# Lookup by barcode
Source: https://docs.colacloud.us/api-reference/barcodes/lookup-by-barcode
/openapi.yaml get /barcode/{barcode_value}
Find COLAs by barcode value (UPC, EAN, etc.).
Returns up to 100 COLAs associated with the given barcode.
# Get COLA details
Source: https://docs.colacloud.us/api-reference/colas/get-cola-details
/openapi.yaml get /colas/{ttb_id}
Retrieve detailed information for a single COLA by its TTB ID.
Includes all label images with stable CloudFront URLs and barcode data.
Counts as one detail view against your quota.
# Search COLAs
Source: https://docs.colacloud.us/api-reference/colas/search-colas
/openapi.yaml get /colas
Search and filter Certificates of Label Approval with full-text search and various filters.
Results are ordered by approval date (descending).
When no explicit date filters (`approval_date_from`, `approval_date_to`) are provided, results
default to the last 365 days. This applies to all queries, including text search. To search
the full historical database, pass `approval_date_from` explicitly (e.g., `2005-01-01`).
The `defaults_applied` field in the response indicates when this default is active.
# Get permittee details
Source: https://docs.colacloud.us/api-reference/permittees/get-permittee-details
/openapi.yaml get /permittees/{permit_number}
Retrieve detailed information for a single permittee by permit number.
Includes the 10 most recent COLAs for this permit holder.
Counts as one detail view against your quota.
# Search permittees
Source: https://docs.colacloud.us/api-reference/permittees/search-permittees
/openapi.yaml get /permittees
Search permit holders (wineries, breweries, distilleries, importers, etc.).
Results are ordered by total COLA count (most active first).
# Get AVA details
Source: https://docs.colacloud.us/api-reference/reference-data/get-ava-details
/openapi.yaml get /avas/{ava_id}
Retrieve detailed information for a single American Viticultural Area by its AVA ID.
Includes parent/child AVA relationships and regulatory references.
This endpoint is free — it does not consume quota.
# Get COLA processing times
Source: https://docs.colacloud.us/api-reference/reference-data/get-cola-processing-times
/openapi.yaml get /processing-times
Current TTB label application processing times by commodity (Wine, Malt Beverage, Distilled Spirits).
Sourced from the TTB's public processing times page.
This endpoint is free — it does not consume quota.
# Get formula processing times
Source: https://docs.colacloud.us/api-reference/reference-data/get-formula-processing-times
/openapi.yaml get /processing-times/formula
Current TTB formula application processing times by formula type and commodity.
Sourced from the TTB's public processing times page.
This endpoint is free — it does not consume quota.
# Get production reports
Source: https://docs.colacloud.us/api-reference/reference-data/get-production-reports
/openapi.yaml get /production-reports
TTB statistical production reports — monthly and annual data on alcohol production,
removals, and inventories by commodity and statistical group.
This endpoint is free — it does not consume quota.
# Get registration processing times
Source: https://docs.colacloud.us/api-reference/reference-data/get-registration-processing-times
/openapi.yaml get /processing-times/registration
Current TTB original permit application processing times by category and application type.
Sourced from the TTB's public processing times page.
This endpoint is free — it does not consume quota.
# List American Viticultural Areas
Source: https://docs.colacloud.us/api-reference/reference-data/list-american-viticultural-areas
/openapi.yaml get /avas
List all American Viticultural Areas (AVAs) — federally designated wine grape-growing regions.
Optionally filter by state or search by name.
This endpoint is free — it does not consume quota.
# Create a saved search
Source: https://docs.colacloud.us/api-reference/saved-searches/create-a-saved-search
/openapi.yaml post /saved-searches
Create a durable saved search using the non-date filter field names from the
web app's SearchForm. Include a schedule object to enable a recurring
saved-search alert.
OAuth callers must have the `saved_searches:write` scope. Approval-date
filters are not saved-search configuration; scheduled runs use the saved
search's previous run and current run as the approval-date window. Broad
recurring searches without a meaningful filter are rejected. Each user can
have up to 10 active scheduled watchlists.
# Get API usage
Source: https://docs.colacloud.us/api-reference/usage/get-api-usage
/openapi.yaml get /usage
Get current usage statistics for your account.
Shows detail view and list record consumption, limits, and tier information.
# Authentication & Quotas
Source: https://docs.colacloud.us/authentication
API key authentication, usage quotas, and pagination.
## Authentication
Self-serve REST, SDK, and CLI requests use a COLA Cloud API key in the
`X-API-Key` header:
```bash theme={null}
curl -H "X-API-Key: your_api_key" \
"https://app.colacloud.us/api/v1/colas?q=bourbon"
```
Generate API keys at **Dashboard > API Keys** in the [web app](https://app.colacloud.us).
MCP clients may use the same key as a Bearer token:
```bash theme={null}
Authorization: Bearer cola_xxxx
```
OAuth-based assistant connectors use WorkOS-issued Bearer tokens and are scoped
per connected app. See [Assistant Security and Quotas](/sdks/mcp-security) for
the assistant-specific scope and revocation model.
### SDKs and CLI
Both SDKs require the API key as a constructor argument:
```python theme={null}
client = ColaCloud(api_key="cola_xxxx") # Python
```
```typescript theme={null}
const client = new ColaCloud({ apiKey: 'cola_xxxx' }); // JavaScript
```
The CLI reads from the `COLACLOUD_API_KEY` environment variable or a persistent config file:
```bash theme={null}
export COLACLOUD_API_KEY=cola_xxxx # Environment variable
cola config set-key # Or configure persistently
```
## Quotas
Usage is metered by **detail views** (single-record lookups) and **list records** (items returned by list/search endpoints). Quotas are per-user across all channels (web app, API, SDKs, CLI, and MCP).
| Tier | Detail Views/mo | List Records/mo | Burst/min |
| -------------- | --------------- | --------------- | --------- |
| Free | 200 | 10,000 | 10 |
| Starter (\$39) | 2,000 | 100,000 | 60 |
| Pro (\$99) | 10,000 | 1,000,000 | 120 |
Upgrade your tier at **Dashboard > API Keys > Upgrade**.
### Quota Headers
Every response includes these headers:
| Header | Description |
| -------------------------- | ------------------------------------------------------ |
| `X-Detail-Views-Limit` | Your monthly detail view limit |
| `X-Detail-Views-Remaining` | Detail views remaining this month |
| `X-List-Records-Limit` | Your monthly list record limit |
| `X-List-Records-Remaining` | List records remaining this month |
| `X-Quota-Reset` | Unix timestamp when quotas reset (first of next month) |
When you exceed a quota, the API returns `429 Too Many Requests` with an `upgrade_url` in the response body. Per-minute burst limits return a `Retry-After` header.
## Pagination
List endpoints support `page` and `per_page` parameters:
| Parameter | Default | Max | Description |
| ---------- | ------- | --- | ---------------- |
| `page` | 1 | — | Page number |
| `per_page` | 20 | 100 | Results per page |
Responses include pagination metadata:
```json theme={null}
{
"data": [...],
"pagination": {
"page": 1,
"per_page": 20,
"total": 1234,
"pages": 62
}
}
```
## Error Responses
| Status | Code | Description |
| ------ | ---------------- | ------------------------------------------------------------ |
| 401 | `unauthorized` | Missing or invalid API key or Bearer token |
| 404 | `not_found` | Resource not found |
| 429 | `quota_exceeded` | Detail view, list record, or per-minute burst limit exceeded |
```json theme={null}
{
"error": {
"code": "unauthorized",
"message": "API key required. Provide via X-API-Key header or Authorization: Bearer.",
"details": {}
}
}
```
# Open Data
Source: https://docs.colacloud.us/data-products/open-data
Free TTB reference datasets available as CSV downloads and API endpoints. No quota consumed.
COLA Cloud publishes several TTB reference datasets as free, open data. These are available as both CSV downloads and API endpoints. API access requires an API key but does **not** count against your monthly quota.
## Available Datasets
| Dataset | Description | Rows | Updated | CSV | API |
| --------------------------------- | ---------------------------------------------------------- | -------- | ------------ | ------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------- |
| **Processing Times** | COLA label application turnaround times by commodity | \~80 | Daily | [Download](https://dyuie4zgfxmt6.cloudfront.net/open-data/ttb_processing_times.csv) | [`GET /processing-times`](/api-reference/reference-data/get-cola-processing-times) |
| **Formula Processing Times** | Formula application turnaround times by type and commodity | \~100 | Daily | [Download](https://dyuie4zgfxmt6.cloudfront.net/open-data/ttb_formula_processing_times.csv) | [`GET /processing-times/formula`](/api-reference/reference-data/get-formula-processing-times) |
| **Registration Processing Times** | Original permit application turnaround times | \~200 | Periodic | [Download](https://dyuie4zgfxmt6.cloudfront.net/open-data/ttb_registration_processing_times.csv) | [`GET /processing-times/registration`](/api-reference/reference-data/get-registration-processing-times) |
| **Production Reports** | Monthly and annual alcohol production statistics | \~15,000 | Full refresh | [Download](https://dyuie4zgfxmt6.cloudfront.net/open-data/ttb_production_reports.csv) | [`GET /production-reports`](/api-reference/reference-data/get-production-reports) |
| **Viticultural Areas (AVAs)** | Federally designated wine grape-growing regions | \~340 | Full refresh | [Download](https://dyuie4zgfxmt6.cloudfront.net/open-data/ttb_viticultural_areas.csv) | [`GET /avas`](/api-reference/reference-data/list-american-viticultural-areas) |
| **Permittees** | Licensed alcohol producers, importers, and wholesalers | \~30,000 | Full refresh | [Download](https://dyuie4zgfxmt6.cloudfront.net/open-data/permittees.csv) | [`GET /permittees`](/api-reference/permittees/search-permittees) |
## CSV Downloads
All CSV files are hosted on CloudFront and available without authentication. Download directly or use them in your data pipelines:
```bash theme={null}
curl -O https://dyuie4zgfxmt6.cloudfront.net/open-data/ttb_processing_times.csv
curl -O https://dyuie4zgfxmt6.cloudfront.net/open-data/ttb_production_reports.csv
curl -O https://dyuie4zgfxmt6.cloudfront.net/open-data/ttb_viticultural_areas.csv
```
## API Access
All reference data endpoints require an `X-API-Key` header but are free to call — they do not consume detail view or list record quota. They are subject to burst rate limits.
```bash theme={null}
curl -H "X-API-Key: your_api_key" https://app.colacloud.us/api/v1/processing-times
curl -H "X-API-Key: your_api_key" https://app.colacloud.us/api/v1/avas?state=CA
curl -H "X-API-Key: your_api_key" https://app.colacloud.us/api/v1/production-reports?year=2024&commodity=wine
```
## Data Sources
All datasets are sourced from public TTB data and refreshed regularly:
* **Processing times** — scraped from the [TTB processing times page](https://www.ttb.gov/regulated-commodities/labeling/processing-times)
* **Production reports** — from the [TTB statistical reports](https://www.ttb.gov/statistics)
* **AVAs** — from [27 CFR Part 9](https://www.ecfr.gov/current/title-27/chapter-I/subchapter-A/part-9)
* **Permittees** — from the [TTB Permits Online](https://www.ttb.gov/ponl/public-permit-search) database
## License
These datasets are derived from US federal government public data and are provided as-is. The underlying TTB data is in the public domain. COLA Cloud's value-add (cleaning, structuring, enrichment) is offered freely for these reference datasets.
## COLA Registry Access
Looking for COLA label records? The self-service [REST API](/quickstart) covers the 2005-forward application database. For warehouse-ready delivery, contract terms, and bulk access to the 2.9M+ record dataset with label images, barcodes, and LLM enrichments, ask about a data license with delivery via Snowflake data share or file export. You can also preview the shape of the data with the free [sample pack](/data-products/sample-pack). [Contact us](https://colacloud.us/contact) to learn more.
# Sample Pack
Source: https://docs.colacloud.us/data-products/sample-pack
Download a free sample of 1,000 COLA records with label images and barcodes in CSV format.
## Download
A curated sample of 1,000 recent COLA records (2025 approvals) with associated label images and extracted barcodes.
**Download cola-sample-pack-v1.zip** (\~500 KB)
No account or API key required.
## Contents
The ZIP contains three CSV files:
| File | Rows | Description |
| ------------------------ | ------- | -------------------------------------------------------------------------------------------------------------------------------------- |
| `cola.csv` | 1,000 | Product label approval records — brand, product type, origin, OCR-extracted ABV/volume, LLM-enriched category, tasting notes, and more |
| `cola_image.csv` | \~1,750 | Label images for the 1,000 COLAs — dimensions, container position (front/back/neck/strip), and OCR-extracted text |
| `cola_image_barcode.csv` | \~500 | Barcodes extracted from label images — type (UPC-A, EAN-13, QR, etc.), decoded value, pixel position |
## Relationships
```
cola.TTB_ID → cola_image.TTB_ID (one-to-many)
cola_image.TTB_IMAGE_ID → cola_image_barcode.TTB_IMAGE_ID (one-to-many)
```
## Key columns
**cola.csv** includes 60+ columns. Highlights:
* `TTB_ID` — unique identifier for each COLA approval
* `BRAND_NAME`, `PRODUCT_NAME` — the product
* `PRODUCT_TYPE` — Wine, Malt Beverage, or Distilled Spirits
* `LLM_CATEGORY`, `LLM_CATEGORY_PATH` — AI-classified product taxonomy
* `LLM_PRODUCT_DESCRIPTION` — natural language product description from label reading
* `OCR_ABV` — alcohol by volume, extracted via OCR
* `BARCODE_VALUE`, `BARCODE_TYPE` — primary barcode from the label
* `MAIN_TTB_IMAGE_ID` — viewable at `https://dyuie4zgfxmt6.cloudfront.net/{TTB_IMAGE_ID}.webp`
## Full dataset
The sample represents a small slice of the full COLA Cloud dataset:
* 2.9M+ COLA records (back to 2005)
* 5M+ label images
* 575K+ extracted barcodes
* Updated daily (\~2,500 new approvals per week)
For full access, see the [REST API](/quickstart), [Snowflake data share](/data-products/snowflake), or [contact us](https://colacloud.us/contact).
# Dataset Schema
Source: https://docs.colacloud.us/data-products/snowflake
Full schema documentation for the COLA Cloud dataset — 4 tables, 100+ columns.
The COLA Cloud dataset contains structured alcohol label data across 4 tables and 100+ columns. For the REST API (which exposes a subset of these fields), see the [API Reference](/api-reference/colas/search-colas).
The source of truth is the [TTB Public COLA Registry](https://www.ttb.gov/regulated-commodities/labeling/cola-public-registry), enriched with OCR, barcode extraction, and LLM inference. Bulk access is available as a data license — [contact us](https://colacloud.us/contact) to learn more.
## Relationships
* **permittees** → **colas**: One permittee has many COLAs. Join on `permit_number`.
* **colas** → **cola\_images**: One COLA has 1-2 label images. Join on `ttb_id`.
* **cola\_images** → **cola\_image\_barcodes**: One image has zero or more barcodes. Join on `ttb_image_id`.
* `cola_image_barcodes.ttb_id` is denormalized from `colas` for convenience.
***
## colas
Certificates of Label Approval issued by the TTB. Each row is a unique label approval application. Features come directly from the TTB application as well as post-processing (barcode recognition, OCR, LLM inference). Contains COLAs from 2005 through yesterday.
| Column | Type | Description |
| ------------------------------ | ------- | -------------------------------------------------------------------------------------------------------------------------- |
| `ttb_id` | string | **Primary key.** Unique identifier assigned by the TTB (14 digits) |
| `application_type` | string | Purpose of the application: approval or exemption |
| `application_status` | string | Current status: approved, revoked, surrendered, or expired |
| `is_distinctive_container` | boolean | Whether the container is unusual and requires specific approval |
| `for_distinctive_capacity` | string | Volume of the distinctive container as free text from the application |
| `is_resubmission` | boolean | Whether this is a resubmission of a previous COLA |
| `for_resubmission_ttb_id` | string | The `ttb_id` of the previous COLA, when this is a resubmission |
| `for_exemption_state` | string | For exemption applications, the US state where the product will be exclusively sold |
| `approval_qualifications` | string | Qualifying statements by the TTB relating to specific conditions of approval |
| `off_label_information` | string | Manufacturer-specified product information appearing on the container but not on the provided labels |
| `is_form_physical` | boolean | Whether the application was submitted as a physical form. Physical submissions lack imagery and several other features |
| `form_image_s3_key` | string | S3 key to the scanned form document image (physical submissions only) |
| `application_date` | date | Date the application was submitted |
| `approval_date` | date | Date the application was approved |
| `expiration_date` | date | Date the approval expires, when applicable |
| `latest_update_date` | date | Latest date in the process (update, application, or approval). The "completed date" in the TTB's COLA Search Registry |
| `product_name` | string | The "fanciful name" in the COLA Search Registry. Includes logic for missing names or names placed in the brand\_name field |
| `brand_name` | string | The "brand name" in the COLA Search Registry. Includes logic for product\_names placed in the brand\_name field |
| `product_type` | string | Type of alcohol: `malt beverage`, `distilled spirits`, or `wine` |
| `class_id` | string | TTB product class code |
| `class_name` | string | TTB product class name (e.g., "Whisky", "Table Wine", "Ale") |
| `origin_id` | string | TTB origin code |
| `origin_name` | string | TTB origin name (country or US state) |
| `domestic_or_imported` | string | Whether the product is domestic or imported |
| `grape_varietals` | array | Wine grape varietals, drawn from both the COLA and LLM interpretation of label text |
| `wine_vintage_year` | integer | Vintage year for wine and liquor products, drawn from both the COLA and LLM interpretation |
| `wine_appellation` | string | Wine appellation, drawn from both the COLA and LLM interpretation of label text |
| `formula_code` | string | Code relating to formulation approvals |
| `permit_number` | string | FK to `permittees`. The applicant's plant registry, basic permit, or brewers number |
| `address_text` | string | Full business address of the applicant |
| `address_recipient` | string | Business recipient extracted from the address (first line) |
| `address_zip_code` | string | Zip code extracted from the business address |
| `address_state` | string | US state abbreviation extracted from the business address |
| `ocr_abv` | float | ABV percentage extracted from label images via OCR |
| `ocr_abv_ttb_image_id` | string | FK to `cola_images`. The image from which the ABV was extracted |
| `ocr_volume` | float | Volume quantity extracted from label images via OCR |
| `ocr_volume_unit` | string | Volume units extracted from label images (e.g., "ml", "fl oz") |
| `ocr_volume_ttb_image_id` | string | FK to `cola_images`. The image from which volume was extracted |
| `main_ttb_image_id` | string | FK to `cola_images`. The front image, or a fallback if no front image exists |
| `main_image_s3_key` | string | S3 key of the main image |
| `image_count` | integer | Number of associated label images (excludes form images) |
| `image_count_broken` | integer | Number of label images that couldn't be opened with standard Python libraries |
| `has_front_image` | boolean | Whether the COLA has a front (or top of keg) label image |
| `has_back_image` | boolean | Whether the COLA has a back label image |
| `has_neck_image` | boolean | Whether the COLA has a neck label image |
| `has_strip_image` | boolean | Whether the COLA has a strip label image |
| `barcode_type` | string | Barcode type of the "best" barcode for this COLA, rolled up from `cola_image_barcodes` (e.g., `upca`, `qr`) |
| `barcode_value` | string | Decoded barcode value (e.g., `012345678901`) |
| `ttb_image_barcode_id` | string | FK to `cola_image_barcodes`. The specific barcode record |
| `qrcode_url` | string | URL extracted from QR codes found in label images |
| `llm_category` | string | Hierarchical category name inferred from label text (e.g., "Bourbon") |
| `llm_category_path` | string | Full path through the category hierarchy (e.g., "Spirits > Whiskey > Bourbon") |
| `llm_container_type` | string | Container type inferred from label text (e.g., can, bottle, keg) |
| `llm_product_description` | string | Free-text product description inferred from the label |
| `llm_tasting_notes` | string | Free-text tasting notes inferred from the label |
| `llm_tasting_note_flavors` | array | Array of tasting note flavors inferred from label text |
| `llm_brand_established_year` | integer | Year the brand was established, inferred from label text |
| `llm_artwork_credit` | string | Artist or designer credit for label artwork |
| `llm_wine_designation` | string | Special designations for wines (e.g., "Reserve", "Estate") |
| `llm_beer_ibu` | string | International Bitterness Units for beers (\~5-120), inferred from label text |
| `llm_beer_hops_varieties` | array | Hop variety names for beer products |
| `llm_liquor_aged_years` | integer | Years aged for spirits |
| `llm_liquor_finishing_process` | string | Finishing process details for spirits (e.g., "Sherry cask finished") |
| `llm_liquor_grains` | array | Grains used in spirit production |
***
## cola\_images
Individual label images associated with each COLA application. Image files are stored in S3. Each COLA typically has 1-2 images (front and back labels). Images contain physical dimensions, pixel dimensions, and the relative position on the container.
| Column | Type | Description |
| -------------------- | ------- | ---------------------------------------------------------------------- |
| `ttb_image_id` | string | **Primary key.** Concatenation of `ttb_id` and `image_index` |
| `ttb_id` | string | FK to `colas` |
| `image_index` | integer | Index of the image within the COLA, starting from 0 |
| `s3_key` | string | Path to the image file in S3 |
| `extension_type` | string | Image file format: JPEG, PNG, or TIFF |
| `file_size_mb` | float | Image file size in megabytes |
| `width_pixels` | integer | Image width in pixels |
| `height_pixels` | integer | Image height in pixels |
| `container_position` | string | Label position on the container: front, neck, back, strip, or other |
| `width_inches` | float | Approximate physical width of the label in inches |
| `height_inches` | float | Approximate physical height of the label in inches |
| `barcode_count` | integer | Number of non-QR barcodes found in the image |
| `qrcode_count` | integer | Number of QR codes found in the image |
| `ocr_text` | string | Full OCR text extracted from the image via Google Cloud Vision API |
| `is_openable` | boolean | Whether the image could be opened with Python's standard image library |
***
## cola\_image\_barcodes
Barcodes found in label images, extracted with the PyZBAR library. Barcode types include one-dimensional (UPCA, EAN-13) and two-dimensional (QR codes). Includes bounding box and position information.
| Column | Type | Description |
| -------------------------- | ------- | --------------------------------------------------------------------------------------------------------- |
| `ttb_image_barcode_id` | string | **Primary key.** Concatenation of `ttb_image_id` and barcode index |
| `ttb_image_id` | string | FK to `cola_images` |
| `ttb_id` | string | FK to `colas` (denormalized) |
| `image_barcode_index` | integer | Index of the barcode within the image, starting from 0 |
| `barcode_type` | string | Barcode type (e.g., `upca`, `qr`) |
| `barcode_value` | string | Decoded barcode value |
| `barcode_cola_occurences` | integer | Number of times this barcode value appears across all COLAs. Higher counts indicate decreased reliability |
| `width_pixels` | integer | Barcode width in pixels |
| `height_pixels` | integer | Barcode height in pixels |
| `image_offset_top_pixels` | integer | Offset from the top of the image in pixels |
| `image_offset_left_pixels` | integer | Offset from the left of the image in pixels |
| `orientation` | string | Barcode orientation: vertical, horizontal, or square |
| `relative_image_position` | string | Position within the image (e.g., "top left", "bottom center") |
***
## permittees
TTB permit holders — businesses authorized to produce or import alcohol in the United States. Combines permits from TTB bulk exports (distilleries, importers, wholesalers) with permits found in the COLA Registry (breweries, wineries).
| Column | Type | Description |
| ---------------------------- | ------- | ---------------------------------------------------------------------------------------- |
| `permit_number` | string | **Primary key.** TTB permit number with hyphen-separated sections indicating permit type |
| `company_name` | string | Name of the permit-holding entity from the active permit, or the most recent COLA |
| `company_state` | string | US state (lowercase) from the active permit, or the most recent COLA |
| `company_zip_code` | string | 5-digit US ZIP code from the active permit, or the most recent COLA |
| `permittee_type` | string | Industry type from TTB permit records |
| `is_active` | boolean | Whether the permit is in TTB export records, or has a COLA in the last 365 days |
| `active_reason` | string | Details the `is_active` indicator: "permit listed" or "cola within 365 days" |
| `colas` | integer | All-time count of COLA applications for this permit |
| `colas_approved` | integer | All-time count of approved COLA applications |
| `last_cola_application_date` | date | Date of the most recent COLA application |
***
## Update Frequency
* **New COLAs**: \~2,500/week (scraped daily from the TTB Public COLA Registry)
* **Image processing**: Within 24 hours of COLA scrape
* **Barcode extraction**: Batch processed weekly
* **LLM enrichment**: Batch processed weekly
* **Permittees**: Updated with each daily scrape and periodic TTB bulk imports
# Monitor TTB COLA Approvals with ChatGPT and Claude
Source: https://docs.colacloud.us/guides/monitor-ttb-cola-approvals-with-chatgpt-and-claude
Use COLA Cloud assistant integrations to find new alcohol label approvals and create durable saved-search alerts.
## Product Promise
COLA Cloud turns TTB alcohol label approvals into an assistant-ready data source.
Use ChatGPT, Claude, Claude Code, or another MCP client to search approvals,
fetch cited records, and inspect permittees. Use the COLA Cloud web app when you
want a durable saved-search alert that COLA Cloud owns and runs.
Good fits:
* Track competitor product launches by brand, category, origin, or permittee.
* Monitor new import activity by state or permittee type.
* Watch for category trends such as ready-to-drink cocktails, agave spirits, or low-ABV wine.
* Draft the right filters with an assistant, then save durable email alerts in the web app.
## Fastest Self-Serve Setup
For a developer workflow, use Claude Code or another MCP client that supports
remote HTTP headers:
```json theme={null}
{
"mcpServers": {
"colacloud": {
"type": "http",
"url": "https://mcp.colacloud.us/mcp",
"headers": {
"Authorization": "Bearer ${COLA_API_KEY}"
}
}
}
}
```
Create your API key in **Dashboard > API Keys**, export it as `COLA_API_KEY`,
and ask:
```text theme={null}
Use COLA Cloud to find new California cabernet approvals from the last 90 days.
Fetch details for the three most relevant records and include links.
```
If your MCP client or setup agent starts asking about OAuth, stop and confirm
which path you are using. ChatGPT uses the published app and OAuth. Direct MCP
clients use the API-key Bearer header above.
## ChatGPT and Claude Connectors
The published ChatGPT app and direct MCP clients use the same hosted MCP server:
```text theme={null}
https://mcp.colacloud.us/mcp
```
ChatGPT users can connect the published [COLA Cloud plugin](/sdks/mcp-chatgpt)
from the ChatGPT Plugin Directory. Claude Code and other direct MCP clients can use
the API-key configuration above when they support custom HTTP headers.
The API-key path above remains the self-serve setup for MCP clients that support
custom headers. See [ChatGPT setup](/sdks/mcp-chatgpt) and [Claude
setup](/sdks/mcp-claude) for current caveats.
## Example Workflows
### Competitive Launch Watch
```text theme={null}
Use COLA Cloud to search for new bourbon approvals from Kentucky in 2025.
Fetch the five most relevant records, group them by permittee, and include
COLA Cloud links.
```
### Importer Discovery
```text theme={null}
Use COLA Cloud to find active New York permittees matching import.
Fetch details for the most relevant permittees and summarize their recent COLA
activity.
```
### Durable Approval Alert
```text theme={null}
Use COLA Cloud to draft the search filters for a weekly alert covering new
California cabernet approvals.
```
After the assistant helps narrow the query, create the saved search in
**Dashboard > Saved Searches**. COLA Cloud stores the saved search, shows it in
the dashboard, and sends future emails using each scheduled run's approval-date
window. Do not rely on ChatGPT Tasks or Claude reminders for this recurring
automation.
## CTA
1. Create an account at [app.colacloud.us](https://app.colacloud.us).
2. Connect the [COLA Cloud ChatGPT app](/sdks/mcp-chatgpt), or create an API key in **Dashboard > API Keys** for direct MCP clients.
3. Connect direct MCP clients to `https://mcp.colacloud.us/mcp`.
4. Upgrade in **Dashboard > API Keys > Upgrade** when you need higher quotas or active saved searches.
# What is COLA Cloud?
Source: https://docs.colacloud.us/introduction
Access the US TTB COLA Registry — 2.9M+ alcohol product label approvals with images, barcodes, and AI enrichments.
## What is a COLA?
A **Certificate of Label Approval (COLA)** is required for every alcoholic beverage sold in the United States. The Alcohol and Tobacco Tax and Trade Bureau (TTB) maintains a public registry of all approved labels, creating one of the most comprehensive databases of beverage products in the world.
## What is COLA Cloud?
COLA Cloud scrapes, processes, and enriches the TTB COLA Registry, making it accessible through:
* **Web Application** — Browse and search labels at [app.colacloud.us](https://app.colacloud.us)
* **REST API** — Programmatic access to COLA data
* **SDKs, CLI, and MCP** — Use COLA Cloud from code, terminals, and AI assistants
* **Bulk Data License** — Full dataset delivered to your warehouse
## Data Coverage
Label approval applications dating back to 2005
Original and web-optimized label images
Extracted UPC/EAN codes for product matching
\~2,500 new approvals added per week
The web application and API serve records from 2005 onward. Warehouse-ready Snowflake and file delivery are available via the [bulk data product](/data-products/snowflake).
## AI-Powered Enrichment
* **Barcode Extraction** — UPC/EAN barcodes with precise coordinates
* **Computer Vision OCR** — ABV, volume, and text extracted from label images
* **LLM Categorization** — Automatic product categorization (e.g., "Spirits > Whiskey > Bourbon")
## Data Model
| Entity | Description |
| --------------------- | ------------------------------------------------------------ |
| `colas` | COLA applications with approval details and product metadata |
| `cola_images` | Label images (front, back, neck, etc.) |
| `cola_image_barcodes` | Extracted barcodes with type and coordinates |
| `permittees` | TTB permit holders (businesses) |
## Use Cases
* **Product Catalog Enrichment** — Official label images and attributes
* **Supplier Lead Generation** — Identify new market entrants
* **Competitive Intelligence** — Track competitor product launches
* **Market Research** — Analyze category and origin trends
# Quickstart
Source: https://docs.colacloud.us/quickstart
Create an account, generate an API key, and make your first request in under 5 minutes.
## 1. Create an Account
Visit [app.colacloud.us/auth/register](https://app.colacloud.us/auth/register) and sign up with email or Google.
Check your inbox and verify your email address.
Go to **Dashboard > API Keys** and click **Create API Key**. Copy your key — it won't be shown again.
## 2. Make Your First Request
Search for bourbon labels:
```bash cURL theme={null}
curl -H "X-API-Key: your_api_key" \
"https://app.colacloud.us/api/v1/colas?q=bourbon&per_page=5"
```
```python Python SDK theme={null}
from colacloud import ColaCloud
client = ColaCloud(api_key="your_api_key")
results = client.colas.list(q="bourbon", per_page=5)
for cola in results.data:
print(f"{cola.brand_name} - {cola.product_name}")
```
```typescript JavaScript SDK theme={null}
import { ColaCloud } from 'colacloud';
const client = new ColaCloud({ apiKey: 'your_api_key' });
const results = await client.colas.list({ q: 'bourbon', perPage: 5 });
for (const cola of results.data) {
console.log(`${cola.brandName} - ${cola.productName}`);
}
```
```bash CLI theme={null}
cola search "bourbon" --limit 5
```
## 3. Look Up a Product by Barcode
Find COLAs associated with a UPC/EAN barcode:
```bash cURL theme={null}
curl -H "X-API-Key: your_api_key" \
"https://app.colacloud.us/api/v1/barcode/012345678901"
```
```python Python SDK theme={null}
matches = client.barcode.lookup("012345678901")
```
```typescript JavaScript SDK theme={null}
const matches = await client.barcodes.lookup('012345678901');
```
```bash CLI theme={null}
cola barcode 012345678901
```
Use `/api/v1/colas?barcode_value=012345678901` when you want to filter COLA Search results by the record's main barcode and combine that with other `/colas` filters. Use `/api/v1/barcode/{barcode_value}` when you want the dedicated enrichment lookup across extracted barcode rows.
## 4. Check Your Usage
```bash theme={null}
curl -H "X-API-Key: your_api_key" \
"https://app.colacloud.us/api/v1/usage"
```
## Default Date Range
When no date filters are provided, the `/colas` endpoint returns results from the last 365 days. The response includes a `defaults_applied` field indicating when this default is active:
```json theme={null}
{
"defaults_applied": {
"date_range": true,
"date_from": "2025-03-01"
}
}
```
Pass `approval_date_from` or `approval_date_to` to override this default and query the full historical dataset.
## Search Filters
`q` is a general text search across brand, product, class, permit number, applicant/company name, and barcode-shaped queries. Use it when you know a word but not which field it belongs to.
Common `/colas` filters include:
| Filter | Use |
| ---------------------------------------------- | -------------------------------------------------------------------------------------------------------- |
| `product_type` | TTB product type: `wine`, `malt beverage`, or `distilled spirits`. Comma-separated values are supported. |
| `category` / `derived_subcategory` | COLA Cloud's derived category tree, such as `Beer` and `Beer > Ale`. |
| `abv_min` / `abv_max` | Alcohol by volume range. |
| `volume_unit` with `volume_min` / `volume_max` | Package size range. Volume ranges require a unit, such as `fluid ounces` or `milliliters`. |
| `container_type` | Derived container type, such as `bottle`, `can`, `keg`, or `box`. |
| `barcode_value` / `permit_number` | Exact filters for a main barcode or TTB permit number. |
```bash theme={null}
curl -H "X-API-Key: your_api_key" \
"https://app.colacloud.us/api/v1/colas?category=Beer&derived_subcategory=Beer%20%3E%20Ale&container_type=can&volume_unit=fluid%20ounces&volume_min=12&volume_max=16"
```
## Next Steps
API key usage, rate limits, and pagination
Interactive API playground
Python, JavaScript, CLI, and MCP server
Full schema with 100+ columns
# TTB's Mission — What We Do
Source: https://docs.colacloud.us/regulatory/about/mission-what-we-do
TTB's Mission — What We Do
# TTB's Mission — What We Do
At TTB, we protect the public by enforcing the provisions of the Federal Alcohol Administration Act (FAA Act) to ensure that only qualified persons engage in the alcohol beverage industry. We are responsible for enforcing the laws regulating alcohol production, importation, and wholesale businesses; tobacco manufacturing and importing businesses; and alcohol labeling and advertising.
Visit our About TTB page for more information about our mission and functions.
## TTB Is Not Responsible For Enforcing the Laws Regulating:
* Retail sales of alcohol products
* Retail sales of tobacco products
* Tobacco and alcohol abuse programs
Check with your state government regarding these laws and programs.
## TTB Is Responsible For Enforcing the Laws Regulating:
### Alcohol Production, Importation, and Distribution
The FAA Act provides for the regulation of those engaged in the alcohol beverage industry, and for the protection of consumers. To ensure the integrity of the industry, the FAA Act includes provisions to:
* Require a permit for those who engage in the business as a producer, importer, or wholesaler of alcohol beverages;
* Issue, suspend, and revoke permits;
* Ensure the integrity of the industry by preventing persons who are not likely to operate in accordance with the law from entering the trade; and
* Protect consumers and the revenue.
The Webb-Kenyon Act prohibits the shipment of alcohol beverages into a State in violation of the receiving State's laws. This statute provides additional authority to enhance enforcement of FAA Act requirements. Visit our Direct Shipping page for more information.
### Tobacco Manufacturing, Importation, and Operations
TTB enforces the provisions under Chapter 52 of the Internal Revenue Code (Title 26 of the United States Code). In general, TTB deals mainly with the Federal excise taxes on tobacco products and cigarette papers and tubes and other requirements, such as permits required for engaging in business related to the manufacturing, importation, and other operations involving these products.
A person does not need a TTB permit to sell tobacco products; however, there are other requirements that may impact the sale of tobacco products. Please refer to ATF Industry Circulars 99-2 and 2000-4 for additional information on this topic. **NOTE:** These references, while still applicable, are from prior years and some contact information may not be current. To contact TTB on these topics please visit our Contact Us page.
TTB does not administer or enforce any laws regulating the age of individuals who can purchase, use, possess, sell, or otherwise deal in tobacco products. Each State government usually enforces any such laws or regulations. You may contact your State government on tobacco laws and the agency that enforces them.
### Alcohol Labeling and Advertising
The FAA Act provisions:
* Ensure that labeling and advertising of alcohol beverages provide adequate information to the consumer concerning the identity and quality of the product;
* Require that alcohol beverage bottlers and importers must have an approved certificate of label approval (COLA) or an exemption certificate before the product may be sold in the United States; and
* Prevent misleading labeling or advertising that may result in potential consumer deception regarding the product.
The FAA Act includes provisions to preclude unfair trade practices. These provisions:
* Regulate the marketing and promotional practices concerning the sale of alcohol beverages; and
* Regulate practices such as exclusive outlets, tied house arrangements, commercial bribery, and consignment sales.
The Alcohol Beverage Labeling Act mandates that a government health warning statement appear on all alcohol beverages for sale or distribution in the United States.
### Tobacco Products Advertising
The only law which TTB enforces that relates to the advertising of tobacco products and cigarette papers and tubes is a prohibition against lottery features and indecent, immoral pictures, print or representation attached to such packages. Refer to section 5723(c) of Title 26 of the United States.
For general advertising information related to tobacco products, the Federal Trade Commission may be helpful. The Federal Trade Commission enforces a variety of Federal antitrust and consumer protection laws.
***
## IMPORTANT
TTB does not regulate the sales of alcohol or tobacco products at the retail level, including sales to minors. State and local authorities regulate those sales. For information about laws and regulations in your state, please contact your alcohol control board and/or local authorities.
## Contact Us
For general inquiries contact us online or at 877-882-3277 / 877-TTB-FAQS. For other inquiries see our Contact Us page for specific topics.
***
*Last reviewed: September 4, 2012*
*Last updated: April 27, 2018*
*Maintained by: Office of Communications*
# Part 1 — BASIC PERMIT REQUIREMENTS UNDER THE FEDERAL ALCOHOL ADMINISTRATION ACT, NONINDUSTRIAL USE OF DISTILLED SPIRITS AND WINE, BULK SALES AND BOTTLING OF DISTILLED SPIRITS
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-1
Full text of 27 CFR Part 1 — BASIC PERMIT REQUIREMENTS UNDER THE FEDERAL ALCOHOL ADMINISTRATION ACT, NONINDUSTRIAL USE OF DISTILLED SPIRITS AND WINE, BULK SALES AND BOTTLING OF DISTILLED SPIRITS. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 1—BASIC PERMIT REQUIREMENTS UNDER THE FEDERAL ALCOHOL ADMINISTRATION ACT, NONINDUSTRIAL USE OF DISTILLED SPIRITS AND WINE, BULK SALES AND BOTTLING OF DISTILLED SPIRITS
#### Authority:
[27 U.S.C. 203](https://www.govinfo.gov/link/uscode/27/203), [204](https://www.govinfo.gov/link/uscode/27/204), [206](https://www.govinfo.gov/link/uscode/27/206), [211](https://www.govinfo.gov/link/uscode/27/211) unless otherwise noted.
#### Source:
T.D. ATF-373, [61 FR 26098](https://www.federalregister.gov/citation/61-FR-26098), May 24, 1996, unless otherwise noted.
#### Editorial Note:
Nomenclature changes to part 1 appear by T.D. ATF-463, [66 FR 42733](https://www.federalregister.gov/citation/66-FR-42733), Aug. 15, 2001.
## Subpart A—Scope
#### § 1.1 General.
(a) The regulations in this part relate to requirements governing the issuance, amendment, denial, revocation, suspension, automatic termination, and annulment of basic permits and the duration of permits, except that the provisions of part 71, Rules of Practice in Permit Proceedings, of this chapter are hereby made applicable to administrative proceedings with respect to the application for, and to the suspension, revocation, or annulment of, basic permits under the Federal Alcohol Administration Act.
(b) The regulations in this part also specify what uses of distilled spirits and wine are “nonindustrial,” as that term is used in section 117 of the Federal Alcohol Administration Act ([27 U.S.C. 211](https://www.govinfo.gov/link/uscode/27/211)). Finally, this part, in accordance with section 106 of the Federal Alcohol Administration Act ([27 U.S.C. 206](https://www.govinfo.gov/link/uscode/27/206)), contains the substantive requirements relative to bulk sales and bottling of distilled spirits under the Federal Alcohol Administration Act, including the terms of warehouse receipts for distilled spirits in bulk. No procedural requirements are prescribed.
#### § 1.2 Territorial extent.
The provisions of this part are applicable to the several States of the United States, the District of Columbia and Puerto Rico.
#### § 1.3 Forms prescribed.
(a) The appropriate TTB officer is authorized to prescribe all forms required by this part. All of the information called for in each form shall be furnished as indicated by the headings on the form and the instructions on or pertaining to the form. In addition, information called for in each form shall be furnished as required by this part. The form will be filed in accordance with the instructions for the form.
(b) Forms prescribed by this part are available for printing through the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. ATF-373, [61 FR 26098](https://www.federalregister.gov/citation/61-FR-26098), May 24, 1996, as amended by T.D. ATF-416, [64 FR 49985](https://www.federalregister.gov/citation/64-FR-49985), Sept. 15, 1999; T.D. TTB-44, [71 FR 16920](https://www.federalregister.gov/citation/71-FR-16920), Apr. 4, 2006; T.D. TTB-196, [89 FR 87935](https://www.federalregister.gov/citation/89-FR-87935), Nov. 6, 2024]
#### § 1.4 Delegations of the Administrator.
Most of the regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.1, Delegation of the Administrator's Authorities in [27 CFR Part 1](/current/title-27/part-1), Basic Permit Requirements Under the Federal Alcohol Administration Act, Nonindustrial Use of Distilled Spirits and Wine, Bulk Sales and Bottling of Distilled Spirits. You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-44, [71 FR 16920](https://www.federalregister.gov/citation/71-FR-16920), Apr. 4, 2006, as amended by T.D. TTB-196, [89 FR 87935](https://www.federalregister.gov/citation/89-FR-87935), Nov. 6, 2024]
## Subpart B—Definitions
#### § 1.10 Meaning of terms.
As used in this part, unless the context otherwise requires, terms shall have the meaning ascribed in this part.
*Act.* The Federal Alcohol Administration Act.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Alcohol.* Ethyl alcohol distilled at or above 190° proof.
*Applicant.* Any person who has filed an application for a basic permit under the Federal Alcohol Administration Act with the appropriate TTB officer.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.1, Delegation of the Administrator's Authorities in [27 CFR Part 1](/current/title-27/part-1), Basic Permit Requirements Under the Federal Alcohol Administration Act, Nonindustrial Use of Distilled Spirits and Wine, Bulk Sales and Bottling of Distilled Spirits.
*Basic permit.* A document issued under the Act authorizing a person to engage in activities at a particular location.
*Brandy.* Brandy or wine spirits for addition to wines as permitted by internal revenue law.
*Distilled spirits.* Section 117(a) of the Federal Alcohol Administration Act ([27 U.S.C. 211(a)](https://www.govinfo.gov/link/uscode/27/211)) defines “distilled spirits” as ethyl alcohol, hydrated oxide of ethyl, spirits of wine, whiskey, rum, brandy, gin, and other distilled spirits, including all dilutions and mixtures thereof for nonindustrial use.
*In bulk.* Distilled spirits in containers having a capacity in excess of one wine gallon.
*Malt beverage.* A beverage made by the alcoholic fermentation of an infusion or decoction, or combination of both, in potable brewing water, of malted barley with hops, or their parts, or their products, and with or without other malted cereals, and with or without the addition of unmalted or prepared cereals, other carbohydrates or products prepared therefrom, and with or without the addition of carbon dioxide, and with or without other wholesome products suitable for human food consumption. Standards applying to the use of processing methods and flavors in malt beverage production appear in [§ 7.11 of this chapter](/current/title-27/section-7.11).
*Other term.* Any other term defined in the Federal Alcohol Administration Act and used in this part shall have the same meaning assigned to it by the Act.
*Permittee.* Any person holding a basic permit issued under the Federal Alcohol Administration Act.
*Person.* Any individual, partnership, joint-stock company, business trust, association, corporation, or other form of business enterprise, including a receiver, trustee, or liquidating agent.
*Resale at wholesale.* A sale to any trade buyer.
*Trade buyer.* Any person who is a wholesaler or retailer of distilled spirits, wine, or malt beverages.
*Wine.* Section 117(a) of the Federal Alcohol Administration Act ([27 U.S.C. 211(a)](https://www.govinfo.gov/link/uscode/27/211)) defines “wine” as any of the following products for nonindustrial use that contain not less than 7 percent and not more than 24 percent alcohol by volume:
(1) Wine as defined in section 610 and section 617 of the Revenue Act of 1918 ([26 U.S.C. 5381-5392](https://www.govinfo.gov/link/uscode/26/5381)); and
(2) Other alcoholic beverages not so defined, but made in the manner of wine, including sparkling and carbonated wine, wine made from condensed grape must, wine made from other agricultural products than the juice of sound, ripe grapes, imitation wine, compounds sold as wine, vermouth, cider, perry, and sake.
*Wine gallon.* The liquid measure equivalent to the volume of 231 cubic inches.
\[T.D. ATF-373, [61 FR 26098](https://www.federalregister.gov/citation/61-FR-26098), May 24, 1996. Redesignated and amended by T.D. ATF-416, [64 FR 49985](https://www.federalregister.gov/citation/64-FR-49985), Sept. 15, 1999; T.D. TTB-44, [71 FR 16920](https://www.federalregister.gov/citation/71-FR-16920), Apr. 4, 2006; T.D. TTB-91, [76 FR 5476](https://www.federalregister.gov/citation/76-FR-5476), Feb. 1, 2011; T.D. TTB-145, [81 FR 94196](https://www.federalregister.gov/citation/81-FR-94196), Dec. 22, 2016]
## Subpart C—Basic Permits
#### Editorial Note:
Nomenclature changes to subpart C of part 1 appear by T.D. ATF-416, [64 FR 49985](https://www.federalregister.gov/citation/64-FR-49985), Sept. 15, 1999.
### When Required
#### § 1.20 Importers.
No person, except pursuant to a basic permit issued under the Act, shall:
(a) Engage in the business of importing into the United States distilled spirits, wine, or malt beverages; or
(b) While so engaged, sell, offer or deliver for sale, contract to sell, or ship, in interstate or foreign commerce, directly or indirectly or through an affiliate, distilled spirits, wine, or malt beverages so imported.
#### § 1.21 Domestic producers, rectifiers, blenders, and warehousemen.
No person, except pursuant to a basic permit issued under the Act, shall:
(a) Engage in the business of distilling distilled spirits, producing wine, rectifying or blending distilled spirits or wine, or bottling, or warehousing and bottling, distilled spirits; or
(b) While so engaged, sell, offer or deliver for sale, contract to sell, or ship, in interstate or foreign commerce, directly or indirectly or through an affiliate, distilled spirits or wine so distilled, produced, rectified, blended, or bottled, or warehoused and bottled.
#### § 1.22 Wholesalers.
No person, except pursuant to a basic permit issued under the Act, shall:
(a) Engage in the business of purchasing for resale at wholesale, distilled spirits, wine, or malt beverages; or,
(b) While so engaged, receive, sell, offer or deliver for sale, contract to sell, or ship in interstate or foreign commerce, directly or indirectly or through an affiliate, distilled spirits, wine, or malt beverages so purchased.
#### § 1.23 State agencies.
This subpart shall not apply to any agency of a State or political subdivision thereof or to any officer or employee of any such agency, and no such agency or officer or employee thereof shall be required to obtain a basic permit under this subpart.
### Persons Entitled to Basic Permits
#### § 1.24 Qualifications of applicants.
The application of any person shall be granted and the permit issued by the appropriate TTB officer if the applicant proves to the satisfaction of the appropriate TTB officer that:
(a) Such person (or in case of a corporation, any of its officers, directors, or principal stockholders) has not, within 5 years prior to the date of application, been convicted of a felony under Federal or State law, and has not, within 3 years prior to date of application, been convicted of a misdemeanor under any Federal law relating to liquor, including the taxation thereof; and
(b) Such person, by reason of the person's business experience, financial standing or trade connections, is likely to commence operations as a distiller, warehouseman and bottler, rectifier, wine producer, wine blender, importer, or wholesaler, as the case may be, within a reasonable period and to maintain such operations in conformity with Federal law; and
(c) The operations proposed to be conducted by such person are not in violation of the law of the State in which they are to be conducted.
### Applications for Permits
#### § 1.25 General.
Applications for basic permits to engage in any of the operations set forth in [§§ 1.20 to 1.22](/current/title-27/section-1.20) must be made on TTB Form 5100.24, or 5100.18, verified as required by [§ 1.56](/current/title-27/section-1.56), and will be accompanied by such affidavits, documents, and other supporting data, as the appropriate TTB officer may require. The application will include all data, written statements, affidavits, documents, or other evidence submitted in support of the application, or upon a hearing.
\[T.D. ATF-416, [64 FR 49985](https://www.federalregister.gov/citation/64-FR-49985), Sept. 15, 1999; T.D. ATF-416a, [64 FR 54776](https://www.federalregister.gov/citation/64-FR-54776), Oct. 8, 1999]
#### § 1.26 Incomplete or incorrectly executed applications.
Incomplete or incorrectly executed applications will not be acted upon, but the applicant shall be entitled to file a new application without prejudice, or to complete the application already filed.
#### § 1.27 Change in ownership, management, or control of the applicant.
In the event of any change in the ownership, management, or control of the applicant (in case of a corporation, any change in the officers, directors, or persons holding more than 10 percent of the corporate stock), after the date of filing of any application for a basic permit and prior to final action on such application, the applicant shall notify the appropriate TTB officer immediately of such change.
#### § 1.29 Individual plant or premises.
An application for a basic permit must be filed, and permit issued, to cover each individual plant or premises where any of the businesses specified in section 103 of the Act is engaged in.
\[T.D. ATF-416, [64 FR 49985](https://www.federalregister.gov/citation/64-FR-49985), Sept. 15, 1999]
#### § 1.30 Power of attorney; Form 5000.8 (1534).
If the application and other documents in support of such application are signed by an attorney in fact of an individual, partnership, association, or corporation, or by one of the members of a copartnership or association, or, in the case of a corporation by an officer or other person not authorized by the corporation's bylaws or by its board of directors to sign such applications and supporting documents, the applications must be supported by a duly authenticated copy of the power of attorney conferring authority upon the person signing the documents to execute the same. Such powers of attorney will be executed on Form 5000.8 (1534).
(Approved by the Office of Management and Budget under control number 1512-0079)
\[T.D. ATF-373, [61 FR 26098](https://www.federalregister.gov/citation/61-FR-26098), May 24, 1996, as amended by T.D. ATF-416, [64 FR 49985](https://www.federalregister.gov/citation/64-FR-49985), Sept. 15, 1999]
#### § 1.31 Denial of permit applications.
If, upon examination of any application for a basic permit, the appropriate TTB officer has reason to believe that the applicant is not entitled to such a permit, the appropriate TTB officer shall institute proceedings for the denial of the application in accordance with the procedure set forth in [part 71 of this chapter](/current/title-27/part-71).
### Authorization
#### § 1.35 Authority to issue, amend, deny, suspend, revoke, or annul basic permits.
The authority and power of issuing, amending, or denying basic permits, or amendments thereof, is conferred upon the appropriate TTB officer except as to agency initiated curtailment. The Administrator, upon consideration of appeals on petitions for review in [part 71 of this chapter](/current/title-27/part-71), may order the appropriate TTB officer to issue, deny, suspend, revoke, or annul basic permits.
\[T.D. ATF-416, [64 FR 49985](https://www.federalregister.gov/citation/64-FR-49985), Sept. 15, 1999]
### Amendment and Duration of Basic Permits
#### § 1.40 Change of name.
In the event of any change in the name (trade or corporate name) of a permittee, or, in the event a permittee desires to engage in operations under an additional trade name, such permittee must file application Form 5100.18 for an amended basic permit, which application must be approved, and amended permit issued, before operations may be commenced under the new name.
(Approved by the Office of Management and Budget under control number 1512-0090)
\[T.D. ATF-373, [61 FR 26098](https://www.federalregister.gov/citation/61-FR-26098), May 24, 1996, as amended by T.D. ATF-416, [64 FR 49985](https://www.federalregister.gov/citation/64-FR-49985), Sept. 15, 1999]
#### § 1.41 Change of address.
In the event of a change in address the permittee must file application Form 5100.18 for an amended basic permit.
\[T.D. ATF-373, [61 FR 26098](https://www.federalregister.gov/citation/61-FR-26098), May 24, 1996, as amended by T.D. ATF-416, [64 FR 49985](https://www.federalregister.gov/citation/64-FR-49985), Sept. 15, 1999]
#### § 1.42 Change in ownership, management, or control of business.
In the event of any change in the ownership, management, or control of any business operated pursuant to a basic permit (if the permittee is a corporation, if any change occurs in the officers, directors, or persons owning or controlling more than 10 percent of the voting stock of said corporation) the permittee shall immediately notify the appropriate TTB officer of such change, giving the names and addresses of all new persons participating in the ownership, management, or control of such business, or in the case of a corporation, the names and addresses of such new officers, directors, or persons owning or controlling more than 10 percent of the voting stock. Notice to the appropriate TTB officer of any such change shall be accompanied or supplemented by such data in reference to the personal or business history of such persons as the appropriate TTB officer may require.
#### § 1.43 Duration of permits.
A basic permit shall continue in effect until suspended, revoked, annulled, voluntarily surrendered, or automatically terminated, as provided in the Act and in this part.
#### § 1.44 Automatic termination of permits.
No basic permit shall be leased, sold, or otherwise voluntarily transferred, and, in the event of such lease, sale, or other voluntary transfer, such basic permit shall automatically terminate thereupon. If any basic permit is transferred by operation of law or if actual or legal control of the permittee is acquired, directly or indirectly whether by stock ownership or in any other manner, by any person, then such permit shall be automatically terminated at the expiration of 30 days thereafter: Provided, That if within such 30-day period application for a new basic permit is made by the transferee or permittee, respectively, then the outstanding basic permit shall continue in effect until such time as the application is finally acted upon.
### Revocation, Suspension, or Annulment of Basic Permits
#### § 1.50 Revocation or suspension.
Whenever the appropriate TTB officer has reason to believe that any permittee has willfully violated any of the conditions of the permittee's basic permit or has not engaged in the operations authorized by the permit for a period of more than two years, the appropriate TTB officer shall institute proceedings for the revocation or suspension of such permit, in accordance with the procedure set forth in [part 71 of this chapter](/current/title-27/part-71), which part is made applicable to such proceedings.
#### § 1.51 Annulment.
Whenever the appropriate TTB officer has reason to believe that any basic permit was procured through fraud, or misrepresentation or concealment of material fact, the appropriate TTB officer shall institute proceedings for the annulment of such permit in accordance with the procedure set forth in [part 71 of this chapter](/current/title-27/part-71), which part is made applicable to such proceedings.
#### § 1.52 Disposition of stocks of alcoholic beverages upon revocation, annulment, or automatic termination of basic permit.
In the event of the revocation or annulment of a basic permit, pursuant to [part 71 of this chapter](/current/title-27/part-71), or in the event such permit is automatically terminated by operation of law ([27 U.S.C. 204(g)](https://www.govinfo.gov/link/uscode/27/204) and [§ 1.44 of this part](/current/title-27/part-1/section-1.44)), the appropriate TTB officer may authorize the orderly disposition of stocks of distilled spirits, wines, or malt beverages then held by the permittee or former permittee upon such conditions as may be considered proper.
### Miscellaneous
#### § 1.55 Recalling permits for correction.
Whenever it shall be discovered that any basic permit has been issued authorizing acts, or combinations of acts, which may not properly, under the law and regulations, as of now or hereafter in force, be authorized, or that any material mistake has occurred in the issuance thereof, the holder of such permit shall forthwith surrender the same for correction or amendment upon demand of the appropriate TTB officer.
#### § 1.56 Oaths and affirmations.
A document must be verified by an oath or affirmation taken before a person authorized by the laws of the United States or by State or local law to administer oaths or affirmations in the jurisdiction where the document is executed when required by:
(a) Regulation; or
(b) An appropriate TTB officer.
\[T.D. ATF-416, [64 FR 49985](https://www.federalregister.gov/citation/64-FR-49985), Sept. 15, 1999]
#### § 1.57 Procedure.
The procedures prescribed by the rules of practice in permit proceedings ([part 71 of this chapter](/current/title-27/part-71)) are applicable to administrative proceedings for the issuance, amendment, denial, revocation, suspension, or annulment of basic permits, the issuance of subpoenas and the taking of depositions under the Act.
#### § 1.58 Filing of permits.
Every person receiving a basic permit under the provisions of this part must maintain the permit at the place of business covered by the permit and make it available upon the request of the appropriate TTB officer. Every person required to obtain a basic permit as an importer under [§ 1.20](/current/title-27/section-1.20) must, when importing distilled spirits, wine, or malt beverages under that permit and filing TTB data electronically, file the number of the permit with U.S. Customs and Border Protection (CBP) along with the filing of the customs entry. Regardless of the method of filing, every importer must make the permit available upon request by the appropriate TTB officer or a customs officer.
\[T.D. TTB-145, [81 FR 94196](https://www.federalregister.gov/citation/81-FR-94196), Dec. 22, 2016]
#### § 1.59 Public information as to applications acted upon.
The appropriate TTB officer shall cause to be maintained currently in the appropriate TTB officer's office for public inspection, until the expiration of one year following final action on the application, the following information with respect to each application for basic permit filed:
(a) The name, including trade name or names, if any, and the address of the applicant; the kind of permit applied for and the location of the business; whether the applicant is an individual, a partnership or a corporation; if a partnership, the name and address of each partner; if a corporation, the name and address of each of the principal officers and of each stockholder owning 10 percent or more of the corporate stock.
(b) The time and place set for any hearing on the application.
(c) The final action taken on the application. In the event a hearing is held upon an application for a basic permit, the appropriate TTB officer shall make available for inspection at the appropriate TTB officer's office, upon request therefor: The transcript of the hearing, a copy of the administrative law judge's recommended decision, a copy of the appropriate TTB officer's decision and, in the event of an appeal to the Administrator, the decision on appeal with the reasons given in support thereof.
\[T.D. ATF-373, [61 FR 26098](https://www.federalregister.gov/citation/61-FR-26098), May 24, 1996, as amended by T.D. ATF-416, [64 FR 49985](https://www.federalregister.gov/citation/64-FR-49985), Sept. 15, 1999]
## Subpart D—Nonindustrial Use of Distilled Spirits and Wine
### Uses Regarded as Industrial
#### § 1.60 Use of distilled spirits.
The following uses of distilled spirits are regarded as “industrial” and will be excluded from any application of the term “nonindustrial use.” The use of distilled spirits:
(a) Free of tax by, and for the use of, the United States or any governmental agency thereof, any State, any political subdivision of a State, or the District of Columbia, for nonbeverage purposes; or
(b) Free of tax for nonbeverage purposes and not for resale or use in the manufacture of any product for sale:
(1) For the use of any educational organization described in [26 U.S.C. 170(b)(1)(A)(ii)](https://www.govinfo.gov/link/uscode/26/170) which is exempt from income tax under [26 U.S.C. 501(a)](https://www.govinfo.gov/link/uscode/26/501), or for the use of any scientific university or college of learning;
(2) For any laboratory for use exclusively in scientific research;
(3) For use at any hospital, blood bank, or sanitarium (including use in making analysis or test at such hospital, blood bank, or sanitarium), or at any pathological laboratory exclusively engaged in making analyses, or tests, for hospitals or sanitariums; or
(4) For the use of any clinic operated for charity and not for profit (including use in compounding of bona fide medicines for treatment outside of such clinics of patients thereof); or
(c) Free of tax, after denaturation of such spirits in the manner prescribed by law for:
(1) Use in the manufacture of ether, chloroform, or other definite chemical substance where such distilled spirits are changed into some other chemical substance and do not appear in the finished product; or
(2) Any other use in the arts and industries (except for uses prohibited by [26 U.S.C. 5273](https://www.govinfo.gov/link/uscode/26/5273) (b) or (d)) and for fuel, light, and power.
#### § 1.61 Use of wine.
The following uses of wine are regarded as “industrial” and will be excluded from any application of the term “nonindustrial”. The use of wine:
(a) Without payment of tax for use in the production of vinegar; or
(b) Free of tax for experimental or research purposes by any scientific university, college of learning, or institution of scientific research; or
(c) Free of tax for use by the United States or any agency thereof, and for use for analysis, testing, research, or experimentation by the governments of the several States and the District of Columbia or of any political subdivision thereof or by any agency of such governments; or
(d) Which has been rendered unfit for beverage use.
#### § 1.62 Use of distilled spirits or wine for experimental purposes and in manufacture of nonbeverage products.
The use of distilled spirits or wine for experimental purposes and in the manufacture of (a) medicinal, pharmaceutical, or antiseptic products, including prescriptions compounded by retail druggists; (b) toilet preparations; (c) flavoring extracts, syrups, or food products; or (d) scientific, chemical, mechanical, or industrial products, provided such products are unfit for beverage use, is regarded as “industrial,” and will be excluded from any application of the term “nonindustrial use.”
### Uses Classed as Nonindustrial
#### § 1.70 General.
All uses of distilled spirits and wines, except as provided in [§§ 1.60](/current/title-27/part-1/section-1.60), [1.61](/current/title-27/part-1/section-1.61), and [1.62 of this part](/current/title-27/part-1/section-1.62), are regarded as “nonindustrial.” Such “nonindustrial” use shall include, but not be limited to, distilled spirits or wine used for beverage purposes, or in the manufacture, rectification, or blending of alcoholic beverages; or in the preparation of food or drink by a hotel, restaurant, tavern, or similar establishment; or for sacramental purposes; or as a medicine.
#### § 1.71 Distilled spirits in containers of a capacity of one gallon or less.
Distilled spirits in containers of a capacity of one wine gallon or less, except anhydrous alcohol and alcohol which may be withdrawn free of tax under the internal revenue laws, will be deemed to be for nonindustrial use.
## Subpart E—Bulk Sales and Bottling of Distilled Spirits
### Bulk Sales and Bottling
#### § 1.80 Sales of distilled spirits in bulk.
It is unlawful for any person to sell, offer to sell, contract to sell, or otherwise dispose of distilled spirits in bulk, for nonindustrial use, except for export or to the classes of persons enumerated in [§§ 1.82](/current/title-27/section-1.82), [1.83](/current/title-27/section-1.83), and [1.84](/current/title-27/section-1.84).
#### § 1.81 Importation of distilled spirits in bulk.
It is unlawful for any person to import distilled spirits in bulk, for nonindustrial use, except for sale to or for use by the classes of persons enumerated in [§§ 1.82](/current/title-27/section-1.82), [1.83](/current/title-27/section-1.83) and [1.84](/current/title-27/section-1.84).
#### § 1.82 Acquiring or receiving distilled spirits in bulk for redistillation, processing, rectification, warehousing, or warehousing and bottling.
(a) *Proprietors of distilled spirits plants.* Persons holding basic permits (issued under [subpart B of this part](/current/title-27/part-1/subpart-B)) authorizing the distilling, processing, rectifying, or warehousing and bottling of distilled spirits, or operating permits (issued under [§ 19.91](/current/title-27/section-19.91) and succeeding sections of this chapter) may acquire or receive in bulk and redistill, warehouse, or process distilled spirits, so far as permitted by law.
(b) *Proprietors of class 8 customs bonded warehouses.* If the permittee operates a class 8 customs bonded warehouse, the permittee may acquire or receive in bulk, and warehouse and bottle, imported distilled spirits, so far as permitted by the customs laws.
([26 U.S.C. 7805](https://www.govinfo.gov/link/uscode/26/7805) (68A Stat. 917, as amended); [27 U.S.C. 205](https://www.govinfo.gov/link/uscode/27/205) (49 Stat. 981, as amended))
\[T.D. ATF-373, [61 FR 26098](https://www.federalregister.gov/citation/61-FR-26098), May 24, 1996, as amended by T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011]
#### § 1.83 Acquiring or receiving distilled spirits in bulk for addition to wine.
Persons holding permits as producers and blenders of wine, may, pursuant to such permit, acquire or receive in bulk alcohol or brandy for addition to wines.
#### § 1.84 Acquisition of distilled spirits in bulk by Government agencies.
Any agency of the United States, or of any State or political subdivision thereof, may acquire or receive in bulk, and warehouse and bottle, imported and domestic distilled spirits in conformity with the internal revenue laws.
### Warehouse Receipts
#### § 1.90 Distilled spirits in bulk.
By the terms of the Act ([27 U.S.C. 206](https://www.govinfo.gov/link/uscode/27/206)), all warehouse receipts for distilled spirits in bulk must require that the warehouseman shall package such distilled spirits, before delivery, in bottles labeled and marked in accordance with law, or deliver such distilled spirits in bulk only to persons to whom it is lawful to sell or otherwise dispose of distilled spirits in bulk.
#### § 1.91 Bottled distilled spirits.
The provisions of the Act, which forbid any person to sell, offer to sell, contract to sell, or otherwise dispose of warehouse receipts for distilled spirits in bulk, do not apply to warehouse receipts for bottled distilled spirits.
Cross Reference:
For labeling of distilled spirits, see [part 5 of this chapter](/current/title-27/part-5).
### Sales of Distilled Spirits for Industrial Use
#### § 1.95 General.
Distillers, rectifiers, and other permittees engaged in the sale or other disposition of distilled spirits for nonindustrial use shall not sell or otherwise dispose of distilled spirits in bulk (other than alcohol) for industrial use, unless such distilled spirits are shipped or delivered directly to the industrial user thereof.
# Part 10 — COMMERCIAL BRIBERY
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-10
Full text of 27 CFR Part 10 — COMMERCIAL BRIBERY. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 10—COMMERCIAL BRIBERY
#### Authority:
[15 U.S.C. 49-50](https://www.govinfo.gov/link/uscode/15/49); [27 U.S.C. 202](https://www.govinfo.gov/link/uscode/27/202) and [205](https://www.govinfo.gov/link/uscode/27/205); [44 U.S.C. 3504(h)](https://www.govinfo.gov/link/uscode/44/3504).
#### Source:
T.D. ATF-74, [45 FR 63257](https://www.federalregister.gov/citation/45-FR-63257), Sept. 30, 1980, unless otherwise noted.
## Subpart A—Scope of Regulations
#### § 10.1 General.
The regulations in this part, issued pursuant to section 105 of the Federal Alcohol Administration Act ([27 U.S.C. 205](https://www.govinfo.gov/link/uscode/27/205)), specify practices which may result in violations of section 105(c) of the Act and criteria for determining whether a practice is a violation of section 105(c) of the Act. This part does not attempt to enumerate all of the practices prohibited by section 105(c) of the Act. Nothing in this part shall operate to exempt any person from the requirements of any State law or regulation.
\[T.D. ATF-364, [60 FR 20426](https://www.federalregister.gov/citation/60-FR-20426), Apr. 26, 1995]
#### § 10.2 Territorial extent.
This part applies to the several States of the United States, the District of Columbia, and Puerto Rico.
#### § 10.3 Application.
(a) *General.* The regulations in this part apply to transactions between industry members and employees, officers, or representatives of trade buyers.
(b) *Transactions involving State agencies.* The regulations in this part apply only to transactions between industry members and employees of State agencies operating as retailers, wholesalers, or both. The regulations do not apply to State agencies with regard to their dealings with employees, officers, or representatives of trade buyers.
#### § 10.4 Jurisdictional limits.
(a) *General.* The regulations in this part apply where:
(1) The industry member induces a trade buyer to purchase distilled spirits, wine, or malt beverages from such industry member to the exclusion, in whole or in part, of products sold or offered for sale by other persons in interstate or foreign commerce; and
(2) If:
(i) The inducement is made in the course of interstate or foreign commerce; or
(ii) The industry member engages in the practice of using an inducement to such an extent as substantially to restrain or prevent transactions in interstate or foreign commerce in any such products; or
(iii) The direct effect of the inducement is to prevent, deter, hinder, or restrict other persons from selling or offering for sale any such products to such retailer in interstate or foreign commerce.
(b) *Malt beverages.* In the case of malt beverages, this part applies to transactions between an employee, officer, or representative of a trade buyer in any State and a brewer, importer, or wholesaler of malt beverages inside or outside such State only to the extent that the law of such State imposes requirements similar to the requirements of section 5(c) of the Federal Alcohol Administration Act ([27 U.S.C. 205(c)](https://www.govinfo.gov/link/uscode/27/205)), with respect to similar transactions between an employee, officer, or representative of a trade buyer in such State and a brewer, importer, or wholesaler of malt beverages in such State.
\[T.D. ATF-74, [45 FR 63257](https://www.federalregister.gov/citation/45-FR-63257), Sept. 30, 1980, as amended by T.D. ATF-364, [60 FR 20426](https://www.federalregister.gov/citation/60-FR-20426), Apr. 26, 1995]
#### § 10.5 Delegations of the Administrator.
Most of the regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.10, Delegation of the Administrator's Authorities in [27 CFR Part 10](/current/title-27/part-10), Commercial Bribery. You may obtain a copy of this order on the TTB website (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-44, [71 FR 16923](https://www.federalregister.gov/citation/71-FR-16923), Apr. 4, 2006, as amended by T.D. TTB-196,[89 FR 87936](https://www.federalregister.gov/citation/89-FR-87936), Nov. 6, 2024]
#### § 10.6 Administrative provisions.
(a) *General.* The Act makes applicable the provisions including penalties of sections 49 and 50 of Title 15, United States Code, to the jurisdiction, powers and duties of the Administrator under this Act, and to any person (whether or not a corporation) subject to the provisions of law administered by the Administrator under this Act. The Act also provides that the Administrator is authorized to require, in such manner and such form as he or she shall prescribe, such reports as are necessary to carry out the powers and duties under this chapter.
(b) *Examination and subpoena.* Any appropriate TTB officer shall at all reasonable times have access to, for the purpose of examination, and the right to copy any documentary evidence of any person, partnership, or corporation being investigated or proceeded against. An appropriate TTB officer shall also have the power to require by subpoena the attendance and testimony of witnesses and the production of all such documentary evidence relating to any matter under investigation, upon a satisfactory showing the requested evidence may reasonably be expected to yield information relevant to any matter being investigated under the Act.
(c) *Reports required by the appropriate TTB officer* —
(1) *General.* The appropriate TTB officer may, as part of a trade practice investigation of an industry member, require such industry member to submit a written report containing information on sponsorships, advertisements, promotions, and other activities pertaining to its business subject to the Act conducted by, or on behalf of, or benefiting the industry member.
(2) *Preparation.* The report will be prepared by the industry member in letter form, executed under the penalties of perjury, and will contain the information specified by the appropriate TTB officer. The period covered by the report will not exceed three years.
(3) *Filing.* The report will be filed in accordance with the instructions of the appropriate TTB officer.
(Approved by the Office of Management and Budget under control number 1512-0392)
\[T.D. ATF-364, [60 FR 20426](https://www.federalregister.gov/citation/60-FR-20426), Apr. 26, 1995. Redesignated and amended by T.D. ATF-428, [65 FR 52020](https://www.federalregister.gov/citation/65-FR-52020), Aug. 28, 2000]
## Subpart B—Definitions
#### § 10.11 Meaning of terms.
As used in this part, unless the context otherwise requires, terms have the meanings given in this section. Any other term defined in the Federal Alcohol Administration Act and used in this part shall have the meaning assigned to it by that Act.
*Act.* The Federal Alcohol Administration Act.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.10, Delegation of the Administrator's Authorities in [27 CFR Part 10](/current/title-27/part-10), Commercial Bribery.
*Industry member.* Any person engaged in business as a distiller, brewer, recitifier, blender, or other producer, or as an importer or wholesaler of distilled spirits, wine or malt beverages, or as a bottler, or warehouseman and bottler, of distilled spirits; industry member does not include an agency of a State or political subdivision thereof, or an officer or employee of such agency.
*Officer.* All corporate executives, including presidents, vice presidents, treasurers, and chief executive officers.
*Product.* Distilled spirits, wine or malt beverages, as defined in the Federal Alcohol Administration Act.
*Trade buyer.* Any person who is a wholesaler or retailer of distilled spirits, wine, or malt beverages.
\[T.D. ATF-74, [45 FR 63257](https://www.federalregister.gov/citation/45-FR-63257), Sept. 30, 1980, as amended by T.D. ATF-364, [60 FR 20426](https://www.federalregister.gov/citation/60-FR-20426), Apr. 26, 1995; T.D. ATF-428, [65 FR 52020](https://www.federalregister.gov/citation/65-FR-52020), Aug. 28, 2000; T.D. TTB-44, [71 FR 16924](https://www.federalregister.gov/citation/71-FR-16924), Apr. 4, 2006]
## Subpart C—Commercial Bribery
#### § 10.21 Commercial bribery.
It is unlawful for an industry member, directly or indirectly or through an affiliate, to induce a trade buyer to purchase the industry member's products, to the complete or partial exclusion of products sold or offered for sale by other persons in interstate or foreign commerce, by offering or giving a bonus, premium, compensation, or other thing of value to any officer, employee, or representative of the trade buyer. The bonus, premium, compensation, or other thing of value need not be offered or given for the purpose of directly inducing a trade buyer to purchase from the seller, but rather is applicable if an industry member induces officers, employees or representatives of the trade buyer to promote sales of the industry member's products and thereby indirectly induces the trade buyer to purchase from the industry member.
#### § 10.22 Employee associations.
Gifts, donations, and other payments such as for advertising in publications, by an industry member, to trade buyer employee associations are considered the same as bonuses, premiums, compensation, or other things of value given directly to the employees, since the benefits resulting from the gifts or payments flow to the individual members of the association.
#### § 10.23 Gifts or payments to wholesalers.
Although industry members are not prohibited from offering or giving money or other things of value to a wholesale entity (*i.e.*, the corporation, partnership, or individual who owns the business), the wholesaler will be considered as acting as a mere conduit between its officers, employees, or representatives and the industry member, if:
(a) There is an agreement or understanding, implied or explicit, that the money or thing of value will be passed on to the officers, employees, or representatives, or
(b) It is obvious by the very nature of the item given (such as a free trip) that a pass through to the officers, employees, or representatives is clearly contemplated, or
(c) The records of the recipient wholesaler do not accurately reflect such money or item as an asset or the wholesale entity, thus being subject to all ensuing tax consequences as distinguished from the receipt of the money or item as a personal asset of an officer, employee, or representative.
#### § 10.24 Sales promotion contests.
Sales contests sponsored by an industry member which offer prizes directly or indirectly to trade buyer officers, employees or representatives are inducements within the meaning of the Act.
## Subpart D—Exclusion
#### Source:
T.D. ATF-364, [60 FR 20427](https://www.federalregister.gov/citation/60-FR-20427), Apr. 26, 1995, unless otherwise noted.
#### § 10.51 Exclusion, in general.
(a) Exclusion, in whole or in part occurs:
(1) When a practice by an industry member, whether direct, indirect, or through an affiliate, places (or has the potential to place) trade buyer independence at risk by means of a tie or link between the industry member and trade buyer or by any other means of industry member control over the trade buyer, and
(2) Such practice results in the trade buyer purchasing less than it would have of a competitor's product.
(b) Section 10.52 lists practices that create a tie or link that places trade buyer independence at risk. [Section 10.53](/current/title-27/section-10.53) is reserved and will list practices not resulting in exclusion. [Section 10.54](/current/title-27/section-10.54) lists the criteria used for determining whether other practices can put trade buyer independence at risk.
#### § 10.52 Practice which puts trade buyer independence at risk.
The practice specified in this section is deemed to place trade buyer independence at risk within the description of exclusion in [§ 10.51](/current/title-27/section-10.51): Industry member payments of money to the employee(s) of a trade buyer without the knowledge or consent of the trade buyer-employer in return for the employee agreeing to order distilled spirits, wine, or malt beverages from the industry member. The practice enumerated here is an example and does not constitute a complete list of those situations which result in such control.
#### § 10.53 Practices not resulting in exclusion. \[Reserved]
#### § 10.54 Criteria for determining trade buyer independence.
The criteria specified in this section are indications that a particular practice between an industry member and an officer, employee, or representative of a trade buyer, other than those in [§ 10.52](/current/title-27/section-10.52), places trade buyer independence at risk. A practice need not meet all of the criteria specified in this section in order to place trade buyer independence at risk.
(a) The practice restricts or hampers the free economic choice of a trade buyer to decide which products to purchase or the quantity in which to purchase them for sale to retailers and consumers.
(b) The industry member obligates the trade buyer to participate in the promotion to obtain the industry member's product.
(c) The trade buyer has a continuing obligation to purchase or otherwise promote the industry member's product.
(d) The trade buyer has a commitment not to terminate its relationship with the industry member with respect to purchase of the industry member's products.
(e) The practice involves the industry member in the day-to-day operations of the trade buyer. For example, the industry member controls the trade buyer's decisions on which brand of products to purchase, the pricing of products, or the manner in which the products will be displayed on the trade buyer's premises.
(f) The practice is discriminatory in that it is not offered to all trade buyers in the local market on the same terms without business reasons present to justify the difference in treatment.
# Part 11 — CONSIGNMENT SALES
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-11
Full text of 27 CFR Part 11 — CONSIGNMENT SALES. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 11—CONSIGNMENT SALES
#### Authority:
[15 U.S.C. 49-50](https://www.govinfo.gov/link/uscode/15/49); [27 U.S.C. 202](https://www.govinfo.gov/link/uscode/27/202) and [205](https://www.govinfo.gov/link/uscode/27/205).
#### Source:
T.D. ATF-74, [45 FR 63258](https://www.federalregister.gov/citation/45-FR-63258), Sept. 23, 1980, unless otherwise noted.
## Subpart A—Scope of Regulations
#### § 11.1 General.
The regulations in this part, issued pursuant to section 105 of the Federal Alcohol Administration Act ([27 U.S.C. 205](https://www.govinfo.gov/link/uscode/27/205)), specify arrangements which are consignment sales under section 105(d) of the Act and contain guidelines concerning return of distilled spirits, wine and malt beverages from a trade buyer. This part does not attempt to enumerate all of the practices prohibited by section 105(d) of the Act. Nothing in this part shall operate to exempt any person from the requirements of any State law or regulation.
\[T.D. ATF-364, [60 FR 20427](https://www.federalregister.gov/citation/60-FR-20427), Apr. 26, 1995]
#### § 11.2 Territorial extent.
This part applies to the several States of the United States, the District of Columbia, and Puerto Rico.
#### § 11.3 Application.
(a) *General.* The regulations in this part apply to transactions between industry members and trade buyers.
(b) *Transactions involving State agencies.* The regulations in this part apply to transactions involving State agencies operating as retailers or wholesalers.
#### § 11.4 Jurisdictional limits.
(a) *General.* The regulations in this part apply where:
(1) The industry member sells, offers for sale, or contracts to sell to a trade buyer engaged in the sale of distilled spirits, wines, or malt beverages, or for any such trade buyer to purchase, offer to purchase, or contract to purchase, any such products on consignment or under conditional sale or with the privilege of return or on any basis other than a bona fide sale, or where any part of such transaction involves, directly or indirectly, the acquisition by such person from the trade buyer or the agreement to acquire from the trade buyer other distilled spirits, wine, or malt beverages; and,
(2) If:
(i) The sale, purchase, offer or contract is made in the course of interstate or foreign commerce; or
(ii) The industry member engages in using the practice to such an extent as substantially to restrain or prevent transactions in interstate or foreign commerce in any such products; or
(iii) The direct effect of the sale, purchase, offer or contract is to prevent, deter, hinder, or restrict other persons from selling or offering for sale any such products to such trade buyer in interstate or foreign commerce.
(b) *Malt beverages.* In the case of malt beverages, this part applies to transactions between a retailer in any State and a brewer, importer, or wholesaler of malt beverages inside or outside such State only to the extent that the law of such State imposes requirements similar to the requirements of section 5(d) of the Federal Alcohol Administration Act ([27 U.S.C. 205(d)](https://www.govinfo.gov/link/uscode/27/205)), with respect to similar transactions between a retailer in such State and a brewer, importer, or wholesaler of malt beverages in such State.
#### § 11.5 Delegations of the Administrator.
Most of the regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.11, Delegation of the Administrator's Authorities in [27 CFR Part 11](/current/title-27/part-11), Consignment Sales. You may obtain a copy of this order on the TTB website (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-44, [71 FR 16924](https://www.federalregister.gov/citation/71-FR-16924), Apr. 4, 2006, as amended by T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 11.6 Administrative provisions.
(a) *General.* The Act makes applicable the provisions including penalties of sections 49 and 50 of Title 15, United States Code, to the jurisdiction, powers and duties of the Administrator under this Act, and to any person (whether or not a corporation) subject to the provisions of law administered by the Administrator under this Act.
(b) *Examination and subpoena.* Any appropriate TTB officer shall at all reasonable times have access to, for the purpose of examination, and the right to copy any documentary evidence of any person, partnership, or corporation being investigated or proceeded against. An appropriate TTB officer shall also have the power to require by subpoena the attendance and testimony of witnesses and the production of all such documentary evidence relating to any matter under investigation, upon a satisfactory showing the requested evidence may reasonably be expected to yield information relevant to any matter being investigated under the Act.
\[T.D. ATF-364, [60 FR 20427](https://www.federalregister.gov/citation/60-FR-20427), Apr. 26, 1995. Redesignated and amended by T.D. ATF-428, [65 FR 52021](https://www.federalregister.gov/citation/65-FR-52021), Aug. 28, 2000]
## Subpart B—Definitions
#### § 11.11 Meaning of terms.
As used in this part, unless the context otherwise requires, terms have the meanings given in this section. Any other term defined in the Federal Alcohol Administration Act and used in this part shall have the meaning assigned to it by that Act.
*Act.* The Federal Alcohol Administration Act.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.11, Delegation of the Administrator's Authorities in [27 CFR Part 11](/current/title-27/part-11), Consignment Sales.
*Exchange.* The transfer of distilled spirits, wine, or malt beverages from a trade buyer to an industry member with other products taken as a replacement.
*Industry member.* Any person engaged in business as a distiller, brewer, rectifier, blender, or other producer, or as an importer or wholesaler of distilled spirits, wine or malt beverages, or as a bottler or warehouseman and bottler, of distilled spirits.
*Product.* Distilled spirits, wine or malt beverages, as defined in the Federal Alcohol Administration Act.
*Retailer.* Any person engaged in the sale of distilled spirits, wine or malt beverages to consumers. A wholesaler who makes incidental retail sales representing less than five percent of the wholesaler's total sales volume for the preceding two-month period shall not be considered a retailer with respect to such incidental sales.
*Return.* The transfer of distilled spirits, wine, or malt beverages from a trade buyer to the industry member from whom purchased, for cash or credit.
*Trade buyer.* Any person who is a wholesaler or retailer of distilled spirits, wine or malt beverages.
\[T.D. ATF-74, [45 FR 63258](https://www.federalregister.gov/citation/45-FR-63258), Sept. 23, 1980, as amended by T.D. ATF-364, [60 FR 20427](https://www.federalregister.gov/citation/60-FR-20427), Apr. 26, 1995; T.D. ATF-428, [65 FR 52021](https://www.federalregister.gov/citation/65-FR-52021), Aug. 28, 2000; T.D. TTB-44, [71 FR 16924](https://www.federalregister.gov/citation/71-FR-16924), Apr. 4, 2006]
## Subpart C—Unlawful Sales Arrangements
#### § 11.21 General.
It is unlawful for an industry member to sell, offer for sale, or contract to sell to any trade buyer, or for any such trade buyer to purchase, offer to purchase, or contract to purchase any products (a) on consignment; or (b) under conditional sale; or (c) with the privilege of return; or (d) on any basis other than a bona fide sale; or (e) if any part of the sale involves, directly or indirectly, the acquisition by such person of other products from the trade buyer or the agreement to acquire other products from the trade buyer. Transactions involving the bona fide return of products for ordinary and usual commercial reasons arising after the product has been sold are not prohibited.
#### § 11.22 Consignment sales.
Consignment sales are arrangements wherein the trade buyer is under no obligation to pay for distilled spirits, wine, or malt beverages until they are sold by the trade buyer.
#### § 11.23 Sales conditioned on the acquisition of other products.
(a) *General.* A sale in which any part of the sale involves, directly or indirectly, the acquisition by the industry member from the trade buyer, or the agreement, as a condition to present or future sales, to accept other products from the trade buyer is prohibited.
(b) *Exchange.* The exchange of one product for another is prohibited as a sales transaction conditioned on the acquisition of other products. However, the exchange of a product for equal quantities (case for case) of the same type and brand of product, in containers of another size is not considered an acquisition of “other” products and is not prohibited if there was no direct or implied privilege of return extended when the product was originally sold. Industry members may make price adjustments on products eligible for exchange under this paragraph.
#### § 11.24 Other than a bona fide sale.
“Other than a bona fide sale” includes, but is not limited to, sales in connection with which the industry member purchases or rents the display, shelf, storage or warehouse space to be occupied by such products at premises owned or controlled by the retailer.
\[T.D. ATF-364, [60 FR 20427](https://www.federalregister.gov/citation/60-FR-20427), Apr. 26, 1995]
## Subpart D—Rules for the Return of Distilled Spirits, Wine, and Malt Beverages
#### § 11.31 General.
(a) Section 5(d) of the Act provides, in part, that it is unlawful to sell, offer to sell, or contract to sell products with the privilege of return for any reason, other than those considered to be “ordinary and usual commercial reasons” arising after the product has been sold. Sections 11.32 through 11.39 specify what are considered “ordinary and usual commercial reasons” for the return of products, and outline the conditions and limitations for such returns.
(b) An industry member is under no obligation to accept the return of products for the reasons listed in [§§ 11.32](/current/title-27/section-11.32) through [11.39](/current/title-27/section-11.39).
### Exchanges and Returns for Ordinary and Usual Commercial Reasons
#### § 11.32 Defective products.
Products which are unmarketable because of product deterioration, leaking containers, damaged labels or missing or mutilated tamper evident closures may be exchanged for an equal quantity of identical products or may be returned for cash or credit against outstanding indebtedness.
\[T.D. ATF-364, [60 FR 20427](https://www.federalregister.gov/citation/60-FR-20427), Apr. 26, 1995]
#### § 11.33 Error in products delivered.
Any discrepancy between products ordered and products delivered may be corrected, within a reasonable period after delivery, by exchange of the products delivered for those which were ordered, or by a return for cash or credit against outstanding indebtedness.
#### § 11.34 Products which may no longer be lawfully sold.
Products which may no longer be lawfully sold may be returned for cash or credit against outstanding indebtedness. This would include situations where, due to a change in regulation or administrative procedure over which the trade buyer or an affiliate of the trade buyer has no control, a particular size or brand is no longer permitted to be sold.
\[T.D. ATF-364, [60 FR 20428](https://www.federalregister.gov/citation/60-FR-20428), Apr. 26, 1995]
#### § 11.35 Termination of business.
Products on hand at the time a trade buyer terminates operations may be returned for cash or credit against outstanding indebtedness. This does not include a temporary seasonal shutdown (see [§ 11.39](/current/title-27/section-11.39)).
\[T.D. ATF-364, [60 FR 20428](https://www.federalregister.gov/citation/60-FR-20428), Apr. 26, 1995]
#### § 11.36 Termination of franchise.
When an industry member has sold products for cash or credit to one of its wholesalers and the distributorship arrangement is subsequently terminated, stocks of the product on hand may be returned for cash or credit against outstanding indebtedness.
#### § 11.37 Change in product.
A trade buyer's inventory of a product which has been changed in formula, proof, label or container (subject to [§ 11.46](/current/title-27/section-11.46)) may be exchanged for equal quantities of the new version of that product.
#### § 11.38 Discontinued products.
When a producer or importer discontinues the production or importation of a product, a trade buyer's inventory of that product may be returned for cash or credit against outstanding indebtedness.
#### § 11.39 Seasonal dealers.
Industry members may accept the return of products from retail dealers who are only open a portion of the year, if the products are likely to spoil during the off season. These returns will be for cash or for credit against outstanding indebtedness.
### Exchanges and Returns for Reasons Not Considered Ordinary and Usual
#### § 11.45 Overstocked and slow-moving products.
The return or exchange of a product because it is overstocked or slow-moving does not constitute a return for “ordinary and usual commercial reasons.”
#### § 11.46 Seasonal products.
The return or exchange of products for which there is only a limited or seasonal demand, such as holiday decanters and certain distinctive bottles, does not constitute a return for “ordinary and usual commercial reasons.”
# Part 12 — FOREIGN NONGENERIC NAMES OF GEOGRAPHIC SIGNIFICANCE USED IN THE DESIGNATION OF WINES
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-12
Full text of 27 CFR Part 12 — FOREIGN NONGENERIC NAMES OF GEOGRAPHIC SIGNIFICANCE USED IN THE DESIGNATION OF WINES. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 12—FOREIGN NONGENERIC NAMES OF GEOGRAPHIC SIGNIFICANCE USED IN THE DESIGNATION OF WINES
#### Authority:
[27 U.S.C. 205](https://www.govinfo.gov/link/uscode/27/205).
#### Source:
T.D. ATF-296, [55 FR 17967](https://www.federalregister.gov/citation/55-FR-17967), Apr. 30, 1990, unless otherwise noted.
## Subpart A—General Provisions
#### § 12.1 Scope.
The regulations in this part relate to foreign names of geographic significance used in the designation of wines which are recognized as nongeneric under [27 CFR 4.24](/current/title-27/section-4.24), and include those nongeneric names which the Administrator has found to be distinctive designations of wine, as defined in [§ 4.24(c)(1) of this chapter](/current/title-27/section-4.24#p-4.24\(c\)\(1\)).
#### § 12.2 Territorial extent.
This part applies to the several States of the United States, the District of Columbia, and Puerto Rico.
#### § 12.3 Procedure for recognition of foreign distinctive designations.
(a) *Procedure.* Under the provisions of [27 CFR 70.701(c)](/current/title-27/section-70.701#p-70.701\(c\)), the Administrator may approve petitions requesting TTB recognition of names of geographic significance which are the distinctive designations of specific wines under [§ 4.24(c) of this chapter](/current/title-27/section-4.24#p-4.24\(c\)).
(b) *Format.* A petition shall be in the form of a letterhead application requesting that TTB recognize the distinctive wine designation listed in their petition. The petition should present evidence to support a finding that the geographic designation is known to the U.S. consumer and trade as the designation of a specific wine of a particular place or region, distinguishable from all other wines. All background material and supporting data submitted will be made part of the application and will be considered in the review process.
\[T.D. ATF-296, [55 FR 17967](https://www.federalregister.gov/citation/55-FR-17967), Apr. 30, 1990, as amended by T.D. ATF-463, [66 FR 42733](https://www.federalregister.gov/citation/66-FR-42733), Aug. 15, 2001]
## Subpart B \[Reserved]
## Subpart C—Foreign Nongeneric Names of Geographic Significance
#### § 12.21 List of examples of names by country.
The names listed in this section are examples of foreign nongeneric names of geographic significance under [§ 4.24(c) (1)](/current/title-27/section-4.24#p-4.24\(c\)\(1\)) and [(2) of this chapter](/current/title-27/section-4.24#p-4.24\(c\)\(2\)).
(a) *Argentina:* Alto Colorado, Valles Calchaquies.
(b) *Australia:* Adelaide, Barossa Valley, Clare Valley, Cowra, Forbes, Geelong, Goulburn Valley, Granite Belt, Great Western, Hunter Valley, McLaren Vale, Mudgee, Murray River Valley, New South Wales, North Richmond, Queensland, South Australia, Swan Valley, Tasmania, Victoria, Western Australia, Yarra Valley.
(c) *Austria:* Bisamberg-Kreuzenstein, Burgenland, Carnuntum, Frauenweingarten, Kapellenweg, Kirchberger Wagram, Matzner Hugel, Niederosterreich, Nussberg, Pinkatal, Schatzberg, Sekt, Wachau, Weststeiermark, Wien.
(d) *Federal Republic of Germany:* Ahr, Bacharach, Bad Durkheim, Baden, Badisches Frankenland, Badstube, Bayerischer Bodensee, Bernkastel, Bingen, Breisgau, Deidesheimer Hofstuck, Dhroner Hofberger, Erdener Treppchen, Graach, Graben, Hessische Bergstrasse, Himmelreich, Hochheimer Holle, Johannisberg, Klosterberg, Kocher-Jagst-Tauber, Kreuznach, Kurfurstlay, Loreley, Maindreieck, Mainviereck, Markgraflerland, Mittelrhein, Moseltor, Nahe, Nierstein, Obermosel, Oppenheimer Krotenbrunnen, Ortenau, Remstal-Stuttgart, Rhein-Burgengau, Rheinfalz, Rheingau, Rheinhessen, Schloss Bockelheim, Sekt, Siebengebirge, Starkenburg, Steigerwald, Sudliche Weinstrasse, Trier, Umstadt, Urziger Wurzgarten, Walporzheim/Ahrtal, Wiltinger Scharzberg, Winkeler Jesuitengarten, Wonnegau, Wurttemberg, Zell/Mosel.
(e) *France:* Ajaccio, Arbois, Auxey-Duresses, Bandol, Bearn, Bellet, Bergerac, Blagny, Blaye, Bonnezeaux, Bourg, Buzet, Cadillac, Cahors, Canon-Fronsac, Cassis, Cerons, Charlemagne, Chateau Chalon, Chateau-Grillet, Chinon, Chorey-les-Beaunes, Clos de Tart, Clos des Lambrays, Clos Saint-Denis, Collioure, Condrieu, Cornas, Coteaux de l'Aubance, Coteaux du Languedoc, Coteaux du Loir, Coteaux du Lyonnais, Coteaux du Tricastin, Cotes de Duras, Cotes de Provence, Cotes du Jura, Cotes du Roussillon, Cotes du Ventoux, Crepy, Dezize-les-Maranges, Faugeres, Fitou, Fixin, Gaillac, Gigondas, Givry, Gros Plant, Irouleguy, Jasnieres, Jurancon, Ladoix, L'Etoile, Limoux, Lirac, Loupiac, Madiran, Mazis-Chambertin, Menetou Salon, Minervois, Monbazillac, Montagny, Monthelie, Montlouis, Montravel, Moulis, Muscat de Beaumes de Venise, Muscat de Frontignan, Neac, Pacherenc du Vic Bilh, Palette, Pecharmant, Pernand-Vergelesses, Picpoul-de-Pinet, Pineau des Charentes, Pouilly-Loche, Quarts-de-Chaume, Quincy, Regnie, Reuilly, Rosette, Rully, Saint-Aubin, Saint-Chinian, Saint-Georges-d'Orques, Saint-Joseph, Saint-Nicolas-de-Bourgueil, Saint-Peray, Saint-Romain, Saint-Veran, Sainte-Croix-du-Mont, Saussignac, Sauvignon de Saint-Bris, Savennieres, Seyssel, Vin de Lavilledieu, Vin de pays de l'Aude, Vin de Savoie, Vin du Bugey, Vin du Haut-Poitou.
(f) *Greece:* Aghialos, Amynteon, Archanes, Daphnes, Goumenissa, Kantza, Mantinea, Mavrodaphni Cefalonia, Mavrodaphni Patras, Moschatos Lemnos, Moschatos Rhodes, Naoussa, Nemea, Paros, Peza, Plagies Melitona, Rapsani, Retsina Attica, Retsina Megaron, Samos, Santorini, Sitia, Sitsa.
(g) *Italy:* Abruzzo, Acqui, Affile, Aleatico di Gradoli, Alto Mincio, Avellino, Barbera del Monferrato, Basilicata, Bianco di Custoza, Bianco Pisano di S. Torpe, Boca, Campidano di Terralba, Castelli di Jesi, Chieri, Cinque Terre, Ciro, Colli Albani, Colli del Trasimeno, Diano d'Alba, Est! Est! Est! di Montefiascone, Etna, Fara, Faro, Franciacorta, Gabiano, Gavi, Ghemme, Ischia, Lambrusco Reggiano, Lamezia, Langhe Monregalesi, Lessona, Lipari, Melissa, Metauro, Molise, Olevano Romano, Oristano, Ovada, Parrina, Piceno, Piemonte, Piglio, Pollino, Puglia, Romagna, Rosso Barletta, Savuto, Sicilia, Sorbara, Sulcis, Taurasi, Torgiano, Trani, Valtellina Sassella, Velletri, Veneto, Vermentino di Gallura, Vesuvio, Vulture, Zagarolo.
(h) *New Zealand:* Blenheim, Canterbury, Central Otago, Gisborne, Hawkes Bay, Henderson, Marlborough, Nelson, Northland, Richmond, Rodney, South Auckland, Te Kauwhata, Wanganui, Wellington.
(i) *Portugal:* Algarve, Alijo, Bairrada, Baixo Corgo, Basto, Beiras, Belem, Braga, Bucelas, Camara de Lobos, Campanario, Cantahede, Carcavelos, Cartaxo, Chamusca, Colares, Douro, Estremadura, Favaios, Lafoes, Lagoa, Lagos, Lamego, Lousada, Meda, Mesao Frio, Moncao, Moscatel de Setubal, Murca, Nelas, Penafiel, Pico, Portimao, Preces, Ribatejo-Oeste, Sabrosa, Santa Luzia, Sao Joao, Sao Martinho, Sao Pedro, Tavira, Torres Vedras, Tras-os-Montes, Viana do Castelo, Vila Real, Vinho Verde.
(j) *Romania:* Alba Iulia, Arges, Bistrita-Nasaud, Bujoru, Cotesti, Cotnari, Dealu Mare, Dealurile, Dragasani, Drobeta Turnuseverin, Istria, Ivesti, Jidvei, Medias, Mehedinti, Minis, Moldovei, Murfatlar, Nicoresti, Odobesti, Oltina, Panciu, Recas, Sarica Niculitel, Sebes, Segarcea, Tecuci-Galati, Teremia, Tirnave.
(k) *Spain:* Alella, Alicante, Almansa, Ampurdan-Costa Brava, Campo de Borja, Carinena, Cava, Condado de Huelva, Jumilla, La Mancha, Manzanilla-Sanlucar de Barrameda, Mentrida, Montilla-Moriles, Navarra, Penedes, Priorato, Ribeiro, Ribera del Duero, Rueda, Tarragona, Utiel-Requena, Valdeorras, Valencia, Yecla.
(l) *Switzerland:* Agarn, Aire-la-Ville, Argovie, Auvernier, Avully, Berne, Bernex, Bonvillars, Bratsch, Chalais, Chamoson, Cressier, Cully, Dardagny, Dezaley, Epesses, Erlenbach, Friburg, Fully, Geneve, Grisons, Gy, Herrliberg, Hornussen, La Cote, Lavaux, Lens, Limmattal, Lucerne, Lutry, Meilen, Montreux, Neuchatel, Niedergesteln, Riex, Rivaz, Schaffhouse, Schlossgut Herdern, Schwyz, Suisse, Swiss, Tessin, Thurgovie, Valais, Varen/Varone, Vaud, Veyrier, Villette, Zeneggen, Zurcher Unterland, Zurich.
(m) *Yugoslavia:* Blatina Mostar, Bolski Plavac, Borje, Brodska Grasevina, Crnogorski Vranac, Dingac, Erdutski Burgundac Bijeli, Faros, Grk Lumbarda, Ilocka Frankovka, Kutjevacka Grasevina, Merlot Bujstine, Plesivicki Rizling Rajnski, Porecki Merlot, Postup, Primostenski Babic, Smedereveski Sovinjon, Vinaracki Merlo, Viska Vugava, Vrsacki Rizling, Zlata Radgonska Penina.
## Subpart D—Foreign Nongeneric Names Which Are Distinctive Designations of Specific Grape Wines
#### § 12.31 List of approved names by country.
The names listed in this section are foreign nongeneric names of geographic significance which are also recognized by the Administrator as distinctive designations of specific grape wines, in accordance with [§ 4.24(c)(1)](/current/title-27/section-4.24#p-4.24\(c\)\(1\)) and [(3) of this chapter](/current/title-27/section-4.24#p-4.24\(c\)\(3\)).
(a) *Federal Republic of Germany:* Bernkasteler Doctor (Doktor), Deidesheimer, Dexheimer Doktor, Erbacher Marcobrunn, Forster, Forster Jesuitengarten, Graacher Himmelreich, Liebfraumilch, Liebfrauenmilch, Mosel, Mosel-Saar-Ruwer, Ockfener Bockstein, Piesporter Goldtropfchen, Piesporter Michelsberg, Piesporter Treppchen, Rudesheimer, Scharzhofberger, Schloss Johannisberger, Schloss Vollrads, Wehlener Sonnenuhr, Zeller Schwarze Katz.
(b) *France:* Aloxe-Corton, Alsace or Vin d'Alsace, Anjou, Barsac, Batard-Montrachet, Beaujolais, Beaujolais Villages, Beaune, Bonnes Mares, Bordeaux, Bordeaux Blanc, Bordeaux Rouge, Bourgogne, Brouilly, Chambertin, Chambolle-Musigny, Charmes-Chambertin, Chassagne-Montrachet, Chateau Lafite, Chateau Margaux, Chateau Yquem, Chateauneuf-du-Pape, Chenas, Chevalier-Montrachet, Chiroubles, Clos de la Roche, Clos de Vougeot, Corton, Corton-Charlemagne, Cote de Beaune, Cote de Beaune-Villages, Cote de Brouilly, Cote de Nuits, Cote de Nuits-Villages, Cote Rotie, Coteaux du Layon, Cotes du Rhone, Echezeaux, Entre-Deux-Mers, Fleurie, Gevrey-Chambertin, Grands Echezeaux, Graves, Haut Medoc, Hermitage, La Tache, Loire, Macon, Margaux, Medoc, Mercurey, Meursault, Montrachet, Morgon, Moulin-a-Vent, Muscadet, Musigny, Nuits or Nuits-Saint-Georges, Pauillac, Pomerol, Pommard, Pouilly-Fuisse, Pouilly Fume, Puligny-Montrachet, Rhone, Richebourg, Romanee-Conti, Romanee Saint-Vivant, Rose d'Anjou, Saint-Amour, Saint-Emilion, Saint-Estephe, Saint-Julien, Sancerre, Santenay, Saumur, Savigny or Savigny-les-Beaunes, Tavel, Touraine, Volnay, Vosne-Romanee, Vouvray.
(c) *Italy:* Asti Spumante, Barbaresco, Barbera d'Alba, Barbera d'Asti, Bardolino, Barolo, Brunello di Montalcino, Dolcetto d'Alba, Frascati, Gattinara, Lacryma Christi, Nebbiolo d'Alba, Orvieto, Soave, Valpolicella, Vino Nobile de Montepulciano.
(d) *Portugal:* Dao, Oporto, Porto, or Vinho do Porto.
(e) *Spain:* Lagrima, Rioja.
# Part 13 — LABELING PROCEEDINGS
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-13
Full text of 27 CFR Part 13 — LABELING PROCEEDINGS. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 13—LABELING PROCEEDINGS
#### Authority:
[27 U.S.C. 205(e)](https://www.govinfo.gov/link/uscode/27/205), [26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301) and [7805](https://www.govinfo.gov/link/uscode/26/7805).
#### Source:
T.D. ATF-406, [64 FR 2129](https://www.federalregister.gov/citation/64-FR-2129), Jan. 13, 1999, unless otherwise noted.
#### Editorial Note:
Nomenclature changes to part 13 appear by T.D. ATF-449, [66 FR 19085](https://www.federalregister.gov/citation/66-FR-19085), Apr. 13, 2001.
## Subpart A—Scope and Construction of Regulations
#### § 13.1 Scope of part.
The regulations in this part govern the procedure and practice in connection with the issuance, denial, and revocation of certificates of label approval, certificates of exemption from label approval, and distinctive liquor bottle approvals under [27 U.S.C. 205(e)](https://www.govinfo.gov/link/uscode/27/205) and [26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301). The regulations in this part also provide for appeal procedures when applications for label approval, exemptions from label approval, or distinctive liquor bottle approvals are denied, when such applications are approved with qualifications, or when these applications are approved and then subsequently revoked. The appeal process in this part does not apply to organic claims on alcohol beverage labels. See [§ 13.101](/current/title-27/section-13.101).
\[T.D. ATF-406, [64 FR 2129](https://www.federalregister.gov/citation/64-FR-2129), Jan. 13, 1999, as amended by T.D. ATF-483, [67 FR 62858](https://www.federalregister.gov/citation/67-FR-62858), Oct. 8, 2002 ]
#### § 13.2 Delegations of the Administrator.
The regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.13, Delegation of the Administrator's Authorities in [27 CFR Part 13](/current/title-27/part-13), Labeling Proceedings. You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-44, [71 FR 16924](https://www.federalregister.gov/citation/71-FR-16924), Apr. 4, 2006, as amended by T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 13.3 Related regulations.
The following regulations also relate to this part:
[7 CFR Part 205](/current/title-7/part-205)—National Organic Program
[27 CFR Part 1](/current/title-27/part-1)—Basic Permit Requirements Under the Federal Alcohol Administration Act, Nonindustrial Use of Distilled Spirits and Wine, Bulk Sales and Bottling of Distilled Spirits
[27 CFR Part 4](/current/title-27/part-4)—Labeling and Advertising of Wine
[27 CFR Part 5](/current/title-27/part-5)—Labeling and Advertising of Distilled Spirits
[27 CFR Part 7](/current/title-27/part-7)—Labeling and Advertising of Malt Beverages
[27 CFR Part 9](/current/title-27/part-9)—American Viticultural Areas
[27 CFR Part 12](/current/title-27/part-12)—Foreign Nongeneric Names of Geographic Significance Used in the Designation of Wines
[27 CFR Part 16](/current/title-27/part-16)—Alcoholic Beverage Health Warning Statement
[27 CFR Part 19](/current/title-27/part-19)—Distilled Spirits Plants
[27 CFR Part 24](/current/title-27/part-24)—Wine
[27 CFR Part 25](/current/title-27/part-25)—Beer
[27 CFR Part 26](/current/title-27/part-26)—Liquors and Articles from Puerto Rico and the Virgin Islands
[27 CFR Part 27](/current/title-27/part-27)—Importation of Distilled Spirits, Wines, and Beer
[27 CFR 28](/current/title-27/part-28)—Exportation of Alcohol
[27 CFR Part 71](/current/title-27/part-71)—Rules of Practice in Permit Proceedings
\[T.D. ATF-483, [67 FR 62858](https://www.federalregister.gov/citation/67-FR-62858), Oct. 8, 2002, as amended by T.D. TTB-8, [69 FR 3829](https://www.federalregister.gov/citation/69-FR-3829), Jan. 27, 2004]
## Subpart B—Definitions
#### § 13.11 Meaning of terms.
Where used in this part and in forms prescribed under this part, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof, terms shall have the meaning ascribed in this subpart. Words in the plural form shall include the singular, and vice versa, and words importing the masculine gender shall include the feminine. The terms “include” and “including” do not exclude things not enumerated that are in the same general class.
*Act.* The Federal Alcohol Administration Act.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Applicant.* The permittee or brewer whose name, address, and basic permit number, or plant registry number, appears on an unapproved Form 5100.31, application for a certificate of label approval, certificate of exemption from label approval, or distinctive liquor bottle approval.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.13, Delegation of the Administrator's Authorities in [27 CFR Part 13](/current/title-27/part-13), Labeling Proceedings.
*Brewer.* Any person who brews beer (except a person who produces only beer exempt from tax under [26 U.S.C. 5053(e)](https://www.govinfo.gov/link/uscode/26/5053)) and any person who produces beer for sale.
*Certificate holder.* The permittee or brewer whose name, address, and basic permit number, or plant registry number, appears on an approved Form 5100.31, certificate of label approval, certificate of exemption from label approval, or distinctive liquor bottle approval.
*Certificate of exemption from label approval.* A certificate issued on Form 5100.31 which authorizes the bottling of wine or distilled spirits, under the condition that the product will under no circumstances be sold, offered for sale, shipped, delivered for shipment, or otherwise introduced by the applicant, directly or indirectly, into interstate or foreign commerce.
*Certificate of label approval.* A certificate issued on Form 5100.31 that authorizes the bottling or packing of wine, distilled spirits, or malt beverages, or the removal of bottled wine, distilled spirits, or malt beverages from customs custody for introduction into commerce, as long as the product bears labels identical to the labels affixed to the face of the certificate, or labels with changes authorized by the certificate.
*Distilled spirits.* Ethyl alcohol, hydrated oxide of ethyl, spirits of wine, whisky, rum, brandy, gin, and other distilled spirits, including all dilutions and mixtures thereof for nonindustrial use. The term “distilled spirits” does not include mixtures containing wine, bottled at 48 degrees of proof or less, if the mixture contains more than 50 percent wine on a proof gallon basis.
*Distinctive liquor bottle.* A liquor bottle of distinctive shape or design.
*Distinctive liquor bottle approval.* Approval issued on Form 5100.31 that authorizes the bottling of distilled spirits, or the removal of bottled distilled spirits from customs custody for introduction into commerce, as long as the bottle is identical to the photograph affixed to the face of the form.
*Interstate or foreign commerce.* Commerce between any State and any place outside that State, or commerce within any Territory or the District of Columbia, or between points within the same State but through any place outside that State.
*Liquor bottle:* A bottle made of glass or earthenware, or of other suitable material approved by the Food and Drug Administration, which has been designed or is intended for use as a container for distilled spirits for sale for beverage purposes, and which has been determined by the appropriate TTB officer to protect the revenue adequately.
*Malt beverage.* A beverage made by the alcoholic fermentation of an infusion or decoction, or combination of both, in potable brewing water, of malted barley with hops, or their parts, or their products, and with or without other malted cereals, and with or without the addition of unmalted or prepared cereals, other carbohydrates, or products prepared therefrom, and with or without the addition of carbon dioxide, and with or without other wholesome products suitable for human food consumption.
*Permittee.* Any person holding a basic permit under the Federal Alcohol Administration Act.
*Person.* Any individual, partnership, joint stock company, business trust, association, corporation, or other form of business enterprise, including a receiver, trustee, or liquidating agent and including an officer or employee of any agency of a State or political subdivision thereof.
*TTB.* The Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*United States.* The several States and Territories and the District of Columbia; the term “State” includes a Territory and the District of Columbia; and the term “Territory” means the Commonwealth of Puerto Rico.
*Use of other terms.* Any other term defined in the Federal Alcohol Administration Act and used in this part shall have the same meaning assigned to it by the Act.
*Wine.*
(1) Wine as defined in section 610 and section 617 of the Revenue Act of 1918 ([26 U.S.C. 5381-5392](https://www.govinfo.gov/link/uscode/26/5381)), only if for nonindustrial use and containing not less than 7 percent and not more than 24 percent of alcohol by volume; and
(2) Other alcoholic beverages not so defined, but made in the manner of wine, including sparkling and carbonated wine, wine made from condensed grape must, wine made from other agricultural products than the juice of sound, ripe grapes, imitation wine, compounds sold as wine, vermouth, cider, perry, and sake, only if for nonindustrial use and containing not less than 7 percent and not more than 24 percent of alcohol by volume.
\[T.D. ATF-406, [64 FR 2129](https://www.federalregister.gov/citation/64-FR-2129), Jan. 13, 1999, as amended by T.D. ATF-449, [66 FR 19085](https://www.federalregister.gov/citation/66-FR-19085), Apr. 13, 2001; T.D. TTB-44, [71 FR 16924](https://www.federalregister.gov/citation/71-FR-16924), Apr. 4, 2006; T.D. TTB-91, [76 FR 5477](https://www.federalregister.gov/citation/76-FR-5477), Feb. 1, 2011; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
## Subpart C—Applications
#### § 13.20 Forms prescribed.
(a) The appropriate TTB officer is authorized to prescribe all forms required by this part. All of the information called for in each form must be furnished as indicated by the headings on the form and the instructions on or pertaining to the form. In addition, the information called for in each form is that which is required by this part. The form will be filed in accordance with the instructions on the form.
(b) Forms prescribed by this part are available for printing through the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. ATF-449, [66 FR 19085](https://www.federalregister.gov/citation/66-FR-19085), Apr. 13, 2001, as amended by T.D. TTB-44, [71 FR 16924](https://www.federalregister.gov/citation/71-FR-16924), Apr. 4, 2006; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 13.21 Application for certificate.
(a) *Form of application.* An applicant for a certificate of label approval, certificate of exemption from label approval, or distinctive liquor bottle approval, must send or deliver signed duplicate copies of TTB Form 5100.31, “Application For And Certification/Exemption Of Label/Bottle Approval” according to the instructions for that form. If the application complies with applicable laws and regulations, a certificate of label approval, certificate of exemption from label approval, or distinctive liquor bottle approval will be issued. If the approval is qualified in any manner, such qualifications will be set forth in the appropriate space on the form.
(b) *Time period for action on application.* Within 90 days of receipt of an application, the appropriate TTB officer must notify the applicant whether the application has been approved or denied. The appropriate TTB officer may extend this period of time once, by an additional 90 days, if he or she finds that unusual circumstances require additional time to consider the issues presented by an application. If the appropriate TTB officer extends the period, he or she must notify the applicant by letter, along with a brief explanation of the issues presented by the label. If the applicant receives no decision from the appropriate TTB officer within the time periods set forth in this paragraph, the applicant may file an appeal as provided in [§ 13.25](/current/title-27/section-13.25).
\[T.D. ATF-406, [64 FR 2129](https://www.federalregister.gov/citation/64-FR-2129), Jan. 13, 1999, as amended by T.D. ATF-449, [66 FR 19085](https://www.federalregister.gov/citation/66-FR-19085), Apr. 13, 2001]
#### § 13.22 Withdrawal of applications.
A person who has filed an application for a certificate of label approval, certificate of exemption from label approval, or distinctive liquor bottle approval, may withdraw such application at any time before TTB takes action on the application.
#### § 13.23 Notice of denial.
Whenever an application for a certificate of label approval, certificate of exemption from label approval, or distinctive liquor bottle approval is denied, the appropriate TTB officer must issue to the applicant a notice of denial on a certificate of label approval rejection document briefly setting forth the reasons why the label or bottle is not in compliance with the applicable laws or regulations. The applicant may then submit a new application for approval after making the necessary corrections.
\[T.D. ATF-406, [64 FR 2129](https://www.federalregister.gov/citation/64-FR-2129), Jan. 13, 1999, as amended by T.D. ATF-449, [66 FR 19085](https://www.federalregister.gov/citation/66-FR-19085), Apr. 13, 2001; T.D. TTB-91, [76 FR 5477](https://www.federalregister.gov/citation/76-FR-5477), Feb. 1, 2011]
#### § 13.25 Appeal of qualification or denial.
(a) *Form of appeal.* If an applicant for a certificate of label approval, certificate of exemption from label approval, or distinctive liquor bottle approval wishes to appeal the qualified approval or denial of an application, the applicant may file a written appeal with the appropriate TTB officer within 45 days after the date of the notice of qualification or denial. The appeal should explain why the applicant believes that the label or bottle is in compliance with applicable laws and regulations. If no appeal is filed within 45 days after the date of the notice of qualification or denial, the notice will be the final decision of TTB.
(b) *Informal resolution.* Applicants may choose to pursue informal resolution of disagreements regarding correction sheets or qualifications by requesting an informal conference with the appropriate TTB officer. However, formal administrative appeals must comply with the provisions of [paragraph (a)](/current/title-27/section-13.25#p-13.25\(a\)) of this section.
#### § 13.26 Decision after appeal of qualification or denial.
(a) *Decision.* After considering any written arguments or evidence presented by the applicant, the appropriate TTB officer must issue a written decision to the applicant. If the decision is that the qualified approval or denial should stand, a copy of the application, marked “appeal denied,” must be returned to the applicant with an explanation of the decision and the specific laws or regulations relied upon in qualifying or denying the application. If the decision is that the certificate of label approval, certificate of exemption from label approval, or distinctive liquor bottle application should be approved without qualification, the applicant should resubmit TTB Form 5100.31 and the certificate will be issued.
(b) *Time limits for decision.* Within 90 days of receipt of an appeal, the appropriate TTB officer must notify the appellant whether the appeal has been granted or denied. If an applicant requests an informal conference as part of an appeal, as authorized in [§ 13.71](/current/title-27/section-13.71), the 90-day period will begin 10 days after the date of the conference to allow for consideration of any written arguments, facts or evidence submitted after the conference. The appropriate TTB officer may extend this period of time once by an additional 90 days if he or she finds that unusual circumstances require additional time to consider the issues presented by an appeal. If the appropriate TTB officer extends the period, he or she must notify the applicant by letter, briefly explaining the issues presented by the label. If the appellant receives no decision from the appropriate TTB officer within the time periods set forth in this paragraph, the appellant may appeal as provided in [§ 13.27](/current/title-27/section-13.27).
(c) *Judicial review.* Prior to applying to the Federal courts for review, an applicant must first exhaust his or her administrative remedies, including the appeal rights set forth in this section and [§ 13.27](/current/title-27/section-13.27).
#### § 13.27 Second appeal of qualification or denial.
(a) *Form of appeal.* The decision after appeal of qualification or denial may be appealed in writing to the appropriate TTB officer within 45 days after the date of that decision. If the appropriate TTB officer concludes that the qualified approval or denial was correct, a copy of the application, marked “appeal denied,” must be returned to the applicant, with an explanation of the decision and the specific laws or regulations relied upon in qualifying or denying the application. If the appropriate TTB officer concludes that the certificate of label approval, certificate of exemption from label approval, or distinctive liquor bottle application should be approved without qualification, the applicant may resubmit TTB Form 5100.31 and the certificate will be issued.
(b) *Time limits for decision after second appeal.* Within 90 days of receipt of the second appeal, the appropriate TTB officer must notify the appellant whether the appeal has been granted or denied. If an applicant requests an informal conference as part of an appeal, as authorized in [§ 13.71](/current/title-27/section-13.71), the 90-day period will begin 10 days after the date of the conference to allow for consideration of any written arguments, facts or evidence submitted after the conference. The appropriate TTB officer may extend this period of time once, by an additional 90 days, if he or she finds that unusual circumstances require additional time to consider the unique issues presented by an appeal. If the appropriate TTB officer extends the time period, he or she must notify the applicant by letter, briefly explaining the issues presented by the label. The decision made on the second appeal shall be the final decision of TTB.
(c) *Judicial review.* An appeal to the appropriate TTB officer is required prior to application to the Federal courts for review of any denial or qualification of an application.
\[T.D. ATF-406, [64 FR 2129](https://www.federalregister.gov/citation/64-FR-2129), Jan. 13, 1999; T.D. ATF-406a, [64 FR 10949](https://www.federalregister.gov/citation/64-FR-10949), Mar. 8, 1999, as amended by T.D. ATF-449, [66 FR 19086](https://www.federalregister.gov/citation/66-FR-19086), Apr. 13, 2001]
## Subpart D—Revocations of Specific Certificates
#### § 13.41 Authority to revoke certificates.
Certificates of label approval, certificates of exemption from label approval, and distinctive liquor bottle approvals, previously approved on TTB Form 5100.31, may be revoked by the appropriate TTB officer upon a finding that the label or bottle at issue is not in compliance with the applicable laws or regulations.
#### § 13.42 Notice of proposed revocation.
Except as provided in [§ 13.51](/current/title-27/section-13.51), when the appropriate TTB officer determines that a certificate of label approval, certificate of exemption from label approval, or distinctive liquor bottle approval has been issued for a label or bottle that is not in compliance with the laws or regulations, he or she must issue to the certificate holder a notice of proposed revocation. The notice must set forth the basis for the proposed revocation and must provide the certificate holder with 45 days from the date of receipt of the notice to present written arguments or evidence why the revocation should not occur.
#### § 13.43 Decision after notice of proposed revocation.
(a) *Decision.* After considering any written arguments or evidence presented by the certificate holder, the appropriate TTB officer must issue a decision. If the decision is to revoke the certificate, a letter must be sent to the holder explaining the revocation of the certificate, and the specific laws or regulations relied upon in determining that the label or bottle was not in conformance with law or regulations. If the decision is to withdraw the proposed revocation, a letter of explanation must be sent.
(b) *Time limits for decision.* Within 90 days of receipt of written arguments or evidence from the certificate holder, the appropriate TTB officer shall notify the appellant of his or her decision. If a certificate holder requests an informal conference as part of an appeal, as authorized in [§ 13.71](/current/title-27/section-13.71), the 90-day period will begin 10 days after the date of the conference to allow for consideration of any written arguments, facts or evidence submitted after the conference. The appropriate TTB officer may extend this period of time once by an additional 90 days if he or she finds that unusual circumstances require additional time to consider the issues presented by a proposed revocation. If the appropriate TTB officer extends the time period, he or she must notify the applicant by letter, along with a brief explanation of the issues under consideration.
#### § 13.44 Appeal of revocation.
(a) *Filing of appeal.* A certificate holder who wishes to appeal the decision to revoke a certificate of label approval, certificate of exemption from label approval, or distinctive liquor bottle approval, may file a written appeal setting forth why the holder believes that the decision was erroneous. The appeal must be filed with the appropriate TTB officer within 45 days after the date of receipt of the decision to revoke a certificate of label approval, certificate of exemption from label approval, or distinctive liquor bottle approval.
(b) *Judicial review.* An appeal to the appropriate TTB officer is required prior to application to the Federal courts for review of any revocation of a certificate.
\[T.D. ATF-449, [66 FR 19086](https://www.federalregister.gov/citation/66-FR-19086), Apr.13, 2001]
#### § 13.45 Final decision after appeal.
(a) *Issuance of decision.* After considering any written arguments or evidence presented by the certificate holder or the holder's representative, the appropriate TTB officer must issue a final decision. If the decision is to revoke the certificate of label approval, certificate of exemption from label approval, or distinctive liquor bottle approval, a letter must be issued explaining the basis for the revocation, and the specific laws or regulations relied upon in determining that the label or bottle was not in conformance with law or regulations. If the decision is to withdraw the proposed revocation, a letter explaining the decision must be sent.
(b) *Time limits for decision.* Within 90 days of receipt of an appeal, the appropriate TTB officer must notify the holder whether the appeal has been granted or denied. If a certificate holder requests an informal conference as part of an appeal, as authorized in [§ 13.71](/current/title-27/section-13.71), the 90-day period will begin 10 days after the date of the conference to allow for consideration of any written arguments, facts or evidence submitted after the conference. The appropriate TTB officer may extend this period of time once by an additional 90 days if he or she finds that unusual circumstances require additional time to consider the issues presented by an appeal. If the appropriate TTB officer extends the period, he or she must notify the holder by letter, briefly explaining the issues presented by the label. The final decision after appeal will be the final decision of TTB.
\[T.D. ATF-406, [64 FR 2129](https://www.federalregister.gov/citation/64-FR-2129), Jan. 13, 1999, as amended by T.D. ATF-449, [66 FR 19086](https://www.federalregister.gov/citation/66-FR-19086), Apr. 13, 2001]
## Subpart E—Revocation by Operation of Law or Regulation
#### § 13.51 Revocation by operation of law or regulation.
TTB will not individually notify all holders of certificates of label approval, certificates of exemption from label approval, or distinctive liquor bottle approvals that their approvals have been revoked if the revocation occurs by operation of either TTB-administered law or regulation or applicable law or regulation of other agencies. If changes in labeling or other requirements are made as a result of amendments or revisions to the law or regulations, the certificate holder must voluntarily surrender all certificates that are no longer in compliance. The holder must submit applications for new certificates in compliance with the new requirements, unless TTB determines that new applications are not necessary. If a new application is unnecessary, it is the responsibility of the certificate holder to ensure that labels are in compliance with their requirements of the new regulations or law.
\[T.D. ATF-406, [64 FR 2129](https://www.federalregister.gov/citation/64-FR-2129), Jan. 13, 1999, as amended by T.D. ATF-483, [67 FR 62858](https://www.federalregister.gov/citation/67-FR-62858), Oct. 8, 2002]
#### § 13.52 Notice of revocation.
If TTB determines that a certificate holder is still using a certificate of label approval, certificate of exemption from label approval, or distinctive liquor bottle approval that is no longer in compliance due to amendments or revisions in the law or regulations, the appropriate TTB officer will notify the certificate holder in writing that the subject certificate has been revoked by operation of law or regulations, with a brief description of the grounds for such revocation.
#### § 13.53 Appeal of notice of revocation.
Within 45 days after the date of receipt of a notice of revocation by operation of law or regulations, the certificate holder may file a written appeal with the appropriate TTB officer. The appeal should set forth the reasons why the certificate holder believes that the regulation or law at issue does not require the revocation of the certificate.
#### § 13.54 Decision after appeal.
(a) *Issuance of decision.* After considering all written arguments and evidence submitted by the certificate holder, the appropriate TTB officer must issue a final decision regarding the revocation by operation of law or regulation of the certificate. If the decision is that the law or regulation at issue requires the revocation of the certificate of label approval, certificate of exemption from label approval, or distinctive liquor bottle approval, a letter must be issued explaining the basis for the revocation, and citing the specific laws or regulations which required the revocation of the certificate. If the decision is that the law or regulation at issue does not require the revocation of such certificate, a letter explaining the decision must be sent to the certificate holder. The decision after appeal will be the final decision of the TTB.
(b) *Time limits for decision.* Within 90 days of receipt of an appeal, the appropriate TTB officer must notify the holder whether the appeal has been granted or denied. If a certificate holder requests an informal conference as part of an appeal, as authorized in [§ 13.71](/current/title-27/section-13.71), the 90-day period will begin 10 days after the date of the conference to allow for consideration of any written arguments, facts or evidence submitted after the conference. The appropriate TTB officer may extend this period of time once by an additional 90 days if he or she finds that unusual circumstances require additional time to consider the issues presented by an appeal. If the appropriate TTB officer extends the period, he or she must notify the holder by letter, briefly explaining the issues presented by the label. The decision of the appropriate TTB officer shall be the final decision of the TTB.
\[T.D. ATF-406, [64 FR 2129](https://www.federalregister.gov/citation/64-FR-2129), Jan. 13, 1999, as amended by T.D. ATF-449, [66 FR 19086](https://www.federalregister.gov/citation/66-FR-19086), Apr. 13, 2001]
## Subpart F—Miscellaneous
#### § 13.61 Publicity of information.
(a) *Pending and denied applications* —
(1) *General.* Pending and denied applications for certificates of label approval, certificates of exemption from label approval, or distinctive liquor bottle approvals are treated as proprietary information, unless the applicant or certificate holder provides written authorization to release such information.
(2) *Labels that make organic claims.* TTB will disclose applications for approval of labels that make organic claims to the appropriate office of the United States Department of Agriculture to assure such labels comply with National Organic Program rules.
(b) *Approved applications.* The appropriate TTB officer shall cause to be maintained in the TTB public reading room for public inspection, a copy of each approved application for certificate of label approval, certificate of exemption from label approval, or distinctive liquor bottle approval. These documents may be viewed during business hours at 1310 G Street NW., Washington, DC, or by viewing the Public COLA Registry on the TTB Web site at (*[https://www.ttb.gov](https://www.ttb.gov)*).
(c) *Revoked certificates.* If an approved certificate is subsequently revoked, the record of the approved application will remain on file for public inspection, but the index will be annotated to show it was revoked.
(d) *Further disclosure of information on denied or revoked certificates.* If an applicant whose application is pending or has been denied, or a holder of a revoked certificate of label approval, certificate of exemption from label approval, or distinctive liquor bottle approval, issues public statements concerning TTB action in connection with such application or certificate, then TTB may issue a statement to clarify its position or correct any misstatements of fact, including a disclosure of information contained on the application or certificate of label approval, certificate of exemption from label approval, or distinctive liquor bottle approval.
\[T.D. ATF-406, [64 FR 2129](https://www.federalregister.gov/citation/64-FR-2129), Jan. 13, 1999, as amended by T.D. ATF-483, [67 FR 62859](https://www.federalregister.gov/citation/67-FR-62859), Oct. 8, 2002; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 13.62 Third-party comment on certificates.
When a third party (such as foreign government, another Federal agency, a State agency, an industry association, a competitor of a certificate holder, a consumer or consumer group, or any other interested person) wishes to comment on an approved certificate of label approval, certificate of exemption from label approval, or distinctive liquor bottle approval, such comments should be submitted in writing to the appropriate TTB officer who will review the subject of the comment. If the comment raises an issue that is outside the scope of TTB's statutory or regulatory authority, or the appropriate TTB officer determines that the certificate is in compliance with applicable law and regulations, the commenter will be informed that no further action will be taken. If the appropriate TTB officer determines that the commenter has raised a valid issue that TTB has authority to address, he or she will initiate appropriate action. The appropriate TTB officer may, in his or her discretion, notify the commenter as to the action being taken by TTB with respect to the certificate.
\[T.D. ATF-449, [66 FR 19086](https://www.federalregister.gov/citation/66-FR-19086), Apr. 13, 2001]
#### § 13.71 Informal conferences.
(a) *General.* As part of a timely filed written appeal of a notice of denial, a notice of proposed revocation, or a decision to revoke a certificate, an applicant or certificate holder may file a written request for an informal conference with the appropriate TTB officer deciding the appeal.
(b) *Informal conference procedures.* The appropriate TTB officer and the applicant or certificate holder will agree upon a date for an informal conference. The informal conference is for purposes of discussion only, and no transcript shall be made. If the applicant or certificate holder wishes to rely upon arguments, facts, or evidence presented at the informal conference, he or she has 10 days after the date of the conference to incorporate such arguments, facts, or evidence in a written submission to the appropriate TTB officer.
\[T.D. ATF-449, [66 FR 19086](https://www.federalregister.gov/citation/66-FR-19086), Apr. 13, 2001]
#### § 13.72 Effective dates of revocations.
(a) *Effective dates* —
(1) *Revocation of specific certificates.* A written decision to revoke a certificate becomes effective 60 days after the date of the decision.
(2) *Revocation by operation of law or regulation.* If a certificate is revoked by operation of law or regulation, the revocation becomes effective on the effective date of the change in law or regulation with which the certificate does not comply, or if a separate label compliance date is given, on that date.
(b) *Use of certificate during period of appeal.* If a certificate holder files a timely appeal after receipt of a decision to revoke a certificate pursuant to [§ 13.44](/current/title-27/section-13.44), the holder may continue to use the certificate at issue until the effective date of a final decision issued by the appropriate TTB officer. However, the effective date of a notice of revocation by operation of law or regulations, issued pursuant to [§ 13.52](/current/title-27/section-13.52), is not stayed pending the appeal.
\[T.D. ATF-406, [64 FR 2129](https://www.federalregister.gov/citation/64-FR-2129), Jan. 13, 1999, as amended by T.D. ATF-449, [66 FR 19086](https://www.federalregister.gov/citation/66-FR-19086), Apr. 13, 2001]
#### § 13.73 Effect of revocation.
On and after the effective date of a revocation of a certificate of label approval, certificate or exemption from label approval, or distinctive liquor bottle approval, the label or distinctive liquor bottle in question may not be used to bottle or pack distilled spirits, wine or malt beverages, to remove such products from the place where they were bottled or packed, or to remove such products from customs custody for consumption.
#### § 13.74 Surrender of certificates.
On the effective date of a final decision that has been issued to revoke a certificate of label approval, certificate of exemption from label approval, or distinctive liquor bottle approval, the certificate holder must surrender the original of the certificate to TTB for manual cancellation. Regardless of whether the original certificate of label approval, certificate of exemption from label approval, or distinctive liquor bottle approval has been manually canceled or not, the certificate is null and void after the effective date of the revocation. It is a violation of this section for any certificate holder to present a certificate of label approval, certificate of exemption from label approval, or distinctive liquor bottle approval to an official of the United States Government as a valid certificate after the effective date of the revocation of the certificate if the certificate holder has been previously notified that such certificate has been revoked by TTB.
\[T.D. ATF-406, [64 FR 2129](https://www.federalregister.gov/citation/64-FR-2129), Jan. 13, 1999, as amended by T.D. ATF-449, [66 FR 19086](https://www.federalregister.gov/citation/66-FR-19086), Apr. 13, 2001]
#### § 13.75 Evidence of receipt by TTB.
If there is a time limit on TTB action that runs from TTB's receipt of a document, the date of receipt may be established by a certified mail receipt or equivalent written acknowledgment secured by a commercial delivery service or by a written acknowledgment of personal delivery. In the absence of proof of receipt, the date the document is logged in by TTB will be considered the date of receipt.
#### § 13.76 Service on applicant or certificate holder.
(a) *Method of service.* TTB must serve notices of denial on an applicant by first class mail, or by personal delivery. TTB must serve notices of proposed revocation and notices of revocation on a certificate holder by certified mail, return receipt requested, by a commercial delivery service that will provide an equivalent written acknowledgment from the recipient, or by personal delivery.
(b) *Date of receipt.* If there is a time limit on a certificate holder's action that runs from the holder's receipt of a document, the date of receipt may be established by a certified mail receipt, an equivalent written acknowledgment secured by a commercial delivery service, or by a written acknowledgment of personal delivery.
(c) *Person to be served.* When service is by mail or other commercial delivery service, a copy of the document must be sent to the applicant or certificate holder at the address stated in the application or at the last known address. If authorized by the applicant or certificate holder, the copy of the document may be mailed to a designated representative. If service is by personal delivery, a copy of the document must be delivered to the certificate holder or to a designated representative. In the case of a corporation, partnership, or association, personal delivery may be made to an officer, manager, or general agent thereof, or to the attorney of record.
#### § 13.81 Representation before TTB.
An applicant or certificate holder may be represented by an attorney, certified public accountant, or other person recognized to practice before TTB as provided in [31 CFR part 8](/current/title-31/part-8) (Practice Before the Bureau of Alcohol, Tobacco and Firearms). The applicable requirements of [26 CFR 601.521](/current/title-26/section-601.521) through [601.527](/current/title-26/section-601.527) (conference and practice requirements for alcohol, tobacco, and firearms activities) shall apply.
#### § 13.91 Computation of time.
In computing any period of time prescribed or allowed by this part, the day of the act, event or default after which the designated period of time is to run, is not counted. The last day of the period to be computed is counted, unless it is a Saturday, Sunday, or legal holiday, in which case the period runs until the next day that is not a Saturday, Sunday, or legal holiday. Papers or documents that are required or permitted to be filed under this part must be received at the appropriate office within the filing time limits, if any.
#### § 13.92 Extensions.
An applicant or certificate holder may apply to the appropriate TTB officer deciding the appeal for an extension of any time limit prescribed in this part. The time limit may be extended if TTB agrees the request is reasonable.
\[T.D. ATF-406, [64 FR 2129](https://www.federalregister.gov/citation/64-FR-2129), Jan. 13, 1999, as amended by T.D. ATF-449, [66 FR 19086](https://www.federalregister.gov/citation/66-FR-19086), Apr. 13, 2001]
## Subpart G—Appeals Concerning Other Agencies' Rules
#### § 13.101 Appeals concerning use of the term “organic.”
To appeal a determination that an organic claim on a label does not comply with the National Organic Program rules in [7 CFR part 205](/current/title-7/part-205), contact the Program Manager, National Organic Program (NOP), Agricultural Marketing Service, United States Department of Agriculture. See the NOP appeal process in [7 CFR 205.680](/current/title-7/section-205.680).
\[T.D. ATF-483, [67 FR 62859](https://www.federalregister.gov/citation/67-FR-62859), Oct. 8, 2002]
# Part 16 — ALCOHOLIC BEVERAGE HEALTH WARNING STATEMENT
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-16
Full text of 27 CFR Part 16 — ALCOHOLIC BEVERAGE HEALTH WARNING STATEMENT. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 16—ALCOHOLIC BEVERAGE HEALTH WARNING STATEMENT
#### Authority:
[27 U.S.C. 205](https://www.govinfo.gov/link/uscode/27/205), [215](https://www.govinfo.gov/link/uscode/27/215), [218](https://www.govinfo.gov/link/uscode/27/218); [28 U.S.C. 2461 note](https://www.govinfo.gov/link/uscode/28/2461).
#### Source:
T.D. ATF-294, [55 FR 5421](https://www.federalregister.gov/citation/55-FR-5421), Feb. 14, 1990, unless otherwise noted.
## Subpart A—Scope
#### § 16.1 General.
The regulations in this part relate to a health warning statement on labels of containers of alcoholic beverages.
#### § 16.2 Territorial extent.
This part applies to the several States of the United States, the District of Columbia, and the territories and possessions of the United States.
## Subpart B—Definitions
#### § 16.10 Meaning of terms.
As used in this part, unless the context otherwise requires, terms shall have the meaning ascribed in this section.
*Act.* The Alcoholic Beverage Labeling Act of 1988.
*Alcoholic beverage.* Includes any beverage in liquid form which contains not less than one-half of one percent (.5%) of alcohol by volume and is intended for human consumption.
*Bottle.* To fill a container with an alcoholic beverage and to seal such container.
*Bottler.* A person who bottles an alcoholic beverage.
*Brand label.* The label carrying, in the usual distinctive design, the brand name of the alcoholic beverage.
*Container.* The innermost sealed container, irrespective of the material from which made, in which an alcoholic beverage is placed by the bottler and in which such beverage is offered for sale to members of the general public.
*Health.* Includes, but is not limited to, the prevention of accidents.
*Person.* Any individual, partnership, joint-stock company, business trust, association, corporation, or any other business or legal entity, including a receiver, trustee, or liquidating agent, and also includes any State, any State agency, or any officer or employee thereof.
*Sale and distribution.* Includes sampling or any other distribution not for sale.
*State.* Includes any political subdivision of any State, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, the Virgin Islands, American Samoa, Wake Island, the Midway Islands, Kingman Reef, or Johnston Island.
*State law.* Includes State statutes, regulations and principles and rules having the force of law.
*TTB.* The Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*United States.* The several States, the District of Columbia, the Commonwealth of Puerto Rico, the Commonwealth of the Northern Mariana Islands, Guam, the Virgin Islands, American Samoa, Wake Island, the Midway Islands, Kingman Reef, and Johnston Island.
*Use of other terms.* Any other term defined in the Alcoholic Beverage Labeling Act and used in this part shall have the same meaning as assigned to it by the Act.
\[T.D. ATF-294, [55 FR 5421](https://www.federalregister.gov/citation/55-FR-5421), Feb. 14, 1990, as amended by T.D. ATF-425, [65 FR 11892](https://www.federalregister.gov/citation/65-FR-11892), Mar. 7, 2000; T.D. TTB-44, [71 FR 16925](https://www.federalregister.gov/citation/71-FR-16925), Apr. 4, 2006]
## Subpart C—Health Warning Statement Requirements for Alcoholic Beverages
#### § 16.20 General.
(a) *Domestic products.* On and after November 18, 1989, no person shall bottle for sale or distribution in the United States any alcoholic beverage unless the container of such beverage bears the health warning statement required by [§ 16.21](/current/title-27/section-16.21). It is the responsibility of the bottler to provide, upon request, sufficient evidence to establish that the alcoholic beverage was bottled prior to November 18, 1989.
(b) *Imported products.* On and after November 18, 1989, no person shall import for sale or distribution in the United States any alcoholic beverage unless the container of such beverage bears the health warning statement required by [§ 16.21](/current/title-27/section-16.21). This requirement does not apply to alcoholic beverages that were bottled in the foreign country prior to November 18, 1989. It is the responsibility of the importer to provide, upon request, sufficient evidence to establish that the alcoholic beverage was bottled prior to such date.
#### § 16.21 Mandatory label information.
There shall be stated on the brand label or separate front label, or on a back or side label, separate and apart from all other information, the following statement:
GOVERNMENT WARNING: (1) According to the Surgeon General, women should not drink alcoholic beverages during pregnancy because of the risk of birth defects.
(2) Consumption of alcoholic beverages impairs your ability to drive a car or operate machinery, and may cause health problems.
(Authority: Sec. 8001, Pub. L. 100-690, 102 Stat. 4181, [27 U.S.C. 215](https://www.govinfo.gov/link/uscode/27/215))
#### § 16.22 General requirements.
(a) *Legibility.*
(1) All labels shall be so designed that the statement required by [§ 16.21](/current/title-27/section-16.21) is readily legible under ordinary conditions, and such statement shall be on a contrasting background.
(2) The first two words of the statement required by [§ 16.21](/current/title-27/section-16.21), i.e., “GOVERNMENT WARNING,” shall appear in capital letters and in bold type. The remainder of the warning statement may not appear in bold type.
(3) The letters and/or words of the statement required by [§ 16.21](/current/title-27/section-16.21) shall not be compressed in such a manner that the warning statement is not readily legible.
(4) The warning statement required by [§ 16.21](/current/title-27/section-16.21) shall appear in a maximum number of characters (*i.e.*, letters, numbers, marks) per inch, as follows:
| Minimum required type size for warning statement | Maximum number of characters per inch |
| ------------------------------------------------ | ------------------------------------- |
| 1 millimeter | 40 |
| 2 millimeters | 25 |
| 3 millimeters | 12 |
(b) *Size of type.*
(1) Containers of 237 milliliters (8 fl. oz.) or less. The mandatory statement required by [§ 16.21](/current/title-27/section-16.21) shall be in script, type, or printing not smaller than 1 millimeter.
(2) Containers of more than 237 milliliters (8 fl. oz.) up to 3 liters (101 fl. oz.). The mandatory statement required by [§ 16.21](/current/title-27/section-16.21) shall be in script, type, or printing not smaller than 2 millimeters.
(3) Containers of more than 3 liters (101 fl. oz.). The mandatory statement required by [§ 16.21](/current/title-27/section-16.21) shall be in script, type, or printing not smaller than 3 millimeters.
(c) *Labels firmly affixed.* Labels bearing the statement required by [§ 16.21](/current/title-27/section-16.21) which are not an integral part of the container shall be affixed to containers of alcoholic beverages in such manner that they cannot be removed without thorough application of water or other solvents.
\[T.D. ATF-294, [55 FR 5421](https://www.federalregister.gov/citation/55-FR-5421), Feb. 14, 1990, as amended by T.D. 372, [61 FR 20723](https://www.federalregister.gov/citation/61-FR-20723), May 8, 1996; T.D. TTB-91, [76 FR 5477](https://www.federalregister.gov/citation/76-FR-5477), Feb. 1, 2011]
## Subpart D—General Provisions
#### § 16.30 Certificates of label approval.
Certificates of label/bottle approval or certificates of exemption from label approval on TTB Form 5100.31, issued pursuant to [parts 4](/current/title-27/part-4), [5](/current/title-27/part-5), and [7 of this chapter](/current/title-27/part-7) for imported and domestically bottled wine, distilled spirits, and malt beverages, shall not be approved with respect to such beverage bottled on and after November 18, 1989, unless the label for the container of such beverage bears the health warning statement required.
\[T.D. ATF-294, [55 FR 5421](https://www.federalregister.gov/citation/55-FR-5421), Feb. 14, 1990, as amended by T.D. ATF-425, [65 FR 11892](https://www.federalregister.gov/citation/65-FR-11892), Mar. 7, 2000]
#### § 16.31 Exports.
The regulations in this part shall not apply with respect to alcoholic beverages that are produced, imported, bottled, or labeled for export from the United States, or for delivery to a vessel or aircraft, as supplies, for consumption beyond the jurisdiction of the internal revenue laws of the United States: *Provided,* That this exemption shall not apply with respect to alcoholic beverages that are produced, imported, bottled, or labeled for sale, distribution, or shipment to members or units of the Armed Forces of the United States, including those located outside the United States.
#### § 16.32 Preemption.
No statement relating to alcoholic beverages and health, other than the statement required by [§ 16.21](/current/title-27/section-16.21), shall be required under State law to be placed on any container of an alcoholic beverage, or on any box, carton, or other package, irrespective of the material from which made, that contains such a container.
#### § 16.33 Civil penalties; adjustments.
(a) *General.* The Act provides that any person who violates the provisions of this part shall be subject to a civil penalty of not more than \$10,000. However, pursuant to the provisions of the Federal Civil Penalties Inflation Adjustment Act of 1990, as amended, this civil penalty is subject to periodic cost-of-living adjustment. Accordingly, any person who violates the provisions of this part shall be subject to a civil penalty of not more than the amount listed at *[https://www.ttb.gov/laws-regulations-and-public-guidance/labeling-act-penalty](https://www.ttb.gov/laws-regulations-and-public-guidance/labeling-act-penalty)* Each day shall constitute a separate offense.
(b) *Notice of cost-of-living adjustment.* TTB will provide notice in the Federal Register and at the Web site referenced in [paragraph (a)](/current/title-27/section-16.33#p-16.33\(a\)) of this section of cost-of-living adjustments to the civil penalty for violations of this part.
(c) *Applicability of increases in penalty.* Any increase in the penalty described in [paragraph (a)](/current/title-27/section-16.33#p-16.33\(a\)) of this section shall apply only to penalties, including those whose associated violation predated such an increase, which are assessed after the date the increase takes effect. An increase will take effect on the date a notice is published in the Federal Register announcing the increase. The effective date of the increase also will be listed at the Web site in [paragraph (a)](/current/title-27/section-16.33#p-16.33\(a\)) of this section.
\[T.D.TTB-138, [81 FR 43065](https://www.federalregister.gov/citation/81-FR-43065), July 1, 2016, as amended by T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
# Part 17 — DRAWBACK ON TAXPAID DISTILLED SPIRITS USED IN MANUFACTURING NONBEVERAGE PRODUCTS
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-17
Full text of 27 CFR Part 17 — DRAWBACK ON TAXPAID DISTILLED SPIRITS USED IN MANUFACTURING NONBEVERAGE PRODUCTS. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 17—DRAWBACK ON TAXPAID DISTILLED SPIRITS USED IN MANUFACTURING NONBEVERAGE PRODUCTS
#### Authority:
[26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010), [5111-5114](https://www.govinfo.gov/link/uscode/26/5111), [5123](https://www.govinfo.gov/link/uscode/26/5123), [5206](https://www.govinfo.gov/link/uscode/26/5206), [5273](https://www.govinfo.gov/link/uscode/26/5273), [6065](https://www.govinfo.gov/link/uscode/26/6065), [6091](https://www.govinfo.gov/link/uscode/26/6091), [6109](https://www.govinfo.gov/link/uscode/26/6109), [7213](https://www.govinfo.gov/link/uscode/26/7213), [7652](https://www.govinfo.gov/link/uscode/26/7652), [7805](https://www.govinfo.gov/link/uscode/26/7805); [31 U.S.C. 9301](https://www.govinfo.gov/link/uscode/31/9301), [9303](https://www.govinfo.gov/link/uscode/31/9303), [9304](https://www.govinfo.gov/link/uscode/31/9304), [9306](https://www.govinfo.gov/link/uscode/31/9306).
#### Source:
T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, unless otherwise noted.
#### Editorial Note:
Nomenclature changes to part 17 appear by T.D. ATF-436, [66 FR 5470](https://www.federalregister.gov/citation/66-FR-5470), [5471](https://www.federalregister.gov/citation/66-FR-5471), Jan. 19, 2001.
## Subpart A—General Provisions
#### § 17.1 Scope of regulations.
The regulations in this part apply to the manufacture of medicines, medicinal preparations, food products, flavors, flavoring extracts, and perfume that are unfit for beverage use and are made with taxpaid distilled spirits. The regulations cover the following topics: obtaining drawback of internal revenue tax on distilled spirits used in the manufacture of nonbeverage products; and bonds, claims, formulas and samples, losses, and records to be kept pertaining to the manufacture of nonbeverage products.
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. TTB-79, [74 FR 37401](https://www.federalregister.gov/citation/74-FR-37401), July 28, 2009]
#### § 17.2 Forms prescribed.
(a) The appropriate TTB officer is authorized to prescribe all forms, including bonds and records, required by this part. All of the information called for in each form shall be furnished as indicated by the headings on the form and the instructions on or pertaining to the form. In addition, information called for in each form shall be furnished as required by this part. The form will be filed in accordance with the instructions for the form.
(b) Forms prescribed by this part are available for printing through the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. ATF-436, [66 FR 5470](https://www.federalregister.gov/citation/66-FR-5470), Jan. 19, 2001; T.D. TTB-44, [71 FR 16925](https://www.federalregister.gov/citation/71-FR-16925), Apr. 4, 2006; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 17.3 Alternate methods or procedures.
(a) *General.* The appropriate TTB officer may approve the use of an alternate method or procedure in lieu of a method or procedure prescribed in this part if he or she finds that—
(1) Good cause has been shown for the use of the alternate method or procedure;
(2) The alternate method or procedure is within the purpose of, and consistent with the effect intended by, the method or procedure prescribed by this part, and affords equivalent security to the revenue; and
(3) The alternate method or procedure will not be contrary to any provision of law, and will not result in any increase in cost to the Government or hinder the effective administration of this part.
(b) *Application.* A letter of application to employ an alternate method or procedure must be submitted to the appropriate TTB officer. The application shall specifically describe the proposed alternate method or procedure, and shall set forth the reasons therefor.
(c) *Approval.* No alternate method or procedure shall be employed until the application has been approved by the appropriate TTB officer. The appropriate TTB officer shall not approve any alternate method relating to the giving of any bond or to the assessment, payment, or collection of any tax. The manufacturer shall, during the period of authorization, comply with the terms of the approved application and with any conditions thereto stated by the appropriate TTB officer in the approval. Authorization for any alternate method or procedure may be withdrawn by written notice from the Administrator whenever in his or her judgment the revenue is jeopardized, the effective administration of this part is hindered, or good cause for the authorization no longer exists. The manufacturer shall retain, in the records required by [§ 17.170](/current/title-27/section-17.170), any authorization given by the appropriate TTB officer under this section.
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. ATF-436, [66 FR 5470](https://www.federalregister.gov/citation/66-FR-5470), Jan. 19, 2001]
#### § 17.4 OMB control numbers assigned under the Paperwork Reduction Act.
(a) *Purpose.* This section collects and displays the control numbers assigned to the information collection requirements of this part by the Office of Management and Budget under the Paperwork Reduction Act of 1995.
(b) *OMB control number 1513-0013.* OMB control number 1513-0013 is assigned to the following section in this part: [§ 17.106](/current/title-27/section-17.106).
(c) *OMB control number 1513-0014.* OMB control number 1513-0014 is assigned to the following sections in this part: [§§ 17.6](/current/title-27/section-17.6) and [17.105](/current/title-27/section-17.105).
(d) *OMB control number 1513-0021.* OMB control number 1513-0021 is assigned to the following sections in this part: [§§ 17.121](/current/title-27/section-17.121), [17.126](/current/title-27/section-17.126), [17.127](/current/title-27/section-17.127), [17.132](/current/title-27/section-17.132), and [17.136](/current/title-27/section-17.136).
(e) *OMB control number 1513-0030.* OMB control number 1513-0030 is assigned to the following sections in this part: [§§ 17.142](/current/title-27/section-17.142), [17.145](/current/title-27/section-17.145), and [17.146](/current/title-27/section-17.146).
(f) *OMB control number 1513-0036.* OMB control number 1513-0036 is assigned to the following section in this part: [§ 17.6](/current/title-27/section-17.6).
(g) *OMB control number 1513-0072.* OMB control number 1513-0072 is assigned to the following sections in this part: [§§ 17.3](/current/title-27/section-17.3), [17.111](/current/title-27/section-17.111), [17.112](/current/title-27/section-17.112), [17.122](/current/title-27/section-17.122), [17.123](/current/title-27/section-17.123), [17.124](/current/title-27/section-17.124), [17.125](/current/title-27/section-17.125), [17.143](/current/title-27/section-17.143), [17.168(a)](/current/title-27/section-17.168#p-17.168\(a\)), [17.183](/current/title-27/section-17.183), and [17.187](/current/title-27/section-17.187).
(h) *OMB control number 1513-0073.* OMB control number 1513-0073 is assigned to the following sections in this part: [§§ 17.161](/current/title-27/section-17.161), [17.162](/current/title-27/section-17.162), [17.163](/current/title-27/section-17.163), [17.164](/current/title-27/section-17.164), [17.165](/current/title-27/section-17.165), [17.166](/current/title-27/section-17.166), [17.167](/current/title-27/section-17.167), [17.168(b)](/current/title-27/section-17.168#p-17.168\(b\)), [17.169](/current/title-27/section-17.169), [17.170](/current/title-27/section-17.170), [17.182](/current/title-27/section-17.182), and [17.186](/current/title-27/section-17.186).
(i) *OMB control number 1513-0088.* OMB control number 1513-0088 is assigned to the following section in this part: [§ 17.23](/current/title-27/section-17.23).
(j) *OMB control number 1513-0098.* OMB control number 1513-0098 is assigned to the following sections in this part: [§§ 17.147](/current/title-27/section-17.147) and [17.182](/current/title-27/section-17.182).
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. TTB-79, [74 FR 37401](https://www.federalregister.gov/citation/74-FR-37401), July 28, 2009; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 17.5 Products manufactured in Puerto Rico or the Virgin Islands.
For additional provisions regarding drawback on distilled spirits contained in medicines, medicinal preparations, food products, flavors, flavoring extracts, or perfume which are unfit for beverage purposes and which are brought into the United States from Puerto Rico or the U.S. Virgin Islands, see part 26, subparts I and Ob, of this chapter.
\[T.D. ATF-436, [66 FR 5470](https://www.federalregister.gov/citation/66-FR-5470), [5471](https://www.federalregister.gov/citation/66-FR-5471), Jan. 19, 2001, as amended by T.D. ATF-459, [66 FR 38549](https://www.federalregister.gov/citation/66-FR-38549), July 25, 2001]
#### § 17.6 Signature authority.
No claim, bond, tax return, or other required document executed by a person as an agent or representative is acceptable unless a power of attorney or other proper notification of signature authority has been filed with the TTB office where the required document must be filed. The appropriate TTB officer with whom the claim or other required document is filed may, when he or she considers it necessary, require additional evidence of the authority of the agent or representative to execute the document. Except as otherwise provided by this part, powers of attorney shall be filed on TTB Form 1534 (5000.8), Power of Attorney. Notification of signature authority of partners, officers, or employees may be given by filing a copy of corporate or partnership documents, minutes of a meeting of the board of directors, etc. For corporate officers or employees, TTB Form 5100.1, Signing Authority for Corporate Officials, may be used. For additional provisions regarding powers of attorney, see [§ 17.105](/current/title-27/section-17.105) and [26 CFR part 601, subpart E](/current/title-26/part-601/subpart-E).
#### § 17.7 Delegations of the Administrator.
The regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.17, Delegation of the Administrator's Authorities in [27 CFR Part 17](/current/title-27/part-17), Drawback on Taxpaid Distilled Spirits Used in Manufacturing Nonbeverage Products. You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. ATF-436, [66 FR 5470](https://www.federalregister.gov/citation/66-FR-5470), Jan. 19, 2001, as amended by T.D. TTB-44, [71 FR 16926](https://www.federalregister.gov/citation/71-FR-16926), Apr. 4, 2006; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
## Subpart B—Definitions
#### § 17.11 Meaning of terms.
As used in this part, unless the context otherwise requires, terms have the meanings given in this section. Words in the plural form include the singular, and vice versa, and words indicating the masculine gender include the feminine. The terms “includes” and “including” do not exclude things not listed which are in the same general class.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.17, Delegation of the Administrator's Authorities in [27 CFR Part 17](/current/title-27/part-17), Drawback on Taxpaid Distilled Spirits Used in Manufacturing Nonbeverage Products.
*Approved,* or *approved for drawback.* When used with reference to products and their formulas, this term means that drawback may be claimed on eligible spirits used in such products in accordance with this part.
*CFR.* The Code of Federal Regulations.
*Distilled spirits,* or *spirits.* That substance known as ethyl alcohol, ethanol, spirits, or spirits of wine in any form (including all dilutions and mixtures thereof, from whatever source or by whatever process produced).
*Effective tax rate.* The net tax rate, after reduction for any credit allowable under [26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010) for wine and flavor content, at which the tax imposed on distilled spirits by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001) or [7652](https://www.govinfo.gov/link/uscode/26/7652) is paid or determined. For distilled spirits with no wine or flavors content, the effective tax rate equals the rate of tax imposed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001) or [7652](https://www.govinfo.gov/link/uscode/26/7652).
*Eligible,* or *eligible for drawback.* When used with reference to spirits, this term designates taxpaid spirits which have not yet been used in nonbeverage products.
*Filed.* Subject to the provisions of [§§ 70.305](/current/title-27/section-70.305) and [70.306 of this chapter](/current/title-27/section-70.306), a claim for drawback or other document or payment submitted under this part is generally considered to have been “filed” when it is received by the office of the proper Government official; but if an item is mailed timely with postage prepaid, then the United States postmark date is treated as the date of filing.
*Food products.* Includes food adjuncts, such as preservatives, emulsifying agents, and food colorings, which are manufactured and used, or sold for use, in food.
*Intermediate products.* Products to which all three of the following conditions apply: they are made with taxpaid distilled spirits, they have been disapproved for drawback, and they are made by the manufacturer exclusively for its own use in the manufacture of nonbeverage products approved for drawback. However, ingredients treated as unfinished nonbeverage products under [§ 17.127](/current/title-27/section-17.127) are not considered to be intermediate products.
*Medicines.* Includes laboratory stains and reagents for use in medical diagnostic procedures.
*Month.* A calendar month.
*Nonbeverage products.* Medicines, medicinal preparations, food products, flavors, flavoring extracts, or perfume, which are manufactured using taxpaid distilled spirits, and which are unfit for use for beverage purposes.
*Person.* An individual, trust, estate, partnership, association, company, or corporation.
*Proof gallon.* A gallon of liquid at 60 degrees Fahrenheit, which contains 50 percent by volume of ethyl alcohol having a specific gravity of 0.7939 at 60 degrees Fahrenheit (referred to water at 60 degrees Fahrenheit as unity), or the alcoholic equivalent thereof.
*Quarter.* A 3-month period beginning January 1, April 1, July 1, or October 1.
*Recovered spirits.* Taxpaid spirits that have been salvaged, after use in the manufacture of a product or ingredient, so that the spirits are reusable.
*Subject to drawback.* This term is used with reference to spirits. Eligible spirits become “subject to drawback” when they are used in the manufacture of a nonbeverage product. When spirits have become “subject to drawback,” they may be included in the manufacturer's claim for drawback of tax covering the period in which they were first used.
*Tax year.* The period from July l of one calendar year through June 30 of the following year.
*Taxpaid.* When used with respect to distilled spirits, this term shall mean that all taxes imposed on such spirits by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001) or [7652](https://www.govinfo.gov/link/uscode/26/7652) have been determined or paid as provided by law.
*This chapter.* [Chapter I of title 27 of the Code of Federal Regulations](/current/title-27/chapter-I).
*U.S.C.* The United States Code.
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. ATF-436, [66 FR 5470](https://www.federalregister.gov/citation/66-FR-5470), Jan. 19, 2001; T.D. TTB-44, [71 FR 16926](https://www.federalregister.gov/citation/71-FR-16926), Apr. 4, 2006; T.D. TTB-79, [74 FR 37402](https://www.federalregister.gov/citation/74-FR-37402), July 28, 2009]
## Subpart C—Registration
#### Source:
T.D. TTB-79, [74 FR 37402](https://www.federalregister.gov/citation/74-FR-37402), July 28, 2009, unless otherwise noted.
#### § 17.21 Registration.
Every person claiming drawback under this part must register annually as a nonbeverage domestic drawback claimant. Registration will be accomplished when the claimant submits the first drawback claim for each year along with the supporting data required under [subpart G of this part](/current/title-27/part-17/subpart-G). No registration is required for any year in which the claimant does not file a claim for drawback.
#### § 17.22 Employer identification number.
Every person who claims drawback under this part must enter on each claim for drawback filed on TTB Form 5620.8, Claim—Alcohol, Tobacco, and Firearms Taxes, the employer identification number (EIN) assigned by the Internal Revenue Service.
([26 U.S.C. 6109](https://www.govinfo.gov/link/uscode/26/6109), [6723](https://www.govinfo.gov/link/uscode/26/6723))
#### § 17.23 Application for employer identification number.
(a) *Use Form SS-4.* A claimant must obtain an employer identification number (EIN) by filing an application with the Internal Revenue Service (IRS) on IRS Form SS-4. Form SS-4 is available from the local IRS Service Center, from the IRS District Director, the IRS Web site at *[https://www.irs.gov](https://www.irs.gov)* or from the TTB National Revenue Center. The claimant must file this form with IRS in accordance with the instructions on the form.
(b) *One EIN only.* Each claimant must obtain and use only one EIN, regardless of the number of places of business for which a claim is filed under this part.
([26 U.S.C. 6109](https://www.govinfo.gov/link/uscode/26/6109))
\[T.D. TTB-79, [74 FR 37402](https://www.federalregister.gov/citation/74-FR-37402), July 28, 2009, as amended by T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
## Subpart D \[Reserved]
## Subpart E—Bonds and Consents of Sureties
#### § 17.101 Bonds in general.
(a) *Requirement.* A bond must be filed by each person claiming drawback on a monthly basis. Persons who claim drawback on a quarterly basis are not required to file bonds. The bond requirement of this part may be satisfied either by a bond obtained from an authorized surety company or by deposit of collateral security.
(b) *Bond form.* The bond must be prepared and executed on TTB Form 5154.3, Bond for Drawback Under [26 U.S.C. 5111](https://www.govinfo.gov/link/uscode/26/5111), in accordance with the provisions of this part and the instructions printed on the form.
(c) *Bonds executed before July 1, 2008.* On and after July 1, 2008, a reference to [26 U.S.C. 5131-5134](https://www.govinfo.gov/link/uscode/26/5131) in a bond executed on TTB Form 5154.3, Bond for Drawback Under [26 U.S.C. 5131](https://www.govinfo.gov/link/uscode/26/5131), shall be understood to refer to the sections redesignated as [26 U.S.C. 5111-5114](https://www.govinfo.gov/link/uscode/26/5111) by section 11125 of [Public Law 109-59](https://www.govinfo.gov/link/plaw/109/public/59).
(d) *Approval.* The appropriate TTB officer is authorized to approve all bonds and consents of surety required by this part.
\[T.D. TTB, [74 FR 37402](https://www.federalregister.gov/citation/74-FR-37402), July 28, 2009]
#### § 17.102 Amount of bond.
The bond shall be a continuing one, in an amount sufficient to cover the total drawback to be claimed on spirits used during any quarter. However, the amount of any bond shall not exceed $200,000 nor be less than $1,000.
#### § 17.103 Bonds obtained from surety companies.
(a) The bond may be obtained from any surety company authorized by the Secretary of the Treasury to be a surety on Federal bonds. Surety companies so authorized are listed in the current revision of Department of the Treasury Circular 570 (Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies), and subject to such amendatory circulars as may be issued from time to time. Bonds obtained from surety companies are also governed by the provisions of [31 U.S.C. 9304](https://www.govinfo.gov/link/uscode/31/9304), and [31 CFR part 223](/current/title-31/part-223).
(b) A bond executed by two or more surety companies shall be the joint and several liability of the principal and the sureties; however, each surety company may limit its liability, in terms upon the face of the bond, to a definite, specified amount. This amount shall not exceed the limitations prescribed for each surety company by the Secretary, as stated in Department of the Treasury Circular 570. If the sureties limit their liability in this way, the total of the limited liabilities shall equal the required amount of the bond.
(c) Treasury Department Circular 570 is published in the Federal Register annually on the first business day in July, and supplemental changes are published periodically thereafter (see *[https://www.federalregister.gov](https://www.federalregister.gov)*). The most recent circular and any supplemental changes to it may be viewed on the Bureau of the Fiscal Service website (see *[https://fiscal.treasury.gov](https://fiscal.treasury.gov)*).
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 17.104 Deposit of collateral.
Except as otherwise provided by law or regulations, bonds or notes of the United States, or other obligations which are unconditionally guaranteed as to both interest and principal by the United States, may be pledged and deposited by principals as collateral security in lieu of bonds obtained from surety companies. Deposit of collateral security is governed by the provisions of [31 U.S.C. 9303](https://www.govinfo.gov/link/uscode/31/9303), and [31 CFR part 225](/current/title-31/part-225).
(Sec. 1, Pub. L. 97-258, 96 Stat. 1046 ([31 U.S.C. 9301](https://www.govinfo.gov/link/uscode/31/9301), [9303](https://www.govinfo.gov/link/uscode/31/9303)))
#### § 17.105 Filing of powers of attorney.
(a) *Surety companies.* The surety company shall prepare and submit with each bond, and with each consent to changes in the terms of a bond, a power of attorney in accordance with [§ 17.6](/current/title-27/section-17.6), authorizing the agent or officer who executed the bond or consent to act in this capacity on behalf of the surety. The power of attorney shall be prepared on a form provided by the surety company and executed under the corporate seal of the company. If other than a manually signed original is submitted, it shall be accompanied by certification of its validity.
(b) *Principal.* The principal shall execute and file a power of attorney, in accordance with [§ 17.6](/current/title-27/section-17.6), for every person authorized to execute bonds on behalf of the principal.
(Sec. 1, Pub. L. 97-258, 96 Stat. 1047 ([31 U.S.C. 9304](https://www.govinfo.gov/link/uscode/31/9304), [9306](https://www.govinfo.gov/link/uscode/31/9306)))
#### § 17.106 Consents of surety.
The principal and surety shall execute on form TTB F 5000.18, Change in Bond (Consent of Surety), any consents of surety to changes in the terms of bonds. Form TTB F 5000.18 shall be executed with the same formality and proof of authority as is required for the execution of bonds.
\[T.D. TTB-196 [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 17.107 Strengthening bonds.
Whenever the amount of a bond on file and in effect becomes insufficient, the principal may give a strengthening bond in a sufficient amount, provided the surety is the same as on the bond already on file and in effect; otherwise a superseding bond covering the entire liability shall be filed. Strengthening bonds, filed to increase the bond liability of the surety, shall not be construed in any sense to be substitute bonds, and the appropriate TTB officer shall not approve a strengthening bond containing any notation which may be interpreted as a release of any former bond or as limiting the amount of either bond to less than its full amount.
#### § 17.108 Superseding bonds.
(a) The principal on any bond filed pursuant to this part may at any time replace it with a superseding bond.
(b) Executors, administrators, assignees, receivers, trustees, or other persons acting in a fiduciary capacity continuing or liquidating the business of the principal, shall execute and file a superseding bond or obtain the consent of the surety or sureties on the existing bond or bonds.
(c) When, in the opinion of the appropriate TTB officer, the interests of the Government demand it, or in any case where the security of the bond becomes impaired in whole or in part for any reason whatever, the principal shall file a superseding bond. A superseding bond shall be filed immediately in case of the insolvency of the surety. If a bond is found to be not acceptable or for any reason becomes invalid or of no effect, the principal shall immediately file a satisfactory superseding bond.
(d) A bond filed under this section to supersede an existing bond shall be marked by the obligors at the time of execution, “Superseding Bond.” When such a bond is approved, the superseded bond shall be released as to transactions occurring wholly subsequent to the effective date of the superseding bond, and notice of termination of the superseded bond shall be issued, as provided in [§ 17.111](/current/title-27/section-17.111).
### Termination of Bonds
#### § 17.111 General.
(a) Bonds on TTB Form 5154.3 shall be terminated by the appropriate TTB officer, as to liability on drawback allowed after a specified future date, in the following circumstances:
(1) Pursuant to a notice by the surety as provided in [§ 17.112](/current/title-27/section-17.112).
(2) Following approval of a superseding bond, as provided in [§ 17.108](/current/title-27/section-17.108).
(3) Following notification by the principal of an intent to discontinue the filing of claims on a monthly basis.
(b) However, the bond shall not be terminated until all outstanding liability under it has been discharged. Upon termination, the appropriate TTB officer shall mark the bond “canceled,” followed by the date of cancellation, and shall issue a notice of termination of bond. A copy of this notice shall be given to the principal and to each surety.
#### § 17.112 Notice by surety of termination of bond.
A surety on any bond required by this part may at any time, in writing, notify the principal and the appropriate TTB officer in whose office the bond is on file that the surety desires, after a date named, to be relieved of liability under the bond. Unless the notice is withdrawn, in writing, before the date named in it, the notice shall take effect on that date. The date shall not be less than 60 days after the date on which both the notice and proof of service on the principal have been received by the appropriate TTB officer. The surety shall deliver one copy of the notice to the principal and the original to the appropriate TTB officer. The surety shall also file with the appropriate TTB officer an acknowledgment or other proof of service on the principal.
#### § 17.113 Extent of release of surety from liability under bond.
The rights of the principal as supported by the bond shall cease as of the date when termination of the bond takes effect, and the surety shall be relieved from liability for drawback allowed on and after that date. Liability for drawback previously allowed shall continue until the claims for such drawback have been properly verified by the appropriate TTB officer according to law and this part.
#### § 17.114 Release of collateral.
The release of collateral security pledged and deposited to satisfy the bond requirement of this part is governed by the provisions of [31 CFR part 225](/current/title-31/part-225). When the appropriate TTB officer determines that there is no outstanding liability under the bond, and is satisfied that the interests of the Government will not be jeopardized, the security shall be released and returned to the principal.
(Sec. 1, Pub. L. 97-258, 96 Stat. 1046 ([31 U.S.C. 9301](https://www.govinfo.gov/link/uscode/31/9301), [9303](https://www.govinfo.gov/link/uscode/31/9303)))
## Subpart F—Formulas and Samples
#### § 17.121 Product formulas.
(a) *General.* Except as provided in [§§ 17.132](/current/title-27/section-17.132) and [17.182](/current/title-27/section-17.182), manufacturers shall file quantitative formulas for all preparations for which they intend to file drawback claims. Such formulas shall state the quantity of each ingredient, and shall separately state the quantity of spirits to be recovered or to be consumed as an essential part of the manufacturing process.
(b) *Filing.* Formulas shall be filed on TTB Form 5154.1, Formula and Process for Nonbeverage Products. Filing shall be accomplished no later than 6 months after the end of the quarter in which taxpaid distilled spirits were first used to manufacture the product for purposes of drawback. If a product's formula is disapproved, no drawback shall be allowed on spirits used to manufacture that product, unless it is later used as an intermediate product, as provided in [§ 17.137](/current/title-27/section-17.137).
(c) *Numbering.* The formulas shall be serially numbered by the manufacturer, commencing with number 1 and continuing thereafter in numerical sequence. However, a new formula for use at several plants shall be given the highest number next in sequence at any of those plants. The numbers that were skipped at the other plants shall not be used subsequently.
(d) *Distribution and retention of approved formulas.* One copy of each approved Form 5154.1 shall be returned to the manufacturer. The formulas returned to manufacturers shall be kept in serial order at the place of manufacture, as provided in [§ 17.170](/current/title-27/section-17.170), and shall be made available to appropriate TTB officers for examination in the investigation of drawback claims.
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. ATF-436, [66 FR 5471](https://www.federalregister.gov/citation/66-FR-5471), Jan. 19, 2001]
#### § 17.122 Amended or revised formulas.
Except as provided in this section, amended or revised formulas are considered to be new formulas and shall be numbered accordingly. Minor changes may be made to a current formula on TTB Form 5154.1 with retention of the original formula number, if approval is obtained from the appropriate TTB officer. In order to obtain approval to make a minor formula change, the person holding the Form 5154.1 shall submit a letter of application to the appropriate TTB officer, indicating the formula change and requesting that the proposed change be considered a minor change. Each such application shall clearly identify the original formula by number, date of approval, and name of product. The application shall indicate whether the product is, has been, or will be used in alcoholic beverages, and shall specify whether the proposed change is intended as a substitution or merely as an alternative for the original formula. No changes may be made to current formulas without specific TTB approval in each case.
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. ATF-436, [66 FR 5471](https://www.federalregister.gov/citation/66-FR-5471), Jan. 19, 2001]
#### § 17.123 Statement of process.
Any person claiming drawback under the regulations in this part may be required, at any time, to file a statement of process, in addition to that required by TTB Form 5154.1, as well as any other data necessary for consideration of the claim for drawback. When pertinent to consideration of the claim, submission of copies of the commercial labels used on the finished products may also be required.
#### § 17.124 Samples.
Any person claiming drawback or submitting a formula for approval under the regulations in this part may be required, at any time, to submit a sample of each nonbeverage or intermediate product for analysis. If the product is manufactured with a mixture of oil or other ingredients, the composition of which is unknown to the claimant, a 1-ounce sample of the mixture shall be submitted with the sample of finished product when so required.
#### § 17.125 Adoption of formulas and processes.
(a) *Adoption of predecessor's formulas.* If there is a change in the proprietorship of a nonbeverage plant and the successor desires to use the predecessor's formulas at the same location, the successor may, in lieu of submitting new formulas in its own name, adopt any or all of the formulas of the predecessor by filing a notice of adoption with the appropriate TTB officer. The notice shall be filed with the first claim relating to any of the adopted formulas. The notice shall list, by name and serial number, all formulas to be adopted, and shall state that the products will be manufactured in accordance with the adopted formulas and processes. The notice shall be accompanied by a certified copy of the articles of incorporation or other document(s) necessary to prove the transfer of ownership. The manufacturer shall retain a copy of the notice with the related formulas.
(b) *Adoption of manufacturer's own formulas from a different location.* A manufacturer's own formulas may be adopted for use at another of the manufacturer's plants. Further, a wholly owned subsidiary may adopt the formulas of the parent company, and vice versa. A letterhead notice must be filed with the appropriate TTB officer and be accompanied by two photocopies of each formula to be adopted. The notice shall list the numbers of all formulas to be adopted and shall indicate the plant where each was originally approved and the plant(s) where each is to be adopted. Some evidence of the relationship between the plants involved in the adoption shall be attached to the notice. The notice shall be referenced in Part IV of the supporting data (TTB Form 5154.2) filed with the first claim relating to the adopted formula(s).
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. ATF-436, [66 FR 5471](https://www.federalregister.gov/citation/66-FR-5471), Jan. 19, 2001]
#### § 17.126 Formulas for intermediate products.
(a) The manufacturer shall submit a formula on TTB Form 5154.1 for each self-manufactured ingredient made with taxpaid spirits and intended for the manufacturer's own use in nonbeverage products, unless the formula for any such ingredient is fully expressed as part of the approved formula for each nonbeverage product in which that ingredient is used, or unless the formula for the ingredient is contained in one of the pharmaceutical publications listed in [§ 17.132](/current/title-27/section-17.132).
(b) Upon receipt of Form 5154.1 covering a self-manufactured ingredient made with taxpaid spirits, the formula shall be examined under [§ 17.131](/current/title-27/section-17.131). If the formula is approved for drawback, the ingredient shall be treated as a finished nonbeverage product for purposes of this part, rather than as an intermediate product, notwithstanding its use by the manufacturer. (For example, see [§ 17.152(d)](/current/title-27/section-17.152#p-17.152\(d\)).) If the formula is disapproved for drawback, the ingredient may be treated as an intermediate product in accordance with this part. Requirements pertaining to intermediate products are found in [§ 17.185(b)](/current/title-27/section-17.185#p-17.185\(b\)).
(c) If there is a change in the composition of an intermediate product, the manufacturer shall submit an amended or revised formula, as provided in [§ 17.122](/current/title-27/section-17.122).
#### § 17.127 Self-manufactured ingredients treated optionally as unfinished nonbeverage products.
A self-manufactured ingredient made with taxpaid spirits, which otherwise would be treated as an intermediate product, may instead be treated as an unfinished nonbeverage product, if the ingredient's formula is fully expressed as a part of the approved formula for the nonbeverage product in which the ingredient will be used. A manufacturer desiring to change the treatment of an ingredient from “intermediate product” to “unfinished nonbeverage product” (or vice versa) may do so by resubmitting the applicable formula(s) on TTB Form 5154.1. Requirements pertaining to unfinished nonbeverage products are found in [§ 17.185(c)](/current/title-27/section-17.185#p-17.185\(c\)).
### Approval of Formulas
#### § 17.131 Formulas on TTB Form 5154.1.
Upon receipt, formulas on TTB Form 5154.1 shall be examined and, if found to be medicines, medicinal preparations, food products, flavors, flavoring extracts, or perfume which are unfit for beverage purposes and which otherwise meet the requirements of law and this part, they shall be approved for drawback. If the formulas do not meet the requirements of the law and regulations for drawback products, they shall be disapproved.
#### § 17.132 U.S.P., N.F., and H.P.U.S. preparations.
(a) *General.* Except as otherwise provided by [paragraph (b)](/current/title-27/section-17.132#p-17.132\(b\)) of this section or by TTB ruling, formulas for compounds in which alcohol is a prescribed quantitative ingredient, which are stated in the current revisions or editions of the United States Pharmacopoeia (U.S.P.), the National Formulary (N.F.), or the Homeopathic Pharmacopoeia of the United States (H.P.U.S.), shall be considered as approved formulas and may be used as formulas for drawback products without the filing of TTB Form 5154.1.
(b) *Exceptions.* Alcohol (including dehydrated alcohol and dehydrated alcohol injection), U.S.P.; alcohol and dextrose injection, U.S.P.; and tincture of ginger, H.P.U.S., have been found to be fit for beverage use and are disapproved for drawback. All attenuations of other H.P.U.S. products diluted beyond one part in 10,000 (“4 × ”) are also disapproved for drawback, unless the manufacturer receives approval for a formula submitted on Form 5154.1 in accordance with this subpart. The formula for such attenuations shall be submitted with a sample of the product and a statement explaining why it should be classified as unfit for beverage use.
#### § 17.133 Food product formulas.
Formulas for nonbeverage food products on TTB Form 5154.1 may be approved if they are unfit for beverage purposes. Approval does not authorize manufacture or sale contrary to State law. Examples of food products that have been found to be unfit for beverage purposes are stated below:
(a) *Sauces or syrups.* Sauces, or syrups consisting of sugar solutions and distilled spirits, in which the alcohol content is not more than 12 percent by volume and the sugar content is not less than 60 grams per 100 cubic centimeters.
(b) *Brandied fruits.* Brandied fruits consisting of solidly packaged fruits, either whole or segmented, and distilled spirits products not exceeding the quantity and alcohol content necessary for flavoring and preserving. Generally, brandied fruits will be considered to have met these standards if the container is well filled, the alcohol in the liquid portion does not exceed 23 percent by volume, and the liquid portion does not exceed 45 percent of the volume of the container.
(c) *Candies.* Candies with alcoholic fillings, if the fillings meet the standards prescribed for sauces and syrups by [paragraph (a)](/current/title-27/section-17.133#p-17.133\(a\)) of this section.
(d) *Other food products.* Food products such as mincemeat, plum pudding, and fruit cake, where only sufficient distilled spirits are used for flavoring and preserving; and ice cream and ices where only sufficient spirits are used for flavoring purposes. Also food adjuncts, such as preservatives, emulsifying agents, and food colorings, that are unfit for beverage purposes and are manufactured and used, or sold for use, in food.
#### § 17.134 Determination of unfitness for beverage purposes.
The appropriate TTB officer has responsibility for determining whether products are fit or unfit for beverage purposes within the meaning of [26 U.S.C. 5111](https://www.govinfo.gov/link/uscode/26/5111). This determination may be based either on the content and description of the ingredients as shown on TTB Form 5154.1, or on organoleptic examination. In such examination, samples of products may be diluted with water to an alcoholic concentration of 15% and tasted. Sale or use for beverage purposes is indicative of fitness for beverage use.
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. TTB-79, [74 FR 37402](https://www.federalregister.gov/citation/74-FR-37402), July 28, 2009]
#### § 17.135 Use of specially denatured alcohol (S.D.A.).
(a) *Use of S.D.A. in nonbeverage or intermediate products* —
(1) *General.* Except as provided in [paragraph (b)](/current/title-27/section-17.135#p-17.135\(b\)) of this section, the use of specially denatured alcohol (S.D.A.) and taxpaid spirits in the same product by a nonbeverage manufacturer is prohibited where drawback of tax is claimed.
(2) *Alternative formulations.* No formula for a product on TTB Form 5154.1 shall be approved for drawback under this subpart if the manufacturer also has on file an approved TTB Form 1479-A or Form 5150.19, Formula for Article Made With Specially Denatured Alcohol or Rum, pertaining to the same product.
(b) *Use of S.D.A. in ingredients* —
(1) *Purchased ingredients.* Generally, purchased ingredients containing S.D.A. may be used in nonbeverage or intermediate products. However, such ingredients shall not be used in medicinal preparations or flavoring extracts intended for internal human use, where any of the S.D.A. remains in the finished product.
(2) *Self-manufactured ingredients.* Self-manufactured ingredients may be made with S.D.A. and used in nonbeverage or intermediate products, provided—
(i) No taxpaid spirits are used in manufacturing such ingredients; and
(ii) All S.D.A. is recovered or dissipated from such ingredients prior to their use in nonbeverage or intermediate products. (Recovery of S.D.A. shall be in accordance with [subpart K of part 20 of this chapter](/current/title-27/part-20/subpart-K); recovered S.D.A., with or without its original denaturants, shall not be reused in nonbeverage or intermediate products.)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1372, as amended ([26 U.S.C. 5273](https://www.govinfo.gov/link/uscode/26/5273)))
#### § 17.136 Compliance with Food and Drug Administration requirements.
A product is not a medicine, medicinal preparation, food product, flavor, flavoring extract, or perfume for nonbeverage drawback if its formula would violate a ban or restriction of the U.S. Food and Drug Administration (FDA) pertaining to such products. If FDA bans or restricts the use of any ingredient in such a way that further manufacture of a product in accordance with its formula would violate the ban or restriction, then the manufacturer shall change the formula and resubmit it on TTB Form 5154.1 . This section does not preclude approval for products manufactured solely for export or for uses other than internal human consumption (e.g. tobacco flavors or animal feed flavors) in accordance with laws and regulations administered by FDA. Under [§ 17.123](/current/title-27/section-17.123), manufacturers may be required to demonstrate compliance with FDA requirements applicable to this section.
#### § 17.137 Formulas disapproved for drawback.
A formula may be disapproved for drawback either because it does not prescribe appropriate ingredients in sufficient quantities to make the product unfit for beverage use, or because the product is neither a medicine, a medicinal preparation, a food product, a flavor, a flavoring extract, nor a perfume. The formula for a disapproved product may be used as an intermediate product formula under [§ 17.126](/current/title-27/section-17.126). No drawback will be allowed on distilled spirits used in a disapproved product, unless that product is later used in the manufacture of an approved nonbeverage product. In the case of a product that is disapproved because it is fit for beverage use, any further use or disposition of such a product, other than as an intermediate product in accordance with this part, subjects the manufacturer to the qualification requirements of [parts 1](/current/title-27/part-1) and [19 of this chapter](/current/title-27/part-19).
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. TTB-91, [76 FR 5477](https://www.federalregister.gov/citation/76-FR-5477), Feb. 1, 2011]
## Subpart G—Claims for Drawback
#### § 17.141 Drawback.
Upon the filing of a claim as provided in this subpart, drawback shall be allowed to any person who meets the requirements of this part. Drawback shall be paid at the rate specified by [26 U.S.C. 5114](https://www.govinfo.gov/link/uscode/26/5114) on each proof gallon of distilled spirits on which the tax has been paid or determined and which have been used in the manufacture of nonbeverage products. The drawback rate is \$1.00 less than the effective tax rate. Drawback shall be allowed only to the extent that the claimant can establish, by evidence satisfactory to the appropriate TTB officer, the actual quantity of taxpaid or tax-determined distilled spirits used in the manufacture of the product, and the effective tax rate applicable to those spirits.
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. TTB-79, [74 FR 37402](https://www.federalregister.gov/citation/74-FR-37402), July 28, 2009; T.D. TTB-91, [76 FR 5477](https://www.federalregister.gov/citation/76-FR-5477), Feb. 1, 2011]
#### § 17.142 Claims.
(a) *General.* The manufacturer must file claim for drawback with the appropriate TTB officer who has the authority to approve or disapprove claims. A separate claim shall be filed for each place of business. Each claim shall pertain only to distilled spirits used in the manufacture or production of nonbeverage products during any one quarter of the tax year. Unless the manufacturer is eligible to file monthly claims (see [§§ 17.143](/current/title-27/section-17.143) and [17.144](/current/title-27/section-17.144)), only one claim per quarter may be filed for each place of business. Claims shall be filed on TTB Form 2635 (5620.8), Claim—Alcohol and Tobacco Taxes.
(b) *Manufacturers who are also proprietors of distilled spirits plants.* If a manufacturer of nonbeverage products is owned and operated by the same business entity that owns and operates a distilled spirits plant, the manufacturer's claim for drawback may be filed for credit on Form 2635 (5620.8). After the claim is approved, the distilled spirits plant may use the claim as an adjustment decreasing the taxes due in Schedule B of TTB Form 5000.24, Excise Tax Return. Adjustments resulting from an approved drawback claim are not subject to interest. This procedure may be utilized only if the manufacturer of nonbeverage products and the distilled spirits plant have the same employer identification number.
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. ATF-436, [66 FR 5471](https://www.federalregister.gov/citation/66-FR-5471), Jan. 19, 2001]
#### § 17.143 Notice for monthly claims.
If the manufacturer has notified the appropriate TTB officer, in writing, of an intention to file claims on a monthly basis instead of a quarterly basis, and has filed a bond in compliance with the provisions of this part, claims may be filed monthly instead of quarterly. The election to file monthly claims shall not preclude a manufacturer from filing a single claim covering an entire quarter, or a single claim covering just two months of a quarter, or two claims (one of them covering one month and the other covering two months). An election for the filing of monthly claims may be withdrawn by the manufacturer by filing a notice to that effect, in writing, with the appropriate TTB officer.
#### § 17.144 Bond for monthly claims.
Each person intending to file claims for drawback on a monthly basis shall file an executed bond on TTB Form 5154.3, conforming to the provisions of [subpart E of this part](/current/title-27/part-17/subpart-E). A monthly drawback claim shall not be allowed until bond coverage in a sufficient amount has been approved by the appropriate TTB officer. When the limit of liability under a bond given in less than the maximum amount has been reached, further drawback on monthly claims may be suspended until a strengthening or superseding bond in a sufficient amount is furnished.
#### § 17.145 Date of filing claim.
Quarterly claims for drawback shall be filed within six months after the quarter in which the distilled spirits covered by the claim were used in the manufacture of nonbeverage products. Monthly claims for drawback may be filed at any time after the end of the month in which the distilled spirits covered by the claim were used in the manufacture of nonbeverage products, but shall be filed not later than the close of the sixth month succeeding the quarter in which the spirits were used.
#### § 17.146 Information to be shown by the claim.
The claim shall show the following:
(a) \[Reserved]
(b) That the distilled spirits on which drawback is claimed were fully taxpaid or tax-determined at the effective tax rate applicable to the distilled spirits.
(c) That the distilled spirits on which the drawback is claimed were used in the manufacture of nonbeverage products.
(d) Whether the nonbeverage products were manufactured in compliance with quantitative formulas approved under [subpart F of this part](/current/title-27/part-17/subpart-F). (If not, attach explanation.)
(e) That the data submitted in support of the claim are correct.
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. TTB-79, [74 FR 37402](https://www.federalregister.gov/citation/74-FR-37402), July 28, 2009]
#### § 17.147 Supporting data.
(a) Each claim for drawback shall be accompanied by supporting data presented according to the format shown on TTB Form 5154.2, Supporting Data for Nonbeverage Drawback Claims (or according to any other suitable format which provides the same information). Modifications of Form 5154.2 may be used without prior authorization, if the modified format clearly shows all of the required information that is pertinent to the manufacturing operation. Under [§ 17.123](/current/title-27/section-17.123), the appropriate TTB officer may require additional supporting data when needed to determine the correctness of drawback claims.
(b) Separate data shall be shown for eligible distilled spirits taxpaid at different effective tax rates. This requirement applies to all eligible spirits, including eligible recovered alcohol and eligible spirits contained in intermediate products.
(c) Separate data shall be shown for imported rum, spirits from Puerto Rico containing at least 92% rum, and spirits from the U.S. Virgin Islands containing at least 92% rum. The total number of proof gallons of each such category used subject to drawback during the claim period shall also be shown, with separate totals for each effective tax rate. These amounts shall include eligible spirits and rum from intermediate products or recovered alcohol.
(d) Any gain in eligible distilled spirits reported in the supporting data shall be reflected by an equivalent deduction from the amount of drawback claimed. Gains shall not be offset by known losses.
#### § 17.148 Allowance of claims.
(a) *General.* Except in the case of fraudulent noncompliance, no claim for drawback shall be denied for a failure to comply with either [26 U.S.C. 5111-5114](https://www.govinfo.gov/link/uscode/26/5111) or the requirements of this part, if the claimant establishes that spirits on which the tax has been paid or determined were in fact used in the manufacture of medicines, medicinal preparations, food products, flavors, flavoring extracts, or perfume, which were unfit for beverage purposes.
(b) *Penalty.* Noncompliance with the requirements of [26 U.S.C. 5111-5114](https://www.govinfo.gov/link/uscode/26/5111) or of this part subjects the claimant to a civil penalty of $1,000 for each separate product, reflected in a claim for drawback, to which the noncompliance relates, or the amount claimed for that product, whichever is less, unless the claimant establishes that the noncompliance was due to reasonable cause. Late filing of a claim subjects the claimant to a civil penalty of $1,000 or the amount of the claim, whichever is less, unless the claimant establishes that the lateness was due to reasonable cause.
(c) *Reasonable cause.* Reasonable cause exists where a claimant establishes it exercised ordinary business care and prudence, and still was unable to comply with the statutory and regulatory requirements. Ignorance of law or regulations, in and of itself, is not reasonable cause. Each case is individually evaluated.
([26 U.S.C. 5114(c)](https://www.govinfo.gov/link/uscode/26/5114))
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. TTB-79, [74 FR 37402](https://www.federalregister.gov/citation/74-FR-37402), July 28, 2009]
### Spirits Subject to Drawback
#### § 17.151 Use of distilled spirits.
Distilled spirits are considered to have been used in the manufacture of a product under this part if the spirits are consumed in the manufacture, are incorporated into the product, or are determined by TTB to have been otherwise utilized as an essential part of the manufacturing process. However, spirits lost by causes such as spillage, leakage, breakage or theft, and spirits used for purposes such as rinsing or cleaning a system, are not considered to have been used in the manufacture of a product.
#### § 17.152 Time of use of spirits.
(a) *General.* Distilled spirits shall be considered used in the manufacture of a product as soon as that product contains all the ingredients called for by its formula.
(b) *Spirits used in an ion exchange column.* Distilled spirits used in recharging an ion exchange column, the operation of which is essential to the production of a product, shall be considered to be used when the spirits are entered into the manufacturing system in accordance with the product's formula.
(c) *Products requiring additional processing or treatment.* Further manipulation of a product, such as aging or filtering, subsequent to the mixing together of all of its ingredients, shall not postpone the time when spirits are considered used, as determined under [paragraph (a)](/current/title-27/section-17.152#p-17.152\(a\)) of this section. This is true even if at the time of use there has not yet been a final determination of alcoholic content by assay. If, however, it is later found necessary to add more distilled spirits to standardize the product, such added spirits shall be considered as used in the period during which they were added.
(d) *Nonbeverage products used to manufacture other products.* Nonbeverage products may be used to manufacture other nonbeverage (or intermediate) products. However, such subsequent usage of a nonbeverage product shall not affect the time when the distilled spirits contained therein are considered used. When distilled spirits are used in the manufacture of a nonbeverage product, the time of use shall be the point at which that product first contains all of its prescribed ingredients, and such use shall not be determined by the time of any subsequent usage of that product in another product.
#### § 17.153 Recovered spirits.
(a) *Recovery from intermediate products.* Eligible spirits recovered in the manufacture of intermediate products are not subject to drawback until such recovered spirits are used in the manufacture of a nonbeverage product. (However, see [§ 17.127](/current/title-27/section-17.127) with respect to optional treatment of ingredients as unfinished nonbeverage products, rather than as intermediate products.) Spirits recovered in the manufacture of intermediate products shall be reused only in the manufacture of intermediate or nonbeverage products.
(b) *Recovery from nonbeverage products.* Distilled spirits recovered in the manufacture of a nonbeverage product are considered as having been used in the manufacture of that product. If the spirits were eligible when so used, they became subject to drawback at that time. Upon recovery, such spirits may be reused in the manufacture of nonbeverage products, but shall not be reused for any other purpose. When reused, such recovered spirits are not again eligible for drawback and shall not be used in the manufacture of intermediate products.
(c) *Cross references.* For additional provisions respecting the recovery of distilled spirits and related recordkeeping requirements, see [§§ 17.168](/current/title-27/section-17.168) and [17.183](/current/title-27/section-17.183).
#### § 17.154 Spirits contained in intermediate products.
Spirits contained in an intermediate product are not subject to drawback until that intermediate product is used in the manufacture of a nonbeverage product.
#### § 17.155 Spirits consumed in manufacturing intermediate products.
Spirits consumed in the manufacture of an intermediate product—which are not contained in the intermediate product at the time of its use in nonbeverage products—are not subject to drawback. Such spirits are not considered to have been used in the manufacture of nonbeverage products. However, see [§ 17.127](/current/title-27/section-17.127) with respect to optional treatment of ingredients as unfinished nonbeverage products, rather than as intermediate products.
## Subpart H—Records
#### § 17.161 General.
Each person claiming drawback on taxpaid distilled spirits used in the manufacture of nonbeverage products shall maintain records showing the information required in this subpart. No particular form is prescribed for these records, but the data required to be shown shall be clearly recorded and organized to enable appropriate TTB officers to trace each operation or transaction, monitor compliance with law and regulations, and verify the accuracy of each claim. Ordinary business records, including invoices and cost accounting records, are acceptable if they show the required information or are annotated to show any such information that is lacking. The records shall be kept complete and current at all times and shall be retained by the manufacturer at the place where the taxpaid distilled spirits are used in the manufacture or production of nonbeverage products, for the period prescribed in [§ 17.170](/current/title-27/section-17.170).
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. TTB-79, [74 FR 37402](https://www.federalregister.gov/citation/74-FR-37402), July 28, 2009]
#### § 17.162 Receipt of distilled spirits.
(a) *Distilled spirits received in tank cars, tank trucks, barrels, or drums.* For distilled spirits received in tank cars, tank trucks, barrels, or drums, the manufacturer shall record, with respect to each shipment received—
(1) The date of receipt;
(2) The name and address of the person from whom received;
(3) The serial number or other identification mark (if any) of each tank car, tank truck, barrel, or drum;
(4) The name of the producer or warehouseman who paid or determined the tax;
(5) The effective tax rate (if other than the rate prescribed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001)); and
(6) The kind, quantity, and proof (or alcohol percentage by volume) of the spirits.
(b) *Distilled spirits received in bottles.* For distilled spirits received in bottles, the manufacturer shall record—
(1) The date of receipt;
(2) The name and address of the seller;
(3) The serial number of each case, if the bottles are received in cases;
(4) The name of the bottler;
(5) The effective tax rate (if other than the rate prescribed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001)); and
(6) The kind, quantity, and proof (or alcohol percentage by volume) of the spirits.
(c) *Distilled spirits received by pipeline.* For distilled spirits received by pipeline, the manufacturer shall record—
(1) The date of receipt;
(2) The name of the producer or warehouseman who paid or determined the tax;
(3) The effective tax rate (if other than the rate prescribed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001)); and
(4) The kind, quantity, and proof (or alcohol percentage by volume) of the spirits.
(d) *Determination of quantity.* At the time of receipt, each manufacturer shall determine (preferably by weight) and record the exact number of proof gallons of distilled spirits received. The amount received in bottles may be determined by the required statements on the labels. The amount received in sealed drums with no evidence of leakage may be determined from the record of shipment, which is required by [§ 19.626 of this chapter](/current/title-27/section-19.626) to accompany spirits received from a distilled spirits plant. If spirits are received in a tank car or tank truck, and the result of the manufacturer's gauge of the spirits is within 0.2 percent of the number of proof gallons reported on the record of shipment required by [§ 19.626](/current/title-27/section-19.626), then the number of proof gallons reported on that record may be recorded as the quantity received. Nevertheless, the receiving gauge shall be noted on the record of receipt. If, for any shipment, the amount recorded in the manufacturer's records as the quantity received is greater than the amount shown as taxpaid on the record required by [§ 19.626](/current/title-27/section-19.626), a deduction equivalent to the excess shall be made from the amount of drawback claimed in the manufacturer's claim covering that period. If no claim is filed for that period, then the deduction shall be made in the manufacturer's next claim. Losses in transit that exceed the 0.2 percent limitation provided in this paragraph shall be determined and noted on the record of receipt. Such losses shall not be recorded as distilled spirits received.
(e) *Receipt of imported rum, or spirits from Puerto Rico or the Virgin Islands.* If spirits are received which contain at least 92% rum, and which originate from Puerto Rico or the U.S. Virgin Islands, the record of receipt shall indicate the place of origin. If rum is received, the record shall indicate whether it is from Puerto Rico, from the U.S. Virgin Islands, imported from other countries, or domestic.
(f) *Shipments from distilled spirits plants.* If spirits are received directly from the distilled spirits plant that paid or determined the tax, the manufacturer shall retain the record of shipment required by [§ 19.626 of this chapter](/current/title-27/section-19.626). To the extent that the information on that record duplicates the requirements of this section, retention of that record shall satisfy those requirements. If there are differences between the information on the record of shipment and the information required to be recorded by this section, the requirements of this section may be met by appropriate annotations on the record of shipment.
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011]
#### § 17.163 Evidence of taxpayment of distilled spirits.
(a) *Shipments from distilled spirits plants.* For each shipment of taxpaid spirits from the bonded premises of a distilled spirits plant, the manufacturer shall obtain the record of shipment prepared by the supplier under [§ 19.626 of this chapter](/current/title-27/section-19.626). This record shall be retained with the commercial invoice (if the latter is a separate document) as evidence of taxpayment of the spirits. The record shall show the effective tax rate(s) (if other than the rate prescribed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001)) applicable to the shipment.
(b) *Purchases from wholesale and retail liquor dealers.* Manufacturers shall obtain commercial invoices or other documentation pertaining to purchases of distilled spirits from wholesale and retail liquor dealers (including such dealership operations when conducted in conjunction with a distilled spirits plant). For spirits other than alcohol, grain spirits, neutral spirits, distilled gin, or straight whisky (as defined in the standards of identity prescribed by [§ 5.22 of this chapter](/current/title-27/section-5.22)), the manufacturer of nonbeverage products shall obtain evidence, from the producer or bottler of the spirits, as to the effective tax rate paid thereon.
(c) *Imported spirits.* For imported spirits that were taxpaid through U.S. Customs and Border Protection (CBP), evidence of such taxpayment (such as CBP Forms 7501 and 7505, receipted to indicate payment of tax, and the certificate of effective tax rate computation, if applicable) shall be secured from the importer and retained by the manufacturer.
(d) *Evidence of effective tax rate.* If the evidence of effective tax rate, required by this section for distilled spirits products that may contain wine or flavors, is not obtained, drawback shall only be allowed based on the lowest effective tax rate possible for the kind of distilled spirits product used.
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 17.164 Production record.
(a) *General.* Each manufacturer shall keep a production record for each batch of intermediate product and for each batch of nonbeverage product. The production record shall be an original record made at the time of production by a person (or persons) having actual knowledge thereof. If any product is produced by a continuous process rather than by batches, the production record shall pertain to the total quantity of that product produced during each claim period.
(b) *Information to be shown.* The record shall show the name and formula number of the product, the actual quantities of all ingredients used in the manufacture of the batch (including the proof or alcohol percentage by volume of all spirits), the date when eligible spirits were considered used (see [§ 17.152](/current/title-27/section-17.152)), the effective tax rate applicable to those spirits (if other than the rate prescribed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001)), and the quantity of product produced. The alcohol content of the product shall be shown if a test of alcohol content was made (see [paragraph (e)](/current/title-27/section-17.164#p-17.164\(e\)) of this section). Usage of eligible and ineligible spirits shall be shown separately. If spirits from Puerto Rico or the U.S. Virgin Islands, containing at least 92% rum, were used, the record shall indicate their place of origin. If rum was used, the record shall indicate whether it was from Puerto Rico, from the U.S. Virgin Islands, imported from other countries, or domestic. If spirits were recovered, the production record shall so indicate, and the record required by [§ 17.168](/current/title-27/section-17.168) shall be kept. If drawback is claimed on spirits consumed as an essential part of the manufacture of a nonbeverage product, which were not contained in that product at its completion, then the production record shall show the quantity of spirits so consumed in the manufacture of each batch.
(c) *Specificity of information.* The production record shall refer to ingredients by the same names as are used for them in the product's formula. This includes formulas submitted to TTB and formulas contained in the publications listed in [§ 17.132](/current/title-27/section-17.132). Other names for the ingredients may be added in the production record, if necessary for the manufacturer's operations. Usage of ingredients (including spirits) may be shown in units of weight or volume.
(d) *Determining quantity of distilled spirits used.* Each manufacturer shall accurately determine, by weight or volume, and record in the production records the quantity of all distilled spirits used. When the quantity used is determined by volume, adjustments shall be made if the temperature of the spirits is above or below 60 degrees Fahrenheit. A table for correction of volume of spirituous liquors to 60 degrees Fahrenheit, Table 7 of the “Gauging Manual,” is available. See [subpart E of part 30 of this chapter](/current/title-27/part-30/subpart-E) and [§ 30.67](/current/title-27/section-30.67). Losses after receipt due to leakage, spillage, evaporation, or other causes not essential to the manufacturing process shall be accurately recorded in the manufacturer's permanent records at the time such losses are determined.
(e) *Tests of alcohol content.* At representative intervals, the manufacturer shall verify the alcohol content of nonbeverage products. The results of such tests shall be recorded.
#### § 17.165 Receipt of raw ingredients.
For raw ingredients destined to be used in nonbeverage or intermediate products, the manufacturer shall record, for each shipment received—
(a) The date of receipt;
(b) The quantity received; and
(c) The identity of the supplier.
#### § 17.166 Disposition of nonbeverage products.
(a) *Shipments.* For each shipment of nonbeverage products, the manufacturer shall record—
(1) The formula number of the product;
(2) The date of shipment;
(3) The quantity shipped; and
(4) The identity of the consignee.
(b) *Other disposition.* For other dispositions of nonbeverage products, the manufacturer shall record—
(1) The type of disposition;
(2) The date of disposition; and
(3) The quantity of each product so disposed of.
(c) *Exception.* The manufacturer need not keep the records required by [paragraphs (a)](/current/title-27/section-17.166#p-17.166\(a\)) and [(b)](/current/title-27/section-17.166#p-17.166\(b\)) of this section for any nonbeverage product which either contains less than 3 percent of distilled spirits by volume, or is sold by the producer directly to the consumer in retail quantities. However, when needed for protection of the revenue, the appropriate TTB officer may at any time require the keeping of these records upon giving at least five days' notice to the manufacturer.
#### § 17.167 Inventories.
(a) *Distilled spirits.* The “on hand” figures reported in Part II of TTB Form 5154.2 shall be verified by physical inventories taken as of the end of each quarter in which nonbeverage products were manufactured for purposes of drawback. Spirits taxpaid at different effective tax rates shall be inventoried separately. The inventory record shall show the date inventory was taken, the person(s) by whom it was taken, subtotals for each product inventoried, and any gains or losses disclosed; and shall be retained with the manufacturer's records. The manufacturer shall explain in Part IV of the supporting data (Form 5154.2) any discrepancy between the amounts on hand as disclosed by physical inventory and the amounts indicated by the manufacturer's records. Any gain in eligible spirits disclosed by inventory requires an equivalent deduction from the claim with which the inventory is reported. Gains shall not be offset by known losses. If no claim is filed for a quarter (nor for any monthly period therein), then no physical inventory is required for that quarter.
(b) *Raw ingredients and nonbeverage products.* When necessary for ensuring compliance with regulations and protection of the revenue, the appropriate TTB officer may require a manufacturer to take physical inventories of finished nonbeverage products, and/or raw ingredients intended for use in the manufacture of nonbeverage or intermediate products. The results of such inventories shall be recorded in the manufacturer's records. Any discrepancy between the amounts on hand as disclosed by physical inventory and such amounts as indicated by the manufacturer's records shall also be recorded with an explanation of its cause.
#### § 17.168 Recovered spirits.
(a) Each manufacturer intending to recover distilled spirits under the provisions of this part shall first notify the appropriate TTB officer. Any apparatus used to separate alcohol is subject to the registration requirements of [26 U.S.C. 5179](https://www.govinfo.gov/link/uscode/26/5179) and [subpart C of part 29 of this chapter](/current/title-27/part-29/subpart-C). Recovery operations may only be conducted on the premises where the recovered spirits were used in the manufacture or production of nonbeverage or intermediate products.
(b) The manufacturer shall keep a record of the distilled spirits recovered and the subsequent use to which such spirits are put. The record shall show—
(1) The date of recovery;
(2) The commodity or process from which the spirits were recovered;
(3) The amount in proof gallons, or by weight and proof (or alcohol percentage by volume) of distilled spirits recovered;
(4) The amount in proof gallons, or by weight and proof (or alcohol percentage by volume) of recovered distilled spirits reused;
(5) The commodity in which the recovered distilled spirits were reused; and
(6) The date of reuse.
(c) Whenever recovered spirits are destroyed (see [§ 17.183](/current/title-27/section-17.183)), the record shall further show—
(1) The reason for the destruction;
(2) The date, time, location, and manner of destruction;
(3) The number of proof gallons destroyed; and
(4) The name of the individual who accomplished or supervised the destruction.
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. ATF-462, [66 FR 42736](https://www.federalregister.gov/citation/66-FR-42736), Aug. 15, 2001; T.D. TTB-79, [74 FR 37402](https://www.federalregister.gov/citation/74-FR-37402), July 28, 2009]
#### § 17.169 Transfer of intermediate products.
When intermediate products are transferred as permitted by [§ 17.185(b)](/current/title-27/section-17.185#p-17.185\(b\)), supporting records of such transfers shall be kept at the shipping and receiving plants, showing the date and quantity of each product transferred.
#### § 17.170 Retention of records.
Each manufacturer shall retain for a period of not less than 3 years all records required by this part, a copy of all claims and supporting data filed in support thereof, all commercial invoices or other documents evidencing taxpayment or tax-determination of domestic spirits, all documents evidencing taxpayment of imported spirits, and all bills of lading received which pertain to shipments of spirits. In addition, a copy of each formula submitted on TTB Form 5154.1 shall be retained at each factory where the formula is used, for not less than 3 years from the date of filing of the last claim for drawback under the formula. A copy of an approval to use an alternate method or procedure shall be retained as long as the manufacturer employs the method or procedure, and for 3 years thereafter. Further, the appropriate TTB officer may require these records, forms, and documents to be retained for an additional period of not more than 3 years in any case where he or she deems such retention to be necessary or advisable for protection of the revenue.
#### § 17.171 Inspection of records.
All of the records, forms, and documents required to be retained by [§ 17.170](/current/title-27/section-17.170) shall be kept at the premises where distilled spirits are used in the manufacture or production of nonbeverage products and shall be readily available during the manufacturer's regular business hours for examination and copying by the appropriate TTB officers. At the same time, any other books, papers, records or memoranda in the possession of the manufacturer, which have a bearing upon the matters required to be alleged in a claim for drawback, shall be available for inspection by appropriate TTB officers.
([26 U.S.C. 5113](https://www.govinfo.gov/link/uscode/26/5113), [5123](https://www.govinfo.gov/link/uscode/26/5123))
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. TTB-79, [74 FR 37402](https://www.federalregister.gov/citation/74-FR-37402), July 28, 2009]
## Subpart I—Miscellaneous Provisions
#### § 17.181 Exportation of medicinal preparations and flavoring extracts.
Medicinal preparations and flavoring extracts, approved for drawback under the provisions of this part, may be exported subject to [19 U.S.C. 1313(d)](https://www.govinfo.gov/link/uscode/19/1313), which authorizes export drawback equal to the entire amount of internal revenue tax found to have been paid on the domestic alcohol used in the manufacture of such products. (Note: Export drawback is not allowed for imported alcohol under this provision of customs law.) Claims for such export drawback shall be filed in accordance with the applicable regulations of U.S. Customs and Border Protection. Such claims may cover either the full rate of tax which has been paid on the alcohol, if no nonbeverage drawback has been claimed thereon, or else the remainder of the tax if nonbeverage drawback under [26 U.S.C. 5114](https://www.govinfo.gov/link/uscode/26/5114) has been or will be claimed.
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. TTB-79, [74 FR 37402](https://www.federalregister.gov/citation/74-FR-37402), July 28, 2009; T.D. TTB-196 [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 17.182 Drawback claims by druggists.
Drawback of tax under [26 U.S.C. 5114](https://www.govinfo.gov/link/uscode/26/5114) is allowable on taxpaid distilled spirits used by druggists in compounding prescriptions. The prescriptions so compounded shall be shown in the supporting data by listing the first and last serial numbers thereof. The amount of taxpaid spirits used in each prescription need not be shown, but such prescriptions shall be made available for examination by appropriate TTB officers. If refills have been made of prescriptions received in a previous claim period, their serial numbers shall be recorded separately. Druggists claiming drawback as authorized by this section are subject to all the applicable requirements of this part, except those requiring the filing of quantitative formulas.
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. TTB-79, [74 FR 37402](https://www.federalregister.gov/citation/74-FR-37402), July 28, 2009]
#### § 17.183 Disposition of recovered alcohol and material from which alcohol can be recovered.
(a) *Recovered alcohol.* Manufacturers of nonbeverage products shall not sell or transfer recovered spirits to any other premises without TTB authorization under [§ 17.3](/current/title-27/section-17.3). If recovered spirits are stored pending reuse, storage facilities shall be adequate to protect the revenue. If recovered spirits are destroyed, the record required by [§ 17.168(c)](/current/title-27/section-17.168#p-17.168\(c\)) must be kept. Spirits recovered from intermediate products may be destroyed without notice to TTB. Spirits recovered from nonbeverage products may be destroyed pursuant to a notice filed with the appropriate TTB officer at least 12 days prior to the date of destruction. The notice shall state the reason for the destruction, the intended date of destruction, and the approximate quantity involved. The appropriate TTB officer may impose specific conditions, including requiring that the destruction be witnessed by an appropriate TTB officer. Unless the manufacturer is otherwise advised by the appropriate TTB officer before the date specified in the notice, the destruction may proceed as planned.
(b) *By-product material (general).* By-product material from which alcohol can be recovered shall not be sold or transferred unless the alcohol has been removed or an approved substance has been added to prevent recovery of residual alcohol. Material from which alcohol can be recovered may also be destroyed on the manufacturer's premises by a suitable method. Except as provided in [paragraph (c)](/current/title-27/section-17.183#p-17.183\(c\)) of this section, prior written approval shall be obtained from the appropriate TTB officer as to the adequacy, under this section, of any substance proposed to be added to prevent recovery of alcohol, or of any proposed method of destruction.
(c) *Spent vanilla beans.* Specific approval from the appropriate TTB officer is not required when spent vanilla beans containing residual alcohol are destroyed on the manufacturer's premises by burning, or when they are removed from those premises after treatment with sufficient kerosene, mineral spirits, rubber hydrocarbon solvent, or gasoline to prevent recovery of residual alcohol.
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 17.184 Distilled spirits container marks.
All marks required by [part 19 of this chapter](/current/title-27/part-19) shall remain on containers of taxpaid distilled spirits until the contents are emptied. Whenever such a container is emptied, such marks shall be completely obliterated.
(Sec. 454, Pub. L. 98-369, 98 Stat. 820 ([26 U.S.C. 5206(d)](https://www.govinfo.gov/link/uscode/26/5206)))
#### § 17.185 Requirements for intermediate products and unfinished nonbeverage products.
(a) *General.* Self-manufactured ingredients made with taxpaid spirits may be accounted for either as intermediate products or as unfinished nonbeverage products. The manufacturer may choose either method of accounting for such self-manufactured ingredients (see [§ 17.127](/current/title-27/section-17.127)). However, the method selected determines the requirements that will apply to those ingredients, as prescribed in [paragraphs (b)](/current/title-27/section-17.185#p-17.185\(b\)) and [(c)](/current/title-27/section-17.185#p-17.185\(c\)) of this section.
(b) *Intermediate products.* Intermediate products shall be used exclusively in the manufacture of nonbeverage products. Intermediate products may be accumulated and stored indefinitely and may be used in any nonbeverage product whose formula calls for such use. Intermediate products shall be manufactured by the same entity that manufactures the finished nonbeverage products. Intermediate products shall not be sold or transferred between separate and distinct entities. However, they may be transferred to another branch or plant of the same manufacturer, for use there in the manufacture of approved nonbeverage products. (See [§ 17.169](/current/title-27/section-17.169) for recordkeeping requirement.) For the purposes of this section, the phrase “separate and distinct entities” includes parent and subsidiary corporations, regardless of any corporate (or other) relationship, and even if the stock of both the manufacturing firm and the receiving firm is owned by the same persons.
(c) *Unfinished nonbeverage products.* An unfinished nonbeverage product shall only be used in the particular nonbeverage product for which it was manufactured, and shall be entirely so used within the time limit stated in the approved TTB Form 5154.1. Spirits dissipated or recovered in the manufacture of unfinished nonbeverage products shall be regarded as having been dissipated or recovered in the manufacture of nonbeverage products. Spirits contained in such unfinished products shall be accounted for in the supporting data under [§ 17.147](/current/title-27/section-17.147) and inventoried under [§ 17.167](/current/title-27/section-17.167) as “in process” in nonbeverage products. Production of unfinished nonbeverage products shall be recorded as an integral part of the production records for the related nonbeverage products. Unfinished nonbeverage products shall not be transferred to other premises.
#### § 17.186 Transfer of distilled spirits to other containers.
A manufacturer may transfer taxpaid distilled spirits from the original package to other containers at any time for the purpose of facilitating the manufacture of products unfit for beverage use. Containers into which distilled spirits have been transferred under this section shall bear a label identifying their contents as taxpaid distilled spirits, and shall be marked with the serial number of the original package from which the spirits were withdrawn.
#### § 17.187 Discontinuance of business.
The manufacturer shall notify TTB when business is to be discontinued. Upon discontinuance of business, a manufacturer's entire stock of taxpaid distilled spirits on hand may be sold in a single sale without the necessity of qualifying as a wholesaler under [part 1 of this chapter](/current/title-27/part-1) or registering and keeping records as a liquor dealer under [part 31 of this chapter](/current/title-27/part-31).The spirits likewise may be returned to the person from whom purchased, or they may be destroyed or given away.
\[T.D. ATF-379, [61 FR 31412](https://www.federalregister.gov/citation/61-FR-31412), June 20, 1996, as amended by T.D. TTB-25, [70 FR 19882](https://www.federalregister.gov/citation/70-FR-19882), Apr. 15, 2005; T.D. TTB-79, [74 FR 37402](https://www.federalregister.gov/citation/74-FR-37402), July 28, 2009]
# Part 18 — PRODUCTION OF VOLATILE FRUIT-FLAVOR CONCENTRATE
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-18
Full text of 27 CFR Part 18 — PRODUCTION OF VOLATILE FRUIT-FLAVOR CONCENTRATE. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 18—PRODUCTION OF VOLATILE FRUIT-FLAVOR CONCENTRATE
#### Authority:
[26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5171-5173](https://www.govinfo.gov/link/uscode/26/5171), [5178](https://www.govinfo.gov/link/uscode/26/5178), [5179](https://www.govinfo.gov/link/uscode/26/5179), [5203](https://www.govinfo.gov/link/uscode/26/5203), [5351](https://www.govinfo.gov/link/uscode/26/5351), [5354](https://www.govinfo.gov/link/uscode/26/5354), [5356](https://www.govinfo.gov/link/uscode/26/5356), [5511](https://www.govinfo.gov/link/uscode/26/5511), [5552](https://www.govinfo.gov/link/uscode/26/5552), [6065](https://www.govinfo.gov/link/uscode/26/6065), [6109](https://www.govinfo.gov/link/uscode/26/6109), [7805](https://www.govinfo.gov/link/uscode/26/7805).
#### Source:
T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, unless otherwise noted.
#### Editorial Note:
Nomenclature changes to part 18 appear by T.D. ATF-436, [66 FR 5471](https://www.federalregister.gov/citation/66-FR-5471), [5472](https://www.federalregister.gov/citation/66-FR-5472), Jan. 19, 2001.
## Subpart A—Scope
#### § 18.1 Scope.
The regulations in this part relate to the qualification and operation (including activities incident thereto) of plants for the manufacture of volatile fruit-flavor concentrate (essence). The regulations in this part apply to the several States of the United States and the District of Columbia.
#### § 18.2 Applicability of law.
Except as specified in [26 U.S.C. 5511](https://www.govinfo.gov/link/uscode/26/5511), the provisions of [26 U.S.C. Chapter 51](https://www.govinfo.gov/link/uscode/26/5101) are not applicable to the manufacture, by any process which includes evaporations from the mash or juice of any fruit, of any volatile fruit-flavor concentrate if:
(a) The concentrate, and the mash or juice from which it is produced, contains no more alcohol than is reasonably unavoidable in the manufacture of the concentrate; and
(b) The concentrate is rendered unfit for use as a beverage before removal from the place of manufacture, or (in the case of concentrate which does not exceed 24 percent alcohol by volume) the concentrate is transferred to a bonded wine cellar for use in the production of natural wine; and
(c) The manufacturer of concentrate complies with all requirements for the protection of the revenue with respect to the production, removal, sale, transportation, and use of concentrate, and of the mash or juice from which it is produced, as may be prescribed by this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1392, as amended ([26 U.S.C. 5511](https://www.govinfo.gov/link/uscode/26/5511)))
#### § 18.3 Unlawful operations.
(a) A manufacturer of concentrate who violates any of the conditions stated in [§ 18.2](/current/title-27/section-18.2) is subject to the taxes and penalties otherwise applicable under [26 U.S.C. Chapter 51](https://www.govinfo.gov/link/uscode/26/5101) in respect to such operations.
(b) Any person who sells, transports, or uses any concentrate or the mash or juice from which it is produced in violation of law or regulations is subject to all the provisions of [26 U.S.C. Chapter 51](https://www.govinfo.gov/link/uscode/26/5101) pertaining to distilled spirits and wines, including those requiring the payment of the tax thereon.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended ([26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001)))
## Subpart B—Definitions
#### § 18.11 Meaning of terms.
When used in this part and in forms prescribed under this part, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof, terms shall have the meaning ascribed in this section. Words in the plural form shall include the singular, and vice versa, and words importing the masculine gender shall include the feminine. The terms “includes” and “including” do not exclude things not enumerated which are in the same general class.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.18, Delegation of the Administrator's Authorities in [27 CFR Part 18](/current/title-27/part-18), Production of Volatile Fruit-Flavor Concentrate.
*Bonded wine cellar.* Premises established under [27 CFR part 24](/current/title-27/part-24) for the production, blending, cellar treatment, storage, bottling, or packaging of untaxpaid wine, and includes premises designated as “bonded winery.”
*Concentrate.* Any volatile fruit-flavor concentrate (essence) produced by any process which includes evaporations from any fruit mash or juice.
*Concentrate plant.* An establishment qualified under this part for the production of concentrate.
*Distilled spirits plant.* An establishment qualified under [27 CFR part 19](/current/title-27/part-19), excluding alcohol fuel plants, for producing, warehousing, or processing distilled spirits (including denatured distilled spirits).
*Executed under penalties of perjury.* Signed with the prescribed declaration under the penalties of perjury as provided on or with respect to the application, report, form, or other document or, where no form of declaration is prescribed, with the declaration: “I declare under the penalties of perjury that this \_\_\_\_\_\_\_\_\_\_ (insert type of document, such as application or report), including the documents submitted in support thereof, has been examined by me and, to the best of my knowledge and belief, is true, correct and complete.”
*Fold.* The ratio of the volume of the fruit mash or juice to the volume of the concentrate produced from the fruit mash or juice. For example, one gallon of concentrate of 100-fold would be the product from 100 gallons of fruit mash or juice.
*Fruit.* All products commonly known and classified as fruit, berries, or grapes.
*Fruit mash.* Any unfermented mixture of juice, pulp, skins, and seeds prepared from fruit, berries, or grapes.
*High-proof concentrate.* For the purposes of this part, “high-proof concentrate” means a concentrate (essence), as defined in this section, that has an alcohol content of more than 24 percent by volume and is unfit for beverage use (nonpotable) because of its natural constituents, i.e. without the addition of other substances.
*Juice.* The unfermented juice (concentrated or unconcentrated) of fruit, berries, or grapes, exclusive of pulp, skins, or seeds.
*Person.* An individual, trust, estate, partnership, association, company, or corporation.
*Processing material.* The fruit mash or juice from which concentrate is produced.
*Proprietor.* A person qualified under this part to operate a concentrate plant.
*Registry number.* The number assigned to a concentrate plant or a bonded wine cellar for an approved application as required by Parts 18 and 24, respectively.
*U.S.C.* The United States Code.
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990; T.D. ATF-436, [66 FR 5471](https://www.federalregister.gov/citation/66-FR-5471), Jan. 19, 2001; T.D. ATF-455, [66 FR 29482](https://www.federalregister.gov/citation/66-FR-29482), May 31, 2001; T.D. TTB-44, [71 FR 16927](https://www.federalregister.gov/citation/71-FR-16927), Apr. 4, 2006]
## Subpart C—Administrative and Miscellaneous Provisions
#### § 18.12 Delegations of the Administrator.
The regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.18, Delegation of the Administrator's Authorities in [27 CFR Part 18](/current/title-27/part-18), Production of a Volatile Fruit-Flavor Concentrate. You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-44, [71 FR 16927](https://www.federalregister.gov/citation/71-FR-16927), Apr. 4, 2006, as amended by T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 18.13 Alternate methods or procedures.
(a) *General.* The proprietor, on specific approval by the appropriate TTB officer, may use an alternate method or procedure in lieu of a method or procedure specifically prescribed in this part. The appropriate TTB officer may approve an alternate method or procedure, subject to stated conditions, when that officer finds that:
(1) Good cause has been shown for the use of the alternate method or procedure;
(2) The alternate method or procedure is within the purpose of, and consistent with the effect intended by the specifically prescribed method or procedure, and affords equivalent security to the revenue; and
(3) The alternate method or procedure will not be contrary to any provision of law, and will not result in an increase in cost to the Government or hinder the effective administration of this part.
(b) *Application.* A proprietor who desires to employ an alternate method or procedure shall submit a written application to the appropriate TTB officer. The application will specifically describe the proposed alternate method or procedure and set forth the reasons therefor. Alternate methods or procedures may not be employed until the application has been approved by the appropriate TTB officer. Authorization for any alternate method or procedure may be withdrawn whenever in the judgment of the appropriate TTB officer the revenue is jeopardized or the effective administration of this part is hindered by the continuation of the authorization.
(Approved by the Office of Management and Budget under control number 1513-0006)
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996; T.D. ATF-436, [66 FR 5471](https://www.federalregister.gov/citation/66-FR-5471), Jan. 19, 2001; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 18.14 Emergency variations from requirements.
(a) *General.* The appropriate TTB officer may approve emergency variations from requirements specified in this part, where the appropriate TTB officer finds that an emergency exists, the proposed variations are necessary, and the proposed variations:
(1) Will afford the security and protection to the revenue intended by the prescribed specifications;
(2) Will not hinder the effective administration of this part; and
(3) Will not be contrary to any provision of law.
Variations from requirements granted under this section are conditioned on compliance with the procedures, conditions, and limitations stated in the approval of the application. Failure to comply in good faith with such procedures, conditions and limitations will automatically terminate the authority for such variations and the proprietor thereupon shall fully comply with the prescribed requirements of regulations from which the variations were authorized. Authority for any variation may be withdrawn whenever in the judgment of the appropriate TTB officer the revenue is jeopardized or the effective administration of this part is hindered by the continuation of such variation.
(b) *Application.* A proprietor who desires to employ emergency variations shall submit a written application to the appropriate TTB officer. The application will describe the proposed variations and set forth the reasons therefor. Variations will not be employed until the application has been approved, except when an emergency requires immediate action to correct a situation that is threatening to life or property. Such corrective action may then be taken concurrent with the filing of the application and notification of the appropriate TTB officer via telephone.
(Approved by the Office of Management and Budget under control number 1513-0006)
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 18.15 Right of entry and examination.
Appropriate TTB officers may at all times, as well by night as by day, enter any concentrate plant to make examination of the materials, equipment, and facilities thereon; and make such gauges and inventories as they deem necessary. Whenever appropriate TTB officers, having demanded admittance and declared their name and office, are not admitted into such premises by the proprietor or other person having charge thereof, they may at all times use such force as is necessary for them to gain entry to such premises.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1357, as amended, 1392, as amended ([26 U.S.C. 5203](https://www.govinfo.gov/link/uscode/26/5203), [5511](https://www.govinfo.gov/link/uscode/26/5511)))
#### § 18.16 Forms prescribed.
(a) The appropriate TTB officer is authorized to prescribe all forms required by this part. All of the information called for in each form will be furnished as indicated by the headings on the form and the instructions on or pertaining to the form. In addition, information called for in each form will be furnished as required by this part. The form will be filed in accordance with the instructions for the form.
(b) Forms prescribed by this part are available for printing through the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-249, [52 FR 5960](https://www.federalregister.gov/citation/52-FR-5960), Feb. 27, 1987; T.D. 372, [61 FR 20723](https://www.federalregister.gov/citation/61-FR-20723), May 8, 1996; T.D. ATF-436, [66 FR 5472](https://www.federalregister.gov/citation/66-FR-5472), Jan. 19, 2001; T.D. TTB-44, [71 FR 16927](https://www.federalregister.gov/citation/71-FR-16927), Apr. 4, 2006; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
### Document Requirements
#### § 18.17 Retention of documents.
The proprietor shall maintain a file of all approved applications and other documents, on or convenient to the concentrate plant premises, available for inspection by appropriate TTB officers.
(Approved by the Office of Management and Budget under control number 1513-0006)
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 18.18 Execution under penalties of perjury.
When a form or other document called for under this part is required to be executed under penalties of perjury, it will be so executed, as defined in [§ 18.11](/current/title-27/section-18.11), and signed by an authorized person.
(Act of August 16, 1954, Pub. L. 591, Chapter 736, 68A Stat. 749 ([26 U.S.C. 6065](https://www.govinfo.gov/link/uscode/26/6065)))
#### § 18.19 Security.
The concentrate plant and equipment will be so constructed, arranged, equipped, and protected as to afford adequate protection to the revenue and facilitate inspection by appropriate TTB officers.
## Subpart D—Qualification
#### § 18.21 General.
A person who desires to engage in the business of manufacturing concentrate shall submit an application for registration on form TTB F 5520.3 and receive approval as provided in this part. All written statements, affidavits, and other documents submitted in support of the application or incorporated by reference are deemed a part thereof.
(Approved by the Office of Management and Budget under control number 1513-0006)
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov, 6, 2024]
#### § 18.22 Restrictions as to location and use.
(a) *Restrictions.* A concentrate plant may not be established in any dwelling house or on board any vessel or boat, or on any premises where any other business is conducted. The premises of a concentrate plant may be used only for the business stated in the approved application for registration.
(b) *Exceptions.* The appropriate TTB officer may authorize
(1) the establishment of a concentrate plant on premise where other business is conducted, or
(2) the use of the premises of a concentrate plant for other business. A person or proprietor desiring such authorization shall submit a written application to the appropriate TTB officer. The application will describe the other business by type and the premises to be used. If the premises of a concentrate plant are to be used for other business, the relationship (if any) to the concentrate plant will be described in the application. A concentrate plant may not be established on premises where other business is conducted or used to conduct other business until the application is approved. The appropriate TTB officer may decline to approve the application or withdraw the authorization if the revenue is jeopardized or the effective administration of this part is hindered.
(Approved by the Office of Management and Budget under control number 1513-0006)
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 18.23 Registry of stills.
The provisions of [subpart C of part 29 of this chapter](/current/title-27/part-29/subpart-C) are applicable to stills or distilling apparatus located on concentrate plant premises used for the production of concentrate. As provided under [§ 29.55](/current/title-27/section-29.55), the listing of a still in the application, and approval of the application, constitutes registration of the still.
(Approved by the Office of Management and Budget under control number 1513-0006)
\[T.D. ATF-207, [50 FR 23681](https://www.federalregister.gov/citation/50-FR-23681), June 5, 1985, as amended by T.D. ATF-462, [66 FR 42736](https://www.federalregister.gov/citation/66-FR-42736), Aug. 15, 2001; T.D. TTB-196, [89 FR 87938](https://www.federalregister.gov/citation/89-FR-87938), Nov. 6, 2024]
### Application
#### § 18.24 Data for application.
Applications on form TTB F 5520.3 will include the following:
(a) Serial number;
(b) Name and principal business address of the applicant, and the location of the plant if different from the business address;
(c) Purpose for which filed;
(d) Information regarding proprietorship, supported by the organizational documents listed in [§ 18.25](/current/title-27/section-18.25); and
(e) Description of each still and a statement of its maximum capacity.
Where any of the information required by this section is on file with the appropriate TTB officer, that information, if accurate and complete, may be incorporated by reference by the applicant and made a part of the application.
(Approved by the Office of Management and Budget under control number 1513-0006)
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 18.25 Organizational documents.
The supporting information required by [paragraph (d) of § 18.24](/current/title-27/section-18.24#p-18.24\(d\)) includes, as applicable:
(a) Extracts from the articles of incorporation or from the minutes of meetings of the board of directors, authorizing the incumbents of certain offices, or other persons, to sign for the corporation;
(b) Names and addresses of the officers and directors (Do not list officers and directors who have no responsibility in connection with the operation of the concentrate plant.);
(c) Names and addresses of the 10 persons having the largest ownership or other interest in the corporation or other entity, and the nature and amount of the stockholding or other interest of each, whether the interest appears in the name of the interested party or in the name of another for that party; and
(d) In the case of an individual owner or a partnership, the name and address of every person interested in the concentrate plant, whether the interest appears in the name of the interested party or in the name of another for that party.
(Approved by the Office of Management and Budget under control number 1513-0006)
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), [87938](https://www.federalregister.gov/citation/89-FR-87938), Nov. 6, 2024]
#### § 18.26 Powers of attorney.
The proprietor shall execute and file a power of attorney on form TTB F 5000.8 for every person authorized to sign or to act on behalf of the proprietor. (Not required for persons whose authority is furnished in the application.)
(Approved by the Office of Management and Budget under control number 1513-0014)
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 18.27 Additional requirements.
(a) The appropriate TTB officer, to protect the revenue, may require:
(1) Additional information in support of an application for registration;
(2) Marks on major equipment to show serial number, capacity, and use;
(3) Installation of meters, tanks, pipes, or other apparatus; and
(4) Installation of security devices.
(b) Any proprietor refusing or neglecting to comply with any requirement of this section shall not be permitted to operate.
(Approved by the Office of Management and Budget under control number 1513-0006)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1349, as amended, 1353, as amended, 1395, as amended ([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172), [5178](https://www.govinfo.gov/link/uscode/26/5178), [5552](https://www.govinfo.gov/link/uscode/26/5552)))
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
### Changes After Original Establishment
#### § 18.31 General requirements.
Where there is a change with respect to the information shown in the application, the proprietor shall submit, within 30 days of the change (except as otherwise provided in this part), an amended application on form TTB F 5520.3.
(Approved by the Office of Management and Budget under control number 1513-0006)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1392, as amended ([26 U.S.C. 5511](https://www.govinfo.gov/link/uscode/26/5511)))
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 18.32 Change in name.
The proprietor shall submit an amended application to cover any change in the individual, firm, or corporate name.
(Approved by the Office of Management and Budget under control number 1513-0006)
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 18.33 Change in location.
The proprietor shall submit an amended application to cover a change in the location of a concentrate plant. Operation of the concentrate plant may not be commenced at the new location prior to approval of the amended application.
(Approved by the Office of Management and Budget under control number 1513-0006)
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 18.34 Continuing partnerships.
If, under the laws of the particular State, the partnership is not immediately terminated on death or insolvency of a partner, but continues until the winding up of the partnership affairs is completed, and the surviving partner has the exclusive right to the control and possession of the partnership assets for the purpose of liquidation and settlement, the surviving partner may continue to operate the plant under the prior qualification of the partnership. If the surviving partner acquires the business on completion of the settlement of the partnership, such partner shall qualify in their own name from the date of acquisition, as provided in [§ 18.35](/current/title-27/section-18.35). The rule set forth in this section also applies where there is more than one surviving partner.
(Approved by the Office of Management and Budget under control number 1513-0006)
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996; T.D. TTB-91, [76 FR 5477](https://www.federalregister.gov/citation/76-FR-5477), Feb. 1, 2011; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 18.35 Change in proprietorship.
(a) *General.* If there is a change in the proprietorship of a concentrate plant, the outgoing proprietor shall comply with the requirements of [§ 18.38](/current/title-27/section-18.38), and the successor shall, before commencing operations, file application and receive approval in the same manner as a person qualifying as the proprietor of a new concentrate plant. Processing material, concentrate and other materials may be transferred from an outgoing proprietor to a successor.
(b) *Fiduciary.* A successor to the proprietorship of a concentrate plant who is an administrator, executor, receiver, trustee, assignee, or other fiduciary shall comply with the provisions of [paragraph (a)](/current/title-27/section-18.35#p-18.35\(a\)) of this section. If the fiduciary was appointed by a court, the effective dates of the qualifying documents filed by the fiduciary shall be the effective date of the court order, or the date specified therein for the fiduciary to assume control. If the fiduciary was not appointed by a court, the date the fiduciary assumes control shall coincide with the effective date of the qualifying documents filed by the fiduciary.
(Approved by the Office of Management and Budget under control number 1513-0006)
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 18.36 Change in officers and directors.
The proprietor shall submit an amended application to cover changes in the list of officers and directors furnished under the provisions of [§ 18.25](/current/title-27/section-18.25).
(Approved by the Office of Management and Budget under control number 1513-0006)
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 18.37 Change in stockholders.
The proprietor shall submit changes in the list of stockholders furnished under the provisions of [§ 18.25](/current/title-27/section-18.25) annually on May 1. When the sale or transfer of capital stock results in a change of control or management of the business, the proprietor shall comply with the provisions of [§ 18.35](/current/title-27/section-18.35).
(Approved by the Office of Management and Budget under control number 1513-0006)
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6. 2024]
#### § 18.38 Permanent discontinuance.
A proprietor who permanently discontinues the business of a concentrate manufacturer shall, after completion of operations, file an application on form TTB F 5520.3 to cover such discontinuance, giving the date of the discontinuance.
(Approved by the Office of Management and Budget under control number 1513-0006)
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 18.39 Qualification to alternate a volatile fruit-flavor concentrate plant and a distilled spirits plant.
A proprietor of a volatile fruit-flavor concentrate plant operating a contiguous distilled spirits plant may alternate the use of such premises between the two functions through extension and curtailment by filing with the appropriate TTB officer the following information:
(a) Forms TTB F 5520.3 and TTB F 5110.41 to cover the proposed alternation of premises;
(b) A special diagram, in duplicate, delineating the premises as they will exist, both during extension and curtailment and clearly depicting all buildings, floors, rooms, areas, equipment and pipe lines (identified individually by letter or number) which are to be subject to alternation, in their relative operating sequence; and
(c) A bond (TTB F 5110.56) or a consent of surety (TTB F 5000.18) to cover the proposed alternation of premises if the proprietor is required to hold a bond under [§ 19.151 of this chapter](/current/title-27/section-19.151) to cover the distilled spirits plant premises subject to alternation.
(Approved by the Office of Management and Budget under control numbers 1513-0006, 1513-0013, 1513-0048, and 1513-0125)
\[T.D. ATF-455, [66 FR 29482](https://www.federalregister.gov/citation/66-FR-29482), May 31, 2001, as amended by T.D. TTB-146, [82 FR 1119](https://www.federalregister.gov/citation/82-FR-1119), Jan. 4, 2017; T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
#### § 18.40 Qualification to alternate volatile fruit-flavor concentrate plant and bonded wine cellar.
A proprietor of a volatile fruit-flavor concentrate plant operating a contiguous bonded wine cellar may alternate the use of each premise by extension and curtailment by filing with the appropriate TTB officer the following information:
(a) Forms TTB F 5520.3 and TTB F 5120.25 to cover the proposed alternation of premises;
(b) A special diagram, in duplicate, delineating the premises as they will exist, both during extension and curtailment and clearly depicting all buildings, floors, rooms, areas, equipment and pipe lines (identified individually by letter or number) which are to be subject to alternation, in their relative operating sequence; and
(c) A bond (TTB F 5120.36) or a consent of surety (TTB F 5000.18) to cover the proposed alternation of premises if the proprietor is required to hold a bond under [§ 24.146 of this chapter](/current/title-27/section-24.146) to cover the bonded wine cellar premises subject to alternation.
(Approved by the Office of Management and Budget under control numbers 1513-0006, 1513-0009, and 1513-0013)
\[T.D. ATF-455, [66 FR 29482](https://www.federalregister.gov/citation/66-FR-29482), May 31, 2001, as amended by T.D. TTB-146, [82 FR 1119](https://www.federalregister.gov/citation/82-FR-1119), Jan. 4, 2017; T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
#### § 18.41 Separation of premises.
The appropriate TTB officer may specify additional means of separating the volatile fruit-flavor concentrate plant from a distilled spirits plant or bonded wine cellar premises.
\[T.D. ATF-455, [66 FR 29482](https://www.federalregister.gov/citation/66-FR-29482), May 31, 2001]
#### § 18.42 Record of alternation.
After approval of the qualifying documents for the alternation of premises, the proprietor must execute a record each time that the premises are alternated. The record will contain the following information:
(a) Identification assigned by TTB, including the plant or registry number, of the volatile fruit-flavor concentrate plant and the distilled spirits plant or bonded wine cellar;
(b) Effective date and time of proposed change; and
(c) Description of the alternation that identifies the diagrams depicting the premises before and after the alternation.
(Approved by the Office of Management and Budget under control number 1513-0006)
\[T.D. ATF-455, [66 FR 29482](https://www.federalregister.gov/citation/66-FR-29482), May 31, 2001, as amended by T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 18.43 Conditions of alternation.
(a) *Curtailment of volatile fruit-flavor concentrate plant.* The proprietor must remove all concentrate, fruit mash, and juice from the volatile fruit-flavor concentrate plant alternated to a distilled spirits plant or to a bonded wine cellar premises, unless such concentrate, fruit mash, or juice is being simultaneously transferred to the distilled spirits plant or bonded wine cellar premises.
(b) *Extension of volatile fruit-flavor concentrate premises and curtailment of distilled spirits plant.* The proprietor must remove all spirits, denatured spirits, articles and wine, except for concentrate, fruit mash, or juice that is being simultaneously transferred to the volatile fruit-flavor concentrate plant.
(c) *Extension of volatile fruit-flavor concentrate premises and curtailment of bonded wine cellar premises.* The proprietor must remove all wine and spirits from the alternated bonded wine cellar premises, except for concentrate, fruit mash, or juice that is being simultaneously transferred to the volatile fruit-flavor concentrate plant.
\[T.D. ATF-455, [66 FR 29482](https://www.federalregister.gov/citation/66-FR-29482), May 31, 2001]
## Subpart E—Operations
#### § 18.51 Processing material.
(a) *General.* A proprietor may produce processing material or receive processing material produced elsewhere. Fermented processing material may not be used in the manufacture of concentrate. Processing material may be used if it contains no more alcohol than is reasonably unavoidable, and must be used when produced, or as soon thereafter as practicable.
(b) *Record of processing material.* A proprietor shall maintain a record, by kind and quantity, of processing material used.
(Approved by the Office of Management and Budget under control number 1513-0022)
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov.6, 2024]
#### § 18.52 Production of high-proof concentrate.
(a) *General.* High-proof concentrate may be produced in a concentrate plant. Concentrate having an alcohol content of more than 24 percent by volume that is fit for beverage use may not be produced in a concentrate plant.
(b) *Determination.* A proprietor shall determine whether a particular concentrate is a high-proof concentrate. However, a proprietor may at any time submit a written request to the appropriate TTB officer for a determination of whether a concentrate is unfit for beverage use. Each request for a determination will include information as to kind, percent alcohol by volume, and fold of the concentrate. The request will be accompanied by a representative 8-ounce sample of the concentrate.
(Approved by the Office of Management and Budget under control number 1513-0006)
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 18.53 Use of concentrate.
Concentrate may be used in the manufacture of any product made in the conduct of another business authorized to be conducted on concentrate plant premises under the provisions of [§ 18.22](/current/title-27/section-18.22), if such product contains less than one-half of one percent of alcohol by volume.
#### § 18.54 Transfer of concentrate.
(a) *Concentrate unfit for beverage use.* Concentrate (including high-proof concentrate and concentrate treated as provided in [paragraph (c)](/current/title-27/section-18.54#p-18.54\(c\)) of this section) unfit for beverage use may be transferred for any purpose authorized by law.
(b) *Concentrate fit for beverage use.* Concentrate fit for beverage use may be transferred only to a bonded wine cellar. If such concentrate is rendered unfit for beverage use, it may be transferred as provided in [paragraph (a)](/current/title-27/section-18.54#p-18.54\(a\)) of this section.
(c) *Rendering concentrate unfit for beverage use.* Concentrate may be rendered unfit for beverage use by reducing the alcohol content to not more than 15 percent alcohol by volume (if the reduction does not result in a concentrate of less than 100-fold), and adding to each gallon thereof, in a quantity sufficient to render the concentrate unfit for beverage use, the following:
(1) Sucrose; or
(2) Concentrated fruit juice, of at least 70 Brix, made from the same kind of fruit as the concentrate; or
(3) Malic, citric, or tartaric acid.
(d) *Record of transfer.* The proprietor shall record transfers of concentrate (including high-proof concentrate) on a record of transfer as required in [§§ 18.62](/current/title-27/section-18.62) or [18.63](/current/title-27/section-18.63).
(Approved by the Office of Management and Budget under control number 1513-0022)
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996; T.D. TTB-196 , [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 18.55 Label.
Each container of concentrate will have affixed thereto, before transfer, a label identifying the product and showing (a) the name of the proprietor; (b) the registry number of the plant; (c) the address of the plant; (d) the number of wine gallons; and (e) the percent of alcohol by volume.
(Approved by the Office of Management and Budget under control number 1513-0022)
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 18.56 Receipt of concentrate.
(a) *General.* The proprietor of a concentrate plant may accept the return of concentrate that the proprietor shipped. In addition, concentrate that is unfit for beverage use may be received from another concentrate plant for further processing in accordance with this part.
(b) *Record of concentrate received.* When concentrate is received, the proprietor must record the receipt, including the name of the consignor and a notation regarding any loss in transit or other discrepancy.
(Approved by the Office of Management and Budget under control number 1513-0022)
\[T.D. ATF-455, [66 FR 29482](https://www.federalregister.gov/citation/66-FR-29482), May 31, 2001, as amended by T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
## Subpart F—Records and Reports
#### § 18.61 Records and reports.
(a) *General.* Each proprietor shall keep records and reports as required by this part. These records and reports will be maintained on or convenient to the concentrate plant and will be available for inspection by appropriate TTB officers during business hours. Records and reports will be retained by the proprietor for three years from the date they were prepared, or three years from the date of the last entry, whichever is later.
(b) *Records.*
(1) Each proprietor shall keep such records relating to or connected with the production, transfer, or return of concentrate and the juice or mash from which it is produced, as will:
(i) Enable any appropriate TTB officer to verify operations and to ascertain whether there has been compliance with law and regulations; and
(ii) Enable the proprietor to prepare Form 1695 (5520.2).
(2) A proprietor need not prepare a specific record to meet the record requirements of this part. Any book, paper, invoice, bill of lading, or similar document that the proprietor prepares or receives for other purposes may be used, if all required information is shown.
(c) *Reports.* Each proprietor shall prepare and submit reports (including applications) as required by this part.
(Approved by the Office of Management and Budget under control number 1513-0022)
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-172, [49 FR 14941](https://www.federalregister.gov/citation/49-FR-14941), Apr. 16, 1984; T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996; T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
#### § 18.62 Record of transfer.
When concentrate, juice, or fruit mash is transferred from the concentrate plant premises, the proprietor shall prepare, in duplicate, a record of transfer. The record of transfer may consist of a commercial invoice, bill of lading, or any other similar document. The proprietor shall forward the original of the record of transfer to the consignee and retain the copy as a record. Each record of transfer shall show the following information:
(a) Name, registry number, and address of the concentrate plant;
(b) Name and address of the consignee;
(c) Kind (by fruit from which produced) and description of product, e.g. grape concentrate, concentrated grape juice, unconcentrated grape juice, grape mash;
(d) Quantity (in wine gallons); and
(e) For concentrate, percent of alcohol by volume.
(Approved by the Office of Management and Budget under control number 1513-0022)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1392, as amended ([26 U.S.C. 5511](https://www.govinfo.gov/link/uscode/26/5511)))
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-172, [49 FR 14941](https://www.federalregister.gov/citation/49-FR-14941), Apr. 16, 1984; T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 18.63 Record of transfer to a bonded wine cellar.
A proprietor transferring concentrate, juice, or fruit mash to a bonded wine cellar shall prepare a record of transfer as required by [§ 18.62](/current/title-27/section-18.62) and enter the following additional information:
(a) Registry number of the bonded wine cellar;
(b) For each product manufactured from grapes or berries, variety of grape or berry;
(c) For concentrate, fold;
(d) For juice and fruit mash, whether volatile fruit flavor has been removed and, if so, whether the identical volatile fruit flavor has been restored; and
(e) For concentrated juice, total solids content before and after concentration.
(Approved by the Office of Management and Budget under control number 1513-0022)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1392, as amended ([26 U.S.C. 5511](https://www.govinfo.gov/link/uscode/26/5511)))
\[T.D. ATF-104, [47 FR 23921](https://www.federalregister.gov/citation/47-FR-23921), June 2, 1982, as amended by T.D. ATF-172, [49 FR 14941](https://www.federalregister.gov/citation/49-FR-14941), Apr. 16, 1984; T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996; T.D. TTB-196, [89 FR 87937](https://www.federalregister.gov/citation/89-FR-87937), Nov. 6, 2024]
#### § 18.64 Photographic copies of records.
Proprietors may record, copy, or reproduce records required by this part by any process which accurately reproduces or forms a durable medium for reproducing the original of records. Whenever records are reproduced under this section, the reproduced records will be preserved in conveniently accessible files, and provisions will be made for examining, viewing, and using the reproduced record the same as if it were the original record. The reproduced record will be treated and considered for all purposes as though it were the original record. All provisions of law and regulation applicable to the original record are applicable to the reproduced record.
#### § 18.65 Annual report.
An annual report, on form TTB F 5520.2, of concentrate plant operations shall be prepared by each proprietor and forwarded in accordance with the instructions for the form. When a proprietor permanently discontinues the business of manufacturing concentrate, the proprietor shall submit the annual report in accordance with the instructions for the form.
(Approved by the Office of Management and Budget under control number 1513-0022).
\[T.D. ATF-436, [66 FR 5472](https://www.federalregister.gov/citation/66-FR-5472), Jan. 19, 2001, as amended by T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
# Part 19 — DISTILLED SPIRITS PLANTS
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-19
Full text of 27 CFR Part 19 — DISTILLED SPIRITS PLANTS. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 19—DISTILLED SPIRITS PLANTS
#### Authority:
[19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c), [1311](https://www.govinfo.gov/link/uscode/19/1311); [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5002](https://www.govinfo.gov/link/uscode/26/5002), [5004-5006](https://www.govinfo.gov/link/uscode/26/5004), [5008](https://www.govinfo.gov/link/uscode/26/5008), [5010](https://www.govinfo.gov/link/uscode/26/5010), [5041](https://www.govinfo.gov/link/uscode/26/5041), [5061](https://www.govinfo.gov/link/uscode/26/5061), [5062](https://www.govinfo.gov/link/uscode/26/5062), [5066](https://www.govinfo.gov/link/uscode/26/5066), [5081](https://www.govinfo.gov/link/uscode/26/5081), [5101](https://www.govinfo.gov/link/uscode/26/5101), [5111-5114](https://www.govinfo.gov/link/uscode/26/5111), [5121-5124](https://www.govinfo.gov/link/uscode/26/5121), [5142](https://www.govinfo.gov/link/uscode/26/5142), [5143](https://www.govinfo.gov/link/uscode/26/5143), [5146](https://www.govinfo.gov/link/uscode/26/5146), [5148](https://www.govinfo.gov/link/uscode/26/5148), [5171-5173](https://www.govinfo.gov/link/uscode/26/5171), [5175](https://www.govinfo.gov/link/uscode/26/5175), [5176](https://www.govinfo.gov/link/uscode/26/5176), [5178-5181](https://www.govinfo.gov/link/uscode/26/5178), [5201-5204](https://www.govinfo.gov/link/uscode/26/5201), [5206](https://www.govinfo.gov/link/uscode/26/5206), [5207](https://www.govinfo.gov/link/uscode/26/5207), [5211-5215](https://www.govinfo.gov/link/uscode/26/5211), [5221-5223](https://www.govinfo.gov/link/uscode/26/5221), [5231](https://www.govinfo.gov/link/uscode/26/5231), [5232](https://www.govinfo.gov/link/uscode/26/5232), [5235](https://www.govinfo.gov/link/uscode/26/5235), [5236](https://www.govinfo.gov/link/uscode/26/5236), [5241-5243](https://www.govinfo.gov/link/uscode/26/5241), [5271](https://www.govinfo.gov/link/uscode/26/5271), [5273](https://www.govinfo.gov/link/uscode/26/5273), [5301](https://www.govinfo.gov/link/uscode/26/5301), [5311-5313](https://www.govinfo.gov/link/uscode/26/5311), [5362](https://www.govinfo.gov/link/uscode/26/5362), [5370](https://www.govinfo.gov/link/uscode/26/5370), [5373](https://www.govinfo.gov/link/uscode/26/5373), [5501-5505](https://www.govinfo.gov/link/uscode/26/5501), [5551-5555](https://www.govinfo.gov/link/uscode/26/5551), [5559](https://www.govinfo.gov/link/uscode/26/5559), [5561](https://www.govinfo.gov/link/uscode/26/5561), [5562](https://www.govinfo.gov/link/uscode/26/5562), [5601](https://www.govinfo.gov/link/uscode/26/5601), [5612](https://www.govinfo.gov/link/uscode/26/5612), [5682](https://www.govinfo.gov/link/uscode/26/5682), [6001](https://www.govinfo.gov/link/uscode/26/6001), [6065](https://www.govinfo.gov/link/uscode/26/6065), [6109](https://www.govinfo.gov/link/uscode/26/6109), [6302](https://www.govinfo.gov/link/uscode/26/6302), [6311](https://www.govinfo.gov/link/uscode/26/6311), [6676](https://www.govinfo.gov/link/uscode/26/6676), [6806](https://www.govinfo.gov/link/uscode/26/6806), [7011](https://www.govinfo.gov/link/uscode/26/7011), [7510](https://www.govinfo.gov/link/uscode/26/7510), [7805](https://www.govinfo.gov/link/uscode/26/7805); [31 U.S.C. 9301](https://www.govinfo.gov/link/uscode/31/9301), [9303](https://www.govinfo.gov/link/uscode/31/9303), [9304](https://www.govinfo.gov/link/uscode/31/9304), [9306](https://www.govinfo.gov/link/uscode/31/9306).
#### Source:
T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, unless otherwise noted.
#### § 19.0 Scope.
This part concerns the operation of distilled spirits plants in the United States. Topics covered in this part include: Permits and registration procedures; bond requirements; payment of taxes; filing of claims; production, storage, and processing operations; and maintenance of records.
## Subpart A—General Provisions
#### § 19.1 Definitions.
As used in this part, the following terms shall have the meanings indicated unless either the context in which they are used requires a different meaning, or a different definition is prescribed for a particular subpart, section, or portion of this part:
*Accurate mass flow meter.* A mass flow meter for making volume determinations of bulk distilled spirits. A mass flow meter used for tax determination of bulk spirits must be certified by the manufacturer of the meter or other qualified person as accurate within a tolerance of plus or minus 0.1 percent. A mass flow meter used for all other required volume determinations of bulk spirits must be certified by the manufacturer of the meter or other qualified person as accurate within a tolerance of plus or minus 0.5 percent.
*Administrator.* The Administrator of the Alcohol and Tobacco Tax and Trade Bureau, the Department of the Treasury, Washington, D.C., or a delegate or designee of the Administrator.
*Alcoholic flavoring materials.* Any nonbeverage product on which drawback has been or will be claimed under [26 U.S.C. 5111-5114](https://www.govinfo.gov/link/uscode/26/5111), and any flavor imported free of tax which is unfit for beverage purposes. This term includes eligible flavors but does not include flavorings or flavoring extracts manufactured on the bonded premises of a distilled spirits plant as an intermediate product.
*Application for registration.* The application for registration of a distilled spirits plant that is required by [26 U.S.C. 5171(c)](https://www.govinfo.gov/link/uscode/26/5171).
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.19, Delegation of the Administrator's Authorities in [27 CFR Part 19](/current/title-27/part-19), Distilled Spirits Plants.
*Article.* A product containing denatured spirits, which was manufactured under this [part or part 20 of this chapter](/current/title-27/part-20).
*Bank.* Any commercial bank.
*Banking day.* Any day that a bank is open to the public to carry on substantially all of its banking functions.
*Basic permit.* The document that authorizes a person to engage in a designated business or activity under the Federal Alcohol Administration Act.
*Bond.* A bond is a formal guarantee for payment of monies due to TTB, including taxes imposed by [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101), and any related fines, penalties or interest that the proprietor of a distilled spirits plant may incur, up to an amount specified by the bond (the bond “penal sum”).
*Bonded premises.* The premises of a distilled spirits plant, or part thereof, as described in the application for registration, on which the conduct of distilled spirits operations defined in [26 U.S.C. 5002](https://www.govinfo.gov/link/uscode/26/5002) is authorized. This term includes premises described in the preceding sentence even if the proprietor, as authorized under the exemption set forth in [§ 19.151(d)](/current/title-27/section-19.151#p-19.151\(d\)), has not provided a bond for the premises.
*Bottler.* A proprietor of a distilled spirits plant qualified under this part as a processor that bottles distilled spirits.
*Bulk container.* Any container approved by TTB having a capacity in excess of one wine gallon.
*Bulk conveyance.* A tank car, tank truck, tank ship, tank barge, or a compartment of any such conveyance, or any other container approved by the Administrator for the conveyance of comparable quantities of spirits, including denatured spirits and wines.
*Bulk distilled spirits.* Distilled spirits in a container having a capacity in excess of one wine gallon.
*Business day.* Any day, other than a Saturday, a Sunday, or a legal holiday (which includes any holiday in the District of Columbia and any statewide holiday in the particular State in which the claim, report, or return, as the case may be, is required to be filed, or the act is required to be performed).
*Calendar quarter and quarterly.* These terms refer to the 3-month periods ending on March 31, June 30, September 30, or December 31.
*Carrier.* Any person, company, corporation, or organization, including a proprietor, owner, consignor, consignee, or bailee, who transports distilled spirits, denatured spirits, or wine in any manner for itself or others.
*CFR.* The Code of Federal Regulations.
*Commercial bank.* A bank, whether or not a member of the Federal Reserve system, which has access to the Federal Reserve Communications System or Fedwire (a communications network that allows Federal Reserve system member banks to effect a transfer of funds for their customers (or other commercial banks) to the Treasury Account at the Federal Reserve Bank of New York).
*Container.* A receptacle, vessel, or form of bottle, can, package, tank or pipeline (where specifically included) used or capable of being used to contain, store, transfer, convey, remove, or withdraw spirits and denatured spirits.
*Denaturant or denaturing material.* Any material authorized by [part 21 of this chapter](/current/title-27/part-21) for addition to spirits in the production of denatured spirits.
*Denatured spirits.* Spirits to which denaturants have been added as provided in [part 21 of this chapter](/current/title-27/part-21).
*Director of the service center.* A director of an Internal Revenue Service Center.
*Distilled spirits operations.* Any authorized distilling, warehousing, or processing operation conducted on the bonded premises of a plant qualified under this part.
*Distilled spirits plant.* An establishment which is qualified under this part to conduct distilled spirits operations.
*Distiller.* Any person who:
(1) Produces distilled spirits from any source or substance;
(2) Brews or makes mash, wort, or wash fit for distillation or for the production of distilled spirits (other than making or using of mash, wort, or wash in the authorized production of wine or beer, or in the production of vinegar by fermentation);
(3) By any process separates alcoholic spirits from any fermented substance; or
(4) Making or keeping mash, wort, or wash, has a still in his possession or use.
*Distilling material.* Any fermented or other alcoholic substance capable of, or intended for use in, the original distillation or other original processing of spirits.
*District director.* A district director of the Internal Revenue Service.
*Effective tax rate.* The net tax rate, after reduction for any credit allowable under [26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010) for wine and flavor content, at which the tax imposed on distilled spirits by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001) or [7652](https://www.govinfo.gov/link/uscode/26/7652) is paid or determined.
*Electronic fund transfer or EFT.* Any transfer of funds effected by the proprietor's commercial bank, either directly or through a correspondent banking relationship, via the Federal Reserve Communications System or Fedwire to the Treasury Account at the Federal Reserve Bank of New York.
*Eligible flavor.* A flavor which:
(1) Is of a type that is eligible for drawback of tax under [26 U.S.C. 5114](https://www.govinfo.gov/link/uscode/26/5114);
(2) Was not manufactured on the premises of a distilled spirits plant; and
(3) Was not subjected to distillation on distilled spirits plant premises such that the flavor does not remain in the finished product.
*Eligible wine.* Wine on which tax would be imposed by paragraph (1), (2), or (3) of [26 U.S.C. 5041(b)](https://www.govinfo.gov/link/uscode/26/5041) but for its removal to distilled spirits plant premises and which has not been subject to distillation at a distilled spirits plant after receipt in bond.
*Export or exportation.* A separation of goods from the mass of goods belonging to the United States with the intention of uniting them with goods belonging to a foreign country or any possession of the United States, including the Commonwealth of Puerto Rico, the U.S. Virgin Islands, American Samoa, and Guam.
*Fermenting material.* Any material that will be subject to a process of fermentation in order to produce distilling material.
*Fiduciary.* A guardian, trustee, executor, administrator, receiver, conservator, or any person acting in any fiduciary capacity for any person.
*Fiscal year.* The period October 1st of one calendar year through September 30th of the following calendar year.
*From bond.* When used with reference to withdrawals of distilled spirits, this phrase includes withdrawals from the premises of a distilled spirits plant even if the proprietor, as authorized under the exemption set forth in [§ 19.151(d)](/current/title-27/section-19.151#p-19.151\(d\)), has not provided a bond for the premises.
*Gallon or wine gallon.* The liquid measure equivalent to the volume of 231 cubic inches.
*General premises.* Any business office, service facility, or other part of the premises described in the notice of registration other than bonded premises.
*In bond.* When used to describe spirits, denatured spirits, articles, or wine, this term refers to spirits, denatured spirits, articles, or wine held under bond to secure the payment of the taxes imposed by [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101), and on which those taxes have not been determined. Spirits, denatured spirits, articles, or wine are considered to be held under bond if they are held by a proprietor who is liable for the tax, even if the proprietor is not required to provide a bond under this chapter. The term also refers to such spirits, denatured spirits, articles, or wine on the bonded premises of a distilled spirits plant, and such spirits, denatured spirits, or wines that are in transit between bonded premises (including, in the case of wine, bonded wine cellar premises). In addition, the term refers to spirits in transit from customs custody to bonded premises, and spirits withdrawn without payment of tax under [26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214), and with respect to which relief from liability has not occurred under [26 U.S.C. 5005(e)(2)](https://www.govinfo.gov/link/uscode/26/5005).
*Industrial use.* When used with reference to spirits, the meaning given to the term in [§ 19.472](/current/title-27/section-19.472).
*Intermediate product.* Any product manufactured according to an approved formula under [part 5 of this chapter](/current/title-27/part-5), intended not for sale as such but for use in the manufacture of a distilled spirits product.
*IRC.* The Internal Revenue Code of 1986, as amended.
*Kind.* Except as provided in [§ 19.487](/current/title-27/section-19.487), when used with reference to spirits, this term means class and type as prescribed in [part 5 of this chapter](/current/title-27/part-5). When used with reference to wines, this term means the class and type of wine as prescribed in [part 4 of this chapter](/current/title-27/part-4).
*Letterhead application.* A letter on a company's letterhead or other piece of paper that clearly shows the company name from a company representative with signature authority. A letterhead application is subject to TTB approval prior to any change requested in the letter.
*Letterhead notice.* A letter on a company's letterhead or other piece of paper that clearly shows the company name from a company representative with signature authority. A letterhead notice does not require approval by TTB prior to the change.
*Liquor bottle.* A bottle made of glass or earthenware, or of other suitable material approved by the Food and Drug Administration, which has been designed or is intended for use as a container for distilled spirits for sale for beverage purposes and which has been determined by the Administrator to adequately protect the revenue.
*Liter.* A metric unit of capacity equal to 1,000 cubic centimeters or 1,000 milliliters (ml) of alcoholic beverage, and equivalent to 33.814 fluid ounces.
*Lot identification number.* The package identification number described in [§ 19.485](/current/title-27/section-19.485).
*Mash, wort, wash.* Any fermented material capable of, or intended for, use as a distilling material.
*National Revenue Center:* TTB's National Revenue Center, in Cincinnati, Ohio.
*Nonindustrial use.* When used with reference to spirits, the meaning given to the term in [§ 19.472](/current/title-27/section-19.472).
*Operating permit.* The document issued pursuant to [26 U.S.C. 5171(d)](https://www.govinfo.gov/link/uscode/26/5171), that authorizes a person to engage in the business or operation described in the document.
*Package.* A cask or barrel or similar wooden container, or a drum or similar metal container.
*Package identification number.* The lot identification number described in [§ 19.490](/current/title-27/section-19.490).
*Person.* An individual, trust, estate, partnership, association, company, corporation, limited liability company, limited liability partnership, or other entity recognized by law as a person.
*Plant or distilled spirits plant.* An establishment qualified under this part for distilling, warehousing, processing, or any combination thereof.
*Plant number.* The number assigned to a distilled spirits plant by TTB.
*Processor.* Except as otherwise provided in [26 U.S.C. 5002(a)(6)](https://www.govinfo.gov/link/uscode/26/5002), any person qualified under this part who manufactures, mixes, bottles, or otherwise processes distilled spirits or denatured spirits or who manufactures any article.
*Proof.* The ethyl alcohol content of a liquid at 60 degrees Fahrenheit, stated as twice the percentage of ethyl alcohol by volume.
*Proof gallon.* A gallon of liquid at 60 degrees Fahrenheit which contains 50 percent by volume of ethyl alcohol having a specific gravity of 0.7939 at 60 degrees Fahrenheit referred to water at 60 degrees Fahrenheit as unity, or the alcoholic equivalent thereof.
*Proof of distillation.* The composite proof of the spirits when the production gauge is made, or, if the spirits are reduced in proof prior to the production gauge, the proof of the spirits prior to that reduction, unless the spirits are subsequently redistilled at a higher proof than the proof prior to reduction.
*Proprietor.* The person qualified under this part to operate a distilled spirits plant.
*Reconditioning.* The dumping of distilled spirits products in bond after their bottling or packaging, for filtration, clarification, stabilization, reformulation, or other purposes, other than destruction, denaturation, redistillation, or rebottling.
*Recovered article.* An article containing specially denatured spirits salvaged without all of its original ingredients, or an article containing completely denatured alcohol salvaged without all of the denaturants for completely denatured alcohol, as provided in [part 20 of this chapter](/current/title-27/part-20).
*Season.* The period from January 1st through June 30th (spring season) or the period from July 1st through December 31st (fall season).
*Secretary of the Treasury* or *Secretary.* The Secretary of the Treasury or a delegate of the Secretary.
*Service center.* An Internal Revenue Service Center in any of the Internal Revenue regions.
*Spirits or distilled spirits.* The substance known as ethyl alcohol, ethanol, or spirits of wine in any form (including all dilutions and mixtures thereof, from whatever source or by whatever process produced) but not denatured spirits unless specifically stated. The term does not include mixtures of distilled spirits and wine, bottled at 48° proof or less, if the mixture contains more than 50 percent wine on a proof gallon basis.
*Spirits residues.* Residues, containing distilled spirits, of a manufacturing process related to the production of an article under [part 20 of this chapter](/current/title-27/part-20).
*Tax-determined or determined.* When used with reference to any distilled spirits to be withdrawn from bond on determination of tax, that the taxable quantity of spirits has been established.
*Taxpaid.* When used with reference to distilled spirits, all applicable taxes imposed by law on those spirits have been determined or paid as provided by law.
*This chapter.* [Title 27 of the Code of Federal Regulations](/current/title-27), Chapter I, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury ([27 CFR chapter I](/current/title-27/chapter-I)).
*To bond.* When used with reference to returns of distilled spirits, this phrase includes returns to the premises of a distilled spirits plant even if the proprietor, as authorized under the exemption set forth in [§ 19.151(d)](/current/title-27/section-19.151#p-19.151\(d\)), has not provided a bond for the premises.
*Transfer in bond.* The removal of spirits, denatured spirits and wines from one bonded premises to another bonded premises.
*Treasury Account.* The General Account of the Department of the Treasury at the Federal Reserve Bank of New York.
*TTB.* The Alcohol and Tobacco Tax and Trade Bureau of the Department of the Treasury.
*TTB officer.* An officer or employee of TTB authorized to perform any function relating to the administration or enforcement of the provisions of this part.
*Unfinished spirits.* Spirits in the production system prior to production gauge.
*U.S.C.* The United States Code.
*Warehouseman.* A proprietor of a distilled spirits plant qualified under this part to store bulk distilled spirits.
*We.* TTB and TTB officers.
*Wine gallon.* The liquid measure equivalent to the volume of 231 cubic inches.
*Wine spirits.* Spirits authorized for use in wine production by [26 U.S.C. 5373](https://www.govinfo.gov/link/uscode/26/5373).
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-92a, [76 FR 19908](https://www.federalregister.gov/citation/76-FR-19908), Apr. 11, 2011; T.D. TTB-146, [82 FR 1119](https://www.federalregister.gov/citation/82-FR-1119), Jan. 4, 2017; T.D. TTB-196, [89 FR 87940](https://www.federalregister.gov/citation/89-FR-87940), Nov. 6, 2024]
#### § 19.2 Territorial extent of these regulations.
This part applies to all States of the United States and the District of Columbia.
#### § 19.3 Related regulations.
Other regulations relating to distilled spirits and distilled spirits plants are listed below:
[27 CFR Part 1](/current/title-27/part-1)—Basic Permit Requirements Under the Federal Alcohol Administration Act, Nonindustrial Use of Distilled Spirits and Wine, Bulk Sales and Bottling of Distilled Spirits.
[27 CFR Part 4](/current/title-27/part-4)—Labeling and Advertising of Wine.
[27 CFR Part 5](/current/title-27/part-5)—Labeling and Advertising of Distilled Spirits.
[27 CFR Part 16](/current/title-27/part-16)—Alcoholic Beverage Health Warning Statement.
[27 CFR Part 17](/current/title-27/part-17)—Drawback on Taxpaid Distilled Spirits Used in Manufacturing Nonbeverage Products.
[27 CFR Part 20](/current/title-27/part-20)—Distribution and Use of Denatured Alcohol and Rum.
[27 CFR Part 21](/current/title-27/part-21)—Formulas for Denatured Alcohol and Rum.
[27 CFR Part 22](/current/title-27/part-22)—Distribution and Use of Tax-Free Alcohol.
[27 CFR Part 24](/current/title-27/part-24)—Wine.
[27 CFR Part 25](/current/title-27/part-25)—Beer.
[27 CFR Part 26](/current/title-27/part-26)—Liquors and Articles from Puerto Rico and the Virgin Islands.
[27 CFR Part 27](/current/title-27/part-27)—Importation of Distilled Spirits, Wines, and Beer.
[27 CFR Part 28](/current/title-27/part-28)—Exportation of Alcohol.
[27 CFR Part 29](/current/title-27/part-29)—Stills and Miscellaneous Regulations.
[27 CFR Part 30](/current/title-27/part-30)—Gauging Manual.
[27 CFR Part 31](/current/title-27/part-31)—Alcohol Beverage Dealers.
[27 CFR Part 71](/current/title-27/part-71)—Rules of Practice in Permit Proceedings.
[31 CFR Part 225](/current/title-31/part-225)—Acceptance of Bonds Secured by Government Obligations in Lieu of Bonds with Sureties.
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
#### § 19.4 Recovery and reuse of denatured spirits in manufacturing processes.
Certain activities involving distilled spirits are not covered by this part. Instead, manufacturers who engage in any of the activities listed below are required to comply with the regulations in [part 20 of this chapter](/current/title-27/part-20) relating to the use and recovery of spirits or denatured spirits. Those activities are:
(a) Use of denatured spirits, or articles or substances containing denatured spirits, in a process wherein any part or all of the spirits, including denatured spirits, are recovered;
(b) Use of denatured spirits in the production of chemicals which do not contain spirits but which are used on the permit premises in the manufacture of other chemicals resulting in spirits as a byproduct; or
(c) Use of chemicals or substances which do not contain spirits or denatured spirits (but which were manufactured with specially denatured spirits) in a process resulting in spirits as a byproduct.
([26 U.S.C. 5273](https://www.govinfo.gov/link/uscode/26/5273))
#### § 19.5 Manufacturing products unfit for beverage use.
(a) *General.* Except as provided in [paragraph (b)](/current/title-27/section-19.5#p-19.5\(b\)) of this section, apothecaries, pharmacists, or manufacturers who manufacture or compound any of the following products using tax paid or tax determined distilled spirits are not required to register and qualify as a distilled spirits plant (processor):
(1) Medicines, medicinal preparations, food products, flavors, flavoring extracts, and perfume, conforming to the standards for approval of nonbeverage drawback products found in [§§ 17.131](/current/title-27/section-17.131) through [17.137 of this chapter](/current/title-27/section-17.137), whether or not drawback is actually claimed on those products. Except as provided in [paragraph (c)](/current/title-27/section-19.5#p-19.5\(c\)) of this section, a formula does not need to be submitted if drawback is not desired;
(2) Patented and proprietary medicines that are unfit for use for beverage purposes;
(3) Toilet, medicinal, and antiseptic preparations and solutions that are unfit for use for beverage purposes;
(4) Laboratory reagents, stains, and dyes that are unfit for use for beverage purposes; and
(5) Flavoring extracts, syrups, and concentrates that are unfit for use for beverage purposes.
(b) *Exception for beverage products.* Products identified in [part 17 of this chapter](/current/title-27/part-17) as being fit for beverage use are alcoholic beverages. Bitters, patent medicines, and similar alcoholic preparations that are fit for beverage purposes, although held out as having certain medicinal properties, are also alcoholic beverages. These products are subject to the provisions of this part and must be manufactured on the bonded premises of a distilled spirits plant.
(c) *Submission of formulas and samples.* When requested by the appropriate TTB officer or when the manufacturer wishes to ascertain whether a product is unfit for beverage use, the manufacturer will submit the formula and a sample of the product to the appropriate TTB officer for examination. TTB will determine whether the product is unfit for beverage use and whether manufacture of the product is exempt from qualification requirements.
(d) *Change of formula.* If TTB finds that a product manufactured under [paragraph (a)](/current/title-27/section-19.5#p-19.5\(a\)) of this section is being used for beverage purposes, or for mixing with beverage spirits other than by a processor, TTB will notify the manufacturer to stop manufacturing the product until the formula is changed to make the product unfit for beverage use and the change is approved by the appropriate TTB officer. However, the provisions of this paragraph will not prohibit products which are unfit for beverage use from use in small quantities for flavoring drinks at the time of serving for immediate consumption.
([26 U.S.C. 5002](https://www.govinfo.gov/link/uscode/26/5002), [5171](https://www.govinfo.gov/link/uscode/26/5171))
## Subpart B—Administrative and Miscellaneous Provisions
#### § 19.11 Right of entry and examination.
A TTB officer may enter any distilled spirits plant, any other premises where distilled spirits operations are carried on, or any structure or place used in connection with distilled spirits operations, at any time of day or night. A TTB officer may examine materials, equipment, and facilities, and make any gauges and inventories. Whenever a TTB officer states his or her name and office and demands admittance but is not admitted into the premises or place, the TTB officer is authorized to use all necessary force to gain entry.
([26 U.S.C. 5203](https://www.govinfo.gov/link/uscode/26/5203))
#### § 19.12 Furnishing facilities and assistance.
The proprietor is required to provide TTB officers with the necessary facilities and assistance in order to gauge spirits in any container, or to examine any apparatus, equipment, containers, or materials, at the distilled spirits plant. Also, when requested by a TTB officer, the proprietor must:
(a) Open any doors and open for examination any containers on the plant premises; and
(b) Provide the exact locations (including the number of containers at each location) of all packages and similar portable approved containers within a given lot and the locations (that is, buildings, rooms, or areas) where spirits in cases are stored.
([26 U.S.C. 5202](https://www.govinfo.gov/link/uscode/26/5202), [5203](https://www.govinfo.gov/link/uscode/26/5203))
#### § 19.13 Assignment of officers and supervision of operations.
(a) *General.* TTB may assign TTB officers to a distilled spirits plant and utilize controls, such as Government locks and seals, if TTB decides that those measures are necessary to effectively supervise the operations. If TTB decides that such supervision is necessary:
(1) The proprietor must obtain approval of the plant's hours of operations from the appropriate TTB officer;
(2) TTB may require the proprietor to submit a schedule of operations to a TTB officer; and
(3) TTB may require the proprietor to delay any distilled spirits operation until the proprietor can conduct it in the presence of a TTB officer.
(b) *Notification of supervision.* If TTB determines that supervision of plant operations is necessary, TTB will notify the proprietor of the extent to which TTB intends to supervise those operations. If TTB determines later that TTB supervision is no longer necessary, the appropriate TTB officer will notify the proprietor of that fact.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201), [5202](https://www.govinfo.gov/link/uscode/26/5202), [5553](https://www.govinfo.gov/link/uscode/26/5553))
#### § 19.14 Delegation of the Administrator's authorities to the appropriate TTB officer.
Most of the regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.19, Delegation of the Administrator's Authorities in [27 CFR Part 19](/current/title-27/part-19), Distilled Spirits Plants. Interested persons may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
#### § 19.15 Forms prescribed.
(a) TTB prescribes and makes available all forms required by this part. Persons completing forms must furnish all of the information required by each form, as indicated by the headings and instructions on the form or as required by these regulations. Each form must be filed in accordance with this part and the instructions for the form.
(b) Persons may obtain TTB forms by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the TTB National Revenue Center, 550 Main Street, Suite 8002, Cincinnati, Ohio 45202.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
#### § 19.16 Modified forms.
If a proprietor wishes to modify a form prescribed by these regulations, the proprietor must submit an application for approval of an alternate method or procedure (see [§§ 19.26](/current/title-27/section-19.26) and [19.27](/current/title-27/section-19.27)) to the appropriate TTB officer. The proprietor may not use a modified form until TTB approves the application. The application to modify a form must be accompanied by:
(a) A copy of each proposed form with typical entries; and
(b) A statement explaining the need to use a modified form.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.17 Detention of containers.
(a) *General.* A TTB officer may detain any container containing, or supposed to contain, spirits when the appropriate TTB officer believes that the required tax on those spirits has not been paid or determined or that the removal of the container is in violation of law or the provisions of this part. The appropriate TTB officer will hold the container at a safe place until it is determined whether the detained property is subject to forfeiture.
(b) *Limitation.* A detention under [paragraph (a)](/current/title-27/section-19.17#p-19.17\(a\)) of this section may not exceed 72 hours without process of law or intervention of the appropriate TTB officer. However, the detained container may be kept on the premises beyond the 72-hour period without process of law or intervention if the person possessing the container immediately before its detention executes a waiver of this 72-hour limitation on detention of the container.
([26 U.S.C. 5311](https://www.govinfo.gov/link/uscode/26/5311))
#### § 19.18 Samples for the United States.
TTB officers are authorized to take samples of spirits, denatured spirits, articles, wines, or other materials from a distilled spirits plant for analysis, testing, or to determine whether the product complies with the law and regulations. When TTB removes a sample from a plant, TTB will give the proprietor a receipt for the sample.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201), [5203](https://www.govinfo.gov/link/uscode/26/5203), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362))
#### § 19.19 Discontinuance of storage facilities.
If TTB determines that a proprietor's bonded storage facility for spirits is unsafe or unfit for use, or causes excessive waste or loss of spirits, TTB can require that the proprietor discontinue using the facility. Further, TTB can require the transfer of the spirits stored in the facility to another storage facility. The transfer will take place at such time and under such supervision as TTB may require, and will be at the expense of the owner or warehouseman of the spirits. If the owner or warehouseman fails to transfer the spirits within the prescribed time or to pay the expense of the transfer, as ascertained and determined by the appropriate TTB officer, the spirits may be seized and sold. TTB will first apply the proceeds of such sale to the payment of the taxes due on the spirits and then to the cost and expense of the sale and removal, and the remaining balance, if any, will be paid over to the owner or warehouseman.
([26 U.S.C. 5236](https://www.govinfo.gov/link/uscode/26/5236))
#### § 19.20 Installation of meters, tanks, and other apparatus.
The appropriate TTB officer may require the proprietor to install meters, tanks, pipes, or any other apparatus at the proprietor's plant if that officer decides that the equipment is necessary for the protection of the revenue. If the proprietor refuses or fails to install any such apparatus when instructed to do so, the proprietor will not be permitted to conduct business as a distilled spirits plant.
([26 U.S.C. 5552](https://www.govinfo.gov/link/uscode/26/5552))
### Alternate Methods or Procedures and Experimental Operations
#### § 19.26 Alternate methods or procedures.
(a) *General.* The appropriate TTB officer may approve the use of an alternate method or procedure that varies from the regulatory requirements in this part if the proprietor shows good cause for its use and the alternate method or procedure:
(1) Is not contrary to law;
(2) Will not have the effect of waiving an existing regulatory requirement;
(3) Is consistent with the purpose and effect of the method or procedure prescribed in this part;
(4) Provides equal security to the revenue; and
(5) Will not cause an increase in cost to the Government and will not hinder TTB's administration of this part.
(b) *Exceptions.* TTB will not authorize the use of an alternate method or procedure relating to the giving of any bond, or to the assessment, payment, or collection of tax.
(c) *Prior approvals.* Alternate methods or procedures in effect prior to April 18, 2011, which are not contrary to the regulations in this part, are preserved until renewed unless revoked by operation of law due to the enactment of law that is contrary to the alternate method or procedure.
([26 U.S.C. 5552](https://www.govinfo.gov/link/uscode/26/5552), [5556](https://www.govinfo.gov/link/uscode/26/5556))
#### § 19.27 Application for and use of alternate method or procedure.
(a) *Application.* If a proprietor wishes to use an alternate method or procedure as described in [§ 19.26](/current/title-27/section-19.26), the proprietor must submit a written letterhead application to the appropriate TTB officer for approval. The application must identify the method or procedure specified in the regulation, must describe the proposed alternate method or procedure in detail, and must explain why the alternate method or procedure is needed.
(b) *Approval and use.* The proprietor may not use an alternate method or procedure until the appropriate TTB officer has in writing approved the proprietor's application. During the period that the proprietor is authorized to use the alternate method or procedure, the proprietor must comply with any conditions imposed on its use by TTB. TTB may withdraw the approval to use the alternate method or procedure if TTB finds that the revenue is jeopardized, that the alternate method or procedure hinders effective administration of the laws or regulations, that the proprietor has violated any of the conditions imposed by TTB, or that the circumstances that gave rise to the need for the alternate method or procedure no longer exist.
(c) *Retention.* The proprietor must retain each alternate method or procedure approval as part of the proprietor's records and must make the approval available for examination by TTB officers upon request.
([26 U.S.C. 5552](https://www.govinfo.gov/link/uscode/26/5552), [5556](https://www.govinfo.gov/link/uscode/26/5556))
#### § 19.28 Emergency variations from requirements.
(a) *Application.* A proprietor may request emergency approval of the use of a method or procedure relating to construction, equipment, and methods of operation that represents a variance from the requirements of this part. When a proprietor wishes to use an emergency method or procedure, the proprietor must submit a written letterhead application to the appropriate TTB officer for approval; the proprietor may send the application via regular mail, email, or facsimile transmission. The application must describe the proposed emergency method or procedure and the emergency situation it will address. For purposes of this section, an emergency is considered to exist only if it results from a weather or other natural event or from an accident or other event not involving an intentional act on the part of the proprietor.
(b) *Approval.* The appropriate TTB officer may approve in writing the use of an emergency method or procedure if the proprietor demonstrates that an emergency exists and the proposed method or procedure:
(1) Is not contrary to law;
(2) Is necessary to address the emergency situation;
(3) Will afford the same security and protection to the revenue as intended by the regulations; and
(4) Will not hinder the effective administration of this subpart.
(c) *Terms of emergency method or procedure approval and use.*
(1) The proprietor may not use an emergency method or procedure until the application has been approved by TTB except when the emergency method or procedure requires immediate implementation to correct a situation that threatens life or property. In a situation involving a threat to life or property, the proprietor may implement the corrective action while concurrently notifying the appropriate TTB officer by telephone of the action and filing the required written application. Use of the emergency method or procedure must conform to any conditions specified in the approval.
(2) The proprietor must retain the emergency method or procedure approval as part of the proprietor's records and must make the approval available for examination by TTB officers upon request.
(3) The emergency method or procedure will automatically terminate when the situation that created the emergency no longer exists. TTB may withdraw the approval to use the emergency method or procedure if TTB finds that the revenue is jeopardized, that the emergency method or procedure hinders effective administration of the laws or regulations, or that the proprietor has failed to follow any of the conditions specified in the approval. When use of the emergency method or procedure terminates, the proprietor must revert to full compliance with all applicable regulations.
([26 U.S.C. 5178](https://www.govinfo.gov/link/uscode/26/5178), [5556](https://www.govinfo.gov/link/uscode/26/5556))
#### § 19.29 Exemptions for national defense and disasters.
Whenever TTB finds it is necessary to meet the requirements of national defense or necessary or desirable by reason of disaster, TTB may temporarily exempt the proprietor from any provisions of the internal revenue laws and the provisions of this part relating to distilled spirits, except those requiring the payment of tax.
([26 U.S.C. 5561](https://www.govinfo.gov/link/uscode/26/5561), [5562](https://www.govinfo.gov/link/uscode/26/5562))
#### § 19.31 Pilot operations.
Except for the filing of any bond or the payment of any tax provided for in [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101), TTB may waive any regulatory provision in this part for temporary pilot or experimental operations for the purpose of facilitating the development and testing of improved methods of governmental supervision (necessary for the protection of the revenue) over plants. For this purpose, the appropriate TTB officer may, with the approval of the proprietor thereof, designate any plant for such operations. Any waiver granted under this section must be in writing and signed by the appropriate TTB officer. The waiver will identify the provisions of law and/or regulations waived and the period of time during which the waiver will be effective. The appropriate TTB officer may terminate the waiver if he or she determines that the waiver jeopardizes the revenue.
([26 U.S.C. 5554](https://www.govinfo.gov/link/uscode/26/5554))
#### § 19.32 Experimental distilled spirits plants.
(a) *General.* The appropriate TTB officer may authorize the establishment and operation of experimental plants for specific and limited periods of time solely for experimentation in, or development of:
(1) Sources of materials from which spirits may be produced;
(2) Processes by which spirits may be produced or refined; or
(3) Industrial uses of spirits.
(b) *Waiver.* The appropriate TTB officer may waive any provision of [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101) (other than [26 U.S.C. 5312](https://www.govinfo.gov/link/uscode/26/5312)) and of this part (other than [§ 19.33](/current/title-27/section-19.33)) to the extent necessary to effectuate the purposes of [26 U.S.C. 5312(b)](https://www.govinfo.gov/link/uscode/26/5312) as outlined in [paragraph (a)](/current/title-27/section-19.32#p-19.32\(a\)) of this section. However, TTB will not waive the payment of any tax on spirits removed from an experimental plant.
([26 U.S.C. 5312](https://www.govinfo.gov/link/uscode/26/5312))
#### § 19.33 Application to establish experimental plants.
(a) *Application requirements.* Any person who wishes to establish an experimental plant for the purposes specified in [§ 19.32](/current/title-27/section-19.32) must submit a written application to the appropriate TTB officer and obtain approval of the proposed experimental plant. The application must:
(1) State the nature, extent, and purpose of the operations to be conducted;
(2) Describe the operations and equipment;
(3) Describe the location of the plant (including the proximity to other premises or operations subject to the provisions of [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101)); and
(4) Describe the security measures to be provided.
(b) *Bond.* The applicant must file a bond with the application in such form and penal sum as required by the appropriate TTB officer.
(c) *Approval of application.* Before approving the application, the appropriate TTB officer may require that the applicant submit additional information if necessary. TTB will not approve the application and permit operations until the plant conforms to the specifications stated in the application and the applicant complies with provisions of [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101) and with any provisions in this part that are not specifically waived.
([26 U.S.C. 5312](https://www.govinfo.gov/link/uscode/26/5312))
#### § 19.34 Experimental or research operations by scientific institutions and colleges of learning.
(a) *General.* The appropriate TTB officer may authorize any scientific university, college of learning, or institution of scientific research to produce, receive, blend, treat, test, and store spirits, without payment of tax, for experimental or research use but not for consumption (other than in organoleptic tests) or sale, in quantities as may be reasonably necessary for those purposes.
(b) *Waiver.* For purposes of this section, the appropriate TTB officer may waive any provision of [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101) (other than [26 U.S.C. 5312](https://www.govinfo.gov/link/uscode/26/5312)) or this part (other than this section and [§ 19.35](/current/title-27/section-19.35)) to the extent necessary to effect the purposes of [26 U.S.C. 5312(a)](https://www.govinfo.gov/link/uscode/26/5312). However, TTB will not waive the payment of any tax on distilled spirits removed from any university, college, or institution.
([26 U.S.C. 5312](https://www.govinfo.gov/link/uscode/26/5312))
#### § 19.35 Application by scientific institutions and colleges of learning for experimental or research operations.
(a) *Application requirements.* A university, college, or scientific institution that wants to conduct any of the experimental or research operations mentioned in [§ 19.34](/current/title-27/section-19.34), must submit a written application to the appropriate TTB officer and obtain approval for the proposed operations. The application may be submitted on letterhead. The application must:
(1) State the nature, extent, and purpose of the operations to be conducted;
(2) Describe the operations and equipment;
(3) Describe the location where the operations will be conducted (including identification of the building or buildings, or the portions thereof to be used); and
(4) Describe the security measures to be provided.
(b) *Bond.* The applicant must file a bond with the application in such form and amount as required by the appropriate TTB officer.
(c) *Approval of application.* Before approving the application, the appropriate TTB officer may require that the applicant submit additional information. The applicant may not commence operations until authorized by the appropriate TTB officer.
(d) *Records and reports.* Any university, college, or institution authorized to conduct experimental or research operations must maintain records of the quantities of spirits produced, received, and used each day and must make these records available for inspection by TTB officers. Universities, colleges, or institutions authorized to conduct experimental or research operations are not required to submit reports of operations to TTB unless specifically required by the appropriate TTB officer.
(e) *Discontinuance of operations.* When operations authorized under this section are discontinued, the university, college, or institution must destroy all remaining spirits and notify the appropriate TTB officer that operations are discontinued.
([26 U.S.C. 5312](https://www.govinfo.gov/link/uscode/26/5312))
#### § 19.36 Spirits produced in industrial processes.
(a) *General.* Except as otherwise provided in [paragraph (b)](/current/title-27/section-19.36#p-19.36\(b\)) of this section, any person who produces distilled spirits in an industrial process, including spirits produced as a byproduct in connection with chemical or other processes, is considered to be a distiller and therefore is required to qualify such operations as a distilled spirits plant and is subject to the registration requirements under the provisions of [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101) and this part.
(b) *Waiver.* TTB may waive application of any provision of [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101), or of this part, involving the production of nonpotable chemical mixtures containing spirits, including any provision relating to qualification (except the dealer registration requirement) if the mixture is produced:
(1) For transfer to the bonded premises of a distilled spirits plant for completion of distilling; or
(2) As a byproduct which would require expensive and complex equipment for the recovery of spirits, and the mixture:
(i) Would be destroyed on the premises where produced; or
(ii) Would contain a minimum quantity of spirits, taking into account the procedure employed, would not be subjected to further operations solely for the purification or recovery of spirits, and would be found by TTB to be as nonpotable and as difficult to recover as completely denatured alcohol.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.37 Application for industrial processes waiver.
(a) *Application for waiver.* If the producer of a nonpotable chemical mixture containing spirits, as described in [§ 19.36](/current/title-27/section-19.36), wishes to obtain a waiver from the provisions of [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101), or of this part, the producer must submit a written waiver application to the appropriate TTB officer. The application must include the following information, as applicable:
(1) The name and address of the producer;
(2) Chemical composition and source of the nonpotable mixture;
(3) Approximate percentages of chemicals and spirits in the mixture;
(4) Method of operation proposed;
(5) Bonded premises where the mixture will be distilled; and
(6) Any other pertinent information required by the appropriate TTB officer.
(b) *Approval of waiver.* The appropriate TTB officer may approve the waiver if it will not jeopardize the revenue and will not hinder supervision of the operations. Approval of the application may be subject to such terms and conditions, and to the furnishing of any bond, that the appropriate TTB officer determines is necessary.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.38 Approval of required documents.
Except as otherwise provided in this part, the appropriate TTB officer is authorized to approve all documents, bonds, and consents of surety required by this part.
([26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171), [5172](https://www.govinfo.gov/link/uscode/26/5172), [5173](https://www.govinfo.gov/link/uscode/26/5173), and [5551](https://www.govinfo.gov/link/uscode/26/5551))
### “Penalties of Perjury” Declaration
#### § 19.45 Execution under penalties of perjury.
(a) *Declaration.* When TTB requires under this part that a document be executed under penalties of perjury, the document must contain the following declaration:
I declare under the penalties of perjury that this \[insert type of document, such as report, or claim], including supporting documents, has been examined by me and, to the best of my knowledge and belief, is true, correct, and complete.
(b) *Signing.* The declaration in [paragraph (a)](/current/title-27/section-19.45#p-19.45\(a\)) of this section must bear the signature and title of the proprietor or a duly authorized representative.
([26 U.S.C. 6065](https://www.govinfo.gov/link/uscode/26/6065))
## Subpart C—Restrictions on Production, Location, and Use of Plants
#### § 19.51 Home production of distilled spirits prohibited.
A person may not produce distilled spirits at home for personal use. Except as otherwise provided by law, distilled spirits may only be produced by a distilled spirits plant registered with TTB under the provisions of [26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171). All distilled spirits produced in the United States are subject to the tax imposed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001).
([26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5601](https://www.govinfo.gov/link/uscode/26/5601), and [5602](https://www.govinfo.gov/link/uscode/26/5602))
### Rules for Location and Use of a DSP
#### § 19.52 Restrictions on location of plants.
A person who intends to establish a distilled spirits plant may not locate it in any of the following places:
(a) In any residence, shed, yard, or enclosure connected to a residence;
(b) On any vessel or boat;
(c) Where beer or wine is produced;
(d) Where liquors are sold at retail; or
(e) Where any other business is conducted except as provided in [§ 19.54](/current/title-27/section-19.54).
([26 U.S.C. 5178](https://www.govinfo.gov/link/uscode/26/5178))
#### § 19.53 Continuity of plant premises.
As a general rule, the premises of a distilled spirits plant must be continuous except for separations by public waterways, roads, or carrier rights-of-way. However, the appropriate TTB officer may approve the registration of the plant where there are separations of the plant premises and all parts of the plant are in the same general location if:
(a) There is no jeopardy to revenue caused by the separation of premises; and
(b) The separation of premises does not create administrative problems for TTB.
([26 U.S.C. 5178](https://www.govinfo.gov/link/uscode/26/5178))
#### § 19.54 Use of distilled spirits plant premises.
(a) *General.* A person may not conduct any business or operation on the premises of a distilled spirits plant unless the business or operation is authorized by the notice of registration on file with TTB or authorized under [§ 19.55](/current/title-27/section-19.55).
(b) *Bonded premises.* The proprietor must use the bonded premises of a distilled spirits plant exclusively for distilled spirits operations. The proprietor must store packaged spirits, cases of spirits, or portable containers of spirits in a room or building on bonded premises. TTB may approve another method of storage as an alternate method or procedure. However, the proprietor must apply for, and receive approval for another method of storage from the appropriate TTB officer in accordance with [§ 19.27](/current/title-27/section-19.27) before using that method.
(c) *General premises.* General premises are any portion of the distilled spirits plant described in the notice of registration other than bonded premises. A person may not use the general premises of a distilled spirits plant for any operation required under the provisions of this part to be conducted on bonded premises.
([26 U.S.C. 5178](https://www.govinfo.gov/link/uscode/26/5178))
#### § 19.55 Other businesses.
(a) The appropriate TTB officer may authorize the conduct of a business other than that of a distiller, warehouseman, or processor on the premises of a distilled spirits plant if:
(1) The business is not prohibited by [26 U.S.C. 5601(a)(6)](https://www.govinfo.gov/link/uscode/26/5601);
(2) The business will not jeopardize the revenue;
(3) The business will not hinder TTB's effective administration of this part; and
(4) The business will not be contrary to law.
(b) A person who wishes to conduct another business at a distilled spirits plant must apply for such authorization in accordance with [§ 19.73(b)](/current/title-27/section-19.73#p-19.73\(b\)) or [§ 19.120(b)](/current/title-27/section-19.120#p-19.120\(b\)) and receive approval from the appropriate TTB officer before operating the other business. The approval will specify whether the other business may be conducted on the bonded premises or on the general premises.
([26 U.S.C. 5178](https://www.govinfo.gov/link/uscode/26/5178))
#### § 19.56 Bonded warehouses not on premises qualified for production of spirits.
(a) *Criteria for establishment.* As a general rule, if a person intends to establish a bonded warehouse, other than one established on the bonded premises of a distilled spirits plant qualified for the production of spirits or contiguous to such premises, the proposed warehouse must have a minimum capacity of 250,000 wine gallons of bulk spirits and the need for such a warehouse must be clearly shown. TTB may consider an application to establish a bonded warehouse with less capacity provided a need is clearly shown.
(b) *Application.* The applicant must submit a separate written request along with the application for registration explaining the need for the bonded warehouse. TTB may approve the application for registration if:
(1) The proposed location for the warehouse will not jeopardize the revenue; and
(2) The applicant provides evidence showing sufficient need for establishing such a warehouse.
(c) *Special conditions.* Based on the application and request, TTB may limit the type of operations that may be conducted at the bonded warehouse. The proprietor of a warehouse approved for a limited type of operation may not expand or change the operation to include any other type of operation without application to and approval of the appropriate TTB officer.
([26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171) and [5178](https://www.govinfo.gov/link/uscode/26/5178))
### Conveyance of Spirits or Wines on Plant Premises
#### § 19.58 Taxpaid spirits or wines on bonded premises.
The proprietor may move tax paid or tax determined spirits or wines across bonded premises. However, tax paid or tax determined spirits or wines may not be stored or allowed to remain on the bonded premises. The proprietor must keep tax paid or tax determined spirits or wines separate from spirits or wines on which tax has not been paid or determined. Spirits returned to bonded premises under the provisions of [26 U.S.C. 5215](https://www.govinfo.gov/link/uscode/26/5215) may remain on bonded premises.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201) and [5612](https://www.govinfo.gov/link/uscode/26/5612))
#### § 19.59 Conveyance of untaxpaid spirits or wines within a distilled spirits plant.
(a) The proprietor may move untaxpaid spirits or wines:
(1) Between different portions of the bonded premises at the same distilled spirits plant or across any other premises of that plant;
(2) Over any public thoroughfare by uninterrupted transportation; or
(3) Over a private roadway by uninterrupted transportation. The owner or lessee of the private roadway must agree in writing to allow TTB officers access to the roadway to perform their duties.
(b) The conveyance of untaxpaid spirits or wines under [paragraph (a)](/current/title-27/section-19.59#p-19.59\(a\)) of this section is subject to the following conditions. The proprietor:
(1) May not store or allow the untaxpaid spirits or wines to remain on any premises other than the bonded premises;
(2) Must keep the untaxpaid spirits or wines separate from spirits on which the tax has been paid or determined;
(3) Must submit to the appropriate TTB officer a description of the means, route of the conveyance, and the areas of the distilled spirits plant, public thoroughfare or roadways across which spirits or wines will be conveyed, and a copy of any agreement with the owner or lessee of a private roadway. The appropriate TTB officer must approve the proposed means and route of conveyance and any agreement; and
(4) Must provide a consent of surety on the operations or unit bond (TTB Form 5000.18) extending the terms of the bond to cover the conveyance of the spirits or wines.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201) and [5601](https://www.govinfo.gov/link/uscode/26/5601))
#### § 19.60 Spirits in customs custody.
A proprietor may move distilled spirits that are in customs custody across distilled spirits plant premises if the proprietor:
(a) Submits to the appropriate TTB officer a description of the means and route of the conveyance and the areas of the distilled spirits plant across which spirits will be conveyed and receives approval from the appropriate TTB officer for the method of movement;
(b) Does not store or allow the spirits to remain on the premises of the distilled spirits plant;
(c) Moves the spirits expeditiously, and keeps the spirits separate and apart from other spirits on the premises; and
(d) Provides a consent of surety on the operations or unit bond (TTB Form 5000.18) extending the terms of the bond to cover the conveyance of the spirits.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
## Subpart D—Registration of a Distilled Spirits Plant and Obtaining a Permit
#### § 19.71 Registration and permits in general.
Except as otherwise provided in this part, a person may only conduct operations as a distiller, warehouseman, or processor of distilled spirits on the bonded premises of a distilled spirits plant. In order to establish a distilled spirits plant, a person must register the plant with TTB and obtain an operating permit and/or a basic permit. This subpart covers the requirements for registering a plant and obtaining an operating permit under the IRC. [Part 1 of this chapter](/current/title-27/part-1) covers the requirements for obtaining a basic permit under the Federal Alcohol Administration Act.
([26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171))
### Requirements for Registering a Plant
#### § 19.72 General requirements for registration.
(a) *Establishment.* A person who wishes to establish a distilled spirits plant must intend to conduct operations as a distiller, as a warehouseman, or both. A person cannot establish a distilled spirits plant solely for the processing of spirits.
(b) *Registration.* Before beginning operations as a distilled spirits plant, a person must submit an application for registration and receive approval from TTB. The following rules apply to an application for registration:
(1) The applicant must apply for registration on form TTB F 5110.41, Registration of Distilled Spirits Plant, and submit the application to the appropriate TTB officer;
(2) TTB will consider all written statements, affidavits, and other documents supporting the application as part of the application;
(3) If the appropriate TTB officer determines that the original application for registration cannot be approved because it contains incomplete or incorrect information, TTB may require that the applicant file an additional TTB F 5110.41, or submit other documentation to complete or correct the original application; and
(4) The applicant must file any additional forms or submit any other documentation within 60 days of the appropriate TTB officer's request.
([26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171), [5172](https://www.govinfo.gov/link/uscode/26/5172))
#### § 19.73 Information required in application for registration.
(a) *General.* The application for registration on form TTB F 5110.41, Registration of Distilled Spirits Plant, must include the following information:
(1) The serial number;
(2) The name, principal business address, and location of the distilled spirits plant if different from the applicant's business address;
(3) The operations that will be conducted;
(4) The purpose for filing the application;
(5) A statement describing the type of business organization and the persons involved in the business in accordance with [§ 19.93](/current/title-27/section-19.93). However, if any of this information is already on file with the appropriate TTB officer, the applicant may advise TTB that the information on file is part of the application for registration;
(6) A list of any operating permits, basic permits, operations bonds, withdrawal bonds, and/or unit bonds, including the amount of any bond(s) and the name of the surety on the bond;
(7) In the case of a corporation, a list of the offices and officers authorized by the articles of incorporation or the board of directors to sign or act on behalf of the corporation;
(8) A description of the plant in accordance with [§ 19.74](/current/title-27/section-19.74);
(9) A list of major equipment in accordance with [§ 19.75](/current/title-27/section-19.75);
(10) A statement of the maximum number of proof gallons that will be produced in the distillery during a period of 15 days, stored on the bonded premises, and in transit to the bonded premises. This statement is not required if the operations or unit bond is in the maximum amount;
(11) A statement that accounting records will be maintained in accordance with generally accepted accounting principles;
(12) A statement of plant security measures in accordance with [§ 19.76](/current/title-27/section-19.76);
(13) The following information if the applicant intends to operate as a distiller:
(i) Total proof gallons of spirits that can be produced daily;
(ii) A statement of production procedures in accordance with [§ 19.77](/current/title-27/section-19.77); and
(iii) A statement as to whether spirits will be redistilled;
(14) The following information if the applicant intends to operate as a warehouseman:
(i) A description of the storage system; and
(ii) Total amount of bulk wine gallons that can be stored;
(15) The following information if the applicant intends to operate as a processor:
(i) A statement whether spirits will or will not be bottled, denatured, redistilled, and whether articles will be manufactured; and
(ii) A description of the storage system for spirits bottled and cased or otherwise packaged and placed in approved containers for removal from bonded premises; and
(16) A statement whether the applicant is required to furnish a bond under [§ 19.151](/current/title-27/section-19.151).
(b) *Other business.* If the applicant intends to conduct any other business on the distilled spirits plant premises as authorized under [§ 19.55](/current/title-27/section-19.55), the following information must be submitted with the application:
(1) A description of the business;
(2) A list of buildings and equipment that will be used; and
(3) A statement of the relationship of the business to the distilled spirits operations at the plant.
(c) *Additional information.* The applicant must furnish any additional information needed by TTB to determine if the application for registration should be approved.
([26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171), [5172](https://www.govinfo.gov/link/uscode/26/5172), [6001](https://www.govinfo.gov/link/uscode/26/6001))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1119](https://www.federalregister.gov/citation/82-FR-1119), Jan. 4, 2017]
#### § 19.74 Description of the plant.
As required by [§ 19.73(a)(8)](/current/title-27/section-19.73#p-19.73\(a\)\(8\)), the application for registration must include a description of the distilled spirits plant. This information must:
(a) Describe each tract of land covered by distilled spirits plant;
(b) Clearly distinguish between the bonded premises and any general premises;
(c) Provide directions and distances in enough detail to enable the appropriate TTB officer to readily determine the boundaries of the plant;
(d) Describe each building and outside tank that will be used for production, storage, and processing of spirits and for denaturing spirits, articles, or wines. The description must include the location, size, construction, and arrangement with reference to each by a designated number or letter; and
(e) Specify when only a room or floor of a building will be used for plant operations and provide the location and description of the building, floor, and room.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172))
#### § 19.75 Major equipment.
As required by [§ 19.73(a)(9)](/current/title-27/section-19.73#p-19.73\(a\)\(9\)), the application for registration must include a list of the major plant equipment. If the equipment is set up and used for the production, storage, or processing of distilled spirits, wine, denatured spirits, or articles, the list must provide the following information:
(a) The serial number and capacity of each tank in the plant. The list does not need to include any bulk containers having a capacity of less than 101 wine gallons on the plant premises if those containers do not meet the criteria of a tank under [§ 19.182](/current/title-27/section-19.182) (perks, small totes, etc.);
(b) The serial number, kind, capacity, and intended use of each still in the plant. The capacity is the estimated maximum proof gallons of spirits capable of being produced every 24 hours, or for column stills a statement of the diameter of the base and number of plates; and
(c) The serial number of each condenser.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172), [5179](https://www.govinfo.gov/link/uscode/26/5179))
#### § 19.76 Statement of plant security.
As required by [§ 19.73(a)(12)](/current/title-27/section-19.73#p-19.73\(a\)\(12\)), the application for registration must include a statement of plant security. This statement must include the following information:
(a) A general description of plant security, including methods used to secure buildings or plant operations located within a portion of a building and outdoor tanks;
(b) A statement regarding the use of guard personnel;
(c) A statement regarding the use of any electronic or mechanical alarm system;
(d) A statement certifying that locks used will meet the requirements of [§ 19.192(f)](/current/title-27/section-19.192#p-19.192\(f\)); and
(e) A list of persons, by their position and title, who have the responsibility for the custody and access to keys for the locks.
([26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171), [5172](https://www.govinfo.gov/link/uscode/26/5172))
#### § 19.77 Statement of production procedure.
(a) As required by [§ 19.73(a)(13)(ii)](/current/title-27/section-19.73#p-19.73\(a\)\(13\)\(ii\)), the application for registration must include a statement of the step-by-step production procedure used to produce spirits from an original source. The statement must begin with the treating, mashing, or fermenting of the raw materials or substances and continue through each step of the distilling, purifying, and refining procedure to the production gauge. The statement must include the kind and approximate quantity of each material or substance used in producing, purifying, or refining each type of spirits that will be produced.
(b) If the applicant intends to redistill spirits in the production account, the applicant must submit and receive approval for such redistillation on form TTB F 5110.38, Formula for Distilled Spirits under the Federal Alcohol Administration Act.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172), [5201](https://www.govinfo.gov/link/uscode/26/5201), [5222](https://www.govinfo.gov/link/uscode/26/5222), [5223](https://www.govinfo.gov/link/uscode/26/5223), [5555](https://www.govinfo.gov/link/uscode/26/5555))
#### § 19.78 Power of attorney.
An applicant or proprietor of a distilled spirits plant must execute and submit to the appropriate TTB officer form TTB F 5000.8, Power of Attorney, for each person authorized to sign or to act on behalf of the applicant or proprietor unless the authority has been granted in the application for registration.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172))
#### § 19.79 Registry of stills.
Section 29.55 of this chapter requires that every person having possession, custody, or control of a still or distilling apparatus must register the still or distilling apparatus. When a person lists a still or distilling apparatus with the application for registration as required by [§ 19.75(b)](/current/title-27/section-19.75#p-19.75\(b\)) and receives approval of the registration, that person has fulfilled the requirement to register the still or distilling apparatus. See [§ 29.55 of this chapter](/current/title-27/section-29.55) for additional provisions regarding stills and distilling apparatus.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172), [5179](https://www.govinfo.gov/link/uscode/26/5179))
#### § 19.80 Approved notice of registration.
A person may not operate a distilled spirits plant unless a notice of registration has been approved by TTB authorizing the businesses and operations to be conducted at such plant. When approved by the appropriate TTB officer, the application for registration constitutes the notice of registration of the distilled spirits plant. A distilled spirits plant will not be registered or reregistered under this subpart until the applicant has complied with all requirements of law and regulations relating to the qualification of the business or operations in which the applicant intends to engage. In any instance where a person is required to have a bond or permit and the bond or permit becomes invalid, then the notice of registration also becomes invalid. Another application for registration must be filed and a new notice of registration approved by TTB before the business or operation at such plant may be resumed. Reregistration of a plant is not required when a new bond or a strengthening bond is filed in accordance with [§ 19.167](/current/title-27/section-19.167) or [§ 19.168](/current/title-27/section-19.168).
([26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171), [5172](https://www.govinfo.gov/link/uscode/26/5172))
#### § 19.81 Maintenance of registration file.
The proprietor must maintain the registration documents on the plant premises in a loose-leaf file that is current, complete, and readily available for inspection by the appropriate TTB officer.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172))
### Requirements for an Operating Permit Under the IRC
#### § 19.91 Operating permit.
(a) Except as provided in [paragraph (b)](/current/title-27/section-19.91#p-19.91\(b\)) of this section, a person must obtain an operating permit under the IRC in order to:
(1) Distill for industrial use;
(2) Warehouse spirits for industrial use;
(3) Denature spirits;
(4) Warehouse spirits (without bottling) for nonindustrial use;
(5) Bottle or package spirits for industrial use;
(6) Manufacture articles; or
(7) Engage in any other distilling, warehousing, or processing operation not required to be covered by a basic permit under the Federal Alcohol Administration Act (49 Stat. 978; [27 U.S.C. 203](https://www.govinfo.gov/link/uscode/27/203), [204](https://www.govinfo.gov/link/uscode/27/204)).
(b) *Exception.* The requirement to obtain an operating permit does not apply to an agency of a State, or political subdivision of a State, or an officer or employee of, and acting for, such an agency.
([26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171), [5271](https://www.govinfo.gov/link/uscode/26/5271))
#### § 19.92 Information required in application for operating permit.
(a) In order to obtain an operating permit, a person must complete an application on form TTB F 5110.25, Application for Operating Permit Under [26 U.S.C. 5171(d)](https://www.govinfo.gov/link/uscode/26/5171). TTB will consider all written statements, affidavits and other documents submitted in support of the application as part of the application.
(b) The application on TTB F 5110.25 must include the following information:
(1) The name and principal address of the business;
(2) The address of the plant if different from the business address;
(3) A description of the operation(s) to be conducted;
(4) A statement of the business organization and the persons involved in the business as required under [§ 19.93](/current/title-27/section-19.93); and
(5) A list of trade names as required under [§ 19.94](/current/title-27/section-19.94).
(c) A TTB officer may request that any person listed under [§ 19.93(a)(1)(ii)](/current/title-27/section-19.93#p-19.93\(a\)\(1\)\(ii\)), [(a)(3)(iii)](/current/title-27/section-19.93#p-19.93\(a\)\(3\)\(iii\)), [(b)(1)](/current/title-27/section-19.93#p-19.93\(b\)\(1\)), or [(b)(2)](/current/title-27/section-19.93#p-19.93\(b\)\(2\)) submit to TTB a statement as to whether that person has ever:
(1) Been convicted of a felony or misdemeanor under Federal or State law, other than a misdemeanor conviction for a traffic violation;
(2) Been arrested or charged with any violation of State or Federal law, other than an arrest or charge for a misdemeanor traffic violation; or
(3) Applied for, held, or been connected with a permit issued under Federal law to manufacture, distribute, sell or use spirits or products containing spirits, or held any financial interest in any business covered by any such permit, and if so, give the permit number, classification, period of operation and details regarding any denial, suspension, revocation or other termination.
(d) If any of the information required in [paragraphs (b)(4)](/current/title-27/section-19.92#p-19.92\(b\)\(4\)) or [(c)(3)](/current/title-27/section-19.92#p-19.92\(c\)\(3\)) of this section is on file with the appropriate TTB officer, the applicant may, by incorporation by reference, state that the information is made a part of the application for an operating permit.
(e) The applicant must provide any additional information that the appropriate TTB officer may request in order to determine whether the application should be approved.
([26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171), [5271](https://www.govinfo.gov/link/uscode/26/5271))
#### § 19.93 Applicant organization documents.
(a) *Supporting information.* Sections 19.73(a)(5) and 19.92(a)(4) require that the application for registration and the application for an operating permit include information about the business organization of the applicant. The applicant must provide the following information as applicable:
(1) If the applicant is a corporation—
(i) The corporate charter or other documentation that provides proof of corporate existence or incorporation;
(ii) Names and addresses of directors and officers;
(iii) Certified minutes, or extracts of board of directors meetings, that authorize specific individuals to sign for the corporation; and
(iv) A statement showing the number of shares of each class of stock or other evidence of ownership, authorized and outstanding, and the voting rights of the respective owners or holders.
(2) If the applicant is a partnership, a copy of the articles of partnership or association, or certificate of partnership or association if required to be filed by any State, county, or municipality.
(3) If the applicant is a limited liability company or limited liability partnership—
(i) A copy of the articles of organization;
(ii) A copy of the operating agreement; and
(iii) The names and addresses of all members and managers.
(b) *Statement of interest* —
(1) *Sole proprietorships and general partnerships.* In the case of an individual owner or a general partnership, the applicant must provide the name and address of each person having an interest in the business and a statement indicating whether the interest appears in the name of the interested person or in the name of another person.
(2) *Limited liability entities.* In the case of a corporation, limited liability partnership, limited liability company, or other legal entity in which some or all of the owners have limited personal liability for the activities of the entity, the applicant must provide the following information about persons having an interest in the business:
(i) The names and addresses of the 10 persons that have the largest ownership or other interest in each of the classes of ownership of the applicant and the nature and amount of ownership or other interest of each person.
(ii) The name of the person in whose name the interest appears. If the corporation is wholly owned or controlled by another corporation, the appropriate TTB officer may request the same information regarding ownership for the parent corporation.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172), [5271](https://www.govinfo.gov/link/uscode/26/5271))
#### § 19.94 Trade names.
(a) *Operating permits.* The applicant must include a list of any trade names used in the operation of the plant with form TTB F 5110.25, Application for Operating Permit Under [26 U.S.C. 5171(d)](https://www.govinfo.gov/link/uscode/26/5171). The applicant must show the operations for which the trade name will be used and identify the offices where the trade name is registered. The applicant must also submit copies of any certificate or other document filed or issued for each trade name.
(b) *Basic permits.* If the applicant is required to have a basic permit under the Federal Alcohol Administration Act (49 Stat. 978; [27 U.S.C. 203](https://www.govinfo.gov/link/uscode/27/203), [204](https://www.govinfo.gov/link/uscode/27/204)) for distilling, warehousing, or processing operations, then the applicant must follow the regulations under that Act for the approval and use of trade names.
([26 U.S.C. 5271](https://www.govinfo.gov/link/uscode/26/5271))
#### § 19.95 Issuance of operating permits.
TTB will issue only one operating permit for a distilled spirits plant. The permit will designate the operations that are authorized at the plant. The proprietor must post the permit at the distilled spirits plant and have it available for inspection by appropriate TTB officers.
([26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171), [5271](https://www.govinfo.gov/link/uscode/26/5271))
#### § 19.96 Denial of permit.
TTB will conduct proceedings for the denial of an application for an operating permit in accordance with the procedures set forth in [part 71 of this chapter](/current/title-27/part-71) if the appropriate TTB officer has reason to believe that:
(a) The applicant (including, in the case of a corporation, any officer, director, or principal stockholder, and, in the case of a partnership, a partner) is, by reason of business experience, financial standing, or trade connections, not likely to maintain operations in compliance with [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101), or the regulations issued thereunder;
(b) The applicant failed to disclose any material information required, or has made a false statement as to any material fact in connection with the application; or
(c) The premises where the applicant proposes to conduct the operations are not adequate to protect the revenue.
([26 U.S.C. 5271](https://www.govinfo.gov/link/uscode/26/5271))
#### § 19.97 Correction of permit.
If requested by the appropriate TTB officer, a proprietor must immediately return for correction any operating permit that contains an error.
([26 U.S.C. 5271](https://www.govinfo.gov/link/uscode/26/5271))
#### § 19.98 Duration of permit.
The proprietor may conduct the operations authorized by the operating permit on a continuing basis unless:
(a) The proprietor voluntarily surrenders the permit;
(b) TTB suspends or revokes the permit pursuant to [§ 19.99](/current/title-27/section-19.99); or
(c) The permit is automatically terminated under its own terms or in accordance with [§ 19.127](/current/title-27/section-19.127).
([26 U.S.C. 5271](https://www.govinfo.gov/link/uscode/26/5271))
#### § 19.99 Suspension or revocation of permit.
TTB will conduct proceedings to revoke or suspend an operating permit in accordance with the procedures set forth in [part 71 of this chapter](/current/title-27/part-71) if the appropriate TTB officer has a reason to believe that the proprietor or any person associated with the operating permit:
(a) Has not complied in good faith with the provisions of [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101) or the regulations issued thereunder;
(b) Has violated the conditions of the permit;
(c) Has made a false statement as to any material fact in the application for the permit;
(d) Has failed to disclose any required material information;
(e) Has violated or conspired to violate any law of the United States relating to intoxicating liquor;
(f) Has been convicted of any offense under title 26 U.S.C. punishable as a felony or of any conspiracy to commit such an offense; or
(g) Has not engaged in any of the operations authorized by the permit for a period of more than 2 years.
([26 U.S.C. 5271](https://www.govinfo.gov/link/uscode/26/5271))
## Subpart E—Changes to Registrations and Permits
#### § 19.111 Scope.
This subpart explains the requirements for amending a distilled spirits plant registration and, if applicable, an operating permit. For information regarding amendments to a basic permit issued under the Federal Alcohol Administration Act, see [part 1 of this chapter](/current/title-27/part-1).
([26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171))
### Rules for Amending a Registration
#### § 19.112 General rules for amending a registration.
If there is a change in any of the information in the proprietor's current, approved notice of registration, the proprietor must amend the registration within 30 days of the change unless another time period is specified in this subpart. To amend a registration the proprietor must submit in writing to the appropriate TTB officer any information necessary to make the registration file current and accurate.
(a) *TTB F 5110.41.* Except when a letterhead application or letterhead notice procedure is allowed under this subpart, the proprietor must submit an amended form TTB F 5110.41, Registration of Distilled Spirits Plant, for changes that affect the registration. If the changes affect only parts or pages of the registration the proprietor only needs to submit the necessary pages or information that will make the registration file current.
(b) *Letterhead applications.* For certain changes specified in this subpart the proprietor may submit a letterhead application for a change instead of an amended TTB F 5110.41. The letterhead application must identify the distilled spirits plant to which the change applies and clearly identify the change. Any change is subject to TTB approval. The appropriate TTB officer may, at any time, require that the proprietor submit an amended application on TTB F 5110.41 if administrative difficulties occur as a result of the letterhead application.
(c) *Letterhead notices.* For certain changes specified in this subpart only a letterhead notice is required. The letterhead notice must identify the distilled spirits plant to which the change applies and clearly identify the change. A letterhead notice does not require approval by TTB. The appropriate TTB officer may, at any time, require that the proprietor submit an amended application on TTB F 5110.41 if administrative difficulties occur as a result of the letterhead notice.
([26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171), [5172](https://www.govinfo.gov/link/uscode/26/5172))
#### § 19.113 Change in name of proprietor.
If the name of the of the proprietor changes, the proprietor may not conduct operations under the new name before TTB approves the amended registration. The proprietor must file either an amended form TTB F 5110.41, Registration of Distilled Spirits Plant, or a letterhead application to reflect the change. However, the proprietor does not have to file a new bond or consent of surety.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172), [5271](https://www.govinfo.gov/link/uscode/26/5271))
#### § 19.114 Changes in stockholders or persons with interest.
The proprietor must notify TTB of any changes in the list of stockholders or persons with interest that was filed with TTB as required by [§ 19.93](/current/title-27/section-19.93). If the change results in a change of control, the proprietor must file form TTB F 5110.41, Registration of Distilled Spirits Plant, within 30 days of the change. If the change does not cause a change of control, the proprietor:
(a) May file a letterhead notice to amend the registration;
(b) May file the amended notice on May 1 of each year rather than within 30 days of the change, or on any other date that the appropriate TTB Officer may approve; and
(c) Must incorporate all changes submitted by letterhead notice in the next TTB F 5110.41 filed.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172), [5271](https://www.govinfo.gov/link/uscode/26/5271))
#### § 19.115 Change in officers, directors, members, or managers
(a) *General.* If there is a change in the list of officers, directors, members or managers that the proprietor filed as required by [§ 19.93](/current/title-27/section-19.93) the following rules apply:
(1) The proprietor must file an amended form TTB F 5110.41, Registration of Distilled Spirits Plant, or a letterhead notice to reflect the change;
(2) The proprietor must provide the name and address of each new officer, director, member or manager; and
(3) The proprietor must incorporate all changes submitted by letterhead notice in the next TTB F 5110.41 filed.
(b) *Waiver.* The appropriate TTB officer may waive the requirement to amend the registration if the change only relates to corporate officers listed on the original or current registration who are no longer connected with the operations covered by the registration.
([26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171), [5172](https://www.govinfo.gov/link/uscode/26/5172))
#### § 19.116 Change in proprietorship.
(a) *General.* If there is a change in proprietorship at a distilled spirits plant, the following requirements apply to the outgoing proprietor and to the incoming (successor) proprietor.
(1) *Outgoing proprietor.* An outgoing proprietor must comply with the requirements of [§ 19.147](/current/title-27/section-19.147). An outgoing proprietor may transfer spirits to its successor in accordance with [§ 19.141](/current/title-27/section-19.141).
(2) *Incoming proprietor.* A successor to the proprietorship of a plant that holds a registration:
(i) Must file form TTB F 5110.41, Registration of Distilled Spirits Plant, and receive from TTB an approved notice of registration of the plant;
(ii) Must file the required bonds, subject to the exemption provided in [§ 19.151(d)](/current/title-27/section-19.151#p-19.151\(d\)); and
(iii) May adopt the approved formulas of its predecessor in accordance with [§§ 5.194](/current/title-27/section-5.194) and [20.63 of this chapter](/current/title-27/section-20.63).
(b) *Fiduciary.* If the successor to the proprietorship of a plant is an administrator, executor, receiver, trustee, assignee or other fiduciary, the successor must comply with the provisions of [paragraph (a)(2)](/current/title-27/section-19.116#p-19.116\(a\)\(2\)) of this section. The following rules also apply in this case:
(1) The fiduciary may furnish a consent of surety to extend the terms of the predecessor's bond instead of filing a new bond;
(2) The fiduciary may incorporate by reference in the application for registration on TTB F 5110.41 any information contained in the predecessor's application for registration that is still current;
(3) The successor must furnish a certified copy of the order of the court or other pertinent document showing the successor's qualification as fiduciary; and
(4) The effective date of the qualifying documents that the fiduciary files will be the date of the court order, the date specified in the order whereby the fiduciary assumes control, or if there is no court order, the date that the fiduciary assumed control.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1119](https://www.federalregister.gov/citation/82-FR-1119), Jan. 4, 2017; T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
#### § 19.117 Partnerships.
(a) If there is a death or insolvency of a partner in the business registered under this part, the surviving partner or partners may continue to operate under the notice of registration if:
(1) The partnership is not terminated under the laws of the particular State but continues until the winding up of the partnership affairs is complete;
(2) The surviving partner or partners have exclusive right to the control and possession of the partnership assets for purposes of liquidation and settlement; and
(3) A consent of surety is filed where the surety and the surviving partner or partners agree to remain liable on the operations or unit bond.
(b) If the surviving partner or partners acquire the business upon settlement of the partnership, the surviving partner or partners must file as an incoming proprietor and receive an approved notice of registration of the plant in accordance with [§ 19.116(a)](/current/title-27/section-19.116#p-19.116\(a\)).
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172))
#### § 19.118 Change in location.
(a) If the location of the plant changes, the proprietor must:
(1) File form TTB F 5110.41, Registration of Distilled Spirits Plant, to amend the registration;
(2) File a new bond or a consent of surety on form TTB F 5000.18, subject to the exemption provided in [§ 19.151(d)](/current/title-27/section-19.151#p-19.151\(d\)); and
(3) Not begin operations at the new location prior to approval of the amended registration.
(b) If there is a temporary change of delivery address within a plant with no change in plant location, the proprietor may file a letterhead notice to temporarily amend the registration.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172), [5173](https://www.govinfo.gov/link/uscode/26/5173), [5271](https://www.govinfo.gov/link/uscode/26/5271))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1119](https://www.federalregister.gov/citation/82-FR-1119), Jan. 4, 2017]
#### § 19.119 Change in premises.
If the proprietor intends to extend or curtail any part of the plant premises, except under alternate operations that are covered by [§§ 19.142](/current/title-27/section-19.142) and [19.143](/current/title-27/section-19.143), the proprietor must file form TTB F 5110.41, Registration of Distilled Spirits Plant, to amend the registration. The proprietor must not extend or curtail any premises or equipment before the amended registration is approved.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172))
#### § 19.120 Change in operations.
(a) If the proprietor wishes to conduct additional operations involving spirits, other than those approved on the current registration, the proprietor must:
(1) File form TTB F 5110.41, Registration of Distilled Spirits Plant, to amend the registration; and
(2) Not engage in the additional operations prior to approval of the amended registration.
(b) If the proprietor wishes to engage in another business that is authorized under [§ 19.55](/current/title-27/section-19.55) the proprietor must:
(1) File TTB F 5110.41 to amend the registration;
(2) Include the information required under [§ 19.73(b)](/current/title-27/section-19.73#p-19.73\(b\)); and
(3) Not engage in the other business until approval of the amended registration is received.
([26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171), [5172](https://www.govinfo.gov/link/uscode/26/5172), [5271](https://www.govinfo.gov/link/uscode/26/5271))
#### § 19.121 Change in production procedure.
If the proprietor plans to produce a new product or make a change to the production procedure that will affect the designation of the product or substantially affect the character of the product, the proprietor must:
(a) File form TTB F 5110.41, Registration of Distilled Spirits Plant, to amend the registration;
(b) Provide a new statement of production procedure as described in [§ 19.77](/current/title-27/section-19.77); and
(c) Receive approval of the amended registration before implementing the change in the production procedure.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172))
#### § 19.122 Change in construction or use of buildings and equipment.
(a) The proprietor must submit a letterhead notice before making any material change in the construction or use of buildings or equipment at the plant other than changes covered by [§ 19.119](/current/title-27/section-19.119), [§ 19.142](/current/title-27/section-19.142) or [§ 19.143](/current/title-27/section-19.143). The proprietor must:
(1) Describe the proposed change in detail;
(2) Keep a copy of the letterhead notice on file with the current notice of registration; and
(3) Incorporate the change in the next amendment to the registration submitted on form TTB F 5110.41, Registration of Distilled Spirits Plant, unless the appropriate TTB officer requires immediate submission of an amended TTB F 5110.41.
(b) The proprietor may make emergency changes in construction or use of buildings and equipment without prior letterhead notice. However, the proprietor must promptly report any emergency change to the appropriate TTB officer.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172))
#### § 19.123 Statement of plant security.
If the proprietor makes changes to the personnel listed, or procedures contained in, the statement of plant security filed under [§ 19.76](/current/title-27/section-19.76), the proprietor must:
(a) File a form TTB F 5110.41, Registration of Distilled Spirits Plant, or a letterhead application to amend the registration, in the case of any change in the description of plant security, employment of guard personnel, use of electronic or mechanical alarm system, or certification of required locks required under [§ 19.76(a)](/current/title-27/section-19.76#p-19.76\(a\)) through [(d)](/current/title-27/section-19.76#p-19.76\(d\));
(b) File a letterhead notice for any change in personnel who have custody and access to keys for the required locks as provided under [§ 19.76(e)](/current/title-27/section-19.76#p-19.76\(e\)); and
(c) Incorporate any changes filed by letterhead notice in the next amendment to the registration on TTB F 5110.41 submitted, unless the appropriate TTB officer requires an immediate submission of TTB F 5110.41.
([26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171), [5172](https://www.govinfo.gov/link/uscode/26/5172))
### Rules for Amending an Operating Permit
#### § 19.126 General rules for amending an operating permit.
(a) *When and how to amend.* If there is a change in any of the information that the proprietor provided as part of the current approved application for an operating permit, the proprietor must amend the operating permit by submitting written documentation in accordance with this section to the appropriate TTB officer in writing within 30 days of the change unless another time period is specified in this subpart.
(1) *TTB F 5110.25.* Except when a letterhead application or letterhead notice procedure is allowed under this subpart, the proprietor must amend the operating permit by submitting an amended form TTB F 5110.25, Application for Operating Permit Under [26 U.S.C. 5171(d)](https://www.govinfo.gov/link/uscode/26/5171). If the changes only affect parts or pages of the application for an operating permit the proprietor only needs to submit the necessary pages or information that will make the permit file current.
(2) *Letterhead applications.* For certain changes specified in this subpart, the proprietor may submit a letterhead application instead of an amended TTB F 5110.25. The letterhead application must identify the distilled spirits plant for which the application applies. The letterhead application change is subject to TTB approval. The appropriate TTB officer may, at any time, require that the proprietor submit an amended application on TTB F 5110.25 if administrative difficulties occur as a result of the letterhead application.
(3) *Letterhead notices.* For certain changes noted in this subpart only a letterhead notice is required. A letterhead notice does not require approval by TTB. The appropriate TTB officer may, at any time, require that the proprietor submit amended application on TTB F 5110.25 if administrative difficulties occur as a result of the letterhead notice.
(b) *FAA Act permits.* If there are changes that affect a basic permit issued under the Federal Alcohol Administration Act, the proprietor must amend the basic permit in accordance with the procedures set forth in [part 1 of this chapter](/current/title-27/part-1).
([26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171), [5172](https://www.govinfo.gov/link/uscode/26/5172))
#### § 19.127 Automatic termination of permits.
(a) *Operating permits.* An operating permit is not transferable. The proprietor's operating permit will automatically terminate in the following circumstances:
(1) If the operations that are authorized by the permit are leased, sold or transferred;
(2) If the company is dissolved on a certain date by an event specified in the laws of the State where the company operates; or
(3) In the case of a corporation, if actual or legal control of the corporation changes, directly or indirectly, whether by reason of change in stock ownership or control, by operation of law, or in any other manner, the permit will terminate 30 days after the change in control. However, if an application for a new permit covering the operations is made within this 30 day period, then the operating permit may remain in effect until TTB takes final action upon the new application. TTB's final action on the new application will automatically terminate the outstanding permit.
(b) *Basic permits.* For provisions related to the automatic termination of an FAA Act basic permit, see [part 1 of this chapter](/current/title-27/part-1).
([26 U.S.C. 5271](https://www.govinfo.gov/link/uscode/26/5271))
#### § 19.128 Change in name of proprietor.
If the name of the proprietor changes, the proprietor must file a letterhead application to amend the operating permit. The proprietor may not conduct operations under the new name before TTB approves the amended operating permit. However, the proprietor does not have to file a new bond or consent of surety.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172), [5271](https://www.govinfo.gov/link/uscode/26/5271))
#### § 19.129 Change in trade name.
If the proprietor intends to change or add a trade name that will be used in the operation of the plant, the proprietor must file a letterhead application to amend the operating permit. The proprietor may not conduct operations under the new trade name before TTB approves the amended operating permit. However, the proprietor will not be required to file a new bond or consent of surety.
([26 U.S.C. 5271](https://www.govinfo.gov/link/uscode/26/5271))
#### § 19.130 Changes in stockholders or persons with interest.
The proprietor must notify TTB of any changes in the list of stockholders or persons with interest that was filed with TTB as required by [§ 19.93(b)](/current/title-27/section-19.93#p-19.93\(b\)). If the change results in a change of control, the proprietor must file form TTB F 5110.25, Application for Operating Permit Under [26 U.S.C. 5171(d)](https://www.govinfo.gov/link/uscode/26/5171), within 30 days of the change. If the change does not cause a change in control the proprietor:
(a) May file a letterhead notice to amend the operating permit;
(b) May file the amended notice the May 1st following the change in control year rather than within 30 days of the change, or on any other date that the appropriate TTB officer may approve; and
(c) Must incorporate all changes submitted by letterhead notice in the next TTB F 5110.25 filed.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172), [5271](https://www.govinfo.gov/link/uscode/26/5271))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
#### § 19.131 Changes in officers, directors, members, or managers.
(a) *General.* If there is a change in the list of officers, directors, members or managers that the proprietor filed as required by [§ 19.93](/current/title-27/section-19.93), the proprietor must:
(1) File form TTB F 5110.25 Application for Operating Permit Under [26 U.S.C. 5171(d)](https://www.govinfo.gov/link/uscode/26/5171) or a letterhead notice to amend the operating permit;
(2) Provide the name and address for each new officer, director, member or manager; and
(3) Incorporate all changes submitted by letterhead notice in the next TTB F 5110.25 filed.
(b) *Waiver.* The appropriate TTB officer may waive the requirement to amend the operating permit if the changes relate to corporate officers listed on the original or current permit who are no longer connected with the operations covered by the permit.
([26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171), [5172](https://www.govinfo.gov/link/uscode/26/5172))
#### § 19.132 Change in proprietorship.
(a) *General.* If there is a change in proprietorship at a distilled spirits plant that holds an operating permit, the following requirements apply to the outgoing proprietor and to the incoming (successor) proprietor.
(1) *Outgoing proprietor.* An outgoing proprietor must comply with the requirements of [§ 19.147](/current/title-27/section-19.147). An outgoing proprietor may transfer spirits to its successor an accordance with [§ 19.141](/current/title-27/section-19.141).
(2) *Successor proprietor.* A successor to the proprietorship of a plant that holds an operating permit:
(i) Must file form TTB F 5110.25 Application for Operating Permit Under [26 U.S.C. 5171(d)](https://www.govinfo.gov/link/uscode/26/5171) and obtain an operating permit;
(ii) Must file the required bonds, subject to the exemption provided in [§ 19.151(d)](/current/title-27/section-19.151#p-19.151\(d\)); and
(iii) May adopt the approved formulas of its predecessor in accordance with [§§ 5.194](/current/title-27/section-5.194) and [20.63 of this chapter](/current/title-27/section-20.63).
(b) *Fiduciary.* If the successor to the proprietorship of a plant is an administrator, executor, receiver, trustee, assignee, or other fiduciary, the successor must comply with the provisions of [paragraph (a)(2)](/current/title-27/section-19.132#p-19.132\(a\)\(2\)) of this section. The following rules also apply in this case:
(1) The fiduciary may furnish a consent of surety to extend the terms of the predecessor's bond instead of filing a new bond;
(2) On TTB F 5110.25, Application for Operating Permit Under [26 U.S.C. 5171(d)](https://www.govinfo.gov/link/uscode/26/5171), the fiduciary may incorporate by reference any information contained in the predecessor's application that is still current;
(3) The successor must furnish a certified copy of the order of the court or other pertinent document showing the successor's qualification as fiduciary; and
(4) The effective date of the qualifying documents that the fiduciary files will be the date of the court order, the date specified in the order whereby the fiduciary assumes control, or if there is no court order, the date that the fiduciary assumed control.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1120](https://www.federalregister.gov/citation/82-FR-1120), Jan. 4, 2017; T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
#### § 19.133 Partnerships.
(a) If there is a death or insolvency of a partner in a company that holds an operating permit under this part, the surviving partner or partners may continue to operate under the operating permit if:
(1) The partnership is not terminated under the laws of the particular State but continues until the winding up of the partnership affairs is complete;
(2) The surviving partner or partners have exclusive right to the control and possession of the partnership assets for purposes of liquidation and settlement; and
(3) A consent of surety is filed where the surety and the surviving partner or partners agree to remain liable on the operations or unit bond.
(b) If the surviving partner or partners acquire the business upon settlement of the partnership, the surviving partner or partners must file as an incoming proprietor and receive approval of the operating permit as required under [§ 19.132(a)(2)](/current/title-27/section-19.132#p-19.132\(a\)\(2\)).
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172))
#### § 19.134 Change in location.
If the location of the plant changes, the proprietor must:
(a) File form TTB F 5110.25, Application for Operating Permit Under [26 U.S.C. 5171(d)](https://www.govinfo.gov/link/uscode/26/5171), to amend the operating permit;
(b) File a new bond or a consent of surety on form TTB F 5000.18, subject to the exemption provided in [§ 19.151(d)](/current/title-27/section-19.151#p-19.151\(d\)); and
(c) Not begin operations at the new location prior to approval of the amended operating permit.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172), [5271](https://www.govinfo.gov/link/uscode/26/5271), [5173](https://www.govinfo.gov/link/uscode/26/5173))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1120](https://www.federalregister.gov/citation/82-FR-1120), Jan. 4, 2017]
#### § 19.135 Change in operations.
If the proprietor wishes to conduct additional operations involving spirits, other than those already approved on the current operating permit, the proprietor must:
(a) File form TTB F 5110.25 Application for Operating Permit Under [26 U.S.C. 5171(d)](https://www.govinfo.gov/link/uscode/26/5171) to amend the permit; and
(b) Not engage in the additional operation prior to approval of the amended permit.
([26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171), [5172](https://www.govinfo.gov/link/uscode/26/5172), [5271](https://www.govinfo.gov/link/uscode/26/5271))
#### § 19.136 Change in bond status.
A proprietor must file TTB F 5110.41, Registration of Distilled Spirits Plant, to amend the registration relating to the proprietor's bond status if either of the following occurs:
(a) A proprietor who has not furnished any bond becomes required to furnish a bond as provided under [§ 19.168(b)](/current/title-27/section-19.168#p-19.168\(b\)); or
(b) A proprietor who has furnished a bond becomes exempt from bond requirements under [§ 19.151(d)](/current/title-27/section-19.151#p-19.151\(d\)) and chooses to terminate all bond coverage as provided under [§ 19.170(e)](/current/title-27/section-19.170#p-19.170\(e\)).
\[T.D. TTB-146 [82 FR 1120](https://www.federalregister.gov/citation/82-FR-1120), Jan. 4, 2017]
### Alternation of Plant Proprietors
#### § 19.141 Procedures for alternation of proprietors.
(a) *General.* A proprietor may alternate use of a distilled spirits plant or part of the plant with one or more other proprietors. In order to do so, each proprietor must separately file and receive approval of the necessary registration, applications and bonds that are required by [subparts D](/current/title-27/part-19/subpart-D) and [E of this part](/current/title-27/part-19/subpart-E). Each proprietor must also conduct operations and keep records in accordance with the regulations in this part. Where operations by alternating proprietors will be limited to parts of the plant, each proprietor must include the following in the notice of registration:
(1) A description of the areas, rooms or buildings, or combination of rooms or buildings that will alternate between proprietors;
(2) The method that the proprietor will use to separate the alternated premises from any premises that will not be alternated; and
(3) Diagrams of the parts of the plant that will be alternated.
(b) *Letterhead notice.* After a proprietor receives approval to alternate use of the premises with another proprietor, the alternating proprietors must separately file letterhead notices each time they intend to alternate use of the premises. The proprietors may file a single notice if the notice is signed by each proprietor or an authorized representative of each proprietor. The proprietors must submit the letterhead notice to the appropriate TTB officer prior to the first day that alternation is to take place. Proprietors must include the following with the notice:
(1) The plant number and the name of the proprietor filing the notice;
(2) Identification of the outgoing proprietor and incoming proprietor (by name and plant number);
(3) The effective date and hour of the alternation;
(4) Identification of any applicable diagrams provided with the registration of each proprietor filed under [paragraph (a)](/current/title-27/section-19.141#p-19.141\(a\)) of this section, showing the portions of the premises involved in the alternation;
(5) The purpose of the alternation;
(6) If distilling materials, unfinished or finished spirits, denatured spirits, or wine will be transferred to the incoming proprietor, a statement to that effect; and
(7) If denatured spirits or articles will be retained in the processing account in locked tanks during the period of alternate proprietorship, a statement to that effect.
(c) *Alternation of production operations.* In the case of an outgoing proprietor who intends to alternate production operations with another proprietor, the outgoing proprietor must:
(1) Completely process all distilling materials and unfinished spirits in any bonded areas, rooms, or buildings that will alternate unless the outgoing proprietor transfers them to the incoming proprietor; and
(2) Mark and remove all finished spirits in the name in which they were produced before a production gauge is made by the incoming proprietor.
(d) *Alternation of storage operations.* In the case of an outgoing proprietor who intends to alternate storage operations with another proprietor, the outgoing proprietor must:
(1) Transfer in bond any spirits or wines in any bonded areas, rooms, or buildings that will be alternated; and
(2) Except where no bond is required under [§ 19.151(d)](/current/title-27/section-19.151#p-19.151\(d\)), execute a form TTB F 5000.18, Change of Bond (Consent of Surety), to continue in effect the operations or unit bond whenever operations of the areas, rooms, or buildings will be resumed by the outgoing proprietor following suspension of operations by the other proprietor.
(e) *Alternation of processing operations.* In the case of an outgoing proprietor who intends to alternate processing operations with another proprietor, the outgoing proprietor:
(1) Before the effective date and time of the alternation, must process to completion and remove from the affected area all spirits, denatured spirits, wines, or articles located in any rooms, areas, or buildings that will alternate, or must transfer these spirits, wines, and articles in bond to the incoming proprietor;
(2) Except where no bond is required under [§ 19.151(d)](/current/title-27/section-19.151#p-19.151\(d\)), must execute a TTB F 5000.18, Change of Bond (Consent of Surety), to continue in effect the operations or unit bond whenever operations of the areas, rooms, or buildings will be resumed by the outgoing proprietor following suspension of operations by the other proprietor; and
(3) May retain denatured spirits and articles in tanks locked with approved locks if the outgoing proprietor maintains custody and control of the locks and keys for the tanks. In this case, the outgoing proprietor must obtain a consent of surety on TTB F 5000.18 to continue liability on the operations or unit bond for the tax on the denatured spirits or articles that retained in the locked tanks.
(f) *Records.* Each alternating proprietor must maintain its own records and submit its own reports. Records kept by an outgoing proprietor for spirits, wines, and alcoholic flavoring materials may be used by the incoming proprietor. All transfers of distilling materials, unfinished spirits, spirits, denatured spirits, and wines must be reflected in the records of each proprietor.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172), [5271](https://www.govinfo.gov/link/uscode/26/5271))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1120](https://www.federalregister.gov/citation/82-FR-1120), Jan. 4, 2017]
### Conduct of Alternate Operations at a Plant
#### § 19.142 Alternate use of premises and equipment for customs purposes.
(a) *General.* The proprietor may extend or curtail the distilled spirits plant premises or a part of those premises for temporary use by U.S. Customs and Border Protection officers for customs purposes. If the proprietor wishes to alternate the use of the premises for customs purposes, that use must be approved by the port director of customs and must be conducted in accordance with applicable customs laws and regulations.
(b) *Qualification.* Before alternating the plant premises for customs purposes, the proprietor must file and receive approval of the necessary registration, application and bonds as required by this part. The proprietor's application for registration must include the following:
(1) A description of the areas, rooms or buildings, or combination of rooms or buildings that will be alternated;
(2) A diagram of the parts of the plant that the proprietor will use for the alternation; and
(3) The method that the proprietor will use to separate the alternated premises from any premises not subject to alternation.
(c) *Letterhead notice.* After the proprietor receives approval to alternate premises for customs purposes, the proprietor must file a letterhead notice with the appropriate TTB officer each time the premises will be alternated. The notice must include the following information:
(1) The name and plant number of the proprietor filing the notice;
(2) The date and hour the alternation will take place;
(3) Identification of any applicable diagrams provided with the registration filed under [paragraph (b)](/current/title-27/section-19.142#p-19.142\(b\)) of this section, showing the portions of the premises involved in the alternation;
(4) The purpose of the alternation;
(5) If the alternation is for gauging or processing distilled spirits, a statement to that effect; and
(6) An indication of the class of temporary customs warehouse, if applicable.
(d) *Proprietor responsibilities.* Prior to the start of alternation for customs purposes, the proprietor must remove all spirits from the premises or equipment that will be involved in the alternation. However, upon release by customs, spirits in the process of being transferred to bonded premises under [26 U.S.C. 5232](https://www.govinfo.gov/link/uscode/26/5232) may remain on the premises to be reincluded in the bonded premises.
(e) *Exceptions.* The qualification requirements in [paragraph (b)](/current/title-27/section-19.142#p-19.142\(b\)) of this section and the notice requirements in [paragraph (c)](/current/title-27/section-19.142#p-19.142\(c\)) of this section will not apply where the proprietor solely intends to gauge bulk distilled spirits for transfer from customs custody to bonded premises.
(f) *Conveyance of spirits in customs custody.* If the proprietor intends to convey spirits in customs custody across the distilled spirits plant premises the proprietor must comply with [§ 19.60](/current/title-27/section-19.60).
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172), [5178](https://www.govinfo.gov/link/uscode/26/5178))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1120](https://www.federalregister.gov/citation/82-FR-1120), Jan. 4, 2017; T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
#### § 19.143 Alternation for other purposes.
(a) *General.* The proprietor may temporarily extend or curtail the distilled spirits plant premises to allow for several other types of alternate uses. Premises may be alternately curtailed or extended to allow bonded premises to be used temporarily as general premises, or to allow general premises to be used as bonded premises. A curtailment or extension of distilled spirits plant premises may also allow for the use of the premises as:
(1) An adjacent bonded wine cellar;
(2) An adjacent taxpaid wine bottling house;
(3) An adjacent brewery; or
(4) Facilities for the manufacturer of eligible flavors.
(b) *Qualifying documents.* Before alternating the premises for a purpose listed in [paragraph (a)](/current/title-27/section-19.143#p-19.143\(a\)) of this section, the proprietor must file and receive approval of the necessary registration, application forms and attachments that relate to the proposed alternate use. Depending on the type of alternation involved, the proprietor must file one or more of the following qualification documents:
(1) *Registration.* For all alternate uses of the distilled spirits plant described in [paragraph (a)](/current/title-27/section-19.143#p-19.143\(a\)) of this section the proprietor must file a form TTB F 5110.41, Registration of a Distilled Spirits Plant, to cover the proposed alternation of premises.
(2) *Diagram.* For all alternate uses, the proprietor must provide a special diagram, in duplicate, delineating the premises as they will exist, both during extension and curtailment and clearly depicting all buildings, floors, rooms, areas, equipment that are to be subject to alternation, in their relative operating sequence.
(3) *Bond.* For all alternate uses, the proprietor must provide evidence of an existing bond, consent of surety, or a new bond to cover the proposed alternation of premises. This requirement does not apply if no bond is required under this chapter to cover the proposed alternation.
(4) *Bonded wine cellar or taxpaid wine bottling house.* If the proprietor intends to alternate the premises or part of the premises as a bonded wine cellar or taxpaid wine bottling house the proprietor must also file form TTB F 5120.25, Application to Establish and Operate Wine Premises.
(5) *Brewery.* If the proprietor intends to alternate the premises or part of the premises for a brewery operation the proprietor must file form TTB F 5130.10, Brewer's Notice.
(c) *Separation of premises.* The proprietor must separate the distilled spirits plant premises from the alternate use premises in accordance with the approved plan of alternation described in the qualifying documents.
(d) *Segregation of products.* When the proprietor alternates premises, the proprietor must segregate products as follows:
(1) *Wine operations.*
(i) Prior to alternation from distilled spirits plant premises to wine premises, the proprietor must remove all distilled spirits, denatured spirits, articles, and wine from the distilled spirits plant premises that will be alternated. However, the proprietor may keep spirits on the premises if they are being withdrawn for use in wine production under [§ 19.419](/current/title-27/section-19.419), or for use in the production of nonbeverage wine or wine products under [§ 19.421](/current/title-27/section-19.421). Further, the proprietor may keep wine on the premises if it is to be transferred in bond under [§ 19.402(b)(2)](/current/title-27/section-19.402#p-19.402\(b\)\(2\)).
(ii) Prior to alternation from wine premises to distilled spirits plant premises, the proprietor must remove all wine and spirits from the wine premises that will be alternated. However, the proprietor may keep wine on the premises if it is being transferred in bond under [§ 19.402(b)(1)](/current/title-27/section-19.402#p-19.402\(b\)\(1\)). Further, the proprietor may keep spirits on the premises if they are being returned from bonded wine cellar premises to distilled spirits plant bonded premises under [§ 19.454](/current/title-27/section-19.454).
(2) *Brewery.* Prior to alternation from distilled spirits plant premises to operation of a brewery the proprietor must remove all spirits, denatured spirits, articles and wine from the premises to be alternated to brewery premises. Prior to alternation of brewery premises to distilled spirits plant premises, the proprietor must remove all beer from the premises except beer that is being received for production of distilled spirits as provided in [§ 19.296](/current/title-27/section-19.296).
(3) *General premises.* Prior to alternation between bonded and general premises, the proprietor must remove all spirits, denatured spirits, articles and wine from the premises to be alternated. However, the proprietor may keep bonded spirits on portions of bonded premises to be alternated to general premises if the spirits are taxpaid concurrently with the alternation. Also, the proprietor may keep taxpaid spirits on general premises that will be alternated to bonded premises if the spirits are to be immediately dumped and returned to bond under the provisions of [subpart Q of this part](/current/title-27/part-19/subpart-Q).
(4) *Manufacture of nonbeverage products.* Prior to alternation of the distilled spirits plant premises for use in the manufacture of eligible flavors, the proprietor must remove all spirits, denatured spirits, articles and wine from the premises to be alternated. However, the proprietor may keep spirits on portions of the premises to be curtailed if the proprietor pays the tax concurrent with the alternation. Further, the proprietor may keep taxpaid spirits that have not been used in the manufacture of a nonbeverage product on parts of the premises to be included in the extension of the bonded premises if the spirits are to be immediately dumped and returned to bond under the provisions of [subpart Q of this part](/current/title-27/part-19/subpart-Q).
(e) *Records.* The proprietor must prepare the record of alternating premises prescribed by [§ 19.627](/current/title-27/section-19.627) each time that the proprietor alternates premises.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172), [5178](https://www.govinfo.gov/link/uscode/26/5178))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1120](https://www.federalregister.gov/citation/82-FR-1120), Jan. 4, 2017]
#### § 19.144 Alternation of distilled spirits plant and volatile fruit-flavor concentrate plant premises.
The proprietor may temporarily extend or curtail the distilled spirits plant premises for alternate use with the premises of a contiguous volatile fruit-flavor concentrate plant. If a proprietor wishes to use all or a portion of the premises alternately as a volatile fruit-flavor concentrate plant or vice versa, the proprietor must comply with the requirements of [§§ 18.39](/current/title-27/section-18.39) and [18.41](/current/title-27/section-18.41) through [18.43 of this chapter](/current/title-27/section-18.43).
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172), [5178](https://www.govinfo.gov/link/uscode/26/5178))
### Discontinuance of Operations
#### § 19.147 Notice of discontinuance of operations.
If the proprietor plans to permanently discontinue one or more of the operations listed on the notice of registration filed under [subpart D of this part](/current/title-27/part-19/subpart-D), the proprietor must notify the appropriate TTB officer by filing form TTB F 5110.41, Registration of Distilled Spirits Plant, to show discontinuance of operations. The proprietor must submit the following with TTB F 5110.41:
(a) The permit covering each discontinued operation;
(b) A written request for cancellation of the permit(s);
(c) A written statement indicating whether or not—
(1) The proprietor has lawfully disposed of all spirits, denatured spirits, articles, wines, liquor bottles, and other pertinent items;
(2) There are any spirits, denatured spirits, wines, or liquor bottles in transit to the premises; and
(3) The proprietor has secured and returned to the appropriate TTB officer for cancellation all approved applications for transfer of spirits and denatured spirits to the premises; and
(d) A final monthly operations report, as provided for under [§ 19.632](/current/title-27/section-19.632), for each discontinued operation, with each report marked “Final Report.”
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172), [5271](https://www.govinfo.gov/link/uscode/26/5271))
## Subpart F—Bonds and Consents of Surety
### Bonding Requirements for a DSP
#### § 19.151 General.
(a) *Bond required.* Except as provided in [paragraph (d)](/current/title-27/section-19.151#p-19.151\(d\)) of this section, any person who plans to establish and operate a distilled spirits plant must provide TTB with one or more bonds on form TTB F 5110.56, Distilled Spirits Bond. TTB will not approve a registration or allow a person to operate a distilled spirits plant until the applicant has provided the necessary bonds. If a proprietor fails to pay any liability covered by a bond, TTB may seek payment from the proprietor, from the surety (see [§ 19.153](/current/title-27/section-19.153)) or from both the proprietor and the surety. The types and penal sums of bonds required will depend upon the type and size of the operations that the proprietor will conduct.
(b) *Bond terms and conditions.* The terms and conditions of a distilled spirits bond require that the proprietor comply with all provisions of law and regulations relating to activities covered by the bond, and to pay all taxes imposed by [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101), including taxes on unexplained shortages of bottled distilled spirits. The bond will further specify that the proprietor will pay all penalties incurred, or fines imposed, for violations of law and regulations relating to activities covered by the bond. The specific terms of the required bond(s) are stated on TTB F 5110.56.
(c) *Corporations and controlled subsidiaries.* For purposes of this subpart, the term “corporation” includes a Limited Liability Company (LLC) or Limited Liability Partnership (LLP) in any jurisdiction where the law authorizes such a business organization to operate. Whenever used in this subpart, the term “controlled subsidiary” means a corporation (or LLC or LLP) in which more than 50 percent of the voting power is controlled by a parent corporation.
(d) *Bonds covering distilled spirits for nonindustrial use and industrial use* —
(1) *Nonindustrial use.* A proprietor who pays tax on a deferred basis under [§ 19.235](/current/title-27/section-19.235) is not required to provide a bond or bonds to cover operations and withdrawals of distilled spirits for nonindustrial use during any portion of a calendar year for which the proprietor is eligible to use an annual or quarterly return period under [§ 19.235(b)](/current/title-27/section-19.235#p-19.235\(b\)) or [(c)](/current/title-27/section-19.235#p-19.235\(c\)). For purposes of the preceding sentence, a proprietor is considered to be paying tax on a deferred basis even if the proprietor does not pay tax during every return period as long as the proprietor intends to pay tax in a future period. See [§§ 19.73](/current/title-27/section-19.73) and [19.136](/current/title-27/section-19.136) for rules governing applying for this bond exemption. See [§ 19.168(b)](/current/title-27/section-19.168#p-19.168\(b\)) for rules governing when an existing proprietor who has not provided a bond under this paragraph must obtain bond coverage.
(2) *Industrial use.* A proprietor is required to provide one or more bonds to cover operations and withdrawals of distilled spirits for industrial use even if the proprietor pays tax on a deferred basis under [§ 19.235](/current/title-27/section-19.235) and is eligible to use an annual or quarterly return period under [§ 19.235(b)](/current/title-27/section-19.235#p-19.235\(b\)) or [(c)](/current/title-27/section-19.235#p-19.235\(c\)). In the case of a proprietor whose operations involve distilled spirits for both nonindustrial and industrial use, distilled spirits are considered to be for industrial use for purposes of this paragraph unless the proprietor designates the spirits as being solely for nonindustrial use either upon taking the production gauge (see [§ 19.304](/current/title-27/section-19.304)) or upon receiving the spirits and, in either case, does not thereafter mix the spirits with any spirits for industrial use.
(3) *Nonindustrial use and industrial use defined.* See [§ 19.472](/current/title-27/section-19.472) for the provisions defining the nonindustrial and industrial uses of distilled spirits.
([26 U.S.C. 5173](https://www.govinfo.gov/link/uscode/26/5173), [5551](https://www.govinfo.gov/link/uscode/26/5551))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1120](https://www.federalregister.gov/citation/82-FR-1120), Jan. 4, 2017]
#### § 19.152 Types of bonds.
(a) *Basic Bonds.* There are two basic types of bonds: the operations bond, and the withdrawal bond.
(1) *Operations bond.* An operations bond covers the tax liability for a variety of operations at a distilled spirits plant, along with any penalties incurred and fines imposed for violation of the law and regulations relating to activities covered by the bond.
(2) *Withdrawal bond.* A withdrawal bond covers the tax liability for tax determined distilled spirits withdrawn from the bonded premises on a tax deferred basis.
(b) *Other bonds.* In addition to the basic operations and withdrawal bonds, several variations of these bonds are available:
(1) An adjacent wine cellar bond covers operations at a distilled spirits plant and an adjacent bonded wine cellar;
(2) An area bond covers operations at two or more distilled spirits plant and any adjacent bonded wine cellars; and
(3) A unit bond covers both operations and withdrawals at one or more distilled spirits plants and operations at any adjacent bonded wine cellars.
([26 U.S.C. 5173](https://www.govinfo.gov/link/uscode/26/5173))
#### § 19.153 Bond guaranteed by a corporate surety.
(a) *Corporate surety.* A company that issues bonds is called a “corporate surety.” Proprietors must obtain the surety bonds required by this subpart from a corporate surety approved by the Secretary of the Treasury.
(b) *How to find an approved surety.* The Department of the Treasury publishes a list of approved corporate surety companies in Treasury Department Circular 570, Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies. Treasury Department Circular 570 is published in the Federal Register annually on the first business day in July, and supplemental changes are published periodically thereafter (see *[https://www.federalregister.gov](https://www.federalregister.gov)*). The most recent circular and any supplemental changes to it may be viewed on the Bureau of the Fiscal Service website (see *[https://fiscal.treasury.gov](https://fiscal.treasury.gov)*).
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1120](https://www.federalregister.gov/citation/82-FR-1120), Jan. 4, 2017; T.D. TTB-196, [89 FR 87940](https://www.federalregister.gov/citation/89-FR-87940), Nov. 6, 2024]
#### § 19.154 Bond guaranteed by deposit of securities or cash (including cash equivalents).
(a) *Bond guaranteed by deposit of securities* —
(1) *General.* As an alternative to the corporate surety bond under [§ 19.153](/current/title-27/section-19.153), a person can file a bond that guarantees payment of the liability by pledging one or more acceptable negotiable securities. These securities must have a par value (face amount) equal to or greater than the penal sums of the required bonds. The pledged securities are held in the Federal Reserve Bank in a safekeeping account with TTB as the pledgee. Should the proprietor fail to pay one or more of the guaranteed liabilities, TTB can take action to sell the deposited securities to satisfy the debt. Pledged securities will be released if there are no outstanding liabilities when the bond is terminated. (See [§ 19.170](/current/title-27/section-19.170).)
(2) *Acceptable securities.* Only public debt obligations of the United States, the principal and interest of which are unconditionally guaranteed by the United States Government, are acceptable for the purpose described in [paragraph (a)(1)](/current/title-27/section-19.154#p-19.154\(a\)\(1\)) of this section. The Department of the Treasury and certain other United States Government agencies issue debt instruments that are acceptable as collateral, such as Treasury notes and Treasury bills. Savings bonds, certificates of deposit and letters of credit are not acceptable. A list of securities acceptable as collateral in lieu of surety bonds is available from the Bureau of the Fiscal Service. Current information and guidance from the Bureau of the Fiscal Service Web site may be found at *[https://www.fiscal.treasury.gov](https://www.fiscal.treasury.gov).*
(b) *Bond guaranteed by deposit of cash or cash equivalent.* As an alternative to the corporate surety bond under [§ 19.153](/current/title-27/section-19.153), a person can file a bond that guarantees payment of the liability by submitting cash or its equivalent (including a money order, cashier's check, or personal check). Cash or its equivalent must be no less than the penal sums of the required bond. Cash equivalents must be payable to the Alcohol and Tobacco Tax and Trade Bureau. A bond described in this paragraph will be released if there are no outstanding liabilities when the bond is terminated. (See [§ 19.170](/current/title-27/section-19.170).)
([31 U.S.C. 9301](https://www.govinfo.gov/link/uscode/31/9301), [9303](https://www.govinfo.gov/link/uscode/31/9303); [31 CFR part 380](/current/title-31/part-380))
\[T.D. TTB-146, [82 FR 1120](https://www.federalregister.gov/citation/82-FR-1120), Jan. 4, 2017]
#### § 19.155 Change of surety bond terms—consent of surety.
In order to change the terms of an approved bond, both the principal and the surety company that guaranteed the bond must agree to the change. TTB must also approve the change. All changes to the terms of a bond must be executed on form TTB F 5000.18, Change of Bond (Consent of Surety) by both the principal and the surety with the same formality and proof of authority as required for the original bond. The completed, executed TTB F 5000.18 must be submitted to the National Revenue Center.
([26 U.S.C. 5173](https://www.govinfo.gov/link/uscode/26/5173))
#### § 19.156 Power of attorney for surety.
(a) *Requirement for power of attorney.* Every bond and every consent of surety filed with TTB in which an agent or officer executed the bond or consent on behalf of the surety must be supported by a power of attorney authorizing the agent or officer to execute the bond or consent of surety. The power of attorney assures TTB that the person who signed the bond on behalf of the surety has the legal authority to obligate the surety.
(b) *Form of power of attorney and endorsement.* A power of attorney will be prepared on the surety's own form, and must be executed under the surety's corporate seal. If the power of attorney submitted is other than a manually signed original, it must be accompanied by a certification from the surety that the power of attorney is valid.
(c) *Additional documentation.* The appropriate TTB officer authorized to approve and accept the bond may require additional evidence of the authenticity of signatures and the authority of persons signing on behalf of the surety to execute the bond or consent.
([31 U.S.C. 9304](https://www.govinfo.gov/link/uscode/31/9304), [9306](https://www.govinfo.gov/link/uscode/31/9306))
#### § 19.157 Disapproval of bonds and consents of surety.
(a) *Grounds for disapproval.* The appropriate TTB officer may disapprove any bond or consent of surety required by this part if the principal or any person having ownership, control or responsibility for actively managing the business of the surety has been previously convicted, in a court of competent jurisdiction of:
(1) Any fraudulent noncompliance with any provision of any law of the United States relating to internal revenue or customs taxation of spirits, wines, or beer, or if the offense was compromised by payment of penalties or otherwise, or
(2) Any felony under a law of any State or the District of Columbia, or the United States, prohibiting the manufacture, sale, importation, or transportation of spirits, wine, beer, or other intoxicating liquor.
(b) *Appeal.* If the appropriate TTB officer disapproves a bond or consent of surety, the person giving the bond may appeal the disapproval to the Administrator, who will hear the appeal. The decision of the Administrator will be final.
([26 U.S.C. 5551](https://www.govinfo.gov/link/uscode/26/5551))
### Requirements for Operations and Withdrawal Bonds
#### § 19.161 Operations bond.
(a) *General.* Except as provided in [§ 19.151(d)](/current/title-27/section-19.151#p-19.151\(d\)), any person who intends to establish a distilled spirits plant must furnish an operations bond (or a unit bond, see [§ 19.165](/current/title-27/section-19.165)) covering distilled spirits operations at such plant on TTB F 5110.56 with the original application to register the distilled spirits plant.
(b) *Approval of bond.* The appropriate TTB officer may require a statement, executed under the penalty of perjury, as to whether the principal, or any person owning, controlling, or managing the business of the applicant has been convicted of, or has compromised any offense listed in [§ 19.157(a)(1)](/current/title-27/section-19.157#p-19.157\(a\)\(1\)), or has been convicted of any offense listed in [§ 19.157(a)(2)](/current/title-27/section-19.157#p-19.157\(a\)\(2\)). If the above statement contains an affirmative answer, the applicant must provide an additional detailed statement describing the circumstances surrounding each conviction or compromise. The appropriate TTB officer will decide whether to approve or disapprove the bond.
([26 U.S.C. 5173](https://www.govinfo.gov/link/uscode/26/5173), [5551](https://www.govinfo.gov/link/uscode/26/5551))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1121](https://www.federalregister.gov/citation/82-FR-1121), Jan. 4, 2017]
#### § 19.162 Operations bond for distilled spirits plant and adjacent bonded wine cellar.
(a) *One bond satisfying two requirements.* A proprietor who operates a bonded wine cellar that is adjacent to the proprietor's distilled spirits plant may file a single operations bond to cover the operations of the distilled spirits plant and the bonded wine cellar. A proprietor who files this type of bond satisfies the requirement in [26 U.S.C. 5173](https://www.govinfo.gov/link/uscode/26/5173) for an operations bond covering the distilled spirits plant and the requirement in [26 U.S.C. 5354](https://www.govinfo.gov/link/uscode/26/5354) for a bond covering wine and spirits possessed at, and in transit to, the bonded wine cellar. (The proprietor may still have to obtain a supplemental bond for the wine cellar to cover liabilities resulting from deferred payment of tax. See the second sentence of [26 U.S.C. 5354](https://www.govinfo.gov/link/uscode/26/5354).)
(b) *One bond combining terms and coverage of separate bonds.* An operations bond filed under [paragraph (a)](/current/title-27/section-19.162#p-19.162\(a\)) of this section must contain the same terms and conditions that would be in separate bonds for the distilled spirits plant and for the bonded wine cellar. The proprietor may not allocate or divide the penal sum between the distilled spirits plant and the bonded wine cellar. The total amount of the bond must be available to satisfy any liability incurred under the terms of the bond at either facility.
(c) *Persons qualified for a single bond.* A proprietor may choose to file a single operations bond for a distilled spirits plant and adjacent bonded wine cellar only if:
(1) Such distilled spirits plant is qualified under [subpart D of this part](/current/title-27/part-19/subpart-D) for the production of distilled spirits; and
(2) Such wine cellar and distilled spirits plant are operated by the same person (or in the case of a corporation, by such corporation and its controlled subsidiaries).
([26 U.S.C. 5173](https://www.govinfo.gov/link/uscode/26/5173), [5351](https://www.govinfo.gov/link/uscode/26/5351), [5354](https://www.govinfo.gov/link/uscode/26/5354))
#### § 19.163 Area operations bond.
(a) *Area operations bond covering multiple locations.* A person who operates more than one distilled spirits plant within the geographical area serviced by the National Revenue Center may submit to TTB an area operations bond covering the operations of any two or more such plants and any bonded wine cellars that are adjacent to such plants and which otherwise could be covered by an operations bond. Area operations bonds filed under this section will be in lieu of the operations bond requirements for single distilled spirits plants under [§§ 19.161](/current/title-27/section-19.161) and [19.166](/current/title-27/section-19.166) and must contain the same terms and conditions as those contained in separate bonds filed for single distilled spirits plants. Any person who files an area operations bond may not allocate or divide the penal sum of the area operations bond between the separate locations and the total penal sum of the bond must be available to satisfy liability incurred at any of the covered locations.
(b) *Area operations bonds filed by corporations.* An area operations bond may only cover distilled spirits plants and adjacent bonded wine cellars that are operated by the same person. For purposes of this section, a corporation and its controlled subsidiaries are considered to be one person. Further, a controlled subsidiary is a corporation in which more than 50 percent of the voting power is controlled by the parent corporation. Consequently, an area operations bond may cover distilled spirits plants and adjacent bonded wine cellars operated by a parent corporation and one or more of its controlled subsidiaries. The name of each corporation that operates a covered facility must appear on the bond as a principal, whether the operating corporation is the parent or a subsidiary. The bond must bear an authorized signature for each operating corporation appearing on the bond.
([26 U.S.C. 5173](https://www.govinfo.gov/link/uscode/26/5173))
#### § 19.164 Withdrawal bond.
(a) *Requirement for a withdrawal bond.* Except as provided in [§ 19.151(d)](/current/title-27/section-19.151#p-19.151\(d\)), a person must provide TTB with a withdrawal bond for a distilled spirits plant if the person intends to withdraw spirits from the distilled spirits plant upon determination of the taxes due on the spirits but before payment of the tax. The withdrawal bond must guarantee payment of any taxes due on distilled spirits withdrawn from bonded premises up to the amount of the bond. Such bond will be in addition to the operations bond, and if the distilled spirits are withdrawn under the withdrawal bond, the operations bond will no longer cover liability for payment of the tax on the spirits withdrawn. For purposes of this section, a person includes a corporation, together with all of its controlled subsidiaries, and a controlled subsidiary has the same meaning as in [§ 19.163(b)](/current/title-27/section-19.163#p-19.163\(b\)).
(b) *One bond covering multiple plants.* A person who operates more than one distilled spirits plant within the geographical area serviced by the National Revenue Center may submit to TTB a single withdrawal bond that covers withdrawals from all such distilled spirits plants within that geographic area.
(c) *Penal sum of bonds* —
(1) *Penal sum of a bond covering a single plant.* A person who files a withdrawal bond for a single plant must compute the penal sum of such bond in accordance with [§ 19.166](/current/title-27/section-19.166). If the penal sum of such bond is less than the maximum amount, withdrawals from the plant may not exceed the penal sum.
(2) *Penal sum of bond covering multiple plants.* A person who files one withdrawal bond to cover two or more distilled spirits plants must compute the required penal sum for each plant individually in accordance with [§ 19.166](/current/title-27/section-19.166). The penal sum of the withdrawal bond must be equal to, or greater than, the total of the minimum amounts required for the individual plants. The bond must show the amount of coverage allocated to each individual plant as well as the total penal sum for all plants. If the portion of the penal sum allocated to a particular plant is less than the maximum amount prescribed in [§ 19.166](/current/title-27/section-19.166) for a single plant, withdrawals from that plant must not exceed the amount of the penal sum allocated to that plant. The allocation of the penal sum notwithstanding, the entire penal sum of the bond must be available to satisfy all liability for tax on withdrawals from any and all of the covered plants.
([26 U.S.C. 5173](https://www.govinfo.gov/link/uscode/26/5173))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1121](https://www.federalregister.gov/citation/82-FR-1121), Jan. 4, 2017]
#### § 19.165 Unit bonds.
(a) *Unit bond covering operations and withdrawals.* If a person is otherwise required to file bonds for both operations at one or more distilled spirits plants and withdrawals from one or more distilled spirits plants, the person may instead submit a single unit bond that provides all of the guarantees that would otherwise be provided by separate operations and withdrawal bonds. The unit bond may also provide coverage for operations at adjacent bonded wine cellars. For purposes of this section, a person includes a corporation, together with all of its controlled subsidiaries, and a controlled subsidiary has the same meaning as in [§ 19.163(b)](/current/title-27/section-19.163#p-19.163\(b\)).
(b) *Required penal sum* —
(1) *General.* A person must determine the penal sum for the unit bond by separately calculating in accordance with [§ 19.166](/current/title-27/section-19.166), and then totaling, the amounts needed to cover operations and withdrawals at each individual plant covered by the bond. The penal sum for the unit bond must not be less than the sum of the minimum penal sums that would be required if each of the plants had its own bond.
(2) *Allocation between operations and withdrawals.* A unit bond must show separately the amount of coverage provided for operations (including operations at each adjacent bonded wine cellar if applicable) and for withdrawals at each distilled spirits plant covered by the bond.
(3) *Tax liability must not exceed allocated penal sum.* If the amount of the penal sum allocated to operations at, or withdrawals from, a particular plant is less than the maximum amount prescribed in [§ 19.166](/current/title-27/section-19.166) for a single plant, the tax liability for operations at, or withdrawals from, that plant must not exceed that allocated amount.
(4) *Total penal sum available for each plant.* Even when the penal sum of a unit bond is allocated among multiple plants, the bond must provide that the total penal amount of the bond will be available to satisfy any liability incurred under the terms and conditions of the bond at any plant covered by the bond.
([26 U.S.C. 5173](https://www.govinfo.gov/link/uscode/26/5173))
#### § 19.166 Required penal sums.
A person must determine the penal sums for the various bonds required by this subpart according to the following table:
| (a) Operations bond for a single plant operating as a: | Required penal sum represents: | The penal sum must be: | |
| ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------- | --------- |
| Not less than— | and need not be more than— | | |
| (1) Distiller | The amount of tax on spirits produced during a 15-day period | \$5,000 | \$100,000 |
| (2) Warehouseman, in general | The amount of tax on spirits and wines deposited in, stored on, and in transit to, the bonded premises | 5,000 | 200,000 |
| (3) Warehouseman limited to storage of spirits in packages to a total of not over 50,000 proof gallons | The amount of tax on spirits and wines deposited in, stored on, and in transit to, the bonded premises | 5,000 | 50,000 |
| (4) Distiller and warehouseman | The amount of tax on spirits produced during a period of 15 days, plus the tax on spirits and wines deposited in, stored on, and in transit to the bonded premises | 10,000 | 200,000 |
| (5) Distiller and processor | The amount of tax on spirits produced during a 15-day period, plus the amount of tax on spirits, denatured spirits, articles and wines deposited in, or stored on, and in transit to the bonded premises | 10,000 | 200,000 |
| (6) Warehouseman and processor in general | The amount of tax on spirits, denatured spirits, articles, and wines deposited in, stored on, and in transit to, the bonded premises | 10,000 | 250,000 |
| (7) Warehouseman and processor, limited to storage of spirits or denatured spirits in packages to a total of not over 50,000 proof gallons, and processing of spirits or denatured spirits so stored | The amount of tax on spirits, denatured spirits, articles, and wines deposited in, stored on, and in transit to, the bonded premises | 10,000 | 50,000 |
| (8) Distiller, warehouseman and processor | The amount of tax on spirits produced during a 15-day period, plus the amount of tax on spirits, denatured spirits, articles and wines deposited in, stored on, and in transit to, the bonded premises | 15,000 | 250,000 |
| (9) Distiller with adjacent bonded wine cellar | The amount required for a distiller (see paragraph (a)(1). above) plus the amount of tax on wines and wine spirits possessed on, and in transit to, the adjacent wine cellar | 6,000 | 150,000 |
| (10) Distiller and warehouseman with adjacent bonded wine cellar | The amount required for a distiller & warehouseman (see paragraph (a)(4). above) plus the amount of tax on wines and wine spirits possessed on, and in transit to, the adjacent wine cellar | 11,000 | 250,000 |
| (11) Distiller and processor with adjacent bonded wine cellar | The amount required for a distiller & processor (see paragraph (a)(5). above) plus the amount of tax on wines and wine spirits possessed on, and in transit to, the adjacent wine cellar | 11,000 | 250,000 |
| (12) Distiller, warehouseman and processor with adjacent bonded wine cellar | The amount required for a distiller-warehouseman-processor (see paragraph (a)(8). above) plus the amount of tax on wines and wine spirits possessed on, and in transit to, the adjacent wine cellar | 16,000 | 300,000 |
| (b) Area operations bond for two or more plants whose combined required penal sums under [paragraph (a)](/current/title-27/section-19.166#p-19.166\(a\)) of this section: | Required penal sum is: | But need not be more than: |
| ------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------- | -------------------------- |
| (1) Do not exceed \$300,000 | 100% | \$300,000 |
| (2) Exceed $300,000 but do not exceed $600,000 | $300,000 plus 70% of the amount over $300,000 | 510,000 |
| (3) Exceed $600,000 but do not exceed $1,000,000 | $510,000 plus 50% of the amount over $600,000 | 710,000 |
| (4) Exceed $1,000,000 but do not exceed $2,000,000 | $710,000 plus 35% of the amount over $1,000,000 | 1,060,000 |
| (5) Exceeds \$2,000,000 | $1,060,000 plus 25% of the amount over $2,000,000 | |
| (c) Withdrawal bond for: | Required penal sum represents: | The penal sum must be: | |
| ---------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------ | --------------------------------- |
| Not less than— | and need not be more than— | | |
| (1) One distilled spirits plant | The amount of tax which, at any one time, is chargeable against such bond, but has not yet been paid | \$1,000 | \$1,000,000. |
| (2) Two or more distilled spirits plants | Sum of the penal sums for each plant calculated in [paragraph (c)(1)](/current/title-27/section-19.166#p-19.166\(c\)\(1\)) of this section | (\$1,000) × (number of plants) | (Number of plants) × \$1,000,000. |
| (d) Unit bond for: | Required penal sum represents: | The penal sum must be: | |
| ---------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------ |
| Not less than— | and need not be more than— | | |
| (1) Operations at one distilled spirits plant (including any adjacent bonded wine cellar), and withdrawals from the bonded premises of the same plant | An amount equal to the sum of the required penal sums of an operations bond and a withdrawal bond for the plant, if such bonds were obtained separately. (See paragraphs (a) and (c)(1) in this section.) | \$6,000 | \$1,300,000. |
| (2) Operations at two or more distilled spirits plants (including any adjacent bonded wine cellars), and withdrawals from the bonded premises of the same plants | An amount equal to the sum of the penal sums of an area operations bond and withdrawal bonds needed for all of the covered plants, if such bonds were obtained separately. (Total penal sums of paragraphs (b) and (c)(2) in this section.) | Sum of the minimum penal sums for operations and withdrawal bonds required for each plant covered by the bond | Sum of the maximum penal sums for area operations bonds and withdrawal bonds required for the plants covered by the unit bond. |
([26 U.S.C. 5173](https://www.govinfo.gov/link/uscode/26/5173))
#### § 19.167 Increase of bond coverage.
(a) *When required.* If the penal sum of a bond is less than the maximum amount specified by [§ 19.166](/current/title-27/section-19.166), and liabilities increase to the point where they exceed the bond coverage, the proprietor must increase the amount of the bond to cover the increased liability. The proprietor must increase the bond coverage either by replacing the existing bond with a new, larger bond that covers the entire liability, or by supplementing the existing bond with a separate strengthening bond in accordance with [paragraph (b)](/current/title-27/section-19.167#p-19.167\(b\)) of this section.
(b) *Strengthening bonds.* A strengthening bond is a second bond with the same surety as on the original bond which covers the increased liability. A strengthening bond must show both its execution date and its effective date. TTB will not accept a strengthening bond if it contains any term or condition that is a release, or could be interpreted as a release, from liability under any former bond, or that limits the liability of any bond to less than its full penal sum.
([26 U.S.C. 5173](https://www.govinfo.gov/link/uscode/26/5173))
#### § 19.168 Superseding bonds and new bonds for existing proprietors.
(a) *Superseding bonds.* A new bond that replaces another bond is called a superseding bond. The proprietor must replace an existing bond with a superseding bond in any of the following circumstances:
(1) *Surety company no longer acceptable.* The proprietor must file a superseding bond if the surety on the proprietor's current bond becomes insolvent or if the surety is removed from the list of approved sureties in Treasury Department Circular 570 (see [§ 19.153](/current/title-27/section-19.153)). TTB may also require the filing of a superseding bond if any other contingency affecting the validity or efficiency of the bond arises.
(2) *Change of control.* An executor, administrator, assignee, receiver, trustee, or other person acting in a fiduciary capacity, continuing or liquidating the business of the principal on a bond, must either provide TTB with a superseding bond, or obtain consent from the surety on each existing bond when assuming control of the business.
(3) *Termination of bond by surety.* If the surety applies to terminate a bond under [§ 19.171](/current/title-27/section-19.171), and the proprietor wishes to continue the activity covered by the bond, the proprietor must file a superseding bond that becomes effective on or before the termination date of the existing bond. The superseding bond must show both its execution date and its effective date.
(b) *New bonds for existing proprietors* —
(1) *General.* Subject to [paragraph (b)(2)](/current/title-27/section-19.168#p-19.168\(b\)\(2\)) of this section, if an existing proprietor has not furnished a bond or bonds covering operations and withdrawals of distilled spirits for nonindustrial use because the proprietor was exempt from bond requirements under [§ 19.151(d)](/current/title-27/section-19.151#p-19.151\(d\)), the proprietor must furnish a bond or bonds as provided in this subpart beginning in any portion of a calendar year following the first date on which the aggregate amount of tax due from the proprietor during the calendar year exceeds \$50,000. When furnishing the bond or bonds, the proprietor must also file an amendment to TTB F 5110.41, Registration of Distilled Spirits Plant, as provided in [§ 19.136](/current/title-27/section-19.136) to change the proprietor's bond status.
(2) *Grace period for bonds covering operations.* An existing proprietor who must furnish an operations bond as provided in [paragraph (b)(1)](/current/title-27/section-19.168#p-19.168\(b\)\(1\)) of this section will be treated as having furnished the required bond if the proprietor submits the bond on TTB F 5110.56 no later than 30 days following the first date on which the aggregate amount of tax due from the proprietor during the relevant calendar year exceeds \$50,000. The proprietor will be treated as having furnished the required operations bond for purposes of this paragraph until TTB approves or disapproves the bond.
(3) *Bonds covering withdrawals.* [Paragraph (b)(2)](/current/title-27/section-19.168#p-19.168\(b\)\(2\)) of this section does not apply to withdrawal bonds. If an existing proprietor must furnish a withdrawal bond as provided in [paragraph (b)(1)](/current/title-27/section-19.168#p-19.168\(b\)\(1\)) of this section, the proprietor may not withdraw distilled spirits from the bonded premises on a tax deferred basis until TTB approves the withdrawal bond.
([26 U.S.C. 5173](https://www.govinfo.gov/link/uscode/26/5173), [5175](https://www.govinfo.gov/link/uscode/26/5175), [5176](https://www.govinfo.gov/link/uscode/26/5176), [5551](https://www.govinfo.gov/link/uscode/26/5551))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1121](https://www.federalregister.gov/citation/82-FR-1121), Jan. 4, 2017]
#### § 19.169 Effect of failure to furnish a superseding bond or a new bond.
(a) *Operations bond.* Except as provided in [§ 19.151(d)](/current/title-27/section-19.151#p-19.151\(d\)), a person may not operate a distilled spirits plant without an operations bond. A person who does not submit an acceptable superseding operations bond when required to do so under [§ 19.168(a)](/current/title-27/section-19.168#p-19.168\(a\)) must immediately discontinue the activities to which the lapsed bond coverage relates upon lapse of the existing bond coverage. If a proprietor must furnish an operations bond under [§ 19.168(b)(1)](/current/title-27/section-19.168#p-19.168\(b\)\(1\)) and does not submit an operations bond within the time prescribed in [§ 19.168(b)(2)](/current/title-27/section-19.168#p-19.168\(b\)\(2\)), the proprietor must immediately discontinue the activities required to be covered by the operations bond.
(b) *Withdrawal bond.* Except as provided in [§ 19.151(d)](/current/title-27/section-19.151#p-19.151\(d\)), a person may not defer payment of taxes on spirits withdrawn from a distilled spirits plant upon determination of tax without a withdrawal bond. If a person is required to submit a new or superseding withdrawal bond under [§ 19.168](/current/title-27/section-19.168), the person must submit the bond in accordance with that section. A person who does not submit and receive approval of an acceptable withdrawal bond when required to do so under [§ 19.168](/current/title-27/section-19.168) may not withdraw distilled spirits from the bonded premises on a deferred basis. Upon lapse of the existing bond coverage, or upon the date a new bond is required under [§ 19.168(b)](/current/title-27/section-19.168#p-19.168\(b\)), the person must pay the tax at the time of withdrawal, except in the case of distilled spirits withdrawn free of tax or withdrawn without payment of tax under [26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214) or withdrawn exempt from tax under [26 U.S.C. 7510](https://www.govinfo.gov/link/uscode/26/7510).
(c) *Unit bond.* A person who does not provide an acceptable superseding unit bond when required to do so under [§ 19.168](/current/title-27/section-19.168) must immediately discontinue the business or distilled spirits operations to which the lapsed bond coverage relates. Upon lapse of the existing bond coverage the person must also pay the tax at the time of withdrawal, except in the case of distilled spirits withdrawn free of tax or withdrawn without payment of tax under [26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214) or withdrawn exempt from tax under [26 U.S.C. 7510](https://www.govinfo.gov/link/uscode/26/7510).
([26 U.S.C. 5173](https://www.govinfo.gov/link/uscode/26/5173), [5175](https://www.govinfo.gov/link/uscode/26/5175), [5176](https://www.govinfo.gov/link/uscode/26/5176))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1121](https://www.federalregister.gov/citation/82-FR-1121), Jan. 4, 2017]
#### § 19.170 Termination of bonds.
Liability under operations bonds, withdrawal bonds, and unit bonds may be terminated for future withdrawals, future production, or future deposits as set forth below:
(a) *On application by the surety.* A surety may terminate a bond by filing a notice as provided in [§ 19.171](/current/title-27/section-19.171);
(b) *By replacement of the bond.* A principal may terminate an existing bond by replacing it with a superseding bond approved by TTB;
(c) *By discontinuing withdrawals.* A principal may terminate a withdrawal bond by notifying TTB that the principal has stopped making withdrawals covered by the bond, if the bond was filed solely as a withdrawal bond;
(d) *By discontinuing the business.* A principal may terminate a bond by notifying TTB that the principal has discontinued business; and
(e) *On application by an existing proprietor who becomes exempt from bond requirements.* If a proprietor has held a bond or bonds covering operations or withdrawals of distilled spirits for nonindustrial use and becomes exempt from those bond requirements as provided under [§ 19.151(d)](/current/title-27/section-19.151#p-19.151\(d\)), the proprietor may apply to TTB to terminate the bond or bonds covering such operations or withdrawals. To apply, the proprietor must file an amendment to TTB F 5110.41, Registration of Distilled Spirits Plant, as provided in [§ 19.136](/current/title-27/section-19.136). The proprietor must accurately state in the submission that the proprietor:
(1) Will withdraw distilled spirits for deferred payment of tax as provided in [§ 19.235](/current/title-27/section-19.235);
(2) Reasonably expects to be liable for not more than \$50,000 in taxes with respect to distilled spirits imposed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001) and [7652](https://www.govinfo.gov/link/uscode/26/7652) for the current calendar year (see definition of “Reasonably expects” in [§ 19.235(e)](/current/title-27/section-19.235#p-19.235\(e\))); and
(3) Was liable for not more than \$50,000 in such taxes in the preceding calendar year.
([26 U.S.C. 5173](https://www.govinfo.gov/link/uscode/26/5173))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1121](https://www.federalregister.gov/citation/82-FR-1121), Jan. 4, 2017]
#### § 19.171 Surety notice of relief from bond liability.
(a) *Notice to principal.* A surety on a bond may, at any time, notify the principal in writing that the surety desires to be relieved of liability under the bond.
(b) *Notice to TTB.* A surety on a bond may, at any time, notify the appropriate TTB officer in writing that the surety desires to be relieved of liability under the bond. The notice must specify the date after which the surety desires to be relieved of liability. In the case of a withdrawal bond, the date specified in the notice must be at least ten days after the notice is received by the appropriate TTB officer. In the case of an operations bond or unit bond, the date specified in the notice must be at least 90 days after the notice is received by the appropriate TTB officer. When a surety files a termination notice with TTB, the surety must include either an acknowledgement from the principal that the principal is aware that the surety is terminating the bond or proof that the surety has served the principal with notice of its intent to terminate the bond.
(c) *Effect of notice.* The bond coverage will end as of close of business on the date specified in the notice, provided the surety timely filed a proper and complete termination notice, and the surety does not withdraw its termination notice in writing prior to the termination date. The surety will be released from future liability under the bond to the extent set forth in [§ 19.172](/current/title-27/section-19.172).
([26 U.S.C. 5173](https://www.govinfo.gov/link/uscode/26/5173), [5175](https://www.govinfo.gov/link/uscode/26/5175), [5176](https://www.govinfo.gov/link/uscode/26/5176))
#### § 19.172 Relief of surety from bond liability.
A surety that has provided proper notice under [§ 19.171](/current/title-27/section-19.171) will be relieved from liability under the bond in question as set forth below:
(a) *Operations or unit bond.* When a superseding bond is submitted, the surety will be relieved of future liability related to production and deposits that take place after the effective date of the superseding bond. However, the surety remains liable for the tax on all distilled spirits or wines produced, or for other liabilities incurred, during the term of the bond. Further, if a superseding bond is not submitted, the surety will remain liable under the bond for all spirits or wines that are on hand or in transit to the bonded premises or bonded wine cellar on the date specified in the notice. The liability of the surety will continue until all such spirits or wines have been lawfully disposed of, or until a new bond has been submitted by the principal covering the spirits or wine.
(b) *Withdrawal or unit bonds.* The surety will be relieved from liability for withdrawals made after the date specified in the notice, or upon the effective date of a new bond if one is given.
([26 U.S.C. 5173](https://www.govinfo.gov/link/uscode/26/5173), [5176](https://www.govinfo.gov/link/uscode/26/5176))
#### § 19.173 Release of pledged securities.
Securities that are pledged and deposited with TTB under [§ 19.154](/current/title-27/section-19.154) will only be released by TTB in accordance with the provisions of [31 CFR Part 225](/current/title-31/part-225), Acceptance of Bonds Secured by Government Obligations in Lieu of Bonds with Sureties. The appropriate TTB officer will not release pledged securities prior to termination of the liability under the bond for which they were pledged. When the appropriate TTB officer is satisfied that the pledged securities may be released, the official will set a date or dates on which a part or all of the securities may be released. At any time prior to the release of the securities, the appropriate TTB officer may extend the date of release for any additional length of time deemed necessary.
([31 U.S.C. 9301](https://www.govinfo.gov/link/uscode/31/9301), [9303](https://www.govinfo.gov/link/uscode/31/9303))
## Subpart G—Construction, Equipment, and Security Requirements
#### § 19.181 General.
The proprietor of a distilled spirits plant must apply certain construction, equipment, and security standards at the plant. These standards are intended to ensure the protection of untaxed spirits at the plant and to ensure proper measurement and accountability for products on bonded premises. This subpart prescribes those standards.
([26 U.S.C. 5178](https://www.govinfo.gov/link/uscode/26/5178))
### Tank Requirements
#### § 19.182 Tanks—general requirements.
The proprietor of a distilled spirits plant must ensure that all tanks on the premises used to hold spirits, denatured spirits, or wines are:
(a) Used for the purpose listed on the application and plant registration;
(b) Equipped with accurate means for measuring their contents. If the means for measurement is not a permanent fixture on the tank, the proprietor must equip the tank with a fixed device for measuring the contents. However, tanks having a capacity of less than 101 gallons are not required to have permanent gauge devices;
(c) Accurately calibrated if used for any of the gauges described in this part. Further, if tanks or their gauging devices are moved in any manner subsequent to original calibration, the tanks shall not be used until recalibrated;
(d) Accessible through walkways, landings, and stairs that permit access to all parts of the tank;
(e) Equipped or situated so that they may be locked or secured; and
(f) Constructed to prevent access to the spirits or wines through vents, flame arresters or other safety devices.
([26 U.S.C. 5006](https://www.govinfo.gov/link/uscode/26/5006), [5204](https://www.govinfo.gov/link/uscode/26/5204), [5505](https://www.govinfo.gov/link/uscode/26/5505))
#### § 19.183 Scale tanks.
(a) Except as otherwise provided in [paragraph (b)](/current/title-27/section-19.183#p-19.183\(b\)) of this section, if the proprietor uses a tank to determine the distilled spirits tax imposed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), the tank must be mounted on scales and the contents of the tank must be determined by weight. The scale tank also must be equipped with a suitable device so that the volume of the contents can be quickly and accurately determined.
(b) The requirement to mount tanks on scales does not apply to tanks having a capacity of 55 gallons or less. Such tanks may be moved onto an accurately calibrated scale when a tax determination gauge needs to be made.
([26 U.S.C. 5006](https://www.govinfo.gov/link/uscode/26/5006), [5204](https://www.govinfo.gov/link/uscode/26/5204), [5505](https://www.govinfo.gov/link/uscode/26/5505))
#### § 19.184 Scale tank minimum graduations.
(a) The beams or dials on scale tanks used for tax determination must have minimum graduations not greater than the following:
| Quantity to be weighed | Minimum graduation |
| -------------------------------- | ------------------ |
| Not exceeding 2,000 pounds | 1⁄2 pound |
| Between 2,000 and 6,000 pounds | 1 pound |
| Between 6,000 and 20,000 pounds | 2 pounds |
| Between 20,000 and 50,000 pounds | 5 pounds |
| Over 50,000 pounds | 10 pounds |
(b) For scales having a capacity greater than 2,000 pounds, the minimum quantity which may be entered onto the weighing tank scale for gauging for tax determination will be the greater of:
(1) 1,000 times the minimum graduation of the scale, or
(2) 5 percent of the total capacity of the weighing tank scale.
(c) The weighing of lesser quantities for determination of tax may be authorized by the appropriate TTB officer where the beam of the scale is calibrated in 1⁄2 pound or 1 pound graduations and it is found by actual test that the scales are accurate at each graduation.
(d) Lots of spirits weighing 1,000 pounds or less shall be weighed on scales having 1⁄2 pound graduations.
([26 U.S.C. 5006](https://www.govinfo.gov/link/uscode/26/5006), [5204](https://www.govinfo.gov/link/uscode/26/5204), [5505](https://www.govinfo.gov/link/uscode/26/5505))
#### § 19.185 Testing scale tanks for accuracy.
(a) A proprietor who uses a scale tank for tax determination must ensure the accuracy of the scale through periodic testing. Testing of the scale must be conducted at least every 6 months and whenever the scale is adjusted or repaired.
(b) A proprietor also must test, at least once a month, the gallonage represented to be in a scale tank against the gallonage indicated by volumetric determination of the contents of the tank. However, if the scale is not used during a month, it is only necessary to verify against the volumetric determination when the scale is next used. The proprietor must make the volumetric determination in accordance [part 30 of this chapter](/current/title-27/part-30). If the variation exceeds 0.5 percent of the quantity shown in the tank, the proprietor must take appropriate action to verify the accuracy of the scale.
(c) If the appropriate TTB officer determines that a scale may be inaccurate, the proprietor must test the accuracy of the scale.
([26 U.S.C. 5006](https://www.govinfo.gov/link/uscode/26/5006), [5204](https://www.govinfo.gov/link/uscode/26/5204), [5505](https://www.govinfo.gov/link/uscode/26/5505))
### Package Scale and Pipeline Requirements
#### § 19.186 Package scales.
Proprietors must ensure that scales used to weigh packages are tested at least every 6 months and whenever they are adjusted or repaired. However, if a scale is not used during a 6-month period, it is only necessary to test the scale prior to its next use. Scales used to weigh packages that hold 10 wine gallons or less must indicate weight in ounces or hundredths of a pound.
([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204))
#### § 19.187 Pipelines.
All pipelines, including flexible hoses, that are used to transfer spirits, denatured spirits, articles, and wines must be constructed, arranged, and secured so as to ensure protection of the revenue and permit ready examination. The appropriate TTB officer may approve pipelines that cannot be readily examined if they pose no jeopardy to the revenue.
([26 U.S.C. 5178](https://www.govinfo.gov/link/uscode/26/5178))
### Measuring and Proofing Equipment Requirements
#### § 19.188 Measuring devices and proofing instruments.
(a) *General.* A proprietor of a distilled spirits plant must have accurate instruments and equipment at the plant for determining the proof and volume of spirits.
(b) *Instruments.* The hydrometers and thermometers that a proprietor uses to gauge spirits must show subdivisions or graduations of proof and temperature as specified in [part 30 of this chapter](/current/title-27/part-30). Proprietors must frequently test their hydrometers and thermometers to ensure their accuracy. If an instrument appears to be in error, the proprietor may not use the instrument until it is tested and certified as accurate by the manufacturer or another qualified person.
(c) *Meters.* A proprietor may use an accurate mass flow meter to measure the volume of bulk spirits. A mass flow meter used for tax determination of bulk spirits must be certified by the manufacturer or other qualified person as accurate within a tolerance of plus or minus 0.1 percent. A mass flow meter used for all other required gauges of bulk spirits must be certified by the manufacturer or other qualified person as accurate within a tolerance of plus or minus 0.5 percent. The proprietor must make corrections for the temperature of the spirits being measured in conjunction with the volumetric measurement of spirits by mass flow meter. The proprietor must also test mass flow meters at least every 6 months to ensure that they are accurate within the required tolerances.
([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204))
### Other Plant Requirements
#### § 19.189 Identification of structures, areas, apparatus, and equipment.
(a) *Buildings.* The proprietor must mark each building at a distilled spirits plant where spirits, denatured spirits, articles, wine, or distilling or fermenting materials are kept with a distinguishing number or letter.
(b) *Tanks.* The proprietor must mark each tank or receptacle for spirits, denatured spirits, or wine to show a unique serial number and capacity.
(c) *Stills.* The proprietor must number and mark to show the use of each still, fermenter, cooker, and yeast tank.
(d) *Other major equipment.* The proprietor must identify the use of all other major equipment used for processing or containing spirits, denatured spirits, wine, distilling or fermenting material, and all other tanks, unless the intended purpose is readily apparent.
([26 U.S.C. 5178](https://www.govinfo.gov/link/uscode/26/5178))
#### § 19.190 Office facilities for TTB use.
(a) When required by the appropriate TTB officer, the proprietor must provide a secure cabinet equipped for locking for use by TTB.
(b) If one or more TTB officers are assigned to a distilled spirits plant to supervise operations on a continuing basis, the proprietor must provide a suitable office at the plant for the exclusive use of the TTB officers in performing their duties. The appropriate TTB officer will determine if the office facilities are suitable.
([26 U.S.C. 5178](https://www.govinfo.gov/link/uscode/26/5178))
#### § 19.191 Signs.
The proprietor must place and keep a conspicuous sign on the outside of the place of business showing the name of the proprietor and the business, or businesses, in which engaged.
([26 U.S.C. 5180](https://www.govinfo.gov/link/uscode/26/5180))
#### § 19.192 Security.
(a) *General.* The proprietor of a distilled spirits plant must provide adequate security measures at the plant in order to protect the revenue.
(b) *Buildings.* The buildings, rooms, and partitions must be constructed of substantial materials. Doors, windows, or any other openings to the building must be secured or fastened during times when distilled spirits plant operations are not being conducted.
(c) *Outdoor tanks.* Outdoor tanks containing spirits, denatured spirits, or wine must be individually locked or locked within an enclosure when they are not in use.
(d) *Indoor tanks.* Indoor tanks containing spirits, denatured spirits, or wines, or the rooms or buildings in which such tanks are housed, must be equipped so that they may be secured.
(e) *Approved locks.* Locks meeting the specifications prescribed in [paragraph (f)](/current/title-27/section-19.192#p-19.192\(f\)) of this section must be used to secure:
(1) Outdoor tanks used to store spirits, or an enclosure around such tanks;
(2) Indoor tanks used to store spirits, or the door from which access may be gained from the outside to the rooms or buildings in which such tanks are housed; and
(3) Any doors from which access may be gained from the outside to rooms or buildings containing spirits stored in portable bulk containers.
(f) *Specifications for locks.* Locks meeting the specifications in this section or other locks that have been approved for use by the appropriate TTB officer are approved locks for the purpose of [26 U.S.C. 5682](https://www.govinfo.gov/link/uscode/26/5682).
(1) *General.* The following are the specifications for approved locks:
(i) A corresponding serial number on the lock and on the key, except for master key locking systems;
(ii) A case hardened shackle at least one-fourth inch in diameter, with heel and toe locking;
(iii) A body width of at least 2 inches;
(iv) A captured key feature (the key may not be removed while the shackle is unlocked);
(v) A tumbler with at least 5 pins; and
(vi) A lock and key containing no bitting data.
(2) *Other approved locks.* If the proprietor wishes to use locks of an unusual design, which do not meet the specifications in [paragraph (f)(1)](/current/title-27/section-19.192#p-19.192\(f\)\(1\)) of this section, the proprietor must submit an example or prototype of the lock to the appropriate TTB officer, with a request that the lock be approved for use. The appropriate TTB officer will evaluate the lock and determine whether the lock should be approved for use.
(3) *Master key systems.* Master key locking systems using approved locks may be used at the option of the proprietor.
(g) *Additional security.* Whenever the appropriate TTB officer finds that construction, arrangement, equipment, or protection is inadequate, additional security (such as fences, flood lights, alarm systems, and guard services) must be provided or changes in construction, arrangement, or equipment must be made to the extent necessary to protect the revenue.
([26 U.S.C. 5178](https://www.govinfo.gov/link/uscode/26/5178), [5202](https://www.govinfo.gov/link/uscode/26/5202))
#### § 19.193 Breaking Government locks.
TTB may assign TTB officers to a distilled spirits plant and utilize controls, such as Government locks, if TTB determines that such measures are necessary to effectively supervise operations at the plant. The proprietor may not remove such Government locks without the authorization of the appropriate TTB officer, except when a person or property is in imminent danger from a disaster or other emergency. If the proprietor must remove Government locks under such circumstances, the proprietor must ensure that security measures are taken to prevent illegal removal of spirits. In addition, the proprietor must notify the appropriate TTB officer as soon as possible of the action taken and within 5 days of removing the locks submit a written report describing the emergency and the action taken.
([26 U.S.C. 5202](https://www.govinfo.gov/link/uscode/26/5202))
## Subpart H—Dealer Registration and Recordkeeping
#### § 19.201 Definitions.
For purposes of this subpart, the following terms have the meanings indicated:
*Dealer.* A person that sells, or offers for sale, any alcohol product (distilled spirits, wines, and/or beer) fit for beverage use.
*Retail dealer in liquors.* A dealer that sells, or offers for sale, distilled spirits, wines, or beer to any person other than a dealer.
*Wholesale dealer in liquors.* A dealer that sells, or offers for sale, distilled spirits, wines, or beer to another dealer.
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121), [5122](https://www.govinfo.gov/link/uscode/26/5122))
#### § 19.202 Dealer registration.
Every proprietor that sells or offers for sale any alcoholic product (distilled spirits, wines, or beer) fit for beverage use must register as a dealer under [part 31 of this chapter](/current/title-27/part-31). However, the proprietor's application for registration of a distilled spirits plant filed under [subpart D of this part](/current/title-27/part-19/subpart-D), and approval of that application by the appropriate TTB officer, will constitute the proprietor's registration as a dealer at the distilled spirits plant. Every proprietor registered as a dealer under this subpart will be classified as a wholesale dealer in liquors (see [§ 31.32 of this chapter](/current/title-27/section-31.32)) and as such may also operate as a retail dealer in liquors without additional registration. Registration covers all sales from the same location, including sales of wine, beer, or other proprietors' spirits. A proprietor who conducts business as a dealer at a location other than the distilled spirits plant must register and keep records in accordance with [part 31 of this chapter](/current/title-27/part-31).
([26 U.S.C. 5124](https://www.govinfo.gov/link/uscode/26/5124))
#### § 19.203 Amending the dealer registration.
Every proprietor registered as a dealer under this subpart must maintain a current and accurate distilled spirits plant registration. Whenever there is a change to any of the information provided in the proprietor's approved notice of registration, the proprietor must amend the registration within the time period specified in [subpart E of this part](/current/title-27/part-19/subpart-E). An amendment of the proprietor's distilled spirits plant registration will also serve as an amendment of the proprietor's dealer registration under this subpart. The proprietor's dealer registration will also terminate when distilled spirits plant operations under the notice of registration terminate.
([26 U.S.C. 5124](https://www.govinfo.gov/link/uscode/26/5124))
#### § 19.204 Dealer records.
Every dealer is required to maintain records of transactions. Distilled spirits transactions that appear in the records required by [subpart V of this part](/current/title-27/part-19/subpart-V) will meet the proprietor's recordkeeping requirements as a dealer. For other transactions not covered in the distilled spirits plant records, such as retail sales of wine or beer in a restaurant at the distilled spirits plant, or operations as a wholesale dealer in wine or beer, the proprietor must keep the records specified for dealers in [part 31 of this chapter](/current/title-27/part-31).
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121), [5122](https://www.govinfo.gov/link/uscode/26/5122), [5124](https://www.govinfo.gov/link/uscode/26/5124))
## Subpart I—Distilled Spirits Taxes
#### § 19.221 Scope.
This subpart covers the taxation of distilled spirits and the procedures for payment of taxes by proprietors of distilled spirits plants. Issues covered in this subpart include tax rates, liability for tax, tax determination, return periods, filing of tax returns, forms of payment, electronic fund transfers, and credits under [26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010).
([26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001))
### Basic Provisions of Tax Law Affecting Spirits
#### § 19.222 Basic tax law provisions.
(a) *Distilled spirits tax.* [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001) and [7652](https://www.govinfo.gov/link/uscode/26/7652) impose a tax on all distilled spirits produced in, or imported into or brought into, the United States at the rate prescribed in section 5001 on each proof gallon and a proportionate tax at a like rate on all fractional parts of a proof gallon. For the current rate of tax see [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001).
(b) *Products containing distilled spirits.* All products of distillation, by whatever name known, which contain distilled spirits, on which the tax imposed by law has not been paid, and any alcoholic ingredient added to such products, are considered and taxed as distilled spirits.
(c) *Wines with high alcohol content.* Wines containing more than 24 percent of alcohol by volume are taxed as distilled spirits.
(d) *Attachment of the tax.* Under [26 U.S.C. 5001(b)](https://www.govinfo.gov/link/uscode/26/5001), the tax attaches to distilled spirits as soon as the substance comes into existence as such, whether it be subsequently separated as pure or impure spirits, or be immediately, or at any subsequent time, transferred into any other substance, either in the process of original production, or by any subsequent process.
(e) *Alcohol tax is a lien on spirits.* Under [26 U.S.C. 5004](https://www.govinfo.gov/link/uscode/26/5004), the tax becomes a first lien on the distilled spirits from the time the spirits come into existence as such. The conditions under which the first lien terminates are described in [26 U.S.C. 5004](https://www.govinfo.gov/link/uscode/26/5004).
(f) *Tax credit for eligible wines and eligible flavors.* Under [26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010), a credit against the tax imposed on distilled spirits by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001) or [7652](https://www.govinfo.gov/link/uscode/26/7652) on each proof gallon of alcohol derived from eligible wine, or from eligible flavors which do not exceed 2.5 percent of the finished product on a proof gallon basis is allowed at the time the tax is payable as if it constituted a reduction in the rate of tax.
(g) *Effective tax rates.* Where credit against the tax is desired, the proprietor liable for the tax must establish an effective tax rate in accordance with [§ 19.246](/current/title-27/section-19.246). The effective tax rate established will be applied to each withdrawal or other taxable disposition of the distilled spirits.
([26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5004](https://www.govinfo.gov/link/uscode/26/5004), [5010](https://www.govinfo.gov/link/uscode/26/5010), [7652](https://www.govinfo.gov/link/uscode/26/7652))
#### § 19.223 Persons liable for tax.
(a) *Distilling.* Under [26 U.S.C. 5005](https://www.govinfo.gov/link/uscode/26/5005), the distiller of spirits is liable for the tax and each proprietor or possessor of, and person in any manner interested in the use of, any still, distilling apparatus, or distillery, shall be jointly and severally liable for the tax on distilled spirits produced. However, a person, not an officer or director of a corporate proprietor, owning or having the right of control of not more than 10 percent of any class of stock of that proprietor, is not liable by reason of the stock ownership or control. Persons transferring spirits in bond are relieved of tax liability if:
(1) The proprietors of transferring and receiving distilled spirits plant premises are independent of each other and neither has a proprietary interest, directly or indirectly, in the business of the other, and
(2) No person liable for the tax on transferred spirits retains any interest in the spirits.
(b) *Storage on bonded premises.* Under [26 U.S.C. 5005(c)](https://www.govinfo.gov/link/uscode/26/5005) each person operating bonded premises will be liable for the tax on all spirits while the spirits are stored on the premises, and on all spirits that are in transit to the premises from the time of removal from the transferor's bonded premises, pursuant to an approved application. Liability for the tax continues until the spirits are transferred or withdrawn from bonded premises as authorized by law, or until the liability for tax is relieved under the provisions of [26 U.S.C. 5008(a)](https://www.govinfo.gov/link/uscode/26/5008). Claims for relief from liability for spirits lost are covered in [subpart J of this part](/current/title-27/part-19/subpart-J). Voluntary destruction of spirits in bond is covered in [subpart Q of this part](/current/title-27/part-19/subpart-Q).
(c) *Withdrawals without payment of tax.* Under [26 U.S.C. 5005(e)](https://www.govinfo.gov/link/uscode/26/5005), any person who withdraws spirits from the bonded premises of a plant without payment of tax, as provided in [26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214), will be liable for the tax on the spirits from the time of withdrawal. The person will be relieved of any liability at the time the spirits are exported, deposited in a foreign trade zone, used in production of wine, deposited in a customs bonded warehouse, laden as supplies upon or used in the maintenance or repair of certain vessels or aircraft, or used for certain research, development or testing, as provided by law.
(d) *Withdrawals free of tax.* Persons liable for tax under [paragraph (a)](/current/title-27/section-19.223#p-19.223\(a\)) of this section, are relieved of the liability on spirits withdrawn from bonded premises free of tax under this part, at the time the spirits are withdrawn.
(e) *Withdrawn from customs custody without payment of tax.* Under [26 U.S.C. 5232(a)](https://www.govinfo.gov/link/uscode/26/5232) when imported distilled spirits in bulk containers are withdrawn from customs custody and transferred to the bonded premises of a distilled spirits plant without payment of the tax imposed on imported distilled spirits by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), the person operating the bonded premises of the distilled spirits plant to which spirits are transferred will become liable for the tax on the spirits upon their release from customs custody, and the importer will thereupon be relieved of liability for the tax.
([26 U.S.C. 5005](https://www.govinfo.gov/link/uscode/26/5005), [5066](https://www.govinfo.gov/link/uscode/26/5066), [5232](https://www.govinfo.gov/link/uscode/26/5232))
### Requirements for Gauging and Tax Determination
#### § 19.225 Requirement to gauge and tax determine spirits.
Before withdrawing distilled spirits from bond, the proprietor must gauge the spirits and determine the tax that is due on the spirits. This requirement applies to all spirits on which the tax will be either prepaid or deferred.
([26 U.S.C. 5006](https://www.govinfo.gov/link/uscode/26/5006), [5204](https://www.govinfo.gov/link/uscode/26/5204), [5213](https://www.govinfo.gov/link/uscode/26/5213))
#### § 19.226 Gauges for tax determination.
There are several acceptable methods that a proprietor may use when gauging spirits for tax determination.
(a) *Cases.* If spirits are withdrawn from the bonded premises in cases, the proprietor must gauge the spirits based on the contents of the cases. The proprietor will determine the number of proof gallons of spirits in cases as provided in [part 30 of this chapter](/current/title-27/part-30). The proprietor must convert metric units of measure to U.S. units according to [§ 19.579](/current/title-27/section-19.579).
(b) *Packages.* If spirits are withdrawn from the bonded premises in packages on the basis of an individual package gauge, each package must be gauged unless the tax is to be determined on the production or filling gauge. When gauging the packages, the proprietor must prepare a package gauge record as specified in [§ 19.619](/current/title-27/section-19.619) and attach it to the record of tax determination that is required by [§ 19.611](/current/title-27/section-19.611).
(c) *Tanks.* The proprietor must use weight, or an accurate mass flow meter and proof as prescribed in [§§ 19.284](/current/title-27/section-19.284) and [19.285](/current/title-27/section-19.285), to gauge bulk spirits in tanks that are to be withdrawn on determination of tax. The proprietor must record the elements of the gauge on the record of tax determination. As an alternative, the proprietor may record gauge elements on a separate gauge record, and attach the gauge record to the record of tax determination.
([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204), [5213](https://www.govinfo.gov/link/uscode/26/5213))
#### § 19.227 Determination of the tax.
After gauging, the proprietor must determine the tax on the spirits to be removed from the bonded premises. The proprietor must use the tax rate prescribed in [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001) to calculate the tax, unless the product is eligible for a reduced effective tax rate as provided in [26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010). If the product is eligible for a reduced effective tax rate, the proprietor may use that rate to determine the tax. The proprietor must record the results of each tax determination in a record of tax determination as required by [§ 19.611](/current/title-27/section-19.611).
([26 U.S.C. 5213](https://www.govinfo.gov/link/uscode/26/5213))
### Rules for Deferred Payment and Prepayment of Taxes
#### § 19.229 Deferred payment and prepayment of taxes.
There are two basic methods of paying the tax on distilled spirits withdrawn from bonded premises: Deferred payment and prepayment.
(a) *Deferred payment.* Under the deferred payment system, the proprietor may withdraw spirits from bond after tax determination but before payment of tax. The excise tax paid is based on the amount of spirits removed from bond during each return period. In order to pay taxes under the deferral system, the proprietor must file a withdrawal bond or unit bond unless the proprietor is exempt from furnishing such bond under [§ 19.151(d)](/current/title-27/section-19.151#p-19.151\(d\)). For detailed information regarding return periods and filing requirements under the deferred system, see [§§ 19.234](/current/title-27/section-19.234), [19.235](/current/title-27/section-19.235) and [19.236](/current/title-27/section-19.236).
(b) *Prepayment.* Under the prepayment system, the proprietor must pay the distilled spirits tax after tax determination but before withdrawal of the spirits from bonded premises. See [§ 19.230](/current/title-27/section-19.230) for conditions that require prepayment of taxes.
([26 U.S.C. 5061](https://www.govinfo.gov/link/uscode/26/5061))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1121](https://www.federalregister.gov/citation/82-FR-1121), Jan. 4, 2017]
#### § 19.230 Conditions requiring prepayment of taxes.
Under certain conditions, the proprietor must prepay the distilled spirits tax required, using TTB F 5000.24, Excise Tax Return, before removing spirits from the bonded premises. Those conditions are:
(a) When the proprietor has not given TTB a withdrawal bond or a unit bond and the proprietor is not exempt from furnishing such bond under [§ 19.151(d)](/current/title-27/section-19.151#p-19.151\(d\));
(b) When the proprietor has posted a withdrawal or a unit bond, but has defaulted on any payment of tax under this section, and the tax payment remains in default. The proprietor must continue to prepay the tax until the appropriate TTB officer decides that allowing the proprietor to make deferred tax payments again will not jeopardize the revenue;
(c) When the proprietor receives a notice from the appropriate TTB officer that the tax must be prepaid. Such notice may be issued to the proprietor if—
(1) The proprietor fails to maintain records required by this part to substantiate the correctness of its tax returns; or
(2) The proprietor fails to comply with any other provision of this part; or
(d) When the proprietor's withdrawal bond, or the withdrawal coverage under its unit bond, is for less than the maximum penal sum. This condition does not apply to a proprietor who is exempt from furnishing a bond under [§ 19.151(d)](/current/title-27/section-19.151#p-19.151\(d\)). The proprietor must prepay the tax to the extent that a withdrawal would cause the outstanding tax liability to exceed the limits of coverage under the bond. See also [§ 19.231](/current/title-27/section-19.231) if the bond is for less than the maximum penal sum.
([26 U.S.C. 5213](https://www.govinfo.gov/link/uscode/26/5213), [5555](https://www.govinfo.gov/link/uscode/26/5555))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1122](https://www.federalregister.gov/citation/82-FR-1122), Jan. 4, 2017]
#### § 19.231 Accounting for bond coverage.
In cases where a proprietor must furnish a withdrawal bond or a unit bond to cover the tax on spirits withdrawn on determination of tax, and such bond is in less than the maximum penal sum, the proprietor must maintain an account for the bond to ensure that outstanding tax liabilities do not exceed the penal sum of the bond. The account must charge the bond for the amount of liability incurred on each withdrawal on determination of tax and, credit the bond for each payment of tax made with a return and for authorized credits taken on a return. If the balance of the bond account reaches zero, the proprietor may no longer defer tax payments for taxable withdrawals. Where the bond is for less than the maximum penal sum and has been allocated among two or more plants, the proprietor must maintain an account at each plant for that part of the penal sum allocated to each plant.
([26 U.S.C. 5173](https://www.govinfo.gov/link/uscode/26/5173))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1122](https://www.federalregister.gov/citation/82-FR-1122), Jan. 4, 2017]
### Requirements for Filing Tax Returns
#### § 19.233 Filing prepayment returns.
When the proprietor is required to prepay the tax prior to withdrawal of spirits from the bonded premises, the proprietor must prepay the tax with a return on form TTB F 5000.24, Excise Tax Return, and include the remittance with the return. The proprietor may prepay tax for one or more withdrawals with a single prepayment return on TTB F 5000.24. The proprietor will note the serial number of the TTB F 5000.24, and the date and time of the prepayment on the individual record of tax determination. The proprietor may not remove spirits from the bonded premises until the tax has been paid.
([26 U.S.C. 5061](https://www.govinfo.gov/link/uscode/26/5061))
#### § 19.234 Filing deferred payment returns.
A proprietor must pay the tax on spirits withdrawn from bond for deferred payment of tax by filing a return on form TTB F 5000.24, Excise Tax Return. The proprietor must execute and file TTB F 5000.24 for each return period, even when no tax is due for a particular return period. The proprietor of each bonded premises must pay the full amount of distilled spirits tax determined for all spirits released for withdrawal from the bonded premises on determination of tax during the period covered by the return (except spirits on which tax has been prepaid).
([26 U.S.C. 5061](https://www.govinfo.gov/link/uscode/26/5061))
#### § 19.235 Deferred payment return periods—annual, quarterly, and semimonthly.
(a) *Three types of return periods.* The IRC provides for three different return periods for those taxpayers who pay their taxes on a deferred basis: Annual, quarterly, and semimonthly. Taxpayers who meet certain criteria are eligible to use annual or quarterly return periods and pay their taxes on an annual or quarterly basis as provided in [paragraphs (b)](/current/title-27/section-19.235#p-19.235\(b\)) and [(c)](/current/title-27/section-19.235#p-19.235\(c\)) of this section, respectively. Other taxpayers must use semimonthly return periods and pay their taxes on a semimonthly basis as provided in [paragraph (e)](/current/title-27/section-19.235#p-19.235\(e\)) of this section.
(b) *Annual return period.* Subject to [paragraph (d)](/current/title-27/section-19.235#p-19.235\(d\)) of this section, a taxpayer who reasonably expects to be liable for not more than $1,000 in taxes with respect to distilled spirits imposed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001) and [7652](https://www.govinfo.gov/link/uscode/26/7652) for the current calendar year, and that was liable for not more than $1,000 in such taxes in the preceding calendar year, may choose to use an annual return period. However, the taxpayer may not use the annual return period procedure for any portion of the calendar year following the first date on which the aggregate amount of tax due from the taxpayer during the calendar year exceeds \$1,000, and any tax which has not been paid on that date will be due on the 14th day after the last day of the quarterly or semimonthly period in which that date occurs. A taxpayer may choose to use either quarterly or semimonthly return periods as authorized under [paragraph (c)](/current/title-27/section-19.235#p-19.235\(c\)) or [(e)](/current/title-27/section-19.235#p-19.235\(e\)) of this section.
(c) *Quarterly return period.* Except as provided in [paragraph (b)](/current/title-27/section-19.235#p-19.235\(b\)) of this section and subject to [paragraph (d)](/current/title-27/section-19.235#p-19.235\(d\)) of this section, a taxpayer who reasonably expects to be liable for not more than $50,000 in taxes with respect to distilled spirits imposed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001) and [7652](https://www.govinfo.gov/link/uscode/26/7652) for the current calendar year, and that was liable for not more than $50,000 in such taxes in the preceding calendar year, may choose to use a quarterly return period. However, the taxpayer may not use the quarterly return period procedure for any portion of the calendar year following the first date on which the aggregate amount of tax due from the taxpayer during the calendar year exceeds \$50,000, and any tax which has not been paid on that date will be due on the 14th day after the last day of the semimonthly period in which that date occurs.
(d) *Additional rules for annual and quarterly return periods.* The following additional rules apply to the annual and quarterly return period procedures under [paragraphs (b)](/current/title-27/section-19.235#p-19.235\(b\)) and [(c)](/current/title-27/section-19.235#p-19.235\(c\)) of this section:
(1) A taxpayer with multiple locations must combine the distilled spirits tax liability for all locations to determine eligibility for the return procedures;
(2) A taxpayer who has both domestic operations and import transactions must combine the distilled spirits tax liability on the domestic operations and the imports to determine eligibility for the return procedures;
(3) The controlled group rules of [26 U.S.C. 5061(e)](https://www.govinfo.gov/link/uscode/26/5061), which concern treatment of controlled groups as one taxpayer, do not apply for purposes of determining eligibility for the return procedures. However, a taxpayer who is eligible for the return procedures, and that is a member of a controlled group that owes \$5 million or more in distilled spirits excise taxes per year, is required to pay taxes by electronic fund transfer (EFT). Quarterly payments via EFT must be transmitted in accordance with section 5061(e);
(4) A new taxpayer is eligible to use the return procedures the first year of business simply if the taxpayer reasonably expects to be liable for not more than $1,000, in the case of the annual return procedure, or $50,000, in the case of the quarterly return procedure, in distilled spirits taxes during that calendar year; and
(5) If a taxpayer becomes ineligible to use a return procedure described in [paragraph (b)](/current/title-27/section-19.235#p-19.235\(b\)) or [(c)](/current/title-27/section-19.235#p-19.235\(c\)) of this section because the taxpayer's liability exceeds $1,000 or $50,000, respectively, during a taxable year, that taxpayer may resume using that return procedure only after a full calendar year has passed during which the taxpayer's liability did not exceed $1,000 or $50,000 as the case may be. A taxpayer may not use an annual or quarterly return procedure during any calendar year in which the taxpayer reasonably expects to be liable for more than $1,000, in the case of the annual return procedure, or $50,000, in the case of the quarterly return procedure, in distilled spirits taxes.
(e) *Semimonthly return period.* Except in the case of a taxpayer who qualifies for, and chooses to use, annual or quarterly return periods as provided in [paragraphs (b)](/current/title-27/section-19.235#p-19.235\(b\)) or [(c)](/current/title-27/section-19.235#p-19.235\(c\)) of this section, all other taxpayers must use semimonthly return periods for deferred payment of tax. The semimonthly return periods will run from the 1st day through the 15th day of each month, and from the 16th day through the last day of each month, except as otherwise provided in [§ 19.237](/current/title-27/section-19.237).
(f) *Definitions.* For purposes of this section, the following terms have the meanings indicated:
*Reasonably expects.* When used with reference to a taxpayer, *reasonably expects* means that there is no existing or anticipated circumstances known to the taxpayer (such as an increase in production capacity) that would cause the taxpayer's tax liability to exceed the prescribed limit.
*Taxpayer.* A *taxpayer* is an individual, corporation, partnership, or other entity that is assigned a single Employer Identification Number (EIN) as defined in [26 CFR 301.7701-12](/current/title-26/section-301.7701-12).
([26 U.S.C. 5061](https://www.govinfo.gov/link/uscode/26/5061))
\[T.D. TTB-146, [82 FR 1122](https://www.federalregister.gov/citation/82-FR-1122), Jan. 4, 2017, as amended by T.D TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
#### § 19.236 Due dates for returns.
(a) *Semimonthly returns.* Except when payment is pursuant to an annual or quarterly return as provided in [paragraph (b)](/current/title-27/section-19.236#p-19.236\(b\)) or [(c)](/current/title-27/section-19.236#p-19.236\(c\)) of this section, where the proprietor of bonded premises has withdrawn spirits from such premises on determination and before payment of tax, the proprietor must file a semimonthly tax return covering such spirits on form TTB F 5000.24, Excise Tax Return, and remittance, as required by [§ 19.238](/current/title-27/section-19.238), [§ 19.239](/current/title-27/section-19.239) or [§ 19.240](/current/title-27/section-19.240), not later than the 14th day after the last day of the return period, except for returns filed for September as provided in [§ 19.237](/current/title-27/section-19.237). If the due date falls on a Saturday, Sunday, or legal holiday, the return and payment are due on the immediately preceding day that is not a Saturday, Sunday, or legal holiday, except as provided in [§ 19.237(c)](/current/title-27/section-19.237#p-19.237\(c\)).
(b) *Quarterly returns.* Where the proprietor of bonded premises has withdrawn spirits from such premises on determination and before payment of tax, and the proprietor uses quarterly return periods as provided in [§ 19.235(c)](/current/title-27/section-19.235#p-19.235\(c\)), the proprietor must file a quarterly return covering such spirits on TTB F 5000.24, and remittance, as required by [§ 19.238](/current/title-27/section-19.238), [§ 19.239](/current/title-27/section-19.239), or [§ 19.240](/current/title-27/section-19.240), not later than the 14th day after the last day of the quarterly return period. If the due date falls on a Saturday, Sunday, or legal holiday, the return and remittance will be due on the immediately preceding day which is not a Saturday, Sunday, or legal holiday.
(c) *Annual returns.* Where the proprietor of bonded premises has withdrawn spirits from such premises on determination and before payment of tax, and the proprietor uses annual return periods as provided in [§ 19.235(b)](/current/title-27/section-19.235#p-19.235\(b\)), the proprietor must file an annual return covering such spirits on TTB F 5000.24, and remittance, as required by [§ 19.238](/current/title-27/section-19.238), [§ 19.239](/current/title-27/section-19.239), or [§ 19.240](/current/title-27/section-19.240), not later than the 14th day after the last day of the annual return period. If the due date falls on a Saturday, Sunday, or legal holiday, the return and remittance will be due on the immediately preceding day which is not a Saturday, Sunday, or legal holiday.
([26 U.S.C. 5061](https://www.govinfo.gov/link/uscode/26/5061))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1122](https://www.federalregister.gov/citation/82-FR-1122), Jan. 4, 2017]
#### § 19.237 Special rule for semimonthly filers for the month of September.
(a) *Returns required for September.* If the proprietor is required to file semimonthly returns as provided in [§ 19.235(c)](/current/title-27/section-19.235#p-19.235\(c\)), there are three return periods during the month of September. The first semimonthly return period is from the 1st day through the 15th day of the month and the return with remittance is due by the 29th of September. The second semimonthly return period for the month of September is divided into two payment periods. The exact dates of these periods depend upon whether the proprietor remits tax payments by EFT.
(1) *Taxpayments by EFT.* If the proprietor remits tax payments by EFT, the two payment periods for the second half of September are from the 16th through the 26th, and from the 27th through the 30th. The return on form TTB F 5000.24 and remittance for the period September 16-26 is due on or before September 29. The return on TTB F 5000.24 and remittance for the period September 27-30 is due no later than October 14.
(2) *Taxpayment other than by EFT.* If the proprietor is not required to pay the distilled spirits tax by EFT, the two payment periods for the second half of September are from the 16th through the 25th and from the 26th through the 30th. The return on TTB F 5000.24 and remittance for the period September 16-25 is due on or before September 28. The return on TTB F5000.24 and remittance for the period September 26-30 is due no later than October 14.
(b) *Amount of payment: Safe harbor rule.* —
(1) *EFT Taxpayers.* The proprietor satisfies the requirements of [paragraph (a)(1)](/current/title-27/section-19.237#p-19.237\(a\)\(1\)) of this section if by September 29 the amount paid is at least eleven-fifteenths (73.3 percent) of the tax liability incurred in the semimonthly return period for September 1-15, and the proprietor also pays any underpayment of tax resulting from the use of the safe harbor rule on or before October 14.
(2) *Other than EFT taxpayers.* The proprietor satisfies the requirements of [paragraph (a)(2)](/current/title-27/section-19.237#p-19.237\(a\)\(2\)) of this section if the amount paid by September 28 is at least two-thirds (66.7 percent) of the tax liability incurred in the semimonthly return period for September 1-15, and the proprietor also pays any underpayment of tax resulting from the use of the safe harbor rule on or before October 14.
(c) *Weekends and holidays.* If the required tax payment due date for the return period September 16-25 (non-EFT taxpayers) or September 16-26 (EFT taxpayers), falls on a Saturday or legal holiday, the proprietor's return and remittance are due on the immediately preceding day. If the required tax payment due date falls on a Sunday, the proprietor's return and payment are due on the immediately following day.
(d)
# Example.
Payment of tax for the month of September:
(1) *Facts.* X, a proprietor required to pay taxes by electronic fund transfer, incurred tax liability in the amount of $30,000 for the first semimonthly period of September. For the period September 16-26, X incurred tax liability in the amount of $45,000, and for the period September 27-30, X incurred tax liability in the amount of \$2,000.
(2) *Payment requirement.* X's payment of tax in the amount of $30,000 for the first semimonthly period of September is due no later than September 29. X's payment of tax for the period September 16-26 is also due no later than September 29. X may use the safe harbor rule to determine the amount of payment due for the period of September 16-26. Under the safe harbor rule, X's payment of tax must equal $22,000.00, eleven-fifteenths of the tax liability incurred during the first semimonthly period of September. Additionally, X's payment of tax in the amount of $2,000 for the period September 27-30 must be paid no later than October 14. X must also pay the underpayment of tax, $23,000.00, for the period September 16-26, no later than October 14.
([26 U.S.C. 5061](https://www.govinfo.gov/link/uscode/26/5061))
#### § 19.238 Payment by mail or courier.
(a) *Payment by mail.* The proprietor must file each return on form TTBF 5000.24 in accordance with the instructions printed on the form. If the proprietor submits the return by U.S. mail, the official postmark of the U.S. Postal Service stamped on the cover in which the return is mailed will be considered to be the date of delivery of the return and also the remittance, if included. If the postmark on the cover is illegible, the proprietor will bear the burden of proving when the postmark was made. If the proprietor sends the return with or without remittance by registered mail or certified mail, the date of registry, or the date of the postmark on the sender's postal receipt for certified mail, will be treated as the date of delivery of the return and also of the remittance, if included.
(b) *Payment by courier or other private delivery service.* A proprietor may send a return, with or without remittance, by courier or other private delivery service. If the proprietor sends the return with or without remittance with a courier or private delivery service that is available to the general public and that is at least as timely and reliable as the U.S. mail, and the delivery service has tracking and tracing procedures for its deliveries, TTB will consider the date of tender to the delivery service as recorded in the tracking and tracing record for the parcel as the date of delivery. If the proprietor sends the return, with or without remittance, by courier or other private delivery service that does not meet the above requirements, the actual date of delivery to TTB will be treated as the date of delivery of the return and also of the remittance, if included.
([26 U.S.C. 6302](https://www.govinfo.gov/link/uscode/26/6302))
#### § 19.239 Form of payment.
(a) *General.* The proprietor must pay the tax due on spirits when filing a return on form TTB F 5000.24, Excise Tax Return. The remittance for the tax must accompany the return and may be in any form that is authorized by [§ 70.61 of this chapter](/current/title-27/section-70.61) and acceptable to the appropriate TTB officer. Exception: This does not apply to payments that must be made by EFT. For EFT payments see [§ 19.240](/current/title-27/section-19.240).
(b) *Consequences of default.* If a check or money order tendered in payment of taxes is not paid on presentment, or if the taxpayer is otherwise in default in payment, then any remittance made during the period of default must be either in cash or by an acceptable certified instrument. The proprietor must continue to pay in cash or by certified instrument as long as the proprietor remains in default, and until the appropriate TTB officer finds that accepting a check will not jeopardize the revenue.
(c) *Certified instruments.* Acceptable certified instruments include certified checks, cashier's checks or treasurer's checks drawn on any bank or trust company incorporated under the laws of the United States, or under the laws of any State, Territory or possession of the United States, or a money order, as provided in [§ 70.61 of this chapter](/current/title-27/section-70.61).
(d) *Payment of taxes.* The proprietor must make checks or money orders payable to “Alcohol and Tobacco Tax and Trade Bureau”.
([26 U.S.C. 5061](https://www.govinfo.gov/link/uscode/26/5061), [6311](https://www.govinfo.gov/link/uscode/26/6311))
#### § 19.240 Payment of tax by electronic fund transfer.
(a) *General.* —
(1) *Criteria requiring EFT payment.* Under certain conditions, a proprietor may not make payments by cash, check, or money order. Instead, the proprietor must use the services of a commercial bank to pay tax on distilled spirits tax by EFT. Payments must be made by EFT in the current calendar year if the proprietor, as a taxpayer, was liable for \$5 million or more in taxes on distilled spirits during the prior calendar year. For the purpose of determining whether the proprietor is subject to this requirement, the proprietor must use the total amount of tax liability on distilled spirits incurred under this [part and parts 26](/current/title-27/part-26) and [27 of this chapter](/current/title-27/part-27) (gross tax liability). Gross tax liability includes the distilled spirits tax on all taxable withdrawals of spirits and taxable importations of spirits, as well as tax on spirits brought into the United States from Puerto Rico and the Virgin Islands during the calendar year. This figure includes taxes incurred at any and all premises at which the proprietor conducts regulated activities. The proprietor may not net out or adjust for any drawback, credits or refunds of tax that are allowed. Overpayments made in excess of actual tax liability will not be included in the gross tax liability figure.
(2) *Controlled group.* If the taxpayer is a member of a controlled group, the controlled group is treated as a single taxpayer when calculating liability of \$5 million or more in distilled spirits taxes during the prior calendar year. A controlled group is a related group of taxpayers and is defined in [subpart D of part 70 of this chapter](/current/title-27/part-70/subpart-D).
(3) *Separate return and payment for each DSP.* When the proprietor makes payments by EFT, the proprietor must file a separate return on form TTB F 5000.24 and make a separate EFT payment for each DSP from which spirits are withdrawn upon determination of tax.
(b) *Requirements* —
(1) *Notice to TTB.* If the proprietor's gross distilled spirits tax liability is \$5 million or more in one calendar year, the proprietor must notify the appropriate TTB officer of this fact not later than January 10 of the following year. The proprietor must use the total amount of tax liability incurred under this [part and parts 26](/current/title-27/part-26) and [27 of this chapter](/current/title-27/part-27) to determine whether it must make this notification. Exception: this notice requirement does not apply if the proprietor already pays tax on distilled spirits by EFT. The notice shall be an agreement to make payments by EFT.
(2) *Separate EFT for each return.* For each return filed in accordance with this part, the proprietor will direct the bank to make an EFT to the Treasury Account for the amount of the tax reported due on the return. The proprietor must give instructions to the bank early enough for the EFT to be made to the Treasury Account by no later than close of business on the last day for filing the return as prescribed in [§§ 19.236](/current/title-27/section-19.236) or [19.237](/current/title-27/section-19.237), as appropriate.
(3) *Discontinuing EFT payments.* If the proprietor pays tax by EFT and has a gross tax liability of less than $5 million in distilled spirits taxes during a calendar year, combining tax liabilities incurred under this [part and parts 26](/current/title-27/part-26) and [27 of this chapter](/current/title-27/part-27), payment by EFT will be optional in the following year. The proprietor may continue to remit tax payment by EFT as provided in this section, or the proprietor may remit taxpayment using any acceptable method as set forth in [§ 19.239](/current/title-27/section-19.239). If the proprietor decides to stop paying tax by EFT, the proprietor must give the appropriate TTB officer written notice of that decision. The proprietor must attach a written notice to the first return on form TTB F 5000.24 filed using a method of payment other than EFT. Such notice must state that tax is not due by EFT because the proprietor's tax liability during the preceding calendar year was less than $5 million. The proprietor must further state that future tax payments will be filed with the returns on TTB F 5000.24.
(c) *Remittance* —
(1) *Identifying EFT payments.* When the proprietor completes the return on TTB F 5000.24, the proprietor must indicate on the form that the tax was paid by EFT. The proprietor must file the completed TTB F 5000.24 with TTB as directed by the instructions on the form.
(2) *Credit for payment.* TTB will credit the proprietor as having made a tax payment when the Treasury Account receives the EFT. TTB considers the EFT to be received by the Treasury Account when the EFT is paid to a Federal Reserve Bank.
(3) *Record of payment.* When a proprietor directs a bank to make an EFT as required by [paragraph (b)(2)](/current/title-27/section-19.240#p-19.240\(b\)\(2\)) of this section, any transfer data record furnished to the proprietor as part of normal banking procedures will serve as the record of payment. The proprietor will retain this document as part of the required records.
(d) *Failure to make a tax payment by EFT.* The proprietor will be subject to a penalty imposed by [26 U.S.C. 5684](https://www.govinfo.gov/link/uscode/26/5684), [6651](https://www.govinfo.gov/link/uscode/26/6651), or [6656](https://www.govinfo.gov/link/uscode/26/6656) for failure to make a required EFT tax payment before close of business on the last day for filing.
(e) *Procedure.* Upon receipt of a notice filed pursuant to [paragraph (b)(1)](/current/title-27/section-19.240#p-19.240\(b\)\(1\)) of this section, the appropriate TTB officer will provide the proprietor with a copy of the TTB Procedure entitled “Payment of Tax by Electronic Fund Transfer”. This publication outlines the procedure that the proprietor must follow when preparing returns and payments by EFT as required by this part. The proprietor must follow instructions provided by U.S. Customs and Border Protection (CBP) for submitting the EFT payments that must be made to CBP.
([26 U.S.C. 5061](https://www.govinfo.gov/link/uscode/26/5061), [6302](https://www.govinfo.gov/link/uscode/26/6302))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
### Requirements for Employer Identification Numbers
#### § 19.242 Employer identification number.
The proprietor must enter the employer identification number (EIN) assigned to it by the Internal Revenue Service on each form TTB F 5000.24, Excise Tax Return, filed with TTB. Failure to enter the assigned EIN on TTB F 5000.24, may result in a \$50.00 penalty for each occurrence as specified in [§ 70.113 of this chapter](/current/title-27/section-70.113).
([26 U.S.C. 6109](https://www.govinfo.gov/link/uscode/26/6109), [6723](https://www.govinfo.gov/link/uscode/26/6723))
#### § 19.243 Application for employer identification number.
(a) *Use Form SS-4.* The proprietor must obtain an employer identification number (EIN) by filing an application with the Internal Revenue Service (IRS) on Form SS-4. Form SS-4 is available from Internal Revenue Service Centers, from IRS District Directors, the IRS Web site at *[https://www.irs.gov](https://www.irs.gov),* or from TTB's National Revenue Center. The proprietor may file this form with IRS by mail, telephone, or fax by following the instructions on the form.
(b) *Time limit.* If the proprietor has not already received, or applied for, an EIN at the time that the first return on form TTB F 5000.24, Excise Tax Return, is filed, the proprietor must file such application for an EIN not later than seven days from the date of filing the TTB F 5000.24.
(c) *One EIN only.* Each proprietor must obtain and use only one EIN, regardless of the number of places of business for which the proprietor is required to file a tax return under this subpart.
([26 U.S.C. 6109](https://www.govinfo.gov/link/uscode/26/6109))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
### Effective Tax Rates
#### § 19.245 Tax credits under [26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010).
(a) *The distilled spirits tax.* Sections 5001 and 7652 of the IRC impose a tax on all distilled spirits produced in, or imported into, or brought into the United States at the rate prescribed in section 5001 of the IRC.
(b) *Tax credits.* Section 5010 of the IRC provides a credit for the wine and flavors content in distilled spirits products. These credits effectively reduce the rate of excise tax paid on distilled spirits products that contain eligible wines and eligible flavors. As a result, the alcohol derived from eligible wine is taxed at the rates specified for wine in [26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041), and the alcohol derived from eligible flavors is not taxed to the extent that it does not exceed 2.5 percent of the alcohol in the product. This results in an effective tax rate on the distilled spirits product that is lower than the rate prescribed in [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001).
(c) *Eligible wine and eligible flavor.* The credit for the wine and flavor content of a distilled spirits product is allowable only if the wine or flavor contained in the product is an “eligible wine” or an “eligible flavor”. To determine whether a wine or flavor is eligible, refer to the definitions in [§ 19.1](/current/title-27/section-19.1) and [26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010).
(d) *Application of effective tax rates.* [Section 19.246](/current/title-27/section-19.246) describes how the proprietor should compute the effective tax rate for each distilled spirits product containing eligible wine or eligible flavor. Sections 19.247 through 19.250 set forth several different methods that the proprietor may use in applying the effective tax rates to taxable removals of products from the proprietor's bonded premises.
([26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010))
#### § 19.246 Computing the effective tax rate for a product.
(a) *How to compute effective tax rates.* In order to determine the effective tax rate for a distilled spirits product containing eligible wine or eligible flavor, the proprietor must first determine the total excise taxes due on the product from all sources including distilled spirits, eligible wine, and alcohol from eligible flavors in excess of 2.5 percent of the total proof gallons in the product. Then, the proprietor must determine the total number of proof gallons of alcohol in the product regardless of the source. By dividing the total tax (numerator) by the total number of proof gallons (denominator) the proprietor will arrive at the effective tax rate for the product in dollars per proof gallon. The proprietor will compute the effective tax rate according to the following formula:
(1) *Numerator.* The numerator will be the sum of:
(i) The proof gallons of all distilled spirits used in the product (exclusive of distilled spirits derived from eligible flavors), multiplied by the tax rate prescribed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001);
(ii) The wine gallons of each eligible wine used in the product, multiplied by the tax rate prescribed by [26 U.S.C. 5041(b)(1)](https://www.govinfo.gov/link/uscode/26/5041), (2), or (3), that would be imposed on the wine but for its removal to bonded premises. Three different tax classes of wine are eligible for the tax credit. The proprietor will have to repeat this step for each different tax class of eligible wine used; and
(iii) The proof gallons of all distilled spirits derived from eligible flavors used in the product, multiplied by the tax rate prescribed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), but only to the extent that such distilled spirits exceed 2.5 percent of the denominator prescribed in [paragraph (a)(2)](/current/title-27/section-19.246#p-19.246\(a\)\(2\)) of this section.
(2) *Denominator.* The denominator will be the sum of:
(i) The proof gallons of all distilled spirits used in the product, including distilled spirits derived from eligible flavors; and
(ii) The wine gallons of each eligible wine used in the product, multiplied by twice the percentage of alcohol by volume of each, divided by 100.
(b) *Rounding numbers* —
(1) *Proof gallons.* When determining the effective tax rate, the proprietor must express quantities of distilled spirits, eligible wine, and eligible flavors to the nearest tenth of a proof gallon.
(2) *Tax rates.* The proprietor may round the effective tax rate to as many decimal places as the proprietor deems appropriate, provided that the rate is expressed no less exactly than the rate rounded to the nearest whole cent. The proprietor must be consistent and round the effective tax rates for all products to the same number of decimal places. When rounding, if the number to the right of the last decimal place to be kept is less than five, it will be dropped, if it is five or over, a unit will be added.
(c) *Example.* The following is an example of the use of the formula.
Batch Record
\| Distilled spirits | 2249.1 proof gallons. |
\| Eligible wine (14% alcohol by volume) | 2265.0 wine gallons. |
\| Eligible wine (19% alcohol by volume) | 1020.0 wine gallons. |
\| Eligible flavors | 100.9 proof gallons. |
[](https://img.federalregister.gov/ER16FE11.000/ER16FE11.000_original_size.png)
([26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010))
###### Footnotes - [19.246](/current/title-27/section-19.246)
\[[1](#19.246-footref-1)] Proof gallons by which distilled spirits derived from eligible flavors exceed 2.5% of the total proof gallons in the batch (100.9 − (2.5% × 3,371.8) = 16.6).
#### § 19.247 Use of effective (actual) tax rates.
(a) *Select method of applying tax rate.* The proprietor may choose to apply an effective tax rate to taxable removals of distilled spirits products in accordance with [§ 19.248](/current/title-27/section-19.248), [§ 19.249](/current/title-27/section-19.249), or [§ 19.250](/current/title-27/section-19.250). Any proprietor who does not elect one of these options must establish an effective tax rate for each batch of distilled spirits product on which a claim for tax credit for alcohol derived from eligible wine or eligible flavor will be made. The proprietor must compute the effective tax rates for these products in accordance with the instructions in [§ 19.246](/current/title-27/section-19.246).
(b) *Record tax rates used.* The proprietor must record the effective tax rate used on the dump or batch records for the products as required by [§ 19.598](/current/title-27/section-19.598). The proprietor must record the serial numbers of cases of product removed at each rate on the record of tax determination or other related record. The proprietor must keep these records available for inspection by TTB officers.
([26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010), [5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.248 Standard effective tax rate.
(a) *Establishing a standard effective tax rate for a product.* The proprietor may establish a permanent standard effective tax rate for any eligible distilled spirits product, rather than calculate a separate effective tax rate for each batch of product made. If the proprietor elects to use this option, the proprietor must determine the permanent standard effective tax rate based on the least quantity and the lowest alcohol content of eligible wine or eligible flavors used to manufacture the product. Thus, the permanent standard effective tax rate is the highest tax rate that would apply to the product because it is based on a batch with the least amount of alcohol from eligible wine and flavors that qualify for the credit under [26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010). By using this method the proprietor forgoes the possible use of a lower tax rate in exchange for the convenience of using a permanent standard effective tax rate that does not have to be recomputed for each batch of product made. The proprietor must keep a permanent record of the standard effective tax rates established for each product, in accordance with [§ 19.615](/current/title-27/section-19.615).
(b) *Batches subject to a higher tax rate.* Whenever the proprietor manufactures a batch of the product with a lesser quantity or lower alcohol content of eligible wine or eligible flavor, this will result in a higher tax rate on the product since the product will have less alcohol qualifying for the credit under [26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010) and a higher percentage of alcohol taxable at the rate published in [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001). In such instances, the proprietor must keep the cased goods segregated from other completed cases of the same product subject to the permanent standard effective tax rate for that product. The proprietor must determine the tax rate for the nonstandard batch in accordance with [§ 19.247](/current/title-27/section-19.247).
(c) *TTB review of standard tax rates.* If the appropriate TTB officer finds that the use of this procedure jeopardizes the revenue, or causes administrative difficulty, the proprietor upon notification from TTB must discontinue use of this procedure.
([26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010), [5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.249 Average effective tax rate.
(a) *Establishing an average tax rate.* The proprietor may establish an average effective tax rate for any eligible distilled spirits product based on the total proof gallons in all batches of the same composition which have been produced during the preceding 6-month period and which have been or will be bottled or packaged, in whole or in part, for domestic consumption. At the beginning of each month, the proprietor must recompute the average effective tax rate so as to include only the immediately preceding 6-month period. The proprietor must show the average tax rate established for a product in the record of average effective tax rates as prescribed in [§ 19.613](/current/title-27/section-19.613).
(b) *TTB review of average effective tax rates.* If the appropriate TTB officer finds that the use of this procedure jeopardizes the revenue, or causes administrative difficulty, the proprietor upon notification from TTB must discontinue use of this procedure.
([26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010), [5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.250 Inventory reserve account.
(a) The proprietor may establish an inventory reserve account for any eligible distilled spirits product by maintaining an inventory reserve record as prescribed by [§ 19.614](/current/title-27/section-19.614). The effective tax rate applied to each removal or other disposition will be the effective tax rate recorded on the inventory reserve record from which the removal or other disposition is depleted. With an inventory reserve account, the proprietor will tax pay removals on a first-in first-out basis regardless of which lot of product is actually removed.
(b) If the appropriate TTB officer finds that the use of this procedure jeopardizes the revenue, or causes administrative difficulty, the proprietor upon notification from TTB must discontinue use of this procedure.
([26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010), [5207](https://www.govinfo.gov/link/uscode/26/5207))
### Assessment of Taxes by TTB
#### § 19.253 Assessment of tax on spirits not accounted for or reported.
The proprietor is required by law to properly account for and report all spirits that it produces. TTB will assess the proprietor for the tax on the difference between the quantity reported and the quantity actually produced.
([26 U.S.C. 5006](https://www.govinfo.gov/link/uscode/26/5006))
#### § 19.254 Assessment of tax for losses or unauthorized removals.
(a) *Lost or destroyed in bond.* TTB will assess the proprietor for the tax on spirits, denatured spirits, or wines in bond that are lost or destroyed if:
(1) The proprietor is liable for the tax on spirits, denatured spirits, or wines in bond, and the proprietor fails to file a claim for remission of the tax on spirits, denatured spirits, or wines that are lost or destroyed in bond as provided in [§ 19.263(a)](/current/title-27/section-19.263#p-19.263\(a\)), or
(2) The proprietor files a claim for such loss or destruction but the claim is denied. Exception: The provisions of this section do not apply to spirits, denatured spirits, or wines on which the tax is not collectible due to the provisions of [26 U.S.C. 5008(a)](https://www.govinfo.gov/link/uscode/26/5008) or [(d)](https://www.govinfo.gov/link/uscode/26/5008), or [26 U.S.C. 5370](https://www.govinfo.gov/link/uscode/26/5370), as applicable.
(b) *Unauthorized removal from bond.*
(1) TTB will assess the proprietor for the tax on any spirits, denatured spirits, or wines in bond that are removed from bonded premises other than as authorized by law.
(2) TTB will assess the proprietor for tax on spirits or denatured spirits lost from casks or other packages as described in [26 U.S.C. 5006(b)](https://www.govinfo.gov/link/uscode/26/5006) if the proprietor does not pay the tax upon demand by the appropriate TTB officer.
([26 U.S.C. 5006](https://www.govinfo.gov/link/uscode/26/5006), [5008](https://www.govinfo.gov/link/uscode/26/5008), [5370](https://www.govinfo.gov/link/uscode/26/5370))
### Additional Tax Provisions
#### § 19.256 Tax on wine.
(a) *Imposition of tax.* All wine (including imitation, substandard, or artificial wine, and compounds sold as wine) produced in or imported into or brought into the United States is subject to tax pursuant to [26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041) or [7652](https://www.govinfo.gov/link/uscode/26/7652). The proprietor may be liable for wine taxes under [26 U.S.C. 5362(b)(3)](https://www.govinfo.gov/link/uscode/26/5362) for wine that is transferred in bond to the proprietor's distilled spirits plant. The proprietor may not remove wine from the bonded premises of a distilled spirits plant for consumption or sale as wine. (*See* [26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362).)
(b) *Liability for tax.* Except as otherwise provided by law, the proprietor is liable for the tax on wine transferred in bond to the proprietor's distilled spirits plant from a bonded wine cellar or from another distilled spirits plant until the proprietor uses the wine in the manufacture of a distilled spirits product or properly disposes of the wine as provided elsewhere in this part.
([26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041), [5362](https://www.govinfo.gov/link/uscode/26/5362), [7652](https://www.govinfo.gov/link/uscode/26/7652))
#### § 19.257 Imported spirits.
The proprietor will incur a tax liability greater than the internal revenue tax imposed by [26 U.S.C. 5001(a)(1)](https://www.govinfo.gov/link/uscode/26/5001), if spirits originally imported for nonbeverage purposes are transferred from customs custody to TTB bonded premises pursuant to [26 U.S.C. 5232](https://www.govinfo.gov/link/uscode/26/5232), and the proprietor subsequently decides to withdraw the spirits for beverage purposes. If the spirits would have been subject to a higher duty had they been imported for beverage purpose, the proprietor must pay a tax equal to the difference between the higher duty and the duty actually paid. Proprietors will refer to this additional tax as “additional tax—less duty” and pay it at the same time and in the same manner as the distilled spirits excise tax. Proprietors must compute the amount of “additional tax—less duty” owed by applying this rate to the total quantity of proof gallons withdrawn. The proprietor must make a separate entry on the tax return labeled “additional tax—less duty” and show the amount of tax due.
([26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001))
#### § 19.258 Additional tax on nonbeverage spirits.
The additional tax imposed by [26 U.S.C. 5001(a)(8)](https://www.govinfo.gov/link/uscode/26/5001), on imported spirits withdrawn from customs custody without payment of tax and later withdrawn from bonded premises for beverage purposes, and the related provisions of [§ 19.257](/current/title-27/section-19.257), are not applicable to Puerto Rican or Virgin Islands spirits brought into the United States and transferred to bonded premises under the provisions of this part.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
## Subpart J—Claims
#### § 19.261 Scope.
This subpart covers the various types of claims that a proprietor may file and includes provisions regarding the following:
(a) General requirements for filing claims;
(b) Specific requirements for filing certain types of claims; and
(c) Remission, abatement, credit and refund of tax.
([26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008), [5215](https://www.govinfo.gov/link/uscode/26/5215), [6065](https://www.govinfo.gov/link/uscode/26/6065))
### Requirements for Filing Claims
#### § 19.262 General requirements for filing claims.
(a) A proprietor must file all claims for abatement, remission, credit, or refund under this part on form TTB F 5620.8, Claim—Alcohol and Tobacco Tax and Trade Bureau Taxes. The claim must:
(1) Be filed with TTB's National Revenue Center;
(2) Show the name, address, and capacity of the claimant;
(3) Be signed by the claimant or by the claimant's duly authorized agent under penalties of perjury as provided in [§ 19.45](/current/title-27/section-19.45); and
(4) Include any supporting documents required by this part. The supporting documents will be considered a part of the claim.
(b) The appropriate TTB officer may require that the claimant submit additional evidence or documentation to further support the legitimacy or accuracy of the claim.
([26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008), [5215](https://www.govinfo.gov/link/uscode/26/5215), [6065](https://www.govinfo.gov/link/uscode/26/6065))
#### § 19.263 Claims on spirits, denatured spirits, articles, or wines lost or destroyed in bond—specific requirements.
(a) *Claims for remission.* A claim for remission of tax liability relating to the destruction or loss of spirits, denatured spirits, articles, or wines in bond must include the following information:
(1) *Identity of containers.* Identification of the containers, by serial number if they were numbered, and location of the containers from which the spirits, denatured spirits, articles, or wines were lost, or in which they were removed for destruction;
(2) *Quantity of spirits.* The quantity of spirits, denatured spirits, articles, or wines lost or destroyed from each container, and the total quantity of spirits or wines covered by the claim;
(3) *Amount of claim.* The total amount of tax for which the claim is filed;
(4) *Identity of distilled spirits plant.* The name, number, and address of the distilled spirits plant from which withdrawn without payment of tax or removed for transfer in bond, if the claim involves spirits so withdrawn or removed or if the claim involves wines transferred in bond, and the date and purpose of such withdrawal or removal. In the case of imported spirits lost or destroyed while being transferred from customs custody to bonded premises as provided in [§ 19.409](/current/title-27/section-19.409), the name of the customs bonded warehouse, if any, and port of entry will be included instead of the plant name, number, and address;
(5) *Date and cause.* The date of the loss or destruction: If the date is not known, enter the date the loss or destruction was discovered. Include the cause of the loss together with relevant facts and details;
(6) *Carrier.* The name of the carrier if the loss occurred while the spirits were in transit;
(7) *Consignee.* The name and address of the consignee, in the case of spirits withdrawn without payment of tax which are lost before being used for research, development, or testing;
(8) *Theft.* If lost by theft, the facts establishing that the loss did not occur as the result of any negligence, connivance, collusion, or fraud on the part of the proprietor of the plant, owner, consignor, consignee, bailee, or carrier, or the employees or agents of any of them; and
(9) *Insurance.* In the case of a loss by theft, whether the claimant is indemnified or recompensed for the spirits or wines lost and if so, the amount and nature of indemnity or recompense and the actual value of the spirits or wines, less the tax.
(b) *Claims for abatement, credit or refund.* If a proprietor files a claim for abatement of an assessment, or for credit or refund of tax that has been paid or determined, for spirits, denatured spirits, articles, or wines lost or destroyed in bond, the claim must include all of the applicable information described in [paragraph (a)](/current/title-27/section-19.263#p-19.263\(a\)) of this section as well as the following:
(1) The date of assessment or payment of the tax for which abatement, credit or refund is claimed. If the tax has not been assessed or paid, give the date of the tax determination; and
(2) The name, plant number and address of the plant where the tax was determined, assessed or paid. If the tax was assessed against, or paid by, someone other than the proprietor, then give the name, address and capacity of the person who was assessed or paid the tax.
(c) *Supporting documents* —
(1) *General.* If possible, the proprietor should support the information and details on all claims filed under this section with affidavits by persons having personal knowledge of the circumstances of the loss or destruction.
(2) *Losses in transit.* For claims on spirits, denatured spirits, articles, or wines lost while being transferred by a carrier, the claim must be supported by a copy of the bill of lading.
(3) *Spirits withdrawn without payment of tax.* If the lost spirits were withdrawn without payment of tax for research, development, or testing, the claim must be supported by a copy of the proprietor's sample record prescribed in [subpart V of this part](/current/title-27/part-19/subpart-V).
([26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008), [5370](https://www.govinfo.gov/link/uscode/26/5370))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1123](https://www.federalregister.gov/citation/82-FR-1123), Jan. 4, 2017]
#### § 19.264 Claims on spirits returned to bonded premises—specific requirements.
(a) *General.* Section 5215(a) of the IRC allows for the return of tax paid or tax determined spirits to the bonded premises of a distilled spirits plant under certain conditions. In addition, section 5008(c) of the IRC allows a proprietor to file a claim for credit or refund of tax on the spirits returned to bonded premises under section 5215(a). For information on allowable returns see [subpart Q of this part](/current/title-27/part-19/subpart-Q).
(b) *Claims for credit or refund.* A claim for credit or refund of tax on spirits returned to bonded premises under section 5215(a) must include the following information:
(1) Quantity of spirits so returned;
(2) Amount of tax for which the claim is filed;
(3) Name, address, and plant number of the plant to which the spirits were returned and the date of the return;
(4) The purpose for which the spirits were returned; and
(5) The serial number of the gauge record for the returned spirits.
(c) *Puerto Rican and Virgin Islands spirits and imported rum.* If the alcoholic content of the spirits contain at least 92 percent Puerto Rican or Virgin Islands rum, or if the spirits contain rum imported from any area other than Puerto Rico and the Virgin Islands, the claim must show:
(1) Proof gallons of the finished product derived from Puerto Rican or Virgin Islands spirits, or derived from rum imported from any other area; and
(2) The amount of tax imposed by [26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652) or [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), determined at the time of withdrawal from bond, on the Puerto Rican or Virgin Islands spirits, or on the rum imported from any other area, contained in the product.
(d) *Products subject to [26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010) tax credits.* A claim for credit or refund of tax on spirits containing eligible wine or eligible flavors must include the date and serial number of the record of tax determination and the effective tax rate at which the tax was paid or determined. If this information is not provided, the amount of tax claimed will be based on the lowest effective tax rate applied to the product.
(e) *Limits on claims.* Claims for credit or refund of tax must be filed by the proprietor of the plant to which the spirits were returned. The claim must be filed within six months of the date of the return. No interest is allowed on any claims for refund or credit.
([26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008), [5215](https://www.govinfo.gov/link/uscode/26/5215))
#### § 19.265 Claims relating to spirits lost after tax determination.
Claims for abatement, credit, or refund of tax under this part, relating to losses of spirits occurring on bonded premises after tax determination but prior to physical removal from such premises, will be prepared and filed in accordance with the regulations in [§ 19.263(b)](/current/title-27/section-19.263#p-19.263\(b\)) and [(c)](/current/title-27/section-19.263#p-19.263\(c\)).
([26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008))
### Rules Regarding Credits, Abatement, Remission, or Refund
#### § 19.266 Claims for credit of tax.
A proprietor may file a claim for credit of tax, as provided in this part, after the tax has been determined, whether or not the tax has been paid. However, a proprietor may not anticipate allowance of a credit or make an adjusting entry in a tax return pending action on the claim.
([26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008), [5215](https://www.govinfo.gov/link/uscode/26/5215))
#### § 19.267 Adjustments for credited tax.
When a proprietor receives a notice of allowance of credit from TTB, including notification of credit for tax on spirits exported with benefit of drawback as provided in [part 28 of this chapter](/current/title-27/part-28), the proprietor will make an adjusting entry and an explanatory statement on its next excise tax return. The proprietor will identify the notification of allowance of credit that authorizes the adjusting entry in the explanatory statement. If the allowable tax credit is greater than the tax due on the excise tax return, the proprietor will apply the balance of the tax credit to one or more following tax returns until the tax credit is exhausted.
([26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008), [5062](https://www.govinfo.gov/link/uscode/26/5062))
#### § 19.268 Allowance of remission, abatement, credit, or refund of tax.
The appropriate TTB officer is authorized to allow claims for remission, abatement, credit, and refund of tax, filed under the provisions of this part.
([26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008))
### Rules for Puerto Rican and Virgin Islands Spirits
#### § 19.269 Puerto Rican and Virgin Islands spirits.
(a) The provisions of [26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008), authorizing abatement, remission, credit, or refund for loss or destruction of distilled spirits, also apply to spirits brought into the United States from Puerto Rico or the Virgin Islands with respect to the following:
(1) Spirits lost while in bond;
(2) Voluntary destruction of spirits in bond;
(3) Spirits returned to bonded premises after withdrawal without payment of tax; and
(4) Spirits returned to bonded premises after withdrawal upon tax determination.
(b) In addition to the information required by [§ 19.263](/current/title-27/section-19.263), claims relating to spirits lost in bond must show the name of the producer and the serial number and date of the formula under which produced, if any.
([26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008), [5215](https://www.govinfo.gov/link/uscode/26/5215))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1123](https://www.federalregister.gov/citation/82-FR-1123), Jan. 4, 2017]
## Subpart K—Gauging
#### § 19.281 Scope.
This subpart covers gauging, which is the determination of the quantity and the proof of distilled spirits. Topics covered in this subpart include: The general requirements for gauging; when gauges are required at distilled spirits plants; and special rules that apply to the gauges performed at distilled spirits plants. For additional requirements and procedures governing gauging, see [part 30 of this chapter](/current/title-27/part-30), Gauging Manual.
#### § 19.282 General requirements for gauging and measuring equipment.
A proprietor is required to perform periodic gauges of the spirits, wines, and alcoholic flavorings at the plant. A proprietor must have accurate and readily usable gauging and measuring equipment as required by this [part and part 30 of this chapter](/current/title-27/part-30). At any time, TTB may require that the proprietor's gauges be performed in the presence of, and be verified by, a TTB officer. In addition, TTB may disapprove the use of any equipment, or the proprietor's means of gauging, if TTB finds that it is not sufficiently accurate or suitable for the gauges and measurements to be made.
([26 U.S.C. 5006](https://www.govinfo.gov/link/uscode/26/5006), [5204](https://www.govinfo.gov/link/uscode/26/5204))
### Required Gauges
#### § 19.283 When gauges are required.
The proprietor must gauge spirits, wine, and alcoholic flavoring materials when required to do so by the appropriate TTB officer or when the spirits, wine, or flavoring materials are:
(a) Produced and entered for deposit;
(b) Filled into packages from storage tanks;
(c) Transferred or received in bond;
(d) Transferred between operational accounts;
(e) Mixed in the manufacture of a distilled spirits product;
(f) Mingled under [§ 19.329](/current/title-27/section-19.329);
(g) Reduced in proof before bottling;
(h) Voluntarily destroyed;
(i) Removed or withdrawn from bond;
(j) Tax determined;
(k) Returned to bond; or
(l) Denatured.
([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204), [5559](https://www.govinfo.gov/link/uscode/26/5559))
### Rules for Gauging
#### § 19.284 Quantity determination of bulk spirits.
(a) *Gauge of spirits in packages.* When determining the quantity of bulk spirits in packages, the proprietor must determine the quantity by weight as provided in [part 30 of this chapter](/current/title-27/part-30).
(b) *Bulk gauge for tax determination.* When determining the quantity of bulk spirits for determination of tax or when performing a production gauge that will be used for tax determination, the proprietor must determine the quantity by weight as provided in [part 30 of this chapter](/current/title-27/part-30) or by an accurate mass flow meter. For tax determination purposes, an accurate mass flow meter is a mass flow meter that has been certified by the manufacturer or other qualified person as accurate within a tolerance of plus or minus 0.1 percent.
(c) *Volumetric determination.* Except as provided in [paragraphs (a)](/current/title-27/section-19.284#p-19.284\(a\)) and [(b)](/current/title-27/section-19.284#p-19.284\(b\)) of this section, in all other instances when the proprietor is required to gauge bulk spirits in bond, the proprietor may determine the quantity by either weight or volume. When the proprietor determines the quantity by volume, the proprietor must measure the spirits by using:
(1) A tank or bulk conveyance for which a calibration chart is provided, with the calibration charts certified as accurate by persons qualified to calibrate tanks or bulk conveyances; or
(2) An accurate mass flow meter. For purposes of this paragraph, an accurate mass flow meter is a mass flow meter that has been certified by the manufacturer or other qualified person as accurate within a tolerance of plus or minus 0.5 percent; or
(3) Another device or method approved by the appropriate TTB officer.
([26 U.S.C. 5559](https://www.govinfo.gov/link/uscode/26/5559))
#### § 19.285 Proof determination of distilled spirits.
(a) *Proof.* Except as provided in [paragraph (b)](/current/title-27/section-19.285#p-19.285\(b\)) of this section, when the proprietor is required to gauge distilled spirits, the proprietor must determine the proof in accordance with the procedures prescribed in [part 30 of this chapter](/current/title-27/part-30), Gauging Manual.
(b) *Use of Initial proof.* After a proprietor has determined the proof of distilled spirits in accordance with the procedures in [part 30 of this chapter](/current/title-27/part-30), a proprietor may use the initial determination of proof when required to make a later gauge at the same plant. However, a proprietor must determine the proof again when:
(1) A bottling tank gauge is required by [§ 19.353](/current/title-27/section-19.353);
(2) A gauge for tax determination is required by [§ 19.226](/current/title-27/section-19.226); or
(3) In any case where the proof may have changed.
([26 U.S.C. 5559](https://www.govinfo.gov/link/uscode/26/5559))
#### § 19.286 Gauging of spirits in bottles.
When gauging spirits in bottles, the proprietor may determine the proof and quantity from case markings and label information if the bottles are full and there is no evidence that tampering has occurred.
([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204), [5559](https://www.govinfo.gov/link/uscode/26/5559))
#### § 19.287 Gauging of alcoholic flavoring materials.
Generally, alcoholic flavoring material must be gauged when dumped. However, when received from a manufacturer in a closed, nonporous container such material may be gauged by using the proof shown on the container label or a related statement of proof from the manufacturer. When the proof is determined from a label or manufacturer's statement, the proprietor will test a sufficient number of samples to verify the accuracy of the proof so determined. TTB may require that alcoholic flavoring materials be gauged by the methods provided in [part 30 of this chapter](/current/title-27/part-30).
([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204), [5559](https://www.govinfo.gov/link/uscode/26/5559))
#### § 19.288 Determination of tare.
When packages are to be individually gauged for withdrawal from bonded premises, the actual tare must be determined in accordance with [part 30 of this chapter](/current/title-27/part-30).
([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204))
#### § 19.289 Production gauge.
(a) *General requirements for production gauges.* A proprietor must gauge all spirits by determining the quantity and proof as soon as reasonably possible after production is completed. Except as otherwise provided in this section, a proprietor may determine the quantity by volume or by weight, by an accurate mass flow meter, or when approved by the appropriate TTB officer, by other devices or methods that accurately determine the quantities. If caramel is added to brandy or rum, the proof of the spirits must be determined after the addition. Spirits in each receiving tank will be gauged before any reduction in proof and both before and after each removal of spirits. The gauges must be recorded in the records required by [§ 19.585](/current/title-27/section-19.585).
(b) *Tax to be determined on production gauge.* If the tax is to be determined based on the production gauge, all transaction records must be marked “Withdrawal on Production Gauge.” A proprietor may determine the tax based on the production gauge if the spirits are:
(1) Weighed into bulk conveyances or metered using an accurate mass flow meter;
(2) Uniformly filled by weight or an accurate mass flow meter into metal packages; or
(3) Filled by weight or an accurate mass flow meter into packages for immediate withdrawal from bonded premises with the details recorded on a package gauge record in accordance with [§ 19.619](/current/title-27/section-19.619).
(c) *Tax not to be determined on production gauge.* If spirits are drawn from the production system into barrels, drums, or similar portable containers of the same rated capacity and the containers are filled to capacity, and the tax is not to be determined on the basis of the production gauge, the gauge may be made by:
(1) Weighing in a tank, converting the weight into proof gallons, and determining the average content of each container;
(2) Measuring volumetrically, in a calibrated tank, converting the wine gallons determined into proof gallons, and determining the average content of each container;
(3) Converting the rated capacity into proof gallons to determine the average content of each container. Rated capacity will be determined from specifications of the manufacturer. The proprietor will determine the rated capacity of used cooperage; or
(4) Determining by an accurate mass flow meter or a device or method approved under [paragraph (a)](/current/title-27/section-19.289#p-19.289\(a\)) of this section, the total quantity filled into containers, and determining the average content of each container.
(d) *Records of production gauge.* For the production gauge, fractional proof gallons will be rounded to the nearest one-tenth and the average content and the number of packages filled will be used in computing the quantity produced. The actual proof gallons in each remnant container must be shown. As provided in [§ 19.618](/current/title-27/section-19.618), a separate gauge record will be prepared for each lot of packages filled (see [§ 19.485](/current/title-27/section-19.485)) and for each removal by pipeline or bulk conveyance for deposit in bond on the same plant premises. The gauge record will show “Deposit in storage” or “Deposit in processing.” If spirits are to be transferred in bond or withdrawn from bond, the production gauge will be made on the form or record required by this part (accompanied by a package gauge record, if required).
([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204), [5211](https://www.govinfo.gov/link/uscode/26/5211))
## Subpart L—Production of Distilled Spirits
#### § 19.291 General.
The regulations in this subpart cover production operations. A proprietor authorized to produce distilled spirits must conduct production operations in accordance with the provisions of this subpart. [Subpart V of this part](/current/title-27/part-19/subpart-V) sets forth recordkeeping requirements that apply to production operations.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
### Notification to TTB When Beginning or Suspending Production Operations
#### § 19.292 Notice of operations.
A proprietor authorized to produce distilled spirits may not commence, suspend, or resume production operations at the plant without first providing written notice to TTB.
(a) *Beginning operations.* A proprietor must file a letterhead notice with the appropriate TTB officer before beginning or resuming production operations. A proprietor must not begin or resume operations before the time specified in the notice.
(b) *Suspending operations.* If a proprietor intends to suspend production operations for a period of 90 days or more, the proprietor must file a letterhead notice with the appropriate TTB officer specifying the date on which operations will be suspended.
(c) *Discontinuing reports.* A proprietor is not required to prepare or file reports of production operations under [subpart V of this part](/current/title-27/part-19/subpart-V) for periods during which production operations are suspended.
([26 U.S.C. 5221](https://www.govinfo.gov/link/uscode/26/5221))
### Rules for Receipt, Use, and Disposal of Materials
#### § 19.293 Receipt of materials.
When a proprietor receives certain materials on bonded premises, the proprietor must determine the quantity received and record those quantities in the records prescribed by [subpart V of this part](/current/title-27/part-19/subpart-V). This requirement applies to:
(a) Fermenting materials;
(b) Distilling materials (including nonpotable chemical mixtures containing spirits); and
(c) Spirits, denatured spirits, articles, and spirits residue for redistillation.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201), [5222](https://www.govinfo.gov/link/uscode/26/5222), [5223](https://www.govinfo.gov/link/uscode/26/5223))
#### § 19.294 Removal of fermenting material.
Material received for use as fermenting material may be removed from or used on bonded premises for other purposes. The proprietor must keep a record of use or removal as provided in [subpart V of this part](/current/title-27/part-19/subpart-V).
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.295 Removal or destruction of distilling material.
(a) *Distilling material.* Generally, a proprietor may not remove distilling material from bonded premises before it is distilled. However, a proprietor may remove mash, wort, wash, or other distilling material:
(1) To plant premises, other than bonded premises, for use in any business authorized under [§ 19.55](/current/title-27/section-19.55);
(2) To other premises for use in processes not involving the production of spirits, alcohol beverages, or vinegar by the vaporizing process; or
(3) For destruction.
(b) *Residues.* A proprietor may remove the residue of distilling material not introduced into the production system from the premises if the liquid is extracted from the material before removal and the liquid is not received at any distilled spirits plant or bonded wine cellar. A proprietor may return residue of beer used as distilling material to the producing brewery. A proprietor may destroy distilling material produced and wine and beer received for use as distilling material.
(c) *Records.* A proprietor must keep a record of removal or destruction as provided in [subpart V of this part](/current/title-27/part-19/subpart-V).
([26 U.S.C. 5222](https://www.govinfo.gov/link/uscode/26/5222), [5370](https://www.govinfo.gov/link/uscode/26/5370))
#### § 19.296 Fermented materials.
Fermented materials that a proprietor intends to use in the production of spirits must be:
(a) Produced on the bonded premises where used;
(b) Received from a bonded wine cellar in the case of wine;
(c) Beer received from a brewery without payment of tax, or beer that was removed from a brewery upon determination of tax; or
(d) Apple cider exempt from tax under [26 U.S.C. 5042(a)(1)](https://www.govinfo.gov/link/uscode/26/5042).
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201), [5222](https://www.govinfo.gov/link/uscode/26/5222), [5223](https://www.govinfo.gov/link/uscode/26/5223))
#### § 19.297 Use of materials in production of spirits.
A proprietor may produce spirits from any suitable material in accordance with the proprietor's statements of production procedure in the notice of registration. Materials from which alcohol will not be produced may be used in production only if the use of the materials is described in the approved statements of production procedure. The distillation of nonpotable chemical mixtures as described in [§ 19.36](/current/title-27/section-19.36) will be deemed to be the original and continuous distillation of the spirits in such mixtures and to constitute the production of spirits.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172), [5178](https://www.govinfo.gov/link/uscode/26/5178))
### Rules for Production of Spirits
#### § 19.301 Distillation.
The distillation of spirits must be done in a continuous system. Distilling operations are continuous when the spirits are moved through the various steps of production as quickly as plant operation will permit. The proprietor may move the product through as many distilling or other production operations as desired, provided the operations are continuous. The collection of unfinished spirits for the purpose of redistillation is not considered to be a break in the continuity of the distilling procedure. However, the quantity and proof of any unfinished spirits must be determined and recorded before any mingling with other materials or before any further operations involving the unfinished spirits outside the continuous system. Before the production gauge, spirits may be held only as long as reasonably necessary to complete the production procedure.
([26 U.S.C. 5178](https://www.govinfo.gov/link/uscode/26/5178), [5211](https://www.govinfo.gov/link/uscode/26/5211), [5222](https://www.govinfo.gov/link/uscode/26/5222))
#### § 19.302 Treatment during production.
During production, the proprietor may purify or refine the spirits by using any material that will not remain in the finished product. Juniper berries and other natural aromatics or their extracted oils may be used in the distillation of gin. Spirits may be percolated through or treated with oak chips that have not been treated with any chemical. The proprietor must destroy or so treat any materials used in treatment of spirits, and which do not remain in the spirits, so as to preclude the extraction of potable spirits.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.303 Addition of caramel to rum or brandy and addition of oak chips to spirits.
A proprietor may add caramel that has no material sweetening properties to rum or brandy in packages or tanks prior to production gauge. A proprietor may add oak chips that have not been treated with any chemical to packages of spirits prior to or after the production gauge. The proprietor must note the use of oak chips on all transaction records.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.304 Production gauge.
A proprietor must gauge all spirits by determining the quantity and proof as soon as reasonably possible after production is completed. Additional requirements regarding production gauges are found in [subpart K of this part](/current/title-27/part-19/subpart-K).
([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204), [5211](https://www.govinfo.gov/link/uscode/26/5211))
#### § 19.305 Identification of spirits.
Upon completion of the production gauge, the proprietor must identify containers of spirits as provided in [subpart S of this part](/current/title-27/part-19/subpart-S). When the proprietor intends to enter spirits into storage on bonded premises for later packaging in wooden packages, the proprietor may identify the spirits with the designation to which they would be entitled if drawn into wooden packages, followed by the word “Designate,” for example, “Bourbon Whisky Designate.”
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201), [5206](https://www.govinfo.gov/link/uscode/26/5206))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1123](https://www.federalregister.gov/citation/82-FR-1123), Jan. 4, 2017]
#### § 19.306 Entry.
(a) Following completion of the production gauge, a proprietor must make the appropriate entry for:
(1) Deposit of the spirits on bonded premises for storage or processing;
(2) Withdrawal of the spirits on determination of tax;
(3) Withdrawal of the spirits free of tax;
(4) Withdrawal of the spirits without payment of tax; or
(5) Transfer of the spirits for redistillation.
(b) A proprietor may use the production gauge as the entry gauge when spirits are:
(1) Deposited for storage or processing at the same distilled spirits plant; or
(2) Entered for redistillation at the same distilled spirits plant.
(c) When spirits are entered for deposit at another distilled spirits plant or are entered for withdrawal or redistillation, the provisions [subpart P of this part](/current/title-27/part-19/subpart-P) will apply.
([26 U.S.C. 5211](https://www.govinfo.gov/link/uscode/26/5211))
#### § 19.307 Distillates containing extraneous substances.
(a) *Use in production.* Distillates that contain substantial quantities of fusel oil, aldehydes, or other extraneous substances may be removed from the distilling system before the production gauge and promptly added to fermenting or distilling material at the distillery where produced.
(b) *Use at adjacent bonded wine cellar.* Distillates that contain aldehydes may be removed, without payment of tax, to an adjacent bonded wine cellar for use in fermentation of wine to be used as distilling material at the distilled spirits plant from which the distillates were removed. The removal of distillates to an adjacent bonded wine cellar must be done as provided in [§ 19.419](/current/title-27/section-19.419). The receipt and use of those distillates must conform to the requirements of [part 24 of this chapter](/current/title-27/part-24).
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201), [5222](https://www.govinfo.gov/link/uscode/26/5222), [5373](https://www.govinfo.gov/link/uscode/26/5373))
### Rules for Chemical Byproducts
#### § 19.308 Spirits content of chemicals produced.
All chemicals and chemical byproducts produced must be substantially free of spirits before being removed from bonded premises. The spirits content of chemicals to be removed from bonded premises must not exceed 10 percent by volume unless the appropriate TTB officer approves higher limits. A proprietor must test chemicals for spirits content and maintain a record of such tests as required by [§ 19.584](/current/title-27/section-19.584).
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.309 Disposition of chemicals.
Chemicals that meet the requirements in [§ 19.308](/current/title-27/section-19.308) may be removed from bonded premises by pipeline or in containers marked to show the contents. The proprietor must determine the quantities of chemicals removed from bonded premises and keep records of removals as required by [§ 19.586](/current/title-27/section-19.586). A TTB officer may take samples of chemicals.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201), [5222](https://www.govinfo.gov/link/uscode/26/5222))
#### § 19.310 Wash water.
Water used in washing chemicals to remove spirits may be run into a wash tank or a distilling material tank, or may be destroyed or disposed of on the premises.
([26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008), [5201](https://www.govinfo.gov/link/uscode/26/5201))
### Production Inventories
#### § 19.312 Physical inventories.
A proprietor must take a physical inventory of the spirits and denatured spirits in tanks and other containers in the production account at the close of each calendar quarter. A proprietor must record the results of the inventory as provided in [subpart V of this part](/current/title-27/part-19/subpart-V) and must show separately spirits and denatured spirits received for redistillation. TTB may require additional inventories be taken at any time.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
### Rules for Redistillation
#### § 19.314 General.
Distillers or processors may redistill spirits, denatured spirits, articles, and spirits residues. Some redistillation requires an approved formula on form TTB F 5100.51, Formula and Process for Domestic and Imported Alcohol Beverages, as specified in [§§ 5.192](/current/title-27/section-5.192) and [5.193 of this chapter](/current/title-27/section-5.193).
([26 U.S.C. 5223](https://www.govinfo.gov/link/uscode/26/5223))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6. 2024]
#### § 19.315 Receipts for redistillation.
(a) A proprietor may receive and redistill spirits or denatured spirits that:
(1) Have not been removed from bond;
(2) Have been withdrawn from bond on payment or determination of tax and returned to bond under [subpart Q of this part](/current/title-27/part-19/subpart-Q);
(3) Have been withdrawn from bond free of tax or without payment of tax and returned to bond under [subpart T of this part](/current/title-27/part-19/subpart-T); or
(4) Have been abandoned to the United States and sold to the proprietor without the payment of tax.
(b) A proprietor may also receive and redistill:
(1) Recovered denatured spirits and recovered articles returned under [§ 19.454](/current/title-27/section-19.454), and
(2) Articles and spirits residues received under [§ 19.454](/current/title-27/section-19.454).
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201), [5215](https://www.govinfo.gov/link/uscode/26/5215), [5223](https://www.govinfo.gov/link/uscode/26/5223), [5243](https://www.govinfo.gov/link/uscode/26/5243))
#### § 19.316 Redistillation.
(a) TTB has established standards of identity for the various classes and types of distilled spirits. Those standards are found in [part 5 of this chapter](/current/title-27/part-5). If a proprietor intends to redistill spirits, the proprietor must ensure that the redistillation process does not cause the distillate to be become ineligible for designation in the class or type of spirits that the proprietor intends to produce. Therefore, spirits must not be redistilled at a proof lower than that allowed for the class and type at which the spirits were originally produced, unless the redistilled spirits are to be:
(1) Used in wine production;
(2) Used in the manufacture of gin or vodka; or
(3) Designated as alcohol.
(b) In order to preserve the class and type of spirits during the redistillation process, different kinds of spirits must be redistilled separately, or with distilling material of the same kind or type as that from which the spirits were originally produced. However, this restriction does not apply when:
(1) Brandy is redistilled into “spirits-fruit” or “neutral spirits-fruit”. In this case the resulting distillate must not be used for producing wine;
(2) Whiskey is redistilled into “spirits-grain” or “neutral spirits-grain”;
(3) Spirits originally distilled from different kinds of material are redistilled into “spirits-mixed” or “neutral spirits-mixed”; or
(4) The spirits are redistilled into alcohol.
(c) All spirits redistilled after the production gauge will be treated the same as if the spirits had been originally produced by the redistiller. Spirits recovered by redistillation of denatured spirits, articles, or spirits residues may not be withdrawn from bonded premises except for industrial use or after denaturation. Otherwise, all provisions of this part and [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101) applicable to the original production of spirits will be applicable to the redistillation of spirits. Nothing in this section affects any provision of this chapter relating to the labeling of distilled spirits.
([26 U.S.C. 5215](https://www.govinfo.gov/link/uscode/26/5215), [5223](https://www.govinfo.gov/link/uscode/26/5223))
## Subpart M—Storage of Distilled Spirits
#### § 19.321 General.
This subpart covers storage operations at distilled spirits plants. A proprietor qualified as a warehouseman and authorized to store bulk distilled spirits and wines must conduct storage operations in accordance with the provisions of this subpart. [Subpart V of this part](/current/title-27/part-19/subpart-V) sets forth recordkeeping requirements that apply to storage operations.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
### Receipt and Storage of Spirits and Wines
#### § 19.322 Receipt and storage of bulk spirits and wines.
(a) *Deposit of spirits into storage account.* A proprietor may receive bulk spirits into the storage account:
(1) From the production facilities of the same plant;
(2) By transfer in bond from another plant;
(3) From customs custody without payment of tax; or
(4) By return to bulk storage.
(b) *Deposit of wine into storage account.* A proprietor may receive bulk wine into the storage account:
(1) By transfer in bond from a bonded wine cellar; or
(2) By transfer in bond from another distilled spirits plant.
(c) *Storage.* A proprietor may store spirits or wines in packages, tanks or portable bulk containers in the storage account on the bonded premises. If stored in portable containers, the containers must be kept so that they can be readily inspected or inventoried by TTB officers.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201), [5202](https://www.govinfo.gov/link/uscode/26/5202), [5211](https://www.govinfo.gov/link/uscode/26/5211), [5212](https://www.govinfo.gov/link/uscode/26/5212), [5231](https://www.govinfo.gov/link/uscode/26/5231), [5232](https://www.govinfo.gov/link/uscode/26/5232), [5601](https://www.govinfo.gov/link/uscode/26/5601))
### Rules for Filling and Changing Packages
#### § 19.324 Filling of packages from tanks.
A proprietor may fill spirits or wines into packages from storage tanks on bonded premises. The spirits or wines in the tank must be gauged before the filling of packages begins and again when the filling is finished if the tank is not empty. The results of the gauges must be recorded in the records required by [§ 19.618](/current/title-27/section-19.618).
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.325 Change of packages.
A proprietor may transfer spirits or wines in storage from one package to another. Each new package must contain spirits from only one package except in the case of spirits of 190° or more proof. Packages of spirits must be marked as provided in [subpart S of this part](/current/title-27/part-19/subpart-S). Each package of wine must bear the same marks as the package from which the wine was transferred.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
### Rules for Mingling or Blending Spirits
#### § 19.326 Mingling or blending of spirits for further storage.
A proprietor may mingle or blend spirits in the storage account according to the following rules:
(a) Spirits distilled at 190° or more of proof, whether or not later reduced, may be mingled in storage.
(b) Domestic spirits distilled at less than 190° of proof may be mingled for withdrawal or further storage if the spirits:
(1) Are of the same kind; and
(2) Were produced in the same State.
(c) Imported spirits distilled at less than 190° of proof may be mingled for withdrawal or further storage if the spirits:
(1) Are of the same kind;
(2) Were produced in the same foreign country; and
(3) Were treated, blended, or compounded in the same foreign country and the U.S. import duty was paid at the same rate.
(d) Imported spirits distilled at less than 190° of proof that are recognized as distinctive products under [part 5 of this chapter](/current/title-27/part-5) may be mingled for withdrawal or further storage if the spirits:
(1) Are of the same kind;
(2) Were produced by the same proprietor in the same foreign country; and
(3) Were treated, blended, or compounded by the same proprietor in the same foreign country and the U.S. import duty was paid at the same rate.
(e) Fruit brandies distilled from the same kind of fruit at not more than 170° of proof may, for the sole purpose of perfecting such brandies according to commercial standards, be blended with each other, or with any blend of such fruit brandies in storage. Rums may, for the sole purpose of perfecting them according to commercial standards, be blended with each other, or with any blend of rums.
(f) Packaging after mingling or blending must be done under the provisions of [§ 19.324](/current/title-27/section-19.324). The mingled or blended spirits may be returned to the packages from which they were dumped, or as many of the packages as needed.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201), [5214](https://www.govinfo.gov/link/uscode/26/5214))
#### § 19.327 Packages dumped for mingling.
A proprietor must examine each package of spirits to be dumped for mingling. If any package bears evidence of loss due to theft or unauthorized voluntary destruction, the proprietor must notify the appropriate TTB officer before dumping the package. Mingled spirits must be recorded on the tank record required by [§§ 19.592](/current/title-27/section-19.592) and [19.593](/current/title-27/section-19.593), as appropriate.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.328 Determining age of mingled spirits.
When spirits are mingled, the age of the spirits for the entire lot will be the age of the youngest spirits contained in the lot.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.329 Mingled spirits or wines held in tanks.
When wines or spirits of less than 190° of proof are mingled in a tank, the proprietor must gauge the spirits or wines in the tank and record the mingling gauge on the tank record prescribed in [§ 19.592](/current/title-27/section-19.592).
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
### Use of Oak Chips and Caramel
#### § 19.331 Use of oak chips in spirits and caramel in brandy and rum.
A proprietor may add oak chips that have not been treated with any chemical to packages of spirits. The proprietor must note the use of oak chips on all transaction records. A proprietor may add caramel that has no material sweetening properties to rum or brandy stored in packages or tanks.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
### Storage Inventories
#### § 19.333 Physical inventories.
A proprietor must take a physical inventory of all spirits and wines held in the storage account in tanks and other containers (except packages) at the close of each calendar quarter. A proprietor must record the results of the inventory as provided in [subpart V of this part](/current/title-27/part-19/subpart-V). TTB may require additional inventories at any time.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
## Subpart N—Processing of Distilled Spirits
#### § 19.341 General.
This subpart covers processing operations at distilled spirits plants. A proprietor authorized to perform processing operations must conduct processing operations in accordance with the provisions of this subpart. [Subpart V of this part](/current/title-27/part-19/subpart-V) sets forth recordkeeping requirements that apply to processing operations. Also, the provisions of [subpart O of this part](/current/title-27/part-19/subpart-O) apply if a proprietor denatures spirits or manufactures articles on bonded premises as part of processing operations under this subpart.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
### Rules for Receipt and Use of Spirits, Wines, and Alcoholic Flavoring Materials
#### § 19.342 Receipt of spirits, wines, and alcoholic flavoring materials for processing.
(a) *Receipt of bulk spirits.* A proprietor may receive bulk spirits into the processing account:
(1) From the production or storage account at the same plant;
(2) By transfer in bond from another distilled spirits plant; or
(3) By withdrawal from customs custody under [26 U.S.C. 5232](https://www.govinfo.gov/link/uscode/26/5232).
(b) *Receipt of wines.* A proprietor may receive wines into the processing account:
(1) From the storage account at the same plant; or
(2) By transfer in bond from a bonded wine cellar or another distilled spirits plant.
(c) *Receipt of spirits returned to bond.* A proprietor may receive spirits into the processing account that are returned to bond under the provisions of [26 U.S.C. 5215](https://www.govinfo.gov/link/uscode/26/5215).
(d) *Receipt of alcoholic flavoring materials.* A proprietor may receive alcoholic flavoring materials into the processing account.
(e) *Dumping of spirits, wines, and alcoholic flavoring materials.* As provided in [§§ 19.343](/current/title-27/section-19.343) and [19.598](/current/title-27/section-19.598), the proprietor must prepare a dump/batch record when spirits, wines, and alcoholic flavoring materials are dumped for use in the processing account. Spirits, wines, and alcoholic flavoring materials that are dumped into the processing account are subject to the following rules:
(1) Spirits and wines received in bulk containers or conveyances may be retained in the containers or conveyances in which received until used, but must be recorded as dumped upon receipt;
(2) Spirits and wines received by pipeline must be deposited in tanks and recorded as dumped on receipt; and
(3) Alcoholic flavoring materials may be retained in the containers in which received or may be transferred to another container if the proprietor marks or otherwise indicates thereon, the full identification of the original container, the date of receipt, and the quantity deposited. Alcoholic flavoring materials and nonalcoholic ingredients will be considered dumped when mixed with spirits or wines.
(f) *Gauging.* A proprietor must determine the proof gallon content of spirits, wines, and alcoholic flavoring materials at the time of dumping. Additional information regarding the gauging of spirits, wines, and alcoholic flavoring materials is found in [subpart K of this part](/current/title-27/part-19/subpart-K).
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.343 Use of spirits, wines, and alcoholic flavoring materials.
A proprietor must prepare a dump/batch record in accordance with [§ 19.598](/current/title-27/section-19.598) for spirits, wines, alcoholic flavoring materials, and nonalcoholic ingredients used in the manufacture of a distilled spirits product according to the following rules.
(a) *Dump record.* A proprietor must prepare a dump record when spirits, wines, or alcoholic flavoring materials are dumped for use in the manufacture of a distilled spirits product, and when spirits are dumped for redistillation in the processing account.
(b) *Batch record.* A proprietor must prepare a batch record to report:
(1) The dumping of spirits that are to be used immediately and in their entirety in preparing a batch of a product manufactured under an approved formula;
(2) The use of spirits or wines previously dumped, reported on dump records and retained in tanks or receptacles; or
(3) The use of any combination of ingredients under paragraph (b)(1) or [paragraph (b)(2)](/current/title-27/section-19.343#p-19.343\(b\)\(2\)) of this section in preparing a batch of product manufactured under an approved formula.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.344 Manufacture of nonbeverage products, intermediate products, or eligible flavors.
(a) Distilled spirits and wine may be used for the manufacture of flavors or flavoring extracts of a nonbeverage nature as intermediate products to be used exclusively in the manufacture of other distilled spirits products on bonded premises.
(b) Nonbeverage products on which drawback will be claimed, as provided in [26 U.S.C. 5111-5114](https://www.govinfo.gov/link/uscode/26/5111), may not be manufactured on bonded premises. Premises used for the manufacture of nonbeverage products on which drawback will be claimed must be separated from bonded premises.
(c) For purposes of computing an effective tax rate, flavors manufactured on either the bonded or general premises of a distilled spirits plant are not eligible flavors. See [§ 19.1](/current/title-27/section-19.1) for the definition of the term “eligible flavor” and further restrictions that apply to the manufacture of an eligible flavor.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
### Obscuration Determination
#### § 19.346 Determining obscuration.
A proprietor may determine, as provided in [§ 30.32 of this chapter](/current/title-27/section-30.32), the proof obscuration of spirits to be bottled on the basis of a representative sample taken from a storage tank before the transfer of the spirits to the processing account or from a tank after the spirits have been dumped for processing, whether or not combined with other alcoholic ingredients. The obscuration will be determined after the sample has been reduced to within one degree of bottling proof. Only water may be added to a lot of spirits to be bottled for which the determination of proof obscuration is made from a sample under this section. The proof obscuration for spirits gauged under this section must be frequently verified by testing samples taken from bottling tanks before bottling.
([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204))
### Filing Formulas with TTB
#### § 19.348 Formula requirements.
A proprietor must obtain approval of a formula on form TTB F 5100.51 as provided in [§§ 5.192](/current/title-27/section-5.192) and [5.193 of this chapter](/current/title-27/section-5.193) before a proprietor may:
(a) Blend, mix, purify, refine, compound, or treat spirits in any manner which results in a change of character, composition, class, or type of the spirits, including redistillation as provided in [§ 19.314](/current/title-27/section-19.314); or
(b) Produce gin or vodka by other than original and continuous distillation.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201), [5555](https://www.govinfo.gov/link/uscode/26/5555))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. 196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
### Rules for Bottling, Packaging, and Removal of Products
#### § 19.351 Removals from processing.
(a) *Method of removal.* A proprietor may remove spirits or wines from the processing account in any approved bulk container, by pipeline, or in bulk conveyances in compliance with the provisions of this part. Spirits may be bottled and cased for removal.
(b) *Authorized removals from processing.* A proprietor may remove from processing:
(1) Spirits, upon tax determination or withdrawal under [26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214) or [26 U.S.C. 7510](https://www.govinfo.gov/link/uscode/26/7510);
(2) Spirits, to the production account at the same plant for redistillation;
(3) Bulk spirits, by transfer in bond to production or processing account at another distilled spirits plant for redistillation or further processing;
(4) Spirits or wines, for authorized voluntary destruction; or
(5) Wines, by transfer in bond to a bonded wine cellar or to another distilled spirits plant. However, wine may not be removed from the bonded premises of a distilled spirits plant for consumption or sale as wine.
(c) *Exception.* Except as provided in [paragraph (b)(2)](/current/title-27/section-19.351#p-19.351\(b\)\(2\)) and [(3)](/current/title-27/section-19.351#p-19.351\(b\)\(3\)) of this section, spirits may not be transferred from the processing account to the storage account.
([26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5006](https://www.govinfo.gov/link/uscode/26/5006), [5008](https://www.govinfo.gov/link/uscode/26/5008), [5201](https://www.govinfo.gov/link/uscode/26/5201), [5206](https://www.govinfo.gov/link/uscode/26/5206), [5212](https://www.govinfo.gov/link/uscode/26/5212), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5223](https://www.govinfo.gov/link/uscode/26/5223), [5362](https://www.govinfo.gov/link/uscode/26/5362))
#### § 19.352 Bottling tanks.
Generally, a proprietor must bottle all spirits from tanks that are listed in the notice of registration and have been certified as accurate. However, if a proprietor files a letterhead application and shows the need to do so, the appropriate TTB officer may authorize bottling from original packages, tank trucks, totes or special containers where it is not practical to use a bottling tank. In addition, a proprietor may bottle liqueurs directly from a tank truck or tote without applying for permission to TTB if the liqueurs are gauged prior to unloading and piped directly to the bottling line.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.353 Bottling tank gauge.
When a distilled spirits product is to be bottled or packaged, the proprietor must gauge the product after any filtering, reduction, or other treatment, and before bottling or packaging begins. The gauge must be made at labeling or package marking proof, subject to variations in accordance with the tolerances set forth in [§ 19.356(c)](/current/title-27/section-19.356#p-19.356\(c\)); however, the actual measurement of the gauge must be entered on the bottling and packaging record required in [§ 19.599](/current/title-27/section-19.599).
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-158, [86 FR 18726](https://www.federalregister.gov/citation/86-FR-18726), Apr. 2, 2020; [85 FR 20424](https://www.federalregister.gov/citation/85-FR-20424), Apr. 13, 2020]
#### § 19.354 Bottling or packaging records.
A proprietor must prepare a record for each batch of spirits bottled or packaged as provided in [§ 19.599](/current/title-27/section-19.599). A proprietor must keep a separate daily summary record of spirits bottled or packaged as provided in [§ 19.601](/current/title-27/section-19.601).
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201), [5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.355 Labels describing the spirits.
(a) Labels affixed to containers must accurately describe the spirits in the tanks from which the containers are filled. The proprietor's records must enable TTB officers to readily determine which label was used on any filled container.
(b) Additional information regarding labeling requirements is found in [subpart T of this part](/current/title-27/part-19/subpart-T) and [part 5 of this chapter](/current/title-27/part-5).
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.356 Alcohol content and fill.
(a) *General.* At representative intervals during bottling operations, a proprietor must examine and test bottled spirits to determine whether the alcohol content and quantity (fill) of those spirits agree with what is stated on the label or the bottle. A proprietor's test procedures must be adequate to ensure accuracy of labels on the bottled product. Proprietors must record the results of all tests of alcohol content and quantity (fill) in the record required by [§ 19.600](/current/title-27/section-19.600).
(b) *Variations in fill.* Quantity (fill) must be kept as close to 100 percent fill as the equipment and bottles in use will permit. There must be approximately the same number of overfills and underfills for each lot bottled. In no case will the quantity contained in a bottle vary from the quantity stated on the label or bottle by more than plus or minus:
(1) 1.5 percent for bottles 1.0 liter and above;
(2) 2.0 percent for bottles 999 mL through 376 mL;
(3) 3.0 percent for bottles 375 mL through 101 mL; or
(4) 4.5 percent for bottles 100 mL and below.
(c) *Variations in alcohol content.* Variations in alcohol content may not exceed 0.3 percent alcohol by volume above or below the alcohol content stated on the label.
(d) *Example.* Under [paragraph (c)](/current/title-27/section-19.356#p-19.356\(c\)) of this section, a product labeled as containing 40 percent alcohol by volume would be acceptable if the test for alcohol content found that it contained no less than 39.7 percent alcohol by volume and no more than 40.3 percent alcohol by volume.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201), [5301](https://www.govinfo.gov/link/uscode/26/5301))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-158, [85 FR 18726](https://www.federalregister.gov/citation/85-FR-18726), Apr. 2, 2020; [85 FR 20424](https://www.federalregister.gov/citation/85-FR-20424), Apr. 13, 2020]
#### § 19.357 Completion of bottling.
When the contents of a bottling tank are not completely bottled at the close of the day, the proprietor must make entries on the bottling and packaging record covering the total quantity bottled that day from the tank. Entries must be made not later than the morning of the following business day unless the proprietor maintains auxiliary or supplemental records as provided in [§ 19.580](/current/title-27/section-19.580).
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.358 Cases.
(a) On completion of bottling, a proprietor must place filled bottles with properly affixed closures in cases. A proprietor may only fill cases with the same kind, size, and proof of spirits. Normally, the cases must be sealed; however, cases may be temporarily retained on bonded premises without being sealed pending the affixing to bottles of any required labels, State stamps, or seals. Unsealed cases must be marked in accordance with [subpart S of this part](/current/title-27/part-19/subpart-S), and segregated from other cases until sealed. All cases must be sealed and marked as provided in [subpart S of this part](/current/title-27/part-19/subpart-S) before removal from the bonded premises.
(b) Filled bottles may remain on the bottling line at the end of the workday if the identical product will be bottled on the next bottling shift and if adequate security measures are in place to prevent theft.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201), [5206](https://www.govinfo.gov/link/uscode/26/5206))
#### § 19.359 Remnants.
When at the end of a bottling run fewer bottles remain than the number necessary to fill a case, the remaining bottles may be placed in a case marked as a remnant case or kept uncased on the bonded premises until spirits of the same kind are again bottled. The remnant bottles may later be used to complete the filling of a case, or may be used for another lawful purpose such as replacing accidental breakage occurring on bonded premises.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201), [5206](https://www.govinfo.gov/link/uscode/26/5206))
#### § 19.360 Filling packages.
A proprietor may draw spirits into packages from a tank meeting the requirements of [§§ 19.182](/current/title-27/section-19.182) through [19.184](/current/title-27/section-19.184). A proprietor must gauge the packages, report the details of the gauge on a package gauge record as provided in [§ 19.619](/current/title-27/section-19.619), and attach a copy of the package gauge record to each copy of the bottling and packaging record covering the product. The packages must be marked as provided in [subpart S of this part](/current/title-27/part-19/subpart-S).
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.361 Removals by bulk conveyances or pipelines.
(a) When a proprietor removes spirits from the processing account in bulk conveyances or by pipeline, the proprietor must record the removal on the bottling and packaging record.
(b) Transfers and withdrawals of bulk spirits from the processing account must be performed in accordance with the provisions of [subpart P of this part](/current/title-27/part-19/subpart-P).
(c) The consignor of the transfer must forward to the consignee a statement of composition or a copy of any formula under which the spirits were processed for determining the proper use of the spirits, or for the labeling of the finished product.
(d) Bulk conveyances must be marked as provided in subpart S this part.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.362 Rebottling.
When spirits are dumped for rebottling, the proprietor must prepare an appropriately modified bottling and packaging record. If the spirits were originally bottled by another proprietor, the rebottling proprietor must obtain a statement from the original bottler consenting to the rebottling.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.363 Reclosing and relabeling.
(a) A proprietor may reclose or relabel distilled spirits before removal from, or after return to, bonded premises. The reclosing or relabeling of spirits returned to bonded premises must be done immediately, and the spirits promptly removed.
(b) If the spirits were originally bottled by another proprietor, the relabeling proprietor must have on file a statement from the original bottler consenting to the relabeling.
(c) When spirits are relabeled, the proprietor must have a certificate of label approval or certificate of exemption from label approval issued under [part 5 of this chapter](/current/title-27/part-5) for the labels used on relabeled spirits.
(d) A proprietor must prepare a separate record under [§ 19.604](/current/title-27/section-19.604) for the relabeling or reclosing of spirits.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201), [5215](https://www.govinfo.gov/link/uscode/26/5215))
#### § 19.364 Bottled-in-bond spirits.
If a proprietor labels spirits as bottled-in-bond for domestic consumption the labels must meet the requirements in [part 5 of this chapter](/current/title-27/part-5) and the bottles must bear a closure or other device as required by [subpart T of this part](/current/title-27/part-19/subpart-T).
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.365 Spirits not originally intended for export.
Spirits produced in the United States and originally intended for domestic use may be exported with benefit of drawback or without payment of tax if the containers are marked as required by [part 28 of this chapter](/current/title-27/part-28). A proprietor may relabel the spirits to show any of the information required by [§ 19.519](/current/title-27/section-19.519). If a proprietor intends to file a claim for drawback on spirits prepared for export under this section, the proprietor must follow the provisions of [§ 28.195b of this chapter](/current/title-27/section-28.195b). If a proprietor intends to withdraw spirits without payment of tax for export, the proprietor must follow the procedures in [subpart E of part 28 of this chapter](/current/title-27/part-28/subpart-E).
([26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062), [5214](https://www.govinfo.gov/link/uscode/26/5214))
#### § 19.366 Alcohol.
(a) *Containers.* A proprietor may put alcohol for industrial use in bottles, packages, or other containers, subject to the provisions of [subpart S of this part](/current/title-27/part-19/subpart-S). A proprietor must follow the provisions of [subpart T of this part](/current/title-27/part-19/subpart-T) when bottling alcohol for nonindustrial domestic use.
(b) *Closures.* Closures or other devices must be affixed to containers of alcohol as provided in [subpart T of this part](/current/title-27/part-19/subpart-T).
(c) *Bottle labels.* All bottles of alcohol for industrial use must have a label that is securely affixed to the bottle showing the word “Alcohol” and the name and plant number of the bottler. The proprietor may place additional information on the label if it is not inconsistent with the required information.
(d) *Case marks.* Each case of bottled alcohol must bear the marks required by [subpart S of this part](/current/title-27/part-19/subpart-S).
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201), [5206](https://www.govinfo.gov/link/uscode/26/5206), [5235](https://www.govinfo.gov/link/uscode/26/5235), [5301](https://www.govinfo.gov/link/uscode/26/5301))
### Requirements for Processing Inventories
#### § 19.371 Inventories of wines and bulk spirits in processing.
A proprietor must take a physical inventory of all wines and bulk spirits (except packages) held in the processing account at the close of each calendar quarter. The results of the inventory must be recorded as provided in [subpart V of this part](/current/title-27/part-19/subpart-V). TTB may require additional inventories at any time.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.372 Physical inventories of bottled and packaged spirits.
(a) *Physical inventories.* Generally, a proprietor must take physical inventories of bottled and packaged spirits in the processing account for the return periods ending June 30 and December 31, and at any other time that the appropriate TTB officer requires. Physical inventories may be taken within a period of a few days before or after June 30 or December 31 if:
(1) The period does not include more than one complete weekend; and
(2) Necessary adjustments are made to the inventory record to reflect the actual quantities on hand June 30 or December 31.
(b) *Alternate dates.* On approval of an application filed with the appropriate TTB officer, required physical inventories may be taken on dates other than June 30 and December 31 if the dates established for taking such inventories:
(1) Coincide with the end of a return period, and
(2) Are approximately 6 months apart.
(c) *Waiver of physical inventory.* A proprietor may file an application to take only one physical inventory per year. The appropriate TTB officer may approve the application if she or he finds that only one physical inventory per year will be sufficient to protect the revenue. However, the requirement for the waived inventory may be reimposed if it becomes necessary for protection of the revenue.
(d) *Notification of physical inventory.* A proprietor must notify the appropriate TTB officer at least 5 business days in advance of the date and time of a physical inventory of bottled or packaged spirits. TTB officers may be assigned to verify or supervise physical inventories taken under the provisions of this section.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
## Subpart O—Denaturing Operations and Manufacture of Articles
#### § 19.381 General.
This subpart covers the denaturation of spirits and the manufacture of articles by proprietors of distilled spirits plants. Denatured spirits are distilled spirits that have been rendered unsuitable for beverage use by the addition of specific amounts of approved denaturing materials. For purposes of this subpart, articles are products that contain denatured spirits and that are made in accordance with this sub[part or part 20 of this chapter](/current/title-27/part-20). Proprietors who are qualified under this part as processors may make denatured spirits and articles in accordance with the provisions of this subpart. Additional requirements regarding the distribution, use, and standards for denatured spirits are set forth in [parts 20](/current/title-27/part-20) and [21 of this chapter](/current/title-27/part-21).
([26 U.S.C. 5178](https://www.govinfo.gov/link/uscode/26/5178), [5241](https://www.govinfo.gov/link/uscode/26/5241))
#### § 19.382 Formulas.
(a) *Approved formulas.* A proprietor must denature spirits according to an approved formula listed in [part 21 of this chapter](/current/title-27/part-21).
(b) *Alternate formulas and denaturants.* If a proprietor wishes to denature spirits by using an alternative formula or a different denaturant, the proprietor must apply to TTB for authorization. A proprietor must receive written approval from the appropriate TTB officer before denaturing spirits using an alternative formula or a different denaturant. See also [§§ 21.5](/current/title-27/section-21.5) and [21.91 of this chapter](/current/title-27/section-21.91) for additional requirements that apply in these circumstances.
([26 U.S.C. 5241](https://www.govinfo.gov/link/uscode/26/5241))
### Rules for Denaturing Spirits and Testing Denaturants
#### § 19.383 Gauging for denaturation.
(a) *General.* A proprietor must gauge spirits before denaturation and after denaturation and must record each gauge in the record of denaturation required by [§ 19.606(b)](/current/title-27/section-19.606#p-19.606\(b\)). However, a proprietor is not required to gauge either spirits that are dumped from previously gauged containers or spirits that are transferred directly to mixing tanks from gauge tanks where they were gauged. Measurements of spirits and denaturants may be made by volume, weight, accurate mass flow meter, or by any other device that has been approved by the appropriate TTB officer.
(b) *Denaturation and article manufacture in a single process.* When a proprietor both denatures spirits and manufactures articles in a single, unified process, the proprietor may, in place of the procedure specified in [paragraph (a)](/current/title-27/section-19.383#p-19.383\(a\)) of this section, gauge the spirits before and after denaturation in the following manner:
(1) Gauge the spirits to be denatured by volume, weight, accurate mass flow meter, or other device or method approved by the appropriate TTB officer;
(2) Gauge the denaturants to be used by volume, weight, accurate mass flow meter, or other device approved by the appropriate TTB officer; and
(3) Compute the number of wine gallons of denatured spirits produced, and enter this figure in the record required by [§ 19.606(b)](/current/title-27/section-19.606#p-19.606\(b\)). In calculating the amount of denatured spirits produced, the proprietor must not include in the calculation the amount of additional chemicals or denaturants used for article manufacture.
([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204), [5241](https://www.govinfo.gov/link/uscode/26/5241))
#### § 19.384 Adding denaturants to spirits.
(a) When making denatured spirits, a proprietor must mix the denaturants and spirits only in packages, tanks or bulk conveyances and only on bonded premises. A proprietor must thoroughly mix the denaturants with the spirits to ensure that all of the spirits are effectively denatured.
(b) If a proprietor wishes to use another method of mixing denaturants and spirits not prescribed in this subpart, the proprietor must submit to the appropriate TTB officer a written application for approval of the alternative method in accordance with [§ 19.27](/current/title-27/section-19.27). TTB may require that the proprietor submit additional information, including a flow diagram or other graphic representation of the alternative method, in support of the application.
([26 U.S.C. 5242](https://www.govinfo.gov/link/uscode/26/5242))
#### § 19.385 Making alcohol or water solutions of denaturants.
If a proprietor uses a denaturant that is difficult to dissolve in spirits at normal working temperatures, that is highly volatile, or that becomes solid at normal working temperature, the proprietor may liquefy or dissolve the denaturant in a small amount of spirits or water prior to its use in the production of denatured spirits. However, the proof of the denatured spirits produced must not fall below the proof required by the approved formula. In addition, if alcohol is used as a solvent, the proprietor must include this additional alcohol in calculating the total quantity of spirits denatured in the batch.
([26 U.S.C. 5242](https://www.govinfo.gov/link/uscode/26/5242))
#### § 19.386 Adjusting pH of denatured spirits.
A proprietor may add trace amounts of acidic or caustic chemical compounds to adjust or neutralize the pH of denatured spirits. However, a proprietor may not adjust the pH with any substance that will counteract or reduce the effect of the denaturants. A proprietor who adjusts the pH of denatured spirits must keep a record of the adjustment with reference to the formula number of the treated denatured spirits. The record must include the kinds and quantities of chemical compounds used for each batch of denatured spirits treated.
([26 U.S.C. 5241](https://www.govinfo.gov/link/uscode/26/5241), [5242](https://www.govinfo.gov/link/uscode/26/5242))
#### § 19.387 Ensuring the quality of denaturants.
(a) *General.* Proprietors must ensure that the materials they receive for use in denaturing conform to the specifications prescribed in [part 21 of this chapter](/current/title-27/part-21). In addition, the appropriate TTB officer may require that a proprietor test the quality of denaturants at any time.
(b) *Testing.* A proprietor must comply with the following when testing a lot of denaturants:
(1) Sampling denaturants. Proprietors must use good commercial practice when taking samples of denaturants for quality assurance testing. Samples of denaturants must be representative of the lot being sampled.
(2) *Third party testing.* A proprietor may employ an outside laboratory or other appropriate third party to test samples of denaturants. In the case of a third party test, the proprietor must obtain a copy of the analysis or statement of findings signed by the chemist who performed the test. On request, the proprietor must provide to the appropriate TTB officer samples of denaturants for quality control testing in a Government laboratory.
(c) *Substandard denaturants.* If TTB or a proprietor finds that a material does not conform to the specifications for a denaturant prescribed in [part 21 of this chapter](/current/title-27/part-21), the proprietor must immediately terminate use of the substandard material as a denaturant. However, the proprietor may continue to use the material as a denaturant after treating or reprocessing the substandard material to correct the deficiency and bring the material into conformity with the applicable specifications.
([26 U.S.C. 5242](https://www.govinfo.gov/link/uscode/26/5242))
### Rules for Storing Denatured Spirits and Filling Containers
#### § 19.388 Storing denatured spirits.
(a) *Bonded storage.* A proprietor must store on bonded premises all denatured spirits produced, received in bond, or received by return to bond.
(b) *Storage methods.* A proprietor may store denatured spirits on bonded premises in any appropriate tank, package or container authorized for filling with denatured spirits. The proprietor must store containers of denatured spirits in a manner that allows for easy inspection and inventory of the denatured spirits by TTB officers. A proprietor must store portable containers of denatured spirits within a building or structure that protects the spirits from unauthorized access. A proprietor may apply to the appropriate TTB officer for authorization to store containers of denatured spirits in an alternative manner in accordance with [§ 19.27](/current/title-27/section-19.27).
(c) *Tank Records.* A proprietor must maintain a record for tanks in which denatured spirits are stored in accordance with [§ 19.606](/current/title-27/section-19.606).
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.389 Filling containers from tanks.
(a) *Filling portable containers.* A proprietor may fill portable containers with denatured spirits from tanks on the bonded premises.
(b) *Accounting for denatured spirits in filling operations.* In performing filling operations under [paragraph (a)](/current/title-27/section-19.389#p-19.389\(a\)) of this section, a proprietor must:
(1) Gauge the denatured spirits remaining in the tanks at the end of each filling operation;
(2) Maintain a record of each gauge and document the quantity of denatured spirits drawn from the tank during each filling operation; and
(3) Make a record of any spirits lost during the filling operation.
(c) *Gauging requirements.* The provisions of [§ 19.289(a)](/current/title-27/section-19.289#p-19.289\(a\)) and [(c)](/current/title-27/section-19.289#p-19.289\(c\)) apply to the filling and gauging of portable containers. In addition, a proprietor may withdraw denatured spirits from the bonded premises in portable containers based on the filling gauge.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.390 Container marking requirements.
A proprietor must mark packages and portable containers containing denatured spirits in accordance with the requirements of [subpart S of this part](/current/title-27/part-19/subpart-S).
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206))
### Rules for Mixing and Converting Denatured Spirits
#### § 19.391 Mixing denatured spirits.
(a) *Spirits of the same formula.* If a proprietor has two or more different batches of denatured spirits produced under the same formula, the proprietor may mix them on bonded premises.
(b) *Spirits of different formulas.* A proprietor may mix denatured spirits produced under different formulas on bonded premises for immediate redistillation at the same plant or at another plant subject to the provisions of [§§ 19.314](/current/title-27/section-19.314), [19.315](/current/title-27/section-19.315), and [19.316](/current/title-27/section-19.316).
([26 U.S.C. 5241](https://www.govinfo.gov/link/uscode/26/5241), [5242](https://www.govinfo.gov/link/uscode/26/5242))
#### § 19.392 Converting denatured alcohol to a different formula.
(a) *General.* A proprietor may convert specially denatured alcohol (SDA) from one formula of SDA to another formula of SDA if the resultant mixture contains only alcohol and the denaturants listed for an approved SDA formula and in the correct concentrations, as set forth in [part 21 of this chapter](/current/title-27/part-21). Such converted SDA may be used only as authorized in [part 21 of this chapter](/current/title-27/part-21).
(b) *Converting SDA to SDA Formula No. 1* —
(1) *All SDA other than SDA Formulas No. 3-A and No. 30.* A proprietor may convert any SDA, other than SDA produced under Formulas No. 3-A and No. 30, into SDA Formula No. 1 by adding methyl alcohol and any one of the other alternative denaturants listed in [§ 21.32 of this chapter](/current/title-27/section-21.32) in accordance with the formulation prescribed in that section.
(2) *SDA Formulas No. 3-A and No. 30.* SDA Formulas No. 3-A and No. 30 specify more methyl alcohol than is specified for SDA Formula No. 1. Therefore, in order to convert SDA produced under Formulas No. 3-A or No. 30 into SDA under Formula No. 1, a proprietor must first add a sufficient amount of ethyl alcohol to the SDA in question to bring the methyl alcohol content to the proportion prescribed for SDA Formula No. 1. After adjusting the proportion of methyl alcohol, the proprietor must add the specified amount of any one of the other alternative denaturants listed in [§ 21.32 of this chapter](/current/title-27/section-21.32).
(c) *Converting SDA to SDA Formula No. 29.* A proprietor may convert any SDA into SDA Formula No. 29 by adding the amount of acetaldehyde or ethyl acetate specified in [§ 21.56 of this chapter](/current/title-27/section-21.56). However, due to the presence of other denaturants from the original formula, SDA under Formula No. 29 that has been converted from another SDA formula may be used only as authorized in [§ 21.56(b)](/current/title-27/section-21.56#p-21.56\(b\)) but not in the manufacture of vinegar, drugs or medicinal chemicals, and the conditions governing use provided in [§ 21.56(c)](/current/title-27/section-21.56#p-21.56\(c\)) will apply.
(d) *Other conversions of SDA.* If a proprietor wishes to make an SDA formula conversion other than one authorized in [paragraph (a)](/current/title-27/section-19.392#p-19.392\(a\)), [(b)](/current/title-27/section-19.392#p-19.392\(b\)), or [(c)](/current/title-27/section-19.392#p-19.392\(c\)) of this section, the proprietor must obtain approval from the appropriate TTB officer prior to the conversion.
(e) *Conversions to completely denatured alcohol.* A proprietor may convert any SDA from a formula that does not contain methyl alcohol or wood alcohol to any one of the completely denatured alcohol (CDA) formulas prescribed in [subpart C of part 21 of this chapter](/current/title-27/part-21/subpart-C), by adding the denaturants specified for CDA.
([26 U.S.C. 5242](https://www.govinfo.gov/link/uscode/26/5242))
### Rules for Restoration and Redenaturation, Inventories, and Manufacture of Articles; Records Required
#### § 19.393 Restoration and redenaturation of recovered denatured spirits and recovered articles.
(a) *Recovered denatured spirits and articles.* A proprietor may receive recovered denatured spirits and recovered articles on bonded premises for restoration (including redistillation, if necessary), or redenaturation, or both, as provided in [subpart Q of this part](/current/title-27/part-19/subpart-Q). However, the proprietor may not withdraw the spirits from bonded premises except for industrial use or after redenaturation.
(b) *Spirits or articles retaining some denaturants.* If recovered denatured spirits or recovered articles are to be redenatured and do not require the full amount of denaturants for redenaturation, the proprietor must make an entry to that effect in the record of denaturation required by [§ 19.606(b)](/current/title-27/section-19.606#p-19.606\(b\)).
([26 U.S.C. 5242](https://www.govinfo.gov/link/uscode/26/5242))
#### § 19.394 Inventory of denatured spirits.
A proprietor must take a physical inventory of all denatured spirits in the processing account at the close of each calendar quarter. The proprietor must record the results of that inventory as provided in [subpart V of this part](/current/title-27/part-19/subpart-V). TTB may require additional inventories at any time.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.395 Manufacture of articles.
A proprietor must manufacture, label, mark and dispose of articles in accordance with [part 20 of this chapter](/current/title-27/part-20).
([26 U.S.C. 5273](https://www.govinfo.gov/link/uscode/26/5273))
#### § 19.396 Required records.
(a) *Records of denaturing operations.* A proprietor who denatures spirits must maintain daily records of denaturing operations in accordance with [§ 19.606](/current/title-27/section-19.606).
(b) *Records of manufacture of articles.* A proprietor who manufactures articles must maintain daily records in accordance with [§ 19.607](/current/title-27/section-19.607).
([26 U.S.C. 5241](https://www.govinfo.gov/link/uscode/26/5241))
## Subpart P—Transfers, Receipts, and Withdrawals
#### § 19.401 Authorized transactions.
(a) *General.* A proprietor of a distilled spirits plant may transfer spirits and wines in bond to other distilled spirits plants, receive spirits and wines in bond from other distilled spirits plants, receive spirits from customs custody, and withdraw spirits from the distilled spirits plant without payment of tax or free of tax under certain conditions. This subpart sets forth the rules that a proprietor must follow when so transferring, receiving, or withdrawing spirits and wines and also includes related rules for taking samples and securing conveyances.
(b) *Other transfers and withdrawals.* For withdrawals of spirits from bonded premises on determination or payment of tax, see [subpart I of this part](/current/title-27/part-19/subpart-I). For rules regarding withdrawals for exportation and transfers to foreign trade zones or to customs bonded warehouses, see [part 28 of this chapter](/current/title-27/part-28).
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), [5212](https://www.govinfo.gov/link/uscode/26/5212), [5213](https://www.govinfo.gov/link/uscode/26/5213), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5232](https://www.govinfo.gov/link/uscode/26/5232), [5362](https://www.govinfo.gov/link/uscode/26/5362), [5373](https://www.govinfo.gov/link/uscode/26/5373))
### Transfers Between Bonded Premises
#### § 19.402 Authorized transfers in bond.
The IRC allows a proprietor to transfer and receive spirits, wines, and industrial alcohol as provided in [paragraphs (a)](/current/title-27/section-19.402#p-19.402\(a\)) through [(c)](/current/title-27/section-19.402#p-19.402\(c\)) of this section.
(a) *Spirits.* Bulk spirits or denatured spirits may be transferred in bond between the bonded premises of plants qualified under [26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171) or [26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181) in accordance with [§§ 19.403](/current/title-27/section-19.403) and [19.733](/current/title-27/section-19.733). However, spirits or denatured spirits produced from petroleum, natural gas, or coal may not be transferred to alcohol fuel plants.
(b) *Wine.* Wines may be transferred:
(1) From a bonded wine cellar to the bonded premises of a distilled spirits plant;
(2) From the bonded premises of a distilled spirits plant to a bonded wine cellar; and
(3) Between the bonded premises of distilled spirits plants.
(c) *Alcohol for industrial purposes.* Alcohol bottled for industrial purposes in accordance with [§ 19.366](/current/title-27/section-19.366) and [subpart S of this part](/current/title-27/part-19/subpart-S), may be transferred between the bonded premises of distilled spirits plants in the same manner as provided in [§§ 19.403](/current/title-27/section-19.403) through [19.407](/current/title-27/section-19.407) for bulk distilled spirits.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), [5212](https://www.govinfo.gov/link/uscode/26/5212), [5362](https://www.govinfo.gov/link/uscode/26/5362))
#### § 19.403 Application to receive spirits in bond.
(a) When the proprietor of a distilled spirits plant qualified under [26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171) or of an alcohol fuel plant qualified under [26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181) wishes to have spirits or denatured spirits transferred in bond to their plant from another distilled spirits plant, the proprietor must complete an application on form TTB F 5100.16, Application for Transfer of Spirits and/or Denatured Spirits in Bond, in triplicate, and forward it to the appropriate TTB officer for approval. A proprietor is not required to submit an application on TTB F 5100.16 for transfers from customs custody under [26 U.S.C. 5232](https://www.govinfo.gov/link/uscode/26/5232).
(b) Except to the extent the proprietor is not required to provide a bond under [§ 19.151(d)](/current/title-27/section-19.151#p-19.151\(d\)), TTB will not approve the application submitted under [paragraph (a)](/current/title-27/section-19.403#p-19.403\(a\)) of this section unless the proprietor's operations bond or unit bond either is in the maximum penal sum amount or is sufficient to cover the tax on the spirits or denatured spirits to be transferred in addition to all other liabilities chargeable against the bond. If TTB approves the application, TTB will return two signed copies of the approved application to the proprietor.
(c) Upon receipt of an approved application from TTB, the proprietor must retain one of the signed copies for their files and forward the other signed copy to the consignor that will ship the spirits or denatured spirits.
([26 U.S.C. 5005](https://www.govinfo.gov/link/uscode/26/5005), [5112](https://www.govinfo.gov/link/uscode/26/5112))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1123](https://www.federalregister.gov/citation/82-FR-1123), Jan. 4, 2017; T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
#### § 19.404 Termination of application.
A proprietor may at any time terminate an approved application on form TTB F 5100.16 by retrieving the consignor's copy and returning it together with their own approved copy to the appropriate TTB officer for cancellation.
([26 U.S.C. 5005](https://www.govinfo.gov/link/uscode/26/5005))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-196, Nov. 6, 2024]
#### § 19.405 Consignor for in-bond shipments.
(a) *General.* A proprietor who ships spirits, denatured spirits, or wines by transfer in bond is the “consignor” of the shipment for purposes of this part. The following rules apply to these transfers:
(1) A consignor who is a proprietor of a distilled spirits plant must prepare a transfer record in accordance with [§ 19.620](/current/title-27/section-19.620) to cover the transfer in bond of—
(i) Spirits or denatured spirits to another distilled spirits plant pursuant to an approved application on form TTB F 5100.16, Application for Transfer of Spirits and/or Denatured Spirits in Bond;
(ii) Wine to the bonded premises of a distilled spirits plant or a bonded wine cellar; or
(iii) Spirits or denatured spirits to an alcohol fuel plant pursuant to an approved application on TTB F 5100.16, Application for Transfer of Spirits and/or Denatured Spirits in Bond; and
(2) A consignor who is a proprietor of an alcohol fuel plant must prepare a transfer record in accordance with [§ 19.620](/current/title-27/section-19.620) to cover the transfer in bond of spirits to the bonded premises of a distilled spirits plant pursuant to an approved application on TTB F 5100.16.
(b) *Disposition of the transfer record.* On completion of lading or transfer by pipeline, the consignor must retain one copy of the transfer record and one copy of any accompanying document and must forward the original transfer record and any accompanying document to the consignee. If the shipment is made by truck, the original transfer record and accompanying documents must accompany the shipment.
(c) *Multiple shipments.* As a general rule, a consignor must prepare a transfer record for each conveyance. However, a consignor may prepare a single transfer record that covers all packages of spirits shipped by truck on the same day to the same plant. In such a case, the consignor must prepare a shipment and delivery order for each shipment showing the number of packages, their serial numbers or other package identification, the name of the producer, warehouseman, or processor, and the serial numbers of any seals or other security devices applied to the truck. The shipping and delivery order must be properly authenticated by the consignor and must constitute a complete record of the spirits transferred in each truck each day. The consignor must retain a copy of each shipping and delivery order. After lading the last truck for the day, the consignor must retain one copy of the single transfer record and one copy of any accompanying document and forward the original single transfer record and accompanying document to the consignee.
(d) *Packages.* When a consignor transfers spirits in packages, the consignor must weigh each package except in the following circumstances:
(1) When transferring the spirits in a secured conveyance;
(2) When the consignor has securely sealed the individual packages; or
(3) When the appropriate TTB officer waives this requirement upon a finding that there will be no jeopardy to the revenue.
(e) *Temporary serial numbers.* When packages are weighed at the time of shipment, the consignor must assign temporary serial numbers to the packages and show for each package its gross shipment weight on a package gauge record prepared in accordance with [§ 19.619](/current/title-27/section-19.619). A copy of the package gauge record must accompany each original or copy of the transfer record.
(f) *Bulk conveyances and pipelines.* When a consignor transfers spirits, denatured spirits, or wines in bulk conveyances or by pipelines, the consignor must gauge the spirits, denatured spirits, or wines and record the quantity determined on the transfer record required under [§ 19.620](/current/title-27/section-19.620) or [§ 24.309 of this chapter](/current/title-27/section-24.309). The consignor must secure bulk conveyances of spirits or denatured spirits pursuant to [§ 19.441 of this part](/current/title-27/part-19/section-19.441).
([26 U.S.C. 5212](https://www.govinfo.gov/link/uscode/26/5212), [5362](https://www.govinfo.gov/link/uscode/26/5362))
#### § 19.406 Reconsignment of in-bond shipments.
A consignor may reconsign an in-bond shipment of spirits, denatured spirits, or wines prior to, or upon, arrival of the shipment at the premises of the consignee for any good faith reason. The consignor may reconsign the shipment to himself or to another consignee who is qualified to receive the shipment and has an adequate bond. In either case, an Application for Transfer of Spirits and/or Denatured Spirits in Bond on form TTB F 5100.16 must have been previously approved for the new consignee, except that an approved TTB F 5100.16 is not required for the transfer of wine. The bond of the new consignee will cover the shipment while in transit after reconsignment. When a consignor reconsigns a shipment, the consignor must prepare a new transfer record prominently marked with the word “Reconsignment”. The consignor must also notify the original consignee that the transfer has been cancelled.
([26 U.S.C. 5212](https://www.govinfo.gov/link/uscode/26/5212), [5362](https://www.govinfo.gov/link/uscode/26/5362))
#### § 19.407 Consignee premises.
(a) *General.* A proprietor who receives spirits, denatured spirits, or wines by transfer in bond is the “consignee” of the shipment for purposes of this part. Upon arrival of an in-bond shipment at the consignee's premises or at the destination point specified in the carrier's transportation documents, the consignee must:
(1) Examine each conveyance to determine whether the securing devices, if any, are intact upon arrival. If the securing devices are not intact, the consignee must immediately notify the appropriate TTB officer before removal of any spirits from the conveyance;
(2) Determine, record, and report any losses as required by [subpart R of this part](/current/title-27/part-19/subpart-R);
(3) Acknowledge receipt of the shipment on the transfer record as required by [§ 19.621](/current/title-27/section-19.621) or [§ 24.309 of this chapter](/current/title-27/section-24.309) and retain the original of the transfer record and any accompanying documents for their files. Retained copies of transfer records will become deposit records for purposes of this part; and
(4) Identify separately any spirits that were produced at an alcohol fuel plant. Those spirits may not be withdrawn, used, sold or otherwise disposed of for other than fuel use.
(b) *Packages.* When a consignee receives spirits in packages, the consignee must weigh each package. The consignee must record the receiving weight of each package on the accompanying package gauge record or on a list according to temporary package serial numbers prepared by the consignor. A copy of the package gauge record or list must remain with the original transfer record. However, the consignee is not required to weigh each package when:
(1) The transfer is made in a secured conveyance and the securing devices are intact on arrival;
(2) The individual packages were sealed by the consignor and are intact on arrival; or
(3) The requirement for weighing the packages at the consignor's premises has been waived under [§ 19.405(d)(3)](/current/title-27/section-19.405#p-19.405\(d\)\(3\)).
(c) *Bulk conveyances and pipelines.* When a consignee receives spirits, denatured spirits, or wines by bulk conveyance or by pipeline, the consignee must:
(1) Make a gauge and record the results on the transfer record in accordance with [§ 19.621](/current/title-27/section-19.621) or [§ 24.309 of this chapter](/current/title-27/section-24.309). However, the appropriate TTB officer may waive the gauging requirement for receipts by pipeline upon a finding that there will be no jeopardy to the revenue; and
(2) Ensure that each conveyance is empty and has been thoroughly drained.
([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204), [5213](https://www.govinfo.gov/link/uscode/26/5213), [5362](https://www.govinfo.gov/link/uscode/26/5362))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
### Receipt of Spirits from Customs Custody
#### § 19.409 General.
A proprietor may withdraw from customs custody spirits imported or brought into the United States in bulk containers for transfer of those spirits without payment of tax to the bonded premises of the proprietor's distilled spirits plant. The proprietor may receive these spirits either in bulk containers or by pipeline. Spirits received on bonded premises under this section may be:
(a) Withdrawn for any purpose authorized by chapter 51 of the IRC in the same manner as domestic spirits; or
(b) Redistilled or denatured only at 185° or more of proof. For the requirements regarding transfers of bulk spirits from customs custody to the bonded premises of a distilled spirits plant, see [subpart L of part 27 of this chapter](/current/title-27/part-27/subpart-L).
([26 U.S.C. 5232](https://www.govinfo.gov/link/uscode/26/5232))
#### § 19.410 Age and fill date.
For purposes of this part, the age and fill date for spirits imported or brought into the United States will be:
(a) The claimed age, as shown on the documentation required under [part 5 of this chapter](/current/title-27/part-5); and
(b) The date that packages of spirits are released from customs custody or are filled on the bonded premises of a distilled spirits plant.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.411 Recording gauge.
(a) *Receipts into storage.* When a proprietor receives into the storage account packages of spirits from customs custody, the proprietor must use the last official gauge to compute and record the average content of the packages received in the storage records required under [§ 19.590](/current/title-27/section-19.590). That gauge also will constitute the basis for entries on the package summary records required under [§ 19.591](/current/title-27/section-19.591). If the last official gauge indicates a substantial variation in the contents of the packages, the proprietor must group the packages into lots according to their approximate contents and assign a separate lot identification to each group of packages, based on the date the packages were received on bonded premises.
(b) *Receipts into processing.* When a proprietor receives into the processing account packages of spirits from customs custody the proprietor must determine the proof gallons of spirits received in each package. The determination may be made by using the last official gauge.
([26 U.S.C. 5232](https://www.govinfo.gov/link/uscode/26/5232))
#### § 19.412 Importation of denatured spirits.
For provisions relating to the importation of denatured spirits, see [§ 27.222 of this chapter](/current/title-27/section-27.222).
\[T.D. TTB-140, [81 FR 59455](https://www.federalregister.gov/citation/81-FR-59455), Aug. 30, 2016]
### Marking Requirements for Imported Spirits
#### § 19.414 Marks on containers of imported spirits.
(a) *General.* Except as provided in [paragraph (c)](/current/title-27/section-19.414#p-19.414\(c\)) of this section, when a proprietor receives imported bulk containers of spirits on bonded premises under [§ 19.409](/current/title-27/section-19.409) or fills packages from imported bulk containers on the proprietor's bonded premises, each container or filled package must be marked with:
(1) The name of the importer;
(2) The country of origin of the spirits;
(3) The kind of spirits;
(4) In the case of filled packages, the package identification number as required under [§ 19.485](/current/title-27/section-19.485) or the package serial number as required under [§ 19.490](/current/title-27/section-19.490). Package identification numbers and package serial numbers must be preceded by the symbol “IMP”;
(5) If the package is filled on bonded premises, the date of fill;
(6) The proof; and
(7) The proof gallons of spirits in the package.
(b) *Responsibility for marks.* Except as otherwise provided in [paragraph (c)](/current/title-27/section-19.414#p-19.414\(c\)) of this section, the proprietor who receives packages of imported spirits under [§ 19.409](/current/title-27/section-19.409) is responsible for ensuring that the required marks are placed on the packages and for preparing the required deposit records.
(c) *Exception.* A proprietor is not required to place or ensure the placement of prescribed marks on packages when the spirits will be removed from the packages within 30 days after receipt at the distilled spirits plant. However, the proprietor must still assign package identification numbers or package serial numbers for use on deposit records and other transaction forms, records, or reports.
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206))
#### § 19.415 Marks on containers of Puerto Rican and Virgin Islands spirits.
(a) *Packages from Puerto Rico.* When a proprietor receives packages of Puerto Rican spirits on bonded premises under the provisions of this subpart, the markings required under [§ 26.40 of this chapter](/current/title-27/section-26.40) will be acceptable in place of the markings required under [§ 19.414](/current/title-27/section-19.414). However, the proprietor still must mark each package to show the date of fill as required under [§ 19.410](/current/title-27/section-19.410), and must include on each package the words “Puerto Rican” or the abbreviation “P.R.”.
(b) *Packages from the Virgin Islands.* When a proprietor receives packages of Virgin Islands spirits on bonded premises under the provisions of this subpart, the markings required under [§ 26.206 of this chapter](/current/title-27/section-26.206) will be acceptable in place of the markings required under [§ 19.414](/current/title-27/section-19.414). However, the proprietor still must mark each package to show the date of fill as required under [§ 19.410](/current/title-27/section-19.410), and must include on each package the words “Virgin Islands” or the abbreviation “V.I.”.
(c) *Portable bulk containers.* Portable bulk containers of Puerto Rican or Virgin Islands spirits that are filled on bonded premises must be marked in accordance with [§ 19.484](/current/title-27/section-19.484). In addition, those containers must be marked with the serial number of any approved formula under which they were produced and with the words “Puerto Rican” or the abbreviation “P.R.” or “Virgin Islands” or the “V.I.”, as applicable.
(d) *Cases of bottled alcohol.* Alcohol from Puerto Rico or the Virgin Islands that is bottled and cased on bonded premises must be marked as required by [§ 19.496](/current/title-27/section-19.496). In addition, the words “Puerto Rican” or “Virgin Islands” or the abbreviation “P.R.” or “V.I.”, respectively, must precede the word “alcohol” designation on the cases.
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206), [5235](https://www.govinfo.gov/link/uscode/26/5235))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1123](https://www.federalregister.gov/citation/82-FR-1123), Jan. 4, 2017]
### Spirits Withdrawn Without Payment of Tax
#### § 19.418 Authorized withdrawals without payment of tax.
(a) A proprietor may withdraw spirits from bonded premises without payment of tax for:
(1) Export, as authorized under [26 U.S.C. 5214(a)(4)](https://www.govinfo.gov/link/uscode/26/5214);
(2) Transfer to customs manufacturing bonded warehouses, as authorized under [19 U.S.C. 1311](https://www.govinfo.gov/link/uscode/19/1311);
(3) Transfer to foreign trade zones, as authorized under [19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c);
(4) Supplies for certain vessels and aircraft, as authorized under [19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309);
(5) Transfer to customs bonded warehouses, as authorized under [26 U.S.C. 5066](https://www.govinfo.gov/link/uscode/26/5066) or [5214(a)(9)](https://www.govinfo.gov/link/uscode/26/5214);
(6) Use in wine production, as authorized under [26 U.S.C. 5373](https://www.govinfo.gov/link/uscode/26/5373);
(7) Transfer to any university, college of learning, or institution of scientific research for experimental or research use as authorized under [26 U.S.C. 5312(a)](https://www.govinfo.gov/link/uscode/26/5312);
(8) Research, development or testing, as authorized under [26 U.S.C. 5214(a)(10)](https://www.govinfo.gov/link/uscode/26/5214); or,
(9) Use on bonded wine cellar premises in the production of wine and wine products which will be rendered unfit for beverage use, as authorized under [26 U.S.C. 5362(d)](https://www.govinfo.gov/link/uscode/26/5362).
(b) If a proprietor withdraws spirits for any of the purposes listed under [paragraphs (a)(1)](/current/title-27/section-19.418#p-19.418\(a\)\(1\)) through [(a)(5)](/current/title-27/section-19.418#p-19.418\(a\)\(5\)) of this section, the proprietor must do so in accordance with the provisions of [part 28 of this chapter](/current/title-27/part-28).
([19 U.S.C. 1311](https://www.govinfo.gov/link/uscode/19/1311));
([26 U.S.C. 5066](https://www.govinfo.gov/link/uscode/26/5066), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5312](https://www.govinfo.gov/link/uscode/26/5312), [5373](https://www.govinfo.gov/link/uscode/26/5373))
#### § 19.419 Withdrawals of spirits for use in wine production.
A proprietor may withdraw wine spirits without payment of tax for transfer in bond to a bonded wine cellar for use in wine production. The proprietor, as consignor, must prepare a transfer record in accordance with [§ 19.620](/current/title-27/section-19.620). In addition, the proprietor must prepare a package gauge record in accordance with [§ 19.619](/current/title-27/section-19.619) and must attach it to the transfer record, unless the wine spirits are already in packages and are being withdrawn on the production or filling gauge.
([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214), [5373](https://www.govinfo.gov/link/uscode/26/5373))
#### § 19.420 Withdrawals of spirits without payment of tax for experimental or research use.
A scientific university, college of learning, or institution of scientific research qualified under [§ 19.35](/current/title-27/section-19.35) may withdraw spirits from bonded premises without payment of tax for experimental or research use. In order to withdraw a specific quantity of spirits for experimental or research use, the qualified institution must file a letterhead application with, and receive written approval from, the appropriate TTB officer.
([26 U.S.C. 5312](https://www.govinfo.gov/link/uscode/26/5312))
#### § 19.421 Withdrawals of spirits for use in production of nonbeverage wine and nonbeverage wine products.
A proprietor may withdraw spirits without payment of tax for transfer to a bonded wine cellar for use in the production of nonbeverage wine and nonbeverage wine products in accordance with [part 24 of this chapter](/current/title-27/part-24). The proprietor, as consignor, must prepare a transfer record in accordance with [§ 19.620](/current/title-27/section-19.620). In addition, the proprietor must prepare a package gauge record in accordance with [§ 19.619](/current/title-27/section-19.619) and must attach it to the transfer record, unless the wine spirits are already in packages and are being withdrawn on the production or filling gauge.
([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214))
### Spirits Withdrawn Free of Tax
#### § 19.424 Authorized withdrawals free of tax.
A proprietor may withdraw spirits from bonded premises free of tax as provided in this chapter:
(a) Upon receipt of a signed photocopy of a permit to withdraw and use alcohol free of tax issued on form TTB F 5150.9 under [part 22 of this chapter](/current/title-27/part-22);
(b) Upon receipt of a signed photocopy of a permit to procure spirits free of tax for use of the United States or any governmental agency, any State, any political division of a State, or the District of Columbia for nonbeverage purposes as provided in [26 U.S.C. 5214(a)(2)](https://www.govinfo.gov/link/uscode/26/5214) issued on form TTB F 5150.33 under [part 22 of this chapter](/current/title-27/part-22);
(c) Upon receipt of a valid permit issued under this part to procure spirits by and for the use of the United States under the provisions of [26 U.S.C. 7510](https://www.govinfo.gov/link/uscode/26/7510) for purposes other than those specified in [paragraph (b)](/current/title-27/section-19.424#p-19.424\(b\)) of this section;
(d) If the spirits are specially denatured—
(1) Upon receipt of a signed photocopy of a permit to procure specially denatured spirits issued on TTB F 5150.9 under [part 20 of this chapter](/current/title-27/part-20); or
(2) For export;
(e) If the spirits are completely denatured, for any lawful purpose; or
(f) If the spirits are contained in an article.
([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214), [7510](https://www.govinfo.gov/link/uscode/26/7510))
#### § 19.425 Withdrawal of spirits free of tax.
When a proprietor ships tax-free spirits to a permit holder as provided under [§ 19.424](/current/title-27/section-19.424), the proprietor must:
(a) Ship the spirits to the consignee designated in the permit;
(b) Ship the spirits in approved containers;
(c) Gauge each container, unless the spirits are in cases or are withdrawn based on the production or filling gauge;
(d) Prepare a package gauge record in accordance with [§ 19.619](/current/title-27/section-19.619), and attach it to the record of shipment if the spirits are in packages that are to be gauged;
(e) Prepare a record of shipment (shipping invoice, bill of lading, or other document serving the same purpose) for each shipment and forward the original to the consignee as provided in [§ 19.625](/current/title-27/section-19.625); and
(f) Secure all bulk conveyances as provided in [§ 19.441](/current/title-27/section-19.441).
([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214))
#### § 19.426 Withdrawal of spirits by the United States.
(a) *Withdrawal for nonbeverage use* —
(1) *Permit required.* Agencies of the United States Government that wish to obtain either specially denatured spirits or spirits free of tax for nonbeverage purposes must apply for and receive a permit on form TTB F 5150.33 or must have a previously issued permit on ATF Form 1444. TTB issues permits to Government agencies for:
(i) Withdrawal and use of specially denatured spirits under [part 20 of this chapter](/current/title-27/part-20);
(ii) Withdrawal and use of alcohol free of tax for nonbeverage purposes under [part 22 of this chapter](/current/title-27/part-22); and
(iii) Importation and use of alcohol free of tax for nonbeverage purposes under [part 27 of this chapter](/current/title-27/part-27).
(2) *Orders and shipments.* In order to obtain spirits under this section, the United States Government agency must forward a copy of a signed permit to the distilled spirits plant for the initial purchase. Later orders with the same plant may refer to that permit number. In the case of a Government agency holding a single permit for use by its subagencies, the copy of the signed permit must contain an attachment listing all subagencies authorized to obtain spirits under that permit. For each shipment that a proprietor makes to a Government agency under this section, the proprietor must prepare a record of shipment and forward the original to the Government agency as provided in [§ 19.625](/current/title-27/section-19.625).
(b) *Withdrawal for beverage use.* Agencies of the United States Government that wish to obtain distilled spirits free of tax for beverage purposes under [26 U.S.C. 7510](https://www.govinfo.gov/link/uscode/26/7510) must provide a proper purchase order signed by the head of the agency or an authorized designee. Each case of spirits withdrawn must bear a plain mark “For Use of the United States” in addition to the marks required by [subpart S of this part](/current/title-27/part-19/subpart-S). For each withdrawal under this paragraph, the proprietor must prepare a record containing the information required by [§ 19.611](/current/title-27/section-19.611) for a record of tax determination and must mark this record “Free of Tax for Use of the United States.”
([26 U.S.C. 7510](https://www.govinfo.gov/link/uscode/26/7510));
([26 U.S.C. 5271](https://www.govinfo.gov/link/uscode/26/5271), [5313](https://www.govinfo.gov/link/uscode/26/5313))
#### § 19.427 Removal of denatured spirits and articles.
(a) *Specially denatured spirits.*
(1) Specially denatured spirits withdrawn by a proprietor free of tax under [§ 19.424(d)](/current/title-27/section-19.424#p-19.424\(d\)) must be shipped in the type of containers authorized under subpart S to the consignee designated on the permit. Bulk conveyances used to transport specially denatured spirits must be secured as required by [§ 19.441](/current/title-27/section-19.441), and the proprietor must prepare a record of shipment in accordance with [§ 19.625](/current/title-27/section-19.625). If a proprietor withdraws specially denatured spirits for export or for transfer to a foreign trade zone for export or for storage pending export, the provisions of [part 28 of this chapter](/current/title-27/part-28) will apply to the withdrawal.
(2) A proprietor may transfer specially denatured spirits to qualified users located in a foreign trade zone for use in the manufacture of articles under [part 20 of this chapter](/current/title-27/part-20).
(b) *Completely denatured alcohol.* No permit, application, or notice is required for the removal of completely denatured alcohol from bonded premises.
(c) *Samples of denatured spirits.*
(1) A proprietor may take samples of denatured spirits free of tax that are necessary for the conduct of business. A proprietor may furnish samples of specially denatured spirits:
(i) To dealers in, and users of, specially denatured spirits in advance of sales; or
(ii) To applicants or prospective applicants for permits to use specially denatured spirits for experimental purposes or for use in preparing samples of a finished product for submission to TTB.
(2) A proprietor must maintain records to ensure that samples of specially denatured spirits furnished to each nonpermittee do not exceed 5 gallons per calendar year. However, a proprietor may furnish samples in excess of 5 gallons to a nonpermittee if the consignee has provided the proprietor with a letterhead application approved under [§ 20.252 of this chapter](/current/title-27/section-20.252). The proprietor must retain the approved letterhead application on file as a part of the record of transaction. For each shipment of a sample over the 5 gallon limit, the proprietor must prepare a record of shipment and forward the original to the consignee as provided in [§ 19.625](/current/title-27/section-19.625). Each such sample must bear a label showing the word “Sample”, the words “Specially Denatured Alcohol” or “Specially Denatured Rum” as applicable, the formula number, and the proprietor's name, address, and plant number. The proprietor must maintain records of samples of less than 5 gallons as provided in [§ 19.616](/current/title-27/section-19.616).
(d) *Articles.* A proprietor may remove articles from bonded premises in accordance with [part 20 of this chapter](/current/title-27/part-20).
([19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c));
([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214), [5271](https://www.govinfo.gov/link/uscode/26/5271))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-140, [81 FR 59455](https://www.federalregister.gov/citation/81-FR-59455), Aug. 30, 2016]
#### § 19.428 Reconsignment.
(a) A consignor may reconsign a shipment of spirits or specially denatured spirits withdrawn free of tax under [§ 19.424](/current/title-27/section-19.424). The shipment may be reconsigned while in transit or upon arrival at the consignee's premises for any bona fide reason. The consignor may reconsign the shipment:
(1) To himself;
(2) To a proprietor for return to bonded premises under [§ 19.454](/current/title-27/section-19.454); or
(3) To another consignee holding a valid permit issued under [part 20](/current/title-27/part-20) or [22 of this chapter](/current/title-27/part-22).
(b) In the case of reconsignment to a proprietor for return to bonded premises under [§ 19.454](/current/title-27/section-19.454), the distilled spirits plant proprietor who will return the spirits to bond must file a consent of surety on form TTB F 5000.18 to extend the terms of the operations or unit bond to cover the return of the spirits.
(c) When a consignor reconsigns a shipment, the consignor must cancel the initial record of shipment and prepare a new record of shipment marked “Reconsignment”. The consignor must annotate the copies of the canceled record of shipment and the new record of shipment to cross-reference each other.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
### Spirits Withdrawn on Production Gauge
#### § 19.431 Withdrawal of spirits on production gauge.
A proprietor may withdraw spirits from bonded premises for any lawful purpose based on the production gauge when it is made in accordance with [§ 19.289(b)](/current/title-27/section-19.289#p-19.289\(b\)). Spirits may be withdrawn without payment of tax for export based on the production gauge when it is made under [§ 19.289(c)](/current/title-27/section-19.289#p-19.289\(c\)). When spirits that are to be withdrawn on determination of tax on the original gauge are transferred in bond, all copies of the transfer record required by [§ 19.620](/current/title-27/section-19.620) must be marked “Withdrawal on Original Gauge”.
([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204))
### Rules for Taking Samples of Spirits
#### § 19.434 Spirits withdrawn from bonded premises.
(a) *Laboratory samples.* A proprietor may withdraw spirits without payment of tax, or may withdraw wine spirits or brandy free of tax, to the proprietor's laboratory, to the laboratory of an affiliated or subsidiary corporation, or, if approved by the appropriate TTB officer, to a recognized commercial laboratory. The samples must be used only for testing or analysis to determine the quality or character of the finished product and must be withdrawn in the minimum amounts necessary for the purpose.
(b) *Customer samples.* If a bona fide purchase agreement exists that is contingent upon quality approval, a proprietor may furnish to a prospective customer a sample of spirits not exceeding 1 liter for quality testing. A proprietor may furnish a sample not to exceed 1 liter to a prospective customer for quality testing in anticipation of a purchase agreement if the customer is authorized to receive bulk spirits for industrial use.
(c) *Research or development.* A proprietor may withdraw spirits without payment of tax for research or development testing, for testing of processes, systems, or materials, or for the testing of equipment relating to distilled spirits or distilled spirits plant operations. The amount withdrawn must be limited to the amount reasonably necessary to conduct the test. If the test is to be conducted by someone other than the proprietor, the proprietor must obtain a written statement, executed by the consignee, agreeing to maintain records of the receipt, use, and disposition of all spirits received for purposes of the test. The statement must specify that records of operations will be available during regular business hours for inspection by TTB officers.
(d) *Conditions.* The following conditions apply to the withdrawal and testing of samples under this section:
(1) The spirits may not be used for consumer testing or other market analysis;
(2) The proprietor must maintain the records specified in [§ 19.616](/current/title-27/section-19.616); and
(3) Remnants or residues of spirits not used during testing must be destroyed or returned to the bonded premises of the proprietor.
(e) *Liability for tax.* The proprietor must pay the tax on any samples of spirits withdrawn, used, or disposed of in a manner not authorized by this section.
(f) *Losses.* When spirits are lost before use for a purpose authorized under this section, the proprietor must pay the tax or must file a claim for remission of tax liability in accordance with [§ 19.263](/current/title-27/section-19.263).
([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214), [5173](https://www.govinfo.gov/link/uscode/26/5173))
#### § 19.435 Samples used on bonded premises.
A proprietor may take samples of spirits for research, development, testing, or laboratory analysis conducted in a laboratory located on the bonded premises. The purposes, conditions, and limitations specified for samples under [§ 19.434](/current/title-27/section-19.434) will also apply to samples used under this section.
([26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008))
#### § 19.436 Taxpayment of samples.
When a proprietor is required to pay tax on samples under [§ 19.434(f)](/current/title-27/section-19.434#p-19.434\(f\)), the proprietor may include the tax on the next semimonthly or quarterly tax return, as appropriate, if qualified to defer payment of tax. If a proprietor is not qualified to defer payment of tax, the proprietor must prepay the tax on form TTB F 5000.24. See [subpart I of this part](/current/title-27/part-19/subpart-I) for rules regarding the payment of taxes.
([26 U.S.C. 5005](https://www.govinfo.gov/link/uscode/26/5005), [5061](https://www.govinfo.gov/link/uscode/26/5061))
#### § 19.437 Labels.
(a) On each container of spirits withdrawn under [§ 19.434](/current/title-27/section-19.434), the proprietor must affix a label showing the following information:
(1) The proprietor's name and plant number;
(2) The date withdrawn;
(3) The purpose for which withdrawn;
(4) The kind of spirits;
(5) The size and the proof of the sample, if known; and
(6) The name and address of the consignee, if the spirits are removed other than to the proprietor's adjacent or contiguous premises.
(b) The labeling prescribed under [paragraph (a)](/current/title-27/section-19.437#p-19.437\(a\)) of this section is not required when the sample container bears a label approved under [part 5 of this chapter](/current/title-27/part-5) and [subpart S of this part](/current/title-27/part-19/subpart-S) and the sample is removed from bonded premises to the general premises of the same distilled spirits plant or to any laboratory owned and operated by the proprietor of that distilled spirits plant.
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5373](https://www.govinfo.gov/link/uscode/26/5373))
### Securing Conveyances
#### § 19.441 Securing of conveyances.
(a) *Construction for securing.* When the securing of a conveyance is required by this part, the conveyance must be constructed so that all openings, including valves, may be closed and secured.
(b) *Approval of securing devices.* Seals, locks or other devices on conveyances used to transport taxpaid spirits, denatured spirits transferred in bond, or denatured spirits withdrawn free of tax do not require approval by TTB. On the other hand, all seals, locks, or devices used on conveyances in which spirits are transferred in bond, withdrawn free of tax, or withdrawn without payment of tax, require approval by the appropriate TTB officer before use. However, cap seals at least three-fourths of an inch in diameter, ball-strap-type (railroad) seals with a strap at least five-sixteenths of an inch wide, and locking security cable with at least a 1⁄16-inch cable may be used on conveyances without approval by TTB. Such seals must:
(1) Be made of durable materials;
(2) Bear the plant registration number or the name, or readily recognizable abbreviation of the name, of the proprietor;
(3) Bear a serial number, including letter prefixes or suffixes, which will not be repeated within the following 6-month period;
(4) Be durably and legibly marked; and
(5) Be constructed to show evidence of tampering.
(c) *Furnishing and affixing securing devices.* The proprietor must furnish and affix any seals, locks or other devices used on conveyances. However, TTB may require any conveyance in which spirits are transferred in bond, withdrawn free of tax, or withdrawn without payment of tax, to be secured by a device furnished by TTB and affixed by a TTB officer. The securing of a conveyance will be done:
(1) As soon as the conveyance is loaded for shipment; and
(2) In such a manner that access to the contents of the conveyance cannot be gained without leaving evidence of tampering.
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206), [5682](https://www.govinfo.gov/link/uscode/26/5682))
## Subpart Q—Return of Spirits to Bonded Premises and Voluntary Destruction
#### § 19.451 Scope.
The IRC allows a proprietor of a distilled spirits plant to return distilled spirits, denatured spirits, and articles to the bonded premises of that plant under certain conditions. This subpart covers the types of returns allowed, sets forth the procedures that the proprietor must follow when returning these products to bonded premises, and prescribes rules for voluntary destruction on or off bonded premises.
### Conditions for Return of Spirits to Bond
#### § 19.452 Return of taxpaid spirits to bonded premises for destruction, denaturation, redistillation, reconditioning, or rebottling.
(a) *Allowable returns.* A proprietor may return spirits to bonded premises if the spirits were taxpaid or tax determined by the proprietor, by another distilled spirits plant proprietor, or by an importer upon importation through U.S. Customs and Border Protection. However, consistent with section 5215(a) of the IRC the proprietor may return such spirits to bond only for one of the following reasons:
(1) Destruction, in accordance with [§ 19.459](/current/title-27/section-19.459);
(2) Denaturation, in accordance with [subpart O of this part](/current/title-27/part-19/subpart-O);
(3) Redistillation, in accordance with [subpart L of this part](/current/title-27/part-19/subpart-L);
(4) Reconditioning; or
(5) Rebottling.
(b) *Dump and gauge of returned spirits.* The proprietor must immediately dump spirits returned to bonded premises under this section unless the spirits are returned in the sealed metal drums in which they were withdrawn. The proprietor must gauge spirits returned under this section upon their receipt. The proprietor may gauge spirits in bottles based upon the case markings and label information in accordance with [§ 19.286](/current/title-27/section-19.286).
(c) *Claims for credit or refund of tax.* A proprietor may file a claim under [§ 19.264](/current/title-27/section-19.264) for credit or refund of tax on spirits returned to bonded premises under this section. In addition to the information specified in [§ 19.264](/current/title-27/section-19.264), a proprietor filing a claim for credit or refund of tax must have on file at the plant where spirits are returned to bond the following documentation for each lot of spirits returned:
(1) Documentation that establishes the amount of tax for which the claim for credit or refund is filed. If the spirits contain eligible wine or eligible flavors, the proprietor must have on file a copy of the record of tax determination as prescribed by [§ 19.611](/current/title-27/section-19.611), or other documentation that establishes the rate of tax that was paid on the product. In lieu of establishing the actual effective tax rate of the product, the proprietor may claim a credit or refund based on the lowest effective tax rate applied to the product; and
(2) Credit memoranda or comparable financial records evidencing the return of each lot of spirits.
(d) *Applicability of Chapter 51 of the IRC.* All provisions of chapter 51 of the IRC and of this part that apply to spirits under TTB bond also apply to spirits when returned to bond under this section.
([26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008), [5010](https://www.govinfo.gov/link/uscode/26/5010), [5201](https://www.govinfo.gov/link/uscode/26/5201), [5207](https://www.govinfo.gov/link/uscode/26/5207), [5215](https://www.govinfo.gov/link/uscode/26/5215))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-196 [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
#### § 19.453 Return of bottled spirits for relabeling or reclosing.
A proprietor may return bottled distilled spirits to their bonded premises for relabeling or reclosing. When bottled spirits are returned for relabeling or reclosing, the proprietor may not claim credit or refund of tax on the returned spirits, and no tax will be due on their subsequent removal. The proprietor must relabel or reclose the bottles immediately and must promptly remove the spirits from bonded premises. The provisions of [§ 19.363](/current/title-27/section-19.363) apply to relabeling and reclosing performed under this section.
([26 U.S.C. 5215](https://www.govinfo.gov/link/uscode/26/5215))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
#### § 19.454 Other authorized returns to bonded premises.
In addition to the returns to bonded premises specified in [§§ 19.452](/current/title-27/section-19.452) and [19.453](/current/title-27/section-19.453), there are other permissible returns of distilled spirits products to a proprietor's bonded premises. These other products, the purposes for which they may be returned, and the conditions for their return are listed in the table below. All of these products must be gauged upon receipt.
| Type of product | Purpose of return | Conditions |
| ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |
| | (1) For redistillation | To any DSP authorized to produce or process. |
| (a) Denatured spirits withdrawn free of tax under [part 20 of this chapter](/current/title-27/part-20) | (2) For subsequent lawful withdrawal | To any DSP. The DSP proprietor must file a consent of surety, form TTB F 5000.18, to extend the terms of the operations or unit bond to cover the return of spirits. |
| (b) Recovered denatured spirits | (1) For restoration or redenaturation | (i) To any DSP authorized to denature. (ii) If SDA needs to be redistilled, the DSP must be authorized to produce or process spirits. (iii) Returns must be in accordance with [part 20 of this chapter](/current/title-27/part-20). |
| (c) Recovered articles | (1) For restoration or redenaturation | (i) To any DSP authorized to denature. |
| | | (ii) If recovered articles need to be redistilled, the DSP must be authorized to produce or process spirits. |
| | | (iii) Returns must be in accordance with [part 20 of this chapter](/current/title-27/part-20). |
| (d) Articles manufactured under [part 20 of this chapter](/current/title-27/part-20) and spirits residues from manufacturing processes | (1) For recovery by redistillation | To a DSP authorized to produce or process spirits. |
| | (1) For redistillation | To any DSP authorized to produce or process. |
| (e) Specially denatured spirits withdrawn free of tax for export under [part 28 of this chapter](/current/title-27/part-28) | (2) For subsequent lawful withdrawal | To any DSP. The DSP proprietor must file a consent of surety, TTB F 5000.18, to extend the terms of the operations or unit bond to cover the return of spirits. |
| (f) Tax-free spirits withdrawn under [part 22 of this chapter](/current/title-27/part-22) | (1) For redistillation | (i) To any DSP authorized to produce or process. |
| | (2) For subsequent lawful withdrawal | (ii) To any DSP. The DSP proprietor must file a consent of surety, TTB F 5000.18, to extend the terms of the operations or unit bond to cover the return of spirits. |
| | (1) For redistillation | (i) To any DSP authorized to produce or process. |
| (g) Recovered tax-free spirits withdrawn under [part 22 of this chapter](/current/title-27/part-22) | (2) For restoration (not including redistillation) | (ii) To any DSP. The DSP proprietor must file a consent of surety, TTB F 5000.18, to extend the terms of the operations or unit bond to cover the return of spirits. |
| (h) Spirits withdrawn without payment of tax under [part 28 of this chapter](/current/title-27/part-28) for export, for transfer to a customs bonded storage, manipulation, or manufacturing warehouse, for deposit in an FTZ, or for use on vessels or aircraft, and not so exported, transferred, deposited, or used | (1) For redistillation | (i) For (1)—To any to DSP authorized to produce or process spirits. |
| | (2) For later lawful removal | (ii) For (2)—To the bonded premises from which withdrawn for later lawful removal. |
| | | (iii) For (1) and (2)—Returns must be made in accordance with the provisions of [part 28 of this chapter](/current/title-27/part-28). |
| (i) Wine spirits withdrawn without payment of tax for use in wine production | (1) Any lawful purpose | (i) To any DSP. |
| | | (ii) The proprietor must obtain approval as provided in [§ 19.403](/current/title-27/section-19.403). |
| | | (iii) Removal of wine spirits from a winery must be in accordance with [part 24 of this chapter](/current/title-27/part-24). |
| (j) Spirits withdrawn without payment of tax for research, development, or testing | (1) For destruction, or return to containers, or return to the distilling system | (i) To the DSP from which the spirits were withdrawn. |
([19 U.S.C. 81(c)](https://www.govinfo.gov/link/uscode/19/81), [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5062](https://www.govinfo.gov/link/uscode/26/5062), [5066](https://www.govinfo.gov/link/uscode/26/5066), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5215](https://www.govinfo.gov/link/uscode/26/5215), [5223](https://www.govinfo.gov/link/uscode/26/5223), [5273](https://www.govinfo.gov/link/uscode/26/5273), [5373](https://www.govinfo.gov/link/uscode/26/5373))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-92a, [76 FR 19908](https://www.federalregister.gov/citation/76-FR-19908), Apr. 11, 2011]
#### § 19.455 Return of spirits withdrawn for export with benefit of drawback.
(a) Subject to the provisions of [§§ 28.197](/current/title-27/section-28.197) through [28.199 of this chapter](/current/title-27/section-28.199), whole or partial shipments of spirits withdrawn for export with benefit of drawback may be returned to:
(1) The bonded premises of the distilled spirits plant, pursuant to [§ 19.452](/current/title-27/section-19.452); or
(2) To a wholesale liquor dealer or taxpaid storeroom.
(b) Claims for export drawback filed by proprietors on form TTB F 5110.30 which include the returned spirits shall be reduced by the amount of tax paid or determined on the returned spirits.
([26 U.S.C. 5215](https://www.govinfo.gov/link/uscode/26/5215))
#### § 19.457 Receipt of spirits abandoned to the United States.
Spirits abandoned to the United States may be sold, without payment of the tax, to a proprietor of a distilled spirits plant for denaturation or for redistillation and denaturation, provided that the plant is authorized to denature or redistill and denature spirits. The proprietor must gauge the spirits upon receipt and must keep the spirits apart from all other spirits or denatured spirits until denatured.
([26 U.S.C. 5243](https://www.govinfo.gov/link/uscode/26/5243))
### Rules for Voluntary Destruction
#### § 19.459 Voluntary destruction.
(a) *General.* A proprietor may voluntarily destroy spirits, denatured spirits, articles, or wines on bonded premises as provided in this section. There is no tax liability on spirits, denatured spirits, articles, or wines destroyed in accordance with this section.
(b) *Wine notice.* A proprietor may destroy wine held on bonded premises only after the proprietor has filed a notice of intent to destroy with the appropriate TTB officer stating the kind and quantity of wine to be destroyed and the date and manner in which the wine is to be destroyed. The wine may be destroyed after the filing of the notice.
(c) *Gauging.* A proprietor must gauge all spirits, denatured spirits, articles, or wines to be destroyed. The proprietor may establish the gauge of spirits in bottles on the basis of legible case markings and label information in accordance with [§ 19.286](/current/title-27/section-19.286). The proprietor must individually count bottles in partial cases.
(d) *Destruction off bonded premises.* If a proprietor intends to remove spirits, denatured spirits, articles, or wines from bonded premises in order to destroy them at a location off bonded premises, the proprietor must file a consent of surety to cover the removal. When the destruction takes place off plant premises, the proprietor must comply with applicable Federal, State, and local environmental laws and regulations.
(e) *Record of destruction.* The proprietor must record the destruction of spirits, denatured spirits, articles, or wines as provided in [§ 19.617](/current/title-27/section-19.617).
([26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008), [5370](https://www.govinfo.gov/link/uscode/26/5370))
## Subpart R—Losses and Shortages
#### § 19.461 Losses and shortages in general.
(a) *Allowable losses and shortages.* Except as otherwise provided in [paragraph (b)](/current/title-27/section-19.461#p-19.461\(b\)) of this section, TTB will not collect tax on spirits, denatured spirits, or wines that are lost, destroyed, or otherwise unaccounted for while in bond, and if the tax has already been paid, TTB will refund the tax.
(b) *Exceptions.* TTB will collect the tax in the case of:
(1) Theft, unless the appropriate TTB officer finds that the theft occurred without connivance, collusion, fraud or negligence on the part of the proprietor, owner, consignor, consignee, bailee, or carrier, or any employee or agent of any of them;
(2) Voluntary destruction carried out other than as provided in [subpart Q of this part](/current/title-27/part-19/subpart-Q);
(3) An unexplained shortage of bottled spirits.
(c) *Burden of proof.* When it appears that a theft occurred, the burden of proof will be on the proprietor or other person liable for the tax to establish to the satisfaction of the appropriate TTB officer that the theft did not result from connivance, collusion, fraud, or negligence on the part of the proprietor, owner, consignor, consignee, bailee, or carrier, or any employee or agent of any of them.
(d) *Claims.* Claims for losses and shortages allowable under this section must be filed in accordance with the provisions of [subpart J of this part](/current/title-27/part-19/subpart-J).
(e) *Limitations.* TTB will abate, remit, credit, or refund taxes on spirits, denatured spirits, or wines lost by theft only to the extent that the claimant is not indemnified against, or recompensed for, the taxes paid or owed.
([26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008), [5370](https://www.govinfo.gov/link/uscode/26/5370))
#### § 19.462 Determination of losses in bond.
(a) *Times for determining losses.* A proprietor must determine at any of the following times whether a loss of spirits, denatured spirits, or wines has occurred:
(1) Each time a tank or bulk conveyance is emptied;
(2) Upon discovery of an accident or an unusual variation in a gauge; and
(3) When required to take a physical inventory.
(b) *Losses from theft, tampering, or unauthorized voluntary destruction.* Whenever any spirits, denatured spirits, or wines are lost or destroyed in bond, whether by theft, tampering, or unauthorized voluntary destruction, the proprietor may elect voluntarily to pay the tax on the quantity lost. If the proprietor does not elect to pay the tax, the proprietor must promptly report the loss or destruction to the appropriate TTB officer. TTB may require that the proprietor file any claim for relief from the tax in accordance with [§ 19.263](/current/title-27/section-19.263).
(c) *Missing packages.* When a proprietor cannot locate or otherwise account for any packages of spirits, denatured spirits, or wine recorded as deposited on bonded premises, the proprietor must promptly report that fact to the appropriate TTB officer. In such case the proprietor must either pay the tax on the lost spirits, denatured spirits, or wines or file a claim for relief from the tax in accordance with [§ 19.263](/current/title-27/section-19.263).
(d) *Excessive in-transit losses.* A proprietor must promptly report excessive in-transit losses to the appropriate TTB officer. As a general rule, when spirits, denatured spirits, or wines are received in bond in bulk conveyances TTB will consider as excessive a loss that exceeds 1 percent of the quantity consigned. However, in the case of transcontinental transfers of wine in bond, TTB will consider as excessive only a loss in excess of 2 percent of the quantity of wine consigned.
(e) *Excessive storage losses.* A proprietor must pay the tax on excessive storage account losses of spirits unless the proprietor files a claim for remission in accordance with [§ 19.263](/current/title-27/section-19.263) and TTB allows the claim under [§ 19.268](/current/title-27/section-19.268). TTB will consider a storage account loss as excessive when the quantity of spirits lost during a calendar quarter from all storage tanks and stored bulk conveyances exceeds 1.5 percent of the total quantity contained in the tanks and stored bulk conveyances during the calendar quarter.
([26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008), [5370](https://www.govinfo.gov/link/uscode/26/5370))
#### § 19.463 Loss of spirits from packages.
(a) *Tampering or theft.* The appropriate TTB officer may require that a proprietor pay the tax on any loss caused by tampering or theft of spirits from packages in storage unless the proprietor establishes to the satisfaction of the appropriate TTB officer that the loss was not due to connivance, collusion, fraud or negligence on the part of the proprietor. As a general rule, the tax will be assessed on the quantity of spirits that represents the difference between the quantity originally entered in the package and the quantity remaining after discovery of the tampering or theft. However, if the proprietor can show that the package had already sustained normal storage losses before the tampering or theft occurred, the proprietor may exclude the amount of the normal storage losses from the quantity to be taxpaid.
(b) *Alternative method of tax assessment.* If tampering or theft has occurred at a proprietor's plant and the proprietor has failed to use effective controls to prevent it, the appropriate TTB officer may use an alternative to the general method of tax assessment specified in [paragraph (a)](/current/title-27/section-19.463#p-19.463\(a\)) of this section. In this case, the appropriate TTB officer may assess on each package showing evidence of tampering or theft an amount equal to the tax on 5 proof gallons of spirits.
([26 U.S.C. 5006](https://www.govinfo.gov/link/uscode/26/5006))
#### § 19.464 Losses after tax determination.
If a proprietor sustains a loss of spirits after tax determination but prior to completion of physical removal of the spirits from bonded premises, the proprietor may file a claim in accordance with [subpart J of this part](/current/title-27/part-19/subpart-J).
([26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008))
#### § 19.465 Shortages of bottled spirits.
(a) *Determination of shortage.* The determination of whether an unexplained shortage of bottled distilled spirits exists must be made by comparing the spirits recorded as being on hand to either the results of the physical inventory required by [§ 19.372](/current/title-27/section-19.372) or the results of any other complete physical inventory taken by the proprietor. When the recorded quantity is greater than the quantity determined by physical inventory, the difference is an unexplained shortage. The proprietor must adjust its records to reflect the results of the physical inventory.
(b) *Payment of tax on shortage.* A proprietor must pay the tax on any unexplained shortage of bottled distilled spirits:
(1) Immediately on a prepayment return on form TTB F 5000.24, Excise Tax Return; or
(2) On a deferred payment return on TTB F 5000.24 for the period during which the shortage was determined.
([26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008))
## Subpart S—Containers and Marks
#### § 19.471 General.
The proprietor of a distilled spirits plant must comply with the container and marking requirements that apply to both industrial and nonindustrial spirits. This subpart covers those requirements. For the requirements that apply to articles made with denatured spirits, see [part 20 of this chapter](/current/title-27/part-20). For the requirements that apply to wine, see [part 24 of this chapter](/current/title-27/part-24).
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206))
#### § 19.472 Need to determine use of spirits—industrial or nonindustrial.
Many of the container and marking requirements set forth in this subpart are based on the intended use of the spirits, that is, whether they are for “industrial” or “nonindustrial” use. For purposes of this subpart, the terms “industrial” use and “nonindustrial” use refer to the uses specified in [paragraphs (a)](/current/title-27/section-19.472#p-19.472\(a\)) and [(b)](/current/title-27/section-19.472#p-19.472\(b\)) of this section.
(a) *Industrial use.* The word “industrial” when used with reference to the use of spirits has the same meaning as in [§§ 1.60](/current/title-27/section-1.60) and [1.62 of this chapter](/current/title-27/section-1.62). Those uses are as follows:
(1) Free of tax by, and for the use of, the United States or any governmental agency thereof, any State, any political subdivision of a State, or the District of Columbia, for nonbeverage purposes;
(2) Free of tax for nonbeverage purposes and not for resale or use in the manufacture of any product for sale—
(i) For the use of any educational organization described in [26 U.S.C. 170(b)(1)(A)(ii)](https://www.govinfo.gov/link/uscode/26/170) which is exempt from income tax under [26 U.S.C. 501(a)](https://www.govinfo.gov/link/uscode/26/501), or for the use of any scientific university or college of learning;
(ii) For any laboratory for use exclusively in scientific research;
(iii) For use at any hospital, blood bank, or sanitarium (including use in making analysis or test at such hospital, blood bank, or sanitarium), or at any pathological laboratory exclusively engaged in making analyses, or tests, for hospitals or sanitariums; or
(iv) For the use of any clinic operated for charity and not for profit (including use in compounding of bona fide medicines for treatment outside of such clinics of patients thereof);
(3) Free of tax, after denaturation of such spirits in the manner prescribed by law for—
(i) Use in the manufacture of ether, chloroform, or other definite chemical substance where such distilled spirits are changed into some other chemical substance and do not appear in the finished product; or
(ii) Any other use in the arts and industries (except for uses prohibited by [26 U.S.C. 5273](https://www.govinfo.gov/link/uscode/26/5273) (b) or (d)) and for fuel, light, and power; and
(4) The use of distilled spirits for experimental purposes and in the manufacture of—
(i) Medicinal, pharmaceutical, or antiseptic products, including prescriptions compounded by retail druggists;
(ii) Toilet preparations;
(iii) Flavoring extracts, syrups, or food products; or
(iv) Scientific, chemical, mechanical, or industrial products, provided such products are unfit for beverage use.
(b) *Nonindustrial use.* The word “nonindustrial” when used with reference to the use of spirits refers to any use not listed as an “industrial” use in [paragraph (a)](/current/title-27/section-19.472#p-19.472\(a\)) of this section. Nonindustrial uses include the following:
(1) For beverage purposes;
(2) In the manufacture, rectification, or blending of alcoholic beverages; or in the preparation of food or drink by a hotel, restaurant, tavern, or similar establishment; or as a medicine; and
(3) Distilled spirits in containers with a capacity of 1 wine gallon or less, other than anhydrous alcohol and alcohol that may be withdrawn from bond free of tax.
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206), [5301](https://www.govinfo.gov/link/uscode/26/5301))
### Requirements for Containers
#### § 19.473 Authorized containers.
(a) *General.* A proprietor may only use containers that are authorized under this part for containing, storing, transferring, conveying, removing, or withdrawing spirits or denatured spirits.
(b) *Approval of other containers.* The appropriate TTB officer may approve the use of another type of container for a particular purpose in place of a type of container specifically authorized in this part for that purpose if the use of that container:
(1) Will provide protection to the revenue equal to or greater than that provided by the authorized container; and
(2) Will not hinder the effective administration of this part.
(c) *Approval of other container materials.* The appropriate TTB officer may approve the use of a container made of a material other than one prescribed in this subpart if the prescribed material is unsuitable for the intended purpose. If the appropriate TTB officer approves another material for a container, the approval may also specify how the container must be constructed, protected, marked, and used.
([26 U.S.C. 5002](https://www.govinfo.gov/link/uscode/26/5002), [5206](https://www.govinfo.gov/link/uscode/26/5206), [5212](https://www.govinfo.gov/link/uscode/26/5212), [5213](https://www.govinfo.gov/link/uscode/26/5213), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5301](https://www.govinfo.gov/link/uscode/26/5301).)
#### § 19.474 Spirits for nonindustrial use.
(a) *Containers.* A proprietor may fill spirits for nonindustrial use into packages or into other containers that are filled during processing operations, if consistent with the provisions of [part 5 of this chapter](/current/title-27/part-5).
(b) *Bottles and labels.* The provisions of [subpart T of this part](/current/title-27/part-19/subpart-T) and [part 5 of this chapter](/current/title-27/part-5) govern the liquor bottles and labels that a proprietor must use in bottling spirits for nonindustrial domestic use.
(c) *Cases.* If spirits for nonindustrial use are in containers with a capacity of one gallon or less the proprietor must place the containers in cases constructed to afford reasonable protection against breakage.
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206), [5212](https://www.govinfo.gov/link/uscode/26/5212), [5301](https://www.govinfo.gov/link/uscode/26/5301))
#### § 19.475 Spirits for industrial use.
(a) *Containers.* A proprietor may fill denatured spirits or other spirits for industrial use into suitable containers. The proprietor must ensure that all containers for spirits that will be used in food products comply with applicable U.S. Food and Drug Administration health and safety laws and regulations.
(b) *Encased containers.* A proprietor may encase unlabeled containers of denatured spirits and other spirits for industrial use in wood, fiberboard or similar material if:
(1) The cases are constructed so that the surface, including the opening of the container, is not exposed;
(2) Required marks are applied to an exterior surface of the case;
(3) The case is constructed so that the portion containing marks will remain attached to the inner container until all the contents have been removed; and
(4) A statement reading, “Do not remove inner container until emptied” or a statement of similar meaning appears on the portion of the case bearing the marks.
(c) *Cases.* With the exception of encased containers covered in [paragraph (b)](/current/title-27/section-19.475#p-19.475\(b\)) of this section, if the containers for denatured spirits and spirits for industrial use have a capacity of not more than 1 gallon, the proprietor must place the containers in cases that provide reasonable protection against breakage.
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206), [5301](https://www.govinfo.gov/link/uscode/26/5301))
#### § 19.476 Packages.
A proprietor may use packages on bonded premises for original entry of spirits, and for packaging from tanks, storing, transferring in bond, and withdrawing spirits and denatured spirits from bonded premises. Packages must be constructed so as to be capable of secure closure.
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206))
#### § 19.477 Use of bulk conveyances.
If a bulk conveyance meets the construction requirements of [§ 19.478](/current/title-27/section-19.478) or is approved under [§ 19.473(b)](/current/title-27/section-19.473#p-19.473\(b\)), a proprietor may use the bulk conveyance on bonded premises for the original entry of spirits, and for filling from tanks, storing, transferring in bond, and withdrawing taxpaid spirits and denatured spirits. A proprietor may use such a bulk conveyance to withdraw spirits free of tax, in accordance with the provisions of this part, for use of the United States or to a specified consignee if so authorized by the appropriate TTB officer under [§ 19.473(b)](/current/title-27/section-19.473#p-19.473\(b\)). A proprietor may also use such a bulk conveyance to withdraw spirits without payment of tax, in accordance with the provisions in this part, for any one of the following purposes:
(a) Export, as authorized under [26 U.S.C. 5214(a)(4)](https://www.govinfo.gov/link/uscode/26/5214);
(b) Transfer to customs manufacturing bonded warehouses, as authorized under [19 U.S.C. 1311](https://www.govinfo.gov/link/uscode/19/1311);
(c) Transfer to foreign trade zones, as authorized under [19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c);
(d) Transfer to customs bonded warehouses, as authorized under [26 U.S.C. 5066](https://www.govinfo.gov/link/uscode/26/5066) or [5214(a)(9)](https://www.govinfo.gov/link/uscode/26/5214); or
(e) Use in wine production, as authorized under [26 U.S.C. 5373](https://www.govinfo.gov/link/uscode/26/5373).
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206))
#### § 19.478 Construction requirements for bulk conveyances.
(a) *Construction.* The following standards apply to bulk conveyances authorized by this part:
(1) If the conveyance consists of two or more compartments, each compartment must be constructed or arranged so that the emptying of any compartment does not provide access to the contents of any other compartment;
(2) The conveyance (or in the case of compartmented conveyances, each compartment) must be arranged so that it can be completely drained;
(3) Each tank car or tank truck must have permanently and legibly marked thereon its number, its capacity in wine gallons, and the name or symbol of its owner;
(4) If the conveyance consists of two or more compartments, each compartment must be identified by a number and the capacity in wine gallons of each shall be marked thereon;
(5) The conveyance must have a route board or other suitable device for carrying required marks or brands; and
(6) Calibrated charts, showing the capacity of each compartment in wine gallons for each inch of depth, must be available for use in measuring the contents of each tank truck, tank ship, or barge.
(b) *Proprietor's responsibility.* Before filling any bulk conveyance, a proprietor must examine it to verify that it meets the requirements of this section or of an approval under [§ 19.473(b)](/current/title-27/section-19.473#p-19.473\(b\)) and that it is otherwise suitable for receiving the spirits or denatured spirits. A proprietor must refrain from using, or discontinue use of, any conveyance found by it or by the appropriate TTB officer not to meet the applicable requirements.
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206), [5212](https://www.govinfo.gov/link/uscode/26/5212), [5213](https://www.govinfo.gov/link/uscode/26/5213), [5214](https://www.govinfo.gov/link/uscode/26/5214))
#### § 19.479 Restrictions on dispositions of bulk spirits.
(a) *Bulk spirits for nonindustrial use.* A proprietor may sell or dispose of spirits for nonindustrial use in containers holding more than one wine gallon only to the persons and for the purposes specified in [§ 1.80 of this chapter](/current/title-27/section-1.80).
(b) *Bulk spirits for industrial use.* If a proprietor withdraws spirits (other than alcohol or neutral spirits) from bond in containers holding more than one wine gallon for industrial use, the proprietor must ship or deliver the spirits directly to the user of the spirits as provided in [§ 1.95 of this chapter](/current/title-27/section-1.95).
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
### Marking Requirements for Spirits
#### § 19.482 General.
A proprietor must mark, identify, and label all containers of spirits or denatured spirits as provided in this part. For information regarding liquor bottle label requirements, see [subpart T of this part](/current/title-27/part-19/subpart-T) and [part 5 of this chapter](/current/title-27/part-5).
([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204), [5206](https://www.govinfo.gov/link/uscode/26/5206))
#### § 19.483 Specifications for marks.
(a) *Basic requirements.* A proprietor must place the marks prescribed by this subpart on cases, encased containers, and packages of spirits and denatured spirits so that they are:
(1) Of adequate size to be easily read;
(2) Of a color in distinct contrast to the color of the background;
(3) Legible; and
(4) Durably affixed.
(b) *Use of labels.* A proprietor may use labels as the means for applying prescribed marks if the labels meet the requirements of [paragraph (a)](/current/title-27/section-19.483#p-19.483\(a\)) of this section.
(c) *Location.* A proprietor must place the prescribed marks on one side of the case or encased container, or on the head of the package.
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206))
#### § 19.484 Marks on packages filled in production or storage.
(a) *Packages filled in production or storage.* Except as otherwise provided in this part, a proprietor must mark packages of spirits filled in production or storage with:
(1) The name of the producer, or the producer's trade name, in accordance with [paragraph (b)](/current/title-27/section-19.484#p-19.484\(b\)) of this section;
(2) The distilled spirits plant number of the producer, such as “DSP-KY-708”;
(3) The kind of spirits or, in the case of distillates removed under [§ 19.307](/current/title-27/section-19.307), the kind of distillate such as “Grape Distillate” or “Peach Distillate”;
(4) The package identification number;
(5) “BSA” or “OC” when spirits are treated with caramel (burnt sugar) or oak chips, as the case may be;
(6) The rated capacity of the package in gallons shown as “RC-G”; and
(7) The name or trade name and the plant number of the packaging proprietor in place of the name or trade name and plant number of the producer if packages of spirits of 190° or more of proof are filled by a proprietor other than the producer.
(b) *Real or trade names.* The producer's or other proprietor's real name, or the authorized trade name used in accordance with [§ 19.94](/current/title-27/section-19.94) at the time of production, may be placed on any package filled at the time of the production gauge, or at the time of the original packaging of the spirits in wood when, as provided in [§ 19.305](/current/title-27/section-19.305), the spirits were not filled into wooden packages at the time of production gauge. When spirits have been mingled in accordance with [§ 19.326](/current/title-27/section-19.326), the proprietor may use only a producer name associated with any portion of the mingled spirits on packages filled with such mingled spirits.
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206))
#### § 19.485 Package identification numbers in production and storage.
(a) *General.* A proprietor must mark with a lot identification number each package of spirits filled during production or storage operations. The lot identification number must show when the package was filled and must consist of, in order, the following:
(1) The last two digits of the calendar year;
(2) An alphabetical designation for the month from “A” through “L”, representing, in order, January through December;
(3) Two digits corresponding to the day of the month; and
(4) When more than one lot is filled into packages during the same day, for successive lots after the first lot, a letter suffix sequence starting with “A” representing the second lot, with “B” representing the third lot, and so forth. For example: the first three lots filled into packages on January 2, 2002, would be identified as “02A02”, “02A02A”, and “02A02B”.
(b) *Packages constituting a lot.* Packages of spirits, including any remnant package, received from customs custody or filled during any one day will receive the same lot identification number, subject to the following conditions:
(1) They are of the same type and either are of the same rated capacity or are uniformly filled with the same quantity by weight or other measurement method prescribed in [§ 19.289](/current/title-27/section-19.289);
(2) They are filled with spirits of the same kind and same proof;
(3) If they are filled with mingled spirits, the mingling was conducted in accordance with [§ 19.326](/current/title-27/section-19.326); and
(4) In the case of spirits imported or brought into the United States, they are filled with imported spirits, Puerto Rican spirits or Virgin Island spirits, as applicable.
(c) *Serial numbers.* At the time of filling, receipt on bonded premises, or withdrawal from bond, the appropriate TTB officer may require serial numbers on packages of spirits within the same lot in conjunction with the lot identification number. The proprietor must assign temporary serial numbers to packages for control purposes when they are transferred in bond in an unsecured conveyance or gauged after tampering within the storage account.
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206))
#### § 19.486 Change of packages in storage.
When a proprietor transfers spirits from one package to another as permitted in [§ 19.325](/current/title-27/section-19.325), the proprietor must give the new package the same package identification number and marks as the original package. The proprietor must also prepare and sign a label to be affixed to the head of each new package. The label must be in the following form:
The spirits in this \_\_\_\_\_\_\_\_\_\_\_\_ \[kind of cooperage: barrel or drum], package identification No. \_\_\_\_\_\_\_\_, were transferred from a \_\_\_\_\_\_\_\_\_\_\_\_ \[kind of cooperage: barrel or drum], on \_\_\_\_\_\_\_\_\_\_\_\_\_\_ \[Date], \_\_\_\_\_\_\_\_\_\_\_\_\_\_ \[Proprietor]
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206))
#### § 19.487 Kind of spirits.
(a) *Designation.* The designations of kind of spirits required for packages filled on bonded premises must be consistent with the classes and types of spirits set forth in [part 5 of this chapter](/current/title-27/part-5) subject to the following exceptions or conditions:
(1) A proprietor may designate as “Alcohol” spirits distilled at more than 160 proof, which lack the taste, aroma, and other characteristics generally attributed to whisky, brandy, rum, or gin, and which are substantially neutral in character. When alcohol so designated is withdrawn on determination of tax, the designation must consist of the word “Alcohol” preceded or followed by a word or phrase that describes the material from which the alcohol was produced;
(2) The designation for vodka, neutral spirits, or gin must include a word or phrase that describes the material from which the spirits were produced;
(3) A proprietor may designate as “Spirits”, preceded or followed by a word or phrase that describes the material from which the spirits were produced, those distilled spirits that are distilled at less than 190 proof which lack the taste, aroma, and other characteristics generally attributed to whisky, brandy, rum, or gin. However, the proprietor may not designate such spirits as “Spirits grain” or “Grain spirits”;
(4) A proprietor must designate spirits distilled from fruit at or above 190 proof, if intended for use in wine production, as “Neutral Spirits—Fruit”, preceded or followed by the name of the fruit from which the spirits were produced;
(5) A proprietor may designate as “Whisky” spirits distilled at not more than 160 proof from a fermented mash of not less than 51 percent rye, corn, wheat, malted barley, or malted rye grain, packaged in reused cooperage, provided that the designation is further qualified with the words “Distilled from rye mash” (or bourbon, wheat, malt, or rye malt mash, as the case may be). However, spirits designated as “Whisky” must, if distilled from a fermented mash of not less than 80 percent corn, carry the designation “Corn Whisky.”
(b) *Change of designation.* After written application to, and approval of, the appropriate TTB officer, a proprietor may at any time before their withdrawal from bonded premises, change the original designation for spirits to a new designation properly describing the spirits in accordance with the provisions of this section.
(c) *Other designations.* If a proprietor proposes to produce spirits for which a designation has not been prescribed in this section or in [part 5 of this chapter](/current/title-27/part-5), the proprietor must first make written application to the appropriate TTB officer for a designation for such spirits, and the proprietor must then designate the spirits accordingly.
(d) *Spirits for nonindustrial use.* A proprietor may not treat the provisions of this section as constituting authorization to apply designations to spirits withdrawn for nonindustrial use if those designations do not conform to the requirements of [part 5 of this chapter](/current/title-27/part-5).
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206))
#### § 19.488 Marks on packages filled in processing.
(a) *Packages filled in processing.* Except as otherwise provided in this part, a proprietor must mark packages of spirits filled in processing with:
(1) The name of the processor, or the processor's trade name;
(2) The distilled spirits plant number of the processor, such as “DSP-KY-708”;
(3) The kind of spirits in accordance with [§ 19.487](/current/title-27/section-19.487) or, in the case of an intermediate product, the product name shown on form TTB F 5110.38, Formula for Distilled Spirits Under the Federal Alcohol Administration Act;
(4) The serial number or lot identification number, in accordance with [§ 19.490](/current/title-27/section-19.490), and the date of filling;
(5) The proof of the spirits; and
(6) The serial number of the formula if it was manufactured under an approved formula.
(b) *Real or trade names.* The proprietor's real name or any trade name used in accordance with [§ 19.94](/current/title-27/section-19.94) may be placed on any package filled with spirits during processing operations.
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206))
#### § 19.489 Marks on cases filled in processing.
(a) *Mandatory marks.* Except for cases marked in accordance with [§ 19.496](/current/title-27/section-19.496), a proprietor must mark in accordance with [§ 19.483](/current/title-27/section-19.483) the following information on each case of spirits filled in processing:
(1) Serial number in accordance with [§ 19.490](/current/title-27/section-19.490);
(2) Kind of spirits in accordance with the classes and types of spirits set forth in [part 5 of this chapter](/current/title-27/part-5);
(3) The distilled spirits plant number where bottled;
(4) Date filled;
(5) Proof; and
(6) Liters or proof gallons.
(b) *Export marks.* In addition to the marks referred to in [paragraph (a)](/current/title-27/section-19.489#p-19.489\(a\)) of this section, the proprietor must include the marks required by [part 28 of this chapter](/current/title-27/part-28) on cases removed for export, for transfer to any customs bonded warehouses, for transfer to foreign trade zones, or for use as supplies on certain vessels and aircraft.
(c) *Other marks.* A proprietor may include other marks on cases filled in processing in addition to the marks prescribed under this section. Any additional marks must not interfere with, or detract from, the marks prescribed in this section. The proprietor may include other marks such as:
(1) The name or trade name, and the location if desired, of the bottler, displayed with the word “Bottler”;
(2) For products distilled or processed by the proprietor, the proprietor's name or trade name, and the location of the distilled spirits plant, if desired, displayed with the words “Distiller” or “Processor”, as applicable;
(3) For products imported and bottled by the proprietor, the words “Imported and Bottled By”, followed by the proprietor's name or trade name and location of the distilled spirits plant if desired;
(4) For products bottled for a dealer, the words “Bottled For”, followed by the name of that dealer;
(5) Any material required by Federal or State law and regulations; and
(6) Labels or data describing the contents for commercial identification or accounting purposes or indicating payment of State or local taxes.
([26 U.S.C. 5066](https://www.govinfo.gov/link/uscode/26/5066), [5206](https://www.govinfo.gov/link/uscode/26/5206))
#### § 19.490 Numbering of packages and cases filled in processing.
(a) *Packages of spirits and denatured spirits filled during processing operations.* When a proprietor fills packages of spirits and denatured spirits during processing, the proprietor must identify the packages consecutively beginning with “1” and continuing the series until the number “1,000,000” is reached, except that any series of such numbers already in use may be continued to that limit. When the identification in any series reaches “1,000,000”, the proprietor may begin a new series with “1” but must add an alphabetical prefix or suffix to the new series number. For example, the first identifier in the second series of 1,000,000 packages filled might be “1A” or “A1”.
(b) *Cases containing bottles or other containers of spirits and denatured spirits.* When a proprietor fills cases containing bottles or other containers of spirits and denatured spirits during processing, the proprietor must identify the cases consecutively beginning with “1” and continuing the series until the number “1,000,000” is reached, except that any series of such numbers already in use may be continued to that limit. When the identification in any series reaches “1,000,000”, the proprietor may begin a new series with “1”. This series of identifiers for cases containing bottles or other containers must be distinct from the series of serial numbers required for packages under [paragraph (a)](/current/title-27/section-19.490#p-19.490\(a\)) of this section.
(c) *Additional identification.* A proprietor may establish separate series of identifiers, distinguished from each other by the use of alphabetical prefixes or suffixes, to identify the size of bottles, the brand names, or other information, on written notice to the appropriate TTB officer. The proprietor must identify remnant cases by placing the identifier of the last full case followed by the letter “R” on the remnant case. When there is a change in the name, or trade name of the proprietor, all series in use may be continued. However, if there is a change in proprietorship, a new series must be commenced.
(d) *Alternative marking for spirits for industrial use.* A proprietor may mark packages and cases of spirits for industrial use, including denatured spirits, filled in processing with the lot identification numbers specified in [§ 19.485](/current/title-27/section-19.485) instead of using the identifiers specified in [paragraphs (a)](/current/title-27/section-19.490#p-19.490\(a\)), [(b)](/current/title-27/section-19.490#p-19.490\(b\)) and [(c)](/current/title-27/section-19.490#p-19.490\(c\)) of this section.
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206))
#### § 19.491 Marks on containers of specially denatured spirits.
(a) *General.* A proprietor must mark or label each package, case, or encased container of specially denatured spirits filled on bonded premises to show:
(1) The quantity in gallons;
(2) The serial number or lot identification number;
(3) The plant number of the proprietor;
(4) The designation or abbreviation of the specially denatured spirits by kind (alcohol or rum);
(5) The applicable formula number; and
(6) The proof of the spirits, if they were denatured at other than 190 proof.
(b) *Bottles.* A proprietor must mark or label each bottle to show the information prescribed in [paragraphs (a)(1)](/current/title-27/section-19.491#p-19.491\(a\)\(1\)), [(3)](/current/title-27/section-19.491#p-19.491\(a\)\(3\)), [(4)](/current/title-27/section-19.491#p-19.491\(a\)\(4\)), [(5)](/current/title-27/section-19.491#p-19.491\(a\)\(5\)), and [(6)](/current/title-27/section-19.491#p-19.491\(a\)\(6\)) of this section.
(c) *Alternate formulations.* When spirits are denatured under a formula authorizing a choice of types and quantities of denaturants, the proprietor must mark the container or case to show the actual types and quantities of denaturants used.
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206))
#### § 19.492 Marks on containers of completely denatured alcohol.
Except in the case of completely denatured alcohol transported by pipelines and bulk conveyances, a proprietor must mark each container of completely denatured alcohol on the head of the package or on the side of the can or carton with:
(a) The name of the proprietor who filled the containers;
(b) The plant number where the container was filled;
(c) The container's contents in wine gallons;
(d) The apparent proof;
(e) The words “Completely Denatured Alcohol”; and
(f) The applicable formula number.
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206))
#### § 19.493 Caution label for completely denatured alcohol.
A proprietor must place a label containing the words “Completely Denatured Alcohol” and the statement “Caution—contains poisonous ingredients” on each container of completely denatured alcohol containing five gallons or less that is sold or offered for sale. The label must be written in plain, legible letters. The proprietor may print the name and address of the denaturer on such label, but may not include any other nonessential matter on the label without approval from the appropriate TTB officer. The word “pure” may not appear on the label or the container.
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206))
#### § 19.494 Additional marks on portable containers.
(a) In addition to the other marks prescribed in this part, a proprietor must mark portable containers of spirits or denatured spirits (other than bottles enclosed in cases) that will be withdrawn from the bonded premises as follows:
(1) Without payment of tax, for export, for transfer to customs manufacturing bonded warehouses, for transfer to foreign trade zones, or as supplies for certain vessels and aircraft, in accordance with the provisions in [part 28 of this chapter](/current/title-27/part-28); or
(2) If tax-free, with the word “Tax-Free.”
(b) A proprietor may show other optional information such as brand or trade name; a caution notice, or other information required by Federal, State, or local law or regulations; wine or proof gallons; and plant control data. However, any such mark must not conceal, obscure, interfere with, or conflict with the markings required by this subpart.
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206))
#### § 19.495 Marks on bulk conveyances.
(a) A proprietor must securely attach a label identifying each conveyance or compartment to the route board, or to another equivalent device, for each bulk conveyance used to transport spirits or denatured spirits setting forth the following information:
(1) The name, plant number, and location of the consignor;
(2) The name, distilled spirits plant number, permit number, or registry number (as applicable), and the location of the consignee;
(3) The date of shipment;
(4) The quantity (proof gallons for spirits, wine gallons for denatured spirits); and
(5) The formula number for denatured spirits.
(b) If the conveyance is accompanied by documentation containing the information specified in [paragraph (a)](/current/title-27/section-19.495#p-19.495\(a\)) of this section, the proprietor is not required to label each conveyance or compartment.
(c) Export shipments must conform to the requirements of [part 28 of this chapter](/current/title-27/part-28).
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206))
#### § 19.496 Cases of industrial alcohol.
(a) *Mandatory marks.* A proprietor must mark each case and each encased container of alcohol bottled for industrial use under the provisions of [subpart N of this part](/current/title-27/part-19/subpart-N) to show the following information:
(1) The designation “Alcohol”;
(2) The serial number or lot identification number;
(3) The distilled spirits plant number of the proprietor;
(4) The proof;
(5) The proof gallons;
(6) The designation “Tax-Free”; and
(7) Any information required by [part 28 of this chapter](/current/title-27/part-28), for cases that are withdrawn for export, transferred to customs bonded warehouses, transferred to foreign trade zones, or are for use on vessels and aircraft.
(b) *Other marks.* A proprietor may mark cases of industrial alcohol with other marks, provided that they do not interfere with, or detract from, mandatory case marks in the manner permitted under [§ 19.489](/current/title-27/section-19.489).
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206), [5235](https://www.govinfo.gov/link/uscode/26/5235))
#### § 19.497 Obliteration of marks.
Except as otherwise provided in [§ 19.487(b)](/current/title-27/section-19.487#p-19.487\(b\)), the marks required to be placed on any container or case under this part must not be destroyed or altered before the container or case is emptied.
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206))
#### § 19.498 Relabeling and reclosing off bonded premises.
The proprietor of a distilled spirits plant may relabel, affix brand labels, or reclose bottled taxpaid spirits on wholesale liquor dealer premises or at a taxpaid storeroom on, contiguous to, adjacent to, or in the immediate vicinity of the proprietor's distilled spirits plant, provided that the wholesale liquor dealer premises or taxpaid storeroom is operated in connection with the distilled spirits plant. If products relabeled under this section were originally bottled by another proprietor, the relabeling proprietor must have on file a statement from the original bottler consenting to the relabeling.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.499 Authorized abbreviations to identify marks.
In addition to the other abbreviations and symbols authorized under this part for use in marking containers, a proprietor may use the following abbreviations to identify the following marks:
| Mark | Abbre- viation |
| ---------------------------- | -------------- |
| Completely Denatured Alcohol | CDA |
| Gallon or Wine Gallon | WG |
| Gross Weight | G |
| Proof | P |
| Specially Denatured Alcohol | SDA |
| Specially Denatured Rum | SDR |
| Tare | T |
| Tax Determined | TD |
| Wine Spirits Addition | WSA |
([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206))
## Subpart T—Liquor Bottle, Label, and Closure Requirements
### Authorized Liquor Bottles
#### § 19.511 Bottles authorized.
Each liquor bottle for nonindustrial distilled spirits for domestic use must conform to a bottle size specified in the standards of fill set forth in [subpart K of part 5 of this chapter](/current/title-27/part-5/subpart-K). This rule applies to liquor bottles intended for distribution in both interstate and intrastate commerce.
([26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
#### § 19.512 Bottles not constituting approved containers.
A proprietor may not use any liquor bottle that the appropriate TTB officer finds is misleading within the meaning of [§ 5.202 of this chapter](/current/title-27/section-5.202). Misleading liquor bottles do not constitute approved containers for the purposes of this part, and a proprietor may not use them for packaging distilled spirits for domestic purposes.
([26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
#### § 19.513 Distinctive liquor bottles.
(a) *Application.* A proprietor must submit form TTB F 5100.31, Application for and Certification/Exemption of Label/Bottle Approval, to the appropriate TTB officer in order to obtain approval to use domestic liquor bottles of distinctive shapes or designs. The proprietor must certify as to the total capacity of a representative sample bottle before closure (expressed in milliliters) on each copy of the form. In addition, the proprietor must affix a readily legible photograph (showing both front and back of the bottle) to the front of each copy of TTB F 5100.31 along with the label(s) to be used on the bottle. The proprietor must submit to TTB an actual bottle or accurate model only when specifically requested to do so.
(b) *Approval.* The appropriate TTB officer will approve a distinctive liquor bottle on a properly completed TTB F 5100.31 if the bottle is found to:
(1) Meet the requirements of [part 5 of this chapter](/current/title-27/part-5);
(2) Be distinctive;
(3) Be suitable for its intended purpose;
(4) Not jeopardize the revenue; and
(5) Be not misleading to the consumer.
(c) *Retention.* A proprietor must keep on file at their premises a copy of the complete approved TTB F 5100.31 for the distinctive liquor bottle.
(d) *Cross reference.* For procedures regarding issuance, denial and revocation of distinctive liquor bottle approvals, as well as appeal procedures, see [part 13 of this chapter](/current/title-27/part-13).
([26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
### Labeling Requirements
#### § 19.516 Certificate of label approval or exemption.
A proprietor must obtain a certificate of label approval or an exemption from label approval under [part 5 of this chapter](/current/title-27/part-5) on form TTB F 5100.31 for any label that the proprietor will use on bottles of spirits for domestic use. Upon request by the appropriate TTB officer, the proprietor must provide evidence of label approval, or of exemption from label approval, for a label used on a bottle of spirits for domestic use. For procedures regarding the issuance, denial and revocation of certificates of label approval and certificates of exemption from label approval, as well as appeal procedures, see [part 13 of this chapter](/current/title-27/part-13).
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.517 Statements required on labels under an exemption from label approval.
If a proprietor bottles spirits for domestic use under a certificate of exemption from label approval on form TTB F 5100.31, the following information must appear on the label used on the bottle, in the manner indicated:
(a) *Brand name.* The brand name on the label must conform to the requirements of [§ 5.64 of this chapter](/current/title-27/section-5.64);
(b) *Kind.* The class and type of the spirits identified on the label must conform to the requirements of [subpart I of part 5 of this chapter](/current/title-27/part-5/subpart-I);
(c) *Alcohol content.* The alcohol content on the label must conform to the requirements of [§ 5.65 of this chapter](/current/title-27/section-5.65);
(d) *State of distillation.* In the case of whisky, the state of distillation statement on the label must conform to the requirements of [§ 5.66(f) of this chapter](/current/title-27/section-5.66#p-5.66\(f\));
(e) *Net contents.* The label must show the net contents, unless the statement of net contents is permanently marked on the side, front, or back of the bottle;
(f) *Name and address of bottler.* The name and address of the bottler must conform to the requirements of [§ 19.518](/current/title-27/section-19.518);
(g) *Age of whisky containing no neutral spirits.* In the case of whisky containing no neutral spirits, statements of age and percentage by volume on the label must conform to the requirements of [§ 5.74 of this chapter](/current/title-27/section-5.74);
(h) *Age of whisky containing neutral spirits.* In the case of whisky containing neutral spirits, the label must state the age of the whisky or whiskies and the respective percentage by volume of whisky or whiskies and neutral spirits in accordance with [§ 5.74 of this chapter](/current/title-27/section-5.74);
(i) *Age of brandy.* In the case of brandy aged for a period of less than two years, the label must state the age.
(j) *Presence of neutral spirits or coloring, flavoring, or blending material.* The label must indicate the presence of neutral spirits or coloring, flavoring, or blending material in accordance with [§§ 5.71-5.73 of this chapter](/current/title-27/section-5.71); and
(k) *Country of origin.* Labels of imported spirits must state the country of origin in substantially the following form: “Product of \_\_\_\_\_\_\_\_\_\_\_\_,” with the blank filled in with the name of the country of origin.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
#### § 19.518 Name and address of bottler.
In setting forth the name and address of the bottler required by [§ 19.517(f)](/current/title-27/section-19.517#p-19.517\(f\)), the label must contain the words “Bottled by”, “Packed by”, or “Filled by” followed immediately by the name (or trade name) of the bottler and the place where the bottling takes place. If the bottler is the proprietor of more than one distilled spirits plant engaged in bottling operations, the label may include the addresses of all such plants immediately following the name (or trade name) of the bottler. The following additional rules apply to name and address labeling under this section:
(a) Where distilled spirits are bottled by or for the distiller of the spirits, the label may state, in lieu of the words “Bottled by”, “Packed by”, or “Filled by”, followed by the bottler's name (or trade name) and address or addresses, the words “Distilled by”, followed immediately by the name (or trade name) under which the particular spirits were distilled, or by any trade name shown on the distiller's permit covering the premises where the particular spirits were distilled, and the address (or addresses) of the distiller;
(b) Where “straight whiskies” of the same type produced in the same State by two or more different distillers are combined (either at time of bottling or at a warehouseman's bonded premises for further storage) and are subsequently bottled and labeled as “straight whisky”, that “straight whisky” must be labeled as provided in the introductory paragraph of this section. However, where that combined “straight whisky” is bottled by or for the distillers of the whiskies, the label may contain, in lieu of the wording specified in that introductory paragraph, the words “Distilled by”, followed immediately by the name (or trade name) of each distiller that distilled a portion of the “straight whisky”, the address of each of the distilled spirits plants where a portion of the “straight whisky” was distilled, and the percentage of “straight whisky” distilled by each distiller (with a tolerance of plus or minus 2 percent). In addition, where “straight whisky” is made up of a mixture of “straight whiskies” of the same type distilled at two or more distilled spirits plants of the same proprietor located within the same State, and where that “straight whisky” is bottled by or for that proprietor, the label for the “straight whisky” may contain, in lieu of the wording specified in the introductory paragraph of this section, the words “Distilled by” followed by the name (or trade name) of the proprietor and the address of each of the distilled spirits plants that distilled a portion of the “straight whisky”;
(c) Where distilled spirits are bottled by or for the proprietor of a distilled spirits plant, the label may state, in lieu of the words “Bottled by”, “Packed by”, or “Filled by” followed by the bottler's name (or trade name) and address, the words “Blended by”, “Made by”, “Prepared by”, “Manufactured by”, or “Produced by” (whichever is appropriate to the process involved), followed by the name (or trade name) and the address (or addresses) of the distilled spirits plant proprietor;
(d) In the case of labels of distilled spirits bottled for a retailer or other person who is not the proprietor of the distilled spirits plant where the distilled spirits were distilled, the label may also state the name and address of that retailer or other person, preceded immediately by the words “Bottled for”, “Distributed by”, or other similar statement; and
(e) The label may state the address of the proprietor's principal place of business in lieu of the place where the bottling, distilling or processing operation occurred, provided that the address where the bottling, distilling, or other operation occurred is indicated by printing, coding, or other markings, on the label or on the bottle. The coding system employed must permit TTB to determine where the operation stated on the label occurred. Prior to using such a label or bottle coding system, the proprietor must send a notice to the appropriate TTB officer explaining the coding system.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
#### § 19.519 Labels for export spirits.
(a) *Required information.* If a proprietor bottles spirits for export, the bottles must have a securely affixed label showing:
(1) The kind (class and type) of spirits;
(2) The percentage of alcohol by volume (ABV) of the spirits;
(3) The net contents, unless the markings on the bottle indicate such contents; and
(4) The name (or trade name) of the bottler.
(b) *Additional information.* The bottler may place additional information on the export label if it is not inconsistent with the information required under [paragraph (a)](/current/title-27/section-19.519#p-19.519\(a\)) of this section.
(c) *Language.* The export label information may appear in the language of the country to which the spirits are to be exported provided that the proprietor maintains on file an English translation of that information. The export label may state the net contents and percentage of alcohol by volume in the units of measurement of the foreign country, provided that the proprietor maintains a record of the equivalent units as required for labels of spirits bottled for domestic consumption.
(d) *Waiver.* The appropriate TTB officer may waive the requirement to show any information required by this section, other than the kind of spirits, upon a showing that the country to which the spirits are to be exported prohibits the showing of such information. In regard to kind (class and type) of spirits, the appropriate TTB officer may waive the designation required by [§ 5.63(a)(2) of this chapter](/current/title-27/section-5.63#p-5.63\(a\)\(2\)), only to the extent that the label need not bear the word “diluted” for distilled spirits bottled below the minimum bottling proof, and provided that this is in accordance with the rules of the country to which the product is to be exported.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201), [5301](https://www.govinfo.gov/link/uscode/26/5301))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
#### § 19.520 Spirits for shipment to Puerto Rico.
Spirits removed for shipment to Puerto Rico with benefit of drawback or without payment of tax in accordance with [part 28 of this chapter](/current/title-27/part-28) are subject to the provisions of [part 5 of this chapter](/current/title-27/part-5) in regard to labeling and standards of fill for bottles.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
### Closure Requirements
#### § 19.523 Affixing closures.
Each bottle or other container of spirits having a capacity of one gallon (3.785 liters) or less must have a closure or other device securely affixed to the container prior to withdrawal from bond or customs custody. The closure or other device must be constructed in such a manner as to require breaking in order to gain access to the contents of the container.
([26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301))
#### § 19.525 Reclosing.
A proprietor may reclose bottles of distilled spirits filled on bonded premises as provided in [subpart N of this part](/current/title-27/part-19/subpart-N). A proprietor may also reclose bottles of distilled spirits to which closures or other devices have been affixed as provided in [§ 19.498](/current/title-27/section-19.498).
([26 U.S.C. 5215](https://www.govinfo.gov/link/uscode/26/5215))
## Subpart U \[Reserved]
## Subpart V—Records and Reports
### General Rules for Records
#### § 19.571 Records in general.
Each proprietor of a distilled spirits plant must maintain records that accurately reflect the operations and transactions occurring at the plant. This subpart specifies the types of records that a proprietor must maintain. In general, a proprietor is responsible for recording activities and transactions related to the three primary operational accounts at a plant: production, storage, and processing. A proprietor's records must show receipts in each account, movement from one account to another, transfers in bond, and withdrawals of spirits, denatured spirits, articles, or wines. The types of records that a proprietor must keep include:
(a) All individual transaction forms, records, and summaries that are specifically required by this part;
(b) All supplemental, auxiliary, and source data that a proprietor uses to compile required forms, records, and summaries, and to prepare reports, returns and claims; and
(c) Copies of notices, reports, returns, and approved applications and other documents relating to operations and transactions.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.572 Format of records.
As a general rule, the provisions of this subpart do not require proprietors to keep their records in any particular format or medium. For example, a proprietor may keep required records on paper, on microfilm or microfiche, or on a computer or other electronic medium, so long as the records are readily retrievable in hardcopy format for review by TTB officers as necessary. The required records may consist of documents created in the ordinary course of business, rather than documents created expressly to meet the requirements of this part, provided that those documents:
(a) Contain all of the relevant information required under this part;
(b) Are consistent with the general standards of clarity and accuracy; and
(c) Can be readily understood by TTB personnel.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.573 Location of required records.
A proprietor may keep the records required by this part at the distilled spirits plant where operations or transactions occur or at a central recordkeeping location maintained by the proprietor. If a proprietor keeps the required records at any location other than the distilled spirits plant where operations or transactions occur, the proprietor must provide a letterhead notice to the Director, National Revenue Center, of the location where the records are kept.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.574 Availability of records.
The records required by this part must be available for inspection by the appropriate TTB officer during normal business hours. If a proprietor keeps the records at a location other than the distilled spirits plant where operations or transactions occur, the proprietor upon request must make them available at the distilled spirits plant premises undergoing a TTB audit or inspection. The records must be produced within two days of the request except that data accumulated on cards, tapes, discs, or other accepted record media must be retrievable within five business days. Applicable data processing programs must be made available for examination if requested by any authorized TTB officer.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.575 Retention of records.
A proprietor must retain any records required by this part for a period of not less than three years from the date of the record or the date of the last entry required to be made, whichever is later. However, the appropriate TTB officer may require a proprietor to keep records for an additional period not exceeding three years in any case where such retention is deemed appropriate for the protection of the revenue.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.576 Preservation of records.
A proprietor must maintain required records in a manner that will ensure their readability and availability for inspection. Whenever the condition of any record will render it unsuitable for its intended or continued use, the proprietor must create an accurate and legible reproduction of the original record. TTB will treat the reproduced record as an original record, and all of the provisions of law that would apply to the original record also will apply to the reproduced record.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207), [5555](https://www.govinfo.gov/link/uscode/26/5555))
#### § 19.577 Documents that are not records.
The term “records” as used in this subpart does not include qualifying documents required under [subpart D of this part](/current/title-27/part-19/subpart-D), or bonds required under [subpart F of this part](/current/title-27/part-19/subpart-F). Approved active formulas, plant registrations and similar records are permanent in nature and must be maintained in a permanent file.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.578 Financial records and books of account.
See [§ 70.22 of this chapter](/current/title-27/section-70.22) for information regarding TTB examination of financial records and books of account.
([26 U.S.C. 7602](https://www.govinfo.gov/link/uscode/26/7602))
#### § 19.580 Time for making entries in records.
(a) *Daily record entries.* A proprietor must make entries required by this part in records on a daily basis for each transaction or operation and not later than the close of the next business day after the transaction or operation occurred. However, if a proprietor prepares supplemental or auxiliary records when an operation or transaction occurs and those records contain all of the required information, the proprietor may make entries into the daily records not later than the close of business on the third business day following the day on which the transaction or operation occurred.
(b) *Tax records.* A proprietor must enter the tax determination and the taxable removal of distilled spirits in the proprietor's records on the day on which tax determination and taxable removal occurs.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.581 Details of daily records.
The daily records required by this part must include the following information:
(a) The date of each operation or transaction;
(b) For spirits, the kind and the quantity in proof gallons;
(c) For denatured spirits, the formula number and the quantity in wine gallons;
(d) For distilling materials produced on the premises, the kind and the quantity in wine gallons. For chemical byproducts containing spirits, articles, spirits residues, and distilling material received on the premises, the kind, the percent of alcohol by volume, and the quantity in wine gallons;
(e) For wines, the kind, the quantity in wine gallons and the percent of alcohol by volume;
(f) For alcoholic flavoring materials, the kind, formula number (if any), and the quantity in proof gallons;
(g) For containers (other than those bearing lot identification numbers) or cases, the type, serial number, and the number of containers (including identifying marks on bulk conveyances), or cases. However, a proprietor may withdraw spirits in cases without recording the serial numbers of the cases, unless the appropriate TTB officer requires such recording. A proprietor must record package identification numbers, number of packages, and proof gallons per package on deposit records in the storage account reflecting production gauges or filling of packages from tanks; however, the proprietor need show only the lot identification, number of packages, and proof gallons per package for transactions in packages of spirits unless package identification numbers are specifically required by this part;
(h) For materials intended for use in the production of spirits, the kind and the quantity, with liquids recorded in gallons and other nonliquid materials recorded by weight;
(i) For each receipt or removal of material, spirits, denatured spirits, articles, spirits residues, and wine, the name and address of the consignee or consignor, and, if any, the plant number or industrial use permit number of such person;
(j) The serial number of any tank used;
(k) On the transaction record, the rate of duty paid on imported spirits;
(l) Identification of imported spirits, spirits from Puerto Rico, and spirits from the Virgin Islands, or a showing that a distilled spirits product contains such spirits; and
(m) Identification of spirits that are to be used exclusively for fuel use.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.582 Conversion from metric to U.S. units.
When liters are converted to wine gallons, the proprietor must multiply the quantity in liters by 0.264172 to determine the equivalent quantity in wine gallons. If cases contain the same quantity of spirits of the same proof in metric bottles, the proprietor must convert the cases to U.S. units by multiplying the liters in one case by the number of cases to be converted, as follows:
(a) If the conversion from liters to U.S. units is made before multiplying by the number of cases, the quantity in U.S. units must be rounded to the sixth decimal; or
(b) If the conversion is made after multiplying by the number of cases, the quantity in U.S. units must be rounded to the nearest hundredth. Once converted to wine gallons, the proprietor must determine the proof gallons of spirits in cases as provided in [§ 30.52 of this chapter](/current/title-27/section-30.52).
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
### Production Records
#### § 19.584 Materials for the production of distilled spirits.
A proprietor must maintain daily records of materials produced or received for, or used in, the production of distilled spirits. This includes records covering:
(a) Receipt and use of fermenting material or other nonalcoholic materials for the production of distilled spirits;
(b) Receipt and use of spirits, denatured spirits, articles, and spirits residues for redistillation;
(c) Distilling materials produced, received for production, and used in the production of distilled spirits;
(d) Receipt of beer from brewery premises without payment of tax, and receipt of beer removed from brewery premises upon determination of tax as authorized by [26 U.S.C. 5222(b)](https://www.govinfo.gov/link/uscode/26/5222);
(e) Distilling material destroyed in, or removed from the premises before distillation, including residue of beer returned to the producing brewery;
(f) The quantity of fusel oils or other chemicals removed from the production system, including the disposition thereof, with the name of the consignee, if any, together with the results of alcohol content tests performed on those fusel oils or chemicals; and
(g) The kind and quantity of distillates removed from the production system pursuant to [§ 19.307](/current/title-27/section-19.307).
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.585 Production and withdrawal records.
(a) *Production of spirits.* The following rules apply to the maintenance of production records:
(1) A proprietor must maintain daily production account records of the kind and quantity of distilled spirits produced. The records must show the gauge of spirits in each receiving tank and the production gauge (in proof gallons) of spirits removed from each tank. If packages are filled according to the production gauge for immediate withdrawal from bond, the proprietor must record the details of the individual packages filled;
(2) A proprietor must maintain daily records of spirits lost or destroyed prior to the production gauge; and
(3) A proprietor must maintain production account records in a manner that will ensure the tracing of spirits through the distilling system to the mash or other material from which the spirits were produced and that will clearly establish the identity of the spirits.
(b) *Withdrawals from production.* A proprietor must maintain daily records of the distilled spirits withdrawn from the production account. This includes withdrawals for:
(1) Taxpayment;
(2) Use of the United States;
(3) Hospital, scientific or educational use;
(4) Export;
(5) Transfer to a foreign trade zone;
(6) Transfer to customs bonded manufacturing warehouse;
(7) Use as supplies on vessels and aircraft;
(8) Use in wine production;
(9) Transfer in bond to other bonded premises;
(10) Transfer to storage operations;
(11) Transfer to processing operations; and
(12) Research, development, or testing.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.586 Byproduct spirits production records.
Each proprietor who manufactures substances other than spirits in a process that produces spirits as a byproduct must maintain daily production records of:
(a) The kind and quantity of materials received and used in production;
(b) The kind and quantity of spirits produced and disposed of; and
(c) The kind and quantity of other substances produced.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
### Storage Records
#### § 19.590 Storage operations.
(a) *Receipts.* A proprietor must maintain daily records of the kind and quantity of distilled spirits or wines received in the storage account. The proprietor must use copies of gauge records, transfer records, and tank records of wines or spirits to record spirits or wines received into storage. Receipts into storage include:
(1) Receipts of spirits or wines for deposit into storage;
(2) Receipts by transfer in bond;
(3) Receipts of spirits from customs custody; and
(4) Receipts of spirits returned to bond.
(b) *Storage activities.* A proprietor must maintain daily records of the activities and operations within the storage account at the plant, including records regarding:
(1) The mingling of spirits;
(2) Spirits in tanks;
(3) Spirits or wines filled into packages from tanks and retained for storage;
(4) Spirits of less than 190° of proof or wines transferred from one tank to another;
(5) The transfer of spirits or wine from one package to another; and
(6) The addition of oak chips to spirits and the addition of caramel to brandy or rum.
(c) *Withdrawals from storage.* A proprietor must maintain daily records of the kind and quantity of distilled spirits or wines withdrawn from the storage account, including records regarding:
(1) Taxpayment;
(2) Use by the United States;
(3) Hospital, scientific or educational use;
(4) Export;
(5) Transfer to a foreign trade zone;
(6) Transfer to a customs bonded manufacturing warehouse;
(7) Use as supplies on vessels and aircraft;
(8) Transfer to a bonded winery;
(9) Transfer to a customs bonded warehouse;
(10) Use for research, development, or testing;
(11) Transfer to processing operations;
(12) Transfer to production operations;
(13) Transfer in bond to other bonded premises;
(14) Destruction; and
(15) Loss.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.591 Package summary records.
(a) *General.* A proprietor must keep current summary records for each kind of spirits or wine in packages that show the spirits or wine deposited in, withdrawn from, and remaining in, the storage account. A proprietor must keep separate records for domestic spirits, imported spirits, Virgin Islands spirits, Puerto Rican spirits, and wine. A proprietor may keep package records for spirits according to the season or the year in which the packages were filled with spirits.
(b) *Arrangement of records.* The proprietor must prepare and arrange separately package summary records:
(1) For domestic spirits, alphabetically by State and by the plant number and name of the producer or warehouseman;
(2) For imported spirits, alphabetically by the country of origin and by the name of the producer;
(3) For Puerto Rican or Virgin Islands spirits, by the name of the producer in Puerto Rico or the Virgin Islands; and
(4) For wine, by the kind and the tax rate imposed by [26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041).
(c) *Details of records.* Package summary records must show the following details:
(1) The date on which each of the summarized transactions occurred;
(2) For spirits, the number of packages and the proof gallons covered by the summary record;
(3) For wine, the number of packages and the wine gallons covered by the summary record;
(4) Any gains or shortages disclosed by inventory or when an account is closed; and
(5) The gallon balances on summary records for spirits and wines remaining in the account at the end of each month.
(d) *Consolidation.* A proprietor must consolidate package summary records at the end of each month, or for lesser periods when required by the appropriate TTB officer, to show, for all types of containers and kinds of spirits, the total proof gallons received in, withdrawn from, and remaining in the storage account.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.592 Tank record of wine and spirits of less than 190° of proof.
A proprietor must keep a record for each tank (including each bulk conveyance) containing wine or spirits of less than 190° of proof. The record must show deposits into, withdrawals from, and the balance remaining in, each tank in the storage account. A proprietor must prepare a new record each time wine or spirits are deposited into an empty tank and must make entries each day that transactions occur. Tank records must show the following details:
(a) The identification of the tank;
(b) The tank record serial number, beginning with “1” for each record initiated on or after January 1 of each calendar year;
(c) The date of each transaction;
(d) For spirits, the kind of spirits and, as applicable,—
(1) For domestic spirits, the plant number and name of the producer, or, for blended rums or brandies, the plant number and name of the warehouseman;
(2) For imported spirits, the country of origin and the name and plant number of the warehouseman;
(3) For Puerto Rican or Virgin Island spirits, the name of the producer;
(4) The number and average proof gallon content of packages of spirits dumped in the tank, or a notation indicating the deposit of spirits in the tank by pipeline; and
(5) If subject to age labeling requirements under [part 5 of this chapter](/current/title-27/part-5), the age of the youngest spirits in years, months and days, each time that spirits are deposited;
(e) For wine, the kind and the tax rate imposed by [26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041);
(f) The wine gallons of wine, or proof gallons of spirits, deposited into the tank;
(g) The wine gallons of wine, or proof gallons of spirits, withdrawn from the tank;
(h) Any related transaction form or record and its serial number for deposits and withdrawals;
(i) The wine gallons of wine, or proof gallons of spirits, remaining in the tank, recorded at the end of each month; and
(j) Any gain or loss disclosed by inventory or on emptying of the tank.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.593 Tank summary record for spirits of 190° or more of proof.
(a) *General.* A proprietor must keep a tank summary record for spirits of 190° or more of proof held in storage tanks. The record must show the proof gallons deposited into, withdrawn from, and remaining in the tanks in the storage account. The proprietor must prepare a separate tank summary record for each kind of spirits of 190° or more of proof. The proprietor must make an entry for each day on which a transaction occurs, and the entry must summarize the individual transactions shown on the deposit records.
(b) *Arrangement of records.* The proprietor must prepare and arrange the tank summary records as follows:
(1) For domestic spirits, by the name of the producer or warehouseman;
(2) For imported spirits, by the name of the warehouseman who received the spirits from customs custody; and
(3) For spirits from Puerto Rico or the Virgin Islands, by the name of the producer in Puerto Rico or the Virgin Islands.
(c) *Details of records.* Tank summary records must show the following details:
(1) The kind of spirits;
(2) The date of the transactions summarized;
(3) The proof gallons deposited;
(4) The proof gallons withdrawn;
(5) The proof gallons remaining in tanks; and
(6) Any gain or loss disclosed by inventory or on emptying of the tanks covered by the tank summary record.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
### Processing Records
#### § 19.596 Processing records in general.
A proprietor who processes spirits must maintain daily records of transactions and operations in the processing account relating to:
(a) The manufacture of distilled spirits products;
(b) Finished products;
(c) The denaturation of spirits; and
(d) The manufacture of articles.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.597 Manufacturing records.
(a) *Receipts.* A proprietor must maintain daily records of the spirits, wines, and alcoholic flavoring materials received into the processing account for the manufacture of distilled spirits products. Total receipts must be summarized showing the amount of:
(1) Spirits received from storage or production at the same plant;
(2) Spirits received from other plants by transfer in bond;
(3) Spirits received from customs custody;
(4) Spirits received by return to bond;
(5) Wines received from the storage at the same plant;
(6) Wines received by transfer in bond; and
(7) Alcoholic flavoring materials received.
(b) *Additional receipt information.* The records described in [paragraph (a)](/current/title-27/section-19.597#p-19.597\(a\)) of this section must also show the name and plant number of the producer or processor (or the warehouseman in the case of blended beverage rums or brandies or spirits of 190° of more of proof received from storage) for domestic spirits, the name of the importer and the country of origin for imported spirits, and the name and address of the producer for wines and alcoholic flavoring materials.
(c) *Usage.* A proprietor must maintain daily records of the spirits, wines, and alcoholic flavoring materials and other ingredients used in the manufacture of distilled spirits products as provided in [§ 19.598](/current/title-27/section-19.598).
(d) *Bottling or packaging.* A proprietor must maintain daily records of the bottling or packaging of each batch of spirits as provided in [§ 19.599](/current/title-27/section-19.599).
(e) *Other dispositions.* A proprietor must maintain daily records of all other dispositions of spirits, wines and alcoholic flavoring materials, including, but not limited to, records regarding the following:
(1) Spirits, wines, and alcoholic flavoring materials removed from the distilled spirits plant premises;
(2) Transfers in bond;
(3) Spirits transferred to the production account for redistillation;
(4) Redistillation of spirits, including the production of gin or vodka by other than original and continuous distillation;
(5) Voluntary destruction of spirits or wines; and
(6) Losses of spirits, wines and alcoholic flavoring materials.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.598 Dump/batch records.
A proprietor who processes, mixes, or blends spirits in the processing account must maintain “dump/batch” records setting forth detailed information regarding the processing of the spirits. The dump/batch records must contain each of the following items of information that applies to the processing in question:
(a) Serial number of the record or batch number;
(b) Name and distilled spirits plant number of the producer;
(c) Kind and age of the spirits used, together with a notation, if applicable, that the spirits—
(1) Were treated with oak chips;
(2) Contain added caramel;
(3) Were imported; or
(4) Are from Puerto Rico or the Virgin Islands;
(d) Serial number of the tank or container to which ingredients are added for use;
(e) Serial or identification number of the tank or container from which spirits are removed;
(f) Quantity by ingredient of other alcoholic ingredients used, showing wine in wine gallons, the percentage of alcohol by volume and proof, and alcoholic flavoring materials in proof gallons;
(g) Serial number of the source transaction record (for example, the record for spirits previously dumped);
(h) Date of each transaction;
(i) Quantity, by ingredient (other than water), of nonalcoholic ingredients used;
(j) Formula number;
(k) Quantity of ingredients used in the batch that have been previously dumped, reported on dump records, and held in tanks or containers;
(l) Total quantity in proof gallons of all alcoholic ingredients used;
(m) Identification of each record to which spirits are transferred;
(n) Quantity of each lot transferred;
(o) Date of each transfer;
(p) Total quantity in proof gallons of the product transferred;
(q) Batch gain or loss; and
(r) For each batch to be tax determined in accordance with [§ 19.247](/current/title-27/section-19.247), the effective tax rate.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.599 Bottling and packaging records.
A proprietor who bottles or packages spirits must prepare a “bottling and packaging” record for each lot of spirits bottled or packaged. The bottling and packaging record must contain the following information:
(a) Bottling tank number;
(b) Serial number of the record (which must commence with “1” at the start of each calendar or fiscal year, or be a unique identifying number that is not repeated);
(c) Formula number (if any) under which the batch was produced;
(d) Serial number of the dump/batch record from which the spirits were received;
(e) Kind of distilled spirits product (including age, if claimed);
(f) Details of the tank gauge (including proof, wine gallons, proof gallons, and, if applicable, obscuration);
(g) The date the bottles or packages were filled;
(h) The size of the bottles or packages filled, the number of bottles per case, and the number of cases or packages filled;
(i) Serial numbers by brand name of the cases or other containers filled;
(j) Proof of the spirits bottled or packaged (if different from the proof recorded under [paragraph (f)](/current/title-27/section-19.599#p-19.599\(f\)) of this section);
(k) Total quantity bottled, packaged, or otherwise disposed of in bulk;
(l) Losses or gains of the distilled spirits product; and
(m) If labeled as bottled in bond, a statement to that effect.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-92a, [76 FR 19908](https://www.federalregister.gov/citation/76-FR-19908), Apr. 11, 2011]
#### § 19.600 Alcohol content and fill test record.
A proprietor must maintain a record of the results of all tests of alcohol content and quantity (fill) conducted. The record must include information that will enable TTB officers to determine whether the proprietor is complying with the requirements of [§ 19.356](/current/title-27/section-19.356). The record of alcohol content and fill tests must contain, at a minimum, the following information:
(a) Date and time of the test;
(b) Bottling tank number;
(c) Serial number of the bottling record;
(d) Bottling line designation;
(e) Size of bottles filled;
(f) Number of bottles tested;
(g) Labeled alcohol content;
(h) Alcohol content found by the test;
(i) Percentage of variation from 100 percent fill; and
(j) Corrective action taken, if any.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207), [5555](https://www.govinfo.gov/link/uscode/26/5555))
#### § 19.601 Finished products records.
(a) *Bottling and packaging.* A proprietor must maintain daily transaction records and a daily summary record of the quantity of finished products bottled or packaged within the processing account at the distilled spirits plant. These records must show:
(1) The beginning and ending quantity of bottled or packaged spirits on hand;
(2) The quantity of spirits bottled or packaged; and
(3) Inventory overages.
(b) *Disposition of finished products.* A proprietor must also maintain daily records of the disposition of finished products from the processing account at the distilled spirits plant. These disposition records must show any spirits:
(1) Transferred in bond (packages);
(2) Withdrawn tax determined;
(3) Withdrawn free of tax for U.S., hospital, scientific, or educational use;
(4) Withdrawn without payment of tax for addition to wine;
(5) Withdrawn for exportation, for vessels and aircraft supplies and for transfer to a customs bonded warehouse;
(6) Transferred to the production account for redistillation;
(7) Withdrawn for research, development or testing (including government samples);
(8) Voluntarily destroyed;
(9) Dumped for further processing;
(10) Recorded losses or shortages of finished product; and
(11) Disposed of as samples of the finished product.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-119, [79 FR 17033](https://www.federalregister.gov/citation/79-FR-17033), Mar. 27, 2014]
#### § 19.602 Redistillation records.
If a proprietor redistills spirits in the processing account (as in the production of gin or vodka by redistillation), the proprietor must prepare a record of the redistillation. The record must show the kind and quantity of the spirits entered into the distilling system and the kind and quantity of the spirits removed from the distilling system upon completion of the process.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.603 Liquor bottle records.
A proprietor must maintain records of the receipt, use, and disposition of liquor bottles.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.604 Rebottling, relabeling, and reclosing records.
(a) If a proprietor dumps spirits for rebottling, the proprietor must prepare in accordance with [§ 19.599](/current/title-27/section-19.599) a bottling and packaging record that covers the rebottling operation.
(b) If a proprietor relabels or recloses bottled products in accordance with [§ 19.363](/current/title-27/section-19.363), the proprietor must maintain records of the operation that reflect the following:
(1) The identity of the spirits relabeled or reclosed;
(2) The date of the transaction;
(3) The serial numbers of any cases involved; and
(4) The total number of bottles.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
### Denaturation and Article Manufacture Records
#### § 19.606 Denaturation records.
(a) *General.* A processor that is authorized to denature spirits must maintain daily records of denaturation showing the following information:
(1) Spirits that are received for, and used in, denaturation;
(2) Spirits, denatured spirits, recovered denatured spirits, spirits residues, and articles that are redistilled in the processing account for denaturation;
(3) Kind and quantity of denaturants received and used in denaturation of spirits or otherwise disposed of;
(4) Conversion of denatured alcohol formulas in accordance with [§ 19.392](/current/title-27/section-19.392);
(5) Denatured spirits produced, received, stored in tanks, filled into containers, removed, or otherwise disposed of;
(6) Recovered denatured spirits or recovered articles received, restored, or redenatured;
(7) Packages of denatured spirits filled, with a separate record for each formula number and filed in numerical order according to the serial number or lot identification number of the packages;
(8) Losses of denatured spirits; and
(9) Disposition of denatured spirits.
(b) *Record of denaturation.* Each time that a proprietor denatures spirits, the proprietor must prepare a record that shows the formula number, the tank in which denaturation takes place, the proof gallons of the spirits before denaturation, the quantity of each denaturant used (in gallons, or in pounds or ounces), and the wine gallons of denatured spirits produced.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.607 Article manufacture records.
Each processor qualified to manufacture articles must maintain daily manufacturing and disposition records, arranged by the name and authorized Use Code of the article, in the manner provided in [part 20 of this chapter](/current/title-27/part-20).
\[T.D. TTB-140, [81 FR 59455](https://www.federalregister.gov/citation/81-FR-59455), Aug. 30, 2016]
### Tax Records
#### § 19.611 Records of tax determination in general.
(a) *Taxable withdrawals.* Except as otherwise provided in this part, a proprietor must gauge and determine the tax on spirits when they are withdrawn from bond. When spirits are withdrawn from bond, the proprietor must also prepare a record of the tax determination in accordance with [paragraph (b)](/current/title-27/section-19.611#p-19.611\(b\)) of this section.
(b) *Form of record.* A serially numbered invoice or shipping document, signed or initialed by an agent or employee of the proprietor, will constitute the record of tax determination. Although neither the proof gallons nor the effective tax rate must be shown on the record of tax determination, each invoice or shipping document must contain information sufficient to enable TTB officers to determine the total proof gallons and, if applicable, each effective tax rate and the proof gallons removed at each effective tax rate. For purposes of this part, the total proof gallons calculated from each invoice or shipping document constitutes a single withdrawal.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.612 Summary records of tax determinations.
Each proprietor that withdraws distilled spirits on determination of tax, but before payment of tax, must maintain a daily summary record of tax determinations. The summary record must show for each day on which tax determinations occur:
(a) The serial numbers of the records of tax determination, the total proof gallons rounded to the nearest tenth proof gallon on which tax was determined at each effective tax rate, and the total tax; or
(b) The serial numbers of the records of tax determination, the total tax for each record of tax determination, and the total tax.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.613 Average effective tax rate records.
(a) *Daily record.* For each distilled spirits product to be tax determined using an average effective tax rate in accordance with [§ 19.249](/current/title-27/section-19.249), the proprietor must prepare a daily summary record showing:
(1) The serial number of the batch record of each batch of the product that will be bottled or packaged, in whole or in part, for domestic consumption;
(2) The proof gallons in each such batch derived from distilled spirits, eligible wine, and eligible flavors; and
(3) The tax liability of each such batch determined as follows—
(i) Proof gallons of all distilled spirits (exclusive of distilled spirits derived from eligible flavors), multiplied by the tax rate prescribed in [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001);
(ii) Wine gallons of each eligible wine, multiplied by the tax rate which would be imposed on the wine under [26 U.S.C. 5041(b)(1)](https://www.govinfo.gov/link/uscode/26/5041), (2), or (3) but for its removal to bonded premises; and
(iii) Proof gallons of all distilled spirits derived from eligible flavors, to the extent that those distilled spirits exceed 2.5 percent of the proof gallons in the product, multiplied by the tax rate prescribed in [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001).
(b) *Monthly records.* At the end of each month during which the product is manufactured, the proprietor must:
(1) Determine the total proof gallons and total tax liability for each summary record prescribed by [paragraph (a)](/current/title-27/section-19.613#p-19.613\(a\)) of this section;
(2) Add the sums derived under [paragraph (b)(1)](/current/title-27/section-19.613#p-19.613\(b\)\(1\)) of this section to the like sums determined for each of the preceding 5 months; and
(3) Divide the total tax liabilities by the total proof gallons.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.614 Inventory reserve records.
(a) *General.* For each eligible distilled spirits product to be tax determined in accordance with [§ 19.250](/current/title-27/section-19.250), the proprietor must establish an inventory reserve account, in accordance with this section.
(b) *Deposit records.* For each batch of the bottled or packaged product, the proprietor must enter into the inventory reserve account a deposit record, which may be combined with the bottling and packaging record required by [§ 19.599](/current/title-27/section-19.599), showing:
(1) The name of the product;
(2) The bottling and packaging record serial number;
(3) The date the bottling or packaging was completed;
(4) The total proof gallons bottled and packaged; and
(5) The effective tax rate of the product computed in accordance with [§ 19.246](/current/title-27/section-19.246).
(c) *Depletions.* The inventory reserve account for each product must be depleted in the same order in which the deposit records were entered into the account. The proprietor must record a depletion for each disposition (for example, a taxable removal, an exportation, or an inventory shortage or breakage) by entering on the deposit record:
(1) The transaction date;
(2) The transaction record serial number;
(3) The proof gallons disposed of; and
(4) The proof gallons remaining. If any depletion exceeds the quantity of product remaining on the deposit record, the proprietor must deplete the remaining quantity, close the deposit record, and then deplete the remainder of the transaction from the next deposit record.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.615 Standard effective tax rate records.
For each product to be tax determined using a standard effective tax rate in accordance with [§ 19.248](/current/title-27/section-19.248), a proprietor must prepare a record of the standard effective tax rate computation showing, for one proof gallon of the finished product, the following information:
(a) The name of the product;
(b) The least quantity of each eligible flavor that will be used in the product, in proof gallons, or 0.025 proof gallon, whichever is less;
(c) The least quantity of each eligible wine that will be used in the product, in proof gallons;
(d) The greatest effective tax rate applicable to the product, calculated in accordance with [§ 19.246](/current/title-27/section-19.246) with the values indicated in [paragraphs (a)](/current/title-27/section-19.615#p-19.615\(a\)) and [(b)](/current/title-27/section-19.615#p-19.615\(b\)) of this section; and
(e) The date on which the use of the standard effective tax rate commenced.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
### Other Required Records
#### § 19.616 Records of samples.
(a) *Required records.* A proprietor must maintain records of all samples taken under [§§ 19.434](/current/title-27/section-19.434) and [19.435](/current/title-27/section-19.435). The sample record must show the:
(1) The date that the samples were taken;
(2) The account from which taken;
(3) The purpose for which taken;
(4) The size and number of samples taken;
(5) The kind of spirits;
(6) The disposition of each sample (for example, destroyed, returned to containers or the distilling system, retained for library purposes); and
(7) The name and address of the recipient of the sample if a sample is to be analyzed or tested elsewhere than at the distilled spirits plant where taken.
(b) *Sample schedule.* When a proprietor takes samples pursuant to an established schedule, the proprietor may maintain the schedule as the required record if it contains the information required by paragraphs (a)(2) through (a)(7).
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.617 Destruction records.
Each time that a proprietor voluntarily destroys spirits, denatured spirits, articles, or wines, the proprietor must prepare a record of the destruction that sets forth:
(a) The identification of the spirits, denatured spirits, articles, or wines, including kind, quantity, elements of gauge, name and permit number of the producer, warehouseman or processor, and identity and type of container;
(b) The date, time, place and manner of the destruction;
(c) A statement that the spirits had, or had not, previously been withdrawn and returned to bond; and
(d) The name and title of any representative of the proprietor who accomplished or supervised the destruction.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.618 Gauge record.
When a gauge record is required by this part, the proprietor must prepare the gauge record in a manner that shows:
(a) The serial number of the gauge record, which must either:
(1) Commence with “1” at the start of each calendar or fiscal year, or
(2) Be a unique identifying number that is not repeated.
(b) From the following, the applicable circumstances requiring the gauge—
(1) Production gauge and entry for deposit in the storage or processing account at the distilled spirits plant where the spirits were produced;
(2) Packaging of spirits or wine filled from a tank in the storage account at the same distilled spirits plant;
(3) Transfer from the processing or storage account to the production account for redistillation;
(4) Repackaging of spirits of 190° or more of proof; or
(5) Gauge on return to bond in production or processing operations of spirits, denatured spirits, recovered spirits, recovered denatured spirits, articles, recovered articles, or spirits residues;
(c) The date of the gauge;
(d) Any related form or record (identification, serial number and date);
(e) The kind of spirits or formula number for denatured spirits;
(f) The proof of distillation (not required for denatured spirits, spirits for redistillation, or spirits of 190° or more of proof);
(g) When containers are to be filled, the type and number of containers;
(h) The age of the spirits;
(i) The name and distilled spirits plant number of the producer or warehouseman; and
(j) The following gauge data—
(1) Package identification, tank number, volumetric or weight gauge details, proof, and wine gallons;
(2) Cooperage identification (“C” for charred, “REC” for recharred, “P” for plain, “PAR” for paraffined, “G” for glued, or “R” for reused, and “PS” if a barrel has been steamed or water soaked before filling);
(3) Entry proof for whiskey;
(4) Proof gallons per filled package; and
(5) Total proof gallons of spirits or wine gallons of denatured spirits, recovered denatured spirits, articles, spirits residues, or wine.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.619 Package gauge record.
When this [part or part 28 of this chapter](/current/title-27/part-28) requires a proprietor to gauge packages of spirits, the proprietor must prepare a package gauge record in a manner that shows:
(a) The date the record is prepared;
(b) The identity of the related transaction form or record, and its serial number;
(c) The name and distilled spirits plant number of the producer or processor. For blended rums or brandies the proprietor must enter the name and plant number of the blending warehouseman. For spirits of 190° or more of proof, the proprietor must enter the name and plant number of the producer or warehouseman, as appropriate and, where the packages have already been marked, the name and distilled spirits plant number marked thereon. For imported spirits, the proprietor must enter the name of the warehouseman who received the spirits from customs custody and the name of the importer. For Virgin Islands or Puerto Rican spirits, the proprietor must enter the name of the producer in the Virgin Islands or Puerto Rico;
(d) The proof of distillation for spirits not over 190° of proof; and
(e) For each package—
(1) The serial or identification number;
(2) The designation for wooden barrels (“C” for charred, “REC” for recharred, “P” for plain, “PAR” for paraffined, “G” for glued, “R” for reused, and “PS” if a barrel has been steamed or water soaked before filling);
(3) The kind of spirits;
(4) The gross weight determined at the time of the original gauge or regauge or at the time of shipment;
(5) The present tare on regauge;
(6) The net weight for filling gauge or regauge;
(7) The proof;
(8) The proof gallons for regauge;
(9) The original proof gallons; and
(10) The receiving weights, when a material difference appears on receipt after transfer in bond of weighed packages.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.620 Transfer record—consignor's responsibility.
When this part requires a consignor proprietor to prepare a transfer record covering spirits, denatured spirits, or wines shipped in bond from its distilled spirits plant, the transfer record must include:
(a) The serial number of the transfer record, which must either:
(1) Commence with “1” at the start of each calendar or fiscal year, or
(2) Be a unique identifying number that is not repeated.
(b) The serial number and date of form TTB F 5100.16 (not required for wine spirits withdrawn without payment of tax for use in wine production);
(c) The name and distilled spirits plant number of the consignor proprietor;
(d) The name and distilled spirits plant number or bonded wine cellar number of the consignee;
(e) The account from which the spirits or wines were removed for transfer (that is, the production, storage, or processing account);
(f) A description of the spirits, denatured spirits, or wine, including—
(1) The name and plant number of the producer, warehouseman, or processor (not required for denatured spirits or wine). For imported spirits transferred in bond between distilled spirits plants, the transfer record must show the name and plant number of the warehouseman or processor who received the spirits from customs custody. For Virgin Islands or Puerto Rican spirits, the transfer record must show the name of the producer in the Virgin Islands or Puerto Rico. For spirits of different producers or warehousemen that have been mixed in the processing account, the transfer record must show the name of the processor;
(2) The kind of spirits or wines. For denatured spirits, the transfer record must show the kind and formula number. For alcohol, the transfer record must show the material from which it was produced. For bulk spirits and for alcohol in packages, the transfer record must show the kind and proof. For other spirits and wines, the transfer record must show the kind designation as specified in [part 4](/current/title-27/part-4) or [part 5 of this chapter](/current/title-27/part-5), as appropriate;
(3) The age (in years, months, and days) and year of production;
(4) The number of packages or cases with their lot identification numbers or serial numbers and dates of fill;
(5) The type of container (if the spirits, denatured spirits or wines are to be transferred by pipeline, the transfer record must show “P/L”);
(6) The proof gallons for distilled spirits, or wine gallons for denatured spirits or wine; and
(7) For distilled spirits products that contain eligible wine or eligible flavors, the transfer record must show the elements necessary to compute the effective tax rate as follows—
(i) Proof gallons of distilled spirits (exclusive of distilled spirits derived from eligible flavors);
(ii) Wine gallons of each eligible wine and the percentage of alcohol by volume of each; and
(iii) Proof gallons of distilled spirits derived from eligible flavors;
(g) A notation to indicate when spirits are being transferred in bond from a production facility to another distilled spirits plant;
(h) The identification of the conveyance;
(i) The identity of the seals, locks, or other devices affixed to the conveyance or package (permanent seals affixed to a conveyance that remain intact need not be recorded on the transfer record when a permanent record is maintained);
(j) The date of transfer; and
(k) The signature and title of the consignor, with a penalty-of-perjury statement as prescribed in [§ 19.45](/current/title-27/section-19.45).
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.621 Transfer record—consignee's responsibility.
(a) When a proprietor receives wine by transfer in bond from a bonded wine cellar as the consignee, that proprietor must complete the transfer record covering the transfer in accordance with [§ 24.284 of this chapter](/current/title-27/section-24.284).
(b) When a proprietor receives spirits from an alcohol fuel plant or from customs custody, or receives spirits, denatured spirits, and wines from the bonded premises of another distilled spirits plant as the consignee, that proprietor must record the results of the receipt by including the following on the related transfer record:
(1) The date of receipt;
(2) A notation that the securing devices on the conveyance were, or were not, intact on arrival (not applicable to denatured spirits or spirits transferred in unsecured conveyances);
(3) The gauge of spirits, denatured spirits, or wine showing the tank number, proof (percent of alcohol by volume for wine) and specifications of the weight or volumetric determination of quantity, wine gallons or proof gallons received, and any losses or gains;
(4) A notation of any excessive in-transit loss, missing packages, tampering, or apparent theft;
(5) The account into which the spirits, denatured spirits, or wines were deposited (that is, production, storage or processing); and
(6) The signature and title of the consignee proprietor, with a penalty-of-perjury statement as prescribed in [§ 19.45](/current/title-27/section-19.45).
(c) When spirits are transferred from customs custody as provided in [subpart P of this part](/current/title-27/part-19/subpart-P), the transfer record must contain the information specified in [§ 27.138 of this chapter](/current/title-27/section-27.138).
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.622 Daily records of wholesale liquor dealer and taxpaid storeroom operations.
(a) *General.* If a proprietor in connection with plant operations conducts wholesale liquor dealer operations, or operates a taxpaid storeroom on, or in the immediate vicinity of, general plant premises, or operates taxpaid storage premises at another location from which distilled spirits are not sold at wholesale, that proprietor must maintain daily records covering the receipt and disposition of all distilled spirits and wines and all reclosing and relabeling operations at those premises. The proprietor must keep separate records for each of those premises.
(b) *Receipt and disposition records.* The records covering receipt and disposition of distilled spirits and wines required under [paragraph (a)](/current/title-27/section-19.622#p-19.622\(a\)) of this section must show:
(1) The date of the transaction (or date of discovery in the case of casualty or theft);
(2) The name and address of each consignor or consignee, as the case may be;
(3) The brand name;
(4) The kind of spirits;
(5) The actual quantity of distilled spirits involved (proof and proof gallons if in packages, wine gallons or liters and proof if in bottles);
(6) The package identification or serial numbers of the packages involved;
(7) The name of the producer; and
(8) The country of origin in the case of imported spirits.
(c) *Case dispositions.* In addition to the records required under [paragraph (b)](/current/title-27/section-19.622#p-19.622\(b\)) of this section, the appropriate TTB officer may, upon notice, require the proprietor to record the case serial numbers for dispositions.
(d) *Reclosing or relabeling.* The records of reclosing and relabeling required under [paragraph (a)](/current/title-27/section-19.622#p-19.622\(a\)) of this section must include:
(1) The date of the transaction;
(2) The serial numbers of the cases involved;
(3) The total number of bottles; and
(4) The name of the bottler.
([26 U.S.C. 5114](https://www.govinfo.gov/link/uscode/26/5114), [5555](https://www.govinfo.gov/link/uscode/26/5555))
#### § 19.623 Records of inventories.
(a) *General.* When conducting an inventory required by this part, the proprietor must prepare a record of the inventory taken. The record must include the following:
(1) The date of the inventory;
(2) The identity of the container(s);
(3) The kind and quantity of spirits, denatured spirits, and wines;
(4) Any losses (whether by theft, voluntary destruction or otherwise), gains or shortages; and
(5) The proprietor's signature, or the signature of the person taking the inventory, with the penalties of perjury statement as prescribed in [§ 19.45](/current/title-27/section-19.45).
(b) *Overages, gains, or losses.* A proprietor must record in the daily records of operations, tank records, dump/batch records, bottling and packaging records, or denaturation records, as appropriate, any overages, gains, or losses disclosed by an inventory.
(c) *Retention.* A proprietor must retain inventory records and make them available for inspection by TTB officers.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.624 Removal of Puerto Rican and Virgin Islands spirits and rum imported from all other areas.
(a) *General.* A proprietor must maintain separate accounts, in proof gallons, of Puerto Rican spirits having an alcoholic content of at least 92 percent rum, of Virgin Islands spirits having an alcoholic content of at least 92 percent rum, and of rum imported from all other areas removed from the processing account on determination of tax. A proprietor may determine the quantities of spirits in these categories that are contained in products mixed in processing with other alcoholic ingredients by using one of the methods referred to in [paragraph (b)](/current/title-27/section-19.624#p-19.624\(b\)), [(c)](/current/title-27/section-19.624#p-19.624\(c\)), or [(d)](/current/title-27/section-19.624#p-19.624\(d\)) of this section. The proprietor must report these quantities on the monthly report of operations referred to in [§ 19.632](/current/title-27/section-19.632).
(b) *Standard method.* For purposes of maintaining the separate accounts referred to in [paragraph (a)](/current/title-27/section-19.624#p-19.624\(a\)) of this section, a proprietor may determine the quantities of spirits in those specified categories based on the least amount of those spirits that may be used in each product as stated in the approved form TTB F 5110.38, Formula for Distilled Spirits Under the Federal Alcohol Administration Act.
(c) *Averaging method.* For purposes of the separate accounts referred to in [paragraph (a)](/current/title-27/section-19.624#p-19.624\(a\)) of this section, a proprietor may determine the quantities of spirits in those specified categories by computing the average quantity of those spirits contained in all batches of the same product formulation manufactured during the preceding six-month period. The average must be adjusted at the end of each month in order to include only the preceding six-month period.
(d) *Alternative method.* If a proprietor wishes to use a method for determining the quantities of spirits as an alternative for a method prescribed in [paragraphs (b)](/current/title-27/section-19.624#p-19.624\(b\)) or [(c)](/current/title-27/section-19.624#p-19.624\(c\)) of this section, the proprietor must file an application with the appropriate TTB officer. The written application must specifically describe the proposed alternative method and must explain the reasons for using the alternative method.
([26 U.S.C. 5555](https://www.govinfo.gov/link/uscode/26/5555), [7652](https://www.govinfo.gov/link/uscode/26/7652))
#### § 19.625 Shipping records for spirits and specially denatured spirits withdrawn free of tax.
(a) *General.* A proprietor must prepare a shipping record when:
(1) Spirits are withdrawn free of tax in accordance with [§§ 19.424(a)](/current/title-27/section-19.424#p-19.424\(a\)) through [(c)](/current/title-27/section-19.424#p-19.424\(c\));
(2) Specially denatured spirits are withdrawn free of tax in accordance with [§§ 19.424(d)](/current/title-27/section-19.424#p-19.424\(d\)) and [19.427](/current/title-27/section-19.427); and
(3) Samples of specially denatured spirits in excess of five gallons are withdrawn in accordance with [§ 19.427(c)](/current/title-27/section-19.427#p-19.427\(c\));
(b) *Form of record.* The shipping record referred to in [paragraph (a)](/current/title-27/section-19.625#p-19.625\(a\)) of this section may be any commercial document, such as an invoice or bill of lading, so long as it reflects the following information:
(1) The name and address of the consignor;
(2) A serial number;
(3) The date of shipment;
(4) The name, address, and permit number of the consignee;
(5) The kind of the spirits;
(6) The proof of the spirits;
(7) The formula number(s), for specially denatured spirits;
(8) The number and size of the shipping containers;
(9) The package identification numbers or serial numbers of the shipping containers; and
(10) The total wine gallons (specially denatured spirits) or the total proof gallons (tax-free alcohol).
(c) *Disposition of the shipping record.* The proprietor must forward a copy of the shipping record to the company that receives the spirits and must retain a copy for its files.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.626 Records of distilled spirits shipped to manufacturers of nonbeverage products.
(a) *General.* When a proprietor ships distilled spirits to a manufacturer of nonbeverage products, the proprietor must prepare a record of the shipment, forward the original to the consignee, and retain a copy.
(b) *Form of record.* The record of shipment referred to in [paragraph (a)](/current/title-27/section-19.626#p-19.626\(a\)) of this section may consist of either the record of tax determination required by [§ 19.611](/current/title-27/section-19.611) or any other document that contains the necessary information specified in [paragraph (c)](/current/title-27/section-19.626#p-19.626\(c\)) of this section.
(c) *Required information.* The record of shipment required under this section must contain the following information:
(1) The name, address, and registry number of the proprietor;
(2) The date of shipment;
(3) The name and address of the consignee;
(4) The kind, proof, and quantity of distilled spirits in each container;
(5) The number of shipping containers of each size;
(6) The package identification numbers or serial numbers of the containers;
(7) The serial number of the applicable record of tax determination; and
(8) For distilled spirits containing eligible wine or eligible flavors, the effective tax rate.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201), [5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.627 Alternating premises record.
When distilled spirits plant bonded premises are alternated to or from bonded or taxpaid wine, brewery, manufacturer of nonbeverage products, or general premises, under an approved alternation plan described in the plant registration, the proprietor must record in a logbook, or must maintain in commercial records retrievable and available for TTB inspection upon request, the following information:
(a) The date and hour of the alternation;
(b) The kind of premises being curtailed, including the plant identification number, if applicable;
(c) The kind of premises being extended, including the plant identification number, if applicable;
(d) The identity of the special diagrams in the registration documents depicting the premises before and after the alternation; and
(e) The purpose of the alternation.
([26 U.S.C. 5555](https://www.govinfo.gov/link/uscode/26/5555))
### Filing Forms and Reports
#### § 19.631 Submission of transaction forms.
When required to submit a transaction form to the appropriate TTB officer under this part, the proprietor must submit the form no later than the close of business of the third business day following the day on which the transaction took place.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.632 Submission of monthly reports.
(a) Each proprietor must submit monthly reports of its distilled spirits plant operations to TTB in accordance with [paragraph (b)](/current/title-27/section-19.632#p-19.632\(b\)) of this section. The proprietor must submit the original reports to TTB and must retain a copy for its records. The required monthly report forms are as follows:
(1) Monthly Report of Production Operations, form TTB F 5110.40, except that no report is required when production operations are suspended as provided in [§ 19.292](/current/title-27/section-19.292);
(2) Monthly Report of Storage Operations, form TTB F 5110.11;
(3) Monthly Report of Processing Operations, form TTB F 5110.28; and
(4) Monthly Report of Processing (Denaturing) Operations, form TTB F 5110.43.
(b) Each proprietor must submit the monthly reports specified in [paragraph (a)](/current/title-27/section-19.632#p-19.632\(a\)) of this section to the Director, National Revenue Center, not later than the 15th day of the month following the close of the reporting period. A proprietor may submit monthly reports in either paper format or electronically via TTB Pay.gov.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.634 Computer-generated reports and transaction forms.
TTB will accept computer-generated reports of operations and transaction forms made using a computer printer on plain white paper without preapproval from TTB if they conform to the following standards:
(a) The computer-generated report or form must approximate the physical layout of the corresponding TTB report or form, although the typeface may vary;
(b) The text of the computer-generated report or form including each line entry, must exactly match the official TTB report or form; and
(c) Each penalty of perjury statement specified for the TTB report or form must be reproduced in its entirety.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
## Subpart W—Production of Vinegar by the Vaporizing Process
### Vinegar Plants in General
#### § 19.641 Application.
(a) *In general.* This subpart covers the production of vinegar by the vaporizing process. It prescribes rules regarding the qualification, location, construction, and operation of vinegar plants and the maintenance of records of operations at vinegar plants.
(b) *Application of other regulations.* As a general rule, the provisions of subparts A through V and [subpart X of this part](/current/title-27/part-19/subpart-X) do not apply to vinegar plants using the vaporizing process. However, the following sections do apply to vinegar plants using the vaporizing process: [§ 19.1](/current/title-27/section-19.1) (definitions); [§ 19.11](/current/title-27/section-19.11) (right of entry and examination); [§ 19.12](/current/title-27/section-19.12) (furnishing facilities and assistance); [§ 19.52](/current/title-27/section-19.52) (restriction on locations of plants); [§ 19.55](/current/title-27/section-19.55) (other businesses); [§ 19.79](/current/title-27/section-19.79) (registry of stills); [§ 19.573](/current/title-27/section-19.573) (location of required records); [§ 19.574](/current/title-27/section-19.574) (availability of records); [§ 19.575](/current/title-27/section-19.575) (retention of records); and [§ 19.576](/current/title-27/section-19.576) (preservation of records).
([26 U.S.C. 5501-5505](https://www.govinfo.gov/link/uscode/26/5501))
### Qualification, Construction, and Equipment Requirements for Vinegar Plants
#### § 19.643 Qualification requirements.
Before beginning the business of manufacturing vinegar by the vaporizing process, a person must make written application to the appropriate TTB officer and receive approval of the application from TTB. The application must include:
(a) The applicant's name and principal business address (including the plant address if different from the applicant's principal business address);
(b) A description of the plant premises;
(c) A description of the operations to be conducted; and
(d) A description of each still, including the name and address of the owner, the kind of still and its capacity, and the purpose for which the still was set up.
([26 U.S.C. 5502](https://www.govinfo.gov/link/uscode/26/5502))
#### § 19.644 Changes after original qualification.
If there is any change in the information that was provided in an approved application, the proprietor of the vinegar plant must immediately notify the appropriate TTB officer in writing of the change. The notice must identify the change and the effective date of the change.
([26 U.S.C. 5502](https://www.govinfo.gov/link/uscode/26/5502))
#### § 19.645 Notice of permanent discontinuance of business.
If the proprietor of a vinegar plant decides to permanently discontinue operations, the proprietor must so notify the appropriate TTB officer in writing. The proprietor must include in the notice a statement regarding the status of each still.
([26 U.S.C. 5502](https://www.govinfo.gov/link/uscode/26/5502))
#### § 19.646 Construction and equipment requirements.
The proprietor of a vinegar plant must construct and equip the plant to ensure that:
(a) The distilled spirits vapors that are separated by the vaporizing process from the mash are condensed only by introducing them into the water or other liquid used in making the vinegar; and
(b) The distilled spirits produced are accurately accounted for and are secure from unlawful removal from the premises or from unauthorized use.
([26 U.S.C. 5502](https://www.govinfo.gov/link/uscode/26/5502))
### Rules for Operating Vinegar Plants
#### § 19.647 Authorized operations.
After approval of an application by TTB, a plant qualified for the production of vinegar may only:
(a) Produce vinegar by the vaporizing process; and
(b) Produce distilled spirits of 30° of proof or less for use in the manufacture of vinegar on the vinegar plant premises.
([26 U.S.C. 5501](https://www.govinfo.gov/link/uscode/26/5501))
#### § 19.648 Conduct of operations.
A vinegar manufacturer qualified under this subpart may:
(a) Separate by a vaporizing process the distilled spirits from a mash; and
(b) Condense the distilled spirits vapors by introducing them into the water or other liquid to make the vinegar.
([26 U.S.C. 5504](https://www.govinfo.gov/link/uscode/26/5504))
#### § 19.649 Restrictions on alcohol content.
No person may remove from the vinegar plant premises vinegar or other fluid or any other material containing more than 2 percent alcohol by volume.
([26 U.S.C. 5504](https://www.govinfo.gov/link/uscode/26/5504))
### Required Records for Vinegar Plants
#### § 19.650 Daily records.
Each manufacturer of vinegar by the vaporizing process must keep accurate and complete daily records of production operations. It is not necessary to create records to satisfy this requirement if the records kept by the manufacturer in the ordinary course of business contain all required information. The required information consists of the following:
(a) The kind and quantity of fermenting or distilling materials received on the premises;
(b) The kind and quantity of materials fermented or mashed;
(c) The proof gallons of distilled spirits produced;
(d) The proof gallons of distilled spirits used in the manufacture of vinegar;
(e) The wine gallons of vinegar produced; and
(f) The wine gallons of vinegar removed from the premises.
([26 U.S.C. 5504](https://www.govinfo.gov/link/uscode/26/5504))
### Liability for Distilled Spirits Tax
#### § 19.651 Liability for distilled spirits tax.
The distilled spirits excise tax imposed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001) must be paid on any distilled spirits produced in, or removed from, the premises of a vinegar plant in violation of law or regulations.
([26 U.S.C. 5505](https://www.govinfo.gov/link/uscode/26/5505))
## Subpart X—Distilled Spirits for Fuel Use
#### § 19.661 Scope.
This subpart covers the establishment and operation of alcohol fuel plants.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181))
### General
#### § 19.662 Definitions.
As used in this subpart, the following terms have the meanings indicated.
*Alcohol fuel plant.* A special type of distilled spirits plant authorized under [26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181) and established under this subpart solely for producing, processing, and storing, and using or distributing distilled spirits to be used exclusively for fuel use.
*Bonded premises.* The premises of an alcohol fuel plant where distilled spirits are produced, processed, and stored, and used or distributed as described in the application for alcohol fuel producer permit. The term includes the premises of small alcohol fuel plants exempt from bonding requirements under [§ 19.673(e)](/current/title-27/section-19.673#p-19.673\(e\)).
*Fuel alcohol.* Distilled spirits that have been made unfit for beverage use at an alcohol fuel plant as provided in this subpart.
*Large plant.* An alcohol fuel plant that produces (including receives) more than 500,000 proof gallons of spirits per calendar year.
*Make unfit for beverage use.* Add materials to distilled spirits that will preclude their beverage use without impairing their quality for fuel use as prescribed and authorized by the provisions of this subpart.
*Medium plant.* An alcohol fuel plant that produces (including receives) more than 10,000 but not more than 500,000 proof gallons of spirits per calendar year.
*Permit.* The document issued pursuant to [26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181) and this subpart authorizing the person named to engage in business as an alcohol fuel plant.
*Plant.* An alcohol fuel plant.
*Proprietor.* The person qualified under this subpart to operate an alcohol fuel plant.
*Small plant.* An alcohol fuel plant that produces (including receives) not more than 10,000 proof gallons of spirits per calendar year.
*Spirits or distilled spirits.* The substance known as ethyl alcohol, ethanol, or spirits of wine in any form (including all dilutions and mixtures thereof, from whatever source or by whatever process produced), but not fuel alcohol unless specifically stated. The term does not include spirits produced from petroleum, natural gas, or coal.
*Transfer in bond.* The transfer of spirits between alcohol fuel plants or between a distilled spirits plant qualified under [26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171) and an alcohol fuel plant.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181))
#### § 19.663 Application of other provisions.
The provisions of [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101) and the regulations in [subparts A](/current/title-27/part-19/subpart-A) through [W of this part](/current/title-27/part-19/subpart-W) do not apply to alcohol fuel plants except for the following:
(a) [26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181);
(b) The definitions contained in [§ 19.1](/current/title-27/section-19.1), unless the same term is defined in this subpart;
(c) Any provision incorporated by reference in this subpart;
(d) Any provision requiring the payment of tax; and
(e) Any provision applicable to distilled spirits that deals with penalty, seizure, or forfeiture.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181))
#### § 19.665 Alternate methods or procedures.
(a) *General.* The appropriate TTB officer may approve the use of an alternate method or procedure that varies from the regulatory requirements in this subpart or from any regulatory requirements in [subparts A](/current/title-27/part-19/subpart-A) through [W of this part](/current/title-27/part-19/subpart-W) that have been incorporated by reference in this subpart. The appropriate TTB officer may approve the use of an alternate method or procedure only if the proprietor shows good cause for its use and the alternate method or procedure:
(1) Is not contrary to law;
(2) Will not have the effect of merely waiving an existing regulatory requirement;
(3) Is consistent with the purpose and effect of the method or procedure prescribed in this subpart;
(4) Provides equal security to the revenue; and
(5) Will not cause an increase in cost to the Government and will not hinder TTB's administration of this subpart.
(b) *Exceptions.* TTB will not authorize the use of an alternate method or procedure relating to the giving of any bond, or to the assessment, payment, or collection of tax.
(c) *Prior approvals.* Alternate methods or procedures in effect prior to April 18, 2011, which are not contrary to the regulations in this part, are preserved until renewed unless revoked by operation of law due to the enactment of law that is contrary to the alternate method or procedure.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181))
#### § 19.666 Application for and use of an alternate method or procedure.
(a) *Application.* If a proprietor wishes to use an alternate method or procedure as described in [§ 19.665](/current/title-27/section-19.665), the proprietor must submit a written letterhead application to the appropriate TTB officer for approval. The application must identify the method or procedure specified in the regulation, must describe the proposed alternate method or procedure in detail, and must explain why the alternate method or procedure is needed.
(b) *Approval and use.* The proprietor may not use an alternate method or procedure until the appropriate TTB officer has in writing approved the proprietor's letterhead application. During the period that the proprietor is authorized to use the alternate method or procedure, the proprietor must comply with any conditions imposed on its use by TTB. TTB may withdraw the approval to use the alternate method or procedure if TTB finds that the revenue is jeopardized, that the alternate method or procedure hinders effective administration of the laws or regulations, that the proprietor has violated any of the conditions imposed by TTB, or that the circumstances that gave rise to the need for the alternate method or procedure no longer exist.
(c) *Retention.* The proprietor must retain each alternate method or procedure approval as part of the proprietor's records and must make the approval available for examination by TTB officers upon request.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181))
#### § 19.667 Emergency variations from requirements.
(a) *Application.* A proprietor may request emergency approval of the use of a method or procedure relating to construction, equipment, and methods of operation that represents a variance from the requirements of this subpart or from any regulatory requirement in [subparts A](/current/title-27/part-19/subpart-A) through [W of this part](/current/title-27/part-19/subpart-W) that have been incorporated by reference in this subpart. When a proprietor wishes to use an emergency method or procedure, the proprietor must submit a written letterhead application to the appropriate TTB officer for approval; the proprietor may send the application via regular mail, email, or facsimile transmission. The application must describe the proposed emergency method or procedure and the emergency situation it will address. For purposes of this section, an emergency is considered to exist only if it results from a weather or other natural event or from an accident or other event not involving an intentional act on the part of the proprietor.
(b) *Approval.* The appropriate TTB officer may approve in writing the use of an emergency method or procedure if the proprietor demonstrates that an emergency exists and the proposed method or procedure:
(1) Is not contrary to law;
(2) Is necessary to address the emergency situation;
(3) Will afford the same security and protection to the revenue as intended by the regulations; and
(4) Will not hinder the effective administration of this subpart.
(c) *Terms of emergency method or procedure approval and use.*
(1) The proprietor may not use an emergency method or procedure until the application has been approved by TTB except when the emergency method or procedure requires immediate implementation to correct a situation that threatens life or property. In a situation involving a threat to life or property, the proprietor may implement the corrective action, immediately notify the appropriate TTB officer by telephone of the action and then file the required written application as soon as possible. Use of the emergency method or procedure must conform to any conditions specified in the approval.
(2) The proprietor must retain the emergency method or procedure approval as part of the proprietor's records and must make the approval available for examination by TTB officers upon request.
(3) The emergency method or procedure will automatically terminate when the situation that created the emergency no longer exists. TTB may withdraw the approval to use the emergency method or procedure if TTB finds that the revenue is jeopardized, that the emergency method or procedure hinders effective administration of the laws or regulations, or that the proprietor has failed to follow any of the conditions specified in the approval. When use of the emergency method or procedure terminates, the proprietor must revert to full compliance with all applicable regulations.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181))
### Liability for Taxes
#### § 19.669 Distilled spirits taxes.
(a) Proprietors may withdraw distilled spirits free of tax from an alcohol fuel plant if the spirits are withdrawn exclusively for fuel use in accordance with this subpart. However, TTB will require payment of the tax if the spirits are diverted to beverage use or to another use not authorized by this subpart.
(b) The following provisions of this part apply to distilled spirits for fuel use:
(1) Imposition of tax liability ([§§ 19.222](/current/title-27/section-19.222), [19.223](/current/title-27/section-19.223), and [19.225](/current/title-27/section-19.225));
(2) Assessment of tax ([§§ 19.253](/current/title-27/section-19.253) and [19.254](/current/title-27/section-19.254)); and
(3) Claims for tax ([§§ 19.262](/current/title-27/section-19.262) and [19.263](/current/title-27/section-19.263)).
([26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5181](https://www.govinfo.gov/link/uscode/26/5181))
#### § 19.670 Dealer registration and recordkeeping.
An alcohol fuel plant that sells spirits that have not been rendered unfit for beverage use is subject to the requirements of [subpart H of this part](/current/title-27/part-19/subpart-H), except that the reference in [§ 19.202](/current/title-27/section-19.202) to “subpart D” should be taken to refer to subpart X.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181))
### Obtaining a Permit
#### § 19.672 Types of plants.
There are three types of alcohol fuel plants: Small plants, medium plants, and large plants. All alcohol fuel plants are classified according to the amount of spirits that they will produce and receive during each calendar year. When applying for a permit, an applicant should apply for the type of permit that fits the applicant's needs based on the type of alcohol fuel plant the applicant intends to operate.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181))
#### § 19.673 Small plant permit applications.
(a) *General.* Any person wishing to establish a small plant must file form TTB F 5110.74, Application and Permit for an Alcohol Fuel Producer Under [26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), with the appropriate TTB officer. Except as otherwise provided in [§ 19.674(d)](/current/title-27/section-19.674#p-19.674\(d\)), a person may not commence operations before issuance of the permit.
(b) *Application information.* The applicant for a small plant permit must include the following information with the application:
(1) Name and mailing address of the applicant, and the location of the plant if not the same as the mailing address;
(2) A diagram of the plant premises;
(3) A statement regarding ownership of the premises. If the premises are not owned by the applicant, the owner's consent for access by TTB officers must be furnished;
(4) A description of the stills on the premises and a statement of the maximum capacity of each;
(5) A description of the materials from which spirits will be produced; and
(6) A description of the security measures to be used to protect the premises, buildings, and equipment where spirits are produced, processed, and stored.
(c) *Information already on file.* If any of the information required by this section is already on file with TTB and the information is accurate and complete, the applicant may advise the appropriate TTB officer that the information on file is incorporated by reference and made part of the application, unless the applicant will not conduct bona fide production operations.
(d) *Additional information.* When required by the appropriate TTB officer, the applicant must furnish, as part of the application for a permit under this section, any additional information required by TTB to determine whether the application should be approved.
(e) *Bonds.* The applicant is not required to provide a bond in order to establish a small plant, unless the applicant will not conduct bona fide production operations. Plants for the receipt of spirits without production must furnish a bond in accordance with [§ 19.699](/current/title-27/section-19.699) with a penal sum as prescribed in [§ 19.700](/current/title-27/section-19.700). The appropriate TTB officer must approve the bond before issuance of the permit.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181))
#### § 19.674 TTB action on small plant applications.
(a) *Notice of receipt.* Within 15 days of receipt of an application for a small plant permit, the appropriate TTB officer will send a written notice of receipt to the applicant. The notice will include a statement as to whether the application meets the requirements of [§ 19.673](/current/title-27/section-19.673). If the application does not meet the requirements of [§ 19.673](/current/title-27/section-19.673), the appropriate TTB officer will return the application to the applicant, and a new 15-day period will commence upon receipt of an amended or corrected application.
(b) *Action on application.* Within 45 days from the date that the appropriate TTB officer sent the applicant a notice of receipt of a completed application for a small plant permit, the appropriate TTB officer will either issue the permit or give notice in writing to the applicant stating in detail the reason that a permit will not be issued. Denial of an application will not prejudice any later application for a permit by the same applicant.
(c) *Failure to give notice.* If the notice of receipt required by paragraph (a) is not sent, and the applicant has a receipt indicating that the appropriate TTB officer received the application, the 45-day period provided for in [paragraphs (b)](/current/title-27/section-19.674#p-19.674\(b\)) and [(d)](/current/title-27/section-19.674#p-19.674\(d\)) of this section will commence on the fifteenth day after the date the appropriate TTB officer received the application.
(d) *Presumption of approval.* If, within 45 days from the date of the notice to the applicant of receipt of a completed application for a small plant permit, the appropriate TTB officer has not notified the applicant of issuance of the permit or denial of the application, the application will be deemed approved and the applicant may proceed as if a permit had been issued.
(e) *Limitation.* The provisions of [paragraphs (a)](/current/title-27/section-19.674#p-19.674\(a\)) and [(c)](/current/title-27/section-19.674#p-19.674\(c\)) of this section apply only to the first application submitted for any one small plant in any calendar quarter and to an amended or corrected first application.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181))
#### § 19.675 Medium plant permit applications.
(a) *General.* Any person wishing to establish a medium plant must file form TTB F 5110.74, Application and Permit for an Alcohol Fuel Producer Under [26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), with the appropriate TTB officer.
(b) *Application information.* The applicant for a medium plant permit must include the following information with the application:
(1) Name and mailing address of the applicant, and the location of the plant if not the same as the mailing address;
(2) A diagram of the plant premises;
(3) A statement regarding ownership of the premises. If the premises are not owned by the applicant, the owner's consent for access by TTB officers must be furnished;
(4) A description of the stills on the premises and a statement of the maximum capacity of each;
(5) A description of the materials from which spirits will be produced;
(6) A description of the security measures to be used to protect the premises, buildings, and equipment where spirits are produced, processed, and stored;
(7) A statement of the maximum total proof gallons of spirits that will be produced and received during a calendar year;
(8) Information identifying the principal persons involved in the business. This identifying information must include each person's name, address, title, social security number, date of birth, and place of birth;
(9) A statement indicating whether or not the applicant or any other principal person involved in the business has been convicted of a felony or misdemeanor under Federal or State law. The statement may exclude convictions for misdemeanor traffic violations; and
(10) A statement of the amount and source of funds invested in the business.
(c) *Bond.* The applicant for a medium plant permit must provide a bond in accordance with [§ 19.699](/current/title-27/section-19.699) with a sufficient penal sum as prescribed in [§ 19.700](/current/title-27/section-19.700). The applicant must submit the bond on form TTB F 5110.56, Distilled Spirits Bond, and the appropriate TTB officer must approve the bond before issuance of the permit.
(d) *Information already on file.* If any of the information required by this section is already on file with TTB and the information is accurate and complete, the applicant may advise the appropriate TTB officer that the information on file is incorporated by reference and made part of the application.
(e) *Additional information.* When required by the appropriate TTB officer, the applicant must furnish, as part of the application for a permit under this section, any additional information required by TTB to determine whether the application should be approved.
(f) *Approval of permit.* The applicant may not commence operations before approval of the application and issuance of the medium plant permit.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181))
#### § 19.676 Large plant permit applications.
(a) *General.* Any person wishing to establish a large plant must file form TTB F 5110.74, Application and Permit for an Alcohol Fuel Producer Under [26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), with the appropriate TTB officer.
(b) *Application information.* The applicant for a large plant permit must include the following information with the application:
(1) Name and mailing address of the applicant, and the location of the plant if not the same as the mailing address;
(2) A diagram of the plant premises;
(3) A statement regarding ownership of the premises. If the premises are not owned by the applicant, the owner's consent for access by TTB officers must be furnished;
(4) A description of the stills on the premises and a statement of the maximum capacity of each;
(5) A description of the materials from which spirits will be produced;
(6) A description of the security measures to be used to protect the premises, buildings, and equipment where spirits are produced, processed, and stored;
(7) A statement of the maximum total proof gallons of spirits that will be produced and received during a calendar year;
(8) Information identifying the principal persons involved in the business. This identifying information must include each person's name, address, title, social security number, date of birth, and place of birth;
(9) A statement indicating whether or not the applicant or any of the principal persons involved in the business has been convicted of a felony or misdemeanor under Federal or State law. The statement may exclude convictions for misdemeanor traffic violations;
(10) A statement of the amount and source of funds invested in the business; and
(11) A statement identifying the type of business organization and the persons having an ownership interest in the business. The applicant must support this statement by providing the information specified in [§ 19.677](/current/title-27/section-19.677).
(c) *Bond.* The applicant for a large plant permit must provide a bond in accordance with [§ 19.699](/current/title-27/section-19.699) with a sufficient penal sum as prescribed in [§ 19.700](/current/title-27/section-19.700). The applicant must submit the bond on form TTB F 5110.56, Distilled Spirits Bond, and the appropriate TTB officer must approve the bond before issuance of the permit.
(d) *Power of attorney.* The applicant for a large plant permit, or the proprietor of the plant if different from the applicant, must execute and file with the appropriate TTB officer form TTB F 5000.8, Power of Attorney, for each person authorized to sign or act on behalf of the proprietor unless that authority has been furnished elsewhere in the application.
(e) *Information already on file.* If any of the information required by this section is already on file with TTB and the information is accurate and complete, the applicant may advise the appropriate TTB officer that the information on file is incorporated by reference and made part of the application.
(f) *Additional information.* When required by the appropriate TTB officer, the applicant must furnish as part of the application for a permit under this section, any additional information required by TTB to determine whether the application should be approved.
(g) *Approval of permit.* The applicant may not commence operations before approval of the application and issuance of the large plant permit.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181))
#### § 19.677 Large plant applications—organizational documents.
In addition to the information required by [§ 19.676](/current/title-27/section-19.676), any person who wants to establish a large plant must provide with the application the documents and other information specified in [paragraphs (a)](/current/title-27/section-19.677#p-19.677\(a\)) through [(d)](/current/title-27/section-19.677#p-19.677\(d\)) of this section, as applicable, and must make those and related documents available for inspection by TTB as provided in [paragraph (e)](/current/title-27/section-19.677#p-19.677\(e\)) of this section.
(a) *Corporate documents.* If the applicant is a corporation, the applicant must provide the following:
(1) The corporate charter or a certificate of corporate existence or incorporation;
(2) A list of officers and directors with their names and addresses, other than officers and directors who will have no responsibilities in connection with the operation of the alcohol fuel plant;
(3) Certified minutes or extracts of board of directors meetings, showing those individuals authorized to sign for the corporation;
(4) A statement showing the number of shares of each class of stock or other basis of ownership, authorized and outstanding, and the voting rights of the respective owners or holders; and
(5) A list of the offices or positions, the incumbents of which are authorized by the articles of incorporation or the board of directors to act on behalf of the proprietor or to sign the proprietor's name.
(b) *Partnership documents.* If the applicant is a partnership, the applicant must provide a copy of the articles of partnership or association, or certificate of partnership or association if required to be filed by any State, county, or municipality.
(c) *Limited liability company/limited liability partnership documents.* If the applicant is a limited liability company or limited liability partnership or other entity recognized by law as a person, the applicant must provide a copy of the articles of organization, the operating agreement and the names and addresses of all members and managers.
(d) *Statement of interest.*
(1) The application must include the names and addresses of the 10 persons that have the largest stock ownership, by stock class, or other interest in the corporation, limited liability company/limited liability partnership, or other legal entity, and the nature and amount of the stock or other interest of each, whether the interest is recorded in the name of the interested party or in the name of another for the interested party. If a corporation is wholly owned or controlled by another corporation, the appropriate TTB officer may request that the applicant furnish the same information for persons of the parent corporation.
(2) In the case of an individual owner or a partnership, the application must include the name and address of each person interested in the large plant, whether the interest is recorded in the name of the interested party or in the name of another for the interested party.
(e) *Availability of documents.* An applicant must make available to any appropriate TTB officer upon request all originals of documents submitted under this section and any additional related organizational documents such as articles of incorporation, bylaws, operating agreements and State certifications.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), [5271](https://www.govinfo.gov/link/uscode/26/5271))
#### § 19.678 Criteria for issuance of permit.
As a general rule, the appropriate TTB officer will issue an alcohol fuel plant permit to any person who completes the required application for a permit and, when required, furnishes a bond. However, the appropriate TTB officer may begin proceedings to deny an application for a permit, in accordance with [part 71 of this chapter](/current/title-27/part-71), if the appropriate TTB officer determines that—
(a) The applicant (including, in the case of a corporation, any officer, director, or principal stockholder, and, in the case of a partnership, a partner) is, by reason of business experience, financial standing, or trade connections, not likely to maintain operations in compliance with [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101), or the regulations issued thereunder;
(b) The applicant failed to disclose any material information required with the application, or has made any false statement as to any material fact in connection with the application; or
(c) The premises where the applicant proposes to conduct the operations are not adequate to protect the revenue.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), [5271](https://www.govinfo.gov/link/uscode/26/5271))
#### § 19.679 Duration of permit.
The proprietor of an alcohol fuel plant may conduct the operations authorized by the permit on a continuing basis unless:
(a) The proprietor voluntarily surrenders the permit;
(b) TTB suspends or revokes the permit pursuant to [§ 19.697](/current/title-27/section-19.697); or
(c) The permit is automatically terminated under its own terms or in accordance with [§ 19.684](/current/title-27/section-19.684).
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181))
#### § 19.680 Registration of stills.
The description of stills provided with the application for an alcohol fuel plant permit under this subpart will fulfill the requirement to register a still under [§ 29.55 of this chapter](/current/title-27/section-29.55).
([26 U.S.C. 5179](https://www.govinfo.gov/link/uscode/26/5179), [5181](https://www.govinfo.gov/link/uscode/26/5181))
### Changes to Permit Information
#### § 19.683 Changes affecting permit applications.
(a) *General.* If there is a change relating to any of the information contained in, or considered a part of, the application on form TTB F 5110.74, Application and Permit for an Alcohol Fuel Producer Under [26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), the proprietor must amend the information previously submitted within 30 days of the change unless another time period is specified in this subpart.
(b) *Amended TTB F 5110.74.* Except when a letterhead application or letterhead notice procedure is followed under this subpart, the proprietor must submit an amended application to the appropriate TTB officer on TTB F 5110.74 within 30 days of a change referred to in [paragraph (a)](/current/title-27/section-19.683#p-19.683\(a\)) of this section if the change affects the terms and conditions of the permit.
(c) *Letterhead applications.* For the changes specified in [§§ 19.685(c)](/current/title-27/part-19/section-19.685#p-19.685\(c\)), [19.686](/current/title-27/part-19/section-19.686), and [19.690 of this subpart](/current/title-27/part-19/section-19.690), the proprietor may submit a letterhead application to the appropriate TTB officer for a change instead of filing an amended TTB F 5110.74. A letterhead application must be on letterhead signed by an authorized representative of the permit holder. The letterhead application must identify the alcohol fuel plant to which the application applies. The letterhead application change is subject to TTB approval. The appropriate TTB officer may, at any time, require that the proprietor submit an amended application on TTB F 5110.74 if administrative difficulties occur as a result of the letterhead application.
(d) *Letterhead Notices.* For the changes specified in [§§ 19.687](/current/title-27/part-19/section-19.687), [19.695](/current/title-27/part-19/section-19.695), and [19.691 of this subpart](/current/title-27/part-19/section-19.691) only a letterhead notice to the appropriate TTB officer is required. A letterhead notice must be on letterhead signed by an authorized representative of the permit holder. A letterhead notice does not require approval action by TTB. The appropriate TTB officer may, at any time, require that the proprietor submit an amended application on TTB F 5110.74 if administrative difficulties occur as a result of the letterhead notice.
([26 U.S.C. 5271](https://www.govinfo.gov/link/uscode/26/5271), [5181](https://www.govinfo.gov/link/uscode/26/5181))
#### § 19.684 Automatic termination of permits.
(a) *Permits not transferable.* An alcohol fuel plant permit is not transferable and, except as otherwise provided in [paragraph (b)](/current/title-27/section-19.684#p-19.684\(b\)) of this section, will automatically terminate if:
(1) The operations that are authorized by the permit are leased, sold, or transferred to another person; or
(2) The permit holder is dissolved on a date certain or upon an event specified by the laws of the State where the permit holder operates.
(b) *Corporations.* In the case of a corporation holding a permit under this subpart, if actual or legal control of that corporation changes, directly or indirectly, whether by reason of change in stock ownership or control (in the permittee corporation or in any other corporation), by operation of law, or in any other manner, the permit may remain in effect until the expiration of 30 days after the change, whereupon the permit will automatically terminate. However, if operations are to be continued after the change in control, and an application for a new permit is filed within 30 days of the change, the outstanding permit may remain in effect until final action is taken on the new application. When final action is taken on the application, the outstanding permit will automatically terminate.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), [5271](https://www.govinfo.gov/link/uscode/26/5271))
#### § 19.685 Change in type of alcohol fuel plant.
(a) *Small plants.* If the proprietor of a small plant intends to increase production (including receipts) to more than 10,000 proof gallons of spirits per calendar year, the proprietor must first obtain an amended permit by filing an application for a medium plant or a large plant, as appropriate, under [§§ 19.675](/current/title-27/section-19.675) or [19.676](/current/title-27/section-19.676). If any of the required information is already on file with TTB, that information may be incorporated by reference in the new application. The proprietor must also provide a new or strengthening bond in accordance with [§§ 19.699](/current/title-27/section-19.699) and [19.700](/current/title-27/section-19.700).
(b) *Medium plants.* If the proprietor of a medium plant intends to increase production (including receipts) to more than 500,000 proof gallons of spirits per calendar year, the proprietor must first obtain an amended permit by filing an application for a large plant under [§ 19.676](/current/title-27/section-19.676). If any of the required information is already on file with TTB, that information may be incorporated by reference in the new application. If the penal sum of the proprietor's current bond is below the amount specified for the new production level, the proprietor must obtain a new or strengthening bond in accordance with [§ 19.700](/current/title-27/section-19.700).
(c) *Curtailment of activities.* A proprietor of a medium or large plant who curtails operations to a level whereby the proprietor is eligible to requalify as a small or medium plant may so qualify by submitting a letterhead application to the appropriate TTB officer for approval. If the appropriate TTB officer approves the application, the proprietor automatically will be relieved of those regulatory requirements that apply only to the superseded qualification. In addition, in the case of a change to small plant status, the proprietor may be allowed to terminate the bond in accordance with the procedure set forth in [§ 19.170 of this part](/current/title-27/part-19/section-19.170).
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), [5271](https://www.govinfo.gov/link/uscode/26/5271))
#### § 19.686 Change in name of proprietor.
When there is a change in the name of the individual, firm, corporation, or other entity holding the permit, the proprietor must file an application to amend the permit on form TTB F 5110.74, Application and Permit for an Alcohol Fuel Producer Under [26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), or file a letterhead application to amend the permit within 30 days of the change. The proprietor is not required to file a new bond or consent of surety in this case.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172), [5271](https://www.govinfo.gov/link/uscode/26/5271), [5181](https://www.govinfo.gov/link/uscode/26/5181))
#### § 19.687 Changes in officers, directors, members, managers, or principal persons.
If there is a change in the list of officers, directors, members, managers, or other principal persons furnished under the provisions of [§ 19.675](/current/title-27/section-19.675), [§ 19.676](/current/title-27/section-19.676), or [§ 19.677](/current/title-27/section-19.677), the proprietor must submit a letterhead notice to the appropriate TTB officer within 30 days of the change. The letterhead notice must identify each change and must include the following identifying information for each new officer, director, member, manager, or other principal person: name, address, title, social security number, date of birth, and place of birth.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181))
#### § 19.688 Change in proprietorship.
(a) *General.* If there is a change in proprietorship at an alcohol fuel plant, the following requirements apply to the outgoing proprietor and to the new, incoming proprietor:
(1) The outgoing proprietor must comply with the notice requirements of [§ 19.695](/current/title-27/section-19.695); and
(2) The incoming successor proprietors must—
(i) File and obtain a permit on form TTB F 5110.74, Application and Permit for an Alcohol Fuel Producer Under [26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181); and
(ii) File the required bond, if any.
(b) *Fiduciary responsibilities.* A successor to the proprietorship of an alcohol fuel plant who is an administrator, executor, receiver, trustee, assignee, or other fiduciary must comply with [paragraph (a)(2)](/current/title-27/section-19.688#p-19.688\(a\)\(2\)) of this section. In addition, the following rules apply to a successor who is a fiduciary:
(1) The successor may furnish a consent of surety to extend the terms of the outgoing proprietor's bond instead of filing a new bond;
(2) The successor may incorporate by reference in the application on TTB F 5110.74 any information that is still valid and that was contained in the application filed by the outgoing proprietor;
(3) The successor must furnish a certified copy of the order of the court or other pertinent document appointing the successor as a fiduciary; and
(4) The effective dates of the qualifying documents filed will be the date of the court order, the date specified in the court order for assuming control or the date control is assumed if the fiduciary was not appointed by a court.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172), [5181](https://www.govinfo.gov/link/uscode/26/5181))
#### § 19.689 Continuing partnerships.
(a) If there is a death or insolvency of a partner in the business that holds a permit under this subpart, the surviving partner or partners may continue to operate under the permit if:
(1) The partnership is not immediately terminated under the laws of the particular State but continues until the winding up of the partnership affairs is complete;
(2) The surviving partner or partners have the exclusive right to control and possession of the partnership assets for purpose of liquidation and settlement; and
(3) In the case of a plant required to file a bond, a consent of surety is filed under which the surety and the surviving partner or partners agree to remain liable on the bond.
(b) If the surviving partner or partners acquire the business upon settlement of the partnership, the surviving partner or partners must file an application in their own name and receive a permit in accordance with [§ 19.688(a)](/current/title-27/section-19.688#p-19.688\(a\)).
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172), [5181](https://www.govinfo.gov/link/uscode/26/5181))
#### § 19.690 Change in location.
If there is a change in the location of the alcohol fuel plant or of the area included within the plant premises, the proprietor must:
(a) File an application to amend the permit on form TTB F 5110.74, Application and Permit for an Alcohol Fuel Producer Under [26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), or a letterhead application to amend the permit;
(b) File a new bond on form TTB F 5110.56 or a consent of surety on form TTB F 5000.18 if a bond is required; and
(c) Not begin operations at the new location prior to approval of the amended application and issuance of the amended permit.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172), [5181](https://www.govinfo.gov/link/uscode/26/5181))
#### § 19.691 Change in address without change in location or area.
If there is a change in the address of an alcohol fuel plant that does not involve a change in the location or area of the plant itself, the proprietor must submit a letterhead notice to the appropriate TTB officer within 30 days of the change.
([26 U.S.C. 5172](https://www.govinfo.gov/link/uscode/26/5172), [5181](https://www.govinfo.gov/link/uscode/26/5181))
### Alternating Proprietorship
#### § 19.692 Qualifying for alternating proprietorship.
(a) *General.* A proprietor may alternate use of an alcohol fuel plant or part of an alcohol fuel plant with one or more proprietors qualified under this subpart. In order to do so, each proprietor must file and receive approval of the applications and bonds required by this subpart. Each proprietor must also conduct operations and keep records in accordance with this subpart. Where operations by alternating proprietors will be limited to part of an alcohol fuel plant, that part must be suitable for qualification as a separate alcohol fuel plant.
(b) *Qualifying documents.* Each person desiring to operate an alcohol fuel plant as an alternating proprietor must file the following with the appropriate TTB officer:
(1) An application on form TTB F 5110.74, Application and Permit for an Alcohol Fuel Producer Under [26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), to cover the proposed alternation;
(2) A diagram of the premises, in duplicate, showing the arrangement for the alternation of the premises. Where operations by alternating proprietors are limited to parts of an alcohol fuel plant, a diagram designating the parts that are to be alternated must be submitted. A diagram must be submitted for each arrangement under which the premises will be operated. The diagram must be in sufficient detail to establish the boundaries of the alcohol fuel plant or any part of it that will be involved in the alternation;
(3) Evidence of an existing operations bond (if any), consent of surety, or new operations bond to cover the proposed alternation of premises; and
(4) Any additional information required by the appropriate TTB officer.
([26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171), [5181](https://www.govinfo.gov/link/uscode/26/5181), [5271](https://www.govinfo.gov/link/uscode/26/5271))
#### § 19.693 Operating requirements for alternating proprietorships.
(a) *Alternation journal.* Once the applications submitted under [§ 19.692](/current/title-27/section-19.692) have been approved by the appropriate TTB officer, the alcohol fuel plant, or parts of the alcohol fuel plant, may be alternated. The outgoing and incoming proprietor must make entries in an alternation journal when the alcohol fuel plant, or parts of it, are alternated. The outgoing and incoming proprietor must enter the following information in the alternation journal:
(1) Name or trade name of the proprietor;
(2) Alcohol fuel plant permit number;
(3) Date and time of alternation;
(4) Quantity of spirits transferred in proof gallons.
(b) *Commencement of operations.* Except for spirits transferred to the incoming proprietor, the outgoing proprietor must remove all spirits from areas, rooms, or buildings to be alternated, prior to the effective date and time shown in the alternation journal. Fuel alcohol may be transferred to the incoming proprietor or may be retained by the outgoing proprietor in areas, rooms, or buildings to be alternated when the areas, rooms, or buildings are secured with locks, the keys to which are in the custody of the outgoing proprietor. Whenever operation of the areas, rooms, or buildings is to be resumed by a proprietor following suspension of operations by an alternating proprietor, the outgoing proprietor (except the proprietor of a small plant not required to file a bond) must furnish a consent of surety on form TTB F 5000.18 to continue in effect the operations bond covering their operations. The proprietor must do this prior to alternating the premises.
(c) *Records.* Each alternating proprietor must maintain separate records and submit separate reports in accordance with [§ 19.720](/current/title-27/section-19.720). Entries in each proprietor's records must be in accordance with [§§ 19.714](/current/title-27/part-19/section-19.714) through [19.718 of this subpart](/current/title-27/part-19/section-19.718). The following requirements also apply:
(1) Each alternating proprietor must show all transfers of spirits in the records;
(2) The outgoing proprietor must show in its production and disposition records the quantity of spirits and fuel alcohol transferred to the incoming proprietor;
(3) The incoming proprietor must show in their receipt record the quantity of spirits received by transfer;
(4) Each proprietor must include spirits transferred in the determinations of alcohol fuel plant size and bond amounts; and
(5) The provisions of [§ 19.685](/current/title-27/section-19.685) regarding change of alcohol fuel plant type apply to each proprietor.
([26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171), [5181](https://www.govinfo.gov/link/uscode/26/5181), [5271](https://www.govinfo.gov/link/uscode/26/5271))
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
### Discontinuance of Business and Permit Suspension or Revocation
#### § 19.695 Notice of permanent discontinuance.
When a proprietor permanently discontinues operations as an alcohol fuel plant, the proprietor must file a letterhead notice with the appropriate TTB officer along with the following:
(a) The original copy of the alcohol fuel plant permit and the proprietor's request that the permit be cancelled;
(b) A written statement disclosing whether or not all spirits, including fuel alcohol, have been lawfully disposed of, and whether or not there are any spirits in transit to the premises; and
(c) A report on form TTB 5110.75, Alcohol Fuel Plant Report, covering the discontinued operations, with the report marked “Final Report”.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), [5271](https://www.govinfo.gov/link/uscode/26/5271))
#### § 19.697 Permit suspension or revocation.
TTB will conduct proceedings to revoke or suspend an alcohol fuel plant permit in accordance with the procedures set forth in [part 71 of this chapter](/current/title-27/part-71) if the appropriate TTB officer has a reason to believe that a person holding a permit:
(a) Has not complied in good faith with the provisions of [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101) or the regulations issued thereunder;
(b) Has violated the conditions of the permit;
(c) Has made a false statement as to any material fact in the application for the permit;
(d) Has failed to disclose any material information required to be furnished under this part;
(e) Has violated or conspired to violate any law of the United States relating to intoxicating liquor;
(f) Has been convicted of any offense under title 26 U.S.C. punishable as a felony or of any conspiracy to commit such offense; or
(g) Has not engaged in any of the operations authorized by the permit for a period of more than 2 years.
([26 U.S.C. 5271](https://www.govinfo.gov/link/uscode/26/5271))
### Bonds
#### § 19.699 General bond requirements.
(a) *Operations bond.* Any person who plans to establish a large plant, a medium plant, or a small plant without production operations must provide an operations bond on form TTB F 5110.56, Distilled Spirits Bond, in duplicate, with the original permit application. If a proprietor fails to pay any liability covered by the bond, TTB may seek payment from the proprietor, from the surety on the bond, or from both the proprietor and the surety. Additional provisions applicable to bonds for alcohol fuel plants are found in [subpart F of this part](/current/title-27/part-19/subpart-F) in [§§ 19.155](/current/title-27/section-19.155) through [19.157](/current/title-27/section-19.157) and [§§ 19.167](/current/title-27/section-19.167) through [19.173](/current/title-27/section-19.173).
(b) *Corporate surety.* A company that issues bonds is called a “corporate surety.” Proprietors must obtain the surety bonds required by this subpart from a corporate surety approved by the Secretary of the Treasury. The Department of the Treasury publishes a list of approved corporate surety companies in Treasury Department Circular 570, Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies. Treasury Department Circular 570 is published in the Federal Register annually on the first business day in July, and supplemental changes are published periodically thereafter (see *[https://www.federalregister.gov](https://www.federalregister.gov)*). The most recent circular and any supplemental changes to it may be viewed on the Bureau of the Fiscal Service website (see *[https://fiscal.treasury.gov](https://fiscal.treasury.gov)*).
(c) *Alternative to a corporate surety.* A proprietor may also guarantee payment under a bond without using a corporate surety, by filing a bond that guarantees payment of the liability by pledging and depositing one or more acceptable negotiable securities having a par value (face amount) equal to or greater than the penal sums of the required bonds. Should the proprietor fail to pay one or more of the guaranteed liabilities, TTB may take action to sell the deposited securities to satisfy the debt. Pledged securities will be released to the proprietor if there are no outstanding liabilities when the bond is terminated; the provisions of [§ 19.173](/current/title-27/section-19.173) apply to the release of pledged securities under this subpart. A list of securities acceptable as collateral in lieu of surety bonds is available from the Bureau of the Fiscal Service. Current information and guidance from the Bureau of the Fiscal Service Web site may be found at *[https://www.fiscal.treasury.gov](https://www.fiscal.treasury.gov)*.
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-146, [82 FR 1123](https://www.federalregister.gov/citation/82-FR-1123), Jan. 4, 2017; T.D. TTB-196, [89 FR 87940](https://www.federalregister.gov/citation/89-FR-87940), Nov. 6, 2024]
#### § 19.700 Amount of bond.
A proprietor must determine the penal sum of the bond based on the total quantity of distilled spirits that will be produced and received during a calendar year. The method for computing required bond amounts is as follows:
(a) *Small plants without production operations.* A proprietor that operates a small plant that receives not more than 10,000 proof gallons of spirits per year and does not conduct bona fide production operations must provide a bond with a penal sum of \$1,000.
(b) *Medium plants.* A proprietor that operates a medium plant that produces and receives more than 10,000 but not more than 20,000 proof gallons of spirits per year must provide a bond with a penal sum of at least $2,000.00. The proprietor must increase the penal sum of the bond by $1,000 for each additional 10,000 gallons, or fraction of 10,000 gallons, (over 20,000 gallons) that will be produced or received. The maximum bond for a medium plant is \$50,000.00, representing the penal sum applicable to 500,000 proof gallons. The following table provides examples of required minimum bond amounts:
Annual Production and Receipts in Proof Gallons
| More than | But not over | Amount of bond |
| --------- | ------------ | -------------- |
| 10,000 | 20,000 | \$2,000 |
| 20,000 | 30,000 | 3,000 |
| 90,000 | 100,000 | 10,000 |
| 190,000 | 200,000 | 20,000 |
| 490,000 | 500,000 | 50,000 |
(c) *Large plants.* A proprietor that operates a large plant that produces and receives more than 500,000 but not more than 510,000 proof gallons of spirits per year must provide a bond with a penal sum of at least $52,000.00. The proprietor must increase the penal sum of the bond by $2,000 for each additional 10,000 gallons, or fraction of 10,000 gallons (over 510,000 gallons) that will be produced and received. The maximum bond for a large plant is \$200,000.00. The following table provides examples of required minimum bond amounts:
Annual Production and Receipts in Proof Gallons
| More than | But not over | Amount of bond |
| --------- | ------------ | -------------- |
| 500,000 | 510,000 | \$52,000 |
| 510,000 | 520,000 | 54,000 |
| 740,000 | 750,000 | 100,000 |
| 990,000 | 1,000,000 | 150,000 |
| 1,240,000 | — | 200,000 |
(d) *New or strengthening bonds.* A proprietor must obtain a new bond or a strengthening bond in accordance with [§ 19.167](/current/title-27/section-19.167) if the level of production and receipts at the alcohol fuel plant increases so that the current bond no longer is in the amount of at least the required minimum penal sum.
([26 U.S.C. 5173](https://www.govinfo.gov/link/uscode/26/5173), [5181](https://www.govinfo.gov/link/uscode/26/5181))
### Requirements for Construction, Equipment, and Security
#### § 19.703 Construction and equipment.
A proprietor must construct and arrange the buildings and enclosures where distilled spirits will be produced, processed, or stored so as to ensure adequate security and deter the diversion of spirits. Distilling equipment must be constructed to prevent unauthorized removal of spirits, from the point where distilled spirits come into existence until production is complete and the quantity of spirits has been determined. A proprietor also must equip tanks and other vessels so that they may be locked and must provide a method for determining the quantity of spirits in each vessel.
([26 U.S.C. 5178](https://www.govinfo.gov/link/uscode/26/5178))
#### § 19.704 Security.
(a) *General.* The proprietor of an alcohol fuel plant must provide adequate security measures at the alcohol fuel plant in order to protect against the unauthorized removal of spirits.
(b) *Storage.* The proprietor must store spirits in a building or a storage tank, or within an enclosure, that will be kept locked when operations are not being conducted.
(c) *Additional security.* The appropriate TTB officer may require additional security measures for the premises if the alcohol fuel plant's security is found to be inadequate. The additional measures required may depend upon past security problems experienced at the alcohol fuel plant, the volume of alcohol produced, the risk to tax revenue, and any safety requirements. Additional security measures may include, but are not limited to:
(1) A fence around the alcohol fuel plant;
(2) Flood lights;
(3) A security or alarm system;
(4) A guard service; or
(5) Locked or barred windows.
([26 U.S.C. 5178](https://www.govinfo.gov/link/uscode/26/5178), [5202](https://www.govinfo.gov/link/uscode/26/5202))
### TTB Rights and Authorities
#### § 19.706 Supervision of operations.
TTB may assign appropriate TTB officers to supervise operations at an alcohol fuel plant at any time. Appropriate TTB officers may exercise certain rights and authorities at an alcohol fuel plant. Those rights and authorities are set forth in the following provisions of this part: [§ 19.11](/current/title-27/section-19.11) (right of entry and examination, [§ 19.12](/current/title-27/section-19.12) (furnishing facilities and assistance), [§ 19.13](/current/title-27/section-19.13) (assignment of officers and supervision of operations), [§ 19.17](/current/title-27/section-19.17) (detention of containers), [§ 19.18](/current/title-27/section-19.18) (samples for the United States), and [§ 19.282](/current/title-27/section-19.282) (general requirements for gauging and measuring equipment).
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201), [5202](https://www.govinfo.gov/link/uscode/26/5202), [5203](https://www.govinfo.gov/link/uscode/26/5203), [5204](https://www.govinfo.gov/link/uscode/26/5204), [5207](https://www.govinfo.gov/link/uscode/26/5207), [5213](https://www.govinfo.gov/link/uscode/26/5213), [5555](https://www.govinfo.gov/link/uscode/26/5555))
### Accounting for Spirits
#### § 19.709 Gauging.
(a) *Gauging equipment and methods.* A proprietor of an alcohol fuel plant must perform periodic gauges of the distilled spirits and fuel alcohol at the alcohol fuel plant. The procedures for the gauging of spirits set forth in [part 30 of this chapter](/current/title-27/part-30) also apply under this subpart. In addition, the following rules for the gauging of distilled spirits and fuel alcohol under this subpart also apply:
(1) The proprietor must determine the proof of spirits by using a glass cylinder, hydrometer and thermometer;
(2) The proprietor must ensure that hydrometers, thermometers, and other equipment used to determine proof, volume, or weight are accurate;
(3) The proprietor may determine the quantity of spirits or fuel alcohol either by volume or weight;
(4) To determine quantity by volume, the proprietor may use a tank or receptacle with a calibrated sight glass installed, a calibrated dipstick, conversion charts, an accurate mass flow meter, or other devices approved by the appropriate TTB officer;
(5) Unless the proprietor chooses to do so, the proprietor is not required to determine the proof of fuel alcohol manufactured, on hand, or removed; and
(6) The proprietor may account for fuel alcohol in wine gallons;
(b) *Verification by TTB.* TTB officers may at any time verify the accuracy of the gauging equipment used.
(c) *When gauges are required.* A proprietor must gauge spirits and record the results in the records required by [§ 19.718](/current/title-27/section-19.718), at the following times:
(1) Upon completing the production of distilled spirits;
(2) On the receipt of spirits at the plant;
(3) Prior to the addition of materials to render the spirits unfit for beverage use;
(4) Before withdrawal from plant premises or other disposition of spirits (including fuel alcohol); and
(5) When spirits are inventoried.
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201), [5204](https://www.govinfo.gov/link/uscode/26/5204))
#### § 19.710 Inventory of spirits.
A proprietor of an alcohol fuel plant must take a physical inventory of all spirits and fuel alcohol on the bonded premises at the end of each calendar year. The proprietor must record the results of this physical inventory in the records required by [§ 19.718](/current/title-27/section-19.718).
([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201))
### Recordkeeping
#### § 19.714 General requirements for records.
A proprietor of an alcohol fuel plant must maintain records that accurately reflect the operations and transactions at the alcohol fuel plant. The records must contain sufficient information to allow appropriate TTB officers to determine the quantities of spirits produced, received, stored, or processed and to verify that all spirits have been used or otherwise lawfully disposed of.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.715 Format of records.
(a) Proprietors of alcohol fuel plants are not required under this subpart to keep their records in any particular format or media. A proprietor may keep required records on paper, microfilm or microfiche, diskette, or other electronic medium. However, the records that a proprietor maintains must be readily retrievable in, or convertible to, hardcopy format for review by TTB officers as necessary.
(b) Required records may consist of commercial documents maintained in the ordinary course of business, rather than records prepared expressly to meet the requirements of this subpart, if those documents:
(1) Contain all of the information required by this subpart;
(2) Reflect general standards of clarity and accuracy; and
(3) Can be readily understood by TTB personnel.
(c) Where the format or arrangement of a record is such that the information is not readily understandable, the appropriate TTB officer may require the proprietor to present the information in a format or arrangement that will facilitate the review of the information.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.716 Maintenance and retention of records.
(a) A proprietor of an alcohol fuel plant may keep the records required by this subpart at the alcohol fuel plant where operations or transactions occur, or at a central recordkeeping location maintained by the proprietor. If the proprietor keeps the required records at any location other than the alcohol fuel plant where operations or transactions occur, the proprietor must submit a letterhead notice to the appropriate TTB officer indicating the location where the records are kept. The proprietor must make those records available at the alcohol fuel plant premises to which they relate during normal business hours for the purpose of a TTB audit or inspection. The proprietor must produce those records at that location within two days of notice by the appropriate TTB officer.
(b) A proprietor of an alcohol fuel plant must maintain any records required by this subpart for a period of not less than three years from the date of creation of the record or the date of the last entry required to be made in the record, whichever is later.
(c) A proprietor of an alcohol fuel plant may be required to reproduce records in order to maintain their readability and availability for inspection. Whenever any record might become unreadable or otherwise unsuitable for its intended or continued use, the proprietor is responsible for reproducing the record by a process that accurately and legibly reproduces the original record.
(d) For records kept on electronic media, the provisions of [§ 19.574](/current/title-27/section-19.574) apply.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.717 Time for making entries in records.
A proprietor of an alcohol fuel plant must record entries required by this subpart in the proprietor's records on a daily basis, as the transaction or operation occurs, but not later than the close of the next business day after the occurrence of the transaction or operation. However, if a proprietor prepares supplemental or auxiliary records when an operation or transaction occurs and those records contain all of the information required under this subpart, the proprietor may make entries in the required records not later than the close of business on the third business day following the day on which the transaction or operation occurred.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.718 Required records.
A proprietor of an alcohol fuel plant must maintain records that accurately reflect the operations and transactions occurring at the plant. These records must include production, receipt, manufacture, and disposition records.
(a) *Production, receipt, and manufacture records.* The proprietor must maintain records of all production, receipts, and manufacture at the alcohol fuel plant. This includes records of:
(1) The quantity and proof of spirits produced;
(2) The kind and quantity of materials used to produce spirits, if the proprietor is a medium plant or large plant;
(3) The proof gallons of spirits on hand;
(4) The proof gallons of spirits received. The proprietor may use a copy of the consignor's invoice or other document received with the shipment if the proprietor records the date of receipt and quantity received;
(5) The quantities and types of materials added to each lot of spirits to render the spirits unfit for beverage use; and
(6) The quantity of fuel alcohol manufactured. Fuel alcohol may be recorded in wine gallons.
(b) *Disposition records.* The proprietor must maintain records of all dispositions of spirits and fuel alcohol removed from the alcohol fuel plant. Records for dispositions of fuel alcohol and spirits must be maintained separately. Required records include:
(1) The amount of fuel alcohol removed. The commercial record or other document required by [§ 19.729](/current/title-27/section-19.729) will constitute the required record;
(2) The amount of spirits transferred. For all spirits transferred to another qualified distilled spirits plant or alcohol fuel plant the proprietor must maintain the commercial invoice or other documentation required by [§§ 19.405](/current/title-27/section-19.405) and [19.734](/current/title-27/section-19.734);
(3) Record of other dispositions. If the proprietor has other dispositions of spirits or fuel alcohol such as losses, destruction, or redistillation, the proprietor must keep a record of those dispositions. The record must include the quantity of spirits (in proof gallons) or fuel alcohol (in wine gallons), the date of disposition, and the purpose for which used or the nature of any other disposition;
(4) Testing records. If the proprietor conducts testing and analysis of samples of spirits or fuel alcohol in accordance with [§ 19.749](/current/title-27/section-19.749), the proprietor must keep a record of the date of the testing and the amount of spirits (in proof gallons) or fuel alcohol (in wine gallons) tested.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), [5207](https://www.govinfo.gov/link/uscode/26/5207))
#### § 19.719 Spirits made unfit for beverage use in the production process.
If an alcohol fuel plant makes spirits unfit for beverage use before the spirits are removed from the production process, for example by the in-line addition of materials or by the addition of materials to receptacles where spirits are first deposited, the proprietor must determine the quantity and proof of the spirits produced for purposes of the production records by:
(a) Determining the proof of each lot of spirits by procuring a representative sample of each lot, prior to the addition of any materials for rendering the spirits unfit for beverage use, and then proofing the spirits; and
(b) Determining the quantity (proof gallons) of spirits produced by subtracting the quantity of materials added to render the spirits unfit for beverage use from the quantity of fuel alcohol (in gallons) produced and multiplying the resulting figure by the proof of the spirits divided by 100.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), [5207](https://www.govinfo.gov/link/uscode/26/5207))
### Reports
#### § 19.720 Reports.
Each proprietor of an alcohol fuel plant must submit to the appropriate TTB officer an annual report of operations on form TTB F 5110.75, Alcohol Fuel Plant Report, for each calendar year. The proprietor must submit this report by January 30 following the end of the calendar year.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207))
### Redistillation
#### § 19.722 General rules for redistillation of spirits or fuel alcohol.
The proprietor of an alcohol fuel plant may receive and redistill spirits. The proprietor may also receive fuel alcohol for redistillation and recovery of the spirits contained in the fuel alcohol. The following general rules apply to redistillation activities at an alcohol fuel plant:
(a) The proprietor must separately identify in the required records any spirits and fuel alcohol received for redistillation;
(b) The proprietor must keep all spirits and fuel alcohol received for redistillation physically separate from each other and from other spirits and fuel alcohol until they are redistilled;
(c) Spirits recovered by redistillation will be treated the same as spirits that have not been redistilled; and
(d) All provisions of this subpart and [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101), including provisions regarding liability for tax applicable to spirits when originally produced, apply to spirits recovered by distillation.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181))
#### § 19.723 Effect of redistillation on plant size and bond amount.
The redistillation of spirits at an alcohol fuel plant may affect the alcohol fuel plant size category and the resulting bond penal sum amount. The following rules apply in this regard:
(a) Spirits originally produced by the alcohol fuel plant and subsequently recovered by redistillation are not includable in the determination of plant size and bond amount; and
(b) Spirits originally produced elsewhere and subsequently recovered by redistillation at the alcohol fuel plant are includable in the determination of plant size and bond amount.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181))
#### § 19.724 Records of redistillation.
(a) Except as otherwise provided in [paragraph (b)](/current/title-27/section-19.724#p-19.724\(b\)) of this section, a proprietor must record in a separate record the following information for spirits and fuel alcohol received at the alcohol fuel plant for redistillation:
(1) Date of receipt;
(2) Identification as spirits or fuel alcohol;
(3) Quantity received;
(4) From whom received;
(5) Reason for redistillation;
(6) Date redistilled; and
(7) The quantity of spirits recovered by redistillation.
(b) A proprietor may use a document required by [§ 19.729](/current/title-27/section-19.729) or [§ 19.734](/current/title-27/section-19.734) or any other commercial record covering spirits or fuel alcohol received in lieu of the record required by [paragraph (a)](/current/title-27/section-19.724#p-19.724\(a\)) of this section, provided that it contains all of the information required by [paragraph (a)](/current/title-27/section-19.724#p-19.724\(a\)) of this section, including any such information added to it by the proprietor.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), [5223](https://www.govinfo.gov/link/uscode/26/5223))
### Rules for Use, Withdrawal, and Transfer of Spirits
#### § 19.726 Prohibited uses, transfers, and withdrawals.
No person may withdraw, use, sell or otherwise dispose of distilled spirits, including fuel alcohol, produced under this subpart for any purpose other than for fuel use. The law imposes criminal penalties on any person who withdraws, uses, sells, or otherwise disposes of distilled spirits, including fuel alcohol, produced under this subpart for other than fuel use.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), [5601](https://www.govinfo.gov/link/uscode/26/5601))
#### § 19.727 Use on premises.
A proprietor may use spirits as a fuel on the premises of the alcohol fuel plant where they were produced without having to make them unfit for beverage use. A proprietor using spirits in this way must keep the applicable records concerning such use as provided in [§ 19.718(b)(3)](/current/title-27/section-19.718#p-19.718\(b\)\(3\)).
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181))
#### § 19.728 Withdrawal of spirits.
Before withdrawal of spirits from the premises of an alcohol fuel plant, the proprietor must render the spirits unfit for beverage use as provided in this subpart. Spirits rendered unfit for beverage use may be withdrawn free of tax from the alcohol fuel plant premises if they will be used exclusively for fuel.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), [5214](https://www.govinfo.gov/link/uscode/26/5214))
#### § 19.729 Withdrawal of fuel alcohol.
(a) For each shipment or other removal of fuel alcohol from the alcohol fuel plant premises, the consignor proprietor must prepare a commercial invoice, sales slip, or similar document that shows:
(1) The date of the withdrawal;
(2) The quantity of fuel alcohol removed;
(3) A description of the shipment that includes the number and size of containers, tank trucks, etc.; and
(4) The name and address of the consignee.
(b) The consignor proprietor must retain in its records a copy of the document described in [paragraph (a)](/current/title-27/section-19.729#p-19.729\(a\)) of this section.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181))
### Transfer of Spirits Between Alcohol Fuel Plants
#### § 19.733 Authorized transfers between alcohol fuel plants.
A proprietor may remove spirits from the bonded premises of an alcohol fuel plant, including the premises of a small plant, for transfer in bond to another alcohol fuel plant. A proprietor of an alcohol fuel plant may also receive spirits from another alcohol fuel plant. The following conditions apply to such transfers:
(a) The transfer of spirits must be pursuant to an approved application on form TTB F 5100.16, Application for Transfer of Spirits and/or Denatured Spirits in Bond in accordance with [§ 19.403](/current/title-27/section-19.403);
(b) Bulk conveyances in which spirits are transferred must be secured with locks, seals, or other devices in accordance with [§ 19.441](/current/title-27/section-19.441);
(c) It is not necessary to render the spirits unfit for beverage use prior to the transfer;
(d) The transferred spirits may not be withdrawn, used, sold, or disposed of for other than fuel use; and
(e) Each proprietor must adhere to the requirements for transfers between alcohol fuel plants prescribed in [§§ 19.734](/current/title-27/section-19.734) through [19.736](/current/title-27/section-19.736), as applicable.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), [5212](https://www.govinfo.gov/link/uscode/26/5212))
#### § 19.734 Consignor for in-bond shipments.
A proprietor that ships distilled spirits in bond to another alcohol fuel plant is the “consignor” of the shipment. When shipping spirits in bond, the consignor must:
(a) Ship the spirits pursuant to an approved application on form TTB F 5100.16, Application for Transfer of Spirits and/or Denatured Spirits in Bond;
(b) Prepare a duplicate commercial invoice or shipping document for each shipment of spirits that includes the following:
(1) The quantity of the spirits transferred;
(2) The proof of the spirits transferred;
(3) A description of the shipment that includes the number and size of drums, barrels, tank trucks, etc.;
(4) The consignor's name, address, and permit number and the name, address, and permit number of the proprietor of the alcohol fuel plant that will receive the spirits; and
(5) The serial numbers of seals, locks, or other devices used to secure the shipment; and
(c) Forward the original invoice or shipping document with the shipment to the proprietor of the receiving alcohol fuel plant and retain a copy in the alcohol fuel plant's records.
([26 U.S.C. 5212](https://www.govinfo.gov/link/uscode/26/5212))
#### § 19.735 Reconsignment while in transit.
A consignor may reconsign an in-bond shipment of spirits while the shipment is in transit or upon arrival at the premises of the consignee for any bona fide reason such as when the spirits transferred in bond are found to be unsuitable for the intended purpose or the spirits were shipped in error. The consignor may reconsign the shipment to itself or to another consignee that is qualified to receive the spirits. In either case, an Application for Transfer of Spirits and/or Denatured Spirits in Bond on form TTB F 5100.16 must have been previously approved for the new consignee and must be on file at the alcohol fuel plant. The bond of the new consignee of the spirits will cover the spirits while they are in transit after reconsignment. When reconsigning a shipment, the consignor must notify the original consignee that the transfer has been cancelled and must make a notation on the original invoice or shipping document that the shipment was reconsigned. The consignor must also prepare a new invoice or shipping document for the new consignee and must mark the new invoice or shipping document “reconsignment.”
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), [5212](https://www.govinfo.gov/link/uscode/26/5212))
#### § 19.736 Consignee for in-bond shipments.
(a) *General.* A proprietor that receives spirits in bond from another alcohol fuel plant is the “consignee” of the shipment. When receiving spirits in bond, the consignee must:
(1) Examine each conveyance and notify the appropriate TTB officer immediately if any of the locks, seals, or other devices that secure each conveyance do not arrive at the premises intact;
(2) Determine the quantity of spirits received and record the quantity and date of receipt on the invoice or shipping document sent with the shipment; and
(3) Retain the invoice or shipping document as part of the records required by [§ 19.718](/current/title-27/section-19.718).
(b) *Portable containers.* A consignee who receives spirits in barrels, drums, or other portable containers that are not secured by seals or other devices must verify the contents of each container. The consignee must record the quantity received in each container on a list and must attach the list to the invoice or shipping document received with the shipment.
(c) *Bulk conveyances or pipelines.* A consignee who receives spirits in bulk conveyances or by pipeline must gauge the spirits received and record the quantity determined on the invoice or shipping document received with the shipment. The appropriate TTB officer may waive the requirement for gauging spirits received by pipeline if requested in writing by the consignee and if there is no jeopardy to the revenue.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), [5204](https://www.govinfo.gov/link/uscode/26/5204), [5212](https://www.govinfo.gov/link/uscode/26/5212))
### Transfer of Spirits to and from Distilled Spirits Plants
#### § 19.739 Authorized transfers to or from distilled spirits plants.
Except for spirits produced from petroleum, natural gas, or coal, a proprietor of an alcohol fuel plant may receive spirits in bond from a distilled spirits plant qualified under [subpart D of this part](/current/title-27/part-19/subpart-D). A proprietor of an alcohol fuel plant may also transfer spirits in bond from the alcohol fuel plant to a distilled spirits plant qualified under [subpart D of this part](/current/title-27/part-19/subpart-D). The following conditions apply to such transfers:
(a) Bulk conveyances in which spirits are transferred must be secured with locks, seals, or other devices in accordance with [§ 19.441](/current/title-27/section-19.441);
(b) It is not necessary to render the spirits unfit for beverage use prior to the transfer;
(c) The transferred spirits may not be withdrawn, used, sold, or disposed of for other than fuel use;
(d) An alcohol fuel plant proprietor transferring spirits filled into portable containers to the bonded premises of a distilled spirits plant must mark the containers as required by [§ 19.752(b)](/current/title-27/section-19.752#p-19.752\(b\));
(e) The procedures in [§§ 19.403](/current/title-27/section-19.403) through [19.406](/current/title-27/section-19.406) and [§ 19.620](/current/title-27/section-19.620) apply to the transfer of spirits from an alcohol fuel plant to a distilled spirits plant; and
(f) The procedures in [§§ 19.403](/current/title-27/section-19.403), [19.404](/current/title-27/section-19.404), [19.405](/current/title-27/section-19.405), and [19.407](/current/title-27/section-19.407) apply to the transfer of spirits from a distilled spirits plant to an alcohol fuel plant.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), [5212](https://www.govinfo.gov/link/uscode/26/5212))
### Receipt of Spirits from Customs Custody
#### § 19.742 Authorized transfers from customs custody.
A proprietor of an alcohol fuel plant may withdraw from customs custody spirits imported or brought into the United States in bulk containers and may transfer those spirits without payment of tax to the proprietor's alcohol fuel plant subject to the following conditions:
(a) The transfer of the spirits may only be to an alcohol fuel plant that is required to file, and has filed, a bond;
(b) The spirits must not have been produced from petroleum, natural gas, or coal;
(c) The alcohol fuel plant must further manufacture or process the spirits after receipt;
(d) The proprietor of the alcohol fuel plant may only redistill or denature the spirits if the imported spirits are 185° or more of proof and will be withdrawn for fuel use; and
(e) The proprietor of the alcohol fuel plant must follow the procedures for receiving spirits prescribed in [§ 19.736](/current/title-27/section-19.736) and [subpart L of part 27 of this chapter](/current/title-27/part-27/subpart-L).
([26 U.S.C. 5232](https://www.govinfo.gov/link/uscode/26/5232))
### Materials for Making Spirits Unfit for Beverage Use
#### § 19.746 Authorized materials.
(a) *General.* The appropriate TTB officer determines what materials make spirits unfit for beverage use but do not impair the quality of the spirits for fuel use. Spirits treated with materials authorized under this section will be considered rendered unfit for beverage use and eligible for withdrawal as fuel alcohol.
(b) *Authorized materials.* Subject to the specifications in [paragraph (c)](/current/title-27/section-19.746#p-19.746\(c\)) of this section, proprietors are authorized to render spirits unfit for beverage use by adding to each 100 gallons of spirits any of following materials in the quantities specified:
(1) Two gallons or more of—
(i) Gasoline or automotive gasoline (for use in engines that require unleaded gasoline, the Environmental Protection Agency and manufacturers specifications may require that unleaded gasoline be used to render spirits unfit for beverage use);
(ii) Natural gasoline;
(iii) Kerosene;
(iv) Deodorized kerosene;
(v) Rubber hydrocarbon solvent;
(vi) Methyl isobutyl ketone;
(vii) Mixed isomers of nitropropane;
(viii) Heptane;
(ix) Ethyl tertiary butyl ether (ETBE);
(x) Raffinate;
(xi) Naphtha;
(xii) Straight run gasoline;
(xiii) Alkylate;
(xiv) High octane denaturant blend;
(xv) Methyl tertiary butyl ether; or
(xvi) Any combination of the materials listed in [paragraphs (b)(1)(i)](/current/title-27/section-19.746#p-19.746\(b\)\(1\)\(i\)) through [(xv)](/current/title-27/section-19.746#p-19.746\(b\)\(1\)\(xv\)) of this section;
(2) Five gallons or more of Toluene; or
(3) One-eighth (1⁄8) of an ounce of denatonium benzoate N.F. and 2 gallons of isopropyl alcohol.
(c) *Specifications.* Specifications for the materials listed in paragraph (b) are found in part 21, subpart E, of this chapter.
(d) *Published list.* The appropriate TTB officer periodically publishes a list of materials that may be used to make spirits unfit for beverage use in addition to those listed in [paragraph (b)](/current/title-27/section-19.746#p-19.746\(b\)) of this section. The list can be found at *[https://www.ttb.gov](https://www.ttb.gov).* The list will specify the material name and quantity required to render spirits unfit for beverage use.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181))
\[T.D. TTB-140, [81 FR 59455](https://www.federalregister.gov/citation/81-FR-59455), Aug. 30, 2016, as amended by T.D. TTB-196, [89 FR 87939](https://www.federalregister.gov/citation/89-FR-87939), Nov. 6, 2024]
#### § 19.747 Other materials.
If a proprietor wishes to use a material to render spirits unfit for beverage use that is not authorized under [§ 19.746](/current/title-27/section-19.746) or that is not on the published list of materials, the proprietor may submit an application for approval to the appropriate TTB officer. The application must include the name of the material and the quantity of material that the proprietor proposes to add to each 100 gallons of spirits. The appropriate TTB officer may require the proprietor to submit an 8-ounce sample of such material. The proprietor may not use any proposed material until the appropriate TTB officer approves its use. Any material that impairs the quality of the spirits for fuel use will not be approved. The proprietor must retain as part of the records available for inspection by appropriate TTB officers any application approved by the appropriate TTB officer under this section.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181))
### Rules for Taking Samples
#### § 19.749 Samples.
The following rules apply to the testing and analysis of samples of spirits and fuel alcohol for purposes of this subpart:
(a) A proprietor may take samples of spirits and fuel alcohol for on-site testing and analysis at the proprietor's alcohol fuel plant;
(b) A proprietor may not remove samples of spirits from the premises of the alcohol fuel plant for testing and analysis;
(c) A proprietor may remove samples of fuel alcohol from the premises of the alcohol fuel plant for testing and analysis at a qualified laboratory;
(d) A proprietor of an alcohol fuel plant must account for all samples in the record required by [§ 19.718(b)(4)](/current/title-27/section-19.718#p-19.718\(b\)\(4\)); and
(e) A proprietor of an alcohol fuel plant must indicate on each container that the spirits or fuel alcohol inside is a sample.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181))
### Marking Requirements
#### § 19.752 Marks.
(a) *Fuel alcohol.* A proprietor of an alcohol fuel plant must place a conspicuous and permanent warning mark or label on each container of 55 gallons or less of fuel alcohol that the proprietor will withdraw from the plant premises. The proprietor must place the mark or label on the head or side of the container and must use plain, legible letters. The proprietor may place other marks or labels on the container if the other marks or labels do not obscure the required warning. The required warning is as follows:
# WARNING
# FUEL ALCOHOL
# MAY BE HARMFUL OR
# FATAL IF SWALLOWED
(b) *Spirits.* If a proprietor intends to transfer barrels, drums, or similar portable containers of spirits to a distilled spirits plant qualified under [subpart D of this part](/current/title-27/part-19/subpart-D), the proprietor must mark or label each container. The proprietor must place the mark or label on the head or side of the container and must use plain, legible letters. The proprietor may place other marks or labels on the container if the other marks or labels do not obscure the required marks or labels. The required mark or label each container must contain the following information:
(1) Quantity in wine gallons;
(2) Proof of the spirits;
(3) Name, address, and permit number of the alcohol fuel plant;
(4) The words “Spirits—For Alcohol Fuel Use Only”; and
(5) The serial number of the container. Serial numbers must be assigned as follows—
(i) Consecutively commencing with “1”;
(ii) When the numbering system of any series reaches “1,000,000” the proprietor may begin the series again by adding an alphabetical prefix or suffix to the series; and
(iii) When there is a change in proprietorship or a change in the individual, firm, corporate name, or trade name, the series in use at the time of the change may be continued.
([26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), [5206](https://www.govinfo.gov/link/uscode/26/5206))
## Subpart Y—Paperwork Reduction Act
#### § 19.761 OMB control numbers assigned under the Paperwork Reduction Act.
(a) *Purpose.* This subpart displays the control numbers assigned to information collection requirements in this part by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995, [Public Law 104-13](https://www.govinfo.gov/link/plaw/104/public/13).
(b) *Display.* The following display identifies each section in this part that contains an information collection requirement and the OMB control number that is assigned to that information collection requirement.
Table 1 to Paragraph (b)
| Section where contained | Current OMB control No. |
| ----------------------- | ----------------------- |
| 19.11 | 1513-0088 |
| 19.13 | 1513-0048 |
| 19.26 | 1513-0048 |
| 19.27 | 1513-0048 |
| 19.28 | 1513-0048 |
| 19.33 | 1513-0048 |
| 19.35 | 1513-0048 |
| 19.37 | 1513-0048 |
| 19.54 | 1513-0048 |
| 19.55 | 1513-0048 |
| | 1513-0081 |
| 19.56 | 1513-0048 |
| 19.59 | 1513-0013 |
| 19.60 | 1513-0013 |
| | 1513-0048 |
| 19.71 | 1513-0048 |
| 19.72 | 1513-0048 |
| 19.73 | 1513-0048 |
| 19.74 | 1513-0048 |
| 19.75 | 1513-0048 |
| 19.76 | 1513-0048 |
| 19.77 | 1513-0046 |
| | 1513-0048 |
| 19.78 | 1513-0014 |
| | 1513-0048 |
| 19.79 | 1513-0048 |
| 19.91 | 1513-0040 |
| 19.92 | 1513-0040 |
| 19.93 | 1513-0040 |
| 19.94 | 1513-0040 |
| 19.95 | 1513-0040 |
| 19.97 | 1513-0040 |
| 19.112 | 1513-0048 |
| 19.113 | 1513-0048 |
| 19.113 | 1513-0088 |
| 19.114 | 1513-0048 |
| 19.115 | 1513-0048 |
| 19.116 | 1513-0013 |
| | 1513-0048 |
| | 1513-0088 |
| 19.117 | 1513-0013 |
| | 1513-0048 |
| 19.118 | 1513-0013 |
| | 1513-0048 |
| 19.119 | 1513-0048 |
| | 1513-0088 |
| 19.120 | 1513-0048 |
| | 1513-0088 |
| 19.121 | 1513-0048 |
| 19.122 | 1513-0048 |
| 19.123 | 1513-0048 |
| 19.126 | 1513-0040 |
| 19.127 | 1513-0088 |
| 19.128 | 1513-0040 |
| 19.129 | 1513-0040 |
| | 1513-0088 |
| 19.130 | 1513-0040 |
| | 1513-0088 |
| 19.131 | 1513-0040 |
| | 1513-0088 |
| 19.132 | 1513-0013 |
| | 1513-0040 |
| | 1513-0088 |
| 19.133 | 1513-0013 |
| | 1513-0040 |
| 19.134 | 1513-0013 |
| | 1513-0040 |
| | 1513-0088 |
| 19.135 | 1513-0040 |
| 19.141 | 1513-0013 |
| | 1513-0044 |
| 19.142 | 1513-0044 |
| 19.143 | 1513-0013 |
| | 1513-0044 |
| 19.154 | 1513-0044 |
| 19.155 | 1513-0013 |
| 19.156 | 1513-0014 |
| 19.168 | 1513-0013 |
| 19.170 | 1513-0048 |
| 19.171 | 1513-0048 |
| 19.172 | 1513-0048 |
| 19.187 | 1513-0080 |
| 19.189 | 1513-0080 |
| 19.191 | 1513-0080 |
| 19.192 | 1513-0048 |
| 19.198 | 1513-0048 |
| 19.201 | 1513-0088 |
| | 1513-0113 |
| 19.202 | 1513-0113 |
| 19.203 | 1513-0113 |
| 19.222 | 1513-0045 |
| | 1513-0088 |
| 19.225 | 1513-0045 |
| 19.226 | 1513-0045 |
| 19.226 | 1513-0056 |
| 19.227 | 1513-0045 |
| 19.230 | 1513-0045 |
| | 1513-0083 |
| 19.231 | 1513-0045 |
| 19.233 | 1513-0045 |
| | 1513-0083 |
| | 1513-0088 |
| 19.234 | 1513-0045 |
| | 1513-0083 |
| | 1513-0088 |
| 19.235 | 1513-0088 |
| 19.236 | 1513-0083 |
| | 1513-0088 |
| 19.237 | 1513-0045 |
| | 1513-0083 |
| 19.238 | 1513-0045 |
| | 1513-0083 |
| 19.239 | 1513-0045 |
| | 1513-0083 |
| | 1513-0088 |
| 19.240 | 1513-0045 |
| | 1513-0083 |
| | 1513-0088 |
| 19.242 | 1513-0045 |
| | 1513-0083 |
| 19.243 | 1513-0045 |
| 19.246 | 1513-0045 |
| 19.247 | 1513-0045 |
| 19.248 | 1513-0045 |
| 19.249 | 1513-0045 |
| 19.253 | 1513-0088 |
| 19.256 | 1513-0045 |
| 19.257 | 1513-0045 |
| 19.261 | 1513-0048 |
| 19.262 | 1513-0030 |
| | 1513-0045 |
| | 1513-0088 |
| 19.263 | 1513-0030 |
| | 1513-0045 |
| | 1513-0088 |
| 19.264 | 1513-0030 |
| | 1513-0045 |
| | 1513-0088 |
| 19.265 | 1513-0030 |
| | 1513-0088 |
| 19.266 | 1513-0030 |
| | 1513-0045 |
| | 1513-0088 |
| 19.267 | 1513-0045 |
| | 1513-0088 |
| 19.268 | 1513-0088 |
| 19.269 | 1513-0030 |
| | 1513-0045 |
| 19.281 | 1513-0048 |
| 19.283 | 1513-0056 |
| 19.284 | 1513-0056 |
| 19.286 | 1513-0056 |
| 19.287 | 1513-0056 |
| 19.288 | 1513-0056 |
| 19.289 | 1513-0056 |
| | 1513-0056 |
| 19.292 | 1513-0044 |
| 19.293 | 1513-0047 |
| 19.294 | 1513-0047 |
| 19.295 | 1513-0047 |
| 19.303 | 1513-0056 |
| 19.305 | 1513-0039 |
| | 1513-0056 |
| 19.306 | 1513-0056 |
| 19.307 | 1513-0056 |
| 19.308 | 1513-0047 |
| 19.309 | 1513-0047 |
| 19.312 | 1513-0056 |
| 19.322 | 1513-0039 |
| | 1513-0056 |
| 19.324 | 1513-0039 |
| | 1513-0056 |
| 19.327 | 1513-0039 |
| 19.329 | 1513-0039 |
| 19.331 | 1513-0056 |
| 19.333 | 1513-0056 |
| 19.343 | 1513-0041 |
| 19.352 | 1513-0048 |
| 19.353 | 1513-0041 |
| 19.354 | 1513-0088 |
| 19.357 | 1513-0041 |
| 19.360 | 1513-0041 |
| | 1513-0056 |
| 19.362 | 1513-0041 |
| 19.363 | 1513-0041 |
| 19.371 | 1513-0056 |
| | 1513-0088 |
| 19.372 | 1513-0048 |
| | 1513-0056 |
| | 1513-0088 |
| 19.381 | 1513-0049 |
| 19.383 | 1513-0056 |
| 19.384 | 1513-0048 |
| 19.386 | 1513-0049 |
| 19.387 | 1513-0049 |
| 19.388 | 1513-0048 |
| 19.389 | 1513-0056 |
| 19.392 | 1513-0048 |
| 19.393 | 1513-0049 |
| 19.394 | 1513-0056 |
| 19.402 | 1513-0056 |
| 19.403 | 1513-0038 |
| 19.404 | 1513-0038 |
| 19.405 | 1513-0038 |
| | 1513-0056 |
| 19.406 | 1513-0038 |
| | 1513-0056 |
| 19.407 | 1513-0056 |
| 19.411 | 1513-0039 |
| 19.414 | 1513-0056 |
| 19.419 | 1513-0056 |
| 19.420 | 1513-0048 |
| 19.425 | 1513-0056 |
| 19.427 | 1513-0056 |
| 19.431 | 1513-0056 |
| 19.434 | 1513-0048 |
| | 1513-0056 |
| 19.435 | 1513-0056 |
| 19.436 | 1513-0045 |
| | 1513-0083 |
| 19.441 | 1513-0048 |
| 19.452 | 1513-0030 |
| | 1513-0056 |
| 19.454 | 1513-0056 |
| 19.455 | 1513-0042 |
| 19.457 | 1513-0056 |
| 19.459 | 1513-0048 |
| | 1513-0056 |
| 19.461 | 1513-0045 |
| 19.462 | 1513-0030 |
| | 1513-0039 |
| | 1513-0048 |
| | 1513-0056 |
| 19.464 | 1513-0030 |
| | 1513-0045 |
| 19.465 | 1513-0045 |
| | 1513-0056 |
| | 1513-0083 |
| 19.478 | 1513-0080 |
| 19.487 | 1513-0048 |
| 19.513 | 1513-0020 |
| 19.571 | 1513-0039 |
| | 1513-0045 |
| | 1513-0049 |
| | 1513-0056 |
| | 1513-0088 |
| 19.572 | 1513-0049 |
| 19.573 | 1513-0039 |
| | 1513-0049 |
| | 1513-0056 |
| | 1513-0088 |
| 19.574 | 1513-0039 |
| | 1513-0045 |
| | 1513-0049 |
| | 1513-0056 |
| | 1513-0088 |
| 19.575 | 1513-0039 |
| | 1513-0045 |
| | 1513-0049 |
| | 1513-0056 |
| | 1513-0088 |
| 19.576 | 1513-0039 |
| | 1513-0045 |
| | 1513-0049 |
| | 1513-0056 |
| | 1513-0088 |
| 19.577 | 1513-0039 |
| | 1513-0045 |
| | 1513-0056 |
| | 1513-0088 |
| 19.580 | 1513-0039 |
| | 1513-0045 |
| | 1513-0049 |
| | 1513-0088 |
| 19.581 | 1513-0039 |
| | 1513-0045 |
| | 1513-0049 |
| | 1513-0088 |
| 19.584 | 1513-0047 |
| 19.585 | 1513-0047 |
| 19.586 | 1513-0047 |
| 19.590 | 1513-0039 |
| 19.591 | 1513-0039 |
| 19.592 | 1513-0039 |
| 19.593 | 1513-0039 |
| 19.596 | 1513-0041 |
| 19.597 | 1513-0041 |
| 19.598 | 1513-0041 |
| 19.599 | 1513-0041 |
| 19.600 | 1513-0041 |
| 19.601 | 1513-0041 |
| 19.602 | 1513-0041 |
| 19.603 | 1513-0041 |
| 19.604 | 1513-0041 |
| 19.606 | 1513-0049 |
| 19.607 | 1513-0049 |
| 19.611 | 1513-0045 |
| | 1513-0088 |
| 19.612 | 1513-0045 |
| | 1513-0088 |
| 19.613 | 1513-0045 |
| 19.614 | 1513-0045 |
| 19.615 | 1513-0045 |
| 19.616 | 1513-0056 |
| 19.617 | 1513-0056 |
| 19.618 | 1513-0056 |
| 19.619 | 1513-0056 |
| 19.620 | 1513-0038 |
| | 1513-0056 |
| 19.621 | 1513-0056 |
| 19.623 | 1513-0056 |
| 19.624 | 1513-0041 |
| 19.626 | 1513-0056 |
| 19.627 | 1513-0044 |
| 19.632 | 1513-0039 |
| | 1513-0041 |
| | 1513-0047 |
| | 1513-0049 |
| | 1513-0049 |
| | 1513-0088 |
| 19.641 | 1513-0081 |
| 19.643 | 1513-0081 |
| 19.644 | 1513-0081 |
| 19.645 | 1513-0081 |
| 19.650 | 1513-0081 |
| | 1513-0088 |
| 19.665 | 1513-0052 |
| 19.666 | 1513-0052 |
| 19.667 | 1513-0052 |
| 19.669 | 1513-0088 |
| 19.670 | 1513-0088 |
| | 1513-0113 |
| 19.673 | 1513-0051 |
| 19.675 | 1513-0051 |
| 19.676 | 1513-0014 |
| | 1513-0051 |
| 19.677 | 1513-0051 |
| 19.680 | 1513-0051 |
| 19.683 | 1513-0051 |
| | 1513-0052 |
| 19.684 | 1513-0051 |
| 19.685 | 1513-0051 |
| | 1513-0052 |
| | 1513-0088 |
| 19.686 | 1513-0051 |
| | 1513-0088 |
| 19.687 | 1513-0052 |
| | 1513-0088 |
| 19.688 | 1513-0051 |
| | 1513-0088 |
| 19.689 | 1513-0051 |
| | 1513-0088 |
| 19.690 | 1513-0051 |
| | 1513-0088 |
| 19.692 | 1513-0051 |
| | 1513-0052 |
| | 1513-0088 |
| 19.695 | 1513-0052 |
| 19.709 | 1513-0052 |
| 19.710 | 1513-0052 |
| 19.714 | 1513-0052 |
| 19.715 | 1513-0052 |
| | 1513-0088 |
| 19.716 | 1513-0052 |
| | 1513-0088 |
| 19.717 | 1513-0052 |
| 19.718 | 1513-0052 |
| | 1513-0088 |
| 19.719 | 1513-0052 |
| 19.720 | 1513-0052 |
| 19.724 | 1513-0052 |
| 19.727 | 1513-0052 |
| 19.729 | 1513-0052 |
| 19.733 | 1513-0052 |
| 19.734 | 1513-0052 |
| 19.735 | 1513-0038 |
| | 1513-0052 |
| 19.736 | 1513-0052 |
| 19.739 | 1513-0052 |
| 19.746 | 1513-0052 |
| 19.747 | 1513-0052 |
| 19.749 | 1513-0052 |
| | 1513-0052 |
| 19.752 | 1513-0052 |
\[T.D. TTB-92, [76 FR 9090](https://www.federalregister.gov/citation/76-FR-9090), Feb. 16, 2011, as amended by T.D. TTB-196, [89 FR 87940](https://www.federalregister.gov/citation/89-FR-87940), Nov. 6, 2024]
# Part 20 — DISTRIBUTION AND USE OF DENATURED ALCOHOL AND RUM
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-20
Full text of 27 CFR Part 20 — DISTRIBUTION AND USE OF DENATURED ALCOHOL AND RUM. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 20—DISTRIBUTION AND USE OF DENATURED ALCOHOL AND RUM
#### Authority:
[26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5206](https://www.govinfo.gov/link/uscode/26/5206), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5271-5275](https://www.govinfo.gov/link/uscode/26/5271), [5311](https://www.govinfo.gov/link/uscode/26/5311), [5552](https://www.govinfo.gov/link/uscode/26/5552), [5555](https://www.govinfo.gov/link/uscode/26/5555), [5607](https://www.govinfo.gov/link/uscode/26/5607), [6065](https://www.govinfo.gov/link/uscode/26/6065), [6109](https://www.govinfo.gov/link/uscode/26/6109), [7805](https://www.govinfo.gov/link/uscode/26/7805).
#### Source:
T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, unless otherwise noted.
#### Editorial Note:
Nomenclature changes to part 20 appear by T.D. ATF-235, [66 FR 5473](https://www.federalregister.gov/citation/66-FR-5473), Jan. 19, 2001, and T.D. ATF-463 and T.D. ATF-462, [66 FR 42733](https://www.federalregister.gov/citation/66-FR-42733), [42736](https://www.federalregister.gov/citation/66-FR-42736), Aug. 15, 2001.
## Subpart A—Scope
#### § 20.1 General.
The regulations in this part relate to denatured distilled spirits and cover the procurement, use, disposition, and recovery of denatured alcohol, specially denatured rum, and articles containing denatured spirits.
#### § 20.2 Territorial extent.
(a) This part applies to the several States of the United States, the District of Columbia and to denatured spirits and articles coming into the United States from Puerto Rico or the Virgin Islands.
(b) For the purposes of this part, operations in a foreign-trade zone located in any State of the United States or the District of Columbia are regulated in the same manner as operations in any other part of such State or the District of Columbia.
(48 Stat. 999, as amended ([19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c)))
\[T.D. ATF-274, [53 FR 25156](https://www.federalregister.gov/citation/53-FR-25156), July 5, 1988, as amended by T.D. TTB-91, [76 FR 5477](https://www.federalregister.gov/citation/76-FR-5477), Feb. 1, 2011]
#### § 20.3 Related regulations.
Regulations related to this part are listed below:
[16 CFR Chapter I](/current/title-16/chapter-I)—Federal Trade Commission.
[16 CFR Chapter II](/current/title-16/chapter-II)—Consumer Product Safety Commission.
[21 CFR Chapter I](/current/title-21/chapter-I)—Food and Drug Administration, Department of Health and Human Services.
[27 CFR Part 19](/current/title-27/part-19)—Distilled Spirits Plants.
[27 CFR Part 21](/current/title-27/part-21)—Formulas for Denatured Alcohol and Rum.
[27 CFR Part 26](/current/title-27/part-26)—Liquors and Articles from Puerto Rico and the Virgin Islands.
[27 CFR Part 27](/current/title-27/part-27)—Importation of Distilled Spirits, Wines and Beer.
[27 CFR Part 29](/current/title-27/part-29)—Stills and Miscellaneous Regulations.
[27 CFR Part 71](/current/title-27/part-71)—Rules of Practice in Permit Proceedings.
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. ATF-207, [50 FR 23682](https://www.federalregister.gov/citation/50-FR-23682), June 5, 1985; T.D. ATF-459, [66 FR 38549](https://www.federalregister.gov/citation/66-FR-38549), July 25, 2001; T.D. ATF-479, [67 FR 30798](https://www.federalregister.gov/citation/67-FR-30798), May 8, 2002; T.D. ATF-923, [67 FR 17938](https://www.federalregister.gov/citation/67-FR-17938), Apr. 12, 2002]
## Subpart B—Definitions
#### § 20.11 Meaning of terms.
When used in this part and in forms prescribed under this part, the following terms have the meanings given in this section. Words in the plural form include the singular, and vice versa, and words importing the masculine gender include the feminine. The terms “includes” and “including” do not exclude things not enumerated which are in the same general class.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Alcohol.* Those spirits known as ethyl alcohol, ethanol, or spirits of wine, from whatever source or by whatever process produced; the term does not include such spirits as whisky, brandy, rum, gin, or vodka.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by the current version of TTB Order 1135.20, Delegation of the Administrator's Authorities in [27 CFR part 20](/current/title-27/part-20), Distribution and Use of Denatured Alcohol and Rum.
*Article.* Any substance or preparation in the manufacture of which denatured spirits are used, including the product obtained by further manufacture or by combination with other materials, if the article subjected to further manufacture or combination contained denatured spirits.
*Bulk conveyance.* Any tank car, tank truck, tank ship, or tank barge, or a compartment of any such conveyance, or any other container approved by the appropriate TTB officer for the conveyance of comparable quantities of denatured spirits or articles.
*CFR.* The Code of Federal Regulations.
*Completely denatured alcohol.* Those spirits known as alcohol, as defined in this section, denatured under the completely denatured alcohol formulas prescribed in [subpart C of part 21 of this chapter](/current/title-27/part-21/subpart-C).
*Dealer.* A person required to hold a permit to deal in specially denatured spirits for resale to persons authorized to purchase or receive specially denatured spirits in accordance with this part. The term does not include a person who only buys and sells specially denatured spirits which that person never physically receives or intends to receive.
*Denaturant.* Any one of the materials authorized under [part 21 of this chapter](/current/title-27/part-21) for addition to spirits in the production of denatured spirits.
*Denatured spirits.* Alcohol or rum to which denaturants have been added as provided in [part 21 of this chapter](/current/title-27/part-21).
*Denaturer.* The proprietor of a distilled spirits plant who denatures alcohol or rum under [part 19 of this chapter](/current/title-27/part-19).
*Distributor.* Any person who sells completely denatured alcohol, other than a proprietor of a distilled spirits plant who sells such alcohol at the plant premises, and any person who sells articles containing completely or specially denatured alcohol or specially denatured rum, other than the manufacturer, except where otherwise specifically restricted in this part.
*Executed under penalties of perjury.* Signed with the prescribed declaration under the penalties of perjury as provided on or with respect to the claim, form, or other document or, where no form of declaration is prescribed, with the declaration—
I declare under the penalties of perjury that this \_\_\_\_\_\_\_\_ (insert type of document, such as statement, report, certificate, application, claim, or other document), including the documents submitted in support thereof, has been examined by me and, to the best of my knowledge and belief, is true, correct, and complete.
*Fiduciary.* A guardian, trustee, executor, administrator, receiver, conservator, or any person acting in any fiduciary capacity for any person.
*Fit for beverage use, or fit for beverage purposes.* Suitable for consumption as an alcoholic beverage by a normal person, or susceptible of being made suitable for such consumption merely by dilution with water to an alcoholic strength of 15 percent by volume. The determination is based solely on the composition of the product and without regard to extraneous factors such as price, labeling, or advertising.
*Gallon.* The liquid measure equivalent to the volume of 231 cubic inches.
*Internal human use.* Use inside the human body, but not including use only in the mouth where the substance being used is not intended to be swallowed.
*Liter or litre.* A metric unit of capacity equal to 1,000 cubic centimeters of alcohol, and equivalent to 33.814 fluid ounces. A liter is divided into 1,000 milliliters. The symbol for milliliter or milliliters is “mL”.
*Manufacturer or user.* A person who holds a permit to use specially denatured alcohol or specially denatured rum or to recover completely or specially denatured alcohol, specially denatured rum, or articles.
*Permit.* The document issued under [26 U.S.C. 5271(a)](https://www.govinfo.gov/link/uscode/26/5271), authorizing a person to withdraw and deal in or use specially denatured alcohol or specially denatured rum or to recover denatured alcohol, specially denatured rum, or articles under specified conditions.
*Permittee.* Any person holding a permit, Form 5150.9, issued under this part to withdraw and deal in or use (including recover) denatured spirits.
*Person.* An individual, trust, estate, partnership, association, company, or corporation.
*Proof.* The ethyl alcohol content of a liquid at 60 °Fahrenheit, stated as twice the percent of ethyl alcohol by volume.
*Proof gallon.* A gallon at 60 °Fahrenheit which contains 50 percent by volume of ethyl alcohol having a specific gravity of 0.7939 at 60 °Fahrenheit referred to water at 60 °Fahrenheit as unity, or the alcoholic equivalent thereof.
*Proprietary solvents.* Solvents which are manufactured with specially denatured alcohol under the proprietary solvent general-use formula in this part.
*Recover.* To salvage, after use, specially denatured spirits, completely denatured alcohol without all of its original denaturants, or any article containing denatured spirits, if
(1) the original article was made with specially denatured spirits and the salvaged article does not contain all of the original ingredients of the article, or
(2) the original article was made with completely denatured alcohol and the salvaged article does not contain all of the original denaturants of the completely denatured alcohol.
*Recovered article.* An article containing specially denatured spirits salvaged without all of its original ingredients, or an article containing completely denatured alcohol salvaged without all of the original denaturants of the completely denatured alcohol.
*Recovered denatured alcohol.* Denatured alcohol (except completely denatured alcohol containing all of its original denaturants) which has been recovered.
*Recovered denatured rum.* Denatured rum which has been recovered.
*Restoration.* Restoring to the original state (except that the restored material may or may not contain denaturants to the same extent as the original material) of recovered denatured alcohol, recovered specially denatured rum, or recovered articles containing denatured alcohol or specially denatured rum. Restoration includes bringing the alcohol content of the recovered product to 190° of proof or more or to not less than the original proof if less than 190°. Restoration also includes the removal of foreign materials by any suitable means.
*Rum.* Any spirits produced from sugar cane products and distilled at less than 190° proof in such manner that the spirits possess the taste, aroma, and characteristics generally attributed to rum.
*Secretary of the Treasury* or *Secretary.* The Secretary of the Treasury or a delegate of the Secretary.
*Special industrial solvents.* Solvents which are manufactured with specially denatured alcohol under special industrial solvent general-use formula in this part.
*Specially denatured alcohol or S.D.A.* Those spirits known as alcohol, as defined in this section, denatured under the specially denatured alcohol formulas prescribed in [part 21 of this chapter](/current/title-27/part-21).
*Specially denatured rum or S.D.R.* Those spirits known as rum, as defined in this section, denatured under the specially denatured rum formula prescribed in [part 21 of this chapter](/current/title-27/part-21).
*Specially Denatured Spirits or S.D.S.* Specially denatured alcohol and/or specially denatured rum.
*Spirits or distilled spirits.* Alcohol or rum as defined in this part.
*Tank truck.* A tank-equipped semi-trailer, trailer, or truck, conforming to the requirements of this part.
*This chapter.* Chapter I, [Title 27, Code of Federal Regulations](/current/title-27).
*TTB.* The Alcohol and Tobacco Tax and Trade Bureau, U.S. Department of the Treasury.
*Unfit for beverage use, or unfit for beverage purposes.* Not conforming to the definition of “Fit for beverage use, or fit for beverage purposes” in this section.
*U.S.C.* The United States Code.
(Approved by the Office of Management and Budget under control number 1513-0061)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985; [50 FR 20099](https://www.federalregister.gov/citation/50-FR-20099), May 14, 1985, as amended by ATF-332, [57 FR 40849](https://www.federalregister.gov/citation/57-FR-40849), Sept. 8, 1992; T.D. ATF-435, [66 FR 5473](https://www.federalregister.gov/citation/66-FR-5473), Jan. 19, 2001; T.D. TTB-44, [71 FR 16934](https://www.federalregister.gov/citation/71-FR-16934), Apr. 4, 2006; T.D.TTB-140, [81 FR 59455](https://www.federalregister.gov/citation/81-FR-59455), Aug. 30, 2016; T.D. TTB-196, [89 FR 87940](https://www.federalregister.gov/citation/89-FR-87940), Nov. 6, 2024]
## Subpart C—Administrative Provisions
### Authorities
#### § 20.20 Delegations of the Administrator.
The regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in the current version of TTB Order 1135.20, Delegation of the Administrator's Authorities in [27 CFR Part 20](/current/title-27/part-20), Distribution and Use of Denatured Alcohol and Rum. You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-44, [71 FR 16934](https://www.federalregister.gov/citation/71-FR-16934), Apr. 4, 2006 ,as amended by T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016; T.D. TTB-196, [89 FR 87940](https://www.federalregister.gov/citation/89-FR-87940), Nov. 6, 2024]
#### § 20.21 Forms prescribed.
(a) The appropriate TTB officer is authorized to prescribe all forms required by this part, including applications, notices, claims, reports, and records. All of the information called for in each form shall be furnished as indicated by the headings on the form and the instructions on or pertaining to the form. In addition, information called for in each form shall be furnished as required by this part. The form will be filed in accordance with the instructions for the form.
(b) Forms prescribed by this part are available for printing through the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. ATF-249, [52 FR 5961](https://www.federalregister.gov/citation/52-FR-5961), Feb. 27, 1987; T.D. 372, [61 FR 20724](https://www.federalregister.gov/citation/61-FR-20724), May 8, 1996; T.D. ATF-435, [66 FR 5474](https://www.federalregister.gov/citation/66-FR-5474), Jan. 19, 2001; T.D. ATF-476, [67 FR 17938](https://www.federalregister.gov/citation/67-FR-17938), Apr. 12, 2002; T.D. TTB-44, [71 FR 16934](https://www.federalregister.gov/citation/71-FR-16934), Apr. 4, 2006; T.D. TTB-196, [89 FR 87940](https://www.federalregister.gov/citation/89-FR-87940), Nov. 6, 2024]
#### § 20.22 Alternate methods or procedures; and emergency variations from requirements.
(a) *Alternate methods or procedures* —
(1) *Application.* A permittee, after receiving approval from the appropriate TTB officer, may use an alternate method or procedure (including alternate construction or equipment) in lieu of a method or procedure prescribed by this part. A permittee wishing to use an alternate method or procedure may apply to the appropriate TTB officer. The permittee shall describe the proposed alternate method or procedure and shall set forth the reasons for its use.
(2) *Approval by appropriate TTB officer.* The appropriate TTB officer may approve the use of an alternate method or procedure if:
(i) The applicant shows good cause for its use;
(ii) It is consistent with the purpose and effect of the procedure prescribed by this part, and provides equal security to the revenue;
(iii) It is not contrary to law; and
(iv) It will not cause an increase in cost to the Government and will not hinder the effective administration of this part.
(3) *Conditions of approval.* A permittee may not employ an alternate method or procedure until the appropriate TTB officer has approved its use. The permittee shall, during the terms of the authorization of an alternate method or procedure, comply with terms of the approved application.
(b) *Emergency variations from requirements* —
(1) *Application.* When an emergency exists, a permittee may apply to the appropriate TTB officer for a variation from the requirements of this part relating to construction, equipment, and methods of operation. The permittee shall describe the proposed variation and set forth the reasons for using it.
(2) *Approval by appropriate TTB officer.* The appropriate TTB officer may approve an emergency variation from requirements if:
(i) An emergency exists;
(ii) The variation from the requirements is necessary;
(iii) It will afford the same security and protection to the revenue as intended by the specific regulations;
(iv) It will not hinder the effective administration of this part; and
(v) It is not contrary to law.
(3) *Conditions of approval.* A permittee may not employ an emergency variation from the requirements until the appropriate TTB officer has approved its use. Approval of variations from requirements are conditioned upon compliance with the conditions and limitations set forth in the approval.
(4) *Automatic termination of approval.* If the permittee fails to comply in good faith with the procedures, conditions or limitations set forth in the approval, authority for the variation from requirements is automatically terminated and the permittee is required to comply with prescribed requirements of regulations from which those variations were authorized.
(c) *Withdrawal of approval.* The appropriate TTB officer may withdraw approval for an alternate method or procedure, may withdraw approval for an emergency variation from requirements, approved under [paragraph (a)](/current/title-27/section-20.22#p-20.22\(a\)) or [(b)](/current/title-27/section-20.22#p-20.22\(b\)) of this section, if the appropriate TTB officer finds that the revenue is jeopardized or the effective administration of this part is hindered by the approval.
(Approved by the Office of Management and Budget under control number 1513-0061)
(Act of August 16, 1954, Ch. 736, 68A Stat. 917 ([26 U.S.C. 7805](https://www.govinfo.gov/link/uscode/26/7805)); sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended ([26 U.S.C. 5552](https://www.govinfo.gov/link/uscode/26/5552)))
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. ATF-235, [66 FR 5474](https://www.federalregister.gov/citation/66-FR-5474), Jan. 19, 2001; T.D. ATF-476, [67 FR 17938](https://www.federalregister.gov/citation/67-FR-17938), Apr. 12, 2002; T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.23 Approval of formulas and statements of process.
The appropriate TTB officer is authorized to approve all formulas for articles and statements of process relating to recovery operations or other activities required to be submitted on Form 5150.19.
#### § 20.24 Allowance of claims.
The appropriate TTB officer is authorized to allow claims for losses of specially denatured alcohol or specially denatured rum.
#### § 20.25 Permits.
The appropriate TTB officer must issue permits for the United States or a Governmental agency as provided in [§ 20.241](/current/title-27/section-20.241) and industrial alcohol user permits, Form 5150.9, required under this part.
\[T.D. ATF-435, [66 FR 5474](https://www.federalregister.gov/citation/66-FR-5474), Jan. 19, 2001]
#### § 20.27 Right of entry and examination.
An appropriate TTB officer may enter, during business hours or at any time operations are being conducted, any premises on which operations governed by this part are conducted to inspect the records and reports required by this part to be kept on those premises. An appropriate TTB officer may also inspect and take samples of distilled spirits, denatured alcohol, specially denatured rum or articles (including any substance for use in the manufacture of denatured alcohol, specially denatured rum or articles) to which those records or reports relate.
#### § 20.28 Detention of containers.
(a) *Summary detention.* An appropriate TTB officer may detain any container containing, or supposed to contain, spirits (including denatured spirits and articles), when the appropriate TTB officer believes those spirits, denatured spirits, or articles were produced, withdrawn, sold, transported, or used in violation of law or this part. The appropriate TTB officer shall hold the container at a safe place until it is determined if the detained property is liable by law to forfeiture.
(b) *Limitations.* Summary detention may not exceed 72 hours without process of law or intervention of the appropriate TTB officer. The person possessing the container immediately before its detention may prepare a waiver of the 72 hours limitation to have the container kept on his or her premises during detention.
(Sec. 201, Pub. L. 85-859, Stat. 1375, as amended ([26 U.S.C. 5311](https://www.govinfo.gov/link/uscode/26/5311)))
### Liability for Tax
#### § 20.31 Applicable laws and regulations; persons liable for tax.
(a) All laws and regulations regarding alcohol or rum that is not denatured, including those requiring payment of the distilled spirits tax, apply to completely denatured alcohol, specially denatured alcohol, specially denatured rum, or articles produced, withdrawn, sold, transported, or used in violation of laws or regulations pertaining to those substances.
(b) Any person who produces, withdraws, sells, transports, or uses completely denatured alcohol, specially denatured alcohol, specially denatured rum, or articles in violation of laws or regulations shall be required to pay the distilled spirits tax on those substances.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended ([26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001)))
### Marks and Brands
#### § 20.33 Time of destruction of marks and brands.
(a) Any person who empties a package containing denatured alcohol, specially denatured rum, or articles made from denatured alcohol or specially denatured rum shall immediately destroy or obliterate the marks, brands, and labels required by this chapter to be placed on packages containing those materials.
(b) A person may not destroy or obliterate the marks, brands or labels until the package or drum has been emptied.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended ([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206)))
### Document Requirements
#### § 20.36 Execution under penalties of perjury.
(a) When any form or document prescribed by this part is required to be executed under penalties of perjury, the dealer or user or other authorized person shall:
(1) Insert the declaration “I declare under the penalties of perjury that I have examined this \_\_\_\_\_\_\_\_ (insert the type of document such as claim, application, statement, report, certificate), including all supporting documents, and to the best of my knowledge and belief, it is true, correct, and complete”; and
(2) Sign the document.
(b) When the required document already bears a perjury declaration, the dealer or user or other authorized person shall sign the document.
([26 U.S.C. 6065](https://www.govinfo.gov/link/uscode/26/6065))
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. ATF-332, [57 FR 40849](https://www.federalregister.gov/citation/57-FR-40849), Sept. 8, 1992]
#### § 20.37 Filing of qualifying documents.
All documents returned to a permittee or other person as evidence of compliance with requirements of this part, or as authorization, shall except as otherwise provided, be kept readily available for inspection by an appropriate TTB officer during business hours.
## Subpart Ca \[Reserved]
## Subpart D—Qualification of Dealers and Users
### Application for Permit, Form 5150.22
#### § 20.41 Application for industrial alcohol user permit.
(a) *Dealers.* A person who desires to withdraw and deal in specially denatured spirits shall, before commencing business, file an application on Form 5150.22 for, and obtain a permit, Form 5150.9.
(b) *Users.* A person who desires to withdraw and use or recover specially denatured spirits shall, before commencing business, file an application on Form 5150.22 for, and obtain a permit, Form 5150.9. The provisions of this paragraph also apply to persons desiring to recover denatured spirits from articles.
(c) *Filing.* All applications and necessary supporting documents, as required by this subpart, shall be filed with the appropriate TTB officer. All data, written statements, certifications, affidavits, and other documents submitted in support of the application are considered a part of the application.
(1) Applications filed as provided in this section, shall be accompanied by evidence establishing the authority of the officer or other person to execute the application.
(2) A State, political subdivision thereof, or the District of Columbia, may specify in the application that it desires a single permit authorizing the withdrawal and use of specially denatured spirits in a number of institutions under it control. In this instance, the application, Form 5150.22, or an attachment, shall clearly show the method of distributing and accounting for the specially denatured spirits to be withdrawn.
(d) *Exceptions.*
(1) The proprietor of a distilled spirits plant qualified under [part 19 of this chapter](/current/title-27/part-19) is not required to qualify under this part for activities conducted at that plant's bonded premises.
(2) A permittee who was previously qualified on the effective date of this regulation shall not be required to requalify under this part.
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985; [50 FR 20099](https://www.federalregister.gov/citation/50-FR-20099), May 14, 1985; T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.42 Data for application, Form 5150.22.
(a) Unless waived under [§ 20.43](/current/title-27/section-20.43), each application on Form 5150.22 shall include as applicable, the following information:
(1) Serial number and purpose for which filed.
(2) Name and principal business address.
(3) Based on the bona fide requirements of the applicant, the estimated quantity of all formulations of specially denatured spirits, in gallons, which will be procured during a 12-month period.
(4) Location, or locations where specially denatured spirits will be sold or used if different from the business address.
(5) Statement that specially denatured spirits will be stored in accordance with the requirements of this part.
(6) For user applications, statement as to the intended use (e.g., cosmetics, external medicines, solvents, fuels, mouthwashes, laboratory uses, inks, etc.) to be made of the specially denatured spirits, and whether recovery, restoration, and redenaturation processes will be used.
(7) Statement as to the type of business organization and of the persons interested in the business, supported by the items of information listed in [§ 20.45](/current/title-27/section-20.45).
(8) Listing of the principal equipment to be used in recovery processes, including processing tanks, storage tanks, and equipment for recovery, restoration, and redenaturation of denatured spirits (including the serial number, kind, capacity, names and addresses of manufacturer and owner of distilling apparatus along with intended use).
(9) List of trade names under which the applicant will conduct operations, and the offices where these names are registered.
(10) Listing of the titles of offices, the incumbents of which are responsible for the specially denatured spirits activities of the business and are authorized by the articles of incorporation, the bylaws, or the board of directors to act and sign on behalf of the applicant.
(11) Other information and statements as the appropriate TTB officer may require to establish that the applicant is entitled to the permit. In the case of a corporation or other legal entity, the appropriate TTB officer may require information which establishes that the officers, directors and principal stockholders whose names are required to be furnished under [§ 20.45 (a)(2)](/current/title-27/section-20.45#p-20.45\(a\)\(2\)) and [(c)](/current/title-27/section-20.45#p-20.45\(c\)) have not violated or conspired to violate any law of the United States relating to intoxicating liquor or have been convicted of any offense under Title 26, U.S.C., punishable as a felony or of any conspiracy to commit such offense.
(b) If any of the information required by paragraphs (a)(4) through (a)(10) and any information which may be required under [paragraph (a)(11)](/current/title-27/section-20.42#p-20.42\(a\)\(11\)) of this section is on file with any appropriate TTB officer, the applicant may incorporate this information by reference by stating that the information is made a part of the application.
#### § 20.43 Exceptions to application requirements.
(a) The appropriate TTB officer may waive detailed application and supporting data requirements, other than the requirements of paragraphs (a)(1) through (a)(6) and (a)(9) of [§ 20.42](/current/title-27/section-20.42), and paragraph (a)(8) of that section as it relates to recovery, restoration and redistillation, in the case of—
(1) All applications, Form 5150.22, filed by States or political subdivisions thereof or the District of Columbia, and
(2) Applications, Form 5150.22, filed by applicants, where the appropriate TTB officer has determined that the waiver of such requirements does not pose any jeopardy to the revenue or a hindrance of the effective administration of this part.
(b) The waiver provided for in this section will terminate for a permittee, other than States or political subdivisions thereof or the District of Columbia, when the appropriate TTB officer determines that the conditions justifying the waiver no longer exist. In this case, the permittee will furnish the information in respect to the previously waived items, as provided in [§ 20.56(a)(2)](/current/title-27/section-20.56#p-20.56\(a\)\(2\)).
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended at T.D. ATF-476, [67 FR 17938](https://www.federalregister.gov/citation/67-FR-17938), Apr. 12, 2002]
#### § 20.44 Disapproval of application.
The appropriate TTB officer may, in accordance with [part 71 of this chapter](/current/title-27/part-71), disapprove an application for a permit to withdraw and deal or use denatured spirits, if on examination of the application (or inquiry), the appropriate TTB officer has reason to believe that:
(a) The applicant is not authorized by law and regulations to withdraw and deal in or use specially denatured spirits;
(b) The applicant (including, in the case of a corporation, any officer, director, or principal stockholder, or, in the case of a partnership, a partner) is, by reason of their business experience, financial standing, or trade connections, not likely to maintain operations in compliance with [26 U.S.C. Chapter 51](https://www.govinfo.gov/link/uscode/26/5101), or regulations issued under this part;
(c) The applicant has failed to disclose any material information required, or has made any false statement as to any material fact, in connection with the application; or
(d) The premises at which the applicant proposes to conduct the business are not adequate to protect the revenue.
#### § 20.45 Organizational documents.
The supporting information required by [§ 20.42(a)(7)](/current/title-27/section-20.42#p-20.42\(a\)\(7\)) includes, as applicable:
(a) *Corporate documents.*
(1) Certified true copy of the certificate of incorporation, or certified true copy of certificate authorizing the corporation to operate in the State where the premises are located (if other than that in which incorporated);
(2) Certified list of names and addresses of officers and directors, along with a statement designating which corporate offices, if applicable, are directly responsible for the specially denatured spirits portion of the business; and
(3) Statement showing the number of shares of each class of stock or other evidence of ownership, authorized and outstanding, the par value, and the voting rights of the respective owners or holders.
(b) *Articles of partnership.* True copy of the articles of partnership or association, if any, or certificate of partnership or association where required to be filed by any State, county, or municipality.
(c) *Statement of interest.*
(1) Names and addresses of persons owning 10% or more of each of the classes of stock in the corporation, or legal entity, and the nature and amount of the stockholding or other interest of each, whether such interest appears in the name of the interested party or in the name of another for him or her. If a corporation is wholly owned or controlled by another corporation, persons owning 10% or more of each of the classes of stock of the parent corporation are considered to be the persons interested in the business of the subsidiary, and the names and addresses of such persons must be submitted to the appropriate TTB officer if specifically requested.
(2) In the case of an individual owner or partnership, name and address of every person interested in the business, whether such interest appears in the name of the interested party or in the name of another for the interested person.
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. ATF-435, [66 FR 5474](https://www.federalregister.gov/citation/66-FR-5474), Jan. 19, 2001]
### Industrial Alcohol User Permit, Form 5150.9
#### § 20.48 Conditions of permits.
(a) Permits to withdraw and deal in or use specially denatured spirits will designate the acts which are permitted, and include any limitations imposed on the performance of these acts. All of the provisions of this part relating to the use, recovery, restoration or redistillation of denatured spirits or articles are considered to be included in the provisions and conditions of the permit, the same as if set out in the permit.
(b) An applicant need not have formulas and statements of processes, approved by the appropriate TTB officer, prior to the issuance of a permit by the appropriate TTB officer.
(c) A permittee shall not use specially denatured spirits in the manufacture or production of any article unless the appropriate TTB officer has approved the formula on Form 5150.19 or the article is covered by an approved general-use formula.
#### § 20.49 Duration of permits.
Permits to withdraw and deal in or use specially denatured spirits are continuing unless automatically terminated by the terms thereof, suspended or revoked as provided in [§ 20.51](/current/title-27/section-20.51), or voluntarily surrendered. The provisions of [§ 20.57](/current/title-27/section-20.57) are considered part of the terms and conditions of all permits.
#### § 20.50 Correction of permits.
If an error on a permit is discovered, the permittee shall immediately return the permit to the appropriate TTB officer for correction.
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985; [50 FR 20099](https://www.federalregister.gov/citation/50-FR-20099), May 14, 1985]
#### § 20.51 Suspension or revocation of permits.
The appropriate TTB officer may institute proceedings under [part 71 of this chapter](/current/title-27/part-71) to suspend or revoke a permit whenever the appropriate TTB officer has reason to believe that the permittee:
(a) Has not in good faith complied with the provisions of [26 U.S.C. Chapter 51](https://www.govinfo.gov/link/uscode/26/5101), or regulations issued under that chapter;
(b) Has violated the conditions of that permit;
(c) Has made any false statements as to any material fact in the application for the permit;
(d) Has failed to disclose any material information required to be furnished;
(e) Has violated or conspired to violate any law of the United States relating to intoxicating liquor or has been convicted of an offense under Title 26, U.S.C., punishable as a felony or of any conspiracy to commit such offense;
(f) Is, by reason of its operations, no longer warranted in procuring and dealing in or using specially denatured spirits authorized by the permit; or
(g) Has not engaged in any of the operations authorized by the permit for a period of more than 2 years.
#### § 20.52 Rules of practice in permit proceedings.
The regulations of [part 71 of this chapter](/current/title-27/part-71) apply to the procedure and practice in connection with the disapproval of any application for a permit and in connection with suspension or revocation of a permit.
#### § 20.53 Powers of attorney.
An applicant or permittee shall execute and file a Form 1534, in accordance with the instructions on the form, for each person authorized to sign or to act on behalf of the applicant or permittee. Form 1534 is not required for a person whose authority is furnished in accordance with [§ 20.42(a)(10)](/current/title-27/section-20.42#p-20.42\(a\)\(10\)).
#### § 20.54 Photocopying of permits.
A permittee may make photocopies of its permit exclusively for the purpose of furnishing proof of authorization to withdraw specially denatured spirits from a distilled spirits plant and other persons authorized under this part to deal in specially denatured spirits.
#### § 20.55 Posting of permits.
Permits issued under this part shall be kept posted and available for inspection on the permit premises.
### Changes After Original Qualification
#### § 20.56 Changes affecting applications and permits.
(a) *General* —
(1) *Changes affecting application.* When there is a change relating to any of the information contained in, or considered a part of the application on Form 5150.22 for a permit, the permittee shall, within 30 days (except as otherwise provided in this subpart) file a written notice with the appropriate TTB officer to amend the application. However, a change in the information required by [§ 20.42(a)(6)](/current/title-27/section-20.42#p-20.42\(a\)\(6\)) caused by approval of a new formula or statement of process shall not require filing a new application unless the approval is the permittee's first statement of process covering recovery operations.
(2) *Changes affecting waivers.* When any waiver under [§ 20.43](/current/title-27/section-20.43) is terminated by a change to the application, the permittee shall include the current information as to the item previously waived with the written notice required in [paragraph (a)(1)](/current/title-27/section-20.56#p-20.56\(a\)\(1\)) of this section.
(3) *Changes affecting permit.* When the terms of a permit are affected by a change, the written notice required by [paragraph (a)(1)](/current/title-27/section-20.56#p-20.56\(a\)\(1\)) of this section (except as otherwise provided in this subpart) will serve as an application to amend the permit.
(4) *Form of notice.* A written notice to amend an application on Form 5150.22 shall—
(i) Identify the permittee;
(ii) Contain the permit identification number;
(iii) Explain the nature of the change and contain any required supporting documents;
(iv) Identify the serial number of the applicable application, Form 5150.22; and
(v) Be consecutively numbered and signed by the permittee or any person authorized to sign on behalf of the permittee.
(b) *Amended application.* The appropriate TTB officer may require a permittee to file an amended application on Form 5150.22 when the number of changes to the previous application are determined to be excessive, or when a permittee has not timely filed the written notice prescribed in [paragraph (a)(1)](/current/title-27/section-20.56#p-20.56\(a\)\(1\)) of this section. If items on the amended application remain unchanged, they will be marked “No change since Form 5150.22, Serial No. \_\_\_\_\_\_\_\_\_\_.”
(c) *Changes in officers, directors and stockholders* —
(1) *Officers.* In the case of a change in the officers listed under the provisions of [§ 20.45(a)(2)](/current/title-27/section-20.45#p-20.45\(a\)\(2\)), the notice required by [paragraph (a)(1)](/current/title-27/section-20.56#p-20.56\(a\)\(1\)) of this section shall only apply (unless otherwise required, in writing, by the appropriate TTB officer) to those offices, the incumbents of which are responsible for the operations covered by this part.
(2) *Directors.* In the case of a change in the directors listed under the provisions of [§ 20.45(a)(2)](/current/title-27/section-20.45#p-20.45\(a\)\(2\)), the notice required by [paragraph (a)(1)](/current/title-27/section-20.56#p-20.56\(a\)\(1\)) of this section shall reflect the changes.
(3) *Stockholders.* In lieu of reporting all changes, within 30 days, to the list of stockholders furnished under the provisions of [§ 20.45(c)(1)](/current/title-27/section-20.45#p-20.45\(c\)\(1\)), a permittee may, upon filing written notice to the appropriate TTB officer and establishing a reporting date, file an annual notice of changes. The notice of changes in stockholders does not apply if the sale or transfer of capital stock results in a change in ownership or control which is required to be reported under [§ 20.57](/current/title-27/section-20.57).
(Approved by the Office of Management and Budget under control number 1513-0061)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.57 Automatic termination of permits.
(a) *Permit not transferable.* Permits issued under this part are not transferable. In the event of the lease, sale, or other transfer of such a permit. or of the operations authorized by the permit, the permit shall, except as provided for in this section, automatically terminate.
(b) *Corporations.*
(1) If actual or legal control of any corporation holding a permit issued under this part changes, directly or indirectly, whether by reason of a change in stock ownership or control (in the permittee corporation or any other corporation), by operation of law, or in any other manner, the permittee shall, within 10 days of the change, give written notice to the appropriate TTB officer. Within 30 days of the change, the permittee shall file an application for a new permit, Form 5150.22 with supporting documents. If an application for a new permit is not filed on Form 5150.22 within 30 days of the change, the outstanding permit will automatically terminate.
(2) If an application for a new permit is filed on Form 5150.22 within the 30-day period prescribed in [paragraph (b)(1)](/current/title-27/section-20.57#p-20.57\(b\)\(1\)) of this section, the outstanding permit may remain in effect until final action is taken on the application. When final action is taken, the outstanding permit will automatically terminate and shall be forwarded to the appropriate TTB officer.
(c) *Proprietorships.* In the event of a change in proprietorship of a business of a permittee (as for instance, by reasons of incorporation, the withdrawal or taking in of additional partners, or succession by any person who is not a fiduciary), the successor shall file written notice and make application on Form 5150.22 for a new permit, under the same conditions provided for in [paragraph (b)](/current/title-27/section-20.57#p-20.57\(b\)) of this section. The successor may adopt the formulas and statements of process of the predecessor.
(Approved by the Office of Management and Budget under control number 1513-0061)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985; [50 FR 20099](https://www.federalregister.gov/citation/50-FR-20099), May 14, 1985; T.D. TTB-140 [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.58 Adoption of documents by a fiduciary.
If the business covered by a permit issued under this part, is to be operated by a fiduciary, the fiduciary may, in lieu of qualifying as a new proprietor, file a written notice, and any necessary supporting documents, to amend the predecessor's permit. The fiduciary may adopt the formulas and statements of process of the predecessor. The effective date of the qualifying documents filed by a fiduciary shall coincide with the effective date of the court order or the date specified therein for the fiduciary to assume control. If the fiduciary was not appointed by the court, the date the fiduciary assumed control shall coincide with the effective date of the filing of the qualifying documents.
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended at T.D. ATF-476, [67 FR 17939](https://www.federalregister.gov/citation/67-FR-17939), Apr. 12, 2002]
#### § 20.59 Continuing partnerships.
(a) *General.* If, under the laws of a particular State, a partnership is not terminated on death or insolvency of a partner, but continues until final settlement of the partnership affairs is completed, and the surviving partner has the exclusive right to the control and possession of the partnership assets for the purpose of liquidation and settlement, the surviving partner may continue to withdraw and use specially denatured spirits under the prior qualifications of the partnership.
(b) *Requalification.* If a surviving partner acquires the business on completion of the settlement of the partnership, that partner shall qualify as a new proprietor, from the date of acquisition, under the same conditions and limitations prescribed in [§ 20.57(c)](/current/title-27/section-20.57#p-20.57\(c\)).
(c) *More than one partner.* The rule set forth in this section also applies if there is more than one surviving partner.
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985; [50 FR 20099](https://www.federalregister.gov/citation/50-FR-20099), May 14, 1985; T.D. ATF-476, [67 FR 17939](https://www.federalregister.gov/citation/67-FR-17939), Apr. 12, 2002; T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.60 Change in name of permittee.
When the only change is a change in the individual, firm, or corporation name, a permittee may not conduct operations under the new name until a written notice, accompanied by necessary supporting documents, to amend the application and permit has been filed and an amended permit issued by the appropriate TTB officer.
(Approved by the Office of Management and Budget under control number 1513-0061)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985; [50 FR 20099](https://www.federalregister.gov/citation/50-FR-20099), May 14, 1985; T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.61 Change in trade name.
If there is to be a change in, or addition of, a trade name, the permittee may not conduct operations under the new trade name until a written notice has been filed and an amended permit has been issued by the appropriate TTB officer.
(Approved by the Office of Management and Budget under control number 1513-0061)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended at T.D. ATF-476, [67 FR 17939](https://www.federalregister.gov/citation/67-FR-17939), Apr. 12, 2002; T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.62 Change in location.
When there is to be a change in location, a permittee may not conduct operations at the new location until a written notice, accompanied by necessary supporting information to amend the application and permit has been filed and an amended permit issued by the appropriate TTB officer.
(Approved by the Office of Management and Budget under control number 1513-0061)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 8, 1985, as amended by T.D. ATF-435, [66 FR 5474](https://www.federalregister.gov/citation/66-FR-5474), Jan. 19, 2001; T.D. ATF-476, [67 FR 17939](https://www.federalregister.gov/citation/67-FR-17939), Apr. 12, 2002; T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.63 Adoption of formulas and statements of process.
(a) Adoption of formulas and statements of process is permitted:
(1) When a successor (proprietorship or fiduciary) adopts a predecessor's formulas and statements of process as provided in [§§ 20.57(c)](/current/title-27/section-20.57#p-20.57\(c\)) and [20.58](/current/title-27/section-20.58); and
(2) When a permittee adopts for use at one plant, the formulas previously approved by TTB for use at another plant, or when a permittee adopts a formula previously approved by TTB for a parent or subsidiary, provided that in the case of a parent-subsidiary relationship the subsidiary is wholly-owned by the parent.
(b) The adoption will be accomplished by the submission of a certificate of adoption. The certificate of adoption shall be submitted to the appropriate TTB officer and shall contain:
(1) A list of all approved formulas or statements of process in which S.D.S. is used or recovered;
(2) The formulas of S.D.S. used or recovered;
(3) The dates of approval of the relevant Forms 1479-A or TTB Forms 5150.19:
(4) The applicable code number(s) for the article or process;
(5) The name of the permittee adopting the formulas, followed by the phrase, for each formula, “Formula of \_\_\_\_\_\_ (Name and permit number of permittee who received formula approval) is hereby adopted;” and
(6) In the case of a permittee adopting the formulas of another entity, evidence of its relationship to that entity.
(Approved by the Office of Management and Budget under control number 1513-0061)
\[T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.64 Return of permits.
Following the issuance of a new or amended permit, the permittee shall (a) obtain and destroy all photocopies of the previous permit from its suppliers, and (b) return the original of the previous permit to the appropriate TTB officer.
### Registry of Stills
#### § 20.66 Registry of stills.
The provisions of [subpart C of part 29 of this chapter](/current/title-27/part-29/subpart-C) are applicable to stills or distilling apparatus located on the premises of a permittee used for distilling. As provided under [§ 29.55](/current/title-27/section-29.55), the listing of a still in the permit application (Form 5150.22), and approval of the application, constitutes registration of the still.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1355, as amended ([26 U.S.C. 5179](https://www.govinfo.gov/link/uscode/26/5179)))
\[T.D. ATF-207, [50 FR 23682](https://www.federalregister.gov/citation/50-FR-23682), June 5, 1985]
### Permanent Discontinuance of Business
#### § 20.68 Notice of permanent discontinuance.
(a) *Notice.* When a permittee permanently discontinues business, a written notice shall be filed with the appropriate TTB officer to cover the discontinuance. The notice will be accompanied by the permit, and contain—
(1) A request to cancel the permit,
(2) A statement of the disposition made of all specially denatured spirits, as required in [§ 20.234](/current/title-27/section-20.234), and
(3) The date of discontinuance.
(b) *Final Reports.* The written notice required by this paragraph will also be accompanied by a report on Form 5150.18 covering the discontinuance and marked “Final Report.”
(Approved by the Office of Management and Budget under control number 1513-0061)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended at T.D. ATF-476, [67 FR 17939](https://www.federalregister.gov/citation/67-FR-17939), Apr. 12, 2002; T.D. TTB-140 [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
## Subpart E \[Reserved]
## Subpart F—Formulas and Statements of Process
#### § 20.91 Formula.
(a) Each article made with specially denatured spirits shall be made in accordance with
(1) an approved formula, Form 5150.19, or
(2) an approved general-use formula prescribed in this subpart, approved by the appropriate TTB officer as an alternate method, or published as a TTB ruling on the TTB Web site at \*[https://www.ttb.gov](https://www.ttb.gov).\*The manufacturer shall file Form 5150.19, along with the sample(s) required by [§ 20.92](/current/title-27/section-20.92), and obtain an approved formula before manufacturing the article.
(b) An article made in accordance with a formula on Form 1479-A approved under previous regulations in [part 211 of this chapter](/current/title-27/part-211) will be considered to comply with the requirements of this subpart.
(c) Any person who has approved formulas or statements of process, Form 1479-A or Form 5150.19, which have been discontinued or have become obsolete, may submit these formulas or statements of process to the appropriate TTB officer for cancellation.
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.92 Samples.
(a) For each formula submitted in accordance with [§ 20.91](/current/title-27/section-20.91) covering a toilet preparation made with S.D.A. Formula No. 39-C and containing an essential oil, the manufacturer shall submit a 0.5-ounce sample of the essential oil used in the article. The appropriate TTB officer may also require the manufacturer to submit a sample of any ingredient which is not adequately described in the formula.
(b) For each formula submitted in accordance with [§ 20.91](/current/title-27/section-20.91), the appropriate TTB officer may require the manufacturer to submit a 4-ounce sample of the finished article.
(c) The appropriate TTB officer may, at any time, require submission of samples of:
(1) Any ingredient used in the manufacture of an article, or;
(2) Any article.
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. ATF-435, [66 FR 5474](https://www.federalregister.gov/citation/66-FR-5474), Jan. 19, 2001]
#### § 20.93 Changes to formulas.
(a) *General.* Except as provided in [paragraph (b)](/current/title-27/section-20.93#p-20.93\(b\)) of this section, any change of ingredients or quantities of ingredients listed in an approved formula shall constitute a different article for which a different approved formula is required by [§ 20.91](/current/title-27/section-20.91).
(b) *Exceptions.* A different approved formula is not required for the following—
(1) A change from an ingredient identified in the formula by a brand name to the same quantity of a chemically identical ingredient acquired under a different brand name, or
(2) A change of an ingredient which is a coloring material.
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.94 Statement of process.
(a) Manufacturers shall submit a statement of process on Form 5150.19, in accordance with [paragraph (b)](/current/title-27/section-20.94#p-20.94\(b\)) of this section, covering the following activities:
(1) If specially denatured spirits are used for laboratory or mechanical purposes, other than use of S.D.A. Formula No. 3-A, 3-C, or 30 for laboratory or mechanical purposes not in the development of a product;
(2) If specially denatured spirits are used in a manufacturing process in which none of the specially denatured spirits remains in the finished product;
(3) If specially denatured spirits, completely denatured alcohol, or articles are used in a manufacturing process and are to be recovered; or
(4) If recovered denatured spirits are to be redenatured.
(b) The manufacturer shall submit a separate Form 5150.19 for each activity described in [paragraph (a)](/current/title-27/section-20.94#p-20.94\(a\)) of this section describing the process completely.
(1) If specially denatured spirits are used for laboratory or mechanical purposes, other than use of S.D.A. Formula No. 3-A, 3-C, or 30 for laboratory or mechanical purposes not in the development of a product, the Form 5150.19 shall identify the formula number of specially denatured spirits, a description of the laboratory or mechanical use, and the approximate annual quantity to be used.
(2) If the Form 5150.19 is submitted covering activities described in [paragraphs (a)(2)](/current/title-27/section-20.94#p-20.94\(a\)\(2\)), [(a)(3)](/current/title-27/section-20.94#p-20.94\(a\)\(3\)), or [(a)(4)](/current/title-27/section-20.94#p-20.94\(a\)\(4\)) of this section, the Form 5150.19 shall also contain the following information:
(i) Flow diagrams shall be submitted with the Form 5150.19 clearly depicting the equipment in its relative operating sequence, with essential connecting pipelines and valves. All major equipment shall be identified as to its use. The direction of flow through the pipelines shall be indicated in the flow diagram. The flow diagram, shall be accompanied by a written description of the flow of materials through the system.
(ii) The statement of process shall describe the chemical composition of the recovered spirits. The statement of process shall be accompanied by a statement of the intended use of the recovered spirits.
#### § 20.95 Developmental samples of articles.
(a) *Samples for submission to TTB.* Prior to receiving formula approval on TTB Form 5150.19, a user may use S.D.S. in the manufacture of samples of articles for submission in accordance with [§ 20.92](/current/title-27/section-20.92). However, the user may only use the limited quantity of S.D.S. that is necessary to produce the samples.
(b) *Samples for shipment to prospective customers.* Prior to submitting a formula and statement of process on TTB Form 5150.19, a user may use S.D.S. to prepare developmental samples of articles for shipment to prospective customers. Only one sample of each formulation of the article under development may be sent to each customer. Each sample shall be no larger than necessary for the customer to determine whether the product meets its requirements. The user shall maintain records showing:
(1) The types of product samples prepared;
(2) The size of the samples sent, on a one-time basis, to each prospective customer; and
(3) The names and addresses of the prospective customers.
(c) *Formula requirement.* Before the user begins to make a quantity greater than specified in this section, formula approval on TTB Form 5150.19 is required.
(Approved by the Office of Management and Budget under control number 1513-0062)
\[T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30,2016]
### Approval Policies
#### § 20.100 General.
(a) In addition to the limitations in this part, and if necessary to protect the revenue or public safety, the appropriate TTB officer, when approving Form 5150.19 may:
(1) Specify on the Form 5150.19 the size of containers in which any article may be sold;
(2) Specify the maximum quantity that may be sold to any person at one time; or
(3) Restrict the sale of an article to a specific class of vendee and for a specific use.
(b) Approval by the appropriate TTB officer of formulas, samples, or statements of process means only that they meet the standards of the Alcohol and Tobacco Tax and Trade Bureau. The approval does not require the issuance of a permit under [subpart D of this part](/current/title-27/part-20/subpart-D) to withdraw and use specially denatured spirits in those formulas, articles, or statements of process.
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. ATF-435, [66 FR 5474](https://www.federalregister.gov/citation/66-FR-5474), Jan. 19, 2001; T.D. TTB-140 [81 FR 59457](https://www.federalregister.gov/citation/81-FR-59457), Aug. 30, 2016]
#### § 20.101 Drafting formulas.
(a) In preparing Form 5150.19, the manufacturer shall, for each ingredient containing ethyl alcohol, identify—
(1) The percent alcohol by volume of the ingredient, if known, and
(2) The supplier's name and serial number or approval date of the supplier's approved formula covering the manufacture of the ingredient.
(b) In preparing Form 5150.19, manufacturers may—
(1) Identify ingredients by generic names rather than brand names, and
(2) Identify quantities of ingredients used in ranges rather than in finite quantities.
(c) If ranges of ingredients are used, as authorized by [paragraph (b)(2)](/current/title-27/section-20.101#p-20.101\(b\)\(2\)) of this section—
(1) The lower range shall not be zero for any ingredient, and
(2) The range for usage of specially denatured spirits shall not exceed ±5%.
#### § 20.102 Bay rum, alcoholado, or alcoholado-type toilet waters.
Unless manufactured exclusively for export under a formula approved by TTB and endorsed “For Export Only,” bay rum, alcoholado, or alcoholado-type toilet waters made with S.D.S. shall contain in each gallon of finished product:
(a) 71 milligrams of denatonium benzoate (also known as benzyldiethyl (2:6-xylylcarbamoyl methyl) ammonium benzoate) in addition to any of this material used as a denaturant in the specially denatured alcohol;
(b) 2 grams of tartar emetic; or
(c) 0.5 avoirdupois ounce of sucrose octaacetate.
\[T.D. TTB-140, [81 FR 59457](https://www.federalregister.gov/citation/81-FR-59457), Aug. 30, 2016]
#### § 20.103 \[Reserved]
#### § 20.104 Residual alcohol in spirit vinegar.
Commercial strength (40 grain) vinegar made from specially denatured alcohol may contain trace amounts of residual alcohol, not to exceed 0.5 percent of alcohol by volume, in the finished product.
### General-Use Formulas
#### § 20.111 General.
(a) Formula approval obtained on TTB Form 5150.19 is not required for an article made in accordance with any approved general-use formula that is specified in [§§ 20.112](/current/title-27/section-20.112) through [20.124](/current/title-27/section-20.124), that is approved by the appropriate TTB officer as an alternate method, or that is published as a TTB Ruling on the TTB Web site at *[https://www.ttb.gov](https://www.ttb.gov).* However, a statement of process on TTB Form 5150.19 is still required in any of the circumstances described in [§ 20.94](/current/title-27/section-20.94).
(b) Any interested party may petition TTB for approval of a new general-use formula by submitting a letter describing the proposed general-use formula to the appropriate TTB officer.
(c) The manufacturer shall ensure that each finished article made pursuant to a general-use formula is unfit for beverage use and is incapable of being reclaimed or diverted to beverage use or internal human use.
(Approved by the Office of Management and Budget under control number 1513-0061)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59457](https://www.federalregister.gov/citation/81-FR-59457), Aug. 30, 2016]
#### § 20.112 Special industrial solvents general-use formula.
(a) A special industrial solvent is any article made with any other ingredients combined with the ingredients in the minimum ratios prescribed in this section. A special industrial solvent shall be made with S.D.A. Formula No. 1, 3A, or 3C containing, for every 100 parts (by volume) of S.D.A.:
(1) No less than 1 part (by volume) of one or any combination of the following: methyl isobutyl ketone, methyl *n*-butyl ketone, nitropropane (mixed isomers), propylene glycol monomethyl ether, or ethylene glycol monoethyl ether, and
(2) No less than 5 parts (by volume) of one or any combination of the following: ethyl acetate (equivalent to 85% ester content, as defined in [§ 21.107 of this chapter](/current/title-27/section-21.107)), isopropyl alcohol, or methyl alcohol.
(b) Special industrial solvents are intended for use as ingredients or solvents in manufacturing processes and shall not be distributed through retail channels for sale as consumer commodities for personal or household use. When a special industrial solvent is used in the manufacture of an article for sale, sufficient ingredients shall be added to definitely change the composition and character of the special industrial solvent. A special industrial solvent shall not be reprocessed into another solvent intended for sale if the other solvent would contain more than 50% alcohol by volume.
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59457](https://www.federalregister.gov/citation/81-FR-59457), Aug. 30, 2016]
#### § 20.113 Proprietary solvents general-use formula.
A proprietary solvent made pursuant to this formula shall be made with alcohol denatured in accordance with S.D.A. Formula No. 1, 3-A, or 3-C and shall contain, for every 100 parts (by volume) of S.D.A.:
(a) No less than 1 part (by volume) of one or any combination of the following: Gasoline, unleaded gasoline, heptane, or rubber hydrocarbon solvent, and
(b) No less than 3 parts (by volume) of one or any combination of the following: Ethyl acetate (equivalent to 85 percent ester content, as defined in [§ 21.107 of this chapter](/current/title-27/section-21.107)), methyl isobutyl ketone, methyl n-butyl ketone, tert-butyl alcohol, sec-butyl alcohol, nitropropane (mixed isomers), ethylene glycol monoethyl ether, or toluene.
\[T.D. TTB-140, [81 FR 59457](https://www.federalregister.gov/citation/81-FR-59457), Aug. 30, 2016]
#### § 20.114 Tobacco flavor general-use formula.
This tobacco flavor general-use formula authorizes the production of any finished article made with alcohol denatured in accordance with S.D.A. Formula No. 4 or S.D.R. Formula No. 4 which—
(a) Contains flavors sufficient to ensure that the article is unfit for beverage or internal human use,
(b) May contain other ingredients, and
(c) Is packaged, labeled, and sold or used as a tobacco flavor only.
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59457](https://www.federalregister.gov/citation/81-FR-59457), Aug. 30, 2016]
#### § 20.115 Ink general-use formula.
This ink general-use formula authorizes the production of any finished article made with alcohol denatured in accordance with S.D.A. Formula No. 1, 3-A, 3-C, 13-A, 23-A, 30, 32, 35-A, or 40-B, which—
(a) Contains pigments, dyes, or dyestuffs, which, alone or in combination with solvents or other ingredients, are sufficient to ensure that the article is unfit for beverage use,
(b) May contain other ingredients, and
(c) Is packaged, labeled and sold or used as an ink.
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59457](https://www.federalregister.gov/citation/81-FR-59457), Aug. 30, 2016]
#### § 20.116 Low alcohol general-use formula.
This low alcohol general-use formula authorizes the production of any finished article containing not more than 5 percent alcohol by weight or volume. Articles containing no alcohol, or whose manufacture involves the recovery of S.D.S., shall be covered by a statement of process on TTB Form 5150.19 submitted under [§ 20.94](/current/title-27/section-20.94).
\[T.D. TTB-140, [81 FR 59457](https://www.federalregister.gov/citation/81-FR-59457), Aug. 30, 2016]
#### § 20.117 Reagent alcohol general-use formula.
(a) *General.* Reagent alcohol must be made in accordance with [paragraph (b)](/current/title-27/section-20.117#p-20.117\(b\)) of this section and labeled in accordance with [paragraph (c)](/current/title-27/section-20.117#p-20.117\(c\)) of this section. Reagent alcohol is—
(1) Treated as an article if distributed and used in accordance with [paragraph (d)](/current/title-27/section-20.117#p-20.117\(d\)) of this section; or
(2) Treated as S.D.A. if distributed and used in accordance with [paragraph (e)](/current/title-27/section-20.117#p-20.117\(e\)) of this section.
(b) *Formula.* Reagent alcohol shall be made with 95 parts (by volume) of S.D.A. 3-A, and 5 parts (by volume) of isopropyl alcohol. Water may be added at the time of manufacture. Reagent alcohol shall not contain any ingredient other than those specified in this paragraph.
(c) *Labeling.* Each container of reagent alcohol, regardless of size, shall have affixed to it a label containing the following words that are as conspicuous as any other words on the container labels: “Reagent Alcohol: Specially Denatured Alcohol Formula 3-A, 95 parts by vol.; and Isopropyl Alcohol, 5 parts by vol.” If water is added at the time of manufacture, the label shall specify the composition of the product as diluted.
(d) *Distribution and use of reagent alcohol as an article.* Reagent alcohol is treated as an article if distributed exclusively for the purpose of scientific use. Only the following distributions of reagent alcohol are permitted under this paragraph:
(1) *For scientific use.*
(i) *In smaller containers.* The manufacturer or repackager of the reagent alcohol, or an S.D.S. dealer, may distribute reagent alcohol in containers not exceeding four liters to laboratories or other persons who require reagent alcohol for scientific use.
(ii) *In bulk containers.* The manufacturer of the reagent alcohol, or an S.D.S. dealer, may distribute reagent alcohol in containers larger than four liters to a laboratory or other person requiring reagent alcohol for scientific use if that laboratory or person is qualified to receive bulk shipments of reagent alcohol on October 31, 2016 or has received, from the appropriate TTB officer, approval of a letterhead application containing the following information:
(A) The applicant's name, address, and permit number, if any;
(B) An explanation of the applicant's need for bulk quantities of reagent alcohol;
(C) A description of the security measures that will be taken to segregate reagent alcohol from denatured spirits or other alcohol that may be on the same premises; and
(D) A statement that the applicant will allow any appropriate TTB officer to inspect the applicant's premises.
(2) *For repackaging.* The manufacturer of the reagent alcohol, or an S.D.S. dealer, may distribute reagent alcohol in containers larger than 4 liters to the persons specified in this paragraph. Those persons must repackage the reagent alcohol in containers not exceeding 4 liters, label the smaller packages in accordance with [paragraph (c)](/current/title-27/section-20.117#p-20.117\(c\)) of this section, and redistribute them in accordance with [paragraph (d)(1)(i)](/current/title-27/section-20.117#p-20.117\(d\)\(1\)\(i\)) of this section. The persons to whom reagent alcohol may be distributed in bulk for repackaging under this paragraph are:
(i) A proprietor of a bona fide laboratory supply house; and
(ii) Any other person who was qualified to receive bulk shipments of reagent alcohol on October 31, 2016, or who has received, from the appropriate TTB officer, approval of a letterhead application containing all of the information required by paragraph (d)(1)(ii)(A) through (D), in addition to the following:
(A) A statement that the applicant will comply with the labeling, packaging, and distribution requirements of [paragraphs (c)](/current/title-27/section-20.117#p-20.117\(c\)) and [(d)(1)](/current/title-27/section-20.117#p-20.117\(d\)\(1\)) of this section; and
(B) A statement that the applicant will comply with the requirements of [§ 20.133](/current/title-27/section-20.133).
(3) *For redistribution.* The manufacturer of the reagent alcohol, or an S.D.S. dealer, may distribute reagent alcohol in containers of any size to an S.D.S. dealer for redistribution in accordance with this section. An S.D.S. dealer distributing or redistributing reagent alcohol may repackage it in containers of any size permitted under this section that is necessary for the conduct of business.
(e) *Distribution and use of reagent alcohol in manufacturing.* Reagent alcohol is treated as S.D.A. if distributed for the purpose of manufacturing. The following requirements apply to reagent alcohol treated as S.D.A.:
(1) The manufacturer of the reagent alcohol, or an S.D.S. dealer, may distribute reagent alcohol in containers of any size to the persons specified in this paragraph for use in manufacturing.
(2) A person may receive reagent alcohol for use in manufacturing if the person:
(i) Holds a permit as an S.D.A. user;
(ii) Has received formula approval on TTB Form 5150.19 to use reagent alcohol in manufacturing; and
(iii) Treats the reagent alcohol as S.D.A., not an article.
(Approved by the Office of Management and Budget under control number 1513-0061)
\[T.D. TTB-140, [81 FR 59457](https://www.federalregister.gov/citation/81-FR-59457), Aug. 30, 2016]
#### § 20.118 Rubbing alcohol general-use formula.
(a) Rubbing alcohol is an article made with S.D.A. Formula No. 23-H
(1) containing 70% ethyl alcohol by volume
(2) made in accordance with one of the two formulas prescribed in [paragraph (b)](/current/title-27/section-20.118#p-20.118\(b\)) of this section, and
(3) labeled in accordance with [§ 20.134(e) of this part](/current/title-27/part-20/section-20.134#p-20.134\(e\)).
(b) Either of the following two formulas is approved for manufacturing rubbing alcohol:
\| Formula A | |
\| S.D.A. formula no. 23-H | 103.3 fl. oz. |
\| Sucrose octa-acetate | 0.5 av.oz. |
\| Water | q.s. 1 gallon. |
\| (If desired, odorous, medicinal and/or colorative ingredients may be added.) | |
\| Formula B | |
\| S.D.A. formula no. 23-H | 103.3 fl. oz. |
\| Benzyldiethyl (2: 6-xylylcarbamoyl methyl) ammonium benzoate (denatonium benzoate) | 0.88 grains. |
\| Water | q.s. 1 gallon. |
\| (If desired, odorous, medicinal and/or colorative ingredients may be added.) | |
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59458](https://www.federalregister.gov/citation/81-FR-59458), Aug. 30, 2016]
#### § 20.119 Toilet preparations containing not less than 10% essential oils general-use formula.
This general-use formula describes an article containing not less than 10% essential oils by volume made with a formulation of S.D.A. authorized for that article on the following list:
| Article | Product code No. | Formula authorized |
| ----------------------------------------- | ---------------- | ---------------------------------------------------------------------------------- |
| Bath preparations | 142 | 1, 3-A, 3-B, 3-C, 23-A, 30, 36, 38-B, 39-B, 39-C, 40, 40-A, 40-B, 40-C. |
| Colognes | 122 | 38-B, 39, 39-A, 39-B, 39-C, 40, 40-A, 40-B, 40-C. |
| Deodorants (body) | 114 | 23-A, 38-B, 39-B, 39-C, 40, 40-A, 40-B, 40-C. |
| Hair and scalp preparations | 111 | 3-B, 23-A, 23-F, 23-H, 37, 38-B, 39, 39-A, 39-B, 39-C, 39-D, 40, 40-A, 40-B, 40-C. |
| Lotions and creams (body, face, and hand) | 113 | 23-A, 23-H, 31-A, 37, 38-B, 39, 39-B, 39-C, 40, 40-A, 40-B, 40-C. |
| Perfume materials (processing) | 121 | 38-B, 39, 39-B, 39-C, 40, 40-A, 40-B, 40-C. |
| Perfumes and perfume tinctures | 121 | 38-B, 39, 39-B, 39-C, 40, 40-A, 40-B, 40-C. |
| Shampoos | 141 | 1, 3-A, 3-B, 3-C, 23-A, 27-B, 31-A, 36, 38-B, 39-A, 39-B, 40, 40-A, 40-B, 40-C. |
| Soaps, toilet | 142 | 1, 3-A, 3-C, 23-A, 30, 36, 38-B, 39-B, 39-C, 40, 40-A, 40-B, 40-C. |
| Toilet waters | 122 | 38-B, 39, 39-A, 39-B, 39-C, 40, 40-A, 40-B, 40-C. |
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985; [50 FR 20099](https://www.federalregister.gov/citation/50-FR-20099), May 14, 1985; T.D. TTB-140, [81 FR 59458](https://www.federalregister.gov/citation/81-FR-59458), Aug. 30, 2016]
#### § 20.120 Multi-purpose general-use formula.
TTB authorizes this general-use formula for the manufacture of any article that:
(a) Is made with alcohol denatured in accordance with S.D.A. Formula No. 1, 3-A, 13-A, 19, 23-A, 23-H, 30, 32, 35-A, 36, 37, 38-D, 40, 40-A, and/or 40-B, but no other specially denatured spirits formula;
(b) Conforms to one of the Use Codes specified in [part 21 of this chapter](/current/title-27/part-21) authorized for the S.D.A. formulation(s) being used to make the article, other than Use Code 900, as described in [part 21 of this chapter](/current/title-27/part-21); and
(c) Contains sufficient additional ingredients, other than the denaturants prescribed for the applicable S.D.A. formula(s) —
(1) To definitely change the composition and character of the S.D.A. used to make the article, and
(2) To ensure that the finished article is unfit for beverage or other internal human use, and, unless approved under [§ 20.193(b)](/current/title-27/section-20.193#p-20.193\(b\)), is incapable of being reclaimed or diverted to beverage use or internal human use; and
(d) Does not conform to any other general-use formula provided in [subpart F of this part](/current/title-27/part-20/subpart-F).
\[T.D. TTB-140, [81 FR 59458](https://www.federalregister.gov/citation/81-FR-59458), Aug. 30, 2016]
#### § 20.121 Vinegar general-use formula.
The vinegar general-use formula is a formula for making vinegar with alcohol denatured in accordance with S.D.A. Formula No. 18 in a process whereby all of the ethyl alcohol, except residual alcohol within the limit specified in [§ 20.104](/current/title-27/section-20.104), loses its identity by being converted to vinegar.
\[T.D. TTB-140, [81 FR 59458](https://www.federalregister.gov/citation/81-FR-59458), Aug. 30, 2016]
#### § 20.122 S.D.A. 39-C general-use formula.
S.D.A. 39-C general-use formula is a formula for articles made with alcohol denatured in accordance with S.D.A. Formula No. 39-C. Articles made pursuant to this general-use formula shall contain, in each gallon of finished product, not less than 2 fl. oz. of perfume material (essential oils as defined in [§ 21.11](/current/title-27/section-21.11), isolates, aromatic chemicals, etc.). Unless approved with the endorsement “for export only,” all articles made with alcohol denatured in accordance with S.D.A. Formula No. 39-C must be made in accordance with this formula.
\[T.D. TTB-140, [81 FR 59458](https://www.federalregister.gov/citation/81-FR-59458), Aug. 30, 2016]
#### § 20.123 Pressurized container general-use formula.
This general-use formula describes an article, made with alcohol denatured in accordance with S.D.A. Formula No. 40-C, that will be packaged in pressurized containers in which the liquid contents are in intimate contact with the propellant and from which the contents are not easily removable in liquid form.
\[T.D. TTB-140, [81 FR 59458](https://www.federalregister.gov/citation/81-FR-59458), Aug. 30, 2016]
#### § 20.124 Duplicating fluid and ink solvent general-use formula.
(a) Duplicating fluids and ink solvents under this general-use formula shall be made with alcohol denatured in accordance with S.D.A. Formula No. 1, 3-A, 3-C, 13-A, 23-A, 30, 32, 35-A, or 40-B, and
(1) Shall contain, for every 100 parts (by volume) of denatured alcohol:
(i) No less than 1 part (by volume) of *n*-propyl acetate, and no less than 10 parts (by volume) of one or any combination of isopropyl alcohol or methyl alcohol; or
(ii) No less than 5 parts (by volume) of n-propyl acetate; and
(2) May contain additional ingredients.
(b) Duplicating fluids and ink solvents are intended for use in the printing industry, shall not be sold for general solvent use, and shall not be distributed through retail channels for sale as consumer commodities for personal or household use.
\[T.D. TTB-140, [81 FR 59458](https://www.federalregister.gov/citation/81-FR-59458), Aug. 30, 2016]
## Subpart G—Requirements Relating to Articles
#### § 20.131 Scope of subpart.
This subpart prescribes requirements relating to articles which may affect persons who are not required to obtain a permit under this part. These requirements, described in general terms in [§ 20.132](/current/title-27/section-20.132), are imposed by law. Criminal penalties imposed for violating these requirements are described in [§ 20.137](/current/title-27/section-20.137). In this subpart, the term “article” means any substance or preparation in the manufacture of which denatured spirits are used, including the product obtained by further manufacture or by combination with other materials, if the article subjected to further manufacture or combination contained denatured spirits.
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59458](https://www.federalregister.gov/citation/81-FR-59458), Aug. 30, 2016]
#### § 20.132 General requirements.
(a) *Internal medicinal preparations and flavoring extracts* —
(1) *Manufacture.* No person shall use denatured spirits in the manufacture of medicinal preparations or flavoring extracts for internal human use where any of the spirits remain in the finished product.
(2) *Sale.* No person shall sell or offer for sale for internal human use any medicinal preparations or flavoring extracts manufactured from denatured distilled spirits where any of the spirits remain in the finished product.
(3) *Labeling and advertising.* Labeling and advertising of articles shall not imply that the article is intended for or suitable for internal human use.
(b) *Beverage use.* No person shall sell or offer for sale any article containing denatured spirits for beverage purposes. Labeling and advertising of articles shall not imply that the article is intended for or suitable for use as a beverage.
(c) *Trafficking in articles.* The appropriate TTB officer may impose the requirements of [§ 20.133](/current/title-27/section-20.133) on any person who reprocesses, rebottles, or repackages articles, deals in articles, or receives articles in containers exceeding one gallon.
(d) *Analytical tolerance.* In the case of an article manufactured in accordance with a formula that specifies exact amounts of ingredients, including denatured spirits, TTB will apply an analytical tolerance of ±5% and use standard rounding rules in determining whether the article complies with the formula.
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59458](https://www.federalregister.gov/citation/81-FR-59458), Aug. 30, 2016]
#### § 20.133 Registration of persons trafficking in articles.
(a) Upon written notice from the appropriate TTB officer, any person who reprocesses, rebottles, or repackages articles, deals in articles, or receives articles in containers exceeding one gallon may be required to submit any of the following:
(1) Nature of activities to be conducted;
(2) Name and address of supplier;
(3) Size and type of containers in which articles will be received and, if applicable, rebottled or repackaged;
(4) Maximum quantity of each article to be obtained during any calendar month;
(5) Description of the reprocessing operation;
(6) Samples of the reprocessed article;
(7) Labels and advertising materials; and,
(8) Names and addresses of recipients of articles and quantities received;
(b) A person who reprocesses articles shall ensure that each article containing 0.5 percent or more alcohol by weight or volume is unfit for beverage or internal human use and is incapable of being reclaimed or diverted to beverage use or internal human use.
(c) The appropriate TTB officer will prohibit any of the activities described in [paragraph (a)](/current/title-27/section-20.133#p-20.133\(a\)) of this section if the activity jeopardizes the revenue or increases the burden of administering this part.
(Approved by the Office of Management and Budget under control number 1513-0061)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59459](https://www.federalregister.gov/citation/81-FR-59459), Aug. 30, 2016]
#### § 20.134 Labeling.
(a) *General.* Except as otherwise provided in [paragraph (b)](/current/title-27/section-20.134#p-20.134\(b\)) or [(c)](/current/title-27/section-20.134#p-20.134\(c\)) of this section, the immediate container of each article shall, before removal from the manufacturer's premises, bear the following information either directly on the container or on a label securely attached to it:
(1) The name, trade name or brand name of the article; and
(2) The name and address (city and State) of the manufacturer or distributor of the article.
(b) *Articles for external human use.* Except as provided in [paragraph (c)](/current/title-27/section-20.134#p-20.134\(c\)) of this section, an article intended for external human use shall, before removal from the manufacturer's premises, have a label affixed to its immediate container identifying the name, trade name or brand name of the article. If the volume of the article in the container exceeds 8-fluid ounces, the label shall also show the information required by [paragraph (b) (1)](/current/title-27/section-20.134#p-20.134\(b\)\(1\)) or [(2)](/current/title-27/section-20.134#p-20.134\(b\)\(2\)) of this section.
(1) If the article was packaged or bottled by the person who manufactured it, the label shall identify—
(i) The manufacturer's name and the address (city and State) of the actual place or places where article was manufactured, or
(ii) The name and principal office address (city and State) of the manufacturer, and the permit number or numbers of the place or places of manufacture. However, in lieu of such permit number or numbers, the place or places where the manufacturing operation occurred may be indicated by a coding system. Prior to using a coding system, the manufacturer shall send a notice explaining the coding system to the appropriate TTB officer, or
(iii) The manufacturer's permit number and the name and address (city and State), of the person for whom the article was packaged and bottled.
(2) If the article was packaged or bottled by a person other than the manufacturer of the article, the label shall identify—
(i) The name and address (city and State) of the person by whom or for whom the article was packaged or bottled, and
(ii) The permit number of the manufacturer or distributor.
(3) If a permit number is required to be shown on the label, it may be shown utilizing a State code number, in accordance with [§ 20.135](/current/title-27/section-20.135).
(c) *Shipment of unlabeled articles.* A manufacturer may, subject to the approval of the appropriate TTB officer and compliance with [§ 20.133](/current/title-27/section-20.133), remove an unlabeled article from the manufacturer's premises, if the outer containers of the article are labeled with the name, trade name or brand name of the article and the names and addresses (city and State) of the manufacturer and the consignee.
(d) *Use of the words “denatured alcohol.”* If the words “denatured alcohol” appear on the label of an article, the label shall also have a name, trade name or brand name which appears as conspicuously as the words “denatured alcohol.”
(e) *Use of the words “rubbing alcohol.”* If the words “rubbing alcohol” appear on the label of an article,
(1) the article shall be made in accordance with [§ 20.118 of this part](/current/title-27/part-20/section-20.118), and
(2) the label
(i) shall have the words “rubbing alcohol” in letters of the same color and size,
(ii) shall identify the name and address (city and State) of the manufacturer or bottler,
(iii) shall state the alcohol content as 70% by volume with no reference to the proof strength, and
(iv) shall have the warning “For external use only. If taken internally, will cause serious gastric disturbances.” An alcohol rub made from any other material, such as isopropyl alcohol, shall not be labeled “Rubbing Alcohol” unless the label informs the consumer that the preparation was not made with specially denatured alcohol.
(f) *Distributor labeling.* Distributors of an article may place minimal identifying information (name, address and a phrase such as “distributed by”) on the label of that article (or on an additional label) without qualifying in any manner under this part; provided:
(1) The article is produced, packaged and labeled as provided in this part; and
(2) The distributor does not produce, repackage or reprocess the article.
(Approved by the Office of Management and Budget under control number 1513-0061)
\[T..D ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by ATF-332, [57 FR 40849](https://www.federalregister.gov/citation/57-FR-40849), Sept. 8, 1992; T.D. TTB-140, [81 FR 59459](https://www.federalregister.gov/citation/81-FR-59459), Aug. 30, 2016]
#### § 20.135 State code numbers.
In showing the permit number on labels as provided in [§ 20.134(b)(2)(ii)](/current/title-27/section-20.134#p-20.134\(b\)\(2\)\(ii\)), the permittee who distributes the article may substitute the appropriate number shown below for the State abbreviation. For example, permit number SDA-CONN-1234 may be shown on the labels as SDA-07-1234. The code numbers for the respective State are as follows:
* 01—Alabama
* 02—Alaska
* 03—Arizona
* 04—Arkansas
* 05—California
* 06—Colorado
* 07—Connecticut
* 08—Delaware
* 09—DC
* 10—Florida
* 11—Georgia
* 12—Hawaii
* 13—Idaho
* 14—Illinois
* 15—Indiana
* 16—Iowa
* 17—Kansas
* 18—Kentucky
* 19—Louisiana
* 20—Maine
* 21—Maryland
* 22—Massachusetts
* 23—Michigan
* 24—Minnesota
* 25—Mississippi
* 26—Missouri
* 27—Montana
* 28—Nebraska
* 29—Nevada
* 30—New Hampshire
* 31—New Jersey
* 32—New Mexico
* 33—New York
* 34—North Carolina
* 35—North Dakota
* 36—Ohio
* 37—Oklahoma
* 38—Oregon
* 39—Pennsylvania
* 40—Rhode Island
* 41—South Carolina
* 42—South Dakota
* 43—Tennessee
* 44—Texas
* 45—Utah
* 46—Vermont
* 47—Virginia
* 48—Washington
* 49—West Virginia
* 50—Wisconsin
* 51—Wyoming
#### § 20.136 Labeling regulations of other agencies.
Other Federal agencies have promulgated regulations that may affect the labeling of denatured spirits or articles. Manufacturers are responsible for properly labeling denatured spirits and articles in compliance with all applicable regulations of those other Federal agencies, which may include:
(a) The Consumer Product Safety Commission, which has promulgated regulations to administer the Federal Hazardous Substances Act, which include regulations in [16 CFR chapter II](/current/title-16/chapter-II) that require warning labels for products containing certain specified substances like methyl alcohol, which is a denaturant in formulations of S.D.A. Formula Nos. 3-A and 30, and is a hazardous substance at levels of 4 percent or more by weight;
(b) The Federal Trade Commission, which has promulgated regulations in [16 CFR chapter I](/current/title-16/chapter-I) to administer the Fair Packaging and Labeling Act, which affect the packaging and labeling of “consumer commodities” (which generally means products intended for retail sale to an individual for personal or household use);
(c) The Food and Drug Administration, which has promulgated regulations in [21 CFR chapter I](/current/title-21/chapter-I) to administer the Fair Packaging and Labeling Act (as it applies to drugs, medical devices, or cosmetics) and the Federal Food, Drug and Cosmetic Act; and
(d) The Occupational Safety and Health Administration, which administers the Occupational Safety and Health Act of 1970 and has promulgated regulations in [29 CFR chapter XVII](/current/title-29/chapter-XVII) concerning the communication of hazards.
\[T.D. TTB-140, [81 FR 59459](https://www.federalregister.gov/citation/81-FR-59459), Aug. 30, 2016]
#### § 20.137 Penalties.
Violation of the requirements prescribed in [§ 20.132](/current/title-27/section-20.132) is punishable by a fine of not more than \$10,000 and/or imprisonment for not more than 5 years for each offense. In addition, persons who manufacture (including reprocess), sell, or transport articles in violation of this part are liable for payment of a tax on the articles at the rate imposed by law on distilled spirits.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended, 1402 ([26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5607](https://www.govinfo.gov/link/uscode/26/5607)))
## Subpart H—Sale and Use of Completely Denatured Alcohol
#### § 20.141 General.
(a) Each formulation of completely denatured alcohol may be sold and used for any purpose, subject to the limitations in the formula prescribed in [part 21 of this chapter](/current/title-27/part-21). For example, formulations of C.D.A. Formula No. 18 or 19 may be used:
(1) In the manufacture of definite chemical substances where the alcohol is changed into some other chemical substance and does not appear in the finished product;
(2) In the arts and industries, including but not limited to the manufacture of cleaning fluids, detergents, proprietary antifreeze solutions, thinners, lacquers, and brake fluids; and
(3) For fuel, light, and power.
(b) Completely denatured alcohol may not be used in the manufacture of preparations or products for internal human use or consumption where any of the alcohol or the denaturants used in that alcohol remain in the finished product.
(c) Persons distributing and using (but not recovering for reuse) completely denatured alcohol are not required to obtain a permit or file a bond under this part.
(d) Any person recovering completely denatured alcohol for reuse shall obtain a permit under [subpart D of this part](/current/title-27/part-20/subpart-D) if the recovered alcohol does not contain all of the original denaturants of the completely denatured alcohol.
(e) Containers of products manufactured with completely denatured alcohol (such as proprietary antifreeze solutions, solvents, thinners, and lacquers) may not be branded as completely denatured alcohol. These products may not be advertised, shipped, sold, or offered for sale as completely denatured alcohol.
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59459](https://www.federalregister.gov/citation/81-FR-59459), Aug. 30, 2016]
#### § 20.142 Records of bulk conveyances.
If completely denatured alcohol is to be shipped in a bulk conveyance, the shipment shall be accompanied by a record which identifies each car, truck, or compartment, the name and location (city or town and State) of both the consignor and consignee, the quantity in gallons, and the formula number of the completely denatured alcohol.
(Approved by the Office of Management and Budget under control number 1513-0062)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.143 Receipt.
Unless completely denatured alcohol received in bulk conveyances or by pipeline is to be used immediately, it shall be deposited in storage tanks, stored in the tank cars or tank trucks in which received, or drawn into packages which shall be marked or labeled as required by this subpart.
#### § 20.144 Packages of completely denatured alcohol.
Packages containing more than 5 gallons of completely denatured alcohol shall be of metal or other equally suitable material approved by the appropriate TTB officer. The openings of these packages shall be sealed with appropriate seals furnished by the person filling the packages.
#### § 20.145 Encased containers.
Completely denatured alcohol may be packaged by distributors in unlabeled containers which are completely encased in wood, fiberboard, or similar material so that the surface (including the opening) of the actual container is not exposed. When completely denatured spirits are packaged in unlabeled containers, the distributor shall apply the required marks or label to an exposed surface of the case. The case shall be so constructed that the portion containing the marks will be securely attached to the encased container until all of the contents have been removed. A statement reading “Do Not Remove Inner Container Until Emptied,” or words of similar meaning, shall be placed on the portion of the case bearing the marks.
#### § 20.146 Labels on bulk containers.
(a) Completely denatured alcohol in bulk containers with a capacity exceeding 1 gallon shall be labeled on the head or side of the container or on the side of the casing, with the following:
(1) The name and address of the person filling the containers;
(2) The contents in gallons:
(3) The words “Completely Denatured Alcohol”; and
(4) The formula number.
(b) Packages of 5 gallons or less shall bear labels required by [§ 20.147](/current/title-27/section-20.147), in lieu of the labels required by this section.
(c) The letters and figures used for marking packages shall be large enough to be easily read and, when printed, labeled, or stenciled, shall be in permanent ink and shall contrast distinctly with the background to which applied.
(d) Packages may also be marked with the brand name and a statement to the type of merchandise contained in the package if these markings do not obscure or detract from the required markings. The person filling the packages shall maintain the record required by [§ 20.261](/current/title-27/section-20.261).
#### § 20.147 Labels on consumer-size containers.
(a) Each consumer-size container with a capacity of 5 gallons or less of completely denatured alcohol sold or offered for sale by a distributor shall bear a label showing, in plain, legible letters, the following:
(1) The words “Completely Denatured Alcohol”;
(2) The statement “Caution—contains poisonous ingredients”; and
(3) The name and address of the distributor filling the packages, unless shown elsewhere on the package.
(b) No other information (except that required by State or Federal law) may be shown on the label without the appropriate TTB officer's approval. The word “pure”, qualifying denatured alcohol may not appear on the label or the container.
(c) The requirements of [paragraphs (a)](/current/title-27/section-20.147#p-20.147\(a\)) and [(b)](/current/title-27/section-20.147#p-20.147\(b\)) of this section apply to any person who sells completely denatured alcohol at wholesale or retail.
#### § 20.148 Manufacture of articles with completely denatured alcohol.
Articles may be made with completely denatured alcohol for sale under brand names. If ingredients are added in sufficient quantities to materially change the composition and character of the completely denatured alcohol, the article is not classified as completely denatured alcohol and may not be marked, branded, or sold as completely denatured alcohol.
#### § 20.149 Records.
Records of transactions in completely denatured alcohol and articles made with completely denatured alcohol shall be maintained as prescribed in [§ 20.261](/current/title-27/section-20.261).
(Approved by the Office of Management and Budget under control number 1513-0062)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
## Subpart I—Operations by Dealers and Users of Specially Denatured Spirits
### Obtaining Specially Denatured Spirits
#### § 20.161 Withdrawals under permit.
(a) *General.* The permit, Form 5150.9, issued under [subpart D of this part](/current/title-27/part-20/subpart-D), authorizes a person to withdraw specially denatured spirits from the bonded premises of a distilled spirits plant or a dealer.
(b) *Photocopying of permit, Form 5150.9.*
(1) As provided in [§ 20.54](/current/title-27/section-20.54), a permittee may make photocopies of its permit, or amended permit, for the exclusive purpose of furnishing proof of authorization to withdraw specially denatured spirits.
(2) A permittee need only furnish the photocopy of its permit, or amended permit, to a distilled spirits plant or dealer for the “initial order” from that distilled spirits plant or dealer.
(3) When a permittee makes photocopies of its permit, Form 5150.9, each copy must be signed, dated, and contain the word “COPY” across the face.
(4) A permittee is responsible for obtaining and, as applicable, destroying all photocopies of its permit from distilled spirits plants and dealers when:
(i) An amended or corrected permit is issued which supersedes the copy on file,
(ii) the permit is canceled by reason of requalification as a new permittee,
(iii) the permit is revoked or suspended, or
(iv) upon permanent discontinuance of dealing in or using specially denatured spirits.
(c) *Withdrawals.*
(1) When a permittee places an initial order for specially denatured spirits the permittee will forward a signed copy of its permit, for retention by the distilled spirits plant or dealer, along with the purchase request.
(2) When the permittee places a subsequent order for specially denatured spirits, the purchase request, in addition to any other information, will contain the permit identification number along with a statement that the permittee possesses a valid permit to withdraw specially denatured spirits, a copy of which is on file with the supplier.
(3) Shipments will not be made by a proprietor of a distilled spirits plant or dealer until it is in possession of a signed copy of a valid permit, Form 5150.9, unless the appropriate TTB officer authorizes the shipment.
([19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c); Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended, 1395, as amended ([26 U.S.C. 5271](https://www.govinfo.gov/link/uscode/26/5271), [5555](https://www.govinfo.gov/link/uscode/26/5555)))
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985; [50 FR 20099](https://www.federalregister.gov/citation/50-FR-20099), May 14, 1985, as amended by T.D. ATF-274, [53 FR 25156](https://www.federalregister.gov/citation/53-FR-25156), July 5, 1988; T.D. TTB-91, [76 FR 5478](https://www.federalregister.gov/citation/76-FR-5478), Feb. 1, 2011]
#### § 20.162 Regulation of withdrawals.
(a) Each permittee shall regulate its withdrawals of specially denatured spirits to ensure that
(1) the quantity on hand and unaccounted for does not exceed the capacity of the storage facilities, and
(2) the cumulative quantity withdrawn or received in any calendar year does not exceed the quantity authorized by the permit, Form 5150.9. Recovered alcohol will be taken into account in determining the total quantity of alcohol on hand.
(b) For the purpose of this section, specially denatured spirits and recovered alcohol will be considered as unaccounted for if lost under circumstances where a claim for allowance is required by this part and the claim has not been allowed, or if used or disposed of in any manner not provided for in this part.
#### § 20.163 Receipt and storage of specially denatured spirits.
(a) *Receipt of bulk conveyances or by pipeline.* A permittee who receives specially denatured spirits in bulk conveyances or by pipeline shall:
(1) Deposit the specially denatured spirits into storage tanks as provided by [§ 20.165](/current/title-27/section-20.165);
(2) draw the specially denatured spirits into packages marked and labeled as required by [paragraph (b)](/current/title-27/section-20.163#p-20.163\(b\)) of this section;
(3) store the specially denatured spirits in the tank truck or tank car in which received if the conveyance is effectively immobilized within an enclosure secured to prevent unauthorized access; or
(4) use the specially denatured spirits immediately in accordance with an approved formula or statement of process.
(b) *Marks on portable containers.*
(1) A user who receives specially denatured spirits in bulk conveyances or by pipeline and who transfers the spirits to drums shall plainly label them to show
(i) the words “Specially Denatured Alcohol” or “Specially Denatured Rum”, and
(ii) the formula number.
(2) A dealer who fills packages of specially denatured spirits shall label them in accordance with [§ 20.178](/current/title-27/section-20.178).
(c) *Receipt of portable containers.* A permittee who receives specially denatured spirits in portable containers such as drums or barrels shall transfer the specially denatured spirits to storage tanks or deposit the specially denatured spirits in a storeroom as provided in [§ 20.165](/current/title-27/section-20.165), or use the spirits in accordance with an approved formula or statement of process. A user may not transfer the spirits to other portable containers for storage except in the following circumstances:
(1) Contents of damaged packages may be transferred to new packages to prevent loss or waste; or
(2) Contents of portable containers may be transferred to “safety” containers to comply with city or State fire code regulations, or on filing notice with the appropriate TTB officer to comply with the safety practices of the user. The user shall label the new containers with the information marked on the original containers and shall also identify the new containers as “repackaged.”
(d) *Record of receipt.* Records of receipt will consist of the consignor's invoice or bill of lading which identifies the quantities, formula number(s), and serial numbers of containers of specially denatured spirits, and which has been annotated by the consignee with the date of receipt of the shipment.
(e) *Losses.* On receipt of specially denatured spirits, the user shall determine and account for any losses in transit in accordance with [subpart J of this part](/current/title-27/part-20/subpart-J).
(Approved by the Office of Management and Budget under control number1513-0062)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59459](https://www.federalregister.gov/citation/81-FR-59459), Aug. 30, 2016]
### Premises and Equipment
#### § 20.164 Premises.
(a) A permittee shall have premises suitable for the business being conducted and adequate for protecting the revenue.
(b) Storage facilities shall be provided on the premises for specially denatured spirits received or recovered. Except as provided in [paragraph (c)](/current/title-27/section-20.164#p-20.164\(c\)) of this section, storage facilities shall consist of storerooms, compartments, or stationary storage tanks (not necessarily in a room or building).
(c) A permittee receiving and storing specially denatured spirits in tank cars or tank trucks, as provided in [§ 20.163](/current/title-27/section-20.163), need not provide stationary storage tanks.
(d) If specially denatured spirits are received at or removed from a permittee's premises in bulk conveyances, suitable facilities for those operations shall be provided.
(e) The appropriate TTB officer may require the storage facilities or distilling equipment to be secured with Government locks or seals, or both.
#### § 20.165 Storage facilities.
(a) Storerooms shall be constructed and secured to prevent unauthorized access and the entrance doors shall be equipped for locking.
(b) Each stationary tank used for the storage of specially denatured spirits shall be equipped for locking to control access to the denatured spirits. An accurate means of measuring its contents shall be provided for each tank.
(c) Storerooms and storage tanks shall be kept locked when unattended. A storage cabinet or locker kept inside a room which is locked when unattended is considered to be adequately secured.
#### § 20.166 Stills and other equipment.
If recovered denatured spirits or articles are to be restored on the permittee's premises, all equipment to be used in the restoration process shall be located on the permit premises. Distilling apparatus or other equipment, including pipelines, for restoration or for recovery, shall be constructed and secured in such a manner as to prevent unauthorized access to the denatured spirits and so arranged as to be readily inspected by appropriate TTB officers.
#### § 20.167 Recovered and restored denatured spirits tanks.
Suitable storage tanks shall be provided for recovered and restored denatured spirits. Each storage tank for recovered and restored denatured spirits shall be—
(a) Durably marked to show its capacity and use,
(b) Equipped for locking to control access to the contents, and
(c) Provided with an accurate means of measuring its contents.
### Inventory and Records
#### § 20.170 Physical inventory.
Once in each calendar year and when requested by an appropriate TTB officer, each permittee shall perform and record a physical inventory of each formulation of new and recovered specially denatured spirits.
(Approved by the Office of Management and Budget under control number 1513-0062)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), [59459](https://www.federalregister.gov/citation/81-FR-59459), Aug. 30, 2016]
#### § 20.171 Record of shipment.
(a) *Dealer.* When a dealer transfers new or recovered specially denatured spirits to a distilled spirits plant or permittee in the normal course of business or in accordance with [§ 20.216](/current/title-27/section-20.216) or [§ 20.231 of this part](/current/title-27/part-20/section-20.231), the dealer shall prepare a record of shipment in accordance with [paragraph (c)](/current/title-27/section-20.171#p-20.171\(c\)) of this section. Dealers shall consistently use the same record series for the record of shipment. A dealer's record of shipment shall show a serial number or other unique number.
(b) *User.* When a user transfers new or recovered specially denatured spirits to a distilled spirits plant or permittee in accordance with [§ 20.216](/current/title-27/part-20/section-20.216), [20.231](/current/title-27/part-20/section-20.231), or [20.235 of this part](/current/title-27/part-20/section-20.235), the user shall prepare a record of shipment in accordance with [paragraph (c)](/current/title-27/section-20.171#p-20.171\(c\)) of this section.
(c) *Record.* The record of shipment shall consist of an invoice, bill of lading or similar document which shows the following information:
(1) Date of shipment;
(2) Consignor's name and address;
(3) Consignee's name, address, and permit number or distilled spirits plant registry number;
(4) For each formula of specially denatured spirits—
(i) The formula number,
(ii) The number and sizes of containers, and
(iii) The total quantity; and,
(5) If the specially denatured spirits are recovered, the word “recovered” shall appear on the record.
(Approved by the Office of Management and Budget under control number 1513-0062)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.172 Records.
In addition to the records required by this subpart, permittees shall maintain records required in [subpart P of this part](/current/title-27/part-20/subpart-P).
(Approved by the Office of Management and Budget under control number 1513-0062)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
### Operations by Dealers
#### § 20.175 Shipment for account of another dealer.
(a) A dealer may order specially denatured spirits shipped directly from a denaturer or another dealer to a customer (dealer or user).
(b) The dealer who ordered the shipment of specially denatured spirits shall forward a copy of his or her permit, Form 5150.9, and the consignee's permit, Form 5150.9, to the person actually shipping the specially denatured spirits.
(c) The dealer who ordered the shipment shall be liable for the tax while the specially denatured spirits are in transit and the person actually shipping the specially denatured spirits shall not be liable except as provided in [26 U.S.C. 5001(a)(4)](https://www.govinfo.gov/link/uscode/26/5001) and [(5)](https://www.govinfo.gov/link/uscode/26/5001).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended ([26 U.S.C. 5271](https://www.govinfo.gov/link/uscode/26/5271)))
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended at T.D. ATF-476, [67 FR 17939](https://www.federalregister.gov/citation/67-FR-17939), Apr. 12, 2002; [67 FR 20868](https://www.federalregister.gov/citation/67-FR-20868), Apr. 26, 2002; T.D. TTB-140, [81 FR 59459](https://www.federalregister.gov/citation/81-FR-59459), Aug. 30, 2016]
#### § 20.176 Packaging by a dealer.
A dealer may package specially denatured spirits in containers of any size necessary for the conduct of business. After filling packages, the dealer shall accurately determine the contents of each package. After filling drums, the dealer shall seal all the drum openings with the dealer's own seals. Packages of specially denatured spirits shall be marked or labeled in accordance with [§ 20.178](/current/title-27/section-20.178).
#### § 20.177 Encased containers.
(a) A dealer may package specially denatured spirits in unlabeled containers which are completely encased in wood, fiberboard, or similar material. The total surface (including the opening) of the actual container of the spirits must be enclosed.
(b) When specially denatured spirits are packaged in unlabeled containers, the dealer shall apply the required marks to an exposed surface of the case. The case shall be constructed so that the portion bearing the marks will remain securely attached to the encased container until all the spirits have been removed. A statement reading “Do not remove inner container until emptied,” or of similar meaning, shall be placed on the portion of the case bearing the marks.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended ([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206)))
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended at T.D. ATF-476, [67 FR 17939](https://www.federalregister.gov/citation/67-FR-17939), Apr. 12, 2002]
#### § 20.178 Marks and brands on containers of specially denatured spirits.
(a) *Required marks.* Each dealer who fills packages of specially denatured spirits shall mark or label each package with the following information:
(1) Quantity, in gallons, or in liters and gallons;
(2) Package identification number or serial number (see [§ 20.179](/current/title-27/section-20.179));
(3) Name and permit number of the dealer;
(4) The words “Specially Denatured Alcohol” or “Specially Denatured Rum,” or an appropriate abbreviation;
(5) Formula number;
(6) Proof, if the spirits were denatured at other than 190° proof;
(7) Denaturants used, if alcohol was denatured under an approved formula authorizing a choice of denaturants; and
(8) Quantity of denaturants used, if the approved formula authorizes a choice of quantities of denaturants.
(b) *Location of marks.* The dealer shall place the required marks on the head of the package or on the side of the case.
(c) *Other marks.* Other marks authorized by this paragraph may not interfere with or detract from the marks required by this subpart. The dealer may place marks other than the required marks on the Government head or Government side of the package if the other marks—
(1) Are authorized by the appropriate TTB officer, or
(2) Consist of a brand name, or consist of caution notices, or consist of other material required by Federal or State law or regulations.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended ([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206)))
#### § 20.179 Package identification number or serial number.
(a) *Requirement.* A dealer who fills packages with specially denatured spirits shall mark each package with a package identification number, in accordance with [paragraph (b)](/current/title-27/section-20.179#p-20.179\(b\)) of this section, or a serial number, in accordance with [paragraph (c)](/current/title-27/section-20.179#p-20.179\(c\)) of this section.
(b) *Package identification number.* A package identification number shall apply to all of the packages filled at the same time on which all of the marks required by [§ 20.178 (a)(1)](/current/title-27/section-20.178#p-20.178\(a\)\(1\)) and [(a)(3)](/current/title-27/section-20.178#p-20.178\(a\)\(3\)) through [(a)(8)](/current/title-27/section-20.178#p-20.178\(a\)\(8\)) are identical. All of the packages in one lot shall be the same type, have the same rated capacity, and be uniformly filled with the same quantity. A package identification number shall be derived from the date on which the package is filled, and shall consist of the following elements, in the order shown—
(1) The last two digits of the calendar year;
(2) An alphabetical designation from “A” through “L,” representing January through December, in that order;
(3) The digits corresponding to the day of the month; and
(4) A letter suffix when more than one identical lot is filled into packages during the same day. For successive lots after the first lot, a letter suffix shall be added in alphabetical order, with “A” representing the second lot of the day, “B” representing the third lot of the day, etc. (e.g., the first three lots filled into packages on November 19, 1983, would be identified as “83K19,” “83K19A,” and “83K19B”).
(c) *Serial number.* A consecutive serial number shall be marked on each package, beginning with the number “1” and continuing in regular sequence. The dealer shall use a separate but similar number series for packages containing specially denatured rum. When any numbering series reaches “1,000,000”, the dealer may recommence the series by providing an alphabetical prefix or suffix for each number in the new series.
(d) *Continuation of numbering series.* If a change in proprietorship, name, or trade name occurs, the numbering system in use at the time of the change may be continued. If serial numbers are used at the time of a change, the numbering series in use at the time of the change may be continued.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended ([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206)))
#### § 20.180 Record of packages filled.
(a) *Requirement to keep record.* A dealer shall keep a record when filling packages with specially denatured spirits. The dealer shall keep a separate record of packages for each formula of specially denatured alcohol and specially denatured rum.
(b) *Information to be shown.* The dealer shall show the following information on the record of packages filled—
(1) Date packages filled;
(2) Package identification number and number of packages in each identical lot filled, or the serial numbers;
(3) Kinds of packages;
(4) Wine gallons or liters;
(5) Kind of specially denatured spirits and formula number; and
(6) Proof, if the spirits were denatured at other than 190° proof.
(c) *Filing.* The dealer shall retain the record at the premises and shall file it according to the serial numbers or package identification numbers of the packages.
(Approved by the Office of Management and Budget under control number 1513-0062)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.181 Limitations on shipments.
(a) *Shipments made under permit.* A dealer may ship specially denatured spirits to users and other dealers under the consignee's permit, Form 5150.9. The dealer may not ship specially denatured spirits before receiving the consignee's permit, Form 5150.9, unless the shipment has been authorized by the appropriate TTB officer.
(b) *Shipments of samples.* A dealer may ship samples of specially denatured spirits to the persons authorized to receive them, and in the quantities permitted by [subpart O of this part](/current/title-27/part-20/subpart-O).
#### § 20.182 Bulk shipments.
(a) *Use.* Dealers may ship specially denatured spirits in bulk conveyances. The dealer shall seal the bulk conveyances at the time of filling with railroad or other appropriate serially numbered seals dissimilar in marking from cap seals used by the Alcohol and Tobacco Tax and Trade Bureau. Specially denatured alcohol or specially denatured rum from only one consignor may be placed in any one compartment of a bulk conveyance. Not less than the entire contents of any one compartment may be delivered to any one consignee at any one premises.
(b) *Construction of bulk conveyances.* Bulk conveyances shall be constructed to conform to the following requirements:
(1) All openings (including valves) shall be constructed so that they may be sealed to prevent unauthorized access to the contents of the conveyance. Outlets, valves or other openings to or from tank cars may be constructed in such a manner that they may be closed and securely fastened on the inside.
(2) If the conveyance has two or more compartments, the outlets of each shall be so equipped that delivery of any compartment will not afford access to the contents of any other compartment.
(3) Each compartment shall be arranged so that it can be completely drained.
(4) Each tank car or tank truck shall be permanently and legibly marked with its number, capacity in gallons or liters, and the name or symbol of its owner. If the tank car or truck consists of two or more compartments, each compartment shall be identified and the capacity of each shall be marked thereon.
(5) Permanent facilities must be provided on tank trucks to permit ready examination of manholes or other openings.
(6) Calibrated charts, prepared or certified by recognized authorities or engineers, showing the capacity of each compartment in gallons or liters for each inch of depth, must accompany each tank truck, tank ship, or tank barge.
#### § 20.183 Exportation of S.D.S.
(a) *General.* Except as otherwise provided in [paragraph (b)](/current/title-27/section-20.183#p-20.183\(b\)) of this section, a dealer may export S.D.S. that conform to a formula specified in [part 21 of this chapter](/current/title-27/part-21) to any country that allows the importation of such spirits. The exporting dealer shall:
(1) For each export shipment, prepare TTB Form 5100.11 in accordance with its instructions as a notice and submit it to the appropriate TTB officer;
(2) Mark each shipping container and case with the words “For Export”;
(3) Export the S.D.S. directly; and
(4) Retain appropriate documentation, such as invoices and bills of lading, as evidence that the denatured spirits were, in fact, exported.
(b) *Exception.* A dealer may not export under [paragraph (a)](/current/title-27/section-20.183#p-20.183\(a\)) of this section any spirits that conform to Formula No. 3-C, 29, or 38-B.
\[T.D. TTB-140 [81 FR 59459](https://www.federalregister.gov/citation/81-FR-59459), Aug. 30, 2016]
### Operations by Users
#### § 20.189 Use of specially denatured spirits.
(a) Specially denatured spirits shall not be used for any purpose not authorized in this section.
(b) Specially denatured spirits shall be used
(1) in the manufacture of articles in accordance with the formula requirements of [subpart F of this part](/current/title-27/part-20/subpart-F),
(2) for other purposes in accordance with approved statements of process ([§ 20.94](/current/title-27/section-20.94)), or
(3) in the case of S.D.A. Formula No. 3-A, 3-C, or 30, for mechanical or laboratory purposes not involving the development of a product.
(c) Unless otherwise authorized by the appropriate TTB officer, each formulation of S.D.S. may be used only for the purposes authorized for that formulation under [part 21 of this chapter](/current/title-27/part-21).
(d) By the use of essential oils and/or chemicals in the manufacture of each article containing 0.5 percent or more alcohol by weight or volume, the manufacturer shall ensure that:
(1) Each finished article is unfit for beverage use; and
(2) Unless approved “for export only” under [§ 20.193(b)](/current/title-27/section-20.193#p-20.193\(b\)), each finished article is incapable of being reclaimed or diverted to beverage use or internal human use.
(e) Each finished article shall conform to the sample, if any, and formula for that article approved in accordance with [subpart F of this part](/current/title-27/part-20/subpart-F).
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. ATF-435, [66 FR 5475](https://www.federalregister.gov/citation/66-FR-5475), Jan. 19, 2001; T.D. TTB-140, [81 FR 59459](https://www.federalregister.gov/citation/81-FR-59459), Aug. 30, 2016]
#### § 20.190 Diversion of articles for internal human use or beverage use.
An appropriate TTB officer who has reason to believe that the spirits in any article are being reclaimed or diverted to beverage or internal human use may direct the permittee to modify an approved formula to prevent the reclamation or diversion. The appropriate TTB officer may require the permittee to discontinue the use of the formula until it has been modified and again approved.
\[T.D. ATF-435, [66 FR 5475](https://www.federalregister.gov/citation/66-FR-5475), Jan. 19, 2001]
#### § 20.191 Bulk articles.
Users who convey articles in containers exceeding one gallon may provide the recipient with a photocopy of [subpart G of this part](/current/title-27/part-20/subpart-G) to ensure compliance with requirements relating to articles.
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. ATF-249, [52 FR 5961](https://www.federalregister.gov/citation/52-FR-5961), Feb. 27, 1987; T.D. TTB-140, [81 FR 59460](https://www.federalregister.gov/citation/81-FR-59460), Aug. 30, 2016]
#### § 20.192 Manufacturing record.
For each manufacturing process in which specially denatured spirits are used, the user shall record:
(a) Quantity and formula number of new or recovered specially denatured spirits used;
(b) Names and quantities of ingredients used; and
(c) Name, trade name or brand name and alcoholic content of each article or intermediate product manufactured, as applicable.
(Approved by the Office of Management and Budget under control number 1513-0062)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.193 Articles for export.
(a) Articles approved without qualification, including articles made in accordance with one of the general-use formulas in [§§ 20.111](/current/title-27/section-20.111) through [20.124](/current/title-27/section-20.124), may be exported without restriction.
(b) For each article for which the approved formula is endorsed “For Export Only” the manufacturer shall:
(1) Label the immediate container to clearly show that the article is for export (for example, with the words “For export only”, “Not for sale in the United States”, or “Manufactured for sale in \_\_\_\_\_\_”);
(2) Mark the shipping containers and cases with the words “For Export”;
(3) Export the article directly; and
(4) Retain appropriate documentation, such as invoices and bills of lading, as evidence that the article was, in fact, exported.
(c) All articles for export shall comply with the applicable requirements of the countries to which they are sent.
\[T.D. TTB-140, [81 FR 59460](https://www.federalregister.gov/citation/81-FR-59460), Aug. 30, 2016]
## Subpart J—Losses
#### § 20.201 Liability and responsibility of carrier.
(a) A person or carrier transporting specially denatured spirits to a consignee or returning it to the consignor is responsible for the safe delivery and is accountable for any specially denatured spirits not delivered.
(b) A person or carrier transporting specially denatured spirits in violation of any law or regulation pertaining thereto, is subject to all provisions of law relating to alcohol and the payment of tax thereon, and shall be required to pay the tax.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended ([26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001)))
#### § 20.202 Losses in transit.
(a) *Reporting losses.* Upon discovering any loss of specially denatured spirits while in transit, the carrier shall immediately inform the consignee, in writing, of the facts and circumstances relating to the loss. In the case of theft, the carrier shall also immediately notify the consignee's appropriate TTB officer of the facts and circumstances relating to the loss.
(b) *Recording losses.* At the time the shipment or report of loss is received, the consignee shall determine the quantity of specially denatured spirits lost. The consignee shall note the quantity lost on the receiving document and attach all relevant information to the record of receipt, prescribed in [§ 20.163](/current/title-27/section-20.163). For the purpose of maintaining the records prescribed in [subpart P of this part](/current/title-27/part-20/subpart-P), receipts of specially denatured spirits will only include the quantity actually received.
(c) *Claims.* A claim for allowances of losses of specially denatured spirits will, as prescribed in [§ 20.205](/current/title-27/section-20.205), be filed:
(1) If the quantity lost in transit exceeds one percent of the total quantity shipped and is more than 10 gallons, the consignee shall file a claim for allowance of the entire quantity lost; or
(2) If the loss was due to theft or other unlawful removal, the consignee shall file a claim for allowance of the entire quantity lost, regardless of the quantity or percentage involved.
(Reporting approved by the Office of Management and Budget under control number 1513-0061; recordkeeping approved by the Office of Management and Budget under control number 1513-0062)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.203 Losses on premises.
(a) *Recording of losses.* A permittee shall determine and record, in the records prescribed by [subpart P of this part](/current/title-27/part-20/subpart-P), the quantity of specially denatured spirits or recovered alcohol lost on premises:
(1) When an inventory is taken,
(2) At the time a container is emptied, or
(3) Immediately upon the discovery of any loss due to casualty, theft or other unusual causes.
(b) *Claims.* A claim for allowance of specially denatured spirits will be filed as prescribed in [§ 20.205](/current/title-27/section-20.205), in the following circumstances:
(1) If the quantity lost during the annual accounting period ([§ 20.263(c)](/current/title-27/section-20.263#p-20.263\(c\))) exceeds one percent of the quantity to be accounted for during that period, and is more than 50 gallons; or,
(2) If the loss was due to theft or unlawful use or removal, the permittee shall file a claim for allowance of losses regardless of the quantity involved.
(Approved by the Office of Management and Budget under control number 1513-0062)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.204 Incomplete shipments.
(a) Subject to the provisions of this part (and [part 19 of this chapter](/current/title-27/part-19) for shipments made by a distilled spirits plant), when containers of specially denatured spirits have sustained losses in transit other than by theft, and the shipment will not be delivered to the consignee, the carrier may return the shipment to the shipper.
(b) When specially denatured spirits are returned to the shipper in accordance with this section, the carrier shall inform the shipper, in writing, of the facts and circumstances relating to the loss. In the case of theft, the carrier shall also immediately notify the shipper's appropriate TTB officer of the facts and circumstances relating to the loss.
(c) Subject to the limitations for loss prescribed in [§ 20.202](/current/title-27/section-20.202), the shipper (dealer or distilled spirits plant proprietor) shall file a claim for allowance of the entire quantity lost, in the manner provided in that section. The claim shall include the applicable data required by [§ 20.205](/current/title-27/section-20.205).
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59460](https://www.federalregister.gov/citation/81-FR-59460), Aug. 30, 2016]
#### § 20.205 Claims.
Claims for allowance of losses of specially denatured spirits or recovered alcohol will be filed, on Form 2635 (5620.8), within 30 days from the date the loss is ascertained, and will contain the following information:
(a) Name, address, and permit number of claimant;
(b) Identification and location of the container(s) from which the specially denatured spirits or recovered alcohol was lost, and the quantity lost from each container;
(c) Total quantity of specially denatured spirits or recovered alcohol covered by the claim and the aggregate quantity involved;
(d) Date of loss or discovery, the cause or nature of loss, and all relevant facts, including facts establishing whether the loss occurred as a result of negligence, connivance, collusion, or fraud on the part of any person, employee or agent participating in or responsible for the loss;
(e) Name of carrier where a loss in transit is involved. The carrier's statement regarding the loss, prescribed by [§ 20.202](/current/title-27/section-20.202) or [§ 20.204](/current/title-27/section-20.204), will accompany the claim; and,
(f) Any additional evidence which the appropriate TTB officer may require to be submitted in support of the claim.
## Subpart K—Recovery of Denatured Alcohol, Specially Denatured Rum, or Articles
#### § 20.211 General.
(a) Upon filing the appropriate qualifying documents under the applicable provisions of [subparts D](/current/title-27/part-20/subpart-D) and [F of this part](/current/title-27/part-20/subpart-F) and receiving approval, a manufacturer using denatured alcohol, specially denatured rum, or articles in an approved process may recover the denatured alcohol, specially denatured rum, or articles. However, a person who recovers
(1) completely denatured alcohol with all its original ingredients,
(2) an article made with specially denatured spirits with all its original ingredients (or practically so, to the extent that the presence of the original denaturants and other ingredients in the recovered article make it as nonpotable as the original article), or
(3) an article made with completely denatured alcohol with all the denaturants of the completely denatured alcohol, shall not be required to obtain a permit under this part.
(b) For a determination as to whether obtaining a permit under this part is necessary, each person who intends to conduct the recovery operations outlined in [paragraph (a)](/current/title-27/section-20.211#p-20.211\(a\)) of this section shall forward Form 5150.19 with a sample of the recovered article, to the appropriate TTB officer, in accordance with [subpart F of this part](/current/title-27/part-20/subpart-F).
(c) Restoration and redenaturation may be done by a permittee or by the proprietor of a distilled spirits plant.
#### § 20.212 Deposit in receiving tanks.
All recovered denatured alcohol, specially denatured rum, or articles shall be accumulated (after recovery or restoration is completed) in a receiving tank equipped for locking. If the recovered product is to be shipped under [§ 20.214](/current/title-27/section-20.214), it may be accumulated in appropriately marked packages. All denatured alcohol or specially denatured rum recovered shall be measured and a record of the measurement shall be made before being redenatured or reused. Recovered denatured alcohol or specially denatured rum and new denatured alcohol or specially denatured rum shall be kept in separate storage containers properly marked for identification.
(Approved by the Office of Management and Budget under control number 1513-0062 )
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.213 Reuse of recovered spirits.
(a) If the denatured alcohol or specially denatured rum is recovered in its original denatured state, or practically so, or contains substantial quantities of the original denaturants and other ingredients which make it unfit for beverage or other internal human medicinal use, it may be reused in any approved process without further redenaturation. In these cases, the appropriate TTB officer will require samples of the recovered product to be taken from time to time to determine if the product requires redenaturation.
(b) If the denatured alcohol or specially denatured rum is not recovered in its original denatured state, or practically so, it shall be redenatured at the premises of the manufacturer or a denaturer before being used. The appropriate TTB officer may require supervision of the redenaturation of the recovered spirits by an appropriate TTB officer.
#### § 20.214 Shipment for restoration or redenaturation.
Recovered denatured alcohol, recovered specially denatured rum, or recovered articles requiring restoration or redenaturation (or both, unless the restoration or redenaturation is to be done on the manufacturer's premises) shall be shipped to a distilled spirits plant or to a permittee. Packages shall be numbered with a package identification number or serial number in accordance with [§ 20.179 (b)](/current/title-27/section-20.179#p-20.179\(b\)) or [(c)](/current/title-27/section-20.179#p-20.179\(c\)). Packages shall be labeled with the name, address, and permit number of the manufacturer, the quantity (in gallons) of spirits contained in the package, and the applicable words “Recovered denatured alcohol formula No. \_\_\_\_” or “Recovered specially denatured rum formula No. \_\_\_\_.” If the restoration or redenaturation is performed by a user or dealer permittee (not a distilled spirits plant), the permittee shall return the same materials to the same manufacturer and shall not intermingle them with materials received from other sources.
#### § 20.215 Shipment of articles and spirits residues for redistillation.
(a) The proprietor of a distilled spirits plant authorized to produce distilled spirits may receive for redistillation
(1) articles manufactured under this part which contain denatured spirits, and
(2) spirits residues of manufacturing processes related to the manufacture of these articles.
(b) Any person shipping these articles or spirits residues to a distilled spirits plant for redistillation shall—
(1) Identify each package or articles or spirits residues as to contents, and
(2) Mark and serially number each package as provided in [§ 20.214](/current/title-27/section-20.214).
#### § 20.216 Record of shipment.
A consignor shipping recovered denatured alcohol, recovered specially denatured rum, or recovered articles to a distilled spirits plant or a permittee shall prepare and forward a record of shipment to the consignee, in accordance with [§ 20.171](/current/title-27/section-20.171).
(Approved by the Office of Management and Budget under control number 1513-0062)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
## Subpart L—Destruction
#### § 20.221 General.
A permittee may terminate liability for payment of tax, prescribed by law, when specially denatured spirits or recovered alcohol are destroyed in accordance with this subpart.
#### § 20.222 Destruction.
(a) *Record of destruction.* A permittee who destroys specially denatured spirits or recovered alcohol, or who transfers such material to another entity for destruction, shall prepare a record of destruction, which shall be maintained by the permittee with the records required by [subpart P of this part](/current/title-27/part-20/subpart-P). The record shall identify—
(1) The reason for destruction,
(2) The date, time, location and manner of destruction,
(3) The quantity involved and, if applicable, identification of containers, and
(4) The name of the individual who accomplished or supervised the destruction.
(b) *Destruction by nonpermittees.* In general, the destruction of specially denatured spirits and recovered alcohol shall be performed by a permittee or a distilled spirits plant. However, a nonpermittee may destroy recovered alcoholic material if the material has been determined by the appropriate TTB officer to be equivalent to an article. If the material is not so determined, destruction may only occur on the premises of the manufacturer who recovered the material, a distilled spirits plant, or a dealer permittee.
(Approved by the Office of Management and Budget under control number 1513-0062)
\[T.D. TTB-140, [81 FR 59460](https://www.federalregister.gov/citation/81-FR-59460), Aug. 30, 2016]
## Subpart M—Return, Reconsignment and Disposition of Specially Denatured Spirits
#### § 20.231 Return.
A permittee may, following the receipt of specially denatured spirits and for any legitimate reason, return the specially denatured spirits to any distilled spirits plant or dealer if the consignee consents to the shipment. The consignor shall prepare a record of shipment in accordance with [§ 20.171](/current/title-27/section-20.171).
(Approved by the Office of Management and Budget under control number 1513-0062)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.232 Reconsignment in transit.
(a) *Reconsignment.* Specially denatured spirits may be reconsigned to another permittee or returned to the consignor if, prior to or on arrival at the premises of the consignee, the alcohol is determined to be unsuitable for the intended purpose, was shipped in error, or, for any bona fide reason, is not accepted by the consignee or carrier.
(b) *Records of reconsignment.* In the case of reconsignment, the consignor shall cancel the initial record of shipment and prepare a new record of shipment, if the shipment is to another permittee. The new record of shipment will be annotated “Reconsignment.”
(Approved by the Office of Management and Budget under control number 1513-0062)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended at T.D. ATF-476, [67 FR 17939](https://www.federalregister.gov/citation/67-FR-17939), Apr. 12, 2002; T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.233 Disposition after revocation of permit.
When any permit issued on Form 5150.9 is revoked, all specially denatured spirits in transit and all specially denatured spirits on the former permit premises, may be lawfully possessed by the former permittee for the exclusive purpose of disposing of the specially denatured spirits, for a period of 60 days following the date of revocation. Any specially denatured spirits or recovered alcohol not disposed of within the specific 60-day period, is subject to seizure and forfeiture.
#### § 20.234 Disposition on permanent discontinuance of use.
(a) *Specially denatured spirits.* Specially denatured spirits on hand at the time of discontinuance of use, may be disposed of by
(1) Returning the specially denatured spirits to a distilled spirits plant or dealer, as provided in [§ 20.231](/current/title-27/section-20.231),
(2) Destruction, as provided in [§ 20.222](/current/title-27/section-20.222), or
(3) Shipped to another user, as provided in [§ 20.235](/current/title-27/section-20.235).
(b) *Recovered denatured alcohol, recovered specially denatured rum, or recovered articles.* Upon permanent discontinuance of use, a permittee may dispose of recovered denatured alcohol, recovered specially denatured rum, or recovered articles by
(1) Shipment to a distilled spirits plant, as provided in [§ 20.215](/current/title-27/section-20.215) for articles and spirits residues,
(2) Destruction, as provided in [§ 20.222](/current/title-27/section-20.222), or
(3) Upon the filing of an application with the appropriate TTB officer, any other approved method.
(Approved by the Office of Management and Budget under control number1513-0061)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.235 Disposition to another user.
(a) A user may dispose of specially denatured spirits to another permittee or Government agency.
(b) The user shall prepare a record of shipment in accordance with [§ 20.171](/current/title-27/section-20.171). The packages to be shipped shall bear the name and permit number of the user and the marks and labels required under [§ 20.178](/current/title-27/section-20.178). The user's copy of the record of shipment shall include an explanation of the reason for the disposition.
(c) The appropriate TTB officer may require a user to apply for and obtain a dealer's permit, if shipments under this section are excessive.
(Approved by the Office of Management and Budget under control number 1513-0062)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by ATF-332, [57 FR 40849](https://www.federalregister.gov/citation/57-FR-40849), Sept. 8, 1992; T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
## Subpart N—Use of Specially Denatured Spirits by the United States or Government Agency
#### § 20.241 General.
The United States or any of its Government agencies may withdraw specially denatured spirits from a distilled spirits plant or dealer under this part, as authorized by [26 U.S.C. 5214(a)(2)](https://www.govinfo.gov/link/uscode/26/5214) and [5271](https://www.govinfo.gov/link/uscode/26/5271). Before any specially denatured spirits may be withdrawn, a permit to procure the spirits shall be obtained as provided in [§ 20.25](/current/title-27/section-20.25).
([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214), [5271](https://www.govinfo.gov/link/uscode/26/5271), [5272](https://www.govinfo.gov/link/uscode/26/5272), [5276](https://www.govinfo.gov/link/uscode/26/5276))
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. ATF-285, [54 FR 12610](https://www.federalregister.gov/citation/54-FR-12610), Mar. 28, 1989; T.D. ATF-435, [66 FR 5475](https://www.federalregister.gov/citation/66-FR-5475), Jan. 19, 2001; T.D. ATF-476, [67 FR 17939](https://www.federalregister.gov/citation/67-FR-17939), Apr. 12, 2002; T.D. TTB-79, [74 FR 37403](https://www.federalregister.gov/citation/74-FR-37403), July 28, 2009]
#### § 20.242 Application and permit, Form 5150.33.
(a) All permits previously issued to the United States or any of its Government agencies on Form 1444 shall remain valid and will be regulated by the same provisions of this subpart as it refers to permits on Form 5150.33.
(b) A Government agency shall apply for a permit to obtain specially denatured spirits on Form 5150.33. Upon approval, Form 5150.33 will be returned to the Government agency, and will serve as authority to procure specially denatured spirits.
(c) A Government agency may specify on its application for a permit to procure specially denatured spirits, Form 5150.33, that it desires a single permit authorizing all sub-agencies under its control to procure specially denatured spirits; or each Government location (agency, department, bureau, etc.) desiring to procure specially denatured spirits may individually submit an application for a permit on Form 5150.33.
(d) An application for a permit shall be signed by the head of the agency or sub-agency or the incumbent of an office which is authorized by the head of the agency or sub-agency, to sign. Evidence of authorization to sign for the head of the agency or sub-agency shall be furnished with the application.
(e) Specially denatured spirits obtained by Government agencies may not be used for non-Government purposes.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1370, as amended ([26 U.S.C. 5271](https://www.govinfo.gov/link/uscode/26/5271)))
#### § 20.243 Procurement of specially denatured spirits.
Government agencies shall retain the original permit, Form 5150.33, on file. When placing an initial order with a vendor, the agency shall forward a photocopy of its permit with the purchase order for specially denatured spirits. In the case of an agency holding a single permit for use of other sub-agencies, the photocopy of the permit will contain an attachment listing all other locations authorized to procure specially denatured spirits. Any subsequent purchases from the same vendor need only contain the permit number on the purchase order.
#### § 20.244 Receipt of shipment.
On receipt of a shipment of specially denatured spirits, a representative of the Government agency shall inspect the shipment for any loss or deficiency. In the case of loss or deficiency, the agency shall annotate the receiving document and forward a copy to the appropriate TTB officer from which the shipment was consigned.
#### § 20.245 Discontinuance of use.
When a Government agency, holding a permit issued under this subpart, no longer intends to procure and use specially denatured spirits, the permit shall be returned to the appropriate TTB officer for cancellation. All photocopies of the permit furnished to vendors shall be returned to the agency for destruction.
#### § 20.246 Disposition of specially denatured spirits on discontinuance of use.
At the time of discontinuance of use of specially denatured spirits, a Government agency may dispose of any excess specially denatured spirits (a) to another Government agency holding a permit, (b) by returning the specially denatured spirits to a vendor, or (c) in any manner authorized by the appropriate TTB officer. Specially denatured spirits may not be disposed of to the general public.
## Subpart O—Samples of Specially Denatured Spirits
#### § 20.251 General.
(a) Applicants and prospective applicants for permits to use specially denatured spirits may obtain samples of specially denatured spirits for experimental purposes or for preparing samples of finished articles as required by [§ 20.92](/current/title-27/section-20.92). Samples of specially denatured spirits may only be obtained from distilled spirits plants or dealers.
(b) Samples not larger than five gallons per calendar year may be obtained without a permit. Dealers shall maintain records to ensure that samples of specially denatured spirits dispensed to nonpermittee do not exceed five gallons per calendar year.
(c) Samples larger than five gallons per calendar year may be obtained without a permit as described in [§ 20.252](/current/title-27/section-20.252).
(d) Samples of specially denatured spirits shall not be used to manufacture articles for commercial sale.
(Approved by the Office of Management and Budget under control number 1513-0062)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985; [50 FR 20099](https://www.federalregister.gov/citation/50-FR-20099), May 14, 1985, as amended by T.D. ATF-435, [66 FR 5475](https://www.federalregister.gov/citation/66-FR-5475), Jan. 19, 2001; T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.252 Samples larger than five gallons.
(a) *General.* The appropriate TTB officer may waive the requirement to obtain a permit under [subpart D of this part](/current/title-27/part-20/subpart-D) if a nonpermittee can demonstrate that more than five gallons is necessary to determine if an Industrial Use Permit is desired.
(b) *Application.* A nonpermittee who wishes to obtain more than five gallons of specially denatured spirits to determine if an Industrial Use Permit is desired, shall file a letterhead application with the appropriate TTB officer in which the nonpermittee's premises are located. The letter shall describe why the requested quantity is necessary.
(c) *Approval.* If the letterhead application is approved, the nonpermittee shall submit it to the proprietor of a distilled spirits plant or a dealer with the order for the sample of specially denatured spirits.
(Approved by the Office of Management and Budget under control number 1513-0061)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.253 Labels for samples.
When a sample of specially denatured spirits is withdrawn from a dealer's premises, that dealer shall attach a label to the sample which shows the following information:
(a) The word “Sample”;
(b) The dealer's name, address, and permit number;
(c) The words “Specially Denatured Alcohol” or “Specially Denatured Rum”;
(d) The quantity; and
(e) The formula number.
## Subpart P—Records and Reports
#### § 20.261 Records of completely denatured alcohol.
When requested by the appropriate TTB officer, any person who receives, packages, stores, disposes of, or uses completely denatured alcohol shall keep records of all transactions in completely denatured alcohol which will enable appropriate TTB officers to verify and trace receipt, packaging, storage, usage, and disposal of the spirits, and to determine whether there has been compliance with law and regulations. However, on sales in quantities of less than 5 gallons, only the total quantity disposed of daily need be recorded.
(Approved by the Office of Management and Budget under control number 1513-0062 )
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.262 Dealer's records of specially denatured spirits.
(a) Each dealer shall maintain separate records of each formulation of new specially denatured spirits—
(1) Received, as required by [§ 20.163](/current/title-27/section-20.163),
(2) Packaged, as required by [§ 20.180](/current/title-27/section-20.180),
(3) Destroyed, as required by [§ 20.222](/current/title-27/section-20.222),
(4) Lost, as required by [§§ 20.202-20.204](/current/title-27/section-20.202), and
(5) Transferred to another permittee or a distilled spirits plant, as required by [§§ 20.171](/current/title-27/section-20.171), [20.216](/current/title-27/section-20.216), and [20.231](/current/title-27/section-20.231).
(b) Each dealer shall maintain separate records of each formulation of recovered specially denatured spirits for each of the transactions listed in [paragraphs (a)(1)](/current/title-27/section-20.262#p-20.262\(a\)\(1\)) through [(a)(5)](/current/title-27/section-20.262#p-20.262\(a\)\(5\)) of this section.
(c) Once in each calendar year, and when requested by an appropriate TTB officer, each dealer shall perform and record a balanced accounting of each formulation of new and recovered specially denatured spirits using the records required by [§ 20.170](/current/title-27/section-20.170) and this section.
(d) When requested, the dealer shall submit the accounting required by [paragraph (c)](/current/title-27/section-20.262#p-20.262\(c\)) of this section to the appropriate TTB officer.
(Approved by the Office of Management and Budget under control number 1513-0062)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), [59460](https://www.federalregister.gov/citation/81-FR-59460), Aug. 30, 2016]
#### § 20.263 User's records of specially denatured spirits.
(a) Each user shall maintain separate records of each formulation of new specially denatured spirits—
(1) Received, as required by [§ 20.163](/current/title-27/section-20.163),
(2) Recovered, as required by [§ 20.212](/current/title-27/section-20.212),
(3) Used, as required by [§ 20.192](/current/title-27/section-20.192),
(4) Destroyed, as required by [§ 20.222](/current/title-27/section-20.222),
(5) Lost, as required by [§§ 20.202-20.203](/current/title-27/section-20.202), and
(6) Transferred to another permittee or a distilled spirits plant, as required by [§§ 20.216](/current/title-27/section-20.216), [20.231](/current/title-27/section-20.231), and [20.235](/current/title-27/section-20.235).
(b) Each user shall maintain separate records of each formulation of recovered specially denatured spirits for each of the transactions listed in [paragraphs (a)(1)](/current/title-27/section-20.263#p-20.263\(a\)\(1\)) through [(a)(6)](/current/title-27/section-20.263#p-20.263\(a\)\(6\)) of this section.
(c) Once in each calendar year, and when requested by an appropriate TTB officer, each user shall perform and record a balanced accounting of each formulation of new and recovered specially denatured spirits using the records required by [§ 20.170](/current/title-27/section-20.170) and this section.
(d) When requested, the user shall submit the accounting required by [paragraph (c)](/current/title-27/section-20.263#p-20.263\(c\)) of this section to the appropriate TTB officer.
(Approved by the Office of Management and Budget under control number 1513-0062)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), [59460](https://www.federalregister.gov/citation/81-FR-59460), Aug. 30, 2016]
#### § 20.264 User's records and report of products and processes.
(a) *Records.*
(1) Each user shall maintain separate accountings of—
(i) The number of gallons of each formulation of new S.D.S. used for each product or process, recorded by the code number prescribed by [§ 21.141 of this chapter](/current/title-27/section-21.141); and
(ii) The number of gallons of each formulation of recovered S.D.S. used for each product or process, recorded by the code number prescribed by [§ 21.141 of this chapter](/current/title-27/section-21.141).
(2) Each user who recovers specially denatured spirits shall maintain separate accountings of the number of gallons of each formulation of specially denatured spirits recovered from each product or process, recorded by the code number prescribed by [§ 21.141 of this chapter](/current/title-27/section-21.141).
(3) Product or process code numbers are shown on approved formula and statement of process forms. For an article made in accordance with a general-use formula, the user will refer to [§ 21.141 of this chapter](/current/title-27/section-21.141) and record the applicable product or process code number.
(4) Each user who manufactures articles for export subject to [§ 20.193(b)](/current/title-27/section-20.193#p-20.193\(b\)) shall retain the documentation required by [§ 20.193(b)(4)](/current/title-27/section-20.193#p-20.193\(b\)\(4\)).
(b) *Report.* Each user shall submit an annual report, Form 5150.18, for the period from July 1 through June 30, summarized from the records required by this section. The report shall be filed no later than July 15 following the end of the accounting period.
(Approved by the Office of Management and Budget under control number 1513-0062)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59460](https://www.federalregister.gov/citation/81-FR-59460), Aug. 30, 2016]
#### § 20.265 Retention of invoices.
(a) Any person required to keep records under this part shall retain copies of invoices which will enable appropriate TTB officers to readily obtain the details regarding:
(1) Purchases of all essential oils, chemicals, and other materials used in manufacturing articles, including the name and address of the vendor, and the quantity;
(2) Purchases of articles containing specially denatured spirits for reprocessing, or purchases of those articles for bottling, repackaging, and/or resale, including the name and address of the vendor and the quantity; and
(3) Dispositions of all articles manufactured or received, including in each case the name and address of the person to whom sold or otherwise disposed of.
(b) The appropriate TTB officer may, on application filed by the permittee, waive the requirements for retaining invoices if the quantity sold to any person during a calendar month does not exceed 25 gallons, and if a waiver will not hinder the effective administration of this part and will not pose a jeopardy to the revenue.
(Approved by the Office of Management and Budget under control number 1513-0061)
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. TTB-140, [81 FR 59456](https://www.federalregister.gov/citation/81-FR-59456), Aug. 30, 2016]
#### § 20.266 Time for making entries in records.
Any person who conducts an operation which is required to be recorded under this part, shall enter that operation in the records on the same day on which the operation occurred. However, the daily posting of records may be deferred to conform to the permittee's normal accounting cycle if (a) supporting or supplemental records are prepared at the time of the operation, and these supporting or supplemental records are to be used to post the daily record, and (b) the deferral of posting does not pose a jeopardy to the revenue.
#### § 20.267 Filing and retaining records.
Any person who is required to maintain records of operations under this part shall file and retain records and copies of reports in the following manner:
(a) Keep on file for a period of not less than 3 years after the date of the report covering the operation, in such a way as to allow inspection by TTB officers, all those records of operations, all supporting or supplemental records, and copies of all reports as required by this part. However, the appropriate TTB officer may require that the records and copies of reports be kept for an additional period, not to exceed 3 years.
(b) File all records and copies of reports at the premises where the operations are conducted.
(c) Make the files of records and copies of reports available to TTB officers during regular business hours for examination.
\[T.D. ATF-199, [50 FR 9162](https://www.federalregister.gov/citation/50-FR-9162), Mar. 6, 1985, as amended by T.D. ATF-435, [66 FR 5475](https://www.federalregister.gov/citation/66-FR-5475), Jan. 19, 2001]
#### § 20.268 Photographic copies of records.
(a) *General.* Permittees may record, copy, or reproduce required records. Any process may be used which accurately reproduces the original record, and which forms a durable medium for reproducing and preserving the original record.
(b) *Copies of records treated as original records.* Whenever records are reproduced under this section, the reproduced records will be preserved in conveniently accessible files, and provisions will be made for examining, viewing, and using the reproduced records the same as if they were the original record, and they will be treated and considered for all purposes as though they were the original record. All provisions of law and regulations applicable to the original are applicable to the reproduced record. As used in this section, “original record” means the record required by this part to be maintained or preserved by the permittee, even though it may be an executed duplicate or other copy of the document.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended ([26 U.S.C. 5555](https://www.govinfo.gov/link/uscode/26/5555)))
# Part 21 — FORMULAS FOR DENATURED ALCOHOL AND RUM
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-21
Full text of 27 CFR Part 21 — FORMULAS FOR DENATURED ALCOHOL AND RUM. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 21—FORMULAS FOR DENATURED ALCOHOL AND RUM
#### Authority:
[5 U.S.C. 552(a)](https://www.govinfo.gov/link/uscode/5/552); [26 U.S.C. 5242](https://www.govinfo.gov/link/uscode/26/5242), [7805](https://www.govinfo.gov/link/uscode/26/7805).
#### Source:
T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, unless otherwise noted.
#### Editorial Notes:
Nomenclature changes to part 21 appear by T.D. ATF-435, [66 FR 5475](https://www.federalregister.gov/citation/66-FR-5475), Jan. 19, 2001.
Nomenclature changes to part 21 appear by 81 T.D. TTB-140, 81 FR Aug. 30, 2016.
## Subpart A—General Provisions
#### § 21.1 Scope of regulations.
The regulations in this part relate to the formulation of completely denatured alcohol, specially denatured alcohol, and specially denatured rum; to the specifications for denaturants; and to the uses of denatured spirits.
#### § 21.2 Forms prescribed.
(a) *General.* The appropriate TTB officer is authorized to prescribe all forms required by this part. All of the information called for in each form shall be furnished as indicated by the headings on the form and the instructions on or pertaining to the form. In addition, information called for in each form shall be furnished as required by this part. The form will be filed in accordance with the instructions for the form.
(b) Forms prescribed by this part are available for printing through the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended by T.D. ATF-249, [52 FR 5961](https://www.federalregister.gov/citation/52-FR-5961), Feb. 27, 1987; T.D. 372, [61 FR 20724](https://www.federalregister.gov/citation/61-FR-20724), May 8, 1996; T.D. ATF-435, [66 FR 5475](https://www.federalregister.gov/citation/66-FR-5475), Jan. 19, 2001; T.D. TTB-44, [71 FR 16934](https://www.federalregister.gov/citation/71-FR-16934), Apr. 4, 2006; T.D. TTB-196, [89 FR 87940](https://www.federalregister.gov/citation/89-FR-87940), Nov. 6, 2024]
#### § 21.3 Stocks of discontinued formulas.
Denaturers, or specially denatured spirits dealers or users, having on hand stocks of denaturants or formulas of specially denatured spirits no longer authorized by this part may—
(a) Continue to supply or use those stocks in accordance with existing permits until the stocks are exhausted;
(b) Use up those stocks in any manufacturing process approved by the appropriate TTB officer, pursuant to an application filed with such officer on TTB Form 5150.19, Formula for Articles made with Specially Denatured Alcohol and Rum;
(c) On approval of an application, filed with the appropriate TTB officer and approved by such officer, destroy those stocks under whatever supervision the appropriate TTB officer requires; or
(d) Otherwise dispose of those stocks in a manner satisfactory to the appropriate TTB officer, pursuant to approval of an application.
\[T.D. ATF-133, [487 FR 24673](https://www.federalregister.gov/citation/487-FR-24673), June 2, 1983, as amended by T.D. ATF-435, [66 FR 5475](https://www.federalregister.gov/citation/66-FR-5475), Jan. 19, 2001; T.D. TTB-196, [89 FR 87940](https://www.federalregister.gov/citation/89-FR-87940), Nov. 6, 2024]
#### § 21.4 Related regulations.
The procedural and substantive requirements relative to the production of denatured alcohol and specially denatured rum are prescribed in [part 19 of this chapter](/current/title-27/part-19), and those relative to the distribution and use of denatured alcohol and specially denatured rum are prescribed in [part 20 of this chapter](/current/title-27/part-20).
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended by T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183) Mar. 6, 1985]
#### § 21.5 Denatured spirits for export.
Spirits may be denatured in accordance with formulas prescribed by the government of a foreign country to which the denatured spirits will be exported. However, the denaturer must first apply for and obtain written permission from the appropriate TTB officer. The application shall be submitted to the appropriate TTB officer and shall contain the following information:
(a) A complete list of ingredients for the spirits to be denatured.
(b) The exact amount of each ingredient to be used in denaturing the spirits.
(c) A copy (accompanied by an English translation as necessary) of the law or regulations of the foreign country to which the denatured spirits will be exported, specifying the denatured spirits formulation prescribed by that country.
#### § 21.6 Incorporations by reference.
(a) “The United States Pharmacopoeia (Twentieth Revision, Official from July, 1980) and the National Formulary (Fifteenth Edition, Official from July 1, 1980)” published together as “The USP and NF Compendia,” are incorporated by reference in this part. This incorporation by reference was approved by the Director of the Federal Register. The publication is available from the United States Pharmacopoeia Convention, Inc., 12601 Twinbrook Parkway, Rockville, Maryland 20852, or may be inspected at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *[https://www.archives.gov/federal-register/cfr/ibr-locations.html](https://www.archives.gov/federal-register/cfr/ibr-locations.html).*
(b) Material from Parts 23, 25, and 29 of the 1980 Annual Book of ASTM Standards is incorporated by reference in this part. This incorporation by reference was approved by the Director of the Federal Register. These publications are available from the American Society for Testing and Materials, 1916 Race Street, Philadelphia, Pennsylvania 19103, or may be inspected at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *[https://www.archives.gov/federal-register/cfr/ibr-locations.html](https://www.archives.gov/federal-register/cfr/ibr-locations.html).*
(c) Material from the “Official Methods of Analysis of the Association of Official Analytical Chemists (13th Edition 1980)” (AOAC) is incorporated by reference in this part. This incorporation by reference was approved by the Director of the Federal Register. This publication is available from the Association of Official Analytical Chemists, 11 North 19th Street, Suite 210, Arlington, Virginia 22209, or may be inspected at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *[https://www.archives.gov/federal-register/cfr/ibr-locations.html](https://www.archives.gov/federal-register/cfr/ibr-locations.html).*
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended at [69 FR 18803](https://www.federalregister.gov/citation/69-FR-18803), Apr. 9, 2004; T.D. TTB-196, [89 FR 87940](https://www.federalregister.gov/citation/89-FR-87940), Nov. 6, 2024]
(Pub. L. 89-554, 80 Stat. 383 as amended ([5 U.S.C. 552(a)](https://www.govinfo.gov/link/uscode/5/552)))
#### § 21.7 Delegations of the Administrator.
The regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in the current version of TTB Order 1135.21, Delegation of the Administrator's Authorities in [27 CFR Part 21](/current/title-27/part-21), Formulas for Denatured Alcohol and Rum. You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-44, [71 FR 16936](https://www.federalregister.gov/citation/71-FR-16936), Apr. 4, 2006; T.D. TTB-140, [81 FR 59460](https://www.federalregister.gov/citation/81-FR-59460), Aug. 30, 2016; T.D. TTB-196, [89 FR 87940](https://www.federalregister.gov/citation/89-FR-87940), Nov. 6, 2024]
## Subpart B—Definitions
#### § 21.11 Meaning of terms.
When used in this part and in forms prescribed under this part, unless the context otherwise requires, terms have the meanings given in this section. Words in the plural form include the singular, and vice versa, and words indicating the masculine gender include the feminine. The terms “includes” and “including” do not exclude things not mentioned which are in the same general class.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Alcohol.* The spirits known as ethyl alcohol, ethanol, or spirits of wine, from whatever source or by whatever process produced. The term does not include such spirits as whisky, brandy, rum, gin, or vodka.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by the current version of TTB Order 1135.21, Delegation of the Administrator's Authorities in [27 CFR Part 21](/current/title-27/part-21), Formulas For Denatured Alcohol and Rum.
*CFR.* The Code of Federal Regulations.
*C.D.A.* Completely denatured alcohol.
*Completely denatured alcohol.* The spirits known as alcohol, as defined in this section, denatured pursuant to completely denatured alcohol formulas prescribed in [subpart C of this part](/current/title-27/part-21/subpart-C).
*Denaturant.* A material authorized by this part to be added to spirits in order to make those spirits unfit for beverage or internal human medicinal use.
*Denatured spirits.* Alcohol or rum to which denaturants have been added as provided in this part.
*Essential oil.* Any of the volatile odoriferous natural oils found in plants, which impart to such plants odor, and often other characteristic properties; also, imitations of such natural oils, as well as aromatic substances, and synthetic oils, which possess the denaturing characteristics of such natural oils.
*Gallon.* The liquid measure equivalent to the volume of 231 cubic inches.
*Manufacturer or user.* A person who holds a permit, issued under [part 20 of this chapter](/current/title-27/part-20), to withdraw and use specially denatured alcohol or specially denatured rum, or to recover completely or specially denatured alcohol, or specially denatured rum, or articles manufactured with denatured spirits, or a distilled spirits plant proprietor qualified under [part 19 of this chapter](/current/title-27/part-19) as a processor.
*N.F.* The National Formulary. The lastest edition is intended unless otherwise specified. The designations “U.S.P.” and “N.F.” are considered interchangeable when preparations are transferred from one publication to the other. (For incorporation by reference, see [§ 21.6(a)](/current/title-27/section-21.6#p-21.6\(a\)).)
*Proof.* The ethyl alcohol content of a liquid at 60 degrees Fahrenheit, stated as twice the percent of ethyl alcohol by volume.
*Rum.* Any spirits produced from sugar cane products and distilled at less than 190 proof in such manner that the spirits possess the taste, aroma, and characteristics generally attributed to rum.
*S.D.A.* Specially denatured alcohol.
*Specially denatured alcohol.* Those spirits known as alcohol, as defined in this section, denatured pursuant to the specially denatured alcohol formulas authorized under [subpart D of this part](/current/title-27/part-21/subpart-D).
*Specially denatured rum.* Those spirits known as rum, as defined in this section, denatured pursuant to the specially denatured rum formula authorized under [subpart D of this part](/current/title-27/part-21/subpart-D).
*Spirits or distilled spirits.* Alcohol or rum as defined in this part.
*U.S.C.* The United States Code.
*U.S.P.* The United States Pharmacopoeia. The latest edition is intended unless otherwise specified. The designations “U.S.P.” and “N.F.” are considered interchangeable when preparations are transferred from one publication to the other. (For incorporation by reference, see [§ 21.6(a)](/current/title-27/section-21.6#p-21.6\(a\)).)
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended by T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985; T.D. ATF-435, [66 FR 5475](https://www.federalregister.gov/citation/66-FR-5475), Jan. 19, 2001; T.D. TTB-44, [71 FR 16936](https://www.federalregister.gov/citation/71-FR-16936), Apr. 4, 2006; T.D.TTB-140 [81 FR 59460](https://www.federalregister.gov/citation/81-FR-59460), Aug. 30, 2016]
## Subpart C—Completely Denatured Alcohol Formulas
#### § 21.21 General.
(a) Alcohol shall be completely denatured only in accordance with formulas prescribed in this subpart (or in accordance with [§ 21.5](/current/title-27/section-21.5)).
(b) Denaturers may be authorized to add a small quantity of an odorant, rust inhibitor, or dye to completely denatured alcohol. Any such addition shall be made only on approval by the appropriate TTB officer. Request for such approval shall be submitted to the appropriate TTB officer.
(c) Odorants or perfume materials may be added to denaturants authorized for completely denatured alcohol in amounts not greater than 1 part to 250, by weight. However, such addition shall not decrease the denaturing value nor change the chemical or physical constants beyond the limits of the specifications for these denaturants as prescribed in subpart E, except as to odor. Proprietors of distilled spirits plants using denaturants to which such odorants or perfume materials have been added shall inform the appropriate TTB officer, in writing, of the names and properties of the odorants or perfume materials so used.
(d) TTB will apply an analytical tolerance of ±5 percent and use standard rounding rules in determining whether completely denatured alcohol complies with the formula prescribed in this subpart (or in accordance with [§ 21.5](/current/title-27/section-21.5)).
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended by T.D. TTB-140, [81 FR 59460](https://www.federalregister.gov/citation/81-FR-59460), Aug. 30, 2016]
#### § 21.22 Formula No. 18.
To every 100 gallons of ethyl alcohol of not less than 160 proof add:
2.50 gallons of either methyl isobutyl ketone, mixed isomers of nitropropane, or methyl *n-* butyl ketone;
0.125 gallon of pyronate or a similar compound;
0.50 gallon acetaldol (beta-hydroxybutyraldehyde); and
1.00 gallon of either kerosene, deodorized kerosene, gasoline, unleaded gasoline, rubber hydrocarbon solvent, or heptane.
#### § 21.23 Formula No. 19.
To every 100 gallons of ethyl alcohol of not less than 160 proof add:
4.0 gallons of either methyl isobutyl ketone, mixed isomers of nitropropane, or methyl *n-* butyl ketone; and
1.0 gallon of either kerosene, deodorized kerosene, gasoline, unleaded gasoline, rubber hydrocarbon solvent, or heptane.
#### § 21.24 Formula No. 20.
(a) *Formula.* To every 100 gallons of ethyl alcohol of not less than 195 proof add:
A total of 2.0 gallons of either unleaded gasoline, rubber hydrocarbon solvent, kerosene, deodorized kerosene, alkylate, ethyl tertiary butyl ether, high octane denaturant blend, methyl tertiary butyl ether, naphtha, natural gasoline, raffinate, or any combination of these; or
A total of 5.0 gallons of toluene.
(b) *Authorized use.* Restricted to fuel use, comparable to specially denatured alcohol “Use Code No.” 611, 612, 613, 620, and 630.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended by T.D. TTB-140, [81 FR 59460](https://www.federalregister.gov/citation/81-FR-59460), Aug. 30, 2016]
#### § 21.25 Formula No. 35.
*Formula.* To every 100 gallons of alcohol of not less than 185 proof add:
29.75 gallons of ethyl acetate having an ester content of 100 percent by weight or the equivalent thereof not to exceed 35 gallons of ethyl acetate with an ester content of not less than 85 percent by weight.
\[T.D. TTB-140, [81 FR 59461](https://www.federalregister.gov/citation/81-FR-59461), Aug. 30, 2016]
#### § 21.26 Formula No. 12-A.
*Formula.* To every 100 gallons of alcohol of not less than 185 proof add:
Five gallons of toluene or 5 gallons of heptane.
\[T.D. TTB-140, [81 FR 59461](https://www.federalregister.gov/citation/81-FR-59461), Aug. 31, 2016]
## Subpart D—Specially Denatured Spirits Formulas and Authorized Uses
#### § 21.31 General.
(a) *Formulas for specially denatured spirits.* Alcohol and rum shall be specially denatured only in accordance with formulas prescribed in this subpart (or in accordance with [§ 21.5](/current/title-27/section-21.5)).
(b) *Proof of spirits for denaturation.* Alcohol of not less than 185 proof shall be used in the manufacture of all formulas of specially denatured alcohol, unless otherwise specifically stated or unless otherwise authorized by the appropriate TTB officer. Rum for denaturation shall be of not less than 150 proof and may be denatured only in accordance with Formula No. 4.
(c) *Use of Denatured Spirits.* Users and manufacturers holding approved Forms 5150.19 (formerly 1479-A) covering use in processes or manufacture of products no longer authorized for a particular formula may continue that use. Pursuant to written application and subject to the provisions of [26 U.S.C. Chapter 51](https://www.govinfo.gov/link/uscode/26/5101), [part 20 of this chapter](/current/title-27/part-20), and this part, the appropriate TTB officer, may authorize the use of any formula of specially denatured alcohol or specially denatured rum for uses not specifically authorized in this part. The code number before each item under “authorized uses” shall be used in reporting the use of specially denatured alcohol or specially denatured rum.
(d) *Analytical tolerance.* TTB will apply an analytical tolerance of ±5% and use standard rounding rules in determining whether specially denatured spirits complies with the formula prescribed in this subpart (or in accordance with [§ 21.5](/current/title-27/section-21.5)).
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended by T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985; T.D. TTB-140, [81 FR 59461](https://www.federalregister.gov/citation/81-FR-59461), Aug. 30, 2016]
#### § 21.32 Formula No. 1.
(a) *Formula.* To every 100 gallons of alcohol add:
Four gallons of methyl alcohol and either
1⁄8 avoirdupois ounce of denatonium benzoate, N.F.; 1 gallon of methyl isobutyl ketone; 1 gallon of mixed isomers of nitropropane; or 1 gallon of methyl *n-* butyl ketone.
(b) *Authorized uses.*
(1) As a solvent:
11. Cellulose coatings.
12. Synthetic resin coatings.
13. Shellac coatings.
14. Other natural resin coatings.
15. Other coatings.
16. Cellulose plastics.
17. Non-cellulose plastics, including resins.
18. Photographic film and emulsions.
19. Transparent sheeting.
20. Explosives.
21. Cellulose intermediates and industrial collodions.
22. Soldering flux.
23. Adhesives and binders.
24. Proprietary solvents.
25. Solvents and thinners (other than proprietary solvents or special industrial solvents).
26. Solvents, special (restricted sale).
27. Polishes.
28. Inks (not including meat branding inks).
29. Stains (wood, etc.).
30. Shampoos.
31. Soap and bath preparations.
32. Cellulose compounds (dehydration).
33. Sodium hydrosulfite (dehydration).
34. Other dehydration products.
35. Petroleum products.
36. Processing pectin.
37. Processing other food products.
38. Processing crude drugs.
39. Processing glandular products, vitamins, hormones, and yeasts.
40. Processing antibiotics and vaccines.
41. Processing medicinal chemicals (including alkaloids).
42. Processing blood and blood products.
43. Miscellaneous drug processing (including manufacture of pills).
44. Processing dyes and intermediates.
45. Processing perfume materials and fixatives.
46. Processing photographic chemicals.
47. Processing rosin.
48. Processing rubber (latex).
49. Processing other chemicals.
50. Processing miscellaneous products.
51. Disinfectants, insecticides, fungicides, and other biocides.
52. Embalming fluids and related products.
53. Sterilizing and preserving solutions.
54. Industrial detergents and soaps.
55. Cleaning solutions (including household detergents).
56. Photoengraving and rotogravure dyes and solutions.
57. Other dye solutions.
58. Miscellaneous solutions (including duplicating fluids).
(2) As a raw material:
521. Ethyl acetate.
522. Ethyl chloride.
523. Other ethyl esters.
524. Ethylamines.
525. Dyes and intermediates.
526. Acetaldehyde.
527. Other aldehydes.
528. Ethyl ether.
529. Other ethers.
530. Ethylene dibromide.
531. Ethylene gas.
532. Xanthates.
533. Fulminate of mercury and other detonators.
534. Drugs and medicinal chemicals.
535. Other chemicals.
(3) As a fuel:
611. Automobile and supplementary fuels.
612. Airplane and supplementary fuels.
613. Rocket and jet fuels.
614. Proprietary heating fuels.
615. Other fuel uses.
(4) As a fluid:
710. Scientific instruments.
711. Brake fluids.
712. Cutting oil.
713. Refrigerating uses.
714. Other fluid uses.
715. Proprietary anti-freeze.
(5) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
813. Specialized uses (unclassified).
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended by T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985; T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.33 Formula No. 2-B.
(a) *Formula.* To every 100 gallons of alcohol add:
One-half gallon of rubber hydrocarbon solvent,
1⁄2 gallon of toluene,
1⁄2 gallon of heptane,
1⁄2 gallon of hexane (mixed isomers), or
1⁄2 gallon of *n*-hexane.
(b) *Authorized uses.*
(1) As a solvent:
21. Cellulose plastics.
22. Non-cellulose plastics, including resins.
23. Photographic film and emulsions.
24. Transparent sheeting.
25. Explosives.
26. Cellulose compounds (dehydration).
27. Sodium hydrosulfite (dehydration).
28. Other dehydration products.
29. Petroleum products.
30. Processing pectin.
31. Processing other food products.
32. Processing crude drugs.
33. Processing glandular products, vitamins, hormones, and yeasts.
34. Processing antibiotics and vaccines.
35. Processing medicinal chemicals (including alkaloids).
36. Miscellaneous drug processing (including manufacture of pills).
37. Processing dyes and intermediates.
38. Processing perfume materials and fixatives.
39. Processing photographic chemicals.
40. Processing other chemicals.
41. Processing miscellaneous products.
(2) As a raw material:
521. Ethyl acetate.
522. Ethyl chloride.
523. Other ethyl esters.
524. Sodium ethylate, anhydrous.
525. Ethylamines.
526. Dyes and intermediates.
527. Acetaldehyde.
528. Other aldehydes.
529. Ethyl ether.
530. Other ethers.
531. Ethylene dibromide.
532. Ethylene gas.
533. Xanthates.
534. Drugs and medicinal chemicals.
535. Organo-silicone products.
536. Other chemicals.
(3) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
(c) *Conditions governing use.* This formula shall be used in a closed and continuous system unless otherwise authorized by the appropriate TTB officer.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001; T.D. TTB-140 [81 FR 59461](https://www.federalregister.gov/citation/81-FR-59461), Aug. 30, 2016]
#### § 21.34 \[Reserved]
#### § 21.35 Formula No. 3-A.
(a) *Formula.* To every 100 gallons of alcohol add:
Five gallons of cyclohexane or methyl alcohol.
(b) *Authorized uses.*
(1) As a solvent:
11. Cellulose coatings.
12. Synthetic resin coatings.
13. Other coatings.
14. Cellulose plastics.
15. Non-cellulose plastics, including resins.
16. Photographic film and emulsions.
17. Transparent sheeting.
18. Explosives.
19. Cellulose intermediates and industrial collodions.
20. Soldering flux.
21. Adhesives and binders.
22. Proprietary solvents.
23. Solvents, special (restricted sale).
24. Polishes.
25. Inks (including meat branding inks).
26. Stains (wood, etc.).
27. Shampoos.
28. Soap and bath preparations.
29. Cellulose compounds (dehydration).
30. Sodium hydrosulfite (dehydration).
31. Other dehydration products.
32. Petroleum products.
33. Processing pectin.
34. Processing other food products.
35. Processing crude drugs.
36. Processing glandular products, vitamins, hormones, and yeasts.
37. Processing antibiotics and vaccines.
38. Processing medicinal chemicals (including alkaloids).
39. Processing blood and blood products.
40. Miscellaneous drug processing (including manufacture of pills).
41. Processing dyes and intermediates.
42. Processing perfume materials and fixatives.
43. Processing photographic chemicals.
44. Processing rosin.
45. Processing rubber (latex).
46. Processing other chemicals.
47. Processing miscellaneous products.
48. Disinfectants, insecticides, fungicides, and other biocides.
49. Embalming fluids and related products.
50. Sterilizing and preserving solutions.
51. Industrial detergents and soaps.
52. Cleaning solutions (including household detergents).
53. Theater sprays, incense, and room deodorants.
54. Photoengraving and rotogravure dyes and solutions.
55. Other dye solutions.
56. Miscellaneous solutions (including duplicating fluids).
(2) As a raw material:
530. Ethylamines.
531. Dyes and intermediates.
532. Drugs and medicinal chemicals.
533. Organo-silicone products.
534. Other chemicals.
535. Synthetic resins.
(3) As a fuel:
611. Automobile and supplementary fuels.
612. Airplane and supplementary fuels.
613. Rocket and jet fuels.
614. Proprietary heating fuels.
615. Other fuel uses.
(4) As a fluid:
710. Scientific instruments.
711. Brake fluids.
712. Cutting oils.
713. Refrigerating uses.
714. Other fluid uses.
(5) Miscellaneous uses:
810. General laboratory and experimental use (own use only).
811. Laboratory reagents for sale.
812. Product development and pilot plant uses (own use only).
813. Specialized uses (unclassified).
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended by T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985; T.D. TTB-140, [81 FR 59461](https://www.federalregister.gov/citation/81-FR-59461), Aug. 30, 2016]
#### § 21.36 \[Reserved]
#### § 21.37 Formula No. 3-C.
(a) *Formula.* To every 100 gallons of alcohol add:
Five gallons of isopropyl alcohol.
(b) *Authorized uses.*
(1) As a solvent:
11. Cellulose coatings.
12. Synthetic resin coatings.
13. Other coatings.
14. Cellulose plastics.
15. Non-cellulose plastics, including resins.
16. Photographic film and emulsions.
17. Transparent sheeting.
18. Explosives.
19. Cellulose intermediates and industrial collodions.
20. Soldering flux.
21. Adhesives and binders.
22. Solvents, special (restricted sale).
23. Polishes.
24. Inks (including meat branding inks).
25. Stains (wood, etc.).
26. Shampoos.
27. Soaps and bath preparations.
28. Cellulose compounds (dehydration).
29. Sodium hydrosulfite (dehydration).
30. Other dehydration products.
31. Petroleum products.
32. Processing pectin.
33. Processing other food products.
34. Processing crude drugs.
35. Processing glandular products, vitamins, hormones, and yeasts.
36. Processing antibiotics and vaccines.
37. Processing medicinal chemicals (including alkaloids).
38. Processing blood and blood products.
39. Miscellaneous drug processing (including manufacture of pills).
40. Processing dyes and intermediates.
41. Processing perfume materials and fixatives.
42. Processing photographic chemicals.
43. Processing rosin.
44. Processing rubber (latex).
45. Processing other chemicals.
46. Processing miscellaneous products.
47. Disinfectants, insecticides, fungicides, and other biocides.
48. Embalming fluids and related products.
49. Sterilizing and preserving solutions.
50. Industrial detergents and soaps.
51. Cleaning solutions (including household detergents).
52. Theater sprays, incense, and room deodorants.
53. Photoengraving and rotogravure dyes and solutions.
54. Other dye solutions.
55. Miscellaneous solutions (including duplicating fluids).
(2) As a raw material:
530. Ethylamines.
531. Dyes and intermediates.
532. Drugs and medicinal chemicals.
533. Organo-silicone products.
534. Other chemicals.
535. Synthetic resins.
(3) As a fuel:
611. Automobile and supplementary fuels.
612. Airplane and supplementary fuels.
613. Rocket and jet fuels.
614. Proprietary heating fuels.
615. Other fuel uses.
(4) As a fluid:
710. Scientific instruments.
711. Brake fluids.
712. Cutting oils.
713. Refrigerating uses.
714. Other fluid uses.
(5) Miscellaneous uses:
810. General laboratory and experimental use (own use only).
811. Laboratory reagents for sale.
812. Product development and pilot plant uses (own use only).
813. Specialized uses (unclassified).
(c) *Conditions governing use.* This formula shall not be used in manufacturing Reagent alcohol general-use formula under [§ 20.117 of this chapter](/current/title-27/section-20.117).
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended by T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985]
#### § 21.38 Formula No. 4.
(a) *Formula.* To every 100 gallons of alcohol, or to every 100 gallons of rum of not less than 150 proof, add:
One gallon of the following solution: Five gallons of an aqueous solution containing 40 percent nicotine; 3.6 avoirdupois ounces of methylene blue, U.S.P.; and water sufficient to make 100 gallons.
(b) *Authorized uses.*
(1) As a solvent:
460. Tobacco sprays and flavors.
(2) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
#### §§ 21.39-21.40 \[Reserved]
#### § 21.41 Formula No. 13-A.
(a) *Formula.* To every 100 gallons of alcohol add:
Ten gallons of ethyl ether.
(b) *Authorized uses.*
(1) As a solvent:
15. Candy glazes.
16. Cellulose plastics.
17. Non-cellulose plastics, including resins.
18. Photographic film and emulsions.
19. Transparent sheeting.
20. Cellulose intermediates and industrial collodions.
21. Inks (not including meat branding inks).
22. Collodion, U.S.P.
23. Processing pectin.
24. Processing other food products.
25. Processing glandular products, vitamins, hormones, and yeasts.
26. Processing antibiotics and vaccines.
27. Processing medicinal chemicals (including alkaloids).
28. Processing blood and blood products.
29. Miscellaneous drug processing (including manufacture of pills).
30. Processing perfume materials and fixatives.
31. Processing photographic chemicals.
32. Processing other chemicals.
33. Processing miscellaneous products.
34. Sterilizing and preserving solutions.
35. Photoengraving and rotogravure solutions and dyes.
36. Miscellaneous solutions.
(2) As a raw material:
523. Miscellaneous ethyl esters.
524. Ethyl ether.
525. Other ethers.
526. Drugs and medicinal chemicals.
527. Other chemicals.
(3) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended by T.D. TTB-140, [81 FR 59461](https://www.federalregister.gov/citation/81-FR-59461), Aug. 30, 2016]
#### § 21.42 \[Reserved]
#### § 21.43 Formula No. 18.
(a) *Formula.* To every 100 gallons of alcohol of not less than 160 proof add:
One hundred gallons of vinegar of not less than 90-grain strength or 150 gallons of vinegar of not less than 60-grain strength.
(b) *Authorized uses.*
(1) As a raw material:
511. Vinegar.
(2) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
#### § 21.44 Formula No. 19.
(a) *Formula.* To every 100 gallons of alcohol add:
One hundred gallons of ethyl ether.
(b) *Authorized uses.*
(1) As a solvent:
31. Photographic film and emulsions.
32. Cellulose intermediates and industrial collodions.
33. Collodion, U.S.P.
(2) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
#### §§ 21.45-21.46 \[Reserved]
#### § 21.47 Formula No. 23-A.
(a) *Formula.* To every 100 gallons of alcohol add:
Eight gallons of acetone, U.S.P.
(b) *Authorized uses.*
(1) As a solvent:
11. Cellulose coatings.
12. Synthetic resin coatings.
13. Shellac coatings.
14. Other natural resin coatings.
15. Candy glazes.
16. Other coatings.
17. Transparent sheeting.
18. Cellulose intermediates and industrial collodions.
19. Soldering flux.
20. Adhesives and binders.
21. Solvents and thinners (other than proprietary solvents or special industrial solvents).
22. Inks (including meat branding inks).
23. Stains (wood, etc.).
24. Hair and scalp preparations.
25. Bay rum.
26. Lotions and creams (hand, face, and body).
27. Body deodorants and deodorant creams.
28. Shampoos.
29. Soaps and bath preparations.
30. External pharmaceuticals, not U.S.P. or N.F.
31. Antiseptic solutions, U.S.P. or N.F.
32. Miscellaneous external pharmaceuticals, U.S.P. or N.F.
33. Processing pectin.
34. Processing other food products.
35. Processing crude drugs.
36. Processing glandular products, vitamins, hormones, and yeasts.
37. Processing antibiotics and vaccines.
38. Processing medicinal chemicals (including alkaloids).
39. Processing blood and blood products.
40. Miscellaneous drug processing (including manufacture of pills).
41. Processing other chemicals.
42. Processing miscellaneous products.
43. Disinfectants, insecticides, fungicides, and other biocides.
44. Embalming fluids and related products.
45. Sterilizing and preserving solutions.
46. Industrial detergents and soaps.
47. Cleaning solutions (including household detergents).
48. Miscellaneous dye solutions.
49. Miscellaneous solutions.
(2) As a fluid:
740. Refrigerating uses.
741. Miscellaneous fluid uses.
(3) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
#### § 21.48 \[Reserved]
#### § 21.49 Formula No. 23-H.
(a) *Formula.* To every 100 gallons of alcohol add:
Eight gallons of acetone, U.S.P., and 1.5 gallons of methyl isobutyl ketone.
(b) *Authorized uses.*
(1) As a solvent:
111. Hair and scalp preparations.
112. Lotions and creams (hand, face, and body).
113. External pharmaceuticals, not U.S.P. or N.F.
114. Rubbing alcohols.
115. Disinfectants, insecticides, fungicides, and other biocides.
116. Cleaning solutions (including household detergents).
(2) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended by T.D. TTB-140, [81 FR 59461](https://www.federalregister.gov/citation/81-FR-59461), Aug. 30, 2016]
#### § 21.50 Formula No. 25.
(a) *Formula.* To every 100 gallons of alcohol add:
Twenty pounds of iodine, U.S.P., and 15 pounds of either potassium iodide, U.S.P., or sodium iodide, U.S.P.
(b) *Authorized uses.*
(1) As a solvent:
230. Tinctures of iodine.
231. Miscellaneous external pharmaceuticals, U.S.P. or N.F.
(2) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
#### § 21.51 Formula No. 25-A.
(a) *Formula.* To every 100 gallons of alcohol add:
A solution composed of 20 pounds of iodine, U.S.P.; 15 pounds of either potassium iodide, U.S.P., or sodium iodide, U.S.P.; and 15 pounds of water.
(b) *Authorized uses.*
(1) As a solvent:
230. Tinctures of iodine.
231. Miscellaneous external pharmaceuticals, U.S.P. or N.F.
(2) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
#### §§ 21.52-21.54 \[Reserved]
#### § 21.55 Formula No. 28-A.
(a) *Formula.* To every 100 gallons of alcohol add:
One gallon or any combination totaling 1 gallon of either gasoline, unleaded gasoline, heptane, or rubber hydrocarbon solvent.
(b) *Authorized uses.*
(1) As a fuel:
611. Automobile and supplementary fuels.
612. Airplane and supplementary fuels.
613. Rocket and jet fuels.
614. Proprietary heating fuels.
615. Other fuel uses.
(2) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
#### § 21.56 Formula No. 29.
(a) *Formula.* To every 100 gallons of alcohol add:
One gallon of 100 percent acetaldehyde or 5 gallons of an alcohol solution of acetaldehyde containing not less than 20 percent acetaldehyde, or 1 gallon of ethyl acetate having an ester content of 100 percent, or, where approved by the appropriate TTB officer, as to material and quantity, not less than 6.8 pounds if solid, or 1 gallon if liquid, of any chemical. When material other than acetaldehyde or ethyl acetate is proposed to be used, the user shall submit an application for such use to the appropriate TTB officer. The application shall include specifications, assay methods, and an 8-ounce sample of the substitute material for analysis.
(b) *Authorized uses.*
(1) As a raw material:
511. Vinegar.
512. Acetic acid.
513. Ethyl acetate.
514. Ethyl chloride.
515. Other ethyl esters.
516. Ethylamines.
517. Dyes and intermediates.
518. Acetaldehyde.
519. Other aldehydes.
520. Ethyl ether.
521. Other ethers.
522. Ethylene dibromide.
523. Ethylene gas.
524. Xanthates.
525. Drugs and medicinal chemicals.
526. Other chemicals.
527. Synthetic rubber.
528. Synthetic resins.
(2) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
(c) *Conditions governing use.* This formula is restricted to processes in which the alcohol loses its identity by being converted into other chemicals.
#### § 21.57 Formula No. 30.
(a) *Formula.* To every 100 gallons of alcohol add:
Ten gallons of methyl alcohol.
(b) *Authorized uses.*
(1) As a solvent:
11. Cellulose coatings.
12. Synthetic resin coatings.
13. Cellulose plastics.
14. Non-cellulose plastics, including resins.
15. Photographic film and emulsions.
16. Soldering flux.
17. Adhesives and binders.
18. Solvents and thinners (other than proprietary solvents or special industrial solvents).
19. Polishes.
20. Inks (not including meat branding inks).
21. Stains.
22. Soap and bath preparations.
23. Processing pectin.
24. Processing other food products.
25. Processing crude drugs.
26. Processing glandular products, vitamins, hormones, and yeasts.
27. Processing antibiotics and vaccines.
28. Processing medicinal chemicals (including alkaloids).
29. Processing blood and blood products.
30. Miscellaneous drug processing (including manufacture of pills).
31. Processing perfume materials and fixatives.
32. Processing photographic chemicals.
33. Processing other chemicals.
34. Processing miscellaneous products.
35. Disinfectants, insecticides, fungicides, and other biocides.
36. Sterilizing and preserving solutions.
37. Industrial detergents and soaps.
38. Cleaning solutions (including household detergents).
39. Photoengraving and rotogravure solutions and dyes.
40. Other dye solutions.
41. Miscellaneous solutions (including duplicating fluids).
(2) As a raw material:
575. Drugs and medicinal chemicals.
576. Organo-silicone products.
577. Other chemicals.
578. Synthetic resins.
(3) As a fluid in:
740. Refrigerating uses.
741. Other fluid uses:
(4) Miscellaneous uses:
810. General laboratory and experimental use (own use only).
811. Laboratory reagents for sale.
812. Product development and pilot plant uses (own use only).
#### § 21.58 Formula No. 31-A.
(a) *Formula.* To every 100 gallons of alcohol add:
One hundred pounds of glycerin (glycerol), U.S.P., and 20 pounds of hard soap, N.F. XI.
(b) *Authorized uses.*
(1) As a solvent:
113. Lotions and creams (hands, face, and body).
114. Tooth paste and tooth powder.
115. Shampoos.
(2) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
#### § 21.59 Formula No. 32.
(a) *Formula.* To every 100 gallons of alcohol add:
Five gallons of ethyl ether.
(b) *Authorized uses.*
(1) As a solvent:
31. Photographic film and emulsions.
32. Cellulose intermediates and industrial collodions.
33. Inks (not including meat branding inks).
34. Collodion, U.S.P.
35. Ethyl cellulose compounds (dehydration).
36. Processing miscellaneous food products.
37. Processing glandular products, vitamins, hormones, and yeasts.
38. Processing antibiotics and vaccines.
39. Processing medicinal chemicals (including alkaloids).
40. Sterilizing and preserving solutions.
41. Photoengraving and rotogravure solutions and dyes.
42. Miscellaneous solutions.
(2) As a raw material:
522. Ethyl chloride.
523. Other ethyl esters.
524. Ethyl ether.
525. Other ethers.
526. Ethylene dibromide.
527. Ethylene gas.
528. Drugs and medicinal chemicals.
529. Other chemicals.
530. Synthetic rubber.
(3) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended by T.D. TTB-140, [81 FR 59461](https://www.federalregister.gov/citation/81-FR-59461), Aug. 30, 2016]
#### §§ 21.60-21.61 \[Reserved]
#### § 21.62 Formula No. 35-A.
(a) *Formula.* To every 100 gallons of alcohol add:
4.25 gallons of ethyl acetate having an ester content of 100 percent by weight or the equivalent thereof not to exceed 5 gallons of ethyl acetate with an ester content of not less than 85 percent by weight.
(b) *Authorized uses.*
(1) As a solvent:
15. Candy glazes.
16. Inks.
17. Processing pectin.
18. Processing other food products.
19. Processing glandular products, vitamins, hormones, and yeasts.
20. Processing antibiotics and vaccines.
21. Processing medicinal chemicals (including alkaloids).
22. Miscellaneous drug processing (including manufacture of pills).
23. Processing miscellaneous chemicals.
24. Processing miscellaneous products.
25. Miscellaneous solutions.
(2) As a raw material:
511. Vinegar.
512. Acetic acid.
513. Ethyl acetate.
514. Other ethyl esters.
515. Synthetic resins.
516. Animal feed supplements.
(3) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended by T.D. TTB-140, [81 FR 59461](https://www.federalregister.gov/citation/81-FR-59461), Aug. 30, 2016]
#### § 21.63 Formula No. 36.
(a) *Formula.* To every 100 gallons of alcohol add:
Three gallons of ammonia, aqueous, 27 to 30 percent by weight; 3 gallons of strong ammonia solution, N.F.: 17.5 pounds of caustic soda, liquid grade, containing 50 percent sodium hydroxide by weight; 8.75 pounds of potassium hydroxide, on an anhydrous basis or 12.0 pounds of caustic soda, liquid grade, containing 73 percent sodium hydroxide by weight.
(b) *Authorized uses.*
(1) As a solvent:
141. Shampoos.
142. Soap and bath preparations.
143. External pharmaceuticals, not U.S.P. or N.F.
144. Cleaning solutions (including household detergents).
(2) As a raw material:
530. Ethylamines.
531. Dyes and intermediates.
532. Other chemicals.
(3) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended by T.D. TTB-140, [81 FR 59461](https://www.federalregister.gov/citation/81-FR-59461), Aug. 30, 2016]
#### § 21.64 Formula No. 37.
(a) *Formula.* To every 100 gallons of alcohol add:
Forty-five fluid ounces of eucalyptol, N.F. XII, 30 avoirdupois ounces of thymol, N.F., and 20 avoirdupois ounces of menthol, U.S.P.
(b) *Authorized uses.*
(1) As a solvent:
111. Hair and scalp preparations.
112. Bay rum.
113. Lotions and creams (hand, face, and body).
114. Dentifrices.
115. Mouth washes.
116. External pharmaceuticals, not U.S.P. or N.F.
117. Antispetic solutions, U.S.P. or N.F.
118. Disinfectants, insecticides, fungicides, and other biocides.
119. Sterilizing and preserving solutions.
120. Theater sprays, incense, and room deodorants.
(2) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended by T.D. TTB-140, [81 FR 59461](https://www.federalregister.gov/citation/81-FR-59461), Aug. 30, 2016]
#### § 21.65 Formula No. 38-B.
(a) *Formula.* To every 100 gallons of alcohol add:
Ten pounds of any one, or a total of 10 pounds of two or more, of the oils and substances listed below:
Alpha terpineol
Anethole, N.F.
Anise oil, N.F.
Bay oil (myrcia oil), N.F. XI.
Benzaldehyde, N.F.
Bergamot oil, N.F. XI.
Bitter almond oil, N.F. X.
Camphor, U.S.P.
Cedar leaf oil, U.S.P. XIII.
Chlorothymol, N.F. XII.
Cinnamic aldehyde, N.F. IX.
Cinnamon oil, N.F.
Citronella oil, natural.
Clove oil, N.F.
Coal tar, U.S.P.
Cornmint oil.
Distilled lime oil.
Eucalyptol, N.F. XII.
Eucalyptus oil, N.F.
Eugenol, U.S.P.
Guaiacol, N.F. X.
L(-)-Carvone.
Lavender oil, N.F.
Lemon oil.
Menthol, U.S.P.
Methyl salicylate, N.F.
Mustard oil, volatile (allyl isothiocyanate), U.S.P. XII.
Peppermint oil, N.F.
Peppermint oil, terpeneless.
Phenol, U.S.P.
Phenyl salicylate (salol), N.F. XI.
Pine oil, N.F. XII.
Pine needle oil, dwarf, N.F.
Rosemary oil, N.F. XII.
Safrole.
Sassafras oil, N.F. XI.
Spearmint oil, N.F.
Spearmint oil, terpeneless.
Spike lavender oil, natural.
Storax, U.S.P.
Thyme oil, N.F. XII.
Thymol, N.F.
Tolu balsam, U.S.P.
Turpentine oil, N.F. XI.
If it is shown that none of the above single denaturants or combinations can be used in the manufacture of a particular product, the user may submit an application to the appropriate TTB officer, requesting permission to use another essential oil or substance having denaturing properties satisfactory to the appropriate TTB officer. In such a case the user shall furnish the appropriate TTB officer, with specifications, assay methods, the name and address of the manufacturer, and an 8-ounce sample of the denaturant for analysis.
(b) *Authorized uses.*
(1) As a solvent:
111. Hair and scalp preparations.
112. Bay rum.
113. Lotions and creams (hand, face, and body).
114. Deodorants (body).
115. Perfumes and perfume tinctures.
116. Toilet waters and colognes.
117. Dentifrices.
118. Mouth washes.
119. Shampoos.
120. Soap and bath preparations.
121. External pharmaceuticals, not U.S.P. or N.F.
122. Liniments, U.S.P. or N.F.
123. Antiseptic solutions, U.S.P. or N.F.
124. Miscellaneous external pharmaceuticals, U.S.P. or N.F.
125. Miscellaneous drug processing (including manufacture of pills).
126. Disinfectants, insecticides, fungicides, and other biocides.
127. Sterilizing and preserving solutions.
128. Theater sprays, incense, and room deodorants.
(2) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001; T.D. TTB-140, [81 FR 59461](https://www.federalregister.gov/citation/81-FR-59461), Aug. 30, 2016]
#### § 21.66 \[Reserved]
#### § 21.67 Formula No. 38-D.
(a) *Formula.* To every 100 gallons of alcohol add:
Two and one-half pounds of menthol, U.S.P., and 2.5 gallons of formaldehyde solution, U.S.P.
(b) *Authorized uses.*
(1) As a solvent:
131. Dentifrices.
132. Mouth washes.
(2) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
#### § 21.68 Formula No. 38-F.
(a) *Formula.* To every 100 gallons of alcohol add:
(1) Six pounds of either boric acid, N.F., Polysorbate 80, N.F., or Poloxamer 407, N.F.; 11/3 pounds of thymol, N.F.; 11/3 pounds of chlorothymol, N.F. XII; and 11/3 pounds of menthol, U.S.P.; or
(2) A total of at least 3 pounds of any two or more denaturing materials listed under Formula No. 38-B, plus sufficient boric acid, N.F., Polysorbate 80, N.F., or Poloxamer 407, N.F. to total 10 pounds of denaturant; or
(3) Seven pounds of zinc chloride, U.S.P., 2.6 fluid ounces of hydrochloric acid, N.F., and a total of 3 pounds of any two or more of the denaturing materials listed under Formula No. 38-B.
(b) *Authorized uses.*
(1) As a solvent:
132. Mouth washes.
133. External pharmaceuticals, not U.S.P. or N.F.
134. Antiseptic solutions, U.S.P. or N.F.
(2) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended by T.D. TTB-140, [81 FR 59461](https://www.federalregister.gov/citation/81-FR-59461), Aug. 30, 2016]
#### §§ 21.69-21.70 \[Reserved]
#### § 21.71 Formula No. 39-B.
(a) *Formula.* To every 100 gallons of alcohol add:
Two and one-half gallons of diethyl phthalate and
1⁄8 gallon of \*tert-\*butyl alcohol.
(b) *Authorized uses.*
(1) As a solvent:
111. Hair and scalp preparations.
112. Bay rum.
113. Lotions and creams (hand, face, and body).
114. Deodorants (body).
115. Perfumes and perfume tinctures.
116. Toilet waters and colognes.
117. Shampoos.
118. Soap and bath preparations.
119. External pharmaceuticals, not U.S.P. or N.F.
120. Disinfectants, insecticides, fungicides, and other biocides.
121. Cleaning solutions (including household detergents).
122. Theater sprays, incense, and room deodorants.
(2) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
#### § 21.72 Formula No. 39-C.
(a) *Formula.* To every 100 gallons of alcohol add:
One gallon of diethyl phthalate.
(b) *Authorized uses.*
(1) As a solvent:
111. Hair and scalp preparations.
112. Lotions and creams (hand, face, and body).
113. Deodorants (body).
114. Perfumes and perfume tinctures.
115. Toilet waters and colognes.
116. Soaps and bath preparations.
117. Theater sprays, incense, and room deodorants.
(2) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
#### § 21.73 Formula No. 39-D.
(a) *Formula.* To every 100 gallons of alcohol add:
One gallon of bay oil (myrcia oil), N.F. XI, and either 50 avoirdupois ounces of quinine sulfate, U.S.P., 50 avoirdupois ounces of sodium salicylate, U.S.P.
(b) *Authorized uses.*
(1) As a solvent:
111. Hair and scalp preparations.
112. Bay rum.
(2) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
#### § 21.74 Formula No. 40.
(a) *Formula.* To every 100 gallons of alcohol add 1⁄8 gallon of *tert*-butyl alcohol, and:
One and one-half avoirdupois ounces of either (1) brucine alkaloid, (2) brucine sulfate, N.F. IX, (3) quassin, or (4) any combination of two or of three of those denaturants.
(b) *Authorized uses.*
(1) As a solvent:
111. Hair and scalp preparations.
112. Bay rum.
113. Lotions and creams (hand, face, and body).
114. Deodorants (body).
115. Perfumes and perfume tinctures.
116. Toilet waters and colognes.
117. Shampoos.
118. Soaps and bath preparations.
119. External pharmaceuticals, not U.S.P. or N.F.
120. Disinfectants, insecticides, fungicides, and other biocides.
121. Cleaning solutions (including household detergents).
122. Theater sprays, incense, and room deodorants.
(2) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
#### § 21.75 Formula No. 40-A.
(a) *Formula.* To every 100 gallons of alcohol add:
One pound of sucrose octaacetate and
1⁄8 gallon of *tert*-butyl alcohol.
(b) *Authorized uses.*
(1) As a solvent:
111. Hair and scalp preparations.
112. Bay rum.
113. Lotions and creams (hand, face, and body).
114. Deodorants (body).
115. Perfumes and perfume tinctures.
116. Toilet waters and colognes.
117. Shampoos.
118. Soaps and bath preparations.
119. External pharmaceuticals, not U.S.P. or N.F.
120. Disinfectants, insecticides, fungicides, and other biocides.
121. Cleaning solutions (including household detergents).
122. Theater sprays, incense, and room deodorants.
(2) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
#### § 21.76 Formula No. 40-B.
(a) *Formula.* To every 100 gallons of alcohol add:
One-sixteenth avoirdupois ounce of denatonium benzoate, N.F., and
1⁄8 gallon of *tert*-butyl alcohol.
(b) *Authorized uses.*
(1) As a solvent:
52. Inks.
53. Hair and scalp preparations.
54. Bay rum.
55. Lotions and creams (hand, face, and body).
56. Deodorants (body).
57. Perfumes and perfume tinctures.
58. Toilet waters and colognes.
59. Shampoos.
60. Soaps and bath preparations.
61. External pharmaceuticals, not U.S.P. or N.F.
62. Disinfectants, insecticides, fungicides, and other biocides.
63. Cleaning solutions (including household detergents).
64. Theater sprays, incense, and room deodorants.
65. Miscellaneous solutions.
(2) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001; T.D. TTB-140, [81 FR 59461](https://www.federalregister.gov/citation/81-FR-59461), Aug. 30, 2016]
#### § 21.77 Formula No. 40-C.
(a) *Formula.* To every 100 gallons of alcohol add:
Three gallons of *tert*-butyl alcohol.
(b) *Authorized uses.*
(1) As a solvent:
111. Hair and scalp preparations.
112. Bay rum.
113. Lotions and creams (hand, face, and body).
114. Deodorants (body).
115. Perfumes and perfume tinctures.
116. Toilet waters and colognes.
117. Shampoos.
118. Soaps and bath preparations.
119. External pharmaceuticals, not U.S.P. or N.F.
120. Disinfectants, insecticides, fungicides, and other biocides.
121. Cleaning solutions (including household detergents).
122. Theater sprays, incense, and room deodorants.
123. Miscellaneous solutions.
(2) Miscellaneous uses.
812. Product development and pilot plant uses (own use only).
(c) *Conditions governing use.* This formula shall be used only in the manufacture of products which will be packaged in pressurized containers in which the liquid contents are in intimate contact with the propellant and from which the contents are not easily removable in liquid form.
#### § 21.78 \[Reserved]
#### § 21.79 Formula No. 44.
(a) *Formula.* To every 100 gallons of alcohol add:
Ten gallons of *n*-butyl alcohol
(b) *Authorized uses.*
(1) As a solvent:
430. Sterilizing and preserving solutions.
(2) Miscellaneous uses:
812. Product development and pilot plant uses (own use only).
#### § 21.80 Formula No. 45.
(a) *Formula.* To every 100 gallons of alcohol add:
Three hundred pounds of refined white or orange shellac.
(b) *Authorized uses.*
(1) As a solvent:
15. Candy glazes.
(2) Miscellaneous uses:
812 Product development and pilot plant uses (own use only).
#### § 21.81 \[Reserved]
## Subpart E—Specifications for Denaturants
#### § 21.91 General.
Denaturants prescribed in this part shall comply with the specifications set forth in this subpart. However, in order to meet requirements of national defense or for other valid reasons, the appropriate TTB officer may, pursuant to written application filed by the denaturer, authorize variations from such specifications or authorize the use of substitute denaturants if such variation or substitution will not jeopardize the revenue. Each such application shall identify the applicant by name, address, and permit number; state the number of each formula of specially denatured alcohol involved; explain why the use of the substitute denaturant, or the variation from specifications, as the case may be, is necessary; and include, as applicable, either the identity of the approved denaturant for which substitution is desired and the identity of the substitute denaturant (including the name of the manufacturer) or the identity of the prescribed specifications and the proposed variation from those specifications. The application shall be accompanied by an 8-ounce sample of the proposed denaturing material for analysis. The authorization of a substitute denaturant may be published in a TTB Ruling.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001; T.D. TTB-140, [81 FR 59461](https://www.federalregister.gov/citation/81-FR-59461), Aug. 30, 2016]
#### § 21.92 Denaturants listed as U.S.P. or N.F.
Denaturing materials and products listed in this part as “U.S.P.” or “N.F.” shall meet the specifications set forth in the current United States Pharmacopoeia or National Formulary, or the latest volume of these publications in which the denaturants appeared as official preparations.
#### § 21.93 Acetaldehyde.
(a) *Aldehyde content (as acetaldehyde).* Not less than 95.0 percent by weight.
(b) *Color.* Colorless.
(c) *Odor.* Characteristic pungent, fruity odor.
(d) *Specific gravity at 15.56 °/15.56 °C.* Not less than 0.7800.
#### § 21.94 Acetaldol.
(a) *Purity.* Not less than 90 percent by weight acetaldol as determined by the following method:
Dissolve 15 grams of the acetaldol in distilled water and dilute to 1 liter in a volumetric flask. Transfer 5 mL of this solution to a 250 mL glass-stoppered flask containing 25 mL distilled water. Add 25 mL of a freshly prepared 1 percent sodium bisulfite solution. Prepare a blank omitting the acetaldol solution. Place the flasks in a dark place away from excessive heat or cold and allow to stand six hours. Remove flasks and titrate free bisulfite with 0.1 N iodine solution using starch indicator.
Percent acetaldol by weight = (mL blank − mL test) × 200 × 0.44 / weight of sample
Titrations in excess of 100 percent may be obtained if the sample contains appreciable amounts of acetaldehyde.
(b) *Specific gravity at 20 °C.* 1.098 to 1.105.
#### § 21.94-T Alkylate.
(a) *API gravity at 60 °F.* 70.4.
(b) *Reid vapor pressure (PSI).* 5.60 maximum.
(c) *Distillation ( °F):*
(i) *I.B.P.* 109.0.
(ii) *10 percent.* 186.6.
(iii) *50 percent.* 221.1.
(iv) *90 percent.* 271.8.
(v) *End point distillation.* 375.7.
\[T.D. TTB-140, [81 FR 59461](https://www.federalregister.gov/citation/81-FR-59461), Aug. 30, 2016]
#### § 21.95 Alpha terpineol.
(a) Boiling point at 752mm 218.8-219.4 °C.
(b) Density at 15° 0.9386.
(c) Refractive index at 20° 1.4831.
\[T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.96 Ammonia, aqueous.
(a) *Alkalinity.* Strongly alkaline to litmus.
(b) *Ammonia content.* 27 to 30 percent by weight. Accurately weigh a glass-stoppered flask containing 25 mL of water, add about 2 mL of the sample, stopper, and weigh again. Add methyl red indicator, and titrate with 1 N sulfuric acid. Each mL of 1 N sulfuric acid is equivalent to 17.03 mg of NH3
(c) *Color.* Colorless liquid.
(d) *Non-volatile residue.* 2 mg maximum. Dilute a portion of the sample with 11⁄2 times its volume of distilled water. Evaporate 10 mL of this product to dryness in a tared platinum or porcelain dish. Dry residue at 105 °C. for 1 hour, cool and weigh.
(e) *Odor.* Characteristic (exceedingly pungent).
(f) *Specific gravity at 20 °/4 °C.* 0.8920 to 0.9010.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### §§ 21.97-21.98 \[Reserved]
#### § 21.99 Brucine alkaloid.
(a) *Identification test.* Add a few drops of concentrated nitric acid to about 10 mg of brucine alkaloid. A vivid red color is produced. Dilute the red solution with a few drops of water and add a few drops of freshly made dilute stannous chloride solution. A reddish purple (violet) color is produced.
(b) *Melting point.* 178 °±1 °C. Dry the alkaloid in an oven for one hour at 100 °C., increase the temperature to 110° and dry to a constant weight before taking melting point.
Note.
Brucine alkaloid tetrahydrate melts at 105 °C. while the anhydrous form melts at 178 °C.
(c) *Strychnine test.* Brucine alkaloid shall be free of strychnine when tested by the method listed under Brucine Sulfate, N.F. IX.
Note.
If the brucine contains as much as 0.05 percent strychnine, a clear distinctive violet color, characteristic of strychnine, will be obtained.
(d) *Sulfate test.* No white precipitate is formed that is not dissolved by hydrochloric acid when several drops of a 1 N barium chloride solution are added to 10 mL of a solution of the alkaloid.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.100 *n*-Butyl alcohol.
(a) *Acidity (as acetic acid).* 0.03 percent by weight maximum.
(b) *Color.* Colorless.
(c) *Dryness at 20 °C.* Miscible without turbidity with 10 volumes of 60° Bé1. gasoline.
(d) *Odor.* Characteristic odor.
(e) *Specific gravity at 20 °/20 °C.* 0.810 to 0.815.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.101 tert-Butyl alcohol.
(a) *Acidity (as acetic acid).* 0.003 percent by weight maximum.
(b) *Color.* Colorless.
(c) *Distillation range.* When 100 mL of tertiary butyl alcohol are distilled, none should distill below 78 °C. and none above 85 °C. More than 95 percent should distill between 81 °−83 °C.
(d) *Dryness at 20 °C.* Miscible without turbidity with 19 volumes of 60° Bé1. gasoline.
(e) *Freezing point (first needle).* Above 20 °C.
(f) *Identification test.* Place five drops of a solution containing approximately 0.1 percent tertiary butyl alcohol in ethyl alcohol in a test tube. Add 2 mL of Denige's reagent (dissolve 5 grams of red mercuric oxide in 20 mL of concentrated sulfuric acid; add this solution to 80 mL of distilled water, and filter when cool). Heat the mixture just to the boiling point and remove from the flame. A yellow precipitate forms within a few seconds.
(g) *Nonvolatile matter.* Less than 0.005 percent by weight.
(h) *Odor.* Characteristic odor.
(i) *Residual odor after evaporation.* None.
(j) *Specific gravity at 25 °/25 °C.* 0.780 to 0.786.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.102 Caustic soda, liquid.
(a) The liquid caustic soda may consist of either 50 percent or 73 percent by weight sodium hydroxide in aqueous solution. The amount of caustic soda used shall be such that each 100 gallons of alcohol will contain not less than 8.76 pounds of sodium hyroxide, anhydrous basis.
(b) *Color.* A 2 percent solution of the sodium hydroxide in water shall be water-white.
(c) *Assay.* The sodium hydroxide content of the caustic soda solution shall be determined by the following procedure:
Accurately weigh 2 grams of liquid caustic soda into a 100 mL volumetric flask, dissolve, and dilute to the mark with distilled water at room temperature. Transfer a 25 mL aliquot of the solution to a titration flask, add 10 mL of 1 percent barium chloride solution, 0.2 mL of 1 percent phenolphthalein indicator, and 50 mL of distilled water. Titrate with 0.25 N hydrochloric acid to the disappearance of the pink color. Not less than 25 mL of the hydrochloric acid shall be required to neutralize the sample of diluted 50 percent caustic soda, and not less than 36.5 mL of the hydrochloric acid shall be required to neutralize the sample of diluted 73 percent caustic soda.
One mL of 0.25 N hydrochloric acid equals 0.01 gram of sodium hydroxide (anhydrous).
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### §§ 21.103-21.104 \[Reserved]
#### § 21.105 Citronella oil, natural.
(a) *Java type:*
(1) *Alcohol content (as Geraniol).* Not less than 85 percent by weight.
(2) *Aldehyde content (as Citronellal).* Not less than 30 percent by weight.
(3) *Refractive index at 20 °C.* 1.4660 to 1.4745.
(4) *Specific gravity at 25 °/25 °C.* 0.875 to 0.893.
(5) *Odor.* Characteristic odor.
(b) *Ceylon type:*
(1) *Alcohol content (as Geraniol).* Not less than 55 percent by weight.
(2) *Aldehyde content (as Citronellal).* Not less than 7 percent by weight.
(3) *Refractive index at 20 °C.* 1.4790 to 1.4850.
(4) *Specific gravity at 25 °/25 °C.* 0.891 to 0.904.
(5) *Odor.* Characteristic odor.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.105-T1 Cornmint oil (Mentha arvensis and Mentha canadensis).
(a) *Specific gravity at 25 °C.* 0.895 to 0.905.
(b) *Refractive index at 20 °C.* 1.4580 to 1.4590.
(c) *Optical rotation at 20 °C.* −18° to −36°.
(d) *Alcohol content (as menthol).* 65 percent minimum.
(e) *Ketone content (as menthone).* 5 percent minimum.
\[T.D. TTB-140, [81 FR 59462](https://www.federalregister.gov/citation/81-FR-59462), Aug. 30, 2016]
#### § 21.105-T2 Cyclohexane.
(a) *Specific gravity at 20 °C.* 0.75 to 0.80.
(b) *Odor.* Characteristic odor.
\[T.D. TTB-140, [81 FR 59462](https://www.federalregister.gov/citation/81-FR-59462), Aug. 30, 2016]
#### § 21.106 Diethyl phthalate.
(a) *Refractive index at 25 °C.* 1.497 to 1.502.
(b) *Color.* Colorless.
(c) *Odor.* Practically odorless.
(d) *Solubility.* Soluble in 20 parts of 60 percent alcohol.
(e) *Specific gravity at 25 °/25 °C.* 1.115 to 1.118.
(f) *Ester content (as diethyl phthalate).* Not less than 99 percent by weight.
Note.
The sample taken for ester determination should be approximately 0.8 gram. The number of mL of 0.5 N potassium hydroxide used in saponification multiplied by 0.05555 indicates the number of grams of ester in the sample taken for assay.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.106-T Distilled lime oil (Citrus aurantifolia).
(a) *Specific gravity at 25 °C.* 0.850 to 0.870.
(b) *Refractive index at 20 °C.* 1.4740 to 1.4780.
(c) *Optical rotation at 20 °C.* +30° to +50°.
(d) *Aldehyde content (as citral).* 0.5 to 3.0 percent.
(e) *Terpene content (as limonene).* 45 percent minimum.
\[T.D. TTB-140, [81 FR 59462](https://www.federalregister.gov/citation/81-FR-59462), Aug. 30, 2016]
#### § 21.107 Ethyl acetate.
(a) *85 percent ester:*
(1) *Acidity (as acetic acid).* Not more than 0.015 percent by weight.
(2) *Color.* Colorless.
(3) *Odor.* Characteristic odor.
(4) *Ester content.* Not less than 85 percent by weight.
(5) *Specific gravity at 20 °/20 °C.* Not less than 0.882.
(6) *Distillation range.* (For applicable ASTM method, see 1980 Annual Book of ASTM Standards, Part 29, page 70, Standard No. D 302-58 (1975); for incorporation by reference, see [§ 21.6(b)](/current/title-27/section-21.6#p-21.6\(b\)).) When 100 mL of ethyl acetate are distilled by this method, none shall distill below 70 °C., not more than 10 mL shall distill below 72 °C., and none above 80 °C.
(b) *100 percent ester:*
(1) *Acidity (as acetic acid).* Not more than 0.010 percent by weight.
(2) *Color.* Colorless.
(3) *Odor.* Characteristic odor.
(4) *Ester content.* Not less than 99 percent by weight.
(5) *Specific gravity at 20 °/20 °C.* Not less than 0.899.
(6) *Distillation range.* (For applicable ASTM method, see 1980 Annual Book of ASTM Standards, Part 29, page 433, Standard No. D 3127-77; for incorporation by reference, see [§ 21.6(b)](/current/title-27/section-21.6#p-21.6\(b\)).) When 100 mL of ethyl acetate are distilled by this method, not more than 2 mL shall distill below 75 °C., and none above 80 °C. (760 mm).
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.108 Ethyl ether.
(a) *Odor.* Characteristic odor.
(b) *Specific gravity at 15.56 °/15.56 °C.* Not more than 0.728.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.108-T Ethyl tertiary butyl ether.
(a) *Purity.* ≥95.0 percent.
(b) *Color.* Colorless to light yellow.
(c) *Odor.* Terpene-like.
(d) *Specific gravity at 20 °C.* 0.70 to 0.80.
(e) *Boiling point ( °C).* 73.
\[T.D. TTB-140, [81 FR 59462](https://www.federalregister.gov/citation/81-FR-59462), Aug. 30, 2016]
#### § 21.109 Gasoline.
(a) *Distillation range.* When 100 mL of gasoline are distilled, none shall distill below 90 °F. Not more than 5 mL shall be collected below 140 °F., and not less than 50 mL shall distill below 230 °F.
(b) *Odor.* Characteristic odor.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.110 Gasoline, unleaded.
Conforms to specifications as established by the American Society for Testing and Materials (ASTM) in the 1980 Annual Book of ASTM Standards, Part 23, page 229, Standard No. D 439-79. Any of the “seasonal and geographical” volatility classes for unleaded gasoline are considered suitable as a denaturant. (For incorporation by reference, see [§ 21.6(b)](/current/title-27/section-21.6#p-21.6\(b\)).)
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.111 \[Reserved]
#### § 21.112 Heptane.
(a) *Distillation range.* No distillate should come over below 200 °F. and none above 211 °F.
(b) *Odor.* Characteristic odor.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.112-T1 Hexane (mixed isomers).
(a) *General.* Minimum 55 percent *n*-hexane.
(b) *Distillation range.* No distillate should come over below 150 °F and none above 160 °F.
(c) *Odor.* Characteristic odor.
\[T.D. TTB-140, [81 FR 59462](https://www.federalregister.gov/citation/81-FR-59462), Aug. 30, 2016]
#### § 21.112-T2 *n*-Hexane.
(a) *General.* Minimum 97 percent purity.
(b) *Distillation range.* No distillate should come over below 150 °F and none above 160 °F.
(c) *Odor.* Characteristic odor.
\[T.D. TTB-140, [81 FR 59462](https://www.federalregister.gov/citation/81-FR-59462), Aug. 30, 2016]
#### § 21.112-T3 High octane denaturant blend.
(a) *API Gravity at 60 °F.* 40 to 65.
(b) *Reid Vapor Pressure (PSI).* 6 to 15.
(c) *Isopropyl alcohol.* 24 to 40 percent volume.
(d) *Methyl alcohol.* 1.6 to 9.6 percent volume.
(e) *Diisopropyl ether (DIPE).* 4 to 12 percent volume.
(f) *tert-Butyl alcohol.* 4 to 12 percent volume.
(g) *Iso-pentane.* 4 to 9 percent volume.
(h) *Pentane.* 4 to 9 percent volume.
(i) *Pentene.* 0 to 2.4 percent volume.
(j) *Hexane.* 2 to 6 percent volume.
(k) *Heptane.* 1 to 3 percent volume.
(l) *Sulfur (ppm).* 0 to 120.
(m) *Benzene (% vol.).* 0 to 1.1.
(n) *Distillation ( °F):*
(i) *10 percent.* 80 to 168.
(ii) *50 percent.* 250.
(iii) *End point distillation.* 437.
\[T.D. TTB-140, [81 FR 59462](https://www.federalregister.gov/citation/81-FR-59462), Aug. 30, 2016]
#### § 21.113 Isopropyl alcohol.
*Specific gravity at 15.56 °/15.56 °C.* 0.810 maximum.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.114 Kerosene.
(a) *Distillation range.* (For applicable ASTM method, see 1980 Annual Book of ASTM Standards, Part 25, page 395, Standard No. D 3699-78 for burner fuel; see Part 23, page 849, Standard Nos. D 1655-80a for aviation turbine fuels and D 86-78 for distillation of petroleum products; for incorporation by reference, see [§ 21.6(b)](/current/title-27/section-21.6#p-21.6\(b\)).) No distillate should come over below 340 °F. and none above 570 °F.
(b) *Flash point.* 115 °F. minimum.
(c) *Odor.* Characteristic odor.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.115 Kerosene (deodorized).
(a) *Distillation range.* No distillate should come over below 340 °F. and none above 570 °F.
(b) *Flash point.* 155 °F. minimum.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.115-T1 Lemon oil (Citrus limonium).
(a) *Specific gravity at 25 °C.* 0.850 to 0.860.
(b) *Refractive index at 20 °C.* 1.4570 to 1.4580.
(c) *Optical rotation at 20 °C.* +55° to +65°.
(d) *Terpene content (as limonene).* 65 percent minimum.
\[T.D. TTB-140, [81 FR 59462](https://www.federalregister.gov/citation/81-FR-59462), Aug. 30, 2016]
#### § 21.115-T2 L(-)-Carvone.
(a) *Specific gravity at 25 °C.* 0.955 to 0.965.
(b) *Refractive index at 20 °C.* 1.495 to 1.500.
(c) *Angular rotation.* -57° to -62°.
(d) *Assay.* Not less than 97.0 percent.
\[T.D, TTB-140, [81 FR 59462](https://www.federalregister.gov/citation/81-FR-59462), Aug. 30, 2016]
#### § 21.116 Methyl alcohol.
*Specific gravity at 15.56 °/15.56 °C.* 0.810 maximum.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.117 Methyl isobutyl ketone.
(a) *Acidity (as acetic acid).* 0.02 percent by weight, maximum.
(b) *Color.* Colorless.
(c) *Distillation range.* (For applicable ASTM method, see 1980 Annual Book of ASTM Standards, Part 29, page 147, Standard No. D 1153-77; for incorporation by reference, see [§ 21.6(b)](/current/title-27/section-21.6#p-21.6\(b\)).) No distillate should come over below 111 °C. and none above 117 °C.
(d) *Odor.* Characteristic odor.
(e) *Specific gravity at 20 °/20 °C.* 0.799 to 0.804.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.118 Methyl *n*-butyl ketone.
(a) *Acidity (as acetic acid).* 0.02 percent by weight, maximum.
(b) *Color.* Colorless.
(c) *Odor.* Characteristic odor.
(d) *Refractive index at 20 °C.* 1.396 to 1.404.
(e) *Specific gravity at 20 °/20 °C.* 0.800 to 0.835.
(f) *Distillation range.* No distillate should come over below 123 °C. and none above 129 °C.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.118-T1 Methyl tertiary butyl ether.
(a) *Purity.* ≥ 97.0 percent.
(b) *Color.* Clear, colorless.
(c) *Odor.* Turpentine-like.
(d) *Specific Gravity at 20 °C.* 0.70 to 0.80.
(e) *Boiling Point ( °C).* 55.
\[T.D. TTB-140, [81 FR 59462](https://www.federalregister.gov/citation/81-FR-59462), Aug. 30, 2016]
#### § 21.118-T2 Naphtha.
(a) *API Gravity at 60 °F.* 30 to 85.
(b) *Reid Vapor Pressure (PSI).* 8 maximum.
(c) *Specific Gravity at 20 °C.* 0.70 to 0.80.
(d) *Distillation ( °F):*
(i) *I.B.P.* 85 maximum.
(ii) *10 percent.* 130 maximum.
(iii) *50 percent.* 250 maximum.
(iv) *90 percent.* 340 maximum.
(e) *End point distillation.* 380 maximum.
(f) *Copper corrosion.* One (1).
(g) *Sabolt color.* 28 minimum.
\[T.D. TTB-140, [81 FR 59462](https://www.federalregister.gov/citation/81-FR-59462), Aug. 30, 2016]
#### § 21.118-T3 Natural gasoline.
Natural gasoline is a mixture of various alkanes including butane, pentane, and hexane hydrocarbons extracted from natural gas. It has a distillation range wherein no more than 10 percent by volume of the sample may distill below 97 °F; at least 50 percent by volume shall distill at or below 156 °F; and at least 90 percent by volume shall distill at or below 209 °F.
\[T.D. TTB-140, [81 FR 59462](https://www.federalregister.gov/citation/81-FR-59462), Aug. 30, 2016]
#### § 21.119 Nicotine solution.
(a) *Composition.* Five gallons of an aqueous solution containing 40 percent nicotine; 3.6 avoirdupois ounces of methylene blue, U.S.P.; water sufficient to make 100 gallons.
(b) *Color.* One mL of the nicotine solution (previously agitated in the presence of air) is measured into 100 mL of water and thoroughly mixed. Fifty mL of this colored solution is compared, using Nessler tubes, with 50 mL of a standard color solution containing 5 grams of CuSO4·5H2 O, C.P. in 100 mL of water. The color intensity of the solution tested should be equal to or greater than that of the standard solution.
(c) *Nicotine content.* The above solution must contain not less than 1.88 percent of nicotine determined by the following process: 20 mL of the solution are measured into a 500 mL Kjeldahl flask provided with a suitable bulb tube, 50 mL of 0.1 N NaOH added and the mixture distilled in a current of steam until the distillate is no longer alkaline (about 500 mL). The distillate is then titrated with 0.1 N H2SO4 using rosolic acid or methyl red as indicator. Not less than 23.2 mL should be required for neutralization.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.120 Nitropropane, mixed isomers of.
(a) *Nitropropane content.* A minimum of 94 percent by weight.
(b) *Total nitroparaffin content.* A minimum of 99 percent by weight.
(c) *Distillation range.* 119° to 113 °C.
(d) *Specific gravity at 20°/20 °C.* 0.992 to 1.003.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.121 Peppermint oil, Terpeneless.
(a) *Specific gravity at 25 °C.* 0.890 to 0.910.
(b) *Refractive index at 20 °C.* 1.455 to 1.465.
(c) *Esters as menthyl acetate.* 5 percent minimum.
(d) *Menthol (free and esters).* 5 percent minimum.
\[T.D. TTB-140, [81 FR 59462](https://www.federalregister.gov/citation/81-FR-59462), Aug. 30, 2016]
#### § 21.122 Potassium Hydroxide.
(a) *Color.* White or yellow.
(b) *Specific gravity at 20 °C.* 1.95 to 2.10.
(c) *Melting point.* 360 °C.
(d) *Boiling point.* 1320 °C.
(e) *pH (0.1M solution).* 13.5.
\[T.D. TTB-140, [81 FR 59462](https://www.federalregister.gov/citation/81-FR-59462), Aug. 30, 2016]
#### § 21.123 Pyronate.
Pyronate is a product of the destructive distillation of hardwood meeting the following requirements:
(a) *Acidity (as acetic acid).* Not more than 0.1 percent by weight, determined as follows:
Add 5.0 mL sample to 100 mL distilled water in an Erlenmeyer flask and titrate with 0.1 N NaOH to a bromthymol blue endpoint.
(b) *Color.* The color shall be no darker than the color produced by 2.0 grams of potassium dichromate in 1 liter of water. The comparision shall be made in 4-ounce oil sample bottles viewed crosswise.
(c) *Distillation range.* When 100 mL are distilled not more than 5 mL shall distill below 70 °C., not less than 50 mL below 160 °C., and not less than 90 mL below 205 °C.
Note.
Any material submitted as pyronate must agree in color, odor, taste and denaturing value with a standard sample furnished by the Alcohol and Tobacco Tax and Trade Bureau to chemists authorized to examine samples of denaturants.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.124 Quassin.
(a) Quassin is the bitter principle of quassia wood (occurring as a mixture of two isomeric forms). It shall be a good commercial grade of purified amorphous quassin, standardized as to bitterness.
(b) *Bitterness.* An aqueous solution of quassin shall be distinctly bitter at a 1 to 250,000 dilution. To test: Dissolve 0.1 gram of quassin in 100 mL of 95 percent alcohol, then dilute 4 mL of the solution to 1,000 mL with distilled water, mix well and taste.
(c) *Identification test.* Dissolve about 0.5 gram of quassin in 10 mL of 95 percent alcohol and filter. To 5 mL of the filtrate, add 5 mL of concentrated hydrochloric acid and 1 mg of phloroglucinol and mix well. A red color develops.
(d) *Optical assay.* When 1 gram of quassin (in solution in a small amount of 95 percent alcohol) is dissolved in 10,000 mL of water, the absorbance of the solution in a 1 cm cell at a wavelength of 258 millimicrons shall not be less than 0.400.
(e) *Solubility.* When 0.5 gram of quassin is added to 25 mL of 190 proof alcohol, it shall dissolve completely.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.124-T Raffinate.
(a) *API Gravity at 60 °F.* 30 to 85.
(b) *Reid Vapor Pressure (PSI).* 5 to 11.
(c) *Octane (R+M/2).* 66 to 70.
(d) *Distillation ( °F):*
(i) *10 percent.* 120 to 150.
(ii) *50 percent.* 144 to 180.
(iii) *90 percent.* 168 to 200.
(iv) *End point distillation.* 216 to 285.
\[T.D. TTB-140, [81 FR 59462](https://www.federalregister.gov/citation/81-FR-59462), Aug. 30, 2016]
#### § 21.125 Rubber hydrocarbon solvent.
(a) Rubber hydrocarbon solvent is a petroleum derivative.
(b) *Distillation range.* When 10 percent of the sample has been distilled into a graduated receiver, the thermometer shall not read more than 170 °F. nor less than 90 °F. When 90 percent has been recovered in the receiver the thermometer shall not read more than 250 °F.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001; T.D. TTB-140, [81 FR 59462](https://www.federalregister.gov/citation/81-FR-59462), Aug. 30, 2016]
#### § 21.126 Safrole.
(a) *Congealing point.* 10.0° to 11.2 °C.
(b) *Refractive index at 20 °C.* 1.5363 to 1.5385.
(c) *Specific gravity at 15 °/15 °C.* 1.100 to 1.107.
(d) *Odor.* Characteristic odor.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.127 Shellac (refined).
(a) *Arsenic content.* Not more than 1.4 parts per million as determined by the Gutzeit Method (AOAC method 25.020; for incorporation by reference, see [§ 21.6(c)](/current/title-27/section-21.6#p-21.6\(c\))).
(b) *Color.* White or orange.
(c) *Rosin content.* None when tested by the following method: Add 20 mL of absolute alcohol or glacial acetic acid (m. p. 13° to 15 °C.) to 2 grams of the shellac and thoroughly dissolve. Add 100 mL of petroleum ether and mix thoroughly. Add approximately 2 liters of water and separate a portion of the ether layer (at least 50 mL) and filter if cloudy. Evaporate the petroleum ether and test as follows: Solution A—5 mL of phenol dissolved in 10 mL of carbon tetrachloride. Solution B—1 mL of bromine dissolved in 4 mL of carbon tetrachloride. To the residue obtained above add 2 mL of Solution A and transfer the mixture to a porcelain spot plate, filling one cavity. Immediately fill an adjacent cavity with solution B. Cover the plate with a watch glass and observe any color formation in Solution A. A decided purple or deep indigo blue color is an indication of the presence of rosin.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.128 \[Reserved]
#### § 21.129 Spearmint oil, terpeneless.
(a) *Carvone content.* Not less than 85 percent by weight.
(b) *Refractive index at 20 °C.* 1.4930 to 1.4980.
(c) *Specific gravity at 25 °/25 °C.* 0.949 to 0.956.
(d) *Odor.* Characteristic odor.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.130 Spike lavender oil, natural.
(a) *Alcohol content (as borneol).* Not less than 30 percent by weight.
(b) *Esters (as bornyl acetate).* Not less than 1.5 percent by weight.
(c) *Refractive index at 20 °C.* 1.4630 to 1.4680.
(d) *Specific gravity at 25 °/25 °C.* 0.893 to 0.909.
(e) *Odor.* Characteristic odor.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.130-T Straight run gasoline.
(a) *General.* Straight run gasoline is a mixture consisting predominantly (greater than 60 percent by volume) of C4, C5, C6, C7 and/or C8 hydrocarbons, and is either:
(1) A petroleum distillate coming straight from an atmospheric distillation unit without being cracked or reformed, or
(2) A condensate coming directly from an oil/gas recovery operation.
(b) *API gravity.* 72° minimum, 85° maximum.
(c) *Reid vapor pressure (PSI).* 15 maximum.
(d) *Sulfur.* 120 ppm maximum.
(e) *Benzene.* 1.1 percent by volume maximum.
(f) *Distillation ( °F):*
(1) *10 percent.* 97 minimum, 158 maximum.
(2) *50 percent.* 250 maximum.
(3) *Final boiling point.* 437 maximum.
\[T.D. TTB-140, [81 FR 59462](https://www.federalregister.gov/citation/81-FR-59462), Aug. 30, 2016]
#### § 21.131 Sucrose octaacetate.
(a) Sucrose octaacetate is an organic acetylation product occurring as a white or cream-colored powder having an intensely bitter taste.
(b) *Free acid (as acetic acid).* Maximum percentage 0.15 by weight when determined by the following procedure: Dissolve 1.0 gram of sample in 50 mL of neutralized ethyl alcohol (or S.D.A. No. 3-A, No. 3-C, or No. 30) and titrate with 0.1 N sodium hydroxide using phenolphthalein indicator.
Percent acid as acetic acid = mL NaOH used × 0.6 / weight of sample
(c) *Insoluble matter.* 0.30 percent by weight maximum.
(d) *Melting point.* Not less than 78.0 °C.
(e) *Purity.* Sucrose octaacetate 98 percent minimum by weight when determined by the following procedure: Transfer a weighed 1.50 grams sample to a 500 mL Erlenmeyer flask containing 100 mL of neutral ethyl alcohol (or S.D.A. No. 3-A, No. 3-C, or No. 30) and exactly 50.0 mL of 0.5 N sodium hydroxide. Reflux for 1 hour on a steam bath, cool and titrate the excess sodium hydroxide with 0.5 N sulfuric acid using phenolphthalein indicator.
Percent sucrose octaacetate = (mL NaOH − mL H2SO4) × 4.2412 / weight of sample
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
#### § 21.132 Toluene.
(a) *Specific Gravity at 15.56°/15.56 °C.* 0.80 to 0.90.
(b) *Boiling point ( °C).* 110.6.
(c) *Distillation range ( °C).* Not more than 1 percent by volume should distill below 109, and not less than 99 percent by volume below 112.
(d) *Odor.* Characteristic odor.
\[T.D. TTB-140, [81 FR 59463](https://www.federalregister.gov/citation/81-FR-59463), Aug. 30, 2016]
#### § 21.133 Vinegar.
(a) *Vinegar, 90-grain:*
*Acidity (as acetic acid).* 9.0 percent by weight, minimum.
(b) *Vinegar, 60-grain:*
*Acidity (as acetic acid).* 6.0 percent by weight, minimum.
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983. Redesignated by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001]
## Subpart F—Uses of Specially Denatured Alcohol and Specially Denatured Rum
#### § 21.141 List of products and processes using specially denatured alcohol and rum, and formulas authorized therefor.
This section lists, alphabetically by product or process, formulas of specially denatured alcohol authorized for use in those products or processes, and lists the code numbers assigned thereto. Specially denatured rum, as well as specially denatured alcohol, may be used in tobacco sprays and flavors, Code No. 460, under Formula No. 4.
Uses of Specially Denatured Alcohol 1
| Product or process | Code No. | Formulas authorized |
| ----------------------------------------------------------------------------------------------------------------------------------- | -------- | ------------------------------------------------------------------ |
| Acetaldehyde | 551 | 1, 2-B, 29. |
| Acetic acid | 512 | 29, 35-A. |
| Adhesives and binders | 036 | 1, 3-A, 3-C, 23-A, 30. |
| Aldehydes, miscellaneous | 552 | 1, 2-B, 29. |
| Alkaloids (processing) | 344 | 1, 2-B, 3-A, 3-C, 13-A, 23-A, 30, 32, 35-A. |
| Animal feed supplements | 910 | 35-A. |
| Antibiotics (processing) | 343 | 1, 2-B, 3-A, 3-C, 13-A, 23-A, 30, 32, 35-A. |
| Antifreeze, proprietary | 760 | 1. |
| Antiseptic solutions, U.S.P. or N.F | 244 | 23-A, 37, 38-B, 38-F. |
| Bath preparations | 142 | 1, 3-A, 3-C, 23-A, 30, 36, 38-B, 39-B, 39-C, 40, 40-A, 40-B, 40-C. |
| Bay rum | 112 | 23-A, 37, 38-B, 39-B, 39-D, 40, 40-A, 40-B, 40-C. |
| Biocides, miscellaneous | 410 | 1, 3-A, 3-C, 23-A, 23-H, 30, 37, 38-B, 39-B, 40, 40-A, 40-B, 40-C. |
| Blood and blood products (processing) | 345 | 1, 3-A, 3-C, 13-A, 23-A, 30. |
| Brake fluids | 720 | 1, 3-A, 3-C. |
| Candy glazes | 015 | 13-A, 23-A, 35-A, 45. |
| Cellulose coatings | 011 | 1, 3-A, 3-C, 23-A, 30. |
| Cellulose compounds (dehydration) | 311 | 1, 2-B, 3-A, 3-C, 32. |
| Cellulose intermediates | 034 | 1, 3-A, 3-C, 13-A, 19, 23-A, 32. |
| Chemicals (miscellaneous) | 579 | 1, 2-B, 3-A, 3-C, 13-A, 29, 30, 32, 36. |
| Cleaning solutions | 450 | 1, 3-A, 3-C, 23-A, 23-H, 30, 36, 39-B, 40, 40-A, 40-B, 40-C. |
| Coatings, miscellaneous | 016 | 1, 3-A, 3-C, 23-A. |
| Collodions, industrial | 034 | 1, 3-A, 3-C, 13-A, 19, 23-A, 32. |
| Collodion, U.S.P. | 241 | 13-A, 19, 32. |
| Colognes | 122 | 38-B, 39-B, 39-C, 40, 40-A, 40-B, 40-C. |
| Crude drugs (processing) | 341 | 1, 2-B, 3-A, 3-C, 23-A, 30. |
| Cutting oils | 730 | 1, 3-A, 3-C. |
| Dehydration products, miscellaneous | 315 | 1, 2-B, 3-A, 3-C. |
| Dentifrices | 131 | 31-A, 37, 38-B, 38-D. |
| Deodorants (body) | 114 | 23-A, 38-B, 39-B, 39-C, 40, 40-A, 40-B, 40-C. |
| Detergents, household | 450 | 1, 3-A, 3-C, 23-A, 23-H, 30, 36, 39-B, 40, 40-A, 40-B, 40-C. |
| Detergents, industrial | 440 | 1, 3-A, 3-C, 23-A, 30. |
| Detonators | 574 | 1. |
| Disinfectants | 410 | 1, 3-A, 3-C, 23-A, 23-H, 30, 37, 38-B, 39-B, 40, 40-A, 40-B, 40-C. |
| Drugs and medicinal chemicals | 575 | 1, 2-B, 3-A, 3-C, 13-A, 29, 30, 32. |
| Drugs, miscellaneous (processing) | 349 | 1, 2-B, 3-A, 3-C, 13-A, 23-A, 30, 35-A, 38-B. |
| Duplicating fluids | 485 | 1, 3-A, 3-C, 30. |
| Dyes and intermediates | 540 | 1, 2-B, 3-A, 3-C, 29, 36. |
| Dyes and intermediates (processing) | 351 | 1, 2-B, 3-A, 3-C. |
| Dye solutions, miscellaneous | 482 | 1, 3-A, 3-C, 23-A, 30. |
| Embalming fluids, etc | 420 | 1, 3-A, 3-C, 23-A. |
| Esters, ethyl (miscellaneous) | 523 | 1, 2-B, 13-A, 29, 32, 35-A. |
| Ether, ethyl | 561 | 1, 2-B, 13-A, 29, 32. |
| Ethers, miscellaneous | 562 | 1, 2-B, 13-A, 29, 32. |
| Ethyl acetate | 521 | 1, 2-B, 29, 35-A. |
| Ethylamines | 530 | 1, 2-B, 3-A, 3-C, 29, 36. |
| Ethyl chloride | 522 | 1, 2-B, 29, 32. |
| Ethylene dibromide | 571 | 1, 2-B, 29, 32. |
| Ethylene gas | 572 | 1, 2-B, 29, 32. |
| Explosives | 033 | 1, 2-B, 3-A, 3-C. |
| External pharmaceuticals, not U.S.P. or N.F | 210 | 23-A, 23-H, 36, 37, 38-B, 38-F, 39-B, 40, 40-A, 40-B, 40-C. |
| External pharmaceuticals, miscellaneous, U.S.P. or N.F | 249 | 23-A, 25, 25-A, 38-B, 40-B. |
| Fluid uses, miscellaneous | 750 | 1, 3-A, 3-C, 23-A, 30. |
| Food products, miscellaneous (processing) | 332 | 1, 2-B, 3-A, 3-C, 13-A, 23-A, 30, 32, 35-A. |
| Fuel uses, miscellaneous | 630 | 1, 3-A, 3-C, 28-A. |
| Fuels, airplane and supplementary | 612 | 1, 3-A, 3-C, 28-A. |
| Fuels, automobile and supplementary | 611 | 1, 3-A, 3-C, 28-A. |
| Fuels, proprietary heating | 620 | 1, 3-A, 3-C, 28-A. |
| Fuels, rocket and jet | 613 | 1, 3-A, 3-C, 28-A. |
| Fungicides | 410 | 1, 3-A, 3-C, 23-A, 23-H, 30, 37, 38-B, 39-B, 40, 40-A, 40-B, 40-C. |
| Glandular products (processing) | 342 | 1, 2-B, 3-A, 3-C, 13-A, 23-A, 30, 32, 35-A. |
| Hair and scalp preparations | 111 | 23-A, 23-H, 37, 38-B, 39-B, 39-C, 39-D, 40, 40-A, 40-B, 40-C. |
| Hormones (processing) | 342 | 1, 2-B, 3-A, 3-C, 13-A, 23-A, 30, 32, 35-A. |
| Incense | 470 | 3-A, 3-C, 37, 38-B, 39-B, 39-C, 40, 40-A, 40-B, 40-C. |
| Inks | 052 | 1, 3-A, 3-C, 13-A, 23-A, 30, 32, 35-A, 40-B. |
| Insecticides | 410 | 1, 3-A, 3-C, 23-A, 23-H, 30, 37, 38-B, 39-B, 40, 40-A, 40-B, 40-C. |
| Iodine solutions (including U.S.P. and N.F. tinctures) | 230 | 25, 25-A. |
| Laboratory reagents (for sale) | 811 | 3-A, 3-C, 30. |
| Laboratory uses, general (own use only) | 810 | 3-A, 3-C, 30. |
| Lacquer thinners | 042 | 1, 23-A. |
| Liniments, U.S.P. or N.F | 243 | 38-B. |
| Lotions and creams (body, face, and hand) | 113 | 23-A, 23-H, 31-A, 37, 38-B, 39-B, 39-C, 40, 40-A, 40-B, 40-C. |
| Medicinal chemicals (processing) | 344 | 1, 2-B, 3-A, 3-C, 13-A, 23-A, 30, 32, 35-A. |
| Miscellaneous chemicals (processing) | 358 | 1, 2-B, 3-A, 3-C, 13-A, 23-A, 30, 35-A. |
| Miscellaneous products (processing) | 359 | 1, 2-B, 3-A, 3-C, 13-A, 23-A, 30, 35-A. |
| Mouth washes | 132 | 37, 38-B, 38-D, 38-F. |
| Organo-silicone products | 576 | 2-B, 3-A, 3-C, 30. |
| Pectin (processing) | 331 | 1, 2-B, 3-A, 3-C, 13-A, 23-A, 30, 35-A. |
| Perfume materials (processing) | 352 | 1, 2-B, 3-A, 3-C, 13-A, 30. |
| Perfumes and perfume tinctures | 121 | 38-B, 39-B, 39-C, 40, 40-A, 40-B, 40-C. |
| Petroleum products | 320 | 1, 2-B, 3-A, 3-C. |
| Photoengraving dyes and solutions | 481 | 1, 3-A, 3-C, 13-A, 30, 32. |
| Photographic chemicals (processing) | 353 | 1, 2-B, 3-A, 3-C, 13-A, 30. |
| Photographic film and emulsions | 031 | 1, 2-B, 3-A, 3-C, 13-A, 19, 30, 32. |
| Pill and tablet manufacture | 349 | 1, 2-B, 3-A, 3-C, 13-A, 23-A, 30, 35-A, 38-B. |
| Plastics, cellulose | 021 | 1, 2-B, 3-A, 3-C, 13-A, 30. |
| Plastics, non-cellulose (including resins) | 022 | 1, 2-B, 3-A, 3-C, 13-A, 30. |
| Polishes | 051 | 1, 3-A, 3-C, 30. |
| Preserving solutions | 430 | 1, 3-A, 3-C, 13-A, 23-A, 30, 32, 37, 38-B, 44. |
| Product development and pilot plant (own use only) | 812 | All formulas. |
| Proprietary solvents | 041 | 1, 3-A. |
| Refrigerating uses | 740 | 1, 3-A, 3-C, 23-A, 30. |
| Resin coatings, natural | 014 | 1, 23-A. |
| Resin coatings, synthetic | 012 | 1, 3-A, 3-C, 23-A, 30. |
| Resins, synthetic | 590 | 3-A, 3-C, 29, 30, 35-A. |
| Room deodorants | 470 | 3-A, 3-C, 37, 38-B, 39-B, 39-C, 40, 40-A, 40-B, 40-C. |
| Rosin (processing) | 354 | 1, 3-A, 3-C, |
| Rotogravure dyes and solutions | 481 | 1, 3-A, 3-C, 13-A, 30, 32. |
| Rubber (latex) (processing) | 355 | 1, 3-A, 3-C. |
| Rubber, synthetic | 580 | 29, 32. |
| Rubbing alcohol | 220 | 23-H. |
| Scientific instruments | 710 | 1, 3-A, 3-C. |
| Shampoos | 141 | 1, 3-A, 3-C, 23-A, 31-A, 36, 38-B, 39-B, 40, 40-A, 40-B, 40-C. |
| Shellac coatings | 013 | 1, 23-A. |
| Soaps, industrial | 440 | 1, 3-A, 3-C, 23-A, 30. |
| Soaps, toilet | 142 | 1, 3-A, 3-C, 23-A, 30, 36, 38-B, 39-B, 39-C, 40, 40-A, 40-B, 40-C. |
| Sodium ethylate, anhydrous (restricted) | 524 | 2-B. |
| Sodium hydrosulfite (dehydration) | 312 | 1, 2-B, 3-A, 3-C. |
| Soldering flux | 035 | 1, 3-A, 3-C, 23-A, 30. |
| Solutions, miscellaneous | 485 | 1, 3-A, 3-C, 13-A, 23-A, 30, 32, 35-A, 40-B, 40-C. |
| Solvents and thinners (other than proprietary solvents or special industrial solvents) | 042 | 1, 23-A, 30. |
| Solvents, special (restricted sale) | 043 | 1, 3-A, 3-C. |
| Stains (wood) | 053 | 1, 3-A, 3-C, 23-A, 30. |
| Sterilizing solutions | 430 | 1, 3-A, 3-C, 13-A, 23-A, 30, 32, 37, 38-B, 44. |
| Theater sprays | 470 | 3-A, 3-C, 37, 38-B, 39-B, 39-C, 40, 40-A, 40-B, 40-C. |
| Tobacco sprays and flavors | 460 | 4. |
| Toilet waters | 122 | 38-B, 39-B, 39-C, 40, 40-A, 40-B, 40-C. |
| Transparent sheetings | 032 | 1, 2-B, 3-A, 3-C, 13-A, 23-A. |
| Unclassified uses 2 | 900 | 1, 3-A, 3-C. |
| Vaccine (processing) | 343 | 1, 2-B, 3-A, 3-C, 13-A, 23-A, 30, 32, 35-A. |
| Vinegar | 511 | 18, 29, 35-A. |
| Vitamins (processing) | 342 | 1, 2-B, 3-A, 3-C, 13-A, 23-A, 30, 32, 35-A. |
| Xanthates | 573 | 1, 2-B, 29. |
| Yeast (processing) | 342 | 1, 2-B, 3-A, 3-C, 13-A, 23-A, 30, 32, 35-A. |
| | | |
| --- | --- | --- |
| 1 Other products or processes may be authorized under [§ 21.31(c)](/current/title-27/section-21.31#p-21.31\(c\)). | | |
| 2 Persons desiring other formulas for this use should indicate the fact in the space provided for this purpose on TTB Form 5150.19. | | |
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended by T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985; T.D. ATF-435, [66 FR 5475](https://www.federalregister.gov/citation/66-FR-5475), Jan. 19, 2001; T.D. ATF-442, [66 FR 11854](https://www.federalregister.gov/citation/66-FR-11854), Mar. 1, 2001; T.D. TTB-140, [81 FR 59463](https://www.federalregister.gov/citation/81-FR-59463), Aug. 30, 2016]
## Subpart G—Denaturants Authorized for Denatured Spirits
#### § 21.151 List of denaturants authorized for denatured spirits.
Following is an alphabetical listing of denaturants authorized for use in denatured spirits:
Denaturants Authorized for Completely Denatured Alcohol (C.D.A), Specially Denatured Alcohol (S.D.A.), and Specially Denatured Rum (S.D.R.)
\| Acetaldehyde | S.D.A. 29. |
\| Acetone, U.S.P | S.D.A. 23-A, 23-H. |
\| Acetaldol | C.D.A. 18. |
\| Alkylate | C.D.A. 20. |
\| Almond oil, bitter, N.F.X | S.D.A. 38-B. |
\| Alpha Terpineol | S.D.A. 38-B. |
\| Ammonia, aqueous | S.D.A. 36. |
\| Ammonia solution, strong, N.F | S.D.A. 36. |
\| Anethole, N.F | S.D.A. 38-B. |
\| Anise oil, N.F | S.D.A. 38-B. |
\| Bay oil (myrcia oil), N.F.XI | S.D.A. 38-B, 39-D. |
\| Benzaldehyde, N.F | S.D.A. 38-B. |
\| Bergamot oil, N.F.XI | S.D.A. 38-B. |
\| Boric acid, N.F | S.D.A. 38-F. |
\| Brucine alkaloid | S.D.A. 40. |
\| Brucine sulfate, N.F.IX | S.D.A. 40. |
\| *n*-Butyl alcohol | S.D.A. 44. |
\| *tert*-Butyl alcohol | S.D.A. 39-B, 40, 40-A, 40-B, 40-C. |
\| Camphor, U.S.P | S.D.A. 38-B. |
\| Caustic soda, liquid | S.D.A. 36. |
\| Cedar leaf oil, U.S.P.XIII | S.D.A. 38-B. |
\| Chlorothymol, N.F.XII | S.D.A. 38-B, 38-F. |
\| Cinnamic aldehyde (cinnamaldehyde), N.F.IX | S.D.A. 38-B. |
\| Cinnamon oil, N.F | S.D.A. 38-B. |
\| Citronella oil, natural | S.D.A. 38-B. |
\| Clove oil, N.F | S.D.A. 38-B. |
\| Coal tar, U.S.P | S.D.A. 38-B. |
\| Cornmint oil | S.D.A. 38-B. |
\| Cyclohexane | S.D.A. 3-A. |
\| Denatonium benzoate, N.F. | S.D.A. 1, 40-B. |
\| Diethyl phthalate | S.D.A. 39-B, 39-C. |
\| Distilled lime oil | S.D.A. 38-B. |
\| Ethyl acetate | C.D.A. 35; S.D.A. 29, 35-A. |
\| Ethyl ether | S.D.A. 13-A, 19, 32. |
\| Ethyl tertiary butyl ether | C.D.A. 20. |
\| Eucalyptol, N.F.XII | S.D.A. 37, 38-B. |
\| Eucalyptus oil, N.F | S.D.A. 38-B. |
\| Eugenol, U.S.P | S.D.A. 38-B. |
\| Formaldehyde solution, U.S.P | S.D.A. 38-D. |
\| Gasoline | C.D.A. 18, 19; S.D.A. 28-A. |
\| Gasoline, unleaded | C.D.A. 18, 19, 20; S.D.A 28-A. |
\| Glycerin (Glycerol), U.S.P | S.D.A. 31-A. |
\| Guaiacol, N.F.X | S.D.A. 38-B. |
\| Heptane | C.D.A. 18, 19; S.D.A. 2-B, 28-A. |
\| Hexane | S.D.A. 2-B. |
\| *n*-Hexane | S.D.A. 2-B. |
\| High octane denaturant blend | C.D.A. 20. |
\| Hydrochloric acid, N.F | S.D.A. 38-F. |
\| Iodine, U.S.P | S.D.A. 25, 25-A. |
\| Isopropyl alcohol | S.D.A. 3-C. |
\| Kerosene | C.D.A. 18, 19, 20. |
\| Kerosene (deodorized) | C.D.A. 18, 19, 20. |
\| L(-)-Carvone | S.D.A. 38-B. |
\| Lavender oil, N.F | S.D.A. 38-B. |
\| Lemon oil | S.D.A. 38-B. |
\| Menthol, U.S.P | S.D.A. 37, 38-B, 38-D, 38-F. |
\| Methyl alcohol | S.D.A. 1, 3-A, 30. |
\| Methylene blue, U.S.P | S.D.A. 4; S.D.R. 4. |
\| Methyl isobutyl ketone | C.D.A. 18, 19; S.D.A. 1, 23-H. |
\| Methyl *n*-butyl ketone | C.D.A. 18, 19; S.D.A. 1. |
\| Methyl salicylate, N.F | S.D.A. 38-B |
\| Methyl tertiary butyl ether | C.D.A. 20. |
\| Mustard oil, volatile (allyl isothiocyanate), U.S.P.XII | S.D.A. 38-B. |
\| Naphtha | C.D.A. 20. |
\| Natural gasoline | C.D.A. 20. |
\| Nicotine solution | S.D.A. 4; S.D.R. 4. |
\| Nitropropane, mixed isomers of | C.D.A. 18, 19; S.D.A. 1. |
\| Peppermint oil, N.F | S.D.A. 38-B. |
\| Peppermint oil, terpeneless | S.D.A. 38-B. |
\| Phenol, U.S.P | S.D.A. 38-B. |
\| Phenyl salicylate (salol), N.F.XI | S.D.A. 38-B. |
\| Pine needle oil, dwarf, N.F. | S.D.A. 38-B. |
\| Pine oil, N.F. | S.D.A. 38-B. |
\| Poloxamer 407, N.F. | S.D.A. 38-F. |
\| Polysorbate 80, N.F | S.D.A. 38-F. |
\| Potassium hydroxide | S.D.A. 36. |
\| Potassium iodide, U.S.P | S.D.A. 25, 25-A. |
\| Pyronate | C.D.A. 18. |
\| Quassin | S.D.A. 40. |
\| Quinine bisulfate, N.F.XI | S.D.A. 39-D. |
\| Quinine sulfate, U.S.P | S.D.A. 39-D. |
\| Raffinate | C.D.A. 20. |
\| Rosemary oil, N.F. XII | S.D.A. 38-B. |
\| Rubber hydrocarbon solvent | C.D.A. 18, 19, 20; S.D.A. 2-B, 28-A. |
\| Safrole | S.D.A. 38-B. |
\| Sassafras oil, N.F.XI | S.D.A. 38-B. |
\| Shellac (refined) | S.D.A. 45. |
\| Soap, hard, N.F.XI | S.D.A. 31-A. |
\| Sodium iodide, U.S.P | S.D.A. 25, 25-A. |
\| Sodium salicylate, U.S.P | S.D.A. 39-D. |
\| Spearmint oil, N.F | S.D.A. 38-B. |
\| Spearmint oil, terpeneless | S.D.A. 38-B. |
\| Spike lavender oil, natural | S.D.A. 38-B. |
\| Storax, U.S.P | S.D.A. 38-B. |
\| Straight run gasoline | C.D.A. 20. |
\| Sucrose octaacetate | S.D.A. 40-A. |
\| Thyme oil, N.F.XII | S.D.A. 38-B. |
\| Thymol, N.F | S.D.A. 37, 38-B, 38-F. |
\| Tolu balsam, U.S.P | S.D.A. 38-B. |
\| Toluene | C.D.A. 12-A; S.D.A. 2-B. |
\| Turpentine oil, N.F.XI | S.D.A. 38-B. |
\| Vinegar | S.D.A. 18. |
\| Zinc chloride, U.S.P | S.D.A. 38-F. |
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended by T.D. ATF-442, [66 FR 12854](https://www.federalregister.gov/citation/66-FR-12854), Mar. 1, 2001; T.D. TTB-140, [81 FR 59463](https://www.federalregister.gov/citation/81-FR-59463), Aug. 30, 2016; T.D. TTB-196, [89 FR 87940](https://www.federalregister.gov/citation/89-FR-87940), Nov. 6, 2024]
## Subpart H—Weights and Specific Gravities of Specially Denatured Alcohol
#### § 21.161 Weights and specific gravities of specially denatured alcohol.
The weight of one gallon of each formula of specially denatured alcohol at 15.56 °C. (60 °F.) is as listed in this section. The specific gravity of each formula of specially denatured alcohol at 15.56 °C./15.56 °C. (60 °F./60 °F.) in air is as listed in this section. (Weight of 1 gallon of water at 15.56 °C. (60 °F.) is 8.32823 pounds in air.)
Weights and Specific Gravities of Specially Denatured Alcohol 1
\[Slight deviations from this table may occur due to variations in specific gravities of authorized denaturants. Values for 190 proof determined experimentally in air. Other values calculated from these gravities.]
| S.D.A. Formula No. | Finished formula (gals) | 190 proof | | 192 proof | | 200 proof | |
| -------------------------------------------------------------------------------------------------------------------------------------- | ----------------------- | --------------------- | -------------- | --------------------- | -------------- | --------- | ------ |
| Wt./gal. in air (lbs) | Sp. gr. in air | Wt./gal. in air (lbs) | Sp. gr. in air | Wt./gal. in air (lbs) | Sp. gr. in air | | |
| 1 | 104.0 | 6.788 | 0.8151 | 6.756 | 0.8112 | 6.611 | 0.7938 |
| 2-B | 100.5 | 6.795 | .8159 | 6.762 | .8119 | 6.612 | .7939 |
| 3-A | 105.0 | 6.787 | .8149 | 6.755 | .8111 | 6.611 | .7938 |
| 3-C | 105.0 | 6.784 | .8146 | 6.752 | .8107 | 6.608 | .7935 |
| 4 | 100.8 | 6.823 | .8193 | 6.791 | .8154 | 6.640 | .7973 |
| 13-A | 109.7 | 6.740 | .8093 | 6.710 | .8057 | 6.572 | .7891 |
| 18 | 195.4 | 7.802 | .9368 | 7.785 | .9348 | 7.708 | .9255 |
| 19 | 197.9 | 6.468 | .7766 | 6.452 | .7747 | 6.375 | .7655 |
| 23-A | 107.9 | 6.788 | .8151 | 6.758 | .8115 | 6.619 | .7948 |
| 23-H | 109.45 | 6.785 | .8147 | 6.755 | .8111 | 6.617 | .7945 |
| 25 | 100.9 | 7.080 | .8501 | 7.047 | .8462 | 6.897 | .8282 |
| 25 2 | 100.9 | 7.083 | .8505 | 7.050 | .8465 | 6.900 | .8285 |
| 25-A | 102.5 | 7.119 | .8548 | 7.087 | .8510 | 6.939 | .8332 |
| 25-A 2 | 102.5 | 7.117 | .8546 | 7.085 | .8507 | 6.938 | .8331 |
| 28-A | 101.0 | 6.786 | .8148 | 6.753 | .8109 | 6.603 | .7929 |
| 29 | 100.76 | 6.808 | .8175 | 6.775 | .8135 | 6.624 | .7954 |
| 30 | 110.0 | 6.785 | .8147 | 6.755 | .8111 | 6.617 | .7945 |
| 31-A | 111.5 | 7.167 | .8606 | 7.138 | .8571 | 7.002 | .8408 |
| 32 | 104.8 | 6.769 | .8128 | 6.737 | .8089 | 6.593 | .7916 |
| 35-A 3 | 105.0 | 6.817 | .8185 | 6.785 | .8147 | 6.641 | .7974 |
| 35-A 4 | 104.25 | 6.826 | .8196 | 6.794 | .8158 | 6.649 | .7984 |
| 36 | 102.7 | 6.837 | .8209 | 6.804 | .8170 | 6.657 | .7993 |
| 37 | 100.9 | 6.794 | .8158 | 6.762 | .8119 | 6.612 | .7939 |
| 38-B | 101.3 | 6.804 | .8170 | 6.772 | .8131 | 6.622 | .7951 |
| 38-D | 102.7 | 6.863 | .8241 | 6.830 | .8201 | 6.682 | .8023 |
| 38-F | 100.9 | 6.828 | .8199 | 6.796 | .8160 | 6.646 | .7980 |
| 39-B | 102.7 | 6.857 | .8233 | 6.825 | .8195 | 6.677 | .8017 |
| 39-C | 101.0 | 6.819 | .8188 | 6.792 | .8155 | 6.642 | .7975 |
| 39-D | 101.3 | 6.819 | .8188 | 6.787 | .8149 | 6.637 | .7969 |
| 40 | 100.1 | 6.795 | .8159 | 6.762 | .8119 | 6.611 | .7938 |
| 40-A | 100.2 | 6.798 | .8163 | 6.765 | .8123 | 6.613 | .7941 |
| 40-B | 100.1 | 6.794 | .8158 | 6.761 | .8118 | 6.610 | .7937 |
| 40-C | 103.0 | 6.788 | .8151 | 6.756 | .8112 | 6.609 | .7936 |
| 44 | 110.0 | 6.790 | .8153 | 6.760 | .8117 | 6.622 | .7951 |
| 45 | 129.8 | 7.545 | .9060 | 7.520 | .9030 | 7.403 | .8889 |
| | | | | | | | |
| --- | --- | --- | --- | --- | --- | --- | --- |
| 1 Where alternate denaturants are permitted, the above weights are based on the first denaturant or combination listed in the formula. | | | | | | | |
| 2 With sodium iodide. | | | | | | | |
| 3 Calculated on the basis of 85 percent ethyl acetate. | | | | | | | |
| 4 Calculated on the basis of 100 percent ethyl acetate. | | | | | | | |
\[T.D. ATF-133, [48 FR 24673](https://www.federalregister.gov/citation/48-FR-24673), June 2, 1983, as amended by T.D. TTB-140, [81 FR 59463](https://www.federalregister.gov/citation/81-FR-59463), Aug. 30, 2016]
# Part 22 — DISTRIBUTION AND USE OF TAX-FREE ALCOHOL
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-22
Full text of 27 CFR Part 22 — DISTRIBUTION AND USE OF TAX-FREE ALCOHOL. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 22—DISTRIBUTION AND USE OF TAX-FREE ALCOHOL
#### Authority:
[26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5121](https://www.govinfo.gov/link/uscode/26/5121), [5123](https://www.govinfo.gov/link/uscode/26/5123), [5206](https://www.govinfo.gov/link/uscode/26/5206), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5271-5275](https://www.govinfo.gov/link/uscode/26/5271), [5311](https://www.govinfo.gov/link/uscode/26/5311), [5552](https://www.govinfo.gov/link/uscode/26/5552), [5555](https://www.govinfo.gov/link/uscode/26/5555), [6056](https://www.govinfo.gov/link/uscode/26/6056), [6061](https://www.govinfo.gov/link/uscode/26/6061), [6065](https://www.govinfo.gov/link/uscode/26/6065), [6109](https://www.govinfo.gov/link/uscode/26/6109), [6151](https://www.govinfo.gov/link/uscode/26/6151), [6806](https://www.govinfo.gov/link/uscode/26/6806), [7805](https://www.govinfo.gov/link/uscode/26/7805); [31 U.S.C. 9304](https://www.govinfo.gov/link/uscode/31/9304), [9306](https://www.govinfo.gov/link/uscode/31/9306).
#### Source:
T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985, unless otherwise noted.
#### Editorial Note:
Nomenclature changes to part 22 appear by T.D. ATF-435, [66 FR 5476](https://www.federalregister.gov/citation/66-FR-5476), Jan. 19, 2001 and T.D. ATF-463 and T.D. ATF-462, [66 FR 42733](https://www.federalregister.gov/citation/66-FR-42733), [42736](https://www.federalregister.gov/citation/66-FR-42736), Aug. 15, 2001.
## Subpart A—Scope
#### § 22.1 General.
The regulations in this part relate to tax-free alcohol and cover the procurement, storage, use, and recovery of tax-free alcohol.
#### § 22.2 Territorial extent.
This part applies to the several States of the United States and the District of Columbia.
#### § 22.3 Related regulations.
Regulations related to this part are listed below:
[27 CFR Part 19](/current/title-27/part-19)—Distilled Spirits Plants.
[27 CFR Part 26](/current/title-27/part-26)—Liquors and Articles from Puerto Rico and the Virgin Islands.
[27 CFR Part 27](/current/title-27/part-27)—Importation of Distilled Spirits, Wines and Beer.
[27 CFR Part 29](/current/title-27/part-29)—Stills and Miscellaneous Regulations.
[27 CFR Part 30](/current/title-27/part-30)—Gauging Manual.
[27 CFR Part 71](/current/title-27/part-71)—Rules of Practice in Permit Proceedings.
[31 CFR Part 225](/current/title-31/part-225)—Acceptance of Bonds Secured by Government Obligations in Lieu of Bonds with Sureties.
\[T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985, as amended by T.D. ATF-207, [50 FR 23682](https://www.federalregister.gov/citation/50-FR-23682), June 5, 1985; T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), July 25, 2001; T.D. ATF-479, [67 FR 30798](https://www.federalregister.gov/citation/67-FR-30798), May 8, 2002; T.D. TTB-196, [89 FR 87941](https://www.federalregister.gov/citation/89-FR-87941), Nov. 6, 2024]
## Subpart B—Definitions
#### § 22.11 Meaning of terms.
When used in this part and in forms prescribed under this part, the following terms have the meanings given in this section. Words in the plural form include the singular, and vice versa, and words importing the masculine gender include the feminine. The terms “includes” and “including” do not exclude things not enumerated which are in the same general class.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Alcohol.* Spirits having a proof of 190° or more when withdrawn from bond, including all subsequent dilutions and mixtures thereof, from whatever source or by whatever process produced.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.22, Delegation of the Administrator's Authorities in [27 CFR Part 22](/current/title-27/part-22), Distribution and Use of Tax-Free Alcohol.
*CFR.* The Code of Federal Regulations.
*Clinic.* When used in this part the term includes veterinary clinics.
*Executed under penalties of perjury.* Signed with the prescribed declaration under the penalties of perjury as provided on or with respect to the claim, form, or other document or, where no form of declaration is prescribed, with the declaration “I declare under the penalties of perjury that this \_\_\_\_\_\_\_\_\_\_ (insert type of document, such as statement, report, certificate, application, claim, or other document), including the documents submitted in support thereof, has been examined by me and, to the best of my knowledge and belief, is true, correct, and complete.”
*Fiduciary.* A guardian, trustee, executor, administrator, receiver, conservator, or any person acting in any fiduciary capacity for any person.
*Gallon or wine gallon.* The liquid measure equivalent to the volume of 231 cubic inches.
*Hospital.* When used in this part the term includes veterinary hospitals.
*Initial order.* The first order of tax-free alcohol placed by a permittee or Governmental agency with a distilled spirits plant or vendor, and, the first order placed following the issuance of an amended or corrected permit.
*Liter or litre.* A metric unit of capacity equal to 1,000 cubic centimeters of alcohol, and equivalent to 33.814 fluid ounces. A liter is divided into 1,000 milliliters (mL). The symbol for milliliter or milliliters is “ mL”.
*Permit.* The document issued under [26 U.S.C. 5271(a)](https://www.govinfo.gov/link/uscode/26/5271), authorizing a person to withdraw tax-free alcohol from the premises of a distilled spirits plant and use such alcohol under specified conditions.
*Permittee.* Any person holding a permit, on Form 5150.9, issued under this part to withdraw and use tax-free alcohol.
*Person.* An individual, trust, estate, partnership, association, company, or corporation.
*Proof.* The ethyl alcohol content of a liquid at 60 °Fahrenheit, stated as twice the percent of ethyl alcohol by volume.
*Proof gallon.* A gallon at 60 °Fahrenheit which contains 50 percent of volume of ethyl alcohol having a specific gravity of 0.7939 at 60 °Fahrenheit referred to water at 60 °Fahrenheit as unity, or the alcoholic equivalent thereof.
*Restoration.* Restoring to the original state of recovered tax-free alcohol, including redistillation of the recovered alcohol to 190° or more of proof and the removal of foreign materials by redistillation, filtration, or other suitable means.
*Secretary of the Treasury* or *Secretary.* The Secretary of the Treasury or a delegate of the Secretary.
*Spirits or distilled spirits.* The substance known as ethyl alcohol, ethanol, or spirits of wine, having a proof of 190° or more when withdrawn from bond, including all subsequent dilutions and mixtures thereof, from whatever source or by whatever process produced.
*This chapter.* [Title 27, Code of Federal Regulations](/current/title-27), Chapter I ([27 CFR Chapter I](/current/title-27/chapter-I)).
*U.S.C.* The United States Code.
\[T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985, as amended by T.D. ATF-435, [66 FR 5475](https://www.federalregister.gov/citation/66-FR-5475), Jan. 19, 2001; T.D. TTB-44, [71 FR 16937](https://www.federalregister.gov/citation/71-FR-16937), Apr. 4, 2006; T.D. TTB-196, [89 FR 87941](https://www.federalregister.gov/citation/89-FR-87941), Nov. 6, 2024]
## Subpart C—Administrative Provisions
### Authorities
#### § 22.20 Delegations of the Administrator.
The regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.22, Delegation of the Administrator's Authorities in [27 CFR Part 22](/current/title-27/part-22), Distribution and Use of Tax-Free Alcohol. You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-44, [71 FR 16937](https://www.federalregister.gov/citation/71-FR-16937), Apr. 4, 2006, as amended by T.D. TTB-196, [89 FR 87941](https://www.federalregister.gov/citation/89-FR-87941), Nov. 6, 2024]
#### § 22.21 Forms prescribed.
(a) The appropriate TTB officer is authorized to prescribe all forms required by this part, including applications, notices, claims, reports, and records. All of the information called for in each form shall be furnished as indicated by the headings on the form and the instructions on or pertaining to the form. In addition, information called for in each form shall be furnished as required by this part. The form will be filed in accordance with the instructions for the form.
(b) Forms prescribed by this part are available for printing through the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985, as amended by T.D. ATF-249, [52 FR 5961](https://www.federalregister.gov/citation/52-FR-5961), Feb. 27, 1987; T.D. 372, [61 FR 20724](https://www.federalregister.gov/citation/61-FR-20724), May 8, 1996; T.D. ATF-435, [66 FR 5476](https://www.federalregister.gov/citation/66-FR-5476), Jan. 19, 2001; T.D. ATF-443, [66 FR 13015](https://www.federalregister.gov/citation/66-FR-13015), Mar. 2, 2001; T.D. TTB-44, [71 FR 16937](https://www.federalregister.gov/citation/71-FR-16937), Apr. 4, 2006; T.D. TTB-196, [89 FR 87941](https://www.federalregister.gov/citation/89-FR-87941), Nov. 6, 2024]
#### § 22.22 Alternate methods or procedures; and emergency variations from requirements.
(a) *Alternate methods or procedures* —
(1) *Application.* A permittee, after receiving approval from the appropriate TTB officer, may use an alternate method or procedure (including alternate construction or equipment) in lieu of a method or procedure prescribed by this part. A permittee wishing to use an alternate method or procedure may apply to the appropriate TTB officer. The permittee shall describe the proposed alternate method or procedure and shall set forth the reasons for its use.
(2) *Approval by appropriate TTB officer.* The appropriate TTB officer may approve the use of an alternate method or procedure if:
(i) The applicant shows good cause for its use;
(ii) It is consistent with the purpose and effect of the procedure prescribed by this part, and provides equal security to the revenue;
(iii) It is not contrary to law; and
(iv) It will not cause an increase in cost to the Government and will not hinder the effective administration of this part.
(3) *Exceptions.* The appropriate TTB officer will not authorize an alternate method or procedure relating to the giving of a bond.
(4) *Conditions of approval.* A permittee may not employ an alternate method or procedure until the appropriate TTB officer has approved its use. The permittee shall, during the terms of the authorization of an alternate method or procedure, comply with the terms of the approved application.
(b) *Emergency variations from requirements* —
(1) *Application.* When an emergency exists, a permittee may apply to the appropriate TTB officer for a variation from the requirements of this part relating to construction, equipment, and methods of operation. The permittee shall describe the proposed variation and set forth the reasons for using it.
(2) *Approval by appropriate TTB officer.* The appropriate TTB officer may approve an emergency variation from requirements if:
(i) An emergency exists;
(ii) The variation from the requirements is necessary;
(iii) It will afford the same security and protection to the revenue as intended by the specific regulations;
(iv) It will not hinder the effective administration of this part; and
(v) It is not contrary to law.
(3) *Conditions of approval.* A permittee may not employ an emergency variation from the requirements until the appropriate TTB officer has approved its use. Approval of variations from requirements are conditioned upon compliance with the conditions and limitations set forth in the approval.
(4) *Automatic termination of approval.* If the permittee fails to comply in good faith with the procedures, conditions or limitations set forth in the approval, authority for the variation from requirements is automatically terminated and the permittee is required to comply with prescribed requirements of regulations from which those variations were authorized.
(c) *Withdrawal of approval.* The appropriate TTB officer may withdraw approval for an alternate method or procedure or an emergency variation from requirements, approved under [paragraph (a)](/current/title-27/section-22.22#p-22.22\(a\)) or [(b)](/current/title-27/section-22.22#p-22.22\(b\)) of this section, if the appropriate TTB officer finds that the revenue is jeopardized or the effective administration of this part is hindered by the approval.
(Approved by the Office of Management and Budget under control number 1512-0335)
(Act of August 16, 1954, Chapter 736, 68A Stat. 917 ([26 U.S.C. 7805](https://www.govinfo.gov/link/uscode/26/7805)); sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended ([26 U.S.C. 5552](https://www.govinfo.gov/link/uscode/26/5552)))
\[T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985, as amended by T.D. ATF-435, [66 FR 5476](https://www.federalregister.gov/citation/66-FR-5476), Jan. 19, 2001]
#### § 22.23 Allowance of claims.
The appropriate TTB officer is authorized to allow claims for losses of tax-free alcohol.
#### § 22.24 Permits.
(a) The appropriate TTB officer shall issue permits on Form 5150.33 covering the withdrawal of tax-free alcohol by the United States or a Governmental agency as provided in [§ 22.172](/current/title-27/section-22.172).
(b) The appropriate TTB officer shall issue the permit to withdraw and use tax-free alcohol, Form 5150.9 required under this part.
#### § 22.25 Right of entry and examination.
An appropriate TTB officer may enter, during business hours or at any time operations are being conducted, any premises on which operations governed by this part are conducted to inspect the records required by this part to be kept on those premises. An appropriate TTB officer may also inspect and take samples of tax-free alcohol to which those records relate.
\[T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985. Redesignated by T.D. ATF-443, [66 FR 13015](https://www.federalregister.gov/citation/66-FR-13015), Mar. 2, 2001]
#### § 22.26 Detention of containers.
(a) *Summary detention.* An appropriate TTB officer may detain any container containing, or supposed to contain, alcohol when the appropriate TTB officer believes the alcohol was withdrawn, sold, transported, or used in violation of law of this part. The appropriate TTB officer shall hold the container at a safe place until it is determined if the detained property is liable by law to forfeiture.
(b) *Limitations.* Summary detention may not exceed 72 hours without process of law or intervention of the appropriate TTB officer. The person possessing the container immediately before its detention may prepare a waiver of the 72 hours limitation to have the container kept on its premises during detention.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1375, as amended ([26 U.S.C. 5311](https://www.govinfo.gov/link/uscode/26/5311)))
\[T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985. Redesignated by T.D. ATF-443, [66 FR 13015](https://www.federalregister.gov/citation/66-FR-13015), Mar. 2, 2001]
### Liability for Tax
#### § 22.31 Persons liable for tax.
All tax-free alcohol removed, sold, transported, or used in violation of law or regulations in this part, is subject to all provisions of law relating to taxable alcohol, including the requirement for payment of tax on the alcohol. The person removing, selling, transporting, or using tax-free alcohol in violation of law or regulations pertaining to tax-free alcohol shall be required to pay the distilled spirits tax on the alcohol.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended ([26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001)))
### Destruction of Marks and Brands
#### § 22.33 Time of destruction of marks and brands.
(a) Any person who empties a package containing tax-free alcohol shall immediately destroy or obliterate the marks, brand, and labels required by this chapter to be placed on packages of tax-free alcohol.
(b) A person may not destroy or obliterate the marks, brands or labels until the package or drum has been emptied.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended ([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206)))
### Document Requirements
#### § 22.35 Execution under penalties of perjury.
(a) When any form or document prescribed by this part is required to be executed under penalties of perjury, the permittee or other authorized person shall:
(1) Insert the declaration “I declare under the penalties of perjury that I have examined this \_\_\_\_\_\_\_\_\_\_(insert the type of document such as claim, application, statement, report, certificate), including all supporting documents, and to the best of my knowledge and belief, it is true, correct, and complete”; and
(2) Sign the document.
(b) When the required document already bears a perjury declaration, the permittee or other authorized person shall sign the document.
(Act of August 16, 1954, 68A Stat. 745 ([26 U.S.C. 6056](https://www.govinfo.gov/link/uscode/26/6056)))
#### § 22.36 Filing of qualifying documents.
All documents returned to a permittee or other person as evidence of compliance with requirements of this part, or as authorization, shall except as otherwise provided, be kept readily available for inspection by an appropriate TTB officer during business hours.
## Subpart Ca \[Reserved]
## Subpart D—Qualification
### Application for Permit, Form 5150.22
#### § 22.41 Application for industrial alcohol user permit.
(a) *Users.* Each person desiring to withdraw and use tax-free alcohol shall, before commencing business, file an application on Form 5150.22 for, and obtain a permit, Form 5150.9, except permittees who were previously qualified to withdraw and use tax-free alcohol on the effective date of this regulation.
(b) *Filing.* All applications and necessary supporting documents, as required by this subpart, shall be filed with the appropriate TTB officer. All data, written statements, affidavits, and other documents submitted in support of the application are considered a part of the application.
(1) Applications filed as provided in this section, shall be accompanied by evidence establishing the authority of the officer or other person to execute the application.
(2) A State, political subdivision thereof, or the District of Columbia, may specify in the application that it desires a single permit authorizing the withdrawal and use of tax-free alcohol in a number of institutions under its control. In this instance, the application, Form 5150.22, or an attachment, shall clearly show the method of distributing and accounting for the tax-free alcohol to be withdrawn.
#### § 22.42 Data for application, Form 5150.22.
(a) Unless waived under [§ 22.43](/current/title-27/section-22.43), each application on Form 5150.22 shall include as applicable, the following information:
(1) Serial number and purpose for which filed.
(2) Name and principal business address.
(3) Based on the bona fide requirements of the applicant, the estimated quantity of tax-free alcohol in proof gallons, which will be procured during a 12-month period (one calendar year).
(4) Location, or locations where tax-free alcohol is to be used, if different from the business address.
(5) Statement showing the specific manner in which, or purposes for which, tax-free alcohol will be withdrawn and used.
(6) Statement that tax-free alcohol will be stored in accordance with the requirements of this part.
(7) Statement as to the type of business organization and of the persons interested in the business, supported by the items of information listed in [§ 22.45](/current/title-27/section-22.45).
(8) Listing of the principal equipment for the recovery and restoration of alcohol (including the serial number, kind, capacity, name and address of manufacturer, and name and address of owner if different from applicant).
(9) List of any trade name(s) under which the applicant will conduct operations, and the offices where these names are registered.
(10) Listing of the titles of offices, the incumbents of which are responsible for the tax-free alcohol activities of the business and are authorized by the articles of incorporation, the bylaws, or the board of directors to act and sign on behalf of the applicant.
(11) Other information and statements as the appropriate TTB officer may require to establish that the applicant is entitled to the permit. In the case of a corporation or other legal entity the appropriate TTB officer may require information which establishes that the officers, directors and principal stockholders whose names are required to be furnished under [§ 22.45 (a)(2)](/current/title-27/section-22.45#p-22.45\(a\)\(2\)) and [(c)](/current/title-27/section-22.45#p-22.45\(c\)) have not violated or conspired to violate any law of the United States relating to intoxicating liquor or have been convicted of any offense under Title 26, U.S.C., punishable as a felony or of any conspiracy to commit such offense.
(b) If any of the information required by [paragraphs (a)(4)](/current/title-27/section-22.42#p-22.42\(a\)\(4\)) through [(a)(10)](/current/title-27/section-22.42#p-22.42\(a\)\(10\)) of this section is on file with any appropriate TTB officer, the applicant may incorporate this information by reference by stating that the information is made a part of the application.
#### § 22.43 Exceptions to application requirements.
(a) The appropriate TTB officer may waive detailed application and supporting data requirements, other than the requirements of paragraphs (a)(1) through (a)(6) of [§ 22.42](/current/title-27/section-22.42), and of paragraph (a)(8) of that section as it relates to recovery, in the case of—
(1) All applications, Form 5150.22 filed by States or political subdivisions thereof or the District of Columbia, and
(2) Applications, Form 5150.22, filed by applicants, where the appropriate TTB officer has determined that the waiver of such requirements does not pose any jeopardy to the revenue or a hindrance of the effective administration of this part.
(b) The waiver provided for in this section will terminate for a permittee, other than States or political subdivisions thereof or the District of Columbia, when the permittee files an application to amend the permit and the appropriate TTB officer determines that the conditions justifying the waiver no longer exist. In this case, the permittee will furnish the information in respect to the previously waived items, as provided in [§ 22.57(a)(2)](/current/title-27/section-22.57#p-22.57\(a\)\(2\)).
\[T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985, as amended by T.D. ATF-443, [66 FR 13015](https://www.federalregister.gov/citation/66-FR-13015), Mar. 2, 2001]
#### § 22.44 Disapproval of application.
The appropriate TTB officer may, in accordance with [part 71 of this chapter](/current/title-27/part-71), disapprove an application for a permit to withdraw and use tax-free alcohol, if on examination of the application (or inquiry), the appropriate TTB officer has reason to believe that:
(a) The applicant is not authorized by law and regulations to withdraw and use alcohol free of tax;
(b) The applicant (including, in the case of a corporation, any officer, director, or principal stockholder, and, in the case of a partnership, a partner) is, by reason of their business experience, financial standing, or trade connections, not likely to maintain operations in compliance with [26 U.S.C. Chapter 51](https://www.govinfo.gov/link/uscode/26/5101), or regulations issued under this part;
(c) The applicant has failed to disclose any material information required, or has made any false statement as to any material fact, in connection with their application; or
(d) The premises at which the applicant proposes to conduct the business are not adequate to protect the revenue.
#### § 22.45 Organizational documents.
The supporting information required by [§ 22.42(a)(7)](/current/title-27/section-22.42#p-22.42\(a\)\(7\)) includes, as applicable:
(a) *Corporate documents.*
(1) Certified true copy of the certificate of incorporation, or certified true copy of certificate authorizing the corporation to operate in the State where the premises are located (if other than that in which incorporated).
(2) Certified list of names and addresses of officers and directors, along with a statement designating which corporate officers, if applicable, are directly responsible for the tax-free alcohol activities of the business.
(3) Statement showing the number of shares of each class of stock or other evidence of ownership, authorized and outstanding, the par value thereof, and the voting rights of the respective owners or holders.
(b) *Articles of partnership.* True copy of the articles of partnership or association, if any, or certificate of partnership or association where required to be filed by any State, county, or municipality.
(c) *Statement of interest.*
(1) Names and addresses of persons owning 10% or more of each of the classes of stock in the corporation, or legal entity, and the nature and amount of the stockholding or other interest of each, whether such interest appears in the name of the interested party or in the name of another for him or her. If a corporation is wholly owned or controlled by another corporation, persons owning 10% or more of each of the classes of stock of the parent corporation are considered to be the persons interested in the business of the subsidiary, and the names and addresses of such persons must be submitted to the appropriate TTB officer if specifically requested.
(2) In the case of an individual owner or partnership, name and address of every person interested in the business, whether such interest appears in the name of the interested party or in the name of another for the interested person.
\[T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985, as amended by T.D. ATF-435, [66 FR 5476](https://www.federalregister.gov/citation/66-FR-5476), Jan. 19, 2001]
### Industrial Alcohol User Permit, Form 5150.9
#### § 22.48 Conditions of permits.
Permits to withdraw and use tax-free alcohol will designate the acts which are permitted, and include any limitations imposed on the performance of these acts. All of the provisions of this part relating to the use or recovery of tax-free alcohol are considered to be included in the provisions and conditions of the permit, the same as if set out in the permit.
#### § 22.49 Duration of permits.
Permits to withdraw and use tax-free alcohol are continuing unless automatically terminated by the terms thereof, suspended or revoked as provided in [§ 22.51](/current/title-27/section-22.51), or voluntarily surrendered. The provisions of [§ 22.58](/current/title-27/section-22.58) are considered part of the terms and conditions of all permits.
#### § 22.50 Correction of permits.
If an error on a permit is discovered, the permittee shall immediately return the permit to the appropriate TTB officer for correction.
#### § 22.51 Suspension or revocation of permits.
The appropriate TTB officer may institute proceedings under [part 71 of this chapter](/current/title-27/part-71) to suspend or revoke a permit whenever there is reason to believe that the permittee—
(a) Has not in good faith complied with the provisions of [26 U.S.C. Chapter 51](https://www.govinfo.gov/link/uscode/26/5101), or regulations issued under that chapter;
(b) Has violated the conditions of that permit;
(c) Has made any false statements as to any material fact in the application for the permit;
(d) Has failed to disclose any material information required to be furnished;
(e) Has violated or conspired to violate any law of the United States relating to intoxicating liquor or has been convicted of an offense under Title 26, U.S.C., punishable as a felony or of any conspiracy to commit such offense;
(f) Is, by reason of its operations, no longer warranted in procuring and using tax-free alcohol authorized by the permit; or
(g) Has not engaged in any of the operations authorized by the permit for a period exceeding two years.
#### § 22.52 Rules of practice in permit proceedings.
The regulations of [part 71 of this chapter](/current/title-27/part-71) apply to the procedure and practice in connection with the disapproval of any application for a permit and in connection with suspension or revocation of a permit.
#### § 22.53 Powers of attorney.
An applicant or permittee shall execute and file a Form 1534, in accordance with the instructions on the form, for each person authorized to sign or to act in its behalf. Form 1534 is not required for persons whose authority is furnished in accordance with [§ 22.42(a)(10)](/current/title-27/section-22.42#p-22.42\(a\)\(10\)).
#### § 22.54 Photocopying of permits.
A permittee may make photocopies of its permit exclusively for the purpose of furnishing proof of authorization to withdraw tax-free alcohol from a distilled spirits plant.
#### § 22.55 Posting of permits.
Permits issued under this part will be kept posted and available for inspection on the permit premises.
### Changes After Original Qualification
#### § 22.57 Changes affecting applications and permits.
(a) *General* —
(1) *Changes affecting application.* When there is a change relating to any of the information contained in, or considered a part of the application on Form 5150.22 for a permit, the permittee shall, within 30 days (except as otherwise provided in this subpart) file a written notice with the appropriate TTB officer to amend the application.
(2) *Changes affecting waivers.* When any waiver under [§ 22.43](/current/title-27/section-22.43) is terminated by a change to the application, the permittee shall include the current information as to the item previously waived with the written notice required in [paragraph (a)(1)](/current/title-27/section-22.57#p-22.57\(a\)\(1\)) of this section.
(3) *Changes affecting permit.* When the terms of a permit are affected by a change, the written notice required by [paragraph (a)(1)](/current/title-27/section-22.57#p-22.57\(a\)\(1\)) of this section (except as otherwise provided in this subpart) will serve as an application to amend the permit.
(4) *Form of notice.* All written notices to amend an application on Form 5150.22 will—
(i) Identify the permittee;
(ii) Contain the permit identification number;
(iii) Explain the nature of the change and contain any required supporting documents;
(iv) Identify the serial number of the applicable application, Form 5150.22; and
(v) Be consecutively numbered and signed by the permittee or any person authorized to sign on behalf of the permittee.
(b) *Amended application.* The appropriate TTB officer may require a permittee to file an amended application on Form 5150.22 when the number of changes to the previous application are determined to be excessive, or when a permittee has not timely filed the written notice prescribed in [paragraph (a)(1)](/current/title-27/section-22.57#p-22.57\(a\)\(1\)) of this section. If items on the amended application remain unchanged, they will be marked “No change since Form 5150.22, Serial No. \_\_\_\_\_\_\_\_\_\_.”
(c) *Changes in officers, directors and stockholders* —
(1) *Officers.* In the case of a change in the officers listed under the provisions of [§ 22.45(a)(2)](/current/title-27/section-22.45#p-22.45\(a\)\(2\)), the notice required by [paragraph (a)(1)](/current/title-27/section-22.57#p-22.57\(a\)\(1\)) of this section shall only apply (unless otherwise required, in writing, by the appropriate TTB officer) to those offices, the incumbents of which are responsible for the operations covered by the permit.
(2) *Directors.* In the case of a change in the directors listed under the provisions of [§ 22.45(a)(2)](/current/title-27/section-22.45#p-22.45\(a\)\(2\)), the notice required by [paragraph (a)(1)](/current/title-27/section-22.57#p-22.57\(a\)\(1\)) of this section shall reflect the changes.
(3) *Stockholders.* In lieu of reporting all changes, within 30 days, to the list of stockholders furnished under the provisions of [§ 22.45(c)(1)](/current/title-27/section-22.45#p-22.45\(c\)\(1\)), a permittee may, upon filing written notice to the appropriate TTB officer and establishing a reporting date, file an annual notice of changes. The notice of changes in stockholders does not apply if the sale or transfer of capital stock results in a change in ownership or control which is required to be reported under [§ 22.58](/current/title-27/section-22.58).
(Approved by the Office of Management and Budget under control number 1512-0335)
\[T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985; [50 FR 20099](https://www.federalregister.gov/citation/50-FR-20099), May 14, 1985]
#### § 22.58 Automatic termination of permits.
(a) *Permit not transferable.* Permits issued under this part are not transferable. In the event of the lease, sale, or other transfer of such a permit, or of the operations authorized by the permit, the permit shall, except as provided for in this section, automatically terminate.
(b) *Corporations.*
(1) If actual or legal control of any corporation holding a permit issued under this part changes, directly or indirectly, whether by reason of a change in stock ownership or control (in the permittee corporation or any other corporation), by operation of law, or in any other manner, the permittee shall within 10 days of the change, give written notice to the appropriate TTB officer. The written notice shall be accompanied by (or within 30 days of the change) an application and supporting documents on Form 5150.22 for a new permit. If an application on Form 5150.22 for a new permit is not filed within 30 days of the change, the outstanding permit will automatically terminate.
(2) If an application on Form 5150.22 for a new permit is filed within the 30-day period prescribed in [paragraph (b)(1)](/current/title-27/section-22.58#p-22.58\(b\)\(1\)) of this section, the outstanding permit will remain in effect until final action is taken on the application. When final action is taken, the outstanding permit will automatically terminate and the permittee shall forward it to the appropriate TTB officer for cancellation.
(c) *Proprietorships.* In the event of a change in proprietorship of a business of a permittee (as for instance, by reason of incorporation, the withdrawal or taking in of additional partners, or succession by any person who is not a fiduciary), the successor shall file written notice and make application on Form 5150.22 for a new permit under the same conditions provided for in [paragraph (b)](/current/title-27/section-22.58#p-22.58\(b\)) of this section.
(Approved by the Office of Management and Budget under control number 1512-0335)
#### § 22.59 Adoption of documents by a fiduciary.
If the business covered by a permit issued under this part, is to be operated by a fiduciary, the fiduciary may, in lieu of qualifying as a new proprietor, file a written notice, and any necessary supporting documents, to amend the predecessor's permit. The effective date of the qualifying documents filed by a fiduciary shall coincide with the effective date of the court order or the date specified therein for the fiduciary to assume control. If the fiduciary was not appointed by the court, the date the fiduciary assumed control shall coincide with the effective date of the filing of the qualifying documents.
\[T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985, as amended by T.D. ATF-443, [66 FR 13015](https://www.federalregister.gov/citation/66-FR-13015), Mar. 2, 2001]
#### § 22.60 Continuing partnerships.
(a) *Continuing partnerships.* If, under the laws of a particular State, a partnership is not terminated on death or insolvency of a partner, but continues until final settlement of the partnership affairs is completed, and the surviving partner has the exclusive right to the control and possession of the partnership assets for the purpose of liquidation and settlement, the surviving partner may continue to withdraw and use tax-free alcohol under the prior qualifications of the partnership.
(b) *Requalification.* If a surviving partner acquires the business on completion of the settlement of the partnership, that partner shall qualify as a new proprietor, from the date of acquisition, under the same conditions and limitations prescribed in [§ 22.58(b)](/current/title-27/section-22.58#p-22.58\(b\)).
(c) *More than one partner.* The rule set forth in this section also applies if there is more than one surviving partner.
\[T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985, as amended by T.D. ATF-443, [66 FR 13015](https://www.federalregister.gov/citation/66-FR-13015), Mar. 2, 2001]
#### § 22.61 Change in name of permittee.
When the only change is a change in the individual, firm, or corporation name, a permittee may not conduct operations under the new name until a written notice, accompanied by necessary supporting documents, to amend the application and permit has been filed and an amended permit has been issued by the appropriate TTB officer.
(Approved by the Office of Management and Budget under control number 1512-0335)
\[T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985; [50 FR 20099](https://www.federalregister.gov/citation/50-FR-20099), May 14, 1985]
#### § 22.62 Change in trade name.
Where there is to be a change in, or addition of, a trade name, the permittee may not conduct operations under the new trade name until a written notice has been filed and an amended permit has been issued by the appropriate TTB officer.
(Approved by the Office of Management and Budget under control number 1512-0335)
\[T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985, as amended by T.D. ATF-443, [66 FR 13015](https://www.federalregister.gov/citation/66-FR-13015), Mar. 2, 2001]
#### § 22.63 Change in location.
When there is to be a change in location, a permittee may not conduct operations at the new location until a written notice, accompanied by necessary supporting information, to amend the application and permit has been filed and an amended permit has been issued by the appropriate TTB officer.
(Approved by the Office of Management and Budget under control number 1512-0335)
\[T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985, as amended by T.D. ATF-435, [66 FR 5476](https://www.federalregister.gov/citation/66-FR-5476), Jan. 19, 2001; T.D. ATF-443, [66 FR 13015](https://www.federalregister.gov/citation/66-FR-13015), Mar. 2, 2001]
#### § 22.64 Return of permits.
Following the termination, surrender or revocation of a permit, or the issuance of a new or amended permit, caused by a change, the permittee shall
(a) Obtain and destroy all photocopies of the previous permit from its suppliers, and
(b) Return the original of the permit or obsolete permit to the appropriate TTB officer for cancellation.
### Registry of Stills
#### § 22.66 Registry of stills.
The provisions of [subpart C of part 29 of this chapter](/current/title-27/part-29/subpart-C) are applicable to stills on the premises of a permittee used for distilling. As provided in [§ 29.55](/current/title-27/section-29.55), the listing of a still in the permit application (Form 5150.22), and approval of the application, constitutes registration of the still.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1355, as amended ([26 U.S.C. 5179](https://www.govinfo.gov/link/uscode/26/5179)))
\[T.D. ATF-207, [50 FR 23682](https://www.federalregister.gov/citation/50-FR-23682), June 5, 1985]
### Permanent Discontinuance of Use of Tax-Free Alcohol
#### § 22.68 Notice of permanent discontinuance.
A permittee who permanently discontinues the use of tax-free alcohol shall file a written notice with the appropriate TTB officer to cover the discontinuance. The notice will be accompanied by the permit, and contain—
(1) A request to cancel the permit,
(2) A statement of the disposition made, as provided in [§ 22.154](/current/title-27/section-22.154), of all tax-free and recovered alcohol, and
(3) The date of discontinuance.
(Approved by the Office of Management and Budget under control number 1512-0335)
\[T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985, as amended by T.D. ATF-443, [66 FR 13015](https://www.federalregister.gov/citation/66-FR-13015), Mar. 2, 2001]
## Subpart E \[Reserved]
## Subpart F—Premises and Equipment
#### § 22.91 Premises.
All persons qualified to withdraw and use tax-free alcohol shall have premises suitable for the business being conducted and adequate for the protection of the revenue. Storage facilities shall be provided on the premises for tax-free alcohol received or recovered. The storage facilities may consist of a combination of storerooms, compartments, or stationary storage tanks.
#### § 22.92 Storage facilities.
(a) Storerooms or compartments shall be so constructed and secured as to prevent unauthorized access and will be equipped for locking. These storage facilities shall be of sufficient capacity to hold the maximum quantity of tax-free alcohol which will be on hand at one time.
(b) Each stationary storage tank used to hold tax-free alcohol shall be equipped for locking in such a manner as to control access to the spirits. All stationary storage tanks shall be equipped with an accurate means of measuring the spirits.
(c) Storerooms and storage tanks shall be kept locked when unattended. A storage cabinet or locker kept inside a room which is locked when unattended is considered to be adequately secured.
#### § 22.93 Equipment for recovery and restoration of tax-free alcohol.
(a) *Location.* All equipment used to recover and restore tax-free alcohol for reuse shall be located on the permit premises.
(b) *Construction.*
(1) Distilling apparatus, pipelines and other equipment used for recovery and restoration of tax-free alcohol shall be constructed and secured in such a manner as to prevent unauthorized access and so arranged as to be readily inspected.
(2) Storage tanks shall be provided for the collection of recovered tax-free alcohol. Each storage tank shall—
(i) Be durably marked as to use and capacity;
(ii) Be equipped with, or for, an accurate means of measuring the spirits; and
(iii) Be equipped for locking to control unauthorized access to the spirits.
\[T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985, as amended by T.D. TTB-196, [89 FR 87941](https://www.federalregister.gov/citation/89-FR-87941), Nov. 6, 2024]
## Subpart G—Use of Tax-Free Alcohol
#### § 22.101 Authorized uses.
Alcohol may be withdrawn free of tax from the bonded premises of a distilled spirits plant for the use of any State or political subdivision of a State, or the District of Columbia, for nonbeverage purposes. Alcohol may also be withdrawn by persons eligible to use tax-free alcohol, for nonbeverage purposes and not for resale or use in the manufacture of any product for sale. Tax-free alcohol shall be withdrawn and used only as provided by law and this part, as follows:
(a) For the use of any educational organization described in [26 U.S.C. 170(b)(1)(A)](https://www.govinfo.gov/link/uscode/26/170) which is exempt from income tax under [26 U.S.C. 501(a)](https://www.govinfo.gov/link/uscode/26/501), or for the use of any scientific university or college of learning;
(b) For any laboratory for use exclusively in scientific research;
(c) For use at any hospital, blood bank, or sanitarium (including use in making any analysis or test at a hospital, blood bank, or sanitarium), or at any pathological laboratory exclusively engage in making analyses, or test, for hospitals or sanitariums; or
(d) For the use of any clinic operated for charity and not for profit (including use in the compounding of bona fide medicines for treatment of patients outside of the clinic).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214)))
#### § 22.102 Prohibited uses.
(a) *Usage.* Under no circumstances may tax-free alcohol withdrawn under this part be used for beverage purposes, food products, or in any preparation used in preparing beverage or food products.
(b) *Selling.* Persons qualified under this part are prohibited from selling tax-free alcohol, using tax-free alcohol in the manufacture of any product for sale, or selling any products resulting from the use of tax-free alcohol. A separate charge may be made by a hospital, sanitarium or clinic for medicines compounded with tax-free alcohol and dispensed to patients for use on the premises, as provided in [§§ 22.105](/current/title-27/section-22.105) and [22.106](/current/title-27/section-22.106). Hospitals may not furnish tax-free alcohol for use of physicians in their private practice.
(c) *Removal from premises.* Persons qualified under this part may not remove tax-free alcohol or products resulting from the use of tax-free alcohol from the permit premises unless specifically authorized by the terms of their permit, or permission is obtained from the appropriate TTB officer, except that:
(1) Products made through the use of tax-free alcohol which contain no alcohol may be removed to other premises for the sole purpose of further research; or
(2) Under the provisions of [§§ 22.105](/current/title-27/section-22.105) and [22.106](/current/title-27/section-22.106), clinics operated for charity and not for profit may compound bona fide medicines with tax-free alcohol, and dispense the medicine from the premises for use by its patients outside of the clinic, if the furnishing of the medicine is not conditioned upon payment.
(d) *Liability for tax.* Permittees who use tax-free alcohol in any manner prohibited by this section become liable for the tax on the alcohol. Any permittee who sells tax-free alcohol becomes subject to the provisions of [part 31 of this chapter](/current/title-27/part-31).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended, 1343, as amended, 1362, as amended ([26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5121](https://www.govinfo.gov/link/uscode/26/5121), [5214](https://www.govinfo.gov/link/uscode/26/5214)))
\[T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985, as amended by T.D. TTB-79, [74 FR 37404](https://www.federalregister.gov/citation/74-FR-37404), July 28, 2009]
#### § 22.103 States and the District of Columbia.
Except as otherwise provided in this section, tax-free alcohol withdrawn by a State or political subdivision of a State, or the District of Columbia shall be used solely for mechanical and scientific purposes, and except on approval of the appropriate TTB officer, the use of tax-free alcohol or the use of any resulting product will be confined to the premises under the control of the State or political subdivision of a State, or the District of Columbia. Tax-free alcohol withdrawn for use in hospitals, clinics, and other establishments specified in [§§ 22.104](/current/title-27/section-22.104) through [22.108](/current/title-27/section-22.108), operated by a State, political subdivision of a State, or the District of Columbia, shall be used in the manner prescribed for those establishments.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214)))
#### § 22.104 Educational organizations, colleges of learning, and scientific universities.
(a) *Educational organizations.* Educational organizations authorized to withdraw and use tax-free alcohol under [§ 22.101](/current/title-27/section-22.101) are those organizations which normally maintain a regular faculty and curriculum and which normally have a regularly enrolled body of students in attendance at the place where their educational activities are regularly carried on and which are exempt from Federal income tax under [26 U.S.C. 501(a)](https://www.govinfo.gov/link/uscode/26/501).
(b) *Colleges of learning.* Colleges of learning, for the purposes of this subpart, have a recognized curriculum and confer degrees after specified periods of attendance at classes or research work.
(c) *Scientific universities.* Scientific universities include any university incorporated or organized under any Federal or State law which provides training in the sciences.
(d) *Uses.* Tax-free alcohol withdrawn by educational organizations, scientific universities, and colleges of learning shall be used only for scientific, medicinal, and mechanical purposes. Use of tax-free alcohol and resulting products are limited by the provisions of [§ 22.102](/current/title-27/section-22.102).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214)))
#### § 22.105 Hospitals, blood banks, and sanitariums.
(a) Tax-free alcohol withdrawn for use by hospitals, blood banks, and sanitariums shall be used exclusively for medicinal, mechanical (analysis or test) and scientific purposes and in the treatment of patients. The use of tax-free alcohol and of products resulting from the use of tax-free alcohol shall be confined to the permit premises, except as provided in this section and [§ 22.102](/current/title-27/section-22.102). Medicines compounded with tax-free alcohol on the premises of a hospital or sanitarium, for use of patients on the premises, may not be sold, but a separate charge may be made for the medicine.
(b) A hospital, operating a clinic on premises, may withdraw tax-free alcohol for use in the clinic, if the clinic is operated for charity and not for profit. Medicines compounded with tax-free alcohol may be dispensed to patients at a clinic for use outside of the clinic, if the furnishing of the medicine is not conditioned upon payment.
(c) A hospital or sanitarium, operating a pathological or other laboratory on premises, may withdraw tax-free alcohol for authorized use in the laboratory.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214)))
#### § 22.106 Clinics.
Tax-free alcohol withdrawn by clinics operated for charity and not for profit shall be used only for medicinal, scientific, and mechanical purposes and in the treatment of patients. Medicine compounded with tax-free alcohol may be dispensed to patients for use off the premises, if the furnishing of the medicine is not conditioned upon payment. A separate charge may be made for medicine compounded on the clinic premises with tax-free alcohol for use of patients on the premises. Except as provided in this section and in [§ 22.102](/current/title-27/section-22.102), the use of tax-free alcohol shall be confined strictly to the premises of the clinic.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214)))
\[T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985, as amended by T.D. TTB-196, [89 FR 87941](https://www.federalregister.gov/citation/89-FR-87941), Nov. 6, 2024]
#### § 22.107 Pathological laboratories.
(a) Pathological laboratories, not operated by a hospital or sanitarium, may withdraw and use tax-free alcohol if exclusively engaged in making analyses or tests for hospitals or sanitariums. If a pathological laboratory does not exclusively conduct analyses or tests for hospitals or sanitariums, it does not qualify for the permit issued under this part.
(b) A pathological laboratory which uses tax-free alcohol for any other purpose, except as provided in this section, shall become liable for the tax on the alcohol.
(c) Except as provided in [§ 22.102](/current/title-27/section-22.102), the use of tax-free alcohol and of products resulting from the use of tax-free alcohol shall be confined strictly to the permit premises.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended, 1362, as amended ([26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5214](https://www.govinfo.gov/link/uscode/26/5214)))
#### § 22.108 Other laboratories.
Laboratories, other than pathological laboratories specified in [§ 22.107](/current/title-27/section-22.107), may withdraw and use tax-free alcohol exclusively in scientific research. The use of tax-free alcohol or of products resulting from the use of tax-free alcohol shall be confined strictly to the laboratory premises, except as provided in [§ 22.102](/current/title-27/section-22.102).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214)))
## Subpart H—Withdrawal and Receipt of Tax-Free Alcohol
#### § 22.111 Withdrawals under permit.
(a) *General.* The permit, Form 5150.9, issued under [subpart D of this part](/current/title-27/part-22/subpart-D), authorizes a person to withdraw tax-free alcohol from the bonded premises of a distilled spirits plant or, under the provisions of [26 U.S.C. 5688(a)(2)(B)](https://www.govinfo.gov/link/uscode/26/5688), receive alcohol from the General Services Administration.
(b) *Photocopying of permit, Form 5150.9.*
(1) As provided in [§ 22.54](/current/title-27/section-22.54), a permittee may make photocopies of its permit, or amended permit, for the exclusive purpose of furnishing proof of authorization to withdraw tax-free alcohol.
(2) A permittee need only furnish the photocopy of its permit, or amended permit, to a distilled spirits plant for the “initial order” from that distilled spirits plant.
(3) When a permittee makes photocopies of its permit, Form 5150.9, each copy shall be signed, dated, and contain the word “COPY” across the face.
(4) A permittee is responsible for obtaining and, as applicable, destroying all photocopies of its permit from distilled spirits plants when
(i) an amended or corrected permit is issued which supersedes the copy on file,
(ii) the permit is canceled by reason of requalification as a new permittee,
(iii) the permit is revoked or suspended, or
(iv) upon permanent discontinuance of use of tax-free alcohol.
(c) *Withdrawals under permit.*
(1) When a permittee places an initial order for tax-free alcohol it shall forward a signed copy of the permit, for retention by the distilled spirits plant, along with the purchase request.
(2) When the permittee places a subsequent order for tax-free alcohol, the purchase request, in addition to any other information, shall contain the permit identification number along with a statement that the permittee possesses a valid permit to withdraw tax-free alcohol, a copy of which is on file.
(3) Shipments shall not be made by a proprietor of a distilled spirits plant until it is in possession of a signed copy of a valid permit, Form 5150.9, unless the appropriate TTB officer authorizes the shipment.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended ([26 U.S.C. 5555](https://www.govinfo.gov/link/uscode/26/5555)))
\[T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985; [50 FR 20099](https://www.federalregister.gov/citation/50-FR-20099), May 14, 1985]
#### § 22.112 Regulation of withdrawals.
(a) Each permittee shall regulate its withdrawals of tax-free alcohol to ensure that
(1) the quantity on hand and unaccounted for does not exceed the capacity of the storage facilities, and
(2) the cumulative quantity withdrawn or received in any calendar year does not exceed the quantity authorized by the permit, Form 5150.9. Recovered alcohol and alcohol received from the General Services Administration shall be taken into account in determining the total quantity of alcohol on hand.
(b) For the purpose of this section, tax-free alcohol and recovered alcohol shall be considered as unaccounted for if lost under circumstances where a claim for allowance is required by this part and the claim has not been allowed, or if used or disposed of in any manner not provided for in this part.
#### § 22.113 Receipt of tax-free alcohol.
(a) When tax-free alcohol is received, it shall be placed in the storage facilities prescribed by [§ 22.91](/current/title-27/section-22.91) and kept there under lock until withdrawn for use. Unless required by city or State fire code regulations or authorized by the appropriate TTB officer or the terms of the permit, the permittee may not remove tax-free alcohol from the original packages or containers in which received until the alcohol is withdrawn for use. If the tax-free alcohol is transferred to “safety” containers in accordance with fire code regulations, the containers to which they are transferred shall be appropriately marked to identify the package from which transferred, the quantity transferred, the date of transfer, and the name and address of the vendor.
(b) When tax-free alcohol is received, the permittee shall ascertain and account for any losses in transit in accordance with [subpart I of this part](/current/title-27/part-22/subpart-I). The permittee shall note any loss or deficiency in the shipment on the record of receipt.
(c) Records of receipt shall consist of the consignors invoice or bill. Records of receipt may be filed in accordance with the permittee's own filing system as long as it does not cause inconvenience to appropriate TTB officers desiring to examine the records. The filing system shall systematically and accurately account for the receipt of all tax-free alcohol.
#### § 22.114 Alcohol received from the General Services Administration.
Any nonprofit charitable institution holding a permit on Form 5150.9, and receiving alcohol from the General Services Administration under the provisions of [26 U.S.C. 5688(a)(2)(B)](https://www.govinfo.gov/link/uscode/26/5688), shall include any quantity of alcohol received in computing the quantity of tax-free alcohol that may be procured under its permit during the calendar year. The alcohol, on receipt, shall be placed in the storage facilities prescribed in [§ 22.91](/current/title-27/section-22.91) and kept there under lock until withdrawn for use.
## Subpart I—Losses
#### § 22.121 Liability and responsibility of carriers.
(a) A person or carrier transporting tax-free alcohol to a consignee or returning the alcohol to the consignor is responsible for the safe delivery and is accountable for any tax-free alcohol not delivered.
(b) A person or carrier transporting tax-free alcohol in violation of any law or regulation pertaining thereto, is subject to all provisions of law relating to alcohol subject to and the payment of tax thereon, and shall be required to pay the tax.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended ([26 U.S.C 5001](https://www.govinfo.gov/link/uscode/26/5001)))
#### § 22.122 Losses in transit.
(a) *Reporting losses.* Upon discovering any loss of tax-free alcohol while in transit, the carrier shall immediately inform the consignee, in writing, of the facts and circumstances relating to the loss. In the case of theft, the carrier shall also immediately notify the consignee's appropriate TTB officer of the facts and circumstances relating to the loss.
(b) *Recording losses.* At the time the shipment or report of loss is received, the consignee shall determine the quantity of tax-free alcohol lost. The consignee shall note the quantity lost on the receiving document and attach all relevant information to the record of receipt, prescribed in [§ 22.113](/current/title-27/section-22.113). For the purpose of maintaining the records prescribed in [subpart M of this part](/current/title-27/part-22/subpart-M), receipts of tax-free alcohol shall only include the quantity actually received.
(c) *Claims.* A claim for allowances of losses of tax-free alcohol shall, as prescribed in [§ 22.125](/current/title-27/section-22.125), be filed:
(1) If the quantity lost in transit exceeds 1 percent of the total quantity shipped and is more than 5 proof gallons, the consignee shall file a claim for allowance of the entire quantity lost; or
(2) If the loss was due to theft or other unlawful removal, the consignee shall file a claim for allowances of the entire quantity lost, regardless of the quantity or percentage involved.
(Reporting approved by the Office of Management and Budget under control number 1512-0335; recordkeeping approved by the Office of Management and Budget under control number 1512-0334)
#### § 22.123 Losses on premises.
(a) *Recording of losses.* A permittee shall determine and record, in the records prescribed by [subpart M of this part](/current/title-27/part-22/subpart-M), the quantity of tax-free or recovered alcohol lost on premises—
(1) At the end of each semi-annual period when the inventory required by [§ 22.162](/current/title-27/section-22.162) is taken, or
(2) Immediately upon the discovery of any loss due to casualty, theft or other unusual causes.
(b) *Claims.* A claim for allowances of losses of tax-free alcohol shall be filed as prescribed in [§ 22.125](/current/title-27/section-22.125), in the following circumstances—
(1) if the quantity lost during any semi-annual inventory period exceeds 1 percent of the quantity to be accounted for during that period, and is more than 10 proof gallons, or
(2) if the loss was due to theft or unlawful use or removal, the permittee shall file a claim for allowances of losses regardless of the quantity involved.
(Approved by the Office of Management and Budget under control number 1512-0334)
#### § 22.124 Incomplete shipments.
(a) Subject to the provisions of this [part and part 19 of this chapter](/current/title-27/part-19), when containers of tax-free alcohol have sustained losses in transit other than by theft, and the shipment will not be delivered to the consignee, the carrier may return the shipment to the distilled spirits plant.
(b) When tax-free alcohol is returned to the distilled spirits plant, in accordance with this section, the carrier shall inform the proprietor, in writing, of the facts and circumstances relating to the loss. In the case of theft, the carrier shall also immediately notify the shipper's appropriate TTB officer of the facts and circumstances relating to the loss.
(c) Subject to the limitations for loss prescribed in [§ 22.122](/current/title-27/section-22.122), the proprietor of the distilled spirits plant shall file a claim for allowance of the entire quantity lost, in the same manner provided in that section. The claim shall include the applicable date required by [§ 22.125](/current/title-27/section-22.125).
#### § 22.125 Claims.
(a) Claims for allowances of losses of tax-free or recovered alcohol shall be filed, on Form 2635 (5620.8), within 30 days from the date the loss is ascertained, and shall contain the following information:
(1) Name, address, and permit number of claimant;
(2) Identification and location of the container(s) from which the tax-free or recovered alcohol was lost, and the quantity lost from each container;
(3) Total quantity of tax-free or recovered alcohol covered by the claim and the aggregate quantity involved;
(4) Date of loss or discovery, the cause or nature of loss, and all relevant facts, including facts establishing whether the loss occurred as a result of negligence, connivance, collusion, or fraud on the part of any person, employee or agent participating in or responsible for the loss; and
(5) Name of carrier where a loss in transit is involved.
(b) The carriers statement regarding a loss in transit, prescribed by [§ 22.122](/current/title-27/section-22.122) or [22.124](/current/title-27/section-22.124), shall accompany the claim.
(c) The appropriate TTB officer may require additional evidence to be submitted in support of the claim.
## Subpart J—Recovery of Tax-Free Alcohol
#### § 22.131 General.
Any person or permittee conducting recovery operations of tax-free alcohol shall be qualified by the terms of their permit to do so, under the provision of [subpart D of this part](/current/title-27/part-22/subpart-D). Restoration of recovered tax-free alcohol may only be accomplished on the permit premises or by the proprietor of a distilled spirits plant.
#### § 22.132 Deposit in storage tanks.
(a) Recovered alcohol shall be accumulated and kept in separate storage tanks conforming to [§ 22.93](/current/title-27/section-22.93). Recovered alcohol shall be measured before being redistilled or reused.
(b) Recovered alcohol may be removed from storage tanks for packaging and shipment to a distilled spirits plant for redistillation.
#### § 22.133 Shipment for redistillation.
(a) Unless a permittee intends to redistill recovered alcohol to its original state, the recovered alcohol shall be shipped in containers to a distilled spirits plant for restoration.
(b) Containers shall be labeled with—
(1) The name, address, and permit number of permittee,
(2) The quantity of recovered alcohol in gallons,
(3) The words “Recovered tax-free alcohol”, and
(4) A package identification number or serial number in accordance with [paragraph (c)(1)](/current/title-27/section-22.133#p-22.133\(c\)\(1\)) or [(c)(2)](/current/title-27/section-22.133#p-22.133\(c\)\(2\)) of this section.
(c)
(1) A package identification number shall apply to all of the packages filled at the same time. All of the packages in one lot shall be the same type, have the same rated capacity, and be uniformly filled with the same quantity. A package identification number shall be derived from the date on which the package is filled, and shall consist of the following elements, in the order shown—
(i) The last two digits of the calendar year;
(ii) An alphabetical designation from “A” through “L”, representing January through December, in that order;
(iii) The digits corresponding to the day of the month; and
(iv) A letter suffix when more than one identical lot is filled into packages during the same day. For successive lots after the first lot, a letter suffix shall be added in alphabetical order, with “A” representing the second lot of the day, “B” representing the third lot of the day, etc. (e.g., the first three lots filled into packages on November 19, 1983, would be identified as “83K19,” “83K19A,” and “83K19B.”
(2) A consecutive serial number shall be marked on each package, beginning with the number “1” and continuing in regular sequence. When any numbering series reaches “1,000,000,” the user may recommence the series by providing an alphabetical prefix or suffix for each number in the new series.
#### § 22.134 Records of shipment.
A consignor shipping recovered alcohol or tax-free alcohol to a distilled spirits plant shall prepare and forward a record of shipment to the consignee. The record of shipment may consist of a shipping invoice, bill, or bill of lading, or another document intended for the same purpose. The record of shipment shall accurately identify and account for the tax-free or recovered alcohol being shipped. A permittee shall file one copy of the record of shipment with the records required by [§ 22.161](/current/title-27/section-22.161).
(Approved by the Office of Management and Budget under control number 1512-0334)
## Subpart K—Destruction
#### § 22.141 General.
A permittee may terminate liability for payment of tax, prescribed by law, when tax-free or recovered alcohol is destroyed in accordance with this subpart.
#### § 22.142 Destruction.
(a) A permittee may destroy tax-free or recovered alcohol upon
(1) The filing of a notice of intention to destroy with the appropriate TTB officer at least 7 days prior to the proposed date of destruction, or
(2) Furnishing the notice to an appropriate TTB officer at the premises who may supervise the destruction or transmit the notice to the appropriate TTB officer.
(b) The notice of intention to destroy shall contain—
(1) The reason for destruction,
(2) The date, time, location and manner of destruction, and
(3) The quantity involved and, if applicable, the package identification numbers of containers.
(c) If, by the date and time specified in the notice, an appropriate TTB officer has not supervised the destruction, or the appropriate TTB officer has not advised the permittee to the contrary, the spirits may be destroyed in the manner stated in the notice.
(d) Following the destruction, if unsupervised by a TTB officer, the permittee shall annotate a copy of the notice with the name of the individual who accomplished or supervised the destruction. This notice shall serve as a record of destruction and shall be maintained with the records required by [§ 22.161](/current/title-27/section-22.161).
(Approved by the Office of Management and Budget under control number 1512-0335)
\[T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985, as amended by T.D. TTB-91, [76 FR 5478](https://www.federalregister.gov/citation/76-FR-5478), Feb. 1, 2011]
## Subpart L—Return, Reconsignment and Disposition of Tax-Free or Recovered Alcohol
#### § 22.151 Return.
A permittee may, following the receipt of tax-free alcohol and for any legitimate reason, return the spirits to any distilled spirits plant if the consignee consents to the shipment. The consignor shall prepare a record of shipment in the same manner prescribed in [§ 22.134](/current/title-27/section-22.134) for shipment of recovered alcohol.
(Approved by the Office of Management and Budget under control number 1512-0334)
#### § 22.152 Reconsignment in transit.
(a) *Reconsignment.* Tax-free alcohol may be reconsigned to another permittee or returned to the consignor if, prior to, or on arrival at the premises of the consignee, the alcohol is determined to be unsuitable for the intended purpose, was shipped in error, or, for any bona fide reason, is not accepted by the consignee or carrier.
(b) *Records of reconsignment.* In the case of reconsignment, the consignor shall cancel the initial record of shipment and prepare a new record of shipment, if the shipment is to another permittee. The new record of shipment shall be annotated “Reconsignment.”
(Approved by the Office of Management and Budget under control number 1512-0334)
\[T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985, as amended by T.D. ATF-443, [66 FR 13015](https://www.federalregister.gov/citation/66-FR-13015), Mar. 2, 2001]
#### § 22.153 Disposition after revocation of permit.
When any permit issued on Form 5150.9 is revoked, all tax-free alcohol in transit and all alcohol on the former permit premises, may be lawfully possessed by the former permittee for the exclusive purpose of disposing of the alcohol, for a period of 60 days following the date of revocation. Any tax-free or recovered alcohol not disposed of within the specified 60-day period, is subject to seizure and forfeiture.
#### § 22.154 Disposition on permanent discontinuance of use.
(a) *Tax-free alcohol.* Tax-free alcohol on hand at the time of discontinuance of use, may be disposed of by
(1) Returning the spirits to a distilled spirits plant, as provided in [§ 22.151](/current/title-27/section-22.151),
(2) Destruction, as provided in [§ 22.142](/current/title-27/section-22.142), or
(3) Shipping to another permittee, in accordance with [§ 22.155](/current/title-27/section-22.155).
(b) *Recovered tax-free alcohol.* Upon permanent discontinuance of use, a permittee may dispose of recovered tax-free alcohol by
(1) Shipment to a distilled spirits plant, as provided in [§ 22.133](/current/title-27/section-22.133),
(2) Destruction, as provided in [§ 22.142](/current/title-27/section-22.142), or
(3) Upon the filing of an application with the appropriate TTB officer, any other approved method.
(Approved by the Office of Management and Budget under control number 1512-0335)
#### § 22.155 Emergency disposition to another permittee.
(a) In the case of an emergency, a permittee may, upon the filing of a notice with the appropriate TTB officer, dispose of tax-free alcohol to another permittee, when the quantity involved does not exceed 10 proof gallons. In the case of a medical emergency or disaster, the appropriate TTB officer is authorized to verbally approve, with the required notice to follow, disposals of tax-free alcohol to another permittee or Government agency in excess of 10 proof gallons. The tax-free alcohol disposed of shall be in original unopened containers. The consignor shall prepare a record of shipment in the same manner prescribed in [§ 22.134](/current/title-27/section-22.134).
(b) The notice required by this section shall
(1) explain the nature of the emergency,
(2) identify the consignee by name, address and permit number, and
(3) list the quantity of alcohol and package identification number of the container(s) involved.
(c) The consignor permittee may not receive remuneration for tax-free alcohol given to another permittee in case of an emergency, as authorized by this section.
(Notice approved by the Office of Management and Budget under control number 1512-0335; recordkeeping approved by the Office of Management and Budget under control number 1512-0334)
## Subpart M—Records of Transactions
#### § 22.161 Records.
(a) *General.* All persons qualified under this part shall keep accurate records of all receipts, shipments, usage, destructions and claims pertaining to the withdrawal and use of tax-free alcohol. These records shall be in sufficient detail to enable the permittee to reconcile any losses or gains for the semi-annual inventory, and to enable appropriate TTB officers to verify all transactions and to ascertain whether there has been compliance with law and regulations. All records required by this section shall identify tax-free alcohol by proof, date of transaction, and quantity involved, and shall include alcohol received from the General Services Administration and the recovery of alcohol and its disposition. Records shall be kept current at all times.
(b) *Records of receipt and shipment.* Records of receipt and shipment shall consist of the consignor's or consignee's (as the case may be) invoice, bill or bill of lading, or another document used for the intended purpose. Records of receipt shall record only the quantity of tax-free alcohol actually received. Losses in transit shall not be considered as received, but may be the subject of a claim for allowances of losses, as prescribed in [subpart I of this part](/current/title-27/part-22/subpart-I).
(c) *Records of usage.* For the purpose of this subpart, tax-free or recovered alcohol shall be considered as “used” when permanently removed from a permittee's supply storeroom, compartment, or tank for any authorized use. Records of usage shall identify the tax-free alcohol by quantity, proof, and purpose of removal (office, department or location to which dispensed). This record shall list separately, the usage of tax-free alcohol from recovered alcohol or alcohol received from the General Services Administration.
(d) *Records of destruction.* Records of destruction shall consist of a copy of the notice of intention to destroy, prescribed in [§ 22.141](/current/title-27/section-22.141), signed by an appropriate TTB officer or employee witnessing the destruction.
(e) *Claims.* Claims for allowance of losses of tax-free alcohol, required to be filed under [subpart I of this part](/current/title-27/part-22/subpart-I), shall consist of Forms 2635 (5620.8) and supporting data.
(Approved by the Office of Management and Budget under control number 1512-0334)
#### § 22.162 Inventories.
Each permittee shall take a physical inventory of the tax-free and recovered alcohol in its possession semi-annually for the periods ending June 30 and December 31 of each year; or other inventory periods which are approximately 6 months apart, upon filing written notice with the appropriate TTB officer establishing other inventory periods. These inventories may be recorded separately or as an entry in the record of usage with any necessary adjustments (losses or gains). If an inventory results in a loss in excess of the quantities prescribed by [subpart I of this part](/current/title-27/part-22/subpart-I), the permittee shall file a claim for allowance of loss.
(Notice approved by the Office of Management and Budget under control number 1512-0335; recordkeeping approved by the Office of Management and Budget under control number 1512-0334)
#### § 22.163 Time for making entries.
Any person who conducts an operation which is required to be recorded under this part, shall enter that operation in the records on the same day the operation occurred. However, the daily posting of records may be deferred to conform to the permittee's normal accounting cycle if (a) supporting or supplemental records are prepared at the time of the operation, and these supporting or supplemental records are to be used to post the daily record, and (b) the deferral of posting does not pose a jeopardy to the revenue.
#### § 22.164 Filing and retention of records.
Each person required to maintain records of operations and transactions under this part shall:
(a) Keep on file all records and copies of claims for a period of not less than 3 years following the date of transaction or, at the discretion of the appropriate TTB officer, an additional 3-year period; and
(b) Maintain all records at the permit premises, except that the records may be kept at a central location by a State or political subdivision of a State, or the District of Columbia which distributes tax-free alcohol to multiple dependent agencies, institutions, or departments.
#### § 22.165 Photographic copies of records.
(a) *General.* Permittees may record, copy, or reproduce required records. Any process may be used which accurately reproduces the original record, and which forms a durable medium for reproducing and preserving the original record.
(b) *Copies of records treated as original records.* Whenever records are reproduced under this section, the reproduced records shall be preserved in conveniently accessible files, and provisions shall be made for examining, viewing, and using the reproduced records the same as if they were the original record, and they shall be treated and considered for all purposes as though they were the original record. All provisions of law and regulations applicable to the original are applicable to the reproduced record. As used in this section, “original record” means the record required by this part to be maintained or preserved by the permittee, even though it may be an executed duplicate or other copy of the document.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended ([26 U.S.C. 5555](https://www.govinfo.gov/link/uscode/26/5555)))
## Subpart N—Use of Tax-Free Spirits by the United States or Government Agency
#### § 22.171 General.
(a) The United States or any of its Government agencies may withdraw tax-free spirits for nonbeverage purposes from a distilled spirits plant under this part, as authorized by [26 U.S.C. 5214(a)(2)](https://www.govinfo.gov/link/uscode/26/5214). Before any tax-free spirits may be withdrawn, a permit to procure the spirits shall be obtained from the appropriate TTB officer.
(b) The provisions of subpart M of [27 CFR part 27](/current/title-27/part-27) cover the withdrawal of imported spirits, free of tax, for use of the United States or any of its Government agencies.
([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214), [5271](https://www.govinfo.gov/link/uscode/26/5271), [5272](https://www.govinfo.gov/link/uscode/26/5272), [5276](https://www.govinfo.gov/link/uscode/26/5276))
\[T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985, as amended by T.D. ATF-285, [54 FR 12610](https://www.federalregister.gov/citation/54-FR-12610), Mar. 28, 1989; T.D. ATF-479, [67 FR 30798](https://www.federalregister.gov/citation/67-FR-30798), May 8, 2002; T.D. TTB-79, [74 FR 37404](https://www.federalregister.gov/citation/74-FR-37404), July 28, 2009]
#### § 22.172 Application and permit, Form 5150.33.
(a) All permits previously issued to the United States or any of its Government agencies on Form 1444 shall remain valid and shall be regulated by the same provisions of this subpart as it refers to permits on Forms 5150.33.
(b) A Government agency shall apply for a permit to obtain tax-free spirits on Form 5150.33. Upon approval, Form 5150.33 will be returned to the Government agency, and shall serve as authority to procure spirits free of tax.
(c) A Government agency may specify on its application for a permit to procure tax-free spirits, Form 5150.33, that it desires a single permit authorizing all sub-agencies under its control to procure tax-free spirits; or each Government location (agency, department, bureau, and etc.) desiring to procure tax-free spirits for nonbeverage purposes may individually submit an application for a permit on Form 5150.33.
(d) An application for a permit shall be signed by the head of the agency or sub-agency, or the incumbent of an office which is authorized by the head of the agency or sub-agency, to sign. Evidence of authorization to sign for the head of the agency or sub-agency shall be furnished with the application.
(e) Tax-free spirits obtained by Government agencies may not be used for non-Government purposes.
\[T.D. ATF-199, [50 FR 9183](https://www.federalregister.gov/citation/50-FR-9183), Mar. 6, 1985; [50 FR 20099](https://www.federalregister.gov/citation/50-FR-20099), May 14, 1985]
#### § 22.173 Procurement of tax-free spirits.
Each Government agency shall retain the original of its permit, Form 5150.33, on file. When placing an initial order with a vendor, the agency shall forward a photocopy of its permit with the purchase order for tax-free spirits. In the case of an agency holding a single permit for use of other sub-agencies, the photocopy of the permit shall contain an attachment listing all other locations authorized to procure tax-free spirits. Any subsequent purchases from the same vendor need only contain the permit number on the purchase order.
#### § 22.174 Receipt of shipment.
On receipt of a shipment of tax-free spirits, a representative of the Government agency shall inspect the shipment for any loss or deficiency. In the case of loss or deficiency, the agency shall annotate the receiving document and forward a copy to the appropriate TTB officer.
#### § 22.175 Discontinuance of use.
When a Government agency, holding a permit issued under this subpart, no longer intends to procure and use tax-free spirits, the permit shall be returned to the appropriate TTB officer for cancellation. All photocopies of the permit furnished to vendors shall be returned to the agency for destruction.
#### § 22.176 Disposition of excess spirits.
At the time of discontinuance of use of tax-free spirits, a Government agency may dispose of any excess tax-free spirits (a) by transferring the spirits to another Government agency holding a permit, (b) by returning the spirits to a vendor, or (c) in any manner authorized by the appropriate TTB officer. Tax-free spirits may not be disposed of to the general public.
# Part 24 — WINE
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-24
Full text of 27 CFR Part 24 — WINE. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 24—WINE
#### Authority:
[5 U.S.C. 552(a)](https://www.govinfo.gov/link/uscode/5/552); [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5008](https://www.govinfo.gov/link/uscode/26/5008), [5041](https://www.govinfo.gov/link/uscode/26/5041), [5042](https://www.govinfo.gov/link/uscode/26/5042), [5044](https://www.govinfo.gov/link/uscode/26/5044), [5061](https://www.govinfo.gov/link/uscode/26/5061), [5062](https://www.govinfo.gov/link/uscode/26/5062), [5121](https://www.govinfo.gov/link/uscode/26/5121), [5122-5124](https://www.govinfo.gov/link/uscode/26/5122), [5173](https://www.govinfo.gov/link/uscode/26/5173), [5206](https://www.govinfo.gov/link/uscode/26/5206), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5215](https://www.govinfo.gov/link/uscode/26/5215), [5351](https://www.govinfo.gov/link/uscode/26/5351), [5353](https://www.govinfo.gov/link/uscode/26/5353), [5354](https://www.govinfo.gov/link/uscode/26/5354), [5356](https://www.govinfo.gov/link/uscode/26/5356), [5357](https://www.govinfo.gov/link/uscode/26/5357), [5361](https://www.govinfo.gov/link/uscode/26/5361), [5362](https://www.govinfo.gov/link/uscode/26/5362), [5364-5373](https://www.govinfo.gov/link/uscode/26/5364), [5381-5388](https://www.govinfo.gov/link/uscode/26/5381), [5391](https://www.govinfo.gov/link/uscode/26/5391), [5392](https://www.govinfo.gov/link/uscode/26/5392), [5511](https://www.govinfo.gov/link/uscode/26/5511), [5551](https://www.govinfo.gov/link/uscode/26/5551), [5552](https://www.govinfo.gov/link/uscode/26/5552), [5661](https://www.govinfo.gov/link/uscode/26/5661), [5662](https://www.govinfo.gov/link/uscode/26/5662), [5684](https://www.govinfo.gov/link/uscode/26/5684), [6065](https://www.govinfo.gov/link/uscode/26/6065), [6091](https://www.govinfo.gov/link/uscode/26/6091), [6109](https://www.govinfo.gov/link/uscode/26/6109), [6301](https://www.govinfo.gov/link/uscode/26/6301), [6302](https://www.govinfo.gov/link/uscode/26/6302), [6311](https://www.govinfo.gov/link/uscode/26/6311), [6651](https://www.govinfo.gov/link/uscode/26/6651), [6676](https://www.govinfo.gov/link/uscode/26/6676), [7302](https://www.govinfo.gov/link/uscode/26/7302), [7342](https://www.govinfo.gov/link/uscode/26/7342), [7502](https://www.govinfo.gov/link/uscode/26/7502), [7503](https://www.govinfo.gov/link/uscode/26/7503), [7606](https://www.govinfo.gov/link/uscode/26/7606), [7805](https://www.govinfo.gov/link/uscode/26/7805), [7851](https://www.govinfo.gov/link/uscode/26/7851); [31 U.S.C. 9301](https://www.govinfo.gov/link/uscode/31/9301), [9303](https://www.govinfo.gov/link/uscode/31/9303), [9304](https://www.govinfo.gov/link/uscode/31/9304), [9306](https://www.govinfo.gov/link/uscode/31/9306).
#### Source:
T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, unless otherwise noted.
## Subpart A—Scope
#### § 24.1 General.
The regulations in this part relate to the establishment and operation (including incidental activities) of wine premises and to the treatment and classification of wine.
#### § 24.2 Territorial extent.
This part applies to the several States of the United States and the District of Columbia.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1337, as amended ([26 U.S.C. 5065](https://www.govinfo.gov/link/uscode/26/5065)))
#### § 24.4 Related regulations.
Regulations related to this part are listed below:
[26 CFR Part 301](/current/title-26/part-301)—Procedure and Administration.
[27 CFR Part 1](/current/title-27/part-1)—Basic Permit Requirements Under the Federal Alcohol Administration Act.
[27 CFR Part 2](/current/title-27/part-2)—Nonindustrial Use of Distilled Spirits and Wine.
[27 CFR Part 4](/current/title-27/part-4)—Labeling and Advertising of Wine.
[27 CFR Part 9](/current/title-27/part-9)—American Viticultural Areas.
[27 CFR Part 16](/current/title-27/part-16)—Alcoholic Beverage Health Warning Statement
[27 CFR Part 18](/current/title-27/part-18)—Production of Volatile Fruit-Flavor Concentrates.
[27 CFR Part 19](/current/title-27/part-19)—Distilled Spirits Plants.
[27 CFR Part 26](/current/title-27/part-26)—Liquors and Articles from Puerto Rico and the Virgin Islands.
[27 CFR Part 27](/current/title-27/part-27)—Importation of Distilled Spirits, Wines and Beer.
[27 CFR Part 28](/current/title-27/part-28)—Exportation of Alcohol.
[27 CFR Part 29](/current/title-27/part-29)—Stills and Miscellaneous Regulations.
[27 CFR Part 30](/current/title-27/part-30)—Gauging Manual.
[27 CFR Part 31](/current/title-27/part-31)—Alcohol Beverage Dealers.
[27 CFR Part 71](/current/title-27/part-71)—Rules of Practice in Permit Proceedings.
[31 CFR Part 225](/current/title-31/part-225)—Acceptance of Bonds Secured by Government Obligations in Lieu of Bonds with Sureties.
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), July 25, 2001; T.D. ATF-463, [66 FR 42734](https://www.federalregister.gov/citation/66-FR-42734), Aug. 15, 2001; T.D. ATF-462, [66 FR 42736](https://www.federalregister.gov/citation/66-FR-42736), Aug. 15, 2001; T.D. ATF-470, [66 FR 58944](https://www.federalregister.gov/citation/66-FR-58944), Nov. 26, 2001; T.D. ATF-479, [67 FR 30798](https://www.federalregister.gov/citation/67-FR-30798), May 8, 2002; T.D. TTB-8, [69 FR 3830](https://www.federalregister.gov/citation/69-FR-3830), Jan. 27, 2004; T.D. TTB-25, [70 FR 19882](https://www.federalregister.gov/citation/70-FR-19882), Apr. 15, 2005; T.D. TTB-146, [82 FR 1123](https://www.federalregister.gov/citation/82-FR-1123), Jan. 4, 2017]
## Subpart B—Definitions
#### § 24.10 Meaning of terms.
When used in this part and in the forms prescribed under this part, terms will have the meanings ascribed in this section. Words in the plural form also include the singular, and *vice versa,* and words indicating the masculine gender also include the feminine. The terms “includes” and “including” do not exclude items not enumerated which are in the same general class. The definitions in this section do not supersede or affect the requirements of [part 4 of this chapter](/current/title-27/part-4), relative to the labeling of wine under the provisions of the Federal Alcohol Administration Act (49 Stat. 981; [27 U.S.C. 205](https://www.govinfo.gov/link/uscode/27/205)).
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Affiliated persons or firms.* When used in connection with “own production”, one or more bonded wine premises proprietors associated as members of the same farm cooperative, or any one or more bonded wine premises proprietors affiliated within the meaning of section 117(a)(5) of the Federal Alcohol Administration Act, as amended (49 Stat. 989; [27 U.S.C. 211](https://www.govinfo.gov/link/uscode/27/211)).
*Agricultural wine.* Wine made from suitable agricultural products other than the juice of grapes, berries, or other fruits.
*Allied products.* Commercial fruit products and by-products (including volatile fruit-flavor concentrate) not taxable as wine.
*Amelioration.* The addition to juice or natural wine before, during, or after fermentation, of either water or pure dry sugar, or a combination of water and sugar to adjust the acid level.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.24, Delegation of the Administrator's Authorities in [27 CFR Part 24](/current/title-27/part-24), Wine.
*Artificially carbonated hard cider.* Hard cider artificially injected with carbon dioxide and containing more than 0.392 but not more than 0.64 gram of carbon dioxide per 100 milliliters.
*Artificially carbonated wine.* Wine (other than hard cider) artificially injected with carbon dioxide and containing more than 0.392 gram of carbon dioxide per 100 milliliters.
*Bonded wine cellar.* Premises established under the provisions of this part. For the purposes of this part a wine premises designated a bonded winery is also a bonded wine cellar. This term includes premises described in the preceding sentence even if the proprietor, as authorized under the exemption set forth in [§ 24.146(d)](/current/title-27/section-24.146#p-24.146\(d\)), has not provided a bond for the premises.
*Bonded wine premises.* Premises established under the provisions of this part on which operations in untaxpaid wine are authorized to be conducted. This term includes premises described in the preceding sentence even if the proprietor, as authorized under the exemption set forth in [§ 24.146(d)](/current/title-27/section-24.146#p-24.146\(d\)), has not provided a bond for the premises.
*Bonded wine warehouse.* Bonded warehouse facilities established under the provisions of this part on wine premises by a warehouse company or other person for the storage of wine and allied products for credit purposes. This term includes facilities described in the preceding sentence even if the warehouse company or other person, as authorized under the exemption set forth in [§ 24.146(d)](/current/title-27/section-24.146#p-24.146\(d\)), has not provided a bond for the facility.
*Bonded winery.* Premises established under the provisions of this part on which wine production operations are conducted and other authorized operations may be conducted. This term includes premises described in the preceding sentence even if the proprietor, as authorized under the exemption set forth in [§ 24.146(d)](/current/title-27/section-24.146#p-24.146\(d\)), has not provided a bond for the premises.
*Bottle.* A container four liters or less in capacity, regardless of the material from which it is made, used to store wine or to remove wine from the wine premises.
*Bottler.* A proprietor of wine premises established under the provisions of this part who fills wine into a bottle.
*Brix.* The quantity of dissolved solids expressed as grams of sucrose in 100 grams of solution at 68 degrees F. (20 degrees C.) (Percent by weight of sugar).
*Bulk container.* Any container larger than 60 liters.
*Business day.* Any day, other than Saturday, Sunday, or a legal holiday. (The term “legal holiday” includes all holidays in the District of Columbia and statewide holidays in a particular State in which a claim, report, or return, as the case may be, is required to be filed, or the act is required to be performed.)
*Calendar quarter and quarterly.* These terms refer to the three-month periods ending on March 31, June 30, September 30, or December 31.
*Calendar year.* The period which begins January 1 and ends on the following December 31.
*Case.* Two or more bottles, or one or more containers larger than four liters, enclosed in a box or fastened together by some other method.
*Chaptalization (Brix adjustment).* The addition of sugar or concentrated juice of the same kind of fruit to juice before or during fermentation to develop alcohol by fermentation.
*Cider.* See definitions for hard cider and tax exempt cider. For the labeling of wine that may be designated as “cider” under the Federal Alcohol Administration Act, see [§ 4.21(e)(5) of this chapter](/current/title-27/section-4.21#p-4.21\(e\)\(5\)).
*Concentrate plant.* An establishment qualified under [part 18 of this chapter](/current/title-27/part-18) for the production of volatile fruit-flavor concentrate.
*Container.* A receptacle, regardless of the material from which it is made, used to store wine or to remove wine from wine premises. (Also see the definition of bulk container for containers larger than 60 liters).
*Director of the service center.* A director of an internal revenue service center.
*Distilled spirits plant.* An establishment qualified under [part 19 of this chapter](/current/title-27/part-19) (excluding alcohol fuel plants) for producing, warehousing, or processing of distilled spirits (including denatured spirits), or manufacturing of articles.
*Distilling material.* Any fermented or other alcoholic substance capable of, or intended for use in, the original distillation or other original processing of spirits.
*District director.* A district director of internal revenue.
*Effervescent wine.* A wine containing more than 0.392 gram of carbon dioxide per 100 milliliters, including artificially carbonated hard cider, artificially carbonated wine, sparkling hard cider, and sparkling wine.
*Electronic fund transfer (EFT).* Any transfer of funds effected by a proprietor's financial institution, either directly or through a correspondent banking relationship, via the Federal Reserve Communications System (FRCS) or Fedwire to the Treasury Account at the Federal Reserve Bank.
*Executed under penalties of perjury.* Signed with the prescribed declaration under the penalties of perjury as provided on or with respect to the return, claim, form, or other document or, where no form of declaration is prescribed, with the declaration: “I declare under the penalties of perjury that this \_\_\_\_\_\_\_\_\_\_ (insert type of document such as statement, report, certificate, application, claim, or other document), including the documents submitted in support thereof, has been examined by me and, to the best of my knowledge and belief, is true, correct, and complete.”
*Export or exportation.* A severance of goods from the mass of things belonging to the United States with the intention of uniting them to the mass of things belonging to some foreign country and will include shipments to any possession of the United States. For the purposes of this part, shipments to the Commonwealth of Puerto Rico and to the territories of the Virgin Islands, American Samoa, and Guam will also be treated as exportations.
*Fiduciary.* A guardian, trustee, executor, receiver, administrator, conservator, or any person acting in any fiduciary capacity for any person.
*Financial institution.* A bank or other financial institution, whether or not a member of the Federal Reserve System, which has access to the Federal Reserve Communications System (FRCS) or Fedwire. The “FRCS” or “Fedwire” is a communications network that allows Federal Reserve System member financial institutions to effect a transfer of funds for their customers (or other financial institutions) to the Treasury account at the Federal Reserve Bank.
*Fold.* The ratio of the volume of the fruit must or juice to the volume of the volatile fruit-flavor concentrate produced from the fruit must or juice; for example, one gallon of volatile fruit-flavor concentrate of 100-fold would be the product from 100 gallons of fruit must or juice.
*Foreign wine.* Wine produced outside the United States.
*Formula wine.* Special natural wine, agricultural wine, and other than standard wine (except for distilling material and vinegar stock) produced on bonded wine premises under an approved formula.
*From bond.* When used with reference to withdrawals of wine, this phrase includes withdrawals from the premises established under the provisions of this part on which operations in untaxpaid wine are authorized to be conducted, even if the proprietor, as authorized under the exemption set forth in [§ 24.146(d)](/current/title-27/section-24.146#p-24.146\(d\)), has not provided a bond for the premises.
*Fruit wine.* Wine made from the juice of sound, ripe fruit (other than grapes). Fruit wine also includes wine made from berries or wine made from a combination of grapes and other fruit (including berries).
*Gallon or wine gallon.* A United States gallon of liquid measure equivalent to the volume of 231 cubic inches.
*Grams per liter.* For the purposes of this part, the unit of measure equivalent to the “parts per thousand” unit of measure prescribed in the Internal Revenue Code of 1986, as amended.
*Grape wine.* Wine made from the juice of sound, ripe grapes.
*Hard cider.* A wine that meets the eligibility requirements set forth in [§ 24.331](/current/title-27/section-24.331) for the hard cider tax rate set forth in [§ 24.270](/current/title-27/section-24.270). See the definitions for artificially carbonated hard cider, sparkling hard cider, and still hard cider.
*Heavy bodied blending wine.* Wine made from fruit without added sugar, with or without added wine spirits, and conforming to the definition of natural wine in all respects except as to maximum total solids content.
*High-proof concentrate.* A volatile fruit-flavor concentrate (essence) that has an alcohol content of more than 24 percent by volume and is unfit for beverage use (nonpotable) because of its natural constituents, i.e., without the addition of other substances.
*In bond.* When used with respect to wine or spirits, “in bond” refers to wine or spirits possessed under bond to secure the payment of the taxes imposed by [26 U.S.C. Chapter 51](https://www.govinfo.gov/link/uscode/26/5101), and on which such taxes have not been determined. Wine or spirits are considered to be possessed under bond if they are possessed by a proprietor who is liable for the tax, even if the proprietor is not required to provide a bond under this chapter. The term includes any wine or spirits on the bonded wine premises or a distilled spirits plant, or in transit between bonded premises (including in the case of wine, bonded wine premises). Additionally, the term refers to wine withdrawn without payment of tax under [26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362) and to spirits withdrawn without payment of tax under [26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214) (a)(5) or (a)(13) with respect to which relief from liability has not yet occurred.
*Invert sugar syrup.* A substantially colorless solution of invert sugar which has been prepared by recognized methods of inversion from pure dry sugar and contains not less than 60 percent sugar by weight (60 degrees Brix).
*Juice.* The unfermented juice (concentrated or unconcentrated) of grapes, other fruit (including berries) and authorized agricultural products exclusive of pulp, skins, or seeds.
*Kind.* Kind means the class and type of wine prescribed in this part and in [27 CFR part 4](/current/title-27/part-4).
*Lees.* The settlings of wine.
*Liquid sugar.* A substantially colorless refined sugar and water solution containing not less than the equivalent of 60 percent pure dry sugar by weight (60 degrees Brix).
*Liter.* A metric unit of capacity equal to 1,000 cubic centimeters at 20 degrees C. or 33.814 United States fluid ounces at 68 degrees F. of alcoholic beverage.
*Lot.* Wine of the same type. When used with reference to a “lot of wine bottled”, lot means the same type of wine bottled or packed on the same date into containers.
*Must.* Unfermented juice or any mixture of juice, pulp, skins, and seeds prepared from grapes or other fruit (including berries).
*Natural wine.* The product of the juice or must of sound, ripe grapes or other sound, ripe fruit (including berries) made with any cellar treatment authorized by [subparts F](/current/title-27/part-24/subpart-F) and [L of this part](/current/title-27/part-24/subpart-L) and containing not more than 21 percent by weight (21 degrees Brix dealcoholized wine) of total solids.
*Nonbeverage wine.* Wine, or wine products made from wine, rendered unfit for beverage use in accordance with [§ 24.215](/current/title-27/section-24.215).
*Own production.* When used with reference to wine in a bonded winery, the term means wine produced by fermentation in the same bonded winery, whether or not produced by a predecessor in interest at the bonded winery. The term includes wine produced by fermentation in bonded wineries owned or controlled by the same or affiliated persons or firms when located within the same State.
*Packer.* A proprietor of wine premises established under the provisions of this part who fills wine into a container larger than four liters.
*Person.* An individual, trust, estate, partnership, association, company, or corporation. When used in connection with penalties, seizures, and forfeitures, the term includes an officer or employee of a corporation or a member or employee of a partnership, who as an officer, employee or member, is under a duty to perform the act in respect of which the violation occurs.
*Proof.* The ethyl alcohol content of a liquid at 60 degrees Fahrenheit, stated as twice the percent of ethyl alcohol by volume.
*Proof gallon.* A United States gallon of liquid at 60 degrees Fahrenheit which contains 50 percent by volume of ethyl alcohol having a specific gravity of 0.7939 at 60 degrees Fahrenheit referred to water at 60 degrees Fahrenheit as unity, or the alcoholic equivalent thereof.
*Proprietor.* The person qualified under this part to operate a wine premises, and includes the term “winemaker” when the context so requires.
*Pure dry sugar.* Refined sugar 95 percent or more by weight dry, having a dextrose equivalent of not less than 95 percent on a dry basis, and produced from cane, beets, or fruit, or from grain or other sources of starch.
*Reconditioning.* The conduct of operations, after original bottling or packing, to restore wine to a merchantable condition. The term includes relabeling or recasing operations.
*Same kind of fruit.* In the case of grapes, all of the species and varieties of grapes. In the case of fruits other than grapes, this term includes all of the several species and varieties of any given kind; except that this will not preclude a more precise identification of the composition of the product for the purpose of its designation.
*Secretary of the Treasury* or *Secretary.* The Secretary of the Treasury or a delegate of the Secretary.
*Sparkling hard cider.* Hard cider containing more than 0.392 but not more than 0.64 gram of carbon dioxide per 100 milliliters of wine, resulting solely from the secondary fermentation of the wine within a closed container.
*Sparkling wine or champagne.* Wine (other than hard cider) containing more than 0.392 gram of carbon dioxide per 100 milliliters of wine resulting solely from the secondary fermentation of the wine within a closed container.
*Special natural wine.* A product produced from a base of natural wine (including heavy bodied blending wine) to which natural flavorings are added, and made pursuant to an approved formula in accordance with [subpart H of this part](/current/title-27/part-24/subpart-H).
*Specially sweetened natural wine.* A product made with a base of natural wine and having a total solids content in excess of 17 percent by weight (17 degrees Brix dealcoholized wine) and an alcohol content of not more than 14 percent by volume.
*Spirits.* That substance known as ethyl alcohol, ethanol, or spirits of wine in any form (including all dilutions or mixtures thereof, from whatever source or by whatever process produced), but not denatured spirits unless specifically stated.
*Standard wine.* Natural wine, specially sweetened natural wine, special natural wine, and standard agricultural wine, produced in accordance with [subparts F](/current/title-27/part-24/subpart-F), [H](/current/title-27/part-24/subpart-H), and [I of this part](/current/title-27/part-24/subpart-I).
*Still hard cider.* A hard cider containing not more than 0.392 gram of carbon dioxide per 100 milliliters.
*Still wine.* Wine (other than hard cider) containing not more than 0.392 gram of carbon dioxide per 100 milliliters.
*Sugar.* Pure dry sugar, liquid sugar, and invert sugar syrup.
*Sweetening.* The addition of juice, concentrated juice or sugar to wine after the completion of fermentation and before taxpayment.
*Tax exempt cider.* Cider produced in accordance with [§ 24.76](/current/title-27/section-24.76)
*Tax year.* The period from July 1 of one calendar year through June 30 of the following year.
*Taxpaid wine.* Wine on which the tax imposed by law has been determined, regardless of whether the tax has actually been paid or the payment of tax has been deferred.
*Taxpaid wine bottling house.* Premises established under the provisions of this part primarily for bottling or packing taxpaid wine.
*Taxpaid wine premises.* Premises established under the provisions of this part on which taxpaid wine operations other than bottling are authorized to be conducted.
*This chapter.* [Title 27, Code of Federal Regulations](/current/title-27), chapter I ([27 CFR chapter I](/current/title-27/chapter-I)).
*To bond.* When used with reference to returns of wine, this phrase includes returns to premises established under the provisions of this part on which operations in untaxpaid wine are authorized to be conducted, even if the proprietor, as authorized under the exemption set forth in [§ 24.146(d)](/current/title-27/section-24.146#p-24.146\(d\)), has not provided a bond for the premises.
*Total solids.* The degrees Brix of unfermented juice or dealcoholized wine.
*Treasury Account.* The Department of Treasury's General Account at the Federal Reserve Bank of New York.
*U.S.C.* The United States Code.
*United States wine.* Wine produced on bonded wine premises in the United States.
*Vinegar.* A wine or wine product not for beverage use produced in accordance with the provisions of this part and having not less than 4.0 grams (4.0 percent) of volatile acidity (calculated as acetic acid and exclusive of sulfur dioxide) per 100 milliliters of wine.
*Volatile fruit-flavor concentrate.* Any concentrate produced by any process which includes evaporations from any fruit mash or juice.
*Wine.* When used without qualification, the term includes every kind (class and type) of product produced on bonded wine premises from grapes, other fruit (including berries), or other suitable agricultural products and containing not more than 24 percent of alcohol by volume. The term includes all imitation, other than standard, or artificial wine and compounds sold as wine. A wine product containing less than one-half of one percent alcohol by volume is not taxable as wine when removed from the bonded wine premises.
*Wine premises.* Premises established under the provisions of this part on which wine operations or other operations are authorized to be conducted.
*Wine spirits.* Brandy or wine spirits authorized under [26 U.S.C. 5373](https://www.govinfo.gov/link/uscode/26/5373) and [§ 24.225](/current/title-27/section-24.225) for use in wine production.
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31077](https://www.federalregister.gov/citation/56-FR-31077), July 9, 1991; T.D. ATF-398, [63 FR 44783](https://www.federalregister.gov/citation/63-FR-44783), Aug. 21, 1998; T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999; T.D. TTB-41, [71 FR 5602](https://www.federalregister.gov/citation/71-FR-5602), Feb. 2, 2006; T.D. TTB-44, [71 FR 16938](https://www.federalregister.gov/citation/71-FR-16938), Apr. 4, 2006; T.D. TTB-89, [76 FR 3509](https://www.federalregister.gov/citation/76-FR-3509), Jan. 20, 2011; T.D. TTB-94, [76 FR 52862](https://www.federalregister.gov/citation/76-FR-52862), Aug. 24, 2011; T.D. TTB-130, [80 FR 55248](https://www.federalregister.gov/citation/80-FR-55248), Sept. 15, 2015; T.D. TTB-146, [82 FR 1123](https://www.federalregister.gov/citation/82-FR-1123), Jan. 4, 2017; T.D. TTB-147, [82 FR 7662](https://www.federalregister.gov/citation/82-FR-7662), Jan. 23, 2017; T.D. TTB-185, [87 FR 51896](https://www.federalregister.gov/citation/87-FR-51896), Aug. 24, 2022; T.D. TTB-196, [89 FR 87942](https://www.federalregister.gov/citation/89-FR-87942), Nov. 6, 2024]
## Subpart C—Administrative and Miscellaneous Provisions
### Authorities
#### § 24.19 Delegations of the Administrator.
Most of the regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.24, Delegation of the Administrator's Authorities in [27 CFR Part 24](/current/title-27/part-24), Wine. You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-44, [71 FR 16938](https://www.federalregister.gov/citation/71-FR-16938), Apr. 4, 2006, as amended by T.D. TB-196, [89 FR 87941](https://www.federalregister.gov/citation/89-FR-87941), Nov. 6, 2024]
#### § 24.20 Forms prescribed.
(a) The appropriate TTB officer is authorized to prescribe all forms required by this part. All of the information called for in each form will be furnished as indicated by the headings on the form and the instructions on or pertaining to the form and as required by this part. The form will be filed in accordance with the instructions for the form.
(b) Forms prescribed by this part are available for printing through the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. 372, [61 FR 20724](https://www.federalregister.gov/citation/61-FR-20724), May 8, 1996; T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999; T.D. TTB-44, [71 FR 16938](https://www.federalregister.gov/citation/71-FR-16938), Apr. 4, 2006; T.D. TTB-196, [89 FR 87941](https://www.federalregister.gov/citation/89-FR-87941), Nov. 6, 2024]
#### § 24.21 Modified forms.
(a) *General.* The appropriate TTB officer may approve the use of a modified form in lieu of the prescribed form required by this part, when in the judgment of the appropriate TTB officer:
(1) Good cause has been shown for the use of the modified form and
(2) The use of the modified form will not result in a net increase in cost to the Government or hinder the effective administration of this part.
Except to adapt tax returns for use with data processing equipment, no proposal for modification of a prescribed form relating to qualification, to the giving of any bond, or to the assessment, payment, or collection of tax will be approved under this section.
(b) *Application.* The proprietor who desires to modify a prescribed form shall submit a written application to the appropriate TTB officer. The application will state the reasons a modified form is necessary and be accompanied by a copy of the proposed form with typical entries.
(c) *Conditions.* A modified form may not be used until the application has been approved by the appropriate TTB officer. Authorization for the use of a modified form is conditioned on compliance with the procedures, conditions, and limitations specified in the approval of the application. The use of a modified form does not relieve the proprietor from any requirement of this part. Authority for use of a modified form may be withdrawn whenever in the judgment of the appropriate TTB officer the effective administration of this part is hindered by the continuation of the authority.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended, 1395, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367), [5555](https://www.govinfo.gov/link/uscode/26/5555)))
(Approved by the Office of Management and Budget under control number 1512-0292)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.22 Alternate method or procedure.
(a) *General.* The proprietor, on specific approval of the appropriate TTB officer as provided in this section, may use an alternate method or procedure in lieu of a method or procedure specifically prescribed in this part. As used in this section, an alternate method or procedure also includes alternate construction or equipment. No alternate method or procedure relating to the giving of any bond or to the assessment, payment, or collection of tax, will be authorized under this section. The appropriate TTB officer may approve an alternate method or procedure, subject to stated conditions, when in the judgment of the appropriate TTB officer:
(1) Good cause has been shown for the use of the alternate method or procedure;
(2) The alternate method or procedure is within the purpose of, and consistent with the effect intended by, the specifically prescribed method or procedure, and affords equivalent security to the revenue; and
(3) The alternate method or procedure will not be contrary to any provision of law, will not result in an increase in cost to the Government, and will not hinder the effective administration of this part.
(b) *Application.* The proprietor who desires to employ an alternate method or procedure shall submit a written application to the appropriate TTB officer. The application will specifically describe the proposed alternate method or procedure, and will set forth the reasons therefor. Alternate methods or procedures will not be employed until the application is approved by the appropriate TTB officer.
(c) *Conditions.* The proprietor shall, during the period of authorization for an alternate method or procedure, comply with the terms of the approved application. Authorization for any alternate method or procedure may be withdrawn whenever in the judgment of the appropriate TTB officer the revenue is jeopardized or the effective administration of this part is hindered by the continuation of the authorization.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended ([26 U.S.C. 5556](https://www.govinfo.gov/link/uscode/26/5556)))
(Approved by the Office of Management and Budget under control number 1512-0292)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), [13684](https://www.federalregister.gov/citation/64-FR-13684), Mar. 22, 1999]
#### § 24.25 Emergency variations from requirements.
(a) *General.* The appropriate TTB officer may approve construction, equipment, and methods of operation other than as specified in this part, when in the judgment of such officer an emergency exists, the proposed variations from the specified requirements are necessary, and the proposed variations:
(1) Will afford the security and protection to the revenue intended by the prescribed specifications;
(2) Will not hinder the effective administration of this part; and
(3) Will not be contrary to any provisions of law.
(b) *Application.* The proprietor must submit a written application to the appropriate TTB officer within 24 hours of any temporary approval granted under [paragraph (c)](/current/title-27/section-24.25#p-24.25\(c\)) of this section, which describes the proposed variation, and sets forth the reasons therefor.
(c) *Temporary approval.* The proprietor who desires to employ an emergency variation from requirements must contact the appropriate TTB officer and request temporary approval until the written application, required by [paragraph (b)](/current/title-27/section-24.25#p-24.25\(b\)) of this section, is acted upon. The appropriate TTB officer will be a subordinate of the TTB officer designated in [paragraph (a)](/current/title-27/section-24.25#p-24.25\(a\)) of this section. Where the emergency threatens life or property, the proprietor may take immediate action to correct the situation without prior notification; however, the proprietor must promptly contact the appropriate TTB officer and file with that officer a report concerning the emergency and the action taken to correct the situation.
(d) *Conditions.* The proprietor must, during the period of variation from requirements granted under this section, comply with the terms of the approved application. A failure to comply in good faith with any procedures, conditions, and limitations will automatically terminate the authority for a variation. Upon termination of the variation, the proprietor must fully comply with requirements of regulations for which the variation was authorized. Authority for any variation may be withdrawn whenever in the judgment of the appropriate TTB officer the revenue is jeopardized or the effective administration of this part is hindered by the continuation of the variation.
\[T.D. ATF-409, [64 FR 13684](https://www.federalregister.gov/citation/64-FR-13684), Mar. 22, 1999]
#### § 24.26 Authority to approve.
The appropriate TTB officer is authorized to approve, except as otherwise provided in this part, all applications, bonds, consents of surety, qualifying documents, claims, and any other documents required by or filed under this part, whether for original establishment, for changes subsequent to establishment, for discontinuance of business, for remission, abatement, credit, or refund of tax, or for any other purpose.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1378, as amended ([26 U.S.C. 5351](https://www.govinfo.gov/link/uscode/26/5351)))
(Approved by the Office of Management and Budget under control number 1512-0292)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.27 Segregation of operations.
The appropriate TTB officer may require the proprietor to segregate operations within any wine premises established under this part, by partitions or otherwise, to the extent deemed necessary to prevent jeopardy to the revenue, to prevent confusion between operations, to prevent substitution with respect to the several methods of producing effervescent wine, and to prevent the commingling of standard wine with other than standard wine.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5365](https://www.govinfo.gov/link/uscode/26/5365)))
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.28 Installation of meters, tanks, and other apparatus.
The appropriate TTB officer may require the proprietor to install meters, tanks, pipes, or any other apparatus for the purpose of protecting the revenue. Any proprietor refusing or neglecting to install a required apparatus will not be permitted to conduct business.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended ([26 U.S.C. 5552](https://www.govinfo.gov/link/uscode/26/5552)))
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.29 Claims.
The appropriate TTB officer may require the proprietor or other person liable for the tax on wine or spirits to file a claim and to submit evidence of loss in any case where wine or spirits are lost or destroyed.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1381, as amended ([26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008), [5043](https://www.govinfo.gov/link/uscode/26/5043), [5370](https://www.govinfo.gov/link/uscode/26/5370)))
(Approved by the Office of Management and Budget under control number 1512-0492)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.30 Supervision.
The appropriate TTB officer may require that operations on wine premises be supervised by any number of appropriate TTB officers necessary for the protection of the revenue or for the enforcement of [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101) and applicable regulations.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended, 1395, as amended ([26 U.S.C. 5366](https://www.govinfo.gov/link/uscode/26/5366), [5553](https://www.govinfo.gov/link/uscode/26/5553)))
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), [13684](https://www.federalregister.gov/citation/64-FR-13684), Mar. 22, 1999]
#### § 24.31 Submission of forms and reports.
The appropriate TTB officer may require the proprietor to submit to an appropriate TTB officer copies of prescribed transaction forms, records, reports, or source records used to prepare records, reports or tax returns.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1396, as amended ([26 U.S.C. 5555](https://www.govinfo.gov/link/uscode/26/5555)))
(Approved by the Office of Management and Budget under control number 1512-0492)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), [13684](https://www.federalregister.gov/citation/64-FR-13684), Mar. 22, 1999]
#### § 24.32 Records.
The appropriate TTB officer may require the proprietor to maintain any record required by this part in a prescribed format or arrangement or otherwise change the method of recordkeeping in any case where the required information is not clearly or accurately reflected.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended, 1395, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367), [5555](https://www.govinfo.gov/link/uscode/26/5555)))
(Approved by the Office of Management and Budget under control number 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.35 Right of entry and examination.
Under [26 U.S.C. 7601](https://www.govinfo.gov/link/uscode/26/7601), [7602](https://www.govinfo.gov/link/uscode/26/7602), and [7606](https://www.govinfo.gov/link/uscode/26/7606), appropriate TTB officers have authority to inspect during normal business hours the records, stocks, and wine premises (including any portion designated as a bonded wine warehouse) of the proprietor to determine compliance with all provisions of the internal revenue laws and regulations. In addition, for the purposes prescribed in [27 CFR 70.22](/current/title-27/section-70.22), appropriate TTB officers may examine financial records, books of account, and any other books, papers, records, and data relevant to an inquiry. Any denial or interference with any inspection by the proprietor, or by agents or employees of the proprietor, is a violation of [26 U.S.C. 7342](https://www.govinfo.gov/link/uscode/26/7342) and may be subject to an appropriate penalty. (August 16, 1954, Ch. 736, 68A Stat. 872, as amended, 901, as amended, 903, as amended ([26 U.S.C. 5560](https://www.govinfo.gov/link/uscode/26/5560), [7342](https://www.govinfo.gov/link/uscode/26/7342), [7601](https://www.govinfo.gov/link/uscode/26/7601), [7602](https://www.govinfo.gov/link/uscode/26/7602), [7606](https://www.govinfo.gov/link/uscode/26/7606)))
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13684](https://www.federalregister.gov/citation/64-FR-13684), Mar. 22, 1999]
#### § 24.36 Instruments and measuring devices.
All instruments and measuring devices required by this part to be furnished by the proprietor for the purpose of testing and measuring wine, spirits, volatile fruit-flavor concentrate, and materials will be maintained by the proprietor in accurate and readily usable condition. The appropriate TTB officer may disapprove the use of any equipment or means of measurement found to be unsuitable for the intended purpose, inaccurate, or not in accordance with regulations. In this case, the proprietor shall promptly provide suitable and accurate equipment or measuring devices. (Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended, 1381, as amended ([26 U.S.C. 5357](https://www.govinfo.gov/link/uscode/26/5357), [5366](https://www.govinfo.gov/link/uscode/26/5366), [5368](https://www.govinfo.gov/link/uscode/26/5368), [5552](https://www.govinfo.gov/link/uscode/26/5552)))
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13684](https://www.federalregister.gov/citation/64-FR-13684), Mar. 22, 1999]
#### § 24.37 Samples for the United States.
Appropriate TTB officers are authorized to take samples of wine, spirits, volatile fruit-flavor concentrate, or any other material which may be added to wine products, for analysis, testing, etc., free of tax to determine compliance with the provisions of law and regulation.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended, 1382, as amended, 1392, as amended, 1396, as amended ([26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362), [5373](https://www.govinfo.gov/link/uscode/26/5373), [5511](https://www.govinfo.gov/link/uscode/26/5511), [7510](https://www.govinfo.gov/link/uscode/26/7510)))
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13684](https://www.federalregister.gov/citation/64-FR-13684), Mar. 22, 1999]
### Facilities and Assistance
#### § 24.40 Gauging and measuring.
Appropriate TTB officers may require the proprietor to furnish the necessary facilities and assistance to gauge or measure wine or spirits in any container or to examine any apparatus, equipment, container, or material on wine premises.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended, 1381, as amended, 1395, as amended, 1396, as amended ([26 U.S.C. 5357](https://www.govinfo.gov/link/uscode/26/5357), [5366](https://www.govinfo.gov/link/uscode/26/5366), [5368](https://www.govinfo.gov/link/uscode/26/5368), [5555](https://www.govinfo.gov/link/uscode/26/5555)))
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13684](https://www.federalregister.gov/citation/64-FR-13684), Mar. 22, 1999]
#### § 24.41 Office facilities.
The appropriate TTB officer may require the proprietor to furnish temporarily a suitable work area, desk and equipment necessary for the use of appropriate TTB officers in performing Government duties whether or not such office space is located at the specific premises where regulated operations occur or at corporate business offices where no regulated activity occurs. Such office facilities will be subject to approval by the appropriate TTB officer.
\[T.D. ATF-409, [64 FR 13684](https://www.federalregister.gov/citation/64-FR-13684), Mar. 22, 1999]
### Employer Identification Number
#### § 24.45 Use on returns.
The employer identification number (as defined at [26 CFR 301.7701-12](/current/title-26/section-301.7701-12)) of the taxpayer who has been assigned such a number will be shown on each return filed pursuant to the provisions of this part, including amended returns. Failure of the taxpayer to include the employer identification number on any return filed pursuant to the provisions of this part may result in the assertion and collection of the penalty prescribed in [27 CFR 70.113](/current/title-27/section-70.113) of this chapter. (Pub. L. 87-397, 75 Stat. 828, as amended ([26 U.S.C. 6109](https://www.govinfo.gov/link/uscode/26/6109), [6676](https://www.govinfo.gov/link/uscode/26/6676)))
(Approved by the Office of Management and Budget under control number 1512-0492)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-301, [55 FR 47605](https://www.federalregister.gov/citation/55-FR-47605), Nov. 14, 1990]
#### § 24.46 Application.
(a) An employer identification number will be assigned pursuant to application on Internal Revenue Service (IRS) Form SS-4 filed by the taxpayer. IRS Form SS-4 may be obtained from the director of the service center or from any district director.
(b) An application on IRS Form SS-4 will be made by the taxpayer who, prior to filing the first return, has neither secured nor made application for an employer identification number. An application on IRS Form SS-4 will be filed on or before the seventh day after the date on which the first return is filed.
(c) Each taxpayer shall make application for and be assigned only one employer identification number, regardless of the number of places of business for which the taxpayer is required to file a tax return under the provisions of this part. (Pub. L. 87-397, 75 Stat. 828, as amended ([26 U.S.C. 6109](https://www.govinfo.gov/link/uscode/26/6109)))
(Approved by the Office of Management and Budget under control number 1512-0492)
#### § 24.47 Execution of IRS Form SS-4.
(a) *Preparation.* The application on IRS Form SS-4, together with any supplementary statement, will be prepared in accordance with the form instructions and applicable regulations. The application will be filed with the director of the internal revenue service center as instructed on the Form SS-4.
(b) *Signature.* The application will be signed by:
(1) The individual, if the taxpayer is an individual; or,
(2) The president, vice president, other principal officer, or other person authorized to sign, if the taxpayer is a corporation; or,
(3) A responsible and duly authorized member or officer having knowledge of its affairs, if the taxpayer is a partnership or other unincorporated organization; or,
(4) The fiduciary, if the taxpayer is a trust or estate. (Pub. L. 87-397, 75 Stat. 828, as amended ([26 U.S.C. 6109](https://www.govinfo.gov/link/uscode/26/6109)))
(Approved by the Office of Management and Budget under control number 1512-0492)
### Dealer Registration and Recordkeeping
#### § 24.50 \[Reserved]
#### § 24.51 Definitions.
For purposes of [§§ 24.52](/current/title-27/part-24/section-24.52) through [24.54 of this part](/current/title-27/part-24/section-24.54), the following terms have the meanings indicated:
*Dealer.* A person who sells, or offers for sale, any alcohol product (distilled spirits, wines, and/or beer) fit for beverage use.
*Retail dealer in liquors.* A dealer who sells, or offers for sale, distilled spirits, wines, or beer to any person other than a dealer.
*Wholesale dealer in liquors.* A dealer who sells, or offers for sale, distilled spirits, wines, or beer to another dealer.
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121), [5122](https://www.govinfo.gov/link/uscode/26/5122))
\[T.D. TTB-79, [74 FR 37404](https://www.federalregister.gov/citation/74-FR-37404), July 28, 2009]
#### § 24.52 Dealer registration.
Every proprietor who sells or offers for sale any alcohol product (distilled spirits, wines, or beer) fit for beverage use must register as a dealer in accordance with [part 31 of this chapter](/current/title-27/part-31). However, the proprietor's application to establish and operate a bonded wine premises or taxpaid wine bottling house filed under [subpart D of this part](/current/title-27/part-24/subpart-D), and approval of that application by the appropriate TTB officer, will constitute the proprietor's registration as a dealer at the approved bonded or taxpaid wine premises. Every proprietor registered as a dealer under this section will be classified as a wholesale dealer in liquors (see [§ 31.32 of this chapter](/current/title-27/section-31.32)) and as such may also operate as a retail dealer in liquors without additional registration. Registration covers all sales from the same location, including sales of spirits, beer, or other proprietors' wine. As provided in [§ 31.52 of this chapter](/current/title-27/section-31.52), the proprietor is subject to no additional registration for making sales of wine or beer at the customer's place of business. Otherwise, a proprietor who conducts business as a dealer at a location other than the bonded wine premises or taxpaid wine bottling house must register and keep records in accordance with [part 31 of this chapter](/current/title-27/part-31).
([26 U.S.C. 5124](https://www.govinfo.gov/link/uscode/26/5124))
\[T.D. TTB-79, [74 FR 37404](https://www.federalregister.gov/citation/74-FR-37404), July 28, 2009]
#### § 24.53 Amending the dealer registration.
Every proprietor registered as a dealer under [§ 24.52](/current/title-27/section-24.52) must maintain a current and accurate application file under [subpart D of this part](/current/title-27/part-24/subpart-D). Whenever there is a change to any of the information provided in the proprietor's approved application, the proprietor must amend the application within the time period specified in [subpart D of this part](/current/title-27/part-24/subpart-D). An amendment of the proprietor's wine premises approved application will also amend the proprietor's dealer registration under [§ 24.52](/current/title-27/section-24.52). The proprietor's dealer registration will also terminate when wine operations authorized under this part terminate.
([26 U.S.C. 5124](https://www.govinfo.gov/link/uscode/26/5124))
\[T.D. TTB-79, [74 FR 37404](https://www.federalregister.gov/citation/74-FR-37404), July 28, 2009]
#### § 24.54 Dealer records.
Every dealer is required to maintain records of transactions. Wine transactions that appear in the records required by [subpart O of this part](/current/title-27/part-24/subpart-O) will meet the proprietor's recordkeeping requirements as a dealer. For other transactions not covered in the wine premises records, such as retail sales of distilled spirits or beer in a restaurant at the wine premises, or operations as a wholesale dealer in distilled spirits or beer, the proprietor must keep the records specified for dealers in [part 31 of this chapter](/current/title-27/part-31).
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121), [5122](https://www.govinfo.gov/link/uscode/26/5122), [5123](https://www.govinfo.gov/link/uscode/26/5123))
\[T.D. TTB-79, [74 FR 37404](https://www.federalregister.gov/citation/74-FR-37404), July 28, 2009]
### Assessments
#### § 24.60 General.
Where the appropriate TTB officer determines by examination of records, inventories, or otherwise that the proprietor has incurred liability for the tax on wine, distilled spirits, or special (occupational) tax, and the proprietor does not pay the tax upon notification of the liability, the tax will be assessed.
(August 16, 1954, Ch. 736, 68A Stat. 767, as amended ([26 U.S.C. 6201](https://www.govinfo.gov/link/uscode/26/6201)))
(Approved by the Office of Management and Budget under control number 1512-0492)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.61 Assessment of tax.
When wine or spirits in bond are lost or destroyed (except wine or spirits on which the tax is not collectible by reason of the provisions of [26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008) or [26 U.S.C. 5370](https://www.govinfo.gov/link/uscode/26/5370), as applicable) and the proprietor or other person liable for the tax on the wine or spirits fails to file a claim when required pursuant to [§ 24.29](/current/title-27/section-24.29) or when the claim is denied, the tax will be assessed. In any case where wine is produced, imported, or received otherwise than as authorized by law, or where wine or spirits are removed, possessed, or knowingly used in violation of applicable law, or volatile fruit-flavor concentrate is sold, transported, or used in violation of law, the tax will be assessed.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended, 1323, as amended, 1332, as amended, 1335, as amended, 1381, as amended, 1387, as amended, 1392, as amended ([26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5008](https://www.govinfo.gov/link/uscode/26/5008), [5043](https://www.govinfo.gov/link/uscode/26/5043), [5061](https://www.govinfo.gov/link/uscode/26/5061), [5370](https://www.govinfo.gov/link/uscode/26/5370), [5391](https://www.govinfo.gov/link/uscode/26/5391), [5512](https://www.govinfo.gov/link/uscode/26/5512)))
(Approved by the Office of Management and Budget under control number 1512-0492)
#### § 24.62 Notice.
If an investigation or an examination of records discloses that liability for the tax on wine or distilled spirits, or special (occupational) tax has been incurred by the proprietor, the appropriate TTB officer will notify the proprietor by letter of the basis and the amount of the proposed assessment in order to afford the proprietor an opportunity to submit a protest, with supporting evidence, within 45 days, or to request a conference with regard to the tax liability. However, if collection of the tax liability may be jeopardized by a delay, the appropriate TTB officer may take immediate jeopardy assessment action pursuant to [26 U.S.C. 6862](https://www.govinfo.gov/link/uscode/26/6862).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1381, as amended ([26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008), [5370](https://www.govinfo.gov/link/uscode/26/5370), [6862](https://www.govinfo.gov/link/uscode/26/6862)))
(Approved by the Office of Management and Budget under control number 1513-0088)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999; T.D. TTB-196, [89 FR 87941](https://www.federalregister.gov/citation/89-FR-87941), Nov. 6, 2024]
### Claims
#### § 24.65 Claims for wine or spirits lost or destroyed in bond.
(a) *Claim for remission of tax on spirits.* All claims for remission of tax required by this part, relating to the loss or destruction of spirits in bond, will be filed with the appropriate TTB officer within 30 days of discovery of the loss. A claim filed under this paragraph will set forth the following information:
(1) The name, registry number, and location of the distilled spirits plant which produced the spirits;
(2) The serial numbers of the containers from which the spirits were lost, the quantity lost from each, and the total quantity of spirits covered by the claim;
(3) The total amount of tax for which claim is filed;
(4) The date of the loss or destruction (or, if not known, the date of discovery);
(5) The nature and cause (if known) of the loss will be stated specifically and in sufficient detail to disclose all material facts and circumstances surrounding the loss;
(6) If lost in transit, the name of the carrier and the points between which shipped; and
(7) If lost by theft, evidence establishing that the loss did not occur as the result of negligence, connivance, collusion, or fraud on the part of the proprietor, owner, consignor, consignee, bailee or carrier, or the agents or employees of any of them.
(b) *Claim for allowance of loss on wine.* A claim for allowance of loss required by this part, relating to the loss or destruction of wine in bond, will be filed with the appropriate TTB officer. A claim for allowance of loss for wine lost in transit, by fire or other casualty, or any other extraordinary or unusual losses, including a loss by theft, will be filed immediately. Any other claim for allowance of loss will be attached to and submitted with the TTB F 5120.17, Report of Bonded Wine Premises Operations, for the reporting period in which the inventory required by [§ 24.313](/current/title-27/section-24.313) is taken or, in the case of discontinuance of the premises or change in proprietorship, to the final report filed. A claim filed under this paragraph will set forth the information required by paragraphs (a)(5) to (a)(7) of this section and, in addition, will set forth the following information:
(1) The original volume of wine which sustained the loss, the tax class, the quantity of wine lost, and the percentage of wine lost;
(2) Where the claim covers losses sustained at bonded wine premises during the tax year, the claimant shall state:
(i) The quantities of wine on hand at the beginning of the tax year, received in bond during the tax year, and produced during the tax year;
(ii) Where the percentage of loss is calculated separately by tax class, the volume of wine by tax class; and
(iii) If effervescent wine is produced, the volume of wine produced by fermentation in bottles, by artificial carbonation, and by bulk processing; and
(3) Claims covering losses of wine during transit in bond will show the volume lost from each container, the serial number, if any, and the volume shipped.
(c) *Claim for abatement, credit or refund.* A claim for an abatement of an assessment under [§ 24.61](/current/title-27/section-24.61), or credit or refund of tax which has been paid or determined, will be filed with the appropriate TTB officer in accordance with the provisions of this paragraph and the provisions of [27 CFR part 70, subpart F](/current/title-27/part-70/subpart-F). A claim filed under this paragraph with respect to spirits, wine, or volatile fruit-flavor concentrate, will set forth the applicable information required by [paragraphs (a)](/current/title-27/section-24.65#p-24.65\(a\)) and [(b)](/current/title-27/section-24.65#p-24.65\(b\)) of this section. In addition, any claim filed under this paragraph will set forth the following information:
(1) The date of the assessment for which abatement is claimed; and
(2) The name, registry number, and address of the premises where the tax was assessed (or name, address, and title of any other person who was assessed the tax, if the tax was not assessed against the proprietor).
(d) *Indemnification or recompense.* A claim filed under [paragraph (a)](/current/title-27/section-24.65#p-24.65\(a\)) or [(b)](/current/title-27/section-24.65#p-24.65\(b\)) of this section will specify whether the claimant has been or will be indemnified or recompensed for the spirits or wine lost and, if so, the amount and nature of indemnity or recompense and the actual value of the spirits or wine, less the tax.
(e) *Supporting documents.* A claim filed under [paragraph (a)](/current/title-27/section-24.65#p-24.65\(a\)), [(b)](/current/title-27/section-24.65#p-24.65\(b\)), or [(c)](/current/title-27/section-24.65#p-24.65\(c\)) of this section will be supported by affidavits of persons having personal knowledge of the loss or destruction. In addition, if filed for tax on wine or spirits lost in transit, the claim will be supported by a copy of the carrier's bill of lading.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended, 1381, as amended, 1382, as amended ([26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008), [5370](https://www.govinfo.gov/link/uscode/26/5370), [5373](https://www.govinfo.gov/link/uscode/26/5373)))
(Approved by the Office of Management and Budget under control numbers 1512-0216 and 1512-0492)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1991, as amended by T.D. ATF-338, [58 FR 19063](https://www.federalregister.gov/citation/58-FR-19063), Apr. 12, 1993; T.D. ATF-376, [61 FR 31030](https://www.federalregister.gov/citation/61-FR-31030), June 19, 1996; T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.66 Claims on wine returned to bond.
(a) *General.* A claim for credit or refund, or relief from liability, of tax on wine returned to bonded wine premises will be filed with the appropriate TTB officer within six months after the date of the return of the wine to bond. A single claim may not be filed under this section for a quantity on which credit or refund of tax would be in an amount less than \$25. This limitation does not apply with respect to any returned wine on which the six month period for filing a claim will expire.
(b) *Filing.* A claim filed under this section will set forth the following information:
(1) The kind, volume, and tax class of the wine;
(2) As to each tax class, the amount of tax previously paid or determined; and
(3) The date the wine was returned to bond.
(c) *Indemnification or recompense.* A claim filed under this section will specify whether the claimant has been or will be indemnified or recompensed for the wine returned to bond and if so, the amount and nature of indemnity or recompense and the actual value of the wine, less the tax.
(Sec. 201., Pub. L. 85-859, 72 Stat. 1332, as amended, 1380, as amended ([26 U.S.C. 5044](https://www.govinfo.gov/link/uscode/26/5044), [5361](https://www.govinfo.gov/link/uscode/26/5361), [5371](https://www.govinfo.gov/link/uscode/26/5371)))
(Approved by the Office of Management and Budget under control number 1513-0030)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999; T.D. TTB-130, [80 FR 55248](https://www.federalregister.gov/citation/80-FR-55248), Sept. 15, 2015]
#### § 24.67 Other claims.
The requirements with respect to a claim for:
(a) Remission of tax on wine withdrawn without payment of tax under the provisions of [§ 24.292](/current/title-27/section-24.292), and lost in transit to the port of export, vessel or aircraft, foreign-trade zone, customs bonded warehouse, or manufacturing bonded warehouse, as applicable, are contained in [27 CFR part 28](/current/title-27/part-28).
(b) Refund or credit of any tax imposed on wine or other liquors by [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101), part I, subchapter A, on the grounds that an amount of tax was assessed or collected erroneously, illegally, without authority, or in any manner wrongfully, or on the grounds that the amount was excessive, are contained in [27 CFR part 70 subpart F](/current/title-27/part-70/subpart-F).
(c) Payment of an amount equal to the internal revenue tax paid or determined and customs duties paid on wines or other liquors previously withdrawn, which are lost, rendered unmarketable, or condemned by a duly authorized official as a result of
(1) A major disaster,
(2) Fire, flood, casualty, or other disaster, or
(3) Breakage, destruction, or damage (excluding theft) resulting from vandalism or malicious mischief, are found in [27 CFR part 70, subpart G](/current/title-27/part-70/subpart-G).
(Approved by the Office of Management and Budget under control number 1512-0492)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-376, [61 FR 31030](https://www.federalregister.gov/citation/61-FR-31030), June 19, 1996; T.D. TTB-8, [69 FR 3830](https://www.federalregister.gov/citation/69-FR-3830), Jan. 27, 2004]
#### § 24.68 Insurance coverage.
The remission, abatement, refund, credit, or other relief, of taxes on wine or spirits provided for under this part will be allowed only to the extent that the claimant is not indemnified or recompensed for such tax by any valid claim of insurance or otherwise.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1382, as amended ([26 U.S.C. 5064](https://www.govinfo.gov/link/uscode/26/5064), [5371](https://www.govinfo.gov/link/uscode/26/5371)))
#### § 24.69 Filing of claims.
(a) *Claims.* All claims filed under this part for abatement, refund, credit, or remission of tax will be filed on TTB F 5620.8 (2635). Each claim filed under this part will:
(1) Show the name, address, and title of the claimant;
(2) Be signed by the claimant or the duly authorized agent of the claimant; and
(3) Be executed under the penalties of perjury.
(b) *Supporting documents.* Forms, supporting statements, and any other documents required by this part to be submitted with a claim will be attached to the claim and be considered a part of the claim. The appropriate TTB officer may require the submission of additional evidence in support of any claim filed under this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5064](https://www.govinfo.gov/link/uscode/26/5064), [5370](https://www.govinfo.gov/link/uscode/26/5370)))
(Approved by the Office of Management and Budget under control number 1512-0492)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.70 Claims for credit of tax.
Claims for credit of tax, as provided in this part, may be filed after determination of the tax whether or not the tax has been paid. Where a claim for credit of tax is filed, the claimant shall, upon receipt of notification of allowance of credit from the appropriate TTB officer, make an adjusting entry on the next tax return (or returns) to the extent necessary to exhaust the credit. The claimant shall also make an explanatory statement on each tax return specifically identifying the notification of allowance of credit. The claimant may not anticipate allowance of a credit or make an adjusting entry in a tax return until TTB has acted on the claim.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1332, as amended, 1335, as amended, 1381, as amended, 1395, as amended ([26 U.S.C. 5043](https://www.govinfo.gov/link/uscode/26/5043), [5044](https://www.govinfo.gov/link/uscode/26/5044), [5061](https://www.govinfo.gov/link/uscode/26/5061), [5370](https://www.govinfo.gov/link/uscode/26/5370), [5555](https://www.govinfo.gov/link/uscode/26/5555)))
(Approved by the Office of Management and Budget under control number 1512-0492)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
### Tax Exempt Wine
#### § 24.75 Wine for personal or family use.
(a) *General.* Any adult may, without payment of tax, produce wine for personal or family use and not for sale.
(b) *Quantity.* The aggregate amount of wine that may be produced exempt from tax with respect to any household may not exceed:
(1) 200 gallons per calendar year for a household in which two or more adults reside, or
(2) 100 gallons per calendar year if there is only one adult residing in the household.
(c) *Definition of an adult.* For the purposes of this section, an adult is any individual who is 18 years of age or older. However, if the locality in which the household is located has established by law a greater minimum age at which wine may be sold to individuals, the term “adult” will mean an individual who has attained that age.
(d) *Proprietors of bonded wine premises.* Any adult, defined in [§ 24.75(c)](/current/title-27/section-24.75#p-24.75\(c\)), who operates a bonded wine premises as an individual owner or in partnership with others, may produce wine and remove it from the bonded wine premises free of tax for personal or family use, subject to the limitations in [§ 24.75(b)](/current/title-27/section-24.75#p-24.75\(b\)).
(e) *Limitation.* This exemption should not in any manner be construed as authorizing the production of wine in violation of applicable State or local law. Except as provided in [§ 24.75(d)](/current/title-27/section-24.75#p-24.75\(d\)), this exemption does not otherwise apply to partnerships, corporations, or associations.
(f) *Removal.* Wine produced under this section may be removed from the premises where made for personal or family use including use at organized affairs, exhibitions or competitions, such as home winemaker's contests, tastings or judgings, but may not under any circumstances be sold or offered for sale. The proprietor of a bonded wine premises shall pay the tax on any wine removed for personal or family use in excess of the limitations provided in this section and shall also enter all quantities removed for personal or family use on TTB F 5120.17, Report of Bonded Wine Premises Operations.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1331, as amended ([26 U.S.C. 5042](https://www.govinfo.gov/link/uscode/26/5042)))
(Approved by the Office of Management and Budget under control number 1512-0216)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1991, as amended by T.D. ATF-338, [58 FR 19064](https://www.federalregister.gov/citation/58-FR-19064), Apr. 12, 1993; T.D. ATF-344, [58 FR 40354](https://www.federalregister.gov/citation/58-FR-40354), July 28, 1993]
#### § 24.76 Tax exempt cider.
Cider, when produced solely from the noneffervescent fermentation of apple juice without the use of any preservative method or material, and when produced at a place other than a bonded wine premises and sold or offered for sale as cider, and not as wine or as a substitute for wine, is not subject to the tax on wine, or to the provisions of this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1331, as amended ([26 U.S.C. 5042](https://www.govinfo.gov/link/uscode/26/5042)))
#### § 24.77 Experimental wine.
(a) *General.* Any scientific university, college of learning, or institution of scientific research may, without payment of tax, produce, receive, blend, treat, and store wine for experimental or research use, but not for consumption (other than organoleptic tests) or sale, and may receive wine spirits without payment of tax in quantities as may be necessary for the production of wine.
(b) *Qualification.* An institution that wants to conduct experimental wine operations must apply in letter form to the appropriate TTB officer. The application will show the name and address of the institution, the nature, extent, and purpose of the operations to be conducted, describe the operations and equipment and the location at which operations will be conducted (including identification of the building or buildings, or portions thereof, to be used), and the security measures to be provided. If wine spirits are to be used, that fact will be stated together with the estimated annual requirements in proof gallons. A secure place of storage under lock will be provided for such spirits and will be described in the application. The applicant must, when required by the appropriate TTB officer, furnish as part of the application, additional information that may be necessary to determine whether the application should be approved. Operations may not begin until authorized by the appropriate TTB officer.
(c) *Procurement of spirits.* Where the approved application provides for the use of wine spirits in experimental wine operations, such spirits may be procured to the extent stated in the approved qualifying application. However, an application will be filed with the appropriate TTB officer and authorization obtained for each wine spirits procurement.
(d) *Records.* All approved qualifying documents and applications will be retained in the files of the institution and will be exhibited on request to appropriate TTB officers. No reports concerning wine or wine spirits need be filed unless required by appropriate TTB officer, but records appropriate to the experiments to be conducted and records documenting the disposition of the wine and wine spirits will be retained and will be made available for inspection by appropriate TTB officers. If wine spirits are used, the records will show the quantities of spirits received and used each day.
(e) *Discontinuance.* When an institution discontinues experimental wine operations, all remaining wine or wine spirits will be disposed of either by destruction or shipment to premises authorized to receive wine or wine spirits. A letter application will be filed with the appropriate TTB officer and authorization obtained prior to the destruction or shipment of the wine or wine spirits. When the authorized destruction or shipment has been completed, a letter notification will be sent to the appropriate TTB officer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1331, as amended ([26 U.S.C. 5042](https://www.govinfo.gov/link/uscode/26/5042)))
(Approved by the Office of Management and Budget under control numbers 1512-0292 and 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), [13684](https://www.federalregister.gov/citation/64-FR-13684), Mar. 22, 1999]
### Formulas
#### § 24.80 General.
The proprietor shall, before production, obtain approval of the formula and process by which special natural wine, agricultural wine, and other than standard wine (except distilling material or vinegar stock) are to be made. The formula must be prepared and filed on TTB F 5120.29, Formula and Process for Wine, in accordance with the instructions on the form. A nonbeverage wine formula will show the intended use of the finished wine or wine product. Any formula approved under this section will remain in effect until revoked, superseded, or voluntarily surrendered. Except for research, development, and testing, no special natural wine, agricultural wine, or, if required to be covered by an approved formula, wine other than standard wine may be produced prior to approval by the appropriate TTB officer of a formula covering each ingredient and process (if the process requires approval) used in the production of the product.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended, 1381, as amended, 1386, as amended, 1395, as amended ([26 U.S.C. 5361](https://www.govinfo.gov/link/uscode/26/5361), [5367](https://www.govinfo.gov/link/uscode/26/5367), [5386](https://www.govinfo.gov/link/uscode/26/5386), [5387](https://www.govinfo.gov/link/uscode/26/5387), [5555](https://www.govinfo.gov/link/uscode/26/5555)))
(Approved by the Office of Management and Budget under control number 1512-0059)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13684](https://www.federalregister.gov/citation/64-FR-13684), Mar. 22, 1999]
#### § 24.81 Filing of formulas.
The proprietor shall on each formula filed designate all ingredients and, if required, describe each process used to produce the wine. The addition or elimination of ingredients, changes in quantities used, and changes in the process of production, or any other change in an approved formula, will require the filing of a new TTB F 5120.29. After a change in formula is approved, the original formula must be surrendered to the appropriate TTB officer. The proprietor shall serially number each formula, commencing with “1” and continuing thereafter in numerical sequence. Nonbeverage wine formulas will be prefixed with the symbol “NB.” The appropriate TTB officer may at any time require the proprietor to file a statement of process in addition to that required by the TTB F 5120.29 or any other data to determine whether the formula should be approved or the approval continued.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended, 1395, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367), [5555](https://www.govinfo.gov/link/uscode/26/5555)))
(Approved by the Office of Management and Budget under control number 1512-0059)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13684](https://www.federalregister.gov/citation/64-FR-13684), Mar. 22, 1999]
#### § 24.82 Samples.
Except for vinegar and salted wine as defined in [§ 24.215](/current/title-27/section-24.215), the proprietor shall submit under separate cover at the time of filing any nonbeverage wine formula a 750 mL sample of the base wine used and a 750 mL sample of the finished wine or wine product. The latter sample will be considered representative of the finished product. Any material change in the flavor or other characteristics of the finished product from that of the approved sample will require the filing of a new formula even though the ingredients may be the same. In addition, the appropriate TTB officer may, at any time, require the proprietor to submit samples of any wine or wine product made in accordance with an approved formula or of any materials used in production.
(Sec. 201, Pub. L 85-859, 72 Stat. 1380, as amended ([26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362)))
(Approved by the Office of Management and Budget under control number 1512-0059)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31077](https://www.federalregister.gov/citation/56-FR-31077), July 9, 1991; T.D. ATF-409, [64 FR 13684](https://www.federalregister.gov/citation/64-FR-13684), Mar. 22, 1999]
### Essences
#### § 24.85 Essences.
Essences or extracts (preparations of natural constituents extracted from fruit, herbs, berries, wood, etc.) may be used in the production of any formula wine except agricultural wine. The essences may be produced on wine premises or elsewhere. Where an essence contains spirits, use of the essence may not increase the volume of the wine more than 10 percent nor its alcohol content more than four percent by volume.
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. TTB-185, [87 FR 51896](https://www.federalregister.gov/citation/87-FR-51896), Aug. 24, 2022]
#### § 24.86 Essences produced on wine premises.
Wine, taxpaid spirits, or spirits withdrawn tax-free may be used in the production of essences on wine premises. The description of the process for producing the essence may be included as part of a formula for the production of a formula wine or a separate formula may be filed on TTB F5120.29. If a separate formula is filed for the essence, the serial number of the formula by which it is produced will be shown in the TTB F 5120.29 covering the formula wine in which it is to be used. If an essence is to be made in quantities greater than required for individual lots of formula wine, and stored on the premises, a separate formula will be filed for the essence. Essences made on wine premises with wine spirits withdrawn free of tax pursuant to [26 U.S.C. 5214(a)(5)](https://www.govinfo.gov/link/uscode/26/5214) may only be used in the production of a formula wine, and may not be removed from the premises where made. Essences made on wine premises with the use of tax-free spirits withdrawn free of tax pursuant to [26 U.S.C. 5214(a)(13)](https://www.govinfo.gov/link/uscode/26/5214) may only be used in the production of a nonbeverage wine or wine product and may not be removed from the premises where made. The TTB F 5120.29 for the production of an essence is filed in the same manner as for the production of formula wine and a sample of the essence produced will be at least four fluid ounces.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1386, as amended ([26 U.S.C. 5386](https://www.govinfo.gov/link/uscode/26/5386)))
(Approved by the Office of Management and Budget under control number 1512-0059)
#### § 24.87 Essences made elsewhere.
Before an essence not made on wine premises may be used in the production of formula wine, the manufacturer of the essence shall obtain approval from the appropriate TTB officer. The request for approval will identify the essence by name or number and by the name of the manufacturer, and a sample of at least four fluid ounces of the essence will be submitted. However, a request for approval and submission of a sample is not required if the essence is made pursuant to approval of a formula on TTB F 5530.5, Formula and Process for Nonbeverage Product. Essences made under an approved formula on TTB F 5530.5 will be described on TTB F 5120.29 by showing the name of the manufacturer, the manufacturer's nonbeverage drawback formula number, and the date of approval by the appropriate TTB officer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1386, as amended ([26 U.S.C. 5386](https://www.govinfo.gov/link/uscode/26/5386)))
(Approved by the Office of Management and Budget under control number 1512-0059)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
### Conveyance of Wine or Spirits on Wine Premises
#### § 24.90 Taxpaid products.
Taxpaid wine or other taxpaid products may be conveyed across bonded wine premises, but may neither be stored nor allowed to remain on bonded wine premises and will be kept separate from untaxpaid wine or spirits. However, upon payment or determination of the tax, bulk wine may remain on bonded wine premises until the close of the business day following the day the tax was paid or determined, respectively, or the bonded wine premises on which the tank is located may be alternated as taxpaid wine premises.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5365](https://www.govinfo.gov/link/uscode/26/5365)))
#### § 24.91 Conveyance of untaxpaid wine or spirits.
Untaxpaid wine or spirits may be conveyed between different portions of the same bonded wine premises. Untaxpaid wine or spirits may also be conveyed by uninterrupted transportation over any public thoroughfare, or over a private roadway if the owner or lessee of the roadway agrees, in writing, to allow appropriate TTB officers access to the roadway to perform their official duty. The conveyance of wine or spirits as authorized in this section is subject to the following conditions:
(a) The untaxpaid wine or spirits are not stored or allowed to remain on any premises other than bonded wine premises;
(b) The untaxpaid wine or spirits are kept completely separate from taxpaid wine or spirits; and
(c) A description of the means and route of conveyance and of the portions of the bonded wine premises between which wine or spirits will be conveyed, as well as a copy of any agreement furnished by the owner or lessee of a private roadway, have been submitted to and approved by the appropriate TTB officer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended, 1381, as amended ([26 U.S.C 5357](https://www.govinfo.gov/link/uscode/26/5357), [5365](https://www.govinfo.gov/link/uscode/26/5365)))
(Approved by the Office of Management and Budget under control number 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), [13684](https://www.federalregister.gov/citation/64-FR-13684), Mar. 22, 1999]
#### § 24.92 Products in customs custody.
Products in customs custody may be conveyed across bonded wine premises subject to the following conditions:
(a) The products are not stored or allowed to remain on bonded wine premises beyond the close of the business day; and
(b) The products in customs custody are kept separate from wine and spirits on bonded wine premises.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended, 1380, as amended, 1381, as amended ([26 U.S.C 5357](https://www.govinfo.gov/link/uscode/26/5357), [5361](https://www.govinfo.gov/link/uscode/26/5361), [5365](https://www.govinfo.gov/link/uscode/26/5365)))
### Samples
#### § 24.95 General.
Wine or wine spirits may be withdrawn free of tax from a bonded wine premises for use by or for the account of the proprietor or the agents of the proprietor, for analysis or testing, organoleptically or otherwise. Wine or wine spirits may be used for testing purposes, and wine may be used for tasting or sampling on bonded wine premises free of tax.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended, 1382, as amended ([26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362), [5372](https://www.govinfo.gov/link/uscode/26/5372), [5373](https://www.govinfo.gov/link/uscode/26/5373)))
#### § 24.96 Use off premises.
The proprietor may remove samples of wine or wine spirits free of tax for analysis or testing purposes.
(a) *Size.* The size of each sample may not be more than one liter for each lot of wine or wine spirits to be analyzed or tested unless the appropriate TTB officer authorizes a larger quantity.
(b) *Disposition of samples.* Remnants or residues of samples remaining after analysis or testing, and which are not retained as specimens, will be destroyed or returned to bonded wine premises. Free of tax samples or residues may not be consumed or sold.
(c) *Records.* The proprietor shall maintain records of all samples taken for analysis or testing, showing the size of each sample, the kind of wine or wine spirits, date of removal, and the name and address to where sent.
(d) *Labeling of samples.* Each sample taken for analysis or testing will be labeled “Sample for Analysis Only”. The label will show the name, address, and registry number of the bonded wine premises, date, and the kind of wine or wine spirits.
(e) *Limitation.* The tax will be collected on any wine or wine spirits withdrawn under this section which are used or disposed of for purposes other than as authorized. When the quantity of wine or wine spirits withdrawn under this section exceeds the amount necessary for the purpose intended the tax will be collected on such excess.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended, 1381, as amended, 1382, as amended ([26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362), [5367](https://www.govinfo.gov/link/uscode/26/5367), [5368](https://www.govinfo.gov/link/uscode/26/5368), [5373](https://www.govinfo.gov/link/uscode/26/5373)))
(Approved by the Office of Management and Budget under control numbers 1512-0298 and 1512-0503)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.97 Use on premises.
(a) *Analysis or testing.* The proprietor may take samples of wine or wine spirits free of tax for analysis or testing on bonded wine premises. The proprietor shall maintain records showing the size, kind of wine or wine spirits, date, and disposition of each sample retained as a laboratory specimen. The label of each sample retained as a laboratory specimen will be marked “Sample for Analysis Only” and will show the kind of wine or wine spirits.
(b) *Tasting.* The proprietor may take samples of wine free of tax for organoleptic tasting on bonded wine premises. If a room or area is set aside for public tasting purposes, a record will be maintained showing the date, quantity and kind of wine transferred to the room or area for tasting.
(c) *Limitation.* The tax will be collected on any wine or wine spirits withdrawn under this section which are used or disposed of for purposes other than as authorized. When the quantity of wine or wine spirits withdrawn under this section exceeds the amount necessary for the purpose intended the tax will be collected on such excess.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1382, as amended ([26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362), [5372](https://www.govinfo.gov/link/uscode/26/5372)))
(Approved by the Office of Management and Budget under control numbers 1512-0298 and 1512-0503)
## Subpart D—Establishment and Operations
#### § 24.100 General.
Each person desiring to conduct operations in wine production, as specified in [§ 24.101(b)](/current/title-27/section-24.101#p-24.101\(b\)), (other than the production of wine free of tax as provided in [§§ 24.75](/current/title-27/section-24.75) through [24.77](/current/title-27/section-24.77)) shall, prior to commencing operations, establish wine premises, make application as provided in [§ 24.105](/current/title-27/section-24.105), file any required bond, and receive permission to operate wine premises as provided in this part. After approval, the wine premises will be designated a bonded winery, bonded wine cellar or taxpaid wine bottling house. As provided in [§ 24.107](/current/title-27/section-24.107), the designated bonded winery will be used if production operations are to be conducted. In addition, wine premises may be used, in accordance with the provisions of this part, for the conduct of certain other operations.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1378, as amended ([26 U.S.C. 5351](https://www.govinfo.gov/link/uscode/26/5351), [5352](https://www.govinfo.gov/link/uscode/26/5352)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13684](https://www.federalregister.gov/citation/64-FR-13684), Mar. 22, 1999; T.D. TTB-146, [82 FR 1123](https://www.federalregister.gov/citation/82-FR-1123), Jan. 4, 2017]
### Premises and Operations
#### § 24.101 Bonded wine premises.
(a) *General.* A person desiring to conduct operations involving untaxpaid wine, including the use of spirits in wine production, shall file an application and any required bond as provided in [§ 24.105](/current/title-27/section-24.105). Further, a warehouse company or other person may, upon obtaining the consent of the proprietor and the surety on the bond (if a bond is required) and upon filing an application, as provided in [§ 24.108](/current/title-27/section-24.108), and receiving approval, establish at the wine premises a bonded wine warehouse for the storage of wine and allied products for credit purposes.
(b) *Authorized operations.* Except as provided in this part, no operation may be conducted on bonded wine premises other than those authorized. The following operations are authorized:
(1) The receipt, production, blending, cellar treatment, storage, and bottling or packing of untaxpaid wine;
(2) The use of wine spirits in beverage wine production and the use of spirits in nonbeverage wine production;
(3) The receipt, preparation, use, or removal of fruit, concentrated or unconcentrated fruit juice, or other materials to be used in the production or cellar treatment of wine; and
(4) The preparation, storage, or removal of commercial fruit products and by-products (including volatile fruit-flavor concentrate) not taxable as wine.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1378, as amended, 1379, as amended, 1380, as amended ([26 U.S.C. 5351](https://www.govinfo.gov/link/uscode/26/5351), [5353](https://www.govinfo.gov/link/uscode/26/5353), [5361](https://www.govinfo.gov/link/uscode/26/5361)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13684](https://www.federalregister.gov/citation/64-FR-13684), Mar. 22, 1999; T.D. TTB-146, [82 FR 1123](https://www.federalregister.gov/citation/82-FR-1123), Jan. 4, 2017]
#### § 24.102 Premises established for taxpaid wine operations.
A person desiring to bottle or pack taxpaid United States or foreign wine shall file an application as provided in [§ 24.105](/current/title-27/section-24.105) to establish a taxpaid wine bottling house premises. A person desiring to conduct taxpaid United States or foreign wine operations, other than bottling or packing taxpaid wine, at bonded wine premises shall include in their application, as provided in [§ 24.109](/current/title-27/section-24.109), the establishment of taxpaid wine premises.
(a) *Taxpaid wine premises.* Premises on which taxpaid United States or foreign wine may be received and stored, or blended with wine of the same kind and tax class, or reconditioned, and removed.
(b) *Taxpaid wine bottling house premises.* Premises on which taxpaid United States or foreign wine may be received, stored, mixed with wine of the same kind, tax class and country of origin to facilitate handling, reconditioned, bottled or packed, and removed.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1378, as amended, 1381, as amended ([26 U.S.C. 5352](https://www.govinfo.gov/link/uscode/26/5352), [5363](https://www.govinfo.gov/link/uscode/26/5363)))
(Approved by the Office of Management and Budget under control number 1512-0058)
#### § 24.103 Other operations.
Upon the specific approval of the appropriate TTB officer, other operations not provided for in this part may be conducted on wine premises. Authority to conduct other operations may be obtained by submitting an application to the appropriate TTB officer. The application must specifically describe the operation to be conducted and the wine premises and equipment to be used. An appropriate TTB officer may make any inquiry necessary to determine whether the conduct of other operations on wine premises would jeopardize the revenue, conflict with wine operations, or be contrary to law. Other operations authorized under this section will be conducted in accordance with the conditions, limitations, procedures, and terms stated in the approved application. Authority to conduct other operations may be withdrawn whenever the appropriate TTB officer determines the conduct of the other operations on wine premises jeopardizes the revenue, conflicts with wine operations, or is contrary to law.
\[T.D. ATF-409, [64 FR 13685](https://www.federalregister.gov/citation/64-FR-13685), Mar. 22, 1999]
### Application
#### § 24.105 General.
A person desiring to establish a bonded winery, bonded wine cellar or taxpaid wine bottling house shall file an application on TTB F 5120.25, Application to Establish and Operate Wine Premises. Approval of TTB F 5120.25 will constitute authorization for the proprietor to operate. The premises may not be used for the conduct of operations under this part unless the proprietor has a valid approved application for the operations. The application will be executed under the penalties of perjury and all written statements, affidavits, and any document incorporated by reference will be considered a part of the application. In any instance where a bond is required to be given under [§ 24.146](/current/title-27/section-24.146) or a permit obtained to engage in an operation, the currently approved application will not be valid with respect to that operation if the bond or permit is no longer in effect. In this case, the proprietor shall again file an application and obtain approval before engaging in operations at the wine premises. A new application is not required when a strengthening bond is filed pursuant to [§ 24.153](/current/title-27/section-24.153) or a new bond or superseding bond is filed pursuant to [§ 24.154](/current/title-27/section-24.154). The appropriate TTB officer may require the filing of a new or an amended application in any instance where the currently approved application is inadequate or incorrect in any respect.
(August 16, 1954, Ch. 736, 68A Stat. 749, as amended ([26 U.S.C. 6065](https://www.govinfo.gov/link/uscode/26/6065)); sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended, 1392, as amended ([26 U.S.C. 5356](https://www.govinfo.gov/link/uscode/26/5356), [5511](https://www.govinfo.gov/link/uscode/26/5511)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999; T.D. TTB-146, [82 FR 1124](https://www.federalregister.gov/citation/82-FR-1124), Jan. 4, 2017]
#### § 24.106 Basic permit requirements.
Any person intending to engage in the business of producing or blending wine or purchasing wine for resale at wholesale is required under the Federal Alcohol Administration Act, as amended (49 Stat. 978; [27 U.S.C. 203](https://www.govinfo.gov/link/uscode/27/203)) to obtain a basic permit. A State, a political subdivision of a State, or officers or employees of a State or political subdivision acting in their official capacity are exempted from this requirement. The issuance of a basic permit under the Act is governed by regulations in [27 CFR part 1](/current/title-27/part-1). Where a basic permit is required to engage in an operation, an application for a basic permit will be filed at the time of filing an original or amended application on TTB F 5120.25. Operations requiring a basic permit may not be conducted until the basic permit application is approved. No Wine Producer's and Blender's Basic Permit or Wine Blender's Basic Permit is required for a bonded wine cellar established only for the purpose of storing untaxpaid wine even though an approved application, TTB F 5120.25, and bond are required.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1378, as amended ([26 U.S.C. 5351](https://www.govinfo.gov/link/uscode/26/5351)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13685](https://www.federalregister.gov/citation/64-FR-13685), Mar. 22, 1999]
#### § 24.107 Designation as a bonded winery.
Bonded wine premises which will be used for the production of wine or for production processes involving the use of wine will be designated a bonded winery unless the proprietor applies for a bonded wine cellar designation. If the proprietor of a bonded wine premises designated as a bonded winery does not engage in wine production operations, the appropriate TTB officer may notify the proprietor that the designation of the premises is changed from a bonded winery to a bonded wine cellar.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1378, as amended ([26 U.S.C. 5351](https://www.govinfo.gov/link/uscode/26/5351)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.108 Bonded wine warehouse application.
A warehouse company or other person desiring to establish a bonded wine warehouse on bonded wine premises for storing wine or allied products for credit purposes shall file an application, in letter form, with the appropriate TTB officer. The name and address of the applicant and of the bonded wine premises, and the approximate area and storage capacity (in gallons) of the bonded wine warehouse, will be stated in the application. The application will be accompanied by a signed statement from the proprietor of the bonded wine premises requesting the establishment of the warehouse, and the consent of the surety of the bond for the bonded wine premises.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended ([26 U.S.C. 5353](https://www.govinfo.gov/link/uscode/26/5353)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.109 Data for application.
The TTB F 5120.25 is prepared in accordance with the instructions on the form and will include the following, as applicable:
(a) Serial number;
(b) Name and principal business address of the applicant and the address of the wine premises if different from the business address;
(c) Statement of the type of business organization and of each person having an interest in the business, supported by the items of information listed in [§ 24.110](/current/title-27/section-24.110);
(d) Indicate whether the application is for the purpose of establishing a bonded winery, bonded wine cellar, or taxpaid wine bottling house. Also, indicate whether a taxpaid wine premises is to be established if the application is for a bonded winery or bonded wine cellar;
(e) List of the offices, the incumbents of which are authorized by the articles of incorporation or the board of directors to act on behalf of the proprietor or to sign the applicant's name;
(f) Description of the premises (see [§ 24.111](/current/title-27/section-24.111));
(g) Trade names (see [§ 24.112](/current/title-27/section-24.112));
(h) Description of spirits operations;
(i) With respect to wine premises to which the application relates, a list of the applicant's basic permits and bonds (including those filed with the application) showing the name of the surety for each bond;
(j) Description of volatile fruit-flavor concentrate operations (see [§ 24.113](/current/title-27/section-24.113));
(k) If other operations not specifically authorized by this part are to be conducted on wine premises, a description of the operations, a list of the premises, and a statement as to the relationship, if any, of the operation to wine operations on wine premises. If any of the information required by [paragraph (c)](/current/title-27/section-24.109#p-24.109\(c\)) of this section is on file with the appropriate TTB officer in connection with any other premises operated by the applicant, that information, if accurate and complete, may be incorporated by reference and made a part of the application. In this case, the name, address, and if any, registry number of the premises where the information is filed will be stated in the application.
(l) A statement whether the applicant is required to furnish a bond under [§ 24.146](/current/title-27/section-24.146); and
(m) The applicant shall, when required by the appropriate TTB officer, furnish as part of the application, additional information as may be necessary to determine whether the application should be approved. If any of the submitted information changes during the pending application, the applicant shall immediately notify the appropriate TTB officer of the revised information.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended, 1392, as amended ([26 U.S.C. 5356](https://www.govinfo.gov/link/uscode/26/5356), [5361](https://www.govinfo.gov/link/uscode/26/5361), [5511](https://www.govinfo.gov/link/uscode/26/5511)))
(Approved by the Office of Management and Budget under control number 1513-0009)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13685](https://www.federalregister.gov/citation/64-FR-13685), Mar. 22, 1999; T.D. TTB-146, [82 FR 1124](https://www.federalregister.gov/citation/82-FR-1124), Jan. 4, 2017; T.D. TTB-159, [85 FR 33542](https://www.federalregister.gov/citation/85-FR-33542), June 2, 2020]
#### § 24.110 Organizational documents.
The supporting information required by [paragraph (c) of § 24.109](/current/title-27/section-24.109#p-24.109\(c\)), includes, as applicable, copies of:
(a) *Corporate documents.*
(1) Corporate charter or a certificate of corporate existence or incorporation.
(2) List of the directors and officers, showing their names and addresses.
(3) Certified extracts or digests of minutes of meetings of the board of directors, authorizing certain individuals to sign for the corporation.
(4) Statement showing the number of shares of each class of stock or other evidence of ownership, authorized and outstanding, and the voting rights of the respective owners or holders of stock.
(b) *Articles of partnership.* True copies of the articles of partnership, if any, and of the certificate of partnership or association.
(c) *Statement of interest.*
(1) Names and addresses of the 10 persons having the largest ownership or other interest in each of the classes of stock in the corporation, or other legal entity, and the nature and amount of the stockholding or other interest of each, whether the interest appears in the name of the interested party or in the name of another party. If a corporation is wholly-owned or controlled by another corporation, those persons of the parent corporation who meet the above standards are considered to be the persons interested in the business of the subsidiary, and the names thereof need to be furnished only upon the request of the appropriate TTB officer.
(2) In the case of an individual owner or partnership, the name and address of each person interested in the wine premises, whether the interest appears in the name of the interested party or in the name of another for that person.
(d) *Availability of additional corporate documents.* The originals of documents required to be submitted under this section and additional documents that may be required by the appropriate TTB officer (such as articles of incorporation, bylaws, and any certificate issued by a State authorizing operations) must be made available to any appropriate TTB officer upon request.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended ([26 U.S.C. 5356](https://www.govinfo.gov/link/uscode/26/5356)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), [13685](https://www.federalregister.gov/citation/64-FR-13685), Mar. 22, 1999]
#### § 24.111 Description of premises.
The application will include a description of each tract of land comprising wine premises. The description will be by directions and distances, in feet and inches (or hundredths of feet), with sufficient particularity to enable ready determination of the bounds of the wine premises. When required by the appropriate TTB officer, a diagram of the wine premises, drawn to scale, will be furnished. The description will clearly indicate any area of the wine premises to be used as bonded wine premises, used as taxpaid wine premises, or alternated for use as bonded wine premises and taxpaid wine premises. The means employed to afford security and protect the revenue will be described. If required by the appropriate TTB officer to segregate operations within the premises, the manner by which the operations are segregated will be described. Each building on wine premises will be described as to size, construction, and use. Buildings on wine premises which will not be used for wine operations will be described only as to size and use. If the wine premises consist of a part of a building, the rooms or floors will be separately described. The activities conducted in the adjoining portions of the building and the means of ingress and egress from the wine premises will be described.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended, 1381, as amended ([26 U.S.C. 5356](https://www.govinfo.gov/link/uscode/26/5356), [5357](https://www.govinfo.gov/link/uscode/26/5357), [5365](https://www.govinfo.gov/link/uscode/26/5365)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.112 Name of proprietor and trade names.
The applicant shall list on the application, TTB F 5120.25, the proprietor's name or the operating trade name, if different than the proprietor's name, and any bottling or packing trade names. However, if a bottling or packing trade name is listed on a basic permit issued to the proprietor under the Federal Alcohol Administration Act (49 Stat 978; [27 U.S.C. 204](https://www.govinfo.gov/link/uscode/27/204)), that trade name is not required to be listed again on the application. If State or local law requires the registration of a trade name, the applicant shall certify that each trade name listed on the application is so registered. A trade name may not be used prior to approval of the application or issuance of a basic permit covering the use of the name.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended ([26 U.S.C. 5356](https://www.govinfo.gov/link/uscode/26/5356)))
(Approved by the Office of Management and Budget under control number 1512-0058)
#### § 24.113 Description of volatile fruit-flavor concentrate operations.
Each applicant intending to produce volatile fruit-flavor concentrate shall include on the TTB F 5120.25 application a step-by-step description of the production procedure to be employed. The description will commence with the obtaining of juice from the fruit and continue through each step of the process to removal of volatile fruit-flavor concentrate from the system. If volatile fruit-flavor concentrate containing more than 24 percent alcohol (high-proof concentrates (essences)) is to be produced, the proprietor shall indicate any step in the production procedure at which any spirits may be fit for beverage purposes. The maximum quantity in gallons of fruit must used and volatile fruit-flavor concentrate produced in 24 hours, the maximum and minimum fold, and the maximum percent of alcohol in the volatile fruit-flavor concentrate will be stated for each kind of fruit used.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended, 1380, as amended, 1392, as amended ([26 U.S.C. 5356](https://www.govinfo.gov/link/uscode/26/5356), [5361](https://www.govinfo.gov/link/uscode/26/5361), [5511](https://www.govinfo.gov/link/uscode/26/5511)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. TTB-91, [76 FR 5478](https://www.federalregister.gov/citation/76-FR-5478), Feb. 1, 2011]
#### § 24.114 Registry of stills.
Any still intended for use in the production of volatile fruit-flavor concentrate will be set up on bonded wine premises. Each still is subject to the provisions of [subpart C of part 29 of this chapter](/current/title-27/part-29/subpart-C) and will be registered. The listing of a still in the application, and the approval of the application, will, as provided in [27 CFR 29.55](/current/title-27/section-29.55), constitute registration.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1355, as amended, 1379, as amended, 1392, as amended ([26 U.S.C. 5179](https://www.govinfo.gov/link/uscode/26/5179), [5356](https://www.govinfo.gov/link/uscode/26/5356), [5511](https://www.govinfo.gov/link/uscode/26/5511)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13685](https://www.federalregister.gov/citation/64-FR-13685), Mar. 22, 1999; T.D. ATF-462, [66 FR 42737](https://www.federalregister.gov/citation/66-FR-42737), Aug. 15, 2001]
#### § 24.115 Registry number.
Upon approval of the application, the appropriate TTB officer will assign a registry number to the bonded winery, bonded wine cellar, or taxpaid wine bottling house. The registry number will be used in all correspondence and on all documents filed subsequently in connection with the operation of the premises and will be shown where required on labels and markings of containers or cases filled at the wine premises.
(Approved by the Office of Management and Budget under control numbers 1512-0058 and 1512-0503)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.116 Powers of attorney.
The proprietor shall file with the appropriate TTB officer a power of attorney for each person authorized to sign or to act on behalf of the proprietor as an attorney-in-fact. A power of attorney is not required for any person whose authority has been furnished in the application. If not limited in duration, the power of attorney will continue in effect until written notice of revocation is received by the appropriate TTB officer or operations are terminated.
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), [13685](https://www.federalregister.gov/citation/64-FR-13685), Mar. 22, 1999]
#### § 24.117 Maintenance of application file.
The proprietor shall maintain an application file with the information required by [§ 24.109](/current/title-27/section-24.109) in complete and current condition, readily available at the wine premises for inspection by appropriate TTB officers.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended ([26 U.S.C. 5356](https://www.govinfo.gov/link/uscode/26/5356), [5367](https://www.govinfo.gov/link/uscode/26/5367)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13684](https://www.federalregister.gov/citation/64-FR-13684), Mar. 22, 1999]
### Changes Subsequent to Original Establishment
#### § 24.120 Amended application.
Where there is a change in any of the information included in the current approved application, the proprietor shall, within 30 days of the change (except as otherwise provided in this part), submit an amended application to the appropriate TTB officer and set forth the information necessary to make the application file accurate and current. Where the change affects only pages or parts of pages of the current application, as many complete pages as will enable the replacement of the pages affected and maintenance of the file as provided in [§ 24.117](/current/title-27/section-24.117) will be submitted.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended ([26 U.S.C. 5356](https://www.govinfo.gov/link/uscode/26/5356)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.121 Changes affecting permits.
The proprietor shall follow the provisions of [27 CFR part 1](/current/title-27/part-1) to effect any change pertaining to a permit issued under the Federal Alcohol Administration Act.
(49 Stat. 978; [27 U.S.C. 203](https://www.govinfo.gov/link/uscode/27/203)).
#### § 24.122 Change in name of proprietor or trade name.
Where there is to be a change in the name of the proprietor or operating trade name, the proprietor shall file an amended application and, if a basic permit has been issued under the Federal Alcohol Administration Act (49 Stat. 978; [27 U.S.C. 203](https://www.govinfo.gov/link/uscode/27/203)), an application for amendment of the basic permit. Where there is a change in or addition of a trade name, the proprietor shall file an amended application or, if a basic permit has been issued under the Federal Alcohol Administration Act (49 Stat. 978; [27 U.S.C. 203](https://www.govinfo.gov/link/uscode/27/203)), an application for amendment of the basic permit. Operations under a new name may not be conducted before approval of the amended application or issuance of an amended permit, as the case may be.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended ([26 U.S.C. 5356](https://www.govinfo.gov/link/uscode/26/5356)))
(Approved by the Office of Management and Budget under control number 1512-0058)
#### § 24.123 Change in stockholders.
If there is a change in the list of stockholders furnished under the provisions of [§ 24.110(c)(1)](/current/title-27/section-24.110#p-24.110\(c\)\(1\)), the proprietor may, in lieu of submission within 30 days of the change under the provisions of [§ 24.120](/current/title-27/section-24.120), submit a new list of stockholders annually on May 1, or any other approved date, to the appropriate TTB officer which has on file the list of stockholders, provided the sale or transfer of capital stock does not result in a change in the control or management of the business.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended ([26 U.S.C. 5356](https://www.govinfo.gov/link/uscode/26/5356)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.124 Change in corporate officers.
Where there is any change in the list of corporate officers furnished under the provisions of [§ 24.110(a)(2)](/current/title-27/section-24.110#p-24.110\(a\)\(2\)), the proprietor shall submit, within 30 days of the change, an amended application supported by a new list of corporate officers and a statement of the changes reflected in the new list. Where the proprietor has shown that certain corporate officers listed on the original application have no responsibilities in connection with the operations covered by the application, the appropriate TTB officer may waive the requirement for submitting an amended application to cover a change in those corporate officers.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended ([26 U.S.C. 5356](https://www.govinfo.gov/link/uscode/26/5356)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.125 Change in proprietorship.
(a) *General.* If there is a change in the proprietorship of wine premises qualified to operate under this part, the outgoing proprietor shall comply with the requirements of [§ 24.140](/current/title-27/section-24.140), and the successor shall, before commencing operations, apply for and obtain any required permits, file any required bonds, and file an application for and receive permission to operate in the same manner as a person qualifying a new wine premises; however, the successor may, in the manner provided in [§ 24.127](/current/title-27/section-24.127), adopt the approved formulas of the outgoing proprietor. Wine, spirits, and winemaking materials may be transferred from an outgoing proprietor to a successor in the manner provided in [§ 24.140](/current/title-27/section-24.140).
(b) *Fiduciary.* A successor to the proprietorship of wine premises who is an administrator, executor, receiver, trustee, assignee, or other fiduciary shall, except as otherwise provided in this section, comply with the provisions of [paragraph (a)](/current/title-27/section-24.125#p-24.125\(a\)) of this section. However, in lieu of filing a new bond, if a bond is required, the fiduciary may furnish a consent of surety extending the terms of any bonds of the predecessor, and any pertinent information contained in the predecessor's application may be incorporated by reference. In addition, the fiduciary shall furnish a certified copy of the order of the court or other pertinent document showing the appointment as such fiduciary. The effective date of the qualifying documents filed by a fiduciary will be the effective date of the court order, or the date specified for the fiduciary to assume control. If the fiduciary was not appointed by a court, the date of assuming control will coincide with the effective date of the qualifying documents filed by the fiduciary.
(c) *Exception.* A fiduciary intending to liquidate the business conducted on wine premises, i.e., disposition of any wine and spirits on hand, including use of any cellar treatment necessary to put the wine in merchantable condition, who does not intend to produce wine, or use spirits, or receive wine in bond may be exempted from qualifying as the proprietor of the wine premises upon filing with the appropriate TTB officer a statement to that effect, a copy of a foreclosure action, or a copy of the court order directing the liquidation of the business, and, if the wine premises is covered by a bond, a consent of surety wherein the surety and the fiduciary agree to remain liable on the bond.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended ([26 U.S.C. 5356](https://www.govinfo.gov/link/uscode/26/5356)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31077](https://www.federalregister.gov/citation/56-FR-31077), July 9, 1991; T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.126 Change in proprietorship involving a bonded wine warehouse.
Where a bonded wine warehouse has been established on wine premises and it is desired to continue the operation of the bonded wine warehouse subsequent to a change in the proprietorship of the bonded winery or bonded wine cellar, the proprietor of the bonded wine warehouse shall file a letter application, accompanied by an affirming statement from the new proprietor of the bonded winery or bonded wine cellar, requesting the continuation of the bonded wine warehouse and also file evidence of sufficient bond coverage, except where [§ 24.146(d)](/current/title-27/section-24.146#p-24.146\(d\)) does not require bond coverage.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended ([26 U.S.C. 5353](https://www.govinfo.gov/link/uscode/26/5353)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. TTB-146, [82 FR 1124](https://www.federalregister.gov/citation/82-FR-1124), Jan. 4, 2017]
#### § 24.127 Adoption of formulas.
The adoption of approved formulas by a successor proprietor will be in the form of an application, filed with the appropriate TTB officer. The application will list the formulas for adoption by formula number, name of product, and date of approval. The application will clearly show that the outgoing proprietor has authorized the successor proprietor's use of the approved formulas.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended ([26 U.S.C. 5356](https://www.govinfo.gov/link/uscode/26/5356)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.128 Continuing partnerships.
If, under the laws of the particular State, the partnership is not terminated upon the death or insolvency of a partner but continues until the dissolution of the partnership is completed, and the surviving partner has the exclusive right to the control and possession of the partnership assets for the purpose of liquidation and settlement, the surviving partner may continue to operate the wine premises under the prior qualification of the partnership, provided a consent of surety is filed wherein the surety and the surviving partner agree to remain liable on any bond covering the bonded wine premises. A surviving partner who acquires the business on completion of the dissolution of the partnership shall qualify from the date of acquisition, as provided in [§ 24.125(a)](/current/title-27/section-24.125#p-24.125\(a\)). The rule set forth in this section will also apply where there is more than one surviving partner.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended ([26 U.S.C. 5356](https://www.govinfo.gov/link/uscode/26/5356)))
(Approved by the Office of Management and Budget under control number 1512-0058)
#### § 24.129 Change in location.
Where there is a change in the location of wine premises, the proprietor shall file an amended application and an application for amendment of the basic permit, if any, and if a bond has been filed, either a new bond or a consent of surety. Operation of wine premises may not be commenced at the new location prior to approval of the amended application and issuance of any amended permit.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended ([26 U.S.C. 5356](https://www.govinfo.gov/link/uscode/26/5356)))
(Approved by the Office of Management and Budget under control number 1512-0058)
#### § 24.130 Change in volatile fruit-flavor concentrate operations.
If the proprietor desires to make any change in the process employed to produce volatile fruit-flavor concentrate and the change affects the accuracy of the description of process included in the application, the proprietor shall file an amended application to include the amended or new process. The new or changed process may not be used prior to approval of the amended application.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended, 1392, as amended ([26 U.S.C. 5356](https://www.govinfo.gov/link/uscode/26/5356), [5511](https://www.govinfo.gov/link/uscode/26/5511)))
(Approved by the Office of Management and Budget under control number 1512-0058)
#### § 24.131 Change in building construction and use of premises.
Where a change is to be made to buildings located on wine premises, or in the use of any portion of the wine premises, which affects the accuracy of the application, the proprietor shall, before making such change in construction or use, submit a notice to the appropriate TTB officer. The notice will describe the proposed change in detail. The proprietor shall include the change covered by the notice in the next amended TTB F 5120.25 required to be filed, unless the appropriate TTB officer requires immediate amendment.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended ([26 U.S.C. 5356](https://www.govinfo.gov/link/uscode/26/5356)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31077](https://www.federalregister.gov/citation/56-FR-31077), July 9, 1991; T.D. ATF-409, [64 FR 13685](https://www.federalregister.gov/citation/64-FR-13685), Mar. 22, 1999]
#### § 24.132 Change in bond status.
A proprietor must file an amended application if the proprietor's bond status changes in either of the following ways:
(a) A proprietor who has not furnished any bond becomes required to furnish a bond as provided under [§ 24.154(b)](/current/title-27/section-24.154#p-24.154\(b\)); or
(b) A proprietor who has furnished a bond becomes exempt from bond requirements under [§ 24.146(d)](/current/title-27/section-24.146#p-24.146\(d\)) and chooses to terminate all bond coverage as provided under [§ 24.160](/current/title-27/section-24.160).
\[T.D. TTB-146, [82 FR 1124](https://www.federalregister.gov/citation/82-FR-1124), Jan. 4, 2017]
### Alternation
#### § 24.135 Wine premises alternation.
(a) *General.* The proprietor of a bonded winery or bonded wine cellar may alternate all or a portion of wine premises for use as a taxpaid wine bottling house or use as taxpaid wine premises. The proprietor may also alternate the use of adjacent or contiguous premises qualified under [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101) (distilled spirits plant, brewery, etc.) for use as wine premises or *vice versa.* If a proprietor of a bonded wine cellar or winery wishes to use all or a portion of such premises alternately as a volatile fruit-flavor concentrate plant or vice-a-versa, the proprietor must comply with the requirements of [§§ 18.40](/current/title-27/section-18.40) through [18.43 of this title](/current/title-27/section-18.43).
(b) *Qualifying documents.* Where the proprietor desires to alternate bonded wine premises as taxpaid wine bottling house premises or taxpaid wine premises, or other premises qualified under [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101), the following qualifying documents will be filed:
(1) A statement on the application TTB F 5120.25 that an alternation of wine premises will occur;
(2) Evidence of existing bond, consent of surety, or a new bond covering the alternation, except in cases where [§ 24.146(d)](/current/title-27/section-24.146#p-24.146\(d\)) does not require a bond or bonds;
(3) A description of how taxpaid wine or spirits, or untaxpaid wine or spirits will be identified and segregated; and
(4) Any other document or additional information the appropriate TTB officer may require.
(c) *Alternation.* After the necessary qualifying documents have been approved by the appropriate TTB officer, the proprietor may alternate wine premises as described in the application. Any portion of wine premises on which taxpaid wine is located will be considered taxpaid wine premises or taxpaid wine bottling house premises and any portion of the premises on which wine not identified as taxpaid is located will be considered bonded wine premises. The proprietor shall, prior to the initial alternation of the premises, identify by portable signs or tags, or by any other method or manner satisfactory to the appropriate TTB officer, either all taxpaid wine on taxpaid wine premises or taxpaid wine bottling house premises or all untaxpaid wine on bonded wine premises.
(d) *Segregation.* The proprietor shall keep untaxpaid wine or spirits physically separated from taxpaid wine or spirits and on the designated premises. This separation will be by use of tanks, rooms, buildings, partitions, pallet stacks, or complete physical separation, or by any other method or manner which will clearly and readily distinguish untaxpaid wine or spirits from taxpaid wine or spirits and is satisfactory to the appropriate TTB officer. Where necessary for the protection of the revenue or enforcement of [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101), the appropriate TTB officer may require that the portions of wine premises alternated under this section be separated by partitions or otherwise.
(e) *Conditions.* Authority for the alternation of bonded wine premises, taxpaid wine bottling house premises, taxpaid wine premises, or other premises qualified under [26 U.S.C chapter 51](https://www.govinfo.gov/link/uscode/26/5101) is conditioned on compliance by the proprietor with the provisions of this section. Authority for the alternation of bonded wine premises, taxpaid wine bottling house premises, taxpaid wine premises, or other premises qualified under [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101) may be withdrawn whenever in the judgment of the appropriate TTB officer the revenue is jeopardized or the effective administration of this part is hindered by the continuation of the authorization.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended, 1380, as amended, 1381, as amended ([26 U.S.C. 5356](https://www.govinfo.gov/link/uscode/26/5356), [5357](https://www.govinfo.gov/link/uscode/26/5357), [5361](https://www.govinfo.gov/link/uscode/26/5361), [5363](https://www.govinfo.gov/link/uscode/26/5363), [5365](https://www.govinfo.gov/link/uscode/26/5365), [5367](https://www.govinfo.gov/link/uscode/26/5367)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), [13685](https://www.federalregister.gov/citation/64-FR-13685), Mar. 22, 1999; T.D. ATF-455, [66 FR 29483](https://www.federalregister.gov/citation/66-FR-29483), May 31, 2001; T.D. TTB-146, [82 FR 1124](https://www.federalregister.gov/citation/82-FR-1124), Jan. 4, 2017]
#### § 24.136 Procedure for alternating proprietors.
(a) *General.* Wine premises, or parts thereof, may be operated alternately by proprietors who have each filed and received approval of the necessary applications and bonds and have qualified under the provisions of this part. Where operations by alternating proprietors are limited to parts of the wine premises, the application will describe areas, buildings, floors, or rooms which will be alternated and will be accompanied by a diagram delineating the parts of the wine premises to be alternated. A separate diagram will be submitted to depict each arrangement under which the wine premises will be operated. Once the qualifying documents have been approved, and operations initiated, the wine premises, or parts thereof, may be alternated. Any transfer of wine, spirits, or other accountable materials from one proprietor to the other proprietor will be indicated in the records and reports of each proprietor. Operation of a bonded winery engaged in the production of wine by an alternate proprietor will be at least one calendar day in length.
(b) *Alternation.* All operations in any area, building, floor, or room to be alternated will be completely finished and all wine, spirits, and other accountable materials will be removed from the alternated wine premises or transferred to the incoming proprietor. However, wine, spirits, and other accountable materials may be retained in locked tanks at wine premises to be alternated and remain in the custody of the outgoing proprietor.
(c) *Bonds.* The outgoing proprietor who has filed bond as required under [§ 24.146](/current/title-27/section-24.146) and intends to resume operation of the alternated areas, buildings, floors, or rooms following suspension of operations by an alternating proprietor shall execute a consent of surety to continue in effect all bonds. Where wine, spirits, or other accountable materials subject to tax under [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101) are to be retained in tanks on the wine premises to be alternated, an outgoing proprietor who has filed bond as required under [§ 24.146](/current/title-27/section-24.146) shall also execute a consent of surety to continue the liability of all bonds for the tax on the materials, notwithstanding the change in proprietorship.
(d) *Records.* Each proprietor shall maintain separate records and submit a separate TTB F 5120.17, Report of Bonded Wine Premises Operations. All transfers of wine, spirits, and other accountable materials will be reflected in the records of each proprietor. Each proprietor shall maintain a record showing the name and registry number of the incoming or outgoing proprietor, the effective date and hour of alternation, and the quantity in gallons and the percent alcohol by volume or proof of any wine, spirits, or other accountable materials transferred or received.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1378, as amended, 1379, as amended, 1380, as amended, 1381, as amended, 1382, as amended ([26 U.S.C. 5351](https://www.govinfo.gov/link/uscode/26/5351), [5352](https://www.govinfo.gov/link/uscode/26/5352), [5354](https://www.govinfo.gov/link/uscode/26/5354), [5356](https://www.govinfo.gov/link/uscode/26/5356), [5361](https://www.govinfo.gov/link/uscode/26/5361), [5362](https://www.govinfo.gov/link/uscode/26/5362), [5363](https://www.govinfo.gov/link/uscode/26/5363), [5367](https://www.govinfo.gov/link/uscode/26/5367), [5373](https://www.govinfo.gov/link/uscode/26/5373)))
(Approved by the Office of Management and Budget under control numbers 1512-0058, 1512-0216 and 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-338, [58 FR 19064](https://www.federalregister.gov/citation/58-FR-19064), Apr. 12, 1993; T.D. TTB-146, [82 FR 1124](https://www.federalregister.gov/citation/82-FR-1124), Jan. 4, 2017]
#### § 24.137 Alternate use of the wine premises for customs purposes.
(a) *General.* The wine premises may be alternated as a customs bonded warehouse under applicable customs laws and regulations, for the purpose of measuring, gauging, and bottling or packing wine. The use of the portion of the wine premises alternated as a customs bonded warehouse is subject to the approval of the district director of customs and the appropriate TTB officer. When it is necessary to convey wine in customs custody across bonded wine premises, the proprietor shall comply with the provisions of [§ 24.92](/current/title-27/section-24.92).
(b) *Qualifying documents.* Where the proprietor desires to alternate a portion of wine premises for customs use, the following qualifying documents will be filed:
(1) TTB F 5120.25 to cover the alternation;
(2) A diagram clearly depicting any area, building, floor, room or major equipment in use during the alternation; and
(3) Any other documents or additional information the appropriate TTB officer may require.
(c) *Alternation.* After approval of the qualifying documents by the appropriate TTB officer, the proprietor may alternate the wine premises. Portions of the wine premises to be excluded by curtailment or included by extension may not be used for purposes other than those authorized. Prior to the effective date and hour of the alternation, the proprietor shall remove all wine and spirits from the portion of the wine premises to be alternated for customs purposes.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended, 1380, as amended, 1381, as amended ([26 U.S.C. 5356](https://www.govinfo.gov/link/uscode/26/5356), [5357](https://www.govinfo.gov/link/uscode/26/5357), [5361](https://www.govinfo.gov/link/uscode/26/5361), [5365](https://www.govinfo.gov/link/uscode/26/5365), [5367](https://www.govinfo.gov/link/uscode/26/5367)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-344, [58 FR 40354](https://www.federalregister.gov/citation/58-FR-40354), July 28, 1993; T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), [13685](https://www.federalregister.gov/citation/64-FR-13685), Mar. 22, 1999; T.D. TTB-196, [89 FR 87941](https://www.federalregister.gov/citation/89-FR-87941), Nov. 6, 2024]
### Permanent Discontinuance of Operations
#### § 24.140 Notice.
(a) *General.* Where all or part of the operations at a wine premises are to be permanently discontinued, the proprietor shall file with the appropriate TTB officer a notice in letter form to cover the discontinuance. The proprietor shall state in the notice the date on which operations will be discontinued and, if the wine premises are to be transferred to a successor proprietor, the name of the successor proprietor. Any basic permit issued to the proprietor under the Federal Alcohol Administration Act (49 Stat. 978; [27 U.S.C. 203](https://www.govinfo.gov/link/uscode/27/203)) for the operation discontinued will be submitted to the appropriate TTB officer with a written request for cancellation.
(b) *Bonded wine premises.* The proprietor shall certify in the notice, as applicable, that:
(1) All wine, spirits, or volatile fruit-flavor concentrate have been lawfully removed from bonded wine premises, destroyed, or transferred to a successor as of the effective date of discontinuance,
(2) No wine, spirits, or volatile fruit-flavor concentrate are in transit to bonded wine premises, and
(3) All approved applications covering the transfer of spirits to bonded wine premises have been returned to the appropriate TTB officer.
The proprietor shall submit a report marked “Final” on the TTB F 5120.17, Report of Bonded Wine Premises Operations. Any wine, spirits, or volatile fruit-flavor concentrate transferred to a successor will be identified as “Transferred to successor” on the report and identified as “Received from predecessor” on the initial report filed by the successor.
(c) *Taxpaid wine bottling house premises or Taxpaid wine premises.* The proprietor shall certify in the notice that all taxpaid United States or foreign wine on hand have been disposed of, or if not yet disposed of, the manner of disposition and the time period in which the disposition will occur. The proprietor shall include taxpaid United States wine on the TTB F 5120.17 report marked “Final.” Any United States taxpaid wine transferred to a successor will be identified as “Transferred to successor” on the report and identified as “Received from predecessor” on the initial report filed by the successor.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367)))
(Approved by the Office of Management and Budget under control numbers 1512-0058 and 1512-0216)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-338, [58 FR 19064](https://www.federalregister.gov/citation/58-FR-19064), Apr. 12, 1993; T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.141 Bonded wine warehouse.
Where all operations at a bonded wine warehouse are to be permanently discontinued, the warehouse proprietor shall file with the appropriate TTB officer a notice in letter form to cover the discontinuance. The warehouse proprietor shall state in the notice the name, registry number, and address of the wine premises on which the warehouse facilities are located and the date on which operations of the bonded wine warehouse will be discontinued.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended ([26 U.S.C. 5353](https://www.govinfo.gov/link/uscode/26/5353)))
(Approved by the Office of Management and Budget under control number 1512-0292)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
### Bonds and Consents of Surety
#### § 24.145 General requirements.
Each person required to file a bond or consent of surety under this part must prepare, execute and submit the bond or consent of surety on the prescribed form in accordance with this part and the instructions printed on the form. A person may not commence or continue any business or operation relating to wine until all bonds and consents of surety required under this part with respect to the business or operation have been approved by the appropriate TTB officer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1394, as amended ([26 U.S.C. 5551](https://www.govinfo.gov/link/uscode/26/5551)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13685](https://www.federalregister.gov/citation/64-FR-13685), Mar. 22, 1999]
#### § 24.146 Bonds.
(a) *Wine bond.* Except as provided in [paragraph (d)](/current/title-27/section-24.146#p-24.146\(d\)) of this section, the proprietor must give bond on TTB F 5120.36, Wine Bond, to cover the liability for excise taxes imposed by the Internal Revenue Code of 1986, on wines produced or received by the proprietor. The bond will apply to wine, spirits, and volatile fruit-flavor concentrate, or other commodities subject to tax under [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101), in transit to or on bonded wine premises, and to the operations of the bonded wine premises, whether the transaction or operation on which the proprietor's liability is based occurred on or off the proprietor's premises. The bond will provide that the proprietor shall faithfully comply with all provisions of law and regulation relating to activities covered by the bond. This bond has a tax obligation limit of $500 for wine removed from bonded wine premises on which the tax has been determined, but not paid, unless the total penal sum of the operations bond is $2,000 or more and the proprietor and the surety designate \$1,000 of this amount as the obligation limit for wine on which the tax has been determined, but not paid.
(b) *Tax deferral bond.* Except as provided in [paragraph (d)](/current/title-27/section-24.146#p-24.146\(d\)) of this section, where the proprietor removes wine from bonded wine premises for consumption or sale, after determination and before payment of tax, the proprietor must, in addition to any other bond required by this part, furnish a tax deferral bond on TTB F 5120.36, Wine Bond, to ensure payment of the tax on the wine. Under the conditions provided in [paragraph (a)](/current/title-27/section-24.146#p-24.146\(a\)) of this section, this amount may be changed to \$1,000 by the terms of the bond or through a consent of surety between the proprietor and the surety. The tax deferral bond and the wine bond may be submitted on the same TTB F 5120.36.
(c) *Wine vinegar plant bond.* The proprietor of a wine vinegar plant who withdraws wine from a bonded wine premises without payment of tax for use in the manufacture of vinegar shall file a bond on TTB F 5510.2, Bond Covering Removal to and Use of Wine at Vinegar Plant, to ensure the payment of the tax on the wine until such wine becomes vinegar.
(d) *Bonds covering wine for nonindustrial use and industrial use* —
(1) *Nonindustrial use.* A proprietor who pays tax on a deferred basis under [§ 24.271](/current/title-27/section-24.271) is not required to provide a bond or bonds to cover operations and withdrawals of wine for nonindustrial use during any portion of a calendar year for which the proprietor is eligible to use an annual or quarterly return period under [§ 24.271(b)(1)(ii)](/current/title-27/section-24.271#p-24.271\(b\)\(1\)\(ii\)) or [(b)(1)(iii)](/current/title-27/section-24.271#p-24.271\(b\)\(1\)\(iii\)). For purposes of the preceding sentence, a proprietor is considered to be paying tax on a deferred basis even if the proprietor does not pay tax during every return period as long as the proprietor intends to pay tax in a future period. See [§§ 24.109](/current/title-27/section-24.109) and [24.132](/current/title-27/section-24.132) for rules governing applying for this bond exemption. See [§ 24.154(b)](/current/title-27/section-24.154#p-24.154\(b\)) for rules governing when an existing proprietor who has not provided a bond under this paragraph must obtain bond coverage.
(2) *Industrial use.* A proprietor is required to provide a bond or bonds to cover operations and withdrawals of wine for industrial use even if the proprietor pays tax on a deferred basis under [§ 24.271](/current/title-27/section-24.271) and is eligible to use an annual or quarterly return period under [§ 24.271(b)(1)(ii)](/current/title-27/section-24.271#p-24.271\(b\)\(1\)\(ii\)) or [(b)(1)(iii)](/current/title-27/section-24.271#p-24.271\(b\)\(1\)\(iii\)). In the case of a proprietor whose operations or withdrawals involve wine for both nonindustrial and industrial use, wine is considered to be for industrial use for purposes of this paragraph unless the proprietor designates the wine as solely for nonindustrial use upon production of the wine by fermentation or upon receiving the wine and, in either case, does not thereafter mix the wine with any wine for industrial use.
(3) *Nonindustrial use and industrial use defined.* The nonindustrial and industrial uses of wine are defined in [subpart D of part 1 of this chapter](/current/title-27/part-1/subpart-D). Nonindustrial uses of wine include, but are not limited to, uses of wine for beverage purposes. Industrial uses of wine include the manufacture of wine or wine products not for beverage use as set forth in [§ 24.215](/current/title-27/section-24.215).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended, 1380, as amended ([26 U.S.C. 5354](https://www.govinfo.gov/link/uscode/26/5354), [5362](https://www.govinfo.gov/link/uscode/26/5362)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-338, [58 FR 19064](https://www.federalregister.gov/citation/58-FR-19064), Apr. 12, 1993; T.D. TTB-79, [74 FR 37404](https://www.federalregister.gov/citation/74-FR-37404), July 28, 2009; T.D. TTB-146, [82 FR 1124](https://www.federalregister.gov/citation/82-FR-1124), Jan. 4, 2017]
#### § 24.147 Operations bond or unit bond.
Notwithstanding the provisions of [§ 24.146](/current/title-27/section-24.146), each person intending to commence or to continue business as the proprietor of a bonded wine premises with an adjacent or contiguous distilled spirits plant qualified under [27 CFR part 19](/current/title-27/part-19) for the production of distilled spirits shall, in lieu of a winery bond and the bonds required under the provisions of [26 U.S.C. 5173](https://www.govinfo.gov/link/uscode/26/5173), as amended, give an operations bond or unit bond in accordance with the applicable provisions of [27 CFR part 19](/current/title-27/part-19). See [§ 19.151(d) of this chapter](/current/title-27/section-19.151#p-19.151\(d\)) for circumstances under which a bond is not required with respect to operations and withdrawals of distilled spirits.
(Sec. 805(c), Pub. L. 96-39, 93 Stat. 276 ([26 U.S.C. 5173](https://www.govinfo.gov/link/uscode/26/5173)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. TTB-146, [82 FR 1124](https://www.federalregister.gov/citation/82-FR-1124), Jan. 4, 2017]
#### § 24.148 Penal sums of bonds.
The penal sums of bonds prescribed in this part are as follows:
| Bond | Basis | Penal sum | |
| --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------- | -------- |
| Minimum | Maximum | | |
| (a) Wine Bond, TTB F 5120.36 | (1) Wine operations coverage. (i) Not less than the tax on all wine or spirits possessed, in transit, or unaccounted for at any one time, taking into account the appropriate small producer wine tax credit | \$1,000 | \$50,000 |
| | (ii) Where the liability exceeds \$250,000 | | 100,000 |
| | (2) Tax deferral coverage. Where the unpaid tax amounts to more than $500, not less than the amount of tax which, at any one time, has been determined but not paid. Exception: $1,000 of the wine operations coverage may be allocated to cover the amount of tax which, at any one time, has been determined but not paid, if the total operations coverage is \$2,000 or more | 500 | 250,000 |
| (b) Wine Vinegar Plant Bond, TTB F 5510.2 | Not less than the tax on all wine on hand, in transit, or unaccounted for at any one time | 1,000 | 100,000 |
| | | | |
| --- | --- | --- | --- |
| \* The proprietor of bonded wine premises who operates an adjacent or contiguous wine vinegar plant with a wine bond that does not cover the operation may file a consent of surety to extend the terms of the wine bond in lieu of filing a wine vinegar plant bond. | | | |
([26 U.S.C. 5354](https://www.govinfo.gov/link/uscode/26/5354), [5362](https://www.govinfo.gov/link/uscode/26/5362))
(Approved by the Office of Management and Budget under control number 1513-0009)
\[T.D. TTB-64, [72 FR 65454](https://www.federalregister.gov/citation/72-FR-65454), Nov. 21, 2007]
#### § 24.149 Corporate surety.
(a) Surety bonds required by this part may be obtained only from corporate sureties which hold certificates of authority from and are subject to the limitations prescribed by the Secretary as set forth in the current revision of Treasury Department Circular 570, Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies.
(b) Treasury Department Circular 570 is published in the Federal Register annually on the first business day in July, and supplemental changes are published periodically thereafter (see *[https://www.federalregister.gov](https://www.federalregister.gov)*). The most recent circular and any supplemental changes to it may be viewed on the Bureau of the Fiscal Service website (see *[https://fiscal.treasury.gov](https://fiscal.treasury.gov)*).
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. TTB-146, [82 FR 1124](https://www.federalregister.gov/citation/82-FR-1124), Jan. 4, 2017; T.D. TTB-196, [89 FR 87942](https://www.federalregister.gov/citation/89-FR-87942), Nov. 6, 2024]
#### § 24.150 Powers of attorney.
Each bond, and each consent to changes in the terms of a bond, will be accompanied by a power of attorney whereby the surety authorizes the agent or officer who executed the bond or consent to act on behalf of the surety. The appropriate TTB officer may require additional evidence of the authority of the agent or officer of the surety to execute the bond or consent. The power of attorney will be prepared on a form provided by the surety and executed under the corporate seal of the surety. If the power of attorney is other than a manually signed original, the appropriate TTB officer may require a certification of validity.
(July 30, 1947, Ch. 390, Pub. L. 80-280, 61 Stat. 648, as amended ([26 U.S.C. 6](https://www.govinfo.gov/link/uscode/26/6), [7](https://www.govinfo.gov/link/uscode/26/7)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.151 Deposit of collateral security.
Bonds or notes of the United States, or other obligations which are unconditionally guaranteed as to both interest and principal by the United States, may be pledged and deposited as collateral security in lieu of corporate sureties in accordance with the provisions of the Treasury Department regulations in [31 CFR part 225](/current/title-31/part-225), Acceptance of Bonds Secured by Government Obligations in Lieu of Bonds with Sureties. Cash, postal money orders, certified checks, cashiers' checks, or treasurers' checks may also be furnished as collateral security in lieu of corporate sureties.
(July 30, 1947, Ch. 390, 61 Stat. 650 ([6 U.S.C. 15](https://www.govinfo.gov/link/uscode/6/15)); August 16, 1954, Ch. 736, 68A Stat. 847, as amended ([26 U.S.C. 7101](https://www.govinfo.gov/link/uscode/26/7101)))
\[T.D. TTB-146, [82 FR 1124](https://www.federalregister.gov/citation/82-FR-1124), Jan. 4, 2017]
#### § 24.152 Consents of surety.
Consents of surety to changes in the terms of bonds will be executed on TTB Form 5000.18 by the principal and by the surety with the same formality and evidence of authority as is required for the execution of bonds.
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. TTB-146, [82 FR 1125](https://www.federalregister.gov/citation/82-FR-1125), Jan. 4, 2017]
#### § 24.153 Strengthening bonds.
In any instance where the penal sum of the bond on file becomes insufficient, the principal shall either give a strengthening bond with the same surety to attain a sufficient penal sum or give a new bond covering the entire liability. Strengthening bonds will not be approved where any notation is made thereon which is intended, or which may be construed, as a release of any former bond, or as limiting the amount of either bond to less than its full penal sum. Strengthening bonds will show the current date of execution and the effective date.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1394, as amended ([26 U.S.C. 5551](https://www.govinfo.gov/link/uscode/26/5551)))
(Approved by the Office of Management and Budget under control number 1512-0058)
#### § 24.154 Superseding bonds and new bonds for existing proprietors.
(a) *Superseding bonds.* When, in the opinion of the appropriate TTB officer, the interests of the Government demand it, or in any case where the validity of the bond becomes impaired in whole or in part for any reason, the principal must give a new bond that supersedes the existing bond. A superseding bond will be required immediately in the case of the insolvency of a corporate surety. Executors, administrators, assignees, receivers, trustees, or other persons acting in a fiduciary capacity, to continue or to liquidate the business of the principal, must execute and file a superseding bond or obtain the consent of the surety or sureties on the existing bond or bonds. When under the provisions of [§ 24.157](/current/title-27/section-24.157) the surety has filed an application to be relieved of liability under any bond given under this part and the principal desires or intends to continue business or operations to which the bond relates, the principal must file a valid superseding bond to be effective on or before the date specified in the surety's notice. Superseding bonds will show the current date of execution and the effective date.
(b) *New bonds for existing proprietors* —
(1) *General.* Subject to [paragraph (b)(2)](/current/title-27/section-24.154#p-24.154\(b\)\(2\)) of this section, if an existing proprietor has not furnished a bond or bonds covering operations and withdrawals of wine for nonindustrial use because the proprietor was exempt from bond requirements under [§ 24.146(d)](/current/title-27/section-24.146#p-24.146\(d\)), the proprietor must furnish a bond or bonds as provided in this subpart beginning in any portion of a calendar year following the first date on which the aggregate amount of tax due from the proprietor during the calendar year exceeds \$50,000. When furnishing the bond or bonds, the proprietor must also file an amended application as provided in [§ 24.132](/current/title-27/section-24.132) to change the proprietor's bond status.
(2) *Grace period for wine bonds under [§ 24.146(a)](/current/title-27/section-24.146#p-24.146\(a\)).* An existing proprietor who must furnish a wine bond under [§ 24.146(a)](/current/title-27/section-24.146#p-24.146\(a\)) as provided in [paragraph (b)(1)](/current/title-27/section-24.154#p-24.154\(b\)\(1\)) of this section will be treated as having furnished the required bond if the proprietor submits the bond on TTB F 5120.36 no later than 30 days following the first date on which the aggregate amount of tax due from the proprietor during the relevant calendar year exceeds $50,000. The proprietor will be treated as having furnished the required wine bond for purposes of this paragraph until TTB approves or disapproves the bond. Until TTB takes action on a bond submission, a proprietor who complies with the requirements of this paragraph may remove wine on which the tax has been determined, but not paid, to the extent that the proprietor's liability for tax on those removals does not exceed $1,000.
(3) *Tax deferral bonds under [§ 24.146(b)](/current/title-27/section-24.146#p-24.146\(b\)).* The grace period specified in [paragraph (b)(2)](/current/title-27/section-24.154#p-24.154\(b\)\(2\)) of this section does not apply to tax deferral bonds under [§ 24.146(b)](/current/title-27/section-24.146#p-24.146\(b\)). Except to the extent authorized under [paragraph (b)(2)](/current/title-27/section-24.154#p-24.154\(b\)\(2\)) of this section, a proprietor who must furnish a tax deferral bond under [paragraph (b)(1)](/current/title-27/section-24.154#p-24.154\(b\)\(1\)) of this section may not withdraw wine from the bonded premises on which the tax has been determined, but not paid, until TTB approves the tax deferral bond.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended, 1380, as amended, 1394, as amended ([26 U.S.C. 5354](https://www.govinfo.gov/link/uscode/26/5354), [5362](https://www.govinfo.gov/link/uscode/26/5362), [5551](https://www.govinfo.gov/link/uscode/26/5551)))
(Approved by the Office of Management and Budget under control number 1513-0009)
\[T.D. TTB-146, [82 FR 1125](https://www.federalregister.gov/citation/82-FR-1125), Jan. 4, 2017]
#### § 24.155 Disapproval and appeal from disapproval.
(a) *Disapproval.* The appropriate TTB officer may disapprove any bonded wine premises bond or consent of surety if the individual, firm, partnership, corporation, or association giving the bond, or owning, controlling, or actively participating in the management of the bonded wine premises of the individual, firm, partnership, corporation, or association giving the bond, has been previously convicted in a court of competent jurisdiction of:
(1) Any fraudulent noncompliance with any provision of any law of the United States, if such provision relates to internal revenue or customs taxation of distilled spirits, wine, or beer, or if such offense has been compromised with the person on payment of penalties or otherwise, or
(2) Any felony under a law of any State, or of the District of Columbia, or of the United States, prohibiting the manufacture, sale, importation, or transportation of distilled spirits, wine, beer, or other intoxicating liquor.
(b) *Appeal from disapproval.* Where a bond or consent of surety is disapproved by the appropriate TTB officer, the person giving the bond may appeal the disapproval to the Administrator. The decision of the Administrator will be final.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1394, as amended ([26 U.S.C. 5551](https://www.govinfo.gov/link/uscode/26/5551)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.156 Termination of bonds.
A bond prescribed in [§ 24.146](/current/title-27/section-24.146) may be terminated as to future liability pursuant to application by the surety as provided in [§ 24.157](/current/title-27/section-24.157); pursuant to approval of a superseding bond; upon receipt of notification from the principal that the business has been discontinued and all wine and spirits have been removed from the bonded wine premises as provided in [§ 24.140(b)](/current/title-27/section-24.140#p-24.140\(b\)); pursuant to an application by an existing proprietor who becomes exempt from bond requirements as provided in [§ 24.160](/current/title-27/section-24.160); or in the case of a tax deferral bond, the termination will be issued upon receipt of written notification from the principal that removals of wine requiring a tax deferral bond have been discontinued.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended ([26 U.S.C. 5354](https://www.govinfo.gov/link/uscode/26/5354)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. TTB-146, [82 FR 1125](https://www.federalregister.gov/citation/82-FR-1125), Jan. 4, 2017]
#### § 24.157 Application by surety for relief from bond.
A surety on any bond required by this part may at any time, in writing, notify the principal and the appropriate TTB officer in whose office the bond is on file, that it desires after a specified date, to be relieved of liability under the bond. The date may not be less than 10 days after the date notice is received by the appropriate TTB officer in the case of a tax deferral bond, and not less than 90 days after the date the notice is received in the case of a bonded wine premises bond or wine vinegar plant bond. The surety will also file with the appropriate TTB officer an acknowledgment, or other evidence of service, of a notice on the principal. The 10 day or 90 day period does not commence until both the acknowledgment or other evidence of service and the notice are filed. If a notice is not thereafter withdrawn in writing, the rights of the principal as supported by the bond will be terminated on the date specified in the notice, and the surety will be relieved from liability to the extent set forth in [§ 24.158](/current/title-27/section-24.158).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended, 1380, as amended ([26 U.S.C. 5354](https://www.govinfo.gov/link/uscode/26/5354), [5362](https://www.govinfo.gov/link/uscode/26/5362)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.158 Extent of relief.
(a) *General.* The surety on any bond required by this part who has filed a notice for relief from liability as provided in [§ 24.157](/current/title-27/section-24.157) will be relieved from liability under bond as set forth in this section.
(b) *Wine bond.* Where a new or superseding bond is filed, the surety of the existing bond will be relieved of future liability with respect to wine, spirits, volatile fruit-flavor concentrate, or any other commodities subject to tax under [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101) on hand or in transit to bonded wine premises on or after the effective date of the new or superseding bond. Notwithstanding such relief, the surety will remain liable for the tax on all wine or volatile fruit-flavor concentrate produced at, and for wine, spirits, and volatile fruit-flavor concentrate consigned to, the bonded wine premises, and for all other liabilities incurred, during the term of the bond. Where a new or superseding bond is not filed the surety will, in addition to the continuing liabilities specified above, remain liable for all wine, spirits, volatile fruit-flavor concentrate, or other commodities subject to tax under [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101) on hand or in transit to bonded wine premises on the date specified in the notice, until all the wine, spirits, volatile fruit-flavor concentrate, or commodities subject to tax under [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101) have been lawfully disposed of, or a new bond has been filed covering the liability.
(c) *Tax deferral bond.* The surety will be relieved of liability for the tax on any wine removed from the bonded wine premises after the date specified in the notice. The surety will continue to be liable for the tax on wine removed for consumption or sale on or before the date specified in the notice, until all tax is fully paid.
(d) *Wine vinegar plant bond.* The surety will be relieved of liability for tax on wine withdrawn for the manufacture of vinegar after the date specified in the notice. The surety will continue to be liable for the tax on wine withdrawn on or before the date specified in the notice, until all wine is fully accounted for.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended, 1380, as amended ([26 U.S.C. 5354](https://www.govinfo.gov/link/uscode/26/5354), [5362](https://www.govinfo.gov/link/uscode/26/5362)))
(Approved by the Office of Management and Budget under control number 1512-0058)
#### § 24.159 Release of collateral security.
Collateral security pledged and deposited will be released only in accordance with the provisions of [31 CFR part 225](/current/title-31/part-225). The collateral security will not be released by the appropriate TTB officer until liability under the bond for which it was pledged has been terminated. If satisfied that the interests of the Government will not be jeopardized, the appropriate TTB officer will fix the date or dates on which a part or all of the collateral security may be released. At any time prior to the release of the collateral security, the appropriate TTB officer may, for proper cause, extend the date of release of the security for such additional length of time as deemed appropriate.
(July 30, 1947, Ch. 390, Pub. L. 80-280, 61 Stat. 650 ([31 U.S.C. 9301](https://www.govinfo.gov/link/uscode/31/9301), [9303](https://www.govinfo.gov/link/uscode/31/9303)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.160 Application to terminate bond by existing proprietor who becomes exempt from bond requirements.
If a proprietor has held a bond or bonds covering operations or withdrawals of wine for nonindustrial use and becomes exempt from those bond requirements as provided under [§ 24.146(d)](/current/title-27/section-24.146#p-24.146\(d\)), the proprietor may apply to TTB to terminate the bond or bonds covering such operations or withdrawals. To apply, the proprietor must file an amended application as provided in [§ 24.132](/current/title-27/section-24.132). The proprietor must accurately state in the submission that the proprietor:
(a) Will withdraw wine for deferred payment of tax under [§ 24.271](/current/title-27/section-24.271);
(b) Reasonably expects to be liable for not more than \$50,000 in taxes with respect to wine imposed by [26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041) and [7652](https://www.govinfo.gov/link/uscode/26/7652) for the current calendar year (see definition of “Reasonably expects” in [§ 24.271(b)(1)(iv)(B)](/current/title-27/section-24.271#p-24.271\(b\)\(1\)\(iv\)\(B\))); and
(c) Was liable for not more than \$50,000 in such taxes in the preceding calendar year.
\[T.D. TTB-146, [82 FR 1125](https://www.federalregister.gov/citation/82-FR-1125), Jan. 4, 2017]
## Subpart E—Construction and Equipment
#### § 24.165 Premises.
Wine premises will be located, constructed, and equipped, subject to approval by the appropriate TTB officer, in a manner suitable for the operations to be conducted and to afford adequate protection to the revenue.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1378, as amended, 1379, as amended, 1380, as amended, 1381, as amended ([26 U.S.C. 5351](https://www.govinfo.gov/link/uscode/26/5351), [5352](https://www.govinfo.gov/link/uscode/26/5352), [5357](https://www.govinfo.gov/link/uscode/26/5357), [5361](https://www.govinfo.gov/link/uscode/26/5361), [5363](https://www.govinfo.gov/link/uscode/26/5363)))
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.166 Buildings or rooms.
All buildings or rooms on wine premises in which wine operations or other operations as are authorized in this part are conducted will be located, constructed, and equipped in a manner suitable for the intended purpose and to afford adequate protection to the revenue. Each building or room will be constructed of substantial materials and separated from adjacent or contiguous buildings, rooms, or designated areas in a manner satisfactory to the appropriate TTB officer. Where spirits are to be received and stored in packages, a storage room equipped for locking will be provided. The proprietor shall make provisions to assure TTB officers have ready ingress to and egress from any building or room on wine premises, and shall furnish at the request of the appropriate TTB officer evidence that the means of ingress and egress by TTB officers are assured. Where the appropriate TTB officer finds that any building or room on wine premises is located, constructed, or equipped as to afford inadequate protection to the revenue, the proprietor will be required to make changes in location, construction, or equipment to the extent necessary to afford adequate protection to the revenue.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1378, as amended, 1379, as amended ([26 U.S.C. 5352](https://www.govinfo.gov/link/uscode/26/5352), [5357](https://www.govinfo.gov/link/uscode/26/5357)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.167 Tanks.
(a) *General.* All tanks on wine premises used for wine operations or for other operations as are authorized in this part will be suitable for the intended purpose. Each tank used for wine operations will be located, constructed, and equipped as to permit ready examination and a means of accurately determining the contents. Any tank used for wine operations not enclosed within a building or room will be enclosed within a secure fence unless the premises where the tank is located are enclosed by a fence or wall, or all tank openings are equipped for locking and are locked when used for wine operations and there is no proprietor's representative on the wine premises, or the appropriate TTB officer has approved some other adequate means of revenue protection. All open tanks will be under a roof or other suitable covering.
(b) *Other requirements.* Each tank used for the taxpayment of wine, storage of spirits, or spirits additions will be constructed and equipped as follows:
(1) An accurate means of measuring the contents of each tank will be provided by the proprietor. When a means of measuring is not a permanent fixture of the tank, the tank will be equipped with a fixed device to allow the approximate contents to be determined readily;
(2) Safe access to all parts of a tank will be provided by the proprietor;
(3) Tanks may not be used until they are accurately calibrated and a statement of certification of accurate calibration is on file at the premises;
(4) If a tank or its means of measuring is changed as to location or position subsequent to original calibration, the tank may not be used until recalibrated; and
(5) All openings in tanks used for the storage, weighing, or measuring of spirits, or for the addition of spirits to wine, will be equipped for locking or have a similar means of revenue protection. Any vents, flame arrestors, foam devices, or other safety devices affixed to a spirits tank will be constructed to prevent extraction of the contents of the tank.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1378, as amended, 1379, as amended, 1395, as amended ([26 U.S.C. 5352](https://www.govinfo.gov/link/uscode/26/5352), [5357](https://www.govinfo.gov/link/uscode/26/5357), [5552](https://www.govinfo.gov/link/uscode/26/5552)))
(Approved by the Office of Management and Budget under control number 1512-0058)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31078](https://www.federalregister.gov/citation/56-FR-31078), July 9, 1991; T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.168 Identification of tanks.
(a) *General.* Each tank, barrel, puncheon, or similar bulk container, used to ferment wine or used to process or store wine, spirits, or wine making materials will have the contents marked and will be marked as required by this section.
(b) *Tank markings.*
(1) Each tank will have a unique serial number;
(2) Each tank will be marked to show its current use, either by permanent markings or by removable signs of durable material; and
(3) If used to store wine made in accordance with a formula, the formula number will be marked or otherwise indicated on the tank.
(c) *Puncheon and barrel markings.* Puncheons and barrels, or similar bulk containers over 100 gallons capacity, will be marked in the same manner as tanks. A permanent serial number need not be marked on puncheons and barrels, or similar bulk containers of 100 gallons capacity or less, used for storage, but the capacity must be permanently marked.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1378, as amended, 1379, as amended ([26 U.S.C. 5352](https://www.govinfo.gov/link/uscode/26/5352), [5357](https://www.govinfo.gov/link/uscode/26/5357)))
(Approved by the Office of Management and Budget under control number 1512-0503)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. TTB-91, [76 FR 5478](https://www.federalregister.gov/citation/76-FR-5478), Feb. 1, 2011]
#### § 24.169 Pipelines.
Pipelines, including flexible hoses, used to convey wine, spirits, or volatile fruit-flavor concentrate will be constructed, connected, arranged, and secured so as to afford adequate protection to the revenue and to permit ready examination. The appropriate TTB officer may approve pipelines which cannot be readily examined if no jeopardy to the revenue is created.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1378, as amended, 1379, as amended, 1395, as amended ([26 U.S.C. 5352](https://www.govinfo.gov/link/uscode/26/5352), [5357](https://www.govinfo.gov/link/uscode/26/5357), [5552](https://www.govinfo.gov/link/uscode/26/5552)))
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.170 Measuring devices and testing instruments.
(a) *Measuring devices.* The appropriate TTB officer may at any time require proprietors to provide at their own expense equipment for ascertaining the capacity and contents of tanks and other storage containers, and scales and measuring devices for weighing and measuring wine, spirits, volatile fruit-flavor concentrate, or materials received and used in the production or treatment of wine. Where winemaking materials or other materials used in the treatment of wine are used immediately upon receipt on wine premises, or received and stored on bonded wine premises in original sealed shipping containers with a stated capacity, the quantity shown on the commercial invoice or other document covering the shipment may be accepted by the proprietor and entered into records in lieu of measuring the materials upon receipt.
(b) *Testing instruments.* The proprietor shall have ready access to equipment for determining the alcohol content unless the proprietor only receives and stores on wine premises bottled or packed wine with evidence showing the alcohol content has been determined. The proprietor who bottles or packs wine shall have ready access to equipment for determining the net contents of bottled or packed wine. The appropriate TTB officer may require other testing instruments based upon the proprietor's operations.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1379, as amended, 1395, as amended ([26 U.S.C. 5357](https://www.govinfo.gov/link/uscode/26/5357), [5552](https://www.govinfo.gov/link/uscode/26/5552)))
(Approved by the Office of Management and Budget under control number 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
## Subpart F—Production of Wine
#### § 24.175 General.
The kinds of wine which may be produced on bonded wine premises are as follows:
(a) Natural wine produced in accordance with [subparts F](/current/title-27/part-24/subpart-F) and [G of this part](/current/title-27/part-24/subpart-G);
(b) Special natural wine produced in accordance with [subpart H of this part](/current/title-27/part-24/subpart-H);
(c) Agricultural wine produced in accordance with [subpart I of this part](/current/title-27/part-24/subpart-I); and
(d) Other than standard wine produced in accordance with [subpart J of this part](/current/title-27/part-24/subpart-J).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended, 1383, as amended, 1384, as amended, 1385, as amended, 1386, as amended ([26 U.S.C. 5361](https://www.govinfo.gov/link/uscode/26/5361), [5382](https://www.govinfo.gov/link/uscode/26/5382), [5384](https://www.govinfo.gov/link/uscode/26/5384), [5385](https://www.govinfo.gov/link/uscode/26/5385), [5386](https://www.govinfo.gov/link/uscode/26/5386), [5387](https://www.govinfo.gov/link/uscode/26/5387)))
#### § 24.176 Crushing and fermentation.
(a) *Natural wine production.* Water may be used to flush equipment during the crushing process or to facilitate fermentation but the density of the juice may not be reduced below 22 degrees Brix. However, if the juice is already less than 23 degrees Brix, the use of water to flush equipment or facilitate fermentation is limited to a juice density reduction of no more than one degree Brix. At the start of fermentation no material may be added except water, sugar, concentrated fruit juice from the same kind of fruit, malo-lactic bacteria, yeast or yeast cultures grown in juice of the same kind of fruit, and yeast foods, sterilizing agents, precipitating agents or other approved fermentation adjuncts. Water may be used to rehydrate yeast to a maximum to two gallons of water for each pound of yeast; however, except for an operation involving the preparation of a yeast culture starter and must mixture for later use in initiating fermentation, the maximum volume increase of the juice after the addition of rehydrated yeast is limited to 0.5 percent. After fermentation natural wines may be blended with each other only if produced from the same kind of fruit.
(b) *Determination of wine produced.* Upon completion of fermentation or removal from the fermenter, the volume of wine will be accurately determined, recorded and reported on TTB F 5120.17, Report of Bonded Wine Premises Operations, as wine produced. Any wine or juice remaining in fermentation tanks at the end of the reporting period will be recorded and reported on TTB F 5120.17.
\[T.D. ATF-312, [56 FR 31078](https://www.federalregister.gov/citation/56-FR-31078), July 9, 1990, as amended by ATF-338, [58 FR 19064](https://www.federalregister.gov/citation/58-FR-19064), Apr. 12, 1993]
#### § 24.177 Chaptalization (Brix adjustment).
In producing natural grape wine from juice having a low sugar content, pure dry sugar or concentrated grape juice may be added before or during fermentation to develop alcohol. In producing natural fruit wine from juice having a low sugar content, sugar, or concentrated juice of the same kind of fruit may be added before or during fermentation to develop alcohol. The quantity of sugar or concentrated juice added may not raise the original density of the juice above 25 degrees Brix. If grape juice or grape wine is ameliorated after chaptalization, the quantity of pure dry sugar added to juice for chaptalization will be included as ameliorating material. If fruit juice or fruit wine is ameliorated after chaptalization, pure dry sugar added under this section is not considered as ameliorating material. However, if fruit juice or fruit wine is ameliorated after chaptalization and liquid sugar or invert sugar syrup is used to chaptalize the fruit juice, the volume of water contained in the liquid sugar or invert sugar syrup will be included as ameliorating material.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1385, as amended ([26 U.S.C. 5382](https://www.govinfo.gov/link/uscode/26/5382), [5384](https://www.govinfo.gov/link/uscode/26/5384)))
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31078](https://www.federalregister.gov/citation/56-FR-31078), July 9, 1991; T.D. ATF-413, [64 FR 46844](https://www.federalregister.gov/citation/64-FR-46844), Aug. 27, 1999]
#### § 24.178 Amelioration.
(a) *General.* In producing natural wine from juice having a fixed acid level exceeding 5.0 grams per liter, the winemaker may adjust the fixed acid level by adding ameliorating material (water, sugar, or a combination of both) before, during and after fermentation. The fixed acid level of the juice is determined prior to fermentation and is calculated as tartaric acid for grapes, malic acid for apples, and citric acid for other fruit. Each 20 gallons of ameliorating material added to 1,000 gallons of juice or wine will reduce the fixed acid level of the juice or wine by 0.1 gram per liter (the fixed acid level of the juice or wine may not be less than 5.0 gram per liter after the addition of ameliorating material).
(b) *Limitations.*
(1) Amelioration is permitted only at the bonded wine premises where the natural wine is produced.
(2) The ameliorating material added to juice or wine may not reduce the fixed acid level of the ameliorated juice or wine to less than 5.0 grams per liter.
(3) For all wine, except for wine described in [paragraph (b)(4)](/current/title-27/section-24.178#p-24.178\(b\)\(4\)) of this section, the volume of ameliorating material added to juice or wine may not exceed 35 percent of the total volume of ameliorated juice or wine (calculated exclusive of pulp). Where the starting fixed acid level is or exceeds 7.69 grams per liter, a maximum of 538.4 gallons of ameliorating material may be added to each 1,000 gallons of wine or juice.
(4) For wine produced from any fruit (excluding grapes) or berry with a natural fixed acid of 20 parts per thousand or more (before any correction of such fruit or berry), the volume of ameliorating material added to juice or wine may not exceed 60 percent of the total volume of ameliorated juice or wine (calculated exclusive of pulp). If the starting fixed acid level is or exceeds 12.5 grams per liter, a maximum of 1,500 gallons of ameliorating material may be added to each 1,000 gallons of wine or juice.
([26 U.S.C. 5383](https://www.govinfo.gov/link/uscode/26/5383), [5384](https://www.govinfo.gov/link/uscode/26/5384)).
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-403, [64 FR 50253](https://www.federalregister.gov/citation/64-FR-50253), Sept. 16, 1999; T.D. ATF-458, [66 FR 37578](https://www.federalregister.gov/citation/66-FR-37578), July 19, 2001]
#### § 24.179 Sweetening.
(a) *General.* In producing natural wine, sugar, juice or concentrated fruit juice of the same kind of fruit may be added after fermentation to sweeten wine. When juice or concentrated fruit juice is added, the solids content of the finished wine may not exceed 21 percent by weight. When liquid sugar or invert sugar syrup is used, the resulting volume may not exceed the volume which would result from the maximum use of pure dry sugar only.
(b) *Grape wine.* Any natural grape wine of a winemaker's own production may have sugar added after amelioration and fermentation provided the finished wine does not exceed 17 percent total solids by weight if the alcohol content is more than 14 percent by volume or 21 percent total solids by weight if the alcohol content is not more than 14 percent by volume.
(c) *Fruit wine.* Any natural fruit wine of a winemaker's own production may have sugar added after amelioration and fermentation provided the finished wine does not exceed 21 percent total solids by weight and the alcohol content is not more than 14 percent by volume.
(d) *Specially sweetened natural wine.* Specially sweetened natural wine is produced by adding to natural wine of the winemaker's own production sufficient pure dry sugar, juice or concentrated fruit juice of the same kind of fruit, separately or in combination, so that the finished product has a total solids content between 17 percent and 35 percent by weight, and an alcohol content of not more than 14 percent by volume. Natural wine containing added wine spirits may be used in the production of specially sweetened natural wine; however, wine spirits may not be added to specially sweetened natural wine. Specially sweetened natural wines may be blended with each other, or with natural wine or heavy bodied blending wine (including juice or concentrated fruit juice to which wine spirits have been added), in the further production of specially sweetened natural wine only if the wines (or juice) so blended are made from the same kind of fruit.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1383, as amended, 1384, as amended, 1385, as amended, 1386, as amended ([26 U.S.C. 5382](https://www.govinfo.gov/link/uscode/26/5382), [5383](https://www.govinfo.gov/link/uscode/26/5383), [5384](https://www.govinfo.gov/link/uscode/26/5384), [5385](https://www.govinfo.gov/link/uscode/26/5385)))
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31078](https://www.federalregister.gov/citation/56-FR-31078), July 9, 1991]
#### § 24.180 Use of concentrated and unconcentrated fruit juice.
Concentrated fruit juice reduced with water to its original density, or to 22 degrees Brix, or to any degree of Brix between its original density and 22 degrees Brix, and unconcentrated fruit juice reduced with water to not less than 22 degrees Brix, is considered juice for the purpose of standard wine production. Concentrated fruit juice reduced with water to any degree of Brix greater than 22 degrees Brix may be further reduced with water to any degree of Brix between its original density and 22 degrees Brix. The proprietor, prior to using concentrated fruit juice in wine production, shall obtain a statement in which the producer certifies the kind of fruit from which it was produced and the total solids content of the juice before and after concentration. Concentrated or unconcentrated fruit juice may be used in juice or wine made from the same kind of fruit for the purposes of chaptalizing or sweetening, as provided in this part. Concentrated fruit juice, or juice which has been concentrated and reconstituted, may not be used in standard wine production if at any time it was concentrated to more than 80 degrees Brix.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1383, as amended ([26 U.S.C. 5382](https://www.govinfo.gov/link/uscode/26/5382)))
(Approved by the Office of Management and Budget under control number 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-413, [64 FR 46845](https://www.federalregister.gov/citation/64-FR-46845), Aug. 27, 1999]
#### § 24.181 Use of sugar.
Only sugar, as defined in [§ 24.10](/current/title-27/section-24.10), may be used in the production of standard wine. The quantity of sugar used will be determined either by measuring the increase in volume or by considering that each 13.5 pounds of pure dry sugar results in a volumetric increase of one gallon.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1383, as amended, 1384, as amended, 1385, as amended, 1387, as amended ([26 U.S.C. 5382](https://www.govinfo.gov/link/uscode/26/5382), [5383](https://www.govinfo.gov/link/uscode/26/5383), [5384](https://www.govinfo.gov/link/uscode/26/5384), [5392](https://www.govinfo.gov/link/uscode/26/5392)))
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31078](https://www.federalregister.gov/citation/56-FR-31078), July 9, 1991]
#### § 24.182 Use of acid to correct natural deficiencies.
(a) *General.* Acids of the kinds occurring in grapes or other fruit (including berries) may be added within the limitations of [§ 24.246](/current/title-27/section-24.246) to juice or wine in order to correct natural deficiencies; however, no acid may be added to juice or wine which is ameliorated to correct natural deficiencies except that in the production of grape wine, tartaric acid may be used to reduce the pH of the juice or wine. If tartaric acid is used to correct the pH of grape juice or wine, the fixed acid level of the juice shall be measured prior to the addition of any tartaric acid to determine the maximum quantity of ameliorating material allowed. In addition, when using tartaric acid to reduce the pH of ameliorated grape juice or wine, the pH cannot be reduced below 3.0.
(b) *Grape wine.* Tartaric acid or malic acid, or a combination of tartaric acid and malic acid, may be added prior to or during fermentation, to grapes or juice from grapes. In addition, after fermentation is completed, citric acid, fumaric acid, malic acid, lactic acid or tartaric acid, or a combination of two or more of these acids, may be added to correct natural deficiencies. However, the use of these acids, either prior to, during or after fermentation, may not increase the fixed acid level of the finished wine (calculated as tartaric acid) above 9.0 grams per liter. In cases where the wine contains 8.0 or more grams of total solids per 100 milliliters of wine, acids may be added to the extent that the finished wine does not contain more than 11.0 grams per liter of fixed acid (calculated as tartaric acid).
(c) *Fruit wine.* Only citric acid may be added to citrus fruit, juice or wine, only malic acid may be added to apples, apple juice or wine, and only citric acid or malic acid may be added to other fruit (including berries) or to juice or wine derived from other fruit (including berries) to correct natural deficiencies to 9.0 grams per liter of finished wine; however, if the wine contains 8.0 or more grams of total solids per 100 milliliters of wine, acids may be added to correct natural deficiencies to the extent that the finished wine does not contain more than 11.0 grams per liter of fixed acid (calculated as malic acid for apples and citric acid for other fruit (including berries).
(d) *Other use of acid.* A winemaker desiring to use an acid other than the acids allowed in [paragraphs (a)](/current/title-27/section-24.182#p-24.182\(a\)) and [(b)](/current/title-27/section-24.182#p-24.182\(b\)) of this section to correct natural deficiencies shall follow the procedure prescribed in [§ 24.250](/current/title-27/section-24.250). A winemaker desiring to use acid to stabilize standard wine shall follow the requirements prescribed by [§ 24.244](/current/title-27/section-24.244).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1383, as amended ([26 U.S.C. 5382](https://www.govinfo.gov/link/uscode/26/5382)))
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31078](https://www.federalregister.gov/citation/56-FR-31078), July 9, 1991; T.D. ATF-350, [58 FR 52230](https://www.federalregister.gov/citation/58-FR-52230), Oct. 7, 1993]
#### § 24.183 Use of distillates containing aldehydes.
Distillates containing aldehydes may be received on wine premises for use in the fermentation of wine and then returned to the distilled spirits plant from which distillates were withdrawn as distilling material. Distillates produced from one kind of fruit may not be used in the fermentation of wine made from a different kind of fruit. Distillates containing aldehydes which are received at bonded wine premises and not immediately used will be placed in a locked room or tank on bonded wine premises. Distillates containing aldehydes may not be mingled with wine spirits. If the distillates contain less than 0.1 percent of aldehydes, the proprietor shall comply with any additional condition relating to the receipt, storage, and use which the appropriate TTB officer may require to assure that the distillates are properly used and accounted for.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended, 1382, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367), [5373](https://www.govinfo.gov/link/uscode/26/5373)))
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.184 Use of volatile fruit-flavor concentrate.
(a) *General.* In the cellar treatment of natural wine of the winemaker's own production there may be added volatile fruit-flavor concentrate produced from the same kind of fruit or from the same variety of berry or grape so long as the proportion of volatile fruit-flavor concentrate added to the wine does not exceed the equivalent proportion of volatile fruit-flavor concentrate of the original juice or must from which the wine was produced.
(b) *Use of juice or must from which volatile fruit-flavor has been removed.* Juice, concentrated fruit juice, or must processed at a concentrate plant is considered to be pure juice, concentrated fruit juice, or must even though volatile fruit-flavor has been removed if, at a concentrate plant or at bonded wine premises, there is added to the juice, concentrated fruit juice, or must (or in the case of bonded wine premises, to wine of the winemaker's own production made therefrom), either the identical volatile fruit-flavor removed or an equivalent quantity of volatile fruit-flavor concentrate derived from the same kind of fruit or from the same variety of berry or grape.
(c) *Certificate required.* The proprietor, prior to the use of volatile fruit flavor concentrate in wine production, shall obtain a certificate from the producer stating the kind of fruit or the variety of berry or grape from which it was produced and the total solids content of the juice before and after concentration.
(Sec. 201. Pub. L. 85-859, 72 Stat. 1383, as amended ([26 U.S.C. 5382](https://www.govinfo.gov/link/uscode/26/5382)))
(Approved by the Office of Management and Budget under control number 1512-0298)
#### § 24.185 Use of wood to treat natural wine.
(a) *Treatment by contact.* Natural wine may be treated with any wood that is consistent with the food additive requirements under the Federal Food, Drug, and Cosmetic Act. The wood may be in the form of barrels, staves, chips, particles, or storage tanks that were used for the addition of wine spirits if the tanks are used for the baking of wine. The wood may be toasted (that is, heated to low, medium, or high, temperature without undergoing combustion), or charred and the wood must not be otherwise treated. If wine is treated with charred wood, the wood may not remove color from the wine.
(b) *Use of wood essences and extracts.* A proprietor may make or purchase for blending purposes wine that has been heavily treated with wood; however, wood preparations made with an alcohol solution stronger than 24 percent alcohol by volume are essences and must be used in accordance with [§ 24.85](/current/title-27/section-24.85). Wood essences and extracts must be consistent with the requirements of the Federal Food, Drug, and Cosmetics Act for that purpose and may be used only in “other wine” in accordance with [§ 24.218](/current/title-27/section-24.218). This [paragraph (b)](/current/title-27/section-24.185#p-24.185\(b\)) applies to liquid extracts and essences and to the extracts and essences in powder form or dissolved in water after the solvent has been evaporated.
(c) *Use of wooden storage tanks.* Wooden storage tanks used for the addition of spirits may be used for the baking of wine.
\[T.D. TTB-185, [87 FR 51897](https://www.federalregister.gov/citation/87-FR-51897), Aug. 24, 2022]
#### § 24.186 Accidental additions of water.
(a) *Accidental additions of water totaling 1 percent or less of the volume of standard wine.* When in the production, storage, treatment, or finishing of standard wine, water is accidentally added to a standard wine in an amount that does not exceed 1 percent of the total volume of the wine, such wine shall remain standard wine and the proprietor need not take any action to correct the wine.
(b) *Correction of accidental additions of water.* When in the production, storage, treatment, or finishing of standard wine water is accidentally added to a standard wine in an amount that exceeds 1 percent of the volume of the wine, such wine may be corrected by removal of the accidentally added water from the wine in accordance with [§ 24.252](/current/title-27/section-24.252).
\[T.D. TTB-185, [87 FR 51897](https://www.federalregister.gov/citation/87-FR-51897), Aug. 24, 2022]
## Subpart G—Production of Effervescent Wine
#### § 24.190 General.
(a) Effervescent wine may be made on bonded wine premises. Where the effervescence results from fermentation of the wine within a closed container, the wine is classified and taxed as sparkling wine or as hard cider, as applicable. In such wine, the use of carbon dioxide, nitrogen gas, or a combination of both, is permitted to maintain counterpressure during transfer and bottling. Wine carbonated by injection of carbon dioxide is classified and taxed as artificially carbonated wine or as hard cider, as applicable. (For wine to be classified and taxed at the hard cider tax rate, it must meet the requirements set forth in [§ 24.331](/current/title-27/section-24.331), including the limitation of not more than 0.64 gram of carbon dioxide per 100 milliliters.)
(b) Effervescent wine and any wine used as a base in the production of effervescent wine may not have an alcohol content in excess of 14 percent by volume. However, wine containing more than 14 percent alcohol by volume may be used in preparing a dosage for finishing effervescent wine.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1383, as amended ([26 U.S.C. 5382](https://www.govinfo.gov/link/uscode/26/5382)))
\[T.D. TTB-147, [82 FR 7663](https://www.federalregister.gov/citation/82-FR-7663), Jan. 23, 2017]
#### § 24.191 Segregation of operations.
Where more than one process of producing effervescent wine is used, the appropriate TTB officer may require the portion of the premises used for the production and storage of wine made by each process (bottle fermenting, bulk fermenting, or injecting carbon dioxide) to be segregated as provided by [§ 24.27](/current/title-27/section-24.27).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5365](https://www.govinfo.gov/link/uscode/26/5365)))
\[T.D. TTB-147, [82 FR 7663](https://www.federalregister.gov/citation/82-FR-7663), Jan. 23, 2017]
#### § 24.192 Process and materials.
In preparing still wine or still hard cider for the production of effervescent wine, sugar and acid of the kinds and within the limitations prescribed in [§ 24.182](/current/title-27/section-24.182) may be added with yeast or yeast culture to acclimate the yeast and to facilitate the process of secondary fermentation or to correct the wine. Fruit syrup, sugar, wine, wine spirits, and acid may be used in preparing a finishing dosage for effervescent wine provided the dosage does not exceed 10 percent by volume of the finished product. Where the proprietor desires to use more than 10 percent by volume finishing dosage, the proprietor shall file for a formula approval under [§ 24.80](/current/title-27/section-24.80). The fruit syrup, wine spirits and wine used will come from the same kind of fruit as the wine from which the effervescent wine is made. In the production of effervescent wine, taxpaid wine spirits or wine spirits withdrawn tax-free may be used. Tax-free wine spirits may only be used in the production of effervescent wine that is a natural wine. In the refermentation and finishing of a sparkling wine or sparkling hard cider, the acids and materials specifically authorized in [§ 24.246](/current/title-27/section-24.246) may be used.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1383, as amended ([26 U.S.C. 5382](https://www.govinfo.gov/link/uscode/26/5382)))
(Approved by the Office of Management and Budget under control number 1512-0059)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. TTB-147, [82 FR 7663](https://www.federalregister.gov/citation/82-FR-7663), Jan. 23, 2017]
#### § 24.193 Conversion into still wine or still hard cider.
Effervescent wine may be dumped for use as still wine or still hard cider. The dumping process will allow the loss of carbon dioxide remaining in the wine.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1331, as amended ([26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041), [5361](https://www.govinfo.gov/link/uscode/26/5361)))
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. TTB-147, [82 FR 7663](https://www.federalregister.gov/citation/82-FR-7663), Jan. 23, 2017]
## Subpart H—Production of Special Natural Wine
#### § 24.195 General.
Special natural wine is a flavored wine made on bonded wine premises from a base of natural wine. The flavoring added may include natural herbs, spices, fruit juices, natural aromatics, natural essences or other natural flavoring, in quantities or proportions such that the resulting product derives character and flavor distinctive from the base wine and distinguishable from other natural wine. Fruit juices may not be used to give to one natural wine the flavor of another but may be used with herbs or spices to produce a wine having a distinctive flavor. Caramel and sugar may be used in a special natural wine. However, the minimum 60 degrees Brix limitations prescribed in the definition of “Liquid pure sugar” and “Invert sugar syrup” in [§ 24.10](/current/title-27/section-24.10) do not apply to materials used in the manufacture of vermouth. Finished vermouth will contain a minimum of 80 percent by volume natural wine. Heavy bodied blending wine and juice or concentrated fruit juice to which wine spirits have been added may be used in the production of special natural wine pursuant to formula approval.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1386, as amended ([26 U.S.C. 5386](https://www.govinfo.gov/link/uscode/26/5386)))
(Approved by the Office of Management and Budget under control number 1512-0059)
#### § 24.196 Formula required.
Before producing any special natural wine, the proprietor shall receive approval of the formula by which it is to be made as provided by [§ 24.80](/current/title-27/section-24.80). Any change in a formula will be approved in advance as provided by [§ 24.81](/current/title-27/section-24.81).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1386, as amended ([26 U.S.C. 5386](https://www.govinfo.gov/link/uscode/26/5386)))
(Approved by the Office of Management and Budget under control number 1512-0059)
#### § 24.197 Production by fermentation.
In producing special natural wine by fermentation, flavoring materials may be added before or during fermentation. Special natural wine produced by fermentation may be ameliorated in the same manner and to the same extent as natural wine made from the same fruit. Spirits may not be added to special natural wine with the exception of spirits contained in the natural wine used as a base or in authorized essences made on bonded wine premises as provided in [§ 24.86](/current/title-27/section-24.86) or in approved essences made elsewhere. Upon removal of the wine from fermenters, the volume of liquid will be determined accurately and recorded as wine produced. The quantity of liquid in fermenters at the close of each reporting period will be reported on the TTB F 5120.17, Report of Bonded Wine Premises Operations.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1386, as amended ([26 U.S.C. 5386](https://www.govinfo.gov/link/uscode/26/5386)))
(Approved by the Office of Management and Budget under control numbers 1512-0216 and 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by ATF-338, [58 FR 19064](https://www.federalregister.gov/citation/58-FR-19064), Apr. 12, 1993]
#### § 24.198 Blending.
Special natural wine may be blended with other special natural wine of the same class and kind, and with heavy bodied blending wine, or natural wine of the same kind of fruit, in the further production of special natural wine. The blending of special natural wines produced under different formulas requires the filing and approval of a formula authorizing a blending; however, where two or more formulas have been approved for the production of special natural wine of the same type, e.g., producing a sweet vermouth by blending sweet vermouths produced under two or more approved formulas, the submission and approval of an additional formula is not required.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1386, as amended ([26 U.S.C. 5386](https://www.govinfo.gov/link/uscode/26/5386)))
(Approved by the Office of Management and Budget under control number 1512-0059)
## Subpart I—Production of Agricultural Wine
#### § 24.200 General.
Agricultural wine may be produced on bonded wine premises from suitable agricultural products other than the juice of fruit. Water or sugar, or both, may be used within the limitations of this subpart in the production of agricultural wine. Agricultural wine may not be flavored or colored; however, hops may be used in the production of honey wine. Spirits may not be used in the production of the wine and a wine made from one agricultural product may not be blended with a wine made from another agricultural product. Agricultural wine made with sugar in excess of the limitations of this subpart is other than standard wine and will be segregated and clearly identified. Since grain, cereal, malt, or molasses are not suitable materials for the production of agricultural wine, these materials may not be received on bonded wine premises. Beverage alcohol products made with these materials are not classed as wine and may not be produced or stored on bonded wine premises.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1386, as amended ([26 U.S.C. 5387](https://www.govinfo.gov/link/uscode/26/5387)))
#### § 24.201 Formula required.
Before producing any agricultural wine, the proprietor shall obtain an approval of the formula and process by which it is to be made pursuant to the provisions of [§ 24.80](/current/title-27/section-24.80). Any change in a formula will be approved in advance as provided by [§ 24.81](/current/title-27/section-24.81).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1386, as amended ([26 U.S.C. 5387](https://www.govinfo.gov/link/uscode/26/5387)))
(Approved by the Office of Management and Budget under control number 1512-0059)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13685](https://www.federalregister.gov/citation/64-FR-13685), Mar. 22, 1999]
#### § 24.202 Dried fruit.
In the production of wine from dried fruit, a quantity of water sufficient to restore the moisture content to that of the fresh fruit may be added. If it is desired not to restore the moisture content of the dried fruit to that of the fresh fruit, or if the moisture content is not known, sufficient water may be added to reduce the density to 22 degrees Brix. If the dried fruit liquid after restoration is found to be deficient in sugar, sufficient pure dry sugar may be added to increase the total solids content to 25 degrees Brix. After addition of water to the dried fruit, the resulting liquid may be ameliorated with either water or sugar, or both, in such total volume as may be necessary to reduce the natural fixed acid level of the mixture to a minimum of 5.0 grams per liter; however, in no event may the volume of the ameliorating material exceed 35 percent of the total volume of the ameliorated juice or wine (calculated exclusive of pulp). Pure dry sugar may be used for sweetening. After complete fermentation or complete fermentation and sweetening, the finished product may not have a total solids content that exceeds 35 degrees Brix.
([26 U.S.C. 5387](https://www.govinfo.gov/link/uscode/26/5387))
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. TTB-23, [70 FR 2801](https://www.federalregister.gov/citation/70-FR-2801), Jan. 18, 2005]
#### § 24.203 Honey wine.
(a) Subject to [paragraph (b)](/current/title-27/section-24.203#p-24.203\(b\)) of this section, a winemaker, in the production of wine from honey, may add the following:
(1) Water to facilitate fermentation, provided the density of the honey and water mixture is not reduced below 13 degrees Brix;
(2) Hops in quantities not to exceed one pound for each 1,000 pounds of honey; and
(3) Pure, dry sugar or honey for sweetening. Sugar may be added only after fermentation is completed.
(b) After complete fermentation or complete fermentation and sweetening, the wine may not have an alcohol content of more than 14 percent by volume or a total solids content that exceeds 35 degrees Brix.
([26 U.S.C. 5387](https://www.govinfo.gov/link/uscode/26/5387))
\[T.D. TTB-23, [70 FR 2801](https://www.federalregister.gov/citation/70-FR-2801), Jan. 18, 2005]
#### § 24.204 Other agricultural products.
In the production of wine from agricultural products, other than dried fruit and honey, water and sugar may be added to the extent necessary to facilitate fermentation; *Provided,* That the total weight of pure dry sugar used for fermentation is less than the weight of the primary winemaking material and the density of the mixture prior to fermentation is not less than 22 degrees Brix, if water, or liquid sugar, or invert sugar syrup is used. Additional pure dry sugar may be used for sweetening, provided the alcohol content of the finished wine after complete fermentation or after complete fermentation and sweetening, is not more than 14 percent by volume and the total solids content is not more than 35 degrees Brix.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1386, as amended, 1387, as amended ([26 U.S.C. 5387](https://www.govinfo.gov/link/uscode/26/5387)))
## Subpart J—Production of Other Than Standard Wine
#### § 24.210 Classes of wine other than standard wine.
The following classes of wine are not standard wine:
(a) High fermentation wine, produced as provided in [§ 24.212](/current/title-27/section-24.212);
(b) Heavy bodied blending wine, produced as provided in [§ 24.213](/current/title-27/section-24.213);
(c) Spanish type blending sherry, produced as provided in [§ 24.214](/current/title-27/section-24.214);
(d) Wine products not for beverage use, produced as provided in [§ 24.215](/current/title-27/section-24.215);
(e) Distilling material, produced as provided in [§ 24.216](/current/title-27/section-24.216);
(f) Vinegar stock, produced as provided in [§ 24.217](/current/title-27/section-24.217); and
(g) Wines other than those in classes listed in paragraphs (a), (b), (c), (d), (e), and (f), of this section produced as provided in [§ 24.218](/current/title-27/section-24.218).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1387, as amended ([26 U.S.C. 5388](https://www.govinfo.gov/link/uscode/26/5388)))
#### § 24.211 Formula required.
The proprietor who desires to produce wine other than standard wine shall first obtain approval of the formula by which it is to be made, except that no formula is required for distilling material or vinegar stock. The formula is filed as provided by [§ 24.80](/current/title-27/section-24.80). Any change in the formula will be approved in advance as provided by [§ 24.81](/current/title-27/section-24.81).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1387, as amended ([26 U.S.C. 5388](https://www.govinfo.gov/link/uscode/26/5388)))
(Approved by the Office of Management and Budget under control number 1512-0059)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13685](https://www.federalregister.gov/citation/64-FR-13685), Mar. 22, 1999]
#### § 24.212 High fermentation wine.
High fermentation wine is wine made with the addition of sugar within the limitations prescribed for natural wine except that the alcohol content after complete fermentation or complete fermentation and sweetening is more than 14 percent and wine spirits have not been added. Although high fermentation wine is not a standard wine, it is produced, stored, and handled on bonded wine premises subject to the same marking or labeling requirements.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended, 1387, as amended ([26 U.S.C. 5365](https://www.govinfo.gov/link/uscode/26/5365), [5388](https://www.govinfo.gov/link/uscode/26/5388)))
#### § 24.213 Heavy bodied blending wine.
Heavy bodied blending wine is wine made for blending purposes from grapes or other fruit without added sugar, and with or without added wine spirits, and having a total solids content in excess of 21 percent. Heavy bodied blending wine may be used in blending with other wine made from the same kind of fruit or for removal upon payment of tax, not for sale or consumption as beverage wine. Upon removal, the shipping containers and shipping records will be marked “Heavy Bodied Blending Wine—Not for Sale or Consumption as Beverage Wine.”
(Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended, 1387, as amended ([26 U.S.C. 5361](https://www.govinfo.gov/link/uscode/26/5361), [5388](https://www.govinfo.gov/link/uscode/26/5388)))
(Approved by the Office of Management and Budget under control numbers 1512-0298 and 1512-0503)
#### § 24.214 Spanish type blending sherry.
Blending wine made with partially caramelized grape concentrate may be produced, stored, and handled on, or transferred in bond between, bonded wine premises, or removed upon payment of tax, not for sale or consumption as beverage wine. Wine of a high solids content and dark in color, produced under this section, is designated “Spanish Type Blending Sherry.” Upon removal, the shipping containers will be marked with the applicable designation and the legend “Not for Sale or Consumption as Beverage Wine.” Spanish type blending sherry is not standard wine and may not be blended with standard wine except pursuant to an approved formula or in the further production of this type of wine.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended, 1381, as amended, 1387, as amended ([26 U.S.C. 5361](https://www.govinfo.gov/link/uscode/26/5361), [5388](https://www.govinfo.gov/link/uscode/26/5388)))
(Approved by the Office of Management and Budget under control numbers 1512-0059 and 1512-0503)
#### § 24.215 Wine or wine products not for beverage use.
(a) *General.* Wine, or wine products made from wine, may be treated with methods or materials which render the wine or wine products unfit for beverage use. No wine or wine products so treated may contain more than 21 percent of alcohol by volume at the time of withdrawal free of tax from bonded wine premises; nor may any wine or wine product so withdrawn be used in the compounding of distilled spirits or wine for beverage use or in the manufacture of any product intended to be used in the compounding. Wine or wine products produced under this section will be clearly identified and segregated from beverage wine products while stored on bonded wine premises and may be transferred in bond between bonded wine premises. The shipping records for transfers in bond of nonbeverage wine or wine products will be marked “Not for Sale or Consumption as Beverage Wine.” Upon removal from bonded wine premises free of tax, containers of nonbeverage wine or wine products will be marked to clearly indicate such products are not for sale or consumption as beverage wine, e.g., salted wine, vinegar, nonbeverage cooking wine.
(b) *Salted wine.* Salted wine is a wine or wine product not for beverage use produced in accordance with the provisions of this section and having not less than 1.5 grams of salt per 100 milliliter of wine. (12.5 pounds of salt/100 gallons of wine.)
(c) *Vinegar.* Vinegar is a wine or wine product not for beverage use produced in accordance with the provisions of this section and having not less than 4.0 grams (4.0 percent) of volatile acidity (calculated as acetic acid and exclusive of sulfur dioxide) per 100 milliliters of wine.
(Sec. 201, Pub. L. 85-859 and Sec. 455, Pub. L. 98-369, 72 Stat. 1380, as amended ([26 U.S.C. 5361](https://www.govinfo.gov/link/uscode/26/5361), [5362](https://www.govinfo.gov/link/uscode/26/5362)))
(Approved by the Office of Management and Budget under control number 1512-0503)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31079](https://www.federalregister.gov/citation/56-FR-31079), July 9, 1991]
#### § 24.216 Distilling material.
Wine may be produced on bonded wine premises from grapes and other fruit, natural fruit products, or fruit residues, for use as distilling material, using any quantity of water desired to facilitate fermentation or distillation. No sugar may be added in the production of distilling material. Distillates containing aldehydes may be used in the fermentation of wine to be used as distilling material. Lees, filter wash, and other wine residues may also be accumulated on bonded wine premises for use as distilling material.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended, 1381, as amended, 1382, as amended ([26 U.S.C. 5361](https://www.govinfo.gov/link/uscode/26/5361), [5373](https://www.govinfo.gov/link/uscode/26/5373)))
#### § 24.217 Vinegar stock.
Vinegar stock may be produced on bonded wine premises with the addition of any quantity of water desired to meet commercial standards for the production of vinegar. Vinegar stock may be made only by the addition of water to wine or by the direct fermentation of the juice of grapes or other fruit with added water.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended, 1381, as amended ([26 U.S.C. 5361](https://www.govinfo.gov/link/uscode/26/5361)))
#### § 24.218 Other wine.
(a) *General.* Other than standard wine not included in other sections in this subpart are considered other wine. Those wines considered to be other wine include:
(1) Wine made with sugar, water, or sugar and water beyond the limitations prescribed for standard wine.
(2) Wine made by blending wines produced from different kinds of fruit.
(3) Wine made with sugar other than pure dry sugar, liquid pure sugar, and invert sugar syrup.
(4) Wine made with materials not authorized for use in standard wine.
(b) *Production of other wine.* Other wine may be made on bonded wine premises but will remain segregated from standard wine. Other wine will have a basic character derived from the primary winemaking material. If sugar is used to make other wine, the aggregate weight of the sugar used before and during fermentation will be less than the weight of the primary wine producing material. Wine spirits may be added to other wine. Upon removal, other wine will be marked or labeled with a designation which will adequately disclose the nature and composition of the wine.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended, 1387, as amended ([26 U.S.C. 5365](https://www.govinfo.gov/link/uscode/26/5365), [5388](https://www.govinfo.gov/link/uscode/26/5388)))
(Approved by the Office of Management and Budget under control number 1512-0503)
## Subpart K—Spirits
#### § 24.225 Production and use of spirits.
(a) *Withdrawal of spirits.* The proprietor of a bonded wine premises may withdraw and receive wine spirits without payment of tax from the bonded premises of a distilled spirits plant for use as provided in this section.
(b) *Production and use of wine spirits* —
(1) *In general.* The only products considered to be wine spirits authorized for use in wine production under this section are brandy or wine spirits produced in a distilled spirits plant (with or without the use of water to facilitate the extraction and distillation) exclusively from:
(i) Fresh or dried fruit or their residues;
(ii) Natural wine or wine residues from fresh or dried fruit, including spirits byproducts of authorized wine treatments to reduce alcohol; or
(iii) Special natural wine. If wine spirits produced from special natural wine contain any flavor characteristics of the special natural wine, those wine spirits may be used only in the production of a special natural wine.
(2) *Distillation proof requirements.* The proof of wine spirits at distillation must not be reduced by the addition of water. In addition, a product is not considered to be wine spirits if it is distilled at less than 140 degrees of proof except in the following cases:
(i) Commercial brandy aged in wood for a period of not less than 2 years, and barreled at not less than 100 degrees of proof, shall be deemed wine spirits for purposes of this section; and
(ii) Spirits byproducts of alcohol reduction processing authorized under [§ 24.248](/current/title-27/section-24.248) that are produced at a distilled spirits plant and distilled, if necessary, at not less than 90 degrees of proof shall be deemed wine spirits for purposes of this section.
(3) *Addition of sugar after fermentation.* When, in the production of natural wine or special natural wine, sugar has been added after fermentation, the wine may not be refermented to develop alcohol from such added sugar and then used in the production of wine spirits.
(4) *Addition of wine spirits to natural wine.*
(i) Wine spirits produced in the United States may be added to natural wine on bonded wine premises if both the wine and the spirits are produced from the same kind of fruit.
(ii) In the case of natural still wine, wine spirits may be added in any State only to wine produced by fermentation on bonded wine premises located within the same State.
(iii) If wine has been ameliorated, wine spirits may be added (whether or not wine spirits were previously added) only if the wine contains not more than 14 percent of alcohol by volume derived from fermentation.
(c) *Spirits other than wine spirits.* Spirits other than wine spirits may be received, stored, and used on bonded premises only for the production of nonbeverage wine products.
\[T.D. TTB-185, [87 FR 51897](https://www.federalregister.gov/citation/87-FR-51897), Aug. 24, 2022]
#### § 24.226 Receipt or transfer of spirits.
When spirits are received at the bonded wine premises, the proprietor shall determine that the spirits are the same as described on the transfer record and follow the procedures prescribed by [§ 19.407 of this chapter](/current/title-27/section-19.407). A copy of the transfer record, annotated to show any difference between the description of spirits and quantity received, will be maintained by the proprietor as a record of receipt. If spirits are to be transferred to a distilled spirits plant or to bonded wine premises, the proprietor shall use the transfer record and procedures prescribed by [§ 19.405 of this chapter](/current/title-27/section-19.405).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1382, as amended ([26 U.S.C. 5373](https://www.govinfo.gov/link/uscode/26/5373)))
(Approved by the Office of Management and Budget under control number 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. TTB-92, [76 FR 9171](https://www.federalregister.gov/citation/76-FR-9171), Feb. 16, 2011]
#### § 24.227 Transfer of spirits by pipeline for immediate use.
Spirits transferred by pipeline for immediate use are gauged either by weight or by volume on the bonded premises of the distilled spirits plant. Where the spirits are gauged on the bonded premises of the distilled spirits plant, the pipelines will be directly connected with the spirits addition tanks. The valves in the pipeline will be closed and locked with a lock at all times except when necessary to be opened for the transfer of spirits. Where the proprietor has placed wine in a spirits addition tank and has determined the quantity of spirits to be added, the spirits may be transferred.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1382, as amended ([26 U.S.C. 5373](https://www.govinfo.gov/link/uscode/26/5373)))
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31079](https://www.federalregister.gov/citation/56-FR-31079), July 9, 1991]
#### § 24.228 Transfer of spirits by pipeline to a spirits storage tank.
Where it is desired to transfer spirits by pipeline to bonded wine premises and store the spirits prior to use, there will be provided a suitable tank for storing the spirits. The spirits to be transferred, if not gauged on the bonded premises of the distilled spirits plant, will be gauged by weight or volume on bonded wine premises.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1382, as amended ([26 U.S.C. 5373](https://www.govinfo.gov/link/uscode/26/5373)))
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31079](https://www.federalregister.gov/citation/56-FR-31079), July 9, 1991]
#### § 24.229 Tank car and tank truck requirements.
Railroad tank cars and tank trucks used to transport spirits for use in wine production will be constructed, marked, filled, labeled, and inspected in the manner required by regulations in [27 CFR part 19](/current/title-27/part-19).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1362, as amended ([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206), [5214](https://www.govinfo.gov/link/uscode/26/5214)))
#### § 24.230 Examination of tank car or tank truck.
Upon arrival of a tank car or tank truck at the bonded wine premises, the proprietor shall carefully examine the car or truck to see whether the seals are intact and whether there is any evidence of tampering or loss by leaking or otherwise. Any evidence of loss will be reported to the appropriate TTB officer. The contents of the tank car or tank truck will be gauged by weight or volume at the time of receipt by the proprietor. If the tank car or tank truck has been accurately calibrated and the calibration chart is available at the bonded wine premises, the spirits may be gauged by volume in the tank car or tank truck. In any case where a volume gauge is made, the actual measurements of the spirits in the gauging tank, tank car, or tank truck, and the temperature of the spirits will be recorded on the copy of the transfer record accompanying the shipment.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1360, as amended, 1362, as amended, 1381, as amended ([26 U.S.C. 5206](https://www.govinfo.gov/link/uscode/26/5206), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5366](https://www.govinfo.gov/link/uscode/26/5366)))
(Approved by the Office of Management and Budget under control number 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13684](https://www.federalregister.gov/citation/64-FR-13684), Mar. 22, 1999]
#### § 24.231 Receipt of spirits in sealed bulk containers.
The proprietor shall examine sealed bulk containers (packages) of spirits received at the bonded wine premises to verify that the containers are the same as those described on the transfer record accompanying the shipment. Any container which appears to have been tampered with or from which spirits appear to have been removed or lost will be gauged by the proprietor and the proprietor shall prepare and submit to the appropriate TTB officer a statement setting forth fully the circumstances and apparent cause of any loss.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended, 1382, as amended ([26 U.S.C. 5366](https://www.govinfo.gov/link/uscode/26/5366), [5367](https://www.govinfo.gov/link/uscode/26/5367), [5368](https://www.govinfo.gov/link/uscode/26/5368), [5373](https://www.govinfo.gov/link/uscode/26/5373)))
(Approved by the Office of Management and Budget under control numbers 1512-0292 and 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.232 Gauge of spirits.
(a) If the spirits to be used are in a spirits storage tank on bonded wine premises, or are received immediately prior to use from a distilled spirits plant not adjacent or contiguous to bonded wine premises, the proprietor shall determine the proof of the spirits and the quantity used by volume gauge or by weight. Upon completion of the transfer of spirit from the spirits storage tank to the spirits addition tank, the proprietor shall lock the spirits storage tank.
(b) If the spirits are received from the adjacent or contiguous bonded premises of a distilled spirits plant and are transferred directly into a spirits addition tank, the gauge of the spirits made on the distilled spirits plant premises will be used. The proprietor at the distilled spirits plant premises shall deliver a transfer record to the proprietor of bonded wine premises who shall acknowledge receipt of the spirits on the transfer record.
(c) If the spirits are received in packages and the quantity of spirits needed for the addition is not equal to the contents of full packages, a portion of one package may be used and the remnant package returned to the spirits storage room. The proprietor shall gauge the remnant package and attach to it a label showing the date of gauge, the weight of the remnant package, and the proof. The remnant package will be used at the first opportunity.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended, 1382, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367), [5368](https://www.govinfo.gov/link/uscode/26/5368), [5373](https://www.govinfo.gov/link/uscode/26/5373)))
(Approved by the Office of Management and Budget under control number 1512-0298)
#### § 24.233 Addition of spirits to wine.
(a) *Prior to the addition of spirits.* Wine will be placed in tanks approved for the addition of spirits. The proprietor shall accurately measure the wine, determine its alcohol content, determine the proof of the spirits to be added, calculate the quantity of spirits required, and enter the details in the record of spirits added to wine.
(b) *After the addition of spirits.* The proprietor shall thoroughly agitate the contents of the tank to assure a complete mixture of the wine and spirits. The proprietor shall then measure the volume of wine in the tank, take a representative sample of the wine, and test for alcohol content. The result of the measurement and test and the quantity of spirits added will be entered in the record of spirits added to wine. The volume of wine used and the volume of wine resulting from the addition of spirits will be entered in the bulk wine record. The alcohol content of wine after the addition of spirits may not exceed 24 percent by volume.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended, 1382, as amended, 1383, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367), [5373](https://www.govinfo.gov/link/uscode/26/5373), [5382](https://www.govinfo.gov/link/uscode/26/5382)))
(Approved by the Office of Management and Budget under control number 1512-0298)
#### § 24.234 Other use of spirits.
The proprietor producing effervescent wine, formula wine, or essences for which spirits are required may use tax-free wine spirits or brandy. For nonbeverage wine, tax-free spirits other than wine spirits or brandy may also be used. The spirits received by the proprietor will be locked in a secure room or locker on bonded wine premises. The spirits will remain in the original container in the storeroom until withdrawn for use.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1382, as amended, 1383, as amended ([26 U.S.C. 5373](https://www.govinfo.gov/link/uscode/26/5373), [5382](https://www.govinfo.gov/link/uscode/26/5382)))
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. TTB-147, [82 FR 7663](https://www.federalregister.gov/citation/82-FR-7663), Jan. 23, 2017]
#### § 24.235 Taxpayment or destruction of spirits.
(a) *Taxpayment of spirits.* The proprietor who wants to taxpay spirits shall follow the prepayment of tax procedures of [§ 19.233 of this chapter](/current/title-27/section-19.233).
(b) *Destruction of spirits.* The proprietor who wants to destroy spirits shall file an application with the appropriate TTB officer stating the quantity of spirits, the proposed date and method of destruction, and the reason for destruction. Spirits may not be destroyed prior to approval by the appropriate TTB officer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1382, as amended ([26 U.S.C. 5373](https://www.govinfo.gov/link/uscode/26/5373)))
(Approved by the Office of Management and Budget under control number 1512-0292)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13684](https://www.federalregister.gov/citation/64-FR-13684), Mar. 22, 1999; T.D. TTB-92, [76 FR 9171](https://www.federalregister.gov/citation/76-FR-9171), Feb. 16, 2011]
#### § 24.236 Losses of spirits.
Losses by theft or any other cause of spirits while on bonded wine premises or in transit are to be determined and reported at the time the losses are discovered. A physical inventory of the spirits storage tanks will be taken at the close of any month during which spirits were used in wine production, or upon completion of spirits use for the month or at any other time required by the appropriate TTB officer. Any loss which has not previously been reported will be determined by the inventory.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended ([26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008), [5373](https://www.govinfo.gov/link/uscode/26/5373)))
(Approved by the Office of Management and Budget under control number 1512-0292)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.237 Spirits added to juice or concentrated fruit juice.
Juice or concentrated fruit juice to which spirits have been added may not have an alcohol content exceeding 24 percent by volume. Although not considered to be wine, juice or concentrated fruit juice to which spirits have been added will be included in the appropriate tax class of any wine inventory and will be properly identified. Juice or concentrated juice to which wine spirits are added will be reported on the TTB F 5120.17, Report of Bonded Wine Premises Operations, as wine, but a separate record will be maintained.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1383, as amended ([26 U.S.C. 5382](https://www.govinfo.gov/link/uscode/26/5382)))
(Approved by the Office of Management and Budget under control numbers 1512-0216 and 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-338, [58 FR 19064](https://www.federalregister.gov/citation/58-FR-19064), Apr. 12, 1993]
## Subpart L—Storage, Treatment and Finishing of Wine
#### § 24.240 General.
Wine will be stored on bonded wine premises in buildings or tanks constructed and secured in accordance with the provisions of [§§ 24.166](/current/title-27/section-24.166) and [24.167](/current/title-27/section-24.167). Wine will be stored in tanks, casks, barrels, cased or uncased bottles, or in any other suitable container, which will not contaminate the wine. Specifically authorized materials and processes for the treatment and finishing of wine are listed in [§§ 24.246](/current/title-27/part-24/section-24.246) and [24.248 of this subpart](/current/title-27/part-24/section-24.248).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1378, as amended, 1379, as amended, 1383, as amended, 1395, as amended ([26 U.S.C. 5352](https://www.govinfo.gov/link/uscode/26/5352), [5357](https://www.govinfo.gov/link/uscode/26/5357), [5382](https://www.govinfo.gov/link/uscode/26/5382), [5552](https://www.govinfo.gov/link/uscode/26/5552)))
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31079](https://www.federalregister.gov/citation/56-FR-31079), July 9, 1991]
#### § 24.241 Decolorizing juice or wine.
(a) *Conditions and limitations.* If the proprietor wishes to use activated carbon or other decolorizing material to remove color from juice or wine, the following conditions and limitations will be met:
(1) The wine will retain a vinous character after being treated with activated carbon or other decolorizing material;
(2) The quantity of activated carbon used to treat the wine, including the juice from which the wine was produced, may not exceed twenty-five pounds per 1,000 gallons (3.0 grams per liter) (see [paragraph (b)](/current/title-27/section-24.241#p-24.241\(b\)) of this section); and
(3) The wine treated with decolorizing material will have a color of not less than 0.6 Lovibond in a one-half inch cell or not more than 95 percent transmittance per AOAC Method 11.003-11.004 (see [paragraph (c)](/current/title-27/section-24.241#p-24.241\(c\)) of this section). However, the proprietor may produce a wine having a color of less than 0.6 Lovibond or more than 95 percent transmittance per AOAC Method 11.003-11.004 by using normal methods and without the use of decolorizing material.
(b) *Transfer in bond.* When a consignor proprietor transfers wine treated with activated carbon or other decolorizing material to a consignee proprietor, the consignor proprietor shall record on the shipping record:
(1) The amount of wine which has been treated under the provisions of this section; and
(2) The quantity of decolorizing material used in treating the wine, including the juice from which the wine was produced, before its transfer. The consignee proprietor may further treat the wine with decolorizing material as long as the consignee proprietor has a copy of the shipping record and complies with the requirements of this section.
(c) Incorporation by reference. The “Official Methods of Analysis of the Association of Official Analytical Chemists” (AOAC Method 11.003-11.004; 13th Edition 1980) is incorporated by reference in this part. This incorporation by reference was approved by the Director of the Federal Register, and is available for inspection or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *[https://www.archives.gov/federal-register/cfr/ibr-locations.html](https://www.archives.gov/federal-register/cfr/ibr-locations.html).* The publication is available from the Association of Official Analytical Chemists, 11 North 19th Street, Suite 210, Arlington, Virginia 22209.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1383, as amended ([26 U.S.C. 5382](https://www.govinfo.gov/link/uscode/26/5382)))
(Approved by the Office of Management and Budget under control number 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended at [69 FR 18803](https://www.federalregister.gov/citation/69-FR-18803), Apr. 9, 2004; T.D. TTB-196, [89 FR 87941](https://www.federalregister.gov/citation/89-FR-87941), Nov. 6, 2024]
#### § 24.242 Authority to use greater quantities of decolorizing material in juice or wine.
(a) *Proprietor's notice.* If the proprietor desires to remove color from juice prior to fermentation or if color in excess of that normally present in wine develops during the production or storage of a particular lot or lots, and if the proprietor desires to use activated carbon in excess of twenty-five pounds per 1,000 gallons (3.0 grams per liter) of juice or wine to remove this color, the proprietor, prior to starting the treatment, shall submit to the appropriate TTB officer a written notice for each lot of juice or wine to be treated for decolorization. The written notice will state
(1) The reason for the treatment;
(2) The volume, kind, and type of juice or wine to be treated;
(3) The kind and quantity of decolorizing material to be used; and,
(4) The length of time the decolorizing material is in contact with the juice or wine.
(b) *Action by the appropriate TTB officer on proprietor's notice.* Upon receipt of the proprietor's notice, the appropriate TTB officer may require the proprietor to submit samples representative of the lot of juice or wine for examination by the TTB laboratory.
(c) *Samples and chemical analysis* —
(1) *Samples.* If the appropriate TTB officer requires samples under [paragraph (b)](/current/title-27/section-24.242#p-24.242\(b\)) of this section, the proprietor shall prepare samples representative of the lot of juice or wine for examination. The samples will consist of:
(i) The juice or wine before treatment with decolorizing material,
(ii) The juice or wine after treatment with decolorizing material, and
(iii) The decolorizing material used.
(2) *Chemical analysis.* If the TTB chemical analyses of the samples shows that the proposed treatment would remove only color and will not remove the vinous characteristics of the wine, the appropriate TTB officer will return an approved copy of the proprietor's written notice. If the TTB chemical analysis shows that the proposed treatment is not acceptable, the appropriate TTB officer will send the proprietor a letter stating the reason(s) for disallowing the proposed treatment.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1383, as amended ([26 U.S.C. 5382](https://www.govinfo.gov/link/uscode/26/5382)))
(Approved by the Office of Management and Budget under control numbers 1512-0292 and 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.243 Filtering aids.
Inert fibers, pulps, earths, or similar materials, may be used as filtering aids in the cellar treatment and finishing of wine. Agar-agar, carrageenan, cellulose, and diatomaceous earth are commonly employed inert filtering and clarifying aids. In general, there is no limitation on the use of inert materials and no records need be maintained concerning their use. However, if the inert material is dissolved in water prior to addition to wine, then the records required by [§ 24.301](/current/title-27/section-24.301) will be maintained. Filtering aids which contain active chemical ingredients or which may alter the character of wine, may be used only in accordance with the provisions of [§ 24.246](/current/title-27/section-24.246).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1383, as amended ([26 U.S.C. 5382](https://www.govinfo.gov/link/uscode/26/5382)))
(Approved by the Office of Management and Budget under control number 1512-0298)
#### § 24.244 Use of acid to stabilize standard wine.
Standard wine other than citrus wine, regardless of the fixed acid level, may be stabilized as a part of the finishing process by the addition of citric acid within the limitations of [§ 24.246](/current/title-27/section-24.246). Standard wine (including citrus wine) may be stabilized by the addition of fumaric acid within the limitations of [§ 24.246](/current/title-27/section-24.246).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1383, as amended ([26 U.S.C. 5382](https://www.govinfo.gov/link/uscode/26/5382)))
#### § 24.245 Use of carbon dioxide in still wine and still hard cider.
(a) *Use of carbon dioxide.* The addition of carbon dioxide to (and retention of carbon dioxide in) still wine and still hard cider is permitted if at the time of removal for consumption or sale, the still wine or still hard cider does not contain more than 0.392 gram of carbon dioxide per 100 milliliters of wine.
(b) *Tolerance limit.* A tolerance of not more than 0.009 gram per 100 milliliters to the maximum limitation of carbon dioxide in still wine and still hard cider will be allowed where the amount of carbon dioxide in excess of 0.392 gram per 100 milliliters is due to mechanical variations that cannot be completely controlled under good commercial practice. A tolerance will not be allowed where it is found by the appropriate TTB officer that the proprietor continuously or intentionally exceeds 0.392 gram of carbon dioxide per 100 milliliters of wine or where the variation results from the use of methods or equipment determined by the appropriate TTB officer to be not in accordance with good commercial practice.
(c) *Penalties.* Penalties are provided in [26 U.S.C. 5662](https://www.govinfo.gov/link/uscode/26/5662) for any person who, whether by manner of packaging or advertising or by any other form of representation, misrepresents any still wine or still hard cider to be effervescent wine or a substitute for effervescent wine.
(d) *Records.* Records for the use of carbon dioxide in still wine must be maintained in accordance with [§ 24.319](/current/title-27/section-24.319) of this section.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1331, as amended, 1381, as amended, 1407, as amended ([26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041), [5367](https://www.govinfo.gov/link/uscode/26/5367), [5662](https://www.govinfo.gov/link/uscode/26/5662)))
\[T.D. TTB-147, [82 FR 7663](https://www.federalregister.gov/citation/82-FR-7663), Jan. 23, 2017]
#### § 24.246 Materials authorized for the treatment of wine and juice.
(a) *Wine and juice.* Materials used in the process of filtering, clarifying, or purifying wine may remove cloudiness, precipitation, and undesirable odors and flavors, but the addition of any substance foreign to wine that changes the character of the wine, or the abstraction of ingredients so as to change the character of the wine, if not consistent with good commercial practice, is not permitted on bonded wine premises. The materials listed in this section are approved as being consistent with good commercial practice in the production, cellar treatment, or finishing of wine and, where applicable, in the treatment of juice, within the “Specific TTB limitation” of this section and subject to the following conditions:
(1) If the U.S. Food and Drug Administration (FDA) informs TTB that a specified use or limitation of any material listed in this section is inconsistent with the food additive requirements under the Federal Food, Drug, and Cosmetic Act, the appropriate TTB officer may cancel or amend the approval for use of the material in the treatment of wine and juice in the production, cellar treatment, or finishing of wine; and
(2) Where water is added to facilitate the solution or dispersal of a material, the volume of water added, whether the material is used singly or in combination with other water-based treating materials, may not total more than 1 percent of the volume of the treated wine or juice, or of both the wine and the juice, from which the wine is produced.
(b) *Use in combination or in multiple lots.* Subject to the conditions specified in [paragraph (a)](/current/title-27/section-24.246#p-24.246\(a\)) of this section, a proprietor may use the materials listed in this section in combination, provided that each material is used for its specified use and in accordance with any limitation specified for that use. If a proprietor uses several lots that contain the same material, it is the proprietor's responsibility to ensure that the cumulative amount of the material does not exceed the limitation specified in this section for that material.
(c) *Formula wine.* In addition to the materials listed in this section, other materials may be used in formula wine if approved for such use.
Table 1 to Paragraph (c)—Materials Authorized for Treatment of Wine and Juice
| Materials and use | Specific TTB limitation (if applicable) | FDA reference |
| -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Acacia (gum arabic): To clarify and stabilize 1 wine | The amount used must not exceed 16 pounds per 1,000 gallons (1.9 g/L) of wine | [21 CFR 184.1330](/current/title-21/section-184.1330). |
| Acetaldehyde: For color stabilization of juice prior to concentration | The amount used must not exceed 300 ppm (300 mg/L), and the finished concentrate must have no detectable level of the material.2 | FDA advisory opinion dated September 8, 2016. |
| Activated carbon: | | |
| To assist precipitation during fermentation | [27 CFR 24.176](/current/title-27/section-24.176) | FDA advisory opinion dated September 8, 2016, which states that the activated carbon must meet the specifications in the Food Chemicals Codex and be removed from the wine. |
| To clarify and purify wine | The amount used to clarify and purify wine must be included in the total amount of activated carbon used to remove excessive color from wine and/or juice. [27 CFR 24.241](/current/title-27/section-24.241) and [24.242](/current/title-27/section-24.242) | FDA advisory opinion dated January 26, 1979, which states that the activated carbon must meet the specifications in the Food Chemicals Codex and be removed from the wine. |
| To remove color from wine and/or juice from which wine is produced | The amount used to treat the wine, including the juice from which the wine was produced, must not exceed 25 pounds per 1000 gallons (3 g/L). If the amount necessary exceeds this limit, a notice is required pursuant to [27 CFR 24.242](/current/title-27/section-24.242) | FDA advisory opinion dated January 26, 1979, which states that the activated carbon must meet the specifications in the Food Chemicals Codex and be removed from the wine. |
| Albumen (egg white): Fining agent for wine | May be prepared in a light brine 1 ounce (28.35 grams) potassium chloride, 2 pounds (907.2 grams) egg white, 1 gallon (3.785 L) of water. Usage of brine not to exceed 1.5 gallons per 1,000 gallons (1.5 milliliters per liter) of wine | FDA advisory opinion dated September 8, 2016. |
| Alumino-silicates (hydrated) e.g., Bentonite (Wyoming clay) and Kaolin: To clarify and stabilize 1 wine or juice | None | [21 CFR 184.1155](/current/title-21/section-184.1155) FDA advisory opinion dated July 26, 1985. |
| Ascorbic acid *iso*-ascorbic acid (erythorbic acid): To prevent oxidation of color and flavor components of juice or wine | May be added to grapes, other fruit (including berries), and other primary wine making materials, or to the juice of such materials, or to the wine, within limitations which do not alter the class or type of the wine | [21 CFR 182.3013](/current/title-21/section-182.3013) and [182.3041](/current/title-21/section-182.3041). |
| Bakers yeast mannoprotein: To stabilize 1 wine from the precipitation of potassium bitartrate crystals | The amount used must not exceed 3.3 pounds per 1000 gallons (400 mg/L) of wine | GRAS (generally recognized as safe) Notice No. GRN 000284. |
| Calcium carbonate (CaCO3) (with or without calcium salts of tartaric and malic acids): | | |
| To reduce the excess natural acids in high acid wine, or in juice prior to or during fermentation | The natural or fixed acids must not be reduced below 40 pounds per 1000 gallons (4.79 g/L) | [21 CFR 184.1069](/current/title-21/section-184.1069), [184.1099](/current/title-21/section-184.1099), and [184.1191](/current/title-21/section-184.1191). |
| As a fining agent for cold stabilization | The amount used must not exceed 30 pounds per 1000 gallons (3.59 g/L) of wine. | |
| Calcium sulfate (gypsum): To lower pH in sherry wine | The sulfate content of the finished wine must not exceed 1.67 pounds per 1000 gallons (0.2 g/L), expressed as potassium sulfate. [27 CFR 24.214](/current/title-27/section-24.214) | [21 CFR 184.1230](/current/title-21/section-184.1230). |
| Carbon dioxide (including food grade dry ice): To stabilize 1 and preserve wine | See [27 CFR 24.245](/current/title-27/section-24.245) | [21 CFR 184.1240](/current/title-21/section-184.1240). |
| Casein, potassium salt of casein: To clarify wine | See [27 CFR 24.243](/current/title-27/section-24.243) | FDA advisory opinion dated September 8, 2016. |
| Chitosan from *Aspergillus niger:* To remove spoilage organisms such as *Brettanomyces* from wine | The amount used must not exceed 0.04 pounds per 1 gallon (500 g/100 L) of wine | GRAS Notice No. GRN 000397. |
| Citric acid: | | |
| To correct natural acid deficiencies in certain juice or wine | See [27 CFR 24.182](/current/title-27/section-24.182) and [24.192](/current/title-27/section-24.192) | [21 CFR 184.1033](/current/title-21/section-184.1033). |
| To stabilize 1 wine other than citrus wine | The amount of citric acid must not exceed 5.8 pounds per 1000 gallons (0.7 g/L). [27 CFR 24.244](/current/title-27/section-24.244) | [21 CFR 184.1033](/current/title-21/section-184.1033). |
| Copper sulfate: To remove hydrogen sulfide and/or mercaptans from wine | The quantity of copper sulfate (calculated as copper) added to wine must not exceed 6 ppm (6mg/L).2 The residual level of copper in the finished wine must not exceed 0.5 ppm (0.5 mg/L).2 | [21 CFR 184.1261](/current/title-21/section-184.1261). |
| Defoaming agents (polyoxyethylene 40 monostearate, silicon dioxide, dimethylpoly-siloxane, sorbitan monostearate, glyceryl mono-oleate and glyceryl dioleate): To control foaming, fermentation adjunct | Defoaming agents which are 100 percent active may be used in amounts not exceeding 0.15 pounds per 1000 gallons (18 mg/L) of wine. Defoaming agents which are 30 percent active may be used in amounts not exceeding 0.5 pounds per 1000 gallons (60 mg/L) of wine. Silicon dioxide must be completely removed by filtration. The amount of silicon remaining in the wine must not exceed 10 ppm (10 mg/L).2 | [21 CFR 173.340](/current/title-21/section-173.340) and [184.1505](/current/title-21/section-184.1505). |
| Dimethyl dicarbonate (DMDC): To sterilize and stabilize 1 wine | DMDC may be added to wine in a cumulative amount not to exceed 200 ppm (200 mg/L).2 | [21 CFR 172.133](/current/title-21/section-172.133). |
| Enzymatic activity: Various enzymes and uses, as shown in the following entries: | The enzyme preparation used must be prepared from nontoxic and nonpathogenic microorganisms. | |
| Carbohydrase (*alpha*-Amylase): To convert starches to fermentable carbohydrates | The amylase enzyme activity must be derived from: | |
| | *Aspergillus niger, Aspergillus oryzae, Bacillus subtilis,* or barley malt; or from *Rhizopus oryzae;* or from *Bacillus licheniformis.* | FDA advisory opinion of August 18, 1983. [21 CFR 173.130](/current/title-21/section-173.130). [21 CFR 184.1027](/current/title-21/section-184.1027). |
| Carbohydrase (*beta*-Amylase): To convert starches to fermentable carbohydrates | The amylase enzyme must be derived from barley malt | FDA advisory opinion dated August 18, 1983. |
| Carbohydrase (Glucoamylase, Amylogluco-sidase): To convert starches to fermentable carbohydrates | The amylase enzyme activity must be derived from *Aspergillus niger, Aspergillus oryzae,* or from *Rhizopus oryzae,* or from *Rhizopus niveus.* | FDA advisory opinion dated August 18, 1983. [21 CFR 173.130](/current/title-21/section-173.130). [21 CFR 173.110](/current/title-21/section-173.110). |
| Carbohydrase (pectinase, cellulase, hemicellulase): To facilitate separation of juice from the fruit | The enzyme activity must be derived from *Aspergillus aculeatus.* | FDA advisory opinion dated December 19, 1996. |
| Catalase: To clarify and stabilize 1 wine | The enzyme activity must be derived from *Aspergillus niger* or bovine liver | FDA advisory opinion dated August 18, 1983. [21 CFR 184.1034](/current/title-21/section-184.1034). |
| Cellulase: To clarify and stabilize 1 wine and facilitate separation of the juice from the fruit | The enzyme activity must be derived from *Aspergillus niger* | FDA advisory opinion dated August 18, 1983. |
| Cellulase (beta-glucanase): To clarify and filter wine and juice | The enzyme activity must be derived from *Trichoderma longibrachiatum* or *Trichoderma harzianum.* | For beta-glucanase derived from *Trichoderma longibrachiatum,* [21 CFR 184.1250](/current/title-21/section-184.1250). |
| | | For beta-glucanase derived from *Trichoderma harzianum,* GRAS Notice No. GRN 000149. |
| Glucose oxidase: To clarify and stabilize 1 wine | The enzyme activity must be derived from *Aspergillus niger* | FDA advisory opinion of August 18, 1983. |
| Lysozyme: To stabilize 1 wines from malolactic acid bacterial degradation | The amount used must not exceed 500 ppm (500 mg/L).2 | FDA advisory opinion dated December 15, 1993. |
| Pectinase: To clarify and stabilize 1 wine and to facilitate separation of juice from the fruit | The enzyme activity used must be derived from *Aspergillus niger* | FDA advisory opinion dated August 18, 1983. |
| Protease (general): To reduce or to remove heat labile proteins | The enzyme activity must be derived from: *Aspergillus niger* or *Bacillus subtilis;* or from *Bacillus licheniformis* | FDA advisory opinion dated August 18, 1983. [21 CFR 184.1027](/current/title-21/section-184.1027). |
| Protease (Bromelin): To reduce or remove heat labile proteins. | The enzyme activity must be derived from pineapple (*Ananas comosus* (L.) or *Ananas bracteatus* (L.)) | FDA advisory opinion dated August 18, 1983. |
| Protease (Ficin): To reduce or remove heat labile proteins | The enzyme activity must be derived from fig (*Ficus spp.*) | [21 CFR 184.1316](/current/title-21/section-184.1316). |
| Protease (Papain): To reduce or remove heat labile proteins | The enzyme activity must be derived from papaya (*Carica papaya* (L.)) | [21 CFR 184.1585](/current/title-21/section-184.1585). |
| Protease (Pepsin): To reduce or remove heat labile proteins | The enzyme activity must be derived from porcine or bovine stomachs | [21 CFR 184.1595](/current/title-21/section-184.1595), FDA advisory opinion dated August 18, 1983. |
| Protease (Trypsin): To reduce or remove heat labile proteins | The enzyme activity must be derived from porcine or bovine pancreas | FDA advisory opinion dated August 18, 1983. |
| Urease: To reduce levels of naturally occurring urea in wine to help prevent the formation of ethyl carbamate | The enzyme activity must be derived from *Lactobacillus fermentum.* Use is limited to not more than 200 ppm (200 mg/L) and must be filtered prior to final packaging. 2 | [21 CFR 184.1924](/current/title-21/section-184.1924). |
| Ethyl maltol: To stabilize 1 wine | Use authorized at a maximum level of 100 ppm (100 mg/L) in all standard wines except natural wine produced from *Vitis vinifera* grapes. 2 | FDA advisory opinion dated December 1, 1986. |
| Fermentation aids: To facilitate fermentation of juice and wine. | | |
| Ammonium phosphate/diammonium phosphate (*mono-* and *di* basic) | The amount used must not exceed 8 pounds per 1000 gallons (0.96 g/L) | FDA advisory opinion dated August 29, 2016. |
| Biotin (vitamin B7) | The amount used must not exceed 25 ppb (25 ng/mL).3 | FDA advisory opinion dated August 29, 2016. |
| Calcium pantothenate (vitamin B5) | The amount used must not exceed 1.5 ppm (1.5 mg/L).2 | FDA advisory opinion dated August 29, 2016. |
| Folic acid (folate) | The amount used must not exceed 100 ppb (100 ng/mL).3 | FDA advisory opinion dated August 29, 2016. |
| Inositol (myo-inositol) | The amount used must not exceed 2 ppm (2 mg/L).2 | FDA advisory opinion dated August 29, 2016. |
| Magnesium sulfate | The amount used must not exceed 15 ppm (15 mg/L).2 | FDA advisory opinion dated August 29, 2016. |
| Niacin (vitamin B3) | The amount used must not exceed 1 ppm (1 mg/L).2 | FDA advisory opinion dated August 29, 2016. |
| Pyridoxine hydrochloride (vitamin B6) | The amount used must not exceed 150 ppb (150 ng/mL).3 | FDA advisory opinion dated August 29, 2016. |
| Soy flour (defatted) | The amount used must not exceed 2 pounds per 1000 gallons (0.24 g/L) of wine | FDA advisory opinion dated August 29, 2016. |
| Thiamine hydrochloride | The amount used must not exceed 0.005 pounds per 1000 gallons (0.6 mg/L) of wine or juice | FDA advisory opinion dated August 29, 2016. |
| Yeast, autolyzed | None | FDA advisory opinion dated August 29, 2016. |
| Yeast, cell wall/membranes of autolyzed yeast | The amount used must not exceed 3 pounds per 1000 gallons (0.36 g/L) of wine or juice | FDA advisory opinion dated August 29, 2016. |
| Ferrous sulfate: To clarify and stabilize 1 wine | The amount used must not exceed 3 ounces per 1000 gallons (0.022 g/L) of wine | [21 CFR 184.1315](/current/title-21/section-184.1315). |
| Fractionated potato protein isolates: Fining agent for wine | Use must not exceed 500 ppm 2 (50 g/hL) of wine | GRAS Notice No. GRN 000447. |
| Fumaric acid: | | |
| To correct natural acid deficiencies in grape wine | The fumaric acid content of the finished wine must not exceed 25 pounds per 1000 gallons (3 g/L). [27 CFR 24.182](/current/title-27/section-24.182) and [24.192](/current/title-27/section-24.192) | [21 CFR 172.350](/current/title-21/section-172.350). |
| To stabilize 1 wine | The fumaric acid content of the finished wine must not exceed 25 pounds per 1000 gallons (3 g/L). [27 CFR 24.244](/current/title-27/section-24.244) | [21 CFR 172.350](/current/title-21/section-172.350). |
| Gelatin (food grade): To clarify juice or wine | None | FDA advisory opinion dated September 8, 2016. |
| Granular cork: To smooth wine | The amount used must not exceed 10 pounds per 1000 gallons of wine (1.2 g/L) | FDA advisory opinion dated February 25, 1985. |
| Isinglass: To clarify wine | None | FDA advisory opinion dated February 25, 1985. |
| Lactic acid: To correct natural acid deficiencies in grape wine | [27 CFR 24.182](/current/title-27/section-24.182) and [24.192](/current/title-27/section-24.192) | [21 CFR 184.1061](/current/title-21/section-184.1061). |
| Malic acid: To correct natural acid deficiencies in juice or wine | [27 CFR 24.182](/current/title-27/section-24.182) and [24.192](/current/title-27/section-24.192) | [21 CFR 184.1069](/current/title-21/section-184.1069). |
| Malolactic bacteria: To stabilize 1 grape wine | Malolactic bacteria of the type *Leuconostoc oenos* (*Oenococcus oeni)* may be used in treating wine | FDA advisory opinion dated February 25, 1985. |
| Maltol: To stabilize 1 wine | Use authorized at a maximum level of 2 pounds per 1000 gallons (240 mg/L) in all standard wine except natural wine produced from *Vitis vinifera* grapes | FDA advisory opinion dated December 1, 1986. |
| Milk products (pasteurized whole, skim, or half-and-half): | | |
| Fining agent for grape wine | The amount used must not exceed 2 parts of milk products per 1,000 parts (0.2 percent V/V) of wine | |
| To remove off flavors in wine | The amount used must not exceed 10 parts of milk products per 1,000 parts (1 percent V/V) of wine | |
| Nitrogen gas: To maintain pressure during filtering and bottling or canning of wine and to prevent oxidation of wine | None | [21 CFR 184.1540](/current/title-21/section-184.1540). |
| Oxygen and compressed air: Various uses in juice and wine | None | |
| Polyvinylpolypyrrolidone (PVPP): To clarify and stabilize 1 wine and to remove color from red wine or juice | The amount used to treat the wine, including the juice from which the wine was produced, must not exceed 60 pounds per 1000 gallons (7.19 g/L) and must be removed during filtration. PVPP may be used in a continuous or batch process | [21 CFR 173.50](/current/title-21/section-173.50). |
| Polyvinylpyrrolidone (PVP)/polyvinylimidazole (PVI) polymer (terpolymer of 1-vinylimidazole, 1-vinylpyrrolidone, and 1,2-divinylimidazolidinone; CAS 87865-40-5 (Chemical Abstracts Service Registration Number)): To remove heavy metal ions and sulfides from wine | The amount used to treat the wine must not exceed 6.7 pounds per 1000 gallons (80 g/hL) of wine | FDA FCN No. 000320.4 |
| Potassium bitartrate: To stabilize 1 grape wine | The amount used must not exceed 35 pounds per 1000 gallons (4.19 g/L) of grape wine | FDA advisory opinion dated September 8, 2016. |
| Potassium carbonate and/or potassium bicarbonate: To reduce excess natural acidity in wine and in juice prior to or during fermentation | The natural or fixed acids must not be reduced below 0.668 ounces per gallon (5 g/L) | [21 CFR 184.1619](/current/title-21/section-184.1619) and [184.1613](/current/title-21/section-184.1613). |
| Potassium citrate: pH control agent and sequestrant in the treatment of citrus wines | The amount of potassium citrate must not exceed 25 pounds per 1000 gallons (3 g/L) of finished wine. [27 CFR 24.182](/current/title-27/section-24.182) | [21 CFR 184.1625](/current/title-21/section-184.1625). |
| Potassium meta-bisulfite: To sterilize and preserve wine | The sulfur dioxide content of the finished wine must not exceed the limitations prescribed in [27 CFR 4.22](/current/title-27/section-4.22) | [21 CFR 182.3637](/current/title-21/section-182.3637). |
| Silica gel (colloidal silicon dioxide): To clarify wine or juice | Use must not exceed the equivalent of 20 pounds colloidal silicon dioxide at a 30 percent concentration per 1000 gallons (2.4 g/L) of wine. Silicon dioxide must be completely removed by filtration | FDA advisory opinion dated September 8, 2016. |
| Sodium carboxymethyl cellulose: To stabilize 1 wine by preventing tartrate precipitation | | [21 CFR 182.1745](/current/title-21/section-182.1745). |
| Sorbic acid and potassium salt of sorbic acid (potassium sorbate): To sterilize and preserve wine; to inhibit mold growth and secondary fermentation | The finished wine must not contain more than 300 ppm (300 mg/L) of sorbic acid.2 | [21 CFR 182.3089](/current/title-21/section-182.3089) and [182.3640](/current/title-21/section-182.3640). |
| Sulfur dioxide: To sterilize and to preserve wine or juice | The sulfur dioxide content of the finished wine must not exceed the limitations prescribed in [27 CFR 4.22(b)(1)](/current/title-27/section-4.22#p-4.22\(b\)\(1\)) | [21 CFR 182.3862](/current/title-21/section-182.3862). |
| Tannin: | | |
| To adjust tannin content in apple juice or in apple wine | The residual amount of tannin must not exceed 24 pounds per 1000 gallons (3 g/L), calculated as gallic acid equivalents (GAE). Total tannin must not be increased by more than 150 ppm (150 mg/L; 0.150 g/L) by the addition of tannic acid (polygalloylglucose).2 | FDA advisory opinion dated September 8, 2016. |
| To clarify, or adjust tannin content of, juice or wine (other than apple) | The residual amount of tannin, calculated in GAE, must not exceed 6.4 GAE per 1000 gallons of wine (800 mg/L) in white wine and 24 pounds per 1000 gallons (3 g/L) in red wine. Only tannin which does not impart color may be used in the cellar treatment of juice or wine. Total tannin must not be increased by more than 150 ppm (150 mg/L; 0.150 g/L) by the addition of tannic acid (poly-galloylglucose).2 | FDA advisory opinion dated September 8, 2016. |
| Tartaric acid (L-(+)-tartaric acid): | | |
| To correct natural acid deficiencies in grape juice or wine and to reduce the pH of grape juice or wine where ameliorating material is used in the production of grape wine | Use as prescribed in [27 CFR 24.182](/current/title-27/section-24.182) and [24.192](/current/title-27/section-24.192) | [21 CFR 184.1099](/current/title-21/section-184.1099) and GRAS Notice No. GRN 000187. |
| | | |
| --- | --- | --- |
| 1 To stabilize—To prevent or to retard unwanted alteration of chemical and/or physical properties. | | |
| 2 Parts per million—1 ppm = 0.128 ounces per 1000 gallons = 1 mg/L = 1000 ppb. | | |
| 3 Parts per billion—1ppb = 0.000128 ounces per 1000 gallons = 1 mg/1000L. | | |
| 4 An effective food contact notification (FCN) applies only to the food contact substance that is the subject of the FCN and is applicable only to the manufacturer/supplier listed within the notification. | | |
\[T.D. TTB-185, [87 FR 51897](https://www.federalregister.gov/citation/87-FR-51897), Aug. 24, 2022]
#### § 24.247 Materials authorized for the treatment of distilling material.
The materials listed in this section as well as the materials listed in [§ 24.246](/current/title-27/section-24.246) are approved as being acceptable in good commercial practice for use by proprietors in the treatment of distilling material within the limitations specified in this section. If, however, the U.S. Food and Drug Administration (FDA) informs TTB that a specified use or limitation of any material listed in this section is inconsistent with the food additive requirements under the Federal Food, Drug, and Cosmetic Act, the appropriate TTB officer may cancel or amend the approval for use of the material in the treatment of distilling material.
| Materials | Use | Reference or limitation |
| ----------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Ammonium phosphate/diammonium phosphate (\*mono-\*and *di* basic) | Yeast nutrient in distilling material | The amount used shall not exceed 10 pounds per 1000 gallons (1.2 g/L). [21 CFR 184.1141a](/current/title-21/section-184.1141a) and [184.1141b](/current/title-21/section-184.1141b). |
| Benzoic acid, potassium and sodium salts of benzoic acid | To prevent fermentation of the sugar in wine being accumulated as distilling material | The amount used shall not exceed 0.1% (w/v) as benzoic acid. GRAS per FDA advisory opinions dated 9/22/82 and 9/8/83. [21 CFR 184.1021](/current/title-21/section-184.1021) and [184.1733](/current/title-21/section-184.1733) (GRAS). |
| Enzyme activity | | The enzyme preparation used shall be prepared from nontoxic and nonpathogenic microorganisms in accordance with good manufacturing practice and be approved for use in food by either FDA regulation or by FDA advisory opinion. |
| Carbohydrase (Glucoamylase, Amylogluco-sidase) | To convent starches to fermentable carbohydrates | The amylase enzyme activity shall be derived from *Aspergillus niger* or *Aspergillus oryzae* per FDA advisory opinion dated 8/18/83 or from *Rhizopus oryzae* per *[21 CFR 173.130](/current/title-21/section-173.130)* or from *Rhizopus niveus* per *[21 CFR 173.110](/current/title-21/section-173.110).* |
| Carbohydrase (*beta-* Amylase) | To convent starches to fermentable carbohydrates | The amylase enzyme activity shall be derived from barley malt per FDA advisory opinion dated 8/18/83. |
| Carbohydrase (Glucoamylase, Amylogluco-sidase) | To convent starches to fermentable carbohydrates | The amylase enzyme actvity shall be derived from *Aspergillus niger* or *Aspergillus oryzae* per FDA advisory opinion dated 8/18/83 or from *Rhizopus oryzae* per [21 CFR 173.130](/current/title-21/section-173.130) or from *Rhizopus niveus* per [21 CFR 173.110](/current/title-21/section-173.110). |
| Copper sulfate | To eliminate hydrogen sulfide and mercaptans | The finished brandy or wine spirits produced from distilling material to which copper sulfate has been added shall not contain more than 2 parts per million (2 mg/L) residual copper. GRAS per FDA advisory opinion of 7/23/69. |
| Hydrogen peroxide | To reduce the bisulfite aldehyde complex in distilling material | The amount used shall not exceed 200 parts per million. [21 CFR 184.1366](/current/title-21/section-184.1366) (GRAS). |
| Potassium permanganate | Oxidizing agent | The finished brandy or wine spirits produced from distilling material to which potassium permanganate has been added must be free of chemical residue resulting from such treatment. (GRAS) |
| Sodium hydroxide | Acid neutralizing agent | The finished brandy or wine spirits produced from distilling material to which sodium hydroxide has been added must be free of chemical residue resulting from such treatment. [21 CFR 184.1763](/current/title-21/section-184.1763) (GRAS). |
| Sulfuric acid | To effect favorable yeast development in distilling material; to prevent fermentation of the sugar in wine being accumulated as distilling material; to lower pH to 2.5 in order to prevent putrefaction and/or ethyl acetate development | [27 CFR 24.216](/current/title-27/section-24.216) (GRAS), [21 CFR 184.1095](/current/title-21/section-184.1095) (GRAS). |
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999; T.D. TTB-185, [87 FR 51902](https://www.federalregister.gov/citation/87-FR-51902), Aug. 24, 2022; T.D. TTB-196, [89 FR 87942](https://www.federalregister.gov/citation/89-FR-87942), Nov. 6, 2024
]
#### § 24.248 Processes authorized for the treatment of wine, juice, and distilling material.
The processes listed in this section are approved as being consistent with good commercial practice for use by proprietors in the production, cellar treatment, or finishing of wine, juice, and distilling material, within the general limitations of this section. If, however, the U.S. Food and Drug Administration (FDA) informs TTB that a specified use or limitation of any material listed in this section is inconsistent with the food additive requirements under the Federal Food, Drug, and Cosmetic Act, the appropriate TTB officer may cancel or amend the approval for use of the process in the production, cellar treatment, or finishing of wine, juice, and distilling material.
Processes Authorized for the Treatment of Wine, Juice, and Distilling Material
| Processes | Use | Reference or limitation |
| -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| Cross flow filtration | Various processes and uses.1 | |
| Nanofiltration 2 | To reduce the level of volatile acidity in wine (used with ion exchange), to reduce the ethyl alcohol content of wine. | Permeable membranes that are selective for molecules not greater than 500 molecular weight with transmembrane pressures of 200 pounds per square inch (psi) and greater. The addition of water other than that originally present prior to processing will render standard wine “other than standard.” Use must not alter the vinous character of the wine. May be used in combination with osmotic transport. |
| Reverse osmosis 2 | To reduce the ethyl alcohol content of wine and to remove off flavors in wine. | This process must use permeable membranes which are selective for molecules not greater than 150 molecular weight with transmembrane pressures of 250 psi or less. |
| Ultrafiltration 2 | To remove proteinaceous material from wine; to reduce harsh tannic material from white wine produced from white skinned grapes; to remove pink color from blanc de noir wine; to separate red and white juice and wine into low color and high color fractions for blending purposes, to reduce the ethyl alcohol content of wine. | Permeable membranes that are selective for molecules greater than 500 and less than 25,000 molecular weight with transmembrane pressures less than 200 psi. Shall not alter vinous character. |
| Electrodialysis | To aid in the removal of tartrates | This process must not alter the vinous character of the wine. |
| Elimination of sulfur dioxide by physical process | To reduce the sulfur dioxide content of juice | Use of a physical process to remove sulfur dioxide from juice must not alter the basic character of the juice so treated |
| Ion exchange | Various applications in the treatment of juice or wine: | Anion, cation, and non-ionic resins, except those anionic resins in the mineral acid state, may be used in batch or continuous column processes as total or partial treatment of wine, provided that with regard to juice or finished wine; |
| | | 1. Such treatment does not alter the fruit character of the juice or wine. |
| | | 2. The treatment does not reduce the color of the juice or wine to less than that normally contained in such juice or wine. |
| | | 3. Treatment does not increase inorganic anions in the juice or wine by more than 10 mg/L. |
| | | 4. The treatment does not reduce the metallic cation concentration in the juice or wine to less than 300 mg/L. |
| | | 5. The treatment does not reduce natural or fixed acid in grape wine below 4 g/L for red table wines, 3 g/L for white table wines, 2.5 g/L for all other grape wines, 4 g/L for wine other than grape wine. |
| | | 6. Treatment does not reduce the pH of the juice or wine to less than pH 2.8 nor increase the pH to more than pH 4.5. |
| | | 7. The resins used have not imparted to the juice or wine any material or characteristic (incidental to the resin treatment) which may be prohibited under any other section of the regulations in this part. The winemaker may employ conditioning and/or regenerating agents consisting of water, fruit acids common to the wine or juice being treated, and inorganic acids, salts and/or bases provided the conditioned or regenerated resin is rinsed with water until the resin and container are essentially free from unreacted (excess) conditioning or regenerating agents prior to the introduction of the juice or wine. [21 CFR 173.25](/current/title-21/section-173.25). |
| Metal reducing matrix sheet processing | To reduce the level of metals such as copper and iron in wine | (1) The active ingredient, polyvinylimidazol, must not constitute more than 40% by weight of the sheet. (2) Use of the sheet must not significantly alter the color of the wine. |
| Osmotic transport 2 | For alcohol reduction. | (1) Use must not alter the vinous character of the wine. (2) None of the stripping solution may migrate into the wine. (3) May be used in combination with reverse osmosis. |
| Spinning cone column 2 | To reduce the ethyl alcohol content of wine and to remove off flavors in wine. | Use shall not alter vinous character. For standard wine, the same amount of essence must be added back to any lot of wine as was originally removed. |
| Sulfide reducing matrix sheet processing | To reduce the level of sulfides in wine | (1) The active ingredient, polyvinylimidazol, must not constitute more than 40% by weight of the sheet. (2) Use of the sheet must not significantly alter the color of the wine. |
| Thermal gradient processing | To separate wine into low alcohol and high alcohol wine fractions | The fractions derived from such processing shall retain vinous character. Such treatment shall not increase the alcohol content of the high alcohol fraction to more than 24 percent by volume. The addition of water other than that originally present in the wine prior to processing will render standard wine “other than standard.” |
| | To separate juice into low Brix and high Brix juice fractions | The low Brix fraction derived from such processing may be used in wine production. The high Brix fraction derived from such processing shall not be diluted with water for use in wine production. |
| Thin film evaporation under reduced pressure 2 | To separate wine into a low alcohol wine fraction and into a higher alcohol distillate. | Use shall not alter vinous character. Water separated with alcohol during processing may be recovered by refluxing in a closed continuous system and returned to the wine. The addition of water other than that originally present in the wine prior to processing, will render standard wine “other than standard” wine. |
| | | |
| --- | --- | --- |
| 1 In cross-flow filtration, the wine is passed across the filter membrane (tangentially) at positive pressure relative to the permeate side. A proportion of the wine which is smaller than the membrane pore size passes through the membrane as permeate or filtrate; everything else is retained on the feed side of the membrane as retentate. | | |
| 2 When used to remove ethyl alcohol (dealcoholization), this process must be done on distilled spirits plant premises. However, reverse osmosis and nanofiltration, under certain limited conditions, may be used on bonded winery premises if ethyl alcohol is only temporarily created within a closed system. | | |
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31081](https://www.federalregister.gov/citation/56-FR-31081), July 9, 1991; T.D. ATF-350, [58 FR 52232](https://www.federalregister.gov/citation/58-FR-52232), Oct. 7, 1993; T.D. ATF-371, [61 FR 21079](https://www.federalregister.gov/citation/61-FR-21079), May 9, 1996; T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999; T.D. TTB-17, [69 FR 67644](https://www.federalregister.gov/citation/69-FR-67644), Nov. 19, 2004; T.D. TTB-185, [87 FR 51902](https://www.federalregister.gov/citation/87-FR-51902), Aug. 24, 2022]
#### § 24.249 Experimentation with new treating material or process.
(a) *General.* The proprietor may, under the provisions of this section, conduct on bonded wine premises such experimentation with a treating material or process as the appropriate TTB officer finds may be conducted in a manner that will not jeopardize the revenue, conflict with wine operations, or be contrary to law.
(b) *Application.* The proprietor who wants to conduct experimentation must file an application with the appropriate TTB officer setting forth in detail the experimentation to be conducted and the facilities and equipment to be used. The proposed experimentation must not be conducted until the appropriate TTB officer has determined that the conduct of such experimentation must not jeopardize the revenue, conflict with wine operations, or be contrary to law, and has approved the application.
(c) *Segregation of operations.* Experimentation authorized under this section will be conducted with the degree of segregation from wine operations as may be required by the appropriate TTB officer under the provisions of [§ 24.27](/current/title-27/section-24.27).
(d) *Records.* The proprietor shall, with respect to each experiment authorized by this section, keep records of the kind and quantity of materials received and used and the volume of wine treated and the manner by which disposed.
(e) *Disposition of the wine.* The disposition of the wine subjected to experimental treatment will conform to the conditions stated in the authorization to conduct the experimentation.
(Sec. 201, Pub. L. 85-859 (72 Stat. 1383, as amended ([26 U.S.C. 5361](https://www.govinfo.gov/link/uscode/26/5361), [5382](https://www.govinfo.gov/link/uscode/26/5382)))
(Approved by the Office of Management and Budget under control numbers 1512-0292 and 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), [13685](https://www.federalregister.gov/citation/64-FR-13685), Mar. 22, 1999]
#### § 24.250 Application for use of new treating material or process.
(a) *General.* If the proprietor desires to use a material or process which is not specifically authorized in [§§ 24.246](/current/title-27/section-24.246), [24.247](/current/title-27/section-24.247), [24.248](/current/title-27/section-24.248), or elsewhere in this part, an application shall be filed with the appropriate TTB officer to show that the proposed material or process is a cellar treatment consistent with good commercial practice.
(b) *Data required.* The application will include the following:
(1) The name and description of the material or process;
(2) The purpose, the manner, and the extent to which the material or process is to be used together with any technical bulletin or other pertinent information relative to the material or process;
(3) A sample, if a proposed material;
(4) Documentary evidence from the U.S. Food and Drug Administration that the material is consistent with the food additive requirements under the Federal Food, Drug, and Cosmetic Act for its intended purpose in the amounts proposed for the particular treatment contemplated;
(5) The test results of any laboratory-scale pilot study conducted by the winemaker in testing the material and an evaluation of the product and of the treatment including the results of tests of the shelf life of the treated wine;
(6) A tabulation of pertinent information derived from the testing program conducted by the chemical manufacturer demonstrating the function of the material or process;
(7) A list of all chemicals used in compounding the treating material and the quantity of each component;
(8) The recommended maximum and minimum amounts, if any, of the material proposed to be used in the treatment and a statement as to the volume of water required, if any, to facilitate the addition of the material or operation of the process; and
(9) Two 750-milliliter samples representative of the wine before and after treatment. Information of a confidential or proprietary nature to the manufacturer or supplier of the treating material or process may be forwarded by the manufacturer or supplier to the appropriate TTB officer with a reference to the application filed by the winemaker. Information contained within the winemaker's application can be disclosed to the public, subject to the limitations of [26 U.S.C. 6103](https://www.govinfo.gov/link/uscode/26/6103) and [7213](https://www.govinfo.gov/link/uscode/26/7213).
(c) *Use of cellar treatment.* The proprietor may not use the proposed treating material or process until a determination has been made by the appropriate TTB officer that the intended use of the material or process is acceptable in good commercial practice.
(d) *Processing of application.* After evaluation of the data submitted with the application, the appropriate TTB officer will make a decision regarding the acceptability of the proposed treatment in good commercial practice. The appropriate TTB officer will notify the proprietor of the approval or disapproval of the application.
(Approved by the Office of Management and Budget under control numbers 1513-0057 and 1513-0115)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), [13685](https://www.federalregister.gov/citation/64-FR-13685), Mar. 22, 1999; T.D. TTB-185, [87 FR 51903](https://www.federalregister.gov/citation/87-FR-51903), Aug. 24, 2022; T.D. TTB-196, [89 FR 87942](https://www.federalregister.gov/citation/89-FR-87942), Nov. 6, 2024]
#### § 24.251 Tolerance for artificially carbonated hard cider and sparkling hard cider.
(a) *Tolerance.* A tolerance of not more than 0.009 gram per 100 milliliters to the maximum limitation of carbon dioxide in artificially carbonated hard cider and sparkling hard cider will be allowed where the amount of carbon dioxide in excess of 0.64 gram per 100 milliliters is due to mechanical variations or secondary fermentation variations that cannot be completely controlled under good commercial practice. A tolerance will not be allowed where it is found by the appropriate TTB officer that the proprietor continuously or intentionally exceeds 0.64 gram of carbon dioxide per 100 milliliters of artificially carbonated hard cider or sparkling hard cider or where the variation results from the use of methods or equipment determined by the appropriate TTB officer to be not in accordance with good commercial practice. (See [Subpart P of this part](/current/title-27/part-24/subpart-P) for the definition of hard cider for purposes of determining eligibility for the hard cider tax rate.)
(b) *Records.* See [§ 24.302 of this chapter](/current/title-27/section-24.302) for recordkeeping requirements.
(Sec. 335, [Pub. L. 114-113](https://www.govinfo.gov/link/plaw/114/public/113), 129 Stat. 3109, as amended ([26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041))
\[T.D. TTB-147, [82 FR 7663](https://www.federalregister.gov/citation/82-FR-7663), Jan. 23, 2017]
#### § 24.252 Salvaging accidentally diluted wine.
(a) *Removal of accidentally added water without prior TTB approval.* If a proprietor accidentally adds to standard wine water in excess of limitations specified in [subpart F of this part](/current/title-27/part-24/subpart-F) and this subpart, the accidentally diluted wine may be returned to its original condition through:
(1) The use of reverse osmosis and distillation without prior application to TTB provided that:
(i) The accidentally added water represents no more than 10 percent of the original volume of the wine;
(ii) The wine is returned to its original condition by removing an amount of water equal to the amount that was accidentally added to the wine;
(iii) The vinous character of the wine is not altered;
(iv) The proprietor transfers the wine in bond to a distilled spirits plant for treatment; and
(v) Records are maintained in accordance with [paragraph (c)](/current/title-27/section-24.252#p-24.252\(c\)) of this section; or
(2) By adding juice concentrate under the conditions outlined in [§ 24.180](/current/title-27/section-24.180) without prior application to TTB provided that:
(i) The accidentally added water represents no more than 10 percent of the original volume of the wine;
(ii) The solids content of the finished wine do not exceed 21 percent by weight;
(iii) The proprietor complies with any State or local rules regarding the addition of juice concentrate; and
(iv) Records are maintained in accordance with [paragraph (c)](/current/title-27/section-24.252#p-24.252\(c\)) of this section.
(b) *Removal of accidentally added water with TTB approval.* If a proprietor accidentally adds water to standard wine and the accidentally added water represents more than 10 percent of the original volume of the wine, then the proprietor must request permission from TTB prior to treating the wine. A proprietor may submit an application requesting permission to treat the wine to remove the water and return the wine to its original condition. The removal of water may not be conducted until the appropriate TTB officer has approved the request. The application which is to be submitted to the appropriate TTB officer, must be in writing, must provide evidence of the exact amount of water accidentally added to the wine and an explanation of how the water was accidentally added, and must specify the method the proprietor will use to remove the water from the wine. In approving any request under this section, the appropriate TTB officer may require the proprietor to take steps to prevent future accidental additions of water to wine. In evaluating any request under this section, the appropriate TTB officer may consider as a factor whether the proprietor has demonstrated good commercial practices, taking into account the proprietor's prior history of accidental addition of water to wine and of compliance with other regulations in this part.
(c) *Records.* The proprietor must, with respect to removals of water from wine and addition of concentrate authorized under this section, maintain records that document the accidental addition of water, the use of any treatment or process to remove the water from the wine, and the fact that only the amount of water that was accidentally added to the wine was removed as a result of the treatment or process or that only an amount of concentrate sufficient to make up for the amount of water accidentally added is used.
\[T.D. TTB-185, [87 FR 51903](https://www.federalregister.gov/citation/87-FR-51903), Aug. 24, 2022]
### Bottling, Packing, and Labeling of Wine
#### § 24.255 Bottling or packing wine.
(a) *General.* Proprietors of a bonded wine premises and a taxpaid wine bottling house premises shall be held strictly responsible for the correct determination of the quantity and alcohol content of wine removed as well as for the correct determination of carbon dioxide in artificially carbonated hard cider and in sparkling hard cider. As required by [§ 24.170](/current/title-27/section-24.170), appropriate and accurate measures and instruments for measuring and testing the wine will be provided at each wine premises.
(b) *Bottle or other container fill.*
(1) Proprietors of bonded wine premises and taxpaid wine bottling house premises must fill bottles or other containers as nearly as possible to conform to the amount shown on the label or blown in the bottle or marked on any container other than a bottle. However, in no event may the amount of wine contained in any individual bottle, due to lack of bottle uniformity, vary from the amount stated more than plus or minus:
(i) 1.0 percent for 15.0 liters and above;
(ii) 1.5 percent for 14.9 liters to 1.0 liter;
(iii) 2.0 percent for 750 mL to 550 mL;
(iv) 2.5 percent for 500 mL to 473 mL;
(v) 3.0 percent for 375 mL to 300 mL;
(vi) 4 percent for 250 mL and 200 mL;
(vii) 4.5 percent for 187 mL to 100 mL; and
(viii) 9.0 percent for 50 mL.
(2) In such case, there will be substantially as many bottles overfilled as there are bottles underfilled for each lot of wine bottled. Short-filled bottles or other containers of wine which are sold or otherwise disposed of by the proprietor to employees for personal consumption need not be labeled, but, if labeled, need not show an accurate statement of net contents.
(c) *Tax tolerance.* The net contents of bottles or other containers of untaxpaid wine in the same tax class filled during six consecutive tax return periods, as determined from the bonded wine premises proprietor's fill test records, shall not vary by more than 0.5 percent from the net contents as stated on the bottles or other containers. The bonded wine premises proprietor is liable for the tax on the entire amount of wine in the same tax class when that wine is removed from bond, without benefit of tolerance, when the fill of bottles or other containers exceeds a 0.5 percent average of a period which consists of six consecutive tax returns, or when filling is not conducted in compliance with good commercial practice.
(d) *Fill tests.* The proprietor shall test at representative intervals wine bottled or packed during the bottling or packing operation of each bottling or packing line to determine if the wine contained in the bottle or other container is in agreement with that stated on the label, bottle, or other container.
(e) *Alcohol tests.* The proprietor shall test the alcohol content by volume to determine the tax class of the wine and to ensure the alcohol content to be stated on the label is in agreement with the requirement of [§ 24.257](/current/title-27/section-24.257).
(Approved by the Office of Management and Budget under control numbers 1513-0115 and 1513-0092)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. TTB-147, [82 FR 7664](https://www.federalregister.gov/citation/82-FR-7664), Jan. 23, 2017; T.D. TTB-200, [90 FR 1876](https://www.federalregister.gov/citation/90-FR-1876), Jan. 10, 2025]
#### § 24.256 Bottle aging wine.
Wine bottled or packed and stored for the purpose of aging need not have labels affixed until the wine is removed for consumption or sale. However, the bins, pallets, stacks, cases or containers of unlabeled wine will be marked in some manner to show the kind (class and type) and alcohol content of the wine. If the unlabeled wine is stored at a location other than the bottling or packing winery, the registry number of the bottling or packing winery will also be shown.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended, 1407, as amended ([26 U.S.C. 5368](https://www.govinfo.gov/link/uscode/26/5368), [5662](https://www.govinfo.gov/link/uscode/26/5662)))
(Approved by the Office of Management and Budget under control number 1512-0503)
#### § 24.257 Labeling wine containers.
(a) The proprietor must label each bottle or other container of beverage wine prior to removal for consumption or sale. The minimum type size for information required by this section is: 2 millimeters for containers of more than 187 milliliters and 1 millimeter for containers of 187 milliliters or less. The maximum type size for alcohol content statements is 3 millimeters unless the container is larger than 5 liters. The label must be securely affixed and show:
(1) The name and address of the wine premises where bottled or packed;
(2) The brand name, if different from above;
(3) The alcohol content as percent by volume or the alcohol content stated in accordance with [27 CFR part 4](/current/title-27/part-4). For wine with less than 7 percent alcohol by volume stated on the label there is allowed an alcohol content tolerance of plus or minus .75 percent by volume; and
(4) An appropriate designation of the kind of wine, as follows:
(i) *Wines that require label approval* —
(A) *General.* If the wine contains 7 percent or more alcohol by volume and must have label approval under [27 CFR part 4](/current/title-27/part-4), the designation is the class, type, or other designation required by that part.
(B) *Labeling rules for wines eligible for the “hard cider” tax class* —
(*1*) *Transitional rule for “hard cider” removed on or after January 1, 2017 and prior to January 1, 2019.* On an optional basis, wines that are taxed at the “hard cider” tax rate may include the statement “Tax class 5041(b)(6)” on the label to adequately indicate the appropriate tax class.
(*2*) *Additional labeling rules effective for “hard cider” removed from wine premises on or after January 1, 2019.* For wines removed from wine premises on or after January 1, 2019 that are taxed at the “hard cider” tax rate, the label must also include the statement “Tax class 5041(b)(6).” This statement may appear anywhere on the label.
(ii) *Wines that do not require label approval* —
(A) *Adequate designation.* If the wine is not subject to label approval under [27 CFR part 4](/current/title-27/part-4) because it either is covered by a certificate of exemption from label approval or contains less than 7 percent alcohol by volume, its label must bear a designation that includes enough information (when viewed with the alcohol content statement) to identify the tax class under [26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041). The wine must be identified by the term “wine” (or a word that signifies a type of wine, such as “cider,” “perry,” or “mead,” as applicable). If the wine contains more than 0.392 gram of carbon dioxide per 100 milliliters, the word “sparkling” or “carbonated,” as applicable, must be included in the designation.
(*1*) *Additional labeling rules effective for wines eligible for the “hard cider” tax class.* For wines removed from wine premises on or after January 1, 2017, that are taxed at the “hard cider” tax rate, the designation must be consistent with a hard cider tax class. For example, the designations “hard cider,” “hard perry,” “apple wine,” “pear wine,” “apple cider,” “apple perry,” “apple pear wine,” “cider” and “perry” are consistent with the hard cider tax class. The designation “blueberry cider” is not consistent with the hard cider tax class, because it indicates that the product contains either blueberries or blueberry flavors, which are not authorized for use in wine that is eligible for the hard cider tax class. If the hard cider contains more than 0.392 gram of carbon dioxide per 100 milliliters, the word “sparkling” or “carbonated,” as applicable, must be on the label.
(*2*) *Transitional rule for wines removed on or after January 1, 2017 and prior to January 1, 2019.* For wines removed on or after January 1, 2017 and prior to January 1, 2019, a label will not be deemed out of compliance with [§ 24.257(a)(4)(ii)(A)](/current/title-27/section-24.257#p-24.257\(a\)\(4\)\(ii\)\(A\)) on the sole ground that the label does not provide enough information to identify whether the wine is eligible for a “hard cider” tax classification. On an optional basis, wines eligible for the “hard cider” tax class may include the statement “Tax class 5041(b)(6)” on the label to adequately indicate the appropriate tax class.
(*3*) *Additional labeling rules effective for “hard cider” removed from wine premises on or after January 1, 2019.* For wines removed from wine premises on or after January 1, 2019, that are taxed at the “hard cider” tax rate, the label must also include the statement “Tax class 5041(b)(6).” This statement may appear anywhere on the label.
(B) *Cross reference.* For additional labeling rules applicable to wines containing less than 7 percent alcohol by volume, see the food labeling regulations issued by the U.S. Food and Drug Administration.
(5) The net content of the container unless the net content is permanently marked on the container as provided in [27 CFR part 4](/current/title-27/part-4).
(6) *Cross reference.* For regulations requiring a health warning statement on the container of any alcoholic beverage containing not less than one-half of one percent alcohol by volume, see [part 16 of this chapter](/current/title-27/part-16).
(b) The information shown on any label applied to bottled or packed wine is subject to the recordkeeping requirements of [§ 24.314](/current/title-27/section-24.314). (Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended, 1407, as amended ([26 U.S.C. 5368](https://www.govinfo.gov/link/uscode/26/5368), [5388](https://www.govinfo.gov/link/uscode/26/5388), [5662](https://www.govinfo.gov/link/uscode/26/5662)))
(c) *Use of semi-generic designations* —
(1) *In general.* Semi-generic designations may be used to designate wines of an origin other than that indicated by such name only if—
(i) There appears in direct conjunction therewith an appropriate appellation of origin, as defined in [part 4 of this chapter](/current/title-27/part-4), disclosing the true place of origin of the wine, and
(ii) The wine so designated conforms to the standard of identity, if any, for such wine contained in [part 4 of this chapter](/current/title-27/part-4) or, if there is no such standard, to the trade understanding of such class or type.
(2) *Determination of whether a name is semi-generic* —
(i) *In general.* Except as provided in [paragraph (c)(2)(ii)](/current/title-27/section-24.257#p-24.257\(c\)\(2\)\(ii\)) of this section, a name of geographic significance, which is also the designation of a class or type of wine, shall be deemed to have become semi-generic only if so found by the Administrator.
(ii) *Certain names treated as semi-generic.* The following names shall be treated as semi-generic: Angelica, Burgundy, Claret, Chablis, Champagne, Chianti, Malaga, Marsala, Madeira, Moselle, Port, Rhine Wine or Hock, Sauterne, Haut Sauterne, Sherry, Tokay.
(See: [26 U.S.C. 5368](https://www.govinfo.gov/link/uscode/26/5368), [5388](https://www.govinfo.gov/link/uscode/26/5388), [5662](https://www.govinfo.gov/link/uscode/26/5662))
(Approved by the Office of Management and Budget under control numbers 1513-0092 and 1513-0138)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31082](https://www.federalregister.gov/citation/56-FR-31082), July 9, 1991; T.D. ATF-350, [58 FR 52232](https://www.federalregister.gov/citation/58-FR-52232), Oct. 7, 1993; T.D. ATF-398, [63 FR 44783](https://www.federalregister.gov/citation/63-FR-44783), Aug. 21, 1998; T.D. ATF-470, [66 FR 58944](https://www.federalregister.gov/citation/66-FR-58944), Nov. 26, 2001; T.D. TTB-147, [82 FR 7664](https://www.federalregister.gov/citation/82-FR-7664), Jan. 23, 2017; [82 FR 57353](https://www.federalregister.gov/citation/82-FR-57353), Dec. 5, 2017]
#### § 24.258 Certificates of approval or exemption.
The proprietor shall obtain a certificate of label approval or a certificate of exemption from label approval as required by [27 CFR part 4](/current/title-27/part-4).
(August 29, 1935, ch. 814, Sec. 5, 49 Stat. 981, as amended ([27 U.S.C. 205](https://www.govinfo.gov/link/uscode/27/205)))
#### § 24.259 Marks.
(a) *Required marks.* Each container larger than four liters or each case used to remove wine for consumption or sale will be durably marked to show the following information:
(1) The serial number or filling date as provided in [§ 24.260](/current/title-27/section-24.260);
(2) The name (or trade name) and the registry number of the bottlers wine premises;
(3) The kind (class and type) and the alcohol content of the wine. The kind of wine and alcohol content will be stated in accordance with [§ 24.257](/current/title-27/section-24.257). The formula number will be marked on bulk containers of special natural wine or other wine produced under [§ 24.218](/current/title-27/section-24.218);
(4) The net contents of each container larger than four liters or each case in wine gallons, or for containers larger than four liters or cases filled according to metric measure, the contents in liters. If wine is removed in cases, the cases may be marked to show the number and size of bottles or other containers in each case in lieu of the net contents of the case; and
(5) Except for cases, the date of removal or shipment.
(b) *Application of marks.* Required marks may be cut, printed, or otherwise legibly and durably marked upon the container larger than four liters or the case or placed on a label or tag securely affixed to the case or container larger than four liters.
(c) *Location of marks.* Required marks will be placed on a container larger than four liters or on the side of a case for ready examination by appropriate TTB officers.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended, 1387, as amended, 1407, as amended ([26 U.S.C. 5368](https://www.govinfo.gov/link/uscode/26/5368), [5388](https://www.govinfo.gov/link/uscode/26/5388), [5662](https://www.govinfo.gov/link/uscode/26/5662)))
(Approved by the Office of Management and Budget under control number 1512-0503)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31082](https://www.federalregister.gov/citation/56-FR-31082), July 9, 1991; T.D. ATF-409, [64 FR 13684](https://www.federalregister.gov/citation/64-FR-13684), Mar. 22, 1999]
#### § 24.260 Serial numbers or filling date.
Each container larger than four liters or each case used for removing wine for consumption or sale will be marked with a serial number or filling date at the time of filling or when such containers or cases are prepared for removal. Serial numbers will commence with “1” and continue until the numeral “1,000,000” is reached, whereupon the series may recommence with the numeral “1.” However, the proprietor may initiate a new series after the numeral “1,000,000” has been reached provided no numeral will be used more than once during a 12-month period. If desired, a separate series of numbers with letter prefixes may be used for containers larger than four liters and for cases, or for cases filled on different bottling lines, or for removals from different loading docks. The proprietor may mark containers larger than four liters or the cases with the filling date in lieu of using a serial number or use both a serial number and the filling date. However, if the proprietor desires to change from the use of a serial number to use of a filling date, or *vice versa,* a notice will be sent to the appropriate TTB officer before making the change. Where United States or foreign wine is recased, the cases will be marked with the date of recasing, preceded by the letter “R”, in lieu of serial number or filling date.
(72 Stat. 1381; [26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367), [5368](https://www.govinfo.gov/link/uscode/26/5368))
(Approved by the Office of Management and Budget under control number 1512-0503)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31082](https://www.federalregister.gov/citation/56-FR-31082), July 9, 1991; T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
## Subpart M—Losses of Wine
#### § 24.265 Losses by theft.
The proprietor shall be liable for and pay the tax on wine unlawfully removed while on bonded wine premises, or while in transit thereto or therefrom in bond, unless the proprietor or other person responsible for the tax, establishes to the satisfaction of the appropriate TTB officer that the theft did not occur as the result of connivance, collusion, fraud or negligence on the part of the proprietor or other person responsible for the tax or the owner, consignor, consignee, bailee, or carrier, or their agents or employees.
(Sec. 201, Pub. L. 85-859, 72 Stat, 1381, as amended ([26 U.S.C. 5370](https://www.govinfo.gov/link/uscode/26/5370)))
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999; T.D. ATF-432, [65 FR 69253](https://www.federalregister.gov/citation/65-FR-69253), Nov. 16, 2000]
#### § 24.266 Inventory losses.
(a) *General.* The proprietor shall take a physical inventory of all untaxpaid wine on-hand on bonded wine premises as of the close of business each tax year, or where a cycle different from the tax year has been established as provided in [§ 24.313](/current/title-27/section-24.313), the inventory will be taken annually at the end of that cycle, or at any time required by an appropriate TTB officer. The physical inventory of bulk and bottled or packed wine will be recorded and reported as required by [§ 24.313](/current/title-27/section-24.313).
(b) *Bulk wine losses.* The physical inventory of bulk wine will determine losses due to spillage, leakage, soakage, evaporation, and other losses normally occurring from racking and filtering since the previous physical inventory required by this section. A claim for allowance of loss, under the provisions of [§ 24.65](/current/title-27/section-24.65), is required for inventory losses in production or storage:
(1) Where there are circumstances indicating that all or a part of the wine reported lost was unlawfully removed, or
(2)
(i)
(A) Where the loss of wine on bonded wine premises during the annual period exceeds three percent of the aggregate volume of wine on-hand at the beginning of the annual period and the volume of wine received in bond during the annual period;
(B) The loss exceeds six percent of the still wine or still hard cider produced by fermentation;
(C) The loss exceeds six percent of the sparkling wine or sparkling hard cider produced by fermentation in bottles;
(D) The loss exceeds three percent of the special natural wine produced under [§ 24.195](/current/title-27/section-24.195) or other wine produced under [§ 24.218](/current/title-27/section-24.218);
(E) The loss exceeds three percent of the artificially carbonated wine or artificially carbonated hard cider produced; or
(F) The loss exceeds three percent of the bulk process sparkling wine or bulk process sparkling hard cider produced.
(ii) The percentage applicable to each tax class of wine will be calculated separately, unless the calculation is impracticable because of the mixture of different tax classes by addition of wine spirits or blending during the annual period, in which case the percentage will be calculated on the aggregate volume. Wine removed immediately after production for use as distilling material and on which the usual racking, clarifying, and filtering losses are not sustained, will not be included in the calculations.
(c) *Bottle and other container wine losses.* Wine filled into a bottle or other similar containers are not subject to losses due to spillage, leakage, soakage, evaporation, and other losses normally occurring from racking and filtering. In addition, wine that has been filled into a bottle or other similar containers can be accurately accounted for and any unexplained shortage is considered evidence of an unreported removal. Therefore, the proprietor shall pay the tax on any unexplained loss of untaxpaid bottled or packed wine disclosed by inventory or otherwise.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367), [5369](https://www.govinfo.gov/link/uscode/26/5369), [5370](https://www.govinfo.gov/link/uscode/26/5370)))
(Approved by the Office of Management and Budget under control number 1513-0088)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31082](https://www.federalregister.gov/citation/56-FR-31082), July 9, 1991; T.D. TTB-147, [82 FR 7664](https://www.federalregister.gov/citation/82-FR-7664), Jan. 23, 2017]
#### § 24.267 Losses in transit.
Where the loss in transit of bulk wine shipped in bond or the total daily bulk wine in bond shipments received in bond from the same winery exceeds one percent (two percent on transcontinental shipments) of the volume shipped, the proprietor of the receiving bonded wine premises shall immediately notify the appropriate TTB officer and file a claim under the provisions of [§ 24.65](/current/title-27/section-24.65).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5370](https://www.govinfo.gov/link/uscode/26/5370)))
(Approved by the Office of Management and Budget under control number 1512-0492)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13685](https://www.federalregister.gov/citation/64-FR-13685), Mar. 22, 1999]
#### § 24.268 Losses by fire or other casualty.
The proprietor must immediately report any loss by theft, fire or other casualty, or any other extraordinary or unusual loss to the appropriate TTB officer. If required by the appropriate TTB officer, the proprietor must file a claim under the provisions of [§ 24.65](/current/title-27/section-24.65). The volume of wine loss must be reported on TTB F 5120.17 for the reporting period during which the loss occurred.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5370](https://www.govinfo.gov/link/uscode/26/5370)))
(Approved by the Office of Management and Budget under control number 1512-0492)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-338, [58 FR 19064](https://www.federalregister.gov/citation/58-FR-19064), Apr. 12, 1993; T.D. ATF-409, [64 FR 13685](https://www.federalregister.gov/citation/64-FR-13685), Mar. 22, 1999]
## Subpart N—Removal, Return and Receipt of Wine
### Taxpaid Removals
#### § 24.270 Determination of tax.
(a) *General.* The tax on wine is determined at the time of removal from a bonded wine premises for consumption or sale. Section 5041 of 26 U.S.C., imposes an excise tax, at the rates prescribed, on all wine (including imitation, substandard, or artificial wine, and compounds sold as wine, which contain 24 percent or less of alcohol by volume) produced in or imported into the United States. Wine containing more than 24 percent of alcohol by volume is classified as distilled spirits and taxed accordingly. A wine product containing less than one-half of one percent alcohol by volume is not taxable as wine when removed from the bonded wine premises.
(b) *Tax determined and paid on the volume of wine.* The tax is determined and paid on the volume of wine:
(1) In bottles or other containers filled according to United States measure recorded to the nearest 10th gallon; or,
(2) In bottles or other containers filled according to metric measure, on the volume of wine in United States wine gallons to the nearest 10th gallon; or
(3) In the case of pipeline removals, on the volume of bulk wine removed recorded to the nearest whole gallon, five-tenths gallon being converted to the next full gallon.
(c) *Tax rates imposed on wine.* The following taxes are imposed on wine:
(1) *Tax class 5041(b)(1).* On still wines containing not more than 16 percent alcohol by volume, \$1.07 per wine gallon;
(2) *Tax class 5041(b)(2).* On still wines containing more than 16 percent and not exceeding 21 percent alcohol by volume, \$1.57 per wine gallon;
(3) *Tax class 5041(b)(3).* On still wines containing more than 21 percent and not exceeding 24 percent alcohol by volume, \$3.15 per wine gallon;
(4) *Tax class 5041(b)(4).* On champagne and other sparkling wines, \$3.40 per wine gallon;
(5) *Tax class 5041(b)(5).* On artificially carbonated wines, \$3.30 per wine gallon; and
(6) *Tax class 5041(b)(6).* On hard cider, 22.6 cents per wine gallon. See [§ 24.331](/current/title-27/section-24.331) for the definition of hard cider for purposes of determining eligibility for the hard cider tax class.
(d) *Small domestic producer tax credit.* For eligibility for the small producer tax credit, see [§§ 24.278](/current/title-27/section-24.278) and [24.279](/current/title-27/section-24.279).
\[T.D. TTB-147, [82 FR 7664](https://www.federalregister.gov/citation/82-FR-7664), Jan. 23, 2017, as amended by T.D. TTB-196, [89 FR 87942](https://www.federalregister.gov/citation/89-FR-87942), Nov. 6, 2024]
#### § 24.271 Deferred payment return periods—annual, quarterly, and semimonthly.
(a) *General.* This section governs payment of tax on a deferred basis. The tax on wine is paid by an Excise Tax Return, TTB F 5000.24, which is filled with a remittance (check, cash, or money order) of the full amount of tax due. Prepayments of tax on wine during the period covered by the return are shown separately on the Excise Tax Return form. If no tax is due for the return period, the filing of a return is not required.
(b) *Return periods and due dates* —
(1) *Return periods.*
(i) *Semimonthly return period.* Except in the case of a taxpayer who qualifies for, and chooses to use, an annual or quarterly return period as provided in [paragraph (b)(1)(ii)](/current/title-27/section-24.271#p-24.271\(b\)\(1\)\(ii\)) or [(b)(1)(iii)](/current/title-27/section-24.271#p-24.271\(b\)\(1\)\(iii\)) of this section, all taxpayers who defer payment of taxes must use semimonthly return periods. The semimonthly return periods run from the 1st day through the 15th day of each month, and from the 16th day through the last day of each month, except as otherwise provided in [paragraph (c)](/current/title-27/section-24.271#p-24.271\(c\)) of this section.
(ii) *Annual return period.* Subject to [paragraph (b)(1)(iv)](/current/title-27/section-24.271#p-24.271\(b\)\(1\)\(iv\)) of this section, a taxpayer may choose to use an annual return period if the taxpayer was not liable for more than $1,000 in taxes with respect to wine imposed by [26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041) and [7652](https://www.govinfo.gov/link/uscode/26/7652) in the preceding calendar year and if that taxpayer reasonably expects to be liable for not more than $1,000 in such taxes during the current calendar year. Except as provided in paragraph (b)(2), the last day for paying the tax and filing the return will be the 14th day after the last day of the calendar year. However, the taxpayer may not use the annual return period procedure for any portion of the calendar year following the first date on which the aggregate amount of tax due from the taxpayer during the calendar year exceeds \$1,000, and any tax that has not been paid on that date will be due on the 14th day after the last day of the quarterly or semimonthly period in which that date occurs.
(iii) *Quarterly return period.* Except as provided in [paragraph (b)(1)(ii)](/current/title-27/section-24.271#p-24.271\(b\)\(1\)\(ii\)) of this section and subject to [paragraph (b)(1)(iv)](/current/title-27/section-24.271#p-24.271\(b\)\(1\)\(iv\)) of this section, a taxpayer may choose to use a quarterly return period if the taxpayer was not liable for more than $50,000 in taxes with respect to wine imposed by [26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041) and [7652](https://www.govinfo.gov/link/uscode/26/7652) in the preceding calendar year and if that taxpayer reasonably expects to be liable for not more than $50,000 in such taxes during the current calendar year. In such a case the last day for paying the tax and filing the return will be the 14th day after the last day of the calendar quarter. However, the taxpayer may not use the quarterly return period procedure for any portion of the calendar year following the first date on which the aggregate amount of tax due from the taxpayer during the calendar year exceeds \$50,000, and any tax that has not been paid on that date will be due on the 14th day after the last day of the semimonthly period in which that date occurs.
(iv) *Additional rules for annual and quarterly return periods.* The following additional rules apply to the annual and quarterly return period procedures under this section:
(A) A “taxpayer” is an individual, corporation, partnership, or other entity that is assigned a single Employer Identification Number as defined in [26 CFR 301.7701-12](/current/title-26/section-301.7701-12);
(B) “Reasonably expects” means that there is no existing or anticipated circumstance known to the taxpayer (such as an increase in production capacity) that would cause the taxpayer's tax liability to exceed the prescribed limit;
(C) A taxpayer with multiple locations must combine the wine tax liability for all locations to determine eligibility for the return procedures;
(D) A taxpayer who has both domestic operations and import transactions must combine the wine tax liability on the domestic operations and the imports to determine eligibility for the return procedures;
(E) The controlled group rules of [26 U.S.C. 5061(e)](https://www.govinfo.gov/link/uscode/26/5061), which concern treatment of controlled groups as one taxpayer, do not apply for purposes of determining eligibility for the return procedures. However, a taxpayer who is eligible for the return procedures, and who is a member of a controlled group that owes \$5 million or more in wine excise taxes per year, is required to pay taxes by electronic fund transfer (EFT). Payments via EFT must be transmitted in accordance with section 5061(e);
(F) A new taxpayer is eligible to use the return procedures the first year of business simply if the taxpayer reasonably expects to be liable for not more than $1,000 (in the case of the annual return procedure) or $50,000 (in the case of the quarterly return procedure) in wine taxes during that calendar year; and
(G) If a taxpayer becomes ineligible to use a return procedure described in [paragraph (b)(1)(ii)](/current/title-27/section-24.271#p-24.271\(b\)\(1\)\(ii\)) or [(iii)](/current/title-27/section-24.271#p-24.271\(b\)\(1\)\(iii\)) of this section because the taxpayer's liability exceeds $1,000 or $50,000, respectively, in tax liability during a taxable year, that taxpayer may resume using that return procedure only after a full calendar year has passed during which the taxpayer's liability did not exceed $1,000 or $50,000 as the case may be. A taxpayer may not use an annual or quarterly return procedure during any calendar year in which the taxpayer reasonably expects to be liable for more than $1,000, in the case of the annual return procedure, or $50,000, in the case of the quarterly return procedure, in wine taxes.
(2) *Semimonthly, quarterly, and annual tax return due dates.*
(i) *General.* Except as provided in paragraph (b)(2)(ii), the taxpayer must file the semimonthly, quarterly, or annual return, with remittance, for each return period not later than the 14th day after the last day of the return period. If the due date falls on a Saturday, Sunday, or legal holiday, the return and remittance are due on the immediately preceding day that is not a Saturday, Sunday, or legal holiday, except as otherwise provided in [paragraph (c)(3)](/current/title-27/section-24.271#p-24.271\(c\)\(3\)) of this section.
(ii) *Due dates for 2016 annual returns.* In the case of a taxpayer filing an annual return covering the 2016 calendar year, the taxpayer must file the return, with remittance, not later than January 30, 2017.
(c) *Special September rule for taxes due by semimonthly return.*
(1) *Division of second semimonthly period.*
(i) *General.* Except as otherwise provided in [paragraph (c)(1)(ii)](/current/title-27/section-24.271#p-24.271\(c\)\(1\)\(ii\)) of this section, the second semimonthly period for the month of September is divided into two payment periods, from the 16th day through the 26th day, and from the 27th day through the 30th day. The proprietor shall file a return on TTB F 5000.24, and make remittance, for the period September 16-26, no later than September 29. The proprietor shall file a return on TTB F 5000.24, and make remittance, for the period September 27-30, no later than October 14.
(ii) *Taxpayment not by electronic fund transfer.* In the case of taxes for which remittance by electronic fund transfer (EFT) is not required by [§ 24.272](/current/title-27/section-24.272), the second semimonthly period of September is divided into two payment periods, from the 16th day through the 25th day, and from the 26th day through the 30th day. The proprietor shall file a return on TTB F 5000.24, and make remittance, for the period September 16-25, no later than September 28. The proprietor shall file a return on TTB F 5000.24, and make remittance, for the period September 26-30, no later than October 14.
(2) *Amount of payment—Safe harbor rule.*
(i) *General.* Taxpayers are considered to have met the requirements of [paragraph (c)(1)(i)](/current/title-27/section-24.271#p-24.271\(c\)\(1\)\(i\)) of this section if the amount paid no later than September 29 is not less than 11/15ths (73.3 percent) of the tax liability incurred for the semimonthly period beginning on September 1 and ending on September 15, and if any underpayment of tax is paid by October 14.
(ii) *Taxpayment not by EFT.* Taxpayers are considered to have met the requirements of [paragraph (c)(1)(ii)](/current/title-27/section-24.271#p-24.271\(c\)\(1\)\(ii\)) of this section if the amount paid no later than September 28 is not less than 2/3rds (66.7 percent) of the tax liability incurred for the semimonthly period beginning on September 1 and ending on September 15, and if any underpayment of tax is paid by October 14.
(3) *Weekends and holidays.* If the required taxpayment due date for the period September 16-25 or September 16-26, as applicable, falls on a Saturday or legal holiday, the return and remittance are due on the immediately preceding day. If the required due date falls on a Sunday, the return and remittance are due on the immediately following day.
(4) *Example: Payment of tax for the month of September.*
(i) *Facts.* X, a proprietor required to pay taxes by electronic fund transfer, incurred tax liability in the amount of $30,000 for the first semimonthly period of September. For the period September 16-26, X incurred tax liability in the amount of $45,000, and for the period September 27-30, X incurred tax liability in the amount of \$2,000.
(ii) *Payment requirement.* X's payment of tax in the amount of $30,000 for the first semimonthly period of September is due no later than September 29 ([§ 24.271(b)](/current/title-27/section-24.271#p-24.271(b))). X's payment of tax for the period September 16-26 is also due no later than September 29 ([§ 24.271(c)(1)(i)](/current/title-27/section-24.271#p-24.271(c)(1)(i))). X may use the safe harbor rule to determine the amount of payment due for the period of September 16-26 ([§ 24.271(c)(2)](/current/title-27/section-24.271#p-24.271(c)(2))). Under the safe harbor rule, X's payment of tax must not be less than $21,990.00, that is, 11/15ths of the tax liability incurred during the first semimonthly period of September. Additionally, X must pay the tax in the amount of $2,000 for the period September 27-30 no later than October 14 ([§ 24.271(c)(1)(i)](/current/title-27/section-24.271#p-24.271(c)(1)(i))). X must also pay the underpayment of tax, $23,010.00, for the period September 16-26, no later than October 14 ([§ 24.271(c)(2)](/current/title-27/section-24.271#p-24.271\(c\)\(2\))).
\[T.D. TTB-89, [76 FR 3509](https://www.federalregister.gov/citation/76-FR-3509), Jan. 20, 2011, as amended by T.D. TTB-94, Aug. 24, 2011; T.D. TTB-146, [82 FR 1125](https://www.federalregister.gov/citation/82-FR-1125), Jan. 4, 2017]
#### § 24.272 Payment of tax by electronic fund transfer.
(a) *General.*
(1) During a calendar year any proprietor who is liable for a gross amount of wine excise tax equal to or exceeding \$5 million combining tax liabilities incurred under this [part and parts 26](/current/title-27/part-26) and [27 of this chapter](/current/title-27/part-27), shall during the succeeding calendar year use a financial institution in making payment by electronic fund transfer (EFT) of wine taxes for that year. A proprietor who is required by this section to make remittance by EFT may not effect payment of wine taxes by cash, check, or money order as described in [§ 24.271](/current/title-27/section-24.271).
(2) For the purposes of this section, the dollar amount of tax liability is defined as the gross tax liability on all taxable withdrawals and importations (including wines brought into the United States from Puerto Rico or the Virgin Islands) during the calendar year, without regard to any drawback, credit, or refund, for all premises from which the activities are conducted by the proprietor.
(3) For the purposes of this section, a proprietor includes a controlled group of corporations, as defined in [26 U.S.C. 5061](https://www.govinfo.gov/link/uscode/26/5061) (e)(3). Also, the rules for a “controlled group of corporations” apply in a similar fashion to groups which include partnerships and/or sole proprietorships. If one entity maintains more than 50 percent control over a group consisting of corporations and one, or more, partnerships and/or sole proprietorships, all of the members of the controlled group are one taxpayer for the purpose of determining who is required to make remittances by EFT.
(4) A proprietor who is required by this section to make remittances by EFT shall, for each bonded wine premises from which wine is withdrawn upon determination of tax, make a separate EFT remittance and file a separate tax return.
(b) *Requirements.*
(1) On or before January 10 of each calendar year, except for a proprietor already remitting the tax by EFT, each proprietor who was liable during the previous calendar year for a gross amount of wine excise tax equal to or exceeding \$5 million, combining tax liabilities incurred under this [part and parts 26](/current/title-27/part-26) and [27 of this chapter](/current/title-27/part-27), shall give written notice to the appropriate TTB officer agreeing to make remittances by EFT.
(2) For each return filed in accordance with this subpart, the proprietor shall direct the proprietor's financial institution to make an electronic fund transfer in the amount of the taxpayment to the Treasury Account as provided in [paragraph (e)](/current/title-27/section-24.272#p-24.272\(e\)) of this section. The request will be made to the financial institution early enough for the transfer of funds to be made to the Treasury Account by no later than the close of business on the last day for filing the return as prescribed in [§ 24.271](/current/title-27/section-24.271). The request will take into account any time limit established by the financial institution.
(3) If the proprietor was liable during the preceding calendar year for less than $5 million in wine excise taxes, combining tax liabilities incurred under this [part and parts 26](/current/title-27/part-26) and [27 of this chapter](/current/title-27/part-27), the proprietor may choose either to continue remitting the tax as provided in this section or to remit the tax with return as prescribed by [§ 24.271](/current/title-27/section-24.271). Upon filing the first return on which the proprietor chooses to discontinue remittance of the tax by EFT and to begin remittance of the tax with the tax return, the proprietor shall notify the appropriate TTB officer by attaching a written notification to the tax form stating that no wine excise tax is due by EFT because the tax liability during the preceding calendar year was less than $5 million, and that the remittance will be filed with the tax return.
(c) *Remittance.*
(1) The proprietor shall show on the tax return information about remitting the tax for that return by EFT and shall file the return with TTB in accordance with the instructions on the tax form.
(2) Remittances will be considered as made when the taxpayment by electronic fund transfer is received by the Treasury Account. For purposes of this section, a taxpayment by electronic fund transfer will be considered as received by the Treasury Account when it is paid to a Federal Reserve Bank.
(3) When the proprietor directs the financial institution to effect an electronic fund transfer message as required by [paragraph (b) (2)](/current/title-27/section-24.272#p-24.272\(b\)\(2\)) of this section, the transfer data record furnished to the proprietor through normal banking procedures will serve as the record of payment, and will be retained as part of the required records.
(d) *Failure to make a taxpayment by EFT.* The proprietor is subject to a penalty imposed by [26 U.S.C. 5684](https://www.govinfo.gov/link/uscode/26/5684), [6651](https://www.govinfo.gov/link/uscode/26/6651), and [6656](https://www.govinfo.gov/link/uscode/26/6656), as applicable, for failure to make a taxpayment by EFT on or before the close of business on the prescribed last day for filing.
(e) *Procedure.* Upon the notification required under [paragraph (b)(1)](/current/title-27/section-24.272#p-24.272\(b\)\(1\)) of this section, the appropriate TTB officer will issue to the proprietor a TTB Procedure entitled, Payment of Tax by Electronic Fund Transfer. This publication outlines the procedure a proprietor follows when preparing returns and EFT remittances in accordance with this subpart. U.S. Customs and Border Protection (CBP) will provide the proprietor with instructions for preparing EFT remittances for payments to be made to CBP for payment of excise tax on imported wine.
(Approved by the Office of Management and Budget under control numbers 1513-0083 and 1513-0088)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), [13685](https://www.federalregister.gov/citation/64-FR-13685), Mar. 22, 1999; T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), July 25, 2001; T.D. ATF-479, [67 FR 30798](https://www.federalregister.gov/citation/67-FR-30798), May 8, 2002; T.D. TTB-91, [76 FR 5478](https://www.federalregister.gov/citation/76-FR-5478), Feb. 1, 2011; T.D. TTB-196, [89 FR 87942](https://www.federalregister.gov/citation/89-FR-87942), Nov. 6, 2024]
#### § 24.273 \[Reserved]
#### § 24.274 Failure to timely pay tax or file a return.
Penalties for failure to pay tax at the time required, for willful refusal to pay the tax and for fraudulent nonpayment of tax are provided for in [26 U.S.C. 5661](https://www.govinfo.gov/link/uscode/26/5661) and [6656](https://www.govinfo.gov/link/uscode/26/6656). In addition to these penalties, there is a penalty for the delinquent filing of a tax return, imposed as an addition to the tax shown on the return, amounting to five percent for each month or fraction thereof of the delinquency, not exceeding 25 percent in the aggregate, unless it is shown that the delinquency is due to reasonable cause and not to willful neglect.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1407, as amended, 1410, as amended ([26 U.S.C. 5661](https://www.govinfo.gov/link/uscode/26/5661), [5684](https://www.govinfo.gov/link/uscode/26/5684), [6651](https://www.govinfo.gov/link/uscode/26/6651), [6656](https://www.govinfo.gov/link/uscode/26/6656)))
#### § 24.275 Prepayment of tax.
(a) *General* —
(1) *Circumstances where prepayment required.* The proprietor must, before removal of wine for consumption or sale, file Excise Tax Return, TTB F 5000.24, with remittance, where:
(i) The proprietor is required to prepay tax under [§ 24.276](/current/title-27/section-24.276); or
(ii) The proprietor is required to obtain a tax deferral bond, the bond is not in the maximum penal sum, and the tax determined and unpaid at any one time exceeds the coverage of the wine bond.
(2) *Forwarding the return with remittance.* The proprietor must forward the return with remittance pursuant to the instructions printed on the return. For the purpose of complying with this section, the term “forwarding” means the deposit in the United States mail properly addressed to TTB.
(b) *Electronic fund transfer.* When the proprietor is required by [§ 24.272](/current/title-27/section-24.272) to deliver payment of tax by electronic fund transfer, the proprietor shall prepay the tax before any wine can be removed for consumption or sale by:
(1) Completing the Excise Tax Return and by mailing it, as instructed on the form, to TTB and
(2) Directing the proprietor's financial institution to effect an electronic fund transfer.
(August 16, 1954, ch. 736, 68A Stat. 775, as amended, 777, as amended, 391, as amended ([26 U.S.C. 6301](https://www.govinfo.gov/link/uscode/26/6301), [6311](https://www.govinfo.gov/link/uscode/26/6311), [6302](https://www.govinfo.gov/link/uscode/26/6302)))
(Approved by the Office of Management and Budget under control numbers 1512-0467 and 1512-0492)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-338, [58 FR 19064](https://www.federalregister.gov/citation/58-FR-19064), Apr. 12, 1993; T.D. TTB-146, [82 FR 1126](https://www.federalregister.gov/citation/82-FR-1126), Jan. 4, 2017]
#### § 24.276 Prepayment of tax; proprietor in default.
When the proprietor fails to forward a payment for wine excise tax due by presentment of a check or money order, or when the proprietor is otherwise in default of payment of the tax, no wine may be removed for consumption or sale until the tax has been paid for the period of the default and until the appropriate TTB officer finds the revenue will not be jeopardized by the late payment of the tax. Any remittance made during the period of the default will be in cash, or will be in the form of a certified, cashier's, or treasurer's check drawn on any financial institution incorporated under the laws of the United States, or under the laws of any State, Territory, or possession of the United States, or in the form of a money order, as provided in [27 CFR 70.61](/current/title-27/section-70.61) (payment by check or money order) or in the form of an electronic fund transfer.
(August 16, 1954, ch. 736, 68A Stat. 775, as amended, 777, as amended, 391 as amended ([26 U.S.C. 6301](https://www.govinfo.gov/link/uscode/26/6301), [6311](https://www.govinfo.gov/link/uscode/26/6311), [6302](https://www.govinfo.gov/link/uscode/26/6302)))
(Approved by the Office of Management and Budget under control numbers 1512-0467 and 1512-0492)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-301, [55 FR 47605](https://www.federalregister.gov/citation/55-FR-47605), Nov. 14, 1990; T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
#### § 24.277 Date of mailing or delivering of returns.
(a) When the proprietor sends the Excise Tax Return, TTB F 5000.24, with or without remittance, by United States mail, the official postmark of the United States Postal Service stamped on the cover of the envelope in which the return was mailed is considered the date of delivery of the tax return and, if accompanied, the date of delivery of the remittance. When the postmark on the cover is illegible, it is the proprietor's responsibility to prove when the postmark was made.
(b) When the proprietor sends the tax return by registered mail or by certified mail, the date of registry or the date of the postmark on the sender's receipt of certified mail, as the case may be, is treated at the date of delivery of the tax return and, if accompanied, the date of delivery of the remittance.
(August 16, 1954, ch. 736, 68A Stat. 775, as amended, 777, as amended, 391, as amended ([26 U.S.C. 6301](https://www.govinfo.gov/link/uscode/26/6301), [6311](https://www.govinfo.gov/link/uscode/26/6311), [6302](https://www.govinfo.gov/link/uscode/26/6302)))
(Approved by the Office of Management and Budget under control numbers 1512-0467 and 1512-0492)
#### § 24.278 Tax credit for certain small domestic producers.
(a) *General.* A person who produces not more than 250,000 gallons of wine during the calendar year may take a credit against any tax imposed by Title 26 of the United States Code (other than Chapters 2, 21, and 22), in an amount computed in accordance with [paragraph (d)](/current/title-27/section-24.278#p-24.278\(d\)) of this section, on the first 100,000 gallons of wine (other than champagne and other sparkling wine) removed during that year for consumption or sale. This credit applies only to wine that has been produced at a qualified bonded wine premises in the United States. The small domestic wine producer tax credit is available only to eligible proprietors engaged in the business of producing wine. A proprietor who has a basic permit to produce wine but does not produce wine during a calendar year may not take the small producer wine tax credit on wine removed during that calendar year. A proprietor who has obtained a new wine producer basic permit may not take the small producer wine tax credit on wine removed until the proprietor has produced wine. “Production” of wine includes those activities described in [paragraph (e)(1)](/current/title-27/section-24.278#p-24.278\(e\)\(1\)) of this section.
(b) *Special rules relating to eligibility for wine credit* —
(1) *Controlled groups.* For purposes of this section and [§ 24.279](/current/title-27/section-24.279), the term “person” includes a controlled group of corporations, as defined in [26 U.S.C. 1563(a)](https://www.govinfo.gov/link/uscode/26/1563), except that the phrase “more than 50 percent” must be substituted for the phrase “at least 80 percent” wherever it appears. Also, the rules for a “controlled group of corporations” apply in a similar fashion to groups that include partnerships and/or sole proprietorships. Production and removals of all members of a controlled group are treated as if they were the production and removals of a single taxpayer for the purpose of determining what credit a person may use.
(2) *Credit for transferees in bond.* A person other than the eligible small producer (hereafter in this paragraph referred to as the “transferee”) may take the credit under [paragraph (a)](/current/title-27/section-24.278#p-24.278\(a\)) of this section that would be allowed to that producer if the wine removed by the transferee had been removed by the producer on that date, under the following conditions:
(i) Wine produced by any person would be eligible for any credit under this section if removed by that person during the calendar year;
(ii) Wine produced by that person is removed during that calendar year by the transferee to whom that wine was transferred in bond and who is liable for the tax imposed by [26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041) with respect to that wine;
(iii) That producer holds title to that wine at the time of its removal and provides to the transferee such information as is necessary to properly determine the transferee's credit under this paragraph; and
(iv) At the time of taxable removal, the producer provides to the transferee, in writing (each retaining a copy with the record of taxpaid removal from bond pursuant to [§ 24.310](/current/title-27/section-24.310)), the following information:
(A) The names of the producer and transferee;
(B) The quantity and tax class of the wines to be shipped;
(C) The date of removal from bond for consumption or sale;
(D) A confirmation that the producer is eligible for credit, with the credit rate to which the wines are entitled; and
(E) A confirmation that the subject shipment is within the first 100,000 gallons of eligible wine removed by (or on behalf of) the producer for the calendar year.
(c) *Time for determining and allowing credit.* The credit referred to in [paragraph (a)](/current/title-27/section-24.278#p-24.278\(a\)) of this section will be determined at the same time as the tax is determined under [26 U.S.C. 5041(a)](https://www.govinfo.gov/link/uscode/26/5041), and will be allowable at the time any tax described in [paragraph (a)](/current/title-27/section-24.278#p-24.278\(a\)) of this section is payable. The credit allowable by this section is treated as if it constitutes a reduction in the rate of the tax.
(d) *Computation of credit.* The credit which may be taken on the first 100,000 gallons of wine (other than champagne and other sparkling wine) removed for consumption or sale by an eligible person during a calendar year is computed as follows:
(1) For persons who produce 150,000 gallons or less of wine during the calendar year, the credit is $0.90 per gallon for wine ($0.056 for hard cider);
(2) For persons who produce more than 150,000 gallons but not more than 250,000 gallons during the calendar year, the credit is reduced by 1 percent for every 1,000 gallons produced in excess of 150,000 gallons. For example, the credit that would be taken by a person who produced 160,500 gallons of wine and hard cider during a calendar year would be reduced by 10 percent, for a net credit against the tax of $0.81 per gallon for wine or $0.0504 for hard cider, as long as the wine or hard cider was among the first 100,000 gallons removed for consumption or sale during the calendar year.
(e) *Definitions* —
(1) *Production.* For purposes of determining if a person's production of wine is within the 250,000 gallon limit, production includes, in addition to wine produced by fermentation, any increase in the volume of wine due to the winery operations of amelioration, wine spirits addition, sweetening, or production of formula wine. Production of champagne and other sparkling wines is included for purposes of determining whether total production of a winery exceeds 250,000 gallons. Production includes all wine produced at qualified bonded wine premises within the United States and wine produced outside the United States by the same person.
(2) *Removals.* For purposes of determining if a person's removals are within the 100,000 gallon limit, removals include wine that the person removed from all qualified bonded wine premises within the United States. Wine removed by a transferee in bond under [paragraph (b)(2)](/current/title-27/section-24.278#p-24.278\(b\)\(2\)) of this section must be counted against the 100,000 gallon limit of the small producer who owns that wine, and not against the limit of the transferee in bond if the transferee is also a small producer. Champagne and other sparkling wines, which are not eligible for credit, do not count as removals against the 100,000 gallon limit.
(f) *Preparation of tax return.* A person who is eligible for the credit must show the amount of wine tax before credit on the Excise Tax Return, TTB F 5000.24, and must enter the quantity of wine subject to the credit and the applicable credit rate as the explanation for an adjusting entry in Schedule B of the return for each tax period. Where a person does not use the credit authorized by this section to directly reduce the rate of Federal excise tax on wine, that person must report on TTB F 5000.24 where the credit will be, or has been, applied. Where a transferee in bond takes credit on behalf of one or more small producers, the transferee must show in Schedule B of the return the name of each producer, each producer's credit rate, and the total credit taken on behalf of each producer during the tax return period.
(g) *Denial of deduction.* Pursuant to [26 U.S.C. 5041(c)(5)](https://www.govinfo.gov/link/uscode/26/5041), any deduction under 26 U.S.C. subtitle A with respect to any tax against which the credit is allowed under [paragraph (a)](/current/title-27/section-24.278#p-24.278\(a\)) of this section must only be for the amount of the tax as reduced by the credit.
(h) *Exception to credit.* The appropriate TTB officer will deny any tax credit taken under [paragraph (a)](/current/title-27/section-24.278#p-24.278\(a\)) of this section where it is determined that the allowance of the credit would benefit a person who would otherwise fail to qualify for the use of the credit.
([26 U.S.C. 5041(c)](https://www.govinfo.gov/link/uscode/26/5041).)
(Approved by the Office of Management and Budget under control number 1513-0104)
\[T.D. TTB-64, [72 FR 65454](https://www.federalregister.gov/citation/72-FR-65454), Nov. 21, 2007]
#### § 24.279 Tax adjustments related to wine credit.
(a) *Increasing adjustments.* Persons who produce more wine than the amount used in computation of the credit, or who lose eligibility by not producing during a calendar year, must make increasing tax adjustments. Where an increasing adjustment to a person's tax return is necessary as a result of an incorrect credit rate claimed pursuant to [§ 24.278](/current/title-27/section-24.278), that person must make the adjustment on the Excise Tax Return, TTB F 5000.24, no later than the return period in which production (or the production of the controlled group of which the person is a member) exceeds the amount used in computation of the credit. If the adjustment is due to failure to produce, the person must make the adjustment no later than the last return period of the calendar year. The adjustment is the difference between the credit taken for prior return periods in that year and the appropriate credit for those return periods. The person must make tax adjustments for all bonded wine premises where excess credits were taken against tax that year, and must include interest payable. In the case of a person who continued to deduct credit after reaching the 100,000 gallon maximum during the calendar year, that person must make an adjustment in the full amount of excess credit taken and must include interest payable under 26 U.S.C. 6601 from the date on which the excess credit was taken. In addition, the person must include the penalty payable under [26 U.S.C. 6662](https://www.govinfo.gov/link/uscode/26/6662) if the appropriate TTB officer determines that the underpayment was due to negligence or disregard of rules or regulations and advises the person to include the penalty as part of the adjustment. The appropriate TTB officer will provide information, when requested, regarding interest rates applicable to specific time periods and regarding any applicable penalties. In the case of a controlled group of bonded wine premises that took excess credits, all member proprietors who took incorrect credits must make tax adjustments as determined in this section. In the case of a small producer who instructed a transferee in bond to take credit as authorized by [§ 24.278(b)(2)](/current/title-27/section-24.278#p-24.278\(b\)\(2\)), and subsequently determines that the credit was less or not applicable, that producer must immediately inform the transferee in bond, in writing, of the correct credit information. The transferee must make any increasing adjustment on its next tax return based on revised credit information given by the producer or a TTB officer.
(b) *Decreasing adjustments.* Where a person fails to deduct the credit or deducts less than the appropriate credit provided for by [§ 24.278](/current/title-27/section-24.278) during the calendar year, the person may file a claim for refund of excess tax paid. The claim must be filed in accordance with [§ 24.69](/current/title-27/section-24.69). In the case of wine removed on behalf of a small producer by a transferee in bond, if the transferee in bond was instructed to deduct credit and failed to deduct credit or deducted less than the appropriate credit and was later reimbursed for the tax by that producer, the transferee may file the claim. The provisions of [26 U.S.C. 6423](https://www.govinfo.gov/link/uscode/26/6423) and [27 CFR part 70, subpart F](/current/title-27/part-70/subpart-F), will apply, and the producer and transferee in bond must show that the conditions of [§ 24.278(b)(2)](/current/title-27/section-24.278#p-24.278\(b\)\(2\)) were met.
([26 U.S.C. 5041(c)](https://www.govinfo.gov/link/uscode/26/5041))
(Approved by the Office of Management and Budget under control number 1513-0088)
\[T.D. TTB-64, [72 FR 65455](https://www.federalregister.gov/citation/72-FR-65455), Nov. 21, 2007]
### Transfer of Wine in Bond
#### § 24.280 General.
Wine may be removed for transfer in bond, from one bonded wine premises to another bonded wine premises or to a distilled spirits plant. For bulk wine transferred in bond between adjacent or contiguous bonded wine premises or to an adjacent or contiguous distilled spirits plant, an accurately calibrated tank for measuring the wine is required on at least one of the premises. The volume of wine transferred will be recorded to the nearest whole gallon, five-tenths gallon being converted to the next full gallon.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended ([26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362)))
#### § 24.281 Consignor premises.
Prior to transferring wine in bond, the proprietor shall prepare a transfer record prescribed by [§ 24.309](/current/title-27/section-24.309). Except for multiple transfers as provided in [§ 24.282](/current/title-27/section-24.282), a transfer record will be prepared for each shipment. On completion of lading (or completion of transfer by pipeline), the proprietor shall retain one copy of the transfer record for the files and forward the original to the consignee (by the close of the next business day).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended ([26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362))
(Approved by the Office of Management and Budget under control number 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31082](https://www.federalregister.gov/citation/56-FR-31082), July 9, 1991]
#### § 24.282 Multiple transfers.
(a) *Truck.* The proprietor may use one transfer record for all wine shipped by truck on the same day to other premises. The proprietor shall prepare a shipment or delivery order for each shipment showing date of transfer, name and address of the proprietor and consignee, number of cases or containers, serial numbers of cases (if any) or container identification marks, and quantity shipped in gallons or liters. A copy of the shipping or delivery order will be retained by the proprietor and a copy sent with the shipment. On completion of lading the last truck for the day, the proprietor shall prepare and process a transfer record as provided in [§ 24.281](/current/title-27/section-24.281).
(b) *Pipeline.* The proprietor may use one transfer record for all wine (including distilling material and vinegar stock) transferred by pipeline to adjacent premises during a month. At the end of the month, the proprietor shall prepare and process a transfer record as provided in [§ 24.281](/current/title-27/section-24.281).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended ([26 U.S.C 5362](https://www.govinfo.gov/link/uscode/26/5362)))
(Approved by the Office of Management and Budget under control number 1512-0298)
#### § 24.283 Reconsignment.
Prior to or on arrival at the premises of a consignee, wine transferred in bond may be reconsigned by the consignor. The proprietor to whom the wine is reconsigned will be liable for the tax on the wine while it is in transit after reconsignment. Notice of cancellation of the shipment will be made to the other proprietors involved by the proprietor who reconsigned the wine. Where reconsignment is to other than the shipping proprietor, a new transfer record prominently marked “Reconsignment” will be prepared and processed as provided by [§ 24.281](/current/title-27/section-24.281).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended ([26 U.S.C 5362](https://www.govinfo.gov/link/uscode/26/5362)))
(Approved by the Office of Management and Budget under control number 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. TTB-146, [82 FR 1126](https://www.federalregister.gov/citation/82-FR-1126), Jan. 4, 2017]
#### § 24.284 Consignee premises.
When wine is received by transfer in bond, the consignee shall check the shipment against the transfer record and determine by volumetric measure or weight the quantity received. The date received and, if different from the quantity shipped, the quantity received will be recorded on the transfer record. See [§ 24.267](/current/title-27/section-24.267) for provisions applicable to losses in transit. Sealed containers or cases received without apparent loss need not be measured or weighed. The consignee will retain the original of the transfer record and any accompanying documents.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended ([26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362)))
(Approved by the Office of Management and Budget under control number 1512-0298)
### Removals Without Payment of Tax
#### § 24.290 Removal of wine as distilling material.
(a) *General.* Still wine or still hard cider may be removed without payment of tax to the production facilities of a distilled spirits plant for use as distilling material. The volume of distilling material may be determined at either the bonded wine premises or the distilled spirits plant.
(b) *Special natural wine.* Unmarketable special natural wine may be removed to a distilled spirits plant for use as distilling material in the production of wine spirits (but not brandy). Where sugar has been used in the production of special natural wine, the wine may not be removed for use as distilling material if the unfermented sugars therein have been fermented prior to the removal. If wine spirits produced from special natural wine contain any flavor characteristics of the special natural wine, the wine spirits may be used only in the production of a special natural wine.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended, 1382, as amended, 1395, as amended ([26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362), [5373](https://www.govinfo.gov/link/uscode/26/5373), [5552](https://www.govinfo.gov/link/uscode/26/5552)))
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. TTB-147, [82 FR 7665](https://www.federalregister.gov/citation/82-FR-7665), Jan. 23, 2017]
#### § 24.291 Removal of wine for vinegar production.
(a) *General.* Still wine or still hard cider may be removed from bonded wine premises, without payment of tax, for use in the manufacture of vinegar. Where the proprietor is also the proprietor of a vinegar plant located adjacent or contiguous to the bonded wine premises, wine may be removed without payment of tax upon filing a consent of surety extending the terms of the wine bond to cover the removal and use of wine in the manufacture of vinegar. Where the proprietor of a vinegar plant is not the proprietor of an adjacent or contiguous bonded wine premises, the proprietor of the vinegar plant may receive wine, without payment of tax, for use in the manufacture of vinegar by filing a bond under the provisions of [§ 24.146(c)](/current/title-27/section-24.146#p-24.146\(c\)) to cover the removal to and use of wine at the vinegar plant.
(b) *Vinegar plant records.* Each proprietor of a vinegar plant to which wine is shipped, without payment of tax, for use in the manufacture of vinegar shall keep a record of all wine received and used for the manufacture of vinegar and of all vinegar produced and disposed of. The record will show the following information:
(1) The volume and alcohol content of all wine received, the date of receipt, and the name, registry number, and address of the bonded wine premises from which received;
(2) The volume and alcohol content of all wine used in the manufacture of vinegar, and the date of use;
(3) The volume and grain strength of the vinegar produced, and the date of production. (This volume will be reported on a 100-grain strength basis and will be determined by multiplying the wine gallons of vinegar produced by the grain strength thereof and dividing the result by 100); and
(4) The names and addresses of all persons to whom vinegar is shipped, the volume and grain strength shipped to each, and the date of shipment. (Grain strength is a measure of the acetic acid content of vinegar, expressed as 10 times the grams of acetic acid per 100 mL).
(c) *Inspection of vinegar plants.* The proprietor of a vinegar plant receiving wine, without payment of tax, for use in the manufacture of vinegar shall make the premises and records available for inspection by appropriate TTB officers during regular business hours.
(August 16, 1954, ch. 736, 68A Stat. 903, as amended ([26 U.S.C. 7606](https://www.govinfo.gov/link/uscode/26/7606)); Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended ([26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362)))
(Approved by the Office of Management and Budget under control numbers 1513-0009 and 1513-0115)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13684](https://www.federalregister.gov/citation/64-FR-13684), Mar. 22, 1999; T.D. TTB-147, [82 FR 7665](https://www.federalregister.gov/citation/82-FR-7665), Jan. 23, 2017]
#### § 24.292 Exported wine.
(a) *General.* Wine may be removed from a bonded wine premises without payment of tax for exportation, for use on vessels and aircraft, for transportation to and deposit in a “Class 6” manufacturing bonded warehouse, for transfer to and deposit in a customs bonded warehouse, and for transfer to and deposit in a foreign-trade zone for exportation or for storage pending exportation. Removals of wine for export will be in accordance with the procedures in [part 28 of this chapter](/current/title-27/part-28).
(b) *Return of wine to bonded storage.* Wines which have been lawfully withdrawn, without payment of tax, under the provisions of [part 28 of this chapter](/current/title-27/part-28) may be returned to bonded wine premises from which withdrawn for storage pending subsequent removal for lawful purposes. On return of wine to bonded wine premises, the proprietor shall record the receipt showing the gallonage of each tax class received and returned to storage on bonded wine premises and shall report the return on the TTB F 5120.17, Report of Bonded Wine Premises Operations for the reporting period with an explanatory notation. All provisions of this part applicable to wine in bond at bonded wine premises and to removals from bond are applicable to returned wine.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended ([26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362)))
(Approved by the Office of Management and Budget under control numbers 1512-0216 and 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-338, [58 FR 19065](https://www.federalregister.gov/citation/58-FR-19065), Apr. 12, 1993; T.D. TTB-8, [69 FR 3830](https://www.federalregister.gov/citation/69-FR-3830), Jan. 27, 2004]
#### § 24.293 Wine for Government use.
(a) *General.* Wine may be removed from bonded wine premises, free of tax, for use of the Government of the United States, or any agency thereof, upon receipt of a proper Government order signed by the officer in charge of the department, institution, station, or similar establishment, to which the wine is to be shipped or other officer duly authorized to sign the order. The governmental order will show the kind, quantity and alcohol content of the wine desired; and the purpose for which the wine is to be used. Wine may also be removed for use by the governments of the several states and the District of Columbia, or of any subdivision thereof, or by any agency of the governments, free of tax, from bonded wine premises for analysis, testing, research or experimentation.
(b) *Bill of lading and report of shipment.* Where wine is shipped by common carrier, the proprietor shall retain a copy of the bill of lading, covering the shipment, with the TTB F 5120.17, Report of Bonded Wine Premises Operations for the reporting period in which the shipment is made. The bill of lading will show the name and address of the agency to which the wine is shipped, identifying marks on containers or cases, and alcohol content of the wine. The governmental order, or a copy of the order, will be filed at the bonded wine premises available for inspection by appropriate TTB officers.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended, 1381, as amended ([26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362), [5367](https://www.govinfo.gov/link/uscode/26/5367), [7510](https://www.govinfo.gov/link/uscode/26/7510)))
(Approved by the Office of Management and Budget under control numbers 1512-0216 and 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31082](https://www.federalregister.gov/citation/56-FR-31082), July 9, 1991; T.D. ATF-338, [58 FR 19065](https://www.federalregister.gov/citation/58-FR-19065), Apr. 12, 1993; T.D. ATF-409, [64 FR 13684](https://www.federalregister.gov/citation/64-FR-13684), Mar. 22, 1999]
#### § 24.294 Destruction of wine.
(a) *General.* Wine on bonded wine premises may be destroyed on or off wine premises by the proprietor without payment of tax. A proprietor who wants to destroy wine on or off wine premises must file with the appropriate TTB officer an application stating the kind, alcohol content, and approximate volume of wine to be destroyed, where the wine is to be destroyed, and the reason for destruction. Wine to be destroyed must be inspected, and the destruction supervised, by an appropriate TTB officer unless the appropriate TTB officer authorizes the proprietor to destroy the wine without inspection and supervision. The wine must not be destroyed until the proprietor has received authority from the appropriate TTB officer.
(b) *Record of destruction.* The proprietor shall maintain a record of the volume destroyed and include the quantity on the TTB F 5120.17, Report of Bonded Wine Premises Operations. If part of the volume of the material destroyed is not wine, the volume destroyed will be reported on the basis of actual wine content of the material, excluding any dilution by water or other substance.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367), [5370](https://www.govinfo.gov/link/uscode/26/5370)))
(Approved by the Office of Management and Budget under control numbers 1512-0216 and 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-338, [58 FR 19065](https://www.federalregister.gov/citation/58-FR-19065), Apr. 12, 1993; T.D. ATF-409, [64 FR 13686](https://www.federalregister.gov/citation/64-FR-13686), Mar. 22, 1999]
### Return of Wine to Bond
#### § 24.295 Return of wine to bond.
(a) *General.* Wine, domestic or imported, which has been taxpaid and removed from bonded wine premises, may be received by the proprietor of a bonded wine premises for return to bond. The proprietor may, when such taxpaid wine is returned to bond, make a claim for refund or credit, without interest. However, tax will not be refunded or credited for any wine for which a claim has been or will be made under [27 CFR part 70, subpart G](/current/title-27/part-70/subpart-G). If the tax has been determined but not paid, the person liable for the tax may, when such wine is returned to bond, be relieved of the liability. Claims for refund or credit, or relief from tax paid or determined on wine returned to bond, are filed in accordance with [§ 24.66](/current/title-27/section-24.66).
(b) *Receipt.* The quantity of taxpaid wine returned to bond is determined upon receipt on bonded wine premises. The quantity determined will be entered on the TTB F 5120.17, Report of Bonded Wine Premises Operations for the reporting period during which the wine is returned.
(c) *Records.* The proprietor shall maintain records covering each lot of taxpaid wine returned to bond in accordance with [§ 24.312](/current/title-27/section-24.312).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1332, as amended, 1382, as amended ([26 U.S.C. 5044](https://www.govinfo.gov/link/uscode/26/5044), [5371](https://www.govinfo.gov/link/uscode/26/5371)))
(Approved by the Office of Management and Budget under control numbers 1513-0053, 1513-0115, and 1513-0030)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31082](https://www.federalregister.gov/citation/56-FR-31082), July 9, 1991; T.D. ATF-338, [58 FR 19065](https://www.federalregister.gov/citation/58-FR-19065), Apr. 12, 1993; T.D. ATF-344, [58 FR 40354](https://www.federalregister.gov/citation/58-FR-40354), July 28, 1993; T.D. ATF-376, [61 FR 31030](https://www.federalregister.gov/citation/61-FR-31030), June 19, 1996; T.D. TTB-130, [80 FR 55248](https://www.federalregister.gov/citation/80-FR-55248), Sept. 15, 2015]
### Taxpaid Wine Operations
#### § 24.296 Taxpaid wine operations.
(a) *General.* The proprietor may conduct taxpaid wine operations authorized by [§ 24.102](/current/title-27/section-24.102) in an area designated as a taxpaid wine premises at a bonded wine premises or at a taxpaid wine bottling house. Taxpaid foreign wine may be received on the taxpaid wine premises for reconditioning and removal without retaxpayment or for destruction without credit of tax. Any taxpaid wine operations will be separate from all nontaxpaid wine operations and taxpaid wine will be clearly identified as provided in [§ 24.135](/current/title-27/section-24.135). The appropriate TTB officer may require any additional segregation and identification of taxpaid wine operations as deemed necessary to protect the revenue.
(b) *Treatment and blending.* Taxpaid wine may be treated with sulfur dioxide compounds, refrigeration or pasteurization and may also be preserved, filtered or clarified by the use of methods or materials which will not change the basic character of the wine. Water may not be added to taxpaid wine. The proprietor who desires to treat wine in any manner (other than by simple filtration or the use of sulfur compounds, refrigeration or pasteurization) shall first file with the appropriate TTB officer an application giving the details of the proposed treatment. The proprietor may not use the treatment prior to approval. The proprietor may incur civil or criminal liability for using an unauthorized treatment of untaxpaid wine. Wine of the same kind (class and type), national origin and tax class may only be mixed to facilitate handling at a taxpaid wine bottling house; otherwise, the blending of taxpaid wine on such premises is prohibited. Taxpaid wine of different national origins, but of the same kind and tax class, may only be blended on taxpaid wine premises. (Sec. 201, Pub. L. 85-859, 72 Stat. 1407 ([26 U.S.C. 5352](https://www.govinfo.gov/link/uscode/26/5352), [5661](https://www.govinfo.gov/link/uscode/26/5661)))
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999]
## Subpart O—Records and Reports
#### § 24.300 General.
(a) *Records and reports.* A proprietor who conducts wine operations shall maintain wine transaction records and submit reports as required by this part. Transaction records may be recorded in wine gallons or in liters. However, required reports will show wine volumes in wine gallons. The equivalent wine gallons of wine bottled or packed and labeled according to metric measure will be determined using the following conversion factors:
(1) *Per case.* Equivalent gallonage may be determined using the following conversion factors for cases of metric bottles:
| Bottles per case | Net content each bottle | Equivalent gallonage |
| ---------------- | ----------------------- | -------------------- |
| 120 | 50 mL | 1.58502 |
| 60 | 100 mL | 1.58502 |
| 48 | 187 mL | 2.37119 |
| 24 | 375 mL | 2.37753 |
| 12 | 750 mL | 2.37753 |
| 12 | 1 liter | 3.17004 |
| 6 | 1.5 liter | 2.37753 |
| 4 | 3 liter | 3.17004 |
(2) *Per liter.* Equivalent gallonage may be determined by multiplying total liters by a conversion factor of 0.26417 gallons per liter.
(b) *Time of making entries.* Any operation or transaction is to be entered in records or commercial papers at the time the operation or transaction occurs, except that where records are posted from source records or from supplemental auxiliary records prepared at the time the operation or transaction occurs, entries in another record may be deferred to not later than the close of business of the third business day succeeding the day on which the operation or transaction occurs. The proprietor shall retain all source records and all supplemental or auxiliary records which support entries in other records or commercial papers in order to facilitate verification of operations by appropriate TTB officers. Source records and supplemental or auxiliary records may be used as a record of an operation or transaction and to prepare the TTB F 5120.17, Report of Bonded Wine Premises Operations, provided the record will readily allow for verification of an operation or transaction by appropriate TTB officers.
(c) *Prescribed forms.* All reports required by this part must be submitted on forms prescribed by [§ 24.20](/current/title-27/section-24.20). Entries will be made as indicated by the headings of the columns and lines, and as required by the instructions for the form. Report forms are furnished free of cost.
(d) *Period of retention.* All prescribed returns, reports and records (including source records) will be retained by the proprietor for a period of not less than three years from the record date or the date of the last entry required to be made in the record, whichever is later. However, the appropriate TTB officer may require records to be kept an additional period not exceeding three years in any case where retention is determined to be necessary.
(e) *Data processing.*
(1) Notwithstanding any other provision of this section, data maintained on data processing equipment may be kept at a location other than the wine premises if the original operation or transaction source records required by this subpart are kept available for inspection at the wine premises.
(2) Data which has been accumulated on cards, tapes, discs, or other accepted recording media will be retrievable within five business days.
(3) The applicable data processing program will be made available for examination if requested by an appropriate TTB officer.
(f) *Photographic copies of records.* The proprietor may record, copy, or reproduce records required by this part and may use any process which accurately reproduces the original record and which forms a durable medium for reproducing and preserving the original record. Whenever records are reproduced under this section, the reproduced records will be preserved in conveniently accessible files, and provisions will be made for examining, viewing and using the reproduced record the same as if it were the original record, and it will be treated and considered for all purposes as though it were the original record. All provisions of law and regulations applicable to the original are applicable to the reproduced record. As used in this paragraph, “original record” means the record required to be maintained or preserved by the proprietor, even though it may be an executed duplicate or other copy of the document.
(g) *TTB F 5120.17, Report of Bonded Wine Premises Operations.* A proprietor who conducts bonded wine premises operations must complete and submit TTB F 5120.17 in accordance with the instructions on the form.
(1) *Monthly report.* The proprietor must submit TTB F 5120.17 on a monthly basis, except as otherwise provided in [paragraph (g)(2)](/current/title-27/section-24.300#p-24.300\(g\)\(2\)) or [(g)(3)](/current/title-27/section-24.300#p-24.300\(g\)\(3\)) of this section.
(2) *Quarterly or annual report.*
(i) *General.* A proprietor may file a completed TTB F 5120.17 on a quarterly or annual basis if the proprietor meets the criteria in [paragraph (g)(2)(ii)](/current/title-27/section-24.300#p-24.300\(g\)\(2\)\(ii\)) or [(g)(2)(iii)](/current/title-27/section-24.300#p-24.300\(g\)\(2\)\(iii\)) of this section. To begin the quarterly or annual filing of a report of bonded wine premises operations, a proprietor must state the intent to do so in the “Remarks” section when filing the prior month's TTB F 5120.17. A proprietor who is commencing operations during a calendar year and expects to meet these criteria may use a letter notice to the appropriate TTB officer and file TTB F 5120.17 quarterly or annually for the remaining portion of the calendar year. If a proprietor becomes ineligible for quarterly or annual filing by exceeding the applicable tax liability or activity limit, the proprietor must file TTB F 5120.17 for that month and for all subsequent months of the calendar year. If there is jeopardy to the revenue, the appropriate TTB officer may at any time require any proprietor otherwise eligible for quarterly or annual filing of a report of bonded wine premises operations to file such report monthly.
(ii) *Eligibility for quarterly report filing.* In order to be eligible to file TTB F 5120.17 on a quarterly basis, the proprietor must be filing quarterly tax returns under [§ 24.271(b)(1)(iii)](/current/title-27/section-24.271#p-24.271\(b\)\(1\)\(iii\)), and the proprietor must not expect the sum of the bulk and bottled wine to be accounted for in all tax classes to exceed 60,000 gallons for any one quarter during the calendar year when adding up the bulk and bottled wine on hand at the beginning of the month, bulk wine produced by fermentation, sweetening, blending, amelioration or addition of wine spirits, bulk wine bottled, bulk and bottled wine received in bond, taxpaid wine returned to bond, bottled wine dumped to bulk, inventory gains, and any activity written in the untitled lines of the report form which increases the amount of wine to be accounted for.
(iii) *Eligibility for annual report filing.* In order to be eligible to file TTB F 5120.17 on an annual basis, the proprietor must be filing annual tax returns under [§ 24.271(b)(1)(ii)](/current/title-27/section-24.271#p-24.271\(b\)\(1\)\(ii\)), and the proprietor must not expect the sum of the bulk and bottled wine to be accounted for in all tax classes to exceed 20,000 gallons for any one month during the calendar year when adding up the bulk and bottled wine on hand at the beginning of the month, bulk wine produced by fermentation, sweetening, blending, amelioration or addition of wine spirits, bulk wine bottled, bulk and bottled wine received in bond, taxpaid wine returned to bond, bottled wine dumped to bulk, inventory gains, and any activity written in the untitled lines of the report form which increases the amount of wine to be accounted for.
(3) *No reportable activity.* A proprietor who files a monthly TTB F 5120.17 and does not expect an inventory change or any reportable operations to be conducted in a subsequent month or months may attach to the filed TTB F 5120.17 a statement that, until a change in the inventory or a reportable operation occurs, a TTB F 5120.17 will not be filed.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367), [5555](https://www.govinfo.gov/link/uscode/26/5555)))
(Approved by the Office of Management and Budget under control numbers 1512-0216 and 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-338, [58 FR 19065](https://www.federalregister.gov/citation/58-FR-19065), Apr. 12, 1993; T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), [13684](https://www.federalregister.gov/citation/64-FR-13684), [13686](https://www.federalregister.gov/citation/64-FR-13686), Mar. 22, 1999; T.D. TTB-41, [71 FR 5603](https://www.federalregister.gov/citation/71-FR-5603), Feb. 2, 2006; T.D. TTB-89, [76 FR 3511](https://www.federalregister.gov/citation/76-FR-3511), Jan. 20, 2011; T.D. TTB-94, [76 FR 52862](https://www.federalregister.gov/citation/76-FR-52862), Aug. 24, 2011; T.D. TTB-146, [82 FR 1126](https://www.federalregister.gov/citation/82-FR-1126), Jan. 4, 2017]
#### § 24.301 Bulk still wine and bulk still hard cider record.
A proprietor who produces or receives still wine or bulk still hard cider in bond, (including wine intended for use as distilling material or vinegar stock to which water has not yet been added) shall maintain records of transactions for bulk still wine or bulk still hard cider. Records will be maintained for each tax class of still wine or for hard cider including the date the transaction occurred. The bulk still wine and bulk still hard cider or for hard cider record will contain the following:
(a) The volume produced by fermentation in wine gallons determined by actual measurement;
(b) The volume received, shipped taxpaid, removed (e.g., taxpaid, in bond, export, family use, samples) and used in sparkling wine or sparkling hard cider production; if a tax credit under [26 U.S.C. 5041(c)](https://www.govinfo.gov/link/uscode/26/5041) may be claimed, the record will be maintained in sufficient detail to insure that such a tax credit is properly claimed;
(c) The specific type of production method used, e.g., natural fermentation, amelioration, sweetening, addition of spirits, blending;
(d) The volume of wine used and produced by amelioration, addition of spirits or sweetening, as determined by measurements of the wine before and after production.
(e) The volume of wine used for and produced by blending, if wines of different tax classes are blended together;
(f) The volume of wine used to produce formula wine, vinegar stock and distilling material;
(g) The volume of wine removed to fermenters for refermentation or removed directly to the production facilities of a distilled spirits plant or vinegar plant;
(h) Where a process authorized under [§ 24.248](/current/title-27/section-24.248) is employed, records will be maintained to allow for verification of any limitation specified for the process employed and to ensure that the use of the process is consistent with good commercial practice;
(i) Where a treating material is dissolved or dispersed in water as authorized in this part, the volume of water added to the wine;
(j) An explanation of any unusual transaction. (Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367))); and
(k) If the proprietor is an importer of wine to which the provisions of [§ 27.140 of this chapter](/current/title-27/section-27.140) apply, any certification or other records required at the time of release from customs custody under that section.
(Approved by the Office of Management and Budget under control number 1513-0115)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-307, [55 FR 52738](https://www.federalregister.gov/citation/55-FR-52738), Dec. 21, 1990; T.D. ATF-312, [56 FR 31082](https://www.federalregister.gov/citation/56-FR-31082), July 9, 1991; T.D. TTB-31, [70 FR 49483](https://www.federalregister.gov/citation/70-FR-49483), Aug. 24, 2005; T.D. TTB-147, [82 FR 7665](https://www.federalregister.gov/citation/82-FR-7665), Jan. 23, 2017]
#### § 24.302 Effervescent wine record.
A proprietor who produces or receives effervescent wine in bond shall maintain records showing the transaction date and details of production, receipt, storage, removal, and any loss incurred. Records will be maintained for each specific process used (bulk or bottle fermented, injection of carbon dioxide) and by the specific kind of wine, *e.g.,* grape, apple, pear, cherry, hard cider. The record will contain the following:
(a) The volume of still wine or still hard cider filled into bottles or pressurized tanks prior to secondary fermentation or prior to the addition of carbon dioxide;
(b) The quantity of any first dosage used;
(c) Any in-process bottling losses, e.g., refilling, spillage, breakage;
(d) The volume of bottle fermented sparkling wine or bottle fermented sparkling hard cider in process, transferred and received;
(e) The volume returned to still wine or still hard cider;
(f) The quantity of any finishing dosage used (See [§ 24.192](/current/title-27/section-24.192));
(g) The volume of finished effervescent wine bottled or packed (amount produced);
(h) The quantity of each item used in the production of dosages, e.g., wine, sugar, spirits;
(i) An explanation of any unusual transaction;
(j) If the proprietor is an importer of wine to which the provisions of [§ 27.140 of this chapter](/current/title-27/section-27.140) apply, any certification or other records required at the time of release from customs custody under that section; and
(k) The amount of carbon dioxide in artificially carbonated hard cider or sparkling hard cider.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367)))
(Approved by the Office of Management and Budget under control number 1513-0115 and 1513-0139)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31082](https://www.federalregister.gov/citation/56-FR-31082), July 9, 1991; T.D. TTB-31, [70 FR 49483](https://www.federalregister.gov/citation/70-FR-49483), Aug. 24, 2005; T.D. TTB-147, [82 FR 7665](https://www.federalregister.gov/citation/82-FR-7665), Jan. 23, 2017; T.D. TTB-196, [89 FR 87941](https://www.federalregister.gov/citation/89-FR-87941), Nov. 6, 2024]
#### § 24.303 Formula wine record.
A proprietor who produces beverage formula wine shall maintain records showing by transaction date the details of production. The formula wine record will contain the following:
(a) A number for each lot produced;
(b) The approved formula number for each lot;
(c) The volume of wine used in the production;
(d) The volume produced and the gain or loss resulting from the production of each lot as determined by comparing the volume finished with the volume used (report the total loss or gain on the TTB F 5120.17 for the period in question);
(e) An explanation of any unusual loss or gain;
(f) The production of essences showing the formula number, quantities of spirits and herbs used, and the amount produced;
(g) The quantity of essences purchased, and the use, transfer or other disposition of essences produced or purchased; and
(h) A record of the receipt and use or other disposition of all herbs, aromatics, essences, extracts, or other flavoring materials used in the production of formula wine.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367)))
(Approved by the Office of Management and Budget under control numbers 1512-0059, 1512-0216 and 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-338, [58 FR 19065](https://www.federalregister.gov/citation/58-FR-19065), Apr. 12, 1993]
#### § 24.304 Chaptalization (Brix adjustment) and amelioration record.
(a) *General.* A proprietor who chaptalizes juice or ameliorates juice or wine, or both, shall maintain a record of the operation and the transaction date. Records will be maintained for each kind of wine produced (grape, apple, strawberry, etc.). No form of record is prescribed, but the record maintained will contain the information necessary to enable appropriate TTB officers to readily determine compliance with chaptalization and amelioration limitations. All quantities will be recorded in wine gallons, and, where sugar is used, the quantity will be determined either by measuring the increase in volume or, for pure dry sugar by considering that each 13.5 pounds results in a volumetric increase of one gallon. If grape juice is chaptalized and subsequently this juice or wine is ameliorated, the quantity of pure dry sugar added to juice will be included as ameliorating material. If fruit juice other than grape is chaptalized and this juice or wine is ameliorated, the quantity of pure dry sugar added for chaptalization is not considered ameliorating material; however, if liquid sugar or invert sugar syrup is used, the quantity of water in such sugar is included as ameliorating material. The record will include the following:
(1) The volume of juice (exclusive of pulp) deposited in fermenters;
(2) The maximum volume of ameliorating material to which the juice is entitled, as provided in [§ 24.178](/current/title-27/section-24.178);
(3) The volume of ameliorating or chaptalizing material used; and
(4) The volume of material authorized but not yet used.
(b) *Supporting records.* The amelioration record will show the basis for entries and calculations, including determination of the natural fixed acid level and total solids content of juice, as applicable. The records are maintained on the basis of annual accounting periods, with each period commencing on July 1 of a year and ending on the following June 30, except the record for an accounting period may be continued after June 30, where the juice or wine included therein is to be held after that date for completion. When the amelioration of wine included in the record for one accounting period is complete, the record is closed and any unused ameliorating material may not be used. The proprietor may mix wines before amelioration of the wine is completed; however, the proprietor shall additionally maintain records necessary to establish the quantity of unused authorized material to which the resultant mixture would be entitled so that appropriate TTB officers may readily ascertain compliance with amelioration limitations.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended 1385, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367), [5384](https://www.govinfo.gov/link/uscode/26/5384)))
(Approved by the Office of Management and Budget under control number 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31082](https://www.federalregister.gov/citation/56-FR-31082), July 9, 1991; T.D. ATF-409, [64 FR 13684](https://www.federalregister.gov/citation/64-FR-13684), Mar. 22, 1999]
#### § 24.305 Sweetening record.
A proprietor who sweetens natural wine with sugar or juice (unconcentrated or concentrated) under the provisions of this part shall maintain a record of sweetening by transaction date. The record will contain the following:
(a) The gallons and degrees Brix of the wine before sweetening;
(b) If concentrate is used, the degrees Brix of the concentrate;
(c) If sugar or juice, or both, are used, the gallon equivalent that would be required to sweeten the volume of wine to its maximum authorized total solids content;
(d) The quantity of sugar or juice used for sweetening; and
(e) The gallons and degrees Brix of the wine produced by sweetening.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367)))
(Approved by the Office of Management and Budget under control number 1512-0298)
#### § 24.306 Distilling material or vinegar stock record.
A proprietor who produces or receives wine containing excess water which will be used expressly as distilling material or vinegar stock shall maintain a record by transaction date showing the amount and kind produced, received, from whom received, removed, and to whom sent. The proprietor shall keep a record of each type of material from which the distilling material or vinegar stock was fermented (e.g., grape, apple, strawberry). The volume of distilling material or vinegar stock produced, including wine lees refermented for use as distilling material, will be recorded upon removal from fermenting tanks. However, the provisions of this section do not apply to standard wine or unwatered wine lees recorded on the proprietor's record of bulk still wine and bulk still hard cider and removed for use as distilling material or vinegar stock.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367)))
(Approved by the Office of Management and Budget under control number 1513-0115)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31083](https://www.federalregister.gov/citation/56-FR-31083), July 9, 1991; T.D. TTB-147, [82 FR 7665](https://www.federalregister.gov/citation/82-FR-7665), Jan. 23, 2017]
#### § 24.307 Nonbeverage wine record.
A proprietor who produces nonbeverage wine or wine products shall maintain a record by transaction date of such wine produced, received and withdrawn as follows:
(a) The kind, volume, and percent alcohol by volume of wine or wine products made from wine, which was rendered unfit for beverage use;
(b) The kind and quantity of materials received and used to render wine, or wine products made from wine, unfit for beverage use;
(c) The name, volume, percent alcohol by volume, and formula number, if produced under a formula, of each nonbeverage wine or wine product produced;
(d) The volume, percent alcohol by volume, and formula number, if applicable, of the nonbeverage wine or wine products received;
(e) The volume, percent alcohol by volume, and formula number, if applicable, of the nonbeverage wine or wine products removed;
(f) The name and address of the person to whom removed; however, on any individual sale of less than 80 liters the name and address of the purchaser need not be recorded; and
(g) In the case of vinegar production, the acetic acid and ethyl alcohol content of the vinegar.
When the proprietor sends nonbeverage wine or wine products free of tax to an adjacent or contiguous premises operated by the proprietor, records required by [paragraphs (e)](/current/title-27/section-24.307#p-24.307\(e\)) and [(g)](/current/title-27/section-24.307#p-24.307\(g\)) of this section will be maintained at each location.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367)))
(Approved by the Office of Management and Budget under control number 1512-0298)
#### § 24.308 Bottled or packed wine record.
A proprietor who bottles, packs, or receives bottled or packed beverage wine in bond shall maintain a record, by tax class, as follows:
(a) The date, kind of wine, the number and size of bottle or other container filled (if not available in another record), and volume of wine bottled or packed, received in bond, returned to bond, and removed, e.g., taxpaid removals, in bond removals, dumped to bulk or destroyed, breakage, used for tasting. The volume recorded as bottled for bottle fermented sparkling wine or bottle fermented sparkling hard cider is determined after the disgorging and refilling process.
(b) The label used on bottles or other containers will be shown in the record by using the “Applicant's Serial No.” which appears as item 2 on the label approval form, TTB F 5100.31 or a similar system which will allow for verification of labels used on bottles or containers.
(c) The fill tests and alcohol tests required by [§ 24.255](/current/title-27/section-24.255) for each lot of wine bottled or packed, or for each bottling or packing line operated each day, showing the date, type of test, item tested and the test results.
(d) If a tax credit under [26 U.S.C. 5041(c)](https://www.govinfo.gov/link/uscode/26/5041) may be claimed, the record will be maintained in sufficient detail to insure that such a tax credit is properly claimed.
(Approved by the Office of Management and Budget under control number 1513-0115)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-307, [55 FR 52738](https://www.federalregister.gov/citation/55-FR-52738), Dec. 21, 1990; T.D. ATF-312, [56 FR 31083](https://www.federalregister.gov/citation/56-FR-31083), July 9, 1991; T.D. TTB-147, [82 FR 7665](https://www.federalregister.gov/citation/82-FR-7665), Jan. 23, 2017]
#### § 24.309 Transfer in bond record.
A proprietor who transfers wine in bond shall prepare a transfer record. The transfer record will show:
(a) The name, address and registry number of the proprietor;
(b) The name, address and registry number of the consignee;
(c) The shipping date;
(d) The kind of wine (class and type);
(e) The alcohol content or the tax class;
(f) The number containers larger than four liters and cases;
(g) The serial numbers of cases (if any) or containers larger than four liters;
(h) Any bulk container identification marks;
(i) The volume shipped in gallons or liters; (if a tax credit under [26 U.S.C. 5041(c)](https://www.govinfo.gov/link/uscode/26/5041) may be claimed, the record will be maintained in sufficient detail to insure that such a tax credit is properly claimed);
(j) The serial number of any seal used;
(k) For unlabeled bottled or packed wine, the registry number of the bottler or packer;
(l) Information necessary for compliance with [§ 24.314](/current/title-27/section-24.314), e.g., the varietal, vintage, appellation of origin designation of the wine or any other information that may be stated on the label; and
(m) Information as to any added substance or cellar treatment for which a label declaration is required for the finished product, or any other cellar treatment for which limitations are prescribed in this part, e.g., amount of decolorizing material used and kind and quantity of acid used.
(Sec 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367)))
(Approved by the Office of Management and Budget under control number 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-307, [55 FR 52738](https://www.federalregister.gov/citation/55-FR-52738), Dec. 21, 1990; T.D. ATF-312, [56 FR 31083](https://www.federalregister.gov/citation/56-FR-31083), July 9, 1991; T.D. TTB-91, [76 FR 5478](https://www.federalregister.gov/citation/76-FR-5478), Feb. 1, 2011]
#### § 24.310 Taxpaid removals from bond record.
A proprietor removing wine from bond for consumption or sale on determination of tax shall maintain a record of wine removed at the time of removal either to taxpaid wine premises, taxpaid wine bottling house premises, or for direct shipment. The record will show the date of removal, the name and address of the person to whom shipped, and the volume, kind (class and type), and alcohol content or tax class of the wine. However, on any individual sale of less than 80 liters, the name and address of the purchaser need not be recorded. The proprietor who removes taxpaid bulk wine to another wine premises shall prepare the shipping record and follow the procedures prescribed by [§ 24.281](/current/title-27/section-24.281). The volume of wine removed taxpaid will be summarized daily by tax class in wine gallons to the nearest tenth gallon.
(Approved by the Office of Management and Budget under control number 1513-0115)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31083](https://www.federalregister.gov/citation/56-FR-31083), July 9, 1991; T.D. TTB-196, [89 FR 87942](https://www.federalregister.gov/citation/89-FR-87942), Nov. 6, 2024]
#### § 24.311 Taxpaid wine record.
A proprietor who has taxpaid United States or foreign wine on taxpaid wine premises or on taxpaid wine bottling house premises shall maintain records as follows:
(a) *Record of receipts.*
(1) The name and address of the person or wine premises from whom received;
(2) The registry number (if any) of the wine premises from which received;
(3) The date of receipt;
(4) The kind of wine (class, type and, in the case of foreign wine, country of origin);
(5) Alcohol content or tax class of the wine; and,
(6) The volume of wine received in liters and gallons.
(b) *Record of removals.*
(1) The name and address of the person to whom removed; however, on any individual sale of less than 80 liters, the name and address of the purchaser need not be recorded;
(2) The date of removal;
(3) The kind of wine (class, type and, in the case of foreign wine or a blend of United States and foreign wine, country of origin); and
(4) The volume of wine shipped in liters or gallons.
(c) *Record of cases or containers filled.*
(1) The date the cases or containers were filled;
(2) The kind (class, type, and in the case of foreign wine or a blend of United States and foreign wine, country of origin) of wine bottled or packed;
(3) The number of the tank used to fill the bottles or other containers;
(4) The size of bottles or other containers and the number of cases or containers filled;
(5) The serial number or date of fill marked on the cases or containers filled; and
(6) The total volume of wine bottled or packed in liters or wine gallons.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367))).
(Approved by the Office of Management and Budget under control number 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31083](https://www.federalregister.gov/citation/56-FR-31083), July 9, 1991]
#### § 24.312 Wine returned to bond record.
A proprietor shall maintain a record of any taxpaid wine returned to bond as follows:
(a) The kind, volume, and tax class of the wine;
(b) With regard to each tax class, the amount of tax previously paid or determined;
(c) The location of the wine premises at which the wine was bottled or packed and, if known, the identity of the bonded wine premises from which removed on determination of tax;
(d) The date the wine was returned to bond;
(e) The serial numbers or other identifying marks on the cases or containers in which the wine was received; and
(f) The final disposition of the wine.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367)))
(Approved by the Office of Management and Budget under control number 1513-0115)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31083](https://www.federalregister.gov/citation/56-FR-31083), July 9, 1991; T.D. TTB-130, [80 FR 55248](https://www.federalregister.gov/citation/80-FR-55248), Sept. 15, 2015]
#### § 24.313 Inventory record.
A proprietor who files monthly or quarterly reports shall prepare a record of the physical inventory of all wine and spirits in storage at the close of business for each tax year, or where a different cycle has been established, the inventory will be taken at the end of that annual period. Such proprietors may use an annual inventory period different from the period beginning July 1 and ending June 30 by submitting a notice to the appropriate TTB officer. However, proprietors who file quarterly reports must select an annual inventory period that begins on the first day of a calendar quarter. Proprietors who file reports on a calendar year basis under the provisions of [§ 24.300(g) of this part](/current/title-27/part-24/section-24.300#p-24.300\(g\)) shall take the physical inventory at the close of the calendar year. The inventory record will be retained on file with the proprietor's TTB F 5120.17, Report of Bonded Wine Premises Operations, for the reporting period when the inventory was taken. If a proprietor who files monthly reports takes a complete inventory at other times during the year, losses disclosed will be reported on the TTB F 5120.17 and the inventory record will be maintained on file with the report for each month when an inventory was taken. The proprietor's inventory record will include:
(a) *Description of wine.*
(1) State the generic name (e.g., port, claret) or designate as a white, rose or red table or dessert wine; or
(2) Wine intended to be marketed with a vintage date, varietal name, or geographical designation will be appropriately identified, e.g., 1977 Napa Valley Pinot Noir; and
(3) If the wine is other than grape wine, state the type, e.g., orange, honey.
(b) *Bulk containers.* Tanks containing wine will be listed by tank number. Bulk containers which are barrels or puncheons containing the same kind of wine may be summarized, e.g., 10 barrels—red table wine 500 gals.;
(c) *Cases, bottles and other similar containers.* The total volume of one kind of wine in cases, bottles and similar containers may be entered as one item and appropriately identified;
(d) *Inventory summary.* The volume of bulk and bottled or packed wine will be totaled separately in wine gallons or in liters, by tax class, and reported on the TTB F 5120.17. Spirits will also be totaled and reported on the TTB F 5120.17; and
(e) *Inventory record.* All inventory pages will be numbered consecutively and the last inventory page will be dated and signed after the statement, “Under penalties of perjury, I declare that I have examined this inventory record and to the best of my knowledge and belief, it is a true, correct and complete record of all wine and spirits required to be inventoried.”
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367), [5369](https://www.govinfo.gov/link/uscode/26/5369)))
(Approved by the Office of Management and Budget under control numbers 1512-0216 and 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-338, [58 FR 19065](https://www.federalregister.gov/citation/58-FR-19065), Apr. 12, 1993; T.D. ATF-409, [64 FR 13683](https://www.federalregister.gov/citation/64-FR-13683), Mar. 22, 1999; T.D. TTB-41, [71 FR 5603](https://www.federalregister.gov/citation/71-FR-5603), Feb. 2, 2006]
#### § 24.314 Label information record.
A proprietor who removes bottled or packed wine with information stated on the label (e.g., varietal, vintage, appellation of origin, analytical data, date of harvest) shall have complete records so that the information appearing on the label may be verified by a TTB audit. A wine is not entitled to have information stated on the label unless the information can be readily verified by a complete and accurate record trail from the beginning source material to removal of the wine for consumption or sale. All records necessary to verify wine label information are subject to the record retention requirements of [§ 24.300(d)](/current/title-27/section-24.300#p-24.300\(d\)).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367)))
(Approved by the Office of Management and Budget under control number 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. TTB-91, [76 FR 5478](https://www.federalregister.gov/citation/76-FR-5478), Feb. 1, 2011]
#### § 24.315 Materials received and used record.
(a) *General.* A proprietor who produces wine shall maintain a record showing the receipt and use or other disposition of basic winemaking materials received on wine premises. The record will show the date of receipt, the quantity received, the name and address from whom received, and the date of use or other disposition of the materials. For any material stored off wine premises, invoices or other commercial papers covering the purchase will also be kept available for inspection. Where grapes (or other fruit) received on wine premises are used in producing juice to be stored for future use or for removal, the record will show the quantity used and juice produced.
(b) *Concentrated fruit juice.* When concentrated fruit juice or must is produced or received, the record will show the degrees Brix of the juice before and after concentration, the volume of juice before and after reconstitution, the volume of reconstitution water used for each dilution of the concentrate, and, if volatile fruit flavor was added, the kind and volume. Where fruit or juice is used to produce concentrated juice, the record will also show the quantity of fruit or volume of juice used. If the concentrated fruit juice is removed for use by another proprietor, a copy of the certificate required by [§ 24.180](/current/title-27/section-24.180) will be retained. The record of concentrated fruit juice will contain the information necessary to determine compliance with the limitations prescribed in [§ 24.180](/current/title-27/section-24.180). Incomplete or inaccurate records of concentrated fruit juice may result in the wine produced from the concentrated fruit juice to be designated substandard.
(c) *Volatile fruit-flavor concentrate.* If volatile fruit-flavor concentrate is received, the record will show the volume received, the fold, the percent of alcohol by volume, any loss in transit, and the use or other disposition of the volatile fruit-flavor concentrate.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367)))
(Approved by the Office of Management and Budget under control number 1512-0298)
#### § 24.316 Spirits record.
A proprietor who receives, stores, or uses spirits shall maintain a record of receipt and use. The record will show the date of receipt, from whom received, and the kind and proof gallons. The spirits record will also show by date and proof gallons the spirits used or removed from bonded wine premises and to whom. The proof gallons of spirits received, used, removed from bonded wine premises, and on hand will be summarized and the account balanced at the end of each reporting period and reported on the TTB F 5120.17.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended, 1382, as amended, 1383, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367), [5373](https://www.govinfo.gov/link/uscode/26/5373)))
(Approved by the Office of Management and Budget under control numbers 1512-0216 and 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31083](https://www.federalregister.gov/citation/56-FR-31083), July 9, 1991; T.D. ATF-338, [58 FR 19065](https://www.federalregister.gov/citation/58-FR-19065), Apr. 12, 1993]
#### § 24.317 Sugar record.
A proprietor who receives, stores, or uses sugar shall maintain a record of receipt and use. The record will show the date of receipt, from whom received, and the kind and quantity. Invoices covering purchases will be retained. When sugar is used for chaptalization (Brix adjustment), amelioration or sweetening, the record will show the date, kind, and quantity used. The sugar record will also show sugar used in the production of allied products and any sugar removed from the wine premises. At the close of each reporting period, the account will be balanced and the quantity of each kind of sugar remaining on hand will be shown.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367)))
(Approved by the Office of Management and Budget under control number 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-338, [58 FR 19065](https://www.federalregister.gov/citation/58-FR-19065), Apr. 12, 1993]
#### § 24.318 Acid record.
A proprietor who adds acid to correct a natural deficiency in juice or wine or to stabilize wine shall maintain a record showing date of use, the kind and quantity of acid used, the kinds and volume of juice or wine in which used, and, when used to correct natural deficiency, the fixed acid level of juice or of wine before and after the addition of acid. The record will account for all acids received and be supported by purchase invoices.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367)))
(Approved by the Office of Management and Budget under control number 1512-0298)
#### § 24.319 Carbon dioxide record.
A proprietor who uses carbon dioxide in still wine or still hard cider shall maintain a record of the laboratory tests conducted to establish compliance with the limitations prescribed in [§ 24.245](/current/title-27/section-24.245).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367)))
(Approved by the Office of Management and Budget under control number 1513-0115)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. TTB-147, [82 FR 7665](https://www.federalregister.gov/citation/82-FR-7665), Jan. 23, 2017]
#### § 24.320 Chemical record.
A proprietor who uses chemicals, preservatives, or other such materials shall maintain a record of the purchase, receipt and disposition of these materials. The record will show the kinds and quantities received, the date of receipt, and the names and addresses from whom purchased. A record of use in juice or wine of any of these materials, except for filtering aids, inert fining agents, sulfur dioxide, carbon dioxide (except as provided in [§ 24.319](/current/title-27/section-24.319)), nitrogen and oxygen, will be maintained, showing the kind, quantity, and date of use, and kind and volume of juice or wine in which used.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367)))
(Approved by the Office of Management and Budget under control number 1512-0298)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. ATF-312, [56 FR 31083](https://www.federalregister.gov/citation/56-FR-31083), July 9, 1991]
#### § 24.321 Decolorizing material record.
A proprietor who treats juice or wine to remove excess color with activated carbon or any other decolorizing material shall maintain a record to show:
(a) The date the decolorizing material is added to the juice or wine;
(b) The type (e.g. grape variety or kind of wine) and volume of juice or wine treated with decolorizing material; and
(c) The kind and quantity of decolorizing material used to treat the juice or wine.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367)))
(Approved by the Office of Management and Budget under control number 1512-0298)
#### § 24.322 Allied products record.
A proprietor who uses fruit, fruit juice or concentrated fruit juice in the production of allied products shall maintain a record of these materials in accordance with [§ 24.315](/current/title-27/section-24.315). The record will also show the production and disposition of other allied products. If sugar, acids, or chemicals are used in allied products, the receipt and use will also be recorded.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5367](https://www.govinfo.gov/link/uscode/26/5367)))
(Approved by the Office of Management and Budget under control number 1512-0298)
#### § 24.323 Excise Tax Return form.
A proprietor who removes wine subject to tax shall prepare a TTB F 5000.24 , Excise Tax Return. Any increase or decrease in tax due to previous return errors or for authorized credits will be shown on the return. The TTB F 5000.24 will be prepared and filed by the proprietor in accordance with the instructions printed on the form.
(August 16, 1954, ch. 736, 68A Stat. 775, as amended, 777, as amended, 391, as amended, 917, as amended ([26 U.S.C. 5061](https://www.govinfo.gov/link/uscode/26/5061), [7805](https://www.govinfo.gov/link/uscode/26/7805)))
(Approved by the Office of Management and Budget under control numbers 1512-0467 and 1512-0492)
\[T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990, as amended by T.D. TTB-91, [76 FR 5478](https://www.federalregister.gov/citation/76-FR-5478), Feb. 1, 2011; T.D. TTB-146, [82 FR 1126](https://www.federalregister.gov/citation/82-FR-1126), Jan. 4, 2017; T.D. TTB-196, [89 FR 87941](https://www.federalregister.gov/citation/89-FR-87941), Nov. 6, 2024]
## Subpart P—Eligibility for the Hard Cider Tax Rate
#### Source:
T.D. TTB-147, [82 FR 7665](https://www.federalregister.gov/citation/82-FR-7665), Jan. 23, 2017, unless otherwise noted.
#### § 24.331 Wine eligible for the hard cider tax rate.
A wine removed on or after January 1, 2017 is eligible for the hard cider tax rate listed in [§ 24.270](/current/title-27/section-24.270) if:
(a) It contains no more than 0.64 gram of carbon dioxide per 100 milliliters of wine;
(b) It is derived primarily from apples or pears, or from apple juice concentrate or pear juice concentrate and water, as described in [§ 24.332(a)](/current/title-27/section-24.332#p-24.332\(a\));
(c) It contains no fruit product or fruit flavoring other than apple or pear, as described in [§ 24.332(b)](/current/title-27/section-24.332#p-24.332\(b\)) and [(c)](/current/title-27/section-24.332#p-24.332\(c\)); and
(d) It contains at least one-half of 1 percent and less than 8.5 percent alcohol by volume.
(Sec. 335, [Pub. L. 114-113](https://www.govinfo.gov/link/plaw/114/public/113), 129 Stat. 3109, as amended ([26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041)))
#### § 24.332 Hard cider materials.
This section pertains to wine that is eligible for the hard cider tax rate as set out in [§ 24.331](/current/title-27/section-24.331).
(a) *Apples and pears.* Wine will be considered to be derived primarily from apples or pears, or from apple juice concentrate or pear juice concentrate and water, if the apple juice, pear juice, or combination of apple and pear juice, or the equivalent amount of concentrate of apple and/or pear juice reconstituted to the original brix of the juice prior to concentration, or any combination thereof, represents more than 50 percent of the volume of the finished product.
(b) *Fruit products.*
(1) Wine is not eligible for the hard cider tax rate if it contains any fruit product other than apple or pear. A fruit product is any material derived or made from any fruit or part of a fruit, including but not limited to, concentrates, extracts, juices, powders, or wine spirits.
(2) Notwithstanding the provisions of [§ 24.332(b)(1)](/current/title-27/section-24.332#p-24.332\(b\)\(1\)), an authorized wine treating material set forth in [§ 24.246](/current/title-27/section-24.246) that is derived from a fruit other than apple or pear may be used in the production of wine otherwise eligible for the hard cider tax rate if it is used for a purpose other than flavoring and it is either used in accordance with the wine treating materials provisions of [§ 24.246](/current/title-27/section-24.246) (if used in a natural wine), or used in amounts insufficient to impart a fruit flavor other than apple or pear (if used in a special natural wine or other than standard wine). In determining whether the use of wine treating materials derived from a fruit other than apple or pear is for a purpose other than flavoring, TTB will consider such factors as the labeling and advertising of the product. Any written or pictorial reference to a material derived from a fruit other than apple or pear (other than the inclusion of a wine treating material in an ingredient labeling statement) in the labeling or advertising of a wine will be treated as evidence that the wine treating material was added for the purpose of flavoring the wine.
(c) *Flavorings.* Wine is not eligible for the hard cider tax rate if it contains any fruit flavoring other than apple or pear. For purposes of this section, a fruit flavoring other than apple or pear is any flavoring that imparts the flavor of a fruit other than apple or pear and includes a natural fruit flavor, an artificial fruit flavor, and a natural flavor that artificially imparts the flavor of a fruit that is not contained in that flavor. In determining whether the use of a flavoring imparts the flavor of a fruit other than apple or pear, TTB will consider such factors as the labeling and advertising of the product. Any written or pictorial reference to a fruit flavor other than apple or pear in the labeling or advertising of a wine that contains a flavoring will be treated as evidence that the wine contains a flavoring that imparts a fruit flavor other than apple or pear and thus the wine is not eligible for the hard cider tax rate. The use of spices, honey, hops, or pumpkins as a flavoring will not make a wine ineligible for the hard cider tax rate.
(Sec. 335, [Pub. L. 114-113](https://www.govinfo.gov/link/plaw/114/public/113), 129 Stat. 3109, as amended ([26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041)))
# Part 25 — BEER
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-25
Full text of 27 CFR Part 25 — BEER. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 25—BEER
#### Authority:
[19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c); [26 U.S.C. 5002](https://www.govinfo.gov/link/uscode/26/5002), [5051-5054](https://www.govinfo.gov/link/uscode/26/5051), [5056](https://www.govinfo.gov/link/uscode/26/5056), [5061](https://www.govinfo.gov/link/uscode/26/5061), [5121](https://www.govinfo.gov/link/uscode/26/5121), [5122-5124](https://www.govinfo.gov/link/uscode/26/5122), [5222](https://www.govinfo.gov/link/uscode/26/5222), [5401-5403](https://www.govinfo.gov/link/uscode/26/5401), [5411-5417](https://www.govinfo.gov/link/uscode/26/5411), [5551](https://www.govinfo.gov/link/uscode/26/5551), [5552](https://www.govinfo.gov/link/uscode/26/5552), [5555](https://www.govinfo.gov/link/uscode/26/5555), [5556](https://www.govinfo.gov/link/uscode/26/5556), [5671](https://www.govinfo.gov/link/uscode/26/5671), [5673](https://www.govinfo.gov/link/uscode/26/5673), [5684](https://www.govinfo.gov/link/uscode/26/5684), [6011](https://www.govinfo.gov/link/uscode/26/6011), [6061](https://www.govinfo.gov/link/uscode/26/6061), [6065](https://www.govinfo.gov/link/uscode/26/6065), [6091](https://www.govinfo.gov/link/uscode/26/6091), [6109](https://www.govinfo.gov/link/uscode/26/6109), [6151](https://www.govinfo.gov/link/uscode/26/6151), [6301](https://www.govinfo.gov/link/uscode/26/6301), [6302](https://www.govinfo.gov/link/uscode/26/6302), [6311](https://www.govinfo.gov/link/uscode/26/6311), [6313](https://www.govinfo.gov/link/uscode/26/6313), [6402](https://www.govinfo.gov/link/uscode/26/6402), [6651](https://www.govinfo.gov/link/uscode/26/6651), [6656](https://www.govinfo.gov/link/uscode/26/6656), [6676](https://www.govinfo.gov/link/uscode/26/6676), [6806](https://www.govinfo.gov/link/uscode/26/6806), [7342](https://www.govinfo.gov/link/uscode/26/7342), [7606](https://www.govinfo.gov/link/uscode/26/7606), [7805](https://www.govinfo.gov/link/uscode/26/7805); [31 U.S.C. 9301](https://www.govinfo.gov/link/uscode/31/9301), [9303-9308](https://www.govinfo.gov/link/uscode/31/9303).
#### Source:
T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, unless otherwise noted.
#### Editorial Note:
Nomenclature changes to part 25 appear by T.D. ATF-437, [66 FR 5478](https://www.federalregister.gov/citation/66-FR-5478), [5479](https://www.federalregister.gov/citation/66-FR-5479), Jan. 19, 2001.
## Subpart A—Scope of Regulations
#### § 25.1 Production and removal of beer.
The regulations in this part relate to beer and cereal beverages and cover the location, construction, equipment, operations and qualifications of breweries and pilot brewing plants.
#### § 25.2 Territorial extent.
This part applies to the several States of the United States and the District of Columbia.
#### § 25.3 Forms prescribed.
(a) The appropriate TTB officer is authorized to prescribe all forms required by this part, including bonds, applications, notices, reports, returns, and records. All of the information called for in each form shall be furnished as indicated by the headings on the form and the instructions on or pertaining to the form. In addition, information called for in each form shall be furnished as required by this part. The form will be filed in accordance with the instructions for the form.
(b) Forms prescribed by this part are available for printing through the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986; [51 FR 10540](https://www.federalregister.gov/citation/51-FR-10540), Mar. 27, 1986, as amended by T.D. 372, [61 FR 20724](https://www.federalregister.gov/citation/61-FR-20724), May 8, 1996; T.D. ATF-437, [66 FR 5478](https://www.federalregister.gov/citation/66-FR-5478), Jan. 19, 2001; T.D. TTB-44, [71 FR 16941](https://www.federalregister.gov/citation/71-FR-16941), Apr. 4, 2006; T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 25.4 Related regulations.
Regulations relating to this part are listed below:
[27 CFR Part 7](/current/title-27/part-7)—Labeling and Advertising of Malt Beverages.
[27 CFR Part 28](/current/title-27/part-28)—Exportation of Alcohol.
[27 CFR Part 29](/current/title-27/part-29)—Stills and Miscellaneous Regulations.
[31 CFR Part 225](/current/title-31/part-225)—Acceptance of Bonds Secured by Government Obligations in Lieu of Bonds with Sureties.
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-462, [66 FR 42737](https://www.federalregister.gov/citation/66-FR-42737), Aug. 15, 2001; T.D. TTB-8, [69 FR 3830](https://www.federalregister.gov/citation/69-FR-3830), Jan. 27, 2004; T.D. TTB-146, [82 FR 1126](https://www.federalregister.gov/citation/82-FR-1126), Jan. 4, 2017]
#### § 25.5 OMB control numbers assigned under the Paperwork Reduction Act.
(a) *Purpose.* This section collects and displays the control numbers assigned to information collection requirements by the Office of Management and Budget contained in [27 CFR Part 25](/current/title-27/part-25) under the Paperwork Reduction Act of 1980, Pub. L. 96-511.
(b) *Display, OMB control number 1512-0045.* OMB control number 1512-0045 is assigned to the following sections in [27 CFR Part 25: §§ 25.23](/current/title-27/section-25.23), [25.25](/current/title-27/section-25.25), [25.52](/current/title-27/section-25.52), [25.61](/current/title-27/section-25.61), [25.62](/current/title-27/section-25.62), [25.64](/current/title-27/section-25.64), [25.66](/current/title-27/section-25.66), [25.67](/current/title-27/section-25.67), [25.68](/current/title-27/section-25.68), [25.71](/current/title-27/section-25.71), [25.72](/current/title-27/section-25.72), [25.73](/current/title-27/section-25.73), [25.74](/current/title-27/section-25.74), [25.75](/current/title-27/section-25.75), [25.76](/current/title-27/section-25.76), [25.77](/current/title-27/section-25.77), [25.78](/current/title-27/section-25.78), [25.81](/current/title-27/section-25.81), [25.85](/current/title-27/section-25.85), [25.103](/current/title-27/section-25.103), [25.114](/current/title-27/section-25.114), [25.141](/current/title-27/section-25.141), [25.142](/current/title-27/section-25.142), [25.144](/current/title-27/section-25.144), [25.158](/current/title-27/section-25.158), [25.167](/current/title-27/section-25.167), [25.184](/current/title-27/section-25.184), [25.213](/current/title-27/section-25.213), [25.222](/current/title-27/section-25.222), [25.225](/current/title-27/section-25.225), [25.272](/current/title-27/section-25.272), [25.273](/current/title-27/section-25.273), [25.277](/current/title-27/section-25.277), [25.282](/current/title-27/section-25.282), [25.299](/current/title-27/section-25.299).
(c) *Display, OMB control number 1512-0052.* OMB control number 1512-0052 is assigned to the following sections in [27 CFR Part 25: §§ 25.296(b)](/current/title-27/section-25.296#p-25.296\(b\)), [25.297](/current/title-27/section-25.297).
(d) *Display, OMB control number 1512-0079.* OMB control number 1512-0079 is assigned to the following section in [27 CFR Part 25: § 25.65](/current/title-27/section-25.65).
(e) *Display, OMB control number 1512-0141.* OMB control number 1512-0141 is assigned to the following sections in [27 CFR Part 25: §§ 25.281](/current/title-27/section-25.281), [25.282](/current/title-27/section-25.282), [25.286](/current/title-27/section-25.286).
(f) *Display, OMB control number 1512-0333.* OMB control number 1512-0333 is assigned to the following sections in [27 CFR Part 25: §§ 25.42](/current/title-27/section-25.42), [25.142](/current/title-27/section-25.142), [25.186](/current/title-27/section-25.186), [25.192](/current/title-27/section-25.192), [25.195](/current/title-27/section-25.195), [25.196](/current/title-27/section-25.196), [25.211](/current/title-27/section-25.211), [25.252](/current/title-27/section-25.252), [25.264](/current/title-27/section-25.264), [25.276](/current/title-27/section-25.276), [25.284](/current/title-27/section-25.284), [25.291](/current/title-27/section-25.291), [25.292](/current/title-27/section-25.292), [25.293](/current/title-27/section-25.293), [25.294](/current/title-27/section-25.294), [25.295](/current/title-27/section-25.295), [25.296(a)](/current/title-27/section-25.296#p-25.296\(a\)), [25.300](/current/title-27/section-25.300), [25.301](/current/title-27/section-25.301).
(g) *Display, OMB control number 1512-0457.* OMB control number 1512-0457 is assigned to the following section in [27 CFR Part 25: § 25.165](/current/title-27/section-25.165).
(h) *Display, OMB control number 1512-0467.* OMB control number 1512-0467 is assigned to the following sections in [27 CFR Part 25: §§ 25.122](/current/title-27/section-25.122), [25.160](/current/title-27/section-25.160), [25.163](/current/title-27/section-25.163), [25.164](/current/title-27/section-25.164), [25.165](/current/title-27/section-25.165), [25.166](/current/title-27/section-25.166), [25.167](/current/title-27/section-25.167), [25.168](/current/title-27/section-25.168), [25.175](/current/title-27/section-25.175), [25.224](/current/title-27/section-25.224), [25.284](/current/title-27/section-25.284), [25.285](/current/title-27/section-25.285), [25.298](/current/title-27/section-25.298).
(i) *Display, OMB control number 1512-0472.* OMB control number 1512-0472 is assigned to the following sections in [27 CFR Part 25: §§ 25.111](/current/title-27/section-25.111), [25.112](/current/title-27/section-25.112), [25.113](/current/title-27/section-25.113), [25.114](/current/title-27/section-25.114), [25.117](/current/title-27/section-25.117), [25.118](/current/title-27/section-25.118), [25.119](/current/title-27/section-25.119), [25.121](/current/title-27/section-25.121), [25.126](/current/title-27/section-25.126), [25.127](/current/title-27/section-25.127), [25.131](/current/title-27/section-25.131), [25.132](/current/title-27/section-25.132), [25.133](/current/title-27/section-25.133), [25.134](/current/title-27/section-25.134).
(j) *Display, OMB control number 1512-0478.* OMB control number 1512-0478 is assigned to the following sections in [27 CFR Part 25: §§ 25.24](/current/title-27/section-25.24), [25.35](/current/title-27/section-25.35), [25.141](/current/title-27/section-25.141), [25.142](/current/title-27/section-25.142), [25.143](/current/title-27/section-25.143), [25.145](/current/title-27/section-25.145), [25.192](/current/title-27/section-25.192), [25.196](/current/title-27/section-25.196), [25.231](/current/title-27/section-25.231), [25.242](/current/title-27/section-25.242), [25.251](/current/title-27/section-25.251), [25.263](/current/title-27/section-25.263).
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986; [51 FR 10540](https://www.federalregister.gov/citation/51-FR-10540), Mar. 27, 1986; T.D. ATF-268, [53 FR 8628](https://www.federalregister.gov/citation/53-FR-8628), Mar. 16, 1988]
#### § 25.6 Delegations of the Administrator.
The regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.25, Delegation of the Administrator's Authorities in [27 CFR Part 25](/current/title-27/part-25), Beer. You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-44, [71 FR 16941](https://www.federalregister.gov/citation/71-FR-16941), Apr. 4, 2006, as amended by T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
## Subpart B—Definitions
#### § 25.11 Meaning of terms.
When used in this part, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof, terms have the meanings given in this section.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.25, Delegation of the Administrator's Authorities in [27 CFR Part 25](/current/title-27/part-25), Beer.
*Balling.* The percent by weight of dissolved solids at 60 °F. present in wort and beer, usually determined by a balling saccharometer.
*Bank.* Any commercial bank.
*Banking day.* Any day during which a bank is open to the public for carrying on substantially all its banking functions.
*Barrel.* When used as a unit of measure, the quantity equal to 31 U.S. gallons. When used as a container, a consumer package or keg containing a quantity of beer listed in [§ 25.156](/current/title-27/section-25.156), or other size authorized by the appropriate TTB officer.
*Beer.* Beer, ale, porter, stout, and other similar fermented beverages (including saké and similar products) of any name or description containing one-half of one percent or more of alcohol by volume, brewed or produced from malt, wholly or in part, or from any substitute for malt. Standards for the production of beer appear in [§ 25.15](/current/title-27/section-25.15).
*Bonded premises of a distilled spirits plant.* The bonded premises of a distilled spirits plant as described in [part 19 of this chapter](/current/title-27/part-19). This term includes premises described in the preceding sentence even if the distilled spirits plant proprietor, as authorized under the exemption set forth in [§ 19.151(d) of this chapter](/current/title-27/section-19.151#p-19.151\(d\)), has not provided a bond for the premises.
*Bonded wine premises.* Bonded wine premises established under [part 24 of this chapter](/current/title-27/part-24). This term includes premises described in the preceding sentence even if the proprietor, as authorized under the exemption set forth in [§ 24.146(d) of this chapter](/current/title-27/section-24.146#p-24.146\(d\)), has not provided a bond for the premises.
*Bonded winery.* The premises of a bonded winery as described in [part 24 of this chapter](/current/title-27/part-24). This term includes premises described in the preceding sentence even if the proprietor, as authorized under [§ 24.146(d) of this chapter](/current/title-27/section-24.146#p-24.146\(d\)), has not provided a bond for the premises.
*Bottle.* A bottle, can or similar container.
*Bottling.* The filling of bottles, cans, and similar containers.
*Brewer.* Any person who brews beer (except a person who produces only beer exempt from tax under [26 U.S.C. 5053(e)](https://www.govinfo.gov/link/uscode/26/5053)) and any person who produces beer for sale.
*Brewery.* The land and buildings described in the Brewer's Notice, Form 5130.10, where beer is to be produced and packaged.
*Brewing.* The production of beer for sale.
*Business day.* The 24-hour cycle of operations in effect at the brewery and described on the Brewer's Notice, Form 5130.10.
*Calendar quarter.* A 3-month period during the year as follows: January 1 through March 31; April 1 through June 30; July 1 through September 30; and October 1 through December 31.
*Cereal beverage.* A beverage, produced either wholly or in part from malt (or a substitute for malt), and either fermented or unfermented, which contains, when ready for consumption, less than one-half of 1 percent of alcohol by volume.
*Commercial bank.* A bank, whether or not a member of the Federal Reserve System, which has access to the Federal Reserve Communications System (FRCS) or Fedwire. The “FRCS” or “Fedwire” is a communications network that allows Federal Reserve System member banks to effect a transfer of funds for their customers (or other commercial banks) to the Treasury Account at the Federal Reserve Bank of New York.
*Concentrate.* Concentrate produced from beer by the removal of water under the provisions of [subpart R of this part](/current/title-27/part-25/subpart-R). The processes of concentration of beer and reconstitution of beer are considered authorized processes in the production of beer.
*Director of the service center.* A Director of an Internal Revenue Service Center.
*District Director.* A district director of internal revenue.
*Electronic fund transfer or EFT.* Any transfer of funds made by a brewer's commercial bank, either directly or through a correspondent banking relationship, via the Federal Reserve Communications System (FRCS) or Fedwire to the Treasury Account at the Federal Reserve Bank of New York.
*Executed under penalties of perjury.* Signed with the prescribed declaration under the penalties of perjury as provided on or with respect to the return, claim, form, or other document or, when no form of declaration is prescribed, with the declaration: “I declare under the penalties of perjury that this \_\_\_\_\_\_\_\_\_\_\_\_ (insert type of document such as statement, report, certificate, application, claim, or other document), including the documents submitted in support thereof, has been examined by me and, to the best of my knowledge and belief, is true, correct and complete.”
*Fiscal year.* The period which begins October 1 and ends on the following September 30.
*Gallon.* The liquid measure containing 231 cubic inches.
*Losses.* Known quantities of beer lost due to breakage, casualty, or other unusual cause.
*Package.* A bottle, can, keg, barrel, or other original consumer container.
*Packaging.* The filling of any package.
*Person.* An individual, trust, estate, partnership, association, company, or corporation.
*Racking.* The filling of kegs or barrels.
*Removed for consumption or sale.* Except when used with respect to beer removed without payment of tax as authorized by law,
(a) the sale and transfer of possession of beer for consumption at the brewery, or
(b) any removal of beer from the brewery.
*Secretary of the Treasury* or *Secretary.* The Secretary of the Treasury or a delegate of the Secretary.
*Service center.* An Internal Revenue Service Center in any of the Internal Revenue regions.
*Shortage.* An unaccounted for discrepancy (missing quantity) of beer disclosed by physical inventory.
*This chapter.* [Title 27, Code of Federal Regulations](/current/title-27), Chapter I ([27 CFR Chapter I](/current/title-27/chapter-I)).
*Treasury account.* The Department of the Treasury's General Account at the Federal Reserve Bank of New York.
*U.S.C.* The United States Code.
*Wort.* The product of brewing before fermentation which results in beer.
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-345, [58 FR 40357](https://www.federalregister.gov/citation/58-FR-40357), July 28, 1993; T.D. ATF-437, [66 FR 5478](https://www.federalregister.gov/citation/66-FR-5478), Jan. 19, 2001; T.D. TTB-21, [70 FR 235](https://www.federalregister.gov/citation/70-FR-235), Jan. 3, 2005; T.D. TTB-44, [71 FR 16941](https://www.federalregister.gov/citation/71-FR-16941), Apr. 4, 2006; T.D. TTB-91, [76 FR 5478](https://www.federalregister.gov/citation/76-FR-5478), Feb. 1, 2011; T.D. TTB-146, [82 FR 1126](https://www.federalregister.gov/citation/82-FR-1126), Jan. 4, 2017; T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
### Standards for Beer
#### § 25.15 Materials for the production of beer.
(a) Beer must be brewed from malt or from substitutes for malt. Only rice, grain of any kind, bran, glucose, sugar, and molasses are substitutes for malt. In addition, you may also use the following materials as adjuncts in fermenting beer: honey, fruit, fruit juice, fruit concentrate, herbs, spices, and other food materials.
(b) You may use flavors and other nonbeverage ingredients containing alcohol in producing beer. Flavors and other nonbeverage ingredients containing alcohol may contribute no more than 49% of the overall alcohol content of the finished beer. For example, a finished beer that contains 5.0% alcohol by volume must derive a minimum of 2.55% alcohol by volume from the fermentation of ingredients at the brewery and may derive not more than 2.45% alcohol by volume from the addition of flavors and other nonbeverage ingredients containing alcohol. In the case of beer with an alcohol content of more than 6% by volume, no more than 1.5% of the volume of the beer may consist of alcohol derived from added flavors and other nonbeverage ingredients containing alcohol.
\[T.D. TTB-21, [70 FR 235](https://www.federalregister.gov/citation/70-FR-235), Jan. 3, 2005]
## Subpart C—Location and Use of Brewery
#### § 25.21 Restrictions on location.
A brewery may not be established or operated in any dwelling house or on board any vessel or boat, or in any building or on any premises where the revenue will be jeopardized or the effective administration of this part will be hindered.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended ([26 U.S.C. 5402](https://www.govinfo.gov/link/uscode/26/5402)))
#### § 25.22 Continuity of brewery.
Brewery premises will be unbroken except that they may be separated by public passageways, streets, highways, waterways, carrier rights-of-way, or partitions. If the brewery premises are separated, the parts will abut on the dividing medium and be adjacent to each other. If the brewer has facilities for loading, or for case packing or storage which are located within reasonable proximity to the brewery, the appropriate TTB officer may approve these facilities as part of the brewery if the revenue will not be jeopardized.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended ([26 U.S.C. 5402](https://www.govinfo.gov/link/uscode/26/5402)))
#### § 25.23 Restrictions on use.
(a) *Use of brewery in production of beer or cereal beverage.* A brewery may be used only for the following purposes involving the production of beer or cereal beverages:
(1) For producing, packaging and storing beer, cereal beverages, vitamins, ice, malt, malt syrup, and other by-products of the brewing process, or soft drinks and other nonalcoholic beverages;
(2) For processing spent grain, carbon dioxide, and yeast; and
(3) For storing packages and supplies necessary or connected to brewery operations.
(b) *Other authorized uses.* A brewer may use a brewery for other purposes, not involving the production of beer or cereal beverage, upon approval from the appropriate TTB officer, if the purposes:
(1) Require the use of by-products or waste from the production of beer;
(2) Utilize buildings, rooms, areas, or equipment not fully employed in the production or packaging of beer;
(3) Are reasonably necessary to realize the maximum benefit from the premises and equipment and reduce the overhead of the brewery;
(4) Are in the public interest because of emergency conditions;
(5) Involve experiments or research projects related to equipment, materials, processes, products, by-products, or waste of the brewery; or
(6) Involve operation of a tavern on brewery premises in accordance with [§ 25.25](/current/title-27/section-25.25).
(c) *Application.* Except as provided in [§ 25.25](/current/title-27/section-25.25) for operation of a tavern on brewery premises, a brewer desiring to use a brewery for other purposes shall submit to the appropriate TTB officer , an application listing the purposes. The appropriate TTB officer will approve the application if the use for other purposes will not jeopardize the revenue or impede the effective administration of this part and is not contrary to specific provisions of law.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended ([26 U.S.C. 5411](https://www.govinfo.gov/link/uscode/26/5411)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-268, [53 FR 8628](https://www.federalregister.gov/citation/53-FR-8628), Mar. 16, 1988]
#### § 25.24 Storage of beer.
(a) *Taxpaid beer.* Beer of a brewer's own production on which the tax has been paid or determined may not be stored in the brewery, except as provided in [§ 25.25](/current/title-27/section-25.25) or [§ 25.213](/current/title-27/section-25.213). Beer produced by other brewers may be stored at the brewery under the following conditions:
(1) Taxpaid beer will be segregated in such a manner as to preclude mixing with nontaxpaid beer;
(2) If required by [part 1 of this chapter](/current/title-27/part-1), the brewer shall have a wholesalers or importers basic permit under the Federal Alcohol Administration Act, and keep records of the taxpaid beer as a wholesaler or importer under [part 31 of this chapter](/current/title-27/part-31).
(3) Taxpaid beer may be stored in packages;
(4) Taxpaid beer may not be relabeled;
(5) Taxpaid beer may not be shown on required brewery records; and
(6) The appropriate TTB officer may require physical segregation of taxpaid beer, or marking to show the status of taxpaid beer, if necessary to protect the revenue.
(b) *Untaxpaid beer.* Packaged beer on which tax has not been paid or determined may be stored in any suitable location in the brewery.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended ([26 U.S.C. 5411](https://www.govinfo.gov/link/uscode/26/5411)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-268, [53 FR 8628](https://www.federalregister.gov/citation/53-FR-8628), Mar. 16, 1988; T.D. TTB-25, [70 FR 19883](https://www.federalregister.gov/citation/70-FR-19883), Apr. 15, 2005; T.D. TTB-79, [74 FR 37404](https://www.federalregister.gov/citation/74-FR-37404), July 28, 2009]
#### § 25.25 Operation of a tavern on brewery premises.
(a) *General.* A brewer desiring to operate a tavern as an alternate use of brewery premises, shall submit a Brewer's Notice, Form 5130.10 containing the information required by [paragraph (b)](/current/title-27/section-25.25#p-25.25\(b\)) of this section. If the appropriate TTB officer finds that the operation of the tavern on brewery premises will not jeopardize the revenue or impede the effective administration of this part and is not contrary to specific provisions of law, the approval of the Brewer's Notice, Form 5130.10 shall constitute approval of the alternate use of brewery premises, in lieu of the application required by [§ 25.23](/current/title-27/section-25.23). As used in this section, “tavern” means a portion of brewery premises where beer is sold to consumers. Food, and/or taxpaid wine, and/or taxpaid distilled spirits may also be sold at a tavern operated on brewery premises. Taxpaid beer produced by other brewers may be received, stored and sold on brewery premises in accordance with [§ 25.24](/current/title-27/section-25.24).
(b) *Brewer's Notice.* In preparing the Brewer's Notice, Form 5130.10, the applicant shall show the following information, in addition to the information required by the form:
(1) The applicant shall identify the portion of the brewery which will be operated as a tavern by providing a diagram or narrative description of the boundaries of the tavern. The diagram or description shall identify areas of the brewery which are accessible to the public and areas which are not. The applicant shall describe security measures to be used to segregate public areas from non-public areas.
(2) The applicant shall describe in detail the method to be used for measuring beer for the purposes of tax determination.
(3) The applicant shall identify the tanks which will periodically contain tax-determined beer, and any other areas where tax-determined beer will be stored.
(c) *Procedures.* The following procedures shall apply to operation of a tavern on brewery premises:
(1) The brewery shall have a suitable method for measurement of the beer, such as a meter or gauge glass. Tax determination shall consist of the measurement of the beer and the preparation of the brewer's record of tax determination, required by [§ 25.292(a)(8)](/current/title-27/section-25.292#p-25.292\(a\)\(8\)). The taxes shall be determined prior to the time that the beer is dispensed into a container for consumption.
(2) If the brewer uses one or more tanks for tax determination, the following procedures shall apply:
(i) Each such tank shall be durably marked with the words “tax-determination tank”;
(ii) The taxes shall be determined each time beer is added to a tax-determination tank; and
(iii) The brewer may never simultaneously pump into and out of a tax-determination tank.
(3) A brewer qualified under this section may store, on brewery premises, tax-determined beer which is intended for sale at a tavern operated on brewery premises, in accordance with this section. The prohibition of [§ 25.24](/current/title-27/section-25.24) shall not apply to such tax-determined beer.
(4) Beer consumed by employees and visitors in the brewery's tavern shall be beer on which the tax has been paid or determined.
\[T.D. ATF-268, [53 FR 8628](https://www.federalregister.gov/citation/53-FR-8628), Mar. 16, 1988]
## Subpart D—Construction and Equipment
### Construction
#### § 25.31 Brewery buildings.
Brewery buildings shall be arranged and constructed to afford adequate protection to the revenue and to facilitate inspection by appropriate TTB officers.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended ([26 U.S.C. 5402](https://www.govinfo.gov/link/uscode/26/5402)))
### Equipment
#### § 25.35 Tanks.
Each stationary tank, vat, cask or other container used, or intended for use, as a receptacle for wort, beer or concentrate produced from beer shall:
(a) Be durably marked with a serial number and capacity; and
(b) Be equipped with a suitable measuring device. The brewer may provide meters or other suitable portable devices for measuring contents of tanks or containers in lieu of providing each tank or container with a measuring device.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended ([26 U.S.C. 5552](https://www.govinfo.gov/link/uscode/26/5552)))
#### § 25.36 Empty container storage.
Empty barrels, kegs, bottles, other containers, or other supplies stored in the brewery will be segregated from filled containers.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended ([26 U.S.C. 5411](https://www.govinfo.gov/link/uscode/26/5411)))
## Subpart E—Measurement of Beer
#### § 25.41 Measuring system required.
The brewer shall accurately and reliably measure the quantity of beer transferred from the brewery cellars for bottling and for racking. The brewer may use a measuring device, such as a meter or gauge glass, or any other suitable method.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended ([26 U.S.C. 5552](https://www.govinfo.gov/link/uscode/26/5552)))
#### § 25.42 Testing of measuring devices.
(a) *General requirements.* If a measuring device such as a meter or gauge glass is used to measure beer, the brewer shall periodically test the measuring device and adjust or repair it, if necessary. The brewer shall keep records of tests available for inspection by appropriate TTB officers. Records of tests will include:
(1) Date of test;
(2) Identity of meter or measuring device;
(3) Result of test; and
(4) Corrective action taken, if necessary.
(b) *Requirements for beer meters.* The allowable variation for beer meters as established by testing may not exceed ±0.5 percent. If a meter test discloses an error in excess of the allowable variation, the brewer shall immediately adjust or repair the meter. Adjustments will reduce the error to as near zero as practicable.
(c) *Authority to require tests.* If the appropriate TTB officer has reason to believe that the accuracy or reliability of a measuring device is not being properly maintained, he or she may require the brewer to test the measuring device and, if necessary, adjust or repair the measuring device.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended ([26 U.S.C. 5552](https://www.govinfo.gov/link/uscode/26/5552)))
## Subpart F—Miscellaneous Provisions
#### § 25.51 Right of Entry and Examination.
An appropriate TTB officer may enter, during normal business hours, a brewery or other place where beer is stored and may, when the premises are open at other times, enter those premises in the performance of official duties. Appropriate TTB officers may make inspections as the appropriate TTB officer deems necessary to determine that operations are conducted in compliance with the law and this part. The owner of any building or place where beer is produced, made, or kept, or person having charge over such premises, who refuses to admit an appropriate TTB officer acting under [26 U.S.C. 7606](https://www.govinfo.gov/link/uscode/26/7606), or who refuses to permit an appropriate TTB officer to examine beer must, for each refusal, forfeit \$500.
\[T.D. ATF-437, [66 FR 5478](https://www.federalregister.gov/citation/66-FR-5478), Jan. 19, 2001]
#### § 25.52 Variations from requirements.
(a) *Exceptions to construction, equipment and methods of operations* —
(1) *General.* The appropriate TTB officer may approve details of construction, equipment or methods of operations, in lieu of those specified in this part. The brewer shall show that it is impracticable to conform to the prescribed specification, and that the proposed variance:
(i) Will afford the protection to the revenue intended by the specifications in this part;
(ii) Will not hinder the effective administration of this part, and
(iii) Is not contrary to any provision of law.
(2) *Application.* A brewer who proposes to employ methods of operations or construction or equipment other than as provided in this part shall submit an application to the appropriate TTB officer. The application will describe the proposed variation and state the need for it. The brewer shall submit drawings or photographs if necessary to describe the proposed variation.
(3) *Approval by appropriate TTB officer.* The appropriate TTB officer may approve the use of an alternate method or procedure if:
(i) The brewer shows good cause for its use;
(ii) It is consistent with the purpose and effect of the procedure prescribed by this part and provides equal security to the revenue;
(iii) It is not contrary to law; and
(iv) It will not cause an increase in cost to the Government and will not hinder the effective administration of this part.
(4) *Exceptions.* The appropriate TTB officer may not authorize an alternate method or procedure relating to the giving of any bond, or to the assessment, payment, or collection of tax.
(5) *Conditions of approval.* A brewer may not employ an alternate method or procedure until the appropriate TTB officer has approved its use. The brewer shall, during the terms of the authorization of an alternate method or procedure, comply with the terms of the approved application.
(b) *Emergency variations from requirements* —
(1) *Application.* When an emergency exists, a brewer may apply to the appropriate TTB officer for a variation from the requirements of this part relating to construction, equipment, and methods of operation. The brewer shall describe the proposed variation and set forth the reasons for using it.
(2) *Approval.* The appropriate TTB officer may approve an emergency variation from requirements if:
(i) An emergency exists;
(ii) The variation from the requirements is necessary;
(iii) It will afford the same security and protection to the revenue as intended by the specific regulations;
(iv) It will not hinder the effective administration of this part; and
(v) It is not contrary to law.
(3) *Conditions of approval.* A brewer may not employ an emergency variation from the requirements until the appropriate TTB officer has approved its use. Approval of variations from requirements are conditioned upon compliance with the conditions and limitations set forth in the approval.
(c) *Automatic termination of approval.* If the brewer fails to comply in good faith with the procedures, conditions or limitations set forth in the approval, authority for the variation from requirements is automatically terminated and the brewer is required to comply with prescribed requirements of regulations.
(d) *Withdrawal of approval.* The appropriate TTB officer may withdraw approval of an alternate method or procedure, approved under [paragraph (a)](/current/title-27/section-25.52#p-25.52\(a\)) or [(b)](/current/title-27/section-25.52#p-25.52\(b\)) of this section, if the appropriate TTB officer finds that the revenue is jeopardized or the effective administration of this part is hindered by the approval.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended, 1396, as amended ([26 U.S.C. 5552](https://www.govinfo.gov/link/uscode/26/5552), [5556](https://www.govinfo.gov/link/uscode/26/5556)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-437, [66 FR 5479](https://www.federalregister.gov/citation/66-FR-5479), Jan. 19, 2001]
### Samples
#### Source:
Sections 25.53 and 25.55 through 25.58 appear at [70 FR 235](https://www.federalregister.gov/citation/70-FR-235), Jan. 3, 2005, unless otherwise noted.
#### § 25.53 Submissions of samples of fermented products.
The appropriate TTB officer may, at any time, require you to submit samples of:
(a) Cereal beverage, saké, or any fermented product produced at the brewery,
(b) Materials used in the production of cereal beverage, saké, or any fermented product; and
(c) Cereal beverage, saké, or any fermented product, in conjunction with the filing of a formula.
([26 U.S.C. 5415](https://www.govinfo.gov/link/uscode/26/5415), [5555](https://www.govinfo.gov/link/uscode/26/5555), [7805(a)](https://www.govinfo.gov/link/uscode/26/7805))
### Formulas
#### § 25.55 Formulas for fermented products.
(a) *For what fermented products must a formula be filed?* You must file a formula for approval by TTB if you intend to produce:
(1) Any fermented product that will be treated by any processing, filtration, or other method of manufacture that is not generally recognized as a traditional process in the production of a fermented beverage designated as “beer,” “ale,” “porter,” “stout,” “lager,” or “malt liquor.” For purposes of this paragraph:
(i) Removal of any volume of water from beer, filtration of beer to substantially change the color, flavor, or character, separation of beer into different components, reverse osmosis, concentration of beer, and ion exchange treatments are examples of non-traditional processes for which you must file a formula.
(ii) Pasteurization, filtration prior to bottling, filtration in lieu of pasteurization, centrifuging for clarity, lagering, carbonation, and blending are examples of traditional processes for which you do not need to file a formula.
(iii) If you have questions about whether or not use of a particular process not listed in this section requires the filing of a formula, you may request a determination from TTB in accordance with [paragraph (f)](/current/title-27/section-25.55#p-25.55\(f\)) of this section.
(2) Any fermented product to which flavors or other nonbeverage ingredients (other than hop extract) containing alcohol will be added.
(3) Subject to [paragraph (f)](/current/title-27/section-25.55#p-25.55\(f\)) of this section, any fermented product to which coloring or natural or artificial flavors will be added.
(4) Subject to [paragraph (f)](/current/title-27/section-25.55#p-25.55\(f\)) of this section, any fermented product to which fruit, fruit juice, fruit concentrate, herbs, spices, honey, maple syrup, or other food materials will be added.
(5) Saké, including flavored saké and sparkling saké.
(b) *Are separate formulas required for different products?*
(1) You must file a separate formula for approval for each different fermented product for which a formula is required.
(2) You may file a formula for a beer base to be used in the production of one or more other fermented products. The beer base must conform to the standards set forth in [§ 25.15](/current/title-27/section-25.15).
(c) *When must I file a formula?*
(1) Except as provided in [paragraph (c)(2)](/current/title-27/section-25.55#p-25.55\(c\)\(2\)) of this section, you may not produce a fermented product for which a formula is required until you have filed and received approval of a formula for that product.
(2) You may, for research and development purposes (including consumer taste testing), produce a fermented product without an approved formula, but you may not sell or market this product until you receive approval of the formula for it.
(d) *How long is my formula approval valid?* Your formula approved under this section remains in effect until: you supersede it with a new formula; you voluntarily surrender the formula; TTB cancels or revokes the formula; or the formula is revoked by operation of law or regulation.
(e) *Are my previously approved statements of process valid?* Your statements of process approved before January 3, 2006 are considered approved formulas under this section, provided that any finished product that could be made under the statement of process would be in compliance with the provisions of this part. You do not need to submit a formula for approval if a statement of process that remains valid covers the product.
(f) *Determinations by TTB regarding specific processes and ingredients.*
(1) The appropriate TTB officer may determine whether or not use of a process not listed in [paragraph (a)(1)](/current/title-27/section-25.55#p-25.55\(a\)\(1\)) of this section requires you to file a formula for approval. The appropriate TTB officer may also exempt the use of a particular coloring, flavoring, or food material from the formula filing requirement of paragraph (a)(3) or [paragraph (a)(4)](/current/title-27/section-25.55#p-25.55\(a\)\(4\)) of this section upon a finding that the coloring, flavoring, or food material in question is generally recognized as a traditional ingredient in the production of a fermented beverage designated as “beer,” “ale,” “porter,” “stout,” “lager,” or “malt liquor.”
(2) You may request a determination from TTB on whether or not the use of a process not listed in [paragraph (a)(1)](/current/title-27/section-25.55#p-25.55\(a\)\(1\)) of this section will require the filing of a formula or whether the use of a particular coloring, flavoring, or food material may be exempted from the formula filing requirement of paragraph (a)(3) or [paragraph (a)(4)](/current/title-27/section-25.55#p-25.55\(a\)\(4\)) of this section. You should mail your request to the Assistant Director, Alcohol Labeling and Formulation Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW, Box 12, Washington, DC 20005.
(i) When requesting a determination as to whether a process is subject to the formula filing and approval requirement, the request must include:
(A) A detailed description of the proposed process;
(B) Evidence establishing that the proposed process is generally recognized as a traditional process in the production of a fermented beverage designated as “beer,” “ale,” “porter,” “stout,” “lager,” or “malt liquor”; and
(C) An explanation of the effect of the proposed process on the production of a fermented product.
(ii) When requesting an exemption from the formula filing requirement in paragraph (a)(3) or [paragraph (a)(4)](/current/title-27/section-25.55#p-25.55\(a\)\(4\)) of this section regarding coloring, flavoring, or food material ingredients, the request must include the following information:
(A) A description of the proposed ingredient;
(B) Evidence establishing that the proposed ingredient is generally recognized as a traditional ingredient in the production of a fermented beverage designated as “beer,” “ale,” “porter,” “stout,” “lager,” or “malt liquor”; and
(C) An explanation of the effect of the proposed ingredient in the production of a fermented product.
\[[70 FR 235](https://www.federalregister.gov/citation/70-FR-235), Jan. 3, 2005, as amended by T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 62, 2024]
#### § 25.56 Filing of formulas.
(a) *What are the general requirements for filing a formula?*
(1) You must file your formula in writing. Your formula must identify each brewery where the formula applies by including each brewery name, address, and registry number.
(2) You must serially number each formula, commencing with “1” and continuing in numerical sequence.
(3) You must date and sign each formula.
(4) You must file two copies of each formula with TTB.
(b) *Where do I file a formula?* File your formula with the Assistant Director, Alcohol Labeling and Formulation Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW, Box 12, Washington, DC 20005.
\[[70 FR 235](https://www.federalregister.gov/citation/70-FR-235), Jan. 3, 2005, as amended by T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 25.57 Formula information.
(a) *Ingredient information.*
(1) For each formula you must list each separate ingredient and the specific quantity used, or a range of quantities used. You may include optional ingredients in a formula if they do not impact the labeling or identity of the finished product.
(2) For fermented products containing flavorings you must list for each formula: The name of the flavor; the product number or TTB drawback number and approval date of the flavor; the name and location (city and State) of the flavor manufacturer; the alcohol content of the flavor; and the point of production at which the flavor was added (that is, before, during, or after fermentation).
(3) For formulas that include the use of flavors and other nonbeverage ingredients containing alcohol, you must explicitly indicate:
(i) The volume and alcohol content of the beer base;
(ii) The maximum volumes of the flavors and other nonbeverage ingredients containing alcohol to be used;
(iii) The alcoholic strength of the flavors and other nonbeverage ingredients containing alcohol;
(iv) The overall alcohol contribution to the finished product provided by the addition of any flavors or other nonbeverage ingredients containing alcohol. You are not required to list the alcohol contribution of individual flavors and other nonbeverage ingredients containing alcohol. You may state the total alcohol contribution from these ingredients to the finished product; and
(v) The final volume and alcohol content of the finished product.
(b) *Process information.* For each formula you must describe in detail each process used to produce a fermented beverage.
(c) *Alcohol content.* For each formula you must state the alcohol content of the fermented product after fermentation and the alcohol content of the finished product.
(d) *Beer base formulas.* You must refer in your formula to any approved formula number that covers the production of any beer base used in producing the formula product. If the beer base was produced by another brewery of the same ownership, you must also provide the name and address or name and registry number of that brewery.
(e) *Additional information.* The appropriate TTB officer may at any time require you to file additional information concerning a fermented product, ingredients, or processes, in order to determine whether a formula should be approved or disapproved or whether the approval of a formula should be continued.
([26 U.S.C. 5415](https://www.govinfo.gov/link/uscode/26/5415), [5555](https://www.govinfo.gov/link/uscode/26/5555), [7805(a)](https://www.govinfo.gov/link/uscode/26/7805))
#### § 25.58 New and superseding formulas.
(a) *New formulas.* Except as otherwise provided in [paragraph (b)](/current/title-27/section-25.58#p-25.58\(b\)) of this section, you must file a new formula (with a new formula number) for approval by TTB if you—
(1) Create an entirely new fermented product that requires a formula;
(2) Add new ingredients to an existing formulation;
(3) Delete ingredients from an existing formulation;
(4) Change the quantity of an ingredient used from the quantity or range of usage in an approved formula;
(5) Change an approved processing, filtration, or other special method of manufacture that requires the filing of a formula; or
(6) Change the contribution of alcohol from flavors or ingredients that contain alcohol.
(b) *Superseding formulas.* You may file a superseding formula, instead of a new formula, if you have made any change listed in [paragraphs (a)(2)](/current/title-27/section-25.58#p-25.58\(a\)\(2\)) through [(a)(6)](/current/title-27/section-25.58#p-25.58\(a\)\(6\)) of this section and that change is not of a type that would require a holder of a certificate of label approval to file a new application for label approval on TTB Form 5100.31.
(1) A superseding formula replaces an existing formula, and you should file one only if you do not intend to use the existing formula any more. A superseding formula must be filed with TTB for approval. When TTB approves a superseding formula, TTB will cancel your previous formula.
(2) You may use the same formula number for a superseding formula that you used for the formula the superseding formula replaces, but you must annotate the formula number to indicate it is a superseding formula number. (For example, “Formula 2, superseding.”)
(c) When you file a new or superseding formula with TTB, you must follow the procedures and other requirements of [§§ 25.56](/current/title-27/section-25.56) and [25.57](/current/title-27/section-25.57).
## Subpart G—Qualification of a Brewery
### Original Qualification
#### § 25.61 General requirements for notice.
(a) *Establishment.* Operations as a brewer may be conducted only by a person who has given notice as a brewer under this subpart. A person may not commence the business of a brewer until the appropriate TTB officer approves the brewery and the brewer's notice, including all documents made part of that notice.
(b) *Brewer's Notice, Form 5130.10.* Each person must, before commencing business as a brewer, give notice on Form 5130.10. Each person continuing business as a brewer as provided in [§ 25.71](/current/title-27/section-25.71) must give notice on Form 5130.10. Each notice will be executed under penalties of perjury, and all written statements, affidavits, and other documents submitted in support of the notice will be made part of the notice.
(c) *Additional information.* The appropriate TTB officer may at any time require the brewer to furnish, as part of the notice, additional information which is necessary to protect and insure collection of the revenue.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-437, [66 FR 5479](https://www.federalregister.gov/citation/66-FR-5479), Jan. 19, 2001]
#### § 25.62 Data for notice.
(a) *Required information.* The brewer shall prepare the notice on Form 5130.10 and shall include the following information:
(1) Serial number.
(2) Purpose for which filed.
(3) Name and principal business address of the brewer and the location of the brewery if different from the business address.
(4) Statement of the type of business organization and of the persons interested in the business, supported by the information listed in [§ 25.66](/current/title-27/section-25.66).
(5) Description of brewery, as specified in [§ 25.68](/current/title-27/section-25.68).
(6) A list of trade names which the brewer intends to use in doing business or in packaging beer.
(7) \[Reserved]
(8) The name and address of the owner of the land or buildings comprising the brewery, and of any mortgagee or other encumbrancer of the land or buildings comprising the brewery.
(9) The 24-hour cycle of operations at the brewery which is to be the brewer's business day.
(10) The process by which the brewer intends to render beer unfit for beverage use when beer is to be removed for use in manufacturing under [§§ 25.191-25.192](/current/title-27/section-25.191).
(11) Statement showing ownership or controlling interests in other breweries which will establish eligibility for the transfer of beer without payment of tax between breweries of the same ownership, as authorized in [§ 25.181](/current/title-27/section-25.181).
(12) The date of the notice and the name and signature of the brewer or person authorized to sign on behalf of the brewer.
(13) A statement whether the brewer is required to furnish a bond under [§ 25.91](/current/title-27/section-25.91).
(b) *Incorporation by reference.* If any of the information required by [paragraph (a)(4)](/current/title-27/section-25.62#p-25.62\(a\)\(4\)) of this section is on file with a TTB office in connection with the qualification of any other premises operated by the brewer, that information, if accurate and complete, may be incorporated into the brewer's notice by reference.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. TTB-21, [70 FR 237](https://www.federalregister.gov/citation/70-FR-237), Jan. 3, 2005; T.D. TTB-91, [76 FR 5478](https://www.federalregister.gov/citation/76-FR-5478), Feb. 1, 2011; T.D. TTB-146, [82 FR 1127](https://www.federalregister.gov/citation/82-FR-1127), Jan. 4, 2017]
#### § 25.63 Notice of registration.
The Brewer's Notice, Form 5130.10, when approved by the appropriate TTB officer, will constitute the notice of registration of the brewery. The appropriate TTB officer will not approve the notice until the notice and all incorporated documents are complete, accurate, and in compliance with the requirements of this part. A person may not operate a brewery until the notice required by this subpart has been approved by the appropriate TTB officer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401)))
#### § 25.64 Maintenance of notice file.
The brewer shall maintain the approved Brewer's Notice, Form 5130.10, and all incorporated documents at the brewery premises, in complete and current condition, readily available for inspection by an appropriate TTB officer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401)))
#### § 25.65 Power of attorney.
The brewer shall execute and file a Form 1534 (5000.8) for each person authorized to sign or act on behalf of the brewer. The Form 1534 (5000.8) is not required for persons whose authority is furnished in the Brewer's Notice, Form 5130.10.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401)))
#### § 25.66 Organizational documents.
The supporting information required by [paragraph (a)(4) of § 25.62](/current/title-27/section-25.62#p-25.62\(a\)\(4\)) includes, as applicable, the following:
(a) *Corporate documents.*
(1) Corporate charter or a certificate of corporate existence or incorporation;
(2) List of directors and officers, showing their names and addresses;
(3) Extracts or digests of minutes of meetings of board of directors, authorizing certain individuals to sign for the corporation; and
(4) Statement showing the number of shares of stock or other evidence of ownership, authorized and outstanding, and the voting rights of the respective owners or holders.
(b) *Articles of partnership.* Copy of the articles of partnership or association, if any, or certificate of partnership or association if required to be filed by any State, county, or municipality.
(c) *Statement of interest.*
(1) Names and addresses of all persons having 10 percent or more stock in the corporation, or other legal entity, and the nature and amount of the stockholding or other interest of each, whether the interest appears in the name of the interested party or in the name of another person. If a corporation is wholly owned or controlled by another corporation, those persons of the parent corporation who meet the above standards are considered to be the persons interested in the business of the subsidiary, and the names thereof need be furnished only upon request of the appropriate TTB officer; or
(2) In the case of an individual owner or partnership, the name and address of each person holding an interest in the brewery, whether the interest appears in the name of the interested party or in the name of another for that person.
(d) *Availability of additional corporate documents.* The originals of documents required to be submitted under this section, and additional documents such as the articles of incorporation, bylaws, and State certificates authorizing the brewer to operate in the State where located (if other than the State in which the brewery is incorporated) shall be made available to any appropriate TTB officer upon request. In the case of multiplant brewers, these documents may be made available at the brewer's home brewery. Each brewer's notice filed by multiplant brewers will state the location where these corporate documents may be inspected.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401)))
#### § 25.67 \[Reserved]
#### § 25.68 Description of brewery.
(a) The Brewer's Notice, Form 5130.10, will include a description of
(1) each tract of land comprising the brewery, and
(2) a listing of each brewery building by its designated letter or number, giving the approximate ground dimensions and the purpose for which ordinarily used.
(b) The description of the land will be in sufficient detail to enable appropriate TTB officers to determine the boundaries of the brewery.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401)))
### Changes After Original Qualification
#### § 25.71 Amended or superseding notices.
(a) *Requirement for amended notice.*
(1) When there is a change with respect to the information shown in the Brewer's Notice, Form 5130.10, the brewer shall within 30 days of the change (except as otherwise provided in this subpart) submit an amended notice setting forth the new information. Changed notices will be submitted in skeleton form, with unchanged items marked “No change since Form 5130.10, Serial No. \_\_\_\_\_\_.”
(2) The appropriate TTB officer may require immediate filing of an amended Form 5130.10 if the accuracy of existing documents has been affected by any change.
(b) *Requirement for superseding notice.*
(1) The appropriate TTB officer may require a brewer to file a new and complete notice, superseding those previously filed, in conjunction with the filing of a new bond. This superseding notice will become effective on the date of the brewer's bond or on the date of the brewer's bond continuation certificate.
(2) If the information required by [§ 25.62(a) (4)](/current/title-27/section-25.62#p-25.62\(a\)\(4\)), [(5)](/current/title-27/section-25.62#p-25.62\(a\)\(5\)), [(6)](/current/title-27/section-25.62#p-25.62\(a\)\(6\)), [(7)](/current/title-27/section-25.62#p-25.62\(a\)\(7\)), [(9)](/current/title-27/section-25.62#p-25.62\(a\)\(9\)), and [(10)](/current/title-27/section-25.62#p-25.62\(a\)\(10\)) is on file as part of an approved Form 5130.10 and is current, the brewer may incorporate by reference those documents as part of any superseding notice.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401)))
#### § 25.72 Change in proprietorship.
(a) *General.* If there is a change in the proprietorship of a brewery, the outgoing brewer shall comply with the requirements of [§ 25.85](/current/title-27/section-25.85). The successor brewer shall, before beginning operations, qualify in the same manner as the proprietor of a new brewery. The successor brewer shall file a new notice and bond in his or her own name, except that the successor brewer is not required to file a bond if the brewer is exempt from bond requirements under [§ 25.91(e)](/current/title-27/section-25.91#p-25.91\(e\)). Beer on hand may be transferred without payment of tax to the successor brewer and will be accounted for by that brewer.
(b) *Fiduciary.*
(1) If the successor to the brewer is an administrator, executor, receiver, trustee, assignee or other fiduciary, the fiduciary may in lieu of filing a new notice and bond, file an amended notice and furnish a consent of surety extending the terms of the predecessor's bond or continuation certificate. A fiduciary is not required to furnish a consent of surety under this paragraph if the brewer is exempt from bond requirements under [§ 25.91(e)](/current/title-27/section-25.91#p-25.91\(e\)).
(2) The fiduciary shall furnish the appropriate TTB officer a certified copy of the court order or other document showing qualification as fiduciary. The effective date of the qualifying documents filed by a fiduciary will be the same as the date of the order, or the date therein specified for the fiduciary to assume control. If the fiduciary was not appointed by the court, the date of the appointment will be the effective date of the qualifying documents filed by the fiduciary.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. TTB-146, [82 FR 1127](https://www.federalregister.gov/citation/82-FR-1127), Jan. 4, 2017]
#### § 25.73 Change in partnership.
(a) *New notice required.* The withdrawal of one or more members of a partnership or the taking in of a new partner, whether active or silent, constitutes a change in proprietorship. Unless exempted by [paragraph (b)](/current/title-27/section-25.73#p-25.73\(b\)) of this section, the death, bankruptcy or adjudicated insolvency of one or more partners results in a dissolution of the partnership and a change in proprietorship. The successor shall qualify the brewery in the same manner as the proprietor of a new brewery.
(b) *Continuing partnership.* A surviving partner or partners may continue to operate the brewery for purposes of liquidation and settlement under the following conditions:
(1) Under the laws of the State where the partnership was formed, the partnership is not terminated on death or insolvency of a partner(s); and
(2) Under the laws of the State where the partnership was formed, the surviving partner(s) has the exclusive right to control and possession of the partnership assets for the purpose of liquidation and settlement; and
(3) If the brewer has filed a bond, a consent of surety is filed in which the surety and the surviving partner(s) agree to remain liable on the bond.
(c) *Settlement of partnership.* If the surviving partner(s) acquires the business on completion of the settlement of the partnership, that partner(s) must qualify in his or her own name from the date of acquisition. The partner(s) must give a new brewer's notice on Form 5130.10 and a new bond on Form 5130.22, except that the partner(s) is not required to file a bond if the brewer is exempt from bond requirements under [§ 25.91(e)](/current/title-27/section-25.91#p-25.91\(e\)).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986; [51 FR 10540](https://www.federalregister.gov/citation/51-FR-10540), Mar. 27, 1986; T.D. TTB-146, [82 FR 1127](https://www.federalregister.gov/citation/82-FR-1127), Jan. 4, 2017]
#### § 25.74 Change in stockholders.
Changes in the list of stockholders furnished under the provisions of [§ 25.66(c)(1)](/current/title-27/section-25.66#p-25.66\(c\)\(1\)) shall be submitted annually by the brewer on July 1 or on any other date approved by the appropriate TTB officer. When the sale or transfer of capital stock results in a change in the control or management of the business, notification of the change will be made within 30 days in accordance with [§ 25.71](/current/title-27/section-25.71).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401)))
#### § 25.75 Change in officers and directors.
When there is any change in the list of officers or directors furnished under the provisions of [§ 25.66(a)(4)](/current/title-27/section-25.66#p-25.66\(a\)\(4\)), the brewer shall submit, within 30 days of the change, an amended notice on Form 5130.10. If the brewer has shown to the satisfaction of the appropriate TTB officer that certain corporate officers listed on the original notice have no responsibilities in connection with the operations covered by the notice, the appropriate TTB officer may waive the requirements for submitting applications for amended notice to cover changes of those corporate officers. In the case of multiplant brewers, new brewers notices need not be filed for those breweries in which the lists of officers and directors are incorporated by reference in their brewer's notices under [§ 25.62(b)](/current/title-27/section-25.62#p-25.62\(b\)).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401)))
#### § 25.76 \[Reserved]
#### § 25.77 Change in location.
When there is a change in location of the brewery, the brewer shall file an amended form TTB F 5130.10, and also shall file a new bond on form TTB F 5130.22 as required under [§ 25.91](/current/title-27/section-25.91) or a consent of surety on form TTB F 5000.18 as required under [§ 25.92](/current/title-27/section-25.92), extending the terms of an existing bond or continuation certificate to cover operations at the new location. The brewer is not required to file a new bond or consent of surety if the brewer is exempt from bond requirements under [§ 25.91(e)](/current/title-27/section-25.91#p-25.91\(e\)).
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. TTB-146, [82 FR 1127](https://www.federalregister.gov/citation/82-FR-1127), Jan. 4, 2017; T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 25.78 Change in premises.
Except as authorized in [§ 25.81](/current/title-27/section-25.81), when the brewery is to be extended or curtailed, the brewer shall file an amended Form 5130.10. The additional facilities covered by the extension may not be used for the proposed purposes, and the portion to be curtailed may not be used for other than the previously approved purposes, prior to approval of Form 5130.10.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401)))
#### § 25.79 Change in bond status.
A brewer must file an amended Brewer's Notice, Form 5130.10, if the brewer's bond status changes because either:
(a) A brewer has not furnished any bond and has become required to furnish a bond as provided under [§ 25.95(b)](/current/title-27/section-25.95#p-25.95\(b\)); or
(b) A brewer has furnished a bond, has become exempt from bond requirements under [§ 25.91(e)](/current/title-27/section-25.91#p-25.91\(e\)), and chooses to terminate all bond coverage as provided under [§ 25.106](/current/title-27/section-25.106).
\[T.D. TTB-146, [82 FR 1127](https://www.federalregister.gov/citation/82-FR-1127), Jan. 4, 2017]
### Alternation of Operations
#### § 25.81 Alternation of brewery and bonded or taxpaid wine premises.
(a) *General.* A brewer operating a contiguous bonded winery or taxpaid wine bottling house may, as provided in this section, alternate the use of each premises by extension or curtailment.
(b) *Qualifying documents.* The brewer shall file and receive approval of the following qualifying documents:
(1) Form 5120.25 and Form 5130.10 to cover the curtailment and extension of the premises to be alternated.
(2) Special diagrams, in duplicate, delineating the brewery premises and the bonded or taxpaid wine premises as they will exist both during extension and curtailment. The diagrams will clearly depict all areas, buildings, floors, rooms, equipment and pipelines which are to be subject to alternation in their relative operating sequence.
(3) Evidence of existing bond, consent of surety, continuation certificate, or a new bond to cover the proposed alternation of premises, except to the extent no bond is required under [§ 24.146 of this chapter](/current/title-27/section-24.146) or [§ 25.91(e)](/current/title-27/section-25.91#p-25.91\(e\)).
(c) *Brewer's responsibility.* After approval of qualifying documents, the brewer may alternate the designated premises pursuant to a letterhead notice submitted to the appropriate TTB officer. The notice will contain the information required by [paragraph (d)](/current/title-27/section-25.81#p-25.81\(d\)) of this section. Prior to the effective date and hour of the alternation, the brewer shall
(1) Remove all beer on brewery premises to be alternated to bonded or taxpaid wine premises, or
(2) Remove all wine from bonded to taxpaid wine premises to be alternated to brewery premises.
(d) *Information for notice.* The notice required by [paragraph (c)](/current/title-27/section-25.81#p-25.81\(c\)) of this section will contain the following information:
(1) Plant name and address;
(2) Serial number;
(3) Effective date and hour of proposed change;
(4) Whether premises are to be curtailed or extended;
(5) Purpose of curtailment or extension;
(6) Identification of the special diagram depicting the premises as they exist when curtailed or extended; and
(7) Date of execution and signature of brewer.
(e) *Separation of premises.* The appropriate TTB officer may require that the portion of brewery or bonded or taxpaid wine premises extended or curtailed under this section be separated, in a manner satisfactory to the appropriate TTB officer, from the remaining portion of the brewery or bonded or taxpaid premises.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended, 1389, as amended, 1390, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401), [5411](https://www.govinfo.gov/link/uscode/26/5411), [5415](https://www.govinfo.gov/link/uscode/26/5415)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986; [51 FR 9190](https://www.federalregister.gov/citation/51-FR-9190), Mar. 18, 1986, as amended by T.D. ATF-299, [55 FR 24989](https://www.federalregister.gov/citation/55-FR-24989), June 19, 1990; T.D. TTB-146, [82 FR 1127](https://www.federalregister.gov/citation/82-FR-1127), Jan. 4, 2017]
### Discontinuance of Business
#### § 25.85 Notice of permanent discontinuance.
When a brewer desires to discontinue business permanently, he or she must file a notice on Form 5130.10. The brewer must state the purpose of the notice as “Discontinuance of business” and give the date of the discontinuance. When all beer has been lawfully disposed of, appropriate TTB officer will approve the Form 5130.10 and return a copy to the brewer. The brewer shall file a report on Form 5130.9 showing no beer or cereal beverage on hand and marked “Final Report.”
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-437, [66 FR 5479](https://www.federalregister.gov/citation/66-FR-5479), Jan. 19, 2001]
## Subpart H—Bonds and Consents of Surety
#### § 25.91 Requirement for bond.
(a) *General.* Except as provided in [paragraph (e)](/current/title-27/section-25.91#p-25.91\(e\)) of this section, every person intending to commence the business of a brewer shall file a bond, Form 5130.22, as prescribed in this subpart, covering operations at the brewery, at the time of filing the original Brewer's Notice, Form 5130.10. Every brewer intending to continue the business of a brewer shall, once every 4 years, or as provided in [§ 25.95](/current/title-27/section-25.95), execute and file a new bond, or continuation certificate as provided in [§ 25.97](/current/title-27/section-25.97).
(b) *Conditions of the bond.* The Brewer's Bond, Form 5130.22, will be conditioned upon the brewer faithfully complying with all provisions of law and regulations relating to the activities covered by the bond, and upon paying all taxes imposed by [26 U.S.C. Chapter 51](https://www.govinfo.gov/link/uscode/26/5101) and all interest and penalties incurred or fines imposed for violations of those provisions.
(c) *Additional information.* The appropriate TTB officer shall require, in connection with any brewer's bond, a statement executed under the penalties of perjury, as to whether the principal or any person owning, controlling, or actively participating in the management of the business of the principal has been convicted of or has compromised any offense set forth in [§ 25.101(a)(1)](/current/title-27/section-25.101#p-25.101\(a\)\(1\)), or has been convicted of any offense set forth in [§ 25.101(a)(2)](/current/title-27/section-25.101#p-25.101\(a\)\(2\)). In the event the above statement contains an affirmative answer, the applicant shall submit a statement describing in detail the circumstances surrounding the conviction or compromise.
(d) *Bond required before beginning business.* A person may not begin business or continue business as a brewer until first receiving notice that the appropriate TTB officer has approved the bond, continuation certificate, or consent of surety, as required by this part.
(e) *Bond exemption.* A brewer who pays tax on a deferred basis under [§ 25.164](/current/title-27/section-25.164) is not required to provide a bond to cover operations and withdrawals of beer during any portion of a calendar year for which the brewer is eligible to use an annual or quarterly return period under [§ 25.164(c)(2)](/current/title-27/section-25.164#p-25.164\(c\)\(2\)) or [(c)(3)](/current/title-27/section-25.164#p-25.164\(c\)\(3\)). A brewer is considered to be paying tax on a deferred basis for purposes of the preceding sentence even if the brewer does not pay tax during every return period as long as the brewer intends to pay tax in a future period. See [§§ 25.62](/current/title-27/section-25.62) and [25.79](/current/title-27/section-25.79) for rules governing applying for this bond exemption. See [§ 25.95](/current/title-27/section-25.95) for rules governing when an existing brewer who has not provided a bond under this paragraph must obtain bond coverage.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401)); sec. 4(a), Pub. L. 91-673, 84 Stat. 2057 ([26 U.S.C. 5417](https://www.govinfo.gov/link/uscode/26/5417)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-437, [66 FR 5479](https://www.federalregister.gov/citation/66-FR-5479), Jan. 19, 2001; T.D. TTB-146, [82 FR 1127](https://www.federalregister.gov/citation/82-FR-1127), Jan. 4, 2017]
#### § 25.92 Consent of surety.
A brewer may change the terms of any bond filed under this part by filing a consent of surety. Consents of surety will be executed on Form 5000.18 by the brewer and the surety on the bond, with the same formality and proof of authorization as required for the execution of a bond.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. TTB-146, [82 FR 1127](https://www.federalregister.gov/citation/82-FR-1127), Jan. 4, 2017]
#### § 25.93 Penal sum of bond.
(a) *General.* Except as provided in [paragraph (a)(3)](/current/title-27/section-25.93#p-25.93\(a\)\(3\)) of this section, a brewer must furnish a bond of a penal sum as prescribed in this section.
(1) *Brewers who pay taxes using semimonthly periods.* In the case of a brewer who pays taxes using semimonthly return periods under [§ 25.164(c)(1)](/current/title-27/section-25.164#p-25.164\(c\)\(1\)), the penal sum of the brewers bond must be equal to 10 percent of the maximum amount of tax calculated at the rates prescribed by law which the brewer will become liable to pay during a calendar year during the period of the bond on beer:
(i) Removed for transfer to the brewery from other breweries owned by the same brewer;
(ii) Removed without payment of tax for export or for use as supplies on vessels and aircraft;
(iii) Removed without payment of tax for use in research, development, or testing; and
(iv) Removed for consumption or sale.
(2) *Brewers who pay taxes using quarterly or annual return periods.* In the case of a brewer who pays taxes using annual or quarterly return periods under [§ 25.164(c)(2)](/current/title-27/section-25.164#p-25.164\(c\)\(2\)) or [(c)(3)](/current/title-27/section-25.164#p-25.164\(c\)\(3\)), the penal sum of the brewers bond is \$1,000 and covers the beer described in paragraph (a)(1)(i)-(iv) of this section.
(3) *Brewers who are exempt from bond requirements.* This section does not apply to a brewer who is exempt from bond requirements under [§ 25.91(e)](/current/title-27/section-25.91#p-25.91\(e\)).
(b) *Concentrate.* A brewer who concentrates beer under [subpart R of this part](/current/title-27/part-25/subpart-R) shall calculate the penal sum of the bond by computing 10 percent of the amount of tax at the rates prescribed by law, on the maximum quantity of beer used in the production of concentrate during a calendar year. The brewer shall add this amount to the penal sum calculated under [paragraph (a)](/current/title-27/section-25.93#p-25.93\(a\)) of this section to determine the total penal sum of the brewer's bond.
(c) *Maximum and minimum penal sums.* The maximum penal sum of the bond (or total penal sum if original and strengthening bonds are filed) is not to exceed $150,000 when the tax on beer is to be prepaid, or $500,000 when the tax is to be deferred as provided in [§ 25.164](/current/title-27/section-25.164). The minimum penal sum of a bond is \$1,000.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. TTB-41, [71 FR 5603](https://www.federalregister.gov/citation/71-FR-5603), Feb. 2, 2006; T.D. TTB-89, [76 FR 3511](https://www.federalregister.gov/citation/76-FR-3511), Jan. 20, 2011; T.D. TTB-94, [76 FR 52862](https://www.federalregister.gov/citation/76-FR-52862), Aug. 24, 2011; T.D. TTB-109, [77 FR 72941](https://www.federalregister.gov/citation/77-FR-72941), Dec. 7, 2012; T.D. TTB-123, [79 FR 58679](https://www.federalregister.gov/citation/79-FR-58679), Sept. 30, 2014; T.D. TTB-146, [82 FR 1127](https://www.federalregister.gov/citation/82-FR-1127), Jan. 4, 2017]
#### § 25.94 Strengthening bonds.
(a) *Requirement.* When the penal sum of the brewer's bond (calculated as provided in [§ 25.93](/current/title-27/section-25.93)) in effect is not sufficient, the principal may prepay the tax on beer as provided in [subpart K of this part](/current/title-27/part-25/subpart-K), or give a strengthening bond in sufficient penal sum if the surety is the same as on the bond in effect. If the surety is not the same, a new bond covering the entire liability is required.
(b) *Restrictions.* A strengthening bond may not in any way release a former bond or limit a bond to less than the full penal sum.
(c) *Date of execution.* Strengthening bonds will show the current date of execution and their effective date.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401)))
#### § 25.95 Superseding bonds and new bonds for existing brewers.
(a) *Superseding bonds.* The appropriate TTB officer may at any time, at his or her discretion, require a new bond that supersedes the existing bond. A superseding bond is required immediately in the case of insolvency of a surety. Executors, administrators, assignees, receivers, trustees, or other persons acting in a fiduciary capacity must execute a superseding bond or obtain a consent of surety on all bonds in effect. When the interests of the Government so demand, or in any case when the security of the bond becomes impaired for any reason, the principal will be required to give a superseding bond. When a bond is found to be not acceptable by the appropriate TTB officer, the principal will be required immediately to obtain a satisfactory superseding bond or discontinue business.
(b) *New bonds for existing brewers* —
(1) *General.* Subject to [paragraph (b)(2)](/current/title-27/section-25.95#p-25.95\(b\)\(2\)) of this section, if an existing brewer has not furnished a bond covering operations and withdrawals of beer because the brewer was exempt from bond requirements under [§ 25.91(e)](/current/title-27/section-25.91#p-25.91\(e\)), the brewer must furnish a bond as provided in this subpart beginning in any portion of a calendar year following the first date on which the aggregate amount of tax due from the brewer during the calendar year exceeds \$50,000. When furnishing the bond, the brewer must also file an amended Brewer's Notice, Form 5130.10, as provided in [§ 25.79](/current/title-27/section-25.79) to change the brewer's bond status.
(2) *Grace period for new bonds for existing brewers* —
(i) *Bonds covering operations.* Except as provided in [paragraph (b)(2)(ii)](/current/title-27/section-25.95#p-25.95\(b\)\(2\)\(ii\)) of this section, an existing brewer who must furnish a bond as provided in [paragraph (b)(1)](/current/title-27/section-25.95#p-25.95\(b\)\(1\)) of this section will be treated as having furnished the required bond if the brewer submits the bond on Form 5130.22 no later than 30 days following the first date on which the aggregate amount of tax due from the brewer during the relevant calendar year exceeds \$50,000. Except as provided in [paragraph (b)(2)(ii)](/current/title-27/section-25.95#p-25.95\(b\)\(2\)\(ii\)) of this section, the brewer will be treated as having furnished the required bond for the purposes of this paragraph until TTB approves or disapproves the bond.
(ii) *Bonds covering tax-deferred removals.* The grace period specified in [paragraph (b)(2)(i)](/current/title-27/section-25.95#p-25.95\(b\)\(2\)\(i\)) of this section does not apply to beer removed for consumption or sale on deferred payment of tax. A brewer that must furnish a bond under [paragraph (b)(1)](/current/title-27/section-25.95#p-25.95\(b\)\(1\)) of this section may not remove beer for consumption or sale on deferred payment of tax until TTB approves the bond.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401)))
\[T.D. TTB-146, [82 FR 1128](https://www.federalregister.gov/citation/82-FR-1128), Jan. 4, 2017]
#### § 25.96 Superseding bond.
When the principal submits a new bond to supersede a bond or bonds in effect, the appropriate TTB officer, after approving the superseding bond, will issue a notice of termination for the superseded bond under the provisions of this subpart. Superseding bonds will show the current date of execution and their effective date.
#### § 25.97 Continuation certificate.
If the contract of surety between the brewer and the surety on an expiring bond or continuation certificate is continued in force for a succeeding period of not less than 4 years from the expiration date of the bond or continuation certificate, the brewer may submit, in lieu of a new bond, a Brewer's Bond Continuation Certificate on Form 5130.23, executed under the penalties of perjury, by the brewer and the surety attesting to continuation of the bond. Each continuation certificate will constitute a bond and all provisions of law and regulations applicable to bonds on Form 5130.22 given under this part, including the disapproval of bonds, are applicable to continuation certificates.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401)))
#### § 25.98 Surety or security.
(a) *Bond coverage.* Bonds required by this part will be given with corporate surety or collateral security.
(b) *Corporate surety.* Surety bonds may be given only with surety companies holding certificates of authority from the Secretary as acceptable sureties on Federal bonds, subject to the limitations set forth in the current revision of Treasury Department Circular 570, Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies.
(c) *Availability of Circular 570.* Treasury Department Circular 570 is published in the Federal Register annually on the first business day in July, and supplemental changes are published periodically thereafter (see *[https://www.federalregister.gov](https://www.federalregister.gov)*). The most recent circular and any supplemental changes to it may be viewed on the Bureau of the Fiscal Service website (see *[https://fiscal.treasury.gov](https://fiscal.treasury.gov)*).
(d) *More than one corporate surety.* A bond may be executed by two or more corporate sureties. Each corporate surety may limit its liability in terms on the face of the bond in a specified amount. This amount may not exceed the limitations set forth for corporate security by the Secretary which are set forth in the current revision of Treasury Department Circular 570. The sum of the liabilities for the sureties will equal the required penal sum of the bond.
(e) *Deposit of collateral securities in lieu of corporate surety.* Bonds or notes of the United States, or other obligations which are unconditionally guaranteed as to both interest and principal by the United States, may be pledged and deposited by principals as collateral security in lieu of corporate surety in accordance with [31 CFR part 225](/current/title-31/part-225).
(f) *Bond guaranteed by deposit of cash or cash equivalent.* As an alternative to the corporate surety bond under [paragraph (b)](/current/title-27/section-25.98#p-25.98\(b\)) of this section, a person can file a bond that guarantees payment of the liability by submitting cash or its equivalent (including a money order, cashier's check, or personal check). Cash or its equivalent must be no less than the penal sums of the required bonds. Bonds described in this paragraph will be released if there are no outstanding liabilities when the bond is terminated. Cash equivalents must be payable to the Alcohol and Tobacco Tax and Trade Bureau.
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. TTB-146, [82 FR 1128](https://www.federalregister.gov/citation/82-FR-1128), Jan. 4, 2017; T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 25.99 Filing powers of attorney.
Each bond, continuation certificate, and each consent of surety will be accompanied by a power of attorney authorizing the agent or officer to execute the document. The power of attorney will be prepared on a form provided by the surety company and executed under the corporate seal of the company. If the power of attorney submitted is other than a manually signed original, it will be accompanied by a certificate of its validity.
(96 Stat. 1068, 1085 ([31 U.S.C. 9304-9308](https://www.govinfo.gov/link/uscode/31/9304)))
### Disapproval or Termination of Bonds or Consents of Surety
#### § 25.101 Disapproval of bonds or consents of surety.
(a) *Reasons for disapproval.* The appropriate TTB officer may disapprove a bond or consent of surety if the individual, firm, partnership, corporation, or association giving the bond or consent of surety, or if any of the above entities owning, controlling or actively participating in the management of a business giving a bond as a brewer, has been previously convicted in a court of competent jurisdiction of:
(1) Any fraudulent noncompliance with any provision of law of the United States if it related to internal revenue or customs taxation of distilled spirits, wines or beer, or if the offense shall have been compromised with the individual, firm, partnership, corporation, or association on payment of penalties or otherwise; or
(2) Any felony under a law of any State or the District of Columbia, or the United States, prohibiting the manufacture, sale, importation, or transportation of distilled spirits, wines, beer, or other intoxicating liquor.
(b) *Appeal of disapproval.* If the bond or consent of surety is disapproved, the person giving the bond or consent of surety may appeal the disapproval to the appropriate TTB officer, who will grant a hearing in the matter if requested by the applicant or brewer, and whose decision will be final.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1394, as amended ([26 U.S.C. 5551](https://www.govinfo.gov/link/uscode/26/5551)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-437, [66 FR 5479](https://www.federalregister.gov/citation/66-FR-5479), Jan. 19, 2001]
#### § 25.102 Termination of surety's liability.
The liability of a surety on a bond required by this part will be terminated only as to liability arising on or after:
(a) The effective date of a superseding bond;
(b) The date of approval of the discontinuance of business of the brewer;
(c) Following the giving of notice by the surety; or
(d) In the case of a brewer who applies to terminate a surety bond under [§ 25.106](/current/title-27/section-25.106), the date that TTB approves the brewer's application under that section.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401)))
\[T.D. TTB-146, [82 FR 1128](https://www.federalregister.gov/citation/82-FR-1128), Jan. 4, 2017]
#### § 25.103 Notice by surety for relief from liability under bond.
A surety may, at any time, in writing, notify the principal and the appropriate TTB officer that the surety desires after a specified date (not less than 60 days after the date of service on the principal) to be relieved of any liability under the bond which is incurred by the principal after the date named in the notice. The surety shall include proof of service of the notice on the principal with the notice filed with the appropriate TTB officer. The notice will become effective on the date named, unless the surety withdraws the notice, in writing. The surety on the bond remains liable under the bond with respect to any liability incurred by the principal while the bond is in effect.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401)))
#### § 25.104 Termination of bonds.
(a) *General.* Brewer's bonds may be terminated as to liability for future removals or receipts under the following circumstances:
(1) Pursuant to application of the surety as provided in [§ 25.103](/current/title-27/section-25.103);
(2) On approval of a superseding bond as provided in [§ 25.95](/current/title-27/section-25.95);
(3) When a brewer discontinues business as provided in [§ 25.85](/current/title-27/section-25.85); or
(4) When an existing brewer who becomes exempt from bond requirements terminates the bond as provided in [§ 25.106](/current/title-27/section-25.106).
(b) *Notification.* On termination of the surety's liability under a bond, the appropriate TTB officer will notify the principal and sureties.
([31 U.S.C. 9301](https://www.govinfo.gov/link/uscode/31/9301), [9303](https://www.govinfo.gov/link/uscode/31/9303))
\[T.D. TTB-146, [82 FR 1128](https://www.federalregister.gov/citation/82-FR-1128), Jan. 4, 2017]
#### § 25.105 Release of collateral security.
Bonds, notes, and other obligations of the United States, pledged and deposited as security in connection with bonds required by this part will be released in accordance with [31 CFR part 225](/current/title-31/part-225). When the appropriate TTB officer determines there is no outstanding liability against the bond and that it is no longer necessary to hold the security, he or she shall fix the date or dates on which a part or all of the security will be released. At any time prior to the release of the security, the appropriate TTB officer may, for proper cause, extend the date of release of the security for an additional length of time as may be appropriate.
([31 U.S.C. 9301](https://www.govinfo.gov/link/uscode/31/9301), [9303](https://www.govinfo.gov/link/uscode/31/9303))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. TTB-146, [82 FR 1128](https://www.federalregister.gov/citation/82-FR-1128), Jan 4, 2017]
#### § 25.106 Application to terminate bond by existing brewer who becomes exempt from bond requirements.
If a brewer has held a bond and becomes exempt from bond requirements under [§ 24.91(e)](/current/title-27/section-24.91#p-24.91\(e\)), the brewer may apply to TTB to terminate the bond. To apply, the brewer must file an amendment to the Brewer's Notice, Form 5130.10, as provided in [§ 25.79](/current/title-27/section-25.79). The brewer must accurately state in the submission to TTB that the brewer:
(a) Will withdraw beer for deferred payment of tax under [§ 25.164](/current/title-27/section-25.164);
(b) Reasonably expects to be liable for not more than \$50,000 in taxes with respect to beer imposed by [26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051) and [7652](https://www.govinfo.gov/link/uscode/26/7652) for the current calendar year (see definition of “Reasonably expects” in [§ 25.164(c)(4)(ii)](/current/title-27/section-25.164#p-25.164\(c\)\(4\)\(ii\))); and
(c) Was liable for not more than \$50,000 in such taxes in the preceding calendar year.
\[T.D TTB-146, [82 FR 1128](https://www.federalregister.gov/citation/82-FR-1128), Jan. 4, 2017]
## Subpart I—Dealer Registration and Recordkeeping
#### Source:
T.D. TTB-79, [74 FR 37404](https://www.federalregister.gov/citation/74-FR-37404), July 28, 2009, unless otherwise noted.
#### § 25.111 Definitions.
For purposes of this subpart, the following terms have the meanings indicated:
*Dealer.* A person who sells, or offers for sale, any alcohol product (distilled spirits, wines, and/or beer) fit for beverage use.
*Retail dealer in liquors.* A dealer who sells, or offers for sale, distilled spirits, wines, or beer to any person other than a dealer.
*Wholesale dealer in liquors.* A dealer who sells, or offers for sale, distilled spirits, wines, or beer to another dealer.
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121), [5122](https://www.govinfo.gov/link/uscode/26/5122))
#### § 25.112 Dealer registration.
Every brewer who sells, or offers for sale, any alcohol product (distilled spirits, wines, or beer) fit for beverage use must register as a dealer in accordance with [part 31 of this chapter](/current/title-27/part-31). However, the Brewer's Notice, TTB Form 5130.10, filed under [subpart G of this part](/current/title-27/part-25/subpart-G), and approval of that notice by the appropriate TTB officer, will constitute the brewer's registration as a dealer at the brewery. Every brewer registered as a dealer under this subpart will be classified as a wholesale dealer in liquors (see [§ 31.32 of this chapter](/current/title-27/section-31.32)) and as such may also operate as a retail dealer in liquors without additional registration. Registration covers all sales from the same location, including sales of wine, spirits, or other brewers' beer. As provided in [§ 31.52 of this chapter](/current/title-27/section-31.52), the brewer is subject to no additional registration for making sales of wine or beer at the customer's place of business. Otherwise, a brewer who conducts business as a dealer at a location other than the brewery must register and keep records in accordance with [part 31 of this chapter](/current/title-27/part-31).
([26 U.S.C. 5124](https://www.govinfo.gov/link/uscode/26/5124))
#### § 25.113 Amending the dealer registration.
Every brewer registered as a dealer under this subpart must maintain a current and accurate Brewer's Notice, TTB Form 5130.10. Whenever there is a change to any of the information provided in the approved Brewer's Notice, the brewer must amend the notice within the time period specified in [subpart G of this part](/current/title-27/part-25/subpart-G). An amendment to the Brewer's Notice, Form 5130.10, will also serve as an amendment of the brewer's dealer registration under this subpart. The brewer's dealer registration will also terminate when brewery operations under the Brewer's Notice terminate.
([26 U.S.C. 5124](https://www.govinfo.gov/link/uscode/26/5124))
#### § 25.114 Dealer records.
Every dealer is required to maintain records of transactions. Beer transactions that appear in the records required by [subpart U of this part](/current/title-27/part-25/subpart-U) will meet the brewer's recordkeeping requirements as a dealer. For other transactions not covered in the brewery records, such as retail sales of wine or distilled spirits in a restaurant at the brewery, or operations as a wholesale dealer in wine or distilled spirits, the brewer must keep the records specified for dealers in [part 31 of this chapter](/current/title-27/part-31).
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121), [5122](https://www.govinfo.gov/link/uscode/26/5122))
## Subpart J—Marks, Brands, and Labels
#### § 25.141 Barrels and kegs.
(a) *General requirements.* The brewer's name or trade name and the place of production (city and, if necessary for identification, State) shall be permanently marked on each barrel or keg. If the place of production is clearly shown on the bung or on the tap cover, or on a label securely affixed to each barrel or keg, the place of production need not be permanently marked on each barrel or keg. No statement as to payment of internal revenue taxes may be shown.
(b) *Breweries of same ownership.*
(1) If two or more breweries are owned or operated by the same person, firm, or corporation (as defined in [§ 25.181](/current/title-27/section-25.181)), the place of production:
(i) May be shown as the only location on the bung, or on the tap cover, or on a separate label attached to the keg;
(ii) May be included in a listing of the locations of breweries qualified under this part if the place of production is not given less emphasis than any of the other locations; or
(iii) Need not be shown if the brewer's principal place of business is shown in lieu of any other location. The brewer's principal place of business will be the location of a brewery operated by the brewer and qualified under this part.
(2) If the location of two or more breweries is shown on the keg, bung, tap cover, or on a separate label attached to the keg (paragraph (b)(1)(ii)), or if the brewer's principal place of business is shown in lieu of the actual place of production (paragraph (b)(1)(iii)), the brewer shall indicate the actual place of production by printing, coding or other markings on the keg, bung, tap cover, or on a separate label attached to the keg. The coding system employed will permit an appropriate TTB officer to determine the place of production (including street address if two or more breweries are located in the same city) of the beer. The brewer must notify the appropriate TTB officer prior to employing a coding system.
(c) *Label approval required.* Labels or tap covers used by brewers shall be covered by certificates of label approval, Form 5100.31, when required by [part 7 of this chapter](/current/title-27/part-7).
(Approved by the Office of Management and Budget under control number 1512-0474)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended ([26 U.S.C. 5412](https://www.govinfo.gov/link/uscode/26/5412)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-225, [51 FR 8492](https://www.federalregister.gov/citation/51-FR-8492), Mar. 12, 1986; T.D. ATF-437, [66 FR 5479](https://www.federalregister.gov/citation/66-FR-5479), Jan. 19, 2001]
#### § 25.142 Bottles.
(a) *Label requirements.* Each bottle of beer shall show by label or otherwise the name or trade name of the brewer, the net contents of the bottle, the nature of the product such as beer, ale, porter, stout, etc., and the place of production (city and, when necessary for identification, State). No statement as to payment of internal revenue taxes may be shown.
(b) *Breweries of same ownership.*
(1) If two or more breweries are owned or operated by the same person, firm, or corporation (as defined in [§ 25.181](/current/title-27/section-25.181)), the place of production:
(i) May be shown as the only location on the label;
(ii) May be included in a listing of the locations of breweries qualified under this part if the place of production is not given less emphasis than any of the other locations; or
(iii) Need not be shown if the brewer's principal place of business is shown in lieu of any other location. The brewer's principal place of business will be the location of a brewery operated by the brewer and qualified under this part.
(2) If the location of two or more breweries is shown on the label (paragraph (b)(1)(ii)), or if the brewer's principal place of business is shown on the label in lieu of the actual place of production (paragraph (b)(1)(iii)), the brewer shall indicate the actual place of production by printing, coding or other markings on the label, bottle, crown or lid. The coding system employed will permit an appropriate TTB officer to determine the place of production (including street address if two or more breweries are located in the same city) of the beer. The brewer must notify the appropriate TTB officer prior to employing a coding system.
(c) *Distinctive names.* If the brewer's name, trade name or brand name includes the name of a city which is not the place where the beer was produced, the appropriate TTB officer may require the brewer to state the actual place of production on the label.
(d) *Tolerances.* The statement of net contents shall indicate exactly the volume of beer within the bottle except for variations in measuring as may occur in filling conducted in compliance with good commercial practice. The barrel equivalent of bottles filled during a consecutive three month period, calculated on the basis of the brewer's fill test records, may not vary more than 0.5 percent from the barrel equivalent of bottles filled during the same period, calculated on the basis of the stated net contents of the bottles. The brewer is liable for the tax on the entire amount of beer removed, without benefit of tolerance, when the fill of bottles and cans exceeds the tolerance for the three month period, or when filling is not conducted in compliance with good commercial practice.
(e) *Label approval required.* Labels used by brewers shall be covered by certificates of label approval, Form 5100.31, when required by [part 7 of this chapter](/current/title-27/part-7).
(f) *Short-fill bottles.* A brewer may dispose of taxpaid short-fill bottles of beer to employees for their use but not for resale. These bottles need not be labeled, but if labeled they need not show an accurate statement of net contents.
(Approved by the Office of Management and Budget under control number 1512-0474)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended ([26 U.S.C. 5412](https://www.govinfo.gov/link/uscode/26/5412)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-225, [51 FR 8492](https://www.federalregister.gov/citation/51-FR-8492), Mar. 12, 1986; T.D. ATF-437, [66 FR 5479](https://www.federalregister.gov/citation/66-FR-5479), Jan. 19, 2001; T.D. TTB-196, [89 FR 87942](https://www.federalregister.gov/citation/89-FR-87942), Nov. 6, 2024]
#### § 25.143 Cases.
(a) *Brewer's name.* The brewer's name or trade name will be shown on each case or other shipping container of bottled beer. A brewer may use unmarked cases to hold:
(1) Cartons of beer, if the visible portion of the cartons shows the required name; or
(2) Bottles or cans with plastic carriers, if the visible portion of the bottles or cans shows the required name.
(b) *Other information.* The brewer may show on a case or shipping container the place of production (city and, when necessary for identification, State), and the addresses of other breweries owned by the same person, firm, or corporation (as defined in [§ 25.181](/current/title-27/section-25.181)). If only one address is shown, it will be that of the producing brewery, or of the brewer's principal place of business.
(Approved by the Office of Management and Budget under control number 1512-0474)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended ([26 U.S.C. 5412](https://www.govinfo.gov/link/uscode/26/5412)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-225, [51 FR 8492](https://www.federalregister.gov/citation/51-FR-8492), Mar. 12, 1986]
#### § 25.144 Rebranding barrels and kegs.
(a) A brewer may not use a barrel or keg which bears the name of more than one brewer, and except as provided in [§ 25.231](/current/title-27/section-25.231), may not use a barrel or keg bearing the name of a brewer other than the producing brewer.
(b) A brewer who purchases or otherwise obtains barrels or kegs from another brewer shall permanently remove or durably cover the original marks and brands after notifying the appropriate TTB officer of the proposed action. A brewer may use the barrels or kegs obtained without removing or covering the original marks and brands if the brewer:
(1) Adopts a trade name substantially identical to the name appearing on the barrels or kegs; or
(2) Succeeds to a brewer who has discontinued business, in which case the brewer may add marks or brands, in accordance with [§ 25.141](/current/title-27/section-25.141), which indicate ownership.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended ([26 U.S.C. 5412](https://www.govinfo.gov/link/uscode/26/5412)))
#### § 25.145 Tanks, vehicles, and vessels.
(a) Each brewer who transfers beer to another brewery of the same ownership (as defined in [§ 25.181](/current/title-27/section-25.181)), or who exports beer without payment of tax, as provided in [§ 25.203](/current/title-27/section-25.203), shall plainly and durably mark each tank, tank car, tank truck, tank ship, barge, or deep tank of a vessel in accordance with [paragraph (b)](/current/title-27/section-25.145#p-25.145\(b\)) of this section. These marks may be placed on a label securely affixed to the route board of the container.
(b) The brewer shall mark each container with—
(1) The designation “Beer”;
(2) The brewer's name;
(3) The address of the brewery from which removed;
(4) The address of the brewery to which transferred or the marks required for exportation in [part 28 of this chapter](/current/title-27/part-28), as applicable;
(5) The date of shipment; and
(6) The quantity, expressed in barrels.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended, 1389, as amended ([26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5414](https://www.govinfo.gov/link/uscode/26/5414)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. TTB-8, [69 FR 3830](https://www.federalregister.gov/citation/69-FR-3830), Jan. 27, 2004]
## Subpart K—Tax on Beer
### Liability for Tax
#### § 25.151 Rate of tax.
All beer, brewed or produced, and removed for consumption or sale, is subject to the tax prescribed by [26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051), for every barrel containing not more than 31 gallons, and at a like rate for any other quantity or for the fractional parts of a barrel as authorized in [§ 25.156](/current/title-27/section-25.156).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended ([26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051), [5052](https://www.govinfo.gov/link/uscode/26/5052)))
#### § 25.152 Reduced rate of tax for certain brewers.
(a) *General.* Section 5051(a)(2) of Title 26 U.S.C. provides for a reduced rate of tax on the first 60,000 barrels of beer removed for consumption or sale by a brewer during a calendar year. To be eligible to pay the reduced rate of tax, a brewer:
(1) Shall brew or produce the beer at a qualified brewery in the United States;
(2) May not produce more than 2,000,000 barrels of beer per calendar year; and
(3) May not be a member of a “controlled group” of brewers whose members together produce more than 2,000,000 barrels of beer per calendar year.
The appropriate TTB officer shall deny use of the reduced rate of tax provided by [26 U.S.C. 5051(a)(2)](https://www.govinfo.gov/link/uscode/26/5051) where it is determined that the allowance of such a reduced rate would benefit a person who would otherwise fail to qualify for use of such rate.
(b) *Definitions.* For the purpose of determining eligibility for payment of the reduced rate of tax on beer, terms have the following meanings:
(1) *Controlled group.* A related group of brewers as defined in [26 U.S.C. 5051(a)(2)(B)](https://www.govinfo.gov/link/uscode/26/5051). Controlled groups include, but are not limited to:
(i) Parent-subsidiary controlled groups as defined in [26 CFR 1.1563-1(a)(2)](/current/title-26/section-1.1563-1#p-1.1563-1\(a\)\(2\));
(ii) Brother-sister controlled groups as defined in [26 CFR 1.1563-1(a)(3)](/current/title-26/section-1.1563-1#p-1.1563-1\(a\)\(3\)); and
(iii) Combined groups as defined in [26 CFR 1.1563-1(a)(4)](/current/title-26/section-1.1563-1#p-1.1563-1\(a\)\(4\)). Stock ownership in a corporation need not be direct and 51% constructive ownership, defined in [26 CFR 1.1563-3](/current/title-26/section-1.1563-3), may be acquired through:
(A) An option to purchase stock;
(B) Attribution from partnerships;
(C) Attribution from estate or trusts;
(D) Attribution from corporations; or
(E) Ownership by spouses, children, grandchildren, parents, and grandparents.
(2) *Production of beer.* The production of beer as recorded in the brewer's daily records and reported in the Brewer's Report of Operations, Form 5130.9. For the purpose of determining compliance with the 2,000,000 barrel limitation, production of beer by a brewer or a controlled group of brewers includes both beer produced at qualified breweries within the United States and beer produced outside the United States.
(c) *Brewers operating more than one brewery.* Brewers who operate more than one brewery shall include the combined production of beer at all their breweries when determining eligibility under the 2,000,000 barrel limitation. The reduced rate of tax applies to the first 60,000 barrels of beer removed for consumption or sale in a calendar year by the brewer; the brewer shall apportion the 60,000 barrels among the breweries in the manner described in the notice as provided by [§ 25.167(b)(3)](/current/title-27/section-25.167#p-25.167\(b\)\(3\)).
(d) *Controlled groups of brewers.* Members of a controlled group of brewers shall include the combined production of beer by all member brewers when determining eligibility under the 2,000,000 limitation. The reduced rate of tax applies to the first 60,000 barrels of beer removed for consumption or sale in a calendar year by the controlled group of brewers; the controlled group of brewers shall apportion the 60,000 barrels among member brewers in the manner described in each brewer's notice as provided by [§ 25.167(b)(3)](/current/title-27/section-25.167#p-25.167\(b\)\(3\)).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended ([26 U.S.C. 5052](https://www.govinfo.gov/link/uscode/26/5052)))
\[T.D. ATD-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-307, [55 FR 52738](https://www.federalregister.gov/citation/55-FR-52738), Dec. 21, 1990; T.D. ATF-345, [58 FR 40357](https://www.federalregister.gov/citation/58-FR-40357), July 28, 1993]
#### § 25.153 Persons liable for tax.
The tax imposed by law on beer (including beer purchased or procured by one brewer from another) shall be paid by the brewer of the beer at the brewery where produced. The tax on beer transferred to a brewery from other breweries owned by the same brewer in accordance with [subpart L of this part](/current/title-27/part-25/subpart-L) shall be paid by the brewer at the brewery from which the beer is removed for consumption or sale.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended, 1389, as amended ([26 U.S.C. 5054](https://www.govinfo.gov/link/uscode/26/5054), [5413](https://www.govinfo.gov/link/uscode/26/5413), [5414](https://www.govinfo.gov/link/uscode/26/5414)))
### Determination of Tax
#### § 25.155 Types of containers.
Beer may be removed from a brewery for consumption or sale only in barrels, kegs, bottles, and similar containers, as provided in this part. A container which the appropriate TTB officer determines to be similar to a bottle or can will be treated as a bottle for purposes of this part. A container which the appropriate TTB officer determines to be similar to a barrel or keg and which conforms to one of the sizes prescribed for barrels or kegs in [§ 25.156](/current/title-27/section-25.156) will be treated as such for purposes of this part.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended, 1390, as amended ([26 U.S.C. 5412](https://www.govinfo.gov/link/uscode/26/5412), [5416](https://www.govinfo.gov/link/uscode/26/5416)))
#### § 25.156 Determination of tax on keg beer.
(a) In determining the tax on beer removed in kegs, a barrel is regarded as a quantity of not more than 31 gallons. The authorized fractional parts of a barrel are whole barrels, halves, thirds, quarters, sixths, and eighths, and beer may be removed in kegs rated at those capacities. The following keg sizes are also authorized at the stated barrel equivalents:
| Size of keg | Barrel equivalent |
| ----------- | ----------------- |
| 5 gallons | 0.16129 |
| 30 liter | 0.25565 |
| 50 liter | 0.42608 |
(b) If any barrel or authorized size keg contains a quantity of beer more than 2 percent in excess of its rated capacity, tax will be determined and paid on the actual quantity of beer (without benefit of any tolerance) contained in the keg.
(c) The quantities of keg beer removed subject to tax will be computed to 5 decimal places. The sum of the quantities computed for any one day will be rounded to 2 decimal places and the tax will be calculated and paid on the rounded sum.
([26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051))
\[T.D. ATF-345, [58 FR 40357](https://www.federalregister.gov/citation/58-FR-40357), July 28, 1993]
#### § 25.157 Determination of tax on bottled beer.
The quantities of bottled beer removed subject to tax shall be computed to 5 decimal places in accordance with the table and instructions in [§ 25.158](/current/title-27/section-25.158). The sum of the quantities computed for any one day will be rounded to 2 decimal places and the tax will be calculated and paid on the rounded sum.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended ([26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051)))
#### § 25.158 Tax computation for bottled beer.
Barrel equivalents for various case sizes are as follows:
(a) *For U.S. measure bottles.*
| Bottle size (net contents in fluid ounces) | Number of bottles per case | Barrel equivalent |
| ------------------------------------------ | -------------------------- | ----------------- |
| 6 | 12 | 0.01815 |
| 6 | 24 | 0.03629 |
| 7 | 12 | 0.02117 |
| 7 | 24 | 0.04234 |
| 7 | 32 | 0.05645 |
| 7 | 35 | 0.06174 |
| 7 | 36 | 0.06351 |
| 7 | 40 | 0.07056 |
| 7 | 48 | 0.08468 |
| 8 | 12 | 0.02419 |
| 8 | 24 | 0.04839 |
| 8 | 36 | 0.07258 |
| 8 | 48 | 0.09677 |
| 10 | 12 | 0.03024 |
| 10 | 24 | 0.06048 |
| 10 | 48 | 0.12097 |
| 11 | 12 | 0.03327 |
| 11 | 24 | 0.06653 |
| 11.5 | 24 | 0.06956 |
| 12 | 12 | 0.03629 |
| 12 | 15 | 0.04536 |
| 12 | 20 | 0.06048 |
| 12 | 24 | 0.07258 |
| 12 | 30 | 0.09073 |
| 12 | 48 | 0.14516 |
| 12 | 50 | 0.15121 |
| 14 | 12 | 0.04234 |
| 14 | 24 | 0.08468 |
| 16 (1 pint) | 12 | 0.04839 |
| 16 (1 pint) | 24 | 0.09677 |
| 22 | 12 | 0.06653 |
| 22 | 24 | 0.13306 |
| 24 | 12 | 0.07258 |
| 24 | 24 | 0.14516 |
| 30 | 12 | 0.09073 |
| 32 (1 quart) | 12 | 0.09677 |
| 40 | 12 | 0.12097 |
| 64 | 1 | 0.01613 |
| 64 | 4 | 0.06452 |
| 64 | 6 | 0.09677 |
| 128 (1 gallon) | 1 | 0.03226 |
| 288 | 1 | 0.07258 |
(b) *For metric measure bottles.*
| Bottle size (metric net contents) | Number of bottles per case | Barrel equivalent |
| --------------------------------- | -------------------------- | ----------------- |
| 500 milliliters | 24 | 0.10226 |
| 750 milliliters | 12 | 0.07670 |
| 1 liter | 12 | 0.10226 |
| 2 liters | 6 | 0.10226 |
| 5 liters | 1 | 0.04261 |
(c) *For other case sizes.* If beer is to be removed in cases or bottles of sizes other than those listed in the above tables, the brewer shall notify the appropriate TTB officer in advance and request to be advised of the fractional barrel equivalent applicable to the proposed case size.
([26 U.S.C. 5412](https://www.govinfo.gov/link/uscode/26/5412))
\[T.D. ATF-345, [58 FR 40357](https://www.federalregister.gov/citation/58-FR-40357), July 28, 1993]
#### § 25.159 Time of tax determination and payment; offsets.
(a) *Time and payment.* The tax on beer will be determined at the time of its removal for consumption or sale, and will be paid by return as provided in this part.
(b) *Offsets.* During any business day, the quantity of beer returned to the same brewery from which removed is to be taken as an offset against or deducted from the total quantity of beer removed for consumption or sale from that brewery on the day that the beer is returned.
(c) *Offsets not allowed.* An offset or deduction for returned beer will not be allowed if:
(1) The brewer was indemnified by insurance or otherwise in respect of the tax; or
(2) The brewer does not issue credit to the customer for the tax on the returned beer within 30 days of the return of the beer. If the tax is not timely credited after the offset or deduction is taken, the brewer shall make an increasing adjustment on the next tax return.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended, 1335, as amended ([26 U.S.C. 5054](https://www.govinfo.gov/link/uscode/26/5054), [5056](https://www.govinfo.gov/link/uscode/26/5056), [5061](https://www.govinfo.gov/link/uscode/26/5061)))
#### § 25.160 Tax adjustment for brewers who produce more than 2,000,000 barrels of beer.
Each brewer who has paid tax on beer by return, Form 5000.24, at the reduced rate of tax during a calendar year, but whose production (or the production of a controlled group of brewers of which the brewer is a member) exceeds 2,000.000 barrels of beer in that calendar year, is no longer eligible to pay tax on beer at the reduced rate of tax for any beer removed that calendar year for consumption or sale. The brewer shall make a tax adjustment for the payment of additional tax no later than the return period in which production (or the production of a controlled group of brewers of which the brewer is a member) exceeds 2,000,000 barrels of beer. The adjustment will be determined by multiplying the difference between the higher and lower rates of tax applicable to beer by the number of barrels removed by the brewer that year at the reduced rate of tax. The brewer shall make tax adjustments for all breweries where tax was paid at the lower rate that year, and shall include interest payable from the date on which tax was paid at the lower rate. In the case of a controlled group of brewers whose production exceeds 2,000,000 barrels of beer, all member brewers who paid tax at the lower rate shall make tax adjustments as determined in this section.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended ([26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051)))
### Preparation and Remittance of Tax Returns
#### § 25.163 Method of tax payment.
A brewer shall pay the tax on beer by return on TTB F 5000.24, as provided in [§§ 25.164](/current/title-27/section-25.164), [25.164a](/current/title-27/section-25.164a), [25.173](/current/title-27/section-25.173), and [25.175](/current/title-27/section-25.175). In paying the tax, a fractional part of a cent will be disregarded unless it amounts to one-half cent or more, in which case it will be increased to one cent.
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987, as amended by T.D. ATF-365, [60 FR 33669](https://www.federalregister.gov/citation/60-FR-33669), June 28, 1995; T.D. TTB-89, [76 FR 3511](https://www.federalregister.gov/citation/76-FR-3511), Jan. 20, 2011; T.D. TTB-94, [76 FR 52862](https://www.federalregister.gov/citation/76-FR-52862), Aug. 24, 2011]
#### § 25.164 Deferred payment return periods—annual, quarterly, and semimonthly.
(a) *Requirement for filing.* This section governs payment of tax on a deferred basis. Each brewer must pay the tax on beer (unless prepaid) by return on Form 5000.24. The brewer must file Form 5000.24 as a return regardless of whether tax has been prepaid as provided in [§ 25.175](/current/title-27/section-25.175) during the return period. The brewer must file a return on Form 5000.24 for each return period even though no beer was removed for consumption or sale.
(b) *Payment of tax.* The brewer must include for payment with the return the full amount of tax required to be determined (and which has not been prepaid) on all beer removed for consumption or sale during the period covered by the return.
(c) *Return periods* —
(1) *Semimonthly return period.* Except in the case of a taxpayer who qualifies for annual or quarterly return periods as provided in [paragraphs (c)(2)](/current/title-27/section-25.164#p-25.164\(c\)\(2\)) or [(c)(3)](/current/title-27/section-25.164#p-25.164\(c\)\(3\)) of this section, all taxpayers must use semimonthly return periods for deferred payment of tax. The semimonthly return periods run from the brewer's business day beginning on the first day of each month through the brewer's business day beginning on the 15th day of that month, and from the brewer's business day beginning on the 16th day of the month through the brewer's business day beginning on the last day of the month, except as otherwise provided in [§ 25.164a](/current/title-27/section-25.164a).
(2) *Annual return period.* Subject to [paragraph (b)(4)](/current/title-27/section-25.164#p-25.164\(b\)\(4\)) of this section, a taxpayer who reasonably expects to be liable for not more than $1,000 in taxes with respect to beer imposed by [26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051) and [7652](https://www.govinfo.gov/link/uscode/26/7652) in the current calendar year, and that was liable for not more than $1,000 in such taxes in the preceding calendar year, may choose to use an annual return period. However, the taxpayer may not use the annual return period procedure for any portion of the calendar year following the first date on which the aggregate amount of tax due from the taxpayer during the calendar year exceeds \$1,000, and any tax which has not been paid on that date will be due on the 14th day after the last day of the quarterly or semimonthly period in which that date occurs.
(3) *Quarterly return period.* A taxpayer may choose to use a quarterly return period if the taxpayer was not liable for more than $50,000 in taxes with respect to beer imposed by [26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051) and [7652](https://www.govinfo.gov/link/uscode/26/7652) in the preceding calendar year and if that taxpayer reasonably expects to be liable for not more than $50,000 in such taxes during the current calendar year. In such a case the last day for paying the tax and filing the return will be the 14th day after the last day of the calendar quarter. However, the taxpayer may not use the quarterly return period procedure for any portion of the calendar year following the first date on which the aggregate amount of tax due from the taxpayer during the calendar year exceeds \$50,000, and any tax that has not been paid on that date will be due on the 14th day after the last day of the semimonthly period in which that date occurs.
(4) *Additional rules for annual and quarterly return periods.* The following additional rules apply to the annual and quarterly return period procedure under this section:
(i) A “taxpayer” is an individual, corporation, partnership, or other entity that is assigned a single Employer Identification Number as defined in [26 CFR 301.7701-12](/current/title-26/section-301.7701-12);
(ii) “Reasonably expects” means that there is no existing or anticipated circumstance known to the taxpayer (such as an increase in production capacity) that would cause the taxpayer's tax liability to exceed the prescribed limit;
(iii) A taxpayer with multiple locations must combine the beer tax liability for all locations to determine eligibility for the return procedures;
(iv) A taxpayer who has both domestic operations and import transactions must combine the beer tax liability on the domestic operations and the imports to determine eligibility for the return procedures;
(v) The controlled group rules of [26 U.S.C. 5061(e)](https://www.govinfo.gov/link/uscode/26/5061), which concern treatment of controlled groups as one taxpayer, do not apply for purposes of determining eligibility for the return procedures. However, a taxpayer who is eligible for the return procedures, and who is a member of a controlled group that owes \$5 million or more in beer excise taxes per year, is required to pay taxes by electronic fund transfer (EFT). Payments via EFT must be transmitted in accordance with section 5061(e);
(vi) A new taxpayer is eligible to use the return procedures in the first year of business simply if the taxpayer reasonably expects to be liable for not more than $1,000 (in the case of the annual return procedure) or $50,000 (in the case of the quarterly return procedure) in beer taxes during that calendar year; and
(vii) If a taxpayer becomes ineligible to use a return procedure prescribed in [paragraph (c)(2)](/current/title-27/section-25.164#p-25.164\(c\)\(2\)) or [(c)(3)](/current/title-27/section-25.164#p-25.164\(c\)\(3\)) of this section because the taxpayer's liability exceeds $1,000 or $50,000, respectively, during a taxable year, that taxpayer may resume using that return procedure only after a full calendar year has passed during which the taxpayer's liability did not exceed $1,000 or $50,000, as the case may be. A taxpayer may not use an annual or quarterly return procedure during any calendar year in which the taxpayer reasonably expects to be liable for more than $1,000, in the case of the annual return procedure, or $50,000, in the case of the quarterly return procedure, in beer taxes.
(d) *Time for filing returns and paying tax.* Except as otherwise provided in [§ 25.164a](/current/title-27/section-25.164a) for semimonthly tax returns, the brewer must file the tax return, TTB F 5000.24, for each return period, and make remittance as required by this section, not later than the 14th day after the last day of the return period. If the due date falls on a Saturday, Sunday, or legal holiday, the return and remittance are due on the immediately preceding day that is not a Saturday, Sunday, or legal holiday, except as otherwise provided in [§ 25.164a(c)](/current/title-27/section-25.164a#p-25.164a\(c\)).
(e) *Timely filing.*
(1) When the brewer sends the semimonthly, quarterly, or annual tax return, Form 5000.24, by U.S. mail, in accordance with the instructions on the form, as required by this section, with remittance as provided for in this section, or without remittance as provided for in [§ 25.165](/current/title-27/section-25.165), the date of the official postmark of the United States Postal Service stamped on the cover in which the return and remittance were mailed is considered the date of delivery of the return and the date of delivery of the remittance, if enclosed with the return. When the postmark on the cover is illegible, the burden is on the brewer to prove when the postmark was made.
(2) When the brewer sends the semimonthly, quarterly, or annual return with or without remittance by registered mail or by certified mail, the date of registry or the date of the postmark on the sender's receipt of certified mail will be treated as the date of delivery of the return and of the remittance, if enclosed with the return.
(Approved by the Office of Management and Budget under control number 1513-0083)
(Aug. 16, 1954, ch. 736, 68A Stat. 775, as amended ([26 U.S.C. 6302](https://www.govinfo.gov/link/uscode/26/6302)); sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended ([26 U.S.C. 5061](https://www.govinfo.gov/link/uscode/26/5061)))
\[T.D. TTB-146, [82 FR 1129](https://www.federalregister.gov/citation/82-FR-1129), Jan. 4, 2017]
#### § 25.164a Special September rule for taxes due by semimonthly return.
(a) *Division of second semimonthly period.*
(1) *General.* Except as otherwise provided in [paragraph (a)(2)](/current/title-27/section-25.164a#p-25.164a\(a\)\(2\)) of this section, the second semimonthly period for the month of September is divided into two payment periods, from the 16th day through the 26th day, and from the 27th day through the 30th day. The brewer shall file a return, TTB F 5000.24, and make remittance, for the period September 16-26, no later than September 29. The brewer shall file a return on TTB F 5000.24, and make remittance, for the period September 27-30, no later than October 14.
(2) *Taxpayment not by electronic fund transfer.* In the case of taxes for which remittance by electronic fund transfer (EFT) is not required by [§ 25.165](/current/title-27/section-25.165), the second semimonthly period of September is divided into two payment periods, from the 16th day through the 25th day, and from the 26th day through the 30th day. The brewer shall file a return on TTB F 5000.24, and make remittance, for the period September 16-25, no later than September 28. The brewer shall file a return on TTB F 5000.24, and make remittance, for the period September 26-30, no later than October 14.
(b) *Amount of payment—Safe harbor rule.*
(1) *General.* Taxpayers are considered to have met the requirements of [paragraph (a)(1)](/current/title-27/section-25.164a#p-25.164a\(a\)\(1\)) of this section if the amount paid no later than September 29 is not less than 11/15ths (73.3 percent) of the tax liability incurred for the semimonthly period beginning on September 1 and ending on September 15, and if any underpayment of tax is paid by October 14.
(2) *Taxpayment not by EFT.* Taxpayers are considered to have met the requirements of [paragraph (a)(2)](/current/title-27/section-25.164a#p-25.164a\(a\)\(2\)) of this section if the amount paid no later than September 28 is not less than 2/3rds (66.7 percent) of the tax liability incurred for the semimonthly period beginning on September 1 and ending on September 15, and if any underpayment of tax is paid by October 14.
(c) *Weekends and holidays.* If the required taxpayment due date for the period September 16-25 or September 16-26, as applicable, falls on a Saturday or legal holiday, the return and remittance are due on the immediately preceding day. If the required due date falls on a Sunday, the return and remittance are due on the immediately following day.
(d) *Example: Payment of tax for the month of September.*
(1) *Facts.* X, a brewer required to pay taxes by electronic fund transfer, incurred tax liability in the amount of $30,000 for the first semimonthly period of September. For the period September 16-26, X incurred tax liability in the amount of $45,000, and for the period September 27-30, X incurred tax liability in the amount of \$2,000.
(2) *Payment requirement.* X's payment of tax in the amount of $30,000 for the first semimonthly period of September is due no later than September 29 ([§ 25.164(d)](/current/title-27/section-25.164#p-25.164(d))). X's payment of tax for the period September 16-26 is also due no later than September 29 ([§ 25.164a(a)(1)](/current/title-27/section-25.164a#p-25.164a(a)(1))). X may use the safe harbor rule to determine the amount of payment due for the period of September 16-26 ([§ 25.164a(b)](/current/title-27/section-25.164a#p-25.164a(b))). Under the safe harbor rule, X's payment of tax must not be less than $21,990.00, that is, 11/15ths of the tax liability incurred during the first semimonthly period of September. Additionally, X must pay the tax in the amount of $2,000 for the period September 27-30 no later than October 14 ([§ 25.164a(a)(1)](/current/title-27/section-25.164a#p-25.164a(a)(1))). X must also pay the underpayment of tax, $23,010.00, for the period September 16-26, no later than October 14 ([§ 25.164a(b)](/current/title-27/section-25.164a#p-25.164a\(b\))).
\[T.D. TTB-89, [76 FR 3512](https://www.federalregister.gov/citation/76-FR-3512), Jan. 20, 2011, as amended by T.D. TTB-94, [76 FR 52862](https://www.federalregister.gov/citation/76-FR-52862), Aug. 24, 2011]
#### § 25.165 Payment of tax by electronic fund transfer.
(a) *Eligible brewers.*
(1) Each taxpayer who was liable, during a calendar year, for a gross amount equal to or exceeding five million dollars in beer taxes combining tax liabilities incurred under this [part and parts 26](/current/title-27/part-26) and [27 of this chapter](/current/title-27/part-27), shall use a commercial bank in making payment by electronic fund transfer (EFT) of beer taxes during the succeeding calendar year. Payment of beer taxes by cash, check, or money order, as described in [§ 25.163](/current/title-27/section-25.163), is not authorized for a taxpayer who is required by this section to make remittances by EFT. For purposes of this section, the dollar amount of tax liability is defined as the gross tax liability on all taxable removals, determined in accordance with [§ 25.159](/current/title-27/section-25.159), and importations (including beer brought into the United States from Puerto Rico or the Virgin Islands) during the calendar year, without regard to any drawbacks, credits, or refunds, for all premises from which such activities are conducted by the taxpayer. Overpayments are not taken into account in summarizing the gross tax liability.
(2) For the purposes of this section, a taxpayer includes a controlled group of corporations, as defined in [26 U.S.C. 1563](https://www.govinfo.gov/link/uscode/26/1563), and implementing regulations in [26 CFR 1.1563-1](/current/title-26/section-1.1563-1) through [1.1563-4](/current/title-26/section-1.1563-4), except that the words “at least 80 percent” shall be replaced by the words “more than 50 percent” in each place it appears in subsection (a) of [26 U.S.C. 1563](https://www.govinfo.gov/link/uscode/26/1563), as well as in the implementing regulations. Also, the rules for a “controlled group of corporations” apply in a similar fashion to groups which include partnerships and/or sole proprietorships. If one entity maintains more than 50% control over a group consisting of corporations and one, or more, partnerships and/or sole proprietorships, all of the members of the controlled group are one taxpayer for the purpose of determining who is required to make remittances by EFT.
(3) A taxpayer who is required by this section to make remittances by EFT shall make a separate EFT remittance and file a separate return, Form 5000.24, for each brewery from which beer is removed upon determination of tax.
(b) *Requirements.*
(1) On or before January 10 of each calendar year, except for a taxpayer already remitting the tax by EFT, each taxpayer who was liable for a gross amount equal to or exceeding five million dollars in beer taxes combining tax liabilities incurred under this [part and parts 26](/current/title-27/part-26) and [27 of this chapter](/current/title-27/part-27), during the previous calendar year, shall notify, in writing the appropriate TTB officer. The notice shall be an agreement to make remittances by EFT.
(2) For each return filed in accordance with this part, the taxpayer shall direct the taxpayer's bank to make an electronic fund transfer in the amount of the taxpayment to the Treasury Account as provided in [paragraph (e)](/current/title-27/section-25.165#p-25.165\(e\)) of this section. The request shall be made to the bank early enough for the transfer to be made to the Treasury Account by no later than the close of business on the last day for filing the return, prescribed in [§§ 25.164](/current/title-27/section-25.164) or [25.175](/current/title-27/section-25.175). The request shall take into account any time limit established by the bank.
(3) If a taxpayer was liable for less than five million dollars in beer taxes during the preceding calendar year, combining tax liabilities incurred under this [part and parts 26](/current/title-27/part-26) and [27 of this chapter](/current/title-27/part-27), the taxpayer may choose either to continue remitting the tax as provided in this section or to remit the tax with the return as prescribed by [§ 25.164](/current/title-27/section-25.164). Upon filing the first return on which the taxpayer chooses to discontinue remitting the tax by EFT and to begin remitting the tax with the tax return, the taxpayer shall notify the appropriate TTB officer by attaching a written notification to Form 5000.24, stating that no taxes are due by EFT because the tax liability during the preceding calendar year was less than five million dollars, and that the remittance will be filed with the tax return.
(c) *Remittance.*
(1) Each taxpayer shall show on the return, Form 5000.24, information about remitting the tax for that return by EFT and shall file the return with TTB, in accordance with the instructions on Form 5000.24.
(2) Remittances shall be considered as made when the taxpayment by electronic fund transfer is received by the Treasury Account. For purposes of this section, a taxpayment by electronic fund transfer shall be considered as received by the Treasury Account when it is paid to a Federal Reserve Bank.
(3) When the taxpayer directs the bank to effect an electronic fund transfer message as required by [paragraph (b)(2)](/current/title-27/section-25.165#p-25.165\(b\)\(2\)) of this section, any transfer data record furnished to the taxpayer, through normal banking procedures, will serve as the record of payment, and will be retained as part of required records.
(d) *Failure to make a taxpayment by EFT.* The taxpayer is subject to a penalty imposed by [26 U.S.C. 5684](https://www.govinfo.gov/link/uscode/26/5684), [6651](https://www.govinfo.gov/link/uscode/26/6651), or [6656](https://www.govinfo.gov/link/uscode/26/6656), as applicable, for failure to make a taxpayment by EFT on or before the close of business on the prescribed last day for filing.
(e) *Procedure.* Upon the notification required under [paragraph (b)(1)](/current/title-27/section-25.165#p-25.165\(b\)\(1\)) of this section, the appropriate TTB officer will issue to the taxpayer a TTB Procedure entitled “Payment of Tax by Electronic Fund Transfer.” This publication outlines the procedure a taxpayer is to follow when preparing returns and EFT remittances in accordance with this part. U.S. Customs and Border Protection (CBP) will provide the taxpayer with instructions for preparing EFT remittances for payments to be made to CBP.
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-245, [52 FR 532](https://www.federalregister.gov/citation/52-FR-532), Jan. 7, 1987; T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987; T.D. ATF-262, [52 FR 47560](https://www.federalregister.gov/citation/52-FR-47560), Dec. 15, 1987; T.D. ATF-437, [66 FR 5479](https://www.federalregister.gov/citation/66-FR-5479), Jan. 19, 2001; T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), July 25, 2001; T.D. ATF-479, [67 FR 30798](https://www.federalregister.gov/citation/67-FR-30798), May 8, 2002; T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 25.166 Payment of reduced rate of tax.
(a) *By return, Form 5000.24.* A brewer who is eligible to pay the reduced rate of tax on beer may, upon filing the notice required by [§ 25.167](/current/title-27/section-25.167), pay the reduced rate of tax on beer by return for deferred payment of tax as provided in [§ 25.164](/current/title-27/section-25.164) or by prepayment return as provided in [§ 25.175](/current/title-27/section-25.175). Payment of reduced rate of tax on beer by return, Form 5000.24, may commence with any tax return filed during a calendar year and will continue until the brewer has taxpaid 60,000 barrels of beer at the lower rate of tax, or taxpaid the number of barrels of beer apportioned under [§ 25.167(b)(3)](/current/title-27/section-25.167#p-25.167\(b\)\(3\)) for that calendar year.
(b) *By claim for refund of tax.* A brewer, eligible to pay the reduced rate of tax on beer during a calendar year, but who has not paid the reduced rate of tax by return during that year, may file a claim using form TTB F 5620.8, for refund of tax excessively paid on beer during that year. Claims for refund of tax will be filed as provided in [§ 25.285](/current/title-27/section-25.285).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended ([26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1987, as amended by T.D. ATF-251, [52 FR 19313](https://www.federalregister.gov/citation/52-FR-19313), May 22, 1987; T.D. TTB-41, [71 FR 5604](https://www.federalregister.gov/citation/71-FR-5604), Feb. 2, 2006; T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 25.167 Notice of brewer to pay reduced rate of tax.
(a) *Requirement to file notice.* Every brewer who desires to pay the reduced rate of tax on beer authorized by [26 U.S.C. 5051(a)(2)](https://www.govinfo.gov/link/uscode/26/5051) by tax return, Form 5000.24, shall prepare a notice containing the information required by [paragraph (b)](/current/title-27/section-25.167#p-25.167\(b\)) of this section. The brewer shall file this notice with the appropriate TTB officer for the first return period (or prepayment return) during which the brewer pays tax on beer at the reduced rate. The brewer shall file the notice each year in which payment of the reduced rate of tax on beer is made by return.
(b) *Information to be furnished.* Each notice described in [paragraph (a)](/current/title-27/section-25.167#p-25.167\(a\)) of this section will contain the following information:
(1) A statement that the brewer will not or is not likely to produce more than 2,000,000 barrels of beer in the calendar year for which the notice is filed.
(2) A statement that the brewer is not a member of a controlled group of brewers, or if the brewer is a member of a controlled group of brewers, a statement that the controlled group will not or is not likely to produce more than 2,000,000 barrels of beer in the calendar year for which the notice is filed.
(3) If the brewer operates more than one brewery, a statement of the locations of all the breweries and a statement of how the 60,000 barrel limitation for the reduced rate of tax will be apportioned among the breweries. If the brewer is a member of a controlled group of brewers, a statement of the names and locations of all other brewers in the group and a statement of how the 60,000 barrels limitation will be apportioned among the brewers in the group.
(c) *Perjury statement.* Each notice described in this section will be executed by the brewer under penalties of perjury as defined in [§ 25.11](/current/title-27/section-25.11).
(Act of Aug. 16, 1954, 68A Stat. 749, as amended ([26 U.S.C. 6065](https://www.govinfo.gov/link/uscode/26/6065)); sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended, 1395, as amended ([26 U.S.C. 5415](https://www.govinfo.gov/link/uscode/26/5415), [5555](https://www.govinfo.gov/link/uscode/26/5555)))
#### § 25.168 Employer identification number.
The employer identification number (defined at [26 CFR 301.7701-12](/current/title-26/section-301.7701-12)) of the taxpayer who has been assigned the number will be shown on each return on Form 5000.24, filed under this part. Failure of the taxpayer to include the employer identification number on Form 5000.24 may result in imposition of the penalty specified in [§ 70.113 of this chapter](/current/title-27/section-70.113). A brewer shall apply for an employer identification number on IRS Form SS-4 as provided in [§ 25.169](/current/title-27/section-25.169).
(Pub. L. 87-397, 75 Stat. 828, as amended ([26 U.S.C. 6109](https://www.govinfo.gov/link/uscode/26/6109), [6676](https://www.govinfo.gov/link/uscode/26/6676)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-301, [55 FR 47605](https://www.federalregister.gov/citation/55-FR-47605), Nov. 14, 1990; T.D. TTB-79, [74 FR 37405](https://www.federalregister.gov/citation/74-FR-37405), July 28, 2009]
#### § 25.169 Application for employer identification number.
(a) *Form SS-4.* The taxpayer must obtain an employer identification number (EIN) by filing an application with the Internal Revenue Service (IRS) on IRS Form SS-4. Form SS-4 is available from the local IRS Service Center, from the IRS District Director, the IRS Web site at *[https://www.irs.gov](https://www.irs.gov)* or from TTB's National Revenue Center. The taxpayer may file this form with IRS by mail, telephone, or fax by following the instructions on the form.
(b) *Time limit.* If the taxpayer has not already received, or applied for, an EIN at the time that the first return on TTB Form 5000.24, Excise Tax Return, is filed, the taxpayer must apply for an EIN not later than seven days from the date of filing the Form 5000.24.
(c) *One EIN only.* Each taxpayer must obtain and use only one EIN, regardless of the number of places of business for which the proprietor is required to file a tax return under this subpart.
([26 U.S.C. 6109](https://www.govinfo.gov/link/uscode/26/6109))
\[T.D. TTB-79, [74 FR 37405](https://www.federalregister.gov/citation/74-FR-37405), July 28, 2009, as amended by T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
### Prepayment of Tax
#### § 25.173 Brewer in default.
(a) When a remittance in payment of taxes on beer is not paid upon presentment of check or money order tendered, or when the brewer is otherwise in default in payment of tax under [§ 25.164](/current/title-27/section-25.164), beer may not be removed for consumption or sale or taken from the brewery for consumption or sale until the tax has been prepaid as provided in [§ 25.175](/current/title-27/section-25.175). The brewer shall continue to prepay while in default and thereafter until the appropriate TTB officer finds the revenue will not be jeopardized by deferred payment of tax as provided in [§ 25.164](/current/title-27/section-25.164).
(b) Any remittance made while the brewer is required to prepay under this section will be in cash or in the form of a certified, cashier's or treasurer's check drawn on any bank or trust company incorporated under the laws of the United States, or under the law of any State, Territory, or possession of the United States, or in the form of a money order as provided in [§ 70.61 of this chapter](/current/title-27/section-70.61) (payment by check or money order), or will be made in the form of an electronic fund transfer as provided by [§§ 25.164](/current/title-27/section-25.164) and [25.165](/current/title-27/section-25.165).
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1987, as amended by T.D. ATF-251, [52 FR 19313](https://www.federalregister.gov/citation/52-FR-19313), May 22, 1987; T.D. ATF-301, [55 FR 47605](https://www.federalregister.gov/citation/55-FR-47605), Nov. 14, 1990]
#### § 25.174 Bond not sufficient.
When a brewer has filed a bond and the penal sum of the brewer's bond is in less than the maximum amount, the brewer shall prepay the tax on any withdrawal which would cause the outstanding liability for tax to exceed the limits of coverage of the bond. Prepayments will be made in accordance with [§ 25.175](/current/title-27/section-25.175).
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. TTB-146, [82 FR 1130](https://www.federalregister.gov/citation/82-FR-1130), Jan. 4, 2017]
#### § 25.175 Prepayment of tax.
(a) *General.* When a brewer has filed a bond and a brewer is required to prepay tax under [§ 25.173](/current/title-27/section-25.173), or if the penal sum of the bond, Form 5130.22, is insufficient for deferral of payment of tax on beer to be removed for consumption or sale, or if a brewer is not entitled to defer the tax under the provisions of this subpart, the brewer shall prepay the tax before any beer is removed for consumption or sale, or taken out of the brewery for removal for consumption or sale.
(b) *Method of prepayment.*
(1) Prepayment will be made by forwarding a tax return, Form 5000.24, with remittance, covering the tax on beer.
(2) If a brewer is required by [§ 25.165](/current/title-27/section-25.165) to make payment of tax by electronic fund transfer, the brewer shall prepay the tax before any beer can be removed for consumption or sale by completing the return and by forwarding it, in accordance with the instructions on the form. At the same time, the brewer shall direct his or her bank to make remittance by EFT.
(3) For the purpose of complying with this section, the term *forwarding* means depositing in the U.S. mail, properly addressed in accordance with the instructions on the form.
(Act of Aug. 16, 1954, 68A Stat. 777, as amended ([26 U.S.C. 6311](https://www.govinfo.gov/link/uscode/26/6311)); sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended ([26 U.S.C. 5061](https://www.govinfo.gov/link/uscode/26/5061)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1987, as amended by T.D. ATF-251, [52 FR 19313](https://www.federalregister.gov/citation/52-FR-19313), May 22, 1987; T.D. TTB-146, [82 FR 1130](https://www.federalregister.gov/citation/82-FR-1130), Jan. 4, 2017]
### Failure To Pay Tax
#### § 25.177 Evasion of or failure to pay tax; failure to file a tax return.
Sections 5671, 5673, 5684, 6651, and 6656 of Title 26 United States Code provide penalties for evasion or failure to pay tax on beer or for failure to file a tax return.
(Act of Aug. 16, 1954, 68A Stat. 821, as amended, 826, as amended ([26 U.S.C. 6651](https://www.govinfo.gov/link/uscode/26/6651), [6656](https://www.govinfo.gov/link/uscode/26/6656)); sec. 201, Pub. L. 85-859, 72 Stat. 1408, 1410, as amended ([26 U.S.C. 5671](https://www.govinfo.gov/link/uscode/26/5671), [5673](https://www.govinfo.gov/link/uscode/26/5673), [5684](https://www.govinfo.gov/link/uscode/26/5684)))
## Subpart L—Removals Without Payment of Tax
### Transfer to Another Brewery of Same Ownership
#### § 25.181 Eligibility.
A brewer may remove beer without payment of tax for transfer to any other brewery of the same ownership. These removals include a removal from a brewery owned by one corporation to a brewery owned by another corporation if (a) one corporation owns the controlling interest in the other corporation, or (b) the controlling interest in each corporation is owned by the same person. Beer removed under this section may, while in transit, be reconsigned to another brewery of the same ownership or be returned to the shipping brewery.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended ([26 U.S.C. 5414](https://www.govinfo.gov/link/uscode/26/5414)))
#### § 25.182 Kinds of containers.
A brewer may transfer beer without payment of tax from one brewery to another brewery belonging to the same brewer (a) in the brewer's packages or (b) in bulk containers, subject to limitations and conditions as may be imposed by the appropriate TTB officer. The brewer shall mark, brand or label containers as provided by [subpart J of this part](/current/title-27/part-25/subpart-J).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended ([26 U.S.C. 5414](https://www.govinfo.gov/link/uscode/26/5414)))
#### § 25.183 Determination of quantity transferred.
The shipping brewer shall determine the quantity of beer shipped at the time of removal from the consignor brewery, and the receiving brewer shall determine the quantity of beer received at the time of receipt at the consignee brewery. The brewer shall equip the consignor and consignee breweries with suitable measuring devices to allow accurate determination of the quantities of beer to be shipped and received in bulk conveyances.
(Sec 201, Pub. L. 85-859, 72 Stat. 1389, as amended ([26 U.S.C. 5414](https://www.govinfo.gov/link/uscode/26/5414)))
#### § 25.184 Losses in transit.
(a) *Liability for losses.* The brewery to which beer is transferred is liable for the tax on beer lost in transit. If beer is reconsigned while in transit or returned to the shipping brewery, the brewery to which the beer is reconsigned or returned is liable for the tax on beer lost in transit.
(b) *Losses allowable without claim.* If loss of beer being transferred does not exceed two percent of the quantity shipped, the brewer is not required to file a report of loss or a claim for allowance of the loss if there are no circumstances indicating that the beer, or any portion of the beer lost, was stolen or otherwise diverted to an unlawful purpose.
(c) *Losses requiring claim.* If loss of beer during transit exceeds two percent of the quantity shipped, the brewer shall submit a claim under penalties of perjury for remission of the tax on the entire loss. The brewer shall prepare and submit the claim as provided in [§ 25.286](/current/title-27/section-25.286).
(d) *Losses requiring immediate report.* The brewer shall report to the appropriate TTB officer a loss by fire, theft, casualty or any other unusual loss as soon as it becomes known.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended 1389 ([26 U.S.C. 5056](https://www.govinfo.gov/link/uscode/26/5056), [5414](https://www.govinfo.gov/link/uscode/26/5414)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-437, [66 FR 5479](https://www.federalregister.gov/citation/66-FR-5479), Jan. 19, 2001; T.D. TTB-146, [82 FR 1130](https://www.federalregister.gov/citation/82-FR-1130), Jan. 4, 2017]
#### § 25.185 Mingling.
Beer transferred without payment of tax from one brewery to another brewery belonging to the same brewer may be mingled with beer of the receiving brewery. The brewer may handle the beer transferred in accordance with the requirements of this part relating to beer produced in the receiving brewery.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended ([26 U.S.C. 5414](https://www.govinfo.gov/link/uscode/26/5414)))
#### § 25.186 Record of beer transferred.
(a) *Preparation of invoice.* When beer is transferred between breweries without payment of tax, the shipping brewer shall prepare a serially numbered invoice or commercial record, in duplicate, covering the transfer. The invoice will be marked “transfer without payment of tax” and will contain the following information:
(1) Name and address of shipping brewer;
(2) Date of shipment;
(3) Name and address of receiving brewer;
(4) For cases, the number and size of cases and the total barrels;
(5) For kegs, the number and size of kegs and the total barrels;
(6) For shipments in bulk containers, the type of container, identity of the container and the total barrels.
(b) *Reconsignment of beer.* When beer is reconsigned in transit to another brewery of the same ownership, the shipping brewer shall
(1) prepare a new invoice showing reconsignment to another brewery and shall void all copies of the original invoice, or
(2) shall mark all copies of the original invoice with the words “Reconsigned to \_\_\_\_\_\_,” followed by the name and address of the brewery to which the beer is reconsigned.
(c) *Disposition of invoice.* On shipment of the beer, the shipping brewer shall send the original copy of the invoice to the receiving brewer, and shall retain the other copy for the brewery records. On receipt of the beer, the receiving brewer (including a brewer to whom beer was returned or reconsigned in transit) shall note on the invoice any discrepancies in the beer received, and retain the invoice in the brewery records.
(d) *Preparation of records and report.* The shipping brewer shall use the invoice showing beer removed to another brewery without payment of tax in preparing daily records under [§ 25.292](/current/title-27/section-25.292) and in preparing the Brewer's Report of Operations, Form 5130.9. The receiving brewer (including a brewer to whom beer was returned or reconsigned in transit) shall use the invoice showing beer received from another brewery without payment of tax in preparing daily records under [§ 25.292](/current/title-27/section-25.292) and in preparing the Brewer's Report of Operations, Form 5130.9.
(Sec. 201. Pub. L. 85-859, 72 Stat. 1389, as amended ([26 U.S.C. 5414](https://www.govinfo.gov/link/uscode/26/5414)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-345, [58 FR 40357](https://www.federalregister.gov/citation/58-FR-40357), July 28, 1993]
### Removal of Beer Unfit for Beverage Use
#### § 25.191 General.
A brewer may remove sour or damaged beer, or beer which the brewer has deliberately rendered unfit for beverage use, from the brewery without payment of tax for use in manufacturing. Unfit beer may be removed under this section for use as distilling material at alcohol fuel plants qualified under [subpart X of part 19 of this chapter](/current/title-27/part-19/subpart-X).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended ([26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 25.192 Removal of sour or damaged beer.
(a) *Containers.* The brewer shall remove sour or damaged beer
(1) in casks or other packages, containing not less than one barrel each and unlike those ordinarily used for packaging beer, or
(2) in tanks, tank cars, tank trucks, tank ships, barges, or deep tanks of a vessel. The brewer shall mark the nature of the contents on each container.
(b) *Beer meter.* The brewer shall remove sour or damaged beer without passing it through the meter (if any) or racking machine.
(c) *Records and reports.* The brewer shall record the removal of sour or damaged beer in daily records under [§ 25.292](/current/title-27/section-25.292) and on the Brewer's Report of Operations, Form 5130.9.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended ([26 U.S.C. 5033](https://www.govinfo.gov/link/uscode/26/5033)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-345, [58 FR 40357](https://www.federalregister.gov/citation/58-FR-40357), July 28, 1993]
### Removals for Analysis, Research, Development or Testing
#### § 25.195 Removals for analysis.
A brewer may remove beer, without payment of tax, to a laboratory for analysis to determine the character or quality of the product. Beer may be removed for analysis in packages or in bulk containers. The brewer shall record beer removed for analysis in daily records under [§ 25.292](/current/title-27/section-25.292) and on the Brewer's Report of Operations, Form 5130.9.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended ([26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-345, [58 FR 40357](https://www.federalregister.gov/citation/58-FR-40357), July 28, 1993]
#### § 25.196 Removals for research, development or testing.
(a) A brewer may remove beer, without payment of tax, for use in research, development, or testing (other than consumer testing or other market analysis) of processes, systems, materials, or equipment relating to beer or brewery operations. Beer may be removed for research, development or testing in packages or in bulk containers.
(b) The brewer shall mark each barrel, keg, case, or shipping container with the name and address of the brewer and of the consignee, the identity of the product, and the quantity of the product. If necessary to protect the revenue, the appropriate TTB officer may require a brewer to mark each container with the words “Not for Consumption or Sale.” If beer is removed in a bulk conveyance, the brewer shall place the marks on the route board of the conveyance.
(c) The brewer shall record beer removed for research, development, or testing in daily records under [§ 25.292](/current/title-27/section-25.292) and on the Brewer's Report of Operations, Form 5130.9.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended ([26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-345, [58 FR 40357](https://www.federalregister.gov/citation/58-FR-40357), July 28, 1993]
### Removal of Beer to a Contiguous Distilled Spirits Plant
#### § 25.201 Removal by pipeline.
A brewer may remove beer from the brewery, without payment of tax, by pipeline to the bonded premises of a distilled spirits plant which is authorized to produce distilled spirits and which is located contiguous to the brewery.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1365, as amended, 1389, as amended ([26 U.S.C. 5222](https://www.govinfo.gov/link/uscode/26/5222), [5412](https://www.govinfo.gov/link/uscode/26/5412)))
### Exportation
#### § 25.203 Exportation without payment of tax.
A brewer may remove beer without payment of tax (a) for exportation, (b) for use as supplies on vessels and aircraft, or (c) for transfer to and deposit in foreign-trade zones for exportation or for storage pending exportation, in accordance with [part 28 of this chapter](/current/title-27/part-28). Beer may be removed from a brewery in bottles, kegs, or in bulk containers.
(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended ([19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309)); sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended ([19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c)); sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended ([26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, T.D. TTB-8, [69 FR 3830](https://www.federalregister.gov/citation/69-FR-3830), Jan. 27, 2004]
### Beer For Personal or Family Use
#### § 25.205 Production.
(a) Any adult may produce beer, without payment of tax, for personal or family use and not for sale. An adult is any individual who is 18 years of age or older. If the locality in which the household is located requires a greater minimum age for the sale of beer to individuals, the adult shall be that age before commencing the production of beer. This exemption does not authorize the production of beer for use contrary to State or local law.
(b) The production of beer per household, without payment of tax, for personal or family use may not exceed:
(1) 200 gallons per calendar year if there are two or more adults residing in the household, or
(2) 100 gallons per calendar year if there is only one adult residing in the household.
(c) Partnerships except as provided in [§ 25.207](/current/title-27/section-25.207), corporations or associations may not produce beer, without payment of tax, for personal or family use.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended ([26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053)))
#### § 25.206 Removal of beer.
Beer made under [§ 25.205](/current/title-27/section-25.205) may be removed from the premises where made for personal or family use including use at organized affairs, exhibitions or competitions such as homemaker's contests, tastings or judging. Beer removed under this section may not be sold or offered for sale.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended ([26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053)))
#### § 25.207 Removal from brewery for personal or family use.
Any adult, as defined in [§ 25.205](/current/title-27/section-25.205), who operates a brewery under this part as an individual owner or in partnership with others, may remove beer from the brewery without payment of tax for personal or family use. The amount of beer removed for each household, without payment of tax, per calendar year may not exceed 100 gallons if there is one adult residing in the household or 200 gallons if there are two or more adults residing in the household. Beer removed in excess of the above limitations will be reported as a taxable removal.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended ([26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053)))
## Subpart M—Beer Returned to Brewery
#### § 25.211 Beer returned to brewery.
(a) *General.* Beer, produced in the United States, on which the brewer has paid or determined the tax may be returned to any brewery of the brewer. Upon return of the beer to the brewery, the brewer shall determine the actual quantity of beer received, expressed in barrels. For cases or bottles, the label may be used to determine the quantity. When kegs or cases containing less than the original contents are received, the brewer shall determine the actual quantity of beer by weight or by other accurate means. The brewer shall determine the balling and alcohol content of returned keg beer unless the keg is equipped with tamper-proof fittings. The quantity of beer returned may be established by weighing individual packages and subtracting package weight, or by weighing accumulated beer and subtracting tare weight of dumpsters, pallets, packages and the like.
(b) *Disposition of returned beer.* The brewer may dispose of beer returned under this subpart in any manner prescribed for beer which has never left the brewery. If returned beer is again removed for consumption or sale, tax will be determined and paid without respect to the tax which was determined or paid at the time of prior removal of the beer.
(c) *Records.* For beer returned to the brewery under this subpart, the brewer's daily records under [§ 25.292](/current/title-27/section-25.292) will show:
(1) Date;
(2) Quantity of beer returned;
(3) If the title to the beer has passed, the name and address of the person returning the beer; and
(4) Name and address of the brewery from which the beer was removed, if different from the brewery to which returned.
(d) *Supporting records.* The records of returned beer will be supported by invoices, credit memoranda or other commercial papers, and will differentiate between beer returned to the brewery from which removed and beer returned to a brewery different from the one from which removed.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended, 1335, as amended, 1390, as amended ([26 U.S.C. 5054](https://www.govinfo.gov/link/uscode/26/5054), [5056](https://www.govinfo.gov/link/uscode/26/5056), [5415](https://www.govinfo.gov/link/uscode/26/5415)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 25.212 Beer returned to brewery from which removed.
If beer on which the tax has been determined or paid is returned to the brewery from which removed, the brewer shall take the quantity of beer as an offset or deduction against the quantity of beer removed for consumption or sale from the brewery on that business day, as provided in [§ 25.159](/current/title-27/section-25.159)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended, 1390, as amended ([26 U.S.C. 5056](https://www.govinfo.gov/link/uscode/26/5056), [5415](https://www.govinfo.gov/link/uscode/26/5415)))
#### § 25.213 Beer returned to brewery other than that from which removed.
(a) *Refund or adjustment of tax.* If beer on which the tax has been determined or paid is returned to a brewery of the brewer other than the one from which removed, the brewer may make a claim for refund or relief of tax or may make an adjustment to the beer tax return, for the tax on the beer returned to the brewery. The brewer may not take an offset for beer returned to the brewery other than the one from which removed. Procedures for filing claims for refund or relief of tax or for making adjustments to the beer tax return are contained in [subpart T of this part](/current/title-27/part-25/subpart-T).
(b) *Notice.* A brewer need not file notice of intention to return beer to a brewery other than the one from which removed unless required by the appropriate TTB officer. When a notice is required, the brewer shall serially number each notice and execute it under penalties of perjury as defined in [§ 25.11](/current/title-27/section-25.11). The brewer must file it with the appropriate TTB officer. The notice will contain the following information:
(1) The number and sizes of kegs and the actual quantity of beer, in barrels; or the number of cases and the number and sizes of bottles within the cases and the actual quantity of beer, in barrels;
(2) The name and address of the brewery from which the beer was removed;
(3) A statement that the tax on the beer has been fully paid or determined and the rate at which the tax on the beer was paid or determined; and
(4) If the title to the beer has passed, the name and address of the person returning the beer.
(c) *Return of beer.* If the brewer is required to file a notice of intention to return beer to the brewery, the brewer may bring the beer onto the brewery premises prior to filing the notice. The brewer shall segregate the returned beer from all other beer at the brewery and clearly identify it as returned beer. The returned beer will be retained intact for inspection by an appropriate TTB officer until the notice has been filed and disposition authorized.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended ([26 U.S.C. 5056](https://www.govinfo.gov/link/uscode/26/5056)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-437, [66 FR 5479](https://www.federalregister.gov/citation/66-FR-5479), Jan. 19, 2001]
## Subpart N—Voluntary Destruction
#### § 25.221 Voluntary destruction of beer.
(a) *On brewery premises.*
(1) A brewer may destroy, at the brewery, beer on which the tax has not been determined or paid.
(2) A brewer operating a tavern on brewery premises under [§ 25.25](/current/title-27/section-25.25) may destroy taxpaid or tax-determined beer stored on brewery premises, in accordance with the requirements of [§ 25.225](/current/title-27/section-25.225).
(b) *Destruction without return to brewery.* A brewer may destroy beer on which the tax has been paid or determined at a location other than any of the breweries operated by the brewer, upon compliance with this subpart.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended ([26 U.S.C. 5056](https://www.govinfo.gov/link/uscode/26/5056)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986; [51 FR 9190](https://www.federalregister.gov/citation/51-FR-9190), Mar. 18, 1986; T.D. ATF-268, [53 FR 8629](https://www.federalregister.gov/citation/53-FR-8629), Mar. 16, 1988, as amended by T.D. 372, [61 FR 20724](https://www.federalregister.gov/citation/61-FR-20724), May 8, 1996; T.D. TTB-91, [76 FR 5478](https://www.federalregister.gov/citation/76-FR-5478), Feb. 1, 2011]
#### § 25.222 Notice of brewer.
(a) *Beer to be destroyed.* When a brewer possesses beer which has been taxpaid or tax determined and which the brewer wishes to destroy at a location other than at any of the brewer's breweries, the brewer shall give written notice of intention to destroy the beer. The brewer must submit this notice to the appropriate TTB officer.
(b) *Execution of notice.* The brewer shall serially number each notice and execute each notice under penalties of perjury as defined in [§ 25.11](/current/title-27/section-25.11). The brewer shall specify the date on which the beer is to be destroyed; this date may not be less than 12 days from the date the notice is mailed or delivered to the appropriate TTB officer.
(c) *Information to be furnished.* The notice will contain the following information:
(1) The number and sizes of kegs and the actual quantity of beer, in barrels; or the number of cases and the number and sizes of bottles within the cases, and the actual quantity of beer in barrels. When kegs containing less than the actual contents are to be destroyed, the brewer shall determine the actual content of beer by weight or by other accurate means.
(2) The date on which the beer was received for destruction.
(3) A statement that the tax on the beer has been fully paid or determined and the rate at which the tax on the beer was paid or determined.
(4) If the title of the beer has passed, the name and address of the person returning the beer.
(5) The location at which the brewer desires to destroy the beer and the reason for not returning the beer to the brewery.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended ([26 U.S.C. 5056](https://www.govinfo.gov/link/uscode/26/5056)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-437, [66 FR 5479](https://www.federalregister.gov/citation/66-FR-5479), Jan. 19, 2001]
#### § 25.223 Destruction of beer off brewery premises.
(a) *Destruction without supervision.* A brewer may destroy beer without supervision if the appropriate TTB officer does not advise the brewer before the date specified in the notice that destruction of the beer is to be supervised.
(b) *Destruction with supervision.* The appropriate TTB officer may require that an appropriate TTB officer verify the information in the notice of destruction or witness the destruction of the beer. The appropriate TTB officer may also require a delay in the destruction of the beer or, if the place of destruction is not readily accessible to an appropriate TTB officer, may require that the beer be moved to a more convenient location. In this case, the brewer may not destroy the beer except under the conditions imposed by the appropriate TTB officer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended ([26 U.S.C. 5056](https://www.govinfo.gov/link/uscode/26/5056)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-437, [66 FR 5479](https://www.federalregister.gov/citation/66-FR-5479), Jan. 19, 2001; T.D. TTB-91, [76 FR 5478](https://www.federalregister.gov/citation/76-FR-5478), Feb. 1, 2011]
#### § 25.224 Refund or adjustment of tax.
(a) *Claim for refund or relief of tax.* The tax paid by a brewer on beer produced in the United States and destroyed in accordance with this subpart may be refunded to the brewer. If the tax has not been paid, the brewer may be relieved of liability for the tax. Claims for refund or relief of tax will be filed as provided in [subpart T of this part](/current/title-27/part-25/subpart-T).
(b) *Adjustments to the excise tax return.* A brewer may make an adjustment (without interest) to the excise tax return, Form 5000.24, covering the tax paid on beer produced in the United States and destroyed in accordance with this subpart. Procedures for making adjustments to tax returns are contained in [subpart T of this part](/current/title-27/part-25/subpart-T).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended ([26 U.S.C. 5056](https://www.govinfo.gov/link/uscode/26/5056)))
#### § 25.225 Destruction of taxpaid beer which was never removed from brewery premises.
(a) *General.* A brewer operating a tavern on brewery premises under [§ 25.25](/current/title-27/section-25.25) may destroy taxpaid or tax-determined beer which was never removed from brewery premises, in accordance with the recordkeeping requirements of [paragraph (b)](/current/title-27/section-25.225#p-25.225\(b\)) of this section, and with the benefit of the tax refund provisions of [paragraph (c)](/current/title-27/section-25.225#p-25.225\(c\)) of this section.
(b) *Recordkeeping.*
(1) When taxpaid or tax-determined beer which was never removed from brewery premises is destroyed, the brewer shall prepare a record of the quantity of beer destroyed, and the reason for, date of, and method of, destruction. The brewer may prepare this record on Form 2635 (5620.8) for submission as a claim under [§ 25.283](/current/title-27/section-25.283).
(2) When required by the appropriate TTB officer, the brewer shall notify the appropriate TTB officer prior to the intended destruction, in accordance with procedures established by the appropriate TTB officer.
(c) *Refund of tax.* After destruction is completed, the brewer may file a claim for refund or credit of tax, in accordance with [§ 25.283(c)](/current/title-27/section-25.283#p-25.283\(c\)).
\[T.D. ATF-268, [53 FR 8629](https://www.federalregister.gov/citation/53-FR-8629), Mar. 16, 1988, as amended by T.D. TTB-91, [76 FR 5478](https://www.federalregister.gov/citation/76-FR-5478), Feb. 1, 2011]
## Subpart O—Beer Purchased From Another Brewer
#### § 25.231 Finished beer.
(a) A brewer may obtain beer in barrels and kegs, finished and ready for sale from another brewer. The purchasing brewer may furnish the producing brewer barrels and kegs marked with the purchasing brewer's name and location. The producing brewer shall pay the tax as provided in [subpart K of this part](/current/title-27/part-25/subpart-K).
(b) A brewer may not purchase taxpaid or tax determined beer from another brewer in bottles or cans which bear the name and address of the purchasing brewer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended ([26 U.S.C. 5413](https://www.govinfo.gov/link/uscode/26/5413)))
#### § 25.232 Basic permit.
A brewer who engages in the business of purchasing beer for resale is required to possess a wholesaler's or importer's basic permit under the provisions of section 3(c) of the Federal Alcohol Administration Act and [part 1 of this chapter](/current/title-27/part-1).
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
## Subpart P—Cereal Beverage
#### § 25.241 Production.
Brewers may produce cereal beverage and remove it without payment of tax from the brewery. The method of production shall insure that the alcohol content of the cereal beverage will not increase while in the original container after removal from the brewery. The brewer shall keep cereal beverage separate from beer, and shall measure the quantity of cereal beverage transferred for packaging in accordance with [§ 25.41](/current/title-27/section-25.41).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended ([26 U.S.C. 5411](https://www.govinfo.gov/link/uscode/26/5411)))
#### § 25.242 Markings.
(a) *Designation.* When bottled or packaged, cereal beverage may be designated “Cereal Beverage,” “Malt Beverage,” “Near Beer,” or other distinctive name. If designated “Near Beer,” those words will be printed identically in the same size or style of type, in the same color of ink, and on the same background.
(b) *Barrels and kegs.* A brewer may remove cereal beverage in barrels and kegs if the sides are durably painted at each end with a white stripe not less than 4 inches in width and the heads are painted in a solid color, with conspicuous lettering in a contrasting color reading “Nontaxable under section 5051 I.R.C.” The brewer shall also legibly mark the brewer's name or trade name and the address on the container.
(c) *Bottles.* Bottle labels shall show the name or trade name and address of the brewer, the distinctive name of the beverage, if any, and the legend “Nontaxable under section 5051 I.R.C.” Other information which is not inconsistent with the requirements of this section may be shown on bottle labels.
(d) *Cases.* The brewer shall mark cases or shipping containers to show the nature of the product and the name or trade name and address of the brewer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended ([26 U.S.C. 5411](https://www.govinfo.gov/link/uscode/26/5411)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
## Subpart Q—Removal of Brewer's Yeast and Other Articles
#### § 25.251 Authorized removals.
(a) *Brewer's yeast.* A brewer may remove brewer's yeast, in liquid or solid form containing not less than 10 percent solids (as determined by the methods of analysis of the American Society of Brewing Chemists), from the brewery in barrels, tank trucks, in other suitable containers, or by pipeline.
(b) *Containers.* Containers will bear a label giving the name and location of the brewery and including the words “Brewer's Yeast.”
(c) *Pipeline.* If brewer's yeast is removed by pipeline, the pipeline will be described in the Brewer's Notice, Form 5130.10. The premises where the brewer's yeast is received is subject to inspection by an appropriate TTB officer during ordinary business hours.
(d) *Other articles.* A brewer may remove malt, malt syrup, wort, and other articles from the brewery.
(e) *Methods of Analysis of the American Society of Brewing Chemists, Seventh Edition (1976).* In reference to [paragraph (a)](/current/title-27/section-25.251#p-25.251\(a\)) of this section, this incorporation by reference was approved by the Director of the Federal Register on March 23, 1981, and is available for inspection or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: *[https://www.archives.gov/federal-register/cfr/ibr-locations.html](https://www.archives.gov/federal-register/cfr/ibr-locations.html).* This publication is available from the American Society of Brewing Chemists, 40 Pilot Knob Road, St. Paul, Minnesota 55121.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389, as amended ([26 U.S.C. 5411](https://www.govinfo.gov/link/uscode/26/5411)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended at [69 FR 18803](https://www.federalregister.gov/citation/69-FR-18803), Apr. 9, 2004; T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 25.252 Records.
(a) *Production.* The brewer shall keep records of the production of malt syrup, wort, and other articles which are removed from the brewery. The record shall include the quantities and kinds of materials used, and in the case of wort and concentrated wort, the balling.
(b) *Removals.* The brewer shall keep records of removals of brewer's yeast, malt and other articles from the brewery. The record shall include the quantity and date of removal of each lot, and the name and address of the consignee. These records may consist of invoices or shipping documents.
(c) *Inspection.* All records under this section shall be available for inspection at the brewery by an appropriate TTB officer during normal business hours.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended ([26 U.S.C. 5415](https://www.govinfo.gov/link/uscode/26/5415)))
## Subpart R—Beer Concentrate
#### § 25.261 General.
(a) *Authorized processes.* A brewer may, in accordance with this subpart—
(1) Produce concentrate from beer,
(2) Reconstitute beer from concentrate,
(3) Transfer concentrate from one brewery to another brewery of the same ownership, and
(4) Remove concentrate without payment of tax for exportation, or for transfer to and deposit in a foreign-trade zone for exportation or for storage pending exportation in accordance with [part 28 of this chapter](/current/title-27/part-28).
(b) *Brewery treatment of concentrate.* Beer reconstituted from concentrate in accordance with this subpart shall (except with respect to the additional labeling of reconstituted beer under [§ 25.263](/current/title-27/section-25.263)) be treated the same as beer which has not been concentrated and reconstituted.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1388, as amended ([26 U.S.C. 5401](https://www.govinfo.gov/link/uscode/26/5401)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. TTB-8, [69 FR 3830](https://www.federalregister.gov/citation/69-FR-3830), Jan. 27, 2004]
#### § 25.262 Restrictions and conditions on processes of concentration and reconstitution.
(a) *Conditions on concentration.* A brewer may not employ any process of concentration which separates alcohol spirits from any fermented substance.
(b) *Conditions on reconstitution* —
(1) The process of reconstitution of beer will consist of the addition to the concentrate of carbon dioxide and water only.
(2) A brewer may not employ any process of concentration or reconstitution unless the beer upon reconstitution will, without the addition of any substance other than carbon dioxide and water, possess the taste, aroma, color, and other characteristics of beer which has not been concentrated.
(3) The process of reconstitution shall provide for the addition of sufficient water to restore the concentrate to a volume not less than, and an alcohol content not greater than, that of the beer used to produce the concentrate.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1315, as amended, 1388, as amended ([26 U.S.C. 5002](https://www.govinfo.gov/link/uscode/26/5002), [5401](https://www.govinfo.gov/link/uscode/26/5401)))
#### § 25.263 Production of concentrate and reconstitution of beer.
(a) *Operations at brewery.* A brewer may concentrate beer or reconstitute beer only at a brewery.
(b) *Marking of containers.* Containers of concentrate transferred to other breweries of the same ownership, and containers of concentrate removed for export shall be marked, branded and labeled in the same manner as prescribed for containers of beer in [subpart J of this part](/current/title-27/part-25/subpart-J). All containers shall be identified as containers of beer concentrate.
(c) *Mingling with beer.* A brewer may not mingle concentrate with unconcentrated beer. A brewer may mingle reconstituted beer with other beer at the brewery.
(d) *Additional labeling.* Barrels, kegs, and bottles containing beer produced from concentrate will show by label or otherwise the statement “PRODUCED FROM . . . CONCENTRATE,” the blank to be filled in with the appropriate class designation of the beer (beer, lager, ale, stout, etc.) from which the concentrate was made. The statement will be conspicuous and readily legible and, in the case of bottled beer, will appear in direct conjunction with, and as a part of, the class designation. All parts of the class designation will appear in lettering of substantially the same size and kind.
(e) *Records and reports.* Brewers producing concentrate and brewers reconstituting beer from concentrate shall keep the records and reports required by [subpart U of this part](/current/title-27/part-25/subpart-U).
#### § 25.264 Transfer between breweries.
(a) *Authorized transfers.* A brewer may remove from the brewery, without payment of tax, concentrate produced from beer for transfer to any other brewery of the same ownership (within the limits of ownership described in [§ 25.181](/current/title-27/section-25.181)).
(b) *Record of concentrate transferred.* When transferring concentrate between breweries, the shipping brewer shall prepare for each conveyance a serially numbered invoice or commercial record covering the transfer. The invoice will be clearly marked to indicate that concentrate produced from beer is being transferred. The invoice will contain the following information:
(1) Name and address of shipping brewer;
(2) Date of shipment;
(3) Name and address of receiving brewer;
(4) The number of containers transferred, the balling, percentage of alcohol by volume, and the total barrels of concentrate; and
(5) A description of the beer from which the concentrate was produced including the number of barrels, balling, and percentage of alcohol by volume.
(c) *Disposition of invoice.* On shipment of the concentrate, the shipping brewer shall send the original copy of the invoice to the receiving brewer and shall retain a copy for the brewery records. On receipt of the concentrate, the receiving brewer shall note on the invoice any discrepancies in the concentrate received and retain the invoice in the brewery records.
## Subpart S—Pilot Brewing Plants
#### § 25.271 General.
(a) *Establishment.* A person may establish and operate a pilot brewing plant off the brewery premises for research, analytical, experimental, or developmental purposes relating to beer or brewery operations. Pilot brewing plants will be established as provided in this subpart.
(b) *Authorized removals.* Beer may be removed from a pilot brewing plant only for analysis or organoleptic examination.
(c) *Transfers between brewery and pilot brewing plant.* Subject to [subpart L of this part](/current/title-27/part-25/subpart-L), beer may be transferred to a pilot brewing plant from a brewery of the same ownership, and beer may be transferred without payment of tax from a pilot brewing plant to a brewery of the same ownership.
(d) *Other regulations applicable.* The provisions of subparts A, B, F, I, K, and of [§§ 25.63](/current/title-27/section-25.63), [25.64](/current/title-27/section-25.64), and [25.21](/current/title-27/section-25.21) are applicable to pilot brewing plants established under this subpart. Also, the provisions of [§§ 25.72-25.75](/current/title-27/section-25.72), [25.77](/current/title-27/section-25.77), [25.92](/current/title-27/section-25.92) and [25.94-25.105](/current/title-27/section-25.94) relating to bonds, and consents of surety, and of [§§ 25.131-25.134](/current/title-27/section-25.131) are applicable to bonds and consents of surety given, and to changes in the proprietorship, location, and premises of pilot brewing plants established under this subpart.
(Sec. 4, Pub. L. 91-673, 84 Stat. 2057, as amended ([26 U.S.C. 5417](https://www.govinfo.gov/link/uscode/26/5417)))
#### § 25.272 Application.
(a) *Form of application.* Any person desiring to establish a pilot brewing plant under the subpart shall file an application with the appropriate TTB officer. The application will be in writing and will include the following:
(1) Name and address of the applicant;
(2) Description of the premises and equipment to be used in the operations;
(3) Nature, purpose, and extent of the operations; and
(4) A statement that the applicant agrees to comply with all provisions of this part applicable to the operations to be conducted.
(b) *Additional information.* The appropriate TTB officer may at any time before or after approval of an application, require the submission of additional information necessary for administration of this part or for protection of the revenue.
(c) *Authorization of operations.* The appropriate TTB officer may authorize the operation of a pilot brewing plant if it is determined that the plant will be operated solely for one or more of the purposes specified in [§ 25.271](/current/title-27/section-25.271), and that operations will not jeopardize the revenue.
(d) *Withdrawal of authorization.* The appropriate TTB officer may withdraw authorization to operate a pilot brewing plant if in his or her judgment, the revenue would be jeopardized by the operations of the plant.
(e) *Commencement of operations.* A person may not begin operation of a pilot brewing plant until the appropriate TTB officer has approved the application required by this section.
(Sec. 4, Pub. L. 91-673, 84 Stat. 2057, as amended ([26 U.S.C. 5417](https://www.govinfo.gov/link/uscode/26/5417)))
#### § 25.273 Action on application.
If the appropriate TTB officer approves the application for a pilot brewing plant, he or she will note approval on the application and forward a copy to the applicant. The applicant must file the copy of the approved application at the premises, available for inspection by an appropriate TTB officer.
\[T.D. ATF-437, [66 FR 5480](https://www.federalregister.gov/citation/66-FR-5480), Jan. 19, 2001]
#### § 25.274 Bond.
(a) *Requirement.* Except as provided in [paragraph (d)](/current/title-27/section-25.274#p-25.274\(d\)) of this section, any person requesting authorization to establish a pilot brewing plant under this subpart shall execute and file a brewer's bond, Form 5130.22. A person may not begin operation of a pilot brewing plant until receiving notice from the appropriate TTB officer of the approval of the bond. Operations may continue only as long as an approved bond is in effect.
(b) *Penal sum.* The penal sum of a bond covering the premises of a pilot brewing plant will be an amount equal to the potential tax liability of the maximum quantity of beer on hand, in transit to the plant, and unaccounted for at any one time, computed by multiplying the quantity of beer in barrels by the rate of tax in [26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051). The penal sum of the bond (or total penal sum if original and strengthening bonds are filed) may not exceed $50,000 or be less than $500.
(c) *Conditions of bonds.* The bond will be conditioned that the operator of the pilot brewing plant shall pay, or cause to be paid, to the United States according to the laws of the United States and the provisions of this part, the taxes, including penalties and interest for which the operator shall become liable, on all beer brewed, produced, or received on the premises.
(d) *Bond exemption.* A person is not required to provide a bond under this section if the person is a brewer qualified under this part and if, under [§ 25.91(e)](/current/title-27/section-25.91#p-25.91\(e\)), the person is exempt from bond requirements applicable to brewers.
(Sec. 4, Pub. L. 91-673, 84 Stat. 2057, as amended ([26 U.S.C. 5417](https://www.govinfo.gov/link/uscode/26/5417)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D TTB-146, [82 FR 1130](https://www.federalregister.gov/citation/82-FR-1130), Jan. 4, 2017]
#### § 25.275 \[Reserved]
#### § 25.276 Operations and records.
(a) *Commencement of operations.* A person may commence operation of a pilot brewing plant upon receipt of the approved application and any required bond.
(b) *Reports.* The operator of a pilot brewing plant is not required to file the Brewer's Report of Operations, Form 5130.9.
(c) *Records.* The operator of a pilot brewing plant must maintain records which, in the opinion of the appropriate TTB officer, are appropriate to the type of operation being conducted. These records will include information sufficient to account for the receipt, production, and disposition of all beer received or produced on the premises, and the receipt (and disposition, if removed) of all brewing materials. These records will be available for inspection by an appropriate TTB officer.
(Sec. 4, Pub. L. 91-673, 84 Stat. 2057, as amended ([26 U.S.C. 5417](https://www.govinfo.gov/link/uscode/26/5417)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-345, [58 FR 40357](https://www.federalregister.gov/citation/58-FR-40357), July 28, 1993; T.D. ATF-437, [66 FR 5480](https://www.federalregister.gov/citation/66-FR-5480), Jan. 19, 2001; T.D. TTB-146, [82 FR 1130](https://www.federalregister.gov/citation/82-FR-1130), Jan. 4, 2017]
#### § 25.277 Discontinuance of operations.
When operations of a pilot brewing plant are to be discontinued, the operator shall notify the appropriate TTB officer stating the purpose of the notice and giving the date of discontinuance. When operations have been completed and all beer at the premises has been disposed of and accounted for, the appropriate TTB officer will note approval on the notice and return a copy to the operator.
## Subpart T—Refund or Adjustment of Tax or Relief From Liability
#### § 25.281 General.
(a) *Reasons for refund or adjustment of tax or relief from liability.* The tax paid by a brewer on beer produced in the United States may be refunded, or adjusted on the tax return (without interest) or, if the tax has not been paid, the brewer may be relieved of liability for the tax on:
(1) Beer returned to any brewery of the brewer subject to the conditions outlined in [subpart M of this part](/current/title-27/part-25/subpart-M);
(2) Beer voluntarily destroyed by the brewer subject to the conditions outlined in [subpart N of this part](/current/title-27/part-25/subpart-N);
(3) Beer lost by fire, theft, casualty, or act of God subject to the conditions outlined in [§ 25.282](/current/title-27/section-25.282).
(b) *Refund of beer tax excessively paid.* A brewer may be refunded the tax excessively paid on beer subject to the conditions outlined in [§ 25.285](/current/title-27/section-25.285).
(c) *Rate of tax.* Brewers who have filed the notice required by [§ 25.167](/current/title-27/section-25.167) and who have paid the tax on beer at the reduced rate of tax shall make claims for refund or relief of tax, or adjustments on the tax return, based upon the lower rate of tax. However, a brewer may make adjustments or claims for refund or relief of tax based on the higher rate of tax if the brewer can establish to the satisfaction of the appropriate TTB officer that the tax was paid or determined at the higher rate of tax.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended ([26 U.S.C. 5056](https://www.govinfo.gov/link/uscode/26/5056)))
#### § 25.282 Beer lost by fire, theft, casualty, or act of God.
(a) *General.* The tax paid by any brewer on beer produced in the United States may be adjusted (without interest) on the excise tax return, may be refunded or credited (without interest) or, if the tax has not been paid, the brewer may be relieved of liability for the tax if, before transfer of title to the beer to any other person, the beer is lost, whether by theft or otherwise, or is destroyed or otherwise rendered unmerchantable by fire, casualty, or act of God. The tax liability on excessive losses of beer from transfer between breweries of the same ownership may be remitted as provided in [§ 25.286](/current/title-27/section-25.286).
(b) *Unmerchantable beer.* When beer is rendered unmerchantable by fire, casualty, or act of God, refund, credit or adjustment of tax, or relief from liability of tax will not be allowed unless the brewer proves to the satisfaction of the appropriate TTB officer that the beer cannot be salvaged and returned to the market for consumption or sale.
(c) *Beer lost or destroyed.* When beer is lost or destroyed, whether by theft or otherwise, the appropriate TTB officer may require the brewer to file a claim for relief from the tax and to submit proof as to the cause of the loss.
(d) *Beer lost by theft.* When it appears that beer was lost by theft, the tax shall be collected unless the brewer proves to the satisfaction of the appropriate TTB officer that the theft occurred before removal from the brewery and occurred without connivance, collusion, fraud, or negligence on the part of the brewer, consignor, consignee, bailee, or carrier, or the employees or agents of any of them.
(e) *Notification of appropriate TTB officer.*
(1) A brewer who sustains a loss of beer before transfer of title of the beer to another person and who desires to adjust the tax on the excise tax return or to file a claim for refund or for relief from liability of tax, must, on learning of the loss of beer, immediately notify in writing the appropriate TTB officer of the nature, cause, and extent of the loss, and the place where the loss occurred. Statements of witnesses or other supporting documents must be furnished if available.
(2) A brewer possessing unmerchantable beer and who desires to adjust the tax on the excise tax return or to file a claim for refund or for relief from liability must notify in writing the appropriate TTB officer, of the circumstances by which the beer became unmerchantable, and must state why the beer cannot be salvaged and returned to the market for consumption or sale.
(f) *Additional information.* The appropriate TTB officer may require the brewer to submit additional evidence necessary to verify the tax adjustment or for use in connection with a claim.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended ([26 U.S.C. 5056](https://www.govinfo.gov/link/uscode/26/5056)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-437, [66 FR 5480](https://www.federalregister.gov/citation/66-FR-5480), Jan. 19, 2001]
#### § 25.283 Claims for refund of tax.
(a) *Beer returned to brewery or voluntarily destroyed at a location other than a brewery.* Claims for refund of tax on beer returned to a brewery under the provisions of [§ 25.213](/current/title-27/section-25.213) or voluntarily destroyed at a location other than a brewery shall include:
(1) The name and address of the brewer filing the claim, the address of the brewery from which the beer was removed, and the address of the brewery to which the beer was returned, as applicable;
(2) The quantity of beer covered by the claim and the rate(s) of tax at which the beer was tax paid or determined;
(3) The amount of tax for which the claim is filed;
(4) The reason for return or voluntary destruction of the beer and the related facts;
(5) Whether the brewer is indemnified by insurance or otherwise in respect of the tax, and if so, the nature of the indemnification;
(6) The claimant's reasons for believing the claim should be allowed;
(7) The date the beer was returned to the brewery, if applicable;
(8) The name of the person from whom the beer was received;
(9) A statement that the tax has been fully paid or determined; and
(10) A reference to the notice (if required) filed under [§§ 25.213](/current/title-27/section-25.213) or [25.222](/current/title-27/section-25.222).
(b) *Beer lost, destroyed, or rendered unmerchantable.* Claims for refund of tax on beer lost, whether by theft or otherwise, or destroyed or otherwise rendered unmerchantable by fire, casualty, or act of God shall contain:
(1) Information required by [paragraphs (a)(1)](/current/title-27/section-25.283#p-25.283\(a\)\(1\)), [(2)](/current/title-27/section-25.283#p-25.283\(a\)\(2\)), [(3)](/current/title-27/section-25.283#p-25.283\(a\)\(3\)), [(5)](/current/title-27/section-25.283#p-25.283\(a\)\(5\)), and [(6)](/current/title-27/section-25.283#p-25.283\(a\)\(6\)) of this section;
(2) A statement of the circumstances surrounding the loss;
(3) When applicable, the reason the beer rendered unmerchantable cannot be returned to the market for consumption or sale;
(4) Date of the loss, and if lost in transit, the name of the carrier;
(5) A reference incorporating the notice required by [§ 25.282](/current/title-27/section-25.282); and
(6) When possible, affidavits of persons having knowledge of the loss, unless the affidavits are contained in the notice given under [§ 25.282](/current/title-27/section-25.282).
(c) *Voluntary destruction of taxpaid beer which was never removed from brewery premises.* Claims for refund or credit of tax on beer voluntarily destroyed under the provisions of [§ 25.225](/current/title-27/section-25.225), shall include:
(1) Information required by [paragraphs (a)(1)](/current/title-27/section-25.283#p-25.283\(a\)\(1\)), [(a)(2)](/current/title-27/section-25.283#p-25.283\(a\)\(2\)), [(a)(3)](/current/title-27/section-25.283#p-25.283\(a\)\(3\)), [(a)(5)](/current/title-27/section-25.283#p-25.283\(a\)\(5\)), and [(a)(9)](/current/title-27/section-25.283#p-25.283\(a\)\(9\)) of this section; and
(2) The information contained in the record required by [§ 25.225(b)](/current/title-27/section-25.225#p-25.225\(b\)).
(d) *Additional evidence.* The appropriate TTB officer may require the submission of additional evidence in support of any claim filed under this section.
(e) *Filing of claim.* Claim for refund of tax shall be filed on Form 2635 (5620.8). Claims shall be filed within 6 months after the date of the return, loss, destruction, or rendering unmerchantable. Claims will not be allowed if filed after the prescribed time or if the claimant was indemnified by insurance or otherwise in respect of the tax.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended ([26 U.S.C. 5056](https://www.govinfo.gov/link/uscode/26/5056)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1987, as amended by T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987; T.D. ATF-268, [53 FR 8629](https://www.federalregister.gov/citation/53-FR-8629), Mar. 16, 1988; T.D. ATF-437, [66 FR 5480](https://www.federalregister.gov/citation/66-FR-5480), Jan. 19, 2001]
#### § 25.284 Adjustment of tax.
(a) *Adjustment of tax in lieu of refund.* In lieu of filing a claim for refund of tax as provided in [§ 25.283](/current/title-27/section-25.283), a brewer may make an adjustment (without interest) to the excise tax return, Form 5000.24, for the amount of tax paid on beer returned to the brewery, voluntarily destroyed, lost, destroyed, or rendered unmerchantable.
(b) *Beer returned to brewery other than from which removed.* An adjustment may be made on the excise tax return for the amount of tax paid on beer returned to the brewery under [§ 25.213](/current/title-27/section-25.213). The adjustment will be made on the tax return filed for the brewery to which the beer was returned. The adjustment may not be made prior to the return of beer to the brewery. If the brewer is required to file a notice under [§ 25.213](/current/title-27/section-25.213), the adjustment may not be made until the appropriate TTB officer authorizes disposition of the beer.
(c) *Beer voluntarily destroyed.* An adjustment may be made on the excise tax return for the amount of tax paid on beer voluntarily destroyed under [subpart N of this part](/current/title-27/part-25/subpart-N). The adjustment will be made on the tax return filed for the brewery from which the beer was removed. The adjustment may not be made prior to the destruction of the beer.
(d) *Beer lost, destroyed or rendered unmerchantable.* An adjustment may be made on the excise tax return for the amount of tax paid on beer lost, destroyed, or rendered unmerchantable under [§ 25.282](/current/title-27/section-25.282). The adjustment will be made on the tax return filed for the brewery from which the beer was removed. A brewer may not make an adjustment prior to notification required under [§ 25.282(e)](/current/title-27/section-25.282#p-25.282\(e\)). When beer appears to have been lost due to theft, the brewer may not make an adjustment to the tax return until establishing to the satisfaction of the appropriate TTB officer that the theft occurred before removal from the brewery and occurred without connivance, collusion, fraud, or negligence on the part of the brewer, consignor, consignee, bailee, or carrier, or the employees or agents of any of them.
(e) *Condition of adjustments.*
(1) All adjustments will be made within 6 months of the return, destruction, loss, or rendering unmerchantable of the beer.
(2) Adjustment of the tax paid will be made without interest.
(3) An adjustment may not be taken if the brewer was indemnified by insurance or otherwise in respect of the tax.
(f) *Records.* When brewers make adjustments on the excise tax return in lieu of filing a claim, they shall keep the following records;
(1) For beer returned to the brewery or voluntarily destroyed, the records required by [§§ 25.283(a)(1)](/current/title-27/section-25.283#p-25.283\(a\)\(1\)), [(2)](/current/title-27/section-25.283#p-25.283\(a\)\(2\)), [(4)](/current/title-27/section-25.283#p-25.283\(a\)\(4\)), [(5)](/current/title-27/section-25.283#p-25.283\(a\)\(5\)), [(7)](/current/title-27/section-25.283#p-25.283\(a\)\(7\)), [(8)](/current/title-27/section-25.283#p-25.283\(a\)\(8\)), and [(10)](/current/title-27/section-25.283#p-25.283\(a\)\(10\)).
(2) For beer lost, destroyed, or rendered unmerchantable, the records required by [§ 25.283 (a)(1)](/current/title-27/section-25.283#p-25.283\(a\)\(1\)), [(2)](/current/title-27/section-25.283#p-25.283\(a\)\(2\)), [(5)](/current/title-27/section-25.283#p-25.283\(a\)\(5\)), [(b) (2)](/current/title-27/section-25.283#p-25.283\(b\)\(2\)), [(3)](/current/title-27/section-25.283#p-25.283\(b\)\(3\)), [(4)](/current/title-27/section-25.283#p-25.283\(b\)\(4\)), [(5)](/current/title-27/section-25.283#p-25.283\(b\)\(5\)), and [(6)](/current/title-27/section-25.283#p-25.283\(b\)\(6\)).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended ([26 U.S.C. 5056](https://www.govinfo.gov/link/uscode/26/5056)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-437, [66 FR 5480](https://www.federalregister.gov/citation/66-FR-5480), Jan. 19, 2001; T.D. ATF-437a, [66 FR 17809](https://www.federalregister.gov/citation/66-FR-17809), Apr. 4, 2001]
#### § 25.285 Refund of beer tax excessively paid.
(a) *Eligibility.* A brewer who, under the provisions of [§ 25.152](/current/title-27/section-25.152), is eligible to pay the reduced rate of tax on beer prescribed by [26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051) (a)(2), but who did not pay tax at the reduced rate by return, form TTB F 5000.24, during the calendar year for which the brewer was eligible, may file a claim for refund of tax excessively paid on beer for that year. The brewer shall file the claim for refund to tax on form TTB F 5620.8 within the period of limitation prescribed in [26 U.S.C. 6511(a)](https://www.govinfo.gov/link/uscode/26/6511). For rules relating to the period of limitation on filing claims, see [§§ 70.82](/current/title-27/section-70.82) and [70.83](/current/title-27/section-70.83).
(b) *Calculation of refund.* The brewer shall file the claim based on the quantity of beer eligible to be taxpaid at the lower rate of tax, but which was paid at the higher rate of tax, subject to a maximum of 60,000 barrels of beer per calendar year or the limitation as determined in [§ 25.152(d)](/current/title-27/section-25.152#p-25.152\(d\)). The brewer shall exclude from the claim the quantity of beer removed that calendar year on which a credit or refund at the higher rate of tax has been taken.
(c) *Information to be furnished.* Each claim for refund of tax filed under this section shall include the following information:
(1) Name and address of the brewer.
(2) Quantity of beer covered by the claim as determined in [paragraph (b)](/current/title-27/section-25.285#p-25.285\(b\)) of this section.
(3) Amount of tax paid in excess.
(4) A statement of the exact number of barrels of beer which the brewer produced during the calendar year.
(5) A statement that the brewer is not a member of a controlled group of brewers (as defined in [§ 25.152(b)(1)](/current/title-27/section-25.152#p-25.152\(b\)\(1\)) or, if the brewer is a member of a controlled group of brewers, a list of the names and addresses of all the members of the controlled group of brewers and a statement of the combined number of barrels of beer produced by all members of the controlled group in the calendar year.
(6) If the brewer is a member of a controlled group of brewers, a statement of how the 60,000 barrel limitation for the reduced rate of tax is to be apportioned among the members of the controlled group of brewers.
(Act of August 16, 1954, 68A Stat. 791, as amended ([26 U.S.C. 6402](https://www.govinfo.gov/link/uscode/26/6402)); sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended ([26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1987, as amended by T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987; T.D. ATF-437, [66 FR 5480](https://www.federalregister.gov/citation/66-FR-5480), Jan. 19, 2001; T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 25.286 Claims for remission of tax on beer lost in transit between breweries.
(a) *Filing of claim.* Claims for remission of tax on beer lost in transit between breweries of the same ownership shall be prepared on form TTB F 5620.8 by the brewer or the brewer's authorized agent and submitted with the form TTB F 5130.9 of the receiving brewery for the reporting period in which the shipment is received. When the loss is by casualty, the claim will be submitted with the form TTB F 5130.9 for the reporting period in which the loss is discovered. When, for valid reason, the required claim cannot be submitted with form TTB F 5130.9, the brewer shall attach a statement to form TTB F 5130.9 stating the reason why the claim cannot be filed at the time and stating when it will be filed. A claim will not be allowed unless filed within 6 months of the date of the loss.
(b) *Information to be shown.* The claim will show the following information:
(1) The date of the shipment;
(2) The quantity of beer lost (number and size of packages and their equivalent in barrels), and the rate(s) of tax at which the beer would have been removed for consumption or sale;
(3) The percent of loss;
(4) The specific cause of the loss;
(5) The nature of the loss (leakage, breakage, casualty, etc.);
(6) Information as to whether the claimant has been indemnified by insurance or otherwise in respect to the tax, or has any claim for indemnification; and
(7) For losses due to casualty or accident, statements from the carrier or other persons having personal knowledge of the loss, if available.
([27 U.S.C. 5056](https://www.govinfo.gov/link/uscode/27/5056), [5414](https://www.govinfo.gov/link/uscode/27/5414))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986; [51 FR 9190](https://www.federalregister.gov/citation/51-FR-9190), Mar. 18, 1986; T.D. ATF-345, [58 FR 40357](https://www.federalregister.gov/citation/58-FR-40357), July 28, 1993; T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
## Subpart U—Records and Reports
#### § 25.291 Records.
(a) *General.*
(1) The records to be maintained by brewers include:
(i) All individual transaction forms, records, and summaries specifically required by this part;
(ii) All supplemental, auxiliary, and source data used in the compilation of required forms, records, and summaries, and for preparation of reports, returns, and claims; and
(iii) Copies of notices, reports, returns, and approved applications and other documents relating to operations and transactions.
(2) The records required by this part may consist of the brewer's commercial documents, rather than records prepared expressly to meet the requirements of this part, if those documents contain all the details required by this part, are consistent with the general requirements of clarity and accuracy, and do not result in difficulty in their examination.
(b) *Entries.*
(1) Each entry required by this part to be made in daily records will be made not later than the close of the business day next succeeding the day on which the transaction occurs.
(2) When the brewer prepares transaction or business records concurrently with the individual operation or transaction and these records contain all the required information with respect to the operation or transaction, entries in daily records may be made not later than the close of business the third business day succeeding the day on which the operation or transaction occurs.
(c) *Content.*
(1) All entries in the daily records required by this subpart will show the date of the operation or transaction.
(2) Daily records will accurately and clearly reflect the details of each operation or transaction and, as applicable, contain all data necessary to enable—
(i) Brewers to prepare summaries, reports, and returns required by this part, and
(ii) Appropriate TTB officers to verify removals of beer and cereal beverages, to verify claims, and to ascertain if there has been compliance with law and regulations.
(d) *Format.*
(1) The brewer's copies of prescribed forms which bear all required details will be utilized as daily records.
(2) When a form is not prescribed, the records required by this subpart will be those commercial records used by the brewer in the accounting system and will bear all required details.
(3) The brewer shall maintain daily records required by this part so they clearly and accurately reflect all mandatory information. When the format or arrangement of the daily records is such that the information is not clearly or accurately shown, the appropriate TTB officer may require a format or arrangement which will clearly and accurately show the information.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended ([26 U.S.C. 5415](https://www.govinfo.gov/link/uscode/26/5415)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 25.292 Daily records of operations.
(a) *Daily records.* A brewer shall maintain daily records of operations which show by quantity the following:
(1) Each kind of material received and used in the production of beer and cereal beverage (including the balling and the quantity of each type of material used in the production of wort or concentrated wort).
(2) Beer and cereal beverage produced (including water added after production is determined).
(3) Beer and cereal beverage transferred for and returned from bottling.
(4) Beer and cereal beverage transferred for and returned from racking.
(5) Beer and cereal beverage bottled.
(6) Beer and cereal beverage racked.
(7) Cereal beverage removed from the brewery.
(8) Beer removed for consumption or sale. For each removal, the record will show the date of removal, the person to whom the beer was shipped or delivered (not required for sales in quantities of one-half barrel or less for delivery at the brewery), and the quantities of beer removed in kegs and in bottles.
(9) Beer removed without payment of tax. For each removal, the record will show the date of removal, the person to whom the beer was shipped or delivered, and the quantities of beer removed in kegs, bottles, tanks, tank cars, tank trucks, tank ships, barges or deep tanks of vessels.
(10) Packaged beer used for laboratory samples at the brewery.
(11) Beer consumed at the brewery.
(12) Beer returned to the brewery from which removed.
(13) Beer returned to the brewery after removal from another brewery owned by the brewer.
(14) Beer reconditioned, used as material, or destroyed.
(15) Beer received from other breweries or received from pilot brewing plants.
(16) Beer and cereal beverage lost due to breakage, theft, casualty, or other unusual cause.
(17) Brewing materials sold or transferred to pilot brewing plants (including the name and address of the person to whom shipped or delivered) and brewing materials used in the manufacture of wort, wort concentrate, malt syrup, and malt extract for sale or removal.
(18) Record of tests of measuring devices.
(19) Beer purchased from other brewers in the purchasing brewer's barrels and kegs and such beer sold to other brewers.
(b) *Daily summary records.* A brewer shall maintain daily summaries of the following transactions:
(1) Beer and cereal beverage bottled;
(2) Beer and cereal beverage racked;
(3) Beer removed for consumption or sale;
(4) Beer returned to the brewery from which removed;
(5) Beer returned to the brewery after removal from another brewery owned by the brewer; and
(6) Brewing materials, beer and cereal beverage in process, and finished beer and cereal beverage on hand.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended, 1395, as amended ([26 U.S.C. 5415](https://www.govinfo.gov/link/uscode/26/5415), [5555](https://www.govinfo.gov/link/uscode/26/5555)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986; [51 FR 9190](https://www.federalregister.gov/citation/51-FR-9190), Mar. 18, 1986; T.D. TTB-91, [76 FR 5478](https://www.federalregister.gov/citation/76-FR-5478), Feb. 1, 2011]
#### § 25.293 Record of ballings and alcohol content.
The brewer shall maintain a record of the ballings of the wort produced, and of the ballings and the alcohol content of beer and cereal beverage transferred for bottling and racking, between breweries in bulk conveyances, and to pilot brewing plants. Records showing ballings and alcohol content need not be consolidated and averaged daily unless the brewer so desires.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended ([26 U.S.C. 5415](https://www.govinfo.gov/link/uscode/26/5415)))
#### § 25.294 Inventories.
(a) The brewer shall take a physical inventory of beer and cereal beverage at least once each calendar month. The brewer may take this inventory within 7 days of the close of the calendar month for which made.
(b) The brewer shall make a record of inventories of beer or cereal beverage which will show the following:
(1) Date taken;
(2) Quantity of beer and cereal beverage on hand;
(3) Losses, gains, and shortages; and
(4) Signature, under penalties of perjury of the brewer or person taking this inventory.
(c) The brewer shall retain inventory records and make them available for inspection by an appropriate TTB officer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended ([26 U.S.C. 5415](https://www.govinfo.gov/link/uscode/26/5415)))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. TTB-91, [76 FR 5478](https://www.federalregister.gov/citation/76-FR-5478), Feb. 1, 2011]
#### § 25.295 Record of unsalable beer.
A brewer having unsalable beer in packages or tanks in the brewery may destroy, recondition, or use the beer as material. The brewer shall report the quantity of the beer destroyed, reconditioned, or used as materials, in daily records and on Form 5130.9. If the unsalable beer consists of rejects from the packaging operations, the beer may be destroyed without being included in the packaging production records, and, when so destroyed, will be so reported in the brewer's daily records and on Form 5130.9. When reject bottled beer is to be consumed at the brewery or sold to brewery employees, or is cased or otherwise accumulated pending other disposition, the quantity will be included in the packaging production and be so reported in the brewer's daily records and on Form 5130.9.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1389 as amended, 1390, as amended, 1395 as amended ([26 U.S.C. 5411](https://www.govinfo.gov/link/uscode/26/5411), [5415](https://www.govinfo.gov/link/uscode/26/5415), [5555](https://www.govinfo.gov/link/uscode/26/5555)))
#### § 25.296 Record of beer concentrate.
(a) *Daily records.* A brewer who produces concentrate or reconstitutes beer shall maintain daily records which accurately reflect the balling, quantity, and alcohol content of—
(1) Beer entered into the concentration process;
(2) Concentrate produced;
(3) Concentrate transferred to other breweries;
(4) Concentrate exported;
(5) Concentrate received;
(6) Concentrate used in reconstituting beer; and
(7) Beer reconstituted.
(b) *Summary report of operations.* A brewer who produces concentrate or reconstitutes beer shall report by specific entries on Form 5130.9, the quantity of beer entered into the concentration process, and the quantity of beer reconstituted from concentrate. In addition, the brewer shall prepare on Form 5130.9, a summary accounting of all concentrate operations at the brewery for the reporting period. This summary accounting will show, in barrels of 31 gallons with fractions rounded to 2 decimal places:
(1) Concentrate on hand beginning of the reporting period;
(2) Concentrate on hand end of the reporting period;
(3) Concentrate produced;
(4) Concentrate received; and
(5) Specific disposition of concentrate such as “used in reconstitution,” “removed for export,” “removed to foreign-trade zone,” or “transferred to other breweries.”
([26 U.S.C. 5415](https://www.govinfo.gov/link/uscode/26/5415))
\[T.D. ATF-224, [51 FR 7673](https://www.federalregister.gov/citation/51-FR-7673), Mar. 5, 1986, as amended by T.D. ATF-345, [58 FR 40358](https://www.federalregister.gov/citation/58-FR-40358), July 28, 1993]
#### § 25.297 Report of Operations, Form 5130.9 or Form 5130.26.
(a) *Monthly report of operations.* Except as provided in [paragraph (b)](/current/title-27/section-25.297#p-25.297\(b\)) of this section, each brewer shall prepare and submit a monthly report of brewery operations on Form 5130.9.
(b) *Quarterly report of operations.*
(1) For calendar quarters commencing on or after January 1, 2015, a brewer who was liable for not more than $50,000 in taxes with respect to beer imposed by [26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051) and [7652](https://www.govinfo.gov/link/uscode/26/7652) in the preceding calendar year and reasonably expects to be liable for not more than $50,000 in such taxes during the current calendar year shall file quarterly Form 5130.9 or Form 5130.26 (or any successor forms). For purposes of this section, “reasonably expects” means that the brewer was liable for not more than \$50,000 in taxes the previous calendar year and that there is no other existing or anticipated circumstance known to the brewer (such as an increase in production capacity) that would cause the brewer's liability to increase beyond that level in the current calendar year.
(2) If a brewer determines that it will be liable for more than $50,000 in taxes with respect to beer imposed by [26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051) and [7652](https://www.govinfo.gov/link/uscode/26/7652) during the current calendar year, the brewer shall file Form 5130.9 monthly beginning with the first month during which the tax liability exceeds $50,000, and shall concurrently file Form 5130.9 for any previous month of that quarter. When filing the first monthly report, a brewer shall state on the form that it will be liable for more than \$50,000 in taxes for the current calendar year and will henceforth submit monthly filings. The brewer shall then continue to file Form 5130.9 for each subsequent month of that calendar year.
(3) The appropriate TTB officer may at any time require a brewer who is filing Form 5130.9 or Form 5130.26 quarterly to file such report monthly on Form 5130.9 if there is a jeopardy to the revenue.
(c) *Retention.* The brewer shall retain a copy of Form 5130.9 or Form 5130.26 (or any successor form) as part of the brewery records.
([26 U.S.C. 5415](https://www.govinfo.gov/link/uscode/26/5415), [5555](https://www.govinfo.gov/link/uscode/26/5555))
\[T.D. ATF-345, [58 FR 40358](https://www.federalregister.gov/citation/58-FR-40358), July 28, 1993, as amended by T.D. ATF-437, [66 FR 5480](https://www.federalregister.gov/citation/66-FR-5480), Jan. 19, 2001; T.D. TTB-123, [79 FR 58679](https://www.federalregister.gov/citation/79-FR-58679), Sept. 30, 2014]
#### § 25.298 Excise tax return, Form 5000.24.
All entries on the excise tax return, Form 5000.24, will be fully supported by accurate and complete records. The brewer shall file a copy of Form 5000.24 as a part of the records at the brewery.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended, 1390, as amended, 1395, as amended ([26 U.S.C. 5061](https://www.govinfo.gov/link/uscode/26/5061), [5415](https://www.govinfo.gov/link/uscode/26/5415), [5555](https://www.govinfo.gov/link/uscode/26/5555)))
#### § 25.299 Execution under penalties of perjury.
When a return, form, or other document is required by this part or in the instruction on or with the return, form, or other document to be executed under the penalties of perjury, as defined in [§ 25.11](/current/title-27/section-25.11), it will be so executed and will be signed by the brewer or other duly authorized person.
(Act of August 16, 1954, 68A Stat. 749, as amended ([26 U.S.C. 6065](https://www.govinfo.gov/link/uscode/26/6065)))
#### § 25.300 Retention and preservation of records.
(a) *Place of maintenance.* Records required by this part will be prepared and kept by the brewer at the brewery where the operation or transaction occurs and will be available for inspection by any appropriate TTB officer during business hours.
(b) *Reproduction of original records.* Whenever any record, because of its condition, becomes unsuitable for its intended or continued use, the brewer shall reproduce the record by a process under [§ 25.301](/current/title-27/section-25.301). The reproduced record will be treated and considered for all purposes as though it were the original record, and all provisions of law applicable to the original are applicable to the reproduction.
(c) *Retention of records.* Records required by this part will be preserved for a period of not less than three years from the date thereof or the date of the last entry required to be made thereon, whichever is later. The appropriate TTB officer may require records to be kept for an additional period not exceeding three years in any case where such retention is deemed necessary or advisable for the protection of the revenue.
(d) *Data Processing.*
(1) Notwithstanding any other provision of this section, record data maintained on data processing equipment may be kept at a location other than the brewery if the original transaction (source) records required by [§§ 25.292-25.298](/current/title-27/section-25.292) are kept available for inspection at the brewery.
(2) Data which has been accumulated on cards, tapes, discs, or other accepted record media will be retrievable within five business days.
(3) The applicable data processing program will be made available for examination if requested by an appropriate TTB officer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended ([26 U.S.C. 5415](https://www.govinfo.gov/link/uscode/26/5415)))
#### § 25.301 Photographic copies of records.
(a) *General.* Brewers may record, copy, or reproduce records required by this part. Brewers may use any process which accurately reproduces the original record and which forms a durable medium for reproducing and preserving the original record.
(b) *Copies of records treated as original records.* Whenever records are reproduced under this section, the reproduced records will be preserved in conveniently accessible files, and provisions will be made for examining, viewing and using the reproduced record the same as if it were the original record, and it will be treated and considered for all purposes as through it were the original record. All provisions of law and regulations applicable to the original are applicable to the reproduced record. As used in this section, “original record” means the record required by this part to be maintained or preserved by the brewer, even though it may be an executed duplicate or other copy of the document.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1390, as amended, 1395, as amended ([26 U.S.C. 5415](https://www.govinfo.gov/link/uscode/26/5415), [5555](https://www.govinfo.gov/link/uscode/26/5555)))
# Part 26 — LIQUORS AND ARTICLES FROM PUERTO RICO AND THE VIRGIN ISLANDS
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-26
Full text of 27 CFR Part 26 — LIQUORS AND ARTICLES FROM PUERTO RICO AND THE VIRGIN ISLANDS. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 26—LIQUORS AND ARTICLES FROM PUERTO RICO AND THE VIRGIN ISLANDS
#### Authority:
[19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c); [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5007](https://www.govinfo.gov/link/uscode/26/5007), [5008](https://www.govinfo.gov/link/uscode/26/5008), [5010](https://www.govinfo.gov/link/uscode/26/5010), [5041](https://www.govinfo.gov/link/uscode/26/5041), [5051](https://www.govinfo.gov/link/uscode/26/5051), [5061](https://www.govinfo.gov/link/uscode/26/5061), [5111-5114](https://www.govinfo.gov/link/uscode/26/5111), [5121](https://www.govinfo.gov/link/uscode/26/5121), [5122-5124](https://www.govinfo.gov/link/uscode/26/5122), [5131-5132](https://www.govinfo.gov/link/uscode/26/5131), [5207](https://www.govinfo.gov/link/uscode/26/5207), [5232](https://www.govinfo.gov/link/uscode/26/5232), [5271](https://www.govinfo.gov/link/uscode/26/5271), [5275](https://www.govinfo.gov/link/uscode/26/5275), [5301](https://www.govinfo.gov/link/uscode/26/5301), [5314](https://www.govinfo.gov/link/uscode/26/5314), [5555](https://www.govinfo.gov/link/uscode/26/5555), [6001](https://www.govinfo.gov/link/uscode/26/6001), [6038E](https://www.govinfo.gov/link/uscode/26/6038E), [6065](https://www.govinfo.gov/link/uscode/26/6065), [6109](https://www.govinfo.gov/link/uscode/26/6109), [6301](https://www.govinfo.gov/link/uscode/26/6301), [6302](https://www.govinfo.gov/link/uscode/26/6302), [6804](https://www.govinfo.gov/link/uscode/26/6804), [7101](https://www.govinfo.gov/link/uscode/26/7101), [7102](https://www.govinfo.gov/link/uscode/26/7102), [7651](https://www.govinfo.gov/link/uscode/26/7651), [7652](https://www.govinfo.gov/link/uscode/26/7652), [7805](https://www.govinfo.gov/link/uscode/26/7805); [27 U.S.C. 203](https://www.govinfo.gov/link/uscode/27/203), [205](https://www.govinfo.gov/link/uscode/27/205); [31 U.S.C. 9301](https://www.govinfo.gov/link/uscode/31/9301), [9303](https://www.govinfo.gov/link/uscode/31/9303), [9304](https://www.govinfo.gov/link/uscode/31/9304), [9306](https://www.govinfo.gov/link/uscode/31/9306).
#### Source:
[20 FR 6077](https://www.federalregister.gov/citation/20-FR-6077), Aug. 20, 1955, unless otherwise noted. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and further redesignated by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), July 25, 2001.
#### Editorial Note:
Nomenclature changes to part 26 appear by T.D. ATF-451, [66 FR 21668](https://www.federalregister.gov/citation/66-FR-21668), [21669](https://www.federalregister.gov/citation/66-FR-21669), May 1, 2001.
## Subpart A—Scope of Regulations
#### § 26.1 Alcoholic products coming into the United States from Puerto Rico and the Virgin Islands.
This part, “Liquors and Articles from Puerto Rico and the Virgin Islands,” relates to:
(a) The production, bonded warehousing, and withdrawal of distilled spirits and denatured spirits, and the manufacture of articles in Puerto Rico and the Virgin Islands to be brought into the United States free of tax;
(b) The collection of internal revenue taxes on taxable alcoholic products coming into the United States from Puerto Rico and the Virgin Islands;
(c) The transfer, without payment of tax, of Puerto Rican and Virgin Islands spirits in bulk containers or by pipeline from customs custody to the bonded premises of a distilled spirits plant qualified under [part 19 of this chapter](/current/title-27/part-19), of Virgin Islands wine in bulk containers from customs custody to a bonded wine cellar qualified under [part 24 of this chapter](/current/title-27/part-24), and of Virgin Islands beer in bulk containers from customs custody to a brewery qualified under [part 25 of this chapter](/current/title-27/part-25);
(d) The deposit of the distilled spirits excise taxes, limited to the lesser of \$10.50 or the rate in section 5001(a)(1) per proof gallon, into the Treasuries of Puerto Rico and the Virgin Islands on all articles containing distilled spirits as defined in section 7652, produced by those two U.S. possessions, and transported into the United States (less certain amounts); and
(e) The deposit of the distilled spirits excise taxes, limited to the lesser of \$10.50 or the rate in section 5001(a)(1) per proof gallon, into the Treasuries of Puerto Rico and the Virgin Islands on all rum imported into the United States (including rum from possessions other than Puerto Rico and the Virgin Islands), less certain amounts.
(Approved by the Office of Management and Budget under control number 1512-0277)
(Sec. 221, Pub. L. 98-67, 97 Stat. 369 ([26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652))
\[T.D. ATF-175, [49 FR 20803](https://www.federalregister.gov/citation/49-FR-20803), May 16, 1984, as amended by T.D. ATF-203, [50 FR 15887](https://www.federalregister.gov/citation/50-FR-15887), Apr. 23, 1985; T.D. TTB-145, [81 FR 94199](https://www.federalregister.gov/citation/81-FR-94199), Dec. 22, 2016]
#### § 26.2 Forms prescribed.
(a) The appropriate TTB officer is authorized to prescribe all forms required by this part, including applications, reports, returns, and records. All of the information called for in each form shall be furnished as indicated by the headings on the form and the instructions on or pertaining to the form. In addition, information called for in each form shall be furnished as required by this part. The form will be filed in accordance with the instructions for the form.
(b) Forms prescribed by this part are available for printing through the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
([5 U.S.C. 552(a)](https://www.govinfo.gov/link/uscode/5/552) (80 Stat. 383, as amended))
\[T.D. ATF-92, [46 FR 46920](https://www.federalregister.gov/citation/46-FR-46920), Sept. 23, 1981, as amended by T.D. ATF-249, [52 FR 5963](https://www.federalregister.gov/citation/52-FR-5963), Feb. 27, 1987; T.D. ATF-372, [41 FR 20725](https://www.federalregister.gov/citation/41-FR-20725), May 8, 1996; T.D. ATF-451, [66 FR 21668](https://www.federalregister.gov/citation/66-FR-21668), May 1, 2001; T.D. TTB-44, [71 FR 16943](https://www.federalregister.gov/citation/71-FR-16943), Apr. 4, 2006; T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 26.3 Delegations of the Administrator.
The regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.26, Delegation of the Administrator's Authorities in [27 CFR Part 26](/current/title-27/part-26), Liquors and Articles From Puerto Rico and the Virgin Islands. You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-44, [71 FR 16944](https://www.federalregister.gov/citation/71-FR-16944), Apr. 4, 2006, as amended by T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
## Subpart B—Definitions
#### § 26.11 Meaning of terms.
When used in this part and in forms prescribed under this part, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof, terms shall have the meaning ascribed in this section. Words in the plural form shall include the singular and vice versa, and words importing the masculine gender shall include the feminine. The terms “includes” and “including” do not exclude things not enumerated which are in the same general class.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.26, Delegation of the Administrator's Authorities in [27 CFR Part 26](/current/title-27/part-26), Liquors and Articles from Puerto Rico and the Virgin Islands.
*Article.* Any preparation unfit for beverage use, made with or containing:
(1) Wine or beer;
(2) Distilled spirits or industrial spirits; or
(3) Denatured spirits when such preparation is not manufactured under the provisions of this chapter.
*Bank.* Any commercial bank.
*Banking day.* Any day during which a bank is open to the public for carrying on substantially all its banking functions.
*Beer.* Beer, ale, porter, stout, and other similar fermented beverages (including sake or similar products) of any name or description containing one-half of 1 percent or more of alcohol by volume, brewed, or produced from malt, wholly or in part, or from any substitute therefor.
*Bonded premises of a distilled spirits plant.* The bonded premises of a distilled spirits plant as described in [part 19 of this chapter](/current/title-27/part-19). This term includes premises described in the preceding sentence even if the distilled spirits plant proprietor, as authorized under the exemption set forth in [§ 19.151(d) of this chapter](/current/title-27/section-19.151#p-19.151\(d\)), has not provided a bond for the premises.
*Bonded wine cellar.* Premises established under [part 24 of this chapter](/current/title-27/part-24).
*Bottler.* Any person required to hold a basic permit as a bottler under [27 U.S.C. 203(b)(1)](https://www.govinfo.gov/link/uscode/27/203).
*Brewery.* The land and buildings described in the brewer's notice, TTB Form 5130.10, where beer is to be produced and packaged.
*Bulk container.* When used in the context of distilled spirits, the term “bulk container” means any container having a capacity larger than one wine gallon. When used in the context of wine, the term “bulk container” means any container having a capacity larger than 60 liters. When used in the context of beer, the term “bulk container” means any container having a capacity larger than one barrel of 31 gallons.
*Bulk distilled spirits.* The term “bulk distilled spirits” means distilled spirits in a container having a capacity in excess of 1 gallon.
*Bureau of Alcoholic Beverage Taxes.* Bureau of Alcoholic Beverage Taxes of the Commonwealth of Puerto Rico.
*Business day.* Any day, other than a Saturday, Sunday, or a legal holiday. (The term legal holiday includes all holidays in the District of Columbia and all legal holidays in the Commonwealth of Puerto Rico.)
*Calendar quarter and quarterly.* These terms refer to the three-month periods ending on March 31, June 30, September 30, or December 31.
*Commercial bank.* A bank, whether or not a member of the Federal Reserve System, which has access to the Federal Reserve Communications System (FRCS) or Fedwire. The “FRCS” or “Fedwire” is a communications network that allows Federal Reserve System member banks to effect a transfer of funds for their customers (or other commercial banks) to the Treasury Account at the Federal Reserve Bank of New York.
*Customs officer.* An officer of U.S. Customs and Border Protection (CBP) or any agent or other person authorized by law to perform the duties of such an officer.
*Denatured spirits.* Industrial spirits denatured in accordance with approved formulas in distilled spirits plants established and operated under the provisions of this chapter relating to the establishment and operation of plants qualified to denature spirits in the United States or, in respect of a product of the Virgin Islands, shall also mean spirits denatured in accordance with approved formulas in plants established under the provisions of the Virgin Islands regulations and shall include, unless otherwise limited, both completely and specially denatured spirits.
*Director of the service center.* A director of an internal revenue service center.
*Distilled spirits or spirits.* That substance known as ethyl alcohol, ethanol, or spirits of wine, in any form (including all dilutions and mixtures thereof, from whatever source or by whatever process produced), but shall not include industrial spirits as defined in this part except when used in reference to such spirits which would be subject to tax if brought into the United States.
*District director.* A district director of internal revenue.
*District director of customs.* The district director of customs at a headquarters port of the district (except the district of New York, N.Y.); the area directors of customs in the district of New York, N.Y.; and the port director at a port not designated as a headquarters port.
*Effective tax rate.* The net tax rate after reduction for any credit allowable under [26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010) for wine and flavor content at which the tax imposed on distilled spirits by [26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652) is paid or determined.
*Electronic fund transfer or EFT.* Any transfer of funds effected by a proprietor's commercial bank, either directly or through a correspondent banking relationship, via the Federal Reserve Communications System (FRCS) or Fedwire to the Treasury Account at the Federal Reserve Bank of New York.
*Eligible article.* Any medicine, medicinal preparation, food product, flavor, flavoring extract or perfume which contains distilled spirits, is unfit for beverage purposes, and has been or will be brought into the United States from Puerto Rico or the Virgin Islands under the provisions of [26 U.S.C. 7652(g)](https://www.govinfo.gov/link/uscode/26/7652).
*Eligible flavor.* A flavor which:
(1) Is of a type that is eligible for drawback of tax under [26 U.S.C. 5114](https://www.govinfo.gov/link/uscode/26/5114),
(2) Was not manufactured on the premises of a distilled spirits plant, and
(3) Was not subjected to distillation on distilled spirits plant premises such that the flavor does not remain in the finished product.
*Eligible wine.* Wine on which tax would be imposed by paragraph (1), (2), or (3) of [26 U.S.C. 5041(b)](https://www.govinfo.gov/link/uscode/26/5041) but for its removal to distilled spirits plant premises and which has not been subject to distillation at a distilled spirits plant after receipt in bond.
*Executed under penalties of perjury.* Signed with the prescribed declaration under the penalties of perjury as provided on or with respect to the return, claim, form, or other document, or where no form of declaration is prescribed, with the declaration: “I declare under the penalties of perjury that this \_\_\_\_\_\_\_\_ (insert type of document, such as statement, report, certificate, application, claim, or other document), including the documents submitted in support thereof, has been examined by me and, to the best of my knowledge and belief, is true, correct, and complete.”
*Fiscal year.* The period which begins October 1 and ends on the following September 30.
*Gallon or wine gallon.* The liquid measure equivalent to the volume of 231 cubic inches.
*Importer.* Any person who brings distilled spirits, wines, or beer into the United States from the Virgin Islands.
*Industrial spirits.* As to products of Puerto Rico, distilled spirits produced and warehoused at and withdrawn from distilled spirits plants established and operated under the provisions of this chapter relating to the establishment of such plants and the production, bonded warehousing, and withdrawal from bond of distilled spirits in the United States, or as to products of the Virgin Islands, distilled spirits produced, warehoused, and withdrawn under Virgin Islands regulations.
*IRC registry number.* The number assigned by TTB to each distilled spirits plant, bonded wine cellar, taxpaid wine bottling house, bonded wine warehouse, or brewery upon approval of an application made pursuant to Internal Revenue Code of 1986 requirements ([26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171), [5351-5353](https://www.govinfo.gov/link/uscode/26/5351), or [5401](https://www.govinfo.gov/link/uscode/26/5401)).
*Kind.* As applied to spirits, kind shall mean class and type as prescribed in [27 CFR part 5](/current/title-27/part-5). As applied to wines, kind shall mean the classes and types of wines as prescribed in [27 CFR part 4](/current/title-27/part-4).
*Liquor bottle.* A bottle made of glass or earthenware, or of other suitable material approved by the Food and Drug Administration, which has been designed or is intended for use as a container for distilled spirits for sale for beverage purposes and which has been determined by the appropriate TTB officer to adequately protect the revenue.
*Liquors.* Industrial spirits, distilled spirits, liqueurs, cordials and similar compounds, wines, and beer or any alcoholic preparation fit for beverage use.
*Natural wine.* The product of the juice or must of sound, ripe grapes or other sound, ripe fruit (including berries) made with any proper cellar treatment and containing not more than 21 percent by weight (21 degrees Brix dealcoholized wine) of total solids. For purposes of this definition, “proper cellar treatment” means a production practice or procedure authorized for natural wine by [part 24 of this chapter](/current/title-27/part-24), or, in the case of natural wine produced and imported subject to an international agreement or treaty, those practices and procedures acceptable to the United States under that agreement or treaty.
*Permit.* A formal written authorization of the Secretary of the Treasury of Puerto Rico.
*Person.* An individual, a trust, an estate, a partnership, an association, a company, or a corporation.
*Proof gallon.* A gallon of liquid at 60 degrees Fahrenheit which contains 50 percent by volume of ethyl alcohol having a specific gravity of 0.7939 at 60 degrees Fahrenheit referred to water at 60 degrees Fahrenheit as unity or the alcoholic equivalent thereof.
*Proof liter.* A liter of liquid at 60 degrees Fahrenheit which contains 50 percent by volume of ethyl alcohol having a specific gravity of 0.7939 at 60 degrees Fahrenheit referred to water at 60 degrees Fahrenheit as unity or the alcoholic equivalent thereof.
*Rectifier.* Any person required to hold a rectifier's basic permit under [27 U.S.C. 203(b)(1)](https://www.govinfo.gov/link/uscode/27/203).
*Revenue Agent.* Any duly authorized Commonwealth Internal Revenue Agent of the Department of the Treasury of Puerto Rico.
*Secretary.* The Secretary of the Treasury of Puerto Rico.
*Secretary or his delegate.* The Secretary or any officer or employee of the Department of the Treasury of Puerto Rico duly authorized by the Secretary to perform the function mentioned or described in this part.
*Taxpaid.* As used in this part with respect to liquors or articles of Puerto Rican manufacture, includes liquors or articles on which the tax was computed but with respect to which payment was deferred under the provisions of [subpart E of this part](/current/title-27/part-26/subpart-E).
*Treasury Account.* The Department of the Treasury's General Account at the Federal Reserve Bank of New York.
*United States.* The States and the District of Columbia.
*U.S.C.* The United States Code.
*Virgin Islands regulations.* Regulations adopted or issued by the Governor of the Virgin Islands, or by the Governor's duly authorized agents, with the concurrence of the Secretary of the Treasury of the United States or the Secretary's delegate, under the provisions of [26 U.S.C. 5314](https://www.govinfo.gov/link/uscode/26/5314), as amended, and [§ 26.201a](/current/title-27/section-26.201a).
*Wine.* Still wine, vermouth, or other aperitif wine, imitation, substandard, or artificial wine, compounds designated as wine, flavored, rectified, or sweetened wine, champagne or sparkling wine, and artificially carbonated wine, containing not over 24 percent of alcohol by volume. Wines containing more than 24 percent of alcohol by volume are classed and taxed as distilled spirits.
\[T.D. ATF-48, [43 FR 13551](https://www.federalregister.gov/citation/43-FR-13551), Mar. 31, 1978]
#### Editorial Note:
For Federal Register citations affecting [§ 26.11](/current/title-27/section-26.11), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
## Subpart C \[Reserved]
## Subpart Ca—Rum Imported Into the United States From Areas Other Than Puerto Rico and the Virgin Islands
#### § 26.30 Excise taxes.
Distilled spirits excise taxes, less the estimated amounts necessary for payment of refunds and drawbacks, collected on all rum imported into the United States (including rum from possessions other than Puerto Rico and the Virgin Islands), will be deposited into the Treasuries of Puerto Rico and the Virgin Islands according to the formula described in [§ 26.31](/current/title-27/section-26.31). The amount deposited into the Treasuries of Puerto Rico and the Virgin Islands shall be the lesser of \$10.50, or the rate imposed by [26 U.S.C. 5001(a)(1)](https://www.govinfo.gov/link/uscode/26/5001) (including adjustments to the effective tax rate under [26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010)), on each proof gallon of rum imported into the United States.
(Aug. 16, 1954, Chapter 736, 68A Stat. 907, as amended ([26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652)))
\[T.D. ATF-203, [50 FR 15888](https://www.federalregister.gov/citation/50-FR-15888), Apr. 23, 1985. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), July 25, 2001]
#### § 26.31 Formula.
(a) The amount of excise taxes collected on rum that is imported into the United States from areas other than Puerto Rico and the Virgin Islands shall be deposited into the Treasuries of Puerto Rico and the Virgin Islands at the rate prescribed in [26 U.S.C. 7652(f)](https://www.govinfo.gov/link/uscode/26/7652). The distribution of such amount between Puerto Rico and the Virgin Islands shall be computed by using permanent base percentages, which represent the excise taxes collected on rum brought into the United States from Puerto Rico and from the Virgin Islands during fiscal year 1983. The base percentages are 87.626889 percent for Puerto Rico and 12.373111 percent for the Virgin Islands. The formula shall be as follows:
(1) Take the total amount of excise taxes collected on all rum brought or imported into the United States from all areas (including Puerto Rico and the Virgin Islands) during the previous fiscal year (October 1-September 30) and multiply that amount by 0.87626889 to determine the share of the entire U.S. rum market that will be allotted to Puerto Rico and by 0.12373111 to determine the share of the entire U.S. rum market that will be allotted to the Virgin Islands;
(2) Subtract from the share allotted to Puerto Rico under [paragraph (a)(1)](/current/title-27/section-26.31#p-26.31\(a\)\(1\)) of this section the excise taxes collected on rum brought into the United States from Puerto Rico during the previous fiscal year, and subtract from the share allotted to the Virgin Islands under [paragraph (a)(1)](/current/title-27/section-26.31#p-26.31\(a\)\(1\)) of this section the excise taxes collected on rum imported into the United States from the Virgin Islands during the previous fiscal year, to determine each possession's loss or gain in excise taxes in relation to the previous fiscal year's U.S. rum market. Then divide each result by the total excise taxes collected on rum imported into the United States during the previous fiscal year from areas other than Puerto Rico and the Virgin Islands.
(b) Notwithstanding the formula prescribed in paragraph (a) above, the Virgin Islands' share of the excise taxes on rum imported into the United States from areas other than Puerto Rico and the Virgin Islands shall not exceed 49 percent nor drop below 12.373111 percent. Puerto Rico's share of the excise taxes on rum imported into the United States from areas other than Puerto Rico and the Virgin Islands shall not exceed 87.626889 percent nor drop below 51 percent.
(c) The percentage for the distribution of the excise taxes collected on rum imported into the United States from areas other than Puerto Rico and the Virgin Islands, that will be paid over to the Treasuries of Puerto Rico and the Virgin Islands, shall be effective on March 1 of each year, and shall remain in effect until March 1 of the following year.
(d) The method for transferring the excise tax collections on rum imported from areas other than Puerto Rico and the Virgin Islands, into the Treasuries of Puerto Rico and the Virgin Islands shall be the same as the method used for transferring excise taxes into the Treasury of Puerto Rico on distilled spirits (with an alcohol content of at least 92 percent rum) brought into the United States from Puerto Rico.
(e) The formula prescribed in this section shall take effect on March 1, 1987. Prior to that date, Puerto Rico shall continue to receive 86.4 percent of the eligible excise taxes on rum imported from areas other than Puerto Rico and the Virgin Islands. The Virgin Islands shall continue to receive 13.6 percent of these eligible excise taxes until March 1, 1987.
(Aug. 16, 1954, Chapter 736, 68A Stat. 907, as amended ([26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652)))
\[T.D. ATF-233, [51 FR 28078](https://www.federalregister.gov/citation/51-FR-28078), Aug. 5, 1986; [52 FR 2222](https://www.federalregister.gov/citation/52-FR-2222), Jan. 21, 1987; T.D. TTB-91, [76 FR 5478](https://www.federalregister.gov/citation/76-FR-5478), Feb. 1, 2011]
## Subpart Cb—Products Coming Into the United States From Puerto Rico
#### § 26.35 Taxable status.
(a) Liquors coming into the United States from Puerto Rico, except as provided in [§ 26.36](/current/title-27/section-26.36), are subject to a tax equal to the internal revenue tax imposed on the production in the United States of like liquors. Articles coming into the United States from Puerto Rico, except as provided in [§ 26.36](/current/title-27/section-26.36), are subject to tax on the liquors contained therein at the rates imposed in the United States on like liquors of domestic production.
(b) The excise taxes collected on distilled spirits or articles containing distilled spirits shall be deposited into the Treasury of Puerto Rico only if at least 92 percent of the alcoholic content of such products is rum. The amount deposited into the Treasury of Puerto Rico shall not exceed the lesser of \$10.50, or the rate imposed by [26 U.S.C. 5001(a)(1)](https://www.govinfo.gov/link/uscode/26/5001) (including adjustments to the effective tax rate under [26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010)), on each proof gallon of such distilled spirits or articles, other than eligible articles, containing distilled spirits coming into the United States or consumed on the island. Such excise tax deposits will be reduced by the estimated amount necessary for payment of refunds and drawbacks.
(c) Except for products described in [26 U.S.C. 7652(c)](https://www.govinfo.gov/link/uscode/26/7652), no excise taxes shall be deposited into the Treasury of Puerto Rico if an excise tax subsidy is provided by Puerto Rico that is of a kind different from, or in an amount per value or volume of production greater than, any subsidy offered by Puerto Rico to industries manufacturing products not subject to Federal excise tax.
(Sec. 2682, Pub. L. 98-369, 98 Stat. 494 ([26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652)))
\[T.D. ATF-175, [49 FR 20804](https://www.federalregister.gov/citation/49-FR-20804), May 16, 1984, as amended by T.D. ATF-203, [50 FR 15888](https://www.federalregister.gov/citation/50-FR-15888), Apr. 23, 1985; T.D. ATF-263, [52 FR 46593](https://www.federalregister.gov/citation/52-FR-46593), Dec. 9, 1987. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), July 25, 2001]
#### § 26.36 Products exempt from tax.
(a) *General.* Industrial spirits, denatured spirits, and products made with denatured spirits in Puerto Rico may be brought into the United States without incurring tax liability imposed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001) or [7652](https://www.govinfo.gov/link/uscode/26/7652).
(b) *Industrial spirits.* A distiller of industrial spirits who registers and files a bond as a distilled spirits plant in accordance with [part 19 of this chapter](/current/title-27/part-19) may ship industrial spirits to a tax-free alcohol user in the United States who holds a permit issued under [part 22 of this chapter](/current/title-27/part-22).. These shipments shall be made in accordance with the requirements of [parts 19](/current/title-27/part-19) and [22 of this chapter](/current/title-27/part-22).
(c) *Denatured spirits.* A distiller who registers and files a bond as a distilled spirits plant in accordance with [part 19 of this chapter](/current/title-27/part-19) and who denatures spirits in accordance with [parts 19](/current/title-27/part-19) and [21 of this chapter](/current/title-27/part-21) may ship completely denatured alcohol to anyone in the United States, and may ship specially denatured spirits to a dealer or user of specially denatured spirits in the United States or Puerto Rico who holds a permit issued under [part 20 of this chapter](/current/title-27/part-20). These shipments shall be made in accordance with the requirements of [parts 19](/current/title-27/part-19) and [20 of this chapter](/current/title-27/part-20), and [subpart Ia of this part](/current/title-27/part-26/subpart-Ia).
(d) *Products made with denatured spirits.*
(1) A person in Puerto Rico who manufactures products with completely denatured alcohol in accordance with the requirements of [part 20 of this chapter](/current/title-27/part-20) may ship those products to the United States in accordance with the requirements of [part 20 of this chapter](/current/title-27/part-20), and [subpart Ia of this part](/current/title-27/part-26/subpart-Ia).
(2) A person in Puerto Rico who manufactures products with specially denatured spirits may ship those products to the United States if that person
(i) obtains a permit to use specially denatured spirits under [part 20 of this chapter](/current/title-27/part-20), and
(ii) complies with the requirements of [part 20 of this chapter](/current/title-27/part-20) and [subpart Ia of this part](/current/title-27/part-26/subpart-Ia) relating to the manufacture and shipment of those products.
\[T.D. ATF-199, [50 FR 9198](https://www.federalregister.gov/citation/50-FR-9198), Mar. 6, 1985; T.D. ATF-199, [50 FR 20099](https://www.federalregister.gov/citation/50-FR-20099), May 14, 1985, as amended by T.D. ATF-271, [53 FR 17559](https://www.federalregister.gov/citation/53-FR-17559), May 17, 1988]
#### §§ 26.36a-26.36b \[Reserved]
#### § 26.36c Shipments of bulk distilled spirits to the United States without payment of tax.
Bulk distilled spirits may be brought into the United States from Puerto Rico without payment of tax for transfer from customs custody to the bonded premises of a distilled spirits plant qualified under [part 19 of this chapter](/current/title-27/part-19). Such shipments are subject to the provisions of subpart Ib.
\[T.D. ATF-62, [44 FR 71709](https://www.federalregister.gov/citation/44-FR-71709), Dec. 11, 1979]
#### § 26.37 Alcohol and Tobacco Tax and Trade Bureau Officers.
Appropriate TTB officers are authorized to collect internal revenue taxes on liquors and articles subject to tax, which are to be shipped to the United States.
\[T.D. TTB-44, [71 FR 16944](https://www.federalregister.gov/citation/71-FR-16944), Apr. 4, 2006]
#### § 26.38 Containers of distilled spirits.
Containers of distilled spirits brought into the United States from Puerto Rico, having a capacity of not more than 1 gallon (3.785 liters), shall conform to the requirements of [subpart P of this part](/current/title-27/part-26/subpart-P).
\[T.D. ATF-34, [41 FR 46863](https://www.federalregister.gov/citation/41-FR-46863), Oct. 26, 1976]
#### § 26.39 Labels.
All labels affixed to bottles of liquors coming into the United States shall conform to the requirements of the Federal Alcohol Administration Act and implementing regulations ([parts 4](/current/title-27/part-4), [5](/current/title-27/part-5), and [7 of this chapter](/current/title-27/part-7)).
\[T.D. ATF-48, [44 FR 55851](https://www.federalregister.gov/citation/44-FR-55851), Sept. 28, 1979]
#### § 26.40 Marking containers of distilled spirits.
The distiller, rectifier, or bottler shall serially number each case, barrel, cask, or similar container of distilled spirits filled for shipment to the United States. In addition to the serial number of the container, the distiller, rectifier, or bottler shall plainly print, stamp, or stencil with durable coloring material, in letters and figures not less than one-half inch high, on the head of each barrel, cask or similar container or on one side of each case, as follows:
(a) The name of the distiller, rectifier, or bottler.
(b) The brand name and kind of liquor;
(c) The wine and proof gallon contents; or, for bottles filled according to the metric standards of fill prescribed by [§ 5.47a](/current/title-27/section-5.47a), of this chapter, the contents in liters and the proof of the spirits; and
(d) In the case of barrels or casks, the serial number of the permit to ship, Form 487-B, prefixed by the number of such form (e.g., “487-B-61-1”)
(e) In the case of bulk containers shipped to the United States under subpart Ib, the serial number of the application and permit to ship, TTB Form 5110.31, instead of the serial number of Form 487-B.
\[T.D. ATF-43, [42 FR 30836](https://www.federalregister.gov/citation/42-FR-30836), June 17, 1977, as amended by T.D. ATF-62, [44 FR 71709](https://www.federalregister.gov/citation/44-FR-71709), Dec. 11, 1979]
#### § 26.41 Destruction of marks and brands.
The marks, brands, and serial numbers required by this part to be placed on barrels, casks, or similar containers, or cases, shall not be removed or obscured or obliterated before the contents thereof have been removed.
(Sec. 201, Pub. L. 85-859, 1358, as amended, [26 U.S.C. 5205](https://www.govinfo.gov/link/uscode/26/5205))
\[T.D. ATF-198, [50 FR 8548](https://www.federalregister.gov/citation/50-FR-8548), Mar. 1, 1985]
#### § 26.43 Samples.
The appropriate TTB officer may require samples of liquors and articles to be submitted whenever desired for laboratory analysis in order to determine the rates of tax applicable thereto.
\[[20 FR 6077](https://www.federalregister.gov/citation/20-FR-6077), Aug. 20, 1955, as amended by T.D. 7006, [34 FR 2250](https://www.federalregister.gov/citation/34-FR-2250), Feb. 15, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
### Dealer Registration and Recordkeeping
#### § 26.44 Liquor dealer registration and recordkeeping.
Every person bringing liquors into the United States from Puerto Rico who sells, or offers for sale, such liquors must register and keep records as a wholesale dealer in liquor or as a retail dealer in liquor in accordance with [part 31 of this chapter](/current/title-27/part-31).
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121), [5122](https://www.govinfo.gov/link/uscode/26/5122), [5123](https://www.govinfo.gov/link/uscode/26/5123), [5124](https://www.govinfo.gov/link/uscode/26/5124).)
\[T.D. TTB-79, [74 FR 37405](https://www.federalregister.gov/citation/74-FR-37405), July 28, 2009]
#### § 26.45 Warehouse receipts covering distilled spirits.
The sale of warehouse receipts for distilled spirits is equivalent to the sale of distilled spirits. Accordingly, every person bringing distilled spirits into the United States from Puerto Rico who sells, or offers for sale, warehouse receipts for distilled spirits stored in warehouses, or elsewhere, must register and keep records as a dealer in liquors at the place where the warehouse receipts are sold, or offered for sale, in accordance with [part 31 of this chapter](/current/title-27/part-31).
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121), [5122](https://www.govinfo.gov/link/uscode/26/5122), [5123](https://www.govinfo.gov/link/uscode/26/5123), [5124](https://www.govinfo.gov/link/uscode/26/5124))
\[T.D. TTB-79, [74 FR 37405](https://www.federalregister.gov/citation/74-FR-37405), July 28, 2009]
#### §§ 26.46-26.47 \[Reserved]
## Subpart D—Formulas for Products From Puerto Rico
#### Source:
[44 FR 71709](https://www.federalregister.gov/citation/44-FR-71709), Dec. 11, 1979, unless otherwise noted.
#### § 26.50 Formulas for liquors.
(a) *Distilled spirits products.* Except for products which are exempt from tax, as specified in [§ 26.36](/current/title-27/section-26.36), formulas are required by [part 5 of this chapter](/current/title-27/part-5) for distilled spirits products shipped to the United States from Puerto Rico. If a formula is submitted to cover only the production of spirits which are to be transferred to the bonded premises of a DSP under [26 U.S.C. 5232](https://www.govinfo.gov/link/uscode/26/5232), the formula shall include a statement to that effect. If any product contains liquors made outside of Puerto Rico, the country of origin for each such liquor shall be stated on the formula. These formulas shall be submitted on TTB Form 5110.38, in accordance with [§ 26.54](/current/title-27/section-26.54).
(b) *Wine.* Persons in Puerto Rico who ship wine to the United States shall comply with the formula requirements of [part 24 of this chapter](/current/title-27/part-24). If any wine contains liquors made outside of Puerto Rico, the country of origin for each such liquor shall be stated on the formula. All formulas required by this paragraph shall be submitted on TTB Form 698 Supplemental, in accordance with [§ 26.54](/current/title-27/section-26.54).
(Approved by the Office of Management and Budget under control number 1512-0204)
\[T.D. ATF-198, [50 FR 8549](https://www.federalregister.gov/citation/50-FR-8549), Mar. 1, 1985. Redesignated and amended by T.D. ATF-459, [66 FR 38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001; T.D. TTB-91, [76 FR 5479](https://www.federalregister.gov/citation/76-FR-5479), Feb. 1, 2011]
#### § 26.50a Verification of eligible flavors.
(a) Any person who, after December 1, 1990, ships to the United States any distilled spirits on which the tax has been or is to be paid or determined at an effective tax rate based in part on the alcohol content derived from any eligible flavor not previously approved on TTB Form 5530.5 (1678) or 5150.19 shall, before the first tax determination at that rate, request and receive a statement of eligibility for each flavor to be used in the computation of the effective tax rate.
(b) To receive a statement of eligibility, the person shipping the distilled spirits shall submit to the TTB Alcohol and Tobacco Laboratory, 6000 Ammendale Road, Ammendale, MD 20705, the following:
(1) An 8-ounce sample; and
(2) A statement of composition using TTB Form 5154.1 or a letterhead request that lists the—
(i) Name and percentage of alcohol by volume of the flavor; and
(ii) Name and quantity of each ingredient used in the manufacture of the flavor.
(Approved by the Office of Management and Budget under control number 1512-0203)
(Act of August 16, 1954, Pub. L. 591, 68A Stat. 907, as amended ([26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652)); Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended ([26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001)); Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended ([26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010)))
\[T.D. ATF-297, [55 FR 18066](https://www.federalregister.gov/citation/55-FR-18066), Apr. 30, 1990, as amended by T.D. ATF-451, [66 FR 21669](https://www.federalregister.gov/citation/66-FR-21669), May 1, 2001; T.D. TTB-44, [71 FR 16944](https://www.federalregister.gov/citation/71-FR-16944), Apr. 4, 2006]
#### § 26.51 Formulas for articles, eligible articles and products manufactured with denatured spirits.
(a) *Formulas for articles and eligible articles.* Formulas for articles made with distilled spirits must show the quantity and proof of the distilled spirits used, and the percentage of alcohol by volume contained in the finished product. Formulas for articles made with beer or wine must show the kind and quantity thereof (liquid measure), and the percent of alcohol by volume of such beer or wine. Formulas and samples for eligible articles are required in accordance with [subpart F of part 17 of this chapter](/current/title-27/part-17/subpart-F).
(b) *Formulas for products manufactured with denatured spirits.* Products manufactured with denatured spirits shall be manufactured in accordance with the formula requirements of [part 20 of this chapter](/current/title-27/part-20) for similar products made in the United States.
(1) Products may be made with completely denatured alcohol for sale under brand names under [part 20 of this chapter](/current/title-27/part-20) without obtaining an approved formula. If ingredients are added in sufficient quantities to materially change the composition and character of the completely denatured alcohol, the product is not classified as completely denatured alcohol and may not be marked, branded, or sold as completely denatured alcohol.
(2) Products made with specially denatured spirits shall be made in accordance with
(i) a general-use formula approved as provided in [part 20 of this chapter](/current/title-27/part-20), or
(ii) an approved formula on Form 5150.19, or previously approved on TTB Form 1479-A or 27-B Supplemental.
(c) *Formulas required.* Formulas required by this section shall be submitted on Form 5150.19, except that formulas for eligible articles shall be submitted on Form 5154.1 (formerly 1678). Formulas shall be submitted in accordance with [§ 26.54](/current/title-27/section-26.54). Any formula for an eligible article approved on Form 5150.19 prior to October 23, 1986 shall continue to be valid until revoked or voluntarily surrendered. Any person holding such a formula is not required to submit a new formula.
(Approved by the Office of Management and Budget under control number 1512-0494)
\[[44 FR 71709](https://www.federalregister.gov/citation/44-FR-71709), Dec. 11, 1979, as amended by T.D. ATF-199, [50 FR 9198](https://www.federalregister.gov/citation/50-FR-9198), Mar. 6, 1985; T.D. ATF-263, [52 FR 46593](https://www.federalregister.gov/citation/52-FR-46593), Dec. 9, 1987; T.D. ATF-379, [61 FR 31427](https://www.federalregister.gov/citation/61-FR-31427), June 20, 1996. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001]
#### § 26.52 Still wines containing carbon dioxide.
(a) *General.* Still wines may contain not more than 0.392 gram of carbon dioxide per 100 milliliters of wine; except that a tolerance to this maximum limitation, not to exceed 0.009 gram of carbon dioxide per 100 milliliters of wine, will be allowed where the amount of carbon dioxide in excess of 0.392 gram per 100 milliliters of wine was due to mechanical variations which could not be completely controlled under good commercial practices. Such tolerance will not be allowed where it is found that the limitation of 0.392 gram of carbon dioxide per 100 milliliters of wine is continuously or intentionally exceeded, or where the variation results from the use of methods or equipment not in accord with good commercial practices.
(b) *Notice required.* Proprietors intending to add carbon dioxide to, or retain carbon dioxide in, still wines to be shipped to the United States shall submit a notice to the appropriate TTB officer. The notice shall show the name and address of the proprietor and shall identify the method or process, the kinds (class and type) of wine, and the type of equipment to be used. A corrected notice shall be filed if there is any change (except for minor changes) in the information contained in the notice.
(c) *Filing and disposition of notice.* The notice required by [paragraph (b)](/current/title-27/section-26.52#p-26.52\(b\)) of this section shall be submitted in quadruplicate to the appropriate TTB officer, who shall retain one copy, forward one copy to the Secretary, and one copy to the revenue agent at the proprietor's premises, and return one copy to the proprietor. The proprietor shall keep the notice available for examination by revenue agents.
(Approved by the Office of Management and Budget under control number 1512-0352)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1331, as amended ([26 U.S.C 5041](https://www.govinfo.gov/link/uscode/26/5041)))
\[[20 FR 6077](https://www.federalregister.gov/citation/20-FR-6077), Aug. 20, 1955. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-172, [49 FR 14943](https://www.federalregister.gov/citation/49-FR-14943), Apr. 16, 1984; T.D. ATF-251, [52 FR 19338](https://www.federalregister.gov/citation/52-FR-19338), May 22, 1987]
#### § 26.53 Changes of formulas.
Any change in the ingredients composing a product covered by an approved formula will necessitate the submission of a new formula.
#### § 26.54 Filing and disposition of formulas.
Formulas required by this subpart must be submitted, and disposed of, in accordance with the instructions on the prescribed TTB form. The applicant shall maintain copies of approved formulas available for examination by revenue agents.
\[T.D. ATF-451, [66 FR 21669](https://www.federalregister.gov/citation/66-FR-21669), May 1, 2001]
#### § 26.55 Previously approved formulas.
Any formula approved on Form 27-B Supplemental prior to January 1, 1980, shall continue to be valid until revoked or voluntarily surrendered. Any person holding such a formula is not required to submit a new formula. If an approved formula on Form 27-B Supplemental indicates that carbon dioxide will be added to, or retained in, still wine, the notice requirement of [§ 26.52](/current/title-27/section-26.52) shall not apply.
\[[44 FR 71709](https://www.federalregister.gov/citation/44-FR-71709), Dec. 11, 1979. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001]
## Subpart E—Taxpayment of Liquors and Articles in Puerto Rico
#### Source:
T.D. 6551, [26 FR 1490](https://www.federalregister.gov/citation/26-FR-1490), Feb. 22, 1961, unless otherwise noted. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975.
### Bonds
#### § 26.61 General.
Every person filing a bond under this subpart, or consent of surety on such bond, must file it in accordance with the instructions on the form.
\[T.D. ATF-451, [66 FR 21669](https://www.federalregister.gov/citation/66-FR-21669), May 1, 2001]
#### § 26.62 Corporate surety.
(a) Surety bonds may be given only with corporate sureties holding certificates of authority from, and subject to the limitations prescribed by, the Secretary of the Treasury of the United States, as set forth in the current revision of U.S. Treasury Department Circular 570 (Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies).
(b) U.S. Treasury Department Circular 570 is published in the Federal Register annually on the first business day in July, and supplemental changes are published periodically thereafter (see *[https://www.federalregister.gov](https://www.federalregister.gov)*). The most recent circular and any supplemental changes to it may be viewed on the United States Treasury Department's Bureau of the Fiscal Service website (see *[https://fiscal.treasury.gov](https://fiscal.treasury.gov)*).
\[T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 26.62a Filing of powers of attorney.
Each bond, and each consent to changes in the terms of a bond, shall be accompanied by a power of attorney authorizing the agent or officer who executed the bond or consent to so act on behalf of the surety. The appropriate TTB officer who is authorized to approve the bond may, when he deems it necessary, require additional evidence of the authority of the agent or officer to execute the bond or consent.
(61 Stat. 648; [6 U.S.C. 6](https://www.govinfo.gov/link/uscode/6/6), [7](https://www.govinfo.gov/link/uscode/6/7))
\[T.D. ATF-2, [37 FR 22736](https://www.federalregister.gov/citation/37-FR-22736), Oct. 21, 1972. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-251, [52 FR 19338](https://www.federalregister.gov/citation/52-FR-19338), May 22, 1987]
#### § 26.62b Execution of powers of attorney.
The power of attorney shall be prepared on a form provided by the surety company and executed under the corporate seal of the company. If the power of attorney submitted is other than a manually signed original, it shall be accompanied by certification of its validity.
(61 Stat. 648; [6 U.S.C. 6](https://www.govinfo.gov/link/uscode/6/6), [7](https://www.govinfo.gov/link/uscode/6/7))
\[T.D. ATF-2, [37 FR 22736](https://www.federalregister.gov/citation/37-FR-22736), Oct. 21, 1972. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### § 26.63 Deposit of securities or cash (including cash equivalents) in lieu of corporate surety.
(a) *Deposit of securities.* In lieu of corporate surety, the principal may pledge and deposit, as surety for his bond, securities which are transferable and are guaranteed as to both interest and principal by the United States, in accordance with the provisions of [31 CFR part 225](/current/title-31/part-225)— Acceptance of Bonds Secured by Government Obligations in Lieu of Bonds with Sureties.
(b) *Deposit of cash or cash equivalent.* In lieu of corporate surety, a person can file a bond that guarantees payment of the liability by submitting cash or its equivalent (including a money order, cashier's check, or personal check). Cash or its equivalent must be no less than the penal sums of the required bonds. Cash equivalents must be payable to the Alcohol and Tobacco Tax and Trade Bureau.
([5 U.S.C. 552(a)](https://www.govinfo.gov/link/uscode/5/552) (80 Stat. 383, as amended); 61 Stat. 650; [6 U.S.C. 15](https://www.govinfo.gov/link/uscode/6/15))
\[T.D. 6551, [26 FR 1490](https://www.federalregister.gov/citation/26-FR-1490), Feb. 22, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-92, [46 FR 46921](https://www.federalregister.gov/citation/46-FR-46921), Sept. 23, 1981; T.D. TTB-146, [82 FR 1130](https://www.federalregister.gov/citation/82-FR-1130), Jan. 4, 2017]
#### § 26.64 Consents of surety.
Consents of surety to changes in the terms of bonds shall be executed on TTB Form 5000.18 by the principal and by the surety with the same formality and proof of authority as is required for the execution of bonds.
\[T.D. 6551, [26 FR 1490](https://www.federalregister.gov/citation/26-FR-1490), Feb. 22, 1961, as amended T.D. TTB-146, [82 FR 1130](https://www.federalregister.gov/citation/82-FR-1130), Jan. 4, 2017]
#### § 26.65 Authority to approve bonds and consents of surety.
The appropriate TTB officer is authorized to approve all bonds and consents of surety filed under this part.
\[T.D. 6551, [26 FR 1490](https://www.federalregister.gov/citation/26-FR-1490), Feb. 22, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-251, [52 FR 19338](https://www.federalregister.gov/citation/52-FR-19338), May 22, 1987]
#### § 26.66 Bond, TTB Form 5110.50—Distilled spirits.
(a) *General.* Except as provided in [paragraph (c)](/current/title-27/section-26.66#p-26.66\(c\)) of this section, if any person intends to ship to the United States, distilled spirits products of Puerto Rican manufacture from bonded storage in Puerto Rico on computation, but before payment, of the tax imposed by [26 U.S.C. 7652(a)](https://www.govinfo.gov/link/uscode/26/7652), equal to the tax imposed in the United States by [26 U.S.C. 5001(a)(1)](https://www.govinfo.gov/link/uscode/26/5001), the person must, before making any such shipment, furnish a bond. The person must furnish a bond on TTB Form 5110.50 for each premises from which shipment will be made, to secure payment of such tax, at the time and in the manner prescribed in this subpart, on all distilled spirits products shipped. The bond must be executed in a penal sum not less than the amount of unpaid tax which, at any one time, is chargeable against the bond. The penal sum of such bond must not exceed $1,000,000, but in no case will the penal sum be less than $1,000.
(b) *Blanket bond.* Any person who is the proprietor of more than one premises in Puerto Rico from which shipment of spirits to the United States will be made, may, in lieu of furnishing two or more separate bonds on TTB Form 5110.50 as required by [paragraph (a)](/current/title-27/section-26.66#p-26.66\(a\)) of this section, furnish a blanket bond on TTB Form 5110.50. The penal sum of such blanket bond shall be equal to the sum of the penal sums of all the bonds in lieu of which it is given. Such blanket bond on TTB Form 5110.50 shall show each bonded warehouse and/or bonded processing room and/or rectifying plant to be covered by the bond, and the part of the total penal sum (computed in accordance with [paragraph (a)](/current/title-27/section-26.66#p-26.66\(a\)) of this section) to be allocated to each of the designated premises. If the penal sum of the bond allocated to a designated premises is in an amount less than the maximum prescribed in [paragraph (a)](/current/title-27/section-26.66#p-26.66\(a\)) of this section, transactions at such premises shall not exceed the quantity permissible, as reflected by the penal sum allocated in the bond to such premises. Such blanket bond shall contain the terms and conditions of the bonds in lieu of which it is given and shall be conditioned that the total amount of the bond shall be available for satisfaction of any liability incurred under the terms and conditions of such bond.
(c) *Bonds covering spirits for nonindustrial use and industrial use* —
(1) *Nonindustrial use.* A person who pays tax on a deferred basis under [§ 26.112](/current/title-27/section-26.112) is not required to furnish a bond under this section to cover shipments of distilled spirits for nonindustrial use during any portion of a calendar year for which the person is eligible to use an annual or quarterly return period under [§ 26.112(b)(2)](/current/title-27/section-26.112#p-26.112\(b\)\(2\)) or [(b)(3)](/current/title-27/section-26.112#p-26.112\(b\)\(3\)). For purposes of the preceding sentence, a person is considered to be paying tax on a deferred basis even if the person does not pay tax during every return period as long as the person intends to pay tax in a future period. TTB may require a person who has defaulted on any payment to prepay tax as provided in [§ 26.112(e)](/current/title-27/section-26.112#p-26.112\(e\)).
(2) *Industrial use.* A person is required to furnish a bond under this section to cover shipments of distilled spirits for industrial use even if the person pays tax on a deferred basis under [§ 26.112](/current/title-27/section-26.112) and is eligible to use an annual or quarterly return period under [§ 26.112(b)(2)](/current/title-27/section-26.112#p-26.112\(b\)\(2\)) or [(b)(3)](/current/title-27/section-26.112#p-26.112\(b\)\(3\)). For bond requirements governing industrial spirits and other products brought into the United States without incurring tax liability, see [§ 26.36](/current/title-27/section-26.36).
(3) *Nonindustrial use and industrial use defined.* The nonindustrial and industrial uses of distilled spirits are defined in [subpart D of part 1 of this chapter](/current/title-27/part-1/subpart-D).
(Act of August 16, 1954, 68A Stat. 847, as amended, 907, as amended ([26 U.S.C 7101](https://www.govinfo.gov/link/uscode/26/7101), [7102](https://www.govinfo.gov/link/uscode/26/7102), [7652](https://www.govinfo.gov/link/uscode/26/7652)))
\[T.D. ATF-62, [44 FR 71710](https://www.federalregister.gov/citation/44-FR-71710), Dec. 11, 1979, as amended by T.D. TTB-146, [82 FR 1130](https://www.federalregister.gov/citation/82-FR-1130), Jan. 4, 2017]
#### § 26.67 Bond, TTB Form 5120.32—Wine.
(a) *General.* Except as provided in [paragraph (b)](/current/title-27/section-26.67#p-26.67\(b\)) of this section, where a proprietor intends to withdraw, for purpose of shipment to the United States, wine of Puerto Rican manufacture from bonded storage in Puerto Rico on computation, but before payment, of the tax imposed by [26 U.S.C. 7652(a)](https://www.govinfo.gov/link/uscode/26/7652), equal to the tax imposed in the United States by [26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041), the proprietor must, before making any such withdrawal, furnish a bond. The proprietor must furnish the bond on TTB Form 5120.32, to secure payment of such tax, at the time and in the manner prescribed in this subpart, on all wine so withdrawn. The bond must be executed in a penal sum not less than the amount of unpaid tax which, at any one time, is chargeable against the bond. The penal sum of such bond must not exceed $250,000, but in no case will the penal sum be less than $500.
(b) *Bonds covering wine for nonindustrial use and industrial use* —
(1) *Nonindustrial use.* A proprietor who pays tax on a deferred basis under [§ 26.112](/current/title-27/section-26.112) is not required to furnish a bond under this section to cover shipments of wine for nonindustrial use during any portion of a calendar year for which the proprietor is eligible to use an annual or quarterly return period under [§ 26.112(b)(2)](/current/title-27/section-26.112#p-26.112\(b\)\(2\)) or [(b)(3)](/current/title-27/section-26.112#p-26.112\(b\)\(3\)). For purposes of the preceding sentence, the proprietor is considered to be paying tax on a deferred basis even if the proprietor does not pay tax during every return period as long as the proprietor intends to pay tax in a future period. TTB may require a proprietor who has defaulted on any payment to prepay tax as provided in [§ 26.112(e)](/current/title-27/section-26.112#p-26.112\(e\)).
(2) *Industrial use.* A proprietor is required to furnish a bond under this section to cover shipments of wine for industrial use even if the proprietor pays tax on a deferred basis under [§ 26.112](/current/title-27/section-26.112) and is eligible to use an annual or quarterly return period under [§ 26.112(b)(2)](/current/title-27/section-26.112#p-26.112\(b\)\(2\)) or [(b)(3)](/current/title-27/section-26.112#p-26.112\(b\)\(3\)).
(3) *Nonindustrial use and industrial use defined.* The nonindustrial and industrial uses of wine are defined in [subpart D of part 1 of this chapter](/current/title-27/part-1/subpart-D).
(Aug. 16, 1954, Chapter 736, 68A Stat. 775, as amended, 847, as amended, 906, 907, as amended ([26 U.S.C. 6302](https://www.govinfo.gov/link/uscode/26/6302), [7101](https://www.govinfo.gov/link/uscode/26/7101), [7102](https://www.govinfo.gov/link/uscode/26/7102), [7651(2)(B)](https://www.govinfo.gov/link/uscode/26/7651), [7652(a)](https://www.govinfo.gov/link/uscode/26/7652)))
\[T.D. TTB-146, [82 FR 1131](https://www.federalregister.gov/citation/82-FR-1131), Jan. 4, 2017]
#### § 26.68 Bond, TTB Form 5130.16—Beer.
(a) *General.* Except as provided in [paragraph (b)](/current/title-27/section-26.68#p-26.68\(b\)) of this section, where a brewer intends to withdraw, for purpose of shipment to the United States, beer of Puerto Rican manufacture from bonded storage in Puerto Rico on computation, but before payment, of the tax imposed by [26 U.S.C. 7652(a)](https://www.govinfo.gov/link/uscode/26/7652), equal to the tax imposed in the United States by [26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051), the brewer must, before making any such withdrawal, furnish a bond. The brewer must furnish the bond on TTB Form 5130.16, to secure payment of such tax, at the time and in the manner prescribed in this subpart, on all beer so withdrawn. The bond must be executed in a penal sum not less than the amount of unpaid tax which, at any one time, is chargeable against the bond. The penal sum of such bond must not exceed $500,000, but in no case will the penal sum be less than $1,000.
(b) *Bond exemption for certain brewers based on tax liability.* A brewer who pays tax on a deferred basis under [§ 26.112](/current/title-27/section-26.112) is not required to furnish a bond under this section to cover shipments of beer during any portion of a calendar year for which the brewer is eligible to use an annual or quarterly return period under [§ 26.112(b)(2)](/current/title-27/section-26.112#p-26.112\(b\)\(2\)) or [(b)(3)](/current/title-27/section-26.112#p-26.112\(b\)\(3\)). For purposes of the preceding sentence, the brewer is considered to be paying tax on a deferred basis even if the brewer does not pay tax during every relevant period as long as the brewer intends to pay tax in a future period. TTB may require a brewer who has defaulted on any payment to prepay tax as provided in [§ 26.112(e)](/current/title-27/section-26.112#p-26.112\(e\)).
(Aug. 16, 1954, Chapter 736, 68A Stat. 775, as amended, 847, as amended, 906, 907, as amended ([26 U.S.C. 6302](https://www.govinfo.gov/link/uscode/26/6302), [7101](https://www.govinfo.gov/link/uscode/26/7101), [7102](https://www.govinfo.gov/link/uscode/26/7102), [7651(2)(B)](https://www.govinfo.gov/link/uscode/26/7651), [7652(a)](https://www.govinfo.gov/link/uscode/26/7652)))
\[T.D. TTB-146, [82 FR 1131](https://www.federalregister.gov/citation/82-FR-1131), Jan. 4, 2017]
#### § 26.68a Bond account.
Every person who files a bond under this subpart shall keep an account of the charges against and credits to the bond if the penal sum of his bond is less than the maximum prescribed in [§§ 26.66(a)](/current/title-27/section-26.66#p-26.66\(a\)), [26.67](/current/title-27/section-26.67), or [§ 26.68](/current/title-27/section-26.68), or if the penal sum allocated to his premises under [§ 26.66(b)](/current/title-27/section-26.66#p-26.66\(b\)) is less than the prescribed maximum. He shall charge the bond with the amount of liability he accepts at the time he executes TTB Form 5110.51 or 5100.21, and shall credit the bond with the amount of the tax paid at the time he files each return, and remittance. The account shall also show the balance available under the bond at any one time.
\[T.D. ATF-62, [44 FR 71710](https://www.federalregister.gov/citation/44-FR-71710), Dec. 11, 1979. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001; T.D. TTB-146, [82 FR 1131](https://www.federalregister.gov/citation/82-FR-1131), Jan. 4, 2017]
#### § 26.69 Strengthening bonds.
In all cases where the penal sum of any bond becomes insufficient, the principal shall either give a strengthening bond with the same surety to attain a sufficient penal sum, or give a new bond to cover the entire liability. Strengthening bonds will not be approved where any notation is made thereon which is intended, or which may be construed, as a release of any former bond, or as limiting the amount of any bond to less than its full penal sum. Strengthening bonds shall show the current date of execution and the effective date.
#### § 26.70 Superseding bonds and new bonds for previously exempt persons.
(a) *Superseding bonds.* Superseding bonds will be required in case of insolvency or removal of any surety, and may, at the discretion of the appropriate TTB officer, be required in any other contingency affecting the validity or impairing the efficiency of an existing bond. Executors, administrators, assignees, receivers, trustees, or other persons acting in a fiduciary capacity, continuing or liquidating the business of the principal, must execute and file a superseding bond or obtain the consent of the surety or sureties on the existing bond or bonds. Where, under the provisions of [§ 26.72](/current/title-27/section-26.72), the surety on any bond given under this subpart has filed an application to be relieved of liability under said bond and the principal desires or intends to continue the operations to which such bond relates, he must file a valid superseding bond to be effective on or before the date specified in the surety's notice. Superseding bonds must show the current date of execution and the effective date.
(b) *New bonds for previously exempt persons.* If a person has not furnished a bond as provided in this subpart because the person was exempt from bond requirements under [§§ 26.66(c)](/current/title-27/section-26.66#p-26.66\(c\)), [26.67(b)](/current/title-27/section-26.67#p-26.67\(b\)), or [26.68(b)](/current/title-27/section-26.68#p-26.68\(b\)), the person must furnish a bond to cover shipments following the first date on which the aggregate amount of tax due from the person during the calendar year exceeds \$50,000. If a person has not furnished the required bond for shipments under this subpart, the person must prepay tax on those shipments as provided in [§ 26.112(e)](/current/title-27/section-26.112#p-26.112\(e\)).
\[T.D. TTB-146, [82 FR 1131](https://www.federalregister.gov/citation/82-FR-1131), Jan. 4, 2017]
#### § 26.70a Notice of approval of bonds.
Upon approval of an original, a strengthening, or a superseding bond, the appropriate TTB officer shall notify the Secretary, and the revenue agent at the premises, of the total penal sum of the bond or bonds, and in the case of a blanket bond, the amount of the penal sum allocated to the premises.
\[T.D. 6695, [28 FR 12932](https://www.federalregister.gov/citation/28-FR-12932), Dec. 5, 1963. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-251, [52 FR 19338](https://www.federalregister.gov/citation/52-FR-19338), May 22, 1987]
### Termination of Bonds
#### § 26.71 Termination of bonds.
Any bond given under the provisions of this subpart may be terminated as to future transactions—
(a) Pursuant to application of surety as provided in [§ 26.72](/current/title-27/section-26.72);
(b) On approval of a superseding bond;
(c) On notification by the principal to the appropriate TTB officer that he has discontinued transactions under the bond (including for the reason that the principal is exempt from bond requirements under [§§ 26.66(c)](/current/title-27/section-26.66#p-26.66\(c\)), [26.67(b)](/current/title-27/section-26.67#p-26.67\(b\)), or [26.68(b)](/current/title-27/section-26.68#p-26.68\(b\))); or
(d) On notification by the principal to the appropriate TTB officer that he has discontinued business.
\[T.D. 6695, [28 FR 12932](https://www.federalregister.gov/citation/28-FR-12932), Dec. 5, 1963. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-251, [52 FR 19338](https://www.federalregister.gov/citation/52-FR-19338), May 22, 1987. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001; T.D. TTB-146, [82 FR 1131](https://www.federalregister.gov/citation/82-FR-1131), Jan. 4, 2017]
#### § 26.72 Application of surety for relief from bond.
A surety on any bond given under the provisions of this subpart may at any time in writing notify the principal and the appropriate TTB officer that he desires, after a date named, to be relieved of liability under said bond. Such date shall be not less than 10 days after the date the notice is received by the appropriate TTB officer. The surety shall also file with the appropriate TTB officer an acknowledgment or other proof of service on the principal. If such notice is not thereafter in writing withdrawn, the rights of the principal as supported by said bond shall be terminated on the date named in the notice, and the surety shall be relieved from liability to the extent set forth in [§ 26.73](/current/title-27/section-26.73).
(Approved by the Office of Management and Budget under control number 1512-0352)
\[T.D. 6551, [26 FR 1490](https://www.federalregister.gov/citation/26-FR-1490), Feb. 22, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-172, [49 FR 14943](https://www.federalregister.gov/citation/49-FR-14943), Apr. 16, 1984; T.D. ATF-251, [52 FR 19338](https://www.federalregister.gov/citation/52-FR-19338), May 22, 1987. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001]
#### § 26.73 Relief of surety from bond.
Where the surety on a bond given under the provisions of this subpart has filed application for relief from liability, as provided in [§ 26.72](/current/title-27/section-26.72), the surety shall be relieved from liability for transactions occurring wholly subsequent to the date specified in the notice, or the effective date of a new bond, if one is given.
\[T.D. 6551, [26 FR 1490](https://www.federalregister.gov/citation/26-FR-1490), Feb. 22, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975 and further redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001]
#### § 26.74 Release of pledged securities or cash (including cash equivalents).
Securities of the United States pledged and deposited as provided in [§ 26.63(a)](/current/title-27/section-26.63#p-26.63\(a\)), will be released only in accordance with the provisions of [31 CFR part 225](/current/title-31/part-225). Securities and cash (including cash equivalents) will not be released by the appropriate TTB officer until the liability under the bond for which they were pledged has been terminated. When the appropriate TTB officer is satisfied that they may be released, the appropriate TTB officer will fix the date or dates on which a part or all of such securities and cash (including cash equivalents) may be released. At any time prior to the release, the appropriate TTB officer may extend the date of release for such additional length of time as the appropriate TTB officer deems necessary.
(61 Stat. 650; [6 U.S.C. 15](https://www.govinfo.gov/link/uscode/6/15))
\[T.D. TTB-146, [82 FR 1131](https://www.federalregister.gov/citation/82-FR-1131), Jan. 4, 2017]
#### § 26.75 TTB Form 5000.23 PR, Notice of Termination of Bond.
When the appropriate TTB officer is satisfied that any bond given under the provisions of this subpart may be terminated, he shall issue TTB Form 5000.23 PR, Notice of Termination of Bond, and shall forward copies to the principal and to the surety. The appropriate TTB officer shall, prior to the termination date, notify the Secretary and the revenue agent of the proposed termination of any bond given under this part and the date of such termination.
\[T.D. 6695, [28 FR 12932](https://www.federalregister.gov/citation/28-FR-12932), Dec. 5, 1963, as amended by T.D. ATF-2, [37 FR 22736](https://www.federalregister.gov/citation/37-FR-22736), Oct. 21, 1972. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-251, [52 FR 19338](https://www.federalregister.gov/citation/52-FR-19338), May 22, 1987; T.D. TTB-146, [82 FR 1132](https://www.federalregister.gov/citation/82-FR-1132), Jan. 4, 2017]
### Permits Required
#### § 26.76 Insular permits.
Before liquors or articles of Puerto Rican manufacture may be shipped to the United States, an insular permit, TTB Form 5110.51 (for distilled spirits) or TTB Form 5100.21 (for wine or beer), to compute the taxes imposed by [26 U.S.C. 7652(a)](https://www.govinfo.gov/link/uscode/26/7652), and to withdraw the products from the bonded establishment where they may be deposited, must be obtained from the Secretary, and such products may not be shipped to the United States until a permit to ship, on TTB Form 5170.7, is applied for and obtained from the Secretary.
\[T.D. 6551, [26 FR 1490](https://www.federalregister.gov/citation/26-FR-1490), Feb. 22, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### Editorial Note:
For Federal Register citations affecting [§ 26.76](/current/title-27/section-26.76), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
### Distilled Spirits
#### § 26.77 Subject to tax.
(a) Distilled spirits of Puerto Rican manufacture, and any products containing such distilled spirits, brought into the United States and withdrawn for consumption or sale are subject to a tax equal to the tax imposed in the United States by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001).
(b) A credit against the tax imposed on distilled spirits by [26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652) is allowable under [26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010) on each proof gallon of alcohol derived from eligible wine or from eligible flavors which do not exceed 21⁄2 percent of the finished product on a proof gallon basis. The credit is allowable at the time the tax is payable as if it constituted a reduction in the rate of tax.
(c) Where credit against the tax is desired, the person liable for the tax shall establish an effective tax rate in accordance with [§ 26.79a](/current/title-27/section-26.79a). The effective tax rate established will be applied to each withdrawal or other disposition of the distilled spirits for consumption or sale within the United States.
(Approved by the Office of Management and Budget under control number 1512-0203)
(Act of Aug. 16, 1954, Pub. L. 591, 68A Stat. 907, as amended ([26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652)); Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended ([26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001)); Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended ([26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010)))
\[T.D. ATF-297, [55 FR 18066](https://www.federalregister.gov/citation/55-FR-18066), Apr. 30, 1990. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001]
#### § 26.78 Application and permit, TTB Form 5110.51.
Application for permit to compute the tax on, and to withdraw, distilled spirits shall be made on TTB Form 5110.51, in quintuplicate, by the proprietor. The proprietor shall forward all copies of the form to the Secretary. If the application is properly prepared and is otherwise in order, the Secretary or their delegate shall execute the permit, retain one copy, and forward the original and remaining copies of the form to the revenue agent at the premises where the products are located.
\[T.D. ATF-62, [44 FR 71711](https://www.federalregister.gov/citation/44-FR-71711), Dec. 11, 1979, as amended by T.D. ATF-251, [52 FR 19338](https://www.federalregister.gov/citation/52-FR-19338), May 22, 1987; T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 26.79 Inspection or gauge and computation of tax.
On receipt of permit to compute the tax on TTB Form 5110.51, the revenue agent shall:
(a) In the case of spirits in packages, prepare a gauge record as provided in [§ 26.164a](/current/title-27/section-26.164a) in quadruplicate, compute the tax thereon, and attach all copies of the gauge record to TTB Form 5110.51;
(b) In the instance of spirits in cases, verify by inspection the quantity of spirits described on the form; or
(c) In the case of spirits in a bulk conveyance, verify by gauge or inspection the quantity of spirits described on the form.
If the revenue agent determines any variation between his gauge and the quantity of spirits described on Form 5110.51, he shall amend and initial the data in part I of the form. The revenue agent shall deliver all copies of Form 5110.51 and any accompanying package gauge record to the proprietor. The proprietor shall then compute and enter the amount of tax on all copies of Form 5110.51.
(Approved by the Office of Management and Budget under control number 1512-0250)
\[T.D. ATF-198, [50 FR 8549](https://www.federalregister.gov/citation/50-FR-8549), Mar. 1, 1985. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001]
#### § 26.79a Computation of effective tax rate.
(a) The proprietor shall compute the effective tax rate for distilled spirits containing eligible wine or eligible flavors as the ratio of the numerator and denominator as follows:
(1) the numerator will be the sum of:
(i) The proof gallons of all distilled spirits used in the product (exclusive of distilled spirits derived from eligible flavors), multiplied by the tax rate prescribed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001);
(ii) The wine gallons of each eligible wine used in the product, multiplied by the tax rate prescribed by [26 U.S.C. 5041(b)](https://www.govinfo.gov/link/uscode/26/5041) (1), (2), or (3), as applicable; and
(iii) The proof gallons of all distilled spirits derived from eligible flavors used in the product, multiplied by the tax rate prescribed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), but only to the extent that such distilled spirits exceed 21⁄2% of the denominator prescribed in [paragraph (a)(2)](/current/title-27/section-26.79a#p-26.79a\(a\)\(2\)) of this section.
(2) The denominator will be the sum of:
(i) The proof gallons of all distilled spirits used in the product, including distilled spirits derived from eligible flavors; and
(ii) The wine gallons of each eligible wine used in the product, multiplied by twice the percentage of alcohol by volume of each, divided by 100.
(b) In determining the effective tax rate, quantities of distilled spirits, eligible wine, and eligible flavors will be expressed to the nearest tenth of a proof gallon. The effective tax rate may be rounded to as many decimal places as the proprietor deems appropriate, provided that, such rate is expressed no less exactly than the rate rounded to the nearest whole cent, and the effective tax rates for all products will be consistently expressed to the same number of decimal places. In such case, if the number is less than five it will be dropped; if it is five or over, a unit will be added.
(c) The following is an example of the use of the formula.
Batch Record
\| Distilled spirits | 2249.1 proof gallons. |
\| Eligible wine (14% alcohol by volume) | 2265.0 wine gallons |
\| Eligible wine (19% alcohol by volume) | 1020.0 wine gallons |
\| Eligible flavors | 100.9 proof gallons |
[](https://img.federalregister.gov/EC05OC91.041/EC05OC91.041_original_size.png)
(Approved by the Office of Management and Budget under control number 1512-0203)
(Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended ([26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010)))
\[T.D. ATF-297, [55 FR 18066](https://www.federalregister.gov/citation/55-FR-18066), Apr. 30, 1990, as amended by T.D. ATF-307, [55 FR 52741](https://www.federalregister.gov/citation/55-FR-52741), Dec. 21, 1990]
###### Footnotes - [26.79a](/current/title-27/section-26.79a)
\[[1](#26.79a-footref-1)] Proof gallons by which distilled spirits derived from eligible flavors exceed 21⁄2% of the total proof gallons in the batch (100.9 − (21⁄2%) × 3.371.8 = 16.6).
#### § 26.80 Deferred payment of tax—release of spirits.
(a) *Action by proprietor.* Where the proprietor wishes to defer payment of tax, he must execute an agreement on TTB Form 5110.51 to pay the amount of tax which has been computed and entered on the form. If a bond is required under [§ 26.66](/current/title-27/section-26.66), he must certify, under the penalties of perjury, that he is not in default of any payment of tax chargeable against his bond, and that his bond is in the maximum penal sum, or that it is sufficient to cover the amount of tax on the distilled spirits described on the form in addition to all other amounts chargeable against this bond. If the proprietor deferring payment of tax is not required to provide a bond under [§ 26.66](/current/title-27/section-26.66), the proprietor must certify under the penalties of perjury that the proprietor was liable for not more than $50,000 in taxes in the preceding calendar year, reasonably expects to be liable for not more than $50,000 during the current calendar year, and is not using the TTB Form 5100.21 for any shipment of distilled spirits for industrial use. The proprietor must deliver all copies of TTB Form 5110.51 and any package gauge record as provided in [§ 26.164a](/current/title-27/section-26.164a) to the revenue agent.
(b) *Action by revenue agent.* On receipt of TTB Form 5110.51 and any package gauge record, the revenue agent shall verify the computation of the tax entered on the TTB Form 5110.51, and if the proprietor has on file a good and sufficient bond, TTB Form 5110.50, so indicate on TTB Form 5110.51. The revenue agent shall then execute his report of release on the TTB Form 5110.51 and release the spirits for shipment to the United States. He shall distribute TTB Form 5110.51 and any package gauge record according to the instructions of TTB Form 5110.51. Where the revenue agent finds that the proprietor does not have good and sufficient bond coverage, or where the revenue agent has received information that the proprietor is in default of payment of any taxes previously charged to his bond, he shall return all copies of TTB Form 5110.51 and any package gauge record to the proprietor, giving his reasons for such action.
(Approved by the Office of Management and Budget under control number 1513-0056)
\[T.D. ATF-198, [50 FR 8549](https://www.federalregister.gov/citation/50-FR-8549), Mar. 1, 1985. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001; T.D. TTB-146, [82 FR 1132](https://www.federalregister.gov/citation/82-FR-1132), Jan. 4, 2017]
#### § 26.81 Prepayment of tax and release of spirits.
(a) *Action by proprietor.* Where the distilled spirits are to be released after payment of the computed tax, the proprietor shall enter the amount of such computed tax on all copies of TTB Form 5110.51 and execute the statement that such tax is being prepaid. The proprietor shall then prepare TTB Form 5000.25 in duplicate, and send the original with all copies of TTB Form 5110.51 and any package gauge record as provided in [§ 26.164a](/current/title-27/section-26.164a) and the remittance in full for the tax, to the appropriate TTB officer.
(b) *Action by appropriate TTB officer.* On receipt of TTB Forms 5110.51, 5000.25 and any package gauge record, with remittance covering prepayment of tax, the appropriate TTB officer shall execute the receipt on TTB Form 5000.25 and execute the report of prepaid taxes on all copies of TTB Form 5110.51. The appropriate TTB officer shall then retain the originals of TTB Forms 5110.51 and 5000.25 and forward the remaining copies of TTB Form 5110.51 in accordance to the instructions on the form.
(c) *Action by revenue agent.* On receipt of TTB Form 5110.51 executed by the appropriate TTB officer to show receipt of TTB Form 5000.25 and remittance, the revenue agent shall execute the report of release on the TTB Form 5110.51 and release the spirits for shipment to the United States. The completed TTB Form 5110.51 shall be distributed according to the instructions on the form.
(Approved by the Office of Management and Budget under control number 1512-0210 and 1512-0497)
\[T.D. ATF-277, [53 FR 45267](https://www.federalregister.gov/citation/53-FR-45267), Nov. 9, 1988. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001]
#### § 26.82 Permit to ship.
Distilled spirits may not be shipped to the United States until permit for such shipment has been obtained from the Secretary as provided in [§§ 26.114](/current/title-27/section-26.114) through [26.116](/current/title-27/section-26.116).
\[T.D. 6695, [28 FR 12932](https://www.federalregister.gov/citation/28-FR-12932), Dec. 5, 1963. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71711](https://www.federalregister.gov/citation/44-FR-71711), Dec. 11, 1979. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001]
### Packages of Distilled Spirits
#### § 26.86 Authority for shipment.
Where distilled spirits of Puerto Rican manufacture are to be shipped to the United States in containers having a capacity of more than one gallon, the laws and regulations of the Commonwealth of Puerto Rico require that prior approval for such shipment be obtained from the Secretary.
\[T.D. 6695, [28 FR 12933](https://www.federalregister.gov/citation/28-FR-12933), Dec. 5, 1963. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### § 26.87 Evidence of taxpayment.
Where, under the provisions of [§ 26.86](/current/title-27/section-26.86), a person has made application to the Secretary for authority to ship distilled spirits of Puerto Rican manufacture to the United States in containers having a capacity of more than one gallon, they shall, at the same time, submit sworn evidence to the Secretary that the distilled spirits tax has been paid as provided in [§ 26.81](/current/title-27/section-26.81) or deferred as provided in [§ 26.80](/current/title-27/section-26.80), or they shall submit application, TTB Form 5110.51, for permit to pay such taxes, as provided in [§ 26.78](/current/title-27/section-26.78). When satisfied that the shipper has complied with all provisions of this part relating to the payment of taxes on such distilled spirits, the Secretary or their delegate, shall note his approval on both copies of the sworn application, and return one copy to the shipper. On receipt of the approved application, the shipper shall submit application for permit to ship, TTB Form 5170.7, as prescribed in [§§ 26.114](/current/title-27/section-26.114) through [26.116](/current/title-27/section-26.116).
\[T.D. 6695, [28 FR 12933](https://www.federalregister.gov/citation/28-FR-12933), Dec. 5, 1963. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71711](https://www.federalregister.gov/citation/44-FR-71711), Dec. 11, 1979. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001; T.D. TTB-146, [82 FR 1132](https://www.federalregister.gov/citation/82-FR-1132), Jan. 4, 2017; T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
### Wine
#### § 26.92 Subject to tax.
(a) Wine of Puerto Rican manufacture coming into the United States and withdrawn for consumption or sale is subject to a tax equal to the internal revenue tax imposed in the United States on wine by [26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041).
(b) The excise taxes collected on wine of Puerto Rican manufacture shall be deposited in the Treasury of Puerto Rico only if the sum of the cost or value of the materials produced in Puerto Rico, plus the direct costs of processing operations performed in Puerto Rico, equals or exceeds 50 percent of the value of the wine when it is brought into the United States.
(Aug. 16, 1954, Chapter 736, 68A Stat. 907, as amended ([26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652)))
\[T.D. ATF-206, [50 FR 15888](https://www.federalregister.gov/citation/50-FR-15888), Apr. 23, 1985]
#### § 26.93 Application and permit, TTB Form 5100.21.
When wine of Puerto Rican manufacture is to be withdrawn for shipment to the United States, or for use in an article made with wine only or with wine and beer only, for shipment to the United States, application for permit to compute the tax on, and to withdraw, the wine shall be made on TTB Form 5100.21, in quintuplicate, by the proprietor of the bonded premises where the wine is stored. If the withdrawal is to be made in casks, barrels, kegs or similar containers, the proprietor shall enter the name of the winemaker producing the wine, the serial numbers of the packages, the total number of wine gallons contained therein, and the taxable grade of the wine, for example, “not more than 14 percent” if the wine contains not more than 14 percent of alcohol by volume, “14-21 percent” if the wine contains more than 14 percent and not exceeding 21 percent of alcohol by volume, “21-24 percent” if the wine contains more than 21 percent but not exceeding 24 percent of alcohol by volume. If the application covers more than one taxable grade of wine, the quantity in each taxable grade shall be reported separately. If the withdrawal is to consist of bottled wine, the proprietor shall show the number of cases, size of the bottles, the number of bottles per case, the total quantity in wine gallons, and the taxable grade of the wine in the manner stated above. The proprietor shall forward all copies of the form to the Secretary. If the application is properly prepared and is otherwise in order, the Secretary or their delegate shall execute the permit, retain one copy, and return the original and three copies to the proprietor.
\[T.D. ATF-62, [44 FR 71712](https://www.federalregister.gov/citation/44-FR-71712), Dec. 11, 1979, as amended by T.D. ATF-251, [52 FR 19338](https://www.federalregister.gov/citation/52-FR-19338), May 22, 1987; T.D. TTB-146, [82 FR 1132](https://www.federalregister.gov/citation/82-FR-1132), Jan. 4, 2017; T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 26.94 Computation of tax.
On receipt of permit to compute the tax on Form 2900, the proprietor shall compute and enter the amount of the tax on all copies of the form.
\[T.D. 6695, [28 FR 12934](https://www.federalregister.gov/citation/28-FR-12934), Dec. 5, 1963. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### § 26.95 Deferred payment of tax—release of wine.
(a) *Action by proprietor.* Where the proprietor wishes to defer payment of tax, he must execute the agreement on TTB Form 5100.21 to pay the amount of tax which has been computed and entered on the form. If a bond is required under [§ 26.67](/current/title-27/section-26.67), he must certify under the penalties of perjury that he is not in default of any payment of tax chargeable against his bond, and that his bond is in the maximum penal sum, or that it is sufficient to cover the amount of tax on the wine described on the form in addition to all other amounts chargeable against his bond. If the proprietor deferring payment of tax is not required to provide a bond under [§ 26.67](/current/title-27/section-26.67), the proprietor must certify under the penalties of perjury that the proprietor was liable for not more than $50,000 in taxes in the preceding calendar year, reasonably expects to be liable for not more than $50,000 during the current calendar year, and is not using the TTB Form 5100.21 for any shipment of wine for industrial use. The proprietor must deliver all copies of TTB Form 5100.21 to the revenue agent.
(b) *Action by revenue agent.* On receipt of TTB Form 5100.21, the revenue agent shall verify the computation of the tax entered on the form, and if the proprietor has on file a good and sufficient bond, TTB Form 5120.32, so indicate on TTB Form 5100.21. The revenue agent shall then execute his report of release on the TTB Form 5100.21 and release the wine for the purpose authorized on the form. The completed form shall be distributed in the same manner as provided for TTB Form 5110.51 in [§ 26.80(b)](/current/title-27/section-26.80#p-26.80\(b\)). Where the revenue agent finds that the proprietor does not have good and sufficient bond coverage, or that the proprietor is in default of payment of any taxes previously charged to his bond, he shall return all copies of TTB Form 5100.21 to the proprietor, giving his reasons for such action.
\[T.D. 6695, [28 FR 12934](https://www.federalregister.gov/citation/28-FR-12934), Dec. 5, 1963. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71712](https://www.federalregister.gov/citation/44-FR-71712), Dec. 11, 1979. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001; T.D. TTB-146, [82 FR 1132](https://www.federalregister.gov/citation/82-FR-1132), Jan. 4, 2017]
#### § 26.96 Prepayment of tax—release of wine.
(a) *Action by proprietor.* Where the wine is to be withdrawn from bonded storage after payment of the computed tax, the proprietor shall enter the amount of such computed tax on all copies of TTB Form 2900 (5100.21) and execute the statement that such tax is being prepaid. The proprietor shall then prepare TTB Form 5000.25 in duplicate and send the original with all copies of TTB Form 2900 (5100.21) and the remittance in full for the tax, to the appropriate TTB officer.
(b) *Action by appropriate TTB officer.* On receipt of TTB Forms 2900 (5100.21) and 5000.25, and remittance covering prepayment of tax, the appropriate TTB officer shall execute the receipt on TTB Form 5000.25 and execute the report of prepaid taxes on all copies of TTB Form 2900 (5100.21). The appropriate TTB officer shall then retain the originals of TTB Forms 2900 (5100.21) and 5000.25 and forward the remaining copies of TTB Form 2900 (5100.21) in accordance with the instructions on the form.
(c) *Action by revenue agent.* On receipt of TTB Form 2900 (5100.21) executed by the appropriate TTB officer to show receipt of TTB Form 5000.25 and remittance, the revenue agent shall execute the report of release on the TTB Form 2900 (5100.21) and release the wine for the purpose authorized on the form. The completed TTB Form 2900 (5100.21) shall be distributed according to the instructions on the form.
(Approved by the Office of Management and Budget under control number 1512-0149 and 1512-0497)
\[T.D. ATF-277, [53 FR 45267](https://www.federalregister.gov/citation/53-FR-45267), Nov. 9, 1988]
#### § 26.96a \[Reserved]
#### § 26.96b Permit to ship.
Wine released from bonded storage under [§ 26.95](/current/title-27/section-26.95) or [§ 26.96](/current/title-27/section-26.96) may not be shipped to the United States until permit for such shipment has been obtained from the Secretary as provided in [§§ 26.114](/current/title-27/section-26.114) through [26.116](/current/title-27/section-26.116).
\[T.D. 6695, [28 FR 12934](https://www.federalregister.gov/citation/28-FR-12934), Dec. 5, 1963. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and further redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001]
#### § 26.97 Marking containers of wine.
Containers of wine of Puerto Rican manufacture which are to be shipped to the United States must be marked with the name of the winemaker, the serial number of the container, the kind and taxable grade of the wine, the gallon content, and the serial number of the withdrawal permit, TTB Form 5170.7, prefixed by the number of such form, e.g., “ 5170.7-17-1.”
\[[20 FR 6077](https://www.federalregister.gov/citation/20-FR-6077), Aug. 20, 1955, as amended by T.D. TTB-146, [82 FR 1132](https://www.federalregister.gov/citation/82-FR-1132), Jan. 4, 2017]
### Beer
#### § 26.101 Subject to tax.
(a) Beer of Puerto Rican manufacture coming into the United States and withdrawn for consumption or sale is subject to a tax equal to the internal revenue tax imposed on beer in the United States by [26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051).
(b) The excise taxes collected on beer of Puerto Rican manufacture shall be deposited in the Treasury of Puerto Rico only if the sum of the cost or value of the materials produced in Puerto Rico, plus the direct costs of processing operations performed in Puerto Rico, equals or exceeds 50 percent of the value of the beer when it is brought into the United States.
(Aug. 16, 1954, Chapter 736, 68A Stat. 907, as amended ([26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652)))
\[T.D. ATF-206, [50 FR 15888](https://www.federalregister.gov/citation/50-FR-15888), Apr. 23, 1985]
#### § 26.102 Application and permit, TTB Form 5100.21.
When beer of Puerto Rican manufacture is to be withdrawn for shipment to the United States, or for use in making an article for shipment to the United States, application for permit to compute the tax on, and to withdraw, the beer shall be made by the brewer on TTB Form 5100.21, in quintuplicate. If the withdrawal is to be made in hogsheads, barrels, or kegs, the brewer shall enter the total number of each size, according to capacity, of containers which it is desired to withdraw. If the withdrawal is to be made in bottles, the brewer shall enter the number of cases, size of bottles, number of bottles per case, the total contents thereof in gallons (liquid measure), and the equivalent thereof in barrels and fractions of barrels of 31 gallons each. The brewer shall forward all copies of the TTB Form 5100.21 to the Secretary. If the application is properly prepared and is otherwise in order, the Secretary or their delegate shall execute the permit, retain one copy, and return the original and three copies to the brewer.
\[T.D. 6695, [28 FR 12934](https://www.federalregister.gov/citation/28-FR-12934), Dec. 5, 1963. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-251, [52 FR 19338](https://www.federalregister.gov/citation/52-FR-19338), May 22, 1987; T.D. TTB-146, [82 FR 1132](https://www.federalregister.gov/citation/82-FR-1132), Jan. 4, 2017; T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 26.103 Computation of tax.
On receipt of permit to compute the tax on TTB Form 5100.21 the brewer shall compute and enter the amount of the tax on all copies of the form.
\[T.D. 6695, [28 FR 12934](https://www.federalregister.gov/citation/28-FR-12934), Dec. 5, 1963. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975; T.D. TTB-146, [82 FR 1132](https://www.federalregister.gov/citation/82-FR-1132), Jan. 4, 2017]
#### § 26.104 Deferred payment of tax—release of beer.
(a) *Action by brewer.* Where the brewer will defer payment of tax, he must execute the agreement on TTB Form 5100.21 to pay the amount of tax which has been computed and entered on the form. If a bond is required under [§ 26.68](/current/title-27/section-26.68), he must certify under the penalties of perjury that he is not in default of any payment of tax chargeable against his bond, and that his bond is in the maximum penal sum, or that it is sufficient to cover the amount of tax on the beer described on the form in addition to all other amounts chargeable against his bond. If the brewer deferring payment of tax is not required to provide a bond under [§ 26.68](/current/title-27/section-26.68), the brewer must certify under the penalties of perjury that the brewer was liable for not more than $50,000 in taxes in the preceding calendar year and reasonably expects to be liable for not more than $50,000 during the current calendar year. The brewer must deliver all copies of Form 5100.21 to the revenue agent.
(b) *Action by revenue agent.* On receipt of TTB Form 5100.21, the revenue agent shall verify the computation of the tax entered on the form, and if the proprietor has on file a good and sufficient bond, TTB Form 5130.16, so indicate on TTB Form 5100.21. The revenue agent shall then execute his report of release on the TTB Form 5100.21 and release the beer for the purpose authorized on the form. The completed form shall be distributed in the same manner as provided for TTB Form 5110.51 in [§ 26.80(b)](/current/title-27/section-26.80#p-26.80\(b\)). Where the revenue agent finds that the proprietor does not have good and sufficient bond coverage, or that the proprietor is in default of payment of any taxes previously charged to his bond, he shall return all copies of TTB Form 5100.21 to the proprietor, giving his reasons for such action.
\[T.D. 6695, [28 FR 12934](https://www.federalregister.gov/citation/28-FR-12934), Dec. 5, 1963. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71712](https://www.federalregister.gov/citation/44-FR-71712), Dec. 11, 1979. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001; T.D. TTB-146, [82 FR 1132](https://www.federalregister.gov/citation/82-FR-1132), Jan. 4, 2017]
#### § 26.105 Prepayment of tax—release of beer.
(a) *Action by brewer.* Where the beer is to be withdrawn from bonded storage after payment of the computed tax the brewer shall enter the amount of such computed tax on all copies of TTB Form 2900 (5100.21) and execute the statement that such tax is being prepaid. The brewer shall then prepare TTB Form 5000.25 in duplicate and send the original with all copies of TTB Form 2900 (5100.21) and the remittance in full for the tax, to the appropriate TTB officer.
(b) *Action by appropriate TTB officer.* On receipt of TTB Forms 2900 (5100.21) and 5000.25, and remittance covering prepayment of tax, the appropriate TTB officer shall execute the receipt on TTB Form 5000.25 and execute the report of prepaid taxes on all copies of TTB Form 2900 (5100.21). The appropriate TTB officer shall then retain the originals of TTB Forms 2900 (5110.21) and 5000.25 and forward the remaining copies of TTB Form 2900 (5100.21) in accordance with the instructions of the form.
(c) *Action by revenue agent.* On receipt of TTB Form 2900 (5100.21) executed by the appropriate TTB officer to show receipt of TTB Form 5000.25 and remittance, the revenue agent shall execute the report of release on the TTB Form 2900 (5100.21) and release the beer for the purpose authorized on the form. The completed TTB Form 2900 (5100.21) shall be distributed according to the instructions on the form.
(Approved by the Office of Management and Budget under control number 1512-0149 and 1512-0497)
\[T.D. ATF-277, [53 FR 45268](https://www.federalregister.gov/citation/53-FR-45268), Nov. 9, 1988]
#### § 26.105a Permit to ship.
Beer released from bonded storage under [§ 26.104](/current/title-27/section-26.104) or [§ 26.105](/current/title-27/section-26.105) may not be shipped to the United States until permit for such shipment has been obtained from the Secretary as provided in [§§ 26.114](/current/title-27/section-26.114) through [26.116](/current/title-27/section-26.116).
\[T.D. 6695, [28 FR 12935](https://www.federalregister.gov/citation/28-FR-12935), Dec. 5, 1963. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and further redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001]
#### § 26.106 Marking containers of beer.
Containers of beer of Puerto Rican manufacture which are to be shipped to the United States must be marked with the name of the brewer; the serial number, capacity, and size of the container; the kind of beer; and the serial number of the withdrawal permit, TTB Form 5170.7, prefixed by the number of such form, e.g., “ 5170.7-17-1.”
\[[20 FR 6077](https://www.federalregister.gov/citation/20-FR-6077), Aug. 20, 1955, as amended by T.D. TTB-146, [82 FR 1132](https://www.federalregister.gov/citation/82-FR-1132), Jan. 4, 2017]
### Articles
#### § 26.107 Taxable status.
Articles of Puerto Rican manufacture which are to be shipped to the United States and which are not exempt fom tax under the provisions of [§ 26.36](/current/title-27/section-26.36) are subject, under section 7652(a) to a tax equal to the tax imposed by the internal revenue laws of the United States. If such articles contain distilled spirits, the tax will be collected at the rate prescribed by [26 U.S.C. 5001(a)(1)](https://www.govinfo.gov/link/uscode/26/5001) on all alcohol contained therein, regardless of the source. Such articles containing only wine and/or beer will be taxed at the rates prescribed by [26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041) and/or 5051, respectively. A formula covering the manufacture of each article shall be filed by the manufacturer in accordance with [subpart D of this part](/current/title-27/part-26/subpart-D).
\[T.D. ATF-62, [44 FR 71712](https://www.federalregister.gov/citation/44-FR-71712), Dec. 11, 1979. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), July 25, 2001]
#### § 26.108 Application for permit, TTB Form 5110.51 and/or 5100.21.
(a) *Distilled spirits.* Where distilled spirits of Puerto Rican manufacture are to be used in the manufacture of the articles to be shipped to the United States, the manufacturer shall make application on Form 5110.51, in accordance with the applicable provisions of [§ 26.78](/current/title-27/section-26.78).
(b) *Wine and/or beer.* Where wine and/or beer of Puerto Rican manufacture is to be used in the manufacture of the articles to be shipped to the United States, the manufacturer shall make application on TTB Form 5100.21, in accordance with the applicable provisions of [§§ 26.93](/current/title-27/section-26.93) and/or 26.102. Wine and beer may be included in the same application.
(c) *Approval of applications.* The Secretary, or their delegate, shall approve and dispose of the applications in the manner prescribed in [§§ 26.78](/current/title-27/section-26.78), [26.93](/current/title-27/section-26.93), and/or [§ 26.102](/current/title-27/section-26.102), as the case may be.
\[T.D. 6551, [26 FR 1490](https://www.federalregister.gov/citation/26-FR-1490), Feb. 22, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71712](https://www.federalregister.gov/citation/44-FR-71712), Dec. 11, 1979. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001; T.D. TTB-146, [82 FR 1133](https://www.federalregister.gov/citation/82-FR-1133), Jan. 4, 2017; T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 26.109 Taxpayment.
(a) *Distilled spirits.* The tax on distilled spirits contained in articles to be shipped to the United States, equal to the tax imposed in the United States by [26 U.S.C. 5001(a)(1)](https://www.govinfo.gov/link/uscode/26/5001), shall be computed in accordance with [§ 26.79](/current/title-27/section-26.79) and paid in accordance with the applicable provisions of [§§ 26.80](/current/title-27/section-26.80), [26.81](/current/title-27/section-26.81), and [26.111](/current/title-27/section-26.111) through [26.113](/current/title-27/section-26.113).
(b) *Wine.* The tax on wine used in the manufacture of articles to be shipped to the United States, equal to the tax imposed in the United States by [26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041), shall be computed in accordance with [§ 26.94](/current/title-27/section-26.94) and paid in accordance with the applicable provisions of [§§ 26.95](/current/title-27/section-26.95), [26.96](/current/title-27/section-26.96), and [26.111](/current/title-27/section-26.111) through [26.113](/current/title-27/section-26.113).
(c) *Beer.* The tax on beer used in the manufacture of articles to be shipped to the United States, equal to the tax imposed in the United States by [26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051), shall be computed in accordance with [§ 26.103](/current/title-27/section-26.103) and paid in accordance with the applicable provisions of [§§ 26.104](/current/title-27/section-26.104), [26.105](/current/title-27/section-26.105), and [26.111](/current/title-27/section-26.111) through [26.113](/current/title-27/section-26.113).
\[T.D. ATF-62, [44 FR 71712](https://www.federalregister.gov/citation/44-FR-71712), Dec. 11, 1979. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001]
#### § 26.110 Release of articles or liquors.
After determining that the proprietor has good and sufficient bond coverage, or, in the case of prepayment, on receipt of TTB Form 5110.51 or TTB Form 5100.21 executed by the appropriate TTB officer to show receipt of TTB Form 5000.25, and remittance, the revenue agent shall execute his report of release on TTB Form 5110.51 or TTB Form 5100.21 and release the articles containing distilled spirits, or release the wine and/or beer for use in the manufacture of articles. He shall forward one copy of TTB Form 5110.51 or TTB Form 5100.21, and any package gauge record as provided in [§ 26.164a](/current/title-27/section-26.164a), to the Bureau of Alcoholic Beverage Taxes and one copy of each to the District Revenue Agent (Commonwealth of Puerto Rico), deliver one copy of each to the applicant, and retain one copy. A permit shall be obtained as provided in [§§ 26.114](/current/title-27/section-26.114) through [26.116](/current/title-27/section-26.116) before the articles manufactured from such liquors may be shipped to the United States.
(Approved by the Office of Management and Budget under control number 1512-0497)
\[T.D. ATF-198, [50 FR 8550](https://www.federalregister.gov/citation/50-FR-8550), Mar. 1, 1985, as amended by T.D. ATF-251, [52 FR 19338](https://www.federalregister.gov/citation/52-FR-19338), May 22, 1987; T.D. ATF-277, [53 FR 45268](https://www.federalregister.gov/citation/53-FR-45268), Nov. 9, 1988. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001; T.D. TTB-146, [82 FR 1133](https://www.federalregister.gov/citation/82-FR-1133), Jan. 4, 2017]
### Payment of Tax by Return
#### § 26.111 General.
All taxes imposed by [26 U.S.C. 7652(a)](https://www.govinfo.gov/link/uscode/26/7652), and which, under the provisions of this part, are paid in Puerto Rico, shall be paid and collected on the basis of a tax return as provided in this subpart. Any tax which has been paid in accordance with the provisions of this part in effect at the time of such payment, and before provision was made in the part for payment of such tax by return, shall be deemed to have been prepaid as prescribed in this part.
\[T.D. 6551, [26 FR 1490](https://www.federalregister.gov/citation/26-FR-1490), Feb. 22, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55852](https://www.federalregister.gov/citation/44-FR-55852), Sept. 28, 1979; T.D. ATF-277, [53 FR 45268](https://www.federalregister.gov/citation/53-FR-45268), Nov. 9, 1988]
#### § 26.112 Returns for deferred payment of tax.
(a) *Returns.* The taxes imposed by [26 U.S.C. 7652(a)](https://www.govinfo.gov/link/uscode/26/7652), (equal to the taxes imposed in the United States by [26 U.S.C. 5001(a)(1)](https://www.govinfo.gov/link/uscode/26/5001), [5041](https://www.govinfo.gov/link/uscode/26/5041), or [5051](https://www.govinfo.gov/link/uscode/26/5051)), the payment of which has been deferred under the provisions of [§§ 26.80](/current/title-27/part-26/section-26.80), [26.95](/current/title-27/part-26/section-26.95) or [26.104 of this part](/current/title-27/part-26/section-26.104), shall be paid pursuant to a return on TTB Form 5000.25 prepared in accordance with the instructions on the form.
(b) *Return periods* —
(1) *Semimonthly return period.* Except in the case of a taxpayer who qualifies for, and chooses to use, annual or quarterly return periods as provided in [paragraph (b)(2)](/current/title-27/section-26.112#p-26.112\(b\)\(2\)) or [(b)(3)](/current/title-27/section-26.112#p-26.112\(b\)\(3\)) of this section, all taxpayers must use semimonthly return periods for deferred payment of tax. The semimonthly return periods run from the 1st day through the 15th day of each month, and from the 16th day through the last day of each month, except as otherwise provided in [paragraph (d)](/current/title-27/section-26.112#p-26.112\(d\)) of this section.
(2) *Annual return period.* Subject to [paragraph (b)(4)](/current/title-27/section-26.112#p-26.112\(b\)\(4\)) of this section, a taxpayer may choose to use an annual return period if the taxpayer was not liable for more than $1,000 in taxes imposed by [26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652) in the preceding calendar year and if that taxpayer reasonably expects to be liable for not more than $1,000 in such taxes during the current calendar year. In such a case the last day for paying the tax and filing the return will be the 14th day after the last day of the calendar year. However, the taxpayer may not use the annual return period procedure for any portion of the calendar year following the first date on which the aggregate amount of tax due from the taxpayer during the calendar year exceeds \$1,000, and any tax that has not been paid on that date will be due on the 14th day after the last day of the quarterly or semimonthly period in which that date occurs.
(3) *Quarterly return period.* Except as provided in [paragraph (b)(2)](/current/title-27/section-26.112#p-26.112\(b\)\(2\)) of this section and subject to [paragraph (b)(4)](/current/title-27/section-26.112#p-26.112\(b\)\(4\)) of this section, a taxpayer may choose to use a quarterly return period if the taxpayer was not liable for more than $50,000 in taxes imposed by [26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652) in the preceding calendar year and if that taxpayer reasonably expects to be liable for not more than $50,000 in such taxes during the current calendar year. In such a case the last day for paying the tax and filing the return will be the 14th day after the last day of the calendar quarter. However, the taxpayer may not use the quarterly return period procedure for any portion of the calendar year following the first date on which the aggregate amount of tax due from the taxpayer during the calendar year exceeds \$50,000, and any tax that has not been paid on that date will be due on the 14th day after the last day of the semimonthly period in which that date occurs.
(4) The following additional rules apply to the annual and quarterly return period procedures under this section:
(i) A “taxpayer” is an individual, corporation, partnership, or other entity that is assigned a single Employer Identification Number as defined in [26 CFR 301.7701-12](/current/title-26/section-301.7701-12);
(ii) “Reasonably expects” means that there is no existing or anticipated circumstance known to the taxpayer (such as an increase in production capacity) that would cause the taxpayer's tax liability to exceed the prescribed limit;
(iii) A taxpayer with multiple locations must combine the tax liability for all locations with respect to distilled spirits, wine, or beer tax liability to determine eligibility for the return procedures;
(iv) A taxpayer who has both domestic operations and import transactions must combine the tax liability on the domestic operations and the imports with respect to distilled spirits, wine, or beer tax liability to determine eligibility for the return procedures;
(v) The controlled group rules of [26 U.S.C. 5061(e)](https://www.govinfo.gov/link/uscode/26/5061), which concern treatment of controlled groups as one taxpayer, do not apply for purposes of determining eligibility for the return procedures. However, a taxpayer who is eligible for the return procedures, and who is a member of a controlled group that owes \$5 million or more in distilled spirits, wine, or beer excise taxes per year, is required to pay taxes by electronic fund transfer (EFT). Quarterly payments via EFT must be transmitted in accordance with section 5061(e);
(vi) A new taxpayer is eligible to use the return procedures in the first year of business simply if the taxpayer reasonably expects to be liable for not more than $1,000 (in the case of the annual return procedure) or $50,000 (in the case of the quarterly return procedure) in distilled spirits, wine, or beer taxes during that calendar year; and
(vii) If a taxpayer becomes ineligible to use a return procedure described in [paragraph (b)(2)](/current/title-27/section-26.112#p-26.112\(b\)\(2\)) or [(3)](/current/title-27/section-26.112#p-26.112\(b\)\(3\)) of this section because the taxpayer's liability exceeds $1,000 or $50,000, respectively, during a taxable year, that taxpayer may resume that return procedure only after a full calendar year has passed during which the taxpayer's liability did not exceed $1,000 or $50,000 as the case may be. A taxpayer may not use an annual or quarterly return procedure during any calendar year in which the taxpayer reasonably expects to be liable for more than $1,000 (in the case of the annual return procedure) or $50,000 (in the case of the quarterly return procedure) in distilled spirits, wine, or beer taxes.
(c) *Filing.*
(1) The original of TTB Form 5000.25, with remittance covering the full amount of the tax, shall be filed with the appropriate TTB officer not later than the 14th day after the last day of the return period except as provided by [paragraph (d)](/current/title-27/section-26.112#p-26.112\(d\)) of this section. If the due date falls on a Saturday, Sunday, or legal holiday, the return and remittance are due on the immediately preceding day that is not a Saturday, Sunday, or legal holiday, except as otherwise provided in [paragraph (d)](/current/title-27/section-26.112#p-26.112\(d\)) of this section.
(2) The tax shall be paid in full by remittance at the time the return is filed, unless the proprietor is required to make remittances by electronic fund transfer in accordance with [§ 26.112a](/current/title-27/section-26.112a).
(3) The remittance may be in any form that is authorized to be accepted under the provisions of [§ 70.61 of this chapter](/current/title-27/section-70.61).
(4) When the return and remittance are delivered by U.S. mail to the office of the appropriate TTB officer, the date of the official postmark of the U.S. Postal Service stamped on the cover in which the return and remittance were mailed shall be treated as the date of delivery.
(d) *Special September rule for taxes due by semimonthly return.*
(1) *Division of second semimonthly period.*
(i) *General.* Except as otherwise provided in [paragraph (d)(1)(ii)](/current/title-27/section-26.112#p-26.112\(d\)\(1\)\(ii\)) of this section, the second semimonthly period for the month of September is divided into two payment periods, from the 16th day through the 26th day, and from the 27th day through the 30th day. The taxpayer shall file a return on TTB Form 5000.25, and make remittance, for the period September 16-26, no later than September 29. The taxpayer shall file a return on TTB Form 5000.25, and make remittance, for the period September 27-30, no later than October 14.
(ii) *Taxpayment not by electronic fund transfer.* In the case of taxes for which remittance by electronic fund transfer (EFT) is not required by [§ 26.112a](/current/title-27/section-26.112a), the second semimonthly period of September is divided into two payment periods, from the 16th day through the 25th day, and from the 26th day through the 30th day. The taxpayer shall file a return on TTB Form 5000.25, and make remittance, for the period September 16-25, no later than September 28. The taxpayer shall file a return on TTB Form 5000.25, and make remittance, for the period September 26-30, no later than October 14.
(2) *Amount of payment—Safe harbor rule.*
(i) *General.* Taxpayers are considered to have met the requirements of [paragraph (d)(1)(i)](/current/title-27/section-26.112#p-26.112\(d\)\(1\)\(i\)) of this section if the amount paid no later than September 29 is not less than 11/15ths (73.3 percent) of the tax liability incurred for the semimonthly period beginning on September 1 and ending on September 15, and if any underpayment of tax is paid by October 14.
(ii) *Taxpayment not by EFT.* Taxpayers are considered to have met the requirements of [paragraph (d)(1)(ii)](/current/title-27/section-26.112#p-26.112\(d\)\(1\)\(ii\)) of this section if the amount paid no later than September 28 is not less than 2/3rds (66.7 percent) of the tax liability incurred for the semimonthly period beginning on September 1 and ending on September 15, and if any underpayment of tax is paid by October 14.
(3) *Weekends and holidays.* If the required taxpayment due date for the period September 16-25 or September 16-26, as applicable, falls on a Saturday or legal holiday, the return and remittance are due on the immediately preceding day. If the required due date falls on a Sunday, the return and remittance are due on the immediately following day.
(e) *Default.* Where a taxpayer has defaulted in any payment of tax under this section, during the period of such default and until the appropriate TTB officer finds that the revenue will not be jeopardized by deferred payment of tax under this section, the tax shall be prepaid by such taxpayer in accordance with the provisions of [§ 26.113](/current/title-27/section-26.113). During such period, distilled spirits, wine, or beer shall not be released from the proprietor's premises before the proprietor has paid the tax thereon. In the event of default, the appropriate TTB officer shall immediately notify the Secretary and the revenue agent at the premises that tax is to be prepaid until further notice, and upon a finding that the revenue will not be jeopardized by resumption of deferred payment or tax under this section, the appropriate TTB officer shall notify the Secretary and the revenue agent that deferred payment may be resumed.
(Approved by the Office of Management and Budget under control number 1512-0497)
(Aug. 16, 1954, Ch. 736, 68A Stat. 775, ([26 U.S.C. 6301](https://www.govinfo.gov/link/uscode/26/6301)); June 29, 1956, Ch. 462, 70 Stat. 391 ([26 U.S.C. 6301](https://www.govinfo.gov/link/uscode/26/6301)))
\[T.D. ATF-277, [53 FR 45268](https://www.federalregister.gov/citation/53-FR-45268), Nov. 9, 1988, as amended by T.D. ATF-301, [55 FR 47658](https://www.federalregister.gov/citation/55-FR-47658), Nov. 14, 1990; T.D. ATF-365, [60 FR 33674](https://www.federalregister.gov/citation/60-FR-33674), June 28, 1995; T.D. ATF-451, [66 FR 21669](https://www.federalregister.gov/citation/66-FR-21669), May 1, 2001. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001; T.D. TTB-41, [71 FR 5604](https://www.federalregister.gov/citation/71-FR-5604), Feb. 2, 2006; T.D. TTB-89, [76 FR 3513](https://www.federalregister.gov/citation/76-FR-3513), Jan. 20, 2011; T.D. TTB-94, [76 FR 52862](https://www.federalregister.gov/citation/76-FR-52862), Aug. 24, 2011; T.D. TTB-146, [82 FR 1133](https://www.federalregister.gov/citation/82-FR-1133), Jan. 4, 2017]
#### § 26.112a Payment of tax by electronic fund transfer.
(a) *General.*
(1) Each taxpayer who was liable, during a calendar year, for a gross amount equal to or exceeding five million dollars in distilled spirits taxes combining tax liabilities incurred under this [part and parts 19](/current/title-27/part-19) and [27 of this chapter](/current/title-27/part-27), a gross amount equal to or exceeding five million dollars in wine taxes combining tax liabilities incurred under this [part and parts 24](/current/title-27/part-24) and [27 of this chapter](/current/title-27/part-27), or a gross amount equal to or exceeding five million dollars in beer taxes combining tax liabilities incurred under this [part and parts 25](/current/title-27/part-25) and [27 of this chapter](/current/title-27/part-27), shall use a commercial bank in making payment by electronic fund transfer (EFT) of such taxes during the succeeding calendar year. Payment by cash, check, or money order, of distilled spirits taxes, wine taxes, or beer taxes, as described in [§ 26.112](/current/title-27/section-26.112), is not authorized for a taxpayer who is required, by this section, to make remittances by EFT. For purposes of this section, the dollar amount of tax liability is to be summarized separately for distilled spirits taxes, wine taxes, or beer taxes, and is defined as the gross tax liability on each type of product for which taxes are paid in accordance with this subpart, taxable withdrawals from premises in the United States, and importation during the calendar year, without regard to any drawbacks, credits, or refunds, for all premises at which tax liabilities are incurred by the taxpayer. Overpayments are not taken into account in summarizing the gross tax liability.
(2) For the purposes of this section, a taxpayer includes a controlled group of corporations, as defined in [26 U.S.C. 1563](https://www.govinfo.gov/link/uscode/26/1563), and implementing regulations in [26 CFR 1.1563-1](/current/title-26/section-1.1563-1) through [1.1563-4](/current/title-26/section-1.1563-4), except that the words “at least 80 percent” shall be replaced by the words “more than 50 percent” in each place it appears in subsection (a) of [26 U.S.C. 1563](https://www.govinfo.gov/link/uscode/26/1563), as well as in the implementing regulations. Also, the rules for a “controlled group of corporations” apply in a similar fashion to groups which include partnerships and/or sole proprietorships. If one entity maintains more than 50% control over a group consisting of corporations and one, or more, partnerships and/or sole proprietorships, all of the members of the controlled group are one taxpayer for the purpose of determining who is required to make remittances by EFT.
(3) A taxpayer who is required by this section to make remittances by EFT, shall make a separate EFT remittance and file a separate tax return, for each premises from which distilled spirits, wine, or beer is withdrawn upon determination of tax.
(b) *Requirements.*
(1) On or before January 10 of each calendar year, except for a taxpayer already remitting the tax by EFT, each taxpayer who was liable for a gross amount equal to or exceeding five million dollars in distilled spirits taxes combining tax liabilities incurred under this [part and parts 19](/current/title-27/part-19) and [27 of this chapter](/current/title-27/part-27), a gross amount equal to or exceeding five million dollars in wine taxes combining tax liabilities incurred under this [part and parts 24](/current/title-27/part-24) and [27 of this chapter](/current/title-27/part-27), or a gross amount equal to or exceeding five million dollars in beer taxes combining tax liabilities incurred under this [part and parts 25](/current/title-27/part-25) and [27 of this chapter](/current/title-27/part-27) during the previous calendar year, shall notify, in writing, the appropriate TTB officer. The notice shall be an agreement to make remittances by EFT.
(2) For each return filed in accordance with this part, the taxpayer shall direct the taxpayer's bank to make an electronic fund transfer in the amount of the taxpayment to the Treasury Account as provided in [paragraph (e)](/current/title-27/section-26.112a#p-26.112a\(e\)) of this section. The request shall be made to the bank early enough for the transfer to be made to the Treasury Account by no later than the close of business on the last day for filing the return, prescribed in [§ 26.112](/current/title-27/section-26.112) or [§ 26.113](/current/title-27/section-26.113). The request shall take into account any time limit established by the bank.
(3) If a taxpayer was liable for less than five million dollars in distilled spirits taxes combining tax liabilities incurred under this [part and parts 19](/current/title-27/part-19) and [27 of this chapter](/current/title-27/part-27), less than five million dollars in wine taxes combining tax liabilities incurred under this [part and parts 24](/current/title-27/part-24) and [27 of this chapter](/current/title-27/part-27), or less than five million dollars in beer taxes combining tax liabilities incurred under this [part and parts 25](/current/title-27/part-25) and [27 of this chapter](/current/title-27/part-27) during the preceding calendar year, the taxpayer may choose either to continue remitting the tax as provided in this section or to remit the tax with the return as prescribed by [§ 26.112](/current/title-27/section-26.112). Upon filing the first return on which the taxpayer chooses to discontinue remitting the tax by EFT and to begin remitting the tax with the tax return, the taxpayer shall notify the appropriate TTB officer by attaching a written notification to the tax return, stating that no taxes are due by EFT, because the tax liability during the preceding calendar year was less than five million dollars, and that the remittance shall be filed with the tax return.
(c) *Remittance.*
(1) Each taxpayer shall show on the tax return, information about remitting the tax for that return by EFT and shall file the return with the appropriate TTB officer.
(2) Remittances shall be considered as made when the taxpayment by electronic fund transfer is received by the Treasury Account. For purposes of this section, a taxpayment by electronic fund transfer shall be considered as received by the Treasury Account when it is paid to a Federal Reserve Bank.
(3) When the taxpayer directs the bank to effect an electronic fund transfer message as required by [paragraph (b)(2)](/current/title-27/section-26.112a#p-26.112a\(b\)\(2\)) of this section, any transfer data record furnished to the taxpayer, through normal banking procedures, will serve as the record of payment, and shall be retained as part of required records.
(d) *Failure to make a taxpayment by EFT.* The taxpayer is subject to a penalty imposed by [26 U.S.C. 5684](https://www.govinfo.gov/link/uscode/26/5684), [6651](https://www.govinfo.gov/link/uscode/26/6651), or [6656](https://www.govinfo.gov/link/uscode/26/6656), as applicable, for failure to make a taxpayment by EFT on or before the close of business on the prescribed last day for filing.
(e) *Procedure.* Upon the notification required under [paragraph (b)(1)](/current/title-27/section-26.112a#p-26.112a\(b\)\(1\)) of this section, the appropriate TTB officer will issue to the taxpayer a TTB procedure entitled, Payment of Tax by Electronic Fund Transfer. This publication outlines the procedure a taxpayer is to follow when preparing returns and EFT remittances in accordance with this part. U.S. Customs and Border Protection (CBP) will provide the taxpayer with instructions for preparing EFT remittances for payments to be made to CBP.
(Approved by the Office of Management and Budget under control number 1513-0083)
\[T.D. ATF-185, [49 FR 37580](https://www.federalregister.gov/citation/49-FR-37580), Sept. 25, 1984, as amended by T.D. ATF-245, [52 FR 532](https://www.federalregister.gov/citation/52-FR-532), Jan. 7, 1987; T.D. ATF-251, [52 FR 19339](https://www.federalregister.gov/citation/52-FR-19339), May 22, 1987; T.D. ATF-262, [52 FR 47560](https://www.federalregister.gov/citation/52-FR-47560), Dec. 15, 1987; T.D. ATF-277, [53 FR 45268](https://www.federalregister.gov/citation/53-FR-45268), Nov. 9, 1988. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001; T.D. ATF-479, [67 FR 30798](https://www.federalregister.gov/citation/67-FR-30798), May 8, 2002; T.D. TTB-91, [76 FR 5479](https://www.federalregister.gov/citation/76-FR-5479), Feb. 1, 2011; T.D. TTB-146, [82 FR 1133](https://www.federalregister.gov/citation/82-FR-1133), Jan. 4, 2017; T.D. TTB-196, [89 FR 87944](https://www.federalregister.gov/citation/89-FR-87944), Nov. 6, 2024]
#### § 26.113 Returns for prepayment of taxes.
(a) *General.* Except as provided in [§§ 26.66(c)](/current/title-27/section-26.66#p-26.66\(c\)), [26.67(b)](/current/title-27/section-26.67#p-26.67\(b\)), or [26.68(b)](/current/title-27/section-26.68#p-26.68\(b\)), a proprietor must have an approved bond to defer payment of taxes. If a proprietor does not have an approved bond covering the deferred payment of taxes, or if such bond is in an insufficient penal sum, or if there is default by him in any payment of tax under this subpart, liquors shall not be released from bonded storage before the proprietor has paid the tax thereon.
(b) *Remittances.* Remittances submitted to cover prepayment of taxes under this subpart shall be in cash, United States postal money orders, certified checks, or cashier's checks.
(c) *Distilled spirits.* In all cases where taxes equal to the taxes imposed in the United States by [26 U.S.C. 5001(a)(1)](https://www.govinfo.gov/link/uscode/26/5001) are to be paid before distilled spirits may be released for shipment, the proprietor shall pay such taxes pursuant to a return on TTB Form 5000.25, as prescribed in [§ 26.81](/current/title-27/section-26.81).
(d) *Wine.* In all cases where taxes equal to the taxes imposed in the United States by [26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041), are to be paid before wine may be withdrawn from bonded storage, the proprietor shall pay such taxes pursuant to a return on TTB Form 5000.25, and as prescribed in [§ 26.96](/current/title-27/section-26.96).
(e) *Beer.* In all cases where taxes equal to the taxes imposed in the United States by [26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051), are to be paid before beer may be withdrawn from bonded storage, the brewer shall pay such taxes pursuant to a return on TTB Form 5000.25, and as prescribed in [§ 26.105](/current/title-27/section-26.105).
(f) *Applicable procedures.* The procedures of [§ 26.112(c)](/current/title-27/section-26.112#p-26.112\(c\)) with respect to returns delivered by United States mail shall apply to returns and remittances filed under the provisions of this section.
(Approved by the Office of Management and Budget under control number 1512-0497)
\[[20 FR 6077](https://www.federalregister.gov/citation/20-FR-6077), Aug. 20, 1955]
#### Editorial Note:
For Federal Register citations affecting [§ 26.113](/current/title-27/section-26.113), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
### Permit To Ship Liquors and Articles
#### § 26.114 Permit to ship required.
Before liquors and articles of Puerto Rican manufacture, upon which all internal revenue taxes have been paid or deferred as prescribed in this subpart, may be shipped to the United States, a permit to ship, form TTB F 5170.7, must be obtained from the Secretary as provided in [§§ 26.115](/current/title-27/section-26.115) and [26.116](/current/title-27/section-26.116).
\[T.D. 6551, [26 FR 1490](https://www.federalregister.gov/citation/26-FR-1490), Feb. 22, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and further redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38552](https://www.federalregister.gov/citation/66-FR-38552), July 25, 2001; T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 26.115 Application, TTB Form 5170.7.
Application for permit to ship to the United States liquors and articles of Puerto Rican manufacture on which all taxes have been paid or deferred as prescribed in this subpart shall be made by the shipper on TTB Form 5170.7, in sextuple. Each TTB Form 5170.7 will be given a serial number, by the applicant, beginning with “1” for the first day of January of each year and running consecutively thereafter to December 31, inclusive. This serial number will be prefixed by the last two digits of the calendar year, e.g. “61-1.” All copies of the form shall be delivered to the revenue agent for execution of his certification thereon and forwarding of all copies to the Secretary within sufficient time to allow for the issuance of the permit and customs inspection as provided in [§ 26.116](/current/title-27/section-26.116).
\[T.D. 6551, [26 FR 1490](https://www.federalregister.gov/citation/26-FR-1490), Feb. 22, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and further redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38552](https://www.federalregister.gov/citation/66-FR-38552), July 25, 2001; T.D. TTB-146, [82 FR 1133](https://www.federalregister.gov/citation/82-FR-1133), Jan. 4, 2017]
#### § 26.116 Issuance of permit, TTB Form 5170.7, and customs inspection.
If the application has been properly executed and the Secretary or their delegate finds that all internal revenue taxes imposed under [26 U.S.C. 7652(a)](https://www.govinfo.gov/link/uscode/26/7652), have been computed under the provisions of this part and have been paid or have been deferred under the applicable provisions of this part, they will execute their permit on all copies thereof, retain one copy of the form, return two copies to the shipper, and send three copies to the district director of customs in Puerto Rico. The shipper will submit the two copies of the TTB Form 5170.7 to the district director of customs at least six hours prior to the intended lading of the merchandise. The district director of customs will then inspect the merchandise covered by the TTB Form 5170.7 after which they will execute their certificate on each copy of TTB Form 5170.7 indicating all exceptions. If discrepancies appear indicating differences between the quantity covered by TTB Form 5170.7 and the quantity actually contained in the shipment or the improper tax payment of the merchandise, they will withhold release of the shipment and notify the Secretary of such discrepancies. Thereupon, such discrepancies must be corrected in the shipping documents and additional tax paid, if required, prior to release of the merchandise. The district director of customs, upon release of the merchandise for shipment, will retain one copy of the TTB Form 5170.7, return two copies to the shipper, and send two copies to the district director of customs at the port of arrival in the United States, one of which should be mailed and the other dispatched on the vessel concerned for the guidance of the appropriate TTB officer who will handle the cargo. After the shipment has been cleared by the district director of customs in Puerto Rico, the shipper shall retain one copy of the TTB Form 5170.7 and send one copy thereof, with other shipping documents, to the district director of customs at the port of arrival.
\[[20 FR 6077](https://www.federalregister.gov/citation/20-FR-6077), Aug. 20, 1955, as amended by T.D. 7006, [34 FR 2249](https://www.federalregister.gov/citation/34-FR-2249), Feb. 15, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### Editorial Note:
For Federal Register citations affecting [§ 26.116](/current/title-27/section-26.116), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
### Procedure at Port of Arrival
#### § 26.117 Action by carrier.
The carrier of the merchandise specified on the TTB Form 5170.7 shall, at the time of unlading at the port of arrival in the United States, segregate and arrange the cases of liquors or articles for convenient customs examination and will assume any expense incurred in connection therewith.
\[[20 FR 6077](https://www.federalregister.gov/citation/20-FR-6077), Aug. 20, 1955, as amended by T.D. TTB-146, [82 FR 1134](https://www.federalregister.gov/citation/82-FR-1134), Jan. 4, 2017]
#### § 26.118 Inspection by district director of customs at port of arrival.
On receipt of properly executed TTB Form 5170.7 from the shipper and the copies of TTB Form 5170.7 from the district director of customs in Puerto Rico, the district director of customs at the port of arrival shall inspect the merchandise to determine whether the quantity specified on the TTB Form 5170.7 is contained in the shipment. He will then execute his certificate on each copy of TTB Form 5170.7 received and indicate thereon any exceptions found at the time of discharge. The statement of exceptions should show the serial number of each case or other shipping container which sustained a loss, the quantity of liquor reported shipped in such container and the quantity lost. Losses occurring as the result of missing bottles, cases, or other containers should be listed separately from empty containers and containers which have sustained losses due to breakage. Where the statement is made on the basis of bottles missing or lost due to other cause, the number and size of bottles lost should be shown. If the district director of customs finds that the full amount of the taxes due has not been paid, he will require the difference due to be paid prior to release of the merchandise in accordance with the applicable provisions of this part. When the proper inspection of the merchandise has been effected, and any additional taxes found to be due on the liquors or articles collected, the merchandise will be released.
\[[20 FR 6077](https://www.federalregister.gov/citation/20-FR-6077), Aug. 20, 1955, as amended by T.D. 7006, [34 FR 2249](https://www.federalregister.gov/citation/34-FR-2249), Feb. 15, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975. T.D. ATF-451, [66 FR 21669](https://www.federalregister.gov/citation/66-FR-21669), May 1, 2001; T.D. TTB-146, [82 FR 1134](https://www.federalregister.gov/citation/82-FR-1134), Jan. 4, 2017]
#### § 26.119 Disposition of forms by district director of customs.
Two copies of the TTB Form 5170.7 will be forwarded to the appropriate TTB officer, and one copy of the form will be retained by the district director of customs and be available for inspection by appropriate TTB officers.
\[T.D. ATF-451, [66 FR 21669](https://www.federalregister.gov/citation/66-FR-21669), May 1, 2001, as amended by T.D. TTB-146, [82 FR 1134](https://www.federalregister.gov/citation/82-FR-1134), Jan. 4, 2017]
## Subpart F—Liquors and Articles Purchased by Tourists in Puerto Rico
#### § 26.125 Taxable.
When liquors and articles subject to tax are brought into the United States by tourists, the tax thereon shall be paid as provided in this subpart.
#### § 26.126 Taxpayment in Puerto Rico.
Liquors upon which all Federal internal revenue taxes have been paid in Puerto Rico may be brought into the United States for personal consumption without payment of additional taxes. When distilled spirits, wines, or beer are purchased by a tourist for consumption in the United States, the internal revenue tax due may be paid to the appropriate TTB officer, and a TTB receipt obtained, or the tax may be paid to U.S. Customs and Border Protection authorities, who will issue a customs receipt. The tax on articles purchased by tourists may be paid in the same manner. The receipt received from the appropriate TTB officer or from the customs officer shall be presented, as required, as evidence that the tax has been paid.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended, 1358, as amended ([26 U.S.C. 5061](https://www.govinfo.gov/link/uscode/26/5061), [5205](https://www.govinfo.gov/link/uscode/26/5205)))
\[T.D. ATF-206, [50 FR 23954](https://www.federalregister.gov/citation/50-FR-23954), June 7, 1985, as amended by T.D. ATF-251, [52 FR 19339](https://www.federalregister.gov/citation/52-FR-19339), May 22, 1987; T.D. TTB-91, [76 FR 5479](https://www.federalregister.gov/citation/76-FR-5479), Feb. 1, 2011; T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 26.128 Taxpayment at port of arrival.
If the internal revenue tax on liquors and articles is not paid in Puerto Rico, it shall be paid by the tourist at the port of arrival prior to release of the liquors or articles from customs custody. The tax may be paid to an appropriate TTB officer, and a TTB receipt obtained, or the tax may be paid to the director of customs, who will issue a customs receipt. If payment is to be made to an appropriate TTB officer, the director of customs will notify the appropriate TTB officer of the amount of tax due. On payment of the tax to the director of customs, or on submission of the TTB receipt for the tax, the director of customs will release the liquors or articles.
\[T.D. ATF-251, [52 FR 19339](https://www.federalregister.gov/citation/52-FR-19339), May 22, 1987, as amended by T.D. ATF-451, [66 FR 21669](https://www.federalregister.gov/citation/66-FR-21669), May 1, 2001; T.D. TTB-91, [76 FR 5479](https://www.federalregister.gov/citation/76-FR-5479), Feb. 1, 2011]
## Subpart G—Closures for Distilled Spirits From Puerto Rico
#### § 26.135 Containers of distilled spirits to bear closures.
Containers of 1 gallon (3.785 liters) or less of distilled spirits, upon which all Federal internal revenue taxes have been paid or deferred in Puerto Rico under provisions of this part, shall have closures or other devices affixed in accordance with the provisions of this part, prior to shipment to the United States.
(Sec. 454, Pub. L. 98-369, 98 Stat. 494 ([26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301)))
\[T.D. ATF-206, [50 FR 23954](https://www.federalregister.gov/citation/50-FR-23954), June 7, 1985]
#### § 26.136 Affixing closures.
Each container of distilled spirits having a capacity of one gallon (3.785 liters) or less must have a closure or other device securely affixed to the container. The closure or other device must be constructed in such a manner as to require breaking in order to gain access to the contents of the container.
(Sec. 454, Pub. L. 98-369, 98 Stat. 494 ([26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301)))
\[T.D. TTB-119, [79 FR 17033](https://www.federalregister.gov/citation/79-FR-17033), Mar. 27, 2014]
## Subpart H—Records and Reports of Liquors From Puerto Rico
#### § 26.163 General requirements.
Except as provided in [§ 26.164](/current/title-27/section-26.164), every person, other than a tourist, bringing liquor into the United States from Puerto Rico shall keep records and render reports of the physical receipt and disposition of such liquors in accordance with part 31\[[1](#26.163-footnote-1)] of this chapter: *Provided,* That if the person who is responsible for release of the liquors from customs custody does not take physical possession of the liquors, he shall keep commercial records reflecting such release; such records shall identify the kind and quantity of the liquors released, the name and address of the person receiving the liquors from customs custody, and shall be filed chronologically by release dates. Records and reports will not be required under this part with respect of liquors while in customs custody.
(Approved by the Office of Management and Budget under control number 1512-0352)
(72 Stat. 1342, 1395; [26 U.S.C. 5114](https://www.govinfo.gov/link/uscode/26/5114), [5555](https://www.govinfo.gov/link/uscode/26/5555))
\[T.D. ATF-2, [37 FR 22736](https://www.federalregister.gov/citation/37-FR-22736), Oct. 21, 1972. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-172, [49 FR 14943](https://www.federalregister.gov/citation/49-FR-14943), Apr. 16, 1984. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38552](https://www.federalregister.gov/citation/66-FR-38552), July 25, 2001; T.D. TTB-25, [70 FR 19883](https://www.federalregister.gov/citation/70-FR-19883), Apr. 15, 2005]
###### Footnotes - [26.163](/current/title-27/section-26.163)
\[[1](#26.163-footref-1)] (“Alcohol Beverage Dealers”)
#### § 26.164 Proprietors of taxpaid premises.
Transactions involving the bringing of liquors into the United States from Puerto Rico by proprietors of distilled spirits plants in the United States qualified under the provisions of this chapter shall be recorded and reported in accordance with the regulations governing the operations of such premises in the United States.
\[T.D. 6402, [24 FR 6090](https://www.federalregister.gov/citation/24-FR-6090), July 30, 1959. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-198, [50 FR 8551](https://www.federalregister.gov/citation/50-FR-8551), Mar. 1, 1985]
#### § 26.164a Package gauge record.
When required in this part, with respect to Puerto Rican spirits, a package gauge record shall be prepared to show:
(a) The date prepared;
(b) The related transaction form and its serial number;
(c) The producer or rectifier (processor) of the spirits, and his name, address, and plant registration number; and
(d) For each package, the:
(1) Package identification or serial number;
(2) Kind of spirits;
(3) Gross weight;
(4) Tare;
(5) Net weight;
(6) Proof gallons; and
(7) Proof.
(Approved by the Office of Management and Budget under control number 1512-0250)
\[T.D. ATF-198, [50 FR 8551](https://www.federalregister.gov/citation/50-FR-8551), Mar. 1, 1985]
#### § 26.165 Certificate of effective tax rate computation.
(a) Where distilled spirits of Puerto Rican manufacture which contain eligible wine or eligible flavors are to be tax determined for shipment to the United States or are to be shipped to the United States without payment of tax for transfer from customs custody to the bonded premises of a distilled spirits plant, the consignor shall prepare a certificate of effective tax rate computation showing the:
(1) The serial number of TTB Form 5110.31 or 5110.51;
(2) Elements necessary to compute the effective tax rate in accordance with [§ 26.79a](/current/title-27/section-26.79a) as follows—
(i) Proof gallons of distilled spirits (exclusive of distilled spirits derived from eligible flavors);
(ii) Wine gallons of each eligible wine and the percentage of alcohol by volume of each; and
(iii) Proof gallons of distilled spirits derived from each eligible flavor;
(3) Date of the statement of eligibility for each eligible flavor (see [§ 26.50a](/current/title-27/section-26.50a)).
(4) Effective tax rate applied to the product.
(5) Signature and title of the consignor.
(b) If the spirits are tax determined for shipment to the United States, the proprietor shall retain the certificate for a period of not less than three years after the last tax determination to which the certificate is applicable. If the spirits are shipped to the United States for transfer from customs custody to the bonded premises of a distilled spirits plant, the proprietor shall forward the original to the consignee distilled spirits plant in the United States and retain a copy for his files.
(Approved by the Office of Management and Budget under control number 1512-0203)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1366, as amended ([26 U.S.C. 5232](https://www.govinfo.gov/link/uscode/26/5232)); Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended ([26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010)))
\[T.D. ATF-297, [55 FR 18067](https://www.federalregister.gov/citation/55-FR-18067), Apr. 30, 1990. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38552](https://www.federalregister.gov/citation/66-FR-38552), July 25, 2001; T.D. TTB-146, [82 FR 1134](https://www.federalregister.gov/citation/82-FR-1134), Jan. 4, 2017]
## Subpart I—Claims for Drawback on Eligible Articles From Puerto Rico
#### Source:
T.D. ATF-263, [52 FR 46594](https://www.federalregister.gov/citation/52-FR-46594), Dec. 9, 1987, unless otherwise noted.
#### § 26.170 Drawback of tax.
Any person who brings eligible articles into the United States from Puerto Rico may claim drawback of the distilled spirits excise taxes paid on such articles as provided in this subpart.
#### § 26.171 Claimant registration.
Any person filing claim for drawback of tax on eligible articles brought into the United States from Puerto Rico must register annually as a nonbeverage domestic drawback claimant. Registration will be accomplished when the claimant submits the first drawback claim for each year, along with the required supporting data for the claim, under [subpart G of part 17 of this chapter](/current/title-27/part-17/subpart-G). For purposes of registration, subpart C [part 17 of this chapter](/current/title-27/part-17) shall apply as if the use and tax determination occurred in the United States at the time the article was brought into the United States, and each business location from which entry of eligible articles is caused or effected shall be treated as a place of manufacture.
\[T.D. TTB-79, [74 FR 37405](https://www.federalregister.gov/citation/74-FR-37405), July 28, 2009]
#### § 26.172 Bonds.
(a) *General.* Persons bringing eligible articles into the United States from Puerto Rico and intending to file monthly claims for drawback under the provisions of this subpart shall obtain a bond on Form 5154.3. When the limit of liability under a bond given in less than the maximum amount has been reached, further drawback on monthly claims may be suspended until a strengthening or superseding bond in a sufficient amount has been furnished. For provisions relating to bonding requirements, [subpart E of part 17 of this chapter](/current/title-27/part-17/subpart-E) is incorporated in this part.
(b) *Approval required.* No person bringing eligible articles into the United States from Puerto Rico may file monthly claims for drawback under the provisions of this subpart until a bond on TTB Form 5154.3 has been approved.
\[T.D. ATF-379, [61 FR 31427](https://www.federalregister.gov/citation/61-FR-31427), June 20, 1996, as amended by T.D. ATF-451, [66 FR 21669](https://www.federalregister.gov/citation/66-FR-21669), May 1, 2001]
#### § 26.173 Claims for drawback.
(a) *General.* Persons bringing eligible articles into the United States from Puerto Rico must file claim for drawback on TTB Form 2635 (5620.8). Upon finding that the claimant has satisfied the requirements of this subpart, the appropriate TTB officer will allow the drawback at \$1 less than the rate applicable under [26 U.S.C. 7652(f)](https://www.govinfo.gov/link/uscode/26/7652). Claims for products manufactured in Puerto Rico must be filed separately from claims filed under [part 17 of this chapter](/current/title-27/part-17) for products manufactured in the United States.
(b) *Information on claims.* The claim must set forth the following:
(1) \[Reserved]
(2) That the eligible articles brought into the United States on which drawback is claimed are fully tax paid or tax-determined;
(3) That the eligible articles on which drawback is claimed are nonbeverage products; and
(4) That the eligible articles were manufactured in Puerto Rico in compliance with an approved formula in accordance with [§ 26.51](/current/title-27/section-26.51).
(c) *Supporting data.* Each claim shall be accompanied by supporting data as specified in this paragraph. TTB Form 5154.2, Supporting Data for Nonbeverage Drawback Claims, may be used, or the claimant may use any suitable format that provides the following information:
(1) The claimant's employer identification number, as required by [§§ 17.31](/current/title-27/section-17.31) and [17.32 of this chapter](/current/title-27/section-17.32); and
(2) A description of each eligible article as follows:
(i) Name and type of each product;
(ii) Name and address of the manufacturer of each product;
(iii) Formula number;
(iv) Alcohol content of each product;
(v) Quantity of each product;
(vi) Proof gallons of distilled spirits contained in each product;
(vii) Date of entry of the eligible product into the United States, and
(viii) The serial number of each TTB Form 487-B (5170.7) covering such articles shipped to the United States.
(d) *Date of filing claim.* Quarterly claims for drawback shall be filed within the 6 months next succeeding the quarter in which the eligible products covered by the claim were brought into the United States. Monthly claims for drawback may be filed at any time after the end of the month in which the eligible products covered by the claim were brought into the United States, but must be filed not later than the close of the sixth month succeeding the quarter in which the eligible products were brought into the United States.
(Approved by the Office of Management and Budget under control number 1512-0494)
\[T.D. ATF-263, [52 FR 46594](https://www.federalregister.gov/citation/52-FR-46594), Dec. 9, 1987, as amended by T.D. ATF-271, [53 FR 17559](https://www.federalregister.gov/citation/53-FR-17559), May 17, 1988; T.D. ATF-379, [61 FR 31427](https://www.federalregister.gov/citation/61-FR-31427), June 20, 1996; T.D. ATF-451, [66 FR 21669](https://www.federalregister.gov/citation/66-FR-21669), May 1, 2001. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38552](https://www.federalregister.gov/citation/66-FR-38552), July 25, 2001; T.D. TTB-79, [74 FR 37406](https://www.federalregister.gov/citation/74-FR-37406), July 28, 2009]
#### § 26.174 Records.
(a) *General.* Every person intending to file claim for drawback on eligible articles brought into the United States from Puerto Rico shall keep permanent records of the data elements required by this section. Such records shall be maintained at the business premises for which the claim is filed and shall be available for inspection by any appropriate TTB officer during business hours.
(b) *Details of records.* Each person intending to claim drawback on eligible articles brought into the United States shall maintain permanent records showing the following data:
(1) The name, description, quantity, and formula number of each such article.
(2) The alcohol content of each such article.
(3) Name and address of the manufacturer and shipper, and date of entry into the United States.
(4) Evidence of taxpayment of distilled spirits in accordance with [paragraph (c)](/current/title-27/section-26.174#p-26.174\(c\)) of this section.
(c) *Evidence of taxpayment of distilled spirits.* All shipments of eligible articles from Puerto Rico to the United States shall be supported by the vendor's commercial invoice which must bear a certification as to taxpayment by the person who determined or paid the tax, and include the following information:
(1) The name and address of vendor;
(2) The number of the applicable invoice;
(3) The serial or package identification number of the container;
(4) Name, type, and formula number of the product;
(5) The kind of spirits, proof, and proof gallons in the container; and
(6) The serial number of each Form 487-B (5170.7) covering such articles shipped to the United States.
(d) *Form of record.* No particular form of record is prescribed, but the data required to be shown shall be readily ascertainable from the records kept by the drawback claimant.
(e) *Retention of records.* Each drawback claimant shall retain for a period of not less than three years all records required by this subpart, all commercial invoices or shipping documents, and all bills of lading received evidencing receipt and tax determination of the spirits. In addition, a copy of each approved formula returned to the manufacturer of eligible articles shall be retained for not less than three years from the date he files his last claim for drawback under the formula. The records, forms, and formulas shall be readily available during regular business hours for examination by appropriate TTB officers.
(Approved by the Office of Management and Budget under control number 1512-0494)
\[T.D. ATF-263, [52 FR 46594](https://www.federalregister.gov/citation/52-FR-46594), Dec. 9, 1987, as amended by T.D. ATF-451, [66 FR 21669](https://www.federalregister.gov/citation/66-FR-21669), May 1, 2001]
## Subpart Ia—Shipment of Denatured Spirits and Products Made With Denatured Spirits to the United States From Puerto Rico
#### Source:
T.D. ATF-199, [50 FR 9198](https://www.federalregister.gov/citation/50-FR-9198), Mar. 1, 1985, unless otherwise noted. Redesignated by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), July 25, 2001.
#### § 26.191 Notice of shipment.
At least 5 business days before shipment, each proprietor of a distilled spirits plant in Puerto Rico who intends to ship denatured spirits to the United States in containers larger than 5 gallons, and each person in Puerto Rico who intends to ship products made with denatured spirits to the United States in containers larger than 5 gallons shall notify the chemist of the Treasury of Puerto Rico of the intent to ship.
(Approved by the Office of Management and Budget under control number 1512-0336)
\[T.D. ATF-199, [50 FR 9198](https://www.federalregister.gov/citation/50-FR-9198), Mar. 1, 1985, T.D. ATF-199, [50 FR 20099](https://www.federalregister.gov/citation/50-FR-20099), May 14, 1985]
#### § 26.192 Samples and analysis.
The chemist of the Treasury of Puerto Rico may take samples of the product to be shipped in order to determine that it is eligible for tax-free status.
#### § 26.193 Notification of tax liability.
(a) If the chemist of the Treasury of Puerto Rico finds that denatured spirits or products made with denatured spirits are not eligible for tax-free shipment, before the shipment is made, the chemist will immediately notify the shipper that the article is subject to tax, payable in accordance with [§§ 26.107](/current/title-27/section-26.107) through [26.110](/current/title-27/section-26.110).
(b) If the chemist of the Treasury of Puerto Rico finds that denatured spirits or products made with denatured spirits are not eligible for tax-free shipment, after the shipment is made, the chemist will immediately notify the shipper that the tax shall be paid immediately in accordance with [§ 26.113](/current/title-27/section-26.113). The chemist will also notify the appropriate TTB officer.
\[T.D. ATF-199, [50 FR 9198](https://www.federalregister.gov/citation/50-FR-9198), Mar. 1, 1985, as amended by T.D. ATF-451, [66 FR 21670](https://www.federalregister.gov/citation/66-FR-21670), May 1, 2001. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38552](https://www.federalregister.gov/citation/66-FR-38552), July 25, 2001]
#### § 26.194 Detention of articles.
(a) Upon receiving a notification in accordance with [§ 26.193(b)](/current/title-27/section-26.193#p-26.193\(b\)), the appropriate TTB officer will detain the article in accordance with [part 20 of this chapter](/current/title-27/part-20) or seize the article in accordance with [part 72 of this chapter](/current/title-27/part-72).
(b) After the shipper furnishes proof that the tax was paid in accordance with [§ 26.113](/current/title-27/section-26.113), the appropriate TTB officer will release the article to the consignee.
\[T.D. ATF-199, [50 FR 9198](https://www.federalregister.gov/citation/50-FR-9198), Mar. 1, 1985. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38552](https://www.federalregister.gov/citation/66-FR-38552), July 25, 2001]
## Subpart Ib—Shipment of Bulk Distilled Spirits From Puerto Rico, Without Payment of Tax, for Transfer From Customs Custody to the Bonded Premises of a Distilled Spirits Plant
#### Authority:
Sec. 3, Pub. L. 90-630, 82 Stat. 1328, as amended ([26 U.S.C. 5232](https://www.govinfo.gov/link/uscode/26/5232)).
#### Source:
T.D. ATF-62, [44 FR 71714](https://www.federalregister.gov/citation/44-FR-71714), Dec. 11, 1979, unless otherwise noted.
#### § 26.196 General.
Under the provisions of this subpart and [§ 26.86](/current/title-27/section-26.86), distilled spirits brought into the United States from Puerto Rico in bulk containers may be withdrawn by the proprietor of a distilled spirits plant from customs custody and transferred in such bulk containers or by pipeline to the bonded premises of his plant, without payment of the internal revenue tax, if any, imposed on such spirits by [26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652). Such spirits so withdrawn and transferred to a distilled spirits plant (a) may be redistilled or denatured only if of 185 degrees or more of proof; and (b) may be withdrawn from internal revenue bond for any purpose authorized by [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101), in the same manner as domestic distilled spirits. Spirits transferred from customs custody to the bonded premises of a distilled spirits plant under the provisions of this subpart shall be received and stored thereat, and withdrawn or transferred therefrom, subject to applicable provisions of [part 19 of this chapter](/current/title-27/part-19). The person operating the bonded premises of the distilled spirits plant to which spirits are transferred under the provisions of this subpart shall become liable for the tax on distilled spirits withdrawn from customs custody under [26 U.S.C. 5232](https://www.govinfo.gov/link/uscode/26/5232), upon release of the spirits from customs custody and the person bringing the spirits into the United States shall thereupon be relieved of liability for the tax.
\[T.D. ATF-62, [44 FR 71714](https://www.federalregister.gov/citation/44-FR-71714), Dec. 11, 1979. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38552](https://www.federalregister.gov/citation/66-FR-38552), July 25, 2001]
#### § 26.197 Furnishing formula to consignee.
Prior to the first shipment, the person shipping the spirits to the United States shall furnish a reproduced copy of the approved formula covering such spirits to the appropriate TTB officer, and to the proprietor of each distilled spirits plant to receive the spirits.
(Approved by the Office of Management and Budget under control number 1512-0204)
\[T.D. ATF-198, [50 FR 8551](https://www.federalregister.gov/citation/50-FR-8551), Mar. 1, 1985, as amended by T.D. ATF-451, [66 FR 21670](https://www.federalregister.gov/citation/66-FR-21670), May 1, 2001]
#### § 26.198 \[Reserved]
#### § 26.199 Application and permit to ship, TTB Form 5110.31.
Before spirits of Puerto Rican manufacture may be shipped to the United States without payment of tax for withdrawal from customs custody and transfer to the bonded premises of a distilled spirits plant, an application by the consignor on TTB Form 5110.31 for permit to ship must be approved by the Secretary. All copies of the application (original and five copies) shall be delivered to the revenue agent.
\[T.D. ATF-62, [44 FR 71714](https://www.federalregister.gov/citation/44-FR-71714), Dec. 11, 1979, as amended by T.D. TTB-146, [82 FR 1134](https://www.federalregister.gov/citation/82-FR-1134), Jan. 4, 2017; T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 26.199a Action by revenue agent.
(a) *Gauge.* Puerto Rican spirits to be withdrawn for shipment to the United States as provided in this subpart shall be gauged by the revenue agent prior to withdrawal from the consignor premises. The revenue agent shall record the quantity and proof of the spirits gauged on TTB Form 5110.31. If the spirits are in packages, the revenue agent shall prepare in sextuplicate a package gauge record according to [§ 26.164a](/current/title-27/section-26.164a), attach the package gauge record to TTB Form 5110.31, and dispose of the form (and any attachments) according to the instructions thereon.
(b) *Sealing bulk conveyances.* When a shipment is made in a tank, van, or other bulk conveyance (other than barrels, drums, or similar packages that are not containerized), all openings affording access to the spirits shall be sealed by the Puerto Rican revenue agent is such manner as will prevent unauthorized removal of spirits without detection.
(Approved by the Office of Management and Budget under control number 1512-0250)
\[T.D. ATF-198, [50 FR 8551](https://www.federalregister.gov/citation/50-FR-8551), Mar. 1, 1985. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001]
#### § 26.199b Issuance and disposition of permit.
When the Secretary receives an application on TTB Form 5110.31 and he or she finds that the applicant is in compliance with law and regulations, he or she will execute the permit to ship on all copies of TTB Form 5110.31, retain one copy, and any accompanying package gauge record as provided in [§ 26.164a](/current/title-27/section-26.164a), and return the remaining copies to the consignor who shall distribute them in accordance with the instructions on TTB Form 5110.31.
(Approved by the Office of Management and Budget under control number 1512-0250)
\[T.D. ATF-198, [50 FR 8552](https://www.federalregister.gov/citation/50-FR-8552), Mar. 1, 1985. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38551](https://www.federalregister.gov/citation/66-FR-38551), July 25, 2001; T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 26.199c Action by carrier.
The carrier of the spirits specified on the TTB Form 5110.31 shall, at the time of unlading at the port of arrival in the United States, segregate and arrange the containers of spirits for convenient customs examination and shall assume any expense incurred in connection therewith.
\[T.D. ATF-62, [44 FR 71714](https://www.federalregister.gov/citation/44-FR-71714), Dec. 11, 1979, as amended by T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 26.199d Customs inspection and release.
On receipt of a properly executed TTB Form 5110.31 from the consignor, the customs officer at the port of arrival in the United States shall inspect the corresponding shipment of spirits:
(a) If a shipment is in a bulk conveyance, and:
(1) The seals are intact, he shall release the shipment; or
(2) If the seals are broken, he shall, before release of the spirits, affix customs seals.
(b) If a shipment in packages does not arrive in a sealed conveyance, the packages shall be inspected, and if it appears that any package has sustained a loss, the package shall be weighed and its new gross weight shall be entered in contrasting color on the package gauge record attached to the related TTB Form 5110.31. The serial numbers of any seals affixed by the customs officers shall be reported on TTB Form 5110.31 under remarks with an explanation and description of any evidence of loss. After completing his inspection, the customs officer shall execute his certificate on each copy of TTB Form 5110.31 and show thereon any exceptions found at the time of his release for transfer of the spirits to the bonded premises of a distilled spirits plant. Missing packages should be reported separately from packages which have sustained losses. The customs officer shall then release the spirits to the consignee's representative and distribute all forms in accordance with the instructions on TTB Form 5110.31.
(Approved by the Office of Management and Budget under control number 1512-0250)
\[T.D. ATF-198, [50 FR 8552](https://www.federalregister.gov/citation/50-FR-8552), Mar. 1, 1985, as amended by T.D. TTB-146, [82 FR 1134](https://www.federalregister.gov/citation/82-FR-1134), Jan. 4, 2017]
#### § 26.199e \[Reserved]
#### § 26.199f Consignee premises.
(a) *General.* When Puerto Rican spirits are received from customs custody under the provisions of this subpart, the consignee proprietor shall execute the certificate of receipt on TTB Form 5110.31 and examine all containers for evidence of loss. If it appears that spirits were lost by theft or unusual event, the proprietor shall determine the quantity of spirits lost and report the loss according to [§ 19.462 of this chapter](/current/title-27/section-19.462).
(b) *Packages.* Packages shall be received on bonded premises by the proprietor on the basis of the most recent official gauge.
(c) *Distribution of forms.* The proprietor shall keep and send copies according the instructions on the form.
(Approved by the Office of Management and Budget under control numbers 1512-0200 and 1512-0250)
\[T.D. ATF-198, [50 FR 8552](https://www.federalregister.gov/citation/50-FR-8552), Mar. 1, 1985, as amended by T.D. ATF-451, [66 FR 21670](https://www.federalregister.gov/citation/66-FR-21670), May 1, 2001; T.D. TTB-92, [76 FR 9171](https://www.federalregister.gov/citation/76-FR-9171), Feb. 16, 2011]
## Subpart J—Products Coming Into the United States From the Virgin Islands
#### § 26.200 Taxable status.
(a) Liquors coming into the United States from the Virgin Islands, except as provided in [§ 26.201](/current/title-27/section-26.201), are subject to a tax equal to the internal revenue tax imposed upon the production in the United States of like liquors. Articles coming into the United States from the Virgin Islands, except as provided in [§ 26.201](/current/title-27/section-26.201), are subject to tax on the liquors contained therein at the rates imposed in the United States on like liquors of domestic production.
(b) The excise taxes collected on distilled spirits and articles containing distilled spirits shall be deposited into the Treasury of the Virgin Islands only if at least 92 percent of the alcoholic content of such product is rum. The amount deposited into the Treasury of the Virgin Islands shall not exceed the lesser of \$10.50, or the rate imposed by [26 U.S.C. 5001(a)(1)](https://www.govinfo.gov/link/uscode/26/5001) (including adjustments to the effective tax rate under [26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010)), on each proof gallon of such distilled spirits or article containing distilled spirits coming into the United States. Such excise tax payments to the Treasury of the Virgin Islands will be reduced by one percent and the estimated amount of refunds or credits, and may be further reduced by certain amounts deposited to the U.S. Treasury as miscellaneous receipts. The moneys so transferred and paid over shall constitute a separate fund in the Treasury of the Virgin Islands, and may be expended as the Virgin Islands legislature may determine.
(c) Except for products described in [26 U.S.C. 7652(c)](https://www.govinfo.gov/link/uscode/26/7652), no excise taxes shall be deposited into the Treasury of the Virgin Islands if an excise tax subsidy is provided by the Virgin Islands that is of a kind different from, or in an amount per value or volume of production greater than, any subsidy offered by the Virgin Islands to industries manufacturing products not subject to Federal excise tax.
(d) Internal revenue taxes payable on liquors brought into the United States from the Virgin Islands are collected by U.S. Customs and Border Protection (CBP) in accordance with CBP requirements. The tax must be paid on the basis of a return, and the customs form (including any electronic transmissions) by which the liquors are duty- and tax-paid to CBP will be treated as a return for purposes of this part. The person bringing such liquors into the United States, if filing electronically, must file the information specified in this section with the entry or entry summary, as appropriate, along with any other information that is required by CBP to be filed with the entry or entry summary for purposes of administering the provisions of the Internal Revenue Code and Federal Alcohol Administration Act (FAA Act). Any information required by this section that is also required by, and filed with, CBP as part of the entry or entry summary for purposes of meeting CBP requirements will satisfy the requirements of this section. The following information is required as described under this section:
(1) The permit number of the valid importer permit issued under the FAA Act and the regulations issued pursuant to the FAA Act ([27 CFR part 1](/current/title-27/part-1)), if applicable, as required by [27 CFR 1.20](/current/title-27/section-1.20) and [1.58](/current/title-27/section-1.58), and the importer's name, address, and employer identification number (EIN) associated with that permit;
(2) The TTB-assigned number of the valid certificate of label approval (COLA), if applicable, as required by [27 CFR 4.40](/current/title-27/section-4.40) in the case of wine, [27 CFR 5.51](/current/title-27/section-5.51) in the case of distilled spirits, and [27 CFR 7.31](/current/title-27/section-7.31) in the case of malt beverages;
(3) The name and address of the ultimate consignee;
(4) The quantity of each product (for distilled spirits, in proof liters or proof gallons; for wine and beer, in liters or gallons); and
(5) Information identifying each product for Internal Revenue Code and/or FAA Act purposes.
(e) Distilled spirits, natural wines, and beer in bulk containers may be released from customs custody without payment of tax under the provisions of [subpart Oa of this part](/current/title-27/part-26/subpart-Oa) and thereafter removed subject to tax from, respectively, a distilled spirits plant, bonded wine cellar, or brewery. The tax will be collected and paid under the provisions of [parts 19](/current/title-27/part-19), [24](/current/title-27/part-24), and [25 of this chapter](/current/title-27/part-25), respectively.
(f)
(1) Except as provided in [paragraph (f)(2)](/current/title-27/section-26.200#p-26.200\(f\)\(2\)) of this section, in the case of an entry for warehousing (that is, products transferred directly to a customs bonded warehouse or foreign trade zone), the last day for payment of the tax shall not be later than the 14th day after the last day of the semimonthly period during which the products are removed from the first such warehouse, even if the products have been removed from that customs bonded warehouse or foreign trade zone for transfer to another customs bonded warehouse or foreign trade zone.
(2) [Paragraph (f)(1)](/current/title-27/section-26.200#p-26.200\(f\)\(1\)) of this section does not apply to any distilled spirits, wines, or beer entered for warehousing and then removed for transfer to another customs bonded warehouse or foreign trade zone that is shown to the satisfaction of the Secretary to be destined for export.
(g) Regardless of the method of filing, the person bringing the liquors into the United States must retain as a record the information required by this section, any information provided to CBP to meet CBP requirements, and any supporting documentation. These records must be retained in accordance with the record retention requirements of [§ 26.276](/current/title-27/section-26.276), and the records must be made available upon request of the appropriate TTB officer or a customs officer.
([26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5054](https://www.govinfo.gov/link/uscode/26/5054), [5061](https://www.govinfo.gov/link/uscode/26/5061), [5232](https://www.govinfo.gov/link/uscode/26/5232), [5364](https://www.govinfo.gov/link/uscode/26/5364), [5418](https://www.govinfo.gov/link/uscode/26/5418), [7652](https://www.govinfo.gov/link/uscode/26/7652))
(Approved by the Office of Management and Budget under control number 1513-0064)
\[T.D. ATF-175, [49 FR 20804](https://www.federalregister.gov/citation/49-FR-20804), May 16, 1984, as amended by T.D. ATF-206, [50 FR 15888](https://www.federalregister.gov/citation/50-FR-15888), Apr. 23, 1985. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38552](https://www.federalregister.gov/citation/66-FR-38552), July 25, 2001; T.D. TTB-145, [81 FR 94200](https://www.federalregister.gov/citation/81-FR-94200), Dec. 22, 2016; T.D. TTB-159, [85 FR 33542](https://www.federalregister.gov/citation/85-FR-33542), June 2, 2020]
#### § 26.201 Products exempt from tax.
(a) *General.* Industrial spirits, denatured spirits, and products made with denatured spirits in the Virgin Islands may be brought into the United States without incurring tax liability imposed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001) or [7652](https://www.govinfo.gov/link/uscode/26/7652).
(b) *Industrial spirits.* A distiller of industrial spirits who qualifies under regulations issued by the Governor of the Virgin Islands may ship industrial spirits to a tax-free alcohol user in the United States who holds a permit under [part 22 of this chapter](/current/title-27/part-22). Shipments shall be made in accordance with the requirements of [subpart O of this part](/current/title-27/part-26/subpart-O).
(c) *Denatured spirits.* A distiller who qualifies under the regulations issued by the Governor of the Virgin Islands and who denatures spirits in accordance with [part 21 of this chapter](/current/title-27/part-21) may ship
(1) completely denatured alcohol to anyone in the United States, and/or
(2) specially denatured spirits to a dealer or user of specially denatured spirits in the United States or Puerto Rico who holds a permit under [part 20 of this chapter](/current/title-27/part-20). Shipments shall be made in accordance with the requirements of [subpart O of this part](/current/title-27/part-26/subpart-O).
(d) *Products made with denatured spirits.* A person in the Virgin Islands who manufactures products with completely denatured alcohol or specially denatured spirits in accordance with the requirements of [part 20 of this chapter](/current/title-27/part-20) and regulations issued by the Governor of the Virgin Islands may ship those products to the United States in accordance with the requirements of [subpart O of this part](/current/title-27/part-26/subpart-O).
\[T.D. ATF-199, [50 FR 9199](https://www.federalregister.gov/citation/50-FR-9199), Mar. 6, 1985, as amended by T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 26.201a Production in the Virgin Islands for tax-free shipment to the United States.
(a) *Authority of the Governor to issue regulations.* The Governor of the Virgin Islands, or the Governor's duly authorized agents, are authorized to issue or adopt such regulations (and to approve such bonds, and to issue, suspend, or revoke such permits, as may be required by such regulations) as are necessary to insure that:
(1) Industrial spirits produced or manufactured in the Virgin Islands and shipped to the United States free of tax for the purposes authorized in [26 U.S.C. 5214(a)](https://www.govinfo.gov/link/uscode/26/5214) (2) and (3);
(2) Denatured spirits manufactured in the Virgin Islands for shipment to the United States free of tax, and
(3) Products manufactured in the Virgin Islands with denatured spirits, for shipment to the United States free of tax, conform in all respects to the requirements of law and this chapter imposed on like products of domestic manufacture.
(b) *Law and regulations applicable.* Regulations having been issued by the Governor of the Virgin Islands and concurred in by the Secretary of the Treasury of the United States to govern the production, warehousing, and denaturation of spirits and the use of denatured spirits in the manufacture of products for shipment to the United States free of tax, such regulations are applicable in the Virgin Islands and the Virgin Islands are hereby exempted from
(1) All provisions of [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101), with the exception of [26 U.S.C. 5314(b)](https://www.govinfo.gov/link/uscode/26/5314) and [5687](https://www.govinfo.gov/link/uscode/26/5687); and
(2) The provisions of this chapter in respect of the production, bonded warehousing, denaturation, and withdrawal of distilled spirits and the use of denatured spirits in the United States:
*Provided,* That such exemption shall be effective only to the extent that any amendments or revisions of the regulations issued by the Governor of the Virgin Islands, or the Governor's duly authorized agents, are concurred in by the Secretary of the Treasury of the United States or the Secretary's delegate. Otherwise, all provisions of law as provided in [26 U.S.C. 5314(b)](https://www.govinfo.gov/link/uscode/26/5314), and the provisions of this chapter in respect of the production, bonded warehousing, denaturation, and withdrawal from bond of distilled spirits and denatured spirits and the use of denatured spirits in the manufacture of products shall extend to and apply in the Virgin Islands
(i) in respect of the production, bonded warehousing, and withdrawal of spirits for shipment to the United States free of tax for the purposes authorized in [26 U.S.C. 5214(a)](https://www.govinfo.gov/link/uscode/26/5214) (2) and (3), and
(ii) in respect of the production, bonded warehousing, and denaturation of spirits, and to the withdrawal and use of denatured spirits, where the denatured spirits or products containing denatured spirits are to be shipped to the United States free of tax.
\[T.D. 6402, [24 FR 6090](https://www.federalregister.gov/citation/24-FR-6090), July 30, 1959. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55853](https://www.federalregister.gov/citation/44-FR-55853), Sept. 28, 1979; T.D. ATF-198, [50 FR 8552](https://www.federalregister.gov/citation/50-FR-8552), Mar. 1, 1985; T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 26.201b \[Reserved]
#### § 26.201c Shipments of distilled spirits, natural wine, and beer to the United States without payment of tax.
Distilled spirits, natural wine, and beer may be brought into the United States from the Virgin Islands in bulk containers without payment of tax for transfer in bond from customs custody to the bonded premises of a distilled spirits plant in the case of distilled spirits, a bonded wine cellar in the case of natural wine, or a brewery in the case of beer. Such shipments are subject to the provisions of [subpart Oa of this part](/current/title-27/part-26/subpart-Oa).
\[T.D. TTB-145, [81 FR 94201](https://www.federalregister.gov/citation/81-FR-94201), Dec. 22, 2016]
#### § 26.202 Requirements of the Federal Alcohol Administration Act.
(a) *General.* The Federal Alcohol Administration Act (FAA Act) and the regulations issued under the FAA Act ([parts 1](/current/title-27/part-1), [4](/current/title-27/part-4), [5](/current/title-27/part-5), and [7 of this chapter](/current/title-27/part-7)) provide that any person, except an agency of a State or political subdivision thereof or any officer or employee of any such agency, who brings into the United States from the Virgin Islands distilled spirits, wines, or malt beverages for nonindustrial use must comply with the permit and labeling requirements described in this section. See [27 CFR 1.10](/current/title-27/section-1.10) for the definitions of distilled spirits, wine, and malt beverages under the FAA Act. Tourists bringing distilled spirits, wines, or malt beverages into the United States for personal or other noncommercial use are not subject to the provisions of the FAA Act or regulations issued pursuant to the FAA Act ([parts 1](/current/title-27/part-1), [4](/current/title-27/part-4), [5](/current/title-27/part-5), and [7 of this chapter](/current/title-27/part-7)).
(b) *FAA Act basic permit.* Any person, except an agency of a State or a political subdivision thereof or any officer or employee of any such agency, who intends to engage in the business of bringing distilled spirits, wines, or malt beverages into the United States from the Virgin Islands must, prior to bringing such products into the United States, obtain an importer's basic permit, in accordance with the requirements of the FAA Act and regulations issued pursuant to the FAA Act, and must file with U.S. Customs and Border Protection (CBP) the number associated with this permit when filing electronically as required under [27 CFR 1.58](/current/title-27/section-1.58). Also, as required under [§ 1.58 of this chapter](/current/title-27/section-1.58), if the importer is not filing electronically, the importer must have a copy of the FAA Act basic permit and make it available upon request of the appropriate TTB officer or a customs officer.
(c) *Certificate of label approval.* Any person and any agency of a State or political subdivision thereof or any officer or employee of such agency, removing for commercial purposes containers of distilled spirits, wines, or malt beverages from the Virgin Islands from customs custody for consumption, when filing electronically, must provide the TTB-assigned identification number of the valid certificate of label approval (COLA) for the distilled spirits, wines, or malt beverages with the filing of the customs entry, in accordance with the requirements of [27 CFR 4.40](/current/title-27/section-4.40) in the case of wine, [27 CFR 5.51](/current/title-27/section-5.51) in the case of distilled spirits, or [27 CFR 7.31](/current/title-27/section-7.31) in the case of malt beverages. Also, as required under [27 CFR 4.40](/current/title-27/section-4.40), [5.51](/current/title-27/section-5.51), and [7.31](/current/title-27/section-7.31), if the importer is not filing electronically, the importer must provide a copy of the valid COLA to CBP at the time of entry.
(d) *Foreign certificates.* Any person and any agency of a State or political subdivision thereof or any officer or employee of such agency, bringing into the United States from the Virgin Islands for commercial purposes and for consumption containers of distilled spirits or wines that require a certificate under [27 CFR 4.45(a)](/current/title-27/section-4.45#p-4.45\(a\)) in the case of wine or [27 CFR 5.52](/current/title-27/section-5.52) in the case of distilled spirits must be in possession of the certificate (and accompanying invoice, if applicable) at the time of release from customs custody.
(Secs. 3, 5, 49 Stat. 978, as amended, 981, as amended; [27 U.S.C. 203](https://www.govinfo.gov/link/uscode/27/203), [205](https://www.govinfo.gov/link/uscode/27/205))
\[T.D. TTB-145, [81 FR 94201](https://www.federalregister.gov/citation/81-FR-94201), Dec. 22, 2016]
#### § 26.203 Containers of 1 gallon (3.785 liters) or less.
Containers of distilled spirits brought into the United States from the Virgin Islands, having a capacity of not more than 1 gallon (3.785 liters), shall conform to the requirements of [subpart P of this part](/current/title-27/part-26/subpart-P).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1374 ([26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301)))
\[T.D. ATF-34, [41 FR 46864](https://www.federalregister.gov/citation/41-FR-46864), Oct. 26, 1976]
#### § 26.203a Containers in excess of 1 gallon (3.785 liters).
Containers of distilled spirits brought into the United States from the Virgin Islands, having a capacity in excess of 1 gallon (3.785 liters), are required to be marked in accordance with customs regulations ([19 CFR chapter I](/current/title-19/chapter-I)).
\[T.D. 6695, [28 FR 12936](https://www.federalregister.gov/citation/28-FR-12936), Dec. 5, 1963. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-34, [41 FR 46864](https://www.federalregister.gov/citation/41-FR-46864), Oct. 26, 1976; T.D. ATF-206, [50 FR 23955](https://www.federalregister.gov/citation/50-FR-23955), June 7, 1985]
#### § 26.204 Regauge.
Distilled spirits withdrawn from insular bonded warehouses for shipment to the United States may be gauged at the time of withdrawal by an insular gauger. When such gauges are made, a record of gauge shall be prepared by the insular gauger showing the name of the distiller; and the serial number, the proof of the spirits, and the wine and proof gallon contents of each package gauged. The report of gauge shall be attached to the certificate prescribed in [§ 26.205](/current/title-27/section-26.205).
(Approved by the Office of Management and Budget under control number 1512-0250)
\[T.D. ATF-198, [50 FR 8552](https://www.federalregister.gov/citation/50-FR-8552), Mar. 1, 1985. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38552](https://www.federalregister.gov/citation/66-FR-38552), July 25, 2001]
#### § 26.204a Verification of eligible wines and eligible flavors.
(a) Any person who, after December 1, 1990, brings into the United States from the Virgin Islands any distilled spirits on which the tax is to be paid or determined at an effective tax rate based in part on the alcohol content derived from eligible flavors or eligible wines shall, before the first tax determination at that rate, request and receive a statement of eligibility for each wine or flavor to be used in the computation of the effective tax rate.
(b) To receive a statement of eligibility, the person bringing in the distilled spirits shall submit to the TTB Alcohol and Tobacco Laboratory, 6000 Ammendale Road, Ammendale, MD 20705, the following:
(1) An 8-ounce sample of each distilled spirits, wine and flavor used in the product;
(2) A statement of composition of each flavor, listing—
(i) The name and percentage of alcohol by volume of the flavor; and
(ii) The name and quantity of each ingredient used in the manufacture of the flavor; and
(3) A statement of the kind and alcoholic content of each wine.
(Approved by the Office of Management and Budget under control number 1512-0352)
(Act of August 16, 1954, Pub. L. 591, 68A Stat. 907, as amended ([26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652)); Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended ([26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001)); Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended ([26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010)))
\[T.D. ATF-297, [55 FR 18067](https://www.federalregister.gov/citation/55-FR-18067), Apr. 30, 1990,as amended by T.D. TTB-44, [71 FR 16944](https://www.federalregister.gov/citation/71-FR-16944), Apr. 4, 2006]
#### § 26.205 Certificate.
(a) Every person bringing liquors or articles under this part into the United States from the Virgin Islands, except tourists, shall obtain a certificate in the English language from the manufacturer for each shipment showing the following information:
(1) The name and address of the consignee.
(2) The kind and brand name.
(3) The quantity thereof as follows—
(i) If distilled spirits, the proof gallons or liters and degree of proof;
(ii) If wine, the taxable grade and wine gallons;
(iii) If beer, the gallons (liquid measure) and the percentage of alcohol by volume; and
(iv) If articles, the kind, quantity, and proof of the liquors used therein.
(4) For liquors manufactured under a formula—
(i) The number and date of the approved formula;
(ii) A declaration that the liquors have been manufactured in accordance with the approved formula; and
(iii) The name and address of the person filing the formula.
(5) The name and address of the producer.
(6) For liquors and articles containing liquors produced outside of the Virgin Islands, the country of origin for each such liquor.
(7) For distilled spirits, a certification by the insular gauger as to whether they were regauged when withdrawn from the insular bonded warehouse and, if regauged, whether they were at the time of withdrawal at the proof indicated on the attached record of gauge.
(8) For distilled spirits which contain eligible wine or eligible flavors, the effective tax rate applied to the product and the elements necessary to compute the effective tax rate in accordance with [§ 26.262a](/current/title-27/section-26.262a) as follows—
(i) Proof gallons of distilled spirits (exclusive of distilled spirits derived from eligible flavors);
(ii) Wine gallons of each eligible wine and the percentage of alcohol by volume of each;
(iii) Proof gallons of distilled spirits derived from eligible flavors; and
(iv) On or after December 1, 1990, the name of the manufacturer, formula number from TTB F 5530.5 (1678) or 5150.19 and date of approval or the date of the statement of eligibility for each eligible flavor (See [§ 26.204a](/current/title-27/section-26.204a)); and
(v) After December 1, 1990, the date of the statement of eligibility for each eligible wine.
(b) The person bringing the liquors into the United States must file the information required under [§ 26.200](/current/title-27/section-26.200), in accordance with that section.
(c) The person bringing liquors into the United States from the Virgin Islands must maintain a copy of the certificate described in [paragraph (a)](/current/title-27/section-26.205#p-26.205\(a\)) of this section along with records to substantiate the information on the certificate, including information required under [§ 26.204](/current/title-27/section-26.204), in accordance with the record retention requirements of [§ 26.276](/current/title-27/section-26.276) and must make them available upon request of the appropriate TTB officer or a customs officer.
(d) For distilled spirits, natural wine, or beer withdrawn from customs custody under the provisions of [subpart Oa of this part](/current/title-27/part-26/subpart-Oa), the importer must furnish a copy of the certificate to the proprietor of the receiving distilled spirits plant, bonded wine cellar, or brewery.
(Approved by the Office of Management and Budget under control number 1513-0064)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1366, as amended ([26 U.S.C. 5232](https://www.govinfo.gov/link/uscode/26/5232)); Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended ([26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010)))
\[T.D. ATF-297, [55 FR 18067](https://www.federalregister.gov/citation/55-FR-18067), Apr. 30, 1990. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38552](https://www.federalregister.gov/citation/66-FR-38552), July 25, 2001; T.D. TTB-145, [81 FR 94201](https://www.federalregister.gov/citation/81-FR-94201), Dec. 22, 2016]
#### § 26.206 Marking packages and cases.
The distiller, rectifier, or bottler shall serially number each case, barrel, cask, or similar container of distilled spirits filled for shipment to the United States. In addition to the serial number of the container, the distiller, rectifier, or bottler shall plainly print, stamp, or stencil with durable coloring material, in letters and figures not less than one-half inch high, on the head of each barrel, cask or similar container or on one side of each case, as follows:
(a) The name of the manufacturer;
(b) The brand name and kind of liquor; and
(c) The wine and proof gallon contents; or, for bottles filed according to the metric standards of fill prescribed by [§ 5.47a](/current/title-27/section-5.47a), of this chapter, the contents in liters and the proof of the spirits.
\[T.D. ATF-43, [42 FR 30836](https://www.federalregister.gov/citation/42-FR-30836), June 17, 1977]
#### § 26.207 Destruction of marks and brands.
The marks, brands, and serial numbers required by this part to be placed on barrels, casks, or similar containers, or cases, shall not be removed, obscured or obliterated before the contents thereof have been removed.
\[T.D. ATF-198, [50 FR 8552](https://www.federalregister.gov/citation/50-FR-8552), Mar. 1, 1985]
#### § 26.208 Craft Beverage Modernization Act Tax benefits.
The procedures set forth in [27 CFR part 27, subpart P](/current/title-27/part-27/subpart-P), apply to the application of Craft Beverage Modernization Act tax benefits for products produced in and imported from the Virgin Islands and entered for consumption subject to tax, except as subpart P would be manifestly incompatible with the intent of the other regulations in this part.
\[T.D. TTB-186, [87 FR 58031](https://www.federalregister.gov/citation/87-FR-58031), Sept. 23, 2022]
#### § 26.209 Samples.
The appropriate TTB officer may require samples of liquors and articles to be submitted whenever desired for laboratory analyses in order to determine the rate of tax applicable thereto.
\[[20 FR 6077](https://www.federalregister.gov/citation/20-FR-6077), Aug. 20, 1955, as amended by T.D. 7006, [34 FR 2250](https://www.federalregister.gov/citation/34-FR-2250), Feb. 15, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
### Dealer Registration and Recordkeeping
#### § 26.210 Liquor dealer registration and recordkeeping.
Every person bringing liquors into the United States from the Virgin Islands who sells, or offers for sale, such liquors must register and keep records as a wholesale dealer in liquor or as a retail dealer in liquor in accordance with [part 31 of this chapter](/current/title-27/part-31).
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121), [5122](https://www.govinfo.gov/link/uscode/26/5122), [5123](https://www.govinfo.gov/link/uscode/26/5123), [5124](https://www.govinfo.gov/link/uscode/26/5124))
\[T.D. TTB-79, [74 FR 37406](https://www.federalregister.gov/citation/74-FR-37406), July 28, 2009]
#### § 26.211 Warehouse receipts covering distilled spirits.
The sale of warehouse receipts for distilled spirits is equivalent to the sale of distilled spirits. Accordingly, every person bringing distilled spirits into the United States from the Virgin Islands who sells, or offers for sale, warehouse receipts for distilled spirits stored in warehouses, or elsewhere, must register and keep records as a dealer in liquors at the place where the warehouse receipts are sold, or offered for sale, in accordance with [part 31 of this chapter](/current/title-27/part-31).
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121), [5122](https://www.govinfo.gov/link/uscode/26/5122), [5123](https://www.govinfo.gov/link/uscode/26/5123), [5124](https://www.govinfo.gov/link/uscode/26/5124))
\[T.D. TTB-79, [74 FR 37406](https://www.federalregister.gov/citation/74-FR-37406), July 28, 2009]
## Subpart K—Formulas for Products From the Virgin Islands
#### Source:
T.D. ATF-62, [44 FR 71715](https://www.federalregister.gov/citation/44-FR-71715), Dec. 11, 1979, unless otherwise noted.
#### § 26.220 Formulas for liquors.
(a) *Distilled spirits products.* Persons in the Virgin Islands who ship distilled spirits beverage products to the United States shall comply with the formula requirements of [part 5 of this chapter](/current/title-27/part-5). If any product contains liquors made outside of Virgin Islands, the country of origin for each such liquor shall be stated on the formula. All formulas required by this paragraph shall be submitted on TTB Form 5110.38, in accordance with [§ 26.224](/current/title-27/section-26.224).
(b) *Wine.* Persons in the Virgin Islands who ship wine to the United States shall comply with the formula requirements of [part 24 of this chapter](/current/title-27/part-24). If any wines contains liquors made outside of the Virgin Islands, the country of origin for each such liquor shall be stated on the formula. All formulas required by this paragraph shall be submitted on TTB Form 698 Supplemental, in accordance with [§ 26.224](/current/title-27/section-26.224).
\[T.D. ATF-62, [44 FR 71715](https://www.federalregister.gov/citation/44-FR-71715), Dec. 11, 1979, as amended by T.D. ATF-198, [50 FR 8552](https://www.federalregister.gov/citation/50-FR-8552), Mar. 1, 1985. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38552](https://www.federalregister.gov/citation/66-FR-38552), July 25, 2001; T.D. TTB-91, [76 FR 5479](https://www.federalregister.gov/citation/76-FR-5479), Feb. 1, 2011]
#### § 26.221 Formulas for articles, eligible articles and products manufactured with denatured spirits.
(a) *Formulas for articles and eligible articles.* Formulas for articles made with distilled spirits must show the quantity and proof of the distilled spirits used, and the percentage of alcohol by volume contained in the finished product. Formulas for articles made with beer or wine must show the kind and quantity thereof (liquid measure), and the percent of alcohol by volume of such beer or wine. Formulas and samples for eligible articles are required in accordance with [subpart F of part 17 of this chapter](/current/title-27/part-17/subpart-F).
(b) *Formulas for products manufactured with denatured spirits.* Products manufactured with denatured spirits shall be manufactured in accordance with the formula requirements of [part 20 of this chapter](/current/title-27/part-20) for similar products made in the United States.
(1) Products may be made with completely denatured alcohol for sale under brand names under [part 20 of this chapter](/current/title-27/part-20) without obtaining an approved formula. If ingredients are added in sufficient quantities to materially change the composition and character of the completely denatured alcohol, the product is not classified as completely denatured alcohol and may not be marked, branded, or sold as completely denatured alcohol.
(2) Products made with specially denatured spirits shall be made in accordance with
(i) a general-use formula approved as provided in [part 20 of this chapter](/current/title-27/part-20), or
(ii) an approved formula on Form 5150.19, or previously approved on TTB Form 1479-A or 27-B Supplemental.
(c) *Formulas required.* Formulas required by this section shall be submitted on Form 5150.19, except that formulas for eligible articles shall be submitted on Form 5154.1 (formerly 1678). Formulas shall be submitted in accordance with [§ 26.224](/current/title-27/section-26.224). Any formula for an eligible article approved on Form 5150.19 prior to October 23, 1986, shall continue to be valid until revoked or voluntarily surrendered. Any person holding such a formula is not required to submit a new formula.
(Approved by the Office of Management and Budget under control number 1512-0494)
\[T.D. ATF-62, [44 FR 71715](https://www.federalregister.gov/citation/44-FR-71715), Dec. 11, 1979, as amended by T.D. ATF-199, [50 FR 9199](https://www.federalregister.gov/citation/50-FR-9199), Mar. 6, 1985; T.D. ATF-263, [52 FR 46595](https://www.federalregister.gov/citation/52-FR-46595), Dec. 9, 1987; T.D. ATF-379, [61 FR 31427](https://www.federalregister.gov/citation/61-FR-31427), June 20, 1996. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38552](https://www.federalregister.gov/citation/66-FR-38552), July 25, 2001]
#### § 26.222 Still wines containing carbon dioxide.
(a) *General.* Still wines may contain not more than 0.392 gram of carbon dioxide per 100 milliliters of wine; except that a tolerance to this maximum limitation, not to exceed 0.009 gram of carbon dioxide per 100 milliliters of wine, will be allowed where the amount of carbon dioxide in excess of 0.392 gram per 100 milliliters of wine was due to mechanical variations which could not be completely controlled under good commercial practices. Such tolerance will not be allowed where it is found that the limitation of 0.392 gram of carbon dioxide per 100 milliliters of wine is continuously or intentionally exceeded, or where the variation results from the use of methods or equipment not in accord with good commercial practices.
(b) *Notice required.* Proprietors intending to add carbon dioxide to, or retain carbon dioxide in, still wines to be shipped to the United States shall submit a notice to the appropriate TTB officer. The notice shall show the name and address of the proprietor and shall identify the method or process, the kinds (class and type) of wine, and the type of equipment to be used. A corrected notice shall be filed if there is any change (except for minor changes) in the information contained in the notice.
(c) *Filing and disposition of notice.* The notice required by [paragraph (b)](/current/title-27/section-26.222#p-26.222\(b\)) of this section shall be submitted in triplicate to the appropriate TTB officer, who shall retain one copy, forward one copy to the Commissioner of Finance of the Virgin Islands, and return one copy to the proprietor. The proprietor shall keep the notice available for examination by insular agents.
(Approved by the Office of Management and Budget under control number 1512-0352)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1331, as amended ([26 U.S.C 5041](https://www.govinfo.gov/link/uscode/26/5041)))
\[T.D. ATF-62, [44 FR 71715](https://www.federalregister.gov/citation/44-FR-71715), Dec. 11, 1979, as amended by T.D. ATF-172, [49 FR 14943](https://www.federalregister.gov/citation/49-FR-14943), Apr. 16, 1984]
#### § 26.223 Changes of formulas.
Any change in the ingredients composing a product covered by an approved formula will necessitate the submission of a new formula.
#### § 26.224 Filing and disposition of formulas.
Formulas required by this subpart must be submitted, and disposed of, in accordance with the instructions on the prescribed TTB form. The applicant shall maintain copies of approved formulas available for examination by insular agents.
\[T.D. ATF-451, [66 FR 21670](https://www.federalregister.gov/citation/66-FR-21670), May 1, 2001]
#### § 26.225 Previously approved formulas.
Any formula approved on Form 27-B Supplemental prior to January 1, 1980, shall continue to be valid until revoked or voluntarily surrendered. Any person holding such a formula is not required to submit a new formula. If an approved formula on Form 27-B Supplemental indicates that carbon dioxide will be added to, or retained in, still wine, the notice requirement of [§ 26.222](/current/title-27/section-26.222) shall not apply.
\[T.D. ATF-62, [44 FR 71715](https://www.federalregister.gov/citation/44-FR-71715), Dec. 11, 1979. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38552](https://www.federalregister.gov/citation/66-FR-38552), July 25, 2001]
## Subpart L—Closures for Distilled Spirits From the Virgin Islands
### General
#### § 26.230 Containers of distilled spirits to bear closures.
Containers of 1 gallon (3.785 liters) or less of distilled spirits, upon which all Federal internal revenue taxes have been paid or determined under provisions of this part, shall have closures or other devices affixed in accordance with the provisions of this part.
(Sec. 454, Pub. L. 98-369, 98 Stat. 494 ([26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301)))
\[T.D. ATF-206, [50 FR 23955](https://www.federalregister.gov/citation/50-FR-23955), June 7, 1985]
#### § 26.231 Affixing closures.
Each container of distilled spirits having a capacity of one gallon (3.785 liters) or less must have a closure or other device securely affixed to the container. The closure or other device must be constructed in such a manner as to require breaking in order to gain access to the contents of the container.
(Sec. 454, Pub. L. 98-369, 98 Stat. 494 ([26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301)))
\[T.D. TTB-119, [79 FR 17033](https://www.federalregister.gov/citation/79-FR-17033), Mar. 27, 2014]
## Subpart M—Procedure at Port of Entry From the Virgin Islands
#### § 26.260 Required information.
Persons (except tourists) bringing liquors from the Virgin Islands into the United States must file with U.S. Customs and Border Protection, at the time of filing the entry or entry summary, as appropriate, the information required under [§ 26.200](/current/title-27/section-26.200), in accordance with that section, and provide any information collected by any gauge under [§ 26.204](/current/title-27/section-26.204) and any information contained in the certificate described in [§ 26.205](/current/title-27/section-26.205), upon request, in accordance with the provisions of [§§ 26.204](/current/title-27/section-26.204) and [26.205(c)](/current/title-27/section-26.205#p-26.205\(c\)).
\[T.D. TTB-145, [81 FR 94201](https://www.federalregister.gov/citation/81-FR-94201), Dec. 22, 2016]
#### § 26.261 \[Reserved]
#### § 26.262 Determination of tax on distilled spirits.
(a) If the certificate required by [§ 26.205](/current/title-27/section-26.205) covers distilled spirits, and the distilled spirits are not being transferred under [subparts O](/current/title-27/part-26/subpart-O) or [Oa of this part](/current/title-27/part-26/subpart-Oa), the tax imposed by [26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652) which provides for a tax equal to the tax imposed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001) will be collected on each proof gallon, and fractional part thereof, contained in the shipment.
(b) A credit against the tax imposed on distilled spirits by [26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652) is allowable under [26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010) on each proof gallon of alcohol derived from eligible wine or from eligible flavors which do not exceed 21⁄2 percent of the finished product on a proof gallon basis. The credit is allowable at the time the tax is payable as if it constituted a reduction in the rate of tax.
(c) Where credit against the tax is desired, the person liable for the tax shall establish an effective tax rate in accordance with [§ 26.262a](/current/title-27/section-26.262a). The effective tax rate established will be applied to each withdrawal or other disposition of the distilled spirits within the United States.
(Approved by the Office of Management and Budget under control number 1512-0352)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended ([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201)); Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended ([26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010)), Act of August 16, 1954, Pub. L. 591, 68A Stat. 907, as amended ([26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652)))
\[T.D. ATF-297, [55 FR 18068](https://www.federalregister.gov/citation/55-FR-18068), Apr. 30, 1990. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38552](https://www.federalregister.gov/citation/66-FR-38552), July 25, 2001]
#### § 26.262a Computation of effective tax rate.
(a) The proprietor shall compute the effective tax rate for distilled spirits containing eligible wine or eligible flavors as the ratio of the numerator and denominator as follows:
(1) The numerator will be the sum of:
(i) The proof gallons of all distilled spirits used in the product (exclusive of distilled spirits derived from eligible flavors), multipled by the tax rate prescribed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001);
(ii) The wine gallons of each eligible wine used in the product, multiplied by the tax rate prescribed by [26 U.S.C. 5041(b)](https://www.govinfo.gov/link/uscode/26/5041) (1), (2), or (3), as applicable; and
(iii) The proof gallons of all distilled spirits derived from eligible flavors used in the product, multiplied by the tax rate prescribed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), but only to the extent that such distilled spirits exceed 21⁄2% of the denominator prescribed in [paragraph (a)(2)](/current/title-27/section-26.262a#p-26.262a\(a\)\(2\)) of this section.
(2) The denominator will be the sum of:
(i) The proof gallons of all distilled spirits used in the product, including distilled spirits derived from eligible flavors; and
(ii) The wine gallons of each eligible wine used in the product, multiplied by twice the percentage of alcohol by volume of each, divided by 100.
(b) In determining the effective tax rate, quantities of distilled spirits, eligible wine, and eligible flavors will be expressed to the nearest tenth of a proof gallon. The effective tax rate may be rounded to as many decimal places as the proprietor deems appropriate, provided that, such rate is expressed no less exactly than the rate rounded to the nearest whole cent, and the effective tax rates for all products will be consistently expressed to the same number of decimal places. In such case, if the number is less than five it will be dropped; if it is five or over, a unit will be added.
(c) The following is an example of the use of the formula.
Batch Record
\| Distilled spirits | 2249.1 proof gallons. |
\| Eligible wine (14% alcohol by volume) | 2265.0 wine gallons. |
\| Eligible wine (19% alcohol by volume) | 1020.0 wine gallons. |
\| Eligible flavors | 100.9 proof gallons. |
[](https://img.federalregister.gov/EC05OC91.032/EC05OC91.032_original_size.png)
(Approved by the Office of Management and Budget under control number 1512-0352)
(Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended ([26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010)))
\[T.D. ATF-297, [55 FR 18068](https://www.federalregister.gov/citation/55-FR-18068), Apr. 30, 1990, as amended by T.D. ATF-307, [55 FR 52741](https://www.federalregister.gov/citation/55-FR-52741), Dec. 21, 1990]
###### Footnotes - [26.262a](/current/title-27/section-26.262a)
\[[1](#26.262a-footref-1)] Proof gallons by which distilled spirits derived from eligible flavors exceed 21⁄2% of the total proof gallons in the batch (100.9 − (21⁄2%) × 3,371.8 = 16.6).
#### § 26.263 Determination of tax on beer.
If the certificate prescribed in [§ 26.205](/current/title-27/section-26.205) covers beer, the beer tax will be collected at the rates imposed by [26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051).
(68A Stat. 611, as amended; [26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051), [7652](https://www.govinfo.gov/link/uscode/26/7652))
\[T.D. TTB-145, [81 FR 94201](https://www.federalregister.gov/citation/81-FR-94201), Dec. 22, 2016]
#### § 26.264 Determination of tax on wine.
If the certificate prescribed in [§ 26.205](/current/title-27/section-26.205) covers wine, the wine tax will be collected at the rates imposed by section 5041, Internal Revenue Code, as amended.
(68A Stat. 609, as amended; [26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041), [7652](https://www.govinfo.gov/link/uscode/26/7652))
\[[20 FR 6077](https://www.federalregister.gov/citation/20-FR-6077), Aug. 20, 1955. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and further redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38552](https://www.federalregister.gov/citation/66-FR-38552), July 25, 2001; T.D. TTB-145, [81 FR 94201](https://www.federalregister.gov/citation/81-FR-94201), Dec. 22, 2016]
#### § 26.265 Determination of tax on articles.
Where articles contain distilled spirits, the tax will be collected at the rate prescribed by [26 U.S.C. 5001(a)(1)](https://www.govinfo.gov/link/uscode/26/5001) on all alcohol contained therein, regardless of the source. Articles containing only wine and/or beer will be taxed at the rates prescribed by [26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041) and/or 5051, respectively. The quantities and kinds of liquors will be shown on the certificate prescribed in [§ 26.205](/current/title-27/section-26.205).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended ([26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5007](https://www.govinfo.gov/link/uscode/26/5007)))
\[T.D. ATF-62, [44 FR 71717](https://www.federalregister.gov/citation/44-FR-71717), Dec. 11, 1979. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38552](https://www.federalregister.gov/citation/66-FR-38552), July 25, 2001]
#### § 26.266 Tax payment.
The internal revenue tax on liquors (except spirits transferred under [subparts O](/current/title-27/part-26/subpart-O) or [Oa of this part](/current/title-27/part-26/subpart-Oa)) and articles coming into the United States from the Virgin Islands shall be paid to the district director of customs at the port of entry, as provided by customs regulations ([19 CFR chapter I](/current/title-19/chapter-I)).
\[[20 FR 6077](https://www.federalregister.gov/citation/20-FR-6077), Aug. 20, 1955, as amended by T.D. 7006, [34 FR 2249](https://www.federalregister.gov/citation/34-FR-2249), Feb. 15, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-198, [50 FR 8554](https://www.federalregister.gov/citation/50-FR-8554), Mar. 1, 1985; T.D. TTB-196, [89 FR 87943](https://www.federalregister.gov/citation/89-FR-87943), Nov. 6, 2024]
#### § 26.267 Payment of tax by electronic fund transfer.
(a) Each person bringing liquors and articles into the United States from the Virgin Islands who was liable, during a calendar year, for a gross amount equal to or exceeding five million dollars in distilled spirits taxes combining tax liabilities incurred under this [part and parts 19](/current/title-27/part-19) and [27 of this chapter](/current/title-27/part-27), a gross amount equal to or exceeding five million dollars in wine taxes combining tax liabilities incurred under this [part and parts 24](/current/title-27/part-24) and [27 of this chapter](/current/title-27/part-27), or a gross amount equal to or exceeding five million dollars in beer taxes combining tax liabilities incurred under this [part and parts 25](/current/title-27/part-25) and [27 of this chapter](/current/title-27/part-27), shall use a commercial bank in making payment by electronic fund transfer (EFT), as defined in [paragraph (c)](/current/title-27/section-26.267#p-26.267\(c\)) of this section, of such taxes during the succeeding calendar year. Payment of such taxes by cash, check, or money order is not authorized for a person bringing liquors and articles into the United States from the Virgin Islands who is required, by this section, to make remittances by EFT. For purposes of this section, the dollar amount of tax liability is to be summarized separately for distilled spirits taxes, wine taxes, or beer taxes, and is defined as the gross tax liability on all taxable withdrawals from premises in the United States and importations (including products of the same tax class brought into the United States from Puerto Rico or the Virgin Islands) during the calendar year, without regard to any drawbacks, credits, or refunds, for all premises from which such activities are conducted.
(b) For the purposes of this section, a “person” includes a controlled group of corporations, as defined in [26 U.S.C. 1563](https://www.govinfo.gov/link/uscode/26/1563), and implementing regulations in [26 CFR 1.1563-1](/current/title-26/section-1.1563-1) through [1.1563-4](/current/title-26/section-1.1563-4), except that the words “at least 80 percent” shall be replaced by the words “more than 50 percent” in each place it appears in subsection (a) of [26 U.S.C. 1563](https://www.govinfo.gov/link/uscode/26/1563), as well as in the implementing regulations. Also, the rules for a “controlled group of corporations” apply in a similar fashion to groups which include partnerships and/or sole proprietorships. If one entity maintains more than 50% control over a group consisting of corporations and one, or more, partnerships and/or sole proprietorships, all of the members of the controlled group are one person for the purpose of determining who is required to make remittances by EFT.
(c) Electronic fund transfer or EFT means any transfer of funds, as defined in [§ 26.11](/current/title-27/section-26.11), in accordance with procedures established by U.S. Customs and Border Protection (CBP).
(d) Each person who is required by this section to make remittances by EFT shall make the EFT remittance in accordance with the requirements of CBP.
(Approved by the Office of Management and Budget under Control Number 1513-0083)
\[T.D. ATF-245, [52 FR 532](https://www.federalregister.gov/citation/52-FR-532), Jan. 7, 1987, as amended by T.D. ATF-479, [67 FR 30798](https://www.federalregister.gov/citation/67-FR-30798), May 8, 2002; T.D. TTB-196, [89 FR 87944](https://www.federalregister.gov/citation/89-FR-87944), Nov. 6, 2024]
## Subpart N—Records and Reports of Liquors From the Virgin Islands
### Record and Report of Liquors Brought Into the United States
#### § 26.272 General requirements.
Except as provided in [§ 26.273](/current/title-27/section-26.273), every person, other than a tourist, bringing liquors into the United States from the Virgin Islands shall keep such records and render reports of the physical receipt and disposition of such liquors as are required to be kept by a wholesale or retail dealer, as applicable, under the provisions of [part 31 of this chapter](/current/title-27/part-31). Any importer who is responsible for release of the liquors from customs custody and who does not take physical possession of the liquors shall keep commercial records reflecting such release; such records shall identify the kind and quantity of the liquors released, the name and address of the person receiving the liquors from customs custody, and shall be filed chronologically by release dates. Records and reports will not be required under this part with respect of liquors while in customs custody.
(Approved by the Office of Management and Budget under control number 1512-0352)
(72 Stat. 1342, 1345; [26 U.S.C. 5114](https://www.govinfo.gov/link/uscode/26/5114), [5124](https://www.govinfo.gov/link/uscode/26/5124))
\[T.D. ATF-2, [37 FR 22739](https://www.federalregister.gov/citation/37-FR-22739), Oct. 21, 1972. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-172, [49 FR 14943](https://www.federalregister.gov/citation/49-FR-14943), Apr. 16, 1984. Redesignated and amended by T.D. ATF-459, [66 FR 38552](https://www.federalregister.gov/citation/66-FR-38552), July 25, 2001; T.D. TTB-25, [70 FR 19883](https://www.federalregister.gov/citation/70-FR-19883), Apr. 15, 2005]
#### § 26.273 Proprietors of taxpaid premises.
Transactions involving the bringing of liquors into the United States from the Virgin Islands by proprietors of distilled spirits plants, bonded wine cellars, and breweries in the United States qualified under the provisions of this chapter shall be recorded and reported in accordance with the regulations governing the operations of such premises in the United States.
\[T.D. 6478, [25 FR 6203](https://www.federalregister.gov/citation/25-FR-6203), July 1, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975; T.D. TTB-145, [81 FR 94201](https://www.federalregister.gov/citation/81-FR-94201), Dec. 22, 2016]
#### § 26.273a Transfer record.
(a) *Distilled spirits.* The transfer record for Virgin Islands spirits prescribed in [§ 26.301](/current/title-27/section-26.301) shall show the:
(1) Date prepared;
(2) Serial number of the transfer record, beginning with “1” each January 1;
(3) Name of the proprietor and TTB-issued IRC registry number of the plant to which consigned;
(4) Name and address of the consignor;
(5) Kind of spirits;
(6) Name of the producer;
(7) Age (in years, months and days) of the spirits;
(8) Proof of the spirits;
(9) Type and serial number of containers;
(10) Proof gallons of spirits in the shipment; and
(11) The customs entry number and amount of duty paid.
(b) *Natural wine.* The transfer record prescribed in [§ 26.301](/current/title-27/section-26.301) must identify the importer and show the following:
(1) The date prepared;
(2) The name and address of the bonded wine cellar receiving the wine from customs custody;
(3) The TTB-issued IRC registry number of the bonded wine cellar receiving the wine from customs custody;
(4) The number of containers transferred and quantity of wine in each container;
(5) The country of origin of the wine;
(6) The customs entry number and amount of duty paid;
(7) The kind of wine; and
(8) The producer.
(c) *Beer.* The transfer record prescribed in [§ 26.301](/current/title-27/section-26.301) must identify the importer and show the following:
(1) The date prepared;
(2) The name and address of the brewery receiving the beer from customs custody;
(3) The TTB-issued IRC registry number of the brewery receiving the beer from customs custody;
(4) The number of containers transferred and quantity of beer in each container;
(5) The country of origin of the beer;
(6) The customs entry number and amount of duty paid;
(7) The kind of beer; and
(8) The brewer.
(Approved by the Office of Management and Budget under control number 1513-0064)
(Sec. 807, Pub. L. 96-39, 93 Stat. 284 ([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207)))
\[T.D. TTB-145, [81 FR 94201](https://www.federalregister.gov/citation/81-FR-94201), Dec. 22, 2016]
#### § 26.273b Package gauge record.
When required in this part with respect to Virgin Islands spirits, a package gauge record shall be prepared to show:
(a) The date prepared;
(b) The related transaction record and its serial number;
(c) The producer, his name and address; and
(d) For each package, the:
(1) Package identification or serial number;
(2) Kind of spirits;
(3) Gross weight;
(4) Tare;
(5) Net weight;
(6) Proof gallons; and
(7) Proof.
(Approved by the Office of Management and Budget under control number 1512-0250)
\[T.D. ATF-198, [50 FR 8554](https://www.federalregister.gov/citation/50-FR-8554), Mar. 1, 1985]
### Filing and Retention of Records and Reports
#### § 26.275 Filing.
(a) All records and reports required by this part will be maintained separately, by transaction or reporting date, at the importer's place of business. The appropriate TTB officer may, pursuant to an application, authorize files, or an individual file, to be maintained at another business location under the control of the importer, if the alternative location does not cause undue inconvenience to appropriate TTB or customs officers desiring to examine the files or delay in the timely submission of documents.
(b) If an importer conducts wholesale operations, one legible copy of each required record of receipt and disposition shall be filed not later than one business day following the date of transaction.
(c) If an importer conducts only retail operations, either loose-leaf or book records may be maintained for the daily receipt of liquors which contain all the required information.
(d) Supporting documents, such as consignors' invoices, delivery receipts, bills or lading, etc., or exact copies of the same, may be filed in accordance with the importer's regular accounting and recordkeeping practices.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1342, as amended, 1395, as amended ([26 U.S.C. 5114](https://www.govinfo.gov/link/uscode/26/5114), [5555](https://www.govinfo.gov/link/uscode/26/5555)))
\[T.D. ATF-116, [47 FR 51573](https://www.federalregister.gov/citation/47-FR-51573), Nov. 16, 1982, as amended by T.D. ATF-451, [66 FR 21670](https://www.federalregister.gov/citation/66-FR-21670), May 1, 2001]
#### § 26.276 Retention.
All records required by this part, documents or copies of documents supporting these records (including data filed with U.S. Customs and Border Protection (CBP) pursuant to CBP requirements), and file copies of reports required by this part, must be retained for not less than three years from the date the shipment is released from customs custody into the United States, and during this period must be made available upon request of the appropriate TTB officer or a customs officer. Furthermore, the appropriate TTB officer may require these records to be kept for an additional period of not more than three years in any case where the appropriate TTB officer determines retention necessary or advisable. (For record retention periods under CBP regulations, see [19 CFR part 163](/current/title-19/part-163).) Any records, or copies thereof, containing any of the information required by this part to be prepared, wherever kept, shall also be made available for inspection and copying.
(Approved by the Office of Management and Budget under control numbers 1513-0064 and 1513-0088)
\[T.D. TTB-145, [81 FR 94202](https://www.federalregister.gov/citation/81-FR-94202), Dec. 22, 2016]
#### § 26.277 \[Reserved]
## Subpart O—Tax-Free Shipments to the United States From the Virgin Islands
#### Source:
T.D. ATF-199, [50 FR 9199](https://www.federalregister.gov/citation/50-FR-9199), Mar. 6, 1985, unless otherwise noted. Redesignated by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), July 25, 2001.
#### § 26.291 General.
(a) Industrial spirits may be shipped into the United States to the holder of a permit under [part 22 of this chapter](/current/title-27/part-22), in accordance with [§ 26.292](/current/title-27/section-26.292) through [26.294](/current/title-27/section-26.294) and regulations issued by the Governor of the Virgin Islands.
(b)
(1) Specially denatured spirits may be shipped into the United States to the holder of a permit under [part 20 of this chapter](/current/title-27/part-20), in accordance with [§§ 26.292](/current/title-27/section-26.292) through [26.294](/current/title-27/section-26.294) and regulations issued by the Governor of the Virgin Islands.
(2) Completely denatured alcohol may be shipped to anyone in the United States in accordance with [§§ 26.295](/current/title-27/section-26.295) through [26.296](/current/title-27/section-26.296) and regulations issued by the Governor of the Virgin Islands.
(3) Denatured spirits shall be denatured in accordance with [part 21 of this chapter](/current/title-27/part-21) and regulations issued by the Governor of the Virgin Islands.
(c) Products made with denatured spirits may be shipped to anyone in the United States in accordance with [§§ 26.295](/current/title-27/section-26.295) through [26.296](/current/title-27/section-26.296) and regulations issued by the Governor of the Virgin Islands. These products are also subject to the requirements of [§ 26.221 of this part](/current/title-27/part-26/section-26.221).
\[[20 FR 6077](https://www.federalregister.gov/citation/20-FR-6077), Aug. 20, 1955. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and further redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38552](https://www.federalregister.gov/citation/66-FR-38552), July 25, 2001]
### Shipment of Industrial Spirits and Specially Denatured Spirits
#### § 26.292 Consignee permit number.
If filing electronically, the importer must file with U.S. Customs and Border Protection the number associated with the consignee's permit issued under [part 20 of this chapter](/current/title-27/part-20) (for shipments of specially denatured spirits) or [part 22 of this chapter](/current/title-27/part-22) (for shipments of industrial spirits), along with the customs entry. If not filing electronically, the importer must make the permit available to the appropriate TTB officer or a customs officer upon request.
(Approved by the Office of Management and Budget under control number 1513-0064)
\[T.D. TTB-145, [81 FR 94202](https://www.federalregister.gov/citation/81-FR-94202), Dec. 22, 2016]
#### § 26.293 Marks on containers.
(a) *Industrial spirits.* The shipper shall mark or label each immediate container of industrial spirits with the following information:
(1) The name or trade name of the distiller or shipper;
(2) The words “Virgin Islands Industrial Spirits”;
(3) A package identification number as required by [subpart S of part 19 of this chapter](/current/title-27/part-19/subpart-S);
(4) The date filled;
(5) Proof; and
(6) Quantity in proof gallons.
(b) *Specially denatured spirits.* The shipper shall mark or label each immediate container of specially denatured spirits with the following information:
(1) Quantity, in gallons, or in liters and gallons;
(2) A serial number or package identification number;
(3) Name and address of shipper;
(4) The words “Virgin Islands Specially Denatured Alcohol” or “Virgin Islands Specially Denatured Rum,” as appropriate;
(5) Formula number prescribed by [part 21 of this chapter](/current/title-27/part-21);
(6) Proof, if the spirits were denatured at other than 190 proof;
(7) Denaturants used, if spirits were denatured under an approved formula authorizing a choice of denaturants; and
(8) Quantity of denaturant used, if the approved formula authorizes a choice of quantities of denaturants.
\[T.D. ATF-199, [50 FR 9199](https://www.federalregister.gov/citation/50-FR-9199), Mar. 6, 1985, as amended by T.D. TTB-92, [76 FR 9171](https://www.federalregister.gov/citation/76-FR-9171), Feb. 16, 2011]
#### § 26.294 Record of shipment.
(a) *Filing information with U.S. Customs and Border Protection.* Each person bringing industrial spirits or specially denatured spirits into the United States from the Virgin Islands, who files electronically, must file with U.S. Customs and Border Protection (CBP) the information specified in this paragraph, with the entry or entry summary, as appropriate. Any information required by this paragraph that is also required by, and filed with, CBP as part of the entry or entry summary for purposes of meeting CBP requirements will satisfy the requirements of this paragraph. In addition to the consignee's permit number or a copy of the consignee's permit as required by [§ 26.292](/current/title-27/section-26.292), the following information is required:
(1) The name and address of the consignee;
(2) The name and address of the consignor; and
(3) The total quantity shipped.
(b) *Maintaining the record of shipment.* For each shipment of industrial spirits or specially denatured spirits from the Virgin Islands to the United States, the importer shall possess and maintain a record of shipment. The record of shipment shall consist of an invoice, bill of lading, or similar document that shows the information required in [paragraph (a)](/current/title-27/section-26.294#p-26.294\(a\)) of this section, as well as the following:
(1) For each formula of specially denatured spirits, the formula number prescribed by [part 21 of this chapter](/current/title-27/part-21);
(2) For each formula of specially denatured spirits, the total quantity in liters or gallons and the serial numbers or package identification numbers of containers; and
(3) For industrial spirits, the total quantity in proof liters or proof gallons and the package identification numbers of containers.
(c) *Retaining records and making them available upon request.* The person bringing industrial spirits or specially denatured spirits into the United States from the Virgin Islands must maintain records to substantiate the information required under [paragraph (a)](/current/title-27/section-26.294#p-26.294\(a\)) of this section, and any information provided to CBP to meet CBP requirements, in accordance with the record retention requirements of [§ 26.276](/current/title-27/section-26.276). Such records also must be made available upon request of the appropriate TTB officer or a customs officer.
(Approved by the Office of Management and Budget under control number 1513-0064)
\[T.D. TTB-145, [81 FR 94202](https://www.federalregister.gov/citation/81-FR-94202), Dec. 22, 2016]
### Shipment of Completely Denatured Alcohol and Products Made With Denatured Spirits
#### § 26.295 Marks on containers.
(a) *Completely denatured alcohol.*
(1) For each immediate container of completely denatured alcohol with a capacity exceeding 1 gallon, the shipper shall mark or label on the head or side of the package or on the side of the casing, the following:
(i) The name and address of the person filling the container;
(ii) The contents in gallons;
(iii) The words “Virgin Islands Completely Denatured Alcohol”; and
(iv) The formula number prescribed by [part 21 of this chapter](/current/title-27/part-21).
(2) In addition, if the container has a capacity of 5 gallons or less, the words “Completely Denatured Alcohol” shall be in red letters on white background, and the label shall also have the words “Caution—contains poisonous ingredients” in red letters on white background.
(b) *Products made with denatured spirits.* The shipper shall mark or label each immediate container of a product made with denatured spirits with the name, trade name or brand name of the product and the name and address of the shipper.
#### § 26.296 Record of shipment.
(a) *Filing information with U.S. Customs and Border Protection.* Each person bringing completely denatured alcohol or products made with denatured spirits into the United States from the Virgin Islands, who files electronically, must file with U.S. Customs and Border Protection (CBP) the information specified in this paragraph with the entry or entry summary, as appropriate. Any information required by this paragraph that is also required by, and filed with, CBP as part of the entry or entry summary for purposes of meeting CBP requirements will satisfy the requirements of this paragraph. The following information is required:
(1) The consignor's name and address;
(2) The consignee's name and address; and
(3) The total quantity shipped.
(b) *Maintaining additional information as a record.* For each shipment of completely denatured alcohol or products made with denatured spirits from the Virgin Islands to the United States, the importer shall possess and maintain a record of shipment. The record of shipment shall consist of an invoice, bill of lading, or similar document that shows the information required under [paragraph (a)](/current/title-27/section-26.296#p-26.296\(a\)) of this section, as well as the following:
(1) The capacity and number of containers;
(2) For each formulation of completely denatured alcohol, the words “Virgin Islands Completely Denatured Alcohol” and the formula number prescribed by [part 21 of this chapter](/current/title-27/part-21); and
(3) For product made with denatured spirits, the name, trade name, or brand name of the product.
(c) *Retaining records and making them available upon request.* The person bringing completely denatured alcohol or products made with denatured spirits into the United States from the Virgin Islands must maintain records to substantiate the information required under [paragraph (a)](/current/title-27/section-26.296#p-26.296\(a\)) of this section and records as required under [paragraph (b)](/current/title-27/section-26.296#p-26.296\(b\)) of this section, and any information submitted to CBP to meet CBP requirements, in accordance with the record retention requirements of [§ 26.276](/current/title-27/section-26.276). Such records also must be made available upon request of the appropriate TTB officer or a customs officer.
(Approved by the Office of Management and Budget under control number 1513-0064)
\[T.D. TTB-145, [81 FR 94202](https://www.federalregister.gov/citation/81-FR-94202), Dec. 22, 2016]
## Subpart Oa—Shipment of Bulk Distilled Spirits From the Virgin Islands, Without Payment of Tax, for Transfer From Customs Custody to the Bonded Premises of a Distilled Spirits Plant
#### Authority:
Sec. 3, Pub. L. 90-630, 82 Stat. 1328, as amended ([26 U.S.C. 5232](https://www.govinfo.gov/link/uscode/26/5232)).
#### Source:
T.D. ATF-62, [44 FR 71717](https://www.federalregister.gov/citation/44-FR-71717), Dec. 11, 1979, unless otherwise noted.
#### § 26.300 General provisions.
(a) *Transfer of bulk distilled spirits from customs custody to bonded premises of a distilled spirits plant.* Distilled spirits brought into the United States from the Virgin Islands in bulk containers may, under the provisions of this subpart, be withdrawn by the proprietor of a distilled spirits plant from customs custody and transferred in such bulk containers or by pipeline to the bonded premises of his plant, without payment of the internal revenue tax imposed on such spirits by [26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652). Such spirits so withdrawn and transferred to a distilled spirits plant may be redistilled or denatured only if 185 degrees or more of proof, and may be withdrawn from a distilled spirits plant for any purpose authorized by [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101), in the same manner as domestic distilled spirits. Spirits transferred from customs custody to the bonded premises of a distilled spirits plant under the provisions of this subpart shall be received and stored thereat, and withdrawn or transferred therefrom, subject to the provisions of [part 19 of this chapter](/current/title-27/part-19). The person operating the bonded premises of the distilled spirits plant to which spirits are transferred under the provisions of this subpart shall become liable for the tax on distilled spirits withdrawn from customs custody under [26 U.S.C. 5232](https://www.govinfo.gov/link/uscode/26/5232), upon release of the spirits from customs custody, and the person bringing the spirits into the United States shall thereupon be relieved of his liability for such tax.
(b) *Transfer of bulk natural wine from customs custody to a bonded wine cellar.* Bulk natural wine, as defined in [§ 26.11](/current/title-27/section-26.11), brought into the United States from the Virgin Islands may, under the provisions of this subpart, be withdrawn by the proprietor of a bonded wine cellar from customs custody and transferred in bond in bulk containers to the bonded wine cellar, without payment of the internal revenue tax imposed on such wine by [26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652). Wine so withdrawn and transferred to a bonded wine cellar may be withdrawn from a bonded wine cellar for any purpose authorized by [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101), in the same manner as domestic wine. The proprietor of the bonded wine cellar to which the wine is transferred becomes liable for the tax on wine withdrawn from customs custody under [26 U.S.C. 5364](https://www.govinfo.gov/link/uscode/26/5364). Upon release of the wine from customs custody, the person bringing in the wine is relieved of the liability for the tax.
(c) *Transfer of beer from customs custody to brewery premises.* Bulk beer brought into the United States from the Virgin Islands may, under the provisions of this subpart, be withdrawn by the proprietor of a brewery from customs custody and transferred in bulk containers to the brewery premises, without payment of the internal revenue tax imposed on such beer by [26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652). Beer so withdrawn and transferred to brewery premises may be withdrawn from a brewery for any purpose authorized by [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101), in the same manner as domestic beer. The proprietor of the brewery to which the beer is transferred becomes liable for the tax on beer withdrawn from customs custody under [26 U.S.C. 5418](https://www.govinfo.gov/link/uscode/26/5418). Upon release of the beer from customs custody, the person bringing in the beer from the Virgin Islands is relieved of the liability for the tax.
\[T.D. ATF-62, [44 FR 71717](https://www.federalregister.gov/citation/44-FR-71717), Dec. 11, 1979, as amended by T.D. TTB-145, [81 FR 94203](https://www.federalregister.gov/citation/81-FR-94203), Dec. 22, 2016; T.D. TTB-159, [85 FR 33542](https://www.federalregister.gov/citation/85-FR-33542), June 2, 2020]
#### § 26.301 Record of shipment.
(a) *Preparation of records.*
(1) The importer bringing distilled spirits, natural wines, or beer into the United States from the Virgin Islands under this subpart must prepare a transfer record according to [§ 26.273a](/current/title-27/section-26.273a). A separate transfer record must be prepared for each conveyance. The importer bringing in the distilled spirits, natural wines, or beer must maintain these records and any additional records necessary to substantiate the information provided under [paragraph (b)](/current/title-27/section-26.301#p-26.301\(b\)) of this section, in accordance with the record retention requirements of [§ 26.276](/current/title-27/section-26.276), and must make them available upon request of the appropriate TTB officer or a customs officer. The importer must also provide a copy of the record to the recipient, if the recipient is not the importer.
(2) For distilled spirits, if the spirits are in packages, the person bringing the spirits into the United States must be in possession of a package gauge record for each bulk container, as provided in [§ 26.273b](/current/title-27/section-26.273b), at the time the distilled spirits are withdrawn from customs custody. The package gauge record may be prepared by the insular gauger at the time of their withdrawal from an insular bonded warehouse, as provided in [§ 26.204](/current/title-27/section-26.204), or, if not prepared by the insular gauger, the package gauge record must be prepared by the insular consignor.
(b) *Reporting information for release from customs custody.* A person bringing distilled spirits, natural wines, or beer into the United States from the Virgin Islands under this subpart, if filing electronically, must file with U.S. Customs and Border Protection (CBP) the information specified in this section at the time of filing the entry or entry summary, as appropriate, along with any other information that is required by CBP to be filed with the entry or entry summary for purposes of administering the provisions of the Internal Revenue Code and Federal Alcohol Administration Act (FAA Act). Any information required by this section that is also required by, and filed with, CBP as part of the entry or entry summary for purposes of meeting CBP requirements will satisfy the requirements of this section. Regardless of the method of filing, the importer must retain all of the information required by this section and any supporting documentation and make it available for inspection by the appropriate TTB officer or a customs officer. The following information is required:
(1) The number of the importer's basic permit issued under the FAA Act and the regulations issued pursuant to the FAA Act ([27 CFR part 1](/current/title-27/part-1)), if applicable, as required by [27 CFR 1.20](/current/title-27/section-1.20), and the importer's employer identification number (EIN) associated with that permit;
(2) The name and address of the ultimate consignee;
(3) The TTB-issued IRC registry number of the ultimate consignee;
(4) The quantity of each distilled spirit, natural wine, or beer in the shipment (in proof liters or proof gallons, for distilled spirits); and
(5) Information identifying each product for Internal Revenue Code and/or FAA Act purposes.
(c) *Maintenance of substantiating records.* The importer bringing the distilled spirits, wines, or beer into the United States must maintain records to substantiate the information required under [paragraph (b)](/current/title-27/section-26.301#p-26.301\(b\)) of this section in accordance with the record retention requirements of [§ 26.276](/current/title-27/section-26.276) and must provide them upon request of the appropriate TTB officer or a customs officer.
(Approved by the Office of Management and Budget under control number 1513-0064)
\[T.D. TTB-145, [81 FR 94203](https://www.federalregister.gov/citation/81-FR-94203), Dec. 22, 2016]
#### §§ 26.302-26.303 \[Reserved]
#### § 26.304 Bulk conveyances to be sealed.
When a shipment of distilled spirits from customs custody to the distilled spirits plant is made in a tank, tank barge, cargo container, tank car, tank truck, or similar bulk conveyance, all openings affording access to the spirits shall be sealed by the customs officer with customs seals in such manner as will prevent unauthorized removal of spirits through such openings without detection.
#### § 26.305 Receipt by consignee.
Proprietors of distilled spirits plants who receive Virgin Islands spirits under this subpart shall follow the requirements in [27 CFR part 19](/current/title-27/part-19) for spirits received by transfer in bond. However, proprietors are not required to file application on TTB Form 5100.16 to receive Virgin Islands spirits from customs custody.
\[T.D. ATF-198, [50 FR 8555](https://www.federalregister.gov/citation/50-FR-8555), Mar. 1, 1985]
## Subpart Ob—Claims for Drawback on Eligible Articles From the Virgin Islands
#### Source:
T.D. ATF-263, [52 FR 46595](https://www.federalregister.gov/citation/52-FR-46595), Dec. 9, 1987, unless otherwise noted.
#### § 26.306 Drawback of tax.
Any person who brings eligible articles into the United States from the Virgin Islands may claim drawback of the distilled spirits excise taxes paid on such articles as provided in this subpart.
#### § 26.307 Claimant registration.
Any person filing claim for drawback of tax on eligible articles brought into the United States from the Virgin Islands must register annually as a nonbeverage domestic drawback claimant. Registration will be accomplished when the claimant submits the first drawback claim for each year, along with the required supporting data for the claim, under [subpart G of part 17 of this chapter](/current/title-27/part-17/subpart-G). For purposes of registration, [subpart C of part 17 of this chapter](/current/title-27/part-17/subpart-C) shall apply as if the use and tax determination occurred in the United States at the time the article was brought into the United States, and each business location from which entry of eligible articles is caused or effected shall be treated as a place of manufacture.
\[T.D. TTB-79, [74 FR 37406](https://www.federalregister.gov/citation/74-FR-37406), July 28, 2009]
#### § 26.308 Bonds.
(a) *General.* Persons bringing eligible articles into the United States from the Virgin Islands and intending to file monthly claims for drawback under the provisions of this subpart shall obtain a bond on Form 5154.3. When the limit of liability under a bond given in less than the maximum amount has been reached, further drawback on monthly claims may be suspended until a strengthening or superseding bond in a sufficient amount has been furnished. For provisions relating to bonding requirements, [subpart E of part 17 of this chapter](/current/title-27/part-17/subpart-E) is incorporated in this part.
(b) *Approval required.* No person bringing eligible articles into the United States from the Virgin Islands may file monthly claims for drawback under the provisions of this subpart until a bond on TTB Form 5154.3 has been approved.
\[T.D. ATF-379, [61 FR 31427](https://www.federalregister.gov/citation/61-FR-31427), June 20, 1996, as amended by T.D. ATF-451, [66 FR 21670](https://www.federalregister.gov/citation/66-FR-21670), May 1, 2001]
#### § 26.309 Claims for drawback.
(a) *General.* Persons bringing eligible articles into the United States from the Virgin Islands must file claim for drawback on TTB Form 2635 (5620.8). Upon finding that the claimant has satisfied the requirements of this subpart, the appropriate TTB officer will allow the drawback at \$1 less than the rate applicable under [26 U.S.C. 7652(f)](https://www.govinfo.gov/link/uscode/26/7652). Claims for products manufactured in the Virgin Islands must be filed separately from claims filed under [part 17 of this chapter](/current/title-27/part-17) for products manufactured in the United States.
(b) *Information on claims.* The claim must set forth the following:
(1) \[Reserved]
(2) That the eligible articles brought into the United States on which drawback is claimed are fully taxpaid or tax-determined;
(3) That the eligible articles on which drawback is claimed are nonbeverage products; and
(4) That the eligible articles were manufactured in the Virgin Islands in compliance with approved formulas in accordance with [§ 26.221](/current/title-27/section-26.221).
(c) *Supporting data.* Each claim shall be accompanied by supporting data as specified in this paragraph. TTB Form 5154.2, Supporting Data for Nonbeverage Drawback Claims, may be used, or the claimant may use any suitable format that provides the following information:
(1) The claimant's employer identification number, as required by [§§ 17.31](/current/title-27/section-17.31) and [17.32 of this chapter](/current/title-27/section-17.32); and
(2) A description of each eligible article as follows:
(i) Name and type of each product;
(ii) Name and address of the manufacturer of each product;
(iii) Formula number under which each product was manufactured;
(iv) Alcohol content of each product;
(v) Quantity of each product;
(vi) Proof gallons of distilled spirits contained in each product;
(vii) Date of entry of the eligible product into the United States; and
(viii) Evidence of taxpayment of distilled spirits in accordance with [§ 26.266](/current/title-27/section-26.266).
(d) *Date of filing claim.* Quarterly claims for drawback shall be filed within the 6 months next succeeding the quarter in which the eligible products covered by the claim were brought into the United States. Monthly claims for drawback may be filed at any time after the end of the month in which the eligible products covered by the claim were brought into the United States, but must be filed not later than the close of the sixth month succeeding the quarter in which the eligible products were brought into the United States.
(Approved by the Office of Management and Budget under control number 1512-0494)
\[T.D. ATF-263, [52 FR 46595](https://www.federalregister.gov/citation/52-FR-46595), Dec. 9, 1987, as amended by T.D. ATF-271, [53 FR 17559](https://www.federalregister.gov/citation/53-FR-17559), May 17, 1988; T.D. ATF-379, [61 FR 31427](https://www.federalregister.gov/citation/61-FR-31427), June 20, 1996; T.D. ATF-451, [66 FR 21670](https://www.federalregister.gov/citation/66-FR-21670), May 1, 2001. Redesignated and amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), [38552](https://www.federalregister.gov/citation/66-FR-38552), July 25, 2001; T.D. TTB-79, [74 FR 37406](https://www.federalregister.gov/citation/74-FR-37406), July 28, 2009]
#### § 26.310 Records.
(a) *General.* Every person intending to file claim for drawback on eligible articles brought into the United States from the Virgin Islands shall keep permanent records of the data elements required by this section. Such records shall be maintained at the business premises for which the claim is filed and shall be available for inspection by any appropriate TTB officer during business hours.
(b) *Details of records.* Each person intending to claim drawback on eligible articles brought into the United States shall maintain permanent records showing the following data:
(1) The name, description, quantity, and formula number of each such article.
(2) The alcohol content of each such article.
(3) Name and address of the manufacturer and shipper, and date of entry into the United States.
(4) Evidence of taxpayment of distilled spirits in accordance with [paragraph (e)](/current/title-27/section-26.310#p-26.310\(e\)) of this section.
(c) *Form of record.* No particular form of record is prescribed, but the data required to be shown shall be readily ascertainable from the records kept by the drawback claimant.
(d) *Evidence of taxpayment of distilled spirits.* Evidence of taxpayment of eligible articles (such as Customs Forms 7501 and 7505 receipted to indicate payment of tax) shall be maintained as evidence of taxpayment to support information required to be furnished in the supporting data filed with a claim.
(e) *Retention of records.* Each drawback claimant shall retain for a period of not less than three years all records required by this subpart, all commercial invoices or shipping documents, and all bills of lading received evidencing receipt and tax determination of the spirits. In addition, a copy of each approved formula returned to the manufacturer of eligible articles shall be retained for not less than three years from the date he files his last claim for drawback under the formula. The records, forms, and formulas shall be readily available during regular business hours for examination by appropriate TTB officers.
(Approved by the Office of Management and Budget under control number 1512-0494)
\[T.D. ATF-263, [52 FR 46595](https://www.federalregister.gov/citation/52-FR-46595), Dec. 9, 1987, as amended by T.D. ATF-451, [66 FR 21669](https://www.federalregister.gov/citation/66-FR-21669), May 1, 2001]
## Subpart P—Requirements for Liquor Bottles
#### Authority:
Sec. 5301, 72 Stat. 1374; [26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301).
#### Source:
T.D. 6954, [33 FR 6818](https://www.federalregister.gov/citation/33-FR-6818), May 4, 1968, unless otherwise noted. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975.
#### § 26.311 Scope of subpart.
The provisions of this subpart shall apply only to liquor bottles having a capacity of 200 ml. or more except where expressly applied to liquor bottles of less than 200 ml. capacity.
\[T.D. 6954, [33 FR 6818](https://www.federalregister.gov/citation/33-FR-6818), May 4, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-34, [41 FR 46864](https://www.federalregister.gov/citation/41-FR-46864), Oct. 26, 1976. Redesignated by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), July 25, 2001]
#### § 26.312 Standards of fill.
Distilled spirits brought into the United States from Puerto Rico or the Virgin Islands in containers of 1 gallon (3.785 liters) or less for sale shall be in liquor bottles, including liquor bottles of less than 200 ml capacity, which conform to the applicable standards of fill provided in [§ 5.47](/current/title-27/section-5.47) or [§ 5.47a of this chapter](/current/title-27/section-5.47a). Empty liquor bottles, including liquor bottles of less than 200 ml capacity, which conform to the provisions of [subpart E of part 5](/current/title-27/part-5/subpart-E) or [part 19 of this chapter](/current/title-27/part-19), may be brought into the United States for packaging distilled spirits as provided in [part 19 of this chapter](/current/title-27/part-19).
\[T.D. ATF-34, [41 FR 46864](https://www.federalregister.gov/citation/41-FR-46864), Oct. 26, 1976, as amended by T.D. ATF-62, [44 FR 71718](https://www.federalregister.gov/citation/44-FR-71718), Dec. 11, 1979]
#### § 26.314 Distinctive liquor bottles.
(a) *Application.* Liquor bottles of distinctive shape or design, including bottles of less than 200 ml. capacity, may be brought into the United States from Puerto Rico or the Virgin Islands by an importer (filled bottles) or a bottler (empty bottles). For filled bottles, the importer shall submit TTB Form 5100.31 for approval prior to bringing such bottles into the United States. For empty bottles, the bottler shall obtain approval on TTB Form 5100.31 prior to using the bottles. The importer or bottler, as applicable, shall certify as to the total capacity of a representative sample bottle before closure (expressed in milliliters) on each copy of the form. In addition, the applicant shall affix a readily legible photograph (both front and back of the bottle) to the front of each copy of TTB Form 5100.31, along with the label(s) to be used on the bottle. The applicant shall not submit an actual bottle or an authentic model unless specifically requested to do so.
(b) *Approval.*
(1) Properly submitted TTB Forms 5100.31 to bring distinctive liquor bottles (filled) into the United States from Puerto Rico or the Virgin Islands, or, properly submitted TTB Forms 5100.31 to use distinctive liquor bottles (empty) which have been brought into the United States from Puerto Rico or the Virgin Islands, shall be approved provided such bottles are found by the appropriate TTB officer to—
(i) Meet the requirements of [27 CFR part 5](/current/title-27/part-5);
(ii) Be distinctive;
(iii) Be suitable for their intended purpose;
(iv) Not jeopardize the revenue; and
(v) Not be deceptive to the consumer.
(2) The applicant shall keep a copy of the approved TTB Form 5100.31, including an approved photograph (both front and back) of the distinctive liquor bottle, on file at his premises. If TTB Form 5100.31 is disapproved, the applicant shall be notified of the appropriate TTB officer's decision and the reasons therefor.
(Approved by the Office of Management and Budget under control number 1513-0020)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended ([26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301)))
\[T.D. ATF-114, [47 FR 43950](https://www.federalregister.gov/citation/47-FR-43950), Oct. 5, 1982, as amended by T.D. ATF-242, [51 FR 39526](https://www.federalregister.gov/citation/51-FR-39526), Oct. 29, 1986; T.D. ATF-451, [66 FR 21670](https://www.federalregister.gov/citation/66-FR-21670), May 1, 2001; T.D. TTB-145, [81 FR 94204](https://www.federalregister.gov/citation/81-FR-94204), Dec. 22, 2016]
#### § 26.315 \[Reserved]
#### § 26.316 Bottles not constituting approved containers.
The appropriate TTB officer is authorized to disapprove any bottle, including a bottle of less than 200 mL capacity, for use as a liquor bottle which he determines to be deceptive. Disapproved bottles may not be brought into the United States from the U.S. Virgin Islands or from Puerto Rico.
\[T.D.TTB-145, [81 FR 94204](https://www.federalregister.gov/citation/81-FR-94204), Dec. 22, 2016]
#### § 26.317 Bottles to be used for display purposes.
Empty liquor bottles may be brought into the United States and may be furnished to liquor dealers for display purposes, provided each bottle is marked to show that it is to be used for such purpose. Any paper strip used to seal the bottle shall be of solid color and without design or printing, except that a border or a design, formed entirely of the legend “not genuine—for display purposes only” is permissible. Records shall be kept of the receipt and disposition of such bottles, showing the names and addresses of consignees, dates of shipment, and size, quantity, and description of bottles.
#### § 26.318 Liquor bottles not eligible to be brought into the United States.
(a) *General.* Except as provided in [paragraph (b)](/current/title-27/section-26.318#p-26.318\(b\)) of this section, filled liquor bottles that do not conform to the provisions of this subpart may not be brought into the United States from Puerto Rico or the Virgin Islands.
(b) *Exception.* Upon receipt of a letterhead application, the appropriate TTB officer may, in nonrecurring cases, authorize a person to bring into the United States liquor bottles that do not conform to the provisions of this part if that TTB officer determines that the nonconformance is due to an unintentional error; the nonconforming liquor bottle is determined not to be deceptive, as provided in [§ 26.316](/current/title-27/section-26.316); and the entry of the nonconforming liquor bottle will not jeopardize the revenue. The person bringing such liquor bottles into the United States under such TTB authorization must maintain for not less than three years from the date that the liquor bottles were released from customs custody proof of that authorization and make it available upon request by the appropriate TTB officer or a customs officer.
(Approved by the Office of Management and Budget under control number 1513-0064)
\[T.D. TTB-145, [81 FR 94204](https://www.federalregister.gov/citation/81-FR-94204), Dec. 22, 2016]
#### § 26.319 Used liquor bottles.
The appropriate TTB officer may pursuant to letterhead application, authorize an importer to receive liquor bottles assembled for him as provided in [§ 31.203 of this chapter](/current/title-27/section-31.203). Used liquor bottles so received may be stored at any suitable location pending return to Puerto Rico or the Virgin Islands. Records shall be kept of the receipt and disposition of such bottles.
\[T.D. 6954, [33 FR 6818](https://www.federalregister.gov/citation/33-FR-6818), May 4, 1968, as amended by T.D. 7006, [34 FR 2250](https://www.federalregister.gov/citation/34-FR-2250), Feb. 15, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. TTB-25, [70 FR 19883](https://www.federalregister.gov/citation/70-FR-19883), Apr. 15, 2005; T.D. TTB-145, [81 FR 94204](https://www.federalregister.gov/citation/81-FR-94204), Dec. 22, 2016]
## Subpart Q—Miscellaneous Provisions
#### § 26.331 Alternate methods or procedures.
(a) *Application.* A person bringing liquors into the United States from Puerto Rico or the Virgin Islands who desires to use an alternate method or procedure in lieu of a method or procedure prescribed by this part shall file application with the appropriate TTB officer. If such person has several places of business at which he desires to use such alternate method or procedure, a separate application shall be submitted for each. Each application shall:
(1) Specify the name, address, and permit number of the person to which it relates;
(2) State the purpose for which filed; and
(3) Specifically describe the alternate method or procedure and set forth the reasons therefor.
No alternate method or procedure relating to the assessment, payment, or collection of tax shall be authorized under this paragraph.
(b) *Approval.* When an application for use of an alternate method or procedure is received, the appropriate TTB officer shall determine whether the approval thereof would unduly hinder the effective administration of this part or would result in jeopardy to the revenue. The appropriate TTB officer, may approve the alternate method or procedure if he finds that:
(1) Good cause has been shown for the use of the alternate method or procedure;
(2) The alternate method or procedure is within the purpose of, and consistent with the effect intended by, the specifically prescribed method or procedure, and affords equivalent security to the revenue; and
(3) The alternate method or procedure will not be contrary to any provision of law, and will not result in any increase in cost to the Government or hinder the effective administration of this part.
No alternate method or procedure shall be used until approval has been received from the appropriate TTB officer. Authorization for the alternate method or procedure may be withdrawn whenever in the judgment of the appropriate TTB officer, the revenue is jeopardized or the effective administration of this part is hindered by the continuation of such authorization.
(Approved by the Office of Management and Budget under control number 1513-0064)
\[T.D. ATF-2, [37 FR 22739](https://www.federalregister.gov/citation/37-FR-22739), Oct. 21, 1972. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-172, [49 FR 14943](https://www.federalregister.gov/citation/49-FR-14943), Apr. 16, 1984; T.D. TTB-145, [81 FR 94204](https://www.federalregister.gov/citation/81-FR-94204), Dec. 22, 2016]
# Part 27 — IMPORTATION OF DISTILLED SPIRITS, WINES, AND BEER
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-27
Full text of 27 CFR Part 27 — IMPORTATION OF DISTILLED SPIRITS, WINES, AND BEER. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 27—IMPORTATION OF DISTILLED SPIRITS, WINES, AND BEER
#### Authority:
[5 U.S.C. 552(a)](https://www.govinfo.gov/link/uscode/5/552), [19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c), [1202](https://www.govinfo.gov/link/uscode/19/1202); [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5007](https://www.govinfo.gov/link/uscode/26/5007), [5008](https://www.govinfo.gov/link/uscode/26/5008), [5010](https://www.govinfo.gov/link/uscode/26/5010), [5041](https://www.govinfo.gov/link/uscode/26/5041), [5051](https://www.govinfo.gov/link/uscode/26/5051), [5054](https://www.govinfo.gov/link/uscode/26/5054), [5061](https://www.govinfo.gov/link/uscode/26/5061), [5121](https://www.govinfo.gov/link/uscode/26/5121), [5122-5124](https://www.govinfo.gov/link/uscode/26/5122), [5201](https://www.govinfo.gov/link/uscode/26/5201), [5205](https://www.govinfo.gov/link/uscode/26/5205), [5207](https://www.govinfo.gov/link/uscode/26/5207), [5232](https://www.govinfo.gov/link/uscode/26/5232), [5273](https://www.govinfo.gov/link/uscode/26/5273), [5301](https://www.govinfo.gov/link/uscode/26/5301), [5313](https://www.govinfo.gov/link/uscode/26/5313), [5382](https://www.govinfo.gov/link/uscode/26/5382), [5555](https://www.govinfo.gov/link/uscode/26/5555), [6038E](https://www.govinfo.gov/link/uscode/26/6038E), [6065](https://www.govinfo.gov/link/uscode/26/6065), [6109](https://www.govinfo.gov/link/uscode/26/6109), [6302](https://www.govinfo.gov/link/uscode/26/6302), [7805](https://www.govinfo.gov/link/uscode/26/7805).
#### Source:
[20 FR 3561](https://www.federalregister.gov/citation/20-FR-3561), May 21, 1955, unless otherwise noted. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and further redesignated by T.D. ATF-479, [67 FR 30799](https://www.federalregister.gov/citation/67-FR-30799), May 8, 2002.
Cross Reference:
For regulations with respect to distilled spirits, wines, and beer arriving in the United States from Puerto Rico and the Virgin Islands, see part 26 of this subchapter.
#### Editorial Note:
Nomenclature changes to part 27 appear by T.D. ATF-474, [67 FR 11231](https://www.federalregister.gov/citation/67-FR-11231), Mar. 13, 2002, and T.D. ATF-479, [67 FR 30799](https://www.federalregister.gov/citation/67-FR-30799), May 8, 2002.
## Subpart A—Scope of Regulations
#### § 27.1 Imported distilled spirits, wines, and beer.
This part, “Importation of Distilled Spirits, Wines, and Beer”, contains procedural and substantive requirements relative to the importation of distilled spirits, wines, and beer into the United States from foreign countries including commodity taxes, permits, marking, branding, closing and labeling of containers and packages, and records and reports.
Note:
Distilled spirits, wines, and beer arriving in the United States from Puerto Rico and the Virgin Islands are governed by the provisions of [part 26 of this chapter](/current/title-27/part-26).
\[T.D. ATF-206, [50 FR 23955](https://www.federalregister.gov/citation/50-FR-23955), June 7, 1985, as amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), July 25, 2001; T.D. TTB-79, [74 FR 37406](https://www.federalregister.gov/citation/74-FR-37406), July 28, 2009]
#### § 27.2 Forms prescribed.
(a) The appropriate TTB officer is authorized to prescribe all forms required by this part, including reports, returns, and records. All of the information called for in each form shall be furnished as indicated by the headings on the form and the instructions on or pertaining to the form. In addition, information called for in each form shall be furnished as required by this part. The form will be filed in accordance with the instructions for the form.
(b) Forms prescribed by this part are available for printing through the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
([5 U.S.C. 552(a)](https://www.govinfo.gov/link/uscode/5/552) (80 Stat. 383, as amended))
\[T.D. ATF-92, [46 FR 46921](https://www.federalregister.gov/citation/46-FR-46921), Sept. 23, 1981, as amended by T.D. ATF-249, [52 FR 5963](https://www.federalregister.gov/citation/52-FR-5963), Feb. 27, 1987; T.D. ATF-372, [61 FR 20725](https://www.federalregister.gov/citation/61-FR-20725), May 8, 1996; T.D. ATF-474, [67 FR 11231](https://www.federalregister.gov/citation/67-FR-11231), Mar. 13, 2002; T.D. TTB-44, [71 FR 16946](https://www.federalregister.gov/citation/71-FR-16946), Apr. 4, 2006; T.D. TTB-196, [89 FR 87944](https://www.federalregister.gov/citation/89-FR-87944), Nov. 6, 2024]
#### § 27.3 Delegations of the Administrator.
The regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.27, Delegation of the Administrator's Authorities in [27 CFR Part 27](/current/title-27/part-27), Importation of Distilled Spirits, Wines, and Beer. You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-44, [71 FR 16946](https://www.federalregister.gov/citation/71-FR-16946), Apr. 4, 2006, as amended by T.D. TTB-196, [89 FR 87944](https://www.federalregister.gov/citation/89-FR-87944), Nov. 6, 2024]
## Subpart B—Definitions
#### § 27.11 Meaning of terms.
When used in this part and in forms prescribed under this part, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof, terms shall have the meaning ascribed in this section. Words in the plural form shall include the singular, and vice versa, and words importing the masculine gender shall include the feminine. The terms “includes” and “including” do not exclude things not enumerated which are in the same general class.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.27, Delegation of the Administrator's Authorities in [27 CFR Part 27](/current/title-27/part-27), Importation of Distilled Spirits, and Beer.
*Beer.* Beer, ale porter, stout, and other similar fermented beverages (including sake or similar products) of any name or description containing one-half of 1 percent or more of alcohol by volume, brewed or produced from malt, wholly or in part, or from any substitute therefor.
*Bonded premises—distilled spirits plant.* The premises of a distilled spirits plant, or part thereof, on which distilled spirits operations defined in [26 U.S.C. 5002](https://www.govinfo.gov/link/uscode/26/5002) are authorized to be conducted. This term includes premises described in the preceding sentence even if the distilled spirits plant proprietor, as authorized under the exemption set forth in [§ 19.151(d) of this chapter](/current/title-27/section-19.151#p-19.151\(d\)), has not provided a bond for the premises.
*Bonded wine cellar.* Premises established under [part 24 of this chapter](/current/title-27/part-24).
*Brewery.* The land and buildings described in the brewer's notice, TTB Form 5130.10, where beer is to be produced and packaged.
*Bulk container.* When used in the context of distilled spirits, the term “bulk container” means any container having a capacity larger than one wine gallon. When used in the context of wine, the term “bulk container” means any container having a capacity larger than 60 liters. When used in the context of beer, the term “bulk container” means any container having a capacity larger than one barrel of 31 gallons.
*Bulk distilled spirits.* The term “bulk distilled spirits” means distilled spirits in a container having a capacity in excess of 1 gallon.
*CFR.* The Code of Federal Regulations.
*Class 8 Customs bonded warehouse.* A class 8 customs bonded warehouse established under the provisions of the customs regulations ([19 CFR chapter I](/current/title-19/chapter-I)).
*Customs officer.* An officer of U.S. Customs and Border Protection (CBP) or any agent or other person authorized by law to perform the duties of such an officer.
*Distilled spirits or spirits.* That substance known as ethyl alcohol, ethanol, or spirits of wine, and all mixtures or dilutions thereof, from whatever source or by whatever process produced, including alcohol, whisky, brandy, gin, rum, and vodka, but not including wine as defined in this subpart.
*Distilled spirits plant.* An establishment qualified under the provisions of [part 19 of this chapter](/current/title-27/part-19) for the production, storage, or processing of spirits, or for authorized combinations of such operations.
*Effective tax rate.* The net tax rate after reduction for any credit allowable under [26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010) for wine and flavor content at which the tax imposed on distilled spirits by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001) is paid or determined.
*Eligible flavor.* A flavor which:
(1) Is of a type that is eligible for drawback of tax under [26 U.S.C. 5114](https://www.govinfo.gov/link/uscode/26/5114),
(2) Was not manufactured on the premises of a distilled spirits plant, and
(3) Was not subjected to distillation on distilled spirits plant premises such that the flavor does not remain in the finished product.
*Eligible wine.* Wine on which tax would be imposed by paragraph (1), (2), or (3) of [26 U.S.C. 5041(b)](https://www.govinfo.gov/link/uscode/26/5041) but for its removal to distilled spirits plant premises and which has not been subject to distillation at a distilled spirits plant after receipt in bond. For purposes of this definition, the phrase “receipt in bond” applies to wine on which tax has not been determined or paid that is received by the proprietor of a distilled spirits plant, even if the proprietor, as authorized under the exemption set forth in [§ 19.151(d) of this chapter](/current/title-27/section-19.151#p-19.151\(d\)), is not required to provide a bond for the premises where the wine is received.
*Gallon or wine gallon.* The liquid measure equivalent to the volume of 231 cubic inches. For purposes of this definition, the phrase “receipt in bond” applies to wine on which tax has not been determined or paid that is received by the proprietor of a distilled spirits plant, even if the proprietor, as authorized under the exemption set forth in [§ 19.151(d) of this chapter](/current/title-27/section-19.151#p-19.151\(d\)), is not required to provide a bond for the premises where the wine is received.
*Hard cider.* A wine that meets the eligibility requirements set forth in [§ 24.331](/current/title-27/section-24.331) for the hard cider tax rate set forth in [§ 24.270](/current/title-27/section-24.270).
*Importer.* Any person who imports distilled spirits, wines, or beer into the United States.
*IRC registry number.* The number assigned by TTB to each distilled spirits plant, bonded wine cellar, taxpaid wine bottling house, bonded wine warehouse, or brewery upon approval of an application made pursuant to Internal Revenue Code of 1986 requirements ([26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171), [5351-5353](https://www.govinfo.gov/link/uscode/26/5351), or [5401](https://www.govinfo.gov/link/uscode/26/5401)).
*Kind.* As applied to spirits, kind shall mean class and type as prescribed in [27 CFR part 5](/current/title-27/part-5). As applied to wines, kind shall mean the classes and types of wines as prescribed in [27 CFR part 4](/current/title-27/part-4).
*Liquor bottle.* A bottle made of glass or earthenware, or of other suitable material approved by the Food and Drug Administration, which has been designed or is intended for use as a container for distilled spirits for sale for beverage purposes and which has been determined by the appropriate TTB officer to adequately protect the revenue.
*Natural wine.* The product of the juice or must of sound, ripe grapes or other sound, ripe fruit (including berries) made with any proper cellar treatment and containing not more than 21 percent by weight (21 degrees Brix dealcoholized wine) of total solids. For purposes of this definition, “proper cellar treatment” means a production practice or procedure authorized for natural wine by [part 24 of this chapter](/current/title-27/part-24), or, in the case of natural wine produced and imported subject to an international agreement or treaty, those practices and procedures acceptable to the United States under that agreement or treaty.
*Person.* An individual, a trust, an estate, a partnership, an association, a company, or a corporation.
*Proof.* The ethyl alcohol content of a liquid at 60 degrees Fahrenheit, stated as twice the percent of ethyl alcohol by volume.
*Proof gallon.* A gallon of liquid at 60 degrees Fahrenheit which contains 50 percent by volume of ethyl alcohol having a specific gravity of 0.7939 at 60 degrees Fahrenheit referred to water at 60 degrees Fahrenheit as unity, or the alcoholic equivalent thereof.
*Proof liter.* A liter of liquid at 60 degrees Fahrenheit which contains 50 percent by volume of ethyl alcohol having a specific gravity of 0.7939 at 60 degrees Fahrenheit referred to water at 60 degrees Fahrenheit as unity or the alcoholic equivalent thereof.
*United States.* “United States” includes only the States and the District of Columbia.
*U.S.C.* The United States Code.
*Wine.*
(a) Still wine, including vermouth or other aperitif wine, artificial or imitation wines or compounds sold as still wines, champagne or sparkling wine, and artificially carbonated wine, and
(b) flavored or sweetened fortified or unfortified wines, by whatever name sold or offered for sale, containing not over 24 percent alcohol by volume.
(68A Stat. 917, as amended ([26 U.S.C. 7805](https://www.govinfo.gov/link/uscode/26/7805)); 49 Stat. 981, as amended ([27 U.S.C. 205](https://www.govinfo.gov/link/uscode/27/205)); [26 U.S.C. 7805](https://www.govinfo.gov/link/uscode/26/7805) (68A Stat. 917, as amended), and in [27 U.S.C. 205](https://www.govinfo.gov/link/uscode/27/205) (49 Stat. 981, as amended))
\[T.D. ATF-48, [43 FR 13552](https://www.federalregister.gov/citation/43-FR-13552), Mar. 31, 1978]
#### Editorial Note:
For Federal Register citations affecting [§ 27.11](/current/title-27/section-27.11), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
## Subpart C—Dealer Registration and Recordkeeping
#### Source:
T.D. TTB-79, [74 FR 37406](https://www.federalregister.gov/citation/74-FR-37406), July 28, 2009, unless otherwise noted.
#### § 27.30 Dealer registration and recordkeeping.
Importers engaged in the business of selling, or offering for sale, distilled spirits, wines, or beer are subject to the provisions of [part 31 of this chapter](/current/title-27/part-31) relating to dealer registration and records. Part 31 requires the filing of TTB Form 5630.5d with TTB, in accordance with the instructions on the form, before commencing business and on or before July 1 of each year thereafter if there have been any changes. The dealer must file an amended registration and give notice of termination in accordance with the rules of part 31.
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121), [5122](https://www.govinfo.gov/link/uscode/26/5122), [5123](https://www.govinfo.gov/link/uscode/26/5123), [5124](https://www.govinfo.gov/link/uscode/26/5124))
#### § 27.31 Warehouse receipts covering distilled spirits.
The sale of warehouse receipts for distilled spirits is equivalent to the sale of distilled spirits. Accordingly, every person engaged in business as an importer of distilled spirits who sells, or offers for sale, warehouse receipts for distilled spirits stored in customs bonded warehouses, or elsewhere, must register and keep records as a dealer in liquors at the place where the warehouse receipts are sold or offered for sale, in accordance with [part 31 of this chapter](/current/title-27/part-31).
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121), [5122](https://www.govinfo.gov/link/uscode/26/5122), [5123](https://www.govinfo.gov/link/uscode/26/5123), [5124](https://www.govinfo.gov/link/uscode/26/5124))
## Subpart D—Tax On Imported Distilled Spirits, Wines, and Beer
### Distilled Spirits
#### § 27.40 Distilled spirits.
(a) A tax is imposed on all distilled spirits in customs bonded warehouses or imported into the United States at the rate prescribed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001) on each proof gallon and a proportionate tax at a like rate on all fractional parts of each proof gallon. All products of distillation, by whatever name known, which contain distilled spirits, are considered to be distilled spirits and are taxed as such. The tax will be determined at the time of importation, or, if transferred to the bonded premises of a distilled spirits plant, at the time of withdrawal therefrom.
(b) A credit against the tax imposed on distilled spirits by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001) is allowable under [26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010) on each proof gallon of alcohol derived from eligible wine or from eligible flavors which do not exceed 21⁄2 percent of the finished product on a proof gallon basis. The credit is allowable at the time the tax is payable as if it constituted a reduction in the rate of tax.
(c) Where credit against the tax is desired, the person liable for the tax shall establish an effective tax rate in accordance with [§ 27.41](/current/title-27/section-27.41). The effective tax rate established will be applied to each entry.
(Approved by the Office of Management and Budget under control number 1512-0352)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended ([26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001)); Sec. 201, Pub. L. 85-859, 72 Stat. 1356, as amended ([26 U.S.C. 5201](https://www.govinfo.gov/link/uscode/26/5201)); Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended ([26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010)))
\[T.D. ATF-297, [55 FR 18069](https://www.federalregister.gov/citation/55-FR-18069), Apr. 30, 1990, as amended by T.D TTB-146, [82 FR 1134](https://www.federalregister.gov/citation/82-FR-1134), Jan. 4, 2017]
#### § 27.41 Computation of effective tax rate.
(a) The proprietor shall compute the effective tax rate for distilled spirits containing eligible wine or eligible flavors as the ratio of the numerator and denominator as follows:
(1) The numerator will be the sum of:
(i) The proof gallons of all distilled spirits used in the product (exclusive of distilled spirits derived from eligible flavors), multiplied by the tax rate prescribed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001);
(ii) The wine gallons of each eligible wine used in the product, multiplied by the tax rate prescribed by [26 U.S.C. 5041(b)(1)](https://www.govinfo.gov/link/uscode/26/5041), (2), or (3), as applicable; and
(iii) The proof gallons of all distilled spirits derived from eligible flavors used in the product, multiplied by the tax rate prescribed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), but only to the extent that such distilled spirits exceed 21⁄2% of the denominator prescribed in [paragraph (a)(2)](/current/title-27/section-27.41#p-27.41\(a\)\(2\)) of this section.
(2) The denominator will be the sum of:
(i) The proof gallons of all distilled spirits used in the product, including distilled spirits derived from eligible flavors; and
(ii) The wine gallons of each eligible wine used in the product, multiplied by twice the percentage of alcohol by volume of each, divided by 100.
(b) In determining the effective tax rate, quantities of distilled spirits, eligible wine, and eligible flavors will be expressed to the nearest tenth of a proof gallon. The effective tax rate may be rounded to as many decimal places as the proprietor deems appropriate, provided that, such rate is expressed no less exactly than the rate rounded to the nearest whole cent, and the effective tax rates for all products will be consistently expressed to the same number of decimal places. In such case, if the number is less than five it will be dropped; if it is five or over, a unit will be added.
(c) The following is an example of the use of the formula.
Batch Record
\| Distilled spirits | 2249.1 proof gallons. |
\| Eligible wine (14% alcohol by volume) | 2265.0 wine gallons. |
\| Eligible wine (19% alcohol by volume) | 1020.0 wine gallons. |
\| Eligible flavors | 100.9 proof gallons. |
[](https://img.federalregister.gov/EC05OC91.033/EC05OC91.033_original_size.png)
(Approved by the Office of Management and Budget under control number 1512-0352)
(Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended ([26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010)))
\[T.D. ATF-297, [55 FR 18069](https://www.federalregister.gov/citation/55-FR-18069), Apr. 30, 1990, as amended by T.D. ATF-307, [55 FR 52742](https://www.federalregister.gov/citation/55-FR-52742), Dec. 21, 1990. Redesignated by T.D. ATF-474, [67 FR 11232](https://www.federalregister.gov/citation/67-FR-11232), Mar. 13, 2002]
###### Footnotes - [27.41](/current/title-27/section-27.41)
\[[1](#27.41-footref-1)] Proof gallons by which distilled spirits derived from eligible flavors exceed 21⁄2% of the total proof gallons in the batch (100.9 − (21⁄2%) × 3.371.8 = 16.6).
### Wines
#### § 27.42 Wines.
All wines (including imitation, substandard, or artificial wine, and compounds sold as wine) having not in excess of 24 percent of alcohol by volume, in customs bonded warehouse or imported into the United States are subject to an internal revenue tax at the rates prescribed by law; such tax to be determined at the time of removal from customs custody for consumption or sale. The tax is imposed on each wine gallon and at a like rate on fractional parts of a wine gallon. Fractions of less than one-tenth gallon shall be converted to the nearest one-tenth gallon, and five-hundredths gallon shall be converted to the next full one-tenth gallon. All wines containing more than 24 percent of alcohol by volume shall be classed as distilled spirits and shall be taxed accordingly.
(72 Stat. 1331, as amended; [26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041))
\[T.D. 6644, [28 FR 3165](https://www.federalregister.gov/citation/28-FR-3165), Apr. 2, 1963. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### § 27.42a Still wines containing carbon dioxide.
Still wines may contain not more than 0.392 gram of carbon dioxide per 100 milliliters of wine; except that a tolerance to this maximum limitation, not to exceed 0.009 gram of carbon dioxide per 100 milliliters of wine, will be allowed where the amount of carbon dioxide in excess of 0.392 gram per 100 milliliters of wine was due to mechanical variations which could not be completely controlled under good commercial practices. Such tolerance will not be allowed where it is found that the limitation of 0.392 gram of carbon dioxide per 100 milliliters of wine is continuously or intentionally exceeded.
\[T.D. ATF-13, [40 FR 4419](https://www.federalregister.gov/citation/40-FR-4419), Jan. 30, 1975. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
### Liqueurs, Cordials, and Other Compounds and Preparations
#### § 27.43 Liqueurs, cordials, and similar compounds.
A tax is imposed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001) on all liqueurs, cordials, and similar compounds, containing distilled spirits, in a customs bonded warehouse or imported into the United States at the rate prescribed in such section on each proof gallon, and a proportionate tax at a like rate on all fractional parts of such proof gallon. The tax shall be determined at the time of importation, or, if transferred to the bonded premises of a distilled spirits plant, at the time of withdrawal therefrom. Fortified or unfortified wines, containing not over 24 percent alcohol by volume, to which sweetening or flavoring materials, but no distilled spirits, have been added are not classified as liqueurs, cordials, or similar compounds, but are considered to be flavored wines only and are subject to internal revenue tax at the rates applicable to wines.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1314, as amended, 1331, as amended ([26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5041](https://www.govinfo.gov/link/uscode/26/5041)))
\[T.D. ATF-62, [44 FR 71718](https://www.federalregister.gov/citation/44-FR-71718), Dec. 11, 1979, as amended by T.D. TTB-146, [82 FR 1134](https://www.federalregister.gov/citation/82-FR-1134), Jan. 4, 2017]
#### § 27.44 Other compounds and preparations.
Compounds and preparations, other than those specified in [§ 27.43](/current/title-27/section-27.43) containing distilled spirits, which are fit for beverage purposes, in customs bonded warehouse or imported into the United States are subject to internal revenue tax at the rates applicable to distilled spirits. Compounds and preparations, containing fortified or unfortified wine, but no distilled spirits, which are fit for beverage purposes and which are sold as wine, are subject to internal revenue tax at the rates applicable to wines.
(68A Stat. 595, as amended, 609, as amended; [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5041](https://www.govinfo.gov/link/uscode/26/5041))
### Beer
#### § 27.45 Rate of tax.
A tax is imposed by [26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051), on all beer imported into the United States, at the rate prescribed in such section, for every barrel containing not more than 31 gallons, and at a like rate for any other quantity or for fractional parts of a barrel. The tax on beer shall be determined at the time of importation, or, if entered into customs custody, at the time of removal from such custody.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended, 1334, as amended ([26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051), [5054](https://www.govinfo.gov/link/uscode/26/5054)))
\[T.D. 6644, [28 FR 3165](https://www.federalregister.gov/citation/28-FR-3165), Apr. 2, 1963. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55853](https://www.federalregister.gov/citation/44-FR-55853), Sept. 28, 1979]
#### § 27.46 Computation of tax.
The tax on imported beer shall be computed on the basis of the actual quantity in a container, at the rate prescribed by law.
(72 Stat. 1333, as amended; [26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051))
\[T.D. 6644, [28 FR 3165](https://www.federalregister.gov/citation/28-FR-3165). Apr. 2, 1963. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
### Collection of Internal Revenue Taxes
#### § 27.48 Imported distilled spirits, wines, and beer.
(a) *Distilled spirits, wines, and beer imported subject to tax* —
(1) *General.* Internal revenue taxes payable on imported distilled spirits, wines, and beer are collected, accounted for, and deposited as internal revenue collections by U.S. Customs and Border Protection (CBP) in accordance with CBP requirements. The tax must be paid on the basis of a return, and the customs form (including any electronic transmissions) by which the distilled spirits, wines, or beer are duty- and tax-paid to CBP will be treated as a return for purposes of this part.
(2) *Required information.* In the case of distilled spirits, wines, and beer imported into the United States subject to tax, the importer, if filing electronically, must file the information specified in this section with the entry or entry summary, as appropriate, along with any other information that is required by CBP to be filed with the entry or entry summary for purposes of determining and collecting the Federal excise tax and administering the provisions of the Internal Revenue Code and Federal Alcohol Administration Act (FAA Act). Any information required by this section that is also required by, and filed with, CBP as part of the entry or entry summary for purposes of meeting CBP requirements will satisfy the requirements of this section. For all distilled spirits, wines, and beer imported under this paragraph, the following information is required:
(i) The number of the importer's basic permit issued under the FAA Act and the regulations issued pursuant to the FAA Act ([27 CFR part 1](/current/title-27/part-1)), if applicable, as required by [27 CFR 1.20](/current/title-27/section-1.20) and [1.58](/current/title-27/section-1.58), and the importer's name, address, and employer identification number (EIN) associated with that permit;
(ii) The TTB-assigned number of the valid certificate of label approval (COLA), if applicable, as required by [27 CFR 4.40](/current/title-27/section-4.40) in the case of wine, [27 CFR 5.51](/current/title-27/section-5.51) in the case of distilled spirits, and [27 CFR 7.31](/current/title-27/section-7.31) in the case of malt beverages;
(iii) The name and address of the ultimate consignee;
(iv) The quantity of each product (for distilled spirits, in proof liters or proof gallons; for beer and wine, in gallons or liters); and
(v) Information identifying each product for Internal Revenue Code and/or FAA Act purposes, as applicable.
(b) *Distilled spirits, natural wines, and beer transferred without payment of tax to distilled spirits plants, bonded wine cellars, and breweries.* Distilled spirits, natural wine (as defined in [§ 27.11](/current/title-27/section-27.11)) and beer in bulk containers may be released from customs custody without payment of tax under the provisions of [subpart L of this part](/current/title-27/part-27/subpart-L) and thereafter removed subject to tax from distilled spirits plants, bonded wine cellars, and breweries, respectively. The tax will be collected and paid under the provisions of [part 19](/current/title-27/part-19), [24](/current/title-27/part-24) or [25 of this chapter](/current/title-27/part-25), respectively.
(c) *Entry for warehousing* —
(1) *General.* Except as provided in [paragraph (c)(2)](/current/title-27/section-27.48#p-27.48\(c\)\(2\)) of this section, in the case of an entry for warehousing (that is, products transferred directly to a customs bonded warehouse or foreign trade zone), the last day for payment of the tax shall not be later than the 14th day after the last day of the semimonthly period during which the products are removed from the first such warehouse, even if the products are removed from that customs bonded warehouse or foreign trade zone for transfer to another customs bonded warehouse or foreign trade zone.
(2) *Entry for warehousing of products destined for export.* [Paragraph (c)(1)](/current/title-27/section-27.48#p-27.48\(c\)\(1\)) of this section does not apply to any distilled spirits, wines, or beer entered for warehousing and then removed for transfer to another custom bonded warehouse or foreign trade zone that is shown to the satisfaction of the Secretary to be destined for export.
(d) *Records.* Regardless of the method of filing, the importer must maintain as a record the information required by this section, any information provided to CBP to meet CBP requirements, and any supporting documentation. These records must be maintained in accordance with the record retention requirements of [§ 27.137](/current/title-27/section-27.137), and the records must be made available upon request of the appropriate TTB officer or a customs officer.
(Approved by the Office of Management and Budget under control number 1513-0064)
([26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5054](https://www.govinfo.gov/link/uscode/26/5054), [5061](https://www.govinfo.gov/link/uscode/26/5061), [5232](https://www.govinfo.gov/link/uscode/26/5232), [5364](https://www.govinfo.gov/link/uscode/26/5364), [5418](https://www.govinfo.gov/link/uscode/26/5418))
\[T.D. TTB-145, [81 FR 94204](https://www.federalregister.gov/citation/81-FR-94204), Dec. 22, 2016, as amended by T. D. TTB-159, [85 FR 33542](https://www.federalregister.gov/citation/85-FR-33542), June 2, 2020]
#### § 27.48a Payment of tax by electronic fund transfer.
(a) Each importer who was liable, during a calendar year, for a gross amount equal to or exceeding five million dollars in distilled spirits taxes combining tax liabilities incurred under this [part and parts 19](/current/title-27/part-19) and [26 of this chapter](/current/title-27/part-26), a gross amount equal to or exceeding five million dollars in wine taxes combining tax liabilities incurred under this [part and parts 24](/current/title-27/part-24) and [26 of this chapter](/current/title-27/part-26), or a gross amount equal to or exceeding five million dollars in beer taxes combining tax liabilities incurred under this [part and parts 25](/current/title-27/part-25) and [26 of this chapter](/current/title-27/part-26), shall use a commercial bank in making payment by electronic fund transfer (EFT), as defined in [paragraph (c)](/current/title-27/section-27.48a#p-27.48a\(c\)) of this section, of such taxes during the succeeding calendar year. Payment of such taxes by cash, check, or money order is not authorized for an importer who is required, by this section, to make remittances by EFT. For purposes of this section, the dollar amount of tax liability is to be summarized separately for distilled spirits taxes, wine taxes, or beer taxes, and is defined as the gross tax liability on all taxable withdrawals from premises in the United States and importations (including products of the same tax class brought into the United States from Puerto Rico or the Virgin Islands) during the calendar year, without regard to any drawbacks, credits, or refunds, for all premises from which such activities are conducted by the taxpayer.
(b) For the purposes of this section, a taxpayer includes a controlled group of corporations, as defined in [26 U.S.C. 1563](https://www.govinfo.gov/link/uscode/26/1563), and implementing regulations in [26 CFR 1.1563-1](/current/title-26/section-1.1563-1) through [1.1563-4](/current/title-26/section-1.1563-4), except that the words “at least 80 percent” shall be replaced by the words “more than 50 percent” in each place it appears in subsection (a) of [26 U.S.C. 1563](https://www.govinfo.gov/link/uscode/26/1563), as well as in the implementing regulations. Also, the rules for a “controlled group of corporations” apply in a similar fashion to groups which include partnerships and/or sole proprietorships. If one entity maintains more than 50% control over a group consisting of corporations and one, or more, partnerships and/or sole proprietorships, all of the members of the controlled group are one taxpayer for the purpose of determining who is required to make remittances by EFT.
(c) Electronic fund transfer or EFT means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, or computer of magnetic tape, so as to order, instruct, or authorize a financial institution to either debit or credit an account, in accordance with procedures established by the U.S. Customs and Border Protection..
(d) An importer who is required by this section to make remittances by EFT shall make the EFT remittance in accordance with the requirements of the U.S. Customs and Border Protection..
(Act of August 16, 1954, 68A Stat. 775, as amended ([26 U.S.C. 6302](https://www.govinfo.gov/link/uscode/26/6302)); Sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended ([26 U.S.C. 5061](https://www.govinfo.gov/link/uscode/26/5061)))
\[T.D. ATF-245, [52 FR 533](https://www.federalregister.gov/citation/52-FR-533), Jan. 7, 1987, as amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), July 25, 2001; T.D. TTB-196, [89 FR 87944](https://www.federalregister.gov/citation/89-FR-87944), Nov. 6, 2024]
### Exemption of Certain Samples From Internal Revenue Taxes
#### § 27.49 Commercial samples of alcoholic beverages.
Samples of distilled spirits, beer, and wine, to be used in the United States by persons importing alcoholic beverages in commercial quantities, are, subject to the limitations in this section, exempt from the payment of any internal revenue tax imposed on, or by reason of, importation. This exemption applies only to samples to be used for soliciting orders for products of foreign countries. In no case shall this exemption apply to more than one sample of each alcoholic beverage product admitted during any calendar quarter for the use of each such person. No sample of beer shall contain more than 8 ounces, no sample of wine shall contain more than 4 ounces, and no sample of distilled spirits shall contain more than 2 ounces.
(76 Stat. 72; [19 U.S.C. 1202](https://www.govinfo.gov/link/uscode/19/1202))
\[T.D. 6300, [23 FR 5168](https://www.federalregister.gov/citation/23-FR-5168), July 8, 1958; T.D. ATF-2, [37 FR 22740](https://www.federalregister.gov/citation/37-FR-22740), Oct. 21, 1972. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
## Subpart E—General Requirements
### Federal Alcohol Administration Act Requirements for Importation of Distilled Spirits, Wines, and Malt Beverages
#### § 27.55 Requirements of the Federal Alcohol Administration Act.
(a) *General.* The Federal Alcohol Administration Act (FAA Act) and the regulations issued under the FAA Act ([parts 1](/current/title-27/part-1), [4](/current/title-27/part-4), [5](/current/title-27/part-5), and [7 of this chapter](/current/title-27/part-7)) provide that any person, except an agency of a State or political subdivision thereof or any officer or employee of any such agency, who imports distilled spirits, wines, or malt beverages for nonindustrial use must comply with certain permit and labeling requirements as described in this section. See [27 CFR 1.10](/current/title-27/section-1.10) for the definitions of distilled spirits, wine, and malt beverages under the FAA Act. Tourists importing distilled spirits, wines, or malt beverages into the United States for personal or other noncommercial use are not subject to the provisions of the FAA Act or regulations issued pursuant to the FAA Act ([parts 1](/current/title-27/part-1), [4](/current/title-27/part-4), [5](/current/title-27/part-5), and [7 of this chapter](/current/title-27/part-7)).
(b) *FAA Act basic permit.* Any person, except an agency of a State or a political subdivision thereof or any officer or employee of any such agency, who intends to engage in the business of importing distilled spirits, wines, or malt beverages into the United States must, prior to importing such products into the United States, obtain an importer's basic permit, in accordance with the requirements of the FAA Act and regulations issued pursuant to the FAA Act, and must file with U.S. Customs and Border Protection (CBP) the number associated with this permit with the filing of the customs entry when filing electronically as required under [27 CFR 1.58](/current/title-27/section-1.58). Also, as required under [§ 1.58 of this chapter](/current/title-27/section-1.58), if the importer is not filing electronically, the importer must have a copy of the FAA Act basic permit and make it available upon request of the appropriate TTB officer or a customs officer.
(c) *Certificate of label approval.* Any person and any agency of a State or political subdivision thereof or any officer or employee of such agency, removing for commercial purposes containers of distilled spirits, wines, or malt beverages from customs custody for consumption, when filing electronically, must provide the TTB-assigned identification number of the valid certificate of label approval (COLA) for the distilled spirits, wines, or malt beverages with the filing of the customs entry in accordance with the requirements of [27 CFR 4.40](/current/title-27/section-4.40) in the case of wine, [27 CFR 5.51](/current/title-27/section-5.51) in the case of distilled spirits, or [27 CFR 7.31](/current/title-27/section-7.31) in the case of malt beverages. Also, as required under [27 CFR 4.40](/current/title-27/section-4.40), [5.51](/current/title-27/section-5.51), and [7.31](/current/title-27/section-7.31), if the importer is not filing electronically, the importer must provide a copy of the valid COLA to CBP at time of entry.
(d) *Foreign certificates.* Every person and any agency of a State or political subdivision thereof or any officer or employee of such agency, importing for commercial purposes into the United States for consumption containers of distilled spirits or wines that require a certificate under [27 CFR 4.45](/current/title-27/section-4.45) in the case of wine or [27 CFR 5.52](/current/title-27/section-5.52) in the case of distilled spirits must be in possession of the certificate (and accompanying invoice, if applicable) at the time of release from customs custody.
(Sec. 3, 49 Stat. 978, as amended; [27 U.S.C. 203](https://www.govinfo.gov/link/uscode/27/203))
\[T.D. TTB-145, [81 FR 94205](https://www.federalregister.gov/citation/81-FR-94205), Dec. 22, 2016]
### Packaging and Marking of Distilled Spirits
#### § 27.56 Distilled spirits containers of a capacity of not more than 1 gallon.
Bottled distilled spirits imported into the United States for sale shall be bottled in liquor bottles which conform to the requirements of [subpart N of this part](/current/title-27/part-27/subpart-N) and [part 5 of this chapter](/current/title-27/part-5). Empty bottles imported for the packaging of distilled spirits shall conform to the requirements of [subpart N of this part](/current/title-27/part-27/subpart-N). (For customs requirements as to marking, see [19 CFR parts 11](/current/title-19/part-11) and [12](/current/title-19/part-12).)
\[T.D. ATF-206, [50 FR 23955](https://www.federalregister.gov/citation/50-FR-23955), June 7, 1985]
#### § 27.57 Containers in excess of 1 gallon.
Imported containers of distilled spirits in excess of 1 gallon are required to be marked in accordance with customs regulations ([19 CFR parts 11](/current/title-19/part-11) and [12](/current/title-19/part-12)).
\[[20 FR 3561](https://www.federalregister.gov/citation/20-FR-3561), May 21, 1955. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-206, [50 FR 23955](https://www.federalregister.gov/citation/50-FR-23955), June 7, 1985]
### Labeling of Distilled Spirits
#### § 27.58 Containers of 1 gallon (3.785 liters) or less.
Labels on imported containers of distilled spirits, and on containers of imported distilled spirits bottled in customs custody, for sale at retail, are required to be covered by a certificate of label approval TTB Form 5100.31 issued pursuant to [part 5 of this chapter](/current/title-27/part-5). Containers of imported distilled spirits bottled after taxpayment and withdrawal from customs custody are required to be covered by a certificate of label approval or a certificate of exemption from label approval TTB Form 5100.31 issued pursuant to [part 5 of this chapter](/current/title-27/part-5). When distilled spirits are to be labeled under a certificate of exemption from label approval, the labels affixed to containers are required to conform to the provisions of [part 19 of this chapter](/current/title-27/part-19).
\[T.D. 6954, [33 FR 6818](https://www.federalregister.gov/citation/33-FR-6818), May 4, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### Editorial Note:
For Federal Register citations affecting [§ 27.58](/current/title-27/section-27.58), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
### Marking and Labeling of Wines and Beer
#### § 27.59 Wines.
(a) *General.* All imported wines containing not less than 7 percent and not more than 24 percent of alcohol by volume are required to be packaged, marked, branded, and labeled in conformity with the Federal Alcohol Administration Act and regulations promulgated thereunder ([27 CFR part 4](/current/title-27/part-4)), prior to their removal from customs custody. Containers of imported wine bottled or packaged after taxpayment and withdrawal from customs custody are required to be covered by a certificate of label approval or a certificate of exemption from label approval on TTB Form 5100.31 issued pursuant to the Federal Alcohol Administration Act and regulations promulgated thereunder ([27 CFR part 4](/current/title-27/part-4)). Imported containers of wine are required also to be marked, branded and labeled in accordance with customs regulations ([19 CFR parts 11](/current/title-19/part-11) and [12](/current/title-19/part-12)).
(b) *Hard cider.* The container of any wine eligible for the “hard cider” tax class set forth in [§ 24.270 of this chapter](/current/title-27/section-24.270) must be labeled in accordance with the requirements applicable to wine containers removed from wine premises under [§ 24.257(a)(4) of this chapter](/current/title-27/section-24.257#p-24.257\(a\)\(4\)). (See [§ 24.331 of this chapter](/current/title-27/section-24.331) for the eligibility requirements for the hard cider tax rate).
(Approved by the Office of Management and Budget under control number 1513-0092 and 1513-0138)
\[[20 FR 3561](https://www.federalregister.gov/citation/20-FR-3561), May 21, 1955. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975 and amended by T.D. ATF-242, [51 FR 39526](https://www.federalregister.gov/citation/51-FR-39526), Oct. 29, 1986; T.D. ATF-474, [67 FR 11232](https://www.federalregister.gov/citation/67-FR-11232), Mar. 13, 2002; T.D. TTB-147, [82 FR 7666](https://www.federalregister.gov/citation/82-FR-7666), Jan. 23, 2017; [82 FR 57353](https://www.federalregister.gov/citation/82-FR-57353), Dec. 5, 2017]
#### § 27.60 Beer.
All imported beer is required to be released from customs custody in conformity with the Federal Alcohol Administration Act and regulations thereunder. The attention of all concerned is directed, in this connection, to the provisions of [27 CFR part 7](/current/title-27/part-7) relating to the labeling and advertising of malt beverages, issued under the Federal Alcohol Administration Act. Imported containers of beer are required to be marked and labeled in accordance with customs regulations ([19 CFR parts 11](/current/title-19/part-11) and [12](/current/title-19/part-12)).
\[[20 FR 3561](https://www.federalregister.gov/citation/20-FR-3561), May 21, 1955, as amended by T.D. TTB-196, [89 FR 87944](https://www.federalregister.gov/citation/89-FR-87944), Nov. 6, 2024]
### Closures for Containers of Distilled Spirits
#### § 27.61 Containers of distilled spirits to bear closures.
No person shall transport, buy, possess, or sell, or transfer any imported distilled spirits in containers of 1 gallon (3.785 liters) or less, unless the immediate container thereof has a closure or other device affixed in accordance with the provisions of this part.
(Sec. 454, Pub. L. 98-369, 98 Stat. 494 ([26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301)))
\[T.D. ATF-206, [50 FR 23955](https://www.federalregister.gov/citation/50-FR-23955), June 7, 1985]
#### § 27.62 Affixing closures.
Each container of imported distilled spirits having a capacity of one gallon (3.785 liters) or less must have a closure or other device securely affixed to the container. The closure or other device must be constructed in such a manner as to require breaking in order to gain access to the contents of the container.
(Sec. 454, Pub. L. 98-369, 98 Stat. 494 ([26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301)))
\[T.D. TTB-119, [79 FR 17033](https://www.federalregister.gov/citation/79-FR-17033), Mar. 27, 2014]
### Exemptions
#### § 27.74 Exemption from requirements pertaining to marks, bottles, and labels.
The provisions of this part relating to the labeling of containers as prescribed by [27 CFR part 5](/current/title-27/part-5) are not applicable to imported distilled spirits (a) not for sale or for any other commercial purpose whatever; (b) on which no internal revenue tax is required to be paid or determined on or before withdrawal from customs custody; (c) for use as ship stores; or (d) for personal use. Samples of distilled spirits, other than those provided for in [§§ 27.49](/current/title-27/section-27.49) and [27.75](/current/title-27/section-27.75), imported for any purpose are not exempt from the requirements pertaining to marks, bottles, and labels. Samples of wine and beer brought into the United States pursuant to [§ 27.49](/current/title-27/section-27.49) are exempt from the requirements pertaining to marks, bottles, and labels. Samples of wine and beer brought into the United States pursuant to [§ 27.49](/current/title-27/section-27.49) are exempt from the labeling requirements of [27 CFR parts 4](/current/title-27/part-4) and [7](/current/title-27/part-7), respectively. Exemptions from the requirements that imported distilled spirits, wines, and beer be marked to indicate the country of origin are set forth in customs regulations ([19 CFR part 11](/current/title-19/part-11)).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1374, as amended ([26 U.S.C. 5205](https://www.govinfo.gov/link/uscode/26/5205), [5301](https://www.govinfo.gov/link/uscode/26/5301)))
\[T.D. ATF-206, [50 FR 23956](https://www.federalregister.gov/citation/50-FR-23956), June 7, 1985]
#### § 27.75 Samples of distilled spirits, wine, and beer for quality control purposes.
Samples of distilled spirits, wine, and beer in containers of a capacity of not more than 1.75 liters, imported solely for quality control purposes (laboratory testing and analysis) and not for sale or for use in the manufacture or production of any article for sale, shall be exempt from any requirements relating to marks, bottles, labels, and standards of fill. Samples imported for quality control purposes shall not be exempt from the payment of any internal revenue tax imposed on, or by reason of, importation.
\[T.D. ATF-198, [50 FR 8557](https://www.federalregister.gov/citation/50-FR-8557), Mar. 1, 1985, as amended by T.D. ATF-206, [50 FR 23955](https://www.federalregister.gov/citation/50-FR-23955), June 7, 1985]
### Wine and Flavors Content of Distilled Spirits
#### § 27.76 Approval and certification of wine and flavors content.
(a) Any person who, after December 1, 1990, imports into the United States distilled spirits on which the tax is to be paid or determined at an effective tax rate based in whole, or in part, on the alcohol content derived from eligible wine or eligible flavors which have not been previously approved on TTB Form 5154.1 (formerly TTB Form 5530.5 and ATF Form 1678) shall, before the first tax determination at that rate, request and receive a statement of eligibility for each wine or flavor to be used in the computation of the effective tax rate.
(b) To receive a statement of eligibility, the importer shall cause to be submitted to the TTB Alcohol and Tobacco Laboratory, 6000 Ammendale Road, Ammendale, MD 20705, the following:
(1) An 8-ounce sample of each distilled spirits, wine and flavor contained in the product; and
(2) A statement of composition listing—
(i) For wine, the kind (class and type) and percentage of alcohol by volume; and
(ii) For flavors, the name and percentage of alcohol by volume, and the name and quantity of each ingredient used in the manufacture of the flavor.
(c) Each time distilled spirits containing eligible wine or eligible flavors are imported into the United States, the importer shall prepare a certificate of effective tax rate computation showing the following:
(1) Name, address, and permit number of the importer;
(2) Kind (class and type) of product;
(3) Elements necessary to compute the effective tax rate in accordance with [§ 27.41](/current/title-27/section-27.41) as follows—
(i) Proof gallons of distilled spirits (exclusive of distilled spirits derived from eligible flavors);
(ii) Wine gallons of each eligible wine and the percentage of alcohol by volume of each; and
(iii) Proof gallons of distilled spirits derived from eligible flavors;
(4) After December 1, 1990, the date of the statement of eligibility of each eligible wine and of each eligible flavor;
(5) Effective tax rate applied to the product; and
(6) Signature of the importer or other duly authorized person under the following declaration:
I declare under the penalties of perjury that this certificate of effective tax rate computation has been examined by me and, to the best of my knowledge and belief, is true, correct, and complete.
(d) At the time of filing the entry summary, the importer must have the certificate in its possession and make it available upon request of the appropriate TTB officer or a customs officer. For distilled spirits withdrawn from customs custody under the provisions of [subpart L of this part](/current/title-27/part-27/subpart-L), the importer must furnish a copy of the certificate to the proprietor of the distilled spirits plant to which the distilled spirits are transferred.
(e) The importer must maintain a copy of the certificate in accordance with the record retention requirements of [§ 27.137](/current/title-27/section-27.137) and must make it available upon request of the appropriate TTB officer or a customs officer.
(Approved by the Office of Management and Budget under control number 1513-0064)
(Sec. 6, Pub. L. 96-598, 94 Stat. 3488, as amended ([26 U.S.C. 5010](https://www.govinfo.gov/link/uscode/26/5010)))
\[T.D. ATF-297, [55 FR 18070](https://www.federalregister.gov/citation/55-FR-18070), Apr. 30, 1990, as amended by T.D. TTB-44, [71 FR 16946](https://www.federalregister.gov/citation/71-FR-16946), Apr. 4, 2006; T.D. TTB-145, [81 FR 94206](https://www.federalregister.gov/citation/81-FR-94206), Dec. 22, 2016]
#### § 27.77 Standard effective tax rate.
(a) In lieu of preparing a certificate of effective tax rate computation each time distilled spirits containing eligible wine or eligible flavors are imported as prescribed in [§ 27.76(c)](/current/title-27/section-27.76#p-27.76\(c\)), an importer may have a standard effective tax rate established based on the least quantity and the lowest alcohol content of eligible wine or eligible flavors used in the manufacture of the product.
(b) To have a standard effective tax rate established, the importer shall cause to be submitted to the TTB Alcohol and Tobacco Laboratory, 6000 Ammendale Road, Ammendale, MD 20705, the following:
(1) The samples prescribed in [§ 27.76(b)(1)](/current/title-27/section-27.76#p-27.76\(b\)\(1\)) and an 8-ounce sample of the finished product;
(2) The statement of composition prescribed in [§ 27.76(b)(2)](/current/title-27/section-27.76#p-27.76\(b\)\(2\));
(3) A statement of composition for the finished product listing the—
(i) Name of the product;
(ii) Quantity, alcohol content (percentage of alcohol by volume), and the kind (class and type) of each eligible wine or the name of each eligible flavor used in the manufacture of the product; and
(iii) Standard effective tax rate for the product computed in accordance with [§ 27.41](/current/title-27/section-27.41).
(c) Where a standard effective tax rate has been previously approved for a product, an importer, in lieu of having a standard effective tax rate established, may use that rate. An importer desiring to use a previously approved standard effective tax rate shall obtain a copy of the approval from the person to whom it was issued and, over the signature of the importer or other duly authorized person, place the following declaration:
I declare under the penalties of perjury that this approval has been examined by me and, to best of my knowledge and belief, the standard effective tax rate established for this product is applicable to all like products contained in this shipment.
(d) A standard effective tax rate may not be employed until approved by the appropriate TTB officer. At the time of filing the entry summary, the importer must have the approval in its possession and make it available upon request of the appropriate TTB officer or a customs officer. The use of a standard effective tax rate shall not relieve an importer from the payment of any tax found to be due. The appropriate TTB officer may at any time require an importer to immediately discontinue the use of a standard effective tax rate.
(e) The importer must maintain a copy of the approval in accordance with the record retention requirements of [§ 27.137](/current/title-27/section-27.137) and must make it available upon request of the appropriate TTB officer.
(f) For distilled spirits withdrawn from customs custody under the provisions of [subpart L of this part](/current/title-27/part-27/subpart-L), the importer must furnish a copy of the approval to the proprietor of the distilled spirits plant to which the distilled spirits are transferred.
(Approved by the Office of Management and Budget under control number 1513-0064)
\[T.D. ATF-297, [55 FR 18070](https://www.federalregister.gov/citation/55-FR-18070), Apr. 30, 1990; [55 FR 23635](https://www.federalregister.gov/citation/55-FR-23635), June 11, 1990; T.D. ATF-474, [67 FR 11232](https://www.federalregister.gov/citation/67-FR-11232), Mar. 13, 2002; T.D. TTB-44, [71 FR 16946](https://www.federalregister.gov/citation/71-FR-16946), Apr. 4, 2006; T.D. TTB-145, [81 FR 94206](https://www.federalregister.gov/citation/81-FR-94206), Dec. 22, 2016]
## Subparts F-G \[Reserved]
## Subpart H—Importation of Distilled Spirits In Bulk
#### § 27.120 Persons authorized to receive distilled spirits imported in bulk.
Distilled spirits imported in bulk (*i.e.*, in containers having a capacity in excess of 1 gallon (3.785 liters)) may be entered into a class 8 customs bonded warehouse for bottling, or may be withdrawn from customs custody only if entered for exportation or if withdrawn by a person to whom it is lawful to sell or otherwise dispose of distilled spirits in bulk pursuant to the Federal Alcohol Administration Act (49 Stat. 985, as amended; [27 U.S.C., 206](https://www.govinfo.gov/link/uscode/27/206)) and [subpart E of part 1 of this chapter](/current/title-27/part-1/subpart-E). The importation and disposition of distilled spirits imported in bulk shall be reported as prescribed by [§§ 27.133 to 27.134](/current/title-27/section-27.133).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1342, 1361, 1374, 1395 ([26 U.S.C. 5114](https://www.govinfo.gov/link/uscode/26/5114), [5207](https://www.govinfo.gov/link/uscode/26/5207), [5301](https://www.govinfo.gov/link/uscode/26/5301), [5555](https://www.govinfo.gov/link/uscode/26/5555)))
\[T.D. ATF-34, [41 FR 46864](https://www.federalregister.gov/citation/41-FR-46864), Oct. 26, 1976, as amended by T.D. TTB-145, [81 FR 94206](https://www.federalregister.gov/citation/81-FR-94206), Dec. 22, 2016]
#### § 27.121 Containers.
Imported distilled spirits may be bottled in either domestic or imported containers conforming to the provisions of [subpart N of this part](/current/title-27/part-27/subpart-N).
(72 Stat. 1374; [26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301))
\[T.D. 6954, [33 FR 6819](https://www.federalregister.gov/citation/33-FR-6819), May 4, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
## Subpart I—Importer's Records and Reports
#### §§ 27.130-27.132 \[Reserved]
### Record and Report of Imported Liquors
#### § 27.133 General requirements.
Except as provided in [§ 27.134](/current/title-27/section-27.134), every importer who imports distilled spirits, wines, or beer shall keep such records and render such reports of the physical receipt and disposition of such liquors as are required to be kept by a wholesale or retail dealer, as applicable, under the provision of [part 31 of this chapter](/current/title-27/part-31). Any importer who does not take physical possession of the liquors at the time of, but is responsible for, their release from customs custody shall keep commercial records reflecting such release; such records shall identify the kind and quantity of the liquors released, the name and address of the person receiving the liquors from customs custody, and the date of release, and shall be filed chronologically by release dates. Records and reports will not be required under this part with respect of liquors while in customs custody.
(Approved by the Office of Management and Budget under control number 1512-0352)
(72 Stat. 1342, 1345, 1395; [26 U.S.C. 5114](https://www.govinfo.gov/link/uscode/26/5114), [5124](https://www.govinfo.gov/link/uscode/26/5124), [5555](https://www.govinfo.gov/link/uscode/26/5555))
\[T.D. ATF-2, [37 FR 22743](https://www.federalregister.gov/citation/37-FR-22743), Oct. 21, 1972. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-172, [49 FR 14943](https://www.federalregister.gov/citation/49-FR-14943), Apr. 16, 1984; T.D. TTB-25, [70 FR 19883](https://www.federalregister.gov/citation/70-FR-19883), Apr. 15, 2005]
#### § 27.134 Proprietors of qualified premises.
Importing operations conducted by proprietors of premises qualified under the provisions of this chapter shall be recorded and reported in accordance with the regulations governing the operations of each such premises.
(72 Stat. 1342, 1361, 1395; [26 U.S.C. 5114](https://www.govinfo.gov/link/uscode/26/5114), [5207](https://www.govinfo.gov/link/uscode/26/5207), [5555](https://www.govinfo.gov/link/uscode/26/5555))
\[T.D. 6388, [24 FR 4824](https://www.federalregister.gov/citation/24-FR-4824), June 12, 1959, as amended by T.D. 6477, [25 FR 6207](https://www.federalregister.gov/citation/25-FR-6207), July 1, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
### Filing and Retention of Records and Reports
#### § 27.136 Filing.
(a) All records and reports required by this part will be maintained separately, by transaction or reporting date, at the importer's place of business. The appropriate TTB officer may, pursuant to an application, authorize files, or an individual file, to be maintained at another business location under the control of the importer, if the alternative location does not cause undue inconvenience to appropriate TTB officers desiring to examine the files or delay in the timely submission of documents, and are not inconsistent with customs recordkeeping requirements (See [19 CFR part 163](/current/title-19/part-163)).
(b) If an importer conducts wholesale operations, one legible copy of each required record of receipt and disposition shall be filed not later than one business day following the date of transaction.
(c) If an importer conducts only retail operations, they may maintain either loose-leaf or book records of the daily receipt of liquors which contain all the required information.
(d) Supporting documents, such as consignors' invoices, delivery receipts, bills of lading, etc., or exact copies of the same, may be filed in accordance with the importer's regular accounting and recordkeeping practices.
(Approved by the Office of Management and Budget under control number 1512-0352)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1342, as amended, 1395, as amended ([26 U.S.C. 5114](https://www.govinfo.gov/link/uscode/26/5114), [5555](https://www.govinfo.gov/link/uscode/26/5555)))
\[T.D. ATF-116, [47 FR 51573](https://www.federalregister.gov/citation/47-FR-51573), Nov. 16, 1982, as amended by T.D. ATF-172, [49 FR 14943](https://www.federalregister.gov/citation/49-FR-14943), Apr. 16, 1984; T.D. ATF-474, [67 FR 11232](https://www.federalregister.gov/citation/67-FR-11232), Mar. 13, 2002]
#### § 27.137 Retention.
All records required by this part, documents or copies of documents supporting these records (including data filed with U.S. Customs and Border Protection (CBP) pursuant to CBP requirements), and file copies of reports required by this part, must be retained for not less than three years following each withdrawal from customs custody, and during this period must be made available upon request of the appropriate TTB officer or a customs officer. Furthermore, the appropriate TTB officer may require these records to be kept for an additional period of not more than three years in any case where the appropriate TTB officer determines retention necessary or advisable. (For record retention periods under CBP regulations, see [19 CFR part 163](/current/title-19/part-163).) Any records, or copies thereof, containing any of the information required by this part to be prepared, wherever kept, shall also be made available for inspection and copying.
(Approved by the Office of Management and Budget under control number 1513-0064 and 1513-0088)
\[T.D. TTB-145, [81 FR 94206](https://www.federalregister.gov/citation/81-FR-94206), Dec. 22, 2016]
### Other Records
#### § 27.138 Transfer record.
(a) *Distilled spirits.* The transfer record prescribed in [§ 27.172](/current/title-27/section-27.172) must identify the importer and show the following:
(1) The date prepared;
(2) Serial number of the transfer record, beginning with “1” each January 1;
(3) The name, address, and TTB-issued IRC registry number (distilled spirits plant number) of the proprietor receiving the spirits from customs custody;
(4) The country of origin of the distilled spirits;
(5) The name of the foreign producer;
(6) The kind of spirits;
(7) The age, in years, months and days of the spirits;
(8) The proof of the spirits;
(9) The type and number of containers;
(10) The proof gallons of spirits in the shipment; and
(11) The customs entry number and the amount of duty paid.
(b) *Wine.* The transfer record prescribed in [§ 27.172](/current/title-27/section-27.172) must identify the importer and show the following:
(1) The date prepared;
(2) The name and address of the bonded wine cellar receiving the wine from customs custody;
(3) The TTB-issued IRC registry number of the bonded wine cellar receiving the wine from customs custody;
(4) The number of containers transferred and quantity of wine in each container;
(5) The country of origin of the wine;
(6) The customs entry number and amount of duty paid;
(7) The kind of wine; and
(8) The foreign producer.
(c) *Beer.* The transfer record prescribed in [§ 27.172](/current/title-27/section-27.172) must identify the importer and show the following:
(1) The date prepared;
(2) The name and address of the brewery receiving the beer from customs custody;
(3) The TTB-issued IRC registry number of the brewery receiving the beer from customs custody;
(4) The number of containers transferred and quantity of beer in each container;
(5) The country of origin of the beer;
(6) The customs entry number and the amount of duty paid;
(7) The kind of beer; and
(8) The foreign brewer.
(Approved by the Office of Management and Budget under control number 1513-0064)
\[T.D. TTB-145, [81 FR 94206](https://www.federalregister.gov/citation/81-FR-94206), Dec. 22, 2016]
#### § 27.139 Package gauge record.
When required in this part, a package gauge record shall be prepared to show:
(a) The date prepared;
(b) The related transaction record and its serial number; and
(c) For each package:
(1) Package identification or serial number;
(2) Kind of spirits;
(3) Gross weight;
(4) Proof;
(5) Proof gallons;
(6) Name of warehouseman who received the spirits from customs custody; and
(7) Name of importer.
(Approved by the Office of Management and Budget under control number 1512-0250)
\[T.D. ATF-198, [50 FR 8558](https://www.federalregister.gov/citation/50-FR-8558), Mar. 1, 1985]
#### § 27.140 Certification requirements for wine.
(a) *Definitions.* When used in this section, the following terms have the meaning indicated:
*Affiliate* means any one of two or more persons if one of such persons has actual or legal control, directly or indirectly, whether by stock ownership or otherwise, of the other or others of such persons, and includes a winery's parent or subsidiary or any other entity in which the winery's parent or subsidiary has a controlling ownership interest. An affiliate also means any one of two or more persons subject to common control, actual or legal, directly or indirectly, whether by stock ownership or otherwise.
*Produced* , when used with reference to wine, means removed from the fermenter.
*Proper cellar treatment* means a production practice or procedure authorized for natural wine by [part 24 of this chapter](/current/title-27/part-24), or, in the case of natural wine produced and imported subject to an international agreement or treaty, those practices and procedures acceptable to the United States under that agreement or treaty.
(b) *Certification* —
(1) *General.* Except as otherwise provided in [paragraph (b)(2)](/current/title-27/section-27.140#p-27.140\(b\)\(2\)) of this section, an importer of natural wine must have an original or copy of a certification from the producing country stating that the practices and procedures used to produce the imported wine constitute proper cellar treatment. The importer of bottled wine must be in possession of the certificate at the time of filing the entry with CBP, and the bottler of bulk wine must be in possession of the certificate at the time the wine is withdrawn from the premises where bottled. The importer or bottler, as appropriate, must provide the certificate upon request by the appropriate TTB officer or a customs officer. This requirement may be satisfied by providing the original certification, or a photocopy or electronic copy of the certification. The appropriate TTB officer or a customs officer may request, and the importer or bottler must provide, such information for a period of three years from the date that the product covered by the certificate was released from customs custody or removed from the bottler's premises, as applicable. The certification:
(i) Must be from a governmental or government-approved entity having oversight or control over enological practices in the producing country under the laws of that country;
(ii) Must include the results of a laboratory analysis of the wine conducted either by a government laboratory of the producing country or by a laboratory certified by the government of the producing country; and
(iii) Must be in the possession of the importer at the time of release of the wine from customs custody and may cover multiple importations provided that the wine in each case is of the same brand and class or type, was made by the same producer, was subjected to the same cellar treatment, and conforms to the statements made on the certification.
(2) *Alternative certifications and exemptions* —
(i) The following are alternatives to the producing country certification and laboratory analysis requirement described in [paragraph (b)(1)](/current/title-27/section-27.140#p-27.140\(b\)\(1\)) of this section:
(A) In the case of natural wine produced and imported subject to an international agreement or treaty specifying that the practices and procedures used to produce the wine are acceptable to the United States, no producing country certification and laboratory analysis is required, unless that international agreement or treaty requires a certification, in which case the importer must have in his or her possession at the time of release of the wine from customs custody an original or copy of that certification.
(B) If an importer of natural wine or its affiliate owns or controls a winery operating under a basic permit issued under [part 1 of this chapter](/current/title-27/part-1), in lieu of a producing country certification and laboratory analysis, the importer may self-certify that the practices and procedures used to produce the wine constitute proper cellar treatment. The self-certification must be either in the format set forth in [paragraph (c)](/current/title-27/section-27.140#p-27.140\(c\)) of this section with blocks 1 through 4 completed or in an alternative format that sets forth the same information, and it must be in the possession of the importer at the time of release of the wine from customs custody. In the case of self-certification the importer also must have at the time of release from customs custody records to establish that the requirements for self-certification are met.
(ii) The following are exempt from any certification requirement under this section:
(A) Natural wine produced before January 1, 2005. However, in this case, the importer must have in his or her possession at the time of release of the wine from customs custody records to establish that the wine was produced before January 1, 2005.
(B) Importations of natural wine that are of a personal, non-commercial nature. Examples of non-commercial importations include importations by travelers, gift shipments between individuals, and importations by diplomats for embassy or consular use.
(C) Importations of natural wine that constitute commercial samples. Commercial samples include sales samples, samples for trade shows, and samples for laboratory analysis.
(D) Imported natural wine held on board international passenger carriers, such as cruise ships or airliners.
(c) *Form.* The format for certification referred to in [paragraph (b)](/current/title-27/section-27.140#p-27.140\(b\)) of this section is the following:
[](https://img.federalregister.gov/ER24AU05.000/ER24AU05.000_original_size.png)
(d) *Preparation of Certification.* The following rules apply for the completion of the certification set forth in [paragraph (c)](/current/title-27/section-27.140#p-27.140\(c\)) of this section:
(1) Block 1 must state the legal name and address (including country) of the producer of the wine.
(2) Block 2 must include a complete description of the wine, including its brand name, year of production, class or type, and country of origin.
(3) The importer must check the applicable box in block 3:
(i) The importer must check box 3a and ensure that blocks 4 and 5 are completed if no alternative certification applies to the wine under [paragraph (b)(2)(i)](/current/title-27/section-27.140#p-27.140\(b\)\(2\)\(i\)) of this section.
(ii) If paragraph (b)(2)(i)(B) applies to the wine, the importer must check box 3b and complete the certification in block 4.
(4) If the certification is submitted subsequent to approval of a label, the importer must complete block 6 by including the TTB identification number from the certificate of label approval, TTB Form 5100.31.
(Approved by the Office of Management and Budget under control numbers 1513-0064 and 1513-0119)
\[T.D. TTB-31, [70 FR 49483](https://www.federalregister.gov/citation/70-FR-49483), Aug. 24, 2005, as amended by T.D. TTB-145, [81 FR 94206](https://www.federalregister.gov/citation/81-FR-94206), Dec. 22, 2016]
## Subparts J-K \[Reserved]
## Subpart L—Transfer of Distilled Spirits, Natural Wines, and Beer Without Payment of Tax, From Customs Custody to Distilled Spirits Plants, Bonded Wine Cellars, and Breweries
#### § 27.171 General provisions.
(a) *Transfer of bulk distilled spirits from customs custody to bonded premises of a distilled spirits plant.* Imported distilled spirits in bulk containers may, under the provisions of this subpart, be withdrawn by the proprietor of a distilled spirits plant from customs custody and transferred in such bulk containers or by pipeline to the bonded premises of their plant, without payment of the internal revenue tax imposed on imported spirits by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001). Imported spirits so withdrawn and transferred to a distilled spirits plant may be redistilled or denatured only if of 185 degrees or more of proof, and may be withdrawn from the bonded premises of a distilled spirits plant for any purpose authorized by [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101), in the same manner as domestic distilled spirits. Imported distilled spirits transferred from customs custody to the bonded premises of a distilled spirits plant under the provisions of this subpart shall be received and stored thereat, and withdrawn or transferred therefrom, subject to the applicable provisions of [27 CFR part 19](/current/title-27/part-19). However, distilled spirits plant proprietors are not required to file application on TTB Form 5100.16 to receive imported spirits from customs custody. The person operating the bonded premises of the distilled spirits plant to which imported spirits are transferred shall become liable for the tax on distilled spirits withdrawn from customs custody under [26 U.S.C. 5232](https://www.govinfo.gov/link/uscode/26/5232), upon release of the spirits from customs custody, and the importer shall thereupon be relieved of their liability for such tax.
(b) *Transfer of bulk natural wine from customs custody to a bonded wine cellar.* Imported “natural wine,” as defined in [§ 27.11](/current/title-27/section-27.11), may, under the provisions of this subpart, be withdrawn in bulk by the proprietor of a bonded wine cellar from customs custody and transferred in bulk containers to the bonded wine cellar without payment of the internal revenue tax imposed on wine by [26 U.S.C. 5041](https://www.govinfo.gov/link/uscode/26/5041). Imported wine so withdrawn and transferred may be withdrawn from a bonded wine cellar for any purpose authorized by [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101), in the same manner as domestic wine. The proprietor of the bonded wine premises to which imported wine is transferred becomes liable for the tax on wine withdrawn from customs custody under [26 U.S. C. 5364](https://www.govinfo.gov/link/uscode/26/5364). Upon release of the wine from customs custody, the importer is relieved of the liability for the tax.
(c) *Transfer of beer from customs custody to a brewery.* Imported bulk beer may, under the provisions of this subpart, be withdrawn by the proprietor of a bonded brewery from customs custody and transferred in bulk containers to brewery premises, without payment of the internal revenue tax imposed on beer by [26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051). Imported beer so withdrawn and transferred to bonded brewery premises may be withdrawn from a brewery's the premises of a distilled spirits plant for any purpose authorized by [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101), in the same manner as domestic beer. The proprietor operating the bonded brewery premises to which imported beer is transferred becomes liable for the tax on beer withdrawn from customs custody under [26 U.S.C. 5418](https://www.govinfo.gov/link/uscode/26/5418). Upon release of the beer from customs custody, the importer is relieved of the liability for the tax.
([26 U.S.C. 5232](https://www.govinfo.gov/link/uscode/26/5232), [5364](https://www.govinfo.gov/link/uscode/26/5364), and [5418](https://www.govinfo.gov/link/uscode/26/5418))
\[T.D. ATF-62, [44 FR 71719](https://www.federalregister.gov/citation/44-FR-71719), Dec. 11, 1979, as amended by T.D. ATF-198, [50 FR 8558](https://www.federalregister.gov/citation/50-FR-8558), Mar. 1, 1985; T.D. TTB-145, [81 FR 94207](https://www.federalregister.gov/citation/81-FR-94207), Dec. 22, 2016; T.D. TTB-146, [82 FR 1134](https://www.federalregister.gov/citation/82-FR-1134), Jan. 4, 2017; T.D.TTB-159, [85 FR 33542](https://www.federalregister.gov/citation/85-FR-33542), June 2, 2020; T.D. TTB-196, [89 FR 87944](https://www.federalregister.gov/citation/89-FR-87944), Nov. 6, 2024]
#### § 27.172 Preparation of records and reporting of information for release of distilled spirits, natural wines, and beer without payment of tax.
(a) *Preparation of records.*
(1) The person importing distilled spirits, natural wines, or beer under this subpart must prepare a transfer record according to [§ 27.138](/current/title-27/section-27.138). A separate transfer record must be prepared for each conveyance. The importer must maintain these records and any records to substantiate the information required under [paragraph (b)](/current/title-27/section-27.172#p-27.172\(b\)) of this section, in accordance with the record retention requirements of [§ 27.137](/current/title-27/section-27.137), and must make them available upon request of the appropriate TTB officer or a customs officer. The importer must also provide a copy of the record to the recipient, if the recipient is not the importer.
(2) For distilled spirits, if the spirits are in packages, the importer must prepare a package gauge record according to [§ 27.139](/current/title-27/section-27.139) and maintain it with the transfer record.
(b) *Reporting information for release from customs custody.* In the case of distilled spirits, natural wines, and beer imported into the United States without payment of tax under this subpart, the importer, if filing electronically, must file with U.S. Customs and Border Protection (CBP) the information specified in this section at the time of filing the entry or entry summary, as appropriate, along with any other information that is required by CBP to be filed with the entry or entry summary for purposes of administering the provisions of the Internal Revenue Code and Federal Alcohol Administration Act (FAA Act). Any information required by this section that is also required by, and filed with, CBP as part of the entry or entry summary for purposes of meeting CBP requirements will satisfy the requirements of this section. Regardless of the method of filing, the importer must retain as a record the information required by this section, any information provided to CBP to meet CBP requirements, and any supporting documentation and make such records available for inspection by the appropriate TTB officer or a customs officer. The following information is required:
(1) The number of the importer's basic permit issued under the FAA Act and the regulations issued pursuant to the FAA Act ([27 CFR part 1](/current/title-27/part-1)), if applicable, as required by [27 CFR 1.20](/current/title-27/section-1.20), and the importer's employer identification number (EIN) associated with that permit;
(2) The name and address of the ultimate consignee;
(3) The TTB-issued IRC registry number of the ultimate consignee;
(4) The quantity of each distilled spirit, wine, or beer in the shipment (in proof liters or proof gallons, for distilled spirits); and
(5) Information identifying each product for Internal Revenue Code and/or FAA Act purposes.
(Approved by the Office of Management and Budget under control number 1513-0064)
\[T.D. TTB-145, [81 FR 94207](https://www.federalregister.gov/citation/81-FR-94207), Dec. 22, 2016]
#### § 27.173 \[Reserved]
#### § 27.174 Tank cars and tank trucks to be sealed.
Where a shipment of distilled spirits from customs custody to the distilled spirits plant is made in a tank car or tank truck, all openings affording access to the spirits shall be sealed by the customs officer with customs seals in such manner as will prevent unauthorized removal of spirits through such openings without detection.
(72 Stat. 1314, 1322, 1366; [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5007](https://www.govinfo.gov/link/uscode/26/5007), [5232](https://www.govinfo.gov/link/uscode/26/5232))
\[T.D. 6477, [25 FR 6208](https://www.federalregister.gov/citation/25-FR-6208), July 1, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### § 27.175 Receipt of distilled spirits by consignee.
Proprietors of distilled spirits plants who receive imported spirits under this subpart shall follow the requirements in [27 CFR part 19](/current/title-27/part-19) for spirits received by transfer in bond. Proprietors of distilled spirits plants may receive such imported spirits even if they are exempt from bond requirements under [§ 19.151(d) of this chapter](/current/title-27/section-19.151#p-19.151\(d\)). However, proprietors are not required to file application on TTB Form 5100.16 to receive imported spirits from customs custody.
\[T.D. ATF-198, [50 FR 8558](https://www.federalregister.gov/citation/50-FR-8558), Mar. 1, 1985, as amended by T.D. TTB-145, [81 FR 94207](https://www.federalregister.gov/citation/81-FR-94207), Dec. 22, 2016; T.D. TTB-146, [82 FR 1134](https://www.federalregister.gov/citation/82-FR-1134), Jan. 4, 2017]
## Subpart M—Withdrawal of Imported Distilled Spirits From Customs Custody Free of Tax for Use of the United States
#### Source:
[50 FR 9200](https://www.federalregister.gov/citation/50-FR-9200), Mar. 6, 1985, unless otherwise noted.
#### § 27.181 General.
(a) The United States or any of its Government agencies may, upon filing proper customs entry, withdraw imported distilled spirits free of tax from customs custody, as authorized by [26 U.S.C. 5313](https://www.govinfo.gov/link/uscode/26/5313) and under the provisions of this subpart. Before any distilled spirits may be withdrawn, a permit to procure the spirits shall be obtained from the appropriate TTB officer. A bond is not required for any Government agency to procure and withdraw spirits free of tax under this subpart.
(b) The provisions of [subpart N of part 22 of this chapter](/current/title-27/part-22/subpart-N) cover the withdrawal of domestically produced tax-free spirits for use of the United States or any of its Government agencies.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1372, as amended, 1375, as amended ([26 U.S.C. 5273](https://www.govinfo.gov/link/uscode/26/5273), [5313](https://www.govinfo.gov/link/uscode/26/5313)))
#### § 27.182 Application and permit, Form 5150.33.
(a) *General.* All permits previously issued to the United States or any of its Government agencies on Form 1444 shall remain valid and will be regulated by the same provisions of this subpart as it refers to permits on Form 5150.33.
(b) *Application.*
(1) A Government agency of the United States must apply for a permit to procure and withdraw spirits free of tax on Form 5150.33. Upon approval by the appropriate TTB officer, Form 5150.33 will be returned to the agency.
(2) If a Government agency intends to withdraw spirits free of tax under this [part and part 22 of this chapter](/current/title-27/part-22), Form 5150.33 may be annotated to cover both types of withdrawals.
(3) A separate permit is not required for each port of entry. The application, Form 5150.33, may be completed to indicate the applicable ports of entry in which spirits will be withdrawn from customs custody.
(4) A Government agency may specify on its application that it desires a single permit authorizing all sub-agencies under its control to procure and withdraw spirits free of tax under this subpart and [subpart N of part 22 of this chapter](/current/title-27/part-22/subpart-N); or, each Government location may individually file an application for a permit, Form 5150.33.
(5) Each application for a permit shall be signed by the head of the agency or sub-agency, or the incumbent of an office which is authorized by the head of the agency or sub-agency, to sign. Evidence of authorization to sign on behalf of the head of an agency or sub-agency shall be furnished with the application.
(c) *Use of spirits.* Spirits withdrawn under this subpart may not be used for non-Government purposes.
(d) *Cancellation of permit.* All permits on Form 5150.33 and previous editions on Form 1444 remain in force until surrendered or canceled. Upon surrender or cancellation, the Government agency must obtain and destroy all photocopies of the permit furnished to port directors of customs, and forward the original to the appropriate TTB officer for cancellation.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1375, as amended ([26 U.S.C. 5313](https://www.govinfo.gov/link/uscode/26/5313)))
\[[50 FR 9200](https://www.federalregister.gov/citation/50-FR-9200), Mar. 6, 1985, as amended by T.D. ATF-474, [67 FR 11232](https://www.federalregister.gov/citation/67-FR-11232), Mar. 13, 2002]
#### § 27.183 Use of Government agency permit, Form 5150.33.
Each Government agency must retain the original of its permit, Form 5150.33, on file. In the case of an agency holding a single permit for use of its sub-agencies, an attachment to the permit must list all locations authorized to withdraw spirits free of tax from customs custody. When withdrawing spirits free of tax from a port of entry, the agency, if filing electronically, must file its TTB-issued permit number along with the filing of any other information required by U.S. Customs and Border Protection to be filed with the customs entry. If the agency is not filing electronically, rather than file the TTB-issued permit number, the agency must make a copy of the permit available to the customs officer upon request.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1375, as amended ([26 U.S.C. 5313](https://www.govinfo.gov/link/uscode/26/5313)))
\[T.D. TTB-145, [81 FR 94207](https://www.federalregister.gov/citation/81-FR-94207), Dec. 22, 2016]
#### § 27.184 Information required for entry.
Government agencies importing tax-free spirits under this subpart must file, along with filing the customs entry or entry summary, the total quantity of the spirits to be entered and, if filing electronically, the permit number as required under [§ 27.183](/current/title-27/section-27.183).
\[T.D. TTB-145, [81 FR 94208](https://www.federalregister.gov/citation/81-FR-94208), Dec. 22, 2016]
## Subpart N—Requirements for Liquor Bottles
#### Authority:
Sec. 5301, 72 Stat. 1374; [26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301).
#### Source:
T.D. 6954, [33 FR 6819](https://www.federalregister.gov/citation/33-FR-6819), May 4, 1968, unless otherwise noted. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975.
#### § 27.201 Scope of subpart.
The provisions of this subpart shall apply only to liquor bottles having a capacity of 200 ml. or more except where expressly applied to liquor bottles of less than 200 ml. capacity.
\[T.D. 6954, [33 FR 6819](https://www.federalregister.gov/citation/33-FR-6819), May 4, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-34, [41 FR 46865](https://www.federalregister.gov/citation/41-FR-46865), Oct. 26, 1976]
#### § 27.202 Standards of fill.
Distilled spirits imported into the United States in containers of 1 gallon (3.785 liters) or less for sale shall be imported only in liquor bottles, including liquor bottles of less than 200 ml capacity, which conform to the applicable standards of fill provided in [§ 5.203](/current/title-27/section-5.203). of this chapter. Empty liquor bottles, including liquor bottles of less than 200 ml capacity, which conform to the provisions of part 19, or [subpart K of part 5 of this chapter](/current/title-27/part-5/subpart-K), may be imported for packaging distilled spirits in the United States as provided in [part 19 of this chapter](/current/title-27/part-19).
\[T.D. ATF-62, [44 FR 71720](https://www.federalregister.gov/citation/44-FR-71720), Dec. 11, 1979, as amended by T.D. TTB-196, [89 FR 87944](https://www.federalregister.gov/citation/89-FR-87944), Nov. 6, 2024]
#### § 27.204 Distinctive liquor bottles.
(a) *Application.* Liquor bottles of distinctive shape or design, including bottles of less than 200 ml. capacity, may be imported by an importer (filled bottles) or a bottler (empty bottles). For filled bottles, the importer shall submit TTB Form 5100.31 for approval prior to importation of such bottles into the United States. For empty bottles, the bottler shall obtain approval from the appropriate TTB officer on TTB Form 5100.31 prior to using the bottles. The importer or bottler, as applicable, shall certify as to the total capacity of a representative sample bottle before closure (expressed in milliliters) on each copy of the form. In addition, the applicant shall affix a readily legible photograph (both front and back of the bottle to the front of each copy of TTB Form 5100.31, along with the label(s) to be used on the bottle. The applicant shall not submit an actual bottle or an authentic model unless specifically requested to do so.
(b) *Approval.*
(1) Properly submitted TTB Forms 5100.31 to import distinctive liquor bottles (filled), or, properly submitted TTB Forms 5100.31 to use distinctive liquor bottles (empty) which have been imported, shall be approved provided such bottles are found by the appropriate TTB officer to—
(i) Meet the requirements of [27 CFR part 5](/current/title-27/part-5);
(ii) Be distinctive;
(iii) Be suitable for their intended purpose;
(iv) Not jeopardize the revenue; and
(v) Not be deceptive to the consumer.
(2) The applicant shall keep a copy of the approved TTB Form 5100.31, including an approved photograph (both front and back) of the distinctive liquor bottle, on file at their premises. If TTB Form 5100.31 is disapproved, the applicant shall be notified of the appropriate TTB officer's decision decision and the reasons therefor.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended ([26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301)))
(Approved by the Office of Management and Budget under control number 1513-0020)
\[T.D. ATF-114, [47 FR 43951](https://www.federalregister.gov/citation/47-FR-43951), Oct. 5, 1982, as amended by T.D. ATF-242, [51 FR 39526](https://www.federalregister.gov/citation/51-FR-39526), Oct. 29, 1986; T.D. ATF-474, [67 FR 11232](https://www.federalregister.gov/citation/67-FR-11232), Mar. 13, 2002; T.D. TTB-145, [81 FR 94208](https://www.federalregister.gov/citation/81-FR-94208), Dec. 22, 2016; T.D. TTB-196, [89 FR 87944](https://www.federalregister.gov/citation/89-FR-87944), Nov. 6, 2024]
#### § 27.205 \[Reserved]
#### § 27.206 Bottles not constituting approved containers.
The appropriate TTB officer is authorized to disapprove any bottle, including a bottle of less than 200 ml. capacity, for use as a liquor bottle which he determines to be deceptive. Disapproved bottles may not be imported into the United States.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1374, as amended ([26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301)))
\[T.D. ATF-114, [47 FR 43951](https://www.federalregister.gov/citation/47-FR-43951), Oct. 5, 1982, as amended at T.D. TTB-145, [81 FR 94208](https://www.federalregister.gov/citation/81-FR-94208), Dec. 22, 2016]
#### § 27.207 Bottles to be used for display purposes.
Empty liquor bottles may be imported and furnished to liquor dealers for display purposes, provided each bottle is marked to show that it is to be used for such purpose. The importer shall keep records of the receipt and disposition of such bottles, showing the names and addresses of consignees, dates of shipment, and size, quantity, and description of bottles.
\[T.D. ATF-206, [50 FR 23956](https://www.federalregister.gov/citation/50-FR-23956), June 7, 1985]
#### § 27.208 Liquor bottles not eligible for release from customs custody.
Upon receipt of a letterhead application, the appropriate TTB officer may, in nonrecurring cases, authorize a person to bring into the United States liquor bottles that do not conform to the provisions of this part if that TTB officer determines that the nonconformance is due to an unintentional error; the nonconforming liquor bottle is determined not to be deceptive, as provided in [§ 27.206](/current/title-27/section-27.206); and the entry of the nonconforming liquor bottle will not jeopardize the revenue. The person bringing such liquor bottles into the United States under TTB authorization must maintain proof of such authorization for not less than three years from the date that the liquor bottles were released from customs custody and make it available upon request by the appropriate TTB officer or a customs officer.
(Approved by the Office of Management and Budget under control number 1513-0064)
\[T.D. TTB-145, [81 FR 94208](https://www.federalregister.gov/citation/81-FR-94208), Dec. 22, 2016]
#### § 27.209 Used liquor bottles.
The appropriate TTB officer may pursuant to letterhead application authorize an importer to receive liquor bottles assembled for that importer as provided in [§ 31.203 of this chapter](/current/title-27/section-31.203). Used liquor bottles so received may be stored at any suitable location pending exportation for reuse. The importer shall keep records of the receipt and disposition of used liquor bottles.
(Approved by the Office of Management and Budget under control number 1513-0064)
\[T.D. 6954, [33 FR 6819](https://www.federalregister.gov/citation/33-FR-6819), May 4, 1968, as amended by T.D. 7006, [34 FR 2251](https://www.federalregister.gov/citation/34-FR-2251), Feb. 15, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-172, [49 FR 14943](https://www.federalregister.gov/citation/49-FR-14943), Apr. 16, 1984; T.D. TTB-25, [70 FR 19883](https://www.federalregister.gov/citation/70-FR-19883), Apr. 15, 2005; T.D. TTB-145, [81 FR 94208](https://www.federalregister.gov/citation/81-FR-94208), Dec. 22, 2016; T.D. TTB-196, [89 FR 87944](https://www.federalregister.gov/citation/89-FR-87944), ]
## Subpart O—Miscellaneous Provisions
#### § 27.221 Alternate methods or procedures.
(a) *Application.* An importer or foreign producer who desires to use an alternate method or procedure in lieu of a method or procedure prescribed by this part must file an application with the appropriate TTB officer. Each application must:
(1) Specify the name, address, and permit number of the importer or Foreign Producer ID of the foreign producer to which it relates;
(2) State the purpose for which filed; and
(3) Specifically describe the alternate method or procedure and set forth the reasons therefor.
No alternate method or procedure relating to the assessment, payment, or collection of tax shall be authorized under this paragraph.
(b) *Approval.* When an application for use of an alternate method or procedure is received, the appropriate TTB officer must determine whether approval thereof would unduly hinder the effective administration of this part or would result in jeopardy to the revenue. The appropriate TTB officer may approve the alternate method or procedure if such officer finds that:
(1) Good cause has been shown for the use of the alternate method or procedure;
(2) The alternate method or procedure is within the purpose of, and consistent with the effect intended by, the specifically prescribed method or procedure, and affords equivalent security to the revenue; and
(3) The alternate method or procedure will not be contrary to any provision of law, and will not result in an increase in cost to the Government or hinder the effective administration of this part.
No alternate method or procedure shall be used until approval has been received from the appropriate TTB officer. Authorization for the alternate method or procedure may be withdrawn whenever in the judgment of the appropriate TTB officer, the revenue is jeopardized or the effective administration of this part is hindered by the continuation of such authorization.
(Approved by the Office of Management and Budget under control number 1513-0064)
\[T.D. ATF-2, [37 FR 22743](https://www.federalregister.gov/citation/37-FR-22743), Oct. 21, 1972. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-172, [49 FR 14943](https://www.federalregister.gov/citation/49-FR-14943), Apr. 16, 1984; T.D. ATF-474, [67 FR 11232](https://www.federalregister.gov/citation/67-FR-11232), Mar. 13, 2002; T.D. TTB-145, [81 FR 94208](https://www.federalregister.gov/citation/81-FR-94208), Dec. 22, 2016; T.D. TTB-186, [87 FR 58031](https://www.federalregister.gov/citation/87-FR-58031), Sept. 23, 2022]
#### § 27.222 Importation of denatured spirits and fuel alcohol.
Denatured spirits and fuel alcohol are treated as spirits for purposes of this part and are subject to tax pursuant to [§ 27.40(a)](/current/title-27/section-27.40#p-27.40\(a\)). The tax must be paid upon importation, with only two exceptions: Spirits may be withdrawn from customs custody free of tax for the use of the United States under [subpart M of this part](/current/title-27/part-27/subpart-M); and spirits may be withdrawn from customs custody and transferred to a distilled spirits plant, including a bonded alcohol fuel plant, without payment of tax under [subpart L of this part](/current/title-27/part-27/subpart-L). After transfer pursuant to subpart L, denatured spirits or fuel alcohol may be withdrawn free of tax in accordance with [part 19 of this chapter](/current/title-27/part-19) if they meet the standards to conform either to a denatured spirits formula specified in [part 21 of this chapter](/current/title-27/part-21) (for withdrawal from a regular distilled spirits plant) or a formula specified in [§ 19.746 of this chapter](/current/title-27/section-19.746) (for withdrawal from an alcohol fuel plant). Such withdrawal is permitted, even though the denaturation or rendering unfit for beverage use may have occurred, in whole or in part, in a foreign country. For purposes of this chapter, the denaturation or rendering unfit is deemed to have occurred at the distilled spirits plant (including the alcohol fuel plant), the proprietor of which is responsible for compliance with part 21 or [§ 19.746](/current/title-27/section-19.746), as the case may be. Imported fuel alcohol shall also conform to the requirements of [27 CFR 19.742](/current/title-27/section-19.742).
\[T.D. TTB-140, [81 FR 59464](https://www.federalregister.gov/citation/81-FR-59464), Aug. 30, 2016]
#### §§27.223-27.249 \[Reserved]
## Subpart P—Craft Beverage Modernization Act Import Refund Claims
#### Source:
T.D. TTB-186, [87 FR 58032](https://www.federalregister.gov/citation/87-FR-58032), Sept. 23, 2022, unless otherwise noted.
#### § 27.250 Scope.
This subpart contains procedural requirements relative to the refunds of internal revenue tax for imported alcohol made available under the Craft Beverage Modernization Act provisions of the Internal Revenue Code of 1986 at [26 U.S.C. 5001(c)(4)](https://www.govinfo.gov/link/uscode/26/5001), [5041(c)(7)](https://www.govinfo.gov/link/uscode/26/5041), and [5051(a)(6)](https://www.govinfo.gov/link/uscode/26/5051). The refunds available under this subpart apply only to imported products entered for consumption on or after January 1, 2023.
#### § 27.252 Meaning of terms.
When used in this subpart and in forms prescribed under this subpart, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof, terms have the meaning ascribed in this section. Words in the plural form include the singular, and vice versa.
*CBMA.* The Craft Beverage Modernization Act provisions (sections 13801-13808) of the law commonly known as the Tax Cuts and Jobs Act ([Pub. L. 115-97](https://www.govinfo.gov/link/plaw/115/public/97)), as amended.
*CBMA importer refund claims system.* The electronic system established by TTB for the collection and review of claims for refund of internal revenue tax authorized under [§ 27.264](/current/title-27/section-27.264). The CBMA importer refund claim system is available at *[https://www.TTB.gov](https://www.TTB.gov).*
*CBMA tax benefits.* The reduced tax rates or tax credits made available under CBMA at [26 U.S.C. 5001(c)(1)](https://www.govinfo.gov/link/uscode/26/5001) (distilled spirits), 5041(c)(1) (wine), and 5051(a)(1) (beer), and made assignable to importers by foreign distilled spirits operations, wineries, and brewers pursuant to sections 5001(c)(3), 5041(c)(6), and 5051(a)(4), respectively.
*Foreign producer.* A foreign distilled spirits operation, wine producer, or brewer.
*Foreign Producer ID.* The identification number issued to a foreign producer registered with TTB under [§ 27.254](/current/title-27/section-27.254).
*Foreign producer registration and assignment system.* The electronic system established by TTB for the collection of information related to the registration of a foreign producer under [§§ 27.254](/current/title-27/section-27.254) through [27.260](/current/title-27/section-27.260) and the assignment of CBMA tax benefits by such foreign producer under [§ 27.262](/current/title-27/section-27.262). The foreign producer registration and assignment system is available at *[https://www.TTB.gov](https://www.TTB.gov).*
#### § 27.254 Registration of foreign producer.
(a) *General.* A foreign producer electing to assign CBMA tax benefits to one or more importers must first register with TTB and receive a Foreign Producer ID.
(b) *Information required in registration.* A foreign producer must provide the following information through the foreign producer registration and assignment system to register with TTB and receive a Foreign Producer ID:
(1) The name, country of residence, and principal business address of the foreign producer;
(2) The name, title, country of residence, phone number, and email address of an employee or individual owner of the business who has authority to act for the business;
(3) If different than the individual identified in [paragraph (b)(2)](/current/title-27/section-27.254#p-27.254\(b\)\(2\)) of this section, the name, address, phone number, and email address of the individual submitting the registration and authorized to act on the foreign producer's behalf;
(4) The Food Facility Registration number(s) obtained from the U.S. Food and Drug Administration (FDA) under [21 CFR 1.225](/current/title-21/section-1.225) that may be reported to FDA under [21 CFR 1.281(a)(6)(ii)](/current/title-21/section-1.281#p-1.281\(a\)\(6\)\(ii\)) for the purposes of importing into the United States the foreign producer's alcohol products;
(5) Identifying information for the individuals and/or entities with ownership interests in the foreign producer as required by [§ 27.256](/current/title-27/section-27.256), or a certification that [§ 27.256](/current/title-27/section-27.256) does not require the foreign producer to provide such identifying information;
(6) Any prescribed certifications attesting to the authority of the individual submitting the registration and the truthfulness of the information submitted, the acknowledgement by the person submitting the registration that providing erroneous or fraudulent information may cause TTB to revoke the foreign producer's eligibility to assign CBMA tax benefits, and consent to receive electronically any written notice of contemplated revocation;
(7) Any additional information required by the appropriate TTB officer (including, through the foreign producer registration and assignment system) in order to verify a submitter's identity. Such information may include identifying numbers (*e.g.,* Employer Identification Number, Social Security Number) as provided in [26 U.S.C. 6109](https://www.govinfo.gov/link/uscode/26/6109); and
(8) Any additional information required by the appropriate TTB officer on a case-by-case basis, to administer CBMA.
(c) *Language.* All registration information must be submitted in the English language except an individual's name, the name of a company, and the name of a street may be submitted in a foreign language. All information, including these items, must be submitted using the English alphabet.
(d) *Electronic registration required.* The foreign producer must submit the information required by [paragraph (b)](/current/title-27/section-27.254#p-27.254\(b\)) of this section electronically using the format provided by TTB.
#### § 27.256 Foreign producer ownership information.
(a) *When required.* A foreign producer must provide, as part of the registration required by [§ 27.254](/current/title-27/section-27.254), the identifying information set forth in [paragraph (b)](/current/title-27/section-27.256#p-27.256\(b\)) of this section only when one or more of the individuals or entities holding an ownership interest in the foreign producer of 10 percent or more also holds an ownership interest in any distilled spirits operation, winery, or brewery in the United States or in any other foreign producer that has assigned or will assign CBMA tax benefits for any calendar year in which the registering foreign producer also assigns such benefits. Otherwise, the foreign producer must only certify that this scenario does not apply.
(b) *Identifying information* —
(1) *Individual owner.* For each individual holding an ownership interest of 10 percent or more in the foreign producer, the foreign producer must provide the following information when required by [paragraph (a)](/current/title-27/section-27.256#p-27.256\(a\)) of this section:
(i) The name, address, and phone number of the individual.
(ii) \[Reserved]
(2) *Other entity.* For each entity (other than an individual) holding an ownership interest of 10 percent or more in the foreign producer, the foreign producer must provide the following information when required by [paragraph (a)](/current/title-27/section-27.256#p-27.256\(a\)) of this section:
(i) The name, address, and phone number of the entity;
(ii) If the entity is a U.S. entity, and if the entity has such a number, the entity's Employer Identification Number issued by the U.S. Internal Revenue Service; and
(iii) If the entity is a foreign entity, and if the entity has such a number, the Dun & Bradstreet Data Universal Numbering System number of the entity.
#### § 27.258 Changes to foreign producer registration.
Whenever there is a change to any of the information submitted by the foreign producer under [§ 27.254](/current/title-27/section-27.254), the foreign producer must update its registration with the new information within 60 days. Whenever the appropriate TTB officer determines that a foreign producer has failed to update its registration information as required, the foreign producer's registration is deemed invalid and the foreign producer will be unable to assign CBMA tax benefits until the foreign producer updates its registration as required or the appropriate TTB officer is satisfied that no such update is required.
#### § 27.260 Persons authorized to act on behalf of foreign producer.
(a) *General.* A foreign producer registered with TTB to assign CBMA tax benefits must identify at least one person authorized to act on its behalf. The person who initially registers a foreign producer under [§ 27.254](/current/title-27/section-27.254) must have authorization from the foreign producer to provide the required registration information, edit the foreign producer's registration information, designate additional persons who are also authorized by the foreign producer to act on the foreign producer's behalf or cancel the designations of authorized persons, and make assignments of CBMA tax benefits. All authorized representatives of the foreign producer must have authority to receive and respond to communications from TTB, including notice of contemplated revocation under [§ 27.268(b)](/current/title-27/section-27.268#p-27.268\(b\)).
(b) *Authorization of additional persons.*
(1) A foreign producer may authorize more than one person to act on its behalf within the foreign producer registration and assignment system. To designate an additional person as described above, the foreign producer must provide the following information:
(i) The name and email address of the person; and
(ii) The appropriate system role for the person, based on the functions in [paragraph (a)](/current/title-27/section-27.260#p-27.260\(a\)) of this section that the person is authorized to carry out.
(2) TTB may collect additional information from the additional person, as needed, to verify their identity. Such information may include identifying numbers (*e.g.,* Social Security Number) as provided in [26 U.S.C. 6109](https://www.govinfo.gov/link/uscode/26/6109).
(c) *Proof of authority.* An individual acting on behalf of the foreign producer in the foreign producer registration and assignment system must maintain documentation establishing the individual's authority to act for the foreign producer and provide this documentation to TTB upon request. Any representative must be authorized by the foreign producer pursuant to a duly executed power of attorney or other document deemed acceptable to the appropriate TTB officer.
#### § 27.262 Foreign producer's assignment of CBMA tax benefits.
(a) *General.* A foreign producer who has registered with TTB under [§ 27.254](/current/title-27/section-27.254) and received a Foreign Producer ID may assign its CBMA tax benefits to importers, subject to the quantity limitations established by law.
(b) *Information required in assignment.* A foreign producer must provide the following information through the foreign producer registration and assignment system to make an assignment of CBMA tax benefits to an importer:
(1) The calendar year for which the CBMA tax benefits are being assigned;
(2) The TTB importer permit number or TTB-assigned reference number of the importer to whom the assignment is made;
(3) The Internal Revenue Code classification of the product for which the assignment is made, either distilled spirits, wine, or beer;
(4) The reduced tax rate or tax credit being assigned, either:
(i) For distilled spirits:
(A) The reduced tax rate of \$2.70 per proof gallon on the first 100,000 proof gallons imported in the calendar year; or
(B) The reduced tax rate of \$13.34 per proof gallon on the next 22.13 million proof gallons imported in the calendar year;
(ii) For wine:
(A) The tax credit of \$1 per wine gallon on the first 30,000 wine gallons of wine imported in the calendar year (or credit of 6.2 cents per wine gallon for wine classified as “hard cider”);
(B) The tax credit of 90 cents per wine gallon on the next 100,000 wine gallons imported in the calendar year (or credit of 5.6 cents per wine gallon for wine classified as “hard cider”); or
(C) The tax credit of 53.5 cents per wine gallon on the next 620,000 wine gallons imported in the calendar year (or credit of 3.3 cents per wine gallon for wine classified as “hard cider”);
(iii) For beer, the reduced tax rate of \$16 per barrel on the first 6,000,000 barrels imported in the calendar year;
(5) The quantity by proof gallons, wine gallons, or beer barrels of the reduced tax rate or tax credit being assigned; and
(6) Any prescribed certifications attesting to the submitter's authority and the submitter's acknowledgement of statutory limitations on the quantities of assignments that may be made; and
(7) Any additional information required by the appropriate TTB officer on a case-by-case basis to administer CBMA.
(c) *Limitations* —
(1) *General.* A foreign producer may not assign CBMA tax benefits on distilled spirits, wine, or beer unless it produced the product. The foreign producer may assign quantities that are limited to the number of proof gallons, wine gallons, and beer barrels in [paragraph (b)(4)](/current/title-27/section-27.262#p-27.262\(b\)\(4\)) of this section, and also cannot exceed the quantities of the foreign producer's distilled spirits, wine, and beer that are reasonably projected to be imported into the United States during the specified calendar year by the importer receiving the assignment.
(2) *Controlled group rules.* Foreign and/or domestic producers under common ownership are grouped together when applying the quantity limitations in [paragraph (c)(1)](/current/title-27/section-27.262#p-27.262\(c\)\(1\)) of this section. The quantity limitations apply to:
(i) Foreign and/or domestic producers in a “parent-subsidiary controlled group,” as defined in [26 U.S.C. 1563](https://www.govinfo.gov/link/uscode/26/1563) and as modified by [26 U.S.C. 5051(5)(A)-(B)](https://www.govinfo.gov/link/uscode/26/5051);
(ii) Foreign and/or domestic producers in a “brother-sister controlled group,” as defined in [26 U.S.C. 1563](https://www.govinfo.gov/link/uscode/26/1563) and as modified by [26 U.S.C. 5051(5)(A)-(B)](https://www.govinfo.gov/link/uscode/26/5051);
(iii) Foreign and/or domestic producers in a “combined group,” as defined in [26 U.S.C. 1563](https://www.govinfo.gov/link/uscode/26/1563) and as modified by [26 U.S.C. 5051(5)(A)-(B)](https://www.govinfo.gov/link/uscode/26/5051);
(iv) Shared ownership structures similar to those described in [paragraphs (c)(2)(i)](/current/title-27/section-27.262#p-27.262\(c\)\(2\)\(i\)) through [(iii)](/current/title-27/section-27.262#p-27.262\(c\)\(2\)\(iii\)) of this section, but where one or more producers under common ownership is not a corporation.
(d) *Timing.* Assignments of CBMA tax benefits may be submitted to TTB beginning no earlier than October 1st of the calendar year prior to the year for which the CBMA tax benefits are to be assigned. Assignments of CBMA tax benefits must be submitted on or before March 31 of the calendar year following the calendar year for which the CBMA tax benefits are assigned.
(e) *Changes to assignments.* Once made, a foreign producer may not revoke or reduce an assignment of CBMA tax benefits unless the assignee importer has rejected the assignment.
(f) *Electronic registration required.* The foreign producer must submit the information required by [paragraph (b)](/current/title-27/section-27.262#p-27.262\(b\)) of this section electronically using the format provided by TTB.
\[T.D. TTB-186, [87 FR 58032](https://www.federalregister.gov/citation/87-FR-58032), Sept. 23, 2022, as amended by T.D. TTB-186, [90 FR 45333](https://www.federalregister.gov/citation/90-FR-45333), Sept. 22, 2025]
#### § 27.264 CBMA import refund claim submission.
(a) *General.* An importer who has elected to receive an assignment of CBMA tax benefits from a foreign producer may file a claim in accordance with this section for a partial refund of the tax paid to U.S. Customs and Border Protection (CBP) on alcohol produced by the assigning foreign producer and imported into the United States by that importer. Refunds are to be determined no more frequently than quarterly. The amount of refund is calculated as provided at [26 U.S.C. 5001(c)(4)(B)](https://www.govinfo.gov/link/uscode/26/5001) for distilled spirits, 5041(c)(7)(B) for wine, and 5051(a)(6)(B) for beer, on such products entered for consumption within the calendar quarter and for which the importer has received an assignment of CBMA tax benefits and paid to CBP the tax determined on such products.
(b) *Election to receive CBMA tax benefits.* An importer who has been assigned CBMA tax benefits by a foreign producer is presumed to have elected to receive such assignment unless and until the importer rejects the assignment through the online system prior to filing a claim for a refund based on that assignment.
(c) *Information required at entry summary.* To be eligible for a refund described in [paragraph (a)](/current/title-27/section-27.264#p-27.264\(a\)) of this section, the importer must submit electronically the information required by [§ 27.48(a)(2)](/current/title-27/section-27.48#p-27.48\(a\)\(2\)) for distilled spirits, wines, and beer imported into the United States subject to tax (in satisfaction of [§ 27.48(a)(2)](/current/title-27/section-27.48#p-27.48\(a\)\(2\)), an importer who does not have and is not required to obtain an FAA Act basic permit must instead submit its TTB-assigned reference number obtained under [§ 27.266](/current/title-27/section-27.266)). The importer must also indicate its intent to claim a refund on the entry summaries of the consumption entries for the alcohol subject to the prospective claim, either at the time of entry summary or through post-summary correction. These entry summaries must include the following information for each line item to be included in a claim for refund, in the electronic format prescribed by CBP:
(1) The TTB-issued Foreign Producer ID of the foreign producer who assigned CBMA tax benefits to the importer;
(2) The name of the foreign producer who assigned CBMA tax benefits to the importer;
(3) A statement of whether the importer is using an eligible flavor content credit pursuant to [§§ 27.76](/current/title-27/section-27.76) and [27.77](/current/title-27/section-27.77); and
(4) An indicator or set of indicators specifying the particular CBMA reduced tax rate or tax credit assigned by the foreign producer of the alcohol.
(d) *Information required in claim submission.* To submit a claim for a refund described in [paragraph (a)](/current/title-27/section-27.264#p-27.264\(a\)) of this section, the importer must submit and/or verify, as appropriate, within the CBMA importer refund claims system the following information for each consumption entry line item to be included in the claim:
(1) The date of the entry for consumption;
(2) The year of importation, if different than the year of the entry for consumption;
(3) The entry summary number and the entry summary line number;
(4) The particular CBMA reduced tax rate or tax credit assigned by the foreign producer of the alcohol;
(5) The quantity of proof gallons, wine gallons, or beer barrels entered for consumption subject to the rate or credit identified in [paragraph (d)(4)](/current/title-27/section-27.264#p-27.264\(d\)\(4\)) of this section;
(6) The TTB-issued Foreign Producer ID of the foreign producer who assigned CBMA tax benefits to the importer;
(7) The amount of tax determined and paid by the importer;
(8) The amount of the refund sought by the importer;
(9) Information allowing the appropriate TTB officer to arrange payment to the importer of the refund;
(10) Any prescribed certifications attesting to submitter's authority and the truthfulness of the information submitted; and
(11) Any additional information, as needed by TTB on a case-by-case basis, to administer CBMA.
(e) *Timing of claim submission.* Claims under this section may be submitted only after the end of the calendar quarter in which the entries for consumption were filed. The calendar quarters end on March 31, June 30, September 31, and December 31. Claims must be filed within the limitations period set forth at [26 U.S.C. 6511](https://www.govinfo.gov/link/uscode/26/6511).
(f) *Authorization.* Each person authorized to sign or act on behalf of the importer must be authorized pursuant to a duly executed power of attorney. TTB may collect additional information from the authorized person, as needed, to verify their identity. Such information may include identifying numbers (*e.g.,* Social Security Number) as provided in [26 U.S.C. 6109](https://www.govinfo.gov/link/uscode/26/6109).
(g) *Electronic filing required.* To be eligible for a refund under this section, an importer must submit the information required by [paragraphs (c)](/current/title-27/section-27.264#p-27.264\(c\)) and [(d)](/current/title-27/section-27.264#p-27.264\(d\)) of this section electronically in the formats prescribed by CBP and TTB, respectively.
\[[20 FR 3561](https://www.federalregister.gov/citation/20-FR-3561), May 21, 1955, as amended by T.D. TTB-196, [89 FR 87944](https://www.federalregister.gov/citation/89-FR-87944), Nov. 6, 2024]
#### § 27.266 Importer reference number.
An importer who does not have and is not required to obtain an FAA Act basic permit must request and receive a reference number from the appropriate TTB officer before receiving assignments of CBMA tax benefits from foreign producers under [§ 27.262](/current/title-27/section-27.262). The importer must provide this reference number to any foreign producers that will assign CBMA tax benefits to the importer.
#### § 27.268 Revocation of eligibility for CBMA tax benefits.
(a) *Revocation of foreign producer's eligibility.* A foreign producer who provides erroneous or fraudulent information that the appropriate TTB officer determines is material to the eligibility of the foreign producer to assign CBMA tax benefits under [§ 27.262](/current/title-27/section-27.262) may have such eligibility revoked, for a period not to exceed three calendar years following the year of revocation, under the procedures set forth in [paragraphs (b)](/current/title-27/section-27.268#p-27.268\(b\)) through [(e)](/current/title-27/section-27.268#p-27.268\(e\)) of this section. If the foreign producer has previously had its eligibility revoked under this section, any subsequent revocation may instead be permanent. In any case where a criminal conviction results from the foreign producer's providing of erroneous or fraudulent information as described above, eligibility will be permanently revoked.
(b) *Notice of contemplated revocation.* Where the appropriate TTB officer has reason to believe that a foreign producer, including anyone acting on behalf of a foreign producer, has provided erroneous or fraudulent information as described in [paragraph (a)](/current/title-27/section-27.268#p-27.268\(a\)) of this section, such officer will provide a written notice of contemplated revocation to the foreign producer. Such notice will set forth the facts and analysis supporting the contemplated revocation, as well as the period of contemplated revocation. Written notice will be provided electronically to persons authorized to act on behalf of the foreign producer within the online foreign producer registration and assignment system as provided in [§ 27.260](/current/title-27/section-27.260).
(c) *Response to contemplated revocation.* A foreign producer in receipt of a notice of contemplated revocation, or its representative, may submit a written response to the appropriate TTB officer explaining why the foreign producer believes the information at issue was not erroneous or fraudulent, or why such information is not material to the foreign producer qualifying for CBMA tax benefits. This response must be submitted within 45 days of receipt of the written notice of contemplated revocation and must be submitted electronically through means specified in such notice. Any representative of the foreign producer in these proceedings must be authorized by the foreign producer pursuant to a duly executed power of attorney or other document deemed acceptable to the appropriate TTB officer. If the foreign producer does not submit a response within 45 days, the appropriate TTB officer will issue an order of revocation as set forth in [paragraph (d)](/current/title-27/section-27.268#p-27.268\(d\)) of this section.
(d) *Revocation determination.* Following receipt of a foreign producer's response to a contemplated revocation, the appropriate TTB officer will consider the arguments raised in the response and issue an order either dismissing the contemplated revocation or imposing a revocation as authorized under [paragraph (a)](/current/title-27/section-27.268#p-27.268\(a\)) of this section. Any order imposing revocation will set forth the facts and analysis supporting the revocation, taking into consideration any response provided by the foreign producer under [paragraph (c)](/current/title-27/section-27.268#p-27.268\(c\)) of this section. The order will be provided electronically to the foreign producer or the foreign producer's representative in the matter.
(e) *Review* —
(1) *Appeal.* A foreign producer may appeal an order of revocation issued under [paragraph (d)](/current/title-27/section-27.268#p-27.268\(d\)) of this section by submitting a written appeal to the appropriate TTB officer within 45 days of receipt of such order. The appeal must explain why the foreign producer believes its revocation is in error, supported by facts and analysis. The appeal must be submitted electronically through the means specified in the order of revocation. The appropriate TTB officer will issue a final decision by notifying the foreign producer within 90 days of receipt of the appeal whether the appeal is granted or denied, and the reasons for the determination. The appropriate TTB officer may extend this period of time once by an additional 90 days if the appropriate TTB officer requires additional time to consider the issues presented by an appeal and must notify the foreign producer of the extension within the initial 90-day period. If the appropriate TTB officer fails to issue a decision granting or denying the appeal within the applicable deadline, the appeal is denied and such denial will be considered a final decision.
(2) *Judicial review.* A final decision from the appropriate TTB officer following appeal is required prior to application to the Federal courts for review of any order of revocation.
(f) *Notice to affected importers.* In any instance where an order imposing revocation of a foreign producer's eligibility for CBMA tax benefits is issued under [paragraph (d)](/current/title-27/section-27.268#p-27.268\(d\)) of this section, the appropriate TTB officer will notify any importer having an assignment of CBMA tax benefits from that foreign producer of the revocation. In the event that the revocation is appealed and the appeal is granted pursuant to [paragraph (e)](/current/title-27/section-27.268#p-27.268\(e\)) of this section, the appropriate TTB officer will notify any importer having an assignment from that foreign producer of the dismissal of such revocation.
# Part 28 — EXPORTATION OF ALCOHOL
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-28
Full text of 27 CFR Part 28 — EXPORTATION OF ALCOHOL. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 28—EXPORTATION OF ALCOHOL
#### Authority:
[5 U.S.C. 552(a)](https://www.govinfo.gov/link/uscode/5/552); [19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c), [1202](https://www.govinfo.gov/link/uscode/19/1202); [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5007](https://www.govinfo.gov/link/uscode/26/5007), [5008](https://www.govinfo.gov/link/uscode/26/5008), [5041](https://www.govinfo.gov/link/uscode/26/5041), [5051](https://www.govinfo.gov/link/uscode/26/5051), [5054](https://www.govinfo.gov/link/uscode/26/5054), [5061](https://www.govinfo.gov/link/uscode/26/5061), [5121](https://www.govinfo.gov/link/uscode/26/5121), [5122](https://www.govinfo.gov/link/uscode/26/5122), [5201](https://www.govinfo.gov/link/uscode/26/5201), [5205](https://www.govinfo.gov/link/uscode/26/5205), [5207](https://www.govinfo.gov/link/uscode/26/5207), [5232](https://www.govinfo.gov/link/uscode/26/5232), [5273](https://www.govinfo.gov/link/uscode/26/5273), [5301](https://www.govinfo.gov/link/uscode/26/5301), [5313](https://www.govinfo.gov/link/uscode/26/5313), [5555](https://www.govinfo.gov/link/uscode/26/5555), [6109](https://www.govinfo.gov/link/uscode/26/6109), [6302](https://www.govinfo.gov/link/uscode/26/6302), [7805](https://www.govinfo.gov/link/uscode/26/7805); [27 U.S.C. 203](https://www.govinfo.gov/link/uscode/27/203), [205](https://www.govinfo.gov/link/uscode/27/205); [44 U.S.C. 3504(h)](https://www.govinfo.gov/link/uscode/44/3504).
#### Source:
[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960, unless otherwise noted. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and further redesignated by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004
#### Editorial Note:
Nomenclature changes to part 28 appear by T.D. ATF-477, [67 FR 18087](https://www.federalregister.gov/citation/67-FR-18087) through [18090](https://www.federalregister.gov/citation/67-FR-18090), Apr. 15, 2002.
## Subpart A—Scope
#### § 28.1 General.
The regulations in this part relate to exportation, lading for use on vessels and aircraft, and the transfer to a foreign-trade zone or a manufacturing bonded warehouse, class 6, of distilled spirits (including specially denatured spirits), beer, and wine, and in the case of distilled spirits and wine only, transfer to a customs bonded warehouse as provided for in [26 U.S.C. 5066](https://www.govinfo.gov/link/uscode/26/5066) and [5362](https://www.govinfo.gov/link/uscode/26/5362), whether without payment of tax, free of tax, or with benefit of drawback, and includes requirements with respect to removal, shipment, lading, deposit, evidence of exportation, losses, claims, and bonds.
\[T.D. ATF-88, [46 FR 39814](https://www.federalregister.gov/citation/46-FR-39814), Aug. 5, 1981]
#### § 28.2 Forms prescribed.
(a) The Appropriate TTB officer is authorized to prescribe all forms required by this part. All of the information called for in each form shall be furnished as indicated by the headings on the form and the instructions on or pertaining to the form. In addition, information called for in each form shall be furnished as required by this part. The form will be filed in accordance with the instructions for the form.
(b) Forms prescribed by this part are available for printing through the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202
([5 U.S.C. 552(a)](https://www.govinfo.gov/link/uscode/5/552) (80 Stat. 383, as amended))
\[T.D. ATF-92, [46 FR 46921](https://www.federalregister.gov/citation/46-FR-46921), Sept. 23, 1981, as amended by T.D. ATF-249, [52 FR 5963](https://www.federalregister.gov/citation/52-FR-5963), Feb. 27, 1987; T.D. ATF-372, [61 FR 20725](https://www.federalregister.gov/citation/61-FR-20725), May 8, 1996; T.D. ATF-477, [67 FR 18087](https://www.federalregister.gov/citation/67-FR-18087), Apr. 15, 2002; T.D. TTB-8, [69 FR 3831](https://www.federalregister.gov/citation/69-FR-3831), Jan. 27, 2004; T.D. TTB-91, [76 FR 5479](https://www.federalregister.gov/citation/76-FR-5479), Feb. 1, 2011; T.D. TTB-196, [89 FR 87945](https://www.federalregister.gov/citation/89-FR-87945), Nov. 6, 2024]
#### § 28.3 Related regulations.
Regulations relating to this part are listed below:
[19 CFR Chapter I](/current/title-19/chapter-I)—U.S. Customs and Border Protection, Department of Homeland Security; Department of the Treasury
[27 CFR Part 1](/current/title-27/part-1)—Basic Permit Requirements Under the Federal Alcohol Administration Act, Nonindustrial Use of Distilled Spirits and Wine, Bulk Sales and Bottling of Distilled Spirits
[27 CFR Part 4](/current/title-27/part-4)—Labeling and Advertising of Wine
[27 CFR Part 19](/current/title-27/part-19)—Distilled Spirits Plants
[27 CFR Part 21](/current/title-27/part-21)—Formulas for Denatured Alcohol and Rum
[27 CFR Part 24](/current/title-27/part-24)—Wine
[27 CFR Part 25](/current/title-27/part-25)—Beer
[27 CFR Part 27](/current/title-27/part-27)—Importation of Distilled Spirits, Wines, and Beer
[27 CFR Part 30](/current/title-27/part-30)—Gauging Manual
[27 CFR Part 31](/current/title-27/part-31)—Alcohol Beverage Dealers
[31 CFR Part 225](/current/title-31/part-225)—Acceptance of Bonds Secured by Government Obligations in Lieu of Bonds with Sureties
\[T.D. ATF-224, [51 FR 7698](https://www.federalregister.gov/citation/51-FR-7698), Mar. 5, 1986, as amended by T.D. ATF-299, [55 FR 25033](https://www.federalregister.gov/citation/55-FR-25033), June 19, 1990; T.D. TTB-25, [70 FR 19883](https://www.federalregister.gov/citation/70-FR-19883), Apr. 15, 2005; T.D. TTB-91, [76 FR 5479](https://www.federalregister.gov/citation/76-FR-5479), Feb. 1, 2011; T.D. TTB-146, [82 FR 1135](https://www.federalregister.gov/citation/82-FR-1135), Jan. 4, 2017; T.D. TTB-196, [89 FR 87944](https://www.federalregister.gov/citation/89-FR-87944), Nov. 6, 2024]
#### § 28.4 Delegations of the Administrator.
Most of the regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.28, Delegation of the Administrator's Authorities in [27 CFR Part 28](/current/title-27/part-28), Exportation of Alcohol. You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-44, [71 FR 16946](https://www.federalregister.gov/citation/71-FR-16946), Apr. 4, 2006, as amended by T.D. TTB-196, [89 FR 87945](https://www.federalregister.gov/citation/89-FR-87945), Nov. 6, 2024]
## Subpart B—Definitions
#### § 28.11 Meaning of terms.
When used in this part and in forms prescribed under this part, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof, terms shall have the meaning ascribed in this section. Words in the plural form shall include the singular, and vice versa, and words importing the masculine gender shall include the feminine. The terms “includes” and “including” do not exclude things not enumerated which are in the same general class.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.28, Delegation of the Administrator's Authorities in [27 CFR Part 28](/current/title-27/part-28), Exportation of Alcohol.
*Beer.* Beer, ale, porter, stout, and other similar fermented beverages (including sake or similar products) of any name or description containing one-half of 1 percent or more of alcohol by volume, brewed or produced from malt, wholly or in part, or from any substitute therefor.
*Bonded premises—distilled spirits plant.* The premises of a distilled spirits plant, or part thereof, on which distilled spirits operations defined in [26 U.S.C. 5002](https://www.govinfo.gov/link/uscode/26/5002) are authorized to be conducted. This term includes premises described in the preceding sentence even if the distilled spirits plant proprietor, as authorized under the exemption set forth in [§ 19.151(d) of this chapter](/current/title-27/section-19.151#p-19.151\(d\)), has not provided a bond for the premises.
*Bonded wine cellar.* Premises established under [part 24 of this chapter](/current/title-27/part-24) for the production, blending, cellar treatment, storage, bottling, packaging, or repackaging of untaxpaid wine. This term includes premises described in the preceding sentences even if the proprietor, as authorized under the exemption set forth in [§ 24.146(d)](/current/title-27/section-24.146#p-24.146\(d\)), has not provided a bond for the premises.
*Brewer.* A proprietor of a brewery.
*Brewery.* Premises established under [part 25 of this chapter](/current/title-27/part-25) for the production of beer.
*Bulk container.* any container having a capacity of more than 1 gallon.
*CFR.* The Code of Federal Regulations.
*Container.* Any receptacle, vessel, or any form of package, bottle, can, tank, or pipeline used, or capable of being used, for holding, storing, transferring, or conveying liquors.
*Customs bonded warehouse.* A customs bonded warehouse, class 2, 3, or 8, established under the provisions of the customs regulations ([19 CFR chapter I](/current/title-19/chapter-I)).
*Customs officer.* An officer of U.S. Customs and Border Protection (CBP) or any agent or other person authorized by law to perform the duties of such an officer.
*Delegate.* Any officer, employee, or agency of the Department of the Treasury authorized by the Secretary of the Treasury directly, or indirectly by one or more redelegations of authority, to perform the function mentioned or described in the context.
*District director of customs.* The district director of customs at a headquarters port of the district (except the district of New York, NY), the area directors of customs in the district of New York, NY, and the port director at a port not designated as a headquarters port.
*Distilled spirits or spirits.* That substance known as ethyl alcohol, ethanol, or spirits of wine, in any form (including all dilutions and mixtures thereof, from whatever source or by whatever process produced) but not denatured spirits.
*Distilled spirits plant.* An establishment qualified under the provisions of [part 19 of this chapter](/current/title-27/part-19) for the production, warehousing, or processing of spirits, or for authorized combinations of such operations.
*Executed under penalties of perjury.* Signed with the prescribed declaration under the penalties of perjury as provided on or with respect to the return, claim, form, or other document or, where no form of declaration is prescribed, with the declaration:
I declare under the penalties of perjury that this \_\_\_\_\_\_\_\_\_\_ (insert type of document such as statement, report, certificate, application, claim, or other document), including the documents submitted in support thereof, has been examined by me and, to the best of my knowledge and belief, is true, correct, and complete.
*Exportation.* A severance of goods from the mass of things belonging to the United States with the intention of uniting them to the mass of things belonging to some foreign country and shall include shipments to any possession of the United States. The export character of any shipment shall be determined by the intention with which it is made, and it assumes an export character only when destined for use in a foreign country or in a possession of the United States. For the purposes of this part, shipments to the Commonwealth of Puerto Rico, to the territories of the Virgin Islands, American Samoa and Guam, and to the Panama Canal Zone shall also be treated as exportations.
*Foreign-trade zone or zone.* A foreign-trade zone established and operated pursuant to the Act of June 18, 1934, as amended.
*Gallon or wine gallon.* The liquid measure equivalent to the volume of 231 cubic inches.
*Liquor.* Distilled spirits, wines, and/or beer.
*Liter.* A metric unit of capacity equal to 1,000 cubic centimeters of alcoholic beverage, and equivalent to 33.814 fluid ounces. A liter is divided into 1,000 milliliters. Milliliter or milliliters may be abbreviated as “ml”.
*Manufacturing bonded warehouse.* A manufacturing bonded warehouse, class six, established under the provisions of the customs regulations ([19 CFR chapter I](/current/title-19/chapter-I)).
*Package.* Any cask, keg, barrel, drum, or similar portable container.
*Person.* An individual, a trust, an estate, a partnership, an association, a company, or a corporation.
*Proof.* The ethyl alcohol content of a liquid at 60 degrees Fahrenheit, stated as twice the percent of ethyl alcohol by volume.
*Proof gallon.* A gallon at 60 degrees Fahrenheit which contains 50 percent by volume of ethyl alcohol having a specific gravity of 0.7939 at 60 degrees Fahrenheit referred to water at 60 degrees Fahrenheit as unity, or the alcoholic equivalent thereof.
*Proprietor.* The person who operates the brewery, distilled spirits plant, bonded wine cellar, taxpaid wine bottling house, or manufacturing bonded warehouse, as the case may be, referred to in this part.
*Secretary of the Treasury* or *Secretary.* The Secretary of the Treasury or a delegate of the Secretary.
*Specially denatured spirits.* Alcohol or rum, as defined in [part 21 of this chapter](/current/title-27/part-21), denatured pursuant to the formulas authorized in part 21 for specially denatured alcohol or rum.
*Tank truck.* A tank-equipped semi-trailer, trailer, or truck.
*Tax.* The distilled spirits tax, the beer tax, or the applicable wine tax, as the case may be, imposed by [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101).
*U.S.C.* The United States Code.
*Wine.* All kinds and types of wine having not in excess of 24 percent of alcohol by volume.
*Zone operator.* The person to which the privilege of establishing, operating, and maintaining a foreign-trade zone has been granted by the Foreign-Trade Zones Board created by the Act of June 18, 1934, as amended.
\[T.D. ATF-48, [43 FR 13552](https://www.federalregister.gov/citation/43-FR-13552), Mar. 31, 1978, as amended by T.D. ATF-51, [43 FR 24243](https://www.federalregister.gov/citation/43-FR-24243), June 2, 1978; [44 FR 55854](https://www.federalregister.gov/citation/44-FR-55854), Sept. 28, 1979; T.D. ATF-62, [44 FR 71720](https://www.federalregister.gov/citation/44-FR-71720), Dec. 11, 1979; T.D. ATF-199, [50 FR 9201](https://www.federalregister.gov/citation/50-FR-9201), Mar. 6, 1985; T.D. ATF-224, [51 FR 7698](https://www.federalregister.gov/citation/51-FR-7698), Mar. 5, 1986; T.D. ATF-477, [67 FR 18088](https://www.federalregister.gov/citation/67-FR-18088), Apr. 15, 2002; T.D. TTB-8, [69 FR 3831](https://www.federalregister.gov/citation/69-FR-3831), Jan. 27, 2004; T.D. TTB-146, [82 FR 1135](https://www.federalregister.gov/citation/82-FR-1135), Jan. 4, 2017; T.D. TTB-196, [89 FR 87944](https://www.federalregister.gov/citation/89-FR-87944), Nov. 6, 2024]
## Subpart C—Miscellaneous Provisions
### Withdrawal or Lading for Use on Certain Vessels and Aircraft
#### § 28.20 Alternate methods or procedures; and emergency variations from requirements.
(a) *Alternate methods or procedures* —
(1) *Application.* An exporter, after receiving approval from the appropriate TTB officer, may use an alternate method or procedure (including alternate construction or equipment) in lieu of a method or procedure prescribed by this part. An exporter wishing to use an alternate method or procedure may apply to the appropriate TTB officer. The exporter shall describe the proposed alternate method or procedure and shall set forth the reasons for its use.
(2) *Approval by appropriate TTB officer.* The appropriate TTB officer may approve the use of an alternate method or procedure if:
(i) The applicant shows good cause for its use;
(ii) It is consistent with the purpose and effect of the procedure prescribed by this part, and provides equal security to the revenue;
(iii) It is not contrary to law; and
(iv) It will not cause an increase in cost to the Government and will not hinder the effective administration of this part.
(3) *Exceptions.* The appropriate TTB officer will not authorize an alternate method or procedure relating to the giving of a bond or the payment of tax.
(4) *Conditions of approval.* An exporter may not employ an alternate method or procedure until the appropriate TTB officer has approved its use. The exporter shall, during the terms of the authorization of an alternate method or procedure, comply with the terms of the approved application.
(b) *Emergency variations from requirements* —
(1) *Application.* When an emergency exists, an exporter may apply to the appropriate TTB officer for a variation from the requirements of this part relating to construction, equipment, and methods of operation. The exporter shall describe the proposed variation and set forth the reasons for using it.
(2) *Approval by appropriate TTB officer.* The appropriate TTB officer may approve an emergency variation from requirements if:
(i) An emergency exists;
(ii) The variation from the requirements is necessary;
(iii) It will afford the same security and protection to the revenue as intended by the specific regulations;
(iv) It will not hinder the effective administration of this part; and
(v) It is not contrary to law.
(3) *Conditions of approval.* An exporter may not employ an emergency variation from the requirements until the appropriate TTB officer has approved its use. Approval of variations from requirements are conditioned upon compliance with the conditions and limitations set forth in the approval.
(4) *Automatic termination of approval.* If the exporter fails to comply in good faith with the procedures, conditions or limitations set forth in the approval, authority for the variation from requirements is automatically terminated and the exporter is required to comply with prescribed requirements of regulations from which those variations were authorized.
(c) *Withdrawal of approval.* If the appropriate TTB officer finds the revenue is jeopardized or the effective administration of this part is hindered by the approval, such TTB officer may withdraw approval for an alternate method or procedure or for an emergency variation from requirements, approved under [paragraph (a)](/current/title-27/section-28.20#p-28.20\(a\)) or [(b)](/current/title-27/section-28.20#p-28.20\(b\)) of this section.
(Act of August 16, 1954, Ch. 736, 68A Stat. 917 ([26 U.S.C. 7805](https://www.govinfo.gov/link/uscode/26/7805)); sec. 201, Pub. L. 85-859, 72 Stat. 1395, as amended ([26 U.S.C. 5552](https://www.govinfo.gov/link/uscode/26/5552)))
\[T.D. ATF-199, [50 FR 9201](https://www.federalregister.gov/citation/50-FR-9201), Mar. 6, 1985, as amended by T.D. ATF-477, [67 FR 18088](https://www.federalregister.gov/citation/67-FR-18088), Apr. 15, 2002; T.D. TTB-8, [69 FR 3831](https://www.federalregister.gov/citation/69-FR-3831), Jan. 27, 2004]
#### § 28.21 General.
Liquors may be withdrawn without payment of tax for lading, and liquors on which the tax has been paid or determined may be laden with benefit of drawback of tax, subject to this part, for use on vessels and aircraft as follows:
(a) Vessels or aircraft operated by the United States;
(b) Vessels of the United States employed in the fisheries as provided in [§ 28.22](/current/title-27/section-28.22) or in the whaling business, or actually engaged in foreign trade or trade between the Atlantic and Pacific ports of the United States or between the United States and any of its possessions, or between Hawaii and any other part of the United States or between Alaska and any other part of the United States;
(c) Aircraft registered in the United States and actually engaged in foreign trade or trade between the United States and any of its possessions, or between Hawaii and any other part of the United States or between Alaska and any other part of the United States;
(d) Vessels of war of any foreign nation;
(e) Foreign vessels employed in the fisheries as provided in [§ 28.22](/current/title-27/section-28.22) or in the whaling business, or actually engaged in foreign trade or trade between the United States and any of its possessions, or between Hawaii and any other part of the United States or between Alaska and any other part of the United States; where such trade by foreign vessels is permitted; or
(f) Aircraft registered in any foreign country and actually engaged in foreign trade or trade between the United States and any of its possessions, or between Hawaii and any other part of the United States or between Alaska and any other part of the United States, where trade by foreign aircraft is permitted, and where the Secretary of the Treasury shall have been advised by the Secretary of Commerce that he or she has found such foreign country allows, or will allow, substantially reciprocal privileges in respect to aircraft registered in the United States.
(46 Stat. 690, as amended; 72 Stat. 1334, 1335, 1336, 1362, 1380; [19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309), [26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5055](https://www.govinfo.gov/link/uscode/26/5055), [5062](https://www.govinfo.gov/link/uscode/26/5062), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362))
\[T.D. 6588, [27 FR 773](https://www.federalregister.gov/citation/27-FR-773), Jan. 26, 1962. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975 and amended by T.D. TTB-8, [69 FR 3831](https://www.federalregister.gov/citation/69-FR-3831), Jan. 27, 2004; T.D. TTB-196, [89 FR 87945](https://www.federalregister.gov/citation/89-FR-87945), Nov. 6, 2024]
#### § 28.22 Vessels employed in the fisheries.
Liquors may be withdrawn or laden under the provisions of [paragraphs (b)](/current/title-27/section-28.21#p-28.21\(b\)) and [(e) of § 28.21](/current/title-27/section-28.21#p-28.21\(e\)) relating to vessels employed in the fisheries, only for use on vessels of the United States documented to engage in the fisheries and foreign fishing vessels of 5 net tons or over if the district director of customs is satisfied by reason of the quantity requested in the light of (a) whether the vessel is employed in substantially continuous fishing activities, and (b) the vessel's complement, that none of the liquors to be withdrawn or laden are intended to be removed from the vessel in, or otherwise returned to, the United States. Such withdrawal or lading shall be conditioned upon compliance with the applicable provisions of this part. Lading of such liquors for use on such vessels shall be subject to approval by the district director of customs of a special written application by the withdrawer or the vessel's master on customs Form 5125 (in duplicate) and a statement by the withdrawer in his application or notice on the required TTB Form 5100.11, 5110.30, 1582-A (5120.24), 1582-B (5130.6), or 1689 (5130.12), as the case may be, that the liquors are to be laden for use as supplies on a vessel employed in the fisheries. The original application on customs Form 5125, after approval, shall be stamped with the serial number of the TTB Form 5100.11, 5110.30, 1582-A (5120.24), 1582-B (5130.6), or 1689 (5130.12), as the case may be, and the date thereof, and shall be returned by the district director of customs to the withdrawer or vessel's master for use as prescribed below. Approval of each such application shall be subject to the condition that the original shall be presented thereafter by the withdrawer or the vessel's master to the district director of customs within 24 hours (excluding Saturday, Sunday, and holidays) after each subsequent arrival of the vessel at a customs port or station and that an accounting shall be made at the time of such presentation of the disposition of the liquors until the district director of customs is satisfied that they have been consumed on board, or landed under customs supervision, and takes up the authorization. The approval of customs Form 5125 shall be subject to the further condition that any such liquors remaining on board while the vessel is in port shall be safeguarded in the manner and to such extent as the director of the port or place of arrival shall deem necessary. When such liquors have been accounted for to the satisfaction of the district director of customs, he shall execute his certificate of lading and use on both copies of the TTB Form 5100.11, 5110.30, 1582-A (5120.24), 1582-B (5130.6), or 1689 (5130.12), as the case may be, and forward the original of the form according to its instructions. In the event of a failure on the part of the withdrawer or the master of the vessel to comply with the conditions of this section or upon receipt of evidence that the liquors were not lawfully used as supplies on the vessel, the district director of customs shall advise the appropriate TTB officer of all the facts in the case for determination of any liability incurred. In the case of liquors withdrawn without payment of tax, assessment of tax liability found to have been incurred shall be made against the principal on the bond or, if no bond is required, against the person liable for the tax. In the case of taxpaid or tax determined liquors, the appropriate TTB officer shall determine as to whether to make demand upon the principal and the surety on the bond or to disallow the claim as the case may be.
Note:
As used in this section, the word “withdrawer” shall mean the person executing the application or notice, TTB Form 5100.11, 5110.30, 1582-A (5120.24), 1582-B (5130.6), or 1689 (5130.12), as the case may be.
(46 Stat. 690, as amended, 72 Stat. 1334, 1335, 1336, 1362, 1380; [19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309), [26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5055](https://www.govinfo.gov/link/uscode/26/5055), [5062](https://www.govinfo.gov/link/uscode/26/5062), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960, as amended by T.D. 7006, [34 FR 2251](https://www.federalregister.gov/citation/34-FR-2251), Feb. 15, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### Editorial Note:
For Federal Register citations affecting [§ 28.22](/current/title-27/section-28.22), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
#### § 28.23 Reciprocating foreign countries.
The appropriate TTB officer may approve applications relating to the withdrawal or lading of liquors for use on aircraft of those foreign countries which will allow, to aircraft registered in the United States and engaged in foreign trade, privileges substantially reciprocal to the privileges allowed herein to aircraft of a foreign country. Where application is made to withdraw or lade liquors for use on aircraft of other countries, which it is claimed reciprocate similar privileges to aircraft of the United States, the applicant must first establish the right of such withdrawal or lading. In appropriate cases, the applicant should request the Secretary of Commerce to find and advise the Secretary of the Treasury that such foreign country or countries allow, or will allow, substantially reciprocal privileges to aircraft of the United States.
(46 Stat. 690, as amended; [19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960, as amended by T.D. 7006, [34 FR 2251](https://www.federalregister.gov/citation/34-FR-2251), Feb. 15, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975 and amended by T.D. TTB-8, [69 FR 3831](https://www.federalregister.gov/citation/69-FR-3831), Jan. 27, 2004]
### Manufacturing Bonded Warehouses
#### § 28.25 General.
The proprietor of a duly constituted manufacturing bonded warehouse, established in accordance with law and the regulations in [19 CFR chapter I](/current/title-19/chapter-I), may withdraw distilled spirits or wine from any distilled spirits plant or bonded wine cellar, as the case may be, without payment of tax, for use in the manufacture of products for export, or for shipment in bond to Puerto Rico, or for use by foreign governments, organizations, and individuals, as authorized by [26 U.S.C. 5066](https://www.govinfo.gov/link/uscode/26/5066), [5214(a)(6)](https://www.govinfo.gov/link/uscode/26/5214) and [5362](https://www.govinfo.gov/link/uscode/26/5362); and [19 U.S.C. 1311](https://www.govinfo.gov/link/uscode/19/1311). The proprietor of the manufacturing bonded warehouse shall furnish bond in accordance with the provisions of [§ 28.63](/current/title-27/section-28.63) or [§ 28.64](/current/title-27/section-28.64).
(Sec. 311, Tariff Act of 1930, 46 Stat. 691, as amended ([19 U.S.C. 1311](https://www.govinfo.gov/link/uscode/19/1311)); sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1380, as amended ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362)); sec. 3, Pub. L. 91-659, 84 Stat. 1965, as amended ([26 U.S.C. 5066](https://www.govinfo.gov/link/uscode/26/5066)))
\[T.D. ATF-88, [46 FR 39814](https://www.federalregister.gov/citation/46-FR-39814), Aug. 5, 1981, as amended by T.D. TTB-8, [69 FR 3831](https://www.federalregister.gov/citation/69-FR-3831), Jan. 27, 2004]
### Customs Bonded Warehouses
#### § 28.26 Entry of distilled spirits into customs bonded warehouses.
(a) *Distilled spirits withdrawn without payment of tax.*
(1) Bottled distilled spirits may, subject to this part, be withdrawn from bonded premises for transfer to customs bonded warehouses in which imported distilled spirits are permitted to be stored in bond for entry pending withdrawal as provided in [§ 28.27](/current/title-27/section-28.27). Withdrawals from bonded premises under the provisions of this paragraph shall be treated as withdrawals for exportation under the provisions of [26 U.S.C. 5214(a)(4)](https://www.govinfo.gov/link/uscode/26/5214).
(2) Distilled spirits may, subject to this part, be withdrawn from bonded premises for transfer (for the purpose of storage pending exportation) to any customs bonded warehouse from which distilled spirits may be exported. These withdrawals shall be treated as withdrawals for exportation under the provisions of [26 U.S.C. 5214(a)(9)](https://www.govinfo.gov/link/uscode/26/5214).
(b) *Bottled distilled spirits eligible for export with benefit of drawback.* Bottled distilled spirits eligible for export with benefit of drawback may, subject to this part, be transferred to customs bonded warehouses in which imported distilled spirits are permitted to be stored, and entered pending withdrawal as provided in [§ 28.28](/current/title-27/section-28.28), as if such spirits were for exportation.
(c) *Time deemed exported.* For the purpose of this part, distilled spirits entered into a customs bonded warehouse as provided in this section shall be deemed exported at the time so entered.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1381, 1382, ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214)); sec. 3, Pub. L. 91-659, 84 Stat. 1965, as amended ([26 U.S.C. 5066](https://www.govinfo.gov/link/uscode/26/5066), [5370](https://www.govinfo.gov/link/uscode/26/5370), [5371](https://www.govinfo.gov/link/uscode/26/5371); [26 U.S.C. 7805](https://www.govinfo.gov/link/uscode/26/7805)))
\[T.D. 7112, [36 FR 8580](https://www.federalregister.gov/citation/36-FR-8580), May 8, 1971. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-206, [50 FR 23956](https://www.federalregister.gov/citation/50-FR-23956), June 7, 1985; T.D. TTB-8, [69 FR 3831](https://www.federalregister.gov/citation/69-FR-3831), Jan. 27, 2004]
#### § 28.27 Entry of wine into customs bonded warehouses.
Upon filing of the application or notice prescribed by [§ 28.122(a)](/current/title-27/section-28.122#p-28.122\(a\)), wine may be withdrawn from a bonded wine cellar for transfer to any customs bonded warehouse for entry pending withdrawal as provided in [§ 28.28](/current/title-27/section-28.28). Such withdrawal from bonded wine cellars is governed by the provisions of [subpart F of this part](/current/title-27/part-28/subpart-F). Wine so transferred to customs bonded warehouses shall be entered, stored, and accounted for in such warehouses under the appropriate provisions of [19 CFR chapter I](/current/title-19/chapter-I).
(Sec. 2, Pub. L. 96-601, 94 Stat. 3495 ([26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362)))
\[T.D. ATF-88, [46 FR 39815](https://www.federalregister.gov/citation/46-FR-39815), Aug. 5, 1981, as amended by T.D. TTB-8, [69 FR 3831](https://www.federalregister.gov/citation/69-FR-3831), Jan. 27, 2004]
#### § 28.28 Withdrawal of wine and distilled spirits from customs bonded warehouses.
Wine and bottled distilled spirits entered into customs bonded warehouses as provided in [§ 28.26 (a)](/current/title-27/section-28.26#p-28.26\(a\)) or [(b)](/current/title-27/section-28.26#p-28.26\(b\)) and [§ 28.27](/current/title-27/section-28.27) may, under the appropriate provisions of [19 CFR chapter I](/current/title-19/chapter-I), be withdrawn from such warehouses for consumption in the United States by and for the official or family use of foreign governments, organizations, and individuals who are entitled to withdraw imported wine and distilled spirits from a warehouse free of tax. Distilled spirits and wine entered into customs bonded warehouses under the provisions of [§§ 28.26(a)(2)](/current/title-27/section-28.26#p-28.26\(a\)\(2\)) and [28.27](/current/title-27/section-28.27) may be withdrawn for exportation, subject to the provisions of [19 CFR chapter I](/current/title-19/chapter-I). Distilled spirits and wine transferred to customs bonded warehouses shall be entered into, stored and accounted for in, and withdrawn from, such warehouses under the appropriate provisions of [19 CFR chapter I](/current/title-19/chapter-I). Wine and bottled distilled spirits, originally transferred to customs bonded warehouses for the purpose of withdrawal by foreign embassies, legations, etc., as authorized by law, may be withdrawn from such warehouses for domestic use, in which event they shall be treated as American goods exported and returned.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214)); sec. 3, Pub. L. 91-659, 84 Stat. 1965, as amended ([26 U.S.C. 5066](https://www.govinfo.gov/link/uscode/26/5066)); sec. 2, Pub. L. 96-601, 94 Stat. 3495 ([26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362)))
\[T.D. ATF-88, [46 FR 39815](https://www.federalregister.gov/citation/46-FR-39815), Aug. 5, 1981, as amended by T.D. TTB-8, [69 FR 3831](https://www.federalregister.gov/citation/69-FR-3831), Jan. 27, 2004]
### Foreign-Trade Zones
#### § 28.30 Export status.
(a) Distilled spirits and wines manufactured, produced, bottled in bottles packed in containers, or packaged in casks or other bulk containers in the United States, and beer brewed or produced in the United States may be transferred to a foreign-trade zone for the sole purpose of exportation, or storage pending exportation. Liquors deposited in a foreign-trade zone under this part solely for such purposes are considered to be exported. Export status is not acquired until application on Form 214 for admission of the liquors into the zone has been approved by the district director of customs under the appropriate provision of [19 CFR chapter I](/current/title-19/chapter-I), and the required certification of deposit has been made on the TTB form prescribed in this part.
(b) The provisions of [subpart H of this part](/current/title-27/part-28/subpart-H) do not apply to specially denatured spirits transferred to a foreign-trade zone for use in the manufacture of articles pursuant to the provisions of [19 U.S.C. 81c(c)](https://www.govinfo.gov/link/uscode/19/81c). Transfer of domestic specially denatured spirits to a qualified user in a foreign-trade zone is made free of tax under the provisions of [part 20 of this chapter](/current/title-27/part-20). Such transfer does not place the domestic specially denatured spirits in an export status.
(48 Stat. 999, as amended ([19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c)))
\[T.D. ATF-274, [53 FR 25157](https://www.federalregister.gov/citation/53-FR-25157), July 5, 1988, as amended by T.D. TTB-8, [69 FR 3831](https://www.federalregister.gov/citation/69-FR-3831), Jan. 27, 2004]
### Voluntary Destruction of Liquors After Receipt in a Foreign-Trade Zone
#### § 28.35 General.
Liquors may not, under the law, be transferred to a foreign-trade zone for the purpose of destruction. However, liquors transported to and deposited in a foreign-trade zone for exportation or for storage pending exportation may be destroyed under the supervision of the district director of customs, where it is shown to the satisfaction of the appropriate TTB officer that the liquors, after deposit in a zone, have become unmerchantable or unfit for export.
(48 Stat. 999, as amended; [19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960, as amended by T.D. 7006, [34 FR 2251](https://www.federalregister.gov/citation/34-FR-2251), Feb. 15, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975 and amended by T.D. TTB-8, [69 FR 3831](https://www.federalregister.gov/citation/69-FR-3831), Jan. 27, 2004]
#### § 28.36 Application.
Liquors deposited in a foreign-trade zone from the United States which have become unmerchantable or unfit for export may be destroyed. The exporter shall prepare a letter application, in duplicate, and submit it to the appropriate TTB officer. The application shall identify the name and address of the exporter and contain the following information:
(a) The kind and quantity of the liquor, the serial numbers, if any, of the containers thereof, and identification of the zone in which the liquor is stored;
(b) The name and address of the producer bottler or packager of the liquor, and the name, registry number, if any, and location of the plant, warehouse or other establishment from which such liquors were withdrawn for transportation to and deposit in the foreign-trade zone;
(c) The date, form, and serial number of the TTB Form 5100.11, 5110.30, 1582-A (5120.24), 1582-B (5130.6), or 1689 (5130.12), as the case may be; and, in the case of liquors on which drawback of internal revenue tax has been allowed, the TTB assigned claim number;
(d) Whether the liquor has become unmerchantable or unfit for export after deposit in the zone, together with all the known facts relating thereto; and
(e) Whether the unmerchantable or unfit liquor is covered by valid insurance in excess of the market value thereof, exclusive of tax. If the liquor is insured, the application shall show its market value, the amount and date of each and every policy of insurance, the name and location of the company by which each and every policy was issued, the name and address of the bona fide owner of the liquor, and to the best of the affiant's knowledge, whether any other person or party is indemnified against the loss of the liquor by reason of its spoilage or destruction.
Such application shall be signed by the exporter or his authorized agent and be executed under the penalties of perjury. The appropriate TTB officer may require any further evidence as is deemed necessary. The operator of the foreign-trade zone shall countersign the application or otherwise indicate thereon his knowledge of and concurrence in the application to destroy the liquor. The exporter shall file the application with the district director of customs in whose district the foreign-trade zone is located; at the same time the exporter shall likewise file Zone Form E in accordance with Customs Regulations ([19 CFR chapter I](/current/title-19/chapter-I)). On receipt of the application the district director of customs shall determine the completeness thereof and shall report any facts relating to the condition of the liquor of which he may have knowledge. The original application shall be forwarded to the appropriate TTB officer and the district director of customs shall retain the copy for his files.
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960, as amended by T.D. 7006, [34 FR 2251](https://www.federalregister.gov/citation/34-FR-2251), Feb. 15, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### Editorial Note:
For Federal Register citations affecting [§ 28.36](/current/title-27/section-28.36), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
#### § 28.37 Action by appropriate TTB officer.
The appropriate TTB officer shall carefully examine the application to see that all the required information has been furnished and shall cause an investigation to be made or require any additional evidence, including samples, to be submitted if necessary. If the appropriate TTB officer finds that the liquors were transported to and deposited in a foreign-trade zone in good faith for the purpose of exportation or storage pending exportation, and that the liquors, after deposit in the zone, have become unmerchantable or unfit for export, he may approve the application and authorize the destruction of the liquor described therein under the supervision of the district director of customs. On approval or disapproval of the application, the appropriate TTB officer shall advise the district director of customs of his action.
\[T.D. ATF-51,[43 FR 24244](https://www.federalregister.gov/citation/43-FR-24244), June 2, 1978, as amended by T.D. TTB-8, [69 FR 3831](https://www.federalregister.gov/citation/69-FR-3831), Jan. 27, 2004]
#### § 28.38 Action by district director of customs.
On receipt of the appropriate TTB officer's authorization for destruction of the liquor, or his disapproval of the application for destruction, the district director of customs shall act upon the exporter's application on Zone Form E and dispose of it in accordance with the applicable provisions of Customs Regulations ([19 CFR chapter I](/current/title-19/chapter-I)). Where the appropriate TTB officer has authorized the destruction of the liquor, such destruction shall be accomplished under customs supervision.
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960, as amended by T.D. 7006, [34 FR 2251](https://www.federalregister.gov/citation/34-FR-2251), Feb. 15, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. TTB-8, [69 FR 3831](https://www.federalregister.gov/citation/69-FR-3831), Jan. 27, 2004]
### Evidence of Exportation and Use
#### § 28.40 Evidence of exportation: distilled spirits and wine.
The exportation of any shipment of distilled spirits or wine may be evidenced by:
(a) A copy of the export bill of lading ([§ 28.250](/current/title-27/section-28.250)); or
(b) A copy of the railway express receipt ([§ 28.251](/current/title-27/section-28.251)); or
(c) A copy of the air express receipt ([§ 28.252](/current/title-27/section-28.252)); or
(d) A copy of the through bill of lading where exportation is to a contiguous foreign country ([§ 28.250](/current/title-27/section-28.250)); or
(e) A certificate by the export carrier, as provided for in [§ 28.253](/current/title-27/section-28.253).
(72 Stat. 1334, 1335, 1336, 1362, 1380; [26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5055](https://www.govinfo.gov/link/uscode/26/5055), [5062](https://www.govinfo.gov/link/uscode/26/5062), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-224, [51 FR 7698](https://www.federalregister.gov/citation/51-FR-7698), Mar. 5, 1986; T.D. TTB-8, [69 FR 3831](https://www.federalregister.gov/citation/69-FR-3831), Jan. 27, 2004]
#### § 28.41 Evidence of lading for use on vessels or aircraft: distilled spirits and wine.
The lading of distilled spirits or wine for use on vessels or aircraft may be evidenced by submission of a receipt procured under the provisions of [§ 28.268](/current/title-27/section-28.268).
(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended ([19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309)); sec. 201, Pub. L. 85-859; 72 Stat. 1362, as amended, 1380, as amended ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362)))
\[T.D. ATF-224, [51 FR 7698](https://www.federalregister.gov/citation/51-FR-7698), Mar. 5, 1986, as amended by T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004]
#### § 28.42 Evidence of deposit.
The deposit of distilled spirits in a customs bonded warehouse or distilled spirits and wines in a foreign-trade zone with benefit of drawback may be evidenced by a copy of the transportation bill of lading obtained under the provisions of [§ 28.250](/current/title-27/section-28.250).
(48 Stat. 999, as amended, 84 Stat. 1965; [19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c), [26 U.S.C. 5066](https://www.govinfo.gov/link/uscode/26/5066))
\[T.D. 7112, [36 FR 8580](https://www.federalregister.gov/citation/36-FR-8580), May 8, 1971. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975 and amended by T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004]
#### § 28.43 Evidence of exportation and lading for use on vessels and aircraft: beer.
(a) *Exportation.* The exportation of beer to a foreign country or possession will be fully evidenced by any of the following documents:
(1) Customs certification of lading and clearance on Form 1582-B (5130.6) or Form 1689 (5130.12) under [subpart M of this part](/current/title-27/part-28/subpart-M); or
(2) For shipment to the armed forces, certification by a military officer on Form 1582-B (5130.6) or Form 1689 (5130.12) under [§ 28.275](/current/title-27/section-28.275); or
(3) A bill of lading ([§ 28.250](/current/title-27/section-28.250)), a railway express receipt ([§ 28.251](/current/title-27/section-28.251)), or an air express or air freight bill of lading ([§ 28.252](/current/title-27/section-28.252)), when such bills of lading or receipt show exportation to a foreign country or possession; or
(4) A certificate issued by an export carrier under [§ 28.253](/current/title-27/section-28.253) attesting to exportation to a foreign country or possession; or
(5) A landing certificate issued by an official of the country or possession where the beer has actually landed; or
(6) Any other evidence of exportation approved by the appropriate TTB officer.
(b) *Use as supplies on vessels and aircraft.* The lading of beer for use on vessels or aircraft will be fully evidenced by:
(1) For fishing vessels only, customs certification of lading and use on Form 1582-B (5130.6) or Form 1689 (5130.12) under [§ 28.23](/current/title-27/section-28.23); or
(2) Customs certification of lading on Form 1582-B (5130.6) or Form 1689 (5130.12) under [§§ 28.264](/current/title-27/section-28.264) or [28.282](/current/title-27/section-28.282); or
(3) Any other evidence of exportation approved by the appropriate TTB officer.
(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended ([19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309)); sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended, 1335, as amended ([26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5055](https://www.govinfo.gov/link/uscode/26/5055)))
\[T.D. ATF-224, [51 FR 7698](https://www.federalregister.gov/citation/51-FR-7698), Mar. 5, 1986, as amended by T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004]
### Retention of Records
#### § 28.45 Retention of records.
File copies of forms required by this part to be retained by any proprietor or claimant, and all records, documents, or copies of records and documents supporting such forms, shall be preserved by such proprietor or claimant for a period of not less than two years, and during such period shall be available, during business hours, for inspection and the taking of abstracts therefrom by appropriate TTB officers.
(Approved by the Office of Management and Budget under control number 1512-0385)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1342, as amended, 1381, as amended, 1390, as amended, 1395, as amended ([26 U.S.C. 5114](https://www.govinfo.gov/link/uscode/26/5114), [5367](https://www.govinfo.gov/link/uscode/26/5367), [5415](https://www.govinfo.gov/link/uscode/26/5415), [5555](https://www.govinfo.gov/link/uscode/26/5555)); sec. 807, Pub. L. 96-39, 93 Stat. 283 ([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207)))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71721](https://www.federalregister.gov/citation/44-FR-71721), Dec. 11, 1979; T.D. ATF-172, [49 FR 14943](https://www.federalregister.gov/citation/49-FR-14943), Apr. 16, 1984; T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004]
### Penalties of Perjury
#### § 28.48 Execution under penalties of perjury.
When a return, form, or other document called for under this part is required by this part or in the instructions on or with the return, form, or other document to be executed under penalties of perjury, it shall be so executed, as defined in [subpart B of this part](/current/title-27/part-28/subpart-B), and shall be signed by the proprietor, or other duly authorized person.
(68A Stat. 749 ([26 U.S.C. 6065](https://www.govinfo.gov/link/uscode/26/6065)))
## Subpart D—Bonds and Consents of Surety
#### § 28.51 General.
(a) *Bond requirements.* Every person required by this part to file a bond or consent of surety must prepare and execute it on the prescribed form and file it in accordance with its instructions and the procedures of this part. The procedures in [parts 19](/current/title-27/part-19), [24](/current/title-27/part-24) or [25 of this chapter](/current/title-27/part-25) govern bonds covering distilled spirits plants, bonded wine cellars and breweries, respectively.
(b) *Exemption from bond requirements.* If a taxpayer described in this paragraph exports distilled spirits, wine, or beer for which a bond is otherwise required under this part, the taxpayer is not required to file a bond for the exportation if all the following are true:
(1) In the case of exportation of distilled spirits or wine, the distilled spirits or wine is for nonindustrial use; and
(2) The taxpayer:
(i) Reasonably expects to be liable for not more than \$50,000 in taxes described in [26 U.S.C. 5061(d)(4)](https://www.govinfo.gov/link/uscode/26/5061) during the current calendar year;
(ii) Was liable for not more than \$50,000 in such taxes in the preceding calendar year; and
(iii) Pays such taxes on a deferred basis using a semimonthly, quarterly, or annual return period as described in [26 U.S.C. 5061(d)](https://www.govinfo.gov/link/uscode/26/5061).
(c) *Definitions.* For purposes of [paragraph (b)](/current/title-27/section-28.51#p-28.51\(b\)) of this section, the following terms have the meanings indicated:
*Nonindustrial use.* The nonindustrial uses of distilled spirits and wine are defined in [subpart D of part 1 of this chapter](/current/title-27/part-1/subpart-D).
*Reasonably expects.* When used with reference to a taxpayer, *reasonably expects* means that there is no existing or anticipated circumstances known to the taxpayer (such as an increase in production capacity) that would cause the taxpayer's tax liability to exceed the prescribed limit.
*Taxpayer.* A *taxpayer* is an individual, corporation, partnership, or other entity that is assigned a single Employer Identification Number (EIN) as defined in [26 CFR 301.7701-12](/current/title-26/section-301.7701-12).
\[T.D. ATF-477, [67 FR 18089](https://www.federalregister.gov/citation/67-FR-18089), Apr. 15, 2002, as amended by T.D. TTB-146. [82 FR 1135](https://www.federalregister.gov/citation/82-FR-1135), Jan. 4, 2017]
#### § 28.52 Corporate surety.
(a) Surety bonds required by this part may be given only with corporate sureties holding certificates of authority from, and subject to the limitations prescribed by, the Secretary as set forth in the current revision of Treasury Department Circular 570 (Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies).
(b) Treasury Department Circular 570 is published in the Federal Register annually on the first business day in July, and supplemental changes are published periodically thereafter (see *[https://www.federalregister.gov](https://www.federalregister.gov)*). The most recent circular and any supplemental changes to it may be viewed on the Bureau of the Fiscal Service website (see *[https://fiscal.treasury.gov](https://fiscal.treasury.gov)*).
\[T.D. ATF-92, [46 FR 46921](https://www.federalregister.gov/citation/46-FR-46921), Sept. 23, 1981, as amended by T.D. TTB-146, [82 FR 1135](https://www.federalregister.gov/citation/82-FR-1135), Jan. 4, 2017; T.D. TTB-196, [89 FR 87945](https://www.federalregister.gov/citation/89-FR-87945), Nov. 6, 2024]
#### § 28.52a Filing of powers of attorney.
Each bond, and each consent to changes in the terms of a bond, shall be accompanied by a power of attorney authorizing the agent or officer who executed the bond or consent to so act on behalf of the surety. The appropriate TTB officer who is authorized to approve the bond, may, when he deems it necessary, require additional evidence of the authority of the agent or officer to execute the bond or consent.
(61 Stat. 648; [6 U.S.C. 6](https://www.govinfo.gov/link/uscode/6/6), [7](https://www.govinfo.gov/link/uscode/6/7))
\[T.D. 6895, [31 FR 11976](https://www.federalregister.gov/citation/31-FR-11976), Sept. 13, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975 and amended by T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004]
#### § 28.52b Execution of powers of attorney.
The power of attorney shall be prepared on a form provided by the surety company and executed under the corporate seal of the company. If the power of attorney submitted is other than a manually signed original, it shall be accompanied by certification of its validity.
(61 Stat. 648; [6 U.S.C. 6](https://www.govinfo.gov/link/uscode/6/6), [7](https://www.govinfo.gov/link/uscode/6/7))
\[T.D. 6895, [31 FR 11976](https://www.federalregister.gov/citation/31-FR-11976), Sept. 13, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### § 28.53 Deposit of securities or cash (including cash equivalent) in lieu of corporate surety.
(a) *Deposit of securities.* In lieu of corporate surety, the principal may pledge and deposit, as surety for his bond, securities which are transferable and are guaranteed as to both interest and principal by the United States, in accordance with the provisions of [31 CFR part 225](/current/title-31/part-225).
(b) *Deposit of cash (including cash equivalent).* In lieu of corporate surety, a person may file a bond that guarantees payment of the liability by submitting cash or its equivalent (including a money order, cashier's check, or personal check). Cash or its equivalent must be no less than the penal sums of the required bonds. Cash equivalents must be payable to the Alcohol and Tobacco Tax and Trade Bureau.
(61 Stat. 650; [6 U.S.C. 15](https://www.govinfo.gov/link/uscode/6/15))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and further redesignated by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan 27, 2004, and as amended by T.D. TTB-146, [82 FR 1135](https://www.federalregister.gov/citation/82-FR-1135), Jan. 4, 2017]
#### § 28.54 Consents of surety.
Consents of surety to changes in the terms of bonds shall be executed on TTB Form 5000.18 by the principal and by the surety with the same formality and proof of authority as is required for the execution of bonds.
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and further redesignated by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan 27, 2004, and as amended by T.D. TTB-146, [82 FR 1135](https://www.federalregister.gov/citation/82-FR-1135), Jan. 4, 2017]
#### § 28.55 Authority to approve bonds and consents of surety.
Appropriate TTB officers are authorized to approve all bonds and consents of surety required by this part.
\[T.D. 6895, [31 FR 11976](https://www.federalregister.gov/citation/31-FR-11976), Sept. 13, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975 and amended by T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004]
#### § 28.56 Disapproval of bonds or consents of surety.
The appropriate TTB officer may disapprove any bond prescribed by this part, or any consent of surety submitted in respect thereto, if the principal or any person owning, controlling, or actively participating in the management of the business of the principal shall have been previously convicted, in a court of competent jurisdiction, of:
(a) Any fraudulent noncompliance with any provision of any law of the United States, if such provision related to internal revenue or customs taxation of spirits, wines, or beer, or if such offense shall have been compromised with the person on payment of penalties or otherwise; or
(b) Any felony under a law of any State, Territory, or the District of Columbia, or the United States, prohibiting the manufacture, sale, importation, or transportation of spirits, wine, beer, or other intoxicating liquor.
(72 Stat. 1336, 1352, 1353, 1394; [26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062), [5175](https://www.govinfo.gov/link/uscode/26/5175), [5177](https://www.govinfo.gov/link/uscode/26/5177), [5551](https://www.govinfo.gov/link/uscode/26/5551))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71721](https://www.federalregister.gov/citation/44-FR-71721), Dec. 11, 1979; T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004]
#### § 28.57 Appeal to Administrator.
Where a bond or consent of surety is disapproved by the appropriate TTB officer, the person giving the bond may appeal from such disapproval to the Administrator, who will hear such appeal. The decision of the Administrator shall be final.
(72 Stat. 1394; [26 U.S.C. 5551](https://www.govinfo.gov/link/uscode/26/5551))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960, as amended by T.D. 7006, [34 FR 2251](https://www.federalregister.gov/citation/34-FR-2251), Feb. 15, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004]
#### § 28.58 Operations or unit bond—distilled spirits.
(a) *Spirits.* Where, as authorized in [§ 28.91](/current/title-27/section-28.91), spirits are withdrawn without payment of tax, from the bonded premises of a distilled spirits plant on notice of the proprietor thereof, the approved operations or unit bond must cover such withdrawals if the proprietor is required to give a bond under [part 19 of this chapter](/current/title-27/part-19).
(b) *Wine.* Where the provisions of [part 19 of this chapter](/current/title-27/part-19) require an operations or unit bond to be given and approved to cover the operations of a distilled spirits plant and an adjacent bonded wine cellar, such bond will cover the withdrawal of wine without payment of tax, as authorized in [§ 28.121](/current/title-27/section-28.121), from such bonded wine cellar on application for such withdrawal by the proprietor.
(c) *Specially denatured spirits.* Where specially denatured spirits are withdrawn free of tax, as authorized in [§ 28.151](/current/title-27/section-28.151), from the bonded premises of a distilled spirits plant on application of the proprietor thereof, the proprietor shall file a consent of surety extending the terms of the operations or unit bond, which consent shall be in the following form:
The obligors agree to extend the terms of said bond to cover all liability that may be incurred on all specially denatured spirits withdrawn by the principal for exportation or transfer to a foreign-trade zone, for which satisfactory evidence of exportation, or of deposit in a foreign-trade zone, as required by law and regulations, is not submitted to the appropriate TTB officer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1352, as amended, 1362, as amended ([26 U.S.C. 5175](https://www.govinfo.gov/link/uscode/26/5175), [5214](https://www.govinfo.gov/link/uscode/26/5214)); Sec. 3, Pub. L. 91-659, 84 Stat. 1965, as amended ([26 U.S.C. 5066](https://www.govinfo.gov/link/uscode/26/5066)); Sec. 805, Pub. L. 96-39, 93 Stat. 276 ([26 U.S.C. 5173](https://www.govinfo.gov/link/uscode/26/5173)))
\[T.D. ATF-62, [44 FR 71721](https://www.federalregister.gov/citation/44-FR-71721), Dec. 11, 1979, as amended by T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004; T.D. TTB-146, [82 FR 1135](https://www.federalregister.gov/citation/82-FR-1135), Jan. 4, 2017]
#### § 28.59 Bond, Form 5120.36.
Where the operations of a bonded wine cellar are covered by bond, Form 5120.36, as provided in [part 24 of this chapter](/current/title-27/part-24), such bond shall cover the withdrawal of wine without payment of tax, as authorized in [§ 28.121](/current/title-27/section-28.121), from such bonded wine cellar by the proprietor of the bonded wine cellar.
(72 Stat. 1379, 1380; [26 U.S.C. 5354](https://www.govinfo.gov/link/uscode/26/5354), [5362](https://www.govinfo.gov/link/uscode/26/5362), as amended by T.D. ATF-299, [55 FR 25033](https://www.federalregister.gov/citation/55-FR-25033), June 19, 1990; T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004]
#### § 28.60 Brewer's bond, Form 5130.22.
When beer or beer concentrate is removed from a brewery without payment of tax for any of the purposes authorized in [§ 28.141](/current/title-27/section-28.141), the brewer's bond, Form 5130.22, will cover the removals if a bond is required to be furnished under the provisions of [part 25 of this chapter](/current/title-27/part-25).
(49 Stat. 999, as amended ([19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c)); sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended, 1388, as amended ([26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5401](https://www.govinfo.gov/link/uscode/26/5401)))
\[T.D. TTB-146, [82 FR 1136](https://www.federalregister.gov/citation/82-FR-1136), Jan. 4, 2017]
#### § 28.61 Bond, Form 5100.25
If a specific lot of distilled spirits or wine is to be withdrawn without payment of tax, as authorized in [§ 28.91(a)(1)](/current/title-27/section-28.91#p-28.91\(a\)\(1\)), [(2)](/current/title-27/section-28.91#p-28.91\(2\)), [(3)](/current/title-27/section-28.91#p-28.91\(3\)), [(5)](/current/title-27/section-28.91#p-28.91\(5\)), or [§ 28.121(a)](/current/title-27/section-28.121#p-28.121\(a\)), [(b)](/current/title-27/section-28.121#p-28.121\(b\)), [(c)](/current/title-27/section-28.121#p-28.121\(c\)), or [(d)](/current/title-27/section-28.121#p-28.121\(d\)), by a person other than the proprietor of the bonded premises, a specific bond on TTB Form 5100.25 shall be filed by the exporter, as provided in [§ 28.51](/current/title-27/section-28.51). The penal sum of the bond shall not be less than the tax prescribed by law on the quantity of spirits or wine to be withdrawn. However, the maximum penal sum of the bond shall not exceed $200,000 but in no case shall the penal sum be less than $1,000.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1352, as amended, 1362, as amended, 1380, as amended, 1381, 1382 ([26 U.S.C. 5175](https://www.govinfo.gov/link/uscode/26/5175), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362)) sec. 3. Pub. L. 91-659, 84 Stat. 1965, as amended ([26 U.S.C. 5066](https://www.govinfo.gov/link/uscode/26/5066), [5370](https://www.govinfo.gov/link/uscode/26/5370), [5371](https://www.govinfo.gov/link/uscode/26/5371)))
\[T.D. ATF-88, [46 FR 39815](https://www.federalregister.gov/citation/46-FR-39815), Aug. 5, 1981, as amended by T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004; T.D. TTB-146, [82 FR 1134](https://www.federalregister.gov/citation/82-FR-1134), Jan. 4, 2017]
#### § 28.62 Bond, Form 5100.30.
(a) *Requirement for bond.* If a person other than the proprietor of the bonded premises withdraws distilled spirits or wine without payment of tax, as authorized by [§ 28.91(a)(1)](/current/title-27/section-28.91#p-28.91\(a\)\(1\)), [(2)](/current/title-27/section-28.91#p-28.91\(2\)), [(3)](/current/title-27/section-28.91#p-28.91\(3\)), [(5)](/current/title-27/section-28.91#p-28.91\(5\)), or [§ 28.121(a)](/current/title-27/section-28.121#p-28.121\(a\)), [(b)](/current/title-27/section-28.121#p-28.121\(b\)), [(c)](/current/title-27/section-28.121#p-28.121\(c\)), or [(d)](/current/title-27/section-28.121#p-28.121\(d\)), the exporter shall file a continuing bond, TTB Form 5100.30, as provided in [§ 28.51](/current/title-27/section-28.51).
(b) *Penal sum of bond.* The penal sum of the bond shall be sufficient to cover the tax on the maximum quantity of distilled spirits and wine that may remain unaccounted for at any one time. However, the maximum penal sum of the bond shall not exceed $200,000, but in no case shall the penal sum be less than $1,000. Distilled spirits and wine withdrawn for exportation, use on vessels or aircraft, transfer to a customs bonded warehouse, or transfer to and deposit in a foreign-trade zone, shall remain unaccounted for until the evidence of exportation, use, deposit, transfer, or loss in transit has been filed with the appropriate TTB officer.
(c) *Apportioning bonds.* If the bond, Form 5100.30, is in less than the maximum penal sum, the principal shall apportion the bond, in accordance with the requirements on the bond form. The exporter may reapportion the bond coverage, if changing conditions make this necessary, by filing a consent of surety, TTB Form 5000.18, in accordance with its instructions.
(d) *Withdrawal of wine for transfer to a customs bonded warehouse; consent of surety.* An exporter with a bond on Form 5100.30 executed before April 1, 1981, shall obtain a consent of surety on Form 5000.18 before withdrawing wine without payment of tax from a bonded wine cellar for transfer to a customs bonded warehouse. The consent shall be executed in accordance with [§ 28.54](/current/title-27/section-28.54) and filed in accordance with instructions on the form. Exporters with bonds executed on or after April 1, 1981, do not need this consent of surety, because such bonds automatically apply to withdrawals for transfer to customs bonded warehouses.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1352, as amended, 1362, as amended, 1380, as amended, 1381, 1382 ([26 U.S.C. 5175](https://www.govinfo.gov/link/uscode/26/5175), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362)) sec. 3. Pub. L. 91-659, 84 Stat. 1965, as amended ([26 U.S.C. 5066](https://www.govinfo.gov/link/uscode/26/5066), [5370](https://www.govinfo.gov/link/uscode/26/5370), [5371](https://www.govinfo.gov/link/uscode/26/5371)))
\[T.D. ATF-88, [46 FR 39815](https://www.federalregister.gov/citation/46-FR-39815), Aug. 5, 1991, as amended by T.D. ATF-413, [64 FR 46845](https://www.federalregister.gov/citation/64-FR-46845), Aug. 27, 1999; T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004; T.D. TTB-146, [82 FR 1134](https://www.federalregister.gov/citation/82-FR-1134), Jan. 4, 2017]
#### § 28.63 Bond, Form 5100.12.
Where the proprietor of a manufacturing bonded warehouse desires to withdraw a specific lot of distilled spirits or wines without payment of tax, as authorized in [§ 28.25](/current/title-27/section-28.25), he shall file, as provided in [§ 28.51](/current/title-27/section-28.51), a specific bond, on Form 5100.12, to cover the transportation of the distilled spirits or wines from the bonded premises from which withdrawn to the manufacturing bonded warehouse. The penal sum of such bond shall be not less than the tax prescribed by law on the quantity of distilled spirits or wines to be withdrawn: *Provided,* That the maximum penal sum of such bond shall not exceed $200,000, but in no case shall the penal sum be less than $1,000.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1352, as amended, 1380, as amended ([26 U.S.C. 5175](https://www.govinfo.gov/link/uscode/26/5175), [5362](https://www.govinfo.gov/link/uscode/26/5362)))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71721](https://www.federalregister.gov/citation/44-FR-71721), Dec. 11, 1979; T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004; T.D. TTB-146, [82 FR 1134](https://www.federalregister.gov/citation/82-FR-1134), Jan. 4, 2017]
#### § 28.64 Bond, Form 5110.67.
(a) *General.* Where the proprietor of a manufacturing bonded warehouse desires to withdraw distilled spirits and wines from time to time without payment of tax, as authorized in [§ 28.25](/current/title-27/section-28.25), he shall file, as provided in [§ 28.51](/current/title-27/section-28.51), a continuing bond on Form 5110.67. The bond shall be executed in a penal sum sufficient to cover the tax at the rates prescribed by law on the maximum quantity of distilled spirits and wines which may remain unaccounted for at any one time: *Provided,* That the maximum penal sum of such bond shall not exceed $200,000, but in no case shall the penal sum be less than $1,000. Distilled spirits and wines withdrawn for transfer to a manufacturing bonded warehouse shall remain unaccounted for until the evidence of deposit in such warehouse, as required by this part, has been filed. The proprietor shall, at the time of executing Form 5110.67, designate the premises from which the withdrawals are to be made, provided that, as to any one bond on Form 5110.67, such premises shall be located in the same internal revenue region.
(b) *Apportioning bonds.* If the bond, Form 5110.67 is in less than the maximum penal sum, the principal shall apportion the bond, in accordance with the requirements on the bond form. The principal may reapportion the bond coverage, if changing conditions make this necessary, by filing a consent of surety, Form 5000.18, in accordance with its instructions.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1352, as amended, 1380, as amended ([26 U.S.C. 5175](https://www.govinfo.gov/link/uscode/26/5175), [5362](https://www.govinfo.gov/link/uscode/26/5362)))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71721](https://www.federalregister.gov/citation/44-FR-71721), Dec. 11, 1979; T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004; T.D. TTB-146, [82 FR 1134](https://www.federalregister.gov/citation/82-FR-1134), Jan. 4, 2017]
#### § 28.65 \[Reserved]
#### § 28.66 Strengthening bonds.
In all cases where the penal sum of any bond becomes insufficient, the principal shall either give a strengthening bond with the same surety to attain a sufficient penal sum, or give a new bond to cover the entire liability. Strengthening bonds will not be approved where any notation is made thereon which is intended, or which may be construed, as a release of any former bond, or as limiting the amount of any bond to less than its full penal sum. Strengthening bonds shall show the current date of execution and the effective date.
(72 Stat. 1352, 1394; [26 U.S.C. 5175](https://www.govinfo.gov/link/uscode/26/5175), [5551](https://www.govinfo.gov/link/uscode/26/5551))
#### § 28.67 Superseding bonds and new bonds for previously exempt persons.
(a) *Superseding bonds.* Superseding bonds will be required in case of insolvency or removal of any surety, and may, at the discretion of the appropriate TTB officer, be required in any other contingency affecting the validity or impairing the efficiency of such bond. Executors, administrators, assignees, receivers, trustees, or other persons acting in a fiduciary capacity, continuing or liquidating the business of the principal, must execute and file a superseding bond or obtain the consent of the surety or sureties on the existing bond or bonds. Where, under the provisions of [§ 28.72](/current/title-27/section-28.72), the surety on any bond given under this subpart has filed an application to be relieved of liability under said bond and the principal desires or intends to continue the business or operations to which such bond relates, he must file a valid superseding bond to be effective on or before the date specified in the surety's notice. If the principal does not file a superseding bond when required, he must discontinue the operations intended to be covered by such bond forthwith. Superseding bonds must show the date of execution and the effective date.
(b) *New bonds for previously exempt persons.* If a person has not furnished a bond as provided in this subpart because the person was exempt from bond requirements under [§ 28.51(b)](/current/title-27/section-28.51#p-28.51\(b\)), the person must furnish the required bond for any exportation that occurs during any period to which any of the exemption criteria in [§ 28.51(b)](/current/title-27/section-28.51#p-28.51\(b\)) do not apply to the person.
(72 Stat. 1336, 1362; [26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062), [5214](https://www.govinfo.gov/link/uscode/26/5214))
\[T.D. TTB-146, [82 FR 1136](https://www.federalregister.gov/citation/82-FR-1136), Jan. 4, 2017]
### Termination of Bonds
#### § 28.70 Termination of Bonds, Forms 5120.25 and 5100.12.
Bonds, Forms 5120.25 and 5100.12, covering a specific lot of distilled spirits or wines withdrawn without payment of tax under this part, will be canceled by the appropriate TTB officer on receipt by him of TTB Form 5100.11 properly executed by the appropriate customs official or armed services officer, as required by this part, evidencing that the distilled spirits or wines have been duly exported, laden for use on vessels or aircraft, deposited in a foreign-trade zone, or deposited in a manufacturing bonded warehouse, as the case may be, or of evidence satisfactory to him that the distilled spirits or wines have been otherwise lawfully disposed of or accounted for: *Provided,* That all liability under the bond to be canceled has been terminated.
(72 Stat. 1352; [26 U.S.C. 5175](https://www.govinfo.gov/link/uscode/26/5175))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71722](https://www.federalregister.gov/citation/44-FR-71722), Dec. 11, 1979; T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004; T.D. TTB-146, [82 FR 1134](https://www.federalregister.gov/citation/82-FR-1134), Jan. 4, 2017]
#### § 28.71 Termination of bonds, Forms 5100.30 and 5110.67.
(a) *General.* Continuing bonds, Forms 5100.30 and 5110.67, covering distilled spirits and/or wines withdrawn from time to time without payment of tax under this part, may be terminated as to liability for future withdrawals under the following circumstances:
(1) Pursuant to application of surety as provided in [§ 28.72](/current/title-27/section-28.72);
(2) On approval of a superseding bond as provided in [§ 28.67](/current/title-27/section-28.67); or
(3) On written notification to the appropriate TTB officer by the principal of the discontinuance of withdrawals under the bond (including discontinuance of withdrawals under the bond because the proprietor has become exempt from bond requirements under [§ 28.51(b)](/current/title-27/section-28.51#p-28.51\(b\))).
(b) *Cancellation.* When no further withdrawals are to be made under a bond on Form 5100.30 or 5110.67 under the circumstances specified in paragraph (a), the bond will be canceled by the appropriate TTB officer in the manner and subject to the conditions provided in [§ 28.70](/current/title-27/section-28.70).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended, 1352, as amended, 1353, as amended ([26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062), [5175](https://www.govinfo.gov/link/uscode/26/5175), [5176](https://www.govinfo.gov/link/uscode/26/5176)))
\[T.D. TTB-146, [82 FR 1136](https://www.federalregister.gov/citation/82-FR-1136), Jan. 4, 2017]
#### § 28.72 Application of surety for relief from bond.
A surety on any bond given on Forms 5100.30 or 5110.67, may at any time in writing notify the principal and the appropriate TTB officer that he desires, after a date named, to be relieved of liability under said bond. Such date shall be not less than 90 days after the date the notice is received by the appropriate TTB officer. The surety shall also file with the appropriate TTB officer an acknowledgment or other proof of service on the principal. If such notice is not thereafter in writing withdrawn, the rights of the principal as supported by said bond shall be terminated on the date named in the notice, and the surety shall be relieved from liability to the extent set forth in [§ 28.73(b)](/current/title-27/section-28.73#p-28.73\(b\)).
(68A Stat. 749, as amended ([26 U.S.C. 6065](https://www.govinfo.gov/link/uscode/26/6065)); Sec. 201. Pub. L. 85-859, 72 Stat. 1336, as amended, 1352, as amended ([26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062), [5175](https://www.govinfo.gov/link/uscode/26/5175)))
\[T.D. 6895, [31 FR 11976](https://www.federalregister.gov/citation/31-FR-11976), Sept. 13, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71722](https://www.federalregister.gov/citation/44-FR-71722), Dec. 11, 1979; T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004; T.D. TTB-146, [82 FR 1134](https://www.federalregister.gov/citation/82-FR-1134), Jan. 4, 2017]
#### § 28.73 Relief of surety from bond.
(a) *Bonds, Forms 5120.25 and 5100.12.* The surety on a bond given on Form 5120.25 or Form 5100.12 will be relieved from his liability under the bond when the bond has been canceled as provided for in [§ 28.70](/current/title-27/section-28.70).
(b) *Bonds, Forms 5100.30 and 5110.67.* Where the surety on a bond given on Form 5100.30 or Form 5110.67 has filed application for relief from liability, as provided in [§ 28.72](/current/title-27/section-28.72), the surety will be relieved from liability for withdrawals made wholly subsequent to the date specified in the notice, or on the effective date of a superseding bond, if one is given. Notwithstanding such relief, the liability of the surety will continue until the spirits and/or wines withdrawn without payment of tax under the bond have been properly accounted for.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended, 1352, as amended, 1353, as amended ([26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062), [5175](https://www.govinfo.gov/link/uscode/26/5175), [5176](https://www.govinfo.gov/link/uscode/26/5176)))
\[T.D. TTB-146, [82 FR 1136](https://www.federalregister.gov/citation/82-FR-1136), Jan. 4, 2017]
#### § 28.74 Release of pledged securities or cash (including cash equivalents).
Securities of the United States, pledged and deposited as provided in [§ 28.53](/current/title-27/section-28.53), will be released only in accordance with the provisions of [31 CFR part 225](/current/title-31/part-225). Securities and cash (including cash equivalents) will not be released by the appropriate TTB officer until liability under the bond for which they were pledged has been terminated. When the appropriate TTB officer is satisfied that they may be released, he will fix the date or dates on which a part or all of such securities and cash (including cash equivalents) may be released. At any time prior to the release, the appropriate TTB officer may extend the date of release for such additional length of time as he deems necessary.
(61 Stat. 650; [6 U.S.C. 15](https://www.govinfo.gov/link/uscode/6/15))
\[T.D. TTB-146, [82 FR 1136](https://www.federalregister.gov/citation/82-FR-1136), Jan. 4, 2017]
### Charges and Credits
#### § 28.80 Charges and credits on bonds.
The withdrawal of liquors without payment of tax or of specially denatured spirits free of tax, under the provisions of this part shall constitute a charge against the bond under which the withdrawal is made of (a) the tax on the liquors withdrawn or (b) of an amount equal to the tax on specially denatured spirits withdrawn that will be due in the event of failure to account for the specially denatured spirits as provided in this part. The tax on liquors so withdrawn, or an amount equal to the tax on specially denatured spirits so withdrawn that would be due as set forth above, shall, on the required accounting for such liquors or specially denatured spirits, constitute a credit to the bond of such tax or amount equal to the tax, as the case may be.
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and further redesignated by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan 27, 2004, and[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and further redesignated by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan 27, 2004, and as amended by T.D. TTB-146, [82 FR 1136](https://www.federalregister.gov/citation/82-FR-1136), Jan. 4, 2017]
## Subpart E—Withdrawal of Distilled Spirits Without Payment of Tax for Exportation, Use on Vessels and Aircraft, Transfer to a Foreign-Trade Zone, or Transportation to a Manufacturing Bonded Warehouse
#### § 28.91 General.
(a) Distilled spirits on which the internal revenue tax has not been paid or determined may, subject to this part, be withdrawn from the bonded premises of a distilled spirits plant without payment of tax for:
(1) Exportation;
(2) Use on the vessels or aircraft described in [§ 28.21](/current/title-27/section-28.21);
(3) Transfer to and deposit in a foreign-trade zone for exportation or for storage pending exportation;
(4) Transportation to and deposit in a manufacturing bonded warehouse; or
(5) Transfer to and deposit in a customs bonded warehouse as provided for in [§ 28.26](/current/title-27/section-28.26).
(b) Except as provided in [§ 28.51(b)](/current/title-27/section-28.51#p-28.51\(b\)), all withdrawals shall be made under the applicable bond prescribed in [subpart D of this part](/current/title-27/part-28/subpart-D).
(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended ([19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309)); sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended ([19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c)); sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214)); sec. 3, Pub. L. 91-659, 84 Stat. 1965, as amended ([26 U.S.C. 5066](https://www.govinfo.gov/link/uscode/26/5066)))
\[T.D. ATF-51, [43 FR 24244](https://www.federalregister.gov/citation/43-FR-24244), June 2, 1978, as amended by T.D. ATF-62, [44 FR 71722](https://www.federalregister.gov/citation/44-FR-71722), Dec. 11, 1979; T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004; T.D. TTB-146, [82 FR 1136](https://www.federalregister.gov/citation/82-FR-1136), Jan. 4, 2017]
#### § 28.92 Application or notice, TTB Form 5100.11.
(a) *Export, use on vessels and aircraft, and transfer to a foreign-trade zone or a customs bonded warehouse.* Application for or notice of the withdrawal of distilled spirits without payment of tax for exportation from the United States, or for use on vessels and aircraft, or for transfer to a customs bonded warehouse or a foreign-trade zone, shall be made by the exporter on TTB Form 5100.11. If the exporter is not the proprietor of the bonded premises of the distilled spirits plant from which the spirits are to be withdrawn, the exporter shall prepare TTB Form 5100.11 as an application, in accordance with the instructions on the form, and shall forward all copies of the form in accordance with instructions for the form. If the exporter is the proprietor of the bonded premises of the distilled spirits plant from which the spirits are withdrawn, the exporter shall prepare TTB Form 5100.11 as a notice in accordance with the instructions on the form.
(b) *Manufacturing bonded warehouse.* Application for the withdrawal of distilled spirits without payment of tax for transportation to and deposit in a manufacturing bonded warehouse shall be made by the proprietor of such warehouse on TTB Form 5100.11, in accordance with the instructions on the form.
(Approved by the Office of Management and Budget under control number 152-0190)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214)); Sec. 3, Pub. L. 91-659, 84 Stat. 1965, as amended ([26 U.S.C. 5066](https://www.govinfo.gov/link/uscode/26/5066)))
\[T.D. ATF-198, [50 FR 8559](https://www.federalregister.gov/citation/50-FR-8559), Mar. 1, 1985, as amended by T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004]
#### § 28.93 Carrier to be designated.
The name of the carrier or carriers to be used in transporting the distilled spirits from the bonded premises of the distilled spirits plant to the port of export, or to the customs bonded warehouse, or to the manufacturing bonded warehouse, or to the foreign-trade zone, as the case may be, shall be shown in the application. If the spirits are shipped on a through bill of lading and all carriers handling the spirits while in transit are not known, the name of the carrier to whom the distilled spirits are to be delivered at the shipping premises shall be shown.
(72 Stat. 1362, 84 Stat. 1965; [26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214), [5066](https://www.govinfo.gov/link/uscode/26/5066))
\[T.D. 7112, [36 FR 8581](https://www.federalregister.gov/citation/36-FR-8581), May 8, 1971. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71722](https://www.federalregister.gov/citation/44-FR-71722), Dec. 11, 1979]
#### § 28.94 Containers.
Distilled spirits authorized to be withdrawn without payment of tax from the bonded premises of a distilled spirits plant under the provisions of this subpart may be withdrawn from such establishment in such containers as may be authorized in [part 19 of this chapter](/current/title-27/part-19). Except as otherwise provided in this part, the gauging, packing, bottling, casing, marking, closing and reporting of distilled spirits prior to withdrawal shall be in accordance with the provisions of [part 19 of this chapter](/current/title-27/part-19).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1360, as amended, 1374, as amended ([26 U.S.C. 5205](https://www.govinfo.gov/link/uscode/26/5205), [5206](https://www.govinfo.gov/link/uscode/26/5206), [5301](https://www.govinfo.gov/link/uscode/26/5301)))
\[T.D. ATF-62, [44 FR 71722](https://www.federalregister.gov/citation/44-FR-71722), Dec. 11, 1979. as amended by T.D. ATF-206, [50 FR 23956](https://www.federalregister.gov/citation/50-FR-23956), June 7, 1985]
#### § 28.95 Change of packages for exportation.
Whenever the exporter desires to transfer distilled spirits from packages filled on the bonded premises of a distilled spirits plant to such other suitable packages as may be desired for exportation, such change of packages shall be made under the procedures of [part 19 of this chapter](/current/title-27/part-19), prior to the preparation of TTB Form 5100.11 covering the removal of the distilled spirits.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1360, as amended, 1374, as amended ([26 U.S.C. 5205](https://www.govinfo.gov/link/uscode/26/5205), [5206](https://www.govinfo.gov/link/uscode/26/5206), [5301](https://www.govinfo.gov/link/uscode/26/5301)))
\[T.D. ATF-62, [44 FR 71722](https://www.federalregister.gov/citation/44-FR-71722), Dec. 11, 1979, as amended by T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004; T.D. TTB-146, [82 FR 1136](https://www.federalregister.gov/citation/82-FR-1136), Jan. 4, 2017]
#### § 28.96 Approval of application.
When filed as an application, and TTB Form 5100.11 has been properly executed, and the bond (if required) has been filed in a sufficient amount, the appropriate TTB officer shall approve the application on all copies of the form and send them to the proprietor of the bonded premises from which the spirits will be withdrawn.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214)))
\[T.D. ATF-62, [44 FR 71722](https://www.federalregister.gov/citation/44-FR-71722), Dec. 11, 1979, as amended by T.D. ATF-198, [50 FR 8559](https://www.federalregister.gov/citation/50-FR-8559), Mar. 1, 1985; T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004; T.D. TTB-146, [82 FR 1136](https://www.federalregister.gov/citation/82-FR-1136), Jan. 4, 2017]
#### § 28.97 \[Reserved]
#### § 28.98 Inspection and regauge.
The proprietor shall inspect all containers to be withdrawn pursuant to TTB Form 5100.11 and shall regauge all packages, except those which are to be withdrawn on the filling or production gauge as authorized in [27 CFR part 19](/current/title-27/part-19). If the withdrawal is to be made subject to regauge, the proprietor shall prepare a package gauge record as provided in [27 CFR part 19](/current/title-27/part-19), enter the total proof gallons regauged on TTB Form 5100.11, and attach a copy of the package gauge record to each copy of TTB Form 5100.11. If a proprietor wishes to reduce the proof of spirits contained in packages to be withdrawn pursuant to TTB Form 5100.11, he shall make such proof reduction incident to regauge of the packages.
(Approved by the Office of Management and Budget under control number 1412-0190 and 1512-0250)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended ([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204)))
\[T.D. ATF-198, [50 FR 8559](https://www.federalregister.gov/citation/50-FR-8559), Mar. 1, 1985, as amended by T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004]
#### § 28.100 \[Reserved]
#### § 28.101 Packages to be stamped.
Each package and authorized bulk conveyance of spirits (including tank cars and tank trucks but not pipelines) withdrawn without payment of tax under the provisions of this subpart shall be marked with the word “EXPORT” in accordance with the provisions of [27 CFR part 19](/current/title-27/part-19) prior to its removal from the bonded premises.
(Approved by the Office of Management and Budget under control number 1512-0189)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended ([26 U.S.C. 5205](https://www.govinfo.gov/link/uscode/26/5205)))
\[T.D. ATF-198, [50 FR 8560](https://www.federalregister.gov/citation/50-FR-8560), Mar. 1, 1985, as amended by T.D. ATF-206, [50 FR 23956](https://www.federalregister.gov/citation/50-FR-23956), June 7, 1985]]
#### § 28.102 Bottles to have closures affixed.
Every bottle containing distilled spirits to be withdrawn under the provisions of this subpart shall have a closure or other device affixed in accordance with the provisions of [part 19 of this chapter](/current/title-27/part-19).
(Sec. 454, Pub. L. 98-369, 98 Stat. 494 ([26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301)))
\[T.D. ATF-206, [50 FR 23956](https://www.federalregister.gov/citation/50-FR-23956), June 7, 1985]
#### § 28.103 Export marks.
(a) *General.* In addition to the marks and brands required to be placed on packages and cases of distilled spirits at the time they are filled under the provisions of [part 19 of this chapter](/current/title-27/part-19), the proprietor shall mark the word “Export” on the Government side of each case or Government head of each container before removal from the bonded premises for any exportation authorized under this subpart.
(b) *Exception.* When containers are being removed to a contiguous manufacturing bonded warehouse, the proprietor need not place the word “Export” on the containers if the appropriate TTB officer finds the omission will not jeopardize the revenue.
(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended ([19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309)); sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended ([19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c)); sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214)); sec. 3, Pub. L. 91-659, 84 Stat. 1965, as amended ([26 U.S.C. 5066](https://www.govinfo.gov/link/uscode/26/5066)))
\[T.D. ATF-82, [46 FR 21158](https://www.federalregister.gov/citation/46-FR-21158), Apr. 9, 1981, as amended by T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004]
#### § 28.104 Certificates of origin.
The entry of distilled spirits at ports in certain foreign countries is permitted only upon the filing by the importer of an official certificate showing the origin and age of such spirits. An appropriate TTB officer may, on request of the applicant, furnish a certificate showing the origin and age of the spirits described on TTB Forms 5100.11 or 5110.30. Such officer may require supporting documentation to be provided by the applicant. Certificates of origin and age shall be furnished on Form 2177 (5110.58). Form 2177 (5110.58) may also be issued for distilled spirits removed to a foreign-trade zone, in which case the number and location of the foreign-trade zone shall be shown on the form in lieu of the name of the foreign country.
\[T.D. ATF-198, [50 FR 8560](https://www.federalregister.gov/citation/50-FR-8560), Mar. 1, 1985, as amended by T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004]
#### § 28.105 Report of inspection and tax liability.
When the spirits are ready for shipment, the proprietor shall execute his report of inspection and tax liability on all copies of TTB Form 5100.11.
(72 Stat. 1362; [26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214))
\[T.D. ATF-46, [42 FR 44773](https://www.federalregister.gov/citation/42-FR-44773), Sept. 6, 1977, as amended by T.D. ATF-62, [44 FR 71723](https://www.federalregister.gov/citation/44-FR-71723), Dec. 11, 1979; T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004]
#### § 28.106 Consignment, shipment, and delivery.
The consignment, shipment, and delivery of distilled spirits withdrawn without payment of tax under this subpart shall be made under the provisions of subpart M.
(72 Stat. 1362; [26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214))
#### § 28.107 Disposition of forms.
TTB Form 5100.11 and any accompanying package gauge record shall be distributed by the proprietor in accordance with the instruction on TTB Form 5100.11.
(Approved by the Office of Management and Budget under control number 1512-0250)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214)))
\[T.D. ATF-198, [50 FR 8560](https://www.federalregister.gov/citation/50-FR-8560), Mar. 1, 1985, as amended by T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004]
### Losses
#### § 28.110 Losses.
Where there has been a loss of distilled spirits while in transit from the bonded premises of a distilled spirits plant to a port of export, a customs bonded warehouse, a manufacturing bonded warehouse, a vessel or aircraft, or a foreign-trade zone, the provisions of [subpart O of this part](/current/title-27/part-28/subpart-O), with respect to losses of spirits after withdrawal without payment of tax and to claims for remission of the tax thereon, shall be applicable.
(72 Stat. 1323, as amended, 84 Stat. 1965; [26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008), [5066](https://www.govinfo.gov/link/uscode/26/5066))
\[T.D. 7112, [36 FR 8581](https://www.federalregister.gov/citation/36-FR-8581), May 8, 1971. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
### Return of Spirits to Bonded Premises
#### § 28.115 General.
Spirits which have been lawfully withdrawn without payment of tax under the provisions of this subpart for exportation, or for deposit in a foreign-trade zone, a manufacturing bonded warehouse, or a customs bonded warehouse, or for use on vessels and aircraft may, subject to the requirements of [§ 28.116](/current/title-27/section-28.116), be returned:
(a) To the bonded premises of a distilled spirits plant for redistillation; or
(b) To the bonded premises from which withdrawn, pending subsequent removal for lawful purposes. However, such spirits may only be returned before they are exported, deposited in a foreign-trade zone, a manufacturing bonded warehouse, or a customs bonded warehouse, or laden as supplies upon or used on vessels or aircraft, as the case may be.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1365 as amended ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214), [5223](https://www.govinfo.gov/link/uscode/26/5223)); Sec. 3, Pub. L. 91-659, 84 Stat. 1365, as amended ([26 U.S.C. 5066](https://www.govinfo.gov/link/uscode/26/5066)))
\[T.D. ATF-198, [50 FR 8560](https://www.federalregister.gov/citation/50-FR-8560), Mar. 1, 1985, as amended by T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004]
#### § 28.116 Notice of return of spirits withdrawn without payment of tax.
If a proprietor of a distilled spirits plant desires to return spirits to his plant as provided in [§ 28.115](/current/title-27/section-28.115), he shall file a notice with the appropriate TTB officer. A copy of the notice shall be prepared for submission to the customs official, as required by [§ 28.117](/current/title-27/section-28.117). The notice shall be executed under the penalties of perjury and shall show:
(a) Name, address, and plant number of the distilled spirits plant to which the spirits are to be returned.
(b) Name, address, and plant number of the distilled spirits plant which packaged or bottled the spirits.
(c) Name, address, and plant number of the distilled spirits plant from which the spirits were withdrawn.
(d) Name and address of the person who withdrew the spirits.
(e) Serial number of the TTB Form 5100.11 and the date withdrawn.
(f) Present location of spirits to be returned.
(g) Kind of spirits to be returned.
(h) Number, kind, and serial numbers of the containers to be returned. In case of bottled spirits, the number and size of the bottles in each case.
(i) Total quantity in proof gallons of spirits to be returned.
(j) Reason for return of spirits.
(k) Disposition to be made of returned spirits, i.e., redistillation or return to bonded storage.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1365, as amended ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214), [5223](https://www.govinfo.gov/link/uscode/26/5223)))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71723](https://www.federalregister.gov/citation/44-FR-71723), Dec. 11, 1979; T.D. TTB-8, [69 FR 3832](https://www.federalregister.gov/citation/69-FR-3832), Jan. 27, 2004; T.D. TTB-146, [82 FR 1136](https://www.federalregister.gov/citation/82-FR-1136), Jan. 4, 2017]
#### § 28.117 Responsibility for return of spirits.
The person who withdrew the spirits without payment of tax shall be responsible for arranging the return of the spirits to the distilled spirits plant receiving them. The person or his agent shall submit a copy of the notice required by [§ 28.116](/current/title-27/section-28.116) to the appropriate customs official. If the spirits are returned before the TTB Form 5100.11 has been filed with the customs official, the person shall submit the form with the notice. The customs officer shall, if the spirits are eligible for return under [§ 28.115](/current/title-27/section-28.115), accept the notice as authority for the return of the spirits to the distilled spirits plant identified in the notice. The customs officer shall retain the notice and shall mark each copy of TTB Form 5100.11 “Canceled”, note the date thereon, return both copies to the person, and, if the spirits are in customs custody, release them for return. The person shall retain one copy of the canceled TTB Form 5100.11 and file one copy with the appropriate TTB officer identified on the form.
(Sec. 201, Pub. L. 85-859, 72 Stat 1362, as amended, 1365, as amended ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214), [5223](https://www.govinfo.gov/link/uscode/26/5223)))
\[T.D. ATF-62, [44 FR 71723](https://www.federalregister.gov/citation/44-FR-71723), Dec. 11, 1979, as amended by T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004; T.D. TTB-146, [82 FR 1136](https://www.federalregister.gov/citation/82-FR-1136), Jan. 4, 2017]
#### § 28.118 Receipt of spirits.
The receipt, gauge, and disposition of the distilled spirits at the distilled spirits plant shall be in accordance with the applicable provisions of [subpart Q of part 19 of this chapter](/current/title-27/part-19/subpart-Q).
(Sec. 201, Pub. L. 85-859, 72 Stat 1362, as amended, 1365, as amended ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214), [5223](https://www.govinfo.gov/link/uscode/26/5223)))
\[T.D. ATF-62, [44 FR 71723](https://www.federalregister.gov/citation/44-FR-71723), Dec. 11, 1979, as amended by T.D. TTB-92, [76 FR 9171](https://www.federalregister.gov/citation/76-FR-9171), Feb. 16, 2011]
## Subpart F—Withdrawal of Wine Without Payment of Tax for Exportation, Use on Vessels and Aircraft, Transfer to a Foreign-Trade Zone or to a Customs Bonded Warehouse, or Transportation to a Manufacturing Bonded Warehouse
#### § 28.121 General.
Wine may, subject to this part, be withdrawn from a bonded wine cellar, without payment of tax, for:
(a) Exportation;
(b) Use on the vessels and aircraft described in [§ 28.21](/current/title-27/section-28.21);
(c) Transfer to and deposit in a foreign-trade zone for exportation or for storage pending exportation;
(d) Transfer to and deposit in a customs bonded warehouse as provided in [§ 28.27](/current/title-27/section-28.27); or
(e) Transportation to and deposit in a manufacturing bonded warehouse.
Except as provided in [§ 28.51(b)](/current/title-27/section-28.51#p-28.51\(b\)), all such withdrawals shall be made under the applicable bond prescribed in subpart D.
(46 Stat. 690, as amended, 48 Stat. 999, as amended, 72 Stat. 1380; [19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309), [81c](https://www.govinfo.gov/link/uscode/19/81c), [26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362), [7805](https://www.govinfo.gov/link/uscode/26/7805); (sec. 201, Pub. L. 85-859. 72 Stat. 1381, 1382 ([26 U.S.C. 5370](https://www.govinfo.gov/link/uscode/26/5370), [5371](https://www.govinfo.gov/link/uscode/26/5371))))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71723](https://www.federalregister.gov/citation/44-FR-71723), Dec. 11, 1979; T.D. ATF-88, [46 FR 39816](https://www.federalregister.gov/citation/46-FR-39816), Aug. 5, 1981; [47 FR 20303](https://www.federalregister.gov/citation/47-FR-20303), May 12, 1982; T.D. TTB-8, [69 FR 3831](https://www.federalregister.gov/citation/69-FR-3831), Jan. 27, 2004; T.D. TTB-146, [82 FR 1137](https://www.federalregister.gov/citation/82-FR-1137), Jan. 4, 2017]
#### § 28.122 Application or notice, TTB Form 5100.11.
(a) *Export, use on vessels and aircraft, transfer to a customs bonded warehouse, and transfer to a foreign-trade zone.* Where the exporter is not the proprietor of the bonded wine cellar from which the wine is to be withdrawn, the exporter must make an application on TTB Form 5100.11 for approval of the withdrawal. Where the exporter is the proprietor of the bonded wine cellar from which the wine is to be withdrawn, the exporter must, at the time of withdrawal of the wine, prepare a notice of the withdrawal and shipment on TTB Form 5100.11. TTB approval is not required if the exporter is the proprietor of the bonded wine cellar from which the wine is to be withdrawn.
(b) *Manufacturing bonded warehouse.* The proprietor of the manufacturing bonded warehouse must make an application on TTB Form 5100.11 to withdraw wine without payment of tax for transportation to and deposit in such warehouse before withdrawal of the wine.
(c) *Action by appropriate TTB officer.* Where, under the provisions of [paragraphs (a)](/current/title-27/section-28.122#p-28.122\(a\)) and [(b)](/current/title-27/section-28.122#p-28.122\(b\)) of this section, a TTB Form 5100.11 is submitted to the appropriate TTB officer for approval, the appropriate TTB officer shall, if satisfied that the application is in order and that the applicant has on file a good and sufficient bond, approve the application and forward it to the proprietor of the premises from which the wines are to be withdrawn.
(d) *Restriction on shipment.* Where, under the provisions of [paragraphs (a)](/current/title-27/section-28.122#p-28.122\(a\)) and [(b)](/current/title-27/section-28.122#p-28.122\(b\)) of this section, prior approval of TTB Form 5100.11 by the appropriate TTB officer is required, the proprietor of the bonded wine cellar may not ship the wine until the approved TTB Forms 5100.11 have been received by him. In such cases, the proprietor of the bonded wine cellar shall, on removal of the wines, execute his certificate of removal on TTB Form 5100.11.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended ([26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362)))
\[T.D. ATF-198, [50 FR 8560](https://www.federalregister.gov/citation/50-FR-8560), Mar. 1, 1985]
#### Editorial Note:
For Federal Register citations affecting [§ 28.122](/current/title-27/section-28.122), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
#### § 28.123 Export marks.
(a) *General.* In addition to the marks and brands required to be placed on packages or cases of wine at the time they are filled under the provisions of [part 24 of this chapter](/current/title-27/part-24), the proprietor shall mark the word “Export” on the Government side of each case or Government head of each container before removal from the bonded premises for any exportation authorized under this subpart, including withdrawals under [26 U.S.C. 5362(c)(4)](https://www.govinfo.gov/link/uscode/26/5362).
(b) *Exception.* When containers are being removed to a contiguous manufacturing bonded warehouse, the proprietor need not place the word “Export” on the containers if the appropriate TTB officer finds the omission will not jeopardize the revenue.
(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended ([19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309)); sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended ([19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c)); sec. 201, Pub. L. 85-859, 72 Stat. 1380, as amended ([26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362), [7805](https://www.govinfo.gov/link/uscode/26/7805)))
\[T.D. ATF-82, [46 FR 21158](https://www.federalregister.gov/citation/46-FR-21158), Apr. 9, 1981, as amended by T.D. ATF-88, [46 FR 39816](https://www.federalregister.gov/citation/46-FR-39816), Aug. 5, 1981; [47 FR 20303](https://www.federalregister.gov/citation/47-FR-20303), May 12, 1982; T.D. ATF-299, [55 FR 25033](https://www.federalregister.gov/citation/55-FR-25033), June 19, 1990; T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004]
#### § 28.124 Consignment, shipment, and delivery.
The consignment, shipment, and delivery of wines withdrawn without payment of tax under this subpart shall be made under the provisions of [subpart M of this part](/current/title-27/part-28/subpart-M).
(72 Stat. 1380; [26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362))
#### § 28.125 Disposition of forms.
On removal of the wines from the premises of the bonded wine cellar, the proprietor shall forward one copy of TTB Form 5100.11 to the appropriate TTB officer, retain one copy for his files, and deliver the original and remaining copy to the officer to whom the shipment is consigned, or in whose care it is shipped, as required by subpart M. Where the shipment is for delivery for use on aircraft, the copy marked “Consignee's Copy”, provided for in [§ 28.122](/current/title-27/section-28.122), shall be forwarded to the airline company at the airport.
(72 Stat. 1380; [26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71724](https://www.federalregister.gov/citation/44-FR-71724), Dec. 11, 1979; T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004]
#### § 28.126 Proprietor's report.
The records of the proprietor of the bonded wine cellar shall reflect the quantity of wine removed without payment of tax under this subpart, and he shall report the quantity of wine so removed on TTB F 5120.17.
(72 Stat. 1380; [26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-299, [55 FR 25033](https://www.federalregister.gov/citation/55-FR-25033), June 19, 1990; T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004]
#### § 28.127 Losses.
Where there has been a loss of wine while in transit from a bonded wine cellar to a port of export, a foreign-trade zone, a vessel or aircraft, a customs bonded warehouse, or a manufacturing bonded warehouse, the provisions of [subpart O of this part](/current/title-27/part-28/subpart-O), with respect to losses of wine after withdrawal without payment of tax and to claims for remission of the tax thereon, shall be applicable.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, 1382, ([26 U.S.C. 5370](https://www.govinfo.gov/link/uscode/26/5370), [5371](https://www.govinfo.gov/link/uscode/26/5371)))
\[T.D. ATF-88, [46 FR 39816](https://www.federalregister.gov/citation/46-FR-39816), Aug. 5, 1981]
### Return of Wines to Bonded Wine Cellar
#### § 28.130 General.
On application of the proprietor of a bonded wine cellar, wine which has been lawfully withdrawn without payment of tax under the provisions of this subpart for exportation, or for use on vessels and aircraft, or for deposit in a foreign-trade zone, in a manufacturing bonded warehouse, or in a customs bonded warehouse, may for good cause be returned to the bonded wine cellar from which withdrawn, for storage pending subsequent removal for lawful purposes. However, such wine must be returned before being exported, laden as supplies or used aboard vessels or aircraft, or deposited in a foreign-trade zone, in a manufacturing bonded warehouse, or in a customs bonded warehouse, as the case may be.
\[T.D. ATF-88, [46 FR 39816](https://www.federalregister.gov/citation/46-FR-39816), Aug. 5, 1981]
#### § 28.131 Application for return of wines withdrawn without payment of tax.
Where a proprietor of a bonded wine cellar desires to return wines to his bonded wine cellar as provided in [§ 28.130](/current/title-27/section-28.130), he shall submit a written application, in duplicate, to the appropriate TTB officer, for approval of the return of the wines. The application shall show.
(a) Name, address, and registry number of the bonded wine cellar.
(b) Name and address of the person who withdrew the wines.
(c) Serial number of the TTB Form 5100.11 and the date withdrawn.
(d) Present location of wines to be returned.
(e) Kind of wines to be returned.
(f) Number, kind, and serial numbers of the containers to be returned. In the case of bottled wines, the number and size of the bottles in each case.
(g) Total quantity in wine gallons for each separate tax class of wines to be returned.
(h) Reason for return of the wines.
The application shall be executed under the penalties of perjury. On approval of the application the appropriate TTB officer shall return both copies to the proprietor, who, in turn, shall deliver them to the exporter.
(72 Stat. 1380; [26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71724](https://www.federalregister.gov/citation/44-FR-71724), Dec. 11, 1979; T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004; T.D. TTB-146, [82 FR 1137](https://www.federalregister.gov/citation/82-FR-1137), Jan. 4, 2017]
#### § 28.132 Responsibility for return of wine.
The person who withdrew the wines without payment of tax shall be responsible for arranging the return of the wines to the bonded wine cellar from which they were withdrawn. In case of emergency, the person may arrange the return of wines to bonded premises without an approved application, but such wines shall be kept separate at the bonded premises and shall not be recorded in the records and reports of the proprietor until an approved application for such return has been obtained as provided in [§ 28.131](/current/title-27/section-28.131). Such person or his agent shall present to the appropriate customs official the two copies of the approved application authorizing the return unless the wines are returned before the TTB Form 5100.11 has been filed with the customs official. The customs officer shall, if he finds that the wines are eligible for return under [§ 28.130](/current/title-27/section-28.130), accept the approved application as authority for the return of the wines to the bonded wine cellar noted on the application and shall mark each copy of TTB Form 5100.11 “Canceled”, note the date thereon, affix a copy of the approved application to each of the canceled TTB Forms 5100.11, return both TTB Forms 5100.11 to the person, and, where the wines are in his custody, release them for return. The canceled TTB Forms 5100.11, with attachments, shall be delivered by such person or his agent to the proprietor of the bonded wine cellar. When wines have been returned before the TTB Forms 5100.11 were filed with customs officials, the two copies of the approved application shall be submitted, by the person or his agent, to the proprietor of the bonded wine cellar who shall cancel and date each copy of TTB Form 5100.11 and affix copies of the approved application thereto.
(72 Stat. 1380; [26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71724](https://www.federalregister.gov/citation/44-FR-71724), Dec. 11, 1979; T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004; T.D. TTB-146, [82 FR 1137](https://www.federalregister.gov/citation/82-FR-1137), Jan. 4, 2017]
#### § 28.133 Disposition of forms.
On receipt of the wines at the bonded wine cellar, the proprietor shall endorse, on each copy of the approved application to return the wines, the date received, the total amount in wine gallons of each tax class of wine returned, and affix his signature. He shall forward the original TTB Form 5100.11, with attached application, to the appropriate TTB officer, and retain the remaining copy for his files. The storage, disposition, and records pertaining to such returned wines shall be in accordance with the applicable provisions of [part 24 of this chapter](/current/title-27/part-24).
(72 Stat. 1380; [26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71724](https://www.federalregister.gov/citation/44-FR-71724), Dec. 11, 1979; T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004]
## Subpart G—Removal of Beer and Beer Concentrate Without Payment of Tax for Exportation, Use as Supplies on Vessels and Aircraft, or Transfer to a Foreign-Trade Zone
#### Source:
T.D. ATF-224, [51 FR 7699](https://www.federalregister.gov/citation/51-FR-7699), Mar. 5, 1986, unless otherwise noted.
#### § 28.141 General.
(a) *Beer.* Beer may, subject to this part, be removed from the brewery without payment of tax for:
(1) Export to a foreign country;
(2) Use as supplies on the vessels and aircraft described in [§ 28.21](/current/title-27/section-28.21); or
(3) Transfer to and deposit in a foreign-trade zone for exportation or for storage pending exportation.
(b) *Beer concentrate.* Concentrate, produced from beer under the provisions of [subpart R of part 25 of this chapter](/current/title-27/part-25/subpart-R) may, subject to this part, be removed from the brewery without payment of tax for:
(1) Export to a foreign country; or
(2) Transfer to and deposit in a foreign-trade zone for exportation or for storage pending exportation.
(c) *Bond.* Except where the brewer is not required to hold a bond under [§ 25.91(e) of this chapter](/current/title-27/section-25.91#p-25.91\(e\)), all removals of beer or beer concentrate will be made by the brewer under the provisions of the brewer's bond, Form 5130.22 as prescribed in [§ 28.60](/current/title-27/section-28.60).
(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended ([19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309)); sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended ([19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c)); sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended ([26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053)))
\[T.D. ATF-224, [51 FR 7699](https://www.federalregister.gov/citation/51-FR-7699), Mar. 5, 1986, as amended by T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004; T.D. TTB-146, [82 FR 1137](https://www.federalregister.gov/citation/82-FR-1137), Jan. 4, 2017]
#### § 28.142 Notice, Form 1689 (5130.12).
When a brewer intends to remove beer or beer concentrate without payment of tax from a brewery for exportation or for transportation to and deposit in a foreign-trade zone, or remove beer for use as supplies on vessels and aircraft, the brewer shall prepare a notice on Form 1689 (5130.12) for each withdrawal. The brewer shall execute Form 1689 (5130.12) in quadruplicate, except when the shipment is for use on aircraft the brewer shall execute an extra copy which will be marked “Consignee's Copy.”
(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended ([19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309)); sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended ([19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c)); sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended ([26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053)))
#### § 28.143 Containers.
(a) *Beer.* Beer being exported, used as supplies on vessels and aircraft, or transferred to and deposited in a foreign-trade zone, without payment of tax, may be removed in bottles, kegs, or bulk containers.
(b) *Beer concentrate.* Concentrate may not be removed for export, or for transfer to and deposit in a foreign-trade zone, in containers of the kind ordinarily used by brewers for the removal of beer for consumption or sale.
#### § 28.144 Export marks.
(a) *General Requirement.* In addition to the marks and brands required to be placed on containers of beer or beer concentrate under the provisions of [part 25 of this chapter](/current/title-27/part-25), the brewer shall mark the word “Export” on each container or case of beer, or the words “Beer concentrate for export” on each container of beer concentrate, before removal from the brewery for any exportation authorized under this subpart.
(b) *Exceptions.* A brewer need not apply the mark “Export” on cases of beer being exported under the following circumstances:
(1) When beer is being directly exported by the brewer, and the brewer can furnish documentation (such as an ocean or air freight bill of lading, or a foreign landing certificate) that the beer was directly exported to a foreign country;
(2) When cased beer is transferred from a brewery to a foreign-trade zone for export or for storage pending exportation; or
(3) When cased beer is exported to the military.
(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended ([19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309)); sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended ([19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c)); sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended ([26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053)))
#### § 28.145 Consignment, shipment and delivery.
The consignment, shipment and delivery of beer or beer concentrate removed from a brewery without payment of tax under this subpart will be in accordance with the applicable provisions of [subpart M of this part](/current/title-27/part-28/subpart-M).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended ([26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053)))
#### § 28.146 Disposition of forms.
On removal of the beer or beer concentrate withdrawn under the provisions of this subpart, the brewer shall forward one copy of Form 1689 (5130.12) to the appropriate TTB officer, retain one copy for the files, and deliver the original and remaining copy to the officer to whom the shipment is consigned, or in whose care it is shipped, as required by [subpart M of this part](/current/title-27/part-28/subpart-M). When the shipment is for delivery for use on aircraft, the copy marked “Consignee's Copy,” provided for in [§ 28.142](/current/title-27/section-28.142), will be forwarded to the airline company at the airport.
(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended ([19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309)); sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended ([26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053)))
\[T.D. ATF-224, [51 FR 7699](https://www.federalregister.gov/citation/51-FR-7699), Mar. 5, 1986, as amended by T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004]
#### § 28.147 Return of beer or beer concentrate.
Beer or beer concentrate removed without payment of tax under the provisions of this subpart may be returned to be brewery from which removed if lading of the beer or beer concentrate is delayed more than the period provided in [§ 28.262](/current/title-27/section-28.262) or when the brewer has other good cause for return. The brewer shall request the district director of customs to release the beer or beer concentrate for return to the brewery and, on such release, the district director of customs shall endorse both copies of the appropriate Form 1689 (5130.12) to show the release of the beer or beer concentrate and shall return the forms to the brewer. On return of the beer or beer concentrate to the brewery, the brewer shall record the quantity in the brewery daily records, mark the two copies of Form 1689 (5130.12) returned by the district director of customs, “Canceled—Returned to Brewery,” and forward one copy to the appropriate TTB officer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended, 1335, as amended ([26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5056](https://www.govinfo.gov/link/uscode/26/5056)))
\[T.D. ATF-224, [51 FR 7699](https://www.federalregister.gov/citation/51-FR-7699), Mar. 5, 1986, as amended by T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004]
#### § 28.148 Brewer's report.
The brewer's records shall reflect the quantity of beer or beer concentrate removed without payment of tax under this subpart, and the brewer must report the quantity of beer or beer concentrate so removed on their monthly or quarterly report of operations, as appropriate. The total quantity of beer or beer concentrate involved in all export shipments returned during any reporting period also must be recorded as a separate entry on the appropriate report of operations. Brewers required to submit monthly reports of operations must use form TTB F 5130.9, while brewers required to submit quarterly reports of operations may use either form TTB F 5130.9 or form TTB F 5130.26 (or any successor forms). For requirements regarding monthly and quarterly reporting, see [27 CFR 25.297](/current/title-27/section-25.297).
(Approved by the Office of Management and Budget under control number 1513-0007)
\[T.D. TTB-196, [89 FR 87945](https://www.federalregister.gov/citation/89-FR-87945), Nov. 6, 2024]
#### § 28.149 Losses.
When there has been a loss of beer or beer concentrate while in transit from the brewery to a port for exportation, or for lading as supplies on a vessel or aircraft, or to a foreign-trade zone, the provisions of [subpart O of this part](/current/title-27/part-28/subpart-O), with respect to losses are applicable.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended, 1334, as amended ([26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051), [5053](https://www.govinfo.gov/link/uscode/26/5053)))
#### § 28.150 Charges and credits on bond.
The removal of beer concentrate from the brewery without payment of tax under this subpart will constitute a charge against the brewer's bond, Form 5130.22, of an amount equal to the tax which would be due on removal for consumption or sale, including penalties and interest, on all beer used to produce the concentrate which is removed. The satisfactory accounting for concentrate so removed will constitute a credit to the bond.
\[T.D. ATF-224, [51 FR 7698](https://www.federalregister.gov/citation/51-FR-7698), Mar. 5, 1986; [51 FR 9190](https://www.federalregister.gov/citation/51-FR-9190), Mar. 18, 1986]
(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended, 1334, as amended ([26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051), [5053](https://www.govinfo.gov/link/uscode/26/5053)))
## Subpart H—Withdrawal of Specially Denatured Spirits, Free of Tax, for Exportation or Transfer to a Foreign-Trade Zone
#### § 28.151 General.
Specially denatured spirits may, under this part, be withdrawn from the bonded premises of a distilled spirits plant, free of tax, for:
(a) Exportation; or
(b) Transfer to and deposit in a foreign-trade zone for exportation or for storage pending exportation.
All such withdrawals shall be made under a consent of surety on the proprietor's operations or unit bond, as prescribed in [§ 28.58(c)](/current/title-27/section-28.58#p-28.58\(c\)).
(48 Stat. 999, as amended, 72 Stat. 1362; [19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c), [26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71724](https://www.federalregister.gov/citation/44-FR-71724), Dec. 11, 1979; T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004]
#### § 28.152 Notice, TTB Form 5100.11.
Notice of withdrawal of specially denatured spirits, as authorized in [§ 28.151](/current/title-27/section-28.151) shall be made on TTB Form 5100.11 by the proprietor of the distilled spirits plant from which the denatured spirits are to be withdrawn.
\[T.D. ATF-198, [50 FR 8560](https://www.federalregister.gov/citation/50-FR-8560), Mar. 1, 1985, as amended by T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004]
#### § 28.153 Withdrawal procedure.
The provisions of [§§ 28.93](/current/title-27/section-28.93), [28.94](/current/title-27/section-28.94), [28.98](/current/title-27/section-28.98), [28.105](/current/title-27/section-28.105), and [28.117](/current/title-27/section-28.117) in respect of method of conveyance, authorized containers, gauging, inspection, approval and shipment, report of removal, and disposition of forms shall be applicable to specially denatured spirits to be withdrawn under the provisions of this subpart.
(48 Stat. 999, as amended, 72 Stat. 1362; [19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c), [26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214))
\[T.D. ATF-46, [42 FR 44774](https://www.federalregister.gov/citation/42-FR-44774), Sept. 6, 1977, as amended by T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004]
#### § 28.154 Export marks.
In addition to the marks and brands required to be placed on packages and cases at the time they are filled under the provisions of [part 19 of this chapter](/current/title-27/part-19), the proprietor shall mark the word “Export” on the Government side of each case or Government head of each container before removal from the bonded premises for any exportation authorized under this subpart.
(Sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended ([19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c)); sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214)))
\[T.D. ATF-82, [46 FR 21159](https://www.federalregister.gov/citation/46-FR-21159), Apr. 9, 1981]
#### § 28.155 Consignment, shipment, and delivery.
The consignment, shipment, and delivery of specially denatured spirits withdrawn free of tax under this subpart shall be made under the provisions of [subpart M of this part](/current/title-27/part-28/subpart-M).
(48 Stat. 999, as amended, 72 Stat. 1362; [19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c), [26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214))
#### § 28.156 Losses.
Where there has been a loss of specially denatured spirits while in transit from the bonded premises of a distilled spirits plant to a port of export or a foreign-trade zone, the exporter shall file claim for allowance of the loss in accordance with the provisions of [subpart O of this part](/current/title-27/part-28/subpart-O).
#### § 28.157 Exportation by dealer in specially denatured spirits.
A dealer in specially denatured spirits who holds a permit under [part 20 of this chapter](/current/title-27/part-20) may export specially denatured spirits in accordance with [§ 20.183 of this chapter](/current/title-27/section-20.183).
\[T.D. TTB-140, [81 FR 59464](https://www.federalregister.gov/citation/81-FR-59464), Aug. 30, 2016]
### Return of Specially Denatured Spirits to Bonded Premises
#### § 28.160 General.
Specially denatured spirits, which have been lawfully withdrawn free of tax under the provisions of this part for exportation, or for deposit in a foreign-trade zone, may, subject to the requirements of [§ 28.161](/current/title-27/section-28.161), be returned:
(a) To the bonded premises of a distilled spirits plant for redistillation; or
(b) To the bonded premises of any distilled spirits plant pending subsequent lawful withdrawal free of tax. However, such specially denatured spirits may only be returned before they are exported, or deposited in a foreign-trade zone. If the specially denatured spirits are to be returned to bonded premises for storage without redistillation, the proprietor shall also execute a consent of surety Form 5000.18 to extend the terms of his operations or unit bond to cover the return and storage of such specially denatured spirits.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1365, as amended ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214), [5223](https://www.govinfo.gov/link/uscode/26/5223)))
\[T.D. ATF-198, [50 FR 8561](https://www.federalregister.gov/citation/50-FR-8561), Mar. 1, 1985, as amended by T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004; T.D. TTB-146, [82 FR 1134](https://www.federalregister.gov/citation/82-FR-1134), Jan. 4, 2017]
#### § 28.161 Notice of return of specially denatured spirits.
If a proprietor of a distilled spirits plant desires to return specially denatured spirits to his plant as provided in [§ 28.160](/current/title-27/section-28.160), he shall file a notice with the appropriate TTB officer. A copy of the notice shall be prepared for submission to the customs official, as required by [§ 28.162](/current/title-27/section-28.162). The notice shall be executed under the penalties of perjury and shall show:
(a) Name, address, and plant number of the distilled spirits plant to which the specially denatured spirits are to be returned.
(b) Name, address, and plant number of the distilled spirits plant from which the specially denatured spirits were withdrawn.
(c) Serial number of the TTB Form 5100.11 and the date withdrawn.
(d) Present location of specially denatured spirits to be returned.
(e) Description of the specially denatured spirits—kind, serial numbers of containers, and quantity in wine gallons.
(f) Reason for return of the specially denatured spirits.
(g) Disposition to be made of specially denatured spirits, i.e. redistillation or return to processing on the bonded premises.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1365, as amended ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214), [5223](https://www.govinfo.gov/link/uscode/26/5223)))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71724](https://www.federalregister.gov/citation/44-FR-71724), Dec. 11, 1979; T.D. ATF-198, [50 FR 8561](https://www.federalregister.gov/citation/50-FR-8561), Mar. 1, 1985; T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004]
#### § 28.162 Responsibility for return of specially denatured spirits.
The principal on the bond under which the specially denatured spirits were withdrawn free of tax shall be responsible for arranging the return of the spirits to the distilled spirits plant receiving them. The principal or his agent shall submit a copy of the notice required by [§ 28.161](/current/title-27/section-28.161) to the appropriate customs official. If the specially denatured spirits are returned before the TTB Form 5100.11 has been filed with the customs official, the principal shall submit the form with the notice. The customs officer shall, if the specially denatured spirits are eligible for return under [§ 28.160](/current/title-27/section-28.160), accept the notice as authority for the return of the specially denatured spirits to the distilled spirits plant identified in the notice. The customs officer shall retain the notice and shall mark each copy of TTB Form 5100.11 “Canceled”, note the date thereon, return both copies to the principal, and, if the spirits are in customs custody, release them for return. The principal shall retain one copy of the canceled TTB Form 5100.11 and file one copy with the appropriate TTB officer identified on the form.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1365, as amended ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214), [5223](https://www.govinfo.gov/link/uscode/26/5223)))
\[T.D. ATF-62, [44 FR 71724](https://www.federalregister.gov/citation/44-FR-71724), Dec. 11, 1979, as amended by T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004]
#### § 28.163 Receipt of specially denatured spirits.
The receipt, gauge, and disposition of the specially denatured spirits at the distilled spirits plant shall be in accordance with the applicable provisions of [subpart U of part 19 of this chapter](/current/title-27/part-19/subpart-U).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1362, as amended, 1365, as amended ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214), [5223](https://www.govinfo.gov/link/uscode/26/5223)))
\[T.D. ATF-62, [44 FR 71724](https://www.federalregister.gov/citation/44-FR-71724), Dec. 11, 1979]
## Subpart I—Exportation of Distilled Spirits With Benefit of Drawback
#### § 28.171 General.
Distilled spirits manufactured, produced, bottled in bottles, packed in containers, or packaged in casks or other bulk containers in the United States on which an internal revenue tax has been paid or determined, and which have been marked under the provisions of [27 CFR part 19](/current/title-27/part-19) and of this part, as applicable, especially for export with benefit of drawback may be:
(a) Exported;
(b) Laden for use on the vessels or aircraft described in [§ 28.21](/current/title-27/section-28.21); or
(c) Transferred to and deposited in a foreign-trade zone for exportation or for storage pending exportation; or
(d) Transferred to and deposited in a customs bonded warehouse as provided for in [§ 28.26(b)](/current/title-27/section-28.26#p-28.26\(b\)).
On receipt by the appropriate TTB officer of required evidence of exportation, lading for use, or transfer, there shall be allowed to the bottler (or packager) of the spirits, drawback equal in amount to the tax found to have been paid or determined on the spirits.
(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended ([19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309)); sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended ([19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c)); sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended ([26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062)); sec. 3, Pub. L. 91-659, 84 Stat. 1965, as amended ([26 U.S.C. 5066](https://www.govinfo.gov/link/uscode/26/5066)))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960, as amended by T.D. 7112, [36 FR 8581](https://www.federalregister.gov/citation/36-FR-8581), May 8, 1971. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### Editorial Note:
For Federal Register citations affecting [§ 28.171](/current/title-27/section-28.171), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
### Filing of Notice and Removal
#### § 28.190 Notice, TTB Form 5110.30.
Notice of shipment of distilled spirits for export, for use as supplies on vessels or aircraft, for deposit in a foreign-trade zone, or for deposit in a customs bonded warehouse, shall be prepared by the exporter on TTB Form 5110.30, in accordance with the instructions on the form.
(48 Stat. 690, as amended, 48 Stat. 999, as amended, 72 Stat. 1336, as amended, 84 Stat. 1965; [19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309), [81c](https://www.govinfo.gov/link/uscode/19/81c), [26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062), [5066](https://www.govinfo.gov/link/uscode/26/5066))
\[T.D. ATF-198, [50 FR 8561](https://www.federalregister.gov/citation/50-FR-8561), Mar. 1, 1985, as amended by T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004]
#### § 28.191 \[Reserved]
#### § 28.192 Packages of distilled spirits to be gauged.
Except for spirits which may be tax determined on the basis of the original gauge, spirits in packages which are to be removed for export with benefit of drawback, shall be gauged by the distilled spirits plant proprietor prior to preparation of notice on TTB Form 5110.30. When spirits in packages are gauged, a package gauge record shall be prepared by the proprietor, as provided in [27 CFR part 19](/current/title-27/part-19), and a copy of the package gauge record shall be attached to each copy of TTB Form 5110.30 and considered a part of the claim.
(Approved by the Office of Management and Budget under control number 1512-0250 and 1512-0199)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended ([26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062)))
\[T.D. ATF-198, [50 FR 8561](https://www.federalregister.gov/citation/50-FR-8561), Mar. 1, 1985, as amended by T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004]
#### § 28.193 Export marks.
In addition to the marks and brands required to be placed on packages or other bulk containers and cases under the provisions of [part 19 of this chapter](/current/title-27/part-19), the exporter shall mark the word “Export” on the Government side of each case or Government head of each container before removal for export, for use on vessels or aircraft, or for transfer to a foreign-trade zone or a customs bonded warehouse.
(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended ([19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309)); sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended ([19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c)); sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended ([26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062)); sec. 3, Pub. L. 91-659, 84 Stat. 1965, as amended ([26 U.S.C. 5066](https://www.govinfo.gov/link/uscode/26/5066)))
\[T.D. ATF-82, [46 FR 21159](https://www.federalregister.gov/citation/46-FR-21159), Apr. 9, 1981]
#### §§ 28.194-28.195 \[Reserved]
#### § 28.195b Claims on spirits tax determined on and after January 1, 1980.
(a) *Preparation.* Claims for drawback of tax on spirits tax determined on and after January 1, 1980, and withdrawn for any purpose authorized by [§ 28.171](/current/title-27/section-28.171), shall be prepared in duplicate by the bottler or packager on parts II and III of TTB Form 5110.30.
(b) *Supporting documents.* Each claim shall be supported by an invoice, bill of lading or other document which identifies the date of tax determination, unless the bill of lading required by [§ 28.250](/current/title-27/section-28.250) identifies this date. Additional supporting documents are required if the claim covers distilled spirits products on which the claimed drawback rate exceeds the rate of tax imposed by [26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001) or [7652](https://www.govinfo.gov/link/uscode/26/7652) on each proof gallon or part thereof of distilled spirits produced in or imported into the United States (e.g., a product containing alcoholic flavoring materials on which drawback has been claimed by the manufacturer of the material under [26 U.S.C. 5131-5134](https://www.govinfo.gov/link/uscode/26/5131)). For each such product, the additional supporting documents shall consist of a copy of each related dump and batch record, package gauge record as prescribed in [27 CFR part 19](/current/title-27/part-19), and/or bottling and packaging record. The appropriate TTB officer may also require these or other supporting documents for any distilled spirits product.
(c) *Filing.* One copy of the claim, with supporting documents, if required, shall be filed with the appropriate TTB officer. The bottler or packager shall retain the other copy on file.
(Approved by the Office of Management and Budget under control number 1512-0198)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended ([26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062)))
\[T.D. ATF-198, [50 FR 8561](https://www.federalregister.gov/citation/50-FR-8561), Mar. 1, 1985, as amended by T.D. ATF-212, [50 FR 34123](https://www.federalregister.gov/citation/50-FR-34123), Aug. 23, 1985; T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004]
#### § 28.196 Consignment, shipment, and delivery.
The consignment, shipment, and delivery of distilled spirits removed under this subpart for export, use on vessels or aircraft, transfer to a customs bonded warehouse, or transfer to a foreign-trade zone, shall be in accordance with the applicable provisions of [subpart M of this part](/current/title-27/part-28/subpart-M).
(72 Stat. 1336, 84 Stat. 1965; [26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062), [5066](https://www.govinfo.gov/link/uscode/26/5066))
\[T.D. 7112, [36 FR 8583](https://www.federalregister.gov/citation/36-FR-8583), May 8, 1971. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### § 28.197 Return of spirits withdrawn for export with benefit of drawback.
When notice is filed by an exporter as provided in [§ 28.198](/current/title-27/section-28.198), spirits on which the tax has been paid or determined, and which were withdrawn especially for export with benefit of drawback as provided in [§ 28.171](/current/title-27/section-28.171), but which spirits have not been laden for export, laden for use, or deposited in a customs bonded warehouse or foreign-trade zone, may for good cause be returned under the applicable provisions of this part and [27 CFR part 19](/current/title-27/part-19):
(a) To the bonded premises of the distilled spirits plant for purposes authorized under 26 U.S.C.; or
(b) To a wholesale liquor dealer; or
(c) To a taxpaid storeroom.
The export marks on spirits returned under this section shall be removed by obliteration, relabeling or recasing.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended ([26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062)))
\[T.D. ATF-198, [50 FR 8561](https://www.federalregister.gov/citation/50-FR-8561), Mar. 1, 1985, as amended by T.D. ATF-206, [50 FR 23956](https://www.federalregister.gov/citation/50-FR-23956), June 7, 1985; T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004]
#### § 28.198 Notice of return.
If an exporter desires to return spirits to a distilled spirits plant, wholesale liquor dealer or taxpaid storeroom, as provided in [§ 28.197](/current/title-27/section-28.197), he shall file a notice, executed under the penalties of perjury, with the appropriate TTB officer. The notice shall be prepared in triplicate for submission to the customs official as required in [§ 28.199](/current/title-27/section-28.199). The notice shall show the:
(a) Name, address, and plant number of the distilled spirits plant which packaged or bottled the spirits;
(b) Date and serial number of the TTB Form 5110.30 on which the spirits were withdrawn;
(c) Present location of the spirits to be returned;
(d) Number, size and identification of the containers;
(e) Proof of spirits;
(f) Reason for the return; and
(g) Planned disposition of the returned spirits.
(Approved by the Office of Management and Budget under control number 1512-0206)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended ([26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062)))
\[T.D. ATF-198, [50 FR 8562](https://www.federalregister.gov/citation/50-FR-8562), Mar. 1, 1985, as amended at T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004]
#### § 28.199 Responsibility for return of spirits withdrawn for export with benefit of drawback.
The exporter shall be responsible for arranging the return of the spirits under this subpart to the proprietor or wholesale liquor dealer who will receive them. The exporter or his agent shall submit the original and copies of the notice required by [§ 28.198](/current/title-27/section-28.198) to the appropriate customs official. If the spirits are returned before TTB Form 5110.30 has been filed with the customs official, the exporter shall submit Form 5110.30 with the notice. The customs officer shall, if the spirits are eligible for return under [§ 28.197](/current/title-27/section-28.197), accept the notice as authority for the return of the spirits to the premises identified in the notice. The customs official shall acknowledge receipt on the notice, retain a copy, and return the original and one copy of the notice to the exporter. The exporter shall retain the copy of the notice and file the original of the notice with the appropriate TTB officer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended ([26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062)))
\[T.D. ATF-198, [50 FR 8562](https://www.federalregister.gov/citation/50-FR-8562), Mar. 1, 1985, as amended by T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004]
## Subpart J \[Reserved]
## Subpart K—Exportation of Wine With Benefit of Drawback
#### § 28.211 General.
Wines manufactured, produced, bottled in bottles packed in containers, or packaged in casks or other bulk containers in the United States on which an internal revenue tax has been paid or determined, and which are filled on premises qualified under this chapter to package or bottle wines, may, subject to this part, be:
(a) Exported;
(b) Laden for use on the vessels or aircraft described in [§ 28.21](/current/title-27/section-28.21); or
(c) Transferred to and deposited in a foreign-trade zone for exportation or for storage pending exportation.
On receipt by the appropriate TTB officer of required evidence of exportation, lading for use, or transfer, there shall be allowed a drawback equal in amount to the tax found to have been paid or determined on the wines.
(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended ([19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309)); Sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended ([19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c)); Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended ([26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062)))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-51, [43 FR 24245](https://www.federalregister.gov/citation/43-FR-24245), June 2, 1978; T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004]
#### § 28.212 Persons authorized.
Persons who have qualified under this chapter as proprietors of distilled spirits plants, bonded wine cellars, or taxpaid wine bottling houses, and persons who are wholesale liquor dealers (as defined in [§ 31.32 of this chapter](/current/title-27/section-31.32)) and have registered as a wholesale liquor dealer in accordance with [part 31 of this chapter](/current/title-27/part-31), are authorized to remove wines under the provisions of this subpart.
([26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062))
\[T.D. TTB-79, [74 FR 37406](https://www.federalregister.gov/citation/74-FR-37406), July 28, 2009]
#### § 28.213 \[Reserved]
#### § 28.214 Notice and claim, Form 5120.24.
Claim for allowance of drawback of internal revenue taxes on wines removed under the provisions of [§ 28.211](/current/title-27/section-28.211) and [§ 28.212](/current/title-27/section-28.212), shall be prepared by the exporter on Form 5120.24, in quadruplicate: *Provided,* That where the withdrawal is for use on aircraft, an extra copy, marked “Consignee's Copy”, shall be prepared. Each Form 5120.24 shall be given, by the exporter, a serial number beginning with “1” for the first day of January of each year and running consecutively thereafter to December 31, inclusive.
(46 Stat. 690, as amended, 72 Stat. 1336; [19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309), [26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004; T.D. TTB-146, [82 FR 1134](https://www.federalregister.gov/citation/82-FR-1134), Jan. 4, 2017]
#### § 28.215 Certificate of tax determination, Form 5120.20.
Every claim for drawback of tax on Form 5120.24 shall be supported by a certificate, Form 5120.20, which shall be executed, in duplicate, (a) by the person who withdrew the wine from bonded premises on tax determination, certifying that all taxes have been properly determined on such wine, or (b) where the wine was bottled or packaged after tax determination, by the person who did such bottling or packaging, certifying that the wines so bottled or packaged were received in taxpaid status and specifying from whom they were so received. The appropriate TTB officer may require other evidence of tax payment whenever such officer deems it necessary. The exporter is responsible for securing Form 5120.20, properly executed, and submitting the original of such form with the claim. The exporter shall retain the copy of Form 5120.20 for his files.
(72 Stat. 1336; [26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960, as amended by T.D. TTB-146, [82 FR 1137](https://www.federalregister.gov/citation/82-FR-1137), Jan. 4, 2017]
#### § 28.216 Export marks.
In addition to the marks and brands required to be placed on packages or other bulk containers and cases under the provisions of [part 24 of this chapter](/current/title-27/part-24), the exporter shall mark the word “Export” on the Government side of each case or Government head of each container before removal for export, for use on vessels or aircraft, or for transfer to a foreign-trade zone.
(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended ([19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309)); sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended ([19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c)); sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended ([26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062)))
\[T.D. ATF-82, [46 FR 21159](https://www.federalregister.gov/citation/46-FR-21159), Apr. 9, 1981, as amended by T.D. ATF-299, [55 FR 25034](https://www.federalregister.gov/citation/55-FR-25034), June 19, 1990; T.D. ATF-372, [61 FR 20725](https://www.federalregister.gov/citation/61-FR-20725), May 8, 1996; T.D. TTB-196, [89 FR 87945](https://www.federalregister.gov/citation/89-FR-87945), Nov. 6, 2024]
#### § 28.217 Consignment, shipment, and delivery.
The consignment, shipment, and delivery of wines removed under this subpart shall be made under the provisions of [subpart M of this part](/current/title-27/part-28/subpart-M).
(72 Stat. 1336; [26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062))
#### § 28.218 Disposition of Forms 1582-A (5120.24).
On removal of the wines from the premises, the exporter shall forward one copy of Form 1582-A (5120.24) to the appropriate TTB officer, retain one copy for his files, and deliver the original and remaining copy to the officer to whom the shipment is consigned, or in whose care it is shipped, as required by [subpart M of this part](/current/title-27/part-28/subpart-M). Where the shipment is for delivery for use on aircraft, the copy marked “Consignee's Copy”, provided for in [§ 28.214](/current/title-27/section-28.214), shall be forwarded to the airline company at the airport.
(46 Stat. 690, as amended, 48 Stat. 999, as amended, 72 Stat. 1336; [19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309), [81c](https://www.govinfo.gov/link/uscode/19/81c), [26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004]
#### § 28.219 Return of wine withdrawn for export with benefit of drawback.
When notice is filed by an exporter as provided in [§ 28.220](/current/title-27/section-28.220), wine on which the tax has been paid or determined, and which was withdrawn especially for export with benefit of drawback as provided in [§ 28.211](/current/title-27/section-28.211), but which wine has not been laden for export, laden for use, or deposited in a foreign-trade zone, may for good cause be returned under the applicable provisions of this part and [27 CFR part 24](/current/title-27/part-24):
(a) To a taxpaid storeroom at a bonded wine cellar; or
(b) To a wholesale liquor dealer.
The export marks on wines returned under this section shall be removed from the containers.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended ([26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062)))
\[T.D. ATF-198, [50 FR 8562](https://www.federalregister.gov/citation/50-FR-8562), Mar. 1, 1985, as amended by T.D. ATF-344, [58 FR 40355](https://www.federalregister.gov/citation/58-FR-40355), July 28, 1993; T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004; T.D. TTB-196, [89 FR 87945](https://www.federalregister.gov/citation/89-FR-87945), Nov. 6, 2024]
#### § 28.220 Notice of return.
If an exporter desires to return wine to a bonded wine cellar or wholesale liquor dealer as provided in [§ 28.219](/current/title-27/section-28.219), he shall file a notice, executed under the penalties of perjury, with the appropriate TTB officer. The notice shall be prepared in triplicate for submission to the customs official as required in [§ 28.220a](/current/title-27/section-28.220a). The notice shall show the:
(a) Name, address, and registration number of the bonded wine cellar from which withdrawn;
(b) Date and serial number of the Form 1582-A (5120.24) on which the wine was withdrawn;
(c) Present location of the wine to be returned;
(d) Number, size and identification of the containers;
(e) Total wine gallons for each tax class of wine; and
(f) Reason for the return.
(Approved by the Office of Management and Budget under control number 1512-0292)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended ([26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062)))
\[T.D. ATF-198, [50 FR 8562](https://www.federalregister.gov/citation/50-FR-8562), Mar. 1, 1985; [50 FR 23410](https://www.federalregister.gov/citation/50-FR-23410), June 4, 1985, as amended by T.D. TTB-8, [69 FR 3833](https://www.federalregister.gov/citation/69-FR-3833), Jan. 27, 2004]
#### § 28.220a Responsibility for return of wine withdrawn for export with benefit of drawback.
The exporter shall be responsible for arranging the return of wine under this subpart to the proprietor or wholesale liquor dealer receiving the wine. The exporter or his agent shall submit the original and copies of the notice required by [§ 28.220](/current/title-27/section-28.220) to the appropriate customs official. If the wine is returned before Form 1582-A (5120.24) has been filed with the customs official, the exporter shall submit TTB Form 1582-A with the notice. The customs officer shall, if the wine is eligible for return under [§ 28.219](/current/title-27/section-28.219), accept the notice as authority for the return of the wine to the premises identified in the notice. The customs officer shall acknowledge receipt of the notice, retain a copy, and return the original and one copy of the notice to the exporter. The exporter shall retain the copy and file the original of the notice with the appropriate TTB officer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended ([26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062)))
\[T.D. ATF-198, [50 FR 8562](https://www.federalregister.gov/citation/50-FR-8562), Mar. 1, 1985, as amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
## Subpart L—Exportation of Beer With Benefit of Drawback
#### § 28.221 General.
Beer brewed or produced in the United States and on which the internal revenue tax has been paid may, subject to this part, be:
(a) Exported;
(b) Delivered for use as supplies on the vessels and aircraft described in [§ 28.21](/current/title-27/section-28.21); or
(c) Transferred to and deposited in a foreign-trade zone for exportation or for storage pending exportation.
Claim for drawback of taxes found to have been paid may be filed only by the producing brewer or his duly authorized agent. On receipt by the appropriate TTB officer of required evidence of such exportation, delivery for use, or transfer, there shall be allowed a drawback equal in amount to the tax found to have been paid on such beer.
(46 Stat. 690, as amended, 48 Stat. 999, as amended, 72 Stat. 1335; [19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309), [81c](https://www.govinfo.gov/link/uscode/19/81c), [26 U.S.C. 5055](https://www.govinfo.gov/link/uscode/26/5055))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975. Redesignated and amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
#### § 28.222 Claim, Form 1582-B (5130.6).
Claim for allowance of drawback of internal revenue taxes on beer brewed or produced in the United States shall be prepared on Form 1582-B (5130.6), in quadruplicate, as required by this part. Each Form 1582-B (5130.6) shall be given, by the person initiating the form, a serial number beginning with “1” for the first day of January of each year and running consecutively thereafter to December 31, inclusive.
(72 Stat. 1335; [26 U.S.C. 5055](https://www.govinfo.gov/link/uscode/26/5055))
#### § 28.223 Export marks.
In addition to the marks and brands required to be placed on kegs, barrels, cases, crates or other packages under the provisions of [part 25 of this chapter](/current/title-27/part-25), the exporter shall mark the word “Export” on each container or case before removal for export, for use on vessels or aircraft, or for transfer to a foreign-trade zone.
(Sec. 309, Tariff Act of 1930, 46 Stat. 690, as amended ([19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309)); sec. 3, Act of June 18, 1934, 48 Stat. 999, as amended ([19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c)); sec. 201, Pub. L. 85-859, 72 Stat. 1335, as amended ([26 U.S.C. 5055](https://www.govinfo.gov/link/uscode/26/5055)))
\[T.D. ATF-82, [46 FR 21159](https://www.federalregister.gov/citation/46-FR-21159), Apr. 9, 1981, as amended by T.D. ATF-224, [51 FR 7700](https://www.federalregister.gov/citation/51-FR-7700), Mar. 5, 1986]
### Execution of Claims
#### § 28.225 Removals of beer by brewer.
Where a brewer removes taxpaid beer from the brewery or from its place of storage elsewhere for exportation, for lading for use as supplies on vessels or aircraft, or for deposit in a foreign-trade zone, he shall execute the notice and claim on Form 1582-B (5130.6). On removal of the beer for shipment the brewer shall file one copy of Form 1582-B with the appropriate TTB officer, retain one copy for his files, and immediately forward the original and one copy of the form:
(a) In case of shipments for export or for use as supplies on vessels or aircraft, to the district director of customs at the port of export; or
(b) In the case of shipments to the armed services of the United States for export, to the commanding or supply officer to whom the shipment is consigned; or
(c) In the case of shipments to a foreign-trade zone, to the customs officer in charge of the zone.
(46 Stat. 690, as amended, 48 Stat. 999, as amended, 72 Stat. 1335; [19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309), [81c](https://www.govinfo.gov/link/uscode/19/81c), [26 U.S.C. 5055](https://www.govinfo.gov/link/uscode/26/5055))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960, as amended by T.D. 7006, [34 FR 2251](https://www.federalregister.gov/citation/34-FR-2251), Feb. 15, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. TTB-85, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
#### § 28.226 Removals of beer by agent on behalf of brewer.
Where proper power of attorney authorizing an agent to execute a claim on behalf of the brewer has been filed with the appropriate TTB officer, such agent may, for any of the purposes authorized in [§ 28.221](/current/title-27/section-28.221), remove taxpaid beer from the brewery where produced or from its place of storage elsewhere, and execute the notice and claim on Form 1582-B (5130.6) on behalf of the brewer. On removal of the beer, such agent shall dispose of Form 1582-B in accordance with the applicable procedure set forth in [§ 28.225](/current/title-27/section-28.225).
(46 Stat. 690, as amended, 48 Stat. 999, as amended, 72 Stat. 1335; [19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309), [81c](https://www.govinfo.gov/link/uscode/19/81c), [26 U.S.C. 5055](https://www.govinfo.gov/link/uscode/26/5055))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975. Redesignated and amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
#### § 28.227 Removals of beer by persons other than the brewer or agent of the brewer.
Where there is a removal of taxpaid beer by a person other than the brewer or the agent of the brewer for any of the purposes authorized in [§ 28.221](/current/title-27/section-28.221), such person shall execute the notice, only, on Form 1582-B (5130.6). Where the removal consists of the products of more than one brewer, separate Forms 1582-B shall be prepared for the products of each brewer. On removal of the beer for shipment such person shall forward two copies of Form 1582-B (5130.6) to the producing brewer, and immediately forward the original and one copy of the form as prescribed in [§ 28.225(a)](/current/title-27/section-28.225#p-28.225\(a\)), [(b)](/current/title-27/section-28.225#p-28.225\(b\)), or [(c)](/current/title-27/section-28.225#p-28.225\(c\)), as the case may be. On receipt of the two copies of Form 1582-B (5130.6) from the exporter, the brewer shall, if he wishes to claim drawback on the beer covered thereby, execute the claim for drawback on both copies of the form, file one copy of the claim with the appropriate TTB officer, and retain the remaining copy for his files.
(46 Stat. 690, as amended, 48 Stat. 999, as amended, 72 Stat. 1335; [19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309), [81c](https://www.govinfo.gov/link/uscode/19/81c), [26 U.S.C. 5055](https://www.govinfo.gov/link/uscode/26/5055))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975. Redesignated and amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
### Consignment, Shipment, and Delivery
#### § 28.230 Consignment, shipment, and delivery.
The consignment, shipment, and delivery of taxpaid beer removed under this subpart shall be made under the provisions of [subpart M of this part](/current/title-27/part-28/subpart-M).
(72 Stat. 1335; [26 U.S.C. 5055](https://www.govinfo.gov/link/uscode/26/5055))
## Subpart M—Shipment or Delivery for Export
### Consignment
#### § 28.241 Shipment for export, or for use on vessels.
All liquors and specially denatured spirits intended for export or liquors intended for use as supplies on vessels shall be consigned to the district director of customs at the port of exportation, or port of lading for supplies on vessels, except that when the shipment is for export to a contiguous foreign territory it shall be consigned to the foreign consignee at destination in care of the district director of customs at the port of export.
(72 Stat. 1334, 1335, 1336, 1362, 1380; [26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5055](https://www.govinfo.gov/link/uscode/26/5055), [5062](https://www.govinfo.gov/link/uscode/26/5062), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960, as amended by T.D. 7006, [34 FR 2251](https://www.federalregister.gov/citation/34-FR-2251), Feb. 15, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### § 28.242 Shipment for use on aircraft.
(a) *Distilled spirits and wine.* All distilled spirits and wines intended for use on aircraft shall be consigned to the airline at the airport from which the aircraft will depart in international travel, in care of the district director of customs. On receipt of the distilled spirits or wines they shall be stored at the airport under customs custody until laden on aircraft.
(b) *Beer.* Beer intended for use on aircraft shall be consigned to the district director of customs at the port of lading.
(48 Stat. 999, as amended, 72 Stat. 1362, 1380; [19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309), [26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1969, as amended by T.D. 7006, [34 FR 2251](https://www.federalregister.gov/citation/34-FR-2251), Feb. 15, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### § 28.243 Shipment to armed services.
On removal of distilled spirits, wines, or beer for export to the armed services of the United States, the shipment shall be consigned to the commanding officer or supply officer at the supply base or other place of delivery.
(72 Stat. 1334, 1335, 1336, 1362, 1380; [26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5055](https://www.govinfo.gov/link/uscode/26/5055), [5062](https://www.govinfo.gov/link/uscode/26/5062), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362))
#### § 28.244 Shipment to manufacturing bonded warehouse.
Distilled spirits and wines withdrawn for shipment to a manufacturing bonded warehouse shall be consigned to the proprietor of such warehouse in care of the customs officer in charge of the warehouse.
(72 Stat. 1362, 1380; [26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71725](https://www.federalregister.gov/citation/44-FR-71725), Dec. 11, 1979]
#### § 28.244a Shipment to a customs bonded warehouse.
Distilled spirits and wine withdrawn for shipment to a customs bonded warehouse shall be consigned in care of the customs officer in charge of the warehouse.
(Sec. 3, Pub. L. 91-659, 84 Stat. 1965, as amended ([26 U.S.C. 5066](https://www.govinfo.gov/link/uscode/26/5066)); sec. 2, Pub. L. 96-601, 94 Stat. 3495 ([26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362)))
\[T.D. ATF-88, [46 FR 39816](https://www.federalregister.gov/citation/46-FR-39816), Aug. 5, 1981]
#### § 28.245 Shipment to foreign-trade zone.
Where distilled spirits (including specially denatured spirits), wines, or beer, are transferred to a foreign-trade zone for exportation or for storage pending exportation, the shipment shall be consigned to the Zone Operator in care of the customs officer in charge of the zone.
(48 Stat. 999, as amended, 72 Stat. 1362, 1380; [19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c), [26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362))
#### § 28.246 Delivery for shipment.
The proprietor or exporter may deliver the shipment directly to the consignees designated in [§§ 28.241](/current/title-27/section-28.241) through [28.245](/current/title-27/section-28.245), or he may deliver it to a carrier for transportation and delivery to such consignees, or, when the exportation is to a contiguous foreign country, to the foreign consignee.
(72 Stat. 1334, 1335, 1336, as amended, 1362, 1380; [26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5055](https://www.govinfo.gov/link/uscode/26/5055), [5062](https://www.govinfo.gov/link/uscode/26/5062), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362))
\[T.D. 7002, [34 FR 1599](https://www.federalregister.gov/citation/34-FR-1599), Feb. 1, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975 and amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
#### § 28.247 Change in consignee.
Where a change of consignee is desired after the liquors (including specially denatured spirits) have been removed from the shipping premises, the exporter shall notify the appropriate officer to whom the shipment is required by [§§ 28.241-28.245](/current/title-27/section-28.241) to be consigned or in whose care it is required to be shipped, and forward a copy of such notification to the appropriate TTB officer. Such notice shall identify the withdrawal or claim form, as the case may be, covering the shipment.
(72 Stat. 1334, 1335, 1336, 1362, 1380; [26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5055](https://www.govinfo.gov/link/uscode/26/5055), [5062](https://www.govinfo.gov/link/uscode/26/5062), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362))
\[T.D. 7002, [34 FR 1599](https://www.federalregister.gov/citation/34-FR-1599), Feb. 1, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975 and amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
### Bills of Lading
#### § 28.250 Bills of lading required.
A copy of the export bill of lading covering transportation from the port of export to the foreign destination, or a copy of the through bill of lading to the foreign destination, if so shipped, covering the acceptance of the shipment by a carrier for such transportation, shall be obtained and filed by the claimant or exporter with the appropriate TTB officer. Where the shipment consists of distilled spirits for deposit in a customs bonded warehouse, or distilled spirits or wines, for deposit in a foreign-trade zone, with benefit of drawback, a copy of the transportation bill of lading covering the shipment shall be obtained and filed by the claimant or exporter with the appropriate TTB officer: *Provided,* That such transportation bill of lading will not be required when delivery is made directly to the foreign-trade zone or the customs bonded warehouse by the shipper. Bills of lading shall be signed by the carrier or by an agent of the carrier and shall contain the following minimum information:
(a) As to spirits specially denatured spirits, and wines:
(1) The name of the exporter (if different from the shipper),
(2) The name and address of the consignee (foreign consignee in case of export or through bill of lading),
(3) The number of packages or cases,
(4) The serial number of the TTB Form 5100.11, 5110.30, or 5120.24, as the case may be, and
(5) The total quantity in wine gallons or liters,
(b) As to beer:
(1) The name of the shipper,
(2) The name and address of the consignee (foreign consignee in case of export or through bill of lading), and
(3) The number and size of containers.
Where a copy of an export bill of lading or a copy of the through bill of lading is required and is not obtainable, a certificate given by an agent of such carrier, as prescribed in [§ 28.253](/current/title-27/section-28.253), may be procured and transmitted by the claimant or exporter to the appropriate TTB officer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, 1335, 1336, as amended, 1362, 1380, ([26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5055](https://www.govinfo.gov/link/uscode/26/5055), [5062](https://www.govinfo.gov/link/uscode/26/5062), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362)); sec. 3(a), Pub. L. 91-659, 84 Stat. 1965 ([26 U.S.C. 5066](https://www.govinfo.gov/link/uscode/26/5066)))
\[T.D. 7002, [34 FR 1599](https://www.federalregister.gov/citation/34-FR-1599), Feb. 1, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### Editorial Note:
For Federal Register citations affecting [§ 28.250](/current/title-27/section-28.250), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
#### § 28.251 Railway express receipts.
Where the exportation is to a contiguous foreign country and the shipment is by railway express, a receipt issued by the railway express agency may be accepted in lieu of an export bill of lading if the receipt furnishes all of the information required in an export bill of lading.
(72 Stat. 1334, 1335, 1336, 1362, 1380; [26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5055](https://www.govinfo.gov/link/uscode/26/5055), [5062](https://www.govinfo.gov/link/uscode/26/5062), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362))
#### § 28.252 Air express or freight bills of lading.
Where the exportation is made by air express or air freight, a bill of lading issued by the conveying airline is considered for the purpose of this part to be an export bill of lading if it otherwise conforms to the requirements of [§ 28.250](/current/title-27/section-28.250).
(72 Stat. 1334, 1335, 1336, 1362, 1380; [26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5055](https://www.govinfo.gov/link/uscode/26/5055), [5062](https://www.govinfo.gov/link/uscode/26/5062), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362))
\[T.D. 7002, [34 FR 1599](https://www.federalregister.gov/citation/34-FR-1599), Feb. 1, 1969, as amended by [36 FR 8583](https://www.federalregister.gov/citation/36-FR-8583), May 8, 1971. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975 and amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
#### § 28.253 Certificate by export carrier.
A certificate, executed under the penalties of perjury, by an agent or representative of the export carrier, showing actual exportation of the liquors (including specially denatured spirits) may be furnished by an exporter as evidence of exportation. The certificate shall contain a description of the shipment, including the serial number of the withdrawal form, or the claim and entry form, as the case may be, the name of the exporter, the name of the consignee, the date received, the place where received by such carrier, and the name of the carrier from which received.
(72 Stat. 1334, 1335, 1336, 1362, 1380; [26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5055](https://www.govinfo.gov/link/uscode/26/5055), [5062](https://www.govinfo.gov/link/uscode/26/5062), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362))
## Subpart N—Proceedings at Ports of Export
#### § 28.261 Notice to district director of customs.
On arrival at the port of exportation, of distilled spirits (including specially denatured spirits), wines, or beer, withdrawn or shipped for exportation or for use on vessels or aircraft, the exporter or his agent shall immediately notify the director of the port. At the same time, or prior thereto, the exporter or his agent shall file with the director two copies of the application, claim, or notice, TTB Form 5100.11, 5110.30, 1582-A (5120.24), 1582-B (5130.6), or 1689 (5130.12), as the case may be, covering the shipment: *Provided,* That where the shipment is for direct exportation, such forms shall be filed at least six hours prior to lading.
(46 Stat. 690, as amended, 72 Stat. 1334, 1335, 1336, 1362, 1380; [19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309), [26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5055](https://www.govinfo.gov/link/uscode/26/5055), [5062](https://www.govinfo.gov/link/uscode/26/5062), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### Editorial Note:
For Federal Register citations affecting [§ 28.261](/current/title-27/section-28.261), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
#### § 28.262 Delay in lading at port.
If, on arrival of a shipment withdrawn for export without payment of tax or free of tax, the exporting vessel is not prepared to receive the shipment, the district director of customs may permit such shipment to remain in possession of a carrier for a period not exceeding 30 days. Storage elsewhere for a like cause, and not exceeding the same period, may be approved by the district director of customs. In the event of further delay, the facts shall be reported to the appropriate TTB officer, who shall issue appropriate instructions concerning the disposition of the shipment.
(72 Stat. 1334, 1362, 1380; [26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960, as amended by T.D. 7006, [34 FR 2251](https://www.federalregister.gov/citation/34-FR-2251), Feb. 15, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975 and amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
#### § 28.263 \[Reserved]
#### § 28.264 Lading for exportation.
On receipt of the notification required in [§ 28.261](/current/title-27/section-28.261), the district director of customs shall deliver both copies of the application, claim, or notice, TTB Form 5100.11, 5110.30, 1582-A (5120.24), 1582-B (5130.6), or 1689 (5130.12), as the case may be, covering the shipment, together with any forms which may be attached thereto, to a customs officer for inspection and supervision of lading. Such shipment shall be subject to the same requirements for inspection and supervision of lading at the port of exportation as may be required by Customs Regulations ([19 CFR chapter I](/current/title-19/chapter-I)) in the case of similar shipments of imported merchandise to be exported in customs bond. When an inspection of the shipment is made before it is laden on board the exporting carrier and such inspection discloses any discrepancy, the customs officer shall make note of the nature and extent of the discrepancy on each copy of the application, claim, or notice, TTB Form 5110.11, 5110.30, 1582-A (5120.24), 1582-B (5130.6), or 1689 (5130.12), as the case may be, and where the discrepancy involves one or more packages of distilled spirits or wine, he shall prepare customs Form 6001 in accordance with the instructions in [§ 28.291](/current/title-27/section-28.291), and attach the original and copy of customs Form 6001 to the original and copy of the appropriate transaction form. The forms shall be disposed of according to the instructions thereon.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1334, as amended, 1335, as amended, 1336, as amended, 1362, as amended, 1380, as amended ([26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5055](https://www.govinfo.gov/link/uscode/26/5055), [5062](https://www.govinfo.gov/link/uscode/26/5062), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362)))
\[T.D. ATF-198, [50 FR 8562](https://www.federalregister.gov/citation/50-FR-8562), Mar. 1, 1985]
#### Editorial Note:
For Federal Register citations affecting [§ 28.264](/current/title-27/section-28.264), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
#### § 28.265 Evidence of fraud.
If the customs inspection discloses evidence of fraud, the customs officer shall detain the merchandise and notify the district director of customs who shall report the facts forthwith to the appropriate TTB officer. The appropriate TTB officer shall make investigation and take such action as the facts may warrant. Where the detained merchandise has been withdrawn for transfer and deposit in a manufacturing bonded warehouse, the merchandise shall be deemed not to have been deposited in said warehouse, and the designated officer shall hold in abeyance the processing of TTB Form 5100.11 until advised by the district director of customs that the detained merchandise may be entered for deposit. Where the detained merchandise has been withdrawn or entered for deposit in a foreign-trade zone or a customs bonded warehouse, it shall be deemed to not have been deposited in the zone or the warehouse and the customs officer shall hold in abeyance the processing of the application, notice, or claim, TTB Form 5100.11, 5110.30, 1582-A (5120.24), 1582-B (5130.6), or 1689 (5130.12), as the case may be, and Zone Form D, until advised by the district director of customs that the detained merchandise may be entered for deposit.
(48 Stat. 999, as amended, 72 Stat. 1334, 1335, 1336, 1362, 1380, 84 Stat. 1965; [19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c), [26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5055](https://www.govinfo.gov/link/uscode/26/5055), [5062](https://www.govinfo.gov/link/uscode/26/5062), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362), [5066](https://www.govinfo.gov/link/uscode/26/5066))
\[T.D. 7112, [36 FR 8583](https://www.federalregister.gov/citation/36-FR-8583), May 8, 1971. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71725](https://www.federalregister.gov/citation/44-FR-71725), Dec. 11, 1979; T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
#### § 28.266 Release of detained merchandise.
When any merchandise has been detained under the provisions of [§ 28.265](/current/title-27/section-28.265), the district director of customs shall not release such merchandise until he is advised so to do by the appropriate TTB officer.
(72 Stat. 1334, 1335, 1336, 1362, 1380; [26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5055](https://www.govinfo.gov/link/uscode/26/5055), [5062](https://www.govinfo.gov/link/uscode/26/5062), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960, as amended by T.D. 7006, [34 FR 2251](https://www.federalregister.gov/citation/34-FR-2251), Feb. 15, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975 and amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
#### § 28.267 Exportation from interior port.
Where a shipment made under this part is to be exported to a contiguous foreign country through a frontier port, and it is desired to avoid the delay of customs inspection at such port, the shipment may, subject to approval of the district director of customs, be entered for exportation at an interior customs port. Subject to such approval, the inspection and supervision of lading, and the affixing of customs seals, shall be done by a customs officer in accordance with the provisions of the customs regulations regulations ([19 CFR chapter I](/current/title-19/chapter-I)). On completion of the lading, the seals shall be affixed and the customs officer shall execute the certificate of lading on both copies of the application, notice, or claim, TTB Form 5100.11, 5110.30, 1582-A (5120.24), 1582-B (5130.6) or 1689 (5130.12), as the case may be, and forward them, with attachments (if any), to the district director of customs at the interior port of entry. The district director of customs shall forward both copies of the form, with attachments (if any), to the customs officer at the frontier port. When the customs officer at the frontier port is satisfied that the shipment as described on the appropriate form has been exported, he shall execute his certificate on both copies of the form and return them with attachments (if any), to the district director of customs at the interior port of entry.
\[T.D. ATF-198, [50 FR 8563](https://www.federalregister.gov/citation/50-FR-8563), Mar. 1, 1985, as amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004. T.D. TTB-196, [89 FR 87945](https://www.federalregister.gov/citation/89-FR-87945), Nov. 6, 2024]
#### § 28.268 Receipt for liquors for use on vessels or aircraft.
Where liquors are withdrawn or removed for use on vessels or aircraft, the exporter shall procure and forward to the appropriate TTB officer, a receipt executed under the penalties of perjury by the master or other authorized officer of the vessel, steamship company, or airline, as the case may be. The receipt shall give the number of containers, the serial numbers of the containers (if any), and the quantity received, and shall show that the liquors are in customs custody and have been or will be laden on board the vessel or aircraft, that they will be lawfully used on board the vessel or aircraft, and that no portion of the shipment has been or will be unladen in the United States or any of its territories or possessions. A receipt is not required, in the case of any shipment for use on vessels, when the liquors are laden on vessels of war, or, in cases other than supplies for vessels employed in the fisheries, where the amount of the tax on the liquors does not exceed \$200. In the case of supplies for vessels employed in the fisheries, compliance with the provisions of [§ 28.22](/current/title-27/section-28.22) is also required.
(46 Stat. 690, as amended, 72 Stat. 1334, 1335, 1336, as amended, 1362, 1380; [19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309), [26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5055](https://www.govinfo.gov/link/uscode/26/5055), [5062](https://www.govinfo.gov/link/uscode/26/5062), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362))
\[T.D. 7002, [34 FR 1600](https://www.federalregister.gov/citation/34-FR-1600), Feb. 1, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
#### § 28.269 Certification by district director of customs.
(a) *Exportation.* When the district director of customs is satisfied that merchandise described on the application, notice, or claim, TTB Form 5100.11, 5110.30, 1582-A (5120.24), 1582-B (5130.6), or 1689 (5130.12), as the case may be, has been laden and cleared for export, he shall execute his certificate of lading and clearance on both copies of the form.
(b) *Distilled spirits and wines as supplies on vessels and aircraft.* When the district director of customs is satisfied that the distilled spirits and wines described on TTB Form 5100.11, 5110.30, or 1582-A (5120.24), as the case may be, have been duly laden for use on vessels and aircraft, and that proper accounting for such spirits or wines has been submitted to him as required by this part, he shall execute his certificate of lading for use on both copies of the form.
(c) *Disposition of forms.* After executing his certificate, the district director of customs shall forward the original of TTB Form 5100.11, 5110.30, 1582-A (5120.24), 1582-B (5130.6), or 1689 (5130.12), as the case may be, with attachments (if any), to the appropriate TTB officer designated on the form, and retain the remaining copy, with any attached forms, for his files.
(46 Stat. 690, as amended, 72 Stat. 1334, 1335, 1336, 1362, 1380; [19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309), [26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5055](https://www.govinfo.gov/link/uscode/26/5055), [5062](https://www.govinfo.gov/link/uscode/26/5062), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960, as amended by T.D. 7006, [34 FR 2251](https://www.federalregister.gov/citation/34-FR-2251), Feb. 15, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### Editorial Note:
For Federal Register citations affecting [§ 28.269](/current/title-27/section-28.269), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
### Receipt by Armed Services
#### § 28.275 Receipt by armed services.
When liquors which have been withdrawn or removed for export to the armed services of the United States are received at the supply base or other designated place of delivery, the officer to whom consigned, or other authorized supply officer, at the supply base or other place of delivery shall enter the quantity of liquors received on both copies of the application, notice, or claim, TTB Form 5100.11, 5110.30, 1582-A (5120.24), 1582-B (5130.6), or 1689 (5130.12), as the case may be. After signing the form, he shall forward the original with attachments, if any, to the appropriate TTB officer designated on the form, and retain the other copy for his records.
(72 Stat. 1334, 1335, 1336, 1362, 1380; [26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5055](https://www.govinfo.gov/link/uscode/26/5055), [5062](https://www.govinfo.gov/link/uscode/26/5062), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71726](https://www.federalregister.gov/citation/44-FR-71726), Dec. 11, 1979; T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
### Lading for Use on Aircraft
#### § 28.280 Distilled spirits and wines.
When an airline desires to withdraw distilled spirits or wines from its stock being held at the airport under customs custody, for use on a particular aircraft, a requisition in triplicate shall be prepared for presentation to the customs officer. The requisition shall show the flight number, the registry number of the aircraft on which the distilled spirits or wines are to be laden, the country for which the aircraft is to be cleared, the date of departure of the aircraft, and the brand, kind, and quantity of distilled spirits or wines. Where the distilled spirits or wines are contained in kits which have been previously prepared while under customs custody, the kit number shall also be shown on the requisition. Where the kits are not prepared and the distilled spirits or wines are withdrawn for direct lading on aircraft, the requisition shall be serially numbered in lieu of the insertion of the kit number. When the distilled spirits or wines are withdrawn and laden aboard the aircraft, the lading shall be verified by the customs officer by an appropriate stamp or notation on the requisition. One copy of the requisition shall be retained by the customs officer who certifies to the lading for attachment to the outgoing manifest. The other two copies shall be delivered to the airline which shall retain both copies until the return of the flight. In case any of the distilled spirits or wines are removed from the aircraft on its return, they shall be returned to customs custody, appropriate notation made on both copies of the requisition retained by the airline and one copy shall be delivered to the customs officer for attachment to the incoming manifest. The remaining copy shall be retained by the airline.
(Approved by the Office of Management and Budget under control number 1512-0384)
(46 Stat. 690, as amended, 72 Stat. 1336, 1362, 1380; [19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309), [26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-172, [49 FR 14943](https://www.federalregister.gov/citation/49-FR-14943), Apr. 16, 1984]
#### § 28.281 Certificate of use for distilled spirits and wines.
When all of the distilled spirits or wines represented by a single application, notice, or claim, TTB Form 5100.11, 5110.30, or 1582-A (5120.24), as the case may be, have been withdrawn from customs custody and laden and used on aircraft, the airline shall prepare a certificate of use on which are itemized all the requisitions pertaining to such distilled spirits or wines. The certificate shall be executed under the penalties of perjury by an officer of the airline and shall show the name of the exporter, the entry number, the brand and kind of distilled spirits or wines, and the number of bottles to be accounted for; and, as to each requisition, the requisition (or kit) number, the date laden, the registry number of the aircraft, the country for which the aircraft was cleared, and the number of bottles used. When completed, the certificate shall be presented to the customs officer at the airport who shall then execute his certificate on both copies of the appropriate application, notice, or claim, TTB Form 5100.11, 5110.30, or 1582-A (5120.24), as the case may be, noting thereon any exception, such as shortages or breakage. The customs officer shall then attach the certificate of use to the copy of the appropriate form and forward both copies of the form to the district director of customs.
(46 Stat. 690, as amended, 72 Stat. 1336, 1362, 1380; [19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309), [26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### Editorial Note:
For Federal Register citations affecting [§ 28.281](/current/title-27/section-28.281), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
#### § 28.282 Beer.
When beer has been laden on board the aircraft for use as supplies, the customs officer shall execute his certificate on both copies of the Form 1582-B (5130.6) or Form 1689 (5130.12), as the case may be, forward the original to the appropriate TTB officer designated on the form, and retain the copy for his files.
(46 Stat. 690, as amended, 72 Stat. 1334, 1335; [19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309), [26 U.S.C. 5053](https://www.govinfo.gov/link/uscode/26/5053), [5055](https://www.govinfo.gov/link/uscode/26/5055))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960, as amended by T.D. 7006, [34 FR 2251](https://www.federalregister.gov/citation/34-FR-2251), Feb. 15, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
### Receipt in Manufacturing Bonded Warehouse
#### § 28.285 Receipt in manufacturing bonded warehouse.
On receipt of the distilled spirits or wines, the related TTB Form 5100.11 (with any attachments), such inspection as is necessary will be made to establish that the shipment corresponds with its description on TTB Form 5100.11 (and any attachments) and customs Form 6001 will be prepared according to [§ 28.291](/current/title-27/section-28.291). Any discrepancy disclosed by the inspection and gauge will be noted on each copy of TTB Form 5100.11. When the shipment corresponds with the description of TTB Form 5100.11 (and any attachments), the certificate of deposit will be executed on both copies of TTB Form 5100.11 and the original of TTB Form 5100.11 (and any attachments) and the original of his customs Form 6001 will be forwarded to the appropriate TTB officer. The remaining copies shall be kept on file.
(Sec. 201. Pub. L. 85-859, 72 Stat. 1362, as amended, 1380, as amended ([26 U.S.C. 5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362)))
\[T.D. ATF-198, [50 FR 8563](https://www.federalregister.gov/citation/50-FR-8563), Mar. 1, 1985, as amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
### Receipt in Customs Bonded Warehouse
#### § 28.286 Receipt in customs bonded warehouse.
On receipt of the distilled spirits or wine and the related TTB Form 5100.11 or 5110.30 as the case may be, the customs officer in charge of the customs bonded warehouse shall make such inspection as is necessary to establish to his satisfaction that the shipment corresponds with the description thereof on the appropriate form. The customs officer shall note on each copy of the Form 5100.11 or 5110.30, as the case may be, any deficiency in quantity or discrepancy between the merchandise inspected and that described on the form. Where the inspection discloses no loss, or where a loss is disclosed and there is no evidence to indicate fraud, the officer shall execute his certificate of deposit on both copies of the form, forward the original as required by the instructions on the form, and retain the remaining copy for his files.
(Sec. 3(a), Pub. L. 91-659, 84 Stat. 1965 ([26 U.S.C. 5066](https://www.govinfo.gov/link/uscode/26/5066)); sec. 2, Pub. L. 96-601, 94 Stat. 3495 ([26 U.S.C. 5362](https://www.govinfo.gov/link/uscode/26/5362)))
\[T.D. ATF-88, [46 FR 39816](https://www.federalregister.gov/citation/46-FR-39816), Aug. 5, 1981, as amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
### Receipt in Foreign-Trade Zone
#### § 28.290 Receipt in foreign trade zone.
On receipt at the zone, the shipment shall be inspected by the customs officer in charge of the zone who shall determine if the shipment agrees with the description thereof on the application, notice, or claim, TTB Form 5100.11, 5110.30, 1582-A (5120.24), 1582-B (5130.6), or 1689 (5130.12), as the case may be. If the customs officer regauges spirits or wine in the course of his inspection, he shall prepare customs Form 6001 according to [§ 28.291](/current/title-27/section-28.291). The customs officer shall note on both copies of the TTB Form 5100.11, 5110.30, 1582-A (5120.24), 1582-B (5130.6), or 1689 (5130.12), as the case may be any deficiency in quantity or discrepancy between the merchandise inspected or gauged and that described in the form. Where the inspection or gauge discloses no loss, or where a loss is disclosed by such inspection or gauge and there is no evidence to indicate fraud, the officer shall execute his certificate on both copies of the form covering the deposit, and forward to the appropriate TTB officer:
(a) Original of the deposit from (with any attachments); and
(b) Original of the officer's customs Form 6001, if any. The remaining copy of the deposit form (with any attachments), and the copy of any customs Form 6001, shall be retained by the customs officer for his files.
(48 Stat. 999, as amended ([19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c)); Sec. 201, Pub. L. 85-859, 72 Stat. 1336, as amended, 1362, as amended, 1380, as amended ([26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062), [5214](https://www.govinfo.gov/link/uscode/26/5214), [5362](https://www.govinfo.gov/link/uscode/26/5362)))
\[T.D. ATF-198, [50 FR 8563](https://www.federalregister.gov/citation/50-FR-8563), Mar. 1, 1985, as amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
### Customs Gauge
#### § 28.291 Customs Form 6001.
When spirits or wines are gauged as required in [§ 28.264](/current/title-27/section-28.264), [§ 28.285](/current/title-27/section-28.285), or [§ 28.290](/current/title-27/section-28.290), the customs officer shall prepare in duplicate customs Form 6001 to show:
(a) Date;
(b) Name of exporter;
(c) Serial number and designation of the related transaction form;
(d) Kind of liquor (show whether alcohol, whiskey, brandy, rum, gin, vodka, wine, etc.);
(e) Name and registry number of producer;
(f) If gauged under [§ 28.264](/current/title-27/section-28.264), the location of the port;
(g) If gauged under [§ 28.285](/current/title-27/section-28.285), the location and number of the manufacturing bonded warehouse;
(h) If gauged under 28.290, the location and number of the foreign-trade zone;
(i) Kind and serial numbers or lot identification numbers of containers; and
(j) For each container:
(1) Proof of spirits, or percent of alcohol by volume in wine;
(2) Proof gallons, if spirits;
(3) Wine gallons, if wine; and
(4) Variation from the last gauge (proof, percent of alcohol by volume or wine gallons).
\[T.D. ATF-198, [50 FR 8563](https://www.federalregister.gov/citation/50-FR-8563), Mar. 1, 1985, as amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
### Alternate Procedures
#### § 28.295 Exception for export of beer.
The provisions of this subpart do not apply in the case of beer when the exporter or claimant obtains proof of exportation other than certification by the military or customs certification of lading and use under [§ 28.43](/current/title-27/section-28.43). Brewers and exporters shall prepare Forms 1582-B (5130.6) or 1689 (5130.12), as applicable, to cover exportation of beer, but customs or military certification on them is not required when other proof of exportation is used.
\[T.D.ATF-224, [51 FR 7700](https://www.federalregister.gov/citation/51-FR-7700), Mar. 5, 1986, as amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
## Subpart O—Losses
### Distilled Spirits
#### § 28.301 Loss of distilled spirits in transit.
The tax on distilled spirits withdrawn without payment of tax under this part and which are lost during transportation from the bonded premises of the distilled spirits plant from which withdrawn to (a) the port of export, (b) the manufacturing bonded warehouse, (c) the vessel or aircraft, (d) the foreign-trade zone, or (e) the customs bonded warehouse, as the case may be, may be remitted if evidence satisfactory to the appropriate TTB officer establishes that such distilled spirits have not been unlawfully diverted, or lost by theft with connivance, collusion, fraud, or negligence on the part of the exporter, owner, consignor, consignee, bailee, or carrier or the employees or agents of any of them: *Provided,* That such remission in the case of loss of distilled spirits by theft shall only be allowed to the extent that the claimant is not indemnified against or recompensed in respect of the tax for such loss.
(72 Stat. 1323, as amended, 84 Stat. 1965; [26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008), [5066](https://www.govinfo.gov/link/uscode/26/5066))
\[T.D. 7112, [36 FR 8583](https://www.federalregister.gov/citation/36-FR-8583), May 8, 1971. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
#### § 28.302 Notice to exporter.
If, on examination of the TTB Form 5100.11 (and attached gauge reports, if any) received from the officer required to certify the same under the provisions of [subpart N of this part](/current/title-27/part-28/subpart-N), the appropriate TTB officer is of the opinion that the distilled spirits reported lost had been unlawfully diverted, or had been lost by theft, he will advise the exporter by letter:
(a) Of the identity of the containers;
(b) Of the amount of the loss;
(c) Of the circumstances indicating diversion or theft;
(d) That allowance of the loss will be subject to filing
(1) proof that such loss is allowable under the provisions of [26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008) (a) and (f), and
(2) claim for remission of the tax on the spirits so lost; and
(e) That action in respect of the loss will be withheld for a period of not more than 30 days to afford an opportunity to file such proof and claim.
In any case in which distilled spirits are lost during transportation, as described in [§ 28.301](/current/title-27/section-28.301), whether by theft or otherwise, the appropriate TTB officer may require the exporter to file a claim for relief in accordance with [§ 28.303](/current/title-27/section-28.303). When circumstances may warrant, extensions of additional time for submission of the proof and claim may be granted by the appropriate TTB officer. Where such proof and claim are not filed within the 30-day period, or such extensions as the appropriate TTB officer may grant, the tax on the distilled spirits diverted or lost will be assessed, or liability asserted against the bond covering the shipment, as the case may be.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1323, as amended ([26 U.S.C. 5008](https://www.govinfo.gov/link/uscode/26/5008)))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55854](https://www.federalregister.gov/citation/44-FR-55854), Sept. 28, 1979; T.D. ATF-62, [44 FR 71726](https://www.federalregister.gov/citation/44-FR-71726), Dec. 11, 1979; T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
#### § 28.303 Filing of claims.
Claims, for remission of tax on the distilled spirits under [§ 28.301](/current/title-27/section-28.301), shall be filed on 5620.8, in duplicate, and shall set forth the following:
(a) Name, address, and capacity of the claimant;
(b) Identification (including serial numbers, if any) and location of the container or containers from which the spirits were lost;
(c) Quantity of spirits lost from each container, and the total quantity of spirits covered by the claim;
(d) Total amount of tax for which the claim is filed;
(e) The date, penal sum, and form number of the bond (as applicable) under which withdrawal and shipment were made;
(f) Name, number, and address of the distilled spirits plant from which withdrawn without payment of tax;
(g) Date of the loss (or, if not known, date of discovery), the cause thereof, and all the facts relative thereto;
(h) Name of the carrier;
(i) If lost by theft, facts establishing that the loss did not occur as the result of any connivance, collusion, fraud, or negligence on the part of the exporter, owner, consignor, consignee, bailee, or carrier, or the employees or agents of any of them;
(j) In the case of a loss by theft, whether the claimant is indemnified or recompensed in respect of the tax on the spirits lost, and, if so, the amount and nature of such indemnity or recompense and the actual value of the spirits, less the tax.
The claim shall be executed by the exporter or his authorized agent under the penalties of perjury, and shall be supported (whenever possible) by affidavits of persons having personal knowledge of the loss. The appropriate TTB officer may require such further evidence as he deems necessary.
(68A Stat. 749, 72 Stat. 1323; [26 U.S.C. 6065](https://www.govinfo.gov/link/uscode/26/6065), [5008](https://www.govinfo.gov/link/uscode/26/5008))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004; T.D. TTB-146, [82 FR 1137](https://www.federalregister.gov/citation/82-FR-1137), Jan. 4, 2017]
#### § 28.304 Action on claim.
The appropriate TTB officer will allow or disallow claims filed under [§ 28.303](/current/title-27/section-28.303) in accordance with existing law and regulations. If the appropriate TTB officer finds that there has been a diversion or theft of the distilled spirits as the result of any connivance, collusion, fraud, or negligence on the part of the exporter, owner, consignor, consignee, bailee, or carrier, or the employees or agents of any of them, the tax on the distilled spirits diverted or lost by theft will be assessed, or liability asserted against the bond covering the shipment, as the case may be.
(68A Stat. 867, 72 Stat. 1323; [26 U.S.C. 7302](https://www.govinfo.gov/link/uscode/26/7302), [5008](https://www.govinfo.gov/link/uscode/26/5008))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
### Specially Denatured Spirits
#### § 28.310 Loss of specially denatured spirits in transit.
Losses of specially denatured spirits withdrawn free of tax under this part during transportation from the bonded premises of the distilled spirits plant from which withdrawn to (a) the port of export, or (b) the foreign-trade zone, as the case may be, may be allowed if evidence satisfactory to the appropriate TTB officer establishes that such specially denatured spirits have not been unlawfully diverted, or lost by theft as the result of any connivance, collusion, fraud, or negligence on the part of the exporter, owner, consignor, consignee, bailee, or carrier, or the employees or agents of any of them. The giving of notice to the exporter, filing claims for allowance of loss, and action on the claims shall be, insofar as applicable, in accordance with the procedure prescribed in [§§ 28.302](/current/title-27/section-28.302) through [28.304](/current/title-27/section-28.304).
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
### Wine
#### § 28.315 Loss of wine in transit.
The tax on wine withdrawn without payment of tax under this part and which is lost during transportation from the bonded wine cellar from which withdrawn to (a) the port of export, (b) the vessel or aircraft, (c) the foreign-trade zone, (d) the manufacturing bonded warehouse, or (e) the customs bonded warehouse, as the case may be, may be remitted if evidence satisfactory to the appropriate TTB officer establishes that such wine has not been unlawfully diverted, or lost by theft with connivance, collusion, fraud, or negligence on the part of the exporter, owner, consignor, consignee, bailee, or carrier or the employees or agents of any of them. However, the remission of tax on wine withdrawn without payment of tax under this part and which is lost while in transit may be allowed only to the extent that the claimant is not indemnified or recompensed for such tax.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, 1382 ([26 U.S.C. 5370](https://www.govinfo.gov/link/uscode/26/5370), [5371](https://www.govinfo.gov/link/uscode/26/5371)))
\[T.D. ATF-88, [46 FR 39816](https://www.federalregister.gov/citation/46-FR-39816), Aug. 5, 1981, as amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
#### § 28.316 Notice to exporter.
If, on examination of the TTB Form 5100.11 received from the officer required to certify the same under the provisions of subpart N, the appropriate TTB officer is of the opinion that wine reported lost had been unlawfully diverted, or had been lost by theft, he will advise the exporter by letter:
(a) Of the identity of the containers;
(b) Of the amount of the loss;
(c) Of the circumstances indicating diversion or theft;
(d) That allowance of the loss will be subject to filing
(1) proof that such loss is allowable under the provisions of [26 U.S.C. 5370](https://www.govinfo.gov/link/uscode/26/5370), and
(2) claim for remission of the tax on the wine so lost; and
(e) That action in respect of the loss will be withheld for a period of not more than 30 days to afford an opportunity to file such proof and claim.
In any case in which wines are lost during transportation, as described in [§ 28.315](/current/title-27/section-28.315), whether by theft or otherwise, the appropriate TTB officer may require the exporter to file a claim for relief in accordance with [§ 28.317](/current/title-27/section-28.317). Where circumstances may warrant, extensions of additional time for submission of the proof and claim may be granted by the appropriate TTB officer. Where such proof and claim are not filed within the 30-day period, or such extensions as the appropriate TTB officer may grant, the tax on the wine diverted or lost will be assessed, or liability asserted against the bond covering the shipment, as the case may be.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1381, as amended ([26 U.S.C. 5370](https://www.govinfo.gov/link/uscode/26/5370)))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55854](https://www.federalregister.gov/citation/44-FR-55854), Sept. 28, 1979; T.D. ATF-62, [44 FR 71726](https://www.federalregister.gov/citation/44-FR-71726), Dec. 11, 1979; T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
#### § 28.317 Filing of claims.
Claims, for remission of tax on the wine under [§ 28.315](/current/title-27/section-28.315), shall be filed on Form 5620.8, in duplicate, and shall set forth the following:
(a) The name, address, and capacity of the claimant;
(b) The name, registry number, and location of the bonded wine cellar from which the wine was withdrawn;
(c) The date, penal sum, and form number of the bond (as applicable) under which withdrawal and shipment was made;
(d) Identification (including serial numbers, if any) and location of the container or containers from which the wine was lost;
(e) The quantity of wine lost from each container, and the total quantity of wine covered by the claim;
(f) The total amount of tax for which the claim is filed;
(g) The date of the loss (or, if not known, date of discovery), the cause thereof, and all the facts relative thereto;
(h) Name of the carrier;
(i) If lost by theft, the facts establishing that the loss did not occur as the result of any connivance, collusion, fraud, or negligence on the part of the exporter, owner, consignor, consignee, bailee, or carrier, or the agents or employees of any of them; and
(j) Whether the claimant is indemnified or recompensed in respect of the tax on the wine lost, and, if so, the amount and nature of such indemnity or recompense and the actual value of the wine, less the tax.
The claim shall be signed by the exporter or his authorized agent under the penalties of perjury, and shall be supported (whenever possible) by affidavits of persons having personal knowledge of the loss. The appropriate TTB officer may require such further evidence as he deems necessary.
(68A Stat. 749, 72 Stat. 1381, 1382; [26 U.S.C. 6065](https://www.govinfo.gov/link/uscode/26/6065), [5370](https://www.govinfo.gov/link/uscode/26/5370), [5371](https://www.govinfo.gov/link/uscode/26/5371))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004; T.D. TTB-146, [82 FR 1137](https://www.federalregister.gov/citation/82-FR-1137), Jan. 4, 2017]
#### § 28.318 Action on claim.
Action on claims filed under [§ 28.317](/current/title-27/section-28.317) shall be, insofar as applicable, in accordance with the procedure prescribed in [§ 28.304](/current/title-27/section-28.304).
(72 Stat. 1381; [26 U.S.C. 5370](https://www.govinfo.gov/link/uscode/26/5370))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. TTB-8, [69 FR 3834](https://www.federalregister.gov/citation/69-FR-3834), Jan. 27, 2004]
### Beer And Beer Concentrate
#### § 28.320 Loss of beer and beer concentrate in transit.
(a) *Losses not requiring inspection.* When, on receipt by the appropriate TTB officer of Form 1689 (5130.12) from the officer required to certify it under the provisions of [subpart N of this part](/current/title-27/part-28/subpart-N), it is disclosed that there has been a loss of beer or beer concentrate after removal from the brewery without payment of tax while in transit to the port of export, the vessel or aircraft, or the foreign-trade zone, and the report of the certifying officer shows that the loss was a normal one caused by casualty, leakage, or spillage, the appropriate TTB officer will allow the loss.
(b) *Losses requiring inspection.* When it is disclosed that the loss of beer or beer concentrate is large or unusual, the appropriate TTB officer will conduct an investigation of the loss. When it is disclosed that the loss in transit has occurred by reason of casualty, leakage or spillage, credit for the loss will be allowed. When the investigation discloses evidence indicating that the loss resulted from theft or from fraud, the appropriate TTB officer will afford the brewer opportunity to submit a written explanation with respect to the causes of the loss before taking further action.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended, 1334, as amended, 1335, as amended ([26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051), [5053](https://www.govinfo.gov/link/uscode/26/5053), [5056](https://www.govinfo.gov/link/uscode/26/5056)))
\[T.D. ATF-224, [51 FR 7700](https://www.federalregister.gov/citation/51-FR-7700), Mar. 5, 1986, as amended by T.D. TTB-8, [69 FR 3835](https://www.federalregister.gov/citation/69-FR-3835), Jan. 27, 2004]
#### § 28.321 Tax assessed on loss not accounted for.
The appropriate TTB officer shall make demand on the brewer for an amount equal to the tax which would be due on removal for consumption or sale, including penalties and interest, on; (a) The quantity of beer not satisfactorily accounted for, or (b) the quantity of beer used to produce the quantity of beer concentrate which is not satisfactorily accounted for.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1333, as amended, 1334, as amended ([26 U.S.C. 5051](https://www.govinfo.gov/link/uscode/26/5051), [5053](https://www.govinfo.gov/link/uscode/26/5053)))
\[T.D. ATF-224, [51 FR 7700](https://www.federalregister.gov/citation/51-FR-7700), Mar. 5, 1986, as amended by T.D. TTB-8, [69 FR 3835](https://www.federalregister.gov/citation/69-FR-3835), Jan. 27, 2004]
## Subpart P—Action on Claims
#### §§ 28.331-28.332 \[Reserved]
#### § 28.333 Claims for drawback.
Where a claim for drawback of tax on distilled spirits or wines on TTB Form 5110.30 or 5120.24 is made, and in all cases where claim for drawback of tax on beer is made on Form 5130.6, the appropriate TTB officer shall, on receipt by him of the original of the claim properly executed by the appropriate customs official or armed services officer, as required by this part, examine the claim to determine that it has been properly completed. He shall then, on receipt of the evidence of exportation required by [§ 28.40](/current/title-27/section-28.40), or of lading for use on vessels or aircraft required by [§ 28.41](/current/title-27/section-28.41), or of deposit in a foreign-trade zone or a customs bonded warehouse as required by [§ 28.42](/current/title-27/section-28.42), as the case may be, and, in the case of claims on Form 5120.24, the certificate of tax determination, Form 2605 (5120.20), allow the claim in the amount of the tax paid on the beer or the tax paid or determined on the distilled spirits or wines on which the claim is based and which were exported, laden as supplies on vessels or aircraft, or deposited in a foreign-trade zone or a customs bonded warehouse, as the case may be.
(46 Stat. 690, 691, as amended, 48 Stat. 999, as amended, 72 Stat. 1335, 1336, 84 Stat. 1965; [19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309), [1311](https://www.govinfo.gov/link/uscode/19/1311), [81c](https://www.govinfo.gov/link/uscode/19/81c), [26 U.S.C. 5055](https://www.govinfo.gov/link/uscode/26/5055), [5062](https://www.govinfo.gov/link/uscode/26/5062), [5066](https://www.govinfo.gov/link/uscode/26/5066))
\[T.D. 7112, [36 FR 8584](https://www.federalregister.gov/citation/36-FR-8584), May 8, 1971. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71726](https://www.federalregister.gov/citation/44-FR-71726), Dec. 11, 1979; T.D. TTB-8, [69 FR 3835](https://www.federalregister.gov/citation/69-FR-3835), Jan. 27, 2004; T.D. TTB-146, [82 FR 1137](https://www.federalregister.gov/citation/82-FR-1137), Jan. 4, 2017]
#### § 28.334 Credit allowance.
Where the credit relates to internal revenue taxes on beer that have been determined but not yet paid by the claimant, the appropriate TTB officer will notify the claimant in writing. Where the credit relates to tax determined distilled spirits, procedure for taking the credit shall be in accordance with the procedures set forth in [part 19 of this chapter](/current/title-27/part-19). Where the credit relates to tax-determined wines, procedure for taking the credit shall be in accordance with the procedures set forth in [part 24 of this chapter](/current/title-27/part-24). No credit may be given for drawback of the tax on beer nor may one class of tax be credited to another.
(72 Stat. 1336; [26 U.S.C. 5062](https://www.govinfo.gov/link/uscode/26/5062))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71726](https://www.federalregister.gov/citation/44-FR-71726), Dec. 11, 1979; T.D. TTB-8, [69 FR 3835](https://www.federalregister.gov/citation/69-FR-3835), Jan. 27, 2004]
#### § 28.335 Disallowance of claim.
If a claim for drawback of tax is not allowed in full, the appropriate TTB officer shall notify the claimant in writing of the reasons for any disallowance.
(46 Stat. 690, as amended, 48 Stat. 999, as amended, 72 Stat. 1335, 1336; [19 U.S.C. 1309](https://www.govinfo.gov/link/uscode/19/1309), [81c](https://www.govinfo.gov/link/uscode/19/81c), [26 U.S.C. 5055](https://www.govinfo.gov/link/uscode/26/5055), [5062](https://www.govinfo.gov/link/uscode/26/5062))
\[[25 FR 5734](https://www.federalregister.gov/citation/25-FR-5734), June 23, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-62, [44 FR 71726](https://www.federalregister.gov/citation/44-FR-71726), Dec. 11, 1979; T.D. TTB-8, [69 FR 3835](https://www.federalregister.gov/citation/69-FR-3835), Jan. 27, 2004]
# Part 29 — STILLS AND MISCELLANEOUS REGULATIONS
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-29
Full text of 27 CFR Part 29 — STILLS AND MISCELLANEOUS REGULATIONS. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 29—STILLS AND MISCELLANEOUS REGULATIONS
#### Editorial Note:
Nomenclature changes to part 29 appear by T.D. ATF-462, [66 FR 42737](https://www.federalregister.gov/citation/66-FR-42737), Aug. 15, 2001.
## Subparts A-B \[Reserved]
## Subpart C—Stills
#### Authority:
[26 U.S.C. 5002](https://www.govinfo.gov/link/uscode/26/5002), [5101](https://www.govinfo.gov/link/uscode/26/5101), [5102](https://www.govinfo.gov/link/uscode/26/5102), [5179](https://www.govinfo.gov/link/uscode/26/5179), [5291](https://www.govinfo.gov/link/uscode/26/5291), [5601](https://www.govinfo.gov/link/uscode/26/5601), [5615](https://www.govinfo.gov/link/uscode/26/5615), [5687](https://www.govinfo.gov/link/uscode/26/5687), [6109](https://www.govinfo.gov/link/uscode/26/6109), [7805](https://www.govinfo.gov/link/uscode/26/7805).
#### Source:
T.D. ATF-207, [50 FR 23682](https://www.federalregister.gov/citation/50-FR-23682), June 5, 1985, unless otherwise noted. Redesignated by T.D. ATF-462, [66 FR 42737](https://www.federalregister.gov/citation/66-FR-42737), Aug. 15, 2001.
#### § 29.41 Scope of subpart.
The regulations in this subpart relate to the manufacture, removal, and use of stills and condensers, and to the notice, registration, and recordkeeping requirements therefor.
#### § 29.42 Delegations of the Administrator.
The regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.29, Delegation of the Administrator's Authorities in [27 CFR Part 29](/current/title-27/part-29), Stills and Miscellaneous Regulations. You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-44, [71 FR 16947](https://www.federalregister.gov/citation/71-FR-16947), Apr. 4, 2006, as amended by T.D. TTB-196, [89 FR 87946](https://www.federalregister.gov/citation/89-FR-87946), Nov. 6, 2024]
#### § 29.43 Forms prescribed.
(a) The appropriate TTB officer is authorized to prescribe all forms, including all notices and records, required by this subpart. All of the information called for in each form shall be furnished as indicated by the headings on the form and the instructions on or pertaining to the form. In addition, information called for in each form shall be furnished as required by this subpart. The form will be filed in accordance with the instructions for the form.
(b) Forms prescribed by this part are available for printing through the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
(Pub. L. 89-554, 80 Stat. 383, as amended ([5 U.S.C. 552](https://www.govinfo.gov/link/uscode/5/552)))
\[T.D. ATF-207, [50 FR 23682](https://www.federalregister.gov/citation/50-FR-23682), June 5, 1985; [50 FR 28572](https://www.federalregister.gov/citation/50-FR-28572), July 15, 1985; T.D. ATF-439, [66 FR 8769](https://www.federalregister.gov/citation/66-FR-8769), Feb. 2, 2001; T.D. TTB-44, [71 FR 16947](https://www.federalregister.gov/citation/71-FR-16947), Apr. 4, 2006; T.D. TTB-196, [89 FR 87946](https://www.federalregister.gov/citation/89-FR-87946), Nov. 6, 2024]
#### § 29.45 Meaning of terms.
When used in this subpart and in the forms prescribed under this subpart, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof, terms shall have the meaning ascribed in this section. Words in the plural form shall include the singular, and vice versa, and words in the masculine shall include the feminine. The terms “includes” and “including” do not exclude things not enumerated which are in the same general class.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.29, Delegation of the Administrator's Authorities in [27 CFR Part 29](/current/title-27/part-29), Stills and Miscellaneous Regulations.
*Condenser.* Any apparatus capable of being used when connected with a still, for condensing or liquefying alcoholic or spirituous vapors, but shall not include condensers to be used with laboratory stills or stills used for distilling water or other nonalcoholic materials where the cubic distilling capacity is one gallon or less.
*Distilling spirits or spirits.* That substance known as ethyl alcohol, ethanol, or spirits of wine in any form (including all dilutions and mixtures thereof, from whatever source or by whatever process produced).
*Distilling.* The conduct by any person of operations that constitute, as defined by [26 U.S.C. 5002](https://www.govinfo.gov/link/uscode/26/5002), operations as a distiller. Such operations include:
(a) The original manufacture of distilled spirits from mash, wort, or wash, or any materials suitable for the production of spirits;
(b) the redistillation of spirits in the course of original manufacture;
(c) the redistillation of spirits, or products containing spirits;
(d) the distillation, redistillation, or recovery of spirits, denatured spirits, or articles containing spirits or denatured spirits; and
(e) the redistillation or recovery of tax-free spirits.
*Distilling apparatus.* A still or condenser, as defined in this section, and any other apparatus to be used for the purpose of distilling.
*Executed under the penalties of perjury.* Signed with the prescribed declaration under the penalties of perjury as provided on or with respect to any document prescribed under this subpart or, where no form of declaration is prescribed, with the declaration: “I declare under the penalties of perjury that this \_\_\_\_\_\_\_\_\_\_\_\_ (insert type of document), including the documents submitted in support thereof, has been examined by me and, to best of my knowledge and belief, is true, correct and complete.”
*Manufacturer of stills.* Any person who manufactures any still or condenser, as defined in this section, or any other apparatus to be used for the purpose of distilling. The term includes a person furnishing separate parts of a complete still or condenser, of any kind, to a person who assembles same into a still or condenser for distilling and a person who procures materials or apparatus and converts same into a still or condenser for distilling.
*Person.* An individual, a trust, estate, partnership, association, company, or corporation.
*Still.* Any apparatus capable of being used for separating alcoholic or spirituous vapors, or spiritous solutions, or spirits, from spirituous solutions or mixtures, but shall not include stills used for laboratory purposes or stills used for distilling water or other nonalcoholic materials where the cubic distilling capacity is one gallon or less.
*This chapter.* [Title 27, Code of Federal Regulations](/current/title-27), Chapter I ([27 CFR Chapter I](/current/title-27/chapter-I)).
*United States.* The several states and the District of Columbia.
*U.S.C.* The United States Code.
\[T.D. ATF-207, [50 FR 23682](https://www.federalregister.gov/citation/50-FR-23682), June 5, 1985; [50 FR 28572](https://www.federalregister.gov/citation/50-FR-28572), July 15, 1985, as amended by T.D. ATF-439, [66 FR 8770](https://www.federalregister.gov/citation/66-FR-8770), Feb. 2, 2001; T.D. TTB-44, [71 FR 16947](https://www.federalregister.gov/citation/71-FR-16947), Apr. 4, 2006;T.D. TTB-196, [89 FR 87946](https://www.federalregister.gov/citation/89-FR-87946), Nov. 6, 2024]
#### § 29.47 Notice requirement; manufacture of stills.
(a) *General.* When required by letter issued by the appropriate TTB officer and until notified to the contrary by the appropriate TTB officer, every person who manufactures any still, boiler (double or pot still), condenser, or other apparatus to be used for the purpose of distilling shall give written notice before the still or distilling apparatus is removed from the place of manufacture.
(b) *Preparation.* The notice will be prepared in letter form, executed under the penalties of perjury, and show the following information:
(1) The name and address of the manufacturer;
(2) The name and complete address of the person by whom the apparatus is to be used, and of any other person for, by, or through whom the apparatus is ordered or disposed of;
(3) The distilling purpose for which the apparatus is to be used (distillation of spirits, redistillation of spirits or recovery of spirits, including denatured spirits and articles containing spirits or denatured spirits);
(4) The manufacturer's serial number of the apparatus;
(5) The type and kind of apparatus;
(6) The distilling capacity of the apparatus; and
(7) The date the apparatus is to be removed from the place of manufacture.
(c) *Filing.* The notice will be filed in accordance with the instructions in the letter of the appropriate TTB officer. A copy of the notice will be retained at the place of manufacture as provided by [§ 29.59](/current/title-27/section-29.59).
(Approved by the Office of Management and Budget under control number 1512-0341)
(Sec. 843, Pub. L. 98-369, 98 Stat. 818 ([26 U.S.C. 5101](https://www.govinfo.gov/link/uscode/26/5101)))
\[T.D. ATF-207, [50 FR 23682](https://www.federalregister.gov/citation/50-FR-23682), June 5, 1985; [50 FR 28572](https://www.federalregister.gov/citation/50-FR-28572), July 15, 1985; T.D. ATF-439, [66 FR 8769](https://www.federalregister.gov/citation/66-FR-8769), Feb. 2, 2001]
#### § 29.49 Notice requirement; setup of still.
(a) *General.* When required by letter issued by the appropriate TTB officer, no still, boiler (double or pot still), condenser, or other distilling apparatus may be set up without the manufacturer of the still or distilling apparatus first giving written notice of that purpose.
(b) *Preparation.* The notice will be prepared by the manufacturer in letter form, executed under the penalties of perjury, and will contain the information specified in the letter of the appropriate TTB officer.
(c) *Filing.* The notice will be filed in accordance with the instructions in the letter of the appropriate TTB officer. A copy of the notice will be retained at the manufacturer's place of business as provided by [§ 29.59](/current/title-27/section-29.59).
(Approved by the Office of Management and Budget under control number 1512-0341)
(Sec. 843, Pub. L. 98-369, 98 Stat. 818 ([26 U.S.C. 5101](https://www.govinfo.gov/link/uscode/26/5101)))
\[T.D. ATF-207, [50 FR 23682](https://www.federalregister.gov/citation/50-FR-23682), June 5, 1985, as amended by T.D. ATF-439, [66 FR 8769](https://www.federalregister.gov/citation/66-FR-8769), Feb. 2, 2001]
#### § 29.51 Failure to give notice; penalty.
Failure to give notice of manufacture of still or notice of setup of still when required to do so is punishable by a fine of not more than \$1,000 or imprisonment for not more than one year, or both, and any still, boiler (double or pot still), condenser, or other distilling apparatus to be used for the purpose of distilling which is removed or set up without the required notice having been given is forfeitable to the Government.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1405, as amended, 1412, as amended ([26 U.S.C. 5615](https://www.govinfo.gov/link/uscode/26/5615), [5687](https://www.govinfo.gov/link/uscode/26/5687)))
#### § 29.53 Identification of distilling apparatus.
(a) *General.* Each still or condenser manufactured will be identified by the manufacturer as follows:
(1) Name of manufacturer.
(2) Address of manufacturer.
(3) Manufacturer's serial number for the apparatus.
(b) *Marking requirements.* The apparatus will be identified in a legible and durable manner. The required identification marks will be placed on the apparatus in a location where they will not be obscured or concealed.
#### § 29.55 Registry of stills and distilling apparatus.
(a) *General.* Every person having possession, custody, or control of any still or distilling apparatus set up shall, immediately on its being set up, register the still or distilling apparatus, except that a still or distilling apparatus not used or intended for use in the distillation, redistillation, or recovery of distilled spirits is not required to be registered. Registration may be accomplished by describing the still or distilling apparatus on the registration or permit application prescribed in this chapter for qualification under [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101) or, if qualification is not required under [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101), on a letter application, and filing the application with the appropriate TTB officer. Approval of the application by the appropriate TTB officer will constitute registration of the still or distilling apparatus.
(b) *When still is set up.* A still will be regarded as set up and subject to registry when it is in position over a furnace, or connected with a boiler so that heat may be applied, irrespective of whether a condenser is in position. This rule is intended merely as an illustration and should not be construed as covering all types of stills or condensers requiring registration.
(c) *Change in location or ownership.* Where any distilling apparatus registered under this section is to be removed to another location, sold or otherwise disposed of, the registrant shall, prior to the removal or disposition, file a letter notice with the appropriate TTB officer. The letter notice will show the intended method of disposition (sale, destruction, or otherwise), the name and complete address of the person to whom disposition will be made, and the purpose for which the apparatus will be used. After removal, sale, or other disposal, the person having possession, custody, or control of any distilling apparatus intended for use in distilling shall immediately register the still or distilling apparatus on its being set up or, if already set up, immediately on obtaining possession, custody, or control. The registrant shall also comply with the procedures prescribed in this chapter for amendment of the registration or permit application.
(Approved by the Office of Management and Budget under control number 1512-0341)
(Sec. 201, Pub. L. 85-859, 72 Stat. 1355, as amended ([26 U.S.C. 5179](https://www.govinfo.gov/link/uscode/26/5179)))
\[T.D. ATF-207, [50 FR 23682](https://www.federalregister.gov/citation/50-FR-23682), June 5, 1985; [50 FR 28572](https://www.federalregister.gov/citation/50-FR-28572), July 15, 1985; [50 FR 30821](https://www.federalregister.gov/citation/50-FR-30821), July 30, 1985, as amended by T.D. ATF-439, [66 FR 8770](https://www.federalregister.gov/citation/66-FR-8770), Feb. 2, 2001; T.D. TTB-196, [89 FR 87946](https://www.federalregister.gov/citation/89-FR-87946), Nov. 6, 2024]
#### § 29.57 Failure to register; penalty.
Any person having possession, custody, or control of any still or distilling apparatus set up who fails to register the still or distilling apparatus is subject to a fine of not more than \$10,000 or imprisonment of not more than 5 years, or both, and the still or distilling apparatus is forfeitable to the Government.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1398, as amended, 1405, as amended ([26 U.S.C. 5601](https://www.govinfo.gov/link/uscode/26/5601), [5615](https://www.govinfo.gov/link/uscode/26/5615)))
#### § 29.59 Records.
A copy of each notice of manufacture, or set up, of still required under the provisions of [§ 29.47](/current/title-27/section-29.47), or [§ 29.49](/current/title-27/section-29.49), shall be maintained, in chronological order, by the manufacturer at the premises where the still or distilling apparatus is manufactured. In addition, each manufacturer or vendor of stills shall maintain at their premises a record showing all stills and distilling apparatus (including those to be used for purposes other than distilling) manufactured, received, removed, or otherwise disposed of. The record will also show the name and address of the purchaser and the purpose for which each apparatus is to be used. Any commercial document on which all the required information has been recorded may be used for the record. The records will be kept available for a period of three years for inspection by appropriate TTB officers.
(Approved by the Office of Management and Budget under control number 1512-0341)
\[T.D. ATF-207, [50 FR 23682](https://www.federalregister.gov/citation/50-FR-23682), June 5, 1985, as amended by T.D. ATF-439, [66 FR 8770](https://www.federalregister.gov/citation/66-FR-8770), Feb. 2, 2001]
## Subparts D-Y \[Reserved]
# Part 30 — GAUGING MANUAL
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-30
Full text of 27 CFR Part 30 — GAUGING MANUAL. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 30—GAUGING MANUAL
#### Authority:
[26 U.S.C. 7805](https://www.govinfo.gov/link/uscode/26/7805).
#### Source:
T.D. ATF-198, [50 FR 8535](https://www.federalregister.gov/citation/50-FR-8535), Mar. 1, 1985, unless otherwise noted.
#### Editorial Note:
Nomenclature changes to part 30 appear by T.D. ATF-438, [66 FR 5481](https://www.federalregister.gov/citation/66-FR-5481), Jan. 19, 2001.
## Subpart A—Scope of Regulations
#### § 30.1 Gauging of distilled spirits.
(a) *General.* This part relates to the gauging of distilled spirits. The term “gauging” means the determination of the proof and the quantity of distilled spirits. The procedures prescribed in or authorized under the provisions of this part, except as may be otherwise authorized in this chapter, shall be followed in making any determination of quantity or proof of distilled spirits required by or under the authority of regulations in this chapter. The tables referred to in [subpart E of this part](/current/title-27/part-30/subpart-E) appear in the “Gauging Manual Embracing Instructions and Tables for Determining Quantity of Distilled Spirits by Proof and Weight” as incorporated by reference in this part (see [paragraph (c)](/current/title-27/section-30.1#p-30.1\(c\)) of this section). These tables, together with their instructions, shall be used, wherever applicable, in making the necessary computations from gauge data.
(b) *Tables referred to in [subpart E of this part](/current/title-27/part-30/subpart-E).* Table 1 provides a method of correcting hydrometer indications at temperatures between 0 and 100 degrees Fahrenheit to true proof. If distilled spirits contain dissolved solids, temperature correction of the hydrometer reading by the use of this table would result in apparent proof rather than true proof. Tables 2 and 3 show the gallonage of spirituous liquor according to weight and proof. Table 4 shows the gallons per pound at each one-tenth proof from 1 to 200 proof. Table 5 shows the weight per wine gallon and proof gallon at each proof. Table 6 shows the volumes of alcohol and water and the specific gravity (air and vacuum) of spirituous liquor at each proof. Table 7 provides a means of ascertaining the volume (at 60 degree Fahrenheit) of spirits at various temperatures ranging from 18 degrees through 100 degrees Fahrenheit.
(c) *Incorporation by reference.* The “Gauging Manual Embracing Instructions and Tables for Determining Quantity of Distilled Spirits by Proof and Weight” (Publication 5110.6; November 1978) is incorporated by reference in this part. This incorporation by reference was approved by the Director of the Federal Register on March 23, 1981. This publication may be inspected at the National Archives and Records Administration (NARA), and is available from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402. For information on the availability of this material at NARA, call 202-741-6030, or go to:*[https://www.archives.gov/federal-register/cfr/ibr-locations.html](https://www.archives.gov/federal-register/cfr/ibr-locations.html)*.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended ([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204)); 80 Stat. 383, as amended ([5 U.S.C. 552(a)](https://www.govinfo.gov/link/uscode/5/552)))
\[T.D. ATF-198, [50 FR 8535](https://www.federalregister.gov/citation/50-FR-8535), Mar. 1, 1985, as amended at [69 FR 18803](https://www.federalregister.gov/citation/69-FR-18803), Apr. 9, 2004; T.D. TTB-196, [89 FR 87946](https://www.federalregister.gov/citation/89-FR-87946), Nov. 6, 2024]
#### § 30.3 Delegations of the Administrator.
The regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.30, Delegation of the Administrator's Authorities in [27 CFR part 30](/current/title-27/part-30), Gauging Manual. You may obtain a copy of this order by accessing the TTB website (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-196, [89 FR 87946](https://www.federalregister.gov/citation/89-FR-87946), Nov. 6, 2024]
## Subpart B—Definitions
#### § 30.11 Meaning of terms.
When used in this part, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof, terms shall have the meanings ascribed in this section. Words in the plural form shall include the singular, and vice versa, and words importing the masculine gender shall include the feminine. The terms “includes” and “including” do not exclude things not enumerated which are in the same general class.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.30, Delegation of the Administrator's Authorities in [27 CFR Part 30](/current/title-27/part-30), Gauging Manual.
*Bonded premises.* The bonded premises of a distilled spirits plant as described in [part 19 of this chapter](/current/title-27/part-19). This term includes premises described in the preceding sentence even if the distilled spirits plant proprietor has not provided a bond for the premises as authorized under the exemption set forth in [§ 19.151(d) of this chapter](/current/title-27/section-19.151#p-19.151\(d\)).
*Bulk conveyance.* Any tank car, tank truck, tank ship, tank barge, or other similar container approved by the appropriate TTB officer, authorized for the conveyance of spirits (including denatured spirits) in bulk.
*CFR.* The Code of Federal Regulations.
*Container.* Any receptacle, vessel, or form of package, bottle, tank, or pipeline used, or capable of use, for holding, storing, transferring or conveying distilled spirits.
*Denatured spirits or denatured alcohol.* Spirits to which denaturants have been added pursuant to formulas prescribed in [27 CFR part 21](/current/title-27/part-21).
*Gallon or wine gallon.* The liquid measure equivalent to the volume of 231 cubic inches.
*I.R.C.* The Internal Revenue Code of 1954, as amended.
*Package.* Any cask, barrel, drum, or similar container approved under the provisions of this chapter.
*Proof.* The ethyl alcohol content of a liquid at 60 degrees Fahrenheit, stated as twice the percent of ethyl alcohol by volume.
*Proof gallon.* A United States gallon of proof spirits, or the alcoholic equivalent thereof.
*Proof spirits.* That liquid which contains one-half its volume of ethyl alcohol of a specific gravity of seven thousand nine hundred and thirty-nine ten-thousandths (0.7939) in vacuum at 60 degrees Fahrenheit referred to water at 60 degrees Fahrenheit as unity.
*Spirits, spirituous liquor, or distilled spirits.* That substance known as ethyl alcohol, ethanol, or spirits of wine in any form, including all dilutions and mixtures thereof, from whatever source or by whatever process produced, but not denatured spirits unless specifically stated. For the sole purpose of gauging wine and alcoholic flavoring materials on the bonded premises of a distilled spirits plant, such alcoholic ingredients shall have the same meaning described herein to spirits, spirituous liquor, or distilled spirits.
*This chapter.* [Title 27, Code of Federal Regulations](/current/title-27), Chapter I ([27 CFR Chapter I](/current/title-27/chapter-I)).
*U.S.C.* The United States Code.
\[T.D. ATF-198, [50 FR 8535](https://www.federalregister.gov/citation/50-FR-8535), Mar. 1, 1985, as amended by T.D. ATF-438, [66 FR 5481](https://www.federalregister.gov/citation/66-FR-5481), Jan. 19, 2001; T.D. TTB-44, [71 FR 16947](https://www.federalregister.gov/citation/71-FR-16947), Apr. 4, 2006; T.D. TTB-146, [82 FR 1137](https://www.federalregister.gov/citation/82-FR-1137), Jan. 4, 2017]
## Subpart C—Gauging Instruments
#### § 30.21 Requirements.
(a) *General.* The proof of distilled spirits shall be determined by the use of gauging instruments as prescribed in this part.
(b) *Proprietors.* Proprietors shall use only accurate hydrometers and thermometers that show subdivisions or graduations of proof and temperature which are at least as delimitated as the instruments described in [§ 30.22](/current/title-27/section-30.22).
(c) *Appropriate TTB officers.* Appropriate TTB officers shall use only hydrometers and thermometers furnished by the Government. However, where this part requires the use of a specific gravity hydrometer, TTB officers shall use precision grade specific gravity hydrometers conforming to the provisions of [§ 30.24](/current/title-27/section-30.24), furnished by the proprietor. However, the appropriate TTB officer may authorize the use of other instruments approved by the appropriate TTB officer as being equally satisfactory for determination of specific gravity and for gauging. From time to time appropriate TTB officers shall verify the accuracy of hydrometers and thermometers used by proprietors.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended ([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204)))
\[T.D. ATF-198, [50 FR 8535](https://www.federalregister.gov/citation/50-FR-8535), Mar. 1, 1985, as amended by T.D. ATF-438, [66 FR 5481](https://www.federalregister.gov/citation/66-FR-5481), Jan. 19, 2001]
#### § 30.22 Hydrometers and thermometers.
The hydrometers used are graduated to read the proof of aqueous alcoholic solutions at 60 degrees Fahrenheit; thus, they read, 0 for water, 100 for proof spirits, and 200 for absolute alcohol. Because of temperature-density relationships and the selection of 60 degrees Fahrenheit for reporting proof, the hydrometer readings will be less than the true percent of proof at temperatures below 60 degrees Fahrenheit and greater than the true percent of proof at temperatures above 60 degrees Fahrenheit. Hence, corrections are necessary for hydrometer readings at temperatures other than 60 degrees Fahrenheit. Precision hydrometers shall be used for gauging spirits. Hydrometers and thermometers shall be used and the true percent of proof shall be determined in accordance with [§ 30.31](/current/title-27/section-30.31). Hydrometers are designated by letter according to range of proof and are provided in ranges and subdivisions of stems as follows:
| Precision | Range | Subdivision |
| --------- | ---------- | ----------- |
| F | 0 to 20 | 0.2° |
| G | 20 to 40 | 0.2° |
| H | 40 to 60 | 0.2° |
| I | 60 to 80 | 0.2° |
| K | 75 to 95 | 0.2° |
| L | 90 to 110 | 0.2° |
| M | 105 to 125 | 0.2° |
| N | 125 to 145 | 0.2° |
| P | 145 to 165 | 0.2° |
| Q | 165 to 185 | 0.2° |
| R | 185 to 206 | 0.2° |
Thermometers are designated by type according to range of degrees Fahrenheit and are provided in ranges and subdivisions of degrees as follows:
| Type | Range | Subdivision |
| --------------------------- | ----------- | ----------- |
| Pencil type | 10° to 100° | 1° |
| V-back | 10° to 100° | 1° |
| Glass shell (earlier model) | 40° to 100° | 1⁄2° |
| Glass shell (later model) | 40° to 100° | 1⁄4° |
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended ([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204)))
\[T.D. ATF-198, [50 FR 8535](https://www.federalregister.gov/citation/50-FR-8535), Mar. 1, 1985, as amended by T.D. ATF-381, [61 FR 37003](https://www.federalregister.gov/citation/61-FR-37003), July 16, 1996]
#### § 30.23 Use of precision hydrometers and thermometers.
Care should be exercised to obtain accurate hydrometer and thermometer readings. In order to accomplish this result, the following precautions should be observed. Bulk spirits should be thoroughly agitated so that the test samples will be representative of the entire quantity. The hydrometers should be kept clean and free of any oily substance. Immediately before readings are taken, the glass cylinder containing the thermometer should be rinsed several times with the spirits which are to be gauged so as to bring both the cylinder and the thermometer to the temperature of the spirits (if time permits, it is desirable to bring both the spirits and the instruments to room temperature). If the outer surface of the cylinder becomes wet, it should be wiped dry to avoid the cooling effect of rapid evaporation. During the readings the cylinder should be protected from drafts or other conditions which might affect its temperature or that of the spirits which it contains. The hands should not be placed on the cylinder in such a manner as to warm the liquid contained therein. The hydrometer should be inserted in the liquid and the hydrometer bulb raised and lowered from top to bottom 5 or 6 times to obtain an even temperature distribution over its surface, and, while the hydrometer bulb remains in the liquid, the stem should be dried and the hydrometer allowed to come to rest without wetting more than a few tenths degrees of the exposed stem. Special care should be taken to ascertain the exact point at which the level of the surface liquid intersects the scale of proof in the stem of the hydrometer. The hydrometer and thermometer should be immediately read, as nearly simultaneously as possible. In reading the hydrometer, a sighting should be made slightly below the plane of the surface of the liquid and the line of sight should then be raised slowly, being kept perpendicular to the hydrometer stem, until the appearance of the surface changes from an ellipse to a straight line. The point where this line intersects the hydrometer scale is the correct reading of the hydrometer. When the correct readings of the hydrometer and the thermometer have been determined, the true percent of proof shall be ascertained from Table 1. Another sample of the spirits should then be taken and be tested in the same manner so as to verify the proof originally ascertained. Hydrometer readings should be made to the nearest 0.05 degree and thermometer readings should be made to the nearest 0.1 degree, and instrument correction factors, if any, should be applied. It is necessary to interpolate in Table 1 for fractional hydrometer and thermometer readings.
# Example.
A hydrometer reads 192.85° at 72.10 °F. The correction factors for the hydrometer and the thermometer, respectively are minus0.03° and plus0.05°. The corrected reading, then, is 192.82° at 72.15 °F.
\| From Table 1: | | |
\| 193.0° at 72.0 °F. | = | 190.2° |
\| 192.0° at 72.0 °F. | = | 189.1° |
\| Difference | = | 1.1° |
\| 192.0° at 72.0 °F. | = | 189.1° |
\| 192.0° at 73.0 °F. | = | 188.9° |
\| Difference | = | 0.2° |
The hydrometer difference (1.1°) multiplied by the fractional degree of the hydrometer reading (0.82°) = 0.902.
The temperature difference (0.2°) multiplied by the fractional degree of the temperature reading (0.15°) = 0.03°.
Proof at 60 °F. = 189.1 + 0.902 − 0.03 = 189.972° = 190.0°.
As shown, the final proof is rounded to the nearest tenth of a degree of proof. In such cases, if the hundredths decimal is less than five, it will be dropped; if it is five or over, a unit will be added.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended ([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204)))
\[T.D. ATF-198, [50 FR 8535](https://www.federalregister.gov/citation/50-FR-8535), Mar. 1, 1985, as amended by T.D. ATF-381, [61 FR 37004](https://www.federalregister.gov/citation/61-FR-37004), July 16, 1996]
#### § 30.24 Specific gravity hydrometers.
(a) The specific gravity hydrometers furnished by proprietors to appropriate TTB officers shall conform to the standard specifications of the American Society for Testing and Materials (ASTM) for such instruments. Such specific gravity hydrometers shall be of a precision grade, standardization temperature 60 °/60 °F., and provided in the following ranges and subdivisions:
| Range | Subdivision |
| ---------------- | ----------- |
| 1.0000 to 1.0500 | 0.0005 |
| 1.0500 to 1.1000 | 0.0005 |
| 1.1000 to 1.1500 | 0.0005 |
| 1.1500 to 1.2000 | 0.0005 |
| 1.2000 to 1.2500 | 0.0005 |
No instrument shall be in error by more than 0.0005 specific gravity.
(b) A certificate of accuracy prepared by the instrument manufacturer for the instrument shall be furnished to the appropriate TTB officer.
(c) *Incorporation by reference.* The “Standard Specification for ASTM Hydrometers,” (E 100-72 (1978)), published in the “1980 Annual Book of ASTM Standards” (STP 25 1062 (1980)), is incorporated by reference in this part. This incorporation by reference was approved by the Director of the Federal Register on March 23, 1981. This publication may be inspected at the National Archives and Records Administration (NARA), and is available from the American Society for Testing and Materials, 1916 Race Street, Philadelphia, Pennsylvania 19103. For information on the availability of this material at NARA, call 202-741-6030, or go to: *[https://www.archives.gov/federal-register/cfr/ibr-locations.html](https://www.archives.gov/federal-register/cfr/ibr-locations.html)*.
(Sec. 201. Pub. L. 85-859, 72 Stat. 1358, as amended ([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204)); 80 Stat. 383, as amended ([5 U.S.C. 552(a)](https://www.govinfo.gov/link/uscode/5/552)))
\[T.D. ATF-198, [50 FR 8535](https://www.federalregister.gov/citation/50-FR-8535), Mar. 1, 1985, as amended by T.D. ATF-381, [61 FR 37004](https://www.federalregister.gov/citation/61-FR-37004), July 16, 1996; [69 FR 18803](https://www.federalregister.gov/citation/69-FR-18803), Apr. 9, 2004; T.D. TTB-196, [89 FR 87946](https://www.federalregister.gov/citation/89-FR-87946), Nov. 6, 2024]
#### § 30.25 Use of precision specific gravity hydrometers.
The provisions of [§ 30.23](/current/title-27/section-30.23) respecting the care, handling, and use of precision instruments shall be followed with respect to the care, handling, and use of precision grade specific gravity hydrometers. Specific gravity hydrometers shall be read to the nearest subdivision. Because of temperature density relationships and the selection of the standardization temperature of 60 °/60 °F., the specific gravity readings will be greater at temperatures below 60 degrees Fahrenheit and less at temperatures above 60 degrees Fahrenheit. Hence, correction of the specific gravity readings will be made for temperature other than 60 degrees Fahrenheit. Such correction may be ascertained by dividing the specific gravity hydrometer reading by the applicable correction factor in Table 7.
# Example:
The specific gravity hydrometer reading is 1.1525, the thermometer reading is 68 degrees Fahrenheit, and the true proof of the spirits is 115 degrees. The correct specific gravity reading will be ascertained as follows:
(a) From Table 7, the correction factor for 115° proof at 68 °F. is 0.996.
(b) 1.1525 divided by 0.996 = 1.1571, the corrected specific gravity.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended ([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204)))
\[T.D. ATF-198, [50 FR 8535](https://www.federalregister.gov/citation/50-FR-8535), Mar. 1, 1985, as amended by T.D. TTB-196, [89 FR 87946](https://www.federalregister.gov/citation/89-FR-87946), Nov. 6, 2024
## Subpart D—Gauging Procedures
#### § 30.31 Determination of proof.
(a) *General.* The proof of spirits shall be determined to the nearest tenth degree which shall be the proof used in determining the proof gallons.
(b) *Solids content not more than 600 milligrams.* Except as otherwise authorized by the appropriate TTB officer, the proof of spirits containing not more than 600 milligrams of solids per 100 milliliters of spirits shall be determined by the use of a hydrometer and thermometer in accordance with the provisions of [§ 30.23](/current/title-27/section-30.23) except that if such spirits contain solids in excess of 400 milligrams but not in excess of 600 milligrams per 100 milliliters at gauge proof, there shall be added to the proof so determined the obscuration determined as prescribed in [§ 30.32](/current/title-27/section-30.32).
(c) *Solids content over 600 milligrams.* If such spirits contain solids in excess of 600 milligrams per 100 milliliters at gauge proof, the proof shall be determined on the basis of true proof determined as follows:
(1) By the use of a hydrometer and a thermometer after the spirits have been distilled in a small laboratory still and restored to the original volume and temperature by the addition of pure water to the distillate; or
(2) By a recognized laboratory method which is equal or superior in accuracy to the distillation method.
(d) *Initial proof.* Except when the proof of spirits is used in making the gauge prescribed in [§ 19.353 of this chapter](/current/title-27/section-19.353) or in making a gauge for determination of tax, the initial determination of proof made on the bonded premises of a distilled spirits plant for such spirits may be used whenever a subsequent gauge is required to be made at that same plant provided that no material has been added to change the proof of the spirits.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1362, as amended ([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204), [5211](https://www.govinfo.gov/link/uscode/26/5211)))
\[T.D. ATF-198, [50 FR 8535](https://www.federalregister.gov/citation/50-FR-8535), Mar. 1, 1985, as amended by T.D. TTB-92, [76 FR 9171](https://www.federalregister.gov/citation/76-FR-9171), Feb. 16, 2011; T.D. TTB-92a, [76 FR 19908](https://www.federalregister.gov/citation/76-FR-19908), Apr. 11, 2011; T.D. TTB-196, [89 FR 87946](https://www.federalregister.gov/citation/89-FR-87946), Nov. 6, 2024]
#### § 30.32 Determination of proof obscuration.
(a) *General.* Proof obscuration of spirits containing more than 400 but not more than 600 milligrams of solids per 100 milliliters shall be determined by one of the following methods. The evaporation method may be used only for spirits in the range of 80-100 degrees at gauge proof.
(b) *Evaporation method.* Evaporate the water and alcohol from a carefully measured 25 milliliter sample of spirits, dry the residue at 100 degrees centigrade for 30 minutes and then weigh the residue precisely. Multiply the weight of the residue by 4 to determine the weight of solids in 100 milliliters. The resulting weight per 100 milliliters multiplied by 4 will give the obscuration. Experience has shown that 0.1 gram (100 milligrams) of solids per 100 milliliters of spirits in the range of 80-100 degrees proof will obscure the true proof by 0.4 of one degree of proof. For example, if the weight of solids remaining after evaporation of 25 milliliters 0.125 gram, the amount of solids present in 100 milliliters of the spirits is 0.50 gram (4 times 0.125). The obscuration is 4 times 0.50, which is two degrees of proof. This value added to the temperature corrected hydrometer reading will give the true proof.
(c) *Distillation method.* Determine the apparent proof and temperature of the sample of spirits and then distill a carefully measured sample in a small laboratory still, and collect a quantity of the distillate, 1 or 2 milliliters less than the original sample. The distillate is adjusted to the original temperature and restored to the original volume by addition of distilled water. The proof of the restored distillate is then determined by use of a precision hydrometer and thermometer in accordance with the provisions of [§ 30.23](/current/title-27/section-30.23) to the nearest 0.1 degree of proof. The difference between the proof so determined and the apparent proof of the undistilled sample is the obscuration; or
(d) *Pycnometer method.* Determine the specific gravity of the undistilled sample, distill and restore the samples as provided in [paragraph (c)](/current/title-27/section-30.32#p-30.32\(c\)) of this section and determine the specific gravity of the restored distillate by means of a pycnometer. The specific gravities so obtained will be converted to degrees of proof by interpolation of Table 6 to the nearest 0.1 degree of proof. The difference in proof so obtained is the obscuration.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended ([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204)))
\[T.D. ATF-198, [50 FR 8535](https://www.federalregister.gov/citation/50-FR-8535), Mar. 1, 1985, as amended by T.D. ATF-381, [61 FR 37004](https://www.federalregister.gov/citation/61-FR-37004), July 16, 1996; T.D. TTB-91, [76 FR 5479](https://www.federalregister.gov/citation/76-FR-5479), Feb. 1, 2011]
### Determination of Quantity
#### § 30.36 General requirements.
The quantity determination of distilled spirits that are withdrawn from bonded premises in bulk upon tax determination or payment shall be by weight. The quantity of other distilled spirits or denatured spirits may be determined by weight or by volume. When the quantity of distilled spirits or denatured distilled spirits is determined by volume, such determination may be by meter as provided in [27 CFR part 19](/current/title-27/part-19), or when approved by the appropriate TTB officer, another method or device.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended ([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204)))
\[T.D. ATF-198, [50 FR 8535](https://www.federalregister.gov/citation/50-FR-8535), Mar. 1, 1985, as amended by T.D. TTB-146, [82 FR 1137](https://www.federalregister.gov/citation/82-FR-1137), Jan. 4, 2017]
### Determination of Quantity by Weight
#### § 30.41 Bulk spirits.
When spirits (including denatured spirits) are to be gauged by weight in bulk quantities, the weight shall be determined by means of weighing tanks, mounted on accurate scales. Before each use, the scales shall be balanced at zero load; thereupon the spirits shall be run into the weighing tank and proofed as prescribed in [§ 30.31](/current/title-27/section-30.31). However, if the spirits are to be reduced in proof, the spirits shall be so reduced before final determination of the proof. The scales shall then be brought to a balanced condition and the weight of the spirits determined by reading the beam to the nearest graduation mark. From the weight and the proof thus ascertained, the quantity of the spirits in proof gallons shall be determined by reference to Table 4. However, in the case of spirits which contain solids in excess of 600 milligrams per 100 milliliters, the quantity in proof gallons shall be determined by first ascertaining the wine gallons per pound of the spirits and multiplying the wine gallons per pound by the weight, in pounds, of the spirits being gauged and by the true proof (determined as prescribed in [§ 30.31](/current/title-27/section-30.31)) and dividing the result by 100. The wine gallons per pound of spirits containing solids in excess of 600 milligrams per 100 milliliters shall be ascertained by:
(a) Use of a precision hydrometer and thermometer, in accordance with the provisions of [§ 30.23](/current/title-27/section-30.23), to determine the apparent proof of the spirits (if specific gravity at the temperature of the spirits is not more than 1.0) and reference to Table 4 for the wine gallons per pound, or
(b) Use of a specific gravity hydrometer, in accordance with the provisions of [§ 30.25](/current/title-27/section-30.25), to determine the specific gravity of the spirits (if the specific gravity at the temperature of the spirits is more than 1.0) and dividing that specific gravity (corrected to 60 degrees Fahrenheit) into the factor 0.120074 (the wine gallons per pound for water at 60 degrees Fahrenheit). When withdrawing a portion of the contents of a weighing tank, the difference between the quantity (ascertained by proofing and weighing) in the tank immediately before the removal of the spirits and the quantity (ascertained by proofing and weighing) in the tank immediately after the removal of the spirits shall be the quantity considered to be withdrawn.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended ([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204)))
#### § 30.42 Denatured spirits.
The quantity, in gallons, of any lot or package of specially denatured spirits may be determined by weighing it and then dividing its weight by the weight per gallon of the formula concerned, as given in the appropriate tables in subpart H of [27 CFR part 21](/current/title-27/part-21). In the case of completely denatured spirits, the gallonage of any lot or package may be ascertained by determining its weight and apparent proof (hydrometer indication, corrected to 60 degrees Fahrenheit) and then multiplying the weight of the wine gallons per pound factor shown in Table 4 for the (apparent) proof.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended ([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204)))
#### § 30.43 Packaged spirits.
When the quantity of spirits (including denatured spirits when gauged by weight) in packages, such as barrels, drums, and similar portable containers, is to be determined by gauge of the individual packages, such quantity shall, except as provided in [paragraph (b)](/current/title-27/section-30.43#p-30.43\(b\)) of this section, be determined by weighing each package on an accurate weighing beam or platform scale having a beam or dial showing weight in pounds and half pounds, where packages having a capacity in excess of 10 wine gallons are to be gauged, or in pounds and ounces, or pounds and hundredths of a pound, where packages designed to hold 10 wine gallons or less are to be gauged. In either case the tare must be determined and subtracted from the gross weight to obtain the net weight. From the proof and weight ascertained, the quantity of the spirits in proof gallons shall be determined by reference to Table 2, 3, or 4. However, if the spirits contain solids in excess of 600 milligrams per 100 milliliters, the proof gallons shall be determined as prescribed for such spirits in [§ 30.41](/current/title-27/section-30.41). Notwithstanding the provisions of this section or of [§ 30.44, (a)](/current/title-27/section-30.44#p-30.44\(a\)) gross weights and tares of packages being filled need not be taken in any case where the gauge of the spirits is not derived from such weights under the gauging procedure being utilized, and (b) meters, other devices, or other methods may be used for determining the quantity of spirits in individual packages, when such meter is used as provided in [27 CFR part 19](/current/title-27/part-19), or, when such other device or method has been approved by the appropriate TTB officer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1362, as amended ([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204), [5211](https://www.govinfo.gov/link/uscode/26/5211)))
\[T.D. ATF-198, [50 FR 8535](https://www.federalregister.gov/citation/50-FR-8535), Mar. 1, 1985, as amended by T.D. ATF-381, [61 FR 37004](https://www.federalregister.gov/citation/61-FR-37004), July 16, 1996]
#### § 30.44 Weighing containers.
(a) *Weighing containers of more than 10 wine gallons.* The weight of containers having a capacity in excess of 10 wine gallons shall be determined and recorded in pounds and half pounds.
(b) *Weighing containers of 10 wine gallons or less.* The weight for containers of a capacity of 10 wine gallons or less shall be determined in pounds and ounces, or pounds and hundredths of a pound, and shall be recorded in pounds and hundredths of a pound. The equivalent pounds and hundredths of pounds and the corresponding wine gallons and proof gallons shall be expressed as shown in the following table for the respective weights in pounds and ounces and proofs shown therein or, as applicable, computed in accordance with rules in this section.
Weight of contents
| Size of container, wine gallons | Pounds | Ozs. | Weight in pounds and hundredths of a pound | Contents in wine gallons | Proof gallons |
| ------------------------------- | ------ | ---- | ------------------------------------------ | ------------------------ | ------------- |
| 190 proof spirits: | | | | | |
| 1 | 6 | 13 | 6.81 | 1 | 1.9 |
| 2 | 13 | 10 | 13.63 | 2 | 3.8 |
| 5 | 34 | 00 | 34.00 | 5 | 9.5 |
| 10 | 68 | 00 | 68.00 | 10 | 19.0 |
| 192 proof spirits: | | | | | |
| 1 | 6 | 13 | 6.81 | 1 | 1.9 |
| 2 | 13 | 9 | 13.56 | 2 | 3.8 |
| 5 | 33 | 13 | 33.81 | 5 | 9.6 |
| 10 | 67 | 10 | 67.63 | 10 | 19.2 |
| 200 proof spirits: | | | | | |
| 1 | 6 | 10 | 6.63 | 1 | 2.0 |
| 2 | 13 | 4 | 13.25 | 2 | 4.0 |
| 5 | 33 | 1 | 33.06 | 5 | 10.0 |
| 10 | 66 | 2 | 66.12 | 10 | 20.0 |
(c) *Containers of other proofs or sizes.* Where containers of proofs or sizes not shown above are to be filled, the following rule may be used for ascertaining the weight of the spirits to be placed in the container: Divide the number of gallons representing the quantity of spirits to be placed in the container by the fractional part of a gallon equivalent to 1 pound, to obtain the weight of the spirits in pounds and fractions of a pound to two decimal places. Reduce the decimal fraction of a pound to ounces by multiplying by 16, calling any fraction of an ounce a whole ounce. The pounds and ounces thus obtained will determine the point to which the spirits must be weighed to produce the results desired. If the weight must be marked on the container in pounds and decimal fractions of a pound, it will be necessary to convert the ounces to hundredths of a pound. The fraction of a gallon equivalent to 1 pound at any given proof shall be ascertained by reference to Table 4. However, if the spirits contain solids in excess of 600 milligrams per 100 milliliters, the fraction of a gallon equivalent to 1 pound shall be determined as prescribed for such spirits in [§ 30.41](/current/title-27/section-30.41).
*Example.* It is desired to fill a 1-gallon can with precisely 1 wine gallon of 194 proof spirits: 1.00 divided by 0.14866 = 6.73 pounds. 0.73 multiplied by 16 = 11.68 ounces, rounded to 12 ounces. Weight of spirits—6 pounds, 12 ounces. Weight, if required, to be marked on can-6.75 pounds.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1362, as amended ([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204), [5211](https://www.govinfo.gov/link/uscode/26/5211)))
#### § 30.45 Withdrawal gauge for packages.
When wooden packages are to be individually gauged for withdrawal, actual tare of the packages shall be determined. The actual tare of a package shall be determined by weighing it after its contents (including rinse water, if any) have been temporarily removed to a separate container or vessel. Where the contents of packages have been temporarily removed for determination of tare, the proof, if any rinse water is added to the spirits, shall be determined after a thorough mixing of the rinse water and the spirits and before return of the spirits to the rinsed packages, and the gross weight shall be determined after the spirits and any added rinse water have been returned to the packages. In the case of metal packages the tare established at the time of filling may be used unless it appears to be incorrect. From the proofs and the net weights of the packages, the wine gallons (if desired) and the proof gallons of spirits shall be determined by the use of Table 2. However, if the spirits contain solids in excess of 600 milligrams per 100 milliliters, the wine gallon and proof gallon contents shall be determined as prescribed for such spirits in [§ 30.41](/current/title-27/section-30.41). If either the weight or the proof is beyond the limitations of table 2, either table 3 or table 4 may be used.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended ([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204)))
### Determination of Quantity by Volume
#### § 30.51 Procedures for measurement of bulk spirits.
Where the quantity of spirits (including denatured spirits) in bulk is to be determined by volume as authorized by this chapter, the measurement shall be made in tanks, by meters as provided in [27 CFR part 19](/current/title-27/part-19), or by other devices or methods authorized by the appropriate TTB officer, or as otherwise provided in this chapter, or such measurement may be made in tank cars or tank trucks if calibration charts for such conveyances are provided and such charts have been accurately prepared, and certified as accurate, by engineers or other persons qualified to calibrate such conveyances. Volumetric measurements in tanks shall be made only in accurately calibrated tanks equipped with suitable measuring devices, whereby the actual contents can be correctly ascertained. If the temperature of spirits (including denatured spirits) is other than the standard of 60 degrees Fahrenheit, gallonage determined by volumetric measurements shall be corrected to the standard temperature by means of table 7. In the case of denatured spirits, the temperature-correction factor for the proof of the spirits used in denaturation will give sufficiently accurate results, except that the temperature-correction factor used for specially denatured spirits, Formula No. 18, should be that given in table 7 for 100 proof spirits. When the quantity of spirits, in wine gallons, has been determined by volumetric measurement, the number of proof gallons shall be obtained by multiplying the wine gallons by the proof of the spirits as determined under [§ 30.31](/current/title-27/section-30.31).
*Example.* Gauge glass reading inches—88. Wine gallons per inch—48.96. Temperature °F—72. Proof of spirits—86.8. Temperature correction factor (Table 7)—0.995. 48.96 W\.G. × 88 = 4308.48 wine gallons. 4308.48 W\.G. × 0.995 = 4286.94 wine gallons. 4286.94 W\.G. × 0.868 = 3721.06392 = 3721.1 proof gallons.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended ([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204)))
\[T.D. ATF-198, [50 FR 8535](https://www.federalregister.gov/citation/50-FR-8535), Mar. 1, 1985, as amended by T.D. ATF-381, [61 FR 37004](https://www.federalregister.gov/citation/61-FR-37004), July 16, 1996]
#### § 30.52 Procedure for measurement of cased spirits.
Where the quantity of spirits in a case is to be determined by volume, such determination shall be made by ascertaining the contents of one bottle in the case and multiplying that figure by the number of bottles in the case. For cases containing bottles filled according to the metric system of measure, the quantity determined shall be converted to wine gallons, as provided in [§ 19.582 of this chapter](/current/title-27/section-19.582). The wine gallons of spirits thus determined for one case may then be multiplied by the number of cases containing spirits at the same proof when determining the quantity of spirits for more than one case. The proof gallons of spirits in cases shall be determined by multiplying the wine gallons by the proof (divided by 100).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended ([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204)))
\[T.D. ATF-198, [50 FR 8535](https://www.federalregister.gov/citation/50-FR-8535), Mar. 1, 1985, as amended by T.D. TTB-92, [76 FR 9171](https://www.federalregister.gov/citation/76-FR-9171), Feb. 16, 2011]
## Subpart E—Prescribed Tables
Note.
The tables referred to in this subpart appear in their entirety in the “Gauging Manual Embracing Instructions and Tables for Determining Quantity of Distilled Spirits by Proof and Weight” which is incorporated by reference in this part (see [§ 30.1](/current/title-27/section-30.1)).
#### § 30.61 Table 1, showing the true percent of proof spirit for any indication of the hydrometer at temperatures between zero and 100 degrees Fahrenheit.
This table shows the true percent of proof of distilled spirits for indications of the hydrometer likely to occur in practice at temperatures between zero and 100 degrees Fahrenheit and shall be used in determining the proof of spirits. The left-hand column contains the reading of the hydrometer and on the same horizontal line, in the body of the table, in the “Temperature” column corresponding to the reading of the thermometer is the corrected reading or “true percent of proof.” The table is computed for tenths of a percent.
# Example.
\| Temperature, °F | 75 |
\| Hydrometer reading | 193 |
\| True percent of proof | 189.5 |
Where fractional readings are ascertained, the proper interpolations will be made (see [§ 30.23](/current/title-27/section-30.23)). If the distilled spirits contain dissolved solids, temperature-correction of the hydrometer reading by the use of this table would result in apparent proof rather than true proof.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended ([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204)))
#### § 30.62 Table 2, showing wine gallons and proof gallons by weight.
The wine and proof gallon content by weight and proof of packages of distilled spirits usually found in actual practice will be ascertained from this table. The left-hand column contains the weights. The true percent of proof is shown on the heading of each page in a range from 90 degrees to 200 degrees. Under the true percent of proof and on the same horizontal line with the weight will be found the wine gallons (at 60 degrees Fahrenheit) and the proof gallons respectively. Where either the weight or the proof of a quantity of spirits is beyond the limitations of this table, the number of proof gallons may be ascertained by reference to Table 3. This table may also be used to ascertain the wine gallons (at 60 degrees Fahrenheit) and proof gallons of spirituous liquor containing dissolved solids where the weight, apparent proof (hydrometer indication corrected to 60 degrees Fahrenheit), and obscuration factor have been determined.
*Example.* 334 lbs. of distilled spirits. Apparent proof—96.0°. Obscuration—0.8°. True Proof 96.0° + 0.8° = 96.8°. 334 lbs. at 96.0° apparent proof = 42.8 wine gallons. 42.8 wine gallons × 96.8° = 41.4 proof gallons. In addition this table may be used to obtain the wine gallons, at the prevailing temperature, of most liquids within the range of the table, from the weight of the liquid and the uncorrected reading of the hydrometer stem. An application of this would be in determining the capacity of a package.
*Example.* It is desired to determine, or to check the rated capacity of a package having a net weight of 395 pounds when completely filled with spirits having an uncorrected hydrometer reading of 113.0°. The full capacity of the package, 51.5 wine gallons, would be found by referring to the table at 395 pounds and 113° proof (hydrometer reading).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1362, as amended ([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204), [5211](https://www.govinfo.gov/link/uscode/26/5211)))
#### § 30.63 Table 3, for determining the number of proof gallons from the weight and proof of spirituous liquor.
When the weight or proof of a quantity of distilled spirits is not found in Table 2, the proof gallons may be ascertained from Table 3. The wine gallons (at 60 degrees Fahrenheit) may be ascertained by dividing the proof gallons by the proof.
# Example.
A tank car of spirits of 190 degrees of proof weighed 60,378 pounds net. We find—
| | Proof gallons |
| ---------------------- | ------------- |
| 60,000 pounds equal to | 16,778.4 |
| 300 pounds equal to | 83.9 |
| 70 pounds equal to | 19.6 |
| 8 pounds equal to | 2.2 |
| Total | 16,884.1 |
That is, the total weight of 60,378 pounds of spirits at 190 proof is equal to 16,884.1 proof gallons. The equivalent gallonage for 70 pounds is found from the column 700 pounds by moving the decimal point one place to the left; that for 8 pounds from the column 800 pounds by moving the decimal point two places to the left.
# Example.
A package of spirits at 86 proof weighed 3211⁄2 pounds net. We find—
| | Proof gallons |
| ------------------- | ------------- |
| 300 pounds equal to | 32.7 |
| 20 pounds equal to | 2.2 |
| 1 pound equal to | .1 |
| 1⁄2 pound equal to | .1 |
| Total | 35.1 |
That is, 3211⁄2 pounds of spirits at 86 proof is equal to 35.1 proof gallons. The equivalent gallonage for 20 pounds is found from the column 200 pounds by moving the decimal point one place to the left; that for 1 pound from the column 100 pounds by moving the decimal point two places to the left; that for the
1⁄2 pound from the column 500 pounds by moving the decimal point three places to the left.
Fractional gallons beyond the first decimal ascertained through use of this table will be dropped if less than 0.05 or will be added as 0.1 if 0.05 or more. The wine gallons (at 60 degrees Fahrenheit) may be determined by dividing the proof gallons by the proof. For example: 35.1 divided by 0.86 equals 40.8 wine gallons.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended ([26 U.S.C.5204](https://www.govinfo.gov/link/uscode/26/5204)))
#### § 30.64 Table 4, showing the fractional part of a gallon per pound at each percent and each tenth percent of proof of spirituous liquor.
This table provides a method for use in ascertaining the wine gallon (at 60 degrees Fahrenheit) and/or proof gallon contents of containers of spirits by multiplying the net weight of the spirits by the fractional part of a gallon per pound shown in the table for spirits of the same proof. Fractional gallons beyond the first decimal will be dropped if less than 0.05 or will be added as 0.1 if 0.05 or more.
*Example.* It is desired to ascertain the wine gallons and proof gallons of a tank of 190 proof spirits weighing 81,000 pounds. 81,000 × 0.14718 = 11,921.58 = 11,921.6 wine gallons. 81,000 × 0.27964 = 22,650.84 = 22,650.8 proof gallons.
This table may also be used for ascertaining the quantity of water required to reduce to a given proof. To do this, divide the proof gallons of spirits to be reduced by the fractional part of a proof gallon per pound of spirits at the proof to which the spirits are to be reduced, and subtract from the quotient the net weight of the spirits before reduction. The remainder will be the pounds of water needed to reduce the spirits to the desired proof.
*Example.* It is desired to ascertain the quantity of water needed to reduce 1,000 pounds of 200 proof spirits, 302.58 proof gallons, to 190 proof: 302.58 divided by 0.27964 equals 1,082.03 pounds, weight of spirits after reduction. 1.082.03 minus 1,000 equals 82.03 pounds, weight of water required to reduce to desired proof.
The slight variation between this table and Tables 2, 3, and 5 on some calculations is due to the dropping or adding of fractions beyond the first decimal in those tables. This table may also be used to determine the wine gallons (at 60 degrees Fahrenheit) of distilled spirits containing dissolved solids from the total weight of the liquid and its apparent proof (hydrometer indication, corrected to 60 degrees Fahrenheit). The proof gallons may then be found by multiplying the wine gallons by the true proof.
*Example.* 5,350 pounds of blended whisky containing added solids Temperature °F75.0° Hydrometer reading92.0° Apparent proof85.5° Obscuration0.5° True proof86.0°5,350.0 lbs. × 0.12676 (W\.G. per pound factor for apparent proof of 85.5°) = 678.2 wine gallons 678.2 W\.G. × 0.86 = 583.3 proof gallons
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended 1362, as amended ([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204), [5211](https://www.govinfo.gov/link/uscode/26/5211)))
#### § 30.65 Table 5, showing the weight per wine gallon (at 60 degrees Fahrenheit) and proof gallon at each percent of proof of spirituous liquor.
This table may be used to ascertain the weight of any given number of wine gallons (at 60 degrees Fahrenheit) or proof gallons of spirits by multiplying the pounds per gallon by the given number of gallons of the spirits. The table should be especially useful where it is desired to weigh a precise quantity of spirits.
*Example.* It is desired to ascertain the weight of 100 wine gallons of 190 proof spirits: 6.79434 × 100 equals 679.43 pounds, net weight of 100 wine gallons of 190 proofs spirits.
*Example.* It is desired to ascertain the weight of 100 proof gallons of 190 proof spirits. 3.57597 × 100 equals 357.60 pounds, net weight of 100 proof gallons of 190 proof spirits.
The slight variation between this table and Tables 2 and 3 on some calculations is due to dropping or adding of fractions beyond the first decimal on those tables. This table also shows the weight per wine gallon (at the prevailing temperature) corresponding to each uncorrected reading of a proof hydrometer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended ([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204)))
#### § 30.66 Table 6, showing respective volumes of alcohol and water and the specific gravity in both air and vacuum of spirituous liquor.
This table provides an alternate method for use in ascertaining the quantity of water needed to reduce the strength of distilled spirits by a definite amount. To do this, divide the alcohol in the given strength by the alcohol in the required strength, multiply the quotient by the water in the required strength, and subtract the water in the given strength from the product. The remainder is the number of gallons of water to be added to 100 gallons of spirits of the given strength to produce a spirit of a required strength.
*Example.* It is desired to reduce spirits of 191 proof to 188 proof. We find that 191 proof spirits contains 95.5 parts alcohol and 5.59 parts water, and 188 proof spirits contains 94.0 parts alcohol and 7.36 parts water. 95.5 (the strength of 100 wine gallons of spirits at 191 proof) divided by 94.0 (the strength of 100 wine gallons of spirits at 188 proof) equals 1.01. 7.36 (the water in 188 proof) multiplied by 1.01 equals 7.43. 7.43 less 5.59 (the water in 191 proof spirits) equal 1.84 gallons of water to be added to each 100 wine gallons of 191 proof spirits to be reduced.
This rule is applicable for reducing to any proof; but when it is desired to reduce to 100 proof, it is sufficient to point off two decimals in the given proof, multiply by 53.73, and deduct the water in the given strength. Thus, to reduce 112 proof spirits to 100 proof:
1.12 × 53.73-47.75 equals 12.42 gallons of water to be added to each 100 wine gallons of spirits to be reduced.
This table may also be used to obtain the proof gallonage of spirituous liquor according to weight and percent of proof.
*Example.* It is desired to determine the number of gallons in 400 pounds of spirits of 141 percent of proof. Multiply the weight of one gallon of water in air by the specific gravity in air of the spirits—8.32823 by 0.88862—the product (7.40063) divided into 400 gives 54.049 wine gallons, which rounded to the nearest hundredth is 54.05 and multiplied by 1.41 gives 76.2 proof gallons. In rounding off where the decimal is less than five, it will be dropped; if it is five or over a unit will be added.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended ([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204)))
#### § 30.67 Table 7, for correction of volume of spirituous liquors to 60 degrees Fahrenheit.
This table is prescribed for use in correcting spirits to volume at 60 degrees Fahrenheit. To do this, multiply the wine gallons of spirits which it is desired to correct to volume at 60 degrees Fahrenheit by the factor shown in the table at the percent of proof and temperature of the spirits. The product will be the corrected gallonage at 60 degrees Fahrenheit. This table is also prescribed for use in ascertaining the true capacity of containers where the wine gallon contents at 60 degrees Fahrenheit have been determined by weight in accordance with Tables 2, 3, 4, or 5. This is accomplished by dividing the wine gallons at 60 degrees Fahrenheit by the factor shown in the table at the percent of proof and temperature of the spirits. The quotient will be the true capacity of the container.
*Example.* It is desired to ascertain the volume at 60 degrees Fahrenheit of 1,000 wine gallons of 190 proof spirits at 76 degrees Fahrenheit: 1,000 × 0.991 equals 991 wine gallons, the corrected gallonage at 60 degrees Fahrenheit.
*Example.* It is desired to ascertain the capacity of a container of 190 proof spirits at 76 degrees Fahrenheit, shown by Table 2 to contain 55.1 wine gallons at 60 degrees Fahrenheit: 55.1 divided by 0.991 equals 55.6 wine gallons, the true capacity of the container when filled with spirits of 60 degrees temperature.
It will be noted the table is prepared in multiples of 5 percent of proof and 2 degrees temperature. Where the spirits to be corrected are of an odd temperature, one-half of the difference, if any, between the factors for the next higher and lower temperature, should be added to the factor for the next higher temperature.
*Example.* It is desired to correct spirits of 180 proof at 51 degrees temperature: 1.006 (50°)−1.005 (52°) = 0.001 divided by 2 = 0.0005 0.0005 + 1.005 = 1.0055 correction factor at 51 °F.
*Example.* It is desired to correct spirits of 180 proof at 53 degrees temperature: 1.005 (52°) − 1.003 (54°) = 0.002 divided by 2 = 0.001 0.001 + 1.003 = 1.004 correction factor at 53 °F.
Where the percent of proof is other than a multiple of five, the difference, if any, between the factors for the next higher and lower proofs should be divided by five and multiplied by the degrees of proof beyond the next lower proof, and the fractional product so obtained should be added to the factor for the next lower proof (if the temperature is above 60 degrees Fahrenheit, the fractional product so obtained must be subtracted from the factor for next lower proof), or if it is also necessary to correct the factor because of odd temperature, to the temperature corrected factor for the next lower proof.
*Example.* It is desired to ascertain the correction factor for spirits of 112 proof at 47 degrees temperature: 1.006 (46°) − 1.005 (48°) = 0.001 divided by 2 = 0.0005 0.0005 + 1.005 = 1.0055 corrected factor at 47 °F. 1.007 (115 proof) − 1.006 (110 proof) = 0.001 0.001 divided by 5 = 0.0002 (for each percent of proof) × 2 (for 112 proof) = 0.0001 0.0004 = 1.0055 (corrected factor at 47 °F.) = 1.0059 correction factor to be used for 112 proof at 47 °F
*Example.* It is desired to ascertain the correction factor for spirits of 97 proof at 93 degrees temperature: 0.986 (92°) − 0.985 (94°) = 0.001 divided by 2 = 0.0005 0.0005 + 0.985 = 0.9855 corrected factor at 93 °F. 0.986 (95 proof)−0.985 (100 proof) = 0.001 0.001 divided by 5 = 0.0002 (for each percent of proof) × 2 (for 97 proof) = 0.0004 0.9855 (corrected factor at 93 °F.) = 0.0005 = 0.9851 correction factor to be used for 97 proof at 93 °F.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended ([26 U.S.C. 5204](https://www.govinfo.gov/link/uscode/26/5204)))
## Subpart F—Optional Gauging Procedures
#### § 30.71 Optional method for determination of proof for spirits containing solids of 400 milligrams or less per 100 milliliters.
The proof of spirits shall be determined to the nearest tenth degree which shall be the proof used in determining the proof gallons and all fractional parts thereof to the nearest tenth proof gallon. The proof of spirits containing solids of 400 milligrams or less per 100 milliliters shall be determined by the use of a hydrometer and a thermometer in accordance with the provisions of [§ 30.23](/current/title-27/section-30.23). However, notwithstanding the provisions of [§ 30.31](/current/title-27/section-30.31), the proprietor may, at their option, add to the proof so determined the obscuration determined as prescribed in [§ 30.32](/current/title-27/section-30.32).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1362, as amended ([26 U.S.C. 5211](https://www.govinfo.gov/link/uscode/26/5211)))
\[T.D. ATF-198, [50 FR 8535](https://www.federalregister.gov/citation/50-FR-8535), Mar. 1, 1985, as amended by T.D. TTB-196, [89 FR 87946](https://www.federalregister.gov/citation/89-FR-87946), Nov. 6, 2024]
#### § 30.72 Recording obscuration by proprietors using the optional method for determination of proof.
Any proprietor using the optional method for determination of proof for spirits containing solids of 400 milligrams or less per 100 milligrams as provided in [§ 30.71](/current/title-27/section-30.71) shall record the obscuration so determined on the record of gauge required by [27 CFR part 19](/current/title-27/part-19).
(Sec. 201, Pub. L. 85-859, 72 Stat. 1358, as amended, 1362, as amended ([26 U.S.C. 5211](https://www.govinfo.gov/link/uscode/26/5211)))
# Part 31 — ALCOHOL BEVERAGE DEALERS
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-31
Full text of 27 CFR Part 31 — ALCOHOL BEVERAGE DEALERS. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 31—ALCOHOL BEVERAGE DEALERS
#### Authority:
[26 U.S.C. 5001](https://www.govinfo.gov/link/uscode/26/5001), [5002](https://www.govinfo.gov/link/uscode/26/5002), [5121](https://www.govinfo.gov/link/uscode/26/5121), [5122-5124](https://www.govinfo.gov/link/uscode/26/5122), [5131](https://www.govinfo.gov/link/uscode/26/5131), [5132](https://www.govinfo.gov/link/uscode/26/5132), [5206](https://www.govinfo.gov/link/uscode/26/5206), [5207](https://www.govinfo.gov/link/uscode/26/5207), [5273](https://www.govinfo.gov/link/uscode/26/5273), [5301](https://www.govinfo.gov/link/uscode/26/5301), [5352](https://www.govinfo.gov/link/uscode/26/5352), [5555](https://www.govinfo.gov/link/uscode/26/5555), [5603](https://www.govinfo.gov/link/uscode/26/5603), [5613](https://www.govinfo.gov/link/uscode/26/5613), [5681](https://www.govinfo.gov/link/uscode/26/5681), [5687](https://www.govinfo.gov/link/uscode/26/5687), [6061](https://www.govinfo.gov/link/uscode/26/6061), [6065](https://www.govinfo.gov/link/uscode/26/6065), [6071](https://www.govinfo.gov/link/uscode/26/6071), [6091](https://www.govinfo.gov/link/uscode/26/6091), [6103](https://www.govinfo.gov/link/uscode/26/6103), [6109](https://www.govinfo.gov/link/uscode/26/6109), [6723](https://www.govinfo.gov/link/uscode/26/6723), [6724](https://www.govinfo.gov/link/uscode/26/6724), [7805](https://www.govinfo.gov/link/uscode/26/7805).
#### Source:
T.D. TTB-79, [74 FR 37407](https://www.federalregister.gov/citation/74-FR-37407), July 28, 2009, unless otherwise noted.
#### § 31.0 Scope.
This part contains the requirements relating to the registration of wholesale and retail dealers in liquors and in beer and to the operations of such dealers, including recordkeeping requirements, prescribed under title 26 of the United States Code. This part also contains provisions relating to entry of dealers' premises and inspection of their records by TTB officers.
## Subpart A—General Provisions
#### § 31.1 Definitions.
As used in this part, the following terms shall have the meanings indicated unless either the context in which they are used requires a different meaning, or a different definition is prescribed for a particular subpart, section, or portion of this part:
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.31, Delegation of the Administrator's Authorities in [27 CFR Part 31](/current/title-27/part-31), Alcohol Beverage Dealers.
*Beer.* Beer, ale, porter, stout, and other similar fermented beverages (including sake or similar products) of any name or description containing one-half of 1 percent or more of alcohol by volume, brewed or produced from malt, wholly or in part, or from any substitute therefor.
*Beverage use* or *use for beverage purposes.* Use as an alcohol beverage.
*Bonded wine cellar.* An establishment qualified under this chapter for the production, blending, cellar treatment, storage, bottling, and packaging or repackaging of untaxpaid wine.
*Brewery.* An establishment qualified under this chapter for the production of beer.
*CFR.* The Code of Federal Regulations.
*Dealer.* Any person who sells, or offers for sale, any distilled spirits, wines, or beer.
*Denatured spirits* or *denatured alcohol.* Spirits to which denaturants have been added as prescribed under this chapter.
*Distilled spirits* or *spirits.* That substance known as ethyl alcohol, ethanol, or spirits of wine in any form, including all dilutions and mixtures thereof, from whatever source or by whatever process produced.
*Distilled spirits plant.* An establishment qualified under [part 19 of this chapter](/current/title-27/part-19) for the production, storage, or processing of distilled spirits.
*Gallon* or *wine gallon.* A United States gallon of liquid measure equivalent to the volume of 231 cubic inches.
*Liquor bottle.* A bottle made of glass or earthenware, or of other suitable material approved by the Food and Drug Administration, which has been designed or is intended for use as a container for distilled spirits for sale for beverage purposes and which has been determined by the appropriate TTB officer to adequately protect the revenue.
*Liquors.* Distilled spirits, wines, or beer.
*Liter.* A metric unit of capacity equal to 1,000 cubic centimeters of alcoholic beverage, and equivalent to 33.814 fluid ounces.
*Person.* An individual, trust, estate, partnership, association or other unincorporated organization, fiduciary, company, or corporation, the District of Columbia, or a State or a political subdivision thereof (including a city, county, or other municipality).
*Place* or *place of business.* The entire office, plant, or area of the business in any one location under the same proprietorship; and passageways, streets, highways, rail crossings, waterways, or partitions dividing the premises shall not be deemed a separation for the purposes of this part, if the various divisions are otherwise contiguous.
*Reclaim.* To grind up a liquor bottle or container and use the ground up material to make products other than liquor bottles or containers.
*Recycle.* To grind up a liquor bottle or container and use the ground up material to make new liquor bottles or containers.
*Sale at retail* or *retail sale.* Sale of liquors to a person other than a dealer.
*Sale at wholesale* or *wholesale sale.* Sale of liquors to a dealer.
*This chapter.* [Chapter I of title 27 of the Code of Federal Regulations](/current/title-27/chapter-I).
*U.S.C.* The United States Code.
*Wine.* When used without qualification, the term includes every kind (class and type) of product produced on bonded wine premises from grapes, other fruit (including berries), or other suitable agricultural products and containing not more than 24 percent of alcohol by volume. The term includes all imitation, other than standard, or artificial wine and compounds sold as wine. A wine product containing less than one-half of one percent alcohol by volume is not taxable as wine when removed from the bonded wine premises.
([26 U.S.C. 5002](https://www.govinfo.gov/link/uscode/26/5002), [5041](https://www.govinfo.gov/link/uscode/26/5041), [5052](https://www.govinfo.gov/link/uscode/26/5052), [7805](https://www.govinfo.gov/link/uscode/26/7805))
#### § 31.2 Territorial extent.
The provisions of this part shall be applicable in the several States of the United States and the District of Columbia.
#### § 31.3 Basic permit requirements.
Every person, except an agency of a State or political subdivision thereof, who intends to engage in the business of purchasing distilled spirits, wines, or beer for sale to other dealers for nonindustrial use, or to engage in the business of importing distilled spirits, wines, or beer for nonindustrial use, is required under [part 1 of this chapter](/current/title-27/part-1) to obtain a basic permit authorizing such person to engage in such business.
#### § 31.4 Relation to State and municipal law.
Compliance with the requirements of this part shall not be held to exempt any person from any penalty or punishment provided by the laws of any State for carrying on any trade or business within such State, or in any manner to authorize the commencement or continuance of such trade or business contrary to the laws of such State or in places prohibited by municipal law; nor shall such compliance be held to prohibit any State from placing a duty or tax on the same trade or business, for State or other purposes.
## Subpart B—Administrative Provisions
#### § 31.11 Forms prescribed.
(a) The appropriate TTB officer is authorized to prescribe all forms required by this part. All of the information called for in each form shall be furnished as indicated by the headings on the form and the instructions on or pertaining to the form. In addition, information called for in each form shall be furnished as required by this part.
(b) Forms prescribed by this part are available for printing through the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Suite 8970, Cincinnati, OH 45202.
([5 U.S.C. 552(a)](https://www.govinfo.gov/link/uscode/5/552))
\[T.D. TTB-79, [74 FR 37407](https://www.federalregister.gov/citation/74-FR-37407), July 28, 2009,, as amended by T.D. TTB-196, [89 FR 87946](https://www.federalregister.gov/citation/89-FR-87946), Nov. 6, 2024]
#### § 31.12 Right of entry and examination.
Any appropriate TTB officer may enter during business hours the premises (including places of storage) of any dealer for the purpose of inspecting or examining any records or other documents required to be kept by such dealer under this part and any distilled spirits, wines, or beer kept or stored by such dealer on such premises.
([26 U.S.C. 5123](https://www.govinfo.gov/link/uscode/26/5123))
#### § 31.13 Delegations of the Administrator.
The regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.31, Delegation of the Administrator's Authorities in [27 CFR Part 31](/current/title-27/part-31), Alcohol Beverage Dealers. You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-79, [74 FR 37407](https://www.federalregister.gov/citation/74-FR-37407), July 28, 2009, as amended by T.D. TTB -196, [89 FR 87946](https://www.federalregister.gov/citation/89-FR-87946), Nov. 6, 2024]
#### § 31.14 Penalties.
(a) *Criminal penalties.* Criminal penalties for failure to comply with the requirements of this part are imposed by [26 U.S.C. 5603](https://www.govinfo.gov/link/uscode/26/5603) and [5687](https://www.govinfo.gov/link/uscode/26/5687). A failure to register as required by this part may result in a penalty under [26 U.S.C. 5603(b)](https://www.govinfo.gov/link/uscode/26/5603).
(b) *Administrative penalty.* An administrative penalty for failure to supply the required identifying number (employer identification number) in a dealer's registration is imposed by [26 U.S.C. 6723](https://www.govinfo.gov/link/uscode/26/6723). The penalty is $50 for each such failure, but not more than $100,000 for all such failures during a calendar year. A failure to submit a registration includes a failure to include the identifying number on the registration.
(c) *Reasonable cause.* The administrative penalty described in [paragraph (b)](/current/title-27/section-31.14#p-31.14\(b\)) of this section is not imposed when it is shown that the failure was due to reasonable cause and not due to willful neglect. A dealer who believes that the circumstances that led to the failure were reasonable and who desires to have the penalty waived shall submit a written statement, under the penalty of perjury, affirmatively showing all of the circumstances alleged as reasonable causes for the failure. If the appropriate TTB officer determines that the failure was due to a reasonable cause and not to willful neglect, the penalty will not be assessed. If the dealer exercised ordinary business care and prudence but was nevertheless unable to comply with the requirement, then the failure was due to reasonable cause. Mere ignorance of the law will not be considered a reasonable cause.
([26 U.S.C. 5603](https://www.govinfo.gov/link/uscode/26/5603), [5687](https://www.govinfo.gov/link/uscode/26/5687), [6109](https://www.govinfo.gov/link/uscode/26/6109), [6723](https://www.govinfo.gov/link/uscode/26/6723), [6724](https://www.govinfo.gov/link/uscode/26/6724))
#### § 31.15 Disclosure of information.
Alcohol dealer registration forms are “information returns” as that term is used in [26 U.S.C. 6103](https://www.govinfo.gov/link/uscode/26/6103) and, as such, are not subject to disclosure except as provided in that law.
([26 U.S.C. 6103](https://www.govinfo.gov/link/uscode/26/6103))
## Subpart C—Activities Subject to This Part
#### § 31.21 Basis of regulation.
Persons engaging in or carrying on the business or occupation of selling or offering for sale alcoholic liquors fit for use as a beverage, or any alcoholic liquors sold for use as a beverage, are subject to the provisions of this part. The classes of liquor dealer business and the conditions under which the provisions of this part apply to them are specified in [§§ 31.31](/current/title-27/section-31.31) through [31.34](/current/title-27/section-31.34).
#### § 31.22 Selling or offering for sale.
Whether the activities of any person constitute engaging in the business of selling or offering for sale is to be determined by the facts in each case. Any manner of selling or offering for sale, even though to a restricted class of persons or without a view to profit, is within the scope of this part.
### Dealers Classified
#### § 31.31 Retail dealer in liquors.
(a) *General.* Except as otherwise provided in [paragraph (b)](/current/title-27/section-31.31#p-31.31\(b\)) of this section, every person who sells or offers for sale distilled spirits, wines, or beer to any person other than a dealer is a retail dealer in liquors for purposes of this part. Every retail dealer in liquors must comply with the registration and other requirements of this part, unless the dealer is covered by an applicable exemption under [subpart D of this part](/current/title-27/part-31/subpart-D).
(b) *Persons not deemed to be retail dealers in liquors.* The following persons are not retail dealers in liquors within the meaning of this part:
(1) A retail dealer in beer as described in [§ 31.33(a)](/current/title-27/section-31.33#p-31.33\(a\)),
(2) A limited retail dealer as described in [§ 31.35](/current/title-27/section-31.35), or
(3) A person who sells or offers for sale distilled spirits, wines, or beer only as provided in [§ 31.61](/current/title-27/section-31.61) through [§ 31.64](/current/title-27/section-31.64) or [§ 31.65(a)](/current/title-27/section-31.65#p-31.65\(a\)).
([26 U.S.C. 5122](https://www.govinfo.gov/link/uscode/26/5122))
#### § 31.32 Wholesale dealer in liquors.
(a) *General.* Except as otherwise provided in [paragraph (b)](/current/title-27/section-31.32#p-31.32\(b\)) of this section, every person who sells or offers for sale distilled spirits, wines, or beer to another dealer is a wholesale dealer in liquors for purposes of this part. Every wholesale dealer in liquors must comply with the registration and other requirements of this part, unless the dealer is covered by an applicable exemption under [subpart D of this part](/current/title-27/part-31/subpart-D).
(b) *Persons not deemed to be wholesale dealers in liquors.* The following persons are not wholesale dealers in liquors within the meaning of this part:
(1) A wholesale dealer in beer as described in [§ 31.34(a)](/current/title-27/section-31.34#p-31.34\(a\));
(2) A person who sells or offers for sale distilled spirits, wines, or beer only as provided in [§§ 31.61](/current/title-27/section-31.61) through [31.64](/current/title-27/section-31.64), [§ 31.65(a)](/current/title-27/section-31.65#p-31.65\(a\)), or [§ 31.66](/current/title-27/section-31.66); or
(3) A person returning liquors for credit, refund, or exchange as provided in [§ 31.67](/current/title-27/section-31.67).
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121))
#### § 31.33 Retail dealer in beer.
(a) *General.* Except as otherwise provided in [paragraph (b)](/current/title-27/section-31.33#p-31.33\(b\)) of this section, every person who sells or offers for sale beer, but not distilled spirits or wines, to any person other than a dealer is a retail dealer in beer for purposes of this part. Every retail dealer in beer must comply with the registration and other requirements of this part, unless the dealer is covered by an applicable exemption under [subpart D of this part](/current/title-27/part-31/subpart-D).
(b) *Persons not deemed to be retail dealers in beer.* The following persons are not retail dealers in beer within the meaning of this part:
(1) A limited retail dealer as described in [§ 31.35](/current/title-27/section-31.35), or
(2) A person who does not sell or offer for sale distilled spirits or wines and sells beer or offers beer for sale only as provided in [§ 31.61](/current/title-27/section-31.61) through [§ 31.63](/current/title-27/section-31.63) or [§ 31.65(a)](/current/title-27/section-31.65#p-31.65\(a\)).
([26 U.S.C. 5122](https://www.govinfo.gov/link/uscode/26/5122))
#### § 31.34 Wholesale dealer in beer.
(a) *General.* Except as otherwise provided in [paragraph (b)](/current/title-27/section-31.34#p-31.34\(b\)) of this section, every person who sells or offers for sale beer, but not distilled spirits or wines, to another dealer is a wholesale dealer in beer for purposes of this part. Every wholesale dealer in beer must comply with the registration and other requirements of this part, unless the dealer is covered by an applicable exemption under [subpart D of this part](/current/title-27/part-31/subpart-D).
(b) *Persons not deemed to be wholesale dealers in beer.* The following persons are not wholesale dealers in beer within the meaning of this part:
(1) A person who does not sell or offer for sale distilled spirits or wines and sells beer or offers beer for sale only as provided in [§§ 31.61](/current/title-27/section-31.61) through [31.63](/current/title-27/section-31.63), [§ 31.65(a)](/current/title-27/section-31.65#p-31.65\(a\)), [§ 31.66](/current/title-27/section-31.66), or [§ 31.67](/current/title-27/section-31.67); or
(2) A person returning beer for credit, refund or exchange as provided in [§ 31.56](/current/title-27/section-31.56).
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121))
#### § 31.35 Limited retail dealer; persons eligible.
Any person selling distilled spirits, beer, or wine, or any combination thereof, to members, guests, or patrons of bona fide fairs, reunions, picnics, carnivals, or similar outings, and any fraternal, civic, church, labor, charitable, benevolent, or ex-servicemen's organization selling distilled spirits, beer, or wine, or any combination thereof, on the occasion of any kind of entertainment, dance, picnic, bazaar, or festival held by it, is a “limited retail dealer” if the person or organization is not otherwise engaged in business as a dealer.
([26 U.S.C. 5122](https://www.govinfo.gov/link/uscode/26/5122))
#### § 31.36 Sales of 20 wine gallons (75.7 liters) or more.
Any person who sells or offers for sale distilled spirits, wines, or beer, in quantities of 20 wine gallons (75.7 liters) or more, to the same person at the same time, shall be presumed and held to be a wholesale dealer in liquors or a wholesale dealer in beer, as the case may be, unless the seller shows by satisfactory evidence that the sale, or offer for sale, was made to a person other than a dealer.
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121))
### Certain Organizations, Agencies, and Persons
#### § 31.41 Clubs or similar organizations.
(a) Subject to [paragraph (b)](/current/title-27/section-31.41#p-31.41\(b\)) of this section, a club or similar organization is a dealer for purposes of this part if the club or organization:
(1) Furnishes liquors to members under conditions constituting a sale (including the acceptance of orders therefor, furnishing the liquors ordered and collecting the price thereof); or
(2) Conducts a bar for the sale of liquors on the occasion of an outing, picnic, or other entertainment, unless the club is a “limited retail dealer” described in [§ 31.35](/current/title-27/section-31.35). The registration of the proprietor of the premises where the bar is located will not relieve the club or organization from its own obligation to register; or
(3) Purchases liquors for members without prior agreement concerning payment therefor and such organization subsequently recoups those costs.
(b) Compliance with the registration and other requirements of this part is not required if money is collected in advance from members for the purchase of liquors, or if money is advanced for the purchase of liquors pursuant to an agreement with the members for reimbursement.
([26 U.S.C. 5122](https://www.govinfo.gov/link/uscode/26/5122))
#### § 31.42 Restaurants serving liquors with meals.
Proprietors of restaurants and other persons who serve liquors with meals to paying customers, even if no separate or specific charge for the liquors is made, are dealers subject to the provisions of this part.
([26 U.S.C. 5122](https://www.govinfo.gov/link/uscode/26/5122))
#### § 31.43 States, political subdivisions of States, or the District of Columbia.
A State, a political subdivision of a State, or the District of Columbia, that engages in the business of selling, or offering for sale, distilled spirits, wines, or beer is not exempt from the requirements of this part. However, no such governmental entity shall be required to register more than once as a retail dealer in liquors regardless of the number of locations at which the entity carries on business as a retail dealer in liquors. Any such governmental entity that has properly registered as a wholesale dealer at its principal office, and that has properly registered once as a retail dealer in liquors or beer, is not required to register again at its retail stores by reason of the sale of distilled spirits, wines, or beer at any of those locations to dealers qualified to do business as a dealer within the jurisdiction of that governmental entity.
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121))
#### § 31.44 Sales of denatured spirits or articles.
It is illegal to sell denatured spirits, or any article containing denatured spirits, for beverage purposes. Any person who sells denatured spirits, or any substance or preparation made with or containing denatured spirits, for use, or for sale for use, for beverage purposes, or who sells any such products under circumstances in which it might reasonably appear that it is the intention of the purchaser to procure the same for sale or use for beverage purposes, is subject to the registration and other requirements of this part.
([26 U.S.C. 5273](https://www.govinfo.gov/link/uscode/26/5273))
#### § 31.45 Sales of alcoholic compounds, preparations, or mixtures containing distilled spirits, wines, or beer.
(a) *General.* Compliance with the provisions of this part is required with respect to the sale, or offering for sale, of alcoholic compounds, preparations, or mixtures containing distilled spirits, wines, or beer, unless those compounds, preparations, or mixtures are unfit for use for beverage purposes and are sold solely for use for nonbeverage purposes.
(b) *Products unfit for beverage use.* Products described in [§ 19.5 of this chapter](/current/title-27/section-19.5), for which manufacturers are exempt from qualification requirements, shall be deemed to be unfit for beverage purposes for the purposes of this part.
\[T.D. TTB-79, [74 FR 37407](https://www.federalregister.gov/citation/74-FR-37407), July 28, 2009, as amended by T.D. TTB-92, [76 FR 9172](https://www.federalregister.gov/citation/76-FR-9172), Feb. 16, 2011]
#### § 31.46 Sales by agencies and instrumentalities of the United States.
Unless specifically exempt by statute, any agency or instrumentality of the United States, including post exchanges, ship's stores, ship's service stores, and commissaries, or any canteen, club, mess, or similar organization operated under regulations of any such agency or instrumentality, that sells, or offers for sale, distilled spirits, wines, or beer must comply with the registration and other requirements of this part as a dealer in liquors or a dealer in beer, as the case may be.
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121), [5122](https://www.govinfo.gov/link/uscode/26/5122))
#### § 31.47 Warehouse receipts covering spirits.
The sale of warehouse receipts for distilled spirits is equivalent to the sale of distilled spirits. Accordingly, every person who sells, or offers for sale, warehouse receipts for distilled spirits held or stored in a distilled spirits plant, customs bonded warehouse, or elsewhere, is required to register and keep records as a wholesale dealer in liquors, or as a retail dealer in liquors, as the case may be, at the place where those warehouse receipts are sold, or offered for sale, unless the person is exempt from those requirements under [subpart D of this part](/current/title-27/part-31/subpart-D).
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121), [5122](https://www.govinfo.gov/link/uscode/26/5122))
#### § 31.48 Alcohol beverage producers, processors, and bonded warehousemen.
Brewers and proprietors of distilled spirits plants, bonded wine cellars, bonded wine warehouses, and taxpaid wine bottling houses who make sales, whether of their own alcohol beverage products or of such products produced by others, are not exempt from registration and recordkeeping as dealers under this part. However, the registration and recordkeeping requirements applicable to such persons are prescribed in parts 19 (Distilled Spirits Plants), 24 (Wine), and 25 (Beer) of this chapter.
## Subpart D—Exemptions and Exceptions
### Persons Exempt From Registration and/or Recordkeeping
#### § 31.51 Wholesale dealers making retail sales.
A wholesale dealer in liquors who sells, or offers for sale, distilled spirits, wines, or beer, and a wholesale dealer in beer who sells, or offers for sale, only beer, whether to dealers or to persons other than dealers, at any place where the wholesale dealer in liquors or beer has appropriately registered under this part, is exempt from registration at that place as a retail dealer in liquors or in beer.
#### § 31.52 Wholesale dealers in liquors consummating sales of wines or beer at premises of other dealers.
(a) *Sales of wines.* Any wholesale dealer in liquors (including the proprietor of a bonded wine cellar) who has registered as a wholesale dealer in liquors for the place from which that dealer conducts selling operations may consummate sales of wines to other wholesale or retail dealers in liquors, or to limited retail dealers, at the purchasers' places of business without having to register again as a wholesale dealer on account of those sales.
(b) *Sales of beer.* Any wholesale dealer in liquors who has already registered as such may also consummate sales of beer to wholesale or retail dealers in beer, to wholesale or retail dealers in liquors, or to limited retail dealers, at the purchasers' place of business without having to register again as a wholesale dealer on account of those sales.
#### § 31.53 Wholesale dealers in beer consummating sales at premises of other dealers.
Any dealer who has registered as a wholesale dealer in beer for the place from which that dealer conducts selling operations may consummate sales of beer (but not wines or distilled spirits) to other dealers at the purchasers' places of business without having to register again as a wholesale dealer on account of those sales.
#### § 31.54 Hospitals.
Hospitals and similar institutions furnishing liquors to patients are not required to register or keep records under this part, provided that no specific or additional charge is made for the liquors so furnished.
#### § 31.55 Limited retail dealers.
(a) *Sales by limited retail dealers.* Limited retail dealers, as described in [§ 31.35](/current/title-27/section-31.35), are not required to register or keep records under this part.
(b) *Sales to limited retail dealers.* Retail dealers in liquors or beer who make sales at their registered places of business to limited retail dealers are not required under this part, solely by virtue of those sales, to register or keep records as wholesale dealers.
### Persons Who Are Not Dealers in Liquors or Beer
#### § 31.61 Single sale of liquors or warehouse receipts.
A single sale of distilled spirits, wines, or beer, or a single sale of one or more warehouse receipts for distilled spirits, unattended by circumstances showing the person making the sale to be engaged in that activity as a business, does not subject the vendor to the registration and other requirements of this part.
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121), [5122](https://www.govinfo.gov/link/uscode/26/5122))
#### § 31.62 Persons making casual sales.
Certain persons making casual sales of liquors are not dealers for purposes of this part and therefore are not required to register, keep records, or submit a report as required of dealers under this part. These persons are:
(a) Administrators, executors, receivers, and other fiduciaries who receive liquors in their fiduciary capacities and sell them in one parcel or at public auction in parcels of not less than 20 wine gallons (75.7 liters);
(b) Creditors who receive liquors as security for, or in payment of, debts and sell them in one parcel or at a public auction in parcels of not less than 20 wine gallons (75.7 liters);
(c) Public officers or court officials who levy on liquors under order or process of any court or magistrate and sell them in one parcel or at public auction in parcels of not less than 20 wine gallons (75.7 liters); and
(d) A retiring partner, or representative of a deceased partner, who sells liquors to the incoming or remaining partner, or partners, of a partnership.
#### § 31.63 Agents, auctioneers, brokers, etc., acting on behalf of others.
Certain persons may sell liquors as agents or employees of others (principals), or may receive and transmit orders therefor to a dealer, without being considered a dealer on account of those activities. Those persons, who have no property rights in the liquors sold, may make collections for their principals and receive commissions for their services, or may guarantee the payment of accounts, without being required to register or keep records under this part. In all such cases, however, the principal is required to register and keep records, as provided in this part, at each place where sales are consummated, unless the principal is exempt from those requirements under the provisions of this subpart. The persons covered by this section are:
(a) Auctioneers who merely sell liquors at auction on behalf of others;
(b) Agents or brokers who solicit orders for liquors in the name of a principal, but who neither stock nor deliver the liquors for which orders are taken;
(c) Employees who merely sell liquors on behalf of their employers; and
(d) Retail dealers in liquors or retail dealers in beer who merely receive and transmit to a wholesale dealer orders for liquors or beer to be billed, charged, and shipped to customers by such wholesale dealers.
#### § 31.64 Apothecaries or druggists selling medicines and tinctures.
Apothecaries and druggists who use wines or spirituous liquors for compounding medicines and in making tinctures that are unfit for use for beverage purposes are not considered to be dealers by reason of the sale of those compounds or tinctures for nonbeverage purposes.
([26 U.S.C. 5002](https://www.govinfo.gov/link/uscode/26/5002))
#### § 31.65 Persons selling products unfit for beverage use.
(a) *Vendors not deemed to be dealers.* No person selling or offering for sale for nonbeverage purposes products qualifying as unfit for use for beverage purposes under [§ 19.5 of this chapter](/current/title-27/section-19.5) shall be deemed, solely by reason of such sales, to be a dealer.
(b) *Restrictions.* Any person who sells or offers for sale any nonbeverage products for use, or for sale for use, for beverage purposes, or who sells any of such products under circumstances in which it might reasonably appear that it is the intention of the purchaser to procure the product for sale or use for beverage purposes, must register and keep records as required under this part as a wholesale dealer in liquors, retail dealer in liquors, wholesale dealer in beer, or retail dealer in beer, as appropriate.
\[T.D. TTB-79, [74 FR 37407](https://www.federalregister.gov/citation/74-FR-37407), July 28, 2009, as amended by T.D. TTB-92, [76 FR 9172](https://www.federalregister.gov/citation/76-FR-9172), Feb. 16, 2011]
#### § 31.66 Retail dealer selling entire stock in liquidation.
No retail dealer in liquors or retail dealer in beer shall be deemed to be a wholesale dealer in liquors or a wholesale dealer in beer by virtue of selling in liquidation that dealer's entire stock of liquors in one parcel, or in parcels, each of which embraces not less than the entire stock of distilled spirits, of wines, or of beer, which parcels may contain a combination of any or all such liquors, to any other dealer. A retail dealer making such sale or sales is not required to register or to keep records or submit reports of those sales.
#### § 31.67 Persons returning liquors for credit, refund, or exchange.
No retail dealer in liquors or retail dealer in beer, or other person, shall be deemed to be a wholesale dealer in liquors or a wholesale dealer in beer by virtue of a bona fide return of distilled spirits, wines, or beer to the dealer from whom the distilled spirits, wines, or beer were purchased (or to the successor of such vendor's business or line of merchandise) for credit, refund, or exchange; and the giving of such credit, refund or exchange shall not be deemed to be a purchase within the meaning of [§ 31.141 of this part](/current/title-27/part-31/section-31.141). Except in the case of wholesale dealers in liquors required to keep records of their transactions under [§§ 31.155](/current/title-27/section-31.155) and [31.156](/current/title-27/section-31.156), or retail dealers required to keep records under [§ 31.171](/current/title-27/section-31.171), persons returning liquors as provided in this section are not required to keep records or submit reports of such transactions.
([26 U.S.C. 5132](https://www.govinfo.gov/link/uscode/26/5132))
## Subpart E—Places Subject to Registration
#### § 31.71 Registration required at each place of business.
Except as otherwise provided in [§ 31.43](/current/title-27/section-31.43) and in [subpart D of this part](/current/title-27/part-31/subpart-D), registration is required under this part for each and every place where distilled spirits, wines, or beer are sold or offered for sale. No person may engage in any business for which registration is required until the place of business has been registered in accordance with this part.
#### § 31.72 Place of sale.
For purposes of this part, the place at which ownership of liquors is transferred, actually or constructively, is the place of sale.
#### § 31.73 Place of offering for sale.
Liquors are considered to be offered for sale at the place where they are kept for sale and where a sale could take place, and at any place where sales are in fact consummated. Liquors are not considered to be offered for sale by sending an agent out to take orders, or by establishing an office for the mere purpose of taking orders, so long as in each case the orders received are transmitted to the principal for acceptance at the place where that principal has registered under this part or where the principal is exempt from registration as provided in [subpart D of this part](/current/title-27/part-31/subpart-D).
#### § 31.74 Places of storage; deliveries therefrom.
Registration is not required under this part for warehouses and similar places that are used by dealers merely for the storage of liquors and that are not places where orders for liquors are accepted. When orders for liquors are received and duly accepted at a place that the dealer has registered under this part, the subsequent actual delivery of the liquors from a place of storage does not require registration at that place of storage. Except as otherwise provided in [§§ 31.52](/current/title-27/section-31.52) and [31.53](/current/title-27/section-31.53), a dealer who registered a given place, and who makes actual delivery of liquors from a warehouse at another place, must register for the place where ownership of the liquors is transferred if there was no prior constructive delivery by the acceptance of an order for the liquors at the place covered by the existing registration.
#### § 31.75 Dealer in beer and dealer in liquors at the same location.
Any person who registers as a wholesale dealer in beer or retail dealer in beer and who thereafter begins to sell distilled spirits or wine must also register as a wholesale dealer in liquors or retail dealer in liquors before commencing the sale, or offering for sale, of distilled spirits or wine.
([26 U.S.C. 5124](https://www.govinfo.gov/link/uscode/26/5124))
### Sales in Two or More Areas on the Same Premises
#### § 31.81 General.
When liquors are sold by a proprietor in two or more areas within the proprietor's place of business, only one registration is required under this part. When the proprietor leases to another person or persons the privilege of selling liquors in two or more areas within the proprietor's place of business, whether the privilege is exercised separately or simultaneously with the proprietor or another concessionaire, each lessee is required to register only once.
#### § 31.82 Hotels.
The proprietor of a hotel who conducts the sale of liquors throughout the hotel premises is only required to register under this part for one place. For example, different areas operated by the proprietor in the hotel, such as banquet rooms, meeting rooms, and guest rooms, collectively constitute a single place of business. When a concessionaire conducts the sale of liquors at two or more areas in a hotel, those areas are regarded as a single place of business, and the concessionaire is required to register only once.
#### § 31.83 Ball park, race track, etc.; sales throughout the premises.
The proprietor of a ball park, race track, stadium, pavilion, or other similar enclosure constituting one premises, who engages in the business of selling liquors throughout that enclosure, including sales from baskets or containers by employees on the proprietor's behalf, is required to register only once for the entire enclosure. Each concessionaire having the same privilege throughout the enclosure, whether the privilege is exercised separately or simultaneously with the proprietor or another concessionaire, is required to register only once for the entire enclosure.
### Sales in Multiple Locations
#### § 31.91 Passenger trains, aircraft, and vessels.
Persons who carry on the business of a retail dealer in liquors or of a retail dealer in beer on trains, aircraft, boats, or other conveyances engaged in the business of carrying passengers may conduct that business throughout the passenger carrying train, aircraft, boat, or other vessel, after filing only one registration under this part. Such persons must specify on the registration form the number of passenger carriers for which registration is being completed.
#### § 31.92 Carriers not engaged in passenger service.
Except as otherwise provided in [§ 31.93](/current/title-27/section-31.93), the retailing of liquors on any train, aircraft, boat, or other conveyance that is not engaged in the business of carrying passengers is prohibited.
#### § 31.93 Supply boats or vessels.
Persons may carry on the business of a retail dealer in liquor or of a retail dealer in beer on supply boats or vessels operated by them when those persons operate from a fixed address in a port or harbor and supply exclusively boats or other vessels, or persons thereon, at that port or harbor. Such persons must specify, on an attachment to the registration form, the following: that the business will consist of supplying exclusively boats, vessels, or persons thereon; the name of the port or harbor at which the business is to be carried on; and the fixed address from which operations are to be conducted. When such sales are to be made from two or more supply boats or vessels, the dealer must also specify on the attachment the number of supply boats or vessels for which registration is being made. If the dealer operates from two or more fixed addresses, the dealer must prepare one registration form covering all of those addresses and must include on the attachment to the registration form the number of supply boats or vessels operating from each address.
#### § 31.94 Retail dealers “At Large.”
A retail dealer in liquors or a retail dealer in beer whose business requires the dealer to travel from place to place, such as a dealer who sells at carnivals or circuses, must register “At Large” covering the dealer's activities throughout the United States by filing only one registration. A dealer submitting such a registration must state on the registration form, or on an attachment thereto, the nature of the dealer's business and the reason the dealer requires registration “At Large.”
#### § 31.95 Caterers.
(a) *General.* When a contract to furnish liquors is made by a caterer at a place of business for which the caterer has registered under this part, no additional registration is required by virtue of the serving of the liquors at a different location.
(b) *Additional registration.* When the contract of a caterer provides for the sale of liquors by the drink at a place, or simultaneously at different places, other than the place of business for which the caterer has registered under this part, a separate registration is required for each such place if the caterer does not keep the records specified in [paragraph (c)](/current/title-27/section-31.95#p-31.95\(c\)) of this section.
(c) *Records.* Caterers must maintain sufficient commercial records to identify all locations where activities subject to registration occur. These commercial records must indicate the names and addresses of locations where alcoholic beverages have been sold or offered for sale and the dates and times that those activities occurred. These commercial records must be available to an appropriate TTB officer upon request.
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121), [5122](https://www.govinfo.gov/link/uscode/26/5122))
#### § 31.96 Peddling.
No person shall peddle distilled spirits, wines, or beer, except in the circumstances described in [§§ 31.52](/current/title-27/section-31.52), [31.53](/current/title-27/section-31.53), and [31.93](/current/title-27/section-31.93). Persons peddling liquors to whom [§§ 31.52](/current/title-27/section-31.52), [31.53](/current/title-27/section-31.53), and [31.93](/current/title-27/section-31.93) do not apply are required to register at each place where sales are consummated.
## Subpart F—Partnerships
#### § 31.101 Registration of partners.
Any number of persons carrying on one business in partnership at any one place must register only once for that business.
#### § 31.102 Addition of partners or incorporation of partnership.
Where a number of persons who have filed a registration under this part as partners admit one or more new members to the partnership or form a corporation (a separate legal entity) to take over the business, the new partnership or corporation must register as a new dealer before commencing business.
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121), [5122](https://www.govinfo.gov/link/uscode/26/5122), [5124](https://www.govinfo.gov/link/uscode/26/5124))
#### § 31.103 Formation of a partnership by two dealers.
Where two persons form a partnership after each has registered for a business carried on by himself, the partnership must register as a new dealer to cover the business conducted by the partnership.
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121), [5122](https://www.govinfo.gov/link/uscode/26/5122), [5124](https://www.govinfo.gov/link/uscode/26/5124))
#### § 31.104 Withdrawal of one or more partners.
When one or more partners withdraw from a partnership that has registered under this part, the remaining partner, or partners, must register the change in control by filing an amended registration form on or before the following July 1.
## Subpart G—Registration Form, TTB F 5630.5d
#### § 31.111 Date registration form is due.
(a) *General.* Dealers must register by filing the registration form, TTB Form 5630.5d, before engaging in business and on or before July 1 of each year thereafter. However, as long as none of the information specified on the form has changed since the previous registration form was filed, no additional registration is required. If the registration form is received in the mail and the U.S. postmark on the cover shows that it was deposited in the mail in the United States within the time prescribed for filing in an envelope or other appropriate wrapper that was properly addressed with postage prepaid, the form will be considered as timely filed. If the postmark is not legible, the sender has the burden of proving the date when the postmark was made. When registered mail is used, the date of postal registration will be accepted as the postmark date.
(b) *Transition rule.* Dealers already engaged in business prior to July 1, 2008, must register as an “existing business” unless they had registered, in accordance with regulations in effect at the time of registration, on or after January 1, 2007. This one-time registration is due on or before July 1, 2009.
([26 U.S.C. 6071](https://www.govinfo.gov/link/uscode/26/6071))
#### § 31.112 Registration of multiple locations.
A dealer required to register at two or more locations shall file one registration form, prepared as provided in [§ 31.114(c)](/current/title-27/section-31.114#p-31.114\(c\)), to cover all such locations.
#### § 31.113 Place for filing registration form.
The registration form, TTB Form 5630.5d, must be filed with TTB in accordance with the instructions on the form.
#### § 31.114 Completion of registration form.
(a) *General.* Dealers must register by filing the registration form, TTB Form 5630.5d, Alcohol Dealer Registration. The registration form must be filed with TTB in accordance with this subpart and the instructions on the form.
(b) *Preparation of TTB Form 5630.5d.* All of the information called for on TTB Form 5630.5d must be provided. This information includes the following:
(1) The true name of the dealer.
(2) The trade name(s) (if any) of the business(es) subject to the registration requirement.
(3) The employer identification number (see [§ 31.115](/current/title-27/section-31.115)).
(4) The mailing address of the dealer's principal place of business (or principal office, in the case of a corporate dealer).
(5) The exact location of each place of business, by name and number of building or street, or if these do not exist, by some specific description in addition to the post office address.
(6) The business telephone number of each place of business.
(7) The class(es) of dealer in which the dealer operates a business.
(8) Ownership and control information. This consists of the name, position, and residence address of every owner of the business and of every person having power to control its management and policies with respect to the activity subject to registration. “Owner of the business” includes every partner, if the dealer is a partnership, and every person owning 10 percent or more of its stock, if the dealer is a corporation. However, the ownership and control information required by this paragraph need not be stated if the same information has been previously provided to TTB and that previously provided information is still current.
(c) *Multiple locations and/or classes of dealers.* A dealer required to register at more than one location or for more than one class of dealers must—
(1) File one registration form, TTB Form 5630.5d, to cover all locations and classes of dealers; and
(2) Prepare, on the form, or on an attachment identified with the taxpayer's name, mailing address (as shown on TTB Form 5630.5d), and employer identification number, a list showing, by States, the trade name, address, telephone number, and dealer class of each location for which registration is being made. The original of the list must be filed with TTB on or with the registration form, and a copy must be retained at the dealer's principal place of business (or principal office, in the case of a corporate dealer) for the period specified in [§ 31.191](/current/title-27/section-31.191).
([26 U.S.C. 7805](https://www.govinfo.gov/link/uscode/26/7805))
#### § 31.115 Employer identification number.
(a) *Requirement.* The employer identification number (as defined in [26 CFR 301.7701-12](/current/title-26/section-301.7701-12)) of a dealer who has been assigned such a number must be shown on each registration form filed under this part. A dealer who does not have such a number must apply for one as provided in [paragraph (b)](/current/title-27/section-31.115#p-31.115\(b\)) of this section and enter “number applied for” in the space for the number on the registration form; then, upon receipt of the number from the Internal Revenue Service, the dealer must provide it to TTB by separate correspondence. Failure of a dealer to include the employer identification number may result in the imposition of the penalty specified in [§ 31.14(b)](/current/title-27/section-31.14#p-31.14\(b\)).
(b) *Application for employer identification number.* Each dealer who files a registration form and who has not already been assigned an employer identification number must file Internal Revenue Service (IRS) Form SS-4 to apply for one. The dealer shall apply for and be assigned only one employer identification number, regardless of the number of places of business for which the dealer is required to file a registration form under this part. The employer identification number shall be applied for no later than 7 days after the filing of the taxpayer's first registration form. IRS Form SS-4 may be obtained from the director of an IRS service center, from any IRS district director, from *[https://www.irs.gov/](https://www.irs.gov/),* or from TTB's National Revenue Center.
([26 U.S.C. 6109](https://www.govinfo.gov/link/uscode/26/6109))
\[T.D. TTB-79, [74 FR 37407](https://www.federalregister.gov/citation/74-FR-37407), July 28, 2009, as amended by T.D. TTB-196, [89 FR 87946](https://www.federalregister.gov/citation/89-FR-87946), Nov. 6, 2024]
#### § 31.116 Execution of registration form.
The registration of an individual proprietor shall be signed by the proprietor, the registration of a partnership shall be signed by a member of the firm, and the registration of a corporation shall be signed by a duly authorized officer thereof; however, any individual, partnership, or corporation that is a proprietor may appoint an agent to sign on the proprietor's behalf. The person signing the registration form must identify his or her signing capacity as “individual owner,” “member of firm,” “agent,” or “attorney-in-fact,” as appropriate, or, in the case of a corporation, by the title of the signing officer. A receiver, trustee, assignee, executor, administrator, or other legal representative who continues the business of a dealer by reason of death, insolvency, or other circumstance must indicate the fiduciary capacity in which he or she acts. Registration forms signed by persons as agents or attorneys-in-fact will not be accepted unless, in each instance, the principal named on the form has executed a power of attorney authorizing that person to sign and that power of attorney is filed with the TTB officer with whom the TTB Form 5630.5d is required to be filed. Form 5630.5d must be verified by a written declaration that it has been executed under the penalties of perjury.
([26 U.S.C. 6061](https://www.govinfo.gov/link/uscode/26/6061), [6065](https://www.govinfo.gov/link/uscode/26/6065))
## Subpart H—Changes in Registration Information
### Changes Requiring Registration as a New Business
#### § 31.121 Sale of business.
Under this part, registration is personal to the one who registered and is not transferable from one dealer to another. Where a change occurs in the proprietorship of a business for which registration has been completed, the successor must register as a new business.
([26 U.S.C. 5124](https://www.govinfo.gov/link/uscode/26/5124))
#### § 31.122 Incorporation of business.
Where an individual or a firm engaged in business requiring registration under this part forms a corporation to take over and conduct the business, the corporation, as a separate legal entity, must register in its own name as a new business.
([26 U.S.C. 5124](https://www.govinfo.gov/link/uscode/26/5124))
#### § 31.123 New corporation.
Where a new corporation is formed to take over and conduct the business of one or more corporations that have registered under this part, the new corporation must register in its own name as a new business.
([26 U.S.C. 5124](https://www.govinfo.gov/link/uscode/26/5124))
#### § 31.124 Stockholder continuing business of corporation.
A registration completed by a corporation as a dealer in liquors, or as a dealer in beer, cannot cover the same business carried on by one or more of its stockholders after dissolution of the corporation. The stockholder(s) must register as a new business.
([26 U.S.C. 5124](https://www.govinfo.gov/link/uscode/26/5124))
#### § 31.125 Cross references.
See also [§§ 31.75](/current/title-27/section-31.75), [31.102](/current/title-27/section-31.102), and [31.103](/current/title-27/section-31.103) for other situations requiring registration as a new dealer.
### Other Changes
#### § 31.131 Change of address.
(a) *General.* A dealer who removes the business to a place other than that for which the dealer is registered must register the change with TTB by filing an amended registration form, TTB Form 5630.5d, on or before the next July 1 following the change.
(b) *Caterers.* A caterer who sells liquor by the drink at locations other than his or her principal place of business shall not be required to provide the change of location registration prescribed in [paragraph (a)](/current/title-27/section-31.131#p-31.131\(a\)) of this section for those catering activities, provided that the caterer maintains the records required by [§ 31.95(c)](/current/title-27/section-31.95#p-31.95\(c\)). For a permanent change in location of the principal place of business, the caterer must file an amended registration form in accordance with [paragraph (a)](/current/title-27/section-31.131#p-31.131\(a\)) of this section.
#### § 31.132 Change in name or style of business.
A dealer who has registered for a business at a given location must complete an amended registration, and submit it on or before the next July 1, to report a change in the name or style (trade name) under which the dealer conducts that business.
#### § 31.133 Change in management.
A change in management that involves no change in ownership of the business requires an amended registration only if the change involves a person who is responsible for controlling the management policies or buying or selling practices of the business pertaining to alcohol beverages. The amended registration must be submitted on TTB Form 5630.5d on or before the next July 1 following the change.
([26 U.S.C. 5124](https://www.govinfo.gov/link/uscode/26/5124))
#### § 31.134 Increase in capital stock of a corporation.
An amended registration is not required by reason of an increase in the capital stock of a corporation so long as a new corporation is not created under the laws of the State of incorporation and provided that the change does not alter the list of stockholders owning 10 percent or more of the capital stock.
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121), [5122](https://www.govinfo.gov/link/uscode/26/5122), [5124](https://www.govinfo.gov/link/uscode/26/5124))
#### § 31.135 Change in ownership of capital stock.
Registration as a new business is not required merely by reason of the sale or transfer of all or a controlling interest in the capital stock of a corporation. However, an amended registration is required if the sale or transfer alters the list of stockholders owning 10 percent or more of the capital stock. The amended registration must be filed on or before the next July 1 following the sale or transfer.
#### § 31.136 Change in membership of unincorporated club.
Registration of an unincorporated club is not required by reason of changes in membership, when those changes do not result in the dissolution of the club and the formation of a new club, unless the changes involve a person with the power to control the management policies or buying or selling practices pertaining to alcohol. In the latter case, the filing of an amended registration is required on or before the next July 1.
#### § 31.137 Withdrawal of partner(s).
Withdrawal of partner(s) requires an amended registration. See [§ 31.104](/current/title-27/section-31.104).
#### § 31.138 Discontinuance of business.
A dealer going out of business must register that event within 30 days by filing a registration form, TTB Form 5630.5d, in accordance with instructions on the form.
## Subpart I—Restrictions Relating to Purchases of Distilled Spirits
#### § 31.141 Unlawful purchases of distilled spirits.
(a) *General.* It is unlawful for any dealer to purchase distilled spirits for resale from any person other than:
(1) A wholesale dealer (including a State, a political subdivision of a State, the District of Columbia, and a distilled spirits plant) who is required to keep records under [§§ 31.151](/current/title-27/section-31.151) through [31.163](/current/title-27/section-31.163) pertaining to the place where the distilled spirits are purchased;
(2) A retail liquor store operated by a State, a political subdivision of a State, or the District of Columbia; or
(3) A person not required to register as a wholesale liquor dealer, as provided in [§§ 31.62](/current/title-27/section-31.62), [31.63](/current/title-27/section-31.63), [31.66](/current/title-27/section-31.66), and [31.67](/current/title-27/section-31.67).
(b) *Special provision for limited retail dealers.* A limited retail dealer may purchase distilled spirits from a retail dealer in liquors for resale.
([26 U.S.C. 5132](https://www.govinfo.gov/link/uscode/26/5132))
## Subpart J—Records and Reports
### Wholesale Dealers' Records and Reports
#### § 31.151 General requirements as to distilled spirits.
Except as otherwise provided in [§§ 31.153](/current/title-27/section-31.153) and [31.154](/current/title-27/section-31.154), every wholesale dealer in liquors must keep daily records of the physical receipt and disposition of distilled spirits in accordance with [§§ 31.155](/current/title-27/section-31.155) and [31.156](/current/title-27/section-31.156). When required in writing by the appropriate TTB officer, a wholesale dealer in liquors must also prepare and file a monthly summary report totaling the daily receipts and disposition of distilled spirits in accordance with [§ 31.160](/current/title-27/section-31.160).
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121))
#### § 31.152 Requirements as to wines and beer.
Every wholesale dealer in liquors who receives wines, or wines and beer, and every wholesale dealer in beer must keep at the dealer's place of business a complete record showing the quantities of wine and beer received, from whom the wine and beer were received, and the dates of receipt. This record, which must be kept for a period of not less than three years as prescribed in [§ 31.191](/current/title-27/section-31.191), shall consist of all purchase invoices or bills covering wines and beer received or, at the option of the dealer, a book record containing all of the required information. Wholesale dealers are not required to prepare or submit reports to the appropriate TTB officer of transactions relating to wines and beer.
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121))
(Approved by the Office of Management and Budget under control number 1513-0065)
#### § 31.153 Records to be kept by States, political subdivisions of States, or the District of Columbia.
The provisions of this subpart regarding the maintenance of records and the submission of reports shall not apply to States, political subdivisions of States, or the District of Columbia, or to any liquor stores operated by such entities that maintain, and make available for inspection by appropriate TTB officers, records that will enable TTB to verify receipts of wines and beer and to trace readily all distilled spirits received and disposed of by those entities. However, States, political subdivisions of States, and the District of Columbia, and liquor stores operated by such entities, must, on request of the appropriate TTB officer, furnish such transcripts, summaries, and copies of records with respect to distilled spirits as that TTB officer may require.
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121))
#### § 31.154 Records to be kept by alcohol beverage producers, processors, and bonded warehousemen.
Wholesale liquor dealer operations conducted by brewers and by proprietors of distilled spirits plants, bonded wine cellars, bonded wine warehouses, and taxpaid wine bottling houses must be recorded and reported in accordance with the applicable provisions of [parts 19](/current/title-27/part-19), [24](/current/title-27/part-24), and [25 of this chapter](/current/title-27/part-25). To the extent that the same transactions are required to be recorded or reported by this part and by parts 19, 24, or 25, the records and reports required by those parts will satisfy the requirements of this part.
([26 U.S.C. 5207](https://www.govinfo.gov/link/uscode/26/5207), [5367](https://www.govinfo.gov/link/uscode/26/5367), [5415](https://www.govinfo.gov/link/uscode/26/5415))
#### § 31.155 Records of receipt.
(a) *Information required.* Every wholesale dealer in liquors must maintain a daily record of the physical receipt of each individual lot or shipment of distilled spirits. This record must show, at a minimum, the following:
(1) Name and address of consignor;
(2) Date of receipt, including date of inventory for recorded gains;
(3) Brand name;
(4) Name of producer or bottler. However, this may be omitted if the dealer keeps available for inspection a separate list or record identifying the producer or bottler with the brand name;
(5) Kind of spirits. However, this may be omitted if the dealer keeps available for inspection a separate list or record identifying “kind” with the brand name;
(6) Quantity actually received, showing number of packages, if any, and number of cases by size of bottle, and explaining any difference from the quantity shown on the commercial papers covering the shipment; and
(7) Package identification numbers of containers of alcohol received for repackaging for industrial use pursuant to [subpart L of this part](/current/title-27/part-31/subpart-L).
(b) *Form of record.* The record required by [paragraph (a)](/current/title-27/section-31.155#p-31.155\(a\)) of this section must be a part of the accounting system and must consist of consignors' invoices (or, if those invoices are not available on the day the shipment is received, memorandum receiving records prepared on the day of receipt of the distilled spirits, including records of inventory for recorded gains) and credit memorandums covering distilled spirits returned to the dealer.
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121))
(Approved by the Office of Management and Budget under control number 1513-0065)
#### § 31.156 Records of disposition.
(a) *Information required.* Every wholesale dealer in liquors must prepare a daily record of the physical disposition of each individual lot of distilled spirits. This record must show, at a minimum, the following:
(1) Name and address of consignee;
(2) Date of disposition, including date of discovery in the case of casualty, theft or recorded inventory losses;
(3) Brand name;
(4) Kind of spirits. However, this may be omitted if the dealer keeps available for inspection a separate list or record identifying “kind” with the brand name;
(5) Number of packages, if any, and number of cases by size of bottle; and
(6) Package identification numbers of containers of alcohol repackaged for industrial use pursuant to [subpart L of this part](/current/title-27/part-31/subpart-L).
(b) *Form of record.* The record required by [paragraph (a)](/current/title-27/section-31.156#p-31.156\(a\)) of this section must be part of the accounting system and must consist of wholesale dealer's invoices (or, if those invoices are not available at the time the spirits are removed, memorandum shipping records prepared at the time of removal of the distilled spirits, including date of discovery in the case of casualty, theft or recorded inventory losses).
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121))
(Approved by the Office of Management and Budget under control number 1513-0065)
#### § 31.157 Canceled or corrected records.
Entries on the records of receipt and disposition prescribed by [§§ 31.155](/current/title-27/section-31.155) and [31.156](/current/title-27/section-31.156) must not be erased or obliterated. Correction or deletion of any entry must be accomplished by drawing a line through the entry and inserting an appropriate correction or explanation. If a wholesale dealer in liquors voids an invoice for any reason, the file copy prescribed in [§ 31.181](/current/title-27/section-31.181) must be marked “Cancelled” and must be filed as provided in that section; any remaining copy of the voided invoice must be destroyed or similarly cancelled and filed. If a new invoice is prepared, its serial number must be cross referenced on any retained copies of the cancelled invoice.
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121))
#### § 31.158 Previously prescribed or approved records of receipt and disposition.
A wholesale dealer in liquors may continue to use records of receipt and disposition in a format previously prescribed or approved. Those records must show the information required by [paragraph (a) of § 31.155](/current/title-27/section-31.155#p-31.155\(a\)) or [paragraph (a) of § 31.156](/current/title-27/section-31.156#p-31.156\(a\)), as applicable. The records must be preprinted with the name and address of the wholesale dealer. Each sheet or page must bear a preprinted serial number, or page serial numbers may be affixed in unbroken sequence during the preparation or processing of the records. A serial number must not be duplicated within a period of 6 months.
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121))
#### § 31.159 Variations in format or preparation of records.
(a) *Authorization.* The appropriate TTB officer may approve variations in the type and format of records of receipt and disposition required under [§§ 31.155](/current/title-27/section-31.155) and [31.156](/current/title-27/section-31.156), or in the methods of preparing those records, when it is shown that variations from the requirements are necessary in order to use data processing equipment, other business machines, or existing accounting systems, and provided that the variation will not unduly hinder the effective administration of this part, jeopardize the revenue, or be contrary to any provision of law. A dealer who wishes to employ such a variation must submit a written application to the appropriate TTB officer. The application must describe the proposed variation and set forth the need for it. Variations in type and format of records or methods of preparation must not be employed until approval is received from the appropriate TTB officer.
(b) *Requirements.* Any information required by this part to be kept or filed is subject to the provisions of law and this part relating to required records and reports, regardless of the form or manner in which kept or filed.
(Approved by the Office of Management and Budget under control number 1513-0067)
#### § 31.160 Monthly summary report.
(a) *Requirement.* Every wholesale dealer in liquors must, when required, submit monthly to the appropriate TTB officer a summary report of the total quantities of all distilled spirits received and disposed of daily during the month (including the date of discovery for theft, casualty and inventory losses and inventory gains). This report must be posted by the wholesaler on a daily basis. If there were no receipts or disposals of distilled spirits during the month, the report must be marked “No Transactions During Month.” This report must be filed not later than the 15th day of the month following the report period, with a copy retained by the dealer. The appropriate TTB officer may authorize a dealer, upon request, to post the report less frequently until otherwise notified; the appropriate TTB officer's authorization will specify the intervals at which the posting will be accomplished, but not less frequently than monthly.
(b) *Form of report.* When required under [paragraph (a)](/current/title-27/section-31.160#p-31.160\(a\)) of this section, the monthly summary report may be prepared in a format that is adapted to the dealer's accounting and recordkeeping systems. In addition to any other information shown therein, the report must include:
(1) Daily totals of all bottled spirits received and disposed of, recorded by wine gallons or liters;
(2) Daily totals of all bulk spirits in packages received and disposed of, recorded by proof gallons; and
(3) Entries showing, by date, each disposition caused by an inventory, casualty, or theft loss and each receipt caused by a recorded gain in inventory.
(c) *Declaration.* When required to be filed, the monthly summary report must bear the following declaration signed by the dealer or an authorized agent:
I declare under the penalties of perjury that I have examined this report and, to the best of my knowledge and belief, it is true, correct, and complete and is supported by true, correct, and complete records which are available for inspection.
(d) *Other records.* Even if the monthly summary report is not required by the appropriate TTB officer, every wholesale dealer in distilled spirits must maintain and make available for review by appropriate TTB officers:
(1) Records of receipt required by [§ 31.155](/current/title-27/section-31.155);
(2) Records of disposition, required by [§ 31.156](/current/title-27/section-31.156); and
(3) Any other supporting information or documents regarding the receipt and disposition of distilled spirits that have a direct role in determining the completeness and accuracy of the receipt and disposition records.
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121))
(Approved by the Office of Management and Budget under control number 1513-0065)
#### § 31.161 Conversion between metric and U.S. units.
When liters are converted to wine gallons, the quantity in liters must be multiplied by 0.264172 to determine the equivalent quantity in wine gallons. Once converted to wine gallons, the proof gallons of spirits in cases must be determined as provided in [§ 30.52 of this chapter](/current/title-27/section-30.52). Cases containing the same quantity of spirits of the same proof in metric bottles may be converted to U.S. units by multiplying the liters in one case by the number of cases to be converted, as follows:
(a) If the conversion from liters to U.S. units is made before multiplying by the number of cases, the quantity in U.S. units must be rounded to the sixth decimal; and
(b) If the conversion is made after multiplying by the number of cases, the quantity in U.S. units must be rounded to the nearest hundredth.
([26 U.S.C. 7805](https://www.govinfo.gov/link/uscode/26/7805); [27 U.S.C. 205](https://www.govinfo.gov/link/uscode/27/205))
#### § 31.162 Discontinuance of business.
When a wholesale dealer in liquors who is required, under [§ 31.160](/current/title-27/section-31.160), to file a monthly summary report discontinues business, a monthly summary report marked “Final” must be filed covering transactions through the date of discontinuance.
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121))
#### § 31.163 Requirements when a wholesale dealer in liquors maintains a retail department.
(a) *Constructive receipt and sale.* When a wholesale dealer in liquors maintains a separate department on the premises for the retailing of distilled spirits, and the retail sales of distilled spirits normally represent 90 percent or more of the volume of distilled spirits sold, the dealer may “constructively” receive all distilled spirits in the retail department. Sales involving a wholesale transaction may be “constructively” sold through the wholesale department.
(1) *Receipts.* In lieu of maintaining and preparing the records required by [§ 31.155](/current/title-27/section-31.155), a wholesale dealer may constructively receive all distilled spirits in its retail department. In this case, the receiving document will serve as a receipt for (through) the wholesale department and a disposition (transfer) to the retail department. The receiving document must be maintained by the retail department in accordance with [§ 31.171](/current/title-27/section-31.171).
(2) *Dispositions.* In lieu of maintaining and preparing the records required by [§ 31.156](/current/title-27/section-31.156), a wholesale dealer may constructively sell distilled spirits from its retail department to other dealers. The sales invoice or bill must be filed in the wholesaler's disposition records and will serve as a record of receipt from the retail department and a record of disposition to another dealer.
(b) *Receipt and disposition records.* Except as provided in [paragraph (a)](/current/title-27/section-31.163#p-31.163\(a\)) of this section, a wholesale dealer must prepare and maintain the required records of receipt and disposition as prescribed in [§§ 31.155](/current/title-27/section-31.155) and [31.156](/current/title-27/section-31.156). Transfers between the wholesale and retail departments will be treated in the same manner as any other transaction involving the wholesale department.
(c) *Monthly summary report.* When required by [§ 31.160](/current/title-27/section-31.160), a wholesale dealer must prepare and file the monthly summary report of actual or constructive receipts and dispositions of all distilled spirits.
(d) *Physical separation.* Wholesale and retail departments need not be physically separated.
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121))
### Filing of Wholesale Dealers' Records and Reports
#### § 31.171 Method of filing.
A wholesale dealer may file the records of receipt and disposition required by [§§ 31.155](/current/title-27/section-31.155) and [31.156](/current/title-27/section-31.156) in accordance with the wholesaler's regular accounting and recordkeeping systems. The required records must include the dealer's own file copies of the receiving or shipping invoices and must be filed according to the following rules:
(a) Wholesale dealers may file records of receipt and disposition in accordance with their own filing system as long as the records are filed by transaction or reporting date and the filing system systematically and accurately accounts for all receipts and dispositions of distilled spirits.
(b) The required records of receipt and disposition must be filed not later than one business day following the date the transaction occurred.
(c) Supporting documents for receipts and dispositions, such as delivery receipts and bills of lading, also may be filed in accordance with the wholesaler's regular accounting and recordkeeping practices.
([26 U.S.C. 5121](https://www.govinfo.gov/link/uscode/26/5121), [5122](https://www.govinfo.gov/link/uscode/26/5122), [5123](https://www.govinfo.gov/link/uscode/26/5123))
#### § 31.172 Place of filing.
Records of receipt and disposition and monthly summary reports required by [§§ 31.155](/current/title-27/section-31.155), [31.156](/current/title-27/section-31.156), and [31.160](/current/title-27/section-31.160) must be maintained at the dealer's place of business. The appropriate TTB officer may, upon request, authorize maintenance of files, or an individual file, at another business location under the control of the same wholesale dealer, when it is determined that such maintenance will not cause undue inconvenience to TTB officers desiring to examine those files.
([26 U.S.C. 5123](https://www.govinfo.gov/link/uscode/26/5123))
### Retail Dealer's Records
#### § 31.181 Requirements for retail dealers.
(a) *Records of receipt.* All retail dealers must keep at their place of business complete records showing the quantities of all distilled spirits, wines, and beer received, from whom the distilled spirits, wines, and beer were received, and the dates of receipt. However, the appropriate TTB officer may, upon request, authorize the maintenance of records at another business premises also under the control of the same retail dealer when it is determined that such maintenance will not cause undue inconvenience to TTB officers desiring to examine those records. Records of receipts shall consist of all purchase invoices or bills covering distilled spirits, wines, and beer received, or, at the option of the retail dealer, a book record containing all of the required information.
(b) *Records of sales of 20 wine gallons (75.7 liters) or more.* Every retail dealer who makes sales of distilled spirits, of wines, or of beer in quantities of 20 wine gallons (75.7 liters) or more to the same person at the same time must prepare and keep a record of each sale. The record must show the date of sale, the name and address of the purchaser, the kind and quantity of each kind of liquors sold, and the serial numbers of all full cases of distilled spirits included in the sale. Each entry on that record must be supported by a corresponding delivery receipt (which may be executed on a copy of the sales slip) signed by the purchaser or the purchaser's agent.
([26 U.S.C. 5122](https://www.govinfo.gov/link/uscode/26/5122), [5123](https://www.govinfo.gov/link/uscode/26/5123))
(Approved by the Office of Management and Budget under control number 1513-0066)
### Retention of Records and Files
#### § 31.191 Period of retention.
All records and files, all documents or copies of documents supporting these records and files, and all file copies of reports, submitted as required by this part, must be retained by the person required to have them, for a period of not less than three years and, during the retention period, must be available, during business hours, for inspection and copying by the appropriate TTB officers. In addition, the appropriate TTB officer may require retention of the documents and other records for an additional period of not more than three years if it is determined that such additional retention is necessary.
([26 U.S.C. 5123](https://www.govinfo.gov/link/uscode/26/5123))
#### § 31.192 Photographic copies of records.
(a) *General.* Dealers may record, copy, or reproduce records required by this part. Dealers may use any process that accurately reproduces the original record and that forms a durable medium for preserving the original record.
(b) *Copies of records treated as original records.* Whenever records are reproduced under this section, the reproduced records must be preserved in conveniently accessible files, and provision must be made for examining, viewing, and using the reproduced record in the same manner as if it were the original record. A reproduced record will be treated and considered for all purposes as though it were the original record. All provisions of law and regulations applicable to the original record are applicable to the reproduced record. As used in this section, “original record” means the record required by this part to be maintained or preserved by a dealer, even though it may be an executed duplicate or other copy of the document.
([26 U.S.C. 5555](https://www.govinfo.gov/link/uscode/26/5555))
## Subpart K—Reuse and Possession of Used Liquor Bottles
#### § 31.201 Refilling of liquor bottles.
No person who sells, or offers for sale, distilled spirits, or agent or employee of such person, shall:
(a) Place in any liquor bottle any distilled spirits whatsoever other than those contained in that bottle at the time of closing under the provisions of [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101); or
(b) By the addition of any substance whatsoever to any liquor bottle, in any manner alter or increase any portion of the original contents contained in that bottle at the time of closing under the provisions of [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101).
([26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301))
#### § 31.202 Possession of refilled liquor bottles.
No person who sells, or offers for sale, distilled spirits, or agent or employee of such person, shall:
(a) Possess any liquor bottle in which any distilled spirits have been placed in violation of the provisions of [§ 31.201](/current/title-27/section-31.201); or
(b) Possess any liquor bottle, any portion of the contents of which has been altered or increased in violation of the provisions of [§ 31.201](/current/title-27/section-31.201).
([26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301))
#### § 31.203 Possession of used liquor bottles.
The possession of used liquor bottles by any person other than the person who empties the contents thereof is prohibited except in the following circumstances:
(a) The owner or occupant of any premises on which the used bottles have been lawfully emptied may assemble the bottles on such premises—
(1) For delivery to a bottler or importer on specific request of that bottler or importer;
(2) For destruction, either on the premises on which the bottles are emptied or elsewhere, including disposition for purposes that will result in the bottles being rendered unusable as bottles; or
(3) In the case of unusual or distinctive bottles, for disposition or sale as collectors' items or for other purposes not involving the packaging of any product for sale;
(b) Any person may possess, offer for sale, or sell unusual or distinctive bottles for purposes not involving the packaging of any product for sale; and
(c) Any person may assemble used liquor bottles for the purpose of recycling or reclaiming the glass or other approved liquor bottle material.
([26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301))
#### § 31.204 Mixed cocktails.
A retail liquor dealer who mixes cocktails or compounds any alcoholic liquors in advance of sale, as provided in [§ 31.233](/current/title-27/section-31.233), may not use liquor bottles in which distilled spirits have been previously packaged for the storage of the mixture or compound pending that sale.
([26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301))
## Subpart L—Packaging of Alcohol for Industrial Uses
#### § 31.211 Requirements and procedure.
Upon compliance with the provisions of [part 19 of this chapter](/current/title-27/part-19) applicable to persons repackaging distilled spirits, and subject to the requirements of [paragraphs (a)](/current/title-27/section-31.211#p-31.211\(a\)) through [(c)](/current/title-27/section-31.211#p-31.211\(c\)) of this section, a dealer engaged in the business of supplying distilled spirits for industrial use may obtain bulk alcohol on which the tax has been paid or determined and repackage the alcohol for sale for industrial use in containers of a capacity in excess of 1 wine gallon and not more than 5 wine gallons.
(a) *Qualification procedure.* An application for registration, TTB Form 5110.41, and an application for an operating permit, TTB Form 5110.25, modified in accordance with instructions of the appropriate TTB officer, must be executed and filed with the appropriate TTB officer. No alcohol shall be repackaged until the approved application for registration and the approved operating permit are received.
(b) *Operations.* Repackaging operations must be conducted in accordance with the bottling and packaging requirements of [part 19 of this chapter](/current/title-27/part-19). Packaging and labeling operations may be carried on without supervision of a TTB officer unless the appropriate TTB officer requires supervision.
(c) *Records.* The dealer must keep daily records showing the bulk alcohol received, dumped for packaging, packaged, and disposed of, including the name and address of each consignor and consignee. The dealer must prepare a monthly report on TTB Form 5110.28 of bulk alcohol received, packaged, and disposed of. Reports on Form 5110.28 must be submitted to the appropriate TTB officer not later than the 15th day of the month following the period covered by the report. Records, documents, or copies of documents supporting the records, and copies of reports submitted to the appropriate TTB officer, must be filed and retained as prescribed in [§§ 31.172](/current/title-27/section-31.172) and [31.191](/current/title-27/section-31.191).
([26 U.S.C. 5131](https://www.govinfo.gov/link/uscode/26/5131), [5206](https://www.govinfo.gov/link/uscode/26/5206))
#### § 31.212 Labeling.
Every dealer packaging alcohol for industrial use must affix to each package filled a label bearing in conspicuous print the words “Alcohol” and “For Industrial Use,” the proof of the alcohol, the capacity of the container, and the packaging dealer's name and address. The dealer may incorporate in the label other appropriate statements; however, such statements must not obscure or contradict the data required by this section to be shown on such labels.
([26 U.S.C. 5131](https://www.govinfo.gov/link/uscode/26/5131), [5206](https://www.govinfo.gov/link/uscode/26/5206))
## Subpart M—Distilled Spirits for Export with Benefit of Drawback
#### § 31.221 General.
A State, a political subdivision of a State, or a person holding a wholesale liquor dealer's basic permit issued under [part 1 of this chapter](/current/title-27/part-1) may export bottled taxpaid distilled spirits with benefit of drawback as provided in [§ 28.171 of this chapter](/current/title-27/section-28.171). The marking of cases, the preparation of notice of shipment on TTB Form 5110.30, the removal and exportation of the distilled spirits, and the filing of claims by the processor of the spirits must be in accordance with the applicable provisions of [parts 19](/current/title-27/part-19) and [28 of this chapter](/current/title-27/part-28).
#### § 31.223 Records and reports.
The provisions of [subpart J of this part](/current/title-27/part-31/subpart-J) regarding records and reports relating to liquors for domestic use also apply to export transactions permitted under this subpart.
## Subpart N—Miscellaneous
#### § 31.231 Destruction of marks and brands on wine containers.
A dealer who empties any cask, barrel, keg, or other bulk container of wine must scrape or obliterate from the empty container all marks, brands, tags, or labels placed thereon under the provisions of [part 24 of this chapter](/current/title-27/part-24) as evidence of the payment or determination of the tax on the wine removed in the container from the bonded wine cellar.
#### § 31.232 Wine bottling.
Each person desiring to bottle, package, or repackage taxpaid wines must, before carrying on those operations, apply and receive permission from the appropriate TTB officer in accordance with [part 24 of this chapter](/current/title-27/part-24). The decanting of wine by caterers or other retail dealers for table or room service, banquets, and similar purposes shall not be considered as “bottling,” if the decanters are not furnished for the purpose of carrying wine away from the area where served.
([26 U.S.C. 5352](https://www.govinfo.gov/link/uscode/26/5352))
#### § 31.233 Mixing cocktails in advance of sale.
A retail liquor dealer shall not mix cocktails, or compound any alcoholic liquors in advance of sale, except for the purpose of filling, for immediate consumption on the premises, orders received, or expected to be immediately received, at the bar. See [§ 31.204](/current/title-27/section-31.204) for additional mixed cocktail rules.
([26 U.S.C. 5002](https://www.govinfo.gov/link/uscode/26/5002))
#### § 31.234 Liability for special (occupational) tax.
The special (occupational) tax on alcohol beverage dealers was suspended for the period July 1, 2005, through June 30, 2008, and was repealed effective July 1, 2008. Dealers who were engaged in business prior to the suspension period remain liable for payment of the special (occupational) tax in accordance with the laws and regulations in effect at that time. The tax return to be used for payment of any past-due special (occupational) tax is TTB Form 5630.5a.
(Section 11125, [Pub. L. 109-59](https://www.govinfo.gov/link/plaw/109/public/59), 119 Stat. 1953)
# Part 4 — LABELING AND ADVERTISING OF WINE
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-4
Full text of 27 CFR Part 4 — LABELING AND ADVERTISING OF WINE. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 4—LABELING AND ADVERTISING OF WINE
#### Authority:
[27 U.S.C. 205](https://www.govinfo.gov/link/uscode/27/205), unless otherwise noted.
#### Source:
T.D. 6521, [25 FR 13835](https://www.federalregister.gov/citation/25-FR-13835), Dec. 29, 1960, unless otherwise noted.
#### Editorial Note:
Nomenclature changes to part 4 appear by T.D. ATF-425, [65 FR 11890](https://www.federalregister.gov/citation/65-FR-11890), Mar. 7, 2000.
## Subpart A—Scope
#### § 4.1 General.
The regulations in this part relate to the labeling and advertising of wine.
#### § 4.2 Territorial extent.
This part applies to the several States of the United States, the District of Columbia, and Puerto Rico.
#### § 4.3 Forms prescribed.
(a) The appropriate TTB officer is authorized to prescribe all forms required by this part. All of the information called for in each form shall be furnished as indicated by the headings on the form and the instructions on or pertaining to the form. In addition, information called for in each form shall be furnished as required by this part. The form will be filed in accordance with the instructions for the form.
(b) Forms prescribed by this part are available for printing through the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. ATF-92, [46 FR 46911](https://www.federalregister.gov/citation/46-FR-46911), Sept. 23, 1981, as amended by T.D. ATF-249, [52 FR 5955](https://www.federalregister.gov/citation/52-FR-5955), Feb. 27, 1987; T.D. 372, [61 FR 20723](https://www.federalregister.gov/citation/61-FR-20723), May 8, 1996; T.D. ATF-425, [65 FR 11890](https://www.federalregister.gov/citation/65-FR-11890), Mar. 7, 2000; T.D. TTB-44, [71 FR 16920](https://www.federalregister.gov/citation/71-FR-16920), Apr. 4, 2006; T.D. TTB-196, [89 FR 87935](https://www.federalregister.gov/citation/89-FR-87935), Nov. 6, 2024]
#### § 4.4 Delegations of the Administrator.
Most of the regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.4, Delegation of the Administrator's Authorities in [27 CFR Part 4](/current/title-27/part-4), Labeling and Advertising of Wine. You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-44, [71 FR 16920](https://www.federalregister.gov/citation/71-FR-16920), Apr. 4, 2006, as amended by T.D. TTB-196, [89 FR 87935](https://www.federalregister.gov/citation/89-FR-87935), Nov. 6, 2024]
#### § 4.5 Related regulations.
The following regulations also relate to this part:
[7 CFR Part 205](/current/title-7/part-205)—National Organic Program
[27 CFR Part 1](/current/title-27/part-1)—Basic Permit Requirements Under the Federal Alcohol Administration Act, Nonindustrial Use of Distilled Spirits and Wine, Bulk Sales and Bottling of Distilled Spirits
[27 CFR Part 5](/current/title-27/part-5)—Labeling and Advertising of Distilled Spirits
[27 CFR Part 7](/current/title-27/part-7)—Labeling and Advertising of Malt Beverages
[27 CFR Part 9](/current/title-27/part-9)—American Viticultural Areas
[27 CFR Part 12](/current/title-27/part-12)—Foreign Nongeneric Names of Geographic Significance Used in the Designation of Wines
[27 CFR Part 13](/current/title-27/part-13)—Labeling Proceedings
[27 CFR Part 16](/current/title-27/part-16)—Alcoholic Beverage Health Warning Statement
[27 CFR Part 24](/current/title-27/part-24)—Wine
[27 CFR Part 26](/current/title-27/part-26)—Liquors and Articles From Puerto Rico and the Virgin Islands
[27 CFR Part 27](/current/title-27/part-27)—Importation of Distilled Spirits, Wines, and Beer
[27 CFR Part 28](/current/title-27/part-28)—Exportation of Alcohol
[27 CFR Part 71](/current/title-27/part-71)—Rules of Practice in Permit Proceedings
\[T.D. ATF-483, [67 FR 62857](https://www.federalregister.gov/citation/67-FR-62857), Oct. 8, 2002, as amended by T.D. TTB-8, [69 FR 3829](https://www.federalregister.gov/citation/69-FR-3829), Jan. 27, 2004; T.D. TTB-91, [76 FR 5476](https://www.federalregister.gov/citation/76-FR-5476), Feb. 1, 2011]
#### § 4.6 Wines covered by this part.
The regulations in this part apply to wine containing not less than 7 percent and not more than 24 percent alcohol by volume.
\[T.D. TTB-158, [85 FR 18721](https://www.federalregister.gov/citation/85-FR-18721), Apr. 2, 2020]
#### § 4.7 Products produced as wine that are not covered by this part.
Certain wine products do not fall within the definition of a “wine” under the Federal Alcohol Administration Act (FAA Act) and are thus not subject to this part. They may, however, also be subject to other labeling requirements. See [27 CFR parts 24](/current/title-27/part-24) and [27](/current/title-27/part-27) for labeling requirements applicable to “wine” as defined by the IRC. See [27 CFR part 16](/current/title-27/part-16) for health warning statement requirements applicable to “alcoholic beverages” as defined by the Alcoholic Beverage Labeling Act.
(a) *Products containing less than 7 percent alcohol by volume.* The regulations in this part do not cover products that would otherwise meet the definition of wine except that they contain less than 7 percent alcohol by volume. Bottlers and importers of alcohol beverages that do not fall within the definition of malt beverages, wine, or distilled spirits under the FAA Act should refer to the applicable labeling regulations for foods issued by the U.S. Food and Drug Administration. See [21 CFR part 101](/current/title-21/part-101).
(b) *Products containing more than 24 percent alcohol by volume.* Products that would otherwise meet the definition of wine except that they contain more than 24 percent alcohol by volume are classified as distilled spirits and must be labeled in accordance with [part 5 of this chapter](/current/title-27/part-5).
\[T.D. TTB-158, [85 FR 18721](https://www.federalregister.gov/citation/85-FR-18721), Apr. 2, 2020, as amended by T.D. TTB-196, [89 FR 87935](https://www.federalregister.gov/citation/89-FR-87935), Nov. 6, 2024]
## Subpart B—Definitions
#### § 4.10 Meaning of terms.
As used in this part, unless the context otherwise requires, terms shall have the meaning ascribed in this part.
*Added brandy.* Brandy or wine spirits for use in fortification of wine as permitted by internal revenue law.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Advertisement.* See [§ 4.61](/current/title-27/section-4.61) for meaning of term as used in [subpart G of this part](/current/title-27/part-4/subpart-G).
*Alcohol.* Ethyl alcohol distilled at or above 190° proof.
*American.* The several States, the District of Columbia, and Puerto Rico; “State” includes the District of Columbia and Puerto Rico.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.4, Delegation of the Administrator's Authorities in [27 CFR Part 4](/current/title-27/part-4), Labeling and Advertising of Wine.
*Bottler.* Any person who places wine in containers of four liters or less. (See meaning for “containers” and “packer”.)
*Brand label.* The label carrying, in the usual distinctive design, the brand name of the wine.
*Certificate of label approval (COLA).* A certificate issued on form TTB F 5100.31 that authorizes the bottling of wine, distilled spirits, or malt beverages, or the removal of bottled wine, distilled spirits, or malt beverages from customs custody for introduction into commerce, as long as the product bears labels identical to the labels appearing on the face of the certificate, or labels with changes authorized by TTB on the certificate or otherwise (such as through the issuance of public guidance available on the TTB website at *[www.ttb.gov](http://www.ttb.gov)*).
*Container.* Any bottle, barrel, cask, or other closed receptacle irrespective of size or of the material from which made for use for the sale of wine at retail. (See meaning for “bottler” and “packer”.)
*Customs officer.* An officer of U.S. Customs and Border Protection (CBP) or any agent or other person authorized by law to perform the duties of such an officer.
*Gallon.* A U.S. gallon of 231 cubic inches of alcoholic beverages at 60 °F.
*Interstate or foreign commerce.* Commerce between any State and any place outside thereof, or commerce within any Territory or the District of Columbia, or between points within the same State but through any place outside thereof.
*Liter or litre.*
(a) A metric unit of capacity equal to 1,000 cubic centimeters and equivalent to 33.814 U.S. fluid ounces. For purposes of this part, a liter is subdivided into 1,000 milliliters (ml).
(b) For purposes of regulation, one liter of wine is defined as that quantity (mass) of wine occupying a one-liter volume at 20 °Celsius (68 °F).
*Packer.* Any person who places wine in containers in excess of four liters. (See meaning for “container” and “bottler”.)
*Percent or percentage.* Percent by volume.
*Permittee.* Any person holding a basic permit under the Federal Alcohol Administration Act.
*Person.* Any individual, partnership, joint-stock company, business trust, association, corporation, or other form of business enterprise, including a receiver, trustee, or liquidating agent, and including an officer or employee of any agency of a State or political subdivision thereof.
*Pure condensed must.* The dehydrated juice or must of sound, ripe grapes, or other fruit or agricultural products, concentrated to not more than 80° (Balling), the composition thereof remaining unaltered except for removal of water.
*Restored pure condensed must.* Pure condensed must to which has been added an amount of water not exceeding the amount removed in the dehydration process.
*Sugar.* Pure cane, beet, or dextrose sugar containing, respectively, not less than 95 percent of actual sugar calculated on a dry basis.
*Total solids.* The degrees Brix of the dealcoholized wine restored to its original volume.
*Trade buyer.* Any person who is a wholesaler or retailer.
*United States.* The several States, the District of Columbia, and Puerto Rico; the term “State” includes the District of Columbia and Puerto Rico.
*Use of other terms.* Any other term defined in the Federal Alcohol Administration Act and used in this part shall have the same meaning assigned to it by the Act.
*Wine.*
(1) Wine as defined in section 610 and section 617 of the Revenue Act of 1918 ([26 U.S.C. 5381-5392](https://www.govinfo.gov/link/uscode/26/5381)), only if for nonindustrial use and containing not less than 7 percent and not more than 24 percent of alcohol by volume; and
(2) Other alcoholic beverages not so defined, but made in the manner of wine, including sparkling and carbonated wine, wine made from condensed grape must, wine made from other agricultural products than the juice of sound, ripe grapes, imitation wine, compounds sold as wine, vermouth, cider, perry, and sake, only if for nonindustrial use and containing not less than 7 percent and not more than 24 percent of alcohol by volume.
\[T.D. ATF-48, [43 FR 13532](https://www.federalregister.gov/citation/43-FR-13532), Mar. 31, 1978, as amended by T.D. ATF-49, [43 FR 19848](https://www.federalregister.gov/citation/43-FR-19848), May 9, 1978; T.D. ATF-53, [43 FR 37675](https://www.federalregister.gov/citation/43-FR-37675), Aug. 23, 1978; [44 FR 55838](https://www.federalregister.gov/citation/44-FR-55838), Sept. 29, 1979; T.D. ATF-66, [45 FR 40544](https://www.federalregister.gov/citation/45-FR-40544), June 13, 1980; T.D. ATF-94, [46 FR 55095](https://www.federalregister.gov/citation/46-FR-55095), Nov. 6, 1981; T.D. ATF-299, [55 FR 24988](https://www.federalregister.gov/citation/55-FR-24988), June 19, 1990; T.D. ATF-425, [65 FR 11891](https://www.federalregister.gov/citation/65-FR-11891), Mar. 7, 2000; T.D. TTB-44, [71 FR 16921](https://www.federalregister.gov/citation/71-FR-16921), Apr. 4, 2006; T.D. TTB-91, [76 FR 5476](https://www.federalregister.gov/citation/76-FR-5476), Feb. 1, 2011; T.D. TTB-145, [81 FR 94196](https://www.federalregister.gov/citation/81-FR-94196), Dec. 22, 2016; T.D. TTB-158, [85 FR 18721](https://www.federalregister.gov/citation/85-FR-18721), Apr. 2, 2020; T.D. TTB-196, [89 FR 87935](https://www.federalregister.gov/citation/89-FR-87935), Nov. 6, 2024]
## Subpart C—Standards of Identity for Wine
#### § 4.20 Application of standards.
The standards of identity for the several classes and types of wine set forth herein shall be applicable to all regulations and permits issued under the Federal Alcohol Administration Act. Whenever any term for which a standard of identity has been established herein is used in any such regulation or permit, such term shall have the meaning assigned to it by such standard of identity.
\[T.D. 6521, [25 FR 13835](https://www.federalregister.gov/citation/25-FR-13835), Dec. 29, 1960, as amended by T.D. TTB-196, [89 FR 87935](https://www.federalregister.gov/citation/89-FR-87935), Nov. 6, 2024]
#### § 4.21 The standards of identity.
Standards of identity for the several classes and types of wine set forth in this part shall be as follows:
(a) *Class 1; grape wine* —
(1) *Grape wine* is wine produced by the normal alcoholic fermentation of the juice of sound, ripe grapes (including restored or unrestored pure condensed grape must), with or without the addition, after fermentation, of pure condensed grape must and with or without added spirits of the type authorized for natural wine under [26 U.S.C. 5382](https://www.govinfo.gov/link/uscode/26/5382), but without other addition or abstraction except as may occur in cellar treatment of the type authorized for natural wine under [26 U.S.C. 5382](https://www.govinfo.gov/link/uscode/26/5382).
(2) Still grape wine may be ameliorated, or sweetened, before, during, or after fermentation, in a way that is consistent with the limits set forth in [26 U.S.C. 5383](https://www.govinfo.gov/link/uscode/26/5383) for natural grape wine.
(3) The maximum volatile acidity, calculated as acetic acid and exclusive of sulfur dioxide is 0.14 gram per 100 mL (20 degrees Celsius) for red wine and 0.12 gram per 100 mL (20 degrees Celsius) for other grape wine, provided that the maximum volatile acidity for wine produced from unameliorated juice of 28 or more degrees Brix is 0.17 gram per 100 mL for red wine and 0.15 gram per 100 mL for white wine.
(4) Grape wine deriving its characteristic color or lack of color from the presence or absence of the red coloring matter of the skins, juice, or pulp of grapes may be designated as “red wine,” “pink (or rose) wine,” “amber wine,” or “white wine” as the case may be. Any grape wine containing no added grape brandy or alcohol may be further designated as “natural.”
(5) *Table wine* is grape wine having an alcoholic content not in excess of 14 percent by volume. Such wine may also be designated as “light wine,” “red table wine,” “light white wine,” “sweet table wine,” etc., as the case may be.
(6) *Dessert wine* is grape wine having an alcoholic content in excess of 14 percent but not in excess of 24 percent by volume. Dessert wine having the taste, aroma and characteristics generally attributed to sherry and an alcoholic content, derived in part from added grape brandy or alcohol, of not less than 17 percent by volume, may be designated as “sherry”. Dessert wines having the taste, aroma and characteristics generally attributed to angelica, madeira, muscatel and port and an alcoholic content, derived in part from added grape brandy or alcohol, of not less than 18 percent by volume, may be designated as “angelica,” “madeira,” “muscatel,” or “port” respectively. Dessert wines having the taste, aroma, and characteristics generally attributed to any of the above products and an alcoholic content, derived in part from added grape brandy or alcohol, in excess of 14 percent by volume but, in the case of sherry, less than 17 percent, or, in other cases, less than 18 percent by volume, may be designated as “light sherry,” “light angelica,” “light madeira,” “light muscatel” or “light port,” respectively.
(b) *Class 2; sparkling grape wine.*
(1) *Sparkling grape wine* (including “sparkling wine,” “sparkling red wine” and “sparkling white wine”) is grape wine made effervescent with carbon dioxide resulting solely from the fermentation of the wine within a closed container, tank or bottle.
(2) *Champagne* is a type of sparkling light wine which derives its effervescence solely from the secondary fermentation of the wine within glass containers of not greater than one gallon capacity, and which possesses the taste, aroma, and other characteristics attributed to champagne as made in the champagne district of France.
(3)
(i) A sparkling light wine having the taste, aroma, and characteristics generally attributed to champagne but not otherwise conforming to the standard for “champagne” may, in addition to but not in lieu of the class designation “sparkling wine,” be further designated as:
(A) “Champagne style;” or
(B) “Champagne type;” or
(C) “American (or New York State, Napa Valley, etc.) champagne,” along with one of the following terms: “Bulk process,” “fermented outside the bottle,” “secondary fermentation outside the bottle,” “secondary fermentation before bottling,” “not fermented in the bottle,” or “not bottle fermented.” The term “charmat method” or “charmat process” may be used as additional information.
(ii) Labels shall be so designed that all the words in such further designation are readily legible under ordinary conditions and are on a contrasting background. In the case of [paragraph (b)(3)(i)(C)](/current/title-27/section-4.21#p-4.21\(b\)\(3\)\(i\)\(C\)) of this section, TTB will consider whether the label as a whole provides the consumer with adequate information about the method of production and origin of the wine. TTB will evaluate each label for legibility and clarity, based on such factors as type size and style for all components of the further designation and the optional term “charmat method” or “charmat process,” as well as the contrast between the lettering and its background, and the placement of information on the label.
(iii) Notwithstanding the provisions of [paragraphs (b)(3)(i)(A)](/current/title-27/section-4.21#p-4.21\(b\)\(3\)\(i\)\(A\)), [(B)](/current/title-27/section-4.21#p-4.21\(b\)\(3\)\(i\)\(B\)) and [(C)](/current/title-27/section-4.21#p-4.21\(b\)\(3\)\(i\)\(C\)) of this section, the appropriate TTB officer may authorize the use of a term on sparkling wine labels, as an alternative to those terms authorized in [paragraph (b)(3)(i)](/current/title-27/section-4.21#p-4.21\(b\)\(3\)\(i\)) of this section, but not in lieu of the required class designation “sparkling wine,” upon a finding that such term adequately informs the consumer about the method of production of the sparkling wine.
(4) *Crackling wine, petillant wine, frizzante wine* (including cremant, perlant, reciotto, and other similar wine) is sparkling light wine normally less effervescent than champagne or other similar sparkling wine, but containing sufficient carbon dioxide in solution to produce, upon pouring under normal conditions, after the disappearance of air bubbles, a slow and steady effervescence evidenced by the formation of gas bubbles flowing through the wine. Crackling wine which derives its effervescence from secondary fermentation in containers greater than 1-gallon capacity shall be designated “crackling wine—bulk process,” and the words “bulk process” shall appear in lettering of substantially the same size as the words “crackling wine.”
(c) *Class 3; carbonated grape wine. “Carbonated grape wine”* (including *“carbonated wine,” “carbonated red wine,”* and *“carbonated white wine”*) is grape wine made effervescent with carbon dioxide other than that resulting solely from the secondary fermentation of the wine within a closed container, tank or bottle.
(d) \[Reserved]
(e) *Class 5; fruit wine.*
(1) Fruit wine is wine produced by the normal alcoholic fermentation of the juice of sound, ripe fruit (including restored or unrestored pure condensed fruit must) other than grapes, with or without the addition, after fermentation, of pure condensed fruit must and, with or without added spirits of the type authorized for natural wine under [26 U.S.C. 5382](https://www.govinfo.gov/link/uscode/26/5382), but without other addition or abstraction except as may occur in cellar treatment of the type authorized for natural wine under [26 U.S.C. 5382](https://www.govinfo.gov/link/uscode/26/5382).
(2) Fruit wine may be ameliorated, or sweetened, before, during, or after fermentation, in a way that is consistent with the limits set forth in [26 U.S.C. 5384](https://www.govinfo.gov/link/uscode/26/5384) for natural fruit wine.
(3) The maximum volatile acidity, calculated as acetic acid and exclusive of sulfur dioxide, shall not be, for fruit wine that does not contain added brandy or wine spirits, more than 0.14 gram, and for other fruit wine, more than 0.12 gram, per 100 milliliters (20 degrees Celsius).
(4) Any fruit wine containing no added grape brandy or alcohol may be further designated as “natural.”
(5) *Berry wine* is fruit wine produced from berries.
(6) *Fruit table wine* or *berry table wine* is fruit or berry wine having an alcoholic content not in excess of 14 percent by volume. Such wine may also be designated “light fruit wine,” or “light berry wine.”
(7) *Fruit dessert wine* or *berry dessert wine* is fruit or berry wine having an alcoholic content in excess of 14 percent but not in excess of 24 percent by volume.
(8) Fruit wine derived wholly (except for sugar, water, or added alcohol) from one kind of fruit shall be designated by the word “wine” qualified by the name of such fruit, *e.g.,* “peach wine,” “blackberry wine,” “orange wine.” Fruit wine not derived wholly from one kind of fruit shall be designated as “fruit wine” or “berry wine,” as the case may be, qualified by a truthful and adequate statement of composition appearing in direct conjunction therewith. If the fruit wine is derived wholly (except for sugar, water, or added alcohol) from more than one citrus fruit, the designation “citrus wine” or “citrus fruit wine” may, but is not required to, be used instead of “fruit wine,” and the designation must also be qualified by a truthful and adequate statement of composition appearing in direct conjunction therewith. Fruit wines which are derived wholly (except for sugar, water, or added alcohol) from apples or pears may be designated “cider” and “perry,” respectively, and shall be so designated if lacking in vinous taste, aroma, and characteristics. Fruit wine rendered effervescent by carbon dioxide resulting solely from the secondary fermentation of the wine within a closed container, tank, or bottle shall be further designated as “sparkling”; and fruit wine rendered effervescent by carbon dioxide otherwise derived shall be further designated as “carbonated.”
(f) *Class 6; wine from other agricultural products.*
(1)
(i) Wine of this class is wine (other than grape wine, citrus wine, or fruit wine) made by the normal alcoholic fermentation of sound fermentable agricultural products, either fresh or dried, or of the restored or unrestored pure condensed must thereof, with the addition before or during fermentation of a volume of water not greater than the minimum necessary to correct natural moisture deficiencies in such products, with or without the addition, after fermentation, of pure condensed must, and with or without added alcohol or such other spirits as will not alter the character of the product, but without other addition or abstraction except as may occur in cellar treatment: *Provided,* That a domestic product may be ameliorated or sweetened in accordance with part 24, of this chapter, and any product other than domestic may be ameliorated before, during, or after fermentation by adding, separately or in combination, dry sugar or such an amount of sugar and water solution as will not increase the volume of the resulting product more than 35 percent, but in no event shall any product so ameliorated have an alcoholic content, derived by fermentation of more than 14 percent by volume, or a natural acid content, if water has been added, of less than 5 parts per thousand, or a total solids content of more than 22 grams per 100 cubic centimeters.
(ii) The maximum volatile acidity, calculated as acetic acid and exclusive of sulfur dioxide, shall not be, for natural wine of this class, more than 0.14 gram, and for other wine of this class, more than 0.12 gram, per 100 milliliters (20 °C.).
(iii) Wine of this class containing no added alcohol or other spirits may be further designated as “natural”.
(2) *Table wine* of this class is wine having an alcoholic content not in excess of 14 percent by volume. Such wine may also be designated as “light”.
(3) *Dessert wine* of this class is wine having an alcoholic content in excess of 14 percent but not in excess of 24 percent by volume.
(4) *Raisin wine* is wine of this class made from dried grapes.
(5) *Sake* is wine of this class produced from rice in accordance with the commonly accepted method of manufacture of such product.
(6) Wine of this class derived wholly (except for sugar, water, or added alcohol) from one kind of agricultural product shall except in the case of “sake,” be designated by the word “wine” qualified by the name of such agricultural product, e.g., “honey wine,” “raisin wine,” “dried blackberry wine.” Wine of this class not derived wholly from one kind of agricultural product shall be designated as “wine” qualified by a truthful and adequate statement of composition appearing in direct conjunction therewith. Wine of this class rendered effervescent by carbon dioxide resulting solely from the secondary fermentation of wine within a closed container, tank, or bottle shall be further designated as “sparkling”; and wine of this class rendered effervescent by carbon dioxide otherwise derived shall be further designated as “carbonated.”
(g) *Class 7; aperitif wine.*
(1) *Aperitif wine* is wine having an alcoholic content of not less than 15 percent by volume, compounded from grape wine containing added brandy or alcohol, flavored with herbs and other natural aromatic flavoring materials, with or without the addition of caramel for coloring purposes, and possessing the taste, aroma, and characteristics generally attributed to aperitif wine and shall be so designated unless designated as “vermouth” under [paragraph (g)(2)](/current/title-27/section-4.21#p-4.21\(g\)\(2\)) of this section.
(2) *Vermouth* is a type of aperitif wine compounded from grape wine, having the taste, aroma, and characteristics generally attributed to vermouth, and shall be so designated.
(h) *Class 8; imitation and substandard or other than standard wine.*
(1) “Imitation wine” shall bear as a part of its designation the word “imitation,” and shall include:
(i) Any wine containing synthetic materials.
(ii) Any wine made from a mixture of water with residue remaining after thorough pressing of grapes, fruit, or other agricultural products.
(iii) Any class or type of wine the taste, aroma, color, or other characteristics of which have been acquired in whole or in part, by treatment with methods or materials of any kind (except as permitted in [§ 4.22(c)(6)](/current/title-27/section-4.22#p-4.22\(c\)\(6\))), if the taste, aroma, color, or other characteristics of normal wines of such class or type are acquired without such treatment.
(iv) Any wine made from must concentrated at any time to more than 80° (Balling).
(2) “Substandard wine” or “other than standard wine” shall bear as a part of its designation the words “substandard” or “other than standard,” and shall include:
(i) Any wine having a volatile acidity in excess of the maximum prescribed therefor in [§§ 4.20 to 4.25](/current/title-27/section-4.20).
(ii) Any wine for which no maximum volatile acidity is prescribed in [§§ 4.20 to 4.25](/current/title-27/section-4.20), inclusive, having a volatile acidity, calculated as acetic acid and exclusive of sulfur dioxide, in excess of 0.14 gram per 100 milliliters (20 °C.).
(iii) Any wine for which a standard of identity is prescribed in this [§§ 4.20 to 4.25](/current/title-27/section-4.20), inclusive, which, through disease, decomposition, or otherwise, fails to have the composition, color, and clean vinous taste and aroma of normal wines conforming to such standard.
(iv) Any “grape wine” “citrus wine,” “fruit wine,” or “wine from other agricultural products” to which has been added sugar and water solution in an amount which is in excess of the limitations prescribed in the standards of identity for these products, unless, in the case of “citrus wine,” “fruit wine” and “wine from other agricultural products” the normal acidity of the material from which such wine is produced is 20 parts or more per thousand and the volume of the resulting product has not been increased more than 60 percent by such addition.
(i) *Class 9; retsina wine.* “Retsina wine” is grape table wine fermented or flavored with resin.
Cross Reference:
For regulations relating to the use of spirits in wine, see [part 24 of this chapter](/current/title-27/part-24).
\[T.D. 6521, [25 FR 13835](https://www.federalregister.gov/citation/25-FR-13835), Dec. 29, 1960]]
#### Editorial Note:
For Federal Register citations affecting [§ 4.21](/current/title-27/section-4.21), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
#### § 4.22 Blends, cellar treatment, alteration of class or type.
(a) If the class or type of any wine shall be altered, and if the product as so altered does not fall within any other class or type either specified in [§§ 4.20](/current/title-27/section-4.20) through [4.25](/current/title-27/section-4.25) or known to the trade, then such wine shall, unless otherwise specified in this section, be designated with a truthful and adequate statement of composition in accordance with [§ 4.34](/current/title-27/section-4.34).
(b) Alteration of class or type shall be deemed to result from any of the following occurring before, during, or after production.
(1) Treatment of any class or type of wine with substances foreign to such wine which remain therein: *Provided,* That the presence in finished wine of not more than 350 parts per million of total sulfur dioxide, or sulphites expressed as sulfur dioxide, shall not be precluded under this paragraph.
(2) Treatment of any class or type of wine with substances not foreign to such wine but which remain therein in larger quantities than are naturally and normally present in other wines of the same class or type not so treated.
(3) Treatment of any class or type of wine with methods or materials of any kind to such an extent or in such manner as to affect the basic composition of the wine so treated by altering any of its characteristic elements.
(4) Blending of wine of one class with wine of another class or the blending of wines of different types within the same class.
(5) Treatment of any class or type of wine for which a standard of identity is prescribed in this subpart with sugar or water in excess of the quantities specifically authorized by such standards:
*Provided, That* the class or type thereof shall not be deemed to be altered:
(i) Where such wine (other than grape wine) is derived from fruit or other agricultural products having a high normal acidity, if the total solids content is not more than 22 grams per 100 cubic centimeters and the content of natural acid is not less than 7.69 grams per liter, and
(ii) Where such wine is derived exclusively from fruit or other agricultural products the normal acidity of which is 20 parts or more per thousand, if the volume of the resulting product has been increased not more than 60 percent by the addition of sugar and water solution for the sole purpose of correcting natural deficiencies due to such acidity and (except in the case of such wine when produced from fruit or berries other than grapes) there is stated as part of the class and type designation the phrase “Made with over 35 percent sugar solution.”
(c) Nothing in this section shall preclude the treatment of wine of any class or type in the manner hereinafter specified, provided such treatment does not result in the alteration of the class or type of the wine under the provisions of [paragraph (b)](/current/title-27/section-4.22#p-4.22\(b\)) of this section.
(1) Treatment with filtering equipment, and with fining or sterilizing agents.
(2) Treatment with pasteurization as necessary to perfect the wines to commercial standards in accordance with acceptable cellar practice but only in such a manner and to such an extent as not to change the basic composition of the wine nor to eliminate any of its characteristic elements.
(3) Treatment with refrigeration as necessary to perfect the wine to commercial standards in accordance with acceptable cellar practice but only in such a manner and to such an extent as not to change the basic composition of the wine nor to eliminate any of its characteristic elements.
(4) Treatment with methods and materials to the minimum extent necessary to correct cloudiness, precipitation, or abnormal color, odor, or flavor developing in wine.
(5) Treatment with constituents naturally present in the kind of fruit or other agricultural product from which the wine is produced for the purpose of correcting deficiencies of these constituents, but only to the extent that such constituents would be present in normal wines of the same class or type not so treated.
(6) Treatment of any class or type of wine involving the use of volatile fruit-flavor concentrates in the manner provided in section 5382 of the Internal Revenue Code.
(7) Notwithstanding the provisions of [§ 4.21(b) (1)](/current/title-27/section-4.21#p-4.21\(b\)\(1\)), [(2)](/current/title-27/section-4.21#p-4.21\(b\)\(2\)) and [(4)](/current/title-27/section-4.21#p-4.21\(b\)\(4\)), [(c)](/current/title-27/section-4.21#p-4.21\(c\)), [(d)(4)](/current/title-27/section-4.21#p-4.21\(d\)\(4\)), [(e)(5)](/current/title-27/section-4.21#p-4.21\(e\)\(5\)), and [(f)(6)](/current/title-27/section-4.21#p-4.21\(f\)\(6\)) carbon dioxide may be used to maintain counterpressure during the transfer of finished sparkling wines from
(i) bulk processing tanks to bottles, or
(ii) bottle to bottle: *Provided,* That the carbon dioxide content of the wine shall not be increased by more than 0.009 gm. per 100 ml. during the transfer operation.
\[T.D. 6521, [25 FR 13835](https://www.federalregister.gov/citation/25-FR-13835), Dec. 29, 1960, as amended by T.D. 6776, [29 FR 16985](https://www.federalregister.gov/citation/29-FR-16985), Dec. 11, 1964; T.D. 7185, [37 FR 7976](https://www.federalregister.gov/citation/37-FR-7976), Apr. 22, 1972; T.D. ATF-403, [64 FR 50253](https://www.federalregister.gov/citation/64-FR-50253), Sept. 16, 1999; T.D. ATF-458, [66 FR 37578](https://www.federalregister.gov/citation/66-FR-37578), July 19, 2001; T.D. ATF-953, [68 FR 39455](https://www.federalregister.gov/citation/68-FR-39455), July 2, 2003]
#### § 4.23 Varietal (grape type) labeling.
(a) *General.* The names of one or more grape varieties may be used as the type designation of a grape wine only if the wine is also labeled with an appellation of origin as defined in [§ 4.25](/current/title-27/section-4.25).
(b) *One variety.* Except as provided in [paragraph (c)](/current/title-27/section-4.23#p-4.23\(c\)) of this section, the name of a single grape variety may be used as the type designation if not less than 75 percent of the wine is derived from grapes of that variety, the entire 75 percent of which was grown in the labeled appellation of origin area.
(c) *Exceptions.*
(1) Wine made from any *Vitis labrusca* variety (exclusive of hybrids with *Vitis labrusca* parentage) may be labeled with the variety name if:
(i) Not less than 51 percent of the wine is derived from grapes of the named variety;
(ii) The statement “contains not less than 51 percent (name of variety)” is shown on the brand label, back label, or a separate strip label, (except that this statement need not appear if 75 percent or more of the wine is derived from grapes of the named variety); and
(iii) The entire qualifying percentage of the named variety was grown in the labeled appellation of origin area.
(2) Wine made from any variety of any species found by the appropriate TTB officer upon appropriate application to be too strongly flavored at 75 percent minimum varietal content may be labeled with the varietal name if:
(i) Not less than 51 percent of the wine is derived from grapes of that variety;
(ii) The statement “contains not less than 51 percent (name of variety)” is shown on the brand label, back label, or a separate strip label (except that this statement need not appear if 75 percent or more of the wine is derived from grapes of the named variety); and
(iii) The entire qualifying percentage of the named variety was grown in the labeled appellation of origin area.
(d) *Two or more varieties.* The names of two or more grape varieties may be used as the type designation if:
(1) All of the grapes used to make the wine are of the labeled varieties;
(2) The percentage of the wine derived from each variety is shown on the label (with a tolerance of plus or minus 2 percent); and
(3)
(i) If labeled with a multicounty appellation of origin, the percentage of the wine derived from each variety from each county is shown on the label; or
(ii) If labeled with a multistate appellation of origin, the percentage of the wine derived from each variety from each state is shown on the label.
(e) *List of approved variety names.* Effective February 7, 1996, the name of a grape variety may be used as a type designation for an American wine only if that name has been approved by the Administrator. A list of approved grape variety names appears in [subpart J of this part](/current/title-27/part-4/subpart-J).
\[T.D. ATF-370, [61 FR 538](https://www.federalregister.gov/citation/61-FR-538), Jan. 8, 1996, as amended by T.D. TTB-91, [76 FR 5476](https://www.federalregister.gov/citation/76-FR-5476), Feb. 1, 2011]
#### § 4.24 Generic, semi-generic, and non-generic designations of geographic significance.
(a)
(1) A name of geographic significance which is also the designation of a class or type of wine, shall be deemed to have become generic only if so found by the Administrator.
(2) Examples of generic names, originally having geographic significance, which are designations for a class or type of wine are: Vermouth, Sake.
(b)
(1) A name of geographic significance, which is also the designation of a class or type of wine, shall be deemed to have become semi-generic only if so found by the Administrator. Semi-generic designations may be used to designate wines of an origin other than that indicated by such name only if there appears in direct conjunction therewith an appropriate appellation of origin disclosing the true place of origin of the wine, and if the wine so designated conforms to the standard of identity, if any, for such wine contained in the regulations in this part or, if there be no such standard, to the trade understanding of such class or type. See [§ 24.257(c) of this chapter](/current/title-27/section-24.257#p-24.257\(c\)) for exceptions to the Administrator's authority to remove names from [paragraph (b)(2)](/current/title-27/section-4.24#p-4.24\(b\)\(2\)) of this section.
(2) Examples of semi-generic names which are also type designations for grape wines are Angelica, Burgundy, Claret, Chablis, Champagne, Chianti, Malaga, Marsala, Madeira, Moselle, Port, Rhine Wine (syn. Hock), Sauterne, Haut Sauterne, Sherry, Tokay.
(c)
(1) A name of geographic significance, which has not been found by the Administrator to be generic or semi-generic may be used only to designate wines of the origin indicated by such name, but such name shall not be deemed to be the distinctive designation of a wine unless the Administrator finds that it is known to the consumer and to the trade as the designation of a specific wine of a particular place or region, distinguishable from all other wines.
(2) Examples of nongeneric names which are not distinctive designations of specific grape wines are: American, California, Lake Erie, Napa Valley, New York State, French, Spanish. Additional examples of foreign nongeneric names are listed in [subpart C of part 12 of this chapter](/current/title-27/part-12/subpart-C).
(3) Examples of nongeneric names which are also distinctive designations of specific grape wines are: Bordeaux Blanc, Bordeaux Rouge, Graves, Medoc, Saint-Julien, Chateau Yquem, Chateau Margaux, Chateau Lafite, Pommard, Chambertin, Montrachet, Rhone, Liebfraumilch, Rudesheimer, Forster, Deidesheimer, Schloss Johannisberger, Lagrima, and Lacryma Christi. A list of foreign distinctive designations, as determined by the Administrator, appears in [subpart D of part 12 of this chapter](/current/title-27/part-12/subpart-D).
\[T.D. 6521, [25 FR 13835](https://www.federalregister.gov/citation/25-FR-13835), Dec. 29, 1960, as amended by T.D. ATF-296, [55 FR 17967](https://www.federalregister.gov/citation/55-FR-17967), Apr. 30, 1990; T.D. ATF-398, [63 FR 44783](https://www.federalregister.gov/citation/63-FR-44783), Aug. 21, 1998; T.D. ATF-425, [65 FR 11890](https://www.federalregister.gov/citation/65-FR-11890), [11891](https://www.federalregister.gov/citation/65-FR-11891), Mar. 7, 2000]
#### § 4.25 Appellations of origin.
(a) *Definition* —
(1) *American wine.* An American appellation of origin is:
(i) The United States;
(ii) a State;
(iii) two or no more than three States which are all contiguous;
(iv) a county (which must be identified with the word “county”, in the same size of type, and in letters as conspicuous as the name of the county);
(v) two or no more than three counties in the same State; or
(vi) a viticultural area (as defined in [paragraph (e)](/current/title-27/section-4.25#p-4.25\(e\)) of this section).
(2) *Imported wine.* An appellation of origin for imported wine is:
(i) A country;
(ii) A state, province, territory, or similar political subdivision of a country equivalent to a state or county;
(iii) Two or no more than three states, provinces, territories, or similar political subdivisions of a country equivalent to a state which are all contiguous; or
(iv) A viticultural area (as defined in [paragraph (e)](/current/title-27/section-4.25#p-4.25\(e\)) of this section).
(b) *Qualification* —
(1) *American wine.* An American wine is entitled to an appellation of origin other than a multicounty or multistate appellation, or a viticultural area, if:
(i) At least 75 percent of the wine is derived from fruit or agricultural products grown in the appellation area indicated;
(ii) it has been fully finished (except for cellar treatment pursuant to [§ 4.22(c)](/current/title-27/section-4.22#p-4.22\(c\)), and blending which does not result in an alteration of class or type under [§ 4.22(b)](/current/title-27/section-4.22#p-4.22\(b\))) in the United States, if labeled “American”; or, if labeled with a State appellation, within the labeled State or an adjacent State; or if labeled with a county appellation, within the State in which the labeled county is located; and
(iii) it conforms to the laws and regulations of the named appellation area governing the composition, method of manufacture, and designation of wines made in such place.
(2) *Imported wine.* An imported wine is entitled to an appellation of origin other than a multistate appellation, or a viticultural area, if:
(i) At least 75 percent of the wine is derived from fruit or agricultural products grown in the area indicated by the appellation of origin; and
(ii) The wine conforms to the requirements of the foreign laws and regulations governing the composition, method of production, and designation of wines available for consumption within the country of origin.
(c) *Multicounty appellations.* An appellation of origin comprising two or no more than three counties in the same State may be used if all of the fruit or other agricultural products were grown in the counties indicated, and the percentage of the wine derived from fruit or other agricultural products grown in each county is shown on the label with a tolerance of plus or minus two percent.
(d) *Multistate appellations.*
(1) *American wine.* An appellation of origin comprising two or no more than three States which are all contiguous may be used, if:
(i) All of the fruit or other agricultural products were grown in the States indicated, and the percentage of the wine derived from fruit or other agricultural products grown in each State is shown on the label with a tolerance of plus or minus 2 percent;
(ii) The wine has been fully finished (except for cellar treatment pursuant to [§ 4.22(c)](/current/title-27/section-4.22#p-4.22\(c\)), and blending that does not result in an alteration of class or type under [§ 4.22(b)](/current/title-27/section-4.22#p-4.22\(b\))) in one of the labeled appellation States; and
(iii) The wine conforms to the laws and regulations governing the composition, method of manufacture, and designation of wines in all of the States listed in the appellation.
(2) *Imported wine.* An appellation of origin comprising two or no more than three states, provinces, territories, or similar political subdivisions of a country equivalent to a state which are all contiguous may be used if:
(i) All of the fruit or other agricultural products were grown in the states, provinces, territories, or similar political subdivisions of a country equivalent to a state indicated, and the percentage of the wine derived from fruit or other agricultural products grown in each state, province, territory, or political subdivision equivalent to a state is shown on the label with a tolerance of plus or minus 2 percent; and
(ii) The wine conforms to the requirements of the foreign laws and regulations governing the composition, method of production, and designation of wines available for consumption within the country of origin.
(e) *Viticultural area* —
(1) *Definition* —
(i) *American wine.* A delimited grape-growing region having distinguishing features as described in [part 9 of this chapter](/current/title-27/part-9) and a name and a delineated boundary as established in [part 9 of this chapter](/current/title-27/part-9).
(ii) *Imported wine.* A delimited place or region (other than an appellation defined in paragraph (a)(2)(i), (a)(2)(ii), or (a)(2)(iii)) the boundaries of which have been recognized and defined by the country of origin for use on labels of wine available for consumption within the country of origin.
(2) *Establishment of American viticultural areas.* A petition for the establishment of an American viticultural area may be made to the Administrator by any interested party, pursuant to part 9 and [§ 70.701(c) of this chapter](/current/title-27/section-70.701#p-70.701\(c\)). The petition must be made in written form and must contain the information specified in [§ 9.12 of this chapter](/current/title-27/section-9.12).
(3) *Requirements for use.* A wine may be labeled with a viticultural area appellation if:
(i) The appellation has been approved under [part 9 of this chapter](/current/title-27/part-9) or by the appropriate foreign government;
(ii) Not less than 85 percent of the wine is derived from grapes grown within the boundaries of the viticultural area;
(iii) In the case of foreign wine, it conforms to the requirements of the foreign laws and regulations governing the composition, method of production, and designation of wines available for consumption within the country of origin; and
(iv) In the case of American wine, it has been fully finished within the State, or one of the States, within which the labeled viticultural area is located (except for cellar treatment pursuant to [§ 4.22(c)](/current/title-27/section-4.22#p-4.22\(c\)), and blending which does not result in an alteration of class and type under [§ 4.22(b)](/current/title-27/section-4.22#p-4.22\(b\))).
(4) *Overlap viticultural area appellations.* An appellation of origin comprised of more than one viticultural area may be used in the case of overlapping viticultural areas if not less than 85 percent of the volume of the wine is derived from grapes grown in the overlapping area.
\[T.D. ATF-53, [43 FR 37675](https://www.federalregister.gov/citation/43-FR-37675), Aug. 23, 1978]
#### Editorial Note:
For Federal Register citations affecting [§ 4.25](/current/title-27/section-4.25), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
#### § 4.26 Estate bottled.
(a) *Conditions for use.* The term *Estate bottled* may be used by a bottling winery on a wine label only if the wine is labeled with a viticultural area appellation of origin and the bottling winery:
(1) Is located in the labeled viticultural area;
(2) grew all of the grapes used to make the wine on land owned or controlled by the winery within the boundaries of the labeled viticultural area;
(3) crushed the grapes, fermented the resulting must, and finished, aged, and bottled the wine in a continuous process (the wine at no time having left the premises of the bottling winery).
(b) *Special rule for cooperatives.* Grapes grown by members of a cooperative bottling winery are considered grown by the bottling winery.
(c) *Definition of “Controlled”.* For purposes of this section, *Controlled by* refers to property on which the bottling winery has the legal right to perform, and does perform, all of the acts common to viticulture under the terms of a lease or similar agreement of at least 3 years duration.
(d) *Use of other terms.* No term other than *Estate bottled* may be used on a label to indicate combined growing and bottling conditions.
\[T.D. ATF-53, [43 FR 37676](https://www.federalregister.gov/citation/43-FR-37676), Aug. 23, 1978, as amended by T.D. ATF-201, [50 FR 12533](https://www.federalregister.gov/citation/50-FR-12533), Mar. 29, 1985]
#### § 4.27 Vintage wine.
(a) *General.* Vintage wine is wine labeled with the year of harvest of the grapes and made in accordance with the standards prescribed in classes 1, 2, or 3 of [§ 4.21](/current/title-27/section-4.21). The wine must be labeled with an appellation of origin. The appellation must be shown in direct conjunction with the designation required by [§ 4.32(a)(2)](/current/title-27/section-4.32#p-4.32\(a\)\(2\)), in lettering substantially as conspicuous as that designation. In no event may the quantity of wine removed from the producing winery, under labels bearing a vintage date, exceed the volume of vintage wine produced in that winery during the year indicated by the vintage date. The following additional rules apply to vintage labeling:
(1) If an American or imported wine is labeled with a viticultural area appellation of origin (or its foreign equivalent), at least 95 percent of the wine must have been derived from grapes harvested in the labeled calendar year; or
(2) If an American or imported wine is labeled with an appellation of origin other than a viticultural area (or its foreign equivalent), at least 85 percent of the wine must have been derived from grapes harvested in the labeled calendar year.
(b) *American wine.* A permittee who produced and bottled or packed the wine, or a person other than the producer who repackaged the wine may show the year of vintage upon the label if the person possesses appropriate records from the producer substantiating the year of vintage and the appellation of origin; and if the wine is made in compliance with the provisions of [paragraph (a)](/current/title-27/section-4.27#p-4.27\(a\)) of this section.
(c) *Imported wine.* Imported wine may bear a vintage date if all of the following conditions are met:
(1) It is made in compliance with the provisions of [paragraph (a)](/current/title-27/section-4.27#p-4.27\(a\)) of this section; and
(2) The wine is of the vintage shown, the laws of the country of origin regulate the appearance of vintage dates upon the labels of wine produced for consumption within the country of origin, the wine has been produced in conformity with those laws, and the wine would be entitled to bear the vintage date if it had been sold within the country of origin. The importer of the wine imported in bottles or the domestic bottler of wine imported in bulk and bottled in the United States must be able to demonstrate, upon request by the appropriate TTB officer or a customs officer, that the wine is entitled to be labeled with the vintage date.
\[T.D. ATF-53, [43 FR 37676](https://www.federalregister.gov/citation/43-FR-37676), Aug. 23, 1978, as amended by T.D. ATF-195, [50 FR 763](https://www.federalregister.gov/citation/50-FR-763), Jan. 7, 1985; T.D. TTB-45, [71 FR 25752](https://www.federalregister.gov/citation/71-FR-25752), May 2, 2006; T.D. TTB-105, [77 FR 56541](https://www.federalregister.gov/citation/77-FR-56541), Sept. 13, 2012; T.D. TTB-145, [81 FR 94196](https://www.federalregister.gov/citation/81-FR-94196), Dec. 22, 2016; T.D. TTB-158, [85 FR 18722](https://www.federalregister.gov/citation/85-FR-18722), Apr. 2, 2020]
#### § 4.28 Type designations of varietal significance.
The following are type designations of varietal significance for American wine. These names may be used as type designations for American wines only if the wine is labeled with an appellation of origin as defined in [§ 4.25](/current/title-27/section-4.25).
(a) *Muscadine.* An American wine which derives at least 75 percent of its volume from *Muscadinia rotundifolia* grapes.
(b) *Muscatel.* An American wine which derives its predominant taste, aroma, characteristics and at least 75 percent of its volume from any Muscat grape source, and which meets the requirements of [§ 4.21(a)(3)](/current/title-27/section-4.21#p-4.21\(a\)\(3\)).
(c) *Muscat or Moscato.* An American wine which derives at least 75 percent of its volume from any Muscat grape source.
(d) *Scuppernong.* An American wine which derives at least 75 percent of its volume from bronze *Muscadinia rotundifolia* grapes.
(e)
(1) *Gamay Beaujolais.* An American wine which derives at least 75 percent of its volume from Pinot noir grapes, Valdiguié grapes, or a combination of both.
(2) For wines bottled on or after January 1, 1999, and prior to April 9, 2007, the name “Gamay Beaujolais” may be used as a type designation only if there appears in direct conjunction therewith, but on a separate line and separated by the required appellation of origin, the name(s) of the grape variety or varieties used to satisfy the requirements of [paragraph (e)(1)](/current/title-27/section-4.28#p-4.28\(e\)\(1\)) of this section. Where two varietal names are listed, they shall appear on the same line, in order of predominance. The appellation of origin shall appear either on a separate line between the name “Gamay Beaujolais” and the grape variety name(s) or on the same line as the grape variety name(s) in a manner that qualifies the grape variety name(s). The following statement shall also appear on the brand or back label: “Gamay Beaujolais is made from at least 75 percent Pinot noir and/or Valdiguié grapes.”
(3) The designation “Gamay Beaujolais” may not be used on labels of American wines bottled on or after April 9, 2007.
\[T.D. ATF-370, [61 FR 539](https://www.federalregister.gov/citation/61-FR-539), Jan. 8, 1996, as amended by T.D. ATF-388, [62 FR 16490](https://www.federalregister.gov/citation/62-FR-16490), Apr. 7, 1997; T.D. ATF-388a, [62 FR 33747](https://www.federalregister.gov/citation/62-FR-33747), June 23, 1997; T.D. TTB-91, [76 FR 5476](https://www.federalregister.gov/citation/76-FR-5476), Feb. 1, 2011]
## Subpart D—Labeling Requirements for Wine
#### § 4.30 General.
(a) *Application.* No person engaged in business as a producer, rectifier, blender, importer, or wholesaler, directly or indirectly or through an affiliate, shall sell or ship or deliver for sale or shipment, or otherwise introduce in interstate or foreign commerce, or receive therein, or remove from customs custody, any wine in containers unless such wine is packaged, and such packages are marked, branded, and labeled in conformity with this subpart. Wine domestically bottled or packed prior to Dec. 15, 1936, and imported wine entered in customs bond in containers prior to that date shall be regarded as being packaged, marked, branded and labeled in accordance with this subpart, if the labels on such wine
(1) bear all the mandatory label information required by [§ 4.32](/current/title-27/section-4.32), even though such information is not set forth in the manner and form as required by [§ 4.32](/current/title-27/section-4.32) and other sections of this title referred to therein, and
(2) bear no statements, designs, or devices which are false or misleading.
(b) *Alteration of labels.*
(1) It shall be unlawful for any person to alter, mutilate, destroy, obliterate or remove any mark, brand, or label upon wine held for sale in interstate or foreign commerce or after shipment therein, except as authorized by Federal law, or except as provided in [paragraph (b)(2)](/current/title-27/section-4.30#p-4.30\(b\)\(2\)) of this section: *Provided,* That the appropriate TTB officer may, upon written application, permit additional labeling or relabeling of wine for purposes of compliance with the requirements of this part or of State law.
(2) No application for permission to relabel wine need be made in any case where there is added to the container, after removal from customs custody or from the premises where bottled or packed, a label identifying the wholesale or retail distributor thereof, and containing no reference whatever to the characteristics of the product.
\[T.D. 6521, [25 FR 13835](https://www.federalregister.gov/citation/25-FR-13835), Dec. 29, 1960, as amended by T.D. ATF-425, [65 FR 11891](https://www.federalregister.gov/citation/65-FR-11891), Mar. 7, 2000; T.D. ATF-953, [68 FR 39455](https://www.federalregister.gov/citation/68-FR-39455), July 2, 2003]
Cross Reference:
For customs warehouses and control of merchandise therein, see [19 CFR part 19](/current/title-19/part-19).
#### § 4.32 Mandatory label information.
(a) There shall be stated on the brand label:
(1) Brand name, in accordance with [§ 4.33](/current/title-27/section-4.33).
(2) Class, type, or other designation, in accordance with [§ 4.34](/current/title-27/section-4.34).
(3) \[Reserved]
(4) On blends consisting of American and foreign wines, if any reference is made to the presence of foreign wine, the exact percentage by volume.
(b) There shall be stated on any label affixed to the container:
(1) Name and address, in accordance with [§ 4.35](/current/title-27/section-4.35).
(2) Net contents, in accordance with [§ 4.37](/current/title-27/section-4.37). If the net contents is a standard of fill other than an authorized metric standard of fill as prescribed in [§ 4.72](/current/title-27/section-4.72), the net contents statement shall appear on a label affixed to the front of the bottle.
(3) Alcohol content, in accordance with [§ 4.36](/current/title-27/section-4.36).
(c) There shall be stated on the brand label or on a back label a statement that the product contains FD\&C Yellow No. 5, where that coloring material is used in a product bottled on or after October 6, 1984.
(d) *Declaration of cochineal extract or carmine.* There shall be stated on a front label, back label, strip label, or neck label a statement that the product contains the color additive cochineal extract or the color additive carmine, prominently and conspicuously, using the respective common or usual name (“cochineal extract” or “carmine”), where either of the coloring materials is used in a product that is removed on or after April 16, 2013. (For example: “Contains Cochineal Extract” or “Contains Carmine” or, if applicable, “Contains Cochineal Extract and Carmine”).
(e) *Declaration of sulfites.* There shall be stated on a front label, back label, strip label or neck label, the statement “Contains sulfites” or “Contains (a) sulfiting agent(s)” or a statement identifying the specific sulfiting agent where sulfur dioxide or a sulfiting agent is detected at a level of 10 or more parts per million, measured as total sulfur dioxide. The provisions of this paragraph shall apply to:
(1) Any certificate of label approval issued on or after January 9, 1987;
(2) Any wine bottled on or after July 9, 1987, regardless of the date of issuance of the certificate of label approval; and,
(3) Any wine removed on or after January 9, 1988.
(Paragraph (e) approved by the Office of Management and Budget under Control Number 1512-0469)
\[T.D. 6521, [25 FR 13835](https://www.federalregister.gov/citation/25-FR-13835), Dec. 29, 1960]
#### Editorial Note:
For Federal Register citations affecting [§ 4.32](/current/title-27/section-4.32), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
#### § 4.32a Voluntary disclosure of major food allergens.
(a) *Definitions.* For purposes of this section the following terms have the meanings indicated.
(1) *Major food allergen.* *Major food allergen* means any of the following:
(i) Milk, egg, fish (for example, bass, flounder, or cod), Crustacean shellfish (for example, crab, lobster, or shrimp), tree nuts (for example, almonds, pecans, or walnuts), wheat, peanuts, and soybeans; or
(ii) A food ingredient that contains protein derived from a food specified in [paragraph (a)(1)(i)](/current/title-27/section-4.32a#p-4.32a\(a\)\(1\)\(i\)) of this section, except:
(A) Any highly refined oil derived from a food specified in [paragraph (a)(1)(i)](/current/title-27/section-4.32a#p-4.32a\(a\)\(1\)\(i\)) of this section and any ingredient derived from such highly refined oil; or
(B) A food ingredient that is exempt from major food allergen labeling requirements pursuant to a petition for exemption approved by the Food and Drug Administration (FDA) under [21 U.S.C. 343(w)(6)](https://www.govinfo.gov/link/uscode/21/343) or pursuant to a notice submitted to FDA under [21 U.S.C. 343(w)(7)](https://www.govinfo.gov/link/uscode/21/343), provided that the food ingredient meets the terms or conditions, if any, specified for that exemption.
(2) *Name of the food source from which each major food allergen is derived. Name of the food source from which each major food allergen is derived* means the name of the food as listed in [paragraph (a)(1)(i)](/current/title-27/section-4.32a#p-4.32a\(a\)\(1\)\(i\)) of this section, except that:
(i) In the case of a tree nut, it means the name of the specific type of nut (for example, almonds, pecans, or walnuts);
(ii) In the case of Crustacean shellfish, it means the name of the species of Crustacean shellfish (for example, crab, lobster, or shrimp); and
(iii) The names “egg” and “peanuts”, as well as the names of the different types of tree nuts, may be expressed in either the singular or plural form, and the term “soy”, soybean”, or “soya” may be used instead of “soybeans”.
(b) *Voluntary labeling standards.* Major food allergens (defined in [paragraph (a)(1)](/current/title-27/section-4.32a#p-4.32a\(a\)\(1\)) of this section) used in the production of a wine may, on a voluntary basis, be declared on any label affixed to the container. However, if any one major food allergen is voluntarily declared, all major food allergens used in production of the wine, including major food allergens used as fining or processing agents, must be declared, except when covered by a petition for exemption approved by the appropriate TTB officer under [§ 4.32b](/current/title-27/section-4.32b). The major food allergens declaration must consist of the word “Contains” followed by a colon and the name of the food source from which each major food allergen is derived (for example, “Contains: egg”).
(c) *Cross reference.* For mandatory labeling requirements applicable to wines containing FD\&C Yellow No. 5 and sulfites, see [§§ 4.32(c)](/current/title-27/section-4.32#p-4.32\(c\)) and [(e)](/current/title-27/section-4.32#p-4.32\(e\)).
\[T.D. TTB-53, [71 FR 42267](https://www.federalregister.gov/citation/71-FR-42267), July 26, 2006]
#### § 4.32b Petitions for exemption from major food allergen labeling.
(a) *Submission of petition.* Any person may petition the appropriate TTB officer to exempt a particular product or class of products from the labeling requirements of [§ 4.32a](/current/title-27/section-4.32a). The burden is on the petitioner to provide scientific evidence (including the analytical method used to produce the evidence) that demonstrates that the finished product or class of products, as derived by the method specified in the petition, either:
(1) Does not cause an allergic response that poses a risk to human health; or
(2) Does not contain allergenic protein derived from one of the foods identified in [§ 4.32a(a)(1)(i)](/current/title-27/section-4.32a#p-4.32a\(a\)\(1\)\(i\)), even though a major food allergen was used in production.
(b) *Decision on petition.* TTB will approve or deny a petition for exemption submitted under [paragraph (a)](/current/title-27/section-4.32b#p-4.32b\(a\)) of this section in writing within 180 days of receipt of the petition. If TTB does not provide a written response to the petitioner within that 180-day period, the petition will be deemed denied, unless an extension of time for decision is mutually agreed upon by the appropriate TTB officer and the petitioner. TTB may confer with the Food and Drug Administration (FDA) on petitions for exemption, as appropriate and as FDA resources permit. TTB may require the submission of product samples and other additional information in support of a petition; however, unless required by TTB, the submission of samples or additional information by the petitioner after submission of the petition will be treated as the withdrawal of the initial petition and the submission of a new petition. An approval or denial under this section will constitute a final agency action.
(c) *Resubmission of a petition.* After a petition for exemption is denied under this section, the petitioner may resubmit the petition along with supporting materials for reconsideration at any time. TTB will treat this submission as a new petition for purposes of the time frames for decision set forth in [paragraph (b)](/current/title-27/section-4.32b#p-4.32b\(b\)) of this section.
(d) *Availability of information* —
(1) *General.* TTB will promptly post to its public Web site, *[https://www.ttb.gov](https://www.ttb.gov),* all petitions received under this section as well as TTB's responses to those petitions. Any information submitted in support of the petition that is not posted to the TTB Web site will be available to the public pursuant to [5 U.S.C. 552](https://www.govinfo.gov/link/uscode/5/552), except where a request for confidential treatment is granted under [paragraph (d)(2)](/current/title-27/section-4.32b#p-4.32b\(d\)\(2\)) of this section.
(2) *Requests for confidential treatment of business information.* A person who provides trade secrets or other commercial or financial information in connection with a petition for exemption under this section may request that TTB give confidential treatment to that information. A failure to request confidential treatment at the time the information in question is submitted to TTB will constitute a waiver of confidential treatment. A request for confidential treatment of information under this section must conform to the following standards:
(i) The request must be in writing;
(ii) The request must clearly identify the information to be kept confidential;
(iii) The request must relate to information that constitutes trade secrets or other confidential commercial or financial information regarding the business transactions of an interested person, the disclosure of which would cause substantial harm to the competitive position of that person;
(iv) The request must set forth the reasons why the information should not be disclosed, including the reasons the disclosure of the information would prejudice the competitive position of the interested person; and
(v) The request must be supported by a signed statement by the interested person, or by an authorized officer or employee of that person, certifying that the information in question is a trade secret or other confidential commercial or financial information and that the information is not already in the public domain.
\[T.D. TTB-53, [71 FR 42267](https://www.federalregister.gov/citation/71-FR-42267), July 26, 2006, as amended by T.D. TTB-196, [89 FR 87935](https://www.federalregister.gov/citation/89-FR-87935), Nov. 6, 2024]
#### § 4.33 Brand names.
(a) *General.* The product shall bear a brand name, except that if not sold under a brand name, then the name of the person required to appear on the brand label shall be deemed a brand name for the purpose of this part.
(b) *Misleading brand names.* No label shall contain any brand name, which, standing alone, or in association with other printed or graphic matter creates any impression or inference as to the age, origin, identity, or other characteristics of the product unless the appropriate TTB officer finds that such brand name, either when qualified by the word “brand” or when not so qualified, conveys no erroneous impressions as to the age, origin, identity, or other characteristics of the product.
(c) *Trade name of foreign origin.* This section shall not operate to prohibit the use by any person of any trade name or brand of foreign origin not effectively registered in the United States Patent Office on August 29, 1935, which has been used by such person or their predecessors in the United States for a period of at least five years immediately preceding August 29, 1935: *Provided,* That if such trade name or brand is used, the designation of the product shall be qualified by the name of the locality in the United States in which produced, and such qualifications shall be in script, type, or printing as conspicuous as the trade name or brand.
\[T.D. 6521, [25 FR 13835](https://www.federalregister.gov/citation/25-FR-13835), Dec. 29, 1960, as amended by T.D. TTB-196, [89 FR 87935](https://www.federalregister.gov/citation/89-FR-87935), Nov. 6, 2024]
#### § 4.34 Class and type.
(a) The class of the wine shall be stated in conformity with [subpart C of this part](/current/title-27/part-4/subpart-C) if the wine is defined therein, except that “table” (“light”) and “dessert” wines need not be designated as such. In the case of still grape wine there may appear, in lieu of the class designation, any varietal (grape type) designation, type designation of varietal significance, semigeneric geographic type designation, or geographic distinctive designation, to which the wine may be entitled. In the case of champagne, or crackling wines, the type designation “champagne” or “crackling wine” (“petillant wine”, “frizzante wine”) may appear in lieu of the class designation “sparkling wine”. In the case of wine which has a total solids content of more than 17 grams per 100 cubic centimeters the words “extra sweet”, “specially sweetened”, “specially sweet” or “sweetened with excess sugar” shall be stated as a part of the class and type designation. The last of these quoted phrases shall appear where required by [part 24 of this chapter](/current/title-27/part-24), on wines sweetened with sugar in excess of the maximum quantities specified in such regulations. If the class of the wine is not defined in subpart C, a truthful and adequate statement of composition shall appear upon the brand label of the product in lieu of a class designation. In addition to the mandatory designation for the wine, there may be stated a distinctive or fanciful name, or a designation in accordance with trade understanding. The statement of composition will not include any reference to a varietal (grape type) designation, type designation of varietal significance, semi-generic geographic type designation, or geographic distinctive designation. All parts of the designation of the wine, whether mandatory or optional, shall be in direct conjunction and in lettering substantially of the same size and kind.
(b) An appellation of origin such as “American,” “New York,” “Napa Valley,” or “Chilean,” disclosing the true place of origin of the wine, shall appear in direct conjunction with and in lettering substantially as conspicuous as the class and type designation if:
(1) A varietal (grape type) designation is used under the provisions of [§ 4.23](/current/title-27/section-4.23);
(2) A type designation of varietal significance is used under the provisions of [§ 4.28](/current/title-27/section-4.28);
(3) A semi-generic type designation is employed as the class and type designation of the wine pursuant to [§ 4.24(b)](/current/title-27/section-4.24#p-4.24\(b\));
(4) A product name is qualified with the word “Brand” under the requirements of [§ 4.39 (j)](/current/title-27/section-4.39#p-4.39\(j\)); or
(5) The wine is labeled with the year of harvest of the grapes, and otherwise conforms with the provisions of [§ 4.27](/current/title-27/section-4.27).
\[T.D. ATF-53, [43 FR 37677](https://www.federalregister.gov/citation/43-FR-37677), Aug. 23, 1978; T.D. ATF-48, [44 FR 55839](https://www.federalregister.gov/citation/44-FR-55839), Sept. 28, 1979, as amended by T.D. ATF-195, [50 FR 763](https://www.federalregister.gov/citation/50-FR-763), Jan. 7, 1985; T.D. ATF-229, [51 FR 20482](https://www.federalregister.gov/citation/51-FR-20482), June 5, 1986; T.D. ATF-312, [56 FR 31077](https://www.federalregister.gov/citation/56-FR-31077), July 9, 1991; T.D. ATF-370, [61 FR 539](https://www.federalregister.gov/citation/61-FR-539), Jan. 8, 1996; T.D. ATF-431, [65 FR 59724](https://www.federalregister.gov/citation/65-FR-59724), Oct. 6, 2000; T.D. TTB-105, [77 FR 56541](https://www.federalregister.gov/citation/77-FR-56541), Sept. 13, 2012]
#### § 4.35 Name and address.
(a) *American wine* —
(1) *Mandatory statement.* A label on each container of American wine shall state either “bottled by” or “packed by” followed by the name of the bottler or packer and the address (in accordance with paragraph (c)) of the place where the wine was bottled or packed. Other words may also be stated in addition to the required words “bottled by” or “packed by” and the required name and address if the use of such words is in accordance with [paragraph (a)(2)](/current/title-27/section-4.35#p-4.35\(a\)\(2\)) of this section.
(2) *Optional statements.*
(i) In addition to the statement required by paragraph (a)(1), the label may also state the name and address of any other person for whom the wine was bottled or packed, immediately preceded by the words “bottled for” or “packed for” or “distributed by.”
(ii) The words defined in paragraphs (a)(2)(iii)-(a)(2)(vi) may be used, in accordance with the definitions given, in addition to the name and address statement required by paragraph (a)(1). Use of these words may be conjoined, using the word “and”, and with the words “bottled by” or “packed by” only if the same person performed the defined operation at the same address. More than one name is necessary if the defined operation was performed by a person other than the bottler or packer and more than one address statement is necessary if the defined operation was performed at a different address.
(iii) *Produced* or *Made* means that the named winery:
(A) Fermented not less than 75% of such wine at the stated address, or
(B) Changed the class or type of the wine by addition of alcohol, brandy, flavors, colors, or artificial carbonation at the stated address, or
(C) Produced sparkling wine by secondary fermentation at the stated address.
(iv) *Blended* means that the named winery mixed the wine with other wines of the same class and type at the stated address.
(v) *Cellared, Vinted* or *Prepared* means that the named winery, at the stated address, subjected the wine to cellar treatment in accordance with [§ 4.22(c)](/current/title-27/section-4.22#p-4.22\(c\)).
(b) *Imported wine* —
(1) *Mandatory statements.*
(i) A label on each container of imported wine shall state “imported by” or a similar appropriate phrase, followed immediately by the name of the importer, agent, sole distributor, or other person responsible for the importation, followed immediately by the address of the principal place of business in the United States of the named person.
(ii) If the wine was bottled or packed in the United States, the label shall also state one of the following:
(A) “Bottled by” or “packed by” followed by the name of the bottler or packer and the address (in accordance with paragraph (c)) of the place where the wine was bottled or packed; or
(B) If the wine was bottled or packed for the person responsible for the importation, the words “imported by and bottled (packed) in the United States for” (or a similar appropriate phrase) followed by the name and address of the principal place of business in the United States of the person responsible for the importation; or
(C) If the wine was bottled or packed by the person responsible for the importation, the words “imported and bottled (packed) by” followed by the name and address of the principal place of business in the United States of the person responsible for the importation.
(iii) If the wine was blended, bottled or packed in a foreign country other than the country of origin, and the label identifies the country of origin, the label shall state “blended by,” “bottled by,” or “packed by,” or other appropriate statement, followed by the name of the blender, bottler or packer and the place where the wine was blended, bottled or packed.
(2) *Optional statements.* In addition to the statements required by paragraph (b) (1), the label may also state the name and address of the principal place of business of the foreign producer. Other words, or their English-language equivalents, denoting winemaking operations may be used in accordance with the requirements of the country of origin, for wines sold within the country of origin.
(c) *Form of address.* The “place” stated shall be the post office address shown on the basic permit or other qualifying document of the premises at which the operations took place; and there shall be shown the address for each operation which is designated on the label. An example of such use would be “Produced at Gilroy, California, and bottled at San Mateo, California, by XYZ Winery,” except that the street address may be omitted. No additional places or addresses shall be stated for the same person unless:
(1) Such person is actively engaged in the conduct of an additional bona fide and actual alcoholic beverage business at such additional place or address, and
(2) The label also contains in direct conjunction therewith, appropriate descriptive material indicating the function occurring at such additional place or address in connection with the particular product.
(d) *Trade or operating names.* The trade or operating name of any person appearing upon any label shall be identical with a name appearing on the basic permit or other qualifying document.
(e) *Cross reference—country of origin statement.* For U.S. Customs and Border Protection (CBP) rules regarding country of origin marking requirements, see the CBP regulations at [19 CFR parts 102](/current/title-19/part-102) and [134](/current/title-19/part-134).
\[T.D. ATF-328, [57 FR 33114](https://www.federalregister.gov/citation/57-FR-33114), July 27, 1992; [57 FR 37591](https://www.federalregister.gov/citation/57-FR-37591), Aug. 19, 1992. Redesignated by T.D. ATF-953, [68 FR 39455](https://www.federalregister.gov/citation/68-FR-39455), July 2, 2003; T.D. TTB-158, [85 FR 18722](https://www.federalregister.gov/citation/85-FR-18722), Apr. 2, 2020]
#### § 4.36 Alcoholic content.
(a) Alcoholic content shall be stated in the case of wines containing more than 14 percent of alcohol by volume. In the case of wine containing 14 percent or less of alcohol by volume, the alcohol content may be stated, but need not be stated if the type designation “table” wine (or “light” wine) appears on the brand label as prescribed in [§ 4.32(a)(2)](/current/title-27/section-4.32#p-4.32\(a\)\(2\)). Any statement of alcoholic content shall be made as prescribed in [paragraph (b)](/current/title-27/section-4.36#p-4.36\(b\)) of this section.
(b) Alcoholic content shall be stated in terms of percentage of alcohol by volume, and not otherwise, as provided in either [paragraph (b)(1)](/current/title-27/section-4.36#p-4.36\(b\)\(1\)) or [(2)](/current/title-27/section-4.36#p-4.36\(b\)\(2\)) of this section:
(1) “Alcohol \_\_ % by volume,” or similar appropriate phrase; *Provided,* that if the word “alcohol” and/or “volume” are abbreviated, they shall be shown as “alc.” (alc) and/or “vol.” (vol), respectively. Except as provided in [paragraph (c)](/current/title-27/section-4.36#p-4.36\(c\)) of this section, a tolerance of 1 percent, in the case of wines containing more than 14 percent of alcohol by volume, and of 1.5 percent, in the case of wines containing 14 percent or less of alcohol by volume, will be permitted either above or below the stated percentage.
(2) “Alcohol \_\_ % to \_\_ % by volume,” or similar appropriate phrase; *Provided,* that if the word “alcohol” and/or “volume” are abbreviated, they shall be shown as “alc.” (alc) and/or “vol.” (vol), respectively. Except as provided in [paragraph (c)](/current/title-27/section-4.36#p-4.36\(c\)) of this section, a range of not more than 2 percent, in the case of wines containing more than 14 percent of alcohol by volume, and of not more than 3 percent, in the case of wines containing 14 percent or less of alcohol by volume, will be permitted between the minimum and maximum percentages stated, and no tolerances will be permitted either below such minimum or above such maximum.
(c) Regardless of the type of statement used and regardless of tolerances normally permitted in direct statements and ranges normally permitted in maximum and minimum statements, alcoholic content statements, whether required or optional, shall definitely and correctly indicate the class, type and taxable grade of the wine so labeled and nothing in this section shall be construed as authorizing the appearance upon the labels of any wine of an alcoholic content statement in terms of maximum and minimum percentages which overlaps a prescribed limitation on the alcoholic content of any class, type, or taxable grade of wine, or a direct statement of alcoholic content which indicates that the alcoholic content of the wine is within such a limitation when in fact it is not.
\[T.D. 6521, [25 FR 13835](https://www.federalregister.gov/citation/25-FR-13835), Dec. 29, 1960, as amended by T.D. ATF-275, [53 FR 27046](https://www.federalregister.gov/citation/53-FR-27046), July 18, 1988; T.D. TTB-114, [78 FR 34568](https://www.federalregister.gov/citation/78-FR-34568), June 10, 2013]
#### § 4.37 Net contents.
(a) *Statement of net contents.* The net contents of wine for which a standard of fill is prescribed in [§ 4.72](/current/title-27/section-4.72) shall be stated in the same manner and form as set forth in the standard of fill. The net content of wine for which no standard of fill is prescribed in [§ 4.72](/current/title-27/section-4.72) shall be stated in the metric system of measure as follows:
(1) If more than one liter, net contents shall be stated in liters and in decimal portions of a liter accurate to the nearest one-hundredth of a liter.
(2) If less than one liter, net contents shall be stated in milliliters (ml).
(b) *Statement of U.S. equivalent net contents.* When net contents of wine are stated in metric measure, the equivalent volume in U.S. measure may also be shown. If shown, the U.S. equivalent volume will be shown as follows:
(1) For the metric standards of fill shown in table 1 to paragraph (b)(1), the equivalent U.S. measures are:
Table 1 to Paragraph (b)(1)
| Metric measure | Equivalent U.S. measure |
| -------------------- | --------------------------- |
| 3 liters (L) | 101 fluid ounces (fl. oz.). |
| 2.25 L | 76.1 fl. oz. |
| 1.8 L | 60.9 fl. oz. |
| 1.5 L | 50.7 fl. oz. |
| 1 L | 33.8 fl. oz. |
| 750 milliliters (mL) | 25.4 fl. oz. |
| 720 mL | 24.3 fl. oz. |
| 700 mL | 23.7 fl. oz. |
| 620 mL | 21.0 fl. oz. |
| 600 mL | 20.3 fl. oz. |
| 568 mL | 19.2 fl. oz. |
| 550 mL | 18.6 fl. oz. |
| 500 mL | 16.9 fl. oz. |
| 473 mL | 16 fl. oz. |
| 375 mL | 12.7 fl. oz. |
| 360 mL | 12.2 fl. oz. |
| 355 mL | 12.0 fl. oz. |
| 330 mL | 11.2 fl. oz. |
| 300 mL | 10.1 fl. oz. |
| 250 mL | 8.5 fl. oz. |
| 200 mL | 6.8 fl. oz. |
| 187 mL | 6.3 fl. oz. |
| 180 mL | 6.1 fl. oz. |
| 100 mL | 3.4 fl. oz. |
| 50 mL | 1.7 fl. oz. |
(2) Equivalent volumes of less than 100 fluid ounces will be stated in fluid ounces only, accurate to the nearest one-tenth of a fluid ounce; for example, 700 ml (23.7 fl. oz.).
(3) Equivalent volumes of 100 fluid ounces or more will be stated in fluid ounces only, accurate to the nearest whole fluid ounce; for example, 6 liters (203 fl. oz.).
(c) *Net contents marked in bottle.* The net contents need not be stated on any label if the net contents are displayed by having the same blown, etched, sand-blasted, marked by underglaze coloring, or otherwise permanently marked by any method approved by the appropriate TTB officer, in the sides, front, or back of the bottle, in letters and figures in such manner as to be plainly legible under ordinary circumstances, and such statement is not obscured in any manner in whole or in part.
(d) *Tolerances.* Statement of net contents shall indicate exactly the volume of wine within the container, except that the following tolerances shall be allowed:
(1) Discrepancies due exclusively to errors in measuring which occur in filling conducted in compliance with good commercial practice.
(2) Discrepancies due exclusively to differences in the capacity of containers, resulting solely from unavoidable difficulties in manufacturing such containers so as to be of uniform capacity: *Provided,* That no greater tolerance shall be allowed in case of containers which, because of their design, cannot be made of approximately uniform capacity than is allowed in case of containers which can be manufactured so as to be of approximately uniform capacity.
(3) Discrepancies in measure due to differences in atmospheric conditions in various places and which unavoidably result from the ordinary and customary exposure of alcoholic beverages in containers to evaporation. The reasonableness to discrepancies under this paragraph shall be determined on the facts in each case.
(e) *Unreasonable shortages.* Unreasonable shortages in certain of the containers in any shipment shall not be compensated by overages in other containers in the same shipment.
\[T.D. ATF-12, [39 FR 45222](https://www.federalregister.gov/citation/39-FR-45222), Dec. 31, 1974, as amended by T.D. ATF-49, [43 FR 19848](https://www.federalregister.gov/citation/43-FR-19848), May 9, 1978; T.D. ATF-76, [46 FR 1727](https://www.federalregister.gov/citation/46-FR-1727), Jan. 7, 1981; T.D. ATF-303, [55 FR 42713](https://www.federalregister.gov/citation/55-FR-42713), Oct. 23, 1990; T.D. TTB-91, [76 FR 5476](https://www.federalregister.gov/citation/76-FR-5476), Feb. 1, 2011; T.D. TTB-200, [90 FR 1875](https://www.federalregister.gov/citation/90-FR-1875), Jan. 10, 2025]
#### § 4.38 General requirements.
(a) *Legibility.* All labels shall be so designed that all the statements thereon required by [§§ 4.30](/current/title-27/section-4.30) through [4.39](/current/title-27/section-4.39) are readily legible under ordinary conditions, and all such statement shall be on a contrasting background.
(b) *Size of type.*
(1) Containers of more than 187 milliliters. All mandatory information required on labels by this part, except the alcoholic content statement, shall be in script, type, or printing not smaller than 2 millimeters; except that if contained among other descriptive or explanatory information, the script, type, or printing of the mandatory information shall be of a size substantially more conspicuous than that of the descriptive or explanatory information.
(2) Containers of 187 milliliters or less. All mandatory information required on labels by this part, except the alcoholic content statement, shall not be smaller than 1 millimeter, except that if contained among other descriptive or explanatory information, the script, type, or printing of the mandatory information shall be of a size substantially more conspicuous than that of the descriptive or explanatory information.
(3) Alcoholic content statements shall not appear in script, type, or printing larger or more conspicuous than 3 millimeters nor smaller than 1 millimeter on labels of containers having a capacity of 5 liters or less and shall not be set off with a border or otherwise accentuated.
(c) *English language.* All mandatory label information shall be stated on labels in the English language, except that the brand name, the place of production, and the name of the manufacturer, producer, blender, bottler, packer, or shipper appearing on the label need not be in the English language if the words “product of” immediately precede the name of the country of origin stated in accordance with customs requirements. Additional statements in foreign languages may be made on labels, if they do not in any way conflict with, or contradict the requirements of [§§ 4.30](/current/title-27/section-4.30) through [4.39](/current/title-27/section-4.39).
(d) *Location of label.* Labels shall not obscure Government stamps nor be obscured thereby.
(e) *Labels firmly affixed.* All labels shall be affixed to containers of wine in such manner that they cannot be removed without thorough application of water or other solvents.
(f) *Additional information on labels.* Labels may contain information other than the mandatory label information required by [§§ 4.30](/current/title-27/section-4.30) through [4.39](/current/title-27/section-4.39), if such information complies with the requirements of such sections and does not conflict with, nor in any manner qualify statements required by this part. In addition, information which is truthful, accurate, and specific, and which is neither disparaging nor misleading may appear on wine labels.
(g) *Representations as to materials.* If any representation (other than representations or information required by [§§ 4.30](/current/title-27/section-4.30) through [4.39](/current/title-27/section-4.39) or percentage statements required or permitted by this part) is made as to the presence, excellence, or other characteristic of any ingredient in any wine, or used in its production, the label containing such representation shall state, in print, type, or script, substantially as conspicuous as such representation, the name and amount in percent by volume of each such ingredient.
(h) *Statement of contents of containers.* Upon request of the appropriate TTB officer, there shall be submitted a full and accurate statement of the contents of the containers to which labels are to be or have been affixed.
\[T.D. ATF-53, [43 FR 37677](https://www.federalregister.gov/citation/43-FR-37677), Aug. 23, 1978, as amended by T.D. ATF-66, [45 FR 40544](https://www.federalregister.gov/citation/45-FR-40544), June 13, 1980; T.D. ATF-94, [46 FR 55095](https://www.federalregister.gov/citation/46-FR-55095), Nov. 6, 1981; T.D. ATF-249, [52 FR 5955](https://www.federalregister.gov/citation/52-FR-5955), Feb. 27, 1987; T.D. ATF-275, [53 FR 27046](https://www.federalregister.gov/citation/53-FR-27046), July 18, 1988; T.D. ATF-312, [56 FR 31077](https://www.federalregister.gov/citation/56-FR-31077), July 9, 1991]
#### § 4.38a Bottle cartons, booklets and leaflets.
(a) *General.* An individual covering, carton, or other container of the bottle used for sale at retail (other than a shipping container), or any written, printed, graphic, or other matter accompanying the bottle to the consumer buyer shall not contain any statement, design, device, or graphic, pictorial, or emblematic representation that is prohibited by [§§ 4.30](/current/title-27/section-4.30) through [4.39](/current/title-27/section-4.39) on labels.
(b) *Sealed cartons.* If bottles are enclosed in sealed opaque coverings, cartons, or other containers used for sale at retail (other than a shipping container), such coverings, cartons, or other containers must bear all mandatory label information.
(c) *Other cartons.*
(1) If an individual covering, carton, or other container of the bottle used for sale at retail (other than a shipping container) is so designed that the bottle is readily removable, it may display any information which is not in conflict with the label on the bottle contained therein.
(2) Cartons displaying brand names and/or designations must display such names and designations in their entirety—brand names required to be modified, e.g. by “Brand” or “Product of U.S.A.”, must also display such modification.
(3) Wines for which a truthful and adequate statement of composition is required must display such statement.
\[T.D. ATF-36, [41 FR 47425](https://www.federalregister.gov/citation/41-FR-47425), Oct. 29, 1976]
#### § 4.39 Prohibited practices.
(a) *Statements on labels.* Containers of wine, or any label on such containers, or any individual covering, carton, or other wrapper of such container, or any written, printed, graphic, or other matter accompanying such container to the consumer shall not contain:
(1) Any statement that is false or untrue in any particular, or that, irrespective of falsity, directly, or by ambiguity, omission, or inference, or by the addition of irrelevant, scientific or technical matter, tends to create a misleading impression.
(2) Any statement that is disparaging of a competitor's products.
(3) Any statement, design, device, or representation which is obscene or indecent.
(4) Any statement, design, device, or representation of or relating to analyses, standards, or tests, irrespective of falsity, which the appropriate TTB officer finds to be likely to mislead the consumer.
(5) Any statement, design, device or representation of or relating to any guarantee, irrespective of falsity, which the appropriate TTB officer finds to be likely to mislead the consumer. Money-back guarantees are not prohibited.
(6) A trade or brand name that is the name of any living individual of public prominence, or existing private or public organization, or is a name that is in simulation or is an abbreviation thereof, or any graphic, pictorial, or emblematic representation of any such individual or organization, if the use of such name or representation is likely falsely to lead the consumer to believe that the product has been endorsed, made, or used by, or produced for, or under the supervision of, or in accordance with the specifications of, such individual or organization; *Provided,* That this paragraph shall not apply to the use of the name of any person engaged in business as a producer, blender, rectifier, importer, wholesaler, retailer, bottler, or warehouseman of wine, nor to the use by any person of a trade or brand name that is the name of any living individual of public prominence or existing private or public organization, provided such trade or brand name was used by that person or their predecessors in interest prior to August 29, 1935.
(7) Any statement, design, device, or representation (other than a statement of alcohol content in conformity with [§ 4.36](/current/title-27/section-4.36)), which tends to create the impression that a wine:
(i) Contains distilled spirits;
(ii) Is comparable to a distilled spirit; or
(iii) Has intoxicating qualities.
However, if a statement of composition is required to appear as the designation of a product not defined in these regulations, such statement of composition may include a reference to the type of distilled spirits contained therein.
(8) Any coined word or name in the brand name or class and type designation which simulates, imitates, or which tends to create the impression that the wine so labeled is entitled to bear, any class, type, or permitted designation recognized by the regulations in this part unless such wine conforms to the requirements prescribed with respect to such designation and is in fact so designated on its labels.
(9) Any word in the brand name or class and type designation which is the name of a distilled spirits product or which simulates, imitates, or created the impression that the wine so labeled is, or is similar to, any product customarily made with a distilled spirits base. Examples of such words are: “Manhattan,” “Martini,” and “Daquiri” in a class and type designation or brand name of a wine cocktail; “Cuba Libre,” “Zombie,” and “Collins” in a class and type designation or brand name of a wine specialty or wine highball; “creme,” “cream,” “de,” or “of” when used in conjunction with “menthe,” “mint,” or “cacao” in a class and type designation or a brand name of a mint or chocolate flavored wine specialty.
(b) *Statement of age.* No statement of age or representation relative to age (including words or devices in any brand name or mark) shall be made, except
(1) for vintage wine, in accordance with the provisions of [§ 4.27](/current/title-27/section-4.27);
(2) references relating to methods of wine production involving storage or aging in accordance with [§ 4.38(f)](/current/title-27/section-4.38#p-4.38\(f\)); or
(3) use of the word “old” as part of a brand name.
(c) *Statement of bottling dates.* The statement of any bottling date shall not be deemed to be a representation relative to age, if such statement appears in lettering not greater than 8-point Gothic caps and in the following form: “Bottled in \_\_” (inserting the year in which the wine was bottled).
(d) *Statement of miscellaneous dates.* No date, except as provided in [paragraphs (b)](/current/title-27/section-4.39#p-4.39\(b\)) and [(c)](/current/title-27/section-4.39#p-4.39\(c\)) of this section with respect to statement of vintage year and bottling date, shall be stated on any label unless in addition thereto and in direct conjunction therewith in the same size and kind of printing, there shall be stated an explanation of the significance thereof such as “established” or “founded in”. If any such date refers to the date of establishment of any business or brand name, it shall not be stated, in the case of containers of a capacity of 5 liters or less, in any script, type, or printing larger than 2 millimeters, and shall be stated in direct conjunction with the name of the person, company, or brand name to which it refers if the appropriate TTB officer finds that this is necessary in order to prevent confusion as to the person, company, or brand name to which the establishment date is applicable.
(e) *Simulation of Government stamps.*
(1) No labels shall be of such design as to resemble or simulate a stamp of the United States Government or any State or foreign government. No label, other than stamps authorized or required by the United States Government or any State or foreign government, shall state or indicate that the wine contained in the labeled container is produced, blended, bottled, packed, or sold under, or in accordance with, any municipal, State or Federal Government authorization, law, or regulation, unless such statement is required or specifically authorized by Federal, State or municipal law or regulation, or is required or specifically authorized by the laws or regulations of a foreign country. If the municipal, State, or Federal Government permit number is stated upon a label, it shall not be accompanied by any additional statement relating thereto.
(2) Bonded wine cellar and bonded winery numbers may be stated but only in direct conjunction with the name and address of the person operating such wine cellar or winery. Statement of bonded wine cellar or winery numbers may be made in the following form: “Bonded Wine Cellar No. \_\_”, “Bonded Winery No. \_\_”, “B. W. C. No. \_\_”, “B. W. No. \_\_”. No additional reference thereto shall be made, nor shall any use be made of such statement that may convey the impression that the wine has been made or matured under Government supervision or in accordance with Government specifications or standards.
(3) If imported wines are covered by a certificate of origin and/or a certificate of vintage date issued by a duly authorized official of the appropriate foreign government, the label, except where prohibited by the foreign government, may refer to such certificate or the fact of such certification, but shall not be accompanied by any additional statements relating thereto. The reference to such certificate or certification shall be substantially in the following form:
This product accompanied at the time of the importation by a certificate issued by the
### (Name of government)
government indicating that the product is
### (Class and type as stated on the label)
and (if label bears a statement of vintage date) that the wine is of the vintage of
### (Year of vintage stated on the label)
(f) *Use of the word “Importer”, or similar words.* The word *Importer,* or similar words, shall not be stated on labels on containers of domestic wine except as part of the bona fide name of a permittee for or by whom, or of a retailer for whom, such wine is bottled, packed or distributed: *Provided,* That in all cases where such words are used as part of such name, there shall be stated on the same label the words “Product of the United States”, or similar words to negative any impression that the product is imported, and such negative statement shall appear in the same size and kind of printing as such name.
(g) *Flags, seals, coats of arms, crests, and other insignia.* Labels shall not contain, in the brand name or otherwise, any statement, design, device, or pictorial representation which the appropriate TTB officer finds relates to, or is capable of being construed as relating to, the armed forces of the United States, or the American flag, or any emblem, seal, insignia, or decoration associated with such flag or armed forces; nor shall any label contain any statement, design, device, or pictorial representation of or concerning any flag, seal, coat of arms, crest or other insignia, likely to mislead the consumer to believe that the product has been endorsed, made, or used by, or produced for, or under the supervision of, or in accordance with the specifications of the government, organization, family, or individual with whom such flag, seal, coat of arms, crest, or insignia is associated.
(h) *Health-related statements* —
(1) *Definitions.* When used in this [paragraph (h)](/current/title-27/section-4.39#p-4.39\(h\)), terms are defined as follows:
(i) *Health-related statement* means any statement related to health (other than the warning statement required by [§ 16.21 of this chapter](/current/title-27/section-16.21)) and includes statements of a curative or therapeutic nature that, expressly or by implication, suggest a relationship between the consumption of alcohol, wine, or any substance found within the wine, and health benefits or effects on health. The term includes both specific health claims and general references to alleged health benefits or effects on health associated with the consumption of alcohol, wine, or any substance found within the wine, as well as health-related directional statements. The term also includes statements and claims that imply that a physical or psychological sensation results from consuming the wine, as well as statements and claims of nutritional value (e.g., statements of vitamin content). Statements concerning caloric, carbohydrate, protein, and fat content do not constitute nutritional claims about the product.
(ii) *Specific health claim* is a type of health-related statement that, expressly or by implication, characterizes the relationship of the wine, alcohol, or any substance found within the wine, to a disease or health-related condition. Implied specific health claims include statements, symbols, vignettes, or other forms of communication that suggest, within the context in which they are presented, that a relationship exists between wine, alcohol, or any substance found within the wine, and a disease or health-related condition.
(iii) *Health-related directional statement* is a type of health-related statement that directs or refers consumers to a third party or other source for information regarding the effects on health of wine or alcohol consumption.
(2) *Rules for labeling* —
(i) *Health-related statements.* In general, labels may not contain any health-related statement that is untrue in any particular or tends to create a misleading impression as to the effects on health of alcohol consumption. TTB will evaluate such statements on a case-by-case basis and may require as part of the health-related statement a disclaimer or some other qualifying statement to dispel any misleading impression conveyed by the health-related statement.
(ii) *Specific health claims.*
(A) TTB will consult with the Food and Drug Administration (FDA), as needed, on the use of a specific health claim on a wine label. If FDA determines that the use of such a labeling claim is a drug claim that is not in compliance with the requirements of the Federal Food, Drug, and Cosmetic Act, TTB will not approve the use of that specific health claim on a wine label.
(B) TTB will approve the use of a specific health claim on a wine label only if the claim is truthful and adequately substantiated by scientific or medical evidence; sufficiently detailed and qualified with respect to the categories of individuals to whom the claim applies; adequately discloses the health risks associated with both moderate and heavier levels of alcohol consumption; and outlines the categories of individuals for whom any levels of alcohol consumption may cause health risks. This information must appear as part of the specific health claim.
(iii) *Health-related directional statements.* A statement that directs consumers to a third party or other source for information regarding the effects on health of wine or alcohol consumption is presumed misleading unless it—
(A) Directs consumers in a neutral or other non-misleading manner to a third party or other source for balanced information regarding the effects on health of wine or alcohol consumption; and
(B)
(*1*) Includes as part of the health-related directional statement the following disclaimer: “This statement should not encourage you to drink or to increase your alcohol consumption for health reasons;” or
(*2*) Includes as part of the health-related directional statement some other qualifying statement that the appropriate TTB officer finds is sufficient to dispel any misleading impression conveyed by the health-related directional statement.
(i) *Geographic brand names.*
(1) Except as provided in subparagraph 2, a brand name of viticultural significance may not be used unless the wine meets the appellation of origin requirements for the geographic area named.
(2) For brand names used in existing certificates of label approval issued prior to July 7, 1986:
(i) The wine shall meet the appellation of origin requirements for the geographic area named; or
(ii) The wine shall be labeled with an appellation of origin in accordance with [§ 4.34(b)](/current/title-27/section-4.34#p-4.34\(b\)) as to location and size of type of either:
(A) A county or a viticultural area, if the brand name bears the name of a geographic area smaller than a state, or;
(B) A state, county or a viticultural area, if the brand name bears a state name; or
(iii) The wine shall be labeled with some other statement which the appropriate TTB officer finds to be sufficient to dispel the impression that the geographic area suggested by the brand name is indicative of the origin of the wine.
(3) A name has viticultural significance when it is the name of a state or county (or the foreign equivalents), when approved as a viticultural area in [part 9 of this chapter](/current/title-27/part-9), or by a foreign government, or when found to have viticultural significance by the appropriate TTB officer.
(j) *Product names of geographical significance (not mandatory before January 1, 1983).* The use of product names with specific geographical significance is prohibited unless the appropriate TTB officer finds that because of their long usage, such names are recognized by consumers as fanciful product names and not representations as to origin. In such cases the product names shall be qualified with the word “brand” immediately following the product name, in the same size of type, and as conspicuous as the product name itself. In addition, the label shall bear an appellation of origin under the provisions of [§ 4.34(b)](/current/title-27/section-4.34#p-4.34\(b\)), and, if required by the appropriate TTB officer, a statement disclaiming the geographical reference as a representation as to the origin of the wine.
(k) *Other indications of origin.* Other statements, designs, devices or representations which indicate or infer an origin other than the true place of origin of the wine are prohibited.
(l) *Foreign terms.* Foreign terms which:
(1) Describe a particular condition of the grapes at the time of harvest (such as “Auslese,” “Eiswein,” and “Trockenbeerenauslese”); or
(2) denote quality under foreign law (such as “Qualitatswein” and “Kabinett”) may not be used on the labels of American wine.
(m) *Use of a vineyard, orchard, farm or ranch name.* When used in a brand name, a vineyard, orchard, farm or ranch name having geographical or viticultural significance is subject to the requirements of [§§ 4.33(b)](/current/title-27/part-4/section-4.33#p-4.33\(b\)) and [4.39(i) of this part](/current/title-27/part-4/section-4.39#p-4.39\(i\)). Additionally, the name of a vineyard, orchard, farm or ranch shall not be used on a wine label, unless 95 percent of the wine in the container was produced from primary winemaking material grown on the named vineyard, orchard, farm or ranch.
(n) *Use of a varietal name, type designation of varietal significance, semi-generic name, or geographic distinctive designation.* Labels that contain in the brand name, product name, or distinctive or fanciful name, any varietal (grape type) designation, type designation of varietal significance, semi-generic geographic type designation, or geographic distinctive designation, are misleading unless the wine is made in accordance with the standards prescribed in classes 1, 2, or 3 of [§ 4.21](/current/title-27/section-4.21). Any other use of such a designation on other than a class 1, 2, or 3 wine is presumed misleading.
\[T.D. 6521, [25 FR 13841](https://www.federalregister.gov/citation/25-FR-13841), Dec. 29, 1960]
#### Editorial Note:
For Federal Register citations affecting [§ 4.39](/current/title-27/section-4.39), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
## Subpart E—Requirements for Withdrawal of Wine From Customs Custody
#### § 4.40 Label approval and release.
(a) *Certificate of label approval.* Wine, imported in containers, is not eligible for release from customs custody for consumption, and no person may remove such wine from customs custody for consumption, unless the person removing the wine has obtained and is in possession of a certificate of label approval (COLA) and the containers bear labels identical to the labels appearing on the face of the certificate, or labels with changes authorized by the form. Any person removing wine in containers from customs custody for consumption must first apply for and obtain a COLA covering the wine from the appropriate TTB officer, or obtain authorization to use the COLA from the person to whom the COLA is issued. Products imported under another person's COLA are eligible for release only if each bottle or individual container to be imported bears the name (or trade name) and address of the person to whom the COLA was issued by TTB, and only if the importer using the COLA to obtain release of a shipment can substantiate that the person to whom the COLA was issued has authorized its use by the importer. If filing electronically, the importer must file with U.S. Customs and Border Protection (CBP), at the time of filing the customs entry, the TTB-assigned number of the valid COLA that corresponds to the label on the brand or lot of wine to be imported. If the importer is not filing electronically, the importer must provide a copy of the COLA to CBP at time of entry. In addition, the importer must provide a copy of the applicable COLA, and proof of the COLA holder's authorization if applicable, upon request by the appropriate TTB officer or a customs officer. The COLA requirement imposed by this section applies only to wine that is removed for sale or any other commercial purpose. See [27 CFR 27.49](/current/title-27/section-27.49), [27.74](/current/title-27/section-27.74) and [27.75](/current/title-27/section-27.75) for labeling exemptions applicable to certain imported samples of wine.
(b) \[Reserved]
(c) *Relabeling.* Imported wine in U.S. Customs custody which is not labeled in conformity with certificates of label approval issued by the appropriate TTB officer must be relabeled prior to release under the supervision and direction of customs officers of the port at which the wine is located.
(d) *Cross reference.* For procedures regarding the issuance, denial, and revocation of certificates of label approval, as well as appeal procedures, see [part 13 of this chapter](/current/title-27/part-13).
(Approved by the Office of Management and Budget under control numbers 1513-0020 and 1513-0064)
\[T.D. ATF-66, [45 FR 40546](https://www.federalregister.gov/citation/45-FR-40546), June 13, 1980, as amended by T.D. ATF-94, [46 FR 55095](https://www.federalregister.gov/citation/46-FR-55095), Nov. 6, 1981; T.D. ATF-242, [51 FR 39525](https://www.federalregister.gov/citation/51-FR-39525), Oct. 29, 1986; T.D. ATF-359, [59 FR 42160](https://www.federalregister.gov/citation/59-FR-42160), Aug. 17, 1994; T.D. ATF-406, [64 FR 2128](https://www.federalregister.gov/citation/64-FR-2128), Jan. 13, 1999; T.D. TTB-145, [81 FR 94197](https://www.federalregister.gov/citation/81-FR-94197), Dec. 22, 2016]
#### § 4.45 Certificates of origin, identity and proper cellar treatment.
(a) *Certificate of origin and identity.* Wine imported in containers is not eligible for release from customs custody for consumption, and no person may remove such wine from customs custody for consumption, unless that person has obtained, and is in possession of an invoice accompanied by a certificate of origin issued by the appropriate foreign government if that country requires the issuance of such a certificate for wine exported from that country. The certificate must have been issued by an official duly authorized by the foreign government, and it must certify as to the identity of the wine and that the wine has been produced in compliance with the laws of the foreign country regulating the production of the wine for home consumption.
(b) *Certification of proper cellar treatment of natural wine* —
(1) *General.* An importer of wine may be required to have in his or her possession at the time of release of the wine from customs custody a certification or may have to comply with other conditions prescribed in [§ 27.140 of this chapter](/current/title-27/section-27.140) regarding proper cellar treatment. If imported wine requires a certification under [§ 27.140](/current/title-27/section-27.140), the importer must provide a copy of that certification to TTB as follows:
(i) The importer must attach a copy of the certification to the application for a certificate of label approval for the wine in question submitted under [§ 13.21 of this chapter](/current/title-27/section-13.21); or
(ii) If a certification for the wine in question was not available when the importer submitted the application for label approval, the importer must submit a copy of the certification to the appropriate TTB officer prior to release from customs custody of the first shipment of the wine.
(2) *Validity of certification.* A certification submitted under [paragraph (b)(1)](/current/title-27/section-4.45#p-4.45\(b\)\(1\)) of this section is valid as long as the wine is of the same brand and class or type, was made by the same producer, was subjected to the same cellar treatment, and conforms to the statements made on the certification. Accordingly, if the cellar treatment of the wine changes and a new certification under [§ 27.140](/current/title-27/section-27.140) is required, an importer is required to submit a new certification for the wine even though it is subject to the same label approval.
(3) *Use of certification.* TTB may use the information from a certification for purposes of verifying the appropriate class and type designation of the wine under the labeling provisions of this part. TTB will make certifications submitted under [paragraph (b)(1)](/current/title-27/section-4.45#p-4.45\(b\)\(1\)) of this section available to the public on the TTB Internet Web site at *[www.ttb.gov](http://www.ttb.gov).*
(c) *Retention of certificates.* The importer of wine imported in containers must retain for five years following the date of the removal of the bottled wine from customs custody copies of the certificates (and accompanying invoices, if required) required by [paragraphs (a)](/current/title-27/section-4.45#p-4.45\(a\)) and [(b)](/current/title-27/section-4.45#p-4.45\(b\)) of this section, and must provide them upon request of the appropriate TTB officer or a customs officer.
(Approved by the Office of Management and Budget under control numbers 1513-0064 and 1513-0119)
\[T.D. 6521, [25 FR 13835](https://www.federalregister.gov/citation/25-FR-13835), Dec. 29, 1960, as amended by T.D. TTB-31, [70 FR 49482](https://www.federalregister.gov/citation/70-FR-49482), Aug. 24, 2005; T.D. TTB-145, [81 FR 94197](https://www.federalregister.gov/citation/81-FR-94197), Dec. 22, 2016]
## Subpart F—Requirements for Approval of Labels of Wine Domestically Bottled or Packed
#### § 4.50 Certificates of label approval.
(a) No person shall bottle or pack wine, other than wine bottled or packed in U.S. Customs custody, or remove such wine from the plant where bottled or packed, unless an approved certificate of label approval, TTB Form 5100.31, is issued by the appropriate TTB officer.
(b) Any bottler or packer of wine shall be exempt from the requirements of this section if upon application the bottler or packer shows to the satisfaction of the appropriate TTB officer that the wine to be bottled or packed is not to be sold, offered for sale, or shipped or delivered for shipment, or otherwise introduced in interstate or foreign commerce. Application for exemption shall be made on TTB Form 5100.31 in accordance with instructions on the form. If the application is approved, a certificate of exemption will be issued on the same form.
(c) *Cross reference.* For procedures regarding the issuance, denial, and revocation of certificates of label approval, and certificates of exemption from label approval, as well as appeal procedures, see [part 13 of this chapter](/current/title-27/part-13).
\[T.D. ATF-66, [45 FR 40546](https://www.federalregister.gov/citation/45-FR-40546), June 13, 1980, as amended by T.D. ATF-94, [46 FR 55095](https://www.federalregister.gov/citation/46-FR-55095), Nov. 6, 1981; T.D. ATF-242, [51 FR 39525](https://www.federalregister.gov/citation/51-FR-39525), Oct. 29, 1986; T.D. ATF-344, [58 FR 40354](https://www.federalregister.gov/citation/58-FR-40354), July 28, 1993; T.D. ATF-406, [64 FR 2128](https://www.federalregister.gov/citation/64-FR-2128), Jan. 13, 1999; T.D. ATF-425, [65 FR 11891](https://www.federalregister.gov/citation/65-FR-11891), Mar. 7, 2000]
#### § 4.51 Exhibiting certificates to Government officials.
Any bottler or packer holding an original or duplicate original of a certificate of label approval or a certificate of exemption shall, upon demand, exhibit such certificate to a duly authorized representative of the United States Government.
#### § 4.52 Photoprints.
Photoprints or other reproductions of certificates of label approval or certificates of exemption are not acceptable, for the purposes of [§§ 4.50](/current/title-27/section-4.50) through [4.52](/current/title-27/section-4.52), as substitutes for an original or duplicate original of a certificate of label approval, or a certificate of exemption. The appropriate TTB officer will, upon the request of the bottler or packer, issue duplicate originals of certificates of label approval or of certificates of exemption if wine under the same brand is bottled or packed at more than one plant by the same person, and if the necessity for the duplicate originals is shown and there is listed with the appropriate TTB officer the name and address of the additional bottling or packing plant where the particular label is to be used.
#### § 4.53 Retention of certificates.
Wine that would be required under [§ 4.45](/current/title-27/section-4.45) to be covered by a certificate of origin and identity and/or a certification of proper cellar treatment and that is imported in bulk for bottling in the United States may be removed for consumption from the premises where bottled only if the bottler possesses a certificate of origin and identity and/or a certification of proper cellar treatment of natural wine applicable to the wine, issued by the appropriate entity as set forth in [§§ 4.45](/current/title-27/section-4.45) and [27.140 of this chapter](/current/title-27/section-27.140) respectively, that provides the same information as a certificate required under [§ 4.45(a)](/current/title-27/section-4.45#p-4.45\(a\)) and [(b)](/current/title-27/section-4.45#p-4.45\(b\)) would provide for like wine imported in bottles. The bottler of wine imported in bulk must retain for five years following the removal of such wine from the bonded wine cellar where bottled copies of the certificates required by [§ 4.45(a)](/current/title-27/section-4.45#p-4.45\(a\)) and [(b)](/current/title-27/section-4.45#p-4.45\(b\)), and must provide them upon request of the appropriate TTB officer.
(Approved by the Office of Management and Budget under control number 1513-0064)
\[T.D. TTB-145, [81 FR 94197](https://www.federalregister.gov/citation/81-FR-94197), Dec. 22, 2016]
#### § 4.54 Personalized labels.
(a) *General.* Applicants for label approval may obtain permission from TTB to make certain changes in order to personalize labels without having to resubmit labels for TTB approval. A personalized label is an alcohol beverage label that meets the minimum mandatory label requirements and is customized for customers. Personalized labels may contain a personal message, picture, or other artwork that is specific to the consumer who is purchasing the product. For example, a winery may offer individual or corporate customers labels that commemorate an event such as a wedding or grand opening.
(b) *Application.* Any person who intends to offer personalized labels must submit a template for the personalized label as part of the application for label approval required under [§§ 4.40](/current/title-27/part-4/section-4.40) or [4.50 of this part](/current/title-27/part-4/section-4.50), and must note on the application a description of the specific personalized information that may change.
(c) *Approval of personalized label.* If the application complies with the regulations, TTB will issue a certificate of label approval (COLA) with a qualification allowing the personalization of labels. The qualification will allow the certificate holder to add or change items on the personalized label such as salutations, names, graphics, artwork, congratulatory dates and names, or event dates without applying for a new COLA. All of these items on personalized labels must comply with the regulations of this part.
(d) *Changes not allowed to personalized labels.* Approval of an application to personalize labels does not authorize the addition of any information that discusses either the alcohol beverage or characteristics of the alcohol beverage or that is inconsistent with or in violation of the provisions of this part or any other applicable provision of law or regulations.
\[T.D. TTB-158, [85 FR 18722](https://www.federalregister.gov/citation/85-FR-18722), Apr. 2, 2020]
## Subpart G—Advertising of Wine
#### § 4.60 Application.
No person engaged in the business as a producer, rectifier, blender, importer, or wholesaler of wine, directly or indirectly or through an affiliate, shall publish or disseminate or cause to be published or disseminated by radio or television broadcast, or in any newspaper, periodical, or any publication, by any sign or outdoor advertisement, or any other printed or graphic matter, any advertisement of wine, if such advertising is in, or is calculated to induce sale in, interstate or foreign commerce, or is disseminated by mail, unless such advertisement is in conformity with [§§ 4.60-4.65 of this part](/current/title-27/part-4/section-4.60). Provided, that such sections shall not apply to outdoor advertising in place on September 7, 1984, but shall apply upon replacement, restoration, or renovation of any such advertising; and provided further, that such sections shall not apply to a retailer or the publisher of any newspaper, periodical, or other publication, or radio or television broadcast, unless such retailer or publisher or radio or television broadcaster is engaged in business as a producer, rectifier, blender, importer, or wholesaler of wine, directly or indirectly, or through an affiliate.
\[T.D. ATF-180, [49 FR 31672](https://www.federalregister.gov/citation/49-FR-31672), Aug. 8, 1984]
#### § 4.61 Definitions.
As used in [§§ 4.60](/current/title-27/part-4/section-4.60) through [4.65 of this part](/current/title-27/part-4/section-4.65), the term *advertisement* includes any written or verbal statement, illustration, or depiction which is in, or calculated to induce sales in, interstate or foreign commerce, or is disseminated by mail, whether it appears in a newspaper, magazine, trade booklet, menu, wine card, leaflet, circular, mailer, book insert, catalog, promotional material, sales pamphlet, or any written, printed, graphic, or other matter accompanying the container, representations made on cases, billboard, sign, or other outdoor display, public transit card, other periodical literature, publication, or in a radio or television broadcast, or in any other media; except that such term shall not include:
(a) Any label affixed to any container of wine, or any individual covering, carton, or other wrapper of such container which constitute a part of the labeling under provisions of [§§ 4.30-4.39 of this part](/current/title-27/part-4/section-4.30).
(b) Any editorial or other reading material (*i.e.,* news release) in any periodical or publication or newspaper for the publication of which no money or valuable consideration is paid or promised, directly or indirectly, by any permittee, and which is not written by or at the direction of the permittee.
\[T.D. ATF-180, [49 FR 31672](https://www.federalregister.gov/citation/49-FR-31672), Aug. 8, 1984, as amended by T.D. TTB-91, [76 FR 5477](https://www.federalregister.gov/citation/76-FR-5477), Feb. 1, 2011]
#### § 4.62 Mandatory statements.
(a) *Responsible advertiser.* The advertisement must display the responsible advertiser's name, city, and State or the name and other contact information (such as telephone number, website, or email address) where the responsible advertiser may be contacted.
(b) *Class, type, and distinctive designation.* The advertisement shall contain a conspicuous statement of the class, type, or distinctive designation to which the product belongs, corresponding with the statement of class, type, or distinctive designation which is required to appear on the label of the product.
(c) *Exception.*
(1) If an advertisement refers to a general wine line or all of the wine products of one company, whether by the company name or by the brand name common to all the wine in the line, the only mandatory information necessary is the name and address of the responsible advertiser. This exception does not apply where only one type of wine is marketed under the specific brand name advertised.
(2) On consumer specialty items, the only information necessary is the company name or brand name of the product.
\[T.D. 6521, [25 FR 13835](https://www.federalregister.gov/citation/25-FR-13835), Dec. 29, 1960, as amended by T.D. ATF-180, [49 FR 31672](https://www.federalregister.gov/citation/49-FR-31672), Aug. 8, 1984; T.D. TTB-158, [85 FR 18722](https://www.federalregister.gov/citation/85-FR-18722), Apr. 2, 2020]
#### § 4.63 Legibility of mandatory information.
(a) Statements required under [§§ 4.60](/current/title-27/part-4/section-4.60) through [4.65 of this part](/current/title-27/part-4/section-4.65) to appear in any written, printed, or graphic advertisement shall be in lettering or type size sufficient to be conspicuous and readily legible.
(b) In the case of signs, billboards, and displays the name and address of the permittee responsible for the advertisement may appear in type size of lettering smaller than the other mandatory information, provided such information can be ascertained upon closer examination of the sign or billboard.
(c) Mandatory information shall be so stated as to be clearly a part of the advertisement and shall not be separated in any manner from the remainder of the advertisement.
(d) Mandatory information for two or more products shall not be stated unless clearly separated.
(e) Mandatory information shall be so stated in both the print and audio-visual media that it will be readily apparent to the persons viewing the advertisement.
\[T.D. ATF-180, [49 FR 31672](https://www.federalregister.gov/citation/49-FR-31672), Aug. 8, 1984]
#### § 4.64 Prohibited practices.
(a) *Restrictions.* The advertisement of wine shall not contain:
(1) Any statement that is false or untrue in any material particular, or that, irrespective of falsity, directly, or by ambiguity, omission, or inference, or by the addition of irrelevant, scientific or technical matter tends to create a misleading impression.
(2) Any statement that is disparaging of a competitor's products.
(3) Any statement, design, device, or representation which is obscene or indecent.
(4) Any statement, design, device, or representation of or relating to analyses, standards, or tests, irrespective of falsity, which the appropriate TTB officer finds to be likely to mislead the consumer.
(5) Any statement, design, device, or representation of or relating to any guarantee, irrespective of falsity, which the appropriate TTB officer finds to be likely to mislead the consumer. Money-back guarantees are not prohibited.
(6) Any statement that the wine is produced, blended, bottled, packed, or sold under, or in accordance with, any municipal, State, or Federal Government authorization, law, or regulations; and if a municipal, State, or Federal permit number is stated, the permit number shall not be accompanied by any additional statement relating thereto.
(7) Any statement of bonded winecellar and bonded winery numbers unless stated in direct conjunction with the name and address of the person operating such winery or storeroom. Statement of bonded winecellar and bonded winery numbers may be made in the following form: “Bonded Winecellar No. \_\_,” “Bonded Winery No. \_\_,” “B. W. C. No. \_\_,” “B. W. No. \_\_.” No additional reference thereto shall be made, nor shall any use be made of such statement that may convey the impression that the wine has been made or matured under Government supervision or in accordance with Government specifications or standards.
(8) Any statement, design, device, or representation which relates to alcohol content or which tends to create the impression that a wine:
(i) Contains distilled spirits; or
(ii) Is comparable to a distilled spirit; or
(iii) Has intoxicating qualities.
However, if a statement of composition is required to appear as the designation of a product not defined in these regulations, such statement of composition may include a reference to the type of distilled spirits contained therein. Further, an approved wine label, which bears the statement of alcohol content may be depicted in any advertising media, or an actual wine bottle showing the approved label bearing the statement of alcoholic content may be displayed in any advertising media.
(9) Any word in the brand name or class and type designation which is the name of a distilled spirits product or which simulates, imitates, or creates the impression that the wine so labeled is, or is similar to, any product customarily made with a distilled spirits base.
(b) *Statements inconsistent with labeling.*
(1) Advertisements shall not contain any statement concerning a brand or lot of wine that is inconsistent with any statement on the labeling thereof.
(2) Any label depicted on a bottle in an advertisement shall be a reproduction of an approved label.
(c) *Statement of age.* No statement of age or representation relative to age (including words or devices in any brand name or mark) shall be made, except
(1) for vintage wine, in accordance with the provisions of [§ 4.27](/current/title-27/section-4.27);
(2) references in accordance with [§ 4.38(f)](/current/title-27/section-4.38#p-4.38\(f\)); or
(3) use of the word “old” as part of a brand name.
(d) *Statement of bottling dates.* The statement of any bottling date shall not be deemed to be a representation relative to age, if such statement appears without undue emphasis in the following form: “Bottled in \_\_” (inserting the year in which the wine was bottled).
(e) *Statement of miscellaneous dates.* No date, except as provided in [paragraphs (c)](/current/title-27/section-4.64#p-4.64\(c\)) and [(d)](/current/title-27/section-4.64#p-4.64\(d\)) of this section, with respect to statement of vintage year and bottling date, shall be stated unless, in addition thereto, and in direct conjunction therewith, in the same size and kind of printing there shall be stated an explanation of the significance of such date: *Provided,* That if any date refers to the date of establishment of any business, such date shall be stated without undue emphasis and in direct conjunction with the name of the person to whom it refers.
(f) *Flags, seals, coats of arms, crests, and other insignia.* No advertisement shall contain any statement, design, device, or pictorial representation of or relating to, or capable of being construed as relating to, the armed forces of the United States, or of the American flag, or of any emblem, seal, insignia, or decoration associated with such flag or armed forces; nor shall any advertisement contain any statement, device, design, or pictorial representation of or concerning any flag, seal, coat of arms, crest, or other insignia likely to mislead the consumer to believe that the product has been endorsed, made, or used by, or produced for, or under the supervision of, or in accordance with the specifications of the government, organization, family, or individual with whom such flag, seal, coat of arms, crests, or insignia is associated.
(g) *Statements indicative of origin.* No statement, design, device, or representation which tends to create the impression that the wine originated in a particular place or region, shall appear in any advertisement unless the label of the advertised product bears an appellation of origin, and such appellation of origin appears in the advertisement in direct conjunction with the class and type designation.
(h) *Use of the word “importer” or similar words.* The word *importer* or similar words shall not appear in advertisements of domestic wine except as part of the bona fide name of the permittee by or for whom, or of a retailer for whom, such wine is bottled, packed or distributed: *Provided,* That in all cases where such words are used as part of such name, there shall be stated the words “Product of the United States” or similar words to negate any impression that the product is imported, and such negating statements shall appear in the same size and kind of printing as such name.
(i) *Health-related statements* —
(1) *Definitions.* When used in this [paragraph (i)](/current/title-27/section-4.64#p-4.64\(i\)), terms are defined as follows:
(i) *Health-related statement* means any statement related to health and includes statements of a curative or therapeutic nature that, expressly or by implication, suggest a relationship between the consumption of alcohol, wine, or any substance found within the wine, and health benefits or effects on health. The term includes both specific health claims and general references to alleged health benefits or effects on health associated with the consumption of alcohol, wine, or any substance found within the wine, as well as health-related directional statements. The term also includes statements and claims that imply that a physical or psychological sensation results from consuming the wine, as well as statements and claims of nutritional value (e.g., statements of vitamin content). Statements concerning caloric, carbohydrate, protein, and fat content do not constitute nutritional claims about the product.
(ii) *Specific health claim* is a type of health-related statement that, expressly or by implication, characterizes the relationship of the wine, alcohol, or any substance found within the wine, to a disease or health-related condition. Implied specific health claims include statements, symbols, vignettes, or other forms of communication that suggest, within the context in which they are presented, that a relationship exists between wine, alcohol, or any substance found within the wine, and a disease or health-related condition.
(iii) *Health-related directional statement* is a type of health-related statement that directs or refers consumers to a third party or other source for information regarding the effects on health of wine or alcohol consumption.
(2) *Rules for advertising* —
(i) *Health-related statements.* In general, advertisements may not contain any health-related statement that is untrue in any particular or tends to create a misleading impression as to the effects on health of alcohol consumption. TTB will evaluate such statements on a case-by-case basis and may require as part of the health-related statement a disclaimer or some other qualifying statement to dispel any misleading impression conveyed by the health-related statement. Such disclaimer or other qualifying statement must appear as prominent as the health-related statement.
(ii) *Specific health claims.* A specific health claim will not be considered misleading if it is truthful and adequately substantiated by scientific or medical evidence; sufficiently detailed and qualified with respect to the categories of individuals to whom the claim applies; adequately discloses the health risks associated with both moderate and heavier levels of alcohol consumption; and outlines the categories of individuals for whom any levels of alcohol consumption may cause health risks. This information must appear as part of the specific health claim and in a manner as prominent as the specific health claim.
(iii) *Health-related directional statements.* A statement that directs consumers to a third party or other source for information regarding the effects on health of wine or alcohol consumption is presumed misleading unless it—
(A) Directs consumers in a neutral or other non-misleading manner to a third party or other source for balanced information regarding the effects on health of wine or alcohol consumption; and
(B)
(*1*) Includes as part of the health-related directional statement, and in a manner as prominent as the health-related directional statement, the following disclaimer: “This statement should not encourage you to drink or increase your alcohol consumption for health reasons;” or
(*2*) Includes as part of the health-related directional statement, and in a manner as prominent as the health-related directional statement, some other qualifying statement that the appropriate TTB officer finds is sufficient to dispel any misleading impression conveyed by the health-related directional statement.
(j) *Confusion of brands.* Two or more different brands or lots of wine shall not be advertised in one advertisement (or in two or more advertisements in one issue of a periodical or newspaper, or in one piece of other written, printed, or graphic matter) if the advertisement tends to create the impression that representations made as to one brand or lot apply to the other or others, and if as to such latter the representations contravene any provision of [§§ 4.60](/current/title-27/section-4.60) through [4.64](/current/title-27/section-4.64) or are in any respect untrue.
(k) *Deceptive advertising techniques.* Subliminal or similar techniques are prohibited. “Subliminal or similar techniques,” as used in this part, refers to any device or technique that is used to convey, or attempts to convey, a message to a person by means of images or sounds of a very brief nature that cannot be perceived at a normal level of awareness.
\[T.D. 6521, [25 FR 13843](https://www.federalregister.gov/citation/25-FR-13843), Dec. 29, 1960, as amended by T.D. 6976, [33 FR 15025](https://www.federalregister.gov/citation/33-FR-15025), Oct. 8, 1968; T.D. ATF-53, [43 FR 37678](https://www.federalregister.gov/citation/43-FR-37678), Aug. 23, 1978; T.D. ATF-180, [49 FR 31672](https://www.federalregister.gov/citation/49-FR-31672), Aug. 8, 1984; TTB T.D.-1, [68 FR 10103](https://www.federalregister.gov/citation/68-FR-10103), Mar. 3, 2003]
#### § 4.65 Comparative advertising.
(a) *General.* Comparative advertising shall not be disparaging of a competitor's product.
(b) *Taste tests.*
(1) Taste test results may be used in advertisements comparing competitors' products unless they are disparaging, deceptive, or likely to mislead the consumer.
(2) The taste test procedure used shall meet scientifically accepted procedures. An example of a scientifically accepted procedure is outlined in the *Manual on Sensory Testing Methods,* ASTM Special Technical Publication 434, published by the American Society for Testing and Materials, 1916 Race Street, Philadelphia, Pennsylvania 19103, ASTM, 1968, Library of Congress Catalog Card Number 68-15545.
(3) A statement shall appear in the advertisement providing the name and address of the testing administrator.
\[T.D. ATF-180, [49 FR 31673](https://www.federalregister.gov/citation/49-FR-31673), Aug. 8, 1984, as amended by T.D. TTB-91, [76 FR 5477](https://www.federalregister.gov/citation/76-FR-5477), Feb. 1, 2011]
## Subpart H—Standards of Fill for Wine
#### § 4.70 Application.
(a) Except as provided in [paragraph (b)](/current/title-27/section-4.70#p-4.70\(b\)) of this section, no person engaged in business as a producer, rectifier, blender, importer, or wholesaler of wine, directly or indirectly or through an affiliate, shall sell or ship or deliver for sale or shipment, or otherwise introduce in interstate or foreign commerce, or receive therein, or remove from customs custody, any wine unless such wine is bottled or packed in the standard wine containers herein prescribed.
(b) Sections 4.71 and 4.72 of this part do not apply to:
(1) Sake;
(2) Wine packed in containers of 18 liters or more;
(3) Imported wine in the original containers in which entered customs custody if the wine was bottled or packed before January 1, 1979;
(4) Imported wine bottled or packed before January 1, 1979, and certified as to such in a statement, available to the appropriate TTB officer upon request, signed by an official duly authorized by the appropriate foreign government; or
(5) Wine domestically bottled or packed, either in or out of customs custody, before October 24, 1943, if the container, or the label on the container, bears a conspicuous statement of the net contents, and if the actual capacity of the container is not substantially less than the apparent capacity upon visual examination under ordinary conditions of purchase or use.
(c) Section 4.72 of this part does not apply to wine domestically bottled or packed, either in or out of customs custody, before January 1, 1979, if the wine was bottled or packed according to the standards of fill (listed in ounces, quarts, and gallons) prescribed by regulation before that date.
(Approved by the Office of Management and Budget under control number 1513-0064)
\[T.D. ATF-12, [39 FR 45222](https://www.federalregister.gov/citation/39-FR-45222), Dec. 31, 1974, as amended by T.D. ATF-49, [43 FR 19848](https://www.federalregister.gov/citation/43-FR-19848), May 9, 1978; T.D. ATF-76, [46 FR 1727](https://www.federalregister.gov/citation/46-FR-1727), Jan. 7, 1981; T.D. TTB-91, [76 FR 5477](https://www.federalregister.gov/citation/76-FR-5477), Feb. 1, 2011; T.D. TTB-145, [81 FR 94197](https://www.federalregister.gov/citation/81-FR-94197), Dec. 22, 2016]
#### § 4.71 Standard wine containers.
(a) A standard wine container shall be made, formed and filled to meet the following specifications:
(1) *Design.* It shall be so made and formed as not to mislead the purchaser. Wine containers shall be held (irrespective of the correctness of the net contents specified on the label) to be so made and formed as to mislead the purchaser if the actual capacity is substantially less than the apparent capacity upon visual examination under ordinary conditions of purchase or use; and
(2) *Fill.* It shall be so filled as to contain the quantity of wine specified in one of the standards of fill prescribed in [§ 4.72](/current/title-27/section-4.72); and
(3) *Headspace.* It must be designed and filled so that the headspace, or empty space between the top of the wine and the top of the container, meets the following specifications:
(i) *187 mL or more.* If the net contents stated on the label are 187 milliliters or more, the headspace must not exceed 6 percent of the container's total capacity after closure.
(ii) *Less than 187 mL.* If the net contents stated on the label are less than 187 milliliters, except as described in [(a)(3)(iii)](/current/title-27/section-4.71#p-4.71\(a\)\(3\)\(iii\)) of this section, the headspace must not exceed 10 percent of the container's total capacity after closure.
(iii) *Exception.* Wine bottled in clear containers with the contents clearly visible, with a net content stated on the label of 100 milliliters or less, may have a headspace that does not exceed 30 percent of the container's total capacity after closure.
\[T.D. ATF-12, [39 FR 45222](https://www.federalregister.gov/citation/39-FR-45222), Dec. 31, 1974, as amended by T.D. TTB-91, [76 FR 5477](https://www.federalregister.gov/citation/76-FR-5477), Feb. 1, 2011; T.D. TTB-165, [85 FR 85520](https://www.federalregister.gov/citation/85-FR-85520), Dec. 29, 2020]
#### § 4.72 Metric standards of fill.
(a) *Authorized standards of fill.* The standards of fill for wine are the following:
(1) 3 liters.
(2) 2.25 liters.
(3) 1.8 liters.
(4) 1.5 liters.
(5) 1 liter.
(6) 750 milliliters.
(7) 720 milliliters.
(8) 700 milliliters.
(9) 620 milliliters.
(10) 600 milliliters.
(11) 568 milliliters.
(12) 550 milliliters.
(13) 500 milliliters.
(14) 473 milliliters.
(15) 375 milliliters.
(16) 360 milliliters.
(17) 355 milliliters.
(18) 330 milliliters.
(19) 300 milliliters.
(20) 250 milliliters.
(21) 200 milliliters.
(22) 187 milliliters.
(23) 180 milliliters.
(24) 100 milliliters.
(25) 50 milliliters.
(b) *Sizes larger than 3 liters.* Wine may be bottled or packed in containers of 4 liters or larger if the containers are filled and labeled in quantities of even liters (4 liters, 5 liters, 6 liters, etc.).
(c) *Tolerances.* The tolerances in fill are the same as are allowed by [§ 4.37](/current/title-27/section-4.37) in respect to statement of net contents on labels.
\[T.D. ATF-12, [39 FR 45223](https://www.federalregister.gov/citation/39-FR-45223), Dec. 31, 1974, as amended by T.D. ATF-49, [43 FR 19848](https://www.federalregister.gov/citation/43-FR-19848), May 9, 1978; T.D. ATF-76, [46 FR 1727](https://www.federalregister.gov/citation/46-FR-1727), Jan. 7, 1981; T.D. ATF-303, [55 FR 42713](https://www.federalregister.gov/citation/55-FR-42713), Oct. 23, 1990. Redesignated by T.D. ATF-953, [68 FR 39455](https://www.federalregister.gov/citation/68-FR-39455), July 2, 2003; T.D. TTB-165, [85 FR 85520](https://www.federalregister.gov/citation/85-FR-85520), Dec. 29, 2020; T.D. TTB-200, [90 FR 1875](https://www.federalregister.gov/citation/90-FR-1875), Jan. 20, 2025]
## Subpart I—General Provisions
#### § 4.80 Exports.
The regulations in this part shall not apply to wine exported in bond.
## Subpart J—American Grape Variety Names
#### Source:
T.D. ATF-370, [61 FR 539](https://www.federalregister.gov/citation/61-FR-539), Jan. 8, 1996, unless otherwise noted.
#### § 4.91 List of approved names.
The following grape variety names have been approved by the Administrator for use as type designations for American wines. When more than one name may be used to identify a single variety of grape, the synonym is shown in parentheses following the grape variety names. Grape variety names may appear on labels of wine in upper or in lower case, and may be spelled with or without the hyphens or diacritic marks indicated in the following list.
*Aglianico*
*Agawam*
*Albariño (Alvarinho)*
*Albemarle*
*Aleatico*
*Alicante Bouschet*
*Aligoté*
*Alvarelhão*
*Alvarinho (Albariño)*
*Arneis*
*Aurore*
*Auxerrois*
*Bacchus*
*Baco blanc*
*Baco noir*
*Barbera*
*Beacon*
*Beclan*
*Bellandais*
*Beta*
*Biancolella*
*Black Corinth*
*Black Malvoisie (Cinsaut)*
*Black Monukka*
*Black Muscat (Muscat Hamburg)*
*Black Pearl*
*Blanc Du Bois*
*Blaufränkish (Lemberger, Limberger)*
*Blue Eye*
*Bonarda*
*Bountiful*
*Brianna*
*Burdin 4672*
*Burdin 5201*
*Burdin 11042*
*Burgaw*
*Burger*
*Cabernet Diane*
*Cabernet Doré*
*Cabernet franc*
*Cabernet Pfeffer*
*Cabernet Sauvignon*
*Calzin*
*Campbell Early* (*Island Belle*)
*Canada Muscat*
*Canaiolo (Canaiolo Nero)*
*Canaiolo Nero (Canaiolo)*
*Captivator*
*Carignan (Carignane)*
*Carignane (Carignan)*
*Carlos*
*Carmenère*
*Carmine*
*Carnelian*
*Cascade*
*Castel 19-637*
*Catawba*
*Cayuga White*
*Centurion*
*Chambourcin*
*Chancellor*
*Charbono*
*Chardonel*
*Chardonnay*
*Chasselas doré*
*Chelois*
*Chenin blanc*
*Chief*
*Chowan*
*Cinsaut* (*Black Malvoisie*)
*Clairette blanche*
*Clinton*
*Colombard* (*French Colombard*)
*Colobel*
*Corot noir*
*Cortese*
*Corvina*
*Concord*
*Conquistador*
*Couderc noir*
*Counoise*
*Cowart*
*Creek*
*Crimson Cabernet*
*Cynthiana* (*Norton*)
*Dearing*
*De Chaunac*
*Delaware*
*Diamond*
*Dixie*
*Dolcetto*
*Doreen*
*Dornfelder*
*Dulcet*
*Durif (Petite Sirah)*
*Dutchess*
*Early Burgundy*
*Early Muscat*
*Edelweiss*
*Eden*
*Ehrenfelser*
*Ellen Scott*
*Elvira*
*Emerald Riesling*
*Erbaluce*
*Favorite*
*Feher Szagos*
*Fernão Pires*
*Fern Munson*
*Fiano*
*Flame Tokay*
*Flora*
*Florental*
*Folle blanche*
*Forastera*
*Fredonia*
*Freedom*
*Freisa*
*French Colombard (Colombard)*
*Frontenac*
*Frontenac gris*
*Fry*
*Fumé blanc (Sauvignon blanc)*
*Furmint*
*Gamay noir*
*Garnacha (Grenache, Grenache noir)*
*Garnacha blanca (Grenache blanc)*
*Garronet*
*Geneva Red 7*
*Gewürztraminer*
*Gladwin 113*
*Glennel*
*Gold*
*Golden Isles*
*Golden Muscat*
*Graciano*
*Grand Noir*
*Green Hungarian*
*Grenache (Garnacha, Grenache noir)*
*Grenache blanc (Garnacha blanca)*
*Grenache noir (Garnacha, Grenache)*
*Grignolino*
*Grillo*
*Gros Verdot*
*Grüner Veltliner*
*Helena*
*Herbemont*
*Higgins*
*Horizon*
*Hunt*
*Iona*
*Interlaken*
*Isabella*
*Island Belle (Campbell Early)*
*Ives*
*James*
*Jewell*
*Joannes Seyve 12-428*
*Joannes Seyve 23-416*
*Kerner*
*Kay Gray*
*Kleinberger*
*La Crescent*
*LaCrosse*
*Lagrein*
*Lake Emerald*
*Lambrusco*
*Landal*
*Landot noir*
*Lenoir*
*Léon Millot*
*Lemberger (Blaufränkish, Limberger)*
*Limberger (Blaufränkisch, Lemberger)*
*Louise Swenson*
*Lucie Kuhlmann*
*Madeline Angevine*
*Magnolia*
*Magoon*
*Malbec*
*Malvasia bianca (Moscato greco)*
*Mammolo*
*Maréchal Foch*
*Marquette*
*Marsanne*
*Mataro (Monastrell, Mourvèdre)*
*Melody*
*Melon (Melon de Bourgogne)*
*Melon de Bourgogne (Melon)*
*Merlot*
*Meunier (Pinot Meunier)*
*Mish*
*Mission*
*Missouri Riesling*
*Monastrell (Mataro, Mourvèdre)*
*Mondeuse (Refosco)*
*Montefiore*
*Montepulciano*
*Moore Early*
*Morio-Muskat*
*Moscato greco (Malvasia bianca)*
*Mourvèdre (Mataro)*
*Mourvèdre (Mataro, Monastrell)*
*Müller-Thurgau*
*Münch*
*Muscadelle*
*Muscat blanc (Muscat Canelli)*
*Muscat Canelli (Muscat blanc)*
*Muscat du Moulin*
*Muscat Hamburg (Black Muscat)*
*Muscat of Alexandria*
*Muscat Ottonel*
*Naples*
*Nebbiolo*
*Négrette*
*Negrara*
*Negro Amaro*
*Nero d'Avola*
*New York Muscat*
*Niagara*
*Noah*
*Noble*
*Noiret*
*Norton (Cynthiana)*
*Ontario*
*Orange Muscat*
*Palomino*
*Pamlico*
*Pedro Ximenes*
*Peloursin*
*Petit Bouschet*
*Petit Manseng*
*Petit Verdot*
*Petite Sirah (Durif)*
*Peverella*
*Picpoul (Piquepoul blanc)*
*Pinotage*
*Pinot blanc*
*Pinot Grigio (Pinot gris)*
*Pinot gris (Pinot Grigio)*
*Pinot Meunier (Meunier)*
*Pinot noir*
*Piquepoul blanc (Picpoul)*
*Prairie Star*
*Precoce de Malingre*
*Pride*
*Primitivo*
*Princess*
*Rayon d'Or*
*Ravat 34*
*Ravat 51 (Vignoles)*
*Ravat noir*
*Redgate*
*Refosco (Mondeuse)*
*Regale*
*Reliance*
*Riesling (White Riesling)*
*Rkatsiteli (Rkatziteli)*
*Rkatziteli (Rkatsiteli)*
*Roanoke*
*Rondinella*
*Rosette*
*Roucaneuf*
*Rougeon*
*Roussanne*
*Royalty*
*Rubired*
*Ruby Cabernet*
*St. Croix*
*St. Laurent*
*St. Pepin*
*St. Vincent*
*Sabrevois*
*Sagrantino*
*Saint Macaire*
*Salem*
*Salvador*
*Sangiovese*
*Sauvignon blanc (Fumé blanc)*
*Sauvignon gris*
*Scarlet*
*Scheurebe*
*Sémillon*
*Sereksiya*
*Seyval* (*Seyval blanc*)
*Seyval blanc (Seyval)*
*Shiraz (Syrah)*
*Siegerrebe*
*Siegfried*
*Southland*
*Souzão*
*Steuben*
*Stover*
*Sugargate*
*Sultanina* (*Thomspon Seedless*)
*Summit*
*Suwannee*
*Sylvaner*
*Symphony*
*Syrah* (*Shiraz*)
*Swenson Red*
*Tannat*
*Tarheel*
*Taylor*
*Tempranillo* (*Valdepeñas*)
*Teroldego*
*Thomas*
*Thompson Seedless* (*Sultanina*)
*Tinta Madeira*
*Tinto cão*
*Tocai Friulano*
*Topsail*
*Touriga*
*Traminer*
*Traminette*
*Trebbiano (Ugni blanc)*
*Trousseau*
*Trousseau gris*
*Ugni blanc* (*Trebbiano*)
*Valdepeñas (Tempranillo)*
*Valdiguié*
*Valerien*
*Valiant*
*Valvin Muscat*
*Van Buren*
*Veeblanc*
*Veltliner*
*Ventura*
*Verdelet*
*Verdelho*
*Vergennes*
*Vermentino*
*Vidal blanc*
*Vignoles (Ravat 51)*
*Villard blanc*
*Villard noir*
*Vincent*
*Viognier*
*Vivant*
*Welsch Rizling*
*Watergate*
*Welder*
*White Riesling (Riesling)*
*Wine King*
*Yuga*
*Zinfandel*
*Zinthiana*
*Zweigelt*
\[T.D. ATF-370, [61 FR 539](https://www.federalregister.gov/citation/61-FR-539), Jan. 8, 1996, as amended by T.D. ATF-417, [64 FR 49388](https://www.federalregister.gov/citation/64-FR-49388), Sept. 13, 1999; T.D. ATF-433, [65 FR 78096](https://www.federalregister.gov/citation/65-FR-78096), Dec. 14, 2000; T.D. ATF-466, [66 FR 49280](https://www.federalregister.gov/citation/66-FR-49280), Sept. 27, 2001; T.D. ATF-475, [67 FR 11918](https://www.federalregister.gov/citation/67-FR-11918), Mar. 18, 2002; T.D. ATF-481, [67 FR 56481](https://www.federalregister.gov/citation/67-FR-56481), Sept. 4, 2002; T.D. TTB-95, [76 FR 66628](https://www.federalregister.gov/citation/76-FR-66628), Oct. 25, 2011]
#### § 4.92 Alternative names permitted for temporary use.
The following alternative names shown in the left column may be used as the type designation for American wine in lieu of the name of the grape variety shown in the right column. Alternative names listed in the left column may only be used for wine bottled prior to the date indicated.
(a) *Wines bottled prior to January 1, 1997.*
## Alternative Name/Name
*Baco 1—Baco noir*
*Baco 22A—Baco blanc*
*Bastardo—Trousseau*
*Black Spanish—Lenoir*
*Burdin 7705—Florental*
*Cayuga—Cayuga White*
*Chancellor noir—Chancellor*
*Chasselas—Chasselas doré*
*Chevrier—Sémillon*
*Chelois noir—Chelois*
*Couderc 71-20—Couderc noir*
*Couderc 299-35—Muscat du Moulin*
*Foch—Maréchal Foch*
*Franken Riesling—Sylvaner*
*Gutedel—Chasselas doré*
*Ives Seedling—Ives*
*Jacquez—Lenoir*
*Joannes Seyve 26-205—Chambourcin*
*Landot 244—Landal*
*Landot 4511—Landot noir*
*Millot—Leon Millot*
*Moore's Diamond—Diamond*
*Norton Seedling—Norton*
*Pfeffer Cabernet—Cabernet Pfeffer*
*Pineau de la Loire—Chenin blanc*
*Pinot Chardonnay—Chardonnay*
*Ravat 262—Ravat noir*
*Ruländer—Pinot gris*
*Seibel 128—Salvador*
*Seibel 1000—Rosette*
*Seibel 4986—Rayon d'Or*
*Seibel 5279—Aurore*
*Seibel 5898—Rougeon*
*Seibel 7053—Chancellor*
*Seibel 8357—Colobel*
*Seibel 9110—Verdelet*
*Seibel 9549—De Chaunac*
*Seibel 10878—Chelois*
*Seibel 13053—Cascade*
*Seibel 14596—Bellandais*
*Seyve-Villard 5-276—Seyval*
*Seyve-Villard 12-309—Roucaneuf*
*Seyve-Villard 12-375—Villard blanc*
*Seyve-Villard 18-283—Garronet*
*Seyve-Villard 18-315—Villard noir*
*Seyve-Villard 23-410—Valerien*
*Sweetwater—Chasselas doré*
*Verdelet blanc—Verdelet*
*Vidal 256—Vidal blanc*
*Virginia Seedling—Norton*
*Wälschriesling—Welsch Rizling*
*Welschriesling—Welsch Rizling*
(b) *Wines bottled prior to January 1, 1999.*
## Alternative Name/Name
*Cabernet—Cabernet Sauvignon*
*Grey Riesling—Trousseau gris*
*Muscat Frontignan—Muscat blanc*
*Muscat Pantelleria—Muscat of Alexandria*
*Napa Gamay—Valdiquié*
*Pinot Saint George—Négrette*
*Sauvignon vert—Muscadelle*
(c) *Wines bottled prior to January 1, 2006.*
## Alternative Name/Name
*Johannisberg Riesling—Riesling*
(d) *Wines bottled prior to* October 29, 2012.
## Alternative Name/Name
*Agwam—Agawam*
\[T.D. ATF-370, [61 FR 539](https://www.federalregister.gov/citation/61-FR-539), Jan. 8, 1996, as amended by T.D. ATF-417, [64 FR 49388](https://www.federalregister.gov/citation/64-FR-49388), Sept. 13, 1999; T.D. TTB-95, [76 FR 66629](https://www.federalregister.gov/citation/76-FR-66629), Oct. 27, 2011]
#### § 4.93 Approval of grape variety names.
(a) Any interested person may petition the Administrator for the approval of a grape variety name. The petition may be in the form of a letter and should provide evidence of the following—
(1) Acceptance of the new grape variety,
(2) The validity of the name for identifying the grape variety,
(3) That the variety is used or will be used in winemaking, and
(4) That the variety is grown and used in the United States.
(b) For the approval of names of new grape varieties, documentation submitted with the petition to establish the items in [paragraph (a)](/current/title-27/section-4.93#p-4.93\(a\)) of this section may include—
(1) reference to the publication of the name of the variety in a scientific or professional journal of horticulture or a published report by a professional, scientific or winegrowers' organization,
(2) reference to a plant patent, if so patented, and
(3) information pertaining to the commercial potential of the variety, such as the acreage planted and its location or market studies.
(c) The Administrator will not approve a grape variety name if:
(1) The name has previously been used for a different grape variety;
(2) The name contains a term or name found to be misleading under [§ 4.39](/current/title-27/section-4.39); or
(3) The name of a new grape variety contains the term “Riesling.”
(d) For new grape varieties developed in the United States, the Administrator may determine if the use of names which contain words of geographical significance, place names, or foreign words are misleading under [§ 4.39](/current/title-27/section-4.39). The Administrator will not approve the use of a grape variety name found to be misleading.
(e) The Administrator shall publish the list of approved grape variety names at least annually in the Federal Register.
(Approved by the Office of Management and Budget under Control Number 1512-0513)
## Subpart K—Use of the Term “Organic”
#### § 4.101 Use of the term “organic.”
(a) Use of the term “organic” is optional and is treated as “additional information on labels” under [§ 4.38(f)](/current/title-27/section-4.38#p-4.38\(f\)).
(b) Any use of the term “organic” on a wine label or in advertising of wine must comply with the United States Department of Agriculture's (USDA) National Organic Program rules ([7 CFR part 205](/current/title-7/part-205)) as interpreted by the USDA.
(c) This section applies to labels and advertising that use the term “organic” on and after October 21, 2002.
\[T.D. ATF-483, [67 FR 62858](https://www.federalregister.gov/citation/67-FR-62858), Oct. 8, 2002]
# Part 40 — MANUFACTURE OF TOBACCO PRODUCTS, CIGARETTE PAPERS AND TUBES, AND PROCESSED TOBACCO
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-40
Full text of 27 CFR Part 40 — MANUFACTURE OF TOBACCO PRODUCTS, CIGARETTE PAPERS AND TUBES, AND PROCESSED TOBACCO. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 40—MANUFACTURE OF TOBACCO PRODUCTS, CIGARETTE PAPERS AND TUBES, AND PROCESSED TOBACCO
#### Authority:
[26 U.S.C. 448](https://www.govinfo.gov/link/uscode/26/448), [5701](https://www.govinfo.gov/link/uscode/26/5701), [5703-5705](https://www.govinfo.gov/link/uscode/26/5703), [5711-5713](https://www.govinfo.gov/link/uscode/26/5711), [5721-5723](https://www.govinfo.gov/link/uscode/26/5721), [5731-5734](https://www.govinfo.gov/link/uscode/26/5731), [5741](https://www.govinfo.gov/link/uscode/26/5741), [5751](https://www.govinfo.gov/link/uscode/26/5751), [5753](https://www.govinfo.gov/link/uscode/26/5753), [5761-5763](https://www.govinfo.gov/link/uscode/26/5761), [6061](https://www.govinfo.gov/link/uscode/26/6061), [6065](https://www.govinfo.gov/link/uscode/26/6065), [6109](https://www.govinfo.gov/link/uscode/26/6109), [6151](https://www.govinfo.gov/link/uscode/26/6151), [6301](https://www.govinfo.gov/link/uscode/26/6301), [6302](https://www.govinfo.gov/link/uscode/26/6302), [6311](https://www.govinfo.gov/link/uscode/26/6311), [6313](https://www.govinfo.gov/link/uscode/26/6313), [6402](https://www.govinfo.gov/link/uscode/26/6402), [6404](https://www.govinfo.gov/link/uscode/26/6404), [6423](https://www.govinfo.gov/link/uscode/26/6423), [6676](https://www.govinfo.gov/link/uscode/26/6676), [6806](https://www.govinfo.gov/link/uscode/26/6806), [7011](https://www.govinfo.gov/link/uscode/26/7011), [7212](https://www.govinfo.gov/link/uscode/26/7212), [7325](https://www.govinfo.gov/link/uscode/26/7325), [7342](https://www.govinfo.gov/link/uscode/26/7342), [7502](https://www.govinfo.gov/link/uscode/26/7502), [7503](https://www.govinfo.gov/link/uscode/26/7503), [7606](https://www.govinfo.gov/link/uscode/26/7606), [7805](https://www.govinfo.gov/link/uscode/26/7805); [31 U.S.C. 9301](https://www.govinfo.gov/link/uscode/31/9301), [9303](https://www.govinfo.gov/link/uscode/31/9303), [9304](https://www.govinfo.gov/link/uscode/31/9304), [9306](https://www.govinfo.gov/link/uscode/31/9306).
#### Source:
[26 FR 8174](https://www.federalregister.gov/citation/26-FR-8174), Aug. 31, 1961, unless otherwise noted. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975; [54 FR 48839](https://www.federalregister.gov/citation/54-FR-48839), Nov. 27, 1989, and further redesignated by T.D. ATF-460, [66 FR 39093](https://www.federalregister.gov/citation/66-FR-39093), July 27, 2001.
#### Editorial Note:
Nomenclature changes to part 40 appear by T.D. ATF-460, [66 FR 39094-39096](https://www.federalregister.gov/citation/66-FR-39094), July 27, 2001; T.D. ATF-464, [66 FR 43479](https://www.federalregister.gov/citation/66-FR-43479), Aug. 20, 2001; and T.D. TTB-91, [76 FR 5479](https://www.federalregister.gov/citation/76-FR-5479), Feb. 1, 2011.
## Subpart A—Scope of Regulations
#### § 40.1 Manufacture of tobacco products, cigarette papers and tubes, and processed tobacco.
This part contains regulations relating to the manufacture of tobacco products, cigarette papers and tubes, and processed tobacco; the payment by manufacturers of tobacco products and cigarette papers and tubes of internal revenue taxes imposed by [26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201); and the qualification of and operations by manufacturers of tobacco products, cigarette papers and tubes, and processed tobacco.
\[T.D. TTB-78, at [74 FR 29408](https://www.federalregister.gov/citation/74-FR-29408), June 22, 2009]
#### § 40.2 Territorial extent.
The provisions of the regulations in this part shall apply in the several States of the United States and the District of Columbia.
## Subpart B—Definitions
#### § 40.11 Meaning of terms.
When used in this part and in forms prescribed under this part, the following terms shall have the meanings given in this section, unless the context clearly indicates otherwise. Words in the plural form shall include the singular, and vice versa, and words indicating the masculine gender shall include the feminine. The terms “includes” and “including” do not exclude things not listed which are in the same general class.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.40, Delegation of the Administrator's Authorities in [27 CFR Part 40](/current/title-27/part-40), Manufacture of Tobacco Products and Cigarette Papers and Tubes.
*Bank.* Any commercial bank.
*Banking day.* Any day during which a bank is open to the public for carrying on substantially all its banking functions.
*CFR.* The Code of Federal Regulations.
*Chewing tobacco.* Any leaf tobacco that is not intended to be smoked.
*Cigar.* Any roll of tobacco wrapped in leaf tobacco or in any substance containing tobacco (other than any roll of tobacco which is a cigarette within the meaning of paragraph (2) of the definition for cigarette).
*Cigarette.*
(1) Any roll of tobacco wrapped in paper or in any substance not containing tobacco, and
(2) Any roll of tobacco wrapped in any substance containing tobacco which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette described in paragraph (1) of this definition.
*Cigarette paper.* Paper, or any other material except tobacco, prepared for use as a cigarette wrapper.
*Cigarette tube.* Cigarette paper made into a hollow cylinder for use in making cigarettes.
*Commercial bank.* A bank, whether or not a member of the Federal Reserve System, which has access to the Federal Reserve Communications System (FRCS) or Fedwire. The “FRCS” or “Fedwire” is a communications network that allows Federal Reserve System member banks to effect a transfer of funds for their customers (or other commercial banks) to the Treasury Account at the Federal Reserve Bank in New York.
*Determine.* To establish enough information about taxable products at the time of removal to calculate the tax, specifically the quantity (pounds or number) and kind (for example, cigarettes, snuff, paper tubes). Where the tax rate depends on additional information (such as number of cigarette papers to a set before January 1, 2000 or sale price of large cigars), that information must also be established as part of tax determination.
*Director of the service center.* The Director, Internal Revenue Service Center, in any of the Internal Revenue regions.
*District director.* A district director of internal revenue.
*Electronic fund transfer or EFT.* Any transfer of funds effected by a manufacturer's commercial bank, either directly or through a correspondent banking relationship, via the Federal Reserve Communications System (FRCS) or Fedwire to the Treasury Account at the Federal Reserve Bank of New York.
*Export warehouse.* A bonded internal revenue warehouse for the storage of tobacco products or cigarette papers or tubes or any processed tobacco, upon which the internal revenue tax has not been paid for subsequent shipment to a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States, or for consumption beyond the jurisdiction of the internal revenue laws of the United States.
*Export warehouse proprietor.* Any person who operates an export warehouse.
*Factory.* The premises of a manufacturer of tobacco products or processed tobacco as described in his permit issued under [26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201), or the premises of a manufacturer of cigarette papers and tubes on which such business is conducted.
*Fiscal year.* The period which begins October 1 and ends on the following September 30.
*In bond.* The status of tobacco products and cigarette papers and tubes, which come within the coverage of a bond securing the payment of internal revenue taxes imposed by [26 U.S.C. 5701](https://www.govinfo.gov/link/uscode/26/5701) or [7652](https://www.govinfo.gov/link/uscode/26/7652), and in respect to which such taxes have not been determined as provided by regulations in this chapter, including
(a) such articles in a factory,
(b) such articles removed, transferred, or released, pursuant to [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704), and with respect to which relief from the tax liability has not occurred, and
(c) such articles on which the tax has been determined, or with respect to which relief from the tax liability has occurred, which have been returned to the coverage of a bond.
*Large cigarettes.* Cigarettes weighing more than three pounds per thousand.
*Large cigars.* Cigars weighing more than three pounds per thousand.
*Manufacturer of cigarette papers and tubes.* Any person who manufactures cigarette paper, or makes up cigarette paper into tubes, except for his own personal use or consumption.
*Manufacturer of processed tobacco.* Any person who processes any tobacco other than tobacco products.
*Manufacturer of tobacco products.*
(1) Any person who manufactures cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own tobacco, other than:
(i) A person who produces tobacco products solely for that person's own consumption or use; or
(ii) A proprietor of a customs bonded manufacturing warehouse with respect to the operation of such warehouse.
(2) The term “Manufacturer of tobacco products” includes any person who for commercial purposes makes available for consumer use (including such consumer's personal consumption or use under paragraph (1)(i) of this definition) a machine capable of making cigarettes, cigars, or other tobacco products. A person making such a machine available for consumer use shall be deemed the person making the removal with respect to any tobacco products manufactured by such machine. A person who sells a machine directly to a consumer at retail for a consumer's personal home use is not making a machine available for commercial purposes if such machine is not used at a retail premises and is designed to produce tobacco products only in personal use quantities.
*Package.* The immediate container in which tobacco products, processed tobacco, or cigarette papers or tubes are put up by the manufacturer and offered for sale or delivery to the ultimate consumer. For purposes of this definition, a container of processed tobacco, the contents of which weigh 10 pounds or less (including any added non-tobacco ingredients or constituents), that is removed within the meaning of this part, for any purpose other than destruction, export, delivery as a sample to a manufacturer of processed tobacco or tobacco products for the purpose of soliciting orders of processed tobacco, or scientific testing or testing of equipment which results in the destruction of the processed tobacco or the return of the processed tobacco to the factory premises, is deemed to be a package offered for sale or delivery to the ultimate consumer. For appropriate tax rate, see [§ 40.25a](/current/title-27/section-40.25a).
*Packaging.* When used in the context of an action, the act of placing processed tobacco or a tobacco product in a package.
*Permit number.* The identifying number and/or letters that are assigned to a TTB permit by the appropriate TTB officer.
*Person.* An individual, partnership, association, company, corporation, estate, or trust.
*Pipe tobacco.* Any tobacco which, because of its appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or purchased by, consumers as tobacco to be smoked in a pipe.
*Processed tobacco.* Processed tobacco is any tobacco that has undergone processing, but does not include tobacco products. For purposes of this definition, the processing of tobacco does not include the farming or growing of tobacco or the handling of tobacco solely for sale, shipment, or delivery to a manufacturer of tobacco products or processed tobacco, nor does the processing of tobacco include curing, baling, or packaging activities. For purposes of this definition, the processing of tobacco includes, but is not limited to, stemming (that is, removing the stem from the tobacco leaf), fermenting, threshing, cutting, or flavoring the tobacco, or otherwise combining the tobacco with non-tobacco ingredients.
*Removal or remove.* The removal of tobacco products or cigarette papers or tubes, or any processed tobacco from the factory or release from customs custody, including the smuggling of other unlawful importation of such articles into the United States.
*Roll-your-own tobacco.* Any tobacco which, because of its appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or purchased by, consumers as tobacco for making cigarettes or cigars, or for use as wrappers of cigars or cigarettes.
*Sale price.* The price for which large cigars are sold by the U.S. manufacturer, determined in accordance with [§ 40.22](/current/title-27/section-40.22) and used for computation of the tax.
*Service center.* An Internal Revenue Service Center in any of the Internal Revenue regions.
*Service center director.* A director of an internal revenue service center.
*Sets.* Any collection, grouping, or packaging of cigarette papers made up by any person for delivery to the consumer as a unit.
*Small cigarettes.* Cigarettes weighing not more than three pounds per thousand.
*Small cigars.* Cigars weighing not more than three pounds per thousand.
*Smokeless tobacco.* Any snuff or chewing tobacco.
*Snuff.* Any finely cut, ground, or powdered tobacco that is not intended to be smoked.
*Special tax.* The special (occupational) tax on manufacturers of tobacco products, manufacturers of cigarette papers and tubes, and export warehouse proprietors, imposed by [26 U.S.C. 5731](https://www.govinfo.gov/link/uscode/26/5731).
*This chapter.* [Title 27, Code of Federal Regulations](/current/title-27), chapter I ([27 CFR chapter I](/current/title-27/chapter-I)).
*Tobacco products.* Cigars, cigarettes, smokeless tobacco, pipe tobacco, and roll-your-own tobacco.
*Treasury Account.* The Department of the Treasury's General Account at the Federal Reserve Bank of New York.
*TTB.* The Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury
*U.S.C.* The United States Code.
([26 U.S.C. 7805](https://www.govinfo.gov/link/uscode/26/7805) (68A Stat. 917), [27 U.S.C. 205](https://www.govinfo.gov/link/uscode/27/205) (49 Stat. 981 as amended), (82 Stat. 959), and Sec. 38, Arms Export Control Act (90 Stat. 744) Aug. 16, 1954, ch. 736, 68A Stat. 775, as amended ([26 U.S.C. 6301](https://www.govinfo.gov/link/uscode/26/6301)); June 29, 1956, ch. 462, 70 Stat. 391 ([26 U.S.C. 6301](https://www.govinfo.gov/link/uscode/26/6301)))
\[T.D. ATF-48, [43 FR 13553](https://www.federalregister.gov/citation/43-FR-13553), Mar. 31, 1978]
#### Editorial Note:
For Federal Register citations affecting [§ 40.11](/current/title-27/section-40.11), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
## Subpart C—Taxes
#### § 40.21 Cigar tax rates.
(a) Cigars are taxed at the following rates under [26 U.S.C. 5701(a)](https://www.govinfo.gov/link/uscode/26/5701):
| Type and amount | Tax rate for removals during the following periods: | |
| -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------- | ------------------- |
| 2002 to March 31, 2009 | April 1, 2009 and after | |
| Small cigars per thousand | \$1.828 | \$50.33 |
| Large cigars\* | | |
| • percentage of sale price | 20.719% | 52.750% |
| • but not to exceed— | \$48.75 per thousand | \$0.4026 per cigar. |
| | | |
| --- | --- | --- |
| \* For large cigars: Until March 31, 2009, the percentage tax rate applies when the sale price is $235.294 per thousand or less, and the flat tax rate applies when the sale price is more than $235.294 per thousand. On and after April 1, 2009, the percentage tax rate applies when the sale price is $763.222 or less per thousand cigars, and the flat tax rate applies when the sale price is more than $763.222 per thousand cigars. | | |
(b) See [§ 40.22 of this part](/current/title-27/part-40/section-40.22) for rules concerning determination of sale price of large cigars.
(c) Cigars not exempt from tax under [26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201) and the provisions of this part which are removed but not intended for sale shall be taxed at the same rate as similar cigars removed for sale.
\[T.D. ATF-420, [64 FR 71939](https://www.federalregister.gov/citation/64-FR-71939), Dec. 22, 1999, as amended by T.D. TTB-75, [74 FR 14481](https://www.federalregister.gov/citation/74-FR-14481), Mar. 31, 2009]
#### § 40.22 Determination of sale price of large cigars.
(a) *General rule.* The tax imposed on large cigars is computed based on the sale price (the price for which the large cigars are sold by the manufacturer). In addition to money, goods or services exchanged for cigars may be considered as part of the sale price.
(b) *Special cases* —
(1) *In general.* If there is any question concerning the applicable sale price for tax purposes, the appropriate TTB officer will determine such price, applying rules similar to the constructive sale price rules in [26 U.S.C. 4216(b)](https://www.govinfo.gov/link/uscode/26/4216) and the implementing regulations in [26 CFR 48.4216(b)-1](/current/title-26/section-48.4216%28b%29-1) through [48.4216(b)-4](/current/title-26/section-48.4216%28b%29-4). These constructive sale price rules apply to cigars sold by a manufacturer at retail, sold on consignment, or sold (otherwise than through an arm's length transaction) at less than the fair market price. Sales of cigars between affiliated corporations may be analyzed under the constructive sale price rules. The appropriate TTB officer may make this analysis on his or her own initiative or upon the written request of a manufacturer.
(2) *Adjustments in sale price* —
(i) *Reasons for adjustment.* Adjustments to the sale price may occur as a result of a discount or price increase by the manufacturer or as a result of a TTB determination pursuant to paragraph (b)(1) above. In either case, the manufacturer must make conforming changes to the tax that was computed on the sale price before the adjustment.
(ii) *Time of adjustment.* If an adjustment is made before the end of the same tax return period as the original determination of the tax, the adjustment may be made on the same return. If the price is increased or decreased retroactively (during a later return period), either by the manufacturer or by TTB's determination, the manufacturer must make an adjustment on the tax return for the current return period in which the price change was determined.
(iii) *Amount of adjustment.* The taxpayer must compute the adjustment to the tax as the difference between the tax that was paid and the tax that should have been paid, based on the newly determined sale price, together with interest thereon and any applicable penalties. The interest must be computed from the time of payment of the original tax until the time the adjustment was made. Upon request, the appropriate TTB officer will provide information regarding interest rates applicable to specific time periods and any applicable penalties.
(3) *Pricing for different packaging.* If different bona fide sale prices are applicable to different types of packaging (*e. g.,* boxes of 25 and boxes of 50), then the cigars in each type of packaging are taxed on the basis of their respective sale prices.
(4) *Pricing of seconds.* If some of an otherwise identical cigar brand and size:
(i) Are distinctive from other such cigars because of physical imperfections,
(ii) Are offered to the consumer through clear labeling as “imperfects”, “seconds”, “throw-outs”, or a comparable commonly understood term, and
(iii) The manufacturer has a separate sale price for such cigars, then they are taxed on the basis of this separate sale price.
(5) *Combination packages.* If a manufacturer has a sale price for a combination package containing cigars of different sizes, the cigars are taxed based on that combination sale price. If there is no sale price for the combination, then the cigars are taxed based on their individual sale prices.
(6) *Removals for another person.* If a manufacturer makes taxable removals of a brand and size of cigar only for distribution by others who establish the sale price, the tax is based on such sale price even though the manufacturer who makes the removals does not establish the price.
\[T.D. ATF-420, [64 FR 71939](https://www.federalregister.gov/citation/64-FR-71939), Dec. 22, 1999, as amended by T.D. TTB-91, [76 FR 5479](https://www.federalregister.gov/citation/76-FR-5479), Feb. 1, 2011; T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 40.23 Cigarette tax rates.
Cigarettes are taxed at the following rates under [26 U.S.C. 5701(b)](https://www.govinfo.gov/link/uscode/26/5701):
| Product | Tax rate per thousand for removals during the following periods: | |
| --------------------------------- | ----------------------------------------------------------------------------------------------------------------------- | -------- |
| 2002 to March 31, 2009 | April 1, 2009 and after | |
| Small cigarettes | \$19.50 | \$50.33 |
| Large cigarettes up to 61⁄2″ long | \$40.95 | \$105.69 |
| Large cigarettes over 61⁄2″ long | Taxed at the rate for small cigarettes, counting each 23⁄4″ or fraction thereof of the length of each as one cigarette. | |
\[T.D. TTB-75, [74 FR 14482](https://www.federalregister.gov/citation/74-FR-14482), Mar. 31, 2009]
#### § 40.24 Classification of cigarettes.
For tax purposes, small cigarettes are designated Class A and large cigarettes are designated Class B.
(72 Stat. 1414; [26 U.S.C. 5701](https://www.govinfo.gov/link/uscode/26/5701))
#### § 40.25 Smokeless tobacco tax rates.
Smokeless tobacco products are taxed at the following rates under [26 U.S.C. 5701(e)](https://www.govinfo.gov/link/uscode/26/5701):
| Product | Tax rate per pound\* for removals during the following periods: | |
| ---------------------------------------- | --------------------------------------------------------------- | --------- |
| 2002 to March 31, 2009 | April 1, 2009 and after | |
| Snuff | \$ 0.585 | \$ 1.51 |
| Chewing tobacco | \$ 0.195 | \$ 0.5033 |
| | | |
| --- | --- | --- |
| \* Prorate tax for fractions of a pound. | | |
\[T.D. TTB-75, [74 FR 14482](https://www.federalregister.gov/citation/74-FR-14482), Mar. 31, 2009]
#### § 40.25a Pipe tobacco and roll-your-own tobacco tax rates and classification.
(a) *Tax rates.* Pipe tobacco and roll-your-own tobacco are taxed at the following rates under [26 U.S.C. 5701(f)](https://www.govinfo.gov/link/uscode/26/5701) and [(g)](https://www.govinfo.gov/link/uscode/26/5701), respectively:
| Product | Tax rate per pound\* for removals during the following periods: | |
| ---------------------------------------- | --------------------------------------------------------------- | --------- |
| 2002 to March 31, 2009 | April 1, 2009 and after | |
| Pipe tobacco | \$ 1.0969 | \$ 2.8311 |
| Roll-your-own tobacco | \$ 1.0969 | \$ 24.78 |
| | | |
| --- | --- | --- |
| \* Prorate tax for fractions of a pound. | | |
(b) *Classification.*
(1) Pipe tobacco and roll-your-own tobacco, before removal subject to tax, must be put up in packages that conform to the requirements of [§§ 40.211](/current/title-27/section-40.211) and [40.212](/current/title-27/section-40.212), and of [§ 40.216a](/current/title-27/section-40.216a) or [§ 40.216b](/current/title-27/section-40.216b) as appropriate.
(2) Any tobacco that has been processed and that is removed in a package, as that term is defined in [§ 40.11](/current/title-27/section-40.11), that does not bear the notice for smokeless tobacco prescribed in [§ 40.216](/current/title-27/section-40.216) or the notice for pipe tobacco prescribed in [§ 40.216a](/current/title-27/section-40.216a) is deemed to be roll-your-own tobacco and subject to tax at the rate applicable to roll-your-own tobacco. A container of processed tobacco, the contents of which weigh 10 pounds or less (including any added non-tobacco ingredients or constituents), that is removed within the meaning of this part for any purpose other than destruction, export, delivery as a sample to a manufacturer of processed tobacco or tobacco products for the purpose of soliciting orders of processed tobacco, or scientific testing or testing of equipment which results in the destruction of the processed tobacco or the return of the processed tobacco to the factory premises, is deemed to be a package offered for sale or delivery to the ultimate consumer.
(3) Subject to [paragraph (b)(4)](/current/title-27/section-40.25a#p-40.25a\(b\)\(4\)) of this section, any tobacco that has been processed and that is removed in a package, as that term is defined in [§ 40.11](/current/title-27/section-40.11), is deemed to be roll-your-own tobacco and subject to tax at the rate applicable to roll-your-own tobacco, even though the package bears the notice required for pipe tobacco under [§ 40.216a](/current/title-27/section-40.216a), if:
(i) The package does not bear the declaration “pipe tobacco” in direct conjunction with, parallel to, and in substantially the same conspicuousness of type and background as the brand name each time the brand name appears on the package; or
(ii) The package or accompanying materials bear any representation that would suggest a use other than as pipe tobacco. ([26 U.S.C. 5702](https://www.govinfo.gov/link/uscode/26/5702) and [5723](https://www.govinfo.gov/link/uscode/26/5723)) The term 'accompanying materials' includes, but is not limited to, any point of sale advertising or other printed product communications issued by the manufacturer or importer of pipe tobacco products. In addition, the inclusion of cigarette papers or tubes in a package bearing a 'pipe tobacco' declaration will suggest a use other than pipe tobacco.
(4) During the period from June 22, 2009, through March 23, 2010, manufacturers may continue to remove products as pipe tobacco in packages that do not bear the declaration “pipe tobacco” in the manner prescribed in [paragraph (b)(3)(i)](/current/title-27/section-40.25a#p-40.25a\(b\)\(3\)\(i\)) of this section.
\[T.D. TTB-75, [74 FR 14482](https://www.federalregister.gov/citation/74-FR-14482), Mar. 31, 2009, as amended by T.D. TTB-78, [74 FR 29408](https://www.federalregister.gov/citation/74-FR-29408), June 22, 2009; T.D. TTB-81, [74 FR 48653](https://www.federalregister.gov/citation/74-FR-48653), Sept. 24, 2009; T.D. TTB-104, [77 FR 37302](https://www.federalregister.gov/citation/77-FR-37302), June 21, 2012]
#### § 40.26 Persons liable for tax.
The manufacturer of tobacco products shall be liable for the taxes imposed on tobacco products by [26 U.S.C. 5701](https://www.govinfo.gov/link/uscode/26/5701): *Provided,* That when tobacco products are transferred in bond pursuant to [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704), to the bonded premises of another such manufacturer or an export warehouse proprietor, the transferee shall become liable for the tax upon receipt by him of such products and the transferor shall thereupon be relieved of his liability for the tax. When tobacco products are released in bond from customs custody for transfer to the bonded premises of a manufacturer of tobacco products, the transferee shall become liable for the tax on such products upon release from customs custody. Any person who possesses tobacco products in violation of [26 U.S.C. 5751(a)(1)](https://www.govinfo.gov/link/uscode/26/5751) or [(2)](https://www.govinfo.gov/link/uscode/26/5751), shall be liable for a tax equal to the tax on such products.
(Sec. 201, Pub. L. 85-859, 72 Stat 1415, as amended, 1424, as amended ([26 U.S.C. 5703](https://www.govinfo.gov/link/uscode/26/5703), [5751](https://www.govinfo.gov/link/uscode/26/5751)))
\[T.D. 6871, [31 FR 32](https://www.federalregister.gov/citation/31-FR-32), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55854](https://www.federalregister.gov/citation/44-FR-55854), Sept. 28, 1979; T.D. ATF-232, [51 FR 28080](https://www.federalregister.gov/citation/51-FR-28080), Aug. 5, 1986; T.D. ATF-243, [52 FR 43194](https://www.federalregister.gov/citation/52-FR-43194), Dec. 1, 1986]
#### § 40.27 Assessment.
Whenever any person required by law to pay tax on tobacco products fails to pay such tax, the tax shall be ascertained and assessed against such person, subject to the limitations prescribed in [26 U.S.C. 6501](https://www.govinfo.gov/link/uscode/26/6501). The tax so assessed shall be in addition to the penalties imposed by law for failure to pay such tax when required. Except in cases where delay may jeopardize collection of the tax, or where the amount is nominal or the result of an evident mathematical error, no such assessment shall be made until and after notice has been afforded such person to show cause against assessment. The person will be allowed 45 days from the date of such notice to show cause, in writing, against such assessment.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1415, as amended ([26 U.S.C. 5703](https://www.govinfo.gov/link/uscode/26/5703)))
\[T.D. 6871, [31 FR 32](https://www.federalregister.gov/citation/31-FR-32), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55854](https://www.federalregister.gov/citation/44-FR-55854), Sept. 28, 1979; T.D. ATF-232, [51 FR 28080](https://www.federalregister.gov/citation/51-FR-28080), Aug. 5, 1986; T.D. ATF-243, [52 FR 43194](https://www.federalregister.gov/citation/52-FR-43194), Dec. 1, 1986]
## Subpart Ca—Special (Occupational) Taxes
#### Source:
T.D. ATF-271, [53 FR 17560](https://www.federalregister.gov/citation/53-FR-17560), May 17, 1988, unless otherwise noted.
#### § 40.31 Liability for special tax.
(a) *Manufacturer of tobacco products.* Every manufacturer of tobacco products shall pay a special (occupational) tax at a rate specified by [§ 40.32](/current/title-27/section-40.32). The tax shall be paid on or before the date of commencing the business of manufacturing tobacco products, and thereafter every year on or before July 1. On commencing business, the tax shall be computed from the first day of the month in which liability is incurred, through the following June 30. Thereafter, the tax shall be computed for the entire year (July 1 through June 30).
(b) \[Reserved]
(c) *Each place of business taxable.* A manufacturer of tobacco products incurs special tax liability at each place of business in which an occupation subject to special tax is conducted. A place of business means the entire office, plant or area of the business in any one location under the same proprietorship. Passageways, streets, highways, rail crossings, waterways, or partitions dividing the premises are not sufficient separation to require additional special tax, if the divisions of the premises are otherwise contiguous.
(d) *Payment of tax.* Special tax must be paid by return. The prescribed return is TTB Form 5630.5t, Special Tax Registration and Return—Tobacco. Special tax returns, with payment of tax, must be filed with TTB in accordance with the instructions on the form and the requirements of [subpart D of part 46 of this chapter](/current/title-27/part-46/subpart-D).
([26 U.S.C. 5731](https://www.govinfo.gov/link/uscode/26/5731), [5733](https://www.govinfo.gov/link/uscode/26/5733))
\[T.D. ATF-271, [53 FR 17560](https://www.federalregister.gov/citation/53-FR-17560), May 17, 1988, as amended by T.D. TTB-79, [74 FR 37419](https://www.federalregister.gov/citation/74-FR-37419), July 28, 2009; T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 40.32 Rates of special tax.
(a) *General.* Title 26 U.S.C. 5731(a)(1) imposes a special tax of \$1,000 per year on every manufacturer of tobacco products.
(b) *Reduced rate for small proprietors.* Title 26 U.S.C. 5731(b) provides for a reduced rate of $500 per year with respect to any manufacturer of tobacco products whose gross receipts (for the most recent taxable year ending before the first day of the taxable period to which the special tax imposed by [§ 40.31](/current/title-27/section-40.31) relates) are less than $500,000. The “taxable year” to be used for determining gross receipts is the taxpayer's income tax year. All gross receipts of the taxpayer shall be included, not just the gross receipts of the business subject to special tax. Proprietors of new businesses that have not yet begun a taxable year, as well as proprietors of existing businesses that have not yet ended a taxable year, who commence a new activity subject to special tax, qualify for the reduced special (occupational) tax rate, unless the business is a member of a “controlled group”; in that case, the rules of [paragraph (c)](/current/title-27/section-40.32#p-40.32\(c\)) of this section shall apply.
(c) *Controlled group.* All persons treated as one taxpayer under [26 U.S.C. 5061(e)(3)](https://www.govinfo.gov/link/uscode/26/5061) shall be treated as one taxpayer for the purpose of determining gross receipts under [paragraph (b)](/current/title-27/section-40.32#p-40.32\(b\)) of this section. “Controlled group” means a controlled group of corporations, as defined in [26 U.S.C. 1563](https://www.govinfo.gov/link/uscode/26/1563) and implementing regulations in [26 CFR 1.1563-1](/current/title-26/section-1.1563-1) through [1.1563-4](/current/title-26/section-1.1563-4), except that the words “at least 80 percent” shall be replaced by the words “more than 50 percent” in each place they appear in subsection (a) of [26 U.S.C. 1563](https://www.govinfo.gov/link/uscode/26/1563), as well as in the implementing regulations. Also, the rules for a “controlled group of corporations” apply in a similar fashion to groups which include partnerships and/or sole proprietorships. If one entity maintains more than 50% control over a group consisting of corporations and one, or more, partnerships and/or sole proprietorships, all of the members of the controlled group are one taxpayer for the purpose of this section.
(d) *Short taxable year.* Gross receipts for any taxable year of less than 12 months shall be annualized by multiplying the gross receipts for the short period by 12 and dividing the result by the number of months in the short period as required by [26 U.S.C. 448(c)(3)](https://www.govinfo.gov/link/uscode/26/448).
(e) *Returns and allowances.* Gross receipts for any taxable year shall be reduced by returns and allowances made during such year under [26 U.S.C. 448(c)(3)](https://www.govinfo.gov/link/uscode/26/448).
([26 U.S.C. 448](https://www.govinfo.gov/link/uscode/26/448), [5061](https://www.govinfo.gov/link/uscode/26/5061), [5731](https://www.govinfo.gov/link/uscode/26/5731))
#### § 40.33 Cross reference.
For additional rules pertaining to liability for special tax, filing special tax returns, issuance and examination of special (occupational) tax stamps, and notification of changes to special tax stamps, see [subpart D of part 46 of this chapter](/current/title-27/part-46/subpart-D).
\[T.D. TTB-79, [74 FR 37419](https://www.federalregister.gov/citation/74-FR-37419), July 28, 2009]
#### §§ 40.34-40.36 \[Reserved]
## Subpart D—Administrative Provisions
#### § 40.41 Forms prescribed.
(a) The appropriate TTB officer is authorized to prescribe all forms required by this part. All of the information called for in each form shall be furnished as indicated by the headings on the form and the instructions on or pertaining to the form. In addition, information called for in each form shall be furnished as required by this part. When a return, form, claim, or other document called for under this part is required by this part, or by the document itself, to be executed under penalties of perjury, it shall be executed under penalties of perjury.
(b) Forms prescribed by this part are available for printing through the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
([5 U.S.C. 552(a)](https://www.govinfo.gov/link/uscode/5/552) (80 Stat. 383, as amended))
\[T.D. ATF-92, [46 FR 46921](https://www.federalregister.gov/citation/46-FR-46921), Sept. 23, 1981, as amended by T.D. ATF-232, [51 FR 28080](https://www.federalregister.gov/citation/51-FR-28080), Aug. 5, 1986; T.D. ATF-243, [52 FR 43194](https://www.federalregister.gov/citation/52-FR-43194), Dec. 1, 1986; T.D. ATF-372, [61 FR 20725](https://www.federalregister.gov/citation/61-FR-20725), May 8, 1996; T.D. TTB-44, [71 FR 16949](https://www.federalregister.gov/citation/71-FR-16949), Apr. 4, 2006; T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 40.42 Authority of Appropriate TTB officers to enter premises.
Any appropriate TTB officer may enter in the daytime any premises where tobacco products are produced or kept, so far as it may be necessary for the purpose of examining such products. When such premises are open at night, any appropriate TTB officer may enter them, while so open, in the performance of his official duties. The owner of such premises, or person having the superintendence of the same, who refuses to admit any appropriate TTB officer or permit him to examine such products shall be liable to the penalties prescribed by law for the offense.
(68A Stat. 872, 903; [26 U.S.C. 7342](https://www.govinfo.gov/link/uscode/26/7342), [7606](https://www.govinfo.gov/link/uscode/26/7606))
\[T.D. 6871, [31 FR 33](https://www.federalregister.gov/citation/31-FR-33), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975; T.D. ATF-232, [51 FR 28080](https://www.federalregister.gov/citation/51-FR-28080), Aug. 5, 1986; T.D. ATF-243, [52 FR 43194](https://www.federalregister.gov/citation/52-FR-43194), Dec. 1, 1986; T.D. TTB-91, [76 FR 5479](https://www.federalregister.gov/citation/76-FR-5479), Feb. 1, 2011]
#### § 40.43 Interference with administration.
Whoever, corruptly or by force or threats of force, endeavors to hinder or obstruct the administration of this part, or endeavors to intimidate or impede any TTB officer acting in his official capacity, or forcibly rescues or attempts to rescue or causes to be rescued any property, after it has been duly seized for forfeiture to the United States in connection with a violation of the internal revenue laws, shall be liable to the penalties prescribed by law.
(68A Stat. 855; [26 U.S.C. 7212](https://www.govinfo.gov/link/uscode/26/7212))
#### § 40.44 Disposal of forfeited, condemned, and abandoned tobacco products.
A Federal, State, or local officer shall not sell or cause to be sold for consumption in the United States any forfeited, condemned, or abandoned tobacco products in his custody upon which the Federal tax has not been paid, if in his opinion the sale thereof will not bring a price equal to the tax due and payable thereon and the expenses incident to the sale thereof. Where the products are not sold the officer may deliver them to a Federal or State hospital or institution (if they are fit for consumption) or cause their destruction by burning completely or by rendering them unfit for consumption. Where such products are sold they shall be released by the officer having custody thereof only after they are properly packaged and taxpaid. A receipt from the appropriate TTB officer evidencing payment of tax on such products shall be presented to the officer having custody of the products, which tax shall be considered part of the sales price. Where tobacco products which have been packaged under the provisions of [part 44](/current/title-27/part-44) or [part 45 of this chapter](/current/title-27/part-45) are to be released after payment of tax, the purchaser shall appropriately mark each package “Federal Tax Paid (date)” before the officer having custody of the products releases them:
*Provided,* That if the purchaser is a qualified manufacturer of tobacco products, or for products packaged under part 44 a qualified export warehouse proprietor, the products may be released without such marking of the packages if the manufacturer or proprietor does not intend to place such products on the domestic market for taxable products but will dispose of them otherwise, such as by destruction or return to bond through claim for refund, and files a written statement to that effect, in original only, with the officer having custody of the products. In the case of products forfeited under the internal revenue laws the sale shall be subject to the provisions of [part 72 of this chapter](/current/title-27/part-72).
(68A Stat. 870, as amended, 72 Stat. 1425, as amended; [26 U.S.C. 7325](https://www.govinfo.gov/link/uscode/26/7325), [5753](https://www.govinfo.gov/link/uscode/26/5753))
\[T.D. 6961, [33 FR 9488](https://www.federalregister.gov/citation/33-FR-9488), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28080](https://www.federalregister.gov/citation/51-FR-28080), Aug. 5, 1986; T.D. ATF-243, [52 FR 43194](https://www.federalregister.gov/citation/52-FR-43194), Dec. 1, 1986; T.D. ATF-251, [52 FR 19339](https://www.federalregister.gov/citation/52-FR-19339), May 22, 1987; T.D. ATF-469, [66 FR 56758](https://www.federalregister.gov/citation/66-FR-56758), Nov. 13, 2001; T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 40.45 Alternate methods or procedures.
A manufacturer of tobacco products, on specific approval by the appropriate TTB officer as provided in this section, may use an alternate method or procedure in lieu of a method or procedure specifically prescribed in this part. The appropriate TTB officer may approve an alternate method or procedure, subject to stated conditions, when he finds that—
(a) Good cause has been shown for the use of the alternate method or procedure,
(b) The alternate method or procedure is within the purpose of, and consistent with the effect intended by, the specifically prescribed method or procedure, and affords equivalent security to the revenue, and
(c) The alternate method or procedure will not be contrary to any provision of law, and will not result in an increase in cost to the Government or hinder the effective administration of this part.
No alternate method or procedure relating to the giving of any bond or to the assessment, payment, or collection of tax, shall be authorized under this section. Where a manufacturer desires to employ an alternate method or procedure, he shall submit a written application to do so, in triplicate, to the appropriate TTB officer. The application shall specifically describe the proposed alternate method or procedure, and shall set forth the reasons therefor. Alternate methods or procedures shall not be employed until the application has been approved by the appropriate TTB officer. The manufacturer shall, during the period of authorization of an alternate method or procedure, comply with the terms of the approved application. Authorization for any alternate method or procedure may be withdrawn whenever in the judgment of the appropriate TTB officer the revenue is jeopardized or the effective administration of this part is hindered. The manufacturer shall retain, as part of his records, any authorization of the appropriate TTB officer under this section.
#### § 40.46 Emergency variations from requirements.
The appropriate TTB officer may approve methods of operation other than as specified in this part, where he finds that an emergency exists and the proposed variations from the specified requirements are necessary, and the proposed variations—
(a) Will afford the security and protection to the revenue intended by the prescribed specifications.
(b) Will not hinder the effective administration of this part, and
(c) Will not be contrary to any provision of law.
Variations from requirements granted under this section are conditioned on compliance with the procedures, conditions, and limitations set forth in the approval of the application. Failure to comply in good faith with such procedures, conditions, and limitations shall automatically terminate the authority for such variations and the manufacturer thereupon shall fully comply with the prescribed requirements of regulations from which the variations were authorized. Authority for any variations may be withdrawn whenever in the judgment of the appropriate TTB officer the revenue is jeopardized or the effective administration of this part is hindered by the continuation of such variation. Where a manufacturer desires to employ such variation, he shall submit a written application to do so, in triplicate, to the appropriate TTB officer. The application shall describe the proposed variations and set forth the reasons therefor. Variations shall not be employed until the application has been approved. The manufacturer shall retain, as part of his records, any authorization of the appropriate TTB officer under this section.
#### § 40.47 Other businesses within factory.
(a) *General.* The appropriate TTB officer may authorize such other businesses within the factory of a manufacturer of tobacco products as he finds will not jeopardize the revenue, will not hinder the effective administration of this part, and will not be contrary to law. A manufacturer of tobacco products who wishes to engage in another business within the factory must submit a written application to do so to the appropriate TTB officer. Except as otherwise provided in [paragraph (b)](/current/title-27/section-40.47#p-40.47\(b\)) of this section, a manufacturer of tobacco products may not engage in such other business until the application is approved by the appropriate TTB officer. The manufacturer must retain as part of its records any authorization provided under this section.
(b) *Processed tobacco.* A manufacturer of tobacco products may engage in certain activities related to processed tobacco without an approval under [paragraph (a)](/current/title-27/section-40.47#p-40.47\(a\)) of this section. [Section 40.72(b)](/current/title-27/section-40.72#p-40.72\(b\)) specifies the activities and circumstances that do not require authorization to engage in another business as well as those activities and circumstances that do.
\[T.D. TTB-78, [74 FR 29408](https://www.federalregister.gov/citation/74-FR-29408), June 22, 2009, as amended by T.D. TTB-104, [77 FR 37302](https://www.federalregister.gov/citation/77-FR-37302), June 21, 2012]
#### § 40.48 Penalties and forfeitures.
Anyone who fails to comply with the provisions of this part becomes liable to the civil and criminal penalties, and forfeitures, provided by law.
(72 Stat. 1425, 1426; [26 U.S.C. 5761](https://www.govinfo.gov/link/uscode/26/5761), [5762](https://www.govinfo.gov/link/uscode/26/5762), [5763](https://www.govinfo.gov/link/uscode/26/5763))
#### § 40.49 Delegations of the Administrator.
Most of the regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.40, Delegation of the Administrator's Authorities in [27 CFR Part 40](/current/title-27/part-40), Manufacture of Tobacco Products and Cigarette Papers and Tubes. You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-44, [71 FR 16949](https://www.federalregister.gov/citation/71-FR-16949), Apr. 4, 2006, as amended by T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
## Subpart E—Qualification Requirements for Manufacturers of Tobacco Products
#### § 40.61 Qualification.
(a) *General.* Except as otherwise provided in [paragraph (b)](/current/title-27/section-40.61#p-40.61\(b\)) of this section, every person who manufactures tobacco products must qualify for, and obtain, a permit as a manufacturer of tobacco products in accordance with the provisions of this part.
(b) *Exceptions.* The following persons are not considered to be engaged in the business of manufacturing tobacco products for purposes of this part:
(1) A person who produces tobacco products solely for that person's own consumption or use;
(2) A proprietor of a customs bonded manufacturing warehouse with respect to the operation of such warehouse;
(3) A retailer of tobacco products, such as a tobacconist, who takes taxpaid tobacco products out of the package, as that term is defined in [§ 40.11](/current/title-27/section-40.11), in front of waiting customers and places the tobacco products into a different container for immediate delivery to those customers; or
(4) A person whose operations are limited to, and who holds a permit as, a manufacturer of processed tobacco.
(c) *Minimum manufacturing and activity requirements.* A permit to manufacture tobacco products will only be granted to those persons whose principal business activity under such permit will be the manufacture of tobacco products. A permit will not be granted to any person whose principal business activity under such permit will be to receive or transfer tobacco products in bond. As a minimum activity requirement, in order to qualify for a permit, the quantity of tobacco products manufactured under the permit must be equivalent to, or exceed, the quantity to be transferred or received in bond under the permit. For the purposes of this section, the activity of packaging processed tobacco may be sufficient to qualify as a manufacturing activity.
\[T.D. TTB-78, [74 FR 29409](https://www.federalregister.gov/citation/74-FR-29409), June 22, 2009]
#### § 40.61a Transitional rule.
Any person who:
(a) On August 5, 1997, was engaged in business as a manufacturer of roll-your-own tobacco, and
(b) Before January 1, 2000, submits an application, as provided in this part, to engage in such business, may, continue to engage in such business pending final action on such application. Pending such final action, all provisions of chapter 52 of the Internal Revenue Code of 1986 shall apply to such applicant in the same manner and to the same extent as if such applicant were a holder of a permit to manufacture roll-your-own tobacco under such chapter 52.
\[T.D. ATF-424, [64 FR 71931](https://www.federalregister.gov/citation/64-FR-71931), Dec. 22, 1999]
#### § 40.62 Application for permit.
Every person, before commencing business as a manufacturer of tobacco products as defined in [§ 40.11](/current/title-27/section-40.11), shall make application for, and obtain, the permit provided in [§ 40.75](/current/title-27/section-40.75), covering operations at each proposed factory. Such application shall be made on TTB F 5200.3, in duplicate, to the appropriate TTB officer. All documents required under this part to be furnished with such application shall be made a part thereof. Where the applicant for a permit under this section holds a permit or permits authorizing the production of any tobacco products at premises to be covered by the permit applied for, the applicant shall surrender such permit or permits for cancellation, upon the issuance of the permit applied for.
(72 Stat. 1421; [26 U.S.C 5712](https://www.govinfo.gov/link/uscode/26/5712))
#### § 40.63 Corporate documents.
Every corporation, before commencing business as a manufacturer of tobacco products, shall furnish with its application for permit, required by [§ 40.62](/current/title-27/section-40.62), a true copy of the corporate charter or a certificate of corporate existence or incorporation executed by the appropriate officer of the State in which incorporated. The corporation shall likewise furnish duly authenticated extracts of the stockholders' meetings, bylaws, or directors' meetings, listing the offices the incumbents of which are authorized to sign documents or otherwise act in behalf of the corporation in matters relating to [26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201), and regulations issued thereunder. The corporation shall also furnish evidence, in duplicate, of the identity of the officers and directors and each person who holds more than ten percent of the stock of such corporation. Where any of the information required by this section has previously been filed with the appropriate TTB officer and such information is currently complete and accurate, a written statement to that effect, in duplicate, will be sufficient for the purpose of this section.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1421, as amended ([26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712)))
\[T.D. 6840, [30 FR 9310](https://www.federalregister.gov/citation/30-FR-9310), July 27, 1965. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55854](https://www.federalregister.gov/citation/44-FR-55854), Sept. 28, 1979]
#### § 40.64 Articles of partnership or association.
Every partnership or association, before commencing business as a manufacturer of tobacco products, shall furnish with its application for permit, required by [§ 40.62](/current/title-27/section-40.62), a true copy of the articles of partnership or association, if any, or certificate of partnership or association where required to be filed by any State, county, or municipality. Where a partnership or association has previously filed such documents with the appropriate TTB officer and such documents are currently complete and accurate, a written statement, in duplicate, to that effect by the partnership or association will be sufficient for the purpose of this section.
(72 Stat. 1421; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
#### § 40.65 Trade name certificate.
Every person, before commencing business under a trade name as a manufacturer of tobacco products, shall furnish with his application for permit, required by [§ 40.62](/current/title-27/section-40.62), a true copy of the certificate or other document, if any, issued by a State, county, or municipal authority in connection with the transaction of business under such trade name. If no such certificate or other document is so required, a written statement, in duplicate, to that effect by such person will be sufficient for the purpose of this section.
(72 Stat. 1421; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
#### § 40.66 Bond.
Every person, before commencing business as a manufacturer of tobacco products, shall file, in connection with his application for permit, a bond on TTB F 5200.29 (or TTB F 5200.25 or 5200.26), in duplicate, in accordance with the applicable provisions of [subpart G of this part](/current/title-27/part-40/subpart-G), conditioned upon compliance with the provisions of chapter 52, I.R.C., and regulations thereunder, including, but not limited to, the timely payment of taxes imposed by such chapter and penalties and interest in connection therewith for which he may become liable to the United States: *Provided,* That any person who, on the effective date of this part, October 1, 1961, has on file a valid and adequate bond, Form 2100, “Bond—Manufacturer of Cigars and Cigarettes,” may continue, under such bond, the operations with respect to the permit to which that bond relates, in accordance with the provisions of this part.
(72 Stat. 1421, as amended; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
\[T.D. 6871, [31 FR 33](https://www.federalregister.gov/citation/31-FR-33), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 40.67 Blanket bond.
Where a manufacturer of tobacco products operates more than one factory he may, in lieu of filing separate bonds, file a blanket bond on TTB F 5200.29 (or TTB F 5200.25 or 5200.26), in duplicate, in accordance with the provisions of [§ 40.134](/current/title-27/section-40.134), for any or all of the factories. The total amount of any blanket bond given under this section shall be available for the satisfaction of any liability incurred at any factory covered by the bond.
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
\[[26 FR 8174](https://www.federalregister.gov/citation/26-FR-8174), Aug. 31, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975; [54 FR 48839](https://www.federalregister.gov/citation/54-FR-48839), Nov. 27, 1989, and further redesignated by T.D. ATF-460, [66 FR 39093](https://www.federalregister.gov/citation/66-FR-39093), July 27, 2001, as amended by T.D. TTB-91, [76 FR 5480](https://www.federalregister.gov/citation/76-FR-5480), Feb. 1, 2011; T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 40.68 Power of attorney.
If the application for permit or any report, return, notice, schedule, or other document required to be executed is to be signed by an individual (including one of the partners for a partnership or one of the members of an association) as an attorney in fact for any person, or if an individual is to otherwise officially represent such person, power of attorney on TTB F 5000.8 shall be furnished to the appropriate TTB officer. (For power of attorney in connection with conference and practice requirements see [26 CFR 601.501](/current/title-26/section-601.501) through [601.527](/current/title-26/section-601.527).) Such power of attorney is not required for persons whose authority is furnished with the corporate documents as required by [§ 40.63](/current/title-27/section-40.63). TTB F 5000.8 does not have to be filed again with an appropriate TTB officer where such form has previously been submitted to that appropriate TTB officer and is still in effect.
\[T.D. 6840, [30 FR 9310](https://www.federalregister.gov/citation/30-FR-9310), July 27, 1965. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. TTB-91, [76 FR 5480](https://www.federalregister.gov/citation/76-FR-5480), Feb. 1, 2011; T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 40.69 Factory premises.
The premises to be used by a manufacturer of tobacco products as his factory may consist of more than one building, or portions of buildings, which need not be contiguous but must be located in the same city, town, or village: Except that, where the appropriate TTB officer determines that a building or portion of a building which is not within the city, town, or village, is so conveniently and closely situated to the general factory premises as to present no jeopardy to the revenue and as to offer no hindrance to the administration of this part, he may authorize the inclusion of such building or portion of building as part of the factory. The buildings or portions of buildings shall be described in the application for permit and the bond by number, street, and city, town, or village, and State. If any of the following conditions exist a diagram shall also be furnished, in duplicate, showing the information indicated:
(a) Where the factory is in more than one building, and each building is not identifiable by a separate street address—identify each building by a letter, number, or similar designation;
(b) Where the factory consists of a portion of a building or where portions of buildings are part of the factory—show the particular floor or floors, or room or rooms, comprising the factory;
(c) Where there is an adjoining retail store operated by the manufacturer tobacco products including any doors or other openings between the premises.
(72 Stat. 1421; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
\[T.D. 6840, [30 FR 9310](https://www.federalregister.gov/citation/30-FR-9310), July 27, 1965, as amended by T.D. 6871, [31 FR 33](https://www.federalregister.gov/citation/31-FR-33), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-232, [51 FR 28080](https://www.federalregister.gov/citation/51-FR-28080), Aug. 5, 1986; T.D. ATF-243, [52 FR 43194](https://www.federalregister.gov/citation/52-FR-43194), Dec. 1, 1986]
#### § 40.70 Separation of and access to factory.
Where the factory consists of a portion of a building, or where portions of buildings are part of the factory, the factory shall be completely separated by walls from adjoining portions of the building. Such walls shall be securely constructed of substantial materials. The appropriate TTB officer may, wherever he finds that the revenue will not be jeopardized, authorize openings and doors in such walls or means of separation other than walls if such means adequately delineate the factory. The factory shall be accessible directly from a street, yard, common passageway, or other common means of entrance.
(72 Stat. 1421; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
#### § 40.71 Factories established prior to October 1, 1961.
Factories established prior to the effective date of this part, October 1, 1961, shall not be subject to the provisions of [§ 40.70](/current/title-27/section-40.70) if, in the opinion of the appropriate TTB officer, the existing premises afford adequate protection to the revenue.
(72 Stat. 1421; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
\[T.D. 6871, [31 FR 33](https://www.federalregister.gov/citation/31-FR-33), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### § 40.72 Use of factory premises.
(a) *General.* Unless otherwise authorized by the appropriate TTB officer as provided in [§ 40.47](/current/title-27/section-40.47), the premises used by a manufacturer of tobacco products for his factory shall be used exclusively for the purposes of manufacturing and storing tobacco products; storing materials, equipment, and supplies related thereto or used or useful in the conduct of the business; and carrying on activities in connection with business of the manufacturer of tobacco products.
(b) *Processed tobacco.*
(1) A manufacturer of tobacco products that processes tobacco or receives processed tobacco on its factory premises solely for use in the manufacture of tobacco products under its permit, that removes processed tobacco from the factory premises only for purposes related to its business of manufacturing tobacco products as set forth in [(b)(2)](/current/title-27/section-40.72#p-40.72\(b\)\(2\)) of this section, and that maintains records sufficient to show the final disposition of any processed tobacco removed from the factory premises may engage in such activities on the factory premises under the authority of its existing permit without prior authorization from TTB under [§ 40.47](/current/title-27/section-40.47). If a manufacturer of tobacco products removes processed tobacco for purposes other than those specified in [paragraph (b)(2)](/current/title-27/section-40.72#p-40.72\(b\)\(2\)) of this section, that manufacturer must obtain prior authorization from TTB in accordance with [§ 40.47](/current/title-27/section-40.47) and must keep records and submit reports as prescribed in [§§ 40.521](/current/title-27/section-40.521) and [40.522](/current/title-27/section-40.522).
(2) The following activities are considered to be activities related to the manufacture of tobacco products: Removal of samples of processed tobacco for the purpose of soliciting orders of tobacco products; removal of processed tobacco for destruction; removal of processed tobacco for scientific testing or testing of equipment which results in the destruction of the processed tobacco or the return of the processed tobacco to the factory premises; and transfer of processed tobacco between permitted premises of the same manufacturer. Any removal of processed tobacco other than those listed above requires the manufacturer to first obtain authorization to engage in another business within the factory under [§ 40.47](/current/title-27/section-40.47) and to keep records and submit reports under [§§ 40.521](/current/title-27/section-40.521) and [40.522](/current/title-27/section-40.522), unless the manufacturer can show to the satisfaction of the appropriate TTB officer that the removal is connected with the business of a manufacturer of tobacco products rather than with the business of a manufacturer of processed tobacco.
\[T.D. TTB-78, [74 FR 29409](https://www.federalregister.gov/citation/74-FR-29409), June 22, 2009, as amended by T.D. TTB-104, [77 FR 37302](https://www.federalregister.gov/citation/77-FR-37302), June 21, 2012]
#### § 40.73 Additional information.
The appropriate TTB officer may require such additional information as he may deem necessary to determine whether the applicant is entitled to a permit under the provisions of this part. The applicant shall, when required by the appropriate TTB officer, furnish as a part of his application for such permit such additional information as may be necessary for the appropriate TTB officer to determine whether the applicant is entitled to a permit.
#### § 40.74 Investigation of applicant.
(a) *Investigation.* The appropriate TTB officer may cause inquiry or investigation to be made to verify the information furnished in connection with an application for permit and to ascertain whether the applicant is eligible for a permit. Any of the following conditions may be grounds for denial of a permit:
(1) The premises on which it is proposed to conduct the business are not adequate to protect the revenue;
(2) The activity proposed to be carried out at such premises does not meet the minimum manufacturing or activity requirements of [§ 40.61(b)](/current/title-27/section-40.61#p-40.61\(b\)); or
(3) The applicant (including, in the case of a corporation, any officer, director, or principal stockholder and, in the case of a partnership, a partner)—
(i) Is, by reason of his business experience, financial standing, or trade connections or by reason of previous or current legal proceedings involving a felony violation of any other provision of Federal criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes, not likely to maintain operations in compliance with this chapter;
(ii) Has been convicted of a felony violation of any provision of Federal or State criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes; or
(iii) Has failed to disclose any material information required or made any material false statement in the application therefor.
(b) *TTB action.* The appropriate TTB officer, if there is reason to believe that the applicant is not entitled to a permit, shall promptly give the applicant notice of the contemplated disapproval of the application and opportunity for hearing thereon in accordance with [part 71 of this chapter](/current/title-27/part-71), which part (including the provisions relating to the recommended decision and to appeals) is applicable to such proceedings. If, after such notice and opportunity for hearing, the appropriate TTB officer finds that the applicant is not entitled to a permit, he shall, by order stating the findings on which his decision is based, deny the permit.
([26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
\[T.D. TTB-75, [74 FR 14482](https://www.federalregister.gov/citation/74-FR-14482), Mar. 31, 2009]
#### § 40.75 Issuance of permit.
If the application for permit, together with the bond and supporting documents, required under this part is approved by him, the appropriate TTB officer shall issue a permit on TTB F 5200.10 to the applicant as a manufacturer of tobacco products.
(72 Stat. 1421; [26 U.S.C. 5713](https://www.govinfo.gov/link/uscode/26/5713))
\[T.D. 6871, [31 FR 33](https://www.federalregister.gov/citation/31-FR-33), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### § 40.76 Retention of permit and supporting documents.
The manufacturer shall retain his permit, together with the copy of the application and supporting documents returned to him with the permit, at the same place where the records required by this part are kept and they shall be made available for inspection by any appropriate TTB officer upon his request.
(72 Stat. 1421, 1423; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712), [5713](https://www.govinfo.gov/link/uscode/26/5713), [5741](https://www.govinfo.gov/link/uscode/26/5741))
## Subpart F—Changes After Original Qualification of Manufacturers of Tobacco Products
### Changes in Name
#### § 40.91 Change in individual name.
Where there is a change in the name of an individual operating as a manufacturer of tobacco products they shall, within 30 days of such change, make application on TTB F 5200.16 for an amended permit.
(72 Stat. 1421; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
\[[26 FR 8174](https://www.federalregister.gov/citation/26-FR-8174), Aug. 31, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975; [54 FR 48839](https://www.federalregister.gov/citation/54-FR-48839), Nov. 27, 1989; and further redesignated by T.D. ATF-460, [66 FR 39093](https://www.federalregister.gov/citation/66-FR-39093), July 27, 2001, as amended by T.D. TTB-91, [76 FR 5480](https://www.federalregister.gov/citation/76-FR-5480), Feb. 1, 2011; T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 40.92 Change in trade name.
Where there is a change in, or an addition or discontinuance of, a trade name used by a manufacturer of tobacco products in connection with operations authorized by their permit the manufacturer shall, within 30 days of such change, addition or discontinuance, make application on TTB F 5200.16 for an amended permit to reflect such change. The manufacturer shall also furnish a true copy of any new trade name certificate or document issued to them, or statement in lieu thereof, required by [§ 40.65](/current/title-27/section-40.65).
(72 Stat. 1421; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
\[T.D. 6840, [30 FR 9311](https://www.federalregister.gov/citation/30-FR-9311), July 27, 1965. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 40.93 Change in corporate name.
Where there is a change in the name of a corporate manufacturer of tobacco products, the manufacturer shall, within 30 days of such change, make application on TTB F 5200.16 for an amended permit. The manufacturer shall also furnish such documents as may be necessary to establish that the corporate name has been changed.
(72 Stat. 1421; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
### Changes in Ownership and Control
#### § 40.101 Fiduciary successor.
If an administrator, executor, receiver, trustee, assignee, or other fiduciary, is to take over the business of a manufacturer of tobacco products, as a continuing operation, such fiduciary shall, before commencing operations, make application for permit and file bond as required by subpart E, of this part, furnish certified copies, in duplicate, of the order of the court, or other pertinent documents, showing his appointment and qualification as such fiduciary, and make a commencing inventory, in accordance with the provisions of [§ 40.201](/current/title-27/section-40.201): *Provided,* That where a diagram has been furnished by the predecessor, in accordance with the provisions of [§ 40.69](/current/title-27/section-40.69), the successor may adopt such diagram if it is currently complete and accurate. However, where a fiduciary intends only to liquidate the business, qualification as a manufacturer of tobacco products will not be required if he promptly files with the appropriate TTB officer a written statement to that effect, in duplicate, together with an extension of coverage of the predecessor's bond, executed by the fiduciary and the surety on such bond, in accordance with the provisions of [§ 40.137](/current/title-27/section-40.137).
(72 Stat. 1421, 1422; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711), [5712](https://www.govinfo.gov/link/uscode/26/5712), [5721](https://www.govinfo.gov/link/uscode/26/5721))
#### § 40.102 Transfer of ownership.
If a transfer is to be made in ownership of the business of a manufacturer of tobacco products (including a change of any member of a partnership or association), such manufacturer shall give notice, in writing, to the appropriate TTB officer, naming the proposed successor and the desired effective date of such transfer. The proposed successor shall, before commencing operations, qualify as a manufacturer of tobacco products, in accordance with the applicable provisions of [subpart E of this part](/current/title-27/part-40/subpart-E): *Provided,* That where a diagram has been furnished by the manufacturer in accordance with the provisions of [§ 40.69](/current/title-27/section-40.69), the proposed successor may adopt such diagram if it is currently complete and accurate. The manufacturer shall give such notice of transfer, and the proposed successor shall make application for permit and file bond, as required, in ample time for examination and approval thereof before the desired date of such change. The predecessor shall make a concluding inventory and concluding report, in accordance with the provisions of [§§ 40.201](/current/title-27/section-40.201) and [40.202](/current/title-27/section-40.202), respectively, and surrender his permit with such inventory and report. The successor shall make a commencing inventory and commencing report, in accordance with the provisions of [§§ 40.201](/current/title-27/section-40.201) and [40.202](/current/title-27/section-40.202), respectively.
(72 Stat. 1421, 1422; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711), [5712](https://www.govinfo.gov/link/uscode/26/5712), [5713](https://www.govinfo.gov/link/uscode/26/5713), [5721](https://www.govinfo.gov/link/uscode/26/5721), [5722](https://www.govinfo.gov/link/uscode/26/5722))
#### § 40.103 Change in officers, directors, or stockholders of a corporation.
Upon election or appointment (excluding successive reelection or reappointment) of any officer or director of a corporation operating the business of a manufacturer of tobacco products, or upon any occurrence which results in a person acquiring ownership or control of more than ten percent in aggregate of the outstanding stock of such corporation, the manufacturer shall, within 30 days of such action, so notify the appropriate TTB officer in writing, giving the identity of such person. When there is any change in the authority furnished under [§ 40.63](/current/title-27/section-40.63) for officers to act in behalf of the corporation the manufacturer shall immediately so notify the appropriate TTB officer in writing.
(72 Stat. 1421; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
\[T.D. 6840, [30 FR 9311](https://www.federalregister.gov/citation/30-FR-9311), July 27, 1965. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### § 40.104 Change in control of a corporation.
Where the issuance, sale, or transfer of the stock of a corporation, operating as a manufacturer of tobacco products, results in a change in the identity of the principal stockholders exercising actual or legal control of the operations of the corporation, the corporate manufacturer shall, within 30 days after the change occurs, make application on TTB F 5200.3 for a new permit. Otherwise, the present permit shall be automatically terminated at the expiration of such 30-day period, and the manufacturer shall dispose of all tobacco products on hand, in accordance with this part, make a concluding inventory and concluding report, in accordance with the provisions of [§§ 40.201](/current/title-27/section-40.201) and [40.202](/current/title-27/section-40.202), respectively, and surrender his permit with such inventory and report. If the application for a new permit is timely made, the present permit shall continue in effect pending final action with respect to such application.
(72 Stat. 1421, 1422; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712), [5713](https://www.govinfo.gov/link/uscode/26/5713), [5721](https://www.govinfo.gov/link/uscode/26/5721), [5722](https://www.govinfo.gov/link/uscode/26/5722))
\[T.D. 6871, [31 FR 33](https://www.federalregister.gov/citation/31-FR-33), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-232, [51 FR 28081](https://www.federalregister.gov/citation/51-FR-28081), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
### Changes in Location of Factory
#### § 40.111 Change in location.
Whenever a manufacturer of tobacco products intends to relocate its factory, the manufacturer shall, before commencing operations at the new location, make application on TTB F 5200.16 for, and obtain, an amended permit. The application shall be supported by bond coverage in accordance with the provisions of [subpart G of this part](/current/title-27/part-40/subpart-G).
\[T.D. TTB-91, [76 FR 5479](https://www.federalregister.gov/citation/76-FR-5479), Feb. 1, 2011]
#### § 40.112 Change in address.
Whenever any change occurs in the address, but not the location, of the factory of a manufacturer of tobacco products, as a result of action of local authorities, the manufacturer shall, within 30 days of such change, make application on TTB F 5200.16 for an amended permit.
(72 Stat. 1421; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
#### § 40.114 Extension or curtailment of factory.
Where a tobacco products factory is to be changed to an extent which will make inaccurate the description of the factory as set forth in the last application by the manufacturer for permit, on the diagram, if any, furnished with such application, the manufacturer shall first make an application on TTB F 5200.16 for, and obtain, an amended permit. Such application shall describe the proposed change in the factory and shall be accompanied by a new diagram if required under the provisions of [§ 40.69](/current/title-27/section-40.69).
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711), [5712](https://www.govinfo.gov/link/uscode/26/5712))
## Subpart G—Bonds and Extensions of Coverage of Bonds
#### § 40.131 Corporate surety.
(a) Surety bonds required under the provisions of this part may be given only with corporate sureties holding certificates of authority from the Secretary of the Treasury as acceptable sureties on Federal bonds. Each bond and each extension of coverage of bond shall at the time of filing be accompanied by a power of attorney authorizing the agent or officer who executed the bond to so act on behalf of the surety. The appropriate TTB officer who is authorized to approve the bond may, whenever he deems it necessary, require additional evidence of the authority of the agent or officer to execute the bond or extension of coverage of bond. The power of attorney shall be prepared on a form provided by the surety company and executed under the corporate seal of the company. If the power of attorney submitted is other than a manually signed document it shall be accompanied by a certificate of its validity. Limitations concerning corporate sureties are prescribed by the Secretary in Treasury Department Circular 570, as revised. The surety shall have no interest whatever in the business covered by the bond.
(b) Treasury Department Circular 570 is published in the Federal Register annually on the first business day in July, and supplemental changes are published periodically thereafter (see *[https://www.federalregister.gov](https://www.federalregister.gov)*). The most recent circular and any supplemental changes to it may be viewed on the Bureau of the Fiscal Service website (see *[https://fiscal.treasury.gov](https://fiscal.treasury.gov)*).
\[T.D. 6961, [33 FR 9488](https://www.federalregister.gov/citation/33-FR-9488), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975 and amended by T.D. ATF-92, [46 FR 46921](https://www.federalregister.gov/citation/46-FR-46921), Sept. 23, 1981; T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 40.132 Deposit of securities in lieu of corporate surety.
In lieu of corporate surety the manufacturer of tobacco products may pledge and deposit, as security for his bond, securities which are transferable and are guaranteed as to both interest and principal by the United States, in accordance with the provisions of [31 CFR part 225](/current/title-31/part-225).
(61 Stat. 650, 72 Stat. 1421; [6 U.S.C.9301](https://www.govinfo.gov/link/uscode/6/9301), [9303](https://www.govinfo.gov/link/uscode/6/9303); [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
#### § 40.133 Amount of individual bond.
The amount of the bond of a manufacturer of tobacco products shall be not less than the total amount of tax liability on all tobacco products manufactured in his factory, received in bond from other factories and from export warehouses, and released to him in bond from customs custody, during any calendar month. Where the amount of any bond is no longer sufficient and the bond is in less than the maximum amount, the manufacturer shall immediately file a strengthening or superseding bond as required by this subpart. The amount of any such bond (or the total amount including strengthening bonds, if any) need not exceed $250,000 for a manufacturer producing or receiving cigarettes in bond; need not exceed $150,000 for a manufacturer producing or receiving cigars, smokeless tobacco, pipe tobacco, or roll-your-own tobacco in bond; and need not exceed $250,000 for a manufacturer producing or receiving any combination of tobacco products in bond. The bond of a manufacturer of tobacco products shall in no case be less than $1,000.
\[T.D. ATF-232, [51 FR 28080](https://www.federalregister.gov/citation/51-FR-28080), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986, as amended by T.D. ATF-289, [54 FR 48839](https://www.federalregister.gov/citation/54-FR-48839), Nov. 27, 1989; T.D. ATF-424, [64 FR 71931](https://www.federalregister.gov/citation/64-FR-71931), Dec. 22, 1999]
#### § 40.134 Amount of blanket bond.
In the case of a blanket bond filed under the provisions of [§ 40.67](/current/title-27/section-40.67), where the total amount of individual bonds otherwise required for the factories under [§ 40.133](/current/title-27/section-40.133) does not exceed $250,000, such blanket bond shall be not less than the total amount of such individual bonds. Where the total amount of such individual bonds required is in excess of $250,000 but not in excess of $500,000, the amount of the blanket bond shall be not less than $250,000 plus 50 percent of such total amount which is in excess of $250,000. Where the total amount of such individual bonds required is in excess of $500,000 the amount of the blanket bond shall be not less than $375,000 plus 25 percent of such total amount which is in excess of $500,000.
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
#### § 40.135 Strengthening bond.
Where the amount of any bond is no longer sufficient under the provisions of [§ 40.133](/current/title-27/section-40.133) or [§ 40.134](/current/title-27/section-40.134), the manufacturer shall immediately file a strengthening bond in an appropriate amount with the same surety as that on the bond already in effect, unless a superseding bond is filed pursuant to [§ 40.136](/current/title-27/section-40.136). Strengthening bonds will not be approved where any notation is made thereon which is intended, or which may be construed, as a release of any former bond, or as limiting the amount of either bond to less than its full amount.
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
#### § 40.136 Superseding bond.
A manufacturer of tobacco products shall immediately file a new bond to supersede his current bond when
(a) The corporate surety on the current bond becomes insolvent,
(b) The appropriate TTB officer approves a request from the surety on the current bond to terminate his liability under the bond,
(c) Payment of any liability under a bond is made by the surety thereon,
(d) The amount of the bond is no longer sufficient under the provisions of [§ 40.133](/current/title-27/section-40.133) or [§ 40.134](/current/title-27/section-40.134) and a strengthening bond has not been filed, or
(e) The appropriate TTB officer considers such a superseding bond necessary for the protection of the revenue.
Where a bond is not filed as required under the provisions of this section the manufacturer shall discontinue forthwith the operations to which such bond relates.
(72 Stat. 1421: [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
#### § 40.137 Extension of coverage of bond.
An extension of coverage of bond shall be manifested on TTB F 5000.18 by the manufacturer of tobacco products and by the surety on the bond with the same formality and proof of authority as required for the execution of the bond.
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
\[[26 FR 8174](https://www.federalregister.gov/citation/26-FR-8174), Aug. 31, 1961, unless otherwise noted. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975; [54 FR 48839](https://www.federalregister.gov/citation/54-FR-48839), Nov. 27, 1989, and further redesignated by T.D. ATF-460, [66 FR 39093](https://www.federalregister.gov/citation/66-FR-39093), July 27, 2001; as amended by T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 40.138 Approval of bond and extension of coverage of bond.
No person shall commence operations under any bond, nor extend his operations, until he receives from the appropriate TTB officer notice of his approval of the bond or of an appropriate extension of coverage of the bond required under this part.
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
#### § 40.139 Termination of bond.
Any bond required by this part may be terminated by the appropriate TTB officer as to liability for future operations (a) pursuant to application by the surety as provided in the bond, (b) on approval of a superseding bond, or (c) when operations by the manufacturer are permanently discontinued in accordance with subpart J. After a bond is terminated the surety shall remain bound with respect to any liability for unpaid taxes, penalties, and interest, not in excess of the amount of the bond, incurred by the manufacturer prior to the termination date.
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
\[T.D. 6840, [30 FR 9311](https://www.federalregister.gov/citation/30-FR-9311), July 27, 1965. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### § 40.140 Release of pledged securities.
Securities of the United States pledged and deposited as provided in [§ 40.132](/current/title-27/section-40.132) shall be released only in accordance with the provisions of [31 CFR part 225](/current/title-31/part-225). Such securities will not be released by the appropriate TTB officer until liability under the bond for which they were pledged has been terminated. When the appropriate TTB officer is satisfied that they may be released, he shall fix the date or dates on which a part or all of such securities may be released. At any time prior to the release of such securities, the appropriate TTB officer may extend the date of release for such additional length of time as he deems necessary.
(61 Stat. 650, 72 Stat. 1421; [31 U.S.C. 9301](https://www.govinfo.gov/link/uscode/31/9301), [9303](https://www.govinfo.gov/link/uscode/31/9303), [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
## Subpart H—Operations by Manufacturers of Tobacco Products
### Determination and Payment of Taxes on Tobacco Products
#### § 40.161 Determination of tax and method of payment.
Except for removals in bond and transfers in bond, as authorized by law, the taxes imposed on tobacco products by section 5701, I.R.C., shall be determined at the time of removal of such products and paid on the basis of a return, in accordance with the provisions of this part.
(72 Stat. 1417; [26 U.S.C. 5703](https://www.govinfo.gov/link/uscode/26/5703))
\[T.D. 6929, [32 FR 13866](https://www.federalregister.gov/citation/32-FR-13866), Oct. 5, 1967. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975; T.D. ATF-232, [51 FR 28081](https://www.federalregister.gov/citation/51-FR-28081), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 40.162 Semimonthly tax return.
Every manufacturer of tobacco products shall file, for each of his factories, a semimonthly tax return on Form 5000.24 for each return period, including any period during which a manufacturer begins or discontinues business. The return shall be filed with TTB in accordance with the instructions on the form. The manufacturer shall file the return at the time specified in [§ 40.165](/current/title-27/section-40.165) regardless of whether tobacco products are removed or whether tax is due for that particular return period. However, when the manufacturer requests by letter and the appropriate TTB officer grants specific authorization, the manufacturer need not during the term of such authorization file a tax return for which tax is not due or payable.
\[T.D. ATF-232, [51 FR 35353](https://www.federalregister.gov/citation/51-FR-35353), Oct. 3, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986, as amended by T.D. ATF-251, [52 FR 19339](https://www.federalregister.gov/citation/52-FR-19339), May 22, 1987]
#### § 40.163 Semimonthly tax return periods.
Except as otherwise provided in [§ 40.164](/current/title-27/section-40.164), the periods to be covered by semimonthly tax returns are from the 1st day of each month through the 15th day of that month and from the 16th day of each month through the last day of that month.
\[T.D. TTB-89, [76 FR 3513](https://www.federalregister.gov/citation/76-FR-3513), Jan. 20, 2011]
#### § 40.164 Special rule for taxes due for the month of September.
(a) *Division of second semimonthly period.*
(1) *General.* Except as otherwise provided in [paragraph (a)(2)](/current/title-27/section-40.164#p-40.164\(a\)\(2\)) of this section, the second semimonthly period for the month of September is divided into two payment periods, from the 16th day through the 26th day, and from the 27th day through the 30th day. The manufacturer shall file a return on TTB F 5000.24, and make remittance, for the period September 16-26, no later than September 29. The manufacturer shall file a return on TTB F 5000.24, and make remittance, for the period September 27-30, no later than October 14.
(2) *Taxpayment not by electronic fund transfer.* In the case of taxes for which remittance by electronic fund transfer (EFT) is not required by [§ 40.165a](/current/title-27/section-40.165a), the second semimonthly period of September is divided into two payment periods, from the 16th day through the 25th day, and from the 26th day through the 30th day. The manufacturer shall file a return on TTB F 5000.24, and make remittance, for the period September 16-25, no later than September 28. The manufacturer shall file a return on TTB F 5000.24, and make remittance, for the period September 26-30, no later than October 14.
(b) *Amount of payment—Safe harbor rule.*
(1) *General.* Taxpayers are considered to have met the requirements of [paragraph (a)(1)](/current/title-27/section-40.164#p-40.164\(a\)\(1\)) of this section if the amount paid no later than September 29 is not less than 11/15ths (73.3 percent) of the tax liability incurred for the semimonthly period beginning on September 1 and ending on September 15, and if any underpayment of tax is paid by October 14.
(2) *Taxpayment not by EFT.* Taxpayers are considered to have met the requirements of [paragraph (a)(2)](/current/title-27/section-40.164#p-40.164\(a\)\(2\)) of this section if the amount paid no later than September 28 is not less than 2/3rds (66.7 percent) of the tax liability incurred for the semimonthly period beginning on September 1 and ending on September 15, and if any underpayment of tax is paid by October 14.
(c) *Weekends and holidays.* If the required taxpayment due date for the period September 16-25 or September 16-26, as applicable, falls on a Saturday or legal holiday, the return and remittance are due on the immediately preceding day. If the required due date falls on a Sunday, the return and remittance are due on the immediately following day.
(d) *Example: Payment of tax for the month of September.*
(1) *Facts.* X, a manufacturer of tobacco products required to pay taxes by electronic fund transfer, incurred tax liability in the amount of $30,000 for the first semimonthly period of September. For the period September 16-26, X incurred tax liability in the amount of $45,000, and for the period September 27-30, X incurred tax liability in the amount of \$2,000.
(2) *Payment requirement.* X's payment of tax in the amount of $30,000 for the first semimonthly period of September is due no later than September 29 ([§ 40.165(a)](/current/title-27/section-40.165#p-40.165(a))). X's payment of tax for the period September 16-26 is also due no later than September 29 ([§ 40.164(a)(1)](/current/title-27/section-40.164#p-40.164(a)(1))). X may use the safe harbor rule to determine the amount of payment due for the period of September 16-26 ([§ 40.164(b)](/current/title-27/section-40.164#p-40.164(b))). Under the safe harbor rule, X's payment of tax must not be less than $21,990.00, that is, 11/15ths of the tax liability incurred during the first semimonthly period of September. Additionally, X must pay the tax in the amount of $2,000 for the period September 27-30 no later than October 14 ([§ 40.164(a)(1)](/current/title-27/section-40.164#p-40.164(a)(1))). X must also pay the underpayment of tax, $23,010.00, for the period September 16-26, no later than October 14 ([§ 40.164(b)](/current/title-27/section-40.164#p-40.164\(b\))).
\[T.D. TTB-89, [76 FR 3513](https://www.federalregister.gov/citation/76-FR-3513), Jan. 20, 2011]
#### § 40.165 Times for filing semimonthly return.
(a) *General.* Except as otherwise provided in [§ 40.164](/current/title-27/section-40.164) and in [paragraph (b)](/current/title-27/section-40.165#p-40.165\(b\)) of this section, semimonthly returns on TTB F 5000.24 must be filed, for each return period, not later than the 14th day after the last day of the return period. If the due date falls on a Saturday, Sunday, or legal holiday, the return and remittance are due on the immediately preceding day that is not a Saturday, Sunday, or legal holiday, except as otherwise provided in [§ 40.164(c)](/current/title-27/section-40.164#p-40.164\(c\)).
(b) *Postmark.* The official postmark of the U.S. Postal Service stamped on the cover in which the return was mailed shall be considered the date of delivery of the tax return and, if the return was accompanied by a remittance, the date of delivery of the remittance. When the postmark is illegible, the manufacturer shall prove when the postmark was made. When the proprietor sends the tax return with or without remittance by registered mail or by certified mail, the date of registry or the date of the postmark on the sender's receipt of certified mail, as the case may be, shall be treated as the date of delivery of the tax return and, if accompanied, of the remittance.
(Approved by the Office of Management and Budget under control number 1512-0467)
\[T.D. ATF-246, [52 FR 669](https://www.federalregister.gov/citation/52-FR-669), Jan. 8, 1987, as amended by T.D. ATF-251, [52 FR 19339](https://www.federalregister.gov/citation/52-FR-19339), May 22, 1987; T.D. ATF-365, [60 FR 33675](https://www.federalregister.gov/citation/60-FR-33675), June 28, 1995; T.D. ATF-446, [66 FR 16602](https://www.federalregister.gov/citation/66-FR-16602), Mar. 27, 2001; T.D. ATF-446a, [66 FR 19089](https://www.federalregister.gov/citation/66-FR-19089), Apr. 13, 2001; T.D. TTB-89, [76 FR 3514](https://www.federalregister.gov/citation/76-FR-3514), Jan. 20, 2011]
#### § 40.165a Payment of tax by electronic fund transfer.
(a) *General.*
(1) Each taxpayer who was liable, during a calendar year, for a gross amount equal to or exceeding five million dollars in taxes on tobacco products, cigarette papers, and cigarette tubes combining tax liabilities incurred under this [part and part 41 of this chapter](/current/title-27/part-41), shall use a commercial bank in making payment by electronic fund transfer (EFT) of taxes on tobacco products, cigarette papers, and cigarette tubes during the succeeding calendar year. Payment of taxes on tobacco products by cash, check, or money order, as described in [§ 40.168](/current/title-27/section-40.168), is not authorized for a taxpayer who is required, by this section, to make remittances by EFT. For purposes of this section, the dollar amount of tax liability is defined as the gross tax liability on all taxable withdrawals and importations (including tobacco products, cigarette papers, and cigarette tubes brought into the United States from Puerto Rico or the Virgin Islands) during the calendar year, without regard to any drawbacks, credits, or refunds, for all premises from which such activities are conducted by the taxpayer. Overpayments are not taken into account in summarizing the gross tax liability.
(2) For the purposes of this section, a taxpayer includes a controlled group of corporations, as defined in [26 U.S.C. 1563](https://www.govinfo.gov/link/uscode/26/1563), and implementing regulations in [26 CFR 1.1563-1](/current/title-26/section-1.1563-1) through [1.1563-4](/current/title-26/section-1.1563-4), except that the words “at least 80 percent” shall be replaced by the words “more than 50 percent” in each place it appears in subsection (a) of [26 U.S.C. 1563](https://www.govinfo.gov/link/uscode/26/1563), as well as in the implementing regulations. Also, the rules for a “controlled group of corporations” apply in a similar fashion to groups which include partnerships and/or sole proprietorships. If one entity maintains more than 50% control over a group consisting of corporations and one, or more, partnerships and/or sole proprietorships, all of the members of the controlled group are one taxpayer for the purpose of determining who is required to make remittances by EFT.
(3) A taxpayer who is required by this section to make remittances by EFT, shall make a separate EFT remittance and file a separate return, Form 5000.24, for each factory from which tobacco products are withdrawn upon determination of tax.
(b) *Requirements.*
(1) On or before January 10 of each calendar year, except for a taxpayer already remitting the tax by EFT, each taxpayer who was liable for a gross amount equal to or exceeding five million dollars in taxes on tobacco products, cigarette papers, and cigarette tubes combining tax liabilities incurred under this [part and part 41 of this chapter](/current/title-27/part-41), during the previous calendar year, shall notify, in writing, the appropriate TTB officer. The notice shall be an agreement to make remittances by EFT.
(2) For each return filed in accordance with this part, the taxpayer shall direct the taxpayer's bank to make an electronic fund transfer in the amount of the tax payment to the Treasury Account as provided in [paragraph (e)](/current/title-27/section-40.165a#p-40.165a\(e\)) of this section. The request shall be made to the bank early enough for the transfer to be made to the Treasury Account by no later than the close of business on the last day for filing the return, prescribed in [§ 40.165](/current/title-27/section-40.165) or [§ 40.167](/current/title-27/section-40.167). The request shall take into account any time limit established by the bank.
(3) If a taxpayer was liable for less than five million dollars in taxes on tobacco products, cigarette papers, and cigarette tubes combining tax liabilities incurred under this [part and part 41 of this chapter](/current/title-27/part-41) during the preceding calendar year, the taxpayer may choose either to continue remitting the tax as provided in this section or to remit the tax with the return on as prescribed by [§ 40.168](/current/title-27/section-40.168). Upon filing the first return which the taxpayer chooses to discontinue remitting the tax by EFT and to begin remitting the tax with the tax return, the taxpayer shall notify the appropriate TTB officer by attaching a written notification to Form 5000.24, stating that no taxes are due by EFT, because the tax liability during the preceding calendar year was less than five million dollars, and that the remittance shall be filed with the tax return.
(c) *Remittance.*
(1) Each taxpayer shall show on the return, Form 5000.24, information about remitting the tax for that return period by EFT and shall file the return with the TTB, in accordance with the instructions on Form 5000.24.
(2) Remittances shall be considered as made when the taxpayment by electronic fund transfer is received by the Treasury Account. For purposes of this section, a taxpayment by electronic fund transfer shall be considered as received by the Treasury Account when it is paid to a Federal Reserve Bank.
(3) When the taxpayer directs the bank to effect an electronic fund transfer message as required by [paragraph (b)(2)](/current/title-27/section-40.165a#p-40.165a\(b\)\(2\)) of this section, any transfer data record furnished to the taxpayer, through normal banking procedures, will serve as the record of payment, and shall be retained as part of required records.
(d) *Failure to make a taxpayment by EFT.* The taxpayer is subject to a penalty imposed by [26 U.S.C. 5761](https://www.govinfo.gov/link/uscode/26/5761), [6651](https://www.govinfo.gov/link/uscode/26/6651), or [6656](https://www.govinfo.gov/link/uscode/26/6656), as applicable, for failure to make a tax payment by EFT on or before the close of business on the prescribed last day for filing.
(e) *Procedure.* Upon the notification required under [paragraph (b)(1)](/current/title-27/section-40.165a#p-40.165a\(b\)\(1\)) of this section, the appropriate TTB officer will issue to the taxpayer a TTB procedure entitled, Payment of Tax by Electronic Fund Transfer. This publication outlines the procedure a taxpayer is to follow when preparing returns and EFT remittances in accordance with this part. The U.S. Customs and Border Protection (CBP) will provide the taxpayer with instructions for preparing EFT remittances for payments to be made to the CBP.
(Approved by the Office of Management and Budget under control number 1512-0457)
(Act of August 16, 1954, 68A Stat. 775, as amended ([26 U.S.C. 6302](https://www.govinfo.gov/link/uscode/26/6302)); sec. 202, Pub. L. 85-859, 72 Stat. 1417, as amended ([26 U.S.C. 5703](https://www.govinfo.gov/link/uscode/26/5703)))
\[T.D. ATF-198, [49 FR 37582](https://www.federalregister.gov/citation/49-FR-37582), Sept. 25, 1984]
#### Editorial Note:
For Federal Register citations affecting [§ 40.165a](/current/title-27/section-40.165a), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
#### § 40.166 Default, prepayment of tax required.
Where a check or money order tendered with any return, whether semi-monthly or prepayment, for payment of tax on tobacco products is not paid on presentment, where a manufacturer fails to remit with the return the full amount of tax due thereunder, or where a manufacturer is otherwise in default in payment of tax on tobacco products under the internal revenue laws or this chapter, during the period of such default and until the appropriate TTB officer finds that the revenue will not be jeopardized by the deferred payment of tax pursuant to the provisions of this part, no tobacco products shall be removed subject to tax until the tax thereon has first been paid as provided in [§ 40.167](/current/title-27/section-40.167). Any remittance made during the period of a default shall be in cash, or in the form of a certified, cashier's, or treasurer's check drawn on any bank or trust company incorporated under the laws of the United States, or under the laws of any State, Territory, or possession of the United States, or in the form of a U.S. postal money order or other money order, and defined in [§ 70.61 of this chapter](/current/title-27/section-70.61) (payment by check or money order), or shall be delivered in the form of an electronic fund transfer message as provided in [§ 40.165a](/current/title-27/section-40.165a).
(68A Stat. 777, 72 Stat. 1417; [26 U.S.C. 6311](https://www.govinfo.gov/link/uscode/26/6311), [5703](https://www.govinfo.gov/link/uscode/26/5703); Aug. 16, 1954, ch. 736, 68A Stat. 707 ([26 U.S.C. 5703](https://www.govinfo.gov/link/uscode/26/5703)); Aug. 16, 1954, ch. 736, 68A Stat. 777 ([26 U.S.C. 6311](https://www.govinfo.gov/link/uscode/26/6311)))
\[T.D. 6871, [31 FR 34](https://www.federalregister.gov/citation/31-FR-34), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55855](https://www.federalregister.gov/citation/44-FR-55855), Sept. 28, 1979; T.D. ATF-77, [46 FR 3008](https://www.federalregister.gov/citation/46-FR-3008), Jan. 13, 1981; T.D. ATF-232, [51 FR 28081](https://www.federalregister.gov/citation/51-FR-28081), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-301, [55 FR 47658](https://www.federalregister.gov/citation/55-FR-47658), Nov. 14, 1990]
#### § 40.167 Prepayment tax return.
(a) To prepay the tax on tobacco products a manufacturer shall file a prepayment tax return on Form 5000.24 showing the tax to be paid on the tobacco products prior to removal. The return shall be executed and filed, prior to the removal of such products, with TTB, in accordance with the instructions on the form. A manufacturer prepaying the taxes on tobacco products under the provisions of this section shall continue to file semimonthly returns as required by [§ 40.162](/current/title-27/section-40.162).
(b) However, if a manufacturer is required by [§ 40.165a](/current/title-27/section-40.165a) to pay the tax by electronic fund transfer, the manufacturer shall prepay the tax before any tobacco products can be removed for consumption or sale by completing the return and filing it with TTB, in accordance with the instructions on the form. At the same time, the manufacturer shall direct his bank to effect an EFT.
(Sec. 202, Pub. L. 85-859, 68A Stat. 1417 ([26 U.S.C. 5703](https://www.govinfo.gov/link/uscode/26/5703)); sec. 202, Pub. L. 85-859, 72 Stat. 1423, as amended ([26 U.S.C. 5741](https://www.govinfo.gov/link/uscode/26/5741)); (Aug. 16, 1954, ch. 736, 68A Stat. 775, as amended ([26 U.S.C. 6302](https://www.govinfo.gov/link/uscode/26/6302))); [26 U.S.C. 7805](https://www.govinfo.gov/link/uscode/26/7805) (68A Stat. 917, as amended))
\[T.D. 6871, [31 FR 34](https://www.federalregister.gov/citation/31-FR-34), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-77, [46 FR 3008](https://www.federalregister.gov/citation/46-FR-3008), Jan. 13, 1981; T.D. ATF-219, [50 FR 51390](https://www.federalregister.gov/citation/50-FR-51390), Dec. 17, 1985; T.D. ATF-232, [51 FR 28081](https://www.federalregister.gov/citation/51-FR-28081), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-251, [52 FR 19340](https://www.federalregister.gov/citation/52-FR-19340), May 22, 1987]
#### § 40.168 Remittance with return.
Except when an electronic fund transfer has been made under [§ 40.165a](/current/title-27/section-40.165a) for the full amount of tax due, the tax on tobacco products shown to be due and payable on any return shall be paid by remittance in full with the tax return. The remittance may be in the form which the appropriate TTB officer is authorized to accept under [§ 70.61 of this chapter](/current/title-27/section-70.61) (Payment by check or money order) and which is acceptable to him, except as otherwise specified in [§ 40.166](/current/title-27/section-40.166). Checks and money orders shall be made payable to the “Alcohol and Tobacco Tax and Trade Bureau”. In paying the tax, a fractional part of a cent shall be disregarded unless it amounts to one-half cent or more, in which case it shall be increased to one cent.
(68A Stat. 778, 72 Stat. 1417; [26 U.S.C. 6313](https://www.govinfo.gov/link/uscode/26/6313), [5703](https://www.govinfo.gov/link/uscode/26/5703); Aug. 16, 1954, ch. 736, 68A Stat. 707, as amended ([26 U.S.C. 5703](https://www.govinfo.gov/link/uscode/26/5703)))
\[T.D. 6871, [31 FR 35](https://www.federalregister.gov/citation/31-FR-35), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55855](https://www.federalregister.gov/citation/44-FR-55855), Sept. 28, 1979; T.D. ATF-77, [46 FR 3009](https://www.federalregister.gov/citation/46-FR-3009), Jan. 13, 1981; T.D. ATF-232, [51 FR 28081](https://www.federalregister.gov/citation/51-FR-28081), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-301, [55 FR 47658](https://www.federalregister.gov/citation/55-FR-47658), Nov. 14, 1990]
#### § 40.169 Employer identification number.
The employer identification number (defined at [26 CFR 301.7701-12](/current/title-26/section-301.7701-12)) of a manufacturer of tobacco products who has been assigned such a number shall be shown on each tax return, Form 5000.24. Failure of the manufacturer to include his employer identification number on Form 5000.24 may result in assertion and collection of the penalty specified in [§ 70.113 of this chapter](/current/title-27/section-70.113).
\[T.D. ATF-219, [50 FR 51390](https://www.federalregister.gov/citation/50-FR-51390), Dec. 17, 1985, as amended by T.D. ATF-301, [55 FR 47658](https://www.federalregister.gov/citation/55-FR-47658), Nov. 14, 1990]
#### § 40.170 Application for employer identification number.
Every manufacturer of tobacco products who has neither secured an employer identification number nor made application therefor shall file an application on Form SS-4. Form SS-4 may be obtained from any service center director or from any district director. Such application shall be filed on or before the seventh day after the date on which any tax return under this part is filed. Each manufacturer shall make application for and shall be assigned only one employer identification number for all internal revenue tax purposes.
(75 Stat. 828; [26 U.S.C. 6109](https://www.govinfo.gov/link/uscode/26/6109))
\[T.D. 7055, [35 FR 13515](https://www.federalregister.gov/citation/35-FR-13515), Aug. 25, 1970. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### § 40.171 Execution and filing of Form SS-4.
The application on Form SS-4, together with any supplementary statement, shall be prepared in accordance with the form, instructions, and regulations applicable thereto, and shall set forth fully and clearly the data therein called for. The application shall be filed with the service center director serving any internal revenue district where the applicant is required to file returns under this part, except that hand-carried applications may be filed with the district director of any such district as provided for in [26 CFR 301.6091-1](/current/title-26/section-301.6091-1). The application shall be signed by (a) the individual if the person is an individual; (b) the president, vice president, or other principal officer if the person is a corporation; (c) a responsible and duly authorized member or officer having knowledge of its affairs if the person is a partnership or other unincorporated organization; or (d) the fiduciary if the person is a trust or estate.
(75 Stat. 828; [26 U.S.C. 6109](https://www.govinfo.gov/link/uscode/26/6109))
\[T.D. 7055, [35 FR 13515](https://www.federalregister.gov/citation/35-FR-13515), Aug. 25, 1970. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55855](https://www.federalregister.gov/citation/44-FR-55855), Sept. 28, 1979]
### Records
#### § 40.181 General.
Every manufacturer of tobacco products must keep records of his operations and transactions which shall reflect, for each day, the information specified in [§§ 40.182](/current/title-27/section-40.182) and [40.183](/current/title-27/section-40.183). For this purpose *day* shall mean calendar day, except that the appropriate TTB officer may, upon application of the manufacturer by letter, in duplicate, authorize as such day for a factory a 24-hour cycle of operation other than the calendar day. A day once so established as other than the calendar day may be changed only by another application approved by the appropriate TTB officer. No specific form is required. The manufacturer may use commercial records from which the required information may be readily ascertained for this purpose. The manufacturer shall keep the auxiliary and supplemental records from which such records are compiled and shall keep supporting records, as specified in [§§ 40.184](/current/title-27/section-40.184) and [40.186](/current/title-27/section-40.186), of tobacco products removed subject to tax and transferred in bond. Except as provided in [§§ 40.184](/current/title-27/section-40.184) and [40.186](/current/title-27/section-40.186), the entries in the commercial records so maintained or kept shall be made not later than the close of the next business day following the day on which the transaction(s) occurred. As used in this section the term *business day* shall mean any day other than Saturday, Sunday, a legal holiday in the District of Columbia, or a statewide legal holiday in the State wherein the factory to which the records relate is located.
(72 Stat. 1423, as amended; [26 U.S.C. 5741](https://www.govinfo.gov/link/uscode/26/5741))
\[T.D. ATF-424, [64 FR 71931](https://www.federalregister.gov/citation/64-FR-71931), Dec. 22, 1999]
#### § 40.182 Record of tobacco and processed tobacco.
(a) Except as provided in [paragraph (b)](/current/title-27/section-40.182#p-40.182\(b\)) of this section, a manufacturer of tobacco products must maintain a record that shows the total quantity in pounds of all:
(1) Processed tobacco on hand at the beginning of each month;
(2) Processed tobacco received, together with the name and address of the person from whom received and the date of receipt;
(3) Processed tobacco used in the manufacture of tobacco products, together with the date of use;
(4) Processed tobacco lost, together with the date and other circumstances of the loss;
(5) Processed tobacco destroyed, together with the date and other circumstances of the destruction;
(6) Processed tobacco removed, together with the date of the removal and reason for the removal; and
(7) Tobacco (unprocessed) on hand at the beginning of each month and used in the manufacture of tobacco products, lost, destroyed, or removed during each month.
(b) A manufacturer of tobacco products that is required to obtain authorization to engage in another business within the factory under [§§ 40.47(b)](/current/title-27/section-40.47#p-40.47\(b\)) and [40.72(b)](/current/title-27/section-40.72#p-40.72\(b\)) must keep records as prescribed in [§ 40.521](/current/title-27/section-40.521), in addition to those required elsewhere in this part.
(Approved by the Office of Management and Budget under control number 1513-0068)
\[T.D. TTB-104, [77 FR 37302](https://www.federalregister.gov/citation/77-FR-37302), June 21, 2012]
#### § 40.183 Record of tobacco products.
The record of a manufacturer of tobacco products must show the date and total quantities of all tobacco products by kind (small cigars; large cigars; small cigarettes; large cigarettes; chewing tobacco; snuff; pipe tobacco; roll-your-own tobacco) that are:
(a) Manufactured;
(b) Received in bond by—
(1) Transfer from other factories,
(2) Release from customs custody,
(3) Transfer from export warehouses, and
(4) Transfer from foreign trade zones;
(c) Received by return to bond;
(d) Disclosed as an overage by inventory;
(e) Removed subject to tax (itemize large cigars by sale price in accordance with [§ 40.22](/current/title-27/section-40.22), except that before April 1, 2009, cigars that cost more than $235.294 may optionally be shown as if the price were $236 per thousand, and on and after April 1, 2009, cigars that cost more than $763.222 may optionally be shown as if the price were $764 per thousand);
(f) Removed, in bond, for—
(1) Export,
(2) Transfer to export warehouses,
(3) Transfer to other factories,
(4) Transfer to foreign trade zones,
(5) Use of the United States, and
(6) Experimental purposes off factory premises;
(g) Otherwise disposed of, without determination of tax, by—
(1) Consumption by employees on factory premises,
(2) Consumption by employees off factory premises, together with the number of employees to whom furnished,
(3) Use for experimental purposes on factory premises,
(4) Loss,
(5) Destruction, and
(6) Reduction to materials;
(h) Disclosed as a shortage by inventory; and
(i) On which the tax has been determined and which are—
(1) Received, and
(2) Disposed of.
(Approved by the Office of Management and Budget under control number 1513-0068.)
\[T.D. ATF-421, [64 FR 71923](https://www.federalregister.gov/citation/64-FR-71923), Dec. 22, 1999, as amended by T.D. ATF-424, [64 FR 71931](https://www.federalregister.gov/citation/64-FR-71931), Dec. 22, 1999; T.D. ATF-420, [64 FR 71940](https://www.federalregister.gov/citation/64-FR-71940), Dec. 22, 1999; T.D. TTB-75, [74 FR 14482](https://www.federalregister.gov/citation/74-FR-14482), Mar. 31, 2009; [78 FR 38567](https://www.federalregister.gov/citation/78-FR-38567), June 27, 2013]
#### § 40.184 Record of removals subject to tax.
(a) *Requirement.* Every manufacturer of tobacco products must keep a record of tobacco products removed from the factory subject to tax. The manufacturer must make entries in this record at the time of removal. The record for each removal must show:
(1) The date of removal,
(2) The name and address of the person to whom shipped or delivered,
(3) The kind and quantity of tobacco products removed, and
(4) For large cigars, show the sale price (if the sale price is more than $235.294 per thousand before April 1, 2009, or more than $763.222 per thousand on and after April 1, 2009, you may place a note to that effect in the record instead of the actual price).
(b) *Exceptions.*
(1) The record of removal may consist of the manufacturer's commercial documents, such as copies of invoices, rather than records prepared expressly to meet the requirements of this section. If commercial documents are used, they must be kept at the factory, contain all the details required by this section, and be clear and accurate. Commercial documents that do not show specifically the tax classification of tobacco products (including sale price of large cigars) are still acceptable if they contain adequate information for an appropriate TTB officer to readily ascertain the applicable tax.
(2) Where tobacco products are delivered within the factory directly to the consumer, the record need not show the name and address of the consumer.
(Sec. 2128(c), Pub. L. 94-455, 90 Stat. 1921 ([26 U.S.C. 5741](https://www.govinfo.gov/link/uscode/26/5741)))
\[T.D. ATF-420, [64 FR 71941](https://www.federalregister.gov/citation/64-FR-71941), Dec. 22, 1999, as amended by T.D. TTB-75, [74 FR 14483](https://www.federalregister.gov/citation/74-FR-14483), Mar. 31, 2009]
#### § 40.185 Retention of records.
All records required to be kept under this part, including copies of authorizations, claims, inventories, notices, reports, returns and schedules, shall be retained by the manufacturer for three years following the close of the calendar year in which filed or made, or in the case of an authorization, for three years following the close of the calendar year in which the operation under such authorization is concluded. Such records shall be kept in the factory or a place convenient thereto, and shall be made available for inspection by any appropriate TTB officer upon his request.
(72 Stat. 1423; [26 U.S.C. 5741](https://www.govinfo.gov/link/uscode/26/5741))
#### § 40.186 Record in support of transfers in bond.
Every manufacturer of tobacco products shall keep a supporting record of tobacco products transferred in bond to or received in bond from other factories, and shall make the entries therein at the time of each receipt or removal of such products. Such supporting records shall show the date of receipt or removal, the name of the manufacturer and address of the factory from which received or to which removed or the permit number of such factory, and the kind and quantity of tobacco products. Where the manufacturer keeps, at the factory, copies of invoices or other commercial records containing the information required as to each receipt and removal, in such orderly manner that the information may be readily ascertained therefrom, such copies will be considered the supporting record required by this section.
(Approved by the Office of Management and Budget under control number 1512-0358)
(72 Stat. 1423, as amended; [26 U.S.C. 5741](https://www.govinfo.gov/link/uscode/26/5741))
\[T.D. 6871, [31 FR 35](https://www.federalregister.gov/citation/31-FR-35), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-172, [49 FR 14943](https://www.federalregister.gov/citation/49-FR-14943), Apr. 16, 1984; T.D. ATF-232, [51 FR 28081](https://www.federalregister.gov/citation/51-FR-28081), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 40.187 Record of sales prices of large cigars.
Every manufacturer of tobacco products who removes large cigars from the factory shall keep such records as are necessary to establish and verify the price for which the cigars are sold, in accordance with [§ 40.22](/current/title-27/section-40.22). The record shall be a continuing one of each brand and size of cigar so that the sale price on which the tax is based may be readily ascertained.
\[ T.D. ATF-307, [55 FR 52743](https://www.federalregister.gov/citation/55-FR-52743), Dec. 21, 1990. Redesignated and amended by T.D. ATF-420, [64 FR 71941](https://www.federalregister.gov/citation/64-FR-71941), Dec. 22, 1999; T.D. ATF-420, [65 FR 1676](https://www.federalregister.gov/citation/65-FR-1676), Jan. 11, 2000]
### Inventories and Reports
#### § 40.201 Inventories.
Every manufacturer of tobacco products shall make true and accurate inventories on Form 5210.9, which inventories shall include all tobacco products and processed tobacco on hand required to be accounted for in the records kept under this part. The manufacturer shall make such an inventory at the time of commencing business, which shall be the effective date of the permit issued upon original qualification under this part; at the time of transferring ownership; at the time of changing the location of his factory; at the time of concluding business; and at such other time as any appropriate TTB officer may require. Each inventory shall be prepared in duplicate, and shall be subject to verification by an appropriate TTB officer. The original of each such inventory shall be submitted to the appropriate TTB officer, and the duplicate shall be retained by the manufacturer.
(Approved by the Office of Management and Budget under control number 1512-0358)
(72 Stat. 1422, 1423, as amended; [26 U.S.C. 5721](https://www.govinfo.gov/link/uscode/26/5721), [5741](https://www.govinfo.gov/link/uscode/26/5741))
\[T.D. 6871, [31 FR 35](https://www.federalregister.gov/citation/31-FR-35), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-172, [49 FR 14943](https://www.federalregister.gov/citation/49-FR-14943), Apr. 16, 1984; T.D. ATF-232, [51 FR 28081](https://www.federalregister.gov/citation/51-FR-28081), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-424, [64 FR 71931](https://www.federalregister.gov/citation/64-FR-71931), Dec. 22, 1999; T.D. TTB-78, [74 FR 29409](https://www.federalregister.gov/citation/74-FR-29409), June 22, 2009; T.D. TTB-91, [76 FR 5480](https://www.federalregister.gov/citation/76-FR-5480), Feb. 1, 2011]
#### § 40.202 Reports.
(a) *Monthly report.* Every manufacturer of tobacco products shall make a report on Form 5210.5, in duplicate, for each month and for any portion of a month during which he engages in such business. Such report shall be made regardless of whether any operations or transactions occurred during the month or portion of a month covered therein. The report for a month or portion of a month in which business is commenced or is concluded shall be conspicuously marked “Commencing Report” or “Concluding Report,” respectively. The original of the report shall be submitted to the appropriate TTB officer not later than the 20th day of the month succeeding the month covered therein, and the duplicate shall be retained by the manufacturer. Each report shall show, for the period covered, the total quantity of tobacco products:
(1) Manufactured,
(2) Received in bond,
(3) Received by return to bond,
(4) Disclosed by inventory as an overage,
(5) Removed subject to tax,
(6) Removed in bond,
(7) Otherwise disposed of without determination of tax,
(8) Disclosed by inventory as a shortage, and
(9) On hand, in bond, beginning of and end of month.
(b) *Report of processed tobacco.* In addition to complying with the requirements set forth in this part relating to the reporting of tobacco products, a manufacturer of tobacco products that is required to obtain authorization to engage in another business within the factory under [§§ 40.47(b)](/current/title-27/section-40.47#p-40.47\(b\)) and [40.72(b)](/current/title-27/section-40.72#p-40.72\(b\)) must also make and submit reports as prescribed in [§ 40.522](/current/title-27/section-40.522).
(Approved by the Office of Management and Budget under control number 1513-0033)
(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 ([26 U.S.C. 5722](https://www.govinfo.gov/link/uscode/26/5722)))
\[T.D. 6871, [31 FR 36](https://www.federalregister.gov/citation/31-FR-36), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-40, [42 FR 5001](https://www.federalregister.gov/citation/42-FR-5001), Jan. 26, 1977; T.D. ATF-232, [51 FR 28081](https://www.federalregister.gov/citation/51-FR-28081), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-307, [55 FR 52743](https://www.federalregister.gov/citation/55-FR-52743), Dec. 21, 1990; T.D. ATF-424, [64 FR 71931](https://www.federalregister.gov/citation/64-FR-71931), Dec. 22, 1999; T.D. TTB-78, [74 FR 29409](https://www.federalregister.gov/citation/74-FR-29409), June 22, 2009; T.D. TTB-104, [77 FR 37302](https://www.federalregister.gov/citation/77-FR-37302), June 21, 2012]
### Packages
#### § 40.211 Package.
All tobacco products shall, before removal subject to tax, be put up by the manufacturer in packages which shall be of such construction as will securely contain the products therein and maintain the mark and the notice thereon as required by this part. No package of tobacco products shall have contained therein, attached thereto, or stamped, marked, written, or printed thereon (a) any certificate, coupon, or other device purporting to be or to represent a ticket, chance, share, or an interest in, or dependent on, the event of a lottery, (b) any indecent or immoral picture, print, or representation, or (c) any statement or indication that United States tax has been paid. No person may purchase, receive, possess (except for personal consumption), offer for sale, or sell or otherwise dispose of, after removal, any tobacco products that are not put up in packages bearing the marks, labels, and notices, as required under this part.
([26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723) and [5751](https://www.govinfo.gov/link/uscode/26/5751))
\[T.D. 6871, [31 FR 36](https://www.federalregister.gov/citation/31-FR-36), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28081](https://www.federalregister.gov/citation/51-FR-28081), Aug. 5, 1986 T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. TTB-78, [74 FR 29409](https://www.federalregister.gov/citation/74-FR-29409), June 22, 2009]
#### § 40.212 Mark.
Every package of tobacco products packaged in a domestic factory shall, before removal subject to tax, have adequately imprinted thereon, or on a label securely affixed thereto, a mark as specified in this section. The mark may consist of the name of the manufacturer removing the product subject to tax and the location (by city and State) of the factory from which the products are to be so removed, or may consist of the permit number of the factory from which the products are to be so removed. (Any trade name of the manufacturer approved as provided in [§ 40.65](/current/title-27/section-40.65) may be used in the mark as the name of the manufacturer.) As an alternative, where tobacco products are packaged and removed subject to tax by the same manufacturer, either at the same or different factories, the mark may consist of the name of such manufacturer if the factory where packaged is identified on or in the package by a means approved by the appropriate TTB officer. Before using the alternative, the manufacturer shall notify the appropriate TTB officer in writing of the name to be used as the name of the manufacturer and the means to be used for identifying the factory where packaged. If approved by him the appropriate TTB officer shall return approved copies of the notice to the manufacturer. A copy of the approved notice shall be retained as part of the factory records at each of the factories operated by the manufacturer.
(72 Stat. 1422; [26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723))
\[T.D. 6871, [31 FR 36](https://www.federalregister.gov/citation/31-FR-36), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975; T.D. ATF-232, [51 FR 28081](https://www.federalregister.gov/citation/51-FR-28081), Aug. 5, 1986; T.D. ATF-243, [52 FR 43194](https://www.federalregister.gov/citation/52-FR-43194), Dec. 1, 1986]
#### § 40.213 Tobacco products labeled for export.
Tobacco products labeled for export are ineligible for removal from the factory for distribution into the U.S. domestic market. Tobacco products labeled for export may not be sold, transferred, or delivered into the U.S. domestic market by a manufacturer of tobacco products unless the manufacturer repackages the tobacco product by removing it from its original package bearing the export marks and placing it into a new package. The new package, mark, and notice must conform to the requirements of this subpart.
\[[78 FR 38567](https://www.federalregister.gov/citation/78-FR-38567), June 27, 2013]
#### § 40.214 Notice for cigars.
Before removal subject to tax, every package of cigars shall have adequately imprinted on it, or on a label securely affixed to it—
(a) The designation “cigars”;
(b) The quantity of cigars contained in the package; and
(c) For small cigars, the classification of the product for tax purposes (i.e., either “small” or “little”).
(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 ([26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723)))
\[T.D. ATF-80, [46 FR 18310](https://www.federalregister.gov/citation/46-FR-18310), Mar. 24, 1981]
#### § 40.215 Notice for cigarettes.
Every package of cigarettes shall, before removal subject to tax, have adequately imprinted thereon, or on a label securely affixed thereto, the designation “cigarettes”, the quantity of such product contained therein, and the classification for tax purposes, i.e., for small cigarettes, either “small” or “Class A”, and for large cigarettes, either “large” or “Class B”.
(72 Stat. 1422; [26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723))
#### § 40.216 Notice for smokeless tobacco.
(a) *Product designation.* Every package of chewing tobacco or snuff shall, before removal subject to tax, have adequately imprinted thereon, or on a label securely affixed thereto, the designation “chewing tobacco” or “snuff.” As an alternative, packages of chewing tobacco may be designated “Tax Class C”, and packages of snuff may be designated “Tax Class M”.
(b) *Product weight.* Every package of chewing tobacco or snuff shall, before removal subject to tax, have adequately imprinted thereon, or on a label securely affixed thereto, a clear statement of the actual pounds and ounces of the product contained therein. As an alternative, the shipping cases containing packages of chewing tobacco or snuff may, before removal, have adequately imprinted thereon, or on a label securely affixed thereto, a clear statement, in pounds and ounces, of the total weight of the product, the tax class of the product, and the total number of the packages of product contained therein.
(Approved by the Office of Management and Budget under control number 1512-0502)
(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 ([26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723)))
\[T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986, as amended by T.D. ATF-446, [66 FR 16602](https://www.federalregister.gov/citation/66-FR-16602), Mar. 27, 2001]
#### § 40.216a Notice for pipe tobacco.
(a) *Product designation.* Every package of pipe tobacco shall, before removal subject to tax, have adequately imprinted thereon, or on a label securely affixed thereto, the designation “pipe tobacco.”
(b) *Product weight.* Every package of pipe tobacco shall, before removal subject to tax, have adequately imprinted thereon, or on a label securely affixed thereto, a clear statement of the actual pounds and ounces of the product contained therein.
\[T.D. ATF-289, [54 FR 48840](https://www.federalregister.gov/citation/54-FR-48840), Nov. 27, 1989. Redesignated at T.D. ATF-424, [64 FR 71931](https://www.federalregister.gov/citation/64-FR-71931), Dec. 22, 1999; T.D. TTB-78, [74 FR 29410](https://www.federalregister.gov/citation/74-FR-29410), June 22, 2009]
#### § 40.216b Notice for roll-your-own tobacco.
(a) *Product designation.* Every package of roll-your-own tobacco, before removal subject to tax, must have adequately imprinted on it, or on a label securely affixed to it, the applicable designation “roll-your-own tobacco”, “cigarette tobacco”, “cigar tobacco”, “cigarette wrapper”, or “cigar wrapper”.
(b) *Product weight.* Before removal subject to tax, roll-your-own tobacco must have a clear statement of the actual weight in pounds and ounces of the product in the package. This statement must be adequately imprinted on, or on a label securely affixed to, the package.
(Approved by the Office of Management and Budget under control number 1513-0091)
\[T.D. ATF-429, [65 FR 57547](https://www.federalregister.gov/citation/65-FR-57547), Sept. 25, 2000, as amended by T.D. TTB-78, [74 FR 29410](https://www.federalregister.gov/citation/74-FR-29410), June 22, 2009]
#### § 40.216c Package use-up rule.
(a) During the period from June 22, 2009, through March 23, 2010, a manufacturer of tobacco products may remove packages of pipe tobacco or roll-your-own tobacco that do not meet the requirements of [§ 40.216a(a)](/current/title-27/section-40.216a#p-40.216a\(a\)) or [§ 40.216b(a)](/current/title-27/section-40.216b#p-40.216b\(a\)), provided that such packages bear the designation “Tax Class L” (to designate pipe tobacco) or “Tax Class J” (to designate roll-your-own tobacco) and were in use prior to June 22, 2009.
(b) During the period from June 22, 2009, through March 23, 2010, a manufacturer may remove roll-your-own tobacco for which the applicable designation is “cigar tobacco,” “cigarette wrapper,” or “cigar wrapper” even if the packages of such products do not meet the requirements of [§ 40.216b](/current/title-27/section-40.216b).
\[T.D. TTB-81, [74 FR 48654](https://www.federalregister.gov/citation/74-FR-48654), Sept. 24, 2009]
#### § 40.217 Repackaging.
Where a manufacturer of tobacco products desires to repackage, outside the factory, tobacco products on which the tax has been determined or which were removed for a tax-exempt purpose or transferred in bond to an export warehouse, or to repackage tax determined tobacco products in the factory, he shall make application for authorization to do so, in duplicate, to the appropriate TTB officer. The application shall set forth the location and the number of packages, a description of the contents, the tax status of the tobacco products the reason for wanting to repackage the products (e.g., packages soiled, damaged, or otherwise in a condition making the product unsalable), and a description of the package to be used for repackaging. The packages to be used must comply with the package, mark, and notice provisions of this chapter applicable to the tobacco products being repackaged. The operations authorized under this section are limited solely to repackaging for good cause by a manufacturer, pursuant to an approved application, of the specified tobacco products in the described packages, and do not include any manufacturing processes. If the appropriate TTB officer approves the application, he may assign an appropriate TTB officer to supervise the repackaging or he may authorize the manufacturer to repackage the products without supervision by so stating on a copy of the application returned to the manufacturer. Where the manufacturer is authorized to repackage he shall record the date of repackaging on the approved application and retain it as part of his records.
(72 Stat. 1422; [26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723))
\[T.D. 6871, [31 FR 36](https://www.federalregister.gov/citation/31-FR-36), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28082](https://www.federalregister.gov/citation/51-FR-28082), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
### Exemption From Taxes on Tobacco Products
#### § 40.231 Consumption by employees.
A manufacturer of tobacco products may gratuitously furnish tobacco products, without determination and payment of tax, for personal consumption by employees in the factory in such quantities as desired. Each employee may also be gratuitously furnished by the manufacturer, for off-factory personal consumption, not more than 5 large cigars or cigarettes, 20 small cigars or cigarettes, or one retail package of chewing tobacco, snuff, pipe tobacco or roll-your-own tobacco, or a proportionate quantity of each, without determination and payment of tax, on each day the employee is at work. For the purposes of this section, the term “employee” shall mean those persons whose duties require their presence in the factory or whose duties relate to the manufacture, distribution, or sale of tobacco products and who receive compensation from the manufacturer, or a parent, subsidiary, or auxiliary company or corporation of the manufacturer. Such product furnished for off-factory consumption shall be furnished to the employee within the factory and taken from the factory by the employee on the day for which furnished. Employees shall not sell, offer for sale, or give away products so furnished.
\[T.D. ATF-232, [51 FR 28082](https://www.federalregister.gov/citation/51-FR-28082), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986, as amended by T.D. ATF-289, [54 FR 48840](https://www.federalregister.gov/citation/54-FR-48840), Nov. 27, 1989; T.D. ATF-424, [64 FR 71931](https://www.federalregister.gov/citation/64-FR-71931), Dec. 22, 1999; T.D. TTB-91, [76 FR 5480](https://www.federalregister.gov/citation/76-FR-5480), Feb. 1, 2011]
#### § 40.232 Experimental purposes.
A manufacturer of tobacco products may use tobacco products for experimental purposes without determination and payment of tax as set forth in this section.
(a) *What are experimental purposes?* Experimental purposes are operations or tests carried out under controlled conditions to discover an unknown scientific principle or fact, to gather or confirm data about a known scientific principle or fact, or to test manufacturing, packaging, or other such equipment. Examples of uses for experimental purposes are:
(1) Use by manufacturers to determine scientific facts relating to tobacco products, such as their chemical content;
(2) Use by producers of packaging machines to test the operation of such machines; and
(3) Use by laboratories, hospitals, medical centers, institutes, colleges, or universities, for scientific, technical, or medical research.
(b) *What purposes are not experimental?* The uses of tobacco products outside the factory premises for advertising or consumer testing or as salespersons' or customers' samples are not experimental purposes.
(c) *Use in factory.* A manufacturer of tobacco products may use tobacco products without determination and payment of tax for experimental purposes in a factory.
(d) *Use outside factory.* A manufacturer may remove tobacco products in bond for experimental purposes outside a factory. When tobacco products are shipped for experimental purposes outside the factory, the proprietor of the factory remains liable for the taxes imposed by [26 U.S.C. 5701](https://www.govinfo.gov/link/uscode/26/5701) until the occurrence of one of the following events:
(1) The tobacco products are returned to the premises of the factory from which they were shipped; or
(2) The tobacco products are destroyed during or after their use for experimental purposes.
(e) *Record of use.* In addition to the records prescribed by [§ 40.183](/current/title-27/section-40.183), a manufacturer who removes tobacco products in bond for experimental purposes outside a factory must prepare and maintain a record containing the following information:
(1) Name and address of the consignee;
(2) Kind and quantity of tobacco products removed;
(3) Description of packaging, if any, of the tobacco products removed;
(4) Description of how and when the consignee will use the tobacco products; and
(5) Disposition of any remaining tobacco products after the consignee's use.
(Approved by the Office of Management and Budget under Control Number 1512-0562)
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. ATF-478, [67 FR 19333](https://www.federalregister.gov/citation/67-FR-19333), Apr. 19, 2002]
#### § 40.233 Transfer in bond.
A manufacturer of tobacco products may transfer tobacco products in bond, to the factory of any manufacturer of tobacco products. The transfer of tobacco products in bond to the premises of an export warehouse proprietor shall be in accordance with the provisions of [part 44 of this chapter](/current/title-27/part-44). However, tobacco products are eligible for transfer in bond to a manufacturer of tobacco products or to an export warehouse only if they bear the required marks, labels, and notices.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 37](https://www.federalregister.gov/citation/31-FR-37), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28082](https://www.federalregister.gov/citation/51-FR-28082), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-421, [64 FR 71924](https://www.federalregister.gov/citation/64-FR-71924), Dec. 22, 1999; [78 FR 38567](https://www.federalregister.gov/citation/78-FR-38567), June 27, 2013]
#### § 40.234 Removal for use of the United States.
The removal of tobacco products in bond, for use of the United States, shall be in accordance with the provisions of [part 45 of this chapter](/current/title-27/part-45).
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 37](https://www.federalregister.gov/citation/31-FR-37), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975; T.D. ATF-232, [51 FR 28082](https://www.federalregister.gov/citation/51-FR-28082), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-469, [66 FR 56758](https://www.federalregister.gov/citation/66-FR-56758), Nov. 13, 2001]
#### § 40.235 Removal for export purposes.
The removal of tobacco products in bond, for shipment to a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States, or for consumption beyond the jurisdiction of the internal revenue laws of the United States, shall be in accordance with the provisions of [part 44 of this chapter](/current/title-27/part-44).
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 37](https://www.federalregister.gov/citation/31-FR-37), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28082](https://www.federalregister.gov/citation/51-FR-28082), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 40.236 Release from customs custody.
The release of tobacco products from customs custody, in bond, for transfer to the premises of a tobacco products factory, shall be in accordance with the provisions of [part 41 of this chapter](/current/title-27/part-41).
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 37](https://www.federalregister.gov/citation/31-FR-37), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28082](https://www.federalregister.gov/citation/51-FR-28082), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. TTB-16, [69 FR 52423](https://www.federalregister.gov/citation/69-FR-52423), Aug. 26, 2004]
### Other Provisions Relating to Operations
#### § 40.251 Emergency storage.
In cases of emergency, the appropriate TTB officer may authorize, for a stated period, the temporary storage of tobacco products at a place outside the factory without the application for amended permit required under [§ 40.114](/current/title-27/section-40.114), where such action will not hinder the effective administration of this part, is not contrary to law, and will not jeopardize the revenue. Application for authorization to so store tobacco products shall be submitted to the appropriate TTB officer by letter, in duplicate. All tobacco products so stored outside the factory shall be accounted for in the records and reports required under [§§ 40.183](/current/title-27/section-40.183) and [40.202](/current/title-27/section-40.202) the same as products within the factory.
(72 Stat. 1422, 1423, as amended; [26 U.S.C. 5722](https://www.govinfo.gov/link/uscode/26/5722), [5741](https://www.govinfo.gov/link/uscode/26/5741))
\[T.D. 6871, [31 FR 37](https://www.federalregister.gov/citation/31-FR-37), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975; T.D. ATF-232, [51 FR 28082](https://www.federalregister.gov/citation/51-FR-28082), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 40.252 Reduction of tobacco products to materials.
A manufacturer may reduce tobacco products to materials without supervision. If the tobacco products have been entered in the factory record as manufactured or received, an entry shall be made in such record of the quantity of pipe tobacco or roll-your-own tobacco and the kind and quantity of cigars, cigarettes, and smokeless tobacco reduced to materials and of the quantity of tobacco resulting from the reduction. Where the manufacturer intends to file claims for credit allowance, or refund of tax on such tobacco products, he shall comply with the provisions of [§§ 40.311](/current/title-27/section-40.311) and [40.313](/current/title-27/section-40.313).
\[T.D. ATF-232, [51 FR 28082](https://www.federalregister.gov/citation/51-FR-28082), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986, as amended by T.D. ATF-289, [54 FR 48840](https://www.federalregister.gov/citation/54-FR-48840), Nov. 27, 1989; T.D. ATF-424, [64 FR 71931](https://www.federalregister.gov/citation/64-FR-71931), Dec. 22, 1999]
#### § 40.253 Destruction.
When a manufacturer of tobacco products desires to destroy tobacco products which have been entered in the factory record as manufactured or received, without salvaging the tobacco, he shall notify the appropriate TTB officer by letter, in duplicate, of the kind and quantity of tobacco products to be destroyed, the intended method of destruction, and the date on which he desires to destroy such products. The appropriate TTB officer may assign an appropriate TTB officer to supervise destruction of the tobacco products or he may authorize the manufacturer to destroy such products without supervision by so stating on a copy of the manufacturer's notice returned to the manufacturer. When so authorized by the appropriate TTB officer, the manufacturer shall destroy the tobacco products by burning completely or by rendering them unfit for consumption. Upon completion of the destruction, the manufacturer shall make an entry of such destruction in his factory record, and where destruction without supervision is authorized, shall record the date and method of destruction on the notice returned to him by the appropriate TTB officer, which notice the manufacturer shall retain. Where the manufacturer intends to file claim for credit, allowance, or refund of tax on such products he shall comply with the provisions of [§§ 40.311](/current/title-27/section-40.311) and [40.313](/current/title-27/section-40.313).
(72 Stat. 1423, as amended; [26 U.S.C. 5741](https://www.govinfo.gov/link/uscode/26/5741))
\[T.D. 6871, [31 FR 37](https://www.federalregister.gov/citation/31-FR-37), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28082](https://www.federalregister.gov/citation/51-FR-28082), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 40.254 Receipt into factory.
A manufacturer of tobacco products may receive in bond into his factory tobacco products and may also receive into his factory tobacco products on which the tax has been determined (including products on which the tax has been paid). Cigars and cigarettes on which the tax has been determined which are so received shall be segregated and identified as products on which the tax has been determined. If tax determined products received into the factory are so handled that they cannot be identified both physically and in the records as tax determined products they shall be accounted for as returned to bond and upon subsequent removal shall be tax determined. Where returned tax determined tobacco products are to be repackaged without being returned to bond the manufacturer shall make application for authorization to do so to the appropriate TTB officer in accordance with [§ 40.217](/current/title-27/section-40.217). Where the manufacturer intends to file claim for credit, allowance, or refund of tax on tax determined products he shall comply with the provisions of [§§ 40.311](/current/title-27/section-40.311) and [40.313](/current/title-27/section-40.313).
\[T.D. 6871, [31 FR 37](https://www.federalregister.gov/citation/31-FR-37), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28082](https://www.federalregister.gov/citation/51-FR-28082), Aug. 5, 1986; T.D. ATF-243, [52 FR 43194](https://www.federalregister.gov/citation/52-FR-43194), Dec. 1, 1986]
#### § 40.255 Shortages and overages in inventory.
Whenever a manufacturer of tobacco products makes a physical inventory of packaged tobacco products in bond, either as part of normal operations or when required by an appropriate TTB officer, and such inventory discloses a shortage or overage in such products by kind as recorded and reported (*i.e.,* small cigars, large cigars, chewing tobacco, snuff, pipe tobacco, or roll-your-own tobacco), the manufacturer shall enter such shortage or overage in the records required by [§ 40.183](/current/title-27/section-40.183). Shortages or overages in inventories made at different times may not be used to offset each other, but shall be recorded and reported separately. Unless the manufacturer establishes that a shortage was not caused by a removal subject to the tax the manufacturer shall determine the tax on any shortage, make an adjustment in Schedule A of his next semimonthly tax return and pay the tax thereon. If, after paying the tax on a shortage, the manufacturer satisfactorily establishes that the shortage was not caused by a removal subject to tax, then such payment would be an overpayment of tax which the manufacturer may recover as provided in [§ 40.286](/current/title-27/section-40.286). Where the manufacturer can establish prior to paying the tax on a shortage, that the shortage was not the result of a removal subject to tax he shall submit an explanation of such shortage with his report for the month in which the shortage was disclosed and, if appropriate, he may file claim for remission of tax liability as provided in [§ 40.287](/current/title-27/section-40.287). When an overage is disclosed which the manufacturer can explain, he shall include such explanation in his monthly report and refund of any overpayment may be recovered as provided in [§ 40.286](/current/title-27/section-40.286). Whenever a physical inventory discloses a shortage or overage of tobacco products which have not been packaged the manufacturer shall appropriately enter such shortage or overage in his records and shall, at the time required by the appropriate TTB officer, furnish an explanation in the form of a claim for remission of tax liability as provided in [§ 40.287](/current/title-27/section-40.287). The manufacturer shall pay the tax on any shortage or portion thereof for which he is unable to furnish an explanation acceptable to the appropriate TTB officer.
\[T.D. ATF-232, [51 FR 28082](https://www.federalregister.gov/citation/51-FR-28082), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986, as amended by T.D. ATF-289, [54 FR 48840](https://www.federalregister.gov/citation/54-FR-48840), Nov. 27, 1989; T.D. ATF-424, [64 FR 71931](https://www.federalregister.gov/citation/64-FR-71931), Dec. 22, 1999]
#### § 40.256 Minimum manufacturing and activity requirements.
The minimum manufacturing and activity requirement prescribed in [§ 40.61(c) of this part](/current/title-27/part-40/section-40.61#p-40.61\(c\)) is a continuing condition of a manufacturer's permit, that is, a permit to manufacture tobacco products is conditioned upon a person's principal business activity being the manufacture of tobacco products. A permit may be suspended, and subsequently revoked, if the person's principal business activity under such permit is to receive or transfer tobacco products in bond, or if the person has no activity under such permit for a period of one year. As a minimum activity requirement, the quantity of tobacco products manufactured under the permit must be equivalent to, or exceed, the quantity transferred or received in bond under the permit.
\[T.D. TTB-78, [74 FR 29410](https://www.federalregister.gov/citation/74-FR-29410), June 22, 2009, as amended by T.D. TTB-80, [74 FR 37552](https://www.federalregister.gov/citation/74-FR-37552), July 29, 2009; T.D. TTB-104, [77 FR 37303](https://www.federalregister.gov/citation/77-FR-37303), June 21, 2012]
#### § 40.257 Processed tobacco.
A manufacturer of tobacco products may be required to obtain authorization from the appropriate TTB officer with regard to the activities involving processed tobacco. See [§ 40.72](/current/title-27/section-40.72). Such manufacturers also must maintain records and may be required to submit reports regarding such activities. See [§§ 40.182](/current/title-27/section-40.182) and [40.202](/current/title-27/section-40.202).
\[T.D. TTB-78, [74 FR 29410](https://www.federalregister.gov/citation/74-FR-29410), June 22, 2009]
## Subpart I—Claims by Manufacturers
### General
#### § 40.281 Abatement of assessment.
A claim for abatement of the unpaid portion of the assessment of any tax on tobacco products or any liability in respect thereof, may be allowed to the extent that such assessment is excessive in amount, is assessed after expiration of the applicable period of limitation, or is erroneously or illegally assessed. Any claim under this section shall be prepared on TTB F 5620.8, in duplicate, and shall set forth the particulars under which the claim is filed. The original of the claim, accompanied by such evidence as is necessary to establish to the satisfaction of the appropriate TTB officer that the claim is valid, shall be filed with the appropriate TTB officer, and the duplicate of the claim shall be retained by the manufacturer.
(68A Stat. 792; [26 U.S.C. 6404](https://www.govinfo.gov/link/uscode/26/6404))
\[T.D. 6871, [31 FR 38](https://www.federalregister.gov/citation/31-FR-38), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28083](https://www.federalregister.gov/citation/51-FR-28083), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-251, [52 FR 19340](https://www.federalregister.gov/citation/52-FR-19340), May 22, 1987]
#### § 40.282 Allowance of tax.
Relief from the payment of tax on tobacco products may be extended to a manufacturer by allowance of the tax where the tobacco products after removal from the factory upon determination of tax and prior to the payment of such tax, are lost (otherwise than by theft) or destroyed, by fire, casualty, or act of God, while in the possession or ownership of the manufacturer who removed such products, or are withdrawn by him from the market. Any claim for allowance under this section shall be filed on TTB F 5620.8, in duplicate, with the appropriate TTB officer, and shall show the date the tobacco products were removed from the factory. A claim relating to products lost or destroyed shall be supported as prescribed in [§ 40.301](/current/title-27/section-40.301). In the case of a claim relating to tobacco products withdrawn from the market the schedule prescribed in [§ 40.311](/current/title-27/section-40.311) shall be filed with the appropriate TTB officer. The manufacturer may not anticipate allowance of his claim by making the adjusting entry in a tax return pending consideration and action on the claim. Tobacco products to which such a claim relates must be shown as removed on determination of tax in the return covering the period during which such products were so removed. Upon action on the claim by the appropriate TTB officer he will return the copy of TTB F 5620.8 to the manufacturer as notice of such action, which copy, with the copy of any verified supporting schedules, shall be retained by the manufacturer. When such notification of allowance of the claim or any part thereof is received prior to the time the return covering the tax on the tobacco products to which the claim relates is to be filed, the manufacturer may make an adjusting entry and explanatory statement in that tax return. Where the notice of allowance is received after the filing of the return and taxpayment of the tobacco products to which the claim relates, the manufacturer may make an adjusting entry and explanatory statement in the next tax return(s) to the extent necessary to take credit in the amount of the allowance.
(72 Stat. 1419, as amended; [26 U.S.C. 5705](https://www.govinfo.gov/link/uscode/26/5705))
\[T.D. 6961, [33 FR 9488](https://www.federalregister.gov/citation/33-FR-9488), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28083](https://www.federalregister.gov/citation/51-FR-28083), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 40.283 Credit or refund of tax.
The taxes paid on tobacco products may be credited or refunded (without interest) to a manufacturer on proof satisfactory to the appropriate TTB officer that the claimant manufacturer paid the tax on tobacco products lost (otherwise than by theft) or destroyed, by fire, casualty, or act of God, while in the possession or ownership of such manufacturer, or withdrawn by him from the market. Any claim for credit or refund under this section shall be prepared on TTB F 5620.8, in duplicate. Claims shall include a statement that the tax imposed on tobacco products by [26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652) or chapter 52, was paid in respect to the tobacco products covered by the claim, and that the products were lost, destroyed, or withdrawn from the market within 6 months preceding the date the claim is filed. A claim for credit or refund relating to products lost or destroyed shall be supported as prescribed in [§ 40.301](/current/title-27/section-40.301), and a claim relating to products withdrawn from the market shall be accompanied by a schedule prepared and verified as prescribed in [§§ 40.311](/current/title-27/section-40.311) and [40.313](/current/title-27/section-40.313). The original and one copy of TTB F 5620.8, claim for credit, or the original of TTB F 5620.8, claim for refund, shall be filed with the appropriate TTB officer. Upon action by the appropriate TTB officer on a claim for credit he will return the copy of TTB F 5620.8 to the manufacturer as notification of allowance or disallowance of the claim or any part thereof, which copy, with the copy of any verified supporting schedules, shall be retained by the manufacturer. When the manufacturer is notified of allowance of the claim for credit or any part thereof he shall make an adjusting entry and explanatory statement in the next tax return(s) to the extent necessary to take credit in the amount of the allowance. Prior to consideration and action on his claim the manufacturer may not anticipate allowance of his claim by taking credit in his tax return. The duplicate of a claim for refund, with the copy of any verified supporting schedules, shall be retained by the manufacturer.
(Sec. 201, Pub. L. 85-859, 72 Stat. 1419)
\[T.D. 6961, [33 FR 9489](https://www.federalregister.gov/citation/33-FR-9489), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55855](https://www.federalregister.gov/citation/44-FR-55855), Sept. 28, 1979; T.D. ATF-219, [50 FR 51389](https://www.federalregister.gov/citation/50-FR-51389), Dec. 17, 1985; T.D. ATF-232, [51 FR 28083](https://www.federalregister.gov/citation/51-FR-28083), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-251, [52 FR 19340](https://www.federalregister.gov/citation/52-FR-19340), May 22, 1987]
#### § 40.284 Remission of tax liability.
Remission of the tax liability on tobacco products may be extended to the manufacturer liable for the tax where tobacco products in bond are lost (otherwise than by theft) or destroyed, by fire, casualty, or act of God, while in the possession or ownership of such manufacturer. Where tobacco products are so lost or destroyed the manufacturer shall report promptly such fact, and the circumstances, to the appropriate TTB officer. If the manufacturer wishes to be relieved of the tax liability thereon he shall also prepare a claim on TTB F 5620.8, in duplicate, setting forth the nature, date, place, and extent of the loss or destruction. Both copies of the claim, accompanied by such evidence as is necessary to establish to the satisfaction of the appropriate TTB officer that the claim is valid, shall be filed with the appropriate TTB officer. Upon action on the claim by the appropriate TTB officer he will return the copy of TTB F 5620.8 to the manufacturer as notice of such action, which copy shall be retained by the manufacturer.
(72 Stat. 1419, as amended; [26 U.S.C. 5705](https://www.govinfo.gov/link/uscode/26/5705))
\[T.D. 6961, [33 FR 9489](https://www.federalregister.gov/citation/33-FR-9489), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28083](https://www.federalregister.gov/citation/51-FR-28083), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 40.285 \[Reserved]
#### § 40.286 Refund of overpayment.
Where an error in computation of the quantity of tobacco products or in computation of the amount of tax due results in an overpayment and such error is specifically identified and supported by records, the manufacturer may file claim for refund or may make an adjustment in his semimonthly tax return as provided in [§ 40.164](/current/title-27/section-40.164). (Section 6511, 26 U.S.C., provides that, in most cases, any adjustment of claim for refund of an overpayment of tax on tobacco products must be made or filed within three years after the tax is paid.) If the manufacturer elects to file a claim for refund of an overpayment resulting from such a computational error, he shall do so on TTB F 5620.8, in duplicate. The original shall be filed with the appropriate TTB officer, and the duplicate retained by the manufacturer. Where an overpayment of tax on tobacco products results from other than a computational error any claim for refund or credit shall be made in accordance with [subpart A of part 46 of this chapter](/current/title-27/part-46/subpart-A).
(68A Stat. 791, 72 Stat. 9; [26 U.S.C. 6402](https://www.govinfo.gov/link/uscode/26/6402), [6423](https://www.govinfo.gov/link/uscode/26/6423))
\[T.D. 6871, [31 FR 39](https://www.federalregister.gov/citation/31-FR-39), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55855](https://www.federalregister.gov/citation/44-FR-55855), Sept. 28, 1979; T.D. ATF-232, [51 FR 28083](https://www.federalregister.gov/citation/51-FR-28083), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-251, [52 FR 19340](https://www.federalregister.gov/citation/52-FR-19340), May 22, 1987; T.D. ATF-457, [66 FR 32220](https://www.federalregister.gov/citation/66-FR-32220), June 14, 2001]
#### § 40.287 Remission of tax liability on shortage.
Whenever a manufacturer of tobacco products desires to submit a claim for remission of tax liability on shortages of tobacco products in bond, disclosed by physical inventory as set forth in [§ 40.255](/current/title-27/section-40.255), he shall prepare such claim on TTB F 5620.8, in duplicate. Both copies of the claim shall be filed with the appropriate TTB officer. The claim shall specify the quantities of tobacco products on which claim is made and the tax liability in respect thereof, and shall set forth the circumstances surrounding the shortage and the reason the manufacturer believes tax is not due or payable. The appropriate TTB officer will, after such investigation as he deems appropriate, allow the claim to the extent he is satisfied the shortage was due to operating losses such as damage during grading, sorting, or packaging, and was not caused by theft or other unlawful or improper removal. Upon action on the claim by the appropriate TTB officer he will return the copy of TTB F 5620.8 to the manufacturer as notice of such action, which copy shall be retained by the manufacturer.
(72 Stat. 1414, as amended, 1417, 1419, as amended; [26 U.S.C. 5701](https://www.govinfo.gov/link/uscode/26/5701), [5703](https://www.govinfo.gov/link/uscode/26/5703), [5705](https://www.govinfo.gov/link/uscode/26/5705))
\[T.D. 6961, [33 FR 9489](https://www.federalregister.gov/citation/33-FR-9489), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28083](https://www.federalregister.gov/citation/51-FR-28083), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
### Tobacco Products Lost or Destroyed
#### § 40.301 Action by claimant.
Where tobacco products are lost (otherwise than by theft) or destroyed, by fire, casualty, or act of God, and the manufacturer desires to file a claim for the tax on such products under the provisions of [§ 40.282](/current/title-27/section-40.282) or [§ 40.283](/current/title-27/section-40.283), he shall indicate on the claim the nature, date, place, and extent of such loss or destruction. The claim shall be accompanied by such evidence as is necessary to establish to the satisfaction of the appropriate TTB officer that the claim is valid.
(72 Stat. 1419, as amended; [26 U.S.C. 5705](https://www.govinfo.gov/link/uscode/26/5705))
\[T.D. 6871, [31 FR 39](https://www.federalregister.gov/citation/31-FR-39), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28083](https://www.federalregister.gov/citation/51-FR-28083), Aug. 5, 1986; T.D. ATF-243, [52 FR 43194](https://www.federalregister.gov/citation/52-FR-43194), Dec. 1, 1986]
### Tobacco Products Withdrawn From the Market
#### § 40.311 Action by claimant.
(a) *General.* Where tobacco products are withdrawn from the market and the manufacturer desires to file claim under the provisions of [§ 40.282](/current/title-27/section-40.282) or [§ 40.283](/current/title-27/section-40.283), he shall assemble the products in or adjacent to a factory if they are to be returned to bond or at any suitable place if they are to be destroyed or reduced to materials. The manufacturer shall group the products according to the rates of tax applicable to the products, and shall prepare a schedule of the products, on TTB Form 5200.7, in triplicate. All copies of the schedule shall be forwarded to the appropriate TTB officer.
(b) *Large cigars.* Refund or credit of tax on large cigars withdrawn from the market is limited to the lowest tax paid on that brand and size of cigar during the required record retention period (see [§ 40.185](/current/title-27/section-40.185)), except where the manufacturer establishes that a greater amount was actually paid. For each claim involving large cigars withdrawn from the market, the manufacturer must include a certification on either Form 5200.7 or TTB F 5620.8 to read as follows:
The amounts claimed relating to large cigars are based on the lowest sale price applicable to the cigars during the required record retention period, except where specific documentation is submitted with the claim to establish that any greater amount of tax claimed was actually paid.
(See [26 U.S.C. 5705](https://www.govinfo.gov/link/uscode/26/5705))
\[T.D. ATF-80, [46 FR 18310](https://www.federalregister.gov/citation/46-FR-18310), Mar. 24, 1981, as amended by T.D. ATF-232, [51 FR 28083](https://www.federalregister.gov/citation/51-FR-28083), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-251, [52 FR 19340](https://www.federalregister.gov/citation/52-FR-19340), May 22, 1987; T.D. ATF-307, [55 FR 52743](https://www.federalregister.gov/citation/55-FR-52743), Dec. 21, 1990; T.D. ATF-424, [64 FR 71932](https://www.federalregister.gov/citation/64-FR-71932), Dec. 22, 1999; T.D. ATF-420, [64 FR 71941](https://www.federalregister.gov/citation/64-FR-71941), Dec. 22, 1999]
#### § 40.312 Action by the appropriate TTB officer.
Upon receipt of a schedule of tobacco products withdrawn from the market, the appropriate TTB officer may assign a TTB officer to verify the schedule and supervise disposition of the tobacco products (and destruction of the stamps, if any), or he may authorize the manufacturer to dispose of the products (and destroy the stamps, if any) without supervision by so stating on the original and one copy of the schedule returned to the manufacturer.
\[T.D. 6871, [31 FR 39](https://www.federalregister.gov/citation/31-FR-39), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-232, [51 FR 28083](https://www.federalregister.gov/citation/51-FR-28083), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 40.313 Disposition of tobacco products and schedule.
When so authorized, as evidenced by the appropriate TTB officer's statement on the schedule, the manufacturer shall dispose of the tobacco products (and destroy the stamps, if any) as specified in the schedule. After the manufacturer has disposed of the products (and destroyed the stamps, if any), he shall execute a certificate on both copies of the schedule returned to him by the appropriate TTB officer, to show the disposition and the date of disposition of the products (and stamps, if any). In connection with a claim for allowance the manufacturer then shall return the original of the schedule to the appropriate TTB officer who authorized such disposition, who will cause such schedule to be associated with the claim, TTB F 5620.8, filed under [§ 40.282](/current/title-27/section-40.282). In connection with a claim for credit or refund the manufacturer shall attach the original of the schedule to his claim for credit, TTB F 5620.8, or claim for refund, TTB F 5620.8, filed under [§ 40.283](/current/title-27/section-40.283). When an appropriate TTB officer is assigned to verify the schedule and supervise disposition of the tobacco products, such officer shall, upon completion of his assignment, execute a certificate on all copies of the schedule to show the disposition and the date of disposition of the products. In connection with a claim for allowance the officer shall return one copy of the schedule to be included in the manufacturers records, and in connection with a claim for credit or refund, the officer shall return the original and one copy of the schedule to the manufacturer, the original of which the manufacturer shall attach to the claim, TTB F 5620.8, filed under [§ 40.283](/current/title-27/section-40.283).
(72 Stat. 1419, as amended; [26 U.S.C. 5705](https://www.govinfo.gov/link/uscode/26/5705))
\[T.D. 6871, [31 FR 39](https://www.federalregister.gov/citation/31-FR-39), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28083](https://www.federalregister.gov/citation/51-FR-28083), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-251, [52 FR 19340](https://www.federalregister.gov/citation/52-FR-19340), May 22, 1987]
## Subpart J—Suspension and Discontinuance of Operations by Manufacturers
#### § 40.331 Discontinuance of operations.
Every manufacturer of tobacco products who desires to discontinue operations under this part shall dispose of all tobacco products on hand, in accordance with this part, and make a concluding inventory and concluding report in accordance with the provisions of [§ 40.201](/current/title-27/section-40.201) and [§ 40.202](/current/title-27/section-40.202), respectively. The manufacturer shall surrender his permit, with such inventory and report, to the appropriate TTB officer as notice of such discontinuance. The appropriate TTB officer may then terminate the liability of the surety on the bond of the manufacturer.
(72 Stat. 1422; [26 U.S.C. 5721](https://www.govinfo.gov/link/uscode/26/5721), [5722](https://www.govinfo.gov/link/uscode/26/5722))
\[T.D. 6871, [37 FR 40](https://www.federalregister.gov/citation/37-FR-40), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28083](https://www.federalregister.gov/citation/51-FR-28083), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 40.332 Suspension and revocation of permit.
Where the appropriate TTB officer has reason to believe that a manufacturer of tobacco products has not in good faith complied with the provisions of [26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201), and regulations thereunder, or with any other provision of 26 U.S.C. with intent to defraud, or has violated any condition of his permit, or has failed to disclose any material information required or made any material false statement in the application for the permit, or has failed to maintain his premises in such manner as to protect the revenue, or is, by reason of previous or current legal proceedings involving a felony violation of any other provision of Federal criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes, not likely to maintain operations in compliance with [26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201), or has been convicted of a felony violation of any provision of Federal or State criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes, the appropriate TTB officer shall issue an order, stating the facts charged, citing such person to show cause why his permit should not be suspended or revoked. Such citation shall be issued and opportunity for hearing afforded in accordance with [part 71 of this chapter](/current/title-27/part-71), which part is applicable to such proceedings. If, after hearing, the hearing examiner, or on appeal, the Administrator, finds that such person has not shown cause why his permit should not be suspended or revoked, such permit shall be suspended for such period as the appropriate TTB officer deems proper or shall be revoked.
(72 Stat 1421, as amended; [26 U.S.C. 5713](https://www.govinfo.gov/link/uscode/26/5713))
\[T.D. TTB-75, [74 FR 14483](https://www.federalregister.gov/citation/74-FR-14483), Mar. 31, 2009]
## Subpart K—Manufacture of Cigarette Papers and Tubes
#### Source:
T.D. ATF-384, [61 FR 54085](https://www.federalregister.gov/citation/61-FR-54085), Oct. 17, 1996, unless otherwise noted.
### Taxes
#### § 40.351 Cigarette papers.
Cigarette papers are taxed at the following rates under [26 U.S.C. 5701(c)](https://www.govinfo.gov/link/uscode/26/5701):
| Product | Tax rate for each 50 papers\* for removals during the following periods: | |
| ------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------------------------- | --------- |
| 2002 to March 31, 2009 | April 1, 2009 and after | |
| Cigarette papers up to 61⁄2″ long | \$ 0.0122 | \$ 0.0315 |
| Cigarette papers over 61⁄2″ long | Use rates above, but count each 23⁄4 inches, or fraction thereof, of the length of each as one cigarette paper. | |
| | | |
| --- | --- | --- |
| \* Tax rate for less than 50 papers is the same. The tax is not prorated. | | |
(72 Stat. 1414; [26 U.S.C. 5701](https://www.govinfo.gov/link/uscode/26/5701))
\[T.D. TTB-75, [74 FR 14483](https://www.federalregister.gov/citation/74-FR-14483), Mar. 31, 2009]
#### § 40.352 Cigarette tubes.
Cigarette tubes are taxed at the following rates under [26 U.S.C. 5701(d)](https://www.govinfo.gov/link/uscode/26/5701):
| Product | Tax rate for each 50 tubes\* for removals during the years: | |
| ------------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------- | --------- |
| 2002 to March 31, 2009 | April 1, 2009 and after | |
| Cigarette tubes up to 61⁄2” long | \$ 0.0244 | \$ 0.0630 |
| Cigarette tubes over 61⁄2” long | Use rates above, but count each 23⁄4 inches, or fraction thereof, of the length of each as one cigarette tube. | |
| | | |
| --- | --- | --- |
| \* Tax rate for less than 50 tubes is the same. The tax is not prorated. | | |
(72 Stat. 1414; [26 U.S.C. 5701](https://www.govinfo.gov/link/uscode/26/5701))
\[T.D. TTB-75, [74 FR 14483](https://www.federalregister.gov/citation/74-FR-14483), Mar. 31, 2009]
#### § 40.353 Persons liable for tax.
The manufacturer of cigarette papers and tubes shall be liable for the taxes imposed on such articles by [26 U.S.C. 5701](https://www.govinfo.gov/link/uscode/26/5701). When a manufacturer of cigarette papers and tubes transfers such papers and tubes without payment of tax, pursuant to [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704) to the bonded premises of another such manufacturer, a manufacturer of tobacco products, or an export warehouse proprietor, the transferee shall become liable for the tax upon receipt of such papers and tubes and the transferor shall thereupon be relieved of liability for the tax. When cigarette papers and tubes are released in bond from customs custody for transfer to the bonded premises of a manufacturer of such papers and tubes or a manufacturer of tobacco products, the transferee shall become liable for the tax on the papers and tubes upon release from customs custody. Any person who possesses cigarette papers and tubes in violation of [26 U.S.C. 5751(a)](https://www.govinfo.gov/link/uscode/26/5751) (1) or (2), shall be liable for a tax equal to the rate of tax applicable to such articles.
(72 Stat. 1417, 1424; [26 U.S.C. 5703](https://www.govinfo.gov/link/uscode/26/5703), [5751](https://www.govinfo.gov/link/uscode/26/5751))
#### § 40.354 Determination of tax and method of payment.
Except for removals without payment of tax and transfers in bond, as authorized by law, no cigarette papers and tubes shall be removed until the taxes imposed by section 5701, I.R.C., have been determined. The payment of taxes on cigarette papers and tubes which are removed on determination of tax shall be made by return in accordance with the provisions of this subpart.
(72 Stat. 1417; [26 U.S.C. 5703](https://www.govinfo.gov/link/uscode/26/5703))
#### § 40.355 Return of manufacturer.
(a) *Requirement for filing.* A manufacturer of cigarette papers and tubes shall file, for each factory, a semimonthly tax return on TTB Form 5000.24. A return shall be filed for each semimonthly return period regardless of whether cigarette papers and tubes were removed subject to tax or whether tax is due for that particular return period.
(b) *Waiver from filing.* The manufacturer need not file a return for each semimonthly return period if cigarette papers and tubes were not removed subject to tax during the period and the appropriate TTB officer has granted a waiver from filing in response to a written request from the manufacturer.
(c) *Semimonthly return periods.* Except as otherwise provided in [paragraph (g)](/current/title-27/section-40.355#p-40.355\(g\)) of this section, semimonthly return periods run from the 1st day of the month through the 15th day of that month, and from the 16th day of the month through the last day of that month.
(d) *Preparation and filing.* The return shall be executed and filed with TTB in accordance with the instructions on the form.
(e) *Remittance of tax.* Except as provided in [§ 40.357](/current/title-27/section-40.357), remittance of the tax, if any, shall accompany the return.
(f) *Time for filing.* Except as otherwise provided in [paragraph (g)](/current/title-27/section-40.355#p-40.355\(g\)) of this section, for each semimonthly return period, the return shall be filed not later than the 14th day after the last day of the return period. If the due date falls on a Saturday, Sunday, or legal holiday, the return and remittance are due on the immediately preceding day that is not a Saturday, Sunday or legal holiday.
(g) *Special rule for taxes due for the month of September.*
(1) *Division of second semimonthly period.*
(i) *General.* Except as otherwise provided in [paragraph (g)(1)(ii)](/current/title-27/section-40.355#p-40.355\(g\)\(1\)\(ii\)) of this section, the second semimonthly period for the month of September is divided into two payment periods, from the 16th day through the 26th day, and from the 27th day through the 30th day. The manufacturer shall file a return on TTB F 5000.24, and make remittance, for the period September 16-26, no later than September 29. The manufacturer shall file a return on TTB F 5000.24, and make remittance, for the period September 27-30, no later than October 14.
(ii) *Taxpayment not by electronic fund transfer.* In the case of taxes for which remittance by electronic fund transfer (EFT) is not required by [§ 40.357](/current/title-27/section-40.357), the second semimonthly period of September is divided into two payment periods, from the 16th day through the 25th day, and from the 26th day through the 30th day. The manufacturer shall file a return on TTB F 5000.24, and make remittance, for the period September 16-25, no later than September 28. The manufacturer shall file a return on TTB F 5000.24, and make remittance, for the period September 26-30, no later than October 14.
(2) *Amount of payment—Safe harbor rule.*
(i) *General.* Taxpayers are considered to have met the requirements of [paragraph (g)(1)(i)](/current/title-27/section-40.355#p-40.355\(g\)\(1\)\(i\)) of this section if the amount paid no later than September 29 is not less than 11/15ths (73.3 percent) of the tax liability incurred for the semimonthly period beginning on September 1 and ending on September 15th, and if any underpayment of tax is paid by October 14th.
(ii) *Taxpayment not by EFT.* Taxpayers are considered to have met the requirements of [paragraph (g)(1)(ii)](/current/title-27/section-40.355#p-40.355\(g\)\(1\)\(ii\)) of this section if the amount paid no later than September 28 is not less than 2/3rds (66.7 percent) of the tax liability incurred for the semimonthly period beginning on September 1 and ending on September 15, and if any underpayment of tax is paid by October 14.
(3) *Weekends and holidays.* If the required taxpayment due date for the period September 16-25 or September 16-26, as applicable, falls on a Saturday, or legal holiday, the return and remittance are due on the immediately preceding day. If the required due date falls on a Sunday, the return and remittance are due on the immediately following day.
(Approved by the Office of Management and Budget under Control Number 1512-0467)
\[T.D. ATF-384, [61 FR 54085](https://www.federalregister.gov/citation/61-FR-54085), Oct. 17, 1996, as amended by T.D. TTB-89, [76 FR 3514](https://www.federalregister.gov/citation/76-FR-3514), Jan. 20, 2011]
#### § 40.356 Adjustments in the return of manufacturer.
Adjustments may be made in Schedules A and B of the manufacturer's semimonthly tax return, TTB Form 5000.24, as provided in this section. Schedule A of the return will be used where an unintentional error in a previous return resulted in an underpayment of tax. Schedule B of the return will be used where an unintentional error in a previous return resulted in an overpayment of tax, or where notice has been received from the appropriate TTB officer that a claim for allowance of tax has been approved. In the case of an overpayment, the manufacturer shall have the option of filing a claim on TTB TTB F 5620.8 for refund or taking credit in Schedule B of the return, both subject to the period of limitations prescribed in [26 U.S.C. 6511](https://www.govinfo.gov/link/uscode/26/6511). Any adjustment made in a return must be fully explained in the appropriate schedule or in a statement attached to and made a part of the return in which such adjustment is made.
(72 Stat. 1417, 68A Stat. 791; [26 U.S.C. 5703](https://www.govinfo.gov/link/uscode/26/5703), [6402](https://www.govinfo.gov/link/uscode/26/6402))
#### § 40.357 Payment of tax by electronic fund transfer.
(a) *General.*
(1) Each taxpayer who was liable, during a calendar year, for a gross amount equal to or exceeding five million dollars in taxes on tobacco products, cigarette papers, and cigarette tubes combining tax liabilities incurred under this [part and part 41 of this chapter](/current/title-27/part-41), shall use a commercial bank in making payment by electronic fund transfer (EFT) of taxes on tobacco products, cigarette papers, and cigarette tubes during the succeeding calendar year. Payment of taxes on tobacco products, cigarette papers, and cigarette tubes in any other form of remittance, as authorized in [§ 40.355](/current/title-27/section-40.355), is not authorized for a taxpayer who is required, by this section, to make remittances by EFT. For purposes of this section, the dollar amount of tax liability is defined as the gross tax liability on all taxable withdrawals and importations (including tobacco products, cigarette papers, and cigarette tubes brought into the United States from Puerto Rico or the Virgin Islands) during the calendar year, without regard to any drawbacks, credits, or refunds, for all premises from which such activities are conducted by the taxpayer. Overpayments are not taken into account in summarizing the gross tax liability.
(2) For the purposes of this section, a taxpayer includes a controlled group of corporations, as defined in [26 U.S.C. 1563](https://www.govinfo.gov/link/uscode/26/1563), and implementing regulations in [26 CFR §§ 1.563-1](/current/title-26/section-1.563-1) through [1.1563-4](/current/title-26/section-1.1563-4). Also, the rules for a “controlled group of corporations” apply in a similar fashion to groups which include partnerships and/or sole proprietorships. If one entity maintains more than 50% control over a group consisting of corporations and one, or more, partnerships and/or sole proprietorships, all of the members of the controlled group are one taxpayer for the purpose of determining who is required to make remittances by EFT.
(3) A taxpayer who is required by this section to make remittances by EFT shall make a separate EFT remittance and file a separate return, TTB Form 5000.24, for each factory from which cigarette papers or cigarette tubes are withdrawn upon determination of tax.
(b) *Requirements.*
(1) On or before January 10 of each calendar year, except for a taxpayer already remitting the tax by EFT, each taxpayer who was liable for a gross amount equal to or exceeding five million dollars in taxes on tobacco products, cigarette papers, and cigarette tubes combining tax liabilities incurred under this [part and part 41 of this chapter](/current/title-27/part-41) during the previous calendar year, shall notify, in writing, the appropriate TTB officer. The notice shall be an agreement to make remittances by EFT.
(2) For each return filed in accordance with this part, the taxpayer shall direct the taxpayer's bank to make an electronic fund transfer in the amount of the taxpayment to the Department of the Treasury's General Account or the Federal Reserve Bank of New York as provided in [paragraph (e)](/current/title-27/section-40.357#p-40.357\(e\)) of this section. The request shall be made to the bank early enough for the transfer to be made to the Treasury Account by no later than the close of business on the last day for filing the return, prescribed in [§ 40.355](/current/title-27/section-40.355). The request shall take into account any time limit established by the bank.
(3) If a taxpayer was liable for less than five million dollars in taxes on tobacco products, cigarette papers, and cigarette tubes combining tax liabilities incurred under this [part and part 41 of this chapter](/current/title-27/part-41) during the preceding calendar year, the taxpayer may choose either to continue remitting the tax as provided in this section or to remit the tax with the return as prescribed by [§ 40.355](/current/title-27/section-40.355). Upon filing the first return on which the taxpayer chooses to discontinue remitting the tax by EFT and to begin remitting the tax with the tax return, the taxpayer shall notify the appropriate TTB officer by attaching a written notification to TTB Form 5000.24, stating that no taxes are due by EFT, because the tax liability during the preceding calendar year was less than five million dollars, and that the remittance shall be filed with the tax return.
(c) *Remittance.*
(1) Each taxpayer shall show on the return, TTB Form 5000.24, information about remitting the tax for that return period by EFT and shall file the return with TTB, in accordance with the instructions of TTB Form 5000.24.
(2) Remittances shall be considered as made when the taxpayment by EFT is received by the Treasury Account. For purposes of this section, a taxpayment by EFT shall be considered as received by the Treasury Account when it is paid to a Federal Reserve Bank.
(3) When the taxpayer directs the bank to effect an EFT message as required by [paragraph (b)(2)](/current/title-27/section-40.357#p-40.357\(b\)\(2\)) of this section, any transfer data record furnished to the taxpayer, through normal banking procedures, will serve as the record of payment, and shall be retained as part of required records.
(d) *Failure to make a taxpayment by EFT.* The taxpayer is subject to a penalty imposed by [26 U.S.C. 5761](https://www.govinfo.gov/link/uscode/26/5761), [6651](https://www.govinfo.gov/link/uscode/26/6651), or [6656](https://www.govinfo.gov/link/uscode/26/6656), as applicable, for failure to make a taxpayment by EFT on or before the close of business on the prescribed last day for filing.
(e) *Procedure.* Upon the notification required under [paragraph (b)(1)](/current/title-27/section-40.357#p-40.357\(b\)\(1\)) of this section, the appropriate TTB officer will issue to the taxpayer a TTB procedure entitled Payment of Tax by Electronic Fund Transfer. This publication outlines the procedure a taxpayer is to follow when preparing returns and EFT remittances in accordance with this part. The U.S. Customs and Border Protection (CBP) will provide the taxpayer with instructions for preparing EFT remittances for payments to be made to the CBP.
(Approved by the Office of Management and Budget under control number 1512-0457)
(Act of August 16, 1954, 68A Stat. 775, as amended ([26 U.S.C. 6302](https://www.govinfo.gov/link/uscode/26/6302)); sec. 202, Pub. L. 85-859, 72 Stat. 1417, as amended ([26 U.S.C. 5703](https://www.govinfo.gov/link/uscode/26/5703)))
\[T.D. ATF-384, [61 FR 54085](https://www.federalregister.gov/citation/61-FR-54085), Oct. 17, 1996, as amended by T.D. TTB-16, [69 FR 52423](https://www.federalregister.gov/citation/69-FR-52423), Aug. 26, 2004; T.D. TTB-91, [76 FR 5480](https://www.federalregister.gov/citation/76-FR-5480), Feb. 1, 2011; T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 40.358 Assessment.
Whenever any person required by law to pay tax on cigarette papers and tubes fails to pay such tax, the tax shall be ascertained and assessed against such person, subject to the limitations prescribed in [26 U.S.C. 6501](https://www.govinfo.gov/link/uscode/26/6501). The tax so assessed shall be in addition to the penalties imposed by law for failure to pay such tax when required. Except in cases where delay may jeopardize collection of the tax, or where the amount is nominal or the result of an evident mathematical error, no such assessment shall be made until and after notice has been afforded such person to show cause against assessment. The person will be allowed 45 days from the date of such notice to show cause, in writing, against such assessment.
(72 Stat. 1417; [26 U.S.C. 5703](https://www.govinfo.gov/link/uscode/26/5703))
#### § 40.359 Employer identification number.
The employer identification number (EIN) (defined at [26 CFR 301.7701-12](/current/title-26/section-301.7701-12)) of a manufacturer of cigarette papers and/or tubes who has been assigned such a number shall be shown on each semimonthly tax return, TTB Form 5000.24, and special tax return (including amended returns), TTB Form 5630.5, filed under this subpart. Failure of the taxpayer to include the EIN on TTB Form 5000.24 may result in assertion and collection of the penalty specified in [§ 70.113 of this chapter](/current/title-27/section-70.113). Failure of the taxpayer to include the EIN on TTB Form 5630.5 may result in the imposition of the penalty specified in [27 CFR 70.113](/current/title-27/section-70.113) of this chapter.
(75 Stat. 828; [26 U.S.C. 6109](https://www.govinfo.gov/link/uscode/26/6109), [6676](https://www.govinfo.gov/link/uscode/26/6676))
#### § 40.360 Application for employer identification number.
Each manufacturer of cigarette papers and tubes who has neither secured an EIN nor made application therefor shall file an application on IRS Form SS-4. IRS Form SS-4 may be obtained from any service center director or from any district director. Such application shall be filed on or before the seventh day after the date on which any tax return under this subpart is filed. Each manufacturer shall make application for and shall be assigned only one EIN for all internal revenue purposes.
(75 Stat. 828; [26 U.S.C. 6109](https://www.govinfo.gov/link/uscode/26/6109))
#### § 40.361 Execution and filing of Form SS-4.
The application on IRS form SS-4, together with any supplementary statement, shall be prepared in accordance with the applicable form, instructions, and regulations, and the data called for shall be set forth fully and clearly. The application shall be filed with the service center director serving the internal revenue district where the applicant is required to file returns under this subpart, except that hand-carried applications may be filed with the district director of any such district as provided for in [26 CFR § 301.6091-1](/current/title-26/section-301.6091-1). The application shall be signed by:
(a) The individual if the person is an individual;
(b) The president, vice president, or other principal officer if the person is a corporation;
(c) A responsible and duly authorized member or officer having knowledge of its affairs if the person is a partnership or other unincorporated organization; or
(d) The fiduciary if the person is a trust or estate.
(75 Stat. 828; [26 U.S.C. 6109](https://www.govinfo.gov/link/uscode/26/6109))
### Special (Occupational) Taxes
#### § 40.371 Liability for special tax.
(a) *Manufacturer of cigarette papers and tubes.* Every manufacturer of cigarette papers and tubes shall pay a special (occupational) tax at a rate specified by [§ 40.372 of this part](/current/title-27/part-40/section-40.372). The tax shall be paid on or before July 1. On commencing business, the tax shall be computed from the first day of the month in which liability is incurred, through the following June 30. Thereafter, the tax shall be computed for the entire year (July 1 through June 30).
(b) *Each place of business taxable.* A manufacturer of cigarette papers and tubes incurs special tax liability at each place of business in which an occupation subject to special tax is conducted. A place of business means the entire office, plant or area of the business in any one location under the same proprietorship. Passageways, streets, highways, rail crossings, waterways, or partitions dividing the premises are not sufficient separation to require additional special tax, if the divisions of the premises are otherwise contiguous.
(c) *Payment of tax.* Special tax must be paid by return. The prescribed return is TTB Form 5630.5t, Special Tax Registration and Return—Tobacco. Special tax returns, with payment of tax, must be filed with TTB in accordance with the instructions on the form and the requirements of [subpart D of part 46 of this chapter](/current/title-27/part-46/subpart-D).
([26 U.S.C. 5731](https://www.govinfo.gov/link/uscode/26/5731), [5733](https://www.govinfo.gov/link/uscode/26/5733))
\[T.D. ATF-384, [61 FR 54085](https://www.federalregister.gov/citation/61-FR-54085), Oct. 17, 1996, as amended by T.D. TTB-79, [74 FR 37419](https://www.federalregister.gov/citation/74-FR-37419), July 28, 2009]
#### § 40.372 Rate of special tax.
(a) *General.* Title 26 U.S.C. 5731(a)(2) imposes a special tax of \$1,000 per year on every manufacturer of cigarette papers and tubes.
(b) *Reduced rate for small proprietors.* Title 26 U.S.C. 5731(b) provides for a reduced rate of $500 per year with respect to any manufacturer of cigarette papers and tubes whose gross receipts (for the most recent taxable year ending before the first day of the taxable period to which the special tax imposed by [§ 40.371](/current/title-27/section-40.371) relates) are less than $500,000. The “taxable year” to be used for determining gross receipts is the taxpayer's income tax year. All gross receipts of the taxpayer shall be included, not just the gross receipts of the business subject to special tax. Proprietors of new businesses that have not yet begun a taxable year, as well as proprietors of existing businesses that have not yet ended a taxable year, who commence a new activity subject to special tax, qualify for the reduced special (occupational) tax rate, unless the business is a member of a “controlled group”; in that case the rules of [paragraph (c)](/current/title-27/section-40.372#p-40.372\(c\)) of this section shall apply.
(c) *Controlled group.* All persons treated as one taxpayer under [26 U.S.C. 5061(e)(3)](https://www.govinfo.gov/link/uscode/26/5061) shall be treated as one taxpayer for the purpose of determining gross receipts under [paragraph (b)](/current/title-27/section-40.372#p-40.372\(b\)) of this section. “Controlled group” means a controlled group of corporations, as defined in [26 U.S.C. 1563](https://www.govinfo.gov/link/uscode/26/1563) and implementing regulations in [26 CFR 1.1563-1](/current/title-26/section-1.1563-1) through [1.1563-4](/current/title-26/section-1.1563-4). Also, the rules for a “controlled group of corporations” apply in a similar fashion to groups which include partnerships and/or sole proprietorships. If one entity maintains more than 50% control over a group consisting of corporations and one, or more, partnerships and/or sole proprietorships, all of the members of the controlled group are one taxpayer for the purpose of this section.
(d) *Short taxable year.* Gross receipts for any taxable year of less than 12 months shall be annualized by multiplying the gross receipts for the short period by 12 and dividing the result by the number of months in the short period as required by [26 U.S.C. 448(c)(3)](https://www.govinfo.gov/link/uscode/26/448).
(e) *Returns and allowances.* Gross receipts for any taxable year shall be reduced by returns and allowances made during such year under [26 U.S.C. 448(c)(3)](https://www.govinfo.gov/link/uscode/26/448).
([26 U.S.C. 448](https://www.govinfo.gov/link/uscode/26/448), [5061](https://www.govinfo.gov/link/uscode/26/5061), [5731](https://www.govinfo.gov/link/uscode/26/5731))
#### § 40.373 Cross reference.
For additional rules pertaining to liability for special tax, filing special tax returns, issuance and examination of special tax stamps, and notification of changes to special tax stamps, see [subpart D of part 46 of this chapter](/current/title-27/part-46/subpart-D).
\[T.D. TTB-79, [74 FR 37419](https://www.federalregister.gov/citation/74-FR-37419), July 28, 2009]
#### §§ 40.374-40.375 \[Reserved]
### General
#### § 40.382 Authority of TTB officers to enter premises.
The appropriate TTB officer may enter in the daytime any premises where cigarette papers and tubes are produced or kept, so far as it may be necessary for the purpose of examining such articles. When such premises are open at night, the appropriate TTB officer may enter them, while so open, in the performance of his or her official duties. The owner of such premises, or person having the superintendence of the same, who refuses to admit the appropriate TTB officer or permit the appropriate TTB officer to examine such cigarette papers and tubes shall be liable to the penalties prescribed by law for the offense.
(68A Stat. 872; 903 [26 U.S.C. 7342](https://www.govinfo.gov/link/uscode/26/7342), [7606](https://www.govinfo.gov/link/uscode/26/7606))
#### § 40.383 Interference with administration.
Whoever, corruptly or by force or threats of force, endeavors to hinder or obstruct the administration of this subpart, or endeavors to intimidate or impede any TTB officer acting in an official capacity, or forcibly rescues or attempts to rescue or causes to be rescued any property, after it has been duly seized for forfeiture to the United States in connection with a violation or intended violation of this subpart, shall be liable to the penalties prescribed by law.
(68A Stat. 855; [26 U.S.C. 7212](https://www.govinfo.gov/link/uscode/26/7212))
#### § 40.384 Disposal of forfeited, condemned, and abandoned cigarette papers and tubes.
Forfeited, condemned, or abandoned cigarette papers or tubes in the custody of a Federal, State, or local officer upon which the Federal tax has not been paid shall not be sold or caused to be sold for consumption in the United States if, in the opinion of the officer, the sale of such papers and tubes will not bring a price equal to the tax due and payable, and the expenses incident to the sale. Where the cigarette papers or tubes are not sold the officer may deliver them to a Federal or State institution (if they are fit for consumption) or cause their destruction by burning completely or by rendering them unfit for consumption. Where such papers or tubes are sold, release by the officer having custody shall be made only after such papers and tubes are properly packaged and taxpaid. A receipt from the appropriate TTB officer evidencing payment of tax on such papers or tubes shall be presented to the officer having custody of the articles, which tax shall be considered part of the sales price. Where cigarette papers or tubes which have been packaged under the provisions of [part 45 of this chapter](/current/title-27/part-45) are to be released after payment of tax, the purchaser shall appropriately mark each package “Federal Tax Paid (date)” before the officer having custody of the papers or tubes releases them. However, the articles may be released without such marking of the packages if the purchaser is a qualified manufacturer of cigarette papers and tubes and does not intend to place such papers or tubes on the domestic market for taxable articles but will otherwise dispose of them. A written statement of notification of disposal by destruction or return to bond through claim for refund, shall be filed, in original only, with the officer having custody of the articles. In the case of cigarette papers and tubes forfeited under the internal revenue laws, the sale shall be subject to the provisions of [part 72 of this chapter](/current/title-27/part-72).
(68A Stat. 870, as amended, 72 Stat. 1425, as amended; [26 U.S.C. 7325](https://www.govinfo.gov/link/uscode/26/7325), [5753](https://www.govinfo.gov/link/uscode/26/5753))
\[[26 FR 8174](https://www.federalregister.gov/citation/26-FR-8174), Aug. 31, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and further redesignated at [54 FR 48839](https://www.federalregister.gov/citation/54-FR-48839), Nov. 27, 1989, and further redesignated by T.D. ATF-460, [66 FR 39093](https://www.federalregister.gov/citation/66-FR-39093), July 27, 2001, as amended by T.D. ATF-469, [66 FR 56758](https://www.federalregister.gov/citation/66-FR-56758), Nov. 13, 2001]
#### § 40.385 Alternate methods or procedures.
A manufacturer of cigarette papers and tubes, on specific approval by the appropriate TTB officer as provided in this section, may use an alternate method or procedure in lieu of a method or procedure specifically prescribed in this subpart. The appropriate TTB officer may approve an alternate method or procedure, subject to stated conditions, when the appropriate TTB officer finds that—
(a) Good cause has been shown for the use of the alternate method or procedure,
(b) The alternate method or procedure is within the purpose of, and consistent with the effect intended by, the specifically prescribed method or procedure, and affords equivalent security to the revenue, and
(c) The alternate method or procedure will not be contrary to any provision of law, and will not result in an increase in cost to the Government or hinder the effective administration of this subpart.
No alternate method or procedure relating to the giving of any bond or to the assessment, payment, or collection of tax, shall be authorized under this section. A manufacturer who desires to employ an alternate method or procedure shall submit a written application, in triplicate, to the appropriate TTB officer. The application shall specifically describe the proposed alternate method or procedure, and shall set forth the reasons therefor. Alternate methods or procedures shall not be employed until the application has been approved by the appropriate TTB officer. The manufacturer shall, during the period of authorization of an alternate method or procedure, comply with the terms of the approved application. Authorization for any alternate method or procedure may be withdrawn whenever, in the judgment of the appropriate TTB officer, the revenue is jeopardized or the effective administration of this part is hindered. Any authorization of the appropriate TTB officer under this section shall be retained as part of the manufacturer's record in accordance with this subpart.
#### § 40.386 Emergency variations from requirements.
The appropriate TTB officer may approve methods of operation other than as specified in this subpart, where it is determined that an emergency exists and the proposed variations from the specified requirements are necessary, and the proposed variations—
(a) Will afford the security and protection to the revenue intended by the prescribed specifications;
(b) Will not hinder the effective administration of this subpart; and
(c) Will not be contrary to any provision of law. Variations from requirements granted under this section are conditioned on compliance with the procedures, conditions, and limitations set forth in the approval of the application. Failure to comply in good faith with such procedures, conditions and limitations shall automatically terminate the authority for such variations and the manufacturer thereupon shall fully comply with the prescribed requirements of regulations from which the variations were authorized. Authority for any variation may be withdrawn whenever in the judgment of the appropriate TTB officer the revenue is jeopardized or the effective administration of this subpart is hindered by the continuation of such variation. Where a manufacturer desires to employ such variation, the manufacturer shall submit a written application to do so (in triplicate) to the appropriate TTB officer. The application shall describe the proposed variations and set forth the reasons therefor. Variations shall not be employed until the application has been approved. In accordance with this subpart, any authorization of the appropriate TTB officer under this section shall be retained as part of the manufacturer's records.
#### § 40.387 Penalties and forfeitures.
Anyone who fails to comply with the provisions of this subpart becomes liable to the civil and criminal penalties, and forfeitures, provided by law.
(72 Stat. 1425, 1426; [26 U.S.C. 5761](https://www.govinfo.gov/link/uscode/26/5761), [5762](https://www.govinfo.gov/link/uscode/26/5762), [5763](https://www.govinfo.gov/link/uscode/26/5763))
### Qualification Requirements for Manufacturers
Original Qualifications
#### § 40.391 Persons required to qualify.
Every person who manufactures cigarette paper, or makes up cigarette paper into tubes, except for his own personal use or consumption, must first qualify as a manufacturer of cigarette papers and tubes in accordance with the provisions of this subpart.
\[ATF-467, [66 FR 49532](https://www.federalregister.gov/citation/66-FR-49532), Sept. 28, 2001]
#### § 40.392 Bond.
Every person, before commencing business as a manufacturer of cigarette papers and tubes, shall file a bond on TTB F 5200.29 (or TTB F 5200.25 or 5200.26). Such bond shall be filed in accordance with the applicable provisions of [§§ 40.401](/current/title-27/section-40.401) through [40.410](/current/title-27/section-40.410) and conditioned upon compliance with the provisions of [26 U.S.C. Chapter 52](https://www.govinfo.gov/link/uscode/26/5201), and regulations thereunder, including, but not limited to, the timely payment of taxes imposed by such chapter and penalties and interest in connection therewith for which the manufacturer may become liable to the United States.
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
\[T.D. ATF-384, [61 FR 54085](https://www.federalregister.gov/citation/61-FR-54085), Oct. 17, 1996, as amended by T.D. TTB-91, [76 FR 5480](https://www.federalregister.gov/citation/76-FR-5480), Feb. 1, 2011; T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 40.393 Power of attorney.
If the bond or any other document required under this part is signed by an attorney in fact for an individual, partnership, association, company, or corporation, by one of the partners for a partnership, or by one of the members of an association, a power of attorney on TTB F 5000.8 shall be furnished to the appropriate TTB officer. If such bond or other document is signed on behalf of a corporation by an officer thereof, it must be supported by duly authenticated extracts of the stockholders' meeting, by-laws, or directors' meeting authorizing such officer to execute such document for the corporation. TTB F 5000.8 or support of authority does not have to be filed again with a appropriate TTB officer where such form or support has previously been submitted to that appropriate TTB officer and is still in effect.
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
#### § 40.394 Notice of approval of bond.
If the bond required under this subpart is approved by the appropriate TTB officer, a number will be assigned to the factory of the manufacturer of cigarette papers and tubes for internal revenue purposes. The appropriate TTB officer will immediately notify the manufacturer, in writing, of the bond approval, in order that the manufacturer may commence operations.
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
Changes after Original Qualifications
#### § 40.395 Change in name.
Where there is a change in the individual, trade, or corporate name of a manufacturer of cigarette papers and tubes, the manufacturer shall, within 30 days of the change, furnish the appropriate TTB officer a written notice of such change.
(72 Stat. 1422; [26 U.S.C. 5722](https://www.govinfo.gov/link/uscode/26/5722))
#### § 40.396 Change in proprietorship.
Where there is to be any change in proprietorship (including a change in the identity of the members of a partnership or association, but excluding any change in stock ownership in a corporation) of the business of a manufacturer of cigarette papers and tubes, the proposed successor shall, before commencing operations, qualify as a manufacturer of cigarette papers and tubes, in accordance with this part. If such manufacturer promptly files the required documentation with the appropriate TTB officer, an administrator, executor, receiver, trustee, assignee, or other fiduciary successor may liquidate the business without qualifying as a manufacturer. The manufacturer must promptly file with the appropriate TTB officer a statement of the intent to liquidate and furnish a certified copy of the order of the court, or other pertinent documents. These documents must show the appointment and qualification of any administrator, executor, receiver, trustee, assignee, or other fiduciary, together with an extension of coverage of the predecessor's bond executed by the administrator, executor, receiver, trustee, assignee, or other fiduciary and the surety, in accordance with the provisions of [§ 40.407](/current/title-27/section-40.407). The predecessor shall make a closing inventory and closing report in accordance with the provisions of [§§ 40.434](/current/title-27/section-40.434) and [40.426](/current/title-27/section-40.426), respectively, and the successor shall make an opening inventory and opening report, in accordance with the provision of [§§ 40.432](/current/title-27/section-40.432) and [40.423](/current/title-27/section-40.423), respectively.
(72 Stat. 1421, 1422; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711), [5721](https://www.govinfo.gov/link/uscode/26/5721), and [5722](https://www.govinfo.gov/link/uscode/26/5722))
#### § 40.397 Change in location.
Whenever a manufacturer of cigarette papers and tubes contemplates a change in location of a factory within the same region, the manufacturer shall, before commencing operations at the new location, file an extension of coverage of bond in accordance with the provisions of [§ 40.407](/current/title-27/section-40.407). Whenever a manufacturer of cigarette papers and tubes contemplates changing the location of a factory to another region, the manufacturer shall, before commencing operations at the new location, qualify as a manufacturer in the new region, in accordance with the applicable provisions of this subpart, and make a closing inventory and closing report, in accordance with the provisions of [§§ 40.434](/current/title-27/section-40.434) and [40.426](/current/title-27/section-40.426), respectively.
(72 Stat. 1421, 1422; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711), [5721](https://www.govinfo.gov/link/uscode/26/5721), and [5722](https://www.govinfo.gov/link/uscode/26/5722))
Bonds and Extensions of Coverage of Bonds
#### § 40.401 Corporate surety.
(a) Surety bonds required by this subpart may be given only with corporate sureties holding certificates of authority from, and subject to any limitations prescribed by the Secretary of the Treasury as set forth in the current revision of Treasury Department Circular 570 (Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies). The surety shall have no interest whatever in the business covered by the bond.
(b) Each bond and each extension of coverage of bond shall at the time of filing be accompanied by a power of attorney authorizing the agent or officer who executed the bond to so act on behalf of the surety. The appropriate TTB officer who is authorized to approve the bond may, whenever deemed necessary, require additional evidence of the authority of the agent or officer to execute the bond or extension of coverage of bond. The power of attorney shall be prepared on a form provided by the surety company and executed under the corporate seal of the company. If the power of attorney submitted is other than a manually signed document, it shall be accompanied by a certificate of its validity.
(c) Treasury Department Circular 570 is published in the Federal Register annually on the first business day in July, and supplemental changes are published periodically thereafter (see *[https://www.federalregister.gov](https://www.federalregister.gov)*). The most recent circular and any supplemental changes to it may be viewed on the Bureau of the Fiscal Service website (see *[https://fiscal.treasury.gov](https://fiscal.treasury.gov)*).
\[T.D. ATF-384, [61 FR 54085](https://www.federalregister.gov/citation/61-FR-54085), Oct. 17, 1996, as amended by T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 40.402 Two or more corporate sureties.
A bond executed by two or more corporate sureties shall be the joint and several liability of the principal and the sureties. However, each corporate surety may limit its liability in terms upon the face of the bond in a definite, specific amount, which amount shall not exceed the limitations prescribed for such corporate surety by the Secretary, as set forth in the current revision of Treasury Department Circular 570 (Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies); see [§ 40.401(c)](/current/title-27/section-40.401#p-40.401\(c\)). When the sureties so limit their liability, the aggregate of such limited liabilities must equal the required amount of the bond.
(July 30, 1947, ch. 390, 61 Stat. 648, as amended ([31 U.S.C. 9304](https://www.govinfo.gov/link/uscode/31/9304), [9306](https://www.govinfo.gov/link/uscode/31/9306)); sec. 202. Pub. L. 85-859, 72 Stat. 1421, as amended ([26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711)))
\[T.D. ATF-384, [61 FR 54085](https://www.federalregister.gov/citation/61-FR-54085), Oct. 17, 1996, as amended by T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 40.403 Deposit of securities in lieu of corporate surety.
In lieu of corporate surety, the manufacturer of cigarette papers and tubes may pledge and deposit, as security for the bond, securities which are transferable and are guaranteed as to both interest and principal by the United States, in accordance with the provisions of [31 CFR Part 225](/current/title-31/part-225)—Acceptance of Bonds Secured by Government Obligations in Lieu of Bonds with Sureties.
(61 Stat. 650, 72 Stat. 1421, [31 U.S.C. 9301](https://www.govinfo.gov/link/uscode/31/9301), [9303](https://www.govinfo.gov/link/uscode/31/9303), [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711), [5 U.S.C. 552(a)](https://www.govinfo.gov/link/uscode/5/552) (80 Stat. 383, as amended))
\[T.D. ATF-384, [61 FR 54085](https://www.federalregister.gov/citation/61-FR-54085), Oct. 17, 1996, as amended by T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 40.404 Amount of bond.
The amount of the bond of a manufacturer of cigarette papers and tubes shall be not less than the maximum amount of the tax liability on the cigarette papers and tubes manufactured in the factory, received without payment of tax from other factories, and released without payment of tax from customs custody as provided in [§ 40.452](/current/title-27/section-40.452), during any month. In the case of a manufacturer commencing business, the production, receipts from other factories, and releases from customs custody, without payment of tax, shall be estimated for the purpose of this section. The amount of any such bond (or the total amount where strengthening bonds are filed) shall not exceed $20,000, nor be less than $1,000.
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
#### § 40.405 Strengthening bond.
Where the appropriate TTB officer determines that the amount of the bond, under which a manufacturer of cigarette papers and tubes is currently carrying on such business, no longer adequately protects the revenue, the appropriate TTB officer may require the manufacturer to file a strengthening bond in an appropriate amount with the same surety as that on the bond already in effect, in lieu of a superseding bond to cover the full liability on the basis of [§ 40.404](/current/title-27/section-40.404). The appropriate TTB officer shall refuse to approve any strengthening bond where any notation is made thereon which is intended or which may be construed as a release of any former bond, or as limiting the amount of either bond to less than its full amount.
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
#### § 40.406 Superseding bond.
A manufacturer of cigarette papers and tubes shall file a new bond to supersede the current bond immediately when:
(a) The corporate surety on the current bond becomes insolvent,
(b) The appropriate TTB officer approves a request from the surety of the current bond to terminate liability under the bond,
(c) Payment of any liability under a bond is made by the surety thereon, or
(d) The appropriate TTB officer considers such a superseding bond necessary for the protection of the revenue.
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
#### § 40.407 Extension of coverage of bond.
An extension of the coverage of bond filed under this subpart shall be manifested on TTB F 5000.18 by the manufacturer of cigarette papers and tubes and by the surety on the bond with the same formality and proof of authority as required for the execution of the bond.
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
\[T.D. ATF-384, [61 FR 54085](https://www.federalregister.gov/citation/61-FR-54085), Oct. 17, 1996, as amended by T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 40.408 Approval of bond and extension of coverage of bond.
No person shall commence operations under any bond, nor extend operations, until such person receives from the appropriate TTB officer notice of approval of the bond or an appropriate extension of coverage of the bond required under this subpart. Upon receipt of an approved bond or extension of coverage of bond from the appropriate TTB officer, such bond or extension of coverage of bond shall be retained by the manufacturer of cigarette papers and tubes in factory and shall be made available for inspection by any TTB officer upon request.
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
#### § 40.409 Termination of liability of surety under bond.
The liability of a surety on any bond required by this subpart shall be terminated only as to operations on and after the effective date of a superseding bond, or the date of approval of the discontinuance of operations by the manufacturer of cigarette papers and tubes, or otherwise in accordance with the termination provisions of the bond. The surety shall remain bound in respect of any liability for unpaid taxes, penalties and interest, not in excess of the amount of the bond, incurred by the manufacturer while the bond is in force.
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
#### § 40.410 Release of pledged securities.
Securities of the United States pledged and deposited as provided in [§ 40.403](/current/title-27/section-40.403) shall be released only in accordance with the provisions of [31 CFR part 225](/current/title-31/part-225). Such securities will not be released by the appropriate TTB officer until liability under the bond for which they were pledged has been terminated. When the appropriate TTB officer is satisfied that they may be released, the appropriate TTB officer shall fix the date or dates on which a part or all of such securities may be released. At any time prior to the release of such securities, the appropriate TTB officer may extend the date of release for such additional length of time as is deemed necessary.
(61 Stat. 650, 72 Stat. 1421; [31 U.S.C. 9301](https://www.govinfo.gov/link/uscode/31/9301), [9303](https://www.govinfo.gov/link/uscode/31/9303); [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
### Operations By Manufacturers
Records
#### § 40.421 General.
(a) Every manufacturer of cigarette papers and tubes must keep records of daily operations and transactions. Records maintained must reflect the date and number of cigarette papers and the date and number of cigarette tubes:
(1) Manufactured;
(2) Received, without payment of tax from another factory, an export warehouse, customs custody, or by withdrawal from the market;
(3) Removed, subject to tax;
(4) Removed, without payment of tax, for export purposes, use of the United States or transfer in bond pursuant to [§ 40.451](/current/title-27/section-40.451); or
(5) Lost or destroyed.
(b) The entries for each day in the records maintained or kept under this subpart must be made by the close of the business day following that on which the operations or transactions occur. No particular form of records is prescribed, but the information required must be readily ascertainable from the records kept.
(c) Records maintained under this section prior to January 1, 2000, must reflect the date and number of books or sets of cigarette papers of each different numerical content and the date and number of cigarette tubes.
([26 U.S.C. 5741](https://www.govinfo.gov/link/uscode/26/5741).)
\[T.D. ATF-240, [64 FR 71941](https://www.federalregister.gov/citation/64-FR-71941), Dec. 22, 1999]
Reports
#### § 40.422 General.
Every manufacturer of cigarette papers and tubes must prepare a report on TTB Form F 5210.5 in accordance with instructions for the form. The report must be prepared at the times specified in this subpart and must be prepared whether or not any operations or transactions occurred during the period covered by the report. The manufacturer must retain a copy of each report in accordance with the provisions of this subpart.
(a) *Reports for periods on or after January 1, 2000.* Reports submitted must reflect the total number of cigarette papers and cigarette tubes manufactured, received and lost or destroyed.
(b) *Reports for periods prior to January 1, 2000.* Reports submitted must reflect the number of books or sets of cigarette papers of each different numerical content and the number of cigarette tubes manufactured, received, removed and lost or destroyed.
([26 U.S.C. 5722](https://www.govinfo.gov/link/uscode/26/5722))
\[T.D. ATF-240, [64 FR 71942](https://www.federalregister.gov/citation/64-FR-71942), Dec. 22, 1999, as amended by T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 40.423 Opening.
An opening report, covering the period from the date of the opening inventory to the end of the month, shall be made on or before the 10th day following the end of the month in which the business was commenced.
(72 Stat. 1422; [26 U.S.C. 5722](https://www.govinfo.gov/link/uscode/26/5722))
#### § 40.424 Monthly.
A report for each calendar month shall be made on or before the 20th day of the next succeeding month.
(72 Stat. 1422; [26 U.S.C. 5722](https://www.govinfo.gov/link/uscode/26/5722))
#### § 40.425 Special.
A special report, covering the unreported period to the day preceding the date of any special inventory required by an appropriate TTB officer, shall be made with such inventory. Another report, covering the period from the date of the special inventory to the end of the month, shall be made on or before the 14th day following the end of the month in which the inventory was made.
(72 Stat. 1422; [26 U.S.C. 5722](https://www.govinfo.gov/link/uscode/26/5722))
#### § 40.426 Closing.
A closing report, covering the period from the first of the month to the date of the closing inventory, shall be made with such inventory.
(72 Stat. 1422; [26 U.S.C. 5722](https://www.govinfo.gov/link/uscode/26/5722))
Inventories
#### § 40.431 General.
Every manufacturer of cigarette papers and tubes must provide a true and accurate inventory on TTB Form 5230.2 in accordance with instructions for the form. Such inventory is subject to verification by the appropriate TTB officer. The manufacturer must retain a copy of each inventory completed on TTB Form 5230.2 in accordance with this subpart.
(a) *Reports of inventory for periods on or after January 1, 2000.* Reports of inventory submitted must reflect the total number of cigarette papers and cigarette tubes held at the times specified in the subpart.
(b) *Reports of inventory for periods prior to January 1, 2000.* Reports of inventory submitted must reflect the number of books or sets of cigarette papers of each different numerical content and the number of cigarette tubes held at the times specified in this subpart.
([26 U.S.C. 5721](https://www.govinfo.gov/link/uscode/26/5721))
\[T.D. ATF-240, [64 FR 71942](https://www.federalregister.gov/citation/64-FR-71942), Dec. 22, 1999]
#### § 40.432 Opening.
An opening inventory shall be made by the manufacturer of cigarette papers and tubes at the time of first commencing business.
(72 Stat. 1422; [26 U.S.C. 5721](https://www.govinfo.gov/link/uscode/26/5721))
#### § 40.433 Special.
A special inventory shall be made by the manufacturer of cigarette papers and tubes when required by the appropriate TTB officer.
(72 Stat. 1422; [26 U.S.C. 5721](https://www.govinfo.gov/link/uscode/26/5721))
#### § 40.434 Closing.
A closing inventory shall be made by the manufacturer of cigarette papers and tubes when a change in proprietorship occurs, or when the manufacturer changes location of the factory to another region, or concludes business. Where a change in proprietorship occurs, the closing inventory shall be made as of the day preceding the date of the opening inventory of the successor.
(72 Stat. 1422; [26 U.S.C. 5721](https://www.govinfo.gov/link/uscode/26/5721))
Document Retention
#### § 40.435 General.
All records and reports required to be kept or maintained under this subpart, including copies of authorizations, inventories, reports, returns, and claims filed with verified supporting schedules, shall be retained by the manufacturer for three years following the close of the calendar year in which filed or made, or in the case of an authorization, for three years following the close of the calendar year in which the operation under such authorization is concluded. Such records shall be made available for inspection by the appropriate TTB officer upon request.
(72 Stat. 1423; [26 U.S.C. 5741](https://www.govinfo.gov/link/uscode/26/5741))
Packages
#### § 40.441 General.
All cigarette papers and tubes shall, before removal subject to tax, be put up by the manufacturer in packages which shall be of such construction as will securely contain the papers or tubes therein. No package of cigarette papers or tubes shall have contained therein, attached thereto, or stamped, marked, written, or printed thereon:
(a) Any certificate, coupon, or other device purporting to be or to represent a ticket, chance, share, or an interest in, or dependent on, the event of a lottery,
(b) Any indecent or immoral picture, print, or representation, or
(c) Any statement or indication that United States tax has been paid.
(72 Stat. 1422; [26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723))
Miscellaneous Operations
#### § 40.451 Transfer in bond.
A manufacturer of cigarette papers and tubes may transfer such papers and tubes, under bond, without payment of tax, to the bonded premises of any manufacturer of cigarette papers and tubes, or to the bonded premises of a manufacturer of tobacco products solely for use in the manufacture of cigarettes. The transfer of cigarette papers and tubes, without payment of tax, to the bonded premises of an export warehouse proprietor shall be in accordance with the provisions of [part 44 of this chapter](/current/title-27/part-44).
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
#### § 40.452 Release from customs custody.
Cigarette papers and tubes which were made in the United States, exported, and subsequently returned to the United States, may be removed from customs custody for transfer to the premises of a manufacturer without payment of the internal revenue tax, upon compliance with [part 41 of this chapter](/current/title-27/part-41).
(72 Stat. 1418; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. ATF-384, [61 FR 54085](https://www.federalregister.gov/citation/61-FR-54085), Oct. 17, 1996, as amended by T.D. TTB-16, [69 FR 52423](https://www.federalregister.gov/citation/69-FR-52423), Aug. 26, 2004]
#### § 40.453 Use of the United States.
A manufacturer of cigarette papers and tubes may remove cigarette papers and tubes covered under bond, without payment of tax, for use of the United States. Such removal shall be in accordance with the provisions of [part 45 of this chapter](/current/title-27/part-45).
(72 Stat. 1418; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[[26 FR 8174](https://www.federalregister.gov/citation/26-FR-8174), Aug. 31, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and further redesignated at [54 FR 48839](https://www.federalregister.gov/citation/54-FR-48839), Nov. 27, 1989, and further redesignated by T.D. ATF-460, [66 FR 39093](https://www.federalregister.gov/citation/66-FR-39093), July 27, 2001, as amended by T.D. ATF-469, [66 FR 56758](https://www.federalregister.gov/citation/66-FR-56758), Nov. 13, 2001]
#### § 40.454 Removal for export purposes.
The removal of cigarette papers and tubes, without payment of tax, for shipment to a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States, or for consumption beyond the jurisdiction of the internal revenue laws of the United States, shall be in accordance with the provisions of [part 44 of this chapter](/current/title-27/part-44).
(72 Stat. 1418; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
Permanent Discontinuance of Business
#### § 40.461 Discontinuance of operations.
Every manufacturer of cigarette papers and tubes who desires to discontinue operations and close out a factory shall dispose of all cigarette papers and tubes on hand, in accordance with this subpart, and make a closing inventory and closing report, in accordance with the provisions of [§§ 40.434](/current/title-27/section-40.434) and [40.426](/current/title-27/section-40.426), respectively.
(72 Stat. 1422; [26 U.S.C. 5721](https://www.govinfo.gov/link/uscode/26/5721), [5722](https://www.govinfo.gov/link/uscode/26/5722))
### Claims By Manufacturers
General
#### § 40.471 Abatement.
A claim for abatement of the unpaid portion of the assessment of any tax on cigarette papers and tubes, or any liability in respect thereof, may be allowed to the extent that such assessment is excessive in amount, is assessed after the expiration of the applicable period of limitation, or is erroneously or illegally assessed. Any claim under this section shall be prepared on TTB F 5620.8, in duplicate, and shall set forth the particulars under which the claim is filed. The original of the claim, accompanied by such evidence as is necessary to establish to the satisfaction of the appropriate TTB officer that the claim is valid, shall be filed with the appropriate TTB officer.
(68A Stat. 792, 6404)
#### § 40.472 Allowance.
Relief from the payment of tax on cigarette papers and tubes may be extended to a manufacturer by allowance of the tax where the cigarette papers and tubes, after removal from the factory upon determination of tax and prior to the payment of such tax, are lost (otherwise than by theft) or destroyed by fire, casualty, or act of God, while in the possession or ownership of the manufacturer who removed such articles, or are withdrawn by the manufacturer from the market. Any claim for allowance under this section shall be filed on TTB F 5620.8 with the appropriate TTB officer, shall be executed under penalties and perjury and shall show the date the cigarette papers and tubes were removed from the factory. A claim relating to articles lost or destroyed shall be supported as prescribed in [§ 40.475](/current/title-27/section-40.475). In the case of a claim relating to cigarette papers or tubes withdrawn from the market the schedule prescribed in [§ 40.476](/current/title-27/section-40.476) shall be filed with the appropriate TTB officer. The manufacturer may not anticipate allowance of a claim by making the adjusting entry in a tax return pending consideration and action on the claim. Cigarette papers and tubes to which such a claim relates must be shown as removed on determination of tax in the return covering the period during which such articles were so removed. Upon action on the claim by the appropriate TTB officer a copy of TTB F 5620.8 will be returned to the manufacturer as notice of such action. This copy of TTB F 5620.8, with the copy of any verified supporting schedules, shall be retained by the manufacturer. When such notification of allowance of the claim or any part thereof is received prior to the time the return covering the tax on the cigarette papers or tubes to which the claim relates is to be filed, the manufacturer may make an adjusting entry and explanatory statement in that tax return. Where the notice of allowance is received after the filing of the return and taxpayment of the cigarette papers or tubes to which the claim relates, the manufacturer may make an adjusting entry and explanatory statement in the next tax return(s) to the extent necessary to take credit in the amount of the allowance.
(72 Stat. 1419, as amended, [26 U.S.C. 5705](https://www.govinfo.gov/link/uscode/26/5705))
#### § 40.473 Credit or refund.
The taxes paid on cigarette papers and tubes may be credited or refunded (without interest) to a manufacturer on proof satisfactory to the appropriate TTB officer that the claimant manufacturer paid the tax on cigarette papers and tubes lost (otherwise than by theft) or destroyed, by fire, casualty, or act of God, while in the possession or ownership of such manufacturer, or withdrawn by the manufacturer from the market. Any claim for credit or refund under this section shall be prepared on TTB F 5620.8, in duplicate. Claims shall include a statement that the tax imposed on cigarette papers and tubes by [26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652) or Chapter 52, was paid in respect to the cigarette papers or tubes covered by the claim, and that the articles were lost, destroyed, or withdrawn from the market within 6 months preceding the date the claim is filed. A claim for credit or refund relating to articles lost or destroyed shall be supported as prescribed in [§ 40.475](/current/title-27/section-40.475), and a claim relating to articles withdrawn from the market shall be accompanied by a schedule prepared and verified as prescribed in [§§ 40.476](/current/title-27/section-40.476), and [40.477](/current/title-27/section-40.477). The original and one copy of TTB F 5620.8, shall be filed with the appropriate TTB officer. Upon action by the appropriate TTB officer on a claim for credit, a copy of TTB F 5620.8 will be returned to the manufacturer as notification of allowance or disallowance of the claim or any part thereof. This copy, with the copy of any verified supporting schedules, shall be retained by the manufacturer. When the manufacturer is notified of allowance of the claim for credit or any part thereof, the manufacturer shall make an adjusting entry and explanatory statement in the next tax return(s) to the extent necessary to take credit in the amount of the allowance. The manufacturer may not anticipate allowance of a claim by taking credit on a tax return prior to consideration and action on such claim. The duplicate of a claim for refund or credit, with a copy of any verified supporting schedules, shall be retained by the manufacturer.
(72 Stat. 1419, as amended, [26 U.S.C. 5705](https://www.govinfo.gov/link/uscode/26/5705))
#### § 40.474 Remission.
Remission of the tax liability on cigarette papers and tubes may be extended to the manufacturer liable for the tax where cigarette papers and tubes in bond are lost (other than by theft) or destroyed, by fire, casualty, or act of God, while in the possession or ownership of such manufacturer. Where cigarette papers and tubes are so lost or destroyed the manufacturer shall report promptly such fact, and the circumstances, to the appropriate TTB officer. If the manufacturer wishes to be relieved of the tax liability, a claim on TTB F 5620.8, in duplicate, shall also be prepared, setting forth the nature, date, place, and extent of the loss or destruction. The original and one copy of the claim, accompanied by such evidence as is necessary to establish to the satisfaction of the appropriate TTB officer that the claim is valid, shall be filed with the appropriate TTB officer. Upon action on the claim by the appropriate TTB officer, the copy of TTB F 5620.8 will be returned to the manufacturer as notice of such action, which copy shall be retained by the manufacturer.
(72 Stat. 1419, as amended, [26 U.S.C. 5707](https://www.govinfo.gov/link/uscode/26/5707))
Lost or Destroyed
#### § 40.475 Action by claimant.
Where cigarette papers and tubes are lost (other than by theft) or destroyed, by fire, casualty, or act of God, and the manufacturer desires to file claim under the provisions of [§ 40.472](/current/title-27/section-40.472) or [§ 40.473](/current/title-27/section-40.473), the manufacturer shall indicate on the claim the nature, date, and extent of such loss or destruction. The claim shall be accompanied by such evidence as necessary to establish to the satisfaction of the appropriate TTB officer that the claim is valid.
(72 Stat. 1419; [26 U.S.C. 5705](https://www.govinfo.gov/link/uscode/26/5705))
Withdrawn From the Market.
#### § 40.476 Action by claimant.
Where cigarette papers and tubes are withdrawn from the market and the manufacturer desires to file claim under the provisions of [§ 40.472](/current/title-27/section-40.472) or [§ 40.473](/current/title-27/section-40.473), the manufacturer shall assemble the articles in or adjacent to a factory if they are to be retained in or received into such factory, or at any suitable place if they are to be destroyed. The manufacturer shall group the articles according to the rate of tax applicable thereto, and shall prepare and submit a schedule of the articles, on TTB Form 5200.7 in accordance with the instructions, on the form. All copies of the schedule shall be forwarded to the appropriate TTB officer.
(72 Stat. 1419; [26 U.S.C. 5705](https://www.govinfo.gov/link/uscode/26/5705))
\[T.D. ATF-384, [61 FR 54085](https://www.federalregister.gov/citation/61-FR-54085), Oct. 17, 1996, as amended by T.D. ATF-424, [64 FR 71932](https://www.federalregister.gov/citation/64-FR-71932), Dec. 22, 1999]
#### § 40.477 Action by the appropriate TTB officer.
Upon receipt of a schedule of cigarette papers and tubes withdrawn from the market, the appropriate TTB officer may assign a TTB officer to verify the schedule and supervise disposition of the cigarette papers and tubes, or may authorize the manufacturer to dispose of the articles without supervision by so stating on the original and one copy of the schedule returned to the manufacturer.
(72 Stat. 1419; [26 U.S.C. 5705](https://www.govinfo.gov/link/uscode/26/5705))
#### § 40.478 Disposition of cigarette papers and tubes and schedule.
When so authorized, as evidenced by the appropriate TTB officer's statement on the schedule, the manufacturer shall dispose of the cigarette papers and tubes as specified in the schedule. After the articles are disposed of, the manufacturer shall execute a certificate on both copies of the schedule received from the appropriate TTB officer, to show the disposition and the date of disposition of the articles. In connection with a claim for credit or refund, the manufacturer shall attach the original of the schedule to the claim for credit or refund, TTB F 5620.8, filed under [§ 40.473](/current/title-27/section-40.473). When an appropriate TTB officer is assigned to verify the schedule and supervise disposition of the cigarette papers and tubes, such officer shall, upon completion of the assignment, execute a certificate on all copies of the schedule to show the disposition and the date of disposition of the articles. In connection with a claim for allowance, the officer shall return one copy of the schedule to the manufacturer for the record, and in connection with a claim for credit or refund, the officer shall return the original and one copy of the schedule to the manufacturer, the original of which the manufacturer shall attach to the claim filed under [§ 40.473](/current/title-27/section-40.473).
(72 Stat. 1419, as amended; 26 U.S.C. [26 U.S.C. 5705](https://www.govinfo.gov/link/uscode/26/5705))
## Subpart L—Manufacture of Processed Tobacco
#### Source:
T.D. TTB-78, [74 FR 29410](https://www.federalregister.gov/citation/74-FR-29410), June 22, 2009, unless otherwise noted.
### Qualification Requirements for Manufacturers of Processed Tobacco
#### § 40.491 Persons required to qualify.
(a) *General.* Except as otherwise provided in [paragraph (b)](/current/title-27/section-40.491#p-40.491\(b\)) of this section, every person who engages in the processing of tobacco must first qualify for and receive a permit as a manufacturer of processed tobacco in accordance with the provisions of this subpart.
(b) *Exceptions.*
(1) A person who engages in the processing of tobacco solely for his own personal use or consumption and not for sale or transfer to another person is not engaged in the manufacture of processed tobacco for purposes of this part and, accordingly, is not required to qualify as a manufacturer of processed tobacco.
(2) Any person who holds a TTB permit for the manufacture of tobacco products is thereby authorized to process tobacco solely for use in the manufacture of tobacco products under that permit, so long as the processed tobacco is not removed from the factory for any purpose other than a purpose authorized by [§ 40.72(b)](/current/title-27/section-40.72#p-40.72\(b\)). Such a manufacturer is not required to qualify under this subpart as a manufacturer of processed tobacco.
(3) Any person that holds a TTB permit for the manufacture of tobacco products and that removes processed tobacco from the factory must apply for authorization to engage in that activity, when required to do so under [§ 40.47](/current/title-27/section-40.47).
\[T.D. TTB-78, [74 FR 29410](https://www.federalregister.gov/citation/74-FR-29410), June 22, 2009, as amended by T.D. TTB-104, [77 FR 37304](https://www.federalregister.gov/citation/77-FR-37304), June 21, 2012; as amended by T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 40.492 Application for permit.
The application for a permit as a manufacturer of processed tobacco must be made on TTB F 5200.3, according to the instructions on the form. All documents required under this subpart to be furnished with the application must be included with the application.
#### § 40.493 Transitional rule.
(a) Any person who:
(1) On April 1, 2009, is engaged in business as a manufacturer of processed tobacco; and
(2) On or before June 30, 2009, submits an application for a permit or authorization as provided in this part to engage in such business, may continue to engage in that business pending final action on the application.
(b) Pending final action on an application or request for authorization submitted under [paragraph (a)](/current/title-27/section-40.493#p-40.493\(a\)) of this section, all provisions of chapter 52 of the Internal Revenue Code of 1986 shall apply to the applicant in the same manner and to the same extent as if the applicant were a holder of a permit to manufacture processed tobacco under chapter 52.
(c) Upon receipt of an application, the appropriate TTB officer will provide the applicant with a written acknowledgement that may be used for a limited period as confirmation of TTB authorization to engage in the business of a manufacturer of processed tobacco.
\[T.D. TTB-78, [74 FR 29410](https://www.federalregister.gov/citation/74-FR-29410), June 22, 2009, as amended by T.D. TTB-80, [74 FR 37552](https://www.federalregister.gov/citation/74-FR-37552), July 29, 2009]
#### § 40.494 Corporate documents.
Every corporation that files an application for a permit as a manufacturer of processed tobacco must furnish with its application for the permit required by [§ 40.492](/current/title-27/section-40.492) a true copy of the corporate charter or a certificate of corporate existence or incorporation executed by the appropriate officer of the State in which incorporated. The corporation must likewise furnish duly authenticated extracts of the stockholders' meetings, bylaws, or directors' meetings, listing the offices the incumbents of which are authorized to sign documents or otherwise act in behalf of the corporation in matters relating to [26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201), and regulations issued thereunder. The corporation must also furnish evidence, in duplicate, of the identity of the officers and directors and each person who holds more than ten percent of the stock of such corporation. Where any of the information required by this section has previously been filed with the appropriate TTB officer and such information is currently complete and accurate, a written statement to that effect, in duplicate, will be sufficient for the purpose of this section.
#### § 40.495 Articles of partnership or association.
Every partnership or association that files an application for a permit as a manufacturer of processed tobacco must furnish with its application for the permit required by [§ 40.492](/current/title-27/section-40.492) a true copy of the articles of partnership or association, if any, or certificate of partnership or association where required to be filed by any State, county, or municipality. Where a partnership or association has previously filed such documents with the appropriate TTB officer and such documents are currently complete and accurate, a written statement, in duplicate, to that effect by the partnership or association will be sufficient for the purpose of this section.
#### § 40.496 Trade name certificate.
Every person that files an application for a permit as a manufacturer of processed tobacco operating under a trade name must furnish with the application for the permit required by [§ 40.492](/current/title-27/section-40.492) a true copy of the certificate or other document, if any, issued by a State, county, or municipal authority in connection with the transaction of business under such trade name. If no such certificate or other document is so required, a written statement, in duplicate, to that effect by such person will be sufficient for the purpose of this section.
\[T.D. TTB-78, [74 FR 29410](https://www.federalregister.gov/citation/74-FR-29410), June 22, 2009, as amended by T.D. TTB-80, [74 FR 37552](https://www.federalregister.gov/citation/74-FR-37552), July 29, 2009]
#### § 40.497 Additional information.
The appropriate TTB officer may require such additional information as deemed necessary to determine whether the applicant is entitled to a permit under this subpart. The applicant shall, when required by the appropriate TTB officer, furnish as a part of the application for the permit such additional information as may be necessary for the appropriate TTB officer to determine whether the applicant is entitled to a permit.
#### § 40.498 Investigation of applicant.
Appropriate TTB officers may inquire or investigate to verify the information in connection with an application for a permit. The investigation will ascertain whether the applicant is eligible for a permit. A permit may be denied if the applicant (including, in the case of a corporation, any officer, director, or principal stockholder and, in the case of a partnership, a partner)—
(a) Is, by reason of his business experience, financial standing, or trade connections or by reason of previous or current legal proceedings involving a felony violation of any other provision of Federal criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes, not likely to maintain operations in compliance with this chapter;
(b) Has been convicted of a felony violation of any provision of Federal or State criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes; or
(c) Has failed to disclose any material information required or made any material false statement in the application therefor.
#### § 40.499 Notice of contemplated disapproval.
If the appropriate TTB officer has reason to believe that the applicant is not entitled to a permit, the appropriate TTB officer will promptly give to the applicant notice of the contemplated disapproval of the application and opportunity for hearing thereon in accordance with [part 71 of this chapter](/current/title-27/part-71). If, after such notice and opportunity for hearing, the appropriate TTB officer finds that the applicant is not entitled to a permit, an order will be prepared stating the findings on which the permit request is denied.
#### § 40.500 Issuance of permit.
If the application for permit, together with the supporting documents, required under this part is approved, the appropriate TTB officer will issue a permit on TTB F 5200.28 to the applicant as a manufacturer of processed tobacco.
#### § 40.501 Retention of permit and supporting documents.
The manufacturer must retain the permit, together with the copy of the application and supporting documents returned with the permit, at the same place where the records required by this subpart are kept. The permit and supporting documents must be made available for inspection by any appropriate TTB officer upon request.
### Qualification Requirements for Manufacturers of Processed Tobacco
#### § 40.502 Factory premises.
(a) *General.* The premises used by a manufacturer of processed tobacco to conduct such business must be described on its permit and such premises must include any physical location or building used for: Manufacturing and storing processed tobacco; storing materials, equipment, and supplies related to or used in the manufacturing and storage of processed tobacco; and carrying on activities in connection with the manufacturing and storage of processed tobacco. The premises may consist of more than one building, or portions of buildings, which need not be contiguous or located in the same city, town, village, or State. The manufacturer must designate a central location as a repository for the records required under this subpart. The application for the permit filed under [§ 40.492](/current/title-27/section-40.492) must describe the buildings or portions of buildings by street address (number, street, city or equivalent, and State). The permit application must include a diagram, in duplicate, showing the following information, if applicable:
(1) The identification of each building by a letter, number, or similar designation if the factory is in more than one building and each building is not identifiable by a separate street address; and
(2) The particular floor or floors, or room or rooms, comprising the factory if the factory consists of, or includes, a portion of a building or portions of buildings.
(b) *Permits issued prior to June 21, 2012.* A manufacturer of processed tobacco operating under a permit issued prior to June 21, 2012, must submit the information required under [paragraph (a)](/current/title-27/section-40.502#p-40.502\(a\)) of this section within 180 days after June 21, 2012.
(c) *Extension or curtailment of factory.* If a manufacturer of processed tobacco wishes to change the premises delineated by its permit to an extent that would be inconsistent with the description or diagram of the premises that was submitted with the manufacturer's last permit application, the manufacturer must submit an application on TTB Form 5200.16 for, and obtain, an amended permit before the change in the premises occurs. The application must describe the proposed change in the premises and must be accompanied by a new diagram if required under [paragraph (a)](/current/title-27/section-40.502#p-40.502\(a\)) of this section.
\[T.D. TTB-104, [77 FR 37303](https://www.federalregister.gov/citation/77-FR-37303), June 21, 2012]
### Changes After Qualification
#### § 40.511 Change in name.
(a) *Change in individual name.* When there is a change in the name of an individual operating under a permit as a manufacturer of processed tobacco, the manufacturer must, within 30 days of such change, make application on TTB F 5200.16 for an amended permit.
(b) *Change in trade name.* When there is a change in a trade name used by a manufacturer of processed tobacco in connection with operations authorized by the permit, the manufacturer must, within 30 days of such change, make application on TTB F 5200.16 for an amended permit to reflect such change. This requirement also applies to the addition or discontinuance of a trade name. The manufacturer must also furnish a true copy of any new trade name certificate or document issued to the manufacturer, or statement in lieu thereof, required by [§ 40.496](/current/title-27/section-40.496).
(c) *Change in corporate name.* When there is a change in the corporate name of a manufacturer of processed tobacco, the manufacturer must, within 30 days of such change, make application on TTB F 5200.16 for an amended permit. The manufacturer must also furnish such documents as may be necessary to establish that the corporate name has been changed.
#### § 40.512 Change in ownership or control.
(a) *Fiduciary successor.* If an administrator, executor, receiver, trustee, assignee, or other fiduciary is to take over the business of a manufacturer of processed tobacco as a continuing operation, such fiduciary shall, before commencing operations, make application for a permit in accordance with this subpart, furnish certified copies, in duplicate, of the order of the court, or other pertinent documents, showing his appointment and qualification as such fiduciary, and make a commencing inventory in accordance with [§ 40.523](/current/title-27/section-40.523). However, where a fiduciary intends only to liquidate the business, qualification as a manufacturer of processed tobacco will not be required if such fiduciary promptly files with the appropriate TTB officer a written statement to that effect, in duplicate.
(b) *Transfer of ownership.* If a transfer in ownership of the business of a manufacturer of processed tobacco (including a change of any member of a partnership or association) is to be made, such manufacturer shall give notice, in writing, to the appropriate TTB officer, naming the proposed successor and the desired effective date of the transfer. The proposed successor shall, before commencing operations, qualify as a manufacturer of processed tobacco in accordance with this subpart. The manufacturer shall give notice of the transfer, and the proposed successor shall make application for permit, in ample time for examination and approval thereof before the desired date of such change. The predecessor shall make a concluding inventory and concluding report, in accordance with [§§ 40.523](/current/title-27/section-40.523) and [40.522](/current/title-27/section-40.522), respectively, and surrender the permit with such inventory and report. The successor shall make a commencing inventory and first report, in accordance with [§§ 40.523](/current/title-27/section-40.523) and [40.522](/current/title-27/section-40.522), respectively.
(c) *Change in officers, directors, or stockholders of a corporation.* Upon election or appointment (excluding successive reelection or reappointment) of any officer or director of a corporation operating the business of a manufacturer of processed tobacco, or upon any occurrence that results in a person acquiring ownership or control of more than ten percent in aggregate of the outstanding stock of such corporation, the manufacturer shall, within 30 days of such action, so notify the appropriate TTB officer in writing, giving the identity of such person. When there is any change in the authority furnished under [§ 40.494](/current/title-27/section-40.494) for officers to act in behalf of the corporation, the manufacturer shall immediately so notify the appropriate TTB officer in writing.
(d) *Change in control of corporation.* When the issuance, sale, or transfer of the stock of a corporation operating as a manufacturer of processed tobacco results in a change in the identity of the principal stockholders exercising actual or legal control of the operations of the corporation, the corporate manufacturer shall, within 30 days after the change occurs, make application on TTB F 5200.3 for a new permit. Otherwise, the present permit shall be automatically terminated at the expiration of such 30-day period, and the manufacturer shall dispose of all processed tobacco on hand, make a concluding inventory and concluding report, in accordance with the provisions of [§§ 40.523](/current/title-27/section-40.523) and [40.522](/current/title-27/section-40.522), respectively, and surrender the permit with such inventory and report. If the application for a new permit is timely made, the present permit shall continue in effect pending final action with respect to such application.
#### § 40.513 Change in location or address of factory.
Whenever a manufacturer of processed tobacco intends to relocate its factory, the manufacturer shall, before commencing operations at the new location, make application on TTB F 5200.16 for, and obtain, an amended permit. Whenever any change occurs in the address, but not the location, of the factory of a manufacturer of processed tobacco as a result of action of local authorities, the manufacturer shall, within 30 days of such change, make application on TTB F 5200.16 for an amended permit.
\[T.D. TTB-78, [74 FR 29410](https://www.federalregister.gov/citation/74-FR-29410), June 22, 2009, as amended by T.D. TTB-80, [74 FR 37552](https://www.federalregister.gov/citation/74-FR-37552), July 29, 2009]
### Operations by Manufacturers of Processed Tobacco
#### § 40.521 Record of tobacco and processed tobacco.
(a) Every manufacturer of processed tobacco and every manufacturer of tobacco products required to obtain authorization to engage in another business within the factory under [§§ 40.47(b)](/current/title-27/part-40/section-40.47#p-40.47\(b\)) and [40.72(b) of this part](/current/title-27/part-40/section-40.72#p-40.72\(b\)) must keep records of operations and transactions that show the total quantity of all:
(1) Processed tobacco on hand at the beginning of each month;
(2) In the case of a manufacturer of tobacco products, processed tobacco used in the manufacture of tobacco products during each month;
(3) Processed tobacco received, together with the date of receipt and the name and address of the person from whom it was received;
(4) Processed tobacco removed from the factory for shipment to a person holding a TTB permit as a manufacturer of processed tobacco, as a manufacturer of tobacco products, as an importer of processed tobacco, or as an export warehouse proprietor, together with the date of removal and the name and address of the person to whom shipped or delivered;
(5) Processed tobacco removed from the factory for shipment, other than for export, to a person not holding a TTB permit as a manufacturer of processed tobacco, as a manufacturer of tobacco products, as an importer of processed tobacco, or as an export warehouse proprietor, together with the date of removal;
(6) Processed tobacco removed from the factory for export, together with the date of removal;
(7) Processed tobacco removed for any purpose not referred to in [paragraphs (a)(4)](/current/title-27/section-40.521#p-40.521\(a\)\(4\)), [(5)](/current/title-27/section-40.521#p-40.521\(a\)\(5\)), [(6)](/current/title-27/section-40.521#p-40.521\(a\)\(6\)), and [(7)](/current/title-27/section-40.521#p-40.521\(a\)\(7\)) of this section, together with the date of removal;
(8) Processed tobacco lost, together with the date and other circumstances of the loss;
(9) Processed tobacco destroyed (either on factory premise or removed from factory premises for destruction), together with the date and other circumstances of the destruction;
(10) Processed tobacco transferred between buildings that are covered under the same permit but that are not located in the same city, town, village, or State; and
(11) Tobacco (unprocessed) on hand at the beginning of each month and used in the manufacture of tobacco products, lost, destroyed, or removed during each month.
(b) Any manufacturer of processed tobacco and any manufacturer of tobacco products that are required to obtain authorization to engage in another business within the factory under [§§ 40.47(b)](/current/title-27/section-40.47#p-40.47\(b\)) and [40.72(b)](/current/title-27/section-40.72#p-40.72\(b\)) and that engage in removals of processed tobacco described in [paragraph (a)(5)](/current/title-27/section-40.521#p-40.521\(a\)\(5\)) or [(a)(6)](/current/title-27/section-40.521#p-40.521\(a\)\(6\)) of this section must also keep records that show the following information about each such removal:
(1) The full name and business address (including city and State) of the purchaser (if there is a purchaser) and the full name and business address of the recipient, or personal address if the purchaser or recipient is not a business;
(2) The full name, business address (including city and State), and driver's license number of the person picking up the processed tobacco for delivery;
(3) The license number of the vehicle in which the processed tobacco is removed from the manufacturer's premises;
(4) The street address of the destination (not including any in-transit stops) of the processed tobacco; and
(5) The quantity of processed tobacco in the shipment.
(c) The entries in the records of removals required under this section must be made for each day by the close of the business day following the day on which the removal occurs. There is no particular format prescribed for the records required under this section (and commercial records may be used) although the required information must be readily ascertainable from the records kept. In the case of a removal under [paragraph (a)(5)](/current/title-27/section-40.521#p-40.521\(a\)\(5\)) or [(a)(6)](/current/title-27/section-40.521#p-40.521\(a\)\(6\)) of this section that involves shipment by a common carrier, the appropriate TTB officer may approve an alternate method or procedure pursuant to [§§ 40.45](/current/title-27/section-40.45) or [40.531](/current/title-27/section-40.531) through which the manufacturer may keep records regarding the common carrier and its means of tracking (including pick up and delivery) of the shipment in lieu of the information required by [paragraphs (b)(2)](/current/title-27/section-40.521#p-40.521\(b\)\(2\)) and [(b)(3)](/current/title-27/section-40.521#p-40.521\(b\)\(3\)) of this section.
\[T.D. TTB-104, [77 FR 37303](https://www.federalregister.gov/citation/77-FR-37303), June 21, 2012]
#### § 40.522 Reports.
(a) *General.* Every manufacturer of processed tobacco must prepare a monthly report on TTB F 5250.1 in accordance with the instructions for the form. The report must be prepared at the times specified in this section and must be prepared whether or not any operations or transactions occurred during the period covered by the report. The manufacturer must retain a copy of each report in accordance with the provisions of this subpart.
(b) *First report(s).* The first monthly report must be submitted by the 20th day of the month following the month in which the permit or authorization is issued. If the manufacturer is operating as a manufacturer of processed tobacco under the transitional rule set forth in [§ 40.493](/current/title-27/section-40.493), the manufacturer must submit the first report by the 20th day of the month following the month in which TTB provides written acknowledgement of the receipt of the application filed under [§ 40.492](/current/title-27/section-40.492). In the transitional case, the manufacturer must also submit reports for all previous months back to April 2009. For example, a manufacturer who receives an acknowledgement, dated July 17, 2009, must submit by August 20, 2009, a total of four reports, one each for April, May, June, and July 2009.
(c) *Reports of no activity.* Reports with the notation “No Activity” must be made for those months in which no activity occurs.
(d) *Reports of removals.*
(1) Except as otherwise provided in [paragraphs (d)(2)](/current/title-27/section-40.522#p-40.522\(d\)\(2\)) or [(d)(3)](/current/title-27/section-40.522#p-40.522\(d\)\(3\)) of this section, a manufacturer who removes processed tobacco for export or for shipment to someone other than a person holding a TTB permit as a manufacturer of processed tobacco, as a manufacturer of tobacco products, as an importer of processed tobacco, or as an export warehouse proprietor must report each such removal on TTB F 5250.2 by the close of the next business day following the day of removal, in accordance with the instructions on the form.
(2) In the case of removals for export, as an alternative to the procedure prescribed in [paragraph (d)(1)](/current/title-27/section-40.522#p-40.522\(d\)\(1\)) of this section, the manufacturer may submit to TTB a monthly summary report of such removals in a format approved by the appropriate TTB officer. Prior to the use of such an alternate procedure, the manufacturer must obtain written approval from the appropriate TTB officer.
(3) A manufacturer of tobacco products who removes processed tobacco for any of the purposes related to the manufacture of tobacco products set forth under [§ 40.72(b)(2)](/current/title-27/section-40.72#p-40.72\(b\)\(2\)) is not required to report such removals on TTB F 5250.2. Records of such removals must still be kept pursuant to [§ 40.521](/current/title-27/section-40.521).
(e) *Concluding report.* A concluding report, covering the period from the first of the month to the date of the concluding inventory, shall be made with such inventory.
([26 U.S.C. 5722](https://www.govinfo.gov/link/uscode/26/5722))
\[T.D. TTB-78, [74 FR 29410](https://www.federalregister.gov/citation/74-FR-29410), June 22, 2009, as amended by T.D. TTB-80, [74 FR 37552](https://www.federalregister.gov/citation/74-FR-37552), July 29, 2009; T.D. TTB-104, [77 FR 37304](https://www.federalregister.gov/citation/77-FR-37304), June 21, 2012]
#### § 40.523 Inventories.
Every manufacturer of processed tobacco must provide a true and accurate inventory on TTB F 5210.9 in accordance with instructions for the form. The manufacturer must make such an inventory at the time of commencing business, at the time of transferring ownership, at the time of changing location of the factory, at the time of concluding business, and at such other time as any appropriate TTB officer may require. In the case of a manufacturer operating under the transitional rule set forth in [§ 40.493](/current/title-27/section-40.493), that manufacturer must make an inventory within 10 days of the date of TTB's written acknowledgement of the receipt of the application filed under [§ 40.492](/current/title-27/section-40.492). Each such inventory is subject to verification by the appropriate TTB officer.
([26 U.S.C. 5721](https://www.govinfo.gov/link/uscode/26/5721))
#### § 40.524 Retention of documents.
Every manufacturer of processed tobacco must retain all records and reports required under this subpart, including copies of permits, authorizations, inventories, and reports, for three years following the close of the calendar year in which filed or made, or in the case of an authorization, for three years following the close of the calendar year in which the operation under such authorization is concluded. Such records shall be made available for inspection by the appropriate TTB officer upon request.
([26 U.S.C. 5741](https://www.govinfo.gov/link/uscode/26/5741))
#### § 40.525 Discontinuance of operations.
Every manufacturer of processed tobacco who desires to discontinue operations and close a factory must dispose of all processed tobacco on hand, make a concluding inventory and concluding report, in accordance with the provisions of [§§ 40.523](/current/title-27/section-40.523) and [40.522](/current/title-27/section-40.522), respectively, and surrender the permit to the appropriate TTB officer.
([26 U.S.C. 5721](https://www.govinfo.gov/link/uscode/26/5721), [5722](https://www.govinfo.gov/link/uscode/26/5722))
#### § 40.526 Minimum manufacturing and activity requirements.
A permit to manufacture processed tobacco will only be granted to those persons engaged in the processing of tobacco. A permit may be suspended, and subsequently revoked, if the person has no activity under such permit for a period of one year. A person whose permit as a manufacturer of processed tobacco has been revoked for non-use, who wishes to engage in such business, must re-apply for such permit.
([26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
#### § 40.527 Authorization to package processed tobacco.
A permit to manufacture processed tobacco does not authorize packaging of processed tobacco. Packaging of processed tobacco may only occur on the bonded premises of a manufacturer of tobacco products.
#### § 40.528 Suspension and revocation of permit.
Where the appropriate TTB officer has reason to believe that a manufacturer of processed tobacco has not in good faith complied with the provisions of [26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201), and regulations thereunder, or with any other provision of 26 U.S.C. with intent to defraud, or has violated any condition of his permit, or has failed to disclose any material information required or made any material false statement in the application for the permit, or is, by reason of previous or current legal proceedings involving a felony violation of any other provision of Federal criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes, not likely to maintain operations in compliance with [26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201), or has been convicted of a felony violation of any provision of Federal or State criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes, the appropriate TTB officer shall issue an order, stating the facts charged, citing such person to show cause why his permit should not be suspended or revoked. Such citation shall be issued and opportunity for hearing afforded in accordance with [part 71 of this chapter](/current/title-27/part-71), which part is applicable to such proceedings. If, after hearing, the hearing examiner, or on appeal, the Administrator, finds that such person has not shown cause why his permit should not be suspended or revoked, such permit shall be suspended for such period as the appropriate TTB officer deems proper or shall be revoked.
\[T.D. TTB-78, [74 FR 29410](https://www.federalregister.gov/citation/74-FR-29410), June 22, 2009, as amended by T.D. TTB-80, [74 FR 37552](https://www.federalregister.gov/citation/74-FR-37552), July 29, 2009]
### Other Provisions Relating to Manufacturers of Processed Tobacco
#### § 40.531 Alternate methods or procedures.
(a) *General.* A manufacturer of processed tobacco, on specific approval by the appropriate TTB officer as provided in this section, may use an alternate method or procedure in lieu of a method or procedure specifically prescribed in this subpart. The appropriate TTB officer may approve an alternate method or procedure, subject to stated conditions, when the appropriate TTB officer finds that—
(1) Good cause has been shown for the use of the alternate method or procedure;
(2) The alternate method or procedure is within the purpose of, and consistent with the effect intended by, the specifically prescribed method or procedure, and
(3) The alternate method or procedure will not be contrary to any provision of law, and will not result in an increase in cost to the Government or hinder the effective administration of this subpart.
(b) *Application.* A manufacturer of processed tobacco who desires to employ an alternate method or procedure must submit a written application to the appropriate TTB officer. The application shall specifically describe the proposed alternate method or procedure, and shall set forth the reasons therefor. An alternate method or procedure shall not be employed until the application has been approved by the appropriate TTB officer. The manufacturer shall, during the period of authorization of an alternate method or procedure, comply with the terms of the approved application. Authorization for any alternate method or procedure may be withdrawn whenever, in the judgment of the appropriate TTB officer, the effective administration of this part is hindered. Any authorization of the appropriate TTB officer under this section shall be retained as part of the manufacturer's records in accordance with this subpart.
\[T.D. TTB-78, [74 FR 29410](https://www.federalregister.gov/citation/74-FR-29410), June 22, 2009, as amended by T.D. TTB-104, [77 FR 37304](https://www.federalregister.gov/citation/77-FR-37304), June 21, 2012]
#### § 40.532 Emergency variations from requirements.
The appropriate TTB officer may approve methods of operation other than as specified in this subpart, where it is determined that an emergency exists and the proposed variations from the specified requirements are necessary, and provided that the proposed variations will not hinder the effective administration of this subpart and will not be contrary to any provision of law. Variations from requirements granted under this section are conditioned on compliance with the procedures, conditions, and limitations set forth in the approval of the application. Failure to comply in good faith with such procedures, conditions, and limitations will automatically terminate the authority for such variations, and the manufacturer of processed tobacco thereupon must fully comply with the prescribed requirements of the regulations from which the variations were authorized. Authority for any variation may be withdrawn whenever in the judgment of the appropriate TTB officer the effective administration of this subpart is hindered by the continuation of such variation. Where a manufacturer desires to employ such variation, the manufacturer must submit a written application to do so to the appropriate TTB officer. The application must describe the proposed variations and set forth the reasons therefor. Variations may not be employed until the application has been approved. Any authorization of the appropriate TTB officer under this section shall be retained as part of the manufacturer's records, in accordance with this subpart.
#### § 40.533 Penalties and forfeitures.
Anyone who fails to comply with the provisions of this subpart may be liable to the civil and criminal penalties, and forfeitures, provided by law.
#### § 40.534 Power of attorney.
If the application for permit or any report or other document required to be executed under this subpart is to be signed by an individual (including one of the partners for a partnership or one of the members of an association) as an attorney in fact for any person, or if an individual is to otherwise officially represent such person, power of attorney on TTB F 5000.8 shall be furnished to the appropriate TTB officer. Such power of attorney is not required for persons whose authority is furnished with the corporate documents as required by [§ 40.494](/current/title-27/section-40.494). TTB F 5000.8 does not have to be filed again with the appropriate TTB officer where such form has previously been submitted to that appropriate TTB officer and is still in effect.
# Part 41 — IMPORTATION OF TOBACCO PRODUCTS, CIGARETTE PAPERS AND TUBES, AND PROCESSED TOBACCO
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-41
Full text of 27 CFR Part 41 — IMPORTATION OF TOBACCO PRODUCTS, CIGARETTE PAPERS AND TUBES, AND PROCESSED TOBACCO. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 41—IMPORTATION OF TOBACCO PRODUCTS, CIGARETTE PAPERS AND TUBES, AND PROCESSED TOBACCO
#### Authority:
[26 U.S.C. 5701-5705](https://www.govinfo.gov/link/uscode/26/5701), [5708](https://www.govinfo.gov/link/uscode/26/5708), [5712](https://www.govinfo.gov/link/uscode/26/5712), [5713](https://www.govinfo.gov/link/uscode/26/5713), [5721-5723](https://www.govinfo.gov/link/uscode/26/5721), [5741](https://www.govinfo.gov/link/uscode/26/5741), [5754](https://www.govinfo.gov/link/uscode/26/5754), [5761-5763](https://www.govinfo.gov/link/uscode/26/5761), [6301](https://www.govinfo.gov/link/uscode/26/6301), [6109](https://www.govinfo.gov/link/uscode/26/6109), [6302](https://www.govinfo.gov/link/uscode/26/6302), [6313](https://www.govinfo.gov/link/uscode/26/6313), [6402](https://www.govinfo.gov/link/uscode/26/6402), [6404](https://www.govinfo.gov/link/uscode/26/6404), [7101](https://www.govinfo.gov/link/uscode/26/7101), [7212](https://www.govinfo.gov/link/uscode/26/7212), [7342](https://www.govinfo.gov/link/uscode/26/7342), [7606](https://www.govinfo.gov/link/uscode/26/7606), [7651](https://www.govinfo.gov/link/uscode/26/7651), [7652](https://www.govinfo.gov/link/uscode/26/7652), [7805](https://www.govinfo.gov/link/uscode/26/7805); [31 U.S.C. 9301](https://www.govinfo.gov/link/uscode/31/9301), [9303](https://www.govinfo.gov/link/uscode/31/9303), [9304](https://www.govinfo.gov/link/uscode/31/9304), [9306](https://www.govinfo.gov/link/uscode/31/9306).
#### Source:
Redesignated by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), Aug. 26, 2004, unless otherwise noted.
#### Editorial Note:
Nomenclature changes to part 41 (formerly part 275) appear at T.D. ATF-460, [66 FR 39093](https://www.federalregister.gov/citation/66-FR-39093), July 27, 2001.
## Subpart A—Scope of Regulations
#### § 41.1 Importation of tobacco products, cigarette papers and tubes, and processed tobacco.
This part contains regulations relating to tobacco products, cigarette papers and tubes, and processed tobacco imported into the United States from a foreign country or brought into the United States from Puerto Rico, the Virgin Islands, or a possession of the United States.
\[[78 FR 38568](https://www.federalregister.gov/citation/78-FR-38568), June 27, 2013]
## Subpart B—Definitions
#### § 41.11 Meaning of terms.
When used in this part and in forms prescribed under this part, the following terms shall have the meanings given in this section, unless the context clearly indicates otherwise. Words in the plural form shall include the singular, and vice versa, and words indicating the masculine gender shall include the feminine. The terms “includes” and “including” do not exclude things not listed which are in the same general class.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.41, Delegation of the Administrator's Authorities in [27 CFR Part 41](/current/title-27/part-41), Importation of Tobacco Products and Cigarette Papers and Tubes.
*Bank.* Any commercial bank.
*Banking day.* Any day during which a bank is open to the public for carrying on substantially all its banking functions.
*Business day.* Any day, other than a Saturday, Sunday, or a legal holiday. (The term legal holiday includes all holidays in the District of Columbia and, in the case of bonded manufacturers in Puerto Rico, all legal holidays in the Commonwealth of Puerto Rico.)
*Bonded manufacturer.* A manufacturer of tobacco products in Puerto Rico who has an approved bond, in accordance with the provisions of this part, authorizing him to defer the payment in Puerto Rico on the internal revenue tax imposed on such products by [26 U.S.C. 7652(a)](https://www.govinfo.gov/link/uscode/26/7652) as provided in this part.
*CFR.* The Code of Federal Regulations.
*Chewing Tobacco.* Any leaf tobacco that is not intended to be smoked.
*Cigar.* Any roll of tobacco wrapped in leaf tobacco or in any substance containing tobacco (other than any roll of tobacco which is a cigarette within the meaning of paragraph (2) of the definition for cigarette).
*Cigarette.*
(1) Any roll of tobacco wrapped in paper or in any substance not containing tobacco, and
(2) Any roll of tobacco wrapped in any substance containing tobacco which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette described in paragraph (1) of this definition.
*Cigarette paper.* Paper, or any other material except tobacco, prepared for use as a cigarette wrapper.
*Cigarette tube.* Cigarette paper made into a hollow cylinder for use in making cigarettes.
*Commercial bank.* A bank, whether or not a member of the Federal Reserve System, which has access to the Federal Reserve Communications System (FRCS) or Fedwire. The “FRCS” or “Fedwire” is a communications network that allows Federal Reserve System member banks to effect a transfer of funds for their customers (or other commercial banks) to the Treasury Account at the Federal Reserve Bank in New York.
*Computation or computed.* When used with respect to the tax on tobacco products of Puerto Rican manufacture, computation or computed shall mean that the bonded manufacturer has ascertained the quantity and kind (small cigars, large cigars, small cigarettes, large cigarettes, chewing tobacco, snuff, pipe tobacco, or roll-your-own tobacco) of tobacco products and the sale price of large cigars being shipped to the United States; that adequate bond has been posted to cover the payment, in Puerto Rico, of the tax on such products to be deferred under [subpart G of this part](/current/title-27/part-41/subpart-G); that the tax imposed on such products by [26 U.S.C. 7652(a)](https://www.govinfo.gov/link/uscode/26/7652) has been calculated; that the bonded manufacturer has executed an agreement to pay the internal revenue tax which will become due with respect to such products, as provided in this part; and that a TTB officer has verified and executed a certification of such calculation.
*Customs officer.* An officer of U.S. Customs and Border Protection (CBP) or any agent or other person authorized by law to perform the duties of such an officer.
*Determine.* To establish enough information about taxable products at the time of removal to calculate the tax, specifically the quantity (pounds or number) and kind (for example, cigarettes, snuff, paper tubes). Where the tax rate depends on additional information (such as number of cigarette papers to a set before 1/1/2000 or sale price of large cigars), that information must also be established as part of tax determination.
*Electronic fund transfer or EFT.* Any transfer of funds effected by a bonded manufacturer's commercial bank, either directly or through a correspondent banking relationship, via the Federal Reserve Communications System (FRCS) or Fedwire to the Treasury Account at the Federal Reserve Bank of New York.
*Export warehouse.* A bonded internal revenue warehouse for the storage of tobacco products and cigarette papers and tubes, upon which the internal revenue tax has not been paid or for the storage of processed tobacco, for subsequent shipment to a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States, or for consumption beyond the jurisdiction of the internal revenue laws of the United States.
*Export warehouse proprietor.* Any person who operates an export warehouse.
*Factory.* The premises of a manufacturer of tobacco products, cigarette papers or tubes, or processed tobacco in which he carries on such business.
*Fiscal year.* The period which begins October 1 and ends on the following September 30.
*HTS.* The Harmonized Tariff Schedule of the United States, as published by the United States International Trade Commission.
*Importer.* Any person in the United States to whom non-taxpaid tobacco products or cigarette papers or tubes, or any processed tobacco manufactured in a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States are shipped or consigned; any person who removes cigars for sale or consumption in the United States from a customs bonded manufacturing warehouse; and any person who smuggles or otherwise unlawfully brings tobacco products or cigarette papers or tubes, or any processed tobacco into the United States.
*Large cigarettes.* Cigarettes weighing more than three pounds per thousand.
*Large cigars.* Cigars weighing more than three pounds per thousand.
*Manufacturer of cigarette papers and tubes.* Any person who manufactures cigarette paper, or makes up cigarette paper into tubes, except for his own personal use or consumption.
*Manufacturer of processed tobacco.* Any person who processes any tobacco other than tobacco products.
*Manufacturer of tobacco products.*
(1) Any person who manufactures cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own tobacco, other than:
(i) A person who produces tobacco products solely for that person's own consumption or use; or
(ii) A proprietor of a customs bonded manufacturing warehouse with respect to the operation of such warehouse.
(2) The term “Manufacturer of tobacco products” includes any person who for commercial purposes makes available for consumer use (including such consumer's personal consumption or use under paragraph (1)(i) of this definition) a machine capable of making cigarettes, cigars, or other tobacco products. A person making such a machine available for consumer use shall be deemed the person making the removal with respect to any tobacco products manufactured by such machine. A person who sells a machine directly to a consumer at retail for a consumer's personal home use is not making a machine available for commercial purposes if such machine is not used at a retail premises and is designed to produce tobacco products only in personal use quantities.
*Package.* The immediate container in which tobacco products, processed tobacco, or cigarette papers or tubes are put up by the manufacturer or the importer (prior to release from customs custody) and offered for sale or delivery to the ultimate consumer. For purposes of this definition, a container of processed tobacco, the contents of which weigh 10 pounds or less (including any added non-tobacco ingredients or constituents), that is removed within the meaning of this part for any purpose other than destruction, export, delivery as a sample to a manufacturer of processed tobacco or tobacco products for the purpose of soliciting orders of processed tobacco, or for scientific testing or testing of equipment that results in the destruction of the processed tobacco or the return of the processed tobacco, is deemed to be a package offered for sale or delivery to the ultimate consumer. For appropriate tax rate, see [§ 41.30](/current/title-27/section-41.30).
*Packaging.* When used in the context of an action, the act of placing processed tobacco or a tobacco product in a package.
*Person.* An individual, partnership, association, company, corporation, estate, or trust.
*Pipe tobacco.* Any tobacco which because of its appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or purchased by, consumers as tobacco to be smoked in a pipe.
*Port Director of Customs.* The director of any port or port of entry as defined in [19 CFR 101.1](/current/title-19/section-101.1). A list of customs service ports and ports of entry is set forth in [19 CFR 101.3](/current/title-19/section-101.3).
*Processed tobacco.* Processed tobacco is any tobacco that has undergone processing, but does not include tobacco products. For purposes of this definition, the processing of tobacco does not include the farming or growing of tobacco or the handling of tobacco solely for sale, shipment, or delivery to a manufacturer of tobacco products or processed tobacco, nor does the processing of tobacco include curing, baling, or packaging activities. For purposes of this definition, the processing of tobacco includes, but is not limited to, stemming (that is, removing the stem from the tobacco leaf), fermenting, threshing, cutting, or flavoring the tobacco, or otherwise combining the tobacco with non-tobacco ingredients.
*Records.* The accounts, books, correspondence, declarations, papers, statements, technical data, electronic media and the computer programs necessary to retrieve the stored information in a usable form, and other documents that:
(1) Pertain to any importation of tobacco products, cigarette papers or tubes, or processed tobacco, to the information contained in the documents required by law or regulation under the Tariff Act of 1930, as amended, in connection with the importation or shipment of merchandise into the United States from Puerto Rico; and
(2) Are of the type normally kept in the ordinary course of business; and
(3) Are sufficiently detailed to:
(i) Establish the right to make the importation or shipment into the United States from Puerto Rico;
(ii) Establish the correctness of any importation or shipment into the United States from Puerto Rico;
(iii) Determine the liability of any person for duties and taxes due, or which may be due, to the United States;
(iv) Determine the liability of any person for fines, penalties, and forfeitures; and
(v) Determine whether the person has complied with the laws and regulations administered by TTB and U.S. Customs and Border Protection (CBP) and with any other documents required under laws or regulations administered by TTB and CBP.
*Relanding.* When used with reference to tobacco products and cigarette papers and tubes, the term “relanding” means importing, bringing, or returning into the jurisdiction of the United States any tobacco products or cigarette papers or tubes that were manufactured in the United States, labeled or shipped for export (including to Puerto Rico) as prescribed in this chapter, and previously exported from the United States.
*Removal or remove.* When used with reference to tobacco products or cigarette papers or tubes or any processed tobacco, the term “removal” or “removed” means removal from the factory, release from internal revenue bond under [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704), release from customs custody (including conditional release as defined in [19 CFR 141.0a(i)](/current/title-19/section-141.0a#p-141.0a\(i\))), and also includes the smuggling or other unlawful importation of such articles into the United States.
*Roll-your-own tobacco.* Any tobacco which, because of its appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or purchased by, consumers as tobacco for making cigarettes or cigars, or for use as wrappers thereof.
*Sale price.* The price for which large cigars are sold by the importer or United States manufacturer, determined in accordance with [§ 41.39](/current/title-27/section-41.39) and used for computation of the excise tax.
*Small cigarettes.* Cigarettes weighing not more than three pounds per thousand.
*Small cigars.* Cigars weighing not more than three pounds per thousand.
*Smokeless tobacco.* Any chewing tobacco or snuff.
*Snuff.* Any finely cut, ground, or powdered tobacco that is not intended to be smoked.
*This chapter.* Chapter I, [title 27, Code of Federal Regulations](/current/title-27).
*Tobacco products.* Cigars, cigarettes, smokeless tobacco, pipe tobacco, and roll-your-own tobacco.
*Treasury Account.* The Department of the Treasury's General Account at the Federal Reserve Bank of New York.
*United States.* When used in a geographical sense shall include only the States and the District of Columbia.
*U.S.C.* The United States Code.
(Aug. 16, 1954, ch. 736, 68A Stat. 775, as amended ([26 U.S.C. 6301](https://www.govinfo.gov/link/uscode/26/6301)); June 29, 1956, ch. 462, 70 Stat. 391 ([26 U.S.C. 6301](https://www.govinfo.gov/link/uscode/26/6301)))
\[T.D. ATF-48, [43 FR 13554](https://www.federalregister.gov/citation/43-FR-13554), Mar. 31, 1978]
#### Editorial Note:
For Federal Register citations affecting [§ 41.11](/current/title-27/section-41.11), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
## Subpart C—General
#### § 41.21 Forms prescribed.
(a) The Administrator is authorized to prescribe all forms required by this part. All of the information called for in each form shall be furnished as indicated by the headings on the form and the instructions on or pertaining to the form. In addition, information called for in each form shall be furnished as required by this part. When a return, form, claim, or other document called for under this part is required by this part, or by the document itself, to be executed under penalties of perjury, it shall be executed under penalties of perjury.
(b) Forms prescribed by this part are available for printing through the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
([5 U.S.C. 552(a)](https://www.govinfo.gov/link/uscode/5/552) (80 Stat. 383, as amended)
\[T.D. ATF-92, [46 FR 46922](https://www.federalregister.gov/citation/46-FR-46922), Sept. 23, 1981, as amended by T.D. ATF-232, [51 FR 28084](https://www.federalregister.gov/citation/51-FR-28084), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-372, [61 FR 20725](https://www.federalregister.gov/citation/61-FR-20725), May 8, 1996; T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), Aug. 26, 2004; T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 41.22 Retention of records.
All records required to be kept under this part, including copies of claims and schedules, authorizations, notices of release, reports, and returns, shall be retained for three years following the close of the year in which filed or made, or in the case of an authorization, for three years following the close of the calendar year in which the operation under such authorization is concluded. Such records shall be made available for inspection by any appropriate TTB officer upon his request.
(72 Stat. 1423; [26 U.S.C. 5741](https://www.govinfo.gov/link/uscode/26/5741))
\[[26 FR 8189](https://www.federalregister.gov/citation/26-FR-8189), Aug. 31, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and further redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), Aug. 26, 2004]
#### § 41.23 Authority of TTB officers to enter premises.
Any appropriate TTB officer may enter in the daytime any premises where tobacco products or cigarette papers or tubes are produced or kept so far as it may be necessary for the purpose of examining such articles. When such premises are open at night, any appropriate TTB officer may enter them, while so open, in the performance of his official duties. The owner of such premises, or person having the superintendence of the same, who refuses to admit any appropriate TTB officer or permit him to examine such articles shall be liable to the penalties prescribed by law for the offense.
(68A Stat. 872, 903; [26 U.S.C. 7342](https://www.govinfo.gov/link/uscode/26/7342), [7606](https://www.govinfo.gov/link/uscode/26/7606))
\[T.D. 6871, [31 FR 40](https://www.federalregister.gov/citation/31-FR-40), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28084](https://www.federalregister.gov/citation/51-FR-28084), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), Aug. 26, 2004]
#### § 41.24 Interference with administration.
Whoever, corruptly or by force or threats of force, endeavors to hinder or obstruct the administration of this part, or endeavors to intimidate or impede any appropriate TTB officer acting in his official capacity, or forcibly rescues or attempts to rescue or causes to be rescued any property, after it has been duly seized for forfeiture to the United States in connection with a violation of the internal revenue laws, shall be liable to the penalties prescribed by law.
(68A Stat. 855; [26 U.S.C. 7212](https://www.govinfo.gov/link/uscode/26/7212))
\[[26 FR 8189](https://www.federalregister.gov/citation/26-FR-8189), Aug. 31, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and further redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), Aug. 26, 2004]
#### § 41.25 Disposal of forfeited, condemned, and abandoned tobacco products and cigarette papers and tubes.
When any Federal, State, or local officer having custody of forfeited, condemned, or abandoned tobacco products or cigarette papers or tubes, upon which the Federal tax has not been paid, is of the opinion that the sale thereof will not bring a price equal to the tax due and payable thereon, and the expenses incident to the sale thereof, he shall not sell, nor cause to be sold, such articles for consumption in the United States. Where the articles are not sold, the officer may deliver them to a Federal or State hospital or institution (if they are fit for consumption) or cause their destruction by burning completely or by rendering them unfit for consumption. Where such articles are sold, they shall not be released by the officer having custody thereof until they are properly packaged and taxpaid, which tax shall be considered as a portion of the sales price. Except when the tax is to be paid to the Port Director of Customs or other authorized customs officer in accordance with customs regulations ([19 CFR part 127](/current/title-19/part-127)) on sales of articles by customs officers, the payment of tax on those articles must be evidenced by presentation, to the officer having custody of the articles, of a receipt from the appropriate TTB officer showing such payment. In the case of such articles held by or for the Federal Government, the sale thereof shall be subject to the applicable provisions of the Regulations of the General Services Administration, Title 1, Personal Property Management.
(68A Stat. 872, 903; [26 U.S.C. 7342](https://www.govinfo.gov/link/uscode/26/7342), [7606](https://www.govinfo.gov/link/uscode/26/7606))
\[T.D. 6871, [31 FR 40](https://www.federalregister.gov/citation/31-FR-40), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28084](https://www.federalregister.gov/citation/51-FR-28084), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-422, [64 FR 71948](https://www.federalregister.gov/citation/64-FR-71948), Dec. 22, 1999. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), Aug. 26, 2004; [78 FR 38568](https://www.federalregister.gov/citation/78-FR-38568), June 27, 2013]
#### § 41.26 Alternate methods or procedures.
An importer, on specific approval by the appropriate TTB officer as provided in this section, may use an alternate method or procedure in lieu of a method or procedure specifically prescribed in this part. The appropriate TTB officer may approve an alternate method or procedure, subject to stated conditions, when he finds that—
(a) Good cause has been shown for the use of the alternate method or procedure,
(b) The alternate method or procedure is within the purpose of, and consistent with the effect intended by, the specifically prescribed method or procedure, and affords equivalent security to the revenue, and
(c) The alternate method or procedure will not be contrary to any provision of law, and will not result in an increase in cost to the Government or hinder the effective administration of this part.
No alternate method or procedure relating to the giving of any bond or to the assessment, payment, or collection of tax, shall be authorized under this section. When an importer desires to employ an alternate method or procedure, he shall submit a written application to do so, in triplicate, to the appropriate TTB officer. The application shall specifically describe the proposed alternate method or procedure, and shall set forth the reasons therefor. Alternate methods or procedures shall not be employed until the application has been approved by the appropriate TTB officer. The importer shall, during the period of authorization of an alternate method or procedure, comply with the terms of the approved application. Authorization for any alternate method or procedure may be withdrawn whenever in the judgment of the appropriate TTB officer the revenue is jeopardized or the effective administration of this part is hindered. The importer shall retain, as part of his records, any authorization of the appropriate TTB officer under this section.
\[[26 FR 8190](https://www.federalregister.gov/citation/26-FR-8190), Aug. 31, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and further redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), Aug. 26, 2004; T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 41.27 Emergency variations from requirements.
The appropriate TTB officer may approve methods of operation other than as specified in this part, where he finds that an emergency exists and the proposed variations from the specified requirements are necessary, and the proposed variations—
(a) Will afford the security and protection to the revenue intended by the prescribed specifications,
(b) Will not hinder the effective administration of this part, and
(c) Will not be contrary to any provision of law.
Variations from requirements granted under this section are conditioned on compliance with the procedures, conditions, and limitations set forth in the approval of the application. Failure to comply in good faith and with such procedures, conditions, and limitations shall automatically terminate the authority for such variations and the importer thereupon shall fully comply with the prescribed requirements of regulations from which the variations were authorized. Authority for any variations may be withdrawn whenever in the judgment of the appropriate TTB officer the revenue is jeopardized or the effective administration of this part is hindered by the continuation of such variation. Where an importer desires to employ such variation, he shall submit a written application to do so, in triplicate, to the appropriate TTB officer. The application shall describe the proposed variations and set forth the reasons therefor. Variations shall not be employed until the application has been approved. The importer shall retain, as part of his records, any authorization of the appropriate TTB officer under this section.
\[[26 FR 8190](https://www.federalregister.gov/citation/26-FR-8190), Aug. 31, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and further redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), Aug. 26, 2004]
#### § 41.28 Penalties and forfeitures.
Anyone who fails to comply with the provisions of this part becomes liable to the civil and criminal penalties, and forfeitures, provided by law.
(72 Stat. 1425, 1426; [26 U.S.C. 5761](https://www.govinfo.gov/link/uscode/26/5761), [5762](https://www.govinfo.gov/link/uscode/26/5762), [5763](https://www.govinfo.gov/link/uscode/26/5763))
\[[26 FR 8190](https://www.federalregister.gov/citation/26-FR-8190), Aug. 31, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### § 41.29 Delegations of the Administrator.
The regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.41, Delegation of the Administrator's Authorities in [27 CFR Part 41](/current/title-27/part-41), Importation of Tobacco Products and Cigarette Papers and Tubes. You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), Aug. 26, 2004, as amended by T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
## Subpart D—Taxes
### Tax Rates
#### § 41.30 Pipe tobacco and roll-your-own tobacco tax rates.
(a) *Tax rates.* Pipe tobacco and roll-your-own tobacco are taxed at the following rates under [26 U.S.C. 5701(f)](https://www.govinfo.gov/link/uscode/26/5701) and [(g)](https://www.govinfo.gov/link/uscode/26/5701), respectively:
| Product | Tax rate per pound\* for removals during the following periods: | |
| ---------------------------------------- | --------------------------------------------------------------- | --------- |
| 2002 to March 31, 2009 | April 1, 2009 and after | |
| Pipe tobacco | \$ 1.0969 | \$ 2.8311 |
| Roll-your-own tobacco | \$ 1.0969 | \$ 24.78 |
| | | |
| --- | --- | --- |
| \* Prorate tax for fractions of a pound. | | |
(b) *Classification.*
(1) Pipe tobacco and roll-your-own tobacco, before removal subject to tax, must be put up in packages that conform to the requirements of [§ 41.71](/current/title-27/section-41.71) and of [§ 41.72a](/current/title-27/section-41.72a) or [§ 41.72b](/current/title-27/section-41.72b) as appropriate.
(2) Any tobacco that has been processed and that is removed in a package, as that term is defined in [§ 41.11](/current/title-27/section-41.11), that does not bear the notice for smokeless tobacco prescribed in [§ 41.72](/current/title-27/section-41.72) or the notice for pipe tobacco prescribed in [§ 41.72a](/current/title-27/section-41.72a) is deemed to be roll-your-own tobacco and subject to tax at the rate applicable to roll-your-own tobacco. A container of processed tobacco, the contents of which weigh 10 pounds or less (including any added non-tobacco ingredients or constituents), that is removed within the meaning of this part for any purpose other than destruction, export, delivery as a sample to a manufacturer of processed tobacco or tobacco products for the purpose of soliciting orders of processed tobacco, or for scientific testing or testing of equipment that results in the destruction of the processed tobacco or the return of the processed tobacco, is deemed to be a package offered for sale or delivery to the ultimate consumer.
(3) Subject to [paragraph (b)(4)](/current/title-27/section-41.30#p-41.30\(b\)\(4\)) of this section, any tobacco that has been processed and that is removed in a package, as that term is defined in [§ 41.11](/current/title-27/section-41.11), is deemed to be roll-your-own tobacco and subject to tax at the rate applicable to roll-your-own tobacco, even though the package bears the notice required for pipe tobacco under [§ 41.72a](/current/title-27/section-41.72a), if:
(i) The package does not bear the declaration “pipe tobacco” in direct conjunction with, parallel to, and in substantially the same conspicuousness of type and background as the brand name each time the brand name appears on the package; or
(ii) The package or accompanying materials bear any representation that would suggest a use other than as pipe tobacco. The term 'accompanying materials' includes, but is not limited to, any point of sale advertising or other printed product communications issued by the manufacturer or importer of pipe tobacco products. In addition, the inclusion of cigarette papers or tubes in a package bearing a 'pipe tobacco' declaration will suggest a use other than pipe tobacco.
(4) During the period from June 22, 2009, through March 23, 2010, importers may continue to remove products as pipe tobacco in packages that do not bear the declaration “pipe tobacco” in the manner prescribed in [paragraph (b)(3)(i)](/current/title-27/section-41.30#p-41.30\(b\)\(3\)\(i\)) of this section.
([26 U.S.C. 5702](https://www.govinfo.gov/link/uscode/26/5702) and [5723](https://www.govinfo.gov/link/uscode/26/5723))
\[T.D. TTB-75, [74 FR 14483](https://www.federalregister.gov/citation/74-FR-14483), Mar. 31, 2009, as amended by T.D. TTB-78, [74 FR 29415](https://www.federalregister.gov/citation/74-FR-29415), June 22, 2009; T.D. TTB-81, [74 FR 48654](https://www.federalregister.gov/citation/74-FR-48654), Sept. 24, 2009; T.D. TTB-104, [77 FR 37304](https://www.federalregister.gov/citation/77-FR-37304), June 21, 2012]
#### § 41.31 Cigar tax rates.
(a) Cigars are taxed at the following rates under [26 U.S.C. 5701(a)](https://www.govinfo.gov/link/uscode/26/5701):
| Type and amount | Tax rate for removals during the following periods: | |
| -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------- | ------------------- |
| 2002 to March 31, 2009 | April 1, 2009 and after | |
| Small cigars per thousand | \$1.828 | \$50.33 |
| Large cigars\* | | |
| • percentage of sale price | 20.719% | 52.750% |
| • but not to exceed— | \$48.75 per thousand | \$0.4026 per cigar. |
| | | |
| --- | --- | --- |
| \* For large cigars: Until March 31, 2009, the percentage tax rate applies when the sale price is $235.294 per thousand or less, and the flat tax rate applies when the sale price is more than $235.294 per thousand. On and after April 1, 2009, the percentage tax rate applies when the sale price is $763.222 or less per thousand cigars, and the flat tax rate applies when the sale price is more than $763.222 per thousand cigars. | | |
(b) See [§ 41.39 of this part](/current/title-27/part-41/section-41.39) for rules concerning determination of sale price of large cigars.
(c) Cigars not exempt from tax under [26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201) and the provisions of this part which are removed but not intended for sale shall be taxed at the same rate as similar cigars removed for sale.
\[T.D. ATF-420, [64 FR 71942](https://www.federalregister.gov/citation/64-FR-71942), Dec. 22, 1999. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004; T.D. TTB-75, [74 FR 14484](https://www.federalregister.gov/citation/74-FR-14484), Mar. 31, 2009]
#### § 41.32 Cigarette tax rates.
Cigarettes are taxed at the following rates under [26 U.S.C. 5701(b)](https://www.govinfo.gov/link/uscode/26/5701):
| Product | Tax rate per thousand for removals during the following periods: | |
| --------------------------------- | ---------------------------------------------------------------------------------------------------------------------- | -------- |
| 2002 to March 31, 2009 | April 1, 2009 and after | |
| Small cigarettes | \$19.50 | \$50.33 |
| Large cigarettes up to 61⁄2″ long | \$40.95 | \$105.69 |
| Large cigarettes over 61⁄2″ long | Taxed at the rate for small cigarettes, counting each 23⁄4 or fraction thereof of the length of each as one cigarette. | |
\[T.D. TTB-75, [74 FR 14484](https://www.federalregister.gov/citation/74-FR-14484), Mar. 31, 2009]
#### § 41.33 Smokeless tobacco tax rates.
Smokeless tobacco products are taxed at the following rates under [26 U.S.C. 5701(e)](https://www.govinfo.gov/link/uscode/26/5701):
| Product | Tax rate per pound\* for removals during the following periods: | |
| ---------------------------------------- | --------------------------------------------------------------- | -------- |
| 2002 to March 31, 2009 | April 1, 2009 and after | |
| Snuff | \$0.585 | \$1.51 |
| Chewing tobacco | \$0.195 | \$0.5033 |
| | | |
| --- | --- | --- |
| \* Prorate tax for fractions of a pound. | | |
\[T.D. TTB-75, [74 FR 14484](https://www.federalregister.gov/citation/74-FR-14484), Mar. 31, 2009]
#### § 41.34 Cigarette papers.
Cigarette papers are taxed at the following rates under [26 U.S.C. 5701(c)](https://www.govinfo.gov/link/uscode/26/5701):
| Product | Tax rate for each 50 papers\* for removals during the following periods: | |
| ------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------- | -------- |
| 2002 to March 31, 2009 | April 1, 2009 and after | |
| Cigarette papers up to 61⁄2 long | \$0.0122 | \$0.0315 |
| Cigarette papers over 61⁄2″ long | Use rates above, but count each 23⁄4″ or fraction thereof of the length of each as one cigarette paper. | |
| | | |
| --- | --- | --- |
| \* Tax rate for less than 50 papers is the same. The tax is not prorated. | | |
\[T.D. TTB-75, [74 FR 14484](https://www.federalregister.gov/citation/74-FR-14484), Mar. 31, 2009]
#### § 41.35 Cigarette tubes.
Cigarette tubes are taxed at the following rates under [26 U.S.C. 5701(d)](https://www.govinfo.gov/link/uscode/26/5701):
| Product | Tax rate for each 50 tubes\* for removals during the following periods: | |
| ------------------------------------------------------------------------ | ----------------------------------------------------------------------------------------------------- | --------- |
| 2002 to March 31, 2009 | April 1, 2009 and after | |
| Cigarette tubes up to 61⁄2 long | \$0.0244 | \$ 0.0630 |
| Cigarette tubes over 61⁄2 long | Use rates above, but count each 23⁄4 or fraction thereof of the length of each as one cigarette tube. | |
| | | |
| --- | --- | --- |
| \* Tax rate for less than 50 tubes is the same. The tax is not prorated. | | |
\[T.D. TTB-75, [74 FR 14484](https://www.federalregister.gov/citation/74-FR-14484), Mar. 31, 2009, as amended by T.D. TTB-85, [75 FR 42607](https://www.federalregister.gov/citation/75-FR-42607), July 22, 2010]
### Classification of Large Cigars and Cigarettes
#### § 41.37 \[Reserved]
#### § 41.38 Cigarettes.
For internal revenue tax purposes, small cigarettes are designated Class A and large cigarettes are designated Class B.
(72 Stat. 1414; [26 U.S.C. 5701](https://www.govinfo.gov/link/uscode/26/5701))
\[[26 FR 8191](https://www.federalregister.gov/citation/26-FR-8191), Aug. 31, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### § 41.39 Determination of sale price of large cigars.
The tax imposed on large cigars is computed based on the sale price (the price for which the large cigars are sold by the importer or United States manufacturer). In addition to money, goods or services exchanged for cigars may be considered as part of the sale price. See [§ 40.22(b) of this chapter](/current/title-27/section-40.22#p-40.22\(b\)) for information on determining the sale price in special cases. See [§ 41.40 of this chapter](/current/title-27/section-41.40) regarding liability for tax on large cigars, not put up in packages, released from customs custody without payment of tax for delivery to a domestic manufacturer of tobacco products.
\[T.D. ATF-420, [64 FR 71944](https://www.federalregister.gov/citation/64-FR-71944), Dec. 22, 1999; T.D. ATF-422, [64 FR 71948](https://www.federalregister.gov/citation/64-FR-71948), Dec. 22, 1999; T.D. ATF-422a, [65 FR 15058](https://www.federalregister.gov/citation/65-FR-15058), Mar. 31, 2000; T.D. ATF-460, [66 FR 39093](https://www.federalregister.gov/citation/66-FR-39093), July 27, 2001; [78 FR 38568](https://www.federalregister.gov/citation/78-FR-38568), June 27, 2013]
### Liability for and Payment of Taxes
#### § 41.40 Persons liable for tax.
The importer of tobacco products or cigarette papers and tubes is liable for the internal revenue taxes imposed thereon by [26 U.S.C. 5701](https://www.govinfo.gov/link/uscode/26/5701) or [7652](https://www.govinfo.gov/link/uscode/26/7652), except when tobacco products or cigarette papers or tubes imported or brought into the United States (other than those previously exported and returned) are released from customs custody, without payment of tax as provided under [26 U.S.C. 5704(c)](https://www.govinfo.gov/link/uscode/26/5704). Under section 5704(c), tobacco products and cigarette papers and tubes, imported or brought into the United States, may be released from customs custody, without payment of tax, for delivery to the proprietor of an export warehouse, or to a manufacturer of tobacco products or cigarette papers and tubes if such articles are not put up in packages. Under these circumstances the transferee will become liable for the internal revenue tax on these articles upon release from customs custody, and the importer will thereupon be relieved from the liability for the tax. However, if the transferee is also the importer, the importer will not be relieved from the liability for the tax.
\[[78 FR 38568](https://www.federalregister.gov/citation/78-FR-38568), June 27, 2013]
#### § 41.41 Determination and payment of tax.
Tobacco products and cigarette papers and tubes imported or brought into the United States, on which internal revenue taxes are due and payable, are not eligible for release from customs custody until those taxes have been determined.
\[[78 FR 38569](https://www.federalregister.gov/citation/78-FR-38569), June 27, 2013]
### Exemptions From Taxes and Permits
#### § 41.50 Exemptions.
The Harmonized Tariff Schedule of the United States ([19 U.S.C. 1202](https://www.govinfo.gov/link/uscode/19/1202)) and the customs regulations ([19 CFR chapter I](/current/title-19/chapter-I)) provide for certain exemptions from internal revenue taxes with respect to tobacco products and cigarette papers and tubes imported into the United States. These exemptions include, but are not limited to, certain importations in passengers' baggage, for use of crew members, and by foreign officials. Persons importing tobacco products and cigarette papers and tubes as described in this section are not required to obtain a permit.
\[T.D. 6871, [31 FR 41](https://www.federalregister.gov/citation/31-FR-41), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28084](https://www.federalregister.gov/citation/51-FR-28084), Aug. 5, 1986; T.D. ATF-243, [52 FR 43194](https://www.federalregister.gov/citation/52-FR-43194), Dec. 1, 1986; T.D. ATF-284, [54 FR 12190](https://www.federalregister.gov/citation/54-FR-12190), Mar. 24, 1989; T.D. ATF-422, [64 FR 71949](https://www.federalregister.gov/citation/64-FR-71949), Dec. 22, 1999; [78 FR 38569](https://www.federalregister.gov/citation/78-FR-38569), June 27, 2013; T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
### Assessment of Taxes
#### § 41.60 Assessment.
Whenever any person required by law to pay internal revenue tax on tobacco products or cigarette papers or tubes fails to pay such tax, the tax shall be ascertained and assessed against such person, subject to the limitations prescribed in [26 U.S.C. 6501](https://www.govinfo.gov/link/uscode/26/6501). The tax so assessed shall be in addition to the penalties imposed by law for failure to pay such tax when required. Except in cases where delay may jeopardize collection of the tax, or where the amount is nominal or the result of an evident mathematical error, no such assessment shall be made until and after notice has been afforded such person to show cause against assessment. The person will be allowed 45 days from the date of such notice to show cause, in writing, against such assessment.
(72 Stat. 1417; [26 U.S.C. 5703](https://www.govinfo.gov/link/uscode/26/5703))
\[T.D. 6871, [31 FR 41](https://www.federalregister.gov/citation/31-FR-41), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55855](https://www.federalregister.gov/citation/44-FR-55855), Sept. 28, 1979; T.D. ATF-232, [51 FR 28084](https://www.federalregister.gov/citation/51-FR-28084), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
### Customs' Collection of Taxes
#### § 41.62 Customs collection of internal revenue taxes on tobacco products and cigarette papers and tubes imported or brought into the United States.
Internal revenue taxes on tobacco products and cigarette papers and tubes imported or brought into the United States, which are to be paid to the Port Director of Customs or other authorized customs officer, in accordance with this part, must be collected, accounted for, and deposited as internal revenue collections by the Port Director of Customs in accordance with customs procedures and regulations.
\[[78 FR 38569](https://www.federalregister.gov/citation/78-FR-38569), June 27, 2013]
#### § 41.63 Payment of tax by electronic fund transfer.
(a) Each importer who was liable, during a calendar year, for a gross amount equal to or exceeding five million dollars in taxes on cigars, cigarettes, cigarette papers, and cigarette tubes combining tax liabilities incurred under this [part and part 40 of this chapter](/current/title-27/part-40), shall use a commercial bank in making payment by electronic fund transfer (EFT) of such taxes during the succeeding calendar year. Payment of such taxes by cash, check, or money order is not authorized for an importer who is required, by this section, to make remittances by EFT. For purposes of this section, the dollar amount of tax liability is defined as the gross tax liability on all taxable withdrawals and importations (including similar products brought into the United States from Puerto Rico or the Virgin Islands) during the calendar year, without regard to any drawbacks, credits, or refunds, for all premises from which such activities are conducted by the taxpayer.
(b) For the purposes of this section, a taxpayer includes a controlled group of corporations, as defined in [26 U.S.C. 1563](https://www.govinfo.gov/link/uscode/26/1563), and implementing regulations in [26 CFR 1.1563-1](/current/title-26/section-1.1563-1) through [1.1563-4](/current/title-26/section-1.1563-4), except that the words “at least 80 percent” shall be replaced by the words “more than 50 percent” in each place it appears in subsection (a) of [26 U.S.C. 1563](https://www.govinfo.gov/link/uscode/26/1563), as well as in the implementing regulations. Also, the rules for a “controlled group of corporations” apply in a similar fashion to groups which include partnerships and/or sole proprietorships. If one entity maintains more than 50% control over a group consisting of corporations and one, or more, partnerships and/or sole proprietorships, all of the members of the controlled group are one taxpayer for the purpose of determining who is required to make remittances by EFT.
(c) For the purposes of this section,
(1) electronic fund transfer or EFT means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, or computer of magnetic tape, so as to order, instruct, or authorize a financial institution to either debit or credit an account, in accordance with procedures established by U.S. Customs and Border Protection, and
(2) electronic fund transfer or EFT does not have the meaning defined in [§ 41.11](/current/title-27/section-41.11) for use elsewhere in this part.
(d) An importer who is required by this section to make remittances by EFT, shall make the EFT remittance in accordance with the requirements of U.S. Customs and Border Protection.
(Act of August 16, 1954, 68A Stat. 775, as amended ([26 U.S.C. 6302](https://www.govinfo.gov/link/uscode/26/6302)); Sec. 202, Pub. L. 85-859, 72 Stat. 1417, as amended ([26 U.S.C. 5703](https://www.govinfo.gov/link/uscode/26/5703)))
\[T.D. ATF-245, [52 FR 534](https://www.federalregister.gov/citation/52-FR-534), Jan. 7, 1987, as amended by T.D. ATF-384, [61 FR 54095](https://www.federalregister.gov/citation/61-FR-54095), Oct. 17, 1996. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004; T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
## Subpart E—Packages
#### § 41.71 Package.
All tobacco products, cigarette papers and tubes, except as provided in [§ 41.75](/current/title-27/section-41.75), shall, before removal subject to internal revenue tax, be put up in packages which shall be of such construction as will securely contain the articles therein and maintain the notice thereon as required by this subpart. No package of tobacco products or cigarette papers or tubes shall have contained in, attached to, or stamped, marked, written, or printed thereon (a) any certificate, coupon, or other device purporting to be or to represent a ticket, chance, share, or an interest in, or dependent on, the event of a lottery, (b) any indecent or immoral picture, print, or representation, or (c) any statement or indication that United States tax has been paid. No person may purchase, receive, possess (except for personal consumption), offer for sale, or sell or otherwise dispose of, after removal, any tobacco products that are not put up in packages bearing the marks, labels, and notices, as required under this part.
([26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723) and [5751](https://www.govinfo.gov/link/uscode/26/5751))
\[T.D. 6871, [31 FR 41](https://www.federalregister.gov/citation/31-FR-41), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28084](https://www.federalregister.gov/citation/51-FR-28084), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004; T.D. TTB-78, [74 FR 29415](https://www.federalregister.gov/citation/74-FR-29415), June 22, 2009]
#### § 41.72 Notice for smokeless tobacco.
(a) *Product designation.* Every package of chewing tobacco or snuff shall, before removal subject to internal revenue tax, have adequately imprinted thereon, or on a label securely affixed thereto, the designation “chewing tobacco” or “snuff.” As an alternative, packages of chewing tobacco may be designated “Tax Class C,” and packages of snuff may be designated “Tax Class M.”
(b) *Product weight.* Every package of chewing tobacco or snuff shall, before removal subject to internal revenue tax, have adequately imprinted thereon, or on a label securely affixed thereto, a clear statement of the actual pounds and ounces of the product contained therein. As an alternative, the shipping cases containing packages of chewing tobacco or snuff may, before removal, have adequately imprinted thereon, or on a label securely affixed thereto, a clear statement, in pounds and ounces, of the total weight of the product, the tax class of the product, and the total number of the packages of product contained therein.
(Approved by the Office of Management and Budget under control number 1512-0502)
(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 ([26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723)))
\[T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986, as amended by T.D. ATF-446, [66 FR 16602](https://www.federalregister.gov/citation/66-FR-16602), Mar. 27, 2001]
#### § 41.72a Notice for pipe tobacco.
(a) *Product designation.* Every package of pipe tobacco shall, before removal subject to internal revenue tax, have adequately imprinted thereon, or on a label securely fixed thereto, the designation “pipe tobacco.”
(b) *Product weight.* Every package of pipe tobacco shall, before removal subject to internal revenue tax, have adequately imprinted thereon, or on a label securely affixed thereto, a clear statement of the actual pounds and ounces of the product contained therein.
\[T.D. ATF-289, [54 FR 48841](https://www.federalregister.gov/citation/54-FR-48841), Nov. 27, 1989. Redesignated by T.D. ATF-381, [61 FR 37004](https://www.federalregister.gov/citation/61-FR-37004), July 16, 1996, as amended by T.D. TTB-78, [74 FR 29415](https://www.federalregister.gov/citation/74-FR-29415), June 22, 2009]
#### § 41.72b Notice for roll-your-own tobacco.
(a) *Product designation.* Every package of roll-your-own tobacco, before removal subject to tax, must have adequately imprinted on it, or on a label securely affixed to it, the applicable designation “roll-your-own tobacco”, “cigarette tobacco”, “cigarette wrapper”, “cigar tobacco” or “cigar wrapper”.
(b) *Product weight.* Before removal subject to tax, roll-your-own tobacco must have a clear statement of the actual weight in pounds and ounces of the product in the package. This statement must be adequately imprinted on, or on a label securely affixed to, the package.
(Approved by the Office of Management and Budget under control number 1513-0091)
\[T.D. ATF-429, [65 FR 57547](https://www.federalregister.gov/citation/65-FR-57547), Sept. 25, 2000, as amended by T.D. TTB-78, [74 FR 29415](https://www.federalregister.gov/citation/74-FR-29415), June 22, 2009]
#### § 41.72c Package use-up rule.
(a) During the period from June 22, 2009, through March 23, 2010, an importer of tobacco products may remove packages of pipe tobacco or roll-your-own tobacco that do not meet the requirements of [§ 41.72a(a)](/current/title-27/section-41.72a#p-41.72a\(a\)) or [§ 41.72b(a)](/current/title-27/section-41.72b#p-41.72b\(a\)), provided that such packages bear the designation “Tax Class L” (to designate pipe tobacco) or “Tax Class J” (to designate roll-your-own tobacco) and were in use prior to June 22, 2009.
(b) During the period from June 22, 2009, through March 23, 2010, an importer may remove roll-your-own tobacco for which the applicable designation is “cigar tobacco,” “cigarette wrapper,” or “cigar wrapper” even if the packages of such products do not meet the requirements of [§ 41.72b](/current/title-27/section-41.72b).
\[T.D. TTB-81, [74 FR 48654](https://www.federalregister.gov/citation/74-FR-48654), Sept. 24, 2009]
#### § 41.73 Notice for cigars.
Before removal subject to internal revenue tax, every package of cigars, except as provided in [§ 41.75](/current/title-27/section-41.75), shall have adequately imprinted on it, or on a label securely affixed to it—
(a) The designation “cigars”;
(b) The quantity of cigars contained in the package; and
(c) For small cigars, the classification of the product for tax purposes (i.e., either “small” or “little”).
(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 ([26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723)))
\[T.D. ATF-80, [46 FR 18310](https://www.federalregister.gov/citation/46-FR-18310), Mar. 24, 1981. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004]
#### § 41.74 Notice for cigarettes.
Every package of cigarettes, except as provided in [§ 41.75](/current/title-27/section-41.75), shall, before removal subject to internal revenue tax, have adequately imprinted thereon, or on a label securely affixed thereto, the designation “cigarettes”, the quantity of such product contained therein; and the classification for tax purposes, i.e., for small cigarettes either “small” or “Class A”, and for large cigarettes, either “large” or “Class B”.
(72 Stat. 1422; [26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723))
\[[26 FR 8192](https://www.federalregister.gov/citation/26-FR-8192), Aug. 31, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, further redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004]
#### § 41.75 Exemptions.
The provisions of this subpart requiring that tobacco products and cigarette papers and tubes be put up in packages and that proper notice be placed on such packages shall not apply to imported tobacco products and cigarette papers and tubes authorized to be released from customs custody, without payment of internal revenue tax, pursuant to [§ 41.50](/current/title-27/section-41.50), and shall not apply to tobacco products imported in passengers' baggage, or by mail where the value does not exceed \$250, where such products are solely for the personal consumption of the importer or for disposition as his bona fide gift.
(72 Stat. 1422; [26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723))
\[T.D. 6871, [31 FR 41](https://www.federalregister.gov/citation/31-FR-41), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-232, [51 FR 28085](https://www.federalregister.gov/citation/51-FR-28085), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004]
## Subpart F—Tobacco Products and Cigarette Papers and Tubes, Imported Into or Returned to the United States
#### § 41.81 Taxpayment.
(a) *General.* This section applies to tobacco products and cigarette papers and tubes upon which internal revenue tax is payable and which are imported into the United States from a foreign country or are brought into the United States from Puerto Rico, the Virgin Islands, or a possession of the United States. For provisions relating to restrictions on the importation of previously exported tobacco products and cigarette papers and tubes, see [§ 41.82](/current/title-27/section-41.82).
(b) *Method of payment.* Except for articles imported or brought into the United States as provided in [§§ 41.85](/current/title-27/section-41.85) and [41.85a](/current/title-27/section-41.85a), the internal revenue tax must be determined before the tobacco products, cigarette papers, or cigarette tubes are released from customs custody. The tax must be paid on the basis of a return, and the customs form (including any electronic transmissions) by which the tobacco products, cigarette papers, or cigarette tubes are duty- and tax-paid to CBP will be treated as a return for purposes of this part.
(c) *Required information.* In the case of tobacco products and cigarette papers and tubes imported into the United States for consumption, the importer, if filing electronically, must file with U.S. Customs and Border Protection (CBP) the information specified in [paragraphs (c)(1)](/current/title-27/section-41.81#p-41.81\(c\)\(1\)) through [(7)](/current/title-27/section-41.81#p-41.81\(c\)\(7\)) of this section at the time of filing the entry or entry summary, as appropriate, along with any other information that is required by CBP to be filed with the entry or entry summary for purposes of determining and collecting the Federal excise tax and administering the provisions of the Internal Revenue Code. Any information required under [paragraphs (c)(1)](/current/title-27/section-41.81#p-41.81\(c\)\(1\)) through [(7)](/current/title-27/section-41.81#p-41.81\(c\)\(7\)) of this section that is required by, and filed with, CBP as part of the entry or entry summary for purposes of meeting CBP requirements will also satisfy the requirements of this section. Regardless of the method of filing, the importer must retain as a record the information required by this section, any information provided to CBP to meet CBP requirements, and any supporting documentation and make such records available upon request by the appropriate TTB officer or a customs officer.
(1) *All tobacco products.* For all tobacco products, the following information is required:
(i) The number of the tobacco product importer permit that is issued under [subpart K of this part](/current/title-27/part-41/subpart-K);
(ii) The employer identification number (EIN) assigned to the importer by the Internal Revenue Service and provided by the importer on its permit application to TTB made on TTB Form 5230.4;
(iii) The name and address of the ultimate consignee;
(iv) The information specific to each tobacco product set forth in [paragraphs (c)(2)](/current/title-27/section-41.81#p-41.81\(c\)\(2\)) through [(6)](/current/title-27/section-41.81#p-41.81\(c\)\(6\)) of this section.
(2) *Cigarettes.* For cigarettes, in addition to the information required in [paragraph (c)(1)](/current/title-27/section-41.81#p-41.81\(c\)\(1\)) of this section, the importer must provide a description of the product for Internal Revenue Code purposes, including “cigarettes” and either “small” (or “class A”) or “large” (or “class B”) and must also provide the number of cigarettes.
(3) *Cigars.* For cigars, in addition to the information required in [paragraph (c)(1)](/current/title-27/section-41.81#p-41.81\(c\)\(1\)) of this section, the importer must provide:
(i) The number of cigars imported under each Harmonized Tariff Schedule of the United States (HTSUS) code number;
(ii) The description of the cigars for Internal Revenue Code purposes, including “cigars” and either “large” or “small”;
(iii) For large cigars with a sale price of \$763.222 or less per 1,000, the number and sale price (the price for which sold by the importer) per 1,000 of such cigars; and
(iv) For large cigars with a sale price of more than \$763.222 per 1,000, the number of such cigars.
(4) *Smokeless tobacco.* For smokeless tobacco, in addition to the information required in [paragraph (c)(1)](/current/title-27/section-41.81#p-41.81\(c\)\(1\)) of this section, the importer must provide a description of the product for Internal Revenue Code purposes, as either “chewing tobacco” or “snuff” and will state the number of pounds and ounces or kilograms and grams of the product.
(5) *Pipe tobacco.* For pipe tobacco, in addition to the information required in [paragraph (c)(1)](/current/title-27/section-41.81#p-41.81\(c\)\(1\)) of this section, the importer must provide a description of the product under the Internal Revenue Code, as “pipe tobacco,” and will also state the number of pounds and ounces or kilograms and grams of the product.
(6) *Roll-your-own tobacco.* For roll-your-own tobacco, in addition to the information required in [paragraph (c)(1)](/current/title-27/section-41.81#p-41.81\(c\)\(1\)) of this section, the importer must provide a description of the product for Internal Revenue Code purposes, as “roll-your-own tobacco,” “cigarette tobacco,” “cigarette wrapper,” “cigar tobacco,” or “cigar wrapper.” The importer must also state the number of pounds and ounces or kilograms and grams of the product.
(7) *Cigarette papers and cigarette tubes.* For cigarette papers and cigarette tubes, the importer must provide:
(i) The classification of the product for Internal Revenue Code purposes, including either “cigarette papers” or “cigarette tubes” and an indication of whether the length of the papers or tubes is over 61⁄2 inches;
(ii) The employer identification number (EIN) assigned to the importer by the Internal Revenue Service;
(iii) The name and address of the ultimate consignee; and
(iv) The total taxable quantity of each.
(d) *Exceptions.* The provisions of this section shall not apply to:
(1) Tobacco products, cigarette papers, or cigarette tubes released from customs custody and transferred in bond to a U.S. manufacturer of tobacco products or cigarette papers and tubes (see [§§ 41.85](/current/title-27/section-41.85), [41.85a](/current/title-27/section-41.85a), or [41.135](/current/title-27/section-41.135));
(2) Puerto Rican products on which the tax is prepaid or deferred (see subpart G); and
(3) Tax payments of cigars from class 6, customs bonded manufacturing warehouses (see [§ 41.151](/current/title-27/section-41.151)).
(68A Stat. 907, as amended ([26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652)); sec. 202, Pub. L. 85-859, 72 Stat. 1417 ([26 U.S.C. 5703](https://www.govinfo.gov/link/uscode/26/5703)))
(Approved by the Office of Management and Budget under control number 1513-0064)
\[T.D. ATF-27, [41 FR 23951](https://www.federalregister.gov/citation/41-FR-23951), June 14, 1976]
#### Editorial Note:
For Federal Register citations affecting [§ 41.81](/current/title-27/section-41.81), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
### Release From Customs Custody of Tobacco Products and Cigarette Papers and Tubes Without Payment of Tax or Certain Duty
#### § 41.82 Restrictions on tobacco products labeled for export.
(a) The provisions of this section apply to tobacco products and cigarette papers and tubes manufactured in the United States and labeled for exportation under [parts 40](/current/title-27/part-40) and [44 of this chapter](/current/title-27/part-44).
(b) Articles described in [paragraph (a)](/current/title-27/section-41.82#p-41.82\(a\)) of this section may be transferred to or removed from the premises of a manufacturer or an export warehouse proprietor only if such articles are being transferred or removed without tax as provided in this part.
(c) Articles described in [paragraph (a)](/current/title-27/section-41.82#p-41.82\(a\)) of this section may only be imported or brought into the United States, after their exportation, under the provisions of [26 U.S.C. 5704(d)](https://www.govinfo.gov/link/uscode/26/5704), by release from Customs custody for delivery to the original manufacturer of such tobacco products or cigarette papers or tubes or to the proprietor of an export warehouse authorized by such manufacturer to receive such articles. These products are transferred in bond and are released from Customs custody without payment of that part of the duty attributable to internal revenue tax.
(d) Articles described in [paragraph (a)](/current/title-27/section-41.82#p-41.82\(a\)) of this section that are not put up in packages may be imported or brought into the United States under [26 U.S.C. 5704(c)](https://www.govinfo.gov/link/uscode/26/5704) by release from Customs custody without payment of tax for delivery to the original manufacturer of such articles. However, because such articles are also eligible for release under [26 U.S.C. 5704(d)](https://www.govinfo.gov/link/uscode/26/5704), such articles will be treated as though released under section 5704(d), due to the penalty provisions in section 5761(c).
(e) Articles described in [paragraph (a)](/current/title-27/section-41.82#p-41.82\(a\)) of this section may not be sold or held for sale for domestic consumption in the United States unless such articles are removed from their export packaging and repackaged by the original manufacturer into new packaging that does not contain an export label. The new packages, marks and notices must conform to the requirements of [27 CFR part 40](/current/title-27/part-40).
(f) The provisions of this section shall apply to articles labeled for export even if the packaging or the appearance of such packaging to the consumer of such articles has been modified or altered by a person other than the original manufacturer so as to remove or conceal or attempt to remove or conceal (including by placement of a sticker over) any export label.
(g) For purposes of this section, an article is labeled for export or contains an export label if it bears the mark, label, or notice required by [§ 44.185 of this chapter](/current/title-27/section-44.185).
(h) For purposes of this section, references to exportation shall be treated as including a reference to shipment to the Commonwealth of Puerto Rico.
(i) The provisions of this section do not apply to any person who, when entering U.S. manufactured tobacco products labeled for export under [parts 40](/current/title-27/part-40) and [44 of this chapter](/current/title-27/part-44), claims and is granted an exemption from duty and tax for such products under chapter 98 of the Harmonized Tariff Schedule of the United States. The quantity of tobacco products entered may not exceed the quantity limit imposed on such products under the applicable tariff provision. A traveler claiming an exemption under this subsection upon arrival at the border may voluntarily relinquish to U.S. Customs and Border Protection at the time of entry any excess of such quantity without incurring the penalty under section [§ 41.83](/current/title-27/section-41.83).
(j) For civil penalties and forfeiture provisions related to violations of this section, see [§ 41.83](/current/title-27/section-41.83). For a criminal penalty applicable to any violation of this section see [26 U.S.C. 5762(b)](https://www.govinfo.gov/link/uscode/26/5762).
\[T.D. ATF-465, [66 FR 45618](https://www.federalregister.gov/citation/66-FR-45618), Aug. 29, 2001. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004; T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 41.83 Penalties and forfeiture for products labeled or shipped for export.
Except for the return of exported products that are specifically authorized under [§ 41.82(b)](/current/title-27/section-41.82#p-41.82\(b\)) and [(c)](/current/title-27/section-41.82#p-41.82\(c\)):
(a) Every person who sells, relands, or receives within the jurisdiction of the United States any tobacco products or cigarette papers or tubes which have been labeled or shipped for exportation under [parts 40](/current/title-27/part-40) and [44 of this chapter](/current/title-27/part-44);
(b) Every person who sells or receives such relanded tobacco products or cigarette papers or tubes; and,
(c) Every person who aids or abets in such selling, relanding, or receiving, shall, in addition to the tax and any other penalty provided for in title 26 U.S.C., be liable for a penalty equal to the greater of \$1,000 or 5 times the amount of the tax imposed by title 26 U.S.C. All tobacco products and cigarette papers and tubes relanded within the jurisdiction of the United States shall be forfeited to the United States and destroyed. All vessels, vehicles and aircraft used in such relanding or in removing such products, papers, and tubes from the place where relanded, shall be forfeited to the United States.
(d) The provisions of this section do not apply to any person who, when entering U.S. manufactured tobacco products labeled for export, claims and is granted an exemption from duty and tax for such products under chapter 98 of the Harmonized Tariff Schedule of the United States. The quantity of tobacco products entered may not exceed the quantity limit imposed on such products under the applicable tariff provision. A traveler claiming an exemption under this subsection upon arrival at the border may voluntarily relinquish to U.S. Customs and Border Protection at the time of entry any excess of such quantity without incurring the penalty under this section.
(e) For purposes of this section, references to exportation shall be treated as including a reference to shipment to the Commonwealth of Puerto Rico.
\[T.D. ATF-465, [66 FR 45619](https://www.federalregister.gov/citation/66-FR-45619), Aug. 29, 2001. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004; T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 41.84 Entry for warehousing.
(a) *General.* Except as provided in [paragraph (b)](/current/title-27/section-41.84#p-41.84\(b\)) of this section, in the case of an entry for warehousing (that is, tobacco products, cigarette papers, or cigarette tubes transferred directly to a customs bonded warehouse or foreign trade zone), the last day for payment of the tax shall not be later than the 14th day after the last day of the semimonthly period during which the products are removed from the first such warehouse, even if the tobacco products, cigarette papers, or cigarette tubes are removed from that customs bonded warehouse or foreign trade zone for transfer to another customs bonded warehouse or foreign trade zone.
(b) *Entry for warehousing of products destined for export.* [Paragraph (a)](/current/title-27/section-41.84#p-41.84\(a\)) of this section does not apply to tobacco products, cigarette papers, or cigarette tubes entered for warehousing and then removed for transfer to another custom bonded warehouse or foreign trade zone that are shown to the satisfaction of the Secretary to be destined for export.
([26 U.S.C. 5703(b)(2)(B)(ii)](https://www.govinfo.gov/link/uscode/26/5703), (iii), and (iv))
\[[81 FR 94209](https://www.federalregister.gov/citation/81-FR-94209), Dec. 22, 2016]
#### § 41.85 Release from customs custody of imported tobacco products or cigarette papers or tubes.
(a) *General.* This section applies only to tobacco products and cigarette papers and tubes that are not put up into packages in which they will be sold to consumers. Subject to the requirements of [§ 41.86](/current/title-27/section-41.86), the Port Director of Customs or authorized customs officer may release the following articles from customs custody without payment of internal revenue tax under the internal revenue bond of the manufacturer or export warehouse proprietor to whom the articles are released:
(1) Tobacco products manufactured in a foreign country, the Virgin Islands, or a possession of the United States, for transfer to the bonded premises of a manufacturer of tobacco products or to the bonded premises of an export warehouse proprietor; and
(2) Cigarette papers and tubes manufactured in a foreign country, the Virgin Islands, or a possession of the United States, for transfer to the factory of manufacturer of cigarette papers and tubes, to an export warehouse proprietor, or to a manufacturer of tobacco products solely for use in the manufacture of cigarettes.
(b) *Products from the Virgin Islands.* In addition to the documentation required by [§ 41.86](/current/title-27/section-41.86), in the case of products exported from the Virgin Islands the manufacturer also must file an extension of coverage of the internal revenue bond on TTB F 5000.18, and receive a notice of approval from the appropriate TTB officer, in order to obtain release under [paragraph (a)(1)](/current/title-27/section-41.85#p-41.85\(a\)\(1\)) of this section. The extension of coverage must be executed by the principal and the surety and must be in the following form:
“Whereas the purpose of this extension is to bind the obligors for the purpose of the tax imposed by [26 U.S.C. 7652(b)](https://www.govinfo.gov/link/uscode/26/7652), on tobacco products and cigarette papers and tubes exported from the Virgin Islands and removed from customs custody in the United States without payment of internal revenue tax, for delivery to the principal on said bond.”
“Now, therefore, the said bond is further specifically conditioned that the principal named therein must pay all taxes imposed by [26 U.S.C. 7652(b)](https://www.govinfo.gov/link/uscode/26/7652) plus penalties, if any, and interest, for which he may become liable with respect to these products exported from the Virgin Islands and removed from customs custody in the United States without payment of internal revenue tax thereon, and must comply with all provisions of law and regulations with respect thereto.”
(c) *Receipt by manufacturer.* Articles received into the factory of a manufacturer under this section are subject to the requirements of [part 40 of this chapter](/current/title-27/part-40).
\[[78 FR 38569](https://www.federalregister.gov/citation/78-FR-38569), June 27, 2013]
#### § 41.85a Release from customs custody of returned articles.
(a) Domestically manufactured tobacco products (classifiable under item 9801.00.80 of the Harmonized Tariff Schedule of the United States, [19 U.S.C. 1202](https://www.govinfo.gov/link/uscode/19/1202)) exported from and returned to the United States without change to the product or the shipping container may be released from customs custody in the United States, under the bond of the original manufacturer or of the export warehouse proprietor who has been authorized by the original manufacturer (see [§ 41.82](/current/title-27/section-41.82)), without payment of that part of the duty attributable to internal revenue tax, for delivery to the bonded premises of the original tobacco products manufacturer or to the bonded premises of the export warehouse proprietor.
(b) Domestically manufactured cigarette papers and tubes (classifiable under item 9801.00.80 of the Harmonized Tariff Schedule of the United States, [19 U.S.C. 1202](https://www.govinfo.gov/link/uscode/19/1202)) exported from and returned to the United States without change to the product or the shipping container may be released from customs custody in the United States, without payment of that part of the duty attributable to internal revenue tax, for delivery to the bonded premises of the original manufacturer of the cigarette papers and tubes or an export warehouse proprietor authorized by the original manufacturer to receive such products.
(c) Releases under this section must be in accordance with the procedures set forth in [§ 41.86](/current/title-27/section-41.86). Once released, the tobacco products and cigarette papers and tubes are subject to the tax and other provisions of [26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201) and, as applicable, to the regulations in [part 40 of this chapter](/current/title-27/part-40) as if they had not been exported or otherwise removed from internal revenue bond.
\[[78 FR 38569](https://www.federalregister.gov/citation/78-FR-38569), June 27, 2013]
#### § 41.86 Entry process for releases without payment of tax.
(a)
(1) *General.* Except as provided in [paragraph (c)](/current/title-27/section-41.86#p-41.86\(c\)) of this section, in order for tobacco products or cigarette papers or tubes to be released from customs custody without payment of tax under internal revenue bond, as provided in [26 U.S.C. 5704(c)](https://www.govinfo.gov/link/uscode/26/5704) or [(d)](https://www.govinfo.gov/link/uscode/26/5704), the information required by this paragraph must be filed electronically with U.S. Customs and Border Protection (CBP). The information must be filed with CBP at the time of filing the entry or entry summary, as appropriate, and it must be filed along with any other information that is required by CBP for purposes of determining and collecting the Federal excise tax and administering the provisions of the Internal Revenue Code. Any information required under [paragraph (a)(2)](/current/title-27/section-41.86#p-41.86\(a\)\(2\)) of this section that is submitted to CBP as part of the entry or entry summary for purposes of meeting CBP requirements will also satisfy the requirements of this section. Regardless of the method of filing, the importer must retain as a record the information required by this section, any information provided to CBP for CBP purposes, and any supporting documentation and such records must be available for inspection upon request by the appropriate TTB officer or a customs officer.
(2) *Information required.* The manufacturer of tobacco products or cigarette papers or tubes or export warehouse proprietor who wishes to obtain the release of tobacco products or cigarette papers or tubes as described in [paragraph (a)(1)](/current/title-27/section-41.86#p-41.86\(a\)\(1\)) of this section must provide the following information, as applicable:
(i) The number of the permit issued under [27 CFR part 40](/current/title-27/part-40) to the manufacturer of tobacco products or export warehouse proprietor, or the TTB-assigned number of the manufacturer of cigarette papers or tubes, to whom the products are shipped or consigned;
(ii) The employer identification number (EIN), assigned by the Internal Revenue Service, of the manufacturer of tobacco products, the manufacturer of cigarette papers or tubes, or the export warehouse proprietor to whom the products are shipped or consigned;
(iii) The name and address of the ultimate consignee, consistent with the name and address on the permit issued under [part 40 of this chapter](/current/title-27/part-40);
(iv) For tobacco products, the number of the permit, issued under [subpart K of this part](/current/title-27/part-41/subpart-K), of the importer;
(v) For tobacco products, the employer identification number (EIN) assigned to the importer by the Internal Revenue Service and provided to TTB by the importer on its permit application to TTB on TTB Form 5230.4;
(vi) A description of the product consistent with the tax classification of the product under the Internal Revenue Code as described in [§ 41.81](/current/title-27/section-41.81) (for example, “large cigars”); and
(vii) The quantity of the product for Federal excise tax purposes, by sticks or by pounds and ounces (or kilograms and grams), as applicable.
(b) *Releases without payment of tax* —
(1) *Tobacco products or cigarette papers or tubes put up in packages.* Tobacco products or cigarette papers or tubes put up in packages, as defined at [§ 41.11](/current/title-27/section-41.11), may be released without payment of tax only for delivery to the proprietor of an export warehouse (as provided in [26 U.S.C. 5704(c)](https://www.govinfo.gov/link/uscode/26/5704)) or, if classified under chapter 98, subchapter I of the Harmonized Tariff Schedule of the United States (relating to duty on certain articles exported and returned), for delivery to the original manufacturer of such tobacco products or cigarette papers or tubes or to the proprietor of an export warehouse authorized by such manufacturer to receive them (as provided in [26 U.S.C. 5704(d)](https://www.govinfo.gov/link/uscode/26/5704)). If the information required in [paragraph (a)(2)(i)](/current/title-27/section-41.86#p-41.86\(a\)\(2\)\(i\)) through [(iii)](/current/title-27/section-41.86#p-41.86\(a\)\(2\)\(iii\)) of this section is not filed with the entry or entry summary, as appropriate, or, if the information required in [paragraph (c)](/current/title-27/section-41.86#p-41.86\(c\)) of this section is not made available to CBP upon request, the tobacco products, cigarette papers, or cigarette tubes are not eligible for release from customs custody without payment of tax, and no person may remove such products from customs custody without payment of tax.
(2) *Tobacco products or cigarette papers or tubes not put up in packages.* Tobacco products or cigarette papers or tubes not put up in packages, as defined at [§ 41.11](/current/title-27/section-41.11), may not be released from customs custody subject to tax, and no person may obtain release of such products from customs custody. Tobacco products or cigarette papers or tubes not put up on packages may be released from customs custody without payment of tax for delivery to the proprietor of an export warehouse, or to a manufacturer of tobacco products or cigarette papers or tubes, as provided in [26 U.S.C. 5704(c)](https://www.govinfo.gov/link/uscode/26/5704). As a result, if the information required in [paragraphs (a)(2)(i)](/current/title-27/section-41.86#p-41.86\(a\)\(2\)\(i\)) through [(iii)](/current/title-27/section-41.86#p-41.86\(a\)\(2\)\(iii\)) of this section is not filed with the entry or entry summary, as appropriate, or, if the information required in [paragraph (c)](/current/title-27/section-41.86#p-41.86\(c\)) of this section is not made available to CBP upon request, tobacco products or cigarette papers or tubes not put up in packages are not eligible for release from customs custody for consumption, and no person may remove such product from customs custody.
(c) *Filing on paper.* A manufacturer or export warehouse proprietor who wants to obtain the release of tobacco products or cigarette papers and tubes from customs custody without payment of tax under its internal revenue bond, and who does not file electronically, must prepare a notice of release on TTB F 5200.11 and submit the form to the appropriate TTB officer in accordance with the instructions on the form. The appropriate TTB officer will certify on the TTB F 5200.11 that the manufacturer or export warehouse proprietor has TTB authorization to receive the products. No one filing on paper may obtain release of the products under this section until they have received the TTB F 5200.11 certified by the appropriate TTB officer. The manufacturer or export warehouse proprietor must have possession of the TTB F 5200.11, bearing TTB certification, at the time the products are released from customs custody and must make the form available to a customs officer upon request at such time. After release of the products, the TTB F 5200.11 must be retained by the manufacturer or export warehouse proprietor and made available to the appropriate TTB officer or a customs officer upon request.
(Approved by the Office of Management and Budget under control numbers 1513-0025 and 1513-0064)
\[[81 FR 94209](https://www.federalregister.gov/citation/81-FR-94209), Dec. 22, 2016]
## Subpart G—Puerto Rican Tobacco Products and Cigarette Papers and Tubes, Brought Into the United States
#### § 41.101 General.
(a) Tobacco products and cigarette papers and tubes manufactured in Puerto Rico which are brought into the United States and withdrawn for consumption or sale are subject to the tax imposed by [26 U.S.C. 7652(a)](https://www.govinfo.gov/link/uscode/26/7652), at the rates set forth in [26 U.S.C. 5701](https://www.govinfo.gov/link/uscode/26/5701).
(b) The excise taxes collected on tobacco products and cigarette papers and tubes manufactured in Puerto Rico are covered into the Treasury of Puerto Rico. Tobacco products and cigarette papers and tubes are considered as manufactured in Puerto Rico for purposes of [26 U.S.C. 7652(a)(3)](https://www.govinfo.gov/link/uscode/26/7652) if the sum of the cost or value of the materials produced in Puerto Rico, plus the direct costs of processing operations performed in Puerto Rico, equals or exceeds 50 percent of the value of the product when it is brought into the United States.
(c) The excise tax on tobacco products and cigarette papers and tubes of Puerto Rican manufacture may be prepaid in Puerto Rico prior to shipment of such articles to the United States in accordance with [§ 41.105](/current/title-27/section-41.105). In the case of tobacco products such tax may be paid in Puerto Rico on the basis of a semi-monthly return in accordance with the applicable provisions of this subpart.
(68A Stat. 907, as amended, 72 Stat. 1417, 1418, as amended ([26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652), [5703](https://www.govinfo.gov/link/uscode/26/5703), [5704](https://www.govinfo.gov/link/uscode/26/5704)))
\[T.D. ATF-206, [50 FR 15888](https://www.federalregister.gov/citation/50-FR-15888), Apr. 23, 1985, as amended by T.D. ATF-232, [51 FR 28085](https://www.federalregister.gov/citation/51-FR-28085), Aug. 5, 1986; T.D. ATF-243, [52 FR 43194](https://www.federalregister.gov/citation/52-FR-43194), Dec. 1, 1986; T.D. ATF-246, [52 FR 669](https://www.federalregister.gov/citation/52-FR-669), Jan. 8, 1987; T.D. ATF-422, [64 FR 71950](https://www.federalregister.gov/citation/64-FR-71950), Dec. 22, 1999. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004]
### Prepayment of Tax in Puerto Rico on Tobacco products and Cigarette Papers and Tubes
#### § 41.105 Prepayment of tax.
To prepay, in Puerto Rico, the internal revenue tax imposed by [26 U.S.C. 7652(a)](https://www.govinfo.gov/link/uscode/26/7652) on tobacco products and cigarette papers and tubes of Puerto Rican manufacture to be shipped to the United States, the shipper must file, or cause to be filed, a tax return, TTB F 5000.25, with full remittance of the tax which will become due on those products.
(Approved by the Office of Management and Budget under control number 1513-0090)
\[T.D. ATF-444, [73 FR 16756](https://www.federalregister.gov/citation/73-FR-16756), Mar. 31, 2008]
#### § 41.106 Record of shipment by taxpayer.
(a) *Shipments other than noncommercial mail shipments.* The taxpayer must ensure that the tax has been prepaid on the tobacco products and cigarette papers and tubes in each shipment. The taxpayer must identify the tobacco products or cigarette papers or tubes by including on the bill of lading or similar record accompanying the shipment the following information:
(1) The marks and numbers on the shipping containers;
(2) The number of containers to be shipped;
(3) The kind of taxable article(s) to be shipped and the rate of tax applicable to each kind of article, as specified in [§§ 41.30](/current/title-27/section-41.30) through [41.35](/current/title-27/section-41.35);
(4) The number of small cigarettes, large cigarettes, or small cigars to be shipped;
(5) The number and total sale price of large cigars having a sale price of not more than $235.294 per thousand before April 1, 2009, or a sale price of not more than $763.222 per thousand on and after April 1, 2009, to be shipped;
(6) The number of large cigars having a sale price of more than $235.294 per thousand before April 1, 2009, or a sale price of more than $763.222 per thousand on and after April 1, 2009, to be shipped;
(7) The pounds and ounces of chewing tobacco or snuff to be shipped;
(8) The pounds and ounces of pipe tobacco or roll-your-own tobacco to be shipped;
(9) The number of cigarette papers or tubes to be shipped;
(10) The amount of the tax paid for each kind of article under this subpart;
(11) The name and address of the consignee in the United States to whom the products are to be shipped; and
(12) A notation identifying the particular TTB F 5000.25 by which the taxes were prepaid.
(b) *Noncommercial mail shipments.* Noncommercial mail shipments of tobacco products and cigarette papers and tubes to the United States are exempt from the requirements of [paragraph (a)](/current/title-27/section-41.106#p-41.106\(a\)) of this section, except that the taxpayer must provide a copy of the TTB F 5000.25 upon the request of an appropriate TTB officer.
(Approved by the Office of Management and Budget under control number 1513-0108)
\[T.D. ATF-444, [73 FR 16757](https://www.federalregister.gov/citation/73-FR-16757), Mar. 31, 2008, as amended by T.D. TTB-75, [74 FR 14485](https://www.federalregister.gov/citation/74-FR-14485), Mar. 31, 2009; T.D. TTB-85, [75 FR 42607](https://www.federalregister.gov/citation/75-FR-42607), July 22, 2010]
#### §§ 41.107-41.108 \[Reserved]
### Deferred Payment of Tax in Puerto Rico on Tobacco Products
#### § 41.109 Bond required for deferred taxpayment.
Where a manufacturer of tobacco products in Puerto Rico desires to defer payment in Puerto Rico of the internal revenue tax imposed by [26 U.S.C. 7652(a)](https://www.govinfo.gov/link/uscode/26/7652), on tobacco products of Puerto Rican manufacture coming into the United States, he shall file a bond, TTB F 5210.12, with the appropriate TTB officer, in accordance with the provisions of this subpart. Such bond shall be conditioned on the payment, at the time and in the manner prescribed in this subpart, of the full amount of tax computed under the provisions of this subpart with respect to tobacco products which are released for shipment to the United States on computation of tax. All taxes which are computed under the provisions of this subpart shall be chargeable against the bond, until such taxes are paid, as provided in [§ 41.112](/current/title-27/section-41.112). The bond shall show the location of the factory from which the tobacco products to which it relates are to be shipped.
\[T.D. 6871, [31 FR 43](https://www.federalregister.gov/citation/31-FR-43), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55855](https://www.federalregister.gov/citation/44-FR-55855), Sept. 28, 1979; T.D. ATF-232, [51 FR 28085](https://www.federalregister.gov/citation/51-FR-28085), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-251, [52 FR 19340](https://www.federalregister.gov/citation/52-FR-19340), May 22, 1987. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004; T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 41.110 Record of tax computation and shipment by bonded manufacturer under deferred taxpayment.
Where tobacco products or cigarette papers or tubes are to be shipped to the United States with deferred taxpayment, the bonded manufacturer must calculate the tax prior to shipment. The tax calculation must conform to the information on the bill of lading or a similar record accompanying the shipment, and the date of completing the bill of lading or similar record accompanying the shipment will be treated as the date of computation of the tax. Tobacco products or cigarette papers or tubes may be shipped to the United States in accordance with the provisions of this section only after computation of the tax. The bill of lading or similar record accompanying the shipment must include the following information:
(a) The marks and numbers on the shipping containers;
(b) The number of containers to be shipped;
(c) The kind of taxable article(s) to be shipped and the rate of tax applicable to each kind of article, as specified in [§§ 41.30](/current/title-27/section-41.30) through [41.35](/current/title-27/section-41.35);
(d) The number of small cigarettes, large cigarettes, or small cigars to be shipped;
(e) The number and total sale price of large cigars having a sale price of not more than $235.294 per thousand before April 1, 2009, or a sale price of not more than $763.222 per thousand on and after April 1, 2009, to be shipped;
(f) The number of large cigars having a sale price of more than $235.294 per thousand before April 1, 2009, or a sale price of more than $763.222 per thousand on and after April 1, 2009, to be shipped;
(g) The pounds and ounces of chewing tobacco or snuff to be shipped;
(h) The pounds and ounces of pipe tobacco or roll-your-own tobacco to be shipped;
(i) The number of cigarette papers or tubes to be shipped;
(j) The amount of the tax to be paid for each kind of article under this subpart; and
(k) The name and address of the consignee in the United States to whom the products are to be shipped.
(Approved by the Office of Management and Budget under control number 1513-0108)
\[T.D. ATF-444, [73 FR 16757](https://www.federalregister.gov/citation/73-FR-16757), Mar. 31, 2008, as amended by T.D. TTB-75, [74 FR 14485](https://www.federalregister.gov/citation/74-FR-14485), Mar. 31, 2009; T.D. TTB-85, [75 FR 42607](https://www.federalregister.gov/citation/75-FR-42607), July 22, 2010]
#### § 41.111 Verification of bond and agreement to pay tax.
(a) *Verification of bond.* Prior to shipment of tobacco products or cigarette papers or tubes to the United States, the manufacturer must verify:
(1) That there is no default in payment of tax chargeable against the manufacturer's bond on TTB F 5210.12; and
(2) That the amount of the manufacturer's bond is sufficient or is in the maximum penal sum to cover the tax that will become due on the shipment.
(b) *Agreement to pay tax.* The shipment of tobacco products or cigarette papers or tubes by the bonded manufacturer serves as an agreement by the manufacturer to pay the tax on that shipment.
\[T.D. ATF-444, [73 FR 16757](https://www.federalregister.gov/citation/73-FR-16757), Mar. 31, 2008, as amended at T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 41.112 Tax return.
The internal revenue taxes imposed by [26 U.S.C. 7652(a)](https://www.govinfo.gov/link/uscode/26/7652), with respect to tobacco products manufactured in Puerto Rico and shipped to the United States on computation of tax under the provisions of this subpart shall be paid on the basis of a semimonthly tax return. The bonded manufacturer of such products shall prepare TTB Form 5000.25 in duplicate, and file the original with the appropriate TTB officer, and maintain one copy for the file for each semimonthly return period. The bonded manufacturer shall execute the return, TTB Form 5000.25, under the penalties of perjury. He shall file a return for each return period at the time specified in [§ 41.114](/current/title-27/section-41.114), regardless of whether tax is due for that return period. However, where the appropriate TTB officer, grants specific authorization, the bonded manufacturer need not file a tax return during the term of such authorization for any period in which tax liability was not incurred under the provisions of this subpart.
(Approved by the Office of Management and Budget under control number 1512-0497)
\[T.D. ATF-40, [42 FR 5006](https://www.federalregister.gov/citation/42-FR-5006), Jan. 26, 1977, as amended by T.D. ATF-125, [48 FR 2123](https://www.federalregister.gov/citation/48-FR-2123), Jan. 18, 1983; T.D. ATF-232, [51 FR 28086](https://www.federalregister.gov/citation/51-FR-28086), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-251, [52 FR 19340](https://www.federalregister.gov/citation/52-FR-19340), May 22, 1987; T.D. ATF-277, [53 FR 45269](https://www.federalregister.gov/citation/53-FR-45269), Nov. 9, 1988. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004]
#### § 41.113 Return periods.
Except as otherwise provided in [§ 41.114](/current/title-27/section-41.114), the periods to be covered in the semimonthly tax returns run from the 1st day of the month through the 15th day of that month, and from the 16th day of the month through the last day of that month.
\[T.D. TTB-89, [76 FR 3515](https://www.federalregister.gov/citation/76-FR-3515), Jan. 20, 2011]
#### § 41.114 Time for filing.
(a) *General rule.* Semimonthly tax returns under this subpart shall be filed by the bonded manufacturer, for each return period, not later than the 14th day after the last day of the return period, except as provided by [paragraph (b)](/current/title-27/section-41.114#p-41.114\(b\)) of this section. The tax shall be paid in full by remittance at the time the return is filed as prescribed in [§ 41.115](/current/title-27/section-41.115) or [§ 41.115a](/current/title-27/section-41.115a).
(b) *Special rule for taxes due for the month of September.*
(1) *Division of second semimonthly period.*
(i) *General.* Except as otherwise provided in [paragraph (b)(1)(ii)](/current/title-27/section-41.114#p-41.114\(b\)\(1\)\(ii\)) of this section, the second semimonthly period for the month of September is divided into two payment periods, from the 16th day through the 26th day, and from the 27th day through the 30th day. The bonded manufacturer shall file a return on TTB F 5000.25, and make remittance, for the period September 16-26, no later than September 29. The bonded manufacturer shall file a return on TTB F 5000.25, and make remittance, for the period September 27-30, no later than October 14.
(ii) *Taxpayment not by electronic fund transfer.* In the case of taxes for which remittance by electronic fund transfer (EFT) is not required by [§ 41.115a](/current/title-27/section-41.115a), the second semimonthly period of September is divided into two payment periods, from the 16th day through the 25th day, and from the 26th day through the 30th day. The bonded manufacturer shall file a return on TTB F 5000.25, and make remittance, for the period September 16-25, no later than September 28. The bonded manufacturer shall file a return on TTB F 5000.25, and make remittance, for the period September 26-30, no later than October 14.
(2) *Amount of payment—Safe harbor rule.*
(i) *General.* Taxpayers are considered to have met the requirements of [paragraph (b)(1)(i)](/current/title-27/section-41.114#p-41.114\(b\)\(1\)\(i\)) of this section if the amount paid no later than September 29 is not less than 11/15ths (73.3 percent) of the tax liability incurred for the semimonthly period beginning on September 1 and ending on September 15, and if any underpayment of tax is paid by October 14.
(ii) *Taxpayment not by EFT.* Taxpayers are considered to have met the requirements of [paragraph (b)(1)(ii)](/current/title-27/section-41.114#p-41.114\(b\)\(1\)\(ii\)) of this section if the amount paid no later than September 28 is not less than 2/3rds (66.7 percent) of the tax liability incurred for the semimonthly period beginning on September 1 and ending on September 15, and if any underpayment of tax is paid by October 14.
(3) *Weekend or holiday due date.* If the required taxpayment due date for the period September 16-25 or September 16-26, as applicable, falls on a Saturday or legal holiday, the return and remittance are due on the immediately preceding day. If the required due date falls on a Sunday, the return and remittance are due on the immediately following day.
(c) *Postmark.* If the return, and remittance as the case may be, are delivered by U.S. Mail to the appropriate TTB officer, the date of the official postmark of the U.S. Postal Service stamped on the cover in which the return, and remittance as the case may be, were mailed shall be treated as the date of delivery.
(d) *Weekends and holidays.* Except as otherwise provided in [paragraph (b)(3)](/current/title-27/section-41.114#p-41.114\(b\)\(3\)) of this section, if the due date falls on a Saturday, Sunday, or legal holiday, the return and remittance are due on the immediately preceding day that is not a Saturday, Sunday, or legal holiday.
(Approved by the Office of Management and Budget under control number 1512-0467)
\[T.D. ATF-246, [52 FR 669](https://www.federalregister.gov/citation/52-FR-669), Jan. 8, 1987, as amended by T.D. ATF-251, [52 FR 19340](https://www.federalregister.gov/citation/52-FR-19340), May 22, 1987; T.D. ATF-365, [60 FR 33675](https://www.federalregister.gov/citation/60-FR-33675), June 28, 1995; T.D. ATF-444, [66 FR 13851](https://www.federalregister.gov/citation/66-FR-13851), Mar. 8, 2001. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004; T.D. TTB-89, [76 FR 3515](https://www.federalregister.gov/citation/76-FR-3515), Jan. 20, 2011]
#### § 41.114a Qualification for extended deferral.
Note:
This section applies only to removals made before January 1, 1983.
(a) *Bonded manufacturers with bonds executed before September 1, 1973.* Bonded manufacturers with bonds on Form 2986 executed before September 1, 1973, who desire to file returns under this subpart with benefit of the extended deferral permitted by [§ 41.114](/current/title-27/section-41.114) shall file with the appropriate TTB officer an extension of coverage of bond on Form 2105. Such extension of coverage shall identify the particular bond to which it applies and shall contain a statement of purpose as follows:
To continue in effect said bond (including all extensions or limitations of terms and conditions previously consented to and approved) notwithstanding that the time for payment of the tax may be deferred by the extended deferral period permitted by regulations in [27 CFR 41.114](/current/title-27/section-41.114).
If the bond on Form 2986 is in an amount insufficient to cover an extended deferral period, according to the requirements of [§ 41.121](/current/title-27/section-41.121), the bonded manufacturer must either file a new bond or file a strengthening bond to increase the total amount of the bonds then in force to a sufficient amount.
(b) *Bonded manufacturers with bonds executed after September 1, 1973.* Bonded manufacturers operating under original or superseding bonds executed after September 1, 1973, are automatically qualified for the extended deferral permitted by [§ 41.114](/current/title-27/section-41.114) (unless found in default as provided in [§ 41.116](/current/title-27/section-41.116)). Such bonds must be executed in an amount sufficient to cover an extended deferral period, according to the requirements of [§ 41.121](/current/title-27/section-41.121).
(c) *Commencement of extended deferral.* Bonded manufacturers may file returns with benefit of extended deferral only after the applicable bonds and extensions of coverage required by this section have been filed with and approved by the appropriate TTB officer.
(68A Stat. 847, as amended, 907, as amended; [26 U.S.C. 7101](https://www.govinfo.gov/link/uscode/26/7101), [7652(a)](https://www.govinfo.gov/link/uscode/26/7652); [26 U.S.C. 7805](https://www.govinfo.gov/link/uscode/26/7805))
\[T.D. ATF-5, [38 FR 19688](https://www.federalregister.gov/citation/38-FR-19688), July 23, 1973. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55855](https://www.federalregister.gov/citation/44-FR-55855), Sept. 28, 1979; T.D. ATF-125, [48 FR 2123](https://www.federalregister.gov/citation/48-FR-2123), Jan. 18, 1983; T.D. ATF-251, [52 FR 19340](https://www.federalregister.gov/citation/52-FR-19340), May 22, 1987. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004; T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 41.115 Remittance with return.
Remittance of the full amount of internal revenue tax computed during the return period shall accompany the return, except as prescribed in [§ 41.115a](/current/title-27/section-41.115a). Such remittance may be in any form the appropriate TTB officer is authorized to accept under the provisions of [§ 70.61 of this chapter](/current/title-27/section-70.61) (Payment by check or money order) and which is acceptable to that officer. In paying the tax, a fractional part of a cent shall be disregarded unless it amounts to one-half cent or more, in which case it shall be increased to one cent.
(Aug. 16, 1954, Ch. 736, 68A Stat. 778 ([26 U.S.C. 6313](https://www.govinfo.gov/link/uscode/26/6313)) Aug. 16, 1954, ch. 736, 68A Stat. 775 ([26 U.S.C. 6301](https://www.govinfo.gov/link/uscode/26/6301)); June 29, 1956, ch. 462, 70 Stat. 391 ([26 U.S.C. 6301](https://www.govinfo.gov/link/uscode/26/6301)))
\[[26 FR 8195](https://www.federalregister.gov/citation/26-FR-8195), Aug. 31, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55855](https://www.federalregister.gov/citation/44-FR-55855), Sept. 28, 1979; T.D. ATF-77, [46 FR 3009](https://www.federalregister.gov/citation/46-FR-3009), Jan. 13, 1981; T.D. ATF-251, [52 FR 19340](https://www.federalregister.gov/citation/52-FR-19340), May 22, 1987; T.D. ATF-301, [55 FR 47658](https://www.federalregister.gov/citation/55-FR-47658), Nov. 14, 1990. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004]
#### § 41.115a Payment of tax by electronic fund transfer.
(a) *General.*
(1) Each taxpayer who was liable, during a calendar year, for a gross amount equal to or exceeding five million dollars in taxes on tobacco products, cigarette papers, and cigarette tubes combining tax liabilities incurred under this [part and part 40 of this chapter](/current/title-27/part-40), shall use a commercial bank in making payment by electronic fund transfer (EFT) of taxes on tobacco products, cigarette papers, and cigarette tubes during the succeeding calendar year. Payment of taxes on tobacco products, cigarette papers, and cigarette tubes by cash, check, or money order, as described in [§ 41.115](/current/title-27/section-41.115), is not authorized for a taxpayer who is required, by this section, to make remittances by EFT. For purposes of this section, the dollar amount of tax liability is defined as the gross tax liability of all taxes which are paid in accordance with this subpart, taxable withdrawals from premises in the United States, and importations during the calendar year, without regard to any drawbacks, credits, or refunds, for all premises from which such activities are conducted by the taxpayer. Overpayments are not taken into account in summarizing the gross tax liability.
(2) For the purposes of this section, a taxpayer includes a controlled group of corporations, as defined in [26 U.S.C. 1563](https://www.govinfo.gov/link/uscode/26/1563), and implementing regulations in [26 CFR 1.1563-1](/current/title-26/section-1.1563-1) through [1.1563-4](/current/title-26/section-1.1563-4), except that the words “at least 80 percent” shall be replaced by the words “more than 50 percent” in each place it appears in subsection (a) of [26 U.S.C. 1563](https://www.govinfo.gov/link/uscode/26/1563), as well as in the implementing regulations. Also, the rules for a “controlled group of corporations” apply in a similar fashion to groups which include partnerships and/or sole proprietorships. If one entity maintains more than 50% control over a group consisting of corporations and one, or more, partnerships and/or sole proprietorships, all of the members of the controlled group are one taxpayer for the purpose of determining who is required to make remittances by EFT.
(3) A taxpayer who is required by this section to make remittances by EFT, shall make a separate EFT remittance and file a separate tax return for each factory which tobacco products, or cigarette papers, or cigarette tubes are withdrawn upon determination of tax.
(b) *Requirements.*
(1) On or before January 10 of each calendar year, except for a taxpayer already remitting the tax by EFT, each taxpayer who was liable for a gross amount equal to or exceeding five million dollars in taxes on tobacco products, cigarette papers, and cigarette tubes combining tax liabilities incurred under this [part and part 40 of this chapter](/current/title-27/part-40) during the previous calendar year, shall notify, in writing, the appropriate TTB officer. The notice shall be an agreement to make remittances by EFT.
(2) For each return filed in accordance with this part, the taxpayer shall direct the taxpayer's bank to make an electronic fund transfer in the amount of the taxpayment to the Treasury Account as provided in [paragraph (e)](/current/title-27/section-41.115a#p-41.115a\(e\)) of this section. The request shall be made to the bank early enough for the transfer to be made to the Treasury Account by no later than the close of business on the last day for filing the return, prescribed in [§ 41.105](/current/title-27/section-41.105) or [§ 41.114](/current/title-27/section-41.114). The request shall take into account any time limit established by the bank.
(3) If a taxpayer was liable for less than five million dollars in taxes on tobacco products, cigarette papers, and cigarette tubes during the preceding calendar year, the taxpayer may choose either to continue remitting the tax as provided in this section or to remit the tax with the return as prescribed by [§ 41.115](/current/title-27/section-41.115). On the first return on which the taxpayer chooses to discontinue remitting the tax by EFT and to begin remitting the tax with the tax return, the taxpayer shall notify the appropriate TTB officer by attaching a written notification to the tax return, stating that no taxes are due by EFT, because the tax liability during the preceding calendar year was less than five million dollars, and that the remittance shall be filed with the tax return.
(c) *Remittance.*
(1) Each taxpayer shall show on the tax return, information about remitting the tax for that return by EFT and shall file the return with the appropriate TTB officer.
(2) Remittances shall be considered as made when the taxpayment by electronic fund transfer is received by the Treasury Account. For purposes of this section, a taxpayment by electronic fund transfer shall be considered as received by the Treasury Account when it is paid to a Federal Reserve Bank.
(3) When the taxpayer directs the bank to effect an electronic fund transfer message as required by [paragraph (b)(2)](/current/title-27/section-41.115a#p-41.115a\(b\)\(2\)) of this section, any transfer data record furnished to the taxpayer, through normal banking procedures, will serve as the record of payment, and shall be retained as part of required records.
(d) *Failure to make a taxpayment by EFT.* The taxpayer is subject to a penalty imposed by [26 U.S.C. 5761](https://www.govinfo.gov/link/uscode/26/5761), [6651](https://www.govinfo.gov/link/uscode/26/6651), or [6656](https://www.govinfo.gov/link/uscode/26/6656), as applicable, for failure to make a taxpayment by EFT on or before the close of business on the prescribed last day for filing.
(e) *Procedure.* Upon the notification required under [paragraph (b)(1)](/current/title-27/section-41.115a#p-41.115a\(b\)\(1\)) of this section, the appropriate TTB officer will issue to the taxpayer a TTB Procedure entitled, Payment of Tax by Electronic Fund Transfer (EFT). This publication outlines the procedure a taxpayer must follow when preparing returns and EFT remittances under this part.
(Approved by the Office of Management and Budget under Control Number 1512-0457)
(Act of August 16, 1954, 68A Stat. 775, as amended ([26 U.S.C. 6302](https://www.govinfo.gov/link/uscode/26/6302)); sec. 202, Pub. L. 85-859, 72 Stat. 1417, as amended ([26 U.S.C. 5703](https://www.govinfo.gov/link/uscode/26/5703)))
\[T.D. ATF-185, [49 FR 37583](https://www.federalregister.gov/citation/49-FR-37583), Sept. 25, 1984]
#### Editorial Note:
For Federal Register citations affecting [§ 41.115a](/current/title-27/section-41.115a), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
#### § 41.116 Default.
Where a check or money order tendered with a semimonthly return for payment of internal revenue tax under the provisions of this subpart is not paid on presentment, where a bonded manufacturer fails to remit with the semimonthly return the full amount of tax due thereunder, or where a bonded manufacturer is otherwise in default in payment of tax under the provisions of this subpart, he shall not ship tobacco products to the United States on computation of tax, until the appropriate TTB officer finds that the revenue will not be jeopardized by deferred payment of tax under the provisions of this subpart.
\[T.D. 6871, [31 FR 44](https://www.federalregister.gov/citation/31-FR-44), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28086](https://www.federalregister.gov/citation/51-FR-28086), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-251, [52 FR 19340](https://www.federalregister.gov/citation/52-FR-19340), May 22, 1987. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004]
#### §§ 41.117-41.118 \[Reserved]
#### § 41.119 Corporate surety.
(a) Surety bonds, required under the provisions of this subpart, may be given only with corporate sureties holding certificates of authority from the Secretary of the Treasury as acceptable sureties on Federal bonds. Limitations concerning corporate sureties are prescribed by the Secretary in the current revision of Treasury Department Circular 570 (Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies). The surety shall have no interest whatever in the business covered by the bond.
(b) Treasury Department Circular 570 is published in the Federal Register annually on the first business day in July, and supplemental changes are published periodically thereafter (see *[https://www.federalregister.gov](https://www.federalregister.gov)*). The most recent circular and any supplemental changes to it may be viewed on the Bureau of the Fiscal Service website (see *[https://fiscal.treasury.gov](https://fiscal.treasury.gov)*).
\[T.D. ATF-92, [46 FR 46922](https://www.federalregister.gov/citation/46-FR-46922), Sept. 23, 1981, as amended by T.D. TTB-196, [89 FR 87948](https://www.federalregister.gov/citation/89-FR-87948), Nov. 6, 2024]
#### § 41.120 Deposit of securities in lieu of corporate surety.
In lieu of corporate surety, the manufacturer of tobacco products in Puerto Rico may pledge and deposit, as security for his bond, securities which are transferrable and are guaranteed both as to interest and as to principal by the United States, in accordance with the provisions of [31 CFR part 225](/current/title-31/part-225).
(61 Stat. 650; [6 U.S.C. 15](https://www.govinfo.gov/link/uscode/6/15))
\[T.D. 6871, [31 FR 44](https://www.federalregister.gov/citation/31-FR-44), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28086](https://www.federalregister.gov/citation/51-FR-28086), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 41.121 Amount and account of bond.
(a) *Bond amount.* Except for the maximum and minimum amounts stated in this paragraph, the total amount of the bond or bonds required under this subpart must be in an amount not less than the amount of unpaid tax chargeable at any one time against the bond or bonds. The maximum and minimum amounts of such bond or bonds are as follows:
| Taxable article | Bond amount maximum (in dollars) | Bond amount minimum (in dollars) |
| ----------------------------------------------------- | -------------------------------- | -------------------------------- |
| (1) Cigarettes | 250,000 | 1,000 |
| (2) Any combination of taxable articles | 250,000 | 1,000 |
| (3) One kind of taxable article other than cigarettes | 150,000 | 1,000 |
(b) *Bond account.* Where the amount of a bonded manufacturer's bond is less than the maximum amount prescribed in [paragraph (a)](/current/title-27/section-41.121#p-41.121\(a\)) of this section, the bonded manufacturer must maintain an account reflecting all outstanding taxes for which the manufacturer's bond is chargeable. A manufacturer must debit that account with the amount of tax that was agreed to be paid under [§ 41.111](/current/title-27/section-41.111) or that is otherwise chargeable against the bond and then must credit the account for the amount paid on TTB F 5000.25 or other TTB-prescribed document, at the time it is filed. A manufacturer who will defer payment of tax for a shipment of tobacco products or cigarette papers or tubes under this subpart must have sufficient credit in this account to cover the taxes prior to making the shipment to the United States.
(Approved by the Office of Management and Budget under control number 1513-0108)
\[T.D. ATF-444, [73 FR 16757](https://www.federalregister.gov/citation/73-FR-16757), Mar. 31, 2008]
#### § 41.122 Strengthening bond.
Where the amount of any bond is no longer sufficient under the provisions of [§ 41.121](/current/title-27/section-41.121), the bonded manufacturer shall immediately file a strengthening bond in an appropriate amount with the same surety as that on the bond already in effect, unless a superseding bond is filed pursuant to [§ 41.123](/current/title-27/section-41.123). A strengthening bond will not be approved where any notation is made thereon which is intended, or which may be construed, as a release of any former bond, or as limiting the amount of either bond to less than its full amount.
\[[26 FR 8195](https://www.federalregister.gov/citation/26-FR-8195), Aug. 31, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and further redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004]
#### § 41.123 Superseding bond.
A bonded manufacturer shall immediately file a new bond to supersede his current bond when (a) the corporate surety on the current bond becomes insolvent, (b) the appropriate TTB officer approves a request from the surety on the current bond to terminate his liability under the bond, (c) the payment of any liability under a bond is made by the surety thereon, (d) the amount of the bond is no longer sufficient under the provisions of [§ 41.121](/current/title-27/section-41.121) and a strengthening bond has not been filed, or (e) the appropriate TTB officer considers a superseding bond necessary for the protection of the revenue.
\[[26 FR 8195](https://www.federalregister.gov/citation/26-FR-8195), Aug. 31, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-251, [52 FR 19341](https://www.federalregister.gov/citation/52-FR-19341), May 22, 1987. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004]
#### § 41.124 Extension of coverage of bond.
An extension of coverage of the bond of a bonded manufacturer shall be required (a) as provided in [§ 41.114a, and (b)](/current/title-27/section-41.114a#p-41.114a\(b\)) in the case of any change in the location of the factory as set forth in the bond. Such extension of coverage of the bond shall be manifested on TTB F 5000.18 by the bonded manufacturer and by the surety on the bond with the same formality and proof of authority as required for the execution of the bond.
\[T.D. ATF-5, [38 FR 19689](https://www.federalregister.gov/citation/38-FR-19689), July 23, 1973. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and further redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004; T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 41.125 Approval of bond and extension of coverage of bond.
The appropriate TTB officer is authorized to approve all bonds and extensions of coverage of bonds (except under [§ 41.136](/current/title-27/section-41.136)) filed under this subpart. No manufacturer of tobacco products in Puerto Rico shall defer taxes under this subpart until he receives from the appropriate TTB officer notice of approval of the bond or of an appropriate extension of coverage of the bond required under this subpart. Upon receipt of the duplicate copy of an approved bond or extension of coverage of bond from the appropriate TTB officer, such copy of the bond or extension of coverage of bond shall be retained by the bonded manufacturer and shall be made available for inspection by the appropriate TTB officer upon his request.
\[T.D. 6871, [31 FR 45](https://www.federalregister.gov/citation/31-FR-45), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28086](https://www.federalregister.gov/citation/51-FR-28086), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-251, [52 FR 19341](https://www.federalregister.gov/citation/52-FR-19341), May 22, 1987. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004]
#### § 41.126 Termination of bond.
Any bond given under the provisions of this subpart may be terminated as to future transactions, by the appropriate TTB officer, (a) pursuant to application of surety as provided in [§ 41.127; (b)](/current/title-27/section-41.127#p-41.127\(b\)) on approval of a superseding bond; (c) on notification by the bonded manufacturer to the appropriate TTB officer that he has discontinued the deferral of taxes under the bond; or (d) on notification by the bonded manufacturer to the appropriate TTB officer that he has discontinued business. When any bond is terminated, the appropriate TTB officer shall notify both the bonded manufacturer and surety on such bond, in writing, of such action.
\[[26 FR 8196](https://www.federalregister.gov/citation/26-FR-8196), Aug. 31, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-251, [52 FR 19341](https://www.federalregister.gov/citation/52-FR-19341), May 22, 1987. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004]
#### § 41.127 Application of surety for relief from bond.
A surety on any bond given under the provisions of this subpart may at any time in writing notify the bonded manufacturer and the appropriate TTB officer that he desires, after a date named, to be relieved of liability under said bond. Such date shall be not less than 10 days after the date the notice is received by the appropriate TTB officer. The surety shall also file with the appropriate TTB officer an acknowledgement or other proof of service on the bonded manufacturer. If such notice is not thereafter in writing withdrawn, the rights of the bonded manufacturer as supported by said bond shall be terminated on the date named in the notice, and the surety shall be relieved from liability to the extent set forth in [§ 41.128](/current/title-27/section-41.128).
\[[26 FR 8196](https://www.federalregister.gov/citation/26-FR-8196), Aug. 31, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-251, [52 FR 19341](https://www.federalregister.gov/citation/52-FR-19341), May 22, 1987. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004]
#### § 41.128 Relief of surety from bond.
Where the surety on a bond given under the provisions of this subpart has filed application for relief from liability as provided in [§ 41.127](/current/title-27/section-41.127), the surety shall be relieved from liability for transactions occurring wholly subsequent to the date specified in the notice, or the effective date of a new bond, if one is given.
\[[26 FR 8196](https://www.federalregister.gov/citation/26-FR-8196), Aug. 31, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and further redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004]
#### § 41.129 Release of pledged securities.
Securities of the United States, pledged and deposited as provided in [§ 41.120](/current/title-27/section-41.120), shall be released only in accordance with the provisions of [31 CFR part 225](/current/title-31/part-225). Such securities will not be released by the appropriate TTB officer until the liability under the bond for which they were pledged has been terminated. When the appropriate TTB officer is satisfied that they may be released, he shall fix the date or dates on which a part or all of such securities may be released. At any time prior to the release of such securities, the appropriate TTB officer may extend the date of release for such additional length of time as he deems necessary.
(61 Stat. 650; [6 U.S.C. 15](https://www.govinfo.gov/link/uscode/6/15))
\[[26 FR 8196](https://www.federalregister.gov/citation/26-FR-8196), Aug. 31, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-251, [52 FR 19341](https://www.federalregister.gov/citation/52-FR-19341), May 22, 1987. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004]
#### §§ 41.135-41.138 \[Reserved]
#### § 41.139 Records.
Every manufacturer of tobacco products and cigarette papers and tubes in the United States who receives tobacco products or cigarette papers or tubes or Puerto Rican manufacture, without payment of internal revenue tax, under his bond, shall keep separate records of all items received, removed subject to tax, removed for tax-exempt purposes, and otherwise disposed of, showing the following information:
(a) Date, quantity, kind of cigars, cigarettes, smokeless tobacco, pipe tobacco and roll-your-own tobacco (number of small cigars—large cigars; number of small cigarettes—large cigarettes; pounds and ounces of chewing tobacco—snuff; pounds and ounces of pipe tobacco—roll-your-own tobacco).
(b) The sale price of large cigars removed subject to tax, except that if the price is more than $235.294 per thousand, it may be shown as if it were $236 per thousand.
(c) Cigarette papers:
(1) Before January 1, 2000, the date and number of books or sets of cigarette papers of each numerical content.
(2) On and after January 1, 2000, the date and number of cigarette papers.
(d) The date and number of cigarette tubes.
(Approved by the Office of Management and Budget under control number 1512-0362)
(Sec. 2128(c), Pub. L. 94-455, 90 Stat. 1921 ([26 U.S.C. 5741](https://www.govinfo.gov/link/uscode/26/5741)))
\[T.D. ATF-80, [46 FR 18311](https://www.federalregister.gov/citation/46-FR-18311), Mar. 24, 1981, as amended by T.D. ATF-172, [49 FR 14943](https://www.federalregister.gov/citation/49-FR-14943), Apr. 16, 1984; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-289, [54 FR 48841](https://www.federalregister.gov/citation/54-FR-48841), Nov. 27, 1989; T.D. ATF-307, [55 FR 52745](https://www.federalregister.gov/citation/55-FR-52745), Dec. 21, 1990; T.D. ATF-424, [64 FR 71933](https://www.federalregister.gov/citation/64-FR-71933), Dec. 22, 1999; T.D. ATF-420, [64 FR 71944](https://www.federalregister.gov/citation/64-FR-71944), Dec. 22, 1999]
#### § 41.140 Taxpayment in the United States.
Every manufacturer of tobacco products or cigarette papers or tubes in the United States who receives, under its bond without payment of internal revenue tax, Puerto Rican tobacco products or cigarette papers or tubes not put up in packages, and who subsequently removes such products subject to tax, must pay the tax imposed on these products by [26 U.S.C. 7652(a)](https://www.govinfo.gov/link/uscode/26/7652) at the rates prescribed in [26 U.S.C. 5701](https://www.govinfo.gov/link/uscode/26/5701) on the basis of a return as prescribed by [part 40 of this chapter](/current/title-27/part-40). Similarly, every manufacturer of cigarette papers and tubes in the United States who receives Puerto Rican cigarette papers and tubes and subsequently removes such articles, shall pay the tax imposed on such articles by [26 U.S.C. 7652(a)](https://www.govinfo.gov/link/uscode/26/7652), at the rates prescribed in [26 U.S.C. 5701](https://www.govinfo.gov/link/uscode/26/5701), on the basis of a return under the provisions of [part 40 of this chapter](/current/title-27/part-40) applicable to taxpayment of cigarette papers and tubes. Such tobacco products and cigarettes papers and tubes shall be separately listed and identified as articles of Puerto Rican manufacture on Form 5000.24. The amount of tax paid on such articles shall be separately stated on Form 5000.24.
\[T.D. 6871, [31 FR 45](https://www.federalregister.gov/citation/31-FR-45), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55855](https://www.federalregister.gov/citation/44-FR-55855), Sept. 28, 1979; T.D. ATF-232, [51 FR 28086](https://www.federalregister.gov/citation/51-FR-28086), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-384, [61 FR 54095](https://www.federalregister.gov/citation/61-FR-54095), Oct. 17, 1996; T.D. ATF-424, [64 FR 71933](https://www.federalregister.gov/citation/64-FR-71933), Dec. 22, 1999; T.D. ATF-422, [64 FR 71951](https://www.federalregister.gov/citation/64-FR-71951), Dec. 22, 1999; [78 FR 38570](https://www.federalregister.gov/citation/78-FR-38570), June 27, 2013]
#### § 41.141 Reports.
Every manufacturer of tobacco products or cigarette papers or tubes in the United States who receives Puerto Rican tobacco products or cigarette papers or tubes under its bond without payment of internal revenue tax must report the receipt and disposition of such tobacco products and cigarette papers and tubes on supplemental monthly reports. Such supplemental reports shall be made on TTB F 5210.5 and shall have inserted thereon the heading, “Cigars and Cigarettes of Puerto Rican Manufacture” or “Cigarette Papers and Tubes of Puerto Rican Manufacture,” as the case may be. The original of such supplemental report shall be attached to the manufacturer's regular monthly report when filed.
(72 Stat. 1422; [26 U.S.C. 5722](https://www.govinfo.gov/link/uscode/26/5722))
\[T.D. 6871, [31 FR 46](https://www.federalregister.gov/citation/31-FR-46), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975; T.D. ATF-232, [51 FR 28086](https://www.federalregister.gov/citation/51-FR-28086), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-424, [64 FR 71933](https://www.federalregister.gov/citation/64-FR-71933), Dec. 22, 1999; T.D. ATF-422, [64 FR 71951](https://www.federalregister.gov/citation/64-FR-71951), Dec. 22, 1999; [78 FR 38570](https://www.federalregister.gov/citation/78-FR-38570), June 27, 2013; T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
## Subpart H \[Reserved]
#### §§ 41.151-41.153 \[Reserved]
## Subpart I—Claims
### General
#### § 41.161 Abatement of assessment.
A claim for abatement of the unpaid portion of the assessment of any tax on tobacco products and cigarette papers and tubes, or any liability in respect thereof, may be allowed to the extent that such assessment is excessive in amount, is assessed after expiration of the applicable period of limitation, or is erroneously or illegally assessed. Any claim under this section shall be prepared on Form 2635 (5620.8), in duplicate, and shall set forth the particulars under which the claim is filed. The original of the claim, accompanied by such evidence as is necessary to establish to the satisfaction of the appropriate TTB officer that the claim is valid, shall be filed with the appropriate TTB officer, and the duplicate of the claim shall be retained by the claimant.
(68A Stat. 792; [26 U.S.C. 6404](https://www.govinfo.gov/link/uscode/26/6404))
\[T.D. 6871, [31 FR 46](https://www.federalregister.gov/citation/31-FR-46), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28086](https://www.federalregister.gov/citation/51-FR-28086), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-251, [52 FR 19341](https://www.federalregister.gov/citation/52-FR-19341), May 22, 1987. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004]
#### § 41.162 Losses caused by disaster occurring after September 2, 1958.
Claims involving internal revenue tax paid or determined and customs duty paid on tobacco products and cigarette papers and tubes removed, which are lost, rendered unmarketable, or condemned by a duly authorized official by reason of a “major disaster” occurring in the United States after September 2, 1958, shall be filed in accordance with the provisions of [subpart C of part 46 of this chapter](/current/title-27/part-46/subpart-C).
(72 Stat. 1420; [26 U.S.C. 5708](https://www.govinfo.gov/link/uscode/26/5708))
\[T.D. 6871, [31 FR 46](https://www.federalregister.gov/citation/31-FR-46), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28086](https://www.federalregister.gov/citation/51-FR-28086), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-457, [66 FR 32220](https://www.federalregister.gov/citation/66-FR-32220), June 14, 2001]
#### § 41.163 Refund of tax.
The taxes paid on tobacco products and cigarette papers and tubes imported or brought into the United States may be refunded (without interest) to the taxpayer on proof satisfactory to the appropriate TTB officer that the taxpayer has paid the tax on tobacco products and cigarette papers and tubes lost (otherwise than by theft) or destroyed, by fire, casualty, or act of God, while in the possession or ownership of such taxpayer, or withdrawn by him from the market. Any claim for refund of tax under this section shall be prepared on Form 2635 (5620.8), in duplicate, and shall include a statement that the tax imposed on tobacco products and cigarette papers and tubes by [26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652) or chapter 52, as applicable, has been paid in respect to the articles covered in the claim, and that the articles were lost, destroyed, or withdrawn from the market, within six months preceding the date the claim is filed and shall be executed under the penalties of perjury. A claim for refund relating to articles lost or destroyed shall be supported as prescribed in [§ 41.165](/current/title-27/section-41.165), and a claim relating to articles withdrawn from the market shall include a schedule prepared and verified as prescribed in [§§ 41.170](/current/title-27/section-41.170) and [41.171](/current/title-27/section-41.171) or [§§ 41.172](/current/title-27/section-41.172) and [41.173](/current/title-27/section-41.173). The original of the claim shall be filed with the appropriate TTB officer. The duplicate of the claim, with the copy of any verified supporting schedules, shall be retained by the claimant.
(68A Stat. 907, as amended, 72 Stat. 1419, as amended; [26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652), [5705](https://www.govinfo.gov/link/uscode/26/5705))
\[T.D. 6871, [31 FR 46](https://www.federalregister.gov/citation/31-FR-46), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55855](https://www.federalregister.gov/citation/44-FR-55855), Sept. 28, 1979; T.D. ATF-232, [51 FR 28086](https://www.federalregister.gov/citation/51-FR-28086), Aug. 5, 1986; T.D. ATF-243, [52 FR 43194](https://www.federalregister.gov/citation/52-FR-43194), Dec. 1, 1986; T.D. ATF-251, [52 FR 19341](https://www.federalregister.gov/citation/52-FR-19341), May 22, 1987. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004]
### Tobacco Products and Cigarette Papers and Tubes Lost or Destroyed
#### § 41.165 Action by taxpayer.
Where tobacco products and cigarette papers and tubes which have been imported or brought into the United States are lost (otherwise than by theft) or destroyed, by fire, casualty, or act of God, and the taxpayer desires to file claim for refund of the tax on such articles, he shall, in addition to complying with the requirements of [§ 41.163](/current/title-27/section-41.163), indicate on the claim the nature, date, place, and extent of such loss or destruction. The claim shall be accompanied by such evidence as is necessary to establish to the satisfaction of the appropriate TTB officer that the claim is valid.
(72 Stat. 1419, as amended; [26 U.S.C. 5705](https://www.govinfo.gov/link/uscode/26/5705))
\[T.D. 6871, [31 FR 46](https://www.federalregister.gov/citation/31-FR-46), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28086](https://www.federalregister.gov/citation/51-FR-28086), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004]
### Tobacco Products and Cigarette Papers and Tubes Withdrawn From the Market
#### § 41.170 Reduction of tobacco products to materials; TTB action.
(a) *General.* Where tobacco products and cigarette papers and tubes which have been imported or brought into the United States are withdrawn from the market and the taxpayer desires to file claim for refund of the tax on the articles, he shall, in addition to the requirements of [§ 41.163](/current/title-27/section-41.163), assemble the articles at any suitable place, if they are to be destroyed or reduced to tobacco. The taxpayer shall group the articles according to the rates of tax applicable to the articles, and shall prepare a schedule of the articles on TTB Form 5200.7, in triplicate. All copies of the schedule shall be forwarded to the appropriate TTB officer.
(b) *Large cigars.* Refund or credit of tax on large cigars withdrawn from the market is limited to the lowest tax applicable to that brand and size of cigar during the required record retention period (see [§ 41.22](/current/title-27/section-41.22)) except where the importer establishes that a greater amount was actually paid. For each claim involving large cigars withdrawn from the market, the importer must include a certification on either TTB Form 5200.7 or TTB Form 2635 (5620.8) to read as follows:
The amounts claimed relating to large cigars are based on the lowest sale price applicable to the cigars during the required record retention period, except where specific documentation is submitted with the claim to establish that any greater amount of tax claimed was actually paid.
(See [26 U.S.C. 5705](https://www.govinfo.gov/link/uscode/26/5705))
\[T.D. ATF-80, [46 FR 18311](https://www.federalregister.gov/citation/46-FR-18311), Mar. 24, 1981, as amended by T.D. ATF-232, [51 FR 28086](https://www.federalregister.gov/citation/51-FR-28086), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-251, [52 FR 19341](https://www.federalregister.gov/citation/52-FR-19341), May 22, 1987; T.D. ATF-307, [55 FR 52745](https://www.federalregister.gov/citation/55-FR-52745), Dec. 21, 1990; T.D. ATF-424, [64 FR 71933](https://www.federalregister.gov/citation/64-FR-71933), Dec. 22, 1999; T.D. ATF-420, [64 FR 71944](https://www.federalregister.gov/citation/64-FR-71944), Dec. 22, 1999. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004]
#### § 41.171 Reduction of tobacco products to materials, action by appropriate TTB officer.
Upon receipt of a schedule of tobacco products and cigarette papers and tubes which have been imported or brought into the United States and which are withdrawn from the market by a taxpayer who desires to destroy such articles or, in the case of tobacco products, reduce them to tobacco, the appropriate TTB officer may verify the schedule and supervise destruction of the articles (and stamps, if any) or the reduction of tobacco products to tobacco, or the appropriate TTB officer may authorize the taxpayer to destroy the articles (and stamps, if any) or reduce tobacco products to tobacco without supervision by so stating on the original and one copy of the schedule returned to the taxpayer.
(72 Stat. 1419, as amended; [26 U.S.C. 5705](https://www.govinfo.gov/link/uscode/26/5705))
\[T.D. 6871, [31 FR 46](https://www.federalregister.gov/citation/31-FR-46), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28087](https://www.federalregister.gov/citation/51-FR-28087), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004]
#### § 41.172 Return to nontaxpaid status, action by taxpayer.
(a) *General.* Where tobacco products and cigarette papers and tubes which have been imported or brought into the United States are withdrawn from the market and the taxpayer desires to file a claim for refund of the tax on the articles and return them to a nontaxpaid status, he shall, in addition to the requirements of [§ 41.163](/current/title-27/section-41.163), assemble the articles in or adjacent to the factory in which the articles are to be retained or received in a nontaxpaid status. The taxpayer shall group the articles according to the rates of tax applicable to the articles, and shall prepare a schedule of the articles, on Form 5200.7, in triplicate. All copies of the schedule shall be forwarded to the appropriate TTB officer.
(b) *Large cigars.* Refund or credit of tax on large cigars withdrawn from the market is limited to the lowest tax applicable to that brand and size of cigar during the required record retention period (see [§ 41.22](/current/title-27/section-41.22)) except where the importer establishes that a greater amount was actually paid. For each claim involving large cigars withdrawn from the market, the importer must include a certification on either TTB Form 5200.7 or TTB Form 2635 (5620.8) to read as follows:
The amounts claimed relating to large cigars are based on the lowest sale price applicable to the cigars during the required record retention period, except where specific documentation is submitted with the claim to establish that any greater amount of tax claimed was actually paid.
(See [26 U.S.C. 5705](https://www.govinfo.gov/link/uscode/26/5705))
\[T.D. ATF-80, [46 FR 18311](https://www.federalregister.gov/citation/46-FR-18311), Mar. 24, 1981, and amended by T.D. ATF-232, [51 FR 28087](https://www.federalregister.gov/citation/51-FR-28087), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-251, [52 FR 19341](https://www.federalregister.gov/citation/52-FR-19341), May 22, 1987; T.D. ATF-307, [55 FR 52745](https://www.federalregister.gov/citation/55-FR-52745), Dec. 21, 1990; T.D. ATF-424, [64 FR 71933](https://www.federalregister.gov/citation/64-FR-71933), Dec. 22, 1999; T.D. ATF-420, [64 FR 71944](https://www.federalregister.gov/citation/64-FR-71944), Dec. 22, 1999. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004]
#### § 41.173 Return to nontaxpaid status, action by appropriate TTB officer.
Upon receipt of a schedule of tobacco products and cigarette papers and tubes which have been imported or brought into the United States and which are withdrawn from the market by a taxpayer who desires to return such articles to a nontaxpaid status, the appropriate TTB officer may verify the schedule and supervise disposition of the articles (and destruction of the stamps, if any) or the appropriate TTB officer may authorize the receiving manufacturer to verify the schedule and disposition of the articles (and destruction of the stamps, if any) covered therein, without supervision, by so stating on the original and one copy of the schedule returned to the manufacturer. Where the receipt in a factory of tobacco products and cigarette papers and tubes has been verified, such articles shall be treated by the receiving manufacturer as nontaxpaid and shall be covered by the manufacturer's bond.
(72 Stat. 1419, as amended; [26 U.S.C. 5705](https://www.govinfo.gov/link/uscode/26/5705))
\[T.D. 6871, [31 FR 47](https://www.federalregister.gov/citation/31-FR-47), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28087](https://www.federalregister.gov/citation/51-FR-28087), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004; T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 41.174 Disposition of tobacco products and cigarette papers and tubes, and schedule.
When the appropriate TTB officer is assigned to verify the schedule and supervise destruction or other disposition of tobacco products and cigarette papers and tubes which have been imported or brought into the United States, such officer shall, upon completion of his assignment, execute a certificate on all copies of the schedule to show the disposition and the date of disposition of such articles. The appropriate TTB officer shall return the original and one copy of the certified schedule to the taxpayer. When a taxpayer destroys such articles (and stamps, if any) or reduces tobacco products to materials, or a receiving manufacturer verifies the schedule and disposition of such articles (and stamps, if any), he shall execute a certificate on the original and the copy of the schedule returned to him, to show the disposition and the date of disposition of the articles. The taxpayer shall attach the original of the certified schedule to his claim for refund.
(72 Stat. 1419, as amended; [26 U.S.C. 5705](https://www.govinfo.gov/link/uscode/26/5705))
\[T.D. 6871, [31 FR 47](https://www.federalregister.gov/citation/31-FR-47), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28087](https://www.federalregister.gov/citation/51-FR-28087), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004]
## Subpart J—Records and Reports
#### Source:
T.D. ATF-40, [42 FR 5007](https://www.federalregister.gov/citation/42-FR-5007), Jan. 26, 1977, unless otherwise noted.
#### § 41.181 Records of large cigars.
Every person who imports large cigars for sale within the United States must keep such records as are necessary to establish and verify the sale price that applies to large cigars removed (entered or withdrawn).
(a) *Basic record.* The importer must keep a record to show each sale price (as determined under [§ 41.39](/current/title-27/section-41.39)), which is applicable to large cigars removed. No later than the tenth business day in January of each year the importer must prepare such a record to show the sale price in effect on the first day of that year for each brand and size of large cigars. The importer must note any change in a price from that shown in the record within ten business days after such change in price. The record must be a continuing one for each brand and size of cigar (and type of packaging, if pertinent), so that the taxable price on any date may be readily ascertained. If an importer removes new types of large cigars after the beginning of the year, the importer must enter the sale price and its effective date for such large cigars in the basic record within ten business days after such removal.
(b) *Copies of price announcements.* The importer must keep a copy of each general announcement that is issued internally or to the trade about establishment or change of large cigar sale prices. If the copy does not show the actual date when issued it must be annotated to show this information.
(c) *Copies of entry and withdrawal forms.* The importer must keep a copy of each customs entry or withdrawal form on which internal revenue tax for large cigars is declared pursuant to [§ 41.81](/current/title-27/section-41.81).
(d) *Alternative record.* If an importer has so few import transactions and/or brands and sizes of large cigars that retention of an appropriate copy of each entry and withdrawal form required under [paragraph (c)](/current/title-27/section-41.181#p-41.181\(c\)) of this section will provide an adequate record of sale prices, then the record required under [paragraph (a)](/current/title-27/section-41.181#p-41.181\(a\)) of this section need not be kept. In such case the entry and withdrawal forms must identify the brands and sizes of cigars covered and show the corresponding quantity and sale price for each. If such information was not originally entered on the form it may be included by annotation. Whenever the appropriate TTB officer finds that alternative records being kept pursuant to this paragraph are inadequate for the intended purpose, he or she may so notify the importer in writing, after which time the importer must keep the record required under [paragraph (a)](/current/title-27/section-41.181#p-41.181\(a\)) of this section.
(Approved by the Office of Management and Budget under control number 1512-0368)
\[T.D. ATF-420, [64 FR 71944](https://www.federalregister.gov/citation/64-FR-71944), Dec. 22, 1999. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004]
#### § 41.182 Availability of records.
The records required under [§ 41.181](/current/title-27/section-41.181) shall be kept by the importer at his usual place of business unless otherwise authorized in writing by the appropriate TTB officer, and shall be made available for inspection by the appropriate TTB officer upon his request. (For retention period, see [§ 41.22](/current/title-27/section-41.22).)
\[T.D. ATF-40, [42 FR 5007](https://www.federalregister.gov/citation/42-FR-5007), Jan. 26, 1977. Redesignated and amended by T.D. TTB-16, [69 FR 52424](https://www.federalregister.gov/citation/69-FR-52424), [52425](https://www.federalregister.gov/citation/69-FR-52425), Aug. 26, 2004]
#### § 41.183 \[Reserved]
## Subpart K—Tobacco Products Importers
#### Source:
T.D. ATF-422, [64 FR 71951](https://www.federalregister.gov/citation/64-FR-71951), Dec. 22, 1999, unless otherwise noted.
#### § 41.190 Persons required to qualify.
Any person who engages in the business as an importer of tobacco products must qualify as an importer of tobacco products in accordance with this part. Any person eligible for an exemption described in [§ 41.50](/current/title-27/section-41.50) is not engaged in the business as an importer of tobacco products. A person importing tobacco products for personal use, in such quantities as may be allowed by U.S. Customs and Border Protection without payment of tax, is not required to have an importer's permit.
\[[78 FR 38570](https://www.federalregister.gov/citation/78-FR-38570), June 27, 2013, as amended by T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 41.191 Application for permit.
Every person, before commencing business as an importer of tobacco products, must make application for, and obtain, the permit in accordance with this subpart. The permit application must be made on TTB F 5230.4 in accordance with the instructions for the form. All documents required under this part to be furnished with the permit application must be made a part thereof.
\[[78 FR 38570](https://www.federalregister.gov/citation/78-FR-38570), June 27, 2013]
#### § 41.192 \[Reserved]
#### § 41.193 Corporate documents.
Every corporation that files an application for a permit as an importer of tobacco products must furnish with its application for the permit required by [§ 41.191](/current/title-27/section-41.191) a true copy of the corporate charter or a certificate of corporate existence or incorporation executed by the appropriate officer of the State in which incorporated. The corporation must likewise furnish duly authenticated extracts of the stockholders' meetings, bylaws, or directors' meetings, listing the offices that, or the officers who, are authorized to sign documents or otherwise act in behalf of the corporation in matters relating to [26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201) and the regulations issued thereunder. The corporation must also furnish evidence, in duplicate, of the identity of the officers and directors and each person who holds more than ten percent of the stock of the corporation. Where the corporation has previously filed with the appropriate TTB officer any information required by this section and that information is currently complete and accurate, a written statement to that effect, in duplicate, will be sufficient for purposes of this section.
\[[78 FR 38571](https://www.federalregister.gov/citation/78-FR-38571), June 27, 2013]
#### § 41.194 Articles of partnership or association.
Every partnership or association that files an application for a permit as an importer of tobacco products must furnish with its application for the permit required by [§ 41.191](/current/title-27/section-41.191) a true copy of the articles of partnership or association, if any, or the certificate of partnership or association where required to be filed by any State, county, or municipality. Where a partnership or association has previously filed these documents with the appropriate TTB officer and the documents are currently complete and accurate, a written statement, in duplicate, to that effect by the partnership or association will be sufficient for purposes of this section.
\[[78 FR 38571](https://www.federalregister.gov/citation/78-FR-38571), June 27, 2013]
#### § 41.195 Trade name certificate.
Every person that files an application for a permit as an importer of tobacco products operating under a trade name must furnish with the application for the permit required by [§ 41.191](/current/title-27/section-41.191) a true copy of the certificate or other document, if any, issued by a State, county, or municipal authority in connection with the transaction of business under the trade name. If no such certificate or other document is issued by the State, county, or municipal authority, a written statement, in duplicate, to that effect by the person will be sufficient for purposes of this section.
\[[78 FR 38571](https://www.federalregister.gov/citation/78-FR-38571), June 27, 2013]
#### § 41.196 Power of attorney.
If the application for a permit or any report or other document required to be executed under this part is to be signed by an individual as an attorney in fact for any person (including one of the partners for a partnership or one of the members of an association), or if an individual is otherwise to officially represent such person, a power of attorney on TTB F 5000.8 must be furnished to the appropriate TTB officer. A power of attorney is not required for individuals whose authority is furnished with the corporate documents required by [§ 41.193](/current/title-27/section-41.193). A new TTB F 5000.8 does not have to be filed with the appropriate TTB officer if that form previously was submitted to TTB and is still in effect.
\[[78 FR 38571](https://www.federalregister.gov/citation/78-FR-38571), June 27, 2013]
#### § 41.197 Additional information.
The appropriate TTB officer may require the submission of, and the applicant must furnish, as a part of the application for a permit, such additional information the appropriate TTB officer deems necessary to determine whether the applicant is entitled to a permit under this subpart.
\[[78 FR 38571](https://www.federalregister.gov/citation/78-FR-38571), June 27, 2013]
#### § 41.198 Investigation of applicant.
Appropriate TTB officers may inquire or investigate to verify the information in connection with an application for a permit. The investigation will ascertain whether the applicant is eligible for a permit. A permit may be denied if the applicant (including, in the case of a corporation, any officer, director, or principal stockholder and, in the case of a partnership, a partner)—
(a) Is, by reason of his business experience, financial standing, or trade connections or by reason of previous or current legal proceedings involving a felony violation of any other provision of Federal criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes, not likely to maintain operations in compliance with this chapter;
(b) Has been convicted of a felony violation of any provision of Federal or State criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes; or
(c) Has failed to disclose any material information required or made any material false statement in the application therefor.
\[T.D. TTB-75, [74 FR 14485](https://www.federalregister.gov/citation/74-FR-14485), Mar. 31, 2009]
#### § 41.199 Notice of contemplated disapproval.
If the appropriate TTB officer has reason to believe that the applicant is not entitled to a permit, the appropriate TTB officer will promptly provide to the applicant a notice of the contemplated disapproval of the application and an opportunity for hearing thereon in accordance with [part 71 of this chapter](/current/title-27/part-71). If, after the notice and opportunity for hearing, the appropriate TTB officer finds that the applicant is not entitled to a permit, an order will be prepared stating the findings on which the application is denied.
\[[78 FR 38571](https://www.federalregister.gov/citation/78-FR-38571), June 27, 2013]
#### § 41.200 Issuance of permit.
If the application for the permit required under this subpart is approved, the appropriate TTB officer will issue the permit on TTB F 5200.24.
\[[78 FR 38571](https://www.federalregister.gov/citation/78-FR-38571), June 27, 2013]
#### § 41.201 Duration of permit.
(a) *Permits with an effective date on or after August 26, 2013.* A permit issued under [§ 41.200](/current/title-27/section-41.200) bearing an effective date of August 26, 2013 or later will be valid for a period of five years from the effective date shown on the permit. Provided that a timely application for renewal is filed under [§ 41.202](/current/title-27/section-41.202), the expiring permit will continue in effect until final action is taken by TTB on the application for renewal.
(b) *Permits with an effective date prior to August 26, 2013.* A person operating as an importer of tobacco products that holds a permit bearing an effective date that is prior to August 26, 2013 and that wishes to continue operations as an importer of tobacco products, must apply for and receive a new permit issued under [§ 41.200](/current/title-27/section-41.200). The person must file the application under [§ 41.191](/current/title-27/section-41.191) within 150 days after August 26, 2013, or within 30 days prior to the expiration date shown on the existing permit form, whichever is later. If a person timely files an application but that application is not complete (that is, the applicant has not submitted information or documentation sufficient for TTB to take action on the permit), and if the applicant has not provided the missing information within one year of a written request for it or within any shorter time period specified in the written request, the permit application will be deemed abandoned and the applicant will be notified in writing that no permit will be issued in response to the incomplete application. Provided that a timely application is filed, the person may continue operations under the existing permit until TTB takes final action on the application for the new permit.
\[[78 FR 38571](https://www.federalregister.gov/citation/78-FR-38571), June 27, 2013]
#### § 41.202 Renewal of permit.
(a) *Permits with an effective date on or after August 26, 2013.* A person operating as an importer of tobacco products that holds a permit required under [§ 41.191](/current/title-27/section-41.191) and issued under [§ 41.200](/current/title-27/section-41.200) bearing an effective date of August 26, 2013 or later, and that wishes to continue operations beyond the expiration of the permit, must apply for renewal of the permit within 30 days prior to expiration of the permit, in accordance with the instructions provided with the renewal application form. Permits will be renewed only for those persons that have engaged in the importing of tobacco products under the current permit during the one-year period immediately prior to the date of the application to renew.
(b) *Permits with an effective date prior to August 26, 2013.* A person may not obtain renewal of a permit bearing an effective date prior to August 26, 2013. A person operating as an importer of tobacco products that holds a permit bearing an effective date prior to August 26, 2013, and that wishes to continue in operations as an importer of tobacco products, must apply for and receive a new permit for issuance under [§ 41.200](/current/title-27/section-41.200) and in accordance with the rules contained in [§ 41.201(b)](/current/title-27/section-41.201#p-41.201\(b\)).
\[[78 FR 38571](https://www.federalregister.gov/citation/78-FR-38571), June 27, 2013]
#### § 41.203 Retention of permit and supporting documents.
The importer must retain the permit, together with the copy of the application and supporting documents returned with the permit, at the same place where the records required by this subpart are kept. The importer must make the permit and supporting documents available for inspection by any appropriate TTB officer upon request.
\[[78 FR 38572](https://www.federalregister.gov/citation/78-FR-38572), June 27, 2013]
#### § 41.203a Suspension and revocation of permit.
When the appropriate TTB officer has reason to believe that an importer of tobacco products has not in good faith complied with the provisions of [26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201), and regulations thereunder, or with any other provision of 26 U.S.C. with intent to defraud, or has violated any condition of the permit, or has failed to disclose any material information required or made any material false statement in the application for the permit, or is, by reason of previous or current legal proceedings involving a felony violation of any other provision of Federal criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes, not likely to maintain operations in compliance with [26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201), or has been convicted of a felony violation of any provision of Federal or State criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes, the appropriate TTB officer shall issue an order, stating the facts charged, citing such person to show cause why the permit should not be suspended or revoked. Such citation shall be issued and opportunity for hearing afforded in accordance with [part 71 of this chapter](/current/title-27/part-71), which part is applicable to such proceedings. If, after hearing, the Administrative Law Judge, or on appeal, the Administrator, finds that such person has not shown cause why the permit should not be suspended or revoked, such permit shall be suspended for such period as the appropriate TTB officer deems proper or shall be revoked.
\[T.D. TTB-104, [77 FR 37304](https://www.federalregister.gov/citation/77-FR-37304), June 21, 2012]
### Required Records and Reports
#### § 41.204 Records and reports in general.
Every importer of tobacco products or cigarette papers or tubes must keep records and, when required by this part, submit reports of all tobacco products released from customs custody under the importer's TTB permit, including information on the release from customs custody, the receipt, and the disposition.
(Approved by the Office of Management and Budget under control numbers 1513-0064 and 1513-0106)
\[[81 FR 94210](https://www.federalregister.gov/citation/81-FR-94210), Dec. 22, 2016]
#### § 41.205 \[Reserved]
### Filing and Retention of Records and Reports
#### § 41.206 Reports.
(a) *General.* Importers must file a monthly report on TTB F 5220.6 in accordance with the instructions for the form.
(b) *First report.* The first monthly report must be submitted by the 15th day of the month following the month in which the permit is issued.
(c) *Reports of no activity.* Reports with the notation “No Activity” must be made for those months in which no activity occurs.
(d) *Concluding report.* When a transfer of ownership of the business of an importer of tobacco products described in [§ 41.224](/current/title-27/section-41.224), or when a change in control of a corporation described in [§ 41.226](/current/title-27/section-41.226) occurs, a concluding report with the notation “Concluding Report” must be made for the month or partial month during which the transfer of ownership or change in control becomes effective. A concluding report must also be made for the month or partial month during which an importer concludes operations under the permit.
\[T.D. TTB-78, [74 FR 29415](https://www.federalregister.gov/citation/74-FR-29415), June 22, 2009]
#### § 41.207 \[Reserved]
#### § 41.208 Maintenance and retention of records and reports.
(a) *Maintenance.* All records, reports, and other documents required under this part must be maintained separately, chronologically by transaction or reporting date, at the importer's principal place of business. The appropriate TTB officer may, pursuant to an application by the importer for an approved alternate method or procedure under [§ 41.26](/current/title-27/section-41.26), authorize such documents to be maintained at another business location under the control of the importer, if the conditions of [§ 41.26](/current/title-27/section-41.26) are met and provided that the use of the alternate location does not cause undue inconvenience to TTB when attempting to examine the files and does not delay the timely transmittal of any document required to be submitted to TTB.
(b) *Retention.* All records and reports and documents or copies of documents supporting these records or reports required by this part to be submitted to TTB or retained by the importer must be retained for not less than three years following the close of the calendar year in which filed or made. Such records, reports, and other documents must be available for inspection by the appropriate TTB officer upon request. Furthermore, the appropriate TTB officer may require these records, reports, and other documents to be kept for an additional period of not more than three years in any case where it is necessary to protect the revenue.
\[T.D. TTB-78, [74 FR 29415](https://www.federalregister.gov/citation/74-FR-29415), June 22, 2009]
## Subpart L—Changes After Original Qualification of Importers
#### Source:
[78 FR 38572](https://www.federalregister.gov/citation/78-FR-38572), June 27, 2013, unless otherwise noted.
### Changes in Name
#### § 41.220 Change in individual name.
When there is a change in the name of an individual operating under a permit as an importer of tobacco products, the importer must, within 30 days of the change, submit an application on TTB F 5230.5 for an amended permit.
#### § 41.221 Change in trade name.
When there is a change in, or an addition or discontinuance of, a trade name used by an importer of tobacco products in connection with operations authorized by the permit, the importer must, within 30 days of the change, apply for an amended permit on TTB F 5230.5 to reflect such change. The importer must also furnish a true copy of any new trade name certificate or document issued to the business, or a statement in lieu thereof, as required by [§ 41.195](/current/title-27/section-41.195).
#### § 41.222 Change in corporate name.
When there is a change in the corporate name of an importer of tobacco products, the importer must, within 30 days of such change, apply for an amended permit on TTB F 5230.5. The importer must also furnish such documents as may be necessary to establish that the corporate name has been changed.
### Changes in Ownership or Control
#### § 41.223 Fiduciary successor.
If an administrator, executor, receiver, trustee, assignee, or other fiduciary is to take over the business of an importer of tobacco products as a continuing operation, the fiduciary must, before commencing operations, apply for a permit in accordance with [§ 41.191](/current/title-27/section-41.191) and furnish certified copies, in duplicate, of the order of the court or other pertinent documents, showing his or her appointment and qualification as the fiduciary. Where a fiduciary intends only to liquidate the business, qualification as an importer of tobacco products is not required if the fiduciary promptly files with the appropriate TTB officer a written statement to that effect.
#### § 41.224 Transfer of ownership.
If a transfer in ownership of the business of an importer of tobacco products (including a change of any member of a partnership or association) is to be made, the importer must give written notice to the appropriate TTB officer, naming the proposed successor and the desired effective date of the transfer. Before commencing operations, the proposed successor must qualify as an importer of tobacco products in accordance with [subpart K of this part](/current/title-27/part-41/subpart-K). The importer must give notice of the transfer, and the proposed successor must apply for the permit, in sufficient time for examination and approval of the application before the desired date of the transfer. The predecessor importer must make a concluding report in accordance with [§ 41.206](/current/title-27/section-41.206) and must surrender the permit with that report. The successor importer must make a first report in accordance with [§ 41.206](/current/title-27/section-41.206).
#### § 41.225 Change in officers, directors, or stockholders of a corporation.
Upon election or appointment (excluding successive reelection or reappointment) of any officer or director of a corporation operating as an importer of tobacco products, or upon any occurrence that results in a person acquiring ownership or control of more than ten percent in aggregate of the outstanding stock of such corporation, the importer must, within 30 days of that action, so notify the appropriate TTB officer in writing, giving the identity of the person. In the event that the acquisition of more than 10 percent in aggregate of the outstanding stock of the corporation results in a change of control of the corporation, the provisions of [§ 41.226](/current/title-27/section-41.226) will apply. When there is any change in the authority furnished under [§ 41.196](/current/title-27/section-41.196) for officers to act on behalf of the corporation, the importer must immediately so notify the appropriate TTB officer in writing.
#### § 41.226 Change in control of a corporation.
When the issuance, sale, or transfer of the stock of a corporation operating as an importer of tobacco products results in a change in the identity of the principal stockholders exercising actual or legal control of the operations of the corporation, the corporate importer must, within 30 days after the change occurs, apply for a new permit on TTB F 5230.4. If the application is not timely made, the present permit will automatically terminate at the expiration of that 30-day period, and the importer must dispose of all tobacco products on hand in accordance with this part, make a concluding report in accordance with [§ 41.206](/current/title-27/section-41.206), and surrender the permit with that report. If the application for a new permit is timely made, the present permit will continue in effect pending final action with respect to the new application.
### Changes in Location or Address
#### § 41.227 Change in location.
When an importer of tobacco products intends to relocate its principal business office, the importer must, before commencing operations at the new location, make application on TTB F 5230.5 for, and obtain, an amended permit.
#### § 41.228 Change in address.
When any change occurs in the address, but not the location, of the principal business office of an importer of tobacco products as a result of action by local authorities, the importer must, within 30 days of such change, make application on TTB F 5230.5 for an amended permit.
## Subpart M—Importation of Processed Tobacco
#### Source:
T.D. TTB-78, [74 FR 29416](https://www.federalregister.gov/citation/74-FR-29416), June 22, 2009, unless otherwise noted.
### Qualification Requirements for Importers of Processed Tobacco
#### § 41.231 Persons required to qualify.
Except as otherwise provided in [§ 41.233](/current/title-27/section-41.233), every person, before commencing business as an importer of processed tobacco, must apply for, and obtain, either a permit as an importer of processed tobacco or, if the person holds a TTB permit as an importer of tobacco products, an amendment to the existing permit authorizing the importation of processed tobacco under such permit, in accordance with the provisions of this subpart.
#### § 41.232 Application for permit or amendment of existing permit.
(a) *Application for permit.* Any person who intends to engage in the business of importing processed tobacco, and who is not engaged in the business of importing tobacco products, must apply for a permit by completing and submitting TTB F 5230.4 in accordance with the instructions on that form. All documents required under this subpart to be furnished with the application must be included with the application when it is submitted. If the appropriate TTB officer determines that the application is incomplete and, for that reason, does not include sufficient information for TTB to make a decision on the application, and if the applicant has not provided the missing information within one year of a written request for it or within any shorter time period specified in the written request, the application will be deemed abandoned and the applicant will be notified in writing that no permit will be issued in response to the incomplete application. In the case of an application filed in accordance with [§ 41.233](/current/title-27/section-41.233), such notification will constitute the final action on the application and such party will no longer be able to continue as an importer of processed tobacco.
(b) *Application for amendment of existing permit.* Any person who holds a TTB permit as an importer of tobacco products may also qualify to engage in business as an importer of processed tobacco under the same permit by making application on TTB F 5230.5 for an amended permit and receiving TTB authorization.
\[T.D. TTB-78, [74 FR 29416](https://www.federalregister.gov/citation/74-FR-29416), June 22, 2009, as amended by T.D. TTB-104, [77 FR 37304](https://www.federalregister.gov/citation/77-FR-37304), June 21, 2012]
#### § 41.233 Transitional rule.
(a) Any person who:
(1) On April 1, 2009, had already been engaged in business as an importer of processed tobacco; and
(2) Before June 30, 2009, submits an application for a permit or an amendment of an existing permit, as provided in [§ 41.232](/current/title-27/section-41.232), to engage in such business, may continue to engage in that business pending final action on the application.
(b) Pending final action on the application, all provisions of chapter 52 of the Internal Revenue Code of 1986 shall apply to the applicant in the same manner and to the same extent as if the applicant were a holder of a permit as an importer of processed tobacco or an amended permit authorizing the importation of processed tobacco under chapter 52 and this subpart. Upon receipt of an application, the appropriate TTB officer will provide the applicant with a written acknowledgement that may be used for a limited period as confirmation of TTB authorization to engage in such business of an importer of processed tobacco.
#### § 41.234 Corporate documents.
Every corporation that files an application for a permit as an importer of processed tobacco must furnish with its application for the permit required by [§ 41.231](/current/title-27/section-41.231) a true copy of the corporate charter or a certificate of corporate existence or incorporation executed by the appropriate officer of the State in which incorporated. The corporation must likewise furnish duly authenticated extracts of the stockholders' meetings, bylaws, or directors' meetings, listing the offices the incumbents of which are authorized to sign documents or otherwise act in behalf of the corporation in matters relating to [26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201), and regulations issued thereunder. The corporation must also furnish evidence, in duplicate, of the identity of the officers and directors and each person who holds more than ten percent of the stock of such corporation. Where any of the information required by this section has previously been filed with the appropriate TTB officer and such information is currently complete and accurate, a written statement to that effect will be sufficient for the purpose of this section.
#### § 41.235 Articles of partnership or association.
Every partnership or association that files an application for a permit as an importer of processed tobacco must furnish with its application for the permit required by [§ 41.231](/current/title-27/section-41.231) a true copy of the articles of partnership or association, if any, or certificate of partnership or association where required to be filed by any State, county, or municipality. Where a partnership or association has previously filed such documents with the appropriate TTB officer and such documents are currently complete and accurate, a written statement, in duplicate, to that effect by the partnership or association will be sufficient for the purpose of this section.
#### § 41.236 Trade name certificate.
Every person that files an application for a permit as an importer of processed tobacco operating under a trade name must furnish with the application for the permit required by [§ 41.231](/current/title-27/section-41.231) a true copy of the certificate or other document, if any, issued by a State, county, or municipal authority in connection with the transaction of business under such trade name. If no such certificate or other document is so required, a written statement, in duplicate, to that effect by such person will be sufficient for the purpose of this section.
#### § 41.237 Additional information.
(a) *General.* The appropriate TTB officer may require such additional information as deemed necessary to determine whether the applicant is entitled to obtain either a permit as an importer of tobacco products or, if holding a permit as an importer of processed tobacco, an amended permit authorizing the importation of processed tobacco, under this subpart. The applicant must, when required by the appropriate TTB officer, furnish as a part of the application for the permit or authorization such additional information as may be necessary for the appropriate TTB officer to determine whether the applicant is entitled to a permit or an amended permit.
(b) *Business premises.* Every person that files an application for a permit required by [§ 41.231](/current/title-27/section-41.231) as an importer of processed tobacco must furnish, with its application for the permit, the address to be used as the principal business office where the records and reports required by the subpart must be maintained pursuant to [§ 41.263](/current/title-27/section-41.263). The applicant must also include the location (by physical address or other means if there is no physical address) of any premises used for the storage of processed tobacco imported or received. For permits issued prior to June 21, 2012, the permittee has 180 days from June 21, 2012, to submit the information required under this paragraph.
\[T.D. TTB-78, [74 FR 29416](https://www.federalregister.gov/citation/74-FR-29416), June 22, 2009, as amended by T.D. TTB-104, [77 FR 37304](https://www.federalregister.gov/citation/77-FR-37304), June 21, 2012]
#### § 41.238 Investigation of applicant.
Appropriate TTB officers may inquire or investigate to verify the information in connection with an application for a permit. The investigation will ascertain whether the applicant is eligible for a permit. A permit may be denied if the applicant (including, in the case of a corporation, any officer, director, or principal stockholder and, in the case of a partnership, a partner)—
(a) Is, by reason of his business experience, financial standing, or trade connections or by reason of previous or current legal proceedings involving a felony violation of any other provision of Federal criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes, not likely to maintain operations in compliance with this chapter;
(b) Has been convicted of a felony violation of any provision of Federal or State criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes; or
(c) Has failed to disclose any material information required or made any material false statement in the application therefor.
#### § 41.239 Notice of contemplated disapproval.
If the appropriate TTB officer has reason to believe that the applicant is not entitled to a permit, the appropriate TTB officer will promptly give to the applicant notice of the contemplated disapproval of the application and opportunity for hearing thereon in accordance with [part 71 of this chapter](/current/title-27/part-71). If, after such notice and opportunity for hearing, the appropriate TTB officer finds that the applicant is not entitled to a permit, an order will be prepared stating the findings on which the application is denied.
#### § 41.240 Issuance of permit.
If the application for the permit required under this subpart is approved, the appropriate TTB officer will issue the permit on TTB F 5200.24.
\[[78 FR 38573](https://www.federalregister.gov/citation/78-FR-38573), June 27, 2013]
#### § 41.241 Duration of permit.
(a) *Permits with an effective date on or after August 26, 2013.* A permit issued under [§ 41.240](/current/title-27/section-41.240) bearing an effective date of August 26, 2013 or later will be valid for a period of five years from the effective date shown on the permit. Provided a timely application for renewal is filed under [§ 41.242](/current/title-27/section-41.242), the expiring permit will continue in effect until final action is taken by TTB on the application for renewal.
(b) *Permits with an effective date prior to August 26, 2013.* A person operating as an importer of processed tobacco that holds a permit bearing an effective date that is prior to August 26, 2013 and that wishes to continue operations as an importer of processed tobacco must apply for and receive a new permit issued under [§ 41.240](/current/title-27/section-41.240). The person must file the application under [§ 41.232](/current/title-27/section-41.232) within 150 days after August 26, 2013, or within 30 days prior to the expiration date shown on the existing permit form, whichever is later. If a person timely files an application but that application is not complete (that is, the applicant has not submitted information or documentation sufficient for TTB to take action on the permit), and if the applicant has not provided the missing information within one year of a written request for it or within any shorter time period specified in the written request, the permit application will be deemed abandoned and the applicant will be notified in writing that no permit will be issued in response to the incomplete application. Provided that a timely application is filed, the person may continue operations under the existing permit until TTB takes final action on the application for the new permit.
\[[78 FR 38573](https://www.federalregister.gov/citation/78-FR-38573), June 27, 2013]
#### § 41.242 Renewal of permit.
(a) *Permits with an effective date on or after August 26, 2013.* A person operating as an importer of processed tobacco that holds a permit issued under [§ 41.240](/current/title-27/section-41.240) bearing an effective date of August 26, 2013 or later, and that wishes to continue operations beyond the expiration of the permit, must apply for renewal of the permit within 30 days prior to expiration of the permit, in accordance with instructions provided with the renewal application form. Permits will be renewed only for those persons that have engaged in the importing of processed tobacco under the current permit during the one year period immediately prior to the date of the application to renew.
(b) *Permits with an effective date prior to August 26, 2013.* A person may not obtain renewal of a permit bearing an effective date prior to August 26, 2013. A person operating as an importer of processed tobacco that holds a permit bearing an effective date prior to August 26, 2013, and that wishes to continue in operations as an importer of processed tobacco, must apply for and receive a new permit for issuance under [§ 41.240](/current/title-27/section-41.240) and in accordance with the rules contained in [§ 41.241(b)](/current/title-27/section-41.241#p-41.241\(b\)).
\[[78 FR 38573](https://www.federalregister.gov/citation/78-FR-38573), June 27, 2013]
#### § 41.243 Retention of permit and supporting documents.
The importer of processed tobacco must retain the permit, together with the copy of the application and supporting documents returned with the permit, at the same place where the records required by this subpart are kept. The permit and supporting documents must be made available for inspection by any appropriate TTB officer upon request.
### Changes After Original Qualification
#### § 41.251 Change in name.
(a) *Change in individual name.* When there is a change in the name of an individual operating under a permit as an importer of processed tobacco, the importer must, within 30 days of such change, make application on TTB F 5230.5 for an amended permit.
(b) *Change in trade name.* When there is a change in a trade name used by an importer of processed tobacco in connection with operations authorized by the permit, the importer must, within 30 days of such change, make application on TTB F 5230.5 for an amended permit to reflect such change. This requirement also applies to the addition or discontinuance of a trade name. The importer must also furnish a true copy of any new trade name certificate or document issued to the importer, or statement in lieu thereof, required by [§ 41.236](/current/title-27/section-41.236).
(c) *Change in corporate name.* When there is a change in the corporate name of an importer of processed tobacco, the importer must, within 30 days of such change, make application on TTB F 5230.5 for an amended permit. The importer must also furnish such documents as may be necessary to establish that the corporate name has been changed.
#### § 41.252 Change in ownership or control.
(a) *Fiduciary successor.* If an administrator, executor, receiver, trustee, assignee, or other fiduciary is to take over the business of an importer of processed tobacco as a continuing operation, such fiduciary shall, before commencing operations, make application for permit in accordance with [§ 41.232](/current/title-27/section-41.232), furnish certified copies, in duplicate, of the order of the court, or other pertinent documents, showing his appointment and qualification as such fiduciary. However, where a fiduciary intends only to liquidate the business, qualification as an importer of processed tobacco will not be required if he promptly files with the appropriate TTB officer a written statement to that effect.
(b) *Transfer of ownership.* If a transfer in ownership of the business of an importer of processed tobacco (including a change of any member of a partnership or association) is to be made, such importer shall give notice, in writing, to the appropriate TTB officer, naming the proposed successor and the desired effective date of the transfer. The proposed successor must, before commencing operations, qualify as an importer of processed tobacco in accordance with this subpart. The importer must give notice of the transfer, and the proposed successor must make application for permit, in ample time for examination and approval thereof before the desired date of such change. The predecessor must make a concluding report, in accordance with [§ 41.262](/current/title-27/section-41.262), and surrender the permit with the report. The successor must make a first report, in accordance with [§ 41.262](/current/title-27/section-41.262).
(c) *Change in officers, directors, or stockholders of a corporation.* Upon election or appointment (excluding successive reelection or reappointment) of any officer or director of a corporation operating as an importer of processed tobacco, or upon any occurrence that results in a person acquiring ownership or control of more than ten percent in aggregate of the outstanding stock of such corporation, the importer shall, within 30 days of such action, so notify the appropriate TTB officer in writing, giving the identity of such person. When there is any change in the authority furnished under [§ 41.271](/current/title-27/section-41.271) for officers to act on behalf of the corporation, the importer must immediately so notify the appropriate TTB officer in writing.
(d) *Change in control of corporation.* When the issuance, sale, or transfer of the stock of a corporation operating as an importer of processed tobacco results in a change in the identity of the principal stockholders exercising actual or legal control of the operations of the corporation, the corporate manufacturer must, within 30 days after the change occurs, make application on TTB F 5230.4 for a new permit. Otherwise, the present permit shall be automatically terminated at the expiration of such 30-day period, and the importer must make a concluding report, in accordance with [§ 41.262](/current/title-27/section-41.262), and surrender the permit with the report. If the application for a new permit is timely made, the present permit will continue in effect pending final action with respect to such application.
#### § 41.253 Change in location or address.
Whenever an importer of processed tobacco intends to relocate the principal business office, the importer must, before commencing operations at the new location, make application on TTB F 5230.5, and obtain an amended permit. Whenever any change occurs in the address, but not the location, of the principal business office of an importer of processed tobacco, as a result of action of local authorities, the importer must, within 30 days of such change, make application on TTB F 5230.5 for an amended permit. Whenever the importer wishes to change the location of the premises used for the storage of processed tobacco imported or received by the importer to an extent that would be inconsistent with the location information submitted with the importer's last permit application, the importer must apply for, and obtain, an amended permit before such a change in premises takes place.
\[T.D. TTB-78, [74 FR 29416](https://www.federalregister.gov/citation/74-FR-29416), June 22, 2009, as amended by T.D. TTB-104, [77 FR 37304](https://www.federalregister.gov/citation/77-FR-37304), June 21, 2012]
### Operations of Importers of Processed Tobacco
#### § 41.261 Records.
(a) Any person who imports, or who knowingly causes to be imported, processed tobacco must make and keep records of operations and transactions. A person purchasing processed tobacco from the importer in a domestic transaction and who does not knowingly cause the processed tobacco to be imported is not required to make and keep records unless the terms and conditions of the importation are controlled by the person placing the order with the importer (for example, the importer is not an independent contractor but the agent of the person placing the order). Records maintained must reflect the date and quantity of processed tobacco:
(1) Imported;
(2) Received otherwise than through importation, together with the name and address of the person from whom it was received;
(3) Returned to customs custody or exported;
(4) Transferred or sold to a person who holds a TTB permit as an importer or manufacturer of tobacco products or of processed tobacco or as an export warehouse proprietor;
(5) Except in the case of returns to customs custody or exportations, transferred or sold to a person who does not hold a TTB permit as an importer or manufacturer of tobacco products or of processed tobacco or as an export warehouse proprietor; and
(6) Lost or destroyed; and
(7) Transferred between buildings that are covered under the same permit but that are not located in the same city, town, village, or State.
(b) The records of any importer who transfers or sells processed tobacco to a person who does not hold a TTB permit as an importer or manufacturer of tobacco products or of processed tobacco or as an export warehouse proprietor must include dated, commercial records that show the following information about each removal:
(1) The full name and business address (including city and State) of the purchaser (if there is a purchaser) or the full name and business address of the recipient (if there is no purchaser), or personal address if the purchaser or recipient is not a business;
(2) The full name, business address (including city and State), and driver's license number of the person picking up the processed tobacco for delivery;
(3) The license number of the vehicle in which the processed tobacco is picked up for delivery to purchaser or transferee;
(4) The street address of the destination of the processed tobacco;
(5) The quantity of processed tobacco in the shipment.
(c) The entries in the records required under this section must be made for each day by the close of the business day following the day on which the transfer or sale occurs. There is no particular format prescribed for the records required under this section (and commercial records may be used), although the required information must be readily ascertainable from the records kept. In the case of a removal under [paragraph (a)(5)](/current/title-27/section-41.261#p-41.261\(a\)\(5\)) of this section that involves shipment by a common carrier, the appropriate TTB officer may approve an alternate method or procedure pursuant to [§ 41.26 of this part](/current/title-27/part-41/section-41.26) through which the importer may keep records regarding the common carrier and its means of tracking (including pick up and delivery) of the shipment in lieu of the information required by [paragraphs (b)(2)](/current/title-27/section-41.261#p-41.261\(b\)\(2\)) and [(b)(3)](/current/title-27/section-41.261#p-41.261\(b\)\(3\)) of this section. No records are required to be kept under this part regarding processed tobacco within customs custody, although this will not preclude TTB review of records related to such processed tobacco as may be appropriate for purposes of the enforcement of the provisions of this part.
([26 U.S.C. 5741](https://www.govinfo.gov/link/uscode/26/5741))
\[T.D. TTB-78, [74 FR 29416](https://www.federalregister.gov/citation/74-FR-29416), June 22, 2009, as amended by T.D. TTB-104, [77 FR 37305](https://www.federalregister.gov/citation/77-FR-37305), June 21, 2012]
#### § 41.262 Reports.
(a) *General.* Every importer of processed tobacco must prepare a monthly report on TTB F 5220.6 in accordance with the instructions for the form. The report must be prepared at the times specified in this section and must be prepared whether or not any operations or transactions occurred during the period covered by the report. The importer must retain a copy of each report in accordance with the provisions of this subpart. The importer need not include in the reports under this part information regarding processed tobacco that is in customs custody.
(b) *First report(s).* The first monthly report must be submitted by the 15th day of the month following the month in which the permit is issued. If the importer is operating as an importer of processed tobacco under the transitional rule in accordance with [§ 41.233](/current/title-27/section-41.233), the importer must submit the first report by the 15th day of the month following the month in which TTB provides written acknowledgement of the receipt of the application filed under [§ 41.232](/current/title-27/section-41.232).
(c) *Reports of no activity.* Reports with the notation “No Activity” must be made for those months in which no activity occurs.
(d) *Reports of sales and transfers.*
(1) Except as otherwise provided in [paragraphs (d)(2)](/current/title-27/section-41.262#p-41.262\(d\)\(2\)) and [(3)](/current/title-27/section-41.262#p-41.262\(d\)\(3\)) of this section, an importer that exports processed tobacco or transfers or sells processed tobacco to someone other than a person holding a permit as an importer or manufacturer of processed tobacco or tobacco products or as an export warehouse proprietor must report each such exportation, sale, or transfer on TTB F 5250.2 by the close of the next business day following the day of exportation, sale, or transfer, in accordance with the instructions on the form.
(2) In the case of removals for export, as an alternative to the procedure prescribed in [paragraph (d)(1)](/current/title-27/section-41.262#p-41.262\(d\)\(1\)) of this section, the importer may submit to TTB monthly summary reports of such removals in a format approved by the appropriate TTB officer. Prior to the use of such an alternate procedure, the importer must obtain written approval from the appropriate TTB officer.
(3) An importer that ships or transfers processed tobacco for scientific testing or testing of equipment which results in the destruction of the processed tobacco or the return of the processed tobacco is not required to report such shipment or transfer on TTB F 5250.2.
(e) *Concluding report.* When a transfer of ownership of the business of an importer of processed tobacco described in [§ 41.252(b)](/current/title-27/section-41.252#p-41.252\(b\)) occurs, or when a change in control of a corporation described in [§ 41.252(d)](/current/title-27/section-41.252#p-41.252\(d\)) occurs, a concluding report with the notation “Concluding Report” must be made for the month or partial month during which the transfer of ownership or change in control becomes effective. A concluding report must also be made for the month or partial month during which an importer concludes operations under the permit or authorization.
([26 U.S.C. 5722](https://www.govinfo.gov/link/uscode/26/5722))
\[T.D. TTB-78, [74 FR 29416](https://www.federalregister.gov/citation/74-FR-29416), June 22, 2009, as amended by T.D. TTB-104, [77 FR 37305](https://www.federalregister.gov/citation/77-FR-37305), June 21, 2012; T.D. TTB-196, [89 FR 87947](https://www.federalregister.gov/citation/89-FR-87947), Nov. 6, 2024]
#### § 41.263 Maintenance of records and reports.
All records and reports required by this subpart must be maintained separately, chronologically by transaction or reporting date, at the importer's principal place of business. The appropriate TTB officer may, pursuant to a written request, authorize files, or an individual file, to be maintained at another business location under the control of the importer, provided that the alternative location does not cause undue inconvenience to TTB when attempting to examine the files and does not delay the timely transmittal of any documents required to be submitted to TTB.
([26 U.S.C. 5741](https://www.govinfo.gov/link/uscode/26/5741))
#### § 41.264 Inventories.
Every importer of processed tobacco must provide a true and accurate inventory of any processed tobacco stored on premises designated pursuant to [§ 41.237](/current/title-27/section-41.237). The importer must make such an inventory at the time of commencing business, at the time of transferring ownership, at the time of changing the location of facilities in which processed tobacco is stored, at the time of concluding business, and at such other time as the appropriate TTB officer may require. A specific format is not prescribed. For permits issued prior to June 21, 2012, the permittee has 180 days from June 21, 2012, to make an inventory as required under this paragraph.
\[T.D. TTB-104, [77 FR 37305](https://www.federalregister.gov/citation/77-FR-37305), June 21, 2012]
#### § 41.265 Processed tobacco importation process.
(a) *General.* In the case of processed tobacco imported into the United States, the importer, if filing electronically, must file with U.S. Customs and Border Protection (CBP) the information specified in [paragraph (b)](/current/title-27/section-41.265#p-41.265\(b\)) of this section at the time of filing the entry or entry summary, as appropriate, along with any other information that is required by CBP to be filed as part of the entry or entry summary for CBP purposes. If the information required by this section is required by, and filed with, CBP for purposes of meeting CBP requirements, such filing will also satisfy the requirements of this section. Regardless of the method of filing, the importer must retain as a record the information required by this section, any information required as part of the entry or entry summary by CBP for CBP purposes, and any supporting documentation, and must make such records available upon request by the appropriate TTB officer or a customs officer.
(b) *Information required.* The following information is required, as described in [paragraph (a)](/current/title-27/section-41.265#p-41.265\(a\)) of this section:
(1) The number of the importer's permit issued under [subpart K](/current/title-27/part-41/subpart-K) or [M of this part](/current/title-27/part-41/subpart-M);
(2) The employer identification number (EIN) assigned to the importer by the Internal Revenue Service and provided to TTB by the importer on its permit application to TTB on TTB Form 5230.4;
(3) The name and address of the ultimate consignee;
(4) A description of the product as “processed tobacco” for Internal Revenue Code purposes; and
(5) The quantity of processed tobacco.
(Approved by the Office of Management and Budget under control number 1513-0064)
\[[81 FR 94210](https://www.federalregister.gov/citation/81-FR-94210), Dec. 22, 2016]
### Other Provisions Applicable to Importers of Processed Tobacco
#### § 41.271 Power of attorney.
If the application for a permit or authorization or any report or other document required to be executed under this subpart is to be signed by an individual (including one of the partners for a partnership or one of the members of an association) as an attorney in fact for any person, or if an individual is otherwise to officially represent such person, power of attorney on TTB F 5000.8 shall be furnished to the appropriate TTB officer. Such power of attorney is not required for persons whose authority is furnished with the corporate documents as required by [§ 41.234](/current/title-27/section-41.234). Form 5000.8 does not have to be filed again with an appropriate TTB officer where such form has previously been submitted to TTB and is still in effect.
#### § 41.272 Cross reference.
For other applicable provisions pertaining to forms prescribed, retention of records, interference with administration, alternate methods or procedures, emergency variations from requirements, penalties and forfeitures, and delegations of the Administrator, see [subpart C of this part](/current/title-27/part-41/subpart-C).
#### § 41.273 Suspension and revocation of permit.
Where the appropriate TTB officer has reason to believe that an importer of processed tobacco has not in good faith complied with the provisions of [26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201), and regulations thereunder, or with any other provision of 26 U.S.C. with intent to defraud, or has violated any condition of his permit, or has failed to disclose any material information required or made any material false statement in the application for the permit, or is, by reason of previous or current legal proceedings involving a felony violation of any other provision of Federal criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes, not likely to maintain operations in compliance with [26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201), or has been convicted of a felony violation of any provision of Federal or State criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes, the appropriate TTB officer shall issue an order, stating the facts charged, citing such person to show cause why his permit should not be suspended or revoked. Such citation shall be issued and opportunity for hearing afforded in accordance with [part 71 of this chapter](/current/title-27/part-71), which part is applicable to such proceedings. If, after hearing, the hearing examiner, or on appeal, the Administrator, finds that such person has not shown cause why his permit should not be suspended or revoked, such permit shall be suspended for such period as the appropriate TTB officer deems proper or shall be revoked.
# Part 44 — EXPORTATION OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES, WITHOUT PAYMENT OF TAX, OR WITH DRAWBACK OF TAX
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-44
Full text of 27 CFR Part 44 — EXPORTATION OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES, WITHOUT PAYMENT OF TAX, OR WITH DRAWBACK OF TAX. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 44—EXPORTATION OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES, WITHOUT PAYMENT OF TAX, OR WITH DRAWBACK OF TAX
#### Authority:
[26 U.S.C. 448](https://www.govinfo.gov/link/uscode/26/448), [5701-5705](https://www.govinfo.gov/link/uscode/26/5701), [5711-5713](https://www.govinfo.gov/link/uscode/26/5711), [5721-5723](https://www.govinfo.gov/link/uscode/26/5721), [5731-5734](https://www.govinfo.gov/link/uscode/26/5731), [5741](https://www.govinfo.gov/link/uscode/26/5741), [5751](https://www.govinfo.gov/link/uscode/26/5751), [5754](https://www.govinfo.gov/link/uscode/26/5754), [6061](https://www.govinfo.gov/link/uscode/26/6061), [6065](https://www.govinfo.gov/link/uscode/26/6065), [6109](https://www.govinfo.gov/link/uscode/26/6109), [6151](https://www.govinfo.gov/link/uscode/26/6151), [6402](https://www.govinfo.gov/link/uscode/26/6402), [6404](https://www.govinfo.gov/link/uscode/26/6404), [6806](https://www.govinfo.gov/link/uscode/26/6806), [7011](https://www.govinfo.gov/link/uscode/26/7011), [7212](https://www.govinfo.gov/link/uscode/26/7212), [7342](https://www.govinfo.gov/link/uscode/26/7342), [7606](https://www.govinfo.gov/link/uscode/26/7606), [7805](https://www.govinfo.gov/link/uscode/26/7805); [31 U.S.C. 9301](https://www.govinfo.gov/link/uscode/31/9301), [9303](https://www.govinfo.gov/link/uscode/31/9303), [9304](https://www.govinfo.gov/link/uscode/31/9304), [9306](https://www.govinfo.gov/link/uscode/31/9306).
#### Source:
Redesignated by T.D. ATF-464, [66 FR 43480](https://www.federalregister.gov/citation/66-FR-43480), Aug. 20, 2001.
#### Editorial Note:
Nomenclature changes to part 44 appear by T.D. ATF-464, [66 FR 43480](https://www.federalregister.gov/citation/66-FR-43480), Aug. 20, 2001, and T.D. ATF-480, [67 FR 30801-30803](https://www.federalregister.gov/citation/67-FR-30801), May 8, 2002.
## Subpart A—Scope of Regulations
#### § 44.1 Exportation of tobacco products, and cigarette papers and tubes, without payment of tax, or with drawback of tax.
This part contains the regulations relating to the exportation (including supplies for vessels and aircraft) of tobacco products and cigarette papers and tubes, without payment of tax; the qualification of, and operations by, export warehouse proprietors; and the allowance of drawback of tax paid on tobacco products, and cigarette papers and tubes exported.
\[T.D. 6871, [31 FR 48](https://www.federalregister.gov/citation/31-FR-48), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28087](https://www.federalregister.gov/citation/51-FR-28087), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 44.2 Forms prescribed.
(a) The appropriate TTB officer is authorized to prescribe all forms required by this part. All of the information called for in each form shall be furnished as indicated by the headings on the form and the instructions on or pertaining to the form. In addition, information called for in each form shall be furnished as required by this part. The form will be filed in accordance with the instructions for the form.
(b) Forms prescribed by this part are available for printing through the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
([5 U.S.C. 552(a)](https://www.govinfo.gov/link/uscode/5/552) (80 Stat. 383, as amended))
\[T.D. ATF-92, [46 FR 46922](https://www.federalregister.gov/citation/46-FR-46922), Sept. 23, 1981, as amended by T.D. ATF-232, [51 FR 28087](https://www.federalregister.gov/citation/51-FR-28087), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-372, [61 FR 20725](https://www.federalregister.gov/citation/61-FR-20725), May 8, 1996; T.D. ATF-480, [67 FR 30801](https://www.federalregister.gov/citation/67-FR-30801), May 8, 2002; T.D. TTB-44, [71 FR 16952](https://www.federalregister.gov/citation/71-FR-16952), Apr. 4, 2006; T.D. TTB-91, [76 FR 5480](https://www.federalregister.gov/citation/76-FR-5480), Feb. 1, 2011; T.D. TTB-196, [89 FR 87948](https://www.federalregister.gov/citation/89-FR-87948), Nov. 6, 2024]
#### § 44.3 Delegations of the Administrator.
Most of the regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.44, Delegation of the Administrator's Authorities in [27 CFR Part 44](/current/title-27/part-44), Exportation of Tobacco Products and Cigarette Papers and Tubes, Without Payment of Tax, or With Drawback of Tax. You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-44, [71 FR 16952](https://www.federalregister.gov/citation/71-FR-16952), Apr. 4, 2006, as amended by T.D. TTB-196, [89 FR 87948](https://www.federalregister.gov/citation/89-FR-87948), Nov. 6, 2024]
## Subpart B—Definitions
#### § 44.11 Meaning of terms.
When used in this part and in forms prescribed under this part, the following terms shall have the meanings given in this section, unless the context clearly indicates otherwise. Words in the plural form shall include the singular, and vice versa, and words indicating the masculine gender shall include the feminine. The terms “includes” and “including” do not exclude things not listed which are in the same general class.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.44, Delegation of the Administrator's Authorities in [27 CFR Part 44](/current/title-27/part-44), Exportation of Tobacco Products and Cigarette Papers and Tubes, Without Payment of Tax, or With Drawback of Tax.
*Chewing tobacco.* Any leaf tobacco that is not intended to be smoked.
*Cigar.* Any roll of tobacco wrapped in leaf tobacco or in any substance containing tobacco (other than any roll of tobacco which is a cigarette within the definition of “cigarette” given in this section).
*Cigarette.*
(a) Any roll of tobacco wrapped in paper or in any substance not containing tobacco, and
(b) Any roll of tobacco wrapped in any substance containing tobacco which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette described in paragraph (a) of this definition.
*Cigarette paper.* Paper, or other material except tobacco, prepared for use as a cigarette wrapper.
*Cigarette tube.* Cigarette paper made into a hollow cylinder for use in making cigarettes.
*Customs officer.* An officer of U.S. Customs and Border Protection (CBP) or any agent or other person authorized by law to perform the duties of such an officer.
*Customs warehouse.* A customs bonded manufacturing warehouse, class 6, where cigars are manufactured of imported tobacco.
*District director of customs.* The district director of customs at a headquarters port of the district (except the district of New York, N.Y.); the area directors of customs in the district of New York, N.Y.; and the port director at a port not designated as a headquarters port.
*Exportation or export.* A severance of tobacco products or cigarette papers or tubes from the mass of things belonging to the United States with the intention of uniting them to the mass of things belonging to some foreign country. For the purposes of this part, shipment from the United States to Puerto Rico, the Virgin Islands, or a possession of the United States, shall be deemed exportation, as will the clearance from the United States of tobacco products and cigarette papers and tubes for consumption beyond the jurisdiction of the internal revenue laws of the United States, i.e., beyond the 3-mile limit or international boundary, as the case may be.
*Export warehouse.* A bonded internal revenue warehouse for the storage of tobacco products or cigarette papers or tubes or any processed tobacco, upon which the internal revenue tax has not been paid, for subsequent shipment to a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States, or for consumption beyond the jurisdiction of the internal revenue laws of the United States.
*Export warehouse proprietor.* Any person who operates an export warehouse.
*Factory.* The premises of a manufacturer of tobacco products or cigarette papers and tubes in which that person carries on such business.
*Foreign-trade zone.* A foreign-trade zone established and operated pursuant to the Act of June 18, 1934, as amended.
*In bond.* The status of tobacco products and cigarette papers and tubes, which come within the coverage of a bond securing the payment of internal revenue taxes imposed by [26 U.S.C. 5701](https://www.govinfo.gov/link/uscode/26/5701) or [7652](https://www.govinfo.gov/link/uscode/26/7652), and in respect to which such taxes have not been determined as provided by regulations in this chapter, including
(a) such articles in a factory or an export warehouse,
(b) such articles removed, transferred, or released, pursuant to [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704), and with respect to which relief from the tax liability has not occurred, and
(c) such articles on which the tax has been determined, or with respect to which relief from the tax liability has occurred, which have been returned to the coverage of a bond.
*Manufacturer of cigarette papers and tubes.* Any person who manufactures cigarette paper, or makes up cigarette paper into tubes, except for his own personal use or consumption.
Manufacturer of tobacco products. (1) Any person who manufactures cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own tobacco, other than:
(i) A person who produces tobacco products solely for that person's own consumption or use; or
(ii) A proprietor of a customs bonded manufacturing warehouse with respect to the operation of such warehouse.
(2) The term “Manufacturer of tobacco products” includes any person who for commercial purposes makes available for consumer use (including such consumer's personal consumption or use under paragraph (1)(i) of this definition) a machine capable of making cigarettes, cigars, or other tobacco products. A person making such a machine available for consumer use shall be deemed the person making the removal with respect to any tobacco products manufactured by such machine. A person who sells a machine directly to a consumer at retail for a consumer's personal home use is not making a machine available for commercial purposes if such machine is not used at a retail premises and is designed to produce tobacco products only in personal use quantities.
*Package.* The immediate container in which tobacco products, processed tobacco, or cigarette papers or tubes are put up by the manufacturer and offered for sale or delivery to the ultimate consumer. For purposes of this definition, a container of processed tobacco, the contents of which weigh 10 pounds or less (including any added non-tobacco ingredients or constituents), that is removed within the meaning of this part, is deemed to be a package offered for sale or delivery to the ultimate consumer.
*Person.* An individual, partnership, association, company, corporation, estate, or trust.
*Pipe tobacco.* Any tobacco which, because of its appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or purchased by, consumers as tobacco to be smoked in a pipe.
*Processed tobacco.* Processed tobacco is any tobacco that has undergone processing, but does not include tobacco products. For purposes of this definition, the processing of tobacco does not include the farming or growing of tobacco or the handling of tobacco solely for sale, shipment, or delivery to a manufacturer of tobacco products or processed tobacco, nor does the processing of tobacco include curing, baling, or packaging activities. For purposes of this definition, the processing of tobacco includes, but is not limited to, stemming (that is, removing the stem from the tobacco leaf), fermenting, threshing, cutting, or flavoring the tobacco, or otherwise combining the tobacco with non-tobacco ingredients.
*Removal or remove.* The removal of tobacco products or cigarette papers or tubes from either the factory or the export warehouse covered by the bond of the manufacturer or proprietor.
*Roll-your-own tobacco.* Any tobacco which, because of its appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or purchased by, consumers as tobacco for making cigarettes or cigars, or for use as wrappers thereof.
*Sale price.* The price for which large cigars are sold by the manufacturer, determined in accordance with [§§ 40.22](/current/title-27/section-40.22) or [41.39](/current/title-27/section-41.39).
*Smokeless tobacco.* Any snuff or chewing tobacco.
*Snuff.* Any finely cut, ground, or powdered tobacco that is not intended to be smoked.
*Special tax.* The special (occupational) tax on manufacturers of tobacco products, manufacturers of cigarette papers and tubes, and export warehouse proprietors, imposed by [26 U.S.C. 5731](https://www.govinfo.gov/link/uscode/26/5731).
*State.* “State” shall, for the purposes of this part, be construed to include the District of Columbia.
*Tobacco products.* Cigars, cigarettes, smokeless tobacco, pipe tobacco, and roll-your-own tobacco.
*United States.* “United States” when used in a geographical sense shall include only the States and the District of Columbia.
*U.S.C.* The United States Code.
*Zone operator.* The person to whom the privilege of establishing, operating, and maintaining a foreign-trade zone has been granted by the Foreign-Trade Zones Board created by the Act of June 18, 1934, as amended.
*Zone restricted status.* The status assigned to tobacco products and cigarette papers and cigarette tubes taken into a foreign trade zone from the customs territory of the United States for the sole purpose of exportation or storage until exported.
\[T.D. ATF-48, [43 FR 13556](https://www.federalregister.gov/citation/43-FR-13556), Mar. 31, 1978]
#### Editorial Note:
For Federal Register citations affecting [§ 44.11](/current/title-27/section-44.11), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
## Subpart Ba—Special (Occupational) Taxes
#### Source:
T.D. ATF-271, [53 FR 17563](https://www.federalregister.gov/citation/53-FR-17563), May 17, 1988, unless otherwise noted.
#### § 44.31 Liability for special tax.
(a) *Export warehouse proprietor.* Every export warehouse proprietor shall pay a special (occupational) tax at a rate specified by [§ 44.32](/current/title-27/section-44.32). The tax shall be paid on or before the date of commencing the business of an export warehouseman, and thereafter every year on or before July 1. On commencing business, the tax shall be computed from the first day of the month in which liability is incurred, through the following June 30. Thereafter, the tax shall be computed for the entire year (July 1 through June 30).
(b) \[Reserved]
(c) *Each place of business taxable.* An export warehouse proprietor under this part incurs special tax liability at each place of business in which an occupation subject to special tax is conducted. A place of business means the entire office, plant or area of the business in any one location under the same proprietorship. Passageways, streets, highways, rail crossings, waterways, or partitions dividing the premises are not sufficient separation to require additional special tax, if the divisions of the premises are otherwise contiguous.
(d) *Payment of tax.* Special tax must be paid by return. The prescribed return is TTB Form 5630.5t, Special Tax Registration and Return—Tobacco. Special tax returns, with payment of tax, must be filed with TTB in accordance with the instructions on the form and the requirements of [subpart D of part 46 of this chapter](/current/title-27/part-46/subpart-D).
([26 U.S.C. 5731](https://www.govinfo.gov/link/uscode/26/5731), [5733](https://www.govinfo.gov/link/uscode/26/5733))
\[T.D. ATF-271, [53 FR 17563](https://www.federalregister.gov/citation/53-FR-17563), May 17, 1988, as amended by T.D. TTB-79, [74 FR 37419](https://www.federalregister.gov/citation/74-FR-37419), July 28, 2009]
#### § 44.32 Rate of special tax.
(a) *General.* Title 26 U.S.C. 5731(a)(3) imposes a special tax of \$1,000 per year on every export warehouse proprietor.
(b) *Reduced rate for small proprietors.* Title 26 U.S.C. 5731(b) provides for a reduced rate of $500 per year with respect to any export warehouse proprietor whose gross receipts (for the most recent taxable year ending before the first day of the taxable period to which the special tax imposed by [§ 44.31](/current/title-27/section-44.31) relates) are less than $500,000. The “taxable year” to be used for determining gross receipts is the taxpayer's income tax year. All gross receipts of the taxpayer shall be included, not just the gross receipts of the business subject to special tax. Proprietors of new businesses that have not yet begun a taxable year, as well as proprietors of existing businesses that have not yet ended a taxable year, who commence a new activity subject to special tax, qualify for the reduced special (occupational) tax rate, unless the business is a member of a “controlled group”; in that case, the rules of [paragraph (c)](/current/title-27/section-44.32#p-44.32\(c\)) of this section shall apply.
(c) *Controlled group.* All persons treated as one taxpayer under [26 U.S.C. 5061(e)(3)](https://www.govinfo.gov/link/uscode/26/5061) shall be treated as one taxpayer for the purpose of determining gross receipts under [paragraph (b)](/current/title-27/section-44.32#p-44.32\(b\)) of this section. “Controlled group” means a controlled group of corporations, as defined in [26 U.S.C. 1563](https://www.govinfo.gov/link/uscode/26/1563) and implementing regulations in [26 CFR 1.1563-1](/current/title-26/section-1.1563-1) through [1.1563-4](/current/title-26/section-1.1563-4), except that the words “at least 80 percent” shall be replaced by the words “more than 50 percent” in each place they appear in subsection (a) of [26 U.S.C. 1563](https://www.govinfo.gov/link/uscode/26/1563), as well as in the implementing regulations. Also, the rules for a “controlled group of corporations” apply in a similar fashion to groups which include partnerships and/or sole proprietorships. If one entity maintains more than 50% control over a group consisting of corporations and one, or more, partnerships and/or sole proprietorships, all of the members of the controlled group are one taxpayer for the purpose of this section.
(d) *Short taxable year.* Gross receipts for any taxable year of less than 12 months shall be annualized by multiplying the gross receipts for the short period by 12 and dividing the result by the number of months in the short period as required by [26 U.S.C. 448(c)(3)](https://www.govinfo.gov/link/uscode/26/448).
(e) *Returns and allowances.* Gross receipts for any taxable year shall be reduced by returns and allowances made during such year under [26 U.S.C. 448(c)(3)](https://www.govinfo.gov/link/uscode/26/448).
([26 U.S.C. 448](https://www.govinfo.gov/link/uscode/26/448), [5061](https://www.govinfo.gov/link/uscode/26/5061), [5731](https://www.govinfo.gov/link/uscode/26/5731))
#### § 44.33 Cross reference.
For additional rules pertaining to liability for special (occupational) tax, filing special tax returns, issuance and examination of special tax stamps, and notification of changes to special tax stamps, see [subpart D of part 46 of this chapter](/current/title-27/part-46/subpart-D).
\[T.D. TTB-79, [74 FR 37419](https://www.federalregister.gov/citation/74-FR-37419), July 28, 2009]
#### §§ 44.34-44.36 \[Reserved]
## Subpart C—General
#### § 44.61 Removals, withdrawals, and shipments authorized.
(a) Tobacco products and cigarette papers and tubes may be removed from a factory or from an export warehouse, and cigars may be withdrawn from a customs bonded warehouse, without payment of tax for direct exportation or for delivery for subsequent exportation, in accordance with the provisions of this part.
(b) Tobacco products and cigarette papers and tubes are eligible for removal or transfer in bond under this part only if they bear the marks, labels, and notices required by this part.
\[[78 FR 38573](https://www.federalregister.gov/citation/78-FR-38573), June 27, 2013]
#### § 44.61a Deliveries to foreign-trade zones—export status.
Tobacco products, and cigarette papers and tubes may be removed from a factory or an export warehouse and cigars may be withdrawn from a customs warehouse, without payment of tax, for delivery to a foreign-trade zone for exportation or storage pending exportation in accordance with the provisions of this part. Such articles delivered to a foreign-trade zone under this part shall be considered exported for the purpose of the statutes and bonds under which removed and for the purposes of the internal revenue laws generally and the regulations thereunder. However, export status is not acquired until an application for admission of the articles into the zone with zone restricted status has been approved by the district director of customs pursuant to the appropriate provisions of [19 CFR chapter I](/current/title-19/chapter-I) and the required certificate of receipt of the articles in the zone has been made on Form 5200.14 as prescribed in this part.
(48 Stat. 999, as amended, 72 Stat. 1418, as amended; [19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c); [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6961, [33 FR 9491](https://www.federalregister.gov/citation/33-FR-9491), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28087](https://www.federalregister.gov/citation/51-FR-28087), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-421, [64 FR 71925](https://www.federalregister.gov/citation/64-FR-71925), Dec. 22, 1999]
#### § 44.62 Restrictions on deliveries of tobacco products, and cigarette papers and tubes to vessels and aircraft, as supplies.
Tobacco products, and cigarette papers and tubes may be removed from a factory or an export warehouse and cigars may be withdrawn from a customs warehouse, without payment of tax, for delivery to vessels and aircraft, as supplies, for consumption beyond the jurisdiction of the internal revenue laws of the United States, subject to the applicable provisions of this part. Deliveries may be made to vessels actually engaged in foreign, intercoastal, or noncontiguous territory trade (i.e., vessels operating on a regular schedule in trade or actually transporting passengers and/or cargo (a) between a port in the United States and a foreign port; (b) between the Atlantic and Pacific ports of the United States; or (c) between a port on the mainland of the United States and a port in Alaska, Hawaii, Puerto Rico, the Virgin Islands, or a possession of the United States; between a port in Alaska and a port in Hawaii; or between a port in Alaska or Hawaii and a port in Puerto Rico, the Virgin Islands, or a possession of the United States); to vessels clearing through customs for a port beyond the jurisdiction of the internal revenue laws of the United States; to vessels of war or other governmental activity; or to vessels of the United States documented to engage in the fishing business (including the whaling business), and foreign fishing (including whaling) vessels of 5 net tons or over. Such deliveries to vessels shall be subject to lading under customs supervision as provided in [§§ 44.207](/current/title-27/section-44.207) and [44.263](/current/title-27/section-44.263). As a condition to the lading of the tobacco products, and cigarette papers and tubes, the customs authorities at the port of lading may, if they deem it necessary in order to protect the revenue, require assurances, satisfactory to them, from the master of the receiving vessel that the quantities to be laden are reasonable, considering the number of persons to be carried, the vessel's itinerary, the duration of its intended voyage, etc., and that such articles are to be used exclusively as supplies on the voyage. For this purpose, the customs authorities may require the master of the receiving vessel to submit, prior to lading, customs documentation for permission to lade the articles. Where the customs authorities allow only a portion of a shipment to be laden, the remainder of the shipment shall be returned to the bonded premises of the manufacturer, export warehouse proprietor, or customs warehouse proprietor making the shipment, or otherwise disposed of as approved by the appropriate TTB officer. Deliveries may be made to aircraft that are clearing through customs and that are enroute to a place beyond the jurisdiction of the internal revenue laws of the United States, and to aircraft operating on a regular schedule between U.S. customs areas as defined in the Air Commerce Regulations ([19 CFR part 122](/current/title-19/part-122)). Deliveries may not be made to a vessel or aircraft stationed in the United States for an indefinite period and where its schedule does not include operations outside such jurisdiction.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 48](https://www.federalregister.gov/citation/31-FR-48), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-421, [64 FR 71925](https://www.federalregister.gov/citation/64-FR-71925), Dec. 22, 1999; T.D. ATF-480, [67 FR 30801](https://www.federalregister.gov/citation/67-FR-30801), May 8, 2002; [78 FR 38573](https://www.federalregister.gov/citation/78-FR-38573), June 27, 2013]
#### § 44.63 Restrictions on disposal of tobacco products, and cigarette papers and tubes on vessels and aircraft.
Tobacco products, and cigarette papers and tubes delivered to a vessel or aircraft, without payment of tax, pursuant to [§ 44.62](/current/title-27/section-44.62), shall not be sold, offered for sale, or otherwise disposed of until the vessel or aircraft is outside the jurisdiction of the internal revenue laws of the United States, i.e., outside the 3-mile limit or international boundary, as the case may be, of the United States. Where the vessel or aircraft returns within the jurisdiction of the internal revenue laws with such articles on board, the articles shall be subject to treatment under the tariff laws of the United States.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704); [19 U.S.C. 1317](https://www.govinfo.gov/link/uscode/19/1317))
\[T.D. 6871, [31 FR 49](https://www.federalregister.gov/citation/31-FR-49), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 44.64 Responsibility for delivery or exportation of tobacco products, and cigarette papers and tubes.
Responsibility for compliance with the provisions of this part with respect to the removal under bond of tobacco products, and cigarette papers and tubes, without payment of tax, for export, and for the proper delivery or exportation of such articles, and with respect to the exportation of tobacco products, and cigarette papers and tubes with benefit of drawback of tax, shall rest upon the manufacturer of such articles or the proprietor of an export warehouse or customs warehouse from whose premises such articles are removed for export, and upon the exporter who exports tobacco products, and cigarette papers and tubes with benefit of drawback of tax.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 49](https://www.federalregister.gov/citation/31-FR-49), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 44.65 Liability for tax on tobacco products, and cigarette papers and tubes.
The manufacturer of tobacco products and cigarette papers and tubes shall be liable for the taxes imposed thereon by [26 U.S.C. 5701](https://www.govinfo.gov/link/uscode/26/5701): *Provided,* That when tobacco products, and cigarette papers and tubes are transferred, without payment of tax, pursuant to [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704), between the bonded premises of manufacturers and/or export warehouse proprietors, the transferee shall become liable for the tax upon receipt by him of such articles. Any person who possesses tobacco products, or cigarette papers or tubes in violation of [26 U.S.C. 5751(a)(1)](https://www.govinfo.gov/link/uscode/26/5751) or [(2)](https://www.govinfo.gov/link/uscode/26/5751), shall be liable for a tax equal to the tax on such articles.
(72 Stat. 1417, 1424; [26 U.S.C. 5703](https://www.govinfo.gov/link/uscode/26/5703), [5751](https://www.govinfo.gov/link/uscode/26/5751))
\[T.D. 6871, [31 FR 49](https://www.federalregister.gov/citation/31-FR-49), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55856](https://www.federalregister.gov/citation/44-FR-55856), Sept. 28, 1979; T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 44.66 Relief from liability for tax.
A manufacturer of tobacco products or cigarette papers and tubes or an export warehouse proprietor is relieved of the liability for tax on tobacco products, or cigarette papers or tubes upon providing evidence satisfactory to the appropriate TTB officer of exportation or proper delivery. The evidence must comply with this part. Such evidence shall be furnished within 90 days of the date of removal of the tobacco products, or cigarette papers or tubes: *Provided,* That this period may be extended for good cause shown.
(72 Stat. 1417; [26 U.S.C. 5703](https://www.govinfo.gov/link/uscode/26/5703))
\[T.D. 6871, [31 FR 49](https://www.federalregister.gov/citation/31-FR-49), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975; T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-480, [67 FR 30801](https://www.federalregister.gov/citation/67-FR-30801), May 8, 2002]
#### § 44.67 Payment of tax.
(a) *General.* The taxes on tobacco products, and cigarette papers and tubes with respect to which the evidence described in [§ 44.66](/current/title-27/section-44.66) is not timely furnished shall become immediately due and payable. The taxes shall be paid to TTB, with sufficient information to identify the taxpayer, the nature and purpose of the payment, and the articles covered by the payment. (TTB Form 5000.24 may be used for this purpose.)
(b) *Large cigars.* The amount of tax liability on large cigars shall be based on the maximum tax rate prescribed in [§ 40.21 of this part](/current/title-27/part-40/section-40.21), unless the person liable for the tax establishes that a lower tax rate is applicable.
(All recordkeeping requirements have been approved under OMB Control No. 1512-0180)
\[T.D. ATF-80, [46 FR 18311](https://www.federalregister.gov/citation/46-FR-18311), Mar. 24, 1981, as amended by T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-251, [52 FR 19341](https://www.federalregister.gov/citation/52-FR-19341), May 22, 1987; T.D. ATF-307, [55 FR 52745](https://www.federalregister.gov/citation/55-FR-52745), Dec. 21, 1990; T.D. ATF-460, [66 FR 39093](https://www.federalregister.gov/citation/66-FR-39093), July 27, 2001]
#### § 44.68 \[Reserved]
#### § 44.69 Assessment.
Whenever any person required by law to pay tax on tobacco products, and cigarette papers and tubes fails to pay such tax, the tax shall be ascertained and assessed against such person, subject to the limitations prescribed in [26 U.S.C. 6501](https://www.govinfo.gov/link/uscode/26/6501). The tax so assessed shall be in addition to the penalties imposed by law for failure to pay such tax when required. Except in cases where delay may jeopardize collection of the tax, or where the amount is nominal or the result of an evident mathematical error, no such assessment shall be made until and after notice has been afforded such person to show cause against assessment. The person will be allowed 45 days from the date of such notice to show cause, in writing, against such assessment.
(72 Stat. 1417; [26 U.S.C. 5703](https://www.govinfo.gov/link/uscode/26/5703))
\[T.D. 6871, [31 FR 49](https://www.federalregister.gov/citation/31-FR-49), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55856](https://www.federalregister.gov/citation/44-FR-55856), Sept. 28, 1979; T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 44.70 Authority of appropriate TTB officers to enter premises.
Any appropriate TTB officer may enter in the daytime any premises where tobacco products, or cigarette papers or tubes are produced or kept, so far as it may be necessary for the purpose of examining such articles. When such premises are open at night, any appropriate TTB officer may enter them, while so open, in the performance of his official duties. The owner of such premises, or person having the superintendence of the same, who refuses to admit any appropriate TTB officer or permit him to examine such articles shall be liable to the penalties prescribed by law for the offense.
(68A Stat. 872, 903; [26 U.S.C. 7342](https://www.govinfo.gov/link/uscode/26/7342), [7606](https://www.govinfo.gov/link/uscode/26/7606))
\[T.D. 6871, [31 FR 49](https://www.federalregister.gov/citation/31-FR-49), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 44.71 Interference with administration.
Whoever, corruptly or by force or threats of force, endeavors to hinder or obstruct the administration of this part, or endeavors to intimidate or impede any appropriate TTB officer acting in his official capacity, or forcibly rescues or attempts to rescue or causes to be rescued any property, after it has been duly seized for forfeiture to the United States in connection with a violation of the internal revenue laws, shall be liable to the penalties prescribed by law.
(68A Stat. 855; [26 U.S.C. 7212](https://www.govinfo.gov/link/uscode/26/7212))
\[[25 FR 4716](https://www.federalregister.gov/citation/25-FR-4716), May 28, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
### Variations From Requirements
#### § 44.72 Alternate methods or procedures.
A manufacturer of tobacco products, an export warehouse proprietor, or a customs warehouse proprietor, on specific approval by the appropriate TTB officer as provided in this section, may use an alternate method or procedure in lieu of a method or procedure specifically prescribed in this part. The appropriate TTB officer may approve an alternate method or procedure, subject to stated conditions, when he finds that—
(a) Good cause has been shown for the use of the alternate method or procedure.
(b) The alternate method or procedure is within the purpose of, and consistent with the effect intended by, the specifically prescribed method or procedure, and affords equivalent security to the revenue, and
(c) The alternate method or procedure will not be contrary to any provision of law, and will not result in an increase in cost to the Government or hinder the effective administration of this part. No alternate method or procedure relating to the giving of any bond or to the assessment, payment, or collection of tax, shall be authorized under this section. Where a manufacturer or proprietor desires to employ an alternate method or procedure, he shall submit a written application to the appropriate TTB officer. The application shall specifically describe the proposed alternate method or procedure, and shall set forth the reasons therefor. Alternate methods or procedures shall not be employed until the application has been approved by the appropriate TTB officer. The manufacturer or proprietor shall, during the period of authorization of an alternate method or procedure, comply with the terms of the approved application. Authorization for any alternate method or procedure may be withdrawn whenever in the judgment of the appropriate TTB officer the revenue is jeopardized or the effective administration of this part is hindered. The manufacturer or proprietor shall retain, as part of his records, any authorization of the appropriate TTB officer under this section.
\[T.D. 6871, [31 FR 49](https://www.federalregister.gov/citation/31-FR-49), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975; T.D. ATF-480, [67 FR 30801](https://www.federalregister.gov/citation/67-FR-30801), May 8, 2002]
#### § 44.73 Emergency variations from requirements.
The appropriate TTB officer may approve methods of operation other than as specified in this part, where he finds that an emergency exists and the proposed variations from the specified requirements are necessary, and the proposed variations—
(a) Will afford the security and protection to the revenue intended by the prescribed specifications,
(b) Will not hinder the effective administration of this part, and
(c) Will not be contrary to any provision of law. Variations from requirements granted under this section are conditioned on compliance with the procedures, conditions, and limitations set forth in the approval of the application. Failure to comply in good faith with such procedures, conditions, and limitations shall automatically terminate the authority for such variations and the manufacturer, export warehouse proprietor, or customs warehouse proprietor, thereupon shall fully comply with the prescribed requirements of regulations from which the variations were authorized. Authority for any variations may be withdrawn whenever in the judgment of the appropriate TTB officer the revenue is jeopardized or the effective administration of this part is hindered by the continuation of such variation. Where a manufacturer or proprietor desires to employ such variation, he shall submit a written application to the appropriate TTB officer. The application shall describe the proposed variations and set forth the reasons therefor. Variations shall not be employed until the application has been approved. The manufacturer or proprietor shall retain, as part of his records, any authorization of the appropriate TTB officer under this section.
\[T.D. 6871, [31 FR 50](https://www.federalregister.gov/citation/31-FR-50), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975; T.D. ATF-480, [67 FR 30801](https://www.federalregister.gov/citation/67-FR-30801), May 8, 2002]
## Subpart D—Qualification Requirements for Export Warehouse Proprietors
#### Source:
[25 FR 4716](https://www.federalregister.gov/citation/25-FR-4716), May 28, 1960, unless otherwise noted. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975.
#### § 44.81 Persons required to qualify.
Every person who intends to engage in business as an export warehouse proprietor, as defined in this part, shall qualify as such in accordance with the provisions of this part.
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711), [5712](https://www.govinfo.gov/link/uscode/26/5712), [5713](https://www.govinfo.gov/link/uscode/26/5713))
#### § 44.82 Application for permit.
Every person, before commencing business as an export warehouse proprietor, must apply on TTB Form 5200.3 and obtain the permit provided for in [§ 44.93](/current/title-27/section-44.93). All documents required under this part to be furnished with such application shall be made a part thereof.
(72 Stat. 1421; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
\[[25 FR 4716](https://www.federalregister.gov/citation/25-FR-4716), May 28, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-480, [67 FR 30801](https://www.federalregister.gov/citation/67-FR-30801), May 8, 2002; T.D. TTB-196, [89 FR 87948](https://www.federalregister.gov/citation/89-FR-87948), Nov. 6, 2024]
#### § 44.83 Corporate documents.
Every corporation, before commencing business as an export warehouse proprietor, shall furnish with its application for permit required by [§ 44.82](/current/title-27/section-44.82), a true copy of the corporate charter or a certificate of corporate existence or incorporation, executed by the appropriate officer of the State in which incorporated. The corporation shall also furnish, in duplicate, evidence which will establish the authority of the officer or other person who executes the application for permit to execute the same; the authority of persons to sign other documents, required by this part, for the corporation; and the identity of the officers and directors, and each person who holds more than ten percent of the stock of such corporation. Where a corporation has previously filed such documents or evidence with the appropriate TTB officer, a written statement by the corporation, in duplicate, to that effect will be sufficient for the purpose of this section.
(72 Stat. 1421; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
#### § 44.84 Articles of partnership or association.
Every partnership or association, before commencing business as an export warehouse proprietor, shall furnish with its application for permit, required by [§ 44.82](/current/title-27/section-44.82) a true copy of the articles of partnership or association, if any, or certificate of partnership or association where required to be filed by any State, county, or municipality. Where a partnership or association has previously filed such documents with the appropriate TTB officer, a written statement by the partnership or association, in duplicate, to that effect will be sufficient for the purpose of this section.
(72 Stat. 1421; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
#### § 44.85 Trade name certificate.
Every person, before commencing business under a trade name as an export warehouse proprietor, shall furnish with his application for permit, required by [§ 44.82](/current/title-27/section-44.82), a true copy of the certificate or other document, if any, issued by a State, county, or municipal authority in connection with the transaction of business under such trade name. If no such certificate or other document is so required a written statement, in duplicate, to that effect by such person will be sufficient for the purpose of this section.
(72 Stat. 1421; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
\[T.D. 6961, [33 FR 9491](https://www.federalregister.gov/citation/33-FR-9491), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### § 44.86 Bond.
Every person, before commencing business as an export warehouse proprietor, shall file, in connection with his application for permit, a bond, Form 5200.29, in accordance with the applicable provisions of [§ 44.88](/current/title-27/section-44.88) and subpart F, conditioned upon compliance with the provisions of chapter 52, I.R.C., and regulations thereunder, including, but not limited to, the timely payment of taxes imposed by such chapter and penalties and interest in connection therewith for which he may become liable to the United States.
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
\[[25 FR 4716](https://www.federalregister.gov/citation/25-FR-4716), May 28, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-480, [67 FR 30801](https://www.federalregister.gov/citation/67-FR-30801), May 8, 2002; T.D. TTB-196, [89 FR 87948](https://www.federalregister.gov/citation/89-FR-87948), Nov. 6, 2024]
#### § 44.87 Power of attorney.
If the application for permit or other qualifying documents are signed by an attorney in fact for an individual, partnership, association, company, or corporation, or by one of the partners for a partnership, or by an officer of an association or company, or, in the case of a corporation, by an officer or other person not authorized to sign by the corporate documents described in [§ 44.83](/current/title-27/section-44.83), power of attorney conferring authority upon the person signing the documents shall be manifested on Form 5000.8 in accordance with its instructions.
\[[25 FR 4716](https://www.federalregister.gov/citation/25-FR-4716), May 28, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-480, [67 FR 30802](https://www.federalregister.gov/citation/67-FR-30802), May 8, 2002]
#### § 44.88 Description and diagram of premises.
The premises to be used by an export warehouse proprietor as his warehouse shall be described, in the application for permit required by [§ 44.82](/current/title-27/section-44.82), and bond required by [§ 44.86](/current/title-27/section-44.86), by number, street, and city, town, or village, and State. Such premises may consist of more than one building, which need not be contiguous: *Provided,* That such premises are located in the same city, town, or village and each located is described in the application for permit and the bond by number and street. Where such premises consist of less than an entire building, a diagram, in duplicate, shall also be furnished showing the particular floor or floors, or room or rooms, comprising the warehouse.
(72 Stat. 1421; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
#### § 44.89 Separation of premises.
Where the export warehouse premises consist of less than an entire building, the premises shall be completely separated from adjoining portions of the building, which separation shall be constructed of materials generally used in the construction of buildings and may include any necessary doors or other openings.
(72 Stat. 1421; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
#### § 44.90 \[Reserved]
#### § 44.91 Additional information.
The appropriate TTB officer may require such additional information as may be deemed necessary to determine whether the applicant is entitled to a permit. The applicant shall, when required by the appropriate TTB officer, furnish as a part of his application for permit such additional information as may be necessary for the appropriate TTB officer to determine whether the applicant is entitled to a permit.
#### § 44.92 Investigation of applicant.
(a) *Investigation.* The appropriate TTB officer shall promptly cause such inquiry or investigation to be made, as may be necessary, to verify the information furnished in connection with an application for permit and to ascertain whether the applicant is eligible for a permit. Any of the following conditions may be grounds for denial of a permit:
(1) The premises on which it is proposed to conduct the business are not adequate to protect the revenue; or
(2) The applicant (including, in the case of a corporation, any officer, director, or principal stockholder and, in the case of a partnership, a partner)—
(i) Is, by reason of his business experience, financial standing, or trade connections or by reason of previous or current legal proceedings involving a felony violation of any other provision of Federal criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes, not likely to maintain operations in compliance with this chapter;
(ii) Has been convicted of a felony violation of any provision of Federal or State criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes; or
(iii) Has failed to disclose any material information required or made any material false statement in the application therefor.
(b) *TTB action.* An appropriate TTB officer who has reason to believe that the applicant is not entitled to a permit shall promptly give the applicant notice of the contemplated disapproval of his application and opportunity for hearing thereon in accordance with [part 71 of this chapter](/current/title-27/part-71), which part (including the provisions relating to the recommended decision and to appeals) is made applicable to such proceedings. If, after such notice and opportunity for hearing, the appropriate TTB officer finds that the applicant is not entitled to a permit, he shall, by order stating the findings on which his decision is based, deny the permit.
(72 Stat. 1421; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
\[T.D. TTB-75, [74 FR 14485](https://www.federalregister.gov/citation/74-FR-14485), Mar. 31, 2009, as amended by T.D. TTB-85, [75 FR 42607](https://www.federalregister.gov/citation/75-FR-42607), July 22, 2010]
#### § 44.93 Issuance of permit.
After the application for permit, bond, and supporting documents, as required under this part, has been approved, the appropriate TTB officer will issue a permit to the export warehouse proprietor. The proprietor must keep such permit at the export warehouse and make it available for inspection by an appropriate TTB officer.
\[T.D. ATF-480, [67 FR 30802](https://www.federalregister.gov/citation/67-FR-30802), May 8, 2002]
## Subpart E—Changes Subsequent to Original Qualification of Export Warehouse Proprietors
#### Source:
[25 FR 4717](https://www.federalregister.gov/citation/25-FR-4717), May 28, 1960, unless otherwise noted. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975.
### Changes in Name
#### § 44.101 Change in individual name.
Where there is a change in the name of an individual operating as an export warehouse proprietor he shall, within 30 days of such change, make application on Form 5200.16 for an amended permit.
(72 Stat. 1421; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
\[T.D. 6961, [33 FR 9491](https://www.federalregister.gov/citation/33-FR-9491), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. TTB-196, [89 FR 87948](https://www.federalregister.gov/citation/89-FR-87948), Nov. 6, 2024]
#### § 44.102 Change in trade name.
Where there is a change in, or an addition or discontinuance of, a trade name used by an export warehouse proprietor in connection with operations authorized by his permit, the proprietor shall, within 30 days of such change, addition, or discontinuance, make application on Form 5200.16 for an amended permit to reflect such change. The proprietor shall also furnish a true copy of any new trade name certificate or document issued to him, or statement in lieu thereof, required by [§ 44.85](/current/title-27/section-44.85).
(72 Stat. 1421; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
\[T.D. 6961, [33 FR 9491](https://www.federalregister.gov/citation/33-FR-9491), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. TTB-196, [89 FR 87948](https://www.federalregister.gov/citation/89-FR-87948), Nov. 6, 2024]
#### § 44.103 Change in corporate name.
Where there is a change in the name of a corporate export warehouse proprietor the proprietor shall, within 30 days of such change, make application on Form 5200.16 for an amended permit. The proprietor shall also furnish such documents as may be necessary to establish that the corporate name has been changed.
(72 Stat. 1421; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
\[T.D. 6961, [33 FR 9491](https://www.federalregister.gov/citation/33-FR-9491), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. TTB-196, [89 FR 87948](https://www.federalregister.gov/citation/89-FR-87948), Nov. 6, 2024]
### Changes in Ownership and Control
#### § 44.104 Fiduciary successor.
If an administrator, executor, receiver, trustee, assignee, or other fiduciary, is to take over the business of an export warehouse proprietor, as a continuing operation, such fiduciary shall, before commencing operations, make application for permit and file bond as required by [subpart D of this part](/current/title-27/part-44/subpart-D), furnish certified copies, in duplicate, of the order of the court, or other pertinent documents, showing his appointment and qualification as such fiduciary, and make an opening inventory, in accordance with the provisions of [§ 44.144](/current/title-27/section-44.144); *Provided,* That where a diagram has been furnished by the predecessor, in accordance with the provisions of [§ 44.88](/current/title-27/section-44.88), the successor may adopt such diagram. However, where a fiduciary intends merely to liquidate the business, qualification as an export warehouse proprietor will not be required if he promptly files with the appropriate TTB officer a statement to that effect, together with an extension of coverage of the predecessor's bond, executed by the fiduciary, also by the surety on such bond, in accordance with the provisions of [§ 44.126](/current/title-27/section-44.126).
(72 Stat. 1421, 1422; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711), [5712](https://www.govinfo.gov/link/uscode/26/5712), [5721](https://www.govinfo.gov/link/uscode/26/5721))
#### § 44.105 Transfer of ownership.
If a transfer is to be made in ownership of the business of an export warehouse proprietor (including a change in the identity of the members of a partnership or association), such proprietor shall give notice, in writing, to the appropriate TTB officer, naming the proposed successor and the desired effective date of such transfer. The proposed successor shall, before commencing operations, qualify as a proprietor, in accordance with the applicable provisions of [subpart D of this part](/current/title-27/part-44/subpart-D): *Provided,* That where a diagram has been furnished by the proprietor in accordance with the provisions of [§ 44.88](/current/title-27/section-44.88), the proposed successor may adopt such diagram. The proprietor shall give such notice of transfer, and the proposed successor shall make application for permit and file bond, as required, in ample time for examination and approval thereof before the desired date of such change. The predecessor shall make a closing inventory and closing report, in accordance with the provisions of [§§ 44.146](/current/title-27/section-44.146) and [44.151](/current/title-27/section-44.151), respectively, and surrender, with such inventory and report, his permit, and the successor shall make an opening inventory, in accordance with the provisions of [§ 44.144](/current/title-27/section-44.144).
(72 Stat. 1421, 1422; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712), [5713](https://www.govinfo.gov/link/uscode/26/5713), [5721](https://www.govinfo.gov/link/uscode/26/5721), [5722](https://www.govinfo.gov/link/uscode/26/5722))
#### § 44.106 Change in officers or directors of a corporation.
Where there is any change in the officers or directors of a corporation operating the business of an export warehouse proprietor, the proprietor shall furnish to the appropriate TTB officer notice, in writing, of the election of the new officers or directors within 30 days after such election.
(72 Stat. 1421; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
#### § 44.107 Change in stockholders of a corporation.
Where the issuance, sale, or transfer of the stock of a corporation, operating as an export warehouse proprietor, results in a change in the identity of the principal stockholders exercising actual or legal control of the operations of the corporation, the corporate proprietor shall, within 30 days after the change occurs, make application for a new permit; otherwise, the present permit shall be automatically terminated at the expiration of such 30-day period, and the proprietor shall dispose of all cigars, cigarettes, and cigarette papers and tubes on hand, in accordance with this part, make a closing inventory and closing report, in accordance with the provisions of [§§ 44.146](/current/title-27/section-44.146) and [44.151](/current/title-27/section-44.151), respectively, and surrender his permit with such inventory and report. If the application for a new permit is timely made, the present permit shall continue in effect pending final action with respect to such application.
(72 Stat. 1421, 1422; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712), [5713](https://www.govinfo.gov/link/uscode/26/5713), [5721](https://www.govinfo.gov/link/uscode/26/5721), [5722](https://www.govinfo.gov/link/uscode/26/5722))
\[T.D. 6871, [31 FR 50](https://www.federalregister.gov/citation/31-FR-50), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
### Changes in Location and Premises
#### § 44.108 Change in location.
Whenever an export warehouse proprietor contemplates changing the location of his warehouse, the proprietor shall, before commencing operations at the new location, make an application, on Form 5200.16 for an amended permit. The application shall be supported by an extension of coverage of the bond filed under this part, in accordance with the provisions of [§ 44.126](/current/title-27/section-44.126).
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711), [5712](https://www.govinfo.gov/link/uscode/26/5712))
\[[25 FR 4717](https://www.federalregister.gov/citation/25-FR-4717), May 28, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-480, [67 FR 30802](https://www.federalregister.gov/citation/67-FR-30802), May 8, 2002; T.D. TTB-196, [89 FR 87948](https://www.federalregister.gov/citation/89-FR-87948), Nov. 6, 2024]
#### § 44.109 Change in address.
Whenever any change occurs in the address, but not the location, of the warehouse of an export warehouse proprietor, as a result of action of local authorities, the proprietor shall, within 30 days of such change, make application on Form 5200.16 for an amended permit.
(72 Stat. 1421; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
\[T.D. 6961, [33 FR 9492](https://www.federalregister.gov/citation/33-FR-9492), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. TTB-196, [89 FR 87948](https://www.federalregister.gov/citation/89-FR-87948), Nov. 6, 2024]
#### § 44.110 \[Reserved]
#### § 44.111 Change in export warehouse premises.
Where an export warehouse is to be changed to an extent which will make inaccurate the description of the warehouse as set forth in the last application by the proprietor for permit, or the diagram, if any, furnished with such application, the proprietor shall first make application on Form 5200.16 for, and obtain, an amended permit. Such application shall describe the proposed change in the warehouse and shall be accompanied by a new diagram if required under [§ 44.88](/current/title-27/section-44.88).
(72 Stat. 1421; [26 U.S.C. 5712](https://www.govinfo.gov/link/uscode/26/5712))
\[T.D. 6961 [33 FR 9492](https://www.federalregister.gov/citation/33-FR-9492), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. TTB-196, [89 FR 87948](https://www.federalregister.gov/citation/89-FR-87948), Nov. 6, 2024]
#### § 44.112 Emergency premises.
In cases of emergency, the appropriate TTB officer may authorize, for a stated period, the temporary use of a place for the temporary storage of tobacco products, and cigarette papers and tubes, without making the application or furnishing the extension of coverage of bond required under [§§ 44.111](/current/title-27/section-44.111) and [44.126](/current/title-27/section-44.126), or the temporary separation of warehouse premises by means other than those specified in [§ 44.89](/current/title-27/section-44.89), where such action will not hinder the effective administration of this part, is not contrary to law, and will not jeopardize the revenue.
\[T.D. 6871, [31 FR 50](https://www.federalregister.gov/citation/31-FR-50), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
## Subpart F—Bonds and Extensions of Coverage of Bonds
#### Source:
[25 FR 4718](https://www.federalregister.gov/citation/25-FR-4718), May 28, 1960, unless otherwise noted. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975.
#### § 44.121 Corporate surety.
(a) Surety bonds required under the provisions of this part may be given only with corporate sureties holding certificates of authority from the Secretary of the Treasury as acceptable sureties on Federal bonds. Limitations concerning corporate sureties are prescribed by the Secretary in Treasury Department Circular 570, Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies, as revised (see [paragraph (c)](/current/title-27/section-44.121#p-44.121\(c\)) of this section). The surety shall have no interest whatever in the business covered by the bond.
(b) Each bond and each extension of coverage of bond shall at the time of filing be accompanied by a power of attorney authorizing the agent or officer who executed the bond to so act on behalf of the surety. The appropriate TTB officer who is authorized to approve the bond may, whenever he deems it necessary, require additional evidence of the authority of the agent or officer to execute the bond or extension of coverage of bond. The power of attorney shall be prepared on a form provided by the surety company and executed under the corporate seal of the company. If the power of attorney submitted is other than a manually signed document, it shall be accompanied by a certificate of its validity.
(c) Treasury Department Circular 570 is published in the Federal Register annually on the first business day in July, and supplemental changes are published periodically thereafter (see *[https://www.federalregister.gov](https://www.federalregister.gov)*). The most recent circular and any supplemental changes to it may be viewed on the Bureau of the Fiscal Service website (see *[https://fiscal.treasury.gov](https://fiscal.treasury.gov)*).
\[T.D. ATF-92, [46 FR 46923](https://www.federalregister.gov/citation/46-FR-46923), Sept. 23, 1981, as amended by T.D. TTB-196, [89 FR 87949](https://www.federalregister.gov/citation/89-FR-87949), Nov. 6, 2024]
#### § 44.122 Deposits of bonds, notes, or obligations in lieu of corporate surety.
Bonds or notes of the United States, or other obligations which are unconditionally guaranteed as to both interest and principal by the United States, may be pledged and deposited by the export warehouse proprietor as security in connection with bond to cover his operations, in lieu of the corporate surety, in accordance with the provisions of [31 CFR part 225](/current/title-31/part-225) regarding acceptance of bonds secured by Government obligations in lieu of bonds with sureties. Such bonds or notes which are nontransferable, or the pledging of which will not be recognized by the Treasury Department, are not acceptable as security in lieu of corporate surety.
\[[25 FR 4718](https://www.federalregister.gov/citation/25-FR-4718), May 28, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. TTB-196, [89 FR 87949](https://www.federalregister.gov/citation/89-FR-87949), Nov. 6, 2024]
#### § 44.123 Amount of bond.
The amount of the bond filed by the export warehouse proprietor, as required by [§ 44.86](/current/title-27/section-44.86), shall be not less than the estimated amount of tax which may at any time constitute a charge against the bond: *Provided,* That the amount of any such bond (or the total amount where original and strengthening bonds are filed) shall not exceed $200,000 nor be less than $1,000. The charge against such bond shall be subject to increase upon receipt of tobacco products, and cigarette papers and tubes into the export warehouse and to decrease as satisfactory evidence of exportation, or satisfactory evidence of such other disposition as may be used as the lawful basis for crediting such bond, is received by the appropriate TTB officer with respect to such articles transferred or removed. When the limit of liability under a bond given in less than the maximum amount has been reached, no additional shipments shall be received into the warehouse until a strengthening or superseding bond is filed, as required by [§ 44.124](/current/title-27/section-44.124) or [§ 44.125](/current/title-27/section-44.125).
(72 Stat. 1421, as amended; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
\[T.D. 6871, [31 FR 50](https://www.federalregister.gov/citation/31-FR-50), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 44.124 Strengthening bond.
Where the appropriate TTB officer determines that the amount of the bond, under which an export warehouse proprietor is currently carrying on business, no longer adequately protects the revenue, and such bond is in an amount of less than \$200,000, the appropriate TTB officer may require the proprietor to file a strengthening bond in an appropriate amount with the same surety as that on the bond already in effect, in lieu of a superseding bond to cover the full liability on the basis of [§ 44.123](/current/title-27/section-44.123). The appropriate TTB officer shall refuse to approve any strengthening bond where any notation is made thereon which is intended or which may be construed as a release of any former bond, or as limiting the amount of either bond to less than its full amount.
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
\[[25 FR 4718](https://www.federalregister.gov/citation/25-FR-4718), May 28, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-480, [67 FR 30802](https://www.federalregister.gov/citation/67-FR-30802), May 8, 2002]
#### § 44.125 Superseding bond.
An export warehouse proprietor shall file a new bond to supersede his current bond, immediately when (a) the corporate surety on the current bond becomes insolvent, (b) the appropriate TTB officer approves a request from the surety on the current bond to terminate his liability under the bond, (c) payment of any liability under a bond is made by the surety thereon, or (d) the appropriate TTB officer considers such a superseding bond necessary for the protection of the revenue.
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
#### § 44.126 Extension of coverage of bond.
An extension of the coverage of any bond filed under this part shall be manifested on Form 5000.18 by the export warehouse proprietor and by the surety on the bond with the same formality and proof of authority as required for the execution of the bond.
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
\[[25 FR 4718](https://www.federalregister.gov/citation/25-FR-4718), May 28, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-480, [67 FR 30802](https://www.federalregister.gov/citation/67-FR-30802), May 8, 2002; T.D. TTB-196, [89 FR 87948](https://www.federalregister.gov/citation/89-FR-87948), Nov. 6, 2024]
#### § 44.127 Approval of bond and extension of coverage of bond.
No person shall commence operations under any bond, nor extend his operations, until he receives from the appropriate TTB officer notice of his approval of the bond or of an appropriate extension of coverage of the bond required under this part.
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
#### § 44.128 Termination of liability of surety under bond.
The liability of a surety on any bond required by this part shall be terminated only as to operations on and after the effective date of a superseding bond, or the date of approval of the discontinuance of operations by the export warehouse proprietor, or otherwise in accordance with the termination provisions of the bond. The surety shall remain bound in respect of any liability for unpaid taxes, penalties, and interest, not in excess of the amount of the bond, incurred by the proprietor while the bond is in force.
(72 Stat. 1421; [26 U.S.C. 5711](https://www.govinfo.gov/link/uscode/26/5711))
#### § 44.129 Release of bonds, notes, and obligations.
(a) Bonds, notes, and other obligations of the United States, pledged and deposited as security in connection with bonds required by this part, shall be released only in accordance with the provisions of [31 CFR part 225](/current/title-31/part-225) regarding acceptance of bonds secured by Government obligations in lieu of bonds with sureties. When the appropriate TTB officer is satisfied that it is no longer necessary to hold such security, he shall fix the date or dates on which a part or all of such security may be released. At any time prior to the release of such security, the appropriate TTB officer may, for proper cause, extend the date of release of such security for such additional length of time as in his judgment may be appropriate.
(b) \[Reserved]
\[T.D. ATF-92, [46 FR 46923](https://www.federalregister.gov/citation/46-FR-46923), Sept. 23, 1981; [46 FR 48644](https://www.federalregister.gov/citation/46-FR-48644), Oct. 2, 1981, as amended by T.D. TTB-196, [89 FR 87949](https://www.federalregister.gov/citation/89-FR-87949), Nov. 6, 2024]
## Subpart G—Operations by Export Warehouse Proprietors
#### Source:
[25 FR 4719](https://www.federalregister.gov/citation/25-FR-4719), May 28, 1960, unless otherwise noted. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975.
#### § 44.141 Sign.
Every export warehouse proprietor shall place and keep, on the outside of the building in which his warehouse is located, or at the entrance of his warehouse, where it can be plainly seen, a sign, in plain and legible letters, exhibiting the name under which he operates and (a) the type of business (“Export Warehouse Proprietor”) or (b) the number of the permit issued to the export warehouse proprietor under this part.
#### § 44.141a Use of premises.
Export warehouse premises may only be used for the storage of tobacco products and cigarette papers and tubes, upon which the Internal Revenue tax has not been paid, for subsequent removal under this part, and for the storage of processed tobacco pending export.
\[T.D. TTB-78, [74 FR 29419](https://www.federalregister.gov/citation/74-FR-29419), June 22, 2009]
#### § 44.142 Records.
(a) *In general.* Each export warehouse proprietor must keep in the warehouse complete and concise records that show the:
(1) Number of containers;
(2) Unit type (for example: cartons, cases);
(3) Kinds of articles (for example: small cigarettes);
(4) Name of manufacturer and brand; and
(5) Quantity of tobacco products and cigarette papers and tubes, and any processed tobacco received, removed, transferred, destroyed, lost, or returned to manufacturers or to customs bonded warehouse proprietors.
(b) *Other records; form and retention.* In addition to the records specified in [paragraph (a)](/current/title-27/section-44.142#p-44.142\(a\)) of this section, the export warehouse proprietor must retain a copy of each TTB F 5200.14 from a manufacturer, another export warehouse proprietor, or a customs warehouse proprietor, from whom tobacco products or cigarette papers or tubes were received, as well as a copy of each TTB F 5200.14 covering the tobacco products and cigarette papers and tubes removed from the warehouse. The entries for each day in the records maintained under this section must be made by the close of the business day following the day on which the transactions occur. No particular form of records is prescribed, but the information required must be readily ascertainable. The copies of TTB F 5200.14 and other records must be retained for 3 years following the close of the calendar year in which the shipments were received or removed and must be made available for inspection by any appropriate TTB officer upon request.
\[[78 FR 38574](https://www.federalregister.gov/citation/78-FR-38574), June 27, 2013]
### Inventories
#### § 44.143 General.
(a) Every export warehouse proprietor shall at the times specified in this subpart make a true and accurate inventory of products held on TTB Form 5220.3.
(b) This inventory shall be subject to verification by an appropriate TTB officer. A copy of each inventory shall be retained by the export warehouse proprietor for 3 years following the close of the calendar year in which the inventory is made and shall be made available for inspection by any appropriate TTB officer upon request.
\[T.D. ATF-289, [54 FR 48841](https://www.federalregister.gov/citation/54-FR-48841), Nov. 27, 1989, as amended by T.D. ATF-421, [64 FR 71925](https://www.federalregister.gov/citation/64-FR-71925), Dec. 22, 1999; T.D. ATF-424, [64 FR 71933](https://www.federalregister.gov/citation/64-FR-71933), Dec. 22, 1999; T.D. ATF-480, [67 FR 30802](https://www.federalregister.gov/citation/67-FR-30802), May 8, 2002; T.D. TTB-196, [89 FR 87948](https://www.federalregister.gov/citation/89-FR-87948), Nov. 6, 2024]
#### § 44.144 Opening.
An opening inventory shall be made by the export warehouse proprietor at the time of commencing business. The date of commencing business under this part shall be the effective date indicated on the permit issued under [§ 44.93](/current/title-27/section-44.93). A similar inventory shall be made by the export warehouse proprietor when he files a superseding bond. The date of such inventory shall be the effective date of such superseding bond.
(72 Stat. 1422; [26 U.S.C. 5721](https://www.govinfo.gov/link/uscode/26/5721))
\[[25 FR 4719](https://www.federalregister.gov/citation/25-FR-4719), May 28, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-480, [67 FR 30802](https://www.federalregister.gov/citation/67-FR-30802), May 8, 2002]
#### § 44.145 Special.
A special inventory shall be made by the export warehouse proprietor whenever required by any appropriate TTB officer.
(72 Stat. 1422; [26 U.S.C. 5721](https://www.govinfo.gov/link/uscode/26/5721))
#### § 44.146 Closing.
A closing inventory shall be made by the export warehouse proprietor when he transfers ownership or concludes business. Where the proprietor transfers ownership the closing inventory shall be made as of the day preceding the date of the opening inventory of the successor.
(72 Stat. 1422; [26 U.S.C. 5721](https://www.govinfo.gov/link/uscode/26/5721))
\[[25 FR 4719](https://www.federalregister.gov/citation/25-FR-4719), May 28, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-480, [67 FR 30802](https://www.federalregister.gov/citation/67-FR-30802), May 8, 2002]
### Reports
#### § 44.147 General.
Every export warehouse proprietor shall make a report on Form 5220.4 of all tobacco products, cigarette papers and tubes, and any processed tobacco on hand, received, removed, transferred, and lost or destroyed. Such report shall be made at the times specified in this subpart and shall be made whether or not any operations or transactions occurred during the period covered by the report. A copy of each report shall be retained by the export warehouse proprietor at his warehouse for 3 years following the close of the calendar year covered in such reports, and made available for inspection by any appropriate TTB officer upon his request.
(72 Stat. 1422; [26 U.S.C. 5722](https://www.govinfo.gov/link/uscode/26/5722))
\[T.D. 6871, [31 FR 51](https://www.federalregister.gov/citation/31-FR-51), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975; T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-421, [64 FR 71925](https://www.federalregister.gov/citation/64-FR-71925), Dec. 22, 1999; T.D. ATF-424, [64 FR 71933](https://www.federalregister.gov/citation/64-FR-71933), Dec. 22, 1999; T.D. ATF-480, [67 FR 30802](https://www.federalregister.gov/citation/67-FR-30802), May 8, 2002; T.D. TTB-78, [74 FR 29419](https://www.federalregister.gov/citation/74-FR-29419), June 22, 2009]
#### § 44.148 Opening.
An opening report, covering the period from the date of the opening inventory, or inventory made in connection with a superseding bond, to the end of the month, shall be made on or before the 20th day following the end of the month in which the business was commenced.
(72 Stat. 1422; [26 U.S.C. 5722](https://www.govinfo.gov/link/uscode/26/5722))
#### § 44.149 Monthly.
A report for each full month shall be made on or before the 20th day following the end of the month covered in the report.
(72 Stat. 1422; [26 U.S.C. 5722](https://www.govinfo.gov/link/uscode/26/5722))
#### § 44.150 Special.
A special report, covering the unreported period to the day preceding the date of any special inventory required by an appropriate TTB officer, shall be made with such inventory. Another report, covering the period from the date of such inventory to the end of the month, shall be made on or before the 20th day following the end of the month in which the inventory was made.
(72 Stat. 1422; [26 U.S.C. 5722](https://www.govinfo.gov/link/uscode/26/5722))
#### § 44.151 Closing.
A closing report, covering the period from the first of the month to the date of the closing inventory, or the day preceding the date of an inventory made in connection with a superseding bond, shall be made with such inventory.
(72 Stat. 1422; [26 U.S.C. 5722](https://www.govinfo.gov/link/uscode/26/5722))
### Claims
#### § 44.152 Claim for remission of tax liability.
Remission of the tax liability on tobacco products, and cigarette papers and tubes may be extended to the export warehouse proprietor liable for the tax where such articles in bond are lost (otherwise than by theft) or destroyed, by fire, casualty, or act of God, while in the possession or ownership of such proprietor. Where articles are so lost or destroyed the proprietor shall report promptly such fact, and the circumstances, to the appropriate TTB officer. If the proprietor wishes to be relieved of the tax liability, the proprietor must prepare and file a claim on TTB Form 5620.8. The nature, date, place, and extent of the loss or destruction must be stated in such claim. The claim must be accompanied by such evidence as is necessary to establish to the satisfaction of the appropriate TTB officer that the claim is valid. When the appropriate TTB officer has acted on the claim, such officer will return a copy of TTB Form 5620.8 to the proprietor as notice of such action. The proprietor must keep the copy of TTB Form 5620.8 for 3 years following the close of the calendar year in which the claim is filed.
(72 Stat. 1419, as amended; [26 U.S.C. 5705](https://www.govinfo.gov/link/uscode/26/5705))
\[T.D. 6961, [33 FR 9492](https://www.federalregister.gov/citation/33-FR-9492), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-421, [64 FR 71925](https://www.federalregister.gov/citation/64-FR-71925), Dec. 22, 1999; T.D. ATF-480, [67 FR 30802](https://www.federalregister.gov/citation/67-FR-30802), May 8, 2002]
#### § 44.153 Claim for abatement of assessment.
A claim for abatement of the unpaid portion of the assessment of any tax on tobacco products, and cigarette papers and tubes, or any liability in respect of such tax, alleged to be excessive in amount, assessed after the expiration of the period of limitation applicable thereto, or erroneously or illegally assessed, shall be filed on Form 5620.8. Such claim shall set forth the reasons relied upon for the allowance of the claim and shall be supported by such evidence as is necessary to establish to the satisfaction of the appropriate TTB officer that the claim is valid.
(68A Stat. 792; [26 U.S.C. 6404](https://www.govinfo.gov/link/uscode/26/6404))
\[T.D. 6871, [31 FR 51](https://www.federalregister.gov/citation/31-FR-51), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-251, [52 FR 19341](https://www.federalregister.gov/citation/52-FR-19341), May 22, 1987; T.D. ATF-421, [64 FR 71925](https://www.federalregister.gov/citation/64-FR-71925), Dec. 22, 1999; T.D. ATF-480, [67 FR 30802](https://www.federalregister.gov/citation/67-FR-30802), May 8, 2002]
#### § 44.154 Claim for refund of tax.
The taxes paid on tobacco products, and cigarette papers and tubes may be refunded (without interest) to an export warehouse proprietor on proof satisfactory to the appropriate TTB officer that the claimant proprietor paid the tax on such articles which were after taxpayment lost (otherwise than by theft) or destroyed, by fire, casualty, or act of God, while in the possession or ownership of such export warehouse proprietor, or withdrawn by him from the market. Any claim for refund under this section shall be prepared on Form 5620.8, in duplicate, and shall include a statement that the tax imposed by [26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652) or chapter 52, was paid in respect to the articles covered by the claim, and that the articles were lost, destroyed, or withdrawn from the market within 6 months preceding the date the claim is filed. The claim must be filed on TTB Form 5620.8 and supported by such evidence as is necessary to establish to the satisfaction of the appropriate TTB officer that the claim is valid. The duplicate of the claim shall be retained by the export warehouse proprietor for 3 years following the close of the calendar year in which the claim is filed. Where an export warehouse proprietor has paid the tax on tobacco products, or cigarette papers or tubes, he may file claim for refund of an overpayment of tax under [subpart A of part 46 of this chapter](/current/title-27/part-46/subpart-A) if, at the time the tax was paid, these articles had been exported, destroyed, or otherwise disposed of in such a manner that tax was not due and payable.
(68A Stat. 791, 72 Stat. 9, 1419, as amended; [26 U.S.C. 6402](https://www.govinfo.gov/link/uscode/26/6402), [6423](https://www.govinfo.gov/link/uscode/26/6423), [5705](https://www.govinfo.gov/link/uscode/26/5705))
\[T.D. 6961, [33 FR 9492](https://www.federalregister.gov/citation/33-FR-9492), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55856](https://www.federalregister.gov/citation/44-FR-55856), Sept. 28, 1979; T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-251, [52 FR 19341](https://www.federalregister.gov/citation/52-FR-19341), May 22, 1987; T.D. ATF-421, [64 FR 71925](https://www.federalregister.gov/citation/64-FR-71925), Dec. 22, 1999; T.D. ATF-457, [66 FR 32220](https://www.federalregister.gov/citation/66-FR-32220), June 14, 2001; T.D. ATF-480, [67 FR 30802](https://www.federalregister.gov/citation/67-FR-30802), May 8, 2002]
## Subpart H—Suspension and Discontinuance of Operations
#### § 44.161 Discontinuance of operations.
Every export warehouse proprietor who desires to discontinue operations and close out his warehouse shall dispose of all cigars, cigarettes, and cigarette papers and tubes on hand, in accordance with this part, making a closing inventory and closing report, in accordance with the provisions of [§§ 44.146](/current/title-27/section-44.146) and [44.151](/current/title-27/section-44.151), respectively, and surrender, with such inventory and report, his permit to the appropriate TTB officer as notice of such discontinuance, in order that the appropriate TTB officer may terminate the liability of the surety on the bond of the export warehouse proprietor.
(72 Stat. 1422; [26 U.S.C. 5721](https://www.govinfo.gov/link/uscode/26/5721), [5722](https://www.govinfo.gov/link/uscode/26/5722))
\[T.D. 6871, [31 FR 51](https://www.federalregister.gov/citation/31-FR-51), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### § 44.162 Suspension and revocation of permit.
Where the appropriate TTB officer has reason to believe that an export warehouse proprietor has not in good faith complied with the provisions of [26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201), and regulations thereunder, or with any other provision of 26 U.S.C. with intent to defraud, or has violated any condition of his permit, or has failed to disclose any material information required or made any material false statement in the application for permit, or has failed to maintain his premises in such manner as to protect the revenue, or is, by reason of previous or current legal proceedings involving a felony violation of any other provision of Federal criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes, not likely to maintain operations in compliance with [26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201), or has been convicted of a felony violation of any provision of Federal or State criminal law relating to tobacco products, processed tobacco, cigarette paper, or cigarette tubes, the appropriate TTB officer shall issue an order, stating the facts charged, citing such export warehouse proprietor to show cause why the permit should not be suspended or revoked after hearing thereon in accordance with [part 71 of this chapter](/current/title-27/part-71), which part (including the provisions relating to appeals) is made applicable to such proceedings. If, after hearing, the hearing examiner, or on appeal, the Administrator, finds that such person has not shown cause why the permit should not be suspended or revoked, such permit shall be suspended for such period as the appropriate TTB officer deems proper or shall be revoked.
(72 Stat. 1421; [26 U.S.C. 5713](https://www.govinfo.gov/link/uscode/26/5713))
\[T.D. TTB-75, [74 FR 14485](https://www.federalregister.gov/citation/74-FR-14485), Mar. 31, 2009]
## Subpart I \[Reserved]
## Subpart J—Removal of Shipments of Tobacco Products and Cigarette Papers and Tubes by Manufacturers and Export Warehouse Proprietors
### Packaging Requirements
#### § 44.181 Packages.
All tobacco products and cigarette papers and tubes must, before removal or transfer under this subpart, be put up by the manufacturer in packages that bear the label or notice, tax classification, and mark, as required by this subpart. For purposes of this subpart, the package does not include the cellophane or other transparent exterior wrapping material.
\[[78 FR 38574](https://www.federalregister.gov/citation/78-FR-38574), June 27, 2013]
#### § 44.182 Lottery features.
No certificate, coupon, or other device purporting to be or to represent a ticket, chance, share, or an interest in, or dependent on, the event of a lottery shall be contained in, attached to, or stamped, marked, written, or printed on any package of tobacco products, or cigarette papers or tubes.
(72 Stat. 1422; [26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723), [18 U.S.C. 1301](https://www.govinfo.gov/link/uscode/18/1301))
\[T.D. 6871, [31 FR 51](https://www.federalregister.gov/citation/31-FR-51), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 44.183 Indecent or immoral material.
No indecent or immoral picture, print, or representation shall be contained in, attached to, or stamped, marked, written, or printed on any package of tobacco products, or cigarette papers or tubes.
(72 Stat. 1422; [26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723))
\[T.D. 6871, [31 FR 51](https://www.federalregister.gov/citation/31-FR-51), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 44.184 Mark.
Every package of tobacco products shall, before removal from the factory under this subpart, have adequately imprinted thereon, or on a label securely affixed thereto, a mark as specified in this section. The mark may consist of the name of the manufacturer removing the product and the location (by city and State) of the factory from which the products are to be so removed, or may consist of the permit number of the factory from which the products are to be so removed. Any trade name of the manufacturer approved as provided in [§ 40.65 of this chapter](/current/title-27/section-40.65) may be used in the mark as the name of the manufacturer.) As an alternative, where tobacco products are both packaged and removed by the same manufacturer, either at the same or different factories, the mark may consist of the name of such manufacturer if the factory where package is identified on or in the package by a means approved by the appropriate TTB officer. Before using the alternative, the manufacturer shall notify the appropriate TTB officer in writing of the name to be used as the name of the manufacturer and the means to be used for identifying the factory where packaged. If approved by him the appropriate TTB officer shall return approved copies of the notice to the manufacturer. A copy of the approved notice shall be retained as part of the factory records at each of the factories operated by the manufacturer.
(72 Stat. 1422; [26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723))
\[T.D. 6871, [31 FR 51](https://www.federalregister.gov/citation/31-FR-51), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-460, [66 FR 39093](https://www.federalregister.gov/citation/66-FR-39093), July 27, 2001]
#### § 44.185 Label or notice.
Every package of tobacco products shall, before removal from the factory under this subpart, have adequately imprinted thereon, or on a label securely affixed thereto, the words “Tax-exempt. For use outside U.S.” or the words “U.S. Tax-exempt. For use outside U.S.” except where a stamp, sticker, or notice, required by a foreign country or a possession of the United States, which identifies such country or possession, is so imprinted or affixed.
([26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704), [5723](https://www.govinfo.gov/link/uscode/26/5723))
\[T.D. 6871, [31 FR 52](https://www.federalregister.gov/citation/31-FR-52), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-465, [66 FR 45618](https://www.federalregister.gov/citation/66-FR-45618), Aug. 29, 2001]
#### § 44.186 Tax classification for cigars.
Before removal from a factory under this subpart, every package of cigars shall have adequately imprinted on it, or on a label securely affixed to it—
(a) The designation “cigars”;
(b) The quantity of cigars contained in the package; and
(c) For small cigars, the classification of the product for tax purposes; (i.e., either “small” or “little”).
(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 ([26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723)))
\[T.D. ATF-80, [46 FR 18312](https://www.federalregister.gov/citation/46-FR-18312), Mar. 24, 1981]
#### § 44.187 Shipping containers.
Each shipping case, crate, or other container in which tobacco products, or cigarette papers or tubes are to be shipped or removed, under this part, shall bear a distinguishing number, such number to be assigned by the manufacturer or export warehouse proprietor. Removals of tobacco products, and cigarette papers and tubes from an export warehouse shall be made, insofar as practicable, in the same containers in which they were received from the factory.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 52](https://www.federalregister.gov/citation/31-FR-52), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
### Consignment of Shipment
#### § 44.188 General.
Tobacco products, and cigarette papers and tubes transferred or removed from a factory or an export warehouse, under this part, without payment of tax, shall be consigned as required by this subpart.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 52](https://www.federalregister.gov/citation/31-FR-52), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 44.189 Transfers between factories and export warehouses.
Where tobacco products, and cigarette papers and tubes are transferred, without payment of tax, from a factory to an export warehouse or between export warehouses, such articles shall be consigned to the export warehouse proprietor to whom such articles are to be delivered.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 52](https://www.federalregister.gov/citation/31-FR-52), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 44.190 Return of shipment to a manufacturer or customs warehouse proprietor.
Where tobacco products, and cigarette papers and tubes are returned by an export warehouse proprietor to a manufacturer or where cigars are so returned to a customs warehouse proprietor, such articles shall be consigned to the manufacturer or customs warehouse proprietor to whom the shipment is to be returned.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 52](https://www.federalregister.gov/citation/31-FR-52), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 44.191 To officers of the armed forces for subsequent exportation.
Where tobacco products, and cigarette papers and tubes are removed from a factory or an export warehouse for delivery to officers of the armed forces of the United States in this country for subsequent shipment to, and use by, the armed forces outside the United States, the manufacturer or export warehouse proprietor shall consign such articles to the receiving officer at the armed forces base or installation, in this country, to which they are to be delivered.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 52](https://www.federalregister.gov/citation/31-FR-52), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 44.192 To vessels and aircraft for shipment to noncontiguous foreign countries and possessions of the United States.
Where tobacco products, and cigarette papers and tubes are removed from a factory or an export warehouse, for direct delivery to a vessel or aircraft for transportation to a noncontiguous foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States, the manufacturer or export warehouse proprietor shall consign the shipment directly to the vessel or aircraft, or to his agent at the port for delivery to the vessel or aircraft.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 52](https://www.federalregister.gov/citation/31-FR-52), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 44.193 To a Federal department or agency.
Where tobacco products, and cigarette papers and tubes are removed from a factory or an export warehouse and are destined for ultimate delivery in a noncontiguous foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States, but the shipment is to be delivered in the United States to a Federal department or agency, or to an authorized dispatch agent, transportation officer, or port director of such a department or agency for forwarding on to the place of destination of the shipment, the manufacturer or export warehouse proprietor shall consign the shipment to the Federal department or agency, or to the proper dispatch agent, transportation officer, or port director of such department or agency.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 52](https://www.federalregister.gov/citation/31-FR-52), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28088](https://www.federalregister.gov/citation/51-FR-28088), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 44.194 To district director of customs for shipment to contiguous foreign countries.
Where tobacco products, or cigarette papers or tubes are removed from a factory or an export warehouse for export to a contiguous foreign country, the manufacturer or export warehouse proprietor shall consign the shipment to the district director of customs at the border or other port of exit.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6961, [33 FR 9492](https://www.federalregister.gov/citation/33-FR-9492), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 44.195 To Government vessels and aircraft for consumption as supplies.
Where tobacco products, and cigarette papers and tubes are removed from a factory or an export warehouse for delivery to a vessel or aircraft engaged in an activity for the Government of the United States or a foreign government, for consumption as supplies beyond the jurisdiction of the internal revenue laws of the United States, the manufacturer or export warehouse proprietor shall consign the shipment to the proper officer on board the vessel or aircraft to which the shipment is to be delivered.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 52](https://www.federalregister.gov/citation/31-FR-52), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 44.196 To district director of customs for consumption as supplies on commercial vessels and aircraft.
Where tobacco products, or cigarette papers or tubes are removed from a factory or an export warehouse for consumption as supplies beyond the jurisdiction of the internal revenue laws of the United States, the manufacturer or export warehouse proprietor shall consign the shipment to the district director of customs at the port at which the shipment is to be laden.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6961, [33 FR 9493](https://www.federalregister.gov/citation/33-FR-9493), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 44.196a To a foreign-trade zone.
Where tobacco products, and cigarette papers and tubes are removed from a factory or an export warehouse for delivery to a foreign-trade zone, under zone restricted status for the purpose of exportation or storage, the manufacturer or export warehouse proprietor shall consign the shipment to the Zone Operator in care of the customs officer in charge of the zone.
(48 Stat. 999, as amended, 72 Stat. 1418, as amended; [19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c), [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 53](https://www.federalregister.gov/citation/31-FR-53), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 44.197 For export by parcel post.
Tobacco products, and cigarette papers and tubes removed from a factory or an export warehouse, for export by parcel post to a person in a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States, shall be addressed and consigned to such person when the articles are deposited in the mails. Waiver of his right to withdraw such articles from the mails shall be stamped or written on each shipping container and be signed by the manufacturer or export warehouse proprietor making the shipment.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 53](https://www.federalregister.gov/citation/31-FR-53), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
### Notice of Removal of Shipment
#### § 44.198 Preparation.
For each shipment of tobacco products, and cigarette papers and tubes transferred or removed from his factory, under bond and this part, the manufacturer shall prepare a notice of removal, Form 5200.14, and for each shipment of tobacco products, and cigarette papers and tubes transferred or removed from his export warehouse, under bond and this part, the export warehouse proprietor shall prepare a notice of removal, Form 5200.14. Each such notice shall be given a serial number by the manufacturer or export warehouse proprietor in a series beginning with number 1, with respect to the first shipment removed from the factory or export warehouse under this part and commencing again with number 1 on January 1 of each year thereafter.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 53](https://www.federalregister.gov/citation/31-FR-53), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-421, [64 FR 71925](https://www.federalregister.gov/citation/64-FR-71925), Dec. 22, 1999]
#### § 44.199 Disposition.
After actual removal from his factory or export warehouse of the shipment described on the notice of removal, Form 5200.14, the manufacturer or export warehouse proprietor shall, except where the shipment is to be exported by parcel post, promptly forward one copy of the notice of removal to the appropriate TTB officer. A copy of each such notice shall be retained by the manufacturer or export warehouse proprietor as a part of his records, for 3 years following the close of the calendar year in which the shipment was removed and shall be made available for inspection by any appropriate TTB officer upon his request. The manufacturer or export warehouse proprietor shall dispose of the other copies of each notice of removal as required by this subpart.
(72 Stat. 1418; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[[25 FR 4722](https://www.federalregister.gov/citation/25-FR-4722), May 28, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975; T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999; T.D. ATF-480, [67 FR 30802](https://www.federalregister.gov/citation/67-FR-30802), May 8, 2002]
#### § 44.200 Transfers between factories and export warehouses.
Where tobacco products, and cigarette papers and tubes are transferred from a factory to an export warehouse or between export warehouses, the manufacturer or export warehouse proprietor making the shipment shall forward three copies of the notice of removal, Form 5200.14 to the export warehouse proprietor to whom the shipment is consigned. Immediately upon receipt of the shipment at his warehouse, the export warehouse proprietor shall properly execute the certificate of receipt on each copy of the notice of removal, noting thereon any discrepancy; return one copy to the manufacturer or export warehouse proprietor making the shipment for filing with the appropriate TTB officer; retain one copy at his warehouse as a part of his records; and file the remaining copy with his report, required by [§ 44.147](/current/title-27/section-44.147).
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 53](https://www.federalregister.gov/citation/31-FR-53), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999]
#### § 44.201 Return to manufacturer or customs warehouse proprietor.
Where tobacco products, and cigarette papers and tubes are removed from an export warehouse for return to the factory, or cigars are removed from such a warehouse for return to a customs warehouse, the export warehouse proprietor making the shipment shall forward two copies of the notice of removal, Form 5200.14, to the manufacturer or customs warehouse proprietor to whom the shipment is consigned. Immediately upon receipt of the shipment at his factory or warehouse, the manufacturer or customs warehouse proprietor shall properly execute the certificate of receipt on both copies of the notice of removal, noting thereon any discrepancy, and return one copy to the export warehouse proprietor making the shipment for filing with the appropriate TTB officer. The other copy of the notice of removal shall be retained by the manufacturer or customs warehouse proprietor, as a part of his records, for 3 years following the close of the calendar year in which the shipment was received and shall be made available for inspection by any appropriate TTB officer upon his request.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 53](https://www.federalregister.gov/citation/31-FR-53), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999]
#### § 44.202 To officers of the armed forces for subsequent exportation.
Where tobacco products, and cigarette papers and tubes are removed from a factory or an export warehouse for delivery to officers of the armed forces of the United States in this country for subsequent shipment to, and use by, the armed forces outside the United States, the manufacturer or export warehouse proprietor making the removal shall forward a copy of the notice of removal, Form 5200.14, to the officer at the base or installation authorized to receive the articles described on the notice of removal. Upon execution by the armed forces receiving officer of the certificate of receipt on the copy of the notice of removal, he shall return such copy to the manufacturer or export warehouse proprietor making the shipment for filing with the appropriate TTB officer.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 53](https://www.federalregister.gov/citation/31-FR-53), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999]
#### § 44.203 To noncontiguous foreign countries and possessions of the United States.
Where tobacco products, or cigarette papers or tubes are removed from a factory or an export warehouse for direct delivery to a vessel or aircraft for transportation to a noncontiguous foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States, the manufacturer or export warehouse proprietor making the shipment shall file two copies of the notice of removal, Form 5200.14, with the office of the district director of customs at the port where the shipment is to be laden. Such copies of the notice of removal should be filed with the related shipper's export declaration, Commerce Form 7525-V. In the event the copies of the notice of removal are not filed with the shipper's export declaration, when the copies of the notice are filed with the district director of customs they shall show all particulars necessary to enable that officer to associate the notice with the related shipper's export declaration and any other documents filed with his office in connection with the shipment. After the vessel or aircraft on which the shipment has been laden clears or departs from the port of lading the customs authority shall execute the certificate of exportation on both copies of the notice of removal, retain one copy for his records, and deliver or transmit the other copy to the manufacturer or export warehouse proprietor making the shipment for filing with the appropriate TTB officer.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6961, [33 FR 9493](https://www.federalregister.gov/citation/33-FR-9493), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999]
#### § 44.204 To a Federal department or agency.
Where tobacco products, and cigarette papers and tubes are removed from a factory or an export warehouse and are destined for ultimate delivery in a noncontiguous foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States, but the shipment is to be delivered to a Federal department or agency, or to an authorized dispatch agent, transportation officer, or port director of such a department or agency for forwarding on to the place of destination of the shipment, the manufacturer or export warehouse proprietor making the shipment shall furnish a copy of the notice of removal, Form 5200.14, to the Federal department or agency, or an officer thereof at the port, receiving the shipment for ultimate transmittal to the place of destination, in order that such department, agency, or officer can properly execute the certificate of receipt on such notice to evidence receipt of the shipment for transmittal to a place beyond the jurisdiction of the internal revenue laws of the United States. After completing such certificate, the Federal department, agency, or officer shall return the copy of the notice of removal, so executed, to the manufacturer or export warehouse proprietor making the shipment for filing with the appropriate TTB officer.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 53](https://www.federalregister.gov/citation/31-FR-53), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999]
#### § 44.205 To contiguous foreign countries.
(a) Where tobacco products, or cigarette papers or tubes are removed from a factory or an export warehouse for export to a contiguous foreign country, the manufacturer or export warehouse proprietor making the shipment shall—
(1) Furnish to the district director of customs at the port of exit two copies of the notice of removal, Form 5200.14, together with the related shipper's export declaration, Commerce Form 7525-V (if required); and,
(2) If copies of the notice of removal are not filed with the shippers export declaration, or if a shipment is for the armed forces of the United States in the contiguous foreign country and a shipper's export declaration is not required, show all the information on the notice of removal when it is filed so that the customs officer is able to associate the notice with the related shipper's export declaration (if any) or other documents filed with U.S. Customs and Border Protection (CBP) for the shipment.
(b) When a shipment has been cleared by CBP from the United States, and when the customs officer at the port of exit is satisfied that the products have departed from the United States, that officer shall—
(1) Complete the certificate of exportation on both copies of the notice of removal;
(2) Retain one copy of the notice of removal for his records; and,
(3) Return the other copy to the manufacturer or export warehouse proprietor making the shipment for filing with the appropriate TTB officer.
(c) The customs officer may, when he considers it necessary to establish that the merchandise was actually exported, require a landing certificate before he completes the certificate of exportation specified in [paragraph (b)(1)](/current/title-27/section-44.205#p-44.205\(b\)\(1\)) of this section. If practical, the customs officer will give advance notice to the manufacturer or export warehouse proprietor of the type of transactions for which a landing certificate will be required. However, failure to notify the manufacturer or proprietor in advance will not prevent the customs officer from requiring a landing certificate for specific exportations when he considers it necessary to protect the revenue. In any case, the customs officer will advise the manufacturer or proprietor before departure of the shipment from the United States as to those exports for which a landing certificate will be required.
(d) The provisions of this section relating to landing certificates also apply when a Form 5200.14 is not required for each transaction (for example: When multiple exportations, individually documented by commercial records, are consolidated on a single Form 5200.14 pursuant to an approved alternate procedure under [§ 44.72](/current/title-27/section-44.72)). The provisions apply to each transaction, regardless of the manner in which it is documented, unless specifically provided otherwise in the alternate procedure.
(Sec. 202, Pub. L. 85-859, 72 Stat. 1418; ([26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704)); Sec. 622, Act of June 17, 1930, 49 Stat. 759 ([19 U.S.C. 1622](https://www.govinfo.gov/link/uscode/19/1622)))
\[T.D. ATF-52, [43 FR 59287](https://www.federalregister.gov/citation/43-FR-59287), Dec. 19, 1978, as amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999; T.D. TTB-196, [89 FR 87949](https://www.federalregister.gov/citation/89-FR-87949), Nov. 6, 2024]
#### § 44.206 To Government vessels and aircraft for consumption as supplies.
Where tobacco products, and cigarette papers and tubes are removed from a factory or an export warehouse for direct delivery to a vessel or aircraft, engaged in an activity for the Government of the United States or a foreign government, for consumption as supplies beyond the jurisdiction of the internal revenue laws of the United States, the manufacturer or export warehouse proprietor making the shipment shall forward a copy of the notice of removal, Form 5200.14, to the officer of the vessel or aircraft authorized to receive the shipment. Upon execution by the receiving officer of the vessel or aircraft of the certificate of receipt on the copy of the notice of removal, he shall return such copy to the manufacturer or export warehouse proprietor making the shipment for filing with the appropriate TTB officer.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 54](https://www.federalregister.gov/citation/31-FR-54), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999]
#### § 44.207 To commercial vessels and aircraft for consumption as supplies.
Where tobacco products, or cigarette papers or tubes are removed from a factory or an export warehouse for delivery to a vessel or aircraft entitled to receive such articles for consumption as supplies beyond the jurisdiction of the internal revenue laws of the United States, the manufacturer or export warehouse proprietor making the shipment shall file two copies of the notice of removal, Form 5200.14, with the district director of customs at the port where the shipment is to be laden in sufficient time to permit delivery of the two copies of the notice of removal to the customs officer who will inspect the shipment and supervise its lading. After inspection and lading of the shipment the customs officer shall note on the copies of the notice of removal any discrepancy between the shipment inspected and laden under his supervision and that described on the notice of removal or any limitation on the quantity to be laden; complete and sign the certificate of inspection and lading; and return both copies of the notice of removal to the district director of customs. The district director of customs shall execute the certificate of clearance on both copies of the notice of removal, retain one copy for his records, and forward the other copy to the manufacturer or export warehouse proprietor making the shipment for filing with the appropriate TTB officer. Where the vessel or aircraft does not clear from the port at which the shipment is laden, the customs officer supervising the lading of the shipment shall require the person on board the vessel or aircraft authorized to receive the shipment to execute the certificate of receipt on both copies of the notice of removal to indicate the trade or activity in which the vessel or aircraft is engaged.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6961, [33 FR 9493](https://www.federalregister.gov/citation/33-FR-9493), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999]
#### § 44.207a To a foreign-trade zone.
Where tobacco products, and cigarette papers and tubes are removed from a factory or an export warehouse for delivery to a foreign-trade zone, under zone restricted status for the purpose of exportation or storage, the manufacturer or export warehouse proprietor making the shipment shall forward two copies of the notice of removal, Form 5200.14, to the customs officer in charge of the zone. Upon receipt of the shipment, the customs officer shall execute the certificate of receipt on each copy of the form, noting thereon any discrepancy, retain one copy for his records, and forward the other copy to the manufacturer or export warehouse proprietor making the shipment for filing with the appropriate TTB officer.
(48 Stat. 999, as amended, 72 Stat. 1418, as amended; [19 U.S.C. 81c](https://www.govinfo.gov/link/uscode/19/81c), [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 54](https://www.federalregister.gov/citation/31-FR-54), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999]
#### § 44.208 For export by parcel post.
Where tobacco products, and cigarette papers and tubes are removed from a factory or an export warehouse, for export by parcel post, the manufacturer or export warehouse proprietor shall present one copy of the notice of removal, Form 5200.14, together with the shipping containers, to the postal authorities with the request that the postmaster or his agent execute the certificate of mailing on the form. Where the manufacturer or export warehouse proprietor so desires, he may cover under one notice of removal all the merchandise removed under this part for export by parcel post which is delivered at one time to the postal service for that purpose. The manufacturer or export warehouse proprietor shall immediately file the receipted copy of the notice of removal with the appropriate TTB officer.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 54](https://www.federalregister.gov/citation/31-FR-54), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999]
### Miscellaneous Provisions
#### § 44.209 Diversion of shipment to another consignee.
If, after removal of a shipment from a factory or an export warehouse, the manufacturer or export warehouse proprietor desires to divert the shipment to another consignee, he shall so notify the appropriate TTB officer. The manufacturer or export warehouse proprietor shall describe the shipment, set forth the serial number and date of the notice of removal under which the shipment was removed from his factory or export warehouse, and furnish the name and address of the new consignee, who shall comply with all applicable provisions of this part.
(72 Stat. 1418; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[[25 FR 4723](https://www.federalregister.gov/citation/25-FR-4723), May 28, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### § 44.210 Return of shipment to factory or export warehouse.
A manufacturer or export warehouse proprietor may return to his factory or export warehouse, without internal revenue supervision when so authorized by the appropriate TTB officer, tobacco products, and cigarette papers and tubes previously removed therefrom, under this part, but not yet exported. The manufacturer or export warehouse proprietor shall, prior to returning the articles to his factory or export warehouse, make application to the appropriate TTB officer for permission so to do, which application shall be accompanied by two copies of the notice of removal, Form 5200.14, under which the articles were originally removed. If less than the entire shipment is intended to be returned to the factory or export warehouse, the application shall set forth accurately the articles to be returned and shall show what disposition was made of the remainder of the original shipment and any other facts pertinent to such shipment. Where the appropriate TTB officer approves the application, he shall so indicate by endorsement to that effect on each of the copies of the notice of removal, set forth the articles for which return is approved, and return both copies of the notice of removal to the manufacturer or export warehouse proprietor concerned. Upon receipt of the copies of the notice of removal bearing the endorsement of the appropriate TTB officer, the manufacturer or export warehouse proprietor shall return the articles to his factory or export warehouse, properly modify and execute the certificate of receipt on each copy of the notice of removal, return one such copy to the appropriate TTB officer, and retain the other copy as a part of his records.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 54](https://www.federalregister.gov/citation/31-FR-54), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999]
#### § 44.211 \[Reserved]
#### § 44.212 Delay in lading at port of exportation.
If, on arrival of tobacco products, and cigarette papers and tubes at the port of exportation, the vessel or aircraft for which they are intended is not prepared to receive the articles, they may be properly stored at the port for not more than 30 days. In the event of any further delay, the facts shall be reported by the manufacturer or export warehouse proprietor to the appropriate TTB officer and unless such officer approves an extension of time in which to effect lading and clearance of the shipment it must be returned to the factory or export warehouse.
\[T.D. 6871, [31 FR 55](https://www.federalregister.gov/citation/31-FR-55), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1987; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-480, [67 FR 30802](https://www.federalregister.gov/citation/67-FR-30802), May 8, 2002]
#### § 44.213 Destruction of tobacco products, and cigarette papers and tubes.
Where an export warehouse proprietor desires to destroy any of the tobacco products, or cigarette papers or tubes stored in his warehouse, he shall notify the appropriate TTB officer of the kind and quantity of such articles to be destroyed and the date on which he desires the destruction to take place in order that the appropriate TTB officer may assign an appropriate TTB officer to inspect the articles and supervise their destruction. The export warehouse proprietor shall prepare a notice of removal, Form 5200.14, describing the articles to be destroyed. After witnessing the destruction of the articles, the appropriate TTB officer shall certify to their destruction on two copies of the notice of removal and return them to the export warehouse proprietor, who shall retain one copy for his records and file the other copy with the appropriate TTB officer.
\[T.D. 6871, [31 FR 55](https://www.federalregister.gov/citation/31-FR-55), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999]
## Subpart K—Drawback of Tax
#### § 44.221 Application of drawback of tax.
Allowance of drawback of tax shall apply only to tobacco products, and cigarette papers and tubes, on which tax has been paid, when such articles are shipped to a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States. Such drawback shall be allowed only to the person who paid the tax on such articles and who files claim and otherwise complies with the provisions of this subpart.
(72 Stat. 1419, 68A Stat. 908; [26 U.S.C. 5706](https://www.govinfo.gov/link/uscode/26/5706), [7653](https://www.govinfo.gov/link/uscode/26/7653))
\[T.D. 6871, [31 FR 55](https://www.federalregister.gov/citation/31-FR-55), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 44.222 Claim.
Claim for allowance of drawback of tax, under this subpart, must be filed on Form 5620.7. Such claim must be filed in sufficient time to permit the appropriate TTB officer to detail an appropriate TTB officer to inspect the articles and supervise the affixture of a label or notice bearing the legend “For Export With Drawback of Tax.” Upon receipt of a claim supported by satisfactory bond, as required by this subpart, an appropriate TTB officer will proceed to the place where the articles involved are held and there perform the functions required in [§ 44.224](/current/title-27/section-44.224).
\[T.D. ATF-480, [67 FR 30803](https://www.federalregister.gov/citation/67-FR-30803), May 8, 2002]
#### § 44.223 Drawback bond.
Each claim for allowance of drawback of tax, under this subpart, shall be accompanied by a bond, Form 5200.17, satisfactory to the appropriate TTB officer with whom the claim is filed. Such bond shall be in an amount not less than the amount of tax for which drawback is claimed, conditioned that the claimant shall furnish, within a reasonable time, evidence satisfactory to the appropriate TTB officer that the tobacco products, and cigarette papers and tubes have been landed at some port beyond the jurisdiction of the internal revenue laws of the United States, or that after clearance from the United States, the articles were lost (otherwise than by theft) or destroyed, by fire, casualty, or act of God, and have not been relanded within the limits of the United States. The provisions of [§§ 44.121](/current/title-27/section-44.121) and [44.122](/current/title-27/section-44.122) are applicable with respect to any drawback bond required under this section.
(72 Stat. 1419; [26 U.S.C. 5706](https://www.govinfo.gov/link/uscode/26/5706))
\[T.D. 6871, [31 FR 55](https://www.federalregister.gov/citation/31-FR-55), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-480, [67 FR 30803](https://www.federalregister.gov/citation/67-FR-30803), May 8, 2002; T.D. TTB-196, [89 FR 87948](https://www.federalregister.gov/citation/89-FR-87948), Nov. 6, 2024]
#### § 44.224 Inspection by an appropriate TTB officer.
(a) *Examination.* An appropriate TTB officer will examine the tobacco products, and cigarette papers and tubes listed on TTB Form 5620.7. Such officer will verify the accuracy of the schedule of such articles on TTB Form 5620.7.
(b) *Label or notice.* If the tax on such articles has been paid by return, the appropriate TTB officer must be satisfied that the articles have in fact been taxpaid and each package bears the label or notice required by [§ 44.222](/current/title-27/section-44.222).
(c) *Shipping containers.* The appropriate officer will supervise the packing of such articles in shipping containers. Each container must be numbered and have affixed to it the notice:
Drawback of tax claimed on contents.
Sale, consumption, or use in U.S. prohibited.
(d) *Disposition of TTB Form 5620.7.* After the appropriate TTB officer completes the report of inspection on TTB Form 5620.7, such officer will return two copies to the claimant and send a copy to the TTB office listed on the form.
(e) *Release.* After executing the report of inspection on TTB Form 5620.7, the appropriate TTB office will release the shipment to the claimant for delivery to the port of exportation.
\[T.D. ATF-480, [67 FR 30803](https://www.federalregister.gov/citation/67-FR-30803), May 8, 2002]
#### § 44.225 Delivery of tobacco products, or cigarette papers or tubes for export other than by parcel post.
The claimant, upon release of the tobacco products, or cigarette papers or tubes by the appropriate TTB officer for exportation with benefit of drawback of tax under this subpart, shall be responsible for delivery of such articles to the port of exportation for customs inspection, supervision of lading, and clearance of the articles. The claimant shall file with the district director of customs at the port of exportation the two copies of Form 5620.7 returned to the claimant by the appropriate TTB officer in accordance with [§ 44.224](/current/title-27/section-44.224). Such copies shall be filed in sufficient time prior to lading to permit customs inspection and supervision of lading of the tobacco products, or cigarette papers or tubes.
(72 Stat. 1419; [26 U.S.C. 5706](https://www.govinfo.gov/link/uscode/26/5706))
\[T.D. 6961, [33 FR 9493](https://www.federalregister.gov/citation/33-FR-9493), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-424, [64 FR 71933](https://www.federalregister.gov/citation/64-FR-71933), Dec. 22, 1999]
#### § 44.226 Delivery of tobacco products, and cigarette papers and tubes for export by parcel post.
Where the tobacco products, and cigarette papers and tubes are to be shipped by parcel post to a destination in a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States, a waiver of his right to withdraw such articles from the mails shall be stamped or written on each shipping container and be signed by the claimant, after which the claimant shall present the shipment to the post office. The claimant shall request the postmaster or his agent to execute the certificate of mailing on the copy of the claim, Form 5620.7, returned to the claimant by the appropriate TTB officer in accordance with [§ 44.224](/current/title-27/section-44.224). When so executed by the postal authorities, the Form 5620.7 shall be transmitted at once to the appropriate TTB officer with whom the form was previously filed.
(72 Stat. 1419; [26 U.S.C. 5706](https://www.govinfo.gov/link/uscode/26/5706))
\[T.D. 6871, [31 FR 55](https://www.federalregister.gov/citation/31-FR-55), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-424, [64 FR 71933](https://www.federalregister.gov/citation/64-FR-71933), Dec. 22, 1999]
#### § 44.227 Customs procedure.
The customs officer shall satisfy himself that the tobacco products, and cigarette papers and tubes described on the Form 5620.7 and those inspected by him are the same and shall note on the form any discrepancy. After having inspected the articles and supervised the lading thereof on the export carrier, the customs officer shall complete and sign the certificate of inspection and lading on both copies of Form 5620.7 and deliver or transmit such copies to the office of his district director of customs for further processing. After clearance from the port of the export carrier on which the articles are laden, the district director of customs shall execute the certificate of exportation on both copies of Form 5620.7. The district director of customs shall retain one copy of the form for his records and transmit the other copy to the appropriate TTB officer.
(72 Stat. 1419; [26 U.S.C. 5706](https://www.govinfo.gov/link/uscode/26/5706))
\[T.D. 6961, [33 FR 9493](https://www.federalregister.gov/citation/33-FR-9493), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-424, [64 FR 71933](https://www.federalregister.gov/citation/64-FR-71933), Dec. 22, 1999; T.D. ATF-480, [67 FR 30803](https://www.federalregister.gov/citation/67-FR-30803), May 8, 2002]
#### § 44.228 Landing certificate.
Each claimant for drawback under this subpart agrees in the bond filed by him that he will furnish, within a reasonable time, evidence satisfactory to the appropriate TTB officer that the tobacco products, and cigarette papers and tubes covered by his claim have been landed at some port beyond the jurisdiction of the internal revenue laws of the United States, or that after shipment from the United States the articles were lost, and have not been relanded within the limits of the United States. The landing certificate shall accurately describe the articles involved, so as to readily identify the drawback claim to which it relates. The landing certificate shall be signed by a revenue officer at the place of destination, unless it is shown that no such officer can furnish such landing certificate, in which case the certificate of landing shall be signed by the consignee, or by the vessel's agent at the place of landing, and shall be sworn to before a notary public or other officer authorized to administer oaths and having an official seal. The landing certificate shall be filed with the appropriate TTB officer, with whom the drawback claim was filed, within 6 months from the date of clearance of the tobacco products, and cigarette papers and tubes from the United States. A landing certificate prepared in a foreign language shall be accompanied by an accurate translation thereof in English.
(72 Stat. 1419; [26 U.S.C. 5706](https://www.govinfo.gov/link/uscode/26/5706))
\[T.D. 6871, [31 FR 56](https://www.federalregister.gov/citation/31-FR-56), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 44.229 Collateral evidence as to landing.
In case of inability to furnish the prescribed evidence of landing, application for relief shall be promptly made by the claimant to the appropriate TTB officer. Such application shall set forth the facts connected with the alleged exportation, and indicate the date of shipment, the kind, quantity, and value of tobacco products and cigarette papers and tubes shipped, the name of the consignee, the name of the vessel, the port or place of destination to which the shipment was made, and the date and amount of the bond covering such shipment. The application shall also state in what particular the provisions of this subpart, respecting the proofs of landing, have not been complied with, and the cause of failure to furnish such proofs; that such failure was not occasioned by any lack of diligence on the part of the claimant, or that of his agents; and that he is unable to furnish any other or better evidence than that furnished with his application. Each such application shall be supported by the best collateral evidence the claimant may be able to submit. The evidence may consist of the original or verified copies of letters from the consignee advising the claimant of the arrival or sale of the tobacco products, and cigarette papers and tubes, with such other statements respecting the failure to furnish the prescribed evidence of landing as may be obtained from the consignee or other persons having knowledge thereof. Such letters and other documents in a foreign language shall be accompanied by accurate translations thereof in English, and, when the letters fail to identify sufficiently the tobacco products, and cigarette papers and tubes, the original sales account must be produced.
(72 Stat. 1419; [26 U.S.C. 5706](https://www.govinfo.gov/link/uscode/26/5706))
\[T.D. 6871, [31 FR 56](https://www.federalregister.gov/citation/31-FR-56), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-480, [67 FR 30803](https://www.federalregister.gov/citation/67-FR-30803), May 8, 2002]
#### § 44.230 Proof of loss.
When the claimant is unable to procure a certificate of landing, in accordance with the provisions of [§ 44.228](/current/title-27/section-44.228), in consequence of loss of the tobacco products, and cigarette papers and tubes, his application for relief shall set forth the extent of the loss and, if possible, the location and manner of shipwreck or other casualty and the time of its occurrence. When obtainable, affidavits of the vessel's owners should be furnished detailing the manner and extent of the loss and the time and location of the disaster. If the tobacco products, and cigarette papers and tubes were insured, the claimant shall furnish certificates by officers of the insurance companies that the insurance has been paid, and that, to the best of their knowledge and belief, the tobacco products, and cigarette papers and tubes were actually destroyed. The aforesaid proof shall be furnished to the appropriate TTB officer within 6 months from the date of clearance of the tobacco products, and cigarette papers and tubes from the United States.
(72 Stat. 1419; [26 U.S.C. 5706](https://www.govinfo.gov/link/uscode/26/5706))
\[T.D. 6871, [31 FR 56](https://www.federalregister.gov/citation/31-FR-56), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 44.231 Extension of time.
In case the claimant, from causes beyond his control, is unable to furnish the landing certificate or proof of loss, within the time prescribed therefor, he may make an application to the appropriate TTB officer for an extension of time in which to do so. Such application must state specifically the cause of failure to furnish the evidence. Two extensions of three months each may be granted by the appropriate TTB officer, provided the surety on the drawback bond of the claimant assents in writing thereto.
(72 Stat. 1419; [26 U.S.C. 5706](https://www.govinfo.gov/link/uscode/26/5706))
\[[25 FR 4725](https://www.federalregister.gov/citation/25-FR-4725), May 28, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### § 44.232 Allowance of claim.
On receipt of the executed Form 5620.7 from the district director of customs, the appropriate TTB officer will allow or disallow the claim in accordance with existing law and regulations. If the claim is not allowed in full the appropriate TTB officer will notify the claimant, in writing, of the reasons for any disallowance.
(72 Stat. 1419; [26 U.S.C. 5706](https://www.govinfo.gov/link/uscode/26/5706))
\[[25 FR 4725](https://www.federalregister.gov/citation/25-FR-4725), May 28, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-424, [64 FR 71933](https://www.federalregister.gov/citation/64-FR-71933), Dec. 22, 1999]
## Subpart L—Withdrawal of Cigars From Customs Warehouses
#### Source:
[25 FR 4725](https://www.federalregister.gov/citation/25-FR-4725), May 28, 1960, unless otherwise noted. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975.
#### § 44.241 Shipment restricted.
Cigars produced in a customs warehouse in accordance with customs laws and regulations may be withdrawn under this subpart, without payment of tax, for export or for delivery for subsequent exportation. Duties paid on the tobacco used in the manufacture of such cigars may not be recovered on the exportation of the cigars under this subpart.
#### § 44.242 Responsibility for tax on cigars.
A customs warehouse proprietor who withdraws cigars for export under his bond, without payment of tax, in accordance with the provisions of this part, shall be responsible for payment of such tax until he is relieved of such responsibility by furnishing the appropriate TTB officer evidence satisfactory to the appropriate TTB officer of exportation or proper delivery, as required by this subpart, or satisfactory evidence of such other disposition as may be used as the lawful basis for such relief. Such evidence shall be furnished within 90 days of the date of withdrawal of the cigars: *Provided,* That this period may be extended for good cause shown.
\[[25 FR 4725](https://www.federalregister.gov/citation/25-FR-4725), May 28, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-480, [67 FR 30803](https://www.federalregister.gov/citation/67-FR-30803), May 8, 2002]
### Bonds
#### § 44.243 Bond required.
Where the customs warehouse proprietor desires to withdraw cigars from his warehouse, without payment of tax, under this subpart, he shall, prior to making the first withdrawal, file a bond, Form 2104 (5200.15), conditioned upon compliance with the provisions of [26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201), and regulations thereunder, including, but not limited to, the timely payment of taxes imposed by such chapter, for which he may be responsible to the United States, and penalties and interest in connection therewith. The provisions of [§§ 44.121](/current/title-27/section-44.121) and [44.122](/current/title-27/section-44.122) are applicable to the bond required under this section.
\[[25 FR 4725](https://www.federalregister.gov/citation/25-FR-4725), May 28, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55856](https://www.federalregister.gov/citation/44-FR-55856), Sept. 28, 1979; T.D. ATF-460, [66 FR 39093](https://www.federalregister.gov/citation/66-FR-39093), July 27, 2001; T.D. ATF-480, [67 FR 30803](https://www.federalregister.gov/citation/67-FR-30803), May 8, 2002]
#### § 44.244 Amount of bond.
The amount of the bond filed by the customs warehouse proprietor, as required by [§ 44.243](/current/title-27/section-44.243), shall be not less than the estimated amount of tax which may at any time constitute a charge against the bond: *Provided,* That the amount of any such bond (or the total amount where original and strengthening bonds are filed) shall not exceed $25,000 nor be less than $1,000. The charges against such bond shall be subject to increase as withdrawals are made and decrease as required evidence of exportation is received by the appropriate TTB officer with respect to cigars withdrawn. When the limit of liability under a bond given in less than the maximum amount has been reached, further withdrawals shall not be made thereunder until a strengthening or superseding bond is filed as required by [§ 44.245](/current/title-27/section-44.245) or [§ 44.246](/current/title-27/section-44.246).
#### § 44.245 Strengthening bond.
Where the appropriate TTB officer determines that the amount of the bond, under which the customs warehouse proprietor is withdrawing cigars for shipment under this subpart, no longer adequately protects the revenue, and such bond is in an amount of less than \$25,000, the appropriate TTB officer may require the proprietor to file a strengthening bond in an appropriate amount with the same surety as that on the bond already in effect, in lieu of a superseding bond to cover the full liability on the basis of [§ 44.244](/current/title-27/section-44.244). The appropriate TTB officer shall refuse to approve any strengthening bond where any notation is made thereon which is intended or which may be construed as a release of any former bond, or as limiting the amount of either bond to less than its full amount.
#### § 44.246 Superseding bond.
The customs warehouse proprietor shall file a new bond to supersede his current bond, immediately when (a) the corporate surety on the current bond becomes insolvent, (b) the appropriate TTB officer approves a request from the surety on the current bond to terminate his liability under the bond, (c) payment of any liability under a bond is made by the surety thereon, or (d) the appropriate TTB officer considers such a superseding bond necessary for the protection of the revenue.
#### § 44.247 Termination of liability of surety under bond.
The liability of a surety on any bond required by this subpart shall be terminated only as to operations on and after the effective date of a superseding bond, or the date of approval of the customs warehouse proprietor's request for termination, or otherwise, in accordance with the termination provisions of the bond. The surety shall remain bound in respect of any liability for unpaid taxes, penalties, and interest, not in excess of the amount of the bond, incurred by the proprietor while the bond is in force.
### Packaging Requirements
#### § 44.248 Packages.
Cigars shall, before withdrawal under this part, be put up by the customs warehouse proprietor in packages which shall bear the label or notice, tax classification, and mark, as required by this subpart.
(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 ([26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723)))
\[T.D. ATF-40, [42 FR 5009](https://www.federalregister.gov/citation/42-FR-5009), Jan. 26, 1977]
#### § 44.249 Lottery features.
No certificate, coupon, or other device purporting to be or to represent a ticket, chance, share, or an interest in, or dependent on, the event of a lottery shall be contained in, attached to, or stamped, marked, written, or printed on any package of cigars withdrawn under this subpart.
(72 Stat. 1422; [26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723); [18 U.S.C. 1301](https://www.govinfo.gov/link/uscode/18/1301))
#### § 44.250 Indecent or immoral material.
No indecent or immoral picture, print, or representation shall be contained in, attached to, or stamped, marked, written, or printed on any package of cigars withdrawn under this subpart.
(72 Stat. 1422; [26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723))
#### § 44.251 Mark.
Every package of cigars shall, before withdrawal from the customs warehouse under this subpart, have adequately imprinted thereon, or on a label securely affixed thereto, the name and location of the manufacturer. There shall also be adequately stated on each such package the number of cigars contained in the package.
(72 Stat. 1422; [26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723))
#### § 44.252 Label or notice.
Every package of cigars shall, before withdrawal from the customs warehouse under this subpart, have adequately imprinted thereon, or on a label securely affixed the words “Tax-exempt. For use outside U.S.” or the words “U.S. Tax-exempt. For use outside U.S.”, except where a stamp, sticker, or notice, required by a foreign country or a possession of the United States, which identifies such country or possession, is so imprinted or affixed.
(72 Stat. 1422; [26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723))
#### § 44.253 Tax classification for cigars.
Before withdrawal of cigars from a customs warehouse under this subpart, every package of cigars shall have adequately imprinted on it, or on a label securely affixed to it—
(a) The designation “cigars”;
(b) The quantity of cigars contained in the package; and
(c) For small cigars, the classification of the product for tax purposes (i.e., either “small” or “little”).
(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 ([26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723)))
\[T.D. ATF-80, [46 FR 18312](https://www.federalregister.gov/citation/46-FR-18312), Mar. 24, 1981]
#### § 44.254 Shipping containers.
Each shipping case, crate, or other container, in which cigars are to be withdrawn, under this subpart, shall bear a distinguishing number, such number to be assigned by the customs warehouse proprietor.
### Consignment of Shipment
#### § 44.255 Consignment of cigars.
Cigars withdrawn from a customs warehouse, without payment of tax, under internal revenue bond and this part, shall be consigned in the same manner as provided by [subpart J of this part](/current/title-27/part-44/subpart-J) with respect to the removal of tobacco products, and cigarette papers and tubes from a factory or an export warehouse.
\[T.D. 6871, [31 FR 56](https://www.federalregister.gov/citation/31-FR-56), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
### Notice of Removal of Shipment
#### § 44.256 Preparation.
For each shipment to be withdrawn under this subpart, the customs warehouse proprietor shall prepare a notice of removal, Form 5200.14. Each such notice shall be given a serial number by the proprietor in a series beginning with number 1, with respect to the first shipment withdrawn under this subpart and commencing again with number 1 on January 1 of each year thereafter.
\[[25 FR 4725](https://www.federalregister.gov/citation/25-FR-4725), May 28, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999]
#### § 44.257 Disposition.
After actual withdrawal from his warehouse of the shipment described on the notice of removal, Form 5200.14, the customs warehouse proprietor shall, except where the shipment is to be exported by parcel post, promptly forward one copy of the notice of removal to the appropriate TTB officer. A copy of each such notice shall be retained by the customs warehouse proprietor as a part of his records, for 3 years following the close of the calendar year in which the shipment was withdrawn, and shall be made available for inspection by any appropriate TTB officer upon his request. The proprietor shall dispose of the other copies of each notice of removal as required by this subpart.
\[[25 FR 4725](https://www.federalregister.gov/citation/25-FR-4725), May 28, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999; T.D. ATF-480, [67 FR 30803](https://www.federalregister.gov/citation/67-FR-30803), May 8, 2002]
#### § 44.258 To officers of the armed forces for subsequent exportation.
Where cigars are withdrawn from a customs warehouse for delivery to officers of the armed forces of the United States in this country for subsequent shipment to, and use by, the armed forces outside the United States, the customs warehouse proprietor making the shipment shall forward a copy of the notice of removal, Form 5200.14, to the officer at the base or installation authorized to receive the cigars described on the notice of removal. Upon execution by the armed forces receiving officer of the certificate of receipt on the copy of the notice of removal, he shall return such copy to the customs warehouse proprietor making the shipment for filing with the appropriate TTB officer.
\[[25 FR 4725](https://www.federalregister.gov/citation/25-FR-4725), May 28, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999]
#### § 44.259 To noncontiguous foreign countries and possessions of the United States.
Where cigars are withdrawn from a customs warehouse for direct delivery to a vessel or aircraft for transportation to a noncontiguous foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States, the customs warehouse proprietor making the withdrawal shall file two copies of the notice of removal, Form 5200.14, with the office of the district director of customs at the port where the shipment is to be laden. Such copies of the notice of removal should be filed with the related shipper's export declaration, Commerce Form 7525-V. In the event the copies of the notice of removal are not filed with the shipper's export declaration, when the copies of the notice are filed with the district director of customs they shall show all particulars necessary to enable that officer to associate the notice with the related shipper's export declaration and any other documents filed with his office in connection with the shipment. After the vessel or aircraft on which the shipment has been laden clears or departs from the port of lading the customs authority shall execute the certificate of exportation on both copies of the notice of removal, retain one copy for his records, and deliver or transmit the other copy to the customs warehouse proprietor making the shipment for filing with the appropriate TTB officer.
\[T.D. 6961, [33 FR 9494](https://www.federalregister.gov/citation/33-FR-9494), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999]
#### § 44.260 To a Federal department or agency.
Where cigars are withdrawn from a customs warehouse and are destined for ultimate delivery in a noncontiguous foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States, but the shipment is to be delivered to a Federal department or agency, or to an authorized dispatch agent, transportation officer, or port director of such a department or agency for forwarding on to the place of destination of the shipment, the customs warehouse proprietor making the shipment shall furnish a copy of the notice of removal, Form 5200.14, to the Federal department or agency, or an officer thereof at the port, receiving the shipment for ultimate transmittal to the place of destination, in order that such department, agency, or officer, can properly execute the certificate of receipt on such notice to evidence receipt of the shipment for transmittal to a place beyond the jurisdiction of the internal revenue laws of the United States. After completing such certificate, the Federal department, agency, or officer, shall return the copy of the notice of removal, so executed, to the customs warehouse proprietor making the shipment for filing with the appropriate TTB officer.
\[[25 FR 4725](https://www.federalregister.gov/citation/25-FR-4725), May 28, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999]
#### § 44.261 To contiguous foreign countries.
Where cigars are withdrawn from a customs warehouse for export to a contiguous foreign country, the customs warehouse proprietor making the shipment shall furnish to the district director of customs at the border or other port of exit two copies of the notice of removal, Form 5200.14, together with the related shipper's export declaration, Commerce Form 7525-V. In the event the copies of the notice of removal are not filed with the shipper's export declaration or, in the case of a shipment for the armed forces of the United States in the contiguous foreign country where no shipper's export declaration is required, the copies of the notice when filed with the district director of customs shall show all particulars necessary to enable that officer to associate the notice with the related shipper's export declaration, if any, and any other documents filed with his office in connection with the shipment. After the shipment has been cleared by customs from the United States, the customs authority at the port of exit shall complete the certificate of exportation on both copies of the notice of removal, retain one copy for his records, and transmit the other copy to the customs warehouse proprietor making the shipment for filing with the appropriate TTB officer.
\[T.D. 6961, [33 FR 9494](https://www.federalregister.gov/citation/33-FR-9494), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999]
#### § 44.262 To Government vessels and aircraft for consumption as supplies.
Where cigars are withdrawn from a customs warehouse for direct delivery to a vessel or aircraft, engaged in an activity for the Government of the United States or a foreign government, for consumption as supplies beyond the jurisdiction of the internal revenue laws of the United States, the customs warehouse proprietor making the shipment shall forward a copy of the notice of removal, Form 5200.14, to the officer of the vessel or aircraft authorized to receive the shipment. Upon execution by the receiving officer of the vessel or aircraft of the certificate of receipt on the copy of the notice of removal, he shall return such copy to the customs warehouse proprietor making the shipment for filing with the appropriate TTB officer.
\[[25 FR 4725](https://www.federalregister.gov/citation/25-FR-4725), May 28, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999]
#### § 44.263 To commercial vessels and aircraft for consumption as supplies.
Where cigars are withdrawn from a customs warehouse for delivery to a vessel or aircraft entitled to receive such articles for consumption as supplies beyond the jurisdiction of the internal revenue laws of the United States, the customs warehouse proprietor making shipment shall file two copies of the notice of removal, Form 5200.14, with the district director of customs at the port where the shipment is to be laden in sufficient time to permit delivery of the two copies of the notice of removal to the customs officer who will inspect the shipment and supervise its lading. After inspection and lading of the shipment the customs officer shall note on the copies of the notice of removal any discrepancy between the shipment inspected and laden under his supervision and that described on the notice of removal or any limitation on the quantity to be laden; complete and sign the certificate of inspection and lading; and return both copies of the notice of removal to the district director of customs. The district director of customs shall execute the certificate of clearance on both copies of the notice of removal, retain one copy for his records, and forward the other copy to the customs warehouse proprietor making the shipment for filing with the appropriate TTB officer. Where the vessel or aircraft does not clear from the port at which the shipment is laden, the customs officer supervising the lading of the shipment shall require the person on board the vessel or aircraft authorized to receive the shipment to execute the certificate of receipt on both copies of the notice of removal to indicate the trade or activity in which the vessel or aircraft is engaged.
\[T.D. 6961, [33 FR 9494](https://www.federalregister.gov/citation/33-FR-9494), June 28, 1968. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999]
#### § 44.264 To export warehouses.
Where cigars are withdrawn from a customs warehouse for delivery to an export warehouse, the proprietor of the customs warehouse shall forward to the proprietor of the export warehouse three copies of the notice of removal, Form 5200.14, covering the shipment, for execution and disposition in accordance with procedure similar to that set forth in [§ 44.200](/current/title-27/section-44.200) in connection with a shipment of tobacco products, and cigarette papers and tubes from a factory to an export warehouse. The executed copy of the notice of removal, Form 5200.14, returned to the customs warehouse proprietor by the export warehouse proprietor shall be filed with the appropriate TTB officer.
\[T.D. ATF-48, [44 FR 55856](https://www.federalregister.gov/citation/44-FR-55856), Sept. 28, 1979, as amended by T.D. ATF-232, [51 FR 28089](https://www.federalregister.gov/citation/51-FR-28089), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999; T.D. ATF-480, [67 FR 30803](https://www.federalregister.gov/citation/67-FR-30803), May 8, 2002]
#### § 44.264a To a foreign-trade zone.
Where cigars are withdrawn from a customs warehouse for delivery to a foreign-trade zone, under zone restricted status for the purpose of exportation or storage, the customs warehouse proprietor making the shipment shall forward two copies of the notice of removal, Form 5200.14, to the customs officer in charge of the zone. Upon receipt of the shipment, the customs officer shall execute the certificate of receipt on each copy of the form, noting thereon any discrepancy, retain one copy for his records, and forward the other copy to the customs warehouse proprietor making the shipment for filing with the appropriate TTB officer.
\[T.D. 6564, [26 FR 4362](https://www.federalregister.gov/citation/26-FR-4362), May 19, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999]
#### § 44.265 For export by parcel post.
Where cigars are withdrawn from a customs warehouse for export by parcel post, the customs warehouse proprietor shall present one copy of the notice of removal, Form 5200.14, together with the shipping containers, to the postal authorities with the request that the postmaster or his agent execute the certificate of mailing on the form. Where a customs warehouse proprietor so desires, he may cover under one notice of removal all the cigars removed under this part for export by parcel post which are delivered at one time to the postal service for that purpose. The customs warehouse proprietor shall immediately file the receipted copy of the notice of removal with the appropriate TTB officer.
\[[25 FR 4725](https://www.federalregister.gov/citation/25-FR-4725), May 28, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999]
### Return of Shipment
#### § 44.266 Return of cigars from export warehouses.
Where cigars are returned to a customs warehouse from an export warehouse, the officer in charge of the customs warehouse shall execute the certificate of receipt on each of the copies of the related Form 5200.14 received from the export warehouse proprietor, after checking the containers to determine whether all the cigars described on the notice have been received. Thereafter, both copies of the Form 5200.14 shall be turned over to the proprietor of the customs warehouse who shall return one copy to the export warehouse proprietor for disposition as provided in [§ 44.201](/current/title-27/section-44.201). The customs warehouse proprietor shall retain the other copy of the notice of removal, as a part of his records, for 3 years following the close of the calendar year in which the shipment was received. Such copy shall be made available for inspection by any appropriate TTB officer upon his request.
\[T.D. ATF-48, [44 FR 55856](https://www.federalregister.gov/citation/44-FR-55856), Sept. 28, 1979, as amended by T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999]
#### § 44.267 Return of cigars from other sources.
A customs warehouse proprietor may return to his warehouse cigars previously withdrawn therefrom, under this subpart, provided he promptly files with the appropriate TTB officer a copy of the Form 5200.14 under which the cigars were originally withdrawn, with the certificate of receipt properly modified and executed by the customs officer in charge of the warehouse to show return of the shipment. If less than the entire shipment is returned to the warehouse, the form shall state what disposition was made of the remainder of the original shipment and any other facts pertinent to such shipment. The customs warehouse proprietor shall retain a copy of such form as a part of his records for 3 years after the close of the calendar year in which the shipment was returned. Such copy shall be made available for inspection by any appropriate TTB officer upon request.
\[[25 FR 4725](https://www.federalregister.gov/citation/25-FR-4725), May 28, 1960. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-421, [64 FR 71926](https://www.federalregister.gov/citation/64-FR-71926), Dec. 22, 1999]
# Part 45 — REMOVAL OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES, WITHOUT PAYMENT OF TAX, FOR USE OF THE UNITED STATES
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-45
Full text of 27 CFR Part 45 — REMOVAL OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES, WITHOUT PAYMENT OF TAX, FOR USE OF THE UNITED STATES. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 45—REMOVAL OF TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES, WITHOUT PAYMENT OF TAX, FOR USE OF THE UNITED STATES
#### Authority:
[26 U.S.C. 5702-5705](https://www.govinfo.gov/link/uscode/26/5702), [5723](https://www.govinfo.gov/link/uscode/26/5723), [5741](https://www.govinfo.gov/link/uscode/26/5741), [5751](https://www.govinfo.gov/link/uscode/26/5751), [5762](https://www.govinfo.gov/link/uscode/26/5762), [5763](https://www.govinfo.gov/link/uscode/26/5763), [6109](https://www.govinfo.gov/link/uscode/26/6109), [6313](https://www.govinfo.gov/link/uscode/26/6313), [7212](https://www.govinfo.gov/link/uscode/26/7212), [7342](https://www.govinfo.gov/link/uscode/26/7342), [7606](https://www.govinfo.gov/link/uscode/26/7606), [7805](https://www.govinfo.gov/link/uscode/26/7805); [44 U.S.C. 3504(h)](https://www.govinfo.gov/link/uscode/44/3504).
#### Source:
Redesignated by T.D. ATF-469, [66 FR 56758](https://www.federalregister.gov/citation/66-FR-56758), Nov. 13, 2001.
#### Editorial Note:
Nomenclature changes to part 45 appear by T.D. ATF-460, [66 FR 39093](https://www.federalregister.gov/citation/66-FR-39093), July 27, 2001.
## Subpart A—Scope of Regulations
#### § 45.1 Removal of tobacco products, and cigarette papers and tubes, without payment of tax, for use of the United States.
This part contains the regulations relating to the removal of tobacco products, and cigarette papers and tubes, without payment of tax, for use of the United States.
\[T.D. 6871, [31 FR 57](https://www.federalregister.gov/citation/31-FR-57), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28090](https://www.federalregister.gov/citation/51-FR-28090), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
## Subpart B—Definitions
#### § 45.11 Meaning of terms.
When used in this part and in forms prescribed under this part, the following terms shall have the meanings given in this section, unless the context clearly indicates otherwise. Words in the plural form shall include the singular, and vice versa, and words indicating the masculine gender shall include the feminine. The terms “includes” and “including” do not exclude things not listed which are in the same general class.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.45, Delegation of the Administrator's Authorities in [27 CFR Part 45](/current/title-27/part-45), Removal of Tobacco Products and Cigarette Papers and Tubes, Without Payment of Tax, for Use of the United States.
*Armed forces.* The Army, Navy (including the Marine Corps), Air Force, and Coast Guard.
*Charge of the United States.* A patient in a hospital or similar institution, or a Federal prisoner, if the hospital, institution, or prison is operated by a Federal agency and the support or care of such person results in a charge on, or an expense to, the United States Government.
*Chewing tobacco.* Any leaf tobacco that is not intended to be smoked.
*Cigar.* Any roll of tobacco wrapped in leaf tobacco or in any substance containing tobacco (other than any roll of tobacco which is a cigarette within the meaning of paragraph (2) of the definition for cigarette).
*Cigarette.*
(1) Any roll of tobacco wrapped in paper or in any substance not containing tobacco, and
(2) Any roll of tobacco wrapped in any substance containing tobacco which, because of its appearance, the type of tobacco used in the filler, or its packaging and labeling, is likely to be offered to, or purchased by, consumers as a cigarette described in paragraph (1) of this definition.
*Cigarette paper.* Paper, or any other material except tobacco, prepared for use as a cigarette wrapper.
*Cigarette tube.* Cigarette paper made into a hollow cylinder for use in making cigarettes.
*Factory.* The premises of a manufacturer of tobacco products or cigarette papers and tubes in which the manufacturer carries on such business.
*Federal agency.* A department or agency of the United States Government, including the American National Red Cross, and the U.S. Soldiers Home, Washington, D.C.
*Large cigarettes.* Cigarettes weighing more than three pounds per thousand.
*Large cigars.* Cigars weighing more than three pounds per thousand.
*Manufacturer of cigarette papers and tubes.* Any person who manufactures cigarette paper, or makes up cigarette paper into tubes, except for their own personal use or consumption.
*Manufacturer of tobacco products.* Any person who manufactures cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own tobacco but does not include:
(1) A person who produces tobacco products solely for that person's own consumption or use; or
(2) A proprietor of a customs bonded manufacturing warehouse with respect to the operation of such warehouse.
*Package.* The immediate container in which tobacco products, processed tobacco, or cigarette papers or tubes are put up by the manufacturer and offered for sale or delivery to the ultimate consumer. For purposes of this definition, a container of processed tobacco, the contents of which weigh 10 pounds or less (including any added non-tobacco ingredients or constituents), that is removed within the meaning of this part, is deemed to be a package offered for sale or delivery to the ultimate consumer.
*Person.* An individual, partnership, association, company, corporation, estate, or trust.
*Pipe tobacco.* Any tobacco which, because of its appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or purchased by, consumers as tobacco to be smoked in a pipe.
*Removal or remove.* The removal of tobacco products or cigarette papers or tubes from the factory.
*Roll-your-own tobacco.* Any tobacco which, because of its appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or purchased by, consumers as tobacco for making cigarettes or cigars, or for use as wrappers thereof.
*Sale price.* The price for which large cigars are sold by the manufacturer or importer, determined in accordance with [§§ 40.22](/current/title-27/section-40.22) or [41.39](/current/title-27/section-41.39) and used in computation of the tax.
*Small cigarettes.* Cigarettes weighing not more than three pounds per thousand.
*Small cigars.* Cigars weighing not more than three pounds per thousand.
*Smokeless tobacco.* Any chewing tobacco or snuff.
*Snuff.* Any finely cut, ground, or powdered tobacco that is not intended to be smoked.
*This chapter.* Chapter I, [title 27, Code of Federal Regulations](/current/title-27).
*Tobacco products.* Cigars, cigarettes, smokeless tobacco, pipe tobacco, and roll-your-own tobacco.
*United States.* When used in a geographical sense shall include only the States and the District of Columbia.
*U.S.C.* The United States Code.
\[T.D. ATF-48, [43 FR 13557](https://www.federalregister.gov/citation/43-FR-13557), Mar. 31, 1978]
#### Editorial Note:
For Federal Register citations affecting [§ 45.11](/current/title-27/section-45.11), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
## Subpart C—Administrative Provisions
#### § 45.21 Alternate methods or procedures.
(a) A manufacturer, on specific approval by the appropriate TTB officer as provided in this section, may use an alternate method or procedure in lieu of a method or procedure specifically prescribed in this part. The appropriate TTB officer may approve an alternate method or procedure, subject to stated conditions, when that officer finds that:
(1) Good cause has been shown for the use of the alternate method or procedure.
(2) The alternate method or procedure is within the purpose of, and consistent with the effect intended by, the specifically prescribed method or procedure, and affords equivalent security to the revenue, and
(3) The alternate method or procedure will not be contrary to any provision of law, and will not result in an increase in cost to the Government or hinder the effective administration of this part.
(b) No alternate method or procedure relating to the giving of any bond or to the assessment, payment, or collection of tax, shall be authorized under this section. Where a manufacturer desires to employ an alternate method or procedure, the manufacturer must submit a written application to the appropriate TTB officer. The application shall specifically describe the proposed alternate method or procedure, and shall set forth the reasons therefor. Alternate methods or procedures shall not be employed until the application has been approved by the appropriate TTB officer. The manufacturer shall, during the period of authorization of an alternate method or procedure, comply with the terms of the approved application. Authorization for any alternate method or procedure may be withdrawn whenever in the judgment of the appropriate TTB officer the revenue is jeopardized or the effective administration of this part is hindered. The manufacturer shall retain, as part of their records, any authorization of the appropriate TTB officer under this section for three years following the close of the calendar year in which the operation under such authorization is concluded.
\[Redesignated by T.D. ATF-469, [66 FR 56758](https://www.federalregister.gov/citation/66-FR-56758), Nov. 13, 2001, as amended by T.D. ATF-472, [67 FR 8880](https://www.federalregister.gov/citation/67-FR-8880), Feb. 27, 2002; T.D. TTB-196, [89 FR 87949](https://www.federalregister.gov/citation/89-FR-87949), Nov. 6, 2024]
#### § 45.22 Emergency variations from requirements.
(a) The appropriate TTB officer may approve methods of operation other than as specified in this part, where that officer finds that an emergency exists and the proposed variations from the specified requirements are necessary, and the proposed variations:
(1) Will afford the security and protection to the revenue intended by the prescribed specifications.
(2) Will not hinder the effective administration of this part, and
(3) Will not be contrary to any provision of law.
(b) Variations from requirements granted under this section are conditioned on compliance with the procedures, conditions, and limitations set forth in the approval of the application. Failure to comply in good faith with such procedures, conditions, and limitations shall automatically terminate the authority for such variations and the manufacturer thereupon shall fully comply with the prescribed requirements of regulations from which the variations were authorized. Authority for any variations may be withdrawn whenever in the judgment of the appropriate TTB officer the revenue is jeopardized or the effective administration of this part is hindered by the continuation of such variation. Where a manufacturer desires to employ such variation, the manufacturer must submit a written application to the appropriate TTB officer. The application shall describe the proposed variations and set forth the reasons therefor. Variations shall not be employed until the application has been approved. The manufacturer shall retain, as part of their records, any authorization of the appropriate TTB officer under this section for three years following the close of the calendar year in which the operation under such authorization is concluded.
\[[27 FR 4476](https://www.federalregister.gov/citation/27-FR-4476), May 10, 1962. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-472, [67 FR 8880](https://www.federalregister.gov/citation/67-FR-8880), Feb. 27, 2002; T.D. TTB-196, [89 FR 87949](https://www.federalregister.gov/citation/89-FR-87949), Nov. 6, 2024]
#### § 45.23 Authority of appropriate TTB officers to enter premises.
Any appropriate TTB officer may enter in the daytime any premises where tobacco products, or cigarette papers or tubes removed under this part are kept, so far as it may be necessary for the purpose of examining such articles. When such premises are open at night, any appropriate TTB officer may enter them, while so open, in the performance of their official duties. The owner of such premises, or person having the superintendence of the same, who refuses to admit any appropriate TTB officer or permit that officer to examine the articles removed under this part shall be liable to the penalties prescribed by law for the offense.
(68A Stat. 872, 903; [26 U.S.C. 7342](https://www.govinfo.gov/link/uscode/26/7342), [7606](https://www.govinfo.gov/link/uscode/26/7606))
\[T.D. 6871, [31 FR 57](https://www.federalregister.gov/citation/31-FR-57), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28090](https://www.federalregister.gov/citation/51-FR-28090), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-472, [67 FR 8880](https://www.federalregister.gov/citation/67-FR-8880), Feb. 27, 2002; T.D. TTB-196, [89 FR 87949](https://www.federalregister.gov/citation/89-FR-87949), Nov. 6, 2024]
#### § 45.24 Interference with administration.
Whoever, corruptly or by force or threats of force, endeavors to hinder or obstruct the administration of this part, or endeavors to intimidate or impede any appropriate TTB officer acting in their official capacity, or forcibly rescues or attempts to rescue or causes to be rescued any property, after it has been duly seized for forfeiture to the United States in connection with a violation of the internal revenue laws, shall be liable to the penalties prescribed by law.
(68A Stat. 855; [26 U.S.C. 7212](https://www.govinfo.gov/link/uscode/26/7212))
\[[27 FR 4476](https://www.federalregister.gov/citation/27-FR-4476), May 10, 1962. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-472, [67 FR 8880](https://www.federalregister.gov/citation/67-FR-8880), Feb. 27, 2002; T.D. TTB-196, [89 FR 87949](https://www.federalregister.gov/citation/89-FR-87949), Nov. 6, 2024]
#### § 45.25 Unlawful purchase, receipt, possession, or sale of tobacco products, or cigarette papers or tubes, after removal.
Any person who, with intent to defraud the United States, purchases, receives, possesses, offers for sale, or sells or otherwise disposes of tobacco products, or cigarette papers or tubes which, after removal under this part, without payment of tax, have been diverted from the purpose or use specified in this part, shall be subject to the criminal penalties and provisions for forfeiture prescribed by law.
(72 Stat. 1424, 1425, as amended, 1426; [26 U.S.C. 5751](https://www.govinfo.gov/link/uscode/26/5751), [5762](https://www.govinfo.gov/link/uscode/26/5762), [5763](https://www.govinfo.gov/link/uscode/26/5763))
\[T.D. 6871, [31 FR 57](https://www.federalregister.gov/citation/31-FR-57), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28090](https://www.federalregister.gov/citation/51-FR-28090), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 45.26 Delegations of the Administrator.
The regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.45, Delegation of the Administrator's Authorities in [27 CFR Part 45](/current/title-27/part-45), Removal of Tobacco Products and Cigarette Papers and Tubes, Without Payment of Tax, for Use of the United States. You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-44, [71 FR 16955](https://www.federalregister.gov/citation/71-FR-16955), Apr. 4, 2006, as amended by T.D. TTB-196, [89 FR 87949](https://www.federalregister.gov/citation/89-FR-87949), Nov. 6, 2024]
#### § 45.27 Forms prescribed.
(a) The appropriate TTB officer is authorized to prescribe all forms required by this part. You must furnish all of the information required by each form as indicated by the headings on the form and the instructions for the form, and as required by this part. You must file each form in accordance with its instructions.
(b) Forms prescribed by this part are available for printing through the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov).*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. ATF-472, [67 FR 8880](https://www.federalregister.gov/citation/67-FR-8880), Feb. 27, 2002, as amended by T.D. TTB-44, [71 FR 16955](https://www.federalregister.gov/citation/71-FR-16955), Apr. 4, 2006; T.D. TTB-196, [89 FR 87949](https://www.federalregister.gov/citation/89-FR-87949), Nov. 6, 2024]
## Subpart D—Removals
#### Source:
T.D. 6871, [31 FR 57](https://www.federalregister.gov/citation/31-FR-57), Jan. 14, 1966, unless otherwise noted. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975.
#### § 45.31 Removals for delivery to a Federal agency.
(a) *Removal of articles.* A manufacturer may remove tobacco products or cigarette papers and tubes without payment of tax, in accordance with this part, for delivery to a Federal agency if:
(1) The removed articles were purchased by the Federal agency with funds appropriated by the Congress of the United States and are for gratuitous distribution under the supervision of the Federal agency;
(2) The removed articles were purchased by a donor from the manufacturer, or donated directly by the manufacturer, for gratuitous distribution under the supervision of the Federal agency to:
(i) Charges of the United States; or
(ii) Patients in a hospital or institution operated by the Government of a State or the District of Columbia where the Federal agency maintains a program for distribution to members or veterans of the armed forces of the United States in the hospital or institution; or
(3) The removed articles are intended for use by the Federal agency in an investigation or other Federal law enforcement activity.
(b) *Sale prohibited.* Except in the case of articles described in [paragraph (a)(3)](/current/title-27/section-45.31#p-45.31\(a\)\(3\)) of this section where a sale is incident to the Federal law enforcement activity, tobacco products and cigarette papers and tubes removed under this section may not be sold after their removal.
\[T.D. TTB-26, [70 FR 19890](https://www.federalregister.gov/citation/70-FR-19890), Apr. 15, 2005]
#### § 45.32 Under manufacturer's bond.
Removals of tobacco products, and cigarette papers and tubes under this part shall be made under the bond filed by the manufacturer of such articles to cover the operations of their factory as required by section 5711, I.R.C., and regulations issued thereunder.
(72 Stat. 1418, as amended, 1421, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704), [5711](https://www.govinfo.gov/link/uscode/26/5711))
\[T.D. 6871, [31 FR 57](https://www.federalregister.gov/citation/31-FR-57), as amended by T.D. ATF-243, [51 FR 28090](https://www.federalregister.gov/citation/51-FR-28090), Aug. 5, 1986; [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. TTB-196, [89 FR 87949](https://www.federalregister.gov/citation/89-FR-87949), Nov. 6, 2024]
#### § 45.33 Return of shipment to factory.
Tobacco products, and cigarette papers and tubes which have been removed, under this part, may be returned to the factory without internal revenue supervision.
(72 Stat. 1418, as amended; [26 U.S.C. 5704](https://www.govinfo.gov/link/uscode/26/5704))
\[T.D. 6871, [31 FR 57](https://www.federalregister.gov/citation/31-FR-57), as amended by T.D. ATF-243, [51 FR 28090](https://www.federalregister.gov/citation/51-FR-28090), Aug. 5, 1986; [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 45.34 Loss or shortage in shipment.
Immediately upon receipt of information of a loss of all or part of a shipment, or of a shortage therein, of tobacco products, or cigarette papers or tubes removed under this part, the manufacturer shall notify the appropriate TTB officer, furnish all pertinent details with respect to the loss or shortage, and either pay the tax due thereon in accordance with the provisions of [§ 45.36](/current/title-27/section-45.36), or file claim for remission of the tax liability under the provisions of [part 40 of this chapter](/current/title-27/part-40), as the case may be.
(72 Stat. 1417, 1419, as amended; [26 U.S.C. 5703](https://www.govinfo.gov/link/uscode/26/5703), [5705](https://www.govinfo.gov/link/uscode/26/5705))
\[T.D. 6871, [31 FR 57](https://www.federalregister.gov/citation/31-FR-57), as amended by T.D. ATF-243, [51 FR 28090](https://www.federalregister.gov/citation/51-FR-28090), Aug. 5, 1986; [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-384, [61 FR 54096](https://www.federalregister.gov/citation/61-FR-54096), Oct. 17, 1996; T.D. ATF-469, [66 FR 56758](https://www.federalregister.gov/citation/66-FR-56758), Nov. 13, 2001; T.D. ATF-472, [67 FR 8880](https://www.federalregister.gov/citation/67-FR-8880), Feb. 27, 2002]
#### § 45.35 Liability for tax.
The manufacturer who removes tobacco products, or cigarette papers or tubes under this part shall be liable for the taxes imposed thereon by [26 U.S.C. 5701](https://www.govinfo.gov/link/uscode/26/5701), until such tobacco products, or cigarette papers or tubes are received by the Federal agency. Any person who possesses tobacco products, or cigarette papers or tubes in violation of [26 U.S.C. 5751(a)(1)](https://www.govinfo.gov/link/uscode/26/5751) or [(2)](https://www.govinfo.gov/link/uscode/26/5751), shall be liable for a tax equal to the tax on such articles.
(72 Stat. 1417, 1424; [26 U.S.C. 5703](https://www.govinfo.gov/link/uscode/26/5703), [5751](https://www.govinfo.gov/link/uscode/26/5751))
\[T.D. 6871, [31 FR 57](https://www.federalregister.gov/citation/31-FR-57), Jan. 14, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55856](https://www.federalregister.gov/citation/44-FR-55856), Sept. 28, 1979; T.D. ATF-232, [51 FR 28090](https://www.federalregister.gov/citation/51-FR-28090), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 45.36 Payment of tax.
Any tax which becomes due and payable on tobacco products, and cigarette papers and tubes removed under this part shall be paid to the appropriate TTB officer, with sufficient information to identify the taxpayer, the nature and purpose of the payment, and the articles covered by the payment: *Provided,* That a manufacturer of tobacco products or cigarette papers or tubes may pay any tax for which that person becomes liable under this part by an appropriate adjustment in their current tax return Form 5000.24. In paying the tax, a fractional part of a cent shall be disregarded unless it amounts to one-half cent or more, in which case it shall be increased to one cent.
\[T.D. ATF-232, [51 FR 28090](https://www.federalregister.gov/citation/51-FR-28090), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986, as amended by T.D. ATF-251, [52 FR 19341](https://www.federalregister.gov/citation/52-FR-19341), May 22, 1987; T.D. ATF-472, [67 FR 8880](https://www.federalregister.gov/citation/67-FR-8880), Feb. 27, 2002; T.D. TTB-196, [89 FR 87949](https://www.federalregister.gov/citation/89-FR-87949), Nov. 6, 2024]
#### § 45.37 Assessment.
Whenever any person required by law to pay tax on tobacco products, and cigarette papers and tubes fails to pay such tax, the tax shall be ascertained and assessed against such person, subject to the limitations prescribed in [26 U.S.C. 6501](https://www.govinfo.gov/link/uscode/26/6501). The tax so assessed shall be in addition to the penalties imposed by law for failure to pay such tax when required. Except in cases where delay may jeopardize collection of the tax, or where the amount is nominal or the result of an evident mathematical error, no such assessment shall be made until and after notice has been afforded such person to show cause against assessment. The person will be allowed 45 days from the date of such notice to show cause, in writing, against such assessment.
(72 Stat. 1417; [26 U.S.C. 5703](https://www.govinfo.gov/link/uscode/26/5703))
\[T.D. 6871, [31 FR 57](https://www.federalregister.gov/citation/31-FR-57), Jan. 14, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55856](https://www.federalregister.gov/citation/44-FR-55856), Sept. 28, 1979; T.D. ATF-232, [51 FR 28090](https://www.federalregister.gov/citation/51-FR-28090), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
## Subpart E—Packaging Requirements
#### § 45.41 Packages.
All tobacco products, and cigarette papers and tubes shall, before removal under this part, be put up by the manufacturer in packages which shall be of such construction as will securely contain the articles therein and maintain the mark, notice, and label thereon, as required by this subpart. No package of tobacco products, or cigarette papers or tubes shall have contained therein, attached thereto, or stamped, marked, written, or printed thereon (a) any certificate, coupon, or other device purporting to be or to represent a ticket, chance, share, or an interest in, or dependent on, the event of a lottery, or (b) any indecent or immoral picture, print, or representation.
(72 Stat. 1422; [26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723))
\[T.D. 6871, [31 FR 58](https://www.federalregister.gov/citation/31-FR-58), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975 and amended by T.D. ATF-232, [51 FR 28090](https://www.federalregister.gov/citation/51-FR-28090), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 45.42 Mark.
Every package of tobacco products shall before removal from the factory under this part, have adequately imprinted thereon, or on a label securely affixed thereto, a mark as specified in this section. The mark may consist of the name of the manufacturer removing the product and the location (by city and State) of the factory from which the products are to be so removed, or may consist of the permit number of the factory from which the products are to be so removed. (Any trade name of the manufacturer approved as provided in [§ 40.65 of this chapter](/current/title-27/section-40.65) may be used in the mark as the name of the manufacturer.) As an alternative, where tobacco products are both packaged and removed by the same manufacturer, either at the same or different factories, the mark may consist of the name of such manufacturer if the factory where packaged is identified on or in the package by a means approved by the appropriate TTB officer. Before using the alternative, the manufacturer shall notify the appropriate TTB officer in writing of the name to be used as the name of the manufacturer and the means to be used for identifying the factory where packaged. If approved by the appropriate TTB officer, that officer shall return approved copies of the notice to the manufacturer. A copy of the approved notice shall be retained as part of the factory records at each of the factories operated by the manufacturer.
(72 Stat. 1422; [26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723))
\[T.D. 6871, [31 FR 58](https://www.federalregister.gov/citation/31-FR-58), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975 and amended by T.D. ATF-232, [51 FR 28090](https://www.federalregister.gov/citation/51-FR-28090), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-472, [67 FR 8880](https://www.federalregister.gov/citation/67-FR-8880), Feb. 27, 2002; T.D. TTB-196, [89 FR 87949](https://www.federalregister.gov/citation/89-FR-87949), Nov. 6, 2024]
#### § 45.43 Notice for smokeless tobacco.
(a) *Product designation.* Every package of chewing tobacco or snuff shall, before removal under this part, have adequately imprinted thereon, or on a label securely affixed thereto, the designation “chewing tobacco” or “snuff.” As an alternative, packages of chewing tobacco may be designated “Tax Class C,” and packages of snuff may be designated “Tax Class M.”
(b) *Product weight.* Every package of chewing tobacco or snuff shall, before removal under this part, have adequately imprinted thereon, or on a label securely affixed thereto, a clear statement of the actual pounds and ounces of the product contained therein. As an alternative, the shipping cases containing packages of chewing tobacco or snuff may, before removal, have adequately imprinted thereon, or on a label securely affixed thereto, a clear statement, in pounds and ounces, of the total weight of the product, the tax class of the product, and the total number of the packages of product contained therein.
(Approved by the Office of Management and Budget under control number 1512-0502)
(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 ([26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723)))
\[T.D. ATF-232, [51 FR 28090](https://www.federalregister.gov/citation/51-FR-28090), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-469, [66 FR 56758](https://www.federalregister.gov/citation/66-FR-56758), Nov. 13, 2001]
#### § 45.44 Notice for cigars.
Before removal under this part, every package of cigars shall have adequately imprinted on it, or on a label securely affixed to it—
(a) The designation “cigars”;
(b) The quantity of cigars contained in the package; and
(c) For small cigars, the classification of the product for tax purposes (i.e., either “small” or “little”).
(Sec. 202, Pub. L. 85-859, 72 Stat. 1422 ([26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723)))
\[T.D. ATF-80, [46 FR 18312](https://www.federalregister.gov/citation/46-FR-18312), Mar. 24, 1981]
#### § 45.45 Notice for cigarettes.
Every package of cigarettes shall, before removal under this part, have adequately imprinted thereon, or on a label securely affixed thereto, the designation “cigarettes”, the quantity of such product contained therein, and the classification for tax purposes, i.e., for small cigarettes, either “small” or “Class A”, and for large cigarettes, either “large” or “Class B”.
(72 Stat. 1422; [26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723))
\[[27 FR 4478](https://www.federalregister.gov/citation/27-FR-4478), May 10, 1962. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### § 45.45a Notice for pipe tobacco.
(a) *Product designation.* Every package of pipe tobacco shall, before removal subject to tax, have adequately imprinted thereon, or on a label securely affixed thereto, the designation “pipe tobacco.”
(b) *Product weight.* Every package of pipe tobacco shall, before removal subject to tax, have adequately imprinted thereon, or on a label securely affixed thereto, a clear statement of the actual pounds and ounces of the product contained therein.
\[T.D. ATF-289, [54 FR 48842](https://www.federalregister.gov/citation/54-FR-48842), Nov. 27, 1989, as amended by T.D. TTB-78, [74 FR 29420](https://www.federalregister.gov/citation/74-FR-29420), June 22, 2009]
#### § 45.45b Notice for roll-your-own tobacco.
(a) *Product designation.* Every package of roll-your-own tobacco, before removal subject to tax, must have adequately imprinted on it, or on a label securely affixed to it, the applicable designation “roll-your-own tobacco”, “cigarette tobacco”, “cigar tobacco”, “cigarette wrapper”, or “cigar wrapper”.
(b) *Product weight.* Before removal subject to tax, roll-your-own tobacco must have a clear statement of the actual weight in pounds and ounces of the product in the package. This statement must be adequately imprinted on, or on a label securely affixed to, the package.
(Approved by the Office of Management and Budget under control number 1513-0091)
\[T.D. ATF-429, [65 FR 57547](https://www.federalregister.gov/citation/65-FR-57547), Sept. 25, 2000, as amended by T.D. TTB-78, [74 FR 29420](https://www.federalregister.gov/citation/74-FR-29420), June 22, 2009]
#### § 45.45c Package use-up rule.
(a) During the period from June 22, 2009, through March 23, 2010, a manufacturer of tobacco products may remove packages of pipe tobacco or roll-your-own tobacco that do not meet the requirements of [§ 45.45a(a)](/current/title-27/section-45.45a#p-45.45a\(a\)) or [§ 45.45b(a)](/current/title-27/section-45.45b#p-45.45b\(a\)), provided that such packages bear the designation “Tax Class L” (to designate pipe tobacco) or “Tax Class J” (to designate roll-your-own tobacco)) and were in use prior to June 22, 2009.
(b) During the period from June 22, 2009, through March 23, 2010, a manufacturer may remove roll-your-own tobacco for which the applicable designation is “cigar tobacco,” “cigarette wrapper,” or “cigar wrapper” even if the packages of such products do not meet the requirements of [§ 45.45b](/current/title-27/section-45.45b).
\[T.D. TTB-81, [74 FR 48654](https://www.federalregister.gov/citation/74-FR-48654), Sept. 24, 2009]
#### § 45.46 Tax-exempt label.
Except in the case of articles described in [§ 45.31(a)(3)](/current/title-27/section-45.31#p-45.31\(a\)\(3\)), every package of tobacco products, and cigarette papers and tubes removed under this part shall have the words “Tax-Exempt. For Use of U.S. Not To Be Sold.” adequately imprinted on the package or on a label securely affixed thereto.
(72 Stat. 1422; [26 U.S.C. 5723](https://www.govinfo.gov/link/uscode/26/5723))
\[T.D. 6871, [31 FR 58](https://www.federalregister.gov/citation/31-FR-58), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975; and amended by T.D. ATF-232, [51 FR 28090](https://www.federalregister.gov/citation/51-FR-28090), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. TTB-26, [70 FR 19890](https://www.federalregister.gov/citation/70-FR-19890), Apr. 15, 2005]
## Subpart F—Records
#### § 45.51 Supporting records.
(a) *Records of removals.* Every manufacturer who removes tobacco products, and cigarette papers and tubes under this part must, in addition to the records kept under [part 40 of this chapter](/current/title-27/part-40), keep a supporting record of such removals and must make appropriate entries therein at the time of removal. The supporting record for each removal must show:
(1) The date of removal;
(2) The name and address of the Federal agency to which shipped or delivered;
(3) The kind and quantity and,
(4) for large cigars, the sale price.
(b) *Records of returns.* If any tobacco products, or cigarette papers or tubes removed under this part are returned to the factory, such returns must be noted in the supporting record.
(c) *Commercial records.* Where the manufacturer keeps, at the factory, copies of invoices or other commercial records containing the information required as to each removal, in such manner that the information may be readily ascertained therefrom, such copies will be considered the supporting record required by this section.
(d) *Retention period.* The manufacturer must retain the supporting record for 3 years following the close of the year covered therein. The record must be made available for inspection by any appropriate TTB officer upon request.
(Approved by the Office of Management and Budget under control number 1512-0363)
(See [26 U.S.C. 5741](https://www.govinfo.gov/link/uscode/26/5741))
\[T.D. ATF-420, [64 FR 71945](https://www.federalregister.gov/citation/64-FR-71945), Dec. 22, 1999, as amended by T.D. ATF-472, Feb. 27, 2002]
# Part 46 — MISCELLANEOUS REGULATIONS RELATING TO TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-46
Full text of 27 CFR Part 46 — MISCELLANEOUS REGULATIONS RELATING TO TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 46—MISCELLANEOUS REGULATIONS RELATING TO TOBACCO PRODUCTS AND CIGARETTE PAPERS AND TUBES
#### Authority:
[18 U.S.C. 2341-2346](https://www.govinfo.gov/link/uscode/18/2341), [26 U.S.C. 5061](https://www.govinfo.gov/link/uscode/26/5061), [5704](https://www.govinfo.gov/link/uscode/26/5704), [5708](https://www.govinfo.gov/link/uscode/26/5708), [5731-5734](https://www.govinfo.gov/link/uscode/26/5731), [5751](https://www.govinfo.gov/link/uscode/26/5751), [5754](https://www.govinfo.gov/link/uscode/26/5754), [5761-5763](https://www.govinfo.gov/link/uscode/26/5761), [6001](https://www.govinfo.gov/link/uscode/26/6001), [6109](https://www.govinfo.gov/link/uscode/26/6109), [6601](https://www.govinfo.gov/link/uscode/26/6601), [6621](https://www.govinfo.gov/link/uscode/26/6621), [6622](https://www.govinfo.gov/link/uscode/26/6622), [7212](https://www.govinfo.gov/link/uscode/26/7212), [7342](https://www.govinfo.gov/link/uscode/26/7342), [7602](https://www.govinfo.gov/link/uscode/26/7602), [7606](https://www.govinfo.gov/link/uscode/26/7606), [7805](https://www.govinfo.gov/link/uscode/26/7805); [44 U.S.C. 3504(h)](https://www.govinfo.gov/link/uscode/44/3504), [49 U.S.C. 782](https://www.govinfo.gov/link/uscode/49/782), unless otherwise noted.
#### Source:
Redesignated by T.D. ATF-457, [66 FR 32220](https://www.federalregister.gov/citation/66-FR-32220), June 14, 2001.
#### Editorial Note:
Nomenclature changes to part 46 appear by T.D. ATF-457, [66 FR 32220](https://www.federalregister.gov/citation/66-FR-32220), [32221](https://www.federalregister.gov/citation/66-FR-32221), June 14, 2001.
Cross Reference:
For exportation of tobacco materials, tobacco products, and cigarette papers and tubes, without payment of tax, or with drawback of tax, see part 44.
## Subpart A—Application of 26 U.S.C. 6423, as Amended, to Refund or Credit of Tax on Tobacco Products, and Cigarette Papers and Tubes
#### Source:
T.D. 6395, [24 FR 599](https://www.federalregister.gov/citation/24-FR-599), Jan. 28, 1959, unless otherwise noted. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975.
### General
#### § 46.1 Scope of regulations in this subpart.
The regulations in this subpart relate to the limitations imposed by [26 U.S.C. 6423](https://www.govinfo.gov/link/uscode/26/6423), on the refund or credit of tax paid or collected in respect to any article of a kind subject to a tax imposed by [26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201).
\[T.D. ATF-48, [44 FR 55857](https://www.federalregister.gov/citation/44-FR-55857), Sept. 28, 1979]
#### § 46.2 Meaning of terms.
When used in this subpart, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof, terms shall have the meaning ascribed in this section.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.46, Delegation of the Administrator's Authorities in [27 CFR Part 46](/current/title-27/part-46), Miscellaneous Regulations Relating to Tobacco Products and Cigarette Papers and Tubes.
*Article.* The commodity in respect to which the amount claimed was paid or collected as a tax.
*Claimant.* Any person who files a claim for a refund or credit of tax under this subpart.
*Owner.* A person who, by reason of a proprietary interest in the article, furnished the amount claimed to the claimant for the purpose of paying the tax.
*Person.* An individual, a trust, estate, partnership, association, company, or corporation.
*Tax.* Any tax imposed by [26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201), or by any corresponding provision of prior internal revenue laws, and in the case of any commodity of a kind subject to a tax under such chapter, any tax equal to any such tax, any additional tax, or any floor stocks tax. The term includes an exaction denominated a “tax”, and any penalty, addition to tax, additional amount, or interest applicable to any such tax.
\[T.D. 6395, [24 FR 599](https://www.federalregister.gov/citation/24-FR-599), Jan. 28, 1959. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### Editorial Note:
For Federal Register citations affecting [§ 46.2](/current/title-27/section-46.2), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
#### § 46.3 Applicability to certain credits or refunds.
The provisions of this subpart apply only where the credit or refund is claimed on the grounds that an amount of tax was assessed or collected erroneously, illegally, without authority, or in any manner wrongfully, or on the grounds that such amount was excessive. This subpart does not apply to:
(a) Any claim for drawback,
(b) Any claim made in accordance with any law expressly providing for credit or refund where an article is withdrawn from the market, returned to bond, lost, or destroyed, and
(c) Any claim based solely on errors in computation of the quantity of an article subject to tax or on mathematical errors in computation of the amount of the tax due, or to any claim in respect of tax collected or paid on an article seized and forfeited, or destroyed, as contraband.
\[T.D. 6395, [24 FR 599](https://www.federalregister.gov/citation/24-FR-599), Jan. 28, 1959. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-42, [42 FR 8372](https://www.federalregister.gov/citation/42-FR-8372), Feb. 10, 1977]
#### § 46.4 Ultimate burden.
For the purposes of this subpart, the claimant, or owner, shall be treated as having borne the ultimate burden of an amount of tax only if:
(a) He has not, directly or indirectly, been relieved of such burden or shifted such burden to any other person,
(b) No understanding or agreement exists for any such relief or shifting, and
(c) If he has neither sold nor contracted to sell the articles involved in such claim, he agrees that there will be no such relief or shifting, and furnishes bond as provided in [§ 46.10](/current/title-27/section-46.10).
#### § 46.5 Conditions to allowance of credit or refund.
No credit or refund to which this subpart is applicable shall be allowed or made, pursuant to a court decision or otherwise, of any amount paid or collected as a tax unless a claim therefor has been filed, as provided in this subpart, by the person who paid the tax and the claimant, in addition to establishing that he is otherwise legally entitled to credit or refund of the amount claimed, establishes:
(a) That he bore the ultimate burden of the amount claimed, or
(b) That he has unconditionally repaid the amount claimed to the person who bore the ultimate burden of such amount, or
(c) That
(1) the owner of the article furnished him the amount claimed for payment of the tax,
(2) he has filed with the appropriate TTB officer the written consent of such owner to the allowance to the claimant of the credit or refund, and
(3) such owner satisfies the requirements of [paragraph (a)](/current/title-27/section-46.5#p-46.5\(a\)) or [(b)](/current/title-27/section-46.5#p-46.5\(b\)) of this section.
\[T.D. 6395, [24 FR 599](https://www.federalregister.gov/citation/24-FR-599), Jan. 28, 1959. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-472, [67 FR 8880](https://www.federalregister.gov/citation/67-FR-8880), Feb. 27, 2002]
#### § 46.6 Requirements for persons intending to file claim.
Any person who, having paid the tax with respect to an article, desires to claim refund or credit of any amount of such tax to which the provisions of this subpart are applicable must:
(a) File a claim, as provided in [§ 46.7](/current/title-27/section-46.7),
(b) Comply with any other provisions of law or regulations which may apply to the claim, and
(c) If, at the time of filing the claim, neither he nor the owner has sold or contracted to sell the articles involved in the claim, file a bond on TTB Form 5620.10, as provided by [§ 46.10](/current/title-27/section-46.10).
\[T.D. 6395, [24 FR 599](https://www.federalregister.gov/citation/24-FR-599), Jan. 28, 1959. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-472, [67 FR 8880](https://www.federalregister.gov/citation/67-FR-8880), Feb. 27, 2002]
### Claim Procedure
#### § 46.7 Execution and filing of claim.
Claims to which this subpart is applicable must be executed on form TTB F 5620.8 in accordance with instructions for the form. (For provisions relating to hand-carried documents, see [§ 70.304 of this chapter](/current/title-27/section-70.304).) The claim shall set forth each ground upon which the claim is made in sufficient detail to apprise the appropriate TTB officer of the exact basis therefor. Allegations pertaining to the bearing of the ultimate burden relate to additional conditions which must be established for a claim to be allowed and are not in themselves legal grounds for allowance of a claim. There shall also be attached to the form and made a part of the claim the supporting data required by [§ 46.8](/current/title-27/section-46.8). All evidence relied upon in support of such claim shall be clearly set forth and submitted with the claim.
\[T.D. 7008, [34 FR 3672](https://www.federalregister.gov/citation/34-FR-3672), Mar. 1, 1969. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55857](https://www.federalregister.gov/citation/44-FR-55857), Sept. 28, 1979; T.D. ATF-251, [52 FR 19342](https://www.federalregister.gov/citation/52-FR-19342), May 22, 1987; T.D. ATF-301, [55 FR 47658](https://www.federalregister.gov/citation/55-FR-47658), Nov. 14, 1990; T.D. ATF-472, [67 FR 8880](https://www.federalregister.gov/citation/67-FR-8880), Feb. 27, 2002; T.D. TTB-196, [89 FR 87950](https://www.federalregister.gov/citation/89-FR-87950), Nov. 6, 2024]
#### § 46.8 Data to be shown in claim.
Claims to which this subpart is applicable, in addition to the requirements of [§ 46.7](/current/title-27/section-46.7), must set forth or contain the following:
(a) A statement that the claimant paid the amount claimed as a “tax” as defined in this subpart.
(b) Full identification (by specific reference to the form number, the date of filing, the place of filing, and the amount paid on the basis of the particular form or return) of the tax forms or returns covering the payments for which refund or credit is claimed.
(c) The written consent of the owner to allow the refund or credit to the claimant (where the owner of the article on which the tax was paid has furnished the claimant the amount claimed for the purpose of paying the tax).
(d) If the claimant or the owner, as the case may be, has neither sold nor contracted to sell the articles involved in the claim, a statement that the claimant or the owner, as the case may be, agrees not to shift, directly or indirectly in any manner whatsoever, the burden of the tax to any other person.
(e) If the claim is for refund of a floor stocks tax, or of an amount resulting from an increase in rate of tax applicable to an article, a statement as to whether the price of the article was increased on or following the effective date of such floor stocks tax or rate increase, and, if so, the date of the increase, together with full information as to the amount of such price increase.
(f) Specific evidence (such as relevant records, invoices, or other documents, or affidavits of individuals having personal knowledge of pertinent facts) which will satisfactorily establish the conditions of allowance set forth in [§ 46.5](/current/title-27/section-46.5).
The appropriate TTB officer may require the claimant to furnish as a part of the claim such additional information as he may deem necessary.
\[T.D. ATF-42, [42 FR 8372](https://www.federalregister.gov/citation/42-FR-8372), Feb. 10, 1977, as amended by T.D. ATF-472a, [67 FR 63544](https://www.federalregister.gov/citation/67-FR-63544), Oct. 15, 2002]
#### § 46.9 Time for filing claim.
No credit or refund of any amount of tax to which the provisions of this subpart apply shall be made unless the claimant files a claim therefor within the time prescribed by law and in accordance with the provisions of this subpart.
\[T.D. ATF-42, [42 FR 8373](https://www.federalregister.gov/citation/42-FR-8373), Feb. 10, 1977]
### Bond
#### § 46.10 Bond, Form 2490.
Each claim for a refund or credit of tax on articles which the claimant or the owner, as the case may be, has neither sold nor contracted to sell at the time of filing of the claim must be accompanied by a bond on TTB Form 5620.10. The bond shall be executed by the claimant or the owner of the articles, as the case may be, in accordance with the provisions of this subpart and the instructions printed on the form. Such bond shall be conditioned that there will be no relief or shifting of the ultimate burden of the tax to any other person. The penal sum shall not be less than the amount of tax claimed on all articles which have not been sold or contracted for sale at the time of filing of the claim. Bonds required by this subpart shall be given with corporate surety or with collateral security. A separate bond must be filed for each claim.
\[T.D. 6395, [24 FR 599](https://www.federalregister.gov/citation/24-FR-599), Jan. 28, 1959. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-472, [67 FR 8880](https://www.federalregister.gov/citation/67-FR-8880), Feb. 27, 2002]
#### § 46.11 Corporate surety.
(a) Surety bonds required under the provisions of this subpart may be given only with corporate sureties holding certificates of authority from the Secretary of the Treasury as acceptable sureties on Federal bonds. Limitations concerning corporate sureties are prescribed by the Secretary in the current revision of the Treasury Department Circular 570, Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies, as revised (see [paragraph (c)](/current/title-27/section-46.11#p-46.11\(c\)) of this section). The surety shall have no interest whatever in the business covered by the bond.
(b) Each bond and each extension of coverage of bond shall at the time of filing be accompanied by a power of attorney authorizing the agent or officer who executed the bond to so act on behalf of the surety. The appropriate TTB officer who is authorized to approve the bond may, whenever he or she deems it necessary, require additional evidence of the authority of the agent or officer to execute the bond or extension of coverage of bond. The power of attorney shall be prepared on a form provided by the surety company and executed under the corporate seal of the company. If the power of attorney submitted is other than a manually signed document, it shall be accompanied by a certificate of its validity.
(c) Treasury Department Circular 570 is published in the Federal Register annually on the first business day in July, and supplemental changes are published periodically thereafter (see *[https://www.federalregister.gov](https://www.federalregister.gov)*). The most recent circular and any supplemental changes to it may be viewed on the Bureau of the Fiscal Service website (see *[https://fiscal.treasury.gov](https://fiscal.treasury.gov)*).
\[T.D. ATF-92, [46 FR 46923](https://www.federalregister.gov/citation/46-FR-46923), Sept. 23, 1981, as amended by T.D. ATF-472, [67 FR 8880](https://www.federalregister.gov/citation/67-FR-8880), Feb. 27, 2002; T.D. TTB-196, [89 FR 87950](https://www.federalregister.gov/citation/89-FR-87950), Nov. 6, 2024]
#### § 46.12 Deposit of securities in lieu of corporate surety.
In lieu of corporate surety, the principal may pledge and deposit securities which are transferable and are guaranteed as to both interest and principal by the United States, in accordance with the provisions of [31 CFR part 225](/current/title-31/part-225).
#### § 46.13 Authority to approve bonds.
An appropriate TTB officer may approve all bonds required by this subpart.
\[T.D. ATF-472, [67 FR 8880](https://www.federalregister.gov/citation/67-FR-8880), Feb. 27, 2002]
#### § 46.14 Termination of liability.
Bonds on TTB Form 5620.10 will be terminated by the appropriate TTB officer on receipt of satisfactory evidence that the person giving the bond has disposed of the articles covered by the bond and that he bore the ultimate burden of the amount claimed and that no understanding or agreement exists whereby he will be relieved of such burden or shift such burden to another person.
\[T.D. 6395, [24 FR 599](https://www.federalregister.gov/citation/24-FR-599), Jan. 28, 1959. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-472, [67 FR 8880](https://www.federalregister.gov/citation/67-FR-8880), Feb. 27, 2002]
#### § 46.15 Release of pledged securities.
Securities of the United States, pledged and deposited as provided by [§ 46.12](/current/title-27/section-46.12), shall be released only in accordance with the provisions of [31 CFR part 225](/current/title-31/part-225). When the appropriate TTB officer is satisfied that they may be released, he shall fix the date or dates on which a part or all of such securities may be released. At any time prior to the release of such securities, the appropriate TTB officer may, for proper cause, extend the date of release for such additional length of time as he deems necessary.
\[T.D. 6395, [24 FR 599](https://www.federalregister.gov/citation/24-FR-599), Jan. 28, 1959. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-472, [67 FR 8880](https://www.federalregister.gov/citation/67-FR-8880), Feb. 27, 2002]
### Penalties
#### § 46.16 Penalties.
It is an offense punishable by fine and imprisonment for anyone to make or cause to be made any false or fraudulent claim upon the United States, or to make any false or fraudulent statements, or representations, in support of any claim, or to falsely or fraudulently execute any documents required by the provisions of the internal revenue laws, or any regulations made in pursuance thereof.
## Subpart B—Administrative Provisions
#### Source:
T.D. ATF-472, [67 FR 8880](https://www.federalregister.gov/citation/67-FR-8880), Feb. 27, 2002, unless otherwise noted.
#### § 46.21 Delegations of the Administrator.
The regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.46, Delegation of the Administrator's Authorities in [27 CFR Part 46](/current/title-27/part-46), Miscellaneous Regulations Relating to Tobacco Products and Cigarette Papers and Tubes. You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-44, [71 FR 16955](https://www.federalregister.gov/citation/71-FR-16955), Apr. 4, 2006, as amended by T.D. TTB-196, [89 FR 87950](https://www.federalregister.gov/citation/89-FR-87950), Nov. 6, 2024]
#### § 46.22 Forms prescribed.
(a) The appropriate TTB officer is authorized to prescribe all forms required by this part. You must furnish all of the information required by each form as indicated by the headings on the form and the instructions for the form, and as required by this part. You must file each form in accordance with its instructions.
(b) Forms prescribed by this part are available for printing through the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. ATF-472, [67 FR 8880](https://www.federalregister.gov/citation/67-FR-8880), Feb. 27, 2002, as amended by T.D. TTB-44, [71 FR 16955](https://www.federalregister.gov/citation/71-FR-16955), Apr. 4, 2006; T.D. TTB-196, [89 FR 87950](https://www.federalregister.gov/citation/89-FR-87950), Nov. 6, 2024]
## Subpart C—Disaster Loss Claims
#### § 46.71 Scope of subpart.
This subpart prescribes the requirements necessary to implement [26 U.S.C. 5708](https://www.govinfo.gov/link/uscode/26/5708), concerning payments which may be made by the United States in respect to the internal revenue taxes paid or determined and customs duties paid on tobacco products, and cigarette papers and tubes removed, which were lost, rendered unmarketable, or condemned by a duly authorized official by reason of a disaster occurring in the United States on or after September 3, 1958.
\[T.D. 6871, [31 FR 59](https://www.federalregister.gov/citation/31-FR-59), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55857](https://www.federalregister.gov/citation/44-FR-55857), Sept. 28, 1979; T.D. ATF-232, [51 FR 28090](https://www.federalregister.gov/citation/51-FR-28090), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
### Definitions
#### § 46.72 Meaning of terms.
When used in this subpart, the following terms shall have the meanings given in this section, unless the context clearly indicates otherwise. Words in the plural form shall include the singular, and vice versa, and words indicating the masculine gender shall include the feminine. The terms “includes” and “including” do not exclude things not listed which are in the same general class.
*Act.* The Excise Tax Technical Changes Act of 1958 (Pub. L. 85-859, 72 Stat. 1275), enacted September 2, 1958.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.46, Delegation of the Administrator's Authorities in [27 CFR Part 46](/current/title-27/part-46), Miscellaneous Regulations Relating to Tobacco Products and Cigarette Papers and Tubes.
*Claimant.* The person who held the tobacco products or cigarette papers and tubes for sale at the time of the disaster and who files claim under this subpart.
*Commissioner of Customs.* The Commissioner of U.S. Customs and Border Protection, Department of Homeland Security, Washington, DC.
*Disaster.* A flood, fire, hurricane, earthquake, storm, or other catastrophe which has occurred in any part of the United States on and after the day following the date of enactment of the act and which the President of the United States has determined, under the Act of September 30, 1950 (64 Stat. 1109; [42 U.S.C. 1855](https://www.govinfo.gov/link/uscode/42/1855)), was a “major disaster” as defined in such Act.
*Duly authorized official.* Any Federal, State, or local government official in whom has been vested authority to condemn tobacco products and cigarette papers and tubes made the subject of a claim under this subpart.
*Duty or duties.* Any duty or duties paid under the customs laws of the United States.
*Removal or remove.* The removal of tobacco products or cigarette papers or tubes from the factory, or release of such articles from Customs custody.
*Sale price.* The price for which large cigars are sold by the manufacturer or importer, determined in accordance with [§§ 40.22](/current/title-27/section-40.22) or [41.39](/current/title-27/section-41.39) and used in computation of the tax.
*Tax paid or determined.* The internal revenue tax on tobacco products and cigarette papers and tubes which has actually been paid, or which has been determined pursuant to [26 U.S.C. 5703(b)](https://www.govinfo.gov/link/uscode/26/5703), and regulations thereunder, at the time of their removal subject to tax payable on the basis of a return.
*Tobacco Products.* Cigars, cigarettes, smokeless tobacco, pipe tobacco, and roll-your-own tobacco.
*United States.* When used in a geographical sense, includes only the States, and the District of Columbia.
\[T.D. 6392, [24 FR 5300](https://www.federalregister.gov/citation/24-FR-5300), June 30, 1959]
#### Editorial Note:
For Federal Register citations affecting [§ 46.72](/current/title-27/section-46.72), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
### Payments
#### § 46.73 Circumstances under which payment may be made.
An appropriate TTB officer shall allow payment (without interest) of an amount equal to the amount of tax paid or determined, and the Commissioner of Customs shall allow payment (without interest) of an amount equal to the amount of customs duty paid, on tobacco products, and cigarette papers and tubes removed, which are lost, rendered unmarketable, or condemned by a duly authorized official by reason of a disaster occurring in the United States on and after September 3, 1958. Such payments may be made only if, at the time of the disaster, such tobacco products, or cigarette papers or tubes were being held for sale by the claimant. No payment shall be made under this subpart with respect to any amount of tax or duty claimed or to be claimed under any other provision of law or regulations.
\[T.D. 6871, [31 FR 59](https://www.federalregister.gov/citation/31-FR-59), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975 and amended by T.D. ATF-232, [51 FR 28090](https://www.federalregister.gov/citation/51-FR-28090), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-472, [67 FR 8881](https://www.federalregister.gov/citation/67-FR-8881), Feb. 27, 2002]
### Claims Procedure
#### § 46.74 Execution of claims.
Disaster loss claims for tobacco products or cigarette papers or tubes must be executed on form TTB F 5620.8, Claim—Alcohol, Tobacco and Firearms Taxes, in accordance with the instructions on the form. If a claim involves taxes on both domestic and imported products, the quantities of each must be shown separately in the claim. Prepare a separate claim in respect of customs duties.
\[T.D. ATF-420, [64 FR 71945](https://www.federalregister.gov/citation/64-FR-71945), Dec. 22, 1999, as amended by T.D. TTB-196, [89 FR 87950](https://www.federalregister.gov/citation/89-FR-87950), Nov. 6, 2024]
#### § 46.75 Required information for claim.
The claim should contain the following information:
(a) That the tax on such tobacco products, or cigarette papers or tubes has been paid or determined and customs duty has been paid;
(b) That such tobacco products, or cigarette papers or tubes were lost, rendered unmarketable, or condemned by a duly authorized official, by reason of a disaster;
(c) The type and date of occurrence of the disaster and the location of the tobacco products, or cigarette papers or tubes at that time;
(d) That the claimant was not indemnified by any valid claim of insurance or otherwise in respect of the tax, or tax and duty, on the tobacco products, or cigarette papers or tubes covered by the claim;
(e) That no amount of internal revenue tax or customs duty claimed has been or will be otherwise claimed under any other provision of law or regulations,
(f) That the claimant is entitled to payment under this subpart, and
(g) The claim must set forth the quantity and kind of tobacco products and cigarette papers and tubes in sufficient detail to calculate the amount of tax and duty paid on these products, substantially as shown in the examples below:
\[Example using rates for 2002 and After]
| Quantity | Article | Rate of tax | Amount |
| ------------- | -------------------------------------- | ---------------------- | -------- |
| 20,000 | Small cigars | \$1.828 per thousand | 36.56 |
| 1,000 | Large cigars—sale price \$100/thousand | 20.719% of sale price | 20.72 |
| 500 | Large cigars—sale price \$236/thousand | \$48.75 per thousand | 24.38 |
| 10,000 | Small cigarettes | \$19.50 per thousand | 195.00 |
| 5,000 | Large cigarettes | \$40.95 per thousand | 204.75 |
| 199,975 | Cigarette papers | \$0.0122 per 50 papers | 48.80 |
| 1,000 | Cigarette tubes | \$0.0244 per 50 tubes | 0.49 |
| 100 lbs | Chewing tobacco | \$0.195 per pound | 19.50 |
| 200 lbs | Snuff | \$0.585 per pound | 117.00 |
| 100 lbs | Pipe tobacco | \$1.0969 per pound | 109.69 |
| 300 lbs | Roll-your-own tobacco | \$1.0969 per pound | 329.07 |
| Total claimed | | | 1,105.96 |
Example Using Rates for April 1, 2009 and After
| Quantity | Article | Rate of tax | Amount |
| ------------- | ---------------------------------------- | ---------------------- | ---------- |
| 20,000 | Small cigars | \$50.33 per thousand | \$1,006.60 |
| 1,000 | Large cigars—sale price \$100/thousand | 52.75% of sale price | 52.75 |
| 500 | Large cigars—sale price \$0.77 per cigar | \$0.4026 per cigar | 201.30 |
| 10,000 | Small cigarettes | \$50.33 per thousand | 503.30 |
| 5,000 | Large cigarettes | \$105.69 per thousand | 528.45 |
| 199,975 | Cigarette papers | \$0.0315 per 50 papers | 126.00 |
| 1,000 | Cigarette tubes | \$0.0630 per 50 tubes | 1.26 |
| 100 lbs | Chewing tobacco | \$0.5033 per pound | 50.33 |
| 200 lbs | Snuff | \$1.51 per pound | 302.00 |
| 100 lbs | Pipe tobacco | \$2.8311 per pound | 283.11 |
| 300 lbs | Roll-your-own tobacco | \$24.78 per pound | 7,434.00 |
| Total claimed | 10,489.10 | | |
\[T.D. ATF-420, [64 FR 71945](https://www.federalregister.gov/citation/64-FR-71945), Dec. 22, 1999, as amended by T.D. TTB-75, [74 FR 14485](https://www.federalregister.gov/citation/74-FR-14485), Mar. 31, 2009]
#### § 46.76 Supporting evidence.
The claimant must support the claim with any available evidence (such as inventories, statements, invoices, bills, records, stamps, and labels), relating to the tobacco products or cigarette papers or tubes on hand at the time of the disaster and claimed to have been lost, rendered unmarketable, or condemned as a result thereof. If the claim is for refund of duty, the claimant must furnish, if practicable, the customs entry number, date of entry, and the name of the port of entry.
\[T.D. ATF-420, [64 FR 71946](https://www.federalregister.gov/citation/64-FR-71946), Dec. 22, 1999]
#### § 46.77 Time and place of filing.
Disaster loss claims must be filed within 6 months after the date on which the President makes the determination that the disaster has occurred. All forms, including claims for duty on imported products, must be filed with the appropriate TTB officer.
\[T.D. ATF-420, [64 FR 71946](https://www.federalregister.gov/citation/64-FR-71946), Dec. 22, 1999]
#### § 46.78 Action by appropriate TTB officer.
The appropriate TTB officer must act upon each claim for payment (without interest) of an amount equal to the tax paid or determined filed under this subpart and must notify the claimant. Claims and supporting data involving customs duties will be forwarded to the Commissioner of Customs with a summary statement of such officer's findings.
\[T.D. ATF-472, [67 FR 8881](https://www.federalregister.gov/citation/67-FR-8881), Feb. 27, 2002]
### Destruction of Tobacco Products, and Cigarette Papers and Tubes
#### § 46.79 Supervision.
Before payment is made under this subpart in respect of the tax, or tax and duty, on tobacco products, or cigarette papers or tubes rendered unmarketable or condemned by a duly authorized official, such tobacco products, or cigarette papers or tubes must be destroyed by suitable means under the supervision of an appropriate TTB officer who will be assigned for that purpose by another appropriate TTB officer. However, if the destruction of such tobacco products, or cigarette papers or tubes has already occurred, and if the appropriate TTB officer who acts on the claim is satisfied with the supervision of such destruction, TTB supervision will not be required.
\[T.D. ATF-472, [67 FR 8881](https://www.federalregister.gov/citation/67-FR-8881), Feb. 27, 2002]
### Penalties
#### § 46.80 Penalties.
Penalties are provided in [26 U.S.C. 7206](https://www.govinfo.gov/link/uscode/26/7206) and [7207](https://www.govinfo.gov/link/uscode/26/7207) for the execution under the penalties of perjury of any false or fraudulent statement in support of any claim and for the filing of any false or fraudulent document under this subpart. All provisions of law, including penalties, applicable in respect of internal revenue taxes on tobacco products, and cigarette papers and tubes shall, insofar as applicable and not inconsistent with this subpart, be applied in respect of the payments provided for in this subpart to the same extent as if such payments constituted refunds of such taxes.
\[T.D. 6871, [31 FR 60](https://www.federalregister.gov/citation/31-FR-60), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55857](https://www.federalregister.gov/citation/44-FR-55857), Sept. 28, 1979; T.D. ATF-232, [51 FR 28092](https://www.federalregister.gov/citation/51-FR-28092), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
### Admimistrative Provisions
#### § 46.81 \[Reserved]
## Subpart D—Rules for Special (Occupational) Tax
#### Source:
T.D. TTB-79, [74 FR 37420](https://www.federalregister.gov/citation/74-FR-37420), July 28, 2009, unless otherwise noted.
#### § 46.91 Scope of subpart.
This subpart contains rules relating to special (occupational) taxes that must be paid by manufacturers of tobacco products, manufacturers of cigarette papers and tubes, and export warehouse proprietors.
#### § 46.92 Meaning of terms.
As used in this subpart, the following terms shall have the meanings indicated unless either the context in which they are used requires a different meaning, or a different definition is prescribed for a particular section or portion of this subpart:
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.46, Delegation of the Administrator's Authorities in [27 CFR Part 46](/current/title-27/part-46), Miscellaneous Regulations Relating to Tobacco Products and Cigarette Papers and Tubes.
*CFR.* The Code of Federal Regulations.
*Cigarette paper.* Paper, or any other material except tobacco, prepared for use as a cigarette wrapper.
*Cigarette tube.* Cigarette paper made into a hollow cylinder for use in making cigarettes.
*Export warehouse.* A bonded internal revenue warehouse for the storage of tobacco products and cigarette papers and tubes, upon which the internal revenue tax has not been paid, for subsequent shipment to a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States, or for consumption beyond the jurisdiction of the internal revenue laws of the United States.
*Export warehouse proprietor.* Any person who operates an export warehouse.
*Manufacturer of cigarette papers and tubes.* Any person who manufactures cigarette paper, or makes up cigarette paper into tubes, except for their own personal use or consumption.
*Manufacturer of tobacco products.* Any person who manufactures tobacco products.
*Person.* An individual, a trust, estate, partnership, association or other unincorporated organization, fiduciary, company, or corporation, or the District of Columbia, a State, or a political subdivision thereof (including a city, county, or other municipality).
*Special tax.* The special (occupational) tax on manufacturers of tobacco products, manufacturers of cigarette papers and tubes, and export warehouse proprietors, imposed by [26 U.S.C. 5731](https://www.govinfo.gov/link/uscode/26/5731).
*Tax year.* The period from July 1 of one calendar year through June 30 of the following calendar year.
*This chapter.* [Chapter I of title 27 of the Code of Federal Regulations](/current/title-27/chapter-I).
*Tobacco products.* Cigars, cigarettes, smokeless tobacco, pipe tobacco, and roll-your-own tobacco.
*U.S.C.* The United States Code.
\[T.D. TTB-79, [74 FR 37420](https://www.federalregister.gov/citation/74-FR-37420), July 28, 2009, as amended by T.D. TTB-196, [89 FR 87950](https://www.federalregister.gov/citation/89-FR-87950), Nov. 6, 2024]
#### § 46.93 Multiple businesses of same ownership and location.
(a) Where more than one type of taxable business is conducted by the same person at the same place, special tax for each business must be paid at the rates prescribed for each.
(b) Where the same type of taxable business is conducted by the same person in different areas of the same premises, only one special tax payment is required.
([26 U.S.C. 5733](https://www.govinfo.gov/link/uscode/26/5733))
#### § 46.94 Relation to State and municipal law.
(a) *General.* The payment of special (occupational) tax does not exempt any person from any penalty or punishment provided by the laws of any State for carrying on any trade or business within that State, nor does it authorize the commencement or continuance of any trade or business contrary to State law or in places prohibited by county or municipal law. Payment of this tax does not prohibit any State from placing an additional duty or tax on the same trade or business, for State or other purposes.
(b) *Special tax stamps.* TTB officers are without authority to refuse to issue a special tax stamp to a person engaged in business in violation of State law. The stamp is not a Federal permit or license, but is merely a receipt for the tax. The stamp affords the holder no protection against prosecution for violation of State law.
([26 U.S.C. 5734](https://www.govinfo.gov/link/uscode/26/5734))
#### § 46.95 Liability of partners.
Any number of persons carrying on one business in partnership at any one place during any tax year are required to pay only one special tax.
([26 U.S.C. 5733](https://www.govinfo.gov/link/uscode/26/5733))
### Payment of Special Tax
#### § 46.101 Special tax returns.
(a) *Preparation of TTB Form 5630.5t.* Every manufacturer of tobacco products, manufacturer of cigarette papers and tubes, and export warehouse proprietor is required to pay special (occupational) tax and file a return on TTB Form 5630.5t, “Special Tax Registration and Return—Tobacco.” TTB Form 5630.5t must be completed in accordance with the instructions on the form, and all of the information called for on the form must be provided, including the following:
(1) Name of the taxpayer.
(2) Trade name(s) (if any) of the business(es) subject to special (occupational) tax.
(3) Employer identification number (see [§ 46.102](/current/title-27/section-46.102)).
(4) Exact location of the place of business, by name and number of building or street, or if these do not exist, by some specific description in addition to the post office address. In the case of one return for two or more locations, the address to be shown must be the taxpayer's principal place of business (or principal office, in the case of a corporate taxpayer).
(5) Class(es) of special tax to which the taxpayer is subject.
(6) Ownership and control information. This consists of the name, position, and residence address of every owner of the business and of every person having power to control its management and policies with respect to the activity subject to special tax. “Owner of the business” includes every partner, if the taxpayer is a partnership, and every person owning 10 percent or more of its stock, if the taxpayer is a corporation. However, the ownership and control information required by this paragraph need not be stated if the same information has been previously provided to TTB in connection with a permit application and that previously provided information is still current.
(b) *Multiple locations and/or classes of tax.* A taxpayer subject to special tax for the same period at more than one location or for more than one class of tax must—
(1) File one special tax return, TTB Form 5630.5t, with payment of tax, to cover all such locations and classes of tax; and
(2) Prepare, in duplicate, a list identified with the taxpayer's name, address (as shown on TTB Form 5630.5t), employer identification number, and period covered by the return. The list must show, by State, the name, address, and tax class of each location for which special tax is being paid. The original of the list must be filed with TTB as an attachment to TTB Form 5630.5t, and the copy must be retained at the taxpayer's principal place of business (or principal office, in the case of a corporate taxpayer) for a period of three years from the date of the return.
(c) *Signing of TTB Form 5630.5t* —
(1) *By principal.* The return of an individual proprietor must be signed by the individual. The return of a partnership must be signed by a general partner. The return of a corporation must be signed by an officer. In each case, the person signing the return must designate his or her capacity as “individual owner,” “member of firm,” or, in the case of a corporation, the officer's title.
(2) *By fiduciary.* A receiver, trustee, assignee, executor, administrator, or other legal representative who continues the business of a bankrupt, insolvent, deceased, or otherwise incapacitated person must indicate the capacity in which the fiduciary acts.
(3) *By agent or attorney in fact.* If a return is signed by an agent or attorney in fact, the signature must be preceded by the name of the principal and followed by the title of the agent or attorney in fact. A return signed by a person as agent will not be accepted unless there is filed, with the TTB office with which the return is required to be filed, a power of attorney authorizing the agent to perform the act.
(d) *Perjury statement.* Each TTB Form 5630.5t must contain, or be verified by, a written declaration that the return has been executed under the penalties of perjury.
([26 U.S.C. 5732](https://www.govinfo.gov/link/uscode/26/5732), [6061](https://www.govinfo.gov/link/uscode/26/6061), [6065](https://www.govinfo.gov/link/uscode/26/6065), [6151](https://www.govinfo.gov/link/uscode/26/6151), [7011](https://www.govinfo.gov/link/uscode/26/7011))
(Approved by the Office of Management and Budget under control number 1513-0112)
#### § 46.102 Employer identification number.
(a) *Requirement.* The employer identification number (as defined in [26 CFR 301.7701-12](/current/title-26/section-301.7701-12)) of the taxpayer who has been assigned such a number must be shown on each special tax return, including each amended return, filed under this subpart. Failure of the taxpayer to include the employer identification number may result in the imposition of the penalty specified in [§ 70.113 of this chapter](/current/title-27/section-70.113).
(b) *Application for employer identification number.* Each taxpayer who files a special tax return and who has not already been assigned an employer identification number must file Internal Revenue Service (IRS) Form SS-4 to apply for one. The taxpayer must apply for and be assigned only one employer identification number, regardless of the number of places of business for which the taxpayer is required to file a special tax return. The taxpayer must apply for the employer identification number no later than 7 days after the filing of the taxpayer's first special (occupational) tax return. IRS Form SS-4 may be obtained from the director of an IRS service center, from any IRS district director, or from *[https://www.irs.gov](https://www.irs.gov).*
([26 U.S.C. 6109](https://www.govinfo.gov/link/uscode/26/6109))
\[T.D. TTB-79, [74 FR 37420](https://www.federalregister.gov/citation/74-FR-37420), July 28, 2009, as amended by T.D. TTB-196, [89 FR 87950](https://www.federalregister.gov/citation/89-FR-87950), Nov. 6, 2024]
#### § 46.103 Time for filing return and paying tax.
The return, along with remittance of special tax, must be filed on or before the date of commencing business as a manufacturer of tobacco products, manufacturer of cigarette papers or tubes, or export warehouse proprietor, and thereafter every year on or before July 1. If the return and applicable tax are received in the mail and the U.S. postmark on the cover shows that it was deposited in the mail in the United States within the time prescribed for filing in an envelope or other appropriate wrapper which was properly addressed with postage prepaid, the return will be considered as timely filed. If the postmark is not legible, the sender has the burden of proving the date when the postmark was made. When registered mail is used, the date of registration will be accepted as the postmark date. When certified mail is used, the date of the postmark on the sender's receipt of certified mail is treated as the postmark date.
([26 U.S.C. 5732](https://www.govinfo.gov/link/uscode/26/5732), [6011](https://www.govinfo.gov/link/uscode/26/6011), [6071](https://www.govinfo.gov/link/uscode/26/6071))
#### § 46.104 Method of payment.
Payment of special tax must be made in cash, or by check or money order payable to Alcohol and Tobacco Tax and Trade Bureau. If a check or money order so tendered is not honored when presented for payment, the person who tendered the check or money order will remain liable for the payment of the special tax, and for all penalties and additions, to the same extent as if the check or money order had not been tendered. In addition, unless the person who tendered the check or money order can show that the check or money order was issued in good faith, and with reasonable cause to believe that it would be duly paid, there must be paid as penalty an amount equal to 1 percent of the amount of the check or money order, except that if the amount of the check or money order is less than $500, the penalty will be $5, or the amount of the check or money order, whichever is less.
([26 U.S.C. 6311](https://www.govinfo.gov/link/uscode/26/6311), [6657](https://www.govinfo.gov/link/uscode/26/6657))
#### § 46.105 Receipt for taxes.
Subject to [§ 46.106](/current/title-27/section-46.106), the appropriate TTB officer will issue a receipt to a taxpayer if cash is received as a remittance in payment of special tax (including penalties and interest, if any), or for any type of remittance received if the taxpayer requests a receipt.
#### § 46.106 Receipt in lieu of stamp prohibited.
No receipt will be issued in lieu of issuance of a special tax stamp under [§ 46.116](/current/title-27/section-46.116). A receipt may be given only pending the issuance of a stamp, or where the tax liability relates to a prior tax year.
([26 U.S.C. 6314](https://www.govinfo.gov/link/uscode/26/6314))
#### § 46.107 Penalty for failure to file return or to pay tax.
(a) *Failure to file return.* Any person required by this subpart to file a return on TTB Form 5630.5t who fails to file the return on or before the date for filing prescribed in [§ 46.103](/current/title-27/section-46.103) must pay, in addition to the tax, a delinquency penalty, unless it is shown that such failure is due to reasonable cause and not due to willful neglect (see [§ 46.109](/current/title-27/section-46.109)). The delinquency penalty for failure to file the return on or before the last date prescribed will be 5 percent of the amount required to be shown as tax on the return if the failure to file is for not more than one month; with an additional 5 percent for each additional month or fraction thereof during which the delinquency continues, but not more than 25 percent in the aggregate.
(b) *Failure to pay tax.* Any person who files a return on TTB Form 5630.5t under this subpart and who fails to pay the amount shown as tax on the return on or before the date prescribed in [§ 46.103](/current/title-27/section-46.103) for payment of such tax, must pay a penalty, in addition to the tax, unless it is shown that such failure is due to reasonable cause and not due to willful neglect (see [§ 46.109](/current/title-27/section-46.109)). The penalty for failure to pay the tax on or before the date prescribed for payment is 0.5 percent of the amount shown as tax on the return if the failure to pay is not for more than one month; with an additional 0.5 percent for each additional month or fraction thereof during which the failure continues, but not more than 25 percent in the aggregate. Any person required to pay the special tax who willfully fails to pay the tax shall be fined not more than \$5,000, or imprisoned not more than 2 years, or both, for each such offense.
(c) *Limitations.* With respect to any return on Form 5630.5t, the amount of the addition under [paragraph (a)](/current/title-27/section-46.107#p-46.107\(a\)) of this section will be reduced by the amount of the addition under [paragraph (b)](/current/title-27/section-46.107#p-46.107\(b\)) of this section for any month to which an addition to tax applies under both paragraph (a) and [paragraph (b)](/current/title-27/section-46.107#p-46.107\(b\)) of this section. If the amount of tax required to be shown as tax on the return is less than the amount shown as tax on such return, the penalties prescribed in [paragraphs (a)](/current/title-27/section-46.107#p-46.107\(a\)) and [(b)](/current/title-27/section-46.107#p-46.107\(b\)) of this section will be applied by substituting that lower amount.
([26 U.S.C. 5731](https://www.govinfo.gov/link/uscode/26/5731), [6651](https://www.govinfo.gov/link/uscode/26/6651))
#### § 46.108 Interest on unpaid tax.
(a) *General.* Interest is due on unpaid special tax from the date the tax was required to be paid to the date paid. Interest will be charged for each day at the rate prescribed by law in effect on that day. Interest accruing after December 31, 1982, is compounded daily.
(b) *Adjusted interest rates.* Adjusted interest rates, determined in accordance with the procedure prescribed by [26 U.S.C. 6621(b)](https://www.govinfo.gov/link/uscode/26/6621), are announced quarterly by the Commissioner of Internal Revenue. The appropriate TTB officer will provide information, when requested, regarding interest rates applicable to specific time periods.
([26 U.S.C. 6601](https://www.govinfo.gov/link/uscode/26/6601), [6621](https://www.govinfo.gov/link/uscode/26/6621))
#### § 46.109 Waiver of penalties.
In every case where a special tax return is not filed, or the tax is not paid, at the time prescribed in [§ 46.103](/current/title-27/section-46.103), the delinquency penalties specified in [§ 46.107](/current/title-27/section-46.107) for failure to file a return or for failure to pay the amount shown as tax on the return will be asserted and collected unless a reasonable cause for delay in filing the return or payment of the tax is clearly established. A taxpayer who believes the circumstances that delayed such taxpayer's filing of the return or payment of the tax are reasonable, and who desires to have the penalties waived, must submit with the return a written statement under the penalty of perjury, affirmatively showing all of the circumstances alleged as reasonable causes for delay. If the appropriate TTB officer determines that the delinquency was due to a reasonable cause and not to willful neglect or gross negligence, the addition to the tax will be waived. If the taxpayer exercised ordinary business care and prudence and was nevertheless unable to file the return within the prescribed time, or if the taxpayer made a satisfactory showing that the taxpayer exercised ordinary business care and prudence in providing for payment of the tax liability and was nevertheless either unable to pay the tax or would have suffered an undue hardship if the taxpayer had paid on the due date, then the delay is due to reasonable cause. Mere ignorance of the law will not be considered a reasonable cause.
([26 U.S.C. 6651](https://www.govinfo.gov/link/uscode/26/6651))
### Special Tax Stamps
#### § 46.116 Issuance, distribution, and examination of special tax stamps.
(a) *Issuance of special tax stamps.* Upon filing a properly executed return on TTB Form 5630.5t together with the full tax remittance, the taxpayer will be issued an appropriately designated special tax stamp. If the return covers multiple locations, TTB will send to the taxpayer's principal place of business (or principal office in the case of a corporate taxpayer) one appropriately designated stamp for each location listed on the attachment to TTB Form 5630.5t required by [§ 46.101(b)(2)](/current/title-27/section-46.101#p-46.101\(b\)\(2\)).
(b) *Distribution of special tax stamps for multiple locations.* On receipt of the special tax stamps, the taxpayer must verify that there is one stamp for each location listed on the attachment to TTB Form 5630.5t and that the information on each stamp is correct. The taxpayer must then forward each stamp to the place of business designated on the stamp. Incorrect stamps must be returned to the appropriate TTB officer as provided in [§ 46.120](/current/title-27/section-46.120).
(c) *Examination of special tax stamps.* Each stamp denoting payment of special tax must be kept available for inspection by an appropriate TTB officer during business hours at the location for which the stamp is designated.
([26 U.S.C. 5732](https://www.govinfo.gov/link/uscode/26/5732))
#### § 46.117 Lost or destroyed stamps.
If a special tax stamp has been lost or destroyed, the taxpayer must immediately notify the TTB officer who issued the stamp. A “Certificate in Lieu of Lost or Destroyed Special Tax Stamp” will be issued to the taxpayer who submits an affidavit explaining to the satisfaction of the appropriate TTB officer that the stamp was lost or destroyed. The certificate must be kept available for inspection in the same manner as prescribed for a special tax stamp in [§ 46.116(c)](/current/title-27/section-46.116#p-46.116\(c\)).
#### § 46.118 Certificate in lieu of lost or destroyed special tax stamp.
The provisions of this subpart relating to special tax stamps apply as well to certificates in lieu of lost or destroyed special tax stamps issued to taxpayers under [§ 46.117](/current/title-27/section-46.117).
#### § 46.119 Errors disclosed by taxpayers.
On receipt of a special tax stamp, the taxpayer must examine it to ensure that the name and address are correctly stated; if not, the taxpayer must return the stamp to the TTB officer who issued it, with a statement showing the nature of the error and the correct name or address. The appropriate TTB officer, on receipt of such stamp and statement, will compare the data on the stamp with that of the Form 5630.5t in TTB files, correct the error if made in the TTB office, and return the stamp to the taxpayer. However, if the error was in the taxpayer's preparation of the Form 5630.5t, the appropriate TTB officer will require the taxpayer to file a new Form 5630.5t, designated “Amended Return,” setting forth the taxpayer's correct name and address, and a statement explaining the error on the original Form 5630.5t. On receipt of the amended Form 5630.5t and a satisfactory explanation of the error, the appropriate TTB officer will make the proper correction on the stamp and return it to the taxpayer.
#### § 46.120 Errors discovered on inspection.
When a TTB officer discovers on a special tax stamp a material error in the name, ownership, or address of the taxpayer, that officer will require the taxpayer to surrender the erroneous tax stamp and prepare a new Form 5630.5t, designated “Amended Return,” showing correctly all of the information required in [§ 46.101](/current/title-27/section-46.101) and containing, in the body of the form or in an attachment thereto, a statement of the reason for requesting correction of the stamp. On receipt of the amended return and an acceptable explanation for the error, the officer will make the proper correction on the stamp and return it to the taxpayer. However, if the error found by the TTB officer is on a special tax stamp issued as a result of a return on Form 5630.5t filed under [§ 46.101(b)](/current/title-27/section-46.101#p-46.101\(b\)), that officer will instruct the taxpayer to return the stamp, with a statement showing the nature of the error and the correct data, to the TTB officer who issued the stamp, for correction in accordance with [§ 46.119](/current/title-27/section-46.119).
### Changes in Businesses Holding Special (Occupational) Tax Stamps
#### § 46.126 Change in name or address.
(a) *Change in name.* If there is a change in the corporate or firm name, or in the trade name, as shown on TTB Form 5630.5t, the taxpayer must file an amended special tax return as soon as practicable after the change, covering the new corporate or firm name, or trade name. No new special tax is required to be paid. The taxpayer must attach the special tax stamp for endorsement of the change in name.
(b) *Change in location* —
(1) *General.* If there is a change in location of a taxable place of business, the taxpayer must, within 30 days after the change, file with TTB an amended special tax return covering the new location. The taxpayer must attach the special tax stamp or stamps for endorsement of the change in location. No new special tax is required to be paid. However, if the taxpayer does not file the amended return within 30 days, the taxpayer is required to pay a new special tax and obtain a new special tax stamp.
(2) *Procedure.* If the taxpayer's original return on TTB Form 5630.5t covered only one location, the taxpayer may deliver the amended return and the stamp at any TTB office, or to any TTB officer inspecting the business, in lieu of mailing them to TTB. If the taxpayer's original return covered multiple locations under the provisions of [§ 46.101(b)](/current/title-27/section-46.101#p-46.101\(b\)), he or she must forward with the amended return an attachment showing both the old and new address of any place of business which has been relocated, and the special tax stamp covering the location from which the business was removed. The appropriate TTB officer receiving such return or stamp will, if the return is submitted within the 30-day period, enter the proper endorsement on the stamp and return it to the taxpayer.
([26 U.S.C. 5733](https://www.govinfo.gov/link/uscode/26/5733), [7011](https://www.govinfo.gov/link/uscode/26/7011))
#### § 46.127 Change in ownership.
(a) *General.* A special tax stamp is a receipt for tax, personal to the one to whom issued, and is not transferable from one manufacturer of tobacco products, manufacturer of cigarette papers and tubes, or export warehouse proprietor to another. If there is a change in the ownership of a special-tax payer, the successor must pay a new special (occupational) tax and obtain the required special tax stamp(s). Examples of changes in ownership that require payment of a new special tax include, but are not limited to, the following:
(1) Sale of business;
(2) Formation of a partnership by two persons who have paid special tax;
(3) Addition of a partner;
(4) Incorporation of the business;
(5) Creation of a new corporation to replace one or more corporations that have paid special tax; and
(6) Stockholder continuing the business of a corporation after its dissolution.
(b) *Changes that do not require payment of a new special tax.* The following changes do not require payment of a special tax:
(1) Increase in capital stock of a corporation.
(2) Change in ownership of any or all of the capital stock of a corporation.
(c) *Exemption for certain successors.* Persons identified in [paragraph (d)](/current/title-27/section-46.127#p-46.127\(d\)) of this section as having the right of succession may carry on the business for the remainder of the tax year for which the special tax was paid, without paying a new special tax, if within 30 days after the date on which the successor begins to carry on the business, the successor files with TTB a special tax return on TTB Form 5630.5t showing the basis of succession. A person who is a successor to a business for which special tax has been paid, and who fails to register the succession, is liable for special tax computed from the first day of the calendar month in which the successor began to carry on the business.
(d) *Persons having right of succession.* The right of succession referred to in [paragraph (c)](/current/title-27/section-46.127#p-46.127\(c\)) of this section will pass to the identified persons in the following circumstances:
(1) *Death.* The surviving spouse or child, or the executor, administrator, or other legal representative, of a deceased taxpayer;
(2) *Succession of spouse.* A husband or wife succeeding to the business of his or her living spouse;
(3) *Insolvency.* A receiver or trustee in bankruptcy, or an assignee for the benefit of creditors;
(4) *Withdrawal from firm.* The partner or partners remaining after the death or withdrawal of a member of a partnership.
([26 U.S.C. 5733](https://www.govinfo.gov/link/uscode/26/5733))
### Stamps for Incorrect Period or Incorrect Liability
#### § 46.131 General.
If a taxpayer through error has filed a return and paid special tax for an incorrect period of liability or for an incorrect class of business, the taxpayer must prepare a corrected TTB Form 5630.5t, designated “Amended Return,” for each tax year involved and must submit the amended return, or returns, with remittance for the total applicable tax and additions to the tax (delinquency penalties and interest), to TTB in accordance with the instructions on the Form 5630.5t or, if the error is discovered by a TTB officer inspecting the premises, to that officer. Subject to the limitations imposed by [26 U.S.C. 6511](https://www.govinfo.gov/link/uscode/26/6511), the incorrectly paid tax (including additions thereto) may be allowed as a credit against the correct tax (including any additions thereto), as provided in [§ 46.132](/current/title-27/section-46.132), on surrender of the incorrect stamp or stamps, with the amended return or returns noted to show that credit is requested. Any incorrectly paid tax (including additions thereto) that is not credited as provided in [§ 46.132](/current/title-27/section-46.132), including any creditable tax and additions thereto in excess of the correct tax (including additions thereto), may be refunded pursuant to [§§ 46.136](/current/title-27/section-46.136) through [46.138](/current/title-27/section-46.138) if the taxpayer files a corrected return on Form 5630.5t with remittance of the correct amount of tax (including any additions thereto). A new stamp will be issued only for a current period of liability.
([26 U.S.C. 6011](https://www.govinfo.gov/link/uscode/26/6011))
#### § 46.132 Credit for incorrect stamp.
(a) *General.* The appropriate TTB officer may credit the tax (including additions thereto) paid for an incorrect stamp if the taxpayer has filed an amended return showing the correct tax on TTB Form 5630.5t and has, with the amended return, surrendered the incorrect stamp for credit.
(b) *Underpayment.* Where the correct tax (including any additions thereto) exceeds the incorrect tax paid, the appropriate TTB officer may credit the tax paid against the correct tax upon remittance of the difference between the tax paid and the correct tax plus any additions thereto.
(c) *Overpayment.* Where the tax (and additions thereto) paid for the surrendered incorrect stamp exceeds the amount due, the appropriate TTB officer will advise the taxpayer to file a claim for refund of that excess on TTB Form 5620.8. Sections 46.136 through 46.138 apply to all claims for refund.
([26 U.S.C. 6402](https://www.govinfo.gov/link/uscode/26/6402), [6511](https://www.govinfo.gov/link/uscode/26/6511))
### Abatement or Refund of Special Taxes
#### § 46.136 Claims.
Claims for abatement of assessment of special tax (including penalties and interest), or for refund of an overpayment of special tax (including interest and penalties), must be filed on TTB Form 5620.8. The claim must be filed with the appropriate TTB officer. Each claim must set forth in detail each ground on which it is based and must contain facts sufficient to explain to the appropriate TTB officer the exact basis for the claim. If the claim is for refund of special tax for which a stamp was issued, either the stamp must be attached to and be made a part of the claim, or the claimant must include in the claim a satisfactory explanation of the reason why the stamp cannot be submitted.
#### § 46.137 Time limit on filing of claim for refund.
No claim for the refund of a special tax or penalty will be allowed unless presented within 3 years after the filing of the related tax return or within 2 years after the payment of such tax or penalty, whichever of these periods expires later.
([26 U.S.C. 6511](https://www.govinfo.gov/link/uscode/26/6511))
#### § 46.138 Discontinuance of business.
A dealer who for any reason discontinues business is not entitled to a refund of special tax for the unexpired portion of the tax year for which the special tax stamp was issued.
([26 U.S.C. 5732](https://www.govinfo.gov/link/uscode/26/5732))
## Subparts E-F \[Reserved]
## Subpart G—Dealers in Tobacco Products
#### Source:
T.D. 6573, [26 FR 8202](https://www.federalregister.gov/citation/26-FR-8202), Aug. 31, 1961, unless otherwise noted. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975.
#### § 46.161 Scope of subpart.
The regulations in this subpart relate to the purchase, receipt, possession, offering for sale, or sale or other disposition of tobacco products by dealers in such products.
\[T.D. 6871, [81 FR 60](https://www.federalregister.gov/citation/81-FR-60), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975 and amended by T.D. ATF-232, [51 FR 28092](https://www.federalregister.gov/citation/51-FR-28092), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986]
#### § 46.162 Territorial extent.
The provisions of the regulations in this subpart shall apply in the several States of the United States and the District of Columbia.
#### § 46.163 Meaning of terms.
When used in this subpart, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof, each of the following terms shall have the meaning ascribed in this section. Words in the plural form shall include the singular, words in the singular form shall include the plural, and words importing the masculine gender shall include the feminine. The terms “includes” and “including” do not exclude things not enumerated which are in the same general class.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.46, Delegation of the Administrator's Authorities in [27 CFR Part 46](/current/title-27/part-46), Miscellaneous Regulations Relating to Tobacco Products and Cigarette Papers and Tubes.
*Dealer.* Any person who sells, or offers for sale, at wholesale or retail levels, any cigars or cigarettes after removal.
*Manufacturer of tobacco products.* Any person who manufactures cigars, cigarettes, smokeless tobacco, pipe tobacco, or roll-your-own tobacco but does not include:
(1) A person who produces tobacco products solely for that person's own consumption or use; or
(2) A proprietor of a Customs bonded manufacturing warehouse with respect to the operation of such warehouse.
*Package.* The container in which tobacco products are put up by the manufacturer or the importer and offered for delivery to the consumer.
*Person.* An individual, partnership, association, company, corporation, estate, or trust.
*Removal or remove.* The removal of tobacco products from the factory or release from Customs custody, including the smuggling or other unlawful importation of such articles into the United States.
*Tobacco Products.* Cigars, cigarettes, smokeless tobacco, pipe tobacco, and roll-your-own tobacco.
*U.S.C.* The United States Code.
\[T.D. 6573, [26 FR 8202](https://www.federalregister.gov/citation/26-FR-8202), Aug. 31, 1961, as amended by T.D. 6871, [31 FR 60](https://www.federalregister.gov/citation/31-FR-60), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### Editorial Note:
For Federal Register citations affecting [§ 46.163](/current/title-27/section-46.163), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
#### § 46.164 Authority of TTB officers to enter premises.
Any appropriate TTB officer may enter in the daytime any premises where tobacco products are kept or stored, so far as it may be necessary for the purpose of examining such products. When such premises are open at night, any appropriate TTB officer may enter them, while so open, in the performance of his official duties. The owner of such premises, or person having the superintendence of the same, who refuses to admit any appropriate TTB officer or permit him to examine such products shall be liable to the penalties prescribed by law for the offense. Operators of vending machines shall make the tobacco products in their machines available for inspection upon the request of any appropriate TTB officer.
(68A Stat. 872, 903; [26 U.S.C. 7342](https://www.govinfo.gov/link/uscode/26/7342), [7606](https://www.govinfo.gov/link/uscode/26/7606))
\[T.D. 6871, [31 FR 60](https://www.federalregister.gov/citation/31-FR-60), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975 and amended by T.D. ATF-232, [51 FR 28092](https://www.federalregister.gov/citation/51-FR-28092), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-472, [67 FR 8881](https://www.federalregister.gov/citation/67-FR-8881), Feb. 27, 2002]
#### § 46.165 Interference with administration.
Whoever, corruptly or by force or threats of force, endeavors to hinder or obstruct the administration of this subpart, or endeavors to intimidate or impede any appropriate TTB officer acting in his official capacity, or forcibly rescues or attempts to rescue or causes to be rescued any property, after it has been duly seized for forfeiture to the United States in connection with a violation of the internal revenue laws, shall be liable to the penalties prescribed by law.
(68A Stat. 855; [26 U.S.C. 7212](https://www.govinfo.gov/link/uscode/26/7212))
\[T.D. 6573, [26 FR 8202](https://www.federalregister.gov/citation/26-FR-8202), Aug. 31, 1961. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-472, Feb. 27, 2002]
#### § 46.166 Dealing in tobacco products.
(a) All tobacco products purchased, received, possessed, offered for sale, sold or otherwise disposed of, by any dealer must be in proper packages which bear the mark or notice as prescribed in [parts 40](/current/title-27/part-40) and [41 of this chapter](/current/title-27/part-41). Tobacco products may be sold, or offered for sale, at retail from such packages, provided the products remain in the packages until removed by the customer or in the presence of the customer. Where a vending machine is used, tobacco products must similarly be vended in proper packages or directly from such packages.
(b) Tobacco products manufactured in the United States and labeled for exportation under [chapter 52 of title 26, U.S.C.](https://www.govinfo.gov/link/uscode/26/5201) may not be sold or held for sale for domestic consumption in the United States unless such articles are removed from their export packaging and repackaged by the original manufacturer into new packaging that does not contain an export label. This applies to articles labeled for export even if the packaging or the appearance of such packaging to the consumer of such articles has been modified or altered by a person other than the original manufacturer so as to remove or conceal or attempt to remove or conceal (including by placement of a sticker over) the export label.
(c) For penalty and forfeiture provisions applicable to the selling, relanding or receipt of articles which have been labeled or shipped for exportation, see [§ 41.83 of this chapter](/current/title-27/section-41.83).
\[T.D. ATF-465, [66 FR 45618](https://www.federalregister.gov/citation/66-FR-45618), Aug. 29, 2001, as amended by T.D. TTB-16, [69 FR 52423](https://www.federalregister.gov/citation/69-FR-52423), Aug. 26, 2004]
#### § 46.167 Liability to tax.
Any dealer who, with intent to defraud the United States, possesses tobacco products (a) upon which the tax has not been paid or determined in the manner and at the time prescribed in [parts 40](/current/title-27/part-40) and [41 of this chapter](/current/title-27/part-41) or (b) which, after removal without payment of tax pursuant to section 5704, I.R.C., and regulations issued thereunder, have been diverted from the applicable purpose or use specified in that section or (c) which are not put up in packages prescribed in [parts 40](/current/title-27/part-40) and [41 of this chapter](/current/title-27/part-41) or are put up in packages not bearing the marks and notices prescribed in such regulations shall be liable for a tax equal to the tax on such products.
(72 Stat. 1424; [26 U.S.C. 5751](https://www.govinfo.gov/link/uscode/26/5751))
\[T.D. 6871, [31 FR 60](https://www.federalregister.gov/citation/31-FR-60), Jan. 4, 1966. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-232, [51 FR 28092](https://www.federalregister.gov/citation/51-FR-28092), Aug. 5, 1986; T.D. ATF-243, [51 FR 43194](https://www.federalregister.gov/citation/51-FR-43194), Dec. 1, 1986; T.D. ATF-460, [66 FR 390 93](https://www.federalregister.gov/citation/66-FR-390%2093), July 27, 2001; T.D. TTB-16, [69 FR 52423](https://www.federalregister.gov/citation/69-FR-52423), Aug. 26, 2004]
#### § 46.168 Liability to penalties and forfeitures.
Any dealer who fails to comply with the provisions of this subpart becomes liable to the civil and criminal penalties, and forfeitures, provided by law.
(72 Stat. 1425, 1426; [26 U.S.C. 5761](https://www.govinfo.gov/link/uscode/26/5761), [5762](https://www.govinfo.gov/link/uscode/26/5762), and [5763](https://www.govinfo.gov/link/uscode/26/5763))
# Part 5 — LABELING AND ADVERTISING OF DISTILLED SPIRITS
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-5
Full text of 27 CFR Part 5 — LABELING AND ADVERTISING OF DISTILLED SPIRITS. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 5—LABELING AND ADVERTISING OF DISTILLED SPIRITS
#### Authority:
[26 U.S.C. 5301](https://www.govinfo.gov/link/uscode/26/5301), [7805](https://www.govinfo.gov/link/uscode/26/7805), [27 U.S.C. 205](https://www.govinfo.gov/link/uscode/27/205) and [207](https://www.govinfo.gov/link/uscode/27/207).
#### Source:
T.D. TTB-176, 87 7579, Feb. 9, 2022, unless otherwise noted.
#### § 5.0 Scope.
This part sets forth requirements that apply to the labeling and packaging of distilled spirits in containers, including requirements for label approval and rules regarding mandatory, regulated, and prohibited labeling statements. This part also sets forth requirements that apply to the advertising of distilled spirits.
## Subpart A—General Provisions
#### § 5.1 Definitions.
When used in this part and on forms prescribed under this part, the following terms have the meaning assigned to them in this section, unless the terms appear in a context that requires a different meaning. Any other term defined in the Federal Alcohol Administration Act (FAA Act) and used in this part has the same meaning assigned to it by the FAA Act.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury.
*Advertisement or Advertising.* See [§ 5.232](/current/title-27/section-5.232) for meaning of these terms as used in [subpart N of this part](/current/title-27/part-5/subpart-N).
*Age.* The length of time during which, after distillation and before bottling, the distilled spirits have been stored in oak barrels. “Age” for bourbon whisky, rye whisky, wheat whisky, malt whisky, or rye malt whisky, and straight whiskies other than straight corn whisky and straight American single malt whisky, means the period the whisky has been stored in charred new oak barrels.
*American proof.* See *Proof.*
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any function relating to the administration or enforcement of this part by the current version of TTB Order 1135.5, Delegation of the Administrator's Authorities in [27 CFR part 5](/current/title-27/part-5), Labeling and Advertising of Distilled Spirits.
*Bottler.* Any distiller or processor of distilled spirits who places distilled spirits in containers.
*Brand name.* The name under which a distilled spirit or a line of distilled spirits is sold.
*Certificate holder.* The permittee or brewer whose name, address, and basic permit number, plant registry number, or brewer's notice number appears on an approved TTB Form 5100.31.
*Certificate of exemption from label approval.* A certificate issued on TTB Form 5100.31, which authorizes the bottling of wine or distilled spirits, under the condition that the product will under no circumstances be sold, offered for sale, shipped, delivered for shipment, or otherwise introduced by the applicant, directly or indirectly, into interstate or foreign commerce.
*Certificate of label approval (COLA).* A certificate issued on TTB Form 5100.31 that authorizes the bottling of wine, distilled spirits, or malt beverages, or the removal of bottled wine, distilled spirits, or malt beverages from customs custody for introduction into commerce, as long as the product bears labels identical to the labels appearing on the face of the certificate, or labels with changes authorized by TTB on the certificate or otherwise (such as through the issuance of public guidance available on the TTB website at *[https://www.ttb.gov](https://www.ttb.gov)).*
*Container.* Any can, bottle, box, cask, keg, or other closed receptacle, in any size or material, which is for use in the sale of distilled spirits at retail. See [subpart K of this part](/current/title-27/part-5/subpart-K) for rules regarding authorized standards of fill for containers.
*Customs officer.* An officer of U.S. Customs and Border Protection (CBP) or any agent or other person authorized by law to perform the duties of such an officer.
*Distilled spirits.* Ethyl alcohol, hydrated oxide of ethyl, spirits of wine, whisky, rum, brandy, gin, and other distilled spirits, including all dilutions and mixtures thereof, for nonindustrial use. The term “distilled spirits” does not include mixtures containing wine, bottled at 48 degrees of proof (24 percent alcohol by volume) or less, if the mixture contains more than 50 percent wine on a proof gallon basis. The term “distilled spirits” also does not include products containing less than one degree of proof (0.5 percent alcohol by volume).
*Distilling season.* The period from January 1 through June 30, which is the spring distilling season, or the period from July 1 through December 31, which is the fall distilling season.
*Distinctive or fanciful name.* A descriptive name or phrase chosen to identify a distilled spirits product on the label. It does not include a brand name, class or type designation, or statement of composition.
*FAA Act.* The Federal Alcohol Administration Act.
*Gallon.* A U.S. gallon of 231 cubic inches at 60 degrees Fahrenheit.
*Grain.* Includes cereal grains and the seeds of the pseudocereals amaranth, buckwheat, and quinoa.
*In bulk.* In barrels or other receptacles having a capacity in excess of 1 wine gallon (3.785 liters).
*Interstate or foreign commerce.* Commerce between any State and any place outside of that State or commerce within the District of Columbia or commerce between points within the same State but through any place outside of that State.
*Liter or litre.* A metric unit of capacity equal to 1,000 cubic centimeters or 1,000 milliliters (mL) of distilled spirits at 15.56 degrees Celsius (60 degrees Fahrenheit), and equivalent to 33.814 U.S. fluid ounces.
*Net contents.* The amount, by volume, of distilled spirits held in a container.
*Permittee.* Any person holding a basic permit under the FAA Act.
*Person.* Any individual, corporation, partnership, association, joint-stock company, business trust, limited liability company, or other form of business enterprise, including a receiver, trustee, or liquidating agent and including an officer or employee of any agency of a State or political subdivision of a State.
*Produced at or distilled at.* When used with reference to specific degrees of proof of a distilled spirits product, the phrases “produced at” and “distilled at” mean the composite proof of the distilled spirits after completion of distillation and before reduction in proof, if any.
*Proof.* The ethyl alcohol content of a liquid at 60 degrees Fahrenheit, stated as twice the percentage of ethyl alcohol by volume.
*Proof gallon.* A gallon of liquid at 60 degrees Fahrenheit that contains 50 percent by volume of ethyl alcohol having a specific gravity of 0.7939 at 60 degrees Fahrenheit, referred to water at 60 degrees Fahrenheit as unity, or the alcoholic equivalent thereof.
*Responsible advertiser.* The permittee responsible for the publication or broadcast of an advertisement.
*Spirits.* See Distilled spirits.
*State.* One of the 50 States of the United States, the District of Columbia, or the Commonwealth of Puerto Rico.
*TTB.* The Alcohol and Tobacco Tax and Trade Bureau of the Department of the Treasury.
*United States (U.S.).* The 50 States, the District of Columbia, and the Commonwealth of Puerto Rico.
\[T.D. TTB-176, 87 7579, Feb. 9, 2022, as amended by T.D. TTB-199, [89 FR 102734](https://www.federalregister.gov/citation/89-FR-102734), Dec. 18, 2024]
#### § 5.2 Territorial extent.
The provisions of this part apply to the 50 States, the District of Columbia, and the Commonwealth of Puerto Rico.
#### § 5.3 General requirements and prohibitions under the FAA Act.
(a) *Certificates of label approval (COLAs).* Subject to the requirements and exceptions set forth in the regulations in [subpart B of this part](/current/title-27/part-5/subpart-B), any bottler of distilled spirits, and any person who removes distilled spirits in containers from customs custody for sale or any other commercial purpose, is required to first obtain from TTB a COLA covering the label(s) on each container.
(b) *Alteration, mutilation, destruction, obliteration, or removal of labels.* Subject to the requirements and exceptions set forth in the regulations in [subpart C of this part](/current/title-27/part-5/subpart-C), it is unlawful to alter, mutilate, destroy, obliterate, or remove labels on distilled spirits containers. This prohibition applies to any person, including retailers, holding distilled spirits for sale in interstate or foreign commerce or any person holding distilled spirits for sale after shipment in interstate or foreign commerce.
(c) *Labeling requirements for distilled spirits.* It is unlawful for any person engaged in business as a distiller, rectifier (processor), importer, wholesaler, bottler, or warehouseman and bottler, directly or indirectly, or through an affiliate, to sell or ship, or deliver for sale or shipment, or otherwise introduce or receive in interstate or foreign commerce, or remove from customs custody, any distilled spirits in containers unless such containers are marked, branded, labeled, and packaged in conformity with the regulations in this part.
(d) *Labeled in accordance with this part.* In order to be labeled in accordance with the regulations in this part, a container of distilled spirits must be in compliance with the following requirements:
(1) It must bear one or more label(s) meeting the standards for “labels” set forth in [subpart D of this part](/current/title-27/part-5/subpart-D);
(2) One or more of the labels on the container must include the mandatory information set forth in [subpart E of this part](/current/title-27/part-5/subpart-E);
(3) Claims on any label, container, or packaging (as defined in [§ 5.81](/current/title-27/section-5.81)) must comply with the rules for restricted label statements, as applicable, set forth in [subpart F of this part](/current/title-27/part-5/subpart-F);
(4) Statements or any other representations on any label, container, or packaging (as defined in [§§ 5.101](/current/title-27/section-5.101) and [5.121](/current/title-27/section-5.121)) may not violate the regulations in [subparts G](/current/title-27/part-5/subpart-G) and [H of this part](/current/title-27/part-5/subpart-H) regarding certain practices on labeling of distilled spirits; and
(5) The class and type designation on any label, as well as any designation appearing on containers or packaging, must comply with the standards of identity set forth in [subpart I of this part](/current/title-27/part-5/subpart-I).
(e) *Packaged in accordance with this part.* In order to be packaged in accordance with the regulations in this part, the distilled spirits must be bottled in authorized standards of fill in containers that meet the requirements of [subpart K of this part](/current/title-27/part-5/subpart-K).
#### §§ 5.4-5.6 \[Reserved]
#### § 5.7 Other TTB labeling regulations that apply to distilled spirits.
In addition to the regulations in this part, distilled spirits must also comply with the following TTB labeling regulations:
(a) *Health warning statement.* Alcoholic beverages, including distilled spirits, that contain at least 0.5 percent alcohol by volume, must be labeled with a health warning statement, in accordance with the Alcoholic Beverage Labeling Act of 1988 (ABLA). The regulations implementing the ABLA are contained in [27 CFR part 16](/current/title-27/part-16).
(b) *Internal Revenue Code requirements.* The labeling and marking requirements for distilled spirits under the Internal Revenue Code are found in [27 CFR part 19, subpart T](/current/title-27/part-19/subpart-T) (for domestic products) and [27 CFR part 27, subpart E](/current/title-27/part-27/subpart-E) (for imported products).
#### § 5.8 Distilled spirits for export.
The regulations in this part shall not apply to distilled spirits exported in bond.
#### § 5.9 \[Reserved]
#### § 5.10 Other related regulations.
(a) *TTB regulations.* Other TTB regulations that relate to distilled spirits are listed in [paragraphs (a)(1)](/current/title-27/section-5.10#p-5.10\(a\)\(1\)) through [(8)](/current/title-27/section-5.10#p-5.10\(a\)\(8\)) of this section:
(1) [27 CFR part 1](/current/title-27/part-1)—Basic Permit Requirements under the Federal Alcohol Administration Act, Nonindustrial Use of Distilled Spirits and Wine, Bulk Sales and Bottling of Distilled Spirits;
(2) [27 CFR part 13](/current/title-27/part-13)—Labeling Proceedings;
(3) [27 CFR part 16](/current/title-27/part-16)—Alcoholic Beverage Health Warning Statement;
(4) [27 CFR part 19](/current/title-27/part-19)—Distilled Spirits Plants;
(5) [27 CFR Part 26](/current/title-27/part-26)—Liquors and Articles from Puerto Rico and the Virgin Islands;
(6) [27 CFR Part 27](/current/title-27/part-27)—Importation of Distilled Spirits, Wines, and Beer;
(7) [27 CFR Part 28](/current/title-27/part-28)—Exportation of Alcohol; and
(8) [27 CFR Part 71](/current/title-27/part-71)—Rules of Practice in Permit Proceedings.
(b) *Other Federal Regulations.* The regulations listed in [paragraphs (b)(1)](/current/title-27/section-5.10#p-5.10\(b\)\(1\)) through [(8)](/current/title-27/section-5.10#p-5.10\(b\)\(8\)) of this section issued by other Federal agencies also may apply:
(1) [7 CFR Part 205](/current/title-7/part-205)—National Organic Program;
(2) [19 CFR Part 11](/current/title-19/part-11)—Packing and Stamping; Marking;
(3) [19 CFR Part 102](/current/title-19/part-102)—Rules of Origin;
(4) [19 CFR Part 134](/current/title-19/part-134)—Country of Origin Marking;
(5) [21 CFR Part 1](/current/title-21/part-1)—General Enforcement Regulations, Subpart H, Registration of Food Facilities, and Subpart I, Prior Notice of Imported Food;
(6) [21 CFR Parts 70-82](/current/title-21/part-70), which pertain to food and color additives;
(7) [21 CFR Part 110](/current/title-21/part-110)—Current Good Manufacturing Practice in Manufacturing, Packing, or Holding Human Food; and
(8) [21 CFR Parts 170-189](/current/title-21/part-170), which pertain to food additives and secondary direct food additives.
#### § 5.11 Forms.
(a) *General.* TTB prescribes and makes available all forms required by this part. Any person completing a form must provide all of the information required by each form as indicated by the headings on the form and the instructions for the form. Each form must be filed in accordance with this part and the instructions for the form.
(b) *Electronically filing forms.* The forms required by this part can be filed electronically by using TTB's online filing systems: COLAs Online and Formulas Online. Anyone who intends to use one of these online filing systems must first register to use the system by accessing the TTB website at *[https://www.ttb.gov](https://www.ttb.gov).*
(c) *Obtaining paper forms.* Forms required by this part are available for printing through the TTB website (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8002, Cincinnati, OH 45202.
#### § 5.12 Delegations of the Administrator.
Most of the regulatory authorities of the Administrator contained in this part are delegated to “appropriate TTB officers.” To find out which officers have been delegated specific authorities, see the current version of TTB Order 1135.5, Delegation of the Administrator's Authorities in [27 CFR part 5](/current/title-27/part-5), Labeling and Advertising of Distilled Spirits. Copies of this order can be obtained by accessing the TTB website (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8002, Cincinnati, OH 45202.
## Subpart B—Certificates of Label Approval and Certificates of Exemption from Label Approval
Requirements for Distilled Spirits Bottled in the United States
#### § 5.21 Requirement for certificates of label approval (COLAs) for distilled spirits bottled in the United States.
(a) *Applicability.* The certificate of label approval (COLA) requirements described in this section apply to distilled spirits bottled in the United States, outside of customs custody.
(b) *Distilled spirits shipped or sold in interstate commerce.* No person may bottle distilled spirits without first applying for and obtaining a COLA issued by the appropriate TTB officer. This requirement applies to distilled spirits produced and bottled in the United States and to distilled spirits imported in bulk, regardless of where produced, and bottled in the United States. Bottlers may obtain an exemption from this requirement only if they satisfy the conditions set forth in [§ 5.23](/current/title-27/section-5.23).
(c) *Evidence of COLA.* Upon request by the appropriate TTB officer, a bottler or importer must provide evidence that a container of distilled spirits is covered by a COLA. This requirement may be satisfied by providing original COLAs, photocopies or electronic copies of COLAs, or records showing the TTB identification number assigned to the approved certificate.
#### § 5.22 Rules regarding certificates of label approval (COLAs) for distilled spirits bottled in the United States.
(a) *What a COLA authorizes.* An approved TTB Form 5100.31 authorizes the bottling of distilled spirits covered by the certificate of label approval (COLA), as long as the container bears labels identical to the labels appearing on the face of the COLA, or labels with changes authorized by TTB on the COLA or otherwise (such as through the issuance of public guidance available on the TTB website at *[https://www.ttb.gov](https://www.ttb.gov)*).
(b) *When to obtain a COLA.* The COLA must be obtained prior to bottling. No bottler may bottle distilled spirits, or remove distilled spirits from the premises where bottled, unless a COLA has been obtained.
(c) *Application for a COLA.* The bottler may apply for a COLA by submitting an application to TTB on Form 5100.31, in accordance with the instructions on the form. The bottler may apply for a COLA either electronically by accessing TTB's online system, COLAs Online, at *[https://www.ttb.gov](https://www.ttb.gov),* or by submitting the paper form. For procedures regarding the issuance of COLAs, see [part 13 of this chapter](/current/title-27/part-13).
#### § 5.23 Application for exemption from label approval for distilled spirits bottled in the United States.
(a) *Exemption.* Any bottler of distilled spirits may apply to be exempt from the requirements of [§§ 5.21](/current/title-27/section-5.21), [5.22](/current/title-27/section-5.22), and [5.30(h)](/current/title-27/section-5.30#p-5.30\(h\)), by showing to the satisfaction of the appropriate TTB officer that the distilled spirits to be bottled are not to be sold, offered for sale, or shipped or delivered for shipment, or otherwise introduced, in interstate or foreign commerce.
(b) *Application required.* The bottler must file an application on TTB Form 5100.31 for exemption from label approval before bottling the distilled spirits. The bottler may apply for a certificate of exemption from label approval either electronically, by accessing TTB's online system, COLAs Online, at *[https://www.ttb.gov](https://www.ttb.gov),* or by using the paper form. For procedures regarding the issuance of certificates of exemption from label approval, see [part 13 of this chapter](/current/title-27/part-13).
(c) *Labeling of distilled spirits covered by certificate of exemption.* The application for a certificate of exemption from label approval requires that the applicant identify the State in which the product will be sold. As a condition of receiving exemption from label approval, the label covered by an approved certificate of exemption must include the statement “For sale in \[name of State] only.” See [§§ 19.517](/current/title-27/section-19.517) and [19.518 of this chapter](/current/title-27/section-19.518) for additional labeling rules that apply to distilled spirits covered by a certificate of exemption.
Requirements for Distilled Spirits Imported in Containers
#### § 5.24 Certificates of label approval (COLAs) for distilled spirits imported in containers.
(a) *Application requirement.* Any person removing distilled spirits in containers from customs custody for consumption must first apply for and obtain a certificate of label approval (COLA) covering the distilled spirits from the appropriate TTB officer, or obtain authorization to use the COLA from the person to whom the COLA is issued.
(b) *Release of distilled spirits from customs custody.* Distilled spirits, imported in containers, are not eligible for release from customs custody for consumption, and no person may remove such distilled spirits from customs custody for consumption, unless the person removing the distilled spirits has obtained a COLA covering the distilled spirits and is able to provide it (either electronically or on paper) upon request. Products imported under another person's COLA are eligible for release only if each bottle or individual container to be imported bears the name (or trade name) and address of the person to whom the COLA was issued by TTB, and only if the importer using the COLA to obtain release of a shipment can substantiate that the person to whom the COLA was issued has authorized its use by the importer.
(c) *Filing requirements.* If filing electronically, the importer must file with U.S. Customs and Border Protection (CBP), at the time of filing the customs entry, the TTB-assigned identification number of the valid COLA that corresponds to the label on the product or lot of distilled spirits to be imported. If the importer is not filing electronically, the importer must provide a copy of the COLA to CBP at the time of entry. In addition, the importer must provide a copy of the applicable COLA, and proof of the COLA holder's authorization if applicable, upon request by the appropriate TTB officer or a customs officer.
(d) *Evidence of COLA.* Upon request by the appropriate TTB officer, an importer must provide evidence that a container of distilled spirits is covered by a COLA. This requirement may be satisfied by providing original COLAs, photocopies or electronic copies of COLAs, or records showing the TTB identification number assigned to the approved certificate.
(e) *Scope of this section.* The COLA requirement imposed by this section applies only to distilled spirits that are removed for sale or any other commercial purpose. Distilled spirits that are imported in containers are not eligible for a certificate of exemption from label approval. See [27 CFR 27.49](/current/title-27/section-27.49), [27.74](/current/title-27/section-27.74), and [27.75](/current/title-27/section-27.75) for labeling exemptions applicable to certain imported samples of distilled spirits.
(f) *Relabeling in customs custody.* Containers of distilled spirits in customs custody that are required to be covered by a COLA but are not labeled in conformity with a COLA must be relabeled, under the supervision and direction of customs officers, prior to their removal from customs custody for consumption.
#### § 5.25 Rules regarding certificates of label approval (COLAs) for distilled spirits imported in containers.
(a) *What COLA authorizes.* An approved TTB Form 5100.31 authorizes the use of the labels covered by the certificate of label approval (COLA) on containers of distilled spirits, as long as the container bears labels identical to the labels appearing on the face of the COLA, or labels with changes authorized by the form or otherwise authorized by TTB (such as through the issuance of public guidance available on the TTB website at *[https://www.ttb.gov](https://www.ttb.gov)*).
(b) *When to obtain a COLA.* The COLA must be obtained prior to the removal of distilled spirits in containers from customs custody for consumption.
(c) *Application for a COLA.* The person responsible for the importation of distilled spirits must obtain approval of the labels by submitting an application to TTB on TTB Form 5100.31. A person may apply for a COLA either electronically, by accessing TTB's online system, COLAs Online, at *[https://www.ttb.gov](https://www.ttb.gov),* or by submitting the paper form. For procedures regarding the issuance of COLAs, see [part 13 of this chapter](/current/title-27/part-13).
Administrative Rules
#### § 5.27 Presenting certificates of label approval (COLAs) to Government officials.
A certificate holder must present the original or a paper or electronic copy of the appropriate certificate of label approval (COLA) upon the request of any duly authorized representative of the United States Government.
#### § 5.28 Formulas, samples, and documentation.
(a) In addition to any formula specifically required under [subpart J of this part](/current/title-27/part-5/subpart-J), TTB may require formulas under certain circumstances in connection with the label approval process. Prior to or in conjunction with the review of an application for a certificate of label approval (COLA) on TTB Form 5100.31, the appropriate TTB officer may require a bottler or importer to submit a formula, the results of laboratory testing of the distilled spirits, or a sample of any distilled spirits or ingredients used in producing a distilled spirit. After the issuance of a COLA, or with regard to any distilled spirits required to be covered by a COLA, the appropriate TTB officer may require a full and accurate statement of the contents of the container.
(b) A formula may be filed electronically by using Formulas Online, or it may be submitted on paper on TTB Form 5100.51. See [§ 5.11](/current/title-27/section-5.11) for more information on forms and Formulas Online.
#### § 5.29 Personalized labels.
(a) *General.* Applicants for label approval may obtain permission from TTB to make certain changes in order to personalize labels without having to resubmit labels for TTB approval. A personalized label is an alcohol beverage label that meets the minimum mandatory label requirements and is customized for customers. Personalized labels may contain a personal message, picture, or other artwork that is specific to the consumer who is purchasing the product. For example, a distiller may offer individual or corporate customers labels that commemorate an event such as a wedding or grand opening.
(b) *Application.* Any person who intends to offer personalized labels must submit a template for the personalized label as part of the application for label approval required under [§§ 5.21](/current/title-27/section-5.21) or [5.24](/current/title-27/section-5.24), and must note on the application a description of the specific personalized information that may change.
(c) *Approval of personalized label.* If the application complies with the regulations, TTB will issue a certificate of label approval (COLA) with a qualification allowing the personalization of labels. The qualification will allow the certificate holder to add or change items on the personalized label such as salutations, names, graphics, artwork, congratulatory dates and names, or event dates without applying for a new COLA. All of these items on personalized labels must comply with the regulations of this part.
(d) *Changes not allowed to personalized labels.* Approval of an application to personalize labels does not authorize the addition of any information that discusses either the alcohol beverage or characteristics of the alcohol beverage or that is inconsistent with or in violation of the provisions of this part or any other applicable provision of law or regulations.
#### § 5.30 Certificates of age and origin for imported spirits.
(a) *Scotch, Irish, and Canadian whiskies.*
(1) Scotch, Irish, and Canadian whiskies, imported in containers, are not eligible for release from customs custody for consumption, and no person may remove such whiskies from customs custody for consumption, unless that person has obtained and is in possession of an invoice accompanied by a certificate of origin issued by an official duly authorized by the appropriate foreign government, certifying:
(i) That the particular distilled spirits are Scotch, Irish, or Canadian whisky, as the case may be; and
(ii) That the distilled spirits have been manufactured in compliance with the laws of the respective foreign governments regulating the manufacture of whisky for home consumption.
(2) In addition, an official duly authorized by the appropriate foreign government must certify to the age of the youngest distilled spirits in the container. The age certified shall be the period during which, after distillation and before bottling, the distilled spirits have been stored in oak containers.
(b) *Brandy and Cognac.* Brandy (other than fruit brandies of a type not customarily stored in oak containers) or Cognac, imported in containers, is not eligible for release from customs custody for consumption, and no person may remove such brandy or Cognac from customs custody for consumption, unless the person so removing the brandy or Cognac possesses a certificate issued by an official duly authorized by the appropriate foreign country certifying that the age of the youngest brandy or Cognac in the container is not less than 2 years, or if age is stated on the label that none of the distilled spirits are of an age less than that stated. The age certified shall be the period during which, after distillation and before bottling, the distilled spirits have been stored in oak containers. If the label of any fruit brandy, not stored in oak containers, bears any statement of storage in another type of container, the brandy is not eligible for release from customs custody for consumption, and no person may remove such brandy from customs custody for consumption, unless the person so removing the brandy possesses a certificate issued by an official duly authorized by the appropriate foreign government certifying to such storage. Cognac, imported in bottles, is not eligible for release from customs custody for consumption, and no person may remove such Cognac from customs custody for consumption, unless the person so removing the Cognac possesses a certificate issued by an official duly authorized by the French Government, certifying that the product is grape brandy distilled in the Cognac region of France and entitled to be designated as “Cognac” by the laws and regulations of the French Government.
(c) *Rum.* Rum imported in containers that contain any statement of age is not eligible to be released from customs custody for consumption, and no person may remove such rum from customs custody for consumption, unless the person so removing the rum possesses a certificate issued by an official duly authorized by the appropriate foreign country, certifying to the age of the youngest rum in the container. The age certified shall be the period during which, after distillation and before bottling, the distilled spirits have been stored in oak containers.
(d) *Tequila.*
(1) Tequila imported in containers is not eligible for release from customs custody for consumption, and no person may remove such Tequila from customs custody for consumption, unless the person removing such Tequila possesses a Certificate of Tequila Export issued by an official duly authorized by the Mexican Government or a conformity assessment body stating that the product is entitled to be designated as Tequila under the applicable laws and regulations of the Mexican Government.
(2) If the label of any Tequila imported in containers contains any statement of age, the Tequila is not eligible for release from customs custody for consumption, and no person may remove such Tequila from customs custody for consumption, unless the person removing the Tequila possesses a Certificate of Tequila Export issued by an official duly authorized by the Mexican Government or a conformity assessment body as to the age of the youngest Tequila in the container. The age certified shall be the period during which the Tequila has been stored in oak containers after distillation and before bottling.
(e) *Other whiskies.* Whisky, as defined in [§ 5.143(c)(2)](/current/title-27/section-5.143#p-5.143\(c\)\(2\)) through [(7)](/current/title-27/section-5.143#p-5.143\(c\)\(7\)) and [(10)](/current/title-27/section-5.143#p-5.143\(c\)\(10\)) through [(14)](/current/title-27/section-5.143#p-5.143\(c\)\(14\)), imported in bottles, is not eligible for release from customs custody for consumption, and no person shall remove such whiskies from customs custody for consumption, unless that person has obtained and is in possession of a certificate issued by an official duly authorized by the appropriate foreign government certifying:
(1) In the case of whisky (regardless of whether it is mixed or blended) that contains no neutral spirits:
(i) The type of the whisky as defined in [§ 5.143](/current/title-27/section-5.143);
(ii) The American proof at which the whisky was distilled;
(iii) That no neutral spirits (or other whisky in the case of straight whisky) have been added or otherwise included in the whisky;
(iv) The age of the whisky; and
(v) The type of oak barrel in which the whisky was aged and whether the barrel was new or reused, charred or uncharred; and
(2) In the case of whisky containing neutral spirits:
(i) The type of the whisky as defined in [§ 5.143](/current/title-27/section-5.143);
(ii) The percentage of straight whisky used in the blend, if any;
(iii) The American proof at which any straight whisky in the blend was distilled;
(iv) The percentage of whisky other than straight whisky in the blend, if any;
(v) The percentage of neutral spirits in the blend and the name of the commodity from which the neutral spirits were distilled;
(vi) The age of any straight whisky and the age of any other whisky in the blend; and
(vii) The type of oak barrel in which the age of each whisky in the blend was attained and whether the barrel was new or reused and charred or uncharred.
(f) *Miscellaneous.* Distilled spirits (other than Scotch, Irish, and Canadian whiskies, and Cognac) imported in containers are not eligible for release from customs custody for consumption, and no person shall remove such spirits from customs custody for consumption, unless that person has obtained and is in possession of an invoice accompanied by a certificate of origin issued by an official duly authorized by the appropriate foreign government, if the issuance of such certificates with respect to such distilled spirits is required by the foreign government concerned, certifying as to the identity of the distilled spirits and that the distilled spirits have been manufactured in compliance with the laws of the respective foreign government regulating the manufacture of such distilled spirits for home consumption.
(g) *Retention of certificates—distilled spirits imported in containers.* The importer of distilled spirits imported in containers must retain for 5 years following the removal of the bottled distilled spirits from customs custody copies of the certificates (and accompanying invoices, if applicable) required by [paragraphs (a)](/current/title-27/section-5.30#p-5.30\(a\)) through [(f)](/current/title-27/section-5.30#p-5.30\(f\)) of this section, and must provide them upon request of the appropriate TTB officer or a customs officer.
(h) *Distilled spirits imported in bulk for bottling in the United States.* Distilled spirits that would be required under [paragraphs (a)](/current/title-27/section-5.30#p-5.30\(a\)) through [(f)](/current/title-27/section-5.30#p-5.30\(f\)) of this section to be covered by a certificate of age and/or a certificate of origin and that are imported in bulk for bottling in the United States may be removed from the premises where bottled only if the bottler possesses a certificate of age and/or a certificate of origin, issued by the appropriate entity as set forth in [paragraphs (a)](/current/title-27/section-5.30#p-5.30\(a\)) through [(f)](/current/title-27/section-5.30#p-5.30\(f\)) of this section, applicable to the spirits that provides the same information as a certificate required under [paragraphs (a)](/current/title-27/section-5.30#p-5.30\(a\)) through [(f)](/current/title-27/section-5.30#p-5.30\(f\)) of this section, would provide for like spirits imported in bottles.
(i) *Retention of distilled spirits certificates—distilled spirits in bulk.* The bottler of distilled spirits imported in bulk must retain, for 5 years following the removal of such distilled spirits from the premises where bottled, copies of the certificates required by [paragraphs (a)](/current/title-27/section-5.30#p-5.30\(a\)) through [(f)](/current/title-27/section-5.30#p-5.30\(f\)) of this section, and must provide them upon request of the appropriate TTB officer.
## Subpart C—Alteration of Labels, Relabeling, and Adding Information to Containers
#### § 5.41 Alteration of labels.
(a) *Prohibition.* It is unlawful for any person to alter, mutilate, destroy, obliterate or remove any mark, brand, or label on distilled spirits in containers held for sale in interstate or foreign commerce, or held for sale after shipment in interstate or foreign commerce, except as authorized by [§§ 5.42](/current/title-27/section-5.42), [5.43](/current/title-27/section-5.43), or [5.44](/current/title-27/section-5.44), or as otherwise authorized by Federal law.
(b) *Authorized relabeling.* For purposes of the relabeling activities authorized by this subpart, the term “relabel” includes the alteration, mutilation, destruction, obliteration, or removal of any existing mark, brand, or label on the container, as well as the addition of a new label (such as a sticker that adds information about the product or information engraved on the container) to the container, and the replacement of a label with a new label bearing identical information.
(c) *Obligation to comply with other requirements.* Authorization to relabel under this subpart:
(1) In no way authorizes the placement of labels on containers that do not accurately reflect the brand, bottler, identity, or other characteristics of the product;
(2) Does not relieve the person conducting the relabeling operations from any obligation to comply with the regulations in this part and with State or local law; and,
(3) Does not relieve the person conducting the relabeling operations from any obligation to obtain permission from the owner of the brand where otherwise required.
#### § 5.42 Authorized relabeling activities by distillers and importers.
(a) *Relabeling at distilled spirits plant premises.* A proprietor of distilled spirits plant premises may relabel domestically bottled distilled spirits prior to removal from, and after return to bond at, the distilled spirits plant premises, with labels covered by a certificate of label approval (COLA), without obtaining separate permission from TTB for the relabeling activity, provided that the proprietor is the certificate holder (and bottler).
(b) *Relabeling after removal from distilled spirits plant premises.* A proprietor of distilled spirits plant premises may relabel domestically bottled distilled spirits (or direct the relabeling of such spirits by an authorized agent) after removal from distilled spirits plant premises with labels covered by a COLA, without obtaining separate permission from TTB for the relabeling activity, provided that the proprietor is the certificate holder (and bottler).
(c) *Relabeling in customs custody.* Under the supervision of U.S. customs officers, imported distilled spirits in containers in customs custody may be relabeled without obtaining separate permission from TTB for the relabeling activity. Such containers must bear labels covered by a COLA upon their removal from customs custody for consumption. See [§ 5.24(b)](/current/title-27/section-5.24#p-5.24\(b\)).
(d) *Relabeling after removal from customs custody.* The importer of distilled spirits in containers may relabel imported distilled spirits (or direct the relabeling of such spirits by an authorized agent) after removal from customs custody without obtaining separate permission from TTB for the relabeling activity, as long as the labels are covered by a COLA.
#### § 5.43 Relabeling activities that require separate written authorization from TTB.
(a) *General.* Any permittee holding distilled spirits for sale who needs to relabel the containers but is not the original bottler may apply for written permission for the relabeling of distilled spirits containers. The appropriate TTB officer may permit relabeling of distilled spirits in containers if the facts show that the relabeling is for the purpose of compliance with the requirements of this part or State law, or for the purpose of replacing damaged labels.
(b) *Application.* The written application must include:
(1) Copies of the original and proposed new labels;
(2) The circumstances of the request, including the reason for relabeling;
(3) The number of containers to be relabeled;
(4) The location where the relabeling will take place; and
(5) The name and address of the person who will be conducting the relabeling operations.
#### § 5.44 Adding a label or other information to a container that identifies the wholesaler, retailer, or consumer.
Any label or other information that identifies the wholesaler, retailer, or consumer of the distilled spirits may be added to containers (by the addition of stickers, engraving, stenciling, etc.) without prior approval from TTB and without being covered by a certificate of label approval or certificate of exemption from label approval. Such information may be added before or after the containers have been removed from distilled spirits plant premises or released from customs custody. The information added:
(a) May not violate the provisions of [subpart F](/current/title-27/part-5/subpart-F), [G](/current/title-27/part-5/subpart-G), or [H of this part](/current/title-27/part-5/subpart-H);
(b) May not contain any reference to the characteristics of the product; and
(c) May not be added to the container in such a way that it obscures any other labels on the container.
## Subpart D—Label Standards
#### § 5.51 Requirement for firmly affixed labels.
Any label that is not an integral part of the container must be affixed to the container in such a way that it cannot be removed without thorough application of water or other solvents.
#### § 5.52 Legibility and other requirements for mandatory information on labels.
(a) *Readily legible.* Mandatory information on labels must be readily legible to potential consumers under ordinary conditions.
(b) *Separate and apart.* Subject to the exceptions below, mandatory information on labels, except brand names, must be separate and apart from any additional information.
(1) This does not preclude the addition of brief optional phrases of additional information as part of the class or type designation (such as, “premium vodka” or “delicious Tequila”), the name and address statement (such as, “Proudly distilled and bottled by ABC Distilling Company, Atlanta, GA, for over 30 years”) or other information required by [§ 5.63(a)](/current/title-27/section-5.63#p-5.63\(a\)) and [(b)](/current/title-27/section-5.63#p-5.63\(b\)). The statements required by [§ 5.63(c)](/current/title-27/section-5.63#p-5.63\(c\)) may not include additional information.
(2) Mandatory information (other than an aspartame declaration required by [§ 5.63(c)(8)](/current/title-27/section-5.63#p-5.63\(c\)\(8\))) may be contained among other descriptive or explanatory information if the script, type, or printing of the mandatory information is substantially more conspicuous than that of the descriptive or explanatory information.
(c) *Contrasting background.* Mandatory information must appear in a color that contrasts with the background on which it appears, except that if the net contents are blown into a glass container, they need not be contrasting. The color of the container and of the distilled spirits must be taken into account if the label is transparent or if mandatory label information is etched, engraved, sandblasted, or otherwise carved into the surface of the container or is branded, stenciled, painted, printed, or otherwise directly applied on to the surface of the container. Examples of acceptable contrasts are:
(1) Black lettering appearing on a white or cream background; or
(2) White or cream lettering appearing on a black background.
(d) *Capitalization.* Except for the aspartame statement when required by [§ 5.63(c)(8)](/current/title-27/section-5.63#p-5.63\(c\)\(8\)), which must appear in all capital letters, mandatory information prescribed by this part may appear in all capital letters, in all lower case letters, or in mixed-case using both capital and lower-case letters.
#### § 5.53 Minimum type size of mandatory information.
All capital and lowercase letters in statements of mandatory information on labels must meet the following type size requirements.
(a) *Containers of more than 200 milliliters.* All mandatory information must be in script, type, or printing that is at least two millimeters in height.
(b) *Containers of 200 milliliters or less.* All mandatory information must be in script, type, or printing that is at least one millimeter in height.
#### § 5.54 Visibility of mandatory information.
Mandatory information on a label must be readily visible and may not be covered or obscured in whole or in part. See [§ 5.62](/current/title-27/section-5.62) for rules regarding packaging of containers (including cartons, coverings, and cases). See [subpart N of this part](/current/title-27/part-5/subpart-N) for regulations pertaining to advertising materials.
#### § 5.55 Language requirements.
(a) *General.* Mandatory information must appear in the English language, with the exception of the brand name and except as provided in [paragraph (c)](/current/title-27/section-5.55#p-5.55\(c\)) of this section.
(b) *Foreign languages.* Additional statements in a foreign language, including translations of mandatory information that appears elsewhere in English on the label, are allowed on labels and containers as long as they do not in any way conflict with, or contradict, the requirements of this part.
(c) *Distilled spirits for consumption in the Commonwealth of Puerto Rico.* Mandatory information may be stated solely in the Spanish language on labels of distilled spirits bottled for consumption within the Commonwealth of Puerto Rico.
#### § 5.56 Additional information.
Information (other than mandatory information) that is truthful, accurate, and specific, and that does not violate [subparts F](/current/title-27/part-5/subpart-F), [G](/current/title-27/part-5/subpart-G), or [H of this part](/current/title-27/part-5/subpart-H), may appear on labels. Such additional information may not conflict with, modify, qualify or restrict mandatory information in any manner.
## Subpart E—Mandatory Label Information
#### § 5.61 What constitutes a label for purposes of mandatory information.
(a) *Label.* Certain information, as outlined in [§ 5.63](/current/title-27/section-5.63), must appear on a label. When used in this part for purposes of determining where mandatory information must appear, the term “label” includes:
(1) Material affixed to the container, whether made of paper, plastic, metal, or other matter;
(2) For purposes of the net content statement only, information blown, embossed, or molded into the container as part of the process of manufacturing the container;
(3) Information etched, engraved, sandblasted, or otherwise carved into the surface of the container; and
(4) Information branded, stenciled, painted, printed, or otherwise directly applied on to the surface of the container.
(b) *Information appearing elsewhere on the container.* Information appearing on the following parts of the container is subject to all of the restrictions and prohibitions set forth in [subparts F](/current/title-27/part-5/subpart-F), [G](/current/title-27/part-5/subpart-G) and [H of this part](/current/title-27/part-5/subpart-H), but will not satisfy any requirements in this part for mandatory information that must appear on labels:
(1) Material affixed to, or information appearing on, the bottom surface of the container;
(2) Caps, corks or other closures unless authorized to bear mandatory information by the appropriate TTB officer; and
(3) Foil or heat shrink bottle capsules.
(c) *Materials not firmly affixed to the container.* Any materials that accompany the container to the consumer but are not firmly affixed to the container, including booklets, leaflets, and hang tags, are not “labels” for purposes of this part. Such materials are instead subject to the advertising regulations in [subpart N of this part](/current/title-27/part-5/subpart-N).
#### § 5.62 Packaging (cartons, coverings, and cases).
(a) *General.* An individual covering, carton, or other container of the bottle used for sale at retail (other than a shipping container), may not contain any statement, design, device, or graphic, pictorial, or emblematic representation that is prohibited on labels by regulations in [subpart F](/current/title-27/part-5/subpart-F), [G](/current/title-27/part-5/subpart-G), or [H of this part](/current/title-27/part-5/subpart-H).
(b) *Sealed opaque cartons.* If containers are enclosed in sealed opaque coverings, cartons, or other containers used for sale at retail (other than shipping containers), such coverings, cartons, or other containers must bear all mandatory label information.
(c) *Other cartons.*
(1) If an individual covering, carton, or other container of the bottle used for sale at retail (other than a shipping container) is so designed that the bottle is readily removable, it may display any information which is not in conflict with the label on the bottle contained therein.
(2) Cartons displaying brand names and/or designations must display such names and designations in their entirety—brand names required to be modified, *e.g.,* by “Brand” or “Product of U.S.A.”, must also display such modification.
(3) Specialty products for which a truthful and adequate statement of composition is required must display such statement.
(d) *Labeling of containers within the packaging.* The container within the packaging is subject to all labeling requirements of this part, including mandatory labeling information requirements, regardless of whether the packaging bears such information.
#### § 5.63 Mandatory label information.
(a) *Mandatory information required to appear within the same field of vision.* Distilled spirits containers must bear a label or labels (as defined in [§ 5.61](/current/title-27/section-5.61)) containing the following information within the same field of vision (which means a single side of a container (for a cylindrical container, a side is 40 percent of the circumference) where all of the pieces of information can be viewed simultaneously without the need to turn the container):
(1) Brand name, in accordance with [§ 5.64](/current/title-27/section-5.64);
(2) Class, type, or other designation, in accordance with [subpart I of this part](/current/title-27/part-5/subpart-I); and
(3) Alcohol content, in accordance with [§ 5.65](/current/title-27/section-5.65).
(b) *Other mandatory information.* Distilled spirits containers must bear a label or labels (as defined in [§ 5.61](/current/title-27/section-5.61)) anywhere on the container bearing the following information:
(1) Name and address of the bottler or distiller, in accordance with [§ 5.66](/current/title-27/section-5.66), or the importer, in accordance with [§ 5.67](/current/title-27/section-5.67) or [§ 5.68](/current/title-27/section-5.68), as applicable; and
(2) Net contents (which may be blown, embossed, or molded into the container as part of the process of manufacturing the container), in accordance with [§ 5.70](/current/title-27/section-5.70).
(c) *Disclosure of certain ingredients, processes and other information.* The following ingredients, processes, and other information must be disclosed on a label, without the inclusion of any additional information as part of the statement, as follows:
(1) *Neutral spirits.* The percentage of neutral spirits and the name of the commodity from which the neutral spirits were distilled, or in the case of continuously distilled neutral spirits or gin, the name of the commodity only, in accordance with [§ 5.71](/current/title-27/section-5.71);
(2) *Coloring or treatment with wood.* Coloring or treatment with wood, in accordance with [§§ 5.72](/current/title-27/section-5.72) and [5.73](/current/title-27/section-5.73);
(3) *Age.* A statement of age or age and percentage of type, when required or used, in accordance with [§ 5.74](/current/title-27/section-5.74);
(4) *State of distillation.* State of distillation of any type of whisky defined in [§ 5.143(c)(2)](/current/title-27/section-5.143#p-5.143\(c\)\(2\)) through [(c)(7)](/current/title-27/section-5.143#p-5.143\(c\)\(7\)), which is distilled in the United States, in accordance with [§ 5.66(f)](/current/title-27/section-5.66#p-5.66\(f\));
(5) *FD\&C Yellow No. 5.* If a distilled spirit contains the coloring material FD\&C Yellow No. 5, the label must include a statement to that effect, such as “FD\&C Yellow No. 5” or “Contains FD\&C Yellow No. 5”;
(6) *Cochineal extract or carmine.* If a distilled spirit contains the color additive cochineal extract or the color additive carmine, the label must include a statement to that effect, using the respective common or usual name (such as “contains cochineal extract” or “contains carmine”). This requirement applies to labels when either of the coloring materials was used in a distilled spirit that is removed from bottling premises or from customs custody on or after April 16, 2013;
(7) *Sulfites.* If a distilled spirit contains 10 or more parts per million of sulfur dioxide or other sulfiting agent measured as total sulfur dioxide, the label must include a statement to that effect. Examples of acceptable statements are “Contains sulfites” or “Contains (a) sulfiting agent(s)” or a statement identifying the specific sulfiting agent. The alternative terms “sulphites” or “sulphiting” may be used; and
(8) *Aspartame.* If the distilled spirit contains aspartame, the label must include the following statement, in capital letters, separate and apart from all other information: “PHENYLKETONURICS: CONTAINS PHENYLALANINE.”
(d) *Distinctive liquor bottles.* See [§ 5.205(b)(2)](/current/title-27/section-5.205#p-5.205\(b\)\(2\)) for exemption from placement requirements for certain mandatory information for distinctive liquor bottles.
#### § 5.64 Brand name.
(a) *Requirement.* The distilled spirits label must include a brand name. If the distilled spirits are not sold under a brand name, then the name of the bottler, distiller or importer, as applicable, appearing in the name and address statement is treated as the brand name.
(b) *Misleading brand names.* Labels may not include any misleading brand names. A brand name is misleading if it creates (by itself or in association with other printed or graphic matter) any erroneous impression or inference as to the age, origin, identity, or other characteristics of the distilled spirits. A brand name that would otherwise be misleading may be qualified with the word “brand” or with some other qualification, if the appropriate TTB officer determines that the qualification dispels any misleading impression that might otherwise be created.
#### § 5.65 Alcohol content.
(a) *General.* The alcohol content for distilled spirits must be stated on the label as a percentage of alcohol by volume. Products that contain a significant amount of material, such as solid fruit, that may absorb spirits after bottling must state the alcohol content at the time of bottling as follows: “Bottled at \_\_\_\_ percent alcohol by volume.”
(b) *How the alcohol content must be expressed.* The following rules apply to statements of alcohol content.
(1) A statement of alcohol content must be expressed as a percentage of alcohol by volume.
(i) In addition, the alcohol content in degrees of proof may be stated on a label as long as it appears in the same field of vision as the mandatory statement of alcohol content as a percentage of alcohol by volume. Additional statements of proof may appear on the label without being in the same field of vision as the mandatory alcohol by volume statement.
(ii) Other truthful, accurate, and specific factual representations of alcohol content, such as alcohol by weight, may be made, as long as they appear together with, and as part of, the statement of alcohol content as a percentage of alcohol by volume.
(2)
(i) The alcohol content statement must be expressed in one of the following formats:
(A) “Alcohol \_\_\_\_ percent by volume”;
(B) “\_\_\_\_ percent alcohol by volume”; or
(C) “Alcohol by volume \_\_\_\_ percent.”
(ii) Any of the words or symbols may be enclosed in parentheses and authorized abbreviations may be used with or without a period. The alcohol content statement does not have to appear with quotation marks.
(3) The statements listed in [paragraph (b)(2)(i)](/current/title-27/section-5.65#p-5.65\(b\)\(2\)\(i\)) of this section must appear as shown, except that the following abbreviations may be used: Alcohol may be abbreviated as “alc”; percent may be represented by the percent symbol “%”; alcohol and volume may be separated by a slash “/” in lieu of the word “by”; and volume may be abbreviated as “vol”.
(4) The following are examples of alcohol content statements that comply with the requirements of this part:
(i) “40% alc/vol”;
(ii) “Alc. 40 percent by vol.”;
(iii) “Alc 40% by vol”; and
(iv) “40% Alcohol by Volume.”
(c) *Tolerances.* A tolerance of plus or minus 0.3 percentage points is allowed for actual alcohol content that is above or below the labeled alcohol content.
#### § 5.66 Name and address for domestically bottled distilled spirits that were wholly made in the United States.
(a) *General.* Domestically bottled distilled spirits that were wholly made in the United States and contain no imported distilled spirits must be labeled in accordance with this section. (See [§§ 5.67](/current/title-27/section-5.67) and [5.68](/current/title-27/section-5.68) for name and address requirements applicable to distilled spirits that are not wholly made in the United States.) For purposes of this section, a “processor” who solely bottles the labeled distilled spirits will be considered the “bottler.”
(b) *Form of statement.* The bottler, distiller, or processor of the distilled spirits must be identified by a phrase describing the function performed by that person. If that person performs more than one function, the label may (but is not required to) so indicate.
(1) If the name of the bottler appears on the label, it must be preceded by a phrase such as “bottled by,” “canned by,” “packed by,” or “filled by,” followed by the name and address of the bottler.
(2) If the name of the processor appears on the label, it must be preceded by a phrase such as “blended by,” “made by,” “prepared by,” “produced by,” or “manufactured by,” as appropriate, followed by the name and address of the processor. When applied to distilled spirits, the term “produced by” indicates a processing operation (formerly known as rectification) that involves a change in the class or type of the product through the addition of flavors or some other processing activity.
(3) If the name of the distiller appears on the label, it must be preceded by a phrase such as “distilled by,” followed by the name and address of the distiller. If the distilled spirits were bottled for the distiller thereof, the name and address of the distiller may be preceded by a phrase such as “distilled by and bottled for,” or “bottled for.”
(c) *Listing of more than one function.* If different functions are performed by more than one person, statements on the label may not create the misleading impression that the different functions were performed by the same person.
(d) *Form of address* —
(1) *General.* The address consists of the city and State where the operation occurred, or the city and State of the principal place of business of the person performing the operation. This information must be consistent with the information on the basic permit. Addresses may, but are not required to, include additional information such as street names, counties, zip codes, phone numbers, and website addresses. The postal abbreviation of the State name may be used; for example, California may be abbreviated as CA.
(2) *More than one address.* If the bottler, distiller, or processor listed on the name and address statement is the actual operator of more than one distilled spirits plant engaged in bottling, distilling, or processing operations, as applicable, the label may state, immediately following the name of the permittee, the addresses of those other plants, in addition to the address of the plant at which the distilled spirits were bottled. In this situation, the address where the operation occurred must be indicated on the label or on the container by printing, coding, or other markings.
(3) *Principal place of business.* The label may provide the address of the bottler's, distiller's, or processor's principal place of business, in lieu of the place where the bottling, distilling, or other operation occurred, provided that the address where the operation occurred is indicated on the label or on the container by printing, coding, or other markings.
(4) *Distilled spirits bottled for another person.*
(i) If distilled spirits are bottled for another person, other than the actual distiller thereof, the label may state, in addition to (but not in place of) the name and address of the bottler, the name and address of such other person, immediately preceded by the words “bottled for” or another similar appropriate phrase. Such statements must clearly indicate the relationship between the two persons (for example, contract bottling).
(ii) If the same brand of distilled spirits is bottled by two distillers that are not under the same ownership, the label for each distiller may set forth both locations where bottling takes place, as long as the label uses the actual location (and not the principal place of business) and as long as the nature of the arrangement is clearly set forth.
(5) *Additional addresses.* No additional places or addresses may be stated for the same person unless:
(i) That person is actively engaged in the conduct of an additional bona fide and actual alcohol beverage business at such additional place or address, and
(ii) The label also contains in direct conjunction therewith, appropriate descriptive material indicating the function occurring at such additional place or address in connection with the particular product (such as “distilled by.”)
(e) *Special rule for straight whiskies.* If “straight whiskies” (see [§ 5.143](/current/title-27/section-5.143)) of the same type are distilled in the same State by two or more different distillers and are combined (either at the time of bottling or at a warehouseman's bonded premises for further storage) and subsequently bottled and labeled as “straight whisky,” that “straight whisky” must bear a label that contains name and address information of the bottler. If that combined “straight whisky” is bottled by or for the distillers, in lieu of the name and address of the bottler, the label may contain the words “distilled by,” followed immediately by the names (or trade names) and addresses of the different distillers who distilled a portion of the “straight whisky” and the percentage of “straight whisky” distilled by each distiller, with a tolerance of plus or minus 2 percent. If “straight whisky” consists of a mixture of “straight whiskies” of the same type from two or more different distilleries of the same proprietor located within the same State, and if that “straight whisky” is bottled by or for that proprietor, in lieu of the name and address of the bottler, the “straight whisky” may bear a label containing the words “distilled by” followed by the name (or trade name) of the proprietor and the addresses of the different distilleries that distilled a portion of the “straight whisky.”
(f) *State of distillation for whisky.*
(1) The State of distillation, which is the State in which original distillation takes place, must appear on the label of any type of whisky defined in [§ 5.143(c)(2)](/current/title-27/section-5.143#p-5.143\(c\)\(2\)) through [(7)](/current/title-27/section-5.143#p-5.143\(c\)\(7\)), [(15)](/current/title-27/section-5.143#p-5.143\(c\)\(15\)), and [(16)](/current/title-27/section-5.143#p-5.143\(c\)\(16\)), which is distilled in the United States. The State of distillation may appear on any label and must be shown in at least one of the following ways:
(i) By including a “distilled by” (or “distilled and bottled by” or any other phrase including the word “distilled”) statement as part of the mandatory name and address statement, followed by a single location;
(ii) If the address shown in the “bottled by” statement includes the State in which distillation occurred, by including a “bottled by” statement as part of the mandatory name and address statement, followed by a single location;
(iii) By including the name of the State in which original distillation occurred immediately adjacent to the class or type designation (such as “Kentucky bourbon whisky”), as long as the product was both distilled and aged in that State in conformance with the requirements of [§ 5.143(b)](/current/title-27/section-5.143#p-5.143\(b\)); or
(iv) By including a separate statement, such as “Distilled in \[name of State].”
(2) The appropriate TTB officer may require that the State of distillation or other information appear on a label of any whisky subject to the requirements of [paragraph (f)(1)](/current/title-27/section-5.66#p-5.66\(f\)\(1\)) of this section (and may prescribe placement requirements for such information), even if that State appears in the name and address statement, if such additional information is necessary to negate any misleading or deceptive impression that might otherwise be created as regards the actual State of distillation.
(3) In the case of “light whisky,” the State name “Kentucky” or “Tennessee” may not appear on any label, except as a part of a name and address as specified in [paragraph (a)(1)](/current/title-27/section-5.66#p-5.66\(a\)\(1\)), [(2)](/current/title-27/section-5.66#p-5.66\(a\)\(2\)), or [(4)](/current/title-27/section-5.66#p-5.66\(a\)\(4\)) of this section.
(g) *Trade or operating names.* The name of the person appearing on the label may be the trade name or the operating name, as long as it is identical to a trade or operating name appearing on the basic permit. In the case of a distillation statement for spirits bottled in bond, the name or trade name under which the spirits were distilled must be shown.
\[T.D. TTB-176, 87 7579, Feb. 9, 2022, as amended at T.D. TTB-199, [89 FR 102735](https://www.federalregister.gov/citation/89-FR-102735), Dec. 18, 2024]
#### § 5.67 Name and address for domestically bottled distilled spirits that were bottled after importation.
(a) *General.* This section applies to distilled spirits that were bottled after importation. See [§ 5.68](/current/title-27/section-5.68) for name and address requirements applicable to imported distilled spirits that were imported in a container. See [19 CFR parts 102](/current/title-19/part-102) and [134](/current/title-19/part-134) for U.S. Customs and Border Protection country of origin marking requirements.
(b) *Distilled spirits bottled after importation in the United States.* Distilled spirits bottled, without further blending, making, preparing, producing, manufacturing, or distilling activities after importation, must bear one of the following name and address statements:
(1) The name and address of the bottler, preceded by the words “bottled by,” “canned by,” “packed by,” or “filled by”;
(2) If the distilled spirits were bottled for the person responsible for the importation, the words “imported by and bottled (canned, packed, or filled) in the United States for” (or a similar appropriate phrase) followed by the name and address of the principal place of business in the United States of the person responsible for the importation;
(3) If the distilled spirits were bottled by the person responsible for the importation, the words “imported by and bottled (canned, packed, or filled) in the United States by” (or a similar appropriate phrase) followed by the name and address of the principal place of business in the United States of the person responsible for the importation.
(c) *Distilled spirits that were subject to blending or other production activities after importation.* Distilled spirits that, after importation in bulk, were blended, made, prepared, produced, manufactured or further distilled, may not bear an “imported by” statement on the label, but must instead be labeled in accordance with the rules set forth in [§ 5.66](/current/title-27/section-5.66) for mandatory and optional labeling statements.
(d) *Optional statements.* In addition to the statements required by [paragraph (a)(1)](/current/title-27/section-5.67#p-5.67\(a\)\(1\)) of this section, the label may also state the name and address of the principal place of business of the foreign producer.
(e) *Form of address.*
(1) The address consists of the city and State where the operation occurred, or the city and State of the principal place of business of the person performing the operation. This information must be consistent with the information on the basic permit. Addresses may, but are not required to, include additional information such as street names, counties, zip codes, phone numbers, and website addresses.
(2) If the bottler or processor listed on the name and address statement is the actual operator of more than one distilled spirits plant engaged in bottling, distilling, or processing operations, as applicable, the label may state, immediately following the name of the bottler, the addresses of those other plants, in addition to the address of the plant at which the distilled spirits were bottled. In this situation, the address where the operation occurred must be indicated on the label or on the container by printing, coding, or other markings.
(3) The label may provide the address of the bottler's or processor's principal place of business, in lieu of the place where the bottling, distilling, or other operation occurred, provided that the address where the operation occurred is indicated on the label or on the container by printing, coding, or other markings.
(f) *Trade or operating names.* A trade name may be used if the trade name is listed on the basic permit or other qualifying documentation.
#### § 5.68 Name and address for distilled spirits that were imported in a container.
(a) *General.* This section applies to distilled spirits that were imported in a container, as defined in [§ 5.1](/current/title-27/section-5.1). See [§ 5.67](/current/title-27/section-5.67) for name and address requirements applicable to distilled spirits that were domestically bottled after importation. See [19 CFR parts 102](/current/title-19/part-102) and [134](/current/title-19/part-134) for U.S. Customs and Border Protection country of origin marking requirements.
(b) *Mandatory labeling statement.* Distilled spirits imported in containers, as defined in [§ 5.1](/current/title-27/section-5.1), must bear a label stating the words “imported by” or a similar appropriate phrase, followed by the name and address of the importer.
(1) For purposes of this section, the importer is the holder of the importer's basic permit who either makes the original customs entry or is the person for whom such entry is made, or the holder of the importer's basic permit who is the agent, distributor, or franchise holder for the particular brand of imported alcohol beverages and who places the order abroad.
(2) The address of the importer must be stated as the city and State of the principal place of business and must be consistent with the address reflected on the importer's basic permit. Addresses may, but are not required to, include additional information such as street names, counties, zip codes, phone numbers, and website addresses. The postal abbreviation of the State name may be used; for example, California may be abbreviated as CA.
(c) *Optional statements.* In addition to the statements required by [paragraph (b)(1)](/current/title-27/section-5.68#p-5.68\(b\)\(1\)) of this section, the label may also state the name and address of the principal place of business of the foreign producer.
(d) *Form of address.* The “place” stated must be the city and State, shown on the basic permit or other qualifying document, of the premises at which the operations took place; and the place for each operation that is designated on the label must be shown.
(e) *Trade or operating names.* A trade name may be used if the trade name is listed on the basic permit or other qualifying documentation.
#### § 5.69 Country of origin.
For U.S. Customs and Border Protection (CBP) rules regarding country of origin marking requirements, see the CBP regulations at [19 CFR parts 102](/current/title-19/part-102) and [134](/current/title-19/part-134).
#### § 5.70 Net contents.
The requirements of this section apply to the net contents statement required by [§ 5.63](/current/title-27/section-5.63).
(a) *General.* The volume of spirits in the container must appear on a label as a net contents statement. The word “liter” may be alternatively spelled “litre” or may be abbreviated as “L”. The word “milliliters” may be abbreviated as “ml.,” “mL.,” or “ML.” Net contents in equivalent U.S. customary units of measurement and in metric equivalents such as centiliters may appear on a label and, if used, must appear in the same field of vision as the metric net contents statement.
(b) *Tolerances.*
(1) The following tolerances are permissible for purposes of applying [paragraph (a)](/current/title-27/section-5.70#p-5.70\(a\)) of this section:
(i) *Errors in measuring.* Discrepancies due to errors in measuring that occur in filling conducted in compliance with good commercial practice;
(ii) *Differences in capacity.* Discrepancies due exclusively to differences in the capacity of containers, resulting solely from unavoidable difficulties in manufacturing the containers so as to be of uniform capacity, provided that the discrepancy does not result from a container design that prevents the manufacture of containers of an approximately uniform capacity; and
(iii) *Differences in atmospheric conditions.* Discrepancies in measure due to differences in atmospheric conditions in various places, including discrepancies resulting from the ordinary and customary exposure of alcohol beverage products in containers to evaporation, provided that the discrepancy is determined to be reasonable on a case by case basis.
(2) *Shortages and overages.* A contents shortage in certain of the containers in a shipment may not be counted against a contents overage in other containers in the same shipment for purposes of determining compliance with the requirements of this section.
#### § 5.71 Neutral spirits and name of commodity.
(a) In the case of distilled spirits (other than cordials, liqueurs, flavored neutral spirits, including flavored vodka, and distilled spirits specialty products) manufactured by blending or other processing, if neutral spirits were used in the production of the spirits, the percentage of neutral spirits so used and the name of the commodity from which the neutral spirits were distilled must appear on a label. The statement of percentage and the name of the commodity must be in substantially the following form: “\_\_\_\_% neutral spirits distilled from\_\_\_\_ (insert grain, cane products, fruit, or other commodity as appropriate)”; or “\_\_\_\_ % neutral spirits (vodka) distilled from \_\_\_\_ (insert grain, cane products, fruit, or other commodity as appropriate)”; or “\_\_\_\_ % (grain) (cane products), (fruit) neutral spirits”, or “\_\_\_\_ % grain spirits.”
(b) In the case of gin manufactured by a process of continuous distillation or in the case of neutral spirits, a label on the container must state the name of the commodity from which the gin or neutral spirits were distilled. The statement of the name of the commodity must appear in substantially the following form: “Distilled from grain” or “Distilled from cane products”.
#### § 5.72 Coloring materials.
The words “artificially colored” must appear on a label of any distilled spirits product containing synthetic or natural materials that primarily contribute color, or when information on a label conveys the impression that a color was derived from a source other than the actual source of the color, except that:
(a) If no coloring material other than a color exempt from certification under FDA regulations has been added, a truthful statement of the source of the color may appear in lieu of the words “artificially colored,” for example, “Contains Beta Carotene” or “Colored with beet extract.” See [21 CFR parts 73](/current/title-21/part-73) and [74](/current/title-21/part-74) for the list of such colors under Food and Drug Administration (FDA) regulations;
(b) If no coloring material has been added other than one certified as suitable for use in foods by the FDA, the words “(to be filled in with name of) certified color added” or “Contains Certified Color” may appear in lieu of the words “artificially colored”; and
(c) If no coloring material other than caramel has been added, the words “colored with caramel,” “contains caramel color,” or another statement specifying the use of caramel color, may appear in lieu of the words “artificially colored.” However, no statement of any type is required for the use of caramel color in brandy, rum, or Tequila, or in any type of whisky other than straight whisky if used at not more than 2.5 percent by volume of the finished product. Provided, if any amount of caramel color is used in American single malt whisky, or in straight American single malt whisky, a statement specifying the use of caramel color must appear on the label.
(d) As provided in [§ 5.61](/current/title-27/section-5.61), the use of FD\&C Yellow No. 5, carmine, or cochineal extract must be specifically stated on the label even if the label also contains a phrase such as “contains certified color” or “artificially colored.”
\[T.D. TTB-176, 87 7579, Feb. 9, 2022, as amended by T.D. TTB-199, [89 FR 102735](https://www.federalregister.gov/citation/89-FR-102735), Dec. 24, 2024]
#### § 5.73 Treatment of whisky or brandy with wood.
The words “colored and flavored with wood\_\_\_\_ ” (inserting “chips,” “slabs,” etc., as appropriate) must appear immediately adjacent to, and in the same size of type as, the class and type designation under [subpart I of this part](/current/title-27/part-5/subpart-I) for whisky and brandy treated, in whole or in part, with wood through percolation or otherwise during distillation or storage, other than through contact with an oak barrel. However, the statement specified in this section is not required in the case of brandy treated with an infusion of oak chips in accordance with [§ 5.155(b)(3)(B)](/current/title-27/section-5.155#p-5.155\(b\)\(3\)\(B\)).
#### § 5.74 Statements of age, storage, and percentage.
(a) *General.*
(1) As defined in [§ 5.1](/current/title-27/section-5.1), age is the length of time during which, after distillation and before bottling, the distilled spirits have been stored in oak barrels. For bourbon whisky, rye whisky, wheat whisky, malt whisky, or rye malt whisky, and straight whiskies other than straight corn whisky and straight American single malt whisky, aging must occur in charred new oak barrels.
(2) If an age statement is used, it is permissible to understate the age of a product, but overstatements of age are prohibited. However, the age statement may not conflict with the standard of identity, if aging is required as part of the standard of identity. For example, the standard of identity for straight rye whisky requires that the whisky be aged for a minimum of 2 years, so the age statement “Aged 1 year,” would be prohibited for a product designated as “straight” rye whisky, even if the spirits were actually aged for more than 2 years, because it is inconsistent with the standard of identity.
(3) The age may be stated in years, months, or days.
(b) *Age statements and percentage of type statements for whisky.* For all domestic or foreign whiskies that are aged less than 4 years, including blends containing a whisky that is aged less than 4 years, an age statement and percentage of types of whisky statement is required to appear on a label, unless the whisky is labeled as “bottled in bond” in conformity with [§ 5.88](/current/title-27/section-5.88). For all other whiskies, the statements are optional, but if used, they must conform to the formatting requirements listed below. Moreover, if the bottler chooses to include a statement of age or percentage on the label of a product that is 4 years old or more and that contains neutral spirits, the statement must appear immediately adjacent to the neutral spirits statement required by [§ 5.70](/current/title-27/section-5.70). The following are the allowable formats for the age and percentage statements for whisky:
(1)
(i) In the case of whisky, whether or not mixed or blended but containing no neutral spirits, the age of the youngest whisky in the product. The age statement must appear substantially as follows: “\_\_\_\_ years old”; and
(ii) If a whisky is aged in more than one container, the label may optionally indicate the types of oak containers used.
(2) In the case of whisky containing neutral spirits, whether or not mixed or blended, if any straight whisky or other whisky in the product is less than 4 years old, the percentage by volume of each such whisky and the age of each such whisky (the age of the youngest of the straight whiskies or other whiskies if the product contains two or more of either). The age and percentage statement for a straight whisky and other whisky must appear immediately adjacent to the neutral spirits statement required by [§ 5.70](/current/title-27/section-5.70) and must read substantially as follows:
(i) If the product contains only one straight whisky and no other whisky: “\_\_\_\_ percent straight whisky \_\_\_\_ years old;”
(ii) If the product contains more than one straight whisky but no other whisky: “\_\_\_\_ percent straight whiskies \_\_\_\_ years or more old.” In this case the age blank must state the age of the youngest straight whisky in the product. However, in lieu of the foregoing statement, the following statement may appear on the label: “\_\_\_\_ percent straight whisky \_\_\_\_ years old, \_\_\_\_ percent straight whisky \_\_\_\_ years old, and \_\_\_\_ percent straight whisky \_\_\_\_ years old”;
(iii) If the product contains only one straight whisky and one other whisky: “\_\_\_\_ percent straight whisky \_\_\_\_ years old, \_\_\_\_ percent whisky \_\_\_\_ years old”; or
(iv) If the product contains more than one straight whisky and more than one other whisky: “\_\_\_\_ percent straight whiskies \_\_\_\_ years or more old, \_\_\_\_ percent whiskies \_\_\_\_ years or more old.” In this case, the age blanks must state the age of the youngest straight whisky and the age of the youngest other whisky. However, in lieu of the foregoing statement, the following statement may appear on the label: “\_\_\_\_ percent straight whisky \_\_\_\_ years old, percent straight whisky \_\_\_\_ years old, \_\_\_\_ percent whisky \_\_\_\_ years old, and \_\_\_\_ percent whisky \_\_\_\_ years old”;
(3) In the case of an imported rye whisky, wheat whisky, malt whisky, or rye malt whisky, a label on the product must state each age and percentage in the manner and form that would be required if the whisky had been made in the United States;
(4) In the case of whisky made in the United States and stored in reused oak barrels, other than corn whisky, light whisky, American single malt whisky, and straight American single malt whisky, in lieu of the words “\_\_ years old” specified in [paragraphs (b)(1)](/current/title-27/section-5.74#p-5.74\(b\)\(1\)) and [(2)](/current/title-27/section-5.74#p-5.74\(b\)\(2\)) of this section, the period of storage in the reused oak barrels must appear on the label as follows: “stored \_\_ years in reused cooperage.”
(c) *Statements of age for rum, brandy, and agave spirits.* A statement of age on labels of rums, brandies, and agave spirits is optional, except that, in the case of brandy (other than immature brandies, fruit brandies, marc brandy, pomace brandy, Pisco brandy, Singani brandy, and grappa brandy, which are not customarily stored in oak barrels) not stored in oak barrels for a period of at least two years, a statement of age must appear on the label. Any statement of age authorized or required under this paragraph must appear substantially as follows: “\_\_\_\_ years old,” with the blank to be filled in with the age of the youngest distilled spirits in the product.
(d) *Statement of storage for grain spirits.* In the case of grain spirits, the period of storage in oak barrels may appear on a label immediately adjacent to the percentage statement required under [§ 5.73](/current/title-27/section-5.73), for example: “\_\_\_\_ % grain spirits stored \_\_\_\_ years in oak barrels.”
(e) *Other distilled spirits.*
(1) Statements regarding age or maturity or similar statements or representations on labels for all other spirits, except neutral spirits, are permitted only when the distilled spirits are stored in an oak barrel and, once dumped from the barrel, subjected to no treatment besides mixing with water, filtering, and bottling. If batches are made from barrels of spirits of different ages, the label may only state the age of the youngest spirits.
(2) Statements regarding age or maturity or similar statements of neutral spirits (except for grain spirits as stated in [paragraph (c)](/current/title-27/section-5.74#p-5.74\(c\)) of this section) are prohibited from appearing on any label.
(f) *Other age representations.*
(1) If a representation that is similar to an age or maturity statement permitted under this section appears on a label, a statement of age, in a manner that is conspicuous and in characters at least half the type size of the representation must also appear on each label that carries the representation, except in the following cases:
(i) The use of the word “old” or another word denoting age as part of the brand name of the product is not deemed to be an age representation that requires a statement of age; and
(ii) Labels of whiskies and brandies (other than immature brandies, pomace brandy, marc brandy, Pisco brandy, Singani brandy, and grappa brandy) not required to bear a statement of age, and rum and agave spirits aged for not less than four years, may contain general inconspicuous age, maturity or similar representations without the label having to bear an age statement.
(2) Distillation dates (which may be an exact date or a year) may appear on a label of spirits where the spirits are manufactured solely through distillation. A distillation date may only appear if an optional or mandatory age statement is used on the label and must appear in the same field of vision as the age statement.
\[T.D. TTB-176, 87 7579, Feb. 9, 2022, as amended by T.D. TTB-187 [88 FR 2227](https://www.federalregister.gov/citation/88-FR-2227), Jan. 13, 2023; T.D. TTB-199, [89 FR 102735](https://www.federalregister.gov/citation/89-FR-102735), Dec. 18, 2024]
## Subpart F—Restricted Labeling Statements.
#### § 5.81 General.
(a) *Application.* The labeling practices, statements, and representations in this subpart may be used on distilled spirits labels only when used in compliance with this subpart. In addition, if any of the practices, statements, or representations in this subpart are used elsewhere on containers or in packaging, they must comply with the requirements of this subpart. For purposes of this subpart:
(1) The term “label” includes all labels on distilled spirits containers on which mandatory information may appear, as set forth in [§ 5.61(a)](/current/title-27/section-5.61#p-5.61\(a\)), as well as any other label on the container.
(2) The term “container” includes all parts of the distilled spirits container, including any part of a distilled spirits container on which mandatory information may appear, as well as those parts of the container on which information does not satisfy mandatory labeling requirements, as set forth in [§ 5.61(b)](/current/title-27/section-5.61#p-5.61\(b\)).
(3) The term “packaging” includes any carton, case, carrier, individual covering or other packaging of such containers used for sale at retail, but does not include shipping cartons or cases that are not intended to accompany the container to the consumer.
(b) *Statement or representation.* For purposes of the practices in this subpart, the term “statement or representation” includes any statement, design, device, or representation, and includes pictorial or graphic designs or representations as well as written ones. The term “statement or representation” includes explicit and implicit statements and representations.
Food Allergen Labeling
#### § 5.82 Voluntary disclosure of major food allergens.
(a) *Definitions.* For purposes of this section, the following terms or phrases have the meanings indicated.
(1) *Major food allergen* means any of the following:
(i) Milk, egg, fish (for example, bass, flounder, or cod), Crustacean shellfish (for example, crab, lobster, or shrimp), tree nuts (for example, almonds, pecans, or walnuts), wheat, peanuts, and soybeans; or
(ii) A food ingredient that contains protein derived from a food specified in [paragraph (a)(1)(i)](/current/title-27/section-5.82#p-5.82\(a\)\(1\)\(i\)) of this section, except:
(A) Any highly refined oil derived from a food specified in [paragraph (a)(1)(i)](/current/title-27/section-5.82#p-5.82\(a\)\(1\)\(i\)) of this section and any ingredient derived from such highly refined oil; or
(B) A food ingredient that is exempt from major food allergen labeling requirements pursuant to a petition for exemption approved by the Food and Drug Administration (FDA) under [21 U.S.C. 343(w)(6)](https://www.govinfo.gov/link/uscode/21/343) or pursuant to a notice submitted to FDA under [21 U.S.C. 343(w)(7)](https://www.govinfo.gov/link/uscode/21/343), provided that the food ingredient meets the terms or conditions, if any, specified for that exemption.
(2) *Name of the food source from which each major food allergen is derived* means the name of the food as listed in [paragraph (a)(1)(i)](/current/title-27/section-5.82#p-5.82\(a\)\(1\)\(i\)) of this section, except that:
(i) In the case of a tree nut, it means the name of the specific type of nut (for example, almonds, pecans, or walnuts); and
(ii) In the case of Crustacean shellfish, it means the name of the species of Crustacean shellfish (for example, crab, lobster, or shrimp); and
(iii) The names “egg” and “peanuts,” as well as the names of the different types of tree nuts, may be expressed in either the singular or plural form, and the name “soy,” “soybean,” or “soya” may be used instead of “soybeans.”
(b) *Voluntary labeling standards.* Major food allergens used in the production of a distilled spirits product may, on a voluntary basis, be declared on any label affixed to the container. However, if any one major food allergen is voluntarily declared, all major food allergens used in production of the distilled spirits product, including major food allergens used as fining or processing agents, must be declared, except when covered by a petition for exemption approved by the appropriate TTB officer under [§ 5.83](/current/title-27/section-5.83). The major food allergens declaration must consist of the word “Contains” followed by a colon and the name of the food source from which each major food allergen is derived (for example, “Contains: egg”).
#### § 5.83 Petitions for exemption from major food allergen labeling.
(a) *Submission of petition.* Any person may petition the appropriate TTB officer to exempt a particular product or class of products from the labeling requirements of [§ 5.82](/current/title-27/section-5.82). The burden is on the petitioner to provide scientific evidence (as well as the analytical method used to produce the evidence) that demonstrates that the finished product or class of products, as derived by the method specified in the petition, either:
(1) Does not cause an allergic response that poses a risk to human health; or
(2) Does not contain allergenic protein derived from one of the foods identified in [§ 5.82(a)(1)(i)](/current/title-27/section-5.82#p-5.82\(a\)\(1\)\(i\)), even though a major food allergen was used in production.
(b) *Decision on petition.* TTB will approve or deny a petition for exemption submitted under [paragraph (a)](/current/title-27/section-5.83#p-5.83\(a\)) of this section in writing within 180 days of receipt of the petition. If TTB does not provide a written response to the petitioner within that 180-day period, the petition will be deemed denied, unless an extension of time for decision is mutually agreed upon by the appropriate TTB officer and the petitioner. TTB may confer with the Food and Drug Administration (FDA) on petitions for exemption, as appropriate and as FDA resources permit. TTB may require the submission of product samples and other additional information in support of a petition; however, unless required by TTB, the submission of samples or additional information by the petitioner after submission of the petition will be treated as the withdrawal of the initial petition and the submission of a new petition. An approval or denial under this section will constitute final agency action.
(c) *Resubmission of a petition.* After a petition for exemption is denied under this section, the petitioner may resubmit the petition along with supporting materials for reconsideration at any time. TTB will treat this submission as a new petition.
(d) *Availability of information* —
(1) *General.* TTB will promptly post to its website (*[https://www.ttb.gov](https://www.ttb.gov)*) all petitions received under this section, as well as TTB's responses to those petitions. Any information submitted in support of the petition that is not posted to the TTB website will be available to the public pursuant to the Freedom of Information Act, at [5 U.S.C. 552](https://www.govinfo.gov/link/uscode/5/552), except where a request for confidential treatment is granted under [paragraph (d)(2)](/current/title-27/section-5.83#p-5.83\(d\)\(2\)) of this section.
(2) *Requests for confidential treatment of business information.* A person who provides trade secrets or other commercial or financial information in connection with a petition for exemption under this section may request that TTB give confidential treatment to that information. A failure to request confidential treatment at the time the information in question is submitted to TTB will constitute a waiver of confidential treatment. A request for confidential treatment of information under this section must conform to the following standards:
(i) The request must be in writing;
(ii) The request must clearly identify the information to be kept confidential;
(iii) The request must relate to information that constitutes trade secrets or other confidential commercial or financial information regarding the business transactions of an interested person, the disclosure of which would cause substantial harm to the competitive position of that person;
(iv) The request must set forth the reasons why the information should not be disclosed, including the reasons why the disclosure of the information would prejudice the competitive position of the interested person; and
(v) The request must be supported by a signed statement by the interested person, or by an authorized officer or employee of that person, certifying that the information in question is a trade secret or other confidential commercial or financial information and that the information is not already in the public domain.
Production Claims
#### § 5.84 Use of the term “organic.”
Use of the term “organic” is permitted if any such use complies with United States Department of Agriculture (USDA) National Organic Program rules ([7 CFR part 205](/current/title-7/part-205)), as interpreted by the USDA.
#### § 5.85 \[Reserved]
#### § 5.86 \[Reserved]
Other Label Terms
#### § 5.87 “Barrel Proof” and similar terms.
(a) The term “barrel proof” or “cask strength” may be used to refer to distilled spirits stored in wood barrels only when the bottling proof is not more than two degrees lower than the proof of the spirits when the spirits are dumped from the barrels.
(b) The term “original proof,” “original barrel proof,” “original cask strength,” or “entry proof” may be used only if the distilled spirits were stored in wooden barrels and the proof of the spirits entered into the barrel and the proof of the bottled spirits are the same.
#### § 5.88 Bottled in bond.
(a) The term “bond,” “bonded,” “bottled in bond,” or “aged in bond,” or phrases containing these or synonymous terms, may be used (including as part of the brand name) only if the distilled spirits are:
(1) Composed of the same kind (type, if one is applicable to the spirits, otherwise class) of spirits distilled from the same class of materials;
(2) Distilled in the same distilling season (as defined in [§ 5.1](/current/title-27/section-5.1)) by the same distiller at the same distillery.
(3) Stored for at least 4 years in wooden containers wherein the spirits have been in contact with the wood surface, except for vodka, which must be stored for at least 4 years in wooden containers coated or lined with paraffin or other substance which will preclude contact of the spirits with the wood surface, and except for gin, which must be stored in paraffin-lined or unlined wooden containers for at least 4 years;
(4) Unaltered from their original condition or character by the addition or subtraction of any substance other than by filtration, chill proofing, or other physical treatments (which do not involve the addition of any substance which will remain in the finished product or result in a change in class or type);
(5) Reduced in proof by the addition of only pure water to 50 percent alcohol by volume (100 degrees of proof); and
(6) Bottled at 50 percent alcohol by volume (100 degrees of proof).
(b) Imported spirits labeled as “bottled in bond” or other synonymous term described above must be manufactured in accordance with [paragraphs (a)(1)](/current/title-27/section-5.88#p-5.88\(a\)\(1\)) through [(6)](/current/title-27/section-5.88#p-5.88\(a\)\(6\)) of this section and may only be so labeled if the laws and regulations of the country in which the spirits are manufactured authorize the bottling of spirits in bond and require or specifically authorize such spirits to be so labeled. The “bottled in bond” or synonymous statement must be immediately followed, in the same font and type size, by the name of the country under whose laws and regulations such distilled spirits were so bottled.
(c) Domestically manufactured spirits labeled as “bottled in bond” or with some other synonymous statement must bear the real name of the distillery or the trade name under which the distiller distilled and warehoused the spirits, and the number of the distilled spirits plant in which distilled, and the number of the distilled spirits plant in which bottled. The label may also bear the name or trade name of the bottler.
#### § 5.89 Multiple distillation claims.
(a) Truthful statements about the number of distillations, such as “double distilled,” “distilled three times,” or similar terms to convey multiple distillations, may be used if they are truthful statements of fact. For the purposes of this section only, the term “distillation” means a single run through a pot still or a single run through a column of a column (reflux) still. For example, if a column still has three separate columns, one complete additional run through the system would constitute three additional distillations.
(b) The number of distillations may be understated but may not be overstated.
#### § 5.90 Terms related to Scotland.
(a) The words “Scotch,” “Scots,” “Highland,” or “Highlands,” and similar words connoting, indicating, or commonly associated with Scotland, may be used to designate only distilled spirits wholly manufactured in Scotland, except that the term “Scotch whisky” may appear in the designation for a flavored spirit (“Flavored Scotch Whisky”) or in a truthful statement of composition (“Scotch whisky with natural flavors”) where the base distilled spirit meets the requirements for a Scotch whisky designation, regardless of where the finished product is manufactured.
(b) In accordance with [§ 5.127](/current/title-27/section-5.127), statements relating to government supervision may appear on Scotch whisky containers only if such labeling statements are required or specifically authorized by the applicable regulations of the United Kingdom.
#### § 5.91 Use of the term “pure.”
Distilled spirits labels, containers, or packaging may not bear the word “pure” unless it:
(a) Refers to a particular ingredient used in the production of the distilled spirits, and is a truthful representation about that ingredient;
(b) Is part of the bona fide name of a permittee or retailer for which the distilled spirits are bottled; or
(c) Is part of the bona fide name of the permittee that bottled the distilled spirits.
## Subpart G—Prohibited Labeling Practices
#### § 5.101 General.
(a) *Application.* The prohibitions set forth in this subpart apply to any distilled spirits label, container, or packaging. For purposes of this subpart:
(1) The term “label” includes all labels on distilled spirits containers on which mandatory information may appear, as set forth in [§ 5.61(a)](/current/title-27/section-5.61#p-5.61\(a\)), as well as any other label on the container;
(2) The term “container” includes all parts of the distilled spirits container, including any part of a distilled spirits container on which mandatory information may appear, as well as those parts of the container on which information does not satisfy mandatory labeling requirements, as set forth in [§ 5.61(b)](/current/title-27/section-5.61#p-5.61\(b\)); and
(3) The term “packaging” includes any carton, case, carrier, individual covering or other packaging of such containers used for sale at retail, but does not include shipping cartons or cases that are not intended to accompany the container to the consumer.
(b) *Statement or representation.* For purposes of the practices in this subpart, the term “statement or representation” includes any statement, design, device, or representation, and includes pictorial or graphic designs or representations as well as written ones. The term “statement or representation” includes explicit and implicit statements and representations.
#### § 5.102 False or untrue statements.
Distilled spirits labels, containers, or packaging may not contain any statement or representation that is false or untrue in any particular.
#### § 5.103 Obscene or indecent depictions.
Distilled spirits labels, containers, or packaging may not contain any statement, design, device, picture, or representation that is obscene or indecent.
## Subpart H—Labeling Practices That Are Prohibited If They Are Misleading
#### § 5.121 General.
(a) *Application.* The labeling practices that are prohibited if misleading set forth in this subpart apply to any distilled spirits label, container, or packaging. For purposes of this subpart:
(1) The term “label” includes all labels on distilled spirits containers on which mandatory information may appear, as set forth in [§ 5.61(a)](/current/title-27/section-5.61#p-5.61\(a\)), as well as any other label on the container;
(2) The term “container” includes all parts of the distilled spirits container, including any part of a distilled spirits container on which mandatory information may appear, as well as those parts of the container on which information does not satisfy mandatory labeling requirements, as set forth in [§ 5.61(b)](/current/title-27/section-5.61#p-5.61\(b\)); and
(3) The term “packaging” includes any carton, case, carrier, individual covering or other packaging of such containers used for sale at retail, but does not include shipping cartons or cases that are not intended to accompany the container to the consumer.
(b) *Statement or representation.* For purposes of this subpart, the term “statement or representation” includes any statement, design, device, or representation, and includes pictorial or graphic designs or representations as well as written ones. The term “statement or representation” includes explicit and implicit statements and representations.
#### § 5.122 Misleading statements or representations.
(a) *General prohibition.* Distilled spirits labels, containers, or packaging may not contain any statement or representation, irrespective of falsity, that is misleading to consumers as to the age, origin, identity, or other characteristics of the distilled spirits, or with regard to any other material factor.
(b) *Ways in which statements or representations may be found to be misleading.*
(1) A statement or representation is prohibited, irrespective of falsity, if it directly creates a misleading impression, or if it does so indirectly through ambiguity, omission, inference, or by the addition of irrelevant, scientific, or technical matter. For example, an otherwise truthful statement may be misleading because of the omission of material information, the disclosure of which is necessary to prevent the statement from being misleading.
(2) All claims, whether implicit or explicit, must have a reasonable basis in fact. Any claim on distilled spirits labels, containers, or packaging that does not have a reasonable basis in fact, or cannot be adequately substantiated upon the request of the appropriate TTB officer, is considered misleading.
#### § 5.123 Guarantees.
Distilled spirits labels, containers, or packaging may not contain any statement relating to guarantees if the appropriate TTB officer finds it is likely to mislead the consumer. However, money-back guarantees are not prohibited.
#### § 5.124 Disparaging statements.
(a) *General.* Distilled spirits labels, containers, or packaging may not contain any false or misleading statement that explicitly or implicitly disparages a competitor's product.
(b) *Truthful and accurate comparisons.* This section does not prevent truthful and accurate comparisons between products (such as, “Our liqueur contains more strawberries than Brand X”) or statements of opinion (such as, “We think our rum tastes better than any other distilled spirits on the market”).
#### § 5.125 Tests or analyses.
Distilled spirits labels, containers, or packaging may not contain any statement or representation of or relating to analyses, standards, or tests, whether or not it is true, that is likely to mislead the consumer. An example of such a misleading statement is “tested and approved by our research laboratories” if the testing and approval does not in fact have any significance.
#### § 5.126 Depictions of government symbols.
*Representations of the armed forces and flags.* Distilled spirits labels, containers, or packaging may not show an image of any government's flag or any representation related to the armed forces of the United States if the representation, standing alone or considered together with any additional language or symbols on the label, creates a false or misleading impression that the product was endorsed by, made by, used by, or made under the supervision of, the government represented by that flag or by the armed forces of the United States. This section does not prohibit the use of a flag as part of a claim of American origin or another country of origin.
#### §§ 5.127-5.128 \[Reserved]
#### § 5.129 Health-related statements.
(a) *Definitions.* When used in this section, the following terms have the meaning indicated:
(1) *Health-related statement* means any statement related to health (other than the warning statement required under [part 16 of this chapter](/current/title-27/part-16)) and includes statements of a curative or therapeutic nature that, expressly or by implication, suggest a relationship between the consumption of alcohol, distilled spirits, or any substance found within the distilled spirits product, and health benefits or effects on health. The term includes both specific health claims and general references to alleged health benefits or effects on health associated with the consumption of alcohol, distilled spirits, or any substance found within the distilled spirits, as well as health-related directional statements. The term also includes statements and claims that imply that a physical or psychological sensation results from consuming the distilled spirits, as well as statements and claims of nutritional value (for example, statements of vitamin content).
(2) *Specific health claim* means a type of health-related statement that, expressly or by implication, characterizes the relationship of distilled spirits, alcohol, or any substance found within the distilled spirits, to a disease or health-related condition. Implied specific health claims include statements, symbols, vignettes, or other forms of communication that suggest, within the context in which they are presented, that a relationship exists between alcohol, distilled spirits, or any substance found within the distilled spirits, and a disease or health-related condition.
(3) *Health-related directional statement* means a type of health-related statement that directs or refers consumers to a third party or other source for information regarding the effects on health of distilled spirits or alcohol consumption.
(b) *Rules for labeling* —
(1) *Health-related statements.* In general, distilled spirits may not contain any health-related statement that is untrue in any particular or tends to create a misleading impression as to the effects on health of alcohol consumption. TTB will evaluate such statements on a case-by-case basis and may require as part of the health-related statement a disclaimer or some other qualifying statement to dispel any misleading impression conveyed by the health-related statement.
(2) *Specific health claims.*
(i) TTB will consult with the Food and Drug Administration (FDA), as needed, on the use of a specific health claim on the distilled spirits. If FDA determines that the use of such a labeling claim is a drug claim that is not in compliance with the requirements of the Federal Food, Drug, and Cosmetic Act, TTB will not approve the use of that specific health claim on the distilled spirits.
(ii) TTB will approve the use of a specific health claim on a distilled spirits label only if the claim is truthful and adequately substantiated by scientific or medical evidence; is sufficiently detailed and qualified with respect to the categories of individuals to whom the claim applies; adequately discloses the health risks associated with both moderate and heavier levels of alcohol consumption; and outlines the categories of individuals for whom any levels of alcohol consumption may cause health risks. This information must appear as part of the specific health claim.
(3) *Health-related directional statements.* A health-related directional statement is presumed misleading unless it:
(i) Directs consumers in a neutral or other non-misleading manner to a third party or other source for balanced information regarding the effects on health of distilled spirits or alcohol consumption; and
(ii)
(A) Includes as part of the health-related directional statement the following disclaimer: “This statement should not encourage you to drink or to increase your alcohol consumption for health reasons;” or
(B) Includes as part of the health-related directional statement some other qualifying statement that the appropriate TTB officer finds is sufficient to dispel any misleading impression conveyed by the health-related directional statement.
#### § 5.130 Appearance of endorsement.
(a) *General.* Distilled spirits labels, containers, or packaging may not include the name, or the simulation or abbreviation of the name, of any living individual of public prominence, or an existing private or public organization, or any graphic, pictorial, or emblematic representation of the individual or organization, if its use is likely to lead a consumer to falsely believe that the product has been endorsed, made, or used by, or produced for, or under the supervision of, or in accordance with the specifications of, such individual or organization. This section does not prohibit the use of such names where the individual or organization has provided authorization for their use.
(b) *Disclaimers.* Statements or other representations do not violate this section if, taken as a whole, they create no misleading impression as to an implied endorsement either because of the context in which they are presented or because of the use of an adequate disclaimer.
(c) *Exception.* This section does not apply to the use of the name of any person engaged in business as a distiller, rectifier (processor), blender, or other producer, or as an importer, wholesaler, retailer, bottler, or warehouseman of distilled spirits. This section also does not apply to the use by any person of a trade or brand name that is the name of any living individual of public prominence or existing private or public organization, provided such trade or brand name was used by the industry member or its predecessors in interest prior to August 29, 1935.
## Subpart I—Standards of Identity for Distilled Spirits
#### § 5.141 The standards of identity in general.
(a) *General.* Distilled spirits are divided, for labeling purposes, into classes, which are further divided into specific types. As set forth in [§ 5.63](/current/title-27/section-5.63), a distilled spirits product label must bear the appropriate class, type or other designation. The standards that define the classes and types are known as the “standards of identity.” The classes and types of distilled spirits set forth in this subpart apply only to distilled spirits for beverage or other nonindustrial purposes.
(b) *Rules.*
(1) Unless otherwise specified, when a standard of identity states that a mash is of a particular ingredient (such as “fermented mash of grain”), the mash must be made entirely of that ingredient without the addition of other fermentable ingredients.
(2) Some distilled spirits products may conform to the standards of identity of more than one class. Such products may be designated with any single class designation defined in this subpart to which the products conform.
(c) *Designating with both class and type.* If a product is designated with both the class and the type, the type designation must be as conspicuous as the class designation, and must appear in the same field of vision.
(d) *Words in a designation.* All words in a designation must be similarly conspicuous and must appear together.
#### § 5.142 Neutral spirits or alcohol.
(a) *The class neutral spirits.* “Neutral spirits” or “alcohol” are distilled spirits distilled from any suitable material at or above 95 percent alcohol by volume (190° proof), and, if bottled, bottled at not less than 40 percent alcohol by volume (80° proof). Neutral spirits other than the type “grain spirits” may be designated as “neutral spirits” or “alcohol” on a label. Neutral spirits (other than the type “grain spirits”) may not be aged in wood barrels at any time.
(b) *Types.* The following chart lists the types of neutral spirits and the rules that apply to the type designation.
| Type designation | Standards |
| ----------------- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| (1) Vodka | Neutral spirits which may be treated with up to two grams per liter of sugar and up to one gram per liter of citric acid. Products to be labeled as vodka may not be aged or stored in wood barrels at any time except when stored in paraffin-lined wood barrels and labeled as bottled in bond pursuant to [§ 5.88](/current/title-27/section-5.88). Vodka treated and filtered with not less than one ounce of activated carbon or activated charcoal per 100 wine gallons of spirits may be labeled as “charcoal filtered.” Addition of any other flavoring or blending materials changes the classification to flavored vodka or to a distilled spirits specialty product, as appropriate. Vodka must be designated on the label as “neutral spirits,” “alcohol,” or “vodka”. |
| (2) Grain spirits | Neutral spirits distilled from a fermented mash of grain and stored in oak barrels. “Grain spirits” must be designated as such on the label. Grain spirits may not be designated as “neutral spirits” or “alcohol” on the label. |
#### § 5.143 Whisky.
(a) *The class whisky.* “Whisky” or “whiskey” is distilled spirits that is an alcoholic distillate from a fermented mash of any grain distilled at less than 95 percent alcohol by volume (190° proof) having the taste, aroma, and characteristics generally attributed to whisky, stored in oak barrels (except that corn whisky need not be so stored), and bottled at not less than 40 percent alcohol by volume (80° proof), and also includes mixtures of such distillates for which no specific standards of identity are prescribed.
(b) *Label designations.* The word whisky may be spelled as either “whisky” or “whiskey”. The place, State, or region where the whisky was distilled may appear as part of the designation on the label if the distillation and any required aging took place in that location (*e.g.,* “New York Bourbon Whisky” must be distilled and aged in the State of New York); however, blending and bottling need not have taken place in the same place, State, or region. However, if any whisky is made partially from whisky distilled in a country other than that indicated by the type designation, the label must indicate the percentage of such whisky and the country where that whisky was distilled. Additionally, the label of whisky that does not meet one of the standards for specific types of whisky and that is comprised of components distilled in more than one country must contain a statement of composition indicating the country of origin of each component (such as “Whisky—50% from Japan, 50% from the United States”). The word “bourbon” may not be used to describe any whisky or whisky-based distilled spirits not distilled and aged in the United States. The whiskies defined in [paragraphs (c)(2)](/current/title-27/section-5.143#p-5.143\(c\)\(2\)) through [(6)](/current/title-27/section-5.143#p-5.143\(c\)\(6\)) and [(10)](/current/title-27/section-5.143#p-5.143\(c\)\(10\)) through [(14)](/current/title-27/section-5.143#p-5.143\(c\)\(14\)) of this section are distinctive products of the United States and must have the country of origin stated immediately adjacent to the type designation if it is distilled outside of the United States, or the whisky designation must be proceeded by the term “American type” if the country of origin appears elsewhere on the label. For example, “Brazilian Corn Whisky,” “Rye Whisky distilled in Sweden,” and “Blended Whisky—Product of Japan” are statements that meet this country of origin requirement. “Light whisky”, “Blended light whisky”, and “Whisky distilled from bourbon (rye, wheat, malt, rye malt, or other named grain) mash” may only be produced in the United States.
(c) *Types of whisky.* The following tables set out the designations for whisky. Table 1 sets forth the standards for whisky that are defined based on production, storage, and processing standards, while Table 2 sets forth rules for the types of whisky that are defined as distinctive products of certain foreign countries. For the whiskies listed in Table 1, a domestic whisky may be labeled with the designation listed, when it complies with the production standards in the subsequent columns. The “source” column indicates the source of the grain mash used to make the whisky. The “distillation proof” indicates the allowable distillation proof for that type. The “storage” column indicates the type of packages (barrels) in which the spirits must be stored and limits for the proof of the spirits when entering the packages. The “neutral spirits permitted” column indicates whether neutral spirits may be used in the product in their original state (and not as vehicles for flavoring materials), and if so, how much may be used. The “harmless coloring, flavoring, blending materials permitted” column indicates whether harmless coloring, flavoring, or blending materials, other than neutral spirits in their original form, described in [§ 5.142](/current/title-27/section-5.142), may be used in the product. The use of the word “straight” is a further designation of a type, and is optional.
Table 1 to Paragraph (c)—Types of Whisky and Production, Storage, and Processing Standards
| Type | Source | Distillation proof | Storage | Neutral spirits permitted | Allowable coloring, flavoring, blending materials permitted |
| --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------ | -------------------------------------------------------------------------------------------------------------------------------------- | -------------------------------------- | ------------------------------------------------------------------- |
| (1) Whisky, which may be used as the designation for any of the type designations under the class “whisky,” or may be used as the designation if the whisky does not meet one of the type designations but satisfies the class designation | Fermented grain mash | Less than 190° | Oak barrels with no minimum time requirement | No | Yes. |
| (2) Bourbon Whisky, Rye Whisky, Wheat Whisky, Malt Whisky, Rye Malt Whisky, or \[name of other grain] Whisky | Fermented mash of not less than 51%, respectively: Corn, Rye, Wheat, Malted Barley, Malted Rye Grain, \[Other grain] | 160° or less | Charred new oak barrels at 125° or less | No | Yes, except for bourbon whisky. |
| (3) Corn Whisky. (Whisky conforming to this standard must be designated as “corn whisky.”) | Fermented mash of not less than 80% corn | 160° or less | Required only if age is claimed on the label. If stored, must be stored at 125° or less in used or uncharred new oak barrels | No | Yes. |
| (4) Straight Whisky | Fermented mash of less than 51% corn, rye, wheat, malted barley, malted rye \[or other] grain. (Includes mixtures of straight whiskies made in the same state.) | 160° or less | Charred new oak barrels at 125° or less for a minimum of 2 years | No | No. |
| (5) Straight Bourbon Whisky, Straight Rye Whisky, Straight Wheat Whisky, Straight Malt Whisky, or Straight Rye Malt Whisky | Fermented mash of not less than 51%, respectively: Corn, Rye, Wheat, Malted Barley, Malted Rye Grain | 160° or less | Charred new oak barrels at 125° or less for a minimum of 2 years | No | No. |
| (6) Straight Corn Whisky | Fermented mash of not less than 80% corn | 160° or less | 125° or less in used or uncharred new oak barrels for a minimum of 2 years | No | No. |
| (7) Whisky distilled from Bourbon/Rye/Wheat/Malt/Rye Malt/\[Name of other grain] mash | Fermented mash of not less than 51%, respectively: Corn, Rye, Wheat, Malted Barley, Malted Rye Grain, \[Other grain] | 160° or less | Used oak barrels | No | Yes. |
| (8) Light Whisky | Fermented grain mash | More than 160° | Used or uncharred new oak barrels | No | Yes. |
| (9) Blended Light Whisky (Light Whisky—a blend) | Light whisky blended with less than 20% Straight Whisky on a proof gallon basis | Blend | Will contain a blend | No | Yes. |
| (10) Blended Whisky (Whisky—a blend) | At least 20% Straight Whisky on a proof gallon basis plus Whisky or Neutral Spirits alone or in combination | 160° or less | Will contain a blend of spirits, some stored and some not stored | Maximum of 80% on a proof gallon basis | Yes. |
| (11) Blended Bourbon Whisky, Blended Rye Whisky, Blended Wheat Whisky, Blended Malt Whisky, Blended Rye Malt Whisky, Blended Corn Whisky (or Whisky—a blend) | At least 51% on a proof gallon basis of: Straight Bourbon, Rye, Wheat, Malt, Rye Malt, or Corn Whisky; the rest comprised of Whisky or Neutral Spirits alone or in combination | Blend | Will contain a blend of spirits, some stored and some not stored | Maximum of 49% on a proof gallon basis | Yes. |
| (12) Blend of Straight Whiskies (Blended Straight Whiskies) | Mixture of Straight Whiskies that does not conform to “Straight Whisky” | 160° or less | Will contain a blend of spirits which were aged at least 2 years | No, except as part of a flavor | Yes. |
| (13) Blended Straight Bourbon Whiskies, Blended Straight Rye Whiskies, Blended Straight Wheat Whiskies, Blended Straight Malt Whiskies, Blended Straight Rye Malt Whiskies, Blended Straight Corn Whiskies, (or a blend of straight whiskies) | Mixture of Straight Whiskies of the same named type produced in different states or produced in the same state but contains coloring, flavoring or blending material | 160° or less | Will contain a blend of spirits which were aged at least 2 years | No, except as part of a flavor | Yes. |
| (14) Spirit Whisky | Mixture of Neutral Spirits and 5% or more on a proof gallon basis of: Whisky or Straight Whisky or a combination of both. The Straight Whisky component must be less than 20% on a proof gallon basis | Blend | Will contain a blend of spirits, some stored and some not stored | Maximum of 95% on a proof gallon basis | Yes. |
| (15) American single malt whisky | Fermented mash of 100 percent malted barley, produced in the United States | 160 or less, distilled at the same distillery in the United States | Used, charred new, or uncharred new oak barrels; 700-liter maximum capacity; stored only in the United States | No | No, except for caramel coloring and only if disclosed on the label. |
| (16) Straight American single malt whisky | Fermented mash of 100 percent malted barley, produced in the United States | 160 or less, distilled at the same distillery in the United States | Used, charred new, or uncharred new oak barrels for a minimum of 2 years; 700-liter maximum capacity; stored only in the United States | No | No, except for caramel coloring and only if disclosed on the label. |
Table 2 to Paragraph (c)—Types of Whisky That Are Distinctive Products
\| (17) Scotch whisky | Whisky which is a distinctive product of Scotland, manufactured in Scotland in compliance with the laws of the United Kingdom regulating the manufacture of Scotch whisky for consumption in the United Kingdom: *Provided,* That if such product is a mixture of whiskies, such mixture is “blended Scotch whisky” or “Scotch whisky—a blend”. |
\| (18) Irish whisky | Whisky which is a distinctive product of Ireland, manufactured either in the Republic of Ireland or in Northern Ireland, in compliance with their laws regulating the manufacture of Irish whisky for home consumption: *Provided,* That if such product is a mixture of whiskies, such mixture is “blended Irish whisky” or “Irish whisky—a blend”. |
\| (19) Canadian whisky | Whisky which is a distinctive product of Canada, manufactured in Canada in compliance with the laws of Canada regulating the manufacture of Canadian whisky for consumption in Canada: *Provided,* That if such product is a mixture of whiskies, such mixture is “blended Canadian whisky” or “Canadian whisky—a blend”. |
(d) *Transition period.* A label with the designation “American single malt whisky” or “straight American single malt whisky” may be used on distilled spirits bottled before January 19, 2030, if the distilled spirits conform to the applicable standards set forth in this part in effect prior to January 19, 2025.
\[T.D. TTB-176, 87 7579, Feb. 9, 2022, as amended by T.D. TTB-199, [89 FR 102735](https://www.federalregister.gov/citation/89-FR-102735), Dec. 18, 2024]
#### § 5.144 Gin.
(a) *The class gin.* “Gin” is distilled spirits made by original distillation from mash, or by redistillation of distilled spirits, or by mixing neutral spirits, with or over juniper berries and, optionally, with or over other aromatics, or with or over extracts derived from infusions, percolations, or maceration of such materials, and includes mixtures of gin and neutral spirits. It must derive its main characteristic flavor from juniper berries and be bottled at not less than 40 percent alcohol by volume (80° proof). Gin may be aged in oak containers.
(b) *Distilled gin.* Gin made exclusively by original distillation or by redistillation may be further designated as “distilled,” “Dry,” “London,” “Old Tom” or some combination of these four terms.
#### § 5.145 Brandy.
(a) *The class brandy.* “Brandy” is spirits that are distilled from the fermented juice, mash, or wine of fruit, or from the residue thereof, distilled at less than 95 percent alcohol by volume (190° proof) having the taste, aroma, and characteristics generally attributed to the product, and bottled at not less than 40 percent alcohol by volume (80° proof).
(b) *Label designations.* Brandy conforming to one of the type designations must be designated with the type name or specific designation specified in the requirements for that type. The term “brandy” without further qualification (such as “peach” or “marc”) may only be used as a designation on labels of grape brandy as defined in [paragraph (c)(1)](/current/title-27/section-5.145#p-5.145\(c\)\(1\)) of this section. Brandy conforming to one of the type designations defined in [paragraphs (c)(1)](/current/title-27/section-5.145#p-5.145\(c\)\(1\)) through [(13)](/current/title-27/section-5.145#p-5.145\(c\)\(13\)) of this section must be designated on the label with the type name unless a specific designation is included in the requirements for that type. Brandy, or mixtures thereof, not conforming to any of the types defined in this section must be designated on the label as “brandy” followed immediately by a truthful and adequate statement of composition.
(c) *Types.* [Paragraphs (c)(1)](/current/title-27/section-5.145#p-5.145\(c\)\(1\)) through [(13)](/current/title-27/section-5.145#p-5.145\(c\)\(13\)) of this section set out the types of brandy and the standards for each type.
| Type | Standards |
| ------------------------------------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| (1) Fruit brandy | Brandy distilled solely from the fermented juice or mash of whole, sound, ripe fruit, or from standard grape or other fruit wine, with or without the addition of not more than 20 percent by weight of the pomace of such juice or wine, or 30 percent by volume of the lees of such wine, or both (calculated prior to the addition of water to facilitate fermentation or distillation). Fruit brandy includes mixtures of such brandy with not more than 30 percent (calculated on a proof gallon basis) of lees brandy. Fruit brandy derived solely from grapes and stored for at least 2 years in oak containers must be designated “grape brandy” or “brandy.” Grape brandy that has been stored in oak barrels for fewer than 2 years must be designated “immature grape brandy” or “immature brandy.” Fruit brandy, other than grape brandy, derived from one variety of fruit, must be designated by the word “brandy” qualified by the name of such fruit (for example, “peach brandy”), except that “apple brandy” may be designated “applejack,” “plum brandy” may be designated “Slivovitz,” and “cherry brandy” may be designated “Kirschwasser.” Fruit brandy derived from more than one variety of fruit must be designated as “fruit brandy” qualified by a truthful and adequate statement of composition, for example “Fruit brandy distilled from strawberries and blueberries.” |
| (2) Cognac or “Cognac (grape) brandy” | Grape brandy distilled exclusively in the Cognac region of France, which is entitled to be so designated by the laws and regulations of the French government. |
| (3) Armagnac | Grape brandy distilled exclusively in France in accordance with the laws and regulations of France regulating the manufacture of Armagnac for consumption in France. |
| (4) Brandy de Jerez | Grape brandy distilled exclusively in Spain in accordance with the laws and regulations of Spain regulating the manufacture of Brandy de Jerez for consumption in Spain. |
| (5) Calvados | Apple brandy distilled exclusively in France in accordance with the laws and regulations of France regulating the manufacture of Calvados for consumption in France. |
| (6) Pisco | Grape brandy distilled in Peru or Chile in accordance with the laws and regulations of the country of manufacture of Pisco for consumption in the country of manufacture, including: (i) “Pisco Perú” (or “Pisco Peru”), which is Pisco manufactured in Peru in accordance with the laws and regulations of Peru governing the manufacture of Pisco for consumption in that country; and (ii) “Pisco Chileno” (or “Chilean Pisco”), which is Pisco manufactured in Chile in accordance with the laws and regulations of Chile governing the manufacture of Pisco for consumption in that country. |
| (7) Singani | Brandy derived from grape/s that is manufactured in Bolivia in accordance with the laws and regulations of Bolivia governing the manufacture of Singani for consumption in that country. |
| (8) Dried fruit brandy | Brandy that conforms to the standard for fruit brandy except that it has been derived from sound, dried fruit, or from the standard wine of such fruit. Brandy derived from raisins, or from raisin wine, must be designated “raisin brandy.” Dried fruit brandy, other than raisin brandy, must be designated by the word “brandy” qualified by the name of the dried fruit(s) from which made preceded by the word “dried”, for example, “dried apricot brandy.” |
| (9) Lees brandy | Brandy distilled from the lees of standard grape or other fruit wine, and such brandy derived solely from grapes must be designated “grape lees brandy” or “lees brandy.” Lees brandy derived from fruit other than grapes must be designated as “lees brandy,” qualified by the name of the fruit from which such lees are derived, for example, “cherry lees brandy.” |
| (10) Pomace brandy or Marc brandy | Brandy distilled from the skin and pulp of sound, ripe grapes or other fruit, after the withdrawal of the juice or wine therefrom. Such brandy derived solely from grape components must be designated “grape pomace brandy,” “grape marc brandy”, “pomace brandy,” or “mark brandy.” Grape pomace brandy may alternatively be designated as “grappa” or “grappa brandy.” Pomace or marc brandy derived from fruit other than grapes must be designated as “pomace brandy” or “marc brandy” qualified by the name of the fruit from which derived, for example, “apple pomace brandy” or “pear marc brandy.” |
| (11) Residue brandy | Brandy distilled wholly or in part from the fermented residue of fruit or wine. Such brandy derived solely from grapes must be designated “grape residue brandy,” or “residue brandy.” Residue brandy, derived from fruit other than grapes, must be designated as “residue brandy” qualified by the name of the fruit from which derived, for example, “orange residue brandy.” Brandy distilled wholly or in part from residue materials which conforms to any of the standards set forth in [paragraphs (b)(1)](/current/title-27/section-5.145#p-5.145\(b\)\(1\)) and [(7)](/current/title-27/section-5.145#p-5.145\(b\)\(7\)) through [(9)](/current/title-27/section-5.145#p-5.145\(b\)\(9\)) of this section may, regardless of such fact, be designated “residue brandy”, but the use of such designation shall be conclusive, precluding any later change of designation. |
| (12) Neutral brandy | Any type of brandy distilled at more than 85% alcohol by volume (170° proof) but less than 95% alcohol by volume. Such brandy derived solely from grapes must be designated “grape neutral brandy,” or “neutral brandy.” Other neutral brandies, must be designated in accordance with the rules for those types of brandy, and be qualified by the word “neutral”; for example, “neutral citrus residue brandy”. |
| (13) Substandard brandy | Any brandy: (i) Distilled from fermented juice, mash, or wine having a volatile acidity, calculated as acetic acid and exclusive of sulfur dioxide, in excess of 0.20 gram per 100 cubic centimeters (20 degrees Celsius); measurements of volatile acidity must be calculated exclusive of water added to facilitate distillation. (ii) Distilled from unsound, moldy, diseased, or decomposed juice, mash, wine, lees, pomace, or residue, or which shows in the finished product any taste, aroma, or characteristic associated with products distilled from such material. (iii) Such brandy derived solely from grapes must be designated “substandard grape brandy,” or “substandard brandy.” Other substandard brandies must be designated in accordance with the rules for those types of brandy, and be qualified by the word “substandard”; for example, “substandard fig brandy”. |
\[T.D. TTB-176, 87 7579, Feb. 9, 2022, as amended by T.D. TTB-187, [88 FR 2228](https://www.federalregister.gov/citation/88-FR-2228), Jan. 13, 2023]
#### § 5.146 Blended applejack.
(a) *The class blended applejack.* “Blended applejack” is a mixture containing at least 20 percent on a proof gallon basis of apple brandy (applejack) that has been stored in oak barrels for not less than 2 years, and not more than 80 percent of neutral spirits on a proof gallon basis. Blended applejack must be bottled at not less than 40 percent alcohol by volume (80° proof).
(b) *Label designation.* The label designation for blended applejack may be “blended applejack” or “applejack-a blend.”
#### § 5.147 Rum.
(a) *The class rum.* “Rum” is distilled spirits that is distilled from the fermented juice of sugar cane, sugar cane syrup, sugar cane molasses, or other sugar cane by-products at less than 95 percent alcohol by volume (190° proof) having the taste, aroma, and characteristics generally attributed to rum, and bottled at not less than 40 percent alcohol by volume (80° proof); and also includes mixtures solely of such spirits. All rum may be designated as “rum” on the label, even if it also meets the standards for a specific type of rum.
(b) *Types.* [Paragraph (b)(1)](/current/title-27/section-5.147#p-5.147\(b\)\(1\)) of this section describes a specific type of rum and the standards for that type.
| Type | Standards |
| --------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |
| (1) Cachaça | Rum that is a distinctive product of Brazil, manufactured in Brazil in compliance with the laws of Brazil regulating the manufacture of Cachaça for consumption in that country. The word “Cachaça” may be spelled with or without the diacritic mark (i.e., “Cachaça” or “Cachaca”). Cachaça may be designated as “Cachaça” or “rum” on labels. |
| (2) \[Reserved] | |
#### § 5.148 Agave spirits.
(a) *The class agave spirits.* “Agave spirits” are distilled from a fermented mash, of which at least 51 percent is derived from plant species in the genus Agave and up to 49 percent is derived from other sugars. Agave spirits must be distilled at less than 95 percent alcohol by volume (190° proof) and bottled at or above 40 percent alcohol by volume (80° proof). Agave spirits may be stored in wood barrels. Agave spirits may contain added flavoring or coloring materials as authorized by [§ 5.155](/current/title-27/section-5.155). This class also includes mixtures of agave spirits. Agave spirits that meet the standard of identity for “Tequila” or “Mezcal” may be designated as “agave spirits,” or as “Tequila” or “Mezcal”, as applicable.
(b) *Types.* [Paragraphs (b)(1)](/current/title-27/section-5.148#p-5.148\(b\)\(1\)) and [(2)](/current/title-27/section-5.148#p-5.148\(b\)\(2\)) of this section describe the types of agave spirits and the rules for each type.
| Type | Standards |
| ----------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| (1) Tequila | An agave spirit that is a distinctive product of Mexico. Tequila must be made in Mexico, in compliance with the laws and regulations of Mexico governing the manufacture of Tequila for consumption in that country. |
| (2) Mezcal | An agave spirit that is a distinctive product of Mexico. Mezcal must be made in Mexico, in compliance with the laws and regulations of Mexico governing the manufacture of Mezcal for consumption in that country. |
#### § 5.149 \[Reserved]
#### § 5.150 Cordials and liqueurs.
(a) *The class cordials and liqueurs.* Cordials and liqueurs are flavored distilled spirits that are made by mixing or redistilling distilled spirits with or over fruits, flowers, plants, or pure juices therefrom, or other natural flavoring materials, or with extracts derived from infusions, percolation, or maceration of such materials, and containing sugar (such as sucrose, fructose, dextrose, or levulose) in an amount of not less than 2.5 percent by weight of the finished product. Designations on labels may be “Cordial” or “Liqueur,” or, in the alternative, may be one of the type designations below. Cordials and liqueurs may not be designated as “straight”. The designation of a cordial or liqueur may include the word “dry” if sugar is less than 10 percent by weight of the finished product.
(b) *Types.* [Paragraph (b)(1)](/current/title-27/section-5.150#p-5.150\(b\)\(1\)) through [(12)](/current/title-27/section-5.150#p-5.150\(b\)\(12\)) of this section list definitions and standards for optional type designations.
| Type | Rule |
| -------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |
| (1) Sloe gin | A cordial or liqueur with the main characteristic flavor derived from sloe berries. |
| (2) Rye liqueur, bourbon liqueur (or rye cordial or bourbon cordial) | Liqueurs, bottled at not less than 30 percent alcohol by volume, in which not less than 51 percent, on a proof gallon basis, of the distilled spirits used are, respectively, rye or bourbon whisky, straight rye or straight bourbon whisky, or whisky distilled from a rye or bourbon mash, and which possess a predominant characteristic rye or bourbon flavor derived from such whisky. Wine, if used, must be within the 2.5 percent limitation provided in [§ 5.155](/current/title-27/section-5.155) for coloring, flavoring, and blending materials. |
| (3) Rock and rye; Rock and bourbon; Rock and brandy; Rock and rum | Liqueurs, bottled at not less than 24 percent alcohol by volume, in which, in the case of rock and rye and rock and bourbon, not less than 51 percent, on a proof gallon basis, of the distilled spirits used are, respectively, rye or bourbon whisky, straight rye or straight bourbon whisky, or whisky distilled from a rye or bourbon mash, and, in the case of rock and brandy and rock and rum, the distilled spirits used are all grape brandy or rum, respectively; containing rock candy or sugar syrup, with or without the addition of fruit, fruit juices, or other natural flavoring materials, and possessing, respectively, a predominant characteristic rye, bourbon, brandy, or rum flavor derived from the distilled spirits used. Wine, if used, must be within the 2.5 percent limitation provided in [§ 5.155](/current/title-27/section-5.155) for harmless coloring, flavoring, and blending materials. |
| (4) Rum liqueur, gin liqueur, brandy liqueur | Liqueurs, bottled at not less than 30 percent alcohol by volume, in which the distilled spirits used are entirely rum, gin, or brandy, respectively, and which possess, respectively, a predominant characteristic rum, gin, or brandy flavor derived from the distilled spirits used. In the case of brandy liqueur, the type of brandy must be stated in accordance with [paragraph (d)](/current/title-27/section-5.150#p-5.150\(d\)) of this section, except that liqueurs made entirely with grape brandy may be designated simply as “brandy liqueur.” Wine, if used, must be within the 2.5 percent limitation provided for in [§ 5.155](/current/title-27/section-5.155) for harmless coloring, flavoring, and blending materials. |
| (5) Amaretto | Almond flavored liqueur/cordial |
| (6) Kummel | Caraway flavored liqueur/cordial |
| (7) Ouzo, Anise, Anisette | Anise flavored liqueurs/cordials |
| (8) Sambuca | Anise flavored liqueur. See [§ 5.154(b)(2)](/current/title-27/section-5.154#p-5.154\(b\)\(2\)) for designation rules for Sambuca not produced in Italy. |
| (9) Peppermint Schnapps | Peppermint flavored liqueur/cordial |
| (10) Triple Sec and Curacao | Orange flavored liqueurs/cordials. Curacao may be preceded by the color of the liqueur/cordial (for example, Blue Curacao). |
| (11) Crème de | A liqueur/cordial where the blank is filled in with the predominant flavor (for example, Crème de menthe is mint flavored liqueur/cordial.) |
| (12) Goldwasser | Herb flavored liqueur/cordial and containing gold flakes. See [§ 5.154(b)(2)](/current/title-27/section-5.154#p-5.154\(b\)\(2\)) for designation rules for Goldwasser not made in Germany. |
#### § 5.151 Flavored spirits.
(a) *The class flavored spirits.* “Flavored spirits” are distilled spirits that are spirits conforming to one of the standards of identity set forth in [§§ 5.142](/current/title-27/section-5.142) through [5.148](/current/title-27/section-5.148) to which have been added nonbeverage natural flavors, wine, or nonalcoholic natural flavoring materials, with or without the addition of sugar, and bottled at not less than 30 percent alcohol by volume (60° proof). The flavored spirits must be specifically designated by the single base spirit and one or more of the most predominant flavors (for example, “Pineapple Flavored Tequila” or “Cherry Vanilla Flavored Bourbon Whisky”). The base spirit must conform to the standard of identity for that spirit before the flavoring is added. Base spirits that are a distinctive product of a particular place must be manufactured in accordance with the laws and regulations of the country as designated in the base spirit's standard of identity. If the finished product contains more than 2.5 percent by volume of wine, the kinds and percentages by volume of wine must be stated as a part of the designation (whether the wine is added directly to the product or whether it is first mixed into an intermediate product), except that a flavored brandy may contain an additional 12.5 percent by volume of wine, without label disclosure, if the additional wine is derived from the particular fruit corresponding to the labeled flavor of the product.
(b) \[Reserved]
#### § 5.152 Imitations.
(a) Imitations must bear, as a part of the designation thereof, the word “imitation” and include the following:
(1) Any class or type of distilled spirits to which has been added coloring or flavoring material of such nature as to cause the resultant product to simulate any other class or type of distilled spirits;
(2) Any class or type of distilled spirits (other than distilled spirits specialty products as defined in [§ 5.156](/current/title-27/section-5.156)) to which has been added flavors considered to be artificial or imitation.
(3) Any class or type of distilled spirits (except cordials, liqueurs and specialties marketed under labels which do not indicate or imply that a particular class or type of distilled spirits was used in the manufacture thereof) to which has been added any whisky essence, brandy essence, rum essence, or similar essence or extract which simulates or enhances, or is used by the trade or in the particular product to simulate or enhance, the characteristics of any class or type of distilled spirits;
(4) Any type of whisky to which beading oil has been added;
(5) Any rum to which neutral spirits or distilled spirits other than rum have been added;
(6) Any brandy made from distilling material to which has been added any amount of sugar other than the kind and amount of sugar expressly authorized in the production of standard wine; and
(7) Any brandy to which neutral spirits or distilled spirits other than brandy have been added, except that this provision shall not apply to any product conforming to the standard of identity for blended applejack.
(b) If any of the standards set forth in [paragraphs (a)(1)](/current/title-27/section-5.152#p-5.152\(a\)\(1\)) through [(7)](/current/title-27/section-5.152#p-5.152\(a\)\(7\)) of this section apply, the “Imitation” class designation must be used in front of the appropriate class as part of the designation (for example, Imitation Whisky).
#### § 5.153 \[Reserved]
#### § 5.154 Rules for geographical designations.
(a) *Geographical designations.*
(1) Geographical names for distinctive types of distilled spirits (other than names found by the appropriate TTB officer under [paragraph (a)(2)](/current/title-27/section-5.154#p-5.154\(a\)\(2\)) of this section to have become generic) may not be applied to distilled spirits produced in any other place than the particular region indicated by the name, unless:
(i) There appears the word “type” or the word “American” or some other adjective indicating the true place of production, in lettering substantially as conspicuous as such name; and
(ii) The distilled spirits to which the name is applied conform to the distilled spirits of that particular region. The following are examples of distinctive types of distilled spirits with geographical names that have not become generic: Eau de Vie de Dantzig (Danziger Goldwasser), Ojen, Swedish punch. Geographical names for distinctive types of distilled spirits may be used to designate only distilled spirits conforming to the standard of identity, if any, for such type specified in this section, or if no such standard is so specified, then in accordance with the trade understanding of that distinctive type.
(2) Only such geographical names for distilled spirits as the appropriate TTB officer finds have by usage and common knowledge lost their geographical significance to such extent that they have become generic shall be deemed to have become generic. Examples are London dry gin, Geneva (Hollands) gin.
(3) Geographical names that are not names for distinctive types of distilled spirits, and that have not become generic, shall not be applied to distilled spirits produced in any other place than the particular place or region indicated in the name. Examples are Armagnac, Greek brandy, Jamaica rum, Puerto Rico rum, Demerara rum and Andong Soju.
(b) *Products without geographical designations but distinctive of a particular place.*
(1) The whiskies of the types specified in paragraphs (c)(2) through (6) and (10) through (14) of [§ 5.143](/current/title-27/section-5.143) are distinctive products of the United States and if produced in a foreign country shall be designated by the applicable designation prescribed in such paragraphs, together with the words “American type” or the words “produced (distilled, blended) in \_\_\_\_”, the blank to be filled in with the name of the foreign country: *Provided,* That the word “bourbon” shall not be used to describe any whisky or whisky-based distilled spirits not produced in the United States. If whisky of any of these types is composed in part of whisky or whiskies produced in a foreign country there shall be stated, on the brand label, the percentage of such whisky and the country of origin thereof.
(2) The name for other distilled spirits which are distinctive products of a particular place or country (such as Habanero), may not be given to the product of any other place or country unless the designation for such product includes the word “type” or an adjective such as “American”, or the like, clearly indicating the true place of production. The provision for place of production shall not apply to designations which by usage and common knowledge have lost their geographical significance to such an extent that the appropriate TTB officer finds they have become generic. Examples of generic designations are Slivovitz, Zubrovka, Aquavit, Arrack, and Kirschwasser.
#### § 5.155 Alteration of class and type.
(a) *Definitions* —
(1) *Coloring, flavoring, or blending material.* For the purposes of this section, the term “coloring, flavoring, or blending material” means a harmless substance that is an essential component of the class or type of distilled spirits to which it is added; or a harmless substance, such as caramel, straight malt or straight rye malt whiskies, fruit juices, sugar, infusion of oak chips when approved by the Administrator, or wine, that is not an essential component part of the distilled spirits product to which it is added but which is customarily employed in the product in accordance with established trade usage.
(2) *Certified color.* For purposes of this section, the term “certified color” means a color additive that is required to undergo batch certification in accordance with part 74 or part 82 of the Food and Drug Administration regulations ([21 CFR parts 74](/current/title-21/part-74) and [82](/current/title-21/part-82)). An example of a certified color is FD\&C Blue No. 2.
(b) *Allowable additions.* Except as provided in [paragraph (c)](/current/title-27/section-5.155#p-5.155\(c\)) of this section, the following may be added to distilled spirits without changing the class or type designation:
(1) Coloring, flavoring, and blending materials that are essential components of the class or type of distilled spirits to which added;
(2) Coloring, flavoring, and blending materials that are not essential component parts of the distilled spirits to which added, provided that such coloring, flavoring, or blending materials do not total more than 2.5 percent by volume of the finished product; and
(3) Wine, when added to Canadian whisky in Canada in accordance with the laws and regulations of Canada governing the manufacture of Canadian whisky.
(c) *Special rules.* The addition of the following will require a redesignation of the class or type of the distilled spirits product to which added:
(1) Coloring, flavoring, or blending materials that are not essential component parts of the class or type of distilled spirits to which they are added, if such coloring, flavoring, and blending materials total more than 2.5 percent by volume of the finished product;
(2) Any material, other than caramel, infusion of oak chips, and sugar, added to Cognac brandy;
(3) Any material whatsoever added to neutral spirits or straight whisky, except that vodka may be treated with sugar, in an amount not to exceed two grams per liter, and with citric acid, in an amount not to exceed one gram per liter;
(4) Certified colors, carmine, or cochineal extract;
(5) Any material that would render the product to which it is added an imitation, as defined in [§ 5.152](/current/title-27/section-5.152); or
(6) For products that are required to be stored in oak barrels in accordance with a standard of identity, the storing of the product in an additional barrel made of another type of wood.
(d) *Extractions from distilled spirits.* The removal of any constituents from a distilled spirits product to such an extent that the product no longer possesses the taste, aroma, and characteristics generally attributed to that class or type of distilled spirits will alter the class or type of the product, and the resulting product must be redesignated appropriately. In addition, in the case of straight whisky, the removal of more than 15 percent of the fixed acids, volatile acids, esters, soluble solids, or higher alcohols, or the removal of more than 25 percent of the soluble color, constitutes an alteration of the class or type of the product and requires a redesignation of the product.
(e) *Exceptions.* Nothing in this section has the effect of modifying the standards of identity specified in [§ 5.150](/current/title-27/section-5.150) for cordials and liqueurs, and in [§ 5.151](/current/title-27/section-5.151) for flavored spirits, or of authorizing any product defined in [§ 5.152](/current/title-27/section-5.152) to be designated as other than an imitation.
#### § 5.156 Distilled spirits specialty products.
(a) *General.* Distilled spirits that do not meet one of the other standards of identity specified in this subpart are distilled spirits specialty products and must be designated in accordance with trade and consumer understanding, or, if no such understanding exists, with a distinctive or fanciful name (which may be the name of a cocktail) appearing in the same field of vision as a statement of composition. The statement of composition and the distinctive or fanciful name serve as the class and type designation for these products. The statement of composition must follow the rules found in [§ 5.166](/current/title-27/section-5.166). A product may not bear a designation which indicates it contains a class or type of distilled spirits unless the distilled spirits therein conform to such class and type.
(b) *Products designated in accordance with trade and consumer understanding.* Products may be designated in accordance with trade and consumer understanding without a statement of composition if the appropriate TTB officer has determined that there is such understanding.
#### §§ 5.157-5.165 \[Reserved]
#### § 5.166 Statements of composition.
(a) *Rules for the statement of composition.* When a statement of composition is required as part of a designation for a distilled spirits specialty product, the statement must be truthful and adequate.
(b) *Cocktails.* A statement of the classes and types of distilled spirits used in the manufacture thereof will be deemed a sufficient statement of composition in the case of highballs, cocktails, and similar prepared specialties when the designation adequately indicates to the consumer the general character of the product.
## Subpart J—Formulas
#### § 5.191 Application.
The requirements of this subpart apply to the following persons:
(a) Proprietors of distilled spirits plants qualified as processors under [part 19 of this chapter](/current/title-27/part-19);
(b) Persons in the Commonwealth of Puerto Rico who manufacture distilled spirits products for shipment to the United States. However, the filing of a formula for approval by TTB is only required for those products that will be shipped to the United States; and
(c) Persons who ship Virgin Islands distilled spirits products into the United States.
#### § 5.192 Formula requirements.
(a) *General.* An approved formula is required to blend, mix, purify, refine, compound, or treat distilled spirits in a manner that results in a change of class or type of the spirits.
(b) *Preparation and submission.* In order to obtain formula approval, a person listed in [§ 5.191](/current/title-27/section-5.191) must file a formula in accordance with the instructions on TTB Form 5100.51, Formula and Process for Domestic and Imported Alcohol Beverages (if filing by paper) or on Formulas Online, if filing electronically. When a product will be made or processed under the same formula at more than one location operated by the distiller or processor, the distiller or processor must identify on the form each place of production or processing by name and address, and by permit number, if applicable, and must ensure that a copy of the approved formula is maintained at each location.
(c) *Existing approvals.* Any approval of a formula will remain in effect until revoked, superseded, or voluntarily surrendered, and if the formula is revoked, superseded, or voluntarily surrendered, any existing qualifying statements on such approval as to the rate of tax or the limited use of alcoholic flavors will be made obsolete.
(d) *Change in formula.* Any change in an approved formula requires the filing of a new TTB Form 5100.51 for approval of the changed formula. After a changed formula is approved, the filer must surrender the original formula approval to the appropriate TTB officer.
#### § 5.193 Operations requiring formulas.
The following operations change the class or type of distilled spirits and therefore require formula approval under [§ 5.192](/current/title-27/section-5.192): *Provided,* That, TTB may exempt categories of distilled spirits products from specific regulatory formula requirements upon a finding that the filing of a formula is no longer necessary in order to properly classify the finished product:
(a) The compounding of distilled spirits through the mixing of a distilled spirits product with any coloring or flavoring material, wine, or other material containing distilled spirits, unless TTB has issued public guidance recognizing that such ingredients are harmless coloring, flavoring or blending materials that do not alter the class or type pursuant to the standards set forth in [§ 5.155](/current/title-27/section-5.155);
(b) The manufacture of an intermediate product to be used exclusively in other distilled spirits products on bonded premises;
(c) Any filtering or stabilizing process that results in a distilled spirits product's no longer possessing the taste, aroma, and characteristics generally attributed to the class or type of distilled spirits before the filtering or stabilizing, or, in the case of straight whisky, that results in the removal of more than 15 percent of the fixed acids, volatile acids, esters, soluble solids, or higher alcohols, or more than 25 percent of the soluble color;
(d) The mingling of spirits that differ in class or in type of materials from which made;
(e) The mingling of distilled spirits that were stored in charred cooperage with distilled spirits that were stored in plain or reused cooperage, or the mixing of distilled spirits that have been treated with wood chips with distilled spirits not so treated, or the mixing of distilled spirits that have been subjected to any treatment which changes their character with distilled spirits not subjected to such treatment, unless it is determined by the appropriate TTB officer in each of these cases that the composition of the distilled spirits is the same notwithstanding the storage in different kinds of cooperage or the treatment of a portion of the spirits;
(f) Except when authorized for production or storage operations by [part 19 of this chapter](/current/title-27/part-19), the use of any physical or chemical process or any apparatus that accelerates the maturing of the distilled spirits;
(g) The steeping or soaking of plant materials, such as fruits, berries, aromatic herbs, roots, or seeds, in distilled spirits or wines at a distilled spirits plant;
(h) The artificial carbonating of distilled spirits;
(i) In Puerto Rico, the blending of distilled spirits with any liquors manufactured outside Puerto Rico;
(j) The production of gin by:
(1) Redistillation, over juniper berries and other natural aromatics or over the extracted oils of such materials, of spirits distilled at or above 190 degrees of proof that are free from impurities, including such spirits recovered by redistillation of imperfect gin spirits; or
(2) Mixing gin with other distilled spirits;
(k) The treatment of gin by:
(1) The addition or abstraction of any substance or material other than pure water after redistillation in a manner that would change its class and type designation; or
(2) The addition of any substance or material other than juniper berries or other natural aromatics or the extracted oils of such materials, or the addition of pure water, before or during redistillation, in a manner that would change its class and type designation; and
(l) The recovery of spirits by redistillation from distilled spirits products containing other alcoholic ingredients and from spirits that have previously been entered for deposit. However, no formula approval is required for spirits redistilled into any type of neutral spirits other than vodka or for spirits redistilled at less than 190 degrees of proof that lack the taste, aroma and other characteristics generally attributed to whisky, brandy, rum, or gin and that are designated as “Spirits” preceded or followed by a word or phrase descriptive of the material from which distilled. Such spirits may not be designated “Spirits Grain” or “Grain Spirits” on any label.
#### § 5.194 Adoption of predecessor's formulas.
A successor to a person listed in [§ 5.191](/current/title-27/section-5.191) may adopt a predecessor's approved formulas by filing an application with the appropriate TTB officer. The application must include a list of the formulas for adoption and must identify each formula by formula number, name of product, and date of approval. The application must clearly show that the predecessor has authorized the use of the previously approved formulas by the successor.
## Subpart K—Standards of Fill and Authorized Container Sizes.
#### § 5.201 General.
No person engaged in business as a distiller, rectifier (processor), importer, wholesaler, bottler, or warehouseman and bottler, directly or indirectly, or through an affiliate, may sell or ship or deliver for sale or shipment in interstate or foreign commerce, or otherwise introduce in interstate or foreign commerce, or receive therein, or remove from customs custody for consumption, any distilled spirits in containers, unless the distilled spirits are bottled in conformity with [§§ 5.202](/current/title-27/section-5.202) and [5.203](/current/title-27/section-5.203).
#### § 5.202 Standard liquor containers.
(a) *General.* Except as provided in [paragraph (d)](/current/title-27/section-5.202#p-5.202\(d\)) of this section and in [§ 5.205](/current/title-27/section-5.205), distilled spirits must be bottled in standard liquor containers, as defined in this paragraph. A standard liquor container is a container that is made, formed, and filled in such a way that it does not mislead purchasers as regards its contents. An individual carton or other container of a bottle may not be so designed as to mislead purchasers as to the size of the bottle it contains.
(b) *Headspace.* A filled liquor container of a capacity of 200 milliliters (6.8 fl. oz.) or more is deemed to mislead the purchaser if it has a headspace in excess of 8 percent of the total capacity of the container after closure.
(c) *Design.* Regardless of the correctness of the stated net contents, a liquor container is deemed to mislead the purchaser if it is made and formed in such a way that its actual capacity is substantially less than the capacity it appears to have upon visual examination under ordinary conditions of purchase or use.
(d) *Exception for distinctive liquor bottles.* The provisions of [paragraphs (b)](/current/title-27/section-5.202#p-5.202\(b\)) and [(c)](/current/title-27/section-5.202#p-5.202\(c\)) of this section do not apply to liquor bottles for which a distinctive liquor bottle approval has been issued pursuant to [§ 5.205](/current/title-27/section-5.205).
#### § 5.203 Standards of fill (container sizes).
(a) *Authorized standards of fill.* The following metric standards of fill are authorized for distilled spirits, whether domestically bottled or imported:
(1) 3.75 Liters.
(2) 3 Liters.
(3) 2 Liters.
(4) 1.8 Liters.
(5) 1.75 Liters.
(6) 1.5 Liters.
(7) 1.00 Liter.
(8) 945 mL.
(9) 900 mL.
(10) 750 mL.
(11) 720 mL.
(12) 710 mL.
(13) 700 mL.
(14) 570 mL.
(15) 500 mL.
(16) 475 mL.
(17) 375 mL.
(18) 355 mL.
(19) 350 mL.
(20) 331 mL.
(21) 250 mL.
(22) 200 mL.
(23) 187 mL.
(24) 100 mL.
(25) 50 mL.
(b) *Spirits bottled using outdated standards.* [Paragraph (a)](/current/title-27/section-5.203#p-5.203\(a\)) of this section does not apply to:
(1) Imported distilled spirits in the original containers in which entered into customs custody prior to January 1, 1980; or
(2) Imported distilled spirits bottled or packed prior to January 1, 1980, and certified as to such in a statement signed by an official duly authorized by the appropriate foreign government.
\[T.D. TTB-200, [90 FR 1876](https://www.federalregister.gov/citation/90-FR-1876), Jan. 10, 2025]
#### § 5.204 \[Reserved]
#### § 5.205 Distinctive liquor bottle approval.
(a) *General.* A bottler or importer of distilled spirits in distinctive liquor bottles may apply for a distinctive liquor bottle approval from the appropriate TTB officer. The distinctive liquor bottle approval will provide an exemption only from those requirements that are specified in [paragraph (b)](/current/title-27/section-5.205#p-5.205\(b\)) of this section. A distinctive liquor bottle is a container that is not the customary shape and that may obscure the net contents of the distilled spirits.
(b) *Exemptions provided by the distinctive liquor bottle approval.* The distinctive liquor bottle approval issued pursuant to this section will provide that:
(1) The provisions of [§ 5.202(b)](/current/title-27/section-5.202#p-5.202\(b\)) and [(c)](/current/title-27/section-5.202#p-5.202\(c\)) do not apply to the liquor containers for which the distinctive liquor bottle approval has been issued; and
(2) The information required to appear in the same field of vision pursuant to [§ 5.63(a)](/current/title-27/section-5.63#p-5.63\(a\)) may appear elsewhere on a distinctive liquor bottle for which the distinctive liquor bottle approval has been issued, if the design of the container precludes the presentation of all mandatory information in the same field of vision.
(c) *How to apply.* A bottler or importer of distilled spirits in distinctive liquor bottles may apply for a distinctive liquor bottle approval as part of the application for a certificate of label approval (COLA).
## Subpart L \[Reserved]
#### § 5.211 \[Reserved]
#### § 5.212 \[Reserved]
## Subpart M—Penalties and Compromise of Liability
#### § 5.221 Criminal penalties.
A violation of the labeling provisions of [27 U.S.C. 205(e)](https://www.govinfo.gov/link/uscode/27/205) is punishable as a misdemeanor. See [27 U.S.C. 207](https://www.govinfo.gov/link/uscode/27/207) for the statutory provisions relating to criminal penalties, consent decrees, and injunctions.
#### § 5.222 Conditions of basic permit.
A basic permit is conditioned upon compliance with the requirements of [27 U.S.C. 205](https://www.govinfo.gov/link/uscode/27/205), including the labeling and advertising provisions of this part. A willful violation of the conditions of a basic permit provides grounds for the revocation or suspension of the permit, as applicable, as set forth in [part 1 of this chapter](/current/title-27/part-1).
#### § 5.223 Compromise.
Pursuant to [27 U.S.C. 207](https://www.govinfo.gov/link/uscode/27/207), the appropriate TTB officer is authorized, with respect to any violation of [27 U.S.C. 205](https://www.govinfo.gov/link/uscode/27/205), to compromise the liability arising with respect to such violation upon payment of a sum not in excess of \$500 for each offense, to be collected by the appropriate TTB officer and to be paid into the Treasury as miscellaneous receipts.
## Subpart N—Advertising of Distilled Spirits
#### § 5.231 Application.
No person engaged in business as a distiller, rectifier (processor), importer, wholesaler, bottler, or warehouseman and bottler of distilled spirits, directly or indirectly or through an affiliate, shall publish or disseminate or cause to be published or disseminated by radio or television broadcast, or in any newspaper, periodical, or any publication, by any sign or outdoor advertisement, or by electronic or internet media, or any other printed or graphic matter, any advertisement of distilled spirits, if such advertising is in, or is calculated to induce sales in, interstate or foreign commerce, or is disseminated by mail, unless such advertisement is in conformity with this subpart: *Provided,* That such sections shall not apply to outdoor advertising in place on September 7, 1984, but shall apply upon replacement, restoration, or renovation of any such advertising; *and provided further,* that such sections shall not apply to a retailer or the publisher of any newspaper, periodical, or other publication, or radio or television or internet broadcast, unless such retailer or publisher or broadcaster is engaged in business as a distiller, rectifier (processor), importer, wholesaler, or warehouseman and bottler of distilled spirits, directly or indirectly, or through an affiliate.
#### § 5.232 Definition.
As used in this subpart, the term “advertisement” “or advertising” includes any written or verbal statement, illustration, or depiction which is in, or calculated to induce sales in, interstate or foreign commerce, or is disseminated by mail, whether it appears in a newspaper, magazine, trade booklet, menu, wine card, leaflet, circular, mailer, book insert, catalog, promotional material, sales pamphlet, internet or other electronic site or social network, or in any written, printed, graphic, or other matter (such as hang tags) accompanying, but not firmly affixed to, the bottle, representations made on shipping cases or in any billboard, sign, other outdoor display, public transit card, other periodical literature, publication, or in a radio or television broadcast, or in any other media; except that such term shall not include:
(a) Any label affixed to any bottle of distilled spirits; or any individual covering, carton, or other container of the bottle which constitute a part of the labeling under this part.
(b) Any editorial or other reading material (such as a news release) in any periodical or publication or newspaper for the publication of which no money or valuable consideration or thing of value is paid or promised, directly or indirectly, by any permittee, and which is not written by or at the direction of the permittee.
#### § 5.233 Mandatory statements.
(a) *Responsible advertiser.* The advertisement must display the responsible advertiser's name, city, and State or the name and other contact information (such as, telephone number, website, or email address) where the responsible advertiser may be contacted.
(b) *Class and type.* The advertisement shall contain a conspicuous statement of the class to which the product belongs and the type thereof corresponding with the statement of class and type which is required to appear on the label of the product.
(c) *Alcohol content* —
(1) *Mandatory statement.* The alcohol content for distilled spirits must be stated as a percentage of alcohol by volume, in the manner set forth in [§ 5.65 of this chapter](/current/title-27/section-5.65) for labels. Products that contain a significant amount of material, such as solid fruit, that may absorb spirits after bottling must state the alcohol content at the time of bottling as follows: “Bottled at \_\_\_\_ percent-alcohol-by-volume.”
(2) *Optional statement.* In addition, the advertisement may also state the alcohol content in degrees of proof if this information appears in the same field of vision as the statement expressed in percent-alcohol-by-volume.
(d) *Percentage of neutral spirits and name of commodity.*
(1) In the case of distilled spirits (other than cordials, liqueurs, flavored neutral spirits, including flavored vodka, and distilled spirits specialty products) produced by blending or rectification, if neutral spirits have been used in the production thereof, there shall be stated the percentage of neutral spirits so used and the name of the commodity from which such neutral spirits have been distilled. The statement of percentage and the name of the commodity shall be made in substantially the following form: “\_\_\_\_% neutral spirits distilled from \_\_\_\_ (insert grain, cane products, or fruit, or other products as appropriate)”; or \_\_\_\_% neutral spirits (vodka) distilled from \_\_\_\_ (insert grain, cane product, fruit, or other commodity, as appropriate)”; or “\_\_\_\_% grain (cane products), (fruit) neutral spirits”; or “\_\_\_\_% grain spirits”. The statement used under this paragraph must be identical to that on the label of distilled spirits to which the advertisement refers.
(2) In the case of gin manufactured by a process of continuous distillation or in the case of neutral spirits, there shall be stated the name of the commodity from which such gin or neutral spirits were distilled. The statement of the name of the commodity shall be made in substantially the following form: “Distilled from grain”, or “Distilled from cane products”, or “Distilled from fruit.” The statement used under this paragraph must be identical to that on the label of distilled spirits to which the advertisement refers.
(e) *Exception.*
(1) If an advertisement refers to a general distilled spirits line or all of the distilled spirits products of one company, whether by the company name or by the brand name common to all the distilled spirits in the line, the only mandatory information necessary is the responsible advertiser's name, city, and State or the name and other contact information (such as telephone number, website, or email address) where the responsible advertiser may be contacted. This exception does not apply where only one type of distilled spirits is marketed under the specific brand name advertised.
(2) On consumer specialty items (such as T-shirts, hats, bumper stickers, or refrigerator magnets), the only information necessary is the company name of the responsible advertiser or brand name of the product.
#### § 5.234 Legibility of mandatory information.
(a) Statements required under this subpart to appear in any written, printed, or graphic advertisement shall be in lettering or type size sufficient to be conspicuous and readily legible.
(b) In the case of signs, billboards, and displays the name and address or name and other contact information (such as, telephone number, website, or email) of the permittee responsible for the advertisement may appear in type size of lettering smaller than the other mandatory information, provided such information can be ascertained upon closer examination of the sign or billboard.
(c) Mandatory information shall be so stated as to be clearly a part of the advertisement and shall not be separated in any manner from the remainder of the advertisement.
(d) Mandatory information for two or more products shall not be stated unless clearly separated.
(e) Mandatory information shall be so stated in both the print and audio-visual media that it will be readily apparent to the persons viewing the advertisement.
#### § 5.235 Prohibited practices.
(a) *Restrictions.* An advertisement of distilled spirits shall not contain:
(1) Any statement that is false or untrue in any material particular, or that, irrespective of falsity, directly, or by ambiguity, omission, or inference, or by the addition of irrelevant, scientific or technical matter tends to create a misleading impression.
(2) Any false or misleading statement that explicitly or implicitly disparages a competitor's product. This does not prevent truthful and accurate comparisons between products (such as, “Our liqueur contains more strawberries than Brand X”) or statements of opinion (such as, “We think our rum tastes better than any other distilled spirits on the market”).
(3) Any statement, design, device, or representation which is obscene or indecent.
(4) Any statement, design, device, or representation of or relating to analyses, standards or tests, irrespective of falsity, which the appropriate TTB officer finds to be likely to mislead the consumer.
(5) Any statement, design, device, or representation of or relating to any guarantee, irrespective of falsity, which the appropriate TTB officer finds to be likely to mislead the consumer. Money-back guarantees are not prohibited.
(6) The words “bond”, “bonded”, “bottled in bond”, “aged in bond”, or phrases containing these or synonymous terms, unless such words or phrases appear, pursuant to [§ 5.88](/current/title-27/section-5.88), on labels of the distilled spirits advertised, and are stated in the advertisement in the manner and form in which they are permitted to appear on the label.
(7) The word “pure” unless:
(i) It refers to a particular ingredient used in the production of the distilled spirits, and is a truthful representation about the ingredient; or
(ii) It is part of the bona fide name of a permittee or retailer for whom the distilled spirits are bottled; or
(iii) It is part of the bona fide name of the permittee who bottled the distilled spirits.
(8) The words “double distilled” or “triple distilled” or any similar terms unless it is a truthful statement of fact. For purposes of this paragraph only, a distillation means a single run through a pot still or a single run through a column of a column (reflux) still. The number of distillations may be understated but may not be overstated.
(b) *Statements inconsistent with labeling.*
(1) Advertisements shall not contain any statement concerning a brand or lot of distilled spirits that is inconsistent with any statement on the labeling thereof.
(2) Any label depicted on a container in an advertisement shall be a reproduction of an approved label.
(c) *Statement of age.* The advertisement shall not contain any statement, design, or device directly or by implication concerning age or maturity of any brand or lot of distilled spirits unless a statement of age appears on the label of the advertised product. When any such statement, design, or device concerning age or maturity is contained in any advertisement, it shall include (in direct conjunction therewith and with substantially equal conspicuousness) all parts of the statement, if any, concerning age and percentages required to be made on the label under the provisions of [§ 5.74](/current/title-27/section-5.74). An advertisement for any whisky or brandy (except immature brandies, pomace brandy, marc brandy, Pisco brandy, Singani brandy, and grappa brandy) which is not required to bear a statement of age on the label or an advertisement for any rum or agave spirits, which has been aged for not less than 4 years may, however, contain inconspicuous, general representations as to age, maturity or other similar representations even though a specific age statement does not appear on the label of the advertised product and in the advertisement itself.
(d) *Health-related statements* —
(1) *Definitions.* When used in this [paragraph (d)](/current/title-27/section-5.235#p-5.235\(d\)), terms are defined as follows:
(i) *Health-related statement* means any statement related to health and includes statements of a curative or therapeutic nature that, expressly or by implication, suggest a relationship between the consumption of alcohol, distilled spirits, or any substance found within the distilled spirits, and health benefits or effects on health. The term includes both specific health claims and general references to alleged health benefits or effects on health associated with the consumption of alcohol, distilled spirits, or any substance found within the distilled spirits, as well as health-related directional statements. The term also includes statements and claims that imply that a physical or psychological sensation results from consuming the distilled spirits, as well as statements and claims of nutritional value (*e.g.,* statements of vitamin content). Statements concerning caloric, carbohydrate, protein, and fat content do not constitute nutritional claims about the product.
(ii) *Specific health claim* is a type of health-related statement that, expressly or by implication, characterizes the relationship of the distilled spirits, alcohol, or any substance found within the distilled spirits, to a disease or health-related condition. Implied specific health claims include statements, symbols, vignettes, or other forms of communication that suggest, within the context in which they are presented, that a relationship exists between distilled spirits, alcohol, or any substance found within the distilled spirits, and a disease or health-related condition.
(iii) *Health-related directional statement* is a type of health-related statement that directs or refers consumers to a third party or other source for information regarding the effects on health of distilled spirits or alcohol consumption.
(2) *Rules for advertising* —
(i) *Health-related statements.* In general, advertisements may not contain any health-related statement that is untrue in any particular or tends to create a misleading impression as to the effects on health of alcohol consumption. TTB will evaluate such statements on a case-by-case basis and may require as part of the health-related statement a disclaimer or some other qualifying statement to dispel any misleading impression conveyed by the health-related statement. Such disclaimer or other qualifying statement must appear as prominent as the health-related statement.
(ii) *Specific health claims.* A specific health claim will not be considered misleading if it is truthful and adequately substantiated by scientific or medical evidence; sufficiently detailed and qualified with respect to the categories of individuals to whom the claim applies; adequately discloses the health risks associated with both moderate and heavier levels of alcohol consumption; and outlines the categories of individuals for whom any levels of alcohol consumption may cause health risks. This information must appear as part of the specific health claim and in a manner as prominent as the specific health claim.
(iii) *Health-related directional statements.* A statement that directs consumers to a third party or other source for information regarding the effects on health of distilled spirits or alcohol consumption is presumed misleading unless it—
(A) Directs consumers in a neutral or other non-misleading manner to a third party or other source for balanced information regarding the effects on health of distilled spirits or alcohol consumption; and
(B)
(*1*) Includes as part of the health-related directional statement, and in a manner as prominent as the health-related directional statement, the following disclaimer: “This statement should not encourage you to drink or increase your alcohol consumption for health reasons;” or
(*2*) Includes as part of the health-related directional statement, and in a manner as prominent as the health-related directional statement, some other qualifying statement that the appropriate TTB officer finds is sufficient to dispel any misleading impression conveyed by the health-related directional statement.
(e) *Place of origin.* The advertisement shall not represent that the distilled spirits were manufactured in or imported from a place or country other than that of their actual origin, or were produced or processed by one who was not in fact the actual producer or processor.
(f) *Confusion of brands.* Two or more different brands or lots of distilled spirits shall not be advertised in one advertisement (or in two or more advertisements in one issue of a periodical or newspaper, or in one piece of other written, printed, or graphic matter) if the advertisement tends to create the impression that representations made as to one brand or lot apply to the other or others, and if as to such latter the representations contravene any provisions of this subpart or are in any respect untrue.
(g) *Representations of the armed forces or flags.* Advertisements may not show an image of any government's flag or any representation related to the armed forces of the United States if the representation, standing alone or considered together with any additional language or symbols, creates a false or misleading impression that the product was endorsed by, made by, used by, or made under the supervision of, the government represented by that flag or by the armed forces of the United States. This section does not prohibit the use of a flag as part of a claim of American origin or another country of origin.
(h) *Deceptive advertising techniques.* Subliminal or similar techniques are prohibited. “Subliminal or similar techniques,” as used in this subpart, refers to any device or technique that is used to convey, or attempts to convey, a message to a person by means of images or sounds of a very brief nature that cannot be perceived at a normal level of awareness.
(i) Any use of the term “organic” in the advertising of distilled spirits must comply with the United States Department of Agriculture's (USDA) National Organic Program rules, [7 CFR part 205](/current/title-7/part-205), as interpreted by the USDA.
T.D. TTB-176, 87 7579, Feb. 9, 2022, as amended by T. D.TTB-187, [88 FR 2228](https://www.federalregister.gov/citation/88-FR-2228), Jan. 13, 2023; T.D. TTB-196, [89 FR 87935](https://www.federalregister.gov/citation/89-FR-87935), Nov. 6, 2024]
#### § 5.236 Comparative advertising.
(a) *General.* Comparative advertising shall not be disparaging of a competitor's product in a manner that is false or misleading.
(b) *Taste tests.*
(1) Taste test results may be used in advertisements comparing competitors' products unless they are disparaging in a false or misleading manner; deceptive; or likely to mislead the consumer.
(2) The taste test procedure used shall meet scientifically accepted procedures. An example of a scientifically accepted procedure is outlined in the Manual on Sensory Testing Methods, ASTM Special Technical Publication 434, published by the American Society for Testing and Materials, 1916 Race Street, Philadelphia, Pennsylvania 19103, ASTM, 1968, Library of Congress Catalog Card Number 68-15545.
(3) A statement shall appear in the advertisement providing the name and address of the testing administrator.
## Subpart O—Paperwork Reduction Act
#### § 5.241 OMB control numbers assigned under the Paperwork Reduction Act.
(a) *Purpose.* This subpart displays the control numbers assigned to information collection requirements in this part by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995, [Public Law 104-13](https://www.govinfo.gov/link/plaw/104/public/13).
(b) *Table.* The following table identifies each section in this part that contains an information collection requirement and the OMB control number that is assigned to that information collection requirement.
Table 1 to Paragraph (b)
| Section where contained | Current OMB control No. |
| ----------------------- | ----------------------- |
| 5.11 | 1513-0111 |
| 5.21 | 1513-0020 |
| 5.22 | 1513-0020 |
| 5.23 | 1513-0020 |
| 5.24 | 1513-0020 1513-0064 |
| 5.25 | 1513-0020 |
| 5.27 | 1513-0020 |
| 5.28 | 1513-0122 |
| 5.29 | 1513-0020 |
| 5.30 | 1513-0064 |
| 5.62 | 1513-0087 |
| 5.63 | 1513-0084 1513-0087 |
| 5.82 | 1513-0121 |
| 5.83 | 1513-0121 |
| 5.84 | 1513-0087 |
| 5.87 | 1513-0087 |
| 5.88 | 1513-0087 |
| 5.89 | 1513-0087 |
| 5.90 | 1513-0087 |
| 5.91 | 1513-0087 |
| 5.192 | 1513-0122 |
| 5.193 | 1513-0122 |
| 5.194 | 1513-0122 |
| 5.203 | 1513-0064 |
| 5.205 | 1513-0020 |
| 5.233 | 1513-0087 |
# Part 53 — MANUFACTURERS EXCISE TAXES—FIREARMS AND AMMUNITION
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-53
Full text of 27 CFR Part 53 — MANUFACTURERS EXCISE TAXES—FIREARMS AND AMMUNITION. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 53—MANUFACTURERS EXCISE TAXES—FIREARMS AND AMMUNITION
#### Authority:
[26 U.S.C. 4181](https://www.govinfo.gov/link/uscode/26/4181), [4182](https://www.govinfo.gov/link/uscode/26/4182), [4216-4219](https://www.govinfo.gov/link/uscode/26/4216), [4221-4223](https://www.govinfo.gov/link/uscode/26/4221), [4225](https://www.govinfo.gov/link/uscode/26/4225), [6001](https://www.govinfo.gov/link/uscode/26/6001), [6011](https://www.govinfo.gov/link/uscode/26/6011), [6020](https://www.govinfo.gov/link/uscode/26/6020), [6021](https://www.govinfo.gov/link/uscode/26/6021), [6061](https://www.govinfo.gov/link/uscode/26/6061), [6071](https://www.govinfo.gov/link/uscode/26/6071), [6081](https://www.govinfo.gov/link/uscode/26/6081), [6091](https://www.govinfo.gov/link/uscode/26/6091), [6101-6104](https://www.govinfo.gov/link/uscode/26/6101), [6109](https://www.govinfo.gov/link/uscode/26/6109), [6151](https://www.govinfo.gov/link/uscode/26/6151), [6155](https://www.govinfo.gov/link/uscode/26/6155), [6161](https://www.govinfo.gov/link/uscode/26/6161), [6301-6303](https://www.govinfo.gov/link/uscode/26/6301), [6311](https://www.govinfo.gov/link/uscode/26/6311), [6402](https://www.govinfo.gov/link/uscode/26/6402), [6404](https://www.govinfo.gov/link/uscode/26/6404), [6416](https://www.govinfo.gov/link/uscode/26/6416), [7502](https://www.govinfo.gov/link/uscode/26/7502), [7805](https://www.govinfo.gov/link/uscode/26/7805).
#### Source:
T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, unless otherwise noted.
#### Editorial Note:
Nomenclature changes to part 53 appear by T.D. ATF-447, [66 FR 19088](https://www.federalregister.gov/citation/66-FR-19088), Apr. 13, 2001.
## Subpart A—Introduction
#### § 53.1 Introduction.
The regulations in this part (part 53, subchapter C, chapter I, [title 27, Code of Federal Regulations](/current/title-27)) are designated “Manufacturers Excise Taxes—Firearms and Ammunition.” The regulations relate to the tax on the sale of firearms and ammunition imposed by section 4181 of the Internal Revenue Code of 1986, and to certain related administrative provisions of chapter 32, subchapter F, of the Code. Chapter 32, subchapter D of the Code imposes taxes on the sale or use by the manufacturer, producer, or importer of certain recreational equipment specified in that chapter. References in the regulations in this part to the “Internal Revenue Code” or the “Code” are references to the Internal Revenue Code of 1986 (United States Code of 1986), as amended, unless otherwise indicated. References to a section or other provision of law are references to a section or other provision of the Internal Revenue Code of 1986, as amended, unless otherwise indicated.
#### § 53.2 Attachment of tax.
(a) For purposes of this part, the manufacturers excise tax generally attaches when the title to the article sold passes from the manufacturer to a purchaser.
(b) When title passes is dependent upon the intention of the parties as gathered from the contract of sale and the attendant circumstances. In the absence of expressed intention, the legal rules of presumption followed in the jurisdiction where the sale is made govern in determining when title passes.
(c) In the case of a sale on credit, the tax attaches whether or not the purchase price is actually collected.
(d) Where a consignor (such as a manufacturer) consigns articles to a consignee (such as a dealer), retaining ownership in them until they are disposed of by the consignee, title does not pass, and the tax does not attach until sale by the consignee. Where the relationship between a manufacturer and a dealer is that of principal and agent, title does not pass, and the tax does not attach, until sale by the dealer.
(e) In the case of a lease, an installment sale, a conditional sale, or a chattel mortgage arrangement or similar arrangement creating a security interest, a proportionate part of the tax attaches to each payment. See section 4217 and [§§ 53.103](/current/title-27/section-53.103) and [53.104](/current/title-27/section-53.104) for a limitation on the amount of tax payable on lease payments.
(f) In the case of use by the manufacturer, the tax attaches at the time the use begins.
#### § 53.3 Exemption certificates.
Several provisions of this part, relating to sales exempt from manufacturers excise tax, require the manufacturer to obtain an exemption certificate from the purchaser to substantiate the exempt character of the sale. Any form of exemption certificate will be acceptable if it includes all the information required by the provisions of this part. These certificates are available as preprinted forms, which are available for free download on the TTB website at *[https://www.ttb.gov/forms](https://www.ttb.gov/forms),* or by request sent via postal mail to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202. The preprinted certificates may be reproduced as needed.
\[T.D. TTB-44, [71 FR 16957](https://www.federalregister.gov/citation/71-FR-16957), Apr. 4, 2006, as amended by T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
## Subpart B—Definitions
#### § 53.11 Meaning of terms.
When used in this part and in forms prescribed under this part, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof, terms shall have the meanings ascribed in this section. Words in the plural form shall include the singular, and vice versa, and words importing the masculine gender shall include the feminine. The terms “includes” and “including” do not exclude other things not enumerated which are in the same general class or are otherwise within the scope thereof.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.53, Delegation of the Administrator's Authorities in [27 CFR Part 53](/current/title-27/part-53), Manufacturers Excise Taxes—Firearms and Ammunition.
*Calendar quarter.* A period of 3 calendar months ending on March 31, June 30, September 30, or December 31.
*Calendar year.* The period which begins January 1 and ends on the following December 31.
*Chapter 32.* For purposes of this part chapter 32 means section 4181, chapter 32, of the Internal Revenue Code of 1986, as amended.
*Code.* Internal Revenue Code of 1986, as amended.
*Electronic fund transfer (EFT).* Any transfer of funds effected by a taxpayer's financial institution, either directly or through a correspondent banking relationship, via the Federal Reserve Communications System (FRCS) or Fedwire to the Treasury Account at the Federal Reserve Bank.
*Exportation.* The severance of an article from the mass of things belonging within the United States with the intention of uniting it with the mass of things belonging within some foreign country or within a possession of the United States.
*Exporter.* The person named as shipper or consignor in the export bill of lading.
*Financial institution.* A bank or other financial institution, whether or not a member of the Federal Reserve System, which has access to the Federal Reserve Communications Systems (FRCS) or Fedwire. The “FRCS” or “Fedwire” is a communications network that allows Federal Reserve System member financial institutions to effect a transfer of funds for their customers (or other financial institutions) to the Treasury Account at the Federal Reserve Bank.
*Firearms.* Any portable weapons, such as rifles, carbines, machine guns, shotguns, or fowling pieces, from which a shot, bullet, or other projectile may be discharged by an explosive.
*Importer.* Any person who brings a taxable article into the United States from a source outside the United States, or who withdraws such an article from a customs bonded warehouse for sale or use in the United States. If the nominal importer of a taxable article is not its beneficial owner (for example, the nominal importer is a customs broker engaged by the beneficial owner), the beneficial owner is the “importer” of the article for purposes of chapter 32 of the Code and is liable for tax on their sale or use of the article in the United States. See section 4219 of the Code and [27 CFR 53.121](/current/title-27/section-53.121) for the circumstances under which sales by persons other than the manufacturer or importer are subject to the manufacturers excise tax.
*Knockdown condition.* A taxable article that is unassembled but complete as to all component parts.
*Manufacturer.* Includes any person who produces a taxable article from scrap, salvage, or junk material, or from new or raw material, by processing, manipulating, or changing the form of an article or by combining or assembling two or more articles. The term also includes a “producer” and an “importer.” Under certain circumstances, as where a person manufactures or produces a taxable article for another person who furnishes materials under an agreement whereby the person who furnished the materials retains title thereto and to the finished article, the person for whom the taxable article is manufactured or produced, and not the person who actually manufactures or produces it, will be considered the manufacturer.
A manufacturer who sells a taxable article in a knockdown condition is liable for the tax as a manufacturer. Whether the person who buys such component parts or accessories and assembles a taxable article from them will be liable for tax as a manufacturer of a taxable article will depend on the relative amount of labor, material, and overhead required to assemble the completed article and on whether the article is assembled for business or personal use.
*Person.* An individual, trust, estate, partnership, association, company, or corporation. When used in connection with penalties, seizures, and forfeitures, the term includes an officer or employee of a partnership, who as an officer, employee or member, is under a duty to perform the act in respect of which the violation occurs.
*Pistols.* Small projectile firearms which have a short one-hand stock or butt at an angle to the line of bore and a short barrel or barrels, and which are designed, made, and intended to be aimed and fired from one hand. The term does not include gadget devices, guns altered or converted to resemble pistols, or small portable guns erroneously referred to as pistols, as, for example, Nazi belt buckle pistols, glove pistols, or one-hand stock guns firing fixed shotgun or fixed rifle ammunition.
*Possession of the United States.* Includes Guam, the Midway Islands, Palmyra, the Panama Canal Zone, the Commonwealth of Puerto Rico, American Samoa, the Virgin Islands, and Wake Island.
*Purchaser.* Includes a lessee where the lessor is also the manufacturer of the article.
*Revolvers.* Small projectile firearms of the pistol type, having a breech-loading chambered cylinder so arranged that the cocking of the hammer or movement of the trigger rotates it and brings the next cartridge in line with the barrel for firing.
*Sale.* An agreement whereby the seller transfers the property (that is, the title or the substantial incidents of ownership in goods) to the buyer for a consideration called the price, which may consist of money, services, or other things.
*Secretary of the Treasury* or *Secretary.* The Secretary of the Treasury or a delegate of the Secretary.
*Shells and cartridges.* Include any article consisting of a projectile, explosive, and container that is designed, assembled, and ready for use without further manufacture in firearms, pistols or revolvers. A person who reloads used shell or cartridge casings is a manufacturer of shells or cartridges within the meaning of section 4181 if such reloaded shells or cartridges are sold by the reloader. However, the reloader is not a manufacturer of shells or cartridges if, in return for a fee and expenses, he reloads casings of shells or cartridges submitted by a customer and returns the reloaded shells or cartridges with the identical casings provided by the customer to that customer. Under such circumstances, the customer would be the manufacturer of the shells or cartridges and may be liable for tax on the sale of articles. See section 4218 of the Code and [§ 53.112](/current/title-27/section-53.112).
*Taxable article.* Any article taxable under section 4181 of the Code.
*Treasury Account.* The Department of Treasury's General Account at the Federal Reserve Bank of New York.
*Vendor.* Includes a lessor where the lessor is also the manufacturer of the article.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-312, [56 FR 31083](https://www.federalregister.gov/citation/56-FR-31083), July 9, 1991; T.D. ATF-330, [57 FR 40325](https://www.federalregister.gov/citation/57-FR-40325), Sept. 3, 1992; T.D. ATF-365, [60 FR 33670](https://www.federalregister.gov/citation/60-FR-33670), June 28, 1995; T.D. ATF-404, [63 FR 52603](https://www.federalregister.gov/citation/63-FR-52603), Oct. 1, 1998; T.D. ATF-447, [66 FR 19088](https://www.federalregister.gov/citation/66-FR-19088), Apr. 13, 2001; T.D. TTB-44, [71 FR 16957](https://www.federalregister.gov/citation/71-FR-16957), Apr. 4, 2006; T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
## Subpart C—Administrative and Miscellaneous Provisions
#### § 53.20 Delegations of the Administrator.
The regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.53, Delegation of the Administrator's Authorities in [27 CFR Part 53](/current/title-27/part-53), Manufacturers Excise Taxes—Firearms and Ammunition. You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-44, [71 FR 16957](https://www.federalregister.gov/citation/71-FR-16957), Apr. 4, 2006, as amended by T.D. TTB-196, [89 FR 87950](https://www.federalregister.gov/citation/89-FR-87950), Nov. 6, 2024]
#### § 53.21 Forms prescribed.
(a) The appropriate TTB officer is authorized to prescribe all forms required by this part. All of the information called for in each form shall be furnished as indicated by the headings on the form and the instructions on or pertaining to the form. In addition, information called for in each form shall be furnished as required by this part. The form will be filed in accordance with the instructions on the form.
(b) Forms prescribed by this part are available for printing through the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
(c) *Signature authorization.* An individual's signature on a return, statement, or other document made by or for a corporation or a partnership shall be prima facie evidence that the individual is authorized to sign the return, statement, or other document.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991. Redesignated in part by T.D. ATF-365, [60 FR 33670](https://www.federalregister.gov/citation/60-FR-33670), June 28, 1995, as amended by T.D. 372, [61 FR 20724](https://www.federalregister.gov/citation/61-FR-20724), May 8, 1996; T.D. ATF-447, [66 FR 19088](https://www.federalregister.gov/citation/66-FR-19088), Apr. 13, 2001; T.D. TTB-44, [71 FR 16957](https://www.federalregister.gov/citation/71-FR-16957), Apr. 4, 2006; T.D. TTB-196, [89 FR 87950](https://www.federalregister.gov/citation/89-FR-87950), Nov. 6, 2024]
#### § 53.22 Employer identification number.
(a) *Requirement of application.*
(1) Except for one-time or occasional filers, every person who makes a sale or use of an article with respect to which a tax is imposed by section 4181 of the Code, and who has not earlier been assigned an employer identification number or has not applied for one, shall make an application on Form SS-4 for an employer identification number. The application and any supplementary statement accompanying it shall be prepared in accordance with the applicable form, instructions, and regulations and shall set forth fully and clearly the data therein called for. Form SS-4 may be obtained from any internal revenue district office or internal revenue service center. The application shall be filed with the internal revenue officer designated in the instructions applicable to Form SS-4. The application shall be signed by:
(i) The individual if the person is an individual;
(ii) The president, vice-president, or other principal officer, if the person is a corporation;
(iii) A responsible and duly authorized member or officer having knowledge of its affairs, if the person is a partnership or other unincorporated organization; or
(iv) The fiduciary, if the person is a trust or estate.
An employer identification number will be assigned to the person in due course upon the basis of information reported on the application required under this section.
(2) *Time for filing Form SS-4.* The application for an employer identification number shall be filed no later than the seventh day after the date of the first sale or use of an article with respect to which a tax is imposed by chapter 32 of the Code. However, the application should be filed far enough in advance of the first required use of such number to permit issuance of the number in time for compliance with such requirement.
(3) *One-time or occasional filers.* A person who files a return under the provisions of [section 53.151(a)(5)](/current/title-27/section-53.151#p-53.151\(a\)\(5\)) is not required to make application for an employer identification number. Such persons may use their social security number on any return, statement or other document submitted to TTB by that person in lieu of an employer identification number.
(b) *Use of employer identification number.* The employer identification number assigned to a person liable for a tax imposed by chapter 32 of the Code shall be shown on any return, statement, or other document submitted to TTB by the person.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-365, [60 FR 33670](https://www.federalregister.gov/citation/60-FR-33670), June 28, 1995; T.D. ATF-447, [66 FR 19088](https://www.federalregister.gov/citation/66-FR-19088), Apr. 13, 2001]
#### § 53.23 Alternate methods or procedures.
(a) A taxpayer, on specific approval by the appropriate TTB officer as provided in this section, may use an alternate method or procedure in lieu of a method or procedure specifically prescribed in this part. The appropriate TTB officer may approve an alternate method or procedure, subject to stated conditions, when—
(1) Good cause has been shown for the use of the alternate method or procedure;
(2) The alternate method or procedure is within the purpose of, and consistent with the effect intended by, the specifically prescribed method or procedure, and affords equivalent security to the revenue; and
(3) The alternate method or procedure will not be contrary to any provision of law and will not result in an increase in cost to the Government or hinder the effective administration of this part. No alternate method or procedure relating to the assessment, payment, or collection of tax shall be authorized under this paragraph.
(b) Where the taxpayer desires to employ an alternate method or procedure, a written application to do so must be submitted. The application must specifically describe the proposed alternate method or procedure and must set forth the reasons therefor. Alternate methods or procedures must not be employed until the appropriate TTB officer has approved the application. The taxpayer must, during the period of authorization of an alternate method or procedure, comply with the terms of the approved application. Authorization for any alternate method or procedure may be withdrawn whenever, in the judgment of the appropriate TTB officer, the revenue is jeopardized or the effective administration of this part is hindered by the continuation of such authorization.
\[T.D. ATF-365, [60 FR 33670](https://www.federalregister.gov/citation/60-FR-33670), June 28, 1995, as amended by T.D. ATF-447, [66 FR 19088](https://www.federalregister.gov/citation/66-FR-19088), Apr. 13, 2001]
#### § 53.24 Records.
(a) *In general* —
(1) *Form of records.* The records required by the regulations in this part shall be kept accurately, but no particular form is required for keeping the records. Such forms and systems of accounting shall be used as will enable appropriate TTB officers to ascertain whether liability for tax is incurred and, if so, the amount thereof.
(2) \[Reserved]
(b) *Copies of returns, schedules, and statements.* Every person who is required, by the regulations in this part or by instructions applicable to any form prescribed thereunder, to keep any copy of any return, schedule, statement, or other document, shall keep such copy as a part of the records.
(c) *Records of claimants.* Any person who, pursuant to the regulations in this part, claims a refund, credit, or abatement, shall keep a complete and detailed record with respect to the tax, interest, addition to the tax, additional amount, or assessable penalty to which the claim relates. Such record shall include any records required of the claimant by [paragraph (b)](/current/title-27/section-53.24#p-53.24\(b\)) of this section and [subpart L of this part](/current/title-27/part-53/subpart-L).
(d) *Place and period for keeping records.*
(1) All records required by this part shall be prepared and kept by the person required to keep them, at one or more convenient and safe locations accessible to appropriate TTB officers, and shall at all times be immediately available for inspection by such officers.
(2) Except as otherwise provided in this subparagraph, every person required by the regulations in this part to keep records in respect of a tax shall maintain such records for at least three years after the due date of such tax for the return period to which the records relate, or the date such tax is paid, whichever is later. The records of claimants required by [paragraph (c)](/current/title-27/section-53.24#p-53.24\(c\)) of this section shall be maintained for a period of at least three years after the date the claim is filed.
(e) *Reproduction of original records.*
(1) General books of account, such as cash books, journals, voucher registers, ledgers, etc., shall be maintained and preserved in their original form. However, reproductions of supporting records of details, such as invoices, vouchers, production reports, sales records, certificates, proofs of exportation, etc., may be kept in lieu of the original records. Any process may be used which accurately and timely reproduces the original record, and which forms a durable medium for reproducing and preserving the original record.
(2) *Copies of records treated as original records.* Whenever records are reproduced under this section, the reproduced records shall be preserved in conveniently accessible files, and provisions shall be made for examining, viewing, and using the reproduced records the same as if they were the original record. Such reproduced records shall be treated and considered for all purposes as though they were the original record. All provisions of law and regulations applicable to the original record are applicable to the reproduced record.
\[T.D. ATF-365, [60 FR 33670](https://www.federalregister.gov/citation/60-FR-33670), June 28, 1995, as amended by T.D. ATF-447, [66 FR 19088](https://www.federalregister.gov/citation/66-FR-19088), Apr. 13, 2001]
## Subparts D-F \[Reserved]
## Subpart G—Tax Rates
#### § 53.61 Imposition and rates of tax.
(a) *Imposition of tax.* Section 4181 of the Code imposes a tax on the sale of the following articles by the manufacturer, producer, or importer thereof:
(1) Pistols;
(2) Revolvers;
(3) Firearms (other than pistols and revolvers); and
(4) Shells and cartridges.
(b) *Parts or accessories* —
(1) *In general.* No tax is imposed by section 4181 of the Code on the sale of parts or accessories of firearms, pistols, revolvers, shells, and cartridges when sold separately or when sold with a complete firearm for use as spare parts or accessories. The tax does attach, however, to sales of completed firearms, pistols, revolvers, shells, and cartridges, and to sale of such articles that, although in knockdown condition, are complete as to all component parts.
(2) *Component parts.* Component parts are items that would ordinarily be attached to a firearm during use and, in the ordinary course of trade, are packaged with the firearm at the time of sale by the manufacturer or importer. All component parts for firearms are includible in the price for which the article is sold.
(3) *Nontaxable parts.* Parts sold with firearms that duplicate component parts that are not includible in the price for which the article is sold.
(4) *Nontaxable accessories.* Items that are not designed to be attached to a firearm during use or that are not, in the ordinary course of trade, provided with the firearm at the time of the sale by the manufacturer or importer are not includible in the price for which the article is sold.
(5) *Examples* —
(i) *In general.* The following examples are provided as guidelines and are not meant to be all inclusive.
(ii) *Component parts.* Component parts include items such as a frame or receiver, breech mechanism, trigger mechanism, barrel, buttstock, forestock, handguard, grips, buttplate, fore end cap, trigger guard, sight or set of sights (iron or optical), sight mount or set of sight mounts, a choke, a flash hider, a muzzle brake, a magazine, a set of sling swivels, and/or an attachable ramrod for muzzle loading firearms when provided by the manufacturer or importer for use with the firearm in the ordinary course of commercial trade. Component parts also include any part provided with the firearm that would affect the tax status of the firearm, such as an attachable shoulder stock.
(iii) *Nontaxable parts.* Nontaxable parts include items such as extra barrels, extra sights, optical sights and mounts (in addition to iron sights), spare magazines, spare cylinders, extra choke tubes, and spare pins.
(iv) *Nontaxable accessories.* Nontaxable accessories include items such as cleaning equipment, slings, slip on recoil pads (in addition to standard buttplate), tools, gun cases for storage or transportation, separate items such as knives, belt buckles, or medallions. Nontaxable accessories also include optional items purchased by the customer at the time of retail sale that do not change the tax classification of the firearm, such as telescopic sights and mounts, recoil pads, slings, sling swivels, chokes, and flash hiders/muzzle brakes of a type not provided by the manufacturer or importer of the firearm in the ordinary course of commercial trade.
(c) *Rates of tax.* Tax is imposed on the sale of the articles specified in section 4181 of the Code at the rates indicated below.
| | Percent |
| ----------------------------------------------- | ------- |
| (1) Pistols | 10 |
| (2) Revolvers | 10 |
| (3) Firearms (other than pistols and revolvers) | 11 |
| (4) Shells and cartridges | 11 |
(d) *Computation of tax.* The tax is computed by applying to the price for which the article is sold the applicable rate. For definition of the term “price” see section 4216 of the Code and the regulations contained in [subpart J of this part](/current/title-27/part-53/subpart-J).
(e) *Liability for tax.* The tax imposed by section 4181 of the Code is payable by the manufacturer, producer, or importer making the sale.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-404, [63 FR 52603](https://www.federalregister.gov/citation/63-FR-52603), Oct. 1, 1998]
#### § 53.62 Exemptions.
(a) *Firearms subject to the National Firearms Act.* Section 4182(a) provides that the tax imposed by section 4181 of the Code shall not attach to the sale of any firearms on which the tax imposed by section 5811 of the Code (relating to tax on the transfer of machine guns, short-barreled firearms, and other weapons) has been paid. Any manufacturer, producer, or importer claiming such an exemption from the tax imposed by section 4181 of the Code must maintain such records and be prepared to produce such evidence as will establish the right to the exemption.
(b) *Sales to Defense Department or to U.S. Coast Guard* —
(1) *Military department.* Section 4182(b) of the Code provides that the tax imposed by section 4181 of the Code shall not attach to the sale of firearms, pistols, revolvers, shells, or cartridges that are purchased with funds appropriated for a military department of the United States. For this purpose, the term “military department” means the Department of the Army, the Department of the Navy, and Department of the Air Force. Included in the Department of the Navy are naval aviation and the Marine Corps.
(2) *Coast Guard.* Section 655, title 14, U.S.C., provides that no tax on the sale or transfer of firearms, pistols, revolvers, shells, or cartridges may be imposed on such articles when bought with funds appropriated for the United States Coast Guard.
(3) *Supporting evidence.* Any manufacturer, producer, or importer claiming an exemption from the tax imposed by section 4181 of the Code by reason of section 4182(b) and section 655, title 14 of the Code must maintain such records and be prepared to produce such evidence as will establish the right to the exemption. Generally, clearly identified orders or contracts of a military department signed by an authorized officer of the military department will be sufficient to establish the right to the exemption. In the absence of such orders or contracts, a statement, signed by an authorized officer of a military department or the Coast Guard, that the prescribed articles were purchased with funds appropriated for that military department or the Coast Guard will constitute satisfactory evidence of the right to an exemption.
(c) *Small manufacturers, producers, and importers* —
(1) *Exemption.* Section 4182(c) of the Code provides that the tax imposed by section 4181 of the Code shall not attach to any pistol, revolver, or firearm manufactured, produced, or imported by a person who manufactures, produces, and imports less than an aggregate of 50 of those articles during the calendar year, regardless of when the articles are sold.
(2) *Controlled groups.* All persons treated as a single employer for purposes of subsection (a) or (b) of section 52 of the Code are treated as one person for purposes of [paragraph (c)(1)](/current/title-27/section-53.62#p-53.62\(c\)\(1\)) of this section.
(3) *Applicability.* The exemption described in [paragraph (c)(1)](/current/title-27/section-53.62#p-53.62\(c\)\(1\)) of this section applies to articles sold by the manufacturer, producer, or importer after September 30, 2005. Application of this exemption is based on the calendar year in which the manufacture, production, or importation of the articles in question took place and does not depend on when the sale occurs. In addition, each calendar year stands alone for purposes of applying the exemption.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-344, [58 FR 40354](https://www.federalregister.gov/citation/58-FR-40354), July 28, 1993; T.D. TTB-62, [72 FR 51711](https://www.federalregister.gov/citation/72-FR-51711), Sept. 11, 2007]
#### § 53.63 Other tax-free sales.
For provisions relating to tax-free sales of firearms and ammunition see:
(a) Section 4221 and [27 CFR 53.131](/current/title-27/section-53.131), “Tax-free sales; general rule”.
(b) Section 4223 and [27 CFR 53.132](/current/title-27/section-53.132), “Tax-free sale of articles to be used for, or resold for, further manufacture”.
(c) Section 4222 and [27 CFR 53.140](/current/title-27/section-53.140), “Registration”.
## Subparts H-I \[Reserved]
## Subpart J—Special Provisions Applicable to Manufacturers Taxes
#### § 53.91 Charges to be included in sale price.
(a) *In general.* The “price” for which an article is sold includes the total consideration paid for the article, whether that consideration is in the form of money, services, or other things. However, for purposes of the taxes imposed under chapter 32 of the Code, certain collateral charges made in connection with the sale of a taxable article must be included in the taxable sale price, whereas others may be excluded. Any charge which is required by a manufacturer, producer, or importer to be paid as a condition of its sale of a taxable article and which is not attributable to an expense falling within one of the exclusions provided in section 4216 of the Code or the regulations thereunder is includable in the taxable sale price. It is immaterial for this purpose that the charge may be paid to a person other than the manufacturer, producer, or importer, or that it may be separately billed to the purchaser as a charge earmarked for expenses incurred or to be incurred in his behalf, such as charges for demonstration or display of the article, for sales promotion programs, or otherwise. With respect to the rules relating to exclusion of charges for local advertising of a manufacturer's products, see section 4216(e) of the Code and [§ 53.100](/current/title-27/section-53.100). In the case of sales on credit, a carrying, finance, or service charge is excludable from the sale price if it is reasonably related to the costs of carrying the deferred portion of the sale price (such as interest on the deferred portion of the sale price, expenses of bookkeeping necessary to keep the records of such sales, and expenses of correspondence and other communication in connection with collection).
(b) *Tools and dies.* Separate charges for tools and dies used in the manufacture or production of a taxable article are to be included, in whole or in part, in the sale price on which the tax is based. It is immaterial whether the charges for such items are billed in a lump sum or are amortized or allocated to each of the taxable articles. If, at the termination of a contract to manufacture taxable articles, the tools and dies used in production pass to the purchaser, only the amount of depreciation of the tools and dies incurred in production, computed on a “production output” basis, should be included in the sale price. If the purchaser furnishes the tools and dies, the amount of the cost thereof, to the extent that such cost has been depreciated in the production of the taxable articles (computed on a “production output” basis), shall be included in determining the sale price of the articles for purposes of computing the tax.
(c) *Charges for warranty.* A charge for a warranty of an article which the manufacturer, producer, or importer requires the purchaser to pay in order to obtain the article shall be included in the sale price of the article on which the tax is computed. On the other hand, a charge for a warranty of a taxable article paid at the purchaser's option shall not be included in the sale price for purposes of computing tax thereon.
(d) *Charges for coverings, containers, and packing.* Any charge by the manufacturer, producer, or importer for coverings and containers of whatever nature used to pack an article for shipment shall be included as part of the sale price for the purpose of computing the tax, whether or not the charges are identified as such on the invoice or are billed separately. Even though there is an agreement that the manufacturer, producer, or importer will repay all or a portion of the charge for the coverings or containers upon the return thereof, the full charge nevertheless shall be included in the sale price. It is immaterial whether the charge made at the time of sale is more or less than the actual value of the covering or container. See [§ 53.173(b)(4)](/current/title-27/section-53.173#p-53.173\(b\)\(4\)) for provisions relating to the claiming of a credit or refund in the case of a price readjustment due to the return or repossession of a covering or container. Packing charges are to be included in the sale price whether the charges cover normal packing or special packing services, such as for extra protection of the article or for odd-lot quantities. This rule shall apply whether the packing services are initiated by the manufacturer, producer, or importer or are furnished at the request of the purchaser and whether the packing is performed by the manufacturer, producer, or importer or by another person at his request. If the purchaser supplies packing materials, the fair market value of such materials must be included in the tax base when computing tax liability on the sale of the article.
(e) *Taxable and nontaxable articles sold as a unit.* Where a taxable article and a nontaxable article are sold by the manufacturer as a unit, the tax attaches to that portion of the manufacturer's sale price of the unit which is properly allocable to the taxable article. Normally, the taxable portion of such a unit may be determined by applying to the manufacturer's sale price of the unit the ratio which the manufacturer's separate sale price of the taxable article bears to the sum of the sale prices of both the taxable and nontaxable articles, if such articles are sold separately by the manufacturer. Where the articles (or either one of them) are not sold separately by the manufacturer and do not have established sale prices, the taxable portion is to be determined from a comparison of the actual costs of the articles to the manufacturer. Thus, if the cost of the taxable article represents four-fifths of the total cost of the complete unit, the tax applies to four-fifths of the price charged by the manufacturer for the unit.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-312, [56 FR 31083](https://www.federalregister.gov/citation/56-FR-31083), July 9, 1991]
#### § 53.92 Exclusions from sale price.
(a) *Tax* —
(1) *Tax not part of taxable sale price.* The tax imposed by chapter 32 of the Code on the sale of an article is not part of the taxable sale price of the article. Thus, if a manufacturer computes the tax on a sale price which is determined without regard to the tax, and it charges the proper tax as a separate item, the amount of tax so charged does not become a part of the taxable sale price and no tax is due on the tax so charged. Where no separate charge is made as tax, it will be presumed that the price charged to the purchaser for the article includes the proper tax, and the proper percentage of such price will be allocated to the tax.
(2) *Computation of tax.* If an article subject to tax at the rate of 10 percent is sold for $100 and an additional item of $10 is billed as tax, $100 is the taxable selling price and $10 is the amount of tax due thereon. However, if the article is sold for $100 with no separate billing or indication of the amount of the tax, it will be presumed that the tax is included in the $100, and a computation will be necessary to determine what portion of the total amount represents the sale price of the article and what portion represents the tax. The computation is as follows:
[](https://img.federalregister.gov/ER25SE06.035/ER25SE06.035_original_size.png)
Thus, if the tax rate is 10 percent and the sale price including tax is $100, the taxable sale price is $90.91 (that is, $100 divided by (100+10)), and the tax is 10 percent of $90.91, or \$9.09.
(b) *Transportation, delivery, insurance, or installation charges* —
(1) *Charges incurred pursuant to sale.* Charges for transportation, delivery, insurance, installation, and other expenses actually incurred in connection with the delivery of an article to a purchaser pursuant to a bona fide sale shall be excluded from the sale price in computing the tax. Such charges include all items of transportation, delivery, insurance, installation, and similar expense incurred after shipment to a customer begins, in response to the customer's order, pursuant to a bona fide sale. However, costs of such nature incurred by a manufacturer, producer, or importer in transporting, in the normal course of business and for its benefit and convenience, articles from a factory or port of entry to a warehouse or other facility (regardless of the location of such warehouse or facility) are not considered as being incurred in connection with the delivery of an article to a purchaser pursuant to a bona fide sale, and charges therefor cannot be excluded from the sale price in computing tax liability. Similarly, an allowance granted by a manufacturer as reimbursement for expenses incurred by the purchaser in shipping used articles to the manufacturer for credit against the purchase price of taxable articles shall not be excluded from the sale price when computing tax due on the sale of the taxable articles. In any event, no charge may be excluded from the sale price unless the conditions set forth in [paragraph (b)(2)](/current/title-27/section-53.92#p-53.92\(b\)\(2\)) of this section are complied with. Said conditions are prescribed under the authority granted the Secretary in section 4216(a) of the Code.
(2) *Only actual expenses to be excluded.* Where a separate charge is made for transportation or other expenses incurred in connection with the delivery of an article to the purchaser pursuant to a bona fide sale, there shall be excluded in arriving at the sale price subject to tax only that portion of the charge which represents the actual expenses incurred for the transportation or other excludable expenses. Where a separate charge is less than the actual expense, the difference is presumed to be included in the billed price. Such difference, together with the separate charge, shall be excluded in arriving at the sale price on which the tax is computed. Similarly, where no separate charge is made but the manufacturer, producer, or importer incurs an expense of the type to which this paragraph has application, the amount of such expense actually incurred shall be excluded from the sale price on which the tax is computed. Where transportation expense is incurred in conjunction with a shipment composed of both taxable and nontaxable articles, only the portion of the expense allocable to the taxable articles shall be excludable. In general, unless the taxpayer establishes to the satisfaction of the appropriate TTB officer that another method reasonably apportions such freight expense between taxable and nontaxable articles, such expense should be apportioned on the basis of the relative weights (or, if available, the relative published tariff rates) applicable to the taxable and nontaxable articles. Where it is not feasible to apportion such expense on the basis of relative weights or tariff rates, the expense shall be apportioned on another reasonable basis; for example, in the case of a shipment including both taxable and nontaxable articles which are subject to the same tariff rate, it may be appropriate to apportion the transportation expense on the basis of the relative sale prices. A charge for insurance in connection with the delivery of an article to a purchaser is considered to represent an expense actually incurred only to the extent that an amount equivalent to such charge is paid or payable by the manufacturer to a person authorized to assume such insurance risk.
(3) *Transportation, delivery, or installation services performed by manufacturer.* For purposes of computing the taxable sale price of articles, it is immaterial whether the transportation, delivery, or other services of the type to which this paragraph has application are performed by a common carrier or independent agency for or on behalf of the manufacturer, producer, or importer, or are performed by the manufacturer, producer, or importer with the use of its own vehicles or other facilities. Thus, where a manufacturer, producer, or importer performs the transportation, delivery, or other services with its equipment, tools, employees, etc., the cost of such services allocable to the sale of the taxable article shall be excluded. In determining whether an expense is an excludable transportation or delivery expense, only those expenses incurred by reason of the fact that the purchaser accepts delivery at some point other than the manufacturer's place of business shall be considered excludable transportation or delivery expenses. All expenses incurred in placing an article packed, ready for shipment on the loading dock at the manufacturer's factory are not excludable transportation or delivery expenses. An allowance granted by the manufacturer, producer, or importer to the purchaser for transportation, delivery, or other expenses incurred or to be incurred by the purchaser in connection with the sale shall be excluded in computing the taxable sale price, if charges for similar expenses would be excludable if incurred by the manufacturer.
(4) *Records in support of exclusion.* Every manufacturer, producer, or importer making sales of taxable articles shall keep records which will disclose the amount of transportation, delivery, insurance, installation or other expense actually incurred by it in connection with the delivery of a taxable article to a purchaser pursuant to a bona fide sale.
(c) *Other charges.* A charge or expense not within the scope of [paragraph (a)](/current/title-27/section-53.92#p-53.92\(a\)) or [(b)](/current/title-27/section-53.92#p-53.92\(b\)) of this section, whether or not separately stated, may not be excluded in computing the taxable sale price unless it can be shown by adequate records that the charge or expense is not properly included as a manufacturing or selling expense or is in no way incidental to placing the article in condition packed ready for shipment. Commissions to manufacturers' agents, or allowances, payments, or adjustments made to, and for the benefit of, persons other than the purchaser may not be excluded or deducted, under any condition, in computing the sale price upon which the tax is computed.
#### § 53.93 Other items relating to tax on sale price.
(a) *Exchanges.* If, in connection with the sale of an article subject to a tax imposed under chapter 32 of the Code on the price for which sold, a manufacturer receives from its vendee another article in exchange, the tax on the manufacturer's sale shall be computed on the basis of the amount allowed for the article received from the vendee, plus any additional amount charged the vendee.
(b) *Replacements under warranty.* If an article, subject to a tax imposed under chapter 32 of the Code on the price for which sold, is returned to the manufacturer by reason of the failure of the article under a warranty as to its quality or service, and a new article is given by the manufacturer, free, or at a reduced price, the tax on the new article shall be computed on the actual amount, if any, to be paid to the manufacturer for the new article. See [§ 53.174(b)](/current/title-27/section-53.174#p-53.174\(b\)) for the circumstances under which the allowance made by the manufacturer, producer, or importer upon the return of the first article constitutes a price readjustment of the sale price of the first article and the extent, if any, to which a credit may be allowed, or refund made, of the tax paid by the manufacturer, producer, or importer on the sale of the first article.
(c) *Readjustments in sale price.* Readjustment in sale price (such as allowable discounts, rebates, bonuses, etc.) cannot be anticipated. The tax must be based upon the original price unless the readjustments have actually been made prior to the close of the period for which the tax upon the sale is returned. However, if the price upon which the tax was computed is subsequently readjusted, credit may be taken against the tax due on a subsequent return or a claim for refund filed as provided by section 6416(b)(1) of the Code and [§§ 53.174-53.176](/current/title-27/section-53.174).
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-344, [58 FR 40354](https://www.federalregister.gov/citation/58-FR-40354), July 28, 1993]
#### § 53.94 Constructive sale price; scope and application.
(a) *In general.* Section 4216(b) of the Code pertains to those taxes imposed under chapter 32 of the Code that are based on the price for which an article is sold, and contains the provisions for constructing a tax base other than the actual sale price of the article, under certain defined conditions.
(b) *Specific applications.*
(1) Section 4216(b)(1) of the Code applies to:
(i) Arm's-length sales at retail or on consignment, other than those sales at retail and to retailers to which section 4216(b)(2) of the Code and [§ 53.96](/current/title-27/section-53.96) apply; and
(ii) Sales otherwise than at arm's length, and at less than fair market price.
(2) Section 4216(b)(2) of the Code applies generally to arm's-length sales of an article at retail or to retailers, or both, where the manufacturer also sells the same article to wholesale distributors.
(3) Section 4216(b)(3) of the Code provides a formula for determining a constructive sale price for sales of taxable articles between members of an affiliated group of corporations (as “affiliated group” is defined in section 1504(a) of the Code) in those instances where the purchasing corporation regularly resells to retailers but does not regularly resell to wholesale distributors, and except for situations where section 4216(b)(4) of the Code applies.
(4) Section 4216(b)(4) of the Code provides a special method for computing a constructive sale price for sales of taxable articles between affiliated corporations where the purchasing corporation sells only to retailers, and the normal method of selling within the industry is for manufacturers to sell to wholesale distributors.
(c) *Definitions.* For purposes of section 4216(b) of the Code and [§§ 53.94-53.97](/current/title-27/section-53.94) and unless otherwise indicated:
(1) *Sale at retail.* A “sale at retail,” or a “retail sale”, is a sale of an article to a purchaser who intends to use or lease the article rather than resell it. The fact that articles are sold in wholesale lots, or at wholesale prices, will not change the character of such sales as “sales at retail” if the purchaser is not engaged in the business of reselling such articles, and acquires them for the purpose of using them rather than reselling them.
(2) *Retail dealers.* A “retail dealer”, or “retailer”, is a person engaged in the business of selling articles at retail.
(3) *Wholesale distributor.* The term “wholesale distributor” means a person engaged in the business of selling articles to persons engaged in the business of reselling such articles.
#### § 53.95 Constructive sale price; basic rules.
(a) *In general.* Section 4216(b)(1) of the Code sets forth the conditions that require the Secretary to construct a sale price on which to compute a tax imposed under chapter 32 of the Code on the price for which an article is sold. The section requires a constructive sale price to be established where a taxable article is:
(1) Sold at retail;
(2) Sold while on consignment; or,
(3) Sold otherwise than through an arm's-length transaction at less than fair market price.
(b) *Sales at retail.* Section 4216(b)(1)(A) of the Code relates to the determination of a constructive sale price for sales of taxable articles sold at arm's-length and at retail. In the case of such sales, the constructive sale price is the highest price for which such articles are sold to wholesale distributors, in the ordinary course of trade, by manufacturers or producers thereof, as determined by the Secretary. If the constructive sale price is less than the actual sale price, the constructive sale price shall be used as the tax base. If the constructive sale price is not less than the actual sale price, the actual sale price shall be considered as not less than fair market, and shall be used as the tax base. In determining the highest price for which articles are sold by manufacturers to wholesale distributors, there must be taken into consideration the normal industry practices with respect to inclusions and exclusions under section 4216(a) of the Code. However, once a constructive sale price has been determined by the Secretary, no further adjustment of such price shall be made. The provisions of section 4216(b)(1)(A) of the Code and this paragraph shall not apply in those instances where the provisions of section 4216(b)(2) of the Code and [§ 53.96](/current/title-27/section-53.96) apply.
(c) *Sales on consignment.* As in the case of sales at retail, the constructive sale price for sales on consignment shall be the price for which such articles are sold, in the ordinary course for trade, by manufacturers or producers thereof, as determined by the Secretary. For purposes of section 4216(b)(1)(B) of the Code and this paragraph, an article is considered to be sold on consignment if it is sold while it is on consignment to a person which has the right to sell, and does sell, such article in its own name, but never receives title to the article from the manufacturer. Ordinarily, the constructive sale price of an article sold on consignment is the net price received by the manufacturer from the consignee. The provisions of section 4216(b)(1)(B) of the Code and this paragraph shall not apply if the provisions of section 4216(b)(2) of the Code and [§ 53.96](/current/title-27/section-53.96) apply.
(d) *Sales not at arm's-length.* For purposes of section 4216(b)(1)(C) of the Code and this paragraph, a sale is considered to be made under circumstances otherwise than at “arm's-length” if:
(1) One of the parties is controlled (in law or in fact) by the other, or there is common control, whether or not such control is actually exercised to influence the sale price, or
(2) The sale is made pursuant to special arrangements between a manufacturer and a purchaser.
In case of an article sold otherwise than at arm's-length, and at less than fair market price, the constructive sale price shall be the price for which such articles are sold, in the ordinary course of trade, by manufacturers or producers thereof, as determined by the Secretary. Once such a constructive sale price has been determined, no further adjustment of such price shall be made. See sections 4216(b) (3) and (4) of the Code, and [§ 53.97](/current/title-27/section-53.97), for specific methods for determining constructive sale prices for intercompany sales under certain defined conditions.
#### § 53.96 Constructive sale price; special rule for arm's-length sales.
(a) *In general.* Section 4216(b)(2) of the Code provides a special rule under which a manufacturer shall determine a constructive sale price for this sale of taxable articles at retail, and to retail dealers, under certain conditions. The rule is applicable where:
(1) The manufacturer regularly sells such articles at retail, or to retailers, or both, as the case may be,
(2) The manufacturer also regularly sells such articles to one or more wholesale distributors in arm's-length transactions, and the manufacturer establishes that its prices in such cases are determined without regard to any benefit to be derived under section 4216(b)(2) of the Code, and
(3) The transactions are arm's-length transactions.
(4) A manufacturer meeting the foregoing requirements shall base its tax liability for sales at retail and sales to retailers on the lower of its actual sale price or the highest price for which it sells the same articles under the same conditions to wholesale distributors.
(b) *Definitions.* For purposes of section 4216(b)(2) of the Code and this section:
(1) *Actual sale price.* “Actual sale price” means the actual selling price for an article determined in the same manner as sale price is determined for a taxable sale. Accordingly, such price must reflect the inclusions and exclusions set forth in sections 4216(a) and (e) of the Code, and any price adjustments described in section 6416(b)(1) of the Code.
(2) *Highest price to wholesale distributors.* The “highest price” charged wholesale distributors for an article by a manufacturer, producer, or importer thereof, is the highest price at which the manufacturer, producer, or importer sells the article to wholesale distributors, determined without regard to quantity. Such price shall be determined in the same manner as sale price is determined for a taxable sale with respect to the inclusions and exclusions under sections 4216(a) and (e) of the Code; however, since the price is to be a “highest” price, no further adjustment may be made for price readjustments under section 6416(b)(1) of the Code.
(3) *Regular sales.* An article is considered to be sold “regularly” at retail or to retailers if sales are made at retail or to retailers periodically and recurringly as a regular part of the seller's business. If a seller makes only isolated or casual sales of an article at retail or to retailers, it is not considered to be selling “regularly” at retail or to retailers. Similarly, a manufacturer is considered to be making regular sales of an article to one or more distributors if it sells the article to at least one distributor periodically and recurringly as a regular part of its business.
(4) *Normal method of sales in industry.* In the absence of a showing to the appropriate TTB officer of a more appropriate manner of determining the normal method of sales within an industry which is practical in application, the normal method of sales within an industry shall be regarded as not being at retail or to retailers, or both, if the industry dollar volume of sales which are at retail or to retailers, or both, is less than half the total industry dollar volume of sales at all levels of distribution by manufacturers, producers, or importers, including sales to other manufacturers, producers, or importers.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-312, [56 FR 31083](https://www.federalregister.gov/citation/56-FR-31083), July 9, 1991; T.D. TTB-91, [76 FR 5481](https://www.federalregister.gov/citation/76-FR-5481), Feb. 1, 2011]
#### § 53.97 Constructive sale price; affiliated corporations.
(a) *In general.* Sections 4216(b) (3) and (4) of the Code establish procedures for determining a constructive sale price under section 4216(b)(1)(C) of the Code for sales between corporations that are members of the same “affiliated group”, as that term is defined in section 1504(a) of the Code.
(b) *Sales to which section 4216(b)(3) of the Code applies.* Section 4216(b)(3) of the Code provides a procedure for determining a constructive sale price under section 4216(b)(1)(C) of the Code in those instances where:
(1) A manufacturer, producer or importer regularly sells a taxable article to a wholesale distributor which is a member of the same affiliated group as the manufacturer, producers or importer, and
(2) The wholesale distributor regularly sells such article to one or more independent retailers, but does not regularly sell to wholesale distributors. Under such circumstances the constructive sale price for the article shall be an amount equal to 90 percent of the lowest price for which the distributor regularly sells the article in arm's-length transactions to such independent retailers. Once the constructive sale price has been determined, no adjustment shall be made for inclusions or exclusions under section 4216(a) of the Code or price readjustments under section 6416(b)(1) of the Code. If both sections 4216(b)(3) and 4216(b)(4) of the Code apply with respect to the sale of an article, the constructive sale price for such article shall be the lower of the prices computed under sections 4216(b)(3) and 4216(b)(4).
(c) *Sales to which section 4216(b)(4) of the Code applies.* Section 4216(b)(4) of the Code provides a procedure for determining a constructive sale price under section 4216(b)(1)(C) of the Code in those instance where:
(1) A manufacturer, producer, or importer regularly sells (except for tax-free sales) a taxable article only to a wholesale distributor which is a member of the same affiliated group as the manufacturer, producer, or importer,
(2) The distributor regularly sells (except for tax-free sales) such article only to retail dealers, and
(3) The normal method of sales for such articles within the industry is to sell such articles in arm's-length transactions to wholesale distributors.
(4) Under section 4216(b)(4) of the Code, the constructive sale price of such article shall be the median price at which the distributor, at the time of the sale by the manufacturer, resells the article to retail dealers, reduced by a percentage of such price equal to the percentage which:
(i) The difference between the median price for which comparable articles are sold to wholesale distributors, in the ordinary course of trade, by manufacturers of producers thereof, and the median price at which such wholesale distributors in arm's-length transactions sell such comparable articles to retailers, is of
(ii) The median price at which such wholesale distributors in arm's-length transactions sell such comparable articles to retailers.
(iii) For purposes of this paragraph, the “median price” for which an article is sold at a particular level of distribution is the price midway between the highest and lowest prices charged vendees at the particular level of distribution. Where only one price is charged at a level of distribution, “median price” is equivalent to “actual price”. All sale prices referred to in [paragraphs (c)](/current/title-27/section-53.97#p-53.97\(c\)) and [(d)](/current/title-27/section-53.97#p-53.97\(d\)) of this section are prices that must reflect the inclusions and exclusions set forth in section 4216(a) of the Code. However, once a constructive sale price has been determined under these paragraphs, no further adjustment of such price is allowed.
(d) *Application of section 4216(b)(4) of the Code.* The application of section 4216(b)(4) of the Code and [paragraph (c)](/current/title-27/section-53.97#p-53.97\(c\)) of this section may be illustrated by the following example:
# Example.
M, a corporation engaged in the manufacture of article X, sold 100 of such articles at $10.00 per article to a wholesale distributor N, a corporation engaged in the business of selling X articles to independent retail dealers. N is a member of the same affiliated group of corporations as M. M sells X articles only to N. The normal method of manufacturers' sales of X articles in the industry is to sell to independent wholesale distributors. N corporation sells X articles to retailers for $15.00 each. The price for which comparable X articles are sold to wholesale distributors in the ordinary course of trade by manufacturers thereof is $12.00 per article. Wholesale distributors sell X articles to retailers in the ordinary course of trade for $16.00 per article. Under the foregoing facts the constructive sale price determined under section 4216(b)(4) of the Code and this paragraph is \$11.25, computed as follows:
[](https://img.federalregister.gov/EC05OC91.020/EC05OC91.020_original_size.png)
(e) *Determination of “lowest price”.* In addition to other considerations, in determining a “lowest price” for purposes of sections 4216(b) (1) and (3) of the Code and [§ 53.97](/current/title-27/section-53.97), such price shall be determined:
(1) Without requiring that a given percentage of sales be made at that price (provided that the volume of sales made at that price is great enough to indicate that those sales have not been engaged in primarily to establish a lower tax base), and
(2) Without including any charge for a fixed amount that the purchaser has an unconditional right to recover on the basis of a contractual arrangement existing at the time of sale.
(f) *Definitions.* For purposes of this section and paragraphs (3) and (4) of section 4216(b) of the Code, the term “regularly sells” has the same meaning as that accorded the term “regular sales” in [§ 53.96(b)(3)](/current/title-27/section-53.96#p-53.96\(b\)\(3\)), and the term “normal method of sales in the industry” has the same meaning as accorded that term in [§ 53.96(b)(4)](/current/title-27/section-53.96#p-53.96\(b\)\(4\)).
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-312, [56 FR 31083](https://www.federalregister.gov/citation/56-FR-31083), July 9, 1991]
#### § 53.98 Computation of tax on leases and installment sales.
(a) *Leases.* When a taxable article is leased by a manufacturer, producer, or importer, liability for tax is incurred, except as provided by section 4217(b) of the Code and [§ 53.104](/current/title-27/section-53.104), on each payment made with respect to such lease. Tax is payable on each lease payment as long as the article is leased by the manufacturer, producer, or importer. The tax payable with respect to each lease payment is a percentage of each payment based on the rate of tax, if any, in effect on the date the lease payment is due. If the article is subsequently sold by the manufacturer, producer, or importer, the tax applies also to such sale, without regard to the tax paid when the article was leased. For definition of the term “lease”, see [§ 53.103](/current/title-27/section-53.103).
(b) *Installment sales.* When a taxable article is sold under an installment payment contract with title reserved in the seller, or under a conditional sale contract, chattel mortgage arrangement or other arrangement creating a security interest with payments to be made in installments, tax shall be computed and paid on each payment made by the purchaser. The tax payable with each payment is a percentage of each payment based on the rate of tax, if any, in effect on the date the payment is due. The part of each payment that is subject to tax is that portion of the payment equal to the percentage of the total portion of the payment equal to the percentage of the total charge for the article that is subject to tax. For example, if the total charge for the article is $1,000, and of the total amount charged only 90 percent thereof, or $900, is subject to tax by reason of exclusions, then only 90 percent of the installment payment is subject to tax. If the tax base is a constructive sale price computed under section 4216(b) of the Code that is less than the actual sale price of the article, the portion of each payment subject to tax is the percentage of such payment equal to the percentage that the constructive sale price bears to the actual sale price. For example, if an article is sold at retail for $100, and the constructive sale price for such an article computed under the provisions of section 4216(b)(1)(A) of the Code is $75, the percentage which the constructive sale price bears to the actual sale price is 75 percent. Accordingly, only 75 percent of each installment payment is subject to tax.
(c) *Sales on credit.* Where articles are sold on credit under conditions other than those specified in [paragraph (b)](/current/title-27/section-53.98#p-53.98\(b\)) of this section, the entire tax shall be reported and paid with the return covering the period in which the sale is made, even though the price may not be paid to the manufacturer, producer, or importer until a later date, or not paid at all.
#### § 53.99 Sales of installment accounts.
(a) *In general.* Except as provided in [paragraph (d)](/current/title-27/section-53.99#p-53.99\(d\)) of this section, in case of a sale or other disposition by a manufacturer, producer, or importer of an installment account of the type specified in section 4216(c) of the Code, the tax shall not apply to subsequent installment payments on such account. Instead, there shall be paid an amount equal to the difference between the tax previously paid on such installment account and the total tax computed by applying:
(1) To each installment due before the sale of the installment account, the rate of tax applicable at the time payment thereof was due, and
(2) To each installment, the time for payment of which has not arrived, the rate of tax which, under the provisions of chapter 32 of the Code as in effect on the date of the sale of the installment account, is (or is to be) in effect on the date such installment is due. However, see [paragraph (b)](/current/title-27/section-53.99#p-53.99\(b\)) of this section if the sale is made in a bankruptcy or insolvency proceeding. The tax due under this paragraph shall be included in the return for the period in which the account is sold.
(b) *Sale in bankruptcy or insolvency proceeding.* In the case of a sale of an installment account of a manufacturer, producer, or importer pursuant to the order of, or subject to the approval of, a court of competent jurisdiction in a bankruptcy or insolvency proceeding, the amount of tax due shall be computed and paid as provided in [paragraph (a)](/current/title-27/section-53.99#p-53.99\(a\)) of this section but shall not exceed the amount of tax computed by multiplying:
(1) The proportionate share of the amount for which such accounts are sold which is allocable to each unpaid installment payment, by
(2) The rate of tax which, under the provisions of chapter 32 of the Code as in effect on the date of the sale of the installment account, is (or is to be) in effect on the date such payment is due.
(c) *Collection of installment accounts on behalf of the manufacturer.* Where a manufacturer, producer, or importer retains title to an installment account but turns it over to another person for collection on a fee basis, no sale of such account (or other disposition as contemplated in section 4216(d) of the Code) has been made. The tax shall continue to be paid as provided by section 4216(c) of the Code.
(d) *Returned installment accounts.* Where an installment account which has been sold or otherwise disposed of is returned to the manufacturer, producer, or importer who sold it under an agreement under which the account was sold, and credit or refund has been allowed under section 6416(b)(5) of the Code and [§ 53.183](/current/title-27/section-53.183), the manufacturer, producer, or importer shall pay tax as provided by section 4216(c) of the Code and [§ 53.98](/current/title-27/section-53.98) on any subsequent payments made on such returned installment account until such time as there shall have been paid the total tax liability with respect to the account as computed under [paragraph (a)](/current/title-27/section-53.99#p-53.99\(a\)) of this section.
(e) *Limitation.* The sum of the amounts payable under this section and [§ 53.98](/current/title-27/section-53.98) or an installment account shall not exceed the total amount of tax which would be payable if such installment account had not been sold or otherwise disposed of (computed as provided in subsection (c)).
#### § 53.100 Exclusion of local advertising charges from sale price.
(a) *In general.* Section 4216(e) of the Code deals with the treatment to be accorded charges made by a manufacturer for, and reimbursements by a manufacturer or expenditures in connection with the advertising of certain articles subject to excise tax under chapter 32 of the Code. Section 4216(e) of the Code provides an exclusion (which is in addition to the exclusions provided by section 4216(a) of the Code and [§ 53.92](/current/title-27/section-53.92)) in respect of charges for local advertising, as defined in [paragraph (b)](/current/title-27/section-53.100#p-53.100\(b\)) of this section, for purposes of determining the price for which an article is sold. See [paragraph (c)](/current/title-27/section-53.100#p-53.100\(c\)) of this section. The exclusion provided by section 4216(e) of the Code and [paragraph (c)](/current/title-27/section-53.100#p-53.100\(c\)) of this section has application only if the advertising is broadcast over a radio or television station, appears in a newspaper or magazine, or is displayed by means of an outdoor advertising sign or poster. Section 4216(e) of the Code also provides an overall limitation in respect of the sum of the amount of the exclusions from price as charges for local advertising and the amount of the readjustments authorized under section 6416(b)(1) of the Code (relating to credits or refunds for price readjustments) in respect of reimbursements by a manufacturer of expenditures for local advertising. See [§ 53.101](/current/title-27/section-53.101). For provisions prohibiting exclusion from price or readjustment of price in respect of charges for, and reimbursements of expenditures for, advertising other than local advertising, see [§ 53.102](/current/title-27/section-53.102).
(b) *Definition of local advertising* —
(1) *In general.* For purposes of the regulations under sections 4216(e) and 6416(b)(1) of the Code ([§§ 53.100-53.102](/current/title-27/section-53.100) and [53.173-53.176](/current/title-27/section-53.173)), the term “local advertising” means advertising which relates to an article with respect to which tax is imposed under chapter 32 of the Code on the price for which sold and which:
(i) Is initiated or obtained by the purchaser or any subsequent vendee,
(ii) Names the article for which the price is determinable under section 4216 and states the location at which such article may be purchased at retail, and
(iii) Is broadcast over a radio station or television station, appears in a newspaper or magazine, or is displayed by means of an outdoor advertising sign or poster.
(2) *Initiating or obtaining advertising.* For purposes of [paragraph (b)(1)](/current/title-27/section-53.100#p-53.100\(b\)\(1\)) of this section, the advertising must be initiated or obtained by one or more of the persons in the chain of distribution of the article (wholesale distributor, jobber, dealer, etc.) who purchased the article for resale. For purposes of this subparagraph, the manufacturer is not considered to be one of the persons in the chain of distribution of the article. In general, advertising of an article is considered to be initiated or obtained by one or more persons in the chain of distribution of the article if any such person:
(i) Takes an active part in the actual planning and development, or in the arrangements or negotiations leading to the development, of the form and content of the advertising, or
(ii) Contracts for the placement of the advertising.
The participation by the manufacturer of the article in the planning, development, or placement of the advertising is immaterial provided the advertising is in fact initiated or obtained by one or more persons in the chain of distribution of the article. Furthermore, it is immaterial whether or not the advertising is subject to the approval of the manufacturer of the article. However, if no person in the chain of distribution of the article takes an active part in the actual planning and development, or in the arrangements or negotiations leading to the development, of the form and content of the advertising, but, rather, all such planning, development, arrangements, and negotiations are accomplished by the manufacturer of the article, then such manufacturer is considered to have initiated the advertising, and if he also contracts for the placement of the advertising, such advertising does not qualify as “local advertising”.
(3) *Identification of article and sales location.* To meet the requirements of [paragraph (b)(1)](/current/title-27/section-53.100#p-53.100\(b\)\(1\)) of this section, the advertising must identify the article for which the price is determinable under section 4216 of the Code and give the location or locations at which the article may be purchased at retail. All products taxable at the same rate under the same section of chapter 32 of the Code shall be considered to be an “article” for purposes of the preceding sentence. No specific method or means of identification is prescribed. The identification of the article may be made through the use of the name of the manufacturer or the use of an established trade-mark, such as a seal, picture, letter or letters, etc., or a combination thereof. The advertising must identify the particular retail establishment or establishments at which the article may be purchased at retail but need not specify the location of any such establishment in terms of the number by which the premises are designated or the name of the street on which the retail premises are situated. However, the location of the retail premises must be described sufficiently, as, for example, by reference to a particular named shopping area or shopping center, to enable customers to find the retail establishment.
(4) *Determination of costs of local advertising.* Where an advertisement identifies more than one article, and all such articles are not taxable, or are not taxable at the same rate under the same section of chapter 32 of the Code, a reasonable allocation of the cost of the advertisement must be made among:
(i) Articles taxable at the same rate under the same section of the Code, and
(ii) Articles which are not taxable under chapter 32 of the Code.
For example, in the case of a single page newspaper or magazine advertisement, an allocation of costs reflecting the lineage or space devoted to the specified categories will be considered to reflect a reasonable allocation of the cost of advertising the different articles. As a general rule, only the cost of the “spot” portion identifying the retail establishment is considered “local advertising” in the case of national television or radio programs.
(5) *Meaning of “newspaper”.* The term *newspaper,* as used in [paragraph (b)(1)](/current/title-27/section-53.100#p-53.100\(b\)\(1\)) of this section, is limited to those publications which are commonly understood to be newspapers and which are printed and distributed periodically at daily, weekly, or other short intervals for the dissemination of news of a general character and of a general interest. The term does not include handbills, circulars, flyers, or the like, unless printed and distributed as a part of a publication which constitutes a newspaper within the meaning of this subparagraph. Neither does the term include any publication which is issued to supply information on certain subjects of interest to particular groups unless such publication otherwise qualifies as a newspaper within the meaning of this subparagraph. For purposes of this subparagraph, advertising is not considered to be news of a general character and of a general interest.
(6) *Meaning of “magazine”.* The term *magazine,* as used in [paragraph (b)(1)](/current/title-27/section-53.100#p-53.100\(b\)\(1\)) of this section, is limited to those publications which are:
(i) Commonly understood to be magazines,
(ii) Printed and distributed periodically at least twice a year, and
(iii) Published for the dissemination of information of a general nature or of special interest to particular groups.
(iv) The term does not include handbills, circulars, flyers or the like, unless printed and distributed as a part of a publication which constitutes a magazine within the meaning of this subparagraph. For purposes of this subparagraph, advertising is not considered to be information of a general nature or information of special interest to particular groups within the contemplation of [paragraph (b)(6)(iii)](/current/title-27/section-53.100#p-53.100\(b\)\(6\)\(iii\)) of this section.
(7) *Meaning of “outdoor advertising sign or poster”.* The term “outdoor advertising sign or poster”, as used in [paragraph (b)(1)](/current/title-27/section-53.100#p-53.100\(b\)\(1\)) of this section, means a sign or poster displaying advertising matter, which is located outside of a roofed enclosure. This term includes both signs or posters on billboards, whether placed on or affixed to land, buildings, or other structures, and those which are displayed on or attached to moving objects, provided the signs or posters are located outside of a roofed enclosure. The term “roofed enclosure” means a roof structure which is enclosed on more than one-half of its sides by walls, fences, or other barriers.
(c) *Exclusion* —
(1) *Conditions and limitations.* A charge for local advertising which is required by a manufacturer to be paid as a condition to his sale of an article is not a part of the taxable price of the article, to the extent that such charge meets each of the following conditions and limitations:
(i) Such charge does not exceed 5 percent of the difference between:
(A) An amount which would constitute the taxable price of the article (computed at the time of the sale of the article) if no part of any charge for local advertising were excludable in computing taxable price, and
(B) The amount of any separate charge for local advertising, whatever the amount of such charge may be,
(ii) Such charge is specifically shown as a separate charge for local advertising on the invoice or statement covering the sale of the article.
(iii) Such charge is billed by the manufacturer with the intention on his part of repaying the amount of the charge to the person purchasing the article from him, or to any person who subsequently purchases the article for resale, in reimbursement of costs incurred for local advertising of such article or some other article or articles taxable at the same rate under the same section of the Code. In the absence of evidence to the contrary, the fact of such intention will be assumed in all cases where the manufacturer and his vendees are parties to an advertising plan which calls for such repayments, or the manufacturer can otherwise establish that the vendees to whom he bills such charges understand and expect that such repayments will be made.
(2) *When exclusion ceases to apply.* To the extent that charges for local advertising meet the conditions and limitations stated in [paragraph (c)(1)](/current/title-27/section-53.100#p-53.100\(c\)\(1\)) of this section, such charge is excludable in computing the taxable price of the article in respect of which the charge was made. However, the exclusion will cease to apply in respect of any part of such charge which the manufacturer fails to repay before May 1 of the calendar year following the calendar year in which the article was sold, to the person who purchased the article from him, or to some other person who subsequently purchases the article for resale, in reimbursement of costs incurred for local advertising of such article or some other article or articles taxable at the same rate under the same section of the Code. If, before such May 1, any part of the charge so excluded has not been so repaid, the manufacturer becomes liable for tax on such May 1 in the same manner as if an article taxable under such section of the Code had been sold by him on such May 1 at a taxable price equivalent to that part of the charge not so repaid. However, see [paragraph (b)(2) of § 53.175](/current/title-27/section-53.175#p-53.175\(b\)\(2\)), relating to price readjustments in cases where local advertising charges are not repaid before such May 1 but are subsequently paid over by the manufacturer to his vendees in reimbursement of costs for local advertising. For provisions relating to the method of determining whether a payment by a manufacturer is or is not attributable to an excluded local advertising charge, see [paragraph (b)(3) of § 53.101](/current/title-27/section-53.101#p-53.101\(b\)\(3\)). In any case where the payment is determined to be attributable to such a charge, the date of the sale in connection with which the charge was made shall be determined on a first-in-first-out basis in respect of the vendee to whom the charge was billed by the manufacturer.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-312, [56 FR 31083](https://www.federalregister.gov/citation/56-FR-31083), July 9, 1991]
#### § 53.101 Limitation on aggregate of exclusions and price readjustments.
(a) *In general.* The sum of the amount excluded from taxable price in respect of charges for local advertising, as provided in section 4216(e)(1) of the Code and [§ 53.100](/current/title-27/section-53.100), plus the amount of the readjustments for which credits or refunds may be claimed in respect of local advertising, as provided in section 6416(b)(1) of the Code and [§ 53.175](/current/title-27/section-53.175), is subject to an overall 5 percent limitation. This limitation applies to each manufacturer, as of the close of each calendar quarter, in respect of all articles taxable under the same section of chapter 32 of the Code which were sold by such manufacturer in such quarter (and the preceding quarter or quarters, if any, in the calendar year).
(b) *Computation of overall 5 percent limitation* —
(1) *In general.* The limitation prescribed by section 4216(e)(2) of the Code (the “overall 5 percent limitation” referred to in [paragraph (a)](/current/title-27/section-53.101#p-53.101\(a\)) of this section) as to the total of the exclusions from price and readjustments of price which may be claimed for local advertising in respect of all articles taxable under the same section of Chapter 32 of the Code shall be computed as of the close of each calendar quarter of the calendar year. The overall 5 percent limitation is 5 percent of the difference between:
(i) The amount which would constitute the total taxable price (computed at the time of sale) of all articles taxable under the same section of chapter 32 of the Code sold by the manufacturer during the elapsed calendar quarters of the calendar year, if no part of any charge for local advertising were excludable in computing taxable price, and
(ii) The total of all amounts billed as separate charges for local advertising of such articles (whatever the amount of any single charge of the total of all charges).
(iii) In making the computations under [paragraphs (b)(1) (i)](/current/title-27/section-53.101#p-53.101\(b\)\(1\)\(i\)) and [(ii)](/current/title-27/section-53.101#p-53.101\(b\)\(1\)\(ii\)) of this section, credits or refunds under section 6416(b) of the Code of tax paid on the sale of any such articles are to be disregarded and articles sold tax-free by the manufacturer are to be excluded. The amount by which the overall 5 percent limitation computed as of the close of a particular calendar quarter in respect of articles taxable under the same section of chapter 32 of the Code exceeds the sum of the charges for local advertising excluded in computing the taxable price and the amount of reimbursements for local advertising of such articles made during the elapsed calendar quarters of the calendar year, in respect of which credit or refund has been claimed, represents the unused portion of the overall 5 percent limitation. Such unused portion is the maximum amount of reimbursements for local advertising in respect of which credit or refund may be claimed at the close of the particular calendar quarter, subject to the applicable conditions and limitations governing the right to claim a credit or refund in respect of local advertising (see [§ 53.175](/current/title-27/section-53.175)). The unused portion of the overall 5 percent limitation as of the close of the fourth calendar quarter of a calendar year in respect of which credit or refund may not be claimed as of the close of such quarter must be disregarded in computing the overall 5 percent limitation for any subsequent calendar quarter. Moreover, the amount of any reimbursements for local advertising made by a manufacturer in a calendar year which is in excess of the amount of such reimbursements in respect of which credit or refund may be claimed, within the overall limitation, as of the close of the calendar year, may not subsequently serve as the basis for a credit or refund.
(2) *Alternative method of computation in certain cases.* If during the portion of the calendar year ending with the date as of which the overall 5 percent limitation is being computed the amount of the local advertising charge separately billed by the manufacturer has not, in respect of any sale of any articles taxable under the same section of chapter 32 of the Code, exceeded the amount excludable pursuant to [§ 53.100](/current/title-27/section-53.100) in computing taxable price, the overall 5 percent limitation as of the close of a particular calendar quarter in respect of articles taxable under such section is 5 percent of the total taxable price (computed at the time of the sale) of all such articles sold taxpaid during the calendar year.
(3) *Allocation of amounts paid in reimbursement of expenditures for local advertising.* If a manufacturer makes contributions to a local advertising program in connection with which he makes excludable local advertising charges, it is necessary that reimbursements by the manufacturer for local advertising be attributed to the charges for local advertising, to the manufacturer's contributions, or allocated between them. Whether an amount paid by a manufacturer in reimbursement of expenses for local advertising is or is not a repayment of a local advertising charge which was excluded from taxable price under section 4216(e)(1) of the Code and [§ 53.100](/current/title-27/section-53.100), shall be determined on the basis of an allocation made under the agreement between the manufacturer and his vendee (or any subsequent vendee).
(c) *Examples.* The application of [paragraphs (a)](/current/title-27/section-53.101#p-53.101\(a\)) and [(b)](/current/title-27/section-53.101#p-53.101\(b\)) of this section may be illustrated by the following examples:
# Example (1).
During the first and second calendar quarters of the year, a manufacturer makes sales of articles taxable under section 4181 to his distributors. The total charges for such sales, exclusive of the tax, transportation charges, delivery charges, or other charges which are excludable, pursuant to section 4216(a) of the Code, in computing taxable price, are as follows:
\| First Quarter: | |
\| Articles taxable under Section 4181 | $100,000 | | Local advertising charges | 3,000 | | Total Charges | 103,000 | | Second Quarter: | | | Articles taxable under Section 4181 | $150,000 |
\| Local advertising charges | 4,000 |
\| Total Charges | 154,000 |
Assume further that the manufacturer contributes to the advertising plan and that the manufacturer pays $5,500 and $1,000 during the first and second calendar quarters of the year, respectively, to his distributors in reimbursement of expenses incurred by them for local advertising of the articles purchased from the manufacturer.
\| Computation as of close of first calendar quarter: | |
\| 1. Amount which would constitute total taxable price (computed at time of sale) if no part of any charge for local advertising were excludable in computing taxable price | $103,000 | | 2. Amounts billed as separate charges for local advertising | −3,000 | | 3. Difference | 100,000 | | 4. Overall 5 percent limitation (5 percent of item 3) | $5,000 |
\| 5. Amount excluded in computing taxable price | −3,000 |
\| 6. Unused portion of limitation | 2,000 |
\| 7. Allocation, pursuant to agreement, of $5,500 paid to distributors: | | | Charges for local advertising | $3,000 |
\| Contributions by manufacturer | \$2,500 |
Readjustment may be claimed in respect of that portion of the total amount repaid to the distributors which is allocated to the manufacturer's contribution ($2,500) to the extent that such portion does not exceed the unused portion of the overall 5 percent limitation ($2,000). Accordingly, as of the close of the first calendar quarter the manufacturer may claim credit or refund in respect of a readjustment of price in the amount of \$2,000.
\| Computation as of close of second calendar quarter: | |
\| 1. Amount which would constitute total taxable price (computed at time of sale) if no part of any charge for local advertising were excludable in computing taxable price ($103,000+$154,000) | $257,000 | | 2. Amounts billed as separate charges for local advertising ($3,000+$4,000) | −7,000 | | 3. Difference | 250,000 | | 4. Overall 5 percent limitation (5 percent of item 3) | $12,500 |
\| 5. Amount excluded in computing taxable price ($3,000+$4,000) plus readjustment claimed at end of first calendar quarter ($2,000) | −9,000 | | 6. Unused portion of limitation | 3,500 | | 7. Allocation, pursuant to agreement, of $6,500 ($5,500+$1,000) paid to distributors: | |
\| Charges for local advertising | $3,500 | | Contributions by manufacturer | $3,000 |
Although the total reimbursements for local advertising expenses attributable to contributions by the manufacturer ($3,000) does not exceed the unused portion of the overall 5 percent limitation ($3,500), the manufacturer, having taken, at the close of the first calendar quarter, a price readjustment in the amount of $2,000 in respect to his contributions, is entitled at the close of the second calendar quarter to claim credit or refund in respect of a price readjustment in the amount of $1,000 ($3,000−$2,000).
# Example (2).
During the first calendar quarter of the year, a manufacturer sold articles taxable under section 4181 to his distributors at a total charge of $106,000, exclusive of the tax, transportation charges, delivery charges, or other charges which are excludable, pursuant to section 4216(a) of the Code, in computing taxable price. This total charge of $106,000 was billed as follows:
\| Total Charge: | |
\| Articles taxable under Section 4181 | \$100,000 |
\| Local advertising charges | 6,000 |
\| Total charges | 106,000 |
Assume further that the manufacturer contributes to the advertising plan and that the manufacturer pays \$3,000 during the first calendar quarter of the year to his distributors in reimbursement of expenses incurred by them for local advertising of the articles purchased from the manufacturer.
\| Computation as of close of first calendar quarter: | |
\| 1. Amount which would constitute total taxable price (computed at time of sale) if no part of any charge for local advertising were excludable in computing taxable price | $106,000 | | 2. Amounts billed as separate charges for local advertising | −6,000 | | d. Difference | 100,000 | | 4. Overall 5 percent limitation (5 percent of item 3) | 5,000 | | 5. Amount excluded in computing taxable price (see [paragraph (c) of § 53.100](/current/title-27/section-53.100#p-53.100(c)) | −5,000 | | 6. Unused portion of limitation | 0 | | 7. Allocation, pursuant to agreement, of $3,000 paid to distributors: | |
\| Charges for local advertising | 2,000 |
\| Contributions by manufacturer | 1,000 |
Credit or refund may not be claimed in respect of that portion of the total amount repaid to the distributors ($3,000) which is allocated to the manufacturer's contribution ($1,000) since the amount excluded in computing taxable price is equal to the overall 5 percent limitation.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-312, [56 FR 31084](https://www.federalregister.gov/citation/56-FR-31084), July 9, 1991]
#### § 53.102 No exclusion or readjustment for other advertising charges or reimbursements.
(a) *Exclusions from price.* No exclusion in computing the taxable price of any article sold by the manufacturer may be allowed in respect of any charge for advertising if, and to the extent that, such charge:
(1) Is for advertising which does not qualify as local advertising within the meaning of section 4216(e)(4) of the Code and [paragraphs (a)](/current/title-27/section-53.100#p-53.100\(a\)) and [(b) of § 53.100](/current/title-27/section-53.100#p-53.100\(b\)), or
(2) Does not satisfy all of the conditions and limitations stated in section 4216(e)(1) of the Code and [paragraph (c) of § 53.100](/current/title-27/section-53.100#p-53.100\(c\)).
(b) *Readjustments of price.* No credit or refund under section 6416(b)(1) of the Code may be allowed in respect of any amount which was included in the taxable price of an article sold by the manufacturer and which was later paid by him to his vendee in reimbursement of costs incurred for advertising, if, and to the extent that, the amount so paid:
(1) Is for advertising which does not qualify as local advertising within the meaning of section 4216(e)(4) of the Code and [paragraph (b) of § 53.100](/current/title-27/section-53.100#p-53.100\(b\)), or
(2) Is not within the limitation provided in section 4216(e)(2) of the Code, as computed in accordance with [§ 53.101](/current/title-27/section-53.101), as of the close of the calendar quarter in which the amount is so paid over or as of the close of any subsequent calendar quarter in the same calendar year. See, however, [§ 53.175](/current/title-27/section-53.175), relating to redetermination of price readjustments in cases where local advertising charges excluded from taxable price in one calendar year become taxable as of May 1 of the following calendar year.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-312, [56 FR 31084](https://www.federalregister.gov/citation/56-FR-31084), July 9, 1991]
#### § 53.103 Lease considered as sale.
For purposes of chapter 32 of the Code, the lease of an article by a manufacturer, producer, or importer shall be considered a sale of the article. The term *lease* means a contract or agreement, written or verbal, which gives the lessee an exclusive, continuous right to the possession or use of a particular article for a period of time. The term includes any renewal or extension of a lease or any subsequent lease of the article.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-312, [56 FR 31084](https://www.federalregister.gov/citation/56-FR-31084), July 9, 1991; T.D. 372, [61 FR 20724](https://www.federalregister.gov/citation/61-FR-20724), May 8, 1996]
#### § 53.104 Limitation on amount of tax applicable to certain leases.
(a) *Conditions for eligibility.* Section 4217(b) of the Code provides for a limitation on the amount of tax that shall apply to the lease, any renewal, or further lease, of an article which, if sold, would be subject to tax on the basis of sale price. Such limitation on the amount of the tax applies with respect to the lease of an article only if, at the time of making the lease, the lessor is engaged in the business of selling in arm's length transactions the same type and model of article. In case of a lease to which section 4217(b) of the Code does not apply, tax shall be computed and paid as provided in section 4216(c) of the Code and [paragraph (a) of § 53.98](/current/title-27/section-53.98#p-53.98\(a\)).
(b) *Lessor engaged in business of selling.* The lessor will be regarded as being engaged in the business of selling in arm's length transactions the same type and model of an article as the one being leased if it periodically and recurringly makes bona fide offers for sale of such articles in the regular course of operation of its business, which offers if accepted would constitute sales at arm's length. Whether the offers are bona fide shall be determined on the basis of the facts in each case, such as sales actually made, the nature of the advertising, sales literature, and other means used to effectuate sales. It is not necessary that the offers for sale be made to the same class of purchasers as those to whom the article is being leased.
(c) *Same type and model of article.* To qualify as the “same type and model of article”, the article offered for sale must be an unused article essentially the same in size, design, and function as the article being leased. Slight differences in appearance or accessories will not render articles dissimilar which are identical in all other respects.
(d) *Basis for tax* —
(1) *Tax payable until total tax in paid.* In case of a lease of an article to which section 4217(b) of the Code applies, tax shall be paid on each lease payment in an amount computed by applying to such lease payment a percentage equal to the rate of tax in effect on the date of the lease payment. Such tax payments shall continue to be made under such lease, or any subsequent lease of the article, until the cumulative total of the tax payments equals the total tax. Lease payments made thereafter with respect to that article shall not be subject to tax. For definition of the term “total tax,” see [paragraph (e)](/current/title-27/section-53.104#p-53.104\(e\)) of this section.
(2) *Changes in tax rates.* If the rate of tax is increased or decreased during a lease period, the new rate shall apply to the lease payments made on and after the date of the change, but the amount of the total tax shall remain the same.
(e) *Total tax.* For purposes of this section, the term “total tax” means the amount of tax, computed at the rate in effect on the date of the first lease of the article to which section 4217(b) of the Code applies, which would be due on the constructive sale price of the article as determined under section 4216(b) of the Code and [§ 53.95](/current/title-27/section-53.95), as if the article had been sold by a manufacturer at retail on such date.
(f) *Sale of article before total tax becomes payable.* If the lessor sells the article before the total tax has become payable, the tax payable on the sale shall be the lesser of the following amounts:
(1) The difference between:
(i) The total tax, and
(ii) The aggregate tax applicable to lease payments already received; or
(2) A tax computed, at the rate in effect on the date of the sale, on the price for which the article is sold. For purposes of (f)(2) of this section, the provisions of section 4216(b) of the Code for determining a constructive sale price shall not apply if the sale is at arm's length. If the sale is not at arm's length, the tax referred to in [(f)(2)](/current/title-27/section-53.104#p-53.104\(f\)\(2\)) of this section shall be computed on a constructive sale price as provided in [§ 53.95](/current/title-27/section-53.95).
(g) *Sale of article after total tax has become payable.* If the lessor sells an article after the total tax has become payable, the tax imposed under chapter 32 of the Code shall not apply to such sale.
### Use by Manufacturer or Importer Considered Sale
#### § 53.111 Tax on use by manufacturer, producer, or importer.
(a) *In general.* Section 4218 of the Code imposes tax in respect of certain uses of articles by the actual manufacturer, producer, or importer thereof. This section also applies in respect of the use of articles by any other person who, pursuant to a provision of chapter 32 of the Code, is considered to be, or is treated as, the manufacturer or producer of the articles. See, for example, section 4223 of the Code relating to articles purchased tax free for use in further manufacture.
(b) *Taxable articles in general* —
(1) *Application of tax.* If the manufacturer, producer, or importer of an article taxable under chapter 32 of the Code uses the article for any purpose other than that indicated in [paragraph (b) (3)](/current/title-27/section-53.111#p-53.111\(b\)\(3\)) of this section, he shall be liable for tax with respect to the use of such article in the same manner as if the article were sold by him.
(2) *Taxable use in manufacturer of nontaxable articles* —
(i) *In general.* In the case of an article to which [paragraph (b)(1)](/current/title-27/section-53.111#p-53.111\(b\)\(1\)) of this section applies, tax attaches when the manufacturer, producer, or importer of the articles uses it as material in the manufacture or production of, or as a component part of, another article which is not taxable under chapter 32 of the Code, regardless of the disposition made of such other article. (See [paragraph (c) of § 53.115](/current/title-27/section-53.115#p-53.115\(c\)) for computation of tax on such use.)
(ii) *Types of use in manufacture of nontaxable articles.* Taxable use may consist of the incorporation of a taxable article into a nontaxable article. Taxable use may also result from the combining of a taxable article (or the components thereof) with a nontaxable article (or the components of a nontaxable article) resulting in a combination end article which itself is not taxable. Although the taxable article may not be a completely separable unit, within the contemplation of the law a taxable article has been produced and incorporated in the combination end article.
(3) *Nontaxable use in manufacturer of taxable articles.* The tax on the use of an article to which [paragraph (b)(1)](/current/title-27/section-53.111#p-53.111\(b\)\(1\)) of this section has application shall not apply if the article is used by the manufacturer, producer, or importer thereof as material in the manufacturer or production of, or as a component part of, another article taxable under chapter 32 of the Code to be manfactured or produced by him. It is immaterial what disposition is made of such other article.
(c) *Use after lease.* If the manufacturer, producer, or importer of a taxable article leases such article and thereafter uses the article, he incurs liability for tax on such use as provided in these regulations to the same extent as if the article were sold after being leased. See section 4217 of the Code and the regulations thereunder in this subpart for application and computation of tax in case of leased articles.
(d) *Time of application of tax.* In the case of a taxable use of an article by the manufacturer, producer, or importer thereof, the tax attaches at the time such use begins. If tax applies by reason of the sale of an article by the manufacturer, producer, or importer thereof on or in connection with his sale of another article, the tax attaches at the time of the sale of such other article.
(e) *Exemptions because of other statutory provisions.* Tax does not apply on the use of an article by the manufacturer, producer, or importer thereof if under the applicable provisions of the Code the sale of the article for a similar use would not be subject to tax. Also, tax need not be paid with respect to the use of an article by the manufacturer, producer, or importer thereof if such use would qualify, under the provisions of section 6416(b) of the Code, for credit or refund of the tax paid.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991]
#### § 53.112 Business or personal use of articles.
(a) *Business use.* Section 4218 of the Code applies to the use by a person, in the operation of any business in which he is engaged, of a taxable article which has been manufactured, produced, or imported by him or his agent.
(b) *Personal use.* The tax on use of a taxable article does not attach in cases where an individual incidentially manufacturers, produces, or imports a taxable article for his personal use or causes a taxable article to be manufactured, produced, or imported for his personal use.
#### § 53.113 Events subsequent to taxable use of article.
Liability for tax incurred on the use of an article is not extinguished or reduced because of any subsequent sale or lease of the article even if such sale or lease would have been exempt if the article had been so sold or leased prior to use. If a manufacturer, producer, or importer of an article incurs liability for tax on his use thereof, and thereafter sells or leases the article in a transaction which otherwise would be subject to tax, liability for tax is not incurred on such sale or lease.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-312, [56 FR 31084](https://www.federalregister.gov/citation/56-FR-31084), July 9, 1991]
#### § 53.114 Use in further manufacture.
For purposes of section 4218 and [§ 53.111](/current/title-27/section-53.111), an article is used as material in the manufacture or production of, or as a component part of, another article, if it is incorporated in, or is a part or accessory of, the other article. In addition, an article is considered to be used as material in the manufacturer of another article if it is partly or entirely consumed in testing such other article; for example, shells or cartridges used in testing new firearms. Similarly, if an article is partly or wholly consumed in quality testing a production run of like articles, such article is also considered to have been used as material in the manufacture of another article. However, if a taxable article that has been used tax free and only partly consumed in testing is later sold, or put to a taxable use by the manufacturer, tax attaches to such sale or use. An article that is consumed in the manufacturing process other than in testing, so that it is not a physical part of the manufactured article, is not used as material in the manufacture or production of or as a component part of, such other article.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-312, [56 FR 31084](https://www.federalregister.gov/citation/56-FR-31084), July 9, 1991]
#### § 53.115 Computation of tax.
(a) *Tax based on price.* Tax liability incurred on the use of an article shall be computed on the price at which such or similar articles are sold in the ordinary course of trade by manufacturers, producers, or importers thereof and in the absence of special arrangements. For additional provisions applicable in computing the tax in the case of the use of an article by a manufacturer and producer who purchased the article free of tax under section 4221(a)(1) of the Code for use by him in further manufacture, see section 4223(b) of the Code and the regulations thereunder ([§ 53.143](/current/title-27/section-53.143)).
(b) *Articles regularly sold by manufacturer.* If the manufacturer, producer, or importer of an article regularly sells such articles at wholesale in arm's length transactions, tax liability on his use of any such article shall be computed on his lowest established wholesale price for such articles in effect at the time of the taxable use. In establishing such price, there shall be included and excluded, as applicable, the charges and readjustments specified in sections 4216(a) and 6416(b)(1) of the Code, as in effect at the time tax liability on the use of the article is incurred, and the regulations thereunder contained in this subpart and subpart L ([§§ 53.91-53.94](/current/title-27/section-53.91) and [53.173-53.176](/current/title-27/section-53.173)). If the manufacturer, producer, or importer of an article does not regularly sell such articles at wholesale in arm's length transactions, a constructive price on which the use tax shall be computed will be determined by the appropriate TTB officer. This price will be established after considering the selling practices and price structures of manfacturers, producers, and importers of similar articles.
(c) *Articles governed by section 4218(a) used in manufacture of nontaxable combination articles.* If the manufacturer, producer, or importer of an article to which section 4218(a) of the Code applies does not regularly sell such article separately but uses it as material in the manufacture or production of, or as a component part of, a nontaxable combination article consisting of a taxable and nontaxable article, liability for tax on his use shall be computed on the constructive price of the taxable article at the time of use. To determine the constructive price of the taxable article in such case, the combination article is considered to be composed of:
(1) Parts used exclusively in the functioning of the taxable article in the combination;
(2) Parts used exclusively in the functioning of the nontaxable article in the combination, and
(3) Parts, called common parts, which serve a dual function in connection with the parts in both [paragraphs (c) (1)](/current/title-27/section-53.115#p-53.115\(c\)\(1\)) and [(2)](/current/title-27/section-53.115#p-53.115\(c\)\(2\)) of this section.
The ratio which the cost of the parts in [paragraph (c)(1)](/current/title-27/section-53.115#p-53.115\(c\)\(1\)) of this section bears to the sum of the cost of such parts and the parts in [paragraph (c)(2)](/current/title-27/section-53.115#p-53.115\(c\)\(2\)) of this section is applied to the lowest established wholesale price for which like combination articles are at the time of the taxable use being sold by the manufacturer or producer in the ordinary course of trade. The resulting amount is the constructive sale price for the taxable article on which tax is to be computed. The cost of the common parts is allocable to the parts in [paragraphs (c) (1)](/current/title-27/section-53.115#p-53.115\(c\)\(1\)) and [(2)](/current/title-27/section-53.115#p-53.115\(c\)\(2\)) of this section in the same ratio, and, therefore, need not be taken into account in the computation since the inclusion and allocation of the cost of such parts in the determination would not result in a different ratio. In determining the lowest establishment wholesale price for the combination article, there shall be included and excluded, as applicable, the charges and readjustments specified in sections 4216(a) and 6416(b)(1) of the Code, as in effect at the time tax liability on the use of the taxable article is incurred, and the regulations thereunder contained in this subpart and [subpart L of this part](/current/title-27/part-53/subpart-L) ([§§ 53.91-53.94](/current/title-27/section-53.91) and [§§ 53.173-53.176](/current/title-27/section-53.173)). The tax applicable to the use of the article for which a constructive sale price has been computed is not affected by any charges or readjustments of the price for which the nontaxable combination article is sold, whether by reason of the return or repossession of the nontaxable article or its covering or container, or by a bona fide discount, rebate, allowance, or other factor.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-312, [56 FR 31084](https://www.federalregister.gov/citation/56-FR-31084), July 9, 1991]
### Application of Tax in Case of Sales by Other Than Manufacturer or Importer
#### § 53.121 Sales of taxable articles by a person other than the manufacturer, producer, or importer.
(a) *General rule.* If the title to, or ownership of, an article taxable under chapter 32 of the Code is transferred from the manufacturer, producer, or importer thereof, and, under the law, no tax attaches to such transfer, the subsequent sale, lease, or use of such article by the transferee is subject to tax to the same extent and manner as if such transferee were the manufacturer, producer, or importer of the article. The following examples illustrate this rule:
(1) The surviving spouse, child or children, executors or administrators, or other legal representatives, as the case may be, of a deceased manufacturer, producer, or importer of taxable articles, incur liability for tax on all such articles sold by them.
(2) A receiver or trustee in bankruptcy who under a court order conducts or liquidates the business of a manufacturer, producer, or importer of taxable articles, incurs liability for tax on all taxable articles sold by him, regardless of whether the articles were manufactured, produced, or imported before or after he took charge of the business.
(3) An assignee for the benefit of creditors of a manufacturer, producer, or importer incurs liability for tax with respect to all taxable articles sold by him as such assignee.
(4) If one or more member of a partnership withdraw, or if new partners are admitted, the new partnership so constituted incurs liability for tax on all taxable articles sold by it regardless of when such articles were manufactured, produced, or imported.
(5) A person who acquires title to taxable articles as a result of default of the manufacturer, producer, or importer pursuant to an agreement under the terms of which the articles were pledged as collateral incurs liability for tax with respect to his sale of the articles so acquired.
(6) A person who succeeds to the business of a manufacturer, producer, or importer of taxable articles, such as:
(i) A corporation which results from a consolidation, merger, or reorganization;
(ii) A corporation which acquires the business of an individual or partnership; or
(iii) A stockholder in a corporation who, after its dissolution, continues the business;
incurs liability for the tax on all taxable articles sold by such person. However, where a manufacturer, producer, or importer sells only his assets, rather than ownership of his business, he incurs liability for tax on the sale of any taxable articles included in such assets.
(b) *Transfer of title to damaged articles.* If title to a damaged taxable article is transferred by the manufacturer, producer, or importer thereof to a carrier or insurance company in adjustment of a damage claim, such transfer is not considered a taxable sale of the article. If the article is usable, even though damaged, the carrier or insurance company incurs liability for tax on its sale, lease, or use of the article. Where the article has been damaged to the extent that its only value is as scrap, and it is not restored to usable condition, sale thereof by the carrier or insurance company is not subject to tax.
## Subpart K—Exemptions, Registration, Etc.
#### § 53.131 Tax-free sales; general rule.
(a) *In general.* Section 4221(a) of the Code sets forth the following exempt purposes for which an article subject to tax under chapter 32 of the Code may be sold tax-free by the manufacturer, producer, or importer:
(1) For use by the purchaser for further manufacture, or for resale by the purchaser to a second purchaser for use by such second purchaser in further manufacture,
(2) For export, or for resale by the purchaser to a second purchaser for export,
(3) For use by the purchaser as supplies for vessels or aircraft,
(4) To a State or local government for the exclusive use of a State or local government, and
(5) To a nonprofit educational organization for its exclusive use.
Section 4221(a) of the Code applies only in those cases where the exportation or use referred to is to occur before any other use, and where the seller, first purchaser, and second purchaser, as may be appropriate, have registered as required under section 4222 of the Code and [paragraph (a) of § 53.140](/current/title-27/section-53.140#p-53.140\(a\)). See [paragraph (c)](/current/title-27/section-53.131#p-53.131\(c\)) of this section for provisions relating to evidence required in support of tax-free sales. See [§ 53.141](/current/title-27/section-53.141) for exceptions to the requirement for registration. Where tax is paid on the sale of an article, but the article is used or resold for use for an exempt purpose, a claim for credit or refund may be filed in accordance with and to the extent provided in sections 6402(a) and 6416 of the Code, and the regulations thereunder ([§§ 53.161](/current/title-27/section-53.161) and [53.171-53.186](/current/title-27/section-53.171)).
(b) *Manufacturer relieved of liability in certain cases* —
(1) *General rule.* Under the provisions of section 4221(c) of the Code, if an article subject to tax under Chapter 32 of the Code is sold free of tax by the manufacturer of the article for an exempt purpose referred to in section 4221(c) of the Code and [paragraph (b)(2)](/current/title-27/section-53.131#p-53.131\(b\)\(2\)) of this section, the manufacturer shall be relieved of any tax liability under chapter 32 of the Code with respect to such sale if the manufacturer in good faith accepts a proper certification by the purchaser that the article or articles will be used by the purchaser in the stated exempt manner. See [paragraph (b)(2)](/current/title-27/section-53.131#p-53.131\(b\)\(2\)) of this section for a list of the exempt purposes referred to in section 4221(c) of the Code.
(2) *Situations wherein section 4221(c) of the Code is applicable.* The following are situations wherein section 4221(c) of the Code is applicable with respect to sales made tax free on the assumption that one of the following sections of the Code provides exemption for such sales:
(i) Section 4221(a)(1) of the Code, to the extent that it relates to sales for further manufacture by a first purchaser (see [§ 53.132](/current/title-27/section-53.132)),
(ii) Section 4221(a)(3) of the Code, relating to supplies for vessels and aircraft (see [§ 53.134](/current/title-27/section-53.134)),
(iii) Section 4221(a)(4) of the Code, relating to sales to State or local governments (see [§ 53.135](/current/title-27/section-53.135)),
(iv) Section 4221(a)(5) of the Code, relating to sales to nonprofit educational organizations (see [§ 53.136](/current/title-27/section-53.136)).
(3) *Situations wherein section 4221(c) of the Code is not applicable.* The relief from liability for the payment of tax provided by section 4221(c) of the Code is not applicable with respect to sales made tax free on the assumption that one of the following sections of the Code provides exemption for such sales:
(i) Section 4221(a)(1) of the Code, to the extent that it relates to sales for resale to a second purchaser for use by the second purchaser in further manufacture (see [§ 53.132](/current/title-27/section-53.132)),
(ii) Section 4221(a)(2) of the Code, relating to sales for export (see [§ 53.133](/current/title-27/section-53.133)).
(4) *Duty of seller to ascertain validity of tax-free sale.* If the manufacturer at the time of its sale has reason to believe that the article sold by it is not intended for the exempt purpose indicated by the purchaser, or that the purchaser has failed to register as required, the manufacturer is not considered to have accepted certification from the purchaser in good faith, and is not relieved from liability under the provisions of section 4221(c) of the Code.
(5) *Information to be furnished to purchaser.* A manufacturer selling articles free of tax under this section shall indicate to the purchaser that:
(i) Certain articles normally subject to tax are being sold tax free, and
(ii) The purchaser is obtaining those articles tax free for an exempt purpose under an exemption certificate or its equivalent.
(6) The manufacturer may transmit this information by any convenient means, such as coding of sales invoices, provided that the information is presented with sufficient particularity so that the purchaser is informed that he has obtained the articles tax free and:
(i) The purchaser can compute and remit the tax due if an article sold tax free for further manufacture is diverted to a taxable use,
(ii) The manufacturer can remit the tax due with respect to an article purchased tax free for resale for use in further manufacture or for export if, within the 6-month period described in [§ 53.132(c)](/current/title-27/section-53.132#p-53.132\(c\)) or [§ 53.133(c)](/current/title-27/section-53.133#p-53.133\(c\)), the manufacturer does not receive proof that the article has been exported or resold for use in further manufacturer, or
(iii) The purchaser can notify the manufacturer if an article otherwise purchased tax free is diverted to a taxable use.
(c) *Evidence required in support of tax-free sales* —
(1) *Purchasers required to be registered.* Every purchaser who is required to be registered (see [§ 53.140](/current/title-27/section-53.140)) shall furnish to the seller, as evidence in support of each tax-free sale made by the seller to such purchaser, the exempt purpose for which the article or articles are being purchased and the registration number of the purchaser. Such information must be in writing and may be noted on the purchase order or other document furnished by the purchaser to the seller in connection with each sale.
(2) *Purchasers not required to be registered.* For the evidence which purchasers not required to register must furnish to the seller in support of each tax-free sale made by the seller to such purchasers, see [paragraph (b) of § 53.133](/current/title-27/section-53.133#p-53.133\(b\)) for sales or resales to a foreign purchaser for export, [paragraph (d) of § 53.134](/current/title-27/section-53.134#p-53.134\(d\)) for sales of supplies to vessels or aircraft, [paragraph (c) of § 53.135](/current/title-27/section-53.135#p-53.135\(c\)) for sales to State and local governments, and [paragraph (c) of § 53.141](/current/title-27/section-53.141#p-53.141\(c\)) for sales and purchases by the United States.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-380, [61 FR 37005](https://www.federalregister.gov/citation/61-FR-37005), July 16, 1996]
#### § 53.132 Tax-free sale of articles to be used for, or resold for, further manufacture.
(a) *Further manufacture* —
(1) *In general.* Under prescribed conditions, an article subject to tax under Chapter 32 of the Code may be sold tax free by the manufacturer, pursuant to section 4221(a)(1) of the Code, for use by the purchaser in further manufacture, or for resale by the purchaser to a second purchaser for use by the second purchaser in further manufacture. See section 4221(d) (6) of the Code and [paragraph (b)](/current/title-27/section-53.132#p-53.132\(b\)) of this section for the circumstances under which an article is considered to have been sold for use in further manufacture. See section 6416(b)(3) of the Code and [§ 53.180](/current/title-27/section-53.180) for the circumstances under which credit or refund is available when tax-paid articles are used in further manufacture.
(2) *Proof of resale for use in further manufacture.* See section 4221(b)(1) of the Code and [paragraph (c)](/current/title-27/section-53.132#p-53.132\(c\)) of this section for provisions under which the exemption provided in section 4221(a)(1) of the Code shall cease to apply in the case of an article sold by the manufacturer to a purchaser for resale to a second purchaser for use in further manufacture unless the manufacturer receives timely proof of resale for further manufacture.
(b) *Circumstances under which an article is considered to have been sold for use in further manufacture.*
(1) For purposes of the exemption from the manufacturers excise tax provided by section 4221(a)(1) of the Code, an article shall be treated as sold for use in further manufacture if the article is sold for use by the purchaser as material in the manufacture or production of, or as a component part of, another article taxable under chapter 32 of the Code;
(2) An article is used as material in the manufacture or production of, or as a component of, another article if it is incorporated in, or is a part or accessory of, the other article when the other article is sold by the manufacturer. In addition, an article is considered to be used as material in the manufacture of another article if it is consumed in whole or in part in testing such other article; for example, shells or cartridges that are used by the manufacturer of firearms to test new firearms. However, an article that is consumed in the manufacturing process other than in testing, so that it is not a physical part of the manufactured article, is not considered to have been used as material in the manufacture of, or as a component part of, another article.
(c) *Proof of resale for further manufacture* —
(1) *Cessation of exemption.* The exemption provided in section 4221(a)(1) of the Code and described in [paragraph (a)](/current/title-27/section-53.132#p-53.132\(a\)) of this section in respect of an article sold by the manufacturer to a purchaser for resale to a second purchaser for use by the second purchaser in further manufacture shall cease to apply on the first day following the close of the 6-month period which begins on the date of the sale of such article by the manufacturer, or the date of shipment of the article by the manufacturer, whichever is earlier, unless, within such 6-month period, the manufacturer receives proof, in the form prescribed by [paragraph (c)(2)](/current/title-27/section-53.132#p-53.132\(c\)\(2\)) of this section, that the article was actually resold by the purchaser to a second purchaser for such use. If, on the first day following the close of the 6-month period, such proof has not been received, the manufacturer shall become liable for tax at that time at the rate in effect when the sale was made but otherwise in the same manner as if the article had been sold by it on such first day at a taxable price equivalent to that at which the article was actually sold. If the manufacturer later obtains such proof, it may file a claim for refund or credit of this tax. The payment of this tax by the manufacturer is not considered an overpayment by the subsequent manufacturer or producer for which the subsequent manufacturer or producer is entitled to a credit or refund under section 6416(b)(3) of the Code. See section 4221(d)(6) of the Code and [paragraph (b)](/current/title-27/section-53.132#p-53.132\(b\)) of this section for the circumstances under which an article is considered to have been sold for use in further manufacture.
(2) *Proof of resale* —
(i) *Certificate of purchaser.* The proof of resale to be received by the manufacturer, as required under section 4221(b)(1) of the Code, may consist of either a copy of the invoice of the manufacturer's vendee directed to his purchaser which discloses the certificate of registry number held by each party or a statement described in this paragraph. In the case of an invoice of manufacturer's vendee, it must appear from such invoice (or by statement attached thereto) that the article was in fact resold for use in further manufacture. In lieu of such an invoice, proof of resale may consist of a statement, executed and signed by the manufacturer's vendee which includes the following:
(A) Date statement was executed.
(B) Name and address of manufacturer's vendee (if other than the person executing statement).
(C) Certificate of registry number held by vendee.
(D) Specify article(s) purchased tax-free, by whom purchased, certificate of registry number of second purchaser, date of purchase(s), whether articles were purchased as material in the manufacture or production of, or as a component part or parts of, an article or articles taxable under Chapter 32 of the Code.
(E) Statement that person executing statement or manufacturer's vendee possesses proof of tax-free resale of the article(s) in the form of purchase orders and sales invoices and identifying the person who will maintain custody of such proof for 3 years from the date of the statement and will make such proof available for inspection by TTB during such 3 year period.
(F) Statement that a previous statement has not been executed in respect of such certificate of resale and that the person signing the statement is aware that fraudulent use of the statement may subject the person signing the statement and all parties making fraudulent use of the statement to all applicable criminal penalties under the Code.
(G) Name, signature, and title of individual executing statement.
(ii) *Period covered.* Any statement executed and signed by the manufacturer's vendee, as provided in [paragraph (c)(2)(i)](/current/title-27/section-53.132#p-53.132\(c\)\(2\)\(i\)) of this section, may be executed with respect to any one or more articles purchased tax free from a manufacturer and resold for use in further manufacture within the 6-month period prescribed in section 4221(a)(1) of the Code and [paragraph (c)(1)](/current/title-27/section-53.132#p-53.132\(c\)\(1\)) of this section. Such statement (or other prescribed proof of resale) must be retained for inspection by the appropriate TTB officer as provided in section 6001 of the Code.
(iii) *TTB F 5600.37.* A preprinted statement, TTB F 5600.37, Statement of Manufacturer's Vendee, which is available as provided in [§ 53.21(b)](/current/title-27/section-53.21#p-53.21\(b\)), when completed, contains all necessary information for a properly executed statement. Extra copies of TTB F 5600.37 may be reproduced as needed.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-380, [61 FR 37005](https://www.federalregister.gov/citation/61-FR-37005), July 16, 1996; T.D. TTB-196, [89 FR 87950](https://www.federalregister.gov/citation/89-FR-87950), Nov. 6, 2024]
#### § 53.133 Tax-free sale of articles for export, or for resale by the purchaser to a second purchaser for export.
(a) *In general.*
(1) An article subject to tax under chapter 32 of the Code may be sold tax free by the manufacturer, pursuant to section 4221(a)(2) of the Code and this section, for export, or for resale by the purchaser to a second purchaser for export. See [§ 53.11](/current/title-27/section-53.11) for the meaning of the term “exportation”. An article may be sold tax free by the manufacturer under the provisions of this section only if the person to whom the manufacturer sells the article intends either to export the article or to resell it to a person who intends to export it. An article may not be sold tax free under the provisions of this section by a manufacturer to a purchaser for resale to a second purchaser which does not intend to export the article itself but plans to resell it to a third purchaser for export. See section 6416(b)(2)(A) of the Code and [§ 53.177](/current/title-27/section-53.177) for the circumstances under which credit or refund of tax is available where tax-paid articles are exported from the United States.
(2) If an article, otherwise taxable under chapter 32 of the Code:
(i) Is sold tax free by the manufacturer pursuant to section 4221(a)(2) of the Code and this section, and
(ii) Is returned subsequently to the United States in an unused and undamaged condition,
then the importer is liable for the tax imposed by chapter 32 of the Code on the subsequent sale or use of the article in the United States. The provisions of this [paragraph (a)(2)](/current/title-27/section-53.133#p-53.133\(a\)\(2\)) of this section may be illustrated by the following examples:
*Example (1).* Q, a U.S. manufacturer of shells and cartridges, previously sold shells and cartridges to R, a company in Canada. The sale was tax free under section 4221(a)(2). Prior to use, R sold the shells and cartridges to S, who imports the articles into the United States and sells them. The sale of the shells and cartridges subjects S to an excise tax liability under section 4181.
*Example (2).* X, a U.S. firearms manufacturer, sold a rifle to Y company in France. The sale was tax free under section 4221(a)(2). The rifle was sold by Y to W, an individual in the City of Nice, France. After initial use, W resold the rifle to X. X returned the rifle to the United States where it was resold. The resale of the rifle by X does not subject X to an excise tax liability under section 4181.
(b) *Sales or resales to a foreign purchaser for export.* In the case of sales or resales to a foreign purchaser for export, if the first or the second purchaser is located in a foreign country or possession of the United States, such purchaser is not required to register as provided in section 4222(a) of the Code and [§ 53.140](/current/title-27/section-53.140). To establish the right to sell articles tax free for export to a purchaser who is not registered and who is located in a foreign country or a possession of the United States, the manufacturer must obtain from such purchaser at the time title to the article passes or at the time of shipment, whichever is earlier, either:
(1) A written order or contract of sale showing that the manufacturer is to ship the article to a foreign destination; or
(2) Where delivery by the manufacturer is to be made within the United States, a statement from the purchaser showing:
(i) That the article is purchased either to fill existing or future orders for delivery to a foreign destination or for resale to another person engaged in the business of exporting who will export the article, and
(ii) That such article will be transported to its foreign destination in due course prior to use or further manufacture and prior to any resale except for export. See section 4221(b) of the Code and [paragraphs (c)](/current/title-27/section-53.133#p-53.133\(c\)) and [(d)](/current/title-27/section-53.133#p-53.133\(d\)) of this section for requirements as to timely proof of exportation and cessation of the exemption for export unless the evidence to show actual exportation has been received by the manufacturer.
(c) *Cessation of exemption.* The exemption provided in section 4221(a)(2) of the Code and [paragraph (a)](/current/title-27/section-53.133#p-53.133\(a\)) of this section for an article sold by the manufacturer for export or for resale by the purchaser to a second purchaser for export shall cease to apply on the first day following the close of the 6-month period which begins on the date of the sale of the article by the manufacturer, or the date of shipment of the article by the manufacturer, whichever is earlier, unless within the 6-month period the manufacturer receives proof, in the form prescribed by [paragraph (d)](/current/title-27/section-53.133#p-53.133\(d\)) of this section, that the article was actually exported. If, on the first day following the close of the 6-month period, the proof has not been received, the manufacturer shall become liable for tax at that time at the rate in effect when the sale was made but otherwise in the same manner as if the article had been sold by it on such first day at a taxable price equivalent to that at which the article was actually sold.
(d) *Proof of exportation.*
(1) Exportation may be evidenced by:
(i) A copy of the export bill of lading issued by the delivering carrier,
(ii) A certificate by the agent or representative of the export carrier showing actual exportation of the article,
(iii) A certificate of landing signed by a customs officer of the foreign country to which the article is exported,
(iv) Where the foreign country has no customs administration, a statement of the foreign consignee showing receipt of the article, or
(v) Where a department or agency of the United States Government is unable to furnish any one of the foregoing four types of proof of exportation, a statement or certification on the department or agency stationery, executed by an authorized officer, that the listed or identified articles have, in fact, been exported.
(2) In any case where the manufacturer is not the exporter, the manufacturer must have in its possession a statement from the vendee to whom the manufacturer sold the article stating the following:
(i) Date statement was executed.
(ii) Name and address of manufacturer's vendee (if other than the person executing statement).
(iii) Certificate of registry number held by vendee.
(iv) Specify article(s) purchased tax-free, by whom purchased, and date of purchase.
(v) Statement that article(s) was either exported in due course by the vendee or was sold to another person who in due course exported the article(s).
(vi) Name and address of vendee who will maintain possession of the proof of exportation documents, description of the documents, and statement that vendee will maintain documents for 3 years and make them available to TTB for inspection.
(vii) Statement that a previous statement has not been executed in respect of the articles covered by this statement and that fraudulent use of this statement may subject person executing statement and all parties making fraudulent use of statement to all applicable criminal penalties under the Code.
(viii) Name, signature, title, and address of individual executing certificate.
(3) The statement executed and signed by the manufacturer's vendee, as provided in [paragraph (d)(2)](/current/title-27/section-53.133#p-53.133\(d\)\(2\)) of this section, may be executed with respect to any one or more articles purchased tax free from a manufacturer and exported within the 6-month period prescribed in section 4221(b)(2) of the Code and [paragraph (c)](/current/title-27/section-53.133#p-53.133\(c\)) of this section. Such statement shall be kept for inspection by the appropriate TTB officer as provided in section 6001 of the Code.
(4) *TTB F 5600.36.* A preprinted statement, TTB F 5600.36, Statement of Manufacturer's Vendee, which is available as provided in [§ 53.21(b)](/current/title-27/section-53.21#p-53.21\(b\)), when completed, contains all necessary information for a properly executed statement. Extra copies of TTB F 5600.36 may be reproduced as needed.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-344, [58 FR 40354](https://www.federalregister.gov/citation/58-FR-40354), July 28, 1993; T.D. 372, [61 FR 20724](https://www.federalregister.gov/citation/61-FR-20724), May 8, 1996; T.D. ATF-380, [61 FR 37006](https://www.federalregister.gov/citation/61-FR-37006), July 16, 1996; T.D. TTB-196, [89 FR 87950](https://www.federalregister.gov/citation/89-FR-87950), Nov. 6, 2024]
#### § 53.134 Tax-free sale of articles for use by the purchaser as supplies for vessels or aircraft.
(a) *Supplies for vessels or aircraft* —
(1) *In general.* An article subject to tax under chapter 32 of the Code may be sold tax free by the manufacturer, pursuant to section 4221(a)(3) of the Code and this section, for use by the purchaser as supplies for vessels or aircraft. See [paragraph (b)](/current/title-27/section-53.134#p-53.134\(b\)) of this section for the meaning of the term “supplies for vessels or aircraft.” An article may be sold tax free under the provisions of this section only in those cases where the sale of an article by the manufacturer is made directly to the owner, officer, charterer, or authorized agent of a vessel or aircraft for use as supplies for the vessel or aircraft. No sale may be made tax free to a dealer for resale for use as supplies for vessels or aircraft, even though it is known at the time of sale by the manufacturer that the article will be so resold. See section 6416(b)(2)(B) of the Code and [paragraph (c) of § 53.178](/current/title-27/section-53.178#p-53.178\(c\)) for circumstances under which credit or refund of tax is available where tax-paid articles are used, or sold for use, as supplies for vessels or aircraft. An article may not be sold tax free under the provisions of this section by the manufacturer to passengers or members of the crew of a vessel or aircraft.
(2) *Civil aircraft of foreign registry.* In the case of any article sold by the manufacturer for use by the purchaser as supplies for civil aircraft of foreign registry employed in foreign trade or in trade between the United States and any of its possessions, the provisions of this paragraph apply only if the reciprocity requirements of section 4221(e)(1) of the Code are met. See [paragraph (c)](/current/title-27/section-53.134#p-53.134\(c\)) of this section.
(b) *Meaning of terms* —
(1) *Supplies for vessels or aircraft.* The term “supplies for vessels or aircraft” means fuel supplies, ships' stores, sea stores, or legitimate equipment on vessels of war of the United States or of any foreign nation, vessels employed in the fisheries or in the whaling business, or vessels actually engaged in foreign trade or trade between the Atlantic and Pacific ports of the United States or between the United States and any of its possessions.
(2) *Fuel supplies, ships' stores, and legitimate equipment.* The terms “fuel supplies”, “ships' stores”, and “legitimate equipment” include all articles, materials, supplies, and equipment necessary for the navigation, propulsion, and upkeep of vessels of war of the United States or of any foreign nation, vessels employed in the fisheries or in the whaling business, or vessels actually engaged in foreign trade or in trade between the Atlantic and Pacific ports of the United States or between the United States and any of its possessions, even though such vessels may make intermediate stops in the United States. The term does not include supplies for vessels engaged in trade:
(i) Between domestic ports in the Atlantic Ocean and the Gulf of Mexico,
(ii) Between domestic ports on the Pacific Ocean,
(iii) Between domestic ports on the Great Lakes, or
(iv) On the inland waterways of the United States.
(3) *Sea stores.* The term *sea stores* includes any article purchased for use or consumption by the passengers or crew, or both, of a vessel during its voyage.
(4) *Vessel.* The term *vessel* includes:
(i) Every description of watercraft or other contrivance used, or capable of being used, as a means of transportation on water,
(ii) Civil aircraft registered in the United States and employed in foreign trade or in trade between the United States and any of its possessions, and
(iii) Civil aircraft registered in a foreign country and employed in foreign trade or trade between the U.S. and its possessions.
(5) *Vessels of war of the United States or of any foreign nation.* The term *vessels of war of the United States or of any foreign nation* includes:
(i) Every description of watercraft or other contrivance used, or capable of being used, as a means of transportation on water and constituting equipment of the armed forces (including the U.S. Coast Guard and U.S. National Guard) of the United States or of a foreign nation, and
(ii) Aircraft owned by the United States or by any foreign nation and constituting equipment of the armed forces thereof.
(iii) For purposes of this section, vessels or aircraft owned by armed forces are not considered to be equipment of such armed forces while on lease or loan to an organization that is not part of the armed forces.
(6) *Vessels used in fisheries or whaling business.* The exemption provided by section 4221(a)(3) of the Code and [paragraph (a)](/current/title-27/section-53.134#p-53.134\(a\)) of this section in the case of articles sold for the prescribed use on vessels employed in the fisheries or whaling business is limited to articles sold by the manufacturer for such use on vessels while employed, and to the extent employed, exclusively in the fisheries or in the whaling business. For purposes of this section, vessels engaged in sport fishing are not considered to be employed in the fisheries business.
(7) *Civil aircraft.* The exemption provided by section 4221(a)(3) of the Code and [paragraph (a)](/current/title-27/section-53.134#p-53.134\(a\)) of this section relating to supplies for vessels or aircraft, with respect to civil aircraft, extends only to civil aircraft when employed in foreign trade, or in trade between the United States and any of its possessions. Sales of supplies to civil aircraft when engaged in trade between the Atlantic and the Pacific ports of the United States are not exempt from the tax imposed under chapter 32 of the Code. See section 4221(e)(1) of the Code and [paragraph (c)](/current/title-27/section-53.134#p-53.134\(c\)) of this section for requirement of reciprocal exemption in the case of a civil aircraft registered in a foreign country.
(8) *Trade.* The term “trade” includes the transportation of persons or property for hire and the making of the necessary preparations for such transportation. The term “trade” also includes the transportation of property on a vessel or aircraft owned or chartered by the owner of the property in connection with the purchase, sale, or exchange of the property in a commercial business operation. However, a vessel owned or chartered by a company and used in the transportation of personnel or property of such company to or from its business properties located in a foreign country, or in a possession of the United States, is not engaged in “trade”.
(c) *Reciprocity required in the case of civil aircraft.* The exemption provided by section 4221(a)(3) of the Code and [paragraph (a)](/current/title-27/section-53.134#p-53.134\(a\)) of this section with respect to the sales of supplies for civil aircraft registered in a foreign country is further limited in that the privilege of exemption may be granted only if the Secretary of Commerce advises the Secretary of the Treasury that the foreign country allows, or will allow, substantially the same reciprocal privileges. If a foreign country discontinues the allowance of such substantially reciprocal exemption, the exemption allowed by the United States will not apply after the Secretary of the Treasury is notified by the Secretary of Commerce of the discontinuance of the exemption allowed by the foreign country.
(d) *Evidence required to establish* —
(1) *In general.* The exemption provided in section 4221(a)(3) of the Code and [paragraph (a)](/current/title-27/section-53.134#p-53.134\(a\)) of this section for articles sold for use by the purchaser as supplies for vessels or aircraft applies only:
(i) If both the manufacturer and purchaser are registered under the provisions of section 4222 of the Code, or
(ii) The purchaser or both the manufacturer and the purchaser are not registered but have satisfied the provisions of [paragraph (d)(2)](/current/title-27/section-53.134#p-53.134\(d\)\(2\)) of this section.
See [paragraph (c) of § 53.131](/current/title-27/section-53.131#p-53.131\(c\)) for the evidence required to establish exemption where the purchaser is registered pursuant to section 4222 of the Code and [§ 53.140](/current/title-27/section-53.140).
(2) *Exemption certificates for use in support of tax-free sales of supplies for vessels and aircraft.*
(i) In order to establish exemption from tax under section 4221(a)(3) of the Code in those instances where the purchaser or both the manufacturer and purchaser are not registered under section 4222 of the Code, the manufacturer must obtain (prior to or at the time of the sale) from the owner, charterer, or authorized agent of the vessel or aircraft and retain in the manufacturer's possession a properly executed exemption certificate in the form prescribed by [paragraph (d)(2)(iii)](/current/title-27/section-53.134#p-53.134\(d\)\(2\)\(iii\)) of this section. If articles are sold tax-free for use as supplies for civil aircraft employed in foreign trade or in trade between the United States and any of its possessions, the exemption certificate must show the name of the country in which the aircraft is registered.
(ii) Where only occasional sales of articles are made to a purchaser for use as supplies for vessels or aircraft, a separate exemption certificate shall be furnished for each order. However, where sales are regularly or frequently made to a purchaser for such exempt use, a certificate covering all orders for a specified period not to exceed 12 calendar quarters will be acceptable. Such certificates and proper records of invoices, orders, etc., relative to tax-free sales must be kept for inspection by the appropriate TTB officer as provided in section 6001 of the Code.
(iii) *Acceptable form of exemption certificate.* A certificate of exemption to support tax-free sales under this section must include the following:
(A) Name of owner, charterer, or authorized agent.
(B) Name of company and vessel.
(C) List article(s) covered by the certificate or beginning and ending dates during which orders will be placed (not to exceed 12 calendar quarters).
(D) Statement that articles will be used only for fuel supplies, ships' stores, sea stores, or legitimate equipment on a vessel belonging to one of the class of vessels to which section 4221 of the Code applies. Identify class of vessel certificate covers (see [paragraphs (a)](/current/title-27/section-53.134#p-53.134\(a\)) and [(b)](/current/title-27/section-53.134#p-53.134\(b\)) of this section).
(E) If articles are purchased for use on civil aircraft engaged in foreign trade or trade between the United States and any of its possessions, state the country in which the aircraft is registered.
(F) Statement that it is understood that if any articles are used for any purpose other than as stated in the certificate, or are resold or otherwise disposed of, the person executing the certificate must notify the manufacturer.
(G) Statement that the certificate shall not be used to purchase tax-free articles for use as supplies, etc. on pleasure vessels or any type of aircraft except:
(*1*) Civil aircraft employed in foreign trade or trade between the United States and any of its possessions;
(*2*) Aircraft owned by the United States or any foreign country and constituting a part of the armed forces thereof.
(H) Statement that it is understood that any fraudulent use of the certificate may subject person executing certificate and all parties making fraudulent use of the certificate to all applicable criminal penalties under the Code.
(I) Statement that person executing certificate is prepared to establish by satisfactory evidence the purpose for which the article(s) was used.
(J) Date, name, signature, and address of person executing the certificate.
(iv) *TTB F 5600.34.* A preprinted certificate, TTB F 5600.34, Exemption Certificate, which is available as provided in [§ 53.21(b)](/current/title-27/section-53.21#p-53.21\(b\)), when completed, contains all necessary information for a properly executed certificate. Extra copies of TTB F 5600.34 may be reproduced as needed.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-380, [61 FR 37006](https://www.federalregister.gov/citation/61-FR-37006), July 16, 1996; T.D. TTB-44, [71 FR 16957](https://www.federalregister.gov/citation/71-FR-16957), Apr. 4, 2006; T.D. TTB-196, [89 FR 87950](https://www.federalregister.gov/citation/89-FR-87950), Nov. 6, 2024]
#### § 53.135 Tax-free sale of articles to State and local governments for their exclusive use.
(a) *In general.* An article subject to tax under Chapter 32 of the Code may be sold tax free by the manufacturer, pursuant to section 4221(a)(4) of the code and this section, to a State or local government for the exclusive use of such State or local government. See [paragraph (b)](/current/title-27/section-53.135#p-53.135\(b\)) of this section for the meaning of the term “State or local government”. An article may be sold tax free by the manufacturer under this paragraph only in those cases where the sale is made directly to a State or local government for its exclusive use. Accordingly, no sale may be made tax free to a dealer for resale to a State or local government for its exclusive use, even though it is known at the time of sale by the manufacturer that the article will be so resold. A sale of an article to a State or local government for resale is not considered to be a sale for the “exclusive use” of the State or local government, within the meaning of section 4221(a)(4) of the Code, and, therefore, such sales may not be made tax free. Such sales are not exempt regardless of whether the resales are made to government employees, or the fact that the article is an item of equipment the employee is required to possess in carrying out his duties. For example, pistols or revolvers may not be sold tax free to a State or local government for resale to its police officers. See section 6416(b)(2)(C) of the Code, and [paragraph (d) of § 53.178](/current/title-27/section-53.178#p-53.178\(d\)), for the circumstances under which credit or refund of tax is available where tax-paid articles are sold for the exclusive use of a State or local government.
(b) *State or local government.* The term *State or local government* includes any State, the District of Columbia, and any political subdivision of any of the foregoing. *See,* section 7871(a)(2)(B) of the Code and [26 CFR 305.7701-1](/current/title-26/section-305.7701-1) *et seq.,* which provide that an Indian tribal government shall be treated as a State for purposes of exemption from an excise tax imposed by chapter 32. Section 7871(b) of the Code provides that the exemption from tax applies only if the transaction involves the exercise of an essential governmental function of the Indian tribal government.
(c) *Evidence required in support of tax-free sales to State or local governments.*
(1) In the case of a State or local government which is registered (see [§ 53.141](/current/title-27/section-53.141) for provisions under which a State or local government may register if it so desires), the provisions of [paragraph (c) of § 53.131](/current/title-27/section-53.131#p-53.131\(c\)) have application as to the evidence required in support of tax-free sales. If a State or local government is not registered, the evidence required in support of a tax-free sale to the State or local government shall, except as provided in [paragraph (c)(2)](/current/title-27/section-53.135#p-53.135\(c\)\(2\)) of this section, consist of a certificate, executed and signed by an officer or employee authorized by the State or local government to execute and sign the certificate. If it is impracticable to furnish a separate certificate for each order or contract because of frequency of purchases, a certificate covering all orders between given dates (such period not to exceed 12 calendar quarters) will be acceptable. The certificates and proper records of invoices, orders, etc., relative to tax-free sales must be retained by the manufacturer as provided in [§ 53.24(d)](/current/title-27/section-53.24#p-53.24\(d\)). A certificate of exemption to support tax-free sales under this section must contain the following:
(i) Title of official executing certificate, branch of government, date executed, and statement that official is authorized to execute certificate.
(ii) List articles covered by the certificate or beginning and ending dates during which orders will be placed by the purchaser (period not to exceed 12 calendar quarters).
(iii) Name of manufacturer from which articles purchased.
(iv) Governmental unit purchasing articles.
(v) Statement that is understood that articles purchased under this certificate of exemption are limited to use exclusively by the purchasing governmental entity.
(vi) Statement that is understood that any fraudulent use of this certificate may subject the person executing the certificate and all parties making fraudulent use of the certificate to all applicable criminal penalties under the Code.
(vii) Name, address, and signature of person executing the certificate.
(2) A purchase order, provided that all of the information required by [paragraph (c)(1)](/current/title-27/section-53.135#p-53.135\(c\)\(1\)) of this section is included therein, is acceptable in lieu of a separate exemption certificate.
(3) *TTB F 5600.35.* A preprinted certificate, TTB F 5600.35, Exemption Certificate, which is available as provided in [§ 53.21(b)](/current/title-27/section-53.21#p-53.21\(b\)), when completed, contains all necessary information for a properly executed certificate. Extra copies of TTB F 5600.35 may be reproduced as needed.
(d) *Resale of articles purchased tax free by a State or local government.* If articles purchased tax free for the exclusive use of a State or local government (whether on the basis of a registration number or an exemption certificate) are, prior to use by the State or local government, resold under circumstances that do not amount to an exclusive use by the State or local government (such as pistols or revolvers that are resold by a police department to its police officers), the parties responsible in the State or local government are required to inform the manufacturer, producer, or importer from whom the articles were purchased that they were disposed of in a manner that did not amount to an exclusive use by the State or local government. A willful failure to supply the manufacturer, producer, or importer with the information required by this subparagraph will subject responsible parties to the penalties provided by section 7203 of the Code.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-380, [61 FR 37006](https://www.federalregister.gov/citation/61-FR-37006), July 16, 1996; T.D. TTB-196, [89 FR 87950](https://www.federalregister.gov/citation/89-FR-87950), Nov. 6, 2024]
#### § 53.136 Tax-free sales of articles to nonprofit educational organizations.
(a) *In general.* An article subject to tax under chapter 32 of the Code may be sold tax free by the manufacturer, pursuant to section 4221(a)(5) of the Code and this section, to a nonprofit educational organization for its exclusive use. See [paragraph (b)](/current/title-27/section-53.136#p-53.136\(b\)) of this section for the meaning of the term “nonprofit educational organization”. An article may be sold tax free by the manufacturer under this paragraph only in those cases where the sale of an article by the manufacturer is made directly to a nonprofit educational organization for its exclusive use. Accordingly, no sale may be made tax free to a dealer for resale to a nonprofit educational organization for its exclusive use even though it is known at the time of sale by the manufacturer that the article will be so resold. See section 6416(b)(2)(D) of the Code, and [paragraph (e) of § 53.178](/current/title-27/section-53.178#p-53.178\(e\)), for the circumstances under which credit or refund of tax is available where tax-paid articles are sold for the exclusive use of a nonprofit educational organization.
(b) *Nonprofit educational organization.* The term “nonprofit educational organization” means an organization described in section 170(b)(1)(A)(ii) of the Code that is exempt from income tax under section 501(a) of the Code. Section 170(b)(1)(A)(ii) describes an “educational organization” as one that normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on. The term also includes a school operated as an activity of an organization described in section 501(c)(3) of the Code which is exempt from income tax under section 501(a) of the Code, provided the primary function of such school is the presentation of formal instruction and provided such school normally maintains a regular faculty and curriculum and normally has a regularly enrolled body of pupils or students in attendance at the place where its educational activities are regularly carried on.
(c) *Evidence required in support of tax-free sales to nonprofit educational organizations.* Every nonprofit educational organization purchasing tax free under section 4221(a)(5) of the Code must furnish the following information to the seller:
(1) The tax exempt purpose for which the article or articles are being purchased, and
(2) Its registration number. Such information must be in writing and may be noted on the purchase order or other document furnished by the purchaser to the seller in connection with each sale “except that a single notification containing the information described in this paragraph may cover all sales by the seller to the purchaser made during a designated period not to exceed 12 successive calendar quarters.”. See [paragraph (c) of § 53.131](/current/title-27/section-53.131#p-53.131\(c\)) for the evidence required to establish exemption.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-447, [66 FR 19088](https://www.federalregister.gov/citation/66-FR-19088), Apr. 13, 2001]
#### §§ 53.137-53.139 \[Reserved]
#### § 53.140 Registration.
(a) *General rule.* Except as provided in [§ 53.141](/current/title-27/section-53.141), tax-free sales under section 4221 of the Code may be made only if the manufacturer, first purchaser, and second purchaser, as the case may be, have registered as required by this section. To secure a Certificate of Registry, the applicant must furnish the information required in [paragraph (b)](/current/title-27/section-53.140#p-53.140\(b\)) of this section.
(b) *Information to be submitted.* Except as provided in [§ 53.141](/current/title-27/section-53.141), any person who is eligible to sell or purchase articles free of a tax imposed by section 4181 of the Code and who has not registered with the Commissioner of the Internal Revenue Service prior to January 1, 1991 or with TTB in accordance with the provisions of this section shall, prior to making a tax-free sale or purchase, file TTB Form 5300.28, in duplicate, executed in accordance with the instructions contained on the reverse of TTB Form 5300.28. The person who receives an approved Certificate of Registry shall be considered to be registered for purposes of selling or purchasing articles tax free as provided in this section. In the case of a nonprofit educational organization, information shall be furnished showing that the organization is an educational organization described in section 170(b)(1)(A)(ii) of the Code that is exempt from income tax under section 501(a) of the Code, or is a school operated as an activity of an organization described in section 501(c)(3) that is exempt from income tax under section 501(a).
(c) *Evidence required in support of tax-free sales.* See [§ 53.131(c)(1)](/current/title-27/section-53.131#p-53.131\(c\)\(1\)) for evidence required in support of tax-free sales to purchasers who are required to be registered.
(d) *Failure to register.* If either the seller or purchaser is not registered as required by this section of the regulations, tax-free sales may not be made, except as indicated in [§ 53.141](/current/title-27/section-53.141).
(e) *Cross references.*
(1) For exceptions to the requirement for registration, see section 4222(b) of the Code and [§ 53.141](/current/title-27/section-53.141).
(2) For revocation or suspension of registration, see [§ 53.142](/current/title-27/section-53.142).
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by ATF-447, [66 FR 19088](https://www.federalregister.gov/citation/66-FR-19088), Apr. 13, 2001]
#### § 53.141 Exceptions to the requirement for registration.
(a) *State and local governments.*
(1) A State or local government purchasing articles direct from the manufacturer for its exclusive use may, but is not required to, register as provided in [§ 53.140](/current/title-27/section-53.140). To establish the right to sell articles tax free to a State or local government that is not registered, the manufacturer must obtain from an authorized official of the State or local government and retain in the manufacturer's possession either a properly executed exemption certificate, or a purchase order that contains the same information required to be furnished in an exemption certificate. See [§ 53.135(c)](/current/title-27/section-53.135#p-53.135\(c\)) for the information necessary to substantiate a tax-free sale under such circumstances.
(2) Each State requesting registration will be assigned one Certificate of Registry. The registration number shown on this certificate may be used by all agencies, boards, and commissions of the State that are authorized by the State to make purchases for the exclusive use of the State. However, the registration number assigned to a State may not be used by any political subdivision of that State, such as a county or municipality. Each political subdivision of a State desiring to obtain a Certificate of Registry must obtain a separate registration number.
(b) *Sales or resales to foreign purchasers for export.* Persons whose principal place of business is not within the United States may, but are not required to, register in order to purchase articles tax free for export. To establish the right to sell articles tax free for export to a purchaser who is not registered and who is located in a foreign country or a possession of the United States, the manufacturer must obtain the evidence required by [§ 53.133(b)](/current/title-27/section-53.133#p-53.133\(b\)).
(c) *United States.* The registration requirements of the regulations in this part do not apply to purchases and sales by the United States or any of its agencies or instrumentalities. The evidence required in support of such tax-free purchases and sales is a notation on the purchase order or other document furnished to the seller clearly indicating that the article or articles are being purchased tax free as authorized by chapter 32 of the Code.
(d) *Supplies for vessels and aircraft.* An article subject to an excise tax imposed by chapter 32 of the Code may be sold tax free by the manufacturer under the provisions of [§ 53.134](/current/title-27/section-53.134) for use by the purchaser as supplies for a vessel or aircraft if both the manufacturer and the purchaser are registered under the provisions of [§ 53.140](/current/title-27/section-53.140). The article also may be sold tax free for such use even though neither the manufacturer nor the purchaser is so registered if the provisions of [paragraph (d) of § 53.134](/current/title-27/section-53.134#p-53.134\(d\)) are satisfied.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-312, [56 FR 31084](https://www.federalregister.gov/citation/56-FR-31084), July 9, 1991]
#### § 53.142 Denial, revocation or suspension of registration.
(a) The appropriate TTB officer is authorized to deny, revoke or temporarily suspend, upon written notice, the registration of any person and the right of such person to sell or purchase articles tax free under section 4221 of the Code in any case in which he finds that:
(1) The registrant is not a bona fide manufacturer, or a purchaser reselling direct to manufacturers or exporters;
(2) The registrant is for some other reason not eligible under these regulations to retain a Certificate of Registry; or
(3) The registrant has used his registration to avoid payment of the tax imposed by section 4181 of the Code, or to postpone or interfere in any manner with the collection of such tax;
(4) Such denial, revocation, or suspension is necessary to protect the revenue; or
(5) The registrant failed to comply with the requirements of [paragraph (c) of § 53.140](/current/title-27/section-53.140#p-53.140\(c\)), relating to the evidence required to support a tax-free sale.
(b) The denial, revocation, or suspension of registration is in addition to any other penalty that may apply under the law for any act or failure to act.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-365, [60 FR 33671](https://www.federalregister.gov/citation/60-FR-33671), June 28, 1995]
#### § 53.143 Special rules relating to further manufacture.
(a) *Purchasing manufacturer to be treated as the manufacturer.* For purposes of Chapter 32 of the Code, a manufacturer or producer to whom an article is sold or resold tax free under section 4221(a)(1) of the Code for use by it in further manufacture shall be treated as the manufacturer or producer of such article. If a manufacturer who purchases an article tax free for further manufacture does not use the article for further manufacture, the sale of the article by it, or its use of the article other than in further manufacture, shall, for purposes of the taxes imposed by chapter 32 of the Code, be treated as a sale or use of the article by the manufacturer thereof. See [paragraphs (b)](/current/title-27/section-53.143#p-53.143\(b\)) and [(c)](/current/title-27/section-53.143#p-53.143\(c\)) of this section for determination of taxable sale price where an article purchased tax free for further manufacture is resold, or used other than in further manufacture.
(b) *Computation of tax.* Except as provided in [paragraph (c)](/current/title-27/section-53.143#p-53.143\(c\)) of this section, the tax liability referred to in [paragraph (a)](/current/title-27/section-53.143#p-53.143\(a\)) of this section shall be based on the price for which the article was sold by the purchasing manufacturer, or, where the manufacturer uses the article for a purpose other than that for which it was purchased, the tax shall be based on the price at which such or similar articles are sold, in the ordinary course of trade, by manufacturers, producers, or importers thereof. See section 4218(e) of the Code and [§ 53.115](/current/title-27/section-53.115).
(c) *Election.*
(1) Instead of computing the tax as described under [paragraph (b)](/current/title-27/section-53.143#p-53.143\(b\)) of this section, the purchasing manufacturer who has incurred liability for tax on its sale or use of an article as provided by [paragraph (a)](/current/title-27/section-53.143#p-53.143\(a\)) of this section may compute the tax incurred under chapter 32 of the Code by using as the tax base either the price for which the article was sold to it by the first purchaser, if any, or the price for which such article was sold by the actual manufacturer, producer, or importer of such article. The purchasing manufacturer must have in its possession information upon which to substantiate such basis for tax. For purposes of this paragraph, the price for which the article was sold by the actual manufacturer or by the first purchaser shall be determined as provided in section 4216 of the Code and [§§ 53.91-53.102](/current/title-27/section-53.91). However, such price shall not be adjusted for any discount, rebate, allowance, return, or repossession of a container or covering, or otherwise.
(2) The election under this paragraph shall be in the form of a statement attached to the return reporting the tax applicable to the sale or use of the article which gave rise to such tax liability. Such election, once made, may not be revoked.
## Subpart L—Refunds and Other Administrative Provisions of Special Application to Manufacturers Taxes
#### § 53.151 Returns.
(a) *In general.*
(1) Liability for tax imposed under chapter 32 of the Code shall be reported on TTB Form 5300.26, Federal Firearms and Ammunition Excise Tax Return. Except as provided in [paragraphs (a)(2)](/current/title-27/section-53.151#p-53.151\(a\)\(2\)) and [(b)](/current/title-27/section-53.151#p-53.151\(b\)) of this section, a return on Form 5300.26 shall be filed for a period of one calendar quarter.
(2) *Return periods after September 30, 1992.* For return periods after September 30, 1992, every person required to make a return on TTB Form 5300.26 who does not incur any firearms and ammunition excise tax liability in a given calendar quarter shall not be required to file a return on TTB Form 5300.26 for that calendar quarter. Except as provided in [paragraph (a)(5)](/current/title-27/section-53.151#p-53.151\(a\)\(5\)) of this section, every person required to make a return on TTB Form 5300.26 who does not incur any firearms and ammunition excise tax liability for the entire calendar year and who has not filed a final return in accordance with [§ 53.152](/current/title-27/section-53.152) shall file an annual return on TTB Form 5300.26.
(3) *Return periods prior to October 1, 1992.* For return periods prior to October 1, 1992, every person required to make a return on TTB Form 5300.26 shall make a return for each calendar quarter (whether or not liability was incurred for any tax reportable on the return for the return period) until the person has filed a final return in accordance with [§ 53.152](/current/title-27/section-53.152).
(4) *Forms, etc.* Each return required under the regulations in this part, together with any prescribed copies, records, or supporting data, shall be completed in accordance with the applicable forms, instructions, and regulations.
(5) *Special rule for one-time or occasional filings for return periods on or after July 1, 1995.* One-time or occasional filers are not required to file quarterly or annual returns pursuant to [paragraph (a)(2)](/current/title-27/section-53.151#p-53.151\(a\)\(2\)) of this section if the person reporting tax does not engage in any activity with respect to which tax is reportable on the return in the course of a trade or business. Such persons shall file and pay tax for periods only when liability is incurred. See [§ 53.159(b)(2)](/current/title-27/section-53.159#p-53.159\(b\)\(2\)), providing that a deposit of taxes is not required for a one-time or occasional filing.
(b) *Monthly and semimonthly returns* —
(1) *Requirement.* If the appropriate TTB officer determines that any taxpayer who is required to deposit taxes under the provision of [§§ 53.157](/current/title-27/section-53.157) or [53.159](/current/title-27/section-53.159) has failed to make deposits of those taxes, the taxpayer shall be required, if so notified in writing by the appropriate TTB officer, to file a monthly or semimonthly return on TTB Form 5300.26. Every person so notified by the appropriate TTB officer shall file a return for the calendar month or semimonthly period in which the notice is received and for each calendar month or semimonthly period thereafter until the person has filed a final return in accordance with [§ 53.152](/current/title-27/section-53.152) or is required to file returns on the basis of a different return period pursuant to notification as provided in [paragraph (b)(2)](/current/title-27/section-53.151#p-53.151\(b\)\(2\)) of this section.
(2) *Change of requirement.* The appropriate TTB officer may require the taxpayer, by notice in writing, to file a quarterly or monthly return, if the taxpayer has been filing returns for a semimonthly period, or may require the taxpayer to file a quarterly or semimonthly return, if the taxpayer has been filing monthly returns.
(3) *Return for period change takes effect.*
(i) If a taxpayer who has been filing quarterly returns receives notice to file a monthly or semimonthly return, or a taxpayer who has been filing monthly returns receives notice to file a semimonthly return, the first return required pursuant to the notice shall be filed for the month or semimonthly period in which the notice is received and all months or semimonthly periods which are not includable in an earlier period for which the taxpayer is required to file a return.
(ii) If a taxpayer who has been filing monthly or semimonthly returns receives notice to file a quarterly return, the last month or semimonthly period for which a return shall be filed is the last month or semimonthly period of the calendar quarter in which the notice is received.
(iii) If a taxpayer who has been filing semimonthly returns receives notice to file a monthly return, the last semimonthly period for which a return shall be made is the last semimonthly period of the month in which the notice is received.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-330, [57 FR 40325](https://www.federalregister.gov/citation/57-FR-40325), Sept. 3, 1992; T.D. ATF-365, [60 FR 33671](https://www.federalregister.gov/citation/60-FR-33671), June 28, 1995; T.D. TTB-91, [76 FR 5481](https://www.federalregister.gov/citation/76-FR-5481), Feb. 1, 2011]
#### § 53.152 Final returns.
(a) *In general.* Any person who is required to make a return on TTB Form 5300.26 pursuant to [§ 53.151](/current/title-27/section-53.151) and who in any return period ceases operations in respect of which the person is required to make a return on the form, shall make the return for that return period as a final return. A return made as a final return shall be marked “Final Return” by the person filing the return. A taxpayer who has only temporarily ceased to incur liability for tax required to be reported on TTB Form 5300.26 because of temporary or seasonal suspension of business or for other reasons, shall not make a final return until such operations are permanently ceased.
(b) *Statement to accompany final return.* Each final return shall have attached a statement showing the address at which the records required by the regulations in this part will be kept, the name of the person keeping the records, and, if the business of the taxpayer has been sold or otherwise transferred to another person, the name and address of that person and the date on which the sale or transfer took place. If no sale or transfer occurred or if the taxpayer does not know the name of the person to whom the business was sold or transferred, that fact should be included in the statement.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-330, [57 FR 40325](https://www.federalregister.gov/citation/57-FR-40325), Sept. 3, 1992. Redesignated in part by T.D. ATF-365, [60 FR 33670](https://www.federalregister.gov/citation/60-FR-33670), June 28, 1995]
#### § 53.153 Time for filing returns.
(a) *Quarterly returns.* Each return required to be made under [§ 53.151(a)](/current/title-27/section-53.151#p-53.151\(a\)) for a return period of one calendar quarter shall be filed on or before the last day of the first calendar month following the close of the period for which it is made. However, a return may be filed on or before the 10th day of the second calendar month following the close of the period if timely deposits under section 6302(c) of the Code and [§ 53.157](/current/title-27/section-53.157) have been made in full payment of the taxes due for the period. For purposes of the preceding sentence, a deposit which is not required by regulations in respect of the return period may be made on or before the last day of the first calendar month following the close of the period.
(b) *Monthly, semimonthly and annual returns* —
(1) *Monthly returns.* Each return required to be made under [§ 53.151(b)](/current/title-27/section-53.151#p-53.151\(b\)) for a monthly period shall be filed not later than the 15th day of the month following the close of the period for which it is made.
(2) *Semimonthly returns.* Each return required to be made under [§ 53.151(b)](/current/title-27/section-53.151#p-53.151\(b\)) for a semimonthly period shall be filed not later than the 10th day of the semimonthly period following the close of the period for which it is made.
(3) *Annual returns.* Each return filed under the provisions of [§ 53.151(a)](/current/title-27/section-53.151#p-53.151\(a\)) for a return period of one calendar year shall be filed not later than the 31st day following the close of the calendar year.
(c) *Last day for filing.* If the due date falls on a Saturday, Sunday, or legal holiday, the return and remittance shall be due on the next succeeding day which is not a Saturday, Sunday, or legal holiday. For purposes of this section, “legal holiday” is defined by section 7503 of the Code and [26 CFR 301.7503(b)](/current/title-26/section-301.7503#p-301.7503\(b\)).
(d) *Late filing.* The taxpayer is subject to a penalty for failure to file a return or to pay tax within the prescribed time as imposed by section 6651 of the Code, if the return and remittance are not filed before the close of business on the prescribed last day of filing. For additions to the tax in the case of failure to file a return within the prescribed time, see [27 CFR 70.96](/current/title-27/section-70.96).
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-330, [57 FR 40325](https://www.federalregister.gov/citation/57-FR-40325), Sept. 3, 1992]
#### § 53.154 Manner of filing returns.
(a) Each return on TTB Form 5300.26 shall be filed with TTB, in accordance with the instructions on the form.
(b) When the taxpayer sends the return on TTB Form 5300.26 by U.S. Mail, the official postmark of the U.S. Postal Service stamped on the cover in which the return was mailed shall be considered the date of delivery of the return. When the postmark on the cover is illegible, the burden of proving when the postmark was made will be on the taxpayer. When the taxpayer sends the return with or without remittance by registered mail or by certified mail, the date of registry or the date of the postmark on the sender's receipt of certified mail, as the case may be, shall be treated as the date of delivery of the return and, if accompanied, of the remittance.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-330, [57 FR 40325](https://www.federalregister.gov/citation/57-FR-40325), Sept. 3, 1992]
#### § 53.155 Extension of time for filing returns.
(a) *In general.* Ordinarily, no extension of time will be granted for filing any return statement or other document required with respect to the taxes impose by chapter 32, because the information required for the filing of those documents is under normal circumstances readily available. However, if because of temporary conditions beyond the taxpayer's control, a taxpayer believes an extension of time for filing is justified, the taxpayer may apply to the appropriate TTB officer for an extension. An extension of time for filing a return does not operate to extend the time for payment of the tax or any part of the tax unless so specified in the extension. For extensions of time for payment of the tax, see [§ 53.156](/current/title-27/section-53.156).
(b) *Application for extension of time.* The application for an extension of time for filing the return shall be addressed to the appropriate TTB officer with whom the return is to be filed and must contain a full recital of the causes for the delay. It should be made on or before the due date of the return, and failure to do so many indicate negligence and constitute sufficient cause for denial. It should, where possible, be made sufficiently early to permit consideration of the matter and reply before what otherwise would be the due date of the return.
(c) *Filing the return.* If an extension of time for filing the return is granted, a return shall be filed before the expiration of the period of extension.
#### § 53.156 Extension of time for paying tax shown on return.
(a) *In general.*
(1) Ordinarily, no extensions of time will be granted for payment of any tax imposed by Chapter 32 of the Code, and shown or required to be shown on any return. However, if because of temporary conditions beyond the taxpayer's control a taxpayer believes an extension of time for payment is justified, the taxpayer may apply for an extension filing TTB Form 5600.38. The period of an extension shall not be in excess of 6 months from the date fixed for payment of the tax, except that if the taxpayer is abroad the period of the extension may be in excess of 6 months.
(2) The granting of an extension of time for filing a return does not operate to extend the time for the payment of the tax or any part of the tax unless so specified in the extension. See [§ 53.155](/current/title-27/section-53.155).
(b) *Undue hardship required for extension.* An extension of the time for payment shall be granted only upon a satisfactory showing that payment on the due date of the amount with respect to which the extension is desired will result in an undue hardship. The extension will not be granted upon a general statement of hardship. The term “undue hardship” means more than an inconvenience to the taxpayer. It must appear that substantial financial loss, for example, loss due to the sale of property at a sacrifice price, will result to the taxpayer from making payment on the due date of the amount with respect to which the extension is desired. If a market exists, the sale of property at the current market price is not ordinarily considered as resulting in an undue hardship.
(c) *Application for extension.* An application for an extension of time for payment of the tax shown or required to be shown on any return shall be made on TTB Form 5600.38, Application for Extension of Time for Payment of Tax, and shall be accompanied by evidence showing the undue hardship that would result to the taxpayer if the extension were refused. The application shall also be accompanied by a statement of the assets and liabilities of the taxpayer and an itemized statement showing all receipts and disbursements for each of the 3 months immediately preceding the due date of the amount to which the application relates. The application, with supporting documents, must be filed on or before the date prescribed for payment of the amount with respect to which the extension is desired. The application will be examined, and within 30 days, if possible, will be denied, granted, or tentatively granted subject to certain conditions of which the taxpayer will be notified. If an additional extension is desired, the request for it must be made on or before the expiration of the period for which the prior extension is granted.
(d) *Payment pursuant to extension.* If an extension of time for payment is granted, the payment shall be made on or before the expiration of the period of the extension without the necessity of notice and demand. The granting of an extension of time for payment of the tax does not relieve the taxpayer from liability for the payment of interest on the tax during the period of the extension. See section 6601 of the Code and [26 CFR 301.6601-1](/current/title-26/section-301.6601-1).
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-312, [56 FR 31084](https://www.federalregister.gov/citation/56-FR-31084), July 9, 1991; T.D. ATF-447, [66 FR 19088](https://www.federalregister.gov/citation/66-FR-19088), Apr. 13, 2001]
#### § 53.157 Deposit requirement for deposits made for calendar quarters prior to July 1, 1995.
Note:
For deposit requirement for deposits made for calendar quarters beginning on or after July 1, 1995, see [§ 53.159](/current/title-27/section-53.159).
(a) *Monthly deposits.* Except as provided in [paragraph (b)](/current/title-27/section-53.157#p-53.157\(b\)) of this section, if for any calendar month (other than the last month of a calendar quarter) any person required to file a quarterly excise tax return on TTB Form 5300.26 has a total liability under this part of more than \$100 for all excise taxes reportable on that form, the amount of liability for taxes shall be deposited by the person in accordance with the instructions on TTB Form 5300.27 on or before the last day of the month following the calendar month.
(b) *Semimonthly deposits.*
(1) If any person required to file an excise tax return on TTB Form 5300.26 for any calendar quarter has a total liability under this part of more than \$2,000 for all excise taxes reportable on that form for any calendar month in the preceding calendar quarter, the amount of that liability for taxes under this part for any semimonthly period (as defined in [paragraph (d)(1)](/current/title-27/section-53.157#p-53.157\(d\)\(1\)) of this section) in the succeeding calendar quarter shall be deposited by the person in accordance with the instructions on TTB Form 5300.27 on or before the depositary date (as defined in [paragraph (d)(2)](/current/title-27/section-53.157#p-53.157\(d\)\(2\)) of this section) applicable to the semimonthly period.
(2) A person will be considered to have complied with the requirements of [paragraph (b)(1)](/current/title-27/section-53.157#p-53.157\(b\)\(1\)) of this section for a semimonthly period if—
(i)
(A) The person's deposit for the semimonthly period is not less than 90 percent of the total amount of the excise taxes reportable by the person on TTB Form 5300.26 for the period, and
(B) If the semimonthly period occurs in a calendar month other than the last month in a calendar quarter, the person deposits any underpayment for the month by the 9th day of the second month following the calendar month; or
(ii)
(A) The person's deposit for each semimonthly period in the calendar month is not less than 45 percent of the total amount of the excise taxes reportable by the person on TTB Form 5300.26 for the month, and
(B) If such month is other than the last month in a calendar quarter, the person deposits any underpayment for such month by the 9th day of the second month following the calendar month; or
(iii)
(A) The person's deposit for each semimonthly period in the calendar month is not less than 50 percent of the total amount of the excise taxes reportable by the person on TTB Form 5300.26 for the second preceding calendar month, and
(B) If such month is other than the last month in a calendar quarter, the person deposits any underpayment for such month by the 9th day of the second month following the calendar month; or
(iv)
(A) The requirements of [paragraph (b)(2) (i)(A)](/current/title-27/section-53.157#p-53.157\(b\)\(2\)\(i\)\(A\)), [(ii)(A)](/current/title-27/section-53.157#p-53.157\(ii\)\(A\)), or [(iii)(A)](/current/title-27/section-53.157#p-53.157\(iii\)\(A\)) of this section are satisfied for the first semimonthly period of a calendar month after December 1990,
(B) If the person's deposit for the second semimonthly period of the calendar month is, when added to the deposit for the first semimonthly period, not less than 90 percent of the total amount of the excise taxes reportable by the person on TTB Form 5300.26 for the calendar month, and
(C) If the semimonthly periods occur in a calendar month other than the last month in a calendar quarter, the person deposits any underpayment for the month by the 9th day of the second month following the calendar month.
(3)
(i) [Paragraph (b)(2) (ii)](/current/title-27/section-53.157#p-53.157\(b\)\(2\)\(ii\)) and [(iii)](/current/title-27/section-53.157#p-53.157\(b\)\(2\)\(iii\)) of this section shall not apply to any person who normally incurs in the first semimonthly period in each calendar month more than 75 percent of the person's total excise tax liability under this part for the month.
(ii) Persons who make their deposits in accordance with [paragraph (b)(2) (ii)](/current/title-27/section-53.157#p-53.157\(b\)\(2\)\(ii\)), [(iii)](/current/title-27/section-53.157#p-53.157\(b\)\(2\)\(iii\)), or [(iv)](/current/title-27/section-53.157#p-53.157\(b\)\(2\)\(iv\)) of this section will find it unnecessary to keep their books and records on a semimonthly basis.
(c) *Deposit of certain excess undeposited amounts.* Notwithstanding [paragraphs (a)](/current/title-27/section-53.157#p-53.157\(a\)) and [(b)](/current/title-27/section-53.157#p-53.157\(b\)) of this section, if any person required to file an excise tax return on TTB Form 5300.26 for any calendar quarter beginning after December 31, 1990, has a total liability under this part for all excise taxes reportable on the form for the calendar quarter which exceeds by more than \$100 the total amount of taxes deposited by the person pursuant to [paragraph (a)](/current/title-27/section-53.157#p-53.157\(a\)) or [(b)](/current/title-27/section-53.157#p-53.157\(b\)) of this section for the calendar quarter, the person shall, on or before the last day of the calendar month following the calendar quarter for which the return is required to be filed, deposit in accordance with the instructions on TTB Form 5300.27 the full amount by which the person's liability for all excise taxes reportable on the return for that calendar quarter exceeds the amount of excise taxes previously deposited by the person for that calendar quarter.
(d) *Definitions* —
(1) *Semimonthly period.* The term *semimonthly period* means the first 15 days of a calendar month or the portion of a calendar month following the 15th day of that month.
(2) *Depositary date.* The term *depositary date* means, in the case of deposits for semimonthly periods beginning after December 31, 1990, the 9th day of the semimonthly period following the semimonthly period for which the taxes are reportable.
(3) *Lockbox financial institution.* The term *lockbox financial institution* means the financial institution designated as a depository for the payment of excise taxes on TTB Form 5300.27, Federal Firearms and Ammunition Excise Tax Deposit form.
(e) *Depositary forms and procedures* —
(1) *In general.* Each remittance of amounts required to be deposited for periods beginning after December 31, 1990 shall be accompanied by an TTB Form 5300.27, Federal Firearms and Ammunition Excise Tax Deposit form, or TTB Form 5300.26, Federal Firearms and Ammunition Excise Tax Return, which shall be prepared in accordance with the applicable instructions. Taxpayers electing to remit deposits by EFT pursuant to [§ 53.158](/current/title-27/section-53.158) shall prepare and submit TTB Form 5300.26 or TTB Form 5300.27 in accordance with the instructions on the form. The timeliness of the deposit will be determined by the date it is received (or is deemed received under section 7502(e) and [26 CFR 301.7502-1](/current/title-26/section-301.7502-1)) by the lockbox financial institution, or the TTB officer designated on TTB Form 5300.27 or TTB Form 5300.26 accompanying the deposit, or when made by electronic fund transfer, the Treasury Account. Amounts deposited pursuant to this paragraph shall be considered to be paid on the last day prescribed for filing the return in respect of the tax (determined without regard to any extension of time for filing the returns), or at the time deposited, whichever is later.
(2) *Number of remittances.* A person required by this section to make deposits may make one or more remittances with respect to the amount required to be deposited. An amount of tax which is not otherwise required by this section to be deposited may, nevertheless, be deposited if the person liable for the tax so desires.
(3) *Information required.* Each person making deposits pursuant to this section shall report on the return for the period with respect to which the deposits are made information regarding the deposits in accordance with the instructions applicable to the return and pay (or deposits by the due date of the return) the balance, if any, of the taxes due for the period.
(4) *Procurement of prescribed forms.* Copies of the Federal Firearms and Ammunition Excise Tax Deposit form will be furnished, so far as possible, to persons required to make deposits under this section. Such a person will not be excused from making a deposit, however, by the fact that no form has been furnished. A person not supplied with the form is required to apply for it in ample time to make the required deposits within the time prescribed, supplying with the application the person's name, employer identification number, address, and the taxable period to which the deposits will relate. Copies of the Federal Firearms and Ammunition Excise Tax Deposit form are available as provided in [§ 53.21(b)](/current/title-27/section-53.21#p-53.21\(b\)).
(f) *Nonapplication to certain taxes.* This section does not apply to taxes for:
(1) Any month or semimonthly period in which the taxpayer receives notice pursuant to [§ 53.151(b)](/current/title-27/section-53.151#p-53.151\(b\)) to file TTB Form 5300.26 or
(2) Any subsequent month or semimonthly period for which a return on TTB Form 5300.26 is required.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-312, [56 FR 31084](https://www.federalregister.gov/citation/56-FR-31084), July 9, 1991; T.D. ATF-330, [57 FR 40325](https://www.federalregister.gov/citation/57-FR-40325), Sept. 3, 1992; T.D. ATF-365, [60 FR 33671](https://www.federalregister.gov/citation/60-FR-33671), June 28, 1995; T.D. ATF-447, [66 FR 19088](https://www.federalregister.gov/citation/66-FR-19088), Apr. 13, 2001; T.D. TTB-44, [71 FR 16958](https://www.federalregister.gov/citation/71-FR-16958), Apr. 4, 2006]
#### § 53.158 Payment of tax by electronic fund transfer.
(a) *In general.* For return periods after September 30, 1992, any taxpayer liable for firearms and ammunition excise taxes incurred under this part may elect to remit payments and deposits of the taxes (taxpayments) by electronic fund transfer (EFT). A taxpayer who elects to make remittance by EFT must use that method of remitting excise taxes on firearms and ammunition for a minimum of four consecutive calendar quarters. A taxpayer who makes remittance by EFT for a calendar quarter may not use any other method of remitting and ammunition excise taxes for that quarter.
(b) *Requirements.*
(1) On or before the 10th day of the calendar quarter preceding the calendar quarter in which the taxpayer will begin remitting taxes by EFT, each taxpayer who elects to make remittances by EFT of firearms and ammunition excise taxes incurred under this part shall give written notice to the appropriate TTB officer, indicating that remittances will be paid by EFT. Taxpayers who gave written notification in a previous calendar quarter electing to make remittances of tax by EFT are not required to give additional written notifications to continue remitting tax by EFT for succeeding calendar quarters.
(2) For each deposit made or return filed in accordance with this subpart, the taxpayer shall direct the taxpayer's financial institution to make an EFT in the amount of the taxpayment to the Treasury Account as provided in [paragraph (e)](/current/title-27/section-53.158#p-53.158\(e\)) of this section. The request will be made to the financial institution early enough for the transfer of funds to be made to the Treasury Account no later than the close of business on the last day for making the deposit or filing the return as prescribed in [§§ 53.157](/current/title-27/section-53.157) or [53.159](/current/title-27/section-53.159), and [53.153](/current/title-27/section-53.153). The request will take into account any time limit established by the financial institution.
(3) Taxpayers who elect to discontinue making remittances by EFT of firearms and ammunition excise taxes may make such election at any time following four consecutive calendar quarters in which tax is remitted by EFT. Taxpayers electing to discontinue making remittances by EFT shall remit the tax with the next deposit or return as prescribed in [§§ 53.157](/current/title-27/section-53.157) or [53.159](/current/title-27/section-53.159), and [53.151](/current/title-27/section-53.151) for remittances not made by EFT and notify the appropriate TTB officer by attaching a written notification to the tax deposit form or return stating that remittance of firearms and ammunition excise taxes will no longer be made by EFT.
(c) *Remittance.*
(1) Taxpayers who elect to make firearms and ammunition excise taxpayments by EFT shall file the deposit form and/or return with TTB in accordance with the applicable instructions on the forms.
(2) Remittances will be considered as made when the taxpayment by EFT is received by the Treasury Account when it is paid to a Federal Reserve Bank.
(3) When the taxpayer directs the financial institution to effect an electronic fund transfer message as required by [paragraph (b)(2)](/current/title-27/section-53.158#p-53.158\(b\)\(2\)) of this section, the transfer data record furnished to the taxpayer through normal banking procedures will serve as the record of payment and will be retained as part of the required records.
(d) *Failure to make a taxpayment by EFT.* The taxpayer is subject to penalties imposed by [26 U.S.C. 6651](https://www.govinfo.gov/link/uscode/26/6651) and [6656](https://www.govinfo.gov/link/uscode/26/6656), as applicable, for failure to make a payment or deposit of tax by EFT on or before the close of business on the prescribed last day for making such payment or deposit.
(e) *Procedure.* Upon the notification required under [paragraph (b)(1)](/current/title-27/section-53.158#p-53.158\(b\)\(1\)) of this section, the appropriate TTB officer will issue to the taxpayer an TTB Procedure entitled Payment of Tax by Electronic Fund Transfer. This publication outlines the procedure a taxpayer follows when preparing deposits, returns and EFT remittances in accordance with this subpart.
\[T.D. ATF-330, [57 FR 40326](https://www.federalregister.gov/citation/57-FR-40326), Sept. 3, 1992, as amended by T.D. ATF-365, [60 FR 33671](https://www.federalregister.gov/citation/60-FR-33671), June 28, 1995; T.D. ATF-447, [66 FR 19088](https://www.federalregister.gov/citation/66-FR-19088), Apr. 13, 2001]
#### § 53.159 Deposit requirement for deposits made for calendar quarters beginning on or after July 1, 1995.
(a) *Definitions* —
(1) *Definition of tax liability.* For purposes of this section, the term “tax liability” means the total tax liability for the specified period plus or minus any allowable adjustments made in accordance with the instructions applicable to the form on which the return is made.
(2) *Semimonthly period.* Except as provided in [paragraph (c)(4)(ii)](/current/title-27/section-53.159#p-53.159\(c\)\(4\)\(ii\)) of this section, the term “semimonthly period” means the first 15 days of a calendar month or the remaining portion of a calendar month following the 15th day of that month.
(b) *In general* —
(1) *Semimonthly deposits.* Except as provided in [paragraphs (b)(2)](/current/title-27/section-53.159#p-53.159\(b\)\(2\)), [(c)(2)](/current/title-27/section-53.159#p-53.159\(c\)\(2\)), and [(j)](/current/title-27/section-53.159#p-53.159\(j\)) of this section, any person required to file a quarterly excise tax return on TTB Form 5300.26 must make a deposit of tax for each semimonthly period as prescribed in [paragraph (c)](/current/title-27/section-53.159#p-53.159\(c\)) of this section.
(2) *One-time or occasional filings.* No deposit is required in the case of any taxes reportable on a one-time or occasional filing (as defined in [§ 53.151(a)(5)](/current/title-27/section-53.151#p-53.151\(a\)\(5\))).
(c) *Amount of deposit* —
(1) *In general.* Except as provided in [paragraphs (c)(2)](/current/title-27/section-53.159#p-53.159\(c\)\(2\)), [(c)(3)](/current/title-27/section-53.159#p-53.159\(c\)\(3\)) and [(c)(6)](/current/title-27/section-53.159#p-53.159\(c\)\(6\)) of this section, the deposit of tax for each semimonthly period must be equal to the amount of tax liability incurred during that semimonthly period. Except as provided in [paragraph (c)(3)](/current/title-27/section-53.159#p-53.159\(c\)\(3\)) of this section, no deposit is required for any semimonthly period in which no tax liability is incurred.
(2) *De minimis exception.* Except as provided in [paragraph (c)(3)](/current/title-27/section-53.159#p-53.159\(c\)\(3\)) of this section, any person who has a tax liability for the current calendar quarter of $2,000 or less is not required to make deposits for that quarter. However, semimonthly deposits of tax are required beginning with the semimonthly period in which unpaid tax liability exceeds $2,000 and for every semimonthly period thereafter in which tax liability is incurred. The first deposit for the current quarter shall be equal to the unpaid tax liability; thereafter, deposits shall be equal to the amount of tax liability incurred during that semimonthly period.
(3) *Amount of deposit; safe harbor rule based on look-back quarter liability* ; *In general.* Except as provided in [paragraph (c)(6)](/current/title-27/section-53.159#p-53.159\(c\)\(6\)) of this section, any person who made a return of tax on TTB Form 5300.26 reporting taxes for the second preceding calendar quarter (the “look-back quarter”), or who did not file a return for the look-back quarter because of the provisions of [§ 53.151(a)(2)](/current/title-27/section-53.151#p-53.151\(a\)\(2\)), is considered to have complied with the requirement for deposit of taxes for the current calendar quarter if—
(i) The deposit of taxes for each semimonthly period in the current calendar quarter is an amount equal to not less than 1⁄6 (16.67 percent) of the total tax liability incurred for the look-back quarter;
(ii) Each deposit is made on time; and
(iii) The amount of any underpayment of taxes for the current calendar quarter is paid by the due date of the return.
(4) *Modification for third calendar quarter.* The safe harbor rule in [paragraph (c)(3)](/current/title-27/section-53.159#p-53.159\(c\)\(3\)) of this section does not apply for the third calendar quarter unless—
(i) The deposit of taxes for the semimonthly period July 1-September 15 meets the requirements of [paragraph (c)(3)](/current/title-27/section-53.159#p-53.159\(c\)\(3\)) of this section; and
(ii) Each deposit of taxes for the periods September 16-25 and September 26-30 is not less than 1/12th (8.34 percent) of the total tax liability incurred for the look-back quarter.
(5) *Modification for tax rate increase* —
(i) *Application.* The safe harbor rule as prescribed in paragraph (c)(3) is modified for the first and second calendar quarters beginning on or after the effective date of an increase in the rate of any tax prescribed by [26 U.S.C. 4181](https://www.govinfo.gov/link/uscode/26/4181) to which this part 53 applies.
(ii) *Modification.* The amount of deposit for calendar quarters referred to in [paragraph (c)(3)](/current/title-27/section-53.159#p-53.159\(c\)\(3\)) of this section must be adjusted so that the deposit of taxes for each semimonthly period in the calendar quarter is not less than 1⁄6 (16.67 percent) of the tax liability the person would have had with respect to the tax for the look-back quarter if the increased rate of tax had been in effect for that look-back quarter.
(6) *First time filers.* Any person who did not file a return of tax on TTB Form 5300.26 for the first and second preceding calendar quarters because they were not engaged in any activity with respect to which tax is reportable on the return in the course of a trade or business, is considered to have complied with the requirement for deposit of taxes for the current calendar quarter if—
(i) The deposit of taxes for each semimonthly period in the calendar quarter is not less than 95 percent of the tax liability incurred with respect to those taxes during the semimonthly period;
(ii) Each deposit is made on time; and
(iii) The amount of any underpayment of taxes for the current calendar quarter is paid by the due date of the return.
(d) *Failure to comply with deposit requirements.*
(1) If a person fails to make deposits as required under this part, the appropriate TTB officer may withdraw the person's right to use the safe harbor rule provided by [paragraph (c)(3)](/current/title-27/section-53.159#p-53.159\(c\)\(3\)) of this section.
(2) *Cross reference.* The appropriate TTB officer may also require a taxpayer who fails to make deposits of tax to file a monthly or semimonthly return, see [§ 53.151(b)(1)](/current/title-27/section-53.151#p-53.151\(b\)\(1\)).
(e) *Time for making deposit.* Except for deposits for the period September 16-25, each deposit required to be made by this section shall be made not later than the 9th day of the semimonthly period following the close of the period for which it is made. The deposit for the period September 16-25 shall be made not later than September 28. The deposit for the period September 26-30, is due not later than October 9.
(f) *Last day for filing.*
(1) Except as provided by [paragraph (f)(2)](/current/title-27/section-53.159#p-53.159\(f\)\(2\)) of this section, if the due date of the deposit falls on a Saturday, Sunday, or legal holiday, the deposit and remittance shall be due on the next succeeding day which is not a Saturday, Sunday, or legal holiday. For purposes of this section, “legal holiday” is defined by section 7503 of the Code and [27 CFR 70.306(b)](/current/title-27/section-70.306#p-70.306\(b\)) of this chapter.
(2) If the required due date of the deposit for the period September 16-25 falls on a Saturday, the deposit and remittance shall be due on the preceding day. If such required due date falls on a Sunday, the return and remittance shall be due on the following day.
(g) *Forms and procedures.* Each remittance of amounts required to be deposited shall be accompanied by Form 5300.27, Federal Firearms and Ammunition Excise Tax Deposit form, or Form 5300.26, Federal Firearms and Ammunition Excise Tax Return, which shall be prepared in accordance with the applicable instructions. Taxpayers electing to remit deposits by EFT pursuant to [§ 53.158](/current/title-27/section-53.158) shall prepare and submit Form 5300.26 or Form 5300.27 in accordance with the instructions contained in Procedure 92-1, Publication 5000.11. The timeliness of the deposit will be determined by the date it is received by the lockbox financial institution, or the TTB officer designated on the form accompanying the deposit, or the Treasury Account, when made by EFT. In order for deposits of less than $20,000 made by U.S. Mail to be considered received timely, the date of mailing must be on or before the second day preceding the due date of the deposit as evidenced by the official postmark of the U.S. Postal Service stamped on the cover in which the deposit was mailed. When the postmark on the cover is illegible, the burden of proving when the postmark was made will be on the taxpayer. When the taxpayer sends the deposit by registered mail or by certified mail, the date of registry or the date of the postmark on the sender's receipt of certified mail, as the case may be, shall be treated as the date of delivery of the deposit. Any deposit of $20,000 or more must be received by the last day prescribed for making such deposit, regardless of when mailed. Amounts deposited pursuant to this paragraph shall be considered to be paid on the last day prescribed for filing the return in respect of the tax (determined without regard to any extension of time for filing the returns), or at the time deposited, whichever is later.
(h) *Number of remittances.* A person required by this section to make deposits shall make one deposit for a semimonthly period.
(i) *Procurement of prescribed forms.* Copies of the Federal Firearms and Ammunition Excise Tax Deposit form will be furnished, so far as possible, to persons required to make deposits under this section. Such a person will not be excused from making a deposit however, by the fact that no form has been furnished. A person not supplied with the form is required to obtain the form in ample time to make the required deposits within the time prescribed. Copies of the Federal Firearms and Ammunition Excise Tax Deposit form are available as provided in [§ 53.21(b)](/current/title-27/section-53.21#p-53.21\(b\)).
(j) *Taxpayers required to file monthly or semimonthly returns.* This section does not apply to taxes for:
(1) Any month or semimonthly period in which the taxpayer receives notice pursuant to [section 53.151(b)](/current/title-27/section-53.151#p-53.151\(b\)) to file TTB Form 5300.26; or
(2) Any subsequent month or semimonthly period for which a return on TTB Form 5300.26 is required.
(3) Taxpayers required to file monthly returns shall make semimonthly deposits of 100 percent of the liability incurred during each semimonthly period by the 9th day of the month following the last day of the semimonthly period. Taxpayers required to file semimonthly returns shall pay any tax due for the semimonthly period with each return.
(k) *Examples.*
# Example 1. One-time filing or occasional filing.
(1) *Facts.* On October 18, 1995, A, an individual who lives in the United States purchases a custom made rifle outside the United States and imports it into the United States. A uses the rifle on October 20, 1995. A is liable for the firearms excise tax imposed by sections 4181 and 4218(a). Since A does not regularly sell rifles in arm's length transactions, a constructive sale price of $20,000 is determined ([§ 53.115(b)](/current/title-27/section-53.115#p-53.115(b))). The amount of A's tax liability is $2200, 11 percent of the constructive sale price of the rifle. The liability is incurred during the fourth calendar quarter of 1995, the quarter during which the rifle is used ([§ 53.111(d)](/current/title-27/section-53.111#p-53.111\(d\))). A did not import the rifle in the course of its trade or business and does not engage in any activities with respect to which tax is reportable on TTB Form 5300.26 in the course of a trade or business.
(2) *Filing requirement.* A must file a return on Form 5300.26 ([§ 53.151(a)](/current/title-27/section-53.151#p-53.151\(a\))) for the fourth calendar quarter of 1995 reporting A's \$2200 firearms excise tax liability. The Form 5300.26 is due by January 31, 1996, the last day of the first month following the calendar quarter ([§ 53.153(a)](/current/title-27/section-53.153#p-53.153\(a\))). Because A did not import the firearm in the course of its trade or business and does not engage in any activities with respect to which tax is reportable in the course of a trade or business, the return is a one-time filing or occasional filing.
(3) *Payment requirement.* Because A's Form 5300.26 is a one-time filing, A is not required to make deposits of tax ([§ 53.159(b)(2)](/current/title-27/section-53.159#p-53.159\(b\)\(2\))). Instead, A pays the \$2200 of tax with the return.
# Example 2. Deposit requirement; based on look-back quarter liability.
(1) *Facts.* B is a manufacturer of firearms. B sells 75 pistols which have a taxable sale price of $500 each during the second calendar quarter of 1996. B sold 50 of the pistols in the first semimonthly period of May, 1996, and the other 25 pistols in the second semimonthly period of April, 1996. B did not incur tax liability in any other semimonthly period in the second quarter. The amount of B's tax liability for the second calendar quarter is $3,750, 10 percent of the taxable sale price of the pistols. B filed Form 5300.26 for the second preceding calendar quarter, the look-back quarter, on January 31, 1996 reporting tax liability in the amount of \$2,700.
(2) *Deposit requirement.* B is required to make deposits of tax for each semimonthly period in the calendar quarter because B has incurred more than $2,000 in liability for the current quarter. B may use the safe harbor rule based on look-back quarter liability to determine the amount of the required deposits ([§ 53.159(c)(3)](/current/title-27/section-53.159#p-53.159(c)(3))). Under this safe harbor rule, B's deposit for each semimonthly period must equal at least $450.00,
1⁄6 (16.67 percent) of the tax liability incurred for the look-back quarter. B's deposit must be timely and B must pay the amount of any underpayment by the due date of the return. Accordingly, B meets the deposit requirement if B makes the following deposits:
| Semimonthly period | Deposit due by | Amount of deposit |
| ------------------ | -------------- | ----------------- |
| April 1-15 | April 24, 1996 | \$450.00 |
| April 16-31 | May 9, 1996 | 450.00 |
| May 1-15 | May 24, 1996 | 450.00 |
| May 16-30 | June 10, 1996 | 450.00 |
| June 1-15 | June 24, 1996 | 450.00 |
| June 16-30 | July 9, 1996 | 450.00 |
The deposit due on June 10, 1996, would ordinarily be due on June 9, 1996. However, because June 9, 1996 is a Sunday, under section 7503, B has an additional day to make the required deposit.
(3) *Filing requirement.* B must file a return on Form 5300.26 for the second calendar quarter of 1996 reporting B's $3750 tax liability ([§ 53.151(a)](/current/title-27/section-53.151#p-53.151(a))). The form 5300.26 is due by July 31, 1996, the last day of the first month following the calendar quarter ([§ 53.153(a)](/current/title-27/section-53.153#p-53.153(a))). B must also pay $1050.00, the underpayment amount by which the total tax liability for the second calendar quarter exceeds the total tax liability for the look-back quarter, by the due date of the return.
# Example 3. Deposit amount; no liability in look-back quarter.
(1) *Facts.* C, a manufacturer of ammunition, filed returns for the first, second and third quarters of 1995 reporting C's tax liability. During the fourth quarter of 1995, C did not make any taxable sales of shells or cartridges, thereby incurring no tax liability for that return period. C did not file Form 5300.26 for the fourth calendar quarter since no tax liability was incurred ([§ 53.151(a)(2)](/current/title-27/section-53.151#p-53.151\(a\)\(2\))). C made taxable sales in the second quarter of 1996 amounting to $25,500.00, incurring a tax liability of $2805.
(2) *Deposit requirement.* Ordinarily, C would be required to make deposits of tax for each semimonthly period in the calendar quarter because C's total liability for the current calendar quarter exceeds $2,000. However, since C incurred a tax liability of $0 in the second preceding calendar quarter (the look-back quarter) ([§ 53.159(c)(3)](/current/title-27/section-53.159#p-53.159\(c\)\(3\))), under the safe harbor rule, C is not required to make deposits of tax.
(3) *Filing requirement.* C is required to file a return on Form 5300.26 reporting C's \$2805 ammunition excise tax liability. The form 5300.26 is due by July 31, 1996.
(4) *Payment requirement.* C must pay the \$2805 tax with the return.
# Example 4. Deposit requirement; First time Filer.
(1) *Facts.* D, a manufacturer of firearms, began business on 2/16/96. D sold 300 shotguns which had a taxable sales price of $210 each during the first quarter of 1996. D sold 70 shotguns in the second semimonthly period of February, 1996, 130 shotguns in the first semimonthly period of March, 1996 and 100 shotguns in the second semimonthly period of March, 1996. The amount of D's tax liability for the first quarter of 1996 is $6,930, 11 percent of the taxable sale price of the shotguns.
(2) *Deposit requirement.* D is required to make a deposit of tax when D's tax liability exceeds $2,000 ([§ 53.159(c)(2)](/current/title-27/section-53.159#p-53.159(c)(2))). Therefore, D must make a deposit of tax beginning with the first semimonthly period in March, the semimonthly period in which D's unpaid tax liability exceeded $2,000. Because D, a first time filer, does not have an established look-back quarter, D's deposit of tax must be at least 95 percent of the incurred tax liability. D is required to make deposits of at least 95 percent of incurred tax liability for every semimonthly period in the quarter thereafter. D's deposits must be timely and any underpayment of tax must be paid by the due date of the return. Accordingly, D meets the deposit requirement if D makes the following deposits:
| Semimonthly period | Deposit due by | Amount of deposit |
| ------------------ | -------------- | ----------------- |
| Feb. 16-29 | March 11, 1996 | \$0 |
| March 1-15 | March 25, 1996 | 4,389 |
| March 16-31 | April 9, 1996 | 2,194.50 |
The deposits due on March 11, 1996, and March 25, 1996, would ordinarily be due on March 9, 1996, and March 24, 1996, respectively. However, because March 9, 1996, is a Saturday, and March 24, 1996, is a Sunday, under section 7503, D has until March 11, 1996, to make the deposit due on March 9, 1996, and until March 25, 1996, to make the deposit due on March 24, 1996.
(3) *Filing requirement.* D must file a return on Form 5300.26 for the first calendar quarter of 1996 reporting D's $6,930 tax liability ([§ 53.151(a)](/current/title-27/section-53.151#p-53.151(a))). The form 5300.26 is due by April 30, 1996, the last day of the first month following the calendar quarter ([§ 53.153(a)](/current/title-27/section-53.153#p-53.153(a))). D must also pay $346.50, the amount by which the tax liability for the quarter was underpaid, by the due date of the return.
# Example 5. Deposit amount; third calendar quarter.
(1) *Facts.* E, a manufacturer of firearms, is a semimonthly depositor who makes deposits of tax using the safe harbor rule based on the look-back quarter to determine the amount of tax required to be deposited for the third calendar quarter of 1995. E incurred a tax liability amounting to $38,000 for the third quarter. E filed Form 5300.26 for the second preceding calendar quarter, the look-back quarter on May 1, 1995, reporting tax liability in the amount of $30,000.
(2) *Deposit requirement.* Because E has incurred more than $2,000 in liability and has chosen to make deposits of tax based on the look-back quarter, E is required to make deposits of tax equal to $5,000,
1⁄6 (16.67 percent) of the tax liability incurred in the look-back quarter, for each semimonthly period in the calendar quarter. However, because of the special rule which modifies the safe harbor rule for deposits of tax for the month of September ([§ 53.159(c)(4)](/current/title-27/section-53.159#p-53.159\(c\)\(4\))), E must make deposits equal to \$2500.00 each, 1/12th (8.34 percent) of the tax liability incurred in the look-back quarter for the periods September 16-25 and September 26-30. E's deposits must be timely and E must pay the amount of any underpayment by the due date of the return. Accordingly, E meets the deposit requirement if E makes the following deposits:
| Semimonthly period | Deposit due by | Amount of deposit |
| ------------------ | --------------- | ----------------- |
| July 1-15 | July 24, 1995 | \$5000.00 |
| July 16-31 | August 9, 1995 | 5000.00 |
| Aug. 1-15 | August 24, 1995 | 5000.00 |
| Aug. 16-31 | Sept. 11, 1995 | 5000.00 |
| Sept. 1-15 | Sept. 25, 1995 | 5000.00 |
| Sept. 16-25 | Sept. 28, 1995 | 2500.00 |
| Sept. 26-30 | October 9, 1995 | 2500.00 |
The deposits due on September 11, 1995, and September 25, 1995, would ordinarily be due on September 9, 1995, and September 24, 1995, respectively. However, because September 9, 1995, is a Saturday, and September 24, 1995, is a Sunday, under section 7503, D has until September 11, 1995, to make the deposit due on September 9, 1995, and until September 25, 1995, to make the deposit due on September 24, 1995.
(3) *Filing requirement.* E must file a return on Form 5300.26 for the third calendar quarter of 1995 reporting E's $38,000 tax liability ([§ 53.153(a)](/current/title-27/section-53.153#p-53.153(a))). E must also pay $8,000, the underpayment amount by which the total tax liability for the third calendar quarter exceeds the total tax liability for the look-back quarter, by the due date of the return.
\[T.D. ATF-365, [60 FR 33671](https://www.federalregister.gov/citation/60-FR-33671), June 28, 1995, as amended by T.D. ATF-447, [66 FR 19089](https://www.federalregister.gov/citation/66-FR-19089), Apr. 13, 2001; T.D. TTB-44, [71 FR 16958](https://www.federalregister.gov/citation/71-FR-16958), Apr. 4, 2006]
#### § 53.161 Authority to make credits or refunds.
For provisions relating to credits and refunds of certain taxes on sales and services see section 6416 of the Code and [§§ 53.171-53.186](/current/title-27/section-53.171). For regulations under section 6402 of the Code of general application in respect of credits or refunds, see [27 CFR 70.122](/current/title-27/section-70.122), [70.123](/current/title-27/section-70.123), and [70.124](/current/title-27/section-70.124) (Procedure and Administration).
#### § 53.162 Abatements.
For regulations under section 6404 of the Code of general application in respect of abatements of assessments to tax, see [27 CFR 70.125](/current/title-27/section-70.125) (Procedure and Administration).
#### §§ 53.163-53.170 \[Reserved]
#### § 53.171 Claims for credit or refund of overpayments of manufacturers taxes.
Any claims for credit or refund of an overpayment of a tax imposed by chapter 32 of the Code shall be made in accordance with the applicable provisions of this subpart and the applicable provisions of [27 CFR 70.123](/current/title-27/section-70.123) (Procedure and Administration). A claim on TTB Form 2635 (5620.8) is not required in the case of a claim for credit, but the amount of the credit shall be claimed by entering that amount as a credit on a return of tax under this subpart filed by the person making the claim. In this regard, see [§ 53.185](/current/title-27/section-53.185).
#### § 53.172 Credit or refund of manufacturers tax under chapter 32.
(a) *Overpayment not described in section 6416(b)(2) of the Code* —
(1) *Claims included.* This paragraph applies only to claims for credit or refund of an overpayment of manufacturers tax imposed by Chapter 32. It does not apply, however, to a claim for credit or refund on any overpayment described in [paragraph (b)](/current/title-27/section-53.172#p-53.172\(b\)) of this section which arises by reason of the application of section 6416(b)(2) of the Code.
(2) *Supporting evidence required.* No credit or refund of any overpayment to which this [paragraph (a)](/current/title-27/section-53.172#p-53.172\(a\)) applies shall be allowed unless the person who paid the tax submits with the claim a written consent of the ultimate purchaser to the allowance of the credit or refund, or submits with the claim a statement, supported by sufficient available evidence, asserting that:
(i) The person has neither included the tax in the price of the article with respect to which it was imposed nor collected the amount of the tax from a vendee, and identifying the nature of the evidence available to establish these facts, or
(ii) The person has repaid the amount of the tax to the ultimate purchaser of the article.
(3) *Ultimate purchaser* —
(i) *General rule.* The term “ultimate purchaser”, as used in [paragraph (a)(2)](/current/title-27/section-53.172#p-53.172\(a\)\(2\)) of this section, means the person who purchased the article for consumption, or for use in the manufacture of other articles and not for resale in the form in which purchased.
(ii) *Special rule under section 6416(a)(3)* —
(A) *Conditions to be met.* If tax under chapter 32 of the Code is paid in respect of an article and the appropriate TTB officer determines that the article is not subject to tax under chapter 32, the term “ultimate purchaser”, as used in [paragraph (a)(2)](/current/title-27/section-53.172#p-53.172\(a\)\(2\)) of this section, includes any wholesaler, jobber, distributor, or retailer who, on the 15th day after the date of the determination holds for sale any such article with respect to which tax has been paid, if the claim for credit or refund of the overpayment in respect of the articles held for sale by wholesaler, jobber, distributor, or retailer is filed on or before the date on which the person who paid the tax is required to file a return for the period ending with the first calendar quarter which begins more than 60 days after the date of the determination by the appropriate TTB officer.
(B) *Supporting statement.* A claim for credit or refund of an overpayment of tax in respect of an article as to which a wholesaler, jobber, distributor, or retailer is the ultimate purchaser, as provided in this [paragraph (a)(3)(ii)](/current/title-27/section-53.172#p-53.172\(a\)\(3\)\(ii\)), must be supported by a statement that the person filing the claim has a statement, by each wholesaler, jobber, distributor, or retailer whose articles are covered by the claim, showing total inventory, by model number and quantity, of all such articles purchased tax-paid and held for sale as of 12:01 a.m. of the 15th day after the date of the determination by the appropriate TTB officer that the article is not subject to tax under chapter 32 of the Code.
(C) *Inventory requirement.* The inventory shall not include any such article, title to which, or possession of which, has previously been transferred to any person for purposes of consumption unless the entire purchase price was repaid to the person or credited to the person's account and the sale was rescinded or any such article purchased by the wholesaler, jobber, distributor, or retailer as a component part of, or on or in connection with, another article. An article in transit at the first moment of the 15th day after the date of the determination is regarded as being held by the person to whom it was shipped, except that if title to the article does not pass until delivered to the person the article is deemed to be held by the shipper.
(b) *Overpayments described in section 6416(b)(2) of the Code* —
(1) *Claims included.* This paragraph applies only to claims for credit or refund of amounts paid as tax under chapter 32 of the Code that are determined to be overpayments by reason of section 6416(b)(2) of the Code (relating to tax payments in respect of certain uses, sales, or resales of a taxable article).
(2) *Supporting evidence required.* No credit or refund of an overpayment to which this [paragraph (b)](/current/title-27/section-53.172#p-53.172\(b\)) applies shall be allowed unless the person who paid the tax submits with the claim a statement, supported by sufficient available evidence, asserting that:
(i) The person neither included the tax in the price of the article with respect to which it was imposed nor collected the amount of the tax from a vendee, and identifying the nature of the evidence available to establish these facts, or
(ii) The person repaid, or agreed to repay, the amount of the tax to the ultimate vendor of the article, or
(iii) The person has secured, and will submit upon request of the appropriate TTB officer, the written consent of the ultimate vendor to the allowance of the credit or refund.
(3) *Ultimate vendor—General rule.* The term *ultimate vendor,* as used in [paragraph (b)(2)](/current/title-27/section-53.172#p-53.172\(b\)\(2\)) of this section, means the seller making the sale which gives rise to the overpayment or which last precedes the exportation or use which has given rise to the overpayment.
(c) *Overpayments not included.* This section does not apply to any overpayment determined under section 6416(b)(1) of the Code (relating to price readjustments), section 6416(b)(3)(A) of the Code (relating to certain cases in which refund or credit is allowable to the manufacturer who uses, in the further manufacture of a second article, a taxable article purchased by the manufacturer taxpaid), or section 6416(b)(5) of the Code (relating to the return to the seller of certain installment accounts which the seller had previously sold). In this regard, see [§§ 53.173](/current/title-27/section-53.173), [53.180](/current/title-27/section-53.180), and [53.183](/current/title-27/section-53.183).
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-312, [56 FR 31084](https://www.federalregister.gov/citation/56-FR-31084), July 9, 1991]
#### § 53.173 Price readjustments causing overpayments of manufacturers tax.
In the case of any payment of tax under chapter 32 of the Code that is determined to be an overpayment by reason of a price readjustment within the meaning of section 6416(b)(1) of the Code and [§ 53.174](/current/title-27/section-53.174) or [§ 53.175](/current/title-27/section-53.175), the person who paid the tax may file a claim for refund of the overpayment or may claim credit for the overpayment on any return of tax under this subpart which the person subsequently files. Price readjustments may not be anticipated. However, if the readjustment has actually been made before the return is filed for the period in which the sale was made, the tax to be reported in respect of the sale may, at the election of the taxpayer, be based either:
(a) On the price as so readjusted, or
(b) On the original sale price and a credit or refund claimed in respect of the price readjustment.
A price readjustment will be deemed to have been made at the time when the amount of the readjustment has been refunded to the vendor or the vendor has been informed that the vendor's account has been credited with the amount. No interest shall be paid on any credit or refund allowed under this section. For provisions relating to the evidence required in support of a claim for credit or refund, see [27 CFR 70.123](/current/title-27/section-70.123) (Procedure and Administration), [§ 53.172(a)(2)](/current/title-27/section-53.172#p-53.172\(a\)\(2\)) and [§ 53.176](/current/title-27/section-53.176). For provisions authorizing the taking of a credit in lieu of filing a claim for refund, see section 6416(d) of the Code and [§ 53.185](/current/title-27/section-53.185).
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-312, [56 FR 31084](https://www.federalregister.gov/citation/56-FR-31084), July 9, 1991]
#### § 53.174 Determination of price readjustments.
(a) *In general* —
(1) *Rules of usual application* —
(i) *Amount treated as overpayment.* If the tax imposed by chapter 32 of the Code has been paid and thereafter the price of the article on which the tax was based is readjusted, that part of the tax which is proportionate to the part of the price which is repaid or credited to the purchaser is considered to be an overpayment. A readjustment of price to the purchaser may occur by reason of:
(A) The return of the article,
(B) The repossession of the article,
(C) The return or repossession of the covering or container of the article, or
(D) A bona fide discount, rebate, or allowance against the price at which the article was sold.
(ii) *Requirements of price readjustment.* A price readjustment will not be deemed to have been made unless the person who paid the tax either:
(A) Repays part or all of the purchase price in cash to the vendee,
(B) Credits the vendee's account for part or all of the purchase price, or
(C) Directly or indirectly reimburses a third party for part or all of the purchase price for the direct benefit of the vendee.
In addition, to be deemed a price readjustment, the payment or credit must be contractually or economically related to the taxable sale that the payment or credit purports to adjust. Thus, commissions or bonuses paid to a manufacturer's own agents or salesperson for selling the manufacturer's taxable products are not price readjustments for purposes of this section, since those commissions or bonuses are not paid or credited either to the manufacturer's vendee or to a third party for the vendee's benefit. On the other hand, a bonus paid by the manufacturer to a dealer's salesperson for negotiating the sale of a taxable article previously sold to the dealer by the manufacturer is considered to be a readjustment of the price on the original sale of the taxable article, regardless of whether the payment to the salesperson is made directly by the manufacturer or to the salesperson through the dealer. In such a case, the payment is related to the sale of a taxable article and is made for the benefit of the dealer because it is made to the dealer's salesperson to encourage the sale of a product owned by the dealer. Similarly, payments or credits made by a manufacturer to a vendee as reimbursement of interest expense incurred by the vendee in connection with a so-called “free flooring” arrangement for the purchase of taxable articles is a price readjustment, regardless of whether the payment or credit is made directly to the vendee or to the vendee's creditor on behalf of the vendee.
(iii) *Limitation on credit or refund.* The credit or refund allowable by reason of a price readjustment in respect of the sale of a taxable article may not exceed an amount which bears the same ratio to the total tax originally due and payable on the article as the amount of the tax-included readjustment bears to the original tax-included sale price of the article.
(2) *Rules of special application* —
(i) *Constructive sale price.* If, in the case of a taxable sale, the tax imposed by chapter 32 of the Code is based on a constructive sale price determined under any paragraph of section 4216(b) of the Code and [§§ 53.94-53.97](/current/title-27/section-53.94), as determined without reference to section 4218 of the Code, then any price readjustment made with respect to the sale may be taken into account under this section only to the extent that the price readjustment reduces the actual sale price of the article below the constructive sale price.
# Examples:
(A) A manufacturer sells a taxable article at retail for $110 tax included. Under section 4216(b)(1) of the Code the constructive sale price (tax included) of the article is determined to be $93. Thereafter, the manufacturer grants an allowance of $10 to the purchaser, which reduces the actual selling price (tax included) to $100. Since the readjustment price exceeds the amount of the constructive sale price, this readjustment is not recognized as a price readjustment under this section.
(B) Subsequently, the manufacturer extends to the purchaser an additional price allowance of $10, thereby reducing the actual sale price to $90. Since the actual sale price is now $3 less than the constructive sale price of $93, the manufacturer has overpaid by the amount of tax attributable to the $3. Assuming the tax rate involved is 10 percent, and the prices involved are tax-included, the overpayment of tax would be $0.27, determined as follows:
[](https://img.federalregister.gov/EC05OC91.021/EC05OC91.021_original_size.png)
(ii) *Price determined under section 4223(b)(2) of the Code.* If a manufacturer (within the meaning of section 4223(a) of the Code) to whom an article is sold or resold free of tax in accordance with the provisions of section 4221(a)(1) of the Code for use in further manufacture diverts the article to a taxable use or sells it in a taxable sale, and pursuant to the provisions of section 4223(b)(2) of the Code computes the tax liability in respect of the use or sale on the price for which the article was sold to the manufacturer or on the price at which the article was sold by the actual manufacturer, a reduction of the price on which the tax was based does not result in an overpayment within the meaning of section 6416(b)(1) of the Code of this section. Moreover, if a manufacturer purchases an article tax free and computes the tax in respect of a subsequent sale of the article pursuant to the provisions of section 4223(b)(2) of the Code, an overpayment does not arise by reason of readjustment of the price for which the article was sold by the manufacturer except where the readjustment results from the return or repossession of the article by the manufacturer, and all of the purchase price is refunded by the manufacturer. See, however, [paragraph (b)(4)](/current/title-27/section-53.174#p-53.174\(b\)\(4\)) of this section as to repurchased articles.
(b) *Return of an article* —
(1) *Price readjustment.* If a taxable article is returned to the manufacturer who paid the tax imposed by Chapter 32 of the Code on the sale of the article, a price readjustment giving rise to an overpayment results:
(i) If the article is returned before use, and all of the purchase price is repaid to the vendee or credited to the vendee's account, or
(ii) If the article is returned under an express or implied warranty as to quality or service, and all or a part of the purchase price is repaid to the vendee or credited to the vendee's account, or
(iii) If title is still in the seller, as, for example, in the case of certain installment sales contracts, and all or a part of the purchase price is repaid to the vendee or credited to the vendee's account.
(2) *Return of purchase price.* For purposes of [paragraph (b)(1)](/current/title-27/section-53.174#p-53.174\(b\)\(1\)) of this section, if all of the purchase price of an article has been returned to the vendee, except for an amount retained by the manufacturer pursuant to contract as reimbursement of expense incurred in connection with the sale (such as a handling or restocking charge), all of the purchase price is considered to have been returned to the vendee.
(3) *Taxability of subsequent sale or use.* If, under any of the conditions described in [paragraph (b)(1)](/current/title-27/section-53.174#p-53.174\(b\)\(1\)) of this section, an article is returned to the manufacturer who paid the tax and all of the purchase price is returned to the vendee, the sale is considered to have been rescinded. Any subsequent sale or use of the article by the manufacturer will be considered to be an original sale or use of the article by the manufacturer which is subject to tax under Chapter 32 of the Code unless otherwise exempt. If under any such condition an article is returned to the manufacturer who paid the tax and only part of the purchase price is returned to the vendee, a subsequent sale of the article by the manufacturer will be subject to tax to the extent that the sale price exceeds the adjusted sale price of the first taxable sale.
(4) *Treatment of other transactions as repurchases.* Except as provided in [paragraph (b)(1)](/current/title-27/section-53.174#p-53.174\(b\)\(1\)) of this section, a price readjustment will not result when a taxable article is returned to the manufacturer who paid the tax on the sale of the article, even though all or a part of the purchase price is repaid to the vendee or credited to the vendee's account, since such a transaction will be considered to be a repurchase of the article by the manufacturer.
(c) *Repossession of an article.* If a taxable article is repossessed by the manufacturer who paid the tax imposed by chapter 32 of the Code on the sale of the article, and all or a part of the purchase price is repaid to the vendee or credited to the vendee's account, a price readjustment giving rise to an overpayment will result. However, if the manufacturer later resells the repossessed article for a price in excess of the original adjusted sale price, the manufacturer will be liable for tax under chapter 32 of the Code to the extent that the resale price exceeds the original adjusted sale price.
(d) *Return or repossession of covering or container.* If the covering or container of a taxable article is returned to, or repossessed by the manufacturer who paid the tax imposed by chapter 32 of the Code on the sale of the article, and all or a portion of the purchase price is repaid to the vendee or credited to the vendee's account by reason of the return or repossession of the covering or container, a price adjustment giving rise to an overpayment will result. If a taxable article is considered to have been repurchased, as provided in [paragraph (b)(4)](/current/title-27/section-53.174#p-53.174\(b\)\(4\)) of this section, and the covering or container accompanies the taxable article as part of the transaction, the covering or container will also be considered to have been repurchased.
(e) *Bona fide discounts, rebates, or allowances* —
(1) *In general.* Except as provided in [§ 53.175](/current/title-27/section-53.175) (relating to readjustments in respect of local advertising), the basic consideration in determining, for purposes of this section, whether a bona fide discount, rebate, or allowance has been made is whether the price actually by, or charged against, the purchaser has in fact been reduced by subsequent transactions between the parties. Generally, the price will be considered to have been readjusted by reason of a bona fide discount, rebate, or allowance, only if the manufacturer who made the taxable sale repays a part of the purchase price in cash to the vendee, or credits the vendee's account, or directly or indirectly reimburses a third party for part or all of the purchase price for the direct benefit of the vendee, in consideration of factors which, if taken into account at the time of the original transaction, would have resulted at that time in a lower sale price. For example, a price readjustment will be considered to have been made when a bona fide discount, rebate, or allowance is given in consideration of such factors as prompt payment, quantity buying over a specified period, the vendee's inventory of an article when new models are introduced, or a general price reduction affecting articles held in stock by the vendee as of a certain date. On the other hand, repayments made to the vendee do not effectuate price readjustments if given in consideration of circumstances under which the vendee has incurred, or is required to incur, an expense which, if treated as a separate item in the original transaction, would have been incudable in the price of the article for purposes of computing the tax.
*Examples.* The provisions of [paragraph (e)(1)](/current/title-27/section-53.174#p-53.174\(e\)\(1\)) of this section may be illustrated by the following examples:
*Example (1).* B, a manufacturer of shotguns, bills its distributors in a specified amount per shotgun purchased by them. Thereafter, B issues to each distributor a credit memorandum in the amount of X dollars for each demonstration by the distributor of the shotguns at a sporting goods exhibition. The credit which B allows the distributor for demonstration of B's product does not effect a readjustment of price.
*Example (2).* C, a manufacturer of firearms, bills its dealers in a specified amount per firearm purchased by them. Thereafter, C remits to the dealer X dollars of the original sale price for each firearm sold by the dealer. An additional amount of Y dollars is paid to the dealer upon a showing by the dealer that the dealer has paid Y dollars to the salesperson who made the sale. In this case, the X dollars paid to the dealer by C constitutes a bona fide discount, rebate, or allowance since payment of such amount is in the nature of a price reduction. In addition, the Y dollars paid to the dealer in reimbursement for the amount paid by the dealer to the salesperson who made the sale, also constitutes a bona fide discount, rebate, or allowance.
(2) *Inability to collect price.* A charge-off of an amount outstanding in an open account, due to inability to collect, is not a bona fide discount, rebate, or allowance and does not, in and of itself, give rise to a price readjustment within the meaning of this section.
(3) *Loss or damage in transit.* If title to an article has passed to the vendee, the subsequent loss, damage, or destruction of the article while in the possession of a carrier for delivery to the vendee does not, in and of itself, affect the price at which the article was sold. However, if the article was sold under a contract providing that, if the article was lost, damaged, or destroyed in transit, title would revert to the vendor and the vendor would reimburse the vendee in full for the sale price, then the original sale is considered to have been rescinded. The vendor is entitled to credit or refund of the tax paid upon reimbursement of the full tax-included sale price to the vendee.
#### § 53.175 Readjustment for local advertising charges.
(a) *In general.* If a manufacturer has paid the tax imposed by chapter 32 of the Code on the price of any article sold by the manufacturer and thereafter has repaid a portion of the price to the purchaser or any subsequent vendee in reimbursement of expenses for local advertising of the article or any other article sold by the manufacturer which is taxable at the same rate under the same section of chapter 32 of the Code, the reimbursement will be considered a price readjustment constituting an overpayment which the manufacturer may claim as a credit or refund. The amount of the reimbursement may not, however, exceed the limitation provided by section 4216(e)(2) of the Code and [§ 53.101](/current/title-27/section-53.101), determined as of the close of the calendar quarter in which the reimbursement is made or as of the close of any subsequent calendar quarter of the same calendar year in which it is made. The term “local advertising,” as used in this section, has the same meaning as prescribed by section 4216(e)(4) of the Code and includes generally, advertising which is broadcast over a radio station or television station, or appears in a newspaper or magazine, or is displayed by means of an outdoor advertising sign or poster.
(b) *Local advertising charges excluded from taxable price in one year but repaid in following year* —
(1) *Determination of price readjustments for year in which charge is repaid.* If the tax imposed by chapter 32 of the Code was paid with respect to local advertising charges that were excluded in computing the taxable price of an article sold in any calendar year but are not repaid to the manufacturer's purchaser or any subsequent vendee before May 1 of the following calendar year, the subsequent repayment of those charges by the manufacturer in reimbursement of expenses for local advertising will be considered a price readjustment constituting an overpayment which the manufacturer may claim as a credit or refund. The amount of the reimbursement may not, however, exceed the limitation provided by section 4216(e)(2) of the Code and [§ 53.101](/current/title-27/section-53.101), determined as of the close of the calendar quarter in which the reimbursement is made or as of the close of any subsequent calendar quarter of the same calendar year in which it is made.
(2) *Redetermination of price readjustments for year in which charge was made.* If the tax imposed by chapter 32 of the Code was paid with respect to local advertising charges that were excluded in computing the taxable price of an article sold in any calendar year but are not repaid to the manufacturer's purchaser or any subsequent vendor before May 1 of the following calendar year, the manufacturer may make a redetermination, in respect of the calendar year in which the charge was made, of the price readjustments constituting an overpayment which the manufacturer may claim as a credit or refund. This redetermination may be made by excluding the local advertising charges made in the calendar year that became taxable as of May 1 of the following calendar year.
#### § 53.176 Supporting evidence required in case of price readjustments.
No credit or refund of an overpayment arising by reason of a price readjustment described in [§ 53.174](/current/title-27/section-53.174) or [§ 53.175](/current/title-27/section-53.175) shall be allowed unless the manufacturer who paid the tax submits a statement, supported by sufficient available evidence:
(a) Describing the circumstances which gave rise to the price readjustment,
(b) Identifying the article in respect of which the price readjustment was allowed,
(c) Showing the price at which the article was sold, the amount of tax paid in respect of the article, and the date on which the tax was paid,
(d) Giving the name and address of the purchaser to whom the article was sold, and
(e) Showing the amount repaid to the purchaser or credited to the purchaser's account.
#### § 53.177 Certain exportations, uses, sales, or resales causing overpayments of tax.
In the case of any payment of tax under chapter 32 of the Code that is determined to be an overpayment by reason of certain exportations, uses, sales, or resales described in section 6416(b)(2) of the Code and [§ 53.178](/current/title-27/section-53.178), the person who paid the tax may file a claim for refund of the overpayment or, in the case of overpayments under chapter 32 of the Code, may claim credit for the overpayment on any return of tax under this subpart which the person subsequently files. However, under the circumstances described in section 6416(c) of the Code and [§ 53.184](/current/title-27/section-53.184), the overpayments under chapter 32 may be refunded to an exporter or shipper. No interest shall be paid on any credit or refund allowed under this section. For provisions relating to the evidence required in support of a claim for credit or refund under this section, see [27 CFR 70.123](/current/title-27/section-70.123) (Procedure and Administration) and 53.179. For provisions authorizing the taking of a credit in lieu of filing a claim for refund, see section 6416(d) of the Code and [§ 53.185](/current/title-27/section-53.185).
#### § 53.178 Exportations, uses, sales, and resales included.
(a) *In general.* The payment of tax imposed by chapter 32 of the Code on the sale of any article, will be considered to be an overpayment by reason of any exportation, use, sale, or resale described in any one of paragraphs (b) to (e), inclusive, of this section. This section applies only in those cases where the exportation, use, sale, or resale (or any combination thereof) referred to in any one or more of these paragraphs occurs before any other use. If any article is sold or resold for a use described in any one of these paragraphs and is not in fact so used, the paragraph is treated in all respects as inapplicable.
(b) *Exportation of tax-paid articles.* A payment of tax under chapter 32 of the Code on the sale of any article will be considered to be an overpayment under section 6416(b)(2)(A) of the Code if the article is by any person exported to a foreign country or shipped to a possession of the United States. It is immaterial for purposes of this paragraph, whether the person who made the taxable sale had knowledge at the time of the sale that the article was being purchased for export to a foreign country or shipment to a possession of the United States. See [§ 53.184](/current/title-27/section-53.184) for the circumstances under which a claim for refund by reason of the exportation of an article may be claimed by the exporter or shipper, rather than by the person who paid the tax. For definition of the term “possession of the United States”, see [§ 53.11](/current/title-27/section-53.11).
(c) *Supplies for vessels or aircraft.* A payment of tax under chapter 32 of the Code on the sale of any article, will be considered to be an overpayment under section 6416(b)(2)(B) of the Code if the article is used by any person, or is sold by any person for use by the purchaser, as supplies for vessels or aircraft. The term “supplies for vessels or aircraft”, as used in this paragraph, has the same meaning as when used in sections 4221(a)(3), 4221(d)(3), and 4221(e)(1) of the Code, and the regulations thereunder ([§ 53.134(b)(1)](/current/title-27/section-53.134#p-53.134\(b\)\(1\))).
(d) *Use by State or local government.* A payment of tax under chapter 32 of the Code on the sale of any article will be considered to be an overpayment under section 6416(b)(2)(C) of the Code if the article is sold by any person to a State, any political subdivision thereof, or the District of Columbia for the exclusive use of a State, any political subdivision thereof, or the District of Columbia. For provisions relating to tax-free sales to a State, any political subdivision thereof, or the District of Columbia, see section 4221(a)(4) of the Code and [§ 53.131](/current/title-27/section-53.131).
(e) *Use by nonprofit educational organization.* A payment of tax under chapter 32 of the Code on the sale of any article will be considered to be an overpayment under section 6416(b)(2)(D) of the Code if the article is sold by any person to a nonprofit educational organization for its exclusive use. The term “nonprofit educational organization”, as used in this [paragraph (e)](/current/title-27/section-53.178#p-53.178\(e\)), has the same meaning as when used in section 4221 (a)(5) or (d)(5) of the Code, whichever applies, and the regulations under [§ 53.136](/current/title-27/section-53.136).
#### § 53.179 Supporting evidence required in case of manufacturers tax involving exportations, uses, sales, or resales.
(a) *Evidence to be submitted by claimant.* No claim for credit or refund of an overpayment, within the meaning of section 6416(b)(2) of the Code and [§ 53.178](/current/title-27/section-53.178), of tax under chapter 32 of the Code shall be allowed unless the person who paid the tax submits with the claim the evidence required by [§ 53.172(b)(2)](/current/title-27/section-53.172#p-53.172\(b\)\(2\)) and a statement, supported by sufficient available evidence:
(1) Showing the amount claimed in respect of each category of exportations, uses, sales, or resales on which the claim is based and which give rise to a right of credit or refund under section 6416(b)(2) of the Code and [§ 53.177](/current/title-27/section-53.177),
(2) Identifying the article, both as to nature and quantity, in respect of which credit or refund is claimed,
(3) Showing the amount of tax paid in respect of the article or articles and the dates of payment, and
(4) Indicating that the person claiming a credit or refund possesses evidence (as set forth in [paragraph (b)(1)](/current/title-27/section-53.179#p-53.179\(b\)\(1\)) of this section) that the article has been exported, or has been used, sold, or resold in a manner or for a purpose which gives rise to an overpayment within the meaning of section 6416(b)(2) of the Code and [§ 53.178](/current/title-27/section-53.178).
(b) *Evidence required to be in possession of claimant* —
(1) *Evidence required under paragraph (a)(4)* —
(i) *In general.* The evidence required to be retained by the person who paid the tax, as provided in [paragraph (a)(4)](/current/title-27/section-53.179#p-53.179\(a\)\(4\)) of this section, must, in the case of an article exported, consist of proof of exportation in the form prescribed in [§ 53.133](/current/title-27/section-53.133) or must, in the case of other articles sold tax-paid by that person, consist of a certificate, executed and signed by the ultimate purchaser of the article, in the form prescribed in [paragraph (b)(1)(ii)](/current/title-27/section-53.179#p-53.179\(b\)\(1\)\(ii\)) of this section. However, if the article to which the claim relates has passed through a chain of sales from the person who paid the tax to the ultimate purchaser, the evidence required to be retained by the person who paid the tax may consist of a certificate, executed and signed by the ultimate vendor of the article, in the form provided in [paragraph (b)(1)(iii)](/current/title-27/section-53.179#p-53.179\(b\)\(1\)\(iii\)) of this section, rather than the proof of exportation itself or the certificate of the ultimate purchaser.
(ii) *Certificate of ultimate purchaser.*
(A) The certificate executed and signed by the ultimate purchaser of the article to which the claim relates must identify the article, both as to nature and quantity; show the address of the ultimate purchaser of the article, and the name and address of the ultimate vendor of the article; and describe the use actually made of the article in sufficient detail to establish that credit or refund is due, except that the use to be made of the article must be described in lieu of actual use if the claim is made by reason of the sale or resale of an article for a specified use which gives rise to the overpayment.
(B) If the certificate sets forth the use to be made of any article, rather than its actual use, it must show that the ultimate purchaser has agreed to notify the claimant if the article is not in fact used as specified in the certificate.
(C) The certificate must also contain a statement that the ultimate purchaser understands that the ultimate purchaser and any other party may, for fraudulent use of the certificate, be subject to all applicable criminal penalties under the Internal Revenue Code.
(D) A purchase order will be acceptable in lieu of a separate certificate of the ultimate purchaser if it contains all the information required by this paragraph.
(iii) *Certificate of ultimate vendor.* Any certificate executed and signed by an ultimate vendor as evidence to be retained by the person who paid the tax as provided in [paragraph (a)(4)](/current/title-27/section-53.179#p-53.179\(a\)\(4\)) of this section may be executed with respect to any one or more overpayments by the person which arose under section 6416(b)(2) and [§ 53.178](/current/title-27/section-53.178) by reason of exportations, uses, sales or resales, occurring within any period of not more than 12 consecutive calendar quarters, the beginning and ending dates of which are specified in the certificate. A certificate supporting a claim for credit or refund under this section shall contain the following:
(A) Name of ultimate vendor if other than person executing the certificate.
(B) Statement that article(s) was purchased by the ultimate vendor tax-paid and was thereafter exported, used, sold, or resold.
(C) Description of proof which supports exportation or certificate as to use executed by ultimate purchaser.
(D) Statement that ultimate vendor retains such proof for 3 years from the date of the statement and will, upon request, supply such proof at any time within such 3 year period to the taxpayer to establish that credit or refund is due in respect of the article.
(E) Statement that to the best knowledge and belief of the person executing the certificate, no statement in respect of the proof of exportation or certificate has previously been executed and that the person executing the certificate understands that any fraudulent use of the certificate may subject the person executing the certificate or any other party to all applicable criminal penalties under the Code.
(F) Name, title, address and signature of person executing certificate and date signed.
(G) Description of all articles covered by the certificate, with the corresponding vendor's invoice number, date of resale of article, quantity, whether articles were exported or used and the use made of article or to be made of article.
(iv) *TTB F 5600.33.* TTB F 5600.33, Statement of Ultimate Vendor, which is available as provided in [§ 53.21(b)](/current/title-27/section-53.21#p-53.21\(b\)), when completed, contains all necessary information for a properly executed certificate. Additional copies may be reproduced as needed.
(2) *Repayment or consent of ultimate vendor.* If the person claiming credit or refund or an overpayment to which this section applies has repaid, or agreed to repay, the amount of the overpayment to the ultimate vendor or if the ultimate vendor consents to the allowance of the credit or refund, a statement to that effect, signed by the ultimate vendor, must be shown on, or made a part of, the supporting evidence required under this section to be retained by the person claiming the credit or refund. In this regard, see [§ 53.172(b)(2)](/current/title-27/section-53.172#p-53.172\(b\)\(2\)).
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-380, [61 FR 37007](https://www.federalregister.gov/citation/61-FR-37007), July 16, 1996; T.D. TTB-44, [71 FR 16958](https://www.federalregister.gov/citation/71-FR-16958), Apr. 4, 2006; T.D. TTB-196, [89 FR 87950](https://www.federalregister.gov/citation/89-FR-87950), Nov. 6, 2024]
#### § 53.180 Tax-paid articles used for further manufacture and causing overpayments of tax.
In the case of any payment of tax under chapter 32 of the Code that is determined to be an overpayment under section 6416(b)(3) of the Code and [§ 53.181](/current/title-27/section-53.181) by reason of the sale of an article, directly or indirectly, by the manufacturer of the article to a subsequent manufacturer who uses the article in further manufacture of a second article or who sells the article with, or as a part of, the second article manufactured or produced by the subsequent manufacturer, the subsequent manufacturer may file claim for refund of the overpayment or may claim credit for the overpayment on any return of tax under this subpart subsequently filed. No interest shall be paid on any credit or refund allowed under this section. For provisions relating to the evidence required in support of a claim for credit or refund, see [27 CFR § 70.123](/current/title-27/section-70.123) (Procedure and Administration), 53.172 and 53.182. For provisions authorizing the taking of a credit in lieu of filing a claim for refund, see section 6416(d) of the Code and [§ 53.185](/current/title-27/section-53.185).
#### § 53.181 Further manufacture included.
(a) *In general.* The payment of tax imposed by chapter 32 of the Code on the sale of any article by a manufacturer of the article will be considered to be an overpayment by reason of any use in further manufacture, or sale as part of a second manufactured article, described in [paragraph (b)](/current/title-27/section-53.181#p-53.181\(b\)) of this section. This section applies in those cases where the exportation, use, or sale (or any combination of those activities) referred to in this paragraph occurs before any other use.
(b) *Use of tax-paid articles in further manufacture described in section 6416(b)(3)(A) of the Code.* A payment of tax under chapter 32 of the Code on the sale of any article, directly or indirectly, by the manufacturer of the article to a subsequent manufacturer will be considered to be an overpayment under section 6416(b)(3)(A) of the Code if the article is used by the subsequent manufacturer as material in the manufacture or production of, or as a component part of, a second article manufactured or produced by the subsequent manufacturer which is taxable under chapter 32 of the Code. For this purpose it is immaterial whether the second article is sold or otherwise disposed of, or if sold, whether the sale is a taxable sale. Any article to which this paragraph applies which would have been used in the manufacture or production of a second article, except for the fact that it was broken or rendered useless in the process of manufacturing or producing the second article, will be considered to have been used as a component part of the second article.
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-312, [56 FR 31084](https://www.federalregister.gov/citation/56-FR-31084), July 9, 1991]
#### § 53.182 Supporting evidence required in case of tax-paid articles used for further manufacture.
(a) *Evidence to be submitted by claimant.* No claim for credit or refund of an overpayment, within the meaning of section 6416(b)(3) of the Code and [§ 53.181](/current/title-27/section-53.181) shall be allowed unless the subsequent manufacturer submits with the claim the evidence required by [§ 53.132](/current/title-27/section-53.132) and a statement, supported by sufficient available evidence:
(1) Showing the amount claimed in respect of each category of exportations, uses, or sales on which the claim is based and which give rise to a right of credit or refund under section 6416(b)(3) of the Code and [§ 53.180](/current/title-27/section-53.180),
(2) Showing the name and address of the manufacturer, producer, or importer of the article in respect of which credit or refund is claimed,
(3) Identifying the article, both as to nature and quantity, in respect of which credit or refund is claimed,
(4) Showing the amount of tax paid in respect of the article by the manufacturer or producer of the article and the date of payment.
(5) Indicating that the article was used by the claimant as material in the manufacture or production of, or as a component part of, a second article manufactured or produced by the manufacturer or was sold on or in connection with, or with the sale of, a second article manufactured or produced by the manufacturer, and
(6) Identifying the second article, both as to nature and quantity.
(b) *Evidence required to be in possession of claimant* —
(1) *Certificate of ultimate purchaser of second article.* The certificate executed and signed by the ultimate purchaser of the second article must contain the same information as that required in [§ 53.179(b)(1)(ii)](/current/title-27/section-53.179#p-53.179\(b\)\(1\)\(ii\)), except that the information must be furnished in respect of the second article, rather than the article to which the claim relates.
(2) *Certificate of ultimate vendor of second article.* Any certificate executed and signed by an ultimate vendor as evidence to be retained by the person claiming credit or refund must be executed in the same form and manner as that provided in [§ 53.179(b)(2)(iii)](/current/title-27/section-53.179#p-53.179\(b\)\(2\)\(iii\)).
(3) *Repayment or consent of ultimate vendor.* If the person claiming credit or refund of an overpayment to which this section applies has repaid, or agreed to repay, the amount of the overpayment to the ultimate vendor or if the ultimate vendor consents to the allowance of the credit or refund, a statement to that effect, signed by the ultimate vendor, must be shown on, or made a part of, the evidence required to be retained by the person claiming the credit or refund. In this regard, see [§ 53.172(b)(2)](/current/title-27/section-53.172#p-53.172\(b\)\(2\)).
\[T.D. ATF-308, [56 FR 303](https://www.federalregister.gov/citation/56-FR-303), Jan. 3, 1991, as amended by T.D. ATF-312, [56 FR 31085](https://www.federalregister.gov/citation/56-FR-31085), July 9, 1991]
#### § 53.183 Return of installment accounts causing overpayments of tax.
(a) *In general.* In the case of any payment of tax under section 4216(d)(1) of the Code in respect of the sale of any installment account that is determined to be an overpayment under section 6416(b)(5) of the Code and [paragraph (b)](/current/title-27/section-53.183#p-53.183\(b\)) of this section upon return of the installment account, the person who paid the tax may file a claim for refund of the overpayment or may claim credit for the overpayment on any return of tax under this subpart which that person subsequently files. No interest shall be paid on any credit or refund allowed under this section. For provisions relating to the evidence required in support of a claim for credit or refund under this section, see [27 CFR 70.123](/current/title-27/section-70.123) (Procedure and Administration) and [paragraph (c)](/current/title-27/section-53.183#p-53.183\(c\)) of this section. For provisions authorizing the taking of a credit in lieu of filing a claim for refund, see section 6416(d) of the Code and [§ 53.185](/current/title-27/section-53.185).
(b) *Overpayment of tax allocable to repaid consideration.* The payment of tax imposed by section 4216(d)(1) of the Code on the sale of an installment account by the manufacturer will be considered to be an overpayment under section 6416(b)(5) of the Code to the extent of the tax allocable to any consideration repaid or credited to the purchaser of the installment account upon the return of the account to the manufacturer pursuant to the agreement under which the account originally was sold, if the readjustment of the consideration occurs pursuant to the provisions of the agreement. The tax allocable to the repaid or credited consideration is the amount which bears the same ratio to the total tax paid under section 4216(d)(1) of the Code with respect to the installment account as the amount of consideration repaid or credited to the purchaser bears to the total consideration for which the account was sold. This [paragraph (b)](/current/title-27/section-53.183#p-53.183\(b\)) does not apply where an installment account is originally sold pursuant to the order of, or subject to the approval of, a court of competent jurisdiction in a bankruptcy or insolvency proceeding.
(c) *Evidence to be submitted by claimant.* No claim for credit or refund of an overpayment, within the meaning of section 6416(b)(5) of the Code and [paragraph (b)](/current/title-27/section-53.183#p-53.183\(b\)) of this section, of tax under section 4216(d)(1) of the Code shall be allowed unless the person who paid the tax submits with the claim a statement, supported by sufficient available evidence, indicating:
(1) The name and address of the person to whom the installment account was sold,
(2) The amount of tax due under section 4216(d)(1) of the Code by reason of the sale of the installment account, the amount of the tax paid under section 4216(d)(1) with respect to the sale, and the date of payment,
(3) The amount for which the installment account was sold,
(4) The amount which was repaid or credited to the purchaser of the account by reason of the return of the account to the person claiming the credit or refund, and
(5)
(i) The fact that the amount repaid or credited to the purchaser of the account was so repaid or credited pursuant to the agreement under which the account was sold, and
(ii) The fact that the account was returned to the manufacturer pursuant to that agreement.
#### § 53.184 Refund to exporter or shipper.
(a) *In general.* Any payment of tax imposed by chapter 32 of the Code that is determined to be an overpayment within the meaning of section 6416(b)(2)(A) of the Code and [§§ 53.178](/current/title-27/section-53.178) and [53.179](/current/title-27/section-53.179), by reason of the exportation of any article may be refunded to the exporter or shipper of the article pursuant to section 6416(c) of the Code, if:
(1) The exporter or shipper files a claim for refund of the overpayment, and
(2) The person who paid the tax waives the right to claim credit or refund of the tax.
No interest shall be paid on any refund allowed under this section. For provisions relating to the evidence required in support of a claim under this paragraph, see [27 CFR 70.123](/current/title-27/section-70.123) (Procedure and Administration) and [paragraph (b)](/current/title-27/section-53.184#p-53.184\(b\)) of this section.
(b) *Supporting evidence required.* No claim for refund of any overpayment of tax to which this section applies shall be allowed unless the exporter or shipper submits with that claim proof of exportation in the form prescribed by [§ 53.133](/current/title-27/section-53.133), and a statement, signed by the person who paid the tax, showing:
(1) That the person who paid the tax waives the right to claim credit or refund of the tax, and
(2) The amount of tax paid on the sale of the article and the date of payment.
#### § 53.185 Credit on returns.
Any person entitled to claim refund of any overpayment of tax imposed by chapter 32 of the Code may, in lieu of claiming refund of the overpayment, claim credit for the overpayment on any return of tax under this subpart subsequently filed. Any such credit claimed on a return must be supported by the evidence prescribed in the applicable regulations in this subpart and [27 CFR 70.123](/current/title-27/section-70.123) (Procedure and Administration).
#### § 53.186 Accounting procedures for like articles.
(a) *Identification of manufacturer.* In applying section 6416 of the Code and the regulations thereunder, a person who has purchased like articles from various manufacturers may determine the particular manufacturer from whom that person purchased any one of those articles by a first-in, first-out (FIFO) method, by a last-in, first-out (LIFO) method, or by any other consistent method approved by the appropriate TTB officer. For the first year for which a person makes a determination under this section, the person may adopt any one of the following methods without securing prior approval by the appropriate TTB officer.
(1) FIFO method.
(2) LIFO method.
(3) Any method by which the actual manufacturer of the article is in fact identified.
(4) Any other method of determining the manufacturer of a particular article must be approved by the appropriate TTB officer before its adoption. After any method for identifying the manufacturer has been properly adopted, it may not be changed without first securing the consent of the appropriate TTB officer.
(b) *Determining amount of tax paid.* In applying section 6416 and [§§ 53.171-53.186](/current/title-27/section-53.171), if the identity of the manufacturer of any article has been determined by a person pursuant to a method prescribed in [paragraph (a)](/current/title-27/section-53.186#p-53.186\(a\)) of this section, that manufacturer of the article must determine the tax paid under Chapter 32 of the Code with respect to that article consistently with the method used in identifying the manufacturer.
#### § 53.187 OMB control numbers.
(a) *Purpose.* This section collects and displays the control numbers assigned to collections of information in this part by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1980. TTB intends that this section comply with the requirements of [§§ 1320.12](/current/title-27/section-1320.12), [1320.13](/current/title-27/section-1320.13), and [1320.14](/current/title-27/section-1320.14) of [5 CFR part 1320](/current/title-5/part-1320) (OMB regulations implementing the Paperwork Reduction Act), for the display of control numbers assigned by OMB to collections of information in the regulations in this part.
(b) *Display.*
| [27 CFR part 53](/current/title-27/part-53) section number | OMB control number(s) |
| ---------------------------------------------------------- | --------------------- |
| § 53.1 | 1545-0723 |
| § 53.3 | 1545-0685 |
| § 53.11 | 1545-0723 |
| § 53.92 | 1545-0023 |
| § 53.93 | 1545-0023 |
| § 53.99 | 1545-0023 |
| § 53.131 | 1545-0023 |
| § 53.132 | 1545-0023 |
| § 53.133 | 1545-0023 |
| § 53.134 | 1545-0023 |
| § 53.136 | 1545-0023 |
| § 53.140 | 1545-0023 |
| § 53.141 | 1545-0023 |
| § 53.142 | 1545-0023 |
| § 53.143 | 1545-0023 |
| § 53.151 | 1545-0023, 1545-0723 |
| § 53.152 | 1545-0723 |
| § 53.153 | 1545-0257, 1545-0723 |
| § 53.155 | 1545-0723 |
| § 53.157 | 1545-0257 |
| § 53.171 | 1545-0023, 1545-0723 |
| § 53.172 | 1545-0723 |
| § 53.173 | 1545-0723 |
| § 53.174 | 1545-0723 |
| § 53.175 | 1545-0723 |
| § 53.176 | 1545-0723 |
| § 53.177 | 1545-0723 |
| § 53.178 | 1545-0723 |
| § 53.179 | 1545-0723 |
| § 53.180 | 1545-0723 |
| § 53.181 | 1545-0723 |
| § 53.182 | 1545-0723 |
| § 53.183 | 1545-0723 |
| § 53.184 | 1545-0023, 1545-0723 |
| § 53.185 | 1545-0023, 1545-0723 |
| § 53.186 | 1545-0723 |
# Part 6 — TIED-HOUSE”
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-6
Full text of 27 CFR Part 6 — TIED-HOUSE”. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 6—“TIED-HOUSE”
#### Authority:
[15 U.S.C. 49-50](https://www.govinfo.gov/link/uscode/15/49); [27 U.S.C. 202](https://www.govinfo.gov/link/uscode/27/202) and [205](https://www.govinfo.gov/link/uscode/27/205); [44 U.S.C. 3504(h)](https://www.govinfo.gov/link/uscode/44/3504).
#### Source:
T.D. ATF-74, [45 FR 63251](https://www.federalregister.gov/citation/45-FR-63251), Sept. 23, 1980, unless otherwise noted.
## Subpart A—Scope of Regulations
#### § 6.1 General.
The regulations in this part, issued pursuant to section 105 of the Federal Alcohol Administration Act ([27 U.S.C. 205](https://www.govinfo.gov/link/uscode/27/205)), specify practices that are means to induce under section 105(b) of the Act, criteria for determining whether a practice is a violation of section 105(b) of the Act, and exceptions to section 105(b) of the Act. This part does not attempt to enumerate all of the practices that may result in a violation of section 105(b) of the Act. Nothing in this part shall operate to exempt any person from the requirements of any State law or regulation.
\[T.D. ATF-364, [60 FR 20421](https://www.federalregister.gov/citation/60-FR-20421), Apr. 26, 1995]
#### § 6.2 Territorial extent.
This part applies to the several States of the United States, the District of Columbia, and Puerto Rico.
#### § 6.3 Application.
(a) *General.* This part applies only to transactions between industry members and retailers. It does not apply to transactions between two industry members (for example, between a producer and a wholesaler), or to transactions between an industry member and a retailer wholly owned by that industry member.
(b) *Transaction involving State agencies.* The regulations in this part apply only to transactions between industry members and State agencies operating as retailers as defined in this part. The regulations do not apply to State agencies with regard to their wholesale dealings with retailers.
#### § 6.4 Jurisdictional limits.
(a) *General.* The regulations in this part apply where:
(1) The industry member induces a retailer to purchase distilled spirits, wine, or malt beverages from such industry member to the exclusion in whole or in part of products sold or offered for sale by other persons in interstate or foreign commerce; and
(2) If:
(i) The inducement is made in the course of interstate or foreign commerce; or
(ii) The industry member engages in the practice of using an inducement to such an extent as substantially to restrain or prevent transactions in interstate or foreign commerce in any such products; or
(iii) The direct effect of the inducement is to prevent, deter, hinder or restrict other persons from selling or offering for sale any such products to such retailer in interstate or foreign commerce.
(b) *Malt beverages.* In the case of malt beverages, this part applies to transactions between a retailer in any State and a brewer, importer, or wholesaler of malt beverages inside or outside such State only to the extent that the law of such State imposes requirements similar to the requirements of section 105(b) of the Federal Alcohol Administration Act ([27 U.S.C. 205(b)](https://www.govinfo.gov/link/uscode/27/205)), with respect to similar transactions between a retailer in such State and a brewer, importer, or wholesaler or malt beverage in such State, as the case may be.
\[T.D. ATF-74, [45 FR 63251](https://www.federalregister.gov/citation/45-FR-63251), Sept. 23, 1980, as amended by T.D. ATF-364, [60 FR 20421](https://www.federalregister.gov/citation/60-FR-20421), Apr. 26, 1995]
#### § 6.5 Delegations of the Administrator.
Most of the regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.6, Delegation of the Administrator's Authorities in [27 CFR Part 6](/current/title-27/part-6), *Tied-House.* You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-44, [71 FR 16922](https://www.federalregister.gov/citation/71-FR-16922), Apr. 4, 2006, as amended by T.D. TTB-196 , [89 FR 87935](https://www.federalregister.gov/citation/89-FR-87935), Nov. 6, 2024]
#### § 6.6 Administrative provisions.
(a) *General.* The Act makes applicable the provisions including penalties of sections 49 and 50 of Title 15, United States Code, to the jurisdiction, powers and duties of the Administrator under this Act, and to any person (whether or not a corporation) subject to the provisions of law administered by the Administrator under this Act. The Act also provides that the Administrator is authorized to require, in such manner and such form as he or she shall prescribe, such reports as are necessary to carry out the powers and duties under this chapter.
(b) *Examination and subpoena.* Any appropriate TTB officer shall at all reasonable times have access to, for the purpose of examination, and the right to copy any documentary evidence of any person, partnership, or corporation being investigated or proceeded against. An appropriate TTB officer shall also have the power to require by subpoena the attendance and testimony of witnesses and the production of all such documentary evidence relating to any matter under investigation, upon a satisfactory showing the requested evidence may reasonably be expected to yield information relevant to any matter being investigated under the Act.
(c) *Reports required by the appropriate TTB officer* —
(1) *General.* The appropriate TTB officer may, as part of a trade practice investigation of an industry member, require such industry member to submit a written report containing information on sponsorships, advertisements, promotions, and other activities pertaining to its business subject to the Act conducted by, or on behalf of, or benefiting the industry member.
(2) *Preparation.* The report will be prepared by the industry member in letter form, executed under the penalties of perjury, and will contain the information specified by the appropriate TTB officer. The period covered by the report will not exceed three years.
(3) *Filing.* The report will be filed in accordance with the instructions of the appropriate TTB officer.
(Approved by the Office of Management and Budget under control number 1512-0392)
\[T.D. ATF-364, [60 FR 20421](https://www.federalregister.gov/citation/60-FR-20421), Apr. 26, 1995. Redesignated and amended by T.D. ATF-428, [65 FR 52019](https://www.federalregister.gov/citation/65-FR-52019), Aug. 28, 2000]
## Subpart B—Definitions
#### § 6.11 Meaning of terms.
As used in this part, unless the context otherwise requires, terms have the meanings given in this section. Any other term defined in the Federal Alcohol Administration Act and used in this part shall have the meaning assigned to it by that Act.
*Act.* The Federal Alcohol Administration Act.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.6, Delegation of the Administrator's Authorities in [27 CFR Part 6](/current/title-27/part-6), *Tied-House.*
*Brand.* For purposes of administering this part, the term “brand” refers to differences in the brand name of a product or in the nature of a product. Examples of different brands are products having a different brand name or class, type, or kind designation; appellation of origin (wine); vintage date (wine); age (distilled spirits); or percentage of alcohol. Differences in packaging such as difference in label design or color, or a different style, type or size of container are not considered different brands.
*Equipment.* All functional items such as tap boxes, glassware, pouring racks, and similar items used in the conduct of a retailer's business.
*Industry member.* Any person engaged in business as a distiller, brewer, rectifier, blender, or other producer, or as an importer or wholesaler, of distilled spirits, wine or malt beverages, or as a bottler, or warehousemen and bottler, of distilled spirits; industry member does not include an agency of a State or political subdivision thereof, or an officer or employee of such agency.
*Product.* Distilled spirits, wine or malt beverages, as defined in the Federal Alcohol Administration Act.
*Retail establishment.* Any premises where distilled spirits, wine or malt beverages are sold or offered for sale to consumers, whether for consumption on or off the premises where sold.
*Retailer.* Any person engaged in the sale of distilled spirits, wine or malt beverages to consumers. A wholesaler who makes incidental retail sales representing less than five percent of the wholesaler's total sales volume for the preceding two-month period shall not be considered a retailer with respect to such incidental sales.
\[T.D. ATF-74, [45 FR 63251](https://www.federalregister.gov/citation/45-FR-63251), Sept. 23, 1980, as amended by T.D. ATF-364, [60 FR 20421](https://www.federalregister.gov/citation/60-FR-20421), Apr. 26, 1995; T.D. ATF-428, [65 FR 52020](https://www.federalregister.gov/citation/65-FR-52020), Aug. 28, 2000; T.D. TTB-44, [71 FR 16922](https://www.federalregister.gov/citation/71-FR-16922), Apr. 4, 2006]
## Subpart C—Unlawful Inducements
### General
#### § 6.21 Application.
Except as provided in subpart D, it is unlawful for any industry member to induce, directly or indirectly, any retailer to purchase any products from the industry member to the exclusion, in whole or in part, of such products sold or offered for sale by other persons in interstate or foreign commerce by any of the following means:
(a) By acquiring or holding (after the expiration of any license held at the time the FAA Act was enacted) any interest in any license with respect to the premises of the retailer;
(b) By acquiring any interest in the real or personal property owned, occupied, or used by the retailer in the conduct of their business;
(c) By furnishing, giving, renting, lending, or selling to the retailer, any equipment, fixtures, signs, supplies, money, services or other thing of value, subject to the exceptions contained in subpart D;
(d) By paying or crediting the retailer for any advertising, display, or distribution service;
(e) By guaranteeing any loan or the repayment of any financial obligation of the retailer;
(f) By extending to the retailer credit for a period in excess of the credit period usual and customary to the industry for the particular class of transactions as prescribed in [§ 6.65](/current/title-27/section-6.65); or
(g) By requiring the retailer to take and dispose of a certain quota of any such products.
\[T.D. ATF-74, [45 FR 63251](https://www.federalregister.gov/citation/45-FR-63251), Sept. 23, 1980, as amended by T.D. TTB-196, [89 FR 87935](https://www.federalregister.gov/citation/89-FR-87935), Nov. 6, 2024]
### Interest in Retail License
#### § 6.25 General.
The act by an industry member of acquiring or holding any interest in any license (State, county or municipal) with respect to the premises of a retailer constitutes a means to induce within the meaning of the Act.
\[T.D. ATF-364, [60 FR 20421](https://www.federalregister.gov/citation/60-FR-20421), Apr. 26, 1995]
#### § 6.26 Indirect interest.
Industry member interest in retail licenses includes any interest acquired by corporate officials, partners, employees or other representatives of the industry member. Any interest in a retail license acquired by a separate corporation in which the industry member or its officials, hold ownership or are otherwise affiliated, is an interest in a retail license.
#### § 6.27 Proprietary interest.
(a) *Complete ownership.* Outright ownership of a retail business by an industry member is not an interest which may result in a violation of section 105(b)(1) of the Act.
(b) *Partial ownership.* Less than complete ownership of a retail business by an industry member constitutes an interest in a retail license within the meaning of the Act.
\[T.D. ATF-74, [45 FR 63251](https://www.federalregister.gov/citation/45-FR-63251), Sept. 23, 1980, as amended by T.D. ATF-364, [60 FR 20421](https://www.federalregister.gov/citation/60-FR-20421), Apr. 26, 1995]
### Interest in Retail Property
#### § 6.31 General.
The act by an industry member of acquiring an interest in real or personal property owned, occupied, or used by the retailer in the conduct of business constitutes a means to induce within the meaning of the Act.
\[T.D. ATF-364, [60 FR 20421](https://www.federalregister.gov/citation/60-FR-20421), Apr. 26, 1995]
#### § 6.32 Indirect interest.
Industry member interest in retail property includes any interest acquired by corporate officials, partners, employees or other representatives of the industry member. Any interest in retail property acquired by a separate corporation in which the industry member or its officials, hold ownership or are otherwise affiliated, is an interest in retail property.
#### § 6.33 Proprietary interest.
(a) *Complete ownership.* Outright ownership of a retail business by an industry member is not an interest that may result in a violation of section 105(b)(2) of the Act.
(b) *Partial ownership.* Less than complete ownership of a retail business by an industry member constitutes an interest in retail property within the meaning of the Act.
\[T.D. ATF-74, [45 FR 63251](https://www.federalregister.gov/citation/45-FR-63251), Sept. 23, 1980, as amended by T.D. ATF-364, [60 FR 20421](https://www.federalregister.gov/citation/60-FR-20421), Apr. 26, 1995]
#### § 6.34 Mortgages.
The acquisition of a mortgage on a retailer's real or personal property by an industry member constitutes an interest in the retailer's property within the meaning of the Act.
#### § 6.35 Renting display space.
The renting of display space by an industry member at a retail establishment constitutes an interest in the retailer's property within the meaning of the Act.
### Furnishing Things of Value
#### § 6.41 General.
Subject to the exceptions listed in subpart D, the act by an industry member of furnishing, giving, renting, lending, or selling any equipment, fixtures, signs, supplies, money, services, or other things of value to a retailer constitutes a means to induce within the meaning of the Act.
\[T.D. ATF-364, [60 FR 20421](https://www.federalregister.gov/citation/60-FR-20421), Apr. 26, 1995]
#### § 6.42 Indirect inducement through third party arrangements.
(a) *General.* The furnishing, giving, renting, lending, or selling of equipment, fixtures, signs, supplies, money, services, or other thing of value by an industry member to a third party, where the benefits resulting from such things of value flow to individual retailers, is the indirect furnishing of a thing of value within the meaning of the Act. Indirect furnishing of a thing of value includes, but is not limited to, making payments for advertising to a retailer association or a display company where the resulting benefits flow to individual retailers.
(b) *Exceptions.* An indirect inducement will not arise where the thing of value was furnished to a retailer by the third party without the knowledge or intent of the industry member, or the industry member did not reasonably foresee that the thing of value would have been furnished to a retailer. Things which may lawfully be furnished, given, rented, lent, or sold by industry members to retailers under subpart D may also be furnished directly by a third party to a retailer.
\[T.D. ATF-364, [60 FR 20421](https://www.federalregister.gov/citation/60-FR-20421), Apr. 26, 1995]
#### § 6.43 Sale of equipment.
A transaction in which equipment is sold to a retailer by an industry member, except as provided in [§ 6.88](/current/title-27/section-6.88), is the selling of equipment in within the meaning of the Act regardless of how sold. Further, the negotiation by an industry member of a special price to a retailer for equipment from an equipment company is the furnishing of a thing of value within the meaning of the Act.
\[T.D. ATF-74, [45 FR 63251](https://www.federalregister.gov/citation/45-FR-63251), Sept. 23, 1980, as amended by T.D. ATF-364, [60 FR 20422](https://www.federalregister.gov/citation/60-FR-20422), Apr. 26, 1995]
#### § 6.44 Free warehousing.
The furnishing of free warehousing by delaying delivery of distilled spirits, wine, or malt beverages beyond the time that payment for the product is received, or if a retailer is purchasing on credit, delaying final delivery of products beyond the close of the period of time for which credit is lawfully extended, is the furnishing of a service or thing of value within the meaning of the Act.
#### § 6.45 Assistance in acquiring license.
Any assistance (financial, legal, administrative or influential) given the retailer by an industry member in the retailer's acquisition of the retailer's license is the furnishing of a service or thing of value within the meaning of the Act.
#### §§ 6.46-6.47 \[Reserved]
### Paying for Advertising, Display or Distribution Service
#### § 6.51 General.
The act by an industry member of paying or crediting a retailer for any advertising, display, or distribution service constitutes a means to induce within the meaning of the Act, whether or not the advertising, display, or distribution service received by the industry member in these instances is commensurate with the amount paid therefor. This includes payments or credits to retailers that are merely reimbursements, in full or in part, for such services purchased by a retailer from a third party.
\[T.D. ATF-364, [60 FR 20422](https://www.federalregister.gov/citation/60-FR-20422), Apr. 26, 1995]
#### § 6.52 Cooperative advertising.
An arrangement in which an industry member participates with a retailer in paying for an advertisement placed by the retailer constitutes paying the retailer for advertising within the meaning of the Act.
#### § 6.53 Advertising in ballparks, racetracks, and stadiums.
The purchase, by an industry member, of advertising on signs, scoreboards, programs, scorecards, and the like at ballparks, racetracks or stadiums, from the retail concessionaire constitutes paying the retailer for an advertising service within the meaning of the Act.
#### § 6.54 Advertising in retailer publications.
The purchase, by an industry member, of advertising in a retailer publication for distribution to consumers or the general public constitutes paying the retailer for advertising within the meaning of the Act.
#### § 6.55 Display service.
Industry member reimbursements to retailers for setting up product or other displays constitutes paying the retailer for rendering a display service within the meaning of the Act.
#### § 6.56 Renting display space.
A promotion whereby an industry member rents display space at a retail establishment constitutes paying the retailer for rendering a display service within the meaning of the Act.
### Guaranteeing Loans
#### § 6.61 Guaranteeing loans.
The act by an industry member of guaranteeing any loan or the repayment of any financial obligation of a retailer constitutes a means to induce within the meaning of the Act.
\[T.D. ATF-364, [60 FR 20422](https://www.federalregister.gov/citation/60-FR-20422), Apr. 26, 1995]
### Extension of Credit
#### § 6.65 General.
Extension of credit by an industry member to a retailer for a period of time in excess of 30 days from the date of delivery constitutes a means to induce within the meaning of the Act.
\[T.D. ATF-364, [60 FR 20422](https://www.federalregister.gov/citation/60-FR-20422), Apr. 26, 1995]
#### § 6.66 Calculation of period.
For the purpose of this part, the period of credit is calculated as the time elapsing between the date of delivery of the product and the date of full legal discharge of the retailer, through the payment of cash or its equivalent, from all indebtedness arising from the transaction.
#### § 6.67 Sales to retailer whose account is in arrears.
An extension of credit (for product purchases) by an industry member to a retailer whose account is in arrears does not constitute a means to induce within the meaning of the Act so long as such retailer pays in advance or on delivery an amount equal to or greater than the value of each order, regardless of the manner in which the industry member applies the payment in its records.
\[T.D. ATF-364, [60 FR 20422](https://www.federalregister.gov/citation/60-FR-20422), Apr. 26, 1995]
### Quota Sales
#### § 6.71 Quota sales.
The act by an industry member of requiring a retailer to take and dispose of any quota of distilled spirits, wine, or malt beverages constitutes a means to induce within the meaning of the Act.
\[T.D. ATF-364, [60 FR 20422](https://www.federalregister.gov/citation/60-FR-20422), Apr. 26, 1995]
#### § 6.72 “Tie-in” sales.
The act by an industry member of requiring that a retailer purchase one product (as defined in [§ 6.11](/current/title-27/section-6.11)) in order to obtain another constitutes a means to induce within the meaning of the Act. This includes the requirement to take a minimum quantity of a product in standard packaging in order to obtain the same product in some type of premium package, i.e., a distinctive decanter, or wooden or tin box. This also includes combination sales if one or more products may be purchased only in combination with other products and not individually. However, an industry member is not precluded from selling two or more kinds or brands of products to a retailer at a special combination price, provided the retailer has the option of purchasing either product at the usual price, and the retailer is not required to purchase any product it does not want. See [§ 6.93](/current/title-27/section-6.93) for combination packaging of products plus non-alcoholic items.
\[T.D. ATF-364, [60 FR 20422](https://www.federalregister.gov/citation/60-FR-20422), Apr. 26, 1995]
## Subpart D—Exceptions
#### § 6.81 General.
(a) *Application.* Section 105(b)(3) of the Act enumerates means to induce that may be unlawful under the subsection, subject to such exceptions as are prescribed in regulations, having due regard for public health, the quantity and value of articles involved, established trade customs not contrary to the public interest, and the purposes of that section. This subpart implements section 105(b)(3) of the Act and identifies the practices that are exceptions to section 105(b)(3) of the Act. An industry member may furnish a retailer equipment, inside signs, supplies, services, or other things of value, under the conditions and within the limitations prescribed in this subpart.
(b) *Recordkeeping Requirements.*
(1) Industry members shall keep and maintain records on the permit or brewery premises, for a three year period, of all items furnished to retailers under [§§ 6.83](/current/title-27/section-6.83), [6.88](/current/title-27/section-6.88), [6.91](/current/title-27/section-6.91), [6.96(a)](/current/title-27/section-6.96#p-6.96\(a\)), and [6.100](/current/title-27/section-6.100) and the commercial records required under [§ 6.101](/current/title-27/section-6.101). Commercial records or invoices may be used to satisfy this recordkeeping requirement if all required information is shown. These records shall show:
(i) The name and address of the retailer receiving the item;
(ii) The date furnished;
(iii) The item furnished;
(iv) The industry member's cost of the item furnished (determined by the manufacturer's invoice price); and
(v) Charges to the retailer for any item.
(2) Although no separate recordkeeping violation results, an industry member who fails to keep such records is not eligible for the exception claimed.
(Approved by the Office of Management and Budget under control number 1512-0392)
\[T.D. ATF-364, [60 FR 20422](https://www.federalregister.gov/citation/60-FR-20422), Apr. 26, 1995]
#### § 6.82 \[Reserved]
#### § 6.83 Product displays.
(a) *General.* The act by an industry member of giving or selling product displays to a retailer does not constitute a means to induce within the meaning of section 105(b)(3) of the Act provided that the conditions prescribed in [paragraph (c)](/current/title-27/section-6.83#p-6.83\(c\)) of this section are met.
(b) *Definition.* “Product display” means any wine racks, bins, barrels, casks, shelving, or similar items the primary function of which is to hold and display consumer products.
(c) *Conditions and limitations.*
(1) The total value of all product displays given or sold by an industry member under [paragraph (a)](/current/title-27/section-6.83#p-6.83\(a\)) of this section may not exceed $300 per brand at any one time in any one retail establishment. Industry members may not pool or combine dollar limitations in order to provide a retailer a product display valued in excess of $300 per brand. The value of a product display is the actual cost to the industry member who initially purchased it. Transportation and installation costs are excluded.
(2) All product displays must bear conspicuous and substantial advertising matter on the product or the industry member which is permanently inscribed or securely affixed. The name and address of the retailer may appear on the product displays.
(3) The giving or selling of such product displays may be conditioned upon the purchase of the distilled spirits, wine, or malt beverages advertised on those displays in a quantity necessary for the initial completion of such display. No other condition can be imposed by the industry member on the retailer in order for the retailer to receive or obtain the product display.
\[T.D. ATF-364, [60 FR 20422](https://www.federalregister.gov/citation/60-FR-20422), Apr. 26, 1995]
#### § 6.84 Point of sale advertising materials and consumer advertising specialties.
(a) *General.* The act by an industry member of giving or selling point of sale advertising materials and consumer advertising specialties to a retailer does not constitute a means to induce within the meaning of section 105(b)(3) of the Act provided that the conditions prescribed in [paragraph (c)](/current/title-27/section-6.84#p-6.84\(c\)) of this section are met.
(b) *Definitions* —
(1) *Point of sale advertising materials* are items designed to be used within a retail establishment to attract consumer attention to the products of the industry member. Such materials include, but are not limited to: posters, placards, designs, inside signs (electric, mechanical or otherwise), window decorations, trays, coasters, mats, menu cards, meal checks, paper napkins, foam scrapers, back bar mats, thermometers, clocks, calendars, and alcoholic beverage lists or menus.
(2) *Consumer advertising specialties* are items that are designed to be carried away by the consumer, such as trading stamps, nonalcoholic mixers, pouring racks, ash trays, bottle or can openers, cork screws, shopping bags, matches, printed recipes, pamphlets, cards, leaflets, blotters, post cards, pencils, shirts, caps, and visors.
(c) *Conditions and limitations.*
(1) All point of sale advertising materials and consumer advertising specialties must bear conspicuous and substantial advertising matter about the product or the industry member which is permanently inscribed or securely affixed. The name and address of the retailer may appear on the point of sale advertising materials.
(2) The industry member may not directly or indirectly pay or credit the retailer for using or distributing these materials or for any expense incidental to their use.
\[T.D. ATF-364, [60 FR 20423](https://www.federalregister.gov/citation/60-FR-20423), Apr. 26, 1995]
#### § 6.85 Temporary retailers.
(a) *General.* The furnishing of things of value to a temporary retailer does not constitute a means to induce within the meaning of section 105(b)(3) of the Act.
(b) *Definition.* For purposes of administering this part, a temporary retailer is a dealer who is not engaged in business as a retailer for more than four consecutive days per event, and for not more than five events in a calendar year.
\[T.D. ATF-364, [60 FR 20423](https://www.federalregister.gov/citation/60-FR-20423), Apr. 26, 1995]
#### §§ 6.86-6.87 \[Reserved]
#### § 6.88 Equipment and supplies.
(a) *General.* The act by an industry member of selling equipment or supplies to a retailer does not constitute a means to induce within the meaning of section 105(b)(3) of the Act if the equipment or supplies are sold at a price not less than the cost to the industry member who initially purchased them, and if the price is collected within 30 days of the date of the sale. The act by an industry member of installing dispensing accessories at the retailer's establishment does not constitute a means to induce within the meaning of the Act as long as the retailer bears the cost of initial installation. The act by an industry member of furnishing, giving, or selling coil cleaning service to a retailer of distilled spirits, wine, or malt beverages does not constitute a means to induce within the meaning of section 105(b)(3) of the Act.
(b) *Definition.* “Equipment and supplies” means glassware (or similar containers made of other material), dispensing accessories, carbon dioxide (and other gasses used in dispensing equipment) or ice. “Dispensing accessories” include items such as standards, faucets, cold plates, rods, vents, taps, tap standards, hoses, washers, couplings, gas gauges, vent tongues, shanks, and check valves.
\[T.D. ATF-364, [60 FR 20423](https://www.federalregister.gov/citation/60-FR-20423), Apr. 26, 1995]
#### §§ 6.89-6.90 \[Reserved]
#### § 6.91 Samples.
The act by an industry member of furnishing or giving a sample of distilled spirits, wine, or malt beverages to a retailer who has not purchased the brand from that industry member within the last 12 months does not constitute a means to induce within the meaning of section 105(b)(3) of the Act. For each retail establishment the industry member may give not more than 3 gallons of any brand of malt beverage, not more than 3 liters of any brand of wine, and not more than 3 liters of distilled spirits. If a particular product is not available in a size within the quantity limitations of this section, an industry member may furnish to a retailer the next larger size.
\[T.D. ATF-364, [60 FR 20423](https://www.federalregister.gov/citation/60-FR-20423), Apr. 26, 1995]
#### § 6.92 Newspaper cuts.
Newspaper cuts, mats, or engraved blocks for use in retailers' advertisements may be given or sold by an industry member to a retailer selling the industry member's products.
\[T.D. ATF-364, [60 FR 20423](https://www.federalregister.gov/citation/60-FR-20423), Apr. 26, 1995]
#### § 6.93 Combination packaging.
The act by an industry member of packaging and distributing distilled spirits, wine, or malt beverages in combination with other (non-alcoholic) items for sale to consumers does not constitute a means to induce within the meaning of section 105(b)(3) of the Act.
\[T.D. ATF-364, [60 FR 20423](https://www.federalregister.gov/citation/60-FR-20423), Apr. 26, 1995]
#### § 6.94 Educational seminars.
An industry member may give or sponsor educational seminars for employees of retailers either at the industry member's premises or at the retail establishment. Examples would be seminars dealing with use of a retailer's equipment, training seminars for employees of retailers, or tours of industry member's plant premises. This section does not authorize an industry member to pay a retailer's expense in conjunction with an educational seminar (such as travel and lodging). This does not preclude providing nominal hospitality during the event.
\[T.D. ATF-74, [45 FR 63251](https://www.federalregister.gov/citation/45-FR-63251), Sept. 23, 1980, as amended by T.D. ATF-364, [60 FR 20423](https://www.federalregister.gov/citation/60-FR-20423), Apr. 26, 1995]
#### § 6.95 Consumer tasting or sampling at retail establishments.
An industry member may conduct tasting or sampling activities at a retail establishment. The industry member may purchase the products to be used from the retailer, but may not purchase them from the retailer for more than the ordinary retail price.
#### § 6.96 Consumer promotions.
(a) *Coupons.* The act by an industry member of furnishing to consumers coupons which are redeemable at a retail establishment does not constitute a means to induce within the meaning of section 105(b)(3) of the Act, provided the following conditions are met:
(1) All retailers within the market where the coupon offer is made may redeem such coupons; and
(2) An industry member may not reimburse a retailer for more than the face value of all coupons redeemed, plus a usual and customary handling fee for the redemption of coupons.
(b) *Direct offerings.* Contest prizes, premium offers, refunds, and like items may be offered by industry members directly to consumers. Officers, employees and representatives of wholesalers or retailers are excluded from participation.
\[T.D. ATF-74, [45 FR 63251](https://www.federalregister.gov/citation/45-FR-63251), Sept. 23, 1980, as amended by T.D. ATF-364, [60 FR 20423](https://www.federalregister.gov/citation/60-FR-20423), Apr. 26, 1995; T.D. TTB-196, [89 FR 87935](https://www.federalregister.gov/citation/89-FR-87935) Nov. 6, 2024]
#### § 6.97 \[Reserved]
#### § 6.98 Advertising service.
The listing of the names and addresses of two or more unaffiliated retailers selling the products of an industry member in an advertisement of that industry member does not constitute a means to induce within the meaning of section 105(b)(3) of the Act, provided:
(a) The advertisement does not also contain the retail price of the product (except where the exclusive retailer in the jurisdiction is a State or a political subdivision of a State), and
(b) The listing is the only reference to the retailers in the advertisement and is relatively inconspicuous in relation to the advertisement as a whole, and
(c) The advertisement does not refer only to one retailer or only to retail establishments controlled directly or indirectly by the same retailer, except where the retailer is an agency of a State or a political subdivision of a State.
\[T.D. ATF-364, [60 FR 20423](https://www.federalregister.gov/citation/60-FR-20423), Apr. 26, 1995]
#### § 6.99 Stocking, rotation, and pricing service.
(a) *General.* Industry members may, at a retail establishment, stock, rotate and affix the price to distilled spirits, wine, or malt beverages which they sell, provided products of other industry members are not altered or disturbed. The rearranging or resetting of all or part of a store or liquor department is not hereby authorized.
(b) *Shelf plan and shelf schematics.* The act by an industry member of providing a recommended shelf plan or shelf schematic for distilled spirits, wine, or malt beverages does not constitute a means to induce within the meaning of section 105(b)(3) of the Act.
\[T.D. ATF-364, [60 FR 20424](https://www.federalregister.gov/citation/60-FR-20424), Apr. 26, 1995]
#### § 6.100 Participation in retailer association activities.
The following acts by an industry member participating in retailer association activities do not constitute a means to induce within the meaning of section 105(b)(3) of the Act:
(a) Displaying its products at a convention or trade show;
(b) Renting display booth space if the rental fee is the same as paid by all exhibitors at the event;
(c) Providing its own hospitality which is independent from association sponsored activities;
(d) Purchasing tickets to functions and paying registration fees if the payments or fees are the same as paid by all attendees, participants or exhibitors at the event; and
(e) Making payments for advertisements in programs or brochures issued by retailer associations at a convention or trade show if the total payments made by an industry member for all such advertisements do not exceed \$300 per year for any retailer association.
\[T.D. ATF-364, [60 FR 20424](https://www.federalregister.gov/citation/60-FR-20424), Apr. 26, 1995]
#### § 6.101 Merchandise.
(a) *General.* The act by an industry member, who is also in business as a bona fide producer or vendor of other merchandise (for example, groceries or pharmaceuticals), of selling that merchandise to a retailer does not constitute a means to induce within the meaning of section 105(b)(3) of the Act, provided:
(1) The merchandise is sold at its fair market value;
(2) The merchandise is not sold in combination with distilled spirits, wines, or malt beverages (except as provided in [§ 6.93](/current/title-27/section-6.93));
(3) The industry member's acquisition or production costs of the merchandise appears on the industry member's purchase invoices or other records; and
(4) The individual selling prices of merchandise and distilled spirits, wines, or malt beverages sold in a single transaction can be determined from commercial documents covering the sales transaction.
(b) *Things of value covered in other sections of this part.* The act by an industry member of providing equipment, fixtures, signs, glassware, supplies, services, and advertising specialties to retailers does not constitute a means to induce within the meaning of section 105(b)(3) of the Act only as provided in other sections within this part.
\[T.D. ATF-364, [60 FR 20424](https://www.federalregister.gov/citation/60-FR-20424), Apr. 26, 1995]
#### § 6.102 Outside signs.
The act by an industry member of giving or selling outside signs to a retailer does not constitute a means to induce within the meaning of section 105(b)(3) of the Act provided that:
(a) The sign must bear conspicuous and substantial advertising matter about the product or the industry member which is permanently inscribed or securely affixed;
(b) The retailer is not compensated, directly or indirectly such as through a sign company, for displaying the signs; and
(c) The cost of the signs may not exceed \$400.
\[T.D. ATF-364, [60 FR 20424](https://www.federalregister.gov/citation/60-FR-20424), Apr. 26, 1995]
## Subpart E—Exclusion
#### Source:
T.D. ATF-364, [60 FR 20424](https://www.federalregister.gov/citation/60-FR-20424), Apr. 26, 1995, unless otherwise noted.
#### § 6.151 Exclusion, in general.
(a) Exclusion, in whole or in part occurs:
(1) When a practice by an industry member, whether direct, indirect, or through an affiliate, places (or has the potential to place) retailer independence at risk by means of a tie or link between the industry member and retailer or by any other means of industry member control over the retailer; and
(2) Such practice results in the retailer purchasing less than it would have of a competitor's product.
(b) Section 6.152 lists practices that create a tie or link that places retailer independence at risk. [Section 6.153](/current/title-27/section-6.153) lists the criteria used for determining whether other practices can put retailer independence at risk.
#### § 6.152 Practices which put retailer independence at risk.
The practices specified in this section put retailer independence at risk. The practices specified here are examples and do not constitute a complete list of those practices that put retailer independence at risk.
(a) The act by an industry member of resetting stock on a retailer's premises (other than stock offered for sale by the industry member).
(b) The act by an industry member of purchasing or renting display, shelf, storage or warehouse space (*i.e.* slotting allowance).
(c) Ownership by an industry member of less than a 100 percent interest in a retailer, where such ownership is used to influence the purchases of the retailer.
(d) The act by an industry member of requiring a retailer to purchase one alcoholic beverage product in order to be allowed to purchase another alcoholic beverage product at the same time.
#### § 6.153 Criteria for determining retailer independence.
The criteria specified in this section are indications that a particular practice, other than those in [§ 6.152](/current/title-27/section-6.152), places retailer independence at risk. A practice need not meet all of the criteria specified in this section in order to place retailer independence at risk.
(a) The practice restricts or hampers the free economic choice of a retailer to decide which products to purchase or the quantity in which to purchase them for sale to consumers.
(b) The industry member obligates the retailer to participate in the promotion to obtain the industry member's product.
(c) The retailer has a continuing obligation to purchase or otherwise promote the industry member's product.
(d) The retailer has a commitment not to terminate its relationship with the industry member with respect to purchase of the industry member's products.
(e) The practice involves the industry member in the day-to-day operations of the retailer. For example, the industry member controls the retailer's decisions on which brand of products to purchase, the pricing of products, or the manner in which the products will be displayed on the retailer's premises.
(f) The practice is discriminatory in that it is not offered to all retailers in the local market on the same terms without business reasons present to justify the difference in treatment.
# Part 7 — LABELING AND ADVERTISING OF MALT BEVERAGES
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-7
Full text of 27 CFR Part 7 — LABELING AND ADVERTISING OF MALT BEVERAGES. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 7—LABELING AND ADVERTISING OF MALT BEVERAGES
#### Authority:
[27 U.S.C. 205](https://www.govinfo.gov/link/uscode/27/205) and [207](https://www.govinfo.gov/link/uscode/27/207).
#### Source:
T.D. TTB-176, [87 FR 7605](https://www.federalregister.gov/citation/87-FR-7605), Feb. 9, 2022, unless otherwise noted.
#### § 7.0 Scope.
This part sets forth requirements that apply to the labeling and packaging of malt beverages in containers, including requirements for label approval and rules regarding mandatory, regulated, and prohibited labeling statements. This part also sets forth requirements that apply to the advertising of malt beverages.
## Subpart A—General Provisions
#### § 7.1 Definitions.
When used in this part and on forms prescribed under this part, the following terms have the meaning assigned to them in this section, unless the terms appear in a context that requires a different meaning. Any other term defined in the Federal Alcohol Administration Act (FAA Act) and used in this part has the same meaning assigned to it by the FAA Act.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury.
*Advertisement or Advertising.* See [§ 7.232](/current/title-27/section-7.232) for meaning of these terms as used in [subpart N of this part](/current/title-27/part-7/subpart-N).
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any function relating to the administration or enforcement of this part by the current version of TTB Order 1135.7, Delegation of the Administrator's Authorities in [27 CFR part 7](/current/title-27/part-7), Labeling and Advertising of Malt Beverages.
*Bottler.* Any brewer or wholesaler who places malt beverages in containers.
*Brand name.* The name under which a malt beverage or a line of malt beverages is sold.
*Certificate holder.* The permittee or brewer whose name, address, and basic permit number, plant registry number, or brewer's notice number appears on an approved TTB Form 5100.31.
*Certificate of exemption from label approval.* A certificate issued on TTB Form 5100.31, which authorizes the bottling of wine or distilled spirits, under the condition that the product will under no circumstances be sold, offered for sale, shipped, delivered for shipment, or otherwise introduced by the applicant, directly or indirectly, into interstate or foreign commerce.
*Certificate of label approval (COLA).* A certificate issued on form TTB Form 5100.31 that authorizes the bottling of wine, distilled spirits, or malt beverages, or the removal of bottled wine, distilled spirits, or malt beverages from customs custody for introduction into commerce, as long as the product bears labels identical to the labels appearing on the face of the certificate, or labels with changes authorized by TTB on the certificate or otherwise (such as through the issuance of public guidance available on the TTB website at *[https://www.ttb.gov](https://www.ttb.gov)*).
*Container.* Any can, bottle, box, cask, keg, barrel or other closed receptacle, in any size or material, which is for use in the sale of malt beverages at retail.
*Customs officer.* An officer of U.S. Customs and Border Protection (CBP) or any agent or other person authorized by law to perform the duties of such an officer.
*Distinctive or fanciful name.* A descriptive name or phrase chosen to identify a malt beverage product on the label. It does not include a brand name, class or type designation, statement of composition, or designation known to the trade or consumers.
*FAA Act.* The Federal Alcohol Administration Act.
*Gallon.* A U.S. gallon of 231 cubic inches of malt beverages at 39.1 degrees Fahrenheit (4 degrees Celsius). All other liquid measures used are subdivisions of the gallon as defined.
*Interstate or foreign commerce.* Commerce between any State and any place outside of that State or commerce within the District of Columbia or commerce between points within the same State but through any place outside of that State.
*Keg collar.* A disk that is pushed down over the keg's bung or tap cover.
*Malt beverage.* A beverage made by the alcoholic fermentation of an infusion or decoction, or combination of both, in potable brewing water, of malted barley with hops, or their parts, or their products, and with or without other malted cereals, and with or without the addition of unmalted or prepared cereals, other carbohydrates or products prepared therefrom, and with or without the addition of carbon dioxide, and with or without other wholesome products suitable for human food consumption. See [§ 7.5](/current/title-27/section-7.5) for standards applying to the use of processing methods and flavors in malt beverage production.
*Net contents.* The amount, by volume, of a malt beverage held in a container.
*Permittee.* Any person holding a basic permit under the FAA Act.
*Person.* Any individual, corporation, partnership, association, joint-stock company, business trust, limited liability company, or other form of business enterprise, including a receiver, trustee, or liquidating agent and including an officer or employee of any agency of a State or political subdivision of a State.
*Responsible advertiser.* The permittee or brewer responsible for the publication or broadcast of an advertisement.
*State.* One of the 50 States of the United States, the District of Columbia, or the Commonwealth of Puerto Rico.
*Tap cover.* A cap, usually made of plastic, that fits over the top of the tap (or bung) of a keg.
*TTB.* The Alcohol and Tobacco Tax and Trade Bureau of the Department of the Treasury.
*United States (U.S.).* The 50 States, the District of Columbia, and the Commonwealth of Puerto Rico.
#### § 7.2 Territorial extent.
The provisions of this part apply to the 50 States, the District of Columbia, and the Commonwealth of Puerto Rico.
#### § 7.3 General requirements and prohibitions under the FAA Act.
(a) *Certificates of label approval (COLAs).* Subject to the requirements and exceptions set forth in the regulations in [subpart B of this part](/current/title-27/part-7/subpart-B), any brewer or wholesaler who bottles malt beverages, and any person who removes malt beverages in containers from customs custody for sale or any other commercial purpose, is required to first obtain from TTB a certificate of label approval (COLA) covering the label(s) on each container.
(b) *Alteration, mutilation, destruction, obliteration, or removal of labels.* Subject to the requirements and exceptions set forth in the regulations in [subpart C of this part](/current/title-27/part-7/subpart-C), it is unlawful to alter, mutilate, destroy, obliterate, or remove labels on malt beverage containers. This prohibition applies to any person, including retailers, holding malt beverages for sale in interstate or foreign commerce or any person holding malt beverages for sale after shipment in interstate or foreign commerce.
(c) *Labeling requirements for malt beverages.* Subject to the jurisdictional limits of the FAA Act, as set forth in [§ 7.4](/current/title-27/section-7.4), it is unlawful for any person engaged in business as a brewer, wholesaler, or importer of malt beverages, directly or indirectly, or through an affiliate, to sell or ship, or deliver for sale or shipment, or otherwise introduce or receive in interstate or foreign commerce, or remove from customs custody, any malt beverages in containers unless such containers are marked, branded, labeled, and packaged in conformity with the regulations in this part.
(d) *Labeled in accordance with this part.* In order to be labeled in accordance with the regulations in this part, a container of malt beverages must be in compliance with the following requirements:
(1) It must bear one or more labels meeting the standards for “labels” set forth in [subpart D of this part](/current/title-27/part-7/subpart-D);
(2) One or more of the labels on the container must include the mandatory information set forth in [subpart E of this part](/current/title-27/part-7/subpart-E);
(3) Claims on any label, container, or packaging (as defined in [§ 7.81](/current/title-27/section-7.81)) must comply with the rules for restricted label statements, as applicable, set forth in [subpart F of this part](/current/title-27/part-7/subpart-F);
(4) Statements or any other representations on any malt beverage label, container, or packaging (as defined in [§§ 7.101](/current/title-27/section-7.101) and [7.121](/current/title-27/section-7.121)) may not violate the regulations in [subparts G](/current/title-27/part-7/subpart-G) and [H of this part](/current/title-27/part-7/subpart-H) regarding certain practices on labeling of malt beverages; and
(5) The class and type designation on any label, as well as any designation appearing on containers or packaging, must comply with the standards for classes and types set forth in [subpart I of this part](/current/title-27/part-7/subpart-I).
#### § 7.4 Jurisdictional limits of the FAA Act.
(a) *Malt beverages sold in interstate or foreign commerce* —
(1) *General.* The labeling provisions of this part apply to malt beverages sold or shipped or delivered for shipment, or otherwise introduced into or received in any State from any place outside thereof, only to the extent that the laws or regulations of such State impose requirements similar to the requirements of the regulations in this part, with respect to the labels and labeling of malt beverages not sold or shipped or delivered for shipment or otherwise introduced into or received in such State from any place outside thereof.
(2) *Similar State law.* For purposes of this section, a “similar” State law may be found in State laws or regulations that apply specifically to malt beverages or in State laws or regulations that provide general labeling requirements that are not specific to malt beverages but that do apply to malt beverages. In order to be “similar” to the Federal requirements, the State requirements need not be identical to the Federal requirements. Nonetheless, if the label in question does not violate the laws or regulations of the State or States into which the brewer, wholesaler, or importer is shipping the malt beverages, it does not violate this part.
(b) *Malt beverages not sold in interstate or foreign commerce.* The labeling regulations in this part do not apply to domestically bottled malt beverages that are not and will not be sold, or offered for sale, or shipped or delivered for shipment, or otherwise introduced in interstate or foreign commerce.
#### § 7.5 Ingredients and processes.
(a) *Use of nonbeverage flavors and other nonbeverage ingredients containing alcohol.*
(1) Nonbeverage flavors and other nonbeverage ingredients containing alcohol may be used in producing a malt beverage (sometimes referred to as a “flavored malt beverage”). Except as provided in [paragraph (a)(2)](/current/title-27/section-7.5#p-7.5\(a\)\(2\)) of this section, no more than 49 percent of the overall alcohol content (determined without regard to any tolerance otherwise allowed by this part) of the finished product may be derived from the addition of nonbeverage flavors and other nonbeverage ingredients containing alcohol. For example, a finished malt beverage that contains 5.0 percent alcohol by volume must derive a minimum of 2.55 percent alcohol by volume from the fermentation of barley malt and other materials and may derive not more than 2.45 percent alcohol by volume from the addition of nonbeverage flavors and other nonbeverage ingredients containing alcohol.
(2) In the case of malt beverages with an alcohol content of more than 6 percent by volume (determined without regard to any tolerance otherwise allowed by this part), no more than 1.5 percent of the volume of the malt beverage may consist of alcohol derived from added nonbeverage flavors and other nonbeverage ingredients containing alcohol.
(b) *Processing.* Malt beverages may be filtered or otherwise processed in order to remove color, taste, aroma, bitterness, or other characteristics derived from fermentation.
#### § 7.6 Brewery products not covered by this part.
Certain fermented products that are regulated as “beer” under the Internal Revenue Code (IRC) do not fall within the definition of a “malt beverage” under the FAA Act and thus are not subject to this part. See [§ 7.7](/current/title-27/section-7.7) for related TTB regulations that may apply to these products. See [§§ 25.11](/current/title-27/section-25.11) and [27.11 of this chapter](/current/title-27/section-27.11) for the definition of “beer” under the IRC.
(a) *Saké and similar products.* Saké and similar products (including products that fall within the definition of “beer” under [parts 25](/current/title-27/part-25) and [27 of this chapter](/current/title-27/part-27)) that fall within the definition of a “wine” under the FAA Act are covered by the labeling regulations for wine in [27 CFR part 4](/current/title-27/part-4).
(b) *Other beers not made with both malted barley and hops.* The regulations in this part do not cover beer products that are not made with both malted barley and hops, or their parts or their products, or that do not fall within the definition of a “malt beverage” under [§ 7.1](/current/title-27/section-7.1) for any other reason. Bottlers and importers of alcohol beverages that do not fall within the definition of malt beverages, wine, or distilled spirits under the FAA Act should refer to the applicable labeling regulations for foods issued by the U.S. Food and Drug Administration. See [21 CFR part 101](/current/title-21/part-101).
#### § 7.7 Other TTB labeling regulations that apply to malt beverages.
In addition to the regulations in this part, malt beverages must also comply with the following TTB labeling regulations:
(a) *Health warning statement.* Alcoholic beverages, including malt beverages, that contain at least 0.5 percent alcohol by volume, must be labeled with a health warning statement in accordance with the Alcoholic Beverage Labeling Act of 1988 (ABLA). The regulations implementing the ABLA are contained in [27 CFR part 16](/current/title-27/part-16).
(b) *Internal Revenue Code requirements.* The labeling and marking requirements for beer under the Internal Revenue Code are found in [27 CFR part 25, subpart J](/current/title-27/part-25/subpart-J) (for domestic breweries) and [27 CFR part 27, subpart E](/current/title-27/part-27/subpart-E) (for importers).
#### § 7.8 Malt beverages for export.
The regulations in this part shall not apply to malt beverages exported in bond.
#### § 7.9 \[Reserved]
#### § 7.10 Other related regulations.
(a) *TTB regulations.* Other TTB regulations that relate to malt beverages are listed in [paragraphs (a)(1)](/current/title-27/section-7.10#p-7.10\(a\)\(1\)) through [(8)](/current/title-27/section-7.10#p-7.10\(a\)\(8\)) of this section:
(1) [27 CFR part 1](/current/title-27/part-1)—Basic Permit Requirements Under the Federal Alcohol Administration Act, Nonindustrial Use of Distilled Spirits and Wine, Bulk Sales and Bottling of Distilled Spirits;
(2) [27 CFR part 13](/current/title-27/part-13)—Labeling Proceedings;
(3) [27 CFR part 16](/current/title-27/part-16)—Alcoholic Beverage Health Warning Statement;
(4) [27 CFR part 25](/current/title-27/part-25)—Beer;
(5) [27 CFR part 26](/current/title-27/part-26)—Liquors and Articles from Puerto Rico and the Virgin Islands;
(6) [27 CFR part 27](/current/title-27/part-27)—Importation of Distilled Spirits, Wines, and Beer;
(7) [27 CFR part 28](/current/title-27/part-28)—Exportation of Alcohol; and
(8) [27 CFR part 71](/current/title-27/part-71)—Rules of Practice in Permit Proceedings.
(b) *Other Federal regulations.* The regulations listed in [paragraphs (b)(1)](/current/title-27/section-7.10#p-7.10\(b\)\(1\)) through [(8)](/current/title-27/section-7.10#p-7.10\(b\)\(8\)) of this section issued by other Federal agencies also may apply:
(1) [7 CFR part 205](/current/title-7/part-205)—National Organic Program;
(2) [19 CFR part 11](/current/title-19/part-11)—Packing and Stamping; Marking;
(3) [19 CFR part 102](/current/title-19/part-102)—Rules of Origin;
(4) [19 CFR part 134](/current/title-19/part-134)—Country of Origin Marking;
(5) [21 CFR part 1](/current/title-21/part-1)—General Enforcement Provisions, Subpart H, Registration of Food Facilities, and Subpart I, Prior Notice of Imported Food;
(6) [21 CFR parts 70-82](/current/title-21/part-70), which pertain to food and color additives;
(7) [21 CFR part 110](/current/title-21/part-110)—Current Good Manufacturing Practice in Manufacturing, Packing, or Holding Human Food; and
(8) [21 CFR parts 170-189](/current/title-21/part-170), which pertain to food additives and secondary direct food additives for human consumption.
#### § 7.11 Forms.
(a) *General.* TTB prescribes and makes available all forms required by this part. Any person completing a form must provide all of the information required by each form as indicated by the headings on the form and the instructions for the form. Each form must be filed in accordance with this part and the instructions for the form.
(b) *Electronically filing forms.* The forms required by this part can be filed electronically by using TTB's online filing systems: COLAs Online and Formulas Online. Anyone who intends to use one of these online filing systems must first register to use the system by accessing the TTB website at *[https://www.ttb.gov](https://www.ttb.gov).*
(c) *Obtaining paper forms.* Forms required by this part are available for printing through the TTB website (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8002, Cincinnati, OH 45202.
#### § 7.12 Delegations of the Administrator.
Most of the regulatory authorities of the Administrator contained in this part are delegated to “appropriate TTB officers.” To find out which officers have been delegated specific authorities, see the current version of TTB Order 1135.7, Delegation of the Administrator's Authorities in [27 CFR part 7](/current/title-27/part-7), Labeling and Advertising of Malt Beverages. Copies of this order can be obtained by accessing the TTB website (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8002, Cincinnati, OH 45202.
## Subpart B—Certificates of Label Approval
Requirements for Malt Beverages Bottled in the United States
#### § 7.21 Requirement for certificates of label approval (COLAs) for malt beverages bottled in the United States.
(a) *COLA requirement.* Subject to the requirements and exceptions set forth in [paragraphs (b)](/current/title-27/section-7.21#p-7.21\(b\)) and [(c)](/current/title-27/section-7.21#p-7.21\(c\)) of this section, a brewer or wholesaler bottling malt beverages must obtain a certificate of label approval (COLA) covering the malt beverages from TTB prior to bottling the malt beverages or removing the malt beverages from the premises where they were bottled.
(b) *Malt beverages shipped or sold in interstate commerce.* Persons bottling malt beverages (other than malt beverages in customs custody) for shipment, or delivery for sale or shipment, into a State (from outside of that State) are required to obtain a COLA covering those malt beverages only if the laws or regulations of the State require that all malt beverages sold or otherwise disposed of in such State be labeled in conformity with the requirements of [subparts D](/current/title-27/part-7/subpart-D) through [I of this part](/current/title-27/part-7/subpart-I). This requirement applies when the State has either adopted [subparts D](/current/title-27/part-7/subpart-D) through [I of this part](/current/title-27/part-7/subpart-I) in their entireties or has adopted requirements that are identical in effect to those set forth in [subparts D](/current/title-27/part-7/subpart-D) through [I of this part](/current/title-27/part-7/subpart-I). In accordance with [§§ 7.3](/current/title-27/section-7.3) and [7.4](/current/title-27/section-7.4), malt beverages that are not subject to the COLA requirements of this section may still be subject to the substantive labeling provisions of [subparts D](/current/title-27/part-7/subpart-D) through [I of this part](/current/title-27/part-7/subpart-I) to the extent that the State into which the malt beverages are being shipped has similar State laws or regulations.
(c) *Products not shipped or sold in interstate commerce.* Persons bottling malt beverages that will not be shipped or delivered for sale or shipment in interstate or foreign commerce are not required to obtain a COLA or a certificate of exemption from label approval. (Note: A certificate of exemption from label approval is a certificate issued by TTB to cover a wine or distilled spirits product that will not be sold, offered for sale, shipped, delivered for shipment, or otherwise introduced, in interstate or foreign commerce.)
(d) *Evidence of COLA.* Upon request by the appropriate TTB officer, a bottler or importer must provide evidence of label approval for a label used on a container of malt beverages that is subject to the COLA requirements of this part. This requirement may be satisfied by providing original COLAs, photocopies, or electronic copies of COLAs, or records showing the TTB identification number assigned to the approved COLA.
#### § 7.22 Rules regarding certificates of label approval (COLAs) for malt beverages bottled in the United States.
(a) *What a COLA authorizes.* An approved TTB Form 5100.31 authorizes the bottling of malt beverages covered by the certificate of label approval (COLA), as long as the container bears labels identical to the labels appearing on the face of the COLA, or labels with changes authorized by TTB on the COLA or otherwise, (such as through the issuance of public guidance available on the TTB website at *[https://www.ttb.gov](https://www.ttb.gov)*).
(b) *When to obtain a COLA.* The COLA must be obtained prior to bottling. No brewer or wholesaler may bottle malt beverages or remove malt beverages from the premises where bottled unless a COLA has been obtained.
(c) *Application for a COLA.* The bottler may apply for a COLA by submitting an application to TTB on Form 5100.31, in accordance with the instructions on the form. The bottler may apply for a COLA either electronically by accessing TTB's online system, COLAs Online, at *[https://www.ttb.gov](https://www.ttb.gov),* or by submitting the paper form. For procedures regarding the issuance of COLAs, see [part 13 of this chapter](/current/title-27/part-13).
#### § 7.23 \[Reserved]
Requirements for Malt Beverages Imported in Containers
#### § 7.24 Certificates of label approval (COLAs) for malt beverages imported in containers.
(a) *Application requirement.* Any person removing malt beverages in containers from customs custody for consumption must first apply for and obtain a certificate of label approval (COLA) covering the malt beverages from the appropriate TTB officer, or obtain authorization to use the COLA from the person to whom the COLA is issued.
(b) *Release of malt beverages from customs custody.* Malt beverages, imported in containers, are not eligible for release from customs custody for consumption, and no person may remove such malt beverages from customs custody for consumption, unless the person removing the malt beverages has obtained a COLA covering the malt beverages and is able to provide it (either electronically or on paper) upon request. Products imported under another person's COLA are eligible for release only if each bottle or individual container to be imported bears the name (or trade name) and address of the person to whom the COLA was issued by TTB, and only if the importer using the COLA to obtain release of a shipment can substantiate that the person to whom the COLA was issued has authorized its use by the importer.
(c) *Filing requirements.* If filing electronically, the importer must file with U.S Customs and Border Protection (CBP), at the time of filing the customs entry, the TTB-assigned identification number of the valid COLA that corresponds to the label on the product or lot of malt beverages being imported. If the importer is not filing electronically, the importer must provide a copy of the COLA to CBP at the time of entry. In addition, the importer must provide a copy of the applicable COLA, and proof of the COLA holder's authorization if applicable, upon request by the appropriate TTB officer or a customs officer.
(d) *Evidence of COLA.* Upon request by the appropriate TTB officer, an importer must provide evidence of label approval for a label used on a container of malt beverages that is subject to the COLA requirements of this part. This requirement may be satisfied by providing original COLAs, photocopies, or electronic copies of COLAs, or records showing the TTB identification number assigned to the approved COLA.
(e) *Scope of this section.* The COLA requirement imposed by this section applies only to malt beverages that are removed for sale or any other commercial purpose. See [27 CFR 27.49](/current/title-27/section-27.49), [27.74](/current/title-27/section-27.74), and [27.75](/current/title-27/section-27.75) for labeling exemptions applicable to certain imported samples of malt beverages.
(f) *Relabeling in customs custody.* Containers of malt beverages in customs custody that are required to be covered by a COLA but are not labeled in conformity with a COLA must be relabeled, under the supervision and direction of customs officers, prior to their removal from customs custody for consumption.
(g) *State law.* [Paragraphs (a)](/current/title-27/section-7.24#p-7.24\(a\)) through [(c)](/current/title-27/section-7.24#p-7.24\(c\)) of this section apply only if the laws or regulations of the State in which the malt beverages are withdrawn require that all malt beverages sold or otherwise disposed of in such State be labeled in conformity with the requirements of [subparts D](/current/title-27/part-7/subpart-D) through [I of this part](/current/title-27/part-7/subpart-I). A State requires that malt beverages be labeled in conformity with the requirements of [subparts D](/current/title-27/part-7/subpart-D) through [I of this part](/current/title-27/part-7/subpart-I) when the State has either adopted [subparts D](/current/title-27/part-7/subpart-D) through [I of this part](/current/title-27/part-7/subpart-I) in their entireties or has adopted requirements identical in effect to those set forth in subparts D through I in this part. In accordance with [§§ 7.3](/current/title-27/section-7.3) and [7.4](/current/title-27/section-7.4), malt beverages that are not subject to the COLA requirements of this section may still be subject to the substantive labeling provisions of [subparts D](/current/title-27/part-7/subpart-D) through [I of this part](/current/title-27/part-7/subpart-I) to the extent that the State into which the malt beverages are being shipped has similar State law or regulation.
#### § 7.25 Rules regarding certificates of label approval (COLAs) for malt beverages imported in containers.
(a) *What a COLA authorizes.* An approved TTB Form 5100.31 authorizes the use of the labels covered by the certificate of label approval (COLA) on containers of malt beverages, as long as the container bears labels identical to the labels appearing on the face of the COLA, or labels with changes authorized by the form or otherwise authorized by TTB (such as through the issuance of public guidance available on the TTB website at *[https://www.ttb.gov](https://www.ttb.gov)*).
(b) *When to obtain a COLA.* The COLA must be obtained prior to the removal of malt beverages in containers from customs custody for consumption.
(c) *Application for a COLA.* The person responsible for the importation of malt beverages must obtain approval of the labels by submitting an application to TTB on Form 5100.31. A person may apply for a COLA either electronically by accessing TTB's online system, COLAs Online, at *[https://www.ttb.gov](https://www.ttb.gov)* or by submitting the paper form. For procedures regarding the issuance of COLAs, see [part 13 of this chapter](/current/title-27/part-13).
Administrative Rules
#### § 7.27 Presenting certificates of label approval (COLAs) to Government officials.
A certificate holder must present the original or a paper or electronic copy of the appropriate certificate of label approval (COLA) upon the request of any duly authorized representative of the United States Government.
#### § 7.28 Formulas, samples, and documentation.
(a) Prior to or in conjunction with the review of an application for a certificate of label approval (COLA) on TTB Form 5100.31, the appropriate TTB officer may require a bottler or importer to submit a formula, the results of laboratory testing of the malt beverage, or a sample of any malt beverage or ingredients used in producing a malt beverage. After the issuance of a COLA, or with regard to any malt beverage required to be covered by a COLA, the appropriate TTB officer may require a full and accurate statement of the contents of the container.
(b) A formula may be filed electronically by using Formulas Online, or it may be submitted on paper on TTB Form 5100.51. See [§ 7.11](/current/title-27/section-7.11) for more information on forms and Formulas Online.
#### § 7.29 Personalized labels.
(a) *General.* Applicants for label approval may obtain permission from TTB to make certain changes in order to personalize labels without having to resubmit labels for TTB approval. A personalized label is an alcohol beverage label that meets the minimum mandatory label requirements and is customized for customers. Personalized labels may contain a personal message, picture, or other artwork that is specific to the consumer who is purchasing the product. For example, a brewer may offer individual or corporate customers labels that commemorate an event such as a wedding or grand opening.
(b) *Application.* Any person who intends to offer personalized labels must submit a template for the personalized label as part of the application for label approval required under [§§ 7.21](/current/title-27/section-7.21) or [7.24](/current/title-27/section-7.24), and must note on the application a description of the specific personalized information that may change.
(c) *Approval of personalized label.* If the application complies with the regulations, TTB will issue a certificate of label approval (COLA) with a qualification allowing the personalization of labels. The qualification will allow the certificate holder to add or change items on the personalized label such as salutations, names, graphics, artwork, congratulatory dates and names, or event dates without applying for a new COLA. All of these items on personalized labels must comply with the regulations of this part.
(d) *Changes not allowed to personalized labels.* Approval of an application to personalize labels does not authorize the addition of any information that discusses either the alcohol beverage or characteristics of the alcohol beverage or that is inconsistent with or in violation of the provisions of this part or any other applicable provision of law or regulations.
## Subpart C—Alteration of Labels, Relabeling, and Adding Information to Containers
#### § 7.41 Alteration of labels.
(a) *Prohibition.* It is unlawful for any person to alter, mutilate, destroy, obliterate or remove any mark, brand, or label on malt beverages in containers held for sale in interstate or foreign commerce, or held for sale after shipment in interstate or foreign commerce, except as authorized by [§§ 7.42](/current/title-27/section-7.42), [7.43](/current/title-27/section-7.43), or [7.44](/current/title-27/section-7.44), or as otherwise authorized by Federal law.
(b) *Authorized relabeling.* For purposes of the relabeling activities authorized by this subpart, the term “relabel” includes the alteration, mutilation, destruction, obliteration, or removal of any existing mark, brand, or label on the container, as well as the addition of a new label (such as a sticker that adds information about the product or information engraved on the container) to the container, and the replacement of a label with a new label bearing identical information.
(c) *Obligation to comply with other requirements.* Authorization to relabel under this subpart:
(1) In no way authorizes the placement of labels on containers that do not accurately reflect the brand, bottler, identity, or other characteristics of the product;
(2) Does not relieve the person conducting the relabeling operations from any obligation to comply with the regulations in this part and with State or local law: and,
(3) Does not relieve the person conducting the relabeling operations from any obligation to obtain permission from the owner of the brand where otherwise required.
#### § 7.42 Authorized relabeling activities by brewers and importers.
(a) *Relabeling at brewery premises.* A brewer may relabel domestically bottled malt beverages prior to removal from, and after return to bond at, the brewery premises, with labels covered by a certificate of label approval (COLA) without obtaining separate permission from TTB for the relabeling activity, provided that the brewer is the certificate holder (and bottler).
(b) *Relabeling after removal from brewery premises.* A brewer may relabel domestically bottled malt beverages (or direct the relabeling of such malt beverages by an authorized agent) after removal from brewery premises with labels covered by a COLA, without obtaining separate permission from TTB for the relabeling activity, provided that the brewer is the certificate holder (and bottler).
(c) *Relabeling in customs custody.* Under the supervision of U.S. customs officers, imported malt beverages in containers in customs custody may be relabeled without obtaining separate permission from TTB for the relabeling activity. Such containers must bear labels covered by a certificate of label approval (COLA) upon their removal from customs custody for consumption. See [§ 7.24(b)](/current/title-27/section-7.24#p-7.24\(b\)).
(d) *Relabeling after removal from customs custody.* The importer of malt beverages in containers may relabel such malt beverages (or direct the relabeling of such malt beverages by an authorized agent) after removal from customs custody without obtaining separate permission from TTB for the relabeling activity, as long as the labels are covered by a COLA.
#### § 7.43 Relabeling activities that require separate written authorization from TTB.
(a) *General.* Any permittee or brewer holding malt beverages for sale who needs to relabel the containers but is not the original bottler may apply for written permission for the relabeling of malt beverage containers. The appropriate TTB officer may permit relabeling of malt beverages in containers if the facts show that the relabeling is for the purpose of compliance with the requirements of this part or State law, or for the purpose of replacing damaged labels.
(b) *Application.* The written application must include:
(1) Copies of the original and proposed new labels;
(2) The circumstances of the request, including the reason for relabeling;
(3) The number of containers to be relabeled;
(4) The location where the relabeling will take place; and,
(5) The name and address of the person who will be conducting the relabeling operations.
#### § 7.44 Adding a label or other information to a container that identifies the wholesaler, retailer, or consumer.
Any label or other information that identifies the wholesaler, retailer, or consumer of the malt beverage may be added to containers (by the addition of stickers, engraving, stenciling, etc.) without prior approval from TTB and without being covered by a certificate of label approval. Such information may be added before or after the containers are removed from brewery premises or released from customs custody. The information added:
(a) May not violate the provisions of [subparts F](/current/title-27/part-7/subpart-F), [G](/current/title-27/part-7/subpart-G), and [H of this part](/current/title-27/part-7/subpart-H);
(b) May not contain any reference to the characteristics of the product; and
(c) May not be added to the container in such a way that it obscures any other label on the container.
## Subpart D—Label Standards
#### § 7.51 Requirement for firmly affixed labels.
(a) *General rule.* Except as otherwise provided in [paragraph (b)](/current/title-27/section-7.51#p-7.51\(b\)) of this section, any label that is not an integral part of the container must be affixed to the container in such a way that it cannot be removed without thorough application of water or other solvents.
(b) *Exception for keg labels.* The following provisions apply to labels on kegs with a capacity of 5.16 gallons or more that bear mandatory information, as defined by [§ 7.61(a)(5)](/current/title-27/section-7.61#p-7.61\(a\)\(5\)), and are in the form of a keg collar or tap cover, as defined in [§ 7.1](/current/title-27/section-7.1).
(1) Such keg collars or tap covers are considered to be firmly affixed if removal would break or destroy the keg collar or tap cover in such a way that it cannot be reused.
(2) Such keg collars or tap covers are not required to be firmly affixed, provided that the name of the bottler or importer of the malt beverage, as applicable under [§§ 7.66-7.68](/current/title-27/section-7.66), is permanently or semi-permanently stated on the keg in the form of embossing, engraving, stamping, or through the use of a sticker or ink jet method.
(c) This section in no way affects the requirements of [part 16 of this chapter](/current/title-27/part-16) regarding the mandatory health warning statement.
#### § 7.52 Legibility and other requirements for mandatory information on labels.
(a) *Readily legible.* Mandatory information on labels must be readily legible to potential consumers under ordinary conditions.
(b) *Separate and apart.* Subject to the exceptions below, mandatory information on labels, except brand names, must be separate and apart from any additional information.
(1) This does not preclude the addition of brief optional phrases of additional information as part of the class or type designation (such as “premium malt beverage”), the name and address statement (such as “Proudly brewed and bottled by ABC Brewing Co. in Pittsburgh, PA, for over 30 years”), or other information required by [§ 7.63(a)](/current/title-27/section-7.63#p-7.63\(a\)). The statements required by [§ 7.63(b)](/current/title-27/section-7.63#p-7.63\(b\)) may not include additional information.
(2) Mandatory information (other than an aspartame declaration required by [§ 7.63(b)(4)](/current/title-27/section-7.63#p-7.63\(b\)\(4\))) may be contained among other descriptive or explanatory information if the script, type, or printing of the mandatory information is substantially more conspicuous than that of the descriptive or explanatory information.
(c) *Contrasting background.* Mandatory information must appear in a color that contrasts with the background on which it appears, except that if the net contents or the name and address are blown into a glass container, they need not be contrasting. The color of the container and of the malt beverages must be taken into account if the label is transparent or if mandatory label information is etched, engraved, sandblasted, or otherwise carved into the surface of the container or is branded, stenciled, painted, printed, or otherwise directly applied on to the surface of the container. Examples of acceptable contrasts are:
(1) Black lettering appearing on a white or cream background; or
(2) White or cream lettering appearing on a black background.
(d) *Capitalization.* Except for the aspartame statement when required by [§ 7.63(b)(4)](/current/title-27/section-7.63#p-7.63\(b\)\(4\)), which must appear in all capital letters, mandatory information may appear in all capital letters, in all lower case letters, or in mixed-case using both capital and lower-case letters.
#### § 7.53 Type size of mandatory information and alcohol content statements.
(a) All capital and lowercase letters in statements of mandatory information on labels must meet the following type size requirements.
(1) *Minimum type size* —*Containers of more than one-half pint.* All mandatory information (including an alcohol content statement required by [§ 7.63(a)(3)](/current/title-27/section-7.63#p-7.63\(a\)\(3\))) must be in script, type, or printing that is at least two millimeters in height.
(2) *Minimum type size* —*Containers of one-half pint or less.* All mandatory information (including an alcohol content statement required by [§ 7.63(a)(3)](/current/title-27/section-7.63#p-7.63\(a\)\(3\))) must be in script, type, or printing that is at least one millimeter in height.
(b) *Maximum type size for mandatory and optional alcohol content statements* —
(1) *Containers of more than 40 fluid ounces.* An alcohol content statement, whether required or optional under this part, may not appear in script, type, or printing that is more than four millimeters in height on containers of malt beverages of more than 40 fluid ounces.
(2) *Containers of 40 fluid ounces or less.* An alcohol content statement, whether required or optional under this part, may not appear in script, type, or printing that is more than three millimeters in height on containers of malt beverages of 40 fluid ounces or less.
#### § 7.54 Visibility of mandatory information.
Mandatory information on a label must be readily visible and may not be covered or obscured in whole or in part. See [§ 7.62](/current/title-27/section-7.62) for rules regarding packaging of containers (including cartons, coverings, and cases). See [subpart N of this part](/current/title-27/part-7/subpart-N) for regulations pertaining to advertising materials.
#### § 7.55 Language requirements.
(a) *General.* Mandatory information must appear in the English language, with the exception of the brand name and except as provided in [paragraph (c)](/current/title-27/section-7.55#p-7.55\(c\)) of this section.
(b) *Foreign languages.* Additional statements in a foreign language, including translations of mandatory information that appears elsewhere in English on the label, are allowed on labels and containers as long as they do not in any way conflict with, or contradict, the requirements of this part.
(c) *Malt beverages for consumption in the Commonwealth of Puerto Rico.* Mandatory information may be stated solely in the Spanish language on labels of malt beverages bottled for consumption within the Commonwealth of Puerto Rico.
#### § 7.56 Additional information.
Information (other than mandatory information) that is truthful, accurate, and specific, and that does not violate [subpart F](/current/title-27/part-7/subpart-F), [G](/current/title-27/part-7/subpart-G), or [H of this part](/current/title-27/part-7/subpart-H), may appear on labels. Such additional information may not conflict with, modify, qualify or restrict mandatory information in any manner.
## Subpart E—Mandatory Label Information
#### § 7.61 What constitutes a label for purposes of mandatory information.
(a) *Label.* Certain information, as outlined in [§ 7.63](/current/title-27/section-7.63), must appear on a label. When used in this part for purposes of determining where mandatory information must appear, the term “label” includes:
(1) Material affixed to the container, whether made of paper, plastic, metal, or other matter;
(2) For purposes of the net contents statement and the name and address statement only, information blown, embossed, or molded into the container as part of the process of manufacturing the container;
(3) Information etched, engraved, sandblasted, or otherwise carved into the surface of the container;
(4) Information branded, stenciled, painted, printed, or otherwise directly applied on to the surface of the container; and
(5) Information on a keg collar or a tap cover of a keg, only if it includes mandatory information that is not repeated elsewhere on a label firmly affixed to the container and only if it meets the requirements of [§ 7.51](/current/title-27/section-7.51).
(b) *Information appearing elsewhere on the container.* Information appearing on the following parts of the container is subject to all of the restrictions and prohibitions set forth in [subparts F](/current/title-27/part-7/subpart-F), [G](/current/title-27/part-7/subpart-G), and [H of this part](/current/title-27/part-7/subpart-H), but will not satisfy any requirements in this part for mandatory information that must appear on labels:
(1) Material affixed to, or information appearing on, the bottom surface of the container;
(2) Caps, corks, or other closures unless authorized to bear mandatory information by the appropriate TTB officer; and
(3) Foil or heat shrink bottle capsules.
(c) *Materials not firmly affixed to the container.* Any materials that accompany the container to the consumer but are not firmly affixed to the container, including booklets, leaflets, and hang tags, are not “labels” for purposes of this part. Such materials are instead subject to the advertising regulations in [subpart N of this part](/current/title-27/part-7/subpart-N).
#### § 7.62 Packaging (cartons, coverings, and cases).
(a) *General.* The term “packaging” includes any covering, carton, case, carrier, or other packaging of malt beverage containers used for sale at retail, but does not include shipping cartons or cases that are not intended to accompany the container to the consumer.
(b) *Prohibition.* Any packaging of malt beverage containers may not contain any statement, design, device, or graphic, pictorial, or emblematic representation that is prohibited on labels by regulations in [subpart F](/current/title-27/part-7/subpart-F), [G](/current/title-27/part-7/subpart-G), or [H of this part](/current/title-27/part-7/subpart-H).
(c) *Other information on packaging.* The following requirements apply to optional information on packaging.
(1) The packaging may display any information that is not in conflict with the labeling on the container or containers within the packaging.
(2) If the packaging displays a brand name, it must display the brand name in its entirety. For example, if a brand name is required to be modified with additional information on the container or containers within the packaging, the packaging must also display the same modifying language.
(3) If the packaging displays a class or type designation it must be identical to the class or type designation appearing on the container or containers within the packaging. For example, if the packaging displays a class or type designation for a specialty product for which a statement of composition is required on the container, the packaging must include the statement of composition as well.
(d) *Labeling of containers within the packaging.* The container or containers within the packaging are subject to all labeling requirements of this part, including mandatory labeling information requirements, regardless of whether the packaging bears such information.
#### § 7.63 Mandatory label information.
(a) *Mandatory information.* Malt beverage containers must bear a label or labels (as defined in [§ 7.61(a)](/current/title-27/section-7.61#p-7.61\(a\))) containing the following information:
(1) Brand name, in accordance with [§ 7.64](/current/title-27/section-7.64);
(2) Class, type, or other designation, in accordance with [subpart I of this part](/current/title-27/part-7/subpart-I);
(3) Alcohol content, in accordance with [§ 7.65](/current/title-27/section-7.65), for malt beverages that contain any alcohol derived from added nonbeverage flavors or other added nonbeverage ingredients (other than hops extract) containing alcohol;
(4) Name and address of the bottler or importer (which may be blown, embossed, or molded into the container as part of the process of manufacturing the container), in accordance with [§ 7.66](/current/title-27/section-7.66), [7.67](/current/title-27/section-7.67), or [7.68](/current/title-27/section-7.68), as applicable; and
(5) Net contents (which may be blown, embossed, or molded into the container as part of the process of manufacturing the container), in accordance with [§ 7.70](/current/title-27/section-7.70).
(b) *Disclosure of certain ingredients.* Certain ingredients must be declared on a label without the inclusion of any additional information as part of the statement as follows:
(1) *FD\&C Yellow No. 5.* If a malt beverage contains the coloring material FD\&C Yellow No. 5, the label must include a statement to that effect, such as “FD\&C Yellow No. 5” or “Contains FD\&C Yellow No. 5.”
(2) *Cochineal extract or carmine.* If a malt beverage contains the color additive cochineal extract or the color additive carmine, the label must include a statement to that effect, using the respective common or usual name (such as, “contains cochineal extract” or “contains carmine”). This requirement applies to labels when either of the coloring materials is used in a malt beverage that is removed from bottling premises or from customs custody on or after April 16, 2013.
(3) *Sulfites.* If a malt beverage contains 10 or more parts per million of sulfur dioxide or other sulfiting agent(s) measured as total sulfur dioxide, the label must include a statement to that effect. Examples of acceptable statements are “Contains sulfites” or “Contains (a) sulfiting agent(s)” or a statement identifying the specific sulfiting agent. The alternative terms “sulphites” or “sulphiting” may be used.
(4) *Aspartame.* If the malt beverage contains aspartame, the label must include the following statement, in capital letters, separate and apart from all other information: “PHENYLKETONURICS: CONTAINS PHENYLALANINE.”
#### § 7.64 Brand name.
(a) *Requirement.* The malt beverage label must include a brand name. If the malt beverage is not sold under a brand name, then the name of the bottler or importer, as applicable, appearing in the name and address statement is treated as the brand name.
(b) *Misleading brand names.* Labels may not include any misleading brand names. A brand name is misleading if it creates (by itself or in association with other printed or graphic matter) any erroneous impression or inference as to the age, origin, identity, or other characteristics of the malt beverage. A brand name that would otherwise be misleading may be qualified with the word “brand” or with some other qualification if the appropriate TTB officer determines that the qualification dispels any misleading impression that might otherwise be created.
#### § 7.65 Alcohol content.
(a) *General.* Alcohol content and the percentage and quantity of the original gravity or extract may be stated on any malt beverage label, unless prohibited by State law. When alcohol content is stated, and the manner of statement is not required under State law, it must be stated as prescribed in [paragraph (b)](/current/title-27/section-7.65#p-7.65\(b\)) of this section.
(b) *How the alcohol content must be expressed.* The following rules apply to both mandatory and optional statements of alcohol content.
(1) A statement of alcohol content must be expressed as a percentage of alcohol by volume. Other truthful, accurate, and specific factual representations of alcohol content, such as alcohol by weight, may be made, as long as they appear together with, and as part of, the statement of alcohol content as a percentage of alcohol by volume.
(2) For malt beverages containing one half of one percent (0.5 percent) or more alcohol by volume, statements of alcohol content must be expressed to the nearest one-tenth of a percentage point, subject to the tolerance permitted by [paragraph (c)](/current/title-27/section-7.65#p-7.65\(c\)) of this section. For malt beverages containing less than 0.5 percent alcohol by volume, alcohol content may be expressed either to the nearest one-tenth or the nearest one-hundredth of a percentage point, and such statements are not subject to any tolerance. See [paragraph (e)](/current/title-27/section-7.65#p-7.65\(e\)) of this section for the rules applicable to such statements.
(3)
(i) The alcohol content statement must be expressed in one of the following formats:
(A) “Alcohol percent by volume”;
(B) “percent alcohol by volume”; or
(C) “Alcohol by volume: percent.”
(ii) Any of the words or symbols may be enclosed in parentheses and authorized abbreviations may be used with or without a period. The alcohol content statement does not have to appear with quotation marks.
(4) The statements listed in [paragraph (b)(3)](/current/title-27/section-7.65#p-7.65\(b\)\(3\)) of this section must appear as shown, except that the following abbreviations may be used: Alcohol may be abbreviated as “alc”; percent may be represented by the percent symbol “%”; alcohol and volume may be separated by a slash “/” in lieu of the word “by”; and volume may be abbreviated as “vol”.
(5) *Examples.* The following are examples of alcohol content statements that comply with the requirements of this part:
(i) “4.2% alc/vol”;
(ii) “Alc. 4.0 percent by vol.”;
(iii) “Alc 4% by vol”; and
(iv) “5.9% Alcohol by Volume.”
(c) *Tolerances.* Except as provided by [paragraph (d)](/current/title-27/section-7.65#p-7.65\(d\)) of this section, a tolerance of 0.3 percentage points will be permitted, either above or below the stated alcohol content, for malt beverages containing 0.5 percent or more alcohol by volume. However, any malt beverage that is labeled as containing 0.5 percent or more alcohol by volume may not contain less than 0.5 percent alcohol by volume, regardless of any tolerance. The tolerance provided by this paragraph does not apply in determining compliance with the provisions of [§ 7.5](/current/title-27/section-7.5) regarding the percentage of alcohol derived from added nonbeverage flavors and other nonbeverage ingredients containing alcohol.
(d) *Low alcohol and reduced alcohol.* The terms “low alcohol” or “reduced alcohol” may be used only on labels of malt beverages containing less than 2.5 percent alcohol by volume. The actual alcohol content may not equal or exceed 2.5 percent alcohol by volume, regardless of any tolerance permitted by [paragraph (c)](/current/title-27/section-7.65#p-7.65\(c\)) of this section.
(e) *Non-alcoholic.* The term “non-alcoholic” may be used on labels of malt beverages only if the statement “contains less than 0.5 percent (or .5%) alcohol by volume” appears immediately adjacent to it, in readily legible printing, and on a completely contrasting background. No tolerances are permitted for malt beverages labeled as “non-alcoholic” and containing less than 0.5 percent alcohol by volume. A malt beverage may not be labeled with an alcohol content of 0.0 percent alcohol by volume, unless it is also labeled as “alcohol free” in accordance with [paragraph (f)](/current/title-27/section-7.65#p-7.65\(f\)) of this section, and contains no alcohol.
(f) *Alcohol free.* The term “alcohol free” may be used only on malt beverages containing no alcohol. No tolerances are permitted for “alcohol free” malt beverages.
#### § 7.66 Name and address for domestically bottled malt beverages that were wholly fermented in the United States.
(a) *General.* Domestically bottled malt beverages that were wholly fermented in the United States and contain no imported malt beverages must be labeled in accordance with this section. (See [§§ 7.67](/current/title-27/section-7.67) and [7.68](/current/title-27/section-7.68) for name and address requirements applicable to malt beverages that are not wholly fermented in the United States.)
(b) *Mandatory statement.* A label on the container must state the name and address of the bottler, in accordance with the rules set forth in this section.
(c) *Form of address.* The address consists of the city and State and must be consistent with the information reflected on the brewer's notice required under [part 25 of this chapter](/current/title-27/part-25). Addresses may, but are not required to, include additional information such as street names, counties, zip codes, phone numbers, and website addresses. The postal abbreviation of the State name may be used; for example, California may be abbreviated as CA.
(d) *Optional statements.* The bottler may, but is not required to, be identified by a phrase describing the function performed by that person, such as “bottled by,” “canned by,” “packed by,” or “filled by,” followed by the name and address of the bottler. If one person performs more than one function, the label may so indicate (for example, “brewed and bottled by XYZ Brewery.”) If different functions are performed by more than one person, statements on the label may not create the misleading impression that the different functions were performed by the same person. The appropriate TTB officer may require specific information about the functions performed if necessary to prevent a misleading impression on the label.
(e) *Principal place of business.* The bottler's principal place of business may be shown in lieu of the actual place where the malt beverage was bottled if the address shown is a location where a bottling operation takes place. The appropriate TTB officer may disapprove the listing of a principal place of business if its use would create a false or misleading impression as to the geographic origin of the malt beverage. See [27 CFR 25.141](/current/title-27/section-25.141) and [25.142](/current/title-27/section-25.142) for coding requirements applicable in these circumstances.
(f) *Multiple breweries under the same ownership.* If two or more breweries are owned or operated by the same person, the place where the malt beverage is bottled within the meaning of [paragraph (a)](/current/title-27/section-7.66#p-7.66\(a\)) of this section may be shown in one of the following two ways:
(1) *Listing of where bottled.* The place where the malt beverage is bottled may be shown as the only location on the label; or
(2) *Listing of all brewer's locations.* The place where the malt beverage is bottled may appear in a listing of the locations of breweries owned by that person if the place of bottling is not given less emphasis than any of the other locations. See [27 CFR 25.141](/current/title-27/section-25.141) and [25.142](/current/title-27/section-25.142) for coding requirements applicable in these circumstances.
(g) *Malt beverages bottled for another person.*
(1) If malt beverages are bottled for another person, the label may state, in addition to (but not in lieu of) the name and address of the bottler, the name and address of such other person, immediately preceded by the words “brewed and bottled for” or “bottled for” or another similar appropriate phrase. Such statements must clearly indicate the relationship between the two persons (for example, contract brewing).
(2) If the same brand of malt beverage is brewed and bottled by two or more breweries that are not under the same ownership, the label for each brewery may set forth all the locations where bottling takes place, as long as the label uses the actual location (and not the principal place of business) and as long as the nature of the arrangement is clearly set forth.
(h) *Use of trade names.* The name of the person appearing on the label may be the trade name or the operating name, as long as it is identical to a trade or operating name appearing on the brewer's notice.
#### § 7.67 Name and address for domestically bottled malt beverages that were bottled after importation.
(a) *General.* This section applies to domestically bottled malt beverages that were bottled after importation. See [§ 7.68](/current/title-27/section-7.68) for name and address requirements applicable to imported malt beverages that are imported in a container. See [19 CFR parts 102](/current/title-19/part-102) and [134](/current/title-19/part-134) for U.S. Customs and Border Protection country of origin marking requirements.
(b) *Malt beverages that were subject to blending or other production activities after importation.* Malt beverages that were subject, after importation, to blending or other production may not bear an “imported by” statement on the label, but must instead be labeled in accordance with the rules set forth in [§ 7.66](/current/title-27/section-7.66) with regard to mandatory and optional labeling statements.
(c) *Malt beverages bottled after importation without blending or other production activities.* The label on malt beverages that are bottled without being subject to blending or other production activities in the United States after the malt beverages were imported must state the words “imported by” or a similar appropriate phrase, followed by the name and address of the importer. The label must also state the words “bottled by” or “packed by,” followed by the name and address of the bottler, except that the following phrases are acceptable in lieu of the name and address of the bottler under the circumstances set forth below:
(1) If the malt beverages were bottled for the person responsible for the importation, the words “imported and bottled (canned, packed or filled) in the United States for” (or a similar appropriate phrase) followed by the name and address of the principal place of business in the United States of the person responsible for the importation;
(2) If the malt beverages were bottled by the person responsible for the importation, the words “imported and bottled (canned, packed or filled) in the United States by” (or a similar appropriate phrase) followed by the name and address of the principal place of business in the United States of the person responsible for the importation;
(3) In the situations set forth in [paragraphs (c)(1)](/current/title-27/section-7.67#p-7.67\(c\)\(1\)) and [(2)](/current/title-27/section-7.67#p-7.67\(c\)\(2\)) of this section, the address shown on the label may be that of the principal place of business of the importer who is also the bottler, provided that the address shown is a location where bottling takes place.
(d) *Use of trade names.* A trade name may be used if the trade name is listed on the importer's basic permit.
#### § 7.68 Name and address for malt beverages that are imported in a container.
(a) *General.* This section applies to malt beverages that are imported in a container, as defined in [§ 7.1](/current/title-27/section-7.1). See [§ 7.67](/current/title-27/section-7.67) for rules regarding name and address requirements applicable to malt beverages that are domestically bottled after importation. See [19 CFR parts 102](/current/title-19/part-102) and [134](/current/title-19/part-134) for U.S. Customs and Border Protection country of origin marking requirements.
(b) *Mandatory labeling statement.* The label on malt beverages imported in containers, as defined in [§ 7.1](/current/title-27/section-7.1), must state the words “imported by” or a similar appropriate phrase, followed by the name and address of the importer.
(1) For purposes of this section, the importer is the holder of the importer's basic permit that either makes the original customs entry or is the person for whom such entry is made, or the holder of the importer's basic permit that is the agent, distributor, or franchise holder for the particular brand of imported alcohol beverages and that places the order abroad.
(2) The address of the importer must be stated as the city and State of the principal place of business and must be consistent with the address reflected on the importer's basic permit. Addresses may, but are not required to, include additional information such as street names, counties, zip codes, phone numbers, and website addresses. The postal abbreviation of the State name may be used; for example, California may be abbreviated as CA.
#### § 7.69 Country of origin.
For U.S. Customs and Border Protection (CBP) rules regarding country of origin marking requirements, see the CBP regulations at [19 CFR parts 102](/current/title-19/part-102) and [134](/current/title-19/part-134).
#### § 7.70 Net contents.
The following rules apply to the net contents statement required by [§ 7.63](/current/title-27/section-7.63).
(a) The volume of malt beverage in the container must appear on a label as a net contents statement using the following measures:
(1) If less than one pint, the net contents must be stated in fluid ounces or fractions of a pint.
(2) If one pint, one quart, or one gallon, the net contents must be so stated.
(3) If more than one pint, but less than one quart, the net contents must be stated in fractions of a quart, or in pints and fluid ounces.
(4) If more than one quart, but less than one gallon, the net contents must be stated in fractions of a gallon, or in quarts, pints, and fluid ounces.
(5) If more than one gallon, the net contents must be stated in gallons and fractions thereof.
(b) All fractions must be expressed in their lowest denominations.
(c) Metric measures may be used in addition to, but not in lieu of, the U.S. customary units of measurement and must appear in the same field of vision.
## Subpart F—Restricted Labeling Statements
#### § 7.81 General.
(a) *Application.* The labeling practices, statements, and representations in this subpart may be used on malt beverage labels only when used in compliance with this subpart. In addition, if any of the practices, statements, or representations in this subpart are used elsewhere on containers or in packaging, they must comply with the requirements of this subpart. For purposes of this subpart:
(1) The term “label” includes all labels on malt beverage containers on which mandatory information may appear, as set forth in [§ 7.61(a)](/current/title-27/section-7.61#p-7.61\(a\)), as well as any other label on the container.
(2) The term “container” includes all parts of the malt beverage container, including any part of a malt beverage container on which mandatory information may appear, as well as those parts of the container on which information does not satisfy mandatory labeling requirements, as set forth in [§ 7.61(b)](/current/title-27/section-7.61#p-7.61\(b\)).
(3) The term “packaging” includes any carton, case, carrier, individual covering, or other packaging of such containers used for sale at retail, but does not include shipping cartons or cases that are not intended to accompany the container to the consumer.
(b) *Statement or representation.* For purposes of this subpart, the term “statement or representation” includes any statement, design, device, or representation, and includes pictorial or graphic designs or representations as well as written ones. The term “statement or representation” includes explicit and implicit statements and representations.
### Food Allergen Labeling
#### § 7.82 Voluntary disclosure of major food allergens.
(a) *Definitions.* For purposes of this section, the following terms have the meanings indicated.
(1) *Major food allergen* means any of the following:
(i) Milk, egg, fish (for example, bass, flounder, or cod), Crustacean shellfish (for example, crab, lobster, or shrimp), tree nuts (for example, almonds, pecans, or walnuts), wheat, peanuts, and soybeans; or
(ii) A food ingredient that contains protein derived from a food specified in [paragraph (a)(1)(i)](/current/title-27/section-7.82#p-7.82\(a\)\(1\)\(i\)) of this section, except:
(A) Any highly refined oil derived from a food specified in [paragraph (a)(1)(i)](/current/title-27/section-7.82#p-7.82\(a\)\(1\)\(i\)) of this section and any ingredient derived from such highly refined oil; or
(B) A food ingredient that is exempt from major food allergen labeling requirements pursuant to a petition for exemption approved by the Food and Drug Administration (FDA) under [21 U.S.C. 343(w)(6)](https://www.govinfo.gov/link/uscode/21/343) or pursuant to a notice submitted to the FDA under [21 U.S.C. 343(w)(7)](https://www.govinfo.gov/link/uscode/21/343), provided that the food ingredient meets the terms or conditions, if any, specified for that exemption.
(2) *Name of the food source from which each major food allergen is derived* means the name of the food as listed in [paragraph (a)(1)(i)](/current/title-27/section-7.82#p-7.82\(a\)\(1\)\(i\)) of this section, except that:
(i) In the case of a tree nut, it means the name of the specific type of nut (for example, almonds, pecans, or walnuts);
(ii) In the case of Crustacean shellfish, it means the name of the species of Crustacean shellfish (for example, crab, lobster, or shrimp); and
(iii) The names “egg” and “peanuts,” as well as the names of the different types of tree nuts, may be expressed in either the singular or plural form, and the names “soy,” “soybean,” or “soya” may be used instead of “soybeans.”
(b) *Voluntary labeling standards.* Major food allergens used in the production of a malt beverage product may, on a voluntary basis, be declared on a label. However, if any one major food allergen is voluntarily declared, all major food allergens used in production of the malt beverage product, including major food allergens used as fining or processing agents, must be declared, except when covered by a petition for exemption approved by the appropriate TTB officer under [§ 7.83](/current/title-27/section-7.83). The major food allergens declaration must consist of the word “Contains” followed by a colon and the name of the food source from which each major food allergen is derived (for example, “Contains: egg”).
(c) *Cross reference.* For mandatory labeling requirements applicable to malt beverage products containing FD\&C Yellow No. 5, sulfites, aspartame, and cochineal extract or carmine, see [§ 7.63(b)](/current/title-27/section-7.63#p-7.63\(b\)).
#### § 7.83 Petitions for exemption from major food allergen labeling.
(a) *Submission of petition.* Any person may petition the appropriate TTB officer to exempt a particular product or class of products from the labeling requirements of [§ 7.82](/current/title-27/section-7.82). The burden is on the petitioner to provide scientific evidence (as well as the analytical method used to produce the evidence) that demonstrates that the finished product or class of products, as derived by the method specified in the petition, either:
(1) Does not cause an allergic response that poses a risk to human health; or
(2) Does not contain allergenic protein derived from one of the foods identified in [§ 7.82(a)(1)(i)](/current/title-27/section-7.82#p-7.82\(a\)\(1\)\(i\)), even though a major food allergen was used in production.
(b) *Decision on petition.* TTB will approve or deny a petition for exemption submitted under [paragraph (a)](/current/title-27/section-7.83#p-7.83\(a\)) of this section in writing within 180 days of receipt of the petition. If TTB does not provide a written response to the petitioner within that 180-day period, the petition will be deemed denied unless an extension of time for decision is mutually agreed upon by the appropriate TTB officer and the petitioner. TTB may confer with the Food and Drug Administration (FDA) on petitions for exemption, as appropriate and as FDA resources permit. TTB may require the submission of product samples and other additional information in support of a petition; however, unless required by TTB, the submission of samples or additional information by the petitioner after submission of the petition will be treated as the withdrawal of the initial petition and the submission of a new petition. An approval or denial under this section will constitute final agency action.
(c) *Resubmission of a petition.* After a petition for exemption is denied under this section, the petitioner may resubmit the petition along with supporting materials for reconsideration at any time. TTB will treat this submission as a new petition.
(d) *Availability of information* —
(1) *General.* TTB will promptly post to its website (*[https://www.ttb.gov](https://www.ttb.gov)*) all petitions received under this section as well as TTB's responses to those petitions. Any information submitted in support of the petition that is not posted to the TTB website will be available to the public pursuant to the Freedom of Information Act ([5 U.S.C. 552](https://www.govinfo.gov/link/uscode/5/552)), except where a request for confidential treatment is granted under [paragraph (d)(2)](/current/title-27/section-7.83#p-7.83\(d\)\(2\)) of this section.
(2) *Requests for confidential treatment of business information.* A person who provides trade secrets or other commercial or financial information in connection with a petition for exemption under this section may request that TTB give confidential treatment to that information. A failure to request confidential treatment at the time the information in question is submitted to TTB will constitute a waiver of confidential treatment. A request for confidential treatment of information under this section must conform to the following standards:
(i) The request must be in writing;
(ii) The request must clearly identify the information to be kept confidential;
(iii) The request must relate to information that constitutes trade secrets or other confidential, commercial, or financial information regarding the business transactions of an interested person, the disclosure of which would cause substantial harm to the competitive position of that person;
(iv) The request must set forth the reasons why the information should not be disclosed, including the reasons the disclosure of the information would prejudice the competitive position of the interested person; and
(v) The request must be supported by a signed statement by the interested person, or by an authorized officer or employee of that person, certifying that the information in question is a trade secret or other confidential, commercial, or financial information and that the information is not already in the public domain.
### Production and Other Claims
#### § 7.84 Use of the term “organic.”
Use of the term “organic” is permitted if any such use complies with the United States Department of Agriculture (USDA) National Organic Program rules ([7 CFR part 205](/current/title-7/part-205)), as interpreted by the USDA.
#### §§ 7.85-7.87 \[Reserved]
## Subpart G—Prohibited Labeling Practices
#### § 7.101 General.
(a) *Application.* The prohibitions set forth in this subpart apply to any malt beverage label, container, or packaging. For purposes of this subpart:
(1) The term “label” includes all labels on malt beverage containers on which mandatory information may appear, as set forth in [§ 7.61(a)](/current/title-27/section-7.61#p-7.61\(a\)), as well as any other label on the container;
(2) The term “container” includes all parts of the malt beverage container, including any part of a malt beverage container on which mandatory information may appear, as well as those parts of the container on which information does not satisfy mandatory labeling requirements, as set forth in [§ 7.61(b)](/current/title-27/section-7.61#p-7.61\(b\)); and
(3) The term “packaging” includes any carton, case, carrier, individual covering, or other packaging of such containers used for sale at retail but does not include shipping cartons or cases that are not intended to accompany the container to the consumer.
(b) *Statement or representation.* For purposes of the practices in this subpart, the term “statement or representation” includes any statement, design, device, or representation, and includes pictorial or graphic designs or representations as well as written ones. The term “statement or representation” includes explicit and implicit statements and representations.
#### § 7.102 False or untrue statements.
Malt beverage labels, containers, or packaging may not contain any statement or representation that is false or untrue in any particular.
#### § 7.103 Obscene or indecent depictions.
Malt beverage labels, containers, or packaging may not contain any statement or representation that is obscene or indecent.
## Subpart H—Labeling Practices That Are Prohibited if They Are Misleading
#### § 7.121 General.
(a) *Application.* The labeling practices that are prohibited if misleading set forth in this subpart apply to any malt beverage label, container, or packaging. For purposes of this subpart:
(1) The term “label” includes all labels on malt beverage containers on which mandatory information may appear, as set forth in [§ 7.61(a)](/current/title-27/section-7.61#p-7.61\(a\)), as well as any other label on the container;
(2) The term “container” includes all parts of the malt beverage container, including any part of a malt beverage container on which mandatory information may appear, as well as those parts of the container on which information does not satisfy mandatory labeling requirements, as set forth in [§ 7.61(b)](/current/title-27/section-7.61#p-7.61\(b\)); and
(3) The term “packaging” includes any carton, case, carrier, individual covering, or other packaging of such containers used for sale at retail but does not include shipping cartons or cases that are not intended to accompany the container to the consumer.
(b) *Statement or representation.* For purposes of this subpart, the term “statement or representation” includes any statement, design, device, or representation, and includes pictorial or graphic designs or representations as well as written ones. The term “statement or representation” includes explicit and implicit statements and representations.
#### § 7.122 Misleading statements or representations.
(a) *General prohibition.* Malt beverage labels, containers, or packaging may not contain any statement or representation, irrespective of falsity, that is misleading to consumers as to the age, origin, identity, or other characteristics of the malt beverage, or with regard to any other material factor.
(b) *Ways in which statements or representations may be found to be misleading.*
(1) A statement or representation is prohibited, irrespective of falsity, if it directly creates a misleading impression or if it does so indirectly through ambiguity, omission, inference, or by the addition of irrelevant, scientific, or technical matter. For example, an otherwise truthful statement may be misleading because of the omission of material information, the disclosure of which is necessary to prevent the statement from being misleading.
(2) All claims, whether implicit or explicit, must have a reasonable basis in fact. Any claim on malt beverage labels, containers, or packaging that does not have a reasonable basis in fact or cannot be adequately substantiated upon the request of the appropriate TTB officer is considered misleading.
#### § 7.123 Guarantees.
Malt beverage labels, containers, or packaging may not contain any statement relating to guarantees if the appropriate TTB officer finds it is likely to mislead the consumer. However, money-back guarantees are not prohibited.
#### § 7.124 Disparaging statements.
(a) *General.* Malt beverage labels, containers, or packaging may not contain any false or misleading statement that explicitly or implicitly disparages a competitor's product.
(b) *Truthful and accurate comparisons.* This section does not prevent truthful and accurate comparisons between products (such as “Our ale contains more hops than Brand X”) or statements of opinion (such as “We think our beer tastes better than any other beer on the market”).
#### § 7.125 Tests or analyses.
Malt beverage labels, containers, or packaging may not contain any statement or representation of or relating to analyses, standards, or tests, whether or not it is true, that is likely to mislead the consumer. An example of a misleading statement is “tested and approved by our research laboratories” if the testing and approval does not in fact have any significance.
#### § 7.126 Depictions of government symbols.
*Representations of the armed forces or flags.* Malt beverage labels, containers, or packaging may not show an image of any government's flag or any representation related to the armed forces of the United States if the representation, standing alone or considered together with any additional language or symbols on the label, creates a false or misleading impression that the product was endorsed by, made by, used by, or made under the supervision of the government represented by that flag or by the armed forces of the United States. This section does not prohibit the use of a flag as part of a claim of American origin or another country of origin.
#### § 7.127 \[Reserved]
#### § 7.128 Claims related to distilled spirits.
(a) *General.* Except as provided in [paragraph (b)](/current/title-27/section-7.128#p-7.128\(b\)) of this section, containers of malt beverages, or any labels on such containers, or any carton, case, or individual covering of such containers, used for sale at retail, or any written, printed, graphic, or other material accompanying such containers to the consumer, must not contain any statement, design, device, or representation that tends to create a false or misleading impression that the malt beverage contains distilled spirits or is a distilled spirits product.
(b) *Exceptions.* This section does not prohibit:
(1) A truthful and accurate statement of alcohol content, in conformity with [§ 7.65](/current/title-27/section-7.65);
(2) The use of a brand name of a distilled spirits product as a malt beverage brand name, provided that the overall label does not create a misleading impression as to the identity of the product;
(3) The use of a cocktail name as a brand name or a distinctive or fanciful name of a malt beverage, provided that the overall labeling does not present a misleading impression about the identity of the product; or
(4) The use of truthful and accurate statements about the production of the malt beverage as part of a statement of composition or otherwise, such as “aged in whisky barrels,” as long as such statements do not create a misleading impression as to the identity of the product.
#### § 7.129 Health-related statements.
(a) *Definitions.* When used in this section, the following terms have the meaning indicated:
(1) *Health-related statement* means any statement related to health (other than the warning statement required under [part 16 of this chapter](/current/title-27/part-16)) and includes statements of a curative or therapeutic nature that, expressly or by implication, suggest a relationship between the consumption of alcohol, malt beverages, or any substance found within the malt beverage, and health benefits or effects on health. The term includes both specific health claims and general references to alleged health benefits or effects on health associated with the consumption of alcohol, a malt beverage, or any substance found within the malt beverage product, as well as health-related directional statements. The term also includes statements and claims that imply that a physical or psychological sensation results from consuming the alcohol beverage product, as well as statements and claims of nutritional value (for example, statements of vitamin content). Numerical statements of the calorie, carbohydrate, protein, and fat content of the product do not constitute claims of nutritional value.
(2) *Specific health claim* means a type of health-related statement that, expressly or by implication, characterizes the relationship of malt beverages, alcohol, or any substance found within the malt beverage, to a disease or health-related condition. Implied specific health claims include statements, symbols, vignettes, or other forms of communication that suggest, within the context in which they are presented, that a relationship exists between alcohol, malt beverages, or any substance found within the malt beverage, and a disease or health-related condition.
(3) *Health-related directional statement* means a type of health-related statement that directs or refers consumers to a third party or other source for information regarding the effects on health of malt beverage or alcohol consumption.
(b) *Rules for malt beverage labels, containers, and packaging* —
(1) *Health-related statements.* In general, malt beverage labels, containers, or packaging may not contain any health-related statement that is untrue in any particular or tends to create a misleading impression as to the effects on health of alcohol consumption. TTB will evaluate such statements on a case-by-case basis and may require as part of the health-related statement a disclaimer or some other qualifying statement to dispel any misleading impression conveyed by the health-related statement.
(2) *Specific health claims.*
(i) TTB will consult with the Food and Drug Administration (FDA) as needed on the use of specific health claims on labels, containers, or packaging. If FDA determines that the use of such a claim is a drug claim that is not in compliance with the requirements of the Federal Food, Drug, and Cosmetic Act, TTB will not approve the use of that specific health claim on the malt beverage label.
(ii) TTB will approve the use of a specific health claim on a malt beverage label only if the claim is truthful and adequately substantiated by scientific or medical evidence; is sufficiently detailed and qualified with respect to the categories of individuals to whom the claim applies; adequately discloses the health risks associated with both moderate and heavier levels of alcohol consumption; and outlines the categories of individuals for whom any levels of alcohol consumption may cause health risks. This information must appear as part of the specific health claim.
(3) *Health-related directional statements.* A health-related directional statement is presumed misleading unless it:
(i) Directs consumers in a neutral or other non-misleading manner to a third party or other source for balanced information regarding the effects on health of malt beverage or alcohol consumption; and
(ii)
(A) Includes as part of the health-related directional statement the following disclaimer: “This statement should not encourage you to drink or to increase your alcohol consumption for health reasons”; or
(B) Includes as part of the health-related directional statement some other qualifying statement that the appropriate TTB officer finds is sufficient to dispel any misleading impression conveyed by the health-related directional statement.
#### § 7.130 Appearance of endorsement.
(a) *General.* Malt beverage labels, containers, or packaging may not include the name, or the simulation or abbreviation of the name, of any living individual of public prominence or an existing private or public organization, or any graphic, pictorial, or emblematic representation of the individual or organization if its use is likely to lead a consumer to falsely believe that the product has been endorsed, made, or used by, or produced for, or under the supervision of, or in accordance with the specifications of, such individual or organization. This section does not prohibit the use of such names where the individual or organization has provided authorization for their use.
(b) *Disclaimers.* Statements or other representations do not violate this section if, taken as a whole, they create no misleading impression as to an implied endorsement either because of the context in which they are presented or because of the use of an adequate disclaimer.
(c) *Exception.* This section does not apply to the use of the name of any person engaged in business as a producer, importer, bottler, packer, wholesaler, retailer, or warehouseman, of malt beverages. This section also does not apply to the use by any industry member of a trade or brand name that is the name of any living individual of public prominence, or existing private or public organization, provided such trade or brand name was used by the industry member or its predecessors in interest prior to August 29, 1935.
#### § 7.131 \[Reserved]
#### § 7.132 \[Reserved]
## Subpart I—Classes and Types of Malt Beverages
#### § 7.141 Class and type.
(a) *Products known to the trade.* The class of the malt beverage must be stated on the label (see [§ 7.63](/current/title-27/section-7.63)). The type of the malt beverage may be stated, but is not required to appear on the label. Statements of class and type must conform to the designation of the product as known to the trade. All parts of the designation must appear together.
(b) *Malt beverage specialty products* —
(1) *General.* A malt beverage specialty product is a malt beverage that does not fall under any of the class designations set forth in [§§ 7.142](/current/title-27/section-7.142) through [7.144](/current/title-27/section-7.144) and is not known to the trade under a particular designation, usually because of the addition of ingredients such as colorings, flavorings, or food materials or the use of certain types of production processes where the appropriate TTB officer has not determined that such ingredients or processes are generally recognized as traditional in the production of a fermented beverage designated as “beer,” “ale,” “porter,” “stout,” “lager,” or “malt liquor.”
(2) *Designation.* A malt beverage specialty product must be designated with a distinctive or fanciful name, together with a statement of the composition of the product, in accordance with [§ 7.147](/current/title-27/section-7.147). This statement will be considered the class designation for the purposes of this part. All parts of the designation must appear together.
#### § 7.142 Class designations.
The following class designations may be used in accordance with this section:
(a) Any malt beverage, as defined in [§ 7.1](/current/title-27/section-7.1), may be designated simply as a “malt beverage.”
(b)
(1) The class designations “beer,” “ale,” “porter,” “stout,” “lager,” and “malt liquor” may be used to designate malt beverages that contain at least 0.5 percent alcohol by volume and that conform to the trade understanding of those designations. These designations may be preceded or followed by descriptions of the color of the product (such as “amber,” “brown,” “red,” or “golden”) as well as descriptive terms such as “dry,” “export,” “cream,” and “pale.”
(2) No product other than a malt beverage fermented at a comparatively high temperature, possessing the characteristics generally attributed to “ale,” “porter,” or “stout” and produced without the use of coloring or flavoring materials (other than those recognized in standard brewing practices) may bear any of these class designations.
#### § 7.143 Class and type—special rules.
The following special rules apply to specified class and type designations:
(a) *Reconstituted malt beverages.* Malt beverages that have been concentrated by the removal of water therefrom and reconstituted by the addition of water and carbon dioxide must for the purpose of this part be labeled in the same manner as malt beverages which have not been concentrated and reconstituted, except that there must appear immediately adjacent to, and as a part of, the class designation the statement “PRODUCED FROM\_\_\_\_ \_\_CONCENTRATE” (the blank to be filled in with the appropriate class designation). All parts of the class designation must appear in lettering of substantially the same size and kind. However, ice beers, described in [paragraph (c)](/current/title-27/section-7.143#p-7.143\(c\)) of this section, which are produced by the removal of less than 0.5 percent of the volume of the beer in the form of ice crystals and that retain beer character are not considered concentrated.
(b) *Half and half.* No product may be designated with the type designation “half and half” unless it is in fact composed of equal parts of two classes of malt beverages, the names of which are conspicuously stated immediately adjacent to the designation “half and half” (for example, “Half and Half, Porter and Stout”). This does not preclude the use of terms such as “half and half” as part of a distinctive or fanciful name that refers to flavors added to a malt beverage designated in accordance with trade understanding or with a statement of composition.
(c) *Ice beer.* Malt beverages supercooled during the brewing process to form ice crystals may be labeled with the type designation “ice” preceding the class designation (beer, ale, etc.).
(d) *Black and tan.* A product composed of two classes of malt beverages may be designated with the type designation “black and tan,” and the class and type designation is the names of the two classes of malt beverages in conjunction with “black and tan” (for example, “Black and Tan, Stout and Ale”).
(e) *Wheat beer.* Any “beer,” “ale,” “porter,” “stout,” “lager,” “malt liquor,” or other malt beverage made from a fermentable base that consists of at least 25 percent by weight malted wheat may be designated with the type designation “wheat” preceding the applicable class designation.
(f) *Rye beer.* Any “beer,” “ale,” “porter,” “stout,” “lager,” “malt liquor,” or other malt beverage made from a fermentable base that consists of at least 25 percent by weight malted rye may be designated with the type designation “rye” preceding the applicable class designation.
(g) *Barley wine ale.* The term “barley (or wheat or rye) wine ale” or “barley (or wheat or rye) wine style ale” may be used in accordance with trade understanding.
(h) *Malt beverages aged in barrels* —
(1) *General.* Label designations for malt beverages aged in barrels or with woodchips, spirals, or staves derived from barrels may, but are not required to, include a description of how the product was aged. Thus, for example, acceptable designations for a standard beer aged in an oak barrel would include “beer,” “oak aged beer,” and “beer aged in an oak barrel.”
(2) *Barrels previously used in the production or storage of wine or distilled spirits.* Malt beverages aged in barrels previously used in the production or storage of wine or distilled spirits, or with woodchips, spirals, or staves derived from barrels previously used in the production or storage of wine or distilled spirits, or from woodchips previously used in the aging of distilled spirits or wine may, but are not required to, include a description of how the product was aged.
(i) Examples of acceptable designations for a standard beer aged in a wine barrel include “beer,” “beer aged in a wine barrel,” and “wine barrel aged beer.”
(ii) Examples of acceptable designations for an ale brewed with honey and aged in a bourbon barrel include “honey ale” and “bourbon barrel aged honey ale” but not simply “ale” or “bourbon barrel aged ale.”
(3) *Misleading designations.* Designations that create a misleading impression as to the identity of the product by emphasizing certain words or terms are prohibited. As set forth in [§ 7.122](/current/title-27/section-7.122), designations may not mislead consumers as to the age, origin, identity, or other characteristics of the malt beverage. Examples of designations that would be prohibited under this provision are “bourbon ale,” “bourbon-flavored lager,” “Chardonnay lager,” or “lager with whisky flavors.”
(i) *Other designations.* Other type designations (such as “milk” preceding the class designation “stout”) may be applied in conformance with trade understanding.
#### § 7.144 Malt beverages fermented or flavored with certain traditional ingredients.
(a) *General.* Any malt beverage that has been fermented or flavored only with one or more ingredients (such as honey or certain fruits) that the appropriate TTB officer has determined are generally recognized as traditional ingredients in the production of a fermented beverage designated as “beer,” “ale,” “porter,” “stout,” “lager,” or “malt liquor” may be labeled in accordance with trade understanding following the rules set forth in this section.
(1) A list of such traditional ingredients may be found on the TTB website (*[https://www.ttb.gov](https://www.ttb.gov)*).
(2) If the malt beverage has also been fermented or flavored with ingredients that the appropriate TTB officer has not determined are generally recognized as traditional ingredients in the production of a fermented beverage designated as “beer,” “ale,” “porter,” “stout,” “lager,” or “malt liquor,” it is a malt beverage specialty and must be labeled in accordance with the statement of composition rules in [§ 7.147](/current/title-27/section-7.147).
(b) *Rules for designation.*
(1) A designation in accordance with trade understanding must identify the base product, such as “malt beverage,” “beer,” “ale,” “porter,” “stout,” “lager,” or “malt liquor” along with a modifier or explanation that provides the consumer with adequate information about the fruit, honey, or other food ingredient used in production of the malt beverage. The label may include additional information about the production process (such as “beer fermented with cherry juice”).
(2) Where more than one exempted ingredient is included, a designation in accordance with trade understanding may identify each ingredient (such as “Ale with cherry juice, cinnamon, and nutmeg”), refer to the ingredients by category (such as “Fruit ale,” “Spiced ale,” or “Ale with natural flavors”), or simply include the ingredient or ingredients that the bottler or importer believes best identify the product (such as “Cherry ale,” “Cinnamon ale,” or “Nutmeg ale”). The designation must distinguish the product from a malt beverage, beer, ale, porter, stout, lager, or malt liquor that is not brewed or flavored with any of these ingredients; thus, unmodified designations such as “beer,” “stout,” or “ale” would not be acceptable.
(c) *Other requirements.* All parts of the designation must appear together and must be readily legible on a contrasting background. Designations that create a misleading impression as to the identity of the product by emphasizing certain words or terms are prohibited.
#### § 7.145 Malt beverages containing less than 0.5 percent alcohol by volume.
(a) Products containing less than 0.5 percent of alcohol by volume must bear the class designation “malt beverage,” “cereal beverage,” or “near beer.”
(b) If the designation “near beer” is used, both words must appear in the same size and style of type, in the same color of ink, and on the same background.
(c) No product containing less than 0.5 percent of alcohol by volume may bear the class designations “beer,” “lager beer,” “lager,” “ale,” “porter,” “stout,” or any other class or type designation commonly applied to malt beverages containing 0.5 percent or more of alcohol by volume.
#### § 7.146 Geographical names.
(a) Geographical names for distinctive types of malt beverages (other than names found under [paragraph (b)](/current/title-27/section-7.146#p-7.146\(b\)) of this section to have become generic) shall not be applied to malt beverages produced in any place other than the particular region indicated by the name unless:
(1) In direct conjunction with the name there appears the word “type” or the word “American”, or some other statement indicating the true place of production in lettering substantially as conspicuous as such name; and
(2) The malt beverages to which the name is applied conform to the type so designated. The following are examples of distinctive types of beer with geographical names that have not become generic; Dortmund, Dortmunder, Vienna, Wien, Wiener, Bavarian, Munich, Munchner, Salvator, Kulmbacher, Wurtzburger, Pilsen (Pilsener and Pilsner): *Provided,* That notwithstanding the foregoing provisions of this section, beer which is produced in the United States may be designated as “Pilsen,” “Pilsener,” or “Pilsner” without further modification, if it conforms to such type.
(b) Only such geographical names for distinctive types of malt beverages as the appropriate TTB officer finds have by usage and common knowledge lost their geographical significance to such an extent that they have become generic shall be deemed to have become generic, *e.g.,* India Pale Ale.
(c) Except as provided in [§ 7.64(b)](/current/title-27/section-7.64#p-7.64\(b\)), geographical names that are not names for distinctive types of malt beverages shall not be applied to malt beverages produced in any place other than the particular place or region indicated in the name.
#### § 7.147 Statement of composition.
(a) A statement of composition is required to appear on the label for malt beverage specialty products, as defined in [§ 7.141(b)](/current/title-27/section-7.141#p-7.141\(b\)), which are not known to the trade under a particular designation. For example, the addition of flavoring materials, colors, or artificial sweeteners may change the class and type of the malt beverage. The statement of composition along with a distinctive or fanciful name serves as the class and type designation for these products.
(b) When required by this part, a statement of composition must contain all of the following information, as applicable:
(1) *Identify the base class and/or type designation.* The statement of composition must clearly identify the base class and/or type designation of the malt beverage product (*e.g.,* “beer,” “lager beer,” “lager,” “ale,” “porter,” “stout,” or “malt beverage”).
(2) *Identify added flavoring material(s) used before, during, and after fermentation.* The statement of composition must disclose fermentable or non-fermentable flavoring materials added to the malt beverage base class.
(i) If the flavoring material is used before or during the fermentation process, the statement of composition must indicate that the malt beverage was fermented or brewed with the flavoring material (such as “Beer Fermented with grapefruit juice” or “Grapefruit Ale”). If the flavoring material is added after fermentation, the statement of composition must describe that process, using terms such as “added,” “with,” “infused,” or “flavored” (such as “Grapefruit-flavored ale.”).
(ii) If a single flavoring material is used in the production of the malt beverage product, the flavoring material may be specifically identified (such as “Ale Fermented with grapefruit juice”) or generally referenced (such as “Ale with natural flavor”). If two or more flavoring materials are used in the production of the malt beverage, each flavoring material may be specifically identified (such as “lemon juice, kiwi juice” or “lemon and kiwi juice”) or the characterizing flavoring material may be specifically identified and the remaining flavoring materials may be generally referenced (such as “kiwi and other natural and artificial flavor(s)”), or all flavors may be generally referenced (such as “with artificial flavors”).
(3) *Identify added coloring material(s).* The statement of composition must disclose the addition of coloring material(s), whether added directly or through flavoring material(s). The coloring materials may be identified specifically (such as “caramel color,” “FD\&C Red #40,” “annatto,” etc.) or as a general statement, such as “Contains certified color” for colors approved under [21 CFR subpart 74](/current/title-21/subpart-74) or “artificially colored” to indicate the presence of any one or a combination of coloring material(s). However, FD\&C Yellow No. 5, carmine, and cochineal extract require specific disclosure in accordance with [§ 7.63(b)(1)](/current/title-27/section-7.63#p-7.63\(b\)\(1\)) and [(2)](/current/title-27/section-7.63#p-7.63\(b\)\(2\)) and that specific disclosure may appear either in the statement of composition or elsewhere in accordance with those sections.
(4) *Identify added artificial sweeteners.* The statement of composition must disclose any artificial sweetener that is added to a malt beverage product, whether the artificial sweetener is added directly or through flavoring material(s). The artificial sweetener may be identified specifically by either generic name or trademarked brand name, or as a general statement (such as “artificially sweetened”) to indicate the presence of any one or combination of artificial sweeteners. However, if aspartame is used, an additional warning statement is required in accordance with [§ 7.63(b)(4)](/current/title-27/section-7.63#p-7.63\(b\)\(4\)).
## Subparts J-L \[Reserved]
## Subpart M—Penalties and Compromise of Liability
#### § 7.221 Criminal penalties.
A violation of the labeling provisions of [27 U.S.C. 205(e)](https://www.govinfo.gov/link/uscode/27/205) is punishable as a misdemeanor. See [27 U.S.C. 207](https://www.govinfo.gov/link/uscode/27/207) for the statutory provisions relating to criminal penalties, consent decrees, and injunctions.
#### § 7.222 Conditions of basic permit.
A basic permit is conditioned upon compliance with the requirements of [27 U.S.C. 205](https://www.govinfo.gov/link/uscode/27/205), including the labeling and advertising provisions of this part. A willful violation of the conditions of a basic permit provides grounds for the revocation or suspension of the permit, as applicable, as set forth in [part 1 of this chapter](/current/title-27/part-1).
#### § 7.223 Compromise.
Pursuant to [27 U.S.C. 207](https://www.govinfo.gov/link/uscode/27/207), the appropriate TTB officer is authorized, with respect to any violation of [27 U.S.C. 205](https://www.govinfo.gov/link/uscode/27/205), to compromise the liability arising with respect to such violation upon payment of a sum not in excess of \$500 for each offense, to be collected by the appropriate TTB officer and to be paid into the Treasury as miscellaneous receipts.
## Subpart N—Advertising of Malt Beverages
#### § 7.231 Application.
No person engaged in business as a brewer, wholesaler, or importer, of malt beverages directly or indirectly or through an affiliate, shall publish or disseminate or cause to be published or disseminated by radio or television broadcast, or in any newspaper, periodical, or any publication, by any sign or outdoor advertisement, or by electronic or internet media, or in any other printed or graphic matter, any advertisement of malt beverages, if such advertising is in, or is calculated to induce sales in, interstate or foreign commerce, or is disseminated by mail, unless such advertisement is in conformity with this subpart: *Provided,* That such sections shall not apply to outdoor advertising in place on September 7, 1984, but shall apply upon replacement, restoration, or renovation of any such advertising; and *provided further,* that this subpart shall apply to advertisements of malt beverages intended to be sold or shipped or delivered for shipment, or otherwise introduced into or received in any State from any place outside thereof, only to the extent that the laws of such State impose similar requirements with respect to advertisements of malt beverages manufactured and sold or otherwise disposed of in such State. *And provided further* that such sections shall not apply to a retailer or the publisher of any newspaper, periodical, or other publication, or radio or television or internet broadcast, unless such retailer or publisher or broadcaster is engaged in business as a brewer, wholesaler, bottler, or importer of malt beverages, directly or indirectly, or through an affiliate.
#### § 7.232 Definitions.
As used in this subpart, the term “advertisement” or “advertising” includes any written or verbal statement, illustration, or depiction which is in, or calculated to induce sales in, interstate or foreign commerce, or is disseminated by mail, whether it appears in a newspaper, magazine, trade booklet, menu, wine card, leaflet, circular, mailer, book insert, catalog, promotional material, sales pamphlet, internet or other electronic site or social network, or in any written, printed, graphic, or other matter (such as hang tags) accompanying, but not firmly affixed to, the container, representations made on shipping cases, or in any billboard, sign, or other outdoor display, public transit card, other periodical literature, publication, or in a radio or television broadcast, or in any other media; except that such term shall not include:
(a) Any label affixed to any container of malt beverages; or any coverings, cartons, or cases of containers of malt beverages used for sale at retail which constitute a part of the labeling under this part.
(b) Any editorial or other reading material (such as a news release) in any periodical or publication or newspaper, for the publication of which no money or valuable consideration or thing of value is paid or promised, directly or indirectly, by any permittee or brewer, and which is not written by or at the direction of the permittee or brewer.
#### § 7.233 Mandatory statements.
(a) *Responsible advertiser.* The advertisement must display the responsible advertiser's name, city, and State or the name and other contact information (such as, telephone number, website, or email address) where the responsible advertiser may be contacted.
(b) *Class.* The advertisement shall contain a conspicuous statement of the class to which the product belongs, corresponding to the statement of class which is required to appear on the label of the product.
(c) *Exception.*
(1) If an advertisement refers to a general malt beverage line or all of the malt beverage products of one company, whether by the company name or by the brand name common to all the malt beverages in the line, the only mandatory information necessary is the responsible advertiser's name, city, and State or the name and other contact information (such as telephone number, website, or email address) where the responsible advertiser may be contacted. This exception does not apply where only one type of malt beverage is marketed under the specific brand name advertised.
(2) On consumer specialty items, the only information necessary is the company name or brand name of the product.
#### § 7.234 Legibility of mandatory information.
(a) Statements required under this subpart that appear in any written, printed, or graphic advertisement must be in lettering or type size sufficient to be conspicuous and readily legible.
(b) In the case of signs, billboards, and displays the name and address or name and other contact information (such as, telephone number, website, or email) of the permittee responsible for the advertisement may appear in type size of lettering smaller than the other mandatory information, provided such information can be ascertained upon closer examination of the sign or billboard.
(c) Mandatory information must be so stated as to be clearly a part of the advertisement and may not be separated in any manner from the remainder of the advertisement.
(d) Mandatory information for two or more products shall not be stated unless clearly separated.
(e) Mandatory information must be so stated in both the print and audiovisual media that it will be readily apparent to the persons viewing the advertisement.
#### § 7.235 Prohibited practices.
(a) *General prohibition.* An advertisement of malt beverages must not contain:
(1) Any statement that is false or untrue in any material particular, or that, irrespective of falsity, directly, or by ambiguity, omission, or inference, or by the addition of irrelevant, scientific or technical matter, tends to create a misleading impression.
(2) Any false or misleading statement that explicitly or implicitly disparages a competitor's product. This does not prevent truthful and accurate comparisons between products (such as “Our ale contains more hops than Brand X”) or statements of opinion (such as “We think our beer tastes better than any other beer on the market”).
(3) Any statement, design, device, or representation which is obscene or indecent.
(4) Any statement, design, device, or representation of or relating to analyses, standards, or tests, irrespective of falsity, which the appropriate TTB officer finds to be likely to mislead the consumer.
(5) Any statement, design, device, or representation of or relating to any guarantee, irrespective of falsity, which the appropriate TTB officer finds to be likely to mislead the consumer. Money-back guarantees are not prohibited.
(6) \[Reserved].
(7) \[Reserved].
(8) Any statement, design, device, or representation that tends to create a false or misleading impression that the malt beverage contains distilled spirits or is a distilled spirits product. Advertisements may include the types of statements that are listed as being not prohibited on labels in [§ 7.128(b)](/current/title-27/section-7.128#p-7.128\(b\)).
(b) *Statements inconsistent with labeling.*
(1) Advertisements shall not contain any statement concerning a brand or lot of malt beverages that is inconsistent with any statement on the labeling thereof.
(2) Any label depicted on a container in an advertisement shall be a reproduction of an approved label, except that malt beverage labels not required to be covered by a COLA in accordance with the rules in [§ 7.21 of this chapter](/current/title-27/section-7.21) may also appear on advertisements.
(c) \[Reserved]
(d) *Class.*
(1) No product containing less than 0.5 percent of alcohol by volume shall be designated in any advertisement as “beer”, “lager beer”, “lager”, “ale”, “porter”, or “stout”, or by any other class or type designation commonly applied to fermented malt beverages containing 0.5 percent or more of alcohol by volume.
(2) No product other than a malt beverage fermented at comparatively high temperature, possessing the characteristics generally attributed to “ale,” “porter,” or “stout” and produced without the use of coloring or flavoring materials (other than those recognized in standard brewing practices) shall be designated in any advertisement by any of these class designations.
(e) *Health-related statements* —
(1) *Definitions.* When used in this [paragraph (e)](/current/title-27/section-7.235#p-7.235\(e\)), terms are defined as follows:
(i) *Health-related statement* means any statement related to health and includes statements of a curative or therapeutic nature that, expressly or by implication, suggest a relationship between the consumption of alcohol, malt beverages, or any substance found within the malt beverage, and health benefits or effects on health. The term includes both specific health claims and general references to alleged health benefits or effects on health associated with the consumption of alcohol, malt beverages, or any substance found within the malt beverage, as well as health-related directional statements. The term also includes statements and claims that imply that a physical or psychological sensation results from consuming the malt beverage, as well as statements and claims of nutritional value (*e.g.,* statements of vitamin content). Statements concerning caloric, carbohydrate, protein, and fat content do not constitute nutritional claims about the product.
(ii) *Specific health claim* is a type of health-related statement that, expressly or by implication, characterizes the relationship of the malt beverage, alcohol, or any substance found within the malt beverage, to a disease or health-related condition. Implied specific health claims include statements, symbols, vignettes, or other forms of communication that suggest, within the context in which they are presented, that a relationship exists between malt beverages, alcohol, or any substance found within the malt beverage, and a disease or health-related condition.
(iii) *Health-related directional statement* is a type of health-related statement that directs or refers consumers to a third party or other source for information regarding the effects on health of malt beverage or alcohol consumption.
(2) *Rules for advertising* —
(i) *Health-related statements.* In general, advertisements may not contain any health-related statement that is untrue in any particular or tends to create a misleading impression as to the effects on health of alcohol consumption. TTB will evaluate such statements on a case-by-case basis and may require as part of the health-related statement a disclaimer or some other qualifying statement to dispel any misleading impression conveyed by the health-related statement. Such disclaimer or other qualifying statement must appear as prominent as the health-related statement.
(ii) *Specific health claims.* A specific health claim will not be considered misleading if it is truthful and adequately substantiated by scientific or medical evidence; sufficiently detailed and qualified with respect to the categories of individuals to whom the claim applies; adequately discloses the health risks associated with both moderate and heavier levels of alcohol consumption; and outlines the categories of individuals for whom any levels of alcohol consumption may cause health risks. This information must appear as part of the specific health claim and in a manner as prominent as the specific health claim.
(iii) *Health-related directional statements.* A statement that directs consumers to a third party or other source for information regarding the effects on health of malt beverage or alcohol consumption is presumed misleading unless it—
(A) Directs consumers in a neutral or other non-misleading manner to a third party or other source for balanced information regarding the effects on health of malt beverage or alcohol consumption; and
(B)
(*1*) Includes as part of the health-related directional statement, and in a manner as prominent as the health-related directional statement, the following disclaimer: “This statement should not encourage you to drink or increase your alcohol consumption for health reasons;” or
(*2*) Includes as part of the health-related directional statement, and in a manner as prominent as the health-related directional statement, some other qualifying statement that the appropriate TTB officer finds is sufficient to dispel any misleading impression conveyed by the health-related directional statement.
(f) *Confusion of brands.* Two or more different brands or lots of malt beverages shall not be advertised in one advertisement (or in two or more advertisements in one issue of a periodical or a newspaper or in one piece of other written, printed, or graphic matter) if the advertisement tends to create the impression that representations made as to one brand or lot apply to the other or others, and if as to such latter the representations contravene any provision of this subpart or are in any respect untrue.
(g) *Representations of the armed forces or flags.* Advertisements may not show an image of any government's flag or any representation related to the armed forces of the United States if the representation, standing alone or considered together with any additional language or symbols, creates a false or misleading impression that the product was endorsed by, made by, used by, or made under the supervision of, the government represented by that flag or by the armed forces of the United States. This section does not prohibit the use of a flag as part of a claim of American origin or another country of origin.
(h) *Deceptive advertising techniques.* Subliminal or similar techniques are prohibited. “Subliminal or similar techniques,” as used in this part, refers to any device or technique that is used to convey, or attempts to convey, a message to a person by means of images or sounds of a very brief nature that cannot be perceived at a normal level of awareness.
(i) *Organic.* Any use of the term “organic” in the advertising of malt beverages must comply with the United States Department of Agriculture's (USDA) National Organic Program rules, [7 CFR part 205](/current/title-7/part-205), as interpreted by the USDA.
#### § 7.236 Comparative advertising.
(a) *General.* Comparative advertising shall not be disparaging of a competitor's product in a manner that is false or misleading.
(b) *Taste tests.*
(1) Taste test results may be used in advertisements comparing competitors' products unless they are disparaging in a false or misleading manner, deceptive, or likely to mislead the consumer.
(2) The taste test procedure used shall meet scientifically accepted procedures. An example of a scientifically accepted procedure is outlined in the Manual on Sensory Testing Methods, ASTM Special Technical Publication 434, published by the American Society for Testing and Materials, 1916 Race Street, Philadelphia, Pennsylvania 19103, ASTM, 1968, Library of Congress Catalog Card Number 68-15545.
(3) A statement shall appear in the advertisement providing the name and address of the testing administrator.
## Subpart O—Paperwork Reduction Act
#### § 7.241 OMB control numbers assigned under the Paperwork Reduction Act.
(a) *Purpose.* This subpart displays the control numbers assigned to information collection requirements in this part by the Office of Management and Budget (OMB) under the Paperwork Reduction Act of 1995, [Public Law 104-13](https://www.govinfo.gov/link/plaw/104/public/13).
(b) *Table.* The following table identifies each section in this part that contains an information collection requirement and the OMB control number that is assigned to that information collection requirement.
Table 1 to Paragraph (b)
| Section where contained | Current OMB Control No. |
| ----------------------- | ----------------------- |
| 7.11 | 1513-0111 |
| 7.21 | 1513-0020 |
| 7.22 | 1513-0020 |
| 7.24 | 1513-0020 1513-0064 |
| 7.25 | 1513-0020 |
| 7.27 | 1513-0020 |
| 7.28 | 1513-0122 |
| 7.29 | 1513-0020 |
| 7.62 | 1513-0087 |
| 7.63 | 1513-0084 1513-0087 |
| 7.66 | 1513-0085 |
| 7.67 | 1513-0085 |
| 7.81 | 1513-0087 |
| 7.82 | 1513-0121 |
| 7.83 | 1513-0121 |
| 7.84 | 1513-0087 |
| 7.233 | 1513-0087 |
# Part 70 — PROCEDURE AND ADMINISTRATION
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-70
Full text of 27 CFR Part 70 — PROCEDURE AND ADMINISTRATION. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 70—PROCEDURE AND ADMINISTRATION
#### Authority:
[5 U.S.C. 301](https://www.govinfo.gov/link/uscode/5/301) and [552](https://www.govinfo.gov/link/uscode/5/552); [26 U.S.C. 4181](https://www.govinfo.gov/link/uscode/26/4181), [4182](https://www.govinfo.gov/link/uscode/26/4182), [5123](https://www.govinfo.gov/link/uscode/26/5123), [5203](https://www.govinfo.gov/link/uscode/26/5203), [5207](https://www.govinfo.gov/link/uscode/26/5207), [5275](https://www.govinfo.gov/link/uscode/26/5275), [5367](https://www.govinfo.gov/link/uscode/26/5367), [5415](https://www.govinfo.gov/link/uscode/26/5415), [5504](https://www.govinfo.gov/link/uscode/26/5504), [5555](https://www.govinfo.gov/link/uscode/26/5555), [5684(a)](https://www.govinfo.gov/link/uscode/26/5684), [5741](https://www.govinfo.gov/link/uscode/26/5741), [5761(b)](https://www.govinfo.gov/link/uscode/26/5761), [5802](https://www.govinfo.gov/link/uscode/26/5802), [6020](https://www.govinfo.gov/link/uscode/26/6020), [6021](https://www.govinfo.gov/link/uscode/26/6021), [6064](https://www.govinfo.gov/link/uscode/26/6064), [6102](https://www.govinfo.gov/link/uscode/26/6102), [6109](https://www.govinfo.gov/link/uscode/26/6109), [6155](https://www.govinfo.gov/link/uscode/26/6155), [6159](https://www.govinfo.gov/link/uscode/26/6159), [6201](https://www.govinfo.gov/link/uscode/26/6201), [6203](https://www.govinfo.gov/link/uscode/26/6203), [6204](https://www.govinfo.gov/link/uscode/26/6204), [6301](https://www.govinfo.gov/link/uscode/26/6301), [6303](https://www.govinfo.gov/link/uscode/26/6303), [6311](https://www.govinfo.gov/link/uscode/26/6311), [6313](https://www.govinfo.gov/link/uscode/26/6313), [6314](https://www.govinfo.gov/link/uscode/26/6314), [6321](https://www.govinfo.gov/link/uscode/26/6321), [6323](https://www.govinfo.gov/link/uscode/26/6323), [6325](https://www.govinfo.gov/link/uscode/26/6325), [6326](https://www.govinfo.gov/link/uscode/26/6326), [6331-6343](https://www.govinfo.gov/link/uscode/26/6331), [6401-6404](https://www.govinfo.gov/link/uscode/26/6401), [6407](https://www.govinfo.gov/link/uscode/26/6407), [6416](https://www.govinfo.gov/link/uscode/26/6416), [6423](https://www.govinfo.gov/link/uscode/26/6423), [6501-6503](https://www.govinfo.gov/link/uscode/26/6501), [6511](https://www.govinfo.gov/link/uscode/26/6511), [6513](https://www.govinfo.gov/link/uscode/26/6513), [6514](https://www.govinfo.gov/link/uscode/26/6514), [6532](https://www.govinfo.gov/link/uscode/26/6532), [6601](https://www.govinfo.gov/link/uscode/26/6601), [6602](https://www.govinfo.gov/link/uscode/26/6602), [6611](https://www.govinfo.gov/link/uscode/26/6611), [6621](https://www.govinfo.gov/link/uscode/26/6621), [6622](https://www.govinfo.gov/link/uscode/26/6622), [6651](https://www.govinfo.gov/link/uscode/26/6651), [6653](https://www.govinfo.gov/link/uscode/26/6653), [6656-6658](https://www.govinfo.gov/link/uscode/26/6656), [6665](https://www.govinfo.gov/link/uscode/26/6665), [6671](https://www.govinfo.gov/link/uscode/26/6671), [6672](https://www.govinfo.gov/link/uscode/26/6672), [6701](https://www.govinfo.gov/link/uscode/26/6701), [6723](https://www.govinfo.gov/link/uscode/26/6723), [6801](https://www.govinfo.gov/link/uscode/26/6801), [6862](https://www.govinfo.gov/link/uscode/26/6862), [6863](https://www.govinfo.gov/link/uscode/26/6863), [6901](https://www.govinfo.gov/link/uscode/26/6901), [7011](https://www.govinfo.gov/link/uscode/26/7011), [7101](https://www.govinfo.gov/link/uscode/26/7101), [7102](https://www.govinfo.gov/link/uscode/26/7102), [7121](https://www.govinfo.gov/link/uscode/26/7121), [7122](https://www.govinfo.gov/link/uscode/26/7122), [7207](https://www.govinfo.gov/link/uscode/26/7207), [7209](https://www.govinfo.gov/link/uscode/26/7209), [7214](https://www.govinfo.gov/link/uscode/26/7214), [7304](https://www.govinfo.gov/link/uscode/26/7304), [7401](https://www.govinfo.gov/link/uscode/26/7401), [7403](https://www.govinfo.gov/link/uscode/26/7403), [7406](https://www.govinfo.gov/link/uscode/26/7406), [7423](https://www.govinfo.gov/link/uscode/26/7423), [7424](https://www.govinfo.gov/link/uscode/26/7424), [7425](https://www.govinfo.gov/link/uscode/26/7425), [7426](https://www.govinfo.gov/link/uscode/26/7426), [7429](https://www.govinfo.gov/link/uscode/26/7429), [7430](https://www.govinfo.gov/link/uscode/26/7430), [7432](https://www.govinfo.gov/link/uscode/26/7432), [7502](https://www.govinfo.gov/link/uscode/26/7502), [7503](https://www.govinfo.gov/link/uscode/26/7503), [7505](https://www.govinfo.gov/link/uscode/26/7505), [7506](https://www.govinfo.gov/link/uscode/26/7506), [7513](https://www.govinfo.gov/link/uscode/26/7513), [7601-7606](https://www.govinfo.gov/link/uscode/26/7601), [7608-7610](https://www.govinfo.gov/link/uscode/26/7608), [7622](https://www.govinfo.gov/link/uscode/26/7622), [7623](https://www.govinfo.gov/link/uscode/26/7623), [7653](https://www.govinfo.gov/link/uscode/26/7653), [7805](https://www.govinfo.gov/link/uscode/26/7805).
#### Source:
T.D. ATF-6, [38 FR 32445](https://www.federalregister.gov/citation/38-FR-32445), Nov. 26, 1973, unless otherwise noted.
#### Editorial Note:
Nomenclature changes to part 70 appear by T.D. ATF-450, [66 FR 29022-29030](https://www.federalregister.gov/citation/66-FR-29022), May 29, 2001.
## Subpart A—Scope
#### § 70.1 General.
(a) The regulations in [Subparts C](/current/title-27/part-70/subpart-C), [D](/current/title-27/part-70/subpart-D), and [E of this part](/current/title-27/part-70/subpart-E) set forth the procedural and administrative rules of the Alcohol and Tobacco Tax and Trade Bureau for:
(1) The issuance and enforcement of summonses, examination of books of account and witnesses, administration of oaths, entry of premises for examination of taxable objects, granting of rewards for information, canvass for taxable objects and persons, and authority of TTB officers.
(2) The use of commercial banks for payment of excise taxes imposed by 26 U.S.C. Subtitles E and F.
(3) The preparing or executing of returns; deposits; payment on notice and demand; assessment; abatements, credits and refunds; limitations on assessment; limitations on credit or refund; periods of limitation in judicial proceedings; interest; additions to tax, additional amounts, and assessable penalties; enforced collection activities; authority for establishment, alteration, and distribution of stamps, marks, or labels; jeopardy assessment of alcohol, tobacco, and firearms taxes, registration of dealers in alcohol fit for beverage use, and registration of persons paying a special tax.
(4) Distilled spirits, wines, beer, tobacco products, cigarette papers and tubes, firearms, ammunition, and explosives.
(b) The regulations in [Subpart F of this part](/current/title-27/part-70/subpart-F) relate to the limitations imposed by [26 U.S.C. 6423](https://www.govinfo.gov/link/uscode/26/6423), on the refund or credit of tax paid or collected in respect to any article of a kind subject to a tax imposed by Part I, Subchapter A of Chapter 51, I.R.C., or by any corresponding provision of prior internal revenue laws.
(c) The regulations in [Subpart G of this part](/current/title-27/part-70/subpart-G) implement [26 U.S.C. 5064](https://www.govinfo.gov/link/uscode/26/5064), which permits payments to be made by the United States for amounts equal to the internal revenue taxes paid or determined and customs duties paid on distilled spirits, wines, and beer, previously withdrawn, that were lost, made unmarketable, or condemned by a duly authorized official as a result of disaster, vandalism, or malicious mischief. This subpart applies to disasters or other specified causes of loss, occurring on or after February 1, 1979. This subpart does not apply to distilled spirits, wines, and beer manufactured in Puerto Rico and brought into the United States.
\[T.D. ATF-376, [61 FR 31031](https://www.federalregister.gov/citation/61-FR-31031), June 19, 1996, as amended by T.D. TTB-44, [71 FR 16958](https://www.federalregister.gov/citation/71-FR-16958), Apr. 4, 2006; T.D. TTB-79, [74 FR 37424](https://www.federalregister.gov/citation/74-FR-37424), July 28, 2009; T.D. TTB-91, [76 FR 5481](https://www.federalregister.gov/citation/76-FR-5481), Feb. 1, 2011]
#### § 70.2 Forms prescribed.
(a) The appropriate TTB officer is authorized to prescribe all forms required by this part. All of the information called for in each form shall be furnished as indicated by the headings on the form and the instructions on or pertaining to the form. In addition, information called for in each form shall be furnished as required by this part. The form will be filed in accordance with the instructions for the form.
(b) Forms prescribed by this part are available for printing through the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. ATF-376, [61 FR 31031](https://www.federalregister.gov/citation/61-FR-31031), June 19, 1996, as amended by T.D. ATF-450, [66 FR 29022](https://www.federalregister.gov/citation/66-FR-29022), May 29, 2001; T.D. TTB-44, [71 FR 16959](https://www.federalregister.gov/citation/71-FR-16959), Apr. 4, 2006; T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
#### § 70.3 Delegations of the Administrator.
Most of the regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.70, Delegation of the Administrator's Authorities in [27 CFR Part 70](/current/title-27/part-70), Procedure and Administration. You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-44, [71 FR 16959](https://www.federalregister.gov/citation/71-FR-16959), Apr. 4, 2006, as amended by T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
## Subpart B—Definitions
#### § 70.11 Meaning of terms.
When used in this part and in forms prescribed under this part, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof, terms shall have the meaning ascribed in this section. Words in the plural form shall include the singular, and vice versa, and words imparting the masculine gender shall include the feminine. The terms “includes” and “including” do not exclude things not enumerated which are in the same general class.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.70, Delegation of the Administrator's Authorities in [27 CFR Part 70](/current/title-27/part-70), Procedure and Administration.
*Bureau.* The Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*CFR.* The Code of Federal Regulations.
*Commercial bank.* A bank, whether or not a member of the Federal Reserve System, which has access to the Federal Reserve Communications System (FRCS) or Fedwire. The “FRCS” or “Fedwire” is a communications network that allows Federal Reserve System member banks to effect a transfer of funds for their customers (or other commercial banks) to the Treasury Account at the Federal Reserve Bank of New York.
*Electronic fund transfer or EFT.* Any transfer of funds effected by a taxpayer's commercial bank, either directly or through a correspondent banking relationship, via the Federal Reserve Communications System (FRCS) or Fedwire to the Treasury Account at the Federal Reserve Bank of New York.
*Enforced collection.* Collection of taxes when a taxpayer neglects or refuses to pay voluntarily. Includes such administrative measures as liens and levies.
*IRC.* IRC refers to the Internal Revenue Code of 1986, as amended (codified in 26 U.S.C.).
*Levy.* The taking of property by seizure and sale or by collection of money due to the debtor, such as wages.
*Lien.* A charge upon real or personal property for the satisfaction of some debt or performance of an obligation.
*Person.* An individual, a trust, estate, partnership, association or other unincorporated organization, fiduciary, company, or corporation, or the District of Columbia, a State, or a political subdivision thereof (including a city, county, or other municipality).
*Provisions of 26 U.S.C. enforced and administered by the Bureau.* Sections 4181 and 4182 of the IRC; subchapters F and G of chapter 32 of the IRC insofar as they relate to activities administered and enforced with respect to sections 4181 and 4182 of the IRC; chapters 51 and 52 of subtitle E of the IRC; and subtitle F of the IRC insofar as it relates to any of the foregoing.
*Secretary of the Treasury or Secretary.* The Secretary of the Treasury or a delegate of the Secretary.
*Seizure.* The act of taking possession of property to satisfy a tax liability or by virtue of an execution.
*Treasury Account.* The Department of the Treasury's General Account at the Federal Reserve Bank of New York.
*U.S.C.* The United States Code.
(Aug. 16, 1954, Ch. 736, 68A Stat. 775 ([26 U.S.C. 6301](https://www.govinfo.gov/link/uscode/26/6301)); June 29, 1956, Ch. 462, 70 Stat. 391 ([26 U.S.C. 6301](https://www.govinfo.gov/link/uscode/26/6301)))
\[T.D. ATF-48, [43 FR 13535](https://www.federalregister.gov/citation/43-FR-13535), Mar. 31, 1978; [44 FR 55841](https://www.federalregister.gov/citation/44-FR-55841), Sept. 28,979, as amended by T.D. ATF-77, [46 FR 3002](https://www.federalregister.gov/citation/46-FR-3002), Jan. 13, 1981; T.D. ATF-301, [55 FR 47608](https://www.federalregister.gov/citation/55-FR-47608), Nov. 14, 1990; T.D. ATF-331, [57 FR 40327](https://www.federalregister.gov/citation/57-FR-40327), Sept. 3, 1992; T.D. ATF-378, [61 FR 29955](https://www.federalregister.gov/citation/61-FR-29955), June 13, 1996; T.D. ATF-450, [66 FR 29022](https://www.federalregister.gov/citation/66-FR-29022), May 29, 2001; T.D. TTB-44, [71 FR 16959](https://www.federalregister.gov/citation/71-FR-16959), Apr. 4, 2006; T.D. TTB-91, [76 FR 5481](https://www.federalregister.gov/citation/76-FR-5481), Feb. 1, 2011; T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
## Subpart C—Discovery of Liability and Enforcement of Laws
### Examination and Inspection
#### § 70.21 Canvass for taxable persons and objects.
Each appropriate TTB officer shall, to the extent deemed practicable, cause officers or employees under the appropriate TTB officer's supervision and control to proceed, from time to time, and inquire after and concerning all persons therein who may be liable to pay any tax, imposed under provisions of 26 U.S.C. enforced and administered by the Bureau, and all persons owning or having the care and management of any objects with respect to which such tax is imposed.
\[T.D. ATF-331, [57 FR 40327](https://www.federalregister.gov/citation/57-FR-40327), Sept. 3, 1992, as amended by T.D. ATF-450, [66 FR 29023](https://www.federalregister.gov/citation/66-FR-29023), May 29, 2001]
#### § 70.22 Examination of books and witnesses.
(a) *In general.* For the purpose of ascertaining the correctness of any return, making a return where none has been made, determining the liability of any person for any tax (including any interest, additional amount, addition to the tax, or civil penalty) imposed under provisions of the IRC enforced and administered by the Bureau or the liability at law or in equity of any transferee or fiduciary of any person in respect of any such tax, or collecting any such liability, or inquiring into any offense connected with the administration or enforcement of the internal revenue laws that are administered and enforced by the Bureau, any appropriate TTB officer may examine any books, papers, records or other data which may be relevant or material to such inquiry; and take such testimony of the person concerned, under oath, as may be relevant to such inquiry.
(b) *Summonses.* For the purposes described in [paragraph (a)](/current/title-27/section-70.22#p-70.22\(a\)) of this section the appropriate TTB officers are authorized to summon the person liable for tax or required to perform the act, or any officer or employee of such person, or any person having possession, custody, or care of books of accounts containing entries relating to the business of the person liable for tax or required to perform the act, or any person deemed proper, to appear before a designated officer or employee of the Bureau at a time and place named in the summons and to produce such books, papers, records, or other data, and to give such testimony, under oath, as may be relevant or material to such inquiry; and take such testimony of the person concerned, under oath, as may be relevant or material to such inquiry. Such TTB officer may designate an appropriate TTB officer as the individual before whom a person summoned pursuant to [26 U.S.C. 7602](https://www.govinfo.gov/link/uscode/26/7602) shall appear. Any such officer, when so designated in a summons, is authorized to take testimony under oath of the person summoned and to receive and examine books, papers, records, or other data produced in compliance with the summons. The authority to issue a summons may not be redelegated. See [§ 70.302 of this part](/current/title-27/part-70/section-70.302) for rules concerning payments to certain persons who are summoned to give information to the Bureau under [26 U.S.C. 7602](https://www.govinfo.gov/link/uscode/26/7602) and this section.
(Aug. 16, 1954, Chapter 736, 68A Stat. 901; ([26 U.S.C. 7602](https://www.govinfo.gov/link/uscode/26/7602)))
\[T.D. ATF-6, [38 FR 32445](https://www.federalregister.gov/citation/38-FR-32445), Nov. 26, 1973, as amended by T.D. ATF-42, [42 FR 8367](https://www.federalregister.gov/citation/42-FR-8367), Feb. 10, 1977; T.D. ATF-301, [55 FR 47608](https://www.federalregister.gov/citation/55-FR-47608), Nov. 14, 1990; T.D. ATF-331, [57 FR 40328](https://www.federalregister.gov/citation/57-FR-40328), Sept. 3, 1992; T.D. ATF-450, [66 FR 29023](https://www.federalregister.gov/citation/66-FR-29023), May 29, 2001; T.D. TTB-91, [76 FR 5481](https://www.federalregister.gov/citation/76-FR-5481), Feb. 1, 2011]
#### § 70.23 Service of summonses.
(a) *In general.* A summons issued under [26 U.S.C. 7602](https://www.govinfo.gov/link/uscode/26/7602) shall be served by an attested copy delivered in hand to the person to whom it is directed, or left at his last and usual place of abode. The certificate of service signed by the person serving the summons shall be evidence of the facts it states on the hearing of an application for the enforcement of the summons. When the summons requires the production of books, papers, records, or other data, it shall be sufficient if such books, papers, records, or other data are described with reasonable certainty.
(b) *Persons who may serve summonses.* Any appropriate TTB officer may serve a summons issued under [26 U.S.C. 7602](https://www.govinfo.gov/link/uscode/26/7602).
(68A Stat. 902, as amended ([26 U.S.C. 7603](https://www.govinfo.gov/link/uscode/26/7603)); [26 U.S.C. 7805](https://www.govinfo.gov/link/uscode/26/7805) (68A Stat. 917), [27 U.S.C. 205](https://www.govinfo.gov/link/uscode/27/205) (49 Stat. 981 as amended), [18 U.S.C. 926](https://www.govinfo.gov/link/uscode/18/926) (82 Stat. 959), and sec. 38, Arms Export Control Act ([22 U.S.C. 2778](https://www.govinfo.gov/link/uscode/22/2778), [90](https://www.govinfo.gov/link/uscode/22/90) Stat. 744), [27 U.S.C. 205](https://www.govinfo.gov/link/uscode/27/205), [22 U.S.C. 2778](https://www.govinfo.gov/link/uscode/22/2778), [26 U.S.C. 7602](https://www.govinfo.gov/link/uscode/26/7602), and [5 U.S.C. 301](https://www.govinfo.gov/link/uscode/5/301))
\[T.D. ATF-6, [38 FR 32445](https://www.federalregister.gov/citation/38-FR-32445), Nov. 26, 1973, as amended by T.D. ATF-48, [43 FR 13531](https://www.federalregister.gov/citation/43-FR-13531), Mar. 31, 1978; T.D. ATF-201, [50 FR 12533](https://www.federalregister.gov/citation/50-FR-12533), Mar. 29, 1985; T.D. ATF-249, [52 FR 5961](https://www.federalregister.gov/citation/52-FR-5961), Feb. 27, 1987; T.D. ATF-301, [55 FR 47608](https://www.federalregister.gov/citation/55-FR-47608), Nov. 14, 1990; T.D. ATF-450, [66 FR 29023](https://www.federalregister.gov/citation/66-FR-29023), May 29, 2001]
#### § 70.24 Enforcement of summonses.
(a) *In general.* Whenever any person summoned under [26 U.S.C. 7602](https://www.govinfo.gov/link/uscode/26/7602) neglects or refuses to obey such summons, or to produce books, papers, records, or other data, or to give testimony, as required, application may be made to the judge of the district court or to a U.S. magistrate for the district within which the person so summoned resides or is found for an attachment against him as for a contempt.
(b) *Persons who may apply for an attachment.* Appropriate TTB officers are authorized to apply for an attachment as provided in [paragraph (a)](/current/title-27/section-70.24#p-70.24\(a\)) of this section. The authority to apply for an attachment for the enforcement of a summons may not be redelegated.
(68A Stat. 902, as amended ([26 U.S.C. 7604](https://www.govinfo.gov/link/uscode/26/7604)))
\[T.D. ATF-6, [38 FR 32445](https://www.federalregister.gov/citation/38-FR-32445), Nov. 26, 1973; [38 FR 33767](https://www.federalregister.gov/citation/38-FR-33767), Dec. 7, 1973, as amended by T.D. ATF-450, [66 FR 29023](https://www.federalregister.gov/citation/66-FR-29023), May 29, 2001]
#### § 70.25 Special procedures for third-party summonses.
(a) When the Bureau summons the records of persons defined by [26 U.S.C. 7609(a)(3)](https://www.govinfo.gov/link/uscode/26/7609) as “third-party recordkeepers”, the person about whom information is being gathered must be notified in advance, except when:
(1) The summons is served on the person about whom information is being gathered, or any officer or employee of such person, or
(2) The summons is served to determine whether or not records of the business transactions or affairs of an identified person have been made or kept, or
(3) The summons does not identify the person with respect to whose liability the summons is issued (a “John Doe” summons issued under the provisions of [26 U.S.C. 7609(f)](https://www.govinfo.gov/link/uscode/26/7609)), or
(4) The appropriate TTB officer petitions, and the court determines, on the basis of the facts and circumstances alleged, that there is reasonable cause to believe the giving of notice may lead to attempts to conceal, destroy, or alter records relevant to the examination, to prevent the communication of information from other persons through intimidation, bribery, or collusion, or to flee to avoid prosecution, testifying or production of records.
(b) Within 3 days of the day on which the summons was served, the notice required by [paragraph (a)](/current/title-27/section-70.25#p-70.25\(a\)) of this section shall be served upon the person entitled to notice, or mailed by certified or registered mail to the last known address of such person, or, in the absence of a last known address, left with the person summoned. No examination of any records required to be produced under a summons as to which notice is required under [paragraph (a)](/current/title-27/section-70.25#p-70.25\(a\)) of this section may be made:
(1) Before the close of the 23rd day after the day notice with respect to the summons is given in the manner provided in this paragraph, or
(2) Where a proceeding under [paragraph (c)](/current/title-27/section-70.25#p-70.25\(c\)) of this section was begun within the 20-day period referred to in that paragraph and the requirements of [paragraph (c)](/current/title-27/section-70.25#p-70.25\(c\)) of this section have been met, expect in accordance with an order of the court having jurisdiction of such proceeding or with the consent of the person beginning the proceeding to quash.
(c) If the person about whom information is being gathered has been given notice, that person has the right to institute, until and including the 20th day following the day such notice was served on or mailed, by certified or registered mail, to such notified person, a proceeding to quash the summons. During the time the validity of the summons is being litigated, the statutes of limitation are suspended under [26 U.S.C. 7609(e)](https://www.govinfo.gov/link/uscode/26/7609). Title 26 U.S.C. 7609 does not restrict the authority under [26 U.S.C. 7602](https://www.govinfo.gov/link/uscode/26/7602) (or under any other provision of law) to examine records and witnesses without serving a summons and without giving notice of an examination.
([26 U.S.C. 7609](https://www.govinfo.gov/link/uscode/26/7609))
\[T.D. ATF-301, [55 FR 47608](https://www.federalregister.gov/citation/55-FR-47608), Nov. 14, 1990]
#### § 70.26 Third-party recordkeepers.
(a) *Definitions* —
(1) *Accountant.* A person is an “accountant” under [26 U.S.C. 7609(a)(3)(F)](https://www.govinfo.gov/link/uscode/26/7609) for purposes of determining whether that person is a third-party recordkeeper if the person is registered, licensed, or certified under State law as an accountant.
(2) *Attorney.* A person is an “attorney” under [26 U.S.C. 7609(a)(3)(E)](https://www.govinfo.gov/link/uscode/26/7609) for purposes of determining whether that person is a third-party recordkeeper if the person is admitted to the bar of a State or the District of Columbia.
(3) *Credit cards* —
(i) *Person extending credit through credit cards.* The term “person extending credit through credit cards or similar devices” under [26 U.S.C. 7609(a)(3)(C)](https://www.govinfo.gov/link/uscode/26/7609) generally includes any person who issues a credit card. It does not include a seller of goods or services that honors credit cards issued by other parties but does not extend credit on the basis of credit cards or similar devices issued by itself.
(ii) \[Reserved]
(iii) *Similar devices to credit cards.* An object is a “similar device” to a credit card under [26 U.S.C. 7609(a)(3)(C)](https://www.govinfo.gov/link/uscode/26/7609) only if it is physical in nature, such as a coupon book, a charge plate, or a letter of credit. Thus, a person who extends credit by requiring credit customers to sign sales slips without requiring use of physical objects issued by that person is not a third-party recordkeeper under [26 U.S.C. 7609(a)(3)(C)](https://www.govinfo.gov/link/uscode/26/7609).
(b) *When third-party recordkeeper status arises.* A person is a “third-party recordkeeper” with respect to a given set of records only if the person made or kept the records in the person's capacity as a third-party recordkeeper. Thus, for instance, an accountant is not a third-party recordkeeper (by reason of being an accountant) with respect to the accountant's records of a sale of property by the accountant to another person. Similarly, a credit card issuer is not a third-party recordkeeper (by reason of being a person extending credit through the use of credit cards or similar devices) with respect to:
(1) Records relating to noncredit card transactions, such as a cash sale by the issuer to a holder of the issuer's credit card; or
(2) Records relating to transactions involving the use of another issuer's credit card.
(c) *Duty of third-party recordkeeper* —
(1) *In General.* Upon receipt of a summons, the third-party recordkeeper (“recordkeeper”) must begin to assemble the summoned records. The recordkeeper must be prepared to produce the summoned records on the date which the summons states the records are to be examined regardless of the institution or anticipated institution of a proceeding to quash or the recordkeeper's intervention (as allowed under [26 U.S.C. 7609(a)(3)(C)](https://www.govinfo.gov/link/uscode/26/7609)) into a proceeding to quash.
(2) *Disclosing recordkeepers not liable* —
(i) *In general.* A recordkeeper, or an agent or employee thereof, who makes a disclosure of records as required by this section, in good faith reliance on the “Certificate of the Secretary” (as defined in [paragraph (c)(2)(ii)](/current/title-27/section-70.26#p-70.26\(c\)\(2\)\(ii\)) of this section) or an order of a court requiring production of records, will not be liable for such disclosure to any customer, or to any party with respect to whose tax liability the summons was issued, or to any other person.
(ii) *Certificate of the Secretary.* The appropriate TTB officer may issue to the recordkeeper a “Certificate of the Secretary” stating both:
(A) That the 20-day period, within which a notified person may institute a proceeding to quash the summons has expired; and
(B) That no proceeding has been properly instituted within that period.
The appropriate TTB officer may also issue a “Certificate of the Secretary” to the recordkeeper if the taxpayer, with respect to whose tax liability the summons was issued, expressly consents to the examination of the records summoned.
(3) *Reimbursement of costs.* Recordkeepers may be entitled to reimbursement of their costs of assembling and preparing to produce summoned records, to the extent allowed by [26 U.S.C. 7610](https://www.govinfo.gov/link/uscode/26/7610), even if the summons ultimately is not enforced.
([26 U.S.C. 7609](https://www.govinfo.gov/link/uscode/26/7609))
\[T.D. ATF-301, [55 FR 47608](https://www.federalregister.gov/citation/55-FR-47608), Nov. 14, 1990]
#### § 70.27 Right to intervene; right to institute a proceeding to quash.
(a) *Notified person.* Under [26 U.S.C. 7609(a)](https://www.govinfo.gov/link/uscode/26/7609), the Bureau must give a notice of summons to any person, other than the person summoned, who is identified in the description of the books and records contained in the summons in order that such person may contest the right of the Bureau to examine the summoned records by instituting a proceeding to quash the summons. Thus, if the Bureau issues a summons to a bank requesting checking account records of more than one person all of whom are identified in the description of the records contained in the summons, then all such persons are notified persons entitled to notice under [26 U.S.C. 7609(a)](https://www.govinfo.gov/link/uscode/26/7609). Therefore, if the Bureau requests the records of a joint bank account of A and B, both of whom are named in the summons, then both A and B are notified persons entitled to notice under [26 U.S.C. 7609(a)](https://www.govinfo.gov/link/uscode/26/7609).
(b) *Right to institute a proceeding to quash* —
(1) *In general.* Title 26 U.S.C. 7609(b) grants a notified person the right to institute a proceeding to quash the summons in the United States district court for the district within which the person summoned resides or is found. Jurisdiction of the court is based on [26 U.S.C. 7609(b)](https://www.govinfo.gov/link/uscode/26/7609). The act of filing a petition in district court does not in and of itself institute a proceeding to quash under [26 U.S.C. 7609(b)(2)](https://www.govinfo.gov/link/uscode/26/7609). Rather, the filing of the petition must be coupled with notice as required by [26 U.S.C. 7609(b)(2)(B)](https://www.govinfo.gov/link/uscode/26/7609).
(2) *Elements of institution of a proceeding to quash.* In order to institute a proceeding to quash a summons, the notified person (or the notified person's agent, nominee, or other person acting under the direction or control of the notified person) must, not later than the 20th day following the day the notice of the summons was served on or mailed to such notified person:
(i) File a petition to quash in the name of the notified person in a district court having jurisdiction.
(ii) Notify the Bureau by sending a copy of that petition by registered or certified mail to the Bureau employee and office designated to receive the copy in the notice of summons that was given to the notified person, and
(iii) Notify the recordkeeper by sending to that recordkeeper by registered or certified mail a copy of the petition.
Failure to give timely notice to either the summoned party or the Bureau in the manner described in this paragraph means that the notified person has failed to institute a proceeding to quash and the district court has no jurisdiction to hear the proceeding. Thus, for example, if the notified person mails a copy of the petition to the summoned person but not to the designated Bureau employee and office, the notified person has failed to institute a proceeding to quash. Similarly, if the notified person mails a copy of such petition to the summoned person, but instead of sending a copy of the petition by registered or certified mail to the designated employee and office, the notified person gives the designated employee and office the petition by some other means, the notified person has failed to institute a proceeding to quash.
(3) *Failure to institute a proceeding to quash.* If the notified person fails to institute a proceeding to quash within 20 days following the day the notice was served on or mailed to such notified person, the Bureau may examine the summoned records following the 23rd day after notice of the summons was served on or mailed to the notified person (see [26 U.S.C. 7609(d)(1)](https://www.govinfo.gov/link/uscode/26/7609)).
(c) *Presumption no notice has been mailed.* Title 26 U.S.C. 7609(b)(2)(B) permits a notified person to institute a proceeding to quash by filing a petition in district court and notifying both the Bureau and the summoned person. Unless the notified person has notified both the Bureau and the summoned person in the appropriate manner, the notified person has failed to institute a proceeding to quash. If the copy of the petition has not been delivered to the summoned person or the person and office designated to receive the notice on behalf of the Bureau within 3 days from the close of the 20-day period allowed to institute a proceeding to quash, it is presumed that the notification has not been timely mailed.
([26 U.S.C. 7609](https://www.govinfo.gov/link/uscode/26/7609))
\[T.D. ATF-301, [55 FR 47609](https://www.federalregister.gov/citation/55-FR-47609), Nov. 14, 1990]
#### § 70.28 Summonses excepted from [26 U.S.C. 7609](https://www.govinfo.gov/link/uscode/26/7609) procedures.
(a) *In aid of the collection of certain liabilities* —
(1) *In general.* Title 26 U.S.C. 7609(c)(2)(B) contains an exception to the general notice requirement when a summons is issued to a third-party recordkeeper. That section excepts summonses issued in aid of the collection of the liability of any person against whom an assessment has been made or judgment rendered or the liability at law or in equity of any transferee of such a person.
(2) *Examples.* Examples of summonses referred to in [paragraph (a)(1)](/current/title-27/section-70.28#p-70.28\(a\)\(1\)) of this section are:
(i) Summonses issued to determine the amount held in a bank in the name of a person against whom an assessment has been made or judgment rendered;
(ii) Summonses issued to enforce transferee liability for a tax which has been assessed.
(b) *Numbered account (or similar arrangement).* Under [26 U.S.C. 7609(c)(2)](https://www.govinfo.gov/link/uscode/26/7609), a summons issued solely to determine the identity of a person having a numbered account (or similar arrangement) with a bank or other institution is excepted from the requirements of [26 U.S.C. 7609](https://www.govinfo.gov/link/uscode/26/7609). A “numbered account (or similar arrangement)” under [26 U.S.C. 7609(c)(2)](https://www.govinfo.gov/link/uscode/26/7609) is an account through which a person may authorize transactions solely through the use of a number, symbol, code name, or other device not involving the disclosure of the person's identity. A “person having a numbered account (or similar arrangement)” includes the person who opened the account and any person authorized to use the account or to receive records or statements concerning it.
([26 U.S.C. 7609](https://www.govinfo.gov/link/uscode/26/7609))
\[T.D. ATF-301, [55 FR 47610](https://www.federalregister.gov/citation/55-FR-47610), Nov. 14, 1990]
#### § 70.29 Suspension of statutes of limitations.
(a) *Suspension while a proceeding under [26 U.S.C. 7609(b)](https://www.govinfo.gov/link/uscode/26/7609) is pending.* Under [26 U.S.C. 7609(e)(1)](https://www.govinfo.gov/link/uscode/26/7609), the statutes of limitations of [26 U.S.C. 6501](https://www.govinfo.gov/link/uscode/26/6501) and [6531](https://www.govinfo.gov/link/uscode/26/6531) are suspended if a notified person with respect to whose liability a summons is issued, or the notified person's agent, nominee, or other person acting under the direction or control of the notified person, takes any action as provided in [26 U.S.C. 7609(b)](https://www.govinfo.gov/link/uscode/26/7609).
(1) *Agent, nominee, etc.* A person is a notified person's agent, nominee, or other person acting under the direction or control of a notified person for purposes of [26 U.S.C. 7609(e)](https://www.govinfo.gov/link/uscode/26/7609) if the person with respect to whose liability the summons is issued has the ability in fact or at law to cause the agent, etc., to take the actions permitted under [26 U.S.C. 7609(b)](https://www.govinfo.gov/link/uscode/26/7609). Thus, in the case of a corporation, direction or control by the notified person may exist even though less than 50 percent of the voting power of the corporation is held by the notified person.
(2) *Period during which a proceeding, etc., is pending.* Under [26 U.S.C. 7609(e)](https://www.govinfo.gov/link/uscode/26/7609), the statute of limitations shall be suspended for the period during which a proceeding and any appeals regarding the enforcement of such summons is pending. This period begins on the date the petition to quash the summons is filed in district court. The period continues until all appeals are disposed of, or until the expiration of the period in which an appeal may be taken or a request for a rehearing may be made. Full compliance, partial compliance, and noncompliance have no effect on the suspension provisions. The periods of limitations which are suspended under [26 U.S.C. 7609(e)](https://www.govinfo.gov/link/uscode/26/7609) are those which apply to the taxable periods to which the summons relates.
(3) *Taking of action as provided in [26 U.S.C. 7609(b)](https://www.govinfo.gov/link/uscode/26/7609).* Title 26 U.S.C. 7609(b) allows intervention by a notified person as a matter of right upon compliance with the Federal Rules of Civil Procedure. The phrase “takes any action as provided in subsection (b)”, found in [26 U.S.C. 7609(e)](https://www.govinfo.gov/link/uscode/26/7609), includes any intervention whether or not [26 U.S.C. 7609(b)](https://www.govinfo.gov/link/uscode/26/7609) is specifically mentioned in the order of the court allowing intervention. The phrase also includes the fulfilling of only part of the requirements of [26 U.S.C. 7609(b)(2)](https://www.govinfo.gov/link/uscode/26/7609), relating to the right of a person to institute a proceeding to quash. Thus, for instance, if a notified person notifies a person who has been summoned by sending a copy of the petition by registered or certified mail but does not mail a copy of that notice to the appropriate person and office under [26 U.S.C. 7609(b)(2)(B)](https://www.govinfo.gov/link/uscode/26/7609), the notified person has taken an action under [26 U.S.C. 7609(e)](https://www.govinfo.gov/link/uscode/26/7609).
(b) *Suspension after 6 months of service of summons.* In the absence of the resolution of the third-party recordkeeper's response to the summons described in [26 U.S.C. 7609(c)](https://www.govinfo.gov/link/uscode/26/7609) or the summoned party's response to a summons described in [26 U.S.C. 7609(f)](https://www.govinfo.gov/link/uscode/26/7609) the running of any period of limitations under [26 U.S.C. 6501](https://www.govinfo.gov/link/uscode/26/6501) or under [26 U.S.C. 6531](https://www.govinfo.gov/link/uscode/26/6531) with respect to any person with respect to whose liability the summons is issued (other than a person taking action as provided in [26 U.S.C. 7609(b)](https://www.govinfo.gov/link/uscode/26/7609)) shall be suspended for the period:
(1) Beginning on the date which is 6 months after the service of such summons, and
(2) Ending with the final resolution of such response.
([26 U.S.C. 7609](https://www.govinfo.gov/link/uscode/26/7609))
\[T.D. ATF-301, [55 FR 47610](https://www.federalregister.gov/citation/55-FR-47610), Nov. 14, 1990]
#### § 70.30 Time and place of examination.
(a) *Time and place.* The time and place of examination pursuant to the provisions of [26 U.S.C. 7602](https://www.govinfo.gov/link/uscode/26/7602) must be such time and place as may be fixed by an appropriate TTB officer and as are reasonable under the circumstances. The date fixed for appearance shall not be less than 10 days from the date of the summons.
(b) *Restrictions on examination of taxpayer.* No taxpayer is to be subjected to unnecessary examination or investigations, and only one inspection of a taxpayer's books of account shall be made for each taxable year unless the taxpayer requests otherwise or unless an authorized internal revenue or an appropriate TTB officer, after investigation, notifies the taxpayer in writing that an additional inspection is necessary.
(68A Stat. 902, as amended ([26 U.S.C. 7605](https://www.govinfo.gov/link/uscode/26/7605)))
\[T.D. ATF-450, [66 FR 29023](https://www.federalregister.gov/citation/66-FR-29023), May 29, 2001]
#### § 70.31 Entry of premises for examination of taxable objects.
(a) *General.* An appropriate TTB officer may, in the performance of his or her duty, enter in the daytime any building or place where any articles or objects subject to tax are made, produced, or kept, so far as it may be necessary for the purpose of examining said articles or objects and also enter at night any such building or place, while open, for a similar purpose.
(b) *Distilled spirits plants.* Any appropriate TTB officer may, at all times, as well by night as by day, enter any plant or any other premises where distilled spirits are produced or rectified, or structure or place used in connection therewith for storage or other purposes; to make examination of the materials, equipment and facilities thereon; and make such gauges and inventories as such officer deems necessary. Whenever any appropriate TTB officer, having demanded admittance, and having declared his or her name and office, is not admitted to such premises by the proprietor or other person having charge thereof, such officer may at all times, use such force as is necessary for such officer to gain entry to such premises.
(c) *Authority to break up grounds.* An appropriate TTB officer, and any person acting in his or her aid, may break up the ground on any part of a distilled spirits plant, or any other premises where spirits are produced or rectified, or any ground adjoining or near to such plant or premises, or any wall or partition thereof, or belonging thereto, or other place, to search for any pipe, cock, private conveyance, or utensil; and, upon finding any such pipe or conveyance leading therefrom or thereto, to break up any ground, house, wall, or other place through or into which such pipe or other conveyance leads, and to break or cut away such pipe or other conveyance, and turn any cock, or to determine whether such pipe or other conveyance conveys or conceals any spirits, mash, wort, or beer, or other liquor, from the sight or view of the appropriate TTB officer, so as to prevent or hinder such officer from taking a true account thereof.
(68A Stat. 903, 72 Stat. 1357 ([26 U.S.C. 7606](https://www.govinfo.gov/link/uscode/26/7606), [5203](https://www.govinfo.gov/link/uscode/26/5203)))
\[T.D. ATF-450, [66 FR 29023](https://www.federalregister.gov/citation/66-FR-29023), May 29, 2001]
#### § 70.32 Examination of records and objects.
Any appropriate TTB officer may enter, during business hours, the premises of any regulated establishment for the purpose of inspecting and examining any records, articles, or other objects required to be kept by such establishment under [18 U.S.C. chapter 40](https://www.govinfo.gov/link/uscode/18/4001) or 44, or provisions of 26 U.S.C. enforced and administered by the Bureau, or regulations issued pursuant thereto.
(68A Stat. 715, as amended, 903, 72 Stat. 1348, 1361, 1373, 1381, 1390, 1391, 1395, 82 Stat. 231, as amended, 84 Stat. 955; ([26 U.S.C. 5741](https://www.govinfo.gov/link/uscode/26/5741), [7606](https://www.govinfo.gov/link/uscode/26/7606), [5146](https://www.govinfo.gov/link/uscode/26/5146), [5207](https://www.govinfo.gov/link/uscode/26/5207), [5275](https://www.govinfo.gov/link/uscode/26/5275), [5367](https://www.govinfo.gov/link/uscode/26/5367), [5415](https://www.govinfo.gov/link/uscode/26/5415), [5504](https://www.govinfo.gov/link/uscode/26/5504), [5555](https://www.govinfo.gov/link/uscode/26/5555), [18 U.S.C. 923](https://www.govinfo.gov/link/uscode/18/923), [843](https://www.govinfo.gov/link/uscode/18/843)))
\[T.D. ATF-331, [57 FR 40328](https://www.federalregister.gov/citation/57-FR-40328), Sept. 3, 1992, as amended by T.D. ATF-450, [66 FR 29023](https://www.federalregister.gov/citation/66-FR-29023), May 29, 2001]
#### § 70.33 Authority of enforcement officers of the Bureau.
Appropriate TTB officers may perform the following functions:
(a) Carry firearms;
(b) Execute and serve search warrants and arrest warrants, and serve subpoenas and summonses issued under authority of the United States;
(c) In respect to the performance of such duty, make arrests without warrant for any offense against the United States committed in their presence, or for any felony cognizable under the laws of the United States if they have reasonable grounds to believe that the person to be arrested has committed, or is committing, such felony; and
(d) In respect to the performance of such duty, make seizures of property subject to forfeiture to the United States.
(53 Stat. 1291, 62 Stat. 840, 68 Stat. 848, as amended, 72 Stat. 1429, as amended, 82 Stat. 233, as amended, 84 Stat. 956 ([49 U.S.C. 782](https://www.govinfo.gov/link/uscode/49/782), [18 U.S.C. 3615](https://www.govinfo.gov/link/uscode/18/3615), [22 U.S.C. 1934](https://www.govinfo.gov/link/uscode/22/1934), [26 U.S.C. 7608](https://www.govinfo.gov/link/uscode/26/7608), [18 U.S.C. 924](https://www.govinfo.gov/link/uscode/18/924), [844](https://www.govinfo.gov/link/uscode/18/844)); [26 U.S.C. 7805](https://www.govinfo.gov/link/uscode/26/7805) (68A Stat. 917), [27 U.S.C. 205](https://www.govinfo.gov/link/uscode/27/205) (49 Stat. 981 as amended), [18 U.S.C. 926](https://www.govinfo.gov/link/uscode/18/926) (82 Stat. 959), and sec. 38, Arms Export Control Act ([22 U.S.C. 2778](https://www.govinfo.gov/link/uscode/22/2778), [90](https://www.govinfo.gov/link/uscode/22/90) Stat. 744))
\[T.D. ATF-6, [38 FR 32445](https://www.federalregister.gov/citation/38-FR-32445), Nov. 26, 1973, as amended by T.D. ATF-48, [43 FR 13531](https://www.federalregister.gov/citation/43-FR-13531), Mar. 31, 1978. Redesignated by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), Nov. 14, 1990; T.D. ATF-450, [66 FR 29023](https://www.federalregister.gov/citation/66-FR-29023), May 29, 2001; T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
#### § 70.34 Listing by appropriate TTB officers of taxable objects owned by nonresidents.
Whenever there are any articles in any internal revenue district subject to tax, which are not owned or possessed by, or under the care or control of, any person within such district, and of which no list has been transmitted to the appropriate TTB officer, as required by law or by regulations prescribed pursuant to law, an appropriate TTB officer shall enter the premises where such articles are situated, make such inspection of the articles as may be necessary, and make lists of the same according to the forms prescribed. Such lists, being subscribed by the appropriate TTB officer, are sufficient lists of such articles for all purposes.
\[T.D. ATF-450, [66 FR 29023](https://www.federalregister.gov/citation/66-FR-29023), May 29, 2001]
### General Powers and Duties
#### § 70.40 Authority to administer oaths and certify.
Appropriate TTB officers are authorized to administer such oaths or affirmations and to certify to such papers as may be necessary under the tax laws administered by the Bureau, the Federal Alcohol Administration Act, or regulations issued thereunder, except that the authority to certify must not be construed as applying to those papers or documents the certification of which is authorized by separate order or directive.
(68A Stat. 904 ([26 U.S.C. 7622](https://www.govinfo.gov/link/uscode/26/7622)))
\[T.D. ATF-450, [66 FR 29023](https://www.federalregister.gov/citation/66-FR-29023), May 29, 2001]
#### § 70.41 \[Reserved]
#### § 70.42 Returns prepared or executed by appropriate TTB officers.
(a) *Preparation of returns* —
(1) *General.* If any person, required by provisions of 26 U.S.C. enforced and administered by the Bureau or by the regulations prescribed thereunder to make a return, fails to make such return, it may be prepared by an appropriate TTB officer provided the person required to make the return consents to disclose all information necessary for the preparation of such return. The return upon being signed by the person required to make it must be received by the appropriate TTB officer, as the return of such person.
(2) *Responsibility of person for whom return is prepared.* A person for whom a return is prepared in accordance with [paragraph (a)(1)](/current/title-27/section-70.42#p-70.42\(a\)\(1\)) of this section shall for all legal purposes remain responsible for the correctness of the return to the same extent as if the return had been prepared by such person.
(b) *Execution of returns* —
(1) *General.* If any person, required by provisions of 26 U.S.C. enforced and administered by the Bureau or by the regulations prescribed thereunder to make a return, fails to make a return at the time prescribed therefor, or makes, willfully or otherwise, a false or fraudulent return, the appropriate TTB officer must make such return from such officer's own knowledge and from such information as the officer can obtain through testimony or otherwise.
(2) *Status of returns.* Any return made in accordance with [paragraph (b)(1)](/current/title-27/section-70.42#p-70.42\(b\)\(1\)) of this section and subscribed by the appropriate TTB officer is prima facie good and sufficient for all legal purposes.
(c) *Cross references.*
(1) For provisions that the return executed by an appropriate TTB officer will not start the running of the period of limitations on assessment and collection, see [26 U.S.C. 6501(b)(3)](https://www.govinfo.gov/link/uscode/26/6501) and [§ 70.222(b) of this part](/current/title-27/part-70/section-70.222#p-70.222\(b\)).
(2) For additions to the tax and additional amounts for failure to file returns, see section 6651 of the Internal Revenue Code.
(3) For additions to the tax for failure to pay tax, see sections 5684, 5761, and 6653 of the Internal Revenue Code.
(4) For failure to make deposit of taxes or overstatement of deposit claims, see section 6656 of the Internal Revenue Code.
(5) For an additional penalty for tendering a bad check or money order, see section 6657 of the Internal Revenue Code.
(6) For certain failures to pay tax with respect to cases pending under Title 11 of the United States Code, see section 6658 of the Internal Revenue Code.
(7) For failure to supply identifying numbers, see section 6676 of the Internal Revenue Code.
(8) For penalties for aiding and abetting understatement of tax liability, see section 6701 of the Internal Revenue Code.
(9) For criminal penalties for willful failure to make returns, see sections 7201, 7202, and 7203 of the Internal Revenue Code.
(10) For criminal penalties for willfully making false or fraudulent returns, see sections 7206 and 7207 of the Internal Revenue Code.
(11) For authority to examine books and witnesses, see section 7602 of the Internal Revenue Code and [§ 70.22](/current/title-27/section-70.22).
([26 U.S.C. 6020](https://www.govinfo.gov/link/uscode/26/6020))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated and amended by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), [47610](https://www.federalregister.gov/citation/55-FR-47610), Nov. 14, 1990; T.D. ATF-450, [66 FR 29024](https://www.federalregister.gov/citation/66-FR-29024), May 29, 2001]
## Subpart D—Collection of Excise and Special (Occupational) Tax
### Collection—General Provisions
#### § 70.51 Collection authority.
The taxes imposed by provisions of 26 U.S.C. enforced and administered by the Bureau must be collected by appropriate TTB officers.
([26 U.S.C. 6301](https://www.govinfo.gov/link/uscode/26/6301))
\[T.D. ATF-450, [66 FR 29024](https://www.federalregister.gov/citation/66-FR-29024), May 29, 2001]
#### § 70.52 Signature presumed authentic.
An individual's name signed to a return, statement, or other document shall be prima facie evidence for all purposes that the return, statement or other document was actually signed by that individual.
([26 U.S.C. 6064](https://www.govinfo.gov/link/uscode/26/6064))
\[T.D. ATF-301, [55 FR 47611](https://www.federalregister.gov/citation/55-FR-47611), Nov. 14, 1990]
### Receipt of Payment
#### § 70.61 Payment by check or money order.
(a) *Authority to Receive* —
(1) *General.*
(i) The appropriate TTB officer may accept checks drawn on any bank or trust company incorporated under the laws of the United States or under the laws of any State, Territory, or possession of the United States, or money orders in payment for internal revenue taxes, provided such checks or money orders are collectible in U.S. currency at par, and subject to the further provisions contained in this section. The appropriate TTB officer may accept such checks or money orders in payment for internal revenue stamps (authorized under Subtitle E of the Internal Revenue Code or any provision of Subtitle F which relates to Subtitle E) to the extent and under the conditions prescribed in [paragraph (a)(2)](/current/title-27/section-70.61#p-70.61\(a\)\(2\)) of this section. A check or money order in payment for internal revenue taxes or internal revenue stamps should be made payable to the Alcohol and Tobacco Tax and Trade Bureau. A check or money order is payable at par only if the full amount thereof is payable without any deduction for exchange or other charges. As used in this section, the term “money order” means:
(A) U.S. postal, bank, express, or telegraph money order; and
(B) Money order issued by a domestic building and loan association (as defined in section 7701(a)(19) of the Internal Revenue Code) or by a similar association incorporated under the laws of a possession of the United States;
(C) A money order issued by such other organization as the appropriate TTB officer may designate; and
(D) A money order described in [paragraph (a)(1)(ii)](/current/title-27/section-70.61#p-70.61\(a\)\(1\)\(ii\)) of this section in cases therein described. However, the appropriate TTB officers may refuse to accept any personal check whenever there is good reason to believe that such check will not be honored upon presentment.
(ii) An American citizen residing in a country with which the United States maintains direct exchange of money orders on a domestic basis may pay his/her tax by postal money order of such country. For a list of such countries, see [section 171.27](/current/title-27/section-171.27) of the Postal Manual of the United States.
(iii) If one check or money order is remitted to cover two or more persons' taxes, the remittance should be accompanied by a letter of transmittal clearly identifying—
(A) Each person whose tax is to be paid by the remittance;
(B) The amount of the payment on account of each such person; and
(C) The kind of tax paid.
(2) *Payment for internal revenue stamps—In general.* The appropriate TTB officer may accept checks and money orders described in [paragraph (a)(1)](/current/title-27/section-70.61#p-70.61\(a\)\(1\)) of this section, in payment for internal revenue stamps authorized under Subtitle E of the Internal Revenue Code or under any provision of Subtitle F which relates to Subtitle E. However, the appropriate TTB officer may refuse to accept any personal check whenever there is good reason to believe that the check will not be honored upon presentment.
(3) *Payment of tax on distilled spirits, wine, beer, tobacco products, pistols, revolvers, firearms (other than pistols and revolvers), shells and cartridges; proprietor in default.* Where a check or money order tendered in payment for taxes on distilled spirits, wine or beer products (imposed under Chapter 51 of the Internal Revenue Code), or tobacco products (imposed under chapter 52 of the Internal Revenue Code), or pistols, revolvers, firearms (other than pistols and revolvers), shells and cartridges (imposed under chapter 32 of the Internal Revenue Code) is not paid on presentment, or where a taxpayer is otherwise in default in payment of such taxes, any remittance for such taxes made during the period of such default, and until the appropriate TTB officers finds that the revenue will not be jeopardized by the acceptance of personal checks, shall be in cash, or shall be in the form of a certified, cashier's, or treasurer's check, drawn on any bank or trust company incorporated under the laws of the United States, or under the laws of any State or possession of the United States, or a money order as described in [paragraph (a)(1)](/current/title-27/section-70.61#p-70.61\(a\)\(1\)) of this section.
(b) *Checks or money orders not paid* —
(1) *Ultimate liability.* The person who tenders any check (whether certified or uncertified, cashier's, treasurer's, or other form of check) or money order in payment for taxes is not released from liability until the check or money order is paid; and, if the check or money order is not duly paid, the person shall also be liable for all legal penalties and additions, to the same extent as if such check or money order had not been tendered. For the penalty in case a check or money order is not duly paid, see section 6657 of the Internal Revenue Code. For assessment of the amount of a check or money order not duly paid see section 6201(a)(2)(B) of the Internal Revenue Code.
(2) *Liability of banks and others.* If any certified, treasurer's, or cashier's check (or other guaranteed draft) or money order is not duly paid, the United States shall have a lien for the amount of such check upon all assets of the bank or trust company on which drawn or for the amount of such money order upon the assets of the issuer thereof. The unpaid amount shall be paid out of such assets in preference to any other claims against such bank or issuer except the necessary costs and expenses of administration and the reimbursement of the United States for the amount expended in the redemption of the circulating notes of such bank. In addition, the Government has the right to exact payment from the person required to make the payment.
([26 U.S.C. 6311](https://www.govinfo.gov/link/uscode/26/6311))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), Nov. 14, 1990; T.D. ATF-331, [57 FR 40328](https://www.federalregister.gov/citation/57-FR-40328), Sept. 3, 1992; T.D. ATF-353, [59 FR 2522](https://www.federalregister.gov/citation/59-FR-2522), Jan. 18, 1994]
#### § 70.62 Fractional parts of a cent.
In the payment of any tax, a fractional part of a cent shall be disregarded unless it amounts to one-half cent or more, in which case it shall be increased to one cent. Fractional parts of a cent shall not be disregarded in the computation of taxes.
([26 U.S.C. 6313](https://www.govinfo.gov/link/uscode/26/6313))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), Nov. 14, 1990]
#### § 70.63 Computations on returns or other documents.
(a) *Amounts shown on forms.* To the extent permitted by any TTB form or instructions prescribed for use with respect to any TTB return, declaration, statement, or other document, or supporting schedules, any amount required to be reported in such form may be entered at the nearest whole dollar amount. The extent to which, and the conditions under which, such whole dollar amounts may be entered on any form will be set forth in the instructions issued with respect to such form. For the purpose of the computation to the nearest dollar, a fractional part of a dollar shall be disregarded unless it amounts to one-half dollar or more, in which case the amount (determined without regard to the fractional part of a dollar) shall be increased by \$1. The following illustrates the application of this paragraph:
| Exact amount | To be reported as |
| ------------ | ----------------- |
| \$18.49 | \$18 |
| \$18.50 | 19 |
| \$18.51 | 19 |
(b) *Election not to use whole dollar amounts* —
(1) *Method of election.* Where any TTB form, or the instructions issued with respect to such form, provide that whole dollar amounts shall be reported, any person making a return, declaration, statement, or other document on such form may elect not to use whole dollar amounts by reporting thereon all amounts in full, including cents.
(2) *Time of election.* The election not to use whole dollar amounts must be made at the time of filing the return, declaration, statement, or other document. Such election may not be revoked after the time prescribed for filing such return, declaration, statement, or other document, including extensions of time granted for such filing. Such election may be made on any return, declaration, statement, or other document which is filed after the time prescribed for filing (including extensions of time), and such an election is irrevocable.
(3) *Effect of election.* The taxpayer's election shall be binding only on the return, declaration, statement, or other document filed for a taxable year or period, and a new election may be made on the return, declaration, statement, or other document filed for a subsequent taxable year or period.
(4) *Fractional part of a cent.* For treatment of the fractional part of a cent in the payment of taxes, see [26 U.S.C. 6313](https://www.govinfo.gov/link/uscode/26/6313) and [§ 70.62 of this part](/current/title-27/part-70/section-70.62).
(c) *Inapplicability to computation of amount.* The provisions of [paragraph (a)](/current/title-27/section-70.63#p-70.63\(a\)) of this section apply only to amounts required to be reported on a return, declaration, statement, or other document. They do not apply to items which must be taken into account in making the computations necessary to determine such amounts. For example, each item of liability must be taken into account at its exact amount, including cents, in computing the amount of total liability required to be reported on a tax return or supporting schedule. It is the amount of total liability, so computed, which is to be reported at the nearest whole dollar on the return or supporting schedule.
([26 U.S.C. 6102](https://www.govinfo.gov/link/uscode/26/6102))
\[T.D. ATF-301, [55 FR 47611](https://www.federalregister.gov/citation/55-FR-47611), Nov. 14, 1990]
#### § 70.64 Receipt for taxes.
The appropriate TTB officer must, upon request, issue a receipt for each tax payment made (other than a payment for stamps sold or delivered). In addition, an appropriate TTB officer or employee must issue a receipt for each payment of 1 dollar or more made in cash, whether or not requested. In the case of payments made by check, the canceled check is usually a sufficient receipt. No receipt shall be issued in lieu of a stamp representing a tax, whether the payment is in cash or otherwise.
([26 U.S.C. 6314](https://www.govinfo.gov/link/uscode/26/6314))
\[T.D. ATF-301, [55 FR 47611](https://www.federalregister.gov/citation/55-FR-47611), Nov. 14, 1990, as amended by T.D. ATF-450, [66 FR 29024](https://www.federalregister.gov/citation/66-FR-29024), May 29, 2001]
#### § 70.65 Use of commercial banks.
For provisions relating to the use of commercial banks and electronic fund transfer of taxpayment to the Treasury Account, see the regulations relating to the particular tax.
(Aug. 16, 1954, ch. 736, 68A Stat. 775 ([26 U.S.C. 6301](https://www.govinfo.gov/link/uscode/26/6301)); June 29, 1956, ch. 462, 70 Stat. 391 ([26 U.S.C. 6301](https://www.govinfo.gov/link/uscode/26/6301)))
\[T.D. ATF-77, [46 FR 3002](https://www.federalregister.gov/citation/46-FR-3002), Jan. 13, 1981. Redesignated by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), Nov. 14, 1990]
### Assessment
#### § 70.71 Assessment authority.
The appropriate TTB officers are authorized and required to make all inquiries necessary to the determination and assessment of all taxes imposed under the provisions of 26 U.S.C. enforced and administered by the Bureau. The appropriate TTB officers are further authorized and required to make the determinations and the assessments of such taxes. The term “taxes” includes interest, additional amounts, additions to the taxes, and assessable penalties. The authority of the appropriate TTB officers to make assessment includes the following:
(a) *Taxes shown on return.* The appropriate TTB officer shall assess all taxes determined by the taxpayer or by the appropriate TTB officer and disclosed on a return or list.
(b) *Unpaid taxes payable by stamp.*
(1) If without use of the proper stamp:
(i) Any article upon which a tax is required to be paid by means of a stamp is sold or removed for sale or use by the manufacturer thereof, or
(ii) Any transaction or act upon which a tax is required to be paid by means of a stamp occurs, the appropriate TTB officer, upon such information as can be obtained, must estimate the amount of the tax which has not been paid and the appropriate TTB officer must make assessment therefor upon the person the appropriate TTB officer determines to be liable for the tax. However, the appropriate TTB officer may not assess any tax which is payable by stamp unless the taxpayer fails to pay such tax at the time and in the manner provided by law or regulations.
(2) If a taxpayer gives a check or money order as a payment for stamps but the check or money order is not paid upon presentment, then the appropriate TTB officer shall assess the amount of the check or money order against the taxpayer as if it were a tax due at the time the check or money order was received by appropriate TTB officer.
([26 U.S.C. 6201](https://www.govinfo.gov/link/uscode/26/6201))
\[T.D. ATF-301, [55 FR 47611](https://www.federalregister.gov/citation/55-FR-47611), Nov. 14, 1990]
#### § 70.72 Method of assessment.
The assessment shall be made by an appropriate TTB officer signing the summary record of assessment. The summary record, through supporting records, shall provide identification of the taxpayer, the character of the liability assessed, the taxable period, if applicable, and the amount of the assessment. The amount of the assessment shall, in the case of tax shown on a return by the taxpayer, be the amount so shown, and in all other cases the amount of the assessment shall be the amount shown on the supporting list or record. The date of the assessment is the date the summary record is signed by an appropriate TTB officer. If the taxpayer requests a copy of the record of assessment, the taxpayer shall be furnished a copy of the pertinent parts of the assessment which set forth the name of the taxpayer, the date of assessment, the character of the liability assessed, the taxable period, if applicable, and the amounts assessed.
([26 U.S.C. 6203](https://www.govinfo.gov/link/uscode/26/6203))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated and amended by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), [47612](https://www.federalregister.gov/citation/55-FR-47612), Nov. 14, 1990; T.D. ATF-450, [66 FR 29025](https://www.federalregister.gov/citation/66-FR-29025), May 29, 2001]
#### § 70.73 Supplemental assessments.
If any assessment is incomplete or incorrect in any material respect, the appropriate TTB officer, subject to the applicable period of limitation, may make a supplemental assessment for the purpose of correcting or completing the original assessment.
([26 U.S.C. 6204](https://www.govinfo.gov/link/uscode/26/6204))
\[T.D. ATF-301, [55 FR 47612](https://www.federalregister.gov/citation/55-FR-47612), Nov. 14, 1990]
#### § 70.74 Request for prompt assessment.
(a) Except as otherwise provided in [§ 70.223 of this part](/current/title-27/part-70/section-70.223), any tax for which a return is required and for which:
(1) A decedent or an estate of a decedent may be liable, or
(2) A corporation which is contemplating dissolution, is in the process of dissolution, or has been dissolved, may be liable, shall be assessed, or a proceeding in court without assessment for the collection of such tax shall be begun, within 18 months after the receipt of a written request for prompt assessment thereof.
(b) The executor, administrator, or other fiduciary representing the estate of the decedent, or the corporation, or the fiduciary representing the dissolved corporation, as the case may be, shall, after the return in question has been filed, file the request for prompt assessment in writing with the appropriate TTB officer. The request, in order to be effective, must be transmitted separately from any other document, must set forth the classes of tax and the taxable periods for which the prompt assessment is requested, and must clearly indicate that it is a request for prompt assessment under the provisions of [26 U.S.C. 6501(d)](https://www.govinfo.gov/link/uscode/26/6501). The effect of such a request is to limit the time in which an assessment of tax may be made, or a proceeding in court without assessment for collection of tax may be begun, to a period of 18 months from the date the request is filed with the appropriate TTB officer. The request does not extend the time within which an assessment may be made, or a proceeding in court without assessment shall be begun, after the expiration of 3 years from the date the return was filed. This special period of limitations will not apply to any return filed after a request for prompt assessment has been made unless an additional request is filed in the manner provided herein.
(c) In the case of a corporation the 18-month period shall not apply unless:
(1) The written request notifies the appropriate TTB officer that the corporation contemplates dissolution at or before the expiration of such 18-month period; the dissolution is in good faith begun before the expiration of such 18-month period; and the dissolution so begun is completed either before or after the expiration of such 18-month period; or
(2) The written request notifies the appropriate TTB officer that a dissolution has in good faith begun, and the dissolution is completed either before or after the expiration of such 18-month period; or
(3) A dissolution has been completed at the time the written request is made.
([26 U.S.C. 6501(d)](https://www.govinfo.gov/link/uscode/26/6501))
\[T.D. ATF-301, [55 FR 47612](https://www.federalregister.gov/citation/55-FR-47612), Nov. 14, 1990, as amended by T.D. ATF-353, [59 FR 2522](https://www.federalregister.gov/citation/59-FR-2522), Jan. 18, 1994]
#### § 70.75 Jeopardy assessment of alcohol, tobacco, and firearms taxes.
(a) If the appropriate TTB officer believes that the collection of any tax imposed under provisions of 26 U.S.C. enforced and administered by the Bureau will be jeopardized by delay, the appropriate TTB officer must, whether or not the time otherwise prescribed by law for filing the return or paying such tax has expired, immediately assess such tax, together with all interest, additional amounts and additions to the tax provided by law. An appropriate TTB officer will make an assessment under this section if collection is determined to be in jeopardy because at least one of the following conditions exists.
(1) The taxpayer is or appears to be designing quickly to depart from the United States or to conceal himself or herself.
(2) The taxpayer is or appears to be designing quickly to place the taxpayer's property beyond the reach of the Government either by removing it from the United States, by concealing it, or by dissipating it, or by transferring it to other persons.
(3) The taxpayer's financial solvency is or appears to be threatened.
(b) The tax, interest, additional amounts, and additions to the tax will, upon assessment, become immediately due and payable, and the appropriate TTB officer shall, without delay, issue a notice and demand for payment thereof in full.
(c) See [26 U.S.C. 7429](https://www.govinfo.gov/link/uscode/26/7429) with respect to requesting the appropriate TTB officer to review the making of the jeopardy assessment.
(d) For provisions relating to stay of collection of jeopardy assessments, see [§ 70.76 of this part](/current/title-27/part-70/section-70.76).
([26 U.S.C. 6862](https://www.govinfo.gov/link/uscode/26/6862) and [6863](https://www.govinfo.gov/link/uscode/26/6863))
\[T.D. ATF-301, [55 FR 47612](https://www.federalregister.gov/citation/55-FR-47612), Nov. 14, 1990, as amended by T.D. ATF-450, [66 FR 29025](https://www.federalregister.gov/citation/66-FR-29025), May 29, 2001]
#### § 70.76 Stay of collection of jeopardy assessment; bond to stay collection.
(a) The collection of taxes assessed under [26 U.S.C. 6862](https://www.govinfo.gov/link/uscode/26/6862) (referred to as a “jeopardy assessment” for purposes of this section) of any tax may be stayed by filing with the appropriate TTB officer a bond on the form to be furnished by TTB upon request.
(b) The bond may be filed:
(1) At any time before the time collection by levy is authorized under [26 U.S.C. 6331(a)](https://www.govinfo.gov/link/uscode/26/6331), or
(2) After collection by levy is authorized and before levy is made on any property or rights to property, or
(3) In the discretion of the appropriate TTB officer, after any such levy has been made and before the expiration of the period of limitations on collection.
(c) The bond must be in an amount equal to the portion (including interest thereon to the date of payment as calculated by the appropriate TTB officer) of the jeopardy assessment collection of which is sought to be stayed. See [26 U.S.C. 7101](https://www.govinfo.gov/link/uscode/26/7101) and [§ 70.281](/current/title-27/section-70.281), relating to the form of bond and the sureties thereon. The bond shall be conditioned upon the payment of the amount (together with interest thereon), for which the collection is stayed, at the time at which, but for the making of the jeopardy assessment, such amount would be due.
(d) Upon the filing of a bond in accordance with this section, the collection of so much of the assessment as is covered by the bond will be stayed. The taxpayer may at any time waive the stay of collection of the whole or of any part of the amount covered by the bond. If as a result of such waiver any part of the amount covered by the bond is paid, or if any portion of the jeopardy assessment is abated by the appropriate TTB officer, then the bond shall (at the request of the taxpayer) be proportionately reduced.
([26 U.S.C. 6863](https://www.govinfo.gov/link/uscode/26/6863))
\[T.D. ATF-301, [55 FR 47613](https://www.federalregister.gov/citation/55-FR-47613), Nov. 14, 1990]
#### § 70.77 Collection of jeopardy assessment; stay of sale of seized property pending court decision.
(a) *General rule.* In the case of an assessment under [26 U.S.C. 6862](https://www.govinfo.gov/link/uscode/26/6862), and property seized for the collection of such assessment shall not (except as provided in [paragraph (b)](/current/title-27/section-70.77#p-70.77\(b\)) of this section) be sold until the latest of the following occurs:
(1) The period provided in [26 U.S.C. 7429(a)(2)](https://www.govinfo.gov/link/uscode/26/7429) to request the appropriate TTB officer to review the action taken expires.
(2) The period provided in [26 U.S.C. 7429(b)(1)](https://www.govinfo.gov/link/uscode/26/7429) to file an action in U.S. District Court expires if a request for redetermination is made to the appropriate TTB officer.
(3) The U.S. District Court judgment in such action becomes final, if a civil action is begun in accordance with [26 U.S.C. 7429(b)](https://www.govinfo.gov/link/uscode/26/7429).
(b) *Exceptions.* Notwithstanding the provisions of [paragraph (a)](/current/title-27/section-70.77#p-70.77\(a\)) of this section, any property seized may be sold:
(1) If the taxpayer files with the appropriate TTB officer a written consent to the sale, or
(2) If the appropriate TTB officer determines that the expenses of conservation and maintenance of the property will greatly reduce the net proceeds from the sale of such property, or
(3) If the property is of a type to which [26 U.S.C. 6336](https://www.govinfo.gov/link/uscode/26/6336) (relating to sale of perishable goods) is applicable.
([26 U.S.C. 6863](https://www.govinfo.gov/link/uscode/26/6863))
\[T.D. ATF-301, [55 FR 47613](https://www.federalregister.gov/citation/55-FR-47613), Nov. 14, 1990, as amended by T.D. ATF-353, [59 FR 2522](https://www.federalregister.gov/citation/59-FR-2522), Jan. 18, 1994]
### Notice and Demand
#### § 70.81 Notice and demand for tax.
(a) *General rule.* Where it is not otherwise provided by provisions of 26 U.S.C. enforced and administered by the Bureau, the appropriate TTB officer shall, after the making of an assessment of a tax pursuant to [§ 70.71 of this part](/current/title-27/part-70/section-70.71), give notice to each person liable for the unpaid tax, stating the basis for the tax due, the amount of tax, interest, additional amounts, additions to the tax and assessable penalties, and demanding payment thereof. Such notice shall be given as soon as possible and within 60 days. However, the failure to give notice within 60 days does not invalidate the notice. Such notice shall be left at the dwelling or usual place of business of such person, or shall be sent by mail to such person's last known address.
(b) *Assessment prior to last date for payment.* If any tax is assessed prior to the last date prescribed for payment of such tax, demand that such tax be paid will not be made before such last date, except where it is believed collection would be jeopardized by delay.
([26 U.S.C. 6303](https://www.govinfo.gov/link/uscode/26/6303) and [7521](https://www.govinfo.gov/link/uscode/26/7521))
\[T.D. ATF-301, [55 FR 47613](https://www.federalregister.gov/citation/55-FR-47613), Nov. 14, 1990]
#### § 70.82 Payment on notice and demand.
Upon receipt of notice and demand from the appropriate TTB officer, there shall be paid at the place and time stated in such notice the amount of any tax (including any interest, additional amounts, additions to the tax, and assessable penalties) stated in such notice and demand.
([26 U.S.C. 6155](https://www.govinfo.gov/link/uscode/26/6155))
\[T.D. ATF-301, [55 FR 47613](https://www.federalregister.gov/citation/55-FR-47613), Nov. 14, 1990]
### Interest
#### § 70.90 Interest on underpayments.
(a) *General rule.* Interest at the underpayment rate referred to in [§ 70.93 of this part](/current/title-27/part-70/section-70.93) shall be paid on any unpaid amount of tax from the last date prescribed for payment of the tax (determined without regard to any extension of time for payment) to the date on which payment is received.
(b) *Interest on penalties, additional amounts, or additions to the tax* —
(1) *General.* Interest shall be imposed on any assessable penalty, additional amount, or addition to the tax (other than an addition to tax imposed under section 6651(a)(1) of the Internal Revenue Code) only if such assessable penalty, additional amount, or addition to the tax is not paid within 10 days from the date of notice and demand therefor, and in such case interest shall be imposed only for the period from the date of the notice and demand to the date of payment.
(2) *Interest on certain additions to tax.* Interest shall be imposed under this section on any addition to tax imposed by section 6651(a)(1) of the Internal Revenue Code for the period which
(i) begins on the date on which the return of the tax with respect to which such addition to tax is imposed is required to be filed (including any extensions), and
(ii) ends on the date of payment of such addition to tax.
(c) *Payments made within 10 days after notice and demand.* If notice and demand is made for payment of any amount, and if such amount is paid within 10 days after the date of such notice and demand, interest under this section on the amount so paid shall not be imposed for the period after the date of such notice and demand.
(d) *Satisfaction by credits.* If any portion of a tax is satisfied by credit of an overpayment, then no interest shall be imposed under section 6601 of the Internal Revenue Code on the portion of the tax so satisfied for any period during which, if the credit had not been made, interest would have been allowable with respect to such overpayment.
(e) *Last date prescribed for payment.*
(1) In determining the last date prescribed for payment, any extension of time granted for payment of tax shall be disregarded. The granting of an extension of time for the payment of tax does not relieve the taxpayer from liability for the payment of interest thereon during the period of the extension. Thus, except as provided in [paragraph (d)](/current/title-27/section-70.90#p-70.90\(d\)) of this section, interest at the underpayment rate referred to in [§ 70.93 of this part](/current/title-27/part-70/section-70.93) is payable on any unpaid portion of the tax for the period during which such portion remains unpaid by reason of an extension of time for the payment thereof.
(2) In the case of taxes payable by stamp and in all other cases where the last date for payment of the tax is not otherwise prescribed, such last date for the purpose of the interest computation shall be deemed to be the date on which the liability for the tax arose. However, such last date shall in no event be later than the date of issuance of a notice and demand for the tax.
([26 U.S.C. 6601](https://www.govinfo.gov/link/uscode/26/6601))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987, as amended by T.D. ATF-301, [55 FR 47613](https://www.federalregister.gov/citation/55-FR-47613), Nov. 14, 1990]
#### § 70.91 Interest on erroneous refund recoverable by suit.
Any portion of an internal revenue tax (or any interest, assessable penalty, additional amount, or addition to tax) which has been erroneously refunded, and which is recoverable by a civil action pursuant to [26 U.S.C. 7405](https://www.govinfo.gov/link/uscode/26/7405), shall bear interest at the underpayment rate referred to in [§ 70.93 of this part](/current/title-27/part-70/section-70.93).
([26 U.S.C. 6602](https://www.govinfo.gov/link/uscode/26/6602))
\[T.D. ATF-301, [55 FR 47614](https://www.federalregister.gov/citation/55-FR-47614), Nov. 14, 1990]
#### § 70.92 Interest on overpayments.
(a) *General rule.* Except as otherwise provided, interest shall be allowed on any overpayment of any tax at the overpayment rate referred to in [§ 70.93 of this part](/current/title-27/part-70/section-70.93) from the date of overpayment of the tax.
(b) *Date of overpayment.* Except as provided in section 6401(a) of the Internal Revenue Code, relating to assessment and collection after the expiration of the applicable period of limitation, there can be no overpayment of tax until the entire tax liability has been satisfied. Therefore, the dates of overpayment of any tax are the date of payment of the first amount which (when added to previous payments) is in excess of the tax liability (including any interest, addition to the tax, or additional amount) and the dates of payment of all amounts subsequently paid with respect to such tax liability.
(c) *Period for which interest is allowable in case of refunds.* If an overpayment of tax is refunded, interest shall be allowed from the date of the overpayment to a date determined by the appropriate TTB officer which shall not be more than 30 days prior to the date of the refund check. The acceptance of a refund check shall not deprive the taxpayer of the right to make a claim for any additional overpayment and interest thereon, provided the claim is made within the applicable period of limitation. However, if a taxpayer does not accept a refund check, no additional interest on the amount of the overpayment included in such check shall be allowed.
(d) *Period for which interest allowable in case of credits* —
(1) *General rule.* If an overpayment of tax is credited, interest shall be allowed from the date of overpayment to the due date (as determined under [paragraph (d)(2)](/current/title-27/section-70.92#p-70.92\(d\)\(2\)) of this section of the amount against which such overpayment is credited.
(2) *Determination of due date* —
(i) *General.* The term *due date,* as used in this section, means the last day fixed by law or regulations for the payment of the tax (determined without regard to any extension of time), and not the date on which the appropriate TTB officer makes demand for the payment of the tax. Therefore, the due date of the tax is the date fixed for the payment of the tax;
(ii) *Tax not due yet.* If a taxpayer agrees to the crediting of an overpayment against tax and the schedule of allowance is signed prior to the date on which such tax would otherwise become due, then the due date of such tax shall be the date on which such schedule is signed;
(iii) *Interest.* In the case of a credit against interest that accrues for any period ending prior to January 1, 1983, the due date is the earlier of the date of assessment of such interest or December 31, 1982. In the case of a credit against interest that accrues from any period beginning on or after December 31, 1982, such interest is due as it economically accrues on a daily basis, rather than when it is assessed.
(iv) *Additional amount, addition to the tax, or assessable penalty.* In the case of a credit against an additional amount, addition to the tax, or assessable penalty, the due date is the earlier of the date of assessment or the date from which such amount would bear interest if not satisfied by payment or credit.
([26 U.S.C. 6611](https://www.govinfo.gov/link/uscode/26/6611))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987, as amended by T.D. ATF-301, [55 FR 47614](https://www.federalregister.gov/citation/55-FR-47614), Nov. 14, 1990; T.D. ATF-358, [59 FR 29367](https://www.federalregister.gov/citation/59-FR-29367), June 7, 1994]
#### § 70.93 Interest rate.
(a) *In general.* The interest rate established under [26 U.S.C. 6621(a)(2)](https://www.govinfo.gov/link/uscode/26/6621) shall be:
(1) On amounts outstanding before July 1, 1975, 6 percent per annum.
(2) On amounts outstanding:
| After | And before | Rate per annum (percent) |
| ------------- | ------------ | ------------------------ |
| June 30, 1975 | Feb. 1, 1976 | 9 |
| Jan. 31, 1976 | Feb. 1, 1978 | 7 |
| Jan. 31, 1978 | Feb. 1, 1980 | 6 |
| Jan. 31, 1980 | Feb. 1, 1982 | 12 |
| Jan. 31, 1982 | Jan. 1, 1983 | 20 |
(3) On amounts outstanding after December 31, 1982, the adjusted rates for overpayment and underpayment established by the Commissioner of Internal Revenue under [26 U.S.C. 6621](https://www.govinfo.gov/link/uscode/26/6621). These adjusted rates shall be published by the Commissioner in a Revenue Ruling. See [§ 70.94 of this part](/current/title-27/part-70/section-70.94) for application of daily compounding in determining interest accruing after December 31, 1982. Because interest accruing after December 31, 1982, accrues at the prescribed rate per annum compounded daily, the effective annual percentage rate of interest will exceed the prescribed rate of interest.
(b) *Applicability of interest rates* —
(1) *Computation.* Interest and additions to tax on any amount outstanding on a specific day shall be computed at the annual rate applicable on such day.
(2) *Additions to tax.* Additions to tax under any section of the Internal Revenue Code that refers to the annual rate established under [26 U.S.C. 6621](https://www.govinfo.gov/link/uscode/26/6621), shall be computed at the same rate per annum as the interest rate set forth under [paragraph (a)](/current/title-27/section-70.93#p-70.93\(a\)) of this section.
(3) *Interest.* Interest provided for under any section of the Internal Revenue Code that refers to the annual rate established under this section, including [26 U.S.C. 6332(d)(1)](https://www.govinfo.gov/link/uscode/26/6332), [6343(c)](https://www.govinfo.gov/link/uscode/26/6343), [6601(a)](https://www.govinfo.gov/link/uscode/26/6601), [6602](https://www.govinfo.gov/link/uscode/26/6602), [6611(a)](https://www.govinfo.gov/link/uscode/26/6611), [7426(g)](https://www.govinfo.gov/link/uscode/26/7426), and [28 U.S.C. 1961(c)(1)](https://www.govinfo.gov/link/uscode/28/1961) or [2411](https://www.govinfo.gov/link/uscode/28/2411), shall be computed at the rate per annum set forth under [paragraph (a)](/current/title-27/section-70.93#p-70.93\(a\)) of this section.
\[T.D. ATF-301, [55 FR 47614](https://www.federalregister.gov/citation/55-FR-47614), Nov. 14, 1990]
#### § 70.94 Interest compounded daily.
(a) *General rule.* Effective for interest accruing after December 31, 1982, in computing the amount of any interest required to be paid under any provision of 26 U.S.C. or under [28 U.S.C. 1961(c)(1)](https://www.govinfo.gov/link/uscode/28/1961) or [2411](https://www.govinfo.gov/link/uscode/28/2411), by the appropriate TTB officer or by the taxpayer, or in computing any other amount determined by reference to such amount of interest, or by reference to the interest rate established under [26 U.S.C. 6621](https://www.govinfo.gov/link/uscode/26/6621), such interest or such other amount shall be compounded daily by dividing such rate of interest by 365 (366 in a leap year) and compounding such daily interest rate each day.
(b) *Applicability to unpaid amounts on December 31, 1982.* The unpaid interest (or other amount) that shall be compounded daily includes the interest (or other amount) accrued but unpaid on December 31, 1982.
([26 U.S.C. 6622](https://www.govinfo.gov/link/uscode/26/6622))
\[T.D. ATF-301, [55 FR 47614](https://www.federalregister.gov/citation/55-FR-47614), Nov. 14, 1990]
### Additions to the Tax, Additional Amounts, and Assessable Penalties
Additions to the Tax and Additional Amounts
#### § 70.95 Scope.
For purposes of the administration of excise taxes by the Alcohol and Tobacco Tax and Trade Bureau in accordance with Title 26 of the United States Code, the penalties prescribed in [§§ 70.96](/current/title-27/section-70.96) through [70.107](/current/title-27/section-70.107) shall apply.
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987, as amended by T.D. ATF-301, [55 FR 47614](https://www.federalregister.gov/citation/55-FR-47614), Nov. 14, 1990]
#### § 70.96 Failure to file tax return or to pay tax.
(a) *Addition to the tax* —
(1) *Failure to file tax return.* In the case of failure to file a return required under authority of:
(i) Title 26 U.S.C. 61, relating to returns and records;
(ii) Title 26 U.S.C. 51, relating to distilled spirits, wines and beer;
(iii) Title 26 U.S.C. 52, relating to tobacco products, and cigarette papers and tubes; or
(iv) Title 26 U.S.C. 53, relating to machine guns, destructive devices, and certain other firearms; and the regulations thereunder, on or before the date prescribed for filing (determined with regard to any extension of time for such filing), there shall be added to the tax required to be shown on the return the amount specified below unless the failure to file the return within the prescribed time is shown to the satisfaction of the appropriate TTB officer to be due to reasonable cause and not to willful neglect. The amount to be added to the tax is 5 percent thereof if the failure is not for more than one month, with an additional 5 percent for each additional month or fraction thereof during which the failure continues, but not to exceed 25 percent in the aggregate. The amount of any addition under [paragraph (a)(1)](/current/title-27/section-70.96#p-70.96\(a\)\(1\)) of this section shall be reduced by the amount of the addition under [paragraph (a)(2)](/current/title-27/section-70.96#p-70.96\(a\)\(2\)) of this section for any month to which an addition to tax applies under both [paragraphs (a)(1)](/current/title-27/section-70.96#p-70.96\(a\)\(1\)) and [(a)(2)](/current/title-27/section-70.96#p-70.96\(a\)\(2\)) of this section.
(2) *Failure to pay tax shown on return.* In case of failure to pay the amount shown as tax on any return required to be filed after December 31, 1969 (without regard to any extension of time for filing thereof), specified in [paragraph (a)(1)](/current/title-27/section-70.96#p-70.96\(a\)\(1\)) of this section, on or before the date prescribed for payment of such tax (determined with regard to any extension of time for payment), there shall be added to the tax shown on the return the amount specified below unless the failure to pay the tax within the prescribed time is shown to the satisfaction of the appropriate TTB officer to be due to reasonable cause and not to willful neglect. The amount to be added to the tax is 0.5 percent of the amount of tax shown on the return if the failure is for not more than 1 month, with an additional 0.5 percent for each additional month or fraction thereof during which the failure continues, but not to exceed 25 percent in the aggregate.
(3) *Failure to pay tax not shown on return.* In case of failure to pay any amount in respect of any tax required to be shown on a return specified in [paragraph (a)(1)](/current/title-27/section-70.96#p-70.96\(a\)\(1\)) of this section, which is not so shown (including an assessment made pursuant to [26 U.S.C. 6213(b)](https://www.govinfo.gov/link/uscode/26/6213)) within 10 days from the date of the notice and demand therefor, there shall be added to the amount shown in the notice and demand the amount specified below unless the failure to pay the tax within the prescribed time is shown to the satisfaction of the appropriate TTB officer to be due to reasonable cause and not to willful neglect. The amount to be added to the tax is 0.5 percent of the amount stated in the notice and demand if the failure is for not more than one month, with an additional 0.5 percent for each additional month or fraction thereof during which the failure continues, but not to exceed 25 percent in the aggregate. The maximum amount of the addition permitted under this subparagraph shall be reduced by the amount of the addition under [paragraph (a)(1)](/current/title-27/section-70.96#p-70.96\(a\)\(1\)) of this section, which is attributable to the tax for which the notice and demand is made and which is not paid within 10 days from the date of notice and demand. The preceding sentence applies to amounts assessed on or before December 31, 1986.
(4) *Increases in penalties in certain cases.* For increases in penalties for failure to file a return or pay tax in certain cases, see [26 U.S.C. 6651(d)](https://www.govinfo.gov/link/uscode/26/6651) or [(f)](https://www.govinfo.gov/link/uscode/26/6651).
(b) *Month defined.*
(1) If the date prescribed for filing the return or paying tax is the last day of a calendar month, each succeeding calendar month or fraction thereof during which the failure to file or pay tax continues shall constitute a month for purposes of section 6651.
(2) If the date prescribed for filing the return or paying tax is a date other than the last day of a calendar month, the period which terminates with the date numerically corresponding thereto in the succeeding calendar month and each such successive period shall constitute a month for purposes of section 6651. If, in the month of February, there is no date corresponding to the date prescribed for filing the return or paying tax, the period from such date in January through the last day of February shall constitute a month for purposes of section 6651. Thus, if a return is due on January 30, the first month shall end on February 28 (or 29 if a leap year), and the succeeding months shall end on March 30, April 30, etc.
(3) If a return is not timely filed or tax is not timely paid, the fact that the date prescribed for filing the return or paying tax, or the corresponding date in any succeeding calendar month, falls on a Saturday, Sunday, or legal holiday is immaterial in determining the number of months for which the addition to the tax under section 6651 applies.
(c) *Showing of reasonable cause.* A taxpayer who wishes to avoid the addition to the tax for failure to file a tax return or pay tax must make an affirmative showing of all facts alleged as a reasonable cause for the taxpayers failure to file such return or pay such tax on time in the form of a written statement containing a declaration that it is made under penalties of perjury. Such statement should be filed with the appropriate TTB officer. In addition, where special tax returns are delivered to an appropriate TTB officer, such statement may be delivered with the return. If the appropriate TTB officer determines that the delinquency was due to a reasonable cause and not to willful neglect, the addition to the tax will not be assessed. If the taxpayer exercised ordinary business care and prudence and was nevertheless unable to file the return within the prescribed time, then the delay is due to a reasonable cause. A failure to pay will be considered to be due to reasonable cause to the extent that the taxpayer has made a satisfactory showing that the taxpayer exercised ordinary business care and prudence in providing for payment of the tax liability and was nevertheless either unable to pay the tax or would suffer an undue hardship (as described in [26 CFR 1.6161-1(b)](/current/title-26/section-1.6161-1#p-1.6161-1\(b\))) if paid on the due date. In determining whether the taxpayer was unable to pay the tax in spite of the exercise of ordinary business care and prudence in providing for payment of a tax liability, consideration will be given to all the facts and circumstances of the taxpayer's financial situation, including the amount and nature of the taxpayer's expenditures in light of the income (or other amounts) the taxpayer could, at the time of such expenditures, reasonably expect to receive prior to the date prescribed for the payment of the tax. Thus, for example, a taxpayer who incurs lavish or extravagant living expenses in an amount such that the remainder of assets and anticipated income will be insufficient to pay the tax, has not exercised ordinary business care and prudence in providing for the payment of a tax liability. Further, a taxpayer who invests funds in speculative or illiquid assets has not exercised ordinary business care and prudence in providing for the payment of a tax liability unless, at the time of the investment, the remainder of the taxpayer's assets and estimated income will be sufficient to pay the tax or it can be reasonably foreseen that the speculative or illiquid investment made by the taxpayer can be utilized (by sale or as security for a loan) to realize sufficient funds to satisfy the tax liability. A taxpayer will be considered to have exercised ordinary business care and prudence if such taxpayer made reasonable efforts to conserve sufficient assets in marketable form to satisfy a tax liability and nevertheless was unable to pay all or a portion of the tax when it became due.
(d) *Penalty imposed on net amount due* —
(1) *Credits against the tax.* The amount of tax required to be shown on the return for purposes of section 6651(a)(1) and the amount shown as tax on the return for purposes of section 6651(a)(2) shall be reduced by the amount of any part of the tax which is paid on or before the date prescribed for payment of the tax and by the amount of any credit against the tax which may be claimed on the return.
(2) *Partial payments.*
(i) The amount of tax required to be shown on the return for purposes of section 6651(a)(2) of the Internal Revenue Code shall, for the purpose of computing the addition for any month, be reduced by the amount of any part of the tax which is paid after the date prescribed for payment and on or before the first day of such month, and
(ii) The amount of tax stated in the notice and demand for purposes of section 6651(a)(3) of the Internal Revenue Code shall, for the purpose of computing the addition for any month, be reduced by the amount of any part of the tax which is paid before the first day of such month.
(e) *No addition to tax if fraud penalty assessed.* No addition to the tax under section 6651 of the Internal Revenue Code shall be assessed with respect to an underpayment of tax if an addition to the tax for fraud is assessed with respect to the same underpayment under section 6653(b). See section 6653(d) of the Internal Revenue Code.
([26 U.S.C. 6651](https://www.govinfo.gov/link/uscode/26/6651))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987, as amended by T.D ATF-301, [55 FR 47614](https://www.federalregister.gov/citation/55-FR-47614), Nov. 14, 1990; T.D. ATF-353, [59 FR 2522](https://www.federalregister.gov/citation/59-FR-2522), Jan. 18, 1994; T.D. ATF-450, [66 FR 29025](https://www.federalregister.gov/citation/66-FR-29025), May 29, 2001; T.D. TTB-79, [74 FR 37424](https://www.federalregister.gov/citation/74-FR-37424), July 28, 2009; T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
#### § 70.97 Failure to pay tax.
(a) *Negligence* —
(1) *General.* If any part of any underpayment (as defined in [paragraph (d)](/current/title-27/section-70.97#p-70.97\(d\)) of this section) is due to negligence or disregard of rules or regulations, there shall be added to the tax an amount equal to the sum of 5 percent of the underpayment, and an amount equal to 50 percent of the interest payable under section 6601 of the Internal Revenue Code with respect to the portion of such underpayment which is attributable to negligence for the period beginning on the last date prescribed by law for payment of such underpayment (determined without regard to any extension) and ending on the date of the assessment of the tax (or if earlier, the date or the payment of the tax).
(2) Underpayment taken into account reduced by a portion attributable to fraud. There shall not be taken into account under [paragraph (a)](/current/title-27/section-70.97#p-70.97\(a\)) of this section any portion of an underpayment attributable to fraud with respect to which a penalty is imposed under [paragraph (b)](/current/title-27/section-70.97#p-70.97\(b\)) of this section.
(3) *Negligence.* For purposes of [paragraph (a)](/current/title-27/section-70.97#p-70.97\(a\)) of this section, the term “negligence” includes any failure to make a reasonable attempt to comply with the provisions of the Internal Revenue Code, and the term “disregard” includes any careless, reckless, or intentional disregard.
(4) The provisions of paragraph (a) apply to returns the due date for which (determined without regard to extensions) is after December 31, 1986.
(b) *Fraud* —
(1) *General.* If any part of any underpayment (as defined in [paragraph (d)](/current/title-27/section-70.97#p-70.97\(d\)) of this section) of tax required to be shown on a return is due to fraud, there shall be added to the tax an amount equal to 50 percent of the portion of the underpayment which is attributable to fraud and an amount equal to 50 percent of the interest payable under section 6601 of the Internal Revenue Code with respect to such portion for the period beginning on the last day prescribed by law for payment of such underpayment (determined without regard to any extension) and ending on the date of the assessment of the tax or, if earlier, the date of the payment of the tax.
(2) The provisions of [paragraph (b)](/current/title-27/section-70.97#p-70.97\(b\)) of this section, apply to returns the due date for which (determined without regard to extensions) is on or before December 31, 1986.
(c) *Fraud* —
(1) *General.* If any part of any underpayment (as defined in [paragraph (d)](/current/title-27/section-70.97#p-70.97\(d\)) of this section) of tax required to be shown on a return is due to fraud, there shall be added to the tax an amount equal to the sum of 75 percent of the portion of the underpayment which is attributable to fraud and an amount equal to 50 percent of the interest payable under section 6601 of the Internal Revenue Code with respect to such portion for the period beginning on the last day prescribed by law for payment of such underpayment (determined without regard to any extension) and ending on the date of the assessment of the tax or, if earlier, the date of the payment of the tax.
(2) Determination of portion attributable to fraud. If the appropriate TTB officer establishes that any portion of an underpayment is attributable to fraud, the entire underpayment shall be treated as attributable to fraud, except with respect to any portion of the underpayment which the taxpayer establishes is not attributable to fraud.
(3) The provisions of this [paragraph (c)](/current/title-27/section-70.97#p-70.97\(c\)) apply to returns the due date for which (determined without regard to extensions) is after December 31, 1986.
(d) *Definition of underpayment.* For purposes of this section, the term *underpayment* means the amount by which such tax imposed by the Internal Revenue Code exceeds the excess of—
(1) The sum of,
(i) The amount shown as the tax by the taxpayer upon the taxpayers return (determined without regard to any credit for an overpayment for any prior period, and without regard to any adjustment under authority of sections 6205(a) and 6413(a) of the Internal Revenue Code), if a return was made by the taxpayer within the time prescribed for filing such return (determined with regard to any extension of time for such filing) and an amount was shown as the tax by the taxpayer thereon, plus;
(ii) Any amount, not shown on the return, paid in respect of such tax, over—
(2) *The amount of rebates made.* For purposes of [paragraph (d)](/current/title-27/section-70.97#p-70.97\(d\)) of this section, the term *rebate* means so much of an abatement, credit, refund, or other repayment, as was made on the ground that the tax imposed was less than the excess of the amount specified in [paragraph (d)(1)](/current/title-27/section-70.97#p-70.97\(d\)\(1\)) of this section over the rebates previously made.
(e) *No delinquency penalty if fraud assessed.* If any penalty is assessed under [paragraph (b)](/current/title-27/section-70.97#p-70.97\(b\)) or [(c)](/current/title-27/section-70.97#p-70.97\(c\)) of this section (relating to fraud) for an underpayment of tax which is required to be shown on a return, no penalty under section 6651 of the Internal Revenue Code (relating to failure to file such return or pay tax) shall be assessed with respect to the portion of the underpayment which is attributable to fraud.
(f) *Failure to pay stamp tax.* Any person who willfully fails to pay any tax which is payable by stamp or willfully attempts in any manner to evade or defeat any such tax or payment thereof, shall, in addition to other penalties provided by law, be liable to a penalty of 50 percent of the total amount of the underpayment of the tax.
(g) *Additional penalty.* For additional penalty for failure to pay certain liquor and tobacco taxes, see [27 CFR 70.102](/current/title-27/section-70.102).
([26 U.S.C. 6653](https://www.govinfo.gov/link/uscode/26/6653))
\[T.D. ATF-6, [38 FR 32445](https://www.federalregister.gov/citation/38-FR-32445), Nov. 26, 1973, as amended by T.D. ATF-353, [59 FR 2522](https://www.federalregister.gov/citation/59-FR-2522), Jan. 18, 1994]
#### § 70.98 Penalty for underpayment of deposits.
(a) *General rule.* If any person is required by the provisions of 26 U.S.C. enforced and administered by the Bureau or regulations prescribed thereunder to deposit any tax in a government depository that is authorized under [26 U.S.C. 6302(c)](https://www.govinfo.gov/link/uscode/26/6302) to receive the deposit, and fails to deposit the tax within the time prescribed therefor, a penalty shall be imposed on such person unless the failure is shown to be due to reasonable cause and not due to willful neglect. The penalty shall be:
(1) For penalties assessed before October 22, 1986, 5 percent of the amount of the underpayment without regard to the period during which the underpayment continues.
(2) For penalties assessed after October 21, 1986, on deposits of taxes required to be made before January 1, 1990, 10 percent of the amount of the underpayment without regard to the period during which the underpayment continues.
(3) For deposits of taxes required to be made after December 31, 1989.
(i) 2 percent of the amount of the underpayment if the failure is for not more than 5 days,
(ii) 5 percent of the amount of the underpayment if the failure is for more than 5 days but not more than 15 days,
(iii) 10 percent of the amount of the underpayment if the failure is for more than 15 days,
(iv) 15 percent of the amount of the underpayment if the tax is not deposited before the earlier of:
(A) The day 10 days after the date of the first delinquency notice to the taxpayer under section 6303, or
(B) The day on which notice and demand for immediate payment is given under [26 U.S.C. 6862](https://www.govinfo.gov/link/uscode/26/6862) or the last sentence of [26 U.S.C. 6331(a)](https://www.govinfo.gov/link/uscode/26/6331).
For purposes of this section, the term “underpayment” means the amount of tax required to be deposited less the amount, if any, that was deposited on or before the date prescribed therefor. Section 7502(e) of the Internal Revenue Code applies in determining the date a deposit is made.
(b) *Assertion of reasonable cause.* To show that the underpayment was due to reasonable cause and not due to willful neglect, a taxpayer must make an affirmative showing of all facts alleged as a reasonable cause in a written statement containing a declaration that it is made under the penalties of perjury. The statement must be filed with the appropriate TTB officer. If the appropriate TTB officer determines that the underpayment was due to reasonable cause and not due to willful neglect, the penalty will not be imposed.
([26 U.S.C. 6656](https://www.govinfo.gov/link/uscode/26/6656))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987, as amended by T.D. ATF-301, [55 FR 47615](https://www.federalregister.gov/citation/55-FR-47615), Nov. 14, 1990; T.D. ATF-353, [59 FR 2523](https://www.federalregister.gov/citation/59-FR-2523), Jan. 18, 1994]
#### § 70.100 Penalty for fraudulently claiming drawback.
Whenever any person fraudulently claims or seeks to obtain an allowance of drawback on goods, wares, or merchandise on which no internal revenue tax shall have been paid, or fraudulently claims any greater allowance of drawback than the tax actually paid, that person shall forfeit triple the amount wrongfully or fraudulently claimed or sought to be obtained, or the sum of \$500, at the election of the appropriate TTB officer.
([26 U.S.C. 7304](https://www.govinfo.gov/link/uscode/26/7304))
\[T.D. ATF-301, [55 FR 47615](https://www.federalregister.gov/citation/55-FR-47615), Nov. 14, 1990]
#### § 70.101 Bad checks.
If any check or money order in payment of any amount receivable under Title 26 of the United States Code is not duly paid, in addition to any other penalties provided by law, there shall be paid as a penalty by the person who tendered such check, upon notice and demand, in the same manner as tax, an amount equal to 1 percent of the amount of such check, except that if the amount of such check is less than $500, the penalty under this section shall be $5 or the amount of such check, whichever is the lesser. This section shall not apply if the person establishes to the satisfaction of the appropriate TTB officer that such check was tendered in good faith and that such person had reasonable cause to believe that such check would be duly paid.
([26 U.S.C. 6657](https://www.govinfo.gov/link/uscode/26/6657))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated and amended by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), [47615](https://www.federalregister.gov/citation/55-FR-47615), Nov. 14, 1990]
#### § 70.102 Coordination with title 11.
(a) *Certain failures to pay tax.* No addition to the tax shall be made under section 6651 of the Internal Revenue Code for failure to make timely payment of tax with respect to a period during which a case is pending under Title 11 of the United States Code—
(1) If such tax was incurred by the estate and the failure occurred pursuant to an order of the court finding probable insufficiency of funds of the estate to pay administrative expenses, or
(2) If such tax was incurred by the debtor before the earlier of the order for relief or (in the involuntary case) the appointment of a trustee and
(i) The petition was filed before the due date prescribed by law (including extensions) for filing a return of such tax, or
(ii) The date for making the addition to the tax occurs on or after the day on which the petition was filed.
(b) *Exception for collected taxes.* [Paragraph (a)](/current/title-27/section-70.102#p-70.102\(a\)) of this section shall not apply to any liability for an addition to the tax which arises from the failure to pay or deposit a tax withheld or collected from others and required to be paid to the United States.
([26 U.S.C. 6658](https://www.govinfo.gov/link/uscode/26/6658))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), Nov. 14, 1990]
#### § 70.103 Failure to pay tax.
Whoever fails to pay any tax imposed by Part I of Subchapter A of Chapter 51 of the Internal Revenue Code (liquor taxes) or by Chapter 52 (tobacco taxes) at the time prescribed shall, in addition to any other penalty provided in the Internal Revenue Code, be liable to a penalty of 5 percent of the tax due but unpaid. For additional penalties for failure to pay tax, see [27 CFR 70.97](/current/title-27/section-70.97).
([26 U.S.C. 5684(a)](https://www.govinfo.gov/link/uscode/26/5684) and [5761(b)](https://www.govinfo.gov/link/uscode/26/5761))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), Nov. 14, 1990]
Assessable Penalties
#### § 70.111 Rules for application of assessable penalties.
(a) *Penalty assessed as tax.* The penalties and liabilities provided by Subchapter B, Chapter 68, of the Internal Revenue Code shall be assessed and collected in the same manner as taxes. Except as otherwise provided, any reference in the Internal Revenue Code to “tax” imposed thereunder shall also be deemed to refer to the penalties and liabilities provided by Subchapter B of Chapter 68.
(b) *Person defined.* For purposes of Subchapter B of Chapter 68 of the Internal Revenue Code, the term “person” includes an officer or employee of a corporation, or a member or employee of a partnership, who as such officer, employee, or member is under a duty to perform the act in respect of which the violation occurs.
([26 U.S.C. 6671](https://www.govinfo.gov/link/uscode/26/6671))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), Nov. 14, 1990]
#### § 70.112 Failure to collect and pay over tax, or attempt to evade or defeat tax.
Any person required to collect, truthfully account for, and pay over any tax imposed by the Internal Revenue Code who willfully fails to collect such tax, or truthfully account for and pay over such tax, or willfully attempts in any manner to evade or defeat any such tax or the payment thereof, shall, in addition to other penalties, be liable to a penalty equal to the total amount of the tax evaded, or not collected, or not accounted for and paid over. The penalty imposed by section 6672 of the Internal Revenue Code applies only to the collection, accounting for, or payment over of taxes imposed on a person other than the person who is required to collect, account for, and pay over such taxes. No penalty under section 6653 of the Internal Revenue Code, relating to failure to pay tax, shall be imposed for any offense to which this section is applicable.
([26 U.S.C. 6672](https://www.govinfo.gov/link/uscode/26/6672))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), Nov. 14, 1990]
#### § 70.113 Penalty for failure to supply taxpayer identification number.
(a) *In general.* Except as provided in [paragraph (b)](/current/title-27/section-70.113#p-70.113\(b\)) of this section, any person who is required by the regulations under section 6109 of the Internal Revenue Code to include the taxpayer identification number in any return, statement, or other document, fails to comply with such requirement at the time prescribed by such regulations, such person shall pay a penalty of $50 for each such failure, except that the total amount imposed on such person for all such failures during any calendar year shall not exceed $100,000. For returns having a due date (determined without regard to extensions) after December 31, 1986, the total amount imposed on such person for all such failures during any calendar year shall not exceed \$100,000. Such penalty shall be paid in the same manner as tax upon the issuance of a notice and demand therefor.
(b) *Reasonable cause.* If any person who is required by the regulations under section 6109 of the Internal Revenue Code to supply a taxpayer identification number fails to comply with such requirement at the time prescribed by such regulations, but establishes to the satisfaction of the appropriate TTB officer that such failure was due to reasonable cause, the penalty set forth in [paragraph (a)](/current/title-27/section-70.113#p-70.113\(a\)) of this section shall not apply.
(c) *Persons required to supply taxpayer identification numbers.* For regulations under section 6109 of the Internal Revenue Code relating to persons required to supply an identifying number, see the regulations relating to the particular tax.
([26 U.S.C. 6723](https://www.govinfo.gov/link/uscode/26/6723))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated and amended by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), [47615](https://www.federalregister.gov/citation/55-FR-47615), Nov. 14, 1990]
#### § 70.114 Penalties for aiding and abetting understatement of tax liability.
(a) *Imposition of penalty.* Any person—
(1) Who aids or assists in, procures, or advises with respect to, the preparation or presentation of any portion of a return, affidavit, claim, or other document in connection with any matter arising under the internal revenue laws,
(2) Who knows that such portion will be used in connection with any material matter arising under the internal revenue laws, and
(3) Who knows that such portion (if so used) will result in an understatement of the liability for tax of another person, shall pay a penalty with respect to each such document in the amount determined under paragraph (b).
(b) *Amount of penalty* —
(1) *General.* Except as provided in [paragraph (b)(2)](/current/title-27/section-70.114#p-70.114\(b\)\(2\)) of this section, the amount of the penalty imposed by [paragraph (a)](/current/title-27/section-70.114#p-70.114\(a\)) of this section shall be \$1,000.
(2) *Corporations.* If the return, affidavit, claim, or other document relates to the tax liability of a corporation, the amount of the penalty imposed by [paragraph (a)](/current/title-27/section-70.114#p-70.114\(a\)) of this section shall be \$10,000.
(3) *Only one penalty per person per period.* If any person is subject to a penalty under [paragraph (a)](/current/title-27/section-70.114#p-70.114\(a\)) of this section with respect to any document relating to any taxpayer for any taxable period (or where there is no taxable period, any taxable event), such person shall not be subject to a penalty under [paragraph (a)](/current/title-27/section-70.114#p-70.114\(a\)) of this section with respect to any other document relating to such taxpayer for such taxable period (or event).
(c) *Activities of subordinates* —
(1) *General.* For purpose of [paragraph (a)](/current/title-27/section-70.114#p-70.114\(a\)) of this section, the term “procures” includes,
(i) Ordering (or otherwise causing) a subordinate to do an act, and
(ii) Knowing of, and not attempting to prevent, participation by a subordinate in an act.
(2) For purposes of [paragraph (c)(1)](/current/title-27/section-70.114#p-70.114\(c\)\(1\)) of this section, the term “subordinate” means any other person (whether or not a director, officer, employee, or agent of the taxpayer involved) over whose activities the person has direction, supervision, or control.
(d) *Taxpayer not required to have knowledge.* Paragraph (a) shall apply whether or not the understatement is with the knowledge or consent of the persons authorized or required to present the return, affidavit, claim, or other document.
(e) *Certain actions not treated as aid or assistance.* For purposes of [paragraph (a)(1)](/current/title-27/section-70.114#p-70.114\(a\)\(1\)) of this section, a person furnishing typing, reproducing, or other mechanical assistance with respect to a document shall not be treated as having aided or assisted in the preparation of such document by reason of such assistance.
(f) *Penalty in addition to other penalties.* The penalty imposed by this section shall be in addition to any other penalty provided by law.
([26 U.S.C. 6701](https://www.govinfo.gov/link/uscode/26/6701))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), Nov. 14, 1990]
### Abatements, Credits and Refunds
Procedure in General
#### § 70.121 Amounts treated as overpayments.
(a) The term *overpayment* includes any payment of any internal revenue tax which is assessed or collected after the expiration of the period of limitation applicable thereto.
(b) An amount paid as tax shall not be considered not to constitute an overpayment solely by reason of the fact that there was no tax liability in respect of which such amount was paid.
([26 U.S.C. 6401](https://www.govinfo.gov/link/uscode/26/6401))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), Nov. 14, 1990]
#### § 70.122 Authority to make credits or refunds.
The appropriate TTB officer, within the applicable period of limitations, may credit any overpayment of tax, including interest thereon, against any outstanding liability for any tax (or for any interest, additional amount, addition to the tax, or assessable penalty) owed by the person making the overpayment and the balance, if any, shall be refunded, subject to [26 U.S.C. 6402](https://www.govinfo.gov/link/uscode/26/6402) (c) and (d) and the regulations thereunder, to such person by the appropriate TTB officer.
([26 U.S.C. 6402](https://www.govinfo.gov/link/uscode/26/6402))
\[T.D. ATF-301, [55 FR 47615](https://www.federalregister.gov/citation/55-FR-47615), Nov. 14, 1990]
#### § 70.123 Claims for credit or refund.
(a) *Requirement that claim be filed.*
(1) Credits or refunds of overpayments may not be allowed or made after the expiration of the statutory period of limitation properly applicable unless, before the expiration of such period, a claim therefor has been filed by the taxpayer. Furthermore, under section 7422 of the Internal Revenue Code, a civil action for refund may not be instituted unless a claim has been filed within the properly applicable period of limitation.
(2) All claims relating to provisions of 26 U.S.C. enforced and administered by the Bureau, together with appropriate supporting evidence, shall be filed with the appropriate TTB officer. As to interest in the case of credits or refunds, see section 6611 of the Internal Revenue Code. See section 7502 for provisions treating timely mailing as timely filing and section 7503 for time for filing claim when the last day falls on a Saturday, Sunday, or legal holiday.
(b) *Grounds set forth in claim.*
(1) No refund or credit will be allowed after the expiration of the statutory period of limitation applicable to the filing of a claim therefor except upon one or more of the grounds set forth in a claim filed before the expiration of such period. The claim must set forth in detail each ground upon which credit or refund is claimed and facts sufficient to apprise the appropriate TTB officer of the exact basis thereof. The statement of the grounds and facts must be verified by a written declaration that it is made under the penalties of perjury. A claim which does not comply with this paragraph will not be considered for any purpose as a claim for the refund or credit.
(2) The appropriate TTB officers do not have authority to refund on equitable grounds penalties or other amounts legally collected.
(c) *Form for filing claim.* All claims by taxpayers for the refunding of taxes, interest, penalties, and additions to tax shall be made on Form 2635 (5620.8).
(d) *Proof of representative capacity.* If a return is filed by an individual and, after the individual's death, a refund claim is filed by a legal representative, certified copies of the letters testamentary, letters of administration, or other similar evidence must be annexed to the claim, to show the authority of the legal representative to file the claim. If an executor, administrator, guardian, trustee, receiver, or other fiduciary files a return and thereafter a refund claim is filed by the same fiduciary, documentary evidence to establish the legal authority of the fiduciary need not accompany the claim, provided a statement is made in the claim showing that the return was filed by the fiduciary and that the latter is still acting. In such cases, if a refund is to be paid, letters testamentary, letters of administration, or other evidence may be required, but should be submitted only upon the receipt of a specific request therefor. If a claim is filed by a fiduciary other than the one by whom the return was filed, the necessary documentary evidence should accompany the claim. A claim may be executed by an agent of the person assessed, but in such case a power of attorney must accompany the claim.
(e) *Mailing of refund check.*
(1) Checks in payment of claims allowed will be drawn in the names of the persons entitled to the money and, except as provided in [paragraph (e)(2)](/current/title-27/section-70.123#p-70.123\(e\)\(2\)) of this section, the checks may be sent direct to the claimant or to such person in care of an attorney or agent who has filed a power of attorney specifically authorizing the attorney or agent to receive such checks.
(2) Checks in payment of claims which have either been reduced to judgment or settled in the course or as a result of litigation will be drawn in the name of the person or persons entitled to the money and will be sent to the Assistant Attorney General, Tax Division, Department of Justice, for delivery to the taxpayer or the counsel of record in the court proceeding.
(3) For restrictions on the assignment of claims, see [31 U.S.C. 3727](https://www.govinfo.gov/link/uscode/31/3727).
(Approved by the Office of Management and Budget under control number 1512-0141)
([26 U.S.C. 6402](https://www.govinfo.gov/link/uscode/26/6402))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated and amended by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), [47615](https://www.federalregister.gov/citation/55-FR-47615), Nov. 14, 1990; T.D. ATF-450, [66 FR 29025](https://www.federalregister.gov/citation/66-FR-29025), May 29, 2001; T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
#### § 70.124 Payments in excess of amounts shown on return.
In certain cases, the taxpayer's payments in respect of a tax liability, made before the filing of the taxpayer's return, may exceed the amount of tax shown on the return. In any case in which the appropriate TTB officer determines that the payments by the taxpayer (made within the period prescribed for payment and before the filing of the return) are in excess of the amount of tax shown on the return, the appropriate TTB officer may make credit or refund of such overpayment without awaiting examination of the completed return and without awaiting filing of a claim for refund. However, the provisions of [§ 70.123 of this part](/current/title-27/part-70/section-70.123) are applicable to such overpayment, and taxpayers should submit claims for refund to protect themselves in the event the appropriate TTB officer fails to make such determination and credit or refund.
(Approved by the Office of Management and Budget under control number 1512-0141)
([26 U.S.C. 6402](https://www.govinfo.gov/link/uscode/26/6402))
\[T.D. ATF-301, [55 FR 47616](https://www.federalregister.gov/citation/55-FR-47616), Nov. 14, 1990]
#### § 70.125 Abatements.
(a) The appropriate TTB officer may abate the unpaid portion of any assessment or liability, if the assessment is in excess of the correct tax liability, if the assessment is made subsequent to the expiration of the period of limitation applicable thereto, or if the assessment has been erroneously or illegally made.
(b) If more than the correct amount of tax, interest, additional amount, addition to the tax, or assessable penalty is assessed but not paid to TTB, the person against whom the assessment is made may file a claim for abatement of such overassessment. Each claim for abatement under this section shall be made on form TTB F 5620.8, Claim—Alcohol, Tobacco and Firearms Taxes, in accordance with the instructions on the form. All such claims must be filed with the appropriate TTB officer who made demand for the amount assessed.
(c) The appropriate TTB officer may issue uniform instructions to abate amounts the collection of which is not warranted because of the administration and collection costs.
(Approved by the Office of Management and Budget under control number 1512-0141)
([26 U.S.C. 6404](https://www.govinfo.gov/link/uscode/26/6404))
\[T.D. ATF-301, [55 FR 47616](https://www.federalregister.gov/citation/55-FR-47616), Nov. 14, 1990, as amended by T.D. ATF-450, [66 FR 29025](https://www.federalregister.gov/citation/66-FR-29025), May 29, 2001; T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
#### § 70.126 Date of allowance of refund or credit.
The date on which the appropriate TTB officer, first certifies the allowance of an overassessment in respect of any internal revenue tax imposed by the provisions of 26 U.S.C. enforced and administered by the Bureau shall be considered as the date of allowance of refund or credit in respect of such tax.
([26 U.S.C. 6407](https://www.govinfo.gov/link/uscode/26/6407))
\[T.D. ATF-301, [55 FR 47616](https://www.federalregister.gov/citation/55-FR-47616), Nov. 14, 1990, as amended by T.D. ATF-450, [66 FR 29025](https://www.federalregister.gov/citation/66-FR-29025), May 29, 2001]
#### § 70.127 Overpayment of installment.
If any installment of tax is overpaid, the overpayment shall first be applied against any outstanding installments of such tax. If the overpayment exceeds the correct amount of tax due, the overpayment shall be credited or refunded as provided in [§§ 70.122 to 70.124 of this part](/current/title-27/part-70/section-70.122), inclusive.
([26 U.S.C. 6403](https://www.govinfo.gov/link/uscode/26/6403))
\[T.D. ATF-301, [55 FR 47616](https://www.federalregister.gov/citation/55-FR-47616), Nov. 14, 1990]
### Rule of Special Application
#### § 70.131 Conditions to allowance.
(a) For regulations under section 6416 of the Internal Revenue Code, see [part 53 of this chapter](/current/title-27/part-53), relating to manufacturers excise taxes on firearms and ammunition.
(b) For regulations under section 6423 of the Internal Revenue Code, see [part 29 of this chapter](/current/title-27/part-29), relating to distilled spirits, wine, and beer; and [part 46 of this chapter](/current/title-27/part-46), relating to tobacco products, and cigarette papers and tubes.
([26 U.S.C. 6416](https://www.govinfo.gov/link/uscode/26/6416) and [6423](https://www.govinfo.gov/link/uscode/26/6423))
\[T.D. ATF-331, [57 FR 40328](https://www.federalregister.gov/citation/57-FR-40328), Sept. 3, 1992, as amended by T.D. ATF-457, [66 FR 32219](https://www.federalregister.gov/citation/66-FR-32219), June 14, 2001; T.D. ATF-462, [66 FR 42737](https://www.federalregister.gov/citation/66-FR-42737), Aug. 15, 2001]
### Lien for Taxes
#### Source:
Sections 70.141 through 70.151 added by T.D. ATF-301, [55 FR 47616](https://www.federalregister.gov/citation/55-FR-47616), Nov. 14, 1990, unless otherwise noted.
#### § 70.141 Lien for taxes.
If any person liable to pay any tax under provisions of 26 U.S.C. enforced and administered by the Bureau neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, tangible or intangible, belonging to such person. The lien attaches to all property and rights to property belonging to such person at any time during the period of the lien, including any property or rights to property acquired by such person after the lien arises. Solely for purposes of this section and [§§ 70.161](/current/title-27/part-70/section-70.161) and [70.162 of this part](/current/title-27/part-70/section-70.162), any interest in restricted land held in trust by the United States for an individual noncompetent Indian (and not for a tribe) shall not be deemed to be property, or a right to property, belonging to such Indian.
([26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321))
#### § 70.142 Scope of definitions.
Except as otherwise provided by [§ 70.143 of this part](/current/title-27/part-70/section-70.143), the definitions provided by [§§ 70.143](/current/title-27/section-70.143) apply for purposes of [§ 70.142](/current/title-27/section-70.142) through [70.149](/current/title-27/section-70.149) and [§§ 70.231](/current/title-27/part-70/section-70.231) through [70.234 of this part](/current/title-27/part-70/section-70.234).
#### § 70.143 Definitions.
(a) *Security interest* —
(1) *In general.* The term *security interest* means any interest in property acquired by contract for the purpose of securing payment or performance of an obligation or indemnifying against loss or liability. A security interest exists at any time:
(i) If, at such time, the property is in existence and the interest has become protected under local law against a subsequent judgment lien (as provided in [paragraph (a)(2)](/current/title-27/section-70.143#p-70.143\(a\)\(2\)) of this section) arising out of an unsecured obligation; and
(ii) To the extent that, at such time, the holder has parted with money or money's worth (as defined in [paragraph (a)(3)](/current/title-27/section-70.143#p-70.143\(a\)\(3\)) of this section). For purposes of [paragraph (a)(1)](/current/title-27/section-70.143#p-70.143\(a\)\(1\)) of this section, a contract right (as defined in [§ 70.232(c)(2)(i) of this part](/current/title-27/part-70/section-70.232#p-70.232\(c\)\(2\)\(i\))) is in existence when the contract is made. An account receivable (as defined in [§ 70.232(c)(2)(ii) of this part](/current/title-27/part-70/section-70.232#p-70.232\(c\)\(2\)\(ii\))) is in existence when, and to the extent, a right to payment is earned by performance. A security interest must be in existence, within the meaning of [paragraph (a)](/current/title-27/section-70.143#p-70.143\(a\)) of this section, at the time as of which its priority against a tax lien is determined. For example, to be afforded priority under the provisions of [§ 70.145(a) of this part](/current/title-27/part-70/section-70.145#p-70.145\(a\)), a security interest must be in existence within the meaning of [paragraph (a)](/current/title-27/section-70.143#p-70.143\(a\)) of this section before a notice of lien is filed.
(2) *Protection against a subsequent judgment lien.* For purposes of [paragraph (a)](/current/title-27/section-70.143#p-70.143\(a\)) of this section, a security interest is deemed to be protected against a subsequent judgment lien on:
(i) The date on which all actions required under local law to establish the priority of a security interest against a judgment lien have been taken, or
(ii) If later, the date on which all required actions are deemed effective, under local law, to establish the priority of the security interest against a judgment lien.
For purposes of [paragraph (a)(2)](/current/title-27/section-70.143#p-70.143\(a\)\(2\)) of this section, the dates described in [paragraphs (a)(2) (i)](/current/title-27/section-70.143#p-70.143\(a\)\(2\)\(i\)) and [(ii)](/current/title-27/section-70.143#p-70.143\(a\)\(2\)\(ii\)) of this section shall be determined without regard to any rule or principle of local law which permits the relation back or the making of any requisite action retroactive to a date earlier than the date on which the action is actually performed. For purposes of [paragraph (a)](/current/title-27/section-70.143#p-70.143\(a\)) of this section, a judgment lien is a lien held by a judgment lien creditor as defined in [paragraph (g)](/current/title-27/section-70.143#p-70.143\(g\)) of this section.
(3) *Money or money's worth.* For purposes of [paragraph (a)](/current/title-27/section-70.143#p-70.143\(a\)) of this section, the term “money or money's worth” includes money, a security (as defined in [paragraph (d)](/current/title-27/section-70.143#p-70.143\(d\)) of this section), tangible or intangible property, services, and other consideration reducible to a money value. Money or money's worth also includes any consideration which otherwise would constitute money or money's worth under the preceding sentence which was parted with before the security interest would otherwise exist if, under local law, past consideration is sufficient to support an agreement giving rise to a security interest. A relinquishing or promised relinquishment of dower, curtesy, or of a statutory estate created in lieu of dower or curtesy, or of other marital rights is not a consideration in money or money's worth. Nor is love and affection, promise of marriage, or any other consideration not reducible to a money value a consideration in money or money's worth.
(4) *Holder of a security interest.* For purposes of [paragraph (a)](/current/title-27/section-70.143#p-70.143\(a\)) of this section, the holder of a security interest is the person in whose favor there is a security interest. For provisions relating to the treatment of a purchaser of commercial financing security as a holder of a security interest, see [§ 70.232(e) of this part](/current/title-27/part-70/section-70.232#p-70.232\(e\)).
(b) *Mechanic's lienor.* The term *mechanic's lienor* means any person who under local law has a lien on real property (or on the proceeds of a contract relating to real property) for services, labor, or materials furnished in connection with the construction or improvement (including demolition) of the property. A mechanic's lienor is treated as having a lien on the later of:
(1) The date on which the mechanic's lien first becomes valid under local law against subsequent purchasers of the real property without actual notice, or
(2) The date on which the mechanic's lienor begins to furnish the services, labor, or materials.
(c) *Motor vehicle.*
(1) The term *motor vehicle* means a self-propelled vehicle which is registered for highway use under the laws of any State, the District of Columbia, or a foreign country.
(2) A motor vehicle is “registered for highway use” at the time of a sale if immediately prior to the sale it is so registered under the laws of any State, the District of Columbia, or a foreign country. Where immediately prior to the sale of a motor vehicle by a dealer, the dealer is permitted under local law to operate it under a dealer's tag, license, or permit issued to the dealer, the motor vehicle is considered to be registered for highway use in the name of the dealer at the time of the sale.
(d) *Security.* The term *security* means any bond, debenture, note, or certificate or other evidence of indebtedness, issued by a corporation or a government or political subdivision thereof, with interest coupons or in registered form, share of stock, voting trust certificate, or any certificate of interest or participation in, certificate of deposit or receipt for, temporary or interim certificate for, or warrant or right to subscribe to or purchase, any of the foregoing; negotiable instrument; or money.
(e) *Tax lien filing.* The term *tax lien filing* means the filing of notice of the lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) in accordance with [§ 70.148 of this part](/current/title-27/part-70/section-70.148).
(f) *Purchaser* —
(1) *In general.* The term *purchaser* means a person who, for adequate and full consideration in money or money's worth (as defined in [paragraph (f)(3)](/current/title-27/section-70.143#p-70.143\(f\)\(3\)) of this section), acquires an interest (other than a lien or security interest) in property which is valid under local law against subsequent purchasers without actual notice.
(2) *Interest in property.* For purposes of [paragraph (f)](/current/title-27/section-70.143#p-70.143\(f\)) of this section, each of the following interests is treated as an interest in property, if it is not a lien or security interest:
(i) A lease of property,
(ii) A written executory contract to purchase or lease property,
(iii) An option to purchase or lease property and any interest therein, or
(iv) An option to renew or extend a lease of property.
(3) *Adequate and full consideration in money or money's worth.* For purposes of [paragraph (f)](/current/title-27/section-70.143#p-70.143\(f\)) of this section, the term “adequate and full consideration in money or money's worth” means a consideration in money or money's worth having a reasonable relationship to the true value of the interest in property acquired. See [paragraph (a)(3)](/current/title-27/section-70.143#p-70.143\(a\)\(3\)) of this section for definition of the term “money or money's worth.” Adequate and full consideration in money or money's worth may include the consideration in a bona fide bargain purchase. The term also includes the consideration in a transaction in which the purchaser has not completed performance of an obligation, such as the consideration in an installment purchase contract where the purchaser has not completed the installment payments.
(g) *Judgment lien creditor.* The term *judgment lien creditor* means a person who has obtained a valid judgment, in a court of record and of competent jurisdiction, for the recovery of specifically designated property or for a certain sum of money. In the case of a judgment for the recovery of a certain sum of money, a judgment lien creditor is a person who has perfected a lien under the judgment on the property involved. A judgment lien is not perfected until the identity of the lienor, the property subject to the lien, and the amount of the lien are established. Accordingly, a judgment lien does not include an attachment or garnishment lien until the lien has ripened into judgment, even though under local law the lien of the judgment relates back to an earlier date. If recording or docketing is necessary under local law before a judgment becomes effective against third parties acquiring liens on real property, a judgment lien under such local law is not perfected with respect to real property until the time of such recordation or docketing. If, under local law, levy or seizure is necessary before a judgment lien becomes effective against third parties acquiring liens on personal property, then a judgment lien under such local law is not perfected until levy or seizure of the personal property involved. The term “judgment” does not include the determination of a quasi-judicial body or of an individual acting in a quasi-judicial capacity such as the action of State taxing authorities.
([26 U.S.C. 6323](https://www.govinfo.gov/link/uscode/26/6323))
\[T.D. ATF-6, [38 FR 32445](https://www.federalregister.gov/citation/38-FR-32445), Nov. 26, 1973, as amended by T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
#### § 70.144 Special rules.
(a) *Actual notice or knowledge.* For purposes of [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) through [6327](https://www.govinfo.gov/link/uscode/26/6327), an organization is deemed, in any transaction, to have actual notice or knowledge of any fact from the time the fact is brought to the attention of the individual conducting the transaction, and in any event from the time the fact would have been brought to the individual's attention if the organization had exercised due diligence. An organization exercises due diligence if it maintains reasonable routines for communicating significant information to the person conducting the transaction and there is reasonable compliance with the routines. Due diligence does not require an individual acting for the organization to communicate information unless such communication is part of the individual's regular duties or unless the individual has reason to know of the transaction and that the transaction would be materially affected by the information.
(b) *Subrogation:* Where, under local law, one person is subrogated to the rights of another with respect to a lien or interest, such person shall be subrogated to such rights for purposes of any lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) or [6324](https://www.govinfo.gov/link/uscode/26/6324). Thus, if a tax lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) or [6324](https://www.govinfo.gov/link/uscode/26/6324) is not valid with respect to a particular interest as against the holder of that interest, then the tax lien also is not valid with respect to that interest as against any person who, under local law, is a successor in interest to the holder of that interest.
(c) *Disclosure of amount of outstanding lien.* If a notice of lien has been filed (see [§ 70.148 of this part](/current/title-27/part-70/section-70.148)), the amount of the outstanding obligation secured by the lien is authorized to be disclosed as a matter of public record on TTB Form 5651.2 “Notice of Federal Tax Lien Under Internal Revenue Laws.” The amount of the outstanding obligation secured by the lien remaining unpaid at the time of an inquiry is authorized to be disclosed to any person who has a proper interest in determining this amount. Any person who has a right in the property or intends to obtain a right in the property by purchase or otherwise will, upon presentation of satisfactory evidence, be considered to have a proper interest. Any person desiring this information may make a request to the office of the Bureau named on the notice of lien with respect to which the request is made. The request should clearly describe the property subject to the lien, identify the applicable lien, and give the reasons for requesting the information.
([26 U.S.C. 6323](https://www.govinfo.gov/link/uscode/26/6323))
#### § 70.145 Purchasers, holders of security interests, mechanic's lienors, and judgment lien creditors.
(a) *Invalidity of lien without notice.* The lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) is not valid against any purchaser (as defined in [§ 70.143(f) of this part](/current/title-27/part-70/section-70.143#p-70.143\(f\))), holder of a security interest (as defined in [§ 70.143(a) of this part](/current/title-27/part-70/section-70.143#p-70.143\(a\))), mechanic's lienor (as defined in [§ 70.143(b) of this part](/current/title-27/part-70/section-70.143#p-70.143\(b\))), or judgment lien creditor (as defined in [§ 70.143(g) of this part](/current/title-27/part-70/section-70.143#p-70.143\(g\))) until a notice of lien is filed in accordance with [§ 70.148 of this part](/current/title-27/part-70/section-70.148). Except as provided by [26 U.S.C. 6323](https://www.govinfo.gov/link/uscode/26/6323), if a person becomes a purchaser, holder of a security interest, mechanic's lienor, or judgment lien creditor after a notice of lien is filed in accordance with [§ 70.148 of this part](/current/title-27/part-70/section-70.148), the interest acquired by such person is subject to the lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321).
(b) *Cross references.* For provisions relating to the protection afforded a security interest arising after tax lien filing, which interest is covered by a commercial transactions financing agreement, real property construction or improvement financing agreement, or an obligatory disbursement agreement, see [§§ 70.232](/current/title-27/part-70/section-70.232), [70.233](/current/title-27/part-70/section-70.233), and [70.234 of this part](/current/title-27/part-70/section-70.234), respectively. For provisions relating to the protection afforded to a security interest coming into existence by virtue of disbursements, made before the 46th day after the date of tax lien filing, see [§ 70.146 of this part](/current/title-27/part-70/section-70.146). For provisions relating to priority afforded to interest and certain other expenses with respect to a lien or security interest having priority over the lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321), see [§ 70.147 of this part](/current/title-27/part-70/section-70.147). For provisions relating to certain other interests arising after tax lien filing, see [§ 70.231 of this part](/current/title-27/part-70/section-70.231).
([26 U.S.C. 6323](https://www.govinfo.gov/link/uscode/26/6323))
#### § 70.146 45-day period for making disbursements.
Even though a notice of a lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) is filed in accordance with [§ 70.149 of this part](/current/title-27/part-70/section-70.149), the lien is not valid with respect to a security interest which comes into existence, after tax lien filing, by reason of disbursements made before the 46th day after the date of tax lien filing, or if earlier, before the person making the disbursements has actual notice or knowledge of the tax lien filing, but only if the security interest is:
(a) In property which is subject, at the time of tax lien filing, to the lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) and which is covered by the terms of a written agreement entered into before tax lien filing, and
(b) Protected under local law against a judgment lien arising, as of the time of tax lien filing, out of an unsecured obligation.
For purposes of [paragraph (a)](/current/title-27/section-70.146#p-70.146\(a\)) of this section, a contract right (as defined in [§ 70.232(c)(2)(i) of this part](/current/title-27/part-70/section-70.232#p-70.232\(c\)\(2\)\(i\))) is subject, at the time of tax lien filing, to the lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) if the contract has been made by such time. An account receivable (as defined in [§ 70.232(c)(2)(ii) of this part](/current/title-27/part-70/section-70.232#p-70.232\(c\)\(2\)\(ii\))) is subject, at the time of tax lien filing, to the lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) if, and to the extent, a right to payment has been earned by performance at such time. For purposes of [paragraph (b)](/current/title-27/section-70.146#p-70.146\(b\)) of this section, a judgment lien is a lien held by a judgment lien creditor as defined in [§ 70.143(g) of this part](/current/title-27/part-70/section-70.143#p-70.143\(g\)). For purposes of this section, it is immaterial that the written agreement provides that the disbursements are to be made at the option of the person making the disbursements. See [§ 70.143 (a)](/current/title-27/part-70/section-70.143#p-70.143\(a\)) and [(e) of this part](/current/title-27/part-70/section-70.143#p-70.143\(e\)) for definitions of the terms “security interest” and “tax lien filing,” respectively. See [§ 70.144(a) of this part](/current/title-27/part-70/section-70.144#p-70.144\(a\)) for certain circumstances under which a person is deemed to have actual notice or knowledge of a fact.
([26 U.S.C. 6323](https://www.govinfo.gov/link/uscode/26/6323))
#### § 70.147 Priority of interest and expenses.
(a) *In general.* If the lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) is not valid as against another lien or security interest, the priority of the other lien or security interest also extends to each of the following items to the extent that under local law the item has the same priority as the lien or security interest to which it relates:
(1) Any interest or carrying charges (including finance, service, and similar charges) upon the obligation secured,
(2) The reasonable charges and expenses of an indenture trustee (including, for example, the trustee under a deed of trust) or agent holding the security interest for the benefit of the holder of the security interest,
(3) The reasonable expenses, including reasonable compensation for attorneys, actually incurred in collecting or enforcing the obligation secured,
(4) The reasonable costs of insuring, preserving, or repairing the property to which the lien or security interest relates,
(5) The reasonable costs of insuring payment of the obligation secured (including amounts paid by the holder of the security interest for mortgage insurance, such as that issued by the Federal Housing Administration), and
(6) Amounts paid to satisfy any lien on the property to which the lien or security interest relates, but only if the lien so satisfied is entitled to priority over the lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321).
(b) *Collection expenses.* The reasonable expenses described in [paragraph (a)(3)](/current/title-27/section-70.147#p-70.147\(a\)\(3\)) of this section include expenditures incurred by the protected holder of the lien or security interest to establish the priority of the holder's interest or to collect, by foreclosure or otherwise, the amount due the holder from the property subject to the protected holder's lien. Accordingly, the amount of the encumbrance which is protected is increased by the amounts so expended by the holder of the security interest.
(c) *Costs of insuring, preserving, etc.* The reasonable costs of insuring, preserving, or repairing described in [paragraph (a)(4)](/current/title-27/section-70.147#p-70.147\(a\)\(4\)) of this section include expenditures by the holder of a security interest for fire and casualty insurance on the property subject to the security interest and amounts paid by the holder of the lien or security interest to repair the property. Such reasonable costs also include the amounts paid by the holder of the lien or security interest in a leasehold to the lessor of the leasehold to preserve the leasehold subject to the lien or security interest. Accordingly, the amount of the lien or security interest which is protected is increased by the amounts so expended by the holder of the lien or security interest.
(d) *Satisfaction of liens.* The amounts described in [paragraph (a)(6)](/current/title-27/section-70.147#p-70.147\(a\)\(6\)) of this section include expenditures incurred by the protected holder of a lien or security interest to discharge a statutory lien for State sales taxes on the property subject to the lien or security interest if both the lien or security interest and the sales tax lien have priority over a Federal tax lien. Accordingly, the amount of the lien or security interest is increased by the amounts so expended by the holder of the lien or security interest even though under local law the holder of the lien or security interest is not subrogated to the rights of the holder of the State sales tax lien. However, if the holder of the lien or security interest is subrogated, within the meaning of [§ 70.144(b) of this part](/current/title-27/part-70/section-70.144#p-70.144\(b\)), to the rights of the holder of the sales tax lien, the holder of the lien or security interest will also be entitled to any additional protection afforded by [26 U.S.C. 6323(i)(2)](https://www.govinfo.gov/link/uscode/26/6323)
([26 U.S.C. 6323](https://www.govinfo.gov/link/uscode/26/6323)).
#### § 70.148 Place for filing notice; form.
(a) *Place for filing.* The notice of lien referred to in [§ 70.145 of this part](/current/title-27/part-70/section-70.145) shall be filed as follows:
(1) *Under State laws* —
(i) *Real property.* In the case of real property, notice shall be filed in one office within the State (or the county or other governmental subdivision), as designated by the laws of the State, in which the property subject to the lien is deemed situated under the provisions of [paragraph (b)(1)](/current/title-27/section-70.148#p-70.148\(b\)\(1\)) of this section.
(ii) *Personal property.* In the case of personal property, whether tangible or intangible, the notice shall be filed in one office within the State (or the county or other governmental subdivision), as designated by the laws of the State, in which the property subject to the lien is deemed situated under the provision of [paragraph (b)(2)](/current/title-27/section-70.148#p-70.148\(b\)\(2\)) of this section, except that State law merely conforming to or reenacting Federal law establishing a national filing system does not constitute a second office for filing as designated by the laws of such State.
(2) *With the clerk of the United States district court.* Whenever a State has not by law designated one office which meets the requirements of [paragraph (a)(1) (i)](/current/title-27/section-70.148#p-70.148\(a\)\(1\)\(i\)) or [(ii)](/current/title-27/section-70.148#p-70.148\(a\)\(1\)\(ii\)) of this section, the notice shall be filed in the office of the clerk of the U.S. district court for the judicial district in which the property subject to the lien is deemed situated under the provisions of [paragraph (b)](/current/title-27/section-70.148#p-70.148\(b\)) of this section. For example, a State has not by law designated one office meeting the requirements of [paragraph (a)(1)(i)](/current/title-27/section-70.148#p-70.148\(a\)\(1\)\(i\)) of this section, if more than one office is designated within the State, county, or other governmental subdivision for filing notices with respect to all property located in such State, county or other governmental subdivision. A State has not by law designated one office meeting the requirements of [paragraph (a)(1)(ii)](/current/title-27/section-70.148#p-70.148\(a\)\(1\)\(ii\)) of this section, if more than one office is designated in the State, county, or other governmental subdivision for filing notices with respect to all of the personal property of a particular taxpayer.
(3) *With the Recorder of Deeds of the District of Columbia.* If the property subject to the lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) is deemed situated, under the provision of [paragraph (b)](/current/title-27/section-70.148#p-70.148\(b\)) of this section, in the District of Columbia, the notice shall be filed in the office of the Recorder of Deeds of the District of Columbia.
(b) *Situs of property subject to lien.* For purposes of [paragraph (a)](/current/title-27/section-70.148#p-70.148\(a\)) of this section, property is deemed situated as follows:
(1) *Real property.* Real property is deemed situated at its physical location.
(2) *Personal property.* Personal property, whether tangible or intangible, is deemed situated at the residence of the taxpayer at the time the notice of lien is filed.
For purposes of [paragraph (b)(2)](/current/title-27/section-70.148#p-70.148\(b\)\(2\)) of this section, the residence of a corporation or partnership is deemed to be the place at which the principal executive office of the business is located, and the residence of a taxpayer whose residence is not within the United States is deemed to be in the District of Columbia.
(c) *Form* —
(1) *In general.* The notice referred to in [§ 70.145 of this part](/current/title-27/part-70/section-70.145) shall be filed on TTB Form 5651.2, “Notice of Federal Tax Lien under Internal Revenue Laws”. Such notice is valid notwithstanding any other provision of law regarding the form or content of a notice of lien. For example, omission from the notice of lien of a description of the property subject to the lien does not affect the validity thereof even though State law may require that the notices contain a description of the property subject to the lien.
(2) *TTB Form 5651.2 defined.* The term “TTB Form 5651.2” generally means a paper form. However, if a State in which a notice referred to in [§ 70.145 of this part](/current/title-27/part-70/section-70.145) is filed permits a notice of Federal tax lien to be filed by the use of an electronic or magnetic medium the term “TTB Form 5651.2” includes a TTB Form 5651.2 filed by the use of any electronic or magnetic medium permitted by that State. A TTB Form 5651.2 must identify the taxpayer, the tax liability giving rise to the lien, and the date the assessment arose regardless of the method used to file the notice of Federal tax lien.
([26 U.S.C. 6323](https://www.govinfo.gov/link/uscode/26/6323))
\[T.D. ATF-301, [55 FR 47616](https://www.federalregister.gov/citation/55-FR-47616), Nov. 14, 1990, as amended by T.D. TTB-91, [76 FR 5481](https://www.federalregister.gov/citation/76-FR-5481), Feb. 1, 2011]
#### § 70.149 Refiling of notice of tax lien.
(a) *In general* —
(1) *Requirement to refile.* In order to continue the effect of a notice of lien, the notice must be refiled in the place described in [paragraph (b)](/current/title-27/section-70.149#p-70.149\(b\)) of this section during the required refiling period (described in [paragraph (c)](/current/title-27/section-70.149#p-70.149\(c\)) of this section). In the event that two or more notices of lien are filed with respect to a particular tax assessment, the failure to comply with the provision of [paragraphs (b)(1) (i)](/current/title-27/section-70.149#p-70.149\(b\)\(1\)\(i\)) and [(c)](/current/title-27/section-70.149#p-70.149\(b\)\(1\)\(c\)) of this section in respect of one of the notices of lien does not affect the effectiveness of the refiling of any other notice of lien. Except for the filing of a notice of lien required by [paragraph (b)(1)(ii)](/current/title-27/section-70.149#p-70.149\(b\)\(1\)\(ii\)) of this section (relating to a change of residence), the validity of any refiling of a notice of lien is not affected by the refiling or nonrefiling of any other notice of lien.
(2) *Effect of refiling.* A timely refiled notice of lien is effective as of the date on which the notice of lien to which it relates was effective.
(3) *Effect of failure to refile.* Except as provided below, if the appropriate TTB officer fails to refile a notice of lien in the manner described in [paragraphs (b)](/current/title-27/section-70.149#p-70.149\(b\)) and [(c)](/current/title-27/section-70.149#p-70.149\(c\)) of this section, the notice of lien is not effective, after the expiration of the required refiling period, as against any person without regard to when the interest of the person in the property subject to the lien was acquired. However, the failure of the appropriate TTB officer to refile a notice of lien during the required refiling period will not, following the expiration of the refiling period, affect the effectiveness of the notice with respect to:
(i) Property which is the subject matter of a suit, to which the United States is a party, commenced prior to the expiration of the required refiling period, or
(ii) Property which has been levied upon by the United States prior to the expiration of the refiling period. However, if a suit or levy referred to in the preceding sentence is dismissed or released, respectively, and property is subject to the lien at such time, a notice of lien with respect to the property is not effective after the suit or levy is dismissed or released unless refiled during the required refiling period. Failure to refile a notice of lien does not affect the existence of the lien.
(4) *Filing of new notice.* If a notice of lien is not refiled, and if the lien remains in existence, the Bureau may nevertheless file a new lien either on the prescribed form for the filing of a notice of lien or on the form prescribed for refiling a notice of lien. This new filing must meet the requirements of [26 U.S.C. 6323(f)](https://www.govinfo.gov/link/uscode/26/6323) and [§ 70.148 of this part](/current/title-27/part-70/section-70.148) and is effective from the date on which such filing is made.
(b) *Place for refiling notice of lien* —
(1) *In general.* A notice of lien refiled during the required refiling period (described in [paragraph (c)](/current/title-27/section-70.149#p-70.149\(c\)) of this section) shall be effective only:
(i) If the notice of lien is refiled in the office in which the prior notice of lien (including a refiled notice) was filed under the provisions of [26 U.S.C. 6323](https://www.govinfo.gov/link/uscode/26/6323); and
(ii) In any case in which 90 days or more prior to the date the refiling of the notice of lien under [paragraph (a)(1)(i)](/current/title-27/section-70.149#p-70.149\(a\)\(1\)\(i\)) of this section is completed, the Bureau receives written information (in the manner described in [paragraph (b)(2)](/current/title-27/section-70.149#p-70.149\(b\)\(2\)) of this section) concerning a change in the taxpayer's residence, if a notice of such lien is also filed in accordance with [26 U.S.C. 6323(f)(1)(A)(ii)](https://www.govinfo.gov/link/uscode/26/6323) in the State in which such new residence is located (or, if such new residence is located in the District of Columbia or outside the United States, in the District of Columbia).
A notice of lien is considered as refiled in the office in which the prior notice or refiled notice was filed under the provisions of [26 U.S.C. 6323](https://www.govinfo.gov/link/uscode/26/6323) if it is refiled in the office which, pursuant to a change in the applicable local law, assumed the functions of the office in which the prior notice or refiled notice was filed. If on or before the 90th day referred to in [paragraph (b)(1)(ii)](/current/title-27/section-70.149#p-70.149\(b\)\(1\)\(ii\)) of this section, more than one written notice is received concerning a change in the taxpayer's residence, a notice of lien is required by this subdivision to be filed only with respect to the residence shown on the written notice received on the most recent date. [Paragraph (b)(1)(ii)](/current/title-27/section-70.149#p-70.149\(b\)\(1\)\(ii\)) of this section is applicable regardless of whether the taxpayer resides at the new residence on the date the refiling of notice of lien under [paragraph (b)(l)(i)](/current/title-27/section-70.149#p-70.149\(b\)\(l\)\(i\)) of this section is completed.
(2) *Notice of change of taxpayer's residence* —
(i) *In general.* For purposes of this section, a notice of change of a taxpayer's residence will be effective only if it:
(A) Is received, in writing, from the taxpayer or the taxpayer's representative by the appropriate TTB officer who filed the original notice of lien.
(B) Relates to an unpaid tax liability of the taxpayer, and
(C) States the taxpayer's name and the address of the taxpayer's new residence.
Although it is not necessary that a written notice contain the taxpayer's identifying number authorized by section 6109, it is preferable that it include such number. A return or amended return filed by the taxpayer with the Bureau which on its face indicates that there is a change in the taxpayer's address and correctly states the taxpayer's name, the address of the taxpayer's new residence, and the taxpayer's identifying number required by [26 U.S.C. 6109](https://www.govinfo.gov/link/uscode/26/6109) is sufficient notice under this paragraph.
(ii) *Other rules applicable.* Except as provided in [paragraph (b)(2)(i)](/current/title-27/section-70.149#p-70.149\(b\)\(2\)\(i\)) of this section, no communication (either written or oral) to the Bureau will be considered effective as notice of a change of a taxpayer's residence under this section, whether or not the Bureau has actual notice or knowledge of the taxpayer's new residence. For the purpose of determining the date on which a notice of change of a taxpayer's residence is received under this section, the notice shall be treated as received on the date it is actually received by the Bureau without reference to the provisions of [26 U.S.C. 7502](https://www.govinfo.gov/link/uscode/26/7502).
(c) *Required refiling period.* For the purpose of this section, the term “required refiling period” means:
(1) The 1-year period ending 30 days after the expiration of 6 years after the date of the assessment of the tax, and
(2) The 1-year period ending with the expiration of 6 years after the close of the preceding required refiling period for such notice of lien.
([26 U.S.C. 6323](https://www.govinfo.gov/link/uscode/26/6323))
#### § 70.150 Release of lien or discharge of property.
(a) *Release of lien.* An appropriate TTB officer is charged with releasing liens or discharging property from liens. The appropriate TTB officer must issue a certificate of release of a lien imposed with respect to any tax imposed by a provision of 26 U.S.C. enforced and administered by the Bureau, not later than 30 days after the day on which either:
(1) The appropriate TTB officer finds that the entire liability for the tax has been satisfied or has become unenforceable as a matter of law (and not merely uncollectible or unenforceable as a matter of fact). Tax liabilities frequently are unenforceable in fact for the time being, due to the temporary nonpossession by the taxpayer of discoverable property or property rights. In all cases the liability for the payment of the tax continues until satisfaction of the tax in full or until the expiration of the statutory period for collection, including such extension of the period for collection as may be agreed upon in writing by the taxpayer and the appropriate TTB officer.
(2) The appropriate TTB officer is furnished and accepts a bond that is conditioned upon the payment of the amount assessed (together with all interest in respect thereof and any expenses to which the Government has been put in the matter), within the time agreed upon in the bond, but not later than 6 months before the expiration of the statutory period for collection, including any period for collection agreed upon in writing by the appropriate TTB officer and the taxpayer. For provisions relating to bonds, see [26 U.S.C. 7101](https://www.govinfo.gov/link/uscode/26/7101) and [7102](https://www.govinfo.gov/link/uscode/26/7102) and [§§ 70.281](/current/title-27/part-70/section-70.281) and [70.282 of this part](/current/title-27/part-70/section-70.282).
(b) *Discharge of specific property from the lien* —
(1) *Property double the amount of the liability.* The appropriate TTB officer may, in that officer's discretion, issue a certificate of discharge of any part of the property subject to a lien imposed under [26 U.S.C. 64](https://www.govinfo.gov/link/uscode/26/64) if the Bureau determines that the fair market value of that part of the property remaining subject to the lien is at least double the sum of the amount of the unsatisfied liability secured by the lien and of the amount of all other liens upon the property which have priority over the lien. In general, fair market value is that amount which one ready and willing but not compelled to buy would pay to another ready and willing but not compelled to sell the property.
(2) *Part payment; interest of United States valueless* —
(*i*) *Part payment.* The appropriate TTB officer may, in that officer's discretion, issue a certificate of discharge of any part of the property subject to a lien imposed under [26 U.S.C. 64](https://www.govinfo.gov/link/uscode/26/64) if there is paid over to the Bureau in partial satisfaction of the liability secured by the lien an amount determined by the Bureau to be not less than the value of the interest of the United States in the property to be so discharged. In determining the amount to be paid, the appropriate TTB officer will take into consideration all the facts and circumstances of the case, including the expenses to which the Government has been put in the matter. In no case shall the amount to be paid be less than the value of the interest of the United States in the property with respect to which the certificate of discharge is to be issued.
(ii) *Interest of the United States valueless.* The appropriate TTB officer may, in that official's discretion, issue a certificate of discharge of any part of the property subject to the lien if the Bureau determines that the interest of the United States in the property to be so discharged has no value.
(iii) *Valuation of interest of United States.* For purposes of this [paragraph (b)(2)](/current/title-27/section-70.150#p-70.150\(b\)\(2\)), in determining the value of the interest of the United States in the property, or any part thereof, with respect to which the certificate of discharge is to be issued, the appropriate TTB officer shall give consideration to the value of the property and the amount of all liens and encumbrances thereon having priority over the Federal tax lien. In determining the value of the property, the appropriate TTB officer may, in that official's discretion, give consideration to the forced sale value of the property in appropriate cases.
(3) *Discharge of property by substitution of proceeds of sale.* The appropriate TTB officer may, in that officer's discretion, issue a certificate of discharge of any part of the property subject to a lien imposed under [26 U.S.C. 64](https://www.govinfo.gov/link/uscode/26/64) if such part of the property is sold and, pursuant to a written agreement with the appropriate TTB officer, the proceeds of the sale are held, as a fund subject to the liens and claims of the United States, in the same manner and with the same priority as the lien or claim had with respect to the discharged property. This subparagraph does not apply unless the sale divests the taxpayer of all right, title, and interest in the property sought to be discharged. Any reasonable and necessary expenses incurred in connection with the sale of the property and the administration of the sale proceeds shall be paid by the applicant or from the proceeds of the sale before satisfaction of any lien or claim of the United States.
(4) *Application for certificate of discharge.* Any person desiring a certificate of discharge under this paragraph shall submit an application in writing to the appropriate TTB officer. The application shall contain such information as the appropriate TTB officer may require.
(c) *Subordination of lien* —
(1) *By payment of the amount subordinated.* The appropriate TTB officer may, in that officer's discretion, issue a certificate of subordination of a lien imposed under [26 U.S.C. 64](https://www.govinfo.gov/link/uscode/26/64) upon any part of the property subject to the lien if there is paid over to the appropriate TTB officer an amount equal to the amount of the lien or interest to which the certificate subordinates the lien of the United States. For this purpose, the tax lien may be subordinated to another lien or interest on a dollar-for-dollar basis. For example, if a notice of a Federal tax lien is filed and a delinquent taxpayer secures a mortgage loan on a part of the property subject to the tax lien and pays over the proceeds of the loan to the appropriate TTB officer after an application for a certificate of subordination is approved, the appropriate TTB officer will issue a certificate of subordination. This certificate will have the effect of subordinating the tax lien to the mortgage.
(2) *To facilitate tax collection.* The appropriate TTB officer may, in that officer's discretion, issue a certificate of subordination of a lien imposed under [26 U.S.C. 64](https://www.govinfo.gov/link/uscode/26/64) upon any part of the property subject to the lien if the appropriate TTB officer believes that the subordination of the lien will ultimately result in an increase in the amount realized by the United States from the property subject to lien and will facilitate the ultimate collection of the tax liability.
(3) *Application for certificate of subordination.* Any person desiring a certificate of subordination under this paragraph shall submit an application therefor in writing to the appropriate TTB officer. The application shall contain such information as the appropriate TTB officer may require.
(d) *Nonattachment of lien.* If the appropriate TTB officer determines that, because of confusion of names or otherwise, any person (other than the person against whom the tax was assessed) is or may be injured by the appearance that a notice of lien filed in accordance with [§ 70.148 of this part](/current/title-27/part-70/section-70.148) refers to such person, the appropriate TTB officer may issue a certificate of nonattachment. Such certificate shall state that the lien, notice of which has been filed, does not attach to the property of such person. Any person desiring a certificate of nonattachment under this paragraph shall submit an application therefor in writing to the appropriate TTB officer. The application shall contain such information as the appropriate TTB officer may require.
(e) *Effect of certificate* —
(1) *Conclusiveness.* Except as provided in [paragraphs (e) (2)](/current/title-27/section-70.150#p-70.150\(e\)\(2\)) and [(3)](/current/title-27/section-70.150#p-70.150\(e\)\(3\)) of this section, if a certificate is issued under [26 U.S.C. 6325](https://www.govinfo.gov/link/uscode/26/6325) by the appropriate TTB officer and the certificate is filed in the same office as the notice of lien to which it relates (if the notice of lien has been filed), the certificate shall have the following effect:
(i) In the case of a certificate of release issued under [paragraph (a)](/current/title-27/section-70.150#p-70.150\(a\)) of this section, the certificate shall be conclusive that the tax lien referred to in the certificate is extinguished;
(ii) In the case of a certificate of discharge issued under [paragraph (b)](/current/title-27/section-70.150#p-70.150\(b\)) of this section, the certificate shall be conclusive that the property covered by the certificate is discharged from the tax lien;
(iii) In the case of a certificate of subordination issued under [paragraph (c)](/current/title-27/section-70.150#p-70.150\(c\)) of this section, the certificate shall be conclusive that the lien or interest to which the Federal tax lien is subordinated is superior to the tax lien; and
(iv) In the case of a certificate of nonattachment issued under [paragraph (d)](/current/title-27/section-70.150#p-70.150\(d\)) of this section, the certificate shall be conclusive that the lien of the United States does not attach to the property of the person referred to in the certificate.
(2) *Revocation of certificate of release or nonattachment* —
(i) *In general.* If the appropriate TTB officer determines that either:
(A) A certificate of release or a certificate of nonattachment of the general tax lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) was issued erroneously or improvidently, or
(B) A certificate of release of such lien was issued in connection with a compromise agreement under [26 U.S.C. 7122](https://www.govinfo.gov/link/uscode/26/7122) which has been breached, and if the period of limitation on collection after assessment of the tax liability has not expired, the appropriate TTB officer may revoke the certificate and reinstate the tax lien.
(ii) *Method of revocation and reinstatement.* The revocation and reinstatement described in [paragraph (e)(2)(i)](/current/title-27/section-70.150#p-70.150\(e\)\(2\)\(i\)) of this section is accomplished by:
(A) Mailing notice of the revocation to the taxpayer at the taxpayer's last known address, and
(B) Filing notice of the revocation of the certificate in the same office in which the notice of lien to which it relates was filed (if the notice of lien has been filed).
(iii) *Effect of reinstatement* —
(A) *Effective date.* A tax lien reinstated in accordance with the provisions of this [paragraph (e)(2)](/current/title-27/section-70.150#p-70.150\(e\)\(2\)) is effective on and after the date the notice of revocation is mailed to the taxpayer in accordance with the provisions of [paragraph (e)(2)(ii)(A)](/current/title-27/section-70.150#p-70.150\(e\)\(2\)\(ii\)\(A\)) of this section, but the reinstated lien is not effective before the filing of notice of revocation, in accordance with the provisions of [paragraph (e)(2)(ii)(B)](/current/title-27/section-70.150#p-70.150\(e\)\(2\)\(ii\)\(B\)) of this section, if the filing is required by reason of the fact that a notice of the lien had been filed.
(B) *Treatment of reinstated lien.* As of the effective date of reinstatement, a reinstated lien has the same force and effect as a general tax lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) which arises upon assessment of a tax liability. The reinstated lien continues in existence until the liability is satisfied or until the expiration of the period of limitation on collection after assessment of the tax liability to which it relates. The reinstatement of the lien does not retroactively reinstate a previously filed notice of lien. The reinstated lien is not valid against any holder of a lien or interest described in [§ 70.145 of this part](/current/title-27/part-70/section-70.145) until notice of the reinstated lien has been filed in accordance with the provisions of [§ 70.148 of this part](/current/title-27/part-70/section-70.148) subsequent to or concurrent with the time the reinstated lien became effective.
(3) *Certificates void under certain conditions.* Notwithstanding any other provisions of 26 U.S.C. subtitle F, any lien for Federal taxes attaches to any property with respect to which a certificate of discharge has been issued if the person liable for the tax reacquires the property after the certificate has been issued. Thus, if property subject to a Federal tax lien is discharged therefrom and is later reacquired by the delinquent taxpayer at a time when the lien is still in existence, the tax lien attaches to the reacquired property and is enforceable against it as in the case of after-acquired property generally.
(f) *Filing of certificates and notices.* If a certificate or notice described in this section may not be filed in the office designated by State law in which the notice of lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) (to which the certificate or notice relates) is filed, the certificate or notice is effective if filed in the office of the clerk of the United States district court for the judicial district in which the State office where the notice of lien is filed is situated.
([26 U.S.C. 6325](https://www.govinfo.gov/link/uscode/26/6325))
\[T.D. ATF-301, [55 FR 47616](https://www.federalregister.gov/citation/55-FR-47616), Nov. 14, 1990, as amended by T.D. ATF-450, [66 FR 29025](https://www.federalregister.gov/citation/66-FR-29025), May 29, 2001]
#### § 70.151 Administrative appeal of the erroneous filing of notice of Federal tax lien.
(a) *In general.* Any person may appeal to the officer who filed the Federal tax lien on the property or rights to property of such person for a release of lien alleging an error in the filing of notice of lien. Such appeal may be used only for the purpose of correcting the erroneous filing of a notice of lien, not to challenge the underlying tax liability that led to the imposition of a lien.
(b) *Certificate of Release.* If the officer who filed the lien determines that the filing of the notice of any lien was erroneous that officer shall expeditiously, and to the extent practicable, within 14 days after such determination, issue a certificate of release of lien. The certificate of release of such lien shall include a statement that the filing of notice of lien was erroneous.
(c) *Appeal alleging an error in the filing of notice of lien.* For purposes of [paragraph (a)](/current/title-27/section-70.151#p-70.151\(a\)) of this section, an appeal of the filing of notice of Federal tax lien must be based on any one of the following allegations:
(1) The tax liability that gave rise to the lien, plus any interest and additions to tax associated with said liability, was satisfied prior to the filing of notice of lien;
(2) The tax liability that gave rise to the lien was assessed in violation of title 11 of the United States Code (the Bankruptcy Code); or
(3) The statutory period for collection of the tax liability that gave rise to the lien expired prior to the filing of notice of Federal tax lien.
(d) *Notice of Federal tax lien that lists multiple liabilities.* When a notice of Federal tax lien lists multiple liabilities, a person may appeal the filing of notice of lien with respect to one or more of the liabilities listed in the notice, if the notice was erroneously filed with respect to such liabilities. If a notice of Federal tax lien was erroneously filed with respect to one or more liabilities listed in the notice, the officer who filed the Federal tax lien shall issue a certificate of release with respect to such liabilities.
(e) *Procedures for appeal* —
(1) *Manner.* An appeal of the filing of notice of Federal tax lien shall be made in writing to the officer who filed the lien.
(2) *Form.* The appeal shall include the following information and documents:
(i) Name, current address, and taxpayer identification number of the person appealing the filing of notice of Federal tax lien;
(ii) A copy of the notice of Federal tax lien affecting the property, if available; and
(iii) The grounds upon which the filing of notice of Federal tax lien is being appealed.
(A) If the ground upon which the filing of notice is being appealed is that the tax liability in question was satisfied prior to the filing, proof of full payment as defined in [paragraph (f)](/current/title-27/section-70.151#p-70.151\(f\)) of this section must be provided.
(B) If the ground upon which the filing of notice is being appealed is that the tax liability that gave rise to the lien was assessed in violation of title 11 of the United States Code (the Bankruptcy Code), the appealing party must provide the identity of the court, the district in which the bankruptcy petition was filed, a docket number and the date of filing of the bankruptcy petition.
(3) *Time.* An administrative appeal of the erroneous filing of notice of Federal tax lien shall be made within 1 year after the taxpayer becomes aware of the erroneously filed tax lien.
(f) *Proof of full payment.* As used in [paragraph (e)(2)(iii)(A)](/current/title-27/section-70.151#p-70.151\(e\)\(2\)\(iii\)\(A\)) of this section, the term “proof of full payment” means:
(1) An Alcohol and Tobacco Tax and Trade Bureau, receipt reflecting full payment of the tax liability in question prior to the date the Federal tax lien was filed;
(2) A cancelled check payable to the Alcohol and Tobacco Tax and Trade Bureau in an amount which was sufficient to satisfy the tax liability for which release is being sought; or
(3) Any other manner of proof acceptable to the officer who filed the lien.
(g) *Exception.* Whenever necessary to protect the interests of the government, an appropriate TTB officer other than the officer who filed the lien, may receive and act on an administrative appeal of a lien in accordance with this section.
(h) *Exclusive remedy.* The appeal established by section 6326 of the Internal Revenue Code and by this section shall be the exclusive administrative remedy with respect to the erroneous filing of a notice of Federal tax lien.
\[T.D. ATF-316, [56 FR 55079](https://www.federalregister.gov/citation/56-FR-55079), Oct. 24, 1991]
### Seizure of Property for Collection of Taxes
#### § 70.161 Levy and distraint.
(a) *Authority to levy* —
(1) *In general.* If any person liable to pay any tax neglects or refuses to pay the tax within 10 days after notice and demand, the appropriate TTB officer who initiated the assessment may proceed to collect the tax by levy, provided the taxpayer has been furnished the notice described in [§ 70.162(a) of this part](/current/title-27/part-70/section-70.162#p-70.162\(a\)). The appropriate TTB officer may levy upon any property, or rights to property, whether real or personal, tangible or intangible, belonging to the taxpayer. The appropriate TTB officer may also levy upon property with respect to which there is a lien provided by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) for the payment of the tax. For exemption of certain property from levy, see [26 U.S.C. 6334](https://www.govinfo.gov/link/uscode/26/6334) and [§§ 70.241](/current/title-27/part-70/section-70.241) through [70.245 of this part](/current/title-27/part-70/section-70.245). For exemption of certain property from levy, see [26 U.S.C. 6334](https://www.govinfo.gov/link/uscode/26/6334) and [§§ 70.241](/current/title-27/part-70/section-70.241) through [70.245 of this part](/current/title-27/part-70/section-70.245). As used in [26 U.S.C. 6331](https://www.govinfo.gov/link/uscode/26/6331) and this section, the term “tax” includes any interest, additional amount, addition to tax, or assessable penalty, together with costs and expenses. Property subject to a Federal tax lien which has been sold or otherwise transferred by the taxpayer may be seized while in the hands of the transferee or any subsequent transferee. However, see [26 U.S.C. 6323(i)(2)](https://www.govinfo.gov/link/uscode/26/6323) and [§ 70.144 of this part](/current/title-27/part-70/section-70.144) concerning the subrogation rights of certain transferees. Levy may be made by serving a Notice of Levy on any person in possession of, or obligated with respect to, property or rights to property subject to levy, including receivables, bank accounts, evidences of debt, securities, and salaries, wages, commissions, or other compensation. Except as provided in [§ 70.162(c) of this part](/current/title-27/part-70/section-70.162#p-70.162\(c\)) with regard to a levy on salary or wages, a levy extends only to property possessed and obligations which exist at the time of the levy. Obligations exist when the liability of the obligor is fixed and determinable although the right to receive payment thereof may be deferred until a later date. For example, if on the first day of the month a delinquent taxpayer sold personal property subject to an agreement that the buyer remit the purchase price on the last day of the month, a levy made on the buyer on the 10th day of the month would reach the amount due on the sale, although the buyer need not satisfy the levy by paying over the amount to the appropriate TTB officer until the last day of the month. Similarly, a levy only reaches property in the possession of the person levied upon at the time the levy is made. For example, a levy made on a bank with respect to the account of a delinquent taxpayer is satisfied if the bank surrenders the amount of the taxpayer's balance at the time the levy is made, including interest thereon to the date of surrender. The levy has no effect upon any subsequent deposit made in the bank by the taxpayer. Subsequent deposits may be reached only by a subsequent levy on the bank.
(2) *Jeopardy cases.* If the appropriate TTB officer finds that the collection of any tax is in jeopardy, that officer may make notice and demand for immediate payment of such tax and, upon failure or refusal to pay such tax, collection thereof by levy shall be lawful without regard to the 10-day period provided in [26 U.S.C. 6331(a)](https://www.govinfo.gov/link/uscode/26/6331) or the 30-day period provided in [26 U.S.C. 6331(d)](https://www.govinfo.gov/link/uscode/26/6331).
(3) *Bankruptcy or receivership cases.* During a bankruptcy proceeding or a receivership proceeding in either a Federal or a State court, the assets of the taxpayer are in general under the control of the court in which such proceeding is pending. Taxes cannot be collected by levy upon assets in the custody of a court, whether or not such custody is incident to a bankruptcy or receivership proceeding, except where the proceeding has progressed to such a point that the levy would not interfere with the work of the court or where the court grants permission to levy. Any assets which under applicable provisions of law are not under the control of the court may be levied upon, for example, property exempt from court custody under State law or the bankrupt's earnings and property acquired after the date of bankruptcy. However, levy upon such property is not mandatory and the Government may rely upon payment of taxes in the proceeding.
(4) *Certain types of compensation* —
(i) *Federal employees.* Levy may be made upon the salary or wages of any officer or employee (including members of the Armed Forces), or elected or appointed official, of the United States, the District of Columbia, or any agency or instrumentality of either, by serving a notice of levy on the employer of the delinquent taxpayer. As used in this paragraph, the term “employer” means:
(A) The officer or employee of the United States, the District of Columbia, or of the agency or instrumentality of the United States or the District of Columbia, who has control of the payment of the wages, or
(B) Any other officer or employee designated by the head of the branch, department, or agency, or instrumentality of the United States or of the District of Columbia as the party upon whom service of the notice of levy may be made.
If the head of such branch, department, agency or instrumentality designates an officer or employee other than one who has control of the payment of the wages, as the party upon whom service of the notice of levy may be made, such head shall promptly notify the appropriate TTB officer of the name and address of each officer or employee so designated and the scope or extent of the authority of such designee.
(ii) *State and municipal employees.* Salaries, wages, or other compensation of any officer, employee, or elected or appointed official of a State or Territory, or of any agency, instrumentality, or political subdivision thereof, are also subject to levy to enforce collection of any Federal tax.
(iii) *Seamen.* Notwithstanding the provisions of section 12 of the Seamen's Act of 1915 ([46 U.S.C. 601](https://www.govinfo.gov/link/uscode/46/601)), wages of seamen, apprentice seamen, or fishermen employed on fishing vessels are subject to levy. See [26 U.S.C. 6334(c)](https://www.govinfo.gov/link/uscode/26/6334).
(5) *Noncompetent Indians.* Solely for purposes of [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) and [6331](https://www.govinfo.gov/link/uscode/26/6331), any interest in restricted land held in trust by the United States for an individual noncompetent Indian (and not for a tribe) shall not be deemed to be property, or a right to property, belonging to such Indian.
(b) *Successive seizures.* Whenever any property or rights to property upon which a levy has been made are not sufficient to satisfy the claim of the United States for which the levy is made, the appropriate TTB officer may thereafter, and as often as may be necessary, proceed to levy in like manner upon any other property or rights to property subject to levy of the person against whom such claim exists or on which there is a lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) (or the corresponding provision of prior law) for the payment of such claim until the amount due from such person, together with all costs and expenses, is fully paid.
(c) *Service of notice of levy by mail.* A notice of levy may be served by mailing the notice to the person upon whom the service of a notice of levy is authorized under [paragraph (a)(1)](/current/title-27/section-70.161#p-70.161\(a\)\(1\)) of this section. In such a case the date and time the notice is delivered to the person to be served is the date and time the levy is made. If the notice is sent by certified or registered mail, return receipt requested, the date of delivery on the receipt is treated as the date the levy is made. If, after receipt of a notice of levy, an officer or other person authorized to act on behalf of the person served signs and notes the date and time of receipt on the notice of levy, the date and time so noted will be presumed to be, in the absence of proof to the contrary, the date and time of delivery. Any person may upon written notice to the appropriate TTB officer, have all notices of levy by mail sent to one designated office. After such a notice is received by the appropriate TTB officer, notices of levy by mail will sent to the designated office until a written notice withdrawing the request or a written notice designating a difference office is received by the appropriate TTB officer.
([26 U.S.C. 6331](https://www.govinfo.gov/link/uscode/26/6331) and [6332](https://www.govinfo.gov/link/uscode/26/6332))
\[T.D. ATF-6, [38 FR 32445](https://www.federalregister.gov/citation/38-FR-32445), Nov. 26, 1973,as amended by T.D. ATF-450, [66 FR 29026](https://www.federalregister.gov/citation/66-FR-29026), May 29, 2001; T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
#### § 70.162 Levy and distraint on salary and wages.
(a) *Notice of intent to levy.* Levy may be made for any unpaid tax only after the appropriate TTB officer has notified the taxpayer in writing of the intent to levy. The notice must be given in person, left at the dwelling or usual place of business of the taxpayer, or be sent by certified or registered mail to the taxpayer's last known address, no less than 30 days before the day of levy. The notice of intent to levy is in addition to, and may be given at the same time as, the notice and demand described in [§ 70.161 of this part](/current/title-27/part-70/section-70.161).
(b) *Jeopardy.* [Paragraph (a)](/current/title-27/section-70.162#p-70.162\(a\)) of this section does not apply to a levy if the appropriate TTB officer has made a finding under [§ 70.161(a)(2) of this part](/current/title-27/part-70/section-70.161#p-70.161\(a\)\(2\)) that the collection of tax is in jeopardy.
(c) *Continuing effect of levy on salary or wages.* A levy on salary or wages is continuous from the time of the levy until the liability out of which the levy arose is released under [26 U.S.C. 6343](https://www.govinfo.gov/link/uscode/26/6343) and [§ 70.167 of this part](/current/title-27/part-70/section-70.167). For this purpose, the term “salary or wages” includes compensation for services paid in the form of fees, commissions, bonuses, and similar items. The levy attaches to both salary or wages earned but not yet paid at the time of the levy, and salary or wages earned and becoming payable (or paid in the form of an advance) subsequent to the date of the levy, until the levy is released pursuant to [paragraph (d)](/current/title-27/section-70.162#p-70.162\(d\)) of this section. In general, salaries or wages that are the subject of a continuing levy, if not exempt from levy under [26 U.S.C. 6334(a)](https://www.govinfo.gov/link/uscode/26/6334) (8) or (9), become payable to the officer who made the levy as the payor would otherwise be obligated to pay over the money to the taxpayer. For example, if the wage earner is paid on the Wednesday following the close of each workweek, a levy made upon the taxpayer's employer on any Monday would reach both the wages due for the prior workweek and the wages for succeeding workweeks as such wages become payable. In such a case the levy would be satisfied if the employer, on the first Wednesday after the levy and on each Wednesday thereafter, pays over to the officer who made the levy wages which would otherwise be paid to the employee on such Wednesday, until the employer receives a notice of release from levy described in [paragraph (d)](/current/title-27/section-70.162#p-70.162\(d\)) of this section. See, however, [§ 70.245(d) of this part](/current/title-27/part-70/section-70.245#p-70.245\(d\)) for rules which permit a delayed payment to the officer who made the levy in certain cases where amounts payable to the taxpayer are exempt from levy under [26 U.S.C. 6334](https://www.govinfo.gov/link/uscode/26/6334) (a)(9) and (d).
(d) *Release and notice of release from levy.* The officer who made the levy will promptly release a continuing levy on salary or wages when the conditions of [26 U.S.C. 6343](https://www.govinfo.gov/link/uscode/26/6343) are met. The officer who made the levy will also promptly notify the person upon whom the levy was made that it has been released.
([26 U.S.C. 6331](https://www.govinfo.gov/link/uscode/26/6331))
#### § 70.163 Surrender of property subject to levy.
(a) *Requirement* —
(1) *In general.* Except as otherwise provided in [26 U.S.C. 6332](https://www.govinfo.gov/link/uscode/26/6332), relating to levy in the case of banks or life insurance and endowment contracts, any person in possession of (or obligated with respect to) property or rights to property subject to levy and upon which a levy has been made shall, upon demand of the officer who made the levy, surrender the property or rights (or discharge the obligation) to the officer who made the levy, except that part of the property or rights (or obligation) which, at the time of the demand, is actually or constructively under the jurisdiction of a court because of an attachment or execution under any judicial process.
(2) *Property held by banks.*
(i) Any bank shall surrender any deposits (including interest thereon) in such bank only after 21 days after service of levy.
(ii) Notwithstanding [paragraph (a)(1)](/current/title-27/section-70.163#p-70.163\(a\)\(1\)) of this section, if a levy has been made upon property or rights to property subject to levy which a bank engaged in the banking business in the United States or a possession of the United States is in possession of (or obligated with respect to), an appropriate TTB officer shall not enforce the levy with respect to any deposits held in an office of the bank outside the United States or a possession of the United States, unless the notice of levy specifies that such officer intends to reach such deposits. The notice of levy must not specify that such officer intends to reach such deposits unless that officer making such levy believes:
(A) That the taxpayer is within the jurisdiction of a U.S. court at the time the levy is made and that the bank is in possession of (or obligated with respect to) deposits of the taxpayer in an office of the bank outside the United States or a possession of the United States; or
(B) That the taxpayer is not within the jurisdiction of a U.S. court at the time the levy is made, that the bank is in possession of (or obligated with respect to) deposits of the taxpayer in an office outside the United States or a possession of the United States, and that such deposits consist, in whole or in part, of funds transferred from the United States or a possession of the United States in order to hinder or delay the collection of a tax imposed by provisions of 26 U.S.C. enforced and administered by the Bureau.
(b) *Enforcement of levy* —
(1) *Extent of personal liability.* Any person who, upon demand of the appropriate TTB officer, fails or refuses to surrender any property or right to property subject to levy is liable in his/her own person and estate in a sum equal to the value of the property or rights not so surrendered, together with costs and interests. The liability, however, may not exceed the amount of the taxes for the collection of which the levy was made. Interest is to be computed at the annual rate referred to in regulations under 26 U.S.C. 6221 from the date of the levy, or, in the case of a continuing levy on salary or wages (see [26 U.S.C. 6331(e)](https://www.govinfo.gov/link/uscode/26/6331)), from the date the person would otherwise have been obligated to pay over the wages or salary to the taxpayer. Any amount recovered, other than cost, will be credited against the tax liability for the collection of which the levy was made.
(2) *Penalty for violation.* In addition to the personal liability described in [paragraph (b)(1)](/current/title-27/section-70.163#p-70.163\(b\)\(1\)) of this section, any person who is required to surrender property or rights to property and who fails or refuses to surrender them without reasonable cause is liable for a penalty equal to 50 percent of the amount recoverable under [26 U.S.C. 6332(d)(2)](https://www.govinfo.gov/link/uscode/26/6332). No part of the penalty described in this subparagraph shall be credited against the tax liability for the collection of which the levy was made. The penalty described in this subparagraph is not applicable in cases where a bona fide dispute exists concerning the amount of the property to be surrendered pursuant to a levy or concerning the legal effectiveness of the levy. However, if a court in a later enforcement suit sustains the levy, then reasonable cause would usually not exist to refuse to honor a later levy made under similar circumstances.
(c) *Effect of honoring levy.* Any person in possession of, or obligated with respect to, property or rights to property subject to levy and upon which a levy has been made who, upon demand by the appropriate TTB officer, surrenders the property or rights to property, or discharges the obligation, to that officer, or who pays a liability described in [paragraph (b)(1)](/current/title-27/section-70.163#p-70.163\(b\)\(1\)) of this section, is discharged from any obligation or liability to the delinquent taxpayer with respect to the property or rights to property arising from the surrender or payment. If an insuring organization satisfies a levy with respect to a life insurance or endowment contract in accordance with [§ 70.164 of this part](/current/title-27/part-70/section-70.164), the insuring organization is discharged from any obligation or liability to any beneficiaries of the contract arising from the surrender or payment. Also, it is discharged from any obligation or liability to the insured or other owner. Any person who mistakenly surrenders to the United States property or rights to property not properly subject to levy is not relieved from liability to a third party who owns the property. The owners of mistakenly surrendered property may, however, secure from the United States the administrative relief provided for in [26 U.S.C. 6343(b)](https://www.govinfo.gov/link/uscode/26/6343) or may bring suit to recover the property under [26 U.S.C. 7426](https://www.govinfo.gov/link/uscode/26/7426).
(d) *Person defined.* In addition to the definition given in [§ 70.11 of this part](/current/title-27/part-70/section-70.11), the term “person,” as used in 26 U.S.C.A 6332(a) and this section, includes an officer or employee of a corporation or a member or employee of a partnership, who is under a duty to surrender the property or rights to property or to discharge the obligation. In the case of a levy upon the salary or wages of an officer, employee, or elected or appointed official of the United States, the District of Columbia, or any agency or instrumentality of either, the term “person” includes the officer or employee of the United States, of the District of Columbia, or of such agency or instrumentality who is under a duty to discharge the obligation. As to the officer or employee who is under such duty, see [§ 70.161(a)(4)(i) of this part](/current/title-27/part-70/section-70.161#p-70.161\(a\)\(4\)\(i\)).
([26 U.S.C. 6332](https://www.govinfo.gov/link/uscode/26/6332))
\[T.D. ATF-6, [38 FR 32445](https://www.federalregister.gov/citation/38-FR-32445), Nov. 26, 1973, as amended by T.D. ATF-450, [66 FR 29026](https://www.federalregister.gov/citation/66-FR-29026), May 29, 2001; T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
#### § 70.164 Surrender of property subject to levy in the case of life insurance and endowment contracts.
(a) *In general.* This section provides special rules relating to the surrender of property subject to levy in the case of life insurance and endowment contracts. The provisions of [§ 70.163 of this part](/current/title-27/part-70/section-70.163) which relate generally to the surrender of property subject to levy apply, to the extent not inconsistent with the special rules set forth in this section, to a levy in the case of life insurance and endowment contracts.
(b) *Effect of service of notice of levy* —
(1) *In general.* A notice of levy served by an appropriate TTB officer on an insuring organization with respect to a life insurance or endowment contract issued by the organization shall constitute:
(i) A demand by the officer who made the levy for the payment of the cash loan value of the contract adjusted in accordance with [paragraph (c)](/current/title-27/section-70.164#p-70.164\(c\)) of this section, and
(ii) The exercise of the right of the person against whom the tax is assessed to the advance of such cash loan value.
It is unnecessary for the official who made the levy to surrender the contract document to the insuring organization upon which the levy is made. However, the notice of levy will include a certification by the official who made the levy that a copy of the notice of levy has been mailed to the person against whom the tax is assessed at that person's last known address. At the time of service of the notice of levy, the levy is effective with respect to the cash loan value of the insurance contract, subject to the condition that if the levy is not satisfied or released before the 90th day after the date of service, the levy can be satisfied only by payment of the amount described in [paragraph (c)](/current/title-27/section-70.164#p-70.164\(c\)) of this section. Other than satisfaction or release of the levy, no event during the 90-day period subsequent to the date of service of the notice of levy shall release the cash loan value from the effect of the levy. For example, the termination of the policy by the taxpayer or by the death of the insured during such 90-day period shall not release the levy. For the rules relating to the time when the insuring organization is to pay over the required amount, see [paragraph (c)](/current/title-27/section-70.164#p-70.164\(c\)) of this section.
(2) *Notification of amount subject to levy* —
(i) *Full payment before the 90th day.* In the event that the unpaid liability to which the levy relates is satisfied at any time during the 90-day period subsequent to the date of service of the notice of levy, the officer who filed the notice of levy will promptly give the insuring organization written notification that the levy is released.
(ii) *Notification after the 90th day.* In the event that notification is not given under [paragraph (b)(2)(i)](/current/title-27/section-70.164#p-70.164\(b\)\(2\)\(i\)) of this section, the officer who filed the notice of levy will, promptly following the 90th day after service of the notice of levy, give the insuring organization written notification of the current status of all accounts listed on the notice of levy, and of the total payments received since service of the notice of levy. This notification will be given to the insuring organization whether or not there has been any change in the status of the accounts.
(c) *Satisfaction of levy.* The levy described in [paragraph (b)](/current/title-27/section-70.164#p-70.164\(b\)) of this section with respect to a life insurance or endowment contract shall be deemed to be satisfied if the insuring organization pays over to the officer who made the levy the amount which the person against whom the tax is assessed could have had advanced by the organization on the 90th day after service of the notice of levy on the organization. However, this amount is increased by the amount of any advance (including contractual interest thereon), generally called a policy loan, made to the person on or after the date the organization has actual notice or knowledge, within the meaning of [26 U.S.C. 6323(i)(1)](https://www.govinfo.gov/link/uscode/26/6323), of the existence of the tax lien with respect to which the levy is made. The insuring organization may, nevertheless, make an advance (including contractual interest thereon), generally called an automatic premium loan, made automatically to maintain the contract in force under an agreement entered into before the organization has such actual notice or knowledge. In any event, the amount paid to the appropriate TTB officer by the insuring organization is not to exceed the amount of the unpaid liability shown on the notification described in [paragraph (b)(2)](/current/title-27/section-70.164#p-70.164\(b\)\(2\)) of this section. The amount determined in accordance with the provisions of this section, subject to the levy, shall be paid to the appropriate TTB officer by the insuring organization promptly after receipt of the notification described in [paragraph (b)(2)](/current/title-27/section-70.164#p-70.164\(b\)\(2\)) of this section. The satisfaction of a levy with respect to a life insurance or endowment contract will not discharge the contract from the tax lien. However, see [26 U.S.C. 6323(b)(9)(C)](https://www.govinfo.gov/link/uscode/26/6323) and [§ 70.231(i) of this part](/current/title-27/part-70/section-70.231#p-70.231\(i\)) concerning the liability of an insurance company after satisfaction of a levy with respect to a life insurance or endowment contract. If the person against whom the tax is assessed so directs, the insuring organization, on a date before the 90th day after service of the notice of levy, may satisfy the levy by paying over an amount computed in accordance with the provisions of this subparagraph substituting such date for the 90th day. In the event of termination of the policy by the taxpayer or by the death of the insured on a date before the 90th day after service of the notice of levy, the amount to be paid over to the appropriate TTB officer by the insuring organization in satisfaction of the levy shall be an amount computed in accordance with the provisions of this subparagraph substituting the date of termination of the policy or the date of death for the 90th day.
(d) *Other enforcement proceedings.* The satisfaction of the levy described in [paragraph (b)](/current/title-27/section-70.164#p-70.164\(b\)) of this section by an insuring organization shall be without prejudice to any civil action for the enforcement of any Federal tax lien with respect to a life insurance or endowment contract. Thus, this levy procedure is not the exclusive means of subjecting the life insurance and endowment contracts of the person against whom a tax is assessed to the collection of the person's unpaid assessment. The United States may choose to foreclose the tax lien in any case where it is appropriate, as, for example, to reach the cash surrender value (as distinguished from cash loan value) of a life insurance or endowment contract.
(e) *Cross references.*
(1) For provisions relating to priority of certain advances with respect to a life insurance or endowment contract after satisfaction of a levy pursuant to [26 U.S.C. 6332(b)](https://www.govinfo.gov/link/uscode/26/6332), see [26 U.S.C. 6323(b)(9)](https://www.govinfo.gov/link/uscode/26/6323) and [§ 70.231(i) of this part](/current/title-27/part-70/section-70.231#p-70.231\(i\)).
(2) For provisions relating to the issuance of a certificate of discharge of a life insurance or endowment contract subject to a tax lien, see [26 U.S.C. 6325(b)](https://www.govinfo.gov/link/uscode/26/6325) and [§ 70.150(b) of this part](/current/title-27/part-70/section-70.150#p-70.150\(b\)).
([26 U.S.C. 6332](https://www.govinfo.gov/link/uscode/26/6332))
\[T.D. ATF-6, [38 FR 32445](https://www.federalregister.gov/citation/38-FR-32445), Nov. 26, 1973, as amended by T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
#### § 70.165 Production of books.
If a levy has been made or is about to be made on any property or rights to property, any person, having custody or control of any books or records containing evidence or statements relating to the property or rights to property subject to levy, shall, upon demand of the appropriate TTB officer who has made or is about to make the levy, exhibit such books or records to such officer.
([26 U.S.C. 6333](https://www.govinfo.gov/link/uscode/26/6333))
#### § 70.167 Authority to release levy and return property.
(a) *Release of levy* —
(1) *Authority.* An appropriate TTB officer may release the levy upon all or part of the property or rights to property levied upon as provided in [paragraphs (a)(2)](/current/title-27/section-70.167#p-70.167\(a\)\(2\)), [(3)](/current/title-27/section-70.167#p-70.167\(a\)\(3\)) and [(4)](/current/title-27/section-70.167#p-70.167\(a\)\(4\)) of this section. A levy may be released under [paragraph (a)(3)](/current/title-27/section-70.167#p-70.167\(a\)\(3\)) of this section only if the delinquent taxpayer complies with such of the conditions thereunder as an appropriate TTB officer may require and if the appropriate TTB officer determines that such action will facilitate the collection of the liability.
(2) *Conditions for mandatory release.*
(i) An appropriate TTB officer shall release the levy as authorized under [paragraph (a)(1)](/current/title-27/section-70.167#p-70.167\(a\)\(1\)) of this section, if any of the following conditions exist:
(A) The liability for which such levy was made is satisfied or becomes unenforceable by reason of lapse of time,
(B) Release of such levy will facilitate the collection of such liability,
(C) The taxpayer has entered into an agreement under [26 U.S.C. 6159](https://www.govinfo.gov/link/uscode/26/6159) to satisfy such liability by means of installment payments, unless such agreement provides otherwise (an appropriate TTB officer is not required to release the levy in this case if release of such levy would jeopardize the secured creditor status of the United States).
(D) An appropriate TTB officer has determined that such levy is creating an economic hardship due to the financial condition of the taxpayer, or
(E) The fair market value of the property exceeds such liability and release of the levy on a part of such property could be made without hindering the collection of such liability.
(ii) In the case of any tangible personal property essential in carrying on the trade or business of the taxpayer, the appropriate TTB officer shall provide for an expedited determination under paragraph (a)(2)(i) if levy on such tangible personal property would prevent the taxpayer from carrying on such trade or business.
(3) *Conditions for discretionary release.* An appropriate TTB officer may release the levy as authorized under [paragraph (a)(1)](/current/title-27/section-70.167#p-70.167\(a\)\(1\)) of this section, if:
(i) *Escrow arrangement.* The delinquent taxpayer offers a satisfactory arrangement, which is accepted by an appropriate TTB officer, for placing property in escrow to secure the payment of the liability (including the expenses of levy) which is the basis of the levy.
(ii) *Bond.* The delinquent taxpayer delivers an acceptable bond to an appropriate TTB officer conditioned upon the payment of the liability (including the expenses of levy) which is the basis of the levy. Such bond shall be in the form provided in [26 U.S.C. 7101](https://www.govinfo.gov/link/uscode/26/7101) and [§ 70.281 of this part](/current/title-27/part-70/section-70.281).
(iii) *Payment of amount of U.S. interest in the property.* There is paid to an appropriate TTB officer an amount determined by TTB to be equal to the interest of the United States in the seized property or the part of the seized property to be released.
(iv) *Assignment of salaries and wages.* The delinquent taxpayer executes an agreement directing the taxpayer's employer to pay to an appropriate TTB officer amounts deducted from the employee's wages on a regular, continuing, or periodic basis, in such manner and in such amount as is agreed upon with an appropriate TTB officer, until the full amount of the liability is satisfied, and such agreement is accepted by the employer.
(v) *Extension of statute of limitations.* The delinquent taxpayer executes an agreement to extend the statute of limitations in accordance with [26 U.S.C. 6502(a)(2)](https://www.govinfo.gov/link/uscode/26/6502) and [§ 70.224 of this part](/current/title-27/part-70/section-70.224).
(4) Release where value of interest of United States is insufficient to meet expenses of sale. An appropriate TTB officer may release the levy as authorized under [paragraph (a)(1)](/current/title-27/section-70.167#p-70.167\(a\)\(1\)) of this section if that officer determines that the value of the interest of the United States in the seized property, or in the part of the seized property to be released is insufficient to cover the expenses of the sale of such property.
(b) *Return of property* —
(1) *General rule.* If an appropriate TTB officer determines that property has been wrongfully levied upon, the appropriate TTB officer may return:
(i) The specific property levied upon,
(ii) An amount of money equal to the amount of money levied upon (together with interest thereon at the overpayment rate from the date TTB receives the money to a date not more than 30 days before the date of return), or
(iii) An amount of money equal to the amount of money received by the United States from a sale of the property (together with interest thereon at the overpayment rate from the date of the sale of the property to a date not more than 30 days before the date of return).
If the United States is in possession of specific property, the property may be returned at any time. An amount equal to the amount of money levied upon or received from a sale of the property may be returned at any time before the expiration of 9 months from the date of the levy. When a request described in [paragraph (b)(2)](/current/title-27/section-70.167#p-70.167\(b\)\(2\)) of this section is filed for the return of property before the expiration of 9 months from the date of levy, an amount of money may be returned after a reasonable period of time subsequent to the expiration of the 9-month period if necessary for the investigation and processing of such request. In cases where money is specifically identifiable, as in the case of a coin collection which may be worth substantially more than its face value, the money will be treated as specific property and, whenever possible, this specific property will be returned. For purposes of [paragraph (b)(1)(iii)](/current/title-27/section-70.167#p-70.167\(b\)\(1\)\(iii\)) of this section, if property is declared purchased by the United States at a sale pursuant to [26 U.S.C. 6335(e)](https://www.govinfo.gov/link/uscode/26/6335), the United States is treated as having received an amount of money equal to the minimum price determined by the appropriate TTB officer before the sale or, if larger, the amount received by the United States from the resale of the property.
(2) *Request for return of property.* A written request for the return of property wrongfully levied upon shall be addressed to the officer who authorized the levy. The written request shall contain the following information:
(i) The name and address of the person submitting the request,
(ii) A detailed description of the property levied upon,
(iii) A description of the claimant's basis for claiming an interest in the property levied upon, and
(iv) The name and address of the taxpayer, the originating TTB office, and the date of lien or levy as shown on the Notice of Tax Lien, Notice of Levy, or, in lieu thereof, a statement of the reasons why such information cannot be furnished.
(3) *Inadequate request.* A request shall not be considered adequate unless it is a written request containing the information required by [paragraph (b)(2)](/current/title-27/section-70.167#p-70.167\(b\)\(2\)) of this section. However, unless a notification is mailed by the officer who received the request to the claimant within 30 days of receipt of the request to inform the claimant of the inadequacies, any written request shall be considered adequate. If the officer who received the request timely notifies the claimant of the inadequacies of the request, the claimant shall have 30 days from the receipt of the notification of inadequacy to supply in writing any omitted information. Where the omitted information is so supplied within the 30-day period, the request shall be considered to be adequate from the time the original request was made for purposes of determining the applicable period of limitation upon suit under [26 U.S.C. 6532(c)](https://www.govinfo.gov/link/uscode/26/6532).
([26 U.S.C. 6343](https://www.govinfo.gov/link/uscode/26/6343))
\[T.D. ATF-6, [38 FR 32445](https://www.federalregister.gov/citation/38-FR-32445), Nov. 26, 1973, as amended by T.D. ATF-450, [66 FR 29026](https://www.federalregister.gov/citation/66-FR-29026), May 29, 2001]
#### § 70.168 Redemption of property.
(a) *Before sale.* Any person whose property has been levied upon shall have the right to pay the amount due, together with costs and expenses of the proceeding, if any, to the appropriate TTB officer at any time prior to the sale of the property. Upon such payment the appropriate TTB officer shall restore such property to the owner and all further proceedings in connection with the levy on such property shall cease from the time of such payment.
(b) *Redemption of real estate after sale* —
(1) *Period.* The owner of any real estate sold as provided in [26 U.S.C. 6335](https://www.govinfo.gov/link/uscode/26/6335), the owner's heirs, executors, or administrators, or any person having any interest therein, or a lien thereon, or any person in their behalf, shall be permitted to redeem the property sold, or any particular tract of such property, at any time within 180 days after the sale thereof.
(2) *Price.* Such property or tract of property may be redeemed upon payment to the purchaser, or in case the purchaser cannot be found in the county in which the property to be redeemed is situated, then to the appropriate TTB officer, for the use of the purchaser, the purchaser's heirs, or assigns, the amount paid by such purchaser and interest thereon at the rate of 20 percent per annum. In case real and personal property (or several tracts of real property) are purchased in the aggregate, the redemption price of the real property (or of each of the several tracts) shall be determined on the basis of the ratio, as of the time of sale, of the value of the real property (or tract) to the value of the total property purchased. For this purpose the minimum price or the highest bid price, whichever is higher, offered for the property separately or in groups shall be treated as the value.
(c) *Record.* When any real property is redeemed, the appropriate TTB officer must cause entry of the fact to be made upon the record of sale kept in accordance with [26 U.S.C. 6340](https://www.govinfo.gov/link/uscode/26/6340) and [§ 70.187 of this part](/current/title-27/part-70/section-70.187), and such entry is evidence of such redemption. The party who redeems the property must notify the appropriate TTB officer of the date of such redemption and of the transfer of the certificate of sale, the amount of the redemption price, and the name of the party to whom such redemption price was paid.
([26 U.S.C. 6337](https://www.govinfo.gov/link/uscode/26/6337))
\[T.D. ATF-6, [38 FR 32445](https://www.federalregister.gov/citation/38-FR-32445), Nov. 26, 1973, as amended by T.D. ATF-450, [66 FR 29026](https://www.federalregister.gov/citation/66-FR-29026), May 29, 2001]
#### § 70.169 Expense of levy and sale.
The appropriate TTB officer shall determine the expenses to be allowed in all cases of levy and sale. Such expenses shall include the expenses of protection and preservation of the property during the period subsequent to the levy, as well as the actual expenses incurred in connection with the sale thereof. In case real and personal property (or several tracts of real property) are sold in the aggregate, the appropriate TTB officer shall properly apportion the expenses to the real property (or to each tract).
([26 U.S.C. 6341](https://www.govinfo.gov/link/uscode/26/6341))
#### § 70.170 Application of proceeds of levy.
(a) *Collection of liability.* Any money realized by proceedings under [26 U.S.C. 6331](https://www.govinfo.gov/link/uscode/26/6331) through [6344](https://www.govinfo.gov/link/uscode/26/6344), or by sale of property redeemed by the United States (if the interest of the United States in the property was a lien arising under the provisions of 26 U.S.C. enforced and administered by the Bureau), is applied in the manner specified in [paragraphs (a)(1)](/current/title-27/section-70.170#p-70.170\(a\)\(1\)), [(2)](/current/title-27/section-70.170#p-70.170\(a\)\(2\)), and [(3)](/current/title-27/section-70.170#p-70.170\(a\)\(3\)) of this section. Money realized by proceedings under [26 U.S.C. 6331](https://www.govinfo.gov/link/uscode/26/6331) through [6344](https://www.govinfo.gov/link/uscode/26/6344), includes money realized by seizure, by sale of seized property, or by surrender under [26 U.S.C. 6332](https://www.govinfo.gov/link/uscode/26/6332) except money realized by the imposition of a 50 percent penalty pursuant to [26 U.S.C. 6332(d)(2)](https://www.govinfo.gov/link/uscode/26/6332)).
(1) *Expense of levy and sale.* First, against the expenses of the proceedings or sale, including expenses allowable under [26 U.S.C. 6341](https://www.govinfo.gov/link/uscode/26/6341) and amounts paid by the United States to redeem property.
(2) *Specific tax liability on seized property.* If the property seized and sold is subject to a tax imposed by any provision of 26 U.S.C. which has not been paid, the amount remaining after applying [paragraph (a)(1)](/current/title-27/section-70.170#p-70.170\(a\)\(1\)) of this section, shall then be applied against such tax liability (and, if such tax was not previously assessed, it shall then be assessed):
(3) *Liability of delinquent taxpayer.* The amount, if any, remaining after applying [paragraphs (a)(1)](/current/title-27/section-70.170#p-70.170\(a\)\(1\)) and [(2)](/current/title-27/section-70.170#p-70.170\(a\)\(2\)) of this section, shall then be applied against the liability in respect of which the levy was made or the sale of redeemed property was conducted.
(b) *Surplus proceeds.* Any surplus proceeds remaining after the application of [paragraph (a)](/current/title-27/section-70.170#p-70.170\(a\)) of this section shall, upon application and satisfactory proof in support thereof, be credited or refunded by the appropriate TTB officer to the person or persons legally entitled thereto. The delinquent taxpayer is the person entitled to the surplus proceeds unless another person establishes a superior claim thereto.
([26 U.S.C. 6342](https://www.govinfo.gov/link/uscode/26/6342))
### Disposition of Property
#### Source:
Sections 70.181 through 70.188 added by T.D. ATF-301, [55 FR 47627](https://www.federalregister.gov/citation/55-FR-47627), Nov. 14, 1990, unless otherwise noted.
#### § 70.181 Disposition of seized property.
(a) *Notice of seizure.* As soon as practicable after seizure of property, the appropriate TTB officer seizing the property shall give notice in writing to the owner of the property (or, in the case of personal property, to the possessor thereof). The written notice shall be delivered to the owner (or to the possessor, in the case of personal property) or left at the owner's usual place of abode or business, if located within the TTB region where the seizure is made. If the owner cannot be readily located, or has no dwelling or place of business within such region, the notice may be mailed to the owner's last known address. Such notice shall specify the sum demanded and shall contain, in the case of personal property, a list sufficient to identify the property seized and, in the case of real property, a description with reasonable certainty of the property seized.
(b) *Notice of sale.*
(1) As soon as practicable after seizure of the property, the appropriate TTB officer shall give notice of sale in writing to the owner. Such notice shall be delivered to the owner or left at the owner's usual place of abode or business if located. If the owner cannot be readily located, or has no dwelling or place of business, the notice may be mailed to the owner's last known address. The notice shall specify the property to be sold, and the time, place, manner, and conditions of the sale thereof, and shall expressly state that only the right, title, and interest of the delinquent taxpayer in and to such property is to be offered for sale. The notice shall also be published in some newspaper published in the county wherein the seizure is made or in a newspaper generally circulated in that county. For example, if a newspaper of general circulation in a county but not published in that county will reach more potential bidders for the property to be sold than a newspaper published within the county, or if there is a newspaper of general circulation within the county but no newspaper published within the county, the appropriate TTB officer may cause public notice of the sale to be given in the newspaper of general circulation within the county. If there is no newspaper published or generally circulated in the county, the notice shall be posted at the post office nearest the place where the seizure is made, and in not less than two other public places.
(2) The appropriate TTB officer may use other methods of giving notice of sale and of advertising seized property in addition to those referred to in [paragraph (b)(1)](/current/title-27/section-70.181#p-70.181\(b\)\(1\)) of this section, when the appropriate TTB officer believes that the nature of the property to be sold is such that a wider or more specialized advertising coverage will enhance the possibility of obtaining a higher price for the property.
(3) Whenever levy is made without regard to the 10-day period provided in [26 U.S.C. 6331(a)](https://www.govinfo.gov/link/uscode/26/6331) (relating to cases in which collection is in jeopardy), a public notice of sale of the property seized shall not be made within such 10-day period unless [26 U.S.C. 6336](https://www.govinfo.gov/link/uscode/26/6336) (relating to perishable goods) is applicable.
(c) *Time, place, manner, and conditions of sale.* The time, place, manner, and conditions of sale of property seized by levy shall be as follows:
(1) *Time and place of sale* —
(i) *In general.* The time of sale shall not be less than 10 days nor more than 40 days from the time of giving public notice under [26 U.S.C. 6335(b)](https://www.govinfo.gov/link/uscode/26/6335) (see [paragraph (b)](/current/title-27/section-70.181#p-70.181\(b\)) of this section). The place of sale shall be within the county in which the property is seized, except that if it appears to the appropriate TTB officer under whose supervision the seizure was made that substantially higher bids may be obtained for the property if the sale is held at a place outside such county, the appropriate TTB officer may order that the sale be held in such other place. The sale shall be held at the time and place stated in the notice of sale.
(ii) *Right to request sale of seized property within 60 days.* The owner of any property seized by levy may request that the appropriate TTB officer sell such property within 60 days after such request (or within such longer period as may be specified by the owner). The appropriate TTB officer shall comply with such request unless it is determined (and the owner is notified within such period) that such compliance would not be in the best interests of the United States.
(2) *Adjournment of sale.* When it appears to the appropriate TTB officer that an adjournment of the sale will best serve the interest of the United States or that of the taxpayer, the appropriate TTB officer may adjourn the sale from time to time, but the date of the sale shall not be later than one month after the date fixed in the original notice of sale.
(3) *Minimum price.*
(i) Before the sale of property seized by levy, the appropriate TTB officer shall determine:
(A) A minimum price, taking into account the expenses of levy and sale, for which the property shall be sold, and
(B) Whether the purchase of such property by the United States at such minimum price would be in the best interest of the United States.
If, at the sale, one or more persons offer to purchase such property for not less than the amount of the minimum price, the property shall be declared to be sold to the highest bidder. If no person offers for such property at the sale the amount of the minimum price and the appropriate TTB officer has determined that the purchase of such property by the United States would be in the best interest of the United States, the property shall be declared to be sold to the United States at such minimum price. If, at the sale, the property is not declared sold to the highest bidder or the United States, the property shall be released to the owner thereof and the expense of the levy and sale shall be added to the amount of tax for the collection of which the levy was made. Any property released to the owner under these circumstances shall remain subject to any lien imposed by [26 U.S.C. chapter 64](https://www.govinfo.gov/link/uscode/26/6401), subchapter C.
(ii) The appropriate TTB officer conducting the sale shall either announce the minimum price before the sale begins or defer announcement of the minimum price until after the receipt of the highest bid, and, if the highest bid is greater than the minimum price, no announcement of the minimum price shall be made.
(4) *Offering of property* —
(i) *Sale of indivisible property.* If any property levied upon is not divisible, so as to enable the appropriate TTB officer by sale of a part thereof to raise the whole amount of the tax and expenses of levy and sale, the whole of such property shall be sold. For application of surplus proceeds of sale, see [26 U.S.C. 6342(b)](https://www.govinfo.gov/link/uscode/26/6342).
(ii) *Separately, in groups, or in the aggregate.* The seized property may be offered for sale:
(A) As separate items, or
(B) As groups of items, or
(C) In the aggregate, or
(D) Both as separate items (or in groups) and in the aggregate. In such cases, the property shall be sold under the method which produces the highest aggregate amount.
The appropriate TTB officer shall select whichever of the foregoing methods of offering the property for sale as is most feasible under all the facts and circumstances of the case, except that if the property to be sold includes both real and personal property, only the personal property may be grouped for the purpose of offering such property for sale. However, real and personal property may be offered for sale in the aggregate, provided the real property, as separate items, and the personal as a group, or as groups, or as separate items, are first offered separately.
(iii) *Condition of title and of property.* Only the right, title, and interest of the delinquent taxpayer in and to the property seized shall be offered for sale, and such interest shall be offered subject to any prior outstanding mortgages, encumbrances, or other liens in favor of third parties which are valid as against the delinquent taxpayer and are superior to the lien of the United States. All seized property shall be offered for sale “as is” and “where is” and without recourse against the United States. No guaranty or warranty, express or implied, shall be made by the appropriate TTB officer offering the property for sale, as to the validity of the title, quality, quantity, weight, size, or condition of any of the property, or its fitness for any use or purpose. No claim shall be considered for allowance or adjustment or for rescission of the sale based upon failure of the property to conform with any representation, express or implied.
(iv) *Terms of payment.* The property shall be offered for sale upon whichever of the following terms is fixed by the appropriate TTB officer in the public notice of sale:
(A) Payment in full upon acceptance of the highest bid, without regard to the amount of such bid, or
(B) If the aggregate price of all property purchased by a successful bidder at the sale is more than $200, an initial payment of $200 or 20 percent of the purchase price, whichever is the greater, and payment of the balance (including all costs incurred for the protection or preservation of the property subsequent to the sale and prior to final payment) within a specified period, not to exceed 1 month from the date of the sale.
(5) *Method of sale.* The appropriate TTB officer shall sell the property either:
(i) At public auction, at which open competitive bids shall be received, or
(ii) At public sale under sealed bids. The following rules, in addition to the other rules provided in this paragraph, shall be applicable to public sale under sealed bids:
(A) *Invitation to bidders.* Bids shall be solicited through a public notice of sale.
(B) *Form for use by bidders.* A bid shall be submitted on a form which will be furnished by the appropriate TTB officer upon request. The form shall be completed in accordance with the instructions thereon.
(C) *Remittance with bid.* If the total bid is $200 or less, the full amount of the bid shall be submitted therewith. If the total bid is more than $200, 20 percent of such bid or $200, whichever is greater, shall be submitted therewith. (In the case of alternative bids submitted by the same bidder for items of property offered separately, or groups, or in the aggregate, the bidder shall remit the full amount of the highest alternative bid submitted, if the bid is $200 or less. If the highest alternative bid submitted is more than $200, the bidder shall remit 20 percent of the highest alternative bid or $200, whichever is greater.) Such remittance shall be by a certified, cashier's, or treasurer's check drawn on any bank or trust company incorporated under the laws of the United States or under the laws of any State, Territory, or possession of the United States, or by a U.S. postal, bank, express, or telegraph money order.
(D) *Time for receiving and opening bids.* Each bid shall be submitted in a securely sealed envelope. The bidder shall indicate in the upper left hand corner of the envelope the bidder's name and address and the time and place of sale as announced in the public notice of sale. A bid will not be considered unless it is received by the officer conducting the sale prior to the opening of the bids. The bids will be opened at the time and place stated in the notice or sale, or at the time fixed in the announcement of the adjournment of the sale.
(E) *Consideration of bids.* The public notice of sale shall specify whether the property is to be sold separately, by groups, or in the aggregate or by a combination of these methods, as provided in [paragraph (c)(4)(ii)](/current/title-27/section-70.181#p-70.181\(c\)\(4\)\(ii\)) of this section. If the notice specifies an alternative method, bidders may submit bids under one or more of the alternatives. In case of error in the extension of prices in any bid, the unit price will govern. The officer conducting the sale shall have the right to waive any technical defects in a bid. In the event two or more highest bids are equal in amount, the officer conducting the sale shall determine the successful bidder by drawing lots. After the opening, examination, and consideration of all bids, the officer conducting the sale shall announce the amount of the highest bid or bids and the name of the successful bidder or bidders. Any remittance submitted in connection with an unsuccessful bid shall be returned at the conclusion of the sale.
(F) *Withdrawal of bids.* A bid may be withdrawn on written or telegraphic request received from the bidder prior to the time fixed for opening the bids. A technical defect in a bid confers no right on the bidder for the withdrawal of his bid after it has been opened.
(6) *Payment of bid price.* All payments for property sold under this section shall be made by cash or by a certified, cashier's, or treasurer's check drawn on any bank or trust company incorporated under the laws of the United States, or under the laws of any State, Territory, or possession of the United States, or by a U.S. postal, bank, express, or telegraph money order. If payment in full is required upon acceptance of the highest bid, the payment shall be made at such time. If deferred payment is permitted, the initial payment shall be made upon acceptance of the bid, and the balance shall be paid on or before the date fixed for payment thereof. Any remittance submitted with a successful sealed bid shall be applied toward the purchase price.
(7) *Delivery and removal of personal property.* Responsibility of the United States for the protection or preservation of seized personal property shall cease immediately upon acceptance of the highest bid. The risk of loss is on the purchaser of personal property upon acceptance of his bid. Possession of any personal property shall not be delivered to the purchaser until the purchase price has been paid in full. If payment of part of the purchase price for personal property is deferred, the United States will retain possession of such property as security for the payment of the balance of the purchase price and, as agent for the purchaser, will cause the property to be cared for until the purchase price has been paid in full or the sale is declared null and void for failure to make full payment of the purchase price. In such case, all charges and expenses incurred in caring for the property after the acceptance of the bid shall be borne by the purchaser.
(8) *Default in payment.* If payment in full is required upon acceptance of the bid and is not then and there paid, the officer conducting the sale shall forthwith proceed again to sell the property in the manner provided in [26 U.S.C. 6335(e)](https://www.govinfo.gov/link/uscode/26/6335) and this section. If the conditions of the sale permit part of the payment to be deferred, and if such part is not paid within the prescribed period, suit may be instituted against the purchaser for the purchase price or such part thereof as has not been paid, together with interest at the rate of 6 percent per annum from the date of the sale; or, in the discretion of the appropriate TTB officer, the sale may be declared by the appropriate TTB officer to be null and void for failure to make full payment of the purchase price and the property may again be advertised and sold as provided in [26 U.S.C. 6335(b)](https://www.govinfo.gov/link/uscode/26/6335), (c), and (e) and this section. In the event of such readvertisement and sale, any new purchaser shall receive such property or rights to property free and clear of any claim or right of the former defaulting purchaser, of any nature whatsoever, and the amount paid upon the bid price by such defaulting purchaser shall be forfeited to the United States.
([26 U.S.C. 6335](https://www.govinfo.gov/link/uscode/26/6335))
\[T.D. ATF-301, [55 FR 47627](https://www.federalregister.gov/citation/55-FR-47627), Nov. 14, 1990, as amended by T.D. ATF-450, [66 FR 29025](https://www.federalregister.gov/citation/66-FR-29025), May 29, 2001; T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
#### § 70.182 Disposition of personal property acquired by the United States.
(a) *Sale* —
(1) *In general.* Any personal property (except bonds, notes, checks, and other securities) acquired by the United States in payment of or as security for debts arising under the internal revenue laws may be sold by the appropriate TTB officer who acquired such property for the United States. United States saving bonds shall not be sold by the appropriate TTB officer, but shall be transferred to the appropriate office of the Treasury Department for redemption. Other bonds, notes, checks, and other securities shall be disposed of in accordance with instructions issued by the appropriate TTB officer.
(2) *Time, place, manner and terms of sale.* The time, place, manner and terms of sale of personal property acquired for the United States shall be as follows:
(i) *Time, notice, and place of sale.* The property may be sold at any time after it has been acquired by the United States. A public notice of sale shall be posted at the post office nearest the place of sale and in at least two other public places. The notice shall specify the property to be sold and the time, place, manner, and conditions of sale. In addition, the appropriate TTB officer may use such other methods of advertising as such officer believes will result in obtaining the highest price for the property. Generally, the place of sale will be within the area where the property was originally acquired by the United States. However, if the appropriate TTB officer believes that a substantially higher price may be obtained, the sale may be held outside such area.
(ii) *Rejection of bids and adjournment of sale.* The officer conducting the sale reserves the right to reject any and all bids and withdraw the property from the sale. When it appears to the officer conducting the sale that an adjournment of the sale will best serve the interest of the United States, that officer may order the sale adjourned from time to time. If the sale is adjourned for more than 30 days in the aggregate, public notice of the sale must again be given in accordance with [paragraph (a)(2)(i)](/current/title-27/section-70.182#p-70.182\(a\)\(2\)\(i\)) of this section.
(iii) *Liquidated damages.* The notice shall state whether, in the case of default in payment of the bid price, any amount deposited with the United States will be retained as liquidated damages. In case liquidated damages are provided, the amount thereof shall not exceed \$200.
(3) *Agreement to bid.* The appropriate TTB officer may, before giving notice of sale, solicit offers from prospective bidders and enter into agreements with such persons that they will bid at least a specified amount in case the property is offered for sale. In such cases, the appropriate TTB officer may also require such persons to make deposits to secure the performance of their agreements. Any such deposit, but not more than \$200, shall be retained as liquidated damages in case such person fails to bid the specified amount and the property is not sold for as much as the amount specified in such agreement.
(4) *Terms of payment.* The property shall be offered for sale upon whichever of the following terms is fixed by the appropriate TTB officer in the public notice of sale:
(i) Payment in full upon acceptance of the highest bid, without regard to the amount of such bid, or
(ii) If the aggregate price of all property purchased by a successful bidder at the sale is more than $200, an initial payment of $200 or 20 percent of the purchase price, whichever is the greater, and payment of the balance (including all costs incurred for the protection or preservation of the property subsequent to the sale and prior to final payment) within a specified period, not to exceed one month from the date of the sale.
(5) *Method of sale.* The property may be sold either:
(i) At public auction, at which open competitive bids shall be received, or
(ii) At public sale under sealed bids.
(6) *Sales under sealed bids.* The following rules, in addition to the other rules provided in this paragraph, shall be applicable to public sales under sealed bids.
(i) *Invitation to bidders.* Bids shall be solicited through a public notice of sale.
(ii) *Form for use by bidders.* A bid shall be submitted on a form which will be furnished by the appropriate TTB officer upon request. The form shall be completed in accordance with the instructions thereon.
(iii) *Remittance with bid.* If the total bid is $200 or less, the full amount of the bid shall be submitted therewith. If the total bid is more than $200, 20 percent of such bid or \$200, whichever is greater, shall be submitted therewith. Such remittance shall be by a certified, cashier's, or treasurer's check drawn on any bank or trust company incorporated under the laws of the United States or under the laws of any State, Territory, or possession of the United States, or by a U.S. postal, bank, express, or telegraph money order.
(iv) *Time for receiving and opening bids.* Each bid shall be submitted in a securely sealed envelope. The bidder shall indicate in the upper left hand corner of the envelope the bidder's name and address and the time and place of sale as announced in the public notice of sale. A bid will not be considered unless it is received by the officer conducting the sale prior to the opening of the bids. The bids will be opened at the time and place stated in the notice of sale, or at the time fixed in the announcement of the adjournment of the sale.
(v) *Consideration of bids.* The officer conducting the sale shall have the right to waive any technical defects in a bid. After the opening, examination, and consideration of all bids, the officer conducting the sale shall announce the amount of the highest bid or bids and the name of the successful bidder or bidders, unless in the opinion of the officer a higher price can be obtained for the property than has been bid. In the event the highest bids are equal in amount (and unless in the opinion of the officer conducting the sale a higher price can be obtained for the property than has been bid), the officer shall determine the successful bidder by drawing lots. Any remittance submitted in connection with an unsuccessful bid shall be returned to the bidder at the conclusion of the sale.
(vi) *Withdrawal of bids.* A bid may be withdrawn on written or telegraphic request received from the bidder prior to the time fixed for opening the bids. A technical defect in a bid confers no right on the bidder for the withdrawal of the bid after it has been opened.
(7) *Payment of bid price.* All payments for property sold pursuant to this section shall be made by cash or by a certified, cashier's or treasurer's check drawn on any bank or trust company incorporated under the laws of the United States or under the laws of any State, Territory, or possession of the United States, or by a U.S. postal, bank, express, or telegraph money order. If payment in full is required upon acceptance of the highest bid, the payment shall be made at such time. If payment in full is not made at such time, the officer conducting the sale may forthwith proceed again to sell the property in the manner provided in [paragraph (a)(5)](/current/title-27/section-70.182#p-70.182\(a\)\(5\)) of this section. If deferred payment is permitted, the initial payment shall be made upon acceptance of the bid, and the balance shall be paid on or before the date fixed for payment thereof. Any remittance submitted with a successful sealed bid shall be applied toward the purchase price.
(8) *Delivery and removal of personal property.* The risk of loss is on the purchaser of the property upon acceptance of the purchaser's bid. Possession of any property shall not be delivered to the purchaser until the purchase price has been paid in full. If payment of part of the purchase price for the property is deferred, the United States will retain possession of such property as security for the payment of the balance of the purchase price and, as agent for the purchaser, will cause the property to be cared for until the purchase price has been paid is full or the sale in declared null and void for failure to make full payment of the purchase price. In such case, all charges and expenses incurred in caring for the property after acceptance of the bid shall be borne by the purchaser.
(9) *Certificate of sale.* The officer conducting the sale shall issue a certificate of sale to the purchaser upon payment in full of the purchase price.
(b) *Accounting.* In case of the resale of such property, the proceeds of the sale shall be paid into the Treasury as internal revenue collections and there shall be rendered by the appropriate TTB officer a distinct account of all charges incurred in such sale. For additional accounting rules, see [26 U.S.C. 7809](https://www.govinfo.gov/link/uscode/26/7809).
([26 U.S.C. 7505](https://www.govinfo.gov/link/uscode/26/7505))
\[T.D. ATF-301, [55 FR 47627](https://www.federalregister.gov/citation/55-FR-47627), Nov. 14, 1990, as amended by T.D. ATF-450, [66 FR 29027](https://www.federalregister.gov/citation/66-FR-29027), May 29, 2001]
#### § 70.183 Administration and disposition of real estate acquired by the United States.
(a) *Persons charged with.* The appropriate TTB officer shall have charge of all real estate which has been or shall be assigned, set off, or otherwise conveyed by purchase or otherwise to the United States in payment of debts or penalties arising under provisions of 26 U.S.C. enforced and administered by the Bureau or which has been or shall be vested in the United States by mortgage, or other security for payment of such debts, or which has been redeemed by the United States, or which has been or shall be acquired by the United States for payment of or as security for debts arising under provisions of 26 U.S.C. enforced and administered by the Bureau, and of all trusts created for the use of the United States in payment of such debts due the United States.
(b) *Sale.* The appropriate TTB officer may sell any real estate owned or held by the United States as aforesaid, subject to the following rules:
(1) *Property purchased at sale under levy.* If the property was acquired as a result of being declared purchased for the United States at a sale under [26 U.S.C. 6335](https://www.govinfo.gov/link/uscode/26/6335), relating to sale of seized property, the property shall not be sold until after the expiration of 180 days after such sale under levy.
(2) *Notice of sale.* A notice of sale shall be published in some newspaper published or generally circulated within the county where the property is situated, or a notice shall be posted at the post office nearest the place where the property is situated and in at least two other public places. The notice shall specify the property to be sold and the time, place, manner and conditions of sale. In addition, the appropriate TTB officer may use other methods of advertising and of giving notice of the sale if the appropriate TTB officer believes such methods will enhance the possibility of obtaining a higher price for the property.
(3) *Time and place of sale.* The time of the sale shall be not less than 20 days from the date of giving public notice of sale under [paragraph (b)(2)](/current/title-27/section-70.183#p-70.183\(b\)\(2\)) of this section. The place of sale shall be within the county where the property is situated. However, if the appropriate TTB officer believes a substantially better price may be obtained, the sale may be held outside such county.
(4) *Rejection of bids and adjournment of sale.* The officer conducting the sale reserves the right to reject any and all bids and withdraw the property from the sale. When it appears to the officer conducting the sale that an adjournment of the sale will best serve the interest of the United States, that officer may order the sale adjourned from time to time. If the sale is adjourned for more than 30 days in the aggregate, public notice of the sale must be given again in accordance with [paragraph (b)(2)](/current/title-27/section-70.183#p-70.183\(b\)\(2\)) of this section.
(5) *Liquidated damages.* The notice shall state whether, in the case of default in payment of the bid price, any amount deposited with the United States will be retained as liquidated damages. In case liquidated damages are provided, the amount thereof shall not exceed \$200.
(6) *Agreement to bid.* The appropriate TTB officer may, before giving notice of sale, solicit offers from prospective bidders and enter into agreements with such persons that they will bid at least a specified amount in case the property is offered for sale. In such cases, the appropriate TTB officer may also require such persons to make deposits to secure the performance of their agreements. Any such deposit, but not more than \$200, shall be retained as liquidated damages in case such person fails to bid the specified amount and the property is not sold for as much as the amount specified in such agreement.
(7) *Terms.* The property shall be offered for sale upon whichever of the following terms is fixed by the appropriate TTB officer in the public notice of sale:
(i) Payments in full upon acceptance of the highest bid, or
(ii) If the price of the property purchased by a successful bidder at the sale is more than $200, an initial payment of $200 or 20 percent of the purchase price, whichever is the greater, and payment of the balance within a specified period, not to exceed one month from the date of the sale.
(8) *Method of sale.* The property may be sold either:
(i) At public auction, at which open competitive bids shall be received, or
(ii) At public sale under sealed bids.
(9) *Sales under sealed bids.* The following rules, in addition to the other rules provided in this [paragraph (b)](/current/title-27/section-70.183#p-70.183\(b\)), shall be applicable to public sales under sealed bids.
(i) *Invitation to bidders.* Bids shall be solicited through a public notice of sale.
(ii) *Form for use by bidders.* A bid shall be submitted on a form which will be furnished by the appropriate TTB officer upon request. The form shall be completed in accordance with the instructions thereon.
(iii) *Remittance with bid.* If the total bid is $200 or less, the full amount of the bid shall be submitted therewith. If the total bid is more than $200, 20 percent of such bid or \$200, whichever is greater, shall be submitted therewith. Such remittance shall be by a certified, cashier's, or treasurer's check drawn on any bank or trust company incorporated under the laws of the United States or under the laws of any State, Territory, or possession of the United States, or by a U.S. postal, bank, express, or telegraph money order.
(iv) *Time for receiving and opening bids.* Each bid shall be submitted in a securely sealed envelope. The bidder shall indicate in the upper left hand corner of the envelope the bidder's name and address and the time and place of sale as announced in the public notice of sale. A bid shall not be considered unless it is received by the officer conducting the sale prior to the opening of the bids. The bids will be opened at the time and place stated in the notice of sale, or at the time fixed in the announcement of the adjournment of the sale.
(v) *Consideration of bids.* The officer conducting the sale shall have the right to waive any technical defects in a bid. After the opening, examination, and consideration of all bids, the officer conducting the sale shall announce the amount of the highest bid or bids and the name of the successful bidder or bidders, unless in the opinion of the officer a higher price can be obtained for the property than has been bid. In the event the highest bids are equal in amount (and unless in the opinion of the officer conducting the sale a higher price can be obtained for the property than has been bid), the officer shall determine the successful bidder by drawing lots. Any remittance submitted in connection with an unsuccessful bid shall be returned to the bidder at the conclusion of the sale.
(vi) *Withdrawal of bid.* A bid may be withdrawn on written or telegraphic request received from the bidder prior to the time fixed for opening the bids. A technical defect in a bid confers no right on the bidder for the withdrawal of the bid after it has been opened.
(10) *Payment of bid price.* All payments for property sold pursuant to this section shall be made by cash or by a certified cashier's or treasurer's check drawn on any bank or trust company incorporated under the laws of the United States or under the laws of any State, Territory, or possession of the United States, or by a U.S. postal, bank, express, or telegraph money order. If payment in full is required upon acceptance of the highest bid, the payment shall be made at such time. If payment in full is not made at such time, the officer conducting the sale may forthwith proceed again to sell the property in the manner provided in [paragraph (b)(8)](/current/title-27/section-70.183#p-70.183\(b\)\(8\)) of this section. If deferred payment is permitted, the initial payment shall be made upon acceptance of the bid, and the balance shall be paid on or before the date fixed for payment thereof. Any remittance submitted with a successful sealed bid shall be applied toward the purchase price.
(11) *Deed.* Upon payment in full of the purchase price, the appropriate TTB officer shall execute a quitclaim deed to the purchaser.
(c) *Lease.* Until real estate is sold, the appropriate TTB officer may lease such property.
(d) *Release to debtor.* In cases where real estate has or may become the property of the United States by conveyance or otherwise, in payment of or as security for a debt arising under the laws relating to internal revenue, and such debt shall have been paid, together with the interest thereon (at the rate of 1 percent per month), to the United States within 2 years from the date of the acquisition of such real estate, the appropriate TTB officer may release by deed or otherwise convey such real estate to the debtor from whom it was taken, or to the debtor's heirs or other legal representatives. If property is declared purchased by the United States under [26 U.S.C. 6335](https://www.govinfo.gov/link/uscode/26/6335), then, for the purpose of this paragraph, the date of such declaration shall be deemed to be the date of acquisition of such real estate.
(e) *Accounting.* The appropriate TTB officer shall, in accordance with [26 U.S.C. 7809](https://www.govinfo.gov/link/uscode/26/7809), account for the proceeds of all sales or leases of the property and all expenses connected with the maintenance, sale, or lease of the property.
(f) *Authority of appropriate TTB officer.* Notwithstanding the other paragraphs of this section, the appropriate TTB officer may, when such officer deems it advisable, take charge of, and assume responsibility for, any real estate to which this section is applicable. In such case, such officer will notify in writing the appropriate TTB officer from whom he or she is taking charge and assuming responsibility. Also, in any case where a single parcel of real estate is situated in an area in which more than one officer has jurisdiction, the appropriate TTB officer may designate in writing one officer who is to be in charge of, and responsible for, the entire property.
([26 U.S.C. 7506](https://www.govinfo.gov/link/uscode/26/7506))
\[T.D. ATF-301, [55 FR 47627](https://www.federalregister.gov/citation/55-FR-47627), Nov. 14, 1990, as amended by T.D. ATF-450, [66 FR 29027](https://www.federalregister.gov/citation/66-FR-29027), May 29, 2001; T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
#### § 70.184 Disposition of perishable goods.
(a) *Appraisal of certain seized property.* If the appropriate TTB officer determines that any property seized by levy is liable to perish or become greatly reduced in price or value by keeping, or that such property cannot be kept without great expense, the appropriate TTB officer shall appraise the value of such property and return it to the owner if the owner complies with the conditions prescribed in [paragraph (b)](/current/title-27/section-70.184#p-70.184\(b\)) of this section or, if the owner does not comply with such conditions, dispose of the property in accordance with [paragraph (c)](/current/title-27/section-70.184#p-70.184\(c\)) of this section.
(b) *Return to owner.* If the owner of the property can be readily found, the appropriate TTB officer shall give the owner written notice of the appropriate TTB officer's determination of the appraised value of the property. However, if the appropriate TTB officer determines that the circumstances require immediate action, the appropriate TTB officer may give the owner an oral notice of the determination of the appraised value of the property, which notice shall be confirmed in writing prior to sale. The property shall be returned to the owner if, within the time specified in the notice, the owner:
(1) Pays to the appropriate TTB officer an amount equal to the appraised value, or
(2) Gives an acceptable bond as prescribed by [26 U.S.C. 7101](https://www.govinfo.gov/link/uscode/26/7101) and [§ 70.281 of this part](/current/title-27/part-70/section-70.281). Such bond shall be in an amount not less than the appraised value of the property and shall be conditioned upon the payment of such amount at such time as the appropriate TTB officer determines to be appropriate in the circumstances.
(c) *Immediate sale.* If the owner does not pay the amount of the appraised value of the seized property within the time specified in the notice, or furnish bond as provided in [paragraph (b)](/current/title-27/section-70.184#p-70.184\(b\)) of this section within such time, the appropriate TTB officer shall as soon as practicable make public sale of the property in accordance with the following terms and conditions:
(1) *Notice of sale.* If the owner can readily be found, a notice shall be given to the owner. A notice of sale also shall be posted in two public places in the county which the property is to be sold. The notice shall specify the time and place of sale, the property to be sold, and the manner and conditions of sale. The appropriate TTB officer may give such other notice and in such other manner as the appropriate TTB officer deems advisable under the circumstances.
(2) *Sale.* The property shall be sold at public auction to the higher bidder.
(3) *Terms.* The purchase price shall be paid in full upon acceptance of the highest bid. The payment shall be made by cash, or by a certified, cashier's or treasurer's check drawn on any bank or trust company incorporated under the laws of the United States or under the laws of any State, Territory, or possession of the United States, or by a U.S. postal, bank, express, or telegraph money order.
([26 U.S.C. 6336](https://www.govinfo.gov/link/uscode/26/6336))
#### § 70.185 Certificate of sale; deed of real property.
(a) *Certificate of sale.* In the case of property sold as provided in [26 U.S.C. 6335](https://www.govinfo.gov/link/uscode/26/6335) (relating to sale of seized property), the appropriate TTB officer shall give to the purchaser a certificate of sale upon payment in full of the purchase price. A certificate of sale of real property shall set forth the real property purchased, for whose taxes the same was sold, the name of the purchaser, and the price paid therefor.
(b) *Deed to real property.* In case of any real property sold as provided in [26 U.S.C. 6335](https://www.govinfo.gov/link/uscode/26/6335) and not redeemed in the manner and within the time prescribed in [26 U.S.C. 6337](https://www.govinfo.gov/link/uscode/26/6337), the appropriate TTB officer shall execute (in accordance with the laws of the State in which the real property is situated pertaining to sales of real property under execution) to the purchaser of such real property at the sale or his assigns, upon surrender of the certificate of sale, a deed of the real property so purchased, reciting the facts set forth in the certificate.
(c) *Deed to real property purchased by the United States.* If real property is declared purchased by the United States at a sale pursuant to [26 U.S.C. 6335](https://www.govinfo.gov/link/uscode/26/6335), the appropriate TTB officer shall at the proper time execute a deed therefor and shall, without delay, cause the deed to be duly recorded in the proper registry of deeds.
([26 U.S.C. 6338](https://www.govinfo.gov/link/uscode/26/6338))
\[T.D. ATF-6, [38 FR 32445](https://www.federalregister.gov/citation/38-FR-32445), Nov. 26, 1973, as amended by T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
#### § 70.186 Legal effect of certificate of sale of personal property and deed of real property.
(a) *Certificate of sale of property other than real property.* In all cases of sale pursuant to [26 U.S.C. 6335](https://www.govinfo.gov/link/uscode/26/6335) of property (other than real property), the certificate of such sale:
(1) *As evidence.* Shall be prima facie evidence of the right of the officer to make such sale, and conclusive evidence of the regularity of the officer's proceedings in making the sale; and
(2) *As conveyance.* Shall transfer to the purchaser all right, title, and interest of the party delinquent in and to the property sold; and
(3) *As authority for transfer of corporate stock.* If such property consists of corporate stocks, shall be notice, when received, to any corporation, company, or association of such transfer, and shall be authority to such corporation, company, or association to record the transfer on its books and records in the same manner as if the stocks were transferred or assigned by the party holding the stock certificate, in lieu of any original or prior certificate, which shall be void, whether canceled or not; and
(4) *As receipts.* If the subject of sale is securities or other evidence of debt, shall be a good and valid receipt to the person holding the certificate of sale as against any person holding or claiming to hold possession of such securities or other evidences of debt; and
(5) *As authority for transfer of title to motor vehicle.* If such property consists of a motor vehicle, shall be notice, when received, to any public officer charged with the registration of title to motor vehicles, of such transfer and shall be authority to such officer to record the transfer on his books and records in the same manner as if the certificate of title to such motor vehicle were transferred or assigned by the party holding the certificate of title, in lieu of any original or prior certificate, which shall be null and void, whether canceled or not.
(b) *Deed to real property.* In the case of the sale of real property pursuant to [26 U.S.C. 6335](https://www.govinfo.gov/link/uscode/26/6335):
(1) *Deed as evidence.* The deed of sale given pursuant to [26 U.S.C. 6338](https://www.govinfo.gov/link/uscode/26/6338) shall be prima facie evidence of the facts therein stated; and
(2) *Deed as conveyance of title.* If the proceedings of the appropriate TTB officer as set forth have been substantially in accordance with the provisions of law, such deed shall be considered and operate as a conveyance of all the right, title, and interest the party delinquent had in and to the real property thus sold at the time the lien of the United States attached thereto.
(c) *Effect of junior encumbrances.* A certificate of sale of personal property given or a deed to real property executed pursuant to [26 U.S.C. 6338](https://www.govinfo.gov/link/uscode/26/6338) discharges the property from all liens, encumbrances, and titles over which the lien of the United States, with respect to which the levy was made, has priority. For example, a mortgage on real property executed after a notice of a Federal tax lien has been filed is extinguished when the appropriate TTB officer executes a deed to the real property to a purchaser thereof at a sale pursuant to [26 U.S.C. 6335](https://www.govinfo.gov/link/uscode/26/6335) following the seizure of the property by the United States. The proceeds of such a sale are distributed in accordance with priority of the liens, encumbrances, or titles. *See* [26 U.S.C. 6342(b)](https://www.govinfo.gov/link/uscode/26/6342) and [7426(a)(2)](https://www.govinfo.gov/link/uscode/26/7426) and [§§ 70.170](/current/title-27/part-70/section-70.170) and [70.207(a)(2) of this part](/current/title-27/part-70/section-70.207#p-70.207\(a\)\(2\)) with respect to surplus proceeds.
([26 U.S.C. 6339](https://www.govinfo.gov/link/uscode/26/6339))
\[T.D. ATF-6, [38 FR 32445](https://www.federalregister.gov/citation/38-FR-32445), Nov. 26, 1973, as amended by T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
#### § 70.187 Records of sale.
(a) *Requirement.* Each appropriate TTB officer shall make a record of all sales under [26 U.S.C. 6335](https://www.govinfo.gov/link/uscode/26/6335) of real property situated within his or her jurisdiction and of redemptions of such property. The records shall set forth the tax for which any such sale was made, the dates of seizures and sale, the name of the party assessed and all proceedings in making such sale, the amount of expenses, the names of the purchasers, and the date of the deed. In the case of redemption of the property, the records shall additionally set forth the date of such redemption and of the transfer of the certificate of sale, the amount of the redemption price, and the name of the party to whom such redemption price was paid. The original record shall be retained by the appropriate TTB officer.
(b) *Copy as evidence.* A copy of such record, or any part thereof, certified by the appropriate TTB officer shall be evidence in any court of the truth of the facts therein stated.
([26 U.S.C. 6340](https://www.govinfo.gov/link/uscode/26/6340))
\[T.D. ATF-301, [55 FR 47627](https://www.federalregister.gov/citation/55-FR-47627), Nov. 14, 1990, as amended by T.D. ATF-450, [66 FR 29027](https://www.federalregister.gov/citation/66-FR-29027), May 29, 2001; T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
#### § 70.188 Expense of levy and sale.
The appropriate TTB officer shall determine the expenses to be allowed in all cases of levy and sale. Such expenses shall include the expenses of protection and preservation of the property during the period subsequent to the levy, as well as the actual expenses incurred in connection with the sale thereof. In case real and personal property (or several tracts of real property) are sold in the aggregate, the appropriate TTB officer shall properly apportion the expenses to the real property (or to each tract).
([26 U.S.C. 6341](https://www.govinfo.gov/link/uscode/26/6341))
### Judicial Proceedings
Civil Action by the United States
#### Source:
Sections 70.191 through 70.193 added by T.D. ATF-301, [55 FR 47633](https://www.federalregister.gov/citation/55-FR-47633), Nov. 14, 1990.
#### § 70.191 Authorization.
(a) *In general.* A civil action for the collection or recovery of taxes, or of any fine, penalty, or forfeiture (with respect to the provisions of 26 U.S.C. enforced and administered by the Bureau) will be commenced when the appropriate TTB officer, directs that the action be commenced.
(b) *Property held by banks.* The appropriate TTB officer shall not authorize or sanction any civil action for the collection or recovery of taxes, or of any fine, penalty, or forfeiture, from any deposits held in a foreign office of a bank engaged in the banking business in the United States or a possession of the United States unless the appropriate TTB officer believes:
(1) That the taxpayer is within the jurisdiction of a U.S. court at the time the civil action is authorized or sanctioned and that the bank is in possession of (or obligated with respect to) deposits of the taxpayer in an office of the bank outside the United States or a possession of the United States; or
(2) That the taxpayer is not within the jurisdiction of a U.S. court at the time the civil action is authorized or sanctioned, that the bank is in possession of (or obligated with respect to) deposits of the taxpayer in an office of the bank outside the United States or a possession of the United States, and that such deposits consist, in whole or in part, of funds transferred from the United States or a possession of the United States in order to hinder or delay the collection of a tax imposed by the provisions of 26 U.S.C. enforced and administered by the Bureau.
([26 U.S.C. 7401](https://www.govinfo.gov/link/uscode/26/7401))
\[T.D. ATF-301, [55 FR 47633](https://www.federalregister.gov/citation/55-FR-47633), Nov. 14, 1990, as amended by [66 FR 29027](https://www.federalregister.gov/citation/66-FR-29027), May 29, 2001]
#### § 70.192 Action to enforce lien or to subject property to payment of tax.
(a) *Civil actions.* In any case where there has been a refusal or neglect to pay any tax (with respect to the provisions of 26 U.S.C. enforced and administered by the Bureau) or to discharge any liability in respect thereof, whether or not levy has been made, the Attorney General or designated delegate at the request of the appropriate TTB officer, may direct a civil action to be filed in any court of the United States to enforce the lien of the United States under the Internal Revenue Code with respect to such tax or liability or to subject any property, of whatever nature, of the delinquent, or in which the delinquent has any right, title or interest, to the payment of such tax or liability. In any such proceeding, at the instance of the United States, the court may appoint a receiver to enforce the lien, or, upon certification by the appropriate TTB officer during the pendency of such proceedings that it is in the public interest, may appoint a receiver with all the powers of a receiver in equity.
(b) *Bid by the United States.* If property is sold to satisfy a first lien held by the United States, the United States may bid at the sale a sum which does not exceed the amount of its lien and the expenses of the sale. See also [31 U.S.C. 3715](https://www.govinfo.gov/link/uscode/31/3715).
([26 U.S.C. 7403](https://www.govinfo.gov/link/uscode/26/7403))
\[T.D. ATF-301, [55 FR 47633](https://www.federalregister.gov/citation/55-FR-47633), Nov. 14, 1990, as amended by [66 FR 29027](https://www.federalregister.gov/citation/66-FR-29027), May 29, 2001]
#### § 70.193 Disposition of judgments and moneys recovered.
All judgments and moneys recovered or received for taxes, costs, forfeitures, and penalties (with respect to the provisions of 26 U.S.C. enforced and administered by the Bureau) shall be paid to the Bureau as collections of taxes imposed under the provisions of 26 U.S.C. enforced and administered by the Bureau.
([26 U.S.C. 7406](https://www.govinfo.gov/link/uscode/26/7406))
Proceedings by Taxpayers and Third Parties
#### Source:
Sections 70.202 through 70.213 added by T.D. ATF-301, [55 FR 47634](https://www.federalregister.gov/citation/55-FR-47634), Nov. 14, 1990, unless otherwise noted.
#### § 70.202 Intervention.
If the United States is not a party to a civil action or suit, the United States may intervene in such action or suit to assert any lien arising under provisions of 26 U.S.C. enforced and administered by the Bureau on the property which is the subject of such action or suit. The provisions of [28 U.S.C. 2410](https://www.govinfo.gov/link/uscode/28/2410) (except subsection (b)) and of [28 U.S.C. 1444](https://www.govinfo.gov/link/uscode/28/1444) shall apply in any case in which the United States intervenes as if the United States had originally been named a defendant in such action or suit. If the application of the United States to intervene is denied, the adjudication in such civil action or suit shall have no effect upon such lien.
([26 U.S.C. 7424](https://www.govinfo.gov/link/uscode/26/7424))
#### § 70.203 Discharge of liens; scope and application; judicial proceedings.
(a) *In general.* A tax lien of the United States, or a title derived from the enforcement of a tax lien of the United States, may be discharged or divested under local law only in the manner prescribed in [28 U.S.C. 2410](https://www.govinfo.gov/link/uscode/28/2410) or in the manner prescribed in [26 U.S.C. 7425](https://www.govinfo.gov/link/uscode/26/7425). Title 26 U.S.C. 7425(a) contains provisions relating to the discharge of a lien when the United States is not joined as a party in the judicial proceedings described in subsection (a) of [28 U.S.C. 2410](https://www.govinfo.gov/link/uscode/28/2410). These judicial proceedings are plenary in nature and proceed on formal pleadings. Title 26 U.S.C. 7425(b) contains provisions relating to the discharge of a lien or a title derived from the enforcement of a lien in the event of a nonjudicial sale with respect to the property involved. Title 26 U.S.C. 7425(c) contains special rules relating to the notice of sale requirements contained in [26 U.S.C. 7425(b)](https://www.govinfo.gov/link/uscode/26/7425).
(b) *Judicial proceedings* —
(1) *In general.* Title 26 U.S.C. 7425(a) provides rules, where the United States is not joined as a party, to determine the effect of a judgment in any civil action or suit described in subsection (a) of [28 U.S.C. 2410](https://www.govinfo.gov/link/uscode/28/2410) (relating to joinder of the United States in certain proceedings), or a judicial sale pursuant to such a judgment, with respect to property on which the United States has or claims a lien under the provisions of 26 U.S.C. If the United States is improperly named as a party to a judicial proceeding, the effect is the same as if the United States were not joined.
(2) *Notice of lien filed when the proceeding is commenced.* Where the United States is not properly joined as a party in the court proceeding and a notice of lien has been filed in accordance with [26 U.S.C. 6323(f)](https://www.govinfo.gov/link/uscode/26/6323) or [(g)](https://www.govinfo.gov/link/uscode/26/6323) in the place provided by law for such filing at the time the action or suit is commenced, a judgment or judicial sale pursuant to such a judgment shall be made subject to and without disturbing the lien of the United States.
(3) *Notice of lien not filed when the proceeding is commenced.* Where the United States is not joined as a party in the court proceeding and either a notice of lien has not been filed in accordance with [26 U.S.C. 6323(f)](https://www.govinfo.gov/link/uscode/26/6323) or [(g)](https://www.govinfo.gov/link/uscode/26/6323) in the place provided by law for such filing at the time the action or suit is commenced, or the law makes no provision for that filing, a judgment or judicial sale pursuant to such a judgment shall have the same effect with respect to the discharge or divestment of the lien of the United States as may be provided with respect to these matters by the local law of the place where the property is situated.
(4) *Proceeds of a judicial sale.* If a judicial sale of property pursuant to a judgment in any civil action or suit to which the United States is not a party discharges a lien of the United States arising under the provisions of 26 U.S.C., the United States may claim the proceeds of the sale (exclusive of costs) prior to the time that distribution of the proceeds is ordered. The claim of the United States in such a case is treated as having the same priority with respect to the proceeds as the lien had with respect to the property which was discharged from the lien by the judicial sale.
([26 U.S.C. 7425(a)](https://www.govinfo.gov/link/uscode/26/7425))
\[T.D. ATF-6, [38 FR 32445](https://www.federalregister.gov/citation/38-FR-32445), Nov. 26, 1973, as amended by T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
#### § 70.204 Discharge of liens; nonjudicial sales.
(a) *In general.* Title 26 U.S.C. 7425(b) contains provisions with respect to the effect on the interest of the United States in property in which the United States has or claims a lien, or a title derived from the enforcement of a lien, of a sale made pursuant to:
(1) An instrument creating a lien on the property sold.
(2) A confession of judgment on the obligation secured by an instrument creating a lien on the property sold, or
(3) A statutory lien on the property sold.
For purposes of this section, such a sale is referred to as a “nonjudicial sale.” The term “nonjudicial sale” includes, but is not limited to, the divestment of the taxpayer's interest in property which occurs by operation of law, by public or private sale, by forfeiture, or by termination under provisions contained in a contract for a deed or a conditional sales contract. Under [26 U.S.C. 7425(b)(1)](https://www.govinfo.gov/link/uscode/26/7425), if a notice of lien is filed in accordance with [26 U.S.C. 6323(f)](https://www.govinfo.gov/link/uscode/26/6323) or [(g)](https://www.govinfo.gov/link/uscode/26/6323), or the title derived from the enforcement of a lien is recorded as provided by local law, more than 30 days before the date of sale and the appropriate TTB officer is not given notice of the sale (in the manner prescribed in [§ 70.205 of this part](/current/title-27/part-70/section-70.205)), the sale shall be made subject to and without disturbing the lien or title of the United States. Under [26 U.S.C. 7425(b)(2)(C)](https://www.govinfo.gov/link/uscode/26/7425), in any case in which notice of the sale is given to the appropriate TTB officer not less than 25 days prior to the date of sale (in the manner prescribed in [26 U.S.C. 7425(c)(1)](https://www.govinfo.gov/link/uscode/26/7425)), the sale shall have the same effect with respect to the discharge or divestment of the lien or title as may be provided by local law with respect to other junior liens or other titles derived from the enforcement of junior liens. A nonjudicial sale pursuant to a lien which is junior to a tax lien does not divest the tax lien, even though notice of the nonjudicial sale is given to the appropriate TTB officer. However, under the provisions of [26 U.S.C. 6325(b)](https://www.govinfo.gov/link/uscode/26/6325) and [§ 70.150 of this part](/current/title-27/part-70/section-70.150), designated officers may discharge the property from a tax lien, including a tax lien which is senior to another lien upon the property.
(b) *Date of sale.* In the case of a nonjudicial sale subject to the provisions of [26 U.S.C. 7425(b)](https://www.govinfo.gov/link/uscode/26/7425), in order to compute any period of time determined with reference to the date of sale, the date of sale shall be determined in accordance with the following rules:
(1) In the case of divestment of junior liens on property resulting directly from a public sale, the date of sale is deemed to be the date the public sale is held, regardless of the date under local law on which junior liens on the property are divested or the title to the property is transferred.
(2) In the case of divestment of junior liens on property resulting directly from a private sale, the date of sale is deemed to be the date title to the property is transferred, regardless of the date junior liens on the property are divested under local law, and
(3) In the case of divestment of junior liens on property not resulting directly from a public or private sale, the date of sale is deemed to be the date on which junior liens on the property are divested under local law. For provisions relating to the right of redemption of the United States, see [26 U.S.C. 7425(d)](https://www.govinfo.gov/link/uscode/26/7425) and [§ 70.206 of this part](/current/title-27/part-70/section-70.206).
([26 U.S.C. 7425(b)](https://www.govinfo.gov/link/uscode/26/7425))
#### § 70.205 Discharge of liens; special rules.
(a) *Notice of sale requirements* —
(1) *In general.* Except in the case of the sale of perishable goods described in [paragraph (c)](/current/title-27/section-70.205#p-70.205\(c\)) of this section, a notice (as described in [paragraph (d)](/current/title-27/section-70.205#p-70.205\(d\)) of this section) of a nonjudicial sale shall be given, in writing by registered or certified mail or by personal service, not less than 25 days prior to the date of sale (determined under the provisions of [§ 70.204(b) of this part](/current/title-27/part-70/section-70.204#p-70.204\(b\))), to the appropriate TTB officer. The provisions of [26 U.S.C. 7502](https://www.govinfo.gov/link/uscode/26/7502) (relating to timely mailing treated as timely filing) and 7503 (relating to time for performance of acts where the last day falls on Saturday, Sunday, or legal holiday) apply in the case of notices required to be made under this paragraph.
(2) *Postponement of scheduled sale* —
(i) *Where notice of sale is given.* In the event that notice of a sale is given in accordance with [paragraph (a)(1)](/current/title-27/section-70.205#p-70.205\(a\)\(1\)) of this section, with respect to a scheduled sale which is postponed to a later time or date, the seller of the property is required to give notice of the postponement to the appropriate TTB officer, in the same manner as is required under local law with respect to other secured creditors. For example, assume that in State M local law requires that in the event of a postponement of a scheduled foreclosure sale of real property, an oral announcement of the postponement at the place and time of the scheduled sale constitutes sufficient notice to secured creditors of the postponement. Accordingly, if at the place and time of a scheduled sale in State M an oral announcement of the postponement is made, the Bureau is considered to have notice of the postponement for the purpose of this [paragraph (a)(2)](/current/title-27/section-70.205#p-70.205\(a\)\(2\)).
(ii) *Where notice of sale is not given.* In the event that:
(A) Notice of a nonjudicial sale would not be required under [paragraph (a)(1)](/current/title-27/section-70.205#p-70.205\(a\)\(1\)) of this section, if the sale were held on the originally scheduled date,
(B) Because of a postponement of the scheduled sale, more than 30 days elapse between the originally scheduled date of the sale and the date of the sale, and
(C) A notice of lien with respect to the property to be sold is filed more than 30 days before the date of the sale, notice of the sale is required to be given to the appropriate TTB officer in accordance with the provisions of [paragraph (a)(1)](/current/title-27/section-70.205#p-70.205\(a\)\(1\)) of this section. In any case in which notice of sale is required to be given with respect to a scheduled sale, and notice of the sale is not given, any postponement of the scheduled sale does not affect the rights of the United States under [26 U.S.C. 7425(b)](https://www.govinfo.gov/link/uscode/26/7425).
(b) *Consent to sale* —
(1) *In general.* Notwithstanding the notice of sale provisions of [paragraph (a)](/current/title-27/section-70.205#p-70.205\(a\)) of this section a nonjudicial sale of property shall discharge or divest the property of the lien or title of the United States if the appropriate TTB officer consents to the sale of the property free of the lien or title. Pursuant to [26 U.S.C. 7425(c)(2)](https://www.govinfo.gov/link/uscode/26/7425), where adequate protection is afforded the lien or title of the United States, the appropriate TTB officer may, in that officer's discretion, consent with respect to the sale of property in appropriate cases. Such consent shall be effective only if given in writing and shall be subject to such limitations and conditions as the appropriate TTB officer may require. However, the appropriate TTB officer may not consent to a sale of property under this section after the date of sale, as determined under [§ 70.204(b) of this part](/current/title-27/part-70/section-70.204#p-70.204\(b\)). For provisions relating to releasing a lien or discharging property subject to a tax lien, *see* [26 U.S.C. 6325](https://www.govinfo.gov/link/uscode/26/6325) and [§ 70.150 of this part](/current/title-27/part-70/section-70.150).
(2) *Application for consent.* Any person desiring the appropriate TTB officer's consent to sell property free of a tax lien or a title derived from the enforcement of a tax lien of the United States in the property shall submit to the appropriate TTB officer a written application, in triplicate, declaring that it is made under penalties of perjury, and requesting that such consent be given. The application shall contain the information required in the case of a notice of sale, as set forth in [paragraph (d)(1)](/current/title-27/section-70.205#p-70.205\(d\)\(1\)) of this section, and, in addition, shall contain a statement of the reasons why the consent is desired.
(c) *Sale of perishable goods* —
(1) *In general.* A notice (as described in [paragraph (d)](/current/title-27/section-70.205#p-70.205\(d\)) of this section) of a nonjudicial sale of perishable goods (as defined in [paragraph (c)(2)](/current/title-27/section-70.205#p-70.205\(c\)\(2\)) of this section) shall be given in writing, by registered or certified mail or delivered by personal service, at any time before the sale, to the appropriate TTB officer. If a notice of a nonjudicial sale is timely given in the manner described in this paragraph the nonjudicial sale shall discharge or divest the tax lien, or a title derived from the enforcement of a tax lien, of the United States in the property. The provisions of [26 U.S.C. 7502](https://www.govinfo.gov/link/uscode/26/7502) (relating to timely mailing treated as timely filing) and 7503 (relating to time for performance of acts where the last days falls on Saturday, Sunday, or a legal holiday) apply in the case of notices required to be made under this paragraph. The seller of the perishable goods shall hold the proceeds (exclusive of costs) of the sale as a fund, for not less than 30 days after the date of the sale, subject to the liens and claims of the United States, in the same manner and with the same priority as the liens and claims of the United States had with respect to the property sold. If the seller fails to hold the proceeds of the sale in accordance with the provisions of this paragraph and if the appropriate TTB officer asserts a claim to the proceeds within 30 days after the date of sale, the seller shall be personally liable to the United States for an amount equal to the value of the interest of the United States in the fund. However, even if the proceeds of the sale are not so held by the seller, but all the other provisions of this paragraph are satisfied, the buyer of the property at the sale takes the property free of the liens and claims of the United States. In the event of a postponement of the scheduled sale of perishable goods, the seller is not required to notify the appropriate TTB officer of the postponement. For provisions relating to releasing a lien or discharging property subject to a tax lien, see [26 U.S.C. 6325](https://www.govinfo.gov/link/uscode/26/6325) and [§ 70.150 of this part](/current/title-27/part-70/section-70.150).
(2) *Definition of perishable goods.* For the purpose of this paragraph, the term “perishable goods” means any tangible personal property which, in the reasonable view of the person selling the property, is liable to perish or become greatly reduced in price or value by keeping, or cannot be kept without great expense.
(d) *Forfeiture of land sales contract.* For purposes of [paragraph (a)](/current/title-27/section-70.205#p-70.205\(a\)) of this section, a nonjudicial sale of property includes any forfeiture of a land sales contract.
(e) *Content of notice of sale* —
(1) *In general.* With respect to a notice of sale described in [paragraph (a)](/current/title-27/section-70.205#p-70.205\(a\)) or [(c)](/current/title-27/section-70.205#p-70.205\(c\)) of this section, the notice will be considered adequate if it contains the information described in [paragraph (d)(1) (i)](/current/title-27/section-70.205#p-70.205\(d\)\(1\)\(i\)), [(ii)](/current/title-27/section-70.205#p-70.205\(d\)\(1\)\(ii\)), [(iii)](/current/title-27/section-70.205#p-70.205\(d\)\(1\)\(iii\)), and [(iv)](/current/title-27/section-70.205#p-70.205\(d\)\(1\)\(iv\)) of this section.
(i) The name and address of the person submitting the notice of sale;
(ii) A copy of each Notice of Federal Tax Lien (TTB Form 5651.2) affecting the property to be sold, or the following information as shown on each such Notice of Federal Tax Lien:
(A) The initiating office named thereon,
(B) The name and address of the taxpayer, and
(C) The date and place of filing of the notice;
(iii) With respect to the property to be sold the following information:
(A) A detailed description, including location of the property affected by the notice (in the case of real property, the street address, city, and State and the legal description contained in the title or deed to the property and, if available, a copy of the abstract of title),
(B) The date, time, place, and terms of proposed sale of the property, and
(C) In case of a sale of perishable property described in [paragraph (c)](/current/title-27/section-70.205#p-70.205\(c\)) of this section, a statement of the reasons why the property is believed to be perishable; and
(iv) The approximate amount of the principal obligation, including interest, secured by the lien sought to be enforced and a description of the other expenses (such as legal expenses, selling costs, etc.) which may be charged against the sale proceeds.
(2) *Inadequate notice.* Except as otherwise provided in this subparagraph, a notice of sale described in [paragraph (a)](/current/title-27/section-70.205#p-70.205\(a\)) of this section which does not contain the information described in [paragraph (d)(1)](/current/title-27/section-70.205#p-70.205\(d\)\(1\)) of this section shall be considered inadequate by the appropriate TTB officer. If the appropriate TTB officer determines that the notice is inadequate, that officer will give written notification of the items of information which are inadequate to the person who submitted the notice. A notice of sale which does not contain the name and address of the person submitting such notice shall be considered to be inadequate for all purposes without notification of any specific inadequacy. In any case where a notice of sale, does not contain the information required under [paragraph (d)(1)(ii)](/current/title-27/section-70.205#p-70.205\(d\)\(1\)\(ii\)) of this section with respect to a Notice of Federal Tax Lien, the appropriate TTB officer may give written notification of such omission without specification of any other inadequacy and such notice of sale shall be considered inadequate for all purposes. In the event the appropriate TTB officer gives notification that the notice of sale is inadequate, a notice complying with the provisions of this section (including the requirement that the notice be given not less than 25 days prior to the sale in the case of a notice described in [paragraph (a)](/current/title-27/section-70.205#p-70.205\(a\)) of this section) must be given. However, in accordance with the provisions of [paragraph (b)(1)](/current/title-27/section-70.205#p-70.205\(b\)\(1\)) of this section, in such a case the appropriate TTB officer may, in that officer's discretion, consent to the sale of the property free of the lien or title of the United States even though notice of the sale is given less than 25 days prior to the sale. In any case where the person who submitted a timely notice which indicates the person's name and address does not receive, more than 5 days prior to the date of the sale, written notification from the appropriate TTB officer that the notice is inadequate, the notice shall be considered adequate for purposes of this section.
(3) *Acknowledgment of notice.* If a notice of sale described in [paragraph (a)](/current/title-27/section-70.205#p-70.205\(a\)) or [(c)](/current/title-27/section-70.205#p-70.205\(c\)) of this section is submitted in duplicate to the appropriate TTB officer with a written request that receipt of the notice be acknowledged and returned to the person giving the notice, this request will be honored by the appropriate TTB officer. The acknowledgment by the appropriate TTB officer will indicate the date and time of the receipt of the notice.
(4) *Disclosure of adequacy of notice.* The appropriate TTB officer is authorized to disclose, to any person who has a proper interest, whether an adequate notice of sale was given under paragraph (d)(1) of tis section insofar as disclosure is authorized under [26 U.S.C. 6103](https://www.govinfo.gov/link/uscode/26/6103). Any person desiring this information should submit to the appropriate TTB officer a written request which clearly describes the property sold or to be sold, identifies the applicable notice of lien, gives the reasons for requesting the information, and states the name and address of the person making the request.
([26 U.S.C. 7425(c)](https://www.govinfo.gov/link/uscode/26/7425))
\[T.D. ATF-301, [55 FR 47634](https://www.federalregister.gov/citation/55-FR-47634), Nov. 14, 1990, as amended by T.D. ATF-450, [66 FR 29027](https://www.federalregister.gov/citation/66-FR-29027), May 29, 2001; T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
#### § 70.206 Discharge of liens; redemption by United States.
(a) *Right to redeem* —
(1) *In general.* In the case of a nonjudicial sale of real property to satisfy a lien prior to the tax lien or a title derived from the enforcement of a tax lien, the appropriate TTB officer may redeem the property within the redemption period (as described in [paragraph (a)(2)](/current/title-27/section-70.206#p-70.206\(a\)\(2\)) of this section). The right of redemption of the United States exists under [26 U.S.C. 7425(d)](https://www.govinfo.gov/link/uscode/26/7425) even though a consent to the sale has been made under [26 U.S.C. 7425(c)(2)](https://www.govinfo.gov/link/uscode/26/7425) and [§ 70.205(b) of this part](/current/title-27/part-70/section-70.205#p-70.205\(b\)). For purposes of this section, the term “nonjudicial sale” shall have the same meaning as used in [§ 70.204(a) of this part](/current/title-27/part-70/section-70.204#p-70.204\(a\)).
(2) *Redemption period.* For purposes of this section, the redemption period shall be:
(i) The period beginning with the date of the sale (as determined under [§ 70.204(b)](/current/title-27/section-70.204#p-70.204\(b\))) and ending with the 120th day after such date, or
(ii) The period for redemption of real property allowable with respect to other secured creditors, under the local law of the place where the real property is located, whichever expires later.
Which ever period is applicable, [26 U.S.C. 7425](https://www.govinfo.gov/link/uscode/26/7425) and this section shall govern the amount to be paid and the procedure to be followed.
(3) *Limitations.* In the event a sale does not ultimately discharge the property from tax lien (whether by reason of local law or the provisions of [26 U.S.C. 7425(b)](https://www.govinfo.gov/link/uscode/26/7425)), the provisions of this section do not apply because the tax lien will continue to attach to the property after the sale. In a case in which the Bureau is not entitled to a notice of sale under [26 U.S.C. 7425(b)](https://www.govinfo.gov/link/uscode/26/7425) and [§ 70.205 of this part](/current/title-27/part-70/section-70.205), the United States does not have a right of redemption under [26 U.S.C. 7425(d)](https://www.govinfo.gov/link/uscode/26/7425). However, in such a case, if a tax lien has attached to the property at the time of sale, the United States has the same right of redemption, if any, which is afforded similar creditors under the local law of the place in which the property is situated.
(b) *Amount to be paid* —
(1) *In general.* In any case in which an appropriate TTB officer exercises the right to redeem real property under [26 U.S.C. 7425(d)](https://www.govinfo.gov/link/uscode/26/7425), the amount to be paid is the sum of the following amounts:
(i) The actual amount paid for the property (as determined under [paragraph (b)(2)](/current/title-27/section-70.206#p-70.206\(b\)\(2\)) of this section) being redeemed (which, in the case of a purchaser who is the holder of the lien being foreclosed, shall include the amount of the obligation secured by such lien to the extent legally satisfied by reason of the sale);
(ii) Interest on the amount paid (described in [paragraph (b)(1)(i)](/current/title-27/section-70.206#p-70.206\(b\)\(1\)\(i\)) of this section) at the sale by the purchaser of the real property computed at the rate of 6 percent per annum for the period from the date of the sale (as determined under [§ 70.204(b) of this part](/current/title-27/part-70/section-70.204#p-70.204\(b\))) to the date of redemption;
(iii) The amount, if any, equal to the excess of the expenses necessarily incurred to maintain such property (as determined under [paragraph (b)(3)](/current/title-27/section-70.206#p-70.206\(b\)\(3\)) of this section) by the purchaser (and the purchaser's successor in interest, if any) over the income from such property realized by the purchaser (and the purchaser's successor in interest, if any) plus a reasonable rental value of such property (to the extent the property is used by or with the consent of the purchaser or the purchaser's successor in interest or is rented at less than its reasonable rental value); and
(iv) The amounts, if any, of a payment made by the purchaser or the purchaser's successor in interest after the foreclosure sale to a holder of a senior lien (to the extent provided under [paragraph (b)(4)](/current/title-27/section-70.206#p-70.206\(b\)\(4\)) of this section).
(2) *Actual amount paid.*
(i) The actual amount paid for property by a purchaser, other than holder of the lien being foreclosed, is the amount paid by the purchaser at the sale. For purposes of this paragraph, the amount paid by the purchaser at the sale includes deferred payments upon the bid price. The actual amount paid does not include costs and expenses incurred prior to the foreclosure sale by the purchaser except to the extent such expenses are included in the amount bid and paid for the property. For example, the actual amount paid does not normally include the expenses of the purchaser such as title searches, professional fees, or interest on debt incurred to obtain funds to purchase the property.
(ii) In the case of a purchaser who is the holder of the lien being foreclosed, the actual amount paid is the sum of:
(A) The amount of the obligation secured by such lien to the extent legally satisfied by reason of the sale and
(B) Any additional amount bid and paid at the sale.
For purposes of this section, a purchaser who acquires title as a result of a nonjudicial foreclosure sale is treated as the holder of the lien being foreclosed if a lien (or any interest reserved, created, or conveyed as security for the payment of a debt or fulfillment of other obligation) held by the purchaser is partially or fully satisfied by reason of the foreclosure sale. For example, a person whose title is derived from a tax deed issued under local law shall be treated as a purchaser who is the holder of the lien foreclosed in a case where a tax certificate, evidencing a lien on the property arising from the payment of property taxes, ripens into title. The amount paid by a purchaser at the sale includes deferred payments upon any portion of the bid price which is in excess of the amount of the lien being foreclosed. The actual amount paid does not include costs and expenses incurred prior to the foreclosure sale by the purchaser except to the extent such expenses are included in the amount of the lien being foreclosed which is legally satisfied by reason of the sale or in the amount bid and paid at the sale. Where the lien being foreclosed attaches to other property not subject to the foreclosure sale, the amount legally satisfied by reason of the sale does not include the amount of such lien that attaches to the other property. However, for purposes of the preceding sentences, the amount of the lien that attaches to the other property shall be considered to be equal to the amount by which the value of the other property exceeds the amount of any other senior lien on that property. Where, after the sale, the holder of the lien being foreclosed has the right to the unpaid balance of the amount due the holder, the amount legally satisfied by reason of the sale does not include the amount of such lien to the extent a deficiency judgment may be obtained therefor. However, for purposes of the preceding sentence, an amount, with respect to which the holder of the lien being foreclosed would otherwise have a right to a deficiency judgment, shall be considered to be legally satisfied by reason of the foreclosure sale to the extent that the holder has waived the holder's right to a deficiency judgment prior to the foreclosure sale. For this purpose, the waiver must be in writing and legally binding upon the foreclosing lienholder as of the time the sale is concluded. If, prior to the foreclosure, payments have been made by the foreclosing lienholder to a holder of a superior lien, the payments are included in the actual amount paid to the extent they give rise to an interest which is legally satisfied by reason of the foreclosure sale.
(3) *Excess expenses incurred by purchaser.*
(i) Expenses necessarily incurred in connection with the property after the foreclosure sale and before redemption by the United States are taken into account in determining if there are excess expenses payable under [paragraph (b)(1)(iii)](/current/title-27/section-70.206#p-70.206\(b\)\(1\)\(iii\)) of this section. Expenses incurred by the purchaser prior to the foreclosure sale are not considered under [paragraph (b)(3)](/current/title-27/section-70.206#p-70.206\(b\)\(3\)) of this section. (See [paragraph (b)(2)(ii)](/current/title-27/section-70.206#p-70.206\(b\)\(2\)\(ii\)) of this section for circumstances under which such expenses may be included in the amount to be paid.) Expenses necessarily incurred in connection with the property include, for example, rental agent commissions, repair and maintenance expenses, utilities expenses, legal fees incurred after the foreclosure sale and prior to redemption in defending the title acquired through the foreclosure sale, and a proportionate amount of casualty insurance premiums and ad valorem taxes. Improvements made to the property are not considered as an expense unless the amounts incurred for such improvements are necessarily incurred to maintain the property.
(ii) At any time prior to the expiration of the redemption period applicable under [paragraph (a)(2)](/current/title-27/section-70.206#p-70.206\(a\)\(2\)) of this section, the appropriate TTB officer may, by certified or registered mail or hand delivery, request a written itemized statement of the amount claimed by the purchaser or the purchaser's successor in interest to be payable under [paragraph (b)(1)(iii)](/current/title-27/section-70.206#p-70.206\(b\)\(1\)\(iii\)) of this section. Unless the purchaser or the purchaser's successor in interest furnishes the written itemized statement within 15 days after the request is made by the appropriate TTB officer, it shall be presumed that no amount is payable for expenses in excess of income and the Bureau shall tender only the amount otherwise payable under [paragraph (b)(1)](/current/title-27/section-70.206#p-70.206\(b\)\(1\)) of this section. If a purchaser or the purchaser's successor in interest has failed to furnish the written itemized statement within 15 days after the request therefor is made by the appropriate TTB officer, or there is a disagreement as to the amount properly payable under [paragraph (b)(1)(iii)](/current/title-27/section-70.206#p-70.206\(b\)\(1\)\(iii\)) of this section, a payment for excess expenses shall be made after the redemption within a reasonable time following the verification by the appropriate TTB officer of a written itemized statement submitted by the purchaser or the purchaser's successor in interest or the resolution of the disagreement as to the amount properly payable for excess expenses.
(4) *Payments made by purchaser or the purchaser's successor in interest to a senior lienor.*
(i) The amount to be paid upon a redemption by the United States shall include the amount of a payment made by the purchaser or the purchaser's successor in interest to a holder of a senior lien to the extent a request for the reimbursement thereof (made in accordance with [paragraph (b)(4)(ii)](/current/title-27/section-70.206#p-70.206\(b\)\(4\)\(ii\)) of this section) is approved as provided under [paragraph (b)(4)(iii)](/current/title-27/section-70.206#p-70.206\(b\)\(4\)\(iii\)) of this section. This paragraph applies only to a payment made after the foreclosure sale and before the redemption to a holder of a lien that was, immediately prior to the foreclosure sale, superior to the lien foreclosed. A payment of principal or interest to a senior lienor shall be taken into account. Generally, the portion, if any, of a payment which is to be held in escrow for the payment of an expense, such as hazard insurance or real property taxes, is not considered under this paragraph. However, a payment by the escrow agent of a real property tax or special assessment lien, which was senior to the lien foreclosed, shall be considered to be a payment made by the purchaser or the purchaser's successor in interest for purposes of this paragraph. With respect to real property taxes assessed after the foreclosure sale, see [paragraph (b)(3)(i)](/current/title-27/section-70.206#p-70.206\(b\)\(3\)\(i\)) of this section, relating to excess expenses incurred by the purchaser.
(ii) Before the expiration of the redemption period applicable under [paragraph (a)(2)](/current/title-27/section-70.206#p-70.206\(a\)\(2\)) of this section, the appropriate TTB officer shall, in any case where a redemption is contemplated, send notice to the purchaser (or the purchaser's successor in interest of record) by certified or registered mail or hand delivery of the right under [paragraph (b)(4)](/current/title-27/section-70.206#p-70.206\(b\)\(4\)) of this section to request reimbursement (payable in the event the right to redeem under [26 U.S.C. 7425(d)](https://www.govinfo.gov/link/uscode/26/7425) is exercised) for a payment made to a senior lienor. No later than 15 days after the notice from the appropriate TTB officer is sent, the request for reimbursement shall be mailed or delivered to the office specified in such notice and shall consist of:
(A) A written itemized statement, signed by the claimant, of the amount claimed with respect to a payment made to a senior lienor, together with the supporting evidence requested in the notice from the appropriate TTB officer, and
(B) A waiver or other document that will be effective upon redemption by the United States to discharge the property from, or transfer to the United States, any interest in or lien on the property that may arise under local law with respect to the payment made to a senior lienor.
Upon a showing of reasonable cause, an appropriate TTB officer may, in that official's discretion and at any time before the expiration of the applicable period for redemption, grant an extension for a reasonable period of time to submit, amend, or supplement a request for reimbursement. Unless a request for reimbursement is timely submitted (determined with regard to any extension of time granted), no amount shall be payable to the purchaser or the purchaser's successor in interest on account of a payment made to a senior lienor if the right to redeem under [26 U.S.C. 7425(d)](https://www.govinfo.gov/link/uscode/26/7425) is exercised. A waiver or other document submitted pursuant to [paragraph (b)(4)(ii)](/current/title-27/section-70.206#p-70.206\(b\)\(4\)\(ii\)) of this section shall be treated as effective only to the extent of the amount included in the redemption price under this paragraph. If the right to redeem is not exercised or a request for reimbursement is withdrawn, the appropriate TTB officer shall, by certified or registered mail or hand delivery, return to the purchaser or the purchaser's successor any waiver or other document submitted pursuant to [paragraph (b)(4)(ii)](/current/title-27/section-70.206#p-70.206\(b\)\(4\)\(ii\)) of this section as soon as is practicable.
(iii) A request for reimbursement submitted in accordance with [paragraph (b)(4)(ii)](/current/title-27/section-70.206#p-70.206\(b\)\(4\)\(ii\)) of this section shall be considered to be approved for the total amount claimed by the purchaser, and payable in the event the right to redeem is exercised, unless the appropriate TTB officer sends notice to the claimant, by certified or registered mail or hand delivery, of the denial of the amount claimed within 30 days after receipt of the request of 15 days before expiration of the applicable period for redemption, whichever is later. The notification of denial shall state the grounds for denial. If such notice of denial is given, the request for reimbursement for a payment made to a senior lienor shall be treated as having been withdrawn by the purchaser or the purchaser's successor and the Bureau shall tender only the amount otherwise payable under [paragraph (b)(1)](/current/title-27/section-70.206#p-70.206\(b\)\(1\)) of this section. If a request for reimbursement is treated as having been withdrawn under the preceding sentence, payment for amounts described in [paragraph (b)(4)](/current/title-27/section-70.206#p-70.206\(b\)\(4\)) of this section may, in the discretion of the appropriate TTB officer, be made after the redemption upon the resolution of the disagreement as to the amount properly payable under [paragraph (b)(1)(iv)](/current/title-27/section-70.206#p-70.206\(b\)\(1\)\(iv\)) of this section.
(c) *Certificate of redemption* —
(1) *In general.* If an appropriate TTB officer exercises the right of redemption of the United States described in [paragraph (a)](/current/title-27/section-70.206#p-70.206\(a\)) of this section, the appropriate TTB officer shall apply to the officer designated by local law, if any, for the documents necessary to evidence the fact of redemption and to record title to the redeemed property in the name of the United States. If no such officer has been designated by local law, or if the officer designated by local law fails to issue the necessary documents, the appropriate TTB officer is authorized to issue a certificate of redemption for the property redeemed by the United States.
(2) *Filing.* The appropriate TTB officer shall, without delay, cause either the documents issued by the local officer or the certificate of redemption executed by the appropriate TTB officer to be filed with the local office where certificates of redemption are generally filed. If a certificate of redemption is issued by the appropriate TTB officer and if the State in which the real property redeemed by the United States is situated has no office with which certificates of redemption may be filed, the appropriate TTB officer shall file the certificate of redemption in the office of the clerk of the United States district court for the judicial district in which the redeemed property is situated.
(3) *Effect of certificate of redemption.* A certificate of redemption executed pursuant to [paragraph (c)(1)](/current/title-27/section-70.206#p-70.206\(c\)\(1\)) of this section, shall constitute prima facie evidence of the regularity of the redemption. When a certificate of redemption is recorded, it shall transfer to the United States all the rights, title, and interest in and to the redeemed property acquired by the person, from whom the appropriate TTB officer redeemed the property, by virtue of the sale of the property. Therefore, if under local law the purchaser takes title free of liens junior to the lien of the foreclosing lienholder, the United States takes the title free of such junior liens upon redemption of the property. If a certificate of redemption has been erroneously prepared and filed because the redemption was not effective, the appropriate TTB officer shall issue a document revoking such certificate of redemption and such document shall be conclusively binding upon the United States against a purchaser of the property or a holder of a lien upon the property.
(4) Application for release of right of redemption. Upon application of a party with a proper interest in the real property sold in a nonjudicial sale described in [26 U.S.C. 7425(b)](https://www.govinfo.gov/link/uscode/26/7425) and [§ 70.204 of this part](/current/title-27/part-70/section-70.204), which real property is subject to the right of redemption of the United States described in this section, the appropriate TTB officer may, in that officer's discretion, release the right of redemption with respect to the property. The application for the release must be submitted in writing to an appropriate TTB officer and must contain such information as the appropriate TTB officer may require. If the appropriate TTB officer determines that the right of redemption of the United States is without value, no amount shall be required to be paid with respect to the release of the right of redemption.
([26 U.S.C. 7425(d)](https://www.govinfo.gov/link/uscode/26/7425))
\[T.D. ATF-301, [55 FR 47634](https://www.federalregister.gov/citation/55-FR-47634), Nov. 14, 1990, as amended by T.D. ATF-450, [66 FR 29027](https://www.federalregister.gov/citation/66-FR-29027), May 29, 2001]
#### § 70.207 Civil actions by persons other than taxpayers.
(a) *Actions permitted* —
(1) *Wrongful levy.* If a levy has been made on property, or property has been sold pursuant to a levy, any person (other than the person against whom is assessed the tax out of which such levy arose) may bring a civil action against the United States in a district court of the United States based upon such person's claim:
(i) That the person has an interest in, or a lien on, such property which is senior to the interest of the United States; and
(ii) That such property was wrongfully levied upon.
No action is permitted under [26 U.S.C. 7426(a)(1)](https://www.govinfo.gov/link/uscode/26/7426) unless there has been a levy upon the property claimed.
(2) *Surplus proceeds.* If property has been sold pursuant to levy, any person (other than the person against whom is assessed the tax out of which such levy arose) may bring a civil action against the United States in a district court of the United States based upon the claim that the person:
(i) Has an interest in or lien on such property junior to that of the United States; and
(ii) Is entitled to the surplus proceeds of such sale.
(3) *Substituted sale proceeds.* Any person who claims to be legally entitled to all or any part of the amount which is held as a fund from the sale of property pursuant to an agreement described in [26 U.S.C. 6325(b)(3)](https://www.govinfo.gov/link/uscode/26/6325) may bring a civil action against the United States in a district court of the United States to obtain the relief provided by [26 U.S.C. 7426(b)(4)](https://www.govinfo.gov/link/uscode/26/7426). It is not necessary that the claimant be a party to the agreement which provides for the substitution of the sale proceeds for the property subject to the lien.
(b) *Adjudication* —
(1) *Wrongful levy.* If the court determines that property has been wrongfully levied upon, the court may:
(i) Grant an injunction to prohibit the enforcement of such levy or to prohibit a sale of such property if such sale would irreparably injure rights in the property which are superior to the rights of the United States in such property; or
(ii) Order the return of specific property if the United States is in possession of such property; or
(iii) Grant a judgment for the amount of money levied upon, with interest thereon at the overpayment rate established under 26 U.S.C. 6621 from the date that the officer who made the levy receives the money wrongfully levied upon to the date of payment of such judgment, or
(iv) Grant a judgment for an amount not exceeding the amount received by the United States from the sale of such property (which, in the case of property declared purchased by the United States at a sale, shall be the greater of the minimum amount determined pursuant to [26 U.S.C. 6335(e)](https://www.govinfo.gov/link/uscode/26/6335) or the amount received by the United States from the resale of such property), or the fair market value of such property immediately before the levy, with interest thereon at the overpayment rate established under 26 U.S.C. 6621 from the date of the sale of the property to the date of payment of such judgment.
For purposes of [paragraph (b)(1)](/current/title-27/section-70.207#p-70.207\(b\)\(1\)) of this section, a levy is wrongful against a person (other than the taxpayer against whom the assessment giving rise to the levy is made), if the levy is upon property exempt from levy under [26 U.S.C. 6334](https://www.govinfo.gov/link/uscode/26/6334), or the levy is upon property in which the taxpayer had no interest at the time the lien arose or thereafter, or the levy is upon property with respect to which such person is a purchaser against whom the lien is invalid under [26 U.S.C. 6323](https://www.govinfo.gov/link/uscode/26/6323) or [6324(a)(2)](https://www.govinfo.gov/link/uscode/26/6324) or [(b)](https://www.govinfo.gov/link/uscode/26/6324), or the levy or sale pursuant to levy will or does effectively destroy or otherwise irreparably injure such person's interest in the property which is senior to the Federal tax lien. A levy may be wrongful against a holder of a senior lien upon the taxpayer's property under certain circumstances although legal rights to enforce the holder's interest survive the levy procedure. For example, the levy may be wrongful against such a person if the property is an obligation which is collected pursuant to the levy rather than sold and nothing thereafter remains for the senior lienholder, or the property levied upon is of such a nature that when it is sold at a public sale the property subject to the senior lien is not available for the senior lienholder as a realistic source for the enforcement of the holder's interest. Some of the factors which should be taken into account in determining whether property remains or will remain a realistic source from which the senior lienholder may realize collection are: The nature of the property, the number of purchasers, the value of each unit sold or to be sold, whether, as a direct result of the distraint sale, the costs of realizing collection from the security have or will be so substantially increased as to render the security substantially valueless as a source of collection, and whether the property subject to the distraint sale constitutes substantially all of the property available as security for the payment of the indebtedness to the senior lienholder.
(2) *Surplus proceeds.* If the court determines that the interest or lien of any party to an action under [26 U.S.C. 7426](https://www.govinfo.gov/link/uscode/26/7426) was transferred to the proceeds of a sale of the property, the court may grant a judgment in an amount equal to all or any part of the amount of the surplus proceeds of such sale. The term “surplus proceeds” means property remaining after application of the provisions of [26 U.S.C. 6342(a)](https://www.govinfo.gov/link/uscode/26/6342).
(3) *Substituted sale proceeds.* If the court determines that a party has an interest in or lien on the amount held as a fund pursuant to an agreement described in [26 U.S.C. 6325(b)(3)](https://www.govinfo.gov/link/uscode/26/6325), the court may grant a judgment in an amount equal to all or any part of the amount of such fund.
([26 U.S.C. 7426](https://www.govinfo.gov/link/uscode/26/7426))
#### § 70.208 Review of jeopardy assessment or jeopardy levy procedures; information to taxpayer.
Not later than 5 days after the day on which an assessment is made under [26 U.S.C. 6862](https://www.govinfo.gov/link/uscode/26/6862) or when a levy is made less than 30 days after the notice and demand described in [26 U.S.C 6331(a)](https://www.govinfo.gov/link/uscode/26/6331), the officer who authorized the assessment or levy shall provide the taxpayer a written statement setting forth the information upon which that official relies in authorizing such assessment or levy.
([26 U.S.C. 7429(a)(1)](https://www.govinfo.gov/link/uscode/26/7429))
#### § 70.209 Review of jeopardy assessment or levy procedures; administrative review.
(a) *Request for administrative review.* Any request for the review of a jeopardy assessment or levy provided for by [26 U.S.C. 7429(a)(2)](https://www.govinfo.gov/link/uscode/26/7429) shall be filed with the officer who authorized the assessment or levy, within 30 days after the statement described in [§ 70.208 of this part](/current/title-27/part-70/section-70.208) is given to the taxpayer. However, if no statement is given within the 5-day period described in [§ 70.208](/current/title-27/section-70.208), any request for review of the jeopardy assessment shall be filed within 35 days after the date the assessment is made. Such request shall be in writing, shall state fully the reasons for the request, and shall be supported by such evidence as will enable the reviewing officer to make the redetermination described in [26 U.S.C. 7429(a)(3)](https://www.govinfo.gov/link/uscode/26/7429).
(b) *Administrative review.* In determining whether the assessment or levy is reasonable and the amount assessed appropriate, the reviewing officer shall take into account not only information available at the time the assessment is made but also information which subsequently becomes available.
([26 U.S.C. 7429(a)(2)](https://www.govinfo.gov/link/uscode/26/7429))
\[T.D. ATF-6, [38 FR 32445](https://www.federalregister.gov/citation/38-FR-32445), Nov. 26, 1973, as amended by T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
#### § 70.210 Review of jeopardy assessment or levy procedures; judicial action.
(a) *Time for bringing judicial action.* An action for judicial review described in [26 U.S.C. 7429(b)](https://www.govinfo.gov/link/uscode/26/7429) may be instituted by the taxpayer during the period beginning on the earlier of:
(1) The date of the reviewing officer notifies the taxpayer of the determination described in [26 U.S.C. 7429(a)(3)](https://www.govinfo.gov/link/uscode/26/7429); or
(2) The 16th day after the request described in [26 U.S.C. 7429(a)(2)](https://www.govinfo.gov/link/uscode/26/7429) was made by the taxpayer; and ending on the 90th day thereafter.
(b) Extension of the period for judicial review. The U.S. Government may not seek an extension of the 20-day period described in [26 U.S.C. 7429(b)(2)](https://www.govinfo.gov/link/uscode/26/7429), but it may join with the taxpayer in seeking such an extension.
([26 U.S.C. 7429](https://www.govinfo.gov/link/uscode/26/7429))
#### § 70.213 Repayments to officers or employees.
The appropriate TTB officer is authorized to repay to any officer or employee of the Bureau the full amount of such sums of money as may be recovered against such officer or employee in any court for any taxes imposed under provisions of 26 U.S.C. enforced and administered by the Bureau collected by such officer or employee with the cost and expense of suit, and all damages and costs recovered against any officer or employee of the Bureau in any suit brought against such officer or employee by reason of anything done in the official performance of duties under the provisions of 26 U.S.C. enforced and administered by the Bureau.
([26 U.S.C. 7423](https://www.govinfo.gov/link/uscode/26/7423))
### Limitations
Limitations on Assessment and Collection
#### § 70.221 Period of limitations upon assessment.
(a) The amount of any tax imposed by the Internal Revenue Code (other than a tax collected by means of stamps) shall be assessed within 3 years after the return was filed. For rules applicable in cases where the return is filed prior to the due date thereof, see section 6501(b) of the Internal Revenue Code. In the case of taxes payable by stamps, assessment shall be made at any time after the tax becomes due and before the expiration of 3 years after the date on which any part of the tax was paid. For exceptions and additional rules, see subsections (b) and (c) of section 6501 of the Internal Revenue Code.
(b) No proceeding in court without assessment for the collection of any tax shall be begun after the expiration of the applicable period for the assessment of such tax.
([26 U.S.C. 6501](https://www.govinfo.gov/link/uscode/26/6501))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), Nov. 14, 1990]
#### § 70.222 Time return deemed filed for purposes of determining limitations.
(a) *Early Return.* Any return filed prior to the last day prescribed by law or regulations for the filing thereof (determined without regard to any extension of time for filing) shall be considered as filed on such last day.
(b) *Returns executed by appropriate TTB officers.* The execution of a return by an appropriate TTB officer under the authority of section 6020(b) of the Internal Revenue Code does not start the running of the statutory period of limitations on assessment and collection.
([26 U.S.C. 6501](https://www.govinfo.gov/link/uscode/26/6501))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), Nov. 14, 1990; T.D. ATF-450, [66 FR 29028](https://www.federalregister.gov/citation/66-FR-29028), May 29, 2001]
#### § 70.223 Exceptions to general period of limitations on assessment and collection.
(a) *False return.* In the case of a false or fraudulent return with intent to evade any tax, the tax may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time after such false or fraudulent return is filed.
(b) *Willful attempt to evade tax.* In the case of a willful attempt in any manner to defeat or evade any tax imposed by provisions of 26 U.S.C. enforced and administered by the Bureau, the tax may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time.
(c) *No return.* In the case of a failure to file a return, the tax may be assessed, or a proceeding in court for the collection of such tax may be begun without assessment, at any time after the date prescribed for filing the return.
(d) *Extension by agreement.* The time prescribed by [26 U.S.C. 6501](https://www.govinfo.gov/link/uscode/26/6501) for the assessment of any tax imposed by provisions of 26 U.S.C. enforced and administered by the Bureau may, prior to the expiration of such time, be extended for any period of time agreed upon in writing by the taxpayer and the appropriate TTB officer. The extension shall become effective when the agreement has been executed by both parties. The period agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon.
([26 U.S.C. 6501](https://www.govinfo.gov/link/uscode/26/6501))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated and amended by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), [47641](https://www.federalregister.gov/citation/55-FR-47641), Nov. 14, 1990; T.D. ATF-331, [57 FR 40328](https://www.federalregister.gov/citation/57-FR-40328), Sept. 3, 1992]
#### § 70.224 Collection after assessment.
(a) *Length of period* —
(1) *General rule.* In any case in which a tax has been assessed within the statutory period of limitation properly applicable thereto, a proceeding in court to collect such tax may be begun, or levy for the collection of such tax may be made, within 10 years after the assessment thereof.
(2) *Extension by agreement.*
(i) The 10-year period of limitation on collection after assessment of any tax may, prior to the expiration thereof, be extended for any period of time agreed upon in writing by the taxpayer and the appropriate TTB officer. Whenever necessary to protect the revenue, such officer may also execute a written agreement with the taxpayer to extend the period of limitation. The extension becomes effective upon execution of the agreement by both the taxpayer and such officer.
(ii) The period of limitation on collection after assessment of any tax (including any extension of such period) may be extended after the expiration thereof if there has been a levy on any part of the taxpayer's property prior to such expiration and if the extension is agreed upon in writing prior to a release of the levy under the provisions of [26 U.S.C. 6343](https://www.govinfo.gov/link/uscode/26/6343). An extension under this paragraph has the same effect as an agreement made prior to the expiration of the period of limitation on collection after assessment, and during the period of the extension collection may be enforced as to all property or rights to property owned by the taxpayer whether or not seized under the levy which was released.
(iii) Any period agreed upon under the provisions of [paragraph (a)(1)](/current/title-27/section-70.224#p-70.224\(a\)\(1\)) of this section may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon.
(3) If a timely proceeding in court for the collection of a tax is commenced, the period during which such tax may be collected by levy shall be extended and shall not expire until the liability for the tax (or a judgment against the taxpayer arising from such liability) is satisfied or becomes unenforceable.
(b) *Date when levy is considered made.* The date on which a levy on property or rights to property is made is the date on which the notice of seizure provided in [26 U.S.C. 6335(a)](https://www.govinfo.gov/link/uscode/26/6335) is given.
([26 U.S.C. 6502](https://www.govinfo.gov/link/uscode/26/6502))
\[T.D. ATF-301, [55 FR 47641](https://www.federalregister.gov/citation/55-FR-47641), Nov. 14, 1990, as amended by T.D. ATF-450, [66 FR 29028](https://www.federalregister.gov/citation/66-FR-29028), May 29, 2001]
#### § 70.225 Suspension of running of period of limitation; assets of taxpayer in control or custody of court.
Where all or substantially all of the assets of a taxpayer are in the control or custody of the court in any proceeding before any court of the United States, or any State of the United States, or the District of Columbia, the period of limitations on collection after assessment prescribed in [26 U.S.C. 6502](https://www.govinfo.gov/link/uscode/26/6502) is suspended with respect to the outstanding amount due on the assessment for the period such assets are in the control or custody of the court, and for 6 months thereafter.
([26 U.S.C. 6503](https://www.govinfo.gov/link/uscode/26/6503))
\[T.D. ATF-301, [55 FR 47642](https://www.federalregister.gov/citation/55-FR-47642), Nov. 14, 1990]
#### § 70.226 Suspension of running of period of limitation; taxpayer outside of United States.
The running of the period of limitations on collection after assessment prescribed in [26 U.S.C. 6502](https://www.govinfo.gov/link/uscode/26/6502) (relating to collection after assessment) is suspended for the period during which the taxpayer is absent from the United States if such period is a continuous period of absence from the United States extending for 6 months or more. In a case where the running of the period of limitations has been suspended under the first sentence of this paragraph and at the time of the taxpayer's return to the United States the period of limitations would expire before the expiration of 6 months from the date of the taxpayer's return, the period of limitations shall not expire until after 6 months from the date of the taxpayer's return. The taxpayer will be deemed to be absent from the United States for purposes of this section if the taxpayer is generally and substantially absent from the United States, even though the taxpayer makes casual temporary visits during the period.
([26 U.S.C. 6503](https://www.govinfo.gov/link/uscode/26/6503))
\[T.D. ATF-301, [55 FR 47642](https://www.federalregister.gov/citation/55-FR-47642), Nov. 14, 1990]
#### § 70.227 Suspension of running of period of limitation; wrongful seizure of property of third party.
The running of the period of limitations on collection after assessment prescribed in [26 U.S.C. 6502](https://www.govinfo.gov/link/uscode/26/6502) (relating to collection after assessment) shall be suspended for a period equal to a period beginning on the date property (including money) is wrongfully seized or received by an appropriate TTB officer and ending on the date 30 days after the date on which the appropriate TTB officer returns the property pursuant to [26 U.S.C. 6343(b)](https://www.govinfo.gov/link/uscode/26/6343) (relating to authority to return property) or the date 30 days after the date on which a judgment secured pursuant to [26 U.S.C. 7426](https://www.govinfo.gov/link/uscode/26/7426) (relating to civil actions by persons other than taxpayers) with respect to such property becomes final. The running of the period of limitations on collection after assessment shall be suspended under this section only with respect to the amount of such assessment which is equal to the amount of money or the value of specific property returned.
([26 U.S.C. 6503](https://www.govinfo.gov/link/uscode/26/6503))
\[T.D. ATF-301, [55 FR 47642](https://www.federalregister.gov/citation/55-FR-47642), Nov. 14, 1990, as amended by T.D. ATF-450, [66 FR 29028](https://www.federalregister.gov/citation/66-FR-29028), May 29, 2001]
Limitations on Liens
#### Source:
Sections 70.231 through 70.234 added by T.D. ATF-301, [55 FR 47642](https://www.federalregister.gov/citation/55-FR-47642), Nov. 14, 1990, unless otherwise noted.
#### § 70.231 Protection for certain interests even though notice filed.
(a) *Securities.* Even though a notice of a lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) is filed in accordance with [§ 70.148 of this part](/current/title-27/part-70/section-70.148), the lien is not valid with respect to a security (as defined in [§ 70.143(d) of this part](/current/title-27/part-70/section-70.143#p-70.143\(d\))) against:
(1) A purchaser (as defined in [§ 70.143(f) of this part](/current/title-27/part-70/section-70.143#p-70.143\(f\))) of the security who at the time of purchase did not have actual notice or knowledge (as defined in [§ 70.144(a) of this part](/current/title-27/part-70/section-70.144#p-70.144\(a\))) of the existence of the lien;
(2) A holder of a security interest (as defined in [§ 70.143(a) of this part](/current/title-27/part-70/section-70.143#p-70.143\(a\))) in the security who did not have actual notice or knowledge (as defined in [§ 70.144(a) of this part](/current/title-27/part-70/section-70.144#p-70.144\(a\))) of the existence of the lien at the time the security interest came into existence or at the time such security interest was acquired from a previous holder for a consideration in money or money's worth (as defined in [§ 70.143(a) of this part](/current/title-27/part-70/section-70.143#p-70.143\(a\))); or
(3) A transferee of an interest protected under [paragraph (a) (1)](/current/title-27/section-70.231#p-70.231\(a\)\(1\)) or [(2)](/current/title-27/section-70.231#p-70.231\(a\)\(2\)) of this section to the same extent the lien is invalid against the transferor to the transferee. For purposes of this paragraph, no person can improve that person's position with respect to the lien by reacquiring the interest from an intervening purchaser or holder of a security interest against whom the lien is invalid.
(b) *Motor vehicles* —
(1) *In general.* Even though a notice of a lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) is filed in accordance with [§ 70.148 of this part](/current/title-27/part-70/section-70.148), the lien is not valid against a purchaser (as defined in [§ 70.143(f) of this part](/current/title-27/part-70/section-70.143#p-70.143\(f\))) of a motor vehicle (as defined in [§ 70.143(c) of this part](/current/title-27/part-70/section-70.143#p-70.143\(c\))) if:
(i) At the time of purchase, the purchaser did not have actual notice or knowledge (as defined in [§ 70.144(a) of this part](/current/title-27/part-70/section-70.144#p-70.144\(a\))) of the existence of the lien, and
(ii) Before the purchaser obtains such notice or knowledge, the purchaser has acquired actual possession of the motor vehicle and has not thereafter relinquished actual possession to the seller or seller's agent.
(2) *Cross reference.* For provisions relating to additional circumstances in which the lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) may not be valid against the purchaser of tangible personal property (including a motor vehicle) purchased at retail, see [paragraph (c)](/current/title-27/section-70.231#p-70.231\(c\)) of this section.
(c) *Personal property purchased at retail* —
(1) *In general.* Even though a notice of a lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) is filed (with respect to any tax imposed under the provisions of 26 U.S.C. enforced and administered by the Bureau) in accordance with [§ 70.148 of this part](/current/title-27/part-70/section-70.148), the lien is not valid against a purchaser (as defined in [§ 70.143(f) of this part](/current/title-27/part-70/section-70.143#p-70.143\(f\))) of tangible personal property purchased at a retail sale (as defined in [paragraph (c)(2)](/current/title-27/section-70.231#p-70.231\(c\)\(2\)) of this section) unless at the time of purchase the purchaser intends the purchase to (or knows that the purchase will) hinder, evade, or defeat the collection of any tax imposed by the provisions of 26 U.S.C. enforced and administered by the Bureau.
(2) *Definition of retail sale.* For purposes of [paragraph (c)](/current/title-27/section-70.231#p-70.231\(c\)) of this section, the term “retail sale” means a sale, made in the ordinary course of the seller's trade or business, of tangible personal property of which the seller is the owner. Such term includes a sale in customary retail quantities by a seller who is going out of business, but does not include a bulk sale or an auction sale in which goods are offered in quantities substantially greater than are customary in the ordinary course of the seller's trade or business or an auction sale of goods the owner of which is not in the business of selling such goods.
(d) *Personal property purchased in casual sale* —
(1) *In general.* Even though a notice of a lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) is filed in accordance with [§ 70.148 of this part](/current/title-27/part-70/section-70.148), the lien is not valid against a purchaser (as defined in [§ 70.143(f) of this part](/current/title-27/part-70/section-70.143#p-70.143\(f\))) of household goods, personal effects, or other tangible personal property of a type described in [§ 70.241 of this part](/current/title-27/part-70/section-70.241) (which includes wearing apparel, school books, fuel, provisions, furniture, arms for personal use, livestock, and poultry (whether or not the seller is the head of a family); and books and tools of a trade, business, or profession (whether or not the trade, business, or profession of the seller)), purchased, other than for resale, in a casual sale for less than \$250 (excluding interest and expenses described in [§ 70.147 of this part](/current/title-27/part-70/section-70.147)). For purposes of this paragraph, a casual sale is a sale not made in the ordinary course of the seller's trade or business.
(2) *Limitation.* This paragraph applies only if the purchaser does not have actual notice or knowledge (as defined in [§ 70.144(a) of this part](/current/title-27/part-70/section-70.144#p-70.144\(a\))):
(i) Of the existence of the tax lien, or
(ii) That the sale is one of a series of sales.
For purposes of [paragraph (d)(2)(ii)](/current/title-27/section-70.231#p-70.231\(d\)\(2\)\(ii\)) of this section, a sale is one of a series of sales if the seller plans to dispose of, in separate transactions, substantially all of the seller's household goods, personal effects, and other tangible personal property described in [§ 70.241 of this part](/current/title-27/part-70/section-70.241).
(e) *Personal property subject to possessory liens.* Even though a notice of a lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) is filed in accordance with [§ 70.148 of this part](/current/title-27/part-70/section-70.148), the lien is not valid against a holder of a lien on tangible personal property which under local law secures the reasonable price of the repair or improvement of the property if the property is, and has been, continuously in the possession of the holder of the lien from the time the possessory lien arose. For example, if local law gives an automobile mechanic the right to retain possession of an automobile the mechanic has repaired as security for payment of the repair bill and the mechanic retains continuous possession of the automobile until such lien is satisfied, a tax lien filed in accordance with [26 U.S.C 6323(f)(1)](https://www.govinfo.gov/link/uscode/26/6323) which has attached to the automobile will not be valid to the extent of the reasonable price of the repairs. It is immaterial that the notice of tax lien was filed before the mechanic undertook the work or that the mechanic knew of the lien before undertaking the work.
(f) *Real property tax and special assessment liens.* Even though a notice of a lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) is filed in accordance with [§ 70.148 of this part](/current/title-27/part-70/section-70.148), the lien is not valid against the holder of another lien upon the real property (regardless of when such other lien arises), if such other lien is entitled under local law to priority over security interests in real property which are prior in time and if such other lien on real property secures payment of:
(1) A tax of general application levied by any taxing authority based upon the value of the property, or
(2) A special assessment imposed directly upon the property by any taxing authority, if the assessment is imposed for the purpose of defraying the cost of any public improvement; or
(3) Charges for utilities or public services furnished to the property by the United States, a State or political subdivision thereof, or an instrumentality of any one or more of the foregoing.
(g) *Residential property subject to a mechanic's lien for certain repairs and improvements.* Even though a notice of lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) is filed in accordance with [§ 70.148 of this part](/current/title-27/part-70/section-70.148), the lien is not valid against a mechanic's lienor (as defined in [§ 70.143(b) of this part](/current/title-27/part-70/section-70.143#p-70.143\(b\))) who holds a lien for the repair or improvement of a personal residence if:
(1) The residence is occupied by the owner and contains no more than four dwelling units, and
(2) The contract price on the prime contract with the owner for the repair or improvement (excluding interest and expenses described in [§ 70.147 of this part](/current/title-27/part-70/section-70.147)) is not more than $1,000. For purposes of this paragraph, the amounts of subcontracts under the prime contract with the owner are not to be taken into consideration for purposes of computing the $1,000 prime contract price. It is immaterial that the notice of tax lien was filed before the contractor undertakes the work or that the contractor knew of the lien before undertaking the work.
(h) *Attorney's liens* —
(1) *In general.* Even though notice of a lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) is filed in accordance with [§ 70.148 of this part](/current/title-27/part-70/section-70.148), the lien is not valid against an attorney who, under local law, holds a lien upon, or a contract enforceable against, a judgment or other amount in settlement of a claim or of a cause of action. The priority afforded an attorney's lien under this paragraph shall not exceed the amount of the attorney's reasonable compensation for obtaining the judgment or procuring the settlement. For purposes of this paragraph, reasonable compensation means the amount customarily allowed under local law for an attorney's service for litigating or settling a similar case or administrative claim. However, reasonable compensation shall be determined on the basis of the facts and circumstances of each individual case. It is immaterial that the notice of tax lien is filed before the attorney undertakes the work or that the attorney knows of the tax lien before undertaking the work. This paragraph does not apply to an attorney's lien which may arise from the defense of a claim or cause of action against a taxpayer except to the extent such lien is held upon a judgment or other amount arising from the adjudication or settlement of a counterclaim in favor of the taxpayer. In case of suits against the taxpayer, see [§ 70.150(d)(2) of this part](/current/title-27/part-70/section-70.150#p-70.150\(d\)\(2\)) for rules relating to the subordination of the tax lien to facilitate tax collection.
(2) *Claim or cause of action against the United States.* [Paragraph (h)(1)](/current/title-27/section-70.231#p-70.231\(h\)\(1\)) of this section does not apply to an attorney's lien with respect to:
(i) Any judgment or other fund resulting from the successful litigation or settlement of an administrative claim or cause of action against the United States to the extent that the United States, under any legal or equitable right, offsets its liability under the judgment or settlement against any liability of the taxpayer to the United States, or
(ii) Any amount credited against any liability of the taxpayer in accordance with [26 U.S.C. 6402](https://www.govinfo.gov/link/uscode/26/6402).
(i) *Certain insurance contracts.* Even though a notice of a lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) (with respect to any tax imposed under the provisions of 26 U.S.C. enforced and administered by the Bureau) is filed in accordance with [§ 70.148 of this part](/current/title-27/part-70/section-70.148), the lien is not valid with respect to a life insurance, endowment, or annuity contract, against an organization which is the insurer under the contract, at any time:
(1) Before the insuring organization has actual notice or knowledge (as defined in [§ 70.144(a) of this part](/current/title-27/part-70/section-70.144#p-70.144\(a\))) of the existence of the tax lien.
(2) After the insuring organization has actual notice or knowledge of the lien (as defined in [§ 70.144(a) of this part](/current/title-27/part-70/section-70.144#p-70.144\(a\))) with respect to advances (including contractual interest thereon as provided in [§ 70.147(a) of this part](/current/title-27/part-70/section-70.147#p-70.147\(a\))) required to be made automatically to maintain the contract in force under an agreement entered into before the insuring organization had such actual notice or knowledge, or
(3) After the satisfaction of a levy pursuant to [26 U.S.C. 6332(b)](https://www.govinfo.gov/link/uscode/26/6332), unless and until the appropriate TTB officer delivers to the insuring organization a notice (for example, another notice of levy, a letter, *etc.*), executed after the date of such satisfaction, that the lien exists.
Delivery of the notice described in [paragraph (i)(3)](/current/title-27/section-70.231#p-70.231\(i\)\(3\)) of this section may be made by any means, including regular mail, and delivery of the notice shall be effective only from the time of actual receipt of the notification by the insuring organization. The provisions of this paragraph are applicable to matured as well as unmatured insurance contracts.
(j) *Passbook loans* —
(1) *In general.* Even though a notice of a lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) is filed in accordance with [§ 70.148 of this part](/current/title-27/part-70/section-70.148), the lien is not valid against an institution described in [26 U.S.C. 581](https://www.govinfo.gov/link/uscode/26/581) or [591](https://www.govinfo.gov/link/uscode/26/591) to the extent of any loan made by the institution which is secured by a savings deposit, share, or other account evidenced by a passbook (as defined in [paragraph (j)(2)](/current/title-27/section-70.231#p-70.231\(j\)\(2\)) of this section) if the institution has been continuously in possession of the passbook from the time the loan is made. This paragraph applies only to a loan made without actual notice or knowledge (as defined in [§ 70.144(a) of this part](/current/title-27/part-70/section-70.144#p-70.144\(a\))) of the existence of the lien. Even though an original passbook loan is made without actual notice or knowledge of the existence of the lien, this paragraph does not apply to any additional loan made after knowledge of the lien is acquired by the institution even if it continues to retain the passbook from the time the original passbook loan is made.
(2) *Definition of passbook.* For purposes of [paragraph (j)](/current/title-27/section-70.231#p-70.231\(j\)) of this section, the term “passbook” includes:
(i) Any tangible evidence of a savings deposit, share, or other account which, when in the possession of the bank or other savings institution, will prevent a withdrawal from the account to the extent of the loan balance, and
(ii) Any procedure or system, such as an automatic data processing system, the use of which by the bank or other savings institution will prevent a withdrawal from the account to the extent of the loan balance.
([26 U.S.C. 6323](https://www.govinfo.gov/link/uscode/26/6323))
#### § 70.232 Protection for commercial transactions financing agreements.
(a) *In general.* Even though a notice of a lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) is filed in accordance with [§ 70.148 of this part](/current/title-27/part-70/section-70.148), the lien is not valid with respect to a security interest which:
(1) Comes into existence after the tax lien filing.
(2) Is in qualified property covered by the terms of a commercial transactions financing agreement entered into before the tax lien filing, and
(3) Is protected under local law against a judgment lien arising, as of the time of the tax lien filing, out of an unsecured obligation.
See [§ 70.143 (a)](/current/title-27/part-70/section-70.143#p-70.143\(a\)) and [(e) of this part](/current/title-27/part-70/section-70.143#p-70.143\(e\)) for definitions of the terms “security interest” and “tax lien filing,” respectively. For purposes of this section, a judgment lien is a lien held by a judgment lien creditor as defined in [§ 70.143(g) of this part](/current/title-27/part-70/section-70.143#p-70.143\(g\)).
(b) *Commercial transactions financing agreement.* For purposes of this section, the term “commercial transactions financing agreement” means a written agreement entered into by a person in the course of such person's trade or business:
(1) To make loans to the taxpayer (whether or not at the option of the person agreeing to make such loans) to be secured by commercial financing security acquired by the taxpayer in the ordinary course of the taxpayer's trade or business, or
(2) To purchase commercial financing security, other than inventory, acquired by the taxpayer in the ordinary course of the taxpayer's trade or business.
Such an agreement qualifies as a commercial transactions financing agreement only with respect to loans or purchases made under the agreement before the 46th day after the date of tax lien filing or the time when the lender or purchaser has actual notice or knowledge (as defined in [§ 70.144(a) of this part](/current/title-27/part-70/section-70.144#p-70.144\(a\))) of the tax lien filing, if earlier. For purposes of this paragraph, a loan or purchase is considered to have been made in the course of the lender's or purchaser's trade or business if such person is in the business of financing commercial transactions (such as a bank or commercial factor) or if the agreement is incidental to the conduct of such person's trade or business. For example, if a manufacturer finances the accounts receivable of one of its customers, the manufacturer is considered to engage in such financing in the course of its trade or business. The extent of the priority of the lender or purchaser over the tax lien is the amount of the disbursement made before the 46th day after the date the notice of tax lien is filed, or made before the day (before such 46th day) on which the lender or purchaser has actual notice or knowledge of the filing of the notice of the tax lien.
(c) *Commercial financing security* —
(1) *In general.* The term “commercial financing security” means:
(i) Paper of a kind ordinarily arising in commercial transactions,
(ii) Accounts receivable (as defined in [paragraph (c)(2)](/current/title-27/section-70.232#p-70.232\(c\)\(2\)) of this section),
(iii) Mortgages on real property, and
(iv) Inventory.
For purposes of this subparagraph, the term “paper of a kind ordinarily arising in commercial transactions” in general includes any written document customarily used in commercial transactions. For example, such written documents include paper giving contract rights (as defined in [paragraph (c)(2)](/current/title-27/section-70.232#p-70.232\(c\)\(2\)) of this section), chattel paper, documents of title to personal property, and negotiable instruments or securities. The term “commercial financing security” does not include general intangibles such as patents or copyrights. A mortgage on real estate (including a deed of trust, contract for sale, and similar instrument) may be commercial financing security if the taxpayer has an interest in the mortgage as a mortgagee or assignee. The term “commercial financing security” does not include a mortgage when the taxpayer is the mortgagor of realty owned by the taxpayer. For purposes of this subparagraph, the term “inventory” includes raw materials and goods in process as well as property held by the taxpayer primarily for sale to customers in the ordinary course of the taxpayer's trade or business.
(2) *Definitions.* For purposes of [§§ 70.143](/current/title-27/part-70/section-70.143) and [70.146 of this part](/current/title-27/part-70/section-70.146), and this section:
(i) A contract right is any right to payment under a contract not yet earned by performance and not evidenced by an instrument or chattel paper, and
(ii) An account receivable is any right to payment for goods sold or leased or for services rendered which is not evidenced by an instrument or chattel paper.
(d) *Qualified property.* For purposes of [paragraph (a)](/current/title-27/section-70.232#p-70.232\(a\)) of this section, qualified property consists solely of commercial financing security acquired by the taxpayer-debtor before the 46th day after the date of tax lien filing. Commercial financing security acquired before such day may be qualified property even though it is acquired by the taxpayer after the lender received actual notice or knowledge of the filing of the tax lien. For example, although the receipt of actual notice or knowledge of the filing of the notice of the tax lien has the effect of ending the period within which protected disbursements may be made to the taxpayer, property which is acquired by the taxpayer after the lender receives actual notice or knowledge of such filing and before such 46th day, which otherwise qualifies as commercial financing security, becomes commercial financing security to which the priority of the lender extends for loans made before the lender received the actual notice or knowledge. An account receivable (as defined in [paragraph (c)(2)(ii)](/current/title-27/section-70.232#p-70.232\(c\)\(2\)\(ii\)) of this section) is acquired by a taxpayer at the time, and to the extent, a right to payment is earned by performance. Chattel paper, documents of title, negotiable instruments, securities, and mortgages on real estate are acquired by a taxpayer when the taxpayer obtains rights in the paper or mortgage. Inventory is acquired by the taxpayer when title passes to the taxpayer. A contract right (as defined in [paragraph (c)(2)(i)](/current/title-27/section-70.232#p-70.232\(c\)\(2\)\(i\)) of this section) is acquired by a taxpayer when the contract is made. Identifiable proceeds, which arise from the collection or disposition of qualified property by the taxpayer, are considered to be acquired at the time such qualified property is acquired if the secured party has a continuously perfected security interest in the proceeds under local law. The term “proceeds” includes whatever is received when collateral is sold, exchanged, or collected. For purposes of this paragraph, the term “identifiable proceeds” does not include money, checks and the like which have been commingled with other cash proceeds. Property acquired by the taxpayer after the 45th day following tax lien filing, by the expenditure of proceeds, is not qualified property.
(e) *Purchaser treated as acquiring security interest.* A person who purchases commercial financing security, other than inventory, pursuant to a commercial transactions financing agreement is treated, for purposes of this section, as having acquired a security interest in the commercial financing security. In the case of a bona fide purchase at a discount, a purchaser of commercial financing security who satisfies the requirements of this section has priority over the tax lien to the full extent of the security.
([26 U.S.C. 6323](https://www.govinfo.gov/link/uscode/26/6323))
\[T.D. ATF-6, [38 FR 32445](https://www.federalregister.gov/citation/38-FR-32445), Nov. 26, 1973, as amended by T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
#### § 70.233 Protection for real property construction or improvement financing agreements.
(a) *In general.* Even though a notice of a lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) is filed in accordance with [§ 70.148 of this part](/current/title-27/part-70/section-70.148), the lien is not valid with respect to a security interest which:
(1) Comes into existence after the tax lien filing,
(2) Is on qualified property covered by the terms of a real property construction or improvement financing agreement entered into before the tax lien filing, and
(3) Is protected under local law against a judgment lien arising, as of the time of tax lien filing, out of an unsecured obligation.
For purposes of this section, it is immaterial that the holder of the security interest had actual notice or knowledge of the lien at the time disbursements are made pursuant to such an agreement. See [§ 70.143 (a)](/current/title-27/part-70/section-70.143#p-70.143\(a\)) and [(e) of this part](/current/title-27/part-70/section-70.143#p-70.143\(e\)) for general definitions of the terms “security interest” and “tax lien filing.” For purposes of this section, a judgment lien is a lien held by a judgment lien creditor as defined in [§ 70.143(g) of this part](/current/title-27/part-70/section-70.143#p-70.143\(g\)).
(b) *Real property construction or improvement financing agreement.* For purposes of this section, the term “real property construction or improvement financing agreement” means any written agreement to make cash disbursements (whether or not at the option of the party agreeing to make such disbursements):
(1) To finance the construction, improvement, or demolition of real property if the agreement provides for a security interest in the real property with respect to which the construction, improvement, or demolition has been or is to be made;
(2) To finance a contract to construct or improve, or demolish real property if the agreement provides for a security interest in the proceeds of the contract; or
(3) To finance the raising or harvesting of a farm crop or the raising of livestock or other animals if the agreement provides for a security interest in any property subject to the lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) at the time of tax lien filing, in the crop raised or harvested, or in the livestock or other animals raised.
For purposes of [paragraphs (b) (1)](/current/title-27/section-70.233#p-70.233\(b\)\(1\)) and [(2)](/current/title-27/section-70.233#p-70.233\(b\)\(2\)) of this section, construction or improvement may include demolition. For purposes of any agreement described in [paragraph (b)(3)](/current/title-27/section-70.233#p-70.233\(b\)\(3\)) of this section, the furnishing of goods and services is treated as the disbursement of cash.
(c) *Qualified property.* For purposes of this section, the term “qualified property” includes only:
(1) In the case of an agreement described in [paragraph (b)(1)](/current/title-27/section-70.233#p-70.233\(b\)\(1\)) of this section, the real property with respect to which the construction or improvement has been or is to be made;
(2) In the case of an agreement described in [paragraph (b)(2)](/current/title-27/section-70.233#p-70.233\(b\)\(2\)) of this section, the proceeds of the contract to construct or improve real property; or
(3) In the case of an agreement described in [paragraph (b)(3)](/current/title-27/section-70.233#p-70.233\(b\)\(3\)) of this section, property subject to the lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) at the time of tax lien filing, the farm crop raised or harvested, or the livestock or other animals raised.
([26 U.S.C. 6323](https://www.govinfo.gov/link/uscode/26/6323))
#### § 70.234 Protection for obligatory disbursement agreements.
(a) *In general.* Even though a notice of a lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) is filed in accordance with [§ 70.148 of this part](/current/title-27/part-70/section-70.148), the lien is not valid with respect to security interest which:
(1) Comes into existence after the tax lien filing,
(2) Is in qualified property covered by the terms of an obligatory disbursement agreement entered into before the tax lien filing, and
(3) Is protected under local law against a judgment lien arising, as of the time of tax lien filing, out of an unsecured obligation.
See [§ 70.143 (a)](/current/title-27/part-70/section-70.143#p-70.143\(a\)) and [(e) of this part](/current/title-27/part-70/section-70.143#p-70.143\(e\)) for definitions of the terms “security interest” and “tax lien filing.” For purposes of this section, a judgment lien creditor as defined in [§ 70.143(g) of this part](/current/title-27/part-70/section-70.143#p-70.143\(g\)).
(b) *Obligatory disbursement agreement.* For purposes of this section, the term “obligatory disbursement agreement” means a written agreement, entered into by a person in the course of the person's trade or business, to make disbursements. An agreement is treated as an obligatory disbursement agreement only with respect to disbursements which are required to be made by reason of the intervention of the rights of a person other than the taxpayer. The obligation to pay must be conditioned upon an event beyond the control of the obligor. For example, the provisions of this section are applicable where an issuing bank obligates itself to honor drafts or other demands for payment on a letter of credit and a bank, in good faith, relies upon that letter of credit in making advances. The provisions of this section are also applicable, for example, where a bonding company obligates itself to make payments to indemnify against loss or liability and, under the terms of the bond, makes a payment with respect to a loss. The priority described in this section is not applicable, for example, in the case of an accommodation endorsement by an endorser who assumes the obligation other than in the course of the endorser's trade or business.
(c) *Qualified property.* Except as provided under [paragraph (d)](/current/title-27/section-70.234#p-70.234\(d\)) of this section, the term “qualified property,” for purposes of this section, means property subject to the lien imposed by [26 U.S.C. 6321](https://www.govinfo.gov/link/uscode/26/6321) at the time of tax lien filing and, to the extent that the acquisition is directly traceable to the obligatory disbursement, property acquired by the taxpayer after tax lien filing.
(d) *Special rule for surety agreements.* Where the obligatory disbursement agreement is an agreement insuring the performance of a contract of the taxpayer and another person, the term “qualified property” shall be treated as also including:
(1) The proceeds of the contract the performance of which was insured, and
(2) If the contract the performance of which was insured is a contract to construct or improve real property, to produce goods, or to furnish services, any tangible personal property used by the taxpayer in the performance of the insured contract.
For example, a surety company which holds a security interest, arising from cash disbursements made after tax lien filing under a payment or performance bond on a real estate construction project, has priority over the tax lien with respect to the proceeds of the construction contract and, in addition, with respect to any tangible personal property used by the taxpayer in the construction project if its security interest in the tangible personal property is protected under local law against a judgment lien arising, as of the time the tax lien was filed, out of an unsecured obligation.
([26 U.S.C. 6323](https://www.govinfo.gov/link/uscode/26/6323))
Limitations on Levies
#### Source:
Sections 70.241 through 70.245 added by T.D. ATF-301, [55 FR 47646](https://www.federalregister.gov/citation/55-FR-47646), Nov. 14, 1990, unless otherwise noted.
#### § 70.241 Property exempt from levy.
(a) *Enumeration.* There shall be exempt from levy:
(1) *Wearing apparel and school books.* Such items of wearing apparel and such school books as are necessary for the taxpayer or for members of the taxpayer's family. Expensive items of wearing apparel, such as furs, which are luxuries and are not necessary for the taxpayer or for members of the taxpayer's family, are not exempt from levy.
(2) *Fuel, provisions, furniture, and personal effects.* If the taxpayer is the head of a family, so much of the fuel, provisions, furniture, and personal effects in the taxpayer's household, and of the arms for personal use, livestock, and poultry of the taxpayer, as does not exceed \$1,650 in value. For purposes of this provision, an individual who is the only remaining member of a family and who lives alone is not the head of a family.
(3) *Books and tools of a trade, business or profession.* So many of the books and tools necessary for the trade, business, or profession of an individual taxpayer as do not exceed in the aggregate \$1,100 in value.
(4) *Unemployment benefits.* Any amount payable to an individual with respect to that individual's unemployment (including any portion thereof payable with respect to dependents) under an unemployment compensation law of the United States, of any State, or of the District of Columbia or of the Commonwealth of Puerto Rico.
(5) *Undelivered mail.* Mail, addressed to any person, which has not been delivered to the addressee.
(6) *Certain annuity and pension payments.* Annuity or pension payments under the Railroad Retirement Act ([45 U.S.C. chapter 9](https://www.govinfo.gov/link/uscode/45/901)), benefits under the Railroad Unemployment Insurance Act ([45 U.S.C. chapter 11](https://www.govinfo.gov/link/uscode/45/1101)), special pension payments received by a person whose name has been entered on the Army, Navy, Air Force, and Coast Guard Medal of Honor roll ([38 U.S.C. 562](https://www.govinfo.gov/link/uscode/38/562)), and annuities based on retired or retainer pay under [10 U.S.C. chapter 73](https://www.govinfo.gov/link/uscode/10/7301).
(7) *Workmen's compensation.* Any amount payable to an individual as workmen's compensation (including any portion thereof payable with respect to dependents) under a workmen's compensation law of the United States, any State, the District of Columbia, or the Commonwealth of Puerto Rico.
(8) *Judgments for support of minor children.* If the taxpayer is required under any type of order or decree (including an interlocutory decree or a decree of support pendente lite) of a court of competent jurisdiction, entered prior to the day of levy, to contribute to the support of such taxpayer's minor children, so much of the taxpayer's salary, wages, or other income as is necessary to comply with such order or decree. The taxpayer must establish the amount necessary to comply with the order or decree. The appropriate TTB officer is not required to release a levy until such time as that officer is satisfied that the amount to be released from levy will actually be applied in satisfaction of the support obligation. The appropriate TTB officer may make arrangements with a delinquent taxpayer to establish a specific amount of such taxpayer's salary, wage, or other income for each pay period which shall be exempt from levy. Any request for such an arrangement shall be directed to the appropriate TTB officer. Where the taxpayer has more than one source of income sufficient to satisfy the support obligation imposed by the order or decree, the amount exempt from levy may at the discretion of the appropriate TTB officer be allocated entirely to one salary, wage, or source of other income or be apportioned between the several salaries, wages, or other sources of income.
(9) *Minimum exemption for wages, salary, and other income.* Amounts payable to or received by the taxpayer as wages or salary for personal services, or as other income, to the extent provided in [§§ 70.242](/current/title-27/part-70/section-70.242) through [70.245 of this part](/current/title-27/part-70/section-70.245).
(10) *Certain service-connected disability payments.* Any amount payable to an individual as a service-connected (within the meaning of [38 U.S.C. 101(16)](https://www.govinfo.gov/link/uscode/38/101)) disability benefit under:
(i) [38 U.S.C. chapter 11](https://www.govinfo.gov/link/uscode/38/1101), subchapter II, III, IV, V, or VI, or
(ii) [38 U.S.C. chapter 13](https://www.govinfo.gov/link/uscode/38/1301), 21, 23, 31, 32, 34, 35, 37, or 39 shall be exempt from levy.
(11) *Certain public assistance payments.* Any amount payable to an individual as a recipient of public assistance under:
(i) Title 42 U.S.C. subchapter IV (relating to aid to families with dependent children) or 42 U.S.C. subchapter XVI (relating to supplemental security income for the aged, blind, and disabled), or
(ii) State or local government public assistance or public welfare programs for which eligibility is determined by a needs or income test shall be exempt from levy.
(12) *Assistance under job training partnership act.* Any amount payable to a participant under the Job Training Partnership Act ([29 U.S.C. 1501](https://www.govinfo.gov/link/uscode/29/1501) *et seq.*) from funds appropriated pursuant to such Act shall be exempt from levy.
(13) *Principal residence exempt in absence of certain approval or jeopardy.* Except to the extent provided in [§ 70.166 of this part](/current/title-27/part-70/section-70.166), the principal residence of the taxpayer (within the meaning of [26 U.S.C. 1034](https://www.govinfo.gov/link/uscode/26/1034)) is exempt from levy.
(b) *Appraisal.* The TTB officer seizing property of the type described in [26 U.S.C. 6334(a)](https://www.govinfo.gov/link/uscode/26/6334) shall appraise and set aside to the owner the amount of such property declared to be exempt. If the taxpayer objects at the time of the seizure to the valuation fixed by the officer making the seizure, such officer shall summon three disinterested individuals who shall make the valuation.
(c) *Other property.* No other property or rights to property are exempt from levy except the property specifically exempted by [26 U.S.C. 6334(a)](https://www.govinfo.gov/link/uscode/26/6334). No provisions of a State law may exempt property or rights to property from levy for the collection of any Federal tax. Thus, property exempt from execution under State personal or homestead exemption laws is, nevertheless, subject to levy by the United States for collection of its taxes.
([26 U.S.C. 6334](https://www.govinfo.gov/link/uscode/26/6334))
#### § 70.242 Wages, salary and other income.
(a) *In general.* Under [26 U.S.C. 6334(a)(9)](https://www.govinfo.gov/link/uscode/26/6334) and [(d)](https://www.govinfo.gov/link/uscode/26/6334) certain amounts payable to or received by a taxpayer as wages, salary or other income are exempt from levy. This section described the income of a taxpayer that is eligible for the exemption from levy ([paragraph (b)](/current/title-27/section-70.242#p-70.242\(b\)) of this section) and how exempt amounts are to be paid to the taxpayer ([paragraph (c)](/current/title-27/section-70.242#p-70.242\(c\)) of this section). [Section 70.243 of this part](/current/title-27/part-70/section-70.243) describes the sum which will be exempt from levy for each of the taxpayer's payroll periods. Payroll periods are described in [§ 70.244 of this part](/current/title-27/part-70/section-70.244). Amounts exempt from levy are determined in part by the number of persons claimed by the taxpayer as dependents. [Section 70.245 of this part](/current/title-27/part-70/section-70.245) describes the manner in which the taxpayer is to claim any dependent exemptions and the manner in which the employer is to compute the exempt amount and pay the balance to the appropriate TTB officer.
(b) *Eligible taxpayer income.* Only wages, salary or other income payable to the taxpayer after the levy is made on the payor may be exempt from levy under [26 U.S.C. 6334](https://www.govinfo.gov/link/uscode/26/6334) (a)(9). No amount of wages, salary or other income which is paid to the taxpayer before levy is made on the payor will be so exempt from levy.
(c) *Payment of exempt amounts to taxpayer* —
(1) *From wages, salary or other income not subject to levy.* In the case of a taxpayer who has more than one source of wages, salary or other income, the appropriate TTB officer may elect to levy on only one or more such source while leaving other sources of salary or other income free from levy. If those wages, salary or other income which the appropriate TTB officer leaves free from levy equal or exceed the amount to which the taxpayer is entitled as an exemption from levy under [26 U.S.C. 6334(a)(9)](https://www.govinfo.gov/link/uscode/26/6334) and [(d)](https://www.govinfo.gov/link/uscode/26/6334) and [§ 70.243 of this part](/current/title-27/part-70/section-70.243) (and ar not otherwise exempt), then no amount of the taxpayer's wages, salary or other income on which the appropriate TTB officer elects to levy is exempt from levy. The appropriate TTB officer shall notify the employer or other person subject to levy that no amount of the taxpayer's wages, salary or other income is exempt from levy.
(2) *From wages, salary or other income subject to levy.* If the taxpayer's income upon which the appropriate TTB officer does not levy is less than that amount to which the taxpayer is entitled as an exemption, then an amount determined pursuant to [§ 70.243 of this part](/current/title-27/part-70/section-70.243) is to be paid to the taxpayer from those wages, salary or other income which are subject to levy. The appropriate TTB officer will designate those wages, salary or other income subject to levy from which such amount will be paid to the taxpayer. The appropriate TTB officer will generally make this designation by delivering to the employer, or other person levied upon, the form upon which the taxpayer is to claim any dependent exemption. The form will accompany the notice of levy. The person receiving the form from the appropriate TTB officer must promptly deliver it to the taxpayer. In the case of some employers having a large number of employees, however, the appropriate TTB officer will send the form upon which an employee is to claim any dependent exemption directly to the employee. In such a case, the notice of levy will indicate that the form for claiming dependent exemptions has been sent to the taxpayer. If a notice of levy is not accompanied by the form for claiming dependent exemptions and does not indicate that the form was sent directly to the taxpayer, then the person levied upon must make payment to the appropriate TTB officer without regard to amounts prescribed by [§ 70.243 of this part](/current/title-27/part-70/section-70.243) as exempt from levy. If a notice of levy is accompanied by the form for claiming dependent exemptions or indicates that the form was sent directly to the taxpayer, then the person levied upon is to pay over to the taxpayer, amounts determined to be exempt from levy pursuant to [§ 70.243](/current/title-27/section-70.243) and [§ 70.245 (b)](/current/title-27/part-70/section-70.245#p-70.245\(b\)) and [(c) of this part](/current/title-27/part-70/section-70.245#p-70.245\(c\)) (relating to the requirement that the taxpayer submit a claim for any dependent exemption). Amounts not exempt from levy are to be paid to the appropriate TTB officer in accordance with the terms of the levy.
([26 U.S.C. 6334](https://www.govinfo.gov/link/uscode/26/6334))
\[T.D. ATF-6, [38 FR 32445](https://www.federalregister.gov/citation/38-FR-32445), Nov. 26, 1973, as amended by T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
#### § 70.243 Exempt amount.
Amount payable to the taxpayer as wages, salary, or other income for each payroll period described in [§ 70.244 of this part](/current/title-27/part-70/section-70.244) are exempt from levy as follows:
(a) If the payroll period is weekly, an amount equal to:
(1) The sum of:
(i) The standard deduction, and
(ii) The aggregate amount of the deductions for personal exemption allowed the taxpayer under [26 U.S.C. 151](https://www.govinfo.gov/link/uscode/26/151) in the taxable year in which such levy occurs, divided by
(2) 52.
(b) If the payroll period is not weekly, the amount exempt from levy shall be an amount which as nearly as possible will result in the same total exemption from levy for such individual over a period of time as such individual would have under [paragraph (a)](/current/title-27/section-70.243#p-70.243\(a\)) of this section if (during such period of time) the individual were paid or received such wages, salary or other income on a regular weekly basis.
([26 U.S.C. 6334](https://www.govinfo.gov/link/uscode/26/6334))
#### § 70.244 Payroll period.
For purpose of determining the amount of wages, salary or other income exempt from levy under [26 U.S.C. 6334(a)(9)](https://www.govinfo.gov/link/uscode/26/6334):
(a) *Regularly used calendar periods.* In the case of wages, salary or other income paid to the taxpayer on the basis of an established calendar period regularly used by the employer or other person levied upon for payroll or payment purpose (e.g., daily, weekly, biweekly, semimonthly, or monthly), that period is the taxpayer's payroll period.
(b) *Amounts paid on recurrent but irregular basis.* In the case of wages, salary, or other income paid to the taxpayer on a recurrent but irregular basis, the first day of the taxpayer's payroll period is that day following the day upon which the wages, salary, or other income were last paid to the taxpayer. The last day of the payroll period is that day upon which the current payment becomes payable to him or her. However, in any case in which:
(1) Amounts are paid to the taxpayer on a recurrent but irregular basis, and
(2) The last payment was paid to the taxpayer more than 60 days before the current payment becomes payable, the current payment will be deemed a one-time payment (*see* [paragraph (c)](/current/title-27/section-70.244#p-70.244\(c\)) of this section).
(c) *Nonrecurrent payments.* In the case of wages, salary or other income paid to the taxpayer on a one-time basis, the taxpayer's payroll period is deemed to be weekly (*i.e.,* the 1-week period ending on the day of payment).
([26 U.S.C. 6334](https://www.govinfo.gov/link/uscode/26/6334))
#### § 70.245 Computation of exempt amount and payment of amounts not exempt from levy to the appropriate TTB officer.
(a) *General.* Unless advised by the appropriate TTB officer that no part of the money due to the taxpayer is exempt from levy, the employer or other person levied upon will compute the exempt amount, using the formula in [§ 70.243 of this part](/current/title-27/part-70/section-70.243) and the taxpayer's statement of exemptions and filing status described in [paragraph (b)](/current/title-27/section-70.245#p-70.245\(b\)) of this section.
(b) *Statement of exemptions and filing status.* Unless the taxpayer submits a statement of exemptions and filing status to the employer or other person levied upon, the exempt amount will be applied as if the taxpayer were a married individual filing a separate return with only 1 personal exemption. A statement of exemptions and filing status shall be made by either:
(1) Completion of the form provided for this purpose by the Bureau, or
(2) A written statement that:
(i) Gives the taxpayer's filing status for income tax purposes,
(ii) Shows any additional standard deduction if the taxpayer or the taxpayer's spouse is at least 65 and/or blind,
(iii) Identified by name and by relationship to the taxpayer each person for whom a dependent exemption is claimed,
(iv) Is signed by the taxpayer, and
(v) Contains a declaration that it is made under the penalties of perjury.
(c) *Time for submission of statement.* The taxpayer must submit the statement of exemptions and filing status to the employer or other person levied upon no later than the later of:
(1) The third day before the last day of the payroll period for which the exemption is claimed (that is, the third day before payday), or
(2) If the appropriate TTB officer delivers the forms for the statement of exemption and filing status to the employer or other person levied upon (see [§ 70.242(c)(2) of this part](/current/title-27/part-70/section-70.242#p-70.242\(c\)\(2\))), the second day after the date the taxpayer receives the form.
For purposes of [paragraphs (c) (1)](/current/title-27/section-70.245#p-70.245\(c\)\(1\)) and [(2)](/current/title-27/section-70.245#p-70.245\(c\)\(2\)) of this section, the term “day” does not include Saturdays, Sunday or a legal holiday within the meaning of [26 U.S.C. 7503](https://www.govinfo.gov/link/uscode/26/7503). Failure on the part of the taxpayer to submit a timely statement of exemptions and filing status will result in the computation of the exempt amount as if the taxpayer were a married individual filing a separate return with only 1 personal exemption for the applicable pay period, except that the employer or other person levied upon may accept a statement of exemptions and filing status not timely submitted in accordance with this paragraph, and may prepare a disbursement to the taxpayer based upon the information properly verified therein, if payment to the appropriate TTB officer in accordance with the levy is not thereby delayed.
(d) *Payment of amounts not exempt from levy to the appropriate TTB officer* —
(1) *In General.* Wages, Salary, or other income the subject of a levy are payable to the appropriate TTB officer on the date the payor is otherwise obligated to pay the taxpayer (*see* [§ 70.242(c) of this part](/current/title-27/part-70/section-70.242#p-70.242\(c\))).
(2) *Delayed payment in certain cases.* If, however, as described in [paragraph (c)(2)](/current/title-27/section-70.245#p-70.245\(c\)\(2\)) of this section, the taxpayer may submit a statement of exemptions and filing status after the third day before payday, amounts payable to the taxpayer on that payday, to the extent not exempt from levy, are payable to the appropriate TTB officer on the third day following the date on which the taxpayer may timely submit the statement of exemptions and filing status under [paragraph (c)(2)](/current/title-27/section-70.245#p-70.245\(c\)\(2\)) of this section. For purposes of this rule, the term “day” does not include Saturday, Sunday or a legal holiday within the meaning of [26 U.S.C. 7503](https://www.govinfo.gov/link/uscode/26/7503).
([26 U.S.C. 6334](https://www.govinfo.gov/link/uscode/26/6334))
\[T.D. ATF-6, [38 FR 32445](https://www.federalregister.gov/citation/38-FR-32445), Nov. 26, 1973, as amended by T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
Periods of Limitation in Judicial Proceedings
#### § 70.251 Periods of limitation on suits by taxpayers.
(a) No suit or proceeding under section 7422(a) of the Internal Revenue Code for the recovery of any internal revenue tax, penalty, or other sum shall be begun until whichever of the following first occurs:
(1) The expiration of 6 months from the date of the filing of the claim for credit or refund, or
(2) A decision is rendered on such claim prior to the expiration of 6 months after the filing thereof. Except as provided in [paragraph (b)](/current/title-27/section-70.251#p-70.251\(b\)) of this section, no suit or proceeding for the recovery of any tax, penalty, or other sum imposed under the provision of 26 U.S.C. enforced and administered by the Bureau may be brought after the expiration of 2 years from the date of mailing, by either registered or certified mail, by an appropriate TTB officer, to a taxpayer of a statutory notice of disallowance of the part of the claim to which the suit or proceeding relates.
(b) The 2-year period described in [paragraph (a)](/current/title-27/section-70.251#p-70.251\(a\)) of this section may be extended if an agreement to extend the running of the period of limitations is executed. The agreement must be signed by the taxpayer or by an attorney, agent, trustee, or other fiduciary on behalf of the taxpayer. If the agreement is signed by a person other than the taxpayer, it shall be accompanied by an authenticated copy of the power of attorney or other legal evidence of the authority of such person to act on behalf of the taxpayer. If the taxpayer is a corporation, the agreement should be signed with the corporate name followed by the signature of a duly authorized officer of the corporation. The agreement will not be effective until signed by an appropriate officer.
(c)
(1) The taxpayer may sign a waiver of the requirement that the taxpayer be mailed a notice of disallowance. Such waiver is irrevocable and will commence the running of the 2-year period described in [paragraph (a)](/current/title-27/section-70.251#p-70.251\(a\)) of this section on the date the waiver is filed. The waiver shall set forth:
(i) The type of tax and the taxable period covered by the taxpayer's claim for refund;
(ii) The amount of the claim;
(iii) The amount of the claim disallowed;
(iv) A statement that the taxpayer agrees the filing of the waiver will commence the running of the 2-year period provided for in section 6532(a)(1) as if a notice of disallowance had been sent the taxpayer by either registered or certified mail.
(2) The filing of such a waiver prior to the expiration of 6 months from the date the claim was filed does not permit the filing of a suit for refund prior to the time specified in section 6532(a)(1) and [paragraph (a)](/current/title-27/section-70.251#p-70.251\(a\)) of this section.
(d) Any consideration, reconsideration, or other action with respect to a claim after the mailing, by either registered or certified mail, of a notice of disallowance or after the execution of a waiver referred to in [paragraph (c)](/current/title-27/section-70.251#p-70.251\(c\)) of this section, shall not extend the period for bringing suit or other proceeding under section 7422(a) of the Internal Revenue Code.
([26 U.S.C. 6532](https://www.govinfo.gov/link/uscode/26/6532))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated and amended by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), [47648](https://www.federalregister.gov/citation/55-FR-47648), Nov. 14, 1990; T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
#### § 70.252 Periods of limitation on suits by the United States.
The United States may not recover any erroneous refund by civil action under section 7405 of the Internal Revenue Code unless such action is begun within 2 years after the making of such refund. However, if any part of the refund was induced by fraud or misrepresentation of a material fact, the action to recover the erroneous refund may be brought at any time within 5 years from the date the refund was made.
([26 U.S.C. 6532](https://www.govinfo.gov/link/uscode/26/6532))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), Nov. 14, 1990]
#### § 70.253 Periods of limitation on suits by persons other than taxpayers.
(a) *General rule.* No suit or proceeding, except as otherwise provided in [26 U.S.C. 6532(c)(2)](https://www.govinfo.gov/link/uscode/26/6532) and [paragraph (b)](/current/title-27/section-70.253#p-70.253\(b\)) of this section, under [26 U.S.C. 7426](https://www.govinfo.gov/link/uscode/26/7426) and [§ 70.207 of this part](/current/title-27/part-70/section-70.207) relating to civil actions by persons other than taxpayers, shall be begun after the expiration of 9 months from the date of levy or agreement under [26 U.S.C. 6325(b)(3)](https://www.govinfo.gov/link/uscode/26/6325) giving rise to such action.
(b) *Period when claim is filed.* The 9-month period described in [26 U.S.C. 6532(c)(1)](https://www.govinfo.gov/link/uscode/26/6532) and [paragraph (a)](/current/title-27/section-70.253#p-70.253\(a\)) of this section shall be extended to the shorter of
(1) 12 months from the date of filing by a third party of a written request under [§ 70.167(b)(2) of this part](/current/title-27/part-70/section-70.167#p-70.167\(b\)\(2\)) for the return of property wrongfully levied upon, or
(2) 6 months from the date of mailing by registered or certified mail by the appropriate TTB officer to the party claimant of a notice of disallowance of the part of the request to which the action relates. A request which, under [§ 70.167(b)(3) of this part](/current/title-27/part-70/section-70.167#p-70.167\(b\)\(3\)), is not considered adequate does not extend the 9-month period described in [paragraph (a)](/current/title-27/section-70.253#p-70.253\(a\)) of this section.
([26 U.S.C. 6532](https://www.govinfo.gov/link/uscode/26/6532))
\[T.D. ATF-301, [55 FR 47648](https://www.federalregister.gov/citation/55-FR-47648), Nov. 14, 1990, as amended by T.D. ATF-450, [66 FR 29028](https://www.federalregister.gov/citation/66-FR-29028), May 29, 2001]
Limitations on Credit or Refund
#### § 70.261 Period of limitation on filing claim.
(a) In the case of any tax (other than a tax payable by stamp):
(1) If a return is filed, a claim for credit or refund of an overpayment must be filed by the taxpayer within 3 years from the time the return was filed or within 2 years from the time the tax was paid, whichever of such periods expires the later.
(2) If no return is filed, the claim for credit or refund of an overpayment must be filed by the taxpayer within 2 years from the time the tax was paid.
(b) In the case of any tax payable by means of a stamp, a claim for credit or refund of an overpayment of such tax must be filed by the taxpayer within 3 years from the time the tax was paid. For provisions relating to redemption of unused stamps, see section 6805 of the Internal Revenue Code.
(c) For limitations on allowance of credit or refund, special rules, and exceptions, see subsections (b) and (c) of section 6511 of the Internal Revenue Code. For rules as to time return is deemed filed and tax considered paid, see section 6513 of the Internal Revenue Code.
([26 U.S.C. 6511](https://www.govinfo.gov/link/uscode/26/6511))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), Nov. 14, 1990]
#### § 70.262 Limitations on allowance of credits and refunds.
(a) *Effect of filing claim.* Unless a claim for credit or refund of an overpayment is filed within the period of limitation prescribed in section 6511(a), no credit or refund shall be allowed or made after the expiration of such period.
(b) *Limit on amount to be credited or refunded.* In the case of any tax (other than a tax payable by stamp):
(1) If a return was filed, and a claim is filed within 3 years from the time the return was filed, the amount of the credit or refund shall not exceed the portion of the tax paid within the period, immediately preceding the filing of the claim, equal to 3 years plus the period of any extension of time for filing the return.
(2) If a return was filed, and a claim is filed after the 3 year period described in [paragraph (b)(1)](/current/title-27/section-70.262#p-70.262\(b\)\(1\)) of this section, but within 2 years from the time the tax was paid, the amount of the credit or refund shall not exceed the portion of the tax paid within the 2 years immediately preceding the filing of the claim.
(3) If no return was filed, but a claim is filed, the amount of the credit or refund shall not exceed the portion of the tax paid within the 2 years immediately preceding the filing of the claim.
(4) If no claim is filed, the amount of the credit or refund allowed or made shall not exceed the amount that would have been allowable under the preceding subparagraphs if a claim had been filed on the date the credit or refund is allowed.
(c) *In the case of a tax payable by stamp.*
(1) If a claim is filed, the amount of the credit or refund shall not exceed the portion of the tax paid within the 3 years immediately preceding the filing of the claim.
(2) If no claim is filed, the amount of the credit or refund allowed or made shall not exceed the portion of the tax paid within the 3 years immediately preceding the allowance of the credit or refund. For provisions relating to redemption of unused stamps, see section 6805 of the Internal Revenue Code.
([26 U.S.C. 6511](https://www.govinfo.gov/link/uscode/26/6511))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated and amended by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), [47648](https://www.federalregister.gov/citation/55-FR-47648), Nov. 14, 1990; T.D. ATF-450, [66 FR 29028](https://www.federalregister.gov/citation/66-FR-29028), May 29, 2001]
#### § 70.263 Special rules applicable in case of extension of time by agreement.
(a) *Scope.* If, within the period prescribed in section 6511(a) of the Internal Revenue Code for the filing of a claim for credit or refund, an agreement extending the period for assessment of a tax has been made in accordance with the provisions of section 6501(c)(4) of the Internal Revenue Code, the special rules provided in this section become applicable. This section shall not apply to any claim filed, or credit or refund allowed if no claim is filed, either
(1) prior to the execution of an agreement extending the period in which assessment may be made, or
(2) more than 6 months after the expiration of the period within which an assessment may be made pursuant to the agreement or any extension thereof.
(b) *Period in which claim may be filed.* Claim for credit or refund of an overpayment may be filed, or credit or refund may be allowed if no claim is filed, at any time within which an assessment may be made pursuant to an agreement, or any extension thereof, under section 6501(c)(4), and for 6 months thereafter.
(c) *Limit on amount to be credited or refunded.*
(1) If a claim is filed within the time prescribed in [paragraph (b)](/current/title-27/section-70.263#p-70.263\(b\)) of this section, the amount of the credit or refund allowed or made shall not exceed the portion of the tax paid after the execution of the agreement and before the filing of the claim, plus the amount that could have been properly credited or refunded under the provisions of section 6511(b)(2) if a claim had been filed on the date of the execution of the agreement.
(2) If no claim is filed, the amount of credit or refund allowed or made within the time prescribed in [paragraph (b)](/current/title-27/section-70.263#p-70.263\(b\)) of this section shall not exceed the portion of the tax paid after the execution of the agreement and before the making of the credit or refund, plus the amount that could have been properly credited or refunded under the provisions of section 6511(b)(2) if a claim had been filed on the date of the execution of the agreement.
(d) *Effective date of agreement.* The agreement referred to in this section shall become effective when signed by the taxpayer and the appropriate TTB officer.
([26 U.S.C. 6511](https://www.govinfo.gov/link/uscode/26/6511))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), Nov. 14, 1990]
#### § 70.264 Time return deemed filed and tax considered paid.
For purposes of section 6511 of the Internal Revenue Code, a return filed before the last day prescribed by law or regulations for the filing thereof shall be considered as filed on such last day. For purposes of section 6511(b) (2) and (c), payment of any portion of the tax made before the last day prescribed for payment shall be considered made on such last day. An extension of time for filing a return or for paying any tax shall not be given any effect in determining under this section the last day prescribed for filing a return or paying any tax.
([26 U.S.C. 6513](https://www.govinfo.gov/link/uscode/26/6513))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), Nov. 14, 1990]
#### § 70.265 Credits or refunds after period of limitation.
(a) A refund of any portion of any internal revenue tax (or any interest, additional amount, addition to the tax, or assessable penalty) shall be considered erroneous and a credit of any such portion shall be considered void:
(1) If made after the expiration of the period of limitation prescribed by section 6511 of the Internal Revenue Code for filing claim therefor, unless prior to the expiration of such period claim was filed, or
(2) In the case of a timely claim, if the credit or refund was made after the expiration of the period of limitation prescribed by section 6532(a) for the filing of suit, unless prior to the expiration of such period, suit was begun.
(b) For procedure by the United States to recover erroneous refunds, see sections 6532(b) and 7405 of the Internal Revenue Code.
([26 U.S.C. 6514](https://www.govinfo.gov/link/uscode/26/6514))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), Nov. 14, 1990]
#### § 70.266 Credit against barred liability.
Any credit against a liability in respect of any taxable year shall be void if the collection of such liability would be barred by the applicable statute of limitations at the time such credit is made.
([26 U.S.C. 6514](https://www.govinfo.gov/link/uscode/26/6514))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), Nov. 14, 1990]
### Transferees
#### § 70.271 Procedure in the case of transferred assets.
(a) *Method of collection.*
(1) The liability, at law or in equity, of a transferee of property of any person liable in respect of any tax imposed under provisions of 26 U.S.C. enforced and administered by the Bureau, in any case where the liability of the transferee arises on the liquidation of a corporation or partnership, or a corporate reorganization within the meaning of [26 U.S.C. 368(a)](https://www.govinfo.gov/link/uscode/26/368), shall be assessed against such transferee and paid and collected in the same manner and subject to the same provisions and limitations as in the case of the tax with respect to which such liability is incurred, except as hereinafter provided.
(2) *Applicable provisions.* The provisions of 26 U.S.C. made applicable by [26 U.S.C. 6901(a)](https://www.govinfo.gov/link/uscode/26/6901) to the liability of a transferee referred to in [paragraph (a)(1)](/current/title-27/section-70.271#p-70.271\(a\)\(1\)) of this section, include the provisions relating to:
(i) Delinquency in payment after notice and demand and the amount of interest attaching because of such delinquency;
(ii) The authorization of distraint and proceedings in court for collection; and
(iii) The prohibition of claims and suits for refund.
For detailed provisions relating to assessments, collections, and refunds, see [26 U.S.C. chapters 63](https://www.govinfo.gov/link/uscode/26/63), [64](https://www.govinfo.gov/link/uscode/26/64), and [65](https://www.govinfo.gov/link/uscode/26/65), respectively.
(b) *Definition of transferee.* As used in this section, the term “transferee” includes the shareholder of a dissolved corporation, the assignee or donee of an insolvent person, the successor of a corporation, a party to a reorganization as defined in [26 U.S.C. 368](https://www.govinfo.gov/link/uscode/26/368), and all other classes of distributees.
(c) *Period of limitations on assessment.* The period of limitations for assessment of the liability of a transferee is as follows:
(1) *Initial transferee.* In the case of the liability of an initial transferee, 1 year after the expiration of the period of limitations for assessment against the transferor.
(2) *Transferee of transferee.* In the case of the liability of a transferee of a transferee, 1 year after the expiration of the period of limitations for assessment against the preceding transferee, or 3 years after the expiration of the period of limitations for assessment against the taxpayer, whichever of such periods first expires.
(3) *Court proceeding against taxpayer or last preceding transferee.* If, before the expiration of the period specified in [paragraph (c)(1)](/current/title-27/section-70.271#p-70.271\(c\)\(1\)) or [(2)](/current/title-27/section-70.271#p-70.271\(c\)\(2\)) of this section, (whichever is applicable), a court proceeding against the taxpayer or last preceding transferee for the collection of the tax or liability in respect thereof, respectively, has been begun within the period of limitation for the commencement of such proceeding, then within 1 year after the return of execution in such proceeding.
(d) *Extension by agreement* —
(1) *Extension of time for assessment.* The time prescribed by [26 U.S.C. 6901](https://www.govinfo.gov/link/uscode/26/6901) for the assessment of the liability of a transferee may, prior to the expiration of such time, be extended for any period of time agreed upon in writing by the transferee and the appropriate TTB officer. The extension shall become effective when the agreement has been executed by both parties. The period agreed upon may be extended by subsequent agreements in writing made before the expiration of the period previously agreed upon.
(2) *Extension of times for credit or refund.*
(i) For the purposes of determining the period of limitations on credit or refund to the transferee of overpayments made by such transferee or overpayments made by the taxpayer to which such transferee may be legally entitled to credit or refund, an agreement and any extension thereof referred to in [paragraph (d)(1)](/current/title-27/section-70.271#p-70.271\(d\)\(1\)) of this section, shall be deemed an agreement and extension thereof for purposes of [26 U.S.C. 6511(c)](https://www.govinfo.gov/link/uscode/26/6511) (relating to limitations on credit or refund in case of extension of time by agreement).
(ii) For the purpose of determining the limit specified in [26 U.S.C. 6511(c)(2)](https://www.govinfo.gov/link/uscode/26/6511) on the amount of the credit or refund, if the agreement is executed after the expiration of the period of limitations for assessment against the taxpayer with reference to whom the liability of such transferee arises, the periods specified in [26 U.S.C. 6511(b)(2)](https://www.govinfo.gov/link/uscode/26/6511) shall be increased by the period from the date of such expiration to the date the agreement is executed.
(e) *Period of assessment against taxpayer.* For the purpose of determining the period of limitations for assessment against a transferee, if the taxpayer is deceased, or, in the case of a corporation, has terminated its existence, the period of limitations for assessment against the taxpayer shall be the period that would be in effect had the termination of existence not occurred.
([26 U.S.C. 6901](https://www.govinfo.gov/link/uscode/26/6901))
\[T.D. ATF-301, [55 FR 47648](https://www.federalregister.gov/citation/55-FR-47648), Nov. 14, 1990]
### Bonds
#### § 70.281 Form of bond and security required.
(a) *In general.* Any person required to furnish a bond under the provisions of this part shall execute such bond:
(1) On the appropriate form prescribed by the Bureau and
(2) With satisfactory surety.
For provisions as to what will be considered “satisfactory surety”, see [paragraph (b)](/current/title-27/section-70.281#p-70.281\(b\)) of this section. The bonds referred to in this paragraph shall be drawn in favor of the United States.
(b) *Satisfactory surety* —
(1) *Approved surety company or bonds or notes of the United States.* For purposes of [paragraph (a)](/current/title-27/section-70.281#p-70.281\(a\)) of this section, a bond shall be considered executed with satisfactory surety if:
(i) It is executed by a surety company holding a certificate of authority from the Secretary as an acceptable surety on Federal bonds; or
(ii) It is secured by bonds or notes of the United States as provided in by [31 U.S.C. 9303](https://www.govinfo.gov/link/uscode/31/9303).
(2) *Other surety.* Unless otherwise expressly provided in 26 U.S.C. or this part, a bond may, in the discretion of the appropriate TTB officer, be considered executed with satisfactory surety if, in lieu of being executed or secured as provided in [paragraph (b)(1)](/current/title-27/section-70.281#p-70.281\(b\)\(1\)) of this section, it is:
(i) Executed by a corporate surety (other than a surety company) provided such corporate surety establishes that it is within its corporate powers to act as surety for another corporation or an individual;
(ii) Executed by two or more individual sureties, provided such individual sureties meet the conditions contained in [paragraph (b)(3)](/current/title-27/section-70.281#p-70.281\(b\)\(3\)) of this section;
(iii) Secured by a mortgage on real or personal property;
(iv) Secured by a certified, cashier's, or treasurer's check drawn on any bank or trust company incorporated under the laws of the United States or any State, Territory, or possession of the United States, or by a U.S. postal, bank, express or telegraph money order;
(v) Secured by corporate bonds or stocks, or by bonds issued by a State or political subdivision thereof, of recognized stability; or
(vi) Secured by any other acceptable collateral. Collateral shall be deposited with the appropriate TTB officer or, in that officer's discretion, with a responsible financial institution acting as escrow agent.
(3) *Conditions to be met by individual sureties.* If a bond is executed by two or more individual sureties, the following conditions must be met by each such individual surety:
(i) The surety must reside within the State in which the principal place of business or legal residence of the primary obligor is located;
(ii) The surety must have property subject to execution of a current market value, above all encumbrances, equal to at least the penalty of the bond;
(iii) All real property which the surety offers as security must be located in the State in which the principal place of business or legal residence of the primary obligor is located;
(iv) The surety must agree not to mortgage, or otherwise encumber, any property offered as security while the bond continues in effect without first securing the permission of the officer with whom the bond is filed; and
(v) The surety must file with the bond, and annually thereafter so long as the bond continues in effect, an affidavit as to the adequacy of the security, executed on the appropriate form furnished by the appropriate TTB officer.
Partners may not act as sureties upon bonds of their partnership. Stockholders of a corporate principal may be accepted as sureties provided their qualifications as such are independent of their holdings of the stock of the corporation.
(4) *Adequacy of surety.* No surety or security shall be accepted if it does not adequately protect the interest of the United States.
([26 U.S.C. 7101](https://www.govinfo.gov/link/uscode/26/7101))
\[T.D. ATF-301, [55 FR 47649](https://www.federalregister.gov/citation/55-FR-47649), Nov. 14, 1990, as amended by T.D. ATF-450, [66 FR 29028](https://www.federalregister.gov/citation/66-FR-29028), May 29, 2001]
#### § 70.282 Single bond in lieu of multiple bonds.
In the case of bonds required under this part, a single bond will not be accepted in lieu of two or more bonds.
([26 U.S.C. 7102](https://www.govinfo.gov/link/uscode/26/7102))
\[T.D. ATF-301, [55 FR 47650](https://www.federalregister.gov/citation/55-FR-47650), Nov. 14, 1990]
### Miscellaneous Provisions
#### Source:
Sections 70.301 through 70.306 added by T.D. ATF-301, [55 FR 47650](https://www.federalregister.gov/citation/55-FR-47650), Nov. 14, 1990, unless otherwise noted.
#### § 70.301 Reproduction of returns and other documents.
(a) *In general.* The appropriate TTB officer may contract with any Federal agency or any person to have such agency or person process films and other photoimpressions of any return, statement, document, or of any card, record, or other matter required under the provisions of 26 U.S.C. enforced and administered by the Bureau, and make reproductions from such films and photoimpressions.
(b) *Safeguards* —
(1) *By private contractor.* Any person entering into a contract with the Bureau for the performance of any of the services described in [paragraph (a)](/current/title-27/section-70.301#p-70.301\(a\)) of this section shall agree to comply, and to assume responsibility for compliance by that person's employees, with the following requirements:
(i) The films or photoimpressions, and reproductions made therefrom, shall be used only for the purpose of carrying out the provisions of the contract, and information contained in such material shall be treated as confidential and shall not be divulged or made known in any manner to any person except as may be necessary in the performance of the contract;
(ii) All the services shall be performed under the supervision of the person with whom the contract is made or that person's responsible employees;
(iii) All material received for processing and all processed and reproduced material shall be kept in a locked and fireproof compartment in a secure place when not being worked upon;
(iv) All spoilage of reproductions made from the film or photoimpressions supplied to the contractor shall be destroyed, and a statement under the penalties of perjury shall be submitted to the Bureau that such destruction has been accomplished; and
(v) All film, photoimpressions, and reproductions made therefrom, shall be transmitted to the Bureau by personal delivery, first-class mail, parcel post, or express.
(2) *By Federal agency.* Any Federal agency entering into a contract with the Bureau for the performance of any services described in [paragraph (a)](/current/title-27/section-70.301#p-70.301\(a\)) of this section, shall treat as confidential all material processed or reproduced pursuant to such contract.
(3) *Inspection.* The Bureau shall have the right to send its officers and employees into the office and plants of Federal agencies and other contractors for inspection of the facilities and operations provided for the performance of any work contracted or to be contracted for under this section.
(4) *Criminal sanctions.* For penalty provisions relating to the unauthorized use and disclosure of information in violation of the provisions of this section, *see* [26 U.S.C. 7213(c)](https://www.govinfo.gov/link/uscode/26/7213).
([26 U.S.C. 7513](https://www.govinfo.gov/link/uscode/26/7513))
#### § 70.302 Fees and costs for witnesses.
(a) *Introduction.* Title 26 U.S.C. 7610 provides that the Bureau may make payments to certain persons who are summoned to give information to the Bureau under [26 U.S.C. 7602](https://www.govinfo.gov/link/uscode/26/7602) and [§ 70.22 of this part](/current/title-27/part-70/section-70.22). Under [26 U.S.C. 7610](https://www.govinfo.gov/link/uscode/26/7610) witnesses generally will not be reimbursed for actual expenses incurred but instead will be paid in accordance with the payment rates established by regulations. [Paragraph (b)](/current/title-27/section-70.302#p-70.302\(b\)) of this section contains elaborations of certain terms found in [26 U.S.C. 7610](https://www.govinfo.gov/link/uscode/26/7610) and definitions of other terms used in the regulations under [26 U.S.C. 7610](https://www.govinfo.gov/link/uscode/26/7610) (a) and (b); and [paragraphs (c)](/current/title-27/section-70.302#p-70.302\(c\)) and [(d)](/current/title-27/section-70.302#p-70.302\(d\)) of this section contain rules and rates applicable to payments under [26 U.S.C. 7610](https://www.govinfo.gov/link/uscode/26/7610).
(b) *Definitions* —
(1) *Directly incurred costs.* Directly incurred costs are costs incurred solely, immediately, and necessarily as a consequence of searching for, reproducing, or transporting records in order to comply with a summons. They do not include a proportionate allocation of fixed costs, such as overhead, equipment depreciation, etc. However, where a third party's records are stored at an independent storage facility that charges the third party a search fee to search for, reproduce, or transport particular records requested, these fees are considered to be directly incurred by the summoned third party.
(2) *Reproduction cost.* Reproduction costs are costs incurred in making copies or duplicates of summoned documents, transcripts, and other similar material.
(3) *Search costs.* Search costs include only the total cost of personnel time directly incurred in searching for records or information and the cost of retrieving information stored by computer. Salaries of persons locating and retrieving summoned material are not included in search costs. Also, search costs do not include salaries, fees, or similar expenditures for analysis of material or for managerial or legal advice, expertise, or research, or time spent for these activities.
(4) *Third party.* A third party is any person served with a summons, other than a person with respect to whose liability a summons is issued, or an officer, employee, agent, accountant, or attorney of that person.
(5) *Third party records.* Third party records are books, papers, records, or other data in which the person with respect to whose liability a summons is issued does not have a proprietary interest at the time the summons is served.
(6) *Transportation costs.* Transportation costs include only costs incurred to transport personnel to search for records or information requested and costs incurred solely by the need to transport the summoned material to the place of examination. These costs do not include the cost of transporting the summoned witness for appearance at the place of examination. See [paragraph (c)(2)](/current/title-27/section-70.302#p-70.302\(c\)\(2\)) of this section for payment of travel expenses.
(c) *Conditions and rates of payments* —
(1) *Basis for payment.* Payment for search, reproduction, and transportation costs will be made only to third parties served with a summons to produce third party records or information and only for material requested by the summons. Payment will be made only for those costs both directly incurred and reasonably necessary. No payment will be made until the third party has satisfactorily complied with the summons and has submitted an itemized bill or invoice showing specific details concerning the costs to the Bureau employee before whom the third party was summoned. If a third party charges any other person for any cost for which the third party is seeking payment from the Bureau, the amount charged to the other person must be subtracted from the amount the Bureau must pay.
(2) *Payment rates.* The following rates are established.
(i) *Search costs.*
(A) For the total amount of personnel time required to locate records or information, \$8.50 per person hour.
(B) For retrieval of information stored by computer in the format in which it is normally produced, actual costs, based on computer time and necessary supplies, except that personnel time for computer search is payable only under [paragraph (c)(2)(i)(A)](/current/title-27/section-70.302#p-70.302\(c\)\(2\)\(i\)\(A\)) of this section.
(ii) *Reproduction costs.*
(A) For copies of documents \$.20 per page.
(B) For photographers, films and other materials, actual cost, except that personnel time is payable only under [paragraph (a)(2)(i)(A)](/current/title-27/section-70.302#p-70.302\(a\)\(2\)\(i\)\(A\)) of this section.
(iii) *Transportation costs.* For transportation costs, actual cost, except that personnel time is payable only under [paragraph (c)(2)(i)(A)](/current/title-27/section-70.302#p-70.302\(c\)\(2\)\(i\)\(A\)) of this section.
(d) *Appearance fees and allowances* —
(1) *In general.* Under [26 U.S.C. 7610(a)(1)](https://www.govinfo.gov/link/uscode/26/7610) and this paragraph, the Bureau shall pay a summoned person certain fees and allowances. No payments will be made until after the party summoned appears and has submitted any necessary receipts or other evidence of costs to the Bureau employee before whom the person was summoned.
(2) *Attendance fees.* A summoned person shall be paid an attendance fee for each day's attendance. A summoned person shall also be paid the attendance fee for the time necessarily occupied in going to and returning from the place of attendance at the beginning and end of the attendance or at any time during the attendance. The attendance fee is the higher of \$30 per day or the amount paid under [28 U.S.C. 1821(b)](https://www.govinfo.gov/link/uscode/28/1821) to witnesses in attendance at courts of the United States at the time of the summoned person's appearance.
(3) *Travel allowances.* A summoned person who travels by common carrier shall be paid for the actual expenses of travel on the basis of the means of transportation reasonably utilized and the distance necessarily traveled to and from the summoned person's residence by the shortest practical route in going to and returning from the place of attendance. Such a summoned person shall utilize a common carrier at the most economical rate reasonably available. A receipt or other evidence of actual cost shall be furnished. A travel allowance equal to the mileage allowance which the Administrator of General Services has prescribed, under [5 U.S.C. 5704](https://www.govinfo.gov/link/uscode/5/5704), for official travel of employees of the Federal Government shall be paid to each summoned person who travels by privately owned vehicle. Computation of mileage under this paragraph shall be made on the basis of a uniform table of distances adopted by the Administrator of General Services. Toll charges for toll roads, bridges, tunnels and ferries, taxicab fares between places of lodging and carrier terminals, and parking fees (upon presentation of a valid parking receipt) shall be paid in full to a summoned person incurring those expenses.
(4) *Subsistence allowances.* A subsistence allowance shall be paid to a summoned person (other than a summoned person who is incarcerated) when an overnight stay is required at the place of attendance because the place is so far removed from the residence of the summoned person as to prohibit return thereto from day to day. A subsistence allowance for a summoned person shall be paid in an amount not to exceed the maximum allowance prescribed by the Administrator of General Services, under [5 U.S.C. 5702(a)](https://www.govinfo.gov/link/uscode/5/5702), for official travel in the area of attendance by employees of the Federal Government. An alien who has been paroled into the United States by the Attorney General, under [8 U.S.C. 1182(d)(5)(A)](https://www.govinfo.gov/link/uscode/8/1182), or an alien who either has admitted belonging to a class of aliens who are deportable or has been determined under [8 U.S.C. 1252(b)](https://www.govinfo.gov/link/uscode/8/1252) to be deportable, shall be ineligible to receive the fees or allowances provided for under [26 U.S.C. 7610(a)(1)](https://www.govinfo.gov/link/uscode/26/7610).
([26 U.S.C. 7610](https://www.govinfo.gov/link/uscode/26/7610))
#### § 70.303 Rules and regulations.
(a) *Issuance.* The Administrator, with the approval of the Secretary, shall prescribe all needful rules and regulations for the enforcement of provisions of 26 U.S.C. enforced and administered by the Bureau (except where this authority is expressly given by 26 U.S.C. to any other person other than an officer or employee of the Treasury Department), including all rules and regulations as may be necessary by reason of any alteration of law in relation to taxes within the Administrator's jurisdiction.
(b) *Retroactivity.* The Administrator, with the approval of the Secretary, may prescribe the extent, if any, to which any regulation or Treasury decision relating to the laws within the Administrator's jurisdiction shall be applied without retroactive effect. The Administrator may prescribe the extent, if any, to which any ruling relating to the laws within the Administrator's jurisdiction, issued by or pursuant to authorization from the Administrator, shall be applied without retroactive effect.
(c) *Preparation and distribution of regulations, forms, stamps, and other matters.* The Administrator, under the direction of the Secretary, shall prepare and distribute all the instructions, regulations, directions, forms, blanks, stamps, and other matters pertaining to the assessment and collection of taxes within the Administrator's jurisdiction.
([26 U.S.C. 7805](https://www.govinfo.gov/link/uscode/26/7805))
#### § 70.304 Place for filing documents other than returns.
(a) If a document, other than a return, is required to be filed with a TTB office, such document may be hand delivered to such office.
(b) For purposes of this section, a return or document will be considered to be hand carried if it is brought to a TTB supervisor of the TTB office by the person required to file the return or other document, or by the person's agent. Examples of persons who will be considered to be agents, for purposes of the preceding sentence, are: Members of the taxpayer's family, an employee of the taxpayer, the taxpayer's attorney, accountant, or tax advisor, and messengers employed by the taxpayer. A return or document will not be considered to be hand carried if it is sent to the Bureau through the U.S. Mail.
([26 U.S.C. 6091](https://www.govinfo.gov/link/uscode/26/6091))
\[T.D. ATF-305, [55 FR 47650](https://www.federalregister.gov/citation/55-FR-47650), Nov. 14, 1990, as amended by T.D. ATF-450, [66 FR 29028](https://www.federalregister.gov/citation/66-FR-29028), May 29, 2001]
#### § 70.305 Timely mailing treated as timely filing.
(a) *General rule.* Title 26 U.S.C. 7502 provides that, if the requirements of such section are met, a document shall be deemed to be filed on the date of the postmark stamped on the cover in which such document was mailed. Thus, if the cover containing such document bears a timely postmark, the document will be considered filed timely although it is received after the last date, or the last day of the period, prescribed for filing such document. Title 26 U.S.C. 7502 is applicable only to those documents which come within the definition of such term provided by [paragraph (b)](/current/title-27/section-70.305#p-70.305\(b\)) of this section and only if the document is mailed in accordance with [paragraph (c)](/current/title-27/section-70.305#p-70.305\(c\)) of this section and is delivered in accordance with [paragraph (d)](/current/title-27/section-70.305#p-70.305\(d\)) of this section.
(b) *Document defined.* The term *document,* as used in this section, means any return, claim, statement, or other document required to be filed within a prescribed period or on or before a prescribed date under authority of any provisions of 26 U.S.C. enforced and administered by the Bureau.
(c) *Mailing requirements.*
(1) Title 26 U.S.C. 7502 is not applicable unless the document is mailed in accordance with the following requirements:
(i) The document must be contained in an envelope or other appropriate wrapper, properly addressed to the agency, officer, or office with which the document is required to be filed.
(ii) The document must be deposited within the prescribed time in the mail in the United States with sufficient postage prepaid. For this purpose, a document is deposited in the mail in the United States when it is deposited with the domestic mail service of the U.S. Postal Service, as defined by the postal regulations ([39 CFR Part 2](/current/title-39/part-2)). Title 26 U.S.C. 7502 does not apply to any document which is deposited with the mail service of any other country.
(iii)
(A) If the postmark on the envelope or wrapper is made by the U.S. Postal Service, such postmark must bear a date on or before the last date, or the last day of the period, prescribed for filing the document. If the postmark does not bear a date on or before the last date, or the last day of the period, prescribed for filing the document, the document will be considered not to be filed timely, regardless of when the document is deposited in the mail. Accordingly, the sender who relies upon the applicability of [26 U.S.C. 7502](https://www.govinfo.gov/link/uscode/26/7502) assumes the risk that the postmark will bear a date on or before the last date, or the last day of the period, prescribed for filing the document, but see [paragraph (c)(2)](/current/title-27/section-70.305#p-70.305\(c\)\(2\)) of this section, with respect to the use of registered mail or certified mail to avoid this risk. If the postmark on the envelope or wrapper is not legible, the person who is required to file the document has the burden of proving the time when the postmark was made. Furthermore, in case the cover containing a document bearing a timely postmark made by the U.S. Postal Service is received after the time when a document postmarked and mailed at such time would ordinarily be received, the sender may be required to prove that it was timely mailed.
(B) If the postmark on the envelope or wrapper is made other than by the U.S. Postal Service, the postmark so made must bear a date on or before the last date, or the last day of the period, prescribed for filing the document, and the document must be received by the agency, officer, or office with which it is required to be filed not later than the time when a document contained in an envelope or other appropriate wrapper which is properly addressed and mailed and sent by the same class of mail would ordinarily be received if it were postmarked at the same point of origin by the U.S. Postal Service on the last date, or the last day of the period, prescribed for filing the document. However, in case the document is received after the time when a document so mailed and so postmarked by the U.S. Postal Service would ordinarily be received, such document will be treated as having been received at the time when a document so mailed and so postmarked would ordinarily be received, if the person who is required to file the document establishes that it was actually deposited in the mail before the last collection of the mail from the place of deposit which was postmarked (except for the metered mail) by the U.S. Postal Service on or before the last date, or the last day of the period, prescribed for filing the document, that the delay in receiving the document was due to a delay in the transmission of the mail, and the cause of such delay. If the envelope has a postmark made by the U.S. Postal Service in addition to the postmark not so made, the postmark which was not made by the U.S. Postal Service shall be disregarded, and whether the envelope was mailed in accordance with this section shall be determined solely by applying the rules of [paragraph (c)(1)(iii)(A)](/current/title-27/section-70.305#p-70.305\(c\)\(1\)\(iii\)\(A\)) of this section.
(2) If the document is sent by U.S. registered mail, the date of registration of the document shall be treated as the postmark date. If the document is sent by U.S. certified mail and the sender's receipt is postmarked by the postal employee to whom such document is presented, the date of the U.S. postmark on such receipt shall be treated as the postmark date of the document. Accordingly, the risk that the document will not be postmarked on the day that it is deposited in the mail may be overcome by the use of registered mail or certified mail.
(3) As used in this section, the term “the last date, or the last day of the period, prescribed for filing the document” includes any extension of time granted for such filing. Except as provided in [26 U.S.C. 5061](https://www.govinfo.gov/link/uscode/26/5061) for the filing of returns and payment of a tax under 26 U.S.C. subtitle E, when the last date, or the last day of the period, prescribed for filing the document falls on a Saturday, Sunday, or legal holiday, [26 U.S.C. 7503](https://www.govinfo.gov/link/uscode/26/7503) is also applicable, so that, in applying the rules of this paragraph, the next succeeding day which is not a Saturday, Sunday, or legal holiday, shall be treated as the last date, or the last day of the period, prescribed for filing the document.
(d) *Delivery.*
(1) Title 26 U.S.C. 7502 is not applicable unless the document is delivered by U.S. mail to the agency, officer, or office with which it is required to be filed. However, if the document is sent by registered mail or certified mail, proof that the document was properly registered or that a postmarked certified mail sender's receipt was properly issued therefor, and that the envelope or wrapper was properly addressed to such agency, officer or office shall constitute prima facie evidence that the document was delivered to such agency, officer or office.
(2) Title 26 U.S.C. 7502 is applicable only when the document is delivered after the last date, or the last day of the period, prescribed for filing the document.
(e) *Exceptions.* This section shall not apply with respect to:
(1) The filing of a document in, or the making of a payment to, any court,
(2) Currency or other medium of payment unless actually received and accounted for, or
(3) Returns, claims, statements, or other documents, or payments, which are required under any provision of 26 U.S.C. enforced and administered by the Bureau or the regulations thereunder to be delivered by any method other than by mailing.
([26 U.S.C. 5061](https://www.govinfo.gov/link/uscode/26/5061) and [7503](https://www.govinfo.gov/link/uscode/26/7503))
#### § 70.306 Time for performance of acts other than payment of tax or filing of any return when the last day falls on Saturday, Sunday, or legal holiday.
(a) *In general.* Title 26 U.S.C. 7503 provides that when the last day prescribed under provisions of 26 U.S.C. enforced and administered by the Bureau, for the performance of any act falls on a Saturday, Sunday, or legal holiday, such act shall be considered performed timely if performed on the next succeeding day which is not a Saturday, Sunday, or legal holiday. For this purpose, any authorized extension of time shall be included in the determining of the last day for performance of any act. Title 26 U.S.C. 7503 is not applicable to the filing of returns and payment of tax under 26 U.S.C. subtitle E. Title 26 U.S.C. 7503 is applicable only in case an act is required under authority of any provisions of 26 U.S.C. enforced and administered by the Bureau to be performed on or before a prescribed date or within a prescribed period. Title 26 U.S.C. 7503 applies to acts to be performed by the taxpayer (such as the filing of a claim for credit or refund of tax) and acts to be performed by the appropriate TTB officer, (such as, the giving of any notice with respect to, or making any demand for the payment of, any tax; the assessment or collection of any tax). For rules concerning the payment of any tax or the filing of any return required under the authority of [26 U.S.C. 4181](https://www.govinfo.gov/link/uscode/26/4181) and [4182](https://www.govinfo.gov/link/uscode/26/4182) relating to firearms and ammunition or subtitle E relating to alcohol, tobacco products, and cigarette papers and tubes, see [26 U.S.C. 5061](https://www.govinfo.gov/link/uscode/26/5061), [5703](https://www.govinfo.gov/link/uscode/26/5703), and [6302](https://www.govinfo.gov/link/uscode/26/6302) and the regulations covering the specific commodity.
(b) *Legal holidays.*
(1) For the purpose of [26 U.S.C. 7503](https://www.govinfo.gov/link/uscode/26/7503), the term “legal holiday” includes the legal holidays in the District of Columbia. Such legal holidays found in [5 U.S.C. 6103(a)](https://www.govinfo.gov/link/uscode/5/6103), as enacted and made effective by the Act of November 2, 1983 (97 Stat. 917), are:
(i) January 1, New Year's Day,
(ii) Third Monday in January, Birthday of Martin Luther King, Jr.,
(iii) January 20, when such day is Inauguration Day,
(iv) Third Monday in February, Washington's Birthday,
(v) Last Monday in May, Memorial Day,
(vi) July 4, Independence Day,
(vii) First Monday in September, Labor Day,
(viii) Second Monday in October, Columbus Day,
(ix) November 11, Veterans' Day,
(x) Fourth Thursday in November, Thanksgiving Day, and
(xi) December 25, Christmas Day.
When a legal holiday in the District of Columbia falls on a Sunday, the next day is a legal holiday in the District of Columbia. For the purpose of [26 U.S.C. 7503](https://www.govinfo.gov/link/uscode/26/7503), when a legal holiday in the District of Columbia (other than Inauguration Day) falls on a Saturday it shall be treated as falling on the preceding Friday.
(2) In the case of any statement or other document required to be filed, or any other act required under the authority of provisions of 26 U.S.C. enforced and administered by the Bureau to be performed at any office of the Bureau or any other office or agency of the United States, located outside the District of Columbia, the term “legal holiday” includes, in addition to the legal holidays enumerated in [paragraph (b)(1)](/current/title-27/section-70.306#p-70.306\(b\)\(1\)) of this section, any statewide legal holiday of the State where the act is required to be performed. If the act is performed in accordance with law at an office of the Bureau or any other office or agency of the United States located in a Territory or possession of the United States, the term “legal holiday” includes, in addition to the legal holidays described in [paragraph (b)(1)](/current/title-27/section-70.306#p-70.306\(b\)\(1\)) of this section, any legal holiday which is recognized throughout the Territory or possession in which the office is located.
([26 U.S.C. 5061](https://www.govinfo.gov/link/uscode/26/5061) and [7503](https://www.govinfo.gov/link/uscode/26/7503))
\[T.D. ATF-6, [38 FR 32445](https://www.federalregister.gov/citation/38-FR-32445), Nov. 26, 1973, as amended by T.D. ATF-365, [60 FR 33674](https://www.federalregister.gov/citation/60-FR-33674), June 28, 1995; T.D. ATF-450, [66 FR 29028](https://www.federalregister.gov/citation/66-FR-29028), May 29, 2001; T.D. TTB-89, [76 FR 3515](https://www.federalregister.gov/citation/76-FR-3515), Jan. 20, 2011; T.D. TTB-91, [76 FR 5481](https://www.federalregister.gov/citation/76-FR-5481), Feb. 1, 2011]
### General Provisions Relating to Stamps, Marks or Labels
#### § 70.311 Authority for establishment, alteration, and distribution of stamps, marks, or labels.
The appropriate TTB officer may establish, and from time to time alter, renew, replace, or change the form, style, character, material, and device of any stamp, mark, or label under any provision of the law relating to Subtitle E of the Internal Revenue Code (or to any provision of Subtitle F which relates to Subtitle E).
([26 U.S.C. 6801](https://www.govinfo.gov/link/uscode/26/6801))
\[T.D. ATF-251, [52 FR 19314](https://www.federalregister.gov/citation/52-FR-19314), May 22, 1987. Redesignated by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), Nov. 14, 1990]
### Registration
#### § 70.321 Registration of persons paying a special tax.
(a) *Persons required to register.* Every person engaged in a trade or business in respect of which a special tax is imposed by one of the following sections of the Internal Revenue Code is required to register with the Alcohol and Tobacco Tax and Trade Bureau.
(1)-(5) \[Reserved]
(6) Section 5731 (relating to special tax on manufacturers of tobacco products, manufacturers of cigarette papers and tubes, and export warehouse proprietors); or
(7) Section 5802 (relating to importers, manufacturers and dealers of National Firearms Act weapons).
(b) *Procedure for registration.* The registration required of a person by reason of the person being engaged in a trade or business, in respect of which one of the special taxes listed in [paragraph (a)](/current/title-27/section-70.321#p-70.321\(a\)) of this section is imposed, shall be accomplished by timely executing and filing, in accordance with the instructions relating thereto, TTB Form 5630.5, Special Tax Registration and Return.
([26 U.S.C. 5802](https://www.govinfo.gov/link/uscode/26/5802), [7011](https://www.govinfo.gov/link/uscode/26/7011))
\[T.D. ATF-6, [38 FR 32445](https://www.federalregister.gov/citation/38-FR-32445), Nov. 26, 1973, as amended by T.D. ATF-271, [53 FR 17549](https://www.federalregister.gov/citation/53-FR-17549), May 17, 1988. Redesignated and amended by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), [47653](https://www.federalregister.gov/citation/55-FR-47653), Nov. 14, 1990; T.D. ATF-379, [61 FR 31426](https://www.federalregister.gov/citation/61-FR-31426), June 20, 1996; T.D. TTB-79, [74 FR 37424](https://www.federalregister.gov/citation/74-FR-37424), July 28, 2009]
### Crimes, Other Offenses and Forfeitures
#### Source:
Sections 70.331 through 70.333 added by T.D. ATF-301, [55 FR 47653](https://www.federalregister.gov/citation/55-FR-47653), Nov. 14, 1990, unless otherwise noted.
#### § 70.331 Fraudulent returns, statements, or other documents.
Any person who willfully delivers or discloses to any officer or employee of the Bureau any list, return, account, statement, or other document, known by him to be fraudulent or to be false as to any material matter, shall be fined not more than $10,000 ($50,000 in the case of a corporation) or imprisoned not more than 1 year, or both.
([26 U.S.C. 7207](https://www.govinfo.gov/link/uscode/26/7207))
#### § 70.332 Unauthorized use or sale of stamps.
Any person who buys, sells, offers for sale, uses, transfers, takes or gives in exchange, or pledges or gives in pledge, except as authorized in the Internal Revenue Code or in regulations made pursuant thereto, any stamp, coupon, ticket, book, or other device prescribed by the Administrator under provisions of 26 U.S.C. enforced and administered by the Bureau for the collection or payment of any tax imposed thereunder, shall, upon conviction thereof, be fined not more than \$1,000, or imprisoned not more than 6 months, or both.
([26 U.S.C. 7209](https://www.govinfo.gov/link/uscode/26/7209))
#### § 70.333 Offenses by officers and employees of the United States.
Any officer or employee of the United States acting in connection with any provisions of 26 U.S.C. enforced and administered by the Bureau required to make a written report under the provisions of [26 U.S.C. 7214(a)(8)](https://www.govinfo.gov/link/uscode/26/7214) shall submit such report to the appropriate TTB officer.
([26 U.S.C. 7214](https://www.govinfo.gov/link/uscode/26/7214))
\[T.D. ATF-301, [55 FR 47653](https://www.federalregister.gov/citation/55-FR-47653), Nov. 14, 1990, as amended by T.D. ATF-450, [66 FR 29028](https://www.federalregister.gov/citation/66-FR-29028), May 29, 2001]
## Subpart E—Procedural Rules Relating to Alcohol, Tobacco, Firearms, and Explosives
#### Source:
T.D. ATF-251, [52 FR 19325](https://www.federalregister.gov/citation/52-FR-19325), May 22, 1987, unless otherwise noted. Redesignated by T.D. ATF-301, [55 FR 47653](https://www.federalregister.gov/citation/55-FR-47653), Nov. 14, 1990.
### Provisions Relating to Distilled Spirits, Wines, and Beer
#### § 70.411 Imposition of taxes, qualification requirements, and regulations.
(a) *Imposition of taxes.* Subchapter A of Chapter 51 of the IRC imposes taxes on distilled spirits (including alcohol), wine and beer.
(b) *Qualification requirements.* Distillers, winemakers, brewers, warehousemen, rectifiers, bottlers, dealers in specially denatured alcohol, users of tax-free and specially denatured alcohol, and wholesalers and importers of liquors, are required to qualify with TTB usually by filing notice or application and bond with, and procuring permit from, the appropriate TTB officer. Dealers in alcohol products fit for beverage use and manufacturers of nonbeverage products who claim drawback under section 5114 of the Internal Revenue Code must register. Detailed information respecting such qualification and registration, including the forms to be used and the procedure to be followed, is contained in the respective regulations described in [paragraph (c)](/current/title-27/section-70.411#p-70.411\(c\)) of this section.
(c) *Regulations.* The procedural requirements with respect to matters relating to distilled spirits, wines, and beer which are within the jurisdiction of TTB are published in the regulations described in this paragraph. These regulations contain full information as to the general course and method by which the functions concerning liquors are channeled and determined, including the nature and requirements of formal and informal procedures, the forms, records, reports, and other documents required, and the contents of applications, notices, registrations, permits, bonds, and other documents. Forms prescribed by this part are available as provided in [§ 70.2(b)](/current/title-27/section-70.2#p-70.2\(b\)). The following is a brief description of the several regulations arranged according to the principal subjects and operations concerned:
(1) *Establishment and operation of distilled spirits plants.* [Part 19 of title 27 CFR](/current/title-27/part-19) contains the regulations relating to the location, qualification, construction, arrangement, equipment, and operations (including activities incident thereto) of distilled spirits plants for the production and/or warehousing (including denaturation), and bottling (including bottling in bond) of distilled spirits. Part 19 also contains the regulations relating to distilled spirits for fuel use and the production of vinegar by the vaporizing process.
(2) *Miscellaneous liquor transactions.* Part 29 of 27 CFR contains miscellaneous regulations relative to the manufacture, removal, and use of stills and condensers, and to the notice, registration, and recordkeeping requirements therefor.
(3) \[Reserved]
(4) *Gauging of distilled spirits.* [Part 30 of title 27 CFR](/current/title-27/part-30) contains the regulations that prescribe the gauging instruments, and methods or techniques to be used in measuring distilled spirits (including denatured spirits). Tables are provided for use in making the necessary computation from gauge data.
(5) *Rules of practice in permit proceedings.* [Part 71 of title 27 CFR](/current/title-27/part-71) contains the rules governing the procedure and practice in connection with the disapproval of applications for basic permits, and for the issuance of citations for the suspension, revocation, and annulment of such permits under sections 3 and 4 of the Federal Alcohol Administration Act ([27 U.S.C. 201](https://www.govinfo.gov/link/uscode/27/201) *et seq.*), and disapproval, suspension, and revocation of industrial use, operating, withdrawal, and tobacco permits under the Internal Revenue Code. Such rules also govern, insofar as applicable, any adversary proceeding involving adjudication required by statute to oe determined on the record, after opportunity for hearing, under laws administered by the Alcohol and Tobacco Tax and Trade Bureau.
(6) *Basic permit requirements under the Federal Alcohol Administration Act.* [27 CFR part 1, subpart C](/current/title-27/part-1/subpart-C), issued pursuant to the Federal Alcohol Administration Act, as amended, contains the requirements relative to the issuance under the Act of basic permits to producers, rectifiers, blenders, bottlers, warehousemen, importers, and wholesalers of distilled spirits, wine, or beer, and the amendment, duration, revocation, suspension, or annulment of such permits.
(7) *Bulk sales and bottling of distilled spirits.* [27 CFR part 1, subpart E](/current/title-27/part-1/subpart-E), issued under the Federal Alcohol Administration Act, as amended, contains the requirements relative to bulk sales and bottling of distilled spirits under the Federal Alcohol Administration Act, including the terms of warehouse receipts for distilled spirits in bulk.
(8) *Labeling and advertising of distilled spirits.* [27 CFR part 5](/current/title-27/part-5), issued under the Federal Alcohol Administration Act, as amended, contains the requirements relative to the labeling and advertising of distilled spirits under the Federal Alcohol Administration Act, including standards of identity for distilled spirits, standards of fill for bottles of distilled spirits, withdrawal of bottled imported distilled spirits from customs custody, and the issuance of certificates of label approval and certificates of exemption from label approval.
(9) *American viticultural areas.* [Part 9 of title 27 CFR](/current/title-27/part-9) contains the regulations that relate to American viticultural areas. The viticultural areas described in these regulations are approved for use as appellations of origin in accordance with [27 CFR part 4](/current/title-27/part-4).
(10) *Production and removal of wine.* [Part 24 of title 27 CFR](/current/title-27/part-24) contains the regulations relative to the establishment and operation of bonded wine cellars, including bonded wineries, for the production, cellar treatment, and storage of wines, including amelioration, sweetening, addition of volatile fruit flavor concentrates, addition of wine spirits (including distillates containing aldehydes), blending, and other cellar treatment; removals; taxpayment; return of taxpaid wine; use of wine for distilling material and manufacture of vinegar; and record and report requirements.
(11) *Bottling or Packaging of taxpaid wine.* [Part 24 of title 27 CFR](/current/title-27/part-24) contains the regulations relative to the establishment, qualification, and operations of taxpaid wine bottling houses on premises other than those of a plant operated under [part 19 of title 27 CFR](/current/title-27/part-19), and to the bottling and packaging of taxpaid United States and foreign wines at such premises.
(12) *Nonindustrial use of distilled spirits and wine.* [27 CFR part 1, subpart D](/current/title-27/part-1/subpart-D), issued under the Federal Alcohol Administration Act, as amended, specifies what uses of distilled spirits and wine are considered “nonindustrial,” as that term is used in section 17 of the Federal Alcohol Administration Act.
(13) *Labeling and advertising of wine.* [27 CFR part 4](/current/title-27/part-4), issued under the Federal Alcohol Administration Act, as amended, contains the requirements relative to the labeling and advertising of wine under the Federal Alcohol Administration Act, including standards of identity for wine, standards of fill for containers of wine, the withdrawal of imported wine from customs custody, and the issuance of certificates of label approval and certificates of exemption from label approval.
(14) *Establishment and operations of breweries and experimental breweries.* [Part 25 of title 27 CFR](/current/title-27/part-25) contains the regulations relating to the production (including concentration and reconstitution incident thereto) and removal of beer and cereal beverages. The regulations cover the location, construction, equipment, and operations of breweries; and the qualification of such establishments, including the ownership, control, and management thereof, and the establishment and operations of experimental breweries.
(15) *Labeling and advertising of malt beverages.* [27 CFR part 7](/current/title-27/part-7), issued under the Federal Alcohol Administration Act, as amended, contains the requirements relative to the labeling and advertising of malt beverages (beer) under the Federal Alcohol Administration Act, including withdrawal of imported malt beverages from customs custody, and the issuance of certificates of label approval.
(16) *Liquor dealers.* [Part 31 of title 27 CFR](/current/title-27/part-31) contains the regulations relative to the registration requirement imposed on wholesale and retail dealers in liquors and wholesale and retail dealers in beer; restrictions on purchases of distilled spirits; reuse or refilling of liquor bottles; sale or possession of refilled or used liquor bottles; repackaging of alcohol for industrial use; recordkeeping and reporting requirements; and provisions relating to entry of premises and inspection of records.
(17) *Drawback of tax on spirits used in nonbeverage products.* [Part 17 of title 27 CFR](/current/title-27/part-17) contains the regulations which relate to obtaining drawback of internal revenue tax on distilled spirits used in the manufacture or production of medicines, medicinal preparations, food products, flavors, or flavoring extracts, which are unfit for beverage purposes.
(18) *Production of volatile fruit-flavor concentrates.* [Part 18 of title 27 CFR](/current/title-27/part-18) contains the regulations relating to the manufacture, removal, sale, storage, transfer in bond, transportation, recordkeeping and reporting requirements, and use of volatile fruit flavor concentrates. It includes provisions regarding the location, qualification, use, and operations of concentrate plants.
(19) *Tied-House.* [27 CFR part 6](/current/title-27/part-6), issued under the Federal Alcohol Administration Act, as amended, specifies practices which are prohibited by subsection (b) of section 5 of the Act and provides the exception to these prohibitions. This part applies only to transactions between industry members and retailers.
(20) *Exclusive outlets.* [27 CFR part 8](/current/title-27/part-8), issued under the Federal Alcohol Administration Act, as amended, specifies practices which are prohibited by subsection (a) of section 5 of the Act. This part applies only to transactions between industry members and retailers.
(21) *Commercial bribery.* [27 CFR part 10](/current/title-27/part-10), issued under the Federal Alcohol Administration Act, as amended, specifies practices which are prohibited by subsection (c) of section 5 of the Act. This part applies to transactions between industry members and employees, officers, or representatives of trade buyers.
(22) *Consignment sales.* [27 CFR part 11](/current/title-27/part-11), issued under the Federal Alcohol Administration Act, as amended, specifies sales arrangements prohibited by subsection (d) of section 5 of the Act and contains guidelines concerning the return of distilled spirits, wines, and malt beverages from a trade buyer. The regulations in this part apply to transactions between industry members and trade buyers.
(23) *Distribution and use of denatured alcohol and rum.* [Part 20 of title 27 CFR](/current/title-27/part-20) contains the regulations relating to the procurement, use, disposition, and recovery of denatured alcohol, specially denatured rum, and articles containing denatured spirits; and includes requirements in respect to industrial use and withdrawal permits; and the packaging, labeling, sales, rebottling, and reprocessing of articles containing specially denatured spirits.
(24) *Formulas for denatured alcohol and rum.* [Part 21 of title 27 CFR](/current/title-27/part-21) contains the regulations relating to the formulation of completely denatured alcohol, specially denatured alcohol, and specially denatured rum; to the use of specially denatured spirits; and to the specifications for denaturants. The procedural requirements relative to the production of denatured alcohol and specially denatured rum are prescribed in [part 19 of title 27 CFR](/current/title-27/part-19), and those relative to the distribution and use of denatured alcohol and specially denatured rum are prescribed in [part 20 of title 27 CFR](/current/title-27/part-20).
(25) *Distribution and use of tax-free alcohol.* [Part 22 of title 27 CFR](/current/title-27/part-22) contains the regulations relating to tax-free alcohol and covers the procurement, storage, use, and recovery of such alcohol; and included requirements in respect to industrial use and withdrawal permits.
(26) *Liquors and articles from Puerto Rico and the Virgin Islands.* [Part 26 of title 27 CFR](/current/title-27/part-26) contains the regulations relating to the production, bonded warehousing, and withdrawal of distilled spirits, and denatured spirits, and the manufacture of articles in Puerto Rico and the Virgin Islands to be brought into the United States free of tax and the collection of internal revenue taxes on taxable alcoholic products coming into the United States from Puerto Rico and the Virgin Islands. Regulations respecting spirits produced in Puerto Rico or the Virgin Islands and brought into the United States and transferred from customs custody to distilled spirits plants are also contained in this part.
(27) *Importation of liquors.* [Part 27 of title 27 CFR](/current/title-27/part-27) contains the substantive and procedural requirements relative to the importation of distilled spirits, wines, and beer into the United States from foreign countries including commodity taxes, permits, marking, branding, and labeling of containers and packages.
(28) *Exportation of liquors.* [Part 28 of title 27 CFR](/current/title-27/part-28) contains the regulations relating to exportation including, where applicable, lading for use on vessels and aircraft, transfer to a foreign-trade zone, or transfer to a manufacturing bonded warehouse, Class 6, of distilled spirits (including specially denatured spirits), beer (including beer concentrate), and wine, and transfer of distilled spirits and wine for deposit in a customs bonded warehouse, whether without payment of tax, free of tax, or with benefit of drawback. It includes requirements with respect to removal, shipment, lading, deposit, evidence of exportation, losses, claims, and bonds.
\[T.D. ATF-251, [52 FR 19325](https://www.federalregister.gov/citation/52-FR-19325), May 22, 1987]
#### Editorial Note:
For Federal Register citations affecting [§ 70.411](/current/title-27/section-70.411), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
#### § 70.412 Excise taxes.
(a) *Collection.* Taxes on distilled spirits, wines, and beer are paid by returns. Depending on the circumstances, the person responsible for paying the taxes may be eligible to file semimonthly, quarterly, or annual returns, with proper remittances, to cover the taxes incurred on distilled spirits, wines, and beer during the semimonthly, quarterly, or annual period. Payment must accompany the return unless required to be made by electronic fund transfer (EFT). If the taxpayer is not qualified to defer taxpayment, or has been placed on a prepayment basis, the taxpayer must prepay the tax on the distilled spirits, wines, or beer. Distilled spirits, wines, and beer tax returns are filed in accordance with the instruction on the return forms, which are furnished to industry members by TTB. Detailed information respecting the payment of tax on liquors, including the forms to be used and procedures to be followed, is contained in the respective regulations described in [§ 70.411(c)](/current/title-27/section-70.411#p-70.411\(c\)).
(b) *Assessment.* If additional or delinquent tax liability is disclosed by an investigation, or by an examination of records, of a qualified plant or permittee, a notice (except where delay may jeopardize collection of the tax, or where the amount involved is nominal or the result of an evident mathematical error) is sent to the taxpayer advising of the basis and amount of the liability and affording the taxpayer an opportunity to submit a protest, with supporting facts, or to request a conference.
\[T.D. ATF-251, [52 FR 19325](https://www.federalregister.gov/citation/52-FR-19325), May 22, 1987, as amended by T.D. ATF-271, [53 FR 17549](https://www.federalregister.gov/citation/53-FR-17549), May 17, 1988. Redesignated and amended by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), [47653](https://www.federalregister.gov/citation/55-FR-47653), Nov. 14, 1990; T.D. ATF-450, [66 FR 29028](https://www.federalregister.gov/citation/66-FR-29028), May 29, 2001; T.D. TTB-41, [71 FR 5605](https://www.federalregister.gov/citation/71-FR-5605), Feb. 2, 2006; T.D. TTB-79, [74 FR 37424](https://www.federalregister.gov/citation/74-FR-37424), July 28, 2009; T.D. TTB-89, [76 FR 3515](https://www.federalregister.gov/citation/76-FR-3515), Jan. 20, 2011; T.D. TTB-159, [85 FR 33542](https://www.federalregister.gov/citation/85-FR-33542), June 2, 2020]
#### § 70.413 Claims.
(a) *Claims for remission.* When distilled spirits (including distilling material and denatured spirits), wine, or beer on which the tax has not been paid or determined is lost, and the person liable for payment of the tax thereon desires to be relieved from such liability, such person may file claim on Form 5620.8 for remission of tax on the quantity that was lost. The appropriate TTB officer may, in any event, require such a claim to be filed, and will require it if circumstances indicate that the loss was caused by theft or, in the case of distilled spirits (including distilling material), unauthorized voluntary destruction. On receipt of a claim the appropriate TTB officer makes a factual determination, and notifies the claimant of allowance or rejection of the claim. If the claim is rejected, and circumstances so warrant, the appropriate TTB officer will take appropriate steps to collect the tax.
(b) *Claims for abatement.* When the tax on distilled spirits, wines, or beer is assessed and the taxpayer thinks that the tax is not due under the law, such taxpayer may file a claim for abatement of the tax on TTB Form 5620.8 with the officer who made demand for the tax. Such officer may call upon the taxpayer to file a bond in double the amount of the tax in order to insure collection of the tax if the claim is rejected. When the claim is acted upon, the taxpayer is notified of the allowance or rejection of the claim. If the claim is rejected, such officer, will initiate action to collect the tax.
(c) *Claims for refund* —
(1) *Taxes illegally, erroneously, or excessively collected.* A claim for refund of taxes illegally, erroneously, or excessively collected may be filed by the taxpayer with the officer who collected the tax. Such claim must be filed within three years (two years under certain circumstances) after the date of payment of the tax. If the claim is rejected, the taxpayer is notified of the rejection by registered or certified mail, and the taxpayer may then bring suit in the U.S. District Court or the Court of Claims for recovery of the tax. Such suits must be filed generally within two years from the date of mailing of the rejection notice. If the claim is allowed, a check for the amount of the refund and allowable interest is forwarded to the taxpayer; however, if there are other unpaid taxes outstanding against the taxpayer, the overpayment may be applied to the outstanding taxes and the balance, if any, refunded.
(2) *Taxes on liquors lost, destroyed, returned to bond, or taken as samples by the United States.* A taxpayer may, subject to the conditions in the appropriate regulations, file claim on Form 5620.8 for refund of tax paid on:
(i) Spirits returned to bonded premises, lost by accident or disaster, or taken as samples by the United States, or
(ii) Wine returned to bond or lost by disaster, or
(iii) Beer returned to a brewery or voluntarily destroyed, or lost, whether by theft or otherwise, or destroyed or otherwise rendered unmerchantable by fire, casualty, or act of God. If the claim is allowed, a check for the amount of the refund is forwarded to the claimant; except, that where there are any unpaid taxes outstanding against the claimant, the refund may be applied to the outstanding taxes and a check for the balance, if any, forwarded to the claimant. If the claim is rejected, a copy of the claim giving the reasons for rejection is forwarded to the claimant.
(d) *Claims for allowance, credit, or relief.* A qualified permittee, manufacturer, or proprietor may, subject to the conditions in the appropriate regulations, file claim on Form 5620.8 for allowance of loss, credit of tax, or relief from tax liability, as applicable, on
(1) Spirits returned to bonded premises, lost or destroyed on bonded premises, or in transit thereto, or lost by accident or disaster;
(2) Wine lost or destroyed on bonded premises or in transit thereto and wine returned to bond;
(3) Beer returned to a brewery or voluntarily destroyed, or lost, whether by theft or otherwise, or destroyed or otherwise rendered unmerchantable by fire, casualty, or act of God;
(4) Denatured spirits lost or destroyed in bond, or lost on the premises of a qualified dealer or user or in transit to such premises; and
(5) Tax-free spirits lost on the premises of a qualified user or in transit to such premises.
(e) *Claims for payment-disaster losses.* When distilled spirits, wines, rectified products, or beer held or intended for sale is lost, rendered unmarketable, or condemned by a duly authorized official by reason of a “major disaster” as determined by the President of the United States, the person holding such product for sale at that time may, subject to the conditions in the appropriate regulations, file a claim on form TTB F 5620.8 for payment of an amount equal to the internal revenue taxes paid or determined and any customs duties paid thereon. Claims must be filed within 6 months from the date on which the President makes the determination that the disaster has occurred. The determination date is construed to mean the date the Director, Office of Emergency Preparedness, identifies the specific disaster area.
(Approved by the Office of Management and Budget under control number 1513-0030)
\[T.D. ATF-251, [52 FR 19325](https://www.federalregister.gov/citation/52-FR-19325), May 22, 1987. Redesignated and amended by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), [47653](https://www.federalregister.gov/citation/55-FR-47653), Nov. 14, 1990; T.D. ATF-450, [66 FR 29028](https://www.federalregister.gov/citation/66-FR-29028), May 29, 2001; T.D. TTB-91, [76 FR 5481](https://www.federalregister.gov/citation/76-FR-5481), Feb. 1, 2011; T.D. TTB-130, [80 FR 55249](https://www.federalregister.gov/citation/80-FR-55249), Sept. 15, 2015]
#### § 70.414 Preparation and filing of claims.
(a) *Distilled spirits at distilled spirits plants.* Procedural instructions in respect of claims for remission, abatement, credit, or refund of tax on spirits (including denatured spirits) lost or destroyed on or lost in transit to, or on spirits returned to, the premises of a distilled spirits plant are contained in [Part 19 of Title 27 CFR.](/current/title-27/part-19) It is not necessary to file a claim for credit of tax on taxpaid samples taken by appropriate TTB officers from distilled spirits plants, as the appropriate TTB officer will allow credit, without claim, for tax on such samples.
(b) *Specially denatured spirits.* Procedural instructions in respect of claims for allowance of loss on specially denatured spirits lost on the premises of a dealer or user, or while in transit to such premises, are contained in [part 20 of title 27 CFR](/current/title-27/part-20).
(c) *Tax-free alcohol.* Procedural instructions in respect of claims for allowance of loss on tax-free alcohol lost on the premises of a qualified user, or while in transit to such premises, are contained in [part 22 of title 27 CFR](/current/title-27/part-22).
(d) *Wine spirits and wine at bonded wine cellar.* Procedural instructions in respect of claims for:
(1) Remission of tax on wine spirits lost on the premises of a bonded wine cellar or in transit thereto,
(2) Allowance of losses of wine in bond, and
(3) Credit or refund of tax paid on wine returned to bond are contained in [part 24 of title 27 CFR](/current/title-27/part-24).
(e) *Beer.* Procedural instructions in respect of claims for refund or credit of tax which has been paid (or allowance, credit, or relief of tax liability if the tax has not been paid) on domestic beer returned to a brewery or voluntarily destroyed; or lost, whether by theft or otherwise, or destroyed or otherwise rendered unmerchantable by fire, casualty, or act of God are contained in [part 25 of title 27 CFR](/current/title-27/part-25).
(f) *Distilled spirits, wines, or beer for export.* Procedural instructions in respect of claims for:
(1) Drawback of internal revenue tax on distilled spirits, wines, or beer for export, use as supplies on certain vessels or aircraft, or deposit in a foreign-trade zone, or deposit of distilled spirits or wine in a customs bonded warehouse, and
(2) Remission of tax on distilled spirits, specially denatured spirits, wines, or beer, withdrawn without payment or free of tax and lost during transportation to the port of export, customs bonded warehouse (distilled spirits and wine only), manufacturing bonded warehouse, vessel or aircraft, or foreign-trade zone, as applicable, are contained in [part 28 of title 27 CFR.](/current/title-27/part-28) Procedural instructions as to claims respecting export with benefit of drawback of tax on domestic distilled spirits products containing spirits from Puerto Rico or the Virgin Islands are contained in parts 19 and 28 of [title 27 CFR](/current/title-27).
(g) *Miscellaneous.* Procedural instructions are contained in [27 CFR Part 70, subparts F](/current/title-27/part-70/subpart-F) and [G](/current/title-27/part-70/subpart-G) in respect of claims for—
(1) Refund or credit of tax on distilled spirits, wines or beer where such refund or credit is claimed on the grounds that tax was assessed or collected erroneously, illegally, without authority, or in any manner wrongfully, or on the grounds that such amount was excessive, and where such refund or credit is subject to the limitations imposed by section 6423 of the Internal Revenue Code.
(2) Payment of an amount equal to the internal revenue tax paid or determined and customs duties paid on distilled spirits, wines, rectified products, and beer previously withdrawn, which were lost, rendered unmarketable, or condemned by a duly authorized official by reason of a major disaster occurring in the United States after June 30, 1959.
(h) \[Reserved]
(i) *Low wines at vinegar plants.* Procedural instructions in respect of claims for remission of tax on low wines (distilled spirits) lost at vinegar plants producing vinegar by the vaporizing process are contained in [part 19 of title 27 CFR](/current/title-27/part-19).
(j) *Distilled spirits used in nonbeverage products.* Procedural instructions in respect of claims for drawback of excise tax, submitted by persons using distilled spirits in the manufacture of medicines, medicinal preparations, food products, flavors, flavoring extracts, or perfume, which are unfit for beverage purposes, are contained in [part 17 of title 27 CFR](/current/title-27/part-17).
(k) *Reopening claims.* A claimant who wishes to have a rejected claim reopened must, within the applicable statutory period of limitations, submit a written application to the officer who originally rejected the claim for reconsideration of the claim. Such application must show that the additional evidence to be presented is new and material, and that such evidence was unknown to the claimant, or unobtainable by the claimant, when the claim was previously under consideration.
(l) *Claimant's rights under law and regulations.* Before final action has been taken on a claim, a claimant who, by reason of an oversight, misunderstanding of law and regulations, miscalculation, or other cause, did not claim the full amount of abatement, refund, credit, or drawback, as the case may be, of tax to which the claimant is legitimately entitled, may amend a valid claim, and statements filed in support thereof, in instances where such a claim is deficient in establishing the claimants eligibility to the rights extended to such claimant under law and regulations.
\[T.D. ATF-251, [52 FR 19325](https://www.federalregister.gov/citation/52-FR-19325), May 22, 1987]
#### Editorial Note:
For Federal Register citations affecting [§ 70.414](/current/title-27/section-70.414), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
#### § 70.415 Offers in compromise.
Procedure in the case of offers in compromise of liabilities under [26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101) and of penalties for violation of the Federal Alcohol Administration Act, is set forth in [§§ 70.482](/current/title-27/section-70.482) through [70.484](/current/title-27/section-70.484).
\[T.D. ATF-301, [55 FR 47654](https://www.federalregister.gov/citation/55-FR-47654), Nov. 14, 1990]
#### § 70.416 Application for approval of interlocking directors and officers under section 8 of the Federal Alcohol Administration Act.
Any person who is an officer or director of a corporation now engaged in business as a distiller, rectifier, or blender of distilled spirits, or of an affiliate thereof, who desires to take office in other companies similarly engaged, must obtain permission to do so from the appropriate TTB officer. Applications for such permission to take office must be prepared and filed in accordance with instructions available from the appropriate TTB officer.
\[T.D. ATF-450, [66 FR 29029](https://www.federalregister.gov/citation/66-FR-29029), May 29, 2001]
#### § 70.417 Rulings.
The procedure for rulings in alcohol tax matters is set forth in [§ 70.471](/current/title-27/section-70.471).
\[T.D. ATF-301, [55 FR 47654](https://www.federalregister.gov/citation/55-FR-47654), Nov. 14, 1990]
#### § 70.418 Conferences.
Any person desiring a conference with TTB, relative to any matter arising in connection with such person's operations, will be accorded such a conference upon request. No formal requirements are prescribed for such conference.
\[T.D. ATF-450, [66 FR 29029](https://www.federalregister.gov/citation/66-FR-29029), May 29, 2001]
#### § 70.419 Representatives.
[Title 31 CFR](/current/title-31) part 8 is applicable to all representatives of the taxpayer, for any conference with TTB.
\[T.D. ATF-450, [66 FR 29029](https://www.federalregister.gov/citation/66-FR-29029), May 29, 2001]
#### § 70.420 Forms.
For forms to be used, *see* [§ 70.411(c)](/current/title-27/section-70.411#p-70.411\(c\)).
\[T.D. ATF-301, [55 FR 47654](https://www.federalregister.gov/citation/55-FR-47654), Nov. 14, 1990]
#### § 70.421 Alcohol dealer registration.
Every person who sells, or offers for sale, any alcohol product (distilled spirits, wines, or beer) fit for beverage use must register with the Alcohol and Tobacco Tax and Trade Bureau. The specific requirements are contained in the following regulations:
(a) For proprietors of distilled spirits plants, [parts 19](/current/title-27/part-19) and [31 of this chapter](/current/title-27/part-31);
(b) For bonded wineries, bonded wine cellars, bonded wine warehouses, and taxpaid wine bottling houses, [parts 24](/current/title-27/part-24) and [31 of this chapter](/current/title-27/part-31);
(c) For brewers, [parts 25](/current/title-27/part-25) and [31 of this chapter](/current/title-27/part-31);
(d) For persons bringing distilled spirits, wines, or beer from Puerto Rico and the Virgin Islands to the United States, [parts 26](/current/title-27/part-26) and [31 of this chapter](/current/title-27/part-31);
(e) For importers of distilled spirits, wines, or beer, [parts 27](/current/title-27/part-27) and [31 of this chapter](/current/title-27/part-31); and
(f) For wholesalers and retailers of distilled spirits, wines, or beer, [part 31 of this chapter](/current/title-27/part-31).
\[T.D. TTB-79, [74 FR 37424](https://www.federalregister.gov/citation/74-FR-37424), July 28, 2009]
#### § 70.422 Registration of manufacturers of nonbeverage products.
For provisions regarding the registration of persons claiming drawback on distilled spirits used in the manufacture of certain nonbeverage products, see [part 17 of this chapter](/current/title-27/part-17).
\[T.D. TTB-79, [74 FR 37424](https://www.federalregister.gov/citation/74-FR-37424), July 28, 2009]
### Provisions Relating to Tobacco Products, and Cigarette Papers and Tubes
#### § 70.431 Imposition of taxes; regulations.
(a) *Taxes.* Subchapter A of chapter 52 of the IRC imposes taxes on tobacco products, and cigarette papers and tubes manufactured in or imported into the United States. Occupational taxes are imposed by manufacturers of tobacco products, manufacturers of cigarette papers and tubes, and export warehouse proprietors. Subchapter D of chapter 78 of the Internal Revenue Code imposes a tax (equal to the internal revenue tax imposed in the United States upon the like articles of merchandise of domestic manufacture) on tobacco products, and cigarette papers and tubes of Puerto Rican and Virgin Islands manufacture brought into the United States and withdrawn for consumption or sale.
(b) *Regulations.* The procedural requirements with respect to matters relating to tobacco products, cigarette papers and tubes, and processed tobacco are contained in the regulations listed below:
(1) [Part 71 of title 27 CFR](/current/title-27/part-71) relates to the procedure and practice in connection with the disapproval of applications for permits, and the suspension and revocation of permits, under chapter 52 of the Internal Revenue Code.
(2) [Part 40 of title 27 CFR](/current/title-27/part-40) relates to the manufacture of tobacco products, cigarette papers and tubes, and processed tobacco, the payment of internal revenue taxes imposed by chapter 52 of the Internal Revenue Code on manufacturers of tobacco products and of cigarette papers and tubes, and the qualification of and operations by manufacturers of tobacco products, cigarette papers and tubes, and processed tobacco.
(3) [Part 41 of title 27 CFR](/current/title-27/part-41) relates to tobacco products, cigarette papers and tubes, and processed tobacco imported into the United States from a foreign country or brought into the United States from Puerto Rico, the Virgin Islands, or a possession of the United States; the removal of cigars from a customs bonded manufacturing warehouse, Class 6; and the release of tobacco products, and cigarette papers and tubes from customs custody, without payment of internal revenue tax or customs duty attributable to the internal revenue tax.
(4) \[Reserved]
(5) [Part 44 of title 27 CFR](/current/title-27/part-44) relates to the exportation (including supplies for vessels and aircraft and transfers to a foreign-trade zone) of tobacco products, and cigarette papers and tubes, without payment of tax, or with benefit of drawback of tax, and the qualification of and operations by export warehouse proprietors.
(6) [Part 45 of title 27 CFR](/current/title-27/part-45) relates to the removal of tobacco products, and cigarette papers and tubes, without payment of tax, for use of the United States.
(7) [Part 46 of title 27 CFR](/current/title-27/part-46) relates to the provisions of a miscellaneous nature or not of continuing application. Included are regulations relating to:
(i) Limitations imposed by section 6423 of the Internal Revenue Code on the refund or credit of tax paid or collected on tobacco products, and cigarette papers and tubes;
(ii) Losses of tobacco products, and cigarette papers and tubes caused by disasters occurring in the United States on or after September 3, 1958;
(iii) Purchase, receipt, possession, offering for sale, or sale or other disposition of tobacco products by dealers in such products; and
(iv) Liability for special (occupational) tax, filing special tax returns, issuance and examination of special tax stamps, and notification of changes to special tax stamps.
\[T.D. ATF-251, [52 FR 19325](https://www.federalregister.gov/citation/52-FR-19325), May 22, 1987]
#### Editorial Note:
For Federal Register citations affecting [§ 70.431](/current/title-27/section-70.431), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
#### § 70.432 Qualification and bonding requirements.
(a) *Manufacturers of tobacco products and proprietors of export warehouses.* Every person, before commencing business as a manufacturer of tobacco products or as a proprietor of an export warehouse, is required to qualify with the Alcohol and Tobacco Tax and Trade Bureau by making application for a permit and filing bond and other required documents and obtaining a permit.
(b) *Manufacturers of cigarette papers and tubes.* Every person, before commencing business as a manufacturer of cigarette papers and tubes, is required to qualify with the Alcohol and Tobacco Tax and Trade Bureau by filing bond and other required documents.
(c) *Puerto Rican manufacturers of tobacco products.* Every manufacturer of tobacco products in Puerto Rico who desires to defer payment in Puerto Rico of the internal revenue tax imposed by section 7652(a) of the Internal Revenue Code on tobacco products of Puerto Rican manufacture coming into the United States must file a bond with the appropriate TTB officer. Such bond is conditioned on the principal's paying, at the time and in the manner prescribed in the regulations, the full amount of tax computed on the tobacco products which are released for shipment to the United States. No bond is required if the tax is prepaid.
(d) *Proprietors of customs warehouses.* Every proprietor of a customs bonded manufacturing warehouse, Class 6, who desires to remove under part 44 tax-exempt cigars for exportation (including supplies for vessels and aircraft), or for delivery for subsequent exportation, is required to file a bond. However, removal of cigars for sale or consumption in the United States is subject to customs regulations.
(e) *Drawback of tax.* Taxpaid tobacco products, and cigarette papers and tubes may be exported with benefit of drawback of tax. Drawback may be allowed only to the person who paid the tax on such articles and who files a claim and otherwise complies with the provisions contained in the applicable regulations referred to in [§ 70.431](/current/title-27/section-70.431). As a condition precedent to the allowance of any drawback claim, the claimant is required to file a bond in an amount not less than the amount of tax covered in the claim.
(f) *General.* Detailed information relating to the qualification and bonding requirements, including the forms to be used and the procedure to be followed, is fully set forth in the regulations referred to in [§ 70.431](/current/title-27/section-70.431).
\[T.D. ATF-251, [52 FR 19325](https://www.federalregister.gov/citation/52-FR-19325), May 22, 1987. Redesignated and amended by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), [47654](https://www.federalregister.gov/citation/55-FR-47654), Nov. 14, 1990; T.D. ATF-450, [66 FR 29029](https://www.federalregister.gov/citation/66-FR-29029), May 29, 2001; T.D. ATF-464, [66 FR 43480](https://www.federalregister.gov/citation/66-FR-43480), Aug. 20, 2001]
#### § 70.433 Collection of taxes.
(a) *Tobacco products.* Taxes on tobacco products are paid by the manufacturer on the basis of a return. If the manufacturer has filed a proper bond, such manufacturer may defer payment at the time of removal and file semimonthly returns to cover the taxes. If the manufacturer has not filed such a bond or if the manufacturer has defaulted in any way in paying the taxes, the manufacturer is required to file a prepayment return prior to removal of such products, and to continue so doing until the appropriate TTB officer finds that the revenue will not be jeopardized by deferred payment. Tax returns, with remittances, are filed by the domestic manufacturer in accordance with instructions on the appropriate TTB form. Taxes on cigars produced in a customs bonded manufacturing warehouse, Class 6, are paid on the basis of a return to the director of customs in accordance with customs procedures and regulations. Taxes on tobacco products imported or brought into the United States from a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States are paid by the importer to the director of customs on the basis of a return made on the customs form by which release from customs custody is to be effected. However, taxes on tobacco products manufactured in Puerto Rico and brought into the United States may be prepaid in Puerto Rico on the basis of a return. If a Puerto Rican manufacturer has filed a proper bond, such manufacturer may defer payment at the time of release for shipment to the United States and file a semimonthly return to cover the taxes. If the manufacturer has not filed such a bond or if such manufacturer has defaulted in any way in payment of taxes, the manufacturer must file a prepayment return prior to removal of such products for shipment to the United States, and continue to do so until the appropriate TTB officer finds that the revenue will not be jeopardized by deferred payment. Tax returns, with remittances, are filed by the domestic manufacturer in accordance with instructions on the appropriate TTB form.
(b) *Cigarette papers and tubes.* Taxes on cigarette papers and tubes are paid by the manufacturer on the basis of a semimonthly return. Such returns, with remittances, are filed in accordance with the instructions on the appropriate TTB form. Taxes on cigarette papers and tubes imported or brought into the United States from a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States are paid to the director of customs before removal on the basis of a return made on the customs form by which release from customs custody is effected. However, taxes on cigarette papers and tubes of Puerto Rican manufacture which are to be shipped to the United States may be prepaid in Puerto Rico on the basis of a return.
(c) *Special tax.* Special (occupational) taxes are paid by manufacturers of tobacco products, manufacturers of cigarette papers and tubes, and export warehouse proprietors on the basis of a return. Special tax stamps are issued to denote the payment of special (occupational) taxes.
(d) *General.* Detailed information about the payment of taxes on tobacco products, and cigarette papers and tubes, including the forms to be used, records to be kept, and reports and inventories to be filed, is contained in the respective regulations referred to in [§ 70.431](/current/title-27/section-70.431).
\[T.D. ATF-251, [52 FR 19325](https://www.federalregister.gov/citation/52-FR-19325), May 22, 1987, as amended by T.D. ATF-271, [53 FR 17549](https://www.federalregister.gov/citation/53-FR-17549), May 17, 1988. Redesignated and amended by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), [47654](https://www.federalregister.gov/citation/55-FR-47654), Nov. 14, 1990; T.D. ATF-450, [66 FR 29029](https://www.federalregister.gov/citation/66-FR-29029), May 29, 2001; T.D. TTB-196, [89 FR 87952](https://www.federalregister.gov/citation/89-FR-87952), Nov. 6, 2024]
#### § 70.434 Assessments.
When additional or delinquent tax liability on tobacco products, and cigarette papers and tubes is disclosed by an investigation or by an examination of the taxpayer's records, a notice (except where delay may jeopardize collection of the tax, or where the amount is nominal or the result of an evident mathematical error) is forwarded to the taxpayer indicating the basis for, and amount of, the liability and affording the taxpayer an opportunity to show cause, in writing, against assessment.
\[T.D. ATF-251, [52 FR 19325](https://www.federalregister.gov/citation/52-FR-19325), May 22, 1987. Redesignated by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), Nov. 14, 1990]
#### § 70.435 Claims.
(a) *General.* Detailed requirements, including the procedure to be followed in the filing of a claim, the form to be used, the supporting documents which must be submitted, the time within which a claim must be filed, and any other limitations or instructions are contained in the applicable regulations referred to in [§ 70.431](/current/title-27/section-70.431).
(b) *Abatement of assessment.* Abatement of the unpaid portion of an assessment of any tax on tobacco products, and cigarette papers and tubes, or any liability in respect thereof, may be allowed to the extent that such assessment is excessive in amount, is assessed after expiration of the applicable period of limitation, or is erroneously or illegally assessed.
(c) *Allowance of tax.* Relief from the payment of tax on tobacco products, and cigarette papers and tubes may be extended to a manufacturer by approval of a claim for allowance where such articles, after removal from the factory upon determination of tax and prior to the time for payment of such tax, are lost (otherwise than by theft) or destroyed by fire, casualty, or act of God, while in the possession or ownership of the manufacturer who removed such articles, or are withdrawn by the manufacturer from the market.
(d) *Remission of tax liability.* Remission of the tax liability on tobacco products, and cigarette papers and tubes may be extended to a manufacturer or export warehouse proprietor liable for the tax, where such articles in bond are lost (otherwise than by theft) or destroyed by fire, casualty, or act of God, while in the possession or ownership of the manufacturer or export warehouse proprietor.
(e) *Refund of tax.* Taxes paid on tobacco products, cigarette papers and tubes lost (otherwise than by theft) or destroyed by fire, casualty, or act of God, while in the possession or ownership of the manufacturer, importer, or export warehouse proprietor, or withdrawn from the market, may be refunded. Refunds may also be made within certain limitations for overpayments of tax on tobacco products, and cigarette papers and tubes.
(f) *Losses caused by disaster.* Payment of an amount equal to the amount of internal revenue taxes paid or determined and customs duties paid on tobacco products, and cigarette papers and tubes removed from the factory or released from customs custody, which are lost, rendered unmarketable, or condemned by a duly authorized official by reason of a “major disaster” as determined by the President of the United States may be made only if, at the time of the disaster, such articles were being held for sale by the claimant. Claims must be filed within 6 months from the date on which the President makes the determination that the disaster has occurred. The determination date is construed to mean the date the Director, Office of Emergency Preparedness, identifies the specific disaster area.
(g) *Drawback of tax.* Drawback may be allowed to the person who paid the tax on tobacco products, and cigarette papers and tubes which are shipped to a foreign country, Puerto Rico, the Virgin Islands, or a possession of the United States.
(h) *Credit of tax.* Taxes paid on tobacco products, and cigarette papers and tubes lost (otherwise than by theft) or destroyed by fire, casualty, or act of God, while in the possession or ownership of the manufacturer, or withdrawn from the market, may be credited upon approval of a claim.
(i) *Reopening claims.* A claimant who wishes to have a rejected claim reopened must, within the applicable statutory period of limitations, submit a written application to the appropriate TTB officer for reconsideration of the claim. Such application must show that the additional evidence to be presented is new and material, and that such evidence was unknown to the claimant, or unobtainable by the claimant, when the claim was previously under consideration.
(j) *Claimant's rights under law and regulations.* Before final action has been taken on a claim, a claimant who, by reason of an oversight, misunderstanding of law and regulations, miscalculation, or other cause, did not claim the full amount of abatement, refund, credit, or drawback, as the case may be, of tax to which the claimant is legitimately entitled, may amend a valid claim, and statements filed in support thereof, in instances where such a claim is deficient in establishing the claimants eligibility to rights extended under law and regulations.
\[T.D. ATF-251, [52 FR 19325](https://www.federalregister.gov/citation/52-FR-19325), May 22, 1987. Redesignated and amended by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), [47654](https://www.federalregister.gov/citation/55-FR-47654), Nov. 14, 1990]
#### § 70.436 Offers in compromise.
Procedure in the case of offers in compromise of liabilities under [26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201) is set forth in [§§ 70.482](/current/title-27/section-70.482) through [70.484](/current/title-27/section-70.484).
\[T.D. ATF-301, [55 FR 47654](https://www.federalregister.gov/citation/55-FR-47654), Nov. 14, 1990]
#### § 70.437 Rulings.
The procedure for rulings in tobacco tax matters is set forth in [§ 70.471](/current/title-27/section-70.471).
\[T.D. ATF-301, [55 FR 47654](https://www.federalregister.gov/citation/55-FR-47654), Nov. 14, 1990]
#### § 70.438 Forms.
Detailed information as to all forms prescribed for use in connection with tobacco taxes is contained in the regulations referred to in [§ 70.431(b)](/current/title-27/section-70.431#p-70.431\(b\)).
\[T.D. ATF-251, [52 FR 19325](https://www.federalregister.gov/citation/52-FR-19325), May 22, 1987. Redesignated by T.D. ATF-301, [55 FR 47653](https://www.federalregister.gov/citation/55-FR-47653), Nov. 14, 1990, as amended by T.D. ATF-450, [66 FR 29029](https://www.federalregister.gov/citation/66-FR-29029), May 29, 2001]
### Provisions Relating to Firearms, Shells and Cartridges, and Explosives
#### § 70.441 Applicable laws.
(a) Chapter 53 of the Internal Revenue Code ([26 U.S.C. 5801-5872](https://www.govinfo.gov/link/uscode/26/5801)), the provisions of which are derived from the National Firearms Act Amendments of 1968 (82 Stat. 1227), imposes a tax on the making and transfer in the United States of machine guns, destructive devices, and certain other types of firearms, and an occupational tax upon every importer and manufacturer of, and dealer in, such firearms. Section 1(b) (2) of the act of August 9, 1939 (52 Stat. 1291; [49 U.S.C. 781-788](https://www.govinfo.gov/link/uscode/49/781)), makes provision for the seizure and forfeiture of vessels, vehicles, and aircraft which are used to transport, carry, or possess, or to facilitate the same, any firearms with respect to which there has been committed any violation of the National Firearms Act or any regulations issued pursuant thereto.
(b) Title I, State Firearms Control Assistance (18 U.S.C., Chapter 44), of the Gun Control Act of 1968 (82 Stat. 1213), as amended by Pub. L. 99-308 (100 Stat. 449), Pub. L. 99-360 (100 Stat. 766) and Pub. L. 99-408 (100 Stat. 920), provides for the licensing of manufacturers and importers of firearms and ammunition, collectors of firearms, and dealers in firearms, and establishes controls for firearms and ammunition acquisitions and dispositions.
(c) Title I, State Firearms Control Assistance ([18 U.S.C. Chapter 44](https://www.govinfo.gov/link/uscode/18/4401)), of the Gun Control Act of 1968 (82 Stat. 1213) as amended by Pub. L. 99-308 (100 Stat. 449) and Pub. L. 99-360 (100 Stat. 766), provides that no person may ship or transport any firearms or ammunition in interstate or foreign commerce, or receive any firearms or ammunition which has been shipped or transported in interstate or foreign commerce, or possess any firearms or ammunition in or affecting commerce, who
(1) has been convicted of a crime punishable by imprisonment for a term exceeding 1 year,
(2) is a fugitive from justice,
(3) is an unlawful user of or addicted to any controlled substance (as defined in section 102 of the Controlled Substances Act, [21 U.S.C. 802](https://www.govinfo.gov/link/uscode/21/802)),
(4) has been adjudicated as a mental defective or has been committed to a mental institution,
(5) is an alien illegally or unlawfully in the United States,
(6) has been discharged from the Armed Forces under dishonorable conditions, or
(7) having been a citizen of the United States, has renounced citizenship.
(d) Section 38 of the Arms Export Control Act ([22 U.S.C. 2778](https://www.govinfo.gov/link/uscode/22/2778)) and regulations thereunder and [27 CFR part 447](/current/title-27/part-447) are applicable to the registration and licensing of persons engaged in the business of manufacturing, importing or exporting arms, ammunition, or implements of war. The Secretary of the Treasury is authorized to control, in furtherance of world peace and the security and foreign policy of the United States, the import of articles enumerated on the U.S. Munitions Import List.
(e) Title XI, Regulation of Explosives ([18 U.S.C. chapter 40](https://www.govinfo.gov/link/uscode/18/4001)) of the Organized Crime Control Act of 1970 (84 Stat. 922) provides for the licensing of manufacturers, importers, and limited manufacturers of, and dealers in, explosives in interstate or foreign commerce, and for issuance of permits for users who buy or transport explosives in interstate or foreign commerce.
(f) Chapter 32 of the Internal Revenue Code ([26 U.S.C. 4181](https://www.govinfo.gov/link/uscode/26/4181)), imposes a tax upon the sale by the manufacturer, producer, or importer of pistols, revolvers, firearms (other than pistols and revolvers), and shells and cartridges.
\[T.D. ATF-251, [52 FR 19325](https://www.federalregister.gov/citation/52-FR-19325), May 22, 1987. Redesignated by T.D. ATF-301, [55 FR 47653](https://www.federalregister.gov/citation/55-FR-47653), Nov. 14, 1990, as amended by T.D. ATF-331, [57 FR 40328](https://www.federalregister.gov/citation/57-FR-40328), Sept. 3, 1992; T.D. TTB-91, [76 FR 5481](https://www.federalregister.gov/citation/76-FR-5481), Feb. 1, 2011]
#### § 70.442 Taxes relating to machine guns, destructive devices, and certain other firearms.
[Part 479 of title 27 CFR](/current/title-27/part-479) contains the regulations relative to the:
(a) Payment of special (occupational) taxes by manufacturers and importers of and dealers in, machine guns, destructive devices, and certain other types of firearms,
(b) Payment of the tax on the making or transfer of such firearms,
(c) Registration, identification, importation, and exportation of such firearms,
(d) Keeping of books and records and rendering of returns, and
(e) The forfeiture and disposition of seized firearms under the provisions of the National Firearms Act.
\[T.D. ATF-251, [52 FR 19325](https://www.federalregister.gov/citation/52-FR-19325), May 22, 1987. Redesignated by T.D. ATF-301, [55 FR 47653](https://www.federalregister.gov/citation/55-FR-47653), Nov. 14, 1990, as amended by T.D. TTB-91, [76 FR 5481](https://www.federalregister.gov/citation/76-FR-5481), Feb. 1, 2011]
#### § 70.443 Firearms and ammunition.
(a) *Commerce in firearms and ammunition.* (1) [27 CFR part 478](/current/title-27/part-478) contains the regulations relative to:
(i) The licensing of importers and manufacturers of firearms and ammunition, collectors of firearms, and dealers in firearms,
(ii) The identification of firearms,
(iii) The acquisition and disposition of firearms and ammunition,
(iv) The records required to be kept by licensees, and
(v) The forfeiture and disposition of seized firearms and ammunition, under the provisions of title I of the Gun Control Act of 1968, as amended, and also
(vi) The restrictions regarding the receipt, possession, or transportation of firearms by certain persons.
(b) *Firearms and ammunition excise taxes.* (1) [27 CFR part 53](/current/title-27/part-53) contains the regulations relative to:
(i) Payment of excise tax on the sale of pistols, revolvers, firearms (other than pistols and revolvers), shells and cartridges,
(ii) Establishing constructive sales price,
(iii) Registration for tax free sales,
(iv) Keeping of records and rendering of returns, and
(v) The exportation or use in further manufacture of tax-paid articles.
\[T.D. ATF-331, [57 FR 40328](https://www.federalregister.gov/citation/57-FR-40328), Sept. 3, 1992, as amended by T.D. TTB-91, [76 FR 5482](https://www.federalregister.gov/citation/76-FR-5482), Feb. 1, 2011]
#### § 70.444 Importation of arms, ammunition, and implements of war.
[Part 447 of title 27 CFR](/current/title-27/part-447) implements Executive Order 11958 and supplements the import provisions contained in parts 478 and 479 of [title 27 CFR.](/current/title-27) Part 447 establishes the U.S. Munitions Import List and contains the regulations relative to:
(a) The registration of importers in arms, ammunition, and implements of war,
(b) Import permit requirements,
(c) Import certification and verification,
(d) Import restrictions applicable to certain countries, and
(e) The forfeiture of seized arms, ammunition, and implements of war under the Arms Export Control Act.
\[T.D. ATF-301, [55 FR 47616](https://www.federalregister.gov/citation/55-FR-47616), Nov. 14, 1990, as amended by T.D. TTB-91, [76 FR 5482](https://www.federalregister.gov/citation/76-FR-5482), Feb. 1, 2011]
#### § 70.445 Commerce in explosives.
[Part 555 of title 27 CFR](/current/title-27/part-555) contains the regulations relative to:
(a) Licensing of manufacturers, importers, and limited manufacturers of, and dealers in, explosives,
(b) Permits for users who buy or transport explosives in interstate or foreign commerce,
(c) Construction of different types of storage facilities for three classes of explosive material,
(d) The identification of explosives,
(e) The acquisition and disposition of explosives,
(f) The records required to be kept by licensees and permittees,
(g) The forfeiture and disposition of seized explosive material, under the provision of Title XI of the Organized Crime Control Act of 1970,
(h) Operations by licensees or permittees and hearings procedure after denial or revocation of license or permit, and also
(i) Restrictions regarding the receipt, possession, or transportation of explosives by certain persons under the provisions of Title XI of the Organized Crime Control Act of 1970.
\[T.D. ATF-301, [55 FR 47616](https://www.federalregister.gov/citation/55-FR-47616), Nov. 14, 1990, as amended by T.D. TTB-91, [76 FR 5482](https://www.federalregister.gov/citation/76-FR-5482), Feb. 1, 2011]
#### § 70.446 Rulings.
The procedure for rulings in the firearms and explosives area is set forth in [§ 70.471](/current/title-27/section-70.471).
\[T.D. ATF-301, [55 FR 47654](https://www.federalregister.gov/citation/55-FR-47654), Nov. 14, 1990]
#### § 70.447 Assessments.
Where the evidence disclosed by investigation establishes that additional or delinquent tax liability has been incurred and not paid, the appropriate TTB officer will list the tax as an assessment. Notification and demand for payment of assessed taxes will be issued to the taxpayer by the appropriate TTB officer.
\[T.D. ATF-301, [55 FR 47654](https://www.federalregister.gov/citation/55-FR-47654), Nov. 14, 1990]
#### § 70.448 Claims.
(a) The procedures applicable to the filing of claims under chapter 53 of the Internal Revenue Code are set forth below:
(1) Claims for refund of the making and transfer taxes, and of occupational taxes, whether paid pursuant to assessment or voluntarily paid, and claims for redemption of “National Firearms Act” stamps, are prepared and filed in accordance with the procedures set forth in [27 CFR part 479](/current/title-27/part-479).
(2) Claims for abatement of making and transfer taxes, and claims for abatement of occupational taxes and penalties erroneously assessed, are prepared and filed in accordance with the procedures set forth in [§ 70.413(b)](/current/title-27/section-70.413#p-70.413\(b\)).
(3) Claims may be reopened or amended in accordance with the provisions of [§ 70.414 (k)](/current/title-27/section-70.414#p-70.414\(k\)) and [(l)](/current/title-27/section-70.414#p-70.414\(l\)).
(b) The procedures applicable to the filing of claims relating to the tax imposed by section 4181 of the Internal Revenue Code are set forth below:
(1) Claims for credit or refund of manufacturers taxes, whether paid pursuant to assessment of voluntarily paid, are prepared and filed in accordance with the procedures set forth in [§ 70.123](/current/title-27/section-70.123) and [27 CFR 53.171](/current/title-27/section-53.171) through [53.186](/current/title-27/section-53.186). For regulations under section 6416 of the Internal Revenue Code, relating to conditions to allowance and other procedural requirements, see [27 CFR 53.172](/current/title-27/section-53.172) through [53.186](/current/title-27/section-53.186).
(2) Claims for abatement of manufacturers taxes are to be prepared and filed in accordance with [§ 70.125](/current/title-27/section-70.125).
(3) Claims may be reopened or amended in accordance with the provisions of [§ 70.414 (k)](/current/title-27/section-70.414#p-70.414\(k\)) and [(l)](/current/title-27/section-70.414#p-70.414\(l\)).
\[T.D. ATF-331, [57 FR 40328](https://www.federalregister.gov/citation/57-FR-40328), Sept. 3, 1992, as amended by T.D. TTB-91, [76 FR 5482](https://www.federalregister.gov/citation/76-FR-5482), Feb. 1, 2011]
#### § 70.449 Offers in compromise.
The procedures in the case of offers in compromise of liabilities under [26 U.S.C. 4181](https://www.govinfo.gov/link/uscode/26/4181) and chapter 53 are set forth in [§§ 70.482](/current/title-27/section-70.482) and [70.484](/current/title-27/section-70.484).
\[T.D. ATF-331, [57 FR 40329](https://www.federalregister.gov/citation/57-FR-40329), Sept. 3, 1992]
### Seized Property
#### § 70.450 Seizure and forfeiture of personal property.
[Part 72 of title 27 CFR](/current/title-27/part-72) contains the regulations relative to the personal property seized by officers of the Bureau of Alcohol, Tobacco and Firearms as subject to forfeiture as being used, or intended to be used, to violate certain Federal laws; the remission or mitigation of such forfeiture; and the administrative sale or other disposition, pursuant to forfeiture, of such seized property other than firearms seized under the National Firearms Act and firearms and ammunition seized under Title I of the Gun Control Act of 1968, as amended. For disposal of firearms under the National Firearms Act, see [26 U.S.C. 5872(b)](https://www.govinfo.gov/link/uscode/26/5872). For disposal of firearms and ammunition under Title I of the Gun Control Act of 1968, see [18 U.S.C. 924(d)](https://www.govinfo.gov/link/uscode/18/924). For disposal of explosives under Title XI of Organized Crime Control Act of 1970, see [18 U.S.C. 844(c)](https://www.govinfo.gov/link/uscode/18/844).
### Possessions
#### § 70.461 Shipments to the United States.
For regulations under [26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652), see [27 CFR part 26](/current/title-27/part-26) relating to liquors and articles from Puerto Rico and the Virgin Islands; and [27 CFR part 41](/current/title-27/part-41) relating to cigars, cigarettes, and cigarette papers and tubes.
(68A Stat. 907, as amended ([26 U.S.C. 7652](https://www.govinfo.gov/link/uscode/26/7652)))
\[T.D. ATF-6, [38 FR 32445](https://www.federalregister.gov/citation/38-FR-32445), Nov. 26, 1973, as amended by T.D. ATF-249, [52 FR 5961](https://www.federalregister.gov/citation/52-FR-5961), Feb. 27, 1987. Redesignated by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), Nov. 14, 1990, as amended by T.D. ATF-459, [66 FR 38550](https://www.federalregister.gov/citation/66-FR-38550), July 25, 2001; T.D. TTB-16, [69 FR 52423](https://www.federalregister.gov/citation/69-FR-52423), Aug. 26, 2004]
#### § 70.462 Shipments from the United States.
For regulations under [26 U.S.C. 7653](https://www.govinfo.gov/link/uscode/26/7653), see [27 CFR part 28](/current/title-27/part-28) relating to exportation of liquors; and [27 CFR part 44](/current/title-27/part-44), relating to exportation of cigars, cigarettes, and cigarette papers and tubes.
(68A Stat. 908, as amended; ([26 U.S.C. 7653](https://www.govinfo.gov/link/uscode/26/7653)))
\[T.D. ATF-6, [38 FR 32445](https://www.federalregister.gov/citation/38-FR-32445), Nov. 26, 1973, as amended by T.D. ATF-249, [52 FR 5961](https://www.federalregister.gov/citation/52-FR-5961), Feb. 27, 1987. Redesignated by T.D. ATF-301, [55 FR 47606](https://www.federalregister.gov/citation/55-FR-47606), Nov. 14, 1990; T.D. ATF-464, [66 FR 43480](https://www.federalregister.gov/citation/66-FR-43480), Aug. 20, 2001; T.D. TTB-8, [69 FR 3830](https://www.federalregister.gov/citation/69-FR-3830), Jan. 27, 2004; T.D. TTB-91, [76 FR 5482](https://www.federalregister.gov/citation/76-FR-5482), Feb. 1, 2011]
### Rulings
#### § 70.471 Rulings.
(a) *Requests for rulings.* Any person who is in doubt as to any matter arising in connection with the following may request a ruling thereon by addressing a letter to the appropriate TTB officer:
(1) Operations or transactions in the alcohol tax area ([26 U.S.C. chapter 51](https://www.govinfo.gov/link/uscode/26/5101)), the Federal Alcohol Administration Act ([27 U.S.C. chapter 8](https://www.govinfo.gov/link/uscode/27/801), including the Alcohol Beverage Labeling Act of 1988), or the Webb-Kenyon Act ([27 U.S.C. 122](https://www.govinfo.gov/link/uscode/27/122));
(2) Operations or transactions in the tobacco tax area ([26 U.S.C. chapter 52](https://www.govinfo.gov/link/uscode/26/5201));
(3) Operations or transactions in the firearms and ammunition manufacturers excise tax area ([26 U.S.C. 4181-4182](https://www.govinfo.gov/link/uscode/26/4181));
(4) Subchapters F and G of chapter 32 of the IRC insofar as they relate to activities administered and enforced with respect to sections 4181 and 4182 of the IRC; and
(5) Subtitle F of the IRC insofar as it relates to any of the foregoing.
(b) *Routine requests for information.* Routine requests for information should be addressed to the appropriate TTB officer.
(c) *Matters under ATF jurisdiction.* For rulings on matters under the jurisdiction of the Bureau of Alcohol, Tobacco, Firearms and Explosives (Department of Justice), contact the Bureau of Alcohol, Tobacco, Firearms and Explosives, Office of Public and Governmental Affairs, 99 New York Avenue, NE., Washington, DC 20226, or view the contact information posted online at *[https://www.atf.gov/contact](https://www.atf.gov/contact).*
\[T.D. TTB-91, [76 FR 5482](https://www.federalregister.gov/citation/76-FR-5482), Feb. 1, 2011, as amended by T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
### Administrative Remedies
#### § 70.481 Agreements for payment of liability in installments.
(a) *Authorization of agreements.* The appropriate TTB officer, is authorized to enter into written agreements with any taxpayer under which such taxpayer is allowed to satisfy liability for payment of any tax in installment payments if the appropriate TTB officer determines that such agreement will facilitate collection of such liability.
(b) *Extent to which agreements remain in effect* —
(1) *In general.* Except as otherwise provided in this [paragraph (b)](/current/title-27/section-70.481#p-70.481\(b\)), any agreement under [paragraph (a)](/current/title-27/section-70.481#p-70.481\(a\)) of this section shall remain in effect for the term of the agreement.
(2) *Inadequate information or jeopardy.* The officer who entered into an installment agreement under [paragraph (a)](/current/title-27/section-70.481#p-70.481\(a\)) of this section may terminate such agreement if:
(i) Information which the taxpayer provided prior to the date such agreement was entered into was inaccurate or incomplete, or
(ii) The appropriate TTB officer believes that collection of any tax to which an agreement under this section relates is in jeopardy.
(3) *Subsequent change in financial conditions* —
(i) *In general.* If the officer who entered into an installment agreement under [paragraph (a)](/current/title-27/section-70.481#p-70.481\(a\)) of this section makes a determination that the financial condition of the taxpayer has significantly changed, the officer may alter, modify, or terminate such agreement.
(ii) *Notice.* Action may be taken by the appropriate TTB officer under [paragraph (b)(3)(i)](/current/title-27/section-70.481#p-70.481\(b\)\(3\)\(i\)) of this section only if:
(A) Notice of such determination is provided to the taxpayer no later than 30 days prior to the date of such action, and
(B) Such notice includes the reasons why the officer believes a significant change in the financial condition of the taxpayer has occurred.
(4) *Failure to pay an installment or any other tax liability when due or to provide requested financial information.* The officer who entered into an installment agreement under [paragraph (a)](/current/title-27/section-70.481#p-70.481\(a\)) of this section may alter, modify, or terminate such agreement in the case of the failure of the taxpayer:
(i) To pay an installment at the time such installment payment is due under such agreement,
(ii) To pay any other tax liability at the time such liability is due, or
(iii) To provide a financial condition update as requested by the appropriate TTB officer.
([26 U.S.C. 6159](https://www.govinfo.gov/link/uscode/26/6159))
\[T.D. ATF-301, [55 FR 47655](https://www.federalregister.gov/citation/55-FR-47655), Nov. 14, 1990, as amended by T.D. ATF-450, [66 FR 29029](https://www.federalregister.gov/citation/66-FR-29029), May 29, 2001]
#### § 70.482 Offers in compromise of liabilities (other than forfeiture) under 26 U.S.C.
(a) *In general.* The appropriate TTB officer may compromise any civil or criminal liability arising under the provisions of 26 U.S.C. enforced and administered by TTB prior to reference of a case involving such liability to the Department of Justice for prosecution or defense. (For compromise of forfeiture liability, see [§ 70.484 of this part](/current/title-27/part-70/section-70.484).) Any such liability may be compromised only upon one or both of the following two grounds:
(1) Doubt as to liability; or
(2) Doubt as to collectability.
No such liability will be compromised if the liability has been established by a valid judgment or is certain, and there is no doubt as to the ability of the Government to collect the amounts owing with respect to such liability.
(b) *Scope of compromise agreement.* A compromise agreement may relate to civil or criminal liability for taxes, interest, ad valorem penalties, or specific penalties. However, a criminal liability may be compromised only if it involves a violation of a regulatory provision of 26 U.S.C., or a related statute, and then only if such violation was not deliberately committed with an intent to defraud.
(c) *Effect of compromise agreement.* A compromise agreement relates to the entire liability of the taxpayer (including taxes, ad valorem penalties, and interest) with respect to which the offer in compromise is submitted and all questions of such liability are conclusively settled thereby. Specific penalties, however, shall be compromised separately and not in connection with taxes, interest, or ad valorem penalties. Neither the taxpayer nor the Government shall, upon acceptance of an offer in compromise, be permitted to reopen the case except by reason of falsification or concealment of assets by the taxpayer, or mutual mistake of a material fact sufficient to cause a contract to be reformed or set aside. However, acceptance of an offer in compromise of a civil liability does not remit a criminal liability, nor does acceptance of an offer in compromise of a criminal liability remit a civil liability.
(d) *Procedure with respect to offers in compromise* —
(1) *Submission of offers.*
(i) Offers in compromise under this section shall be submitted on TTB Form 5640.1, along with any additional information required by the officer authorized to accept or reject the offer. If the offer in compromise is based on inability to pay, the proponent must submit any financial statement required by such officer.
(ii) The offer should generally be accompanied by a remittance representing the amount of the compromise offer or a deposit if the offer provides for future installment payments. When final action has been taken, the proponent is notified of the acceptance or rejection of the offer.
(2) *Stay of collection.* The submission of an offer in compromise shall not automatically operate to stay the collection of any tax liability. However, enforcement of collection may be deferred if the interests of the United States will not be jeopardized thereby.
(3) *Acceptance.* An offer in compromise shall be considered accepted only when the proponent thereof is so notified in writing. As a condition to accepting an offer in compromise, the taxpayer may be required to enter into any collateral agreement or to post any security which is deemed necessary for the protection of the interests of the United States. If the final payment on an accepted offer is contingent upon the immediate or simultaneous release of a tax lien in whole or in part, such payment must be in cash, or in the form of a certified, cashier's, or treasurer's check drawn on any bank or trust company incorporated under the laws of the United States or any State, Territory, or possession of the United States, or by a U.S. postal, bank, express, or telegraph money order.
(4) *Withdrawal or rejection.* An offer in compromise may be withdrawn by the proponent at any time prior to its acceptance. In the event an offer is rejected, the proponent shall be promptly notified in writing. Frivolous offers or offers submitted for the purpose of delaying the collection of tax liabilities shall be immediately rejected. If an offer in compromise is withdrawn or rejected, the amount tendered with the offer, including all installments paid, shall be refunded without interest, unless the taxpayer has stated or agreed that the amount tendered may be applied to the liability with respect to which the offer was submitted.
(e) *Record.* Except as otherwise provided in this paragraph, if an offer in compromise is accepted, there shall be placed on file the opinion of counsel for the Bureau with respect to such compromise, with the reason therefor, and including a statement of:
(1) The amount of tax assessed,
(2) The amount of interest, additional amount, addition to the tax, or assessable penalty, imposed by law on the person against whom the tax is assessed, and
(3) The amount actually paid in accordance with the terms of the compromise.
However, no such opinion shall be required with respect to the offer in compromise of any civil case in which the unpaid amount of tax assessed (including any interest, additional amount, addition to the tax, or assessable penalty is less than \$50,000. However, such compromise shall be subject to continuing quality review by the Secretary.
(f) *Requirement with respect to statute of limitations.* No offer in compromise shall be accepted unless the taxpayer waives the running of the statutory period of limitations on both or either assessment or collection of the tax liability involved for the period during which the offer is pending, or the period during which any installment remains unpaid, and for one year thereafter.
(g) *Inspection with respect to accepted offers in compromise.* For provisions relating to the inspection of returns and accepted offers in compromise, *see* [26 U.S.C. 6103(k)(l)](https://www.govinfo.gov/link/uscode/26/6103).
([26 U.S.C. 7122](https://www.govinfo.gov/link/uscode/26/7122))
(Approved by the Office of Management and Budget under control number 1512-0472)
\[T.D. ATF-301, [55 FR 47655](https://www.federalregister.gov/citation/55-FR-47655), Nov. 14, 1990, as amended by T.D. ATF-331, [57 FR 40329](https://www.federalregister.gov/citation/57-FR-40329), Sept. 3, 1992; T.D. ATF-450, [66 FR 29029](https://www.federalregister.gov/citation/66-FR-29029), May 29, 2001; T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
#### § 70.483 Offers in compromise of violations of Federal Alcohol Administration Act.
The Federal Alcohol Administration Act provides penalties for violations of its provisions. The appropriate TTB officer is authorized to compromise such liabilities. Persons desiring to submit offers in compromise may submit such offers on Form 5640.2. When the offer is acted upon, the proponent is notified of the acceptance or rejection of the offer. If the offer is rejected, the sum submitted with the offer in compromise is returned to the proponent. If the offer is accepted, the proponent is notified and the case is closed.
\[T.D. ATF-450, [66 FR 29029](https://www.federalregister.gov/citation/66-FR-29029), May 29, 2001]
#### § 70.484 Offers in compromise of forfeiture liabilities.
The appropriate TTB officer is authorized to compromise liabilities to administrative forfeiture of personal property seized under the laws administered and enforced by the Bureau. Persons desiring to submit offers in compromise of such liabilities may submit such offers on Form 656-E to the appropriate TTB officer. When the offer is acted upon, the proponent is notified of the acceptance or rejection of the offer. If the offer is rejected, the sum submitted with the offer in compromise is returned to the proponent. If the offer is accepted, the proponent is notified and the case is closed. Acceptance of an offer in compromise of civil liabilities does not remit criminal liabilities, nor does acceptance of an offer in compromise of criminal liabilities remit civil liabilities.
\[T.D. ATF-301, [55 FR 47655](https://www.federalregister.gov/citation/55-FR-47655), Nov. 14, 1990, as amended by T.D. ATF-450, [66 FR 29030](https://www.federalregister.gov/citation/66-FR-29030), May 29, 2001]
#### § 70.485 Closing agreements.
(a) *In general.* The appropriate TTB officer may enter into a written agreement with any person relating to the liability of such person (or of the person or estate for whom the person acts) in respect of any tax imposed under the provisions of 26 U.S.C. enforced and administered by the Bureau for any taxable period ending prior or subsequent to the date of such agreement. A closing agreement may be entered into in any case in which there appears to be an advantage in having the case permanently and conclusively closed, or if good and sufficient reasons are shown by the taxpayer for desiring a closing agreement and it is determined by the appropriate TTB officer that the United States will sustain no disadvantage through consummation of such an agreement.
(b) *Scope of closing agreement* —
(1) *In general.* A closing agreement may be executed even though under the agreement the taxpayer is not liable for any tax for the period to which the agreement relates. There may be a series of closing agreements relating to the tax liability for a single period.
(2) *Taxable periods ended prior to date of closing agreement.* Closing agreements with respect to taxable periods which ended prior to the date of the agreement may relate to the total tax liability of the taxpayer or to one or more separate items affecting the tax liability of the taxpayer.
(3) *Taxable periods ending subsequent to date of closing agreement.* Closing agreements with respect to taxable periods ending subsequent to the date of the agreement may relate to one or more separate items affecting the tax liability of the taxpayer.
(c) *Finality.* A closing agreement which is approved within such time as may be stated in such agreement, or later agreed to, shall be final and conclusive, and, except upon a showing of fraud or malfeasance, or misrepresentation of a material fact:
(1) The case shall not be reopened as to the matters agreed upon or the agreement modified by any officer, employee, or agent of the United States, and
(2) In any suit, action, or proceeding, such agreement, or any determination, assessment, collection, payment, abatement, refund, or credit made in accordance therewith, shall not be annulled, modified, set aside, or disregarded.
However, a closing agreement with respect to a taxable period ending subsequent to the date of the agreement is subject to any change in, or modification of, the law enacted subsequent to the date of the agreement and made applicable to such taxable period, and each closing agreement shall so recite.
(d) *Procedure with respect to closing agreements* —
(1) *Submission of request.* A request for a closing agreement which relates to a prior taxable period may be submitted at any time before a case with respect to the tax liability involved is filed with a court of the United States. The procedure with respect to requests for closing agreements shall be under such rules as may be prescribed from time to time by the Administrator in accordance with the regulations under this section.
(2) *Collection, credit, or refund.* Any tax or deficiency in tax determined pursuant to a closing agreement shall be assessed and collected, and any overpayment determined pursuant thereto shall be credited or refunded, in accordance with the applicable provisions of law.
([26 U.S.C. 7121](https://www.govinfo.gov/link/uscode/26/7121))
\[T.D. ATF-301, [55 FR 47655](https://www.federalregister.gov/citation/55-FR-47655), Nov. 14, 1990]
#### § 70.486 Managerial review.
If at any step in the collection process a taxpayer does not agree with a TTB employee under the authority of the appropriate TTB officer, the taxpayer has the right to discuss the matter with the employee's immediate supervisor. The TTB employee will give the taxpayer the name and telephone number of the person to be contacted.
\[T.D. ATF-301, [55 FR 47655](https://www.federalregister.gov/citation/55-FR-47655), Nov. 14, 1990, as amended by T.D. TTB-91, [76 FR 5482](https://www.federalregister.gov/citation/76-FR-5482), Feb. 1, 2011]
## Subpart F—Application of Section 6423, Internal Revenue Code of 1954, as Amended, to Refund or Credit of Tax on Distilled Spirits, Wines, and Beer
#### Source:
T.D. ATF-376, [61 FR 31031](https://www.federalregister.gov/citation/61-FR-31031), June 19, 1996, unless otherwise noted.
### General
#### § 70.501 Meaning of terms.
When used in this subpart, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof, terms shall have the meaning ascribed in this section.
*Article.* The commodity in respect to which the amount claimed was paid or collected as a tax.
*Claimant.* Any person who files a claim for a refund or credit of tax under this subpart.
*District director of customs.* The district director of customs at a headquarters port of the district (except the district of New York, N.Y.); the area directors of customs in the district of New York, N.Y.; and the port director at a port not designated as a headquarters port.
*I.R.C.* Internal Revenue Code of 1986, as amended.
*Owner.* A person who, by reason of a proprietary interest in the article, furnished the amount claimed to the claimant for the purpose of paying the tax.
*Person.* An individual, a trust, estate, partnership, association, company, or corporation.
*Tax.* Any tax imposed by [26 U.S.C. 5001-5066](https://www.govinfo.gov/link/uscode/26/5001), or by any corresponding provision of prior internal revenue laws, and in the case of any commodity of a kind subject to a tax under any such sections, any tax equal to any such tax, any additional tax, or any floor stocks tax. The term includes an extraction denominated a “tax”, and any penalty, addition to tax, additional amount, or interest applicable to any such tax.
#### § 70.502 Applicability to certain credits or refunds.
The provisions of this subpart apply only where the credit or refund is claimed on the grounds that an amount of tax was assessed or collected erroneously, illegally, without authority, or in any manner wrongfully, or on the grounds that such amount was excessive. This subpart does not apply to:
(a) Any claim for drawback,
(b) Any claim made in accordance with any law expressly providing for credit or refund where an article is withdrawn from the market, returned to bond, or lost or destroyed, and
(c) Any claim based solely on errors in computation of the quantity of an article subject to tax or on mathematical errors in computation of the amount of the tax due, or to any claim in respect of tax collected or paid on an article seized and forfeited, or destroyed, as contraband.
#### § 70.503 Ultimate burden.
For the purposes of this subpart, the claimant, or owner, shall be treated as having borne the ultimate burden of an amount of tax only if:
(a) The claimant or owner has not, directly or indirectly, been relieved of such burden or shifted such burden to any other person,
(b) No understanding or agreement exists for any such relief or shifting, and
(c) If the claimant or owner has neither sold nor contracted to sell the articles involved in such claim, such claimant or owner agrees that there will be no such relief or shifting.
#### § 70.504 Conditions to allowance of credit or refund.
No credit or refund to which this subpart is applicable shall be allowed or made, pursuant to a court decision or otherwise, of any amount paid or collected as a tax unless a claim therefor has been filed, as provided in this subpart, by the person who paid the tax and the claimant, in addition to establishing that such claimant is otherwise legally entitled to credit or refund of the amount claimed, establishes:
(a) That the claimant bore the ultimate burden of the amount claimed, or
(b) That the claimant has unconditionally repaid the amount claimed to the person who bore the ultimate burden of such amount, or
(c) That:
(1) The owner of the article furnished the claimant the amount claimed for payment of the tax;
(2) The claimant has filed with the appropriate TTB officer the written consent of such owner to the allowance to the claimant of the credit or refund; and
(3) Such owner satisfies the requirements of [paragraph (a)](/current/title-27/section-70.504#p-70.504\(a\)) or [(b)](/current/title-27/section-70.504#p-70.504\(b\)) of this section.
#### § 70.505 Requirements on persons intending to file claim.
Any person who, having paid the tax with respect to an article, desires to claim refund or credit of any amount of such tax to which the provisions of this subpart are applicable must:
(a) File a claim, as provided in [§ 70.506](/current/title-27/section-70.506), and
(b) Comply with any other provisions of law or regulations which may apply to the claim.
### Claim Procedure
#### § 70.506 Execution and filing of claim.
Claims to which this subpart is applicable must be executed on Form 2635 (5620.8) in accordance with the instructions on the form. (For provisions relating to handcarried documents, see [27 CFR 70.304](/current/title-27/section-70.304)). Claims for credit or refund of taxes collected by district directors of customs, to which the provisions of section 6423, I.R.C., are applicable and which Customs regulations ([19 CFR Part 24](/current/title-19/part-24)—Customs Financial and Accounting Procedure) require to be filed with the appropriate TTB officer, must be executed and filed in accordance with applicable Customs regulations and this subpart. The claim must set forth each ground upon which the claim is made in sufficient detail to apprise the appropriate TTB officer of the exact basis therefor. Allegations pertaining to the bearing of the ultimate burden relate to additional conditions which must be established for a claim to be allowed and are not in themselves legal grounds for allowance of a claim. There shall also be attached to the form and made part of the claim the supporting data required by [§ 70.507](/current/title-27/section-70.507). All evidence relied upon in support of such claim shall be clearly set forth and submitted with the claim.
\[T.D.ATF-376, [61 FR 31031](https://www.federalregister.gov/citation/61-FR-31031), June 19, 1996, as amended by T.D. ATF-450, [66 FR 29030](https://www.federalregister.gov/citation/66-FR-29030), May 29, 2001]
#### § 70.507 Data to be shown in claim.
Claims to which this subpart is applicable, in addition to the requirements of [§ 70.506](/current/title-27/section-70.506) must set forth or contain the following:
(a) A statement that the claimant paid the amount claimed as a “tax” as defined in this subpart.
(b) Full identification (by specific reference to the form number, the date of filing, the place of filing, and the amount paid on the basis of the particular form or return) of the tax forms or returns covering the payments for which refund or credit is claimed.
(c) The written consent of the owner to the allowance of the refund or credit to the claimant (where the owner of the article in respect of which the tax was paid furnished the claimant the amount claimed for the purpose of paying the tax).
(d) If the claimant (or owner, as the case may be) has neither sold nor contracted to sell the articles involved in the claim, a statement that the claimant (or owner, as the case may be) agrees not to shift, directly or indirectly in any manner whatsoever, the burden of the tax to any other person.
(e) If the claim is for refund of a floor stocks tax, or of an amount resulting from an increase in rate of tax applicable to an article, a statement as to whether the price of the article was increased on or following the effective date of such floor stocks tax or rate increase, and if so, the date of the increase, together with full information as to the amount of such price increase.
(f) Specific evidence (such as relevant records, invoices, or other documents, or affidavits of individuals having personal knowledge of pertinent facts) which will satisfactorily establish the conditions to allowance set forth in [§ 70.504](/current/title-27/section-70.504).
(g) The appropriate TTB officer may require the claimant to furnish as a part of the claim such additional information as may be deemed necessary.
#### § 70.508 Time for filing claim.
No credit or refund of any amount of tax to which the provisions of this subpart apply shall be made unless the claimant files a claim therefor within the time prescribed by law and in accordance with the provisions of this subpart.
### Penalties
#### § 70.509 Penalties.
It is an offense punishable by fine and imprisonment for anyone to make or cause to be made any false or fraudulent claim upon the United States, or to make any false or fraudulent statements, or representations, in support of any claim, or to falsely or fraudulently execute any documents required by the provisions of the internal revenue laws, or any regulations made in pursuance thereof.
## Subpart G—Losses Resulting From Disaster, Vandalism, or Malicious Mischief
### Definitions
#### Source:
T.D. ATF-376, [61 FR 31033](https://www.federalregister.gov/citation/61-FR-31033), June 19, 1996, unless otherwise noted.
#### § 70.601 Meaning of terms.
When used in this subpart, terms are defined as follows in this section. Words in the plural shall include the singular, and vice versa, and words indicating the masculine gender shall include the feminine. The terms “includes” and “including” do not exclude other things not named which are in the same general class or are otherwise within the scope of the term defined.
*Alcoholic liquors or liquors.* Distilled spirits, wines, and beer lost, made unmarketable, or condemned, as provided in this subpart.
*Beer.* Beer, ale, porter, stout, and other similar fermented beverages (including sake, or other similar products) of any name or description containing one-half of 1 percent or more of alcohol by volume on which the internal revenue tax has been paid or determined, and if imported, on which duties have been paid.
*Claimant.* The person who held the liquors for sale at the time of the disaster or other specified cause of loss and who files a claim under this subpart.
*Commissioner of Customs.* The Commissioner of U.S. Customs and Border Protection, Department of Homeland Security, Washington, DC.
*Distilled spirits, or spirits.* Ethyl alcohol and other distillates such as whisky, brandy, rum, gin, vodka, in any form (including all dilutions and mixtures thereof, from whatever source or by whatever process produced), on which the internal revenue tax has been paid or determined and, if imported, on which duties have been paid.
*Duly authorized official.* Any Federal, State or local government official who is authorized to condemn liquors on which a claim is filed under this subpart.
*Duty or duties.* Any duty or duties paid under the customs laws of the United States.
*Major Disaster.* A flood, fire, hurricane, earthquake, storm, or other catastrophe defined as a “major disaster” under the Disaster Relief Act ([42 U.S.C. 5122(2)](https://www.govinfo.gov/link/uscode/42/5122)), which occurs in any part of the United States and which the President has determined causes sufficient damage to warrant “major disaster” assistance under that Act.
*Tax.*
(1) With respect to distilled spirits, “tax” means the internal revenue tax that is paid or determined on spirits.
(2) With respect to wines, “tax” means the internal revenue tax that is paid or determined on the wine.
(3) With respect to beer, “tax” means the internal revenue tax that is paid or determined on the beer.
*United States.* When used in a geographical sense includes only the States and the District of Columbia.
*Wines.* All still wines, effervescent wines, and flavored wines, on which internal revenue wine tax has been paid or determined, and if imported, on which duty has been paid.
\[T.D. ATF-376, [61 FR 31033](https://www.federalregister.gov/citation/61-FR-31033), June 19, 1996, as amended by T.D. ATF-450, [66 FR 29030](https://www.federalregister.gov/citation/66-FR-29030), May 29, 2001; T.D. TTB-196, [89 FR 87952](https://www.federalregister.gov/citation/89-FR-87952), Nov. 6, 2024]
### Payments
#### § 70.602 Circumstances under which payment may be made.
(a) *Major disasters.* The appropriate TTB officer shall allow payment (without interest) of an amount equal to the tax paid or determined, and the Commissioner of Customs shall allow payment (without interest) of an amount equal to the duty paid, on distilled spirits, wines, and beer previously withdrawn, if the liquors are lost, made unmarketable, or condemned by a duly authorized official as the result of a major disaster (as defined in [§ 70.601](/current/title-27/section-70.601)).
(b) *Other causes of loss* —
(1) *Payment.* The appropriate TTB officer shall allow payment (without interest) of an amount equal to the tax paid or determined, and the Commissioner of Customs shall allow payment (without interest) of an amount equal to the duty paid, on distilled spirits, wines, and beer previously withdrawn, if the liquors are lost, made unmarketable, or condemned by a duly authorized official as a result of:
(i) Fire, flood, casualty, or other disaster; or
(ii) Breakage, destruction, or other damage (excluding theft) resulting from vandalism or malicious mischief.
(2) *Minimum claim.* No claim of less than \$250 will be allowed for losses resulting from any disaster or damage described in [paragraph (b)(1)](/current/title-27/section-70.602#p-70.602\(b\)\(1\)) of this section.
(c) *General.* Payment under this section may be made only if:
(1) The disaster or other specified cause of loss occurred in the United States;
(2) At the time of the disaster or other specified cause of loss, the liquors were being held for sale by the claimant;
(3) Refund or credit of the amount claimed, or any part of the amount claimed, has not or will not be claimed for the same liquors under any other law or regulations; and
(4) The claimant was not indemnified by any valid claim of insurance or otherwise for the tax and/or duty on the liquors covered by the claim.
### Claims Procedures
#### § 70.603 Execution and filing of claim.
(a) *General.*
(1) Claims under this subpart must be filed on Form 2635 (5620.8).
(2) The claim shall include all the facts on which the claim is based, and be accompanied by a record of inventory of the liquors lost, made unmarketable, or condemned. (See [§ 70.604](/current/title-27/section-70.604).)
(3) The claim shall contain a statement that no other claim for refund or credit of the amount claimed, or for any part of the amount claimed, has been or will be filed under any other law or regulations.
(b) *Major disasters.* Claims for refund of tax and/or duty on liquors which were lost, became unmarketable, or were condemned as a result of a major disaster must be filed not later than 6 months from the day on which the President determines that a major disaster has occurred.
(c) *Other causes of loss.*
(1) Claims for amounts of \$250 or more for refund of tax and/or duty on liquors which were lost, became unmarketable, or were condemned as the result of:
(i) Fire, flood, casualty, or other disaster; or
(ii) Damage (excluding theft) resulting from vandalism or malicious mischief, must be filed within 6 months after the date on which the disaster or damage occurred.
(2) Claims for amounts less than \$250 will not be allowed.
\[T.D. ATF-376, [61 FR 31033](https://www.federalregister.gov/citation/61-FR-31033), June 19, 1996, as amended by T.D. ATF-450, [66 FR 29030](https://www.federalregister.gov/citation/66-FR-29030), May 29, 2001]
#### § 70.604 Record of inventory to support claims.
(a) *Claims relating to distilled spirits.* The record of inventory of distilled spirits lost, made unmarketable, or condemned, which is required to support claims filed under [§ 70.603](/current/title-27/section-70.603), shall show the following information:
(1) Name and business address of claimant (as shown on claim, Form 2635 (5620.8)).
(2) Address where the spirits were lost, became unmarketable, or were condemned, if different from the business address.
(3) Kind of spirits.
(4) Brand name.
(5) For full cases, show:
(i) Number of cases;
(ii) Serial numbers;
(iii) Bottles per case;
(iv) Size of bottles;
(v) Wine gallons per case;
(vi) Proof; and
(vii) Proof gallons.
(6) For bottles not in cases, show:
(i) Total number;
(ii) Size of bottles;
(iii) Wine gallons;
(iv) Proof; and
(v) Total proof gallons.
(7) Total proof gallons for all items.
(b) *Claims relating to wines.* The record of inventory of wines lost, made unmarketable, or condemned, which is required to support claims filed under [§ 70.603](/current/title-27/section-70.603), shall show the following information:
(1) Name and business address of claimant (as shown on claim, Form 2635 (5620.8)).
(2) Address where the wines were lost, became unmarketable, or were condemned, if different from the business address.
(3) Kind of wine.
(4) Percent of alcohol by volume.
(5) Number of barrels or kegs.
(6) Kind and number of other bulk containers.
(7) Number of full cases and bottles per case.
(8) Size of bottles.
(9) Number of bottles not in cases and wine gallons.
(10) Total wine gallons.
(c) *Claims relating to beer.* The record of inventory of beer lost, made unmarketable, or condemned, which is required to support claims filed under [§ 70.603](/current/title-27/section-70.603), shall show the following information:
(1) Name and business address of claimant (as shown on claim, Form 2635 (5620.8)).
(2) Address where the beer was lost, became unmarketable, or was condemned, if different from the business address.
(3) Number and size of barrels.
(4) *For full cases, show:*
(i) Number of cases;
(ii) Bottles or cans per case; and
(iii) Size (in ounces) of bottles or cans.
(5) Number and size of bottles and cans not in cases.
(6) Quantity in terms of 31-gallon barrels.
(7) Total quantity.
(d) *Special instructions.*
(1) Inventories of domestic liquors, imported liquors, and liquors manufactured in the Virgin Islands shall be reported separately.
(2) Liquors manufactured in Puerto Rico may not be included in claims filed under this subpart. Claims for losses of Puerto Rican liquors shall be filed with the Secretary of the Treasury of Puerto Rico under the laws of Puerto Rico.
#### § 70.605 Claims relating to imported, domestic, and Virgin Islands liquors.
(a) Claims involving taxes on domestic liquors, imported liquors, and liquors manufactured in the Virgin Islands must show the quantities of each separately in the claim.
(b) A separate claim on Form 2635 (5620.8) must be filed for customs duties.
#### § 70.606 Claimant to furnish proof.
The claimant shall furnish proof to the satisfaction of the appropriate TTB officer regarding the following:
(a) That the tax on the liquors, or the tax and duty if imported, was fully paid; or the tax, if not paid, was fully determined.
(b) That the liquors were lost, made unmarketable, or condemned by a duly authorized official, by reason of damage sustained as a result of a disaster or other cause of loss specified in this subpart.
(c) The type and date of occurrence of the disaster or other specified cause of loss, and the location of the liquors at the time.
(d) That the claimant was not indemnified by a valid claim of insurance or otherwise for the tax, or tax and duty, on the liquors covered by the claim.
(e) That the claimant is entitled to payment under this subpart.
#### § 70.607 Supporting evidence.
(a) The claimant shall support the claim with any evidence (such as inventories, statements, invoices, bills, records, labels, formulas, stamps) that is available to submit, relating to the quantities and identities of the liquors, on which duty has been paid or tax has been paid or determined, that were on hand at the time of the disaster or other specified cause of loss and alleged to have been lost, made unmarketable, or condemned as a result of it.
(b) If the claim is for refund of duty, the claimant shall furnish, if possible:
(1) The customs number;
(2) The date of entry; and
(3) The name of the port of entry.
#### § 70.608 Action on claims.
The appropriate TTB officer shall date stamp and examine each claim filed under this subpart and will determine the validity of the claim. Claims and supporting data involving customs duties will be forwarded to the Commissioner of Customs with a summary statement by the appropriate TTB officer regarding his or her findings.
### Destruction of Liquors
#### § 70.609 Supervision.
When allowance has been made under this subpart for the tax and/or duty on liquors condemned by a duly authorized official or made unmarketable, the liquors shall be destroyed by suitable means under supervision satisfactory to the appropriate TTB officer, unless the liquors were previously destroyed under supervision satisfactory to the appropriate TTB officer. The Commissioner of Customs will notify the appropriate TTB officer as to allowance under this subpart of claims for duty on unmarketable or condemned liquors.
### Penalties
#### § 70.610 Penalties.
(a) Penalties are provided in [26 U.S.C. 7206](https://www.govinfo.gov/link/uscode/26/7206) for making any false or fraudulent statement under the penalties of perjury in support of any claim.
(b) Penalties are provided in [26 U.S.C. 7207](https://www.govinfo.gov/link/uscode/26/7207) for filing any false or fraudulent document under this subpart.
(c) All laws and regulations, including penalties, which apply to internal revenue taxes on liquors shall, when appropriate, apply to payments made under this subpart the same as if the payments were actual refunds of internal taxes on liquors.
## Subpart H—Rules, Regulations and Forms
#### § 70.701 Rules and regulations.
(a) *Formulation.*
(1) Alcohol, tobacco, and firearms rules take various forms. The most important rules are issued as Treasury decisions, prescribed by the Administrator, and approved by the Secretary. Other rules may be issued over the signature of the Administrator or the signature of any appropriate TTB officer. The channeling of rules varies with the circumstances. Treasury decisions are prepared within the appropriate TTB offices. After approval by the Administrator, Treasury decisions are forwarded to the Secretary for further consideration and final approval.
(2) Where required by [5 U.S.C. 553](https://www.govinfo.gov/link/uscode/5/553), the Administrator publishes in the Federal Register general notice of proposed rules unless all persons subject thereto are named and either personally served or otherwise have actual notice thereof in accordance with law. Notice may also be published in the Federal Register in such other instances as may be desirable. This notice includes
(i) a statement of the time, place, and nature of public rulemaking proceedings;
(ii) reference to the authority under which the rule is proposed; and
(iii) either the terms or substance of the proposed rule or a description of the subjects and issues involved. Interested persons may participate in the rulemaking by submitting written data, views, or arguments. Persons may also submit requests for a public hearing. However, the Bureau reserves the right to determine, in the light of all circumstances, whether a public hearing should be held.
(3) If the Bureau determines that the public good will be served thereby, it may hold a public hearing for discussion of the issues raised by the proposed regulations. Such a hearing is announced by a notice in the Federal Register, stating the time and place where the hearing is to be held. The following rules govern the conduct of the public hearing only if incorporated by reference in the notice announcing the hearing:
(i) A person wishing to make oral comments at a public hearing shall submit, within the time prescribed in the notice of hearing, an outline of the topics he wishes to discuss, and the time he wishes to devote to each topic. Ordinarily, a period of 10 minutes is the time allotted to each person for making his oral comments.
(ii) A person making oral comments should be prepared to answer questions not only on the topics listed in his outline but also on matters relating to any written comments which he has submitted.
(iii) At the conclusion of the presentation of comments of persons listed in the agenda, to the extent time permits, other comments will be received.
(iv) Written comments submitted prior to the hearing shall be available at the hearing for inspection. Any request for copies of such written comments is treated as a request for records under [27 CFR 70.802(g)](/current/title-27/section-70.802#p-70.802\(g\)).
(v) To the extent resources permit, the public hearings to which this paragraph applies may be transcribed.
(vi) In unusual circumstances or for good cause shown, the application of rules contained in this paragraph may be waived.
(b) *Comments on proposed rules.* Interested persons may submit data, views, or arguments with respect to a notice of proposed rulemaking published pursuant to [5 U.S.C. 553](https://www.govinfo.gov/link/uscode/5/553). Procedures are provided in [§ 70.802(g)](/current/title-27/section-70.802#p-70.802\(g\)) for members of the public to inspect and obtain copies of written comments submitted in response to proposed rules. All such comments are open in their entirety to public inspection. Therefore, the Bureau does not recognize any designation of material in comments as confidential or not to be disclosed, and any material that the commenter considers to be confidential or inappropriate for disclosure to the public should not be included in his comments. The name of any person submitting comments or requesting a public hearing, the issues which may be discussed at the hearing, and outlines relating to the hearing are open to public disclosure. (See [paragraph (a)(3)](/current/title-27/section-70.701#p-70.701\(a\)\(3\)) of this section for rules relating to hearing outlines.)
(c) *Petition to change rules.* Interested persons may petition for the issuance, amendment, or repeal of a rule. A petition for the issuance of a rule shall identify the section or sections of law involved; and a petition for the amendment or repeal of a rule shall set forth the section or sections of the regulations involved. The petition shall set forth the reasons for the requested action. Such petitions shall be given careful consideration, and the petitioner shall be advised of the action taken thereon. Petitions must be addressed to the Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW, Box 12, Washington, DC 20005. A petition to establish a new American viticultural area or to modify an existing American viticultural area is subject to the rules in [part 9 of this chapter](/current/title-27/part-9).
(d) *Publication of rules and regulations* —
(1) *General.* All Alcohol and Tobacco Tax and Trade Bureau regulations and amendments thereto are published as Treasury Decisions which appear in the Federal Register, the Code of Federal Regulations, and the quarterly Alcohol and Tobacco Tax and Trade Bureau (TTB) Bulletin. The TTB Bulletin is the authoritative instrument of the Bureau for announcing Treasury decisions, legislation, administrative matters, and other items of general interest. The Bulletin incorporates, into one publication, all matters of the Bureau which are of public record. It is the policy of the Bureau to publish in the Bulletin all substantive rulings necessary to promote a uniform application of all laws administered by the Bureau as well as rulings that supersede, revoke, modify, or amend any of those previously published in the Bulletin (including those published prior to July 1, 1972, in the Internal Revenue Bulletin). Procedures relating solely to matters of internal management are not published; however, regulations appearing in internal management documents and statements of internal practices and procedures that affect the rights and duties of the public are published. Rulings and procedures reported in the Bulletin do not have the force and effect of Department of the Treasury Regulations, but they may be used as precedents. In applying published rulings and procedures, the effect of subsequent legislation, regulations, court decisions, rulings, and procedures must be considered. Concerned parties are cautioned against reaching the same conclusion in other cases unless the facts and circumstances are substantially the same. The Bulletin is published quarterly and may be obtained, on a subscription basis, from the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402.
(2) *Objectives and standards for publication of TTB Rulings and TTB Procedures in the Alcohol, Tobacco and Firearms Bulletin.*
(i)
(A) A “TTB Ruling” is an official interpretation by the Bureau that has been published in the Bulletin for the information and guidance of taxpayers, Bureau officers, and others concerned. TTB Rulings represent the conclusions of the Bureau on the application of the law to the entire state of facts involved. In those that are based on positions taken in rulings to industry members or technical advice to Bureau field offices, identifying details and confidential information are deleted to prevent unwarranted invasions of privacy and to comply with statutory requirements concerning disclosure of information obtained from the public.
(B) A “TTB Procedure” is a statement of procedure that affects the rights or duties of taxpayers or other members of the public under law and regulations administered by the Bureau or information that, although not necessarily affecting the rights and duties of the public, should be a matter of public knowledge. TTB Procedures establish methods for performing operations in compliance with the requirements of law and regulations. It is Bureau practice to publish as much of the internal management document or communication as is necessary for an understanding of the procedure. TTB Procedures may also be based on internal management documents which should be a matter of public knowledge even though not necessarily affecting the rights or duties of the public.
(ii) It is the policy of the Bureau to publish in the Bulletin all rulings and other communications to members of the public or to Bureau field offices involving substantive law, procedures affecting taxpayer's rights or duties, or industry regulations, except those involving:
(A) Issues specifically and clearly covered by statute or regulations;
(B) Issues specifically covered by rulings, procedures, opinions, or court decisions previously published in the Bulletin;
(C) Issues not likely to arise again because of unique or specific facts;
(D) Determinations of fact rather than interpretations of law;
(E) Acceptability under the law and regulations of containers, labels, and advertising involving alcoholic beverages;
(F) Tobacco operations, such as the disposition of abandoned, seized, or condemned tobacco products;
(G) Informers and informers' rewards; or
(H) Disclosure of secret formulas, processes, business practices, and other similar information.
(iii)
(A) It is the practice of the Bureau to publish as much of the ruling or communication as is necessary for an understanding of the position stated. However, in order to prevent unwarranted invasions of personal privacy and to comply with statutory provisions, such as [18 U.S.C. 1905](https://www.govinfo.gov/link/uscode/18/1905) and [26 U.S.C 6103](https://www.govinfo.gov/link/uscode/26/6103) and [7213](https://www.govinfo.gov/link/uscode/26/7213), dealing with disclosure of information obtained from members of the public, identifying details, including the names and addresses of persons involved, and information of a confidential nature are deleted from the ruling.
(B) TTB Rulings published in the Bulletin do not have the force and effect of Department of the Treasury Regulations (including amendatory Treasury decisions) but are published to provide precedents to be used in the disposition of other cases, and may be cited and relied upon for that purpose. No unpublished ruling or decision may be relied on, used, or cited by any officer or employee of the Bureau as a precedent in the disposition of other cases.
(C) Concerned persons generally may rely upon TTB Rulings published in the Bulletin in determining the Bureau treatment of their own transactions and need not request specific rulings applying the principles of a published TTB Ruling to the facts of their particular cases. However, since each TTB Ruling represents the conclusion of the Bureau as to the application of the law to the entire state of facts involved, taxpayers, Bureau personnel, and others concerned are cautioned against reaching the same conclusion in other cases unless the facts and circumstances are substantially the same. They should consider the effect of subsequent legislation, regulations, court decisions and TTB Rulings.
(D) Comments and suggestions from taxpayers or other concerned persons on TTB Rulings being prepared for publication in the Bulletin may be solicited, if justified by special circumstances. Conferences on TTB Rulings being prepared for publication will not be granted except where the Bureau determines that such action is justified by special circumstances.
(iv)
(A) The appropriate TTB officer is responsible for administering the program for the publication of TTB Rulings and TTB Procedures in the Bulletin including the standards for style and format.
(B) In accordance with the standards set forth in [paragraph (d)(2)(ii)](/current/title-27/section-70.701#p-70.701\(d\)\(2\)\(ii\)) of this section, each appropriate TTB officer is responsible for the preparation and appropriate referral for publication of TTB Rulings reflecting interpretations of substantive law made by her or his office and communicated in writing to members of the public or field offices. In this connection, the Chief Counsel is responsible for the referral to the appropriate TTB officer, for consideration for publication as TTB rulings, of interpretations of substantive law made by her or his office.
(C) In accordance with the standards set forth in [paragraph (d)(2)(ii)](/current/title-27/section-70.701#p-70.701\(d\)\(2\)\(ii\)) of this section, the appropriate TTB officers and the Chief Counsel are responsible for determining whether procedures established by an office under their jurisdiction should be published as TTB Procedures and for the initiation, content, and appropriate referral for publication of such TTB Procedures.
\[T.D. ATF-47, [43 FR 10687](https://www.federalregister.gov/citation/43-FR-10687), Mar. 15, 1978, as amended by T.D. ATF-201, [50 FR 12533](https://www.federalregister.gov/citation/50-FR-12533), Mar. 29, 1985; T.D. ATF-249, [52 FR 5962](https://www.federalregister.gov/citation/52-FR-5962), Feb. 27, 1987; Redesignated and amended by T.D. ATF-378, [61 FR 29955](https://www.federalregister.gov/citation/61-FR-29955), June 13, 1996; T.D. ATF-432, [65 FR 69253](https://www.federalregister.gov/citation/65-FR-69253), Nov. 16, 2000; T.D. ATF-450, [66 FR 29030](https://www.federalregister.gov/citation/66-FR-29030), May 29, 2001; TTB-90, [76 FR 3502](https://www.federalregister.gov/citation/76-FR-3502), Jan. 20, 2011; T.D. TTB-91, [76 FR 5482](https://www.federalregister.gov/citation/76-FR-5482), Feb. 1, 2011; T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
#### § 70.702 Forms and instructions.
(a) *Tax return forms and instructions.* Tax forms and instructions are developed by the Bureau to explain the requirements of Chapters 32, 51, 52, and 53 of Title 26 of the United States Code or regulations issued thereunder, and are issued for the assistance of taxpayers in exercising their rights and discharging their duties under such laws and regulations. The tax return forms are the instruments through which taxes are collected.
(b) *Other forms and instructions.* The Bureau provides other necessary or appropriate forms for assisting the public in complying with the technical requirements of the laws and regulations administered by the Bureau. The material contained in the forms and instructions, and the arrangement thereof, is carefully considered and is designed to lead the preparer step-by-step through an orderly accumulation of data to an accurate report of the information required.
(c) *Procurement of forms and instructions.* Forms prescribed by this part are available as provided in [§ 70.2(b)](/current/title-27/section-70.2#p-70.2\(b\)).
\[T.D. ATF-47, [43 FR 10687](https://www.federalregister.gov/citation/43-FR-10687), Mar. 15, 1978, as amended by T.D. ATF-92, [46 FR 46914](https://www.federalregister.gov/citation/46-FR-46914), Sept. 23, 1981; T.D. ATF-249, [52 FR 5962](https://www.federalregister.gov/citation/52-FR-5962), Feb. 27, 1987; T.D. 372, [61 FR 20724](https://www.federalregister.gov/citation/61-FR-20724), May 8, 1996. Redesignated and amended by T.D. ATF-378, [61 FR 29955](https://www.federalregister.gov/citation/61-FR-29955), June 13, 1996]
## Subpart I—Disclosure
#### § 70.801 Publicity of information.
For information relating to the disclosure of records that is not contained in this subpart, see [31 CFR part 1](/current/title-31/part-1) and the appendix of that part relating to the Alcohol and Tobacco Tax and Trade Bureau. Direct further questions to the Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street, Box 12, Washington, DC 20005; telephone (202) 453-2265.
\[T.D. TTB-196, [89 FR 87952](https://www.federalregister.gov/citation/89-FR-87952), Nov. 6, 2024]
#### § 70.802 Rules for disclosure of certain specified matters.
(a) *Accepted offers in compromise.* For each offer in compromise submitted and accepted pursuant to [26 U.S.C. 7122](https://www.govinfo.gov/link/uscode/26/7122) in any case arising under Chapter 32 (relating to firearms and ammunition excise taxes) and Subtitle E (relating to alcohol, tobacco, and certain other excise taxes) of Title 26 of the United States Code, under section 107 of the Federal Alcohol Administration Act ([27 U.S.C. 207](https://www.govinfo.gov/link/uscode/27/207)) in any case arising under that Act, or in connection with property seized under Title I of the Gun Control Act of 1968 (18 U.S.C., Chapter 44) or title XI of the Organized Crime Control Act of 1970 (18 U.S.C., Chapter 40), a copy of the abstract and statement relating to the offer shall be kept available for public inspection, for a period of 1 year from the date of acceptance, with the appropriate TTB officer, Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW, Box 12, Washington, DC 20005. Information may not be disclosed, however, concerning any trade secrets, processes, operations, style of work, apparatus, confidential data, or any other matter within the prohibition of [18 U.S.C. 1905](https://www.govinfo.gov/link/uscode/18/1905). “Return information” (defined at [26 U.S.C. 6103](https://www.govinfo.gov/link/uscode/26/6103) (b)) may not be disclosed except as provided by [26 U.S.C. 6103](https://www.govinfo.gov/link/uscode/26/6103) (k) (1).
(b) *Information regarding liquor permits* —(1) *Applications for permits.* Information with respect to the handling of applications for basic permits under the Federal Alcohol Administration Act ([27 U.S.C. 204](https://www.govinfo.gov/link/uscode/27/204)) is maintained for public inspection until the expiration of 1 year following final action on these applications. See [§ 1.59 of this chapter](/current/title-27/section-1.59) for more details.
(c) *List of plants and permittees.* Upon request, the appropriate TTB officer shall furnish a list of any type of qualified proprietor or permittee if the disclosure is not prohibited by law.
(d) *Information relating to certificates of label approval for distilled spirits, wine, and malt beverages.* Upon written request, the appropriate TTB officer, Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW, Box 12, Washington, DC 20005, shall furnish information as to the issuance, pursuant to section 105(e) of the Federal Alcohol Administration Act ([27 U.S.C. 205(e)](https://www.govinfo.gov/link/uscode/27/205)) and [Part 4](/current/title-27/part-4), [5](/current/title-27/part-5), or [7 of this chapter](/current/title-27/part-7), of certificates of label approval, or of exemption from label approval, for distilled spirits, wine, or malt beverages. The request must identify the class and type and brand name of the product and the name and address of the bottler or importer thereof or of the person to whom the certificate was issued. The person making the request may obtain reproductions or certified copies of such certificates upon payment of the established fees prescribed by [31 CFR 1.7](/current/title-31/section-1.7). Information will not be disclosed, however, concerning any trade secrets, processes, operations, style of work, apparatus, confidential data, or any other matter prohibited by statutes such as but not limited to [18 U.S.C. 1905](https://www.govinfo.gov/link/uscode/18/1905) or [26 U.S.C. 6103](https://www.govinfo.gov/link/uscode/26/6103).
(e) *True identity of companies authorized to use trade names.* Information regarding the true identity (name and address) of companies authorized to use trade names is available from the appropriate TTB officer, for disclosure upon request to any member of the public.
(f) *Information relating to the tax classification of a roll of tobacco wrapped in reconstituted tobacco.* Upon written request, the appropriate TTB officer, Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW, Box 12, Washington, DC 20005, shall furnish information as to a Bureau determination of the tax classification of a roll of tobacco wrapped in reconstituted tobacco. The request must identify the brand name of the product and the name and address of the manufacturer or importer. Information may not be disclosed, however, concerning any trade secrets, processes, operations, apparatus, confidential data, or any other matter prohibited by statutes such as but not limited to [26 U.S.C. 6103](https://www.govinfo.gov/link/uscode/26/6103) or [18 U.S.C. 1905](https://www.govinfo.gov/link/uscode/18/1905).
(g) *Comments received in response to a notice of proposed rulemaking.*
(1) The Bureau will post written comments received in response to a notice of proposed rulemaking to the appropriate rulemaking docket on the Regulations.gov website at *[https://www.regulations.gov](https://www.regulations.gov).* The Bureau reserves the right not to post lengthy paper comments or attachments requiring scanning, although a notice regarding the receipt of any such non-posted comments or attachments will be made to Regulations.gov. TTB will not post duplicate or anonymous comments to Regulations.gov.
(2) All comments and attachments received in response to a notice of proposed rulemaking may be inspected by any person in the Bureau's public reading room by appointment during normal business hours. Copies of comments (or portions therefore) also may be obtained. Appointment and copy requests may be addressed to the appropriate TTB officer in writing to the Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW, Box 12, Washington, DC 20005 or by telephone at 202-453-2265. A person requesting copies should allow a reasonable time for processing the request. The provisions of [31 CFR 1.7](/current/title-31/section-1.7), relating to fees, apply to requests made in accordance with this paragraph.
\[T.D. ATF-47, [43 FR 10687](https://www.federalregister.gov/citation/43-FR-10687), Mar. 15, 1978, as amended by T.D. ATF-57, [44 FR 20794](https://www.federalregister.gov/citation/44-FR-20794), May 9, 1979; T.D. ATF-201, [50 FR 12533](https://www.federalregister.gov/citation/50-FR-12533), Mar. 29, 1985; T.D. ATF-249, [52 FR 5961](https://www.federalregister.gov/citation/52-FR-5961), Feb. 27, 1987. Redesignated and amended by T.D. ATF-378, [61 FR 29955](https://www.federalregister.gov/citation/61-FR-29955), [29956](https://www.federalregister.gov/citation/61-FR-29956), June 13, 1996; T.D. ATF-450, [66 FR 29030](https://www.federalregister.gov/citation/66-FR-29030), May 29, 2001; T.D. TTB-91, [76 FR 5482](https://www.federalregister.gov/citation/76-FR-5482), Feb. 1, 2011; T.D. TTB-196, [89 FR 87952](https://www.federalregister.gov/citation/89-FR-87952), Nov. 6, 2024]
#### § 70.803 Requests or demands for disclosure in testimony and in related matters.
(a) *Authority.* The provisions of this section are prescribed under the authority of [5 U.S.C. 301](https://www.govinfo.gov/link/uscode/5/301); section 2 of Reorganization Plan No. 26 of 1950 (64 Stat. 1280); [12 U.S.C. 3412](https://www.govinfo.gov/link/uscode/12/3412); [18 U.S.C. 1905](https://www.govinfo.gov/link/uscode/18/1905); section 2(g) of the Federal Alcohol Administration Act ([27 U.S.C. 202(c)](https://www.govinfo.gov/link/uscode/27/202)); and sections 5274, 6103, 7213, 7803 and 7805 of the Internal Revenue Code of 1954 ([26 U.S.C. 5274](https://www.govinfo.gov/link/uscode/26/5274), [6103](https://www.govinfo.gov/link/uscode/26/6103), [7213](https://www.govinfo.gov/link/uscode/26/7213), [7803](https://www.govinfo.gov/link/uscode/26/7803) and [7805](https://www.govinfo.gov/link/uscode/26/7805)).
(b) *Definitions.* The following definitions apply whenever the defined terms appear in this section.
(1) *TTB officer or employee.* The terms *TTB officer* and *TTB employee* mean all officers and employees of the United States, engaged in the administration and enforcement of laws administered by the Alcohol and Tobacco Tax and Trade Bureau, and appointed or employed by, or subject to the directions, instructions or orders of, the Secretary of the Treasury or a delegate of the Secretary.
(2) *TTB records or information.* The terms *TTB records* and *TTB information* mean any records (including copies thereof) or information, made or obtained by, furnished to, or coming to the knowledge of, any TTB officer or employee while acting in their official capacity, or because of their official status, with respect to the administration of laws administered by or concerning the Alcohol and Tobacco Tax and Trade Bureau.
(3) *Demand.* The term *demand* means any subpoena, notice of deposition either upon oral examination or written interrogatory, or other order, of any court, administrative agency, or other authority.
(c) *Disclosure of TTB records or information prohibited without prior approval of the appropriate TTB officer.* The disclosure, including the production, of TTB records or information to any person outside the Department of the Treasury or to any court, administrative agency, or other authority, in response to any request or demand for the disclosure of such records or information shall be made only with the prior approval of the appropriate TTB officer. However, nothing in this section restricts the disclosure of TTB records or information for which the appropriate TTB officer has determined that the disclosure is authorized under any provision of statute, Executive order, or regulations, or for which a procedure has been established by the Administrator. For example, this section does not restrict the disclosure of TTB records or information under [§ 71.22](/current/title-27/section-71.22), nor does it restrict the disclosure of TTB records or information which is requested by U.S. attorneys or attorneys of the Department of Justice for use in cases which arise under the laws administered by or concerning the Alcohol and Tobacco Tax and Trade Bureau and which are referred by the Department of the Treasury to the Department of Justice for prosecution or defense.
(d) *Delegation of authority to determine disclosure and establish procedures.* The appropriate TTB officer is hereby authorized to determine whether or not TTB officers and employees will be permitted to disclose TTB records or information in response to:
(1) A request by any court, administrative agency, or other authority, or by any person, for the disclosure of such records or information; or
(2) A demand for the disclosure of such records or information.
(3) The Administrator is also authorized to establish such other procedures as he or she may deem necessary with respect to the disclosure of TTB records or information by TTB officers and employees. Any determination by the appropriate TTB officer as to whether TTB records or information will be disclosed, or any procedure established by the Administrator in connection therewith, must be made in accordance with applicable statutes, Executive orders, regulations, and any instructions that may be issued by the Secretary. Notwithstanding the preceding provisions of this paragraph, the appropriate TTB officer shall, where either the Secretary or such officer deems it appropriate, refer the opposing of a request or demand for disclosure of TTB records or information to the Secretary.
(e) *Procedure in the event of a request or demand for TTB records or information* —
(1) *Request procedure.* Any TTB officer or employee who receives a request for TTB records or information, the disposition of which is not covered by a procedure established by the Administrator, must promptly communicate the contents of the request to the appropriate TTB officer. The officer or employee must await instructions from the appropriate TTB officer concerning the response to the request.
(2) *Demand procedure.* Any TTB officer or employee who is served with a demand for TTB records or information, the disposition of which is not covered by a procedure established by the Administrator, must promptly, and without awaiting appearance before the court, administrative agency, or other authority, communicate the contents of the demand to the appropriate TTB officer. The TTB officer or employee must await instructions from the appropriate TTB officer concerning the response to the demand. If it is determined by the appropriate TTB officer that the demand should be opposed, the U.S. attorney, his or her assistant, or other appropriate legal representative shall be requested to respectfully inform the court, administrative agency, or other authority that the appropriate TTB officer has instructed the TTB officer or employee to refuse to disclose the TTB records or information sought. If instructions have not been received from the appropriate TTB officer at the time when the TTB officer or employee is required to appear before the court, administrative agency, or other authority in response to the demand, the U.S. attorney, his or her assistant, or other appropriate legal representative must be requested to appear with the TTB officer or employee upon whom the demand has been served and request additional time in which to receive such instructions. In the event the court, administrative agency, or other authority rules adversely with respect to the refusal to disclose the records or information pursuant to the instructions of the appropriate TTB officer, or declines to defer a ruling until instructions from the appropriate TTB officer have been received, the TTB officer or employee upon whom the demand has been served must, pursuant to this section, respectfully decline to disclose the TTB records or information sought.
(3) *Affidavit required for testimony.* If testimony of a TTB officer or employee is sought by a request or demand on behalf of a party other than a State in any case or matter in which the United States is not a party, an affidavit, or if that is not feasible, a statement shall be submitted. The affidavit or statement shall be prepared by the party (or party's attorney) seeking the testimony, and shall set forth a summary of the testimony sought and its relevance to the proceedings. The affidavit or statement must be submitted before permission to testify may be granted. The appropriate TTB officer may, upon request and for good cause shown, waive the requirement of this paragraph.
(4) *Time limit for serving request or demand.* The request or demand, together with the affidavit or statement (if required by [paragraph (e)(3)](/current/title-27/section-70.803#p-70.803\(e\)\(3\)) of this section), must be served at least 5 working days prior to the scheduled date of testimony or disclosure of records, in order to ensure that the appropriate TTB officer has adequate time to consider whether to grant the request or demand. The appropriate TTB officer may, upon request and for good cause shown, waive the requirement of this paragraph.
(5) *Factors to be considered in determining whether a request or demand will be granted.* The appropriate TTB officer must consider whether granting the request or demand would be appropriate under the relevant rules of procedure and substantive law concerning privilege. Among the requests or demands that will not be granted are those that would, if granted, result in—
(i) The violation of a statute, such as [26 U.S.C. 6103](https://www.govinfo.gov/link/uscode/26/6103) or [7213](https://www.govinfo.gov/link/uscode/26/7213), or a rule of procedure, such as the grand jury secrecy rule (F.R.Cr.P. Rule 6(e)), or a specific regulation;
(ii) The disclosure of classified information;
(iii) The disclosure of a confidential source or informant, unless the TTB officer or employee and the source or informant, have no objection;
(iv) The disclosure of investigative records compiled for law enforcement purposes if enforcement proceedings would thereby be impeded, or of investigative techniques and procedures whose effectiveness would thereby be impaired, unless the appropriate TTB officer determines that the administration of justice requires disclosure;
(v) The disclosure of trade secrets without the owner's consent; or
(vi) Testimony in a case in which TTB has no interest, records or other official information.
(f) *State cases.* The appropriate TTB officer, may, in the interest of Federal and State law enforcement, upon receipt of demands or requests of State authorities, and at the expense of the State, authorize employees under their supervision to attend trials and administrative hearings in liquor, tobacco, firearms, or explosives cases in which the State is a party or on behalf of the State in any criminal case, to produce records, and to testify as to facts coming to their knowledge in their official capacities. However, in cases where a defendant in a criminal case requests or demands testimony or the production of TTB records or information, authorization from the appropriate TTB officer is required. Production or testimony may not divulge information contrary to [26 U.S.C. 6103](https://www.govinfo.gov/link/uscode/26/6103) and [7213](https://www.govinfo.gov/link/uscode/26/7213), or [12 U.S.C. 3412](https://www.govinfo.gov/link/uscode/12/3412). See also [18 U.S.C. 1905](https://www.govinfo.gov/link/uscode/18/1905).
(g) *Penalties.* Any TTB officer or employee who disobeys the provisions of this section will be subject to dismissal and may incur criminal liability.
\[T.D ATF-57, [44 FR 27094](https://www.federalregister.gov/citation/44-FR-27094), May 9, 1979, as amended by T.D. ATF-302, [55 FR 47325](https://www.federalregister.gov/citation/55-FR-47325), Nov. 13, 1990. Redesignated by T.D. ATF-378, [61 FR 29955](https://www.federalregister.gov/citation/61-FR-29955), June 13, 1996, as amended by T.D. ATF-446a, [66 FR 19089](https://www.federalregister.gov/citation/66-FR-19089), Apr. 13, 2001; T.D. ATF-450, [66 FR 29030](https://www.federalregister.gov/citation/66-FR-29030), May 29, 2001; T.D. TTB-91, [76 FR 5482](https://www.federalregister.gov/citation/76-FR-5482), Feb. 1, 2011; T.D. TTB-196, [89 FR 87951](https://www.federalregister.gov/citation/89-FR-87951), Nov. 6, 2024]
# Part 71 — RULES OF PRACTICE IN PERMIT PROCEEDINGS
Source: https://docs.colacloud.us/regulatory/cfr-title-27/part-71
Full text of 27 CFR Part 71 — RULES OF PRACTICE IN PERMIT PROCEEDINGS. Federal regulations from the Alcohol and Tobacco Tax and Trade Bureau (TTB).
# PART 71—RULES OF PRACTICE IN PERMIT PROCEEDINGS
#### Authority:
[5 U.S.C. 551-559](https://www.govinfo.gov/link/uscode/5/551), [26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171), [5181](https://www.govinfo.gov/link/uscode/26/5181), [5271](https://www.govinfo.gov/link/uscode/26/5271), [5712](https://www.govinfo.gov/link/uscode/26/5712), [5713](https://www.govinfo.gov/link/uscode/26/5713), [7805](https://www.govinfo.gov/link/uscode/26/7805), [27 U.S.C. 204](https://www.govinfo.gov/link/uscode/27/204).
#### Source:
[21 FR 1441](https://www.federalregister.gov/citation/21-FR-1441), Mar. 6, 1956, unless otherwise noted. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and further redesignated by T.D. ATF-463, [66 FR 42734](https://www.federalregister.gov/citation/66-FR-42734), Aug. 15, 2001.
#### Editorial Note:
Nomenclature changes to part 71 appear by T.D. ATF-414, [64 FR 49084](https://www.federalregister.gov/citation/64-FR-49084), Sept. 10, 1999, and T.D. ATF-463, [66 FR 42734](https://www.federalregister.gov/citation/66-FR-42734), [42735](https://www.federalregister.gov/citation/66-FR-42735), Aug. 15, 2001.
## Subpart A—Scope and Construction of Regulations
#### § 71.1 Scope of part.
The regulations in this part govern the procedure and practice in connection with the disapproval of applications for basic permits, and for the suspension, revocation and annulment of such permits under sections 3 and 4 of the Federal Alcohol Administration Act ([27 U.S.C. 201](https://www.govinfo.gov/link/uscode/27/201) *et seq.*) and disapproval, suspension, and revocation of permits under title 26 of the U.S. Code. The regulations in this part shall also govern, insofar as applicable, any adversary proceeding involving adjudication required by statute to be determined on the record after opportunity for hearing, under laws administered by the Alcohol and Tobacco Tax and Trade Bureau.
\[[21 FR 1441](https://www.federalregister.gov/citation/21-FR-1441), Mar. 6, 1956, as amended by T.D. 6389, [24 FR 4790](https://www.federalregister.gov/citation/24-FR-4790), June 12, 1959. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975]
#### Editorial Note:
For Federal Register citations affecting [§ 71.1](/current/title-27/section-71.1), see the List of CFR Sections Affected, which appears in the Finding Aids section of the printed volume and at *[www.govinfo.gov](http://www.govinfo.gov).*
#### § 71.2 Liberal construction.
The regulations in this part shall be liberally construed to secure just, expeditious, and efficient determination of the issues presented. The Rules of Civil Procedure for the U.S. District Courts (28 U.S.C. appendix), where applicable, shall be a guide in any situation not provided for or controlled by this part but shall be liberally construed or relaxed when necessary.
([5 U.S.C. 552(a)](https://www.govinfo.gov/link/uscode/5/552) (80 Stat. 383, as amended))
\[T.D. ATF-92, [46 FR 46917](https://www.federalregister.gov/citation/46-FR-46917), Sept. 23, 1981, as amended by T.D. TTB-196, [89 FR 87952](https://www.federalregister.gov/citation/89-FR-87952), Nov. 6, 2024]
#### § 71.3 Forms prescribed.
(a) The appropriate TTB officer is authorized to prescribe all forms required by this part. All of the information called for in each form shall be furnished as indicated by the headings on the form and the instructions on or pertaining to the form. In addition, information called for in each form shall be furnished as required by this part.
(b) Forms prescribed by this part are available for printing through the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
([5 U.S.C. 552(a)](https://www.govinfo.gov/link/uscode/5/552) (80 Stat. 383, as amended))
\[T.D. ATF-92, [46 FR 46918](https://www.federalregister.gov/citation/46-FR-46918), Sept. 23, 1981, as amended by T.D. ATF-372, [61 FR 20725](https://www.federalregister.gov/citation/61-FR-20725), May 8, 1996; T.D. TTB-44, [71 FR 16964](https://www.federalregister.gov/citation/71-FR-16964), Apr. 4, 2006; T.D. TTB-196, [89 FR 87952](https://www.federalregister.gov/citation/89-FR-87952), Nov. 6, 2024]
#### § 71.4 Delegations of the Administrator.
Most of the regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.71, Delegation of the Administrator's Authorities in [27 CFR Part 71](/current/title-27/part-71), Rules of Practice in Permit Proceedings. You may obtain a copy of this order by accessing the TTB Web site (*[https://www.ttb.gov](https://www.ttb.gov)*) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
\[T.D. TTB-44, [71 FR 16964](https://www.federalregister.gov/citation/71-FR-16964), Apr. 4, 2006, as amended by T.D. TTB-196, [89 FR 87952](https://www.federalregister.gov/citation/89-FR-87952), Nov. 6, 2024]
## Subpart B—Definitions
#### § 71.5 Meaning of terms.
When used in this part and in forms prescribed under this part, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof, terms shall have the meaning ascribed in this subpart. Words in the plural form shall include the singular, and vice versa, and words importing the masculine gender shall include the feminine. The terms “include” and “including” do not exclude things not enumerated which are in the same general class.
*Administrative law judge.* The person appointed pursuant to [5 U.S.C. 3105](https://www.govinfo.gov/link/uscode/5/3105), designated to preside over any administrative proceedings under this part.
*Administrator.* The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
*Applicant.* Any person who has filed an initial application for a permit under the Federal Alcohol Administration Act or the Internal Revenue Code (26 U.S.C.).
*Application.* Any application for a permit under the Federal Alcohol Administration Act or the Internal Revenue Code (26 U.S.C.) for operations not covered by an existing permit.
*Appropriate TTB officer.* An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.71, Delegation of the Administrator's Authorities in [27 CFR Part 71](/current/title-27/part-71), Rules of Practice in Permit Proceedings.
*Attorney for the Government.* The attorney in the appropriate office of Chief Counsel authorized to represent the appropriate TTB officer in the proceeding.
*CFR.* The Code of Federal Regulations.
*Citation.* Includes any notice contemplating the disapproval of an application or any order to show cause why a permit should not be suspended, revoked or annulled.
*Initial decision.* The decision of the appropriate TTB officer or administrative law judge in a proceeding on the suspension, revocation or annulment of a permit.
*Other term.* Any other term defined in the Federal Alcohol Administration Act ([27 U.S.C. 201](https://www.govinfo.gov/link/uscode/27/201)), the Internal Revenue Code (26 U.S.C.) or the Administrative Procedure Act ([5 U.S.C. 551](https://www.govinfo.gov/link/uscode/5/551)), where used in this part, shall have the meaning assigned to it therein.
*Permit* —
(a) *Alcohol fuel permit.* The document issued under [26 U.S.C. 5181](https://www.govinfo.gov/link/uscode/26/5181), authorizing the person named therein to engage in the business described therein.
(b) *Basic permit.* The document authorizing the person named therein to engage in a designated business or activity under the Federal Alcohol Administration Act.
(c) *Industrial use permit.* The document issued under [26 U.S.C. 5271(a)](https://www.govinfo.gov/link/uscode/26/5271), authorizing the person named therein to withdraw and use distilled spirits free of tax in accordance with [part 22 of this chapter](/current/title-27/part-22), or withdraw and deal in or use specially denatured spirits in accordance with [part 20 of this chapter](/current/title-27/part-20), as described therein.
(d) *Operating permit.* The document issued under [26 U.S.C. 5171](https://www.govinfo.gov/link/uscode/26/5171), authorizing the person named therein to engage in the business described therein.
(e) *Tobacco permit.* The document issued under [26 U.S.C. 5713(a)](https://www.govinfo.gov/link/uscode/26/5713), authorizing the person named therein to engage in the business described therein.
*Permittee.* Any person holding a basic permit under the Federal Alcohol Administration Act or the Internal Revenue Code (26 U.S.C.).
*Person.* An individual, trust, estate, partnership, association, company, or corporation.
*Recommended decision.* The advisory decision of the administrative law judge in any proceeding on an initial application for a permit.
*Respondent.* Any person holding a permit against which an order has been issued to show cause why such permit should not be suspended, revoked or annulled.
\[T.D. ATF-48, [43 FR 13543](https://www.federalregister.gov/citation/43-FR-13543), Mar. 31, 1978; [44 FR 55845](https://www.federalregister.gov/citation/44-FR-55845), Sept. 28, 1978, and amended by T.D. ATF-62, [44 FR 71696](https://www.federalregister.gov/citation/44-FR-71696), Dec. 11, 1979; T.D. ATF-199, [50 FR 9196](https://www.federalregister.gov/citation/50-FR-9196), Mar. 6, 1985; T.D ATF-244, [51 FR 45762](https://www.federalregister.gov/citation/51-FR-45762), Dec. 22, 1986; T.D. ATF-374, [61 FR 29956](https://www.federalregister.gov/citation/61-FR-29956), June 13, 1996; T.D. ATF-414, [64 FR 49084](https://www.federalregister.gov/citation/64-FR-49084), Sept. 10, 1999; T.D. TTB-44, [71 FR 16964](https://www.federalregister.gov/citation/71-FR-16964), Apr. 4, 2006; T.D. TTB-196, [89 FR 87952](https://www.federalregister.gov/citation/89-FR-87952), Nov. 6, 2024]
## Subpart C—General
#### § 71.25 Communications and pleadings.
All communications to the Government regarding the procedures set forth in this part and all pleadings, such as answers, motions, requests, or other papers or documents required or permitted to be filed under this part, relating to a proceeding pending before an administrative law judge, shall be addressed to the administrative law judge, at his post of duty or to the administrative law judge, in care of the appropriate TTB officer to be forwarded to the examiner. Communications concerning proceedings not pending before an administrative law judge, should be addressed to the appropriate TTB officer or the Administrator, as the case may be. All pleadings should be filed in quadruplicate.
\[[21 FR 1441](https://www.federalregister.gov/citation/21-FR-1441), Mar. 6, 1956. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-374, [61 FR 29957](https://www.federalregister.gov/citation/61-FR-29957), June 13, 1996]
#### § 71.26 Service on applicant or respondent.
All orders, notices, citations, motions and other formal documents, except subpoenas, required to be served under the regulations in this part may be served by mailing a signed duplicate original copy thereof to the permittee or applicant by registered mail, with request for return receipt card, at the address stated in his permit or application or at his last known address, or by delivery of such original copy to the permittee or applicant personally, or in the case of a corporation, partnership, or other unincorporated association, by delivering the same to an officer, or manager, or general agent thereof, or to its attorney of record. Such personal service may be made by any employee of the Alcohol and Tobacco Tax and Trade Bureau or by any employee of the Treasury Department designated by the Secretary. A certificate of mailing and the return receipt card, or certificate of service signed by the person making such service, shall be filed as a part of the record.
\[[21 FR 1441](https://www.federalregister.gov/citation/21-FR-1441), Mar. 6, 1956. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [44 FR 55846](https://www.federalregister.gov/citation/44-FR-55846), Sept. 28, 1979]
#### § 71.27 Service on the appropriate TTB officer or Administrator.
Pleadings, motions, notices, and other formal documents, except subpoenas, may be served, by registered mail or personally, on the appropriate TTB officer (or upon the attorney for the Government on behalf of the appropriate TTB officer, or on the Administrator, if the proceeding is before him or her for review on appeal).
\[[21 FR 1441](https://www.federalregister.gov/citation/21-FR-1441), Mar. 6, 1956. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, as amended by T.D. ATF-374, [61 FR 29957](https://www.federalregister.gov/citation/61-FR-29957), June 13, 1996; T.D. TTB-91, [76 FR 5482](https://www.federalregister.gov/citation/76-FR-5482), Feb. 1, 2011; T.D. TTB-196, [89 FR 87952](https://www.federalregister.gov/citation/89-FR-87952), Nov. 6, 2024]
### Time
#### § 71.28 Computation.
In computing any period of time prescribed or allowed by this part, the day of the act, event or default after which the designated period of time is to run, is not to be included. The last day of the period to be computed is to be included, unless it be a Saturday, Sunday or legal holiday, in which event the period runs until the next day which is neither a Saturday, Sunday or legal holiday. Pleading, requests, or other papers or documents required or permitted to be filed under this part must be received for filing at the appropriate office within the time limits, if any, for such filing.
#### § 71.29 Continuances and extensions.
For good cause shown, the administrative law judge, Administrator, or the appropriate TTB officer, as the case may be, may grant continuances and as to all matters pending before him or her extend any time limit prescribed by the regulations in this part (except where the time limit is statutory).
([26 U.S.C. 7805](https://www.govinfo.gov/link/uscode/26/7805) (68A Stat. 917), [27 U.S.C. 205](https://www.govinfo.gov/link/uscode/27/205) (49 Stat. 981 as amended), [18 U.S.C. 926](https://www.govinfo.gov/link/uscode/18/926) (82 Stat. 959), and Sec. 38, Arms Export Control Act ([22 U.S.C. 2778](https://www.govinfo.gov/link/uscode/22/2778), [90](https://www.govinfo.gov/link/uscode/22/90) Stat. 744))
\[[21 FR 1441](https://www.federalregister.gov/citation/21-FR-1441), Mar. 6, 1956. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-48, [43 FR 13531](https://www.federalregister.gov/citation/43-FR-13531), Mar. 31, 1978; T.D. ATF-374, [61 FR 29957](https://www.federalregister.gov/citation/61-FR-29957), June 13, 1996; T.D. TTB-196, [89 FR 87952](https://www.federalregister.gov/citation/89-FR-87952), Nov. 6, 2024]
### Representation at Hearings
#### § 71.30 Personal representation.
Any individual or member of a partnership may after adequate identification, appear for himself, or such partnership, and a corporation or association may be represented by a bona fide officer of such corporation or association, upon showing of adequate authorization.
#### § 71.31 Attorneys and other representatives.
A respondent or applicant may be represented by an attorney, certified public accountant, or other person enrolled to practice before the Alcohol and Tobacco Tax and Trade Bureau under [31 CFR part 8](/current/title-31/part-8)—Practice before the Alcohol and Tobacco Tax and Trade Bureau. The representative shall file in the proceeding a duly executed power of attorney to represent the applicant or respondent. See [26 CFR 601.501](/current/title-26/section-601.501) through [601.527](/current/title-26/section-601.527) (conference and practice requirements). The appropriate TTB officer shall be represented in proceedings under this part by the attorney for the Government who is authorized to execute and file motions, briefs, and other papers in the proceeding, on behalf of the appropriate TTB officer, in his own name as “Attorney for the Government”.
([5 U.S.C. 552(a)](https://www.govinfo.gov/link/uscode/5/552) (80 Stat. 383, as amended))
\[T.D. ATF-48, [44 FR 55846](https://www.federalregister.gov/citation/44-FR-55846), Sept. 28, 1979, as amended by T.D. ATF-92, [46 FR 46918](https://www.federalregister.gov/citation/46-FR-46918), Sept. 23, 1981; T.D. ATF-374, [61 FR 29957](https://www.federalregister.gov/citation/61-FR-29957), June 13, 1996; T.D. TTB-196, [89 FR 87952](https://www.federalregister.gov/citation/89-FR-87952), Nov. 6, 2024]
## Subpart D—Compliance and Settlement
#### § 71.35 Opportunity for compliance.
Except in proceedings involving willfulness or those in which the public interest requires otherwise, and the appropriate TTB officer so alleges in his citation, stating his reasons therefor, no permit shall be suspended, revoked or annulled, unless, prior to the institution of proceedings, facts or conduct warranting such action shall have been called to the attention of the permittee by the appropriate TTB officer, in writing, and the permittee shall have been accorded an opportunity to demonstrate or achieve compliance with all lawful requirements, as set forth in section 9(b) of the Administrative Procedure Act. If the permittee fails to meet the requirements of the law and regulations within such reasonable time as may be specified by the appropriate TTB officer, proceedings for suspension, revocation or annulment of the permit shall be initiated.
\[[21 FR 1441](https://www.federalregister.gov/citation/21-FR-1441), Mar. 6, 1956. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-199, [50 FR 9196](https://www.federalregister.gov/citation/50-FR-9196), Mar. 6, 1985; T.D. ATF-374, [61 FR 29957](https://www.federalregister.gov/citation/61-FR-29957), June 13, 1996]
### Informal Settlement
#### § 71.36 General.
In all proceedings in which a permittee is cited to show cause why the permit should not be suspended, revoked or annulled, the permittee shall be afforded opportunity for the submission and consideration of facts, arguments, offers of settlement, or proposals of adjustment, where time, the nature of the proceeding, and the public interest permit. Such submittals should be made to the appropriate TTB officer, but may be made through the attorney for the Government. Where necessary, the date of the hearing may be postponed, pending consideration of such proposals, when they are made in good faith and not for the purpose of delay. If proposals of settlement are submitted, and they are considered unsatisfactory, the appropriate TTB officer may reject the proposals and may, either directly or through the attorney for the Government, inform the permittee of any conditions on which the alleged violations may be settled. If the proposals of settlement are considered satisfactory to the appropriate TTB officer, the permittee shall be notified thereof and the proceeding shall be dismissed, unless such proposals of settlement include a monetary offer in compromise considered satisfactory to the appropriate TTB officer, in which event the proceeding shall be held in abeyance pending final action on such monetary offer in compromise.
\[T.D. ATF-244, [51 FR 45762](https://www.federalregister.gov/citation/51-FR-45762), Dec. 22, 1986, as amended by T.D. ATF-374, [61 FR 29957](https://www.federalregister.gov/citation/61-FR-29957), June 13, 1996]
#### § 71.37 Notice of contemplated action.
Where the appropriate TTB officer believes that the matter may be settled informally, i.e., without formal administrative proceedings, he shall, in accordance with section 5 (b) of the Administrative Procedure Act, prior to the issuance of a citation, inform the permittee of the contemplated issuance of an order to show cause why his permit should not be suspended, revoked or annulled, and that he is being given an opportunity for the submission and consideration of facts, arguments, offers of settlement, or proposals of adjustment. The notice should inform the permittee of the charges on which the citation would be based, if issued, and afford him a period of 10 days from the date of the notice, or such longer period as the appropriate TTB officer deems necessary, in which to submit proposals of settlement to the appropriate TTB officer. Where informal settlement is not reached promptly because of inaction of the permittee or proposals are made for the purpose of delay, a citation shall be issued in accordance with [§§ 71.55](/current/title-27/section-71.55) and [71.56](/current/title-27/section-71.56).
\[[21 FR 1441](https://www.federalregister.gov/citation/21-FR-1441), Mar. 6, 1956. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-199, [50 FR 9196](https://www.federalregister.gov/citation/50-FR-9196), Mar. 6, 1985; T.D. ATF-244, [51 FR 45763](https://www.federalregister.gov/citation/51-FR-45763), Dec. 22, 1986; T.D. ATF-374, [61 FR 29957](https://www.federalregister.gov/citation/61-FR-29957), June 13, 1996]
#### § 71.38 Limitation on informal settlement.
Where the evidence is conclusive and the nature of the violation is such as to preclude any settlement short of suspension, revocation or annulment, or the violation is of a continuing character that necessitates immediate action to protect the public interest, or where the appropriate TTB officer believes that any informal settlement of the alleged violation will not insure future compliance with the laws and regulations, or in any similar case where the circumstances are such as to clearly preclude informal settlement, and the appropriate TTB officer so finds and states his reasons therefor as provided in [§ 71.35](/current/title-27/section-71.35), he may restrict settlement to that provided in [§ 71.71](/current/title-27/section-71.71).
\[[21 FR 1441](https://www.federalregister.gov/citation/21-FR-1441), Mar. 6, 1956. Redesignated at [40 FR 16835](https://www.federalregister.gov/citation/40-FR-16835), Apr. 15, 1975, and amended by T.D. ATF-199, [50 FR 9197](https://www.federalregister.gov/citation/50-FR-9197), Mar. 6, 1985; T.D. ATF-374, [61 FR 29957](https://www.federalregister.gov/citation/61-FR-29957), June 13, 1996]
## Subpart E—Grounds for Citation
#### § 71.45 Basic permits.
W