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Business Taxes Law Guide—Revision 2024

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Alcoholic Beverage Tax Law

Revenue and Taxation Code

Division 2. Other Taxes
Part 14. Alcoholic Beverage Tax

Chapter 4. Tax on Beer and Wine.

Article 1 Imposition of Tax

Article 2 Presumptions and Exemptions

Article 1. Imposition of Tax. §§ 32151–32152.

32151. Rate. Except as otherwise provided in this part, an excise tax is imposed upon all beer and wine sold in this State or pursuant to Section 23384 of the Business and Professions Code by a manufacturer, wine grower, or importer, or sellers of beer or wine selling beer or wine with respect to which no tax has been paid within areas over which the United States Government exercises jurisdiction, at the following rates:

(a) On all beer, sixty-two cents ($0.62) for every barrel containing 31 gallons and at a proportionate rate for any other quantity until July 1, 1959, and on and after July 1, 1959, one dollar and twenty-four cents ($1.24) for every barrel containing 31 gallons and at a proportionate rate for any other quantity.

(b) On all still wines containing not more than 14 percent of absolute alcohol by volume, one cent ($0.01) per wine gallon and at a proportionate rate for any other quantity.

(c) On all still wines containing more than 14 percent of absolute alcohol by volume, two cents ($0.02) per wine gallon and at a proportionate rate for any other quantity.

(d) On champagne, sparkling wine, excepting sparkling hard cider, whether naturally or artificially carbonated, thirty cents ($0.30) per wine gallon and at a proportionate rate for any other quantity.

(e) On sparkling hard cider, two cents ($0.02) per wine gallon and at a proportionate rate for any other quantity.

(f) Except with respect to beer in the internal revenue bonded premises of a beer manufacturer, for the privilege of possessing or selling beer on which a tax not greater than at the rate of sixty-two cents ($0.62) per barrel has been paid under this part, a floor stock tax of sixty-two cents ($0.62) per barrel, and at a proportionate rate for any other quantity, is hereby imposed on all beer possessed at 12.01 a.m. on July 1, 1959, by every person licensed under Division 9 of the Business and Professions Code. On or before July 31, 1959, each person subject to the tax imposed by this subdivision shall prepare and file with the board, on a form prescribed by the board, a return showing the amount of beer possessed by him at 12.01 a.m. on July 1, 1959, that is subject to the tax imposed by this subdivision, and such other information as the board deems necessary for the proper administration of this part. The taxpayer shall deliver the return, together with a remittance of the amount of tax due, to the office of the board on or before July 31, 1959.

All the provisions of this part relating to excise taxes are applicable also to the tax imposed by this subdivision, to the extent that they are not inconsistent with this subdivision.

History—Stats. 1959, p. 3207, in effect June 24, 1959, increased the rate on beer as provided in subdivision (a) from $0.62 to $1.24 per barrel and added subdivision (f).

Note.—Stats. 1955, p. 750, operative July 1, 1955, which was prior to the effective date of this section, changed the rate on champagne, etc., to that provided in subdivision (d).

Taxing provisions applicable in Yosemite National Park.—The taxes levied on the sale of alcoholic beverages apply with respect to sales of liquor in Yosemite National Park by virtue of Stats. 1919, Ch. 51, ceding to the United States exclusive jurisdiction over the park, subject to certain reservations, including the right of the State to levy taxes, and the Congressional Act of 1920, accepting exclusive jurisdiction subject to such reservations. Collins v. Yosemite Park and Curry Company, (1937) 304 U. S. 518.

32152. Coordination with federal system. The board shall adopt such rules and regulations as may be necessary to coordinate so far as permitted by the provisions of this part the system of beer and wine taxation imposed by this part with the system of beer and wine taxation imposed by the internal revenue laws of the United States.

Article 2. Presumptions and Exemptions

32171. Presumption that beer is sold. It shall be presumed, for the purposes of this part, that all beer removed from the internal revenue bonded premises of a beer manufacturer has been sold in this State by the manufacturer, unless one of the following is proved to the satisfaction of the board, in reports on forms prescribed by the board:

(a) That the beer has been sold and delivered in internal revenue bond to another beer manufacturer in this State.

(b) That the beer has been exported without this State or sold for export by the beer manufacturer making the report and actually exported from this State.

(c) That the beer is beer otherwise exempted from taxation under this part.

History—Stats. 1957, p. 965, in effect September 11, 1957, deleted "(d) That the beer is still in the possession of the licensee."

Failure to comply with board rule held waiver of exemption.—Rule 54, Title 4, California Administrative Code (now Regulation 2563, Title 18 of said code), prescribing the procedure for any claim for exemption from excise tax on beer exported from the State, which was set forth by the State Board of Equalization pursuant to the authority delegated to the board by statute, in the absence of any showing to the contrary, will be construed to be a reasonable and valid exercise of the authority so delegated, and failure of a beer manufacturer to comply with the rule constitutes a waiver of the exemption. San Francisco Brewing Corporation v. Johnson, (1952) 110 Cal.App.2d 479.

32172. Consumption by brewers' employees. Beer consumed by employees of a manufacturer upon the premises of the manufacturer is exempted from the tax under such rules as the board may prescribe.

32173. Presumption that wine is sold. It shall be presumed, for the purposes of this part, that all wine removed from a winery or wine cellar bonded under the internal revenue laws of the United States on payment of the internal revenue tax by a wine grower has been sold in this State by the wine grower, unless it is proved to the satisfaction of the board, in reports on forms prescribed by the board, that the wine has been exported from this State or sold for export by the wine grower making the report and actually exported from this State or that the wine is otherwise exempt from taxation under this part.

History—Stats. 1957, p. 965, in effect September 11, 1957, substituted "cellar" for "storerooms." Stats. 1957, p. 771, approved by the Governor prior to Stats. 1957, p. 965, would also have amended this section.

32174. Wine sold to another wine grower. No tax is imposed by this part upon any wine sold or delivered in internal revenue bond to another wine grower in this State.

32175. Imported beer or wine presumed sold. It shall be presumed, for the purposes of this part, that all beer and wine imported into this State by a beer manufacturer or wine grower or importer has been sold in this State at the time it is received by the licensee, unless it is proved to the satisfaction of the board, on forms prescribed by the board, that the beer or wine is still in the possession of the beer manufacturer or the wine grower in internal revenue bond within this State, or has been exported from this State by the licensee making the report or has been sold by him for export and actually exported from this State, or is otherwise exempt under this part.

History—Stats. 1957, p. 965, in effect September 11, 1957, added "the beer manufacturer or" following "possession of."

32176. Credit for taxes on exported or destroyed beer or wine. (a) If taxes have been paid on beer or wine subsequently exported from the state or sold for export and actually thereafter exported from this state, or on beer or wine subsequently destroyed under the supervision of a board representative, a taxpayer may claim and shall be allowed credit with respect to the taxes in any report filed or assessment made under this part.

(b) A beer manufacturer located in this state may claim and shall be allowed a credit for excise taxes paid on tax paid beer returned by a licensed wholesaler and subsequently destroyed by the beer manufacturer under the supervision of a board representative. The credit shall be allowed only if the beer manufacturer has credited the licensed wholesaler the amount of the tax. If the credit is allowed to the beer manufacturer, a credit shall not be allowed to the licensed wholesaler with respect to the destruction of the same product.

(c) A winegrower may claim credit with respect to excise taxes on wine purchased state tax paid from another winegrower and subsequently exported or sold for export and actually exported.

(d) A beer manufacturer or a beer and wine wholesaler may claim credit for excise taxes on beer purchased state tax paid and subsequently exported or sold for export and actually exported.

History—Stats. 1957, p. 965, in effect September 11, 1957, added last paragraph. Stats. 1965, p. 4545, in effect September 17, 1965, added third paragraph. Stats. 1995, Ch. 555, in effect January 1, 1996, added subdivision letters (a), (c), and (d) and added subdivision (b).

32177. Military beer exemption. [Repealed by Stats. 1976, Ch. 128, operative January 1, 1980.]

32177.5. Military exemption. [Repealed by Stats. 1988, Ch. 160, in effect January 1, 1989.]

32177.5. Military distilled spirits exemption. No tax shall be imposed upon the sale of distilled spirits by brandy manufacturers, distilled spirits manufacturers, rectifiers, importers, and distilled spirits wholesalers to the following listed instrumentalities of the armed forces of the United States organized under Army, Air Force, Navy, Marine Corps, or Coast Guard regulations and located upon territory within the geographical boundaries of the state:

(a) Army, Air Force, Navy, Marine Corps, and Coast Guard exchanges.

(b) Officers', noncommissioned officers', and enlisted persons' clubs or messes.

If any manufacturer, rectifier, importer or wholesaler has paid the tax on alcoholic beverages, except beer and wine, thereafter sold to an instrumentality of the Armed Forces so located, the taxpayer may claim and shall be allowed credit with respect to the tax so paid in any report filed or assessment paid under this part.

History—Added by Stats. 2000, Ch. 609 (SB 607), operative January 1, 2001. Stats. 2018, Ch. 118 (SB 1501), in effect January 1, 2019, substituted "persons'" for "men's" after "and enlisted" in the first sentence of subdivision (b).

32178. Wine rectifier's exports. Any wine grower may claim and shall be allowed credit in any tax report filed or assessment made under this part with respect to the tax paid by him on wine sold to a wine rectifier and which has been exported from this State by the wine rectifier or sold for export by the wine rectifier and thereafter actually exported from this State. The board shall make rules prescribing the procedure for claiming and allowance of the credit.

32179. Claim for exemption. Any claim for exemption from taxes under this article shall be made to the board in such manner as the board shall prescribe.

History—Added by Stats. 1957, p. 966, in effect September 11, 1957.