Final 27 CFR Part 19 76FR9080

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Final 27 CFR Part 19 76FR9080

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Vol. 76

Wednesday,

No. 32

February 16, 2011

Part II

Department of the Treasury
Alcohol and Tobacco Tax and Trade Bureau

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27 CFR Parts 1, 17, 19, et al.
Revision of Distilled Spirits Plant Regulations; Final Rule

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Federal Register / Vol. 76, No. 32 / Wednesday, February 16, 2011 / Rules and Regulations
Distilled spirits plants. The term
‘‘distilled spirits plant’’ (DSP) refers to a
plant at which distilled spirits are
manufactured or produced, aged or
stored, or packaged or bottled, for either
beverage or industrial use.

DEPARTMENT OF THE TREASURY
Alcohol and Tobacco Tax and Trade
Bureau
27 CFR Parts 1, 17, 19, 24, 26, 28, 30,
and 31

Federal Laws and Regulatory Authority

[Docket No. TTB–2008–0004; T.D. TTB–92;
Re: ATF Notice No. 870 and TTB Notice
Nos. 83, 86, and 92]
RIN 1513–AA23

Revision of Distilled Spirits Plant
Regulations
Alcohol and Tobacco Tax and
Trade Bureau, Treasury.
ACTION: Final rule; Treasury decision.
AGENCY:

In this document, the Alcohol
and Tobacco Tax and Trade Bureau
adopts as a final rule, with some
changes, a proposed revision of its
distilled spirits plant regulations. The
revision modernizes the requirements
for operating distilled spirits plants and
includes a number of organizational
changes to improve the layout of the
regulatory texts. These changes make
the regulations easier to apply, thereby
facilitating compliance by distilled
spirits plant proprietors and allowing
those proprietors to operate in a more
efficient manner. The revision also
incorporates plain language principles
in order to improve the clarity and
readability of the regulatory texts.
DATES: Effective Date: This final rule is
effective on April 18, 2011.
FOR FURTHER INFORMATION CONTACT:
Christopher M. Thiemann, Regulations
and Rulings Division, Alcohol and
Tobacco Tax and Trade Bureau, 1310 G
Street, NW., Suite 200E, Washington,
DC 20220; telephone 202–453–2265.
SUPPLEMENTARY INFORMATION:
SUMMARY:

Distilled Spirits Plants in General
Distilled spirits taxation is a
specialized area of Federal law. The
following background material provides
basic information about how distilled
spirits plants operate and are regulated,
and how taxes on distilled spirits are
collected, under Federal law.

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Basic Definitions
Distilled spirits. The term ‘‘distilled
spirits’’ refers to those products that
contain ethyl alcohol and are generally
the result of distillation of fermented
materials. This term does not apply to
wine and beer, which generally are
products of fermentation alone.
Examples of distilled spirits products
are vodka, whiskey, gin, brandy,
cordials, liqueurs, and flavored
brandies.

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Federal law prohibits the manufacture
or production of distilled spirits in the
United States at other than a registered
DSP for which a permit has been issued
by the Alcohol and Tobacco Tax and
Trade Bureau (TTB). While Federal law
allows for the limited home production
of wine and beer, no such provision
exists for distilled spirits.
DSPs are regulated under the
provisions of two laws, the Internal
Revenue Code of 1986 (the IRC, codified
as title 26 of the United States Code (26
U.S.C.)) and the Federal Alcohol
Administration Act (the FAA Act,
codified in title 27 of the United States
Code (27 U.S.C.)). The IRC imposes an
excise tax on distilled spirits, requires
the registration of DSPs, mandates DSP
proprietors to obtain permits not
otherwise required by the FAA Act, and
imposes strict controls over the
operation of DSPs. The FAA Act
imposes a requirement to obtain a basic
permit and contains various consumerprotection provisions, including
provisions related to the formulation,
labeling, and advertising of alcohol
beverages. The FAA Act also prohibits
various types of trade practices within
the alcohol industry, including DSPs.
Both the IRC and the FAA Act
authorize the Secretary of the Treasury
to prescribe regulations to carry out and
enforce their provisions regarding the
establishment and operation of DSPs.
Those regulations are administered by
TTB. The TTB regulations that concern
DSPs, which are the subject of this
document, are contained in part 19 of
title 27 of the Code of Federal
Regulations (27 CFR part 19).
Major Regulatory Provisions
A DSP consists of one or more of the
following: Production, storage,
processing, denaturation, and bottling
facilities for beverage and industrial use
distilled spirits. A DSP may be a large
and complex plant having all of those
facilities or may be a simple storage
facility consisting of only one building
or a small bottling facility with storage
facilities. Production facilities are
usually accompanied by storage
facilities. Bottling facilities are often
accompanied by storage facilities, and
in fact must by law be accompanied by
either a production facility or a storage
facility. However, large storage facilities

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are often not accompanied by bottling or
production facilities.
Registration. Before commencing any
of the operations discussed in the
previous paragraph, the IRC requires
that the DSP proprietor must first obtain
approval of a notice of registration. This
application for registration includes
documents to set up distilling
apparatus, environmental impact forms,
personnel questionnaires, authorized
signatories, and a statement of security.
Permits. Under the FAA Act, all
persons must file for, and obtain, a basic
permit before engaging in the business
of:
• Distilling spirits;
• Rectifying, blending, or bottling
(processing) distilled spirits; or
• Warehousing and bottling distilled
spirits.
To maintain control over the
industrial use of distilled spirits, the
IRC requires that an operating permit be
obtained before commencing the
production, warehousing, or bottling of
alcohol for industrial use. Specifically,
a permit is required for:
• Distilling of spirits for industrial
use;
• Bonded warehousing of spirits for
industrial use;
• Denaturation of spirits;
• Bonded warehousing of spirits
(without bottling) for nonindustrial use;
• Bottling or packaging of spirits for
industrial use; or
• Any other distilling, warehousing,
or bottling operations not required to be
covered by a basic permit under the
FAA Act.
DSP bonded premises. The physical
premises of a DSP are divided into two
technical categories—‘‘bonded
premises’’ and unbonded ‘‘general
premises.’’ All activities relating to the
distilling, storing, and processing
(blending and mixing) of distilled spirits
must be conducted on bonded premises.
Most activities relating to taxpaid
alcohol beverages conducted at the
distilled spirits plant must be conducted
on general premises.
Operations as a distiller,
warehouseman, or processor may be
conducted only on the bonded premises
of a DSP by a person who is qualified
to carry on such operations under 27
CFR part 19 and who has obtained the
FAA Act basic permits required by 27
CFR part 1, or, as appropriate, the
operating permit required by part 19.
However, certain other activities, such
as those of apothecaries, customs
bonded warehousemen, manufacturers
of nonbeverage products, and users of
specially denatured alcohol (SDA), may
be carried on outside DSPs.

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Federal Register / Vol. 76, No. 32 / Wednesday, February 16, 2011 / Rules and Regulations
The physical continuity of a DSP
must be unbroken except for separations
that may include public waterways,
thoroughfares, or carrier rights-of-way.
In most instances, DSPs are also
prohibited from being located in a
dwelling house, in a shed, yard, or
enclosure connected with a dwelling
house, on board a vessel or boat, on
premises where beer or wine is
produced, in a retail liquor
establishment, or where any other
business is conducted.
Bonds. Normally, the distilled spirits
tax is not collected while spirits are
held on the ‘‘bonded’’ premises of a
distilled spirits plant. The potential tax
liability of the spirits held on bonded
premises is guaranteed by an operations
bond, and taxable removals from the
bonded premises of a DSP are covered
by a withdrawal bond.
The bond is a legally binding, written
agreement involving three parties—the
taxpayer, the surety (insurance or
bonding company), and the U.S.
Government. The purpose of the bond is
to protect the financial interest of the
Government. If for any reason the
taxpayer fails to pay the tax, the surety
is then obliged to pay the tax, up to the
face amount (limit) of the bond.
Other requirements. In addition to
registering, obtaining a permit, and
providing a bond, DSP proprietors are
required to comply with a number of
regulatory provisions relating to: Plant
security; production, storage, and
processing of spirits; recordkeeping;
inspection and audit; and filing of
reports. These requirements are
reflected in the part 19 regulations.
Recordkeeping accounts. All
operations at a DSP are accounted for
within four recordkeeping accounts—
production, storage, denaturation, and
processing. Since the facilities (tanks
and rooms) of a DSP may be used for
multiple purposes, the accountability
for spirits must be maintained of
necessity by appropriate records within
the four accounts instead of by physical
separation.
Payment of taxes. The Federal excise
tax on distilled spirits attaches to the
spirits as soon as they are produced, and
the distilled spirits plant is held liable
for the tax on all distilled spirits held in
the bonded premises. The amount of
Federal excise tax that a distilled spirits
plant proprietor must pay is based on
the taxable removal of the spirits from
the bonded premises. There are two
basic methods of paying the tax on
distilled spirits withdrawn from bonded
premises—deferred payment and
prepayment. Under the deferred
payment system, the proprietor may
withdraw spirits from bond after tax

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determination but before payment of
tax. The excise tax is paid pursuant to
a semimonthly tax return based on the
amount of spirits removed from bond
during each return period. Under the
prepayment system, the proprietor must
pay the distilled spirits tax after tax
determination but before withdrawal of
the spirits from bonded premises. Most
DSP proprietors use the deferred
payment system.
Currently, the Federal excise tax rate
on distilled spirits is $13.50 per proof
gallon. The term ‘‘proof gallon’’ is
unique to this particular commodity and
means: A liquid gallon at 60 degrees
Fahrenheit that contains 50 percent
ethyl alcohol by volume.
Although the tax rate for distilled
spirits is $13.50 per proof gallon, many
distilled spirits products are actually
taxed at a lower rate. Many products
contain added wine and/or flavors, and
the IRC at 26 U.S.C. 5010 provides a tax
credit for the wine and flavors content
of the product. These credits effectively
reduce the rate of excise tax paid on
distilled spirits products that contain
wine or flavors.
Nontaxable transactions. Under the
IRC, certain types of shipments to and
from a distilled spirits plant are
permitted without payment of tax.
Examples include:
• Shipments of bulk (unbottled)
spirits from one registered distilled
spirits plant to another. (Bottled spirits
are not eligible for untaxed transfer in
bond between plants.)
• Shipments of bulk imported spirits
from U.S. Customs and Border
Protection custody to a distilled spirits
plant. (Only bulk imported spirits are
eligible for this type of transfer.)
• Direct exports of products from the
United States.
• Shipments to users of industrial
alcohol (certain permit holders who use
alcohol for medical, research, or
industrial purposes).
Rulemaking History
ATF Notice No. 870
On November 30, 1998, TTB’s
predecessor agency, the Bureau of
Alcohol, Tobacco and Firearms (ATF),
published in the Federal Register (63
FR 65720) a notice of proposed
rulemaking, Notice No. 870, that
solicited comments on proposed
changes to several sections of the
regulations in 27 CFR part 19. The
proposed changes included: (1)
Delegations of authority, (2) removing a
special tax provision, (3) liberalizing the
requirement for approval of certain
changes in plant personnel or
procedures, (4) reducing the paperwork

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when plant premises are alternated with
other premises, (5) providing for
alternation of distilled spirits plant and
brewery premises, (6) allowing
denaturation and manufacture of
articles to be done in a single, unified
process, (7) specifying marks for
packages of industrial spirits withdrawn
taxpaid, (8) clarifying regulations that
refer to a transfer record, and (9)
incorporating into the regulations a
provision of an ATF Industry Circular
regarding alcohol fuel.
In addition to these proposed
changes, ATF invited comments
regarding the general recordkeeping
system for distilled spirits plants
prescribed in part 19.
In response to Notice No. 870, ATF
received extensive comments from the
Distilled Spirits Council of the United
States (DISCUS), a trade association
representing distilled spirits industry
members with interests in the U.S.
market. While DISCUS provided
comments on the specific issues raised
in Notice No. 870, it also asked that ATF
consider a broad range of regulatory
changes to part 19, essentially
requesting the initiation of a complete
revision of that part. In support of its
request, DISCUS provided ATF with
sample regulations that consisted of a
‘‘markup’’ version of the part 19 texts,
along with numerous copies of
variances (alternate methods or
procedures) that ATF approved for
members of the distilled spirits industry
over the years. The amendments
requested by DISCUS covered a broad
range of issues and included reduced
recordkeeping requirements for distilled
spirits plants, greater use of commercial
records, reduced reporting
requirements, reduced requirements for
reporting changes affecting the DSP’s
registration, liberalized use of DSP
premises, storage of distilled spirits on
bonded premises through ‘‘constructive
segregation’’ based on commercial
records, and inclusion of alternative
method or procedure approvals in the
regulations for universal applicability.
ATF also received comments from
Equistar Chemicals, LP in response to
Notice No. 870. Equistar is a producer
of industrial ethyl alcohol, and its
comments addressed issues in Notice
No. 870 related to industrial alcohol.
Equistar also commented on other
issues affecting distilled spirits plants,
such as the amendment of plant
registrations, recordkeeping,
denaturation, and gauging.
After reviewing the comments
received in response to Notice No. 870,
ATF concluded that the amendments
proposed in that notice were not
extensive enough to address the changes

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that had taken place in the industry
since the last major revision of the
distilled spirits plant regulations, which
took place when ATF implemented the
Distilled Spirits Tax Revision Act of
1979, commonly referred to as ‘‘All in
Bond.’’ No further action was taken by
ATF in regard to this matter.
TTB Notice No. 83
As the successor to ATF, TTB
undertook a comprehensive review of
the distilled spirits plant regulations in
part 19, taking into account the
comments received in response to
Notice No. 870, intervening statutory
changes, and other issues that had come
to the attention of TTB that appeared to
warrant changes to the part 19
regulations. As a result of this review,
on May 8, 2008, TTB published in the
Federal Register (73 FR 26200) Notice
No. 83, a notice of proposed rulemaking
that set forth a complete revision of part
19 and superseded Notice No. 870.
The preamble of Notice No. 83
contained a detailed discussion of the
proposed changes reflected in the
revised part 19 texts. The following
points are noted regarding the proposed
changes:
1. Each section of the regulations was
examined for clarity and rewritten as
necessary, with application of plain
language principles (use of active voice
and shorter sentences and paragraphs,
elimination of jargon and unnecessary
technical terms, and use of genderneutral language) where practicable.
Many lengthy sections of the regulations
were split into multiple sections to
make them more understandable and
readable. In addition, in some cases
textual information was converted to a
table format for easier reference.
2. The individual sections within part
19 were rearranged into a more logical
order. In some cases this involved the
reordering of sections within a subpart,
and in other cases this involved the
creation of a new subpart to set forth
regulations involving the same general
subject matter that previously was dealt
with in more than one subpart. For
example, prior to this revision,
information regarding distilled spirits
taxes was found in two separate
subparts, subpart C (containing basic
information about distilled spirits taxes)
and subpart P (containing information
regarding determination of taxes and the
filing of tax returns); the revision
combines these provisions in one new
Subpart I, Distilled Spirits Taxes. In
addition, duplicative sections were
eliminated.
3. Amendments to the IRC made by
the Taxpayer Relief Act of 1997 were
incorporated into the regulations,

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including provisions whereby:
(a) Imported bottled spirits that were
taxpaid through Customs may be
returned to bond at a DSP and a claim
for a credit, refund, or abatement may be
filed for the return, (b) beer to be used
in the production of spirits can be
received at a DSP without payment of
tax, and (c) taxpaid beer can be removed
from a brewery and shipped to a DSP
with refund or credit of tax.
4. The revised regulations allow for
expanded use of letterhead applications
and letterhead notices for purposes of
amending a registration or permit in lieu
of filing an entire new registration or
permit application.
5. The regulations were revised to
allow for the use of mass flow meters
that meet certain volumetric tolerances
for tax determination, as well as the use
of other bulk gauges for general gauging,
without prior approval from TTB.
6. In view of the increased number of
limited liability companies (LLCs) and
limited liability partnerships (LLPs) that
own and operate DSPs, references to
these types of business entities were
included in the provisions that govern
the qualification of DSPs.
7. The revised regulations include the
addition of a provision that would
permit the alternation of DSP premises
with adjacent brewery premises.
8. The revised regulations require
alcohol fuel plants (AFPs) to file an
application in order to receive spirits in
bond. This corrected an oversight in the
regulations because 26 U.S.C. 5005(c)(1)
establishes tax liability during a transfer
in bond based on an application filed by
the consignee. Under this change, AFPs
would be required to file the same
applications as regular DSPs.
9. The revised regulations eliminate
the requirement that proprietors file
form TTB F 5110.34, Change in Plant
Status, when DSP premises are curtailed
or extended. Under the revised
regulations, the proprietor would
document curtailment or extension with
a record kept at the plant or by
commercial records.
10. The revised regulations retained
the requirement that the closure on each
container requires breaking to gain
access to the contents of the container.
However, the requirement that a portion
of the closure remain on the container
after its breakage was eliminated,
because that particular feature is not a
requirement of the underlying IRC
provision at 26 U.S.C. 5301(d).
11. The revised regulations clarify
that required records may consist of
documents created in the ordinary
course of business rather than records
created to expressly meet the
requirements of part 19, if those

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documents contain the information that
the regulations require. However, the
revised regulations do not include a
DISCUS recommendation that we
eliminate most of the internal records of
activities within a DSP, such as the
production account, the storage account,
and the processing/denaturation
account, because the internal accounts
are specifically called for in the IRC and
they are discussed in the legislative
history relating to ‘‘all-in-bond.’’
Notice No. 83 invited the public to
make comments on the proposed
regulations by August 6, 2008. The
comment period for Notice No. 83 was
extended twice. On May 8, 2008, after
a request from an industry member, TTB
published in the Federal Register
Notice No. 86 (73 FR 44952), which
extended the comment period by 90
days. On October 29, 2008, after a
request from DISCUS, TTB published in
the Federal Register Notice No. 92 (73
FR 64287), which extended the
comment period by an additional 90
days. The comment period for Notice
No. 83 therefore closed on February 3,
2009.
Comments Received in Response to
Notice No. 83
In response to Notice No. 83, TTB
received 7 comments. Six of the
comments expressed strong support for
the revisions to part 19 and commented
on specific areas of agreement and
recommendations for further changes.
One commenter asked a specific
question regarding a particular
regulatory requirement. Descriptions of
the comments and TTB responses
follow.
Comment 1
A comment from a manufacturer of
nonbeverage products was supportive of
TTB’s efforts to modernize the DSP
requirements. The commenter
specifically addressed the application of
part 19 to cosmetic and topical over-thecounter drug products such as instant
hand sanitizers and skin cleansers. The
commenter noted that its products are
subject to several Federal laws and to
regulation by the FDA as well as TTB.
The commenter stated that due to
growth in the hand sanitizer product
category, TTB should create categoryspecific regulations, similar to the
regulations for vinegar plants and
alcohol fuel plants.
TTB Response: TTB notes that vinegar
plants and alcohol fuel plants differ
from cosmetics containing alcohol
because vinegar as an end product does
not contain alcohol, and alcohol fuel
plants are created as a category by
statute. The commenter is correct that

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TTB does not have specialty categories
for denatured alcohol products in its
regulations. Denatured alcohol products
include cosmetics, flavors, fuel, overthe-counter products, medical products,
laboratory products, industrial products
such as solvents and cleaners, and food
ingredients, just to name a few. Creating
category-specific regulations would
create an increased regulatory burden
on those entities that manufacture
multiple types of denatured products.
Also, adding new nonbeverage product
categories within part 19 is outside the
scope of Notice No. 83, and it would be
inconsistent with the Administrative
Procedure Act to make such substantive
changes not proposed in Notice No. 83
in this final rule document without
notice and comment. However, we agree
that hand sanitizer products have grown
as a market segment since their
introduction in 1988. We currently are
undertaking a rulemaking project
relating to 27 CFR Part 20, Distribution
and Use of Denatured Alcohol and Rum,
and we will retain these comments for
consideration in that project.
The commenter also noted that it has
several production and recordkeeping
processes in place that have been
validated by the FDA, but that are not
recognized as meeting TTB
requirements without other TTB
mandated records and reports.
TTB Response: TTB has a unique
responsibility to protect the revenue
while FDA regulations are designed to
ensure safe products, not to protect the
revenue. Thus, TTB’s reporting and
recordkeeping requirements are
different from those of FDA.
The commenter listed several
proposed changes that it suggests apply
specifically to cosmetic and over-thecounter producers:
• ‘‘Exempt companies from monthly
reporting if they are only purchasing
and using [specially denatured alcohol
(SDA)] * * *. Document the yearly
usage of SDA alcohol on the User’s
Report of Denatured Spirits (TTB Form
5150.18).’’
TTB Response: Companies that only
purchase and use SDA may operate
under the provisions of 27 CFR part 20.
Under § 20.264(b), SDA users are
required to file an annual report as
opposed to a monthly report. However,
monthly reporting is a requirement for
DSPs because it provides information to
TTB to ensure that the revenue is
protected. TTB would not know what
operations were occurring at a DSP if
reports were not filed on a more
frequent basis.
• ‘‘Allow denaturants other than the
specified SDA formulations based on
pre-approval of the TTB through

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submission of formulas on form
5150.19.’’
TTB Response: This process is already
permitted under 27 CFR 21.91.
• ‘‘Maintain Special Tax Stamp (form
5630.6A).’’
TTB Response: The requirement to
maintain a special tax stamp was
repealed by the American Jobs Creation
Act of 2004. Therefore, we have no
authority to require this.
The commenter also stated that the
quarterly physical inventory of
denatured spirits required in proposed
§ 19.394 is unnecessary due to the
records and systems maintained to
coordinate inventory of raw materials
and cosmetic and over-the-counter
(OTC) products. The commenter
recommended that manufacturers of
topical OTC drugs and cosmetics be
required to allow TTB to access
inventory records and perform a
physical inventory annually without a
date stipulation. We note that DISCUS
made a similar recommendation in its
comments to ATF Notice No. 870, but
we did not adopt this recommendation
in Notice No. 83.
TTB Response: The shorter time
period between quarterly versus annual
inventories makes it easier for both TTB
and a proprietor to reconcile
discrepancies and thereby protect the
revenue. A proprietor may continue to
apply for approval of an alternate
procedure pursuant to § 19.26, and TTB
may grant such an alternate procedure
if appropriate.
The commenter stated that the serial
number for records required in various
subparts should not include the
requirement that the serial number
commence with ‘‘1’’ at the beginning of
each calendar or fiscal year. The
commenter proposed that as long as the
serial or identifying number meets the
requirements of § 19.572, concerning the
format of records, it should be
considered satisfactory.
TTB Response: We agree that a unique
identifier is sufficient to identify a
particular record, and we have amended
§§ 19.618 and 19.620 in this final rule
document to allow unique identifiers
that do not necessarily begin with the
number ‘‘1’’ each year.
Finally, the commenter recommended
amending the regulations to allow for
letterhead or single form notification of
changes to the permit regarding an
address change that does not involve a
physical move.
TTB Response: We agree that a
letterhead notice is sufficient to notify
TTB of a change of address that does not
involve a physical move or any change
in physical area or layout of a DSP. We
have added a new section, § 19.691, to

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address changes of address not
involving a change in location.
Comment 2
A manufacturer of nonbeverage
products stated that the changes
proposed by TTB would indeed help
streamline the many processes involved
in the operations of a distilled spirits
plant. The commenter listed eight
specific areas of the part 19 revision that
it particularly supported:
• The use of plain language while
minimizing the use of jargon and
technical terms;
• The restructuring of information to
consolidate major topics and bring like
information together;
• The expanded use of letterhead
notices for reporting certain changes
such as changes in officers and
directors;
• The use of a single area operations
bond to cover all of the proprietor’s
plants in the United States;
• The use of mass flow meters for all
required bulk gauges at a DSP;
• The allowance for a unified process
for denaturation and article
manufacture;
• The allowance for a single gauge
measurement when filling containers
from tanks; and
• The ability to file computergenerated reports and forms.
In addition, the commenter noted
three areas of regulation where it
suggested further changes.
First, the commenter requested that
TTB allow an average tare (that is, the
weight of an empty package) to be used
for gauging individual packages (drum,
barrel, or similar container of spirits (see
the definition of ‘‘package’’ in § 19.1).
The commenter noted that the variance
for package tare is often less than 0.25
lb.
TTB Response: We believe that the
degree of variance can be significant. In
the preamble to Notice No. 83, we
addressed a similar recommendation
made in comments to ATF Notice No.
870 and we explained that we did not
adopt this recommendation in the
proposed rule because TTB requires an
accurate gauge of spirits that are
withdrawn from bonded premises.
Accordingly, we are not adopting the
commenter’s proposal in this final rule.
The requirement that the proprietor
establish the actual tare of each package
to be withdrawn from bond appears at
§ 19.288.
Second, the commenter suggested that
TTB allow minimum amounts of
denaturants rather than specific
amounts of denaturants.
TTB Response: Part 21 of the TTB
regulations sets forth specific formulas

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srobinson on DSKHWCL6B1PROD with RULES2

for denatured spirits, not part 19, and
therefore such a change is not
appropriate in this rulemaking action.
We have noted this comment for
possible future rulemaking involving
part 21.
Third, the commenter suggested that
temporary permit delivery addresses be
allowed through a letterhead
notification process. The commenter
noted that temporary situations, such as
road construction or utilities
maintenance, occasionally require
deliveries to alternate addresses such as
a side entrance, but that the current
regulations require permittees to amend
their permits for each address change.
TTB Response: We agree that there
should be provisions for temporary
changes to a delivery address, without
a change in the location or street
address of the plant, and that a
letterhead notice provides sufficient
notice to TTB. Accordingly, for the final
rule we have incorporated this change
in the language of § 19.118
Comments 3 and 4
TTB received two comments from a
large ethanol producer that holds a
number of DSP and Alcohol Fuel Plant
(AFP) permits. The commenter noted
that it supports the streamlining of
procedures and the overall
organizational improvements proposed
in the revisions to part 19.
In its first comment, the commenter
referred to two areas of the Notice No.
83 preamble with which it disagrees.
Both areas relate to TTB’s interpretation
of 26 U.S.C. 5181, which relates to
AFPs. First, the commenter stated that
it believes ‘‘the interpretation that an
AFP permit may be granted to a facility
that will solely receive and not produce
spirits is inconsistent with the law that
established the AFP.’’ Similarly, the
commenter suggested that TTB should
not allow the establishment of an AFP
for the purpose of receiving imported
alcohol.
TTB Response: As noted in Notice No.
83, while the Bureau had formerly
interpreted 26 U.S.C. 5181(a)(1) to mean
that all alcohol fuel plants must produce
distilled spirits, it is now the position of
the Bureau that a person may establish
an AFP solely for the receipt and
processing of distilled spirits for fuel
use. We also noted that we had already
set the precedent that receipt of distilled
spirits counts as ‘‘production’’ at an AFP
(see former § 19.956, which treated
receipts as production.) Section 5181 of
the IRC was established to generally
encourage and promote (through
regulation or otherwise) the production
of alcohol for fuel purposes. As fuel
needs have changed dramatically, the

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goal of the Bureau’s AFP regulations is
to ensure adequate supplies of fuel
ethanol. We find that it is appropriate to
read the applicable law, 26 U.S.C. 5181,
as permitting facilities to qualify as
AFPs even when their production
operations consist solely of blending
ethanol with authorized denaturants for
the purpose of producing alcohol fuels.
Consistent with the goal stated above, as
well as 26 U.S.C. 5232 which provides
for the receipt of imported spirits by
DSPs, TTB does not distinguish, in this
case, between domestically produced
and imported ethanol.
In its second comment, the
commenter raised specific issues that it
believed should be addressed in the
revision of part 19, and provided
markups of the various regulatory
sections involved in its
recommendations. Specifically, the
commenter’s suggestions and TTB’s
responses to those suggestions are as
follows:
• In addition to the performance
limits for use of mass flow meters
provided in the proposed regulation,
suggested providing specific
performance limits for volumetric flow
meters and other equipment such as
seals and density meters.
TTB Response: The new part 19
regulations, at § 19.284, allow the use of
mass flow meters for tax determination
purposes, as well as volumetric
determinations, and establish
specifications for their performance. In
regard to such equipment as seals and
density meters, the Bureau does not
receive a significant number of requests
for the use of these types of equipment
and evaluates them, when necessary, on
a case-by-case basis.
• Suggested that gauging by accurate
flow meter and by accurate density
meter, as proposed in Notice No. 83, be
reflected in part 30 of the TTB
regulations. The commenter
recommended a direct final rule for part
30 to harmonize with the updated part
19.
TTB Response: The new part 19
regulations, at § 19.188, allow either the
use of the gauging methods specified in
part 30 or the use of accurate meters, so
further changes to this part are
unnecessary in regard to distilled
spirits. We do not believe it is
appropriate to amend part 30 because
part 30 applies to other products in
addition to distilled spirits.
Additionally, any such amendment
would be beyond the scope of this
rulemaking action.
• Made several suggestions about
receipt of denatured spirits at a DSP and
return to bonded premises. One such
suggestion was that denatured spirits

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should be permitted on bonded
premises for comingling, storage, or
withdrawal even after they had been
previously removed.
TTB Response: The IRC in section
5215 permits distilled spirits on which
tax has been determined to be returned
to bonded premises only for destruction,
denaturation, redistillation,
reconditioning or rebottling. Further,
IRC section 5612(a) states that, with
some exceptions not applicable here, no
distilled spirits on which tax has been
paid or determined shall be stored or
allowed to remain on the bonded
premises of any distilled spirits plant,
under the penalty of forfeiture of all
spirits found. The TTB regulations in
part 19 provide alternatives, such as
transfers in bond and alternations of
premises.
• Suggested that fuel alcohol
produced at an AFP be considered
completely denatured alcohol.
TTB Response: Section 5181 of the
IRC, which provides authority for TTB
to permit AFPs, requires that distilled
spirits withdrawn must be rendered
‘‘unfit for beverage use.’’ Section
5214(a)(1) of the IRC authorizes the
withdrawal of distilled spirits from a
DSP after denaturation for specific
purposes, and section 5214(a)(12)
separately authorizes the withdrawal
free of tax for distilled spirits produced
under section 5181. The IRC does not
refer to alcohol produced at an AFP as
‘‘denatured’’ and clearly intends to
distinguish the term ‘‘denatured ’’ as
used for DSPs in general and ‘‘unfit for
beverage use’’ as used for alcohol
produced for fuel use under the
authority of section 5181.
• Suggested the proposal of a direct
final rule for part 21 of the TTB
regulations dealing with completely
denatured alcohol to harmonize the
regulations for fuel produced by an AFP
and CDA 20 produced by a DSP.
TTB Response: This final rule, which
covers proposed substantive changes to
part 19, is not an appropriate venue for
making changes to other parts of the
TTB regulations. We may consider this
proposal in future rulemaking.
• Suggested allowing AFPs to send
samples of undenatured spirits to a lab
off the bonded premises similar to the
procedures for DSPs.
TTB Response: TTB is considering
making a number of substantive changes
to the regulations governing AFPs in a
separate rulemaking initiative. We will
consider this proposal in that
rulemaking action.
• Suggested removing the
requirement for TTB approval for
sending samples to a recognized
commercial laboratory.

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TTB Response: The Bureau is not
adopting this suggestion as TTB needs
to approve a DSP’s transfer activities on
a case-by-case basis. We look at a
number of facts, including risk to the
revenue and compliance history of the
DSP.
• Suggested that TTB remove mark
requirements found in proposed
§ 19.495 for bulk conveyances.
TTB Response: Section 1263 of title
18 of the U.S.C. (18 U.S.C. 1263)
provides criminal sanctions for shipping
distilled spirits without certain
information: The name of the consignee,
the nature of its contents, and the
quantity contained therein. The
requirements of § 19.495 are consistent
with this statute. We note that both the
statute and § 19.495(b) allow shippers to
supply the information on a document
as opposed to marks on the conveyance.
• Suggested changing proposed
§ 19.11 to allow time for verification of
credentials in order to comply with
potential site security and Homeland
Security issues.
TTB Response: We do not adopt the
suggestion because 26 U.S.C. 5203(b)
prescribes the requirement for the right
of immediate entry and examination,
and TTB officers must be able to access
facilities whenever necessary to protect
the revenue or to determine if internal
revenue laws have been violated. TTB is
also concerned with site security issues
and is willing to work with proprietors
on site security and Homeland Security
issues as they arise.
• Suggested changing the alternate
method or procedure process to include
approval for all permit holders.
TTB Response: We do not adopt this
suggestion because not all alternate
method or procedures are appropriate
for industry-wide approval. Alternate
methods and procedures must be
evaluated and approved on a case-bycase basis. If a member of the public
wishes to suggest changes to the
methods or procedures contained in the
regulations for use by all permittees,
that person may submit a petition for
rulemaking to TTB.
• Suggested adding the phrase ‘‘on the
bonded premises’’ after ‘‘All pipelines’’
in § 19.187.
TTB Response: We do not accept this
proposal because § 19.187 is intended to
apply to all pipelines at a DSP, whether
or not they are on bonded premises. The
purposes of this section are to protect
the revenue and to permit ready access
by the appropriate TTB officers to
conduct examinations.
Comments 5 and 6
TTB received a comment from
DISCUS written on behalf of a coalition

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of DISCUS members and another
industry member. TTB received an
additional comment from the industry
member which expressed support for
DISCUS’s comments and provided
further details on how the proposed
changes to part 19 would affect its
operations.
Much of DISCUS’s comment related
to its suggestion that TTB adopt its
concept of ‘‘constructive segregation’’ for
various types of products (wine, beer,
spirits, or flavors) or tax status (taxpaid,
nontaxpaid, or in customs custody).
TTB Response: While we might agree
that in certain circumstances,
constructive segregation provides
adequate protection to the revenue, we
note that the majority of DSPs do not
have the sophisticated equipment
necessary to maintain segregation
through records alone. Accordingly, an
across-the-board regulatory constructive
segregation provision would not be
appropriate. However, proprietors may
submit a request for approval of the use
of constructive segregation as an
alternate method or procedure under
new § 19.27 and we will evaluate such
a request on a case-by-case basis, taking
into account all relevant factors,
including the adequacy of the protection
of the revenue and the proprietor’s
compliance history.
DISCUS also proposed that TTB
eliminate the requirements to submit
diagrams showing extended and
curtailed premises, and that TTB not
adopt the proposal to require
submission of an application and/or
letterhead notice for alternations and
extensions of premises.
TTB Response: We are not adopting
these suggestions because, in order to
ensure compliance with statutory
requirements related to revenue
protection, we must receive specific
information about the layout of a DSP.
However, proprietors may continue to
submit a request for approval of an
alternate method or procedure to vary
from the regulatory requirements, and
we will consider approving such
requests on a case-by-case basis.
DISCUS repeated the comment it
made to Notice No. 870 that suggested
a 200-mile rule for continuity of
premises.
TTB Response: In the preamble to
Notice No. 83, we explained that we
would not adopt a 200-mile rule and the
current comment does not provide
sufficient justification for any change of
our position. We will continue to
evaluate requests for alternate methods
or procedures concerning plant
continuity on a case-by-case basis, each
analysis to be based upon multiple
factors. Generally, we believe that the

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9085

‘‘same general location’’ must not be too
large an area so that the revenue is
placed at risk. Also, because a distance
of 200 miles could extend over a multistate area and would cross over into
different field offices within TTB, such
a distance would create administrative
difficulties for TTB.
DISCUS also commented on TTB’s
proposed changes to alcohol fill
tolerances. It suggested that the Bureau
eliminate the requirement that there be
approximately the same number of
overfills and underfills for each lot
bottled.
TTB Response: We are not adopting
this suggestion because this regulatory
requirement ensures that the proprietor
accurately fills bottles, which supports
proper collection of the revenue and
protects consumers from deception. It is
the responsibility of proprietors to
ensure that their bottling equipment
accurately fills bottles of spirits.
In order to assist proprietors in
determining the standards for fill
tolerances, we proposed a specific
standard of plus or minus 2 percent for
fill. DISCUS and the industry member
state that this tolerance is too small for
small bottle sizes.
TTB Response: We agree and have
adopted a stepped approach to
tolerances similar to fill tolerances used
for wine found in 27 CFR 24.255(b). In
evaluating DISCUS’s and the industry
member’s slightly different proposals for
using a stepped approach similar to that
used in wine regulations, we found a 9
percent tolerance, as proposed for the
smallest bottle sizes, to be too large. The
revised tolerances are found in § 19.356
and range from 1.5 percent for bottles
1.0 liter and above to 4.5 percent for
bottles 100 mL and below.
Comment 7
An individual commented on the
provisions of § 19.387, ‘‘Ensuring the
quality of denaturants.’’ The commenter
suggested that TTB reapply an
exception that appeared in the ATF
regulations prior to 1979 for certain
denaturants that were deposited in
storage under direct supervision of the
assigned ATF officer. The commenter
noted that the prior regulation stated, in
part, ‘‘Synthetic oils approved by the
Director, essential oils as defined in Part
212 of this chapter, pure chemicals
(liquid or solid), or U.S.P. or N.F.
substances used as denaturing materials,
deposited in storage under direct
supervision of the assigned officer in the
original sealed package of a reputable
manufacturer of chemicals, bearing a
label descriptive of the contents placed
thereon by the manufacturer, need not

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be tested except when required by the
Director.’’
TTB Response: The responsibility for
security and purity of denaturants lies
with the proprietor of the plant. Because
denaturants could be adulterated by
various sources, or otherwise be of
nonconforming quality, it is the
responsibility of the proprietor to ensure
that denaturants conform to the
specifications prescribed in part 21 of
the TTB regulations. The exception that
applied prior to 1979 was applicable to
denaturants deposited in storage under
direct supervision of an ATF officer.
Because TTB does not have officers
assigned to each DSP, it would be
inappropriate to retain that exception.
However, it is not the intention of TTB
that the proprietor be required to test
every lot of every denaturant. We have
modified § 19.387 to more clearly state
when testing is required and that the
testing standards of that section apply
only if a proprietor tests any given lot.
Changes to the Proposed Regulations in
This Final Rule
After careful consideration of the
comments received in response to
Notice No. 83, as discussed above, TTB
has made several changes to the
proposed part 19 regulatory texts
contained in that notice of proposed
rulemaking. As discussed below, TTB is
also making other changes to the
proposed part 19 regulatory texts. These
changes are technical in nature; they
provide additional mailing options for
industry members and reflect changes
made to part 19 by final or temporary
rulemakings issued after the publication
of Notice No. 83. TTB also has updated
cross-references to part 19 contained in
other parts of its regulations in 27 CFR

chapter I. In addition, TTB has made
technical corrections or other
nonsubstantive changes to the proposed
part 19 regulatory texts to correct errors
or inconsistencies in format, style,
grammar, or spelling. None of these
corrections or other nonsubstantive
changes affects any regulatory or
recordkeeping requirement contained in
the proposed part 19 regulatory texts as
published in Notice No. 83.
Private Delivery Services
In light of the wide-spread use of
private courier and delivery services by
the public and government agencies,
and in accordance with the IRC at 26
U.S.C. 7502(f), TTB is adding the option
to send tax returns and remittances by
private courier and delivery services to
the requirements found in § 19.238,
Payment by mail or courier. While this
change to part 19 was not included in
Notice No. 83, we believe this change
will afford industry members, the
general public, and TTB greater
flexibility in choosing delivery methods
for documents and other items while
continuing to provide documented
sending and delivery dates.
TTB will use the date of tender to the
delivery service as the date of delivery
if a proprietor sends a return or
remittance to TTB by the use of
traceable delivery services, provided
those services are available to the
general public and are at least as timely
and reliable as the U.S. mail and
provided the date on which items are
given to the service for delivery are
recorded by the service. These changes
to § 19.238 follow the language used in
26 U.S.C. 7502(f) regarding timely
mailing and the use of private delivery
services.

Subsequent Regulatory Changes
Subsequent to the publication of
Notice No. 83, TTB published two
Treasury Decisions that amended
regulatory provisions of part 19.
Changes to the regulatory text in this
final rule reflect these provisions:
• T.D. TTB–89, published in the
Federal Register (76 FR 3502) on
January 20, 2011, updated and reissued
temporary rules regarding semimonthly
and quarterly payment of tax. Provisions
reflecting these subjects are found in
this document at §§ 19.234–19.237 and
§ 19.465.
• T.D. TTB–84, published in the
Federal Register (75 FR 16666), on
April 2, 2010, reflected the removal of
the requirement for Special
(Occupational) Tax and implemented
dealer registration requirements. These
provisions are found in subpart H of
part 19 in this final rule.
Changes to Part 19 Cross-References
Elsewhere in 27 CFR
The revision of part 19 contained in
this final rule also requires the revision
of the cross-references to specific part
19 subparts and sections contained in
other parts of the TTB regulations in 27
CFR chapter I. Except for the regulatory
changes inherent in the revision of part
19 contained in this final rule, the
corrections to the cross-references
described below do not change any
recordkeeping or regulatory requirement
outside of part 19; the changes to these
cross-references are merely technical in
nature.
The cross-references to part 19
requiring changes in 27 CFR chapter I
are shown in the chart below:

srobinson on DSKHWCL6B1PROD with RULES2

CHANGES IN PART 19 CROSS-REFERENCES IN 27 CFR CHAPTER I
In section:

Remove the
reference to:

and replace with
a reference to:

§ 1.82(a) .............................................................................................................................................................
§ 17.162(d) and (f) .............................................................................................................................................
§ 17.163(a) .........................................................................................................................................................
§ 24.226 (1st sentence) .....................................................................................................................................
§ 24.226 (3rd sentence) .....................................................................................................................................
§ 24.235(a) .........................................................................................................................................................
§ 26.199f(a) ........................................................................................................................................................
§ 26.293(a)(3) .....................................................................................................................................................
§ 28.118 .............................................................................................................................................................
§ 30.31(d) ...........................................................................................................................................................
§ 30.52 ...............................................................................................................................................................
§ 31.45(b) ...........................................................................................................................................................
§ 31.65(a) ...........................................................................................................................................................

§ 19.157 ............
§ 19.780 ............
§ 19.780 ............
§ 19.510 ............
§ 19.508 ............
§ 19.522(c) ........
§ 19.562 ............
subpart R ..........
subpart U ..........
§ 19.383 ............
§ 19.722 ............
§ 19.58 ..............
§ 19.58 ..............

§ 19.91
§ 19.626
§ 19.626
§ 19.407
§ 19.405
§ 19.233
§ 19.462
subpart S
subpart Q
§ 19.353
§ 19.582
§ 19.5
§ 19.5

Existing Alternate Methods or
Procedures
By changing the part 19 regulations to
provide for many of the methods or

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procedures formerly approved as
alternate methods or procedures, these
regulations have made a number of
former approvals obsolete. However,

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there are some preexisting alternate
methods or procedures that we did not
make universally applicable and that we
did not intend to revoke with this

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revision to part 19. Accordingly, any
proprietor with a valid, unrevoked
alternate method or procedure issued
under the authority of the current
§ 19.62 (recodified in the new § 19.26)
that is not contrary to the new
regulations may continue to use the
approval. Note, however, that any
change in law or regulation that makes
the alternate method or procedure
contrary to law or regulation revokes the
alternate method or procedure by the
application of law.
It is the proprietor’s responsibility to
ensure that these existing alternate
methods or procedures are not contrary
to the new regulations, that is, that they
remain consistent with the purpose and
effect of the methods and procedures
prescribed in this revised part. A
proprietor may write to the Director,
Regulations and Rulings Division, or the
Director, National Revenue Center, as
appropriate, to request that approvals in
existence prior to the adoption of this
final rule be reevaluated under the new
regulations.
Any conditions in alternate methods
or procedures continue to apply. TTB
may revoke any alternate method or
procedure if there is jeopardy to the
revenue or if the method or procedure
increases cost to the Government or
hinders TTB’s administration of part 19.
Derivation Table for Proposed Part 19
The following table shows the
derivation of the new sections of
regulations. It is cross-referenced
between the new section numbers in the
revised 27 CFR part 19 regulations
contained in this final rule document
and the section numbers in the existing
part 19 regulations in effect at the time
of publication of this final rule.
Requirements of
new section:

Are derived from current
section:

19.0 ..................

19.1

19.1
19.2
19.3
19.4
19.5

..................
..................
..................
..................
..................

19.11
19.2
19.3
19.57
19.58

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Subpart B
19.11
19.12
19.13
19.14
19.15
19.16
19.17
19.18
19.19
19.20
19.26

................
................
................
................
................
................
................
................
................
................
................

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19.81
19.86
19.75
19.4
19.61
19.724
19.82
19.83
19.79
19.77
19.62

18:04 Feb 15, 2011

Requirements of
new section:

Are derived from current
section:

Requirements of
new section:

Are derived from current
section:

19.27
19.28
19.29
19.31
19.32
19.33
19.34
19.35
19.36
19.37
19.38
19.45

19.62
19.73
19.70, 19.74
19.63
19.65
19.66
19.71
19.71
19.67
19.67
19.78
19.100

19.141
19.142
19.143
19.144
19.147

19.201
19.202
19.203 through 19.206
19.207
19.211

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Subpart C
19.51
19.52
19.53
19.54
19.55
19.56
19.58
19.59
19.60

................
................
................
................
................
................
................
................
................

New
19.131
19.132
19.133
19.68, 19.72
19.134
19.97
19.98
19.99
Subpart D

19.71
19.72
19.73
19.74
19.75
19.76
19.77
19.78
19.79
19.80
19.81
19.91
19.92
19.93
19.94
19.95
19.96
19.97
19.98
19.99

19.151
19.151
19.152
19.168
19.166
19.153
19.170, 19.324
19.156
19.169
19.154
19.155
19.157
19.158
19.167
19.165
19.159
19.161
19.162
19.160
19.163
Subpart E

19.111
19.112
19.113
19.114
19.115
19.116
19.117
19.118
19.119
19.120
19.121
19.122
19.123
19.126
19.127
19.128
19.129
19.130
19.131
19.132
19.133
19.134
19.135

Subpart A

9087

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New
19.180
19.182
19.184
19.185
19.186, 19.187
19.188
19.189
19.190
19.191
19.192
19.193
19.153(b)
19.180
19.181
19.182
19.183
19.184
19.185
19.186, 19.187
19.188
19.189
19.191

Fmt 4701

Sfmt 4700

..............
..............
..............
..............
..............

Subpart F
19.151
19.152
19.153
19.154
19.155
19.156
19.157
19.161
19.162
19.163
19.164
19.165
19.166
19.167
19.168
19.169
19.170
19.171
19.172
19.173

19.231, 19.232
19.231
19.233
19.234
19.235
19.236
19.237
19.231, 19.232
19.241
19.242
19.243
19.244
19.245
19.246
19.247, 19.248
19.248
19.249
19.250
19.251
19.252
Subpart G

19.181
19.182
19.183
19.184
19.185
19.186
19.187
19.188
19.189
19.190
19.191
19.192
19.193

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

New
19.273
19.273
19.273
19.273
19.276
19.274
19.277
19.278
19.279
19.280
19.281
19.282
Subpart H

19.201
19.202
19.203
19.204

..............
..............
..............
..............

19.49
19.50
19.51
19.52
Subpart I

19.221
19.222
19.223
19.225
19.226
19.227
19.229
19.230
19.231
19.233
19.234
19.235
19.236
19.237
19.238
19.239
19.240
19.242
19.243
19.245

E:\FR\FM\16FER2.SGM

16FER2

New
19.21 through 19.23
19.24
19.25, 19.515, 19.526
19.517
19.515
New
19.515(b), 19.522(b)
19.516
19.522(c), 19.523(b)
19.522(a), 19.523(a)
19.522, 19.523
19.523
19.523
19.525
19.519
19.524
19.520
19.521
New

9088

Federal Register / Vol. 76, No. 32 / Wednesday, February 16, 2011 / Rules and Regulations

Requirements of
new section:

Are derived from current
section:

19.246
19.247
19.248
19.249
19.250
19.253
19.254
19.256
19.257
19.258

19.34
19.35
19.36
19.37
19.38
19.31
19.32
19.26
19.518
19.486

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

..............
..............
..............
..............
..............
..............
..............
..............
..............

New
19.44
19.41
19.42
19.43
19.45
19.46
19.76
19.487
Subpart K

19.281
19.282
19.283
19.284
19.285
19.286
19.287
19.288
19.289

..............
..............
..............
..............
..............
..............
..............
..............
..............

New
19.84
19.92
19.91, 19.92(a), 19.93
19.92(a)
19.91(a)
19.91(b)
19.503
19.319
Subpart L

19.291
19.292
19.293
19.294
19.295
19.296
19.297
19.301
19.302
19.303
19.304
19.305
19.306
19.307
19.308
19.309
19.310
19.312
19.314
19.315
19.316

New
19.311
19.312
19.314
19.315
19.312
19.313
19.316
19.317
19.318
19.319
19.320
19.321
19.322
19.326
19.327
19.328
19.329
19.331
19.332
19.333

srobinson on DSKHWCL6B1PROD with RULES2

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

VerDate Mar<15>2010

19.371
19.372
19.373
19.374
19.376
19.378
19.381
19.382
19.383
19.384, 19.400
19.385
19.386
19.387
19.388
19.389
19.390
19.391
19.392
19.393
19.394
19.397
19.398
19.401
19.402
Subpart O

19.381
19.382
19.383
19.384
19.385
19.386
19.387
19.388
19.389
19.390
19.391
19.392
19.393
19.394
19.395
19.396

19.401
19.402
19.403
19.404
19.405
19.406
19.407
19.409
19.410
19.411
19.414
19.415
19.418
19.419
19.420
19.421
19.424
19.425
19.426
19.427
19.428
19.431
19.434
19.435
19.436

19.341
19.342
19.344
19.345
19.346
19.347
19.348
19.349
19.343
19.353

18:04 Feb 15, 2011

19.341
19.342
19.343
19.344
19.346
19.348
19.351
19.352
19.353
19.354
19.355
19.356
19.357
19.358
19.359
19.360
19.361
19.362
19.363
19.364
19.365
19.366
19.371
19.372

19.451
19.452
19.454
19.451, 19.456
19.455
19.457
19.453
19.461
19.462
19.463
19.459
19.460
19.458
19.464
19.471
19.451
Subpart P

Subpart M
19.321
19.322
19.324
19.325
19.326
19.327
19.328
19.329
19.331
19.333

Are derived from current
section:
Subpart N

Subpart J
19.261
19.262
19.263
19.264
19.265
19.266
19.267
19.268
19.269

Requirements of
new section:

Jkt 223001

PO 00000

Frm 00010

New
19.505
19.506
19.507
19.508
19.509
19.510
19.481
19.482
19.483
19.484
19.485
19.531
19.532
19.533
19.534
19.536
19.537
19.538
19.540
19.541
19.502
19.701
19.702
19.703

Fmt 4701

Sfmt 4700

Requirements of
new section:

Are derived from current
section:

19.437 ..............
19.441 ..............

19.704
19.96
Subpart Q

19.451
19.452
19.453
19.454
19,455
19.457
19.459

..............
..............
..............
..............
..............
..............
..............

New
19.681, 19.682
New
19.683 through 19.686
19.687
19.688
19.691
Subpart R

19.461
19.462
19.463
19.464
19.465

..............
..............
..............
..............
..............

19.561
19.562
19.563
19.564
19.565
Subpart S

19.471
19.472
19.473
19.474
19.475
19.476
19.477
19.478
19.479
19.482
19.483
19.484
19.485
19.486
19.487
19.488
19.489
19.490
19.491
19.492
19.493
19.494
19.495
19.496
19.497
19.498
19.499

New and 19.581
New
19.581
19.582
19.583
19.584
19.585
19.588
19.589
19.592
19.595
19.596(a) and (c)
19.593
19.599
19.597
19.596(b) and (c)
19.607
19.594
19.601
19.602
19.604
19.605
19.606
19.608
19.610
19.611
19.612
Subpart T

19.511
19.512
19.513
19.516
19.517
19.518
19.519
19.520
19.523
19.525

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

19.632
19.637
19.633
19.641
19.642–19.650
19.645
19.395
19.396
19.661, 19.662
19.663

Subpart U—Reserved
Subpart V
19.571
19.572
19.573
19.574
19.575
19.576
19.577

E:\FR\FM\16FER2.SGM

..............
..............
..............
..............
..............
..............
..............

16FER2

19.721
19.721, 19.731
19.723(a)
19.723(a) and (b)
19.723(c)
19.723(b)
19.721(c), 19.723(c)

Federal Register / Vol. 76, No. 32 / Wednesday, February 16, 2011 / Rules and Regulations
Requirements of
new section:

Are derived from current
section:

Requirements of
new section:

Are derived from current
section:

19.578
19.580
19.581
19.582
19.584
19.585
19.586
19.590
19.591
19.592
19.593
19.596
19.597
19.598
19.599
19.600
19.601
19.602
19.603
19.604
19.606
19.607
19.611
19.612
19.613
19.614
19.615
19.616
19.617
19.618
19.619
19.620
19.621
19.622
19.623
19.624
19.625
19.626
19.627
19.631
19.632
19.634

19.721(d)
19.731
19.731(b), 19.732
19.722
19.736
19.736
19.736
19.740
19.741
19.742
19.743
19.746
19.747
19.748
19.749
19.750
19.751
19.748(b)
19.747
19.747
19.752
19.753
19.761
19.762
19.763
19.764
19.765
19.766
19.767
19.768
19.769
19.770
19.770
19.773
19.774
19.778
19.779
19.780
New
19.791
19.792
New

19.677
19.678
19.679
19.680
19.683
19.684
19.685
19.686
19.687
19.688
19.689
19.690
19.691
19.692
19.693
19.695
19.697
19.699
19.700
19.703
19.704
19.706
19.709
19.710
19.714
19.715
19.716
19.717
19.718

19.719
19.720
19.722
19.723
19.724
19.726
19.727
19.728
19.729
19.733
19.734
19.735
19.736
19.739
19.742
19.746
19.747
19.749
19.752

19.916
19.911
19.910
19.910
19.919
19.920
19.921
19.922
19.923
19.924
19.925
19.926
New
19.930
19.930
19.945
19.950
19.955, 19.958, 19.959
19.956, 19.957
19.965
19.966, 19.967
19.970
19.980
19.981
19.982
19.982
19.987
19.982
19.982, 19.984, 19.985,
19.986
19.983
19.988
19.990
19.990
19.990
19.1002
19.995
19.996
19.997
19.998
19.999
19.1000
19.1001
19.998
New
19.1005
19.1006
19.1007
19.1008

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

Subpart W
19.641
19.643
19.644
19.645
19.646
19.647
19.648
19.649
19.650
19.651

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

19.821
19.822
19.823
19.824
19.825
19.826
19.827
19.828
19.829
19.830

Subpart Y
19.761 ..............

Regulatory Analyses and Notices

srobinson on DSKHWCL6B1PROD with RULES2

Subpart X
19.661
19.662
19.663
19.665
19.666
19.667
19.669
19.670
19.672
19.673

..............
..............
..............
..............
..............
..............
..............
..............
..............
..............

19.674 ..............
19.675 ..............
19.676 ..............

VerDate Mar<15>2010

New & 19.901
19.907
19.901, 19.902
19.903
19.903
19.904
19.905
19.906
New
19.910, 19.912, 19.913,
19.918
19.913
19.910, 19.914, 19.918
19.910, 19.915 through
19.918

18:04 Feb 15, 2011

19.1010

Jkt 223001

Paperwork Reduction Act
The collections of information
contained in this final rule have been
previously reviewed and approved by
the Office of Management and Budget in
accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C. 3507)
under control numbers: 1513–0013,
1513–0014, 1513–0020, 1513–0030,
1513–0038, 1513–0039, 1513–0040,
1513–0041, 1513–0044, 1513–0045,
1513–0046, 1513–0047, 1513–0048,
1513–0049, 1513–0051, 1513–0052,
1513–0056, 1513–0080, 1513–0081,
1513–0083, 1513–0088, and 1513–0113.

PO 00000

Frm 00011

Fmt 4701

Sfmt 4700

9089

An agency may not conduct or sponsor,
and a person is not required to respond
to, a collection of information unless it
displays a valid control number
assigned by OMB.
Regulatory Flexibility Act
The Regulatory Flexibility Act, 5
U.S.C. 601 et seq., provides that
whenever a Federal agency proposes
regulations that may have a significant
economic impact on a substantial
number of small entities, the agency
must prepare a regulatory flexibility
analysis.
The provisions of the Regulatory
Flexibility Act relating to an initial and
final regulatory flexibility analysis (5
U.S.C. 603 and 604) are not applicable
when a final rule does not have a
significant economic impact on a
substantial number of small entities.
This rule restates existing regulations in
plain language, makes certain variations
currently granted to individual plants
available to all plants, and adopts
certain suggestions made by industry
associations to reduce the burdens of
regulatory compliance. This rule
reduces the burden on members of the
distilled spirits industry, including
small businesses. Accordingly, it is
hereby certified that this final rule will
not have a significant economic impact
on a substantial number of small entities
and a regulatory flexibility analysis is
not required.
Executive Order 12866
We have determined that this final
rule is not a significant regulatory action
as defined in Executive Order 12866.
Therefore, a regulatory assessment is not
required.
Executive Order 13132
Executive Order 13132, entitled
‘‘Federalism’’ (64 FR 43255, August 10,
1999), requires Federal agencies to
ensure ‘‘meaningful and timely input by
State and local officials in the
development of regulatory policies that
have federalism implications.’’ We
certify that this final rule does not have
federalism implications. This final rule
will not have substantial direct effects
on the States, on the relationship
between the National Government and
the States, or on the distribution of
power and responsibilities among the
various levels of Government.
Drafting Information
This notice was prepared by
Christopher M. Thiemann of the
Regulations and Rulings Division, along
with several other employees of the
Alcohol and Tobacco Tax and Trade
Bureau.

E:\FR\FM\16FER2.SGM

16FER2

9090

Federal Register / Vol. 76, No. 32 / Wednesday, February 16, 2011 / Rules and Regulations

List of Subjects

27 CFR Part 31

27 CFR Part 1

Alcohol and alcoholic beverages,
Claims, Excise taxes, Exports, Packaging
and containers, Reporting and
recordkeeping requirements.

Administrative practice and
procedure, Alcohol and alcoholic
beverages, Imports, Liquors, Packaging
and containers, Warehouses, Wine.
27 CFR Part 17
Administrative practice and
procedure, Claims, Cosmetics, Customs
duties and inspection, Drugs, Excise
taxes, Exports, Imports, Liquors,
Packaging and containers, Puerto Rico,
Reporting and recordkeeping
requirements, Spices and flavorings,
Surety bonds, Virgin Islands.
27 CFR Part 19
Administrative practice and
procedure, Alcohol and alcoholic
beverages, Authority delegations
(Government agencies), Caribbean Basin
initiative, Chemicals, Claims, Customs
duties and inspection, Electronic funds
transfers, Excise taxes, Exports, Gasohol,
Imports, Labeling, Liquors, Packaging
and containers, Puerto Rico, Reporting
and recordkeeping requirements,
Research, Security measures, Spices and
flavorings, Stills, Surety bonds,
Transportation, Vinegar, Virgin Islands,
Warehouses, Wine.
27 CFR Part 24

srobinson on DSKHWCL6B1PROD with RULES2

§ 1.82

[Amended]

2. In § 1.82, paragraph (a) is amended
by removing the reference to ‘‘§ 19.157’’
and adding, in its place, a reference to
‘‘§ 19.91’’.

■

PART 17—DRAWBACK ON TAXPAID
DISTILLED SPIRITS USED IN
MANUFACTURING NONBEVERAGE
PRODUCTS

[Amended]

4. In § 17.162, paragraphs (d) and (f)
are amended by removing the references
to ‘‘§ 19.780’’ and adding, in their place,
references to ‘‘§ 19.626’’.

■

Aircraft, Alcohol and alcoholic
beverages, Armed forces, Beer, Claims,
Excise taxes, Exports, Foreign trade
zones, Labeling, Liquors, Packaging and
containers, Reporting and recordkeeping
requirements, Surety bonds, Vessels,
Warehouses, Wine.

Jkt 223001

Authority: 27 U.S.C. 203, 204, 206, 211
unless otherwise noted.

§ 17.162

27 CFR Part 28

18:04 Feb 15, 2011

1. The authority citation for 27 CFR
part 1 continues to read as follows:

■

Authority: 26 U.S.C. 5010, 5111–5114,
5123, 5206, 5273, 6065, 6091, 6109, 7213,
7652, 7805; 31 U.S.C. 9301, 9303, 9304, 9306.

Alcohol and alcoholic beverages,
Caribbean Basin initiative, Claims,
Customs duties and inspection,
Electronic funds transfers, Excise taxes,
Packaging and containers, Puerto Rico,
Reporting and recordkeeping
requirements, Surety bonds, Virgin
Islands, Warehouses.

VerDate Mar<15>2010

PART 1—BASIC PERMIT
REQUIREMENTS UNDER THE
FEDERAL ALCOHOL
ADMINISTRATION ACT,
NONINDUSTRIAL USE OF DISTILLED
SPIRITS AND WINE, BULK SALES AND
BOTTLING OF DISTILLED SPIRITS

3. The authority citation for 27 CFR
part 17 continues to read as follows:

27 CFR Part 26

Liquors, Scientific equipment.

For the reasons explained in the
preamble, TTB amends chapter I of title
27 of the Code of Federal Regulations as
follows:

■

Administrative practice and
procedure, Claims, Electronic funds
transfers, Excise taxes, Exports, Food
additives, Fruit juices, Labeling,
Liquors, Packaging and containers,
Reporting and recordkeeping
requirements, Research, Scientific
equipment, Spices and flavorings,
Surety bonds, Vinegar, Warehouses,
Wine.

27 CFR Part 30

Authority and Issuance

§ 17.163

[Amended]

5. In § 17.163, paragraph (a) is
amended by removing the reference to
‘‘§ 19.780’’ and adding, in its place, a
reference to ‘‘§ 19.626’’.
■ 6. Part 19 of title 27 Code of Federal
Regulations is revised to read as follows:
■

PART 19—DISTILLED SPIRITS
PLANTS
Sec.
19.0

Scope.

Subpart A—General Provisions
19.1 Definitions.
19.2 Territorial extent of these regulations.
19.3 Related regulations.
19.4 Recovery and reuse of denatured
spirits in manufacturing processes.
19.5 Manufacturing products unfit for
beverage use.

PO 00000

Frm 00012

Fmt 4701

Sfmt 4700

Subpart B—Administrative and
Miscellaneous Provisions
19.11 Right of entry and examination.
19.12 Furnishing facilities and assistance.
19.13 Assignment of officers and
supervision of operations.
19.14 Delegation of the Administrator’s
authorities to the appropriate TTB
officer.
19.15 Forms prescribed.
19.16 Modified forms.
19.17 Detention of containers.
19.18 Samples for the United States.
19.19 Discontinuance of storage facilities.
19.20 Installation of meters, tanks, and
other apparatus.
Alternate Methods or Procedures and
Experimental Operations
19.26 lternate methods or procedures.
19.27 Application for and use of alternative
method or procedure.
19.28 Emergency variations from
requirements.
19.29 Exemptions for national defense and
disasters.
19.31 Pilot operations.
19.32 Experimental distilled spirits plants.
19.33 Application to establish experimental
plants.
19.34 Experimental or research operations
by scientific institutions and colleges of
learning.
19.35 Application by scientific institutions
and colleges of learning for experimental
or research operations.
19.36 Spirits produced in industrial
processes.
19.37 Application for industrial processes
waiver.
19.38 Approval of required documents.
‘‘Penalties of Perjury’’ Declaration
19.45 Execution under penalties of perjury.
Subpart C—Restrictions on Production,
Location, and Use of Plants
19.51 Home production of distilled spirits
prohibited.
Rules for Location and Use of a DSP
19.52 Restrictions on location of plants.
19.53 Continuity of plant premises.
19.54 Use of distilled spirits plant premises.
19.55 Other businesses.
19.56 Bonded warehouses not on premises
qualified for production of spirits.
Conveyance of Spirits or Wines on Plant
Premises
19.58 Taxpaid spirits or wines on bonded
premises.
19.59 Conveyance of untaxpaid spirits or
wines within a distilled spirits plant.
19.60 Spirits in customs custody.
Subpart D—Registration of a Distilled
Spirits Plant and Obtaining a Permit
19.71 Registration and permits in general.
Requirements for Registering a Plant
19.72 General requirements for registration.
19.73 Information required in application
for registration.
19.74 Description of the plant.
19.75 Major equipment.
19.76 Statement of plant security.

E:\FR\FM\16FER2.SGM

16FER2

Federal Register / Vol. 76, No. 32 / Wednesday, February 16, 2011 / Rules and Regulations
19.77
19.78
19.79
19.80
19.81

Statement of production procedure.
Power of attorney.
Registry of stills.
Approved notice of registration.
Maintenance of registration file.

Requirements for an Operating Permit
Under the IRC
19.91 Operating permit.
19.92 Information required in application
for operating permit.
19.93 Applicant organization documents.
19.94 Trade names.
19.95 Issuance of operating permits.
19.96 Denial of permit.
19.97 Correction of permit.
19.98 Duration of permit.
19.99 Suspension or revocation of permit.
Subpart E—Changes to Registrations and
Permits
19.111 Scope.
Rules for Amending a Registration
19.112 General rules for amending a
registration.
19.113 Change in name of proprietor.
19.114 Changes in stockholders or persons
with interest.
19.115 Change in officers, directors,
members, or managers.
19.116 Change in proprietorship.
19.117 Partnerships.
19.118 Change in location.
19.119 Change in premises.
19.120 Change in operations.
19.121 Change in production procedure.
19.122 Change in construction or use of
buildings and equipment.
19.123 Statement of plant security.
Rules for Amending an Operating Permit
19.126 General rules for amending an
operating permit.
19.127 Automatic termination of permits.
19.128 Change in name of proprietor.
19.129 Change in trade name.
19.130 Changes in stockholders or persons
with interest.
19.131 Changes in officers, directors,
members, or managers.
19.132 Change in proprietorship.
19.133 Partnerships.
19.134 Change in location.
19.135 Change in operations.
Alternation of Plant Proprietors
19.141 Procedures for alternation of
proprietors.

srobinson on DSKHWCL6B1PROD with RULES2

Conduct of Alternate Operations at a Plant
19.142 Alternate use of premises and
equipment for customs purposes.
19.143 Alternation for other purposes.
19.144 Alternation of distilled spirits plant
and volatile fruit-flavor concentrate plant
premises.
Discontinuance of Operations
19.147 Notice of discontinuance of
operations.
Subpart F—Bonds and Consents of Surety
Bonding Requirements for a DSP
19.151 General.
19.152 Types of bonds.

VerDate Mar<15>2010

18:04 Feb 15, 2011

Jkt 223001

19.153 Bond guaranteed by a corporate
surety.
19.154 Bond guaranteed by deposit of
securities.
19.155 Consent of surety bond terms—
consent of surety.
19.156 Power of attorney for surety.
19.157 Disapproval of bonds and consents
of surety.
Requirements for Operations and
Withdrawal Bonds
19.161 Operations bond.
19.162 Operations bond for distilled spirits
plant and adjacent bonded wine cellar.
19.163 Area operations bond.
19.164 Withdrawal bond.
19.165 Unit bonds.
19.166 Required penal sums.
19.167 Increase of bond coverage.
19.168 Superseding bonds.
19.169 Effect of failure to furnish a
superseding bond.
19.170 Termination of bonds.
19.171 Surety notice of relief from bond
liability.
19.172 Relief of surety from bond liability.
19.173 Release of pledged securities.
Subpart G—Construction, Equipment, and
Security Requirements
19.181 General.
Tank Requirements
19.182 Tanks—general requirements.
19.183 Scale tanks.
19.184 Scale tank minimum graduations.
19.185 Testing scale tanks for accuracy.
Package Scale and Pipeline Requirements
19.186 Package scales.
19.187 Pipelines.
Measuring and Proofing Equipment
Requirements
19.188 Measuring devices and proofing
instruments.
Other Plant Requirements
19.189 Identification of structures, areas,
apparatus, and equipment.
19.190 Office facilities for TTB use.
19.191 Signs.
19.192 Security.
19.193 Breaking Government locks.
Subpart H—Dealer Registration and
Recordkeeping
19.201 Definitions.
19.202 Dealer registration.
19.203 Amending the dealer registration.
19.204 Dealer records.
Subpart I—Distilled Spirits Taxes
19.221 Scope.
Basic Provisions of Tax Law Affecting
Spirits
19.222 Basic tax law provisions.
19.223 Persons liable for tax.
Requirements for Gauging and Tax
Determination
19.225 Requirement to gauge and tax
determine spirits.
19.226 Gauges for tax determination.
19.227 Determination of the tax.

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Rules for Deferred Payment and Prepayment
of Taxes
19.229 Deferred payment and prepayment
of taxes.
19.230 Conditions requiring prepayment of
taxes.
19.231 Accounting for bond coverage.
Requirements for Filing Tax Returns
19.233 Filing prepayment returns.
19.234 Filing deferred payment returns.
19.235 Deferred payment return periods—
quarterly and semimonthly.
19.236 Due dates for returns.
19.237 Special rule for semimonthly filers
for the month of September.
19.238 Payment by mail or courier.
19.239 Form of payment.
19.240 Payment of tax by electronic fund
transfer.
Requirements for Employer Identification
Numbers
19.242 Employer identification number.
19.243 Application for employer
identification number.
Effective Tax Rates
19.245 Tax credits under 26 U.S.C. 5010.
19.246 Computing the effective tax rate for
a product.
19.247 Use of effective (actual) tax rates.
19.248 Standard effective tax rate.
19.249 Average effective tax rate.
19.250 Inventory reserve account.
Assessment of Taxes by TTB
19.253 Assessment of tax on spirits not
accounted for or reported.
19.254 Assessment of tax for losses or
unauthorized removals.
Additional Tax Provisions
19.256 Tax on wine.
19.257 Imported spirits.
19.258 Additional tax on nonbeverage
spirits.
Subpart J—Claims
19.261 Scope.
Requirements for Filing Claims
19.262 General requirements for filing
claims.
19.263 Claims on spirits, denatured spirits,
articles, or wines lost or destroyed in
bond—specific requirements.
19.264 Claims on spirits returned to bonded
premises—specific requirements.
19.265 Claims relating to spirits lost after
tax determination.
Rules Regarding Credits, Abatement,
Remission, or Refund
19.266 Claims for credit of tax.
19.267 Adjustments for credited tax.
19.268 Allowance of remission, abatement,
credit, or refund of tax.
Rules for Puerto Rican and Virgin Islands
Spirits
19.269 Puerto Rican and Virgin Islands
spirits.
Subpart K—Gauging
19.281 Scope.
19.282 General requirements for gauging
and measuring equipment.

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Required Gauges
19.283

Use of Oak Chips and Caramel
19.331 Use of oak chips in spirits and
caramel in brandy and rum.

When gauges are required.

Rules for Gauging

Storage Inventories
19.333 Physical inventories.

19.284 Quantity determination of bulk
spirits.
19.285 Proof determination of distilled
spirits.
19.286 Gauging of spirits in bottles.
19.287 Gauging of alcoholic flavoring
materials.
19.288 Determination of tare.
19.289 Production gauge.

Subpart N—Processing of Distilled Spirits
19.341 General.

Subpart L—Production of Distilled Spirits
19.291

General.

Notification to TTB When Beginning or
Suspending Production Operations
19.292

Notice of operations.

Obscuration Determination
19.346 Determining obscuration.

Rules for Receipt, Use, and Disposal of
Materials
19.293 Receipt of materials.
19.294 Removal of fermenting material.
19.295 Removal or destruction of distilling
material.
19.296 Fermented materials.
19.297 Use of materials in production of
spirits.
Rules for Production of Spirits
19.301 Distillation.
19.302 Treatment during production.
19.303 Addition of caramel to rum or
brandy and addition of oak chips to
spirits.
19.304 Production gauge.
19.305 Identification of spirits.
19.306 Entry.
19.307 Distillates containing extraneous
substances.
Rules for Chemical Byproducts
19.308 Spirits content of chemicals
produced.
19.309 Disposition of chemicals.
19.310 Wash water.
Physical inventories.

Rules for Redistillation
19.314
19.315
19.316

General.

Receipt and Storage of Spirits and Wines
19.322 Receipt and storage of bulk spirits
and wines.

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Rules for Filling and Changing Packages
19.324
19.325

Filling of packages from tanks.
Change of packages.

Rules for Mingling or Blending Spirits
19.326 Mingling or blending of spirits for
further storage.
19.327 Packages dumped for mingling.
19.328 Determining age of mingled spirits.
19.329 Mingled spirits or wines held in
tanks.

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Rules for Bottling, Packaging, and Removal
of Products
19.351 Removals from processing.
19.352 Bottling tanks.
19.353 Bottling tank gauge.
19.354 Bottling or packaging records.
19.355 Labels describing the spirits.
19.356 Alcohol content and fill.
19.357 Completion of bottling.
19.358 Cases.
19.359 Remnants.
19.360 Filling packages.
19.361 Removals by bulk conveyances or
pipelines.
19.362 Rebottling.
19.363 Reclosing and relabeling.
19.364 Bottled-in-bond spirits.
19.365 Spirits not originally intended for
export.
19.366 Alcohol.

Subpart O—Denaturing Operations and
Manufacture of Articles
19.381 General.
19.382 Formulas.

General.
Receipts for redistillation.
Redistillation.

Subpart M—Storage of Distilled Spirits
19.321

Filing Formulas with TTB
19.348 Formula requirements.

Requirements for Processing Inventories
19.371 Inventories of wines and bulk spirits
in processing.
19.372 Physical inventories of bottled and
packaged spirits.

Production Inventories
19.312

Rules for Receipt and Use of Spirits, Wines,
and Alcoholic Flavoring Materials
19.342 Receipt of spirits, wines, and
alcoholic flavoring materials for
processing.
19.343 Use of spirits, wines, and alcoholic
flavoring materials.
19.344 Manufacture of nonbeverage
products, intermediate products, or
eligible flavors.

Rules for Denaturing Spirits and Testing
Denaturants
19.383 Gauge for denaturation.
19.384 Adding denaturants to spirits.
19.385 Making alcohol or water solutions of
denaturants.
19.386 Adjusting pH of denatured spirits.
19.387 Ensuring the quality of denaturants.
Rules for Storing Denatured Spirits and
Filling Containers
19.388 Storing denatured spirits.
19.389 Filling containers from tanks.
19.390 Container marking requirements.
Rules for Mixing and Converting Denatured
Spirits
19.391 Mixing denatured spirits.

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19.392 Converting denatured alcohol to a
different formula.
Rules for Restoration and Redenaturation,
Inventories, and Manufacture of Articles;
Records Required
19.393 Restoration and redenaturation of
recovered denatured spirits and
recovered articles.
19.394 Inventory of denatured spirits.
19.395 Manufacture of articles.
19.396 Required records.
Subpart P—Transfers, Receipts, and
Withdrawals
19.401

Authorized transactions.

Transfers Between Bonded Premises
19.402 Authorized transfers in bond.
19.403 Application to receive spirits in
bond.
19.404 Termination of application.
19.405 Consignor for in-bond shipments.
19.406 Reconsignment of in-bond
shipments.
19.407 Consignee premises.
Receipt of Spirits from Customs Custody
19.409
19.410
19.411

General.
Age and fill date.
Recording gauge.

Marking Requirements for Imported Spirits
19.414 Marks on containers of imported
spirits.
19.415 Marks on containers of Puerto Rican
and Virgin Islands spirits.
Spirits Withdrawn Without Payment of Tax
19.418 Authorized withdrawals without
payment of tax.
19.419 Withdrawals of wine spirits for use
in wine production.
19.420 Withdrawals of spirits without
payment of tax for experimental or
research use.
19.421 Withdrawals of spirits for use in
production of nonbeverage wine and
nonbeverage wine products.
Spirits Withdrawn Free of Tax
19.424 Authorized withdrawals free of tax.
19.425 Withdrawal of spirits free of tax.
19.426 Withdrawal of spirits by the United
States.
19.427 Removal of denatured spirits and
articles.
19.428 Reconsignment.
Spirits Withdrawn on Production Gauge
19.431 Withdrawal of spirits on production
gauge.
Rules for Taking Sample of Spirits
19.434 Spirits withdrawn from bonded
premises.
19.435 Samples used on bonded premises.
19.436 Taxpayment of samples.
19.437 Labels.
Securing Conveyances
19.441

Securing of conveyances.

Subpart Q—Return of Spirits to Bonded
Premises and Voluntary Destruction
19.451

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Conditions for Return of Spirits to Bond
19.452 Return of taxpaid spirits to bonded
premises for destruction, denaturation,
redistillation, reconditioning, or
rebottling.
19.453 Return of bottled spirits for
relabeling or reclosing.
19.454 Other authorized returns to bonded
premises.
19.455 Return of spirits withdrawn for
export with benefit of drawback.
19.457 Receipt of spirits abandoned to the
United States.
Rules for Voluntary Destruction
19.459 Voluntary destruction.

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Requirements for Containers
19.473 Authorized containers.
19.474 Spirits for nonindustrial use.
19.475 Spirits for industrial use.
19.476 Packages.
19.477 Use of bulk conveyances.
19.478 Construction requirements for bulk
conveyances.
19.479 Restrictions on dispositions of bulk
spirits.
Marking Requirements for Spirits
19.482 General.
19.483 Specifications for marks.
19.484 Marks on packages filled in
production or storage.
19.485 Package identification numbers in
production and storage.
19.486 Change of packages in storage.
19.487 Kind of spirits.
19.488 Marks on packages filled in
processing.
19.489 Marks on cases filled in processing.
19.490 Numbering of packages and cases
filled in processing.
19.491 Marks on containers of specially
denatured spirits.
19.492 Marks on containers of completely
denatured alcohol.
19.493 Caution label for completely
denatured alcohol.
19.494 Additional marks on portable
containers.
19.495 Marks on bulk conveyances.
19.496 Cases of industrial alcohol.
19.497 Obliteration of marks.
19.498 Relabeling and reclosing off bonded
premises.
19.499 Authorized abbreviations to identify
marks.

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Closure Requirements
19.523 Affixing closures.
19.525 Reclosing.

Subpart V—Records and Reports

Subpart S—Containers and Marks
19.471 General.
19.472 Need to determine use of spirits—
industrial or nonindustrial.

Authorized Liquor Bottles
19.511 Bottles authorized.
19.512 Bottles not constituting approved
containers.

Distinctive liquor bottles.

Labeling Requirements
19.516 Certificate of label approval or
exemption.
19.517 Statements required on labels under
an exemption from label approval.
19.518 Name and address of bottler.
19.519 Labels for export spirits.
19.520 Spirits for shipment to Puerto Rico.

Subpart U—[Reserved]

Subpart R—Losses and Shortages
19.461 Losses and shortages in general.
19.462 Determination of losses in bond.
19.463 Loss of spirits from packages.
19.464 Losses after tax determination.
19.465 Shortages of bottled spirits.

Subpart T—Liquor Bottle, Label, and
Closure Requirements

19.513

General Rules for Records
19.571 Records in general.
19.572 Format of records.
19.573 Location of required records.
19.574 Availability of records.
19.575 Retention of records.
19.576 Preservation of records.
19.577 Documents that are not records.
19.578 Financial records and books of
account.
19.580 Time for making entries in records.
19.581 Details of daily records.
19.582 Conversion from metric to U.S.
units.
Production Records
19.584 Materials for the production of
distilled spirits.
19.585 Production and withdrawal records.
19.586 Byproduct spirits production
records.
Storage Records
19.590 Storage operations.
19.591 Package summary records.
19.592 Tank record of wine and spirits of
less than 190° of proof.
19.593 Tank summary record for spirits of
190° or more of proof.
Processing Records
19.596 Processing records in general.
19.597 Manufacturing records.
19.598 Dump/batch records.
19.599 Bottling and packaging records.
19.600 Alcohol content and fill test record.
19.601 Finished products records.
19.602 Redistillation records.
19.603 Liquor bottle records.
19.604 Rebottling, relabeling, and reclosing
records.
Denaturation and Article Manufacture
Records
19.606 Denaturation records.
19.607 Article manufacture records.
Tax Records
19.611 Records of tax determination in
general.
19.612 Summary records of tax
determinations.
19.613 Average effective tax rate records.
19.614 Inventory reserve records.
19.615 Standard effective tax rate records.
Other Required Records
19.616 Records of samples.
19.617 Destruction records.

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19.618 Gauge records.
19.619 Package gauge records.
19.620 Transfer record—consignor’s
responsibility.
19.621 Transfer record—consignee’s
responsibility.
19.622 Daily records of wholesale liquor
dealer and taxpaid storeroom operations.
19.623 Records of inventories.
19.624 Removal of Puerto Rican and Virgin
Islands spirits and rum imported from all
other areas.
19.625 Shipping records for spirits and
specially denatured spirits withdrawn
free of tax.
19.626 Records of distilled spirits shipped
to manufacturers of nonbeverage
products.
19.627 Alternating premises record.
Filing Forms and Reports
19.631 Submission of transaction forms.
19.632 Submission of monthly reports.
19.634 Computer-generated reports and
transaction forms.
Subpart W—Production of Vinegar by the
Vaporizing Process
Vinegar Plants in General
19.641 Application.
Qualification, Construction, and Equipment
Requirements for Vinegar Plants
19.643 Qualification requirements.
19.644 Changes after original qualification.
19.645 Notice of permanent discontinuance
of business.
19.646 Construction and equipment
requirements.
Rules for Operating Vinegar Plants
19.647 Authorized operations.
19.648 Conduct of operations.
19.649 Restrictions on alcohol content.
Required Records for Vinegar Plants
19.650 Daily records.
Liability for Distilled Spirits Tax
19.651 Liability for distilled spirits tax.
Subpart X—Distilled Spirits for Fuel Use
19.661 Scope.
General
19.662 Definitions.
19.663 Application of other provisions.
19.665 Alternate methods or procedures.
19.666 Application for and use of an
alternate method or procedure.
19.667 Emergency variations from
requirements.
Liability for Taxes
19.669 Distilled spirits taxes.
19.670 Dealer registration and
recordkeeping.
Obtaining a Permit
19.672 Types of plants.
19.673 Small plant permit applications.
19.674 TTB action on small plant
applications.
19.675 Medium plant permit applications.
19.676 Large plant permit applications.
19.677 Large plant applications—
organizational documents.

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19.678
19.679
19.680

Federal Register / Vol. 76, No. 32 / Wednesday, February 16, 2011 / Rules and Regulations
Criteria for issuance of permit.
Duration of permit.
Registration of stills.

Changes to Permit Information
19.683 Changes affecting permit
applications.
19.684 Automatic termination of permits.
19.685 Change in type of alcohol fuel plant.
19.686 Change in name of proprietor.
19.687 Change in officers, directors,
members, managers, or principal
persons.
19.688 Change in proprietorship.
19.689 Continuing partnerships.
19.690 Change in location.
19.691 Change in address without change
in location or area.
Alternating Proprietorship
19.692 Qualifying for alternating
proprietorship.
19.693 Operating requirements for
alternating proprietorships.

General bond requirements.
Amount of bond.

Requirements for Construction, Equipment,
and Security
Construction and equipment.
Security.

TTB Rights and Authorities
Supervision of operations.

Authority: 19 U.S.C. 81c, 1311; 26 U.S.C.
5001, 5002, 5004–5006, 5008, 5010, 5041,
5061, 5062, 5066, 5081, 5101, 5111–5114,
5121, 5122–5124, 5142, 5143, 5146, 5148,
5171–5173, 5175, 5176, 5178–5181, 5201–
5204, 5206, 5207, 5211–5215, 5221–5223,
5231, 5232, 5235, 5236, 5241–5243, 5271,
5273, 5301, 5311–5313, 5362, 5370, 5373,
5501–5505, 5551–5555, 5559, 5561, 5562,
5601, 5612, 5682, 6001, 6065, 6109, 6302,
6311, 6676, 6806, 7011, 7510, 7805; 31 U.S.C.
9301, 9303, 9304, 9306.

Accounting for Spirits

§ 19.0

19.709
19.710

This part concerns the operation of
distilled spirits plants in the United
States. Topics covered in this part
include: Permits and registration
procedures; bond requirements;
payment of taxes; filing of claims;
production, storage, and processing
operations; and maintenance of records.

Gauging.
Inventory of spirits.

Recordkeeping
19.714 General requirements for records.
19.715 Format of records.
19.716 Maintenance and retention of
records.
19.717 Time for making entries in records.
19.718 Required records.
19.719 Spirits made unfit for beverage use
in the production process.
Reports
19.720

Reports.

Redistillation

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Materials for Making Spirits Unfit for
Beverage Use
19.746 Authorized materials.
19.747 Other materials.

Subpart Y—Paperwork Reduction Act
19.761 OMB control numbers assigned
under the Paperwork Reduction Act.

Bonds

19.706

Receipt of Spirits From Customs Custody
19.742 Authorized transfers from customs
custody.

Marking Requirements
19.752 Marks.

19.695 Notice of permanent
discontinuance.
19.697 Permit suspension or revocation.

19.703
19.704

Transfer of Spirits to and From Distilled
Spirits Plants
19.739 Authorized transfers to or from
distilled spirits plants.

Rules for Taking Samples
19.749 Samples.

Discontinuance of Business and Permit
Suspension or Revocation

19.699
19.700

Transfer of Spirits Between Alcohol Fuel
Plants
19.733 Authorized transfers between
alcohol fuel plants.
19.734 Consignor for in-bond shipments.
19.735 Reconsignment while in transit.
19.736 Consignee for in-bond shipments.

19.722 General rules for redistillation of
spirits or fuel alcohol.
19.723 Effect of redistillation on plant size
and bond amount.
19.724 Records of redistillation.
Rules for Use, Withdrawal, and Transfer of
Spirits
19.726 Prohibited uses, transfers, and
withdrawals.
19.727 Use on premises.
19.728 Withdrawal of spirits.
19.729 Withdrawal of fuel alcohol.

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Scope.

Subpart A—General Provisions
§ 19.1

Definitions.

As used in this part, the following
terms shall have the meanings indicated
unless either the context in which they
are used requires a different meaning, or
a different definition is prescribed for a
particular subpart, section, or portion of
this part:
Accurate mass flow meter. A mass
flow meter for making volume
determinations of bulk distilled spirits.
A mass flow meter used for tax
determination of bulk spirits must be
certified by the manufacturer of the
meter or other qualified person as
accurate within a tolerance of plus or
minus 0.1 percent. A mass flow meter

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used for all other required volume
determinations of bulk spirits must be
certified by the manufacturer of the
meter or other qualified person as
accurate within a tolerance of plus or
minus 0.5 percent.
Administrator. The Administrator of
the Alcohol and Tobacco Tax and Trade
Bureau, the Department of the Treasury,
Washington, D.C., or a delegate or
designee of the Administrator.
Alcoholic flavoring materials. Any
nonbeverage product on which
drawback has been or will be claimed
under 26 U.S.C. 5111–5114, and any
flavor imported free of tax which is
unfit for beverage purposes. This term
includes eligible flavors but does not
include flavorings or flavoring extracts
manufactured on the bonded premises
of a distilled spirits plant as an
intermediate product.
Application for registration. The
application for registration of a distilled
spirits plant that is required by 26
U.S.C. 5171(c).
Appropriate TTB officer. An officer or
employee of the Alcohol and Tobacco
Tax and Trade Bureau (TTB) authorized
to perform any functions relating to the
administration or enforcement of this
part by TTB Order 1135.19, Delegation
of the Administrator’s Authorities in 27
CFR Part 19, Distilled Spirits Plants.
Article. A product containing
denatured spirits, which was
manufactured under this part or part 20
of this chapter.
Bank. Any commercial bank.
Banking day. Any day that a bank is
open to the public to carry on
substantially all of its banking
functions.
Basic permit. The document that
authorizes a person to engage in a
designated business or activity under
the Federal Alcohol Administration Act.
Bond. A bond is a formal guarantee
for payment of monies due to TTB,
including taxes imposed by 26 U.S.C.
chapter 51, and any related fines,
penalties or interest that the proprietor
of a distilled spirits plant may incur, up
to an amount specified by the bond (the
bond ‘‘penal sum’’).
Bonded premises. The premises of a
distilled spirits plant, or part thereof, as
described in the application for
registration, on which the conduct of
distilled spirits operations defined in 26
U.S.C. 5002 is authorized.
Bottler. A proprietor of a distilled
spirits plant qualified under this part as
a processor that bottles distilled spirits.
Bulk container. Any container
approved by TTB having a capacity in
excess of one wine gallon.
Bulk conveyance. A tank car, tank
truck, tank ship, tank barge, or a

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Federal Register / Vol. 76, No. 32 / Wednesday, February 16, 2011 / Rules and Regulations
compartment of any such conveyance,
or any other container approved by the
Administrator for the conveyance of
comparable quantities of spirits,
including denatured spirits and wines.
Bulk distilled spirits. Distilled spirits
in a container having a capacity in
excess of one wine gallon.
Business day. Any day, other than a
Saturday, a Sunday, or a legal holiday
(which includes any holiday in the
District of Columbia and any statewide
holiday in the particular State in which
the claim, report, or return, as the case
may be, is required to be filed, or the act
is required to be performed).
Calendar quarter and quarterly. These
terms refer to the 3-month periods
ending on March 31, June 30, September
30, or December 31.
Carrier. Any person, company,
corporation, or organization, including a
proprietor, owner, consignor, consignee,
or bailee, who transports distilled
spirits, denatured spirits, or wine in any
manner for itself or others.
CFR. The Code of Federal
Regulations.
Commercial bank. A bank, whether or
not a member of the Federal Reserve
system, which has access to the Federal
Reserve Communications System or
Fedwire (a communications network
that allows Federal Reserve system
member banks to effect a transfer of
funds for their customers (or other
commercial banks) to the Treasury
Account at the Federal Reserve Bank of
New York).
Container. A receptacle, vessel, or
form of bottle, can, package, tank or
pipeline (where specifically included)
used or capable of being used to
contain, store, transfer, convey, remove,
or withdraw spirits and denatured
spirits.
Denaturant or denaturing material.
Any material authorized by part 21 of
this chapter for addition to spirits in the
production of denatured spirits.
Denatured spirits. Spirits to which
denaturants have been added as
provided in part 21 of this chapter.
Director of the service center. A
director of an Internal Revenue Service
Center.
Distilled spirits operations. Any
authorized distilling, warehousing, or
processing operation conducted on the
bonded premises of a plant qualified
under this part.
Distilled spirits plant. An
establishment which is qualified under
this part to conduct distilled spirits
operations.
Distiller. Any person who:
(1) Produces distilled spirits from any
source or substance;

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(2) Brews or makes mash, wort, or
wash fit for distillation or for the
production of distilled spirits (other
than making or using of mash, wort, or
wash in the authorized production of
wine or beer, or in the production of
vinegar by fermentation);
(3) By any process separates alcoholic
spirits from any fermented substance; or
(4) Making or keeping mash, wort, or
wash, has a still in his possession or
use.
Distilling material. Any fermented or
other alcoholic substance capable of, or
intended for use in, the original
distillation or other original processing
of spirits.
District director. A district director of
the Internal Revenue Service.
Effective tax rate. The net tax rate,
after reduction for any credit allowable
under 26 U.S.C. 5010 for wine and
flavor content, at which the tax imposed
on distilled spirits by 26 U.S.C. 5001 or
7652 is paid or determined.
Electronic fund transfer or EFT. Any
transfer of funds effected by the
proprietor’s commercial bank, either
directly or through a correspondent
banking relationship, via the Federal
Reserve Communications System or
Fedwire to the Treasury Account at the
Federal Reserve Bank of New York.
Eligible flavor. A flavor which:
(1) Is of a type that is eligible for
drawback of tax under 26 U.S.C. 5114;
(2) Was not manufactured on the
premises of a distilled spirits plant; and
(3) Was not subjected to distillation
on distilled spirits plant premises such
that the flavor does not remain in the
finished product.
Eligible wine. Wine on which tax
would be imposed by paragraph (1), (2),
or (3) of 26 U.S.C. 5041(b) but for its
removal to distilled spirits plant
premises and which has not been
subject to distillation at a distilled
spirits plant after receipt in bond.
Export or exportation. A separation of
goods from the mass of goods belonging
to the United States with the intention
of uniting them with goods belonging to
a foreign country or any possession of
the United States, including the
Commonwealth of Puerto Rico, the U.S.
Virgin Islands, American Samoa, and
Guam.
Fermenting material. Any material
that will be subject to a process of
fermentation in order to produce
distilling material.
Fiduciary. A guardian, trustee,
executor, administrator, receiver,
conservator, or any person acting in any
fiduciary capacity for any person.
Fiscal year. The period October 1st of
one calendar year through September
30th of the following calendar year.

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Gallon or wine gallon. The liquid
measure equivalent to the volume of 231
cubic inches.
General premises. Any business
office, service facility, or other part of
the premises described in the notice of
registration other than bonded premises.
In bond. When used to describe
spirits, denatured spirits, articles, or
wine, this term refers to spirits,
denatured spirits, articles, or wine held
under bond to secure the payment of the
taxes imposed by 26 U.S.C. chapter 51,
and on which those taxes have not been
determined. The term also refers to such
spirits, denatured spirits, articles, or
wine on the bonded premises of a
distilled spirits plant, and such spirits,
denatured spirits, or wines that are in
transit between bonded premises
(including, in the case of wine, bonded
wine cellar premises). In addition, the
term refers to spirits in transit from
customs custody to bonded premises,
and spirits withdrawn without payment
of tax under 26 U.S.C. 5214, and with
respect to which relief from liability has
not occurred under 26 U.S.C. 5005(e)(2).
Industrial use. When used with
reference to spirits, the meaning given
to the term in § 19.472.
Intermediate product. Any product
manufactured according to an approved
formula under part 5 of this chapter,
intended not for sale as such but for use
in the manufacture of a distilled spirits
product.
IRC. The Internal Revenue Code of
1986, as amended.
Kind. Except as provided in § 19.597,
when used with reference to spirits, this
term means class and type as prescribed
in part 5 of this chapter. When used
with reference to wines, this term means
the class and type of wine as prescribed
in part 4 of this chapter.
Letterhead application. A letter on a
company’s letterhead or other piece of
paper that clearly shows the company
name from a company representative
with signature authority. A letterhead
application is subject to TTB approval
prior to any change requested in the
letter.
Letterhead notice. A letter on a
company’s letterhead or other piece of
paper that clearly shows the company
name from a company representative
with signature authority. A letterhead
notice does not require approval by TTB
prior to the change.
Liquor bottle. A bottle made of glass
or earthenware, or of other suitable
material approved by the Food and Drug
Administration, which has been
designed or is intended for use as a
container for distilled spirits for sale for
beverage purposes and which has been

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determined by the Administrator to
adequately protect the revenue.
Liter. A metric unit of capacity equal
to 1,000 cubic centimeters or 1,000
milliliters (ml) of alcoholic beverage,
and equivalent to 33.814 fluid ounces.
Lot identification number. The
package identification number
described in 27 CFR 19.485.
Mash, wort, wash. Any fermented
material capable of, or intended for, use
as a distilling material.
National Revenue Center: TTB’s
National Revenue Center, in Cincinnati,
Ohio.
Nonindustrial use. When used with
reference to spirits, the meaning given
to the term in § 19.472.
Operating permit. The document
issued pursuant to 26 U.S.C. 5171(d),
that authorizes a person to engage in the
business or operation described in the
document.
Package. A cask or barrel or similar
wooden container, or a drum or similar
metal container.
Package identification number. The
lot identification number described in
27 CFR 19.595.
Person. An individual, trust, estate,
partnership, association, company,
corporation, limited liability company,
limited liability partnership, or other
entity recognized by law as a person.
Plant or distilled spirits plant. An
establishment qualified under this part
for distilling, warehousing, processing,
or any combination thereof.
Plant number. The number assigned
to a distilled spirits plant by TTB.
Processor. Except as otherwise
provided in 26 U.S.C. 5002(a)(6), any
person qualified under this part who
manufactures, mixes, bottles, or
otherwise processes distilled spirits or
denatured spirits or who manufactures
any article.
Proof. The ethyl alcohol content of a
liquid at 60 degrees Fahrenheit, stated
as twice the percentage of ethyl alcohol
by volume.
Proof gallon. A gallon of liquid at 60
degrees Fahrenheit which contains 50
percent by volume of ethyl alcohol
having a specific gravity of 0.7939 at 60
degrees Fahrenheit referred to water at
60 degrees Fahrenheit as unity, or the
alcoholic equivalent thereof.
Proof of distillation. The composite
proof of the spirits when the production
gauge is made, or, if the spirits are
reduced in proof prior to the production
gauge, the proof of the spirits prior to
that reduction, unless the spirits are
subsequently redistilled at a higher
proof than the proof prior to reduction.
Proprietor. The person qualified
under this part to operate a distilled
spirits plant.

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Reconditioning. The dumping of
distilled spirits products in bond after
their bottling or packaging, for filtration,
clarification, stabilization,
reformulation, or other purposes, other
than destruction, denaturation,
redistillation, or rebottling.
Recovered article. An article
containing specially denatured spirits
salvaged without all of its original
ingredients, or an article containing
completely denatured alcohol salvaged
without all of the denaturants for
completely denatured alcohol, as
provided in part 20 of this chapter.
Season. The period from January 1st
through June 30th (spring season) or the
period from July 1st through December
31st (fall season).
Secretary. The Secretary of the
Treasury or his delegate or designee.
Service center. An Internal Revenue
Service Center in any of the Internal
Revenue regions.
Spirits or distilled spirits. The
substance known as ethyl alcohol,
ethanol, or spirits of wine in any form
(including all dilutions and mixtures
thereof, from whatever source or by
whatever process produced) but not
denatured spirits unless specifically
stated. The term does not include
mixtures of distilled spirits and wine,
bottled at 48° proof or less, if the
mixture contains more than 50 percent
wine on a proof gallon basis.
Spirits residues. Residues, containing
distilled spirits, of a manufacturing
process related to the production of an
article under part 20 of this chapter.
Tax-determined or determined. When
used with reference to any distilled
spirits to be withdrawn from bond on
determination of tax, that the taxable
quantity of spirits has been established.
Taxpaid. When used with reference to
distilled spirits, all applicable taxes
imposed by law on those spirits have
been determined or paid as provided by
law.
This chapter. Title 27 of the Code of
Federal Regulations, Chapter I, Alcohol
and Tobacco Tax and Trade Bureau,
Department of the Treasury (27 CFR
chapter I).
Transfer in bond. The removal of
spirits, denatured spirits and wines
from one bonded premises to another
bonded premises.
Treasury Account. The General
Account of the Department of the
Treasury at the Federal Reserve Bank of
New York.
TTB. The Alcohol and Tobacco Tax
and Trade Bureau of the Department of
the Treasury.
TTB bond. The internal revenue bond
as prescribed in 26 U.S.C. chapter 51.

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TTB officer. An officer or employee of
TTB authorized to perform any function
relating to the administration or
enforcement of the provisions of this
part.
Unfinished spirits. Spirits in the
production system prior to production
gauge.
U.S.C. The United States Code.
Warehouseman. A proprietor of a
distilled spirits plant qualified under
this part to store bulk distilled spirits.
We. TTB and TTB officers.
Wine gallon. The liquid measure
equivalent to the volume of 231 cubic
inches.
Wine spirits. Spirits authorized for
use in wine production by 26 U.S.C.
5373.
§ 19.2 Territorial extent of these
regulations.

This part applies to all States of the
United States and the District of
Columbia.
§ 19.3

Related regulations.

Other regulations relating to distilled
spirits and distilled spirits plants are
listed below:
27 CFR part 1—Basic Permit Requirements
Under the Federal Alcohol
Administration Act, Nonindustrial Use
of Distilled Spirits and Wine, Bulk Sales
and Bottling of Distilled Spirits.
27 CFR part 4—Labeling and Advertising of
Wine.
27 CFR part 5—Labeling and Advertising of
Distilled Spirits.
27 CFR part 16—Alcoholic Beverage Health
Warning Statement.
27 CFR part 17—Drawback on Taxpaid
Distilled Spirits Used in Manufacturing
Nonbeverage Products.
27 CFR part 20—Distribution and Use of
Denatured Alcohol and Rum.
27 CFR part 21—Formulas for Denatured
Alcohol and Rum.
27 CFR part 22—Distribution and Use of TaxFree Alcohol.
27 CFR part 24—Wine.
27 CFR part 25—Beer.
27 CFR part 26—Liquors and Articles from
Puerto Rico and the Virgin Islands.
27 CFR part 27—Importation of Distilled
Spirits, Wines, and Beer.
27 CFR part 28—Exportation of Alcohol.
27 CFR part 29—Stills and Miscellaneous
Regulations.
27 CFR part 30—Gauging Manual.
27 CFR part 31—Alcohol Beverage Dealers.
27 CFR part 71—Rules of Practice in Permit
Proceedings.
31 CFR part 225—Acceptance of Bonds
Secured by Government Obligations in
Lieu of Bonds with Sureties.
§ 19.4 Recovery and reuse of denatured
spirits in manufacturing processes.

Certain activities involving distilled
spirits are not covered by this part.
Instead, manufacturers who engage in
any of the activities listed below are

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required to comply with the regulations
in part 20 of this chapter relating to the
use and recovery of spirits or denatured
spirits. Those activities are:
(a) Use of denatured spirits, or articles
or substances containing denatured
spirits, in a process wherein any part or
all of the spirits, including denatured
spirits, are recovered;
(b) Use of denatured spirits in the
production of chemicals which do not
contain spirits but which are used on
the permit premises in the manufacture
of other chemicals resulting in spirits as
a byproduct; or
(c) Use of chemicals or substances
which do not contain spirits or
denatured spirits (but which were
manufactured with specially denatured
spirits) in a process resulting in spirits
as a byproduct.
(26 U.S.C. 5273)

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§ 19.5 Manufacturing products unfit for
beverage use.

(a) General. Except as provided in
paragraph (b) of this section,
apothecaries, pharmacists, or
manufacturers who manufacture or
compound any of the following
products using tax paid or tax
determined distilled spirits are not
required to register and qualify as a
distilled spirits plant (processor):
(1) Medicines, medicinal
preparations, food products, flavors,
flavoring extracts, and perfume,
conforming to the standards for
approval of nonbeverage drawback
products found in §§ 17.131 through
17.137 of this chapter, whether or not
drawback is actually claimed on those
products. Except as provided in
paragraph (c) of this section, a formula
does not need to be submitted if
drawback is not desired;
(2) Patented and proprietary
medicines that are unfit for use for
beverage purposes;
(3) Toilet, medicinal, and antiseptic
preparations and solutions that are unfit
for use for beverage purposes;
(4) Laboratory reagents, stains, and
dyes that are unfit for use for beverage
purposes; and
(5) Flavoring extracts, syrups, and
concentrates that are unfit for use for
beverage purposes.
(b) Exception for beverage products.
Products identified in part 17 of this
chapter as being fit for beverage use are
alcoholic beverages. Bitters, patent
medicines, and similar alcoholic
preparations that are fit for beverage
purposes, although held out as having
certain medicinal properties, are also
alcoholic beverages. These products are
subject to the provisions of this part and

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must be manufactured on the bonded
premises of a distilled spirits plant.
(c) Submission of formulas and
samples. When requested by the
appropriate TTB officer or when the
manufacturer wishes to ascertain
whether a product is unfit for beverage
use, the manufacturer will submit the
formula and a sample of the product to
the appropriate TTB officer for
examination. TTB will determine
whether the product is unfit for
beverage use and whether manufacture
of the product is exempt from
qualification requirements.
(d) Change of formula. If TTB finds
that a product manufactured under
paragraph (a) of this section is being
used for beverage purposes, or for
mixing with beverage spirits other than
by a processor, TTB will notify the
manufacturer to stop manufacturing the
product until the formula is changed to
make the product unfit for beverage use
and the change is approved by the
appropriate TTB officer. However, the
provisions of this paragraph will not
prohibit products which are unfit for
beverage use from use in small
quantities for flavoring drinks at the
time of serving for immediate
consumption.
(26 U.S.C. 5002, 5171)

Subpart B—Administrative and
Miscellaneous Provisions
§ 19.11

Right of entry and examination.

A TTB officer may enter any distilled
spirits plant, any other premises where
distilled spirits operations are carried
on, or any structure or place used in
connection with distilled spirits
operations, at any time of day or night.
A TTB officer may examine materials,
equipment, and facilities, and make any
gauges and inventories. Whenever a
TTB officer states his or her name and
office and demands admittance but is
not admitted into the premises or place,
the TTB officer is authorized to use all
necessary force to gain entry.
(26 U.S.C. 5203)
§ 19.12 Furnishing facilities and
assistance.

The proprietor is required to provide
TTB officers with the necessary
facilities and assistance in order to
gauge spirits in any container, or to
examine any apparatus, equipment,
containers, or materials, at the distilled
spirits plant. Also, when requested by a
TTB officer, the proprietor must:
(a) Open any doors and open for
examination any containers on the plant
premises; and
(b) Provide the exact locations
(including the number of containers at

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each location) of all packages and
similar portable approved containers
within a given lot and the locations (that
is, buildings, rooms, or areas) where
spirits in cases are stored.
(26 U.S.C. 5202, 5203)
§ 19.13 Assignment of officers and
supervision of operations.

(a) General. TTB may assign TTB
officers to a distilled spirits plant and
utilize controls, such as Government
locks and seals, if TTB decides that
those measures are necessary to
effectively supervise the operations. If
TTB decides that such supervision is
necessary:
(1) The proprietor must obtain
approval of the plant’s hours of
operations from the appropriate TTB
officer;
(2) TTB may require the proprietor to
submit a schedule of operations to a
TTB officer; and
(3) TTB may require the proprietor to
delay any distilled spirits operation
until the proprietor can conduct it in the
presence of a TTB officer.
(b) Notification of supervision. If TTB
determines that supervision of plant
operations is necessary, TTB will notify
the proprietor of the extent to which
TTB intends to supervise those
operations. If TTB determines later that
TTB supervision is no longer necessary,
the appropriate TTB officer will notify
the proprietor of that fact.
(26 U.S.C. 5201, 5202, 5553)
§ 19.14 Delegation of the Administrator’s
authorities to the appropriate TTB officer.

Most of the regulatory authorities of
the Administrator contained in this part
are delegated to appropriate TTB
officers. These TTB officers are
specified in TTB Order 1135.19,
Delegation of the Administrator’s
Authorities in 27 CFR Part 19, Distilled
Spirits Plants. Interested persons may
obtain a copy of this order by accessing
the TTB Web site (http://www.ttb.gov) or
by mailing a request to the Alcohol and
Tobacco Tax and Trade Bureau,
National Revenue Center, 550 Main
Street, Room 1516, Cincinnati, OH
45202.
§ 19.15

Forms prescribed.

(a) TTB prescribes and makes
available all forms required by this part.
Persons completing forms must furnish
all of the information required by each
form, as indicated by the headings and
instructions on the form or as required
by these regulations. Each form must be
filed in accordance with this part and
the instructions for the form.
(b) Persons may obtain TTB forms by
accessing the TTB Web site (http://

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If a proprietor wishes to modify a
form prescribed by these regulations,
the proprietor must submit an
application for approval of an alternate
method or procedure (see §§ 19.26 and
19.27) to the appropriate TTB officer.
The proprietor may not use a modified
form until TTB approves the
application. The application to modify a
form must be accompanied by:
(a) A copy of each proposed form with
typical entries; and
(b) A statement explaining the need to
use a modified form.

can require that the proprietor
discontinue using the facility. Further,
TTB can require the transfer of the
spirits stored in the facility to another
storage facility. The transfer will take
place at such time and under such
supervision as TTB may require, and
will be at the expense of the owner or
warehouseman of the spirits. If the
owner or warehouseman fails to transfer
the spirits within the prescribed time or
to pay the expense of the transfer, as
ascertained and determined by the
appropriate TTB officer, the spirits may
be seized and sold. TTB will first apply
the proceeds of such sale to the payment
of the taxes due on the spirits and then
to the cost and expense of the sale and
removal, and the remaining balance, if
any, will be paid over to the owner or
warehouseman.

(26 U.S.C. 5207)

(26 U.S.C. 5236)

§ 19.17

§ 19.20 Installation of meters, tanks, and
other apparatus.

www.ttb.gov) or by mailing a request to
the TTB National Revenue Center, 550
Main Street, Suite 8002, Cincinnati,
Ohio 45202.
(26 U.S.C. 5207)
§ 19.16

Modified forms.

Detention of containers.

(a) General. A TTB officer may detain
any container containing, or supposed
to contain, spirits when the appropriate
TTB officer believes that the required
tax on those spirits has not been paid or
determined or that the removal of the
container is in violation of law or the
provisions of this part. The appropriate
TTB officer will hold the container at a
safe place until it is determined whether
the detained property is subject to
forfeiture.
(b) Limitation. A detention under
paragraph (a) of this section may not
exceed 72 hours without process of law
or intervention of the appropriate TTB
officer. However, the detained container
may be kept on the premises beyond the
72-hour period without process of law
or intervention if the person possessing
the container immediately before its
detention executes a waiver of this 72hour limitation on detention of the
container.
(26 U.S.C. 5311)
§ 19.18

Samples for the United States.

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TTB officers are authorized to take
samples of spirits, denatured spirits,
articles, wines, or other materials from
a distilled spirits plant for analysis,
testing, or to determine whether the
product complies with the law and
regulations. When TTB removes a
sample from a plant, TTB will give the
proprietor a receipt for the sample.
(26 U.S.C. 5201, 5203, 5214, 5362)
§ 19.19 Discontinuance of storage
facilities.

If TTB determines that a proprietor’s
bonded storage facility for spirits is
unsafe or unfit for use, or causes
excessive waste or loss of spirits, TTB

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The appropriate TTB officer may
require the proprietor to install meters,
tanks, pipes, or any other apparatus at
the proprietor’s plant if that officer
decides that the equipment is necessary
for the protection of the revenue. If the
proprietor refuses or fails to install any
such apparatus when instructed to do
so, the proprietor will not be permitted
to conduct business as a distilled spirits
plant.
(26 U.S.C. 5552)

Alternate Methods or Procedures and
Experimental Operations
§ 19.26

Alternate methods or procedures.

(a) General. The appropriate TTB
officer may approve the use of an
alternate method or procedure that
varies from the regulatory requirements
in this part if the proprietor shows good
cause for its use and the alternate
method or procedure:
(1) Is not contrary to law;
(2) Will not have the effect of waiving
an existing regulatory requirement;
(3) Is consistent with the purpose and
effect of the method or procedure
prescribed in this part;
(4) Provides equal security to the
revenue; and
(5) Will not cause an increase in cost
to the Government and will not hinder
TTB’s administration of this part.
(b) Exceptions. TTB will not authorize
the use of an alternate method or
procedure relating to the giving of any
bond, or to the assessment, payment, or
collection of tax.
(c) Prior approvals. Alternate methods
or procedures in effect prior to April 18,
2011, which are not contrary to the
regulations in this part, are preserved

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until renewed unless revoked by
operation of law due to the enactment
of law that is contrary to the alternate
method or procedure.
(26 U.S.C. 5552, 5556)
§ 19.27 Application for and use of alternate
method or procedure.

(a) Application. If a proprietor wishes
to use an alternate method or procedure
as described in § 19.26, the proprietor
must submit a written letterhead
application to the appropriate TTB
officer for approval. The application
must identify the method or procedure
specified in the regulation, must
describe the proposed alternate method
or procedure in detail, and must explain
why the alternate method or procedure
is needed.
(b) Approval and use. The proprietor
may not use an alternate method or
procedure until the appropriate TTB
officer has in writing approved the
proprietor’s application. During the
period that the proprietor is authorized
to use the alternate method or
procedure, the proprietor must comply
with any conditions imposed on its use
by TTB. TTB may withdraw the
approval to use the alternate method or
procedure if TTB finds that the revenue
is jeopardized, that the alternate method
or procedure hinders effective
administration of the laws or
regulations, that the proprietor has
violated any of the conditions imposed
by TTB, or that the circumstances that
gave rise to the need for the alternate
method or procedure no longer exist.
(c) Retention. The proprietor must
retain each alternate method or
procedure approval as part of the
proprietor’s records and must make the
approval available for examination by
TTB officers upon request.
(26 U.S.C. 5552, 5556)
§ 19.28 Emergency variations from
requirements.

(a) Application. A proprietor may
request emergency approval of the use
of a method or procedure relating to
construction, equipment, and methods
of operation that represents a variance
from the requirements of this part.
When a proprietor wishes to use an
emergency method or procedure, the
proprietor must submit a written
letterhead application to the appropriate
TTB officer for approval; the proprietor
may send the application via regular
mail, email, or facsimile transmission.
The application must describe the
proposed emergency method or
procedure and the emergency situation
it will address. For purposes of this
section, an emergency is considered to
exist only if it results from a weather or

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other natural event or from an accident
or other event not involving an
intentional act on the part of the
proprietor.
(b) Approval. The appropriate TTB
officer may approve in writing the use
of an emergency method or procedure if
the proprietor demonstrates that an
emergency exists and the proposed
method or procedure:
(1) Is not contrary to law;
(2) Is necessary to address the
emergency situation;
(3) Will afford the same security and
protection to the revenue as intended by
the regulations; and
(4) Will not hinder the effective
administration of this subpart.
(c) Terms of emergency method or
procedure approval and use. (1) The
proprietor may not use an emergency
method or procedure until the
application has been approved by TTB
except when the emergency method or
procedure requires immediate
implementation to correct a situation
that threatens life or property. In a
situation involving a threat to life or
property, the proprietor may implement
the corrective action while concurrently
notifying the appropriate TTB officer by
telephone of the action and filing the
required written application. Use of the
emergency method or procedure must
conform to any conditions specified in
the approval.
(2) The proprietor must retain the
emergency method or procedure
approval as part of the proprietor’s
records and must make the approval
available for examination by TTB
officers upon request.
(3) The emergency method or
procedure will automatically terminate
when the situation that created the
emergency no longer exists. TTB may
withdraw the approval to use the
emergency method or procedure if TTB
finds that the revenue is jeopardized,
that the emergency method or procedure
hinders effective administration of the
laws or regulations, or that the
proprietor has failed to follow any of the
conditions specified in the approval.
When use of the emergency method or
procedure terminates, the proprietor
must revert to full compliance with all
applicable regulations.

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(26 U.S.C. 5178, 5556)
§ 19.29 Exemptions for national defense
and disasters.

Whenever TTB finds it is necessary to
meet the requirements of national
defense or necessary or desirable by
reason of disaster, TTB may temporarily
exempt the proprietor from any
provisions of the internal revenue laws
and the provisions of this part relating

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to distilled spirits, except those
requiring the payment of tax.
(26 U.S.C. 5561, 5562)
§ 19.31

Pilot operations.

Except for the filing of any bond or
the payment of any tax provided for in
26 U.S.C. chapter 51, TTB may waive
any regulatory provision in this part for
temporary pilot or experimental
operations for the purpose of facilitating
the development and testing of
improved methods of governmental
supervision (necessary for the
protection of the revenue) over plants.
For this purpose, the appropriate TTB
officer may, with the approval of the
proprietor thereof, designate any plant
for such operations. Any waiver granted
under this section must be in writing
and signed by the appropriate TTB
officer. The waiver will identify the
provisions of law and/or regulations
waived and the period of time during
which the waiver will be effective. The
appropriate TTB officer may terminate
the waiver if he or she determines that
the waiver jeopardizes the revenue.
(26 U.S.C. 5554)
§ 19.32
plants.

Experimental distilled spirits

(a) General. The appropriate TTB
officer may authorize the establishment
and operation of experimental plants for
specific and limited periods of time
solely for experimentation in, or
development of:
(1) Sources of materials from which
spirits may be produced;
(2) Processes by which spirits may be
produced or refined; or
(3) Industrial uses of spirits.
(b) Waiver. The appropriate TTB
officer may waive any provision of 26
U.S.C. chapter 51 (other than 26 U.S.C.
5312) and of this part (other than
§ 19.33) to the extent necessary to
effectuate the purposes of 26 U.S.C.
5312(b) as outlined in paragraph (a) of
this section. However, TTB will not
waive the payment of any tax on spirits
removed from an experimental plant.
(26 U.S.C. 5312)
§ 19.33 Application to establish
experimental plants.

(a) Application requirements. Any
person who wishes to establish an
experimental plant for the purposes
specified in § 19.32 must submit a
written application to the appropriate
TTB officer and obtain approval of the
proposed experimental plant. The
application must:
(1) State the nature, extent, and
purpose of the operations to be
conducted;

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(2) Describe the operations and
equipment;
(3) Describe the location of the plant
(including the proximity to other
premises or operations subject to the
provisions of 26 U.S.C. chapter 51); and
(4) Describe the security measures to
be provided.
(b) Bond. The applicant must file a
bond with the application in such form
and penal sum as required by the
appropriate TTB officer.
(c) Approval of application. Before
approving the application, the
appropriate TTB officer may require that
the applicant submit additional
information if necessary. TTB will not
approve the application and permit
operations until the plant conforms to
the specifications stated in the
application and the applicant complies
with provisions of 26 U.S.C. chapter 51
and with any provisions in this part that
are not specifically waived.
(26 U.S.C. 5312)
§ 19.34 Experimental or research
operations by scientific institutions and
colleges of learning.

(a) General. The appropriate TTB
officer may authorize any scientific
university, college of learning, or
institution of scientific research to
produce, receive, blend, treat, test, and
store spirits, without payment of tax, for
experimental or research use but not for
consumption (other than in organoleptic
tests) or sale, in quantities as may be
reasonably necessary for those purposes.
(b) Waiver. For purposes of this
section, the appropriate TTB officer may
waive any provision of 26 U.S.C.
chapter 51 (other than 26 U.S.C. 5312)
or this part (other than this section and
§ 19.35) to the extent necessary to effect
the purposes of 26 U.S.C. 5312(a).
However, TTB will not waive the
payment of any tax on distilled spirits
removed from any university, college, or
institution.
(26 U.S.C. 5312)
§ 19.35 Application by scientific
institutions and colleges of learning for
experimental or research operations.

(a) Application requirements. A
university, college, or scientific
institution that wants to conduct any of
the experimental or research operations
mentioned in § 19.34, must submit a
written application to the appropriate
TTB officer and obtain approval for the
proposed operations. The application
may be submitted on letterhead. The
application must:
(1) State the nature, extent, and
purpose of the operations to be
conducted;

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(2) Describe the operations and
equipment;
(3) Describe the location where the
operations will be conducted (including
identification of the building or
buildings, or the portions thereof to be
used); and
(4) Describe the security measures to
be provided.
(b) Bond. The applicant must file a
bond with the application in such form
and amount as required by the
appropriate TTB officer.
(c) Approval of application. Before
approving the application, the
appropriate TTB officer may require that
the applicant submit additional
information. The applicant may not
commence operations until authorized
by the appropriate TTB officer.
(d) Records and reports. Any
university, college, or institution
authorized to conduct experimental or
research operations must maintain
records of the quantities of spirits
produced, received, and used each day
and must make these records available
for inspection by TTB officers.
Universities, colleges, or institutions
authorized to conduct experimental or
research operations are not required to
submit reports of operations to TTB
unless specifically required by the
appropriate TTB officer.
(e) Discontinuance of operations.
When operations authorized under this
section are discontinued, the university,
college, or institution must destroy all
remaining spirits and notify the
appropriate TTB officer that operations
are discontinued.
(26 U.S.C. 5312)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.36 Spirits produced in industrial
processes.

(a) General. Except as otherwise
provided in paragraph (b) of this
section, any person who produces
distilled spirits in an industrial process,
including spirits produced as a
byproduct in connection with chemical
or other processes, is considered to be
a distiller and therefore is required to
qualify such operations as a distilled
spirits plant and is subject to the
registration requirements under the
provisions of 26 U.S.C. chapter 51 and
this part.
(b) Waiver. TTB may waive
application of any provision of 26
U.S.C. chapter 51, or of this part,
involving the production of nonpotable
chemical mixtures containing spirits,
including any provision relating to
qualification (except the dealer
registration requirement) if the mixture
is produced:

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(1) For transfer to the bonded
premises of a distilled spirits plant for
completion of distilling; or
(2) As a byproduct which would
require expensive and complex
equipment for the recovery of spirits,
and the mixture:
(i) Would be destroyed on the
premises where produced; or
(ii) Would contain a minimum
quantity of spirits, taking into account
the procedure employed, would not be
subjected to further operations solely for
the purification or recovery of spirits,
and would be found by TTB to be as
nonpotable and as difficult to recover as
completely denatured alcohol.
(26 U.S.C. 5201)
§ 19.37 Application for industrial
processes waiver.

(a) Application for waiver. If the
producer of a nonpotable chemical
mixture containing spirits, as described
in § 19.36, wishes to obtain a waiver
from the provisions of 26 U.S.C. chapter
51, or of this part, the producer must
submit a written waiver application to
the appropriate TTB officer. The
application must include the following
information, as applicable:
(1) The name and address of the
producer;
(2) Chemical composition and source
of the nonpotable mixture;
(3) Approximate percentages of
chemicals and spirits in the mixture;
(4) Method of operation proposed;
(5) Bonded premises where the
mixture will be distilled; and
(6) Any other pertinent information
required by the appropriate TTB officer.
(b) Approval of waiver. The
appropriate TTB officer may approve
the waiver if it will not jeopardize the
revenue and will not hinder supervision
of the operations. Approval of the
application may be subject to such
terms and conditions, and to the
furnishing of any bond, that the
appropriate TTB officer determines is
necessary.
(26 U.S.C. 5201)
§ 19.38

Approval of required documents.

Except as otherwise provided in this
part, the appropriate TTB officer is
authorized to approve all documents,
bonds, and consents of surety required
by this part.
(26 U.S.C. 5171, 5172, 5173, and 5551)

‘‘Penalties of Perjury’’ Declaration
§ 19.45 Execution under penalties of
perjury.

(a) Declaration. When TTB requires
under this part that a document be
executed under penalties of perjury, the

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document must contain the following
declaration:
I declare under the penalties of perjury that
this [insert type of document, such as report,
or claim], including supporting documents,
has been examined by me and, to the best of
my knowledge and belief, is true, correct, and
complete.

(b) Signing. The declaration in
paragraph (a) of this section must bear
the signature and title of the proprietor
or a duly authorized representative.
(26 U.S.C. 6065)

Subpart C—Restrictions on
Production, Location, and Use of
Plants
§ 19.51 Home production of distilled
spirits prohibited.

A person may not produce distilled
spirits at home for personal use. Except
as otherwise provided by law, distilled
spirits may only be produced by a
distilled spirits plant registered with
TTB under the provisions of 26 U.S.C.
5171. All distilled spirits produced in
the United States are subject to the tax
imposed by 26 U.S.C. 5001.
(26 U.S.C. 5001, 5601, and 5602)

Rules for Location and Use of a DSP
§ 19.52

Restrictions on location of plants.

A person who intends to establish a
distilled spirits plant may not locate it
in any of the following places:
(a) In any residence, shed, yard, or
enclosure connected to a residence;
(b) On any vessel or boat;
(c) Where beer or wine is produced;
(d) Where liquors are sold at retail; or
(e) Where any other business is
conducted except as provided in
§ 19.54.
(26 U.S.C. 5178)
§ 19.53

Continuity of plant premises.

As a general rule, the premises of a
distilled spirits plant must be
continuous except for separations by
public waterways, roads, or carrier
rights-of-way. However, the appropriate
TTB officer may approve the registration
of the plant where there are separations
of the plant premises and all parts of the
plant are in the same general location if:
(a) There is no jeopardy to revenue
caused by the separation of premises;
and
(b) The separation of premises does
not create administrative problems for
TTB.
(26 U.S.C. 5178)
§ 19.54 Use of distilled spirits plant
premises.

(a) General. A person may not
conduct any business or operation on

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the premises of a distilled spirits plant
unless the business or operation is
authorized by the notice of registration
on file with TTB or authorized under
§ 19.55.
(b) Bonded premises. The proprietor
must use the bonded premises of a
distilled spirits plant exclusively for
distilled spirits operations. The
proprietor must store packaged spirits,
cases of spirits, or portable containers of
spirits in a room or building on bonded
premises. TTB may approve another
method of storage as an alternate
method or procedure. However, the
proprietor must apply for, and receive
approval for another method of storage
from the appropriate TTB officer in
accordance with § 19.27 before using
that method.
(c) General premises. General
premises are any portion of the distilled
spirits plant described in the notice of
registration other than bonded premises.
A person may not use the general
premises of a distilled spirits plant for
any operation required under the
provisions of this part to be conducted
on bonded premises.

gallons of bulk spirits and the need for
such a warehouse must be clearly
shown. TTB may consider an
application to establish a bonded
warehouse with less capacity provided
a need is clearly shown.
(b) Application. The applicant must
submit a separate written request along
with the application for registration
explaining the need for the bonded
warehouse. TTB may approve the
application for registration if:
(1) The proposed location for the
warehouse will not jeopardize the
revenue; and
(2) The applicant provides evidence
showing sufficient need for establishing
such a warehouse.
(c) Special conditions. Based on the
application and request, TTB may limit
the type of operations that may be
conducted at the bonded warehouse.
The proprietor of a warehouse approved
for a limited type of operation may not
expand or change the operation to
include any other type of operation
without application to and approval of
the appropriate TTB officer.

(26 U.S.C. 5178)

Conveyance of Spirits or Wines on
Plant Premises

§ 19.55

Other businesses.

(a) The appropriate TTB officer may
authorize the conduct of a business
other than that of a distiller,
warehouseman, or processor on the
premises of a distilled spirits plant if:
(1) The business is not prohibited by
26 U.S.C. 5601(a)(6);
(2) The business will not jeopardize
the revenue;
(3) The business will not hinder
TTB’s effective administration of this
part; and
(4) The business will not be contrary
to law.
(b) A person who wishes to conduct
another business at a distilled spirits
plant must apply for such authorization
in accordance with §§ 19.73(b) or
19.120(b) and receive approval from the
appropriate TTB officer before operating
the other business. The approval will
specify whether the other business may
be conducted on the bonded premises or
on the general premises.
(26 U.S.C. 5178)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.56 Bonded warehouses not on
premises qualified for production of spirits.

(a) Criteria for establishment. As a
general rule, if a person intends to
establish a bonded warehouse, other
than one established on the bonded
premises of a distilled spirits plant
qualified for the production of spirits or
contiguous to such premises, the
proposed warehouse must have a
minimum capacity of 250,000 wine

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(26 U.S.C. 5171 and 5178)

§ 19.58 Taxpaid spirits or wines on bonded
premises.

The proprietor may move tax paid or
tax determined spirits or wines across
bonded premises. However, tax paid or
tax determined spirits or wines may not
be stored or allowed to remain on the
bonded premises. The proprietor must
keep tax paid or tax determined spirits
or wines separate from spirits or wines
on which tax has not been paid or
determined. Spirits returned to bonded
premises under the provisions of 26
U.S.C. 5215 may remain on bonded
premises.
(26 U.S.C. 5201 and 5612)

9101

(1) May not store or allow the
untaxpaid spirits or wines to remain on
any premises other than the bonded
premises;
(2) Must keep the untaxpaid spirits or
wines separate from spirits on which
the tax has been paid or determined;
(3) Must submit to the appropriate
TTB officer a description of the means,
route of the conveyance, and the areas
of the distilled spirits plant, public
thoroughfare or roadways across which
spirits or wines will be conveyed, and
a copy of any agreement with the owner
or lessee of a private roadway. The
appropriate TTB officer must approve
the proposed means and route of
conveyance and any agreement; and
(4) Must provide a consent of surety
on the operations or unit bond (TTB
Form 5000.18) extending the terms of
the bond to cover the conveyance of the
spirits or wines.
(26 U.S.C. 5201 and 5601)
§ 19.60

Spirits in customs custody.

A proprietor may move distilled
spirits that are in customs custody
across distilled spirits plant premises if
the proprietor:
(a) Submits to the appropriate TTB
officer a description of the means and
route of the conveyance and the areas of
the distilled spirits plant across which
spirits will be conveyed and receives
approval from the appropriate TTB
officer for the method of movement;
(b) Does not store or allow the spirits
to remain on the premises of the
distilled spirits plant;
(c) Moves the spirits expeditiously,
and keeps the spirits separate and apart
from other spirits on the premises; and
(d) Provides a consent of surety on the
operations or unit bond (TTB Form
5000.18) extending the terms of the
bond to cover the conveyance of the
spirits.

§ 19.59 Conveyance of untaxpaid spirits or
wines within a distilled spirits plant.

(26 U.S.C. 5201)

(a) The proprietor may move
untaxpaid spirits or wines:
(1) Between different portions of the
bonded premises at the same distilled
spirits plant or across any other
premises of that plant;
(2) Over any public thoroughfare by
uninterrupted transportation; or
(3) Over a private roadway by
uninterrupted transportation. The
owner or lessee of the private roadway
must agree in writing to allow TTB
officers access to the roadway to
perform their duties.
(b) The conveyance of untaxpaid
spirits or wines under paragraph (a) of
this section is subject to the following
conditions. The proprietor:

Subpart D—Registration of a Distilled
Spirits Plant and Obtaining a Permit

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§ 19.71 Registration and permits in
general.

Except as otherwise provided in this
part, a person may only conduct
operations as a distiller, warehouseman,
or processor of distilled spirits on the
bonded premises of a distilled spirits
plant. In order to establish a distilled
spirits plant, a person must register the
plant with TTB and obtain an operating
permit and/or a basic permit. This
subpart covers the requirements for
registering a plant and obtaining an
operating permit under the IRC. Part 1
of this chapter covers the requirements

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for obtaining a basic permit under the
Federal Alcohol Administration Act.
(26 U.S.C. 5171)

Requirements for Registering a Plant
§ 19.72 General requirements for
registration.

(a) Establishment. A person who
wishes to establish a distilled spirits
plant must intend to conduct operations
as a distiller, as a warehouseman, or
both. A person cannot establish a
distilled spirits plant solely for the
processing of spirits.
(b) Registration. Before beginning
operations as a distilled spirits plant, a
person must submit an application for
registration and receive approval from
TTB. The following rules apply to an
application for registration:
(1) The applicant must apply for
registration on form TTB F 5110.41,
Registration of Distilled Spirits Plant,
and submit the application to the
appropriate TTB officer;
(2) TTB will consider all written
statements, affidavits, and other
documents supporting the application
as part of the application;
(3) If the appropriate TTB officer
determines that the original application
for registration cannot be approved
because it contains incomplete or
incorrect information, TTB may require
that the applicant file an additional TTB
F 5110.41, or submit other
documentation to complete or correct
the original application; and
(4) The applicant must file any
additional forms or submit any other
documentation within 60 days of the
appropriate TTB officer’s request.
(26 U.S.C. 5171, 5172)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.73 Information required in application
for registration.

(a) General. The application for
registration on form TTB F 5110.41,
Registration of Distilled Spirits Plant,
must include the following information:
(1) The serial number;
(2) The name, principal business
address, and location of the distilled
spirits plant if different from the
applicant’s business address;
(3) The operations that will be
conducted;
(4) The purpose for filing the
application;
(5) A statement describing the type of
business organization and the persons
involved in the business in accordance
with § 19.93. However, if any of this
information is already on file with the
appropriate TTB officer, the applicant
may advise TTB that the information on
file is part of the application for
registration;

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(6) A list of any operating permits,
basic permits, operations bonds,
withdrawal bonds, and/or unit bonds,
including the amount of any bond(s)
and the name of the surety on the bond;
(7) In the case of a corporation, a list
of the offices and officers authorized by
the articles of incorporation or the board
of directors to sign or act on behalf of
the corporation;
(8) A description of the plant in
accordance with § 19.74;
(9) A list of major equipment in
accordance with § 19.75;
(10) A statement of the maximum
number of proof gallons that will be
produced in the distillery during a
period of 15 days, stored on the bonded
premises, and in transit to the bonded
premises. This statement is not required
if the operations or unit bond is in the
maximum amount;
(11) A statement that accounting
records will be maintained in
accordance with generally accepted
accounting principles;
(12) A statement of plant security
measures in accordance with § 19.76;
(13) The following information if the
applicant intends to operate as a
distiller:
(i) Total proof gallons of spirits that
can be produced daily;
(ii) A statement of production
procedures in accordance with § 19.77;
and
(iii) A statement as to whether spirits
will be redistilled;
(14) The following information if the
applicant intends to operate as a
warehouseman:
(i) A description of the storage system;
and
(ii) Total amount of bulk wine gallons
that can be stored; and
(15) The following information if the
applicant intends to operate as a
processor:
(i) A statement whether spirits will or
will not be bottled, denatured,
redistilled, and whether articles will be
manufactured; and
(ii) A description of the storage
system for spirits bottled and cased or
otherwise packaged and placed in
approved containers for removal from
bonded premises.
(b) Other business. If the applicant
intends to conduct any other business
on the distilled spirits plant premises as
authorized under § 19.55, the following
information must be submitted with the
application:
(1) A description of the business;
(2) A list of buildings and equipment
that will be used; and
(3) A statement of the relationship of
the business to the distilled spirits
operations at the plant.

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(c) Additional information. The
applicant must furnish any additional
information needed by TTB to
determine if the application for
registration should be approved.
(26 U.S.C. 5171, 5172, 6001)
§ 19.74

Description of the plant.

As required by § 19.73(a)(8), the
application for registration must include
a description of the distilled spirits
plant. This information must:
(a) Describe each tract of land covered
by distilled spirits plant;
(b) Clearly distinguish between the
bonded premises and any general
premises;
(c) Provide directions and distances in
enough detail to enable the appropriate
TTB officer to readily determine the
boundaries of the plant;
(d) Describe each building and
outside tank that will be used for
production, storage, and processing of
spirits and for denaturing spirits,
articles, or wines. The description must
include the location, size, construction,
and arrangement with reference to each
by a designated number or letter; and
(e) Specify when only a room or floor
of a building will be used for plant
operations and provide the location and
description of the building, floor, and
room.
(26 U.S.C. 5172)
§ 19.75

Major equipment.

As required by § 19.73(a)(9), the
application for registration must include
a list of the major plant equipment. If
the equipment is set up and used for the
production, storage, or processing of
distilled spirits, wine, denatured spirits,
or articles, the list must provide the
following information:
(a) The serial number and capacity of
each tank in the plant. The list does not
need to include any bulk containers
having a capacity of less than 101 wine
gallons on the plant premises if those
containers do not meet the criteria of a
tank under § 19.182 (perks, small totes,
etc.);
(b) The serial number, kind, capacity,
and intended use of each still in the
plant. The capacity is the estimated
maximum proof gallons of spirits
capable of being produced every 24
hours, or for column stills a statement
of the diameter of the base and number
of plates; and
(c) The serial number of each
condenser.
(26 U.S.C. 5172, 5179)
§ 19.76

Statement of plant security.

As required by § 19.73(a)(12), the
application for registration must include

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a statement of plant security. This
statement must include the following
information:
(a) A general description of plant
security, including methods used to
secure buildings or plant operations
located within a portion of a building
and outdoor tanks;
(b) A statement regarding the use of
guard personnel;
(c) A statement regarding the use of
any electronic or mechanical alarm
system;
(d) A statement certifying that locks
used will meet the requirements of
§ 19.192(f); and
(e) A list of persons, by their position
and title, who have the responsibility
for the custody and access to keys for
the locks.
(26 U.S.C. 5171, 5172)
§ 19.77 Statement of production
procedure.

(a) As required by § 19.73(a)(13)(ii),
the application for registration must
include a statement of the step-by-step
production procedure used to produce
spirits from an original source. The
statement must begin with the treating,
mashing, or fermenting of the raw
materials or substances and continue
through each step of the distilling,
purifying, and refining procedure to the
production gauge. The statement must
include the kind and approximate
quantity of each material or substance
used in producing, purifying, or refining
each type of spirits that will be
produced.
(b) If the applicant intends to redistill
spirits in the production account, the
applicant must submit and receive
approval for such redistillation on form
TTB F 5110.38, Formula for Distilled
Spirits under the Federal Alcohol
Administration Act.
(26 U.S.C. 5172, 5201, 5222, 5223, 5555)
§ 19.78

srobinson on DSKHWCL6B1PROD with RULES2

(26 U.S.C. 5172)
Registry of stills.

Section 29.55 of this chapter requires
that every person having possession,
custody, or control of a still or distilling
apparatus must register the still or
distilling apparatus. When a person lists
a still or distilling apparatus with the

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(26 U.S.C. 5172, 5179)
§ 19.80

Approved notice of registration.

A person may not operate a distilled
spirits plant unless a notice of
registration has been approved by TTB
authorizing the businesses and
operations to be conducted at such
plant. When approved by the
appropriate TTB officer, the application
for registration constitutes the notice of
registration of the distilled spirits plant.
A distilled spirits plant will not be
registered or reregistered under this
subpart until the applicant has
complied with all requirements of law
and regulations relating to the
qualification of the business or
operations in which the applicant
intends to engage. In any instance where
a person is required to have a bond or
permit and the bond or permit becomes
invalid, then the notice of registration
also becomes invalid. Another
application for registration must be filed
and a new notice of registration
approved by TTB before the business or
operation at such plant may be resumed.
Reregistration of a plant is not required
when a new bond or a strengthening
bond is filed in accordance with
§ 19.167 or § 19.168.
(26 U.S.C. 5171, 5172)
§ 19.81

Maintenance of registration file.

The proprietor must maintain the
registration documents on the plant
premises in a loose-leaf file that is
current, complete, and readily available
for inspection by the appropriate TTB
officer.
(26 U.S.C. 5172)

Power of attorney.

An applicant or proprietor of a
distilled spirits plant must execute and
submit to the appropriate TTB officer
form TTB F 5000.8, Power of Attorney,
for each person authorized to sign or to
act on behalf of the applicant or
proprietor unless the authority has been
granted in the application for
registration.
§ 19.79

application for registration as required
by § 19.75(b) and receives approval of
the registration, that person has fulfilled
the requirement to register the still or
distilling apparatus. See § 29.55 of this
chapter for additional provisions
regarding stills and distilling apparatus.

Jkt 223001

Requirements for an Operating Permit
Under the IRC
§ 19.91

Operating permit.

(a) Except as provided in paragraph
(b) of this section, a person must obtain
an operating permit under the IRC in
order to:
(1) Distill for industrial use;
(2) Warehouse spirits for industrial
use;
(3) Denature spirits;
(4) Warehouse spirits (without
bottling) for nonindustrial use;
(5) Bottle or package spirits for
industrial use;
(6) Manufacture articles; or
(7) Engage in any other distilling,
warehousing, or processing operation

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9103

not required to be covered by a basic
permit under the Federal Alcohol
Administration Act (49 Stat. 978; 27
U.S.C. 203, 204).
(b) Exception. The requirement to
obtain an operating permit does not
apply to an agency of a State, or
political subdivision of a State, or an
officer or employee of, and acting for,
such an agency.
(26 U.S.C. 5171, 5271)
§ 19.92 Information required in application
for operating permit.

(a) In order to obtain an operating
permit, a person must complete an
application on form TTB F 5110.25,
Application for Operating Permit Under
26 U.S.C. 5171(d). TTB will consider all
written statements, affidavits and other
documents submitted in support of the
application as part of the application.
(b) The application on TTB F 5110.25
must include the following information:
(1) The name and principal address of
the business;
(2) The address of the plant if
different from the business address;
(3) A description of the operation(s) to
be conducted;
(4) A statement of the business
organization and the persons involved
in the business as required under
§ 19.93; and
(5) A list of trade names as required
under § 19.94.
(c) A TTB officer may request that any
person listed under § 19.93(a)(1)(ii),
(a)(3)(iii), (b)(1), or (b)(2) submit to TTB
a statement as to whether that person
has ever:
(1) Been convicted of a felony or
misdemeanor under Federal or State
law, other than a misdemeanor
conviction for a traffic violation;
(2) Been arrested or charged with any
violation of State or Federal law, other
than an arrest or charge for a
misdemeanor traffic violation; or
(3) Applied for, held, or been
connected with a permit issued under
Federal law to manufacture, distribute,
sell or use spirits or products containing
spirits, or held any financial interest in
any business covered by any such
permit, and if so, give the permit
number, classification, period of
operation and details regarding any
denial, suspension, revocation or other
termination.
(d) If any of the information required
in paragraphs (b)(4) or (c)(3) of this
section is on file with the appropriate
TTB officer, the applicant may, by
incorporation by reference, state that the
information is made a part of the
application for an operating permit.
(e) The applicant must provide any
additional information that the

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appropriate TTB officer may request in
order to determine whether the
application should be approved.
(26 U.S.C. 5171, 5271)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.93

Applicant organization documents.

(a) Supporting information. Sections
19.73(a)(5) and 19.92(a)(4) require that
the application for registration and the
application for an operating permit
include information about the business
organization of the applicant. The
applicant must provide the following
information as applicable:
(1) If the applicant is a corporation—
(i) The corporate charter or other
documentation that provides proof of
corporate existence or incorporation;
(ii) Names and addresses of directors
and officers;
(iii) Certified minutes, or extracts of
board of directors meetings, that
authorize specific individuals to sign for
the corporation; and
(iv) A statement showing the number
of shares of each class of stock or other
evidence of ownership, authorized and
outstanding, and the voting rights of the
respective owners or holders.
(2) If the applicant is a partnership, a
copy of the articles of partnership or
association, or certificate of partnership
or association if required to be filed by
any State, county, or municipality.
(3) If the applicant is a limited
liability company or limited liability
partnership—
(i) A copy of the articles of
organization;
(ii) A copy of the operating agreement;
and
(iii) The names and addresses of all
members and managers.
(b) Statement of interest—(1) Sole
proprietorships and general
partnerships. In the case of an
individual owner or a general
partnership, the applicant must provide
the name and address of each person
having an interest in the business and
a statement indicating whether the
interest appears in the name of the
interested person or in the name of
another person.
(2) Limited liability entities. In the
case of a corporation, limited liability
partnership, limited liability company,
or other legal entity in which some or
all of the owners have limited personal
liability for the activities of the entity,
the applicant must provide the
following information about persons
having an interest in the business:
(i) The names and addresses of the 10
persons that have the largest ownership
or other interest in each of the classes
of ownership of the applicant and the
nature and amount of ownership or
other interest of each person.

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(ii) The name of the person in whose
name the interest appears. If the
corporation is wholly owned or
controlled by another corporation, the
appropriate TTB officer may request the
same information regarding ownership
for the parent corporation.

§ 19.97

(26 U.S.C. 5172, 5271)

§ 19.98

§ 19.94

The proprietor may conduct the
operations authorized by the operating
permit on a continuing basis unless:
(a) The proprietor voluntarily
surrenders the permit;
(b) TTB suspends or revokes the
permit pursuant to § 19.99; or
(c) The permit is automatically
terminated under its own terms or in
accordance with § 19.127.

Trade names.

(a) Operating permits. The applicant
must include a list of any trade names
used in the operation of the plant with
form TTB F 5110.25, Application for
Operating Permit Under 26 U.S.C.
5171(d). The applicant must show the
operations for which the trade name
will be used and identify the offices
where the trade name is registered. The
applicant must also submit copies of
any certificate or other document filed
or issued for each trade name.
(b) Basic permits. If the applicant is
required to have a basic permit under
the Federal Alcohol Administration Act
(49 Stat. 978; 27 U.S.C. 203, 204) for
distilling, warehousing, or processing
operations, then the applicant must
follow the regulations under that Act for
the approval and use of trade names.
(26 U.S.C. 5271)
§ 19.95

Issuance of operating permits.

TTB will issue only one operating
permit for a distilled spirits plant. The
permit will designate the operations that
are authorized at the plant. The
proprietor must post the permit at the
distilled spirits plant and have it
available for inspection by appropriate
TTB officers.
(26 U.S.C. 5171, 5271)
§ 19.96

Denial of permit.

TTB will conduct proceedings for the
denial of an application for an operating
permit in accordance with the
procedures set forth in part 71 of this
chapter if the appropriate TTB officer
has reason to believe that:
(a) The applicant (including, in the
case of a corporation, any officer,
director, or principal stockholder, and,
in the case of a partnership, a partner)
is, by reason of business experience,
financial standing, or trade connections,
not likely to maintain operations in
compliance with 26 U.S.C. chapter 51,
or the regulations issued thereunder;
(b) The applicant failed to disclose
any material information required, or
has made a false statement as to any
material fact in connection with the
application; or
(c) The premises where the applicant
proposes to conduct the operations are
not adequate to protect the revenue.
(26 U.S.C. 5271)

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Correction of permit.

If requested by the appropriate TTB
officer, a proprietor must immediately
return for correction any operating
permit that contains an error.
(26 U.S.C. 5271)
Duration of permit.

(26 U.S.C. 5271)
§ 19.99 Suspension or revocation of
permit.

TTB will conduct proceedings to
revoke or suspend an operating permit
in accordance with the procedures set
forth in part 71 of this chapter if the
appropriate TTB officer has a reason to
believe that the proprietor or any person
associated with the operating permit:
(a) Has not complied in good faith
with the provisions of 26 U.S.C. chapter
51 or the regulations issued thereunder;
(b) Has violated the conditions of the
permit;
(c) Has made a false statement as to
any material fact in the application for
the permit;
(d) Has failed to disclose any required
material information;
(e) Has violated or conspired to
violate any law of the United States
relating to intoxicating liquor;
(f) Has been convicted of any offense
under title 26 U.S.C. punishable as a
felony or of any conspiracy to commit
such an offense; or
(g) Has not engaged in any of the
operations authorized by the permit for
a period of more than 2 years.
(26 U.S.C. 5271)

Subpart E—Changes to Registrations
and Permits
§ 19.111

Scope.

This subpart explains the
requirements for amending a distilled
spirits plant registration and, if
applicable, an operating permit. For
information regarding amendments to a
basic permit issued under the Federal
Alcohol Administration Act, see part 1
of this chapter.
(26 U.S.C. 5171)

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Rules for Amending a Registration

(26 U.S.C. 5172, 5271)

§ 19.112 General rules for amending a
registration.

§ 19.114 Changes in stockholders or
persons with interest.

If there is a change in any of the
information in the proprietor’s current,
approved notice of registration, the
proprietor must amend the registration
within 30 days of the change unless
another time period is specified in this
subpart. To amend a registration the
proprietor must submit in writing to the
appropriate TTB officer any information
necessary to make the registration file
current and accurate.
(a) TTB F 5110.41. Except when a
letterhead application or letterhead
notice procedure is allowed under this
subpart, the proprietor must submit an
amended form TTB F 5110.41,
Registration of Distilled Spirits Plant,
for changes that affect the registration. If
the changes affect only parts or pages of
the registration the proprietor only
needs to submit the necessary pages or
information that will make the
registration file current.
(b) Letterhead applications. For
certain changes specified in this subpart
the proprietor may submit a letterhead
application for a change instead of an
amended TTB F 5110.41. The letterhead
application must identify the distilled
spirits plant to which the change
applies and clearly identify the change.
Any change is subject to TTB approval.
The appropriate TTB officer may, at any
time, require that the proprietor submit
an amended application on TTB F
5110.41 if administrative difficulties
occur as a result of the letterhead
application.
(c) Letterhead notices. For certain
changes specified in this subpart only a
letterhead notice is required. The
letterhead notice must identify the
distilled spirits plant to which the
change applies and clearly identify the
change. A letterhead notice does not
require approval by TTB. The
appropriate TTB officer may, at any
time, require that the proprietor submit
an amended application on TTB F
5110.41 if administrative difficulties
occur as a result of the letterhead notice.

The proprietor must notify TTB of any
changes in the list of stockholders or
persons with interest that was filed with
TTB as required by § 19.93. If the
change results in a change of control,
the proprietor must file form TTB F
5110.41, Registration of Distilled Spirits
Plant, within 30 days of the change. If
the change does not cause a change of
control, the proprietor:
(a) May file a letterhead notice to
amend the registration;
(b) May file the amended notice on
May 1 of each year rather than within
30 days of the change, or on any other
date that the appropriate TTB Officer
may approve; and
(c) Must incorporate all changes
submitted by letterhead notice in the
next TTB F 5110.41 filed.

(26 U.S.C. 5171, 5172)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.113

Change in name of proprietor.

If the name of the of the proprietor
changes, the proprietor may not conduct
operations under the new name before
TTB approves the amended registration.
The proprietor must file either an
amended form TTB F 5110.41,
Registration of Distilled Spirits Plant, or
a letterhead application to reflect the
change. However, the proprietor does
not have to file a new bond or consent
of surety.

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(26 U.S.C. 5172, 5271)
§ 19.115 Change in officers, directors,
members, or managers

(a) General. If there is a change in the
list of officers, directors, members or
managers that the proprietor filed as
required by § 19.93 the following rules
apply:
(1) The proprietor must file an
amended form TTB F 5110.41,
Registration of Distilled Spirits Plant, or
a letterhead notice to reflect the change;
(2) The proprietor must provide the
name and address of each new officer,
director, member or manager; and
(3) The proprietor must incorporate
all changes submitted by letterhead
notice in the next TTB F 5110.41 filed.
(b) Waiver. The appropriate TTB
officer may waive the requirement to
amend the registration if the change
only relates to corporate officers listed
on the original or current registration
who are no longer connected with the
operations covered by the registration.
(26 U.S.C. 5171, 5172)
§ 19.116

Change in proprietorship.

(a) General. If there is a change in
proprietorship at a distilled spirits
plant, the following requirements apply
to the outgoing proprietor and to the
incoming (successor) proprietor.
(1) Outgoing proprietor. An outgoing
proprietor must comply with the
requirements of § 19.147. An outgoing
proprietor may transfer spirits to its
successor in accordance with § 19.141.
(2) Incoming proprietor. A successor
to the proprietorship of a plant that
holds a registration:
(i) Must file form TTB F 5110.41,
Registration of Distilled Spirits Plant,
and receive from TTB an approved
notice of registration of the plant;

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9105

(ii) Must file the required bonds; and
(iii) May adopt the approved formulas
of its predecessor in accordance with
§§ 5.28 and 20.63 of this chapter.
(b) Fiduciary. If the successor to the
proprietorship of a plant is an
administrator, executor, receiver,
trustee, assignee or other fiduciary, the
successor must comply with the
provisions of paragraph (a)(2) of this
section. The following rules also apply
in this case:
(1) The fiduciary may furnish a
consent of surety to extend the terms of
the predecessor’s bond instead of filing
a new bond;
(2) The fiduciary may incorporate by
reference in the application for
registration on TTB F 5110.41 any
information contained in the
predecessor’s application for
registration that is still current;
(3) The successor must furnish a
certified copy of the order of the court
or other pertinent document showing
the successor’s qualification as
fiduciary; and
(4) The effective date of the qualifying
documents that the fiduciary files will
be the date of the court order, the date
specified in the order whereby the
fiduciary assumes control, or if there is
no court order, the date that the
fiduciary assumed control.
(26 U.S.C. 5172)
§ 19.117

Partnerships.

(a) If there is a death or insolvency of
a partner in the business registered
under this part, the surviving partner or
partners may continue to operate under
the notice of registration if:
(1) The partnership is not terminated
under the laws of the particular State
but continues until the winding up of
the partnership affairs is complete;
(2) The surviving partner or partners
have exclusive right to the control and
possession of the partnership assets for
purposes of liquidation and settlement;
and
(3) A consent of surety is filed where
the surety and the surviving partner or
partners agree to remain liable on the
operations or unit bond.
(b) If the surviving partner or partners
acquire the business upon settlement of
the partnership, the surviving partner or
partners must file as an incoming
proprietor and receive an approved
notice of registration of the plant in
accordance with § 19.116(a).
(26 U.S.C. 5172)
§ 19.118

Change in location.

(a) If the location of the plant changes,
the proprietor must:

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(1) File form TTB F 5110.41,
Registration of Distilled Spirits Plant, to
amend the registration;
(2) File a new bond or a consent of
surety on form TTB F 5000.18; and
(3) Not begin operations at the new
location prior to approval of the
amended registration.
(b) If there is a temporary change of
delivery address within a plant with no
change in plant location, the proprietor
may file a letterhead notice to
temporarily amend the registration.
(26 U.S.C. 5172, 5173, 5271)
§ 19.119

Change in premises.

If the proprietor intends to extend or
curtail any part of the plant premises,
except under alternate operations that
are covered by §§ 19.142 and 19.143, the
proprietor must file form TTB F
5110.41, Registration of Distilled Spirits
Plant, to amend the registration. The
proprietor must not extend or curtail
any premises or equipment before the
amended registration is approved.
(26 U.S.C. 5172)
§ 19.120

Change in operations.

(26 U.S.C. 5171, 5172, 5271)

srobinson on DSKHWCL6B1PROD with RULES2

Change in production procedure.

If the proprietor plans to produce a
new product or make a change to the
production procedure that will affect
the designation of the product or
substantially affect the character of the
product, the proprietor must:
(a) File form TTB F 5110.41,
Registration of Distilled Spirits Plant, to
amend the registration;
(b) Provide a new statement of
production procedure as described in
§ 19.77; and
(c) Receive approval of the amended
registration before implementing the
change in the production procedure.
(26 U.S.C. 5172)

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(a) The proprietor must submit a
letterhead notice before making any
material change in the construction or
use of buildings or equipment at the
plant other than changes covered by
§§ 19.119, 19.142 or 19.143. The
proprietor must:
(1) Describe the proposed change in
detail;
(2) Keep a copy of the letterhead
notice on file with the current notice of
registration; and
(3) Incorporate the change in the next
amendment to the registration
submitted on form TTB F 5110.41,
Registration of Distilled Spirits Plant,
unless the appropriate TTB officer
requires immediate submission of an
amended TTB F 5110.41.
(b) The proprietor may make
emergency changes in construction or
use of buildings and equipment without
prior letterhead notice. However, the
proprietor must promptly report any
emergency change to the appropriate
TTB officer.
(26 U.S.C. 5172)

(a) If the proprietor wishes to conduct
additional operations involving spirits,
other than those approved on the
current registration, the proprietor must:
(1) File form TTB F 5110.41,
Registration of Distilled Spirits Plant, to
amend the registration; and
(2) Not engage in the additional
operations prior to approval of the
amended registration.
(b) If the proprietor wishes to engage
in another business that is authorized
under § 19.55 the proprietor must:
(1) File TTB F 5110.41 to amend the
registration;
(2) Include the information required
under § 19.73(b); and
(3) Not engage in the other business
until approval of the amended
registration is received.
§ 19.121

§ 19.122 Change in construction or use of
buildings and equipment.

§ 19.123

Statement of plant security.

If the proprietor makes changes to the
personnel listed, or procedures
contained in, the statement of plant
security filed under § 19.76, the
proprietor must:
(a) File a form TTB F 5110.41,
Registration of Distilled Spirits Plant, or
a letterhead application to amend the
registration, in the case of any change in
the description of plant security,
employment of guard personnel, use of
electronic or mechanical alarm system,
or certification of required locks
required under § 19.76(a) through (d);
(b) File a letterhead notice for any
change in personnel who have custody
and access to keys for the required locks
as provided under § 19.76(e); and
(c) Incorporate any changes filed by
letterhead notice in the next amendment
to the registration on TTB F 5110.41
submitted, unless the appropriate TTB
officer requires an immediate
submission of TTB F 5110.41.
(26 U.S.C. 5171, 5172)

Rules for Amending an Operating
Permit
§ 19.126 General rules for amending an
operating permit.

(a) When and how to amend. If there
is a change in any of the information
that the proprietor provided as part of
the current approved application for an
operating permit, the proprietor must
amend the operating permit by
submitting written documentation in

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Sfmt 4700

accordance with this section to the
appropriate TTB officer in writing
within 30 days of the change unless
another time period is specified in this
subpart.
(1) TTB F 5110.25. Except when a
letterhead application or letterhead
notice procedure is allowed under this
subpart, the proprietor must amend the
operating permit by submitting an
amended form TTB F 5110.25,
Application for Operating Permit Under
26 U.S.C. 5171(d). If the changes only
affect parts or pages of the application
for an operating permit the proprietor
only needs to submit the necessary
pages or information that will make the
permit file current.
(2) Letterhead applications. For
certain changes specified in this
subpart, the proprietor may submit a
letterhead application instead of an
amended TTB F 5110.25. The letterhead
application must identify the distilled
spirits plant for which the application
applies. The letterhead application
change is subject to TTB approval. The
appropriate TTB officer may, at any
time, require that the proprietor submit
an amended application on TTB F
5110.25 if administrative difficulties
occur as a result of the letterhead
application.
(3) Letterhead notices. For certain
changes noted in this subpart only a
letterhead notice is required. A
letterhead notice does not require
approval by TTB. The appropriate TTB
officer may, at any time, require that the
proprietor submit amended application
on TTB F 5110.25 if administrative
difficulties occur as a result of the
letterhead notice.
(b) FAA Act permits. If there are
changes that affect a basic permit issued
under the Federal Alcohol
Administration Act, the proprietor must
amend the basic permit in accordance
with the procedures set forth in part 1
of this chapter.
(26 U.S.C. 5171, 5172)
§ 19.127

Automatic termination of permits.

(a) Operating permits. An operating
permit is not transferable. The
proprietor’s operating permit will
automatically terminate in the following
circumstances:
(1) If the operations that are
authorized by the permit are leased,
sold or transferred;
(2) If the company is dissolved on a
certain date by an event specified in the
laws of the State where the company
operates; or
(3) In the case of a corporation, if
actual or legal control of the corporation
changes, directly or indirectly, whether
by reason of change in stock ownership

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or control, by operation of law, or in any
other manner, the permit will terminate
30 days after the change in control.
However, if an application for a new
permit covering the operations is made
within this 30 day period, then the
operating permit may remain in effect
until TTB takes final action upon the
new application. TTB’s final action on
the new application will automatically
terminate the outstanding permit.
(b) Basic permits. For provisions
related to the automatic termination of
an FAA Act basic permit, see part 1 of
this chapter.
(26 U.S.C. 5271)
§ 19.128

Change in name of proprietor.

If the name of the proprietor changes,
the proprietor must file a letterhead
application to amend the operating
permit. The proprietor may not conduct
operations under the new name before
TTB approves the amended operating
permit. However, the proprietor does
not have to file a new bond or consent
of surety.
(26 U.S.C. 5172, 5271)
§ 19.129

Change in trade name.

If the proprietor intends to change or
add a trade name that will be used in
the operation of the plant, the proprietor
must file a letterhead application to
amend the operating permit. The
proprietor may not conduct operations
under the new trade name before TTB
approves the amended operating permit.
However, the proprietor will not be
required to file a new bond or consent
of surety.
(26 U.S.C. 5271)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.130 Changes in stockholders or
persons with interest.

The proprietor must notify TTB of any
changes in the list of stockholders or
persons with interest that was filed with
TTB as required by § 19.93(b). If the
change results in a change of control,
the proprietor must file form TTB F
5110.25, Application for Operating
Permit Under 26 U.S.C. 5171(d), within
30 days of the change. If the change
does not cause a change in control the
proprietor:
(a) May file a letterhead notice to
amend the operating permit;
(b) May file the amended notice the
May 1st following the change in control
year rather than within 30 days of the
change, or on any other date that the
appropriate TTB Officer may approve;
and
(c) Must incorporate all changes
submitted by letterhead notice in the
next TTB F 5110.25 filed.
(26 U.S.C. 5172, 5271)

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§ 19.131 Changes in officers, directors,
members, or managers.

(a) General. If there is a change in the
list of officers, directors, members or
managers that the proprietor filed as
required by § 19.93, the proprietor must:
(1) File form TTB F 5110.25
Application for Operating Permit Under
26 U.S.C. 5171(d) or a letterhead notice
to amend the operating permit;
(2) Provide the name and address for
each new officer, director, member or
manager; and
(3) Incorporate all changes submitted
by letterhead notice in the next TTB F
5110.25 filed.
(b) Waiver. The appropriate TTB
officer may waive the requirement to
amend the operating permit if the
changes relate to corporate officers
listed on the original or current permit
who are no longer connected with the
operations covered by the permit.
(26 U.S.C. 5171, 5172)
§ 19.132

Change in proprietorship.

(a) General. If there is a change in
proprietorship at a distilled spirits plant
that holds an operating permit, the
following requirements apply to the
outgoing proprietor and to the incoming
(successor) proprietor.
(1) Outgoing proprietor. An outgoing
proprietor must comply with the
requirements of § 19.147. An outgoing
proprietor may transfer spirits to its
successor an accordance with § 19.141.
(2) Successor proprietor. A successor
to the proprietorship of a plant that
holds an operating permit:
(i) Must file form TTB F 5110.25
Application for Operating Permit Under
26 U.S.C. 5171(d) and obtain an
operating permit;
(ii) Must file the required bonds; and
(iii) May adopt the approved formulas
of its predecessor in accordance with
§§ 5.28 and 20.63 of this chapter.
(b) Fiduciary. If the successor to the
proprietorship of a plant is an
administrator, executor, receiver,
trustee, assignee, or other fiduciary, the
successor must comply with the
provisions of paragraph (a)(2) of this
section. The following rules also apply
in this case:
(1) The fiduciary may furnish a
consent of surety to extend the terms of
the predecessor’s bond instead of filing
a new bond;
(2) On TTB F 5110.25, Application for
Operating Permit Under 26 U.S.C.
5171(d), the fiduciary may incorporate
by reference any information contained
in the predecessor’s application that is
still current;
(3) The successor must furnish a
certified copy of the order of the court
or other pertinent document showing

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the successor’s qualification as
fiduciary; and
(4) The effective date of the qualifying
documents that the fiduciary files will
be the date of the court order, the date
specified in the order whereby the
fiduciary assumes control, or if there is
no court order, the date that the
fiduciary assumed control.
(26 U.S.C. 5172)
§ 19.133

Partnerships.

(a) If there is a death or insolvency of
a partner in a company that holds an
operating permit under this part, the
surviving partner or partners may
continue to operate under the operating
permit if:
(1) The partnership is not terminated
under the laws of the particular State
but continues until the winding up of
the partnership affairs is complete;
(2) The surviving partner or partners
have exclusive right to the control and
possession of the partnership assets for
purposes of liquidation and settlement;
and
(3) A consent of surety is filed where
the surety and the surviving partner or
partners agree to remain liable on the
operations or unit bond.
(b) If the surviving partner or partners
acquire the business upon settlement of
the partnership, the surviving partner or
partners must file as an incoming
proprietor and receive approval of the
operating permit as required under
§ 19.132(a)(2).
(26 U.S.C. 5172)
§ 19.134

Change in location.

If the location of the plant changes,
the proprietor must:
(a) File form TTB F 5110.25,
Application for Operating Permit Under
26 U.S.C. 5171(d), to amend the
operating permit;
(b) File a new bond or a consent of
surety on form TTB F 5000.18; and
(c) Not begin operations at the new
location prior to approval of the
amended operating permit.
(26 U.S.C. 5172, 5271, 5173)
§ 19.135

Change in operations.

If the proprietor wishes to conduct
additional operations involving spirits,
other than those already approved on
the current operating permit, the
proprietor must:
(a) File form TTB F 5110.25
Application for Operating Permit Under
26 U.S.C. 5171(d) to amend the permit;
and
(b) Not engage in the additional
operation prior to approval of the
amended permit.
(26 U.S.C. 5171, 5172, 5271)

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Alternation of Plant Proprietors

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.141 Procedures for alternation of
proprietors.

(a) General. A proprietor may
alternate use of a distilled spirits plant
or part of the plant with one or more
other proprietors. In order to do so, each
proprietor must separately file and
receive approval of the necessary
registration, applications and bonds that
are required by subparts D and E of this
part. Each proprietor must also conduct
operations and keep records in
accordance with the regulations in this
part. Where operations by alternating
proprietors will be limited to parts of
the plant, each proprietor must include
the following in the notice of
registration:
(1) A description of the areas, rooms
or buildings, or combination of rooms or
buildings that will alternate between
proprietors;
(2) The method that the proprietor
will use to separate the alternated
premises from any premises that will
not be alternated; and
(3) Diagrams of the parts of the plant
that will be alternated.
(b) Letterhead notice. After a
proprietor receives approval to alternate
use of the premises with another
proprietor, the alternating proprietors
must separately file letterhead notices
each time they intend to alternate use of
the premises. The proprietors may file a
single notice if the notice is signed by
each proprietor or an authorized
representative of each proprietor. The
proprietors must submit the letterhead
notice to the appropriate TTB officer
prior to the first day that alternation is
to take place. Proprietors must include
the following with the notice:
(1) The plant number and the name of
the proprietor filing the notice;
(2) Identification of the outgoing
proprietor and incoming proprietor (by
name and plant number);
(3) The effective date and hour of the
alternation;
(4) Identification of any applicable
diagrams provided with the registration
of each proprietor filed under paragraph
(a) of this section, showing the portions
of the premises involved in the
alternation;
(5) The purpose of the alternation;
(6) If distilling materials, unfinished
or finished spirits, denatured spirits, or
wine will be transferred to the incoming
proprietor, a statement to that effect;
and
(7) If denatured spirits or articles will
be retained in the processing account in
locked tanks during the period of
alternate proprietorship, a statement to
that effect.

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(c) Alternation of production
operations. In the case of an outgoing
proprietor who intends to alternate
production operations with another
proprietor, the outgoing proprietor
must:
(1) Completely process all distilling
materials and unfinished spirits in any
bonded areas, rooms, or buildings that
will alternate unless the outgoing
proprietor transfers them to the
incoming proprietor; and
(2) Mark and remove all finished
spirits in the name in which they were
produced before a production gauge is
made by the incoming proprietor.
(d) Alternation of storage operations.
In the case of an outgoing proprietor
who intends to alternate storage
operations with another proprietor, the
outgoing proprietor must:
(1) Transfer in bond any spirits or
wines in any bonded areas, rooms, or
buildings that will be alternated; and
(2) Execute a form TTB F 5000.18,
Change of Bond (Consent of Surety), to
continue in effect the operations or unit
bond whenever operations of the areas,
rooms, or buildings will be resumed by
the outgoing proprietor following
suspension of operations by the other
proprietor.
(e) Alternation of processing
operations. In the case of an outgoing
proprietor who intends to alternate
processing operations with another
proprietor, the outgoing proprietor:
(1) Before the effective date and time
of the alternation, must process to
completion and remove from the
affected area all spirits, denatured
spirits, wines, or articles located in any
rooms, areas, or buildings that will
alternate, or must transfer these spirits,
wines, and articles in bond to the
incoming proprietor;
(2) Must execute a TTB F 5000.18,
Change of Bond (Consent of Surety), to
continue in effect the operations or unit
bond whenever operations of the areas,
rooms, or buildings will be resumed by
the outgoing proprietor following
suspension of operations by the other
proprietor; and
(3) May retain denatured spirits and
articles in tanks locked with approved
locks if the outgoing proprietor
maintains custody and control of the
locks and keys for the tanks. In this
case, the outgoing proprietor must
obtain a consent of surety on TTB F
5000.18 to continue liability on the
operations or unit bond for the tax on
the denatured spirits or articles that
retained in the locked tanks.
(f) Records. Each alternating
proprietor must maintain its own
records and submit its own reports.
Records kept by an outgoing proprietor

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for spirits, wines, and alcoholic
flavoring materials may be used by the
incoming proprietor. All transfers of
distilling materials, unfinished spirits,
spirits, denatured spirits, and wines
must be reflected in the records of each
proprietor.
(26 U.S.C. 5172, 5271)

Conduct of Alternate Operations at a
Plant
§ 19.142 Alternate use of premises and
equipment for customs purposes.

(a) General. The proprietor may
extend or curtail the distilled spirits
plant premises or a part of those
premises for temporary use by Customs
and Border Protection officers for
customs purposes. If the proprietor
wishes to alternate the use of the
premises for customs purposes, that use
must be approved by the port director
of customs and must be conducted in
accordance with applicable customs
laws and regulations.
(b) Qualification. Before alternating
the plant premises for customs
purposes, the proprietor must file and
receive approval of the necessary
registration, application and bonds as
required by this part. The proprietor’s
application for registration must include
the following:
(1) A description of the areas, rooms
or buildings, or combination of rooms or
buildings that will be alternated;
(2) A diagram of the parts of the plant
that the proprietor will use for the
alternation; and
(3) The method that the proprietor
will use to separate the alternated
premises from any premises not subject
to alternation.
(c) Letterhead notice. After the
proprietor receives approval to alternate
premises for customs purposes, the
proprietor must file a letterhead notice
with the appropriate TTB officer each
time the premises will be alternated.
The notice must include the following
information:
(1) The name and plant number of the
proprietor filing the notice;
(2) The date and hour the alternation
will take place;
(3) Identification of any applicable
diagrams provided with the registration
filed under paragraph (b) of this section,
showing the portions of the premises
involved in the alternation;
(4) The purpose of the alternation;
(5) If the alternation is for gauging or
processing distilled spirits, a statement
to that effect; and
(6) An indication of the class of
temporary customs warehouse, if
applicable.
(d) Proprietor responsibilities. Prior to
the start of alternation for customs

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purposes, the proprietor must remove
all spirits from the premises or
equipment that will be involved in the
alternation. However, upon release by
customs, spirits in the process of being
transferred to bonded premises under 26
U.S.C. 5232 may remain on the premises
to be reincluded in the bonded
premises.
(e) Exceptions. The qualification
requirements in paragraph (b) of this
section and the notice requirements in
paragraph (c) of this section will not
apply where the proprietor solely
intends to gauge bulk distilled spirits for
transfer from customs custody to TTB
bond.
(f) Conveyance of spirits in customs
custody. If the proprietor intends to
convey spirits in customs custody
across the distilled spirits plant
premises the proprietor must comply
with § 19.60.
(26 U.S.C. 5172, 5178)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.143

Alternation for other purposes.

(a) General. The proprietor may
temporarily extend or curtail the
distilled spirits plant premises to allow
for several other types of alternate uses.
Premises may be alternately curtailed or
extended to allow bonded premises to
be used temporarily as general premises,
or to allow general premises to be used
as bonded premises. A curtailment or
extension of distilled spirits plant
premises may also allow for the use of
the premises as:
(1) An adjacent bonded wine cellar;
(2) An adjacent taxpaid wine bottling
house;
(3) An adjacent brewery; or
(4) Facilities for the manufacturer of
eligible flavors.
(b) Qualifying documents. Before
alternating the premises for a purpose
listed in paragraph (a) of this section,
the proprietor must file and receive
approval of the necessary registration,
application forms and attachments that
relate to the proposed alternate use.
Depending on the type of alternation
involved, the proprietor must file one or
more of the following qualification
documents:
(1) Registration. For all alternate uses
of the distilled spirits plant described in
paragraph (a) of this section the
proprietor must file a form TTB F
5110.41, Registration of a Distilled
Spirits Plant, to cover the proposed
alternation of premises.
(2) Diagram. For all alternate uses, the
proprietor must provide a special
diagram, in duplicate, delineating the
premises as they will exist, both during
extension and curtailment and clearly
depicting all buildings, floors, rooms,
areas, equipment that are to be subject

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to alternation, in their relative operating
sequence.
(3) Bond. For all alternate uses, the
proprietor must provide evidence of an
existing bond, consent of surety, or a
new bond to cover the proposed
alternation of premises.
(4) Bonded wine cellar or taxpaid
wine bottling house. If the proprietor
intends to alternate the premises or part
of the premises as a bonded wine cellar
or taxpaid wine bottling house the
proprietor must also file form TTB F
5120.25, Application to Establish and
Operate Wine Premises.
(5) Brewery. If the proprietor intends
to alternate the premises or part of the
premises for a brewery operation the
proprietor must file form TTB F
5130.10, Brewer’s Notice.
(c) Separation of premises. The
proprietor must separate the distilled
spirits plant premises from the alternate
use premises in accordance with the
approved plan of alternation described
in the qualifying documents.
(d) Segregation of products. When the
proprietor alternates premises, the
proprietor must segregate products as
follows:
(1) Wine operations. (i) Prior to
alternation from distilled spirits plant
premises to wine premises, the
proprietor must remove all distilled
spirits, denatured spirits, articles, and
wine from the distilled spirits plant
premises that will be alternated.
However, the proprietor may keep
spirits on the premises if they are being
withdrawn for use in wine production
under § 19.419, or for use in the
production of nonbeverage wine or wine
products under § 19.421. Further, the
proprietor may keep wine on the
premises if it is to be transferred in bond
under § 19.402(b)(2).
(ii) Prior to alternation from wine
premises to distilled spirits plant
premises, the proprietor must remove
all wine and spirits from the wine
premises that will be alternated.
However, the proprietor may keep wine
on the premises if it is being transferred
in bond under § 19.402(b)(1). Further,
the proprietor may keep spirits on the
premises if they are being returned from
bonded wine cellar premises to distilled
spirits plant bonded premises under
§ 19.454.
(2) Brewery. Prior to alternation from
distilled spirits plant premises to
operation of a brewery the proprietor
must remove all spirits, denatured
spirits, articles and wine from the
premises to be alternated to brewery
premises. Prior to alternation of brewery
premises to distilled spirits plant
premises, the proprietor must remove
all beer from the premises except beer

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that is being received for production of
distilled spirits as provided in § 19.296.
(3) General premises. Prior to
alternation between bonded and general
premises, the proprietor must remove
all spirits, denatured spirits, articles and
wine from the premises to be alternated.
However, the proprietor may keep
bonded spirits on portions of bonded
premises to be alternated to general
premises if the spirits are taxpaid
concurrently with the alternation. Also,
the proprietor may keep taxpaid spirits
on general premises that will be
alternated to bonded premises if the
spirits are to be immediately dumped
and returned to bond under the
provisions of subpart Q of this part.
(4) Manufacture of nonbeverage
products. Prior to alternation of the
distilled spirits plant premises for use in
the manufacture of eligible flavors, the
proprietor must remove all spirits,
denatured spirits, articles and wine
from the premises to be alternated.
However, the proprietor may keep
spirits on portions of the premises to be
curtailed if the proprietor pays the tax
concurrent with the alternation. Further,
the proprietor may keep taxpaid spirits
that have not been used in the
manufacture of a nonbeverage product
on parts of the premises to be included
in the extension of the bonded premises
if the spirits are to be immediately
dumped and returned to bond under the
provisions of subpart Q of this part.
(e) Records. The proprietor must
prepare the record of alternating
premises prescribed by § 19.627 each
time that the proprietor alternates
premises.
(26 U.S.C. 5172, 5178)
§ 19.144 Alternation of distilled spirits
plant and volatile fruit-flavor concentrate
plant premises.

The proprietor may temporarily
extend or curtail the distilled spirits
plant premises for alternate use with the
premises of a contiguous volatile fruitflavor concentrate plant. If a proprietor
wishes to use all or a portion of the
premises alternately as a volatile fruitflavor concentrate plant or vice versa,
the proprietor must comply with the
requirements of §§ 18.39 and 18.41
through 18.43 of this chapter.
(26 U.S.C. 5172, 5178)

Discontinuance of Operations
§ 19.147 Notice of discontinuance of
operations.

If the proprietor plans to permanently
discontinue one or more of the
operations listed on the notice of
registration filed under subpart D of this
part, the proprietor must notify the

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appropriate TTB officer by filing form
TTB F 5110.41, Registration of Distilled
Spirits Plant, to show discontinuance of
operations. The proprietor must submit
the following with TTB F 5110.41:
(a) The permit covering each
discontinued operation;
(b) A written request for cancellation
of the permit(s);
(c) A written statement indicating
whether or not—
(1) The proprietor has lawfully
disposed of all spirits, denatured spirits,
articles, wines, liquor bottles, and other
pertinent items;
(2) There are any spirits, denatured
spirits, wines, or liquor bottles in transit
to the premises; and
(3) The proprietor has secured and
returned to the appropriate TTB officer
for cancellation all approved
applications for transfer of spirits and
denatured spirits to the premises; and
(d) A final monthly operations report,
as provided for under § 19.632, for each
discontinued operation, with each
report marked ‘‘Final Report.’’
(26 U.S.C. 5172, 5271)

Subpart F—Bonds and Consents of
Surety
Bonding Requirements for a DSP

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.151

General.

(a) Bond required. Any person who
plans to establish and operate a distilled
spirits plant must provide TTB with one
or more bonds on form TTB F 5110.56,
Distilled Spirits Bond. TTB will not
approve a registration or allow a person
to operate a distilled spirits plant until
the applicant has provided the
necessary bonds. If a proprietor fails to
pay any liability covered by a bond,
TTB may seek payment from the
proprietor, from the surety (see § 19.153)
or from both the proprietor and the
surety. The types and penal sums of
bonds required will depend upon the
type and size of the operations that the
proprietor will conduct.
(b) Bond terms and conditions. The
terms and conditions of a distilled
spirits bond require that the proprietor
comply with all provisions of law and
regulations relating to activities covered
by the bond, and to pay all taxes
imposed by 26 U.S.C. chapter 51,
including taxes on unexplained
shortages of bottled distilled spirits. The
bond will further specify that the
proprietor will pay all penalties
incurred, or fines imposed, for
violations of law and regulations
relating to activities covered by the
bond. The specific terms of the required
bond(s) are stated on TTB F 5110.56.
(c) Corporations and controlled
subsidiaries. For purposes of this

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subpart, the term ‘‘corporation’’ includes
a Limited Liability Company (LLC) or
Limited Liability Partnership (LLP) in
any jurisdiction where the law
authorizes such a business organization
to operate. Whenever used in this
subpart, the term ‘‘controlled
subsidiary’’ means a corporation (or LLC
or LLP) in which more than 50 percent
of the voting power is controlled by a
parent corporation.
(26 U.S.C. 5173, 5551)
§ 19.152

Types of bonds.

(a) Basic Bonds. There are two basic
types of bonds: the operations bond, and
the withdrawal bond.
(1) Operations bond. An operations
bond covers the tax liability for a variety
of operations at a distilled spirits plant,
along with any penalties incurred and
fines imposed for violation of the law
and regulations relating to activities
covered by the bond.
(2) Withdrawal bond. A withdrawal
bond covers the tax liability for tax
determined distilled spirits withdrawn
from the bonded premises on a tax
deferred basis.
(b) Other bonds. In addition to the
basic operations and withdrawal bonds,
several variations of these bonds are
available:
(1) An adjacent wine cellar bond
covers operations at a distilled spirits
plant and an adjacent bonded wine
cellar;
(2) An area bond covers operations at
two or more distilled spirits plant and
any adjacent bonded wine cellars; and
(3) A unit bond covers both
operations and withdrawals at one or
more distilled spirits plants and
operations at any adjacent bonded wine
cellars.
(26 U.S.C. 5173)
§ 19.153
surety.

Bond guaranteed by a corporate

(a) Corporate surety. A company that
issues bonds is called a ‘‘corporate
surety.’’ Proprietors must obtain the
surety bonds required by this subpart
from a corporate surety approved by the
Secretary of the Treasury.
(b) How to find an approved surety.
The Department of the Treasury
publishes a list of approved corporate
surety companies in Treasury
Department Circular No. 570,
‘‘Companies Holding Certificates of
Authority as Acceptable Sureties on
Federal Bonds and as Acceptable
Reinsuring Companies.’’ Circular 570 is
published annually in the Federal
Register. The most current edition of the
circular is posted at the Web site of the
Financial Management Service,
Department of the Treasury at http://

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www.fms.treas.gov/c570. Printed copies
of Circular 570 are available for
purchase from the Government Printing
Office.
(31 U.S.C. 9304, 9306)
§ 19.154 Bond guaranteed by deposit of
securities.

(a) General. As an alternative to the
corporate surety bond under § 19.153, a
person can file a bond that guarantees
payment of the liability by pledging one
or more acceptable negotiable securities.
These securities must have a par value
(face amount) equal to or greater than
the penal sums of the required bonds.
The pledged securities are held in the
Federal Reserve Bank in a safekeeping
account with TTB as the pledgee.
Should the proprietor fail to pay one or
more of the guaranteed liabilities, TTB
can take action to sell the deposited
securities to satisfy the debt. Pledged
securities will be released if there are no
outstanding liabilities when the bond is
terminated. (See § 19.170.)
(b) Acceptable securities. Only public
debt obligations of the United States, the
principal and interest of which are
unconditionally guaranteed by the
United States Government, are
acceptable for the purpose described in
paragraph (a) of this section. The
Department of the Treasury and certain
other United States Government
agencies issue debt instruments that are
acceptable as collateral, such as
Treasury notes and Treasury bills.
Savings bonds, certificates of deposit
and letters of credit are not acceptable.
A list of securities acceptable as
collateral in lieu of surety bonds is
available from the Bureau of the Public
Debt, Office of the Commissioner,
Government Securities Regulations
Staff. Current information and guidance
from the Bureau of the Public Debt may
be found at http://
www.publicdebt.treas.gov.
(31 U.S.C. 9301, 9303; 31 CFR part 380)
§ 19.155 Change of surety bond terms—
consent of surety.

In order to change the terms of an
approved bond, both the principal and
the surety company that guaranteed the
bond must agree to the change. TTB
must also approve the change. All
changes to the terms of a bond must be
executed on form TTB F 5000.18,
Change of Bond (Consent of Surety) by
both the principal and the surety with
the same formality and proof of
authority as required for the original
bond. The completed, executed TTB F
5000.18 must be submitted to the
National Revenue Center.
(26 U.S.C. 5173)

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§ 19.156

Power of attorney for surety.

(a) Requirement for power of attorney.
Every bond and every consent of surety
filed with TTB in which an agent or
officer executed the bond or consent on
behalf of the surety must be supported
by a power of attorney authorizing the
agent or officer to execute the bond or
consent of surety. The power of attorney
assures TTB that the person who signed
the bond on behalf of the surety has the
legal authority to obligate the surety.
(b) Form of power of attorney and
endorsement. A power of attorney will
be prepared on the surety’s own form,
and must be executed under the surety’s
corporate seal. If the power of attorney
submitted is other than a manually
signed original, it must be accompanied
by a certification from the surety that
the power of attorney is valid.
(c) Additional documentation. The
appropriate TTB officer authorized to
approve and accept the bond may
require additional evidence of the
authenticity of signatures and the
authority of persons signing on behalf of
the surety to execute the bond or
consent.

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.157 Disapproval of bonds and
consents of surety.

(a) Grounds for disapproval. The
appropriate TTB officer may disapprove
any bond or consent of surety required
by this part if the principal or any
person having ownership, control or
responsibility for actively managing the
business of the surety has been
previously convicted, in a court of
competent jurisdiction of:
(1) Any fraudulent noncompliance
with any provision of any law of the
United States relating to internal
revenue or customs taxation of spirits,
wines, or beer, or if the offense was
compromised by payment of penalties
or otherwise, or
(2) Any felony under a law of any
State or the District of Columbia, or the
United States, prohibiting the
manufacture, sale, importation, or
transportation of spirits, wine, beer, or
other intoxicating liquor.
(b) Appeal. If the appropriate TTB
officer disapproves a bond or consent of
surety, the person giving the bond may
appeal the disapproval to the
Administrator, who will hear the
appeal. The decision of the
Administrator will be final.

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§ 19.161

Operations bond.

(a) General. Any person who intends
to establish a distilled spirits plant must
furnish an operations bond (or a unit
bond, see § 19.165) covering distilled
spirits operations at such plant on TTB
F 5110.56 with the original application
to register the distilled spirits plant.
(b) Approval of bond. The appropriate
TTB officer may require a statement,
executed under the penalty of perjury,
as to whether the principal, or any
person owning, controlling, or managing
the business of the applicant has been
convicted of, or has compromised any
offense listed in § 19.157(a)(1), or has
been convicted of any offense listed in
§ 19.157(a)(2). If the above statement
contains an affirmative answer, the
applicant must provide an additional
detailed statement describing the
circumstances surrounding each
conviction or compromise. The
appropriate TTB officer will decide
whether to approve or disapprove the
bond.
(26 U.S.C. 5173, 5551)
§ 19.162 Operations bond for distilled
spirits plant and adjacent bonded wine
cellar.

(31 U.S.C. 9304, 9306)

(26 U.S.C. 5551)

Requirements for Operations and
Withdrawal Bonds

(a) One bond satisfying two
requirements. A proprietor who
operates a bonded wine cellar that is
adjacent to the proprietor’s distilled
spirits plant may file a single operations
bond to cover the operations of the
distilled spirits plant and the bonded
wine cellar. A proprietor who files this
type of bond satisfies the requirement in
26 U.S.C. 5173 for an operations bond
covering the distilled spirits plant and
the requirement in 26 U.S.C. 5354 for a
bond covering wine and spirits
possessed at, and in transit to, the
bonded wine cellar. (The proprietor may
still have to obtain a supplemental bond
for the wine cellar to cover liabilities
resulting from deferred payment of tax.
See the second sentence of 26 U.S.C.
5354.)
(b) One bond combining terms and
coverage of separate bonds. An
operations bond filed under paragraph
(a) of this section must contain the same
terms and conditions that would be in
separate bonds for the distilled spirits
plant and for the bonded wine cellar.
The proprietor may not allocate or
divide the penal sum between the
distilled spirits plant and the bonded
wine cellar. The total amount of the
bond must be available to satisfy any
liability incurred under the terms of the
bond at either facility.

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(c) Persons qualified for a single bond.
A proprietor may choose to file a single
operations bond for a distilled spirits
plant and adjacent bonded wine cellar
only if:
(1) Such distilled spirits plant is
qualified under subpart D of this part for
the production of distilled spirits; and
(2) Such wine cellar and distilled
spirits plant are operated by the same
person (or in the case of a corporation,
by such corporation and its controlled
subsidiaries).
(26 U.S.C. 5173, 5351, 5354)
§ 19.163

Area operations bond.

(a) Area operations bond covering
multiple locations. A person who
operates more than one distilled spirits
plant within the geographical area
serviced by the National Revenue Center
may submit to TTB an area operations
bond covering the operations of any two
or more such plants and any bonded
wine cellars that are adjacent to such
plants and which otherwise could be
covered by an operations bond. Area
operations bonds filed under this
section will be in lieu of the operations
bond requirements for single distilled
spirits plants under §§ 19.161 and
19.166 and must contain the same terms
and conditions as those contained in
separate bonds filed for single distilled
spirits plants. Any person who files an
area operations bond may not allocate or
divide the penal sum of the area
operations bond between the separate
locations and the total penal sum of the
bond must be available to satisfy
liability incurred at any of the covered
locations.
(b) Area operations bonds filed by
corporations. An area operations bond
may only cover distilled spirits plants
and adjacent bonded wine cellars that
are operated by the same person. For
purposes of this section, a corporation
and its controlled subsidiaries are
considered to be one person. Further, a
controlled subsidiary is a corporation in
which more than 50 percent of the
voting power is controlled by the parent
corporation. Consequently, an area
operations bond may cover distilled
spirits plants and adjacent bonded wine
cellars operated by a parent corporation
and one or more of its controlled
subsidiaries. The name of each
corporation that operates a covered
facility must appear on the bond as a
principal, whether the operating
corporation is the parent or a subsidiary.
The bond must bear an authorized
signature for each operating corporation
appearing on the bond.
(26 U.S.C. 5173)

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§ 19.164

Federal Register / Vol. 76, No. 32 / Wednesday, February 16, 2011 / Rules and Regulations
Withdrawal bond.

(a) Requirement for a withdrawal
bond. If a person intends to withdraw
spirits from a distilled spirits plant
upon determination of the taxes due on
the spirits but before payment of the tax,
the person must provide TTB with a
withdrawal bond for the distilled spirits
plant. The withdrawal bond must
guarantee payment of any taxes due on
distilled spirits withdrawn from bonded
premises up to the amount of the bond.
Such bond will be in addition to the
operations bond, and if the distilled
spirits are withdrawn under the
withdrawal bond, the operations bond
will no longer cover liability for
payment of the tax on the spirits
withdrawn. For purposes of this section,
a person includes a corporation,
together with all of its controlled
subsidiaries, and a controlled subsidiary
has the same meaning as in § 19.163(b).
(b) One bond covering multiple
plants. A person who operates more
than one distilled spirits plant within
the geographical area serviced by the
National Revenue Center may submit to
TTB a single withdrawal bond that
covers withdrawals from all such
distilled spirits plants within that
geographic area.
(c) Penal sum of bonds—(1) Penal
sum of a bond covering a single plant.
A person who files a withdrawal bond
for a single plant must compute the
penal sum of such bond in accordance
with § 19.166. If the penal sum of such
bond is less than the maximum amount,
withdrawals from the plant may not
exceed the penal sum.
(2) Penal sum of bond covering
multiple plants. A person who files one
withdrawal bond to cover two or more

distilled spirits plants must compute the
required penal sum for each plant
individually in accordance with
§ 19.166. The penal sum of the
withdrawal bond must be equal to, or
greater than, the total of the minimum
amounts required for the individual
plants. The bond must show the amount
of coverage allocated to each individual
plant as well as the total penal sum for
all plants. If the portion of the penal
sum allocated to a particular plant is
less than the maximum amount
prescribed in § 19.166 for a single plant,
withdrawals from that plant must not
exceed the amount of the penal sum
allocated to that plant. The allocation of
the penal sum notwithstanding, the
entire penal sum of the bond must be
available to satisfy all liability for tax on
withdrawals from any and all of the
covered plants.
(26 U.S.C. 5173)
§ 19.165

Unit bonds.

(a) Unit bond covering operations and
withdrawals. If a person is otherwise
required to file bonds for both
operations at one or more distilled
spirits plants and withdrawals from one
or more distilled spirits plants, the
person may instead submit a single unit
bond that provides all of the guarantees
that would otherwise be provided by
separate operations and withdrawal
bonds. The unit bond may also provide
coverage for operations at adjacent
bonded wine cellars. For purposes of
this section, a person includes a
corporation, together with all of its
controlled subsidiaries, and a controlled
subsidiary has the same meaning as in
§ 19.163(b).

(b) Required penal sum—(1) General.
A person must determine the penal sum
for the unit bond by separately
calculating in accordance with § 19.166,
and then totaling, the amounts needed
to cover operations and withdrawals at
each individual plant covered by the
bond. The penal sum for the unit bond
must not be less than the sum of the
minimum penal sums that would be
required if each of the plants had its
own bond.
(2) Allocation between operations and
withdrawals. A unit bond must show
separately the amount of coverage
provided for operations (including
operations at each adjacent bonded
wine cellar if applicable) and for
withdrawals at each distilled spirits
plant covered by the bond.
(3) Tax liability must not exceed
allocated penal sum. If the amount of
the penal sum allocated to operations at,
or withdrawals from, a particular plant
is less than the maximum amount
prescribed in § 19.166 for a single plant,
the tax liability for operations at, or
withdrawals from, that plant must not
exceed that allocated amount.
(4) Total penal sum available for each
plant. Even when the penal sum of a
unit bond is allocated among multiple
plants, the bond must provide that the
total penal amount of the bond will be
available to satisfy any liability incurred
under the terms and conditions of the
bond at any plant covered by the bond.
(26 U.S.C. 5173)
§ 19.166

Required penal sums.

A person must determine the penal
sums for the various bonds required by
this subpart according to the following
table:
The penal sum must be:

(a) Operations bond for a single plant operating as a:

Required penal sum represents:

(1) Distiller ....................................................
(2) Warehouseman, in general ....................

The amount of tax on spirits produced during a 15-day period ...
The amount of tax on spirits and wines deposited in, stored on,
and in transit to, the bonded premises.
The amount of tax on spirits and wines deposited in, stored on,
and in transit to, the bonded premises.

$5,000
5,000

$100,000
200,000

5,000

50,000

The amount of tax on spirits produced during a period of 15
days, plus the tax on spirits and wines deposited in, stored
on, and in transit to the bonded premises.
The amount of tax on spirits produced during a 15-day period,
plus the amount of tax on spirits, denatured spirits, articles
and wines deposited in, or stored on, and in transit to the
bonded premises.
The amount of tax on spirits, denatured spirits, articles, and
wines deposited in, stored on, and in transit to, the bonded
premises.

10,000

200,000

10,000

200,000

10,000

250,000

(3) Warehouseman limited to storage of
spirits in packages to a total of not over
50,000 proof gallons.
(4) Distiller and warehouseman ...................

srobinson on DSKHWCL6B1PROD with RULES2

(5) Distiller and processor ............................

(6) Warehouseman and processor in general.

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and need not
be more
than—

Not less
than—

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The penal sum must be:
(a) Operations bond for a single plant operating as a:

Required penal sum represents:

(7) Warehouseman and processor, limited
to storage of spirits or denatured spirits
in packages to a total of not over 50,000
proof gallons, and processing of spirits or
denatured spirits so stored.
(8) Distiller, warehouseman and processor

The amount of tax on spirits, denatured spirits, articles, and
wines deposited in, stored on, and in transit to, the bonded
premises.

10,000

50,000

The amount of tax on spirits produced during a 15-day period,
plus the amount of tax on spirits, denatured spirits, articles
and wines deposited in, stored on, and in transit to, the bonded premises.
The amount required for a distiller (see paragraph (a)(1). above)
plus the amount of tax on wines and wine spirits possessed
on, and in transit to, the adjacent wine cellar.
The amount required for a distiller & warehouseman (see paragraph (a)(4). above) plus the amount of tax on wines and
wine spirits possessed on, and in transit to, the adjacent wine
cellar.
The amount required for a distiller & processor (see paragraph
(a)(5). above) plus the amount of tax on wines and wine spirits possessed on, and in transit to, the adjacent wine cellar.
The amount required for a distiller-warehouseman-processor
(see paragraph (a)(8). above) plus the amount of tax on
wines and wine spirits possessed on, and in transit to, the adjacent wine cellar.

15,000

250,000

6,000

150,000

11,000

250,000

11,000

250,000

16,000

300,000

(9) Distiller with adjacent bonded wine cellar.
(10) Distiller and warehouseman with adjacent bonded wine cellar.
(11) Distiller and processor with adjacent
bonded wine cellar.
(12) Distiller, warehouseman and processor
with adjacent bonded wine cellar.

and need not
be more
than—

Not less
than—

(b) Area operations bond for two or more plants whose combined required penal sums under paragraph (a) of this section:

Required penal sum is:

(1)
(2)
(3)
(4)
(5)

100% ..........................................................................................
$300,000 plus 70% of the amount over $300,000 .....................
$510,000 plus 50% of the amount over $600,000 .....................
$710,000 plus 35% of the amount over $1,000,000 ..................
$1,060,000 plus 25% of the amount over $2,000,000.

Do not exceed $300,000 ......................................................
Exceed $300,000 but do not exceed $600,000 ...................
Exceed $600,000 but do not exceed $1,000,000 ................
Exceed $1,000,000 but do not exceed $2,000,000 .............
Exceeds $2,000,000 .............................................................

But need not
be more than:
$300,000
510,000
710,000
1,060,000

The penal sum must be:
(c) Withdrawal bond for:

Required penal sum represents:

(1) One distilled spirits plant ............
(2) Two or more distilled spirits
plants.

The amount of tax which, at any one time, is
chargeable against such bond, but has not yet
been paid.
Sum of the penal sums for each plant calculated in
paragraph (c)(1) of this section.

(d) Unit bond for:

Required penal sum represents:

Not less than—

and need not be more
than—

$1,000 ................................

$1,000,000.

($1,000) × (number of
plants).

(Number of plants) ×
$1,000,000.

The penal sum must be:

srobinson on DSKHWCL6B1PROD with RULES2

(1) Operations at one distilled spirits plant (including any adjacent
bonded wine cellar), and withdrawals from the bonded premises of the same plant.
(2) Operations at two or more distilled spirits plants (including any
adjacent bonded wine cellars),
and withdrawals from the bonded
premises of the same plants.

An amount equal to the sum of the required penal
sums of an operations bond and a withdrawal
bond for the plant, if such bonds were obtained
separately. (See paragraphs (a) and (c)(1) in
this section.).
An amount equal to the sum of the penal sums of
an area operations bond and withdrawal bonds
needed for all of the covered plants, if such
bonds were obtained separately. (Total penal
sums of paragraphs (b) and (c)(2) in this section.).

(26 U.S.C. 5173)
§ 19.167

Increase of bond coverage.

(a) When required. If the penal sum of
a bond is less than the maximum
amount specified by § 19.166, and

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Not less than—

and need not be more
than—

$6,000 .............................

$1,300,000.

Sum of the minimum
penal sums for operations and withdrawal
bonds required for
each plant covered by
the bond.

Sum of the maximum
penal sums for area
operations bonds and
withdrawal bonds required for the plants
covered by the unit
bond.

liabilities increase to the point where
they exceed the bond coverage, the
proprietor must increase the amount of
the bond to cover the increased liability.
The proprietor must increase the bond
coverage either by replacing the existing

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bond with a new, larger bond that
covers the entire liability, or by
supplementing the existing bond with a
separate strengthening bond in
accordance with paragraph (b) of this
section.

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(b) Strengthening bonds. A
strengthening bond is a second bond
with the same surety as on the original
bond which covers the increased
liability. A strengthening bond must
show both its execution date and its
effective date. TTB will not accept a
strengthening bond if it contains any
term or condition that is a release, or
could be interpreted as a release, from
liability under any former bond, or that
limits the liability of any bond to less
than its full penal sum.
(26 U.S.C. 5173)
§ 19.168

Superseding bonds.

srobinson on DSKHWCL6B1PROD with RULES2

(a) General. In any of the
circumstances outlined in paragraphs
(b) through (d) of this section, the
proprietor must replace an existing
bond with a new bond. A new bond that
replaces another bond is called a
superseding bond.
(b) Surety company no longer
acceptable. The proprietor must file a
superseding bond if the surety on the
proprietor’s current bond becomes
insolvent or if the surety is removed
from the list of approved sureties in
Treasury Circular 570. TTB may also
require the filing of a superseding bond
if any other contingency affecting the
validity or efficiency of the bond arises.
(c) Change of control. An executor,
administrator, assignee, receiver,
trustee, or other person acting in a
fiduciary capacity, continuing or
liquidating the business of the principal
on a bond, must either provide TTB
with a superseding bond, or obtain
consent from the surety on each existing
bond when assuming control of the
business.
(d) Termination of bond by surety. If
the surety applies to terminate a bond
under § 19.171, and the proprietor
wishes to continue the activity covered
by the bond, the proprietor must file a
superseding bond that becomes effective
on or before the termination date of the
existing bond. The superseding bond
must show both its execution date and
its effective date.

superseding withdrawal bond when
required to do so under § 19.168 may
not withdraw distilled spirits from the
bonded premises on a deferred basis.
Upon lapse of the existing bond
coverage the person must pay the tax at
the time of withdrawal, except in the
case of distilled spirits withdrawn free
of tax or withdrawn without payment of
tax under 26 U.S.C. 5214 or withdrawn
exempt from tax under 26 U.S.C. 7510.
(c) Unit bond. A person who does not
provide an acceptable superseding unit
bond when required to do so under
§ 19.168 must immediately discontinue
the business or distilled spirits
operations to which the lapsed bond
coverage relates. Upon lapse of the
existing bond coverage the person must
also pay the tax at the time of
withdrawal, except in the case of
distilled spirits withdrawn free of tax or
withdrawn without payment of tax
under 26 U.S.C. 5214 or withdrawn
exempt from tax under 26 U.S.C. 7510.
(26 U.S.C. 5173, 5175, 5176)
§ 19.170

Liability under operations bonds,
withdrawal bonds, and unit bonds may
be terminated for future withdrawals,
future production, or future deposits as
set forth below:
(a) On application by the surety. A
surety may terminate a bond by filing a
notice as provided in § 19.171;
(b) By replacement of the bond. A
principal may terminate an existing
bond by replacing it with a superseding
bond approved by TTB;
(c) By discontinuing withdrawals. A
principal may terminate a withdrawal
bond by notifying TTB that the
principal has stopped making
withdrawals covered by the bond, if the
bond was filed solely as a withdrawal
bond; or
(d) By discontinuing the business. A
principal may terminate a bond by
notifying TTB that the principal has
discontinued business.
(26 U.S.C. 5173)
§ 19.171
liability.

§ 19.169 Effect of failure to furnish a
superseding bond.

(a) Notice to principal. A surety on a
bond may, at any time, notify the
principal in writing that the surety
desires to be relieved of liability under
the bond.
(b) Notice to TTB. A surety on a bond
may, at any time, notify the appropriate
TTB officer in writing that the surety
desires to be relieved of liability under
the bond. The notice must specify the
date after which the surety desires to be
relieved of liability. In the case of a
withdrawal bond, the date specified in
the notice must be at least ten days after

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(26 U.S.C. 5173, 5175, 5176)
§ 19.172
liability.

Termination of bonds.

(26 U.S.C. 5173, 5175, 5176, 5551)

(a) Operations bond. A person may
not operate a distilled spirits plant
without an operations bond. If a person
does not submit an acceptable
superseding operations bond when
required to do so under § 19.168, the
person must immediately discontinue
the activities to which the lapsed bond
coverage relates upon lapse of the
existing bond coverage.
(b) Withdrawal bond. A person who
does not submit an acceptable

the notice is received by the appropriate
TTB officer. In the case of an operations
bond or unit bond, the date specified in
the notice must be at least 90 days after
the notice is received by the appropriate
TTB officer. When a surety files a
termination notice with TTB, the surety
must include either an
acknowledgement from the principal
that the principal is aware that the
surety is terminating the bond or proof
that the surety has served the principal
with notice of its intent to terminate the
bond.
(c) Effect of notice. The bond coverage
will end as of close of business on the
date specified in the notice, provided
the surety timely filed a proper and
complete termination notice, and the
surety does not withdraw its
termination notice in writing prior to
the termination date. The surety will be
released from future liability under the
bond to the extent set forth in § 19.172.
Relief of surety from bond

A surety that has provided proper
notice under § 19.171 will be relieved
from liability under the bond in
question as set forth below:
(a) Operations or unit bond. When a
superseding bond is submitted, the
surety will be relieved of future liability
related to production and deposits that
take place after the effective date of the
superseding bond. However, the surety
remains liable for the tax on all distilled
spirits or wines produced, or for other
liabilities incurred, during the term of
the bond. Further, if a superseding bond
is not submitted, the surety will remain
liable under the bond for all spirits or
wines that are on hand or in transit to
the bonded premises or bonded wine
cellar on the date specified in the
notice. The liability of the surety will
continue until all such spirits or wines
have been lawfully disposed of, or until
a new bond has been submitted by the
principal covering the spirits or wine.
(b) Withdrawal or unit bonds. The
surety will be relieved from liability for
withdrawals made after the date
specified in the notice, or upon the
effective date of a new bond if one is
given.
(26 U.S.C. 5173, 5176)
§ 19.173

Release of pledged securities.

Securities that are pledged and
deposited with TTB under § 19.154 will
only be released by TTB in accordance
with the provisions of 31 CFR Part 225,
Acceptance of Bonds Secured by
Government Obligations in Lieu of
Bonds with Sureties. The appropriate
TTB officer will not release pledged

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securities prior to termination of the
liability under the bond for which they
were pledged. When the appropriate
TTB officer is satisfied that the pledged
securities may be released, the official
will set a date or dates on which a part
or all of the securities may be released.
At any time prior to the release of the
securities, the appropriate TTB officer
may extend the date of release for any
additional length of time deemed
necessary.

on scales and the contents of the tank
must be determined by weight. The
scale tank also must be equipped with
a suitable device so that the volume of
the contents can be quickly and
accurately determined.
(b) The requirement to mount tanks
on scales does not apply to tanks having
a capacity of 55 gallons or less. Such
tanks may be moved onto an accurately
calibrated scale when a tax
determination gauge needs to be made.

(31 U.S.C. 9301, 9303)

(26 U.S.C. 5006, 5204, 5505)

Subpart G—Construction, Equipment,
and Security Requirements

§ 19.184

§ 19.181

General.

The proprietor of a distilled spirits
plant must apply certain construction,
equipment, and security standards at
the plant. These standards are intended
to ensure the protection of untaxed
spirits at the plant and to ensure proper
measurement and accountability for
products on bonded premises. This
subpart prescribes those standards.
(26 U.S.C. 5178)

Tank Requirements
§ 19.182

Tanks—general requirements.

srobinson on DSKHWCL6B1PROD with RULES2

The proprietor of a distilled spirits
plant must ensure that all tanks on the
premises used to hold spirits, denatured
spirits, or wines are:
(a) Used for the purpose listed on the
application and plant registration;
(b) Equipped with accurate means for
measuring their contents. If the means
for measurement is not a permanent
fixture on the tank, the proprietor must
equip the tank with a fixed device for
measuring the contents. However, tanks
having a capacity of less than 101
gallons are not required to have
permanent gauge devices;
(c) Accurately calibrated if used for
any of the gauges described in this part.
Further, if tanks or their gauging devices
are moved in any manner subsequent to
original calibration, the tanks shall not
be used until recalibrated;
(d) Accessible through walkways,
landings, and stairs that permit access to
all parts of the tank;
(e) Equipped or situated so that they
may be locked or secured; and
(f) Constructed to prevent access to
the spirits or wines through vents, flame
arresters or other safety devices.
(26 U.S.C. 5006, 5204, 5505)
§ 19.183

Scale tanks.

(a) Except as otherwise provided in
paragraph (b) of this section, if the
proprietor uses a tank to determine the
distilled spirits tax imposed by 26
U.S.C. 5001, the tank must be mounted

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Scale tank minimum graduations.

(a) The beams or dials on scale tanks
used for tax determination must have
minimum graduations not greater than
the following:
Quantity to be weighed
Not exceeding 2,000 pounds .....
Between 2,000 and 6,000
pounds.
Between 6,000 and 20,000
pounds.
Between 20,000 and 50,000
pounds.
Over 50,000 pounds ...................

Minimum
graduation
⁄ pound
1 pound
12

2 pounds
5 pounds
10 pounds

(b) For scales having a capacity
greater than 2,000 pounds, the
minimum quantity which may be
entered onto the weighing tank scale for
gauging for tax determination will be
the greater of:
(1) 1,000 times the minimum
graduation of the scale, or
(2) 5 percent of the total capacity of
the weighing tank scale.
(c) The weighing of lesser quantities
for determination of tax may be
authorized by the appropriate TTB
officer where the beam of the scale is
calibrated in 1⁄2 pound or 1 pound
graduations and it is found by actual
test that the scales are accurate at each
graduation.
(d) Lots of spirits weighing 1,000
pounds or less shall be weighed on
scales having 1⁄2 pound graduations.
(26 U.S.C. 5006, 5204, 5505)
§ 19.185

Testing scale tanks for accuracy.

(a) A proprietor who uses a scale tank
for tax determination must ensure the
accuracy of the scale through periodic
testing. Testing of the scale must be
conducted at least every 6 months and
whenever the scale is adjusted or
repaired.
(b) A proprietor also must test, at least
once a month, the gallonage represented
to be in a scale tank against the
gallonage indicated by volumetric
determination of the contents of the
tank. However, if the scale is not used
during a month, it is only necessary to

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9115

verify against the volumetric
determination when the scale is next
used. The proprietor must make the
volumetric determination in accordance
part 30 of this chapter. If the variation
exceeds 0.5 percent of the quantity
shown in the tank, the proprietor must
take appropriate action to verify the
accuracy of the scale.
(c) If the appropriate TTB officer
determines that a scale may be
inaccurate, the proprietor must test the
accuracy of the scale.
(26 U.S.C. 5006, 5204, 5505)

Package Scale and Pipeline
Requirements
§ 19.186

Package scales.

Proprietors must ensure that scales
used to weigh packages are tested at
least every 6 months and whenever they
are adjusted or repaired. However, if a
scale is not used during a 6-month
period, it is only necessary to test the
scale prior to its next use. Scales used
to weigh packages that hold 10 wine
gallons or less must indicate weight in
ounces or hundredths of a pound.
(26 U.S.C. 5204)
§ 19.187

Pipelines.

All pipelines, including flexible
hoses, that are used to transfer spirits,
denatured spirits, articles, and wines
must be constructed, arranged, and
secured so as to ensure protection of the
revenue and permit ready examination.
The appropriate TTB officer may
approve pipelines that cannot be readily
examined if they pose no jeopardy to
the revenue.
(26 U.S.C. 5178)

Measuring and Proofing Equipment
Requirements
§ 19.188 Measuring devices and proofing
instruments.

(a) General. A proprietor of a distilled
spirits plant must have accurate
instruments and equipment at the plant
for determining the proof and volume of
spirits.
(b) Instruments. The hydrometers and
thermometers that a proprietor uses to
gauge spirits must show subdivisions or
graduations of proof and temperature as
specified in part 30 of this chapter.
Proprietors must frequently test their
hydrometers and thermometers to
ensure their accuracy. If an instrument
appears to be in error, the proprietor
may not use the instrument until it is
tested and certified as accurate by the
manufacturer or another qualified
person.
(c) Meters. A proprietor may use an
accurate mass flow meter to measure the

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volume of bulk spirits. A mass flow
meter used for tax determination of bulk
spirits must be certified by the
manufacturer or other qualified person
as accurate within a tolerance of plus or
minus 0.1 percent. A mass flow meter
used for all other required gauges of
bulk spirits must be certified by the
manufacturer or other qualified person
as accurate within a tolerance of plus or
minus 0.5 percent. The proprietor must
make corrections for the temperature of
the spirits being measured in
conjunction with the volumetric
measurement of spirits by mass flow
meter. The proprietor must also test
mass flow meters at least every 6
months to ensure that they are accurate
within the required tolerances.
(26 U.S.C. 5204)

Other Plant Requirements
§ 19.189 Identification of structures, areas,
apparatus, and equipment.

(a) Buildings. The proprietor must
mark each building at a distilled spirits
plant where spirits, denatured spirits,
articles, wine, or distilling or fermenting
materials are kept with a distinguishing
number or letter.
(b) Tanks. The proprietor must mark
each tank or receptacle for spirits,
denatured spirits, or wine to show a
unique serial number and capacity.
(c) Stills. The proprietor must number
and mark to show the use of each still,
fermenter, cooker, and yeast tank.
(d) Other major equipment. The
proprietor must identify the use of all
other major equipment used for
processing or containing spirits,
denatured spirits, wine, distilling or
fermenting material, and all other tanks,
unless the intended purpose is readily
apparent.
(26 U.S.C. 5178)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.190

Office facilities for TTB use.

(a) When required by the appropriate
TTB officer, the proprietor must provide
a secure cabinet equipped for locking
for use by TTB.
(b) If one or more TTB officers are
assigned to a distilled spirits plant to
supervise operations on a continuing
basis, the proprietor must provide a
suitable office at the plant for the
exclusive use of the TTB officers in
performing their duties. The appropriate
TTB officer will determine if the office
facilities are suitable.
(26 U.S.C. 5178)
§ 19.191

Signs.

The proprietor must place and keep a
conspicuous sign on the outside of the
place of business showing the name of

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the proprietor and the business, or
businesses, in which engaged.
(26 U.S.C. 5180)
§ 19.192

Security.

(a) General. The proprietor of a
distilled spirits plant must provide
adequate security measures at the plant
in order to protect the revenue.
(b) Buildings. The buildings, rooms,
and partitions must be constructed of
substantial materials. Doors, windows,
or any other openings to the building
must be secured or fastened during
times when distilled spirits plant
operations are not being conducted.
(c) Outdoor tanks. Outdoor tanks
containing spirits, denatured spirits, or
wine must be individually locked or
locked within an enclosure when they
are not in use.
(d) Indoor tanks. Indoor tanks
containing spirits, denatured spirits, or
wines, or the rooms or buildings in
which such tanks are housed, must be
equipped so that they may be secured.
(e) Approved locks. Locks meeting the
specifications prescribed in paragraph
(f) of this section must be used to
secure:
(1) Outdoor tanks used to store spirits,
or an enclosure around such tanks;
(2) Indoor tanks used to store spirits,
or the door from which access may be
gained from the outside to the rooms or
buildings in which such tanks are
housed; and
(3) Any doors from which access may
be gained from the outside to rooms or
buildings containing spirits stored in
portable bulk containers.
(f) Specifications for locks. Locks
meeting the specifications in this
section or other locks that have been
approved for use by the appropriate
TTB officer are approved locks for the
purpose of 26 U.S.C. 5682.
(1) General. The following are the
specifications for approved locks:
(i) A corresponding serial number on
the lock and on the key, except for
master key locking systems;
(ii) A case hardened shackle at least
one-fourth inch in diameter, with heel
and toe locking;
(iii) A body width of at least 2 inches;
(iv) A captured key feature (the key
may not be removed while the shackle
is unlocked);
(v) A tumbler with at least 5 pins; and
(vi) A lock and key containing no
bitting data.
(2) Other approved locks. If the
proprietor wishes to use locks of an
unusual design, which do not meet the
specifications in paragraph (f)(1) of this
section, the proprietor must submit an
example or prototype of the lock to the
appropriate TTB officer, with a request

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that the lock be approved for use. The
appropriate TTB officer will evaluate
the lock and determine whether the lock
should be approved for use.
(3) Master key systems. Master key
locking systems using approved locks
may be used at the option of the
proprietor.
(g) Additional security. Whenever the
appropriate TTB officer finds that
construction, arrangement, equipment,
or protection is inadequate, additional
security (such as fences, flood lights,
alarm systems, and guard services) must
be provided or changes in construction,
arrangement, or equipment must be
made to the extent necessary to protect
the revenue.
(26 U.S.C. 5178, 5202)
§ 19.193

Breaking Government locks.

TTB may assign TTB officers to a
distilled spirits plant and utilize
controls, such as Government locks, if
TTB determines that such measures are
necessary to effectively supervise
operations at the plant. The proprietor
may not remove such Government locks
without the authorization of the
appropriate TTB officer, except when a
person or property is in imminent
danger from a disaster or other
emergency. If the proprietor must
remove Government locks under such
circumstances, the proprietor must
ensure that security measures are taken
to prevent illegal removal of spirits. In
addition, the proprietor must notify the
appropriate TTB officer as soon as
possible of the action taken and within
5 days of removing the locks submit a
written report describing the emergency
and the action taken.
(26 U.S.C. 5202)

Subpart H—Dealer Registration and
Recordkeeping
§ 19.201

Definitions.

For purposes of this subpart, the
following terms have the meanings
indicated:
Dealer. A person that sells, or offers
for sale, any alcohol product (distilled
spirits, wines, and/or beer) fit for
beverage use.
Retail dealer in liquors. A dealer that
sells, or offers for sale, distilled spirits,
wines, or beer to any person other than
a dealer.
Wholesale dealer in liquors. A dealer
that sells, or offers for sale, distilled
spirits, wines, or beer to another dealer.
(26 U.S.C. 5121, 5122)
§ 19.202

Dealer registration.

Every proprietor that sells or offers for
sale any alcoholic product (distilled
spirits, wines, or beer) fit for beverage

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use must register as a dealer under part
31 of this chapter. However, the
proprietor’s application for registration
of a distilled spirits plant filed under
subpart D of this part, and approval of
that application by the appropriate TTB
officer, will constitute the proprietor’s
registration as a dealer at the distilled
spirits plant. Every proprietor registered
as a dealer under this subpart will be
classified as a wholesale dealer in
liquors (see § 31.32 of this chapter) and
as such may also operate as a retail
dealer in liquors without additional
registration. Registration covers all sales
from the same location, including sales
of wine, beer, or other proprietors’
spirits. A proprietor who conducts
business as a dealer at a location other
than the distilled spirits plant must
register and keep records in accordance
with part 31 of this chapter.
(26 U.S.C. 5124)
§ 19.203

Amending the dealer registration.

Every proprietor registered as a dealer
under this subpart must maintain a
current and accurate distilled spirits
plant registration. Whenever there is a
change to any of the information
provided in the proprietor’s approved
notice of registration, the proprietor
must amend the registration within the
time period specified in subpart E of
this part. An amendment of the
proprietor’s distilled spirits plant
registration will also serve as an
amendment of the proprietor’s dealer
registration under this subpart. The
proprietor’s dealer registration will also
terminate when distilled spirits plant
operations under the notice of
registration terminate.
(26 U.S.C. 5124)
§ 19.204

Dealer records.

srobinson on DSKHWCL6B1PROD with RULES2

Every dealer is required to maintain
records of transactions. Distilled spirits
transactions that appear in the records
required by subpart V of this part will
meet the proprietor’s recordkeeping
requirements as a dealer. For other
transactions not covered in the distilled
spirits plant records, such as retail sales
of wine or beer in a restaurant at the
distilled spirits plant, or operations as a
wholesale dealer in wine or beer, the
proprietor must keep the records
specified for dealers in part 31 of this
chapter.
(26 U.S.C. 5121, 5122, 5124)

Subpart I—Distilled Spirits Taxes
§ 19.221

Scope.

This subpart covers the taxation of
distilled spirits and the procedures for
payment of taxes by proprietors of
distilled spirits plants. Issues covered in

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this subpart include tax rates, liability
for tax, tax determination, return
periods, filing of tax returns, forms of
payment, electronic fund transfers, and
credits under 26 U.S.C. 5010.
(26 U.S.C. 5001)

Basic Provisions of Tax Law Affecting
Spirits
§ 19.222

Basic tax law provisions.

(a) Distilled spirits tax. 26 U.S.C. 5001
and 7652 impose a tax on all distilled
spirits produced in, or imported into or
brought into, the United States at the
rate prescribed in section 5001 on each
proof gallon and a proportionate tax at
a like rate on all fractional parts of a
proof gallon. For the current rate of tax
see 26 U.S.C. 5001.
(b) Products containing distilled
spirits. All products of distillation, by
whatever name known, which contain
distilled spirits, on which the tax
imposed by law has not been paid, and
any alcoholic ingredient added to such
products, are considered and taxed as
distilled spirits.
(c) Wines with high alcohol content.
Wines containing more than 24 percent
of alcohol by volume are taxed as
distilled spirits.
(d) Attachment of the tax. Under 26
U.S.C. 5001(b), the tax attaches to
distilled spirits as soon as the substance
comes into existence as such, whether it
be subsequently separated as pure or
impure spirits, or be immediately, or at
any subsequent time, transferred into
any other substance, either in the
process of original production, or by any
subsequent process.
(e) Alcohol tax is a lien on spirits.
Under 26 U.S.C. 5004, the tax becomes
a first lien on the distilled spirits from
the time the spirits come into existence
as such. The conditions under which
the first lien terminates are described in
26 U.S.C. 5004.
(f) Tax credit for eligible wines and
eligible flavors. Under 26 U.S.C. 5010, a
credit against the tax imposed on
distilled spirits by 26 U.S.C. 5001 or
7652 on each proof gallon of alcohol
derived from eligible wine, or from
eligible flavors which do not exceed 2.5
percent of the finished product on a
proof gallon basis is allowed at the time
the tax is payable as if it constituted a
reduction in the rate of tax.
(g) Effective tax rates. Where credit
against the tax is desired, the proprietor
liable for the tax must establish an
effective tax rate in accordance with
§ 19.246. The effective tax rate
established will be applied to each
withdrawal or other taxable disposition
of the distilled spirits.
(26 U.S.C. 5001, 5004, 5010, 7652)

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§ 19.223

9117

Persons liable for tax.

(a) Distilling. Under 26 U.S.C. 5005,
the distiller of spirits is liable for the tax
and each proprietor or possessor of, and
person in any manner interested in the
use of, any still, distilling apparatus, or
distillery, shall be jointly and severally
liable for the tax on distilled spirits
produced. However, a person, not an
officer or director of a corporate
proprietor, owning or having the right of
control of not more than 10 percent of
any class of stock of that proprietor, is
not liable by reason of the stock
ownership or control. Persons
transferring spirits in bond are relieved
of tax liability if:
(1) The proprietors of transferring and
receiving distilled spirits plant premises
are independent of each other and
neither has a proprietary interest,
directly or indirectly, in the business of
the other, and
(2) No person liable for the tax on
transferred spirits retains any interest in
the spirits.
(b) Storage on bonded premises.
Under 26 U.S.C. 5005(c) each person
operating bonded premises will be
liable for the tax on all spirits while the
spirits are stored on the premises, and
on all spirits that are in transit to the
premises from the time of removal from
the transferor’s bonded premises,
pursuant to an approved application.
Liability for the tax continues until the
spirits are transferred or withdrawn
from bonded premises as authorized by
law, or until the liability for tax is
relieved under the provisions of 26
U.S.C. 5008(a). Claims for relief from
liability for spirits lost are covered in
subpart J of this part. Voluntary
destruction of spirits in bond is covered
in subpart Q of this part.
(c) Withdrawals without payment of
tax. Under 26 U.S.C. 5005(e), any
person who withdraws spirits from the
bonded premises of a plant without
payment of tax, as provided in 26 U.S.C.
5214, will be liable for the tax on the
spirits from the time of withdrawal. The
person will be relieved of any liability
at the time the spirits are exported,
deposited in a foreign trade zone, used
in production of wine, deposited in a
customs bonded warehouse, laden as
supplies upon or used in the
maintenance or repair of certain vessels
or aircraft, or used for certain research,
development or testing, as provided by
law.
(d) Withdrawals free of tax. Persons
liable for tax under paragraph (a) of this
section, are relieved of the liability on
spirits withdrawn from bonded
premises free of tax under this part, at
the time the spirits are withdrawn.

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(e) Withdrawn from customs custody
without payment of tax. Under 26
U.S.C. 5232(a) when imported distilled
spirits in bulk containers are withdrawn
from customs custody and transferred to
the bonded premises of a distilled
spirits plant without payment of the tax
imposed on imported distilled spirits by
26 U.S.C. 5001, the person operating the
bonded premises of the distilled spirits
plant to which spirits are transferred
will become liable for the tax on the
spirits upon their release from customs
custody, and the importer will
thereupon be relieved of liability for the
tax.
(26 U.S.C. 5005, 5066, 5232)

Before withdrawing distilled spirits
from bond, the proprietor must gauge
the spirits and determine the tax that is
due on the spirits. This requirement
applies to all spirits on which the tax
will be either prepaid or deferred.
(26 U.S.C. 5006, 5204, 5213)

srobinson on DSKHWCL6B1PROD with RULES2

Gauges for tax determination.

There are several acceptable methods
that a proprietor may use when gauging
spirits for tax determination.
(a) Cases. If spirits are withdrawn
from the bonded premises in cases, the
proprietor must gauge the spirits based
on the contents of the cases. The
proprietor will determine the number of
proof gallons of spirits in cases as
provided in part 30 of this chapter. The
proprietor must convert metric units of
measure to U.S. units according to
§ 19.579.
(b) Packages. If spirits are withdrawn
from the bonded premises in packages
on the basis of an individual package
gauge, each package must be gauged
unless the tax is to be determined on the
production or filling gauge. When
gauging the packages, the proprietor
must prepare a package gauge record as
specified in § 19.619 and attach it to the
record of tax determination that is
required by § 19.611.
(c) Tanks. The proprietor must use
weight, or an accurate mass flow meter
and proof as prescribed in §§ 19.284 and
19.285, to gauge bulk spirits in tanks
that are to be withdrawn on
determination of tax. The proprietor
must record the elements of the gauge
on the record of tax determination. As
an alternative, the proprietor may record
gauge elements on a separate gauge
record, and attach the gauge record to
the record of tax determination.

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(26 U.S.C. 5213)

§ 19.229 Deferred payment and
prepayment of taxes.

§ 19.225 Requirement to gauge and tax
determine spirits.

(26 U.S.C. 5204, 5213)

Determination of the tax.

After gauging, the proprietor must
determine the tax on the spirits to be
removed from the bonded premises. The
proprietor must use the tax rate
prescribed in 26 U.S.C. 5001 to calculate
the tax, unless the product is eligible for
a reduced effective tax rate as provided
in 26 U.S.C. 5010. If the product is
eligible for a reduced effective tax rate,
the proprietor may use that rate to
determine the tax. The proprietor must
record the results of each tax
determination in a record of tax
determination as required by § 19.611.
Rules for Deferred Payment and
Prepayment of Taxes

Requirements for Gauging and Tax
Determination

§ 19.226

§ 19.227

There are two basic methods of
paying the tax on distilled spirits
withdrawn from bonded premises:
Deferred payment and prepayment.
(a) Deferred payment. Under the
deferred payment system, the proprietor
may withdraw spirits from bond after
tax determination but before payment of
tax. The excise tax paid is based on the
amount of spirits removed from bond
during each return period. In order to
pay taxes under the deferral system, the
proprietor must file a withdrawal bond
or unit bond. For detailed information
regarding return periods and filing
requirements under the deferred system,
see §§ 19.234, 19.235 and 19.236.
(b) Prepayment. Under the
prepayment system, the proprietor must
pay the distilled spirits tax after tax
determination but before withdrawal of
the spirits from bonded premises. See
§ 19.230 for conditions that require
prepayment of taxes.
(26 U.S.C. 5061)
§ 19.230 Conditions requiring prepayment
of taxes.

Under certain conditions, the
proprietor must prepay the distilled
spirits tax required, using TTB F
5000.24, Excise Tax Return, before
removing spirits from the bonded
premises. Those conditions are:
(a) When the proprietor has not given
TTB a withdrawal bond or a unit bond;
(b) When the proprietor has posted a
withdrawal or a unit bond, but has
defaulted on any payment of tax under
this section, and the tax payment
remains in default. The proprietor must
continue to prepay the tax until the
appropriate TTB officer decides that
allowing the proprietor to make deferred
tax payments again will not jeopardize
the revenue;

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(c) When the proprietor receives a
notice from the appropriate TTB officer
that the tax must be prepaid. Such
notice may be issued to the proprietor
if—
(1) The proprietor fails to maintain
records required by this part to
substantiate the correctness of its tax
returns; or
(2) The proprietor fails to comply
with any other provision of this part; or
(d) When the proprietor’s withdrawal
bond, or the withdrawal coverage under
its unit bond, is for less than the
maximum penal sum. The proprietor
must prepay the tax to the extent that a
withdrawal would cause the
outstanding tax liability to exceed the
limits of coverage under the bond. See
also § 19.231 if the bond is for less than
the maximum penal sum.
(26 U.S.C. 5213, 5555)
§ 19.231

Accounting for bond coverage.

When a proprietor furnishes a
withdrawal bond or a unit bond to cover
the tax on spirits withdrawn on
determination of tax, and such bond is
in less than the maximum penal sum,
the proprietor must maintain an account
for the bond to ensure that outstanding
tax liabilities do not exceed the penal
sum of the bond. The account must
charge the bond for the amount of
liability incurred on each withdrawal on
determination of tax and, credit the
bond for each payment of tax made with
a return and for authorized credits taken
on a return. If the balance of the bond
account reaches zero, the proprietor
may no longer defer tax payments for
taxable withdrawals. Where the bond is
for less than the maximum penal sum
and has been allocated among two or
more plants, the proprietor must
maintain an account at each plant for
that part of the penal sum allocated to
each plant.
(26 U.S.C. 5173)

Requirements for Filing Tax Returns
§ 19.233

Filing prepayment returns.

When the proprietor is required to
prepay the tax prior to withdrawal of
spirits from the bonded premises, the
proprietor must prepay the tax with a
return on form TTB F 5000.24, Excise
Tax Return, and include the remittance
with the return. The proprietor may
prepay tax for one or more withdrawals
with a single prepayment return on TTB
F 5000.24. The proprietor will note the
serial number of the TTB F 5000.24, and
the date and time of the prepayment on
the individual record of tax
determination. The proprietor may not
remove spirits from the bonded
premises until the tax has been paid.

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(26 U.S.C. 5061)
§ 19.234

Filing deferred payment returns.

A proprietor must pay the tax on
spirits withdrawn from bond for
deferred payment of tax by filing a
return on form TTB F 5000.24, Excise
Tax Return. The proprietor must
execute and file TTB F 5000.24 for each
return period, even when no tax is due
for a particular return period. The
proprietor of each bonded premises
must pay the full amount of distilled
spirits tax determined for all spirits
released for withdrawal from the
bonded premises on determination of
tax during the period covered by the
return (except spirits on which tax has
been prepaid).
(26 U.S.C. 5061)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.235 Deferred payment return
periods—quarterly and semimonthly.

(a) Two types of return periods. The
IRC provides for two different return
periods for those taxpayers who pay
their taxes on a deferred basis: Quarterly
and semimonthly. Small taxpayers that
meet certain criteria are eligible to use
quarterly return periods and pay their
taxes on a quarterly basis. Larger
taxpayers must use semimonthly return
periods and pay their taxes on a
semimonthly basis.
(b) Quarterly return period. Effective
January 1, 2006, a taxpayer that
reasonably expects to be liable for not
more than $50,000 in taxes with respect
to distilled spirits imposed by 26 U.S.C.
5001 and 7652 for the current calendar
year, and that was liable for not more
than $50,000 in such taxes in the
preceding calendar year, may choose to
use a quarterly return period. However,
the taxpayer may not use the quarterly
return period procedure for any portion
of the calendar year following the first
date on which the aggregate amount of
tax due from the taxpayer during the
calendar year exceeds $50,000, and any
tax which has not been paid on that date
will be due on the 14th day after the last
day of the semimonthly period in which
that date occurs. The following
additional rules apply to the quarterly
return period procedure under this
section:
(1) A taxpayer with multiple locations
must combine the distilled spirits tax
liability for all locations to determine
eligibility for the quarterly return
procedure;
(2) A taxpayer that has both domestic
operations and import transactions must
combine the distilled spirits tax liability
on the domestic operations and the
imports to determine eligibility for the
quarterly return procedure;

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(3) The controlled group rules of 26
U.S.C. 5061(e), which concern treatment
of controlled groups as one taxpayer, do
not apply for purposes of determining
eligibility for the quarterly return
procedure. However, a taxpayer that is
eligible for the quarterly return
procedure, and that is a member of a
controlled group that owes $5 million or
more in distilled spirits excise taxes per
year, is required to pay taxes by
electronic fund transfer (EFT). Quarterly
payments via EFT must be transmitted
in accordance with section 5061(e);
(4) A new taxpayer is eligible to file
quarterly returns in the first year of
business simply if the taxpayer
reasonably expects to be liable for not
more than $50,000 in distilled spirits
taxes during that calendar year; and
(5) If a taxpayer filing quarterly
exceeds $50,000 in tax liability during
a taxable year and therefore must revert
to the semimonthly return procedure,
that taxpayer may resume quarterly
payments only after a full calendar year
has passed during which the taxpayer’s
liability did not exceed $50,000.
(c) Semimonthly return period. Except
in the case of a taxpayer that qualifies
for, and chooses to use, quarterly return
periods as provided in paragraph (b) of
this section, all other taxpayers must
use semimonthly return periods for
deferred payment of tax. The
semimonthly return periods will run
from the 1st day through the 15th day
of each month, and from the 16th day
through the last day of each month,
except as otherwise provided in
§ 19.237.
(d) Definitions. For purposes of this
section, the following terms have the
meanings indicated:
Reasonably expects. When used with
reference to a taxpayer, reasonably
expects means that there is no existing
or anticipated circumstances known to
the taxpayer (such as an increase in
production capacity) that would cause
the taxpayer’s tax liability to exceed the
prescribed limit.
Taxpayer. A taxpayer is an
individual, corporation, partnership, or
other entity that is assigned a single
Employer Identification Number (EIN)
as defined in 26 CFR 301.7702.12.
(26 U.S.C. 5061)
§ 19.236

Due dates for returns.

(a) Semimonthly returns. Except when
payment is pursuant to a quarterly
return as provided in paragraph (b) of
this section, where the proprietor of
bonded premises has withdrawn spirits
from such premises on determination
and before payment of tax, the
proprietor must file a semimonthly tax
return covering such spirits on form

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9119

TTB F 5000.24, Excise Tax Return, and
remittance, as required by § 19.238,
§ 19.239 or § 19.240, not later than the
14th day after the last day of the return
period, except for returns filed for
September as provided in § 19.237. If
the due date falls on a Saturday,
Sunday, or legal holiday, the return and
payment are due on the immediately
preceding day that is not a Saturday,
Sunday, or legal holiday, except as
provided in § 19.237(c).
(b) Quarterly returns. Where the
proprietor of bonded premises has
withdrawn spirits from such premises
on determination and before payment of
tax, and the proprietor uses quarterly
return periods as provided in
§ 19.235(b), the proprietor must file a
quarterly return covering such spirits on
TTB F 5000.24, and remittance, as
required by § 19.238, § 19.239, or
§ 19.240, not later than the 14th day
after the last day of the quarterly return
period. If the due date falls on a
Saturday, Sunday, or legal holiday, the
return and remittance will be due on the
immediately preceding day which is not
a Saturday, Sunday, or legal holiday.
(26 U.S.C. 5061)
§ 19.237 Special rule for semimonthly
filers for the month of September.

(a) Returns required for September. If
the proprietor is required to file
semimonthly returns as provided in
§ 19.235(c), there are three return
periods during the month of September.
The first semimonthly return period is
from the 1st day through the 15th day
of the month and the return with
remittance is due by the 29th of
September. The second semimonthly
return period for the month of
September is divided into two payment
periods. The exact dates of these periods
depend upon whether the proprietor
remits tax payments by EFT.
(1) Taxpayments by EFT. If the
proprietor remits tax payments by EFT,
the two payment periods for the second
half of September are from the 16th
through the 26th, and from the 27th
through the 30th. The return on form
TTB F 5000.24 and remittance for the
period September 16–26 is due on or
before September 29. The return on TTB
F 5000.24 and remittance for the period
September 27–30 is due no later than
October 14.
(2) Taxpayment other than by EFT. If
the proprietor is not required to pay the
distilled spirits tax by EFT, the two
payment periods for the second half of
September are from the 16th through the
25th and from the 26th through the
30th. The return on TTB F 5000.24 and
remittance for the period September
16–25 is due on or before September 28.

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The return on TTB F5000.24 and
remittance for the period September
26–30 is due no later than October 14.
(b) Amount of payment: Safe harbor
rule. (1) EFT Taxpayers. The proprietor
satisfies the requirements of paragraph
(a)(1) of this section if by September 29
the amount paid is at least elevenfifteenths (73.3 percent) of the tax
liability incurred in the semimonthly
return period for September 1–15, and
the proprietor also pays any
underpayment of tax resulting from the
use of the safe harbor rule on or before
October 14.
(2) Other than EFT taxpayers. The
proprietor satisfies the requirements of
paragraph (a)(2) of this section if the
amount paid by September 28 is at least
two-thirds (66.7 percent) of the tax
liability incurred in the semimonthly
return period for September 1–15, and
the proprietor also pays any
underpayment of tax resulting from the
use of the safe harbor rule on or before
October 14.
(c) Weekends and holidays. If the
required tax payment due date for the
return period September 16–25 (nonEFT taxpayers) or September 16–26
(EFT taxpayers), falls on a Saturday or
legal holiday, the proprietor’s return
and remittance are due on the
immediately preceding day. If the
required tax payment due date falls on
a Sunday, the proprietor’s return and
payment are due on the immediately
following day.
(d)
Example. Payment of tax for the month of
September: (1) Facts. X, a proprietor required
to pay taxes by electronic fund transfer,
incurred tax liability in the amount of
$30,000 for the first semimonthly period of
September. For the period September 16–26,
X incurred tax liability in the amount of
$45,000, and for the period September 27–30,
X incurred tax liability in the amount of
$2,000.
(2) Payment requirement. X’s payment of
tax in the amount of $30,000 for the first
semimonthly period of September is due no
later than September 29. X’s payment of tax
for the period September 16–26 is also due
no later than September 29. X may use the
safe harbor rule to determine the amount of
payment due for the period of September
16–26. Under the safe harbor rule, X’s
payment of tax must equal $22,000.00,
eleven-fifteenths of the tax liability incurred
during the first semimonthly period of
September. Additionally, X’s payment of tax
in the amount of $2,000 for the period
September 27–30 must be paid no later than
October 14. X must also pay the
underpayment of tax, $23,000.00, for the
period September 16–26, no later than
October 14.
(26 U.S.C. 5061)

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§ 19.238

Payment by mail or courier.

(a) Payment by mail. The proprietor
must file each return on form TTBF
5000.24 in accordance with the
instructions printed on the form. If the
proprietor submits the return by U.S.
mail, the official postmark of the U.S.
Postal Service stamped on the cover in
which the return is mailed will be
considered to be the date of delivery of
the return and also the remittance, if
included. If the postmark on the cover
is illegible, the proprietor will bear the
burden of proving when the postmark
was made. If the proprietor sends the
return with or without remittance by
registered mail or certified mail, the
date of registry, or the date of the
postmark on the sender’s postal receipt
for certified mail, will be treated as the
date of delivery of the return and also
of the remittance, if included.
(b) Payment by courier or other
private delivery service. A proprietor
may send a return, with or without
remittance, by courier or other private
delivery service. If the proprietor sends
the return with or without remittance
with a courier or private delivery
service that is available to the general
public and that is at least as timely and
reliable as the U.S. mail, and the
delivery service has tracking and tracing
procedures for its deliveries, TTB will
consider the date of tender to the
delivery service as recorded in the
tracking and tracing record for the
parcel as the date of delivery. If the
proprietor sends the return, with or
without remittance, by courier or other
private delivery service that does not
meet the above requirements, the actual
date of delivery to TTB will be treated
as the date of delivery of the return and
also of the remittance, if included.
(26 U.S.C. 6302)
§ 19.239

Form of payment.

(a) General. The proprietor must pay
the tax due on spirits when filing a
return on form TTB F 5000.24, Excise
Tax Return. The remittance for the tax
must accompany the return and may be
in any form that is authorized by § 70.61
of this chapter and acceptable to the
appropriate TTB officer. Exception: This
does not apply to payments that must be
made by EFT. For EFT payments see
§ 19.240.
(b) Consequences of default. If a check
or money order tendered in payment of
taxes is not paid on presentment, or if
the taxpayer is otherwise in default in
payment, then any remittance made
during the period of default must be
either in cash or by an acceptable
certified instrument. The proprietor
must continue to pay in cash or by

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certified instrument as long as the
proprietor remains in default, and until
the appropriate TTB officer finds that
accepting a check will not jeopardize
the revenue.
(c) Certified instruments. Acceptable
certified instruments include certified
checks, cashier’s checks or treasurer’s
checks drawn on any bank or trust
company incorporated under the laws of
the United States, or under the laws of
any State, Territory or possession of the
United States, or a money order, as
provided in § 70.61 of this chapter.
(d) Payment of taxes. The proprietor
must make checks or money orders
payable to ‘‘Alcohol and Tobacco Tax
and Trade Bureau’’.
(26 U.S.C. 5061, 6311)
§ 19.240 Payment of tax by electronic fund
transfer.

(a) General. (1) Criteria requiring ETF
payment. Under certain conditions, a
proprietor may not make payments by
cash, check, or money order. Instead,
the proprietor must use the services of
a commercial bank to pay tax on
distilled spirits tax by EFT. Payments
must be made by EFT in the current
calendar year if the proprietor, as a
taxpayer, was liable for $5 million or
more in taxes on distilled spirits during
the prior calendar year. For the purpose
of determining whether the proprietor is
subject to this requirement, the
proprietor must use the total amount of
tax liability on distilled spirits incurred
under this part and parts 26 and 27 of
this chapter (gross tax liability). Gross
tax liability includes the distilled spirits
tax on all taxable withdrawals of spirits
and taxable importations of spirits, as
well as tax on spirits brought into the
United States from Puerto Rico and the
Virgin Islands during the calendar year.
This figure includes taxes incurred at
any and all premises at which the
proprietor conducts regulated activities.
The proprietor may not net out or adjust
for any drawback, credits or refunds of
tax that are allowed. Overpayments
made in excess of actual tax liability
will not be included in the gross tax
liability figure.
(2) Controlled group. If the taxpayer is
a member of a controlled group, the
controlled group is treated as a single
taxpayer when calculating liability of $5
million or more in distilled spirits taxes
during the prior calendar year. A
controlled group is a related group of
taxpayers and is defined in subpart D of
part 70 of this chapter.
(3) Separate return and payment for
each DSP. When the proprietor makes
payments by EFT, the proprietor must
file a separate return on form TTB F
5000.24 and make a separate EFT

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payment for each DSP from which
spirits are withdrawn upon
determination of tax.
(b) Requirements—(1) Notice to TTB.
If the proprietor’s gross distilled spirits
tax liability is $5 million or more in one
calendar year, the proprietor must notify
the appropriate TTB officer of this fact
not later than January 10 of the
following year. The proprietor must use
the total amount of tax liability incurred
under this part and parts 26 and 27 of
this chapter to determine whether it
must make this notification. Exception:
this notice requirement does not apply
if the proprietor already pays tax on
distilled spirits by EFT. The notice shall
be an agreement to make payments by
EFT.
(2) Separate EFT for each return. For
each return filed in accordance with this
part, the proprietor will direct the bank
to make an EFT to the Treasury Account
for the amount of the tax reported due
on the return. The proprietor must give
instructions to the bank early enough for
the EFT to be made to the Treasury
Account by no later than close of
business on the last day for filing the
return as prescribed in §§ 19.236 or
19.237, as appropriate.
(3) Discontinuing EFT payments. If
the proprietor pays tax by EFT and has
a gross tax liability of less than $5
million in distilled spirits taxes during
a calendar year, combining tax liabilities
incurred under this part and parts 26
and 27 of this chapter, payment by EFT
will be optional in the following year.
The proprietor may continue to remit
tax payment by EFT as provided in this
section, or the proprietor may remit
taxpayment using any acceptable
method as set forth in § 19.239. If the
proprietor decides to stop paying tax by
EFT, the proprietor must give the
appropriate TTB officer written notice
of that decision. The proprietor must
attach a written notice to the first return
on form TTB F 5000.24 filed using a
method of payment other than EFT.
Such notice must state that tax is not
due by EFT because the proprietor’s tax
liability during the preceding calendar
year was less than $5 million. The
proprietor must further state that future
tax payments will be filed with the
returns on TTB F 5000.24.
(c) Remittance—(1) Identifying EFT
payments. When the proprietor
completes the return on TTB F 5000.24,
the proprietor must indicate on the form
that the tax was paid by EFT. The
proprietor must file the completed TTB
F 5000.24 with TTB as directed by the
instructions on the form.
(2) Credit for payment. TTB will
credit the proprietor as having made a
tax payment when the Treasury

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Account receives the EFT. TTB
considers the EFT to be received by the
Treasury Account when the EFT is paid
to a Federal Reserve Bank.
(3) Record of payment. When a
proprietor directs a bank to make an
EFT as required by paragraph (b)(2) of
this section, any transfer data record
furnished to the proprietor as part of
normal banking procedures will serve as
the record of payment. The proprietor
will retain this document as part of the
required records.
(d) Failure to make a tax payment by
EFT. The proprietor will be subject to a
penalty imposed by 26 U.S.C. 5684,
6651, or 6656 for failure to make a
required EFT tax payment before close
of business on the last day for filing.
(e) Procedure. Upon receipt of a
notice filed pursuant to paragraph (b)(1)
of this section, the appropriate TTB
officer will provide the proprietor with
a copy of the TTB Procedure entitled
‘‘Payment of Tax by Electronic Fund
Transfer’’. This publication outlines the
procedure that the proprietor must
follow when preparing returns and
payments by EFT as required by this
part. The proprietor must follow
instructions provided by Customs and
Border Protection (CBP) for submitting
the EFT payments that must be made to
CBP.
(26 U.S.C. 5061, 6302)

Requirements for Employer
Identification Numbers
§ 19.242

Employer identification number.

The proprietor must enter the
employer identification number (EIN)
assigned to it by the Internal Revenue
Service on each form TTB F 5000.24,
Excise Tax Return, filed with TTB.
Failure to enter the assigned EIN on
TTB F 5000.24, may result in a $50.00
penalty for each occurrence as specified
in § 70.113 of this chapter.
(26 U.S.C. 6109, 6723)
§ 19.243 Application for employer
identification number.

(a) Use Form SS–4. The proprietor
must obtain an employer identification
number (EIN) by filing an application
with the Internal Revenue Service (IRS)
on Form SS–4. Form SS–4 is available
from Internal Revenue Service Centers,
from IRS District Directors, the IRS Web
site at http://www.irs.gov, or from TTB’s
National Revenue Center. The
proprietor may file this form with IRS
by mail, telephone, or fax by following
the instructions on the form.
(b) Time limit. If the proprietor has
not already received, or applied for, an
EIN at the time that the first return on
form TTB F 5000.24, Excise Tax Return,

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9121

is filed, the proprietor must file such
application for an EIN not later than
seven days from the date of filing the
TTB F 5000.24.
(c) One EIN only. Each proprietor
must obtain and use only one EIN,
regardless of the number of places of
business for which the proprietor is
required to file a tax return under this
subpart.
(26 U.S.C. 6109)

Effective Tax Rates
§ 19.245

Tax credits under 26 U.S.C. 5010.

(a) The distilled spirits tax. Sections
5001 and 7652 of the IRC impose a tax
on all distilled spirits produced in, or
imported into, or brought into the
United States at the rate prescribed in
section 5001 of the IRC.
(b) Tax credits. Section 5010 of the
IRC provides a credit for the wine and
flavors content in distilled spirits
products. These credits effectively
reduce the rate of excise tax paid on
distilled spirits products that contain
eligible wines and eligible flavors. As a
result, the alcohol derived from eligible
wine is taxed at the rates specified for
wine in 26 U.S.C. 5041, and the alcohol
derived from eligible flavors is not taxed
to the extent that it does not exceed 2.5
percent of the alcohol in the product.
This results in an effective tax rate on
the distilled spirits product that is lower
than the rate prescribed in 26 U.S.C.
5001.
(c) Eligible wine and eligible flavor.
The credit for the wine and flavor
content of a distilled spirits product is
allowable only if the wine or flavor
contained in the product is an ‘‘eligible
wine’’ or an ‘‘eligible flavor’’. To
determine whether a wine or flavor is
eligible, refer to the definitions in § 19.1
and 26 U.S.C. 5010.
(d) Application of effective tax rates.
Section 19.246 describes how the
proprietor should compute the effective
tax rate for each distilled spirits product
containing eligible wine or eligible
flavor. Sections 19.247 through 19.250
set forth several different methods that
the proprietor may use in applying the
effective tax rates to taxable removals of
products from the proprietor’s bonded
premises.
(26 U.S.C. 5010)
§ 19.246 Computing the effective tax rate
for a product.

(a) How to compute effective tax rates.
In order to determine the effective tax
rate for a distilled spirits product
containing eligible wine or eligible
flavor, the proprietor must first
determine the total excise taxes due on
the product from all sources including

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9122

distilled spirits, eligible wine, and
alcohol from eligible flavors in excess of
2.5 percent of the total proof gallons in
the product. Then, the proprietor must
determine the total number of proof
gallons of alcohol in the product
regardless of the source. By dividing the
total tax (numerator) by the total
number of proof gallons (denominator)
the proprietor will arrive at the effective
tax rate for the product in dollars per
proof gallon. The proprietor will
compute the effective tax rate according
to the following formula:
(1) Numerator. The numerator will be
the sum of:
(i) The proof gallons of all distilled
spirits used in the product (exclusive of
distilled spirits derived from eligible
flavors), multiplied by the tax rate
prescribed by 26 U.S.C. 5001;
(ii) The wine gallons of each eligible
wine used in the product, multiplied by
the tax rate prescribed by 26 U.S.C.
5041(b)(1), (2), or (3), that would be
imposed on the wine but for its removal

to bonded premises. Three different tax
classes of wine are eligible for the tax
credit. The proprietor will have to
repeat this step for each different tax
class of eligible wine used; and
(iii) The proof gallons of all distilled
spirits derived from eligible flavors used
in the product, multiplied by the tax
rate prescribed by 26 U.S.C. 5001, but
only to the extent that such distilled
spirits exceed 2.5 percent of the
denominator prescribed in paragraph
(a)(2) of this section.
(2) Denominator. The denominator
will be the sum of:
(i) The proof gallons of all distilled
spirits used in the product, including
distilled spirits derived from eligible
flavors; and
(ii) The wine gallons of each eligible
wine used in the product, multiplied by
twice the percentage of alcohol by
volume of each, divided by 100.
(b) Rounding numbers—(1) Proof
gallons. When determining the effective
tax rate, the proprietor must express
quantities of distilled spirits, eligible

wine, and eligible flavors to the nearest
tenth of a proof gallon.
(2) Tax rates. The proprietor may
round the effective tax rate to as many
decimal places as the proprietor deems
appropriate, provided that the rate is
expressed no less exactly than the rate
rounded to the nearest whole cent. The
proprietor must be consistent and round
the effective tax rates for all products to
the same number of decimal places.
When rounding, if the number to the
right of the last decimal place to be kept
is less than five, it will be dropped, if
it is five or over, a unit will be added.

(26 U.S.C. 5010)

(b) Record tax rates used. The
proprietor must record the effective tax
rate used on the dump or batch records
for the products as required by § 19.598.
The proprietor must record the serial
numbers of cases of product removed at
each rate on the record of tax
determination or other related record.
The proprietor must keep these records
available for inspection by TTB officers.

distilled spirits product, rather than
calculate a separate effective tax rate for
each batch of product made. If the
proprietor elects to use this option, the
proprietor must determine the
permanent standard effective tax rate
based on the least quantity and the
lowest alcohol content of eligible wine
or eligible flavors used to manufacture
the product. Thus, the permanent
standard effective tax rate is the highest
tax rate that would apply to the product
because it is based on a batch with the
least amount of alcohol from eligible
wine and flavors that qualify for the
credit under 26 U.S.C. 5010. By using
this method the proprietor forgoes the

Use of effective (actual) tax rates.

(a) Select method of applying tax rate.
The proprietor may choose to apply an
effective tax rate to taxable removals of
distilled spirits products in accordance
with § 19.248, § 19.249, or § 19.250. Any
proprietor who does not elect one of
these options must establish an effective
tax rate for each batch of distilled spirits
product on which a claim for tax credit
for alcohol derived from eligible wine or
eligible flavor will be made. The
proprietor must compute the effective
tax rates for these products in
accordance with the instructions in
§ 19.246.
1 Proof gallons by which distilled spirits derived
from eligible flavors exceed 2.5% of the total proof

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(26 U.S.C. 5010, 5207)
§ 19.248

Standard effective tax rate.

(a) Establishing a standard effective
tax rate for a product. The proprietor
may establish a permanent standard
effective tax rate for any eligible

BATCH RECORD
Distilled spirits ...........
Eligible wine (14% alcohol by volume).
Eligible wine (19% alcohol by volume).
Eligible flavors ..........

gallons in the batch (100.9 ¥ (2.5% × 3,371.8) =
16.6).

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2249.1 proof gallons.
2265.0 wine gallons.
1020.0 wine gallons.
100.9 proof gallons.

ER16FE11.000

§ 19.247

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possible use of a lower tax rate in
exchange for the convenience of using a
permanent standard effective tax rate
that does not have to be recomputed for
each batch of product made. The
proprietor must keep a permanent
record of the standard effective tax rates
established for each product, in
accordance with § 19.615.
(b) Batches subject to a higher tax
rate. Whenever the proprietor
manufactures a batch of the product
with a lesser quantity or lower alcohol
content of eligible wine or eligible
flavor, this will result in a higher tax
rate on the product since the product
will have less alcohol qualifying for the
credit under 26 U.S.C. 5010 and a
higher percentage of alcohol taxable at
the rate published in 26 U.S.C. 5001. In
such instances, the proprietor must keep
the cased goods segregated from other
completed cases of the same product
subject to the permanent standard
effective tax rate for that product. The
proprietor must determine the tax rate
for the nonstandard batch in accordance
with § 19.247.
(c) TTB review of standard tax rates.
If the appropriate TTB officer finds that
the use of this procedure jeopardizes the
revenue, or causes administrative
difficulty, the proprietor upon
notification from TTB must discontinue
use of this procedure.
(26 U.S.C. 5010, 5207)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.249

Average effective tax rate.

(a) Establishing an average tax rate.
The proprietor may establish an average
effective tax rate for any eligible
distilled spirits product based on the
total proof gallons in all batches of the
same composition which have been
produced during the preceding 6-month
period and which have been or will be
bottled or packaged, in whole or in part,
for domestic consumption. At the
beginning of each month, the proprietor
must recompute the average effective
tax rate so as to include only the
immediately preceding 6-month period.
The proprietor must show the average
tax rate established for a product in the
record of average effective tax rates as
prescribed in § 19.613.
(b) TTB review of average effective tax
rates. If the appropriate TTB officer
finds that the use of this procedure
jeopardizes the revenue, or causes
administrative difficulty, the proprietor
upon notification from TTB must
discontinue use of this procedure.
(26 U.S.C. 5010, 5207)
§ 19.250

Inventory reserve account.

(a) The proprietor may establish an
inventory reserve account for any

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eligible distilled spirits product by
maintaining an inventory reserve record
as prescribed by § 19.614. The effective
tax rate applied to each removal or other
disposition will be the effective tax rate
recorded on the inventory reserve
record from which the removal or other
disposition is depleted. With an
inventory reserve account, the
proprietor will tax pay removals on a
first-in first-out basis regardless of
which lot of product is actually
removed.
(b) If the appropriate TTB officer finds
that the use of this procedure
jeopardizes the revenue, or causes
administrative difficulty, the proprietor
upon notification from TTB must
discontinue use of this procedure.
(26 U.S.C. 5010, 5207)

Assessment of Taxes by TTB
§ 19.253 Assessment of tax on spirits not
accounted for or reported.

The proprietor is required by law to
properly account for and report all
spirits that it produces. TTB will assess
the proprietor for the tax on the
difference between the quantity
reported and the quantity actually
produced.
(26 U.S.C. 5006)
§ 19.254 Assessment of tax for losses or
unauthorized removals.

(a) Lost or destroyed in bond. TTB
will assess the proprietor for the tax on
spirits, denatured spirits, or wines in
bond that are lost or destroyed if:
(1) The proprietor is liable for the tax
on spirits, denatured spirits, or wines in
bond, and the proprietor fails to file a
claim for remission of the tax on spirits,
denatured spirits, or wines that are lost
or destroyed in bond as provided in
§ 19.263(a), or
(2) The proprietor files a claim for
such loss or destruction but the claim is
denied. Exception: The provisions of
this section do not apply to spirits,
denatured spirits, or wines on which the
tax is not collectable due to the
provisions of 26 U.S.C. 5008(a) or (d), or
26 U.S.C. 5370, as applicable.
(b) Unauthorized removal from bond.
(1) TTB will assess the proprietor for the
tax on any spirits, denatured spirits, or
wines in bond that are removed from
bonded premises other than as
authorized by law.
(2) TTB will assess the proprietor for
tax on spirits or denatured spirits lost
from casks or other packages as
described in 26 U.S.C. 5006(b) if the
proprietor does not pay the tax upon
demand by the appropriate TTB officer.
(26 U.S.C. 5006, 5008, 5370)

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Additional Tax Provisions
§ 19.256

Tax on wine.

(a) Imposition of tax. All wine
(including imitation, substandard, or
artificial wine, and compounds sold as
wine) produced in or imported into or
brought into the United States is subject
to tax pursuant to 26 U.S.C. 5041 or
7652. The proprietor may be liable for
wine taxes under 26 U.S.C. 5362(b)(3)
for wine that is transferred in bond to
the proprietor’s distilled spirits plant.
The proprietor may not remove wine
from the bonded premises of a distilled
spirits plant for consumption or sale as
wine. (See 26 U.S.C. 5362.)
(b) Liability for tax. Except as
otherwise provided by law, the
proprietor is liable for the tax on wine
transferred in bond to the proprietor’s
distilled spirits plant from a bonded
wine cellar or from another distilled
spirits plant until the proprietor uses
the wine in the manufacture of a
distilled spirits product or properly
disposes of the wine as provided
elsewhere in this part.
(26 U.S.C. 5041, 5362, 7652)
§ 19.257

Imported spirits.

The proprietor will incur a tax
liability greater than the internal
revenue tax imposed by 26 U.S.C.
5001(a)(1), if spirits originally imported
for nonbeverage purposes are
transferred from customs custody to
TTB bonded premises pursuant to 26
U.S.C. 5232, and the proprietor
subsequently decides to withdraw the
spirits for beverage purposes. If the
spirits would have been subject to a
higher duty had they been imported for
beverage purpose, the proprietor must
pay a tax equal to the difference
between the higher duty and the duty
actually paid. Proprietors will refer to
this additional tax as ‘‘additional tax—
less duty’’ and pay it at the same time
and in the same manner as the distilled
spirits excise tax. Proprietors must
compute the amount of ‘‘additional
tax—less duty’’ owed by applying this
rate to the total quantity of proof gallons
withdrawn. The proprietor must make a
separate entry on the tax return labeled
‘‘additional tax—less duty’’ and show
the amount of tax due.
(26 U.S.C. 5001)
§ 19.258
spirits.

Additional tax on nonbeverage

The additional tax imposed by 26
U.S.C. 5001(a)(8), on imported spirits
withdrawn from customs custody
without payment of tax and later
withdrawn from bonded premises for
beverage purposes, and the related
provisions of § 19.257, are not

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applicable to Puerto Rican or Virgin
Islands spirits brought into the United
States and transferred to bonded
premises under the provisions of this
part.
(26 U.S.C. 5201)

Subpart J—Claims
§ 19.261

Scope.

This subpart covers the various types
of claims that a proprietor may file and
includes provisions regarding the
following:
(a) General requirements for filing
claims;
(b) Specific requirements for filing
certain types of claims; and
(c) Remission, abatement, credit and
refund of tax.
(26 U.S.C. 5008, 5215, 6065)

Requirements for Filing Claims
§ 19.262
claims.

General requirements for filing

(a) A proprietor must file all claims
for abatement, remission, credit, or
refund under this part on form TTB F
5620.8, Claim—Alcohol and Tobacco
Tax and Trade Bureau Taxes. The claim
must:
(1) Be filed with TTB’s National
Revenue Center;
(2) Show the name, address, and
capacity of the claimant;
(3) Be signed by the claimant or by the
claimant’s duly authorized agent under
penalties of perjury as provided in
§ 19.45; and
(4) Include any supporting documents
required by this part. The supporting
documents will be considered a part of
the claim.
(b) The appropriate TTB officer may
require that the claimant submit
additional evidence or documentation
to further support the legitimacy or
accuracy of the claim.
(26 U.S.C. 5008, 5215, 6065)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.263 Claims on spirits, denatured
spirits, articles, or wines lost or destroyed
in bond—specific requirements.

(a) Claims for remission. A claim for
remission of tax liability relating to the
destruction or loss of spirits, denatured
spirits, articles, or wines in bond must
include the following information:
(1) Identity of containers.
Identification of the containers, by serial
number if they were numbered, and
location of the containers from which
the spirits, denatured spirits, articles, or
wines were lost, or in which they were
removed for destruction;
(2) Quantity of spirits. The quantity of
spirits, denatured spirits, articles, or
wines lost or destroyed from each

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container, and the total quantity of
spirits or wines covered by the claim;
(3) Amount of claim. The total
amount of tax for which the claim is
filed;
(4) Identity of distilled spirits plant.
The name, number, and address of the
distilled spirits plant from which
withdrawn without payment of tax or
removed for transfer in bond, if the
claim involves spirits so withdrawn or
removed or if the claim involves wines
transferred in bond, and the date and
purpose of such withdrawal or removal.
In the case of imported spirits lost or
destroyed while being transferred from
customs custody to TTB bond as
provided in § 19.409, the name of the
customs bonded warehouse, if any, and
port of entry will be included instead of
the plant name, number, and address;
(5) Date and cause. The date of the
loss or destruction: If the date is not
known, enter the date the loss or
destruction was discovered. Include the
cause of the loss together with relevant
facts and details;
(6) Carrier. The name of the carrier if
the loss occurred while the spirits were
in transit;
(7) Consignee. The name and address
of the consignee, in the case of spirits
withdrawn without payment of tax
which are lost before being used for
research, development, or testing;
(8) Theft. If lost by theft, the facts
establishing that the loss did not occur
as the result of any negligence,
connivance, collusion, or fraud on the
part of the proprietor of the plant,
owner, consignor, consignee, bailee, or
carrier, or the employees or agents of
any of them; and
(9) Insurance. In the case of a loss by
theft, whether the claimant is
indemnified or recompensed for the
spirits or wines lost and if so, the
amount and nature of indemnity or
recompense and the actual value of the
spirits or wines, less the tax.
(b) Claims for abatement, credit or
refund. If a proprietor files a claim for
abatement of an assessment, or for credit
or refund of tax that has been paid or
determined, for spirits, denatured
spirits, articles, or wines lost or
destroyed in bond, the claim must
include all of the applicable information
described in paragraph (a) of this
section as well as the following:
(1) The date of assessment or payment
of the tax for which abatement, credit or
refund is claimed. If the tax has not
been assessed or paid, give the date of
the tax determination; and
(2) The name, plant number and
address of the plant where the tax was
determined, assessed or paid. If the tax
was assessed against, or paid by,

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someone other than the proprietor, then
give the name, address and capacity of
the person who was assessed or paid the
tax.
(c) Supporting documents—
(1) General. If possible, the proprietor
should support the information and
details on all claims filed under this
section with affidavits by persons
having personal knowledge of the
circumstances of the loss or destruction.
(2) Losses in transit. For claims on
spirits, denatured spirits, articles, or
wines lost while being transferred by a
carrier, the claim must be supported by
a copy of the bill of lading.
(3) Spirits withdrawn without
payment of tax. If the lost spirits were
withdrawn without payment of tax for
research, development, or testing, the
claim must be supported by a copy of
the proprietor’s sample record
prescribed in subpart V of this part.
(26 U.S.C. 5008, 5370)
§ 19.264 Claims on spirits returned to
bonded premises—specific requirements.

(a) General. Section 5215(a) of the IRC
allows for the return of tax paid or tax
determined spirits to the bonded
premises of a distilled spirits plant
under certain conditions. In addition,
section 5008(c) of the IRC allows a
proprietor to file a claim for credit or
refund of tax on the spirits returned to
bonded premises under section 5215(a).
For information on allowable returns
see subpart Q of this part.
(b) Claims for credit or refund. A
claim for credit or refund of tax on
spirits returned to bonded premises
under section 5215(a) must include the
following information:
(1) Quantity of spirits so returned;
(2) Amount of tax for which the claim
is filed;
(3) Name, address, and plant number
of the plant to which the spirits were
returned and the date of the return;
(4) The purpose for which the spirits
were returned; and
(5) The serial number of the gauge
record for the returned spirits.
(c) Puerto Rican and Virgin Islands
spirits and imported rum. If the
alcoholic content of the spirits contain
at least 92 percent Puerto Rican or
Virgin Islands rum, or if the spirits
contain rum imported from any area
other than Puerto Rico and the Virgin
Islands, the claim must show:
(1) Proof gallons of the finished
product derived from Puerto Rican or
Virgin Islands spirits, or derived from
rum imported from any other area; and
(2) The amount of tax imposed by 26
U.S.C. 7652 or 26 U.S.C. 5001,
determined at the time of withdrawal
from bond, on the Puerto Rican or

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Virgin Islands spirits, or on the rum
imported from any other area, contained
in the product.
(d) Products subject to 26 U.S.C. 5010
tax credits. A claim for credit or refund
of tax on spirits containing eligible wine
or eligible flavors must include the date
and serial number of the record of tax
determination and the effective tax rate
at which the tax was paid or
determined. If this information is not
provided, the amount of tax claimed
will be based on the lowest effective tax
rate applied to the product.
(e) Limits on claims. Claims for credit
or refund of tax must be filed by the
proprietor of the plant to which the
spirits were returned. The claim must be
filed within six months of the date of
the return. No interest is allowed on any
claims for refund or credit.
(26 U.S.C. 5008, 5215)
§ 19.265 Claims relating to spirits lost after
tax determination.

Claims for abatement, credit, or
refund of tax under this part, relating to
losses of spirits occurring on bonded
premises after tax determination but
prior to physical removal from such
premises, will be prepared and filed in
accordance with the regulations in
§ 19.263(b) and (c).
(26 U.S.C. 5008)

The appropriate TTB officer is
authorized to allow claims for
remission, abatement, credit, and refund
of tax, filed under the provisions of this
part.
(26 U.S.C. 5008)

Rules for Puerto Rican and Virgin
Islands Spirits
§ 19.269
spirits.

Puerto Rican and Virgin Islands

(a) The provisions of 26 U.S.C. 5008,
authorizing abatement, remission,
credit, or refund for loss or destruction
of distilled spirits, also apply to spirits
brought into the United States from
Puerto Rico or the Virgin Islands with
respect to the following:
(1) Spirits lost while in TTB bond;
(2) Voluntary destruction of spirits in
bond;
(3) Spirits returned to bonded
premises after withdrawal without
payment of tax; and
(4) Spirits returned to bonded
premises after withdrawal upon tax
determination.
(b) In addition to the information
required by § 19.263, claims relating to
spirits lost in bond must show the name
of the producer and the serial number
and date of the formula under which
produced, if any.

Rules Regarding Credits, Abatement,
Remission, or Refund

(26 U.S.C. 5008, 5215)

§ 19.266

§ 19.281

Subpart K—Gauging

Claims for credit of tax.

A proprietor may file a claim for
credit of tax, as provided in this part,
after the tax has been determined,
whether or not the tax has been paid.
However, a proprietor may not
anticipate allowance of a credit or make
an adjusting entry in a tax return
pending action on the claim.
(26 U.S.C. 5008, 5215)
§ 19.267

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.268 Allowance of remission,
abatement, credit, or refund of tax.

Adjustments for credited tax.

When a proprietor receives a notice of
allowance of credit from TTB, including
notification of credit for tax on spirits
exported with benefit of drawback as
provided in part 28 of this chapter, the
proprietor will make an adjusting entry
and an explanatory statement on its next
excise tax return. The proprietor will
identify the notification of allowance of
credit that authorizes the adjusting entry
in the explanatory statement. If the
allowable tax credit is greater than the
tax due on the excise tax return, the
proprietor will apply the balance of the
tax credit to one or more following tax
returns until the tax credit is exhausted.
(26 U.S.C. 5008, 5062)

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Scope.

This subpart covers gauging, which is
the determination of the quantity and
the proof of distilled spirits. Topics
covered in this subpart include: The
general requirements for gauging; when
gauges are required at distilled spirits
plants; and special rules that apply to
the gauges performed at distilled spirits
plants. For additional requirements and
procedures governing gauging, see part
30 of this chapter, Gauging Manual.
§ 19.282 General requirements for gauging
and measuring equipment.

A proprietor is required to perform
periodic gauges of the spirits, wines,
and alcoholic flavorings at the plant. A
proprietor must have accurate and
readily usable gauging and measuring
equipment as required by this part and
part 30 of this chapter. At any time, TTB
may require that the proprietor’s gauges
be performed in the presence of, and be
verified by, a TTB officer. In addition,
TTB may disapprove the use of any
equipment, or the proprietor’s means of
gauging, if TTB finds that it is not
sufficiently accurate or suitable for the
gauges and measurements to be made.

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(26 U.S.C. 5006, 5204)

Required Gauges
§ 19.283

When gauges are required.

The proprietor must gauge spirits,
wine, and alcoholic flavoring materials
when required to do so by the
appropriate TTB officer or when the
spirits, wine, or flavoring materials are:
(a) Produced and entered for deposit;
(b) Filled into packages from storage
tanks;
(c) Transferred or received in bond;
(d) Transferred between operational
accounts;
(e) Mixed in the manufacture of a
distilled spirits product;
(f) Mingled under § 19.329;
(g) Reduced in proof before bottling;
(h) Voluntarily destroyed;
(i) Removed or withdrawn from bond;
(j) Tax determined;
(k) Returned to bond; or
(l) Denatured.
(26 U.S.C. 5204, 5559)

Rules for Gauging
§ 19.284
spirits.

Quantity determination of bulk

(a) Gauge of spirits in packages. When
determining the quantity of bulk spirits
in packages, the proprietor must
determine the quantity by weight as
provided in part 30 of this chapter.
(b) Bulk gauge for tax determination.
When determining the quantity of bulk
spirits for determination of tax or when
performing a production gauge that will
be used for tax determination, the
proprietor must determine the quantity
by weight as provided in part 30 of this
chapter or by an accurate mass flow
meter. For tax determination purposes,
an accurate mass flow meter is a mass
flow meter that has been certified by the
manufacturer or other qualified person
as accurate within a tolerance of plus or
minus 0.1 percent.
(c) Volumetric determination. Except
as provided in paragraphs (a) and (b) of
this section, in all other instances when
the proprietor is required to gauge bulk
spirits in bond, the proprietor may
determine the quantity by either weight
or volume. When the proprietor
determines the quantity by volume, the
proprietor must measure the spirits by
using:
(1) A tank or bulk conveyance for
which a calibration chart is provided,
with the calibration charts certified as
accurate by persons qualified to
calibrate tanks or bulk conveyances; or
(2) An accurate mass flow meter. For
purposes of this paragraph, an accurate
mass flow meter is a mass flow meter
that has been certified by the
manufacturer or other qualified person

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as accurate within a tolerance of plus or
minus 0.5 percent; or
(3) Another device or method
approved by the appropriate TTB
officer.
(26 U.S.C. 5559)
§ 19.285
spirits.

Proof determination of distilled

(a) Proof. Except as provided in
paragraph (b) of this section, when the
proprietor is required to gauge distilled
spirits, the proprietor must determine
the proof in accordance with the
procedures prescribed in part 30 of this
chapter, Gauging Manual.
(b) Use of Initial proof. After a
proprietor has determined the proof of
distilled spirits in accordance with the
procedures in part 30 of this chapter, a
proprietor may use the initial
determination of proof when required to
make a later gauge at the same plant.
However, a proprietor must determine
the proof again when:
(1) A bottling tank gauge is required
by § 19.353;
(2) A gauge for tax determination is
required by § 19.226; or
(3) In any case where the proof may
have changed.
(26 U.S.C. 5559)
§ 19.286

Gauging of spirits in bottles.

When gauging spirits in bottles, the
proprietor may determine the proof and
quantity from case markings and label
information if the bottles are full and
there is no evidence that tampering has
occurred.
(26 U.S.C. 5204, 5559)
§ 19.287 Gauging of alcoholic flavoring
materials.

srobinson on DSKHWCL6B1PROD with RULES2

Generally, alcoholic flavoring material
must be gauged when dumped.
However, when received from a
manufacturer in a closed, nonporous
container such material may be gauged
by using the proof shown on the
container label or a related statement of
proof from the manufacturer. When the
proof is determined from a label or
manufacturer’s statement, the proprietor
will test a sufficient number of samples
to verify the accuracy of the proof so
determined. TTB may require that
alcoholic flavoring materials be gauged
by the methods provided in part 30 of
this chapter.
(26 U.S.C. 5204, 5559)
§ 19.288

Determination of tare.

When packages are to be individually
gauged for withdrawal from bonded
premises, the actual tare must be
determined in accordance with part 30
of this chapter.

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(26 U.S.C. 5204)
§ 19.289

Production gauge.

(a) General requirements for
production gauges. A proprietor must
gauge all spirits by determining the
quantity and proof as soon as reasonably
possible after production is completed.
Except as otherwise provided in this
section, a proprietor may determine the
quantity by volume or by weight, by an
accurate mass flow meter, or when
approved by the appropriate TTB
officer, by other devices or methods that
accurately determine the quantities. If
caramel is added to brandy or rum, the
proof of the spirits must be determined
after the addition. Spirits in each
receiving tank will be gauged before any
reduction in proof and both before and
after each removal of spirits. The gauges
must be recorded in the records
required by § 19.585.
(b) Tax to be determined on
production gauge. If the tax is to be
determined based on the production
gauge, all transaction records must be
marked ‘‘Withdrawal on Production
Gauge.’’ A proprietor may determine the
tax based on the production gauge if the
spirits are:
(1) Weighed into bulk conveyances or
metered using an accurate mass flow
meter;
(2) Uniformly filled by weight or an
accurate mass flow meter into metal
packages; or
(3) Filled by weight or an accurate
mass flow meter into packages for
immediate withdrawal from bonded
premises with the details recorded on a
package gauge record in accordance
with § 19.619.
(c) Tax not to be determined on
production gauge. If spirits are drawn
from the production system into barrels,
drums, or similar portable containers of
the same rated capacity and the
containers are filled to capacity, and the
tax is not to be determined on the basis
of the production gauge, the gauge may
be made by:
(1) Weighing in a tank, converting the
weight into proof gallons, and
determining the average content of each
container;
(2) Measuring volumetrically, in a
calibrated tank, converting the wine
gallons determined into proof gallons,
and determining the average content of
each container;
(3) Converting the rated capacity into
proof gallons to determine the average
content of each container. Rated
capacity will be determined from
specifications of the manufacturer. The
proprietor will determine the rated
capacity of used cooperage; or

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(4) Determining by an accurate mass
flow meter or a device or method
approved under paragraph (a) of this
section, the total quantity filled into
containers, and determining the average
content of each container.
(d) Records of production gauge. For
the production gauge, fractional proof
gallons will be rounded to the nearest
one-tenth and the average content and
the number of packages filled will be
used in computing the quantity
produced. The actual proof gallons in
each remnant container must be shown.
As provided in § 19.618, a separate
gauge record will be prepared for each
lot of packages filled (see § 19.485) and
for each removal by pipeline or bulk
conveyance for deposit in bond on the
same plant premises. The gauge record
will show ‘‘Deposit in storage’’ or
‘‘Deposit in processing.’’ If spirits are to
be transferred in bond or withdrawn
from bond, the production gauge will be
made on the form or record required by
this part (accompanied by a package
gauge record, if required).
(26 U.S.C. 5204, 5211)

Subpart L—Production of Distilled
Spirits
§ 19.291

General.

The regulations in this subpart cover
production operations. A proprietor
authorized to produce distilled spirits
must conduct production operations in
accordance with the provisions of this
subpart. Subpart V of this part sets forth
recordkeeping requirements that apply
to production operations.
(26 U.S.C. 5201)

Notification to TTB When Beginning or
Suspending Production Operations
§ 19.292

Notice of operations.

A proprietor authorized to produce
distilled spirits may not commence,
suspend, or resume production
operations at the plant without first
providing written notice to TTB.
(a) Beginning operations. A proprietor
must file a letterhead notice with the
appropriate TTB officer before
beginning or resuming production
operations. A proprietor must not begin
or resume operations before the time
specified in the notice.
(b) Suspending operations. If a
proprietor intends to suspend
production operations for a period of 90
days or more, the proprietor must file a
letterhead notice with the appropriate
TTB officer specifying the date on
which operations will be suspended.
(c) Discontinuing reports. A proprietor
is not required to prepare or file reports
of production operations under subpart

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V of this part for periods during which
production operations are suspended.
(26 U.S.C. 5221)

Rules for Receipt, Use, and Disposal of
Materials
§ 19.293

Receipt of materials.

When a proprietor receives certain
materials on bonded premises, the
proprietor must determine the quantity
received and record those quantities in
the records prescribed by subpart V of
this part. This requirement applies to:
(a) Fermenting materials;
(b) Distilling materials (including
nonpotable chemical mixtures
containing spirits); and
(c) Spirits, denatured spirits, articles,
and spirits residue for redistillation.

(26 U.S.C. 5201, 5222, 5223)
§ 19.297
spirits.

Use of materials in production of

Material received for use as
fermenting material may be removed
from or used on bonded premises for
other purposes. The proprietor must
keep a record of use or removal as
provided in subpart V of this part.

A proprietor may produce spirits from
any suitable material in accordance with
the proprietor’s statements of
production procedure in the notice of
registration. Materials from which
alcohol will not be produced may be
used in production only if the use of the
materials is described in the approved
statements of production procedure.
The distillation of nonpotable chemical
mixtures as described in § 19.36 will be
deemed to be the original and
continuous distillation of the spirits in
such mixtures and to constitute the
production of spirits.

(26 U.S.C. 5201)

(26 U.S.C. 5172, 5178)

§ 19.295 Removal or destruction of
distilling material.

Rules for Production of Spirits

(a) Distilling material. Generally, a
proprietor may not remove distilling
material from bonded premises before it
is distilled. However, a proprietor may
remove mash, wort, wash, or other
distilling material:
(1) To plant premises, other than
bonded premises, for use in any
business authorized under § 19.55;
(2) To other premises for use in
processes not involving the production
of spirits, alcohol beverages, or vinegar
by the vaporizing process; or
(3) For destruction.
(b) Residues. A proprietor may
remove the residue of distilling material
not introduced into the production
system from the premises if the liquid
is extracted from the material before
removal and the liquid is not received
at any distilled spirits plant or bonded
wine cellar. A proprietor may return
residue of beer used as distilling
material to the producing brewery. A
proprietor may destroy distilling
material produced and wine and beer
received for use as distilling material.
(c) Records. A proprietor must keep a
record of removal or destruction as
provided in subpart V of this part.

§ 19.301

(26 U.S.C. 5201, 5222, 5223)
§ 19.294

srobinson on DSKHWCL6B1PROD with RULES2

(a) Produced on the bonded premises
where used;
(b) Received from a bonded wine
cellar in the case of wine;
(c) Beer received from a brewery
without payment of tax, or beer that was
removed from a brewery upon
determination of tax; or
(d) Apple cider exempt from tax
under 26 U.S.C. 5042(a)(1).

Removal of fermenting material.

(26 U.S.C. 5222, 5370)
§ 19.296

Fermented materials.

Fermented materials that a proprietor
intends to use in the production of
spirits must be:

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Distillation.

The distillation of spirits must be
done in a continuous system. Distilling
operations are continuous when the
spirits are moved through the various
steps of production as quickly as plant
operation will permit. The proprietor
may move the product through as many
distilling or other production operations
as desired, provided the operations are
continuous. The collection of
unfinished spirits for the purpose of
redistillation is not considered to be a
break in the continuity of the distilling
procedure. However, the quantity and
proof of any unfinished spirits must be
determined and recorded before any
mingling with other materials or before
any further operations involving the
unfinished spirits outside the
continuous system. Before the
production gauge, spirits may be held
only as long as reasonably necessary to
complete the production procedure.
(26 U.S.C. 5178, 5211, 5222)
§ 19.302

Treatment during production.

During production, the proprietor
may purify or refine the spirits by using
any material that will not remain in the
finished product. Juniper berries and
other natural aromatics or their
extracted oils may be used in the
distillation of gin. Spirits may be
percolated through or treated with oak
chips that have not been treated with

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any chemical. The proprietor must
destroy or so treat any materials used in
treatment of spirits, and which do not
remain in the spirits, so as to preclude
the extraction of potable spirits.
(26 U.S.C. 5201)
§ 19.303 Addition of caramel to rum or
brandy and addition of oak chips to spirits.

A proprietor may add caramel that
has no material sweetening properties to
rum or brandy in packages or tanks
prior to production gauge. A proprietor
may add oak chips that have not been
treated with any chemical to packages of
spirits prior to or after the production
gauge. The proprietor must note the use
of oak chips on all transaction records.
(26 U.S.C. 5201)
§ 19.304

Production gauge.

A proprietor must gauge all spirits by
determining the quantity and proof as
soon as reasonably possible after
production is completed. Additional
requirements regarding production
gauges are found in subpart K of this
part.
(26 U.S.C. 5204, 5211)
§ 19.305

Identification of spirits.

Upon completion of the production
gauge, the proprietor must identify
containers of spirits as provided in
subpart S of this part. When the
proprietor intends to enter spirits into
bonded storage for later packaging in
wooden packages, the proprietor may
identify the spirits with the designation
to which they would be entitled if
drawn into wooden packages, followed
by the word ‘‘Designate,’’ for example,
‘‘Bourbon Whisky Designate.’’
(26 U.S.C. 5201, 5206)
§ 19.306

Entry.

(a) Following completion of the
production gauge, a proprietor must
make the appropriate entry for:
(1) Deposit of the spirits on bonded
premises for storage or processing;
(2) Withdrawal of the spirits on
determination of tax;
(3) Withdrawal of the spirits free of
tax;
(4) Withdrawal of the spirits without
payment of tax; or
(5) Transfer of the spirits for
redistillation.
(b) A proprietor may use the
production gauge as the entry gauge
when spirits are:
(1) Deposited for storage or processing
at the same distilled spirits plant; or
(2) Entered for redistillation at the
same distilled spirits plant.
(c) When spirits are entered for
deposit at another distilled spirits plant

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or are entered for withdrawal or
redistillation, the provisions subpart P
of this part will apply.
(26 U.S.C. 5211)
§ 19.307 Distillates containing extraneous
substances.

(a) Use in production. Distillates that
contain substantial quantities of fusel
oil, aldehydes, or other extraneous
substances may be removed from the
distilling system before the production
gauge and promptly added to
fermenting or distilling material at the
distillery where produced.
(b) Use at adjacent bonded wine
cellar. Distillates that contain aldehydes
may be removed, without payment of
tax, to an adjacent bonded wine cellar
for use in fermentation of wine to be
used as distilling material at the
distilled spirits plant from which the
distillates were removed. The removal
of distillates to an adjacent bonded wine
cellar must be done as provided in
§ 19.419. The receipt and use of those
distillates must conform to the
requirements of part 24 of this chapter.
(26 U.S.C. 5201, 5222, 5373)

§ 19.308 Spirits content of chemicals
produced.

All chemicals and chemical
byproducts produced must be
substantially free of spirits before being
removed from bonded premises. The
spirits content of chemicals to be
removed from bonded premises must
not exceed 10 percent by volume unless
the appropriate TTB officer approves
higher limits. A proprietor must test
chemicals for spirits content and
maintain a record of such tests as
required by § 19.584.
(26 U.S.C. 5201)
Disposition of chemicals.

Chemicals that meet the requirements
in § 19.308 may be removed from
bonded premises by pipeline or in
containers marked to show the contents.
The proprietor must determine the
quantities of chemicals removed from
bonded premises and keep records of
removals as required by § 19.586. A TTB
officer may take samples of chemicals.
srobinson on DSKHWCL6B1PROD with RULES2

(26 U.S.C. 5201, 5222)
§ 19.310

Wash water.

Water used in washing chemicals to
remove spirits may be run into a wash
tank or a distilling material tank, or may
be destroyed or disposed of on the
premises.
(26 U.S.C. 5008, 5201)

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§ 19.312

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Physical inventories.

A proprietor must take a physical
inventory of the spirits and denatured
spirits in tanks and other containers in
the production account at the close of
each calendar quarter. A proprietor
must record the results of the inventory
as provided in subpart V of this part and
must show separately spirits and
denatured spirits received for
redistillation. TTB may require
additional inventories be taken at any
time.
(26 U.S.C. 5201)

Rules for Redistillation
§ 19.314

General.

Distillers or processors may redistill
spirits, denatured spirits, articles, and
spirits residues. Some redistillation
requires an approved formula on form
TTB F 5100.51, Formula and Process for
Domestic and Imported Alcohol
Beverages, as specified in §§ 5.26 and
5.27 of this chapter.
(26 U.S.C. 5223)
§ 19.315

Rules for Chemical Byproducts

§ 19.309

Production Inventories

Receipts for redistillation.

(a) A proprietor may receive and
redistill spirits or denatured spirits that:
(1) Have not been removed from bond;
(2) Have been withdrawn from bond
on payment or determination of tax and
returned to bond under subpart Q of this
part;
(3) Have been withdrawn from bond
free of tax or without payment of tax
and returned to bond under subpart T
of this part; or
(4) Have been abandoned to the
United States and sold to the proprietor
without the payment of tax.
(b) A proprietor may also receive and
redistill:
(1) Recovered denatured spirits and
recovered articles returned under
§ 19.454, and
(2) Articles and spirits residues
received under § 19.454.
(26 U.S.C. 5201, 5215, 5223, 5243)
§ 19.316

Redistillation.

(a) TTB has established standards of
identity for the various classes and
types of distilled spirits. Those
standards are found in part 5 of this
chapter. If a proprietor intends to
redistill spirits, the proprietor must
ensure that the redistillation process
does not cause the distillate to be
become ineligible for designation in the
class or type of spirits that the
proprietor intends to produce.
Therefore, spirits must not be redistilled
at a proof lower than that allowed for
the class and type at which the spirits

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were originally produced, unless the
redistilled spirits are to be:
(1) Used in wine production;
(2) Used in the manufacture of gin or
vodka; or
(3) Designated as alcohol.
(b) In order to preserve the class and
type of spirits during the redistillation
process, different kinds of spirits must
be redistilled separately, or with
distilling material of the same kind or
type as that from which the spirits were
originally produced. However, this
restriction does not apply when:
(1) Brandy is redistilled into ‘‘spiritsfruit’’ or ‘‘neutral spirits-fruit’’. In this
case the resulting distillate must not be
used for producing wine;
(2) Whiskey is redistilled into ‘‘spiritsgrain’’ or ‘‘neutral spirits-grain’’;
(3) Spirits originally distilled from
different kinds of material are redistilled
into ‘‘spirits-mixed’’ or ‘‘neutral spiritsmixed’’; or
(4) The spirits are redistilled into
alcohol.
(c) All spirits redistilled after the
production gauge will be treated the
same as if the spirits had been originally
produced by the redistiller. Spirits
recovered by redistillation of denatured
spirits, articles, or spirits residues may
not be withdrawn from bonded
premises except for industrial use or
after denaturation. Otherwise, all
provisions of this part and 26 U.S.C.
chapter 51 applicable to the original
production of spirits will be applicable
to the redistillation of spirits. Nothing in
this section affects any provision of this
chapter relating to the labeling of
distilled spirits.
(26 U.S.C. 5215, 5223)

Subpart M—Storage of Distilled Spirits
§ 19.321

General.

This subpart covers storage operations
at distilled spirits plants. A proprietor
qualified as a warehouseman and
authorized to store bulk distilled spirits
and wines must conduct storage
operations in accordance with the
provisions of this subpart. Subpart V of
this part sets forth recordkeeping
requirements that apply to storage
operations.
(26 U.S.C. 5201)

Receipt and Storage of Spirits and
Wines
§ 19.322 Receipt and storage of bulk
spirits and wines.

(a) Deposit of spirits into storage
account. A proprietor may receive bulk
spirits into the storage account:
(1) From the production facilities of
the same plant;

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(2) By transfer in bond from another
plant;
(3) From customs custody without
payment of tax; or
(4) By return to bulk storage.
(b) Deposit of wine into storage
account. A proprietor may receive bulk
wine into the storage account:
(1) By transfer in bond from a bonded
wine cellar; or
(2) By transfer in bond from another
distilled spirits plant.
(c) Storage. A proprietor may store
spirits or wines in packages, tanks or
portable bulk containers in the storage
account on the bonded premises. If
stored in portable containers, the
containers must be kept so that they can
be readily inspected or inventoried by
TTB officers.
(26 U.S.C. 5201, 5202, 5211, 5212, 5231,
5232, 5601)

Rules for Filling and Changing
Packages
§ 19.324

Filling of packages from tanks.

A proprietor may fill spirits or wines
into packages from storage tanks on
bonded premises. The spirits or wines
in the tank must be gauged before the
filling of packages begins and again
when the filling is finished if the tank
is not empty. The results of the gauges
must be recorded in the records
required by § 19.618.
(26 U.S.C. 5201)
§ 19.325

Change of packages.

A proprietor may transfer spirits or
wines in storage from one package to
another. Each new package must
contain spirits from only one package
except in the case of spirits of 190° or
more proof. Packages of spirits must be
marked as provided in subpart S of this
part. Each package of wine must bear
the same marks as the package from
which the wine was transferred.
(26 U.S.C. 5201)

Rules for Mingling or Blending Spirits

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.326 Mingling or blending of spirits for
further storage.

A proprietor may mingle or blend
spirits in the storage account according
to the following rules:
(a) Spirits distilled at 190° or more of
proof, whether or not later reduced, may
be mingled in storage.
(b) Domestic spirits distilled at less
than 190° of proof may be mingled for
withdrawal or further storage if the
spirits:
(1) Are of the same kind; and
(2) Were produced in the same State.
(c) Imported spirits distilled at less
than 190° of proof may be mingled for

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withdrawal or further storage if the
spirits:
(1) Are of the same kind;
(2) Were produced in the same foreign
country; and
(3) Were treated, blended, or
compounded in the same foreign
country and the U.S. import duty was
paid at the same rate.
(d) Imported spirits distilled at less
than 190° of proof that are recognized as
distinctive products under part 5 of this
chapter may be mingled for withdrawal
or further storage if the spirits:
(1) Are of the same kind;
(2) Were produced by the same
proprietor in the same foreign country;
and
(3) Were treated, blended, or
compounded by the same proprietor in
the same foreign country and the U.S.
import duty was paid at the same rate.
(e) Fruit brandies distilled from the
same kind of fruit at not more than 170°
of proof may, for the sole purpose of
perfecting such brandies according to
commercial standards, be blended with
each other, or with any blend of such
fruit brandies in storage. Rums may, for
the sole purpose of perfecting them
according to commercial standards, be
blended with each other, or with any
blend of rums.
(f) Packaging after mingling or
blending must be done under the
provisions of § 19.324. The mingled or
blended spirits may be returned to the
packages from which they were
dumped, or as many of the packages as
needed.
(26 U.S.C. 5201, 5214)
§ 19.327

Packages dumped for mingling.

A proprietor must examine each
package of spirits to be dumped for
mingling. If any package bears evidence
of loss due to theft or unauthorized
voluntary destruction, the proprietor
must notify the appropriate TTB officer
before dumping the package. Mingled
spirits must be recorded on the tank
record required by §§ 19.592 and
19.593, as appropriate.
(26 U.S.C. 5201)
§ 19.328
spirits.

Determining age of mingled

When spirits are mingled, the age of
the spirits for the entire lot will be the
age of the youngest spirits contained in
the lot.
(26 U.S.C. 5201)
§ 19.329
tanks.

Mingled spirits or wines held in

When wines or spirits of less than
190° of proof are mingled in a tank, the
proprietor must gauge the spirits or
wines in the tank and record the

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mingling gauge on the tank record
prescribed in § 19.592.
(26 U.S.C. 5201)

Use of Oak Chips and Caramel
§ 19.331 Use of oak chips in spirits and
caramel in brandy and rum.

A proprietor may add oak chips that
have not been treated with any chemical
to packages of spirits. The proprietor
must note the use of oak chips on all
transaction records. A proprietor may
add caramel that has no material
sweetening properties to rum or brandy
stored in packages or tanks.
(26 U.S.C. 5201)
(26 U.S.C. 5201)

Storage Inventories
§ 19.333

Physical inventories.

A proprietor must take a physical
inventory of all spirits and wines held
in the storage account in tanks and other
containers (except packages) at the close
of each calendar quarter. A proprietor
must record the results of the inventory
as provided in subpart V of this part.
TTB may require additional inventories
at any time.
(26 U.S.C. 5201)
(26 U.S.C. 5201)

Subpart N—Processing of Distilled
Spirits
§ 19.341

General.

This subpart covers processing
operations at distilled spirits plants. A
proprietor authorized to perform
processing operations must conduct
processing operations in accordance
with the provisions of this subpart.
Subpart V of this part sets forth
recordkeeping requirements that apply
to processing operations. Also, the
provisions of subpart O of this part
apply if a proprietor denatures spirits or
manufactures articles on bonded
premises as part of processing
operations under this subpart.
(26 U.S.C. 5201)

Rules for Receipt and Use of Spirits,
Wines, and Alcoholic Flavoring
Materials
§ 19.342 Receipt of spirits, wines, and
alcoholic flavoring materials for processing.

(a) Receipt of bulk spirits. A
proprietor may receive bulk spirits into
the processing account:
(1) From the production or storage
account at the same plant;
(2) By transfer in bond from another
distilled spirits plant; or
(3) By withdrawal from customs
custody under 26 U.S.C. 5232.

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(b) Receipt of wines. A proprietor may
receive wines into the processing
account:
(1) From the storage account at the
same plant; or
(2) By transfer in bond from a bonded
wine cellar or another distilled spirits
plant.
(c) Receipt of spirits returned to bond.
A proprietor may receive spirits into the
processing account that are returned to
bond under the provisions of 26 U.S.C.
5215.
(d) Receipt of alcoholic flavoring
materials. A proprietor may receive
alcoholic flavoring materials into the
processing account.
(e) Dumping of spirits, wines, and
alcoholic flavoring materials. As
provided in §§ 19.343 and 19.598, the
proprietor must prepare a dump/batch
record when spirits, wines, and
alcoholic flavoring materials are
dumped for use in the processing
account. Spirits, wines, and alcoholic
flavoring materials that are dumped into
the processing account are subject to the
following rules:
(1) Spirits and wines received in bulk
containers or conveyances may be
retained in the containers or
conveyances in which received until
used, but must be recorded as dumped
upon receipt;
(2) Spirits and wines received by
pipeline must be deposited in tanks and
recorded as dumped on receipt; and
(3) Alcoholic flavoring materials may
be retained in the containers in which
received or may be transferred to
another container if the proprietor
marks or otherwise indicates thereon,
the full identification of the original
container, the date of receipt, and the
quantity deposited. Alcoholic flavoring
materials and nonalcoholic ingredients
will be considered dumped when mixed
with spirits or wines.
(f) Gauging. A proprietor must
determine the proof gallon content of
spirits, wines, and alcoholic flavoring
materials at the time of dumping.
Additional information regarding the
gauging of spirits, wines, and alcoholic
flavoring materials is found in subpart
K of this part.

srobinson on DSKHWCL6B1PROD with RULES2

(26 U.S.C. 5201)
(26 U.S.C. 5201)
§ 19.343 Use of spirits, wines, and
alcoholic flavoring materials.

A proprietor must prepare a dump/
batch record in accordance with
§ 19.598 for spirits, wines, alcoholic
flavoring materials, and nonalcoholic
ingredients used in the manufacture of
a distilled spirits product according to
the following rules.

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(a) Dump record. A proprietor must
prepare a dump record when spirits,
wines, or alcoholic flavoring materials
are dumped for use in the manufacture
of a distilled spirits product, and when
spirits are dumped for redistillation in
the processing account.
(b) Batch record. A proprietor must
prepare a batch record to report:
(1) The dumping of spirits that are to
be used immediately and in their
entirety in preparing a batch of a
product manufactured under an
approved formula;
(2) The use of spirits or wines
previously dumped, reported on dump
records and retained in tanks or
receptacles; or
(3) The use of any combination of
ingredients under paragraph (b)(1) or
paragraph (b)(2) of this section in
preparing a batch of product
manufactured under an approved
formula.
(26 U.S.C. 5201)
§ 19.344 Manufacture of nonbeverage
products, intermediate products, or eligible
flavors.

(a) Distilled spirits and wine may be
used for the manufacture of flavors or
flavoring extracts of a nonbeverage
nature as intermediate products to be
used exclusively in the manufacture of
other distilled spirits products on
bonded premises.
(b) Nonbeverage products on which
drawback will be claimed, as provided
in 26 U.S.C. 5111–5114, may not be
manufactured on bonded premises.
Premises used for the manufacture of
nonbeverage products on which
drawback will be claimed must be
separated from bonded premises.
(c) For purposes of computing an
effective tax rate, flavors manufactured
on either the bonded or general
premises of a distilled spirits plant are
not eligible flavors. See § 19.1 for the
definition of the term ‘‘eligible flavor’’
and further restrictions that apply to the
manufacture of an eligible flavor.
(26 U.S.C. 5201)

Obscuration Determination
§ 19.346

Determining obscuration.

A proprietor may determine, as
provided in § 30.32 of this chapter, the
proof obscuration of spirits to be bottled
on the basis of a representative sample
taken from a storage tank before the
transfer of the spirits to the processing
account or from a tank after the spirits
have been dumped for processing,
whether or not combined with other
alcoholic ingredients. The obscuration
will be determined after the sample has
been reduced to within one degree of

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bottling proof. Only water may be added
to a lot of spirits to be bottled for which
the determination of proof obscuration
is made from a sample under this
section. The proof obscuration for
spirits gauged under this section must
be frequently verified by testing samples
taken from bottling tanks before
bottling.
(26 U.S.C. 5204)

Filing Formulas with TTB
§ 19.348

Formula requirements.

A proprietor must obtain approval of
a formula on form TTB F 5100.51 as
provided in §§ 5.26 and 5.27 of this
chapter before a proprietor may:
(a) Blend, mix, purify, refine,
compound, or treat spirits in any
manner which results in a change of
character, composition, class, or type of
the spirits, including redistillation as
provided in § 19.314; or
(b) Produce gin or vodka by other than
original and continuous distillation.
(26 U.S.C. 5201, 5555)

Rules for Bottling, Packaging, and
Removal of Products
§ 19.351

Removals from processing.

(a) Method of removal. A proprietor
may remove spirits or wines from the
processing account in any approved
bulk container, by pipeline, or in bulk
conveyances in compliance with the
provisions of this part. Spirits may be
bottled and cased for removal.
(b) Authorized removals from
processing. A proprietor may remove
from processing:
(1) Spirits, upon tax determination or
withdrawal under 26 U.S.C. 5214 or 26
U.S.C. 7510;
(2) Spirits, to the production account
at the same plant for redistillation;
(3) Bulk spirits, by transfer in bond to
production or processing account at
another distilled spirits plant for
redistillation or further processing;
(4) Spirits or wines, for authorized
voluntary destruction; or
(5) Wines, by transfer in bond to a
bonded wine cellar or to another
distilled spirits plant. However, wine
may not be removed from the bonded
premises of a distilled spirits plant for
consumption or sale as wine.
(c) Exception. Except as provided in
paragraph (b)(2) and (3) of this section,
spirits may not be transferred from the
processing account to the storage
account.
(26 U.S.C. 5001, 5006, 5008, 5201, 5206,
5212, 5214, 5223, 5362)
§ 19.352

Bottling tanks.

Generally, a proprietor must bottle all
spirits from tanks that are listed in the

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notice of registration and have been
certified as accurate. However, if a
proprietor files a letterhead application
and shows the need to do so, the
appropriate TTB officer may authorize
bottling from original packages, tank
trucks, totes or special containers where
it is not practical to use a bottling tank.
In addition, a proprietor may bottle
liqueurs directly from a tank truck or
tote without applying for permission to
TTB if the liqueurs are gauged prior to
unloading and piped directly to the
bottling line.
(26 U.S.C. 5201)
§ 19.353

Bottling tank gauge.

When a distilled spirits product is to
be bottled or packaged, the proprietor
must gauge the product after any
filtering, reduction, or other treatment,
and before bottling or packaging begins.
The gauge must be made at labeling or
package marking proof, and the details
of the gauge must be entered on the
bottling and packaging record required
in § 19.599.
(26 U.S.C. 5201)

A proprietor must prepare a record for
each batch of spirits bottled or packaged
as provided in § 19.599. A proprietor
must keep a separate daily summary
record of spirits bottled or packaged as
provided in § 19.601.

Example. Under paragraph (c) of this
section, a product with a solids content of
less than 600 mg per 100 ml, labeled as
containing 40 percent alcohol by volume and
bottled in a 750 ml bottle, would be
acceptable if the test for alcohol content
found that it contained 39.85 percent alcohol
by volume.

(26 U.S.C. 5201, 5207)

(26 U.S.C. 5201, 5301)

§ 19.355

§ 19.357

§ 19.354

srobinson on DSKHWCL6B1PROD with RULES2

as the equipment and bottles in use will
permit. There must be approximately
the same number of overfills and
underfills for each lot bottled. In no case
will the quantity contained in a bottle
vary from the quantity stated on the
label or bottle by more than plus or
minus:
(1) 1.5 percent for bottles 1.0 liter and
above;
(2) 2.0 percent for bottles 999 mL
through 376 mL;
(3) 3.0 percent for bottles 375 mL
through 101 mL; or
(4) 4.5 percent for bottles 100 mL and
below.
(c) Variations in alcohol content.
Variations in alcohol content, subject to
a normal drop that may occur during
bottling, must not exceed:
(1) 0.25 percent alcohol by volume for
products containing solids in excess of
600 mg per 100 ml;
(2) 0.25 percent alcohol by volume for
all spirits products bottled in 50 or 100
ml size bottles; or
(3) 0.15 percent alcohol by volume for
all other spirits and bottle sizes.
(d)

Bottling or packaging records.

Labels describing the spirits.

Completion of bottling.

(a) Labels affixed to containers must
accurately describe the spirits in the
tanks from which the containers are
filled. The proprietor’s records must
enable TTB officers to readily determine
which label was used on any filled
container.
(b) Additional information regarding
labeling requirements is found in
subpart T of this part and part 5 of this
chapter.

When the contents of a bottling tank
are not completely bottled at the close
of the day, the proprietor must make
entries on the bottling and packaging
record covering the total quantity
bottled that day from the tank. Entries
must be made not later than the
morning of the following business day
unless the proprietor maintains
auxiliary or supplemental records as
provided in § 19.580.

(26 U.S.C. 5201)

§ 19.356

§ 19.358

Alcohol content and fill.

(a) General. At representative
intervals during bottling operations, a
proprietor must examine and test
bottled spirits to determine whether the
alcohol content and quantity (fill) of
those spirits agree with what is stated
on the label or the bottle. A proprietor’s
test procedures must be adequate to
ensure accuracy of labels on the bottled
product. Proprietors must record the
results of all tests of alcohol content and
quantity (fill) in the record required by
§ 19.600.
(b) Variations in fill. Quantity (fill)
must be kept as close to 100 percent fill

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Cases.

(a) On completion of bottling, a
proprietor must place filled bottles with
properly affixed closures in cases. A
proprietor may only fill cases with the
same kind, size, and proof of spirits.
Normally, the cases must be sealed;
however, cases may be temporarily
retained on bonded premises without
being sealed pending the affixing to
bottles of any required labels, State
stamps, or seals. Unsealed cases must be
marked in accordance with subpart S of
this part, and segregated from other
cases until sealed. All cases must be
sealed and marked as provided in

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subpart S of this part before removal
from the bonded premises.
(b) Filled bottles may remain on the
bottling line at the end of the workday
if the identical product will be bottled
on the next bottling shift and if adequate
security measures are in place to
prevent theft.
(26 U.S.C. 5201, 5206)
§ 19.359

Remnants.

When at the end of a bottling run
fewer bottles remain than the number
necessary to fill a case, the remaining
bottles may be placed in a case marked
as a remnant case or kept uncased on
the bonded premises until spirits of the
same kind are again bottled. The
remnant bottles may later be used to
complete the filling of a case, or may be
used for another lawful purpose such as
replacing accidental breakage occurring
on bonded premises.
(26 U.S.C. 5201, 5206)
§ 19.360

Filling packages.

A proprietor may draw spirits into
packages from a tank meeting the
requirements of §§ 19.182 through
19.184. A proprietor must gauge the
packages, report the details of the gauge
on a package gauge record as provided
in § 19.619, and attach a copy of the
package gauge record to each copy of
the bottling and packaging record
covering the product. The packages
must be marked as provided in subpart
S of this part.
(26 U.S.C. 5201)
§ 19.361 Removals by bulk conveyances
or pipelines.

(a) When a proprietor removes spirits
from the processing account in bulk
conveyances or by pipeline, the
proprietor must record the removal on
the bottling and packaging record.
(b) Transfers and withdrawals of bulk
spirits from the processing account must
be performed in accordance with the
provisions of subpart P of this part.
(c) The consignor of the transfer must
forward to the consignee a statement of
composition or a copy of any formula
under which the spirits were processed
for determining the proper use of the
spirits, or for the labeling of the finished
product.
(d) Bulk conveyances must be marked
as provided in subpart S this part.
(26 U.S.C. 5201)
§ 19.362

Rebottling.

When spirits are dumped for
rebottling, the proprietor must prepare
an appropriately modified bottling and
packaging record. If the spirits were
originally bottled by another proprietor,

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the rebottling proprietor must obtain a
statement from the original bottler
consenting to the rebottling.
(26 U.S.C. 5201)
§ 19.363

Reclosing and relabeling.

(a) A proprietor may reclose or relabel
distilled spirits before removal from, or
after return to, bonded premises. The
reclosing or relabeling of spirits
returned to bonded premises must be
done immediately, and the spirits
promptly removed.
(b) If the spirits were originally
bottled by another proprietor, the
relabeling proprietor must have on file
a statement from the original bottler
consenting to the relabeling.
(c) When spirits are relabeled, the
proprietor must have a certificate of
label approval or certificate of
exemption from label approval issued
under part 5 of this chapter for the
labels used on relabeled spirits.
(d) A proprietor must prepare a
separate record under § 19.604 for the
relabeling or reclosing of spirits.
(26 U.S.C. 5201, 5215)
§ 19.364

Bottled-in-bond spirits.

(26 U.S.C. 5201)
Spirits not originally intended for

Spirits produced in the United States
and originally intended for domestic use
may be exported with benefit of
drawback or without payment of tax if
the containers are marked as required by
part 28 of this chapter. A proprietor may
relabel the spirits to show any of the
information required by § 19.519. If a
proprietor intends to file a claim for
drawback on spirits prepared for export
under this section, the proprietor must
follow the provisions of § 28.195b of
this chapter. If a proprietor intends to
withdraw spirits without payment of tax
for export, the proprietor must follow
the procedures in subpart E of part 28
of this chapter.

srobinson on DSKHWCL6B1PROD with RULES2

(26 U.S.C. 5062, 5214)
§ 19.366

Alcohol.

(a) Containers. A proprietor may put
alcohol for industrial use in bottles,
packages, or other containers, subject to
the provisions of subpart S of this part.
A proprietor must follow the provisions
of subpart T of this part when bottling
alcohol for nonindustrial domestic use.

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(26 U.S.C. 5201, 5206, 5235, 5301)

Requirements for Processing
Inventories
§ 19.371 Inventories of wines and bulk
spirits in processing.

A proprietor must take a physical
inventory of all wines and bulk spirits
(except packages) held in the processing
account at the close of each calendar
quarter. The results of the inventory
must be recorded as provided in subpart
V of this part. TTB may require
additional inventories at any time.
(26 U.S.C. 5201)

If a proprietor labels spirits as bottledin-bond for domestic consumption the
labels must meet the requirements in
part 5 of this chapter and the bottles
must bear a closure or other device as
required by subpart T of this part.
§ 19.365
export.

(b) Closures. Closures or other devices
must be affixed to containers of alcohol
as provided in subpart T of this part.
(c) Bottle labels. All bottles of alcohol
for industrial use must have a label that
is securely affixed to the bottle showing
the word ‘‘Alcohol’’ and the name and
plant number of the bottler. The
proprietor may place additional
information on the label if it is not
inconsistent with the required
information.
(d) Case marks. Each case of bottled
alcohol must bear the marks required by
subpart S of this part.

§ 19.372 Physical inventories of bottled
and packaged spirits.

(a) Physical inventories. Generally, a
proprietor must take physical
inventories of bottled and packaged
spirits in the processing account for the
return periods ending June 30 and
December 31, and at any other time that
the appropriate TTB officer requires.
Physical inventories may be taken
within a period of a few days before or
after June 30 or December 31 if:
(1) The period does not include more
than one complete weekend; and
(2) Necessary adjustments are made to
the inventory record to reflect the actual
quantities on hand June 30 or December
31.
(b) Alternate dates. On approval of an
application filed with the appropriate
TTB officer, required physical
inventories may be taken on dates other
than June 30 and December 31 if the
dates established for taking such
inventories:
(1) Coincide with the end of a return
period, and
(2) Are approximately 6 months apart.
(c) Waiver of physical inventory. A
proprietor may file an application to
take only one physical inventory per
year. The appropriate TTB officer may
approve the application if she or he
finds that only one physical inventory
per year will be sufficient to protect the
revenue. However, the requirement for
the waived inventory may be reimposed

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if it becomes necessary for protection of
the revenue.
(d) Notification of physical inventory.
A proprietor must notify the appropriate
TTB officer at least 5 business days in
advance of the date and time of a
physical inventory of bottled or
packaged spirits. TTB officers may be
assigned to verify or supervise physical
inventories taken under the provisions
of this section.
(26 U.S.C. 5201)

Subpart O—Denaturing Operations
and Manufacture of Articles
§ 19.381

General.

This subpart covers the denaturation
of spirits and the manufacture of articles
by proprietors of distilled spirits plants.
Denatured spirits are distilled spirits
that have been rendered unsuitable for
beverage use by the addition of specific
amounts of approved denaturing
materials. For purposes of this subpart,
articles are products that contain
denatured spirits and that are made in
accordance with this subpart or part 20
of this chapter. Proprietors who are
qualified under this part as processors
may make denatured spirits and articles
in accordance with the provisions of
this subpart. Additional requirements
regarding the distribution, use, and
standards for denatured spirits are set
forth in parts 20 and 21 of this chapter.
(26 U.S.C. 5178, 5241)
§ 19.382

Formulas.

(a) Approved formulas. A proprietor
must denature spirits according to an
approved formula listed in part 21 of
this chapter.
(b) Alternate formulas and
denaturants. If a proprietor wishes to
denature spirits by using an alternative
formula or a different denaturant, the
proprietor must apply to TTB for
authorization. A proprietor must receive
written approval from the appropriate
TTB officer before denaturing spirits
using an alternative formula or a
different denaturant. See also §§ 21.5
and 21.91 of this chapter for additional
requirements that apply in these
circumstances.
(26 U.S.C. 5241)

Rules for Denaturing Spirits and
Testing Denaturants
§ 19.383

Gauging for denaturation.

(a) General. A proprietor must gauge
spirits before denaturation and after
denaturation and must record each
gauge in the record of denaturation
required by § 19.606(b). However, a
proprietor is not required to gauge either
spirits that are dumped from previously

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gauged containers or spirits that are
transferred directly to mixing tanks from
gauge tanks where they were gauged.
Measurements of spirits and
denaturants may be made by volume,
weight, accurate mass flow meter, or by
any other device that has been approved
by the appropriate TTB officer.
(b) Denaturation and article
manufacture in a single process. When
a proprietor both denatures spirits and
manufactures articles in a single,
unified process, the proprietor may, in
place of the procedure specified in
paragraph (a) of this section, gauge the
spirits before and after denaturation in
the following manner:
(1) Gauge the spirits to be denatured
by volume, weight, accurate mass flow
meter, or other device or method
approved by the appropriate TTB
officer;
(2) Gauge the denaturants to be used
by volume, weight, accurate mass flow
meter, or other device approved by the
appropriate TTB officer; and
(3) Compute the number of wine
gallons of denatured spirits produced,
and enter this figure in the record
required by § 19.606(b). In calculating
the amount of denatured spirits
produced, the proprietor must not
include in the calculation the amount of
additional chemicals or denaturants
used for article manufacture.
(26 U.S.C. 5204, 5241)
§ 19.384

Adding denaturants to spirits.

(a) When making denatured spirits, a
proprietor must mix the denaturants
and spirits only in packages, tanks or
bulk conveyances and only on bonded
premises. A proprietor must thoroughly
mix the denaturants with the spirits to
ensure that all of the spirits are
effectively denatured.
(b) If a proprietor wishes to use
another method of mixing denaturants
and spirits not prescribed in this
subpart, the proprietor must submit to
the appropriate TTB officer a written
application for approval of the
alternative method in accordance with
§ 19.27. TTB may require that the
proprietor submit additional
information, including a flow diagram
or other graphic representation of the
alternative method, in support of the
application.
srobinson on DSKHWCL6B1PROD with RULES2

(26 U.S.C. 5242)
§ 19.385 Making alcohol or water solutions
of denaturants.

If a proprietor uses a denaturant that
is difficult to dissolve in spirits at
normal working temperatures, that is
highly volatile, or that becomes solid at
normal working temperature, the
proprietor may liquefy or dissolve the

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denaturant in a small amount of spirits
or water prior to its use in the
production of denatured spirits.
However, the proof of the denatured
spirits produced must not fall below the
proof required by the approved formula.
In addition, if alcohol is used as a
solvent, the proprietor must include this
additional alcohol in calculating the
total quantity of spirits denatured in the
batch.
(26 U.S.C. 5242)
§ 19.386

Adjusting pH of denatured spirits.

A proprietor may add trace amounts
of acidic or caustic chemical
compounds to adjust or neutralize the
pH of denatured spirits. However, a
proprietor may not adjust the pH with
any substance that will counteract or
reduce the effect of the denaturants. A
proprietor who adjusts the pH of
denatured spirits must keep a record of
the adjustment with reference to the
formula number of the treated
denatured spirits. The record must
include the kinds and quantities of
chemical compounds used for each
batch of denatured spirits treated.
(26 U.S.C. 5241, 5242)
§ 19.387 Ensuring the quality of
denaturants.

(a) General. Proprietors must ensure
that the materials they receive for use in
denaturing conform to the specifications
prescribed in part 21 of this chapter. In
addition, the appropriate TTB officer
may require that a proprietor test the
quality of denaturants at any time.
(b) Testing. A proprietor must comply
with the following when testing a lot of
denaturants:
(1) Sampling denaturants. Proprietors
must use good commercial practice
when taking samples of denaturants for
quality assurance testing. Samples of
denaturants must be representative of
the lot being sampled.
(2) Third party testing. A proprietor
may employ an outside laboratory or
other appropriate third party to test
samples of denaturants. In the case of a
third party test, the proprietor must
obtain a copy of the analysis or
statement of findings signed by the
chemist who performed the test. On
request, the proprietor must provide to
the appropriate TTB officer samples of
denaturants for quality control testing in
a Government laboratory.
(c) Substandard denaturants. If TTB
or a proprietor finds that a material does
not conform to the specifications for a
denaturant prescribed in part 21 of this
chapter, the proprietor must
immediately terminate use of the
substandard material as a denaturant.
However, the proprietor may continue

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to use the material as a denaturant after
treating or reprocessing the substandard
material to correct the deficiency and
bring the material into conformity with
the applicable specifications.
(26 U.S.C. 5242)

Rules for Storing Denatured Spirits and
Filling Containers
§ 19.388

Storing denatured spirits.

(a) Bonded storage. A proprietor must
store on bonded premises all denatured
spirits produced, received in bond, or
received by return to bond.
(b) Storage methods. A proprietor may
store denatured spirits on bonded
premises in any appropriate tank,
package or container authorized for
filling with denatured spirits. The
proprietor must store containers of
denatured spirits in a manner that
allows for easy inspection and inventory
of the denatured spirits by TTB officers.
A proprietor must store portable
containers of denatured spirits within a
building or structure that protects the
spirits from unauthorized access. A
proprietor may apply to the appropriate
TTB officer for authorization to store
containers of denatured spirits in an
alternative manner in accordance with
§ 19.27.
(c) Tank Records. A proprietor must
maintain a record for tanks in which
denatured spirits are stored in
accordance with § 19.606.
(26 U.S.C. 5201)
§ 19.389

Filling containers from tanks.

(a) Filling portable containers. A
proprietor may fill portable containers
with denatured spirits from tanks on the
bonded premises.
(b) Accounting for denatured spirits in
filling operations. In performing filling
operations under paragraph (a) of this
section, a proprietor must:
(1) Gauge the denatured spirits
remaining in the tanks at the end of
each filling operation;
(2) Maintain a record of each gauge
and document the quantity of denatured
spirits drawn from the tank during each
filling operation; and
(3) Make a record of any spirits lost
during the filling operation.
(c) Gauging requirements. The
provisions of § 19.289(a) and (c) apply
to the filling and gauging of portable
containers. In addition, a proprietor may
withdraw denatured spirits from the
bonded premises in portable containers
based on the filling gauge.
(26 U.S.C. 5201)
§ 19.390

Container marking requirements.

A proprietor must mark packages and
portable containers containing

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denatured spirits in accordance with the
requirements of subpart S of this part.
(26 U.S.C. 5206)

Rules for Mixing and Converting
Denatured Spirits
§ 19.391

Mixing denatured spirits.

(a) Spirits of the same formula. If a
proprietor has two or more different
batches of denatured spirits produced
under the same formula, the proprietor
may mix them on bonded premises.
(b) Spirits of different formulas. A
proprietor may mix denatured spirits
produced under different formulas on
bonded premises for immediate
redistillation at the same plant or at
another plant subject to the provisions
of §§ 19.314, 19.315, and 19.316.
(26 U.S.C. 5241, 5242)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.392 Converting denatured alcohol to a
different formula.

(a) General. A proprietor may convert
specially denatured alcohol (SDA) from
one formula of SDA to another formula
of SDA if the resultant mixture contains
only alcohol and the denaturants listed
for an approved SDA formula and in the
correct concentrations, as set forth in
part 21 of this chapter. Such converted
SDA may be used only as authorized in
part 21 of this chapter.
(b) Converting SDA to SDA Formula
No. 1—(1) All SDA other than SDA
Formulas No. 3–A and No. 30. A
proprietor may convert any SDA, other
than SDA produced under Formulas No.
3–A and No. 30, into SDA Formula No.
1 by adding methyl alcohol and any one
of the other alternative denaturants
listed in § 21.32 of this chapter in
accordance with the formulation
prescribed in that section.
(2) SDA Formulas No. 3–A and No.
30. SDA Formulas No. 3–A and No. 30
specify more methyl alcohol than is
specified for SDA Formula No. 1.
Therefore, in order to convert SDA
produced under Formulas No. 3–A or
No. 30 into SDA under Formula No. 1,
a proprietor must first add a sufficient
amount of ethyl alcohol to the SDA in
question to bring the methyl alcohol
content to the proportion prescribed for
SDA Formula No. 1. After adjusting the
proportion of methyl alcohol, the
proprietor must add the specified
amount of any one of the other
alternative denaturants listed in § 21.32
of this chapter.
(c) Converting SDA to SDA Formula
No. 29. A proprietor may convert any
SDA into SDA Formula No. 29 by
adding the amount of acetaldehyde or
ethyl acetate specified in § 21.56 of this
chapter. However, due to the presence
of other denaturants from the original

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formula, SDA under Formula No. 29
that has been converted from another
SDA formula may be used only as
authorized in § 21.56(b) but not in the
manufacture of vinegar, drugs or
medicinal chemicals, and the conditions
governing use provided in § 21.56(c)
will apply.
(d) Other conversions of SDA. If a
proprietor wishes to make an SDA
formula conversion other than one
authorized in paragraph (a), (b), or (c) of
this section, the proprietor must obtain
approval from the appropriate TTB
officer prior to the conversion.
(e) Conversions to completely
denatured alcohol. A proprietor may
convert any SDA from a formula that
does not contain methyl alcohol or
wood alcohol to any one of the
completely denatured alcohol (CDA)
formulas prescribed in subpart C of part
21 of this chapter, by adding the
denaturants specified for CDA.
(26 U.S.C. 5242)

Rules for Restoration and
Redenaturation, Inventories, and
Manufacture of Articles; Records
Required
§ 19.393 Restoration and redenaturation of
recovered denatured spirits and recovered
articles.

(a) Recovered denatured spirits and
articles. A proprietor may receive
recovered denatured spirits and
recovered articles on bonded premises
for restoration (including redistillation,
if necessary), or redenaturation, or both,
as provided in subpart Q of this part.
However, the proprietor may not
withdraw the spirits from bonded
premises except for industrial use or
after redenaturation.
(b) Spirits or articles retaining some
denaturants. If recovered denatured
spirits or recovered articles are to be
redenatured and do not require the full
amount of denaturants for
redenaturation, the proprietor must
make an entry to that effect in the record
of denaturation required by § 19.606(b).
(26 U.S.C. 5242)
§ 19.394

Inventory of denatured spirits.

A proprietor must take a physical
inventory of all denatured spirits in the
processing account at the close of each
calendar quarter. The proprietor must
record the results of that inventory as
provided in subpart V of this part. TTB
may require additional inventories at
any time.
(26 U.S.C. 5201)

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§ 19.395

Manufacture of articles.

A proprietor must manufacture, label,
mark and dispose of articles in
accordance with part 20 of this chapter.
(26 U.S.C. 5273)
§ 19.396

Required records.

(a) Records of denaturing operations.
A proprietor who denatures spirits must
maintain daily records of denaturing
operations in accordance with § 19.606.
(b) Records of manufacture of articles.
A proprietor who manufactures articles
must maintain daily records in
accordance with § 19.607.
(26 U.S.C. 5241)

Subpart P—Transfers, Receipts, and
Withdrawals
§ 19.401

Authorized transactions.

(a) General. A proprietor of a distilled
spirits plant may transfer spirits and
wines in bond to other distilled spirits
plants, receive spirits and wines in bond
from other distilled spirits plants,
receive spirits from customs custody,
and withdraw spirits from the distilled
spirits plant without payment of tax or
free of tax under certain conditions.
This subpart sets forth the rules that a
proprietor must follow when so
transferring, receiving, or withdrawing
spirits and wines and also includes
related rules for taking samples and
securing conveyances.
(b) Other transfers and withdrawals.
For withdrawals of spirits from bonded
premises on determination or payment
of tax, see subpart I of this part. For
rules regarding withdrawals for
exportation and transfers to foreign
trade zones or to customs bonded
warehouses, see part 28 of this chapter.
(26 U.S.C. 5181, 5212, 5213, 5214, 5232,
5362, 5373)

Transfers Between Bonded Premises
§ 19.402

Authorized transfers in bond.

The IRC allows a proprietor to transfer
and receive spirits, wines, and
industrial alcohol as provided in
paragraphs (a) through (c) of this
section.
(a) Spirits. Bulk spirits or denatured
spirits may be transferred in bond
between the bonded premises of plants
qualified under 26 U.S.C. 5171 or 26
U.S.C. 5181 in accordance with
§§ 19.403 and 19.733. However, spirits
or denatured spirits produced from
petroleum, natural gas, or coal may not
be transferred to alcohol fuel plants.
(b) Wine. Wines may be transferred:
(1) From a bonded wine cellar to the
bonded premises of a distilled spirits
plant;

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(2) From the bonded premises of a
distilled spirits plant to a bonded wine
cellar; and
(3) Between the bonded premises of
distilled spirits plants.
(c) Alcohol for industrial purposes.
Alcohol bottled for industrial purposes
in accordance with § 19.366 and subpart
S of this part, may be transferred
between the bonded premises of
distilled spirits plants in the same
manner as provided in §§ 19.403
through 19.407 for bulk distilled spirits.
(26 U.S.C. 5181, 5212, 5362)
§ 19.403
bond.

Application to receive spirits in

(a) When the proprietor of a distilled
spirits plant qualified under 26 U.S.C.
5171 or of an alcohol fuel plant
qualified under 26 U.S.C. 5181 wishes
to have spirits or denatured spirits
transferred in bond to his plant from
another distilled spirits plant, the
proprietor must complete an application
on form TTB F 5100.16, Application for
Transfer of Spirits and/or Denatured
Spirits in Bond, in triplicate, and
forward it to the appropriate TTB officer
for approval. A proprietor is not
required to submit an application on
TTB F 5100.16 for transfers from
customs custody under 26 U.S.C. 5232.
(b) TTB will not approve the
application submitted under paragraph
(a) of this section unless the proprietor’s
operations bond or unit bond either is
in the maximum penal sum amount or
is sufficient to cover the tax on the
spirits or denatured spirits to be
transferred in addition to all other
liabilities chargeable against the bond. If
TTB approves the application, TTB will
return two signed copies of the
approved application to the proprietor.
(c) Upon receipt of an approved
application from TTB, the proprietor
must retain one of the signed copies for
his files and forward the other signed
copy to the consignor that will ship the
spirits or denatured spirits.
(26 U.S.C. 5005, 5112)
§ 19.404

Termination of application.

srobinson on DSKHWCL6B1PROD with RULES2

A proprietor may at any time
terminate an approved application on
form TTB F 5100.16 by retrieving the
consignor’s copy and returning it
together with his own approved copy to
the appropriate TTB officer for
cancellation.
(26 U.S.C. 5005)
§ 19.405

Consignor for in-bond shipments.

(a) General. A proprietor who ships
spirits, denatured spirits, or wines by
transfer in bond is the ‘‘consignor’’ of the
shipment for purposes of this part. The
following rules apply to these transfers:

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(1) A consignor who is a proprietor of
a distilled spirits plant must prepare a
transfer record in accordance with
§ 19.620 to cover the transfer in bond
of—
(i) Spirits or denatured spirits to
another distilled spirits plant pursuant
to an approved application on form TTB
F 5100.16, Application for Transfer of
Spirits and/or Denatured Spirits in
Bond;
(ii) Wine to the bonded premises of a
distilled spirits plant or a bonded wine
cellar; or
(iii) Spirits or denatured spirits to an
alcohol fuel plant pursuant to an
approved application on TTB F 5100.16,
Application for Transfer of Spirits and/
or Denatured Spirits in Bond; and
(2) A consignor who is a proprietor of
an alcohol fuel plant must prepare a
transfer record in accordance with
§ 19.620 to cover the transfer in bond of
spirits to the bonded premises of a
distilled spirits plant pursuant to an
approved application on TTB F 5100.16.
(b) Disposition of the transfer record.
On completion of lading or transfer by
pipeline, the consignor must retain one
copy of the transfer record and one copy
of any accompanying document and
must forward the original transfer
record and any accompanying
document to the consignee. If the
shipment is made by truck, the original
transfer record and accompanying
documents must accompany the
shipment.
(c) Multiple shipments. As a general
rule, a consignor must prepare a transfer
record for each conveyance. However, a
consignor may prepare a single transfer
record that covers all packages of spirits
shipped by truck on the same day to the
same plant. In such a case, the
consignor must prepare a shipment and
delivery order for each shipment
showing the number of packages, their
serial numbers or other package
identification, the name of the producer,
warehouseman, or processor, and the
serial numbers of any seals or other
security devices applied to the truck.
The shipping and delivery order must
be properly authenticated by the
consignor and must constitute a
complete record of the spirits
transferred in each truck each day. The
consignor must retain a copy of each
shipping and delivery order. After
lading the last truck for the day, the
consignor must retain one copy of the
single transfer record and one copy of
any accompanying document and
forward the original single transfer
record and accompanying document to
the consignee.
(d) Packages. When a consignor
transfers spirits in packages, the

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consignor must weigh each package
except in the following circumstances:
(1) When transferring the spirits in a
secured conveyance;
(2) When the consignor has securely
sealed the individual packages; or
(3) When the appropriate TTB officer
waives this requirement upon a finding
that there will be no jeopardy to the
revenue.
(e) Temporary serial numbers. When
packages are weighed at the time of
shipment, the consignor must assign
temporary serial numbers to the
packages and show for each package its
gross shipment weight on a package
gauge record prepared in accordance
with § 19.619. A copy of the package
gauge record must accompany each
original or copy of the transfer record.
(f) Bulk conveyances and pipelines.
When a consignor transfers spirits,
denatured spirits, or wines in bulk
conveyances or by pipelines, the
consignor must gauge the spirits,
denatured spirits, or wines and record
the quantity determined on the transfer
record required under § 19.620 or
§ 24.309 of this chapter. The consignor
must secure bulk conveyances of spirits
or denatured spirits pursuant to § 19.441
of this part.
(26 U.S.C. 5212, 5362)
§ 19.406 Reconsignment of in-bond
shipments.

A consignor may reconsign an inbond shipment of spirits, denatured
spirits, or wines prior to, or upon,
arrival of the shipment at the premises
of the consignee for any good faith
reason. The consignor may reconsign
the shipment to himself or to another
consignee who is qualified to receive
the shipment and has an adequate bond.
In either case, an Application for
Transfer of Spirits and/or Denatured
Spirits in Bond on form TTB F 5100.16
must have been previously approved for
the new consignee, except that an
approved TTB F 5100.16 is not required
for the transfer of wine. The bond of the
new consignee will cover the shipment
while in transit after reconsignment.
When a consignor reconsigns a
shipment, the consignor must prepare a
new transfer record prominently marked
with the word ‘‘Reconsignment’’. The
consignor must also notify the original
consignee that the transfer has been
cancelled.
(26 U.S.C. 5212, 5362)
§ 19.407

Consignee premises.

(a) General. A proprietor who receives
spirits, denatured spirits, or wines by
transfer in bond is the ‘‘consignee’’ of the
shipment for purposes of this part.
Upon arrival of an in-bond shipment at

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the consignee’s premises or at the
destination point specified in the
carrier’s transportation documents, the
consignee must:
(1) Examine each conveyance to
determine whether the securing devices,
if any, are intact upon arrival. If the
securing devices are not intact, the
consignee must immediately notify the
appropriate TTB officer before removal
of any spirits from the conveyance;
(2) Determine, record, and report any
losses as required by subpart R of this
part;
(3) Acknowledge receipt of the
shipment on the transfer record as
required by § 19.621 or § 24.309 of this
chapter and retain the original of the
transfer record and any accompanying
documents for his files. Retained copies
of transfer records will become deposit
records for purposes of this part; and
(4) Identify separately any spirits that
were produced at an alcohol fuel plant.
Those spirits may not be withdrawn,
used, sold or otherwise disposed of for
other than fuel use.
(b) Packages. When a consignee
receives spirits in packages, the
consignee must weigh each package.
The consignee must record the receiving
weight of each package on the
accompanying package gauge record or
on a list according to temporary package
serial numbers prepared by the
consignor. A copy of the package gauge
record or list must remain with the
original transfer record. However, the
consignee is not required to weigh each
package when:
(1) The transfer is made in a secured
conveyance and the securing devices are
intact on arrival;
(2) The individual packages were
sealed by the consignor and are intact
on arrival; or
(3) The requirement for weighing the
packages at the consignor’s premises has
been waived under § 19.405(d)(3).
(c) Bulk conveyances and pipelines.
When a consignee receives spirits,
denatured spirits, or wines by bulk
conveyance or by pipeline, the
consignee must:
(1) Make a gauge and record the
results on the transfer record in
accordance with § 19.621 or § 24.309 of
this chapter. However, the appropriate
TTB officer may waive the gauging
requirement for receipts by pipeline
upon a finding that there will be no
jeopardy to the revenue; and
(2) Ensure that each conveyance is
empty and has been thoroughly drained.
(26 U.S.C. 5204, 5213, 5362)

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Receipt of Spirits From Customs
Custody

Marking Requirements for Imported
Spirits

§ 19.409

§ 19.414
spirits.

General.

A proprietor may withdraw from
customs custody spirits imported or
brought into the United States in bulk
containers for transfer of those spirits
without payment of tax to the bonded
premises of the proprietor’s distilled
spirits plant. The proprietor may receive
these spirits either in bulk containers or
by pipeline. Spirits received on bonded
premises under this section may be:
(a) Withdrawn for any purpose
authorized by chapter 51 of the IRC in
the same manner as domestic spirits; or
(b) Redistilled or denatured only at
185° or more of proof. For the
requirements regarding transfers of bulk
spirits from customs custody to the
bonded premises of a distilled spirits
plant, see subpart L of part 27 of this
chapter.
(26 U.S.C. 5232)
§ 19.410

Age and fill date.

For purposes of this part, the age and
fill date for spirits imported or brought
into the United States will be:
(a) The claimed age, as shown on the
documentation required under part 5 of
this chapter; and
(b) The date that packages of spirits
are released from customs custody or
are filled on the bonded premises of a
distilled spirits plant.
(26 U.S.C. 5201)
§ 19.411

Recording gauge.

(a) Receipts into storage. When a
proprietor receives into the storage
account packages of spirits from
customs custody, the proprietor must
use the last official gauge to compute
and record the average content of the
packages received in the storage records
required under § 19.590. That gauge also
will constitute the basis for entries on
the package summary records required
under § 19.591. If the last official gauge
indicates a substantial variation in the
contents of the packages, the proprietor
must group the packages into lots
according to their approximate contents
and assign a separate lot identification
to each group of packages, based on the
date the packages were received on
bonded premises.
(b) Receipts into processing. When a
proprietor receives into the processing
account packages of spirits from
customs custody the proprietor must
determine the proof gallons of spirits
received in each package. The
determination may be made by using
the last official gauge.
(26 U.S.C. 5232)

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Marks on containers of imported

(a) General. Except as provided in
paragraph (c) of this section, when a
proprietor receives imported bulk
containers of spirits on bonded premises
under § 19.409 or fills packages from
imported bulk containers on the
proprietor’s bonded premises, each
container or filled package must be
marked with:
(1) The name of the importer;
(2) The country of origin of the spirits;
(3) The kind of spirits;
(4) In the case of filled packages, the
package identification number as
required under § 19.485 or the package
serial number as required under
§ 19.490. Package identification
numbers and package serial numbers
must be preceded by the symbol ‘‘IMP’’;
(5) If the package is filled on bonded
premises, the date of fill;
(6) The proof; and
(7) The proof gallons of spirits in the
package.
(b) Responsibility for marks. Except as
otherwise provided in paragraph (c) of
this section, the proprietor who receives
packages of imported spirits under
§ 19.409 is responsible for ensuring that
the required marks are placed on the
packages and for preparing the required
deposit records.
(c) Exception. A proprietor is not
required to place or ensure the
placement of prescribed marks on
packages when the spirits will be
removed from the packages within 30
days after receipt at the distilled spirits
plant. However, the proprietor must still
assign package identification numbers
or package serial numbers for use on
deposit records and other transaction
forms, records, or reports.
(26 U.S.C. 5206)
§ 19.415 Marks on containers of Puerto
Rican and Virgin Islands spirits.

(a) Packages from Puerto Rico. When
a proprietor receives packages of Puerto
Rican spirits on bonded premises under
the provisions of this subpart, the
markings required under § 26.40 of this
chapter will be acceptable in place of
the markings required under § 19.414.
However, the proprietor still must mark
each package to show the date of fill as
required under § 19.410, and must
include on each package the words
‘‘Puerto Rican’’ or the abbreviation
‘‘P.R.’’.
(b) Packages from the Virgin Islands.
When a proprietor receives packages of
Virgin Islands spirits on bonded
premises under the provisions of this

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subpart, the markings required under
§ 26.206 of this chapter will be
acceptable in place of the markings
required under § 19.414. However, the
proprietor still must mark each package
to show the date of fill as required
under § 19.410, and must include on
each package the words ‘‘Virgin Islands’’
or the abbreviation ‘‘V.I.’’.
(c) Portable bulk containers. Portable
bulk containers of Puerto Rican or
Virgin Islands spirits that are filled on
premises bonded under this part must
be marked in accordance with § 19.484.
In addition, those containers must be
marked with the serial number of any
approved formula under which they
were produced and with the words
‘‘Puerto Rican’’ or the abbreviation ‘‘P.R.’’
or ‘‘Virgin Islands’’ or the ‘‘V.I.’’, as
applicable.
(d) Cases of bottled alcohol. Alcohol
from Puerto Rico or the Virgin Islands
that is bottled and cased on bonded
premises must be marked as required by
§ 19.496. In addition, the words ‘‘Puerto
Rican’’ or ‘‘Virgin Islands’’ or the
abbreviation ‘‘P.R.’’ or ‘‘V.I.’’,
respectively, must precede the word
‘‘alcohol’’ designation on the cases.
(26 U.S.C. 5206, 5235)

Spirits Withdrawn Without Payment of
Tax

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.418 Authorized withdrawals without
payment of tax.

(a) A proprietor may withdraw spirits
from bonded premises without payment
of tax for:
(1) Export, as authorized under 26
U.S.C. 5214(a)(4);
(2) Transfer to customs manufacturing
bonded warehouses, as authorized
under 19 U.S.C. 1311;
(3) Transfer to foreign trade zones, as
authorized under 19 U.S.C. 81c;
(4) Supplies for certain vessels and
aircraft, as authorized under 19 U.S.C.
1309;
(5) Transfer to customs bonded
warehouses, as authorized under 26
U.S.C. 5066 or 5214(a)(9);
(6) Use in wine production, as
authorized under 26 U.S.C. 5373;
(7) Transfer to any university, college
of learning, or institution of scientific
research for experimental or research
use as authorized under 26 U.S.C.
5312(a);
(8) Research, development or testing,
as authorized under 26 U.S.C.
5214(a)(10); or,
(9) Use on bonded wine cellar
premises in the production of wine and
wine products which will be rendered
unfit for beverage use, as authorized
under 26 U.S.C. 5362(d).
(b) If a proprietor withdraws spirits
for any of the purposes listed under

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paragraphs (a)(1) through (a)(5) of this
section, the proprietor must do so in
accordance with the provisions of part
28 of this chapter.
(19 U.S.C. 1311);
(26 U.S.C. 5066, 5214, 5312, 5373)
§ 19.419 Withdrawals of spirits for use in
wine production.

A proprietor may withdraw wine
spirits without payment of tax for
transfer in bond to a bonded wine cellar
for use in wine production. The
proprietor, as consignor, must prepare a
transfer record in accordance with
§ 19.620. In addition, the proprietor
must prepare a package gauge record in
accordance with § 19.619 and must
attach it to the transfer record, unless
the wine spirits are already in packages
and are being withdrawn on the
production or filling gauge.
(26 U.S.C. 5214, 5373)
§ 19.420 Withdrawals of spirits without
payment of tax for experimental or research
use.

A scientific university, college of
learning, or institution of scientific
research qualified under § 19.35 may
withdraw spirits from bonded premises
without payment of tax for experimental
or research use. In order to withdraw a
specific quantity of spirits for
experimental or research use, the
qualified institution must file a
letterhead application with, and receive
written approval from, the appropriate
TTB officer.
(26 U.S.C. 5312)
§ 19.421 Withdrawals of spirits for use in
production of nonbeverage wine and
nonbeverage wine products.

A proprietor may withdraw spirits
without payment of tax for transfer to a
bonded wine cellar for use in the
production of nonbeverage wine and
nonbeverage wine products in
accordance with part 24 of this chapter.
The proprietor, as consignor, must
prepare a transfer record in accordance
with § 19.620. In addition, the
proprietor must prepare a package gauge
record in accordance with § 19.619 and
must attach it to the transfer record,
unless the wine spirits are already in
packages and are being withdrawn on
the production or filling gauge.
(26 U.S.C. 5214)

Spirits Withdrawn Free of Tax
§ 19.424
tax.

Authorized withdrawals free of

A proprietor may withdraw spirits
from bonded premises free of tax as
provided in this chapter:

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(a) Upon receipt of a signed
photocopy of a permit to withdraw and
use alcohol free of tax issued on form
TTB F 5150.9 under part 22 of this
chapter;
(b) Upon receipt of a signed
photocopy of a permit to procure spirits
free of tax for use of the United States
or any governmental agency, any State,
any political division of a State, or the
District of Columbia for nonbeverage
purposes as provided in 26 U.S.C.
5214(a)(2) issued on form TTB F
5150.33 under part 22 of this chapter;
(c) Upon receipt of a valid permit
issued under this part to procure spirits
by and for the use of the United States
under the provisions of 26 U.S.C. 7510
for purposes other than those specified
in paragraph (b) of this section;
(d) If the spirits are specially
denatured—
(1) Upon receipt of a signed
photocopy of a permit to procure
specially denatured spirits issued on
TTB F 5150.9 under part 20 of this
chapter; or
(2) For export;
(e) If the spirits are completely
denatured, for any lawful purpose; or
(f) If the spirits are contained in an
article.
(26 U.S.C. 5214, 7510)
§ 19.425

Withdrawal of spirits free of tax.

When a proprietor ships tax-free
spirits to a permit holder as provided
under § 19.424, the proprietor must:
(a) Ship the spirits to the consignee
designated in the permit;
(b) Ship the spirits in approved
containers;
(c) Gauge each container, unless the
spirits are in cases or are withdrawn
based on the production or filling gauge;
(d) Prepare a package gauge record in
accordance with § 19.619, and attach it
to the record of shipment if the spirits
are in packages that are to be gauged;
(e) Prepare a record of shipment
(shipping invoice, bill of lading, or other
document serving the same purpose) for
each shipment and forward the original
to the consignee as provided in § 19.625;
and
(f) Secure all bulk conveyances as
provided in § 19.441.
(26 U.S.C. 5214)
§ 19.426 Withdrawal of spirits by the
United States.

(a) Withdrawal for nonbeverage use—
(1) Permit required. Agencies of the
United States Government that wish to
obtain either specially denatured spirits
or spirits free of tax for nonbeverage
purposes must apply for and receive a
permit on form TTB F 5150.33 or must
have a previously issued permit on ATF

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Form 1444. TTB issues permits to
Government agencies for:
(i) Withdrawal and use of specially
denatured spirits under part 20 of this
chapter;
(ii) Withdrawal and use of alcohol
free of tax for nonbeverage purposes
under part 22 of this chapter; and
(iii) Importation and use of alcohol
free of tax for nonbeverage purposes
under part 27 of this chapter.
(2) Orders and shipments. In order to
obtain spirits under this section, the
United States Government agency must
forward a copy of a signed permit to the
distilled spirits plant for the initial
purchase. Later orders with the same
plant may refer to that permit number.
In the case of a Government agency
holding a single permit for use by its
subagencies, the copy of the signed
permit must contain an attachment
listing all subagencies authorized to
obtain spirits under that permit. For
each shipment that a proprietor makes
to a Government agency under this
section, the proprietor must prepare a
record of shipment and forward the
original to the Government agency as
provided in § 19.625.
(b) Withdrawal for beverage use.
Agencies of the United States
Government that wish to obtain distilled
spirits free of tax for beverage purposes
under 26 U.S.C. 7510 must provide a
proper purchase order signed by the
head of the agency or an authorized
designee. Each case of spirits withdrawn
must bear a plain mark ‘‘For Use of the
United States’’ in addition to the marks
required by subpart S of this part. For
each withdrawal under this paragraph,
the proprietor must prepare a record
containing the information required by
§ 19.611 for a record of tax
determination and must mark this
record ‘‘Free of Tax for Use of the United
States.’’
(26 U.S.C. 7510);
(26 U.S.C. 5271, 5313)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.427 Removal of denatured spirits and
articles.

(a) Specially denatured spirits. (1)
Specially denatured spirits withdrawn
by a proprietor free of tax under
§ 19.424(d) must be shipped in the type
of containers authorized under subpart
S to the consignee designated on the
permit. Bulk conveyances used to
transport specially denatured spirits
must be secured as required by § 19.441,
and the proprietor must prepare a
record of shipment in accordance with
§ 19.625. If a proprietor withdraws
specially denatured spirits for export or
for transfer to a foreign trade zone for
export or for storage pending export, the

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provisions of part 28 of this chapter will
apply to the withdrawal.
(2) A proprietor may transfer domestic
specially denatured spirits to qualified
users located in a foreign trade zone for
use in the manufacture of articles under
part 20 of this chapter. The ‘‘alcohol’’, as
defined in part 20 of this chapter, that
is contained in domestic specially
denatured spirits must have been
produced entirely in the United States
or Puerto Rico.
(b) Completely denatured alcohol. No
permit, application, or notice is required
for the removal of completely denatured
alcohol from bonded premises.
(c) Samples of denatured spirits. (1) A
proprietor may take samples of
denatured spirits free of tax that are
necessary for the conduct of business. A
proprietor may furnish samples of
specially denatured spirits:
(i) To dealers in, and users of,
specially denatured spirits in advance of
sales; or
(ii) To applicants or prospective
applicants for permits to use specially
denatured spirits for experimental
purposes or for use in preparing
samples of a finished product for
submission to TTB.
(2) A proprietor must maintain
records to ensure that samples of
specially denatured spirits furnished to
each nonpermittee do not exceed 5
gallons per calendar year. However, a
proprietor may furnish samples in
excess of 5 gallons to a nonpermittee if
the consignee has provided the
proprietor with a letterhead application
approved under § 20.252 of this chapter.
The proprietor must retain the approved
letterhead application on file as a part
of the record of transaction. For each
shipment of a sample over the 5 gallon
limit, the proprietor must prepare a
record of shipment and forward the
original to the consignee as provided in
§ 19.625. Each such sample must bear a
label showing the word ‘‘Sample’’, the
words ‘‘Specially Denatured Alcohol’’ or
‘‘Specially Denatured Rum’’ as
applicable, the formula number, and the
proprietor’s name, address, and plant
number. The proprietor must maintain
records of samples of less than 5 gallons
as provided in § 19.616.
(d) Articles. A proprietor may remove
articles from bonded premises in
accordance with part 20 of this chapter.
(19 U.S.C. 81c);
(26 U.S.C. 5214, 5271)
§ 19.428

Reconsignment.

(a) A consignor may reconsign a
shipment of spirits or specially
denatured spirits withdrawn free of tax
under § 19.424. The shipment may be

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reconsigned while in transit or upon
arrival at the consignee’s premises for
any bona fide reason. The consignor
may reconsign the shipment:
(1) To himself;
(2) To a proprietor for return to
bonded premises under § 19.454; or
(3) To another consignee holding a
valid permit issued under part 20 or 22
of this chapter.
(b) In the case of reconsignment to a
proprietor for return to bonded premises
under § 19.454, the distilled spirits
plant proprietor who will return the
spirits to bond must file a consent of
surety on form TTB F 5000.18 to extend
the terms of the operations or unit bond
to cover the return of the spirits.
(c) When a consignor reconsigns a
shipment, the consignor must cancel the
initial record of shipment and prepare a
new record of shipment marked
‘‘Reconsignment’’. The consignor must
annotate the copies of the canceled
record of shipment and the new record
of shipment to cross-reference each
other.
(26 U.S.C. 5201)

Spirits Withdrawn on Production
Gauge
§ 19.431 Withdrawal of spirits on
production gauge.

A proprietor may withdraw spirits
from bonded premises for any lawful
purpose based on the production gauge
when it is made in accordance with
§ 19.289(b). Spirits may be withdrawn
without payment of tax for export based
on the production gauge when it is
made under § 19.289(c). When spirits
that are to be withdrawn on
determination of tax on the original
gauge are transferred in bond, all copies
of the transfer record required by
§ 19.620 must be marked ‘‘Withdrawal
on Original Gauge’’.
(26 U.S.C. 5204)

Rules for Taking Samples of Spirits
§ 19.434 Spirits withdrawn from bonded
premises.

(a) Laboratory samples. A proprietor
may withdraw spirits without payment
of tax, or may withdraw wine spirits or
brandy free of tax, to the proprietor’s
laboratory, to the laboratory of an
affiliated or subsidiary corporation, or,
if approved by the appropriate TTB
officer, to a recognized commercial
laboratory. The samples must be used
only for testing or analysis to determine
the quality or character of the finished
product and must be withdrawn in the
minimum amounts necessary for the
purpose.
(b) Customer samples. If a bona fide
purchase agreement exists that is

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contingent upon quality approval, a
proprietor may furnish to a prospective
customer a sample of spirits not
exceeding 1 liter for quality testing. A
proprietor may furnish a sample not to
exceed 1 liter to a prospective customer
for quality testing in anticipation of a
purchase agreement if the customer is
authorized to receive bulk spirits for
industrial use.
(c) Research or development. A
proprietor may withdraw spirits without
payment of tax for research or
development testing, for testing of
processes, systems, or materials, or for
the testing of equipment relating to
distilled spirits or distilled spirits plant
operations. The amount withdrawn
must be limited to the amount
reasonably necessary to conduct the
test. If the test is to be conducted by
someone other than the proprietor, the
proprietor must obtain a written
statement, executed by the consignee,
agreeing to maintain records of the
receipt, use, and disposition of all
spirits received for purposes of the test.
The statement must specify that records
of operations will be available during
regular business hours for inspection by
TTB officers.
(d) Conditions. The following
conditions apply to the withdrawal and
testing of samples under this section:
(1) The spirits may not be used for
consumer testing or other market
analysis;
(2) The proprietor must maintain the
records specified in § 19.616; and
(3) Remnants or residues of spirits not
used during testing must be destroyed
or returned to the bonded premises of
the proprietor.
(e) Liability for tax. The proprietor
must pay the tax on any samples of
spirits withdrawn, used, or disposed of
in a manner not authorized by this
section.
(f) Losses. When spirits are lost before
use for a purpose authorized under this
section, the proprietor must pay the tax
or must file a claim for remission of tax
liability in accordance with § 19.263.
(26 U.S.C. 5214, 5173)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.435 Samples used on bonded
premises.

A proprietor may take samples of
spirits for research, development,
testing, or laboratory analysis conducted
in a laboratory located on the bonded
premises. The purposes, conditions, and
limitations specified for samples under
§ 19.434 will also apply to samples used
under this section.
(26 U.S.C. 5008)

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§ 19.436

Taxpayment of samples.

When a proprietor is required to pay
tax on samples under § 19.434(f), the
proprietor may include the tax on the
next semimonthly or quarterly tax
return, as appropriate, if qualified to
defer payment of tax. If a proprietor is
not qualified to defer payment of tax,
the proprietor must prepay the tax on
form TTB F 5000.24. See subpart I of
this part for rules regarding the payment
of taxes.
(26 U.S.C. 5005, 5061)
§ 19.437

Labels.

(a) On each container of spirits
withdrawn under § 19.434, the
proprietor must affix a label showing
the following information:
(1) The proprietor’s name and plant
number;
(2) The date withdrawn;
(3) The purpose for which withdrawn;
(4) The kind of spirits;
(5) The size and the proof of the
sample, if known; and
(6) The name and address of the
consignee, if the spirits are removed
other than to the proprietor’s adjacent or
contiguous premises.
(b) The labeling prescribed under
paragraph (a) of this section is not
required when the sample container
bears a label approved under part 5 of
this chapter and subpart S of this part
and the sample is removed from bonded
premises to the general premises of the
same distilled spirits plant or to any
laboratory owned and operated by the
proprietor of that distilled spirits plant.
(26 U.S.C. 5206, 5214, 5373)

Securing Conveyances
§ 19.441

Securing of conveyances.

(a) Construction for securing. When
the securing of a conveyance is required
by this part, the conveyance must be
constructed so that all openings,
including valves, may be closed and
secured.
(b) Approval of securing devices.
Seals, locks or other devices on
conveyances used to transport taxpaid
spirits, denatured spirits transferred in
bond, or denatured spirits withdrawn
free of tax do not require approval by
TTB. On the other hand, all seals, locks,
or devices used on conveyances in
which spirits are transferred in bond,
withdrawn free of tax, or withdrawn
without payment of tax, require
approval by the appropriate TTB officer
before use. However, cap seals at least
three-fourths of an inch in diameter,
ball-strap-type (railroad) seals with a
strap at least five-sixteenths of an inch
wide, and locking security cable with at
least a 1⁄16-inch cable may be used on

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9139

conveyances without approval by TTB.
Such seals must:
(1) Be made of durable materials;
(2) Bear the plant registration number
or the name, or readily recognizable
abbreviation of the name, of the
proprietor;
(3) Bear a serial number, including
letter prefixes or suffixes, which will
not be repeated within the following 6month period;
(4) Be durably and legibly marked;
and
(5) Be constructed to show evidence
of tampering.
(c) Furnishing and affixing securing
devices. The proprietor must furnish
and affix any seals, locks or other
devices used on conveyances. However,
TTB may require any conveyance in
which spirits are transferred in bond,
withdrawn free of tax, or withdrawn
without payment of tax, to be secured
by a device furnished by TTB and
affixed by a TTB officer. The securing of
a conveyance will be done:
(1) As soon as the conveyance is
loaded for shipment; and
(2) In such a manner that access to the
contents of the conveyance cannot be
gained without leaving evidence of
tampering.
(26 U.S.C. 5206, 5682)

Subpart Q—Return of Spirits to
Bonded Premises and Voluntary
Destruction
§ 19.451

Scope.

The IRC allows a proprietor of a
distilled spirits plant to return distilled
spirits, denatured spirits, and articles to
the bonded premises of that plant under
certain conditions. This subpart covers
the types of returns allowed, sets forth
the procedures that the proprietor must
follow when returning these products to
bonded premises, and prescribes rules
for voluntary destruction on or off
bonded premises.
Conditions for Return of Spirits to Bond
§ 19.452 Return of taxpaid spirits to
bonded premises for destruction,
denaturation, redistillation, reconditioning,
or rebottling.

(a) Allowable returns. A proprietor
may return spirits to bonded premises if
the spirits were taxpaid or tax
determined by him, by another distilled
spirits plant proprietor, or by an
importer upon importation through U.S.
Customs and Border Protection.
However, consistent with section
5215(a) of the IRC the proprietor may
return such spirits to bond only for one
of the following reasons:
(1) Destruction, in accordance with
§ 19.459;

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(2) Denaturation, in accordance with
subpart O of this part;
(3) Redistillation, in accordance with
subpart L of this part;
(4) Reconditioning; or
(5) Rebottling.
(b) Dump and gauge of returned
spirits. The proprietor must
immediately dump spirits returned to
bonded premises under this section
unless the spirits are returned in the
sealed metal drums in which they were
withdrawn. The proprietor must gauge
spirits returned under this section upon
their receipt. The proprietor may gauge
spirits in bottles based upon the case
markings and label information in
accordance with § 19.286.
(c) Claims for credit or refund of tax.
A proprietor may file a claim under
§ 19.264 for credit or refund of tax on
spirits returned to bonded premises
under this section. In addition to the
information specified in § 19.264, a
proprietor filing a claim for credit or
refund of tax must have on file at the
plant where spirits are returned to bond
the following documentation for each
lot of spirits returned:

(1) Documentation that establishes the
amount of tax for which the claim for
credit or refund is filed. If the spirits
contain eligible wine or eligible flavors,
the proprietor must have on file a copy
of the record of tax determination as
prescribed by § 19.611, or other
documentation that establishes the rate
of tax that was paid on the product. In
lieu of establishing the actual effective
tax rate of the product, the proprietor
may claim a credit or refund based on
the lowest effective tax rate applied to
the product; and
(2) Credit memoranda or comparable
financial records evidencing the return
of each lot of spirits.
(d) Applicability of Chapter 51 of the
IRC. All provisions of chapter 51 of the
IRC and of this part that apply to spirits
under TTB bond also apply to spirits
when returned to bond under this
section.
(26 U.S.C. 5008, 5010, 5201, 5207, 5215)
§ 19.453 Return of bottled spirits for
relabeling or reclosing.

A proprietor may return bottled
distilled spirits to his bonded premises

Type of product
(a) SDA withdrawn free of tax under part 20 of this
chapter.

To any DSP authorized to produce or process.
To any DSP. The DSP proprietor must file a consent of surety, form TTB F 5000.18, to extend
the terms of the operations or unit bond to
cover the return of spirits.
(i) To any DSP authorized to denature.
(ii) If SDA needs to be redistilled, the DSP must
be authorized to produce or process spirits.
(iii) Returns must be in accordance with part 20
of this chapter.
(i) To any DSP authorized to denature.
(ii) If recovered articles need to be redistilled, the
DSP must be authorized to produce or process
spirits.
(iii) Returns must be in accordance with part 20
of this chapter.
To a DSP authorized to produce or process spirits.

(1) For restoration or redenaturation ....

(d) Articles manufactured under part 20 of this
chapter and spirits residues from manufacturing
processes.

(1) For recovery by redistillation ...........
(1) For redistillation ...............................
(2) For subsequent lawful withdrawal ...

(1) For redistillation ...............................

srobinson on DSKHWCL6B1PROD with RULES2

(2) For subsequent lawful withdrawal ...

(h) Spirits withdrawn without payment of tax under
part 28 of this chapter for export, for transfer to a
customs bonded storage, manipulation, or manufacturing warehouse, for deposit in an FTZ, or
for use on vessels or aircraft, and not so exported, transferred, deposited, or used.

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In addition to the returns to bonded
premises specified in §§ 19.452 and
19.453, there are other permissible
returns of distilled spirits products to a
proprietor’s bonded premises. These
other products, the purposes for which
they may be returned, and the
conditions for their return are listed in
the table below. All of these products
must be gauged upon receipt.

(1) For redistillation ...............................
(2) For subsequent lawful withdrawal ...

(g) Recovered tax-free spirits withdrawn under part
22 of this chapter.

§ 19.454 Other authorized returns to
bonded premises.

Conditions

(1) For restoration or redenaturation ....

(f) Tax-free spirits withdrawn under part 22 of this
chapter.

(26 U.S.C. 5215)

Purpose of return

(b) Recovered denatured spirits ..............................

(e) SDA withdrawn free of tax for export under part
28 of this chapter.

for relabeling or reclosing. When bottled
spirits are returned for relabeling or
reclosing, the proprietor may not claim
credit or refund of tax on the returned
spirits, and no tax will be due on their
subsequent removal. The proprietor
must relabel or reclose the bottles
immediately and must promptly remove
the spirits from bonded premises. The
provisions of § 19.363 apply to
relabeling and reclosing performed
under this section.

(1) For redistillation ...............................
(2) For restoration (not including redistillation).
(1) For redistillation ...............................

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To any DSP authorized to produce or process.
To any DSP. The DSP proprietor must file a consent of surety, TTB F 5000.18, to extend the
terms of the operations or unit bond to cover
the return of spirits.
(i) To any DSP authorized to produce or process.
(ii) To any DSP. The DSP proprietor must file a
consent of surety, TTB F 5000.18, to extend
the terms of the operations or unit bond to
cover the return of spirits.
(i) To any DSP authorized to produce or process.
(ii) To any DSP. The DSP proprietor must file a
consent of surety, TTB F 5000.18, to extend
the terms of the operations or unit bond to
cover the return of spirits.
(i) For (1)—To any to DSP authorized to produce
or process spirits.

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Type of product

(i) Wine spirits withdrawn without payment of tax
for use in wine production.

(j) Spirits withdrawn without payment of tax for research, development, or testing.

(19 U.S.C. 81(c), 26 U.S.C. 5001, 5062, 5066,
5214, 5215, 5223, 5273, 5373)
§ 19.455 Return of spirits withdrawn for
export with benefit of drawback.

(a) Subject to the provisions of
§§ 28.197 through 28.199 of this
chapter, whole or partial shipments of
spirits withdrawn for export with
benefit of drawback may be returned to:
(1) The bonded premises of the
distilled spirits plant, pursuant to
§ 19.452; or
(2) To a wholesale liquor dealer or
taxpaid storeroom.
(b) Claims for export drawback filed
by proprietors on form TTB F 5110.30
which include the returned spirits shall
be reduced by the amount of tax paid or
determined on the returned spirits.
(26 U.S.C. 5215)
§ 19.457 Receipt of spirits abandoned to
the United States.

Spirits abandoned to the United
States may be sold, without payment of
the tax, to a proprietor of a distilled
spirits plant for denaturation or for
redistillation and denaturation,
provided that the plant is authorized to
denature or redistill and denature
spirits. The proprietor must gauge the
spirits upon receipt and must keep the
spirits apart from all other spirits or
denatured spirits until denatured.
(26 U.S.C. 5243)

Rules for Voluntary Destruction

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.459

Voluntary destruction.

(a) General. A proprietor may
voluntarily destroy spirits, denatured
spirits, articles, or wines on bonded
premises as provided in this section.
There is no tax liability on spirits,
denatured spirits, articles, or wines
destroyed in accordance with this
section.
(b) Wine notice. A proprietor may
destroy wine held on bonded premises
only after the proprietor has filed a
notice of intent to destroy with the
appropriate TTB officer stating the kind

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Purpose of return

Conditions

(2) For later lawful removal ...................

(ii) For (2)—To the bonded premises from which
withdrawn for later lawful removal.
(iii) For (1) and (2)—Returns must be made in
accordance with the provisions of part 28 of
this chapter.
(i) To any DSP.

(1) Any lawful purpose ..........................

(1) For destruction, or return to containers, or return to the distilling system.

(ii) The proprietor must obtain approval as provided in § 19.403.
(iii) Removal of wine spirits from a winery must
be in accordance with part 24 of this chapter.
(i) To the DSP from which the spirits were withdrawn.

and quantity of wine to be destroyed
and the date and manner in which the
wine is to be destroyed. The wine may
be destroyed after the filing of the
notice.
(c) Gauging. A proprietor must gauge
all spirits, denatured spirits, articles, or
wines to be destroyed. The proprietor
may establish the gauge of spirits in
bottles on the basis of legible case
markings and label information in
accordance with § 19.286. The
proprietor must individually count
bottles in partial cases.
(d) Destruction off bonded premises. If
a proprietor intends to remove spirits,
denatured spirits, articles, or wines from
bonded premises in order to destroy
them at a location off bonded premises,
the proprietor must file a consent of
surety to cover the removal. When the
destruction takes place off plant
premises, the proprietor must comply
with applicable Federal, State, and local
environmental laws and regulations.
(e) Record of destruction. The
proprietor must record the destruction
of spirits, denatured spirits, articles, or
wines as provided in § 19.617.

(2) Voluntary destruction carried out
other than as provided in subpart Q of
this part;
(3) An unexplained shortage of
bottled spirits.
(c) Burden of proof. When it appears
that a theft occurred, the burden of
proof will be on the proprietor or other
person liable for the tax to establish to
the satisfaction of the appropriate TTB
officer that the theft did not result from
connivance, collusion, fraud, or
negligence on the part of the proprietor,
owner, consignor, consignee, bailee, or
carrier, or any employee or agent of any
of them.
(d) Claims. Claims for losses and
shortages allowable under this section
must be filed in accordance with the
provisions of subpart J of this part.
(e) Limitations. TTB will abate, remit,
credit, or refund taxes on spirits,
denatured spirits, or wines lost by theft
only to the extent that the claimant is
not indemnified against, or
recompensed for, the taxes paid or
owed.

(26 U.S.C. 5008, 5370)

(a) Times for determining losses. A
proprietor must determine at any of the
following times whether a loss of spirits,
denatured spirits, or wines has
occurred:
(1) Each time a tank or bulk
conveyance is emptied;
(2) Upon discovery of an accident or
an unusual variation in a gauge; and
(3) When required to take a physical
inventory.
(b) Losses from theft, tampering, or
unauthorized voluntary destruction.
Whenever any spirits, denatured spirits,
or wines are lost or destroyed in bond,
whether by theft, tampering, or
unauthorized voluntary destruction, the
proprietor may elect voluntarily to pay
the tax on the quantity lost. If the
proprietor does not elect to pay the tax,
the proprietor must promptly report the
loss or destruction to the appropriate

Subpart R—Losses and Shortages
§ 19.461

Losses and shortages in general.

(a) Allowable losses and shortages.
Except as otherwise provided in
paragraph (b) of this section, TTB will
not collect tax on spirits, denatured
spirits, or wines that are lost, destroyed,
or otherwise unaccounted for while in
bond, and if the tax has already been
paid, TTB will refund the tax.
(b) Exceptions. TTB will collect the
tax in the case of:
(1) Theft, unless the appropriate TTB
officer finds that the theft occurred
without connivance, collusion, fraud or
negligence on the part of the proprietor,
owner, consignor, consignee, bailee, or
carrier, or any employee or agent of any
of them;

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(26 U.S.C. 5008, 5370)
§ 19.462

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Determination of losses in bond.

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TTB officer. TTB may require that the
proprietor file any claim for relief from
the tax in accordance with § 19.263.
(c) Missing packages. When a
proprietor cannot locate or otherwise
account for any packages of spirits,
denatured spirits, or wine recorded as
deposited on bonded premises, the
proprietor must promptly report that
fact to the appropriate TTB officer. In
such case the proprietor must either pay
the tax on the lost spirits, denatured
spirits, or wines or file a claim for relief
from the tax in accordance with
§ 19.263.
(d) Excessive in-transit losses. A
proprietor must promptly report
excessive in-transit losses to the
appropriate TTB officer. As a general
rule, when spirits, denatured spirits, or
wines are received in bond in bulk
conveyances TTB will consider as
excessive a loss that exceeds 1 percent
of the quantity consigned. However, in
the case of transcontinental transfers of
wine in bond, TTB will consider as
excessive only a loss in excess of 2
percent of the quantity of wine
consigned.
(e) Excessive storage losses. A
proprietor must pay the tax on excessive
storage account losses of spirits unless
the proprietor files a claim for remission
in accordance with § 19.263 and TTB
allows the claim under § 19.268. TTB
will consider a storage account loss as
excessive when the quantity of spirits
lost during a calendar quarter from all
storage tanks and stored bulk
conveyances exceeds 1.5 percent of the
total quantity contained in the tanks and
stored bulk conveyances during the
calendar quarter.
(26 U.S.C. 5008, 5370)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.463

Loss of spirits from packages.

(a) Tampering or theft. The
appropriate TTB officer may require that
a proprietor pay the tax on any loss
caused by tampering or theft of spirits
from packages in storage unless the
proprietor establishes to the satisfaction
of the appropriate TTB officer that the
loss was not due to connivance,
collusion, fraud or negligence on the
part of the proprietor. As a general rule,
the tax will be assessed on the quantity
of spirits that represents the difference
between the quantity originally entered
in the package and the quantity
remaining after discovery of the
tampering or theft. However, if the
proprietor can show that the package
had already sustained normal storage
losses before the tampering or theft
occurred, the proprietor may exclude
the amount of the normal storage losses
from the quantity to be taxpaid.

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(b) Alternative method of tax
assessment. If tampering or theft has
occurred at a proprietor’s plant and the
proprietor has failed to use effective
controls to prevent it, the appropriate
TTB officer may use an alternative to
the general method of tax assessment
specified in paragraph (a) of this
section. In this case, the appropriate
TTB officer may assess on each package
showing evidence of tampering or theft
an amount equal to the tax on 5 proof
gallons of spirits.
(26 U.S.C. 5006)
§ 19.464

Losses after tax determination.

If a proprietor sustains a loss of spirits
after tax determination but prior to
completion of physical removal of the
spirits from bonded premises, the
proprietor may file a claim in
accordance with subpart J of this part.
(26 U.S.C. 5008)
§ 19.465

Shortages of bottled spirits.

(a) Determination of shortage. The
determination of whether an
unexplained shortage of bottled distilled
spirits exists must be made by
comparing the spirits recorded as being
on hand to either the results of the
physical inventory required by § 19.372
or the results of any other complete
physical inventory taken by the
proprietor. When the recorded quantity
is greater than the quantity determined
by physical inventory, the difference is
an unexplained shortage. The proprietor
must adjust its records to reflect the
results of the physical inventory.
(b) Payment of tax on shortage. A
proprietor must pay the tax on any
unexplained shortage of bottled distilled
spirits:
(1) Immediately on a prepayment
return on form TTB F 5000.24, Excise
Tax Return; or
(2) On a deferred payment return on
TTB F 5000.24 for the period during
which the shortage was determined.
(26 U.S.C. 5008)

Subpart S—Containers and Marks
§ 19.471

General.

The proprietor of a distilled spirits
plant must comply with the container
and marking requirements that apply to
both industrial and nonindustrial
spirits. This subpart covers those
requirements. For the requirements that
apply to articles made with denatured
spirits, see part 20 of this chapter. For
the requirements that apply to wine, see
part 24 of this chapter.
(26 U.S.C. 5206)

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§ 19.472 Need to determine use of spirits—
industrial or nonindustrial.

Many of the container and marking
requirements set forth in this subpart
are based on the intended use of the
spirits, that is, whether they are for
‘‘industrial’’ or ‘‘nonindustrial’’ use. For
purposes of this subpart, the terms
‘‘industrial’’ use and ‘‘nonindustrial’’ use
refer to the uses specified in paragraphs
(a) and (b) of this section.
(a) Industrial use. The word
‘‘industrial’’ when used with reference to
the use of spirits has the same meaning
as in §§ 1.60 and 1.62 of this chapter.
Those uses are as follows:
(1) Free of tax by, and for the use of,
the United States or any governmental
agency thereof, any State, any political
subdivision of a State, or the District of
Columbia, for nonbeverage purposes;
(2) Free of tax for nonbeverage
purposes and not for resale or use in the
manufacture of any product for sale—
(i) For the use of any educational
organization described in 26 U.S.C.
170(b)(1)(A)(ii) which is exempt from
income tax under 26 U.S.C. 501(a), or
for the use of any scientific university
or college of learning;
(ii) For any laboratory for use
exclusively in scientific research;
(iii) For use at any hospital, blood
bank, or sanitarium (including use in
making analysis or test at such hospital,
blood bank, or sanitarium), or at any
pathological laboratory exclusively
engaged in making analyses, or tests, for
hospitals or sanitariums; or
(iv) For the use of any clinic operated
for charity and not for profit (including
use in compounding of bona fide
medicines for treatment outside of such
clinics of patients thereof);
(3) Free of tax, after denaturation of
such spirits in the manner prescribed by
law for—
(i) Use in the manufacture of ether,
chloroform, or other definite chemical
substance where such distilled spirits
are changed into some other chemical
substance and do not appear in the
finished product; or
(ii) Any other use in the arts and
industries (except for uses prohibited by
26 U.S.C. 5273 (b) or (d)) and for fuel,
light, and power; and
(4) The use of distilled spirits for
experimental purposes and in the
manufacture of—
(i) Medicinal, pharmaceutical, or
antiseptic products, including
prescriptions compounded by retail
druggists;
(ii) Toilet preparations;
(iii) Flavoring extracts, syrups, or food
products; or
(iv) Scientific, chemical, mechanical,
or industrial products, provided such
products are unfit for beverage use.

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(b) Nonindustrial use. The word
‘‘nonindustrial’’ when used with
reference to the use of spirits refers to
any use not listed as an ‘‘industrial’’ use
in paragraph (a) of this section.
Nonindustrial uses include the
following:
(1) For beverage purposes;
(2) In the manufacture, rectification,
or blending of alcoholic beverages; or in
the preparation of food or drink by a
hotel, restaurant, tavern, or similar
establishment; or as a medicine; and
(3) Distilled spirits in containers with
a capacity of 1 wine gallon or less, other
than anhydrous alcohol and alcohol that
may be withdrawn from bond free of
tax.
(26 U.S.C. 5206, 5301)

Requirements for Containers
§ 19.473

Authorized containers.

(a) General. A proprietor may only
use containers that are authorized under
this part for containing, storing,
transferring, conveying, removing, or
withdrawing spirits or denatured spirits.
(b) Approval of other containers. The
appropriate TTB officer may approve
the use of another type of container for
a particular purpose in place of a type
of container specifically authorized in
this part for that purpose if the use of
that container:
(1) Will provide protection to the
revenue equal to or greater than that
provided by the authorized container;
and
(2) Will not hinder the effective
administration of this part.
(c) Approval of other container
materials. The appropriate TTB officer
may approve the use of a container
made of a material other than one
prescribed in this subpart if the
prescribed material is unsuitable for the
intended purpose. If the appropriate
TTB officer approves another material
for a container, the approval may also
specify how the container must be
constructed, protected, marked, and
used.
(26 U.S.C. 5002, 5206, 5212, 5213, 5214,
5301.)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.474

Spirits for nonindustrial use.

(a) Containers. A proprietor may fill
spirits for nonindustrial use into
packages or into other containers that
are filled during processing operations,
if consistent with the provisions of part
5 of this chapter.
(b) Bottles and labels. The provisions
of subpart T of this part and part 5 of
this chapter govern the liquor bottles
and labels that a proprietor must use in
bottling spirits for nonindustrial
domestic use.

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(c) Cases. If spirits for nonindustrial
use are in containers with a capacity of
one gallon or less the proprietor must
place the containers in cases
constructed to afford reasonable
protection against breakage.
(26 U.S.C. 5206, 5212, 5301)
§ 19.475

Spirits for industrial use.

(a) Containers. A proprietor may fill
denatured spirits or other spirits for
industrial use into suitable containers.
The proprietor must ensure that all
containers for spirits that will be used
in food products comply with
applicable U.S. Food and Drug
Administration health and safety laws
and regulations.
(b) Encased containers. A proprietor
may encase unlabeled containers of
denatured spirits and other spirits for
industrial use in wood, fiberboard or
similar material if:
(1) The cases are constructed so that
the surface, including the opening of the
container, is not exposed;
(2) Required marks are applied to an
exterior surface of the case;
(3) The case is constructed so that the
portion containing marks will remain
attached to the inner container until all
the contents have been removed; and
(4) A statement reading, ‘‘Do not
remove inner container until emptied’’
or a statement of similar meaning
appears on the portion of the case
bearing the marks.
(c) Cases. With the exception of
encased containers covered in
paragraph (b) of this section, if the
containers for denatured spirits and
spirits for industrial use have a capacity
of not more than 1 gallon, the proprietor
must place the containers in cases that
provide reasonable protection against
breakage.
(26 U.S.C. 5206, 5301)
§ 19.476

Packages.

A proprietor may use packages on
bonded premises for original entry of
spirits, and for packaging from tanks,
storing, transferring in bond, and
withdrawing spirits and denatured
spirits from bonded premises. Packages
must be constructed so as to be capable
of secure closure.
(26 U.S.C. 5206)
§ 19.477

Use of bulk conveyances.

If a bulk conveyance meets the
construction requirements of § 19.478 or
is approved under § 19.473(b), a
proprietor may use the bulk conveyance
on bonded premises for the original
entry of spirits, and for filling from
tanks, storing, transferring in bond, and
withdrawing taxpaid spirits and

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9143

denatured spirits. A proprietor may use
such a bulk conveyance to withdraw
spirits free of tax, in accordance with
the provisions of this part, for use of the
United States or to a specified consignee
if so authorized by the appropriate TTB
officer under § 19.473(b). A proprietor
may also use such a bulk conveyance to
withdraw spirits without payment of
tax, in accordance with the provisions
in this part, for any one of the following
purposes:
(a) Export, as authorized under 26
U.S.C. 5214(a)(4);
(b) Transfer to customs manufacturing
bonded warehouses, as authorized
under 19 U.S.C. 1311;
(c) Transfer to foreign trade zones, as
authorized under 19 U.S.C. 81c;
(d) Transfer to customs bonded
warehouses, as authorized under 26
U.S.C. 5066 or 5214(a)(9); or
(e) Use in wine production, as
authorized under 26 U.S.C. 5373.
(26 U.S.C. 5206)
§ 19.478 Construction requirements for
bulk conveyances.

(a) Construction. The following
standards apply to bulk conveyances
authorized by this part:
(1) If the conveyance consists of two
or more compartments, each
compartment must be constructed or
arranged so that the emptying of any
compartment does not provide access to
the contents of any other compartment;
(2) The conveyance (or in the case of
compartmented conveyances, each
compartment) must be arranged so that
it can be completely drained;
(3) Each tank car or tank truck must
have permanently and legibly marked
thereon its number, its capacity in wine
gallons, and the name or symbol of its
owner;
(4) If the conveyance consists of two
or more compartments, each
compartment must be identified by a
number and the capacity in wine
gallons of each shall be marked thereon;
(5) The conveyance must have a route
board or other suitable device for
carrying required marks or brands; and
(6) Calibrated charts, showing the
capacity of each compartment in wine
gallons for each inch of depth, must be
available for use in measuring the
contents of each tank truck, tank ship,
or barge.
(b) Proprietor’s responsibility. Before
filling any bulk conveyance, a
proprietor must examine it to verify that
it meets the requirements of this section
or of an approval under § 19.473(b) and
that it is otherwise suitable for receiving
the spirits or denatured spirits. A
proprietor must refrain from using, or
discontinue use of, any conveyance

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found by it or by the appropriate TTB
officer not to meet the applicable
requirements.
(26 U.S.C. 5206, 5212, 5213, 5214)
§ 19.479 Restrictions on dispositions of
bulk spirits.

(a) Bulk spirits for nonindustrial use.
A proprietor may sell or dispose of
spirits for nonindustrial use in
containers holding more than one wine
gallon only to the persons and for the
purposes specified in § 1.80 of this
chapter.
(b) Bulk spirits for industrial use. If a
proprietor withdraws spirits (other than
alcohol or neutral spirits) from bond in
containers holding more than one wine
gallon for industrial use, the proprietor
must ship or deliver the spirits directly
to the user of the spirits as provided in
§ 1.95 of this chapter.
(26 U.S.C. 5201)

Marking Requirements for Spirits
§ 19.482

General.

A proprietor must mark, identify, and
label all containers of spirits or
denatured spirits as provided in this
part. For information regarding liquor
bottle label requirements, see subpart T
of this part and part 5 of this chapter.
(26 U.S.C. 5204, 5206)
§ 19.483

Specifications for marks.

(a) Basic requirements. A proprietor
must place the marks prescribed by this
subpart on cases, encased containers,
and packages of spirits and denatured
spirits so that they are:
(1) Of adequate size to be easily read;
(2) Of a color in distinct contrast to
the color of the background;
(3) Legible; and
(4) Durably affixed.
(b) Use of labels. A proprietor may use
labels as the means for applying
prescribed marks if the labels meet the
requirements of paragraph (a) of this
section.
(c) Location. A proprietor must place
the prescribed marks on one side of the
case or encased container, or on the
head of the package.
(26 U.S.C. 5206)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.484 Marks on packages filled in
production or storage.

(a) Packages filled in production or
storage. Except as otherwise provided in
this part, a proprietor must mark
packages of spirits filled in production
or storage with:
(1) The name of the producer, or the
producer’s trade name, in accordance
with paragraph (b) of this section;
(2) The distilled spirits plant number
of the producer, such as ‘‘DSP–KY–708’’;

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(3) The kind of spirits or, in the case
of distillates removed under § 19.307,
the kind of distillate such as ‘‘Grape
Distillate’’ or ‘‘Peach Distillate’’;
(4) The package identification
number;
(5) ‘‘BSA’’ or ‘‘OC’’ when spirits are
treated with caramel (burnt sugar) or
oak chips, as the case may be;
(6) The rated capacity of the package
in gallons shown as ‘‘RC–G’’; and
(7) The name or trade name and the
plant number of the packaging
proprietor in place of the name or trade
name and plant number of the producer
if packages of spirits of 190° or more of
proof are filled by a proprietor other
than the producer.
(b) Real or trade names. The
producer’s or other proprietor’s real
name, or the authorized trade name
used in accordance with § 19.94 at the
time of production, may be placed on
any package filled at the time of the
production gauge, or at the time of the
original packaging of the spirits in wood
when, as provided in § 19.305, the
spirits were not filled into wooden
packages at the time of production
gauge. When spirits have been mingled
in accordance with § 19.326, the
proprietor may use only a producer
name associated with any portion of the
mingled spirits on packages filled with
such mingled spirits.
(26 U.S.C. 5206)
§ 19.485 Package identification numbers in
production and storage.

(a) General. A proprietor must mark
with a lot identification number each
package of spirits filled during
production or storage operations. The
lot identification number must show
when the package was filled and must
consist of, in order, the following:
(1) The last two digits of the calendar
year;
(2) An alphabetical designation for the
month from ‘‘A’’ through ‘‘L’’,
representing, in order, January through
December;
(3) Two digits corresponding to the
day of the month; and
(4) When more than one lot is filled
into packages during the same day, for
successive lots after the first lot, a letter
suffix sequence starting with ‘‘A’’
representing the second lot, with ‘‘B’’
representing the third lot, and so forth.
For example: the first three lots filled
into packages on January 2, 2002, would
be identified as ‘‘02A02’’, ‘‘02A02A’’, and
‘‘02A02B’’.
(b) Packages constituting a lot.
Packages of spirits, including any
remnant package, received from
customs custody or filled during any
one day will receive the same lot

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identification number, subject to the
following conditions:
(1) They are of the same type and
either are of the same rated capacity or
are uniformly filled with the same
quantity by weight or other
measurement method prescribed in
§ 19.289;
(2) They are filled with spirits of the
same kind and same proof;
(3) If they are filled with mingled
spirits, the mingling was conducted in
accordance with § 19.326; and
(4) In the case of spirits imported or
brought into the United States, they are
filled with imported spirits, Puerto
Rican spirits or Virgin Island spirits, as
applicable.
(c) Serial numbers. At the time of
filling, receipt on bonded premises, or
withdrawal from bond, the appropriate
TTB officer may require serial numbers
on packages of spirits within the same
lot in conjunction with the lot
identification number. The proprietor
must assign temporary serial numbers to
packages for control purposes when
they are transferred in bond in an
unsecured conveyance or gauged after
tampering within the storage account.
(26 U.S.C. 5206)
§ 19.486

Change of packages in storage.

When a proprietor transfers spirits
from one package to another as
permitted in § 19.325, the proprietor
must give the new package the same
package identification number and
marks as the original package. The
proprietor must also prepare and sign a
label to be affixed to the head of each
new package. The label must be in the
following form:
The spirits in this llllll [kind
of cooperage: barrel or drum], package
identification No. llll, were
transferred from a llllll [kind of
cooperage: barrel or drum], on
lllllll [Date], lllllll
[Proprietor]
(26 U.S.C. 5206)
§ 19.487

Kind of spirits.

(a) Designation. The designations of
kind of spirits required for packages
filled on bonded premises must be
consistent with the classes and types of
spirits set forth in part 5 of this chapter
subject to the following exceptions or
conditions:
(1) A proprietor may designate as
‘‘Alcohol’’ spirits distilled at more than
160ßproof, which lack the taste, aroma,
and other characteristics generally
attributed to whisky, brandy, rum, or
gin, and which are substantially neutral
in character. When alcohol so
designated is withdrawn on

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Federal Register / Vol. 76, No. 32 / Wednesday, February 16, 2011 / Rules and Regulations
determination of tax, the designation
must consist of the word ‘‘Alcohol’’
preceded or followed by a word or
phrase that describes the material from
which the alcohol was produced;
(2) The designation for vodka, neutral
spirits, or gin must include a word or
phrase that describes the material from
which the spirits were produced;
(3) A proprietor may designate as
‘‘Spirits’’, preceded or followed by a
word or phrase that describes the
material from which the spirits were
produced, those distilled spirits that are
distilled at less than 190ßproof which
lack the taste, aroma, and other
characteristics generally attributed to
whisky, brandy, rum, or gin. However,
the proprietor may not designate such
spirits as ‘‘Spirits grain’’ or ‘‘Grain
spirits’’;
(4) A proprietor must designate spirits
distilled from fruit at or above 190ß
proof, if intended for use in wine
production, as ‘‘Neutral Spirits—Fruit’’,
preceded or followed by the name of the
fruit from which the spirits were
produced;
(5) A proprietor may designate as
‘‘Whisky’’ spirits distilled at not more
than 160ßproof from a fermented mash
of not less than 51 percent rye, corn,
wheat, malted barley, or malted rye
grain, packaged in reused cooperage,
provided that the designation is further
qualified with the words ‘‘Distilled from
rye mash’’ (or bourbon, wheat, malt, or
rye malt mash, as the case may be).
However, spirits designated as ‘‘Whisky’’
must, if distilled from a fermented mash
of not less than 80 percent corn, carry
the designation ‘‘Corn Whisky.’’
(b) Change of designation. After
written application to, and approval of,
the appropriate TTB officer, a proprietor
may at any time before their withdrawal
from bonded premises, change the
original designation for spirits to a new
designation properly describing the
spirits in accordance with the
provisions of this section.
(c) Other designations. If a proprietor
proposes to produce spirits for which a
designation has not been prescribed in
this section or in part 5 of this chapter,
the proprietor must first make written
application to the appropriate TTB
officer for a designation for such spirits,
and the proprietor must then designate
the spirits accordingly.
(d) Spirits for nonindustrial use. A
proprietor may not treat the provisions
of this section as constituting
authorization to apply designations to
spirits withdrawn for nonindustrial use
if those designations do not conform to
the requirements of part 5 of this
chapter.
(26 U.S.C. 5206)

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§ 19.488 Marks on packages filled in
processing.

(a) Packages filled in processing.
Except as otherwise provided in this
part, a proprietor must mark packages of
spirits filled in processing with:
(1) The name of the processor, or the
processor’s trade name;
(2) The distilled spirits plant number
of the processor, such as ‘‘DSP–KY–
708’’;
(3) The kind of spirits in accordance
with § 19.487 or, in the case of an
intermediate product, the product name
shown on form TTB F 5110.38, Formula
for Distilled Spirits Under the Federal
Alcohol Administration Act;
(4) The serial number or lot
identification number, in accordance
with § 19.490, and the date of filling;
(5) The proof of the spirits; and
(6) The serial number of the formula
if it was manufactured under an
approved formula.
(b) Real or trade names. The
proprietor’s real name or any trade
name used in accordance with § 19.94
may be placed on any package filled
with spirits during processing
operations.
(26 U.S.C. 5206)
§ 19.489 Marks on cases filled in
processing.

(a) Mandatory marks. Except for cases
marked in accordance with § 19.496, a
proprietor must mark in accordance
with § 19.483 the following information
on each case of spirits filled in
processing:
(1) Serial number in accordance with
§ 19.490;
(2) Kind of spirits in accordance with
the classes and types of spirits set forth
in part 5 of this chapter;
(3) The distilled spirits plant number
where bottled;
(4) Date filled;
(5) Proof; and
(6) Liters or proof gallons.
(b) Export marks. In addition to the
marks referred to in paragraph (a) of this
section, the proprietor must include the
marks required by part 28 of this
chapter on cases removed for export, for
transfer to any customs bonded
warehouses, for transfer to foreign trade
zones, or for use as supplies on certain
vessels and aircraft.
(c) Other marks. A proprietor may
include other marks on cases filled in
processing in addition to the marks
prescribed under this section. Any
additional marks must not interfere
with, or detract from, the marks
prescribed in this section. The
proprietor may include other marks
such as:

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(1) The name or trade name, and the
location if desired, of the bottler,
displayed with the word ‘‘Bottler’’;
(2) For products distilled or processed
by the proprietor, the proprietor’s name
or trade name, and the location of the
distilled spirits plant, if desired,
displayed with the words ‘‘Distiller’’ or
‘‘Processor’’, as applicable;
(3) For products imported and bottled
by the proprietor, the words ‘‘Imported
and Bottled By’’, followed by the
proprietor’s name or trade name and
location of the distilled spirits plant if
desired;
(4) For products bottled for a dealer,
the words ‘‘Bottled For’’, followed by the
name of that dealer;
(5) Any material required by Federal
or State law and regulations; and
(6) Labels or data describing the
contents for commercial identification
or accounting purposes or indicating
payment of State or local taxes.
(26 U.S.C. 5066, 5206)
§ 19.490 Numbering of packages and
cases filled in processing.

(a) Packages of spirits and denatured
spirits filled during processing
operations. When a proprietor fills
packages of spirits and denatured spirits
during processing, the proprietor must
identify the packages consecutively
beginning with ‘‘1’’ and continuing the
series until the number ‘‘1,000,000’’ is
reached, except that any series of such
numbers already in use may be
continued to that limit. When the
identification in any series reaches
‘‘1,000,000’’, the proprietor may begin a
new series with ‘‘1’’ but must add an
alphabetical prefix or suffix to the new
series number. For example, the first
identifier in the second series of
1,000,000 packages filled might be ‘‘1A’’
or ‘‘A1’’.
(b) Cases containing bottles or other
containers of spirits and denatured
spirits. When a proprietor fills cases
containing bottles or other containers of
spirits and denatured spirits during
processing, the proprietor must identify
the cases consecutively beginning with
‘‘1’’ and continuing the series until the
number ‘‘1,000,000’’ is reached, except
that any series of such numbers already
in use may be continued to that limit.
When the identification in any series
reaches ‘‘1,000,000’’, the proprietor may
begin a new series with ‘‘1’’. This series
of identifiers for cases containing bottles
or other containers must be distinct
from the series of serial numbers
required for packages under paragraph
(a) of this section.
(c) Additional identification. A
proprietor may establish separate series
of identifiers, distinguished from each

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other by the use of alphabetical prefixes
or suffixes, to identify the size of bottles,
the brand names, or other information,
on written notice to the appropriate TTB
officer. The proprietor must identify
remnant cases by placing the identifier
of the last full case followed by the
letter ‘‘R’’ on the remnant case. When
there is a change in the name, or trade
name of the proprietor, all series in use
may be continued. However, if there is
a change in proprietorship, a new series
must be commenced.
(d) Alternative marking for spirits for
industrial use. A proprietor may mark
packages and cases of spirits for
industrial use, including denatured
spirits, filled in processing with the lot
identification numbers specified in
§ 19.485 instead of using the identifiers
specified in paragraphs (a), (b) and (c)
of this section.
(26 U.S.C. 5206)
§ 19.491 Marks on containers of specially
denatured spirits.

(a) General. A proprietor must mark
or label each package, case, or encased
container of specially denatured spirits
filled on bonded premises to show:
(1) The quantity in gallons;
(2) The serial number or lot
identification number;
(3) The plant number of the
proprietor;
(4) The designation or abbreviation of
the specially denatured spirits by kind
(alcohol or rum);
(5) The applicable formula number;
and
(6) The proof of the spirits, if they
were denatured at other than 190ß proof.
(b) Bottles. A proprietor must mark or
label each bottle to show the
information prescribed in paragraphs
(a)(1), (3), (4), (5), and (6) of this section.
(c) Alternate formulations. When
spirits are denatured under a formula
authorizing a choice of types and
quantities of denaturants, the proprietor
must mark the container or case to show
the actual types and quantities of
denaturants used.
(26 U.S.C. 5206)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.492 Marks on containers of
completely denatured alcohol.

Except in the case of completely
denatured alcohol transported by
pipelines and bulk conveyances, a
proprietor must mark each container of
completely denatured alcohol on the
head of the package or on the side of the
can or carton with:
(a) The name of the proprietor who
filled the containers;
(b) The plant number where the
container was filled;

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(c) The container’s contents in wine
gallons;
(d) The apparent proof;
(e) The words ‘‘Completely Denatured
Alcohol’’; and
(f) The applicable formula number.
(26 U.S.C. 5206)
§ 19.493 Caution label for completely
denatured alcohol.

A proprietor must place a label
containing the words ‘‘Completely
Denatured Alcohol’’ and the statement
‘‘Caution—contains poisonous
ingredients’’ on each container of
completely denatured alcohol
containing five gallons or less that is
sold or offered for sale. The label must
be written in plain, legible letters. The
proprietor may print the name and
address of the denaturer on such label,
but may not include any other
nonessential matter on the label without
approval from the appropriate TTB
officer. The word ‘‘pure’’ may not appear
on the label or the container.
(26 U.S.C. 5206)
§ 19.494 Additional marks on portable
containers.

(a) In addition to the other marks
prescribed in this part, a proprietor
must mark portable containers of spirits
or denatured spirits (other than bottles
enclosed in cases) that will be
withdrawn from the bonded premises as
follows:
(1) Without payment of tax, for
export, for transfer to customs
manufacturing bonded warehouses, for
transfer to foreign trade zones, or as
supplies for certain vessels and aircraft,
in accordance with the provisions in
part 28 of this chapter; or
(2) If tax-free, with the word ‘‘TaxFree.’’
(b) A proprietor may show other
optional information such as brand or
trade name; a caution notice, or other
information required by Federal, State,
or local law or regulations; wine or
proof gallons; and plant control data.
However, any such mark must not
conceal, obscure, interfere with, or
conflict with the markings required by
this subpart.
(26 U.S.C. 5206)
§ 19.495

Marks on bulk conveyances.

(a) A proprietor must securely attach
a label identifying each conveyance or
compartment to the route board, or to
another equivalent device, for each bulk
conveyance used to transport spirits or
denatured spirits setting forth the
following information:
(1) The name, plant number, and
location of the consignor;

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(2) The name, distilled spirits plant
number, permit number, or registry
number (as applicable), and the location
of the consignee;
(3) The date of shipment;
(4) The quantity (proof gallons for
spirits, wine gallons for denatured
spirits); and
(5) The formula number for denatured
spirits.
(b) If the conveyance is accompanied
by documentation containing the
information specified in paragraph (a) of
this section, the proprietor is not
required to label each conveyance or
compartment.
(c) Export shipments must conform to
the requirements of part 28 of this
chapter.
(26 U.S.C. 5206)
§ 19.496

Cases of industrial alcohol.

(a) Mandatory marks. A proprietor
must mark each case and each encased
container of alcohol bottled for
industrial use under the provisions of
subpart N of this part to show the
following information:
(1) The designation ‘‘Alcohol’’;
(2) The serial number or lot
identification number;
(3) The distilled spirits plant number
of the proprietor;
(4) The proof;
(5) The proof gallons;
(6) The designation ‘‘Tax-Free’’; and
(7) Any information required by part
28 of this chapter, for cases that are
withdrawn for export, transferred to
customs bonded warehouses,
transferred to foreign trade zones, or are
for use on vessels and aircraft.
(b) Other marks. A proprietor may
mark cases of industrial alcohol with
other marks, provided that they do not
interfere with, or detract from,
mandatory case marks in the manner
permitted under § 19.489.
(26 U.S.C. 5206, 5235)
§ 19.497

Obliteration of marks.

Except as otherwise provided in
§ 19.487(b), the marks required to be
placed on any container or case under
this part must not be destroyed or
altered before the container or case is
emptied.
(26 U.S.C. 5206)
§ 19.498 Relabeling and reclosing off
bonded premises.

The proprietor of a distilled spirits
plant may relabel, affix brand labels, or
reclose bottled taxpaid spirits on
wholesale liquor dealer premises or at a
taxpaid storeroom on, contiguous to,
adjacent to, or in the immediate vicinity
of the proprietor’s distilled spirits plant,

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provided that the wholesale liquor
dealer premises or taxpaid storeroom is
operated in connection with the
distilled spirits plant. If products
relabeled under this section were
originally bottled by another proprietor,
the relabeling proprietor must have on
file a statement from the original bottler
consenting to the relabeling.
(26 U.S.C. 5201)
§ 19.499 Authorized abbreviations to
identify marks.

In addition to the other abbreviations
and symbols authorized under this part
for use in marking containers, a
proprietor may use the following
abbreviations to identify the following
marks:
Abbreviation

Mark
Completely Denatured Alcohol ........
Gallon or Wine Gallon .....................
Gross Weight ...................................
Proof ................................................
Specially Denatured Alcohol ...........
Specially Denatured Rum ................
Tare .................................................
Tax Determined ...............................
Wine Spirits Addition .......................

CDA
WG
G
P
SDA
SDR
T
TD
WSA

(26 U.S.C. 5206)

Subpart T—Liquor Bottle, Label, and
Closure Requirements

(26 U.S.C. 5301)

Authorized Liquor Bottles
§ 19.511

Labeling Requirements

Bottles authorized.

Each liquor bottle for nonindustrial
distilled spirits for domestic use must
conform to a bottle size specified in the
standards of fill set forth in subpart E of
part 5 of this chapter. This rule applies
to liquor bottles intended for
distribution in both interstate and
intrastate commerce.
(26 U.S.C. 5301)
§ 19.512 Bottles not constituting approved
containers.

srobinson on DSKHWCL6B1PROD with RULES2

A proprietor may not use any liquor
bottle that the appropriate TTB officer
finds is misleading within the meaning
of § 5.46 of this chapter. Misleading
liquor bottles do not constitute
approved containers for the purposes of
this part, and a proprietor may not use
them for packaging distilled spirits for
domestic purposes.
(26 U.S.C. 5301)
§ 19.513

Distinctive liquor bottles.

(a) Application. A proprietor must
submit form TTB F 5100.31,
Application for and Certification/
Exemption of Label/Bottle Approval, to
the appropriate TTB officer in order to

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obtain approval to use domestic liquor
bottles of distinctive shapes or designs.
The proprietor must certify as to the
total capacity of a representative sample
bottle before closure (expressed in
milliliters) on each copy of the form. In
addition, the proprietor must affix a
readily legible photograph (showing
both front and back of the bottle) to the
front of each copy of TTB F 5100.31
along with the label(s) to be used on the
bottle. The proprietor must submit to
TTB an actual bottle or accurate model
only when specifically requested to do
so.
(b) Approval. The appropriate TTB
officer will approve a distinctive liquor
bottle on a properly completed TTB F
5100.31 if the bottle is found to:
(1) Meet the requirements of part 5 of
this chapter;
(2) Be distinctive;
(3) Be suitable for its intended
purpose;
(4) Not jeopardize the revenue; and
(5) Be not misleading to the
consumer.
(c) Retention. A proprietor must keep
on file at his premises a copy of the
complete approved TTB F 5100.31 for
the distinctive liquor bottle.
(d) Cross reference. For procedures
regarding issuance, denial and
revocation of distinctive liquor bottle
approvals, as well as appeal procedures,
see part 13 of this chapter.

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§ 19.516 Certificate of label approval or
exemption.

A proprietor must obtain a certificate
of label approval or an exemption from
label approval under part 5 of this
chapter on form TTB F 5100.31 for any
label that the proprietor will use on
bottles of spirits for domestic use. Upon
request by the appropriate TTB officer,
the proprietor must provide evidence of
label approval, or of exemption from
label approval, for a label used on a
bottle of spirits for domestic use. For
procedures regarding the issuance,
denial and revocation of certificates of
label approval and certificates of
exemption from label approval, as well
as appeal procedures, see part 13 of this
chapter.
(26 U.S.C. 5201)
§ 19.517 Statements required on labels
under an exemption from label approval.

If a proprietor bottles spirits for
domestic use under a certificate of
exemption from label approval on form
TTB F 5100.31, the following
information must appear on the label
used on the bottle, in the manner
indicated:

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(a) Brand name. The brand name on
the label must conform to the
requirements of § 5.34 of this chapter;
(b) Kind. The class and type of the
spirits identified on the label must
conform to the requirements of § 5.35 of
this chapter;
(c) Alcohol content. The alcohol
content on the label must conform to the
requirements of § 5.37(a) of this chapter;
(d) State of distillation. In the case of
whisky, the state of distillation
statement on the label must conform to
the requirements of § 5.36(d) of this
chapter;
(e) Net contents. The label must show
the net contents, unless the statement of
net contents is permanently marked on
the side, front, or back of the bottle;
(f) Name and address of bottler. The
name and address of the bottler must
conform to the requirements of § 19.518;
(g) Age of whisky containing no
neutral spirits. In the case of whisky
containing no neutral spirits, statements
of age and percentage by volume on the
label must conform to the requirements
of § 5.40 of this chapter;
(h) Age of whisky containing neutral
spirits. In the case of whisky containing
neutral spirits, the label must state the
age of the whisky or whiskies and the
respective percentage by volume of
whisky or whiskies and neutral spirits
in accordance with § 5.40 of this
chapter;
(i) Age of brandy. In the case of
brandy aged for a period of less than
two years, the label must state the age.
(j) Presence of neutral spirits or
coloring, flavoring, or blending material.
The label must indicate the presence of
neutral spirits or coloring, flavoring, or
blending material in accordance with
§ 5.39 of this chapter; and
(k) Country of origin. Labels of
imported spirits must state the country
of origin in substantially the following
form: ‘‘Product of llllll,’’ with
the blank filled in with the name of the
country of origin.
(26 U.S.C. 5201)
§ 19.518

Name and address of bottler.

In setting forth the name and address
of the bottler required by § 19.517(f), the
label must contain the words ‘‘Bottled
by’’, ‘‘Packed by’’, or ‘‘Filled by’’ followed
immediately by the name (or trade
name) of the bottler and the place where
the bottling takes place. If the bottler is
the proprietor of more than one distilled
spirits plant engaged in bottling
operations, the label may include the
addresses of all such plants immediately
following the name (or trade name) of
the bottler. The following additional
rules apply to name and address
labeling under this section:

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(a) Where distilled spirits are bottled
by or for the distiller of the spirits, the
label may state, in lieu of the words
‘‘Bottled by’’, ‘‘Packed by’’, or ‘‘Filled by’’,
followed by the bottler’s name (or trade
name) and address or addresses, the
words ‘‘Distilled by’’, followed
immediately by the name (or trade
name) under which the particular spirits
were distilled, or by any trade name
shown on the distiller’s permit covering
the premises where the particular spirits
were distilled, and the address (or
addresses) of the distiller;
(b) Where ‘‘straight whiskies’’ of the
same type produced in the same State
by two or more different distillers are
combined (either at time of bottling or
at a warehouseman’s bonded premises
for further storage) and are subsequently
bottled and labeled as ‘‘straight whisky’’,
that ‘‘straight whisky’’ must be labeled as
provided in the introductory paragraph
of this section. However, where that
combined ‘‘straight whisky’’ is bottled by
or for the distillers of the whiskies, the
label may contain, in lieu of the
wording specified in that introductory
paragraph, the words ‘‘Distilled by’’,
followed immediately by the name (or
trade name) of each distiller that
distilled a portion of the ‘‘straight
whisky’’, the address of each of the
distilled spirits plants where a portion
of the ‘‘straight whisky’’ was distilled,
and the percentage of ‘‘straight whisky’’
distilled by each distiller (with a
tolerance of plus or minus 2 percent). In
addition, where ‘‘straight whisky’’ is
made up of a mixture of ‘‘straight
whiskies’’ of the same type distilled at
two or more distilled spirits plants of
the same proprietor located within the
same State, and where that ‘‘straight
whisky’’ is bottled by or for that
proprietor, the label for the ‘‘straight
whisky’’ may contain, in lieu of the
wording specified in the introductory
paragraph of this section, the words
‘‘Distilled by’’ followed by the name (or
trade name) of the proprietor and the
address of each of the distilled spirits
plants that distilled a portion of the
‘‘straight whisky’’;
(c) Where distilled spirits are bottled
by or for the proprietor of a distilled
spirits plant, the label may state, in lieu
of the words ‘‘Bottled by’’, ‘‘Packed by’’,
or ‘‘Filled by’’ followed by the bottler’s
name (or trade name) and address, the
words ‘‘Blended by’’, ‘‘Made by’’,
‘‘Prepared by’’, ‘‘Manufactured by’’, or
‘‘Produced by’’ (whichever is
appropriate to the process involved),
followed by the name (or trade name)
and the address (or addresses) of the
distilled spirits plant proprietor;
(d) In the case of labels of distilled
spirits bottled for a retailer or other

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person who is not the proprietor of the
distilled spirits plant where the distilled
spirits were distilled, the label may also
state the name and address of that
retailer or other person, preceded
immediately by the words ‘‘Bottled for’’,
‘‘Distributed by’’, or other similar
statement; and
(e) The label may state the address of
the proprietor’s principal place of
business in lieu of the place where the
bottling, distilling or processing
operation occurred, provided that the
address where the bottling, distilling, or
other operation occurred is indicated by
printing, coding, or other markings, on
the label or on the bottle. The coding
system employed must permit TTB to
determine where the operation stated on
the label occurred. Prior to using such
a label or bottle coding system, the
proprietor must send a notice to the
appropriate TTB officer explaining the
coding system.
(26 U.S.C. 5201)
§ 19.519

Labels for export spirits.

(a) Required information. If a
proprietor bottles spirits for export, the
bottles must have a securely affixed
label showing:
(1) The kind (class and type) of
spirits;
(2) The percentage of alcohol by
volume (ABV) of the spirits;
(3) The net contents, unless the
markings on the bottle indicate such
contents; and
(4) The name (or trade name) of the
bottler.
(b) Additional information. The
bottler may place additional information
on the export label if it is not
inconsistent with the information
required under paragraph (a) of this
section.
(c) Language. The export label
information may appear in the language
of the country to which the spirits are
to be exported provided that the
proprietor maintains on file an English
translation of that information. The
export label may state the net contents
and percentage of alcohol by volume in
the units of measurement of the foreign
country, provided that the proprietor
maintains a record of the equivalent
units as required for labels of spirits
bottled for domestic consumption.
(d) Waiver. The appropriate TTB
officer may waive the requirement to
show any information required by this
section, other than the kind of spirits,
upon a showing that the country to
which the spirits are to be exported
prohibits the showing of such
information. In regard to kind (class and
type) of spirits, the appropriate TTB
officer may waive the designation

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required by § 5.22 of this chapter, only
to the extent that the label need not bear
the word ‘‘diluted’’ for distilled spirits
bottled below the minimum bottling
proof, and provided that this is in
accordance with the rules of the country
to which the product is to be exported.
(26 U.S.C. 5201, 5301)
§ 19.520
Rico.

Spirits for shipment to Puerto

Spirits removed for shipment to
Puerto Rico with benefit of drawback or
without payment of tax in accordance
with part 28 of this chapter are subject
to the provisions of part 5 of this
chapter in regard to labeling and
standards of fill for bottles.
(26 U.S.C. 5201)

Closure Requirements
§ 19.523

Affixing closures.

Each bottle or other container of
spirits having a capacity of one gallon
(3.785 liters) or less must have a closure
or other device securely affixed to the
container prior to withdrawal from bond
or customs custody. The closure or
other device must be constructed in
such a manner as to require breaking in
order to gain access to the contents of
the container.
(26 U.S.C. 5301)
§ 19.525

Reclosing.

A proprietor may reclose bottles of
distilled spirits filled on bonded
premises as provided in subpart N of
this part. A proprietor may also reclose
bottles of distilled spirits to which
closures or other devices have been
affixed as provided in § 19.498.
(26 U.S.C. 5215)

Subpart U—[Reserved]
Subpart V—Records and Reports
General Rules for Records
§ 19.571

Records in general.

Each proprietor of a distilled spirits
plant must maintain records that
accurately reflect the operations and
transactions occurring at the plant. This
subpart specifies the types of records
that a proprietor must maintain. In
general, a proprietor is responsible for
recording activities and transactions
related to the three primary operational
accounts at a plant: production, storage,
and processing. A proprietor’s records
must show receipts in each account,
movement from one account to another,
transfers in bond, and withdrawals of
spirits, denatured spirits, articles, or
wines. The types of records that a
proprietor must keep include:

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(a) All individual transaction forms,
records, and summaries that are
specifically required by this part;
(b) All supplemental, auxiliary, and
source data that a proprietor uses to
compile required forms, records, and
summaries, and to prepare reports,
returns and claims; and
(c) Copies of notices, reports, returns,
and approved applications and other
documents relating to operations and
transactions.
(26 U.S.C. 5207)
§ 19.572

Format of records.

As a general rule, the provisions of
this subpart do not require proprietors
to keep their records in any particular
format or medium. For example, a
proprietor may keep required records on
paper, on microfilm or microfiche, or on
a computer or other electronic medium,
so long as the records are readily
retrievable in hardcopy format for
review by TTB officers as necessary.
The required records may consist of
documents created in the ordinary
course of business, rather than
documents created expressly to meet the
requirements of this part, provided that
those documents:
(a) Contain all of the relevant
information required under this part;
(b) Are consistent with the general
standards of clarity and accuracy; and
(c) Can be readily understood by TTB
personnel.

(26 U.S.C. 5207)
§ 19.575

Retention of records.

A proprietor must retain any records
required by this part for a period of not
less than three years from the date of the
record or the date of the last entry
required to be made, whichever is later.
However, the appropriate TTB officer
may require a proprietor to keep records
for an additional period not exceeding
three years in any case where such
retention is deemed appropriate for the
protection of the revenue.
(26 U.S.C. 5207)
§ 19.576

Preservation of records.

A proprietor must maintain required
records in a manner that will ensure
their readability and availability for
inspection. Whenever the condition of
any record will render it unsuitable for
its intended or continued use, the
proprietor must create an accurate and
legible reproduction of the original
record. TTB will treat the reproduced
record as an original record, and all of
the provisions of law that would apply
to the original record also will apply to
the reproduced record.

(26 U.S.C. 5207)

(26 U.S.C. 5207, 5555)

§ 19.573

§ 19.577

Location of required records.

A proprietor may keep the records
required by this part at the distilled
spirits plant where operations or
transactions occur or at a central
recordkeeping location maintained by
the proprietor. If a proprietor keeps the
required records at any location other
than the distilled spirits plant where
operations or transactions occur, the
proprietor must provide a letterhead
notice to the Director, National Revenue
Center, of the location where the records
are kept.
(26 U.S.C. 5207)
§ 19.574

srobinson on DSKHWCL6B1PROD with RULES2

accumulated on cards, tapes, discs, or
other accepted record media must be
retrievable within five business days.
Applicable data processing programs
must be made available for examination
if requested by any authorized TTB
officer.

Availability of records.

The records required by this part must
be available for inspection by the
appropriate TTB officer during normal
business hours. If a proprietor keeps the
records at a location other than the
distilled spirits plant where operations
or transactions occur, the proprietor
upon request must make them available
at the distilled spirits plant premises
undergoing a TTB audit or inspection.
The records must be produced within
two days of the request except that data

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Documents that are not records.

The term ‘‘records’’ as used in this
subpart does not include qualifying
documents required under subpart D of
this part, or bonds required under
subpart F of this part. Approved active
formulas, plant registrations and similar
records are permanent in nature and
must be maintained in a permanent file.
(26 U.S.C. 5207)
§ 19.578 Financial records and books of
account.

See § 70.22 of this chapter for
information regarding TTB examination
of financial records and books of
account.
(26 U.S.C. 7602)
§ 19.580 Time for making entries in
records.

(a) Daily record entries. A proprietor
must make entries required by this part
in records on a daily basis for each
transaction or operation and not later
than the close of the next business day
after the transaction or operation
occurred. However, if a proprietor
prepares supplemental or auxiliary

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records when an operation or
transaction occurs and those records
contain all of the required information,
the proprietor may make entries into the
daily records not later than the close of
business on the third business day
following the day on which the
transaction or operation occurred.
(b) Tax records. A proprietor must
enter the tax determination and the
taxable removal of distilled spirits in the
proprietor’s records on the day on
which tax determination and taxable
removal occurs.
(26 U.S.C. 5207)
§ 19.581

Details of daily records.

The daily records required by this
part must include the following
information:
(a) The date of each operation or
transaction;
(b) For spirits, the kind and the
quantity in proof gallons;
(c) For denatured spirits, the formula
number and the quantity in wine
gallons;
(d) For distilling materials produced
on the premises, the kind and the
quantity in wine gallons. For chemical
byproducts containing spirits, articles,
spirits residues, and distilling material
received on the premises, the kind, the
percent of alcohol by volume, and the
quantity in wine gallons;
(e) For wines, the kind, the quantity
in wine gallons and the percent of
alcohol by volume;
(f) For alcoholic flavoring materials,
the kind, formula number (if any), and
the quantity in proof gallons;
(g) For containers (other than those
bearing lot identification numbers) or
cases, the type, serial number, and the
number of containers (including
identifying marks on bulk conveyances),
or cases. However, a proprietor may
withdraw spirits in cases without
recording the serial numbers of the
cases, unless the appropriate TTB
officer requires such recording. A
proprietor must record package
identification numbers, number of
packages, and proof gallons per package
on deposit records in the storage
account reflecting production gauges or
filling of packages from tanks; however,
the proprietor need show only the lot
identification, number of packages, and
proof gallons per package for
transactions in packages of spirits
unless package identification numbers
are specifically required by this part;
(h) For materials intended for use in
the production of spirits, the kind and
the quantity, with liquids recorded in
gallons and other nonliquid materials
recorded by weight;

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premises upon determination of tax as
authorized by 26 U.S.C. 5222(b);
(e) Distilling material destroyed in, or
removed from the premises before
distillation, including residue of beer
returned to the producing brewery;
(f) The quantity of fusel oils or other
chemicals removed from the production
system, including the disposition
thereof, with the name of the consignee,
if any, together with the results of
alcohol content tests performed on those
fusel oils or chemicals; and
(g) The kind and quantity of distillates
removed from the production system
pursuant to § 19.307.

(26 U.S.C. 5207)

Storage Records

(26 U.S.C. 5207)

§ 19.585 Production and withdrawal
records.

§ 19.590

§ 19.582
units.

(a) Production of spirits. The
following rules apply to the
maintenance of production records:
(1) A proprietor must maintain daily
production account records of the kind
and quantity of distilled spirits
produced. The records must show the
gauge of spirits in each receiving tank
and the production gauge (in proof
gallons) of spirits removed from each
tank. If packages are filled according to
the production gauge for immediate
withdrawal from bond, the proprietor
must record the details of the individual
packages filled;
(2) A proprietor must maintain daily
records of spirits lost or destroyed prior
to the production gauge; and
(3) A proprietor must maintain
production account records in a manner
that will ensure the tracing of spirits
through the distilling system to the
mash or other material from which the
spirits were produced and that will
clearly establish the identity of the
spirits.
(b) Withdrawals from production. A
proprietor must maintain daily records
of the distilled spirits withdrawn from
the production account. This includes
withdrawals for:
(1) Taxpayment;
(2) Use of the United States;
(3) Hospital, scientific or educational
use;
(4) Export;
(5) Transfer to a foreign trade zone;
(6) Transfer to customs bonded
manufacturing warehouse;
(7) Use as supplies on vessels and
aircraft;
(8) Use in wine production;
(9) Transfer in bond to other bonded
premises;
(10) Transfer to storage operations;
(11) Transfer to processing operations;
and
(12) Research, development, or
testing.

(i) For each receipt or removal of
material, spirits, denatured spirits,
articles, spirits residues, and wine, the
name and address of the consignee or
consignor, and, if any, the plant number
or industrial use permit number of such
person;
(j) The serial number of any tank
used;
(k) On the transaction record, the rate
of duty paid on imported spirits;
(l) Identification of imported spirits,
spirits from Puerto Rico, and spirits
from the Virgin Islands, or a showing
that a distilled spirits product contains
such spirits; and
(m) Identification of spirits that are to
be used exclusively for fuel use.
Conversion from metric to U.S.

When liters are converted to wine
gallons, the proprietor must multiply
the quantity in liters by 0.264172 to
determine the equivalent quantity in
wine gallons. If cases contain the same
quantity of spirits of the same proof in
metric bottles, the proprietor must
convert the cases to U.S. units by
multiplying the liters in one case by the
number of cases to be converted, as
follows:
(a) If the conversion from liters to U.S.
units is made before multiplying by the
number of cases, the quantity in U.S.
units must be rounded to the sixth
decimal; or
(b) If the conversion is made after
multiplying by the number of cases, the
quantity in U.S. units must be rounded
to the nearest hundredth. Once
converted to wine gallons, the
proprietor must determine the proof
gallons of spirits in cases as provided in
§ 30.52 of this chapter.
(26 U.S.C. 5201)

Production Records

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§ 19.584 Materials for the production of
distilled spirits.

A proprietor must maintain daily
records of materials produced or
received for, or used in, the production
of distilled spirits. This includes records
covering:
(a) Receipt and use of fermenting
material or other nonalcoholic materials
for the production of distilled spirits;
(b) Receipt and use of spirits,
denatured spirits, articles, and spirits
residues for redistillation;
(c) Distilling materials produced,
received for production, and used in the
production of distilled spirits;
(d) Receipt of beer from brewery
premises without payment of tax, and
receipt of beer removed from brewery

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§ 19.586 Byproduct spirits production
records.

Each proprietor who manufactures
substances other than spirits in a
process that produces spirits as a
byproduct must maintain daily
production records of:
(a) The kind and quantity of materials
received and used in production;
(b) The kind and quantity of spirits
produced and disposed of; and
(c) The kind and quantity of other
substances produced.
(26 U.S.C. 5207)

Storage operations.

(a) Receipts. A proprietor must
maintain daily records of the kind and
quantity of distilled spirits or wines
received in the storage account. The
proprietor must use copies of gauge
records, transfer records, and tank
records of wines or spirits to record
spirits or wines received into storage.
Receipts into storage include:
(1) Receipts of spirits or wines for
deposit into storage;
(2) Receipts by transfer in bond;
(3) Receipts of spirits from customs
custody; and
(4) Receipts of spirits returned to
bond.
(b) Storage activities. A proprietor
must maintain daily records of the
activities and operations within the
storage account at the plant, including
records regarding:
(1) The mingling of spirits;
(2) Spirits in tanks;
(3) Spirits or wines filled into
packages from tanks and retained for
storage;
(4) Spirits of less than 190° of proof
or wines transferred from one tank to
another;
(5) The transfer of spirits or wine from
one package to another; and
(6) The addition of oak chips to spirits
and the addition of caramel to brandy or
rum.
(c) Withdrawals from storage. A
proprietor must maintain daily records
of the kind and quantity of distilled
spirits or wines withdrawn from the
storage account, including records
regarding:
(1) Taxpayment;
(2) Use by the United States;
(3) Hospital, scientific or educational
use;
(4) Export;
(5) Transfer to a foreign trade zone;
(6) Transfer to a customs bonded
manufacturing warehouse;
(7) Use as supplies on vessels and
aircraft;

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(8) Transfer to a bonded winery;
(9) Transfer to a customs bonded
warehouse;
(10) Use for research, development, or
testing;
(11) Transfer to processing operations;
(12) Transfer to production
operations;
(13) Transfer in bond to other bonded
premises;
(14) Destruction; and
(15) Loss.
(26 U.S.C. 5207)

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§ 19.591

Package summary records.

(a) General. A proprietor must keep
current summary records for each kind
of spirits or wine in packages that show
the spirits or wine deposited in,
withdrawn from, and remaining in, the
storage account. A proprietor must keep
separate records for domestic spirits,
imported spirits, Virgin Islands spirits,
Puerto Rican spirits, and wine. A
proprietor may keep package records for
spirits according to the season or the
year in which the packages were filled
with spirits.
(b) Arrangement of records. The
proprietor must prepare and arrange
separately package summary records:
(1) For domestic spirits,
alphabetically by State and by the plant
number and name of the producer or
warehouseman;
(2) For imported spirits,
alphabetically by the country of origin
and by the name of the producer;
(3) For Puerto Rican or Virgin Islands
spirits, by the name of the producer in
Puerto Rico or the Virgin Islands; and
(4) For wine, by the kind and the tax
rate imposed by 26 U.S.C. 5041.
(c) Details of records. Package
summary records must show the
following details:
(1) The date on which each of the
summarized transactions occurred;
(2) For spirits, the number of packages
and the proof gallons covered by the
summary record;
(3) For wine, the number of packages
and the wine gallons covered by the
summary record;
(4) Any gains or shortages disclosed
by inventory or when an account is
closed; and
(5) The gallon balances on summary
records for spirits and wines remaining
in the account at the end of each month.
(d) Consolidation. A proprietor must
consolidate package summary records at
the end of each month, or for lesser
periods when required by the
appropriate TTB officer, to show, for all
types of containers and kinds of spirits,
the total proof gallons received in,
withdrawn from, and remaining in the
storage account.

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(26 U.S.C. 5207)
§ 19.592 Tank record of wine and spirits of
less than 190≥ of proof.

A proprietor must keep a record for
each tank (including each bulk
conveyance) containing wine or spirits
of less than 190° of proof. The record
must show deposits into, withdrawals
from, and the balance remaining in,
each tank in the storage account. A
proprietor must prepare a new record
each time wine or spirits are deposited
into an empty tank and must make
entries each day that transactions occur.
Tank records must show the following
details:
(a) The identification of the tank;
(b) The tank record serial number,
beginning with ‘‘1’’ for each record
initiated on or after January 1 of each
calendar year;
(c) The date of each transaction;
(d) For spirits, the kind of spirits and,
as applicable,—
(1) For domestic spirits, the plant
number and name of the producer, or,
for blended rums or brandies, the plant
number and name of the
warehouseman;
(2) For imported spirits, the country
of origin and the name and plant
number of the warehouseman;
(3) For Puerto Rican or Virgin Island
spirits, the name of the producer;
(4) The number and average proof
gallon content of packages of spirits
dumped in the tank, or a notation
indicating the deposit of spirits in the
tank by pipeline; and
(5) If subject to age labeling
requirements under part 5 of this
chapter, the age of the youngest spirits
in years, months and days, each time
that spirits are deposited;
(e) For wine, the kind and the tax rate
imposed by 26 U.S.C. 5041;
(f) The wine gallons of wine, or proof
gallons of spirits, deposited into the
tank;
(g) The wine gallons of wine, or proof
gallons of spirits, withdrawn from the
tank;
(h) Any related transaction form or
record and its serial number for deposits
and withdrawals;
(i) The wine gallons of wine, or proof
gallons of spirits, remaining in the tank,
recorded at the end of each month; and
(j) Any gain or loss disclosed by
inventory or on emptying of the tank.
(26 U.S.C. 5207)
§ 19.593 Tank summary record for spirits
of 190≥ or more of proof.

(a) General. A proprietor must keep a
tank summary record for spirits of 190°
or more of proof held in storage tanks.
The record must show the proof gallons

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deposited into, withdrawn from, and
remaining in the tanks in the storage
account. The proprietor must prepare a
separate tank summary record for each
kind of spirits of 190° or more of proof.
The proprietor must make an entry for
each day on which a transaction occurs,
and the entry must summarize the
individual transactions shown on the
deposit records.
(b) Arrangement of records. The
proprietor must prepare and arrange the
tank summary records as follows:
(1) For domestic spirits, by the name
of the producer or warehouseman;
(2) For imported spirits, by the name
of the warehouseman who received the
spirits from customs custody; and
(3) For spirits from Puerto Rico or the
Virgin Islands, by the name of the
producer in Puerto Rico or the Virgin
Islands.
(c) Details of records. Tank summary
records must show the following details:
(1) The kind of spirits;
(2) The date of the transactions
summarized;
(3) The proof gallons deposited;
(4) The proof gallons withdrawn;
(5) The proof gallons remaining in
tanks; and
(6) Any gain or loss disclosed by
inventory or on emptying of the tanks
covered by the tank summary record.
(26 U.S.C. 5207)

Processing Records
§ 19.596

Processing records in general.

A proprietor who processes spirits
must maintain daily records of
transactions and operations in the
processing account relating to:
(a) The manufacture of distilled
spirits products;
(b) Finished products;
(c) The denaturation of spirits; and
(d) The manufacture of articles.
(26 U.S.C. 5207)
§ 19.597

Manufacturing records.

(a) Receipts. A proprietor must
maintain daily records of the spirits,
wines, and alcoholic flavoring materials
received into the processing account for
the manufacture of distilled spirits
products. Total receipts must be
summarized showing the amount of:
(1) Spirits received from storage or
production at the same plant;
(2) Spirits received from other plants
by transfer in bond;
(3) Spirits received from customs
custody;
(4) Spirits received by return to bond;
(5) Wines received from the storage at
the same plant;
(6) Wines received by transfer in
bond; and

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(7) Alcoholic flavoring materials
received.
(b) Additional receipt information.
The records described in paragraph (a)
of this section must also show the name
and plant number of the producer or
processor (or the warehouseman in the
case of blended beverage rums or
brandies or spirits of 190° of more of
proof received from storage) for
domestic spirits, the name of the
importer and the country of origin for
imported spirits, and the name and
address of the producer for wines and
alcoholic flavoring materials.
(c) Usage. A proprietor must maintain
daily records of the spirits, wines, and
alcoholic flavoring materials and other
ingredients used in the manufacture of
distilled spirits products as provided in
§ 19.598.
(d) Bottling or packaging. A proprietor
must maintain daily records of the
bottling or packaging of each batch of
spirits as provided in § 19.599.
(e) Other dispositions. A proprietor
must maintain daily records of all other
dispositions of spirits, wines and
alcoholic flavoring materials, including,
but not limited to, records regarding the
following:
(1) Spirits, wines, and alcoholic
flavoring materials removed from the
distilled spirits plant premises;
(2) Transfers in bond;
(3) Spirits transferred to the
production account for redistillation;
(4) Redistillation of spirits, including
the production of gin or vodka by other
than original and continuous
distillation;
(5) Voluntary destruction of spirits or
wines; and
(6) Losses of spirits, wines and
alcoholic flavoring materials.
(26 U.S.C. 5207)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.598

Dump/batch records.

A proprietor who processes, mixes, or
blends spirits in the processing account
must maintain ‘‘dump/batch’’ records
setting forth detailed information
regarding the processing of the spirits.
The dump/batch records must contain
each of the following items of
information that applies to the
processing in question:
(a) Serial number of the record or
batch number;
(b) Name and distilled spirits plant
number of the producer;
(c) Kind and age of the spirits used,
together with a notation, if applicable,
that the spirits—
(1) Were treated with oak chips;
(2) Contain added caramel;
(3) Were imported; or
(4) Are from Puerto Rico or the Virgin
Islands;

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(d) Serial number of the tank or
container to which ingredients are
added for use;
(e) Serial or identification number of
the tank or container from which spirits
are removed;
(f) Quantity by ingredient of other
alcoholic ingredients used, showing
wine in wine gallons, the percentage of
alcohol by volume and proof, and
alcoholic flavoring materials in proof
gallons;
(g) Serial number of the source
transaction record (for example, the
record for spirits previously dumped);
(h) Date of each transaction;
(i) Quantity, by ingredient (other than
water), of nonalcoholic ingredients
used;
(j) Formula number;
(k) Quantity of ingredients used in the
batch that have been previously
dumped, reported on dump records, and
held in tanks or containers;
(l) Total quantity in proof gallons of
all alcoholic ingredients used;
(m) Identification of each record to
which spirits are transferred;
(n) Quantity of each lot transferred;
(o) Date of each transfer;
(p) Total quantity in proof gallons of
the product transferred;
(q) Batch gain or loss; and
(r) For each batch to be tax
determined in accordance with § 19.247,
the effective tax rate.
Bottling and packaging records.

A proprietor who bottles or packages
spirits must prepare a ‘‘bottling and
packaging’’ record for each lot of spirits
bottled or packaged. The bottling and
packaging record must contain the
following information:
(a) Bottling tank number;
(b) Serial number of the record
(beginning with ‘‘1’’ at the start of each
calendar or fiscal year);
(c) Formula number (if any) under
which the batch was produced;
(d) Serial number of the dump/batch
record from which the spirits were
received;
(e) Kind of distilled spirits product
(including age, if claimed);
(f) Details of the tank gauge (including
proof, wine gallons, proof gallons, and,
if applicable, obscuration);
(g) The date the bottles or packages
were filled;
(h) The size of the bottles or packages
filled, the number of bottles per case,
and the number of cases or packages
filled;
(i) Serial numbers by brand name of
the cases or other containers filled;
(j) Proof of the spirits bottled or
packaged (if different from the proof

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(26 U.S.C. 5207)
§ 19.600
record.

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Alcohol content and fill test

A proprietor must maintain a record
of the results of all tests of alcohol
content and quantity (fill) conducted.
The record must include information
that will enable TTB officers to
determine whether the proprietor is
complying with the requirements of
§ 19.356. The record of alcohol content
and fill tests must contain, at a
minimum, the following information:
(a) Date and time of the test;
(b) Bottling tank number;
(c) Serial number of the bottling
record;
(d) Bottling line designation;
(e) Size of bottles filled;
(f) Number of bottles tested;
(g) Labeled alcohol content;
(h) Alcohol content found by the test;
(i) Percentage of variation from 100
percent fill; and
(j) Corrective action taken, if any.
(26 U.S.C. 5207, 5555)
§ 19.601

(26 U.S.C. 5207)
§ 19.599

recorded under paragraph (f) of this
section);
(k) Total quantity bottled, packaged,
or otherwise disposed of in bulk;
(l) Losses or gains of the distilled
spirits product; and
(m) If labeled as bottled in bond, a
statement to that effect.

Finished products records.

(a) Bottling and packaging. A
proprietor must maintain daily
transaction records and a daily
summary record of the kind and
quantity of finished products bottled or
packaged within the processing account
at the distilled spirits plant. These
records must show:
(1) The beginning and ending quantity
of bottled or packaged spirits on hand;
(2) The quantity of spirits bottled or
packaged; and
(3) Inventory overages.
(b) Disposition of finished products. A
proprietor must also maintain daily
records of the disposition of finished
products from the processing account at
the distilled spirits plant. These
disposition records must show any
spirits:
(1) Transferred in bond (packages);
(2) Withdrawn tax determined;
(3) Withdrawn free of tax for U.S.,
hospital, scientific, or educational use;
(4) Withdrawn without payment of
tax for addition to wine;
(5) Withdrawn for exportation, for
vessels and aircraft supplies and for
transfer to a customs bonded
warehouse;
(6) Transferred to the production
account for redistillation;

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(7) Withdrawn for research,
development or testing (including
government samples);
(8) Voluntarily destroyed;
(9) Dumped for further processing;
(10) Recorded losses or shortages of
finished product; and
(11) Disposed of as samples of the
finished product.
(26 U.S.C. 5207)
§ 19.602

Redistillation records.

If a proprietor redistills spirits in the
processing account (as in the production
of gin or vodka by redistillation), the
proprietor must prepare a record of the
redistillation. The record must show the
kind and quantity of the spirits entered
into the distilling system and the kind
and quantity of the spirits removed from
the distilling system upon completion of
the process.
(26 U.S.C. 5207)
§ 10.603

Liquor bottle records.

A proprietor must maintain records of
the receipt, use, and disposition of
liquor bottles.
(26 U.S.C. 5207)
§ 19.604 Rebottling, relabeling, and
reclosing records.

(a) If a proprietor dumps spirits for
rebottling, the proprietor must prepare
in accordance with § 19.599 a bottling
and packaging record that covers the
rebottling operation.
(b) If a proprietor relabels or recloses
bottled products in accordance with
§ 19.363, the proprietor must maintain
records of the operation that reflect the
following:
(1) The identity of the spirits
relabeled or reclosed;
(2) The date of the transaction;
(3) The serial numbers of any cases
involved; and
(4) The total number of bottles.
(26 U.S.C. 5207)

Denaturation and Article Manufacture
Records

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.606

Denaturation records.

(a) General. A processor that is
authorized to denature spirits must
maintain daily records of denaturation
showing the following information:
(1) Spirits that are received for, and
used in, denaturation;
(2) Spirits, denatured spirits,
recovered denatured spirits, spirits
residues, and articles that are redistilled
in the processing account for
denaturation;
(3) Kind and quantity of denaturants
received and used in denaturation of
spirits or otherwise disposed of;
(4) Conversion of denatured alcohol
formulas in accordance with § 19.392;

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(5) Denatured spirits produced,
received, stored in tanks, filled into
containers, removed, or otherwise
disposed of;
(6) Recovered denatured spirits or
recovered articles received, restored, or
redenatured;
(7) Packages of denatured spirits
filled, with a separate record for each
formula number and filed in numerical
order according to the serial number or
lot identification number of the
packages;
(8) Losses of denatured spirits; and
(9) Disposition of denatured spirits.
(b) Record of denaturation. Each time
that a proprietor denatures spirits, the
proprietor must prepare a record that
shows the formula number, the tank in
which denaturation takes place, the
proof gallons of the spirits before
denaturation, the quantity of each
denaturant used (in gallons, or in
pounds or ounces), and the wine gallons
of denatured spirits produced.
(26 U.S.C. 5207)
§ 19.607

Article manufacture records.

A processor that is authorized to
manufacture articles must maintain
daily records arranged by the name and
authorized use code of the article and
showing the following:
(a) Quantity, by formula number of
denatured spirits used in the
manufacture of the article;
(b) Quantity of each article
manufactured; and
(c) Quantity of each article removed,
or otherwise disposed of, including the
name and address of the person
purchasing or otherwise disposing of
the article.
(26 U.S.C. 5207)

Tax Records
§ 19.611 Records of tax determination in
general.

(a) Taxable withdrawals. Except as
otherwise provided in this part, a
proprietor must gauge and determine
the tax on spirits when they are
withdrawn from bond. When spirits are
withdrawn from bond, the proprietor
must also prepare a record of the tax
determination in accordance with
paragraph (b) of this section.
(b) Form of record. A serially
numbered invoice or shipping
document, signed or initialed by an
agent or employee of the proprietor, will
constitute the record of tax
determination. Although neither the
proof gallons nor the effective tax rate
must be shown on the record of tax
determination, each invoice or shipping
document must contain information
sufficient to enable TTB officers to

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determine the total proof gallons and, if
applicable, each effective tax rate and
the proof gallons removed at each
effective tax rate. For purposes of this
part, the total proof gallons calculated
from each invoice or shipping document
constitutes a single withdrawal.
(26 U.S.C. 5207)
§ 19.612 Summary records of tax
determinations.

Each proprietor that withdraws
distilled spirits on determination of tax,
but before payment of tax, must
maintain a daily summary record of tax
determinations. The summary record
must show for each day on which tax
determinations occur:
(a) The serial numbers of the records
of tax determination, the total proof
gallons rounded to the nearest tenth
proof gallon on which tax was
determined at each effective tax rate,
and the total tax; or
(b) The serial numbers of the records
of tax determination, the total tax for
each record of tax determination, and
the total tax.
(26 U.S.C. 5207)
§ 19.613 Average effective tax rate
records.

(a) Daily record. For each distilled
spirits product to be tax determined
using an average effective tax rate in
accordance with § 19.249, the proprietor
must prepare a daily summary record
showing:
(1) The serial number of the batch
record of each batch of the product that
will be bottled or packaged, in whole or
in part, for domestic consumption;
(2) The proof gallons in each such
batch derived from distilled spirits,
eligible wine, and eligible flavors; and
(3) The tax liability of each such batch
determined as follows—
(i) Proof gallons of all distilled spirits
(exclusive of distilled spirits derived
from eligible flavors), multiplied by the
tax rate prescribed in 26 U.S.C. 5001;
(ii) Wine gallons of each eligible wine,
multiplied by the tax rate which would
be imposed on the wine under 26 U.S.C.
5041(b)(1), (2), or (3) but for its removal
to bonded premises; and
(iii) Proof gallons of all distilled
spirits derived from eligible flavors, to
the extent that those distilled spirits
exceed 2.5 percent of the proof gallons
in the product, multiplied by the tax
rate prescribed in 26 U.S.C. 5001.
(b) Monthly records. At the end of
each month during which the product is
manufactured, the proprietor must:
(1) Determine the total proof gallons
and total tax liability for each summary
record prescribed by paragraph (a) of
this section;

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(2) Add the sums derived under
paragraph (b)(1) of this section to the
like sums determined for each of the
preceding 5 months; and
(3) Divide the total tax liabilities by
the total proof gallons.
(26 U.S.C. 5207)
§ 19.614

Inventory reserve records.

(a) General. For each eligible distilled
spirits product to be tax determined in
accordance with § 19.250, the proprietor
must establish an inventory reserve
account, in accordance with this
section.
(b) Deposit records. For each batch of
the bottled or packaged product, the
proprietor must enter into the inventory
reserve account a deposit record, which
may be combined with the bottling and
packaging record required by § 19.599,
showing:
(1) The name of the product;
(2) The bottling and packaging record
serial number;
(3) The date the bottling or packaging
was completed;
(4) The total proof gallons bottled and
packaged; and
(5) The effective tax rate of the
product computed in accordance with
§ 19.246.
(c) Depletions. The inventory reserve
account for each product must be
depleted in the same order in which the
deposit records were entered into the
account. The proprietor must record a
depletion for each disposition (for
example, a taxable removal, an
exportation, or an inventory shortage or
breakage) by entering on the deposit
record:
(1) The transaction date;
(2) The transaction record serial
number;
(3) The proof gallons disposed of; and
(4) The proof gallons remaining. If any
depletion exceeds the quantity of
product remaining on the deposit
record, the proprietor must deplete the
remaining quantity, close the deposit
record, and then deplete the remainder
of the transaction from the next deposit
record.
(26 U.S.C. 5207)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.615 Standard effective tax rate
records.

For each product to be tax determined
using a standard effective tax rate in
accordance with § 19.248, a proprietor
must prepare a record of the standard
effective tax rate computation showing,
for one proof gallon of the finished
product, the following information:
(a) The name of the product;
(b) The least quantity of each eligible
flavor that will be used in the product,

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in proof gallons, or 0.025 proof gallon,
whichever is less;
(c) The least quantity of each eligible
wine that will be used in the product,
in proof gallons;
(d) The greatest effective tax rate
applicable to the product, calculated in
accordance with § 19.246 with the
values indicated in paragraphs (a) and
(b) of this section; and
(e) The date on which the use of the
standard effective tax rate commenced.
(26 U.S.C. 5207)

Other Required Records
§ 19.616

Records of samples.

(a) Required records. A proprietor
must maintain records of all samples
taken under §§ 19.434 and 19.435. The
sample record must show the:
(1) The date that the samples were
taken;
(2) The account from which taken;
(3) The purpose for which taken;
(4) The size and number of samples
taken;
(5) The kind of spirits;
(6) The disposition of each sample
(for example, destroyed, returned to
containers or the distilling system,
retained for library purposes); and
(7) The name and address of the
recipient of the sample if a sample is to
be analyzed or tested elsewhere than at
the distilled spirits plant where taken.
(b) Sample schedule. When a
proprietor takes samples pursuant to an
established schedule, the proprietor
may maintain the schedule as the
required record if it contains the
information required by paragraphs
(a)(2) through (a)(7).
(26 U.S.C. 5207)
§ 19.617

Destruction records.

Each time that a proprietor
voluntarily destroys spirits, denatured
spirits, articles, or wines, the proprietor
must prepare a record of the destruction
that sets forth:
(a) The identification of the spirits,
denatured spirits, articles, or wines,
including kind, quantity, elements of
gauge, name and permit number of the
producer, warehouseman or processor,
and identity and type of container;
(b) The date, time, place and manner
of the destruction;
(c) A statement that the spirits had, or
had not, previously been withdrawn
and returned to bond; and
(d) The name and title of any
representative of the proprietor who
accomplished or supervised the
destruction.
(26 U.S.C. 5207)

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§ 19.618

Gauge record.

When a gauge record is required by
this part, the proprietor must prepare
the gauge record in a manner that
shows:
(a) The serial number of the gauge
record, which must either:
(1) Commence with ‘‘1’’ at the start of
each calendar or fiscal year, or
(2) Be a unique identifying number
that is not repeated.
(b) From the following, the applicable
circumstances requiring the gauge—
(1) Production gauge and entry for
deposit in the storage or processing
account at the distilled spirits plant
where the spirits were produced;
(2) Packaging of spirits or wine filled
from a tank in the storage account at the
same distilled spirits plant;
(3) Transfer from the processing or
storage account to the production
account for redistillation;
(4) Repackaging of spirits of 190° or
more of proof; or
(5) Gauge on return to bond in
production or processing operations of
spirits, denatured spirits, recovered
spirits, recovered denatured spirits,
articles, recovered articles, or spirits
residues;
(c) The date of the gauge;
(d) Any related form or record
(identification, serial number and date);
(e) The kind of spirits or formula
number for denatured spirits;
(f) The proof of distillation (not
required for denatured spirits, spirits for
redistillation, or spirits of 190° or more
of proof);
(g) When containers are to be filled,
the type and number of containers;
(h) The age of the spirits;
(i) The name and distilled spirits
plant number of the producer or
warehouseman; and
(j) The following gauge data—
(1) Package identification, tank
number, volumetric or weight gauge
details, proof, and wine gallons;
(2) Cooperage identification (‘‘C’’ for
charred, ‘‘REC’’ for recharred, ‘‘P’’ for
plain, ‘‘PAR’’ for paraffined, ‘‘G’’ for
glued, or ‘‘R’’ for reused, and ‘‘PS’’ if a
barrel has been steamed or water soaked
before filling);
(3) Entry proof for whiskey;
(4) Proof gallons per filled package;
and
(5) Total proof gallons of spirits or
wine gallons of denatured spirits,
recovered denatured spirits, articles,
spirits residues, or wine.
(26 U.S.C. 5207)
§ 19.619

Package gauge record.

When this part or part 28 of this
chapter requires a proprietor to gauge

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packages of spirits, the proprietor must
prepare a package gauge record in a
manner that shows:
(a) The date the record is prepared;
(b) The identity of the related
transaction form or record, and its serial
number;
(c) The name and distilled spirits
plant number of the producer or
processor. For blended rums or brandies
the proprietor must enter the name and
plant number of the blending
warehouseman. For spirits of 190° or
more of proof, the proprietor must enter
the name and plant number of the
producer or warehouseman, as
appropriate and, where the packages
have already been marked, the name
and distilled spirits plant number
marked thereon. For imported spirits,
the proprietor must enter the name of
the warehouseman who received the
spirits from customs custody and the
name of the importer. For Virgin Islands
or Puerto Rican spirits, the proprietor
must enter the name of the producer in
the Virgin Islands or Puerto Rico;
(d) The proof of distillation for spirits
not over 190° of proof; and
(e) For each package—
(1) The serial or identification
number;
(2) The designation for wooden
barrels (‘‘C’’ for charred, ‘‘REC’’ for
recharred, ‘‘P’’ for plain, ‘‘PAR’’ for
paraffined, ‘‘G’’ for glued, ‘‘R’’ for reused,
and ‘‘PS’’ if a barrel has been steamed or
water soaked before filling);
(3) The kind of spirits;
(4) The gross weight determined at the
time of the original gauge or regauge or
at the time of shipment;
(5) The present tare on regauge;
(6) The net weight for filling gauge or
regauge;
(7) The proof;
(8) The proof gallons for regauge;
(9) The original proof gallons; and
(10) The receiving weights, when a
material difference appears on receipt
after transfer in bond of weighed
packages.
(26 U.S.C. 5207)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.620 Transfer record—consignor’s
responsibility.

When this part requires a consignor
proprietor to prepare a transfer record
covering spirits, denatured spirits, or
wines shipped in bond from its distilled
spirits plant, the transfer record must
include:
(a) The serial number of the transfer
record, which must either:
(1) Commence with ‘‘1’’ at the start of
each calendar or fiscal year, or
(2) Be a unique identifying number
that is not repeated.
(b) The serial number and date of
form TTB F 5100.16 (not required for

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wine spirits withdrawn without
payment of tax for use in wine
production);
(c) The name and distilled spirits
plant number of the consignor
proprietor;
(d) The name and distilled spirits
plant number or bonded wine cellar
number of the consignee;
(e) The account from which the spirits
or wines were removed for transfer (that
is, the production, storage, or processing
account);
(f) A description of the spirits,
denatured spirits, or wine, including—
(1) The name and plant number of the
producer, warehouseman, or processor
(not required for denatured spirits or
wine). For imported spirits transferred
in bond between distilled spirits plants,
the transfer record must show the name
and plant number of the warehouseman
or processor who received the spirits
from customs custody. For Virgin
Islands or Puerto Rican spirits, the
transfer record must show the name of
the producer in the Virgin Islands or
Puerto Rico. For spirits of different
producers or warehousemen that have
been mixed in the processing account,
the transfer record must show the name
of the processor;
(2) The kind of spirits or wines. For
denatured spirits, the transfer record
must show the kind and formula
number. For alcohol, the transfer record
must show the material from which it
was produced. For bulk spirits and for
alcohol in packages, the transfer record
must show the kind and proof. For other
spirits and wines, the transfer record
must show the kind designation as
specified in part 4 or part 5 of this
chapter, as appropriate;
(3) The age (in years, months, and
days) and year of production;
(4) The number of packages or cases
with their lot identification numbers or
serial numbers and dates of fill;
(5) The type of container (if the
spirits, denatured spirits or wines are to
be transferred by pipeline, the transfer
record must show ‘‘P/L’’);
(6) The proof gallons for distilled
spirits, or wine gallons for denatured
spirits or wine; and
(7) For distilled spirits products that
contain eligible wine or eligible flavors,
the transfer record must show the
elements necessary to compute the
effective tax rate as follows—
(i) Proof gallons of distilled spirits
(exclusive of distilled spirits derived
from eligible flavors);
(ii) Wine gallons of each eligible wine
and the percentage of alcohol by volume
of each; and
(iii) Proof gallons of distilled spirits
derived from eligible flavors;

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(g) A notation to indicate when spirits
are being transferred in bond from a
production facility to another distilled
spirits plant;
(h) The identification of the
conveyance;
(i) The identity of the seals, locks, or
other devices affixed to the conveyance
or package (permanent seals affixed to a
conveyance that remain intact need not
be recorded on the transfer record when
a permanent record is maintained);
(j) The date of transfer; and
(k) The signature and title of the
consignor, with a penalty-of-perjury
statement as prescribed in § 19.45.
(26 U.S.C. 5207)
§ 19.621 Transfer record—consignee’s
responsibility.

(a) When a proprietor receives wine
by transfer in bond from a bonded wine
cellar as the consignee, that proprietor
must complete the transfer record
covering the transfer in accordance with
§ 24.284 of this chapter.
(b) When a proprietor receives spirits
from an alcohol fuel plant or from
customs custody, or receives spirits,
denatured spirits, and wines from the
bonded premises of another distilled
spirits plant as the consignee, that
proprietor must record the results of the
receipt by including the following on
the related transfer record:
(1) The date of receipt;
(2) A notation that the securing
devices on the conveyance were, or
were not, intact on arrival (not
applicable to denatured spirits or spirits
transferred in unsecured conveyances);
(3) The gauge of spirits, denatured
spirits, or wine showing the tank
number, proof (percent of alcohol by
volume for wine) and specifications of
the weight or volumetric determination
of quantity, wine gallons or proof
gallons received, and any losses or
gains;
(4) A notation of any excessive intransit loss, missing packages,
tampering, or apparent theft;
(5) The account into which the spirits,
denatured spirits, or wines were
deposited (that is, production, storage or
processing); and
(6) The signature and title of the
consignee proprietor, with a penalty-ofperjury statement as prescribed in
§ 19.45.
(c) When spirits are transferred from
customs custody as provided in subpart
P of this part, the transfer record must
contain the information specified in
§ 27.138 of this chapter.
(26 U.S.C. 5207)

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§ 19.622 Daily records of wholesale liquor
dealer and taxpaid storeroom operations.

(a) General. If a proprietor in
connection with plant operations
conducts wholesale liquor dealer
operations, or operates a taxpaid
storeroom on, or in the immediate
vicinity of, general plant premises, or
operates taxpaid storage premises at
another location from which distilled
spirits are not sold at wholesale, that
proprietor must maintain daily records
covering the receipt and disposition of
all distilled spirits and wines and all
reclosing and relabeling operations at
those premises. The proprietor must
keep separate records for each of those
premises.
(b) Receipt and disposition records.
The records covering receipt and
disposition of distilled spirits and wines
required under paragraph (a) of this
section must show:
(1) The date of the transaction (or date
of discovery in the case of casualty or
theft);
(2) The name and address of each
consignor or consignee, as the case may
be;
(3) The brand name;
(4) The kind of spirits;
(5) The actual quantity of distilled
spirits involved (proof and proof gallons
if in packages, wine gallons or liters and
proof if in bottles);
(6) The package identification or
serial numbers of the packages involved;
(7) The name of the producer; and
(8) The country of origin in the case
of imported spirits.
(c) Case dispositions. In addition to
the records required under paragraph (b)
of this section, the appropriate TTB
officer may, upon notice, require the
proprietor to record the case serial
numbers for dispositions.
(d) Reclosing or relabeling. The
records of reclosing and relabeling
required under paragraph (a) of this
section must include:
(1) The date of the transaction;
(2) The serial numbers of the cases
involved;
(3) The total number of bottles; and
(4) The name of the bottler.
(26 U.S.C. 5114, 5555)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.623

Records of inventories.

(a) General. When conducting an
inventory required by this part, the
proprietor must prepare a record of the
inventory taken. The record must
include the following:
(1) The date of the inventory;
(2) The identity of the container(s);
(3) The kind and quantity of spirits,
denatured spirits, and wines;
(4) Any losses (whether by theft,
voluntary destruction or otherwise),
gains or shortages; and

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(5) The proprietor’s signature, or the
signature of the person taking the
inventory, with the penalties of perjury
statement as prescribed in § 19.45.
(b) Overages, gains, or losses. A
proprietor must record in the daily
records of operations, tank records,
dump/batch records, bottling and
packaging records, or denaturation
records, as appropriate, any overages,
gains, or losses disclosed by an
inventory.
(c) Retention. A proprietor must retain
inventory records and make them
available for inspection by TTB officers.
(26 U.S.C. 5207)
§ 19.624 Removal of Puerto Rican and
Virgin Islands spirits and rum imported
from all other areas.

(a) General. A proprietor must
maintain separate accounts, in proof
gallons, of Puerto Rican spirits having
an alcoholic content of at least 92
percent rum, of Virgin Islands spirits
having an alcoholic content of at least
92 percent rum, and of rum imported
from all other areas removed from the
processing account on determination of
tax. A proprietor may determine the
quantities of spirits in these categories
that are contained in products mixed in
processing with other alcoholic
ingredients by using one of the methods
referred to in paragraph (b), (c), or (d) of
this section. The proprietor must report
these quantities on the monthly report
of operations referred to in § 19.632.
(b) Standard method. For purposes of
maintaining the separate accounts
referred to in paragraph (a) of this
section, a proprietor may determine the
quantities of spirits in those specified
categories based on the least amount of
those spirits that may be used in each
product as stated in the approved form
TTB F 5110.38, Formula for Distilled
Spirits Under the Federal Alcohol
Administration Act.
(c) Averaging method. For purposes of
the separate accounts referred to in
paragraph (a) of this section, a
proprietor may determine the quantities
of spirits in those specified categories by
computing the average quantity of those
spirits contained in all batches of the
same product formulation manufactured
during the preceding six-month period.
The average must be adjusted at the end
of each month in order to include only
the preceding six-month period.
(d) Alternative method. If a proprietor
wishes to use a method for determining
the quantities of spirits as an alternative
for a method prescribed in paragraphs
(b) or (c) of this section, the proprietor
must file an application with the
appropriate TTB officer. The written
application must specifically describe

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the proposed alternative method and
must explain the reasons for using the
alternative method.
(26 U.S.C. 5555, 7652)
§ 19.625 Shipping records for spirits and
specially denatured spirits withdrawn free
of tax.

(a) General. A proprietor must prepare
a shipping record when:
(1) Spirits are withdrawn free of tax
in accordance with §§ 19.424(a) through
(c);
(2) Specially denatured spirits are
withdrawn free of tax in accordance
with §§ 19.424(d) and 19.427; and
(3) Samples of specially denatured
spirits in excess of five gallons are
withdrawn in accordance with
§ 19.427(c);
(b) Form of record. The shipping
record referred to in paragraph (a) of
this section may be any commercial
document, such as an invoice or bill of
lading, so long as it reflects the
following information:
(1) The name and address of the
consignor;
(2) A serial number;
(3) The date of shipment;
(4) The name, address, and permit
number of the consignee;
(5) The kind of the spirits;
(6) The proof of the spirits;
(7) The formula number(s), for
specially denatured spirits;
(8) The number and size of the
shipping containers;
(9) The package identification
numbers or serial numbers of the
shipping containers; and
(10) The total wine gallons (specially
denatured spirits) or the total proof
gallons (tax-free alcohol).
(c) Disposition of the shipping record.
The proprietor must forward a copy of
the shipping record to the company that
receives the spirits and must retain a
copy for its files.
(26 U.S.C. 5207)
§ 19.626 Records of distilled spirits
shipped to manufacturers of nonbeverage
products.

(a) General. When a proprietor ships
distilled spirits to a manufacturer of
nonbeverage products, the proprietor
must prepare a record of the shipment,
forward the original to the consignee,
and retain a copy.
(b) Form of record. The record of
shipment referred to in paragraph (a) of
this section may consist of either the
record of tax determination required by
§ 19.611 or any other document that
contains the necessary information
specified in paragraph (c) of this
section.

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(c) Required information. The record
of shipment required under this section
must contain the following information:
(1) The name, address, and registry
number of the proprietor;
(2) The date of shipment;
(3) The name and address of the
consignee;
(4) The kind, proof, and quantity of
distilled spirits in each container;
(5) The number of shipping containers
of each size;
(6) The package identification
numbers or serial numbers of the
containers;
(7) The serial number of the
applicable record of tax determination;
and
(8) For distilled spirits containing
eligible wine or eligible flavors, the
effective tax rate.
(26 U.S.C. 5201, 5207)
§ 19.627

Alternating premises record.

When distilled spirits plant bonded
premises are alternated to or from
bonded or taxpaid wine, brewery,
manufacturer of nonbeverage products,
or general premises, under an approved
alternation plan described in the plant
registration, the proprietor must record
in a logbook, or must maintain in
commercial records retrievable and
available for TTB inspection upon
request, the following information:
(a) The date and hour of the
alternation;
(b) The kind of premises being
curtailed, including the plant
identification number, if applicable;
(c) The kind of premises being
extended, including the plant
identification number, if applicable;
(d) The identity of the special
diagrams in the registration documents
depicting the premises before and after
the alternation; and
(e) The purpose of the alternation.
(26 U.S.C. 5555)

Submission of transaction forms.

srobinson on DSKHWCL6B1PROD with RULES2

(26 U.S.C. 5207)
Submission of monthly reports.

(a) Each proprietor must submit
monthly reports of its distilled spirits
plant operations to TTB in accordance
with paragraph (b) of this section. The
proprietor must submit the original
reports to TTB and must retain a copy

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§ 19.634 Computer-generated reports and
transaction forms.

TTB will accept computer-generated
reports of operations and transaction
forms made using a computer printer on
plain white paper without preapproval
from TTB if they conform to the
following standards:
(a) The computer-generated report or
form must approximate the physical
layout of the corresponding TTB report
or form, although the typeface may vary;
(b) The text of the computer-generated
report or form including each line entry,
must exactly match the official TTB
report or form; and
(c) Each penalty of perjury statement
specified for the TTB report or form
must be reproduced in its entirety.
(26 U.S.C. 5207)

Subpart W—Production of Vinegar by
the Vaporizing Process

§ 19.641

When required to submit a transaction
form to the appropriate TTB officer
under this part, the proprietor must
submit the form no later than the close
of business of the third business day
following the day on which the
transaction took place.
§ 19.632

(26 U.S.C. 5207)

Vinegar Plants in General

Filing Forms and Reports
§ 19.631

for its records. The required monthly
report forms are as follows:
(1) Monthly Report of Production
Operations, form TTB F 5110.40, except
that no report is required when
production operations are suspended as
provided in § 19.292;
(2) Monthly Report of Storage
Operations, form TTB F 5110.11;
(3) Monthly Report of Processing
Operations, form TTB F 5110.28; and
(4) Monthly Report of Processing
(Denaturing) Operations, form TTB F
5110.43.
(b) Each proprietor must submit the
monthly reports specified in paragraph
(a) of this section to the Director,
National Revenue Center, not later than
the 15th day of the month following the
close of the reporting period. A
proprietor may submit monthly reports
in either paper format or electronically
via TTB Pay.gov.

Jkt 223001

Application.

(a) In general. This subpart covers the
production of vinegar by the vaporizing
process. It prescribes rules regarding the
qualification, location, construction,
and operation of vinegar plants and the
maintenance of records of operations at
vinegar plants.
(b) Application of other regulations.
As a general rule, the provisions of
subparts A through V and subpart X of
this part do not apply to vinegar plants
using the vaporizing process. However,
the following sections do apply to
vinegar plants using the vaporizing
process: § 19.1 (definitions); § 19.11
(right of entry and examination); § 19.12
(furnishing facilities and assistance);

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§ 19.52 (restriction on locations of
plants); § 19.55 (other businesses);
§ 19.79 (registry of stills); § 19.573
(location of required records); § 19.574
(availability of records); § 19.575
(retention of records); and § 19.576
(preservation of records).
(26 U.S.C. 5501–5505)

Qualification, Construction, and
Equipment Requirements for Vinegar
Plants
§ 19.643

Qualification requirements.

Before beginning the business of
manufacturing vinegar by the vaporizing
process, a person must make written
application to the appropriate TTB
officer and receive approval of the
application from TTB. The application
must include:
(a) The applicant’s name and
principal business address (including
the plant address if different from the
applicant’s principal business address);
(b) A description of the plant
premises;
(c) A description of the operations to
be conducted; and
(d) A description of each still,
including the name and address of the
owner, the kind of still and its capacity,
and the purpose for which the still was
set up.
(26 U.S.C. 5502)
§ 19.644 Changes after original
qualification.

If there is any change in the
information that was provided in an
approved application, the proprietor of
the vinegar plant must immediately
notify the appropriate TTB officer in
writing of the change. The notice must
identify the change and the effective
date of the change.
(26 U.S.C. 5502)
§ 19.645 Notice of permanent
discontinuance of business.

If the proprietor of a vinegar plant
decides to permanently discontinue
operations, the proprietor must so notify
the appropriate TTB officer in writing.
The proprietor must include in the
notice a statement regarding the status
of each still.
(26 U.S.C. 5502)
§ 19.646 Construction and equipment
requirements.

The proprietor of a vinegar plant must
construct and equip the plant to ensure
that:
(a) The distilled spirits vapors that are
separated by the vaporizing process
from the mash are condensed only by
introducing them into the water or other
liquid used in making the vinegar; and

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(b) The distilled spirits produced are
accurately accounted for and are secure
from unlawful removal from the
premises or from unauthorized use.
(26 U.S.C. 5502)

Rules for Operating Vinegar Plants
§ 19.647

Authorized operations.

After approval of an application by
TTB, a plant qualified for the
production of vinegar may only:
(a) Produce vinegar by the vaporizing
process; and
(b) Produce distilled spirits of 30° of
proof or less for use in the manufacture
of vinegar on the vinegar plant
premises.
(26 U.S.C. 5501)
§ 19.648

(26 U.S.C. 5504)
Restrictions on alcohol content.

No person may remove from the
vinegar plant premises vinegar or other
fluid or any other material containing
more than 2 percent alcohol by volume.
(26 U.S.C. 5504)

Required Records for Vinegar Plants

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.650

Daily records.

Each manufacturer of vinegar by the
vaporizing process must keep accurate
and complete daily records of
production operations. It is not
necessary to create records to satisfy this
requirement if the records kept by the
manufacturer in the ordinary course of
business contain all required
information. The required information
consists of the following:
(a) The kind and quantity of
fermenting or distilling materials
received on the premises;
(b) The kind and quantity of materials
fermented or mashed;
(c) The proof gallons of distilled
spirits produced;
(d) The proof gallons of distilled
spirits used in the manufacture of
vinegar;
(e) The wine gallons of vinegar
produced; and
(f) The wine gallons of vinegar
removed from the premises.
(26 U.S.C. 5504)

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§ 19.651

Jkt 223001

Liability for distilled spirits tax.

The distilled spirits excise tax
imposed by 26 U.S.C. 5001 must be paid
on any distilled spirits produced in, or
removed from, the premises of a vinegar
plant in violation of law or regulations.
(26 U.S.C. 5505)

Subpart X—Distilled Spirits for Fuel
Use
§ 19.661

Scope.

This subpart covers the establishment
and operation of alcohol fuel plants.
(26 U.S.C. 5181)

Definitions.

As used in this subpart, the following
terms have the meanings indicated.
Alcohol fuel plant. A special type of
distilled spirits plant authorized under
26 U.S.C. 5181 and established under
this subpart solely for producing,
processing, and storing, and using or
distributing distilled spirits to be used
exclusively for fuel use.
Bonded premises. The premises of an
alcohol fuel plant where distilled spirits
are produced, processed, and stored,
and used or distributed as described in
the application for alcohol fuel producer
permit. The term includes the premises
of small alcohol fuel plants exempt from
bonding requirements under § 19.673(e).
Fuel alcohol. Distilled spirits that
have been made unfit for beverage use
at an alcohol fuel plant as provided in
this subpart.
Large plant. An alcohol fuel plant that
produces (including receives) more than
500,000 proof gallons of spirits per
calendar year.
Make unfit for beverage use. Add
materials to distilled spirits that will
preclude their beverage use without
impairing their quality for fuel use as
prescribed and authorized by the
provisions of this subpart.
Medium plant. An alcohol fuel plant
that produces (including receives) more
than 10,000 but not more than 500,000
proof gallons of spirits per calendar
year.
Permit. The document issued
pursuant to 26 U.S.C. 5181 and this
subpart authorizing the person named to
engage in business as an alcohol fuel
plant.
Plant. An alcohol fuel plant.
Proprietor. The person qualified
under this subpart to operate an alcohol
fuel plant.
Small plant. An alcohol fuel plant
that produces (including receives) not
more than 10,000 proof gallons of spirits
per calendar year.

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Spirits or distilled spirits. The
substance known as ethyl alcohol,
ethanol, or spirits of wine in any form
(including all dilutions and mixtures
thereof, from whatever source or by
whatever process produced), but not
fuel alcohol unless specifically stated.
The term does not include spirits
produced from petroleum, natural gas,
or coal.
Transfer in bond. The transfer of
spirits between alcohol fuel plants or
between a distilled spirits plant
qualified under 26 U.S.C. 5171 and an
alcohol fuel plant.
(26 U.S.C. 5181)
§ 19.663

General
§ 19.662

Conduct of operations.

A vinegar manufacturer qualified
under this subpart may:
(a) Separate by a vaporizing process
the distilled spirits from a mash; and
(b) Condense the distilled spirits
vapors by introducing them into the
water or other liquid to make the
vinegar.
§ 19.649

Liability for Distilled Spirits Tax

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Application of other provisions.

The provisions of 26 U.S.C. chapter
51 and the regulations in subparts A
through W of this part do not apply to
alcohol fuel plants except for the
following:
(a) 26 U.S.C. 5181;
(b) The definitions contained in
§ 19.1, unless the same term is defined
in this subpart;
(c) Any provision incorporated by
reference in this subpart;
(d) Any provision requiring the
payment of tax; and
(e) Any provision applicable to
distilled spirits that deals with penalty,
seizure, or forfeiture.
(26 U.S.C. 5181)
§ 19.665

Alternate methods or procedures.

(a) General. The appropriate TTB
officer may approve the use of an
alternate method or procedure that
varies from the regulatory requirements
in this subpart or from any regulatory
requirements in subparts A through W
of this part that have been incorporated
by reference in this subpart. The
appropriate TTB officer may approve
the use of an alternate method or
procedure only if the proprietor shows
good cause for its use and the alternate
method or procedure:
(1) Is not contrary to law;
(2) Will not have the effect of merely
waiving an existing regulatory
requirement;
(3) Is consistent with the purpose and
effect of the method or procedure
prescribed in this subpart;
(4) Provides equal security to the
revenue; and
(5) Will not cause an increase in cost
to the Government and will not hinder
TTB’s administration of this subpart.
(b) Exceptions. TTB will not authorize
the use of an alternate method or
procedure relating to the giving of any
bond, or to the assessment, payment, or
collection of tax.
(c) Prior approvals. Alternate methods
or procedures in effect prior to April 18,

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2011, which are not contrary to the
regulations in this part, are preserved
until renewed unless revoked by
operation of law due to the enactment
of law that is contrary to the alternate
method or procedure.
(26 U.S.C. 5181)
§ 19.666 Application for and use of an
alternate method or procedure.

(a) Application. If a proprietor wishes
to use an alternate method or procedure
as described in § 19.665, the proprietor
must submit a written letterhead
application to the appropriate TTB
officer for approval. The application
must identify the method or procedure
specified in the regulation, must
describe the proposed alternate method
or procedure in detail, and must explain
why the alternate method or procedure
is needed.
(b) Approval and use. The proprietor
may not use an alternate method or
procedure until the appropriate TTB
officer has in writing approved the
proprietor’s letterhead application.
During the period that the proprietor is
authorized to use the alternate method
or procedure, the proprietor must
comply with any conditions imposed on
its use by TTB. TTB may withdraw the
approval to use the alternate method or
procedure if TTB finds that the revenue
is jeopardized, that the alternate method
or procedure hinders effective
administration of the laws or
regulations, that the proprietor has
violated any of the conditions imposed
by TTB, or that the circumstances that
gave rise to the need for the alternate
method or procedure no longer exist.
(c) Retention. The proprietor must
retain each alternate method or
procedure approval as part of the
proprietor’s records and must make the
approval available for examination by
TTB officers upon request.
(26 U.S.C. 5181)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.667 Emergency variations from
requirements.

(a) Application. A proprietor may
request emergency approval of the use
of a method or procedure relating to
construction, equipment, and methods
of operation that represents a variance
from the requirements of this subpart or
from any regulatory requirement in
subparts A through W of this part that
have been incorporated by reference in
this subpart. When a proprietor wishes
to use an emergency method or
procedure, the proprietor must submit a
written letterhead application to the
appropriate TTB officer for approval;
the proprietor may send the application
via regular mail, email, or facsimile
transmission. The application must

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describe the proposed emergency
method or procedure and the emergency
situation it will address. For purposes of
this section, an emergency is considered
to exist only if it results from a weather
or other natural event or from an
accident or other event not involving an
intentional act on the part of the
proprietor.
(b) Approval. The appropriate TTB
officer may approve in writing the use
of an emergency method or procedure if
the proprietor demonstrates that an
emergency exists and the proposed
method or procedure:
(1) Is not contrary to law;
(2) Is necessary to address the
emergency situation;
(3) Will afford the same security and
protection to the revenue as intended by
the regulations; and
(4) Will not hinder the effective
administration of this subpart.
(c) Terms of emergency method or
procedure approval and use. (1) The
proprietor may not use an emergency
method or procedure until the
application has been approved by TTB
except when the emergency method or
procedure requires immediate
implementation to correct a situation
that threatens life or property. In a
situation involving a threat to life or
property, the proprietor may implement
the corrective action, immediately
notify the appropriate TTB officer by
telephone of the action and then file the
required written application as soon as
possible. Use of the emergency method
or procedure must conform to any
conditions specified in the approval.
(2) The proprietor must retain the
emergency method or procedure
approval as part of the proprietor’s
records and must make the approval
available for examination by TTB
officers upon request.
(3) The emergency method or
procedure will automatically terminate
when the situation that created the
emergency no longer exists. TTB may
withdraw the approval to use the
emergency method or procedure if TTB
finds that the revenue is jeopardized,
that the emergency method or procedure
hinders effective administration of the
laws or regulations, or that the
proprietor has failed to follow any of the
conditions specified in the approval.
When use of the emergency method or
procedure terminates, the proprietor
must revert to full compliance with all
applicable regulations.
(26 U.S.C. 5181)

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Liability for Taxes
§ 19.669

Distilled spirits taxes.

(a) Proprietors may withdraw distilled
spirits free of tax from an alcohol fuel
plant if the spirits are withdrawn
exclusively for fuel use in accordance
with this subpart. However, TTB will
require payment of the tax if the spirits
are diverted to beverage use or to
another use not authorized by this
subpart.
(b) The following provisions of this
part apply to distilled spirits for fuel
use:
(1) Imposition of tax liability
(§§ 19.222, 19.223, and 19.225);
(2) Assessment of tax (§§ 19.253 and
19.254); and
(3) Claims for tax (§§ 19.262 and
19.263).
(26 U.S.C. 5001, 5181)
§ 19.670 Dealer registration and
recordkeeping.

An alcohol fuel plant that sells spirits
that have not been rendered unfit for
beverage use is subject to the
requirements of subpart H of this part,
except that the reference in § 19.202 to
‘‘subpart D’’ should be taken to refer to
subpart X.
(26 U.S.C. 5181)

Obtaining a Permit
§ 19.672

Types of plants.

There are three types of alcohol fuel
plants: Small plants, medium plants,
and large plants. All alcohol fuel plants
are classified according to the amount of
spirits that they will produce and
receive during each calendar year.
When applying for a permit, an
applicant should apply for the type of
permit that fits the applicant’s needs
based on the type of alcohol fuel plant
the applicant intends to operate.
(26 U.S.C. 5181)
§ 19.673

Small plant permit applications.

(a) General. Any person wishing to
establish a small plant must file form
TTB F 5110.74, Application and Permit
for an Alcohol Fuel Producer Under 26
U.S.C. 5181, with the appropriate TTB
officer. Except as otherwise provided in
§ 19.674(d), a person may not
commence operations before issuance of
the permit.
(b) Application information. The
applicant for a small plant permit must
include the following information with
the application:
(1) Name and mailing address of the
applicant, and the location of the plant
if not the same as the mailing address;
(2) A diagram of the plant premises;
(3) A statement regarding ownership
of the premises. If the premises are not

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owned by the applicant, the owner’s
consent for access by TTB officers must
be furnished;
(4) A description of the stills on the
premises and a statement of the
maximum capacity of each;
(5) A description of the materials from
which spirits will be produced; and
(6) A description of the security
measures to be used to protect the
premises, buildings, and equipment
where spirits are produced, processed,
and stored.
(c) Information already on file. If any
of the information required by this
section is already on file with TTB and
the information is accurate and
complete, the applicant may advise the
appropriate TTB officer that the
information on file is incorporated by
reference and made part of the
application, unless the applicant will
not conduct bona fide production
operations.
(d) Additional information. When
required by the appropriate TTB officer,
the applicant must furnish, as part of
the application for a permit under this
section, any additional information
required by TTB to determine whether
the application should be approved.
(e) Bonds. The applicant is not
required to provide a bond in order to
establish a small plant, unless the
applicant will not conduct bona fide
production operations. Plants for the
receipt of spirits without production
must furnish a bond in accordance with
§ 19.699 with a penal sum as prescribed
in § 19.700. The appropriate TTB officer
must approve the bond before issuance
of the permit.
(26 U.S.C. 5181)

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§ 19.674 TTB action on small plant
applications.

(a) Notice of receipt. Within 15 days
of receipt of an application for a small
plant permit, the appropriate TTB
officer will send a written notice of
receipt to the applicant. The notice will
include a statement as to whether the
application meets the requirements of
§ 19.673. If the application does not
meet the requirements of § 19.673, the
appropriate TTB officer will return the
application to the applicant, and a new
15-day period will commence upon
receipt of an amended or corrected
application.
(b) Action on application. Within 45
days from the date that the appropriate
TTB officer sent the applicant a notice
of receipt of a completed application for
a small plant permit, the appropriate
TTB officer will either issue the permit
or give notice in writing to the applicant
stating in detail the reason that a permit
will not be issued. Denial of an

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application will not prejudice any later
application for a permit by the same
applicant.
(c) Failure to give notice. If the notice
of receipt required by paragraph (a) is
not sent, and the applicant has a receipt
indicating that the appropriate TTB
officer received the application, the 45day period provided for in paragraphs
(b) and (d) of this section will
commence on the fifteenth day after the
date the appropriate TTB officer
received the application.
(d) Presumption of approval. If,
within 45 days from the date of the
notice to the applicant of receipt of a
completed application for a small plant
permit, the appropriate TTB officer has
not notified the applicant of issuance of
the permit or denial of the application,
the application will be deemed
approved and the applicant may
proceed as if a permit had been issued.
(e) Limitation. The provisions of
paragraphs (a) and (c) of this section
apply only to the first application
submitted for any one small plant in any
calendar quarter and to an amended or
corrected first application.
(26 U.S.C. 5181)
§ 19.675

Medium plant permit applications.

(a) General. Any person wishing to
establish a medium plant must file form
TTB F 5110.74, Application and Permit
for an Alcohol Fuel Producer Under 26
U.S.C. 5181, with the appropriate TTB
officer.
(b) Application information. The
applicant for a medium plant permit
must include the following information
with the application:
(1) Name and mailing address of the
applicant, and the location of the plant
if not the same as the mailing address;
(2) A diagram of the plant premises;
(3) A statement regarding ownership
of the premises. If the premises are not
owned by the applicant, the owner’s
consent for access by TTB officers must
be furnished;
(4) A description of the stills on the
premises and a statement of the
maximum capacity of each;
(5) A description of the materials from
which spirits will be produced;
(6) A description of the security
measures to be used to protect the
premises, buildings, and equipment
where spirits are produced, processed,
and stored;
(7) A statement of the maximum total
proof gallons of spirits that will be
produced and received during a
calendar year;
(8) Information identifying the
principal persons involved in the
business. This identifying information
must include each person’s name,

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address, title, social security number,
date of birth, and place of birth;
(9) A statement indicating whether or
not the applicant or any other principal
person involved in the business has
been convicted of a felony or
misdemeanor under Federal or State
law. The statement may exclude
convictions for misdemeanor traffic
violations; and
(10) A statement of the amount and
source of funds invested in the business.
(c) Bond. The applicant for a medium
plant permit must provide a bond in
accordance with § 19.699 with a
sufficient penal sum as prescribed in
§ 19.700. The applicant must submit the
bond on form TTB F 5110.56, Distilled
Spirits Bond, and the appropriate TTB
officer must approve the bond before
issuance of the permit.
(d) Information already on file. If any
of the information required by this
section is already on file with TTB and
the information is accurate and
complete, the applicant may advise the
appropriate TTB officer that the
information on file is incorporated by
reference and made part of the
application.
(e) Additional information. When
required by the appropriate TTB officer,
the applicant must furnish, as part of
the application for a permit under this
section, any additional information
required by TTB to determine whether
the application should be approved.
(f) Approval of permit. The applicant
may not commence operations before
approval of the application and issuance
of the medium plant permit.
(26 U.S.C. 5181)
§ 19.676

Large plant permit applications.

(a) General. Any person wishing to
establish a large plant must file form
TTB F 5110.74, Application and Permit
for an Alcohol Fuel Producer Under 26
U.S.C. 5181, with the appropriate TTB
officer.
(b) Application information. The
applicant for a large plant permit must
include the following information with
the application:
(1) Name and mailing address of the
applicant, and the location of the plant
if not the same as the mailing address;
(2) A diagram of the plant premises;
(3) A statement regarding ownership
of the premises. If the premises are not
owned by the applicant, the owner’s
consent for access by TTB officers must
be furnished;
(4) A description of the stills on the
premises and a statement of the
maximum capacity of each;
(5) A description of the materials from
which spirits will be produced;

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(6) A description of the security
measures to be used to protect the
premises, buildings, and equipment
where spirits are produced, processed,
and stored;
(7) A statement of the maximum total
proof gallons of spirits that will be
produced and received during a
calendar year;
(8) Information identifying the
principal persons involved in the
business. This identifying information
must include each person’s name,
address, title, social security number,
date of birth, and place of birth;
(9) A statement indicating whether or
not the applicant or any of the principal
persons involved in the business has
been convicted of a felony or
misdemeanor under Federal or State
law. The statement may exclude
convictions for misdemeanor traffic
violations;
(10) A statement of the amount and
source of funds invested in the business;
and
(11) A statement identifying the type
of business organization and the persons
having an ownership interest in the
business. The applicant must support
this statement by providing the
information specified in § 19.677.
(c) Bond. The applicant for a large
plant permit must provide a bond in
accordance with § 19.699 with a
sufficient penal sum as prescribed in
§ 19.700. The applicant must submit the
bond on form TTB F 5110.56, Distilled
Spirits Bond, and the appropriate TTB
officer must approve the bond before
issuance of the permit.
(d) Power of attorney. The applicant
for a large plant permit, or the
proprietor of the plant if different from
the applicant, must execute and file
with the appropriate TTB officer form
TTB F 5000.8, Power of Attorney, for
each person authorized to sign or act on
behalf of the proprietor unless that
authority has been furnished elsewhere
in the application.
(e) Information already on file. If any
of the information required by this
section is already on file with TTB and
the information is accurate and
complete, the applicant may advise the
appropriate TTB officer that the
information on file is incorporated by
reference and made part of the
application.
(f) Additional information. When
required by the appropriate TTB officer,
the applicant must furnish as part of the
application for a permit under this
section, any additional information
required by TTB to determine whether
the application should be approved.
(g) Approval of permit. The applicant
may not commence operations before

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approval of the application and issuance
of the large plant permit.
(26 U.S.C. 5181)
§ 19.677 Large plant applications—
organizational documents.

In addition to the information
required by § 19.676, any person who
wants to establish a large plant must
provide with the application the
documents and other information
specified in paragraphs (a) through (d)
of this section, as applicable, and must
make those and related documents
available for inspection by TTB as
provided in paragraph (e) of this
section.
(a) Corporate documents. If the
applicant is a corporation, the applicant
must provide the following:
(1) The corporate charter or a
certificate of corporate existence or
incorporation;
(2) A list of officers and directors with
their names and addresses, other than
officers and directors who will have no
responsibilities in connection with the
operation of the alcohol fuel plant;
(3) Certified minutes or extracts of
board of directors meetings, showing
those individuals authorized to sign for
the corporation;
(4) A statement showing the number
of shares of each class of stock or other
basis of ownership, authorized and
outstanding, and the voting rights of the
respective owners or holders; and
(5) A list of the offices or positions,
the incumbents of which are authorized
by the articles of incorporation or the
board of directors to act on behalf of the
proprietor or to sign the proprietor’s
name.
(b) Partnership documents. If the
applicant is a partnership, the applicant
must provide a copy of the articles of
partnership or association, or certificate
of partnership or association if required
to be filed by any State, county, or
municipality.
(c) Limited liability company/limited
liability partnership documents. If the
applicant is a limited liability company
or limited liability partnership or other
entity recognized by law as a person, the
applicant must provide a copy of the
articles of organization, the operating
agreement and the names and addresses
of all members and managers.
(d) Statement of interest. (1) The
application must include the names and
addresses of the 10 persons that have
the largest stock ownership, by stock
class, or other interest in the
corporation, limited liability company/
limited liability partnership, or other
legal entity, and the nature and amount
of the stock or other interest of each,
whether the interest is recorded in the

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name of the interested party or in the
name of another for the interested party.
If a corporation is wholly owned or
controlled by another corporation, the
appropriate TTB officer may request
that the applicant furnish the same
information for persons of the parent
corporation.
(2) In the case of an individual owner
or a partnership, the application must
include the name and address of each
person interested in the large plant,
whether the interest is recorded in the
name of the interested party or in the
name of another for the interested party.
(e) Availability of documents. An
applicant must make available to any
appropriate TTB officer upon request all
originals of documents submitted under
this section and any additional related
organizational documents such as
articles of incorporation, bylaws,
operating agreements and State
certifications.
(26 U.S.C. 5181, 5271)
§ 19.678

Criteria for issuance of permit.

As a general rule, the appropriate TTB
officer will issue an alcohol fuel plant
permit to any person who completes the
required application for a permit and,
when required, furnishes a bond.
However, the appropriate TTB officer
may begin proceedings to deny an
application for a permit, in accordance
with part 71 of this chapter, if the
appropriate TTB officer determines
that—
(a) The applicant (including, in the
case of a corporation, any officer,
director, or principal stockholder, and,
in the case of a partnership, a partner)
is, by reason of business experience,
financial standing, or trade connections,
not likely to maintain operations in
compliance with 26 U.S.C. chapter 51,
or the regulations issued thereunder;
(b) The applicant failed to disclose
any material information required with
the application, or has made any false
statement as to any material fact in
connection with the application; or
(c) The premises where the applicant
proposes to conduct the operations are
not adequate to protect the revenue.
(26 U.S.C. 5181, 5271)
§ 19.679

Duration of permit.

The proprietor of an alcohol fuel plant
may conduct the operations authorized
by the permit on a continuing basis
unless:
(a) The proprietor voluntarily
surrenders the permit;
(b) TTB suspends or revokes the
permit pursuant to § 19.697; or
(c) The permit is automatically
terminated under its own terms or in
accordance with § 19.684.

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(26 U.S.C. 5181)

(26 U.S.C. 5271, 5181)

§ 19.680

§ 19.684

Registration of stills.

The description of stills provided
with the application for an alcohol fuel
plant permit under this subpart will
fulfill the requirement to register a still
under § 29.55 of this chapter.
(26 U.S.C. 5179, 5181)

Changes to Permit Information

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§ 19.683 Changes affecting permit
applications.

(a) General. If there is a change
relating to any of the information
contained in, or considered a part of, the
application on form TTB F 5110.74,
Application and Permit for an Alcohol
Fuel Producer Under 26 U.S.C. 5181,
the proprietor must amend the
information previously submitted
within 30 days of the change unless
another time period is specified in this
subpart.
(b) Amended TTB F 5110.74. Except
when a letterhead application or
letterhead notice procedure is followed
under this subpart, the proprietor must
submit an amended application to the
appropriate TTB officer on TTB F
5110.74 within 30 days of a change
referred to in paragraph (a) of this
section if the change affects the terms
and conditions of the permit.
(c) Letterhead applications. For the
changes specified in §§ 19.685(c),
19.686, and 19.690 of this subpart, the
proprietor may submit a letterhead
application to the appropriate TTB
officer for a change instead of filing an
amended TTB F 5110.74. A letterhead
application must be on letterhead
signed by an authorized representative
of the permit holder. The letterhead
application must identify the alcohol
fuel plant to which the application
applies. The letterhead application
change is subject to TTB approval. The
appropriate TTB officer may, at any
time, require that the proprietor submit
an amended application on TTB F
5110.74 if administrative difficulties
occur as a result of the letterhead
application.
(d) Letterhead Notices. For the
changes specified in §§ 19.687, 19.695,
and 19.691 of this subpart only a
letterhead notice to the appropriate TTB
officer is required. A letterhead notice
must be on letterhead signed by an
authorized representative of the permit
holder. A letterhead notice does not
require approval action by TTB. The
appropriate TTB officer may, at any
time, require that the proprietor submit
an amended application on TTB F
5110.74 if administrative difficulties
occur as a result of the letterhead notice.

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Automatic termination of permits.

(a) Permits not transferable. An
alcohol fuel plant permit is not
transferable and, except as otherwise
provided in paragraph (b) of this
section, will automatically terminate if:
(1) The operations that are authorized
by the permit are leased, sold, or
transferred to another person; or
(2) The permit holder is dissolved on
a date certain or upon an event specified
by the laws of the State where the
permit holder operates.
(b) Corporations. In the case of a
corporation holding a permit under this
subpart, if actual or legal control of that
corporation changes, directly or
indirectly, whether by reason of change
in stock ownership or control (in the
permittee corporation or in any other
corporation), by operation of law, or in
any other manner, the permit may
remain in effect until the expiration of
30 days after the change, whereupon the
permit will automatically terminate.
However, if operations are to be
continued after the change in control,
and an application for a new permit is
filed within 30 days of the change, the
outstanding permit may remain in effect
until final action is taken on the new
application. When final action is taken
on the application, the outstanding
permit will automatically terminate.
(26 U.S.C. 5181, 5271)
§ 19.685
plant.

Change in type of alcohol fuel

(a) Small plants. If the proprietor of a
small plant intends to increase
production (including receipts) to more
than 10,000 proof gallons of spirits per
calendar year, the proprietor must first
obtain an amended permit by filing an
application for a medium plant or a
large plant, as appropriate, under
§§ 19.675 or 19.676. If any of the
required information is already on file
with TTB, that information may be
incorporated by reference in the new
application. The proprietor must also
provide a new or strengthening bond in
accordance with §§ 19.699 and 19.700.
(b) Medium plants. If the proprietor of
a medium plant intends to increase
production (including receipts) to more
than 500,000 proof gallons of spirits per
calendar year, the proprietor must first
obtain an amended permit by filing an
application for a large plant under
§ 19.676. If any of the required
information is already on file with TTB,
that information may be incorporated by
reference in the new application. If the
penal sum of the proprietor’s current
bond is below the amount specified for
the new production level, the proprietor

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must obtain a new or strengthening
bond in accordance with § 19.700.
(c) Curtailment of activities. A
proprietor of a medium or large plant
who curtails operations to a level
whereby the proprietor is eligible to
requalify as a small or medium plant
may so qualify by submitting a
letterhead application to the appropriate
TTB officer for approval. If the
appropriate TTB officer approves the
application, the proprietor
automatically will be relieved of those
regulatory requirements that apply only
to the superseded qualification. In
addition, in the case of a change to
small plant status, the proprietor may be
allowed to terminate the bond in
accordance with the procedure set forth
in § 19.170 of this part.
(26 U.S.C. 5181, 5271)
§ 19.686

Change in name of proprietor.

When there is a change in the name
of the individual, firm, corporation, or
other entity holding the permit, the
proprietor must file an application to
amend the permit on form TTB F
5110.74, Application and Permit for an
Alcohol Fuel Producer Under 26 U.S.C.
5181, or file a letterhead application to
amend the permit within 30 days of the
change. The proprietor is not required to
file a new bond or consent of surety in
this case.
(26 U.S.C. 5172, 5271, 5181)
§ 19.687 Changes in officers, directors,
members, managers, or principal persons.

If there is a change in the list of
officers, directors, members, managers,
or other principal persons furnished
under the provisions of § 19.675,
§ 19.676, or § 19.677, the proprietor
must submit a letterhead notice to the
appropriate TTB officer within 30 days
of the change. The letterhead notice
must identify each change and must
include the following identifying
information for each new officer,
director, member, manager, or other
principal person: name, address, title,
social security number, date of birth,
and place of birth.
(26 U.S.C. 5181)
§ 19.688

Change in proprietorship.

(a) General. If there is a change in
proprietorship at an alcohol fuel plant,
the following requirements apply to the
outgoing proprietor and to the new,
incoming proprietor:
(1) The outgoing proprietor must
comply with the notice requirements of
§ 19.695; and
(2) The incoming successor
proprietors must—
(i) File and obtain a permit on form
TTB F 5110.74, Application and Permit

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for an Alcohol Fuel Producer Under 26
U.S.C. 5181; and
(ii) File the required bond, if any.
(b) Fiduciary responsibilities. A
successor to the proprietorship of an
alcohol fuel plant who is an
administrator, executor, receiver,
trustee, assignee, or other fiduciary must
comply with paragraph (a)(2) of this
section. In addition, the following rules
apply to a successor who is a fiduciary:
(1) The successor may furnish a
consent of surety to extend the terms of
the outgoing proprietor’s bond instead
of filing a new bond;
(2) The successor may incorporate by
reference in the application on TTB F
5110.74 any information that is still
valid and that was contained in the
application filed by the outgoing
proprietor;
(3) The successor must furnish a
certified copy of the order of the court
or other pertinent document appointing
the successor as a fiduciary; and
(4) The effective dates of the
qualifying documents filed will be the
date of the court order, the date
specified in the court order for assuming
control or the date control is assumed if
the fiduciary was not appointed by a
court.
(26 U.S.C. 5172, 5181)

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§ 19.689

Continuing partnerships.

(a) If there is a death or insolvency of
a partner in the business that holds a
permit under this subpart, the surviving
partner or partners may continue to
operate under the permit if:
(1) The partnership is not
immediately terminated under the laws
of the particular State but continues
until the winding up of the partnership
affairs is complete;
(2) The surviving partner or partners
have the exclusive right to control and
possession of the partnership assets for
purpose of liquidation and settlement;
and
(3) In the case of a plant required to
file a bond, a consent of surety is filed
under which the surety and the
surviving partner or partners agree to
remain liable on the bond.
(b) If the surviving partner or partners
acquire the business upon settlement of
the partnership, the surviving partner or
partners must file an application in their
own name and receive a permit in
accordance with § 19.688(a).
(26 U.S.C. 5172, 5181)
§ 19.690

Change in location.

If there is a change in the location of
the alcohol fuel plant or of the area
included within the plant premises, the
proprietor must:

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(a) File an application to amend the
permit on form TTB F 5110.74,
Application and Permit for an Alcohol
Fuel Producer Under 26 U.S.C. 5181, or
a letterhead application to amend the
permit;
(b) File a new bond on form TTB F
5110.56 or a consent of surety on form
TTB F 5000.18 if a bond is required; and
(c) Not begin operations at the new
location prior to approval of the
amended application and issuance of
the amended permit.
(26 U.S.C. 5172, 5181)
§ 19.691 Change in address without
change in location or area.

If there is a change in the address of
an alcohol fuel plant that does not
involve a change in the location or area
of the plant itself, the proprietor must
submit a letterhead notice to the
appropriate TTB officer within 30 days
of the change.
(26 U.S.C. 5172, 5181)

Alternating Proprietorship
§ 19.692 Qualifying for alternating
proprietorship.

(a) General. A proprietor may
alternate use of an alcohol fuel plant or
part of an alcohol fuel plant with one or
more proprietors qualified under this
subpart. In order to do so, each
proprietor must file and receive
approval of the applications and bonds
required by this subpart. Each
proprietor must also conduct operations
and keep records in accordance with
this subpart. Where operations by
alternating proprietors will be limited to
part of an alcohol fuel plant, that part
must be suitable for qualification as a
separate alcohol fuel plant.
(b) Qualifying documents. Each
person desiring to operate an alcohol
fuel plant as an alternating proprietor
must file the following with the
appropriate TTB officer:
(1) An application on form TTB F
5110.74, Application and Permit for an
Alcohol Fuel Producer Under 26 U.S.C.
5181, to cover the proposed alternation;
(2) A diagram of the premises, in
duplicate, showing the arrangement for
the alternation of the premises. Where
operations by alternating proprietors are
limited to parts of an alcohol fuel plant,
a diagram designating the parts that are
to be alternated must be submitted. A
diagram must be submitted for each
arrangement under which the premises
will be operated. The diagram must be
in sufficient detail to establish the
boundaries of the alcohol fuel plant or
any part of it that will be involved in the
alternation;

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9163

(3) Evidence of an existing operations
bond (if any), consent of surety, or new
operations bond to cover the proposed
alternation of premises; and
(4) Any additional information
required by the appropriate TTB officer.
(26 U.S.C. 5171, 5181, 5271)
§ 19.693 Operating requirements for
alternating proprietorships.

(a) Alternation journal. Once the
applications submitted under § 19.692
have been approved by the appropriate
TTB officer, the alcohol fuel plant, or
parts of the alcohol fuel plant, may be
alternated. The outgoing and incoming
proprietor must make entries in an
alternation journal when the alcohol
fuel plant, or parts of it, are alternated.
The outgoing and incoming proprietor
must enter the following information in
the alternation journal:
(1) Name or trade name of the
proprietor;
(2) Alcohol fuel plant permit number;
(3) Date and time of alternation;
(4) Quantity of spirits transferred in
proof gallons.
(b) Commencement of operations.
Except for spirits transferred to the
incoming proprietor, the outgoing
proprietor must remove all spirits from
areas, rooms, or buildings to be
alternated, prior to the effective date
and time shown in the alternation
journal. Fuel alcohol may be transferred
to the incoming proprietor or may be
retained by the outgoing proprietor in
areas, rooms, or buildings to be
alternated when the areas, rooms, or
buildings are secured with locks, the
keys to which are in the custody of the
outgoing proprietor. Whenever
operation of the areas, rooms, or
buildings is to be resumed by a
proprietor following suspension of
operations by an alternating proprietor,
the outgoing proprietor (except the
proprietor of a small plant not required
to file a bond) must furnish a consent
of surety on form TTB F 5000.18 to
continue in effect the operations bond
covering his operations. The proprietor
must do this prior to alternating the
premises.
(c) Records. Each alternating
proprietor must maintain separate
records and submit separate reports in
accordance with § 19.720. Entries in
each proprietor’s records must be in
accordance with §§ 19.714 through
19.718 of this subpart. The following
requirements also apply:
(1) Each alternating proprietor must
show all transfers of spirits in the
records;
(2) The outgoing proprietor must
show in its production and disposition
records the quantity of spirits and fuel

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alcohol transferred to the incoming
proprietor;
(3) The incoming proprietor must
show in his receipt record the quantity
of spirits received by transfer;
(4) Each proprietor must include
spirits transferred in the determinations
of alcohol fuel plant size and bond
amounts; and
(5) The provisions of § 19.685
regarding change of alcohol fuel plant
type apply to each proprietor.
(26 U.S.C. 5171, 5181, 5271)

Discontinuance of Business and Permit
Suspension or Revocation
§ 19.695 Notice of permanent
discontinuance.

When a proprietor permanently
discontinues operations as an alcohol
fuel plant, the proprietor must file a
letterhead notice with the appropriate
TTB officer along with the following:
(a) The original copy of the alcohol
fuel plant permit and the proprietor’s
request that the permit be cancelled;
(b) A written statement disclosing
whether or not all spirits, including fuel
alcohol, have been lawfully disposed of,
and whether or not there are any spirits
in transit to the premises; and
(c) A report on form TTB 5110.75,
Alcohol Fuel Plant Report, covering the
discontinued operations, with the report
marked ‘‘Final Report’’.
(26 U.S.C. 5181, 5271)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.697

Permit suspension or revocation.

TTB will conduct proceedings to
revoke or suspend an alcohol fuel plant
permit in accordance with the
procedures set forth in part 71 of this
chapter if the appropriate TTB officer
has a reason to believe that a person
holding a permit:
(a) Has not complied in good faith
with the provisions of 26 U.S.C. chapter
51 or the regulations issued thereunder;
(b) Has violated the conditions of the
permit;
(c) Has made a false statement as to
any material fact in the application for
the permit;
(d) Has failed to disclose any material
information required to be furnished
under this part;
(e) Has violated or conspired to
violate any law of the United States
relating to intoxicating liquor;
(f) Has been convicted of any offense
under title 26 U.S.C. punishable as a
felony or of any conspiracy to commit
such offense; or
(g) Has not engaged in any of the
operations authorized by the permit for
a period of more than 2 years.
(26 U.S.C. 5271)

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(26 U.S.C. 5173, 5181; 31 U.S.C. 9301, 9303,
9304, 9306)

Bonds
§ 19.699

General bond requirements.

(a) Operations bond. Any person who
plans to establish a large plant, a
medium plant, or a small plant without
production operations must provide an
operations bond on form TTB F 5110.56,
Distilled Spirits Bond, in duplicate,
with the original permit application. If
a proprietor fails to fails to pay any
liability covered by the bond, TTB may
seek payment from the proprietor, from
the surety on the bond, or from both the
proprietor and the surety. Additional
provisions applicable to bonds for
alcohol fuel plants are found in subpart
F of this part in §§ 19.155 through
19.157 and §§ 19.167 through 19.173.
(b) Corporate surety. A company that
issues bonds is called a ‘‘corporate
surety.’’ Proprietors must obtain the
surety bonds required by this subpart
from a corporate surety approved by the
Secretary of the Treasury. The
Department of the Treasury publishes a
list of approved corporate sureties in
Treasury Department Circular No. 570,
‘‘Companies Holding Certificates of
Authority as Acceptable Sureties on
Federal Bonds and as Acceptable
Reinsuring Companies.’’ Circular No.
570 is published annually in the
Federal Register. The most current
edition of the circular is posted at the
Web site of the Financial Management
Service, Department of the Treasury, at
http://www.fms.treas.gov/c570. Printed
copies of Circular No. 570 are available
for purchase from the Government
Printing Office.
(c) Alternative to a corporate surety.
A proprietor may also guarantee
payment under a bond without using a
corporate surety, by filing a bond that
guarantees payment of the liability by
pledging and depositing one or more
acceptable negotiable securities having a
par value (face amount) equal to or
greater than the penal sums of the
required bonds. Should the proprietor
fail to pay one or more of the guaranteed
liabilities, TTB may take action to sell
the deposited securities to satisfy the
debt. Pledged securities will be released
to the proprietor if there are no
outstanding liabilities when the bond is
terminated; the provisions of § 19.173
apply to the release of pledged
securities under this subpart. A list of
securities acceptable as collateral in lieu
of surety bonds is available from the
Bureau of the Public Debt, Office of the
Commissioner, Government Securities
Regulations Staff. Current information
and guidance from the Bureau of the
Public Debt Web site may be found at
http://www.publicdebt.treas.gov.

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§ 19.700

Amount of bond.

A proprietor must determine the
penal sum of the bond based on the total
quantity of distilled spirits that will be
produced and received during a
calendar year. The method for
computing required bond amounts is as
follows:
(a) Small plants without production
operations. A proprietor that operates a
small plant that receives not more than
10,000 proof gallons of spirits per year
and does not conduct bona fide
production operations must provide a
bond with a penal sum of $1,000.
(b) Medium plants. A proprietor that
operates a medium plant that produces
and receives more than 10,000 but not
more than 20,000 proof gallons of spirits
per year must provide a bond with a
penal sum of at least $2,000.00. The
proprietor must increase the penal sum
of the bond by $1,000 for each
additional 10,000 gallons, or fraction of
10,000 gallons, (over 20,000 gallons)
that will be produced or received. The
maximum bond for a medium plant is
$50,000.00, representing the penal sum
applicable to 500,000 proof gallons. The
following table provides examples of
required minimum bond amounts:

ANNUAL PRODUCTION AND RECEIPTS
IN PROOF GALLONS
More than

But not
over

Amount of
bond

10,000
20,000
90,000
190,000
490,000

20,000
30,000
100,000
200,000
500,000

$2,000
3,000
10,000
20,000
50,000

(c) Large Plants. A proprietor that
operates a large plant that produces and
receives more than 500,000 but not
more than 510,000 proof gallons of
spirits per year must provide a bond
with a penal sum of at least $52,000.00.
The proprietor must increase the penal
sum of the bond by $2,000 for each
additional 10,000 gallons, or fraction of
10,000 gallons (over 510,000 gallons)
that will be produced and received. The
maximum bond for a large plant is
$200,000.00. The following table
provides examples of required
minimum bond amounts:

ANNUAL PRODUCTION AND RECEIPTS
IN PROOF GALLONS
More than

But not
over

Amount of
bond

500,000

510,000

$52,000

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ANNUAL PRODUCTION AND RECEIPTS
IN PROOF GALLONS—Continued
More than

But not
over

Amount of
bond

510,000
740,000
990,000
1,240,000

520,000
750,000
1,000,000
—

54,000
100,000
150,000
200,000

(d) New or strengthening bonds. A
proprietor must obtain a new bond or a
strengthening bond in accordance with
§ 19.167 if the level of production and
receipts at the alcohol fuel plant
increases so that the current bond no
longer is in the amount of at least the
required minimum penal sum.
(26 U.S.C. 5173, 5181)

Requirements for Construction,
Equipment, and Security
§ 19.703

Construction and equipment.

A proprietor must construct and
arrange the buildings and enclosures
where distilled spirits will be produced,
processed, or stored so as to ensure
adequate security and deter the
diversion of spirits. Distilling
equipment must be constructed to
prevent unauthorized removal of spirits,
from the point where distilled spirits
come into existence until production is
complete and the quantity of spirits has
been determined. A proprietor also must
equip tanks and other vessels so that
they may be locked and must provide a
method for determining the quantity of
spirits in each vessel.
(26 U.S.C. 5178)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.704

Security.

(a) General. The proprietor of an
alcohol fuel plant must provide
adequate security measures at the
alcohol fuel plant in order to protect
against the unauthorized removal of
spirits.
(b) Storage. The proprietor must store
spirits in a building or a storage tank, or
within an enclosure, that will be kept
locked when operations are not being
conducted.
(c) Additional security. The
appropriate TTB officer may require
additional security measures for the
premises if the alcohol fuel plant’s
security is found to be inadequate. The
additional measures required may
depend upon past security problems
experienced at the alcohol fuel plant,
the volume of alcohol produced, the risk
to tax revenue, and any safety
requirements. Additional security
measures may include, but are not
limited to:
(1) A fence around the alcohol fuel
plant;

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(2) Flood lights;
(3) A security or alarm system;
(4) A guard service; or
(5) Locked or barred windows.
(26 U.S.C. 5178, 5202)

TTB Rights and Authorities
§ 19.706

Supervision of operations.

TTB may assign appropriate TTB
officers to supervise operations at an
alcohol fuel plant at any time.
Appropriate TTB officers may exercise
certain rights and authorities at an
alcohol fuel plant. Those rights and
authorities are set forth in the following
provisions of this part: § 19.11 (right of
entry and examination, § 19.12
(furnishing facilities and assistance),
§ 19.13 (assignment of officers and
supervision of operations), § 19.17
(detention of containers), § 19.18
(samples for the United States), and
§ 19.282 (general requirements for
gauging and measuring equipment).
(26 U.S.C. 5201, 5202, 5203, 5204, 5207,
5213, 5555)

Accounting for Spirits

(c) When gauges are required. A
proprietor must gauge spirits and record
the results in the records required by
§ 19.718, at the following times:
(1) Upon completing the production
of distilled spirits;
(2) On the receipt of spirits at the
plant;
(3) Prior to the addition of materials
to render the spirits unfit for beverage
use;
(4) Before withdrawal from plant
premises or other disposition of spirits
(including fuel alcohol); and
(5) When spirits are inventoried.
(26 U.S.C. 5201, 5204)
§ 19.710

Gauging.

(a) Gauging equipment and methods.
A proprietor of an alcohol fuel plant
must perform periodic gauges of the
distilled spirits and fuel alcohol at the
alcohol fuel plant. The procedures for
the gauging of spirits set forth in part 30
of this chapter also apply under this
subpart. In addition, the following rules
for the gauging of distilled spirits and
fuel alcohol under this subpart also
apply:
(1) The proprietor must determine the
proof of spirits by using a glass cylinder,
hydrometer and thermometer;
(2) The proprietor must ensure that
hydrometers, thermometers, and other
equipment used to determine proof,
volume, or weight are accurate;
(3) The proprietor may determine the
quantity of spirits or fuel alcohol either
by volume or weight;
(4) To determine quantity by volume,
the proprietor may use a tank or
receptacle with a calibrated sight glass
installed, a calibrated dipstick,
conversion charts, an accurate mass
flow meter, or other devices approved
by the appropriate TTB officer;
(5) Unless the proprietor chooses to
do so, the proprietor is not required to
determine the proof of fuel alcohol
manufactured, on hand, or removed;
and
(6) The proprietor may account for
fuel alcohol in wine gallons;
(b) Verification by TTB. TTB officers
may at any time verify the accuracy of
the gauging equipment used.

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Inventory of spirits.

A proprietor of an alcohol fuel plant
must take a physical inventory of all
spirits and fuel alcohol on the bonded
premises at the end of each calendar
year. The proprietor must record the
results of this physical inventory in the
records required by § 19.718.
(26 U.S.C. 5201)

Recordkeeping
§ 19.714

§ 19.709

9165

General requirements for records.

A proprietor of an alcohol fuel plant
must maintain records that accurately
reflect the operations and transactions at
the alcohol fuel plant. The records must
contain sufficient information to allow
appropriate TTB officers to determine
the quantities of spirits produced,
received, stored, or processed and to
verify that all spirits have been used or
otherwise lawfully disposed of.
(26 U.S.C. 5207)
§ 19.715

Format of records.

(a) Proprietors of alcohol fuel plants
are not required under this subpart to
keep their records in any particular
format or media. A proprietor may keep
required records on paper, microfilm or
microfiche, diskette, or other electronic
medium. However, the records that a
proprietor maintains must be readily
retrievable in, or convertible to,
hardcopy format for review by TTB
officers as necessary.
(b) Required records may consist of
commercial documents maintained in
the ordinary course of business, rather
than records prepared expressly to meet
the requirements of this subpart, if those
documents:
(1) Contain all of the information
required by this subpart;
(2) Reflect general standards of clarity
and accuracy; and
(3) Can be readily understood by TTB
personnel.
(c) Where the format or arrangement
of a record is such that the information
is not readily understandable, the

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appropriate TTB officer may require the
proprietor to present the information in
a format or arrangement that will
facilitate the review of the information.
§ 19.716 Maintenance and retention of
records.

(a) A proprietor of an alcohol fuel
plant may keep the records required by
this subpart at the alcohol fuel plant
where operations or transactions occur,
or at a central recordkeeping location
maintained by the proprietor. If the
proprietor keeps the required records at
any location other than the alcohol fuel
plant where operations or transactions
occur, the proprietor must submit a
letterhead notice to the appropriate TTB
officer indicating the location where the
records are kept. The proprietor must
make those records available at the
alcohol fuel plant premises to which
they relate during normal business
hours for the purpose of a TTB audit or
inspection. The proprietor must
produce those records at that location
within two days of notice by the
appropriate TTB officer.
(b) A proprietor of an alcohol fuel
plant must maintain any records
required by this subpart for a period of
not less than three years from the date
of creation of the record or the date of
the last entry required to be made in the
record, whichever is later.
(c) A proprietor of an alcohol fuel
plant may be required to reproduce
records in order to maintain their
readability and availability for
inspection. Whenever any record might
become unreadable or otherwise
unsuitable for its intended or continued
use, the proprietor is responsible for
reproducing the record by a process that
accurately and legibly reproduces the
original record.
(d) For records kept on electronic
media, the provisions of § 19.574 apply.
(26 U.S.C. 5207)

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.717 Time for making entries in
records.

A proprietor of an alcohol fuel plant
must record entries required by this
subpart in the proprietor’s records on a
daily basis, as the transaction or
operation occurs, but not later than the
close of the next business day after the
occurrence of the transaction or
operation. However, if a proprietor
prepares supplemental or auxiliary
records when an operation or
transaction occurs and those records
contain all of the information required
under this subpart, the proprietor may
make entries in the required records not
later than the close of business on the
third business day following the day on

18:04 Feb 15, 2011

(26 U.S.C. 5207)
§ 19.718

(26 U.S.C. 5207)

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which the transaction or operation
occurred.

Jkt 223001

(26 U.S.C. 5181, 5207)

Required records.

A proprietor of an alcohol fuel plant
must maintain records that accurately
reflect the operations and transactions
occurring at the plant. These records
must include production, receipt,
manufacture, and disposition records.
(a) Production, receipt, and
manufacture records. The proprietor
must maintain records of all production,
receipts, and manufacture at the alcohol
fuel plant. This includes records of:
(1) The quantity and proof of spirits
produced;
(2) The kind and quantity of materials
used to produce spirits, if the proprietor
is a medium plant or large plant;
(3) The proof gallons of spirits on
hand;
(4) The proof gallons of spirits
received. The proprietor may use a copy
of the consignor’s invoice or other
document received with the shipment if
the proprietor records the date of receipt
and quantity received;
(5) The quantities and types of
materials added to each lot of spirits to
render the spirits unfit for beverage use;
and
(6) The quantity of fuel alcohol
manufactured. Fuel alcohol may be
recorded in wine gallons.
(b) Disposition records. The proprietor
must maintain records of all
dispositions of spirits and fuel alcohol
removed from the alcohol fuel plant.
Records for dispositions of fuel alcohol
and spirits must be maintained
separately. Required records include:
(1) The amount of fuel alcohol
removed. The commercial record or
other document required by § 19.729
will constitute the required record;
(2) The amount of spirits transferred.
For all spirits transferred to another
qualified distilled spirits plant or
alcohol fuel plant the proprietor must
maintain the commercial invoice or
other documentation required by
§§ 19.405 and 19.734;
(3) Record of other dispositions. If the
proprietor has other dispositions of
spirits or fuel alcohol such as losses,
destruction, or redistillation, the
proprietor must keep a record of those
dispositions. The record must include
the quantity of spirits (in proof gallons)
or fuel alcohol (in wine gallons), the
date of disposition, and the purpose for
which used or the nature of any other
disposition;
(4) Testing records. If the proprietor
conducts testing and analysis of samples
of spirits or fuel alcohol in accordance
with § 19.749, the proprietor must keep

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a record of the date of the testing and
the amount of spirits (in proof gallons)
or fuel alcohol (in wine gallons) tested.
§ 19.719 Spirits made unfit for beverage
use in the production process.

If an alcohol fuel plant makes spirits
unfit for beverage use before the spirits
are removed from the production
process, for example by the in-line
addition of materials or by the addition
of materials to receptacles where spirits
are first deposited, the proprietor must
determine the quantity and proof of the
spirits produced for purposes of the
production records by:
(a) Determining the proof of each lot
of spirits by procuring a representative
sample of each lot, prior to the addition
of any materials for rendering the spirits
unfit for beverage use, and then proofing
the spirits; and
(b) Determining the quantity (proof
gallons) of spirits produced by
subtracting the quantity of materials
added to render the spirits unfit for
beverage use from the quantity of fuel
alcohol (in gallons) produced and
multiplying the resulting figure by the
proof of the spirits divided by 100.
(26 U.S.C. 5181, 5207)

Reports
§ 19.720

Reports.

Each proprietor of an alcohol fuel
plant must submit to the appropriate
TTB officer an annual report of
operations on form TTB F 5110.75,
Alcohol Fuel Plant Report, for each
calendar year. The proprietor must
submit this report by January 30
following the end of the calendar year.
(26 U.S.C. 5207)

Redistillation
§ 19.722 General rules for redistillation of
spirits or fuel alcohol.

The proprietor of an alcohol fuel plant
may receive and redistill spirits. The
proprietor may also receive fuel alcohol
for redistillation and recovery of the
spirits contained in the fuel alcohol.
The following general rules apply to
redistillation activities at an alcohol fuel
plant:
(a) The proprietor must separately
identify in the required records any
spirits and fuel alcohol received for
redistillation;
(b) The proprietor must keep all
spirits and fuel alcohol received for
redistillation physically separate from
each other and from other spirits and
fuel alcohol until they are redistilled;
(c) Spirits recovered by redistillation
will be treated the same as spirits that
have not been redistilled; and

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(d) All provisions of this subpart and
26 U.S.C. chapter 51, including
provisions regarding liability for tax
applicable to spirits when originally
produced, apply to spirits recovered by
distillation.
(26 U.S.C. 5181)
§ 19.723 Effect of redistillation on plant
size and bond amount.

The redistillation of spirits at an
alcohol fuel plant may affect the alcohol
fuel plant size category and the resulting
bond penal sum amount. The following
rules apply in this regard:
(a) Spirits originally produced by the
alcohol fuel plant and subsequently
recovered by redistillation are not
includable in the determination of plant
size and bond amount; and
(b) Spirits originally produced
elsewhere and subsequently recovered
by redistillation at the alcohol fuel plant
are includable in the determination of
plant size and bond amount.
(26 U.S.C. 5181)
§ 19.724

Records of redistillation.

(a) Except as otherwise provided in
paragraph (b) of this section, a
proprietor must record in a separate
record the following information for
spirits and fuel alcohol received at the
alcohol fuel plant for redistillation:
(1) Date of receipt;
(2) Identification as spirits or fuel
alcohol;
(3) Quantity received;
(4) From whom received;
(5) Reason for redistillation;
(6) Date redistilled; and
(7) The quantity of spirits recovered
by redistillation.
(b) A proprietor may use a document
required by §§ 19.729 or 19.734 or any
other commercial record covering spirits
or fuel alcohol received in lieu of the
record required by paragraph (a) of this
section, provided that it contains all of
the information required by paragraph
(a) of this section, including any such
information added to it by the
proprietor.
(26 U.S.C. 5181, 5223)

Rules for Use, Withdrawal, and
Transfer of Spirits

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.726 Prohibited uses, transfers, and
withdrawals.

No person may withdraw, use, sell or
otherwise dispose of distilled spirits,
including fuel alcohol, produced under
this subpart for any purpose other than
for fuel use. The law imposes criminal
penalties on any person who withdraws,
uses, sells, or otherwise disposes of
distilled spirits, including fuel alcohol,
produced under this subpart for other
than fuel use.

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18:04 Feb 15, 2011

Jkt 223001

(26 U.S.C. 5181, 5601)
§ 19.727

Use on premises.

A proprietor may use spirits as a fuel
on the premises of the alcohol fuel plant
where they were produced without
having to make them unfit for beverage
use. A proprietor using spirits in this
way must keep the applicable records
concerning such use as provided in
§ 19.718(b)(3).
(26 U.S.C. 5181)
§ 19.728

Before withdrawal of spirits from the
premises of an alcohol fuel plant, the
proprietor must render the spirits unfit
for beverage use as provided in this
subpart. Spirits rendered unfit for
beverage use may be withdrawn free of
tax from the alcohol fuel plant premises
if they will be used exclusively for fuel.
(26 U.S.C. 5181, 5214)
§ 19.729

Withdrawal of fuel alcohol.

(a) For each shipment or other
removal of fuel alcohol from the alcohol
fuel plant premises, the consignor
proprietor must prepare a commercial
invoice, sales slip, or similar document
that shows:
(1) The date of the withdrawal;
(2) The quantity of fuel alcohol
removed;
(3) A description of the shipment that
includes the number and size of
containers, tank trucks, etc.; and
(4) The name and address of the
consignee.
(b) The consignor proprietor must
retain in its records a copy of the
document described in paragraph (a) of
this section.
(26 U.S.C. 5181)

Transfer of Spirits Between Alcohol
Fuel Plants
§ 19.733 Authorized transfers between
alcohol fuel plants.

A proprietor may remove spirits from
the bonded premises of an alcohol fuel
plant, including the premises of a small
plant, for transfer in bond to another
alcohol fuel plant. A proprietor of an
alcohol fuel plant may also receive
spirits from another alcohol fuel plant.
The following conditions apply to such
transfers:
(a) The transfer of spirits must be
pursuant to an approved application on
form TTB F 5100.16, Application for
Transfer of Spirits and/or Denatured
Spirits in Bond in accordance with
§ 19.403;
(b) Bulk conveyances in which spirits
are transferred must be secured with
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accordance with § 19.441;

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(c) It is not necessary to render the
spirits unfit for beverage use prior to the
transfer;
(d) The transferred spirits may not be
withdrawn, used, sold, or disposed of
for other than fuel use; and
(e) Each proprietor must adhere to the
requirements for transfers between
alcohol fuel plants prescribed in
§§ 19.734 through 19.736, as applicable.
(26 U.S.C. 5181, 5212)
§ 19.734

Withdrawal of spirits.

9167

Consignor for in-bond shipments.

A proprietor that ships distilled
spirits in bond to another alcohol fuel
plant is the ‘‘consignor’’ of the shipment.
When shipping spirits in bond, the
consignor must:
(a) Ship the spirits pursuant to an
approved application on form TTB F
5100.16, Application for Transfer of
Spirits and/or Denatured Spirits in
Bond;
(b) Prepare a duplicate commercial
invoice or shipping document for each
shipment of spirits that includes the
following:
(1) The quantity of the spirits
transferred;
(2) The proof of the spirits transferred;
(3) A description of the shipment that
includes the number and size of drums,
barrels, tank trucks, etc.;
(4) The consignor’s name, address,
and permit number and the name,
address, and permit number of the
proprietor of the alcohol fuel plant that
will receive the spirits; and
(5) The serial numbers of seals, locks,
or other devices used to secure the
shipment; and
(c) Forward the original invoice or
shipping document with the shipment
to the proprietor of the receiving alcohol
fuel plant and retain a copy in the
alcohol fuel plant’s records.
(26 U.S.C. 5212)
§ 19.735

Reconsignment while in transit.

A consignor may reconsign an inbond shipment of spirits while the
shipment is in transit or upon arrival at
the premises of the consignee for any
bona fide reason such as when the
spirits transferred in bond are found to
be unsuitable for the intended purpose
or the spirits were shipped in error. The
consignor may reconsign the shipment
to itself or to another consignee that is
qualified to receive the spirits. In either
case, an Application for Transfer of
Spirits and/or Denatured Spirits in
Bond on form TTB F 5100.16 must have
been previously approved for the new
consignee and must be on file at the
alcohol fuel plant. The bond of the new
consignee of the spirits will cover the
spirits while they are in transit after

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reconsignment. When reconsigning a
shipment, the consignor must notify the
original consignee that the transfer has
been cancelled and must make a
notation on the original invoice or
shipping document that the shipment
was reconsigned. The consignor must
also prepare a new invoice or shipping
document for the new consignee and
must mark the new invoice or shipping
document ‘‘reconsignment.’’
(26 U.S.C. 5181, 5212)
§ 19.736

Consignee for in-bond shipments.

(a) General. A proprietor that receives
spirits in bond from another alcohol fuel
plant is the ‘‘consignee’’ of the shipment.
When receiving spirits in bond, the
consignee must:
(1) Examine each conveyance and
notify the appropriate TTB officer
immediately if any of the locks, seals, or
other devices that secure each
conveyance do not arrive at the
premises intact;
(2) Determine the quantity of spirits
received and record the quantity and
date of receipt on the invoice or
shipping document sent with the
shipment; and
(3) Retain the invoice or shipping
document as part of the records required
by § 19.718.
(b) Portable containers. A consignee
who receives spirits in barrels, drums,
or other portable containers that are not
secured by seals or other devices must
verify the contents of each container.
The consignee must record the quantity
received in each container on a list and
must attach the list to the invoice or
shipping document received with the
shipment.
(c) Bulk conveyances or pipelines. A
consignee who receives spirits in bulk
conveyances or by pipeline must gauge
the spirits received and record the
quantity determined on the invoice or
shipping document received with the
shipment. The appropriate TTB officer
may waive the requirement for gauging
spirits received by pipeline if requested
in writing by the consignee and if there
is no jeopardy to the revenue.
(26 U.S.C. 5181, 5204, 5212)

Transfer of Spirits to and From
Distilled Spirits Plants

srobinson on DSKHWCL6B1PROD with RULES2

Except for spirits produced from
petroleum, natural gas, or coal, a
proprietor of an alcohol fuel plant may
receive spirits in bond from a distilled
spirits plant qualified under subpart D
of this part. A proprietor of an alcohol
fuel plant may also transfer spirits in
bond from the alcohol fuel plant to a

18:04 Feb 15, 2011

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(26 U.S.C. 5181, 5212)

Receipt of Spirits From Customs
Custody
§ 19.742 Authorized transfers from
customs custody.

A proprietor of an alcohol fuel plant
may withdraw from customs custody
spirits imported or brought into the
United States in bulk containers and
may transfer those spirits without
payment of tax to the proprietor’s
alcohol fuel plant subject to the
following conditions:
(a) The transfer of the spirits may only
be to an alcohol fuel plant that is
required to file, and has filed, a bond;
(b) The spirits must not have been
produced from petroleum, natural gas,
or coal;
(c) The alcohol fuel plant must further
manufacture or process the spirits after
receipt;
(d) The proprietor of the alcohol fuel
plant may only redistill or denature the
spirits if the imported spirits are 185° or
more of proof and will be withdrawn for
fuel use; and
(e) The proprietor of the alcohol fuel
plant must follow the procedures for
receiving spirits prescribed in § 19.736
and subpart L of part 27 of this chapter.
(26 U.S.C. 5232)

§ 19.739 Authorized transfers to or from
distilled spirits plants.

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distilled spirits plant qualified under
subpart D of this part. The following
conditions apply to such transfers:
(a) Bulk conveyances in which spirits
are transferred must be secured with
locks, seals, or other devices in
accordance with § 19.441;
(b) It is not necessary to render the
spirits unfit for beverage use prior to the
transfer;
(c) The transferred spirits may not be
withdrawn, used, sold, or disposed of
for other than fuel use;
(d) An alcohol fuel plant proprietor
transferring spirits filled into portable
containers to the bonded premises of a
distilled spirits plant must mark the
containers as required by § 19.752(b);
(e) The procedures in §§ 19.403
through 19.406 and § 19.620 apply to
the transfer of spirits from an alcohol
fuel plant to a distilled spirits plant; and
(f) The procedures in §§ 19.403,
19.404, 19.405, and 19.407 apply to the
transfer of spirits from a distilled spirits
plant to an alcohol fuel plant.

Materials for Making Spirits Unfit for
Beverage Use
§ 19.746

Authorized materials.

(a) General. The appropriate TTB
officer determines what materials make
spirits unfit for beverage use but do not
impair the quality of the spirits for fuel
use. Spirits treated with materials

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authorized under this section will be
considered rendered unfit for beverage
use and eligible for withdrawal as fuel
alcohol.
(b) Authorized materials. Subject to
the specifications in paragraph (c) of
this section, proprietors are authorized
to render spirits unfit for beverage use
by adding to each 100 gallons of spirits
any of following materials in the
quantities specified:
(1) Two gallons or more of—
(i) Gasoline or automotive gasoline
(for use in engines that require unleaded
gasoline, the Environmental Protection
Agency and manufacturers
specifications may require that
unleaded gasoline be used to render
spirits unfit for beverage use);
(ii) Natural gasoline;
(iii) Kerosene;
(iv) Deodorized kerosene;
(v) Rubber hydrocarbon solvent;
(vi) Methyl isobutyl ketone;
(vii) Mixed isomers of nitropropane;
(viii) Heptane;
(ix) Ethyl tertiary butyl ether (ETBE);
(x) Raffinate;
(xi) Naphtha; or
(xii) Any combination of the materials
listed in (b)(1)(i) through (xi) of this
section; or
(2) Five gallons or more of Toluene;
or
(3) One-eighth (1⁄8) of an ounce of
denatonium benzoate N.F. and 2 gallons
of isopropyl alcohol.
(c) Specifications. (1) Specifications
for gasoline, unleaded gasoline,
kerosene, deodorized kerosene, rubber
hydrocarbon solvent, methyl isobutyl
ketone, mixed isomers of nitropropane,
heptane, toluene, and isopropyl alcohol
are found in part 21, subpart E, of this
chapter.
(2) Natural gasoline must meet the
following specifications—
(i) Natural gasoline (drip gas) is a
mixture of butane, pentane, and hexane
hydrocarbons extracted from natural
gas; and
(ii) Distillation range: No more than
10 percent of the sample may distill
below 97 degrees Fahrenheit; at least 50
percent shall distill at or below 156
degrees Fahrenheit; and at least 90
percent shall distill at or below 209
degrees Fahrenheit.
(3) Raffinate must meet the following
specifications—
(i) Octane (R+M/2): 66–70;
(ii) Distillation, in degrees Fahrenheit:
10 percent: 120–150 °F; 50 percent:
144–180 °F; 90 percent: 168–200 °F; end
point: 216–285 °F;
(iii) API Gravity: 76–82; and
(iv) Reid Vapor Pressure: 5–11.
(4) Naphtha must meet the following
specifications—

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(i) API Gravity @ 60/60 degrees
Fahrenheit: 64–70 °F;
(ii) Lb/Gal: 5.845–6.025;
(iii) Density: 0.7022–0.7238;
(iv) Reid Vapor Pressure: 8 P.S.I.A.
Max.;
(v) Distillation in degrees Fahrenheit:
I.B.P.: 85 °F Max.; 10 percent: 130 °F
Max.; 50 percent: 250 °F Max.; 90
percent: 340 °F Max.; end point: 380 °F;
(vi) Copper Corrosion: 1; and
(vii) Sabolt Color: 28 Min.
(d) Published list. The appropriate
TTB officer periodically publishes a list
of materials that may be used to make
spirits unfit for beverage use in addition
to those listed in paragraph (b) of this
section. The list can be found at http://
www.ttb.treas.gov. The list will specify
the material name and quantity required
to render spirits unfit for beverage use.
(26 U.S.C. 5181)
§ 19.747

Other materials.

If a proprietor wishes to use a material
to render spirits unfit for beverage use
that is not authorized under § 19.746 or
that is not on the published list of
materials, the proprietor may submit an
application for approval to the
appropriate TTB officer. The application
must include the name of the material
and the quantity of material that the
proprietor proposes to add to each 100
gallons of spirits. The appropriate TTB
officer may require the proprietor to
submit an 8-ounce sample of such
material. The proprietor may not use
any proposed material until the
appropriate TTB officer approves its
use. Any material that impairs the
quality of the spirits for fuel use will not
be approved. The proprietor must retain
as part of the records available for
inspection by appropriate TTB officers
any application approved by the
appropriate TTB officer under this
section.
(26 U.S.C. 5181)

Rules for Taking Samples

srobinson on DSKHWCL6B1PROD with RULES2

§ 19.749

Samples.

The following rules apply to the
testing and analysis of samples of spirits
and fuel alcohol for purposes of this
subpart:
(a) A proprietor may take samples of
spirits and fuel alcohol for on-site
testing and analysis at the proprietor’s
alcohol fuel plant;
(b) A proprietor may not remove
samples of spirits from the premises of
the alcohol fuel plant for testing and
analysis;
(c) A proprietor may remove samples
of fuel alcohol from the premises of the
alcohol fuel plant for testing and
analysis at a qualified laboratory;

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(d) A proprietor of an alcohol fuel
plant must account for all samples in
the record required by § 19.718(b)(4);
and
(e) A proprietor of an alcohol fuel
plant must indicate on each container
that the spirits or fuel alcohol inside is
a sample.
(26 U.S.C. 5181)

Marking Requirements
§ 19.752

Marks.

(a) Fuel alcohol. A proprietor of an
alcohol fuel plant must place a
conspicuous and permanent warning
mark or label on each container of 55
gallons or less of fuel alcohol that the
proprietor will withdraw from the plant
premises. The proprietor must place the
mark or label on the head or side of the
container and must use plain, legible
letters. The proprietor may place other
marks or labels on the container if the
other marks or labels do not obscure the
required warning. The required warning
is as follows:

WARNING
FUEL ALCOHOL
MAY BE HARMFUL OR
FATAL IF SWALLOWED
(b) Spirits. If a proprietor intends to
transfer barrels, drums, or similar
portable containers of spirits to a
distilled spirits plant qualified under
subpart D of this part, the proprietor
must mark or label each container. The
proprietor must place the mark or label
on the head or side of the container and
must use plain, legible letters. The
proprietor may place other marks or
labels on the container if the other
marks or labels do not obscure the
required marks or labels. The required
mark or label each container must
contain the following information:
(1) Quantity in wine gallons;
(2) Proof of the spirits;
(3) Name, address, and permit number
of the alcohol fuel plant;
(4) The words ‘‘Spirits—For Alcohol
Fuel Use Only’’; and
(5) The serial number of the container.
Serial numbers must be assigned as
follows—
(i) Consecutively commencing with
‘‘1’’;
(ii) When the numbering system of
any series reaches ‘‘1,000,000’’ the
proprietor may begin the series again by
adding an alphabetical prefix or suffix
to the series; and
(iii) When there is a change in
proprietorship or a change in the
individual, firm, corporate name, or
trade name, the series in use at the time
of the change may be continued.

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9169

(26 U.S.C. 5181, 5206)

Subpart Y—Paperwork Reduction Act
§ 19.761 OMB control numbers assigned
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(a) Purpose. This subpart displays the
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1513–0088
1513–0039
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1513–0088
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1513–0056
1513–0056
1513–0056
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1513–0056
1513–0056
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1513–0044
1513–0039
1513–0041
1513–0047
1513–0049
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1513–0088
1513–0081
1513–0081
1513–0081
1513–0081
1513–0081
1513–0088
1513–0052
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1513–0088
1513–0088
1513–0113
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19.695
19.709
19.710
19.714
19.715

...................................
...................................
...................................
...................................
...................................

19.716 ...................................
19.717 ...................................
19.718 ...................................
19.719
19.720
19.724
19.727
19.729
19.733
19.734
19.735

19.736
19.739
19.746
19.747
19.749

...................................
...................................
...................................
...................................
...................................

19.752 ...................................

1513–0051
1513–0088
1513–0052
1513–0088
1513–0051
1513–0088
1513–0051
1513–0088
1513–0051
1513–0088
1513–0051
1513–0052
1513–0088
1513–0052
1513–0052
1513–0052
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1513–0088
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Authority: 5 U.S.C. 552(a); 26 U.S.C. 5001,
5008, 5041, 5042, 5044, 5061, 5062, 5121,
5122–5124, 5173, 5206, 5214, 5215, 5351,
5353, 5354, 5356, 5357, 5361, 5362, 5364–
5373, 5381–5388, 5391, 5392, 5511, 5551,
5552, 5661, 5662, 5684, 6065, 6091, 6109,
6301, 6302, 6311, 6651, 6676, 7302, 7342,
7502, 7503, 7606, 7805, 7851; 31 U.S.C. 9301,
9303, 9304, 9306.

Frm 00093

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PART 26—LIQUORS AND ARTICLES
FROM PUERTO RICO AND THE VIRGIN
ISLANDS
10. The authority citation for 27 CFR
part 26 continues to read as follows:

■

Authority: 19 U.S.C. 81c; 26 U.S.C. 5001,
5007, 5008, 5010, 5041, 5051, 5061, 5111–
5114, 5121, 5122–5124, 5131–5132, 5207,
5232, 5271, 5275, 5301, 5314, 5555, 6001,
6301, 6302, 6804, 7101, 7102, 7651, 7652,
7805; 27 U.S.C. 203, 205; 31 U.S.C. 9301,
9303, 9304, 9306.
§ 26.199f

Sfmt 4700

[Amended]

11. In § 26.199f, paragraph (a) is
amended by removing the reference to
‘‘27 CFR 19.562’’ and adding, in its
place, a reference to ‘‘§ 19.462 of this
chapter’’.

■

§ 24.226

[Amended]

12. In § 26.293, paragraph (a)(3) is
amended by removing the reference to
‘‘subpart R’’ and adding, in its place, a
reference to ‘‘subpart S’’.

■

PART 28—EXPORTATION OF
ALCOHOL
13. The authority citation for 27 CFR
part 28 continues to read as follows:

■

Authority: 5 U.S.C. 552(a); 19 U.S.C. 81c,
1202; 26 U.S.C. 5001, 5007, 5008, 5041, 5051,
5054, 5061, 5121, 5122, 5201, 5205, 5207,
5232, 5273, 5301, 5313, 5555, 6302, 7805; 27
U.S.C. 203, 205; 44 U.S.C. 3504(h).
[Amended]

14. Section 28.118 is amended by
removing the reference to ‘‘subpart U’’
and adding, in its place, a reference to
‘‘subpart Q’’.

■

PART 30—GAUGING MANUAL
15. The authority citation for 27 CFR
part 30 continues to read as follows:

■

Authority: 26 U.S.C. 7805.
§ 30.31

[Amended]

8. In § 24.226:
a. The first sentence is amended by
removing the reference to ‘‘27 CFR
19.510’’ and adding, in its place, a
reference to ‘‘§ 19.407 of this chapter’’;
and
■ b. The third sentence is amended by
removing the reference to ‘‘27 CFR
19.508’’ and adding, in its place, a
reference to ‘‘§ 19.405 of this chapter’’.

PO 00000

■

§ 28.118

7. The authority citation for 27 CFR
part 24 continues to read as follows:

■

■
■

[Amended]

9. In § 24.235, paragraph (a) is
amended by removing the reference to
1513–0051 ‘‘27 CFR 19.522(c)’’ and adding, in its
1513–0052 place, a reference to ‘‘§ 19.233 of this
1513–0088 chapter’’.

PART 24—WINE

§ 24.226

§ 24.235

9171

[Amended]

16. In § 30.31, paragraph (d) is
amended by removing the reference to
‘‘§ 19.383’’ and adding, in its place, a
reference to ‘‘§ 19.353 of this chapter’’.

■

§ 30.52

[Amended]

17. Section 30.52 is amended by
removing the reference to ‘‘§ 19.722’’ and
adding, in its place, a reference to
‘‘§ 19.582’’.

■

E:\FR\FM\16FER2.SGM

16FER2

9172

Federal Register / Vol. 76, No. 32 / Wednesday, February 16, 2011 / Rules and Regulations

PART 31—ALCOHOL BEVERAGE
DEALERS
18. The authority citation for 27 CFR
part 31 continues to read as follows:

■

srobinson on DSKHWCL6B1PROD with RULES2

Authority: 26 U.S.C. 5001, 5002, 5121,
5122–5124, 5131, 5132, 5206, 5207, 5273,
5301, 5352, 5555, 5603, 5613, 5681, 5687,
6061, 6065, 6071, 6091, 6103, 6109, 6723,
6724, 7805.

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§ 31.45

[Amended]

19. In § 31.45, paragraph (b) is
amended by removing the reference to
‘‘§ 19.58’’ and adding, in its place, a
reference to ‘‘§ 19.5’’.

■

§ 31.65

[Amended]

20. In § 31.65, paragraph (a) is
amended by removing the reference to
‘‘§ 19.58’’ and adding, in its place, a
reference to ‘‘§ 19.5’’.

■

PO 00000

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Sfmt 9990

Signed: May 27, 2010.
John J. Manfreda,
Administrator.
Approved: September 23, 2010.
Timothy E. Skud,
Deputy Assistant Secretary (Regulatory, Tariff
and Trade Enforcement).
[FR Doc. 2011–1956 Filed 2–15–11; 8:45 am]
BILLING CODE 4810–31–P

E:\FR\FM\16FER2.SGM

16FER2

File Type	application/pdf
File Title	Document
Subject	Extracted Pages
Author	U.S. Government Printing Office
File Modified	2011-02-15
File Created	2011-02-15