Home.Special (Occupational) Tax Frequently Asked Questions
Special (Occupational) Tax Frequently Asked Questions
On October 22, 2004, President Bush signed H.R. 4520, the "American Jobs Creation Act of 2004," into law as Public Law 108-357. In addition to several other changes to the Internal Revenue Code, Public Law 108-357 provides for a three-year suspension of the annual special (occupational) tax (SOT) on persons in the business of selling, manufacturing, importing or wholesaling of beverage alcohol products or manufacturing nonbeverage alcohol products for tax drawback.
On August 10, 2005, President Bush signed into law the "Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users," Public Law 109-59. Section 11125 of that act repeals the SOT on alcohol beverage producers and dealers, manufacturers of nonbeverage products, users of tax-free alcohol, and users and dealers of specially denatured spirits, effective July 1, 2008.
Questions and Answers Regarding New Legislation on Federal Special (Occupational) Tax (SOT) and Registration
SOT1: I heard that the SOT has been eliminated and there is no longer a requirement to file and pay this tax. Is this true?
A: SOT has been repealed for all alcohol occupations as of July 1, 2008, but the recordkeeping and registration requirements will continue. Tobacco occupations are not affected by the legislation and must continue to file and pay the tax at the normal rates. For more information on the repeal, click here.
SOT2: Will I still be required to register my alcohol business and when will I register?
A: Regulations will require dealers in alcohol beverages to register in the following circumstances:
- Before beginning business;
- On or before each subsequent July 1, but ONLY IF there has been a change in the existing registration information;
- Upon going out of business; and
- A transition rule will require the registration of existing businesses that have not registered on or after January 1, 2007.
SOT3: I receive a federal tax stamp as receipt for filing and paying each year, and I am required to have this stamp in order to receive my state license. Will I still receive this stamp each year?
A: You will receive a federal tax stamp only if you are required to file and pay the tax. If you are engaged in an alcohol occupation you will not receive this stamp; however, as proof of registration your state or local alcohol beverage control agency will receive a list of businesses registered in your state.
SOT4: I file a claim for drawback of excise tax I pay for alcohol used to manufacture cough syrup, mouthwash, etc. Do I still have to file and pay SOT and obtain a federal tax stamp in order to continue filing these claims?
A: You are still required to register in order to file a claim for drawback of excise tax paid for these products; however, SOT has been repealed. To simplify the registration process, TTB will deem you to have registered as a manufacturer of nonbeverage products when you file your first claim for the year.
SOT5: If I purchase or sell specially denatured alcohol, am I still liable for the tax?
A: No, SOT has been repealed.
SOT6: I have a balance due on current and/or prior SOT. Am I still liable for these taxes?
A: If you owe SOT for a prior year in which tax was due, including penalties and interest, or have a lien or levy imposed, you are still liable for the tax and no claim for refund will be accepted based solely on this change in legislation.
SOT7: I manufacture cigars and other tobacco products. Do I still have to pay SOT?
A: Yes, the SOT repeal only applies to persons in alcohol occupations. If you manufacture tobacco products, you will continue to file and pay the tax at the applicable rates. There is still no requirement for filing and paying on retail sales or wholesale operations of manufactured tobacco products or importation of manufactured tobacco products.
SOT8: Who do I contact if I have questions on this tax?
A: If you have questions on how TTB will regulate this law, please contact the TTB National Revenue Center at 1-877-882-3277 or the special occupational tax toll free number at 1-800-937-8864.
SOT9 : I did not receive an SOT renewal notice from TTB. How do I renew my SOT registration?
A: Because the special (occupational) tax (SOT) was repealed for all alcohol occupations, no tax is due. TTB no longer mails renewal notices or tax stamps to entities engaged in alcohol businesses.
ALCOHOL DEALERS
Although SOT payments are no longer required for alcohol occupations, alcohol beverage dealers (including all persons in the business of selling alcohol products fit for beverage use) must register with TTB.
If you are an alcohol beverage dealer and you filed an SOT registration/return on or after January 1, 2007, you are not required to file a new registration as long as the information on your current registration/return is still accurate. However, you must submit TTB F 5630.5d, Alcohol Dealer Registration, when changes occur to information on your current registration/return. No tax is due, but a new registration is required to report changes. You must notify TTB of changes no later than the next July 1st after the change. Keep a copy of your registration for your records.
Please mail this form to:
TTB
550 Main St., Ste. 8002
Cincinnati, OH 45202
OTHER REQUIRED REGISTRATIONS NOT USING TTB F 5630.5D
If you are authorized to operate as a distilled spirits plant, bonded winery, taxpaid wine bottling house, or brewer, or if you have submitted an application or notice to conduct such operations, you do not need to file TTB F 5630.5d, Alcohol Dealer Registration. TTB's approval of your application or notice, along with any subsequent amendments, is considered your registration for this purpose.
Nonbeverage drawback claimants must also register, but they do not register using TTB F 5630.5d. If you are a nonbeverage drawback claimant, you are considered registered when you file your first claim for each year. Subsequent claims with updated information will be considered amended registrations.
| Page last reviewed/updated: 09/2011 |
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