Transfer to Bonded Warehouse

[agporte]

Say you own a distillery and a warehouse down the street for storing finished/bottled product.  When you transfer from your bonded distillery to your bonded warehouse would you need to submit an application for transfer in bond to the ttb?  It would be leaving one bonded area, but then arriving at another bonded area owned by the same entity.  Same question for barrels.  When you barrel at the distillery and ship off-site for aging does any paper-work need to be submitted?

Another way to look at it.  Is a Transfer-In-Bond only required when transferring ownership from one entity to another?

 

[bluestar]

If they are operating under the same DSP, no. But you have to have record that is was moved somewhere. I believe the TIB is only required moving from one DSP to another DSP/warehouse with a separate permit.

[agporte]

Specifically I was looking to see if I was paying my excise tax too early when transferring to the North Carolina ABC warehouse.  The commissioner of the ABC was surprised when I said that I pay federal tax when it leaves my distillery.  In his mind we still own it.  We also had to get a TTB permit where we are set up as a "wholesaler" with their warehouse address. However, I just checked this permit and it is not an extension of our DSP and from what I can tell only allows us to store tax-paid product as if we were a liquor distributor.  So in this case I am paying tax at the correct time.

If I had my own off-site storage, sounds like I would just need to extend my DSP and bond to include that space and then no TIB would be needed.

[bluestar]

But if you have to separate TTB permits for the two locations, then I do believe you have to TIB.

[dhdunbar]

Let me join in.  

1.  Ownership is not the issue.  Which DSP - which plant - is responsible, i.e., which plant files the reports and pays the taxes, is the issue.

2.  If two locations are the same DSP - non contiguous premises - there is a consent of surety on file by which the same bond covers both locations and any spirits in transit between them.  They are one DSP.  A DSP does not transfer spirits to itself.

3.  If there are two DSPs, then it does not matter who owns them or the spirits, there must be a transfer in bond.  Bluestar is correct.  

4. The NC warehouse is a bailment warehouse.  Because the state requires that you get a federal wholesaler's permit at its ABC warehouse location, you make application to do so.  Although I could argue, successfully I think, that TTB would not require a wholesaler's permit there, since the ABC demands, TTB accommodates.  

5.  You own the product there - title transfers when the ABC ships it to a local entity to whom you make the actual sale.  But Bluestar is correct again,  at the time that you ship to the state warehouse, the product has been withdrawn from bond and must be tax determined at the time of the withdrawal.  Therefore you are going to have to have a shipping record that shows the shipment from your DSP to the ABC warehouse.  If that record is your record of taxdetermination, it must contain sufficient information that a TTB employee can determine the taxes due on the shipment.

6.   You are paying your taxes at the correct time if you pay them within 14 days of the last day of the tax return period (semimonthly or quarterly) during which they were removed.  

7.  For any number of reasons, TTB will never approve the ABC warehouse as an extension of your DSP premises, even if they directly abutt. 

 

[agporte]

Great feedback @dhdunbar I really appreciate it!

Hopefully this will help all future NC distillers, because it is confusing and often misunderstood.