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Note: This file contains IRS Revenue Procedures and ATF/TTB Procedures for alcohol and tobacco. These procedures are available for your information; however, TTB cannot guarantee 100 percent accuracy. In addition, these procedures may be modified, superseded, or made obsolete by changes in laws and regulations and may not be a complete listing of all current and valid procedures. If you need to verify the content of any procedure, refer to the IRS or ATF Bulletins. Please inform us of any suspected errors or omissions at TTBInternetQuestions@ttb.gov or TTB, 1310 G Street, NW., Box 12 Washington, DC 20005. [Warning: This file is 77 pages when printed.]
- 2011-1 Payment of Tax by Electronic Fund Transfer
- 2010-1 Certification for the Analysis of Wine or Distilled Spirits for Export
- 2009-1 Procedure for Certain Tobacco Products and Cigarette Papers and Tubes Withdrawn from the Market
- 2004-1 TTB Procedure 2004-1, Testing of Calorie, Fat, Carbohydrate, and Protein Content of Alcohol Beverages; Acceptable Tolerance Levels.
- 2001-2 Alternate procedures which tobacco products manufacturers and importers may use to file claims after January 1, 2002 under 26 U.S.C. 5705 for credit or refund of tax on cigarettes withdrawn from the market.
- 2000-1 Alternate procedure for filing claims for cigarettes of tax increase imposed January 1, 2000 and for bearing the ultimate burden of the cigarette floor stocks tax by tobacco product manufacturers and importers.
- 98-3 Importation of Bulk Wine in Bond (note: previously reported as 98-1)
- 98-2 Importation of Bulk Beer in Bond
- 98-1 Labeling of Imported Malt Beverages Bottled or Packed in the United States, and for the Labeling of Blends of Imported and Domestic Malt Beverages Bottled or Packed in the United States (note: previously reported as 98-3)
- 95-1 New Materials To Be Used in the Production of Beer or Cereal Beverages
- 92-1 Payment of Firearms and Ammunition Excise Tax by Electronic Fund Transfer. (note: superseded by Procedure 2011-1)
- 91-1 Payment of Tax by Electronic Fund Transfer.(note: superseded by Procedure 2011-1)
- 90-2 Differentiating Between Pipe Tobacco and Roll-Your-Own Tobacco
- 88-2 Certification and Analysis of U.S. Wine for Export to the EEC
- 88-1 Certificate of Authenticity for Exported Straight Bourbon Whiskey
- 87-4 Tax Classification of Chewing Tobacco or Snuff
- 87-1 Submission of Samples of Alcoholic Beverages to the ATF National Laboratory Center for Testing
- 86-3 Label Approval for Imported Liqueurs, Cordials, Flavored Spirits and Distilled Gins
- 86-2 ATF Certification of Chemists, Enologists or Laboratories
- 86-1 Requirements of the European Economic Community (EEC) Applicable to Certification and Analysis of Commercial Shipments of U.S. Grape Table Wine and U.S. Sparkling Grape Wine
- 84-1 Preparation ATF Forms 2145 (5200.11), Notice of Release of Cigars, Cigarettes, Cigarette Papers or Cigarette Tubes
- 83-2 Automated Thermal Conductivity Analyzer Method for Determining Carbon Dioxide.
- 83-1 Alternate Optional Procedure for Filing Claims Under 26 U.S.C. 5705 for Credit or Refund of Tax On Cigarettes Withdrawn from the Market
- 81-1 Procedures for Adjusting Excise Tax Returns to Increase or Decrease the Amount of Tax Due
- 80-5 Procedures for Tax Exempt Sales of Tobacco Products by Proprietors of Export Warehouses to Persons Crossing the United States Border into Canada or Mexico
- 77-2 Infrared Spectrophotometer Method Authorized for Determining Carbon Dioxide
- 76-3 Manufacture and Use of Plastic Containers
- 76-2 Method for Sequential Solvent Extractions Used in Differentiating Cigars and Cigarettes
- 75-1 Removal of Tax-Exempt Tobacco Products for Use as Supplies on U.S. Navy Ships
- 74-1 Reciprocal Privileges for Iceland and Jordan
- 73-5 Tobacco Tests
- 73-1 Enzymatic Method Authorized for Determining Carbon Dioxide
- 72-20 Environmental Protection
- 71-22 Protecting Water Quality
- 71-5 Tobacco Products Sold to Aircraft Passengers
- 69-27 Receiving Incomplete Shipments of Tobacco Products
- 69-22 Qualification and Certification of Chemists and Laboratories To Analyze Distilled Spirits for Export
- 68-34 Determining Losses of Distilled Spirits
- 67-18 Withdrawal of Tobacco Products From Market
- 66-25 Markings on packages of tobacco product
- 66-22 Preparation and Distribution of Form 2149 Covering Replacement Shipments of Cigars and Cigarettes
- 66-21 Markings on Packages of Cigars
- 66-20 Claims for Cigars and Cigarettes Withdrawn From the Market
- 64-35 Recordkeeping Using ADP Systems
- 62-3 Testing for Spirits Content
SECTION 1. PURPOSE.
The purpose of this Revenue Procedure is to set forth the approved methods for testing for spirits content certain chemicals produced and collected in the production facility of a distilled spirits plant.
SEC. 2. BACKGROUND.
Section 201.278 of the Distilled Spirits Plants Regulations provides that all chemicals produced, including chemical by-products of the spirits production system, shall be substantially free of spirits before being transferred to storage tanks or removed from the production facilities; the spirits content of such chemicals shall not, except as authorized by the Director, Alcohol and Tobacco Tax Division, exceed 10 percent volume; and the testing of such chemicals for spirits content will be conducted by the proprietor in accordance with methods approved by the Director.
SEC. 3 REQUIRED APPARATUS AND REAGENTS.
The apparatus and reagents required for testing the chemicals for spirits content are as follows:
1. Fusel oil tube-A&TTD type. (The bulb holds three times the volume of the graduated neck portion. The graduations are from the top line marked 0 to the bottom line marked 100.)
2. Flask or graduate-300 to 500 ml. capacity.
3. Three graduates-25 ml. capacity.
4. Saturated salt solution (sodium chloride).
5. Sulfuric acid, concentrated, specific gravity 1.84
6. Two percent sulfuric acid solution (2 ml. concentrated sulfuric acid diluted with distilled water to 100 ml.).
7. Sodium sulfate, anhydrous (Na2SO4).
8. Ceric ammonium nitrate reagent. (Triturate 10 g. of ceric ammonium nitrate ((NH4)2Ce(NO3)6)) with 3.5 ml. concentrated nitric acid (HNO3) and dilute with distilled water to 125 ml. Filter if cloudy.)
9. Standard acetone-alcohol solution. (To 90 ml. of acetone (C.P.) add 10 ml. of ethyl alcohol (C.P.).)
10. Standard alcohol solution (2 percent ethyl alcohol (C.P.) 98 percent saturated salt solution).
11. Chloroform (CHCI3)
12. Nitric acid, concentrated (HN03).
SEC. 4. APPROVED METHODS FOR TESTING.
Samples meeting test requirements contain no more than 10 percent ethyl alcohol by volume and, thus, the tests serve as a rapid screening procedure. Failure to meet test requirements is not conclusive proof of the presence of more than 10 percent ethyl alcohol by volume since other chemicals may be present which affect solubilities or oxidation rate as in the case of acetone. Where samples fail to meet the approved method for testing and other laboratory analyses indicate that the sample contains less than 10 percent ethyl alcohol by volume, additional samples should be taken and forwarded to the regional laboratory for analyses by other methods. Approved methods for testing acetone, butyl alcohol, ethyl ether, ethyl oil, and fusel oil are listed below.
1. Acetone. - Put 5 ml. of ceric ammonium nitrate reagent in a 25 ml. graduate, add 5 ml. of acetone sample, close the graduate, and shake several times to mix. Immediately compare the color with that produced when 5 ml. of standard acetone-alcohol solution is similarly treated. If the color of the acetone sample being tested is not greater than the color of the standard (made with 5 ml. of standard solution), the acetone sample contains no more than 10 percent ethyl alcohol by volume. If desired, both the acetone sample and the standard may be diluted with equal quantities of distilled water. The difference in color is more apparent at 5 percent alcohol since at 10 percent alcohol the color is quite dark.
2. Butyl alcohol. - Put 20 ml. of saturated salt solution in the fusel oil tube and add 2 percent sulfuric acid solution until the 100 mark on the fusel oil tube is reached. Add butyl alcohol sample until the 0 mark on the fusel oil tube is reached, close the fusel oil tube, shake for about 5 minutes, and place in an upright position to allow the two layers to separate (30 minutes may be required to get a good separation). A reading of 90 or less at a temperature of 60 degrees to 80 degrees F. indicates more than 10 percent ethyl alcohol by volume.*
*(Note: The ethyl alcohol in the sample is dissolved in saturated salt solution and remains in the lower layer. The decrease in the upper layer gives a measure of the amount of ethyl alcohol contained in the sample.
3. Ethyl ether. - Put saturated salt solution in the fusel oil tube until the 100 mark on the fusel oil tube is reached. Add ethyl ether sample until the 0 mark on the fusel oil tube is reached, close the fusel oil tube, shake, and place in an upright position to allow the two layers to separate (about 2 or 3 minutes). A reading of 90 or less at a temperature of 60 degrees to 80 degrees F. indicates more than 10 percent ethyl alcohol by volume.*
4. Ethyl oil. - Either of the following methods may be used:
(1) Put saturated salt solution in the fusel oil tube until the 100 mark on the fusel oil tube is reached. Add ethyl oil sample until the 0 mark on the fusel oil tube is reached, close the fusel oil tube, shake and place in an upright position to allow the two layers to separate. A reading below 90 at a temperature of 60 degrees to 80 degrees F. indicates more than 10 percent ethyl alcohol by volume.*
(2) Put 19 ml. of chloroform in a 25 ml. graduate, add 1 ml. of ethyl oil sample, close the graduate, shake several times to mix, and then add 5 ml. of saturated salt solution. Into another 25 ml. graduate put 20 ml. of chloroform, add 5 ml. of standard alcohol solution, close the graduate, shake for 3 minutes, and place in an upright position to allow the two layers to separate. Into each of these two graduates add 5 ml. of ceric ammonium nitrate reagent and stir several times to mix reagent with the upper layer in the graduate. If the color in the graduate containing the ethyl oil sample is not greater than the color in the graduate containing the standard alcohol solution, the ethyl alcohol is not more than 10 percent by volume.
5. Fusel oil. - Put saturated slat solution in the fusel oil tube until the 100 mark on the fusel oil tube is reached. Add fusel oil sample until the 0 mark on the fusel oil tube is reached, close the fusel oil tube, shake, and place in an upright position to allow the two layers to separate. A reading below 90 at a temperature of 60 degrees to 80 degrees F. indicates more than 10 percent ethyl alcohol by volume.*
*(Note: The ethyl alcohol in the sample is dissolved in saturated salt solution and remains in the lower layer. The decrease in the upper layer gives a measure of the amount of ethyl alcohol contained in the sample.
SEC. 5. TEMPERATURE EFFECTS ON SAMPLE.
Oxidation rate of acetone is increased by elevated temperatures and decreased by lower temperatures. An increase in temperature increases the solubility of the solvents in the saturated salt solution.
SEC. 6. MOISTURE EFFECTS ON SAMPLE.
Except for acetone, appreciable quantities of water have a decided effect on the test results. The water is completely dissolved in the saturated salt solution and, thus, would be read in the fusel oil tube as alcohol. When the solvents meet the requirements of the test, there is no need to make a correction for water; but, if the test indicates the presence of more than 10 percent ethyl alcohol by volume, then the following procedure may be used to dry the sample before making the test:
Dehydration of sample - Put 200 ml. of sample in the 300 to 500 ml. flask or graduate and add approximately 80 grams of anhydrous sodium sulfate. Shake, let stand for 1 hour (butyl alcohol requires 36 hours contact), and decant the supernatant liquid which is used as the test sample in the preceding tests. The anhydrous sodium sulfate is a fairly effective drying agent and as such it removes most of the water.
SEC. 7. INQUIRIES.
Inquiries regarding this Revenue Procedure should refer to its number and be addressed to the office of the appropriate Assistant Regional Commissioner, Alcohol and Tobacco Tax.
26 U.S.C. 5201; 26 CFR 601.301
SECTION 1. PURPOSE.
.01 The purpose of this Revenue Procedure is to set forth guidelines specifying the basic record requirements which the Internal Revenue Service considers to be essential where a proprietor or permittee operating under chapter 51 (Distilled Spirits, Wines and Beer) or chapter 52 (Tobacco, Cigars, Cigarettes, and Cigarette Papers and Tubes) of the Internal Revenue Code of 1954 maintains records within an automatic data processing (ADP) system. For the purpose of this Revenue Procedure, ADP systems include all accounting systems which process all or a part of the records, transactions, or other applicable data of a proprietor or permittee by other than manual methods.
.02 Because the technology of ADP is evolving rapidly, these guidelines are not intended to restrict the uses made by proprietors and permittees except where such uses would result in noncompliance with record keeping requirements of the regulations.
SEC. 2. BACKGROUND
The inherent nature of ADP is such that it may not be possible to trace transactions from source documents to end results, or to reconstruct a given account, unless the system is designed to provide audit trails. Under regulations issued under chapter 51 of the Code, it is necessary that records of transactions be such as will enable any Internal Revenue Service officer to verify and trace the production, receipt, storage, and disposition of distilled spirits, wine, and beer and certain other products made with or containing wine or distilled spirits and certain other products made with or containing wine or distilled spirits, and to ascertain whether there has been compliance with the law and regulations. Similarly, under regulations issued under chapter 52 of the Code, it is necessary that records of specified operations and transactions, and the auxiliary and supplemental records from which such records are compiled, be maintained by the proprietor or permittee and be made available for inspection by any Internal Revenue Service officer upon his request.
SEC. 3. OBJECTIVES.
Modern machine accounting systems are capable of recording business transactions much more rapidly and with greater accuracy than manual systems, and they are capable of retaining and producing vast amounts of data. The ability to produce in legible form, when needed, the data necessary to meet the requirements of law and regulations must be carefully considered in designing and programming a machine system. This factor may add to the complexity or the systems and require additional cost, but this cost may be negligible when compared to the expense that may later be incurred if the systems cannot practically and readily provide the required information.
SEC. 4. ADP RECORD GUIDELINES.
.01 ADP accounting systems will vary, just as manual systems vary, to meet the needs of a particular proprietor or permittee. However, the procedures built into a computer's accounting program must include a method of producing from the punched cards or tapes visible and legible records which will provide the necessary details required by the regulations covering the respective operations, or such details must be available in supplemental records.
.02 In determining the adequacy of records required by regulations issued under chapter 51 and chapter 52, of the Code, maintained within an automatic data processing system, the Service will consider as acceptable those systems which comply with guidelines for records requirements as follows:
(1) The records maintained by ADP must be supplemented by such other records as are necessary, so that the entire records systems will fully comply with the requirements of the applicable regulations.
(2) The records must provide the opportunity to trace any transaction back to the original source or forward to a final total. If printouts are not made of transactions at the time they are processed, the system must have the ability to reconstruct these transactions.
(3) The system must be such that the information required by the regulations can be readily furnished without delay.
(4) Adequate record retention facilities must be available for storing tapes and printouts as well as all applicable supporting documents. These records must be retained in accordance with the provisions of the Code and the regulations prescribed thereunder.
(5) A description of the ADP portion of the accounting system should be available. The statements and illustrations as to the scope of operations should be sufficiently detailed to indicate (a) the application being performed, (b) the procedures employed in each application (which, for example, might be supported by flow charts, block diagrams, or other descriptions of input or output procedures), and (c) the controls used to insure accurate and reliable processing. Once an ADP system is installed, important changes, together with their effective dates, should be noted in order to preserve an accurate chronological record.
SEC. 5. NOTIFICATION TO ASSISTANT REGIONAL COMMISSIONER.
As indicated in section 3, inadequate coverage at the time an ADP system is installed can prove costly. Therefore, proprietors and permittees are encouraged to notify the appropriate Assistant Regional Commissioner, Alcohol and Tobacco Tax, in advance of installation of ADP, giving him the details of the records involved and the proposed method of preparation and retention so that he can, to the extent possible, determine in advance the adequacy of the records.
SEC. 6. INQUIRIES
Comments or inquiries relating to this Revenue Procedure should be addressed to the appropriate Assistant Regional Commissioner, Alcohol and Tobacco Tax.
26 U.S.C. 5555, 5741; 26 CFR 601.301
SECTION 1. PURPOSE.
The purpose of this Revenue Procedure is to provide information as to the date to be shown in claims for credit of tax, Form 2635, Claim-Alcohol and Tobacco Taxes, or claims for refund of tax, Form 843, Claim, filed under section 5705 of the Internal Revenue Code of 1954, on cigars and cigarettes withdrawn from the market.
SEC. 2. BACKGROUND.
The period of limitation for filing claims for credit or refund of tax, as set forth in section 5705(c) of the Code, is 6 months after the date of withdrawal from the market, loss (otherwise than by theft), or destruction of the cigars and cigarettes to which the claim relates.
SEC. 3. ACCEPTABLE DATES ON CLAIM.
It will be acceptable for claimants to show on either Form 2635 or Form 843 as the date of withdrawal from the market, the date that cigars and cigarettes were received on the factory premises (as described in the manufacturer's application for permit), or were voluntarily destroyed or reduced to tobacco, at a place other than such premises. In lieu of a listing of such specific date or dates, the claimant may certify (under penalties of perjury) that the products covered by the claim were received on the factory premises, or voluntarily destroyed or reduced to tobacco, at a place other than such premises, within 6 months prior to the date that the claim is filed.
SEC. 4. INQUIRIES.
Inquiries in regard to this Revenue Procedure should refer to the number thereof and should be addressed to the appropriate Assistant Regional Commissioner, Alcohol and Tobacco Tax.
Revenue Procedure 59-2, C.B. 1959-1, 800, is hereby superseded.
26 U.S.C. 5705; 26 CFR 601.315
SECTION 1. PURPOSE.
The purpose of this Revenue Procedure is to explain the requirement concerning the "notice" to appear on packages of large cigars and to furnish suggestions for compliance with the regulations.
SEC. 2. BACKGROUND.
The Internal Revenue Service has received inquiries whether the appearance of the word "cigars" in the class designation on a package of large cigars would fulfill the requirements of 26 CFR 270.214 and 275.73 or if the word "cigars" must be separately stated on the package.
SEC. 3. REQUIREMENT OF REGULATIONS.
Under the return system it is necessary that packages of cigars and cigarettes have positive expressions of the quantity, kind, and class of the cigars and cigarettes contained in the packages. Therefore, for large cigars 26 CFR 270.214 and 275.73 specifically require that packages of such products shall, before removal subject to tax, have adequately imprinted thereon, or on a label securely affixed thereto, the designation "cigars" and the appropriate class designation.
This means that the appearance on the package of the word "cigars" in the class designation for large cigars does not fulfill the requirement of 26 CFR 270.214 or 275.73 and that the word "cigars" must be separately and adequately stated. While such descriptive words as "cigarillos," "cheroots," "blunts," "panatelas," etc., may be used on packages of cigars, they will not be considered as a substitute for the word "cigars."
SEC. 4. SUGGESTIONS FOR COMPLIANCE.
.01 The Internal Revenue Service suggests to manufacturers and importers the following ways in which the word "cigars" may appear on the package. The word "cigars" may be imprinted directly on the package or on a label securely affixed to the package. For example, it may appear in connection with (1) a brand name, such as "Perfect Cigars," (2) the quantity statement, such as "25 cigars," or (3) a slogan, such as "finest quality cigars." .02 Manufacturers and importers are urged to submit packages to their Assistant Regional Commissioner, Alcohol and Tobacco Tax, for advice where there is any doubt about compliance with the requirement of the regulations.
SEC. 5. INQUIRIES.
Inquiries in regard to this Revenue Procedure should refer to its number and be addressed to the office of the appropriate Assistant Regional Commissioner, Alcohol and Tobacco Tax.
Revenue Procedure 62-5, C.B. 1962-1, 426, is hereby superseded.
26 U.S.C., 5723; 26 CFR 601.311
SECTION 1. PURPOSE.
The purpose of this Revenue Procedure is to outline the procedure for the preparation and distribution by manufacturers of tobacco products of Form 2149, Notice of Removal of Cigars, Cigarettes, Cigarette Papers, or Cigarette Tubes, from Factory for Export, covering shipments of tax-exempt cigars and cigarettes replacing products lost, damaged, or destroyed in transit for exportation.
SEC. 2. BACKGROUND.
.01 26 CFR 290.198 and 290.199 provide for the preparation and distribution of the several copies of Form 2149, and 26 CFR 290.203 provides for the filing of two copies of the form with the District Director of Customs at the port of exportation, for each shipment removed for exportation.
.02 Where cigars and cigarettes are lost, damaged, or destroyed in transit for exportation (either the total shipment of a part of the shipment) and the manufacturer of tobacco products makes a replacement shipment, the two sets of Form 2149 will, in the aggregate, indicate the removal for exportation of more products than are entered on the export declaration and ship's manifest. Since the District Director of Customs certifies to only the actual quantity exported, the additional Form 2149 covering a replacement shipment often creates confusing and additional work in his office. Therefore, the following procedure should be used when replacement shipments are made.
SEC. 3. PROCEDURE.
.01 Preparation and Disposition of Forms 2149 Covering Replacement Shipments. - When tax-exempt cigars and cigarettes are removed from the factory to replace cigars and cigarettes lost, damaged, or destroyed in transit for exportation, Form 2149 should contain a statement to the effect that the cigars and cigarettes listed thereon were removed from the factory to replace cigars and cigarettes removed under Form 2149, serial number, which were lost, damaged, or destroyed, as applicable. It should also contain an explanation of the loss, damage, or destruction. Only two copies of the form need be prepared, one copy to be retained by the manufacturer as a part of his records and one copy to be forwarded to the Assistant Regional Commissioner, Alcohol and Tobacco Tax. No copy should be sent to the District Director of Customs for the reason stated in section 2.02 above.
.02 Accounting for Lost, Damaged, or Destroyed Cigars and Cigarettes. - Manufacturers are reminded that lost, damaged, or destroyed cigars and cigarettes must be accounted for by tax-payment, by return to the factory, or by the filing of a claim for remission of the tax liability with the Assistance Regional Commissioner, Alcohol and Tobacco Tax.
SEC. 4. INQUIRIES.
Inquiries in regard to this Revenue Procedure should refer to its number and be addressed to the office of the Assistant Regional Commissioner, Alcohol and Tobacco Tax.
Revenue Procedure 62-22, C.B. 1962-2, 486, is hereby superseded.
26 U.S.C. 5704; 26 CFR 601.311
SECTION 1. PURPOSE.
The purpose of this Revenue Procedure is to set forth the procedure to be followed by manufacturers of tobacco products for recording and reporting cigars and cigarettes removed subject to tax and the treatment of tax determined (including taxpaid) cigars and cigarettes received into the factory.
SEC. 2. BACKGROUND.
Recent inspections disclosed that some manufacturers of tobacco products were not fully reporting the quantities of cigars and cigarettes removed subject to tax because they were reducing the quantity of products actually removed to the extent of tax determined products returned to the factory. The manufacturers based their action on the consideration that (1) no claim for allowance or refund of tax would be made on the returned products, and (2) when such products were again removed subject to tax, the tax would be redetermined and paid. However, there is no basis for this practice in the applicable laws and regulations.
SEC. 3. RECORDING AND REPORTING REMOVALS SUBJECT TO TAX.
A manufacturer of tobacco products must enter in his records and reports the total quantity of cigars and cigarettes removed subject to tax, reflect such quantity in the tax return for the period in which the removals occurred, and pay the full amount of tax (except for authorized adjustments). In no case may the manufacturer, in his reports and tax returns, reduce the quantity of products actually removed subject to tax by the quantity of tax determined products returned to the factory.
SEC. 4. TREATMENT OF TAX DETERMINED PRODUCTS RECEIVED INTO FACTORY.
.01 All tax determined (including taxpaid) cigars and cigarettes (those which have not been returned to an "in bond" status) received into the factory must be segregated and identified as tax determined products and their receipt and disposition entered in the records in the account of taxpaid or tax determined products received. If reshipped, supporting records (such as copies of invoices, bills of lading, shipping tickets, etc.) must clearly identify the products as reshipped tax determined products. Lack of such identifications may result in the assessment of tax on the reshipped products. Tax determined cigars and cigarettes so handled would not be included in monthly reports.
.02 If tax determined cigars and cigarettes received into the factory are later to be returned to an "in bond" status, such disposition must be recorded in the taxpaid or tax determined account and the products concurrently picked up in the "received by return to bond" account. Thus, when the cigars and cigarettes are picked up as received by return to bond, they will be included in the monthly reports. When such cigars and cigarettes are then removed subject to tax, they will be so reported and fully covered in the tax return for the period in which they were removed. If the manufacturer wishes to obtain allowance, credit, or refund of tax which has been previously determined or paid on the products returned to bond, he may file claim on Form 2635, Claim-Alcohol and Tobacco Taxes, or Form 843, Claim, as applicable, and follow the procedures prescribed in 26 CFR 270.282, 270.283, 270.311, and 270.313 which involve notifying the Assistant Regional Commissioner, Alcohol and Tobacco Tax, before returning the products to an "in bond" status.
SEC. 5. INQUIRIES.
Inquiries in regard to this Revenue Procedure should refer to its number and be addressed to the office of the appropriate Assistant Regional Commissioner, Alcohol and Tobacco Tax.
Revenue Procedure 63-13, C.B. 1963-1, 501, is hereby superseded.
26 U.S.C. 5703, 5705, 5741; 26 CFR 601.311
SECTION 1. PURPOSE.
The purpose of this Revenue Procedure is to furnish instructions as to which manufacturer's name and location, or permit number (to be shown in the mark as required by 26 CFR 270.212), should appear on packages of cigars or cigarettes produced and packaged by one manufacturer and transferred in bond to another such manufacturer.
SEC. 2. BACKGROUND.
Under the provisions of section 5704(b) of the Internal Revenue Code of 1954 and 26 CFR 270.233, a manufacturer of tobacco products may transfer cigars and cigarettes under his bond, without payment of tax, to the factory of any manufacturer of tobacco products. When so transferred, the cigars and cigarettes are exempt from the packaging requirements of 26 CFR 270.211. However, the regulations contemplate that the cigars or cigarettes may be shipped in bulk or in packages, as desired. When the cigars or cigarettes are transferred in packages, the question has been raised as to which manufacturer the mark on the package should identify.
SEC. 3. IDENTIFICATION OF MANUFACTURER LIABLE FOR TAX
Packages containing cigars or cigarettes produced by one manufacturer and transferred in bond, without payment of tax, to another manufacturer of such products should, in the mark required by the regulations, identify by name and location (by city and State), or by permit number, the manufacturer who will remove the cigars and cigarettes subject to tax. He becomes liable for the tax on such products upon their receipt and will usually be the proper claimant in respect to credit, refund, or allowance provided by law.
SEC. 4. INQUIRIES.
Inquiries regarding this Revenue Procedure should refer to its number and be addressed to the appropriate Assistant Regional Commissioner, Alcohol and Tobacco Tax.
Revenue Procedure 64-6, C.B. 1964-1, (Part 1), 664, is hereby superseded.
26 U.S.C. 5704, 5723; 26 CFR 601.311
SECTION 1. PURPOSE.
Revenue Procedure 66-24, C.B. 1966-1, 652, established procedures to be followed by a manufacturer of tobacco products (or by his authorized representative) in executing Form 3069, Schedule of Cigars, Cigarettes, or Cigarette Papers or Tubes Withdrawn from the Market. In order to make such procedures applicable to Form 3069 without regard to revision date, they are restated herein to omit reference, in sections 3 and 4, to specific item numbers appearing on the form.
SEC. 2. BACKGROUND.
.01 Damaged cigars and cigarettes were destroyed at the premises of a wholesale tobacco dealer under the supervision of an alcohol and tobacco tax inspector. The dealer prepared Form 3069 with the intention of transmitting the schedule to the manufacturer who would file claim for credit or refund of tax under section 5705 of the Internal Revenue Code of 1954. However, the manufacturer was not aware of the destruction of such products. The matter did not come to his attention until after the destruction of the cigars and cigarettes. Therefore, the manufacturer could not properly claim that he had withdrawn them from the market. Accordingly, a claim for credit or refund of tax on such products is not allowable.
.02 One condition to the credit or refund of tax on domestic cigars and cigarettes under section 5705 of the Code is the withdrawal of the products from the market by the manufacturerwho paid the tax. However, the law and regulations do not preclude the allowance of a claim where the cigars and cigarettes are destroyed or reduced to tobacco at a location other than the factory premises if the manufacturer takes possession or acquires ownership of the cigars and cigarettes prior to destruction or reduction to tobacco.
SEC. 3. SIGNATURE REQUIRED ON FORM 3069.
The action of the manufacturer in withdrawing cigars and cigarettes from the market must be evidenced by the signature of the manufacturer (or by the signature of the manufacturer's authorized representative) on the schedule, Form 3069.
SEC. 4. EXECUTION OF SCHEDULE FOR THE MANUFACTURER BY HIS REPRESENTATIVE.
Whenever a manufacturer withdraws cigars and cigarettes from the market and the schedule, Form 3069, is to be executed in his behalf by an employee such as a district manager, distribution manager, etc., not otherwise authorized to sign documents filed with the Assistant Regional Commissioner, Alcohol and Tobacco Tax, the manufacturer is responsible for timely filing Form 1534, Power of Attorney, as provided for in 26 CFR 270.68 authorizing such person to so act. It is the responsibility of the manufacturer to have on file with the Assistant Regional Commissioner, Alcohol and Tobacco Tax, for the region where the claim will be filed a Form 1534 prior to the execution of any schedule for the manufacturer by the person named in the power of attorney. Execution of Form 3069 by a person not authorized to do so may result in the disallowance of the claim. After cigars and cigarettes have been disposed of and a claim for credit or refund filed, the determination will be made in alcohol and tobacco tax offices as to whether the person who executed Form 3069 was duly authorized to act in behalf of the manufacturer. Manufacturers should fully instruct their representatives in the proper preparation of Form 3069.
SEC. 5. INQUIRIES.
Inquiries in regard to this Revenue Procedure should refer to its number and be addressed to the office of the appropriate Assistant Regional Commissioner, Alcohol and Tobacco Tax.
SEC. 6. EFFECT ON OTHER DOCUMENTS.
Revenue Procedure 66-24, C.B. 1966-1, 652, is hereby superseded.
26 U.S.C. 5705; 26 CFR 601.315
SECTION 1. PURPOSE.
The purpose of this Revenue Procedure is to modify the provisions of Revenue Procedure 68-18, C.B. 1968-1, 808, to allow for soakage in determining losses from tampered packages of distilled spirits in bonded storage. (See paragraphs 3.01 (a) and (d).) For convenience, the provisions of the Revenue Procedure, as modified, are restated.
SEC. 2. BACKGROUND.
Section 5006(b)(1) of the Internal Revenue Code of 1954 and 26 CFR 201.310(a) provide that when it is found that a package of distilled spirits in bond has sustained a loss due to theft or unauthorized voluntary destruction, immediate taxpayment of the original quantity of spirits entered for deposit in storage in the package may be required. An exception is made that where losses from any cause other than theft or unauthorized voluntary destruction can be established by the proprietor to the satisfaction of the Assistant Regional Commissioner, Alcohol and Tobacco Tax, the tax on the loss so established may be credited against the tax on the original quantity. Acceptable procedures for determining normal storage losses for packages filled by individual gauge and by average fill methods are prescribed below.
SEC. 3. METHODS FOR DETERMINING LOSSES.
.01 Packages filled by the individual gauge method. - In order to credit the tax on normal storage losses against the tax on the original quantity of spirits entered for deposit in a package filled by the individual gauge method, when such package has sustained a loss due to theft or unauthorized voluntary destruction, the proprietor should:
(a) Determine the loss from the tampered package by actual gauge or by using the present gross weight, present proof, and original tare of the package, and subtracting the tax gallons so obtained from the original tax gallons entered into the package.
(b) Weigh ten similar packages containing the same kind of spirits produced on the same day as the spirits in the tampered package and stored under similar conditions.
(c) Select, from the ten packages weighed, the package which, on the basis of original and present gross weights, appears to have sustained the least loss.
(d) Determine the loss from the comparison package by the same method used to determine the loss from the tampered package. The tax gallon loss so determined will be considered the normal storage loss from the tampered package.
(e) Subtract the tax gallons considered to be the normal storage loss from the total tax gallon loss from the tampered package.
The quantity determined in (e) above will be considered as a loss due to theft or unauthorized voluntary destruction and must be taxpaid in accordance with the provisions of 26 CFR Part 201.
.02 Packages filled by average fill methods. - In order to credit the tax on normal storage losses against the tax on the original quantity of spirits entered for deposit in a package filled by an average fill method, when such package has sustained a loss due to theft or unauthorized voluntary destruction, the proprietor should:
(a) Gauge the tampered package by weight and proof.
(b) Weigh ten similar packages containing the same kind of spirits produced on the same day as the spirits in the tampered package and stored under similar conditions.
(c) Select from the ten packages weighed the package with the heaviest gross weight.
(d) Subtract the gross weight of the tampered package from the gross weight of the comparison package.
(e) Convert the difference between the gross weights of the two packages to tax gallons, using the proof of the spirits in the tampered package.
The quantity determined in (e) above will be considered as a loss due to theft or unauthorized voluntary destruction and must be taxpaid in accordance with the provisions of 26 CFR Part 201.
SEC. 4. EFFECT ON OTHER DOCUMENTS.
This Revenue Procedure supersedes Revenue Procedure 68-18, C.B. 1968-1, 808.
SEC. 5. INQUIRIES.
Inquiries concerning this Revenue Procedure should refer to its number and be addressed to the appropriate Assistant Regional Commissioner, Alcohol and Tobacco Tax.
26 U.S.C. 5006, 5204; 26 CFR 601.301
SECTION 1. PURPOSE.
The purpose of this Revenue Procedure is to establish procedures for the qualification and certification of chemists and laboratories desiring to analyze distilled spirits that are to be exported to foreign countries.
SEC. 2. BACKGROUND.
Many countries require that imported distilled spirits be chemically analyzed before their customs authorities may release them into commercial channels. Some of these countries provide that such spirits must be analyzed by their own government laboratories or by laboratories certified by their government. Others permit the analysis to be made in the exporting country, as long as such analysis is made by a chemist or laboratory certified as qualified to perform such analysis by the government of the exporting country. Italy is one such country in the latter category, and Revenue Procedure 65-9, C.B. 1965-1, 735, as amended by Revenue Procedure 65-24, C.B. 1965-2, 1006, established procedures whereby the Director, Alcohol, Tobacco and Firearms Division, could certify that chemists or laboratories were qualified to analyze distilled spirits to be exported to that country. The Service has been requested to provide similar procedures with respect to distilled spirits to be exported to countries other than Italy.
SEC. 3. APPLICATION FOR CERTIFICATION.
Applications for certification that a chemist or laboratory is qualified to analyze distilled spirits to be exported, may be filed by a graduate chemist, by a laboratory under the direction of a graduate chemist, or by an exporter on behalf of such a chemist or laboratory. The application shall be filed in duplicate, on the applicant's letterhead, with the Director, Alcohol, Tobacco and Firearms Division, Internal Revenue Service, Washington, D.C. 20224. It will be supported by documentation of the graduate chemist's educational qualifications and professional experience (this information may be subject to verification). Chemists or laboratories already certified by the Director under the provisions of Revenue Procedure 65-9 need not again apply for certification. They will automatically be considered qualified to analyze distilled spirits under this Revenue Procedure, and their will be included on the lists of certified chemists and laboratories to be distributed by the Director.
SEC. 4. QUALIFICATION FOR CERTIFICATION.
.01 To qualify for certification by the Director, Alcohol, Tobacco and Firearms Division, the chemist or laboratory must:
(a) Have access to such laboratory equipment and facilities as may, be necessary to analyze distilled spirits according to the techniques described in subdivisions (1)-(10) of the following subparagraph (b). The adequacy of such equipment and facilities may be subject to verification or inspection.
(b) Submit to the Director, Alcohol, Tobacco and Firearms Division (Attention: National Office Laboratory), Internal Revenue Service, Washington, D.C. 20224, a report of the analysis of any sample of straight whisky and any sample of blended whisky, together with a one-pint sample of each of the whiskies analyzed. This report should show the following with respect to each sample:
(1) Proof and Percent Alcohol by Volume, as determined using the techniques described in 26 CFR 186.31 and 186.32 (Gauging Manual of the U.S. Treasury Department, Internal Revenue Service, 1962 edition). Proof should be reported to the nearest 0. 1° proof; percent alcohol by volume to the nearest 0.05%.
(2) Specific Gravity in air at 60° F., as calculated from the proof, table 6 of the Gauging Manual (1962 edition). Report to the nearest 0.00001.
(3) Methvl Alcohol, as determined using the chromotropic acid colorimetric method described at sections 9.051-9.054 of the Official Methods of Analysis of the Association of Official Agricultural Chemists (OMA, 10th edition). The determination will be made on a straight distillate from the sample, without concentration of the methyl alcohol as provided for in the latter half of section 9.053. Report to the nearest 0. 1 cc per 100 cc anhydrous alcohol.
(4) Total Solids, as determined using the techniques described at section 9.023 of the OMA, 10th edition. Report to the nearest 0.1 mg per 100 cc anhydrous alcohol.
(5) Total Acidity (as acetic acid), as determined using the techniques described at section 9.030 of the OMA, 10th edition. Report to the nearest 0. 1 mg per 100 cc anhydrous alcohol.
(6) Esters (as ethyl acetate), as determined using the techniques described at sections 9.034-9.035 of the OMA, 10th edition, or the gas liquid chromatographic method as described in 51 456-457 (1968) of the journal of the Association of Official Analytical Chemists. Report to the nearest 0. 1 mg per 100 cc anhydrous alcohol.
(7) Aldehydes, as determined using the techniques described at sections 9.034 and 9.036 of the OMA, 10th edition. Report to the nearest 0. 1 mg per 100 cc anhydrous alcohol.
(8) Furfural, as determined using the techniques described at sections 9.046 and 9.047 of the OMA, 10th edition. Report to the nearest 0. 1 mg per 100 cc anhydrous alcohol.
(9) Higher Alcohol (fusel oil), as determined using the P-Dimethylaminobenzaldehyde method as described at sections 9.037-9.039 of the OMA, 10th edition, the 4- Hydroxybenzaldehyde-3-sulfonic acid method as described at sections 9.040- 9.045 of the OMA, 10th edition, or the gas liquid chromatographic method. as described in 51 456-457 (1968) of the journal of the Association of Official Analytical Chemists. Report to the nearest 0.1 mg per 100 cc anhydrous alcohol.
(10) Total Secondary Products (volatile impurities) calculated as the sum total of items (5), (6), (7), (8), and (9). Report to the nearest 0. 1 mg per 100 cc anhydrous alcohol.
(c) Submit to the Director, Alcohol, Tobacco and Firearms Division, a report of the analysis (performed in accordance with subdivision (3) above) of the methyl alcohol content of a sample that will be furnished by the Director. A sample is furnished in this instance because methyl alcohol will usually not be present in the straight and blended whiskies analyzed under subparagraph (b) above.
SEC. 5. CERTIFICATION OF APPLICANTS.
If U.S. Government chemists verify the reports of analysis submitted by the applicant, and other requirements have been met, the Director, Alcohol, Tobacco and Firearms Division, will certify the laboratory or chemist and so notify the applicant. Any person, agency of a foreign government, etc., desiring to obtain a list of the chemists and laboratories so certified, should submit a request for such list to the Director, Alcohol, Tobacco and Firearms Division. If the laboratory or chemist does not meet the requirements for certification, the applicant will be so notified.
SEC. 6. ANALYSES BY CERTIFIED CHEMISTS OR LABORATORIES.
Certified chemists or laboratories will perform their analyses of distilled spirits using the techniques described at subdivisions 4.01(b)(1)-4.01(b)(10) of this Revenue Procedure, Where tests other than those listed are required by a foreign government, the Director, Alcohol, Tobacco and Firearms Division, may, upon application in duplicate, authorize the reporting of data relating to such additional tests on the certificate of analysis. Approval of such applications may be conditioned upon compliance with any additional qualifying requirements the Director may prescribe.
SEC. 7. CERTIFICATES OF ANALYSIS.
.01 Certificates of analysis will be signed by the certified chemist, or, where a laboratory under the direction of a graduate chemist has been certified by the Director, by such graduate chemist. Directly under his signature, the chemist may enter the designation "Chemist certified by United States Internal Revenue Service under Revenue Procedure 69-22."
.02 As an alternative, where the certificate of analysis is being prepared for a country that requires a statement by a governmental authority of the exporting country on the certificate of analysis, the following procedure may be followed. The signed certificate will be forwarded to the Internal Revenue Officer assigned to the distilled spirits plant at which the spirits were bottled or packaged, or, where no officer is assigned to such plant, to the Assistant Regional Commissioner, Alcohol, Tobacco and Firearms. The assigned officer or Assistant Regional Commissioner may, if the chemist or laboratory making the analysis has been duly certified by the Director, Alcohol, Tobacco and Firearms Division, attest as follows on the certificate of analysis: "I hereby attest that (name of certified chemist or laboratory) is duly certified to make analyses under Revenue Procedure 69-22 of the U.S. Treasury Department, Internal Revenue Service." One copy of the certificate of analysis will be retained by the assigned officer or Assistant Regional Commissioner, and the remaining copy or copies will be forwarded to the exporter.
SEC. 8. EFFECT ON OTHER DOCUMENTS.
Sections 1, 2, 3, and 5 of Revenue Procedure 65-9, C.B. 1965-1, 735, and Revenue Procedure 65-24, C.B. 1965-2, 1006, are hereby superseded.
SEC. 9. INQUIRIES.
Inquiries regarding this Revenue Procedure should refer to its number and be addressed to the office of the appropriate Assistant Regional Commissioner Alcohol, Tobacco and Firearms.
26 U.S.C. 7805; 26 CFR 601.301
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SECTION 1. PURPOSE.
This Revenue Procedure establishes the procedure to be followed when tobacco articles are transferred in bond to or between export warehouses or are returned to a factory from an export warehouse and part of the shipment is delayed and later delivered to the consignee.
SEC. 2. BACKGROUND.
Occasionally proprietors of export warehouses receive shipments of tobacco articles from factories or other export warehouses and find the shipment is incomplete in relation to the quantities shown on the covering Form 2149 or 2150. Manufacturers may also occasionally receive incomplete shipments of tobacco articles being returned to factories from export warehouses. The regulations in 26 CFR 290.200 and 290.201 require that immediately upon receipt of a shipment the person receiving the shipment (consignee) shall execute the certificate of receipt on each copy of the notice of removal, noting thereon any discrepancy, and return one copy of the notice to the person who made the shipment (consignor). In some instances the missing articles are later delivered to the consignee.
SEC. 3. TRANSFER TO EXPORT WAREHOUSE.
.01 When tobacco articles which have been delayed during a transfer in bond are delivered to an export warehouse after the proprietor has received part of the shipment and properly disposed of the covering Form 2149 or 2150, he will enter in his records and on his record copy of the covering Form 2149 or 2150 the quantities of articles so received and the actual date of receipt. He shall also prepare a letter, in original and three copies, to the consignor informing him of the receipt. All copies of the letter should be signed and it should identify, by serial number and date, the Form 2149 or 2150 covering the shipment from which the articles were delayed, specify the kind and quantity of articles belatedly received, and give the date of actual receipt. The original and one copy of the letter should be sent to the consignor, one copy should be submitted with the proprietor's monthly report for the month in which the delayed articles were received, and the remaining copy retained by the proprietor as part of his record. .02 When the consignor receives the two copies of the letter he should send the original to his assistant regional commissioner to obtain relief from the tax liability on the articles accounted for (or submit it with a claim if the tax has been paid or assessed), and associate the remaining copy of the letter with the related Form 2149 or 2150 and retain it as part of his records.
SEC. 4. RETURN TO FACTORY.
.01 When the delayed portion of a shipment of tobacco articles being returned from an export warehouse is delivered to a factory after the manufacturer has received part of the shipment and properly disposed of the covering Form 2150, he will enter in his records and on his record copy of the covering Form 2150 the quantities of articles so received and the actual date of receipt. He shall also prepare a letter, in original and two copies, to the export warehouse proprietor informing him of the receipt. All copies of the letter should be signed and it should identify, by serial number and date, the Form 2150 covering the shipment from which the articles were delayed, specify the kind and quantity of articles belatedly received, and give the date of actual receipt. The original and one copy of the letter should be sent to the export warehouse proprietor, and the remaining copy should be retained by the manufacturer as part of his records.
.02 Upon receipt of the two copies of the letter the export warehouse proprietor should forward the original to his assistant regional commissioner to obtain relief from the tax liability on the tobacco articles accounted for (or submit it with a claim if the tax has been paid or assessed), and associate the remaining copy of the letter with the related Form 2150 and retain it as part of his records.
SEC. 5. INQUIRIES.
Inquiries regarding this Revenue Procedure should refer to its number and be addressed to the office of your Assistant Regional Commissioner, Alcohol, Tobacco and Firearms.
26 U.S.C. 5704; 26 CFR 601.311
SECTION 1. PURPOSE.
This Revenue Procedure expresses procedures which may be followed by proprietors of export warehouses at international airports when tobacco articles are sold to passengers of aircraft departing for destinations outside the United States.
SEC. 2. BACKGROUND.
Section 5704 of the Internal Revenue Code of 1954 provides that an export warehouse proprietor may remove tobacco articles, without payment of tax, for consumption beyond the jurisdiction of the internal revenue laws of the United States. Regulations in 26 CFR 290.198 require that the export warehouse proprietor prepare a notice of removal, Form 2150, for each shipment removed from his warehouse. In connection with sales to airline passengers this requires that a separate Form 2150 be prepared for each shipment of tobacco articles sold to each passenger. It is reasonable that an alternate procedure should be established which would be in compliance with the intent of regulations and afford equivalent security to the revenue, but would not require a separate Form 2150 for each passenger. Therefore, after review and concurrence of his assistant regional commissioner (alcohol, tobacco and firearms), an export warehouse proprietor making such removals may follow the procedures in Section 3 below which the Director, Alcohol, Tobacco and Firearms Division, finds in compliance with the intent of law and regulations.
SEC. 3. ACCEPTABLE PROCEDURES
.01 Sales slips and lading receipts. The export warehouse proprietor will prepare a separate sales slip for each sale of tobacco articles. The minimum information which must be included on the sales slip is a pre-printed serial number; a list of the articles sold; the name of the passenger; and identity of the flight by airline name (or abbreviation), flight number, and date. A lading receipt on which all sales slips for a flight are itemized will be prepared by the proprietor and presented to the purser or other appropriate aircrew member, who will certify that the tobacco articles were received on board and that delivery to the passengers will not be made until the aircraft has left the territorial limits of the United States. The lading receipt may or may not be certified by a customs officer, depending on local Customs' requirements. The needs of Customs and the airline companies will be considered in determining the numbers of copies and disposition of sales tickets and lading receipts.
.02 Other responsibilities of proprietor. The purchaser must be clearly informed that the tobacco articles are for consumption outside the United States and if returned to the United States must be declared to Customs and are subject to duty or tax. This may be accomplished by a conspicuous statement on a copy of the sales slip furnished the passenger, or by some other method acceptable to Customs and the assistant regional commissioner (alcohol, tobacco and firearms). If a flight does not depart or is diverted or returns without reaching a destination outside the United States the proprietor is responsible for recovering and returning the unexported tobacco articles to his warehouse.
.03 Notice of removal, Form 2150. Notice of removal, Form 2150, may be prepared daily, weekly, or semi-monthly on the basis of the lading receipts executed during the removal period. The frequency of preparation of Forms 2150 will be dictated by the volume of operations and administrative convenience to all concerned. If the Form 2150 is prepared weekly and any week overlaps two months, a separate Form 2150 must be filed for removals during that portion of the week falling in each of the months. The Form 2150 will be prepared in triplicate and presented to Customs for execution of the certificate of export. The original completed form will be immediately submitted to the assistant regional commissioner (alcohol, tobacco and firearms), one copy will be furnished to Customs, and one copy will be retained by the proprietor.
.04 Acceptance of procedures to Customs and assistant regional commissioner (alcohol, tobacco and firearms). Procedures which an export warehouse proprietor wishes to establish in accordance with the foregoing criteria must be acceptable to the appropriate local customs officer as evidenced by his written consent. Specifics of the proposed procedures must also be approved in all respects by the assistant regional commissioner (alcohol, tobacco and firearms) before the proprietor begins operating under the procedures.
SEC. 4. ALTERNATE PROCEDURES.
The export warehouse proprietor may not use procedures other than those specifically set forth in 26 CFR Part 290 or conforming to this Revenue Procedure unless they are approved by the Director, Alcohol, Tobacco and Firearms Division, as provided in 26 CFR 290.72 relating to authorizations for alternate methods or procedures. Those proprietors who already have such specific authorizations may continue to operate as approved therein.
SEC. 5. INQUIRIES.
Inquiries concerning this Revenue Procedure should refer to its number and be addressed to the office of the appropriate assistant regional commissioner (alcohol, tobacco and firearms).
26 U.S.C. 5704; 26 CFR 601.311
SECTION 1. PURPOSE.
The purpose of this Revenue Procedure is to prescribe procedures for obtaining information relating to water quality consideration as a part of applications for licenses or permits issued by Assistant Regional Commissioners, Alcohol, Tobacco and Firearms.
SEC. 2. BACKGROUND.
.01 Section 21(b)(1) of the Federal Water Pollution Control Act, as amended (33 U.S.C. 1171(b)), provides in effect that any applicant for a Federal license or permit (or any type of authorization which "permits" an operation under Internal Revenue laws) to conduct any activity which may result in any discharge into the navigable waters of the United States shall obtain a certification from the State in which the discharge originates that there is reasonable assurance that such activity will be conducted in a manner which will not violate applicable water quality standards.
.02 Regulations 18 CFR Part 615, State Certification of Activities Requiring A Federal License or Permit, (36 F.R. 8563) implementing section 21(b) of the Act provide that the licensing or permitting agency shall require that an applicant for a license or permit include in the form of the application, information relating to water quality considerations.
.03 The Alcohol, Tobacco and Firearms Division of the Internal Revenue Service has developed Form 4805, Supplemental Information on Water Quality Considerations Under 33 U.S.C. 1171(b), which is to be completed by the applicant and submitted with and as a part of his application for license or permit. The information provided for on the form will meet the requirements of section 21(b) of the Act and the regulations issued thereunder as to water quality considerations.
SEC. 3. OBTAINING FORMS 4805.
Form 4805 will be furnished each applicant by the Assistant Regional Commissioner, Alcohol, Tobacco and Firearms, along with the license or permit application form requested.
SEC. 4. FILING FORM 4805.
.01 The applicant will prepare an original and four copies of Form 4805 and submit all of them as an attachment to and as part of his application for a license or permit.
.02 Form 4805 will contain an authorization, to be signed by the applicant, that copies of the form may be furnished to the applicable State water quality agency and the Regional Administrator, EPA.
SEC. 5. INQUIRIES.
Inquiries regarding this Revenue Procedure should refer to its number and be addressed to the office of the appropriate Assistant Regional Commissioner, Alcohol, Tobacco and Firearms.
26 U.S.C. 5171, 5271, 5401, 5502, 5511; 26 CFR 601.301
SECTION 1. PURPOSE.
This Revenue Procedure sets out procedures for furnishing environmental information concerning proposed activities for which applications, notices, bonds, and formulas (hereinafter referred to as applications) are filed with the Internal Revenue Service, Alcohol, Tobacco and Firearms Division.
SEC. 2. BACKGROUND.
.01 The National Environmental Policy Act of 1969 (NEPA), 83 Stat. 852, 42 U.S.C. 4321, established national policy, goals, and procedures for protecting and enhancing the environment. The Act applies to all Federal departments and agencies and requires an analysis of the environmental consequences of proposed major Federal actions which might have a significant effect on the environment.
.02 NEPA further requires that all Federal agencies prepare a detailed statement of the environmental impact for every major Federal action which the agency concludes could significantly affect the environment. The President's Council on Environmental Quality issued Guidelines which set forth procedures to be followed by Federal agencies in implementing NEPA. Within these Guidelines, projects and continuing activities involving Federal licenses, permits, leases, certificates or other entitlements for use such as those administered by the Alcohol, Tobacco and Firearms Division, have been determined to be in that category of major Federal actions that may require preparation of environmental statements.
.03 Regarding proposed activities for which licenses, permits, authorizations, rulings or approvals are required, the Service must, to fulfill its responsibilities under NEPA, have information concerning the environmental effect of the proposed activity to determine the need for preparation of environmental statements. Therefore, it will usually be necessary for applicants to submit this information.
SEC. 3. ACTIONS WHICH MAY REQUIRE ENVIRONMENTAL STATEMENTS.
.01 Internal Revenue Service actions which may have a significant adverse effect on the environment and therefore require preparation of environmental statements include, but are not limited to, the following Alcohol, Tobacco and Firearms actions:
1. The issuance of licenses and permits, including:
a. Permits under Chapter 51 (other than withdrawal permits) and permits under Chapter 52, I.R.C.
b. Permits under Section 4 of the Federal Alcohol Administration Act (27 U.S.C. 204).
c. Licenses under Chapters 40 and 44 of title 18 U.S.C.
2. The approval of authorizations which "permit" the operation of an activity under Internal Revenue laws, including but not limited to:
a. Form 27-C, Brewer's Notice.
b. Form 27-F, Registration of Vinegar Plant.
c. Form 27-G, Registration of Volatile Fruit-Flavor Concentrate Plant.
d. Form 1676, Bond Covering Removal to an Use of Wine at Vinegar Plant.
e. Form 2102, Bond-Manufacturer of Cigarette Papers and Tubes.
f. Form 4328, Notice of Intent to Manufacture Liquor Bottles, and Assignment of Manufacturer's Number.
g. Letter applications for operation of experimental or pilot plants.
3. The approval of special applications and formulas, and issuance of letter rulings, by the Alcohol, Tobacco and Firearms National or Regional Offices. This would not, however, include "notices" submitted if approval by ATF is not required for the operation covered by the notice.
4. Any further action by the Service after the original issuance or approval under 1, 2 or 3 above, such as renewal, amendment, or reissuance.
.02 If the activities contemplated under 3.01 above would have a significant adverse effect on the environment as a consequence of the Service's action, the Service is required to prepare an environmental impact statement. A proposed activity would be considered to significantly affect the environment when it would, for example:
1. Lead to a noticeable change in the ambient noise level for a substantial number of people, or significantly contribute to congestion.
2. Divide or disrupt an established community as to its physical, social, historical, cultural, or natural aspects.
3. Have a significant adverse aesthetic or visual effect.
4. Destroy or derogate from important recreational areas, places of unique interest or scenic beauty.
5. Substantially alter the pattern of behavior of a nonhuman species.
6. Interfere with important breeding, nesting, or feeding grounds.
7. Lead to a significant increase in air or water pollution in a given area.
8. Disturb the ecological balance of a land or water area.
9. Involve a reasonable possibility of contamination of a public water supply source, treatment facility, or distribution system.
SEC. 4. REQUIREMENT FOR FORM 4871.
Persons filing applications, notices, registrations, or bonds for licenses, permits, or authorizations, such as those listed under items 1 and 2 of 3.01 above, should furnish environmental information with their applications by attaching an original and one copy of Form 4871, Environmental Information. When specifically requested by the Assistant Regional Commissioner, Alcohol, Tobacco and Firearms, or the Director, Alcohol, Tobacco and Firearms Division, persons filing special applications, requests for rulings, or formulas, as covered in items 3 and 4 of 3.01 above, should also prepare and submit Form 4871 in original and one copy. In most instances, and applicant for special authorization or ruling can avoid unnecessary delay and preparation of Form 4871 if a request adequately described any effect on the environment of the proposed activity.
SEC. 5. ACTION WHEN ENVIRONMENTAL STATEMENT IS REQUIRED.
If the Assistant Regional Commissioner, Alcohol, Tobacco and Firearms, or the Director, Alcohol, Tobacco and Firearms Division, determines that a proposed activity would significantly affect the environment, he is required by NEPA to prepare an environmental impact statement. The responsible official will request applicants to furnish any additional information regarding the environmental effects of the proposed activity necessary for preparation of the environmental statement. The statement will be prepared, circulated, and made available to the public in accordance with the Guidelines of the Council on Environmental Quality.
SEC. 6. TIMELY FILING OF ENVIRONMENTAL INFORMATION.
It is extremely important that applications, Forms 4871, and any other necessary environmental information be submitted by the applicant as early as possible. The Service is required by NEPA to consider the environmental effects of a proposed action prior to issuance of any license, permit, authorization or other entitlement. If an environmental statement is necessary the time required for preparation, circulation, and public notice may cause considerable delay in final action on the application. The minimum time between receipt of application and final action after statements are prepared will be about 120 days, and longer periods should usually be expected.
SEC. 7. INQUIRIES.
Any inquiries regarding this Revenue Procedure should refer to its number and be addressed to the office of the appropriate Assistant Regional Commissioner, Alcohol, Tobacco and Firearms.
18 U.S.C. 843, 923; 26 U.S.C. 5008, 5703; 27 U.S.C. 204; 26 CFR 601.301
SECTION 1. PURPOSE.
The purpose of this ATF Procedure is to announce that the enzymatic method is an authorized test procedure for determining the amount of carbon dioxide added to or retained in still wines under the provisions of 26 CFR 240.531 and 240.534.
SEC. 2. BACKGROUND.
Public Law 85-859 amended 26 U.S.C. 5041(a) to provide that a limited quantity of carbon dioxide may be added to or retained in still wines. 26 CFR 240.534 provides that the Director, Bureau of Alcohol, Tobacco and Firearms may prescribe test methods for determining the carbon dioxide content of still wines. Revenue Procedure 59-33, C.B. 1959-2, 953 (Internal Revenue), authorized two procedures, the manometric method and the volumetric (referred to in that Revenue Procedure as the "Gasometric Procedure" and the "Titrimetric Procedure").
SEC. 3. THE ENZYMATIC METHOD.
The Director, Bureau of Alcohol, Tobacco and Firearms has determined that the enzymatic method is an acceptable test procedure for determining the amount of carbon dioxide retained in or added to still wines. Any of the three methods -- the enzymatic method, the manometric method, or the volumetric method -- may be used to determine the carbon dioxide content of still wines. As a matter of convenience, all three procedures are described in detail in section 4. Except for minor editorial changes, these procedures are the same as those appearing on pages 189-191 of the Eleventh Edition of the Official Methods of Analysis, published by the Association of Official Analytical Chemists, Washington, D.C.
SEC. 4. DESCRIPTION OF TEST PROCEDURES
.01 Manometric method
1. Reagents
(a) Sodium bicarbonate standard solutions.--Dry 150-200 grams NaHCO3 over H2SO4 for 24 hours. Weigh designated amounts of dried NaHCO3, transfer to 1 liter volumetric flasks with approximately 700 milliliters recently boiled H20, and add 15 milliliters NaOH solution, (c). Add 200 milliliters absolute alcohol, mix, cool, and dilute to volume with boiled H20. Use 4.2955 grams for 255 milligrams CO2/100 milliliters standard; 4.7727 grams for 250; 5.2500 grams for 275; and 5.7273 grams for 300.
(b) Hydrogen peroxide solution.--10%. Dilute 20 milliliters 30% H2O2with 40 milliliters recently boiled H2O.
(c) Sodium hydroxide solution. -- 50%. Transfer 763 grams reagent grade NaOH pellets to 1 liter Pyrex graduated cylinder, add recently boiled H2O, cool, and dilute to 1 liter. Mix until solution is complete and set aside at least 5 days until Na2CO3 settles, leaving clear solution.
2. Apparatus
(a) Carbon dioxide apparatus.--Volume of system is approximately 350 milliliters (Available from New York Laboratory Supply Co. and Scott Labs, Inc., 860 South 19 Street, Richmond, California 94804). Test all glass joints with vacuum tester after evacuation.
(b) Vacuum tester. -- High frequency self-contained generator operated from 115 volt ac outlet. Consists of adjustable interrupter, vibrating spark gap, condenser, resonator coil, and gap tip.
(c) Magnetic Stirrer with Teflon stirring bar.--Fisher Flexa-Mix or equivalent with stirring bars 1-1 3/8" long.
(d) Vacuum pump. -- Welch Dist-O-Pump or equivalent, with motor, single stage, vented exhaust; to be operated with vented exhaust valve open for pumping condensable vapors. Insert 3-way stopcock between pump and apparatus to allow air to enter system. Ordinary high vacuum pump can be used if H2SO4 trap with 3-way stopcock is inserted between pump and apparatus. Change acid frequently.
(e) Silicone grease, high vacuum type. -- Stable to heat and contains no carbon-to-carbon linkages. Grease may be removed from glassware with Varsol or hot kerosene.
3. Calibration of Vacuum system
Pipet 50 milliliters standard NaHCO3 solution and 3 milliliters 10% H2O2 solution into reaction flask, and carefully grease joints. Start magnetic stirrer and evacuate system approximately 1 minute. Close system to pump at 3-way stopcock, gently tap Hg columns, and read manometer to nearest 0.5 mm to obtain initial reading. Hg levels should remain constant; changes indicate leak, probably caused by insufficient grease at joints.
Add 10 milliliters H3PO4 and continue rapid stirring 5 minutes. Gently tap Hg columns and read total pressure in centimeters Hg to nearest 0.5 mm to obtain final reading.
Record gas temperature in oC.
Open 3-way stopcock on apparatus to pump. Then slowly open 3-way stopcock between pump and apparatus to let air flow into system. Disconnect apparatus and thoroughly wash inner portion of acid dispensing unit and reaction flask. Rinse with acetone and dry with suction.
Determine total pressure from each NaHCO3 standard solution in triplicate and calculate average volume of system as follows:
From final pressure reading in centimeters Hg, subtract initial reading and vapor pressure increase due to H3PO4 effect as given in table:
| Percent Alcohol | Vapor Pressure, centimeters increase due to H3PO4 |
| 0 | 0.67 |
| 5 | 0.68 |
| 10 | 0.69 |
| 15 | 0.75 |
| 20 | 0.77 |
| 25 | 0.77 |
| 50 | 1.00 |
| 75 | 1.53 |
| 100 | 2.80 |
Then V = 76RTg/MP, where V is system volume in liters; R is gas constant in liter-atmospheres /degree /mole, 0.08205; T is absolute temperature, 273 + room temperature in 0C; g is grams CO2 in 50 milliliter sample; M is molecular weight of C02 in grams; and P is corrected pressure of CO2 in centimeters Hg.
Calculate correction for Hg displaced in manometer tubing, V = p r2L/2, where L is difference in height of column in centimeters and r is radius of manometer tubing.
Calibrated volume of system, Vo=V-Vm.
In calculating weight CO2 in sample, Hg displaced in tubing, Vm, is added to calibrated volume of system, Vo.(V=Vo+Vm)
4. Preparation of Sample
Chill unopened bottle of wine in ice-salt bath to slightly below 32oF (30 minutes for 1/10 gallon bottle and 1 hour for 1/5). Open bottle and rapidly add 1.5 milliliters 50% NaOH solution for each 100 milliliters of wine. Quickly close bottle with rubber stopper, remove from bath, and shake several minutes. Let contents come to room temperature.
5. Determination
Pipet 50 milliliters sample and 3 milliliters 10% H2O2 into reaction flask, carefully grease joints, and proceed as in Calibration of Vacuum System.
From total pressure in centimeters Hg, subtract vapor pressure of alcohol-H2O and pressure due to H3PO4 effect. Calculate grams CO2/100 milliliters wine = 14.327PV/T.
.02 Volumetric method
1. Reagents
(a) Sodium hydroxide standard solution--0.25N. Prepare according to instructions in Appendix, using phenolphthalein-thymolphthalein indicator. Restandardize daily against standard HCl, (b), in presence of 5 milliliters BaCl2 solution, (c), and indicator (e).
(b) Hydrochloric acid standard solution.--O.25N. Standardize against standard NaOH, (a), using indicator (e).
(c) Barium chloride solution.--Dissolve 60-65 grams BaCl2· 2H2O in 1 liter H2O and neutralize to phenolphthalein.
(d) Acid phosphate solution.--Dissolve 20 grams NaH2PO4· H2O in H2O, add 3 milliliters H3PO4, and dilute to 100 milliliters.
(e) Phenolphthalein - thymolphthalein mixed indicator.--Dissolve 1 gram phenolphthalein and 0.5 gram thymolphthalein in 100 milliliters alcohol.
2. Apparatus
Connect 500 milliliter special distilling flask (rubber stopper and ordinary distilling flask may be used) through approximately 8 mm glass tubing to series of 3 Pyrex test tubes, 25 X 200 mm, each fitted at inlet with gas dispersion tube with 12 mm fritted end of coarse porosity and 8 mm stem (Fisher No. 11-138 or equivalent). Connect final exit tube to trapped vacuum line or filter pump.
3. Determination
Connect apparatus and place test tube receivers in beaker of H2O at below 27oC. Pipet 20 milliliters standard 0.25N NaOH into first 2 receivers and 10 milliliters 0.25N NaOH and 10 milliliters BaCl2 solution into third.
Prepare sample as in Manometric Procedure above.
Pipet 50 milliliters of the alkaline wine into distilling flask an add 3 milliliters 10% H2O2 (See .01, 1. (b)). Add boiling chips (not marble). Attach vacuum line to last receiver and slowly increase vacuum until bubbling practically stops; then open vacuum line fully. (This keeps system under partial vacuum so that stoppers will not be blown out on heating by sudden surge of steam or CO2.) Add approximately 35 milliliters acid phosphate solution to dropping funnel and carefully admit approximately 30 milliliters into distilling flask. Agitate flask gently to mix acid and sample.
Heat gently and when CO2 evolution slows, heat vigorously. After a few milliliters of liquid distills and top of first receiver is warm, all CO2 will have been driven into receivers. Close vacuum line between trap and receivers and slowly admit air through dropping funnel until pressure equilibrium is reached.
Transfer contents and rinsings of first 2 receivers and dispersion tubes into titration flask. (Also add contents of third if BaC03 has precipitated.) Add 50 milliliters BaCl2 solution and titrate with standard HCl to phenolphthalein end point.
Weight C02 in grams/100 milliliters = [(ml. NaOH X normality) - (ml. HCl X normality)] X 0.022 X 1.015 X (100/50)
.03 Enzymatic method
1. Reagent
Carbonic anhydrase solution.--Prepare aqueous solution containing approximately 1 milligram enzyme /milliliter. This solution is stable approximately 2 weeks in refrigerator.
2. Determination
Cool sample to OoC. or less, so that it can be pipetted without loss of CO2. Gently mix by inverting bottle several times. With automatic 25 or 30 milliliter pipet with Teflon stopcock, dispense aliquot of 0.1N NaOH into beaker. Rinse 20 milliliter pipet with sample to prevent warming sample with possible loss of CO2. Pipet sample with tip submerged just below surface of NaOH in beaker. Add 3-4 drops enzyme, and place beaker under glass and calomel electrodes. (Beckman 41263 and 40463 are satisfactory.) Titrate to pH 8.45 with 0.1N H2SO4 from 5 milliliter buret graduated in 0.01 milliliter.
To correct for presence of acids other than H2CO3, place 50 milliliters wine in 500 milliliter heavy-walled flask at room temperature and agitate 1 minute under vacuum of approximately 27". Titrate 20 milliliters to pH 7.75 with 0.1N NaOH as above. Subtract milliliters used from that used in first titration. Calculate as follows: [(Net milliliters NaOH X normality) - (milliliters H2SO4 X normality)] X 100 X 44 /milliliters sample = milligrams CO2 /100 milliliters wine.
.04 Appendix: Standardization of Sodium Hydroxide Using Potassium Hydrogen Phthalate
1. Apparatus
Use buret and pipet calibrated by National Bureau of Standards or by analyst. Protect exists to air of automatic burets from CO2 contamination by suitable guard tubes containing soda-lime. Use containers of alkali-resistant glass.
2. Reagents
(a) Carbonate-free water.--Prepare by one of following methods: (1) Boil H2O 20 minutes and cool with soda-lime protection; (2) bubble air, freed from CO2 by passing through tower of soda-lime, through H2O for 12 hours.
(b) Sodium hydroxide solution.--(1 + 1). To 1 part NaOH (reagent quality containing less than 5% Na2C03) in flask add 1 part H20 and swirl until solution is complete. Close with rubber stopper. Set aside until Na2CO3 has settled, leaving perfectly clear liquid (approximately 10 days).
(c) Acid potassium phthalate.--National Bureau of Standards Standard Sample for Acidimetry 84. Crush to pass Number 100 sieve. Dry 2 hours at 120o. Cool in desiccator containing H2SO4.
3. Preparation of Standard Solution
Following table gives approximate quantities of NaOH solution (1 + 1) necessary to make 10 liters of standard solutions:
| Approximate normality | Milliliters NaOH to be diluted to 10 liters |
| 0.01 | 5.4 |
| 0.02 | 10.8 |
| 0.10 | 54.0 |
| 0.50 | 270.0 |
| 1.0 | 540.0 |
Add required quantity of NaOH (1 + 1) to 10 liters CO2-free H2O. Check normality, which should be slightly high, and adjust to desired concentration by following formula: V1=V2xN2/N1, where N2 and V2 represent normality and volume of the stock solution, respectively, and V1, the volume to which stock solution should be diluted to obtain desired normality, N1. Standardize final solution by the following procedure:
Accurately weigh enough dried KHC8H4O4 to titrate approximately 40 milliliters and transfer to 300 milliliter flask that has been swept free from CO2. Add 50 milliliters cool C02-free H20. Stopper flask and swirl gently until sample dissolves. Titrate to pH 8.6 with solution being standardized, taking precautions to exclude C02 and using as indicator either glass-electrode pH meter or 3 drops of phenolphthalein. In latter case, determine end point by comparison with pH 8.6 buffer solution, containing 3 drops of phenolphthalein. Determine volume of NaOH required to produce end point of blank by matching color in another flask containing 3 drops of phenolphthalein and the same volume of CO2-free H2O. Subtract the volume required from that used in the first titration and calculate normality.
grams KHC8H404 X 1000
Normality = --------------------------
milliliters NaOH X 204.229
SEC. 5. EFFECT ON OTHER DOCUMENTS. This ATF Procedure supersedes Revenue Procedure 59-33, C.B. 1959-2, 953 (Internal Revenue).
SEC. 6. INQUIRIES.
Inquiries regarding this ATF Procedure should refer to its number and be addressed to the appropriate Regional Director, Bureau of Alcohol, Tobacco and Firearms.
26 CFR 601.301: IMPOSITION OF TAXES, QUALIFICATION REQUIREMENTS, AND REGULATIONS. (Also 240.534)[26 U.S.C. 240.534 recodified as 27 CFR 24.245]
Revenue Procedure 59-33 superseded. [See also ATF procedurs 77-2 and 83-2]
(Synopsis)
Tobacco Tests. Methods used by ATF to determine if specific reconstituted tobacco material is acceptable as a cigar wrapper, and to determine if a product wrapped in such material is a cigar or cigarette for tax purposes are described. (Superseded in part by ATF Proc. 76-2 )
26 CFR 270.11, 275.11, and 601.301.
(Synopsis)
Reciprocal Privileges for Iceland and Jordan. Iceland and Jordan are added to the list of foreign countries to which the reciprocal privileges provided by section 309 of the Tariff Act of 1930, as amended (19 U.S.C. 1309), may be extended. Alcohol, distilled spirits, beer, and wine may be withdrawn free of tax, or with benefit of drawback, for use as supplies on aircraft registered in Iceland and Jordan and engaged in foreign trade.
26 CFR 601.301, 252.23.
(Synopsis)
Removal of Tax-Exempt Tobacco Products for Use as Supplies on U.S. Navy Ships. Manufacturers of tobacco products and proprietors of tobacco export warehouses may accept the certification of the commanding officer or supply officer for procurement of tax-exempt tobacco products for listed classes (generally excludes harbor craft) of U.S. Navy ships on orders to proceed beyond the jurisdiction of the internal revenue laws of the United States. The proper certification is as follows:
These tobacco products will be held as sea stores for issue and consumption outside the three-mile limits of the United States.
Commanding Officer
(or Supply Officer of a listed vessel)
26 CFR 290.64, 290.206, 601.311.
(Synopsis)
Method for Sequential Solvent Extractions Used in Differentiating Cigars and Cigarettes. The sequential solvent extraction method used by ATF to differentiate between a cigar or cigarette for tax purposes is described. (ATF Proc. 73-5 superseded in part
26 CFR 270.11, 275.11, 290.14, 290.15, 295.11, and 601.311.
Section 1. Purpose.
This ATF Procedure sets forth the position of the Bureau of Alcohol, Tobacco and Firearms (ATF) with regard to the possible use of plastic containers for bottling distilled spirits and provides procedural guidelines for affected industries.
SEC. 2. BACKGROUND.
.01 The concept of utilizing plastic for manufacturing liquor bottles is not new. Several years ago an experimental packaging and marketing program was authorized for distilled spirits plant proprietors who proposed to bottle distilled spirits in polyvinyl chloride (PVC) plastic bottles. The experimental program was terminated, however, on May 11, 1973 (Industry Circular 73-10), as a result of a Food and Drug Administration (FDA) proposal that PVC resin not be used as a component of food packaging material where such material would come in contact with alcoholic foods. Since that time, there has been no authorization given to package distilled spirits in plastic containers of any kind.
.02 ATF is aware of a renewed interest on the part of the distilled spirits industry regarding the development and acceptability of a plastic liquor bottle. Over the past few years, plastics technology has progressed to the point that plastic barrier resins other than PVC may now be capable of meeting FDA requirements for alcoholic beverage packaging. It is conceivable, therefore, that rigid or semirigid containers manufactured with one or more of these plastic resins may ultimately be considered feasible by the industry for packaging distilled spirits products.
SEC. 3. PRIMARY CONSIDERATIONS.
.01 No action will be taken by the Bureau with regard to industry applications for the use of plastic liquor bottles until the following conditions and considerations have been appropriately taken into account:
1. Bottle Specifications
(a) Bottles must be rigid or semirigid, i.e., having a molded shape or design which cannot be permanently altered by pressure without damage to the bottle.
(b) The plastic compound must be approved by the Food and Drug Administration for use in containers for packaging alcoholic beverage products for human consumption. Written verification from FDA will be required to assure that the plastic formulation meets all applicable FDA requirements.
(c) Bottles must be manufactured only in approved sizes.
2. Laboratory Tests
The ATF laboratory will conduct tests of plastic bottles regarding their suitability for packaging distilled spirits. These tests will take into consideration proof gain or loss, volume reduction, and other parameters.
3. Environmental Assessments
Under the National Environmental Policy Act of 1969, we are required to consider the environmental impacts of any major action taken by the Bureau. In addition to the Environmental Impact Statement which was issued regarding the proposed PVC liquor bottles, there will be a need for further studies into the environmental aspects of other plastics prior to our taking any action regarding their proposed use in the manufacture of liquor bottles. Environmental Impact Statements pertaining to liquor bottles proposed to be manufactured with other plastic formulations may have to be prepared and issued before a decision can be reached.
SEC. 4. BUREAU PROCEDURE.
.01 Preliminary Testing Program
The Bureau has no objection to the experimental use of plastic liquor bottles for shelf testing, organoleptic research, or other applicable tests conducted under laboratory conditions. Such tests shall utilize samples withdrawn in accordance with 27 CFR Part 201 and may not involve distribution of distilled spirits packaged in plastic containers to consumers in any way. Test results may be provided to the Bureau to assist the ATF laboratory in its analysis of the plastic material.
.02 Application for Approval
Any authorized bottler or importer desirous of seeking permanent approval to package distilled spirits in plastic containers for distribution will be required to submit a formal letter application to the Director. Verification must be provided with this application that the plastic compound in question meets all applicable FDA requirements for alcoholic beverage packaging. Any extractive and toxicity data received in support of this verification will be subject to confirmation by the Food and Drug Administration. Applicants should also furnish any available environmental information regarding the plastic formulation to the Bureau as an aid in the preparation of any Environmental Assessments that may have to be prepared. This information may be submitted with, or at any time prior to, the formal application.
.03 Samples
Samples of plastic containers shall be made available to the Bureau before an application may be considered. Such samples may be submitted with the formal application or in conjunction with any preliminary testing program. The samples submitted should include at least six empty plastic bottles of each size to be used, two filled plastic bottles of each distilled spirits product and two filled glass bottles of each product for purposes of control and comparison.
.04 Final Action
We anticipate that satisfying the foregoing requirements will be a time-consuming task. Therefore, we feel that a final decision on any formal application could not be made in the near future.
SEC. 5. INQUIRIES.
Inquiries concerning this procedure should refer to its number and be addressed to the Assistant Director, Regulatory Enforcement, Bureau of Alcohol, Tobacco and Firearms, 1200 Pennsylvania Avenue, NW., Washington, DC 20226.
A test procedure using an infrared spectrophotometer is an acceptable test procedure for the determination of the amount of carbon dioxide added to or retained in still wine. ATF Proc. 73-1 amplified.
SECTION 1. PURPOSE.
The purpose of this ATF Procedure is to announce that a test procedure using an infrared spectrophotometer is authorized for determining the amount of carbon dioxide added to, or retained in, still wines under the provisions of 27 CFR 240.531 and 240.534.
SEC. 2. BACKGROUND
Public Law 85-859 amended 26 U.S.C. 5041(a) to provide that a limited quantity of carbon dioxide may be present in still wines. 27 CFR 240.534 provides that the Director, Bureau of Alcohol, Tobacco and Firearms, will announce the test procedures authorized for determining the carbon dioxide content in such wine. Revenue Procedure 59-33, 1959-2 C.B. 953 (Internal Revenue), -- which was subsequently superseded by ATF Proc. 73-1 -- authorized the manometric and volumetric methods. ATF Procedure 73- 1, 1973 ATF C.B. 108, added the enzymatic method of testing to those methods previously authorized and described all three procedures in detail. Except for minor editorial changes, the procedures are the same as those appearing in the Twelfth Edition of the Official Methods of Analysis of the Association of Official Analytical Chemists, Washington, DC.
The Director is now authorizing the use of an infrared spectrophotometer for determining the C02 content in wines as follows:
SEC. 3.DETERMINATION OF C02 IN WINE BY INFRARED SPECTROPHOTOMETRY.
.01 Infrared Method
1. Apparatus
(a) A nondispersive infrared specrtophotometer
(b) An electronic intergrator --To be attached to the output of the infrared analyzer through a variable-voltage divider to permit readings to be made directly in desired units of C02 concentration.
.02 Procedure
The wine sample is brought to a pH 11 or greater with NaOH. A 15-microliter sample is injected into a reaction chamber partially filled with diluted sulfuric acid. Nitrogen is bubbled through the sulfuric acid solution to carry the evolved carbon dioxide into the nondispersive infrared analyzer.
.03 Results
Standard deviation, 4mg C02/100ml, comparable to results obtained by manometric, volumetric and enzymatic methods. Analysis time, 60 seconds. (For detailed description of the infrared method see, American Journal of Enology and Viticulture, Vol. 24, No. 3, pp 116-119, 1973.)
SEC. 4. EFFECT ON OTHER DOCUMENTS.
ATF Procedure 73-1, 1973 ATF C.B. 108, is hereby amplified.
SEC. 5. INQUIRIES.
Inquiries regarding this ATF Procedure should refer to its number and be addressed to the Assistant Director (Regulatory Enforcement), Bureau of Alcohol, Tobacco and Firearms, 1200 Pennsylvania Avenue, NW., Washington, DC 20226
27 CFR 240.534[recodified as 24.245]: TEST OF CARBON DIOXIDE IN STILL WINE
ATF Proc. 73-1 amplified. [see also ATF Proc. 83-2]
Section 1. Purpose.
This ATF Procedure establishes guidelines which tobacco export warehouse proprietors may follow in recording sales of tobacco products to persons crossing the United States border into Canada or Mexico when individual sales to such persons do not exceed 1000 cigarettes or 1000 cigars. These guidelines become effective February 16, 1981.
SEC. 2. BACKGROUND.
Section 5704, Title 26 of the United States Code, provides that an export warehouse proprietor may remove tobacco articles, without payment of tax, for consumption beyond the jurisdiction of the internal revenue laws of the United States. Regulations in 27 CFR 290.198 require that the export warehouse proprietor prepare Form 2150, Notice of Removal of Cigars, Cigarettes, Cigarette Papers, or Cigarette Tubes, for each shipment removed from his warehouse.
Revenue Procedure 72-27 provided an alternative to this requirement by authorizing the removals to be documented on sales slips with the daily summarization of the individual sales slips on a Form 2150, when the quantities purchased by an individual for his personal use did not exceed 400 cigarettes or 100 cigars in any calendar week, or when purchases did not exceed the quantity the purchaser was legally entitled to take into the country being entered without payment of duty or tax, whichever quantity was greater. All other transactions were considered to be commercial exportations and were subject to the provisions of 27 CFR 290.198, 290.199 and 290.205.
ATF Procedure 76-1 extended the authority to use sales slips as the basic documentation for smaller commercial transactions, by providing for documentation of the individual transactions on sales slips, and the consolidation of these transactions on a Form 2150, when individual sales did not exceed 4500 cigarettes or 1000 cigars. This extension of the authorized use of sales slips to document small commercial transactions was made at the request of several export warehouse operators, who said it would greatly reduce their paperwork, and at the same time facilitate Customs' certification of the transactions.
However, since ATF Procedure 76-1 was issued, the Bureau has revised the regulations in 27 CFR Part 290 to authorize Customs to require landing certificates for exportations to contiguous countries. (T.D. ATF-52, 43 F.R. 59286, December 19, 1978). This change was made because it was found that cigarettes which were ostensibly being entered into Mexico were in fact being retained in or returned to the United States. The United States Customs Service simultaneously changed its policy to require landing certificates for commercial exportations.
In order to combat abuses of the personal-use exportation privilege, Customs published Treasury Decision 79-1 (43 F.R. 59288, December 19, 1978), setting forth this change in policy regarding those exportations. Customs determined that 5 cartons of cigarettes (1000 cigarettes) are a quantity of cigarettes appropriate for normal personal use. Accordingly, proprietors of export warehouses along the United States-Mexican border were required to present landing certificates to confirm that purchases of more than 5 cartons of cigarettes (1000 cigarettes) are presented or declared through Mexican customs.
SEC. 3. CHANGES IN PROCEDURE.
In recognition of these changes and clarifications, ATF has concluded that it is no longer appropriate for official documentation of commercial exportations (more than 1000 cigarettes and 1000 cigars) to be made on sales slips. Such documentation of commercial transactions causes administrative difficulties for both ATF and Customs.
Accordingly, this procedure supersedes ATF Procedure 76-1 and discontinues the authority of export warehouse proprietors to officially document commercial exportations of tobacco products (more than 1000 cigarettes and 1000 cigars) on sales slips. Effective February 16, 1981, all of these commercial exportations must be properly documented on ATF Form 2150 as required by the regulations in 27 CFR 290.198, 290.199, and 290.205.
Within the newly prescribed limits for small exportations of tobacco products, this new ATF Procedure continues in effect essentially the same procedural requirements for documentation of individual small transactions by sales slips consolidated onto a single Form 2150. However, this new ATF Procedure provides alternative points for obtaining the purchaser's signature and recording license plate information on a sales slip.
All previous authorizations to operate under the procedures set out in Revenue Procedure 72-27 or Procedure 76-1 are herby cancelled effective February 16, 1981. Any previously approved alternate procedures other than those specifically based on either Revenue Procedure 72-27 or ATF Procedure 76-1 will continue in effect to the extent they apply to non-commercial type transactions (i.e., the sale of not more that 1000 cigarettes or 1000 cigars) and have not otherwise been terminated. Export warehouse proprietors are authorized to use the sales slip form of documentation for personal-use quantities (not more than 1000 cigarettes and 1000 cigars) as set forth in this procedure. No specific approval from ATF is required as long as these procedures are followed exactly.
SEC. 4. ACCEPTABLE PROCEDURES.
.01 Limitation of Procedures. A daily summarized Form 2150 may be prepared for reporting removals of cigars or cigarettes for exportation by individuals entering Canada or Mexico with not more than 1000 cigarettes or not more than 1000 cigars in any calendar day. The procedures for exportation in 27 CFR 290.198, 290.199 and 290.205 shall be followed, with a separate Form 2150 for each exportation, when the quantities exported are more than 1000 cigarettes or more than 1000 cigars in a calendar day. Any sale to an individual involving more than 1000 cigarettes or 1000 cigars per day must be documented on an individual Form 2150. If more than one sale is made to an individual during a day, the total of the sales that day are considered to be a single transaction.
An export warehouse proprietor may use multiple sales slips or invoices for recording components of a total sale involving 1000 or more cigarettes or cigars. However, the records and Customs certification for ATF purposes must be documented on an individual Form 2150 showing the total number of cigarettes and cigars involved in the transaction.
For example, if an individual on a given day makes three separate purchases of 1000 cigarettes (5 cartons) each from an export warehouse, the export warehouse proprietor may record the first sale of 1000 cigarettes on a sales slip, and that sale may be reported on the daily summarized Form 2150. The second and third sales must be recorded (A) on two separate Forms 2150 showing removal of 1000 cigarettes each, or, alternatively, (B) the second and third sales may be reported on a single Form 2150 showing the removal of 2000 cigarettes. The U.S. Customs Service will require the export warehouse proprietor to present a landing certificate with any Form 2150 submitted under (A) or (B).
.02 Preparation of Sales Slips. The export warehouse proprietor shall prepare a separate sales slip (original and 3 copies) for each daily sale of tobacco products totaling not more than 1000 cigarettes or 1000 cigars. The minimum information that must be included on the sales slip is (1) a pre-printed serial number, (2) the name and address of the purchaser, (3) the date of purchase, (4) a list of the products sold, (5) license plate identification of the vehicle in which the cigarettes and cigars are to be transported to Canada and Mexico, (6) signature of receipt by purchaser, (7) a space for certification of export by Customs, and (8) a conspicuous statement that the products are sold exempt from U.S. Federal tax for consumption outside the United States and that if such products are returned to the United States they must be declared to Customs and are then subject to duty or tax.
Item 5, the license plate identification, must be completed in all instances except those where the purchaser will carry the tobacco products over the border by foot. Item 5 is to be completed by the proprietor at the time of delivery of the articles to the purchaser. Alternatively, the license plate of the vehicle in Item 5 may be recorded on the sales slip at the point where the order is given. When license plate identification is recorded on sales slips at the point where the order is taken, the proprietor is responsible for verifying, and if necessary, correcting the license plate information at the point where the tobacco products are delivered to the purchaser. The proprietor is also responsible for assuring with reasonable certainty (by examining passports, drivers licenses, border crossing cards, etc.) that the purchaser's name and address, and all other information on the sales slip, are correct and complete.
.03 Distribution and Certification of Sales Slip. At the time of sale, the export warehouse proprietor shall furnish the purchaser with two copies of the sales slip. In addition, he shall attach one copy of the sales slip to the shipment of the tobacco products. The remaining copy will be retained by the proprietor at the export warehouse until the signed copy is returned to him after delivery of the tobacco products. When the shipment is delivered to the purchaser at the border, the purchaser will sign both the copy he surrenders to obtain delivery of the articles and the copy that will be furnished to the Customs officer who supervises the exportation. Alternatively, the purchaser may at the point where the order is given, sign an original and one copy of the sales slip, but no other copies; take the signed original and signed copy to the border crossing point; give them both to an employee of the export warehouse at the time the products and a copy of the sales slip are delivered to the purchaser.
The export warehouse employee making delivery of the tobacco products will visually determine the transporting vehicle's license number and the State, Province or country issuing such license and will record (or verify if recorded at the point of sale) the information on the two signed copies of the sales slip. The customs officer will receive one of the signed copies, as noted above, and the proprietor will retain the other as part of his records.
.04 Preparation and Disposition of Daily Summarized Form 2150. At the close of each business day a consolidated Form 2150 will be prepared, in triplicate. The form shall be marked to show that it is a consolidated form, and it shall include all the information called for by the form except items 6, 7, 8, 9, and columns (b) and (e) or item 12. At item 11 there shall be entered the words "as shown on individual sales slips," and the serial numbers of such individual sales slips shall be entered in column (a) of item 12. All copies will be submitted to the Customs officer at the border for execution of the certificate of export. After certification, the Customs officer will retain a copy and return the original and remaining copy to the warehouse proprietor. The proprietor will retain as part of his records the copy of the consolidated Form 2150 and the receipted copies of the related sales slips. He will transmit the original of the consolidated Form 2150 to the Regional Regulatory Administrator, Bureau of Alcohol, Tobacco and Firearms, no later than the close of the business day following the day the removals were made.
SEC. 5. ALTERNATE PROCEDURES.
The export warehouse proprietor may not use procedures other than those in 27 CFR Part 290 or as set forth in this ATF procedure unless they are approved by the Director, Bureau of Alcohol, Tobacco and Firearms, as provided in 27 CFR 290.72 relating to the authorizations for alternate methods or procedures. All previous authorizations for alternate methods or procedures under Revenue Procedure 72-27 and ATF Procedure 76-1 are terminated effective February 16, 1981.
SEC. 6. EFFECTS ON OTHER DOCUMENTS.
ATF Proc. 76-1, ATF C.B. 1976, 121, is hereby superseded effective February 16, 1981
SEC. 7. INQUIRIES.
Inquiries concerning this ATF Procedure should refer to its number and be addressed to the office of the appropriate Regional Regulatory Administrator, Bureau of Alcohol, Tobacco and Firearms.
Section 1. Purpose.
The purpose of this procedure is to inform proprietors of distilled spirits plants, brewers, and winemakers of the types of adjustments which may be made on their respective excise tax returns to increase or decrease the amount of tax due. General information is also provided on the method to be used in making such adjustments.
SEC. 2. BACKGROUND.
The Bureau of Alcohol, Tobacco and Firearms recognizes the need to furnish some guidelines with respect to the types of adjustments which may be made on excise tax returns to increase or decrease the amount of tax due. That information is furnished in this procedure, as well as information on the methods which should be used to make such adjustments.
The information in this procedure applies to prepayment and deferred payment excise tax returns filed by proprietors of breweries, wineries and distilled spirits plants.
Adjustments to distilled spirits excise tax returns (both to increase and to decrease the tax) were previously addressed in Revenue Procedure 68-6, C.B. 1968-1, 748 (Internal Revenue), which is superseded by this new procedure. A large part of Revenue Procedure 68-6 pertains to distilled spirits tax return forms which are no longer in use. Some pertinent parts of Revenue Procedure 68-6 are now explained in regulations or in the instructions on forms, and it is therefore deemed unnecessary to restate those parts in this new procedure. Some pertinent parts of Revenue Procedure 68-6 do not appear elsewhere. These parts are retained or restated below.
SEC. 3. ADJUSTMENTS DECREASING THE AMOUNT OF TAX DUE.
(a) Claims. Where a claim for credit has been filed, no credit may be applied to the amount of tax due on a return until advice is received from the regional regulatory administrator that the claim has been allowed. If the credit on an approved claim is larger than the amount of taxes due on a single tax return, any remaining credit should be carried over to the next tax return. Claims for credit of tax need be filed only for reasons specified in regulations.
(b) Official Notice. A proprietor may make an adjustment to decrease the amount of tax due when so notified by ATF. Such notification is sent when an error is discovered by ATF upon examination of a tax return.
(c) Errors Discovered by Proprietors. A proprietor may make adjustments on a current tax return to decrease the amount of tax due when he discovers past clerical or mathematical errors which resulted in higher taxpayment than was required. Examples of such errors are using the wrong conversion factor for metric conversion and simple arithmetical errors.
A proprietor may also make an adjustment decreasing the tax due on a current tax return when he finds that taxes have been overpaid on a prior tax return due to overstated removals. A notation should be made on the current tax return in sufficient detail to enable ATF personnel to make a judgment as to the validity of the purpose for which the adjustment is being made.
A brewer, winemaker or distilled spirits plant proprietor need not file a claim in order to make an adjustment on a current tax return to correct a previous overpayment based on overstated removals. This is so even if the overstatement of removals is due to so-called "short shipments." However, the fact that such claims are not necessary does not lessen the need for industry to satisfy ATF that removals were, in fact, overstated.
(d) Interest. Interest on any of the above items, as permitted by statute, constitutes an authorized deduction from taxes. Interest, when permitted, should be computed from the date of the overpayment to the due date of the return on which the credit is taken.
Tax returns are carefully examined by ATF inspectors, auditors, and/or technical services specialists. If deductions from tax returns cannot be substantiated, these ATF personnel are instructed to recommend that the deduction from tax be disallowed. If the disallowance is upheld, after review of all pertinent facts, industry members will be required to reenter the amount as an increase in taxes on a subsequent tax return, including interest thereon.
With respect to inventory overages, the fact that a partial or complete physical inventory exceeds book inventory does to, in itself, constitute an authorized adjustment decreasing tax. The physical inventory overage does indicate that an error or inappropriately documented transaction has occurred - whether it be in overstated removals, understated packaged goods production, or some other reason. Of course, once the reason for the inventory overage is discovered, that reason might very well serve as the basis for an authorized deduction from taxes, as set out above.
SEC. 4. ADJUSTMENTS INCREASING THE AMOUNT OF TAX DUE.
A proprietor may correct errors which resulted in underpayment of tax for a previous tax return period on a subsequent tax return. Such errors may be discovered by the proprietor, or the regional regulatory administrator may notify the proprietor to correct for errors which were discovered by ATF upon examination of the proprietor's tax return. If the errors result in a substantial underpayment of tax, the regional regulatory administrator may require the taxpayer to file an amended return. See Section 5 of this procedure for information pertaining to amended returns.
Interest is due on underpayments. Interest on underpayments should be computed from the due date of the return in error to the date of filing the return (and remittance) on which the adjustment of the error is made.
The proprietor may also make an adjustment to increase the tax when he or she exports alcoholic beverages under bond and is unable to furnish documentation to satisfy the regional regulatory administrator of the quantity of products allegedly exported. In this case, the proprietor may voluntarily make an adjustment on a tax return for the amount of the tax, plus interest, on the products for which proof of exportation is not furnished.
SEC. 5. AMENDED RETURNS.
Where an underpayment of tax on a previously filed excise tax return is discovered by the proprietor, or when the proprietor receives a notice from the regional regulatory administrator of such an underpayment, the proprietor may make an adjustment therefor on a subsequent return or he may file an amended return. As pointed out above, where the amount of the underpayment is substantial, the regional regulatory administrator may require the proprietor to file an amended return.
Where an amended return is to be filed, it need show only such entries as are necessary to correct and appropriately identify the error on the original return for the period (or day, in the case of a prepayment return) in question. Such returns should be clearly marked "Amended Return," should identify the period covered by the original return, and should bear the same serial number as the original return. An amended tax return filed to correct an underpayment should reflect as a separate item any interest, at the prevailing rate per annum, due the Government.
SEC. 6. GENERAL.
An underpayment or overpayment on a prepayment return may be adjusted on a semimonthly return or an underpayment or overpayment on a semimonthly return may be adjusted on a prepayment return.
SEC. 7. EFFECT ON OTHER DOCUMENTS.
Revenue Procedure 68-6, C.B. 1968-1, 748 (Internal Revenue) is hereby superseded.
SEC. 8. INQUIRIES.
Inquiries concerning this ATF procedure should refer to its number and be addressed to the appropriate regional regulatory administrator.
Section 1. Purpose.
This ATF Procedure establishes an optional alternate procedure which tobacco products manufacturers may use to file claims after January 1, 1983, under 26 U.S.C. 5705 for credit or refund of tax on cigarettes withdrawn from the market.
SEC. 2. BACKGROUND.
Small cigarettes comprise the vast majority of cigarettes on which claims are filed under Section 5705. Therefore, this procedure is written in terms of the current and new tax rates specific to small cigarettes. However, the procedure, in conjunction with the current and new tax rates specific to large cigarettes, may be used for claims under Section 5705 relating to large cigarettes.
ATF Ruling 82-11 holds that manufacturers of tobacco products are entitled only to refund or credit of taxes actually paid by them on cigarettes withdrawn from the market under the provisions of Section 5705, and that cigarette floor stocks taxes paid by others, i.e. distributors and wholesalers, are not refundable or creditable to manufacturers under such circumstances.
Cigarettes removed by manufacturers before January 1, 1983, and still in commercial channels on that date will have been originally taxpaid by the manufacturer at the rate of $4 a thousand. Section 283 of the Tax Equity and Fiscal Responsibility Act imposes a floor stocks tax of $4 a thousand on cigarettes held for sale by certain persons on January 1, 1983. A manufacturer is required to pay an additional $4 a thousand floor stocks tax on those cigarettes removed from bond prior to January 1, 1983, which are held for sale by the manufacturer on that date. Distributors and wholesalers are required to pay $4 a thousand floor stocks tax on cigarettes which they hold for sale on January 1, 1983. Retailers are exempt from the floor stocks tax to the extent that they hold cigarettes for sale on January 1, 1983, at the place where they are intended to be sold at retail. Cigarettes removed from factories on or after January 1, 1983, are required to be taxpaid by the manufacturer at the rate of $8 a thousand.
The nature of the cigarette distribution system and the manner in which damaged and stale cigarettes are returned to the manufacturer make the status of particular returned cigarettes extremely difficult if not impossible to determine. Only a comprehensive change in the manner of collecting and returning these damaged and stale products, and the institution of a complex records system, would enable a manufacturer to reasonably make this determination for even part of the returns from the market. The status of some returns could not even be known after instituting these costly changes. Consequently, under the usual procedures for proof manufacturers could obtain refund or credit of only part of the taxes they paid even after instituting such an extensive new system of returns and recordkeeping.
Given these circumstances, the Bureau has determined that a reasonable alternative exists to the usual proof of the amount of tax refundable or creditable, which can be used for the transition period following the cigarettes tax increase and floor stocks tax imposition effective January 1, 1983. Manufacturers may, at their option, after January 1, 1983, submit claims under Section 5705 under the procedure described below.
The procedure is based on past statistical data. ATF estimates of cigarette inventories which will be at different levels of distribution on January 1, 1983, and the normal cigarette "shelf-life." The Bureau believes that the procedure conforms with the intent and requirements of Section 5705.
SEC. 3. ACCEPTABLE ALTERNATE PROCEDURE.
In the case of each manufacturer a base quantity of cigarettes, calculated using Federal fiscal year data as explained below, must be amortized i.e., depleted, by the cigarettes on which claims filed by the manufacturer under this procedure are approved before credit or refund of tax at the $8 a thousand rate will be allowed on all cigarettes withdrawn from the market by the manufacturer.
A manufacturer who wishes to file a claim under Section 5705 on and after January 1, 1983, under this procedure must first calculate the base quantity of cigarettes to which the ratios set forth herein will be applied. This is done by (a) establishing the total number of cigarettes removed subject to tax from all factories operated by the manufacturer for the period October 1, 1981, through September 30, 1982, inclusive, and (b) multiplying this number by the semi-annual factor for his average rate of withdrawals from the market with refund/credit allowed. In narrative form the equations for determining this factor are:
(FY80 &FY81) Withdrawals (FY80 & FY81)
Refund/Credit divided by Taxable Removals = Annual Factor
Allowed 2
2
Annual Factor = Semi-Annual Factor
2
On each claim involving cigarettes withdrawn from the market on or after January 1, 1983, up to the base quantity, it will be presumed that the manufacturer taxpaid 11 percent of the cigarettes involved at the $4 a thousand rate and 89 percent at the $8 a thousand rate.
These percentages will be applied to each claim filed by the manufacturer relating to withdrawals from the market which occur on or after January 1, 1983, regardless of the factories involved, until the total quantity of cigarettes in allowed claims reaches the manufacturer's base quantity. Thereafter cigarettes withdrawn from the market will be presumed to have been taxpaid at the $8 a thousand rate.
Each claim filed by the manufacturer under this procedure must include (a) the company's base quantity as determined above, (b) the total quantity of cigarettes on which refund or credit has been claimed company-wide under the procedure up to an including the current claim, and (c) the quantity of cigarettes, if any, on which those claims were disallowed.
SEC. 4. LIMITATION OF PROCEDURE.
Unless the Regional Regulatory Administrator authorizes otherwise, this procedure must be used for all withdrawals from the market on which the manufacturer intends to claim refund or credit of the excise tax.
Cigarettes in the ownership or possession of a manufacturer on January 1, 1983, which are in the process of withdrawal at that time may not be included in claims filed under this procedure. Any claim for such cigarettes is to be filed under customary procedures.
Manufacturers who do not follow this alternate procedure exclusively will be authorized refund or credit of tax on cigarettes withdrawn from the market after January 1, 1983, based on the procedures for proof customarily applied by ATF.
SEC. 5. INQUIRIES.
Inquiries concerning this ATF Procedure should refer to its number and be addressed the office of the appropriate Regional Regulatory Administrator, Bureau of Alcohol, Tobacco and Firearms.
Section 1. Purpose.
The purpose of this ATF Procedure is to authorize a test procedure using an automated thermal conductivity analyzer to determine the carbon dioxide content of still wines under the provisions of 27 CFR 240.531 and 240.534.
SEC. 2. BACKGROUND.
Regulations in 27 CFR 240.534 require that the carbon dioxide contained in wine be determined in accordance with authorized test procedures announced by the Director.
Revenue Procedure 59-33, 1959-2 C.B. 953 (Internal Revenue), authorized the manometric and volumetric methods. ATF Procedure 73-1, 1973 ATF C.B. 108, superseded the earlier procedure and added the enzymatic method of testing to those methods previously authorized. This procedure was amplified by ATF Procedure 77-2, 1977 ATF C.B. 197, which authorized the use of an infrared spectrophotometric method to the previously authorized methods. The Director is now authorizing the use of an automated thermal conductivity analyzer for determining the carbon dioxide content in still wines as described on the Journal of the Association of Official Analytical Chemists. See: Mitchell & Benjamin, Automated Thermal Conductivity Determination of Carbon Dioxide in Wine. J. ASSOC. OFF. ANAL. CHEM. (Vol. 64, No. 3 at 547-549, 1981).
SEC. 3. EFFECT ON OTHER DOCUMENTS.
ATF Procedure 71-1, 1973 ATF C.B. 108, and ATF Procedure 77-2, 1977 ATF C.B. 197, are hereby amplified.
SEC. 4. INQUIRIES.
Inquiries regarding this ATF Procedure should refer to its number and be addressed to the Assistant Director (Regulatory Enforcement), Bureau of Alcohol, Tobacco and Firearms, 1200 Pennsylvania Avenue, NW., Washington, DC 20226.
Section 1. Purpose.
This ATF Procedure informs proprietors of distilled spirits plants, bonded wine cellars, importers and exporters who transfer distilled spirits and wine, between their premises and Customs Bonded Warehouses and Customs Manufacturing Bonded Warehouses of the requirements for completing certain transfer documents.
SEC. 2. BACKGROUND.
Effective December 1, 1982, the United States Customs Service removed Customs Officers from Customs Bonded Warehouses and Customs Manufacturing Bonded Warehouses in accordance with Treasury Decision 82-204. ATF operations concerned with the exportation and importation of distilled spirits and wine involving Customs Bonded Warehouses have been affected by the removal of the Customs Officers. This procedure specifies the procedures to be followed when completing forms previously completed by Customs Officers.
SEC. 3. FORM PROCEDURES.
a. Transfer of taxpaid spirits to a Customs Bonded Warehouse. Distilled Spirits can be entered into a Customs Bonded Warehouse under the provisions of 27 CFR 252.26(b) with drawback privileges. The exporter depositing such bottled spirits will prepare ATF Form 5110.30, Drawback on Distilled Spirits Exported, in quadruplicate, as required by 27 CFR 252.190. The exporter will modify Item 6 of Form 5110.30 by lining out the words "Customs Officer in Charge" and entering the word "Proprietor". The exporter will give the original and one copy of the form to the proprietor of the Customs Bonded Warehouse. When the distilled spirits are received by the proprietor of the Customs Bonded Warehouse, he will complete Part IV of Form 5110.30. He will modify Item 21 by lining out the words "Customs Officer" and entering the word "Proprietor". The proprietor of the Customs Bonded Warehouse will then forward the original of the Form 5110.30 to the Regional Regulatory Administrator and file one copy in a Customs file at the Customs Bonded Warehouse.
b. Transfer of untaxpaid distilled spirits or wine from an exporter to a Customs Bonded Warehouse or a Manufacturing Bonded Warehouse. Distilled spirits and wine may be withdrawn, without payment of tax, from a distilled spirits plant or bonded wine cellar for transfer to a Customs Bonded Warehouse or a Manufacturing Bonded Warehouse (27 CFR 252.25, and 252.26(a)). Form 5100.11, Withdrawal of Spirits, Denatured Spirits, or Wines for Exportation, will be prepared, in quadruplicate as required by the instructions on the form, by the exporter or the Manufacturing Bonded Warehouse proprietor as appropriate under the provisions of 27 CFR 252.28, 252.92 or 252.122. The proprietor will modify Item 7 of the form by lining out the words "Customs Officer in Charge" and entering the word "Proprietor".
When the goods are received at the Customs Bonded Warehouse or Manufacturing Bonded Warehouse, the proprietor will complete Part V of the form. The proprietor shall modify the heading of Part V and Item 34 by lining out "Customs Officer's" and "Customs Officer" respectively and substituting the words "Proprietor's" and "Proprietor" respectively. The proprietor shall then sign in Item 34. In addition, the proprietor of a Manufacturing Bonded Warehouse may be required to complete a Form 5180.1, Customs Gauge Report, under the provisions of 27 CFR 252.285. The proprietor will modify Item 7 of the form by lining out the word "Proprietor".
c. Transfer of distilled spirits from Customs custody to the bonded premises of a distilled spirits plant. Imported distilled spirits can be withdrawn, in bulk, from Customs custody without payment of tax under the provisions of 27 CFR 251.171. Form 5100.16, Application for Transfer of Spirits and/or Denatured Spirits in Bond, will be completed by the distilled spirits plant proprietor. One copy of the Form 5100.16 will be forwarded to the Customs Bonded Warehouse proprietor for his records. The proprietor of the Customs Bonded Warehouse will prepare Form 5110.27, Transfer of Spirits. Denatured Spirits or Wines in Bond, and, as necessary, ATF Form 5110.45, Package Gauge Report. Both forms will be completed using the instructions on the forms. Serial numbers in Item 1 of Form 5110.27 may be required by Customs. Item 12A, Form 5110.27, and Item 7, Form 5110.45, will be completed by the proprietor of the Customs Bonded Warehouse. Item 3, Form 5110.27, will be completed by the proprietor of the Customs Bonded Warehouse using information from his file copies of ATF Form 5100.16.
SEC. 4. DISTRIBUTION OF NEW EDITIONS OF FORMS 5100.11, 5110.30 AND 5180.1.
Each distilled spirits plant and bonded wine cellar will receive an initial distribution of the new editions of each form from the ATF Distribution Center when they are published. Additional forms should be ordered from the ATF Distribution Center, 3800 S. Four Mile Run Drive, Arlington, Virginia 22206.
SEC. 5. INQUIRIES.
Inquiries concerning this procedure should refer to its number and be addressed to the Assistant Director, (Regulatory Enforcement) Bureau of Alcohol, Tobacco and Firearms, 1200 Pennsylvania Avenue, N.W., Washington, DC 20226.
Section 1. Purpose.
This ATF Procedure establishes procedures to be followed by the manufacturers of tobacco products when completing ATF Form 2145 (5200.11), Notice of Release of Cigars, Cigarettes, Cigarette Papers or Cigarette Tubes.
SEC. 2. BACKGROUND.
Effective December 1, 1982, the United States Customs Service removed Customs officers from Customs Bonded Warehouses and Customs Bonded Manufacturing Warehouses in accordance with Treasury Decision 82-204. ATF operations concerned with the importation of tobacco products involving Customs Bonded Warehouses were affected by the removal of the Customs Officers. This procedure specifies the procedures to be followed when completing the portions of Form 2145 previously completed by Customs Officers.
SEC. 3. FORMS PROCEDURES.
Release of Cigars, Cigarettes and Cigarette Papers and Tubes from Customs Custody without Payment of Tax. (27 CFR 275.86).
Manufacturers of tobacco products may obtain release of cigars, cigarettes and cigarette papers and tubes from a Customs Bonded Warehouse, in bond, without payment of tax. Part III of Form 2145 (5200.11), Notice of Release of Cigars, Cigarettes, Cigarette Papers, or Cigarette Tubes, will be prepared by the proprietor of the Customs Bonded Warehouse. He will modify Item 9 by deleting the words "Customs Officer" and entering the word "Proprietor" and sign the form, entering his title and the date. The CBW proprietor will provide one copy of the form to the manufacturer, maintain one copy in the Customs file and send the original to the certifying Regional Director (Compliance).
SEC. 4. DISTRIBUTION OF NEW EDITIONS OF FORM 2145.
Each manufacturer of tobacco products will receive an initial distribution of the new form from the ATF Distribution Center. Additional forms should be ordered from the ATF Distribution Center, 3800 S. Four Mile Run Drive, Arlington, Virginia 22206.
SEC. 5. INQUIRIES.
Inquiries concerning this procedure should refer to it by number and be addressed to the Associate Director, (Compliance Operations) Bureau of Alcohol, Tobacco and Firearms, 1200 Pennsylvania Avenue, N.W., Washington, DC 20226.
(Note: EEC regulations provided as attachments to this Procedure are not reproduced here. This Procedure modified by ATF Procedure 88-2).
Section 1. Purpose.
1.01 The purpose of this procedure is to outline the new requirements of the European Economic Community (hereinafter referred to as the EEC or the Community) as they apply to certification and analysis of commercial shipments of U.S. grape table wine and U.S. sparkling grape wine, only.
SEC. 2. DEFINITIONS.
2.01 U.S. Wine. For the purposes of this procedure, the term, U.S. wine, refers only to U.S. grape table wine and U.S. sparkling grape wine intended for export to the Community for marketing for direct human consumption.
2.02 The Member States of the Community. The Member States of the Community presently include: Belgium, Denmark, Federal Republic of Germany, France, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain and the United Kingdom.
2.03 Consignment. For the purposes of this procedure, a consignment is the quantity of the same wine consigned by one consignor to one consignee for the purpose of marketing.
2.04 Actual Alcoholic Strength. For the purposes of this procedure, actual alcoholic strength means percent alcohol content by volume at 20 degrees C.
2.05 Potential Alcoholic Strength. For the purposes of this procedure, potential alcoholic strength means the percent alcohol content by volume at 20 degrees C. which would result from complete fermentation of all fermentable sugars.
2.06 Total Alcoholic Strength. For the purposes of this procedure, total alcoholic strength means the sum of the actual and potential alcoholic strength.
SEC. 3. BACKGROUND.
3.01 ATF Procedure 73-6 outlined the EEC certification and analysis requirements which were applicable at the time that procedure was issued in 1973.
3.02 Subsequent to the issuance of that procedure, the EEC issued "Commission Regulation (EEC) No. 2115/76 of August 20, 1976, laying down general rules for the import of wines, grape juice and grape must." This regulation exempted U.S. wine in containers of four liters or less from certification and analysis requirements on the basis that annual U.S. exports of such products to the Community totaled less than 1000 hectoliters. Thus, from the time of this exemption to the present, U.S. wineries did not have to comply with EEC certification and analysis requirements for such products.
3.03 On December 20, 1985, the Community published "Commission Regulation (EEC) No. 3590/85 of December 18, 1985 on the certificate and analysis report required for the importation of wine, grape juice and grape must". This regulation makes three fundamental changes to the present EEC certification and analysis requirements, i.e.,"
(a) except as provided in Section 5.02, effective April 2, 1986, it no longer exempts the United States from certification and analysis for shipments of wine in containers of four liters or less;
(b) except as specified in Section 5.01, it requires that U.S. wine exported from the U.S. on or after April 2, 1986, be accompanied by Forms V.I.1 (see Section 5.06). (The procedures outlined herein relate only to this new model of Form V.I.1.); and, (c) it makes provision for use of new, simplified procedures for completing the new Forms V.I.1 for shipments of wine meeting the conditions referenced in Section 7.01.
3.04 The EEC established April 2, 1986, as the effective date of Commission Regulation No. 3590/85 (Attachment I) to allow those wishing to export to the Community sufficient time to adjust to the new procedures and to print the new forms.
3.05 The simplified procedures noted in Section 3.03(c) considerably minimize administrative burdens by allowing authorized U.S. Producers to self-certify the new Forms V.I.1. They also minimize financial burdens by reducing the number of analyses required from a total of eight to a total of three, i.e., actual alcoholic strength, total sulfur dioxide and total acidity.
SEC. 4. EEC REGULATIONS.
4.01 "Commission Regulation (EEC) No. 3590/85 of December 18, 1985, on the certificate and analysis report required for the importation of wine, grape juice and grape must" is included as Attachment I. This regulation outlines the certification and analysis procedures referenced in Sections 6 and 7.
4.02. "Council Regulation (EEC) No. 1873/84 of June 28, 1984, authorizing the offer or disposal for direct human consumption of certain imported wines which may have undergone oenological processes not provided for in Regulation (EEC) No. 337/79" is included as Attachment II. This regulation specifies the wine treating materials which the EEC accepts for use in the production of U.S. wine.
4.03. ATF will make every effort to alert the public to any other information having a significant bearing on certification, analysis and treatment of U.S. wine; however, the ultimate responsibility to keep abreast of EEC regulations lies with U.S. exporters. U.S. exporters and other concerned should contact the European Community Information Service at 2100 M Street, NW, Washington, DC 20037 for additional copies of, or further information concerning, Community regulations.
SECTION 5. GENERAL INSTRUCTIONS APPLICABLE TO FORMS V.I.1.
5.01. Forms V.I.1 are not required for any wine originating in or coming from non-EEC countries in containers of two liters or less, where the total quantity transported, even if it is composed of two or more individual consignments, does not exceed 60 liters.
5.02. Forms V.I.1 are not required for U.S. wine packaged in containers of four liters or less which enters the Community before September 30, 1986, provided satisfactory proof is offered to Community customs authorities that it left the U.S. before April 2, 1986.
5.03. Except as indicated in Section 5.01, Forms V.I.1 shall, as in the past, accompany each consignment of U.S. wine which is not packaged in containers of four liters or less. U.S. exporters may continue to use existing supplies of the present model of Forms V.I.1 for shipments of such wine which enter the Community before September 30, 1986, provided satisfactory proof is offered to Community customs authorities that it left the U.S. before April 2, 1986.
5.04. Except as indicated in Section 5.01, the new model of Forms V.I.1, as described in Section 5.06, shall accompany each consignment of U.S. wine shipped on or after April 2, 1986 (see Sections 6 and 7).
5.05. An original Form V.I.1 and four carbon copies shall be prepared, when required, for each consignment of U.S. wine.
5.06. Exporters are required to provide their own supply of Forms V.I.1 following the model shown in Annex II of Commission Regulation No. 3590/85 (Attachment I). Forms V.I.1 shall:
(a) be approximately 210 mm x 297 mm in size;
(b) be printed on white paper weighing at least 40 grams per square meter;
(c) bear the name and address or the mark of the printer;
(d) be printed in English.
5.07. Forms V.I.1 shall be completed in the English language. The information provided on the original shall be clearly legible on all four copies and shall be either typed or printed in ink using block letters. They shall contain no erasures or alterations. Where necessary, changes shall be made by striking out the wrong entry and inserting the required details. Any change made in this way shall be approved by its author and stamped, as the case may be, by the official agency, the laboratory or the customs authorities.
SECTION 6. PROCEDURES FOR PREPARING FORMS V.I.1 FOR THE EXPORT OF U.S. WINE WHICH DOES NOT MEET THE REQUIREMENTS OF SECTION 7.01.
6.01. The exporter shall complete Forms V.I.1 as follow:
(a) Exporter (Box 1). Identify the name and complete address of the exporter. If the exporter is a wine producer, the name and address shall be that as shown on the "Wine Producer's and Blender's Basic Permit" (ATF F 5120.18) issued to the producer. Otherwise, the name and address shall be that as shown on the "Wholesaler's Basic Permit" (ATF F 5170.03) issued to the exporter.
(b) Third Country of Issue and Serial Number (upper right hand corner). Identify the country of issue as either "United States of America" or "U.S.A.". Assign a serial number consisting of the last two digits of the calendar year in which the Forms are prepared followed by a dash and the number "1" for the first set of Forms prepared, "2" for the second, etc. (e.g., 86-1, 86-2, etc.)
(c) Consignee (Box 2). Identify the name and address of the consignee.
(d) Marks and reference numbers-Number and nature of Packages-Description of product (Box 6). Provide sufficient shipping information to identify the consignment to the proper authorities (e.g., bill of lading number, invoice number, etc). Enter the number and nature of the packaging used (e.g., 100 cases) and describe the wine giving at least the following information:
- for non-appellation U.S. grape table wine, indicate "U.S. Wine";
- for non-appellation U.S. sparkling wine, indicate "U.S. Sparkling Wine";
- for appellation U.S. wine, indicate the country of origin, appellation, vintage date and, if applicable, the varietal designation and whether it is sparkling e.g., "U.S. 1983 Napa Valley Cabernet Sauvignon," "U.S. 1980 New York State Sparkling Wine."
(e) Quantity (liters/hectoliters/kilograms) (Box 7). Select the unit of volume preferred and delete the other two. Identify the total quantity in the consignment using the chosen unit of measure.
(f) Number of Bottles (Box 8). If the consignment is a bottled shipment, specify the number of bottles in the consignment.
(g) Colour of the product (Box 9). Describe the color of the wine in the consignment as being either red, white or rose.
(h) CERTIFICATE (Box 10). Place an "X" in the appropriate square. To determine if the consignment of wine covered by the Forms V.I.1 "has not been subjected to oenological practices which are not permitted under current Community provisions relating to the import of the product in question," refer to Section 4.02 and Attachment II.
6.02 After completing the Forms V.I.1 as specified in Section 6.01, the exporter shall attach to the set of Forms V.I.1 a certification statement as referenced in Attachment III. Attachment III or photocopies thereof may be used for submission of the certification statement if appropriately completed with original signature.
6.03 The exporter shall forward one 750 mL sample of the wine referenced in the Forms V.I.1 to a chemist, enologist or laboratory certified by ATF for the analysis of wine for export in accordance with ATF Procedure 86-2. The list of ATF-certified chemists, enologists and laboratories are published in the "C" series of the Official Journal of the European Communities and may be obtained at the following address:
Certified Laboratories - Wine
National Laboratory Center
Bureau of Alcohol, Tobacco and Firearms
1401 Research Boulevard
Rockville, Maryland 20850
6.04 The sample shall be accompanied by the original and all four copies of the applicable Forms V.I.1 to which shall be attached the certification statement referenced in Section 6.02.
6.05 Upon receipt of the sample, set of Forms V.I.1 and certification statement from the exporter, the certified chemist, enologist or laboratory, using the techniques described in ATF Procedure 86-2, shall perform the chemical tests specified in Box 11 (with the exception of the test for "density") and complete Box 11, in full, insuring that the precise analytical units of measurement are specified (e.g., total acidity: x g/100 mL calculated as tartaric acid).
6.06 The certified chemist, enologist or laboratory shall then retain one copy of Form V.I.1 and forward the original, the remaining three copies and the certification statement referenced in Section 6.02, to the Regional Director (Compliance), Bureau of Alcohol, Tobacco and Firearms, serving the region in which the exporter is located, Attention: Chief, Technical Services.
6.07 Upon receipt of the duly completed Forms V.I.1, the Regional Director (Compliance) shall complete Box 10 identifying the Bureau address as referenced in Section 7.07. The Regional Director (Compliance) shall then retain one copy of Form V.I.1 as well as the certification statement referenced in Section 6.02 and return the original and two remaining copies of Forms V.I.1 to the exporter.
6.08 The exporter shall retain one copy of Form V.I.1 and forward the original and remaining copy with the consignment.
6.09 The documents to be retained shall be kept on file for five years.
SEC. 7. SIMPLIFIED PROCEDURES FOR PREPARING FORMS V.I.1.
7.01 The procedures outlined in this section apply only to U.S. wine produced by U.S. wineries authorized in accordance with Section 8 and exported by these wineries, on or after April 2, 1986, in labeled containers, of 60 liters or less, fitted with non-reusable closing devices.
7.02 The producer shall complete Forms V.I.1 as indicated in Section 6.01.
7.03 The producer shall include in Box 1 the bonded winery registry number as shown on the "Wine Producer's and Blender's Basic Permit" (ATF F 5120.18) issued to the producer.
7.04 The producer shall then follow the procedure outlined in Section 6.03. The sample shall be accompanied by the original and all four copies of Forms V.I.1.
7.05 Upon receipt of the sample and set of Forms V.I.1 from the producer, the certified chemist, enologist or laboratory, using the techniques described in ATF Procedure 86-2, shall determine only actual alcoholic strength, total acidity and total sulfur dioxide and complete Box 11 only with respect to these analyses, insuring that the precise analytical units of measurement are specified (e.g., total acidity: x g/100 mL calculated as tartaric acid).
7.06 The certified chemist, enologist or laboratory shall leave the other areas of Box 11 blank, retain one copy of Form V.I.1 and forward the original and three remaining copies to the producer.
7.07 With respect to Box 10, a person recognized by ATF as having authority to sign on behalf of the winery shall delete the words "name and title of official", sign under the word "Signature" and insert the place and date of signature in the appropriate areas. In this case, a stamp is not required and the producer shall insert the following in the area headed "Full name and address of the official agency":
Bureau of Alcohol, Tobacco and Firearms
1200 Pennsylvania Avenue, NW
Washington, DC 20226
U.S.A.
7.08 With respect to Box 11, a person recognized by ATF as having authority to sign on behalf of the winery shall delete the words "name and title of official," sign under the word "Signature" and insert the place and date of signature in the appropriate areas. In this case, neither a stamp nor the name and address of the laboratory is required.
7.09 The producer shall forward one copy of Form V.I.1 to the Regional Director (Compliance), Bureau of Alcohol, Tobacco and Firearms, serving the region in which the producer is located, Attention: Chief, Technical Services.
7.10 The producer shall retain one copy of Form V.I.1 and forward the original and remaining copy with the consignment.
7.11 The documents to be retained shall be kept on file for five years.
SEC. 8. PROCEDURES FOR THE AUTHORIZATION OF U.S. PRODUCERS WISHING TO BE ELIGIBLE TO USE THE PROCEDURES REFERENCED IN SECTION 7.
8.01 U.S. producers shall submit to ATF a certification statement as referenced in Attachment IV. Attachment IV may be used for this purpose provided it has been appropriately completed with original signature. The certification statement shall be mailed to the following address:
Chief, Alcohol Import-Export Branch
Bureau of Alcohol, Tobacco and Firearms
Attn: Certification Statement (EEC)
P.O. Box 385
Washington, DC 20226
8.02 ATF will submit, to the European Economic Community, the names, addresses and bonded winery registry numbers of the wineries which have submitted the certification statement referenced in Section 8.01 and will identify these wineries as being authorized, until such time as this authorization is withdrawn, to draw up V.I.1 documents in accordance with "Commission Regulation (EEC) No. 3590/85 of December 18, 1985, on the certificate and analysis report required for the importation of wine, grape juice and grape must."
8.03 The EEC will publish the list of authorized wineries in the "C" series of the Official Journal of the European Communities and will update the list as needed.
SEC. 9. EFFECT ON OTHER DOCUMENTS.
9.01 The provisions of ATF Procedure 73-6 which dealt with the documentation requirements for U.S. wine exported to the EEC are hereby superseded.
SEC. 10. INQUIRIES.
10.01 Inquiries concerning this procedure should refer to its number and should be addressed to:
Chief, Alcohol Import-Export Branch
Bureau of Alcohol, Tobacco and Firearms
Attn: Industry Circular 86-2
P.O. Box 385
Washington, DC 20226
SECTION 1. PURPOSE.
1.01 This procedure establishes the guidelines to be followed by chemists, enologists or laboratories desiring to be certified by the Bureau of Alcohol, Tobacco and Firearms (ATF) for the analysis of wine for export.
SEC. 2. BACKGROUND.
2.01 Many countries require the presentation of specific chemical analyses as a condition of entry for imported wine. Wish respect to U.S. wine, many of these countries will accept analyses performed by persons or laboratories certified by ATF.
2.02 The Member States of the European Economic Community (hereinafter referred to as the EEC or the Community) are among such countries, and ATF Procedure 73-6 which dealt with EEC documentation requirements for wine, established the procedures to be followed by chemists and laboratories wishing to be certified to analyze wine for export to the EEC.
2.03 The Japanese Ministry of Health and Welfare now also accepts chemical analyses performed by ATF-certified persons or laboratories, and the number of such foreign governmental bodies may increase in the future.
2.04 This being the case, the provisions relative to certification of chemists and laboratories previously included in ATF Procedure 73-6 have been dissociated from EEC documentation requirements and are reissued herewith to make it clear that those certified for wine analysis by ATF are authorized to analyze wine exported not only to the European Economic Community but also to Japan and any other countries which have agreed to accept chemical analyses performed by ATF certified persons or laboratories. In this connection, it should be noted that, although ATF Procedure 73-6 identified only graduate chemists and laboratories under the direction of a graduate chemist as being eligible for certification, the new procedure expands eligibility to include graduate enologists and laboratories under the direction of a graduate enologist. ATF has concluded that the enologists warrants such recognition.
SEC. 3. APPLICATION FOR CERTIFICATION.
3.01 Application for certification that a chemist, enologist or laboratory is qualified to analyze wine for export may be filed by a graduate chemist, a graduate enologist, a laboratory under the direction of a graduate chemist or graduate enologist, or an exporter on behalf of such a chemist, enologist or laboratory.
3.02 The application shall be submitted, in duplicate, on the applicant's letterhead, to the Director, National Laboratory Center, Bureau of Alcohol, Tobacco and Firearms, at the address given in Section 7.01. It shall be accompanied by the analysis reports referenced in Section 4.01(b) and by documentation supporting the educational qualifications and professional experience of the chemist or enologist. This information is subject to verification.
SEC. 4. QUALIFICATION FOR CERTIFICATION.
4.01 To qualify for certification by the Director, ATF National Laboratory Center, the applicant shall:
(a) have access to such laboratory equipment and facilities as are necessary to perform the wine analyses described in following subparagraph (b). The adequacy of such equipment and facilities is subject to verification or inspection:
(b) submit to the Director, ATF National Laboratory Center, a report of the analysis of any sample of white wine and any sample of red wine together with one 750 mL sample of each wine to be analyzed. These reports shall include the following analytical data as determined in accordance with the latest edition of the Methods of Analysis, published by the Association of Official Analytical Chemists:
(1) Specific gravity;
(2) Alcohol by volume;
(3) Total extract;
(4) Reducing sugar;
(5) Sucrose;
(6) Ash;
(7) Alkalinity of ash;
(8) Total acidity;
(9) Volatile acidity;
(10) Fixed acidity;
(11) Tartaric acid;
(12) Citric acid;
(13) Sulfur dioxide;
(14) pH
SEC. 5. CERTIFICATION OF APPLICANTS.
5.01 If U.S. Government chemists verify the reports of analyses submitted by the applicant, and the other requirements have been met, the Director, ATF National Laboratory Center, will certify the chemist, enologist or laboratory and so notify the applicant. If the chemist, enologist or laboratory does not meet the requirements for certification, the applicant will be so notified.
SEC. 6. EFFECT ON OTHER DOCUMENTS.
6.01 The provisions of ATF Procedure 73-6 which set out the requirements to be met by chemists or laboratories wishing to be certified by the Bureau of Alcohol, Tobacco and Firearms (ATF) for the analysis of wine for export are hereby superseded.
SEC. 7. INQUIRIES.
7.01 Inquiries concerning this circular, including requests for the listing of chemists, enologists and laboratories certified by ATF for the analysis of wine for export, should refer to its number and should be addressed to:
National Laboratory Center
Bureau of Alcohol, Tobacco and Firearms
Certified Laboratories - Wine
1401 Research Boulevard
Rockville, Maryland 20580
Section 1. Purpose.
This procedure provides guidelines for obtaining Federal label approval for imported liqueurs, cordials, flavored spirits and distilled gins.
SEC. 2. BACKGROUND.
Liqueurs, Cordials and Flavored Spirits
The Bureau has consistently held that importers of all imported liqueurs, cordials and flavored spirits must obtain a statement from the foreign producer listing all ingredients and must submit a minimum 750 ml sample for analysis prior to issuing certificates of label approval.
Section 5.33(g) of Title 27, Code of Federal Regulations, reads as follows:
(g) Contents of Bottles. A complete and accurate statement of the contents of the bottles to which labels are to be or have been affixed shall be submitted, on request, to the Director or the regional director (compliance).
Distilled Gins
Section 5.22(c), Class 3, defines "gin" as a product obtained by original and continuous distillation from mash, or by redistillation of distilled spirits, or by mixing neutral spirits, with or over juniper berries and other aromatics, or with or over extracts derived from infusions, percolations, or maceration of such materials, and includes mixtures of gin and neutral spirits. It shall derive its main characteristic flavor from juniper berries and be bottled at not less than 80 proof. Gin produced exclusively by the original distillation or by redistillation may be further designated as "distilled."
In order to properly determine the class of an imported gin, the Bureau has always required that a statement of process be submitted prior to issuing label approvals for gins designated as "distilled" in accordance with 26 CFR 5.51(d). Section 5.51(d) reads as follows:
(d) Statements of Process. Forms 1649 covering labels for gin bearing the word "distilled" as a part of the designation shall be accompanied by a statement prepared, by the manufacturer, setting forth a step-by-step description of the manufacturing process.
The Bureau has determined that several reasonable alternatives exist as to obtaining certificates of label approval for imported liqueurs, cordials and gins.
SEC. 3. ACCEPTABLE PROCEDURES
Prior to issuing certificates of label approval, the Bureau will require one of the following pieces of documentation:
Liqueurs, Cordials and Flavored Spirits
1. A statement of ingredients from the manufacturer and a 750 ml sample; or
2. A statement from the manufacturer that the product to be imported is identically formulated for world-wide distribution, provided ATF has a list of the ingredients on record, and a 750 ml sample; or
3. A 750 ml sample, and a statement from the importer setting forth the specific contents of the product. Such statement must be supported by a laboratory analysis performed by a commercial laboratory as to the specific ingredients contained in the product, and should differentiate between natural and artificial ingredients, colors, flavors, etc.
Distilled Gins
1. A statement of process from the manufacturer specifying the step-by-step process by which the "Distilled Gin" is manufactured; or
2. A statement from the manufacturer that the product to be imported is identically formulated for world-wide distribution, provided ATF has a statement of process on record.
SEC. 4. LIMITATIONS.
The Bureau reserves the right to require resubmission of the appropriate documentation and/or samples in situations where the Bureau has reason to believe the product has been changed, or when required by the Director.
Section 1. Purpose.
This procedure provides guidelines for submission of samples of alcoholic beverages to the ATF National Laboratory Center for testing.
SEC. 2. BACKGROUND.
Frequently, samples are received by the ATF Laboratory without explanation or reason for submission. In addition, some samples are submitted without being accompanied by manufacturer's statement of ingredients/process, or other appropriate documentation necessary to permit laboratory analysis. These problems have contributed to delays in testing alcoholic beverages.
SEC. 3. PROCEDURE.
The following steps should be followed by industry members when submitting samples of alcoholic beverages to the Bureau for testing:
1. Samples should be sent directly to:
ATF National Laboratory
ATTN: Beverage Alcohol Section
1401 Research Boulevard
Rockville, MD 20850
The Bureau has frequently encountered instances in which samples were shipped air freight to a Washington, DC airport, but no arrangements were made for delivery of the samples from the airport to the ATF Lab. Industry members are reminded that the shipping costs and arrangements for delivery of samples to the ATF Lab are their responsibility.
Samples should not be shipped or submitted to Compliance Operations, Product Compliance Branch.
2. Each sample container (bottle, can, etc.) should be identified with the following information:
a. unique identifying number or designation,
b. name and address of industry member submitting the sample,
c. reason for submission.
3. Each sample should be accompanied by manufacturer's statement of ingredients/process or other appropriate documentation necessary to permit laboratory analysis. A copy of the documentation should also be sent to Compliance Operations, Product Compliance Branch.
When products contain flavors, the documentation should include percentage by volume of each ingredient, the commercial name and number under which each flavor is marketed, the name and address of the flavor manufacturer, and the drawback number (if available). The source from which the alcohol is derived (e.g. neutral spirits grain, cane, grape) and the proof at which distilled should also be included for distilled spirits specialty products, gins and vodkas.
Samples received without appropriate documentation will be retained for sixty days after which time they will be destroyed.
4. The ATF Lab will acknowledge receipt of samples.
5. The status of samples submitted for testing should be checked by contacting the Compliance Operations, Product Compliance Branch at (202) 566-7595, not earlier than 21 days after receipt. Please avoid contacting the ATF Laboratory to determine the status of sample testing.
(Note: Laboratory work sheets are not reproduced here).
Section 1. Purpose.
The purpose of this ATF Procedure is to advise of the testing method used by the Bureau of Alcohol, Tobacco and Firearms (ATF) in determining whether smokeless tobacco products are chewing tobacco or snuff under 26 U.S.C. Secs. 5701 and 5702.
SEC. 2. BACKGROUND.
.01 Section 13202 of the Consolidated Omnibus Budget Reconciliation Act of 1985, Public Law 99-272, amended 26 U.S.C. 5701 to impose taxes on chewing tobacco and snuff (smokeless tobacco) effective July 1, 1986. As amended by that Act, 26 U.S.C. 5702 defines these products as follows:
Chewing tobacco is any leaf tobacco that is not intended to be smoked.
Snuff is any finely cut, ground, or powdered tobacco that is not intended to be smoked.
.02 Though different rates of tax are imposed on these two products, the statutory definitions do not provide a clear delineation between what is a leaf tobacco (chewing tobacco) and what is a finely cut tobacco (snuff).
.03 In an effort to better carry out its responsibilities in making this fine distinction, ATF procured samples of many smokeless tobacco products on the market shortly after the effective date of the tax imposition, to evaluate the distinction being made in the marketplace between the two products. Over 100 products were tested in ATF's laboratory, using variations of some techniques suggested by members of the smokeless tobacco industry.
.04 As a result of these tests. ATF determined that a carefully conducted sieving operation based on tobacco particle size effectively distinguished between the products which traditionally have been considered to be chewing tobacco (tobacco leaves of larger particle size) and those considered to be snuff (finer tobacco particle size). Further, ATF believes this procedure properly recognizes and applies the statutory definitions in 26 U.S.C. 5702.
.05 The procedure found to make this delineation involved the use of 10 mesh screen in an operation which resulted in 50 percent or more of the particles falling through the sieve in the case of snuff, and less than 50 percent falling through the sieve in the case of chewing tobacco. Consequently, ATF issuing the procedure, described in detail in Section 3, whenever it is administratively necessary to make distinctions between chewing tobacco and snuff under 26 U.S., Secs. 5701 or 5702.
.06 The procedure is employed only when it is not readily apparent from other available information (visual appearance, method of manufacture, etc.) whether the product is chewing tobacco or is snuff. When it is unclear from the other available evidence whether a product is a "leaf tobacco" or is a "finely cut, ground, or powdered tobacco," then the procedure is employed to provide objective information as to the nature of the product.
SEC. 3. DISTINGUISHING BETWEEN CHEWING TOBACCO AND SNUFF BY SIEVE TESTING.
.01 Sieve Testing Method
1. General Methodology.
The sieving operation consists of mechanically vibrating on a sieve, during a 4 minute cycle, approximately equal triplicate samples of smokeless tobacco to determine the percentage of the sample which is retained on the sieve and the percentage of the sample which passes through the sieve.
2. Apparatus
(a) U.S.A. testing sieves, ASTM E.-11, 8 inch diameter, No. 10 mesh (0.0787 inch), with covers and collecting pans
(b) Electric 8 inch sieve shaker, ROTAP (Reg. TM)
(c) Standard analytical balance
.02 Sample Preparation
Triplicate samples of approximately the same size are selected for each test. If the samples are in consumer packages in the range of 25 to 35 grams each, then the product from three individual packages is used for the test. Otherwise, samples of about 30 grams each are weighed out.
If the moisture content of a sample should be so low that the vibration would likely cause disintegration of the tobacco leaves, the sample would not be used.
The three samples are spread by hand over the surfaces of the respective screens as the screens rest on the respective pans.
.03 Testing Procedure.
(a) The tares of the varying component combinations are obtained by weighing and entering lines 2, 5, and 8 of the Laboratory Worksheet (See Exhibit).
(b) The weight of the samples and the associated components is taken and entered in Line 1. Line 2 is subtracted from this to provide the net weight of the sample in Line 3. The covers are removed from the two sieves which will not be at the top of the shaker array.
(c) The three samples are stacked in the sieve shaker, and the shaker is activated for 4 minutes. The sieve are removed from the shaker and the two covers are replaced. (Note: Covers are used on all sieves during the manipulations of the samples to prevent moisture loss between the initial and final weighing).
(d) The weights of the cover and sieve and of the cover and pan are determined and entered in worksheet Lines 4 and 7, respectively.
.04 Computations.
(a) The net weight of the sample retained on the sieve is determined by subtracting from the combined weight of the cover and the sieve and its contents (Line 4), the tare of the cover and the sieve (Line 5), and the result entered in Line 6.
(b) The net weight of the sample which passed through the sieve is determined by subtracting from the combined weight of the cover and the pan and its contents (Line 7), the tare of the cover and the pan (Line 8), and the result entered in Line 9.
(c) The total weight of the sieved sample is determined by adding the net weights of the sample retained on the sieve and the sample which passed through the sieve (Lines 6 and 9) and the result entered in Line 10.
(d) The percentage of the sample retained on the sieve is determined by dividing the net weight of the sample which passed through the sieve (Line 6) by the total weight of the sieved sample (Line 10), multiplying the result by 100, and entering on Line 11.
(e) The percentage of the sample which passed through the sieve is determined by dividing the net weight of the sample which passed through the sieve (Line 9) by the total weight of the sieved sample (Line 10), multiplying the result by 100, and entering on Line 12.
(f) The mean percentages (item 13) will be determined by taking the average of the results of the three samples tested. The mean for percentage on the sieve (item 13a) will be the average of the figures on line 11. The mean for percentage on the pan (item 13b) will be average of the figures on line 12.
(g) The product will be classified as chewing tobacco if the mean percentage in item 13a exceeds 50 percent. The product will be classified as snuff if the mean percentage in item 13b equals or exceeds 50 percent.
SEC. 4. INQUIRIES.
Any inquiries concerning this ATF Procedure should refer to its number and be addressed to:
Chief, Distilled Spirits and Tobacco Branch
Bureau of Alcohol, Tobacco and Firearms
1200 Pennsylvania Avenue, NW
Washington, DC 20226
Section 1. Purpose.
1.01 The purpose of this ATF Procedure is to provide instructions for certification of bottled and/or packaged straight bourbon whiskey shipped to the European Economic Community (EEC) and other countries, using ATF Form 5110.42 (4-88), Certificate of Authenticity-Bourbon Whiskey.
SEC. 2. BACKGROUND.
2.01 The European Economic Community (EEC) permits importations of straight bourbon whiskey from the United States into its Member States, subject to the presentation of a properly endorsed Form 5110.42 (4-88). The responsible authority, in this case, is the Bureau of Alcohol, Tobacco and Firearms (ATF).
SEC. 3. OBTAINING FORMS 5110.42 (4-88).
3.01 An exporter may request blank Forms 5110.42 (4-88) by contacting the ATF Distribution Center, 7943 Angus Court, Springfield, VA 22153.
SEC. 4. INSTRUCTIONS FOR COMPLETING ATF FORM 5110.42 (4-88).
4.01 For each transaction, an exporter will complete a set of forms consisting of two original Forms 5110.42 (4-88). All items on the forms should be completed, except items numbered 12 and 13. Where the entries to be listed in item 5 are too numerous to fit on this set of forms, one or more additional sets of forms should be prepared. All entries will be made in English.
4.02 All items are self explanatory, but the following should be noted:
(a) "Certificate of Authenticity Bourbon Whiskey No. Original," will be a number assigned by the proprietor. The number will consist of two digits representing the year, followed by a dash and a sequenced numbering system beginning with the number 1. Examples are 88-1, 88-2, and 88-3. Where it has been necessary to use more than one set of Forms 5110.42 (4-88) to describe a particular shipment, a different serial number will be assigned to each set.
(b) Serial numbers and marks. In item 5, the serial numbers of the first and last cases in a series should be shown (for example. A21730-A21986). The serial numbers of packages (casks, barrels, etc.) should be listed in numerical order. The entry for "marks" should consist of the plant registry number (e.g., DSP-KY-0000).
(c) Observations: In item 11, appropriate entries may be made to indicate any unusual conditions or circumstances in connection with the shipment described on Form 5110.42 (4-88).
SEC. 5. INSTRUCTIONS FOR FILING FORMS 5110.42 (4-88) WITH ATF OFFICIAL.
5.01 Both copies of the completed Form 5110.42 (4-88), shall be forwarded to the local ATF Compliance Office along with appropriate documentation to substantiate the accuracy of the certificate. After verifying the accuracy of the certificate, the ATF officer will complete item 12, placing a stamp showing the seal of the Department of the Treasury, in the space allocated. The area office will retain the one copy for its files, and return the other to the proprietor. The proprietor's copy will accompany the shipment to be exported.
SEC. 6. FORMS 5110.42 (4-88) PREPARED BY PROPRIETORS OF CUSTOMS MANUFACTURING BONDED WAREHOUSES.
6.01 A proprietor of a class six Customs Manufacturing Bonded Warehouse (CMBW) preparing Form 5110.42 (4-88) should do so in accordance with Section 4 above, with the following modifications:
6.02 In item 5, the proprietor should report the registry number of the distilled spirits plant from which the spirits were received, preceded by "CMBW".
6.03 The proprietor should then attach to the Form 5110.42 (4-88) a statement which contains the identification of the Form 5110.11, Withdrawal of Spirits, Specially Denatured Spirits, or Wine for Exportation, covering the transfer of spirits into the warehouse and a description of the manipulation of the spirits while in the warehouse. If there was no manipulation of the spirits, the proprietor should so certify on the statement. The customs officer should examine Form 5110.42 (4-88) and the proprietor's statement, and if the information is found to be correct, should certify on the statement and return the documents to the proprietor for filing with ATF in accordance with Section 5 above.
SEC. 7. EEC REGULATIONS.
7.01 The EEC regulations provide that the completed certificate, Form 5110.42 (4-88), shall be submitted to the customs authorities of the importing Member State within three months of its date of issue, together with the goods to which it refers. Invoices produced in support of import declarations shall bear the serial number of the corresponding certificate.
7.02 The customs authority of the Member State in which the products are presented may request a translation of the certificate.
SEC. 8. USE OF FORMS 5110.42 (4-88) FOR EXPORTS TO OTHER COUNTRIES.
8.01 Other countries requiring certification for straight bourbon whiskey may use Form 5110.42 (4-88), if acceptable to the foreign countries involved. Procedures indicated above must be followed, except that Section 7 may not be applicable.
8.02 With respect to Japan and other countries which require that Form 5110.42 (4-88) be accompanied by a certified true copy of an approved Form 5100.31 (10-85). Application for an Certification/Exemption of Label/Bottle Approval, the proprietor files an ATF Form 5100.31 (10-85) in the usual manner, with the exceptions that (1) in the section marked "Qualifications," the exporter shall write "For Export to Only," with the appropriate name of the country put in the blank, and (2) the exporter shall file his Form 5100.31 (10-85) in triplicate.
8.03 When the approval for Forms 5100.31 (For Export Only) has been received; and the exporter still needs additional copies, an original and a photocopy should be submitted to a regional ATF area office where an ATF officer will certify that the photocopy is a true copy of the original. This certified photocopy shall then be included along with the approved original Form 5110.42 (4-88) and all other papers required for the shipment.
SEC. 9. EFFECT ON OTHER DOCUMENTS.
9.01 Revenue Procedures 70-14 and 71-13 are hereby superseded.
SEC. 10. INQUIRIES.
10.01 Inquiries regarding this procedures should refer to its number and be addressed to the office of the appropriate Regional Director (Compliance), Bureau of Alcohol, Tobacco and Firearms.
Section 1. Purpose.
1.01 The purpose of this procedure is to revise Section 8.02 of ATF Procedure 86-1 to explain the new time frames ATF will use in registering, with the EEC, the names, addresses and bonded winery registry numbers of the wineries which have complied with the certification requirements referenced in Section 8.01 of ATF Procedure 86-1.
SEC. 2. BACKGROUND.
2.01 ATF Procedure 86-1 outlined the requirements of the European Economic Community (hereinafter referred to as the EEC or the Community) as they apply to certification and analysis of commercial shipments of U.S. grape table wine and U.S. sparkling grape wine.
2.02 Subsequent to the issuance of ATF Procedure 86-1, ATF accepted the EEC's recommendation to establish a biannual time frame for registering, with the Community, the names, addresses and bonded winery registry numbers of the wineries which have complied with the certification requirements referenced in Section 8.01 of ATF Procedure 86-1, the purpose of this time frame being to facilitate the administrative demands associated with this registration process.
SEC. 3. AMENDMENTS TO ATF PROCEDURE 86-1.
3.01 Section 8.02 of ATF Procedure 86-1 is amended to read as follows:
"8.02 Subject to the time frames specified in Section 8.02(a), ATF will submit, to the European Economic Community, the names, addresses and bonded winery registry numbers of the wineries which have correctly completed and submitted the certification statement referenced in Section 8.01 and will identify these wineries as being authorized, until such time as this authorization is withdrawn, to draw up V.I.1 documents in accordance with 'Commission Regulation (EEC) No. 3590/85 of December 18, 1985 on the certificate and analysis report required for the importation of wine, grape juice and grape must.'
(a) Except as provided for in Section 8.02(b), ATF's time frame for notifying the EEC of the identity of authorized wineries will depend on when the required certification statement is received by ATF, that is:
- if the certification statement is received prior to January 1, 1989, ATF will notify the EEC as soon as possible after receipt of the statement;
- as of 1989, if the certification statement is received during the period covering January 1-June 30, ATF will notify the EEC as soon as possible after June 30 of the given year;
- as of 1989, if the certification statement is received during the period covering July 1-December 31, ATF will notify the EEC as soon as possible after December 31 of the given year.
(b) Regardless of time of receipt, if a certification statement is submitted to ATF for the purpose of amending the name and/or address of a producer whose bonded winery registry number has already been identified to the EEC, ATF will notify the EEC of the amended name and/or address as soon as possible after receipt of the revised statement."
SEC. 4. INQUIRIES.
5.01 An ATF acknowledgment of the receipt of a certification statement will be sent to the submitting winery within two weeks of receipt. If this acknowledgment is not received, the winery should contact ATF without delay. Such inquiries and all others concerning this procedure should refer to its number and should be addressed to:
Chief, Alcohol Import-Export Branch
Bureau of Alcohol, Tobacco and Firearms
Attn: V.I.1 Certification
Ariel Rios Federal Building
1200 Pennsylvania Avenue, NW
(Note: Tables attached to this Procedure are not reproduced here).
Section 1. Purpose.
The purpose of this ATF procedure is to advise of the testing method used by the Bureau of Alcohol, Tobacco and Firearms(ATF) to aid in differentiating between pipe tobacco, upon which tax is imposed pursuant to 26 U.S.C. 5701(f), and smoking tobacco that is not subject to tax.
SEC. 2. BACKGROUND.
.01 The Technical and Miscellaneous Revenue Act of 1988, Pub. L. 100-647, was enacted on November 10, 1988. Section 5061 of the Act amended 26 U.S.C. 5701, to impose a tax at the rate of 45 cents per pound (and a proportionate tax at the like rate on all fractional part of a pound), on all pipe tobacco manufactured in or imported into the United States after December 31, 1988. Pipe tobacco is defined in the Act to mean "any tobacco which because of its appearance, type, packaging, or labeling, is suitable for use and likely to be offered to, or purchased by, consumers as tobacco to be smoked in a pipe."
The term "pipe tobacco" does not include smoking tobacco that is not suitable for use or likely to be offered to or purchased by consumers for use in a pipe.
.02 To assist in making the distinction between pipe tobacco and roll-your-own cigarette tobacco (i.e., smoking tobacco that is not suitable for or likely to be used in a pipe), ATF has developed a new and separate procedure which is a modification of the sequential solvent extraction method described in ATF Procedure 76-2, ATF C.B. 1976, 111-121, for differentiating between cigars and cigarettes. The original sequential extractions procedure was developed to aid the Bureau in making cigar/cigarette distinctions for tax purposes, as required for administration of 26 U.S.C., Chapter 52.
ATF Procedure 76-2 is based on cigar and cigarette standards as represented by filler tobacco of typical cigars and typical cigarettes obtained from the retail market, which have been subjected to sequential extraction with six successive solvents of increasing extractability. The sequential solvent extraction method utilized by ATF in this procedure to aid in making distinctions between pipe tobacco and roll-your-own tobacco is modified from that set forth in ATF Procedure 76-2 in that three solvents are used (petroleum ether, ethyl alcohol, and water), rather than six.
.03 Using methodology similar to that of ATF Procedure 76-2, samples of roll-your-own tobacco and pipe tobacco obtained from the retail market were subjected to the modified sequential differential solvent extraction procedure using the three solvents indicated above. The resultant standards are shown in Tables I and II. (Not reproduced here). Subsequently, smoking tobacco samples of unknown character are subjected to the same extraction method and their results mathematically compared with extractions of the standards to determine the degree of roll-your-own tobacco character.
.04 As a result of these tests, ATF determined that the sequential solvent extraction method and formulas described in this procedure effectively assist in differentiating between smoking tobacco that has been traditionally considered as "pipe tobacco" and smoking tobacco considered to be "roll-your-own tobacco." Further, ATF believes this procedure properly recognizes and applies the definition of pipe tobacco set forth in 26 U.S.C. 5702(o).
.05 In addition to utilizing the sequential solvent extraction method and formulas described in this procedure, ATF may consider a combination of other factors in making a distinction between pipe tobacco and roll-your-own tobacco. These factors include the type and cut of tobacco used, flavorings, packaging, advertising and point of sale merchandising, purchasing patterns, etc.
SEC. 3. SOLVENTS AND EQUIPMENT.
.01 Solvent
Petroleum ether (30 degrees-58 degrees C), ACS reagent grade.
Ethanol 95%, U.S.P. grade.
Water, demineralized, with anti-foam added, as described in section 4 below.
.02 Apparatus and Equipment
Balance, analytical-semimicro (type H-15, Mettler Instrument Corp., Princeton, N.J.)
Bottle, wash-polyethylene
Demineralizing cartridge, double research model.
Desiccator
Evaporator, rotary (Rotavapor, BUCHI, made in Switzerland)
Extraction apparatus - Soxhlet standard, with vapor trail portion of thimble receptacle insulated with single thickness of 1" x 1/32" asbestos type, applied wet. No other portion of the apparatus is insulated (See Figure 1, ATF Procedure 76-2).
Extraction thimble - glass, 25mm x 85mm, coarse porosity fritted disk.
Extraction heaters six unit electric (Cat. No. 6500, GCA/Precision Scientific, Chicago, IL)
Flask, drying - glass 250 ml round bottom funnel, 45mm diameter.
Flask, receiving - glass, 125 ml flat bottom
Mill, cutting - Wiley, intermediate (cutting chamber 40mm inside diameter x 20mm depth) with 20 mesh screen
Oven, convection
Funnel, 45mm
Fisher, Kendall Wrist action Solid Mixed (Fisher Scientific, Columbia, MD)
Pipette - with rubber bulb
Regulator, water pressure (installed between water supply and water condenser of Rotavapor)
Stopcock - 3-way (inserted between rotary evaporator and water aspirator vacuum pump--used to break vacuum before disconnecting 250 ml round-bottom flasks)
Vacuum hose
Vacuum pump - water aspirator type
Valve, needle
.03 Supplies
Chips, boiling - Chemfluor TFE (Norton Chemplast, 150 Dey Road Wayne, N.J. 07470)
Cotton - Sterile grade medicinal
Desiccant - indicating silica gel
Antifoam - Anti-Foam 820, (Scientific Industries, Inc., 15 Park Street, Springfield, Mass.)
SEC. 4. PREPARATION OF SOLVENTS.
Petroleum ether and ethyl alcohol are distilled in glass within 24 hours of use under normal atmosphere. Water is purified by passing through the research model double demineralizing cartridge resulting in water equivalent to triple distilled. One drop of freshly shaken antifoam is added for each 100 ml water.
SEC. 5. PREPARATION OF SAMPLES
Pulverize about ten grams of the tobacco sample in a Wiley intermediate cutting mill with 20 mesh screen on the delivery tube. After pulverizing, cap the receiving jar and mix thoroughly by using a Fisher Kendall wrist-action solid mixer ca. 30 minutes. Transfer one and one-half grams of the pulverized tobacco sample to a tared glass thimble and weigh. Insert a small cotton plug, about 30 mm x 30 mm, in the thimble on top of the sample. Place thimble into thimble receptacle portion of Soxhlet apparatus, and connect 125 mil receiving flask containing fresh boiling chips. Repeat for each additional sample to run. (From three to six replicate samples are run simultaneously.) Determine the moisture content of tobacco by placing three grams of pulverized tobacco into a previously dried and weighed aluminum dish and weigh. Place aluminum dish in oven at 103 +/- 2 degrees C for 24 hours. Cool to room temperature in a dessicator containing silica gel and reweigh. Calculate the loss in weight as the percent of moisture. Use this percent moisture value to correct for moisture content of extraction samples.
SEC. 6. EXTRACTIONS.
01. Petroleum Ether
To create a vapor seal at the joint connecting the Soxhlet apparatus and the receiving flask, moisten the male joint of the Soxhlet apparatus with a drop of demineralized water (without antifoam), and connect to the receiving flask with a twisting motion. Add 100 ml of freshly distilled petroleum ether slowly to the thimble within the Soxhlet apparatus, which should cause two to three zero solvent trips. Set control on heating units to "15" and bring solvent to boil, adjusting control an necessary to achieve a trip cycle rate of one every three minutes. Occasionally it is necessary to add a measured quantity of petroleum ether through the top of the condenser to replace loss by evaporation. Extract for 24 hours. (During this time clean, dry overnight in the oven at 103 +/- 2 degrees C, and store in the dessicator, the 250 ml round-bottom flasks to be later used in the ethyl alcohol extract.) After petroleum ether extraction for 24 hours turn off heater and let cool to room temperature. Transfer extraction solvent in thimble, thimble chamber and in the receiving flask to a tared 250 ml round-bottom flask. Remove the excess solvent from the thimble using a bulb and pipette, and then remove the last traces of petroleum ether by placing the bottom of the thimble into a funnel containing a plug of cotton and connect to a vacuum line. (Return thimble containing tobacco sample to the Soxhlet apparatus, and replace the boiling chips in the receiving flask with fresh ones.) Remove solvent from the extract in the 250 ml round-bottom flask with rotary evaporator. The needle valve is either closed or left to bleed in a small amount of air after having been so set at a previous water extraction setting. Make a corrective blank for petroleum ether, if appropriate. Place the drying flasks containing extracts in the oven for 30 minutes at 103 +/- 2 degrees C. Place in desiccator until flasks reach room temperature, and then weigh. Calculate the percentage of extract on a moisture-free basis as follows:
(Calculations not reproduced here)
.02 95% Ethyl Alcohol
Using freshly distilled ethyl alcohol, slowly add 100 ml of solvent to the thimbles within the Soxhlet apparatus, which should cause two to three zero solvent trips. Set control on heating units to "80" and bring solvent to boil. Adjust control as necessary to achieve a trip cycle of one
every six minutes. Extract for 24 hours and then turn off heater. (During this time prepare 250 ml round-bottom flasks to be used in drying the extract of water.) Let cool about 30 minutes or until at room temperature. Transfer extraction solvent in thimble, thimble chamber, and in the receiving flask, using a bulb and pipette to achieve maximum removal from the thimbles. Remove residue from the receiving flask using a wash bottle and 2 or 3 ml of demineralized water (without antifoam), adding the washing to the drying flask. (Return thimble and content to the Soxhlet apparatus, replace the boiling chips in the receiving flask with fresh ones, and connect the flask and apparatus). Remove solvent from the tobacco extract in the 250 ml round-bottom flask with rotary evaporator. Proceed with drying, weighing and calculating in the same way as with petroleum ether in step .01. The ethyl alcohol extract is dried in oven at 103 +/- 2 degrees C for four hours.
.03 Water
Add 100 ml of demineralized water containing a drop of antifoam slowly to the thimble within the Soxhlet apparatus, which should cause two to three zero solvent trips. Set control on heating units to "100" and bring solvent to boil, adjusting control as necessary to achieve a trip cycle of one every ten minutes. Bring solvent to boil and extract for 24 hours and then turn off heaters. Let cool until room temperature. Transfer extraction solvent in the thimble chamber, and in the receiving flask to a tared 250 ml round-bottom flask, using a bulb and pipette to achieve maximum removal from the thimble. Remove residue from the receiving flask with a wash bottle and about 5 ml of demineralized water (without antifoam), and with an aluminum spatula to aid in removing any possible charred solid residue, adding this washing to the 250 ml round-bottom flask. Remove solvent from the tobacco extract in the 250 ml round-bottom flask with rotary evaporator. To avoid excess foaming, which can occur with certain types of tobacco, adjust bleeder valve attached to condenser of rotary evaporator to bleed just enough air to retard foaming and to ensure continued condensation of water vapor on the spiral condenser. The water extract is dried in oven at 103 +/- 2 degrees C for four hours. Proceed with weighing and calculating in the same way as with ethyl alcohol in step .02.
.04 Summary of Extractions
(Summary not reproduced here)
SEC. 7. STATISTICAL EXPRESSION OF RESULTS
.01 The percent roll-your-own tobacco character of smoking tobacco is computed from two different combinations of three dry-weight extractions. The computations for roll-your-own tobacco character are based largely on the different casing materials added to smoking tobacco, with pipe tobacco having heavier casing or saucing additives than roll-your-own tobacco. Using the data tabulated in Tables I and II for roll-your-own and pipe tobacco respectively, we have developed two formulas for roll-your-own tobacco character computations.
(Formulas not reproduced here)
SEC. 8. INQUIRIES.
Any inquiries concerning this ATF Procedure should refer to its number and be addressed to the Director, Bureau of Alcohol, Tobacco and Firearms, 1200 Pennsylvania Avenue NW, Washington, DC 20226.
(27 CFR 24.249 EXPERIMENTATION WITH NEW TREATING MATERIAL OR PROCESS)
(27 24.250 APPLICATION FOR USE OF NEW TREATING MATERIAL OR PROCESS)
(27 CFR 25.61 GENERAL REQUIREMENTS FOR NOTICE)
(27 CFR 25.62 DATA FOR NOTICE)
ATF establishes guidelines for submission of requests for approval of new materials to be used in the production of beer (or cereal beverages).
SECTION 1. PURPOSE.
The purpose of this procedure is to establish guidelines that will assist brewers and their chemical suppliers in obtaining approval from the Bureau of Alcohol, Tobacco and Firearms (ATF) for the use of materials not previously authorized for use in the production of beer (and cereal beverages).
SEC. 2. CANCELLATION
ATF Procedure 77-1 is hereby cancelled. The procedures for a winemaker to use in applying for permission to experiment with or use new treating materials or processes were incorporated in 27 CFR 24.249 and 24.250, respectively, by Treasury Decision ATF-299. The procedures outlined herein supersede ATF Procedure 77-1 as it relates to beer (and cereal beverages).
SEC. 3. BACKGROUND.
01. To insure that the substances used in the production and processing of beer (and cereal beverages) are safe for human consumption and to insure proper classification of such products, ATF exercises control over the materials that may be used in the production of beer (and cereal beverages). Materials authorized by ATF for the production of beer (and cereal beverages) are periodically included in the Adjunct Reference Manual published by Beer Institute.
02. To avoid unnecessary expansion of the official approved materials lists and to avoid the administrative expense of processing premature applications, ATF must have assurance that brewers have a genuine interest in using a new material before consideration will be given to its authorization. Therefore, ATF will accept applications for use of new materials only from brewers. Chemical manufacturers should work with interested brewers to obtain authorization for the use of new products, using the guidelines provided herein.
SEC. 4. GUIDELINES.
01. Application for approval of the use of a new material in brewing may be submitted by any brewer and must be accompanied by the following, as applicable:
A. The name and description of the material;
B. The purpose, the manner, and the extent to which the material is to be used together with any technical bulletin or other pertinent information relative to the material;
C. A sample of the proposed material (upon request from ATF);
D. Documentary evidence of the Food and Drug Administration's approval of the material for its intended purpose in the amounts proposed for the particular treatment contemplated;
E. The test results of any laboratory scale pilot studies conducted by the brewer in testing the material and an evaluation of the product and of the treatment including the results of tests on the shelf life of the treated product;
F. A tabulation of pertinent information derived from the testing program conducted by the chemical manufacturer demonstrating the function of the material;
G. A list of all chemicals used in compounding the treating material and the quantity of each component;
H. The recommended maximum and minimum amounts, if any, of the material proposed to be used in the treatment; and
I. Two 750-milliliter samples representative of the beer (or cereal beverage) before and after treatment. Three 12-ounce bottles or cans may be substituted for each 750-milliliter sample.
02. Information of a confidential or proprietary nature to the manufacturer or supplier of the treating material may be forwarded by the manufacturer or supplier directly to the Alcohol and Tobacco Programs Division, with a reference to the application filed by the brewer. Information contained within the brewer's application can be disclosed to the public, subject to the limitations of 26 U.S.C. 6103 and 7213.
SEC 5. INQUIRIES.
Inquiries concerning this procedure should refer to it by number and be addressed to the Alcohol and Tobacco Programs Division, Bureau of Alcohol, Tobacco and Firearms, 650 Massachusetts Avenue, NW, Washington DC, 20226.
(27 U.S.C. 205, Unfair Competition and Unlawful Practices)
(27 CFR Part 7, Labeling and Advertising of Malt Beverages)
ATF is providing guidelines for brewers and bottlers for the labeling of imported malt beverages bottled or packed in the United States, and for the labeling of blends of imported and domestic malt beverages bottled or packed in the United States
SECTION 1. Purpose. The purpose of this procedure is to provide guidance to bottlers and packers of imported malt beverages which are bottled or packed at domestic breweries, and to provide guidance to bottlers and packers for the labeling of blends of imported and domestic malt beverages bottled or packed in the United States.
SEC. 2. Background. As part of the Taxpayer Relief Act of 1997, Public Law 105-34, Congress enacted a new provision in the Internal Revenue Code of 1986 which permits the transfer of beer in bulk containers from customs custody to internal revenue bond at a brewery. After transfer to internal revenue bond at a brewery, imported beer may be bottled or packed without change or with only the addition of water and carbon dioxide, or may be blended with domestic or other imported beer and bottled or packed. This provision of the Taxpayer Relief Act of 1997 is effective on April 1, 1998.
SEC. 3. Existing law and regulations. The Federal Alcohol Administration Act, 27 U.S.C. § 205(e), gives the Secretary authority to prescribe regulations regarding the labeling and advertising of malt beverages. Regulations at 27 CFR Part 7, Labeling and Advertising of Malt Beverages, contain requirements for the labeling of malt beverages. Section 7.22 prescribes mandatory information which must appear on malt beverage labels. Section 7.25 prescribes mandatory label language identifying the importer, bottler, or packer of a malt beverage. These existing provisions of part 7 address the labeling of imported malt beverages which are bottled prior to their importation into the United States, and the labeling of domestic malt beverages bottled or packed in the United States. Regulations in part 7 do not address either the labeling of imported malt beverages which are bottled in the United States, or imported malt beverages which are blended with other imported malt beverages or with domestic malt beverages, and then bottled or packed in the United States.
SEC. 4. Country of origin requirements for imported malt beverages.
.01 Malt beverages which are imported into the United States, transferred from customs custody to internal revenue bond at a brewery, and bottled or packed at the brewery, without change following importation, retain their identity as products of their country of origin.
02. Imported malt beverages which are not blended with domestic malt beverages, and which do not contain flavors or any other ingredients (other than water) added at a domestic brewery, retain their status as products of foreign origin. The addition of water and/or carbon dioxide to an imported malt beverage does not change its status as a product of its country of origin.
.03 Malt beverages of foreign origin bottled at a domestic brewery must be labeled with the country of origin under U.S. Customs Service regulations.
04. Treatment of an imported malt beverage at a domestic brewery with functional materials such as preservatives, stabilizers, clarifying agents, and the like, recognized for use in the brewing industry, will not result in the loss of its identity as a product of its country of origin unless the country of origin prohibits the treatment of malt beverages with such materials.
SEC. 5. Name and address requirements for imported malt beverages.
.01 Under § 7.25(b), the name and address of the importer of a malt beverage which is bottled or packed at a domestic brewery must appear on the label, preceded by the phrase "imported by," or a similar appropriate phrase.
.02 Under § 7.25(a), the name and address of the bottler or packer must appear on labels of domestic malt beverages bottled or packed in the United States. Accordingly, labels of imported malt beverages which are bottled or packed in the United States at a domestic brewery must contain, in addition to the required name and address of the importer, the name and address of the domestic bottler or packer, preceded by the phrase "bottled by" or "packed by." The address will be the place where the malt beverage is bottled or packed, or may be the principal place of business of the bottler or packer, if the address shown is a location where bottling or packing takes place.
03. If the importer and the bottler or packer of an imported malt beverage are the same person, the label may show a single name and address preceded by the phrase "imported and bottled by," "imported and packed by," or similar phrase. The address shown on the label may be that of the principal place of business of the importer who is also the bottler or packer, provided the address shown is a location where bottling or packing takes place.
SEC. 6. Labeling of imported malt beverages which are treated or blended at domestic breweries. Malt beverages which are imported into the United States and transferred from customs custody to internal revenue bond at a brewery may be blended with domestic or other foreign malt beverages, and may be treated with flavors and other ingredients at the brewery. These imported malt beverages which are subsequently blended with domestic or other foreign malt beverages lose their identity as products of their country of origin.
01. The blending of an imported malt beverage with a malt beverage produced in the United States, or with a malt beverage produced in a different foreign nation, results in the malt beverage losing its identity as a product of its country of origin. Similarly, the addition of flavors or any other ingredients other than water or functional materials (such as adjuncts used for clarifying or stabilizing) to an imported malt beverage at a domestic brewery results in the malt beverage losing its identity as a product of its country of origin.
02. Imported bulk malt beverages which have lost their identity as products of their countries of origin may not be labeled with a country of origin statement, and the name and address of an importer may not appear on the label of such malt beverages. The name and address of the brewer who bottles or packs such malt beverage will appear on the label preceded by the phrase "bottled by" or "packed by." If the malt beverage is a blend of an imported malt beverage with another malt beverage of foreign or domestic production, the phrase "blended and bottled by," or "blended and packed by" shall appear on the label in lieu of "bottled by" or "packed by."
SEC. 7. Labeling of sake. The labeling of imported sake, whether or not blended with domestic sake, which has been transferred to a domestic brewery from customs custody and which is bottled or packed at a domestic brewery, is governed by regulations in 27 CFR Part 4, Labeling and Advertising of Wine.
SEC. 8. Certificate of label approval requirements. Bottlers and packers of imported malt beverages, including blends of imported and domestic malt beverages, bottled or packed at a domestic brewery, are responsible for obtaining Certificates of Label Approval to cover the bottling or packing of such malt beverages. Blends of imported and domestic malt beverages will receive the class and type code for a domestic malt beverage of the appropriate class and type.
SEC. 9. Effective date. This procedure is effective as of April 1, 1998, and will remain in effect until revoked or superseded, or replaced by regulations implementing the provisions of section 1421 of Public Law 105-34.
SEC. 10. For further information contact:
Chief, Regulations Division
Bureau of Alcohol, Tobacco and Firearms
650 Massachusetts Avenue, NW
Washington, DC 20226
Telephone (202) 927-8230.
signed by: Bradley Buckles 3/25/98
(26 U.S.C. 5418, Beer imported in bulk)
(27 CFR Part 25, Beer)
(27 CFR Part 251, Importation of Distilled Spirits, Wines, and Beer)
ATF is providing guidelines to importers and brewers in order to permit the importation of beer in bulk containers and its transfer, without payment of tax, from customs custody, to internal revenue bond at a brewery.
Section 1. PURPOSE.
The purpose of this procedure is to provide brewers and importers with immediate guidance for importing beer in bulk containers and transferring it to internal revenue bond at a brewery where it may be bottled, filled into kegs, and removed on determination of tax, or without payment of tax.
Sec. 2. BACKGROUND.
As part of the Taxpayer Relief Act of 1997, Public Law 105-34, Congress included a new provision which permits the transfer of beer in bulk containers from customs custody to internal revenue bond at a brewery, without payment of tax. Section 1421 of the Taxpayer Relief Act added a new 5418 to the Internal Revenue Code of 1986 (IRC), effective April 1, 1998, which reads as follows:
Sec. 5418. Beer imported in bulk.
Beer imported or brought into the United States in bulk containers may, under such regulations as the Secretary may prescribe, be withdrawn from customs custody and transferred in such bulk containers to the premises of a brewery without payment of the internal revenue tax imposed on such beer. The proprietor of a brewery to which such beer is transferred shall become liable for the tax on the beer withdrawn from customs custody under this section upon release of the beer from customs custody, and the importer, or the person bringing such beer into the United States, shall thereupon be relieved of the liability for such tax.
Sec. 3. EXISTING LAW AND REGULATIONS.
Under provisions of the IRC in effect both before and after April 1, 1998, beer may be imported or brought into the United States in containers of any size. Section 5051(a)(1) imposes an internal revenue excise tax of $18 per barrel of 31 U.S. gallons on all beer imported into the United States. Under 5054(a)(2), the tax on imported beer is payable at the time of importation, or if entered for warehousing, at the time of removal from the first such warehouse. Imported beer brought into the United States in bottles or kegs is taxpaid at the time of its release from customs custody, and is moved into wholesale and retail distribution channels for sale to consumers. Before April 1, 1998, imported beer brought into the United States in bulk containers was required to be taxpaid at the time the containers were released from customs custody. This procedure may still be followed; however, taxpaid beer may not be brought onto bonded brewery premises. After imported bulk beer is taxpaid and released, such beer may be taken to an unbonded facility and bottled or placed into kegs for sale to consumers. Before April 1, 1998, there was no provision in the IRC or implementing regulations in 27 CFR parts 25 or 251 to import beer into the United States and transfer it to internal revenue bond, thus deferring the tax payment on such beer until such time as the beer is removed from internal revenue bond.
Sec. 4. CHANGES MADE BY PUBLIC LAW 105-34.
Under the provisions of Section 1421 of Public Law 105-34, beer may be imported in bulk containers, released from customs custody and transferred to internal revenue bond at a brewery. Upon release of the beer from customs custody, the importer is relieved of the liability for the tax on the beer, and the brewer assumes the liability for the tax on the Brewer's Bond. The tax on such imported beer is ultimately determined at the time beer is removed from the brewery for consumption or sale, and is paid by the brewer by return as provided by 5061. Such beer may also be removed from the brewery without payment of tax for any purpose authorized by 5053.
Sec. 5. BOND COVERAGE REQUIRED.
Prior to receiving beer transferred from customs custody to internal revenue bond, the brewer must obtain bond coverage for the internal revenue tax liability on bulk beer transferred from customs custody to internal revenue bond. Until the Brewer's Bond, Form 5130.22, is revised to include this coverage, a brewer may file a Consent of Surety, Form 1533, to cover the tax liability. Consents of Surety will be executed as provided in 25.92, and the "change covered by this consent" will read as follows:
"To continue in effect and extend the terms and conditions of such bond, including all exclusions and limitations of such terms and conditions previously consented to and approved, to cover the tax for which the principal shall become liable, on all beer withdrawn from customs custody in bulk containers and transferred to internal revenue bond at a brewery premises."
Brewers holding a Brewer's Bond, Form 5130.22, in less than the maximum penal sum must ensure that the penal sum of their existing bond is adequate to cover any additional tax liability resulting from the transfer of imported beer to internal revenue bond. A superseding or strengthening bond, accompanied by the consent described above, should be used to increase the penal sum, if necessary.
Sec. 6. CONDITIONS FOR THE IMPORTATION OF BEER IN BULK CONTAINERS AND ITS TRANSFER TO BREWERY PREMISES.
Beginning April 1, 1998, beer may be imported in bulk containers and transferred without payment of tax from customs custody to internal revenue bond at the brewery. Importers and brewers shall comply with the following conditions in order to transfer beer under 5418.
.01 The brewer will obtain appropriate bond coverage as outlined in Section 5.
.02 Beer will be imported in containers larger than one barrel of 31 gallons. Imported beer containing any distilled spirits, wine, or cider; sake containing any distilled spirits; and beer concentrated by the removal of water, may not be imported and transferred to internal revenue bond under section 5418 because these products are generally not classified as beer under the IRC. Sake containing no added distilled spirits and high gravity beer are considered beer for purposes of transfer to internal revenue bond.
.03 If a brewer imports the beer, the brewer shall hold a basic permit issued under the Federal Alcohol Administration Act (FAA Act) as an importer of malt beverages. If purchasing the beer from an importer for resale at wholesale, the brewer shall hold a basic permit issued under the FAA Act as a wholesaler of malt beverages. If sake is being imported, the brewer shall hold a basic permit under the FAA Act as an importer or wholesaler of wine.
.04 On release of the beer from customs custody, the importer will prepare a transfer record documenting the transfer of the beer and maintain such record. This record will identify the importer and will show the number of containers transferred and quantity of beer within each container, the foreign origin of the beer, the customs entry number, amount of duty paid, kind of beer, and identification of the foreign brewer. A copy of this record will be furnished to and maintained by the brewer if the brewer is not the importer.
.05 Imported beer is subject to tax at the rate prescribed by 5051(a)(1) on its removal from the brewery for consumption or sale. Imported beer is not eligible to be taxpaid at the reduced rate of tax provided for by 5051(a)(2). For the purpose of determining the 2,000,000 annual barrel limitation for eligibility to pay the reduced rate of tax, a brewer may exclude the quantity of imported beer transferred to internal revenue bond during a calendar year, provided such imported beer is not produced by that brewer or by a member of a controlled group which includes that brewer. Imported beer removed from the brewery subject to tax will not be counted in determining an eligible brewer's first 60,000 barrels of beer removed from the brewery during a calendar year. In the case of blends of foreign and domestic beer, the reduced rate goes only to the domestic part of the blend.
.06 Imported beer may be mingled with domestic beer at the brewery, and may be removed from a brewery without payment of tax for any purpose authorized by 5053. Imported beer may not be removed or withdrawn from brewery premises in the same container in which transferred from customs custody except for transfers to another brewery of the same ownership under 25.181.
.07 Imported beer is not eligible for credit or refund of tax for any reason prescribed by 5056. Imported beer is not eligible to be exported with benefit of drawback under 5055. Imported beer may not be returned to the brewery from which removed for an offset as provided by 25.159.
.08 Brewers will keep records documenting the transfer of imported beer from customs custody to brewery premises, the quantity of imported beer removed from the brewery subject to tax and without payment of tax, and the quantity of imported beer in any mixtures of beer removed or transferred from the brewery. Imported beer transferred to brewery premises will be reported on line 5a of the Brewer's Report of Operations, Form 5130.9.
.09 Brewers must maintain adequate records evidencing the appropriate tax payment of beer or the entitlement to credit or refund for beer lost, destroyed, or returned to the brewery. Records are necessary to assure that different components in a blend of imported and domestic beers receive the appropriate tax treatment. Adequate records as contemplated by this paragraph include, for example, a statement on the label or on a commercial invoice accompanying a shipment as follows "___ % Domestic Beer, ___ % Foreign Beer." A country of origin statement may be substituted for the term "foreign beer" on labels or on invoices.
.10 Transfer of beer from customs bond to internal revenue bond under 5418 does not constitute tax determination. Therefore, a brewer need not file claims for losses of imported beer on brewery premises in circumstances for which claims are not required for domestic beer under current regulations (such as in the case of losses during storage or bottling).
Sec. 7. EFFECTIVE DATE.
This procedure is effective April 1, 1998, and will remain in effect until revoked or superseded, or replaced by regulations implementing the provisions of section 1421 of Public Law 105-34.
Sec. 8. FOR FURTHER INFORMATION CONTACT:
Chief, Regulations Division
Bureau of Alcohol, Tobacco and Firearms
650 Massachusetts Avenue, NW
Washington, DC 20226
Telephone (202) 927-8230.
signed by: Bradley Buckles 3/25/98
(26 U.S.C. 5364 - WINE IMPORTED IN BULK)
(27 CFR Part 24 - WINE)
(27 CFR Part 251 - IMPORTATION OF DISTILLED SPIRITS, WINES AND BEER)
SECTION 1. PURPOSE.
The purpose of this procedure is to establish guidelines that will assist importers and bonded wine premises proprietors in importing bulk wine in bond as authorized in 26 U.S.C. 5364, effective April 1, 1998. This procedure will remain in effect until the Bureau of Alcohol, Tobacco and Firearms (ATF) issues amended regulations covering operations on bonded wine premises and importation of wine to take this new law into account.
SEC. 2. BACKGROUND.
Section 1422 of the Taxpayer Relief Act of 1997 amended the Internal Revenue Code of 1986 (IRC) by adding a new section 5364, effective April 1, 1998, which provides as follows:
SEC. 5364. WINE IMPORTED IN BULK.
Wine imported or brought into the United States in bulk containers may, under such regulations as the Secretary may prescribe, be withdrawn from customs custody and transferred in such bulk containers to the premises of a bonded wine cellar without payment of the internal revenue tax imposed on such wine. The proprietor of a bonded wine cellar to which such wine is transferred shall become liable for the tax on the wine withdrawn from customs custody under this section upon release of the wine from customs custody, and the importer, or the person bringing such wine into the United States, shall thereupon be relieved of the liability for such tax.
Before the effective date of section 5364, all imported wine is required to be taxpaid upon removal from customs custody, and taxpaid bulk imported wine was transferred to the taxpaid premises of a bonded wine cellar or to a taxpaid wine bottling house because taxpaid wines are not permitted on bonded premises. Only treatments such as stabilizing, mixing and bottling (which do not increase the volume of taxpaid wine) are allowed on taxpaid premises. After April 1,1998, bulk imported wine may be transferred from customs bond to the premises of a bonded wine cellar. ATF will issue amended regulations covering this newly authorized activity, but this procedure is issued in the interim to insure that such transfers take place without jeopardy to the revenue, and to answer other questions resulting from this change.
SEC. 3. GUIDELINES.
.01 Before transferring imported wine in bulk containers from customs bond to internal revenue bond, a wine premises proprietor must obtain bond coverage for the internal revenue tax liability on bulk wine transferred from customs custody to internal revenue bond. Until the Wine Bond, Form 5120.36, is revised to include this coverage, proprietors must file a Consent of Surety. The Consent of Surety will be executed on ATF Form 1533 as provided in § 24.152, and will read as follows:
"To continue in effect and extend the terms and conditions of such bond, including all exclusions and limitations of such terms and conditions previously consented to and approved, to cover the tax for which the principal shall become liable, on all wine withdrawn from customs custody in bulk containers and transferred to internal revenue bond at a bonded wine premises."
Wine premises proprietors holding a Wine Bond, Form 5120.36, in less than the maximum penal sum must ensure that the penal sum of their existing bond is adequate to cover any additional tax liability resulting from the transfer of imported wine to internal revenue bond. A superseding or strengthening bond, accompanied by the consent described above, should be used to increase the penal sum, if necessary.
.02 Conditions on importation of bulk wine in bond prior to issuance of regulations implementing 26 U.S.C. 5364:
A. Bulk containers are defined in 27 CFR part 24 as containers larger than 60 liters (15.8502 gallons). No smaller container may be imported in bond.
B. The importer of wine must have an importer's basic permit issued under the Federal Alcohol Administration Act. If the bonded wine premises proprietor purchases the wine from the importer for resale at wholesale, the proprietor must have a wholesaler's basic permit issued under the Federal Alcohol Administration Act.
C. The same certificates of origin and identity that are required to support importation and label claims for taxpaid imports of bottled and bulk wines will be required for bulk wines imported in bond.
D. On release of the wine from customs custody, the importer will prepare and maintain a transfer record documenting the transfer of the wine. This record will identify the importer and will show the number of containers transferred and quantity of wine within each container, the origin of the wine, the customs entry number, amount of duty paid, kind of wine, and identification of the foreign producer. A copy of this record will be furnished to and maintained by the bonded wine premises proprietor if the proprietor is not the importer.
E. Imported wine transferred to bonded wine premises will be reported along with other wine received in bond on line 7 of Section A of the Report of Wine Premises Operations, ATF Form 5120.17.
F. Records of wine operations conducted on imported wine should be expanded to show the country of origin of the wine.
G. The limitations on wine treatments in part 24 will apply to imported wine on bonded wine premises. For example, amelioration is permitted only at the bonded wine premises where the wine is produced; if a natural wine has been ameliorated, it may only be sweetened by the winemaker who produced it; and wine spirits may only be added to natural still wine in the same State where it was produced by fermentation.
H. Imported wine may be subjected to authorized treatments or blended with other wine at the wine premises. However, if wine is to be labeled as a product of another country, it may only be subjected to treatments authorized for taxpaid wine under 27 CFR 24.296(b) and to other treatments only if such other treatments are permitted for wine made in the country of origin.
I. Imported wine is subject to tax at the rate prescribed by 26 U.S.C. 5041(b) on its removal from the wine premises for consumption or sale. Imported wine is not eligible for small domestic producer's wine tax credit provided for by 26 U.S.C. 5051(c). In the case of blends of foreign and domestic wine, any small domestic producer's wine tax credit will be computed only on the domestic part of the blend. Imported wine removed from the wine premises subject to tax will not be counted in determining an eligible small producer's first 100,000 gallons of wine removed from the premises during a calendar year.
J. Imported wine may be removed from bonded wine premises free of tax or without payment of tax for any purpose authorized by 26 U.S.C. 5362.
K. Bulk imported wine which is taxpaid by the domestic bonded wine premises proprietor is not eligible for credit or refund of tax for any reason. The refund and credit provisions of 26 U.S.C. 5044 are limited to domestic wines. However, blends of imported and domestic wines may be returned to bond, and credit or refund of tax may be claimed for the domestic portion of such blend. Imported wine and blends of domestic and imported wine may be returned to taxpaid wine premises for reconditioning.
L. Imported wine packaged in the United States may be exported with benefit of drawback under 26 U.S.C. 5062. Imported wine stored on bonded premises may be removed without payment of tax for export under 26 U.S.C. 5362. Exportation of imported wine is subject to the same requirements as exportation of domestic wine.
M. Taxpayers are reminded that they must maintain adequate records evidencing the appropriate tax payment or entitlement to credit or refund for product returned to bond. This information is needed in order to assure that the different component products receive the appropriate tax treatment. Adequate records as contemplated by this paragraph include, for example, a statement on the label or a commercial invoice accompanying the shipment as follows: " __% Domestic and __% Foreign wine, blended in internal revenue bond." (Specific appellations of origin may be substituted for the terms "domestic" and "foreign" where the wine so labeled qualifies for such appellation under the FAA Act)
03. Existing ATF policies concerning labeling of taxpaid imported bulk wine will be applied to bulk wine imported in bond. Any new questions which arise will be decided on a case by case basis.
04. Taxpayers are responsible for maintaining adequate records evidencing the appropriate tax payment or entitlement to credit or refund for product returned to bond. Failure to comply with any of the above conditions may result in the assessment of tax on any wine transferred from customs custody to internal revenue bond at the wine premises. Likewise, failure to maintain adequate supporting records may result in loss of varietal designation, appellation of origin, or other label claims.
SEC 4. EFFECTIVE DATE.
This procedure takes effect April 1, 1998 and will remain in effect until revoked, superseded. This procedure will be replaced by a temporary rule implementing the provisions of 26 U.S.C. 5364 on its effective date.
SEC 5. INQUIRIES.
Inquiries concerning this procedure should refer to it by number and be addressed to:
Regulations Division,
Bureau of Alcohol, Tobacco and Firearms,
650 Massachusetts Avenue, NW
Washington DC, 20226
Telehone: (202) 927-8230
signed by: Bradley Buckles 3/25/98
| Page last reviewed/updated: 09/13/2012 |
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