taxes for R&D

[darthmalz]

do you pay Federal taxes on the spirits used for research and development, if those spirits are never bottled. Do you pay Federal taxes on spirits that you us for quality control?

thanks,

Dan

[mmdistilling]

I`m not a lawyer but my understanding is you pay taxes on any spirits leaving the distillery for sale. So for R&D you do not have to pay.

[pressure9pa]

I little off topic, but also be sure to research state and federal tax credits (not deductions) for R&D work. Generally supplies and wages related to R&D can also be elible for a credit. Consult a tax expert, which I am not.

[jeffw]

Check out 27 CFR part 19.459. It sort of details this. You can destroy spirits and then don't owe the taxes, though make sure you document that you voluntarily destroyed the spirits. I don't know if destroy is as simple as pouring down the drain.