Chapter 9. Taxes.
§ 25–901. Taxes to be levied, collected, and paid on alcoholic beverages except beer.
There shall be levied, collected, and paid on all of the following alcoholic beverages (1) manufactured by the licensee under a manufacturer’s license, (2) imported or brought into the District by a licensee under a wholesaler’s license, except alcoholic beverages as may be sold to a dealer licensed under the laws of any state or territory of the United States and not licensed under this title, and (3) imported or brought into the District by a licensee under a retailer’s license, a tax at the following rates to be paid by the licensee in the manner hereinafter provided:
(A) A tax of $.30 on every wine-gallon of wine containing 14% or less of alcohol by volume, other than champagne, sparkling wine, and any wine artificially carbonated, and a proportionate tax at the same rate on all fractional parts of such gallon;
(B) A tax of $.40 on every wine-gallon of wine containing more than 14% of alcohol by volume, other than champagne, sparkling wine, and any wine artificially carbonated, and a proportionate tax at the same rate on all fractional parts of such gallon;
(C) A tax of $.45 on every wine-gallon of champagne, sparkling wine, and any wine artificially carbonated, and a proportionate tax at the same rate on all fractional parts of such gallon;
(D) A tax of $1.50 on every wine-gallon of spirits, and a proportionate tax at the same rate on all fractional parts of such gallon; and
(E) A tax of $1.50 on every wine-gallon of all other alcoholic beverages, and a proportionate tax at the same rate on all fractional parts of such gallon.
§ 25–902. Taxes to be levied, collected, and paid on beer.
(a) There shall be levied, collected, and paid a tax of $2.79 on every barrel of beer containing not more than 31 gallons, and at the same rate for any other quantity or for the fractional parts thereof, on all beer that is:
(1) Sold by the licensee under a manufacturer’s or wholesaler’s license, except beer as (A) may have been purchased from a licensee under this title, or (B) may be sold to a dealer licensed under the laws of any state or territory of the United States and not licensed under this title;
(2) Purchased for resale by the licensee under a retailer’s license, except beer as may have been purchased from a licensee under this title; or
(3) Brewed or produced by the licensee under a brew pub endorsement and transferred for consumption at the licensee’s restaurant or tavern.
(b)(1) Taxes shall be determined before the beer is dispensed into a container for consumption. A licensee under a brew pub endorsement shall have a suitable method for measuring the volume of beer, such as a meter or gauge glass.
(2) If the licensee under a brew pub endorsement uses one or more tanks for tax determination:
(A) Taxes shall be determined each time beer is added to a tax-determination tank; and
(B) The licensee under a brew pub endorsement may never simultaneously pump into and out of a tax-determination tank.
(3) Beer consumed by employees and visitors at the licensee’s restaurant or tavern shall be beer on which the tax has been paid or determined.
§ 25–903. Collection of tax.
(a) Taxes on alcoholic beverages shall be collected by, and paid to, the Deputy Chief Financial Officer for Tax and Revenue of the Office of Tax and Revenue, or any successor (“OTR Director”) and shall be deposited in the Treasury of the United States to the credit of the District.
(b) Each licensee identified in §§ 25-901 and 25-902 shall, before the 16th day of each month, furnish to the OTR Director, on a form to be prescribed by the OTR Director, a statement under oath showing the quantity of alcoholic beverage subject to taxation sold by the licensee during the preceding calendar month and shall, before the 16th day of each month, pay to the OTR Director the tax imposed thereon.
§ 25–904. Importation permit and tax requirement.
The Board shall not issue an importation permit until the taxes imposed by this chapter have been paid for the alcoholic beverages for which the permit is requested.
§ 25–905. Common carrier licenses and tax requirements.
(a) In the case of a passenger-carrying marine vessel operating in and beyond the District or a club car or a dining car on a railroad operating in and beyond the District for which a retailer’s license has been issued under this title, the tax as specified in § 25-901 shall be paid on all taxable beverages as are sold and served by the licensee while passing through or when at rest in the District, in the following manner:
(1) A record shall be made and retained by the licensee of all alcoholic beverages sold and served in the District.
(2) Each licensee shall, before the 11th day of each month, file with the OTR Director, on a form to be prescribed by the OTR Director, a statement under oath, showing the quantity of each kind of alcoholic beverage, except beer and wine, sold under the license in the District during the preceding calendar month and shall pay the tax imposed thereon.
§ 25–906. Exemption from tax.
No tax shall be levied and collected on any alcoholic beverage exempt from tax under the laws of the United States, or on any alcohol sold for nonbeverage purposes by the licensee under a manufacturer’s or wholesaler’s license in accordance with the regulations promulgated by the Council.
§ 25–907. Mayor’s responsibility in determining, redetermining, assessing, or reassessing any tax.
(a) The Mayor shall determine, redetermine, assess, or reassess any tax imposed under this chapter, as follows:
(1) In the case of a fraudulent return or a failure to file a return, whether in good faith or otherwise, the tax may be assessed at any time.
(2) If the tax is determined to be due from any person other than a licensee under this title, the tax may be assessed at any time.
(3) In the case of an incorrect return, the tax shall be assessed within 5 years after the filing of such return.
(4)(A) If a return required by this title is not filed, if the return, when filed, is incorrect or insufficient, or if the tax has been determined to be due from a licensee or any other person, the amount of tax due shall be determined by the Mayor from such information as may be obtainable.
(B) Notice of the determination shall be given to the licensee or any person required to file a return or pay the tax.
(C) The notice shall state that the licensee or other person shall have not less than 30 days after the notice is sent within which to file a protest with the Mayor and show cause or reason why the amount of tax determined to be due should not be paid.
(D) If a protest is not filed within the 30-day period, the tax due, as determined by the Mayor, shall be final.
(E) If a protest is filed within the 30-day period, a hearing shall be conducted by the Mayor, a final decision thereon shall be made, and notice of the decision and a statement of taxes determined to be due shall be sent by registered or certified mail to the last known address of the person liable for the payment of the tax.
(b)(1) A licensee or other person required to file a return or pay the tax, who fails to file the return, fails to file a correct return, or fails to pay the tax to the District within the time required by this chapter, shall be subject to (A) a penalty of 5% of the tax due for each month or fraction thereof that the failure continues, not to exceed 25% in the aggregate, plus (B) interest at the rate of 1 1/2% per month on the amount of the tax for each month or fraction thereof during which the failure continues.
(2) If the Mayor determines that the delay was due to reasonable cause, the Mayor may waive all or any part of the penalty, interest, or both.
(3) Unpaid penalty and interest shall be collected in the same manner as the tax imposed by this chapter.
(4) The penalty and interest provided for in this section shall be applicable to any tax determined as a deficiency.
(c) The tax imposed by this chapter, and interest and penalties thereon, shall become, from the time due and payable, a personal debt of the person liable to pay the same to the District. For the purposes of this subsection, the term “person” shall include any officer, and any employee or former employee, of a corporation responsible for the payment of the tax and any member or former member of a partnership, limited liability company, or association, and any employee or former employee, of a partnership, limited liability company, or association responsible for the payment of the tax.
§ 25–908. Collection of tax by OTR Director.
(a) The taxes imposed by this chapter and penalties and interest thereon shall be collected by the OTR Director in the manner provided by law for the collection of taxes due to the District on personal property in force at the time of such collection. The liens for the taxes imposed by this chapter and penalties and interest thereon may be acquired in the same manner that liens for personal property taxes are acquired.
(b) If the OTR Director believes that the collection of a tax imposed by this chapter will be jeopardized by delay, the OTR Director shall, whether or not the time otherwise prescribed by law for filing the return or for paying the tax has expired, immediately assess the tax, plus all interest and penalties, the assessment of which is provided by law. The tax, penalties, and interest shall be immediately due and payable and immediate notice and demand shall be made by the OTR Director for payment.
(c) Upon failure or refusal to pay the tax, penalty, or interest, the OTR Director may collect the tax by distraint.
§ 25–909. Refund of tax erroneously or illegally collected.
(a) If any tax has been erroneously or illegally collected by the District, the tax shall be refunded if application under oath is filed with the OTR Director for such refund within 3 years from the payment of the tax.
(b) The application shall be made by the person upon whom the tax was imposed and who has actually paid the tax.
(c) Application for a refund under this section shall be deemed an application for a revision of tax, penalty, or interest and the OTR Director may receive evidence on the application. After making a determination of whether the refund shall be made, the OTR Director shall notify the applicant of the determination.
§ 25–910. Judicial review of tax determination or denial of refund claim.
A person aggrieved by a final determination of tax or by a denial of a claim for refund (other than a refund of tax finally determined in § 25-909) may, within 6 months from the date of assessment of the deficiency or from the date of the denial of a claim for refund, appeal to the Superior Court of the District of Columbia in the same manner and to the same extent as set forth in §§ 47-3303, 47-3304, 47-3306, 47-3307, and 47-3308.
§ 25–911. Seizure and forfeiture of alcoholic beverages and vehicles for which taxes have not been paid.
(a) Notwithstanding the provisions of § 25-803, if the taxes levied and imposed on alcoholic beverages by this chapter which have not been paid as required by this chapter, such alcoholic beverages shall be declared contraband goods and shall be forfeited to the District in accordance with the procedure set forth in this section. The Mayor may seize any such alcoholic beverages wherever they are found.
(b) If the Mayor has knowledge or reason to suspect that a vehicle is carrying alcoholic beverages or contains any alcoholic beverages in violation of the regulations contained in this title concerning the importation of alcoholic beverages, the Mayor may stop the vehicle and inspect it for alcoholic beverages on which the taxes levied and imposed by this chapter have not been paid. If such alcoholic beverages are found, the alcoholic beverages and the vehicle shall be declared contraband goods, shall be seized, and shall be forfeited to the District; provided, that the following vehicles shall not be subject to forfeiture under this section:
(1) A vehicle used by a person as a common carrier in the transaction of business as a common carrier, unless it appears that the owner or other person in charge of the vehicle was a consenting party or privy to the violation on account of which the vehicle was seized.
(2) A vehicle that is subject to seizure and forfeiture under this section by reason of an act committed or omission established by the owner thereof, which act was committed or omitted by any person other than the owner while the vehicle was unlawfully in the possession of a person other than the owner, in violation of the criminal laws of the United States, the District, or any other state.
(c) All property which is seized under subsection (a) or (b) of this section shall be placed under seal or removed to a place designated by the Mayor. A libel action in the name of the District property shall be prosecuted against the property in the Superior Court of the District of Columbia by the Attorney General for the District of Columbia. Unless good cause is shown to the contrary, the property shall be forfeited to the District.
(d) The property shall not be subject to replevin, but shall be deemed to be in the custody of the Mayor, subject only to the orders, decrees, and judgments of the court.
(e) Notwithstanding the provisions of this section, if the property is subject to seizure and forfeiture on account of failure to comply with the provisions of this title and the Mayor determines that the failure was excusable, the Mayor may return the property to the owner.
(f) If the Mayor determines that any property seized is liable to perish or become greatly reduced in price or value by keeping the property until the completion of forfeiture proceedings, the Mayor may:
(1) Appraise the property and return it to the owner thereof upon the payment of any tax due under this chapter and receipt of a satisfactory bond in an amount equal to the appraised value, which bond may be used to satisfy the final order, decree, or judgment of the court; or
(2) If the owner neglects or refuses to pay the tax and provide the bond, sell the property in the manner provided by the Mayor by regulation and pay the proceeds of the sale, after deducting the reasonable costs of the seizure and sale, to the court to satisfy its final order, decree, or judgment.
(g) After the final order, decree, or judgment is made, forfeited property shall be sold in the same manner as personal property seized for the payment of District taxes. The proceeds of the sale shall be deposited in the General Fund of the District of Columbia. If there is a bona fide prior lien against the forfeited property, the proceeds of the sale of the property shall be applied in the following priority:
(1) the payment of any tax due under this chapter and all expenses incident to the seizure, forfeiture, and sale of the property;
(2) the payment of the lien; and
(3) the remainder shall be deposited with the D.C. Treasurer; provided, that no payment of a lien shall be made if the lienor was a consenting party or privy to the violation of this title for which the property was seized and forfeited. To the extent necessary, liens against forfeited property shall, on good cause shown by the lienor, be transferred from the property to the proceeds of the sale of the property.
