Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2021
Alcoholic Beverage Tax Law
CHAPTER 5. TAX ON DISTILLED SPIRITS
Article 1. Imposition of Tax
32201. Rate. An excise tax is imposed upon all distilled spirits sold in this state or pursuant to Section 23384 of the Business and Professions Code by manufacturers, distilled spirits manufacturer's agents, brandy manufacturers, rectifiers, or wholesalers, or sellers of distilled spirits selling distilled spirits with respect to which no tax has been paid within areas over which the federal government exercises jurisdiction, at the following rates:
On all distilled spirits of proof strength or less, two dollars ($2) per wine gallon, and at a proportionate rate for any quantity, and on all nonliquid distilled spirits containing 50 percent or less alcohol by weight two cents ($0.02) per ounce avoirdupois, and at a proportionate rate for any quantity.
All distilled spirits in excess of proof strength, and all nonliquid distilled spirits containing more than 50 percent alcohol by weight, shall be taxed at double the above rate.
History—Stats. 1955, p. 1859, operative September 7, 1955, but also operative July 1, 1955, as an amendment to former Section 24465 of the Business and Professions Code, increased the rate from 80 cents to $1.50 and added subdivision (b). Stats. 1967, p. 2526, operative August 16, 1967, revised this section, increasing the rate to $2.00 and making related changes in (b). Stats. 1978, Ch. 827, effective January 1, 1979, deleted "(a)" preceding "An excise tax" in the first paragraph, in the second paragraph substituted "two dollars ($2)" for "one dollar and fifty cents ($1.50)" deleted "until August 16, 1967, and on and after August 16, 1967, two dollars ($2) per wine gallon" and substituted "and on all nonliquid distilled spirits containing 50 percent or less alcohol by weight two cents ($0.02) per ounce avoirdupois", added "and all nonliquid distilled spirits containing more than 50 percent alcohol by weight," following "proof strength" in the third paragraph and deleted subdivision (b).
Federal military reservations.—The sale of distilled spirits to a person on a military reservation over which the federal government has exclusive jurisdiction is subject to the tax imposed by the Alcoholic Beverage Control Act. McKesson & Robbins, Inc. v. Collins, (1937) 18 Cal.App.2d 648.
Tax collectible upon sale to retailer.—The tax is collectible upon sales from wholesalers to retailers. The tax is not collectible upon a sale by one wholesaler to another prior to a sale to a retailer. People v. Tux Winery Co., (1937) 20 Cal.App.2d 700.
Yosemite National Park.—See note following Section 32151.
Additional excise taxes imposed on licensed wholesaler upheld.—The finding of the State Board of Equalization that the proper amount of taxes had not been paid by a wholesaler of distilled spirits, although not conclusive, should be upheld in the absence of a showing that it was arbitrary or capricious. Where an examination of the wholesaler's books showed a discrepancy between disbursements and returns and indicated that numerous sales were made unaccompanied by the necessary revenue stamps, as required by the former provisions of the Alcoholic Beverage Control Act, the board was not bound to grant allowances for gifts or exchanges in the absence of testimony establishing the facts respecting such transfers. Empire Vintage Company v. Collins, (1940) 40 Cal.App.2d 612. Supreme Court hearing denied November 14, 1940.
Deficiency assessments.—Even though prior to 1937 the State Board of Equalization was not expressly authorized to levy deficiency assessments against distilled spirits wholesalers who failed to pay the full amount of their tax, no assessment or reassessment was necessary to create the liability, as the Alcoholic Beverage Control Act itself levied the tax. Even if the power to assess a deficiency did not exist until 1937, the amendment of that year creating the procedure applies to liabilities existing prior to its effective date. Rathjen Bros. Inc. v. Collins, (1942) 50 Cal.App.2d 774.
Delivery of whisky to steamship company for sale on high seas.—Where a steamship company which was the holder of an importer's license and a retailer's distilled spirits license for specific boats mailed an order for whisky from its office in California to the seller's office, also in California, to be shipped from outside the State for delivery within this State, and where the whisky so shipped was stored within the State and was subsequently delivered to a ship of the buyer in a California port for sale to passengers thereon beyond the territorial jurisdiction of the United States, such transaction constituted a sale within the meaning of the Alcoholic Beverage Control Act (as it existed in 1935). Gooderham and Worts, Ltd. v. Collins, (1942) 50 Cal.App.2d 716. That case, together with Rathjen Bros., Inc. v. Collins, (1942) 50 Cal.App.2d 774, also holds that the fact that the whisky is sold in federal bond to a steamship company and that no federal excise tax is collected is immaterial to the question of liability for state excise tax.
Distilled spirits stamp requirements.—A licensed wholesaler who sold distilled spirits to retail licensees unaccompanied by excise stamps as required by the Alcoholic Beverage Control Act (as it read prior to 1941), is liable for tax imposed by the act. If the bottles were broken after the stamps were affixed, subsequent replacements should have been accompanied by stamps, but if the cases had not yet been broken the wholesaler could have properly replaced the broken goods and the stamps sent with the first shipment could have been used to pay the tax. Tonklin Distributing Company, Inc. v. Collins, (1942) 50 Cal.App.2d 790.
Deliveries in this State to out-of-state purchaser taxable.—Under the Alcoholic Beverage Control Act as it read prior to 1937, a transaction involving whisky constituted a sale thereof in this State so as to render the seller liable for excise taxes thereon, where the order for the liquor was solicited by the seller's salesman out of the State and by him delivered to the seller's place of business within this State, where the liquor was sold to an out-of-state purchaser not holding a license under the act, where the order called for "delivery 'FOB' " at the seller's warehouse in this State, and where, after the order had been filled therefrom and also delivered to the purchaser in this State, the liquor was transported out of the State by the purchaser's employees. The fact that a sale of alcoholic beverages is unlawful or unauthorized does not exempt it from the excise tax. Gooderham and Worts, Ltd. v. Collins, (1943) 59 Cal.App.2d 309.
Shipment to military reservation.—The levy of the excise tax upon the seller of whisky to the United States Army Medical Corps does not violate the implied immunity of the federal government from state taxation under the United States Constitution, and the fact that the tax may be passed on to the government in the purchase price does not invalidate the tax. National Distillers Products Corporation v. State Board of Equalization, (1947) 83 Cal.App.2d 35.