CONGRESSIONAL RECORD - SENATE

August 27, 1959

Page 17113

AMENDMENT OF INTERNAL REVENUE CODE OF 1954, RELATING TO REFUND OF CERTAIN TAXES

Mr. MUSKIE. Mr. President, I introduce, for appropriate reference, a bill to amend the Internal Revenue Code of 1954, as amended, to provide for a refund of Federal excise taxes on distilled spirits and wines owned by States or political subdivisions and destroyed by fire, explosion, storm, and so on. I ask unanimous consent that the bill lie on the desk for 1 week, for the convenience of Senators who may wish to cosponsor it.

The VICE PRESIDENT. The bill will be received and appropriately referred: and, without objection, the bill will lie on the desk 1 week for additional cosponsors.

The bill (S. 2604) to amend the Internal Revenue Code of 1954 to provide for refund to States of certain taxes on distilled spirits and wine destroyed by fire, casualty, or act of God, introduced by Mr. MUSKIE, was received, read twice by its title, and referred to the Committee on Finance.

Mr. MUSKIE. Mr. President, briefly, the bill would protect States and political subdivisions from loss caused by fire, explosion, tornado, hurricane, cyclone or flood, whereby a refund by the Alcohol and Tobacco Tax Unit of the U.S. Treasury Department for the $10.50 Federal excise tax per 100-proof gallon on distilled spirits, 17 cents per gallon on still wines of 14 percent alcohol or less, 67 cents on still wines over 14 percent but not over 21 percent alcohol, $2.25 per gallon on still wine over 21 percent but not over 24 percent alcohol, and $3.40 per gallon on champagne and other sparkling wines would be paid to a State or political subdivision, provided the State or subdivision retains the ownership of the wines and distilled spirits, and provided that the loss has been inspected and approved by the Alcohol and Tobacco Tax Unit of the U.S. Treasury Department. The loss must exceed $1,000 to qualify for a refund.

The primary benefit of the bill would be to reduce insurance costs on fire and casualty insurance on distilled spirits and wines by more than 50 percent.

This bill, as written, has been approved for form in the legislative counsel's office of the House and has been approved by the National Alcoholic Beverage Control Association, Inc. -- the monopoly State association.

A survey has been made of the 17 monopoly States by the National Alcoholic Beverage Control Association, Inc. It was found that the losses sustained on distilled spirits and wine between January 1, 1955 and June 30, 1959, because of fire, flood. explosion and so forth are as follows:

[Table Omitted]

If the proposed bill had been enacted into law during this period, approximately 50 percent of the above total losses, or $266,276.74 would have been refunded to the prospective states by the federal government.

In my own State of Maine, the Bridgton liquor store burned down on Easter Sunday of last year. The resulting total loss amounts to some $12,000 worth of liquor.

If in such instances of destruction by disaster the federal law were amended to permit refund of Federal Tax of disaster-destroyed liquor in the possession of monopoly states, it would not be necessary to insure the taxed portion of inventories against such disaster losses.