Distilled Spirits Tax Payment Act of 1985

Distilled Spirits Tax Payment Act of 1985 - Amends the Internal Revenue Code to allow the transfer in bond between bonded premises of distilled spirits on which tax has not been paid or determined.

Allows a bonded dealer to establish a distilled spirits plant. Sets forth requirements for the operation of a distilled spirits plant by a bonded dealer. Defines "bonded dealer" as any wholesale dealer who has elected to establish a distilled spirits plant and engages in the business of purchasing distilled spirits from the primary source of supply for resale exclusively at wholesale to independent retail dealers or other wholesale dealers.

Provides that every proprietor or possesser and every person interested in the premises of a distilled spirits plant shall be jointly and severally liable for the taxes imposed on distilled spirits.

Authorizes the Secretary of the Treasury to make an assessment for tax on distilled spirits not accounted for by a bonded dealer. (Present law limits such requirement to a distiller.)

Provides that the credit for wine content and for flavors content shall be determined and allowable as a reduction in the rate of tax on the payment of tax by the proprietor of a distilled spirits plant, bonded dealer, or other taxpayer liable for the payment of the excise tax on such products.

Allows a State or political subdivision which engages in the sale of distilled spirits to file monthly returns of taxes (rather than semimonthly).

Provides that the exemption from the occupational tax shall not apply to a proprietor of a distilled spirits plant whose premises are used for operations of a bonded dealer.

Sets forth certain transitional rules.

Provides that no domestically produced or bottled spirits in the inventory of a bonded dealer on the effective date of this Act on which the Federal excise tax has been paid shall be subject to the filing of an excise tax return and the payment of excise tax.