Forms Question

[Georgeous]

Question for the veterans out there. If I get a tote of beer from a local brewery what form do I need to fill out to transfer to my DSP?

[dhdunbar]

I'm surprise no one answered this, but it is stuck in general discussion.  You do not need a "form."  The local brew will be hard pressed to find this in his copy of the beer regulations.  Part 25 provides only for the removal of beer withoutr payment of tax, from the brewery, by pipeline,m to a contiguous DSP.  Tell the brewer not to fret.  The brewer regulations were never amended to reflect changes made by a 1997 amendment of the Internal Revenue Code.  Yea, I know that is 20 years, but it is true.  The DSP regulations were amended and we rely on them.

Sec. 19.296 , headed "Fermented materials" provides that a DSP may receive, as fermenting material, "beer received from a brewery without payment of tax, or beer that was removed from a brewery upon determination of tax."  This can be from any brewery.  It does not need to be contiguous.  Note that there is no reference to "in bond."  For wonks, that is because (1) the tax on beer does not attach until it is removed for consumption or sale, so (2) beer on a brewery premises is not "in bond," as are spirits on a DSP premises, where the tax attaches to the spirits at the time they come into existence.  DSP's need an operating bond and a withdrawal bond.  Brewers need only the withdrawal bond.

Yes, in common use of the language, the removal of beer for delivery to a DSP would be a removal for sale, seemingly triggering a tax liability, but definitions matter.   The term {"removed for consumption or sale is defined in part 25."    As used in part 25 it means, "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."  Since beer sent to a DSP as fermenting material (not for consumption in the DSP's tasting room :-)) is withdrawn free of tax, it is not a removal for consumption or sale.  The tax does not attach.  The beer is not in bond.  The brewery just ships it.  It does not enter your bond (but is received on your bonded premises). 

The regulations require records of the beer you receive and use.  You (the DSP)DSP must record the receipt and use in your  daily production records (19.584).  You will need to keep commercial documents, like the brewers invoice or bill of lading, to substantiate the receipt.   And, although the regulations are silent on this, you will need to have records that substantiate label claims.  Because the beer comes from a brewery, it will be a 100% grain product, suitable for whiskey production as well as NSG, but if you want to claim that the resulting distillate meets the standard of rye whiskey, for example, the brew must provide a statement that the beer it ships you was made from a grain bill of at least 51% rye.