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Repeal of Special (Occupational) Tax on Alcohol Occupations

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 Section 11125 of the Act permanently repealed, effective July 1, 2008, the special (occupational) taxes on:

Producers and marketers of alcohol beverages,
Manufacturers of nonbeverage products,
Users of tax-free alcohol, and
Users and dealers of specially denatured spirits.

Although the tax was repealed for these occupations, recordkeeping and registration requirements remain for:

Producers and marketers of alcohol beverages, and
Manufacturers of nonbeverage products.

Regulations require marketers of 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; and
Upon going out of business.

Distilled spirits plants, breweries, wineries, bonded wine warehouses, and taxpaid wine bottling houses that sell alcohol products fit for beverage use are treated as alcohol beverage dealers and therefore are subject to the same registration requirements. However, to simplify the registration process, TTB deems these persons to have registered as alcohol beverage dealers when they file their application for registration or brewer’s notice under the qualification provisions of 27 CFR parts 19, 24, or 25. Similarly, amended dealer registrations are not required if the qualification files are kept up to date.

See a sample listing of Retail Beverage Alcohol Dealers that could be subject to registration as a "retail liquor dealer" for selling or offering for sale alcohol beverage products (e.g., beer, wine, liquor, coolers, mixed drinks, etc.). This requirement applies to on-site consumption and off-site consumption sales.

Manufacturers of nonbeverage products are deemed to have registered each year when they file their first claim for the year.

The repeal did not affect recordkeeping requirements for:

Alcohol beverage dealers,
Manufacturers of nonbeverage products,
Users of tax-free alcohol,
Users and dealers of specially denatured spirits,
Distilled spirits plants,
Breweries,
Wineries,
Bonded wine warehouses, and
Taxpaid wine bottling houses.

Any past due tax liabilities that were incurred for periods before the effective date of the repeal remain and will be collected. Use TTB F 5630.5a to pay these liabilities for alcohol occupations. (However, there is no liability for alcohol occupations, other than users of tax-free alcohol and users and dealers of specially denatured spirits, during the previously enacted three-year tax suspension that ran from July 1, 2005, through June 30, 2008.)

Section 11125 of Public Law 109-59 did not affect any tobacco occupations; therefore,

Manufacturers of tobacco products,
Manufacturers of cigarette papers and tubes, and
Tobacco export warehouse proprietors

must continue to register and pay the special (occupational) tax every year. The registration and tax for these tobacco occupations is due before beginning business, and on or before July 1 of every year after that. Use TTB F 5630.5t to register and pay liabilities incurred on tobacco occupations.

For more information, call 1-800-937-8864 or visit http://www.ttb.gov/faqs/sot-1-9.shtml.