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FAQs
Distilled Spirits FAQs - Answer
S1: How do I convert bottles of distilled spirits in metric sizes to U.S. gallons?
Conversion tables for computation of taxable quantity of spirits, wine & beer
S2: What is proof, and how do I figure the proof gallons of distilled spirits?
What is proof?
Proof is a method of measuring the alcohol content of spirits. You calculate the proof of a spirits product is by multiplying the percent of alcohol by volume by two (2). For example, a spirits product that has a 40% alcohol content by volume is 80 proof [40 multiplied by 2 = 80]. f?
Converting U.S. gallons into proof gallons for tax purposes:
1. Multiply U.S. gallons by the percent of alcohol by volume.
2. Multiply by 2.
3. Divide by 100.
Sample calculation:
1. 100 U.S. gallons x 40% alcohol by volume=4000
2. 4000 x 2=8000
3. 8000/100= 80 proof gallons
S3: I've seen ads for home distilling equipment in catalogs ("turn wine into brandy," "make your own essential oils"). Is it legal to buy and use a still like that?
Under Federal rules administered by TTB, it depends on how you use the still. You may not produce alcohol with these stills unless you qualify as a distilled spirits plant (see earlier question). However, owning a small still and using it for other purposes is allowed. You should also check with your State and local authorities - their rules may differ.
A still is defined as apparatus capable of being used to separate ethyl alcohol from a mixture that contains alcohol. Small stills (with a cubic distilling capacity of a gallon or less) that are used for laboratory purposes or for distilling water or other non-alcoholic materials are exempt from our rules. If you buy a small still and use it to distill water or extract essential oils by steam or water extraction methods, you are not subject to TTB requirements. If you produce essential oils by a solvent method and you get alcohol as a by-product of your process, we consider that distilling. Even though you are using and recovering purchased alcohol, you are separating the alcohol from a mixture -distilling.
S4: What requirements are there for people who sell stills?
Under regulations in part 29 of title 27, Code of Federal Regulations, TTB has the right to require manufacturers of stills to give us the name and address of each customer. If we choose to impose this requirement, we inform the manufacturer of the stills by letter.
S5: How can I use distilled spirits in an industrial product or process without having to pay the excise tax?
The Internal Revenue Code provides three methods for doing this.
- Spirits that are denatured (i.e., treated with substances to make them unsuitable for human beverage consumption) may be used free of tax by a person who holds an industrial use permit. However, no permit is needed to use completely denatured alcohol or an approved article made from denatured spirits. Denatured spirits are suitable in a wide range of industrial applications, from mouthwash to fuel, etc., but not in products for internal human consumption, unless the spirits are removed.
- Persons such as research laboratories, hospitals, universities and government agencies may use un-denatured tax-free alcohol if they hold an industrial use permit. Un-denatured tax-free alcohol is prohibited from use in the manufacture of any product for sale.
- Un-denatured distilled spirits on which the tax has been paid may be used in the manufacture of medicines, medicinal preparations, food products, flavors, flavoring extracts, and perfume; and then drawback may be claimed. This drawback is similar to a refund; however, the drawback rate is $1 per proof gallon less than the applicable tax rate. The Government keeps the difference. For further information on using distilled spirits in any of these ways, please contact the TTB National Revenue Center at (800) 398-2282.
S6: How do I obtain a "student permit" to demonstrate alcohol production for a school science project?
Have you heard about the science fair project or school project where a student:
- Builds a homemade still,
- Lets leftover food scraps ferment and turn into alcohol,
- Burns the alcohol in a lantern, and
- Compares the alcohol to other sources of energy?
A. Under current law and regulations, we cannot allow you to conduct experiments involving distillation of alcohol at your home.
As an alternative, Federal law allows us to issue a permit for an alcohol fuel plant (AFP). Under this type of permit, experiments with alcohol fuels can be conducted at locations properly qualified with TTB.
Here's what you need to do to qualify:
- An authorized representative of your school (a teacher or other school official) must complete and forward an application form 5110.74 to us to establish a small AFP at your school.
- The experiment must be conducted at your school under appropriate adult supervision.
- The school official must tell us how long the experiment will last. They may allow for additional time in case your experiment is selected for additional competition or display at a regional or area science fair.
- The school official must describe the adult supervision that will be provided. We require this because we are concerned about the safety of children handling hazardous materials and using distillation equipment with alcohol— even with adult supervision.
These steps apply primarily to students who are in elementary through high school. Make sure your application is filed as soon as possible to allow enough time for us to process it. You cannot begin the experiment until we issue you a permit.
Application form 5110.74 and additional information are available from the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, Spirits Unit A, 550 Main Street, Room 8002, Cincinnati, OH 45202-3263. You may also contact us by phone at (800) 398-2282 or (513) 684-7150, or via e-mail.
S7: May I produce beer, wine or spirits for my personal or family use without paying Federal excise tax and filing Federal paperwork?
Beer
Wine
Wine for personal or family use.
Spirits
You may not produce spirits for beverage purposes without paying taxes and without prior approval of paperwork to operate a distilled spirits plant. [See 26 U.S.C. 5601 & 5602 for some of the criminal penalties.] There are numerous requirements that must be met that also make it impractical to produce spirits for personal or beverage use. Some of these requirements are paying special tax, filing an extensive application, filing a bond, providing adequate equipment to measure spirits, providing suitable tanks and pipelines, providing a separate building (other than a dwelling) and maintaining detailed records, and filing reports. All of these requirements are listed in 27 CFR Part 19.
Spirits may be produced for non-beverage purposes for fuel use only without payment of tax, but you also must file an application, receive TTB's approval, and follow requirements, such as construction, use, records and reports.
S8: Am I permitted to label my product with a specialized farming term to show my compliance with or concern for environmental initiatives and movements?
A description of specialized farming practices generally may appear on alcohol beverage labels as additional information provided it is truthful, accurate, specific, and does not conflict with, or in any manner qualify, mandatory labeling information. However, due to the constantly evolving nature of this field, TTB reserves the right to request clarification and documented verification of any graphics, seals, logos, definitions or language appearing on labels. For instance, any label specifically stating that the producer is certified by an agricultural organization must have documented proof.
Terms that refer to the environmental impact of the process and packaging rather than the product itself are usually acceptable. These words and phrases may not modify mandatory information on brand labels, but might appear as additional information after review on a case-by-case basis.
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- Become a Distilled Spirits Industry Member?
- Determine and Pay Taxes?
- Obtain Labeling and Formulation Approval?
- Renew my SOT registration?
- Sell Tax-Free Alcohol to an Approved User?
- Submit a Product Sample?
- Determine Special Occupational Tax Liability?
- File a Disaster Claim?
- Contact a TTB Distilled Spirits Expert?
- Differentiate between a change in proprietorship and a change in control?
- Purchase a Security for a Collateral Bond?
| Page last reviewed/updated: 04/06/2012 |
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