary”.
Subsec. (b)(3). Pub. L. 94–455, § 1906(b)(13)(A), struck out “or his delegate” after “Secretary” in provisions following subpar. (B).
Pub. L. 94–455, § 1906(a)(55)(B), as amended by Pub. L. 98–213, § 5(c)(1), substituted “emergency relief purposes and essential public projects” for “emergency relief purposes and essential public projects, with the prior approval of the President or his designated representative” in provisions following subpar. (B). Prior to amendment by Pub. L. 98–213, the latter phrase had been substituted for “approved emergency relief purposes and essential public projects as provided in subparagraph (B)”.
Pub. L. 94–455, § 1906(a)(55)(C), struck out “including payments under subparagraph (B)” after “public projects only” in provisions following subpar. (B).
Subsec. (b)(3)(A). Pub. L. 94–455, § 1906(a)(55)(D), as added by Pub. L. 98–213, § 5(c)(2), struck out proviso after “determine” requiring approval of the President or his designated representative before such moneys may be obligated or expended.
Subsec. (b)(3)(B), (C). Pub. L. 94–455, § 1906(a)(55)(A), redesignated subpar. (C) as (B). Former subpar. (B) relating to disposition of internal revenue collections in Virgin Islands for fiscal years ending
Pub. L. 94–202 substituted “calendar quarter ending
1965—Subsec. (a)(3). Pub. L. 89–44 inserted “(less the estimated amount necessary for payment of refunds and drawbacks)” after “transported to the United States”.
1958—Subsec. (a)(1). Pub. L. 85–859, § 204(17), substituted “section 5314” for “section 5318”.
Subsec. (b)(1). Pub. L. 85–859, § 204(18), substituted “section 5314” for “section 5318”.
Effective Date Of Amendment
Pub. L. 112–240, title III, § 329(b),
Pub. L. 111–312, title VII, § 755(b),
Pub. L. 110–343, div. C, title III, § 308(b),
Pub. L. 109–432, div. A, title I, § 114(b),
Amendment by Pub. L. 109–59 effective
Pub. L. 108–311, title III, § 305(b),
Pub. L. 107–147, title VI, § 609(b),
Pub. L. 106–200, title VI, § 602(d),
Pub. L. 106–170, title V, § 512(c),
Amendment by Pub. L. 103–465 effective
Amendment by Pub. L. 103–66 effective
Amendment by Pub. L. 100–418 effective
Pub. L. 99–514, title XVIII, § 1879(i)(2),
Pub. L. 98–369, div. B, title VI, § 2681(b),
Pub. L. 98–369, div. B, title VI, § 2682(b),
Pub. L. 98–67, title II, § 221(b),
Amendment by Pub. L. 94–455 effective on first day of first month which begins more than 90 days after
Pub. L. 94–202, § 10(b),
Amendment by Pub. L. 89–44 effective
Amendment by Pub. L. 85–859 effective
Miscellaneous
Pub. L. 106–170, title V, § 512(b),
For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§ 1101–1147 and 1171–1177] or title XVIII [§§ 1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after
Pub. L. 99–514, title XVIII, § 1879(i)(3),
Executive Order
Ex. Ord. No. 10602,