John B. Breaux: “today I introduce the ``Distilled Spirits Tax Payment Simplification Act of 1997,'' a bill more readily known as…”

“today I introduce the ``Distilled Spirits Tax Payment Simplification Act of 1997,'' a bill more readily known as All-In-Bond. This bill would streamline the way in which the Government collects Federal excise tax on distilled spirits by extending the current system of collection now applicable only to imported products to domestic products as well. Today wholesalers purchase foreign-bottled distilled spirits in bond--tax free--paying the Federal excise tax directly after sale to a retailer. In contrast, when the wholesaler buys domestically bottled spirits--nearly 86 percent of total inventory--the price includes the Federal excise tax, prepaid by the distiller. This means that hundreds of U.S. family-owned wholesale businesses increase their inventory carrying costs by 40 percent when buying U.S. products, which often have to be financed through borrowing. Under my bill, wholesalers would be allowed to purchase domestically bottled distilled spirits in bond from distillers just as they are now permitted to purchase foreign-produced spirits. Products would become subject to tax on removal from wholesale premises. This legislation is designed to be revenue neutral and includes the requirement that any wholesaler electing to purchase spirits in bond must make certain estimated tax payments to Treasury before the end of the fiscal year. All-In-Bond is an equitable and sound way to streamline our tax collection system.”