Home.TTB Wine FAQs
FAQs
Wine FAQs - Answer
Revised: 10/26/12
W1: How do I convert bottles of wine in metric sizes to U.S. gallons?
The following table depicts the conversion of metric bottle sizes to U.S. gallons.
WINE |
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| BOTTLE SIZE | EQUIVALENT FLUID OUNCES | BOTTLES PER CASE | LITERS PER CASE | U.S. GALLONS PER CASE | CORRESPONDS TO |
3 liters |
101 Fl. Oz. |
4 |
12.00 |
3.17004 |
4/5 Gallon |
1.5 liters |
50.7 Fl. Oz. |
6 |
9.00 |
2.37753 |
2/5 Gallon |
1.00 liters |
33.8 Fl. Oz. |
12 |
12.00 |
3.17004 |
1 Quart |
750 milliliters |
25.4 Fl. Oz. |
12 |
9.00 |
2.37753 |
4/5 Quart |
500 milliliters |
16.9 Fl. Oz. |
24 |
12.00 |
3.17004 |
1 Pint |
375 milliliters |
12.7 Fl. Oz. |
24 |
9.00 |
2.37753 |
4/5 Pint |
187 milliliters |
6.3 Fl. Oz. |
48 |
8.976 |
2.37119 |
2/5 Pint |
100 milliliters |
3.4 Fl. Oz. |
60 |
6.00 |
1.58502 |
2,3 & 4 Oz. |
50 milliliters |
1.7 Fl. Oz. |
120 |
6.00 |
1.585032 |
1, 1.6 & 2 Oz. |
Official Conversion Factor: 1 Liter = 0.264172 U.S. Gallon |
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W2: What is an American Viticultural Area?
An American Viticultural Area is a delimited grape-growing region having distinguishing features as described in part 9 of the TTB regulations, and a name and a delineated boundary as established in part 9 of the TTB regulations (27 CFR part 9).
W2a: Who can apply to designate a grape growing area as a viticultural area?
Any individual or group may petition TTB to designate a grape growing area as an American Viticultural Area.
W2b: How do I apply to get a grape growing area designated as a viticultural area?
To assist persons who wish to petition TTB for the creation or modification of an American Viticultural Area (AVA), TTB has created the AVA Manual for Petitioners. The manual includes guidance on how to prepare a petition, as well as tables to help persons collect and evaluate information on distinguishing features. TTB encourages petitioners to review the manual before drafting or submitting a petition.
W3: What American Viticultural Areas are already approved?
Subpart C of part 9 of the TTB regulations (27 CFR part 9) lists and describes all approved AVAs. TTB also maintains a list of established AVAs, as well as a listing of AVA petitions that have been accepted as perfected, but for which a Notice of Proposed Rulemaking has yet to publish.
W4: What are Home Winemakers' Centers and what Federal regulations apply?
Home Winemakers' Centers are places where an individual (home winemaker) pays a fee to use space and equipment to make wine for personal or family use. Although we refer to the individual making wine for personal or family use as a "home winemaker," the wine may be made somewhere other than the individual's residence, including a Home Winemakers' Center.
Under the following conditions, Home Winemakers' Centers do not need to qualify under Federal rules as a bonded winery or pay Federal excise tax on wine that is produced at the Home Winemakers' Center:
1. Customers may only make wine for personal or family use. The customer must meet the requirements shown in 27 CFR 24.75.
a. The individual must follow applicable State and local laws.
b. The individual must be 18 years of age or the legal age to purchase wine in the locality, whichever is older.
c. The individual may produce, without payment of Federal excise tax, per household, up to 100 gallons of wine per calendar year if there is one adult residing in the household, or 200 gallons if there are two or more adults residing in the household.
d. The individual may remove wine from the place where it is made for personal or family use, including use in contests or tasting.
e. The individual may not produce wine for sale or offer wine for sale.
2. The operator of a Home Winemakers' Center must learn and comply with all permit, license and tax requirements of State and local law and conduct operations in compliance with State and local law. If State and local laws impose different requirements or limitations than Federal law and regulations, the stricter rules and limits apply.
3. The operations must never "cross the line" to commercial production or sale of wine. Operators and employees of Home Winemakers' Centers:
a. May furnish space, equipment, ingredients, bottling supplies, and advice to customers.
b. May provide certain assistance to customers including:
i. Moving containers of wine between storage areas.
ii. Cleaning, maintenance, and repair of equipment.
iii. Climate and temperature control.
iv. Disposal of wastes.
v. Quality control (including laboratory analysis and tasting of wine for quality control purposes).
c. May not ferment juice, filter or bottle wine, add ingredients to wine, or provide physical assistance in producing or bottling wine.
d. May not provide non-tax paid wine to customers or prospective customers for sampling or other reasons.
Operation of a Home Winemakers' Center in a manner contrary to the conditions outlined above will cause the facility to be considered a commercial winery, subject to all statutory and regulatory provisions relating to winery operation including registry and bonding requirements as well as possible liability for back taxes.
A TTB qualified bonded winery may operate a Home Winemakers' Center under the following conditions:
1. If a Home Winemakers' Center is located on winery premises, all wine produced there is considered to be wine produced by the winery.
2. The wine so produced is taxable under Federal law and is subject to production, reporting, recordkeeping, and labeling regulations.
3. The Home Winemaker's Center production will be included in the winery production records.
For further information regarding qualification of a bonded wine premises or operation of a Home Winemakers' Center at bonded wine premises, contact:
The Alcohol and Tobacco Tax and Trade Bureau
National Revenue Center
550 Main Street, Cincinnati, OH 45202
Telephone 1-(877) 882-3277
W5: What are the rules covering on premises sales and tasting of wine?
Regulations covering the requirements related to tax-free use of wine for tasting are found in 27 CFR 24.97(b) and (c). Under these regulations, as a winery proprietor, you may transfer wine to a bonded tasting area without payment of tax for use in wine tastings. You must record the quantity of wine transferred in your records as required by 27 CFR 24.97(b). Report this amount on form TTB F 5120.17, Section B, line 11. You must pay tax on any wine that you transfer if:
1. You do not use it for tastings in the bonded tasting area; or
2. The tasting room is not located on bonded premises.
If you sell wine in your bonded tasting room, you must pay the tax on that wine. At the time of sale, you must record the wine as removed from the bonded premises. As an alternative, you may designate a suitable tax paid storage area and record the wine as removed when it is transferred to that tax paid storage area.
If you charge for a winery tour (in order to taste the wine) or for the wine that you serve in the tasting room, or if you sell wine to visitors, you are considered a retailer. The approval of your bonded wine premises registers you for retail and wholesale operations at the same premises. If you have additional sales locations you must register those locations by filing form TTB F 5630.5(d) and must keep records for sales at each location. See the dealers' regulations at 27 CFR 31 and regulation 24.52.
If the development of your tasting area (and any related tax paid area to supply retail sales) affects information on your bonded wine cellar application, you must amend your description of premises by filing the next serial number form TTB F 5120.25 or by using Permits Online if the original application was approved through Permits Online. TTB F 5120.25 should be mailed to:
Director, TTB National Revenue Center
550 Main Street Suite 8002
Cincinnati, OH 45202
If you have questions, contact the National Revenue Center by e-mail at WineryorBondedWine@ttb.gov or by telephone at (877) 882-3277.
W6: Where can I find information on computing and paying the tax on wine?
For a brief overview of the basic requirements for the proper computation and filing of wine excise taxes, please see our "Quick Reference Guide to Wine Excise Tax".
W7: What are the rules for transferring small domestic producer's tax credit?
Many small wine producers with limited space at their own wineries elect to transfer wine to other bonded wine premises (often commercial bonded wine cellars, or "BWCs") for storage and distribution. Small wineries often pay the excise tax on their wine before shipping it to a BWC, in order to make use of the Small Domestic Producer's Tax Credit. Under certain conditions, small wine producers have the option of transferring the use of their credit to other bonded wine premises, to be used when their wine is removed for consumption or sale (tax paid).
Who is eligible for the Small Domestic Producer's Credit?
Producers of not more than 250,000 gallons of wine are eligible for a credit which lowers the tax due on the first 100,000 gallons of wine taxably removed each calendar year. The amount of allowable credit begins to decrease as production exceeds 150,000 of wine and is entirely gone when production exceeds 250,000 gallons.
Non-producing wine premises and companies which produce more than 250,000 gallons per year are generally not eligible to use the Small Domestic Producer's Credit when making taxable removals from their bonded premises. The exception is when the credit is transferred by an eligible small producer to another taxpayer (a "transferee"), to be used on its behalf. A transferee is often a Bonded Wine Cellar (BWC), but it may be any bonded wine premises.
What wine is eligible for transfer of the Small Domestic Producer's Credit?
Credit may be transferred on wine which was produced by a winery that is eligible for the credit. The wine regulations define "produced" as wine produced by fermentation and any volume increases to wine due to amelioration, wine spirits addition, sweetening, and the production of formula wine (see 27 CFR 24.278(e)(1)).
When may a winery transfer its credit to another taxpayer?
The following four conditions must be met before a transferee may use credit on behalf of an eligible small wine producer:
1. The wine produced by the small winery would be eligible for small winery tax credit if removed from its own premises.
2. The transferee becomes liable for the tax when it receives the wine in bond.
3. The producer holds title to the wine at time of taxable removal.
4. The producer provides credit information to the transferee in writing each time wine is to be tax paid.
What must be in the written statement that is sent to the transferee?
The written statement must contain the following:
1. The names of the producer and the transferee
2. The quantity and tax class of wines to be shipped
3. The date the wine is to be removed from bond for consumption or sale
4. Confirmation that the producer is eligible for credit and credit rate to which the wine is entitled
5. Confirmation that the shipment is within first 100,000 gallons removed by (or on behalf of) the producer for the calendar year
What does the producing winery show on its Reports and Returns?
The producing winery shows the transfer in bond to the transferee on its Report of Wine Premises Operations form TTB F 5120.17. It does not show the taxable removal on its tax returns or on its Report of Wine Premises Operations form TTB F 5120.17.
What does the transferee show on its Reports?
The transferee shows the receipt of wine transferred in bond from the producing winery on its Report of Wine Premises Operations form TTB F 5120.17.
How is the Excise Tax Return Prepared?
When the producer asks the transferee to make the taxable removal with its credit, the transferee shows the taxable removal of the wine from its Report of Wine Premises Operations form TTB F 5120.17.
The transferee pays the tax and in Schedule B of the Excise Tax Return Form, form TTB F 5000.24, lists:
- The names of the producers for whom credit is being taken
- Their credit rates
- The total credit taken on behalf of each
Example of Schedule B
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EXPLANATION OF INDIVIDUAL ERRORS OR TRANSACTIONS |
AMOUNT OF ADJUSTMENTS |
|
(a) |
(b) TAX |
(c) INTEREST |
30. ABCD Cellars 2,377.5 gallons @ $.90 credit |
$ 2,139.75 |
$ |
31. XYZ Vineyards, 59.4 gallons @ $ .72 credit |
$ 42.77 |
|
32. |
|
|
33. SUBTOTALS OF COLUMNS (b) and (c) |
$ 2,182.52 |
$ |
34. TOTAL ADJUSTMENTS DECREASING AMOUNT DUE (Line 33, Col (b) + (c)) Enter here and on line 20. |
$ 2,182.52 |
|
What is the limit for making taxable removals using the Small Domestic Producer's Credit?
The limit from all locations combined each calendar year is 100,000 wine gallons. The producer must keep track of all taxable removals being made on its behalf. After 100,000 gallons have been removed with credit from all locations, the producer's taxable removals must be made at the full rates (without credit) for the rest of the calendar year. This is why the transferee must receive written notice prior to each removal.
If the producer blends wine into its wine that it did not produce, can credit still be taken?
It depends on how the wine is removed. Credit is not transferable on wine which was not produced by the small producer. If that wine was blended into the small producer's wine, the taxpayment should be made at small producer's premises for full benefit of the credit.
The alternative is to notify the transferee in the written notice about the percentage of the wine which is ineligible for credit. The ineligible portion can then be taxpaid by the transferee at the full tax rate.
Can the producer transfer credit on wine it produced for a custom crush customer?
Yes, but only if the producer holds title to the wine at the time of removal from bond (see 27 CFR 24.278(b)(2)(iii)). If the custom crush customer holds title to the wine, the credit may not be transferred to another taxpayer, and the taxpayment should be made from the producer's winery.
How are increasing and decreasing adjustments shown on the Excise Tax Return?
If, at the end of the calendar year, it is determined that the winery produced more wine than expected, making the credit rate which was used incorrect, all parties that have used the winery's small producer credit must make increasing tax adjustments. Also, if the producer fails to produce any wine during the year, the taxpayers must make an increasing adjustment during the last period of the calendar year.
If too much tax was paid on behalf of the producer, such as if the incorrect rate of credit was used, the transferees and any other taxpayers who used the winery's credit may file a claim on behalf of the producer. When the claim is approved by TTB, the taxpayers may make a decreasing tax adjustment in the form of a credit, or request a refund.
Summary of "Who Does What..."
1. Producer sends wine to transferee (i.e., BWC) with a transfer in bond record.
2. Producer shows wine has been transferred in bond on Report form TTB F 5120.17.
3. Producer asks the transferee in writing to remove certain wine from bond.
4. Transferee shows taxable removal on its form TTB F 5120.17 and pays the tax with producer's applicable credit rate.
5. Producer keeps track of how much wine has been taxably removed from any/all transferee facilities, keeping 100,000 total removals per year in mind.
6. Increasing or decreasing tax adjustments are made by the entities that taxably removed wine, and not the producer.
See 27 CFR 24.278-.279 for the complete text of small domestic producer's credit regulations.
W8: What are the rules for transfer of unlabeled bottled wine?
TTB has received inquires about the transfer, labeling, recordkeeping and taxpayment of unlabeled bottled wine (sometimes called “shiners”).
When unlabeled bottled wine is transferred among two or more bonded wine premises for aging or labeling, the bottler must provide a copy of the approved Application For And Certification/Exemption of Label/Bottle Approval (COLA) TTB Form 5100.31 under which the wine was bottled. The transfer in bond record which accompanies the wine must be accurate and specific, and the label information record for the wine must fully support any claims made on the label to be affixed to the wine.
The responsibility for transferring accurate label information is not that of the producer alone; it is the responsibility of all holders of the wine from the time it is produced until it is removed from bond for consumption or sale.
Here are guidelines for the various parties that may be involved when unlabeled bottled wine is transferred among bonded premises:
What are the responsibilities of the Producer?
The producer of the wine must ensure that the transfer in bond record required by 27 CFR 24.309 contains accurate and specific label information for all bulk wine shipped in bond (or taxpaid) to another premises for bottling. This allows the bottler to apply for a COLA and ensures that the product label is correct.
What are the responsibilities of the Bottler?
The bottler obtains a COLA which can be substantiated by the transfer record which accompanied the wine from the producer. Unless the wine will be bottled at a taxpaid wine bottling house, the bottler will make sure that the wine to be bottled is received and maintained on bonded (not taxpaid) premises. The bottler maintains records in accordance with 27 CFR 24.308.
If the bottler transfers unlabeled bottled wine to another bonded premises for labeling, the bottler must send the wine in bond (untaxpaid) with the COLA under which the wine was bottled. If a different product label will be affixed, the bottler must obtain a correct COLA, and forward it to the premises where the label will be affixed. The transfer in bond record that accompanies the bottled wine must contain accurate and specific information which substantiates the product label, as specified by 27 CFR 24.309. However, if unlabeled bottled wine is transferred to another bonded premises for aging only, and will be subsequently returned to the bottler for the affixing of the product label, the COLA does not have to accompany the shipments.
To reiterate, an approved label which accompanies the wine must carry the minimum label requirements, but it might not be the label eventually affixed to the product. The label used to bottle the wine is sometimes referred to as the “generic” label. The bottler may apply for another COLA for a product label with specific label claims, as long as the claims are substantiated by the label information record requirements of 27 CFR 24.314.
What does the Labeler receive from the Bottler?
The person who will affix the product label receives the unlabeled, untaxpaid bottled wine, the COLA for the product label to be affixed, and the transfer in bond record (27 CFR 24.309) which contains accurate and specific information which substantiates the label claims.
Only the bottler of the wine may apply for a COLA. If the owner of unlabeled bottled wine wants to label the wine with a label other than that which accompanied the wine, the bottler must be contacted, and the bottler must work with the owner to obtain an approved product label which is fully substantiated by the label information record for that wine.
What if the bottler is unable to provide a COLA?
If the bottler of the wine is unable to obtain label approval for the wine to be labeled, the wine may only be labeled if it is dumped to bulk and re-bottled. It may be re-bottled when an appropriate COLA is obtained by the bottler. The label may not contain any information which is not fully supported by the label information record for the wine.
What is the responsibility of the person who removes the wine from bond?
If the labeled wine is transferred in bond to another bonded wine premises for taxable removal, it must be accompanied by the transfer in bond record (27 CFR 24.309) which contains accurate and specific information which substantiates the label claims.
The person who pays the tax on the wine is the qualified proprietor of a bonded winery or bonded wine cellar, and not a wholesaler, wine broker, agent, negotiant, retailer, consumer or, necessarily, the actual owner of the wine. Bottled wine may not be removed from bond (i.e., tax paid) without a COLA and an approved product label being affixed. This requirement is given in the wine regulations at 27 CFR 24.257(a) which states in part: “The proprietor must label each bottle or other container of beverage wine prior to removal for consumption or sale.”
How long must the records be kept?
All records must be retained for a period of not less than three years from the record date or the date of last entry required to be made in the record, whichever is later.
However, TTB may require records to be kept for a period of not more than three additional years, if deemed necessary.
updated Dec. 14, 2010
W9: Approved Grapes Names for American Wines
Please see 27 CFR 4.91 for a complete list of grape names approved as type designations for American wine.
W9a: Name approved under 27 CFR 4.92 for use on wines bottled prior to January 1, 2006.
Johannisberg Riesling
W9b: Names approved pending formal rulemaking.
TTB has received petitions for the following grape names that contain sufficient evidence for us to approve their use on American wine labels in accordance with and subject to TTB regulations contained in 27 CFR part 4. TTB’s Advertising, Labeling and Formulation Division is therefore approving COLAs for American wines designated with these grape variety names. We periodically publish changes to the list of approved grape variety names contained in our regulations at 27 CFR 4.91. Any final rule action will supersede letter approvals of grape variety names. Also, these approvals are for the purposes of the U.S. market and do not imply that the use of the names is acceptable in other countries.
Please see currently approved grape names
W10: Can I share a bonded wine premises?
Engaging in the business of producing commercial wine without a permit is an unlawful activity under the Federal Alcohol Administration Act (27 U.S.C. 203(b)(1)). The production is a violation of the Internal Revenue Code (26 U.S.C. 5351) as well. The Internal Revenue Code requires that an application be submitted, a bond filed and approval received for the commercial production of wine. Both the winery owner and the non-approved person using the equipment can be held responsible for any violation of Federal law and regulations.
The winery owner that allows an unapproved person to use the bonded winery facility for production of wine is in violation of federal regulations that require notification to TTB when another business is being conducted on the premises.
Tax on the wine produced by the person "borrowing" the equipment and facilities. Each failure to keep records, to include information on reports or to pay taxes is a violation of Federal regulations under the Internal Revenue Code. Mislabeling wine is a violation of the Federal Alcohol Administration Act.
People who are interested in producing commercial wine, but who may not have the necessary equipment and facilities, should consider establishing an alternating proprietorship on bonded wine premises. Under an approved alternating proprietorship a part or all of the premises will be alternated between approved proprietors. Each proprietor will conduct independent operations when the premises are alternated to their winery. For more information about alternating proprietorships, please see 27 CFR 24.136 and Industry Circular 2008-4.
W11: What is a "Custom Crush" arrangement and what are the Federal requirements for "Custom Crush" clients and winemakers?
In a typical custom crush arrangement, a grape grower or any person with winemaking materials (the "client") enters into a contract with a bonded winery proprietor to have the grapes processed into wine. The client retains title to the grapes, and the wine is made to the client's specifications. The finished wine is returned to the client for sale to other dealers, or the winery sometimes sells the wine on behalf of the client.
The custom crush client may be required to obtain a Federal Wholesaler's Basic Permit from TTB. This permit allows the client to engage in the business of purchasing wine for resale at wholesale, in accordance with the Federal Alcohol Administration Act at 27 U.S.C. 203(c)(1) and 27 CFR 1.22. Although the client is specifically paying for the producer's services, the client has purchased wine (within the broad meaning of the term) at the price set in the agreement. If the client engages in activities normally associated with wholesaling, such as setting the price for the wine, determining which dealers will be sold the wine, and controlling and paying for advertising of the product, the client must have a wholesaler's basic permit. If, however, the client merely receives the proceeds from the sale by the winery of the resulting wine, a permit would not be required.
The custom crush client who engages in the business of selling wine is liable for Registration as a Liquor Dealer. The holder of a federal permit is automatically registered to sell at the address shown on the permit. If selling at retail at a location where you do not hold a valid producer, blender, wholesaler or importer permit, the retailer must register that location by filing TTB F 5630.5(d). There is no cost for registration.
Bonded winery proprietors must ensure that the receipt of winemaking materials and the ensuing activities associated with the production of custom crush wine is properly recorded. TTB reminds the industry that wine produced for custom crush clients carries the same regulatory requirements for recordkeeping, reporting, labeling and taxation as wine made for the winery itself.
The bottling winery is responsible for obtaining an appropriate Certificate of Label Approval, and the wine premises which removes the wine from bond is responsible for payment of Federal excise tax at the rate appropriate for the producing winery. For the purposes of determining eligibility for the Small Domestic Producer's Credit, all wine produced for clients must be included in the production and removal calculations (see 27 CFR 24.278-9).
W12: May I sell home-produced wine?
No. Under 26 U.S.C. 5042 and the implementing regulations in 27 CFR 24.75(a), wine produced for personal or family use may never be sold or offered for sale. Only wine produced at a fully qualified bonded wine premises may be sold or offered for sale.
W12a: I am a home winemaker and am applying for a permit to operate a winery. Will I be allowed to sell or store my home-made wine at my new bonded wine premises?
No. Wine that you produce as a home winemaker is produced under the regulations that apply to wine made for personal or family use. You may never sell that wine or offer it for sale. Additionally, wine that you produce as a home winemaker may not be stored on bonded wine premises.
W12b: I am a home winemaker and am applying for a permit to operate a winery. Before my application and bond are approved, is there a way for me to make wine that I will be allowed to sell at my new bonded wine premises?
A home winemaker that is planning to become the proprietor of a newly established bonded winery ("a") and wishes to have a starting wine inventory can have wine produced by an existing, fully qualified bonded winery ("b") under a custom crush arrangement. When the applications and bond for the new winery ("a") are approved, the wine produced by the bonded winery ("b") for the new winery ("a") can be transferred in bond to the new winery's established premises and that wine may be sold or offered for sale. Please see our FAQ on custom crush arrangements for more information.
W13: How do I become a bonded wine premises?
Federal law requires that anyone wishing to conduct wine operations (other than as a home winemaker) must first establish premises, obtain a bond and receive permission from the Alcohol and Tobacco Tax and Trade Bureau (TTB). In addition, law requires that anyone wishing to produce or blend wine in the United States must first obtain a Federal Basic Permit from TTB.
W14: Does TTB regulate the production of home winemaking kits?
No, TTB does not. Winemaking kits typically contain concentrate, yeast, juice, acids, sulfites and wood chips, and provide sufficient materials to produce about 30 bottles of wine. Since the kits contain unfermented raw materials, they do not come under our jurisdiction. When the kits are used to produce tax-exempt wine for personal or family use, we do not regulate the labeling of wine made from the kits. However, we do regulate the labeling of any wine made commercially from the kits.
W14a: Does TTB endorse or certify the contents of winemaking kits?
No, TTB does not endorse or certify the contents of any winemaking kits. Commercial users of winemaking kits are fully responsible for obtaining the necessary information about the content of the kits to support any statements made on the label.
W14b: What rules apply if the proprietor of a bonded wine premises uses a winemaking kit to produce wine for sale?
TTB regulates the commercial production of wine under the Internal Revenue Code of 1986 (IRC) and the Federal Alcohol Administration (FAA) Act laws and regulations. These laws and regulations require that wine producers qualify their premises as a bonded wine cellar, obtain an FAA basic permit as a producer of wine, pay the applicable excise tax, and obtain a Certificate of Label Approval (COLA) for all wine that is bottled for sale in interstate commerce.
The IRC and FAA Act requirements apply to those who are engaged in the business of winemaking who intend to sell the wine or distribute it for commercial purposes, and apply equally to companies using kits and traditional winemaking materials. Information provided on the labels of all wine made for commercial purposes must be truthful and must adequately inform the consumer about the identity and quality of the product.
W14c: How should a proprietor of a bonded wine premises label wine made with a kit?
A proprietor of a bonded wine premises who is commercially producing wine from a wine kit must comply with TTB’s wine labeling regulations in 27 CFR part 4 and the Health Warning Statement regulations found in 27 CFR part 16, as well as any applicable State regulations.
In addition to the mandatory label statements required by 27 CFR part 4, TTB must be able to verify any optional statements used on wine labels. Examples of optional label claims include the varietal content (type of grape or grapes used), the appellation of origin (the geographic origin of the winemaking materials), and the vintage date (year of harvest). Winemakers using kits who wish to show any optional claims on the label must obtain appropriate records from the kit’s producer to verify the contents, the origin of the winemaking materials, the vintage date, etc.
When winemakers make optional claims on wine, additional regulatory requirements in 27 CFR part 4 are triggered, beyond the requirement to document the claims. For example, in order to use the name of a State as an appellation on the label, 75 percent of the grapes used in the wine must be from that particular State, and the wine must be fully finished in that State or an adjacent State (See. 27 CFR 4.25). If you buy a kit with 75 percent Washington State concentrate, but actually make the wine in Indiana, the wine is not entitled to a Washington State appellation of origin. With proper documentation, you could use "American" as the appellation of origin. Wine with an "American" appellation is not entitled to show a vintage date. Under 27 CFR 4.27, vintage dated wine must have an appellation of origin smaller than a country, and the records must show that 85 percent of the wine is derived from grapes harvested within the given year (95 percent for wines using a viticultural area).
W14d: How should a proprietor of a bonded wine premises label the wine if he/she cannot obtain information about the origin of, or the grapes used to make, the concentrate or if the wine does not meet the requirements for optional claims?
If information about the origin of the concentrate or the grape varieties used in the concentrate cannot be verified, the product may be labeled as “grape wine” or with a color descriptor, such as “red wine” or “white wine.” If the wine has an alcohol content that is not over 14 percent alcohol by volume, it may also be designated as “table wine.”
Vintage dates, varietal names, and appellations may not be shown on the label, unless they can be verified and the wine meets the other requirements in 27 CFR part 4 for use of the claim.
W14e: May a proprietor of a bonded wine premises who is using wine kits to commercially produce wine use the wine treating materials that are often provided in winemaking kits?
It depends. Treating materials included in wine kits may only be used if they are listed as authorized for use and used in compliance with the TTB regulations at 27 CFR 24.246 or have been Administratively Approved for use in wine sold domestically.
W15: What is required when applying for a certificate of exemption from label approval for my wine label instead of a Certificate of Label Approval on Form 5100.31?
You may apply for a certificate of exemption from label approval for your wine only if it is produced or bottled in the United States and only if it will be sold, offered for sale, shipped, or delivered for shipment within the state in which it was bottled or packed (in other words, it will not be introduced into interstate commerce). This can be accomplished by selecting and completing item 18b on your label application, TTB Form 5100.31. Imported bottled wines are not eligible for a certificate of exemption from label approval and therefore must be covered by a Certificate of Label Approval.
Wines labeled under a certificate of exemption from label approval must show the statement, “For sale in _________(name of State) only.” This statement may be added to a label covered by a certificate of exemption, or may be on an additional label that is affixed to the container. The statement does not have to appear on the label that is submitted to TTB, but must be on the container before it is removed from bond for consumption or sale.
Although the labeling requirements in 27 CFR Part 4, Labeling and Advertising of Wine, do not apply when a certificate of exemption is used, all of the rules in the wine regulations under the Internal Revenue Code of 1986 (IRC), 27 CFR Part 24, continue to apply to all wine bottled and packed in the United States. For example, 27 CFR 24.257(a) outlines what information must appear on your label, as well as the minimum type size requirements, for each bottle or other container of beverage wine prior to removal for consumption or sale. In brief, each label must contain:
- Name & Address of the wine premises where bottled or packed
- Brand name if different from the above
- Alcohol content as percent by volume or as stated in accordance with 27 CFR Part 4
- The kind of wine
- Net contents
Please see the complete text of 27 CFR 24.257 for additional information and guidance. (Note that Part 24 does not apply in Puerto Rico. See 27 CFR 24.2.)
The recordkeeping requirements in the IRC wine regulations continue to apply when a certificate of exemption is used. The wine regulations state in 27 CFR 24.257(b): “The information shown on any label applied to bottled or packed wine is subject to the recordkeeping requirements of [27 CFR 24.314, Label information record]," which states:
A proprietor who removes bottled or packed wine with information stated on the label (e.g., varietal, vintage, appellation of origin, analytical data, date of harvest) shall have complete records so that the information appearing on the label may be verified by an [sic] TTB audit. A wine is not entitled to have information stated on the label unless the information can be readily verified by a complete and accurate record trail from the beginning source material to removal of the wine for consumption or sale. All records necessary to verify wine label information are subject to the record retention requirements of § 24.300(d).
In addition, Congress recently amended section 5388(c) of the IRC (26 U.S.C. 5388(c)) to restrict the use of certain wine terms on wine labels sold in the United States. These wine names are: Burgundy, Claret, Chablis, Champagne, Chianti, Malaga, Marsala, Madeira, Moselle, Port, Rhine wine, Hock, Sauterne, Haut Sauterne, Sherry, Tokay and Retsina. These names may be used on labels for wine from the European Community (and made in accordance with the requirements of the Community) and on certain previously approved non-Community wine labels if their uses are grandfathered as of March 10, 2006. Because the IRC applies to wine regardless of whether it is in intrastate or interstate commerce, the restriction on the use of these names applies in both contexts. Accordingly, TTB will not issue a certificate of exemption for wine using one of these wine names in a manner not authorized by the statute. The change in the law was effective on December 20, 2006.
The Alcoholic Beverage Labeling Act of 1988, 27 U.S.C. 213 et seq., and implementing regulations in 27 CFR Part 16, which require a specified health warning statement on alcoholic beverages bottled or imported for sale or distribution in the United States, also apply equally to wine sold or shipped in intrastate or interstate commerce. Under Part 16, the required warning statement is a prerequisite for approval of a certificate of exemption from label approval, just as it is for a Certificate of Label Approval.
Finally, other laws may apply to fraudulent conduct used to sell mislabeled wine or to mislead consumers, including certain federal criminal statutes relating to fraud carried out through the use of: the mail; private or commercial interstate carriers; or wire, radio, or television communication in interstate or foreign commerce.
W16: What does it mean when you see a wine labeled as “Table Wine With Natural Flavors" or "Grape Wine With Natural Flavors?”
“Table Wine With Natural Flavors" and "Grape Wine With Natural Flavors” are statements of composition. A statement like this is required on a wine label when a wine does not fall within any of the current standards of identity set forth in TTB wine labeling regulations at 27 CFR, Part 4, Subpart C (Grape Wine, Fruit Wine, Aperitif Wine, etc.). If a wine product does not fit a standard of identity, TTB requires under 27 CFR 4.34 that the product be designated with a "truthful and adequate statement of composition" on the brand label, and we have accepted statements such as "Table Wine With Natural Flavors" for that purpose. The statement of composition is not required to be a complete listing of ingredients.
TTB's predecessor agency, the Bureau of Alcohol, Tobacco, and Firearms (ATF), proposed adding a category for "flavored wine products" to the standards of identity in Subpart C to distinguish these products from standard wines. While there was not adequate support for such a labeling change, ATF did find there was support for a prohibition on use of varietal designations (grape type, like "Chardonnay"), semigeneric geographic type designations (like "Chablis" or "Burgundy"), or geographic distinctive designations (like Bordeaux or Medoc) for wines not made in accordance with classes 1, 2, and 3, of that standards of identity (27 CFR 4.21(a‑c)). This means that these flavored wine products labeled with a statement of composition pursuant to 27 CFR 4.34 cannot use varietal, semigeneric geographic type, or geographic distinctive designations. That prohibition was placed in 27 CFR 4.34(a) and 4.39(n). (See Treasury Decision ATF-431 published October 6, 2000, 65 FR 59718 http://www.ttb.gov/rrd/td431.pdf for more information regarding the ATF and TTB position on the labeling of Flavored Wine Products.)
Therefore, you should not see a product with 7% or more alcohol by volume labeled "Chardonnay With Natural Flavors." However, you may see wines with less than 7% alcohol by volume using one of these designations (e.g. "Tutti-Frutti Chardonnay"). That is because TTB's consumer protection authority under the Federal Alcohol Administration Act extends only to wines with 7% or more alcohol by volume. The Food and Drug Administration (FDA) rules apply to the labeling of wines with less than 7% alcohol by volume. For more information about FDA labeling requirements go to http://www.cfsan.fda.gov/~dms/lab-ind.html.
W17: Does ATF Ruling 80-19 prohibit wine premises proprietors from selling wine for consumption in the taxpaid areas of their wine premises?
No, ATF Ruling 80-19 concerns wine that is provided free of tax to guests attending special events held in bonded areas of wine premises. An application is required and certain restrictions are imposed. Under 27 CFR 24.101 and 24.102, wine premises are designated as either bonded premises, where operations involving untaxpaid wine may be conducted, or taxpaid premises, where operations involving taxpaid wine may be conducted.
ATF Ruling 80-19 does not address sales of taxpaid wine in taxpaid areas of wine premises, because such sales are considered to be part of normal wine premises operations. A proprietor selling wine for consumption on taxpaid premises does not need to obtain special permission. Existing recordkeeping and reporting requirements in 27 CFR part 24 apply. Proprietors must request TTB permission before reconfiguring the premises to add a serving area (27 CFR 24.131).
TTB regulations do not restrict the location where wine that is sold on taxpaid wine premises may be consumed. States may have additional rules about where purchased wine may be consumed, but for TTB purposes, the wine may be consumed anywhere except the bonded area. The wine premises proprietor is responsible for learning about and complying with applicable State and local rules.
W18: Am I permitted to label my product with a specialized farming term to show my compliance with or concern for environmental initiatives and movements?
A description of specialized farming practices generally may appear on alcohol beverage labels as additional information provided it is truthful, accurate, specific, and does not conflict with, or in any manner qualify, mandatory labeling information. However, due to the constantly evolving nature of this field, TTB reserves the right to request clarification and documented verification of any graphics, seals, logos, definitions or language appearing on labels. For instance, any label specifically stating that the producer is certified by an agricultural organization must have documented proof.
Terms that refer to the environmental impact of the process and packaging rather than the product itself are usually acceptable. These words and phrases may not modify mandatory information on brand labels, but might appear as additional information after review on a case-by-case basis.
W19: I would like to make some changes to my approved label. Do I have to resubmit it for a new approval?
Page three of TTB F 5100.31 (Application for and Certification/Exemption of Label/Bottle Approval) contains the complete list of allowable revisions that can be made to an approved label without needing to resubmit the label for a new approval. A new approval is required unless the change to be made is specifically included on this list.
For instance, if a non-organic wine has a label that is identical to the approved label except for a change in the vintage date (Item 16) then no new approval is necessary. In addition, a new approval would not be needed if the alcohol content changes but the wine remains in the same tax class (Item 5). Please note that a new approval is required if you are changing the appellation, the varietal, or the descriptive text.
W20: Who needs to submit a wine label for approval?
Federal regulations require that the bottling winery or the importer must submit the label for approval.
W21: I am going to import the same product that another importer is already bringing in. Do I need to get an approval?
Yes, a new approval is required for each different importer who wants to import a product, under that importer’s Basic Permit.
W22: Another winery is doing a custom crush for me, and will be producing and bottling my wine. How do I get a label approval?
Federal regulations require that the bottling winery must submit the label for approval. Even though the wine is produced and bottled for you and/or will be distributed exclusively (or not) by you, the bottler/importer is responsible for getting the label approval.
W23: Item 9 on the list of allowable revisions that can be made to an approved label without needing to resubmit the label for a new approval [page 3 of TTB F 5100.31 (Application for and Certification/Exemption of Label/Bottle Approval)] allows me to “Change the name and/or tradename of responsible winery, DSP, brewery, or importer.” Does this mean that I can import the same product that another importer is already bringing in by using their label approval but with my name in the “Imported by…” statement on the label?
No, federal regulations require that each importer must submit the label for approval. Item 9 means that if you have a label approval using “XYZ Imports,” and you add a new trade name of “ABC Imports” to your permit, then you may change “Imported by XYZ Imports…” to “Imported by ABC Imports…” on the label without applying for a new COLA.
W24: I operate a domestic winery and I am making wine from grapes or juice that I have purchased from another state or country. What appellation of origin may I use?
This is a complicated question, and the answer (see 27 CFR §4.25(b)) depends on the particular circumstances. State or local laws and regulations may be more restrictive than Federal laws and regulations in some instances, and, to use an appellation, the wine must conform to the laws and regulations of the named appellation area. (Please note that we use here certain states or regions only as examples to illustrate certain different circumstances.) We advise that you confer with state and local authorities regarding their requirements before finalizing your COLA submission. Remember that your wine, and the records that you keep, must adequately support any claims which are made on your label. The following situations serve as examples. There are certainly more factual circumstances that might have a different outcome.
Situation 1: I am making a wine with grapes or juice originating from a state that is contiguous to (that is, touching) my own state (e.g. when California grapes are used to produce wine in Oregon).Suppose that I have purchased Napa Valley, California, grapes that I will produce into wine in Oregon.
The most specific appellation of origin eligible for use is the name of the contiguous state (California). A viticultural area appellation of origin (e.g. Napa Valley) may NOT be used because the wine was not fully finished within that state.
Situation 2: The state from which the winemaking material originates is not contiguous to the state in which the wine is produced. For example, California grapes have been purchased to produce wine in New York.
The most specific appellation of origin eligible - for use is a country appellation, such as “American.” Note that when a country is used as an appellation of origin a vintage date is NOT permissible for the wine.
Situation 3: I am purchasing grapes or juice from another country. An appellation of origin may NOT be used, as this wine is not eligible for such claims (see 27 CFR §4.25(b)(2)(ii)). A vintage date or a varietal designation (e.g. Merlot) may not appear on the wine, as both items require an appellation of origin present on the label. The wine may be labeled only with a more general class or type statement, such as “Red Wine” or “White Wine.”
W26 : I have untaxpaid wine and/or wine spirits that I would like to destroy. How do I receive approval for the destruction of wine or wine spirits without payment of tax?
Step 1: The destruction of wine is provided for in 27 CFR 24.294. In accordance with § 24.294, a bonded wine premises proprietor can submit an application to TTB’s National Revenue Center requesting permission to destroy the lot of wine. A complete application includes the following information:
Date of letter
Name and Address of Bonded Wine Premises
Registry Number of Bonded Wine Premises (“BWN/BWC/BW-State-xxxxx”)
Kind of wine
Alcohol Content
Approximate volume in gallons
Where wine will be destroyed
Proposed date of destruction
Reason for destruction
Printed Name
Signature (Person signing must have signing authority)
Telephone Number
Your application should be mailed to:
TTB National Revenue Center
Attention: Wine Tax Unit
550 Main St., Suite 8002
Cincinnati, OH 45202
Or faxed to the Wine Tax Unit at (202) 453-2338.
If you have wine spirits that must be destroyed, follow the same procedure in accordance with 27 CFR 24.235, but send the application to the District Director who serves your area. For contact information, click here.
Step 2: You may destroy the wine if you are notified by TTB that you may proceed with the destruction without supervision. If you are informed that TTB will supervise the destruction, we will notify you when the destruction may take place. The wine must be destroyed in compliance with your local environmental and waste disposal rules.
Step 3: Show the amount destroyed on TTB F 5120.17, “Report of Wine Premises Operations” for the period in which the product was destroyed. The volume of bulk wine destroyed will be entered in the write-in entry Lines 24-28 of Part I, Section A. The volume of bottled wine destroyed will be entered in the write-in entry lines 15-17 of Part I, Section B. The volume of wine spirits destroyed will be entered on line 7 of Part III.
ID / Aug. 2010
| Page last reviewed/updated: 02/11/2013 |
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