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Need some guidance on the dreaded "T" word..taxes


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Ok. Ill show my ignorance...best to do it BEFORE owing any taxes....what are you paying taxes on...all ethanol off the still, only whats bottled, based on weight or by the bottle volume? Ive been to some micros that said they only pay on what they bottle, some that had no certified scales, one that didnt pay if test batches produced <1 gallon...its like a free-for-all. Whos got the scoop for me and can steer me from trouble.

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Another approach to learn more is to look at the reporting forms. There are only a few allowed untaxed removals, and they are all separate line items on the reports. For each, there's a paragraph or so in 27 CFR 19 (or in the USC) to add some explanation.

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Scott & Charles, nicely written. I would also add getting a blank application for a DSP and see where that leads you.

TexasT, Where ever you go, it doesn't matter what you see. Most of these operators know better. They do what fits their operation best. After you become familiar with both the CFR and the related forms, and also again with you particular states regs and forms, you will see the connectivity with the theory of "tax expectation" and the actual "tax liabilty". I might be talking about your processing bond and warehouse bonds.

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Basically, you should very quickly come to understand that the Feds and the TTB care very little about much in this industry, EXCEPT taxes. Those that are playing a loose and free game with scales or other such matters will eventually get corrected by the TTB inspector for their area. That correction is going to cost them a lot of money.

In order to assist you early in the game, spend some time on the Tutorials offered by the TTB on their website. Trust me, they are going to cross your eyes, but ultimately will be very helpful.

Storage Reports:


Processing Reports:


Production Reports:


Run yourself through them with this example:

Month 1: Starting

100 P.G. of Whiskey produced.

40 P.G. Processed.

20 P.G. Sold.

You can share the results here and we can opine on your level of complete-ness.

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  • 7 months later...

Well, as this is my first post I had better do a quick introduction. I'm Tim Wallace, I live in Missoula, MT, I currently work as a smokejumper while exploring the opportunity to open a DSP in the future.

Okay, came across this thread and thought I would run the numbers John gave and post them for opining and complete-ness checking. Definitely a good way to engage in the rules and regs. Thanks in advance for any feedback.








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