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Internal Revenue Code · 26 U.S.C.

§ 7652. Shipments to the United States

In force Text current through Public Law 119-121 (October 9, 2026) release point 119-121

Official text, no changes From the Office of the Law Revision Counsel, release point 119-121 (current through Public Law 119-121 (October 9, 2026)). Compare it with the official text at uscode.house.gov (external site).

Cite as 26 U.S.C. § 7652

At a glance

Read from the text, the source credit and the official notes. Not part of the law.

Status
In force
Enacted
September 2, 1958 by Pub. L. 85–859
Last amended
July 4, 2025 by Pub. L. 119–21
Amendments
25 dated changes in the source credit
Length
9 subsections · 1,759 words · about 8 min to read
Defines
3 terms
Cross-references
cites 5; cited by 12 Code sections and 0 other regulations
(a) Puerto Rico
(1) Rate of tax

Except as provided in section 5314, articles of merchandise of Puerto Rican manufacture coming into the United States and withdrawn for consumption or sale shall be subject to a tax equal to the internal revenue tax imposed in the United States upon the like articles of merchandise of domestic manufacture.

(2) Payment of tax

The Secretary shall by regulations prescribe the mode and time for payment and collection of the tax described in paragraph (1), including any discretionary method described in section 6302(b) and (c). Such regulations shall authorize the payment of such tax before shipment from Puerto Rico, and the provisions of section 7651(2)(B) shall be applicable to the payment and collection of such tax in Puerto Rico.

(3) Deposit of internal revenue collections

All taxes collected under the internal revenue laws of the United States on articles produced in Puerto Rico and transported to the United States (less the estimated amount necessary for payment of refunds and drawbacks), or consumed in the island, shall be covered into the treasury of Puerto Rico.

(b) Virgin Islands
(1) Taxes imposed in the United States

Except as provided in section 5314, there shall be imposed in the United States, upon articles coming into the United States from the Virgin Islands, a tax equal to the internal revenue tax imposed in the United States upon like articles of domestic manufacture.

(2) Exemption from tax imposed in the Virgin Islands

Such articles shipped from such islands to the United States shall be exempt from the payment of any tax imposed by the internal revenue laws of such islands.

(3) Disposition of internal revenue collections The Secretary shall determine the amount of all taxes imposed by, and collected under the internal revenue laws of the United States on articles produced in the Virgin Islands and transported to the United States. The amount so determined less 1 percent and less the estimated amount of refunds or credits shall be subject to disposition as follows:
(A) The payment of an estimated amount shall be made to the government of the Virgin Islands before the commencement of each fiscal year as set forth in section 4(c)(2) of the Act entitled “An Act to authorize appropriations for certain insular areas of the United States, and for other purposes”, approved August 18, 1978 (48 U.S.C. 1645), as in effect on the date of the enactment of the Trade and Development Act of 2000. The payment so made shall constitute a separate fund in the treasury of the Virgin Islands and may be expended as the legislature may determine.
(B) Any amounts remaining shall be deposited in the Treasury of the United States as miscellaneous receipts.
If at the end of any fiscal year the total of the Federal contribution made under subparagraph (A) with respect to the four calendar quarters immediately preceding the beginning of that fiscal year has not been obligated or expended for an approved purpose, the balance shall continue available for expenditure during any succeeding fiscal year, but only for emergency relief purposes and essential public projects. The aggregate amount of moneys available for expenditure for emergency relief purposes and essential public projects only shall not exceed the sum of $5,000,000 at the end of any fiscal year. Any unobligated or unexpended balance of the Federal contribution remaining at the end of a fiscal year which would cause the moneys available for emergency relief purposes and essential public projects only to exceed the sum of $5,000,000 shall thereupon be transferred and paid over to the Treasury of the United States as miscellaneous receipts.
(c) Articles containing distilled spirits

For purposes of subsections (a)(3) and (b)(3), any article containing distilled spirits shall in no event be treated as produced in Puerto Rico or the Virgin Islands unless at least 92 percent of the alcoholic content in such article is attributable to rum.

(d) Articles other than articles containing distilled spirits For purposes of subsections (a)(3) and (b)(3)—
(1) Value added requirement for Puerto Rico Any article, other than an article containing distilled spirits, shall in no event be treated as produced in Puerto Rico unless the sum of—
(A) the cost or value of the materials produced in Puerto Rico, plus
(B) the direct costs of processing operations performed in Puerto Rico,
equals or exceeds 50 percent of the value of such article as of the time it is brought into the United States.
(2) Prohibition of Federal excise tax subsidies
(A) In general

No amount shall be transferred under subsection (a)(3) or (b)(3) in respect of taxes imposed on any article, other than an article containing distilled spirits, if the Secretary determines that a Federal excise tax subsidy was provided by Puerto Rico or the Virgin Islands (as the case may be) with respect to such article.

(B) Federal excise tax subsidy For purposes of this paragraph, the term “Federal excise tax subsidy” means any subsidy—
(i) of a kind different from, or
(ii) in an amount per value or volume of production greater than,
the subsidy which Puerto Rico or the Virgin Islands offers generally to industries producing articles not subject to Federal excise taxes.
(3) Direct costs of processing operations

For purposes of this subsection, the term “direct cost of processing operations” has the same meaning as when used in section 213 of the Caribbean Basin Economic Recovery Act.

(e) Shipments of rum to the United States
(1) Excise taxes on rum covered into treasuries of Puerto Rico and Virgin Islands

All taxes collected under section 5001(a)(1) on rum imported into the United States (less the estimated amount necessary for payment of refunds and drawbacks) shall be covered into the treasuries of Puerto Rico and the Virgin Islands.

(2) Secretary prescribes formula

The Secretary shall, from time to time, prescribe by regulation a formula for the division of such tax collections between Puerto Rico and the Virgin Islands and the timing and methods for transferring such tax collections.

(3) Rum defined

For purposes of this subsection, the term “rum” means any article classified under subheading 2208.40.00 of the Harmonized Tariff Schedule of the United States (19 U.S.C. 1202).

(4) Coordination with subsections (a) and (b)

Paragraph (1) shall not apply with respect to any rum subject to tax under subsection (a) or (b).

(f) Limitation on cover over of tax on distilled spirits For purposes of this section, with respect to taxes imposed under section 5001 or this section on distilled spirits, the amount covered into the treasuries of Puerto Rico and the Virgin Islands shall not exceed the lesser of the rate of—
(1) $13.25, or
(2) the tax imposed under subsection (a)(1) of section 5001, determined as if subsection (c)(1) of such section did not apply, on each proof gallon.
(g) Drawback for medicinal alcohol, etc. In the case of medicines, medicinal preparations, food products, flavors, flavoring extracts, or perfume containing distilled spirits, which are unfit for beverage purposes and which are brought into the United States from Puerto Rico or the Virgin Islands—
(1) subpart B of part II of subchapter A of chapter 51 shall be applied as if—
(A) the use and tax determination described in section 5111 had occurred in the United States by a United States person at the time the article is brought into the United States, and
(B) the rate of tax were the rate applicable under subsection (f) of this section, and
(2) no amount shall be covered into the treasuries of Puerto Rico or the Virgin Islands.
(h) Manner of cover over of tax must be derived from this title No amount shall be covered into the treasury of Puerto Rico or the Virgin Islands with respect to taxes for which cover over is provided under this section unless made in the manner specified in this section without regard to—
(1) any provision of law which is not contained in this title or in a revenue Act; and
(2) whether such provision of law is a subsequently enacted provision or directly or indirectly seeks to waive the application of this subsection.
(i) Determination of taxes collected

For purposes of subsections (a)(3), (b)(3), and (e)(1), refunds under section 5001(c)(4) shall not be taken into account as a refund, and the amount of taxes imposed by and collected under section 5001(a)(1) shall be determined without regard to section 5001(c).

(Aug. 16, 1954, ch. 736, 68A Stat. 907; Pub. L. 85–859, title II, § 204(17), (18), Sept. 2, 1958, 72 Stat. 1430; Pub. L. 89–44, title VIII, § 808(b)(3), June 21, 1965, 79 Stat. 164; Pub. L. 94–202, § 10(a), Jan. 2, 1976, 89 Stat. 1141; Pub. L. 94–455, title XIX, § 1906(a)(55), (b) (13)(A), Oct. 4, 1976, 90 Stat. 1832, 1834; Pub. L. 98–67, title II, § 221(a), Aug. 5, 1983, 97 Stat. 395; Pub. L. 98–213, § 5(c), Dec. 8, 1983, 97 Stat. 1460; Pub. L. 98–369, div. B, title VI, §§ 2681(a), 2682(a), July 18, 1984, 98 Stat. 1172, 1174; Pub. L. 99–514, title XVIII, § 1879(i)(1), Oct. 22, 1986, 100 Stat. 2907; Pub. L. 100–418, title I, § 1214(p)(1), Aug. 23, 1988, 102 Stat. 1159; Pub. L. 103–66, title XIII, § 13227(e), Aug. 10, 1993, 107 Stat. 494; Pub. L. 103–465, title I, § 136(b), Dec. 8, 1994, 108 Stat. 4841; Pub. L. 106–170, title V, § 512(a), Dec. 17, 1999, 113 Stat. 1924; Pub. L. 106–200, title VI, § 602(b), (c), May 18, 2000, 114 Stat. 305, 306; Pub. L. 107–147, title VI, § 609(a), Mar. 9, 2002, 116 Stat. 60; Pub. L. 108–311, title III, § 305(a), Oct. 4, 2004, 118 Stat. 1179; Pub. L. 109–59, title XI, § 11125(b)(22), Aug. 10, 2005, 119 Stat. 1957; Pub. L. 109–432, div. A, title I, § 114(a), Dec. 20, 2006, 120 Stat. 2940; Pub. L. 110–343, div. C, title III, § 308(a), Oct. 3, 2008, 122 Stat. 3869; Pub. L. 111–312, title VII, § 755(a), Dec. 17, 2010, 124 Stat. 3322; Pub. L. 112–240, title III, § 329(a), Jan. 2, 2013, 126 Stat. 2335; Pub. L. 113–295, div. A, title I, § 140(a), Dec. 19, 2014, 128 Stat. 4020; Pub. L. 114–113, div. Q, title I, § 172(a), Dec. 18, 2015, 129 Stat. 3071; Pub. L. 115–97, title I, § 13807(b), Dec. 22, 2017, 131 Stat. 2176; Pub. L. 115–123, div. D, title II, § 41102(a)(1), (b)(1), Feb. 9, 2018, 132 Stat. 155; Pub. L. 116–260, div. EE, title I, § 107(a)(2), Dec. 27, 2020, 134 Stat. 3046; Pub. L. 119–21, title VII, § 70427(a), July 4, 2025, 139 Stat. 238.)

Terms defined here

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Cross-references

Computed from the citations in the text of Title 26 and 26 CFR.

This section cites 5 other sections

Cited by 12 Code sections

Amendment history

From the source credit and the official notes, newest first.

  1. Amended by Pub. L. 119–21Parts changed in 2025: (f)(1)
  2. Amended by Pub. L. 116–260Parts changed in 2020: (e)(5) (i)
  3. Amended by Pub. L. 115–123Parts changed in 2018: (e)(5) (f)(1)
  4. Amended by Pub. L. 115–97Parts changed in 2017: (f)(2)
  5. Amended by Pub. L. 114–113Parts changed in 2015: (f)(1)
  6. Amended by Pub. L. 113–295Parts changed in 2014: (f)(1)
  7. Amended by Pub. L. 112–240Parts changed in 2013: (f)(1)
  8. Amended by Pub. L. 111–312Parts changed in 2010: (f)(1)
  9. Amended by Pub. L. 110–343Parts changed in 2008: (f)(1)
  10. Amended by Pub. L. 109–432Parts changed in 2006: (f)(1)
  11. Amended by Pub. L. 109–59Parts changed in 2005: (g)(1) (g)(1)(A)
  12. Amended by Pub. L. 108–311Parts changed in 2004: (f)(1)
  13. Amended by Pub. L. 107–147Parts changed in 2002: (f)(1)
  14. Amended by Pub. L. 106–200Parts changed in 2000: (b)(3) (h)
  15. Amended by Pub. L. 106–170Parts changed in 1999: (f)(1)
  16. Amended by Pub. L. 103–465Parts changed in 1994: (g)
  17. Amended by Pub. L. 103–66Parts changed in 1993: (f)(1)
  18. Amended by Pub. L. 100–418Parts changed in 1988: (e)(3)
  19. Amended by Pub. L. 99–514Parts changed in 1986: (g)
  20. Amended by Pub. L. 98–369Parts changed in 1984: (c) (f)
  21. Amended by Pub. L. 98–213Parts changed in 1983: (b)(3) (c)
  22. Amended by Pub. L. 98–67
  23. Amended by Pub. L. 94–455Parts changed in 1976: (a)(2) (b)(3) (b)(3)(A) (b)(3)(B)
  24. Amended by Pub. L. 94–202
  25. Amended by Pub. L. 89–44Parts changed in 1965: (a)(3)
  26. Enacted by Pub. L. 85–859Parts changed in 1958: (a)(1) (b)(1)

Where it sits in the Code

  1. Subtitle F Procedure and Administration
  2. Chapter 78 DISCOVERY OF LIABILITY AND ENFORCEMENT OF TITLE
  3. Subchapter D Possessions

Nearby sections

Official notes

The Law Revision Counsel's notes for this section (amendments, effective dates and related laws) are long, so they have their own page.