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Moving inventory from unbonded area to bonded area


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Hi,

Forced to move and the only option I have is to move my storage and processing inventory, at least temporarily, to another DSP.  My current storage is not bonded (under $50K excise per year) but the DSP that is agreeing to hold/store my inventory, till I move to my new home, is bonded (and does over $50K excise tax a year).  Not sure how to paperwork this.  I am still retaining ownership of the inventory.  Is it a TIB? Or does it not go in the bonded area and is stored outside the bonded area at the receiving DSP?  Anyone done this?  I'm getting ready to call the TTB but wanted to have a little more info before the call.

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I'll speak to Fed requirements here. Your state may restrict some of the operations that I'm describing here.

You generally cannot move bottled product in bond to another distillery. See Bottled Spirits Usually Can’t Be Transferred “In-Bond” 

Although you are not required to hold a bond if your liability is under $50k/yr, TTB still treats you as if you held a bond. In other words, your finished goods can be stored in bond even if you do not hold a bond (yes, this seems strange; it's the PATH act).

Step 1 is to determine whether your finished goods to be transferred are currently in-bond or tax paid. 

If they are in-bond, then you can either choose to tax-pay them prior to shipment/storage, or you can petition TTB for an allowance to do a one-off transfer of finished goods via TIB (they sometimes allow this in scenarios like yours).

The receiving DSP would hold them in-bond if receiving bonded product via TIB.

Or, they'd hold it in their tax-paid area if receiving tax paid product (which would NOT involve a TIB).

When you get your new location settled:

  • If stored in bond at receiving DSP, you'd need another petition/allowance from TTB to get the product back in-bond
    • Or, receiving DSP could tax-pay the product for you and ship it to you tax paid
  • If already tax paid at receiving DSP, you'd just receive the taxpaid product back into your taxpaid area (i.e. general premises)

If feasible, my recommendation would be to simply taxpay the product prior to sending it to another DSP. You could also potentially store taxpaid goods at a licensed Wholesalers warehouse and maybe save some money vs storing at a DSP.

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