dhdunbar

Ask TTB. I'm serious. They won't be able to tell you. Yes, it is information required by the regulations, but how did that come to be? I don't know. I'll guess. If you are going to establish a DSP FOR STORAGE ONLY, i.e., no production or processing, if it has a capacity to store less than 250K wine gallons, you have to ask TTB's permission. That is the only provision that I find relevant to the wine gallon capacity and I know my way around part 19. So ... make what I would call a SWAG - a scientific wild ass guess. And be generous. TTB doesn't want you to have to amend an application over such matters any more than you want to have to do so.

You do not need to include, in the equipment list, any portable bulk containers having a capacity of less than 101 gallons. Sec. 19.75 Major equipment - As required by Sec. 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 Sec. 19.182 (perks, small totes, etc.). The only problem with that is that 19.182 does not contain criteria for determining if something as a tank. It contains requirements for how you must equip a tank if you have a tank, but it does not say what a tank is.

You do not need to pitch the yeast. Section 19.296 authorizes you to receive beer from persons who are qualified as brewers. Let's assume you get beer. As Bluestar says, there is a difference between the requirements for beer and wine and it has to do with when tax attaches and thus, as he says, to the bonding requirement. You won't find any guidance on receipts of beer under the provisions covering receipts in bond. The reason is simple enough. Wine is in bond, but beer is not. It is not in bond because the tax does not attach - and this is for beer only, not wine or spirits - until it is removed for consumption and sale. A removal for consumption or sale is any removal that is made except those made without payment of tax. Removals to a distillery for use as DM are removals without payment of tax. All of that comes from part 25, which also requires that the brewer make a record of removals without payment of tax that show the date of the removal, the quantity removed, and the person to whom it was delivered. That is all the regulations say the brewer's record must show. Let's close that book and turn to part 19. Since the beer is not in bond, you will not find any guidelines in the provisions of part 19 related transfers and receipts in bond. Look instead for the term "fermented material." That leads you to 19.296, which simple says you can receive beer from a brewery. [If you receive unfermented grains that have been cooked, it is treated as a receipt of fermenting material, like corn, and reported in gallons, not pounds. But let's go on assuming it is beer.] The DSP production record requirement is in 19.584. It requires only that you make a record of fermented material (beer or wine) that you receive. it provides no detail of what the record must show. It is easy to assume it means gallons, especially in the light of the daily record requirement at 19.581. That section requires a daily record showing, for materials intended for use in the production of spirits, the kind and the quantity, with liquids recorded in gallons, as Bluestar says. Next, 19.571 includes, as records you must keep, "all supplemental, auxiliary, and source data that a proprietor uses to compile required forms, records, and summaries, and to prepare reports ..." Part 25, the beer regulations(25.291), requires that the brewer to make a record of removed without payment of tax. The record must show the date of removal, the person to whom it was shipped, and the quantity. That is all. So this seems to be a very simple sort of accounting. Who sent it to you, when did you receive it, and how much was it. So much for what the regulations say explicitly about what the records must show. Now let's get wonky. What is not said is probably more important. The records you must keep as a distiller must show the kind of spirits you produce, as do the operating reports, and, oh yea, the labels on the bottles. Compliance requires that you must know what materials were fermented to make the beer. If you did not ferment the materials, then the brewer must tell you the materials from which it fermented the beer (yes, this is also true of wine). For example, we all know that the class whiskey = all grain, and that the type bourbon must be 51% or more corn. You cannot know if you have bourbon unless you know the mash was produced from 100% grain, of which 51% or more was corn. You can assume 100% grain because it came from a brewery, which must use only grain. But what about the grain bill? Make sure the record you receive from the brewer contains more than the minimal information required. Make sure it is sufficient to demonstrate that the product is indeed bourbon or rye or malt whiskey, is you are going to show a class and type. Think about the possible consequences of not being able to prove that the spirits in the bottle labeled as bourbon meet the standard of identity for bourbon. Remember, you may loving age it for three years or more, i.e,, beyond the period for which a brewer must maintain records covering the beer he sent you as DM. Write him to ask, after the three years has expired, and he might reply, I don't have those records any longer. Where are you then? I went wonky, but end up with a potentially knee breaker.

Good catch, but they know it. The gauging manual contains the following: § 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. Table 4 [TTB editorial note: Erratum on page 549, Proof of 173.7 proof should read Wine gallon per pound of 0.14233] I didn't know that until I started poking around. The tables have been around since dirt and I figured someone had to have caught this before. They had. TTB should update the tables, but ...

TTB's regulations provide (Sec. 19.409 ) 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... Again, I know little about the Customs regulations and am not even confident that I can figure out the questions to ask. I suspect that the manipulation in a CMBW or other customs facility is going to be cost prohibitive. "Suspect" is a carefully choshen word. I use it because I simply lack knowledge. Also, I am not sure of the manner in which Customs uses the word duty. A quick Google search of "transfer of distilled spirits from Customs to Internal Revenue Bond leads to: § 141.102 When deposit of estimated duties, estimated taxes, or both not required. Entry or withdrawal for consumption in the following situations may be made without depositing the estimated Customs duties, or estimated taxes, or both, as specifically noted: (a)Cigars and cigarettes. A qualified dealer or manufacturer may enter or withdraw for consumption cigars, cigarettes, and cigarette papers and tubes without payment of internal revenue tax in accordance with § 11.2a of this chapter. (b)Bulk distilled spirits transferred to the bonded premises of a distilled spirits plant. An importer may transfer distilled spirits in bulk to the bonded premises of a distilled spirits plant, without the payment of tax, under the provisions of section 5232(a), Internal Revenue Code of 1986 ( 26 U.S.C. 5232(a)), and the regulations of the Bureau of Alcohol, Tobacco and Firearms ( 27 CFR part 251). The reference to ATF, instead of TTB, dates the regulation, but it may be a simple housekeeping matter that has not been resolved. The phrase "estimated Customs duties, or estimated taxes, or both" implies that the duty is different than the tax, but .... IRC regulations [19.223(e)] go on, "[W]hen 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, 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. So, I know you do not pay the taxes upon transfer from customs to IRC bond,, but whether a separate duty is due, I don't know. As you can see 19.409, which I quote above, if you transfer from Customs to IRC bond, the spirits are treated in the manner of domestic spirits that are held in bond. That means that the tax is not due until you do something that triggers the liability, and removals from IRC bond for export are done without payment of tax. They are not tax free, which means that you remove them without payment, but before you are relieved of the tax, you must prove the exportation, which occurs if you deposit them into a customs bonded warehouse or have them ladened onto a ship. There are rules that cover the relief. Hopefully, this bit of free advice gives you a place from which you can start to pursue the alternatives. Send me a personal message if you would like me to pursue this further, since it will take some time to do so, which comes under the heading, "That's my business :-)."

Well, you have hit upon an esoteric enterprise. When you get involved with import and export, you always want to deal with Customs through a customs broker. Period. I consult for distilleries and I would never say that you always, or even usually, want to use the services of someone of my ilk when dealing with TTB. It is not necessary. When dealing with Customs, it is. Did I say, "Period?" I am not competent to comment on your question, at least not in detail. I will refer you, instead, to a Customs' webpage that discusses their bonded warehouses. They come in a variety of flavors. See https://www.cbp.gov/sites/default/files/documents/bonded_20wh2_2.pdf. Two of those flavors are described as follows: 6. Bonded warehouses established for the manufacture in bond, solely for exportation, of articles made in whole or in part of imported materials or of materials subject to internal revenue tax; and for the manufacture for domestic consumption or exportation of cigars made in whole of tobacco imported from one country; and 8. Bonded warehouses established for the cleaning, sorting, repacking, or otherwise changing the condition of, but not the manufacturing of, imported merchandise, under CBP supervision, and at the expense of the proprietor. I know just enough to be dangerous. Contact a customs broker for reliable information. I'd also be interested in knowing why you would not simply import it in bulk into the DSP, then remove it for export without payment of tax once it is bottled? Those are transactions of which I do have some knowledge.

I've been too busy to look here much lately. Nonbeverage bitters are not covered by TTB labeling requirements. They are covered by the FDA labeling rules for foods. You may not make nonbeverage products on DSP premises (19.344(b). See also the definition of eligible flavors at 19.1. You may alternate DSP premises to premises for the production of eligible flavors (`19.143(a)(4). The rules re the manufacture of nonbeverage products are not found in part 19. See part 17. Basically, the DSP pays the tax on the removal to the nonbeverage facility, and the manufacturer then claims a drawback of $1.00 less than the tax rate (which makes it $12.50 a pg) for all products made under a formula TTB has approved for the product manufactured.

You've got to know two laws - the law of the state from which you are shipping AND the law of the state into which you are shipping. Because it is a big wine state, California makes special dispensations for brandy. It does not follow that Iowa will do the same.

I'll take a look at this through the regulations. The BAM is good, but it does not get down to how TTB makes decisions, so it is not of a great deal of use in deciding how to frame issues if you would like to get a change. Tom Lenerz, and perhaps others in this thread too, is correct. Vermouth is a wine in TTB's eyes and therefore you make it on winery premises, not DSP premises. It is a separate qualification. To call it vermouth it has to fit the standard stated above. Next, the spirits labeling regulations (part 5) define distilled spirits and the definition makes reference to wine. A distilled spirit is "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” shall 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." Thus, one can extrapolate to a rule, "The term distilled spirits shall include mixtures containing wine, including mixtures bottled at 48 degrees of proof or less, if the mixture does not contain more than 50 percent wine on a proof gallon basis." That blows the 2.5% limit out of the water except where the standard for the class and type impose a limit of not more than 2.5%. For example, Class 8, Cordials and Liqueurs, has a type "rye liqueur (and other whiskey types) that states, "(2) “Rye liqueur”, “bourbon liqueur” (rye, bourbon cordial) are liqueurs, bottled at not less than 60° proof, 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 21/2percent limitation provided in §5.23 for coloring, flavoring, and blending materials. The 2.5 limitation in section 5.23 addresses whether the additions of harmless coloring, flavoring and blending material, to which Silk City and perhaps others too, mentions. changes the class and type. Some do; some do not. 5.23 provides, in pertinent part, "(2) There may be added to any class or type of distilled spirits, without changing the class or type thereof, (i) such harmless coloring, flavoring, or blending materials as are an essential component part of the particular class or type of distilled spirits to which added, and (ii) harmless coloring, flavoring, or blending materials such as caramel, straight malt or straight rye malt whiskies, fruit juices, sugar, infusion of oak chips when approved by the Administrator, or wine, which are not an essential component part of the particular distilled spirits to which added, but which are customarily employed therein in accordance with established trade usage, if such coloring, flavoring, or blending materials do not total more than 21/2 percent by volume of the finished product." The customary use provision came into play when TTB decided whether the addition of wine to American type whiskey is allowed without changing class and type. That is another subject, but I thought I should mention it here, lest someone take a wrong way turn up a one way street. Those who look at the BAM have an advantage here, because prior to the ruling on general use formulas, there were no higher level documents that discussed the issue of why bourbon is treated differently from rye whiskey when it comes to the addition of harmless coloring, flavoring and blending materials within the 2.5% limit. If you do not have need to understand that issue (say you do not plan to "finish" bourbon in port barrels), do not wade into that pool. Finally, the specialty provisions apply because they give you the ability to create products other than those that conform to class and type designations. Here, the limits imposed by the definition of distilled spirits, where this post started, determine if you can label it as a spirits product.

In a January 2016 document (I doubt much has changed since then) the National Association of State Legislatures stated (http://www.ncsl.org/research/financial-services-and-commerce/direct-shipment-of-alcohol-state-statutes.aspx):: The majority of states have statutory provisions that allow for out-of-state manufacturers to ship alcoholic beverages directly to consumers. The majority of states restrict the direct shipments to wine. Hedgebird provided a link to that web page previously in this thread. The question has evolved. It is now, "Can anyone who regularly submits products for competition, or an out-of-state industry event, a reviewer, or analysis tell us how they are shipping?" The NASL does not provide answers to that question. Its answers involve shipment made directly to consumers. Exceptions to the general prohibitions must be determined on a state by state, case by case basis. I don't know those rules and even if I did, I would not advise you on what you should do. The NASL provides some very good advice. It states, in bold letters in the original, "Please note the summaries should be used for general informational purposes and are not intended as a legal reference. NCSL is unable to provide assistance, give advice or answer questions regarding individual cases. If you have questions regarding the direct shipment of alcoholic beverages to consumers, please contact an attorney in your state or your state attorney general. This forum provides a great service when it discusses questions within the expertise of the persons who respond, e.g. "Why is my gin cloudy?" but when it comes to matters as legally complex as the interstate shipment of distilled spirits, we are in over our collective heads. Here is how I would approach the problem. If I wanted to send to a lab, or reviewer, or competition, I would ask the person to whom I propose to ship, for some citation, in the laws of the state in which they are located, that gives me permission to ship to them. Then I would verify it with the state. Importantly, FedEx is not, in applying its internal rules, the keeper of state regulation. If you register, etc, with FedEx, and they subsequently take a shipment from you, and it is not legal for you to make the delivery to the recipient named, FedEx is in trouble with the state, but so are you. "FedEx let me do it" is no defense. I suspect that there is not much danger in shipping to a laboratory. Reviewers and competitions are probably tricker. I asked previously, "What is your tolerance for risk?" I guarantee that the first question a state will ask you, if they discover what you are doing and take exception to it, is "Why didn't you first ask us?' Then comes, "Ignorance of the law is no excuse."

No age statement, for American whiskey (other than corn) = four years or more in oak of the appropriate type (new charred or used). Store anything in oak containers for less than four years and you must make an age statement. Those who bottle whiskey which has been stored in oak of the appropriate type for less than four year and do not make an age statement in the appropriate format are in violation of the labeling requirements. What people "may" do and what they "can" do are not the same. They may not omit label statements that are required, but they can do it if no one enforces the requirement. The NAS on Scotch and Irish are acceptable, but the products have a minimum age period that American regulation does not impose. You can label American whiskey with an age statement, "aged 32 nanoseconds," and comply. But if it is less than four years, you must use a statement of the form that says the product has been aged for not less than X units. See 27 CFR 5.40 and the standards of identity in 5.22. Age is defined at 5.11 - Age. The period during which, after distillation and before bottling, distilled spirits have been stored in oak containers. “Age” for bourbon whisky, rye whisky, wheat whisky, malt whisky, or rye malt whisky, and straight whiskies other than straight corn whisky, means the period the whisky has been stored in charred new oak container. The container must be made of oak. The CONTAINER must be made of oak. Sticking oak staves or chips in a barrel will not suffice. The CONTAINER must be made of oak. HOWEVER, and this is a big however, if the frame contains staves that line it completely, I can't see a problem. The container is an oak container with a metal frame replacing the metal hoops. As far as I know, no one has ever said that that the area of the hoops cannot exceed x% of the total area of the barrel. TTB may have ruled on metal heads in a way that is possibly revelvant as well. I note that adamOVD reports, "I recently [had] the opportunity to talk to them at a beer festival, and try some whiskey aged for 4 months. It tasted pretty similar to something aged in a 5 gallon barrel for 4 months. They said they are currently working on getting approved by the TTB to be able to use age statements." If true, it indicates that Sqaurebarrel is aware of some issue, or it may only indicate that they are dotting "i" and crossing "t's.' None of this, of course, speaks to the quality of the product that results.

I can't advise you of what TTB will approve, but look at the Angel's Envy label on TTB's COLAs Online website. I would say that it is creative, on both the bottlers and TTB's part. TTB calls Angel's Envy a whiskey specialty. There are bourbon and rye specialty labels approved, something like 18 COLA's in all. Let's consider the label of one whiskey specialty - as TTB designates it - composed of rye whiskey finished in rum barrels. TTB considers "Angel's Envy" the brand name, and a statement, "From the Cellars of Lincoln Henderson" the fanciful name. TTB does not state what it considers to be the truthful and accurate statement of composition. But if we look at the information on the brand label, where the class and type information must appear, we can reach some conclusion about the stretch TTB is prepared to make. The information runs down the label as follows: From the Cellars of Lincoln Henderson Angel's Envy Finished Rye Rye Finished in Caribbean Rum Casks We know, because the database tells us so, that the two lines, "From the Cellars of Lincoln Henderson," is the fanciful name. We know, again because TTB tells us so, that "Angel's Envy" is the brand name. I do not know what TTB makes of the phrase "Finished Rye." So, by default, "Rye Finished in Caribbean Rum Casks" becomes the truthful and adequate statement of composition. Now, if you look at reviews by people who are suppose to know a thing or two about whiskey, they review Angel's Envy as whiskey, not a specialty. If the label says Bourbon aged in port, they review it as bourbon. No one is deceived about what they have and no one cares that TTB says it is a specialty, not whiskey. That may suggest some solutions to how gin "finished" in barrels can be marketed as gin without a claim that is offensive to TTB.

It is late and I am tired, but I'll offer a comment. If TTB insists the product does not meet the gin standard, i.e., that the finishing in a barrel alters, in its opinion, the class and type under 5.23, I think the specialty requirement at 5.35 does not preclude you from mentioning gin in the required statement of composition. In fact,. I might go so far as to argue that omitting reference to gin would render the statement inaccurate and untruthful. I think, if pressed, TTB would concede that there is what TTB would call a long standing precedent that allows the class of spirits used in a specialty to appear in the statement of composition. For example, look at products like Angel's Envy products. They have a whiskey reference, but are classified as specialty items. You can verify that by looking at the public COLA database TTB has on line. The prohibition that I think the label specialist is twisting also appears in 5.35. It states, "A product shall 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." I read that to say, if you include, in the required truthful and adequate statement of composition, a spirit, then the spirit component must have conformed to the standard at the time that you rectified it to create the specialty. So, for example, the statement of composition, "Rye Whiskey finished in Port Barrels," in the style of Angel's Envy, mentions rye whiskey, even though the finished product is not rye whiskey. Of course, the requirement presumes that the spirit component was entitled to the rye whiskey designation had it not been rectified. Further, I think you could have a specialty with a fanciful name like "Frosty Aires" with a statement of composition stating "Gin Blended with Malt Whiskey," as long as the product contained a blend of of gin and malt whiskey. However, what I think doesn't matter. TTB bats last in this game. Sometimes, however, people win on appeal. Remember that TTB insisted, over Jack Daniels rightful objection, that an unaged distillate produced from a rye mash, at 140 proof, was a neutral spirit, because it had not seen oak. JD was equally wrong, however, in asserting it was a whiskey, but TTB eventually relented, admitting that they had erred in their insistence that the 140 proof distillate was a neutral spirit, stating, in a letter to Chuck Cowdery, "A product that is made from fermented mash of grain and produced at less than 190° of proof but not stored in oak containers would be a distilled spirits specialty product, as it would not meet any of the standards of identity." In that case, by the way, whiskey could not appear in the statement of composition, as I read the rule TTB seems to be citing in the case of the gin at hand, because the spirits component was not whiskey, it was alcohol distilled at less than 190 proof, at least as I see it. But again, I don't matter, even if I'm right :-).

This too slipped by my notice. I write largely in confirmation, but cite the sources, to show how to reach the conclusions others have made. 1/ A winery cannot make canned cocktails. They are distilled spirits products. See 5.35(b)(1), so they must be made and packaged on DSP premises Sec. 19.71 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.). That is basic. If the DSP combines the wine and spirits, it has made a distilled spirits product. The DSP could not rectify the product and remove it to the winery for canning. That would violate the bulk sales provisions of the FAA Act (27 CFR.180). 2/ A winery can receive and use wine spirits in the manufacture of wine products. 19.10 - Wine spirits. Brandy or wine spirits authorized under 26 U.S.C. 5373 for use in wine production. Sec. 5373 (a) The wine spirits authorized to be used in wine production shall be brandy or wine spirits produced in a distilled spirits plant (with or without the use of water to facilitate extraction and distillation) exclusively from— (1) fresh or dried fruit, or their residues, (2) the wine or wine residues, therefrom, or (3) special natural wine under such conditions as the Secretary may by regulations prescribe.) 3/ The winery can add wine spirits to wine produced from the same kind of fruit as the spirits. (As cited by Just Andy, above - 24.255 - 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). ) 4/ Yes, neutral spirits grain and neutral spirits grape might have the same acronym, so it may be that the winery mentioned above is receiving "neutral grape, not neutral grain spirits. No DSP should ship grain spirits to any winery. Both would be in violation. (Sec. 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). 4/ The same fruit requirement allows other than grape spirits. Any spirit produced by materials listed under 5373 is acceptable.

Nick; I missed this the first time around Did you ever get this worked out? My experience is that TTB will try to help you if they understand your problem, but if you are still having problems, send me a personal message. FYI, you can't file via permits on line if the original application was on paper. Buying the stock ensured continued operations as long as you let TTB know within 30 days. But not having anyone with power of attorney to sign on behalf of the corporation is a pain, both for labels, but also for reports and returns. Also FYI - neither the Power of Attorney form or the signing authority for corporate/LLC officials form require approval. They need only be on record with TTB. Specialists may not recognize this, but there is no space for appproval. The POA has a space that says the date it was "received for filing." That's it.

Curt: I don't know the laws of Ohio, but ... Don't distill anything until it is legal for you to do so under Ohio law. The state issue usually is not sale; it is production. Sales just exacerbate the problem that comes along with distilling without a license. Assume you cannot do it unless you receive specific, written confirmation that you can. Next, no one on this forum is your attorney. I'm not nor are any of those who comment on questions like this. Even if an attorney licensed to practice in Ohio responds, unless you have established an attorney-client relationship, that person is not your attorney. Do not rely on my advice or anyone else's advice on this matter. Ask the State or have your attorney ask the state. Until you receive permission, assume you cannot do it. Finally, federal taxes are not due on spirits you distill. You are liable for the tax value of the spirits until you are relieved of the liability or pay the liability, but you do not need to pay the federal excise tax until you withdraw the spirits from bond or otherwise trigger the liability. You should get a grip on the fundamentals. It's not very entertaining, but it's essential.

A winery may return, to a DSP, wine spirits that it obtained, from a DSP, for use in wine production. The DSP may receive them for any lawful use. To understand who, what, where, and how, forget analysis and guesses from operating report forms. To understand the rules, you must look to the regulations. TTB employees who give answers without consulting the regulations can lead you astray. In this case, working through the regulations is not an easy chore. Let’s do it anyway, because it is chock full of learning points: When the distillery ships the spirits to the winery, the spirits remain in bond. “In bond” is defined to include “spirits withdrawn without payment of tax under 26 U.S.C. 5214, and with respect to which relief from liability has not occurred under 26 U.S.C. 5005(e)(2) [§19.1].” Shipping spirits to a winery for the winery to use in wine production is a withdrawal under §5214. Take note of the term “withdraw without payment of tax.” For accounting purposes, a withdrawal without payment of tax is not a “transfer in bond.” The rules distinguish between the two. The withdrawal to a winery is treated as a withdrawal without payment of tax tax for use in wine production [§19.418(a)(6)]. You should report the transaction as a “withdrawal without payment of tax for use in wine production” on the account from which you withdrew them. The forms have a line for this. Do not report it as a transfer in bond. To be clear, the sprits are “in bond,” but the transfer is not a “transfer in bond,” it is a “withdrawal without payment of tax.” There is no natural law at work here; these are arbitrary rules, but they are important because they make for consistent recording and allow TTB to make different rules for returns and relief from the tax liability. For accounting purposes, they are no more arbitrary than the distinctions accountants make between, say, long-term and short-term liabilities. For rules, they are no more arbitrary than the different speed limits one sees for cars and trucks. To handle the accounting correctly, and to follow the rules, you must know what the terms mean and how to classify the transactions. With definition out of the way, Section 19.454(i) applies to returns of spirits from a winery to a DSP. It provides, “Wine spirits withdrawn without payment of tax for use in wine production can be returned to any DSP [note, not just the DSP from which they were withdrawn] for any lawful purpose, subject to two conditions. · The DSP proprietor must obtain approval as provided in §19.403. That is the section that requires an application to TTB to receive a transfer in bond. Here TTB allows the return of spirits withdrawn without payment of tax to piggyback on the transfer in bond application, even though the transfer is not treated as a transfer in bond for accounting purposes. · The winery must follow the wine regulation. Section 24.226 provides, in pertinent part, “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.” That section describes the transfer document for transfers in bond. Again, although it is not a transfer in bond, TTB piggybacks, presumably as a matter of convenience, on the transfer in bond provisions. Mixing the documentation for returns of spirits withdrawn for use in wine production with the documentation required for transfers in bond can lead to confusion. But be clear. Neither the shipment to the winery nor the return from the winery are treated as transfers in bond. With that in mind, here are the rules: The shipping winery prepares the transfer record required by §19.405. Yes, this is a transfer in bond record. The receiving DSP must follow the rules in §19.407. These are lengthy and I will not repeat them here. Receipt involves, among other things, gauging the spirits received, entering certain information to the transfer record, reporting unusual loses, and, of course, making entries to the appropriate DSP record. The regulations make specific provision returning the spirits to the production account and the processing account. They do not make specific provision for returning them to the storage account, but I see no harm in doing so, since they may be returned for any lawful purpose, which would include storage. Section Sec. 19.315(a)(3) provides the rules for redistillation in the production account. It provides, “A proprietor may receive and redistill spirits have been withdrawn without payment of tax and returned to bond under subpart T of this part (Subpart T is an error, it should be subpart Q). Note, that if, for any reason, you want to redistill the spirits, you must first have an approved formula. That requirement is well hidden in the §19.77(b), which requires statements of production procedure, and is easily overlooked. It provides, “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.) Sec. 19.342 (c) provides that a DSP may “receive spirits into the processing account that are returned to bond under the provisions of 26 U.S.C. 5215. The rules for receiving spirits into the storage account do not include any provision that specifically states that you can receive, in the storage account, spirits withdrawn without payment of tax. Here, I must break my “read the regulations rule.” I think the omission is a glitch, to use a nontechnical word. Line 4 of the monthly report of storage operations captures returns of bulk spirits into the storage account. In a roll-over form that explains the entries to be made in on each line, TTB gives an example. You would use line 4, they say, to record the return of bulk spirits that were shipped to, but refused by, the consignee. Since you may return, to your DSP, for any lawful purpose, spirits withdrawn, without payment of tax, to a winery, for use in wine production, returning such spirits for storage is appropriate. That is a long string of prepositional phrases for which I apologize. Line 4 is a convenient place to record the transfer. That is short and to the point, even if I cannot find a direct reference to this in the regulations.

Re: TTB requirements - TTb will never see the road until after the application is approved, so the question may be moot. However, I see nothing that would allow TTB to deny the application based on the fact that in bad weather they have to walk a half mile from the parking area rather than 50 feet. I see no general requirement that would require that you plow snow, for instance, or fill potholes, or otherwise ensure that TTB can drive to within a certain distance of the door. When TTB approves variances, etc., the question is whether approval would "hinder the effective administration of this part." I'm tempted to argue that it is important that TTB uses this provision, because it shows that it is concerned with, and considered, hindrances when it wrote the regulations. Thus, since it considers hindrances, and did not include this in the provision re: construction, etc., hindrance or in convenience should not be considered in deciding whether to approve or not.. Then I think about putting a DSP in a treehouse. Hmm. I think TTB assumes that, for your own purposes, you must provide reasonable commercial access. I think it assumes that such access will suffice. I also think that if the local development department and fire marshal approve, TTB has no grounds to deny. But not in a treehouse, please.

Let's agree to this - the rule is you make the bottling gauge after the cut to bottling proof, i.e., when the spirits are ready to go into the bottle with no further changes to them, i.e., everything but bottling is completed. If you cut to bottling proof before filtration, then any loss of proof after filtration, is going to bring you out of compliance, because the spirits in the bottling tank must be at bottling proof. Because there is no tolerance, you are going to have to add spirits to the filtered product to get back to the bottling proof, then regauge. The tolerance is only for evaporation loss in the bottling process. That is a wonky distinction, because I do not think TTB would tumble to the wonky problem, if the bottled spirits were within tolerance, but it is nevertheless the requirement. The easy solution is to reduce after filtration, but TTB does not prohibit adding spirits to bring filtered spirits back up to bottling proof.

Yes, the rollover form is on TTB's website, but TTB has made the rollover form damned hard to find. Go to TTB.gov and scroll ti the bottom of the page. In the Resources column click on Forms. Scroll down to Tutorials and Helpful Hints, Click on Form 5110.28. The form doesn't appear. A page with various links to hints, etc, appears. There is no direct link to the rollover form here that I can find, so continue to FAQ. There is a link here, Click to Access Firm. Click that link. You get the rollover form, not a blank form. I can't get to it any other way, but there may be a shortcut I have not found. The forms are helpful, but not complete. I find three areas where I think they do not adequately explain what should appear on the form. Without going long, these are: The return to bond of bottled spirits as I explained above. The rollover states only that you cannot receive packaged spirits in bond from another DSP. It does not explain receipt for rebottling or reconditioning or how that is handled differently than receipts for relabeling. The distinction between redistillation that takes place after transfer if spirits for redistillation in the production account and the redistillation that takes place in the processing account. See Sections 19.77, 19.314, and 19.602. On hand end of month figures and how they differ in months when you take quarterly inventories of bulk spirits and semiannual inventories of packed spirits. In non-inventory months, they are balancing figures needed to make the total to account for equal to the total accounted for. In inventory months they are the actual quantities, with differences between the to account for and accounted for figures accounted for as gains and losse. So yes, the rollover is generally helpful and I recommend that you look at it, but it is not complete and it does not always explain how TTB is using the terms you find there.

You have a basic grasp. Part 1 - bulk; part 2 - bottled (packaged is for industrial spirits). The spirits normally move from bulk to packaged. Movement between the bulk and bottled accounts is by balancing entries that decrease the total to account for in one account and increase the total to account for in another. Also, remember that the total you must account for (line 8 and 31, for bulk and bottled respectively, must agree with the total you account for (lines 26 and 47 respectively). You can return taxpaid bottled spirits to bond, but only for certain stated purposes, e.g.. reconditioning, rebottling (see 19.452, which lists a lot of requirements and conditions if you do that). That is where you would receive bottled goods at line 29. To answer your question, no, line 29 is not the same as line 2. Always keep your accounting for bulk and bottled goods separate and remember that anytime you move between the two, you have balancing entries taking them out of one and putting them into the other (the equality of lines 9 and 28 and lines 6 and 40) . Note that spirits received on the bonded premises for relabelling only (19.453) are not returned to bond. A clarification re the footnote - Tax paid or determined spirits are not in bond, so, when they land in your DSP, you are not receiving them in bond. You are returning them to bond. When you return them to bond (rebottling/reconditioning, but not relabeling) you get into the need to file a claim, etc. and pay taxes all over upon removal. This is not the case with relabelling because you will not have done anything to affect the taxable quantity in the container. If you understand the impact of what you do with the spirits once they are on bonded premises, then you can see why relabeling is treated differently. Now I've done my good deed for the day :-).

Good call - insist on citations. From me, from TTB, from everyone. When it comes to regulation, advice that begins, "I think ..." should be suspect. Sometimes we have to figure out what is required by "reading between the lines," but these regulations were updated in 2011 and the basic requirements go back to 1980. TTB has had a lot of time to iron out the wrinkles of ambiguities. Sec. 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, and the details of the gauge must be entered on the bottling and packaging record required in Sec. 19.599.

I'll repeat from my former post. Distillers can relabel. If a distiller relabels and the product does not meet the standards of identity, then there is a problem. Of the distiller relabels with a label for which he does not have label approval, then there is a problem. But otherwise, the issue of removing labels applies only to wholesalers and retailers, who do not bottle spirits. Now, since wholesalers and retailers do not bottle spirits, any spirits they have come in a bottle filled and labeled by a DSP, or it damned well better come in a bottle filled by a DSP. Since the spirits are already in a bottle with a proper label, there should be no reason to put them into a n empty bottle with the same label. To what end? The only reason to pour one bottle into another (well, I guess a retailer could argue consolidation, but that sounds sort of hollow) is to put less expensive products into bottles purporting to be expensive product., soi that they can the public into paying premium prices for goods not marketed as premium. That is why you have emphasis on relabelling. And refilling. I can't quite refrain from asking a question - if the consumer can't tell the difference ... okay. I'll refrain.

we've visited this in detail before. hedgebird provided a link to the website of the National conference of State Legislatures, which includes a complete list of all state laws (http://www.ncsl.org/research/financial-services-and-commerce/direct-shipment-of-alcohol-state-statutes.aspx.) I've cited TTB's positon (https://ttb.gov/rulings/2000-1.htm and https://ttb.gov/publications/direct_shipping.shtml) fssmatt cited Fed Ex rules (http://www.fedex.com/us/freight/rulestariff/prohibited_articles.html). So you've got the state's public statements, TTB's public statements, and Fed Ex's public statements. I'll tell you now, no alcohol may be shipped via the US Post Office. TTB and TTB alone has that privilege. There is nothing new to report. I've not put it this bluntly before, but "What is your tolerance for risk?"

That is correct. You want to deal with someone who can supply you with both beverage alcohol and a basic permit number. That is not the DSP number. The DSP number, in the format DSP-HI-20015 (I can dream about being in Hawaii, right) is not the basic permit number. The basic permit number will be of the form HI-S-20163. You can check TTB's website for a list of persons who hold basic permits for beverage alcohol. I have seen some industrial suppliers insist that they can sell to beverage producers. TTB says no. To get around the arguments that follow from citation of regulation, here is the wording of the second instruction on the Form 5100.16 (paper format): "In-bond shipments must be authorized transfers. For example, industrial (nonbeverage) spirits may not be transferred to a plant whose permitted operations are solely non-industrial (beverage)." That is definitive to my mind. It seems not to be definitive to some suppliers of bulk spirits. The supplier may insist it don't need no stinking basic permit, but the supplier does need a stinking basic permit to produce beverage alcohol. And it may not ship industrial alcohol to you unless you are qualified to receive industrial alcohol.