Is the tasting area bonded or unbonded?

[kckadi]

My insurance bond covers my building and I have my TTB description as the bond covering the production area and NOT including the tasting room/front office. In other micro's I've visited they typically have a 'wall of booze' displayed where entire walls in the tasting are are just shelves of their spirits. If these are outside the bonded area they must pay the tax immediately, correct?

To AVOID paying an immediate tax on the liquor the tasting area would need to be WITHIN the bonded area, correct? But I was under the impression that the tasting area, being a public area, must be outside the bonded area?

For those who have a tasting area: If you have a tasting room with your spirits displayed within the tasting area how did you handle your bonded area description to the TTB and state?

Thanks

[grehorst]

You cannot have a tasting area in the bonded space. When we put product for display in our tasting room it has been removed from bond and is liable for excise payment.

[bluestar]

Yup, covered in another thread as well.

If all you want to do is display a big wall of product, you could put it behind a glass wall on the bonded side ;-)

But really, that shelf expanse in the tasting room hopefully is not just display, it is the product you plan to sell in the tasting room, so it needs to be taxed. And if in fact you are not going to be able to sell, only taste, then the glass wall split between bonded area and tasting room, with shelves of product there, is not such a crazy idea?

[kckadi]

Thanks for the quick answers guys. So when you have a display in the unbonded tasting area you must immediately classify them as a 'sale' and pay the excise tax regardless of whether they have actually been sold in a retail transaction, correct? Of course the main idea, hopefully, is that the entire bottle count will sell at retail quickly and within the excise payment window anyway so you are not unduly burdened with the tax.

I did do a forum search and found hits on other bonded questions but didn't see this particular one but I'm sure I just missed it.

[nick jones]

So when you have a display in the unbonded tasting area you must immediately classify them as a 'sale' and pay the excise tax regardless of whether they have actually been sold in a retail transaction, correct?

Correct. Additionally, for ease of accounting, many distilleries have separate books for their manufacturing side and retail side. So for example, the manufacturing side would "sell" cases to the retail side and pay federal excise taxes at that point, while the retail side would "buy" cases and track that inventory separately. The retail side would then pay (depending on the local juristiction) state excise tax, gross receipts tax, etc, at the actual time of sale of the bottle.

Nick

[kckadi]

Thanks, looks like I'll be taking a second crash course in "accounting 101"