Pre Barreling Bond Removal

[RBCD]

Hi All,

I've got a question about the legality of a hypothetical situation. Let's say a distillery got a batch of barley wine from a brewery, and that the distillery distilled said barley wine into a white whiskey. If that white whiskey was never going to be bottled or sold, could the owner of a distillery pay the alcohol exise tax and then remove the white whiskey from bond and drink it at his house?

Thank you for your help and advice!

- Zach

Co-Founder Red Brick Craft Distillery

[HedgeBird]

My understanding based on spending a little time doing research for private barrel sales, is that if it leaves your bonded area it must be bottled in an approved container size (1.75 liter being the largest size option available) , or be transferred to another bonded facility in whatever sized container you want.

[RobertS]

I believe that once spirit is bottled and the federal tax is paid, at that point only the state will care how the bottle gets into the owner's hand. I can't find any regulation on container size limit once you get it home, and barrels are perfectly legal to own. Might be less of a headache to just buy the bottles from yourself in a few years when you're done aging, though.

[dhdunbar]

You cannot dispose of spirits in bulk containers (more than one gallon) from the DSP unless it is for transfer in bond to another DSP, industrial use, use in wine production, or government use. Doing so is contrary to both law and regulation. If you bottle the spirits, you could remove them upon payment of tax, without violating federal law, but states generally want to collect their taxes, so they want the spirits to enter the commerce stream in a way that ensures that the state tax is paid on them.

§1.80 Sales of distilled spirits in bulk.

It is unlawful for any person to sell, offer to sell, contract to sell, or otherwise dispose of distilled spirits in bulk, for nonindustrial use, except for export or to the classes of persons enumerated in §§1.82, 1.83, and 1.84.

§1.82 Acquiring or receiving distilled spirits in bulk for redistillation, processing, rectification, warehousing, or warehousing and bottling.

(a) Proprietors of distilled spirits plants. Persons holding basic permits (issued under subpart B of this part) authorizing the distilling, processing, rectifying, or warehousing and bottling of distilled spirits, or operating permits (issued under §19.91 and succeeding sections of this chapter) may acquire or receive in bulk and redistill, warehouse, or process distilled spirits, so far as permitted by law.

( Proprietors of class 8 customs bonded warehouses. If the permittee operates a class 8 customs bonded warehouse, the permittee may acquire or receive in bulk, and warehouse and bottle, imported distilled spirits, so far as permitted by the customs laws.

§1.83 Acquiring or receiving distilled spirits in bulk for addition to wine.

Persons holding permits as producers and blenders of wine, may, pursuant to such permit, acquire or receive in bulk alcohol or brandy for addition to wines.

§1.84 Acquisition of distilled spirits in bulk by Government agencies.

Any agency of the United States, or of any State or political subdivision thereof, may acquire or receive in bulk, and warehouse and bottle, imported and domestic distilled spirits in conformity with the internal revenue laws.

I keep reciting the mantra - look tot the regulations for answers.