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Bulk Sales of Neutral Spirits


HedgeBird

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What are the options available for bulk sales excluding sales to another DSP?
For example if I want to provide bulk alcohol to a local vinegar manufacturer, who will never retail consumable alcohol, do they still need to register as a DSP or are there other options?

Additionally  would anything prevent a DSP from receiving a label approval for neutral spirits or alcohol bottled at 190 proof? 

Thanks!

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If you are looking at doing bulk (greater than 1 gallon) it is doable, although I haven't done it. You would be looking at selling tax paid alcohol and then they would register with the TTB as a "Drawback claimant" and file for a drawback to get partial tax credit since it is used for non-beverage manufacturing. 

See Title 27, Chapter 1, Part 17 -> https://www.ecfr.gov/cgi-bin/text-idx?SID=e26cfad7243d0f86927a2a105cb0143f&mc=true&tpl=/ecfrbrowse/Title27/27cfr17_main_02.tpl

I imagine you could bottle 190 and sell over the retail counter, but I doubt it qualifies for drawback claims.

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Hedgebird,

 

There is a huge market for  190 proof bulk ethanol to cannabis and hemp processors.  I buy and sell bulk ethanol to hemp processors and they pay the excise tax.  The hemp people can get the excise tax back at the end of the year or possibly quarterly.  I sell it with the tax included and tell the hemp processor to make sure to get a federal alcohol use permit and  to talk to their CPA about getting a refund for the excise tax.  

One option would be for you to charge the tax and to suggest to your customer that they get the use permit and talk to their CPA about getting the tax back.  There may be some way that you can sell it to them as tax free industrial ethonal if they get their tax free alcohol use permit.  However, if you do it that way you may need to get a permit to sell alcohol for industrial use from your state and the feds.

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6 hours ago, HedgeBird said:

Paul - Are you asking for your buyers to have any paperwork or other license when you sell them bulk (not in a retail container) tax-paid alcohol?  

 

 

Yes, they must have all required federal and state licenses and permits for me to sell them industrial alcohol.  I have all required licenses and permits to sell to my customers. I hold 5 different alcohol permits just from the feds.  I basically do everything just like the other bulk alcohol sellers.    2 of my fed permits have to do with using and selling denatured ethanol, which of course does not have an excise tax. 

Hemp processors are a huge market for bulk ethanol and they  pay well.  Many just buy 5 gallon containers shipped by fed ex.  You must ship in the proper containers that have the correct labels when shipping industrial use ethanol via fed ex.  UPS will not ship it.  We also sell by the 55 gallon HDPE barrel, 270 gallon tote and by the tanker truck load.  

 

Also there are alcohol sales permits for alcohol used in food processing, which after some thought is what I think you need for your potential customer.  I don't remember having any problems finding the correct permit applications when I looked for them on line.  If you need some help locating the correct permit applications, for you and your potential customer, just let me know and I will look them up and post some links for you.

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