TTB & Winery Help
Q: What TTB reports does a craft distiller have to file and when?
A: Distilleries making Beverage Alcohol only (no industrial or denatured spirits) must file monthly operations reports including a Production Report (F5110.40), Storage Reporting (F5110.11), and Processing Report (F5110.28) due by the 14th of the next month. In addition, distillers must file and pay a Federal Excise tax (FET) Return (F5000.24) after every tax period. The records may be maintained in any format that accurately reflect operations. They can be handwritten or electronic. There is no prescribed method or format but if a computer system is used, the TTB wants security. Bootlegger.com offers an affordable solution to record keeping requirements.
Q: How and when do craft distillers have to pay taxes?
A: Most craft distillers pay $13.50/proof gallon for any cases of beverage alcohol they remove from the bonded distillery space including cases they move to their gift shop or tasting room areas. For a craft distillery who pays less than $50,000 in excise tax per year (or ~3,700 six pack cases per year), they can pay every quarter (4 times per year), they can pay every quarter (4 times per year). If distillery pays more than $50,000/year in one calendar year, they must pay every 14 days and 3 times in September.
Q: Our winery bought some tanks, and they are being delivered today, and we can’t wait to use them—do I have to report this?
A: Yes, When you are changing tanks (either increasing or decreasing in the number of tanks you have at your winery), you have to file this change with the TTB (within 30 days of the change).
It is a fairly simple procedure. You would file the Application to Establish and Operate Wine Premises (TTB Form 5120.25.), using the next serial number. When you first apply, and receive approval to operate your winery, this serial number. When you first apply, and receive approval to operate your winery, this is Serial No.1. Each time you have changes to the plant (whether it is tanks, corporate personnel, etc.), you will need to file an amendment to your Wine Premises operations.
In this case, since you are adding tank(s), you need to submit (in addition to the form) an updated site map showing the new tanks, as well as an updated tanks list, adding these tanks (you will have to assign them a number), the quantity and the capacity of each.
Q: I am doing some custom bottling for a guy under his trade name—do I have to report this?
A: Yes, custom bottling has increased exponentially during the past decade. If your client wants only to use its brand name on the labels, then you must file for addition of trade name(s), using the Application for Amended Basic Permit Under the Federal Alcohol Administration Act (TTB Form 5100.18; you can now also use the 5120.25 but then have to assign a serial number, etc. The 5100.18 is a much cleaner way to do this).
In addition to this form, if you are located in New York, you must register the Trade Name in the county where you are located (through a Fictitious Business Name or Assumed Name statement), as well as a letter from the custom bottling client stating that you are seeking registration of the trade name(s) for the purpose of custom bottling. Also, the form requires submission with an original signature (rather than uploading a digital copy of the original), so you must send it to the TTB’s Cincinnati office for approval, which can take a few weeks.
Keep in mind, if you try to use a trade name that is not on your permit, you will not get a label approved (any trade name you use must be on file with the TTB), so it’s best to take this step long before you need it.
Q: I’ve really gone high tech—I keep my files on my computer. There can’t be any issues with that, can there?
A: Yes, in this day of sophisticated computers, nearly all of us keep our records digitally (although TTB still likes to have paper in their hands, so it’s best to keep both). Electronic records are great from a space consideration, but not so great if your computer gets hacked. TTB is now checking to see if wholesalers and manufacturers have some type of security for their computers—a logon ID at the very least, so not anyone can access all this information.
About Tracy Jong
Tracy Jong has been an attorney for more than 20 years, representing restaurants, bars, and craft beverage manufacturers in a wide array of legal matters. She is also a licensed patent attorney.
Her book Everything You Need To Know About Obtaining and Maintaining a New York Retail Liquor License: The Definitive Guide to Navigating the State Liquor Authority will be available next month on Amazon.com as a softcover and Kindle e-book.
Her legal column is available in The Equipped Brewer, a publication giving business advice, trends, and vendor reviews to help craft breweries, cideries, distilleries and wineries build brands and succeed financially.
She also maintains a website and blog with practical information on legal and business issues affecting the industry. Follow her, sign up for her free firm app or monthly newsletter.
Facebook: Tracy Jong Law Firm
LinkedIn: Tracy Jong
Tracy Jong Law Firm