Gallonage Taxes Law and Legal Definition

Gallonage taxes refers to those taxes that are imposed on businesses that manufacturer or import distributors of liquor. According to 27 CFR 19.21, gallonage taxes are imposed on all spirits produced in, imported into or brought into the U.S. on each gallon. All products of distillation, by whatever name known, that contain spirits, on which tax imposed by law has not been paid, and any alcoholic ingredient added to such products, are considered and taxed as spirits.

The following alcoholic beverages are exempted from gallonage taxes:

1.Wine used by religious organizations for sacramental purposes;

2.Sales of alcoholic beverages in interstate or foreign commerce;

3.Sales for use aboard ships operating in foreign commerce.;

4.Sales to U.S. governmental agencies (military bases);

5.Sales to licensed non-beverage users.