Chrismass Posted October 10, 2012 Share Posted October 10, 2012 Disclaimer: Yes I did search for taxes on the forms to see if anyone posted this before. I am kind of confused and ifs not find and definitive information about HOW federal taxes are implemented. I am making a vodka to be bottled in 750ml bottles. According to the below link, if I am reading it right, there is a tax for distilling a gallon (13.50 at only 50%) and another per packaged bottle at 40% (2.14 at 40%) so added up I take this to equal.. 2.14 + 1.98 Equals near 4 dollars to the fed. Am I reading this correctly? Or am I just flunking on my math somehow? Or does just the 750ml charge apply? http://www.ttb.gov/tax_audit/atftaxes.shtml Link to comment Share on other sites More sharing options...
stevenstone Posted October 10, 2012 Share Posted October 10, 2012 Chris, The $13.50 per proof gallon equates to $2.14 for a 750ml bottle at 80 proof. That's better than $4, but still hard to come by at the end of the day! Steven Sound Spirits Link to comment Share on other sites More sharing options...
Chrismass Posted October 10, 2012 Author Share Posted October 10, 2012 2.14 is much more affordable! Thank you so much. Even though I'm not in production yet, you can understand the fear a 4 dollar tax would have caused me! Affordable is hard to do sometimes. Once again, thank you for clarifying this for me. Link to comment Share on other sites More sharing options...
Absinthe Pete Posted October 10, 2012 Share Posted October 10, 2012 Don't forget you're state excise tax. Here in California it's grouped into brackets. I pay $0.66 times two because my absinthe is 136 proof. I think 40% would be just $0.66. Check your state. Link to comment Share on other sites More sharing options...
Scott @ Twenty2Vodka Posted October 10, 2012 Share Posted October 10, 2012 The only federal excise tax on distilled spirits can be calculated at $13.50 per Proof Gallon. Because a 750ML of 40% ABV contains 0.158 Proof Gallons, the federal excise tax equals $2.14. Where are you finding the extra 40% tax in the page you linked? That amount however is right around what you will "pay" on a state level, not in tax but in the cut to your broker-distributor for doing what they do. The states will levy an additional excise tax as well, and each state's rate is different. best of luck, -Scott Link to comment Share on other sites More sharing options...
Chrismass Posted October 10, 2012 Author Share Posted October 10, 2012 New York state levies a 1.70$ excise tax per 1L bottle sold but is adjusted for 750ML so I assume I will be paying 1.28 per bottle according to the form. The .66$ one in California seems a lot nicer then here! The only bonus New York has is the steep discounts and benefits of getting the newly created micro distillery license (Class a-1 I believe) which saves a lot compared to the old 50,000$ one. The federal tax isn't too crippling, neither is the state. However taxes can add up very quickly. A second question that just went through my mind was do distillers pay sales tax when they wholesale it to a retail establishment? Or is the retail establishment required to pay that tax? I used to manage a bar, and when we bought a shipment of liquor neither us nor the wholesaler seemed to pay sales tax. The sales tax was factored into our income, and the local had like a 7% sales tax as well. I am guessing that the state, federal and local taxes get placed on our overall income? Another note that I want to add is that I plan on doing the distribution myself. I have a good backing for doing so, and a friend who is on board with me is helping me handle those logistics. Where I live in New York the population is very dense. My small county alone which you could drive across in a matter of 30 minutes has more than 600k people. Link to comment Share on other sites More sharing options...
Beauport Bob Posted October 10, 2012 Share Posted October 10, 2012 revised Link to comment Share on other sites More sharing options...
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