Title 27—Alcohol, Tobacco Products and Firearms--Volume 1
PART 19—DISTILLED SPIRITS PLANTS
§ 19.263   Claims on spirits, denatured spirits, articles, or wines lost or destroyed in bond—specific requirements.
(a) Claims for remission. A claim for remission of tax liability relating to the destruction or loss of spirits, denatured spirits, articles, or wines in bond must include the following information:
(1) Identity of containers. Identification of the containers, by serial number if they were numbered, and location of the containers from which the spirits, denatured spirits, articles, or wines were lost, or in which they were removed for destruction;
(2) Quantity of spirits. The quantity of spirits, denatured spirits, articles, or wines lost or destroyed from each container, and the total quantity of spirits or wines covered by the claim;
(3) Amount of claim. The total amount of tax for which the claim is filed;
(4) Identity of distilled spirits plant. The name, number, and address of the distilled spirits plant from which withdrawn without payment of tax or removed for transfer in bond, if the claim involves spirits so withdrawn or removed or if the claim involves wines transferred in bond, and the date and purpose of such withdrawal or removal. In the case of imported spirits lost or destroyed while being transferred from customs custody to bonded premises as provided in § 19.409, the name of the customs bonded warehouse, if any, and port of entry will be included instead of the plant name, number, and address;
(5) Date and cause. The date of the loss or destruction: If the date is not known, enter the date the loss or destruction was discovered. Include the cause of the loss together with relevant facts and details;
(6) Carrier. The name of the carrier if the loss occurred while the spirits were in transit;
(7) Consignee. The name and address of the consignee, in the case of spirits withdrawn without payment of tax which are lost before being used for research, development, or testing;
(8) Theft. If lost by theft, the facts establishing that the loss did not occur as the result of any negligence, connivance, collusion, or fraud on the part of the proprietor of the plant, owner, consignor, consignee, bailee, or carrier, or the employees or agents of any of them; and
(9) Insurance. In the case of a loss by theft, whether the claimant is indemnified or recompensed for the spirits or wines lost and if so, the amount and nature of indemnity or recompense and the actual value of the spirits or wines, less the tax.
(b) Claims for abatement, credit or refund. If a proprietor files a claim for abatement of an assessment, or for credit or refund of tax that has been paid or determined, for spirits, denatured spirits, articles, or wines lost or destroyed in bond, the claim must include all of the applicable information described in paragraph (a) of this section as well as the following:
(1) The date of assessment or payment of the tax for which abatement, credit or refund is claimed. If the tax has not been assessed or paid, give the date of the tax determination; and
(2) The name, plant number and address of the plant where the tax was determined, assessed or paid. If the tax was assessed against, or paid by, someone other than the proprietor, then give the name, address and capacity of the person who was assessed or paid the tax.
(c) Supporting documents —(1) General. If possible, the proprietor should support the information and details on all claims filed under this section with affidavits by persons having personal knowledge of the circumstances of the loss or destruction.
(2) Losses in transit. For claims on spirits, denatured spirits, articles, or wines lost while being transferred by a carrier, the claim must be supported by a copy of the bill of lading.
(3) Spirits withdrawn without payment of tax. If the lost spirits were withdrawn without payment of tax for research, development, or testing, the claim must be supported by a copy of the proprietor's sample record prescribed in subpart V of this part.
§ 19.264   Claims on spirits returned to bonded premises—specific requirements.
(a) General. Section 5215(a) of the IRC allows for the return of tax paid or tax determined spirits to the bonded premises of a distilled spirits plant under certain conditions. In addition, section 5008(c) of the IRC allows a proprietor to file a claim for credit or refund of tax on the spirits returned to bonded premises under section 5215(a). For information on allowable returns see subpart Q of this part.
(b) Claims for credit or refund. A claim for credit or refund of tax on spirits returned to bonded premises under section 5215(a) must include the following information:
(1) Quantity of spirits so returned;
(2) Amount of tax for which the claim is filed;
(3) Name, address, and plant number of the plant to which the spirits were returned and the date of the return;
(4) The purpose for which the spirits were returned; and
(5) The serial number of the gauge record for the returned spirits.
(c) Puerto Rican and Virgin Islands spirits and imported rum. If the alcoholic content of the spirits contain at least 92 percent Puerto Rican or Virgin Islands rum, or if the spirits contain rum imported from any area other than Puerto Rico and the Virgin Islands, the claim must show:
(1) Proof gallons of the finished product derived from Puerto Rican or Virgin Islands spirits, or derived from rum imported from any other area; and
(2) The amount of tax imposed by 26 U.S.C. 7652 or 26 U.S.C. 5001, determined at the time of withdrawal from bond, on the Puerto Rican or Virgin Islands spirits, or on the rum imported from any other area, contained in the product.
(d) Products subject to 26 U.S.C. 5010 tax credits. A claim for credit or refund of tax on spirits containing eligible wine or eligible flavors must include the date and serial number of the record of tax determination and the effective tax rate at which the tax was paid or determined. If this information is not provided, the amount of tax claimed will be based on the lowest effective tax rate applied to the product.
(e) Limits on claims. Claims for credit or refund of tax must be filed by the proprietor of the plant to which the spirits were returned. The claim must be filed within six months of the date of the return. No interest is allowed on any claims for refund or credit.
§ 19.265   Claims relating to spirits lost after tax determination.
Claims for abatement, credit, or refund of tax under this part, relating to losses of spirits occurring on bonded premises after tax determination but prior to physical removal from such premises, will be prepared and filed in accordance with the regulations in § 19.263(b) and (c).
§ 19.266   Claims for credit of tax.
A proprietor may file a claim for credit of tax, as provided in this part, after the tax has been determined, whether or not the tax has been paid. However, a proprietor may not anticipate allowance of a credit or make an adjusting entry in a tax return pending action on the claim.
§ 19.267   Adjustments for credited tax.
When a proprietor receives a notice of allowance of credit from TTB, including notification of credit for tax on spirits exported with benefit of drawback as provided in part 28 of this chapter, the proprietor will make an adjusting entry and an explanatory statement on its next excise tax return. The proprietor will identify the notification of allowance of credit that authorizes the adjusting entry in the explanatory statement. If the allowable tax credit is greater than the tax due on the excise tax return, the proprietor will apply the balance of the tax credit to one or more following tax returns until the tax credit is exhausted.
§ 19.268   Allowance of remission, abatement, credit, or refund of tax.
The appropriate TTB officer is authorized to allow claims for remission, abatement, credit, and refund of tax, filed under the provisions of this part.
§ 19.269   Puerto Rican and Virgin Islands spirits.
(a) The provisions of 26 U.S.C. 5008, authorizing abatement, remission, credit, or refund for loss or destruction of distilled spirits, also apply to spirits brought into the United States from Puerto Rico or the Virgin Islands with respect to the following:
(1) Spirits lost while in bond;
(2) Voluntary destruction of spirits in bond;
(3) Spirits returned to bonded premises after withdrawal without payment of tax; and
(4) Spirits returned to bonded premises after withdrawal upon tax determination.
(b) In addition to the information required by § 19.263, claims relating to spirits lost in bond must show the name of the producer and the serial number and date of the formula under which produced, if any.
§ 19.281   Scope.
This subpart covers gauging, which is the determination of the quantity and the proof of distilled spirits. Topics covered in this subpart include: The general requirements for gauging; when gauges are required at distilled spirits plants; and special rules that apply to the gauges performed at distilled spirits plants. For additional requirements and procedures governing gauging, see part 30 of this chapter, Gauging Manual.
§ 19.282   General requirements for gauging and measuring equipment.
A proprietor is required to perform periodic gauges of the spirits, wines, and alcoholic flavorings at the plant. A proprietor must have accurate and readily usable gauging and measuring equipment as required by this part and part 30 of this chapter. At any time, TTB may require that the proprietor's gauges be performed in the presence of, and be verified by, a TTB officer. In addition, TTB may disapprove the use of any equipment, or the proprietor's means of gauging, if TTB finds that it is not sufficiently accurate or suitable for the gauges and measurements to be made.
§ 19.283   When gauges are required.
The proprietor must gauge spirits, wine, and alcoholic flavoring materials when required to do so by the appropriate TTB officer or when the spirits, wine, or flavoring materials are:
(a) Produced and entered for deposit;
(b) Filled into packages from storage tanks;
(c) Transferred or received in bond;
(d) Transferred between operational accounts;
(e) Mixed in the manufacture of a distilled spirits product;
(f) Mingled under § 19.329;
(g) Reduced in proof before bottling;
(h) Voluntarily destroyed;
(i) Removed or withdrawn from bond;
(j) Tax determined;
(k) Returned to bond; or
(l) Denatured.
§ 19.284   Quantity determination of bulk spirits.
(a) Gauge of spirits in packages. When determining the quantity of bulk spirits in packages, the proprietor must determine the quantity by weight as provided in part 30 of this chapter.
(b) Bulk gauge for tax determination. When determining the quantity of bulk spirits for determination of tax or when performing a production gauge that will be used for tax determination, the proprietor must determine the quantity by weight as provided in part 30 of this chapter or by an accurate mass flow meter. For tax determination purposes, an accurate mass flow meter is a mass flow meter that has been certified by the manufacturer or other qualified person as accurate within a tolerance of plus or minus 0.1 percent.
(c) Volumetric determination. Except as provided in paragraphs (a) and (b) of this section, in all other instances when the proprietor is required to gauge bulk spirits in bond, the proprietor may determine the quantity by either weight or volume. When the proprietor determines the quantity by volume, the proprietor must measure the spirits by using:
(1) A tank or bulk conveyance for which a calibration chart is provided, with the calibration charts certified as accurate by persons qualified to calibrate tanks or bulk conveyances; or
(2) An accurate mass flow meter. For purposes of this paragraph, an accurate mass flow meter is a mass flow meter that has been certified by the manufacturer or other qualified person as accurate within a tolerance of plus or minus 0.5 percent; or
(3) Another device or method approved by the appropriate TTB officer.
§ 19.285   Proof determination of distilled spirits.
(a) Proof. Except as provided in paragraph (b) of this section, when the proprietor is required to gauge distilled spirits, the proprietor must determine the proof in accordance with the procedures prescribed in part 30 of this chapter, Gauging Manual.
(b) Use of Initial proof. After a proprietor has determined the proof of distilled spirits in accordance with the procedures in part 30 of this chapter, a proprietor may use the initial determination of proof when required to make a later gauge at the same plant. However, a proprietor must determine the proof again when:
(1) A bottling tank gauge is required by § 19.353;
(2) A gauge for tax determination is required by § 19.226; or
(3) In any case where the proof may have changed.
§ 19.286   Gauging of spirits in bottles.
When gauging spirits in bottles, the proprietor may determine the proof and quantity from case markings and label information if the bottles are full and there is no evidence that tampering has occurred.
§ 19.287   Gauging of alcoholic flavoring materials.
Generally, alcoholic flavoring material must be gauged when dumped. However, when received from a manufacturer in a closed, nonporous container such material may be gauged by using the proof shown on the container label or a related statement of proof from the manufacturer. When the proof is determined from a label or manufacturer's statement, the proprietor will test a sufficient number of samples to verify the accuracy of the proof so determined. TTB may require that alcoholic flavoring materials be gauged by the methods provided in part 30 of this chapter.
§ 19.288   Determination of tare.
When packages are to be individually gauged for withdrawal from bonded premises, the actual tare must be determined in accordance with part 30 of this chapter.
§ 19.289   Production gauge.
(a) General requirements for production gauges. A proprietor must gauge all spirits by determining the quantity and proof as soon as reasonably possible after production is completed. Except as otherwise provided in this section, a proprietor may determine the quantity by volume or by weight, by an accurate mass flow meter, or when approved by the appropriate TTB officer, by other devices or methods that accurately determine the quantities. If caramel is added to brandy or rum, the proof of the spirits must be determined after the addition. Spirits in each receiving tank will be gauged before any reduction in proof and both before and after each removal of spirits. The gauges must be recorded in the records required by § 19.585.
(b) Tax to be determined on production gauge. If the tax is to be determined based on the production gauge, all transaction records must be marked “Withdrawal on Production Gauge.” A proprietor may determine the tax based on the production gauge if the spirits are:
(1) Weighed into bulk conveyances or metered using an accurate mass flow meter;
(2) Uniformly filled by weight or an accurate mass flow meter into metal packages; or
(3) Filled by weight or an accurate mass flow meter into packages for immediate withdrawal from bonded premises with the details recorded on a package gauge record in accordance with § 19.619.
(c) Tax not to be determined on production gauge. If spirits are drawn from the production system into barrels, drums, or similar portable containers of the same rated capacity and the containers are filled to capacity, and the tax is not to be determined on the basis of the production gauge, the gauge may be made by:
(1) Weighing in a tank, converting the weight into proof gallons, and determining the average content of each container;
(2) Measuring volumetrically, in a calibrated tank, converting the wine gallons determined into proof gallons, and determining the average content of each container;
(3) Converting the rated capacity into proof gallons to determine the average content of each container. Rated capacity will be determined from specifications of the manufacturer. The proprietor will determine the rated capacity of used cooperage; or
(4) Determining by an accurate mass flow meter or a device or method approved under paragraph (a) of this section, the total quantity filled into containers, and determining the average content of each container.
(d) Records of production gauge. For the production gauge, fractional proof gallons will be rounded to the nearest one-tenth and the average content and the number of packages filled will be used in computing the quantity produced. The actual proof gallons in each remnant container must be shown. As provided in § 19.618, a separate gauge record will be prepared for each lot of packages filled (see § 19.485) and for each removal by pipeline or bulk conveyance for deposit in bond on the same plant premises. The gauge record will show “Deposit in storage” or “Deposit in processing.” If spirits are to be transferred in bond or withdrawn from bond, the production gauge will be made on the form or record required by this part (accompanied by a package gauge record, if required).
§ 19.291   General.
The regulations in this subpart cover production operations. A proprietor authorized to produce distilled spirits must conduct production operations in accordance with the provisions of this subpart. Subpart V of this part sets forth recordkeeping requirements that apply to production operations.
§ 19.292   Notice of operations.
A proprietor authorized to produce distilled spirits may not commence, suspend, or resume production operations at the plant without first providing written notice to TTB.
(a) Beginning operations. A proprietor must file a letterhead notice with the appropriate TTB officer before beginning or resuming production operations. A proprietor must not begin or resume operations before the time specified in the notice.
(b) Suspending operations. If a proprietor intends to suspend production operations for a period of 90 days or more, the proprietor must file a letterhead notice with the appropriate TTB officer specifying the date on which operations will be suspended.
(c) Discontinuing reports. A proprietor is not required to prepare or file reports of production operations under subpart V of this part for periods during which production operations are suspended.
§ 19.293   Receipt of materials.
When a proprietor receives certain materials on bonded premises, the proprietor must determine the quantity received and record those quantities in the records prescribed by subpart V of this part. This requirement applies to:
(a) Fermenting materials;
(b) Distilling materials (including nonpotable chemical mixtures containing spirits); and
(c) Spirits, denatured spirits, articles, and spirits residue for redistillation.
§ 19.294   Removal of fermenting material.
Material received for use as fermenting material may be removed from or used on bonded premises for other purposes. The proprietor must keep a record of use or removal as provided in subpart V of this part.
§ 19.295   Removal or destruction of distilling material.
(a) Distilling material. Generally, a proprietor may not remove distilling material from bonded premises before it is distilled. However, a proprietor may remove mash, wort, wash, or other distilling material:
(1) To plant premises, other than bonded premises, for use in any business authorized under § 19.55;
(2) To other premises for use in processes not involving the production of spirits, alcohol beverages, or vinegar by the vaporizing process; or
(3) For destruction.
(b) Residues. A proprietor may remove the residue of distilling material not introduced into the production system from the premises if the liquid is extracted from the material before removal and the liquid is not received at any distilled spirits plant or bonded wine cellar. A proprietor may return residue of beer used as distilling material to the producing brewery. A proprietor may destroy distilling material produced and wine and beer received for use as distilling material.
(c) Records. A proprietor must keep a record of removal or destruction as provided in subpart V of this part.
§ 19.296   Fermented materials.
Fermented materials that a proprietor intends to use in the production of spirits must be:
(a) Produced on the bonded premises where used;
(b) Received from a bonded wine cellar in the case of wine;
(c) Beer received from a brewery without payment of tax, or beer that was removed from a brewery upon determination of tax; or
(d) Apple cider exempt from tax under 26 U.S.C. 5042(a)(1).
§ 19.297   Use of materials in production of spirits.
A proprietor may produce spirits from any suitable material in accordance with the proprietor's statements of production procedure in the notice of registration. Materials from which alcohol will not be produced may be used in production only if the use of the materials is described in the approved statements of production procedure. The distillation of nonpotable chemical mixtures as described in § 19.36 will be deemed to be the original and continuous distillation of the spirits in such mixtures and to constitute the production of spirits.
§ 19.301   Distillation.
The distillation of spirits must be done in a continuous system. Distilling operations are continuous when the spirits are moved through the various steps of production as quickly as plant operation will permit. The proprietor may move the product through as many distilling or other production operations as desired, provided the operations are continuous. The collection of unfinished spirits for the purpose of redistillation is not considered to be a break in the continuity of the distilling procedure. However, the quantity and proof of any unfinished spirits must be determined and recorded before any mingling with other materials or before any further operations involving the unfinished spirits outside the continuous system. Before the production gauge, spirits may be held only as long as reasonably necessary to complete the production procedure.
§ 19.302   Treatment during production.
During production, the proprietor may purify or refine the spirits by using any material that will not remain in the finished product. Juniper berries and other natural aromatics or their extracted oils may be used in the distillation of gin. Spirits may be percolated through or treated with oak chips that have not been treated with any chemical. The proprietor must destroy or so treat any materials used in treatment of spirits, and which do not remain in the spirits, so as to preclude the extraction of potable spirits.
§ 19.303   Addition of caramel to rum or brandy and addition of oak chips to spirits.
A proprietor may add caramel that has no material sweetening properties to rum or brandy in packages or tanks prior to production gauge. A proprietor may add oak chips that have not been treated with any chemical to packages of spirits prior to or after the production gauge. The proprietor must note the use of oak chips on all transaction records.
§ 19.304   Production gauge.
A proprietor must gauge all spirits by determining the quantity and proof as soon as reasonably possible after production is completed. Additional requirements regarding production gauges are found in subpart K of this part.
§ 19.305   Identification of spirits.
Upon completion of the production gauge, the proprietor must identify containers of spirits as provided in subpart S of this part. When the proprietor intends to enter spirits into storage on bonded premises for later packaging in wooden packages, the proprietor may identify the spirits with the designation to which they would be entitled if drawn into wooden packages, followed by the word “Designate,” for example, “Bourbon Whisky Designate.”
§ 19.306   Entry.
(a) Following completion of the production gauge, a proprietor must make the appropriate entry for:
(1) Deposit of the spirits on bonded premises for storage or processing;
(2) Withdrawal of the spirits on determination of tax;
(3) Withdrawal of the spirits free of tax;
(4) Withdrawal of the spirits without payment of tax; or
(5) Transfer of the spirits for redistillation.
(b) A proprietor may use the production gauge as the entry gauge when spirits are:
(1) Deposited for storage or processing at the same distilled spirits plant; or
(2) Entered for redistillation at the same distilled spirits plant.
(c) When spirits are entered for deposit at another distilled spirits plant or are entered for withdrawal or redistillation, the provisions subpart P of this part will apply.
§ 19.307   Distillates containing extraneous substances.
(a) Use in production. Distillates that contain substantial quantities of fusel oil, aldehydes, or other extraneous substances may be removed from the distilling system before the production gauge and promptly added to fermenting or distilling material at the distillery where produced.
(b) Use at adjacent bonded wine cellar. Distillates that contain aldehydes may be removed, without payment of tax, to an adjacent bonded wine cellar for use in fermentation of wine to be used as distilling material at the distilled spirits plant from which the distillates were removed. The removal of distillates to an adjacent bonded wine cellar must be done as provided in § 19.419. The receipt and use of those distillates must conform to the requirements of part 24 of this chapter.
§ 19.308   Spirits content of chemicals produced.
All chemicals and chemical byproducts produced must be substantially free of spirits before being removed from bonded premises. The spirits content of chemicals to be removed from bonded premises must not exceed 10 percent by volume unless the appropriate TTB officer approves higher limits. A proprietor must test chemicals for spirits content and maintain a record of such tests as required by § 19.584.
§ 19.309   Disposition of chemicals.
Chemicals that meet the requirements in § 19.308 may be removed from bonded premises by pipeline or in containers marked to show the contents. The proprietor must determine the quantities of chemicals removed from bonded premises and keep records of removals as required by § 19.586. A TTB officer may take samples of chemicals.
§ 19.310   Wash water.
Water used in washing chemicals to remove spirits may be run into a wash tank or a distilling material tank, or may be destroyed or disposed of on the premises.
§ 19.312   Physical inventories.
A proprietor must take a physical inventory of the spirits and denatured spirits in tanks and other containers in the production account at the close of each calendar quarter. A proprietor must record the results of the inventory as provided in subpart V of this part and must show separately spirits and denatured spirits received for redistillation. TTB may require additional inventories be taken at any time.
§ 19.314   General.
Distillers or processors may redistill spirits, denatured spirits, articles, and spirits residues. Some redistillation requires an approved formula on form TTB F 5100.51, Formula and Process for Domestic and Imported Alcohol Beverages, as specified in §§ 5.192 and 5.193 of this chapter.
§ 19.315   Receipts for redistillation.
(a) A proprietor may receive and redistill spirits or denatured spirits that:
(1) Have not been removed from bond;
(2) Have been withdrawn from bond on payment or determination of tax and returned to bond under subpart Q of this part;
(3) Have been withdrawn from bond free of tax or without payment of tax and returned to bond under subpart T of this part; or
(4) Have been abandoned to the United States and sold to the proprietor without the payment of tax.
(b) A proprietor may also receive and redistill:
(1) Recovered denatured spirits and recovered articles returned under § 19.454, and
(2) Articles and spirits residues received under § 19.454.
§ 19.316   Redistillation.
(a) TTB has established standards of identity for the various classes and types of distilled spirits. Those standards are found in part 5 of this chapter. If a proprietor intends to redistill spirits, the proprietor must ensure that the redistillation process does not cause the distillate to be become ineligible for designation in the class or type of spirits that the proprietor intends to produce. Therefore, spirits must not be redistilled at a proof lower than that allowed for the class and type at which the spirits were originally produced, unless the redistilled spirits are to be:
(1) Used in wine production;
(2) Used in the manufacture of gin or vodka; or
(3) Designated as alcohol.
(b) In order to preserve the class and type of spirits during the redistillation process, different kinds of spirits must be redistilled separately, or with distilling material of the same kind or type as that from which the spirits were originally produced. However, this restriction does not apply when:
(1) Brandy is redistilled into “spirits-fruit” or “neutral spirits-fruit”. In this case the resulting distillate must not be used for producing wine;
(2) Whiskey is redistilled into “spirits-grain” or “neutral spirits-grain”;
(3) Spirits originally distilled from different kinds of material are redistilled into “spirits-mixed” or “neutral spirits-mixed”; or
(4) The spirits are redistilled into alcohol.
(c) All spirits redistilled after the production gauge will be treated the same as if the spirits had been originally produced by the redistiller. Spirits recovered by redistillation of denatured spirits, articles, or spirits residues may not be withdrawn from bonded premises except for industrial use or after denaturation. Otherwise, all provisions of this part and 26 U.S.C. chapter 51 applicable to the original production of spirits will be applicable to the redistillation of spirits. Nothing in this section affects any provision of this chapter relating to the labeling of distilled spirits.
§ 19.321   General.
This subpart covers storage operations at distilled spirits plants. A proprietor qualified as a warehouseman and authorized to store bulk distilled spirits and wines must conduct storage operations in accordance with the provisions of this subpart. Subpart V of this part sets forth recordkeeping requirements that apply to storage operations.
§ 19.322   Receipt and storage of bulk spirits and wines.
(a) Deposit of spirits into storage account. A proprietor may receive bulk spirits into the storage account:
(1) From the production facilities of the same plant;
(2) By transfer in bond from another plant;
(3) From customs custody without payment of tax; or
(4) By return to bulk storage.
(b) Deposit of wine into storage account. A proprietor may receive bulk wine into the storage account:
(1) By transfer in bond from a bonded wine cellar; or
(2) By transfer in bond from another distilled spirits plant.
(c) Storage. A proprietor may store spirits or wines in packages, tanks or portable bulk containers in the storage account on the bonded premises. If stored in portable containers, the containers must be kept so that they can be readily inspected or inventoried by TTB officers.
§ 19.324   Filling of packages from tanks.
A proprietor may fill spirits or wines into packages from storage tanks on bonded premises. The spirits or wines in the tank must be gauged before the filling of packages begins and again when the filling is finished if the tank is not empty. The results of the gauges must be recorded in the records required by § 19.618.
§ 19.325   Change of packages.
A proprietor may transfer spirits or wines in storage from one package to another. Each new package must contain spirits from only one package except in the case of spirits of 190° or more proof. Packages of spirits must be marked as provided in subpart S of this part. Each package of wine must bear the same marks as the package from which the wine was transferred.
§ 19.326   Mingling or blending of spirits for further storage.
A proprietor may mingle or blend spirits in the storage account according to the following rules:
(a) Spirits distilled at 190° or more of proof, whether or not later reduced, may be mingled in storage.
(b) Domestic spirits distilled at less than 190° of proof may be mingled for withdrawal or further storage if the spirits:
(1) Are of the same kind; and
(2) Were produced in the same State.
(c) Imported spirits distilled at less than 190° of proof may be mingled for withdrawal or further storage if the spirits:
(1) Are of the same kind;
(2) Were produced in the same foreign country; and
(3) Were treated, blended, or compounded in the same foreign country and the U.S. import duty was paid at the same rate.
(d) Imported spirits distilled at less than 190° of proof that are recognized as distinctive products under part 5 of this chapter may be mingled for withdrawal or further storage if the spirits:
(1) Are of the same kind;
(2) Were produced by the same proprietor in the same foreign country; and
(3) Were treated, blended, or compounded by the same proprietor in the same foreign country and the U.S. import duty was paid at the same rate.
(e) Fruit brandies distilled from the same kind of fruit at not more than 170° of proof may, for the sole purpose of perfecting such brandies according to commercial standards, be blended with each other, or with any blend of such fruit brandies in storage. Rums may, for the sole purpose of perfecting them according to commercial standards, be blended with each other, or with any blend of rums.
(f) Packaging after mingling or blending must be done under the provisions of § 19.324. The mingled or blended spirits may be returned to the packages from which they were dumped, or as many of the packages as needed.
§ 19.327   Packages dumped for mingling.
A proprietor must examine each package of spirits to be dumped for mingling. If any package bears evidence of loss due to theft or unauthorized voluntary destruction, the proprietor must notify the appropriate TTB officer before dumping the package. Mingled spirits must be recorded on the tank record required by §§ 19.592 and 19.593, as appropriate.
§ 19.328   Determining age of mingled spirits.
When spirits are mingled, the age of the spirits for the entire lot will be the age of the youngest spirits contained in the lot.
§ 19.329   Mingled spirits or wines held in tanks.
When wines or spirits of less than 190° of proof are mingled in a tank, the proprietor must gauge the spirits or wines in the tank and record the mingling gauge on the tank record prescribed in § 19.592.
§ 19.331   Use of oak chips in spirits and caramel in brandy and rum.
A proprietor may add oak chips that have not been treated with any chemical to packages of spirits. The proprietor must note the use of oak chips on all transaction records. A proprietor may add caramel that has no material sweetening properties to rum or brandy stored in packages or tanks.
§ 19.333   Physical inventories.
A proprietor must take a physical inventory of all spirits and wines held in the storage account in tanks and other containers (except packages) at the close of each calendar quarter. A proprietor must record the results of the inventory as provided in subpart V of this part. TTB may require additional inventories at any time.
§ 19.341   General.
This subpart covers processing operations at distilled spirits plants. A proprietor authorized to perform processing operations must conduct processing operations in accordance with the provisions of this subpart. Subpart V of this part sets forth recordkeeping requirements that apply to processing operations. Also, the provisions of subpart O of this part apply if a proprietor denatures spirits or manufactures articles on bonded premises as part of processing operations under this subpart.
§ 19.342   Receipt of spirits, wines, and alcoholic flavoring materials for processing.
(a) Receipt of bulk spirits. A proprietor may receive bulk spirits into the processing account:
(1) From the production or storage account at the same plant;
(2) By transfer in bond from another distilled spirits plant; or
(3) By withdrawal from customs custody under 26 U.S.C. 5232.
(b) Receipt of wines. A proprietor may receive wines into the processing account:
(1) From the storage account at the same plant; or
(2) By transfer in bond from a bonded wine cellar or another distilled spirits plant.
(c) Receipt of spirits returned to bond. A proprietor may receive spirits into the processing account that are returned to bond under the provisions of 26 U.S.C. 5215.
(d) Receipt of alcoholic flavoring materials. A proprietor may receive alcoholic flavoring materials into the processing account.
(e) Dumping of spirits, wines, and alcoholic flavoring materials. As provided in §§ 19.343 and 19.598, the proprietor must prepare a dump/batch record when spirits, wines, and alcoholic flavoring materials are dumped for use in the processing account. Spirits, wines, and alcoholic flavoring materials that are dumped into the processing account are subject to the following rules:
(1) Spirits and wines received in bulk containers or conveyances may be retained in the containers or conveyances in which received until used, but must be recorded as dumped upon receipt;
(2) Spirits and wines received by pipeline must be deposited in tanks and recorded as dumped on receipt; and
(3) Alcoholic flavoring materials may be retained in the containers in which received or may be transferred to another container if the proprietor marks or otherwise indicates thereon, the full identification of the original container, the date of receipt, and the quantity deposited. Alcoholic flavoring materials and nonalcoholic ingredients will be considered dumped when mixed with spirits or wines.
(f) Gauging. A proprietor must determine the proof gallon content of spirits, wines, and alcoholic flavoring materials at the time of dumping. Additional information regarding the gauging of spirits, wines, and alcoholic flavoring materials is found in subpart K of this part.
§ 19.343   Use of spirits, wines, and alcoholic flavoring materials.
A proprietor must prepare a dump/batch record in accordance with § 19.598 for spirits, wines, alcoholic flavoring materials, and nonalcoholic ingredients used in the manufacture of a distilled spirits product according to the following rules.
(a) Dump record. A proprietor must prepare a dump record when spirits, wines, or alcoholic flavoring materials are dumped for use in the manufacture of a distilled spirits product, and when spirits are dumped for redistillation in the processing account.
(b) Batch record. A proprietor must prepare a batch record to report:
(1) The dumping of spirits that are to be used immediately and in their entirety in preparing a batch of a product manufactured under an approved formula;
(2) The use of spirits or wines previously dumped, reported on dump records and retained in tanks or receptacles; or
(3) The use of any combination of ingredients under paragraph (b)(1) or paragraph (b)(2) of this section in preparing a batch of product manufactured under an approved formula.
§ 19.344   Manufacture of nonbeverage products, intermediate products, or eligible flavors.
(a) Distilled spirits and wine may be used for the manufacture of flavors or flavoring extracts of a nonbeverage nature as intermediate products to be used exclusively in the manufacture of other distilled spirits products on bonded premises.
(b) Nonbeverage products on which drawback will be claimed, as provided in 26 U.S.C. 5111-5114, may not be manufactured on bonded premises. Premises used for the manufacture of nonbeverage products on which drawback will be claimed must be separated from bonded premises.
(c) For purposes of computing an effective tax rate, flavors manufactured on either the bonded or general premises of a distilled spirits plant are not eligible flavors. See § 19.1 for the definition of the term “eligible flavor” and further restrictions that apply to the manufacture of an eligible flavor.
§ 19.346   Determining obscuration.
A proprietor may determine, as provided in § 30.32 of this chapter, the proof obscuration of spirits to be bottled on the basis of a representative sample taken from a storage tank before the transfer of the spirits to the processing account or from a tank after the spirits have been dumped for processing, whether or not combined with other alcoholic ingredients. The obscuration will be determined after the sample has been reduced to within one degree of bottling proof. Only water may be added to a lot of spirits to be bottled for which the determination of proof obscuration is made from a sample under this section. The proof obscuration for spirits gauged under this section must be frequently verified by testing samples taken from bottling tanks before bottling.
§ 19.348   Formula requirements.
A proprietor must obtain approval of a formula on form TTB F 5100.51 as provided in §§ 5.192 and 5.193 of this chapter before a proprietor may:
(a) Blend, mix, purify, refine, compound, or treat spirits in any manner which results in a change of character, composition, class, or type of the spirits, including redistillation as provided in § 19.314; or
(b) Produce gin or vodka by other than original and continuous distillation.
§ 19.351   Removals from processing.
(a) Method of removal. A proprietor may remove spirits or wines from the processing account in any approved bulk container, by pipeline, or in bulk conveyances in compliance with the provisions of this part. Spirits may be bottled and cased for removal.
(b) Authorized removals from processing. A proprietor may remove from processing:
(1) Spirits, upon tax determination or withdrawal under 26 U.S.C. 5214 or 26 U.S.C. 7510;
(2) Spirits, to the production account at the same plant for redistillation;
(3) Bulk spirits, by transfer in bond to production or processing account at another distilled spirits plant for redistillation or further processing;
(4) Spirits or wines, for authorized voluntary destruction; or
(5) Wines, by transfer in bond to a bonded wine cellar or to another distilled spirits plant. However, wine may not be removed from the bonded premises of a distilled spirits plant for consumption or sale as wine.
(c) Exception. Except as provided in paragraph (b)(2) and (3) of this section, spirits may not be transferred from the processing account to the storage account.
§ 19.352   Bottling tanks.
Generally, a proprietor must bottle all spirits from tanks that are listed in the notice of registration and have been certified as accurate. However, if a proprietor files a letterhead application and shows the need to do so, the appropriate TTB officer may authorize bottling from original packages, tank trucks, totes or special containers where it is not practical to use a bottling tank. In addition, a proprietor may bottle liqueurs directly from a tank truck or tote without applying for permission to TTB if the liqueurs are gauged prior to unloading and piped directly to the bottling line.
§ 19.353   Bottling tank gauge.
When a distilled spirits product is to be bottled or packaged, the proprietor must gauge the product after any filtering, reduction, or other treatment, and before bottling or packaging begins. The gauge must be made at labeling or package marking proof, subject to variations in accordance with the tolerances set forth in § 19.356(c); however, the actual measurement of the gauge must be entered on the bottling and packaging record required in § 19.599.
§ 19.354   Bottling or packaging records.
A proprietor must prepare a record for each batch of spirits bottled or packaged as provided in § 19.599. A proprietor must keep a separate daily summary record of spirits bottled or packaged as provided in § 19.601.
§ 19.355   Labels describing the spirits.
(a) Labels affixed to containers must accurately describe the spirits in the tanks from which the containers are filled. The proprietor's records must enable TTB officers to readily determine which label was used on any filled container.
(b) Additional information regarding labeling requirements is found in subpart T of this part and part 5 of this chapter.
§ 19.356   Alcohol content and fill.
(a) General. At representative intervals during bottling operations, a proprietor must examine and test bottled spirits to determine whether the alcohol content and quantity (fill) of those spirits agree with what is stated on the label or the bottle. A proprietor's test procedures must be adequate to ensure accuracy of labels on the bottled product. Proprietors must record the results of all tests of alcohol content and quantity (fill) in the record required by § 19.600.
(b) Variations in fill. Quantity (fill) must be kept as close to 100 percent fill as the equipment and bottles in use will permit. There must be approximately the same number of overfills and underfills for each lot bottled. In no case will the quantity contained in a bottle vary from the quantity stated on the label or bottle by more than plus or minus:
(1) 1.5 percent for bottles 1.0 liter and above;
(2) 2.0 percent for bottles 999 mL through 376 mL;
(3) 3.0 percent for bottles 375 mL through 101 mL; or
(4) 4.5 percent for bottles 100 mL and below.
(c) Variations in alcohol content. Variations in alcohol content may not exceed 0.3 percent alcohol by volume above or below the alcohol content stated on the label.
(d) Example. Under paragraph (c) of this section, a product labeled as containing 40 percent alcohol by volume would be acceptable if the test for alcohol content found that it contained no less than 39.7 percent alcohol by volume and no more than 40.3 percent alcohol by volume.
§ 19.357   Completion of bottling.
When the contents of a bottling tank are not completely bottled at the close of the day, the proprietor must make entries on the bottling and packaging record covering the total quantity bottled that day from the tank. Entries must be made not later than the morning of the following business day unless the proprietor maintains auxiliary or supplemental records as provided in § 19.580.
§ 19.358   Cases.
(a) On completion of bottling, a proprietor must place filled bottles with properly affixed closures in cases. A proprietor may only fill cases with the same kind, size, and proof of spirits. Normally, the cases must be sealed; however, cases may be temporarily retained on bonded premises without being sealed pending the affixing to bottles of any required labels, State stamps, or seals. Unsealed cases must be marked in accordance with subpart S of this part, and segregated from other cases until sealed. All cases must be sealed and marked as provided in subpart S of this part before removal from the bonded premises.
(b) Filled bottles may remain on the bottling line at the end of the workday if the identical product will be bottled on the next bottling shift and if adequate security measures are in place to prevent theft.
§ 19.359   Remnants.
When at the end of a bottling run fewer bottles remain than the number necessary to fill a case, the remaining bottles may be placed in a case marked as a remnant case or kept uncased on the bonded premises until spirits of the same kind are again bottled. The remnant bottles may later be used to complete the filling of a case, or may be used for another lawful purpose such as replacing accidental breakage occurring on bonded premises.
§ 19.360   Filling packages.
A proprietor may draw spirits into packages from a tank meeting the requirements of §§ 19.182 through 19.184. A proprietor must gauge the packages, report the details of the gauge on a package gauge record as provided in § 19.619, and attach a copy of the package gauge record to each copy of the bottling and packaging record covering the product. The packages must be marked as provided in subpart S of this part.
§ 19.361   Removals by bulk conveyances or pipelines.
(a) When a proprietor removes spirits from the processing account in bulk conveyances or by pipeline, the proprietor must record the removal on the bottling and packaging record.
(b) Transfers and withdrawals of bulk spirits from the processing account must be performed in accordance with the provisions of subpart P of this part.
(c) The consignor of the transfer must forward to the consignee a statement of composition or a copy of any formula under which the spirits were processed for determining the proper use of the spirits, or for the labeling of the finished product.
(d) Bulk conveyances must be marked as provided in subpart S this part.
§ 19.362   Rebottling.
When spirits are dumped for rebottling, the proprietor must prepare an appropriately modified bottling and packaging record. If the spirits were originally bottled by another proprietor, the rebottling proprietor must obtain a statement from the original bottler consenting to the rebottling.
§ 19.363   Reclosing and relabeling.
(a) A proprietor may reclose or relabel distilled spirits before removal from, or after return to, bonded premises. The reclosing or relabeling of spirits returned to bonded premises must be done immediately, and the spirits promptly removed.
(b) If the spirits were originally bottled by another proprietor, the relabeling proprietor must have on file a statement from the original bottler consenting to the relabeling.
(c) When spirits are relabeled, the proprietor must have a certificate of label approval or certificate of exemption from label approval issued under part 5 of this chapter for the labels used on relabeled spirits.
(d) A proprietor must prepare a separate record under § 19.604 for the relabeling or reclosing of spirits.
§ 19.364   Bottled-in-bond spirits.
If a proprietor labels spirits as bottled-in-bond for domestic consumption the labels must meet the requirements in part 5 of this chapter and the bottles must bear a closure or other device as required by subpart T of this part.
§ 19.365   Spirits not originally intended for export.
Spirits produced in the United States and originally intended for domestic use may be exported with benefit of drawback or without payment of tax if the containers are marked as required by part 28 of this chapter. A proprietor may relabel the spirits to show any of the information required by § 19.519. If a proprietor intends to file a claim for drawback on spirits prepared for export under this section, the proprietor must follow the provisions of § 28.195b of this chapter. If a proprietor intends to withdraw spirits without payment of tax for export, the proprietor must follow the procedures in subpart E of part 28 of this chapter.
§ 19.366   Alcohol.
(a) Containers. A proprietor may put alcohol for industrial use in bottles, packages, or other containers, subject to the provisions of subpart S of this part. A proprietor must follow the provisions of subpart T of this part when bottling alcohol for nonindustrial domestic use.
(b) Closures. Closures or other devices must be affixed to containers of alcohol as provided in subpart T of this part.
(c) Bottle labels. All bottles of alcohol for industrial use must have a label that is securely affixed to the bottle showing the word “Alcohol” and the name and plant number of the bottler. The proprietor may place additional information on the label if it is not inconsistent with the required information.
(d) Case marks. Each case of bottled alcohol must bear the marks required by subpart S of this part.
§ 19.371   Inventories of wines and bulk spirits in processing.
A proprietor must take a physical inventory of all wines and bulk spirits (except packages) held in the processing account at the close of each calendar quarter. The results of the inventory must be recorded as provided in subpart V of this part. TTB may require additional inventories at any time.
§ 19.372   Physical inventories of bottled and packaged spirits.
(a) Physical inventories. Generally, a proprietor must take physical inventories of bottled and packaged spirits in the processing account for the return periods ending June 30 and December 31, and at any other time that the appropriate TTB officer requires. Physical inventories may be taken within a period of a few days before or after June 30 or December 31 if:
(1) The period does not include more than one complete weekend; and
(2) Necessary adjustments are made to the inventory record to reflect the actual quantities on hand June 30 or December 31.
(b) Alternate dates. On approval of an application filed with the appropriate TTB officer, required physical inventories may be taken on dates other than June 30 and December 31 if the dates established for taking such inventories:
(1) Coincide with the end of a return period, and
(2) Are approximately 6 months apart.
(c) Waiver of physical inventory. A proprietor may file an application to take only one physical inventory per year. The appropriate TTB officer may approve the application if she or he finds that only one physical inventory per year will be sufficient to protect the revenue. However, the requirement for the waived inventory may be reimposed if it becomes necessary for protection of the revenue.
(d) Notification of physical inventory. A proprietor must notify the appropriate TTB officer at least 5 business days in advance of the date and time of a physical inventory of bottled or packaged spirits. TTB officers may be assigned to verify or supervise physical inventories taken under the provisions of this section.
§ 19.381   General.
This subpart covers the denaturation of spirits and the manufacture of articles by proprietors of distilled spirits plants. Denatured spirits are distilled spirits that have been rendered unsuitable for beverage use by the addition of specific amounts of approved denaturing materials. For purposes of this subpart, articles are products that contain denatured spirits and that are made in accordance with this subpart or part 20 of this chapter. Proprietors who are qualified under this part as processors may make denatured spirits and articles in accordance with the provisions of this subpart. Additional requirements regarding the distribution, use, and standards for denatured spirits are set forth in parts 20 and 21 of this chapter.
§ 19.382   Formulas.
(a) Approved formulas. A proprietor must denature spirits according to an approved formula listed in part 21 of this chapter.
(b) Alternate formulas and denaturants. If a proprietor wishes to denature spirits by using an alternative formula or a different denaturant, the proprietor must apply to TTB for authorization. A proprietor must receive written approval from the appropriate TTB officer before denaturing spirits using an alternative formula or a different denaturant. See also §§ 21.5 and 21.91 of this chapter for additional requirements that apply in these circumstances.
§ 19.383   Gauging for denaturation.
(a) General. A proprietor must gauge spirits before denaturation and after denaturation and must record each gauge in the record of denaturation required by § 19.606(b). However, a proprietor is not required to gauge either spirits that are dumped from previously gauged containers or spirits that are transferred directly to mixing tanks from gauge tanks where they were gauged. Measurements of spirits and denaturants may be made by volume, weight, accurate mass flow meter, or by any other device that has been approved by the appropriate TTB officer.
(b) Denaturation and article manufacture in a single process. When a proprietor both denatures spirits and manufactures articles in a single, unified process, the proprietor may, in place of the procedure specified in paragraph (a) of this section, gauge the spirits before and after denaturation in the following manner:
(1) Gauge the spirits to be denatured by volume, weight, accurate mass flow meter, or other device or method approved by the appropriate TTB officer;
(2) Gauge the denaturants to be used by volume, weight, accurate mass flow meter, or other device approved by the appropriate TTB officer; and
(3) Compute the number of wine gallons of denatured spirits produced, and enter this figure in the record required by § 19.606(b). In calculating the amount of denatured spirits produced, the proprietor must not include in the calculation the amount of additional chemicals or denaturants used for article manufacture.
§ 19.384   Adding denaturants to spirits.
(a) When making denatured spirits, a proprietor must mix the denaturants and spirits only in packages, tanks or bulk conveyances and only on bonded premises. A proprietor must thoroughly mix the denaturants with the spirits to ensure that all of the spirits are effectively denatured.
(b) If a proprietor wishes to use another method of mixing denaturants and spirits not prescribed in this subpart, the proprietor must submit to the appropriate TTB officer a written application for approval of the alternative method in accordance with § 19.27. TTB may require that the proprietor submit additional information, including a flow diagram or other graphic representation of the alternative method, in support of the application.
§ 19.385   Making alcohol or water solutions of denaturants.
If a proprietor uses a denaturant that is difficult to dissolve in spirits at normal working temperatures, that is highly volatile, or that becomes solid at normal working temperature, the proprietor may liquefy or dissolve the denaturant in a small amount of spirits or water prior to its use in the production of denatured spirits. However, the proof of the denatured spirits produced must not fall below the proof required by the approved formula. In addition, if alcohol is used as a solvent, the proprietor must include this additional alcohol in calculating the total quantity of spirits denatured in the batch.
§ 19.386   Adjusting pH of denatured spirits.
A proprietor may add trace amounts of acidic or caustic chemical compounds to adjust or neutralize the pH of denatured spirits. However, a proprietor may not adjust the pH with any substance that will counteract or reduce the effect of the denaturants. A proprietor who adjusts the pH of denatured spirits must keep a record of the adjustment with reference to the formula number of the treated denatured spirits. The record must include the kinds and quantities of chemical compounds used for each batch of denatured spirits treated.
§ 19.387   Ensuring the quality of denaturants.
(a) General. Proprietors must ensure that the materials they receive for use in denaturing conform to the specifications prescribed in part 21 of this chapter. In addition, the appropriate TTB officer may require that a proprietor test the quality of denaturants at any time.
(b) Testing. A proprietor must comply with the following when testing a lot of denaturants:
(1) Sampling denaturants. Proprietors must use good commercial practice when taking samples of denaturants for quality assurance testing. Samples of denaturants must be representative of the lot being sampled.
(2) Third party testing. A proprietor may employ an outside laboratory or other appropriate third party to test samples of denaturants. In the case of a third party test, the proprietor must obtain a copy of the analysis or statement of findings signed by the chemist who performed the test. On request, the proprietor must provide to the appropriate TTB officer samples of denaturants for quality control testing in a Government laboratory.
(c) Substandard denaturants. If TTB or a proprietor finds that a material does not conform to the specifications for a denaturant prescribed in part 21 of this chapter, the proprietor must immediately terminate use of the substandard material as a denaturant. However, the proprietor may continue to use the material as a denaturant after treating or reprocessing the substandard material to correct the deficiency and bring the material into conformity with the applicable specifications.
§ 19.388   Storing denatured spirits.
(a) Bonded storage. A proprietor must store on bonded premises all denatured spirits produced, received in bond, or received by return to bond.
(b) Storage methods. A proprietor may store denatured spirits on bonded premises in any appropriate tank, package or container authorized for filling with denatured spirits. The proprietor must store containers of denatured spirits in a manner that allows for easy inspection and inventory of the denatured spirits by TTB officers. A proprietor must store portable containers of denatured spirits within a building or structure that protects the spirits from unauthorized access. A proprietor may apply to the appropriate TTB officer for authorization to store containers of denatured spirits in an alternative manner in accordance with § 19.27.
(c) Tank Records. A proprietor must maintain a record for tanks in which denatured spirits are stored in accordance with § 19.606.
§ 19.389   Filling containers from tanks.
(a) Filling portable containers. A proprietor may fill portable containers with denatured spirits from tanks on the bonded premises.
(b) Accounting for denatured spirits in filling operations. In performing filling operations under paragraph (a) of this section, a proprietor must:
(1) Gauge the denatured spirits remaining in the tanks at the end of each filling operation;
(2) Maintain a record of each gauge and document the quantity of denatured spirits drawn from the tank during each filling operation; and
(3) Make a record of any spirits lost during the filling operation.
(c) Gauging requirements. The provisions of § 19.289(a) and (c) apply to the filling and gauging of portable containers. In addition, a proprietor may withdraw denatured spirits from the bonded premises in portable containers based on the filling gauge.
§ 19.390   Container marking requirements.
A proprietor must mark packages and portable containers containing denatured spirits in accordance with the requirements of subpart S of this part.
§ 19.391   Mixing denatured spirits.
(a) Spirits of the same formula. If a proprietor has two or more different batches of denatured spirits produced under the same formula, the proprietor may mix them on bonded premises.
(b) Spirits of different formulas. A proprietor may mix denatured spirits produced under different formulas on bonded premises for immediate redistillation at the same plant or at another plant subject to the provisions of §§ 19.314, 19.315, and 19.316.
§ 19.392   Converting denatured alcohol to a different formula.
(a) General. A proprietor may convert specially denatured alcohol (SDA) from one formula of SDA to another formula of SDA if the resultant mixture contains only alcohol and the denaturants listed for an approved SDA formula and in the correct concentrations, as set forth in part 21 of this chapter. Such converted SDA may be used only as authorized in part 21 of this chapter.
(b) Converting SDA to SDA Formula No. 1 —(1) All SDA other than SDA Formulas No. 3-A and No. 30. A proprietor may convert any SDA, other than SDA produced under Formulas No. 3-A and No. 30, into SDA Formula No. 1 by adding methyl alcohol and any one of the other alternative denaturants listed in § 21.32 of this chapter in accordance with the formulation prescribed in that section.
(2) SDA Formulas No. 3-A and No. 30. SDA Formulas No. 3-A and No. 30 specify more methyl alcohol than is specified for SDA Formula No. 1. Therefore, in order to convert SDA produced under Formulas No. 3-A or No. 30 into SDA under Formula No. 1, a proprietor must first add a sufficient amount of ethyl alcohol to the SDA in question to bring the methyl alcohol content to the proportion prescribed for SDA Formula No. 1. After adjusting the proportion of methyl alcohol, the proprietor must add the specified amount of any one of the other alternative denaturants listed in § 21.32 of this chapter.
(c) Converting SDA to SDA Formula No. 29. A proprietor may convert any SDA into SDA Formula No. 29 by adding the amount of acetaldehyde or ethyl acetate specified in § 21.56 of this chapter. However, due to the presence of other denaturants from the original formula, SDA under Formula No. 29 that has been converted from another SDA formula may be used only as authorized in § 21.56(b) but not in the manufacture of vinegar, drugs or medicinal chemicals, and the conditions governing use provided in § 21.56(c) will apply.
(d) Other conversions of SDA. If a proprietor wishes to make an SDA formula conversion other than one authorized in paragraph (a), (b), or (c) of this section, the proprietor must obtain approval from the appropriate TTB officer prior to the conversion.
(e) Conversions to completely denatured alcohol. A proprietor may convert any SDA from a formula that does not contain methyl alcohol or wood alcohol to any one of the completely denatured alcohol (CDA) formulas prescribed in subpart C of part 21 of this chapter, by adding the denaturants specified for CDA.
§ 19.393   Restoration and redenaturation of recovered denatured spirits and recovered articles.
(a) Recovered denatured spirits and articles. A proprietor may receive recovered denatured spirits and recovered articles on bonded premises for restoration (including redistillation, if necessary), or redenaturation, or both, as provided in subpart Q of this part. However, the proprietor may not withdraw the spirits from bonded premises except for industrial use or after redenaturation.
(b) Spirits or articles retaining some denaturants. If recovered denatured spirits or recovered articles are to be redenatured and do not require the full amount of denaturants for redenaturation, the proprietor must make an entry to that effect in the record of denaturation required by § 19.606(b).
§ 19.394   Inventory of denatured spirits.
A proprietor must take a physical inventory of all denatured spirits in the processing account at the close of each calendar quarter. The proprietor must record the results of that inventory as provided in subpart V of this part. TTB may require additional inventories at any time.
§ 19.395   Manufacture of articles.
A proprietor must manufacture, label, mark and dispose of articles in accordance with part 20 of this chapter.
§ 19.396   Required records.
(a) Records of denaturing operations. A proprietor who denatures spirits must maintain daily records of denaturing operations in accordance with § 19.606.
(b) Records of manufacture of articles. A proprietor who manufactures articles must maintain daily records in accordance with § 19.607.
§ 19.401   Authorized transactions.
(a) General. A proprietor of a distilled spirits plant may transfer spirits and wines in bond to other distilled spirits plants, receive spirits and wines in bond from other distilled spirits plants, receive spirits from customs custody, and withdraw spirits from the distilled spirits plant without payment of tax or free of tax under certain conditions. This subpart sets forth the rules that a proprietor must follow when so transferring, receiving, or withdrawing spirits and wines and also includes related rules for taking samples and securing conveyances.
(b) Other transfers and withdrawals. For withdrawals of spirits from bonded premises on determination or payment of tax, see subpart I of this part. For rules regarding withdrawals for exportation and transfers to foreign trade zones or to customs bonded warehouses, see part 28 of this chapter.
§ 19.402   Authorized transfers in bond.
The IRC allows a proprietor to transfer and receive spirits, wines, and industrial alcohol as provided in paragraphs (a) through (c) of this section.
(a) Spirits. Bulk spirits or denatured spirits may be transferred in bond between the bonded premises of plants qualified under 26 U.S.C. 5171 or 26 U.S.C. 5181 in accordance with §§ 19.403 and 19.733. However, spirits or denatured spirits produced from petroleum, natural gas, or coal may not be transferred to alcohol fuel plants.
(b) Wine. Wines may be transferred:
(1) From a bonded wine cellar to the bonded premises of a distilled spirits plant;
(2) From the bonded premises of a distilled spirits plant to a bonded wine cellar; and
(3) Between the bonded premises of distilled spirits plants.
(c) Alcohol for industrial purposes. Alcohol bottled for industrial purposes in accordance with § 19.366 and subpart S of this part, may be transferred between the bonded premises of distilled spirits plants in the same manner as provided in §§ 19.403 through 19.407 for bulk distilled spirits.
§ 19.403   Application to receive spirits in bond.
(a) When the proprietor of a distilled spirits plant qualified under 26 U.S.C. 5171 or of an alcohol fuel plant qualified under 26 U.S.C. 5181 wishes to have spirits or denatured spirits transferred in bond to their plant from another distilled spirits plant, the proprietor must complete an application on form TTB F 5100.16, Application for Transfer of Spirits and/or Denatured Spirits in Bond, in triplicate, and forward it to the appropriate TTB officer for approval. A proprietor is not required to submit an application on TTB F 5100.16 for transfers from customs custody under 26 U.S.C. 5232.
(b) Except to the extent the proprietor is not required to provide a bond under § 19.151(d), TTB will not approve the application submitted under paragraph (a) of this section unless the proprietor's operations bond or unit bond either is in the maximum penal sum amount or is sufficient to cover the tax on the spirits or denatured spirits to be transferred in addition to all other liabilities chargeable against the bond. If TTB approves the application, TTB will return two signed copies of the approved application to the proprietor.
(c) Upon receipt of an approved application from TTB, the proprietor must retain one of the signed copies for their files and forward the other signed copy to the consignor that will ship the spirits or denatured spirits.
§ 19.404   Termination of application.
A proprietor may at any time terminate an approved application on form TTB F 5100.16 by retrieving the consignor's copy and returning it together with their own approved copy to the appropriate TTB officer for cancellation.
§ 19.405   Consignor for in-bond shipments.
(a) General. A proprietor who ships spirits, denatured spirits, or wines by transfer in bond is the “consignor” of the shipment for purposes of this part. The following rules apply to these transfers:
(1) A consignor who is a proprietor of a distilled spirits plant must prepare a transfer record in accordance with § 19.620 to cover the transfer in bond of—
(i) Spirits or denatured spirits to another distilled spirits plant pursuant to an approved application on form TTB F 5100.16, Application for Transfer of Spirits and/or Denatured Spirits in Bond;
(ii) Wine to the bonded premises of a distilled spirits plant or a bonded wine cellar; or
(iii) Spirits or denatured spirits to an alcohol fuel plant pursuant to an approved application on TTB F 5100.16, Application for Transfer of Spirits and/or Denatured Spirits in Bond; and
(2) A consignor who is a proprietor of an alcohol fuel plant must prepare a transfer record in accordance with § 19.620 to cover the transfer in bond of spirits to the bonded premises of a distilled spirits plant pursuant to an approved application on TTB F 5100.16.
(b) Disposition of the transfer record. On completion of lading or transfer by pipeline, the consignor must retain one copy of the transfer record and one copy of any accompanying document and must forward the original transfer record and any accompanying document to the consignee. If the shipment is made by truck, the original transfer record and accompanying documents must accompany the shipment.
(c) Multiple shipments. As a general rule, a consignor must prepare a transfer record for each conveyance. However, a consignor may prepare a single transfer record that covers all packages of spirits shipped by truck on the same day to the same plant. In such a case, the consignor must prepare a shipment and delivery order for each shipment showing the number of packages, their serial numbers or other package identification, the name of the producer, warehouseman, or processor, and the serial numbers of any seals or other security devices applied to the truck. The shipping and delivery order must be properly authenticated by the consignor and must constitute a complete record of the spirits transferred in each truck each day. The consignor must retain a copy of each shipping and delivery order. After lading the last truck for the day, the consignor must retain one copy of the single transfer record and one copy of any accompanying document and forward the original single transfer record and accompanying document to the consignee.
(d) Packages. When a consignor transfers spirits in packages, the consignor must weigh each package except in the following circumstances:
(1) When transferring the spirits in a secured conveyance;
(2) When the consignor has securely sealed the individual packages; or
(3) When the appropriate TTB officer waives this requirement upon a finding that there will be no jeopardy to the revenue.
(e) Temporary serial numbers. When packages are weighed at the time of shipment, the consignor must assign temporary serial numbers to the packages and show for each package its gross shipment weight on a package gauge record prepared in accordance with § 19.619. A copy of the package gauge record must accompany each original or copy of the transfer record.
(f) Bulk conveyances and pipelines. When a consignor transfers spirits, denatured spirits, or wines in bulk conveyances or by pipelines, the consignor must gauge the spirits, denatured spirits, or wines and record the quantity determined on the transfer record required under § 19.620 or § 24.309 of this chapter. The consignor must secure bulk conveyances of spirits or denatured spirits pursuant to § 19.441 of this part.
§ 19.406   Reconsignment of in-bond shipments.
A consignor may reconsign an in-bond shipment of spirits, denatured spirits, or wines prior to, or upon, arrival of the shipment at the premises of the consignee for any good faith reason. The consignor may reconsign the shipment to himself or to another consignee who is qualified to receive the shipment and has an adequate bond. In either case, an Application for Transfer of Spirits and/or Denatured Spirits in Bond on form TTB F 5100.16 must have been previously approved for the new consignee, except that an approved TTB F 5100.16 is not required for the transfer of wine. The bond of the new consignee will cover the shipment while in transit after reconsignment. When a consignor reconsigns a shipment, the consignor must prepare a new transfer record prominently marked with the word “Reconsignment”. The consignor must also notify the original consignee that the transfer has been cancelled.
§ 19.407   Consignee premises.
(a) General. A proprietor who receives spirits, denatured spirits, or wines by transfer in bond is the “consignee” of the shipment for purposes of this part. Upon arrival of an in-bond shipment at the consignee's premises or at the destination point specified in the carrier's transportation documents, the consignee must:
(1) Examine each conveyance to determine whether the securing devices, if any, are intact upon arrival. If the securing devices are not intact, the consignee must immediately notify the appropriate TTB officer before removal of any spirits from the conveyance;
(2) Determine, record, and report any losses as required by subpart R of this part;
(3) Acknowledge receipt of the shipment on the transfer record as required by § 19.621 or § 24.309 of this chapter and retain the original of the transfer record and any accompanying documents for their files. Retained copies of transfer records will become deposit records for purposes of this part; and
(4) Identify separately any spirits that were produced at an alcohol fuel plant. Those spirits may not be withdrawn, used, sold or otherwise disposed of for other than fuel use.
(b) Packages. When a consignee receives spirits in packages, the consignee must weigh each package. The consignee must record the receiving weight of each package on the accompanying package gauge record or on a list according to temporary package serial numbers prepared by the consignor. A copy of the package gauge record or list must remain with the original transfer record. However, the consignee is not required to weigh each package when:
(1) The transfer is made in a secured conveyance and the securing devices are intact on arrival;
(2) The individual packages were sealed by the consignor and are intact on arrival; or
(3) The requirement for weighing the packages at the consignor's premises has been waived under § 19.405(d)(3).
(c) Bulk conveyances and pipelines. When a consignee receives spirits, denatured spirits, or wines by bulk conveyance or by pipeline, the consignee must:
(1) Make a gauge and record the results on the transfer record in accordance with § 19.621 or § 24.309 of this chapter. However, the appropriate TTB officer may waive the gauging requirement for receipts by pipeline upon a finding that there will be no jeopardy to the revenue; and
(2) Ensure that each conveyance is empty and has been thoroughly drained.
§ 19.409   General.
A proprietor may withdraw from customs custody spirits imported or brought into the United States in bulk containers for transfer of those spirits without payment of tax to the bonded premises of the proprietor's distilled spirits plant. The proprietor may receive these spirits either in bulk containers or by pipeline. Spirits received on bonded premises under this section may be:
(a) Withdrawn for any purpose authorized by chapter 51 of the IRC in the same manner as domestic spirits; or
(b) Redistilled or denatured only at 185° or more of proof. For the requirements regarding transfers of bulk spirits from customs custody to the bonded premises of a distilled spirits plant, see subpart L of part 27 of this chapter.
§ 19.410   Age and fill date.
For purposes of this part, the age and fill date for spirits imported or brought into the United States will be:
(a) The claimed age, as shown on the documentation required under part 5 of this chapter; and
(b) The date that packages of spirits are released from customs custody or are filled on the bonded premises of a distilled spirits plant.
§ 19.411   Recording gauge.
(a) Receipts into storage. When a proprietor receives into the storage account packages of spirits from customs custody, the proprietor must use the last official gauge to compute and record the average content of the packages received in the storage records required under § 19.590. That gauge also will constitute the basis for entries on the package summary records required under § 19.591. If the last official gauge indicates a substantial variation in the contents of the packages, the proprietor must group the packages into lots according to their approximate contents and assign a separate lot identification to each group of packages, based on the date the packages were received on bonded premises.
(b) Receipts into processing. When a proprietor receives into the processing account packages of spirits from customs custody the proprietor must determine the proof gallons of spirits received in each package. The determination may be made by using the last official gauge.
§ 19.412   Importation of denatured spirits.
For provisions relating to the importation of denatured spirits, see § 27.222 of this chapter.
§ 19.414   Marks on containers of imported spirits.
(a) General. Except as provided in paragraph (c) of this section, when a proprietor receives imported bulk containers of spirits on bonded premises under § 19.409 or fills packages from imported bulk containers on the proprietor's bonded premises, each container or filled package must be marked with:
(1) The name of the importer;
(2) The country of origin of the spirits;
(3) The kind of spirits;
(4) In the case of filled packages, the package identification number as required under § 19.485 or the package serial number as required under § 19.490. Package identification numbers and package serial numbers must be preceded by the symbol “IMP”;
(5) If the package is filled on bonded premises, the date of fill;
(6) The proof; and
(7) The proof gallons of spirits in the package.
(b) Responsibility for marks. Except as otherwise provided in paragraph (c) of this section, the proprietor who receives packages of imported spirits under § 19.409 is responsible for ensuring that the required marks are placed on the packages and for preparing the required deposit records.
(c) Exception. A proprietor is not required to place or ensure the placement of prescribed marks on packages when the spirits will be removed from the packages within 30 days after receipt at the distilled spirits plant. However, the proprietor must still assign package identification numbers or package serial numbers for use on deposit records and other transaction forms, records, or reports.
§ 19.415   Marks on containers of Puerto Rican and Virgin Islands spirits.
(a) Packages from Puerto Rico. When a proprietor receives packages of Puerto Rican spirits on bonded premises under the provisions of this subpart, the markings required under § 26.40 of this chapter will be acceptable in place of the markings required under § 19.414. However, the proprietor still must mark each package to show the date of fill as required under § 19.410, and must include on each package the words “Puerto Rican” or the abbreviation “P.R.”.
(b) Packages from the Virgin Islands. When a proprietor receives packages of Virgin Islands spirits on bonded premises under the provisions of this subpart, the markings required under § 26.206 of this chapter will be acceptable in place of the markings required under § 19.414. However, the proprietor still must mark each package to show the date of fill as required under § 19.410, and must include on each package the words “Virgin Islands” or the abbreviation “V.I.”.
(c) Portable bulk containers. Portable bulk containers of Puerto Rican or Virgin Islands spirits that are filled on bonded premises must be marked in accordance with § 19.484. In addition, those containers must be marked with the serial number of any approved formula under which they were produced and with the words “Puerto Rican” or the abbreviation “P.R.” or “Virgin Islands” or the “V.I.”, as applicable.
(d) Cases of bottled alcohol. Alcohol from Puerto Rico or the Virgin Islands that is bottled and cased on bonded premises must be marked as required by § 19.496. In addition, the words “Puerto Rican” or “Virgin Islands” or the abbreviation “P.R.” or “V.I.”, respectively, must precede the word “alcohol” designation on the cases.
§ 19.418   Authorized withdrawals without payment of tax.
(a) A proprietor may withdraw spirits from bonded premises without payment of tax for:
(1) Export, as authorized under 26 U.S.C. 5214(a)(4);
(2) Transfer to customs manufacturing bonded warehouses, as authorized under 19 U.S.C. 1311;
(3) Transfer to foreign trade zones, as authorized under 19 U.S.C. 81c;
(4) Supplies for certain vessels and aircraft, as authorized under 19 U.S.C. 1309;
(5) Transfer to customs bonded warehouses, as authorized under 26 U.S.C. 5066 or 5214(a)(9);
(6) Use in wine production, as authorized under 26 U.S.C. 5373;
(7) Transfer to any university, college of learning, or institution of scientific research for experimental or research use as authorized under 26 U.S.C. 5312(a);
(8) Research, development or testing, as authorized under 26 U.S.C. 5214(a)(10); or,
(9) Use on bonded wine cellar premises in the production of wine and wine products which will be rendered unfit for beverage use, as authorized under 26 U.S.C. 5362(d).
(b) If a proprietor withdraws spirits for any of the purposes listed under paragraphs (a)(1) through (a)(5) of this section, the proprietor must do so in accordance with the provisions of part 28 of this chapter.
§ 19.419   Withdrawals of spirits for use in wine production.
A proprietor may withdraw wine spirits without payment of tax for transfer in bond to a bonded wine cellar for use in wine production. The proprietor, as consignor, must prepare a transfer record in accordance with § 19.620. In addition, the proprietor must prepare a package gauge record in accordance with § 19.619 and must attach it to the transfer record, unless the wine spirits are already in packages and are being withdrawn on the production or filling gauge.
§ 19.420   Withdrawals of spirits without payment of tax for experimental or research use.
A scientific university, college of learning, or institution of scientific research qualified under § 19.35 may withdraw spirits from bonded premises without payment of tax for experimental or research use. In order to withdraw a specific quantity of spirits for experimental or research use, the qualified institution must file a letterhead application with, and receive written approval from, the appropriate TTB officer.
§ 19.421   Withdrawals of spirits for use in production of nonbeverage wine and nonbeverage wine products.
A proprietor may withdraw spirits without payment of tax for transfer to a bonded wine cellar for use in the production of nonbeverage wine and nonbeverage wine products in accordance with part 24 of this chapter. The proprietor, as consignor, must prepare a transfer record in accordance with § 19.620. In addition, the proprietor must prepare a package gauge record in accordance with § 19.619 and must attach it to the transfer record, unless the wine spirits are already in packages and are being withdrawn on the production or filling gauge.
§ 19.424   Authorized withdrawals free of tax.
A proprietor may withdraw spirits from bonded premises free of tax as provided in this chapter:
(a) Upon receipt of a signed photocopy of a permit to withdraw and use alcohol free of tax issued on form TTB F 5150.9 under part 22 of this chapter;
(b) Upon receipt of a signed photocopy of a permit to procure spirits free of tax for use of the United States or any governmental agency, any State, any political division of a State, or the District of Columbia for nonbeverage purposes as provided in 26 U.S.C. 5214(a)(2) issued on form TTB F 5150.33 under part 22 of this chapter;
(c) Upon receipt of a valid permit issued under this part to procure spirits by and for the use of the United States under the provisions of 26 U.S.C. 7510 for purposes other than those specified in paragraph (b) of this section;
(d) If the spirits are specially denatured—
(1) Upon receipt of a signed photocopy of a permit to procure specially denatured spirits issued on TTB F 5150.9 under part 20 of this chapter; or
(2) For export;
(e) If the spirits are completely denatured, for any lawful purpose; or
(f) If the spirits are contained in an article.
§ 19.425   Withdrawal of spirits free of tax.
When a proprietor ships tax-free spirits to a permit holder as provided under § 19.424, the proprietor must:
(a) Ship the spirits to the consignee designated in the permit;
(b) Ship the spirits in approved containers;
(c) Gauge each container, unless the spirits are in cases or are withdrawn based on the production or filling gauge;
(d) Prepare a package gauge record in accordance with § 19.619, and attach it to the record of shipment if the spirits are in packages that are to be gauged;
(e) Prepare a record of shipment (shipping invoice, bill of lading, or other document serving the same purpose) for each shipment and forward the original to the consignee as provided in § 19.625; and
(f) Secure all bulk conveyances as provided in § 19.441.
§ 19.426   Withdrawal of spirits by the United States.
(a) Withdrawal for nonbeverage use —(1) Permit required. Agencies of the United States Government that wish to obtain either specially denatured spirits or spirits free of tax for nonbeverage purposes must apply for and receive a permit on form TTB F 5150.33 or must have a previously issued permit on ATF Form 1444. TTB issues permits to Government agencies for:
(i) Withdrawal and use of specially denatured spirits under part 20 of this chapter;
(ii) Withdrawal and use of alcohol free of tax for nonbeverage purposes under part 22 of this chapter; and
(iii) Importation and use of alcohol free of tax for nonbeverage purposes under part 27 of this chapter.
(2) Orders and shipments. In order to obtain spirits under this section, the United States Government agency must forward a copy of a signed permit to the distilled spirits plant for the initial purchase. Later orders with the same plant may refer to that permit number. In the case of a Government agency holding a single permit for use by its subagencies, the copy of the signed permit must contain an attachment listing all subagencies authorized to obtain spirits under that permit. For each shipment that a proprietor makes to a Government agency under this section, the proprietor must prepare a record of shipment and forward the original to the Government agency as provided in § 19.625.
(b) Withdrawal for beverage use. Agencies of the United States Government that wish to obtain distilled spirits free of tax for beverage purposes under 26 U.S.C. 7510 must provide a proper purchase order signed by the head of the agency or an authorized designee. Each case of spirits withdrawn must bear a plain mark “For Use of the United States” in addition to the marks required by subpart S of this part. For each withdrawal under this paragraph, the proprietor must prepare a record containing the information required by § 19.611 for a record of tax determination and must mark this record “Free of Tax for Use of the United States.”
§ 19.427   Removal of denatured spirits and articles.
(a) Specially denatured spirits. (1) Specially denatured spirits withdrawn by a proprietor free of tax under § 19.424(d) must be shipped in the type of containers authorized under subpart S to the consignee designated on the permit. Bulk conveyances used to transport specially denatured spirits must be secured as required by § 19.441, and the proprietor must prepare a record of shipment in accordance with § 19.625. If a proprietor withdraws specially denatured spirits for export or for transfer to a foreign trade zone for export or for storage pending export, the provisions of part 28 of this chapter will apply to the withdrawal.
(2) A proprietor may transfer specially denatured spirits to qualified users located in a foreign trade zone for use in the manufacture of articles under part 20 of this chapter.
(b) Completely denatured alcohol. No permit, application, or notice is required for the removal of completely denatured alcohol from bonded premises.
(c) Samples of denatured spirits. (1) A proprietor may take samples of denatured spirits free of tax that are necessary for the conduct of business. A proprietor may furnish samples of specially denatured spirits:
(i) To dealers in, and users of, specially denatured spirits in advance of sales; or
(ii) To applicants or prospective applicants for permits to use specially denatured spirits for experimental purposes or for use in preparing samples of a finished product for submission to TTB.
(2) A proprietor must maintain records to ensure that samples of specially denatured spirits furnished to each nonpermittee do not exceed 5 gallons per calendar year. However, a proprietor may furnish samples in excess of 5 gallons to a nonpermittee if the consignee has provided the proprietor with a letterhead application approved under § 20.252 of this chapter. The proprietor must retain the approved letterhead application on file as a part of the record of transaction. For each shipment of a sample over the 5 gallon limit, the proprietor must prepare a record of shipment and forward the original to the consignee as provided in § 19.625. Each such sample must bear a label showing the word “Sample”, the words “Specially Denatured Alcohol” or “Specially Denatured Rum” as applicable, the formula number, and the proprietor's name, address, and plant number. The proprietor must maintain records of samples of less than 5 gallons as provided in § 19.616.
(d) Articles. A proprietor may remove articles from bonded premises in accordance with part 20 of this chapter.
§ 19.428   Reconsignment.
(a) A consignor may reconsign a shipment of spirits or specially denatured spirits withdrawn free of tax under § 19.424. The shipment may be reconsigned while in transit or upon arrival at the consignee's premises for any bona fide reason. The consignor may reconsign the shipment:
(1) To himself;
(2) To a proprietor for return to bonded premises under § 19.454; or
(3) To another consignee holding a valid permit issued under part 20 or 22 of this chapter.
(b) In the case of reconsignment to a proprietor for return to bonded premises under § 19.454, the distilled spirits plant proprietor who will return the spirits to bond must file a consent of surety on form TTB F 5000.18 to extend the terms of the operations or unit bond to cover the return of the spirits.
(c) When a consignor reconsigns a shipment, the consignor must cancel the initial record of shipment and prepare a new record of shipment marked “Reconsignment”. The consignor must annotate the copies of the canceled record of shipment and the new record of shipment to cross-reference each other.
§ 19.431   Withdrawal of spirits on production gauge.
A proprietor may withdraw spirits from bonded premises for any lawful purpose based on the production gauge when it is made in accordance with § 19.289(b). Spirits may be withdrawn without payment of tax for export based on the production gauge when it is made under § 19.289(c). When spirits that are to be withdrawn on determination of tax on the original gauge are transferred in bond, all copies of the transfer record required by § 19.620 must be marked “Withdrawal on Original Gauge”.
§ 19.434   Spirits withdrawn from bonded premises.
(a) Laboratory samples. A proprietor may withdraw spirits without payment of tax, or may withdraw wine spirits or brandy free of tax, to the proprietor's laboratory, to the laboratory of an affiliated or subsidiary corporation, or, if approved by the appropriate TTB officer, to a recognized commercial laboratory. The samples must be used only for testing or analysis to determine the quality or character of the finished product and must be withdrawn in the minimum amounts necessary for the purpose.
(b) Customer samples. If a bona fide purchase agreement exists that is contingent upon quality approval, a proprietor may furnish to a prospective customer a sample of spirits not exceeding 1 liter for quality testing. A proprietor may furnish a sample not to exceed 1 liter to a prospective customer for quality testing in anticipation of a purchase agreement if the customer is authorized to receive bulk spirits for industrial use.
(c) Research or development. A proprietor may withdraw spirits without payment of tax for research or development testing, for testing of processes, systems, or materials, or for the testing of equipment relating to distilled spirits or distilled spirits plant operations. The amount withdrawn must be limited to the amount reasonably necessary to conduct the test. If the test is to be conducted by someone other than the proprietor, the proprietor must obtain a written statement, executed by the consignee, agreeing to maintain records of the receipt, use, and disposition of all spirits received for purposes of the test. The statement must specify that records of operations will be available during regular business hours for inspection by TTB officers.
(d) Conditions. The following conditions apply to the withdrawal and testing of samples under this section:
(1) The spirits may not be used for consumer testing or other market analysis;
(2) The proprietor must maintain the records specified in § 19.616; and
(3) Remnants or residues of spirits not used during testing must be destroyed or returned to the bonded premises of the proprietor.
(e) Liability for tax. The proprietor must pay the tax on any samples of spirits withdrawn, used, or disposed of in a manner not authorized by this section.
(f) Losses. When spirits are lost before use for a purpose authorized under this section, the proprietor must pay the tax or must file a claim for remission of tax liability in accordance with § 19.263.
§ 19.435   Samples used on bonded premises.
A proprietor may take samples of spirits for research, development, testing, or laboratory analysis conducted in a laboratory located on the bonded premises. The purposes, conditions, and limitations specified for samples under § 19.434 will also apply to samples used under this section.
§ 19.436   Taxpayment of samples.
When a proprietor is required to pay tax on samples under § 19.434(f), the proprietor may include the tax on the next semimonthly or quarterly tax return, as appropriate, if qualified to defer payment of tax. If a proprietor is not qualified to defer payment of tax, the proprietor must prepay the tax on form TTB F 5000.24. See subpart I of this part for rules regarding the payment of taxes.
§ 19.437   Labels.
(a) On each container of spirits withdrawn under § 19.434, the proprietor must affix a label showing the following information:
(1) The proprietor's name and plant number;
(2) The date withdrawn;
(3) The purpose for which withdrawn;
(4) The kind of spirits;
(5) The size and the proof of the sample, if known; and
(6) The name and address of the consignee, if the spirits are removed other than to the proprietor's adjacent or contiguous premises.
(b) The labeling prescribed under paragraph (a) of this section is not required when the sample container bears a label approved under part 5 of this chapter and subpart S of this part and the sample is removed from bonded premises to the general premises of the same distilled spirits plant or to any laboratory owned and operated by the proprietor of that distilled spirits plant.
§ 19.441   Securing of conveyances.
(a) Construction for securing. When the securing of a conveyance is required by this part, the conveyance must be constructed so that all openings, including valves, may be closed and secured.
(b) Approval of securing devices. Seals, locks or other devices on conveyances used to transport taxpaid spirits, denatured spirits transferred in bond, or denatured spirits withdrawn free of tax do not require approval by TTB. On the other hand, all seals, locks, or devices used on conveyances in which spirits are transferred in bond, withdrawn free of tax, or withdrawn without payment of tax, require approval by the appropriate TTB officer before use. However, cap seals at least three-fourths of an inch in diameter, ball-strap-type (railroad) seals with a strap at least five-sixteenths of an inch wide, and locking security cable with at least a 1/16 -inch cable may be used on conveyances without approval by TTB. Such seals must:
(1) Be made of durable materials;
(2) Bear the plant registration number or the name, or readily recognizable abbreviation of the name, of the proprietor;
(3) Bear a serial number, including letter prefixes or suffixes, which will not be repeated within the following 6-month period;
(4) Be durably and legibly marked; and
(5) Be constructed to show evidence of tampering.
(c) Furnishing and affixing securing devices. The proprietor must furnish and affix any seals, locks or other devices used on conveyances. However, TTB may require any conveyance in which spirits are transferred in bond, withdrawn free of tax, or withdrawn without payment of tax, to be secured by a device furnished by TTB and affixed by a TTB officer. The securing of a conveyance will be done:
(1) As soon as the conveyance is loaded for shipment; and
(2) In such a manner that access to the contents of the conveyance cannot be gained without leaving evidence of tampering.
§ 19.451   Scope.
The IRC allows a proprietor of a distilled spirits plant to return distilled spirits, denatured spirits, and articles to the bonded premises of that plant under certain conditions. This subpart covers the types of returns allowed, sets forth the procedures that the proprietor must follow when returning these products to bonded premises, and prescribes rules for voluntary destruction on or off bonded premises.
§ 19.452   Return of taxpaid spirits to bonded premises for destruction, denaturation, redistillation, reconditioning, or rebottling.
(a) Allowable returns. A proprietor may return spirits to bonded premises if the spirits were taxpaid or tax determined by the proprietor, by another distilled spirits plant proprietor, or by an importer upon importation through U.S. Customs and Border Protection. However, consistent with section 5215(a) of the IRC the proprietor may return such spirits to bond only for one of the following reasons:
(1) Destruction, in accordance with § 19.459;
(2) Denaturation, in accordance with subpart O of this part;
(3) Redistillation, in accordance with subpart L of this part;
(4) Reconditioning; or
(5) Rebottling.
(b) Dump and gauge of returned spirits. The proprietor must immediately dump spirits returned to bonded premises under this section unless the spirits are returned in the sealed metal drums in which they were withdrawn. The proprietor must gauge spirits returned under this section upon their receipt. The proprietor may gauge spirits in bottles based upon the case markings and label information in accordance with § 19.286.
(c) Claims for credit or refund of tax. A proprietor may file a claim under § 19.264 for credit or refund of tax on spirits returned to bonded premises under this section. In addition to the information specified in § 19.264, a proprietor filing a claim for credit or refund of tax must have on file at the plant where spirits are returned to bond the following documentation for each lot of spirits returned:
(1) Documentation that establishes the amount of tax for which the claim for credit or refund is filed. If the spirits contain eligible wine or eligible flavors, the proprietor must have on file a copy of the record of tax determination as prescribed by § 19.611, or other documentation that establishes the rate of tax that was paid on the product. In lieu of establishing the actual effective tax rate of the product, the proprietor may claim a credit or refund based on the lowest effective tax rate applied to the product; and
(2) Credit memoranda or comparable financial records evidencing the return of each lot of spirits.
(d) Applicability of Chapter 51 of the IRC. All provisions of chapter 51 of the IRC and of this part that apply to spirits under TTB bond also apply to spirits when returned to bond under this section.
§ 19.453   Return of bottled spirits for relabeling or reclosing.
A proprietor may return bottled distilled spirits to their bonded premises for relabeling or reclosing. When bottled spirits are returned for relabeling or reclosing, the proprietor may not claim credit or refund of tax on the returned spirits, and no tax will be due on their subsequent removal. The proprietor must relabel or reclose the bottles immediately and must promptly remove the spirits from bonded premises. The provisions of § 19.363 apply to relabeling and reclosing performed under this section.
§ 19.454   Other authorized returns to bonded premises.
In addition to the returns to bonded premises specified in §§ 19.452 and 19.453, there are other permissible returns of distilled spirits products to a proprietor's bonded premises. These other products, the purposes for which they may be returned, and the conditions for their return are listed in the table below. All of these products must be gauged upon receipt.
§ 19.455   Return of spirits withdrawn for export with benefit of drawback.
(a) Subject to the provisions of §§ 28.197 through 28.199 of this chapter, whole or partial shipments of spirits withdrawn for export with benefit of drawback may be returned to:
(1) The bonded premises of the distilled spirits plant, pursuant to § 19.452; or
(2) To a wholesale liquor dealer or taxpaid storeroom.
(b) Claims for export drawback filed by proprietors on form TTB F 5110.30 which include the returned spirits shall be reduced by the amount of tax paid or determined on the returned spirits.
§ 19.457   Receipt of spirits abandoned to the United States.
Spirits abandoned to the United States may be sold, without payment of the tax, to a proprietor of a distilled spirits plant for denaturation or for redistillation and denaturation, provided that the plant is authorized to denature or redistill and denature spirits. The proprietor must gauge the spirits upon receipt and must keep the spirits apart from all other spirits or denatured spirits until denatured.
§ 19.459   Voluntary destruction.
(a) General. A proprietor may voluntarily destroy spirits, denatured spirits, articles, or wines on bonded premises as provided in this section. There is no tax liability on spirits, denatured spirits, articles, or wines destroyed in accordance with this section.
(b) Wine notice. A proprietor may destroy wine held on bonded premises only after the proprietor has filed a notice of intent to destroy with the appropriate TTB officer stating the kind and quantity of wine to be destroyed and the date and manner in which the wine is to be destroyed. The wine may be destroyed after the filing of the notice.
(c) Gauging. A proprietor must gauge all spirits, denatured spirits, articles, or wines to be destroyed. The proprietor may establish the gauge of spirits in bottles on the basis of legible case markings and label information in accordance with § 19.286. The proprietor must individually count bottles in partial cases.
(d) Destruction off bonded premises. If a proprietor intends to remove spirits, denatured spirits, articles, or wines from bonded premises in order to destroy them at a location off bonded premises, the proprietor must file a consent of surety to cover the removal. When the destruction takes place off plant premises, the proprietor must comply with applicable Federal, State, and local environmental laws and regulations.
(e) Record of destruction. The proprietor must record the destruction of spirits, denatured spirits, articles, or wines as provided in § 19.617.
§ 19.461   Losses and shortages in general.
(a) Allowable losses and shortages. Except as otherwise provided in paragraph (b) of this section, TTB will not collect tax on spirits, denatured spirits, or wines that are lost, destroyed, or otherwise unaccounted for while in bond, and if the tax has already been paid, TTB will refund the tax.
(b) Exceptions. TTB will collect the tax in the case of:
(1) Theft, unless the appropriate TTB officer finds that the theft occurred without connivance, collusion, fraud or negligence on the part of the proprietor, owner, consignor, consignee, bailee, or carrier, or any employee or agent of any of them;
(2) Voluntary destruction carried out other than as provided in subpart Q of this part;
(3) An unexplained shortage of bottled spirits.
(c) Burden of proof. When it appears that a theft occurred, the burden of proof will be on the proprietor or other person liable for the tax to establish to the satisfaction of the appropriate TTB officer that the theft did not result from connivance, collusion, fraud, or negligence on the part of the proprietor, owner, consignor, consignee, bailee, or carrier, or any employee or agent of any of them.
(d) Claims. Claims for losses and shortages allowable under this section must be filed in accordance with the provisions of subpart J of this part.
(e) Limitations. TTB will abate, remit, credit, or refund taxes on spirits, denatured spirits, or wines lost by theft only to the extent that the claimant is not indemnified against, or recompensed for, the taxes paid or owed.
§ 19.462   Determination of losses in bond.
(a) Times for determining losses. A proprietor must determine at any of the following times whether a loss of spirits, denatured spirits, or wines has occurred:
(1) Each time a tank or bulk conveyance is emptied;
(2) Upon discovery of an accident or an unusual variation in a gauge; and
(3) When required to take a physical inventory.
(b) Losses from theft, tampering, or unauthorized voluntary destruction. Whenever any spirits, denatured spirits, or wines are lost or destroyed in bond, whether by theft, tampering, or unauthorized voluntary destruction, the proprietor may elect voluntarily to pay the tax on the quantity lost. If the proprietor does not elect to pay the tax, the proprietor must promptly report the loss or destruction to the appropriate TTB officer. TTB may require that the proprietor file any claim for relief from the tax in accordance with § 19.263.
(c) Missing packages. When a proprietor cannot locate or otherwise account for any packages of spirits, denatured spirits, or wine recorded as deposited on bonded premises, the proprietor must promptly report that fact to the appropriate TTB officer. In such case the proprietor must either pay the tax on the lost spirits, denatured spirits, or wines or file a claim for relief from the tax in accordance with § 19.263.
(d) Excessive in-transit losses. A proprietor must promptly report excessive in-transit losses to the appropriate TTB officer. As a general rule, when spirits, denatured spirits, or wines are received in bond in bulk conveyances TTB will consider as excessive a loss that exceeds 1 percent of the quantity consigned. However, in the case of transcontinental transfers of wine in bond, TTB will consider as excessive only a loss in excess of 2 percent of the quantity of wine consigned.
(e) Excessive storage losses. A proprietor must pay the tax on excessive storage account losses of spirits unless the proprietor files a claim for remission in accordance with § 19.263 and TTB allows the claim under § 19.268. TTB will consider a storage account loss as excessive when the quantity of spirits lost during a calendar quarter from all storage tanks and stored bulk conveyances exceeds 1.5 percent of the total quantity contained in the tanks and stored bulk conveyances during the calendar quarter.
§ 19.463   Loss of spirits from packages.
(a) Tampering or theft. The appropriate TTB officer may require that a proprietor pay the tax on any loss caused by tampering or theft of spirits from packages in storage unless the proprietor establishes to the satisfaction of the appropriate TTB officer that the loss was not due to connivance, collusion, fraud or negligence on the part of the proprietor. As a general rule, the tax will be assessed on the quantity of spirits that represents the difference between the quantity originally entered in the package and the quantity remaining after discovery of the tampering or theft. However, if the proprietor can show that the package had already sustained normal storage losses before the tampering or theft occurred, the proprietor may exclude the amount of the normal storage losses from the quantity to be taxpaid.
(b) Alternative method of tax assessment. If tampering or theft has occurred at a proprietor's plant and the proprietor has failed to use effective controls to prevent it, the appropriate TTB officer may use an alternative to the general method of tax assessment specified in paragraph (a) of this section. In this case, the appropriate TTB officer may assess on each package showing evidence of tampering or theft an amount equal to the tax on 5 proof gallons of spirits.
§ 19.464   Losses after tax determination.
If a proprietor sustains a loss of spirits after tax determination but prior to completion of physical removal of the spirits from bonded premises, the proprietor may file a claim in accordance with subpart J of this part.
§ 19.465   Shortages of bottled spirits.
(a) Determination of shortage. The determination of whether an unexplained shortage of bottled distilled spirits exists must be made by comparing the spirits recorded as being on hand to either the results of the physical inventory required by § 19.372 or the results of any other complete physical inventory taken by the proprietor. When the recorded quantity is greater than the quantity determined by physical inventory, the difference is an unexplained shortage. The proprietor must adjust its records to reflect the results of the physical inventory.
(b) Payment of tax on shortage. A proprietor must pay the tax on any unexplained shortage of bottled distilled spirits:
(1) Immediately on a prepayment return on form TTB F 5000.24, Excise Tax Return; or
(2) On a deferred payment return on TTB F 5000.24 for the period during which the shortage was determined.
§ 19.471   General.
The proprietor of a distilled spirits plant must comply with the container and marking requirements that apply to both industrial and nonindustrial spirits. This subpart covers those requirements. For the requirements that apply to articles made with denatured spirits, see part 20 of this chapter. For the requirements that apply to wine, see part 24 of this chapter.
§ 19.472   Need to determine use of spirits—industrial or nonindustrial.
Many of the container and marking requirements set forth in this subpart are based on the intended use of the spirits, that is, whether they are for “industrial” or “nonindustrial” use. For purposes of this subpart, the terms “industrial” use and “nonindustrial” use refer to the uses specified in paragraphs (a) and (b) of this section.
(a) Industrial use. The word “industrial” when used with reference to the use of spirits has the same meaning as in §§ 1.60 and 1.62 of this chapter. Those uses are as follows:
(1) Free of tax by, and for the use of, the United States or any governmental agency thereof, any State, any political subdivision of a State, or the District of Columbia, for nonbeverage purposes;
(2) Free of tax for nonbeverage purposes and not for resale or use in the manufacture of any product for sale—
(i) For the use of any educational organization described in 26 U.S.C. 170(b)(1)(A)(ii) which is exempt from income tax under 26 U.S.C. 501(a), or for the use of any scientific university or college of learning;
(ii) For any laboratory for use exclusively in scientific research;
(iii) For use at any hospital, blood bank, or sanitarium (including use in making analysis or test at such hospital, blood bank, or sanitarium), or at any pathological laboratory exclusively engaged in making analyses, or tests, for hospitals or sanitariums; or
(iv) For the use of any clinic operated for charity and not for profit (including use in compounding of bona fide medicines for treatment outside of such clinics of patients thereof);
(3) Free of tax, after denaturation of such spirits in the manner prescribed by law for—
(i) Use in the manufacture of ether, chloroform, or other definite chemical substance where such distilled spirits are changed into some other chemical substance and do not appear in the finished product; or
(ii) Any other use in the arts and industries (except for uses prohibited by 26 U.S.C. 5273 (b) or (d)) and for fuel, light, and power; and
(4) The use of distilled spirits for experimental purposes and in the manufacture of—
(i) Medicinal, pharmaceutical, or antiseptic products, including prescriptions compounded by retail druggists;
(ii) Toilet preparations;
(iii) Flavoring extracts, syrups, or food products; or
(iv) Scientific, chemical, mechanical, or industrial products, provided such products are unfit for beverage use.
(b) Nonindustrial use. The word “nonindustrial” when used with reference to the use of spirits refers to any use not listed as an “industrial” use in paragraph (a) of this section. Nonindustrial uses include the following:
(1) For beverage purposes;
(2) In the manufacture, rectification, or blending of alcoholic beverages; or in the preparation of food or drink by a hotel, restaurant, tavern, or similar establishment; or as a medicine; and
(3) Distilled spirits in containers with a capacity of 1 wine gallon or less, other than anhydrous alcohol and alcohol that may be withdrawn from bond free of tax.
§ 19.473   Authorized containers.
(a) General. A proprietor may only use containers that are authorized under this part for containing, storing, transferring, conveying, removing, or withdrawing spirits or denatured spirits.
(b) Approval of other containers. The appropriate TTB officer may approve the use of another type of container for a particular purpose in place of a type of container specifically authorized in this part for that purpose if the use of that container:
(1) Will provide protection to the revenue equal to or greater than that provided by the authorized container; and
(2) Will not hinder the effective administration of this part.
(c) Approval of other container materials. The appropriate TTB officer may approve the use of a container made of a material other than one prescribed in this subpart if the prescribed material is unsuitable for the intended purpose. If the appropriate TTB officer approves another material for a container, the approval may also specify how the container must be constructed, protected, marked, and used.
§ 19.474   Spirits for nonindustrial use.
(a) Containers. A proprietor may fill spirits for nonindustrial use into packages or into other containers that are filled during processing operations, if consistent with the provisions of part 5 of this chapter.
(b) Bottles and labels. The provisions of subpart T of this part and part 5 of this chapter govern the liquor bottles and labels that a proprietor must use in bottling spirits for nonindustrial domestic use.
(c) Cases. If spirits for nonindustrial use are in containers with a capacity of one gallon or less the proprietor must place the containers in cases constructed to afford reasonable protection against breakage.
§ 19.475   Spirits for industrial use.
(a) Containers. A proprietor may fill denatured spirits or other spirits for industrial use into suitable containers. The proprietor must ensure that all containers for spirits that will be used in food products comply with applicable U.S. Food and Drug Administration health and safety laws and regulations.
(b) Encased containers. A proprietor may encase unlabeled containers of denatured spirits and other spirits for industrial use in wood, fiberboard or similar material if:
(1) The cases are constructed so that the surface, including the opening of the container, is not exposed;
(2) Required marks are applied to an exterior surface of the case;
(3) The case is constructed so that the portion containing marks will remain attached to the inner container until all the contents have been removed; and
(4) A statement reading, “Do not remove inner container until emptied” or a statement of similar meaning appears on the portion of the case bearing the marks.
(c) Cases. With the exception of encased containers covered in paragraph (b) of this section, if the containers for denatured spirits and spirits for industrial use have a capacity of not more than 1 gallon, the proprietor must place the containers in cases that provide reasonable protection against breakage.
§ 19.476   Packages.
A proprietor may use packages on bonded premises for original entry of spirits, and for packaging from tanks, storing, transferring in bond, and withdrawing spirits and denatured spirits from bonded premises. Packages must be constructed so as to be capable of secure closure.
§ 19.477   Use of bulk conveyances.
If a bulk conveyance meets the construction requirements of § 19.478 or is approved under § 19.473(b), a proprietor may use the bulk conveyance on bonded premises for the original entry of spirits, and for filling from tanks, storing, transferring in bond, and withdrawing taxpaid spirits and denatured spirits. A proprietor may use such a bulk conveyance to withdraw spirits free of tax, in accordance with the provisions of this part, for use of the United States or to a specified consignee if so authorized by the appropriate TTB officer under § 19.473(b). A proprietor may also use such a bulk conveyance to withdraw spirits without payment of tax, in accordance with the provisions in this part, for any one of the following purposes:
(a) Export, as authorized under 26 U.S.C. 5214(a)(4);
(b) Transfer to customs manufacturing bonded warehouses, as authorized under 19 U.S.C. 1311;
(c) Transfer to foreign trade zones, as authorized under 19 U.S.C. 81c;
(d) Transfer to customs bonded warehouses, as authorized under 26 U.S.C. 5066 or 5214(a)(9); or
(e) Use in wine production, as authorized under 26 U.S.C. 5373.
§ 19.478   Construction requirements for bulk conveyances.
(a) Construction. The following standards apply to bulk conveyances authorized by this part:
(1) If the conveyance consists of two or more compartments, each compartment must be constructed or arranged so that the emptying of any compartment does not provide access to the contents of any other compartment;
(2) The conveyance (or in the case of compartmented conveyances, each compartment) must be arranged so that it can be completely drained;
(3) Each tank car or tank truck must have permanently and legibly marked thereon its number, its capacity in wine gallons, and the name or symbol of its owner;
(4) If the conveyance consists of two or more compartments, each compartment must be identified by a number and the capacity in wine gallons of each shall be marked thereon;
(5) The conveyance must have a route board or other suitable device for carrying required marks or brands; and
(6) Calibrated charts, showing the capacity of each compartment in wine gallons for each inch of depth, must be available for use in measuring the contents of each tank truck, tank ship, or barge.
(b) Proprietor's responsibility. Before filling any bulk conveyance, a proprietor must examine it to verify that it meets the requirements of this section or of an approval under § 19.473(b) and that it is otherwise suitable for receiving the spirits or denatured spirits. A proprietor must refrain from using, or discontinue use of, any conveyance found by it or by the appropriate TTB officer not to meet the applicable requirements.
§ 19.479   Restrictions on dispositions of bulk spirits.
(a) Bulk spirits for nonindustrial use. A proprietor may sell or dispose of spirits for nonindustrial use in containers holding more than one wine gallon only to the persons and for the purposes specified in § 1.80 of this chapter.
(b) Bulk spirits for industrial use. If a proprietor withdraws spirits (other than alcohol or neutral spirits) from bond in containers holding more than one wine gallon for industrial use, the proprietor must ship or deliver the spirits directly to the user of the spirits as provided in § 1.95 of this chapter.
§ 19.482   General.
A proprietor must mark, identify, and label all containers of spirits or denatured spirits as provided in this part. For information regarding liquor bottle label requirements, see subpart T of this part and part 5 of this chapter.
§ 19.483   Specifications for marks.
(a) Basic requirements. A proprietor must place the marks prescribed by this subpart on cases, encased containers, and packages of spirits and denatured spirits so that they are:
(1) Of adequate size to be easily read;
(2) Of a color in distinct contrast to the color of the background;
(3) Legible; and
(4) Durably affixed.
(b) Use of labels. A proprietor may use labels as the means for applying prescribed marks if the labels meet the requirements of paragraph (a) of this section.
(c) Location. A proprietor must place the prescribed marks on one side of the case or encased container, or on the head of the package.
§ 19.484   Marks on packages filled in production or storage.
(a) Packages filled in production or storage. Except as otherwise provided in this part, a proprietor must mark packages of spirits filled in production or storage with:
(1) The name of the producer, or the producer's trade name, in accordance with paragraph (b) of this section;
(2) The distilled spirits plant number of the producer, such as “DSP-KY-708”;
(3) The kind of spirits or, in the case of distillates removed under § 19.307, the kind of distillate such as “Grape Distillate” or “Peach Distillate”;
(4) The package identification number;
(5) “BSA” or “OC” when spirits are treated with caramel (burnt sugar) or oak chips, as the case may be;
(6) The rated capacity of the package in gallons shown as “RC-G”; and
(7) The name or trade name and the plant number of the packaging proprietor in place of the name or trade name and plant number of the producer if packages of spirits of 190° or more of proof are filled by a proprietor other than the producer.
(b) Real or trade names. The producer's or other proprietor's real name, or the authorized trade name used in accordance with § 19.94 at the time of production, may be placed on any package filled at the time of the production gauge, or at the time of the original packaging of the spirits in wood when, as provided in § 19.305, the spirits were not filled into wooden packages at the time of production gauge. When spirits have been mingled in accordance with § 19.326, the proprietor may use only a producer name associated with any portion of the mingled spirits on packages filled with such mingled spirits.
§ 19.485   Package identification numbers in production and storage.
(a) General. A proprietor must mark with a lot identification number each package of spirits filled during production or storage operations. The lot identification number must show when the package was filled and must consist of, in order, the following:
(1) The last two digits of the calendar year;
(2) An alphabetical designation for the month from “A” through “L”, representing, in order, January through December;
(3) Two digits corresponding to the day of the month; and
(4) When more than one lot is filled into packages during the same day, for successive lots after the first lot, a letter suffix sequence starting with “A” representing the second lot, with “B” representing the third lot, and so forth. For example: the first three lots filled into packages on January 2, 2002, would be identified as “02A02”, “02A02A”, and “02A02B”.
(b) Packages constituting a lot. Packages of spirits, including any remnant package, received from customs custody or filled during any one day will receive the same lot identification number, subject to the following conditions:
(1) They are of the same type and either are of the same rated capacity or are uniformly filled with the same quantity by weight or other measurement method prescribed in § 19.289;
(2) They are filled with spirits of the same kind and same proof;
(3) If they are filled with mingled spirits, the mingling was conducted in accordance with § 19.326; and
(4) In the case of spirits imported or brought into the United States, they are filled with imported spirits, Puerto Rican spirits or Virgin Island spirits, as applicable.
(c) Serial numbers. At the time of filling, receipt on bonded premises, or withdrawal from bond, the appropriate TTB officer may require serial numbers on packages of spirits within the same lot in conjunction with the lot identification number. The proprietor must assign temporary serial numbers to packages for control purposes when they are transferred in bond in an unsecured conveyance or gauged after tampering within the storage account.
§ 19.486   Change of packages in storage.
When a proprietor transfers spirits from one package to another as permitted in § 19.325, the proprietor must give the new package the same package identification number and marks as the original package. The proprietor must also prepare and sign a label to be affixed to the head of each new package. The label must be in the following form:
The spirits in this ____________ [kind of cooperage: barrel or drum], package identification No. ________, were transferred from a ____________ [kind of cooperage: barrel or drum], on ______________ [Date], ______________ [Proprietor]
§ 19.487   Kind of spirits.
(a) Designation. The designations of kind of spirits required for packages filled on bonded premises must be consistent with the classes and types of spirits set forth in part 5 of this chapter subject to the following exceptions or conditions:
(1) A proprietor may designate as “Alcohol” spirits distilled at more than 160 proof, which lack the taste, aroma, and other characteristics generally attributed to whisky, brandy, rum, or gin, and which are substantially neutral in character. When alcohol so designated is withdrawn on determination of tax, the designation must consist of the word “Alcohol” preceded or followed by a word or phrase that describes the material from which the alcohol was produced;
(2) The designation for vodka, neutral spirits, or gin must include a word or phrase that describes the material from which the spirits were produced;
(3) A proprietor may designate as “Spirits”, preceded or followed by a word or phrase that describes the material from which the spirits were produced, those distilled spirits that are distilled at less than 190 proof which lack the taste, aroma, and other characteristics generally attributed to whisky, brandy, rum, or gin. However, the proprietor may not designate such spirits as “Spirits grain” or “Grain spirits”;
(4) A proprietor must designate spirits distilled from fruit at or above 190 proof, if intended for use in wine production, as “Neutral Spirits—Fruit”, preceded or followed by the name of the fruit from which the spirits were produced;
(5) A proprietor may designate as “Whisky” spirits distilled at not more than 160 proof from a fermented mash of not less than 51 percent rye, corn, wheat, malted barley, or malted rye grain, packaged in reused cooperage, provided that the designation is further qualified with the words “Distilled from rye mash” (or bourbon, wheat, malt, or rye malt mash, as the case may be). However, spirits designated as “Whisky” must, if distilled from a fermented mash of not less than 80 percent corn, carry the designation “Corn Whisky.”
(b) Change of designation. After written application to, and approval of, the appropriate TTB officer, a proprietor may at any time before their withdrawal from bonded premises, change the original designation for spirits to a new designation properly describing the spirits in accordance with the provisions of this section.
(c) Other designations. If a proprietor proposes to produce spirits for which a designation has not been prescribed in this section or in part 5 of this chapter, the proprietor must first make written application to the appropriate TTB officer for a designation for such spirits, and the proprietor must then designate the spirits accordingly.
(d) Spirits for nonindustrial use. A proprietor may not treat the provisions of this section as constituting authorization to apply designations to spirits withdrawn for nonindustrial use if those designations do not conform to the requirements of part 5 of this chapter.
§ 19.488   Marks on packages filled in processing.
(a) Packages filled in processing. Except as otherwise provided in this part, a proprietor must mark packages of spirits filled in processing with:
(1) The name of the processor, or the processor's trade name;
(2) The distilled spirits plant number of the processor, such as “DSP-KY-708”;
(3) The kind of spirits in accordance with § 19.487 or, in the case of an intermediate product, the product name shown on form TTB F 5110.38, Formula for Distilled Spirits Under the Federal Alcohol Administration Act;
(4) The serial number or lot identification number, in accordance with § 19.490, and the date of filling;
(5) The proof of the spirits; and
(6) The serial number of the formula if it was manufactured under an approved formula.
(b) Real or trade names. The proprietor's real name or any trade name used in accordance with § 19.94 may be placed on any package filled with spirits during processing operations.
§ 19.489   Marks on cases filled in processing.
(a) Mandatory marks. Except for cases marked in accordance with § 19.496, a proprietor must mark in accordance with § 19.483 the following information on each case of spirits filled in processing:
(1) Serial number in accordance with § 19.490;
(2) Kind of spirits in accordance with the classes and types of spirits set forth in part 5 of this chapter;
(3) The distilled spirits plant number where bottled;
(4) Date filled;
(5) Proof; and
(6) Liters or proof gallons.
(b) Export marks. In addition to the marks referred to in paragraph (a) of this section, the proprietor must include the marks required by part 28 of this chapter on cases removed for export, for transfer to any customs bonded warehouses, for transfer to foreign trade zones, or for use as supplies on certain vessels and aircraft.
(c) Other marks. A proprietor may include other marks on cases filled in processing in addition to the marks prescribed under this section. Any additional marks must not interfere with, or detract from, the marks prescribed in this section. The proprietor may include other marks such as:
(1) The name or trade name, and the location if desired, of the bottler, displayed with the word “Bottler”;
(2) For products distilled or processed by the proprietor, the proprietor's name or trade name, and the location of the distilled spirits plant, if desired, displayed with the words “Distiller” or “Processor”, as applicable;
(3) For products imported and bottled by the proprietor, the words “Imported and Bottled By”, followed by the proprietor's name or trade name and location of the distilled spirits plant if desired;
(4) For products bottled for a dealer, the words “Bottled For”, followed by the name of that dealer;
(5) Any material required by Federal or State law and regulations; and
(6) Labels or data describing the contents for commercial identification or accounting purposes or indicating payment of State or local taxes.
§ 19.490   Numbering of packages and cases filled in processing.
(a) Packages of spirits and denatured spirits filled during processing operations. When a proprietor fills packages of spirits and denatured spirits during processing, the proprietor must identify the packages consecutively beginning with “1” and continuing the series until the number “1,000,000” is reached, except that any series of such numbers already in use may be continued to that limit. When the identification in any series reaches “1,000,000”, the proprietor may begin a new series with “1” but must add an alphabetical prefix or suffix to the new series number. For example, the first identifier in the second series of 1,000,000 packages filled might be “1A” or “A1”.
(b) Cases containing bottles or other containers of spirits and denatured spirits. When a proprietor fills cases containing bottles or other containers of spirits and denatured spirits during processing, the proprietor must identify the cases consecutively beginning with “1” and continuing the series until the number “1,000,000” is reached, except that any series of such numbers already in use may be continued to that limit. When the identification in any series reaches “1,000,000”, the proprietor may begin a new series with “1”. This series of identifiers for cases containing bottles or other containers must be distinct from the series of serial numbers required for packages under paragraph (a) of this section.
(c) Additional identification. A proprietor may establish separate series of identifiers, distinguished from each other by the use of alphabetical prefixes or suffixes, to identify the size of bottles, the brand names, or other information, on written notice to the appropriate TTB officer. The proprietor must identify remnant cases by placing the identifier of the last full case followed by the letter “R” on the remnant case. When there is a change in the name, or trade name of the proprietor, all series in use may be continued. However, if there is a change in proprietorship, a new series must be commenced.
(d) Alternative marking for spirits for industrial use. A proprietor may mark packages and cases of spirits for industrial use, including denatured spirits, filled in processing with the lot identification numbers specified in § 19.485 instead of using the identifiers specified in paragraphs (a), (b) and (c) of this section.
§ 19.491   Marks on containers of specially denatured spirits.
(a) General. A proprietor must mark or label each package, case, or encased container of specially denatured spirits filled on bonded premises to show:
(1) The quantity in gallons;
(2) The serial number or lot identification number;
(3) The plant number of the proprietor;
(4) The designation or abbreviation of the specially denatured spirits by kind (alcohol or rum);
(5) The applicable formula number; and
(6) The proof of the spirits, if they were denatured at other than 190 proof.
(b) Bottles. A proprietor must mark or label each bottle to show the information prescribed in paragraphs (a)(1), (3), (4), (5), and (6) of this section.
(c) Alternate formulations. When spirits are denatured under a formula authorizing a choice of types and quantities of denaturants, the proprietor must mark the container or case to show the actual types and quantities of denaturants used.
§ 19.492   Marks on containers of completely denatured alcohol.
Except in the case of completely denatured alcohol transported by pipelines and bulk conveyances, a proprietor must mark each container of completely denatured alcohol on the head of the package or on the side of the can or carton with:
(a) The name of the proprietor who filled the containers;
(b) The plant number where the container was filled;
(c) The container's contents in wine gallons;
(d) The apparent proof;
(e) The words “Completely Denatured Alcohol”; and
(f) The applicable formula number.
§ 19.493   Caution label for completely denatured alcohol.
A proprietor must place a label containing the words “Completely Denatured Alcohol” and the statement “Caution—contains poisonous ingredients” on each container of completely denatured alcohol containing five gallons or less that is sold or offered for sale. The label must be written in plain, legible letters. The proprietor may print the name and address of the denaturer on such label, but may not include any other nonessential matter on the label without approval from the appropriate TTB officer. The word “pure” may not appear on the label or the container.
§ 19.494   Additional marks on portable containers.
(a) In addition to the other marks prescribed in this part, a proprietor must mark portable containers of spirits or denatured spirits (other than bottles enclosed in cases) that will be withdrawn from the bonded premises as follows:
(1) Without payment of tax, for export, for transfer to customs manufacturing bonded warehouses, for transfer to foreign trade zones, or as supplies for certain vessels and aircraft, in accordance with the provisions in part 28 of this chapter; or
(2) If tax-free, with the word “Tax-Free.”
(b) A proprietor may show other optional information such as brand or trade name; a caution notice, or other information required by Federal, State, or local law or regulations; wine or proof gallons; and plant control data. However, any such mark must not conceal, obscure, interfere with, or conflict with the markings required by this subpart.
§ 19.495   Marks on bulk conveyances.
(a) A proprietor must securely attach a label identifying each conveyance or compartment to the route board, or to another equivalent device, for each bulk conveyance used to transport spirits or denatured spirits setting forth the following information:
(1) The name, plant number, and location of the consignor;
(2) The name, distilled spirits plant number, permit number, or registry number (as applicable), and the location of the consignee;
(3) The date of shipment;
(4) The quantity (proof gallons for spirits, wine gallons for denatured spirits); and
(5) The formula number for denatured spirits.
(b) If the conveyance is accompanied by documentation containing the information specified in paragraph (a) of this section, the proprietor is not required to label each conveyance or compartment.
(c) Export shipments must conform to the requirements of part 28 of this chapter.
§ 19.496   Cases of industrial alcohol.
(a) Mandatory marks. A proprietor must mark each case and each encased container of alcohol bottled for industrial use under the provisions of subpart N of this part to show the following information:
(1) The designation “Alcohol”;
(2) The serial number or lot identification number;
(3) The distilled spirits plant number of the proprietor;
(4) The proof;
(5) The proof gallons;
(6) The designation “Tax-Free”; and
(7) Any information required by part 28 of this chapter, for cases that are withdrawn for export, transferred to customs bonded warehouses, transferred to foreign trade zones, or are for use on vessels and aircraft.
(b) Other marks. A proprietor may mark cases of industrial alcohol with other marks, provided that they do not interfere with, or detract from, mandatory case marks in the manner permitted under § 19.489.
§ 19.497   Obliteration of marks.
Except as otherwise provided in § 19.487(b), the marks required to be placed on any container or case under this part must not be destroyed or altered before the container or case is emptied.
§ 19.498   Relabeling and reclosing off bonded premises.
The proprietor of a distilled spirits plant may relabel, affix brand labels, or reclose bottled taxpaid spirits on wholesale liquor dealer premises or at a taxpaid storeroom on, contiguous to, adjacent to, or in the immediate vicinity of the proprietor's distilled spirits plant, provided that the wholesale liquor dealer premises or taxpaid storeroom is operated in connection with the distilled spirits plant. If products relabeled under this section were originally bottled by another proprietor, the relabeling proprietor must have on file a statement from the original bottler consenting to the relabeling.
§ 19.499   Authorized abbreviations to identify marks.
In addition to the other abbreviations and symbols authorized under this part for use in marking containers, a proprietor may use the following abbreviations to identify the following marks:
§ 19.511   Bottles authorized.
Each liquor bottle for nonindustrial distilled spirits for domestic use must conform to a bottle size specified in the standards of fill set forth in subpart K of part 5 of this chapter. This rule applies to liquor bottles intended for distribution in both interstate and intrastate commerce.
§ 19.512   Bottles not constituting approved containers.
A proprietor may not use any liquor bottle that the appropriate TTB officer finds is misleading within the meaning of § 5.202 of this chapter. Misleading liquor bottles do not constitute approved containers for the purposes of this part, and a proprietor may not use them for packaging distilled spirits for domestic purposes.
§ 19.513   Distinctive liquor bottles.
(a) Application. A proprietor must submit form TTB F 5100.31, Application for and Certification/Exemption of Label/Bottle Approval, to the appropriate TTB officer in order to obtain approval to use domestic liquor bottles of distinctive shapes or designs. The proprietor must certify as to the total capacity of a representative sample bottle before closure (expressed in milliliters) on each copy of the form. In addition, the proprietor must affix a readily legible photograph (showing both front and back of the bottle) to the front of each copy of TTB F 5100.31 along with the label(s) to be used on the bottle. The proprietor must submit to TTB an actual bottle or accurate model only when specifically requested to do so.
(b) Approval. The appropriate TTB officer will approve a distinctive liquor bottle on a properly completed TTB F 5100.31 if the bottle is found to:
(1) Meet the requirements of part 5 of this chapter;
(2) Be distinctive;
(3) Be suitable for its intended purpose;
(4) Not jeopardize the revenue; and
(5) Be not misleading to the consumer.
(c) Retention. A proprietor must keep on file at their premises a copy of the complete approved TTB F 5100.31 for the distinctive liquor bottle.
(d) Cross reference. For procedures regarding issuance, denial and revocation of distinctive liquor bottle approvals, as well as appeal procedures, see part 13 of this chapter.
§ 19.516   Certificate of label approval or exemption.
A proprietor must obtain a certificate of label approval or an exemption from label approval under part 5 of this chapter on form TTB F 5100.31 for any label that the proprietor will use on bottles of spirits for domestic use. Upon request by the appropriate TTB officer, the proprietor must provide evidence of label approval, or of exemption from label approval, for a label used on a bottle of spirits for domestic use. For procedures regarding the issuance, denial and revocation of certificates of label approval and certificates of exemption from label approval, as well as appeal procedures, see part 13 of this chapter.
§ 19.517   Statements required on labels under an exemption from label approval.
If a proprietor bottles spirits for domestic use under a certificate of exemption from label approval on form TTB F 5100.31, the following information must appear on the label used on the bottle, in the manner indicated:
(a) Brand name. The brand name on the label must conform to the requirements of § 5.64 of this chapter;
(b) Kind. The class and type of the spirits identified on the label must conform to the requirements of subpart I of part 5 of this chapter;
(c) Alcohol content. The alcohol content on the label must conform to the requirements of § 5.65 of this chapter;
(d) State of distillation. In the case of whisky, the state of distillation statement on the label must conform to the requirements of § 5.66(f) of this chapter;
(e) Net contents. The label must show the net contents, unless the statement of net contents is permanently marked on the side, front, or back of the bottle;
(f) Name and address of bottler. The name and address of the bottler must conform to the requirements of § 19.518;
(g) Age of whisky containing no neutral spirits. In the case of whisky containing no neutral spirits, statements of age and percentage by volume on the label must conform to the requirements of § 5.74 of this chapter;
(h) Age of whisky containing neutral spirits. In the case of whisky containing neutral spirits, the label must state the age of the whisky or whiskies and the respective percentage by volume of whisky or whiskies and neutral spirits in accordance with § 5.74 of this chapter;
(i) Age of brandy. In the case of brandy aged for a period of less than two years, the label must state the age.
(j) Presence of neutral spirits or coloring, flavoring, or blending material. The label must indicate the presence of neutral spirits or coloring, flavoring, or blending material in accordance with §§ 5.71-5.73 of this chapter; and
(k) Country of origin. Labels of imported spirits must state the country of origin in substantially the following form: “Product of ____________,” with the blank filled in with the name of the country of origin.
§ 19.518   Name and address of bottler.
In setting forth the name and address of the bottler required by § 19.517(f), the label must contain the words “Bottled by”, “Packed by”, or “Filled by” followed immediately by the name (or trade name) of the bottler and the place where the bottling takes place. If the bottler is the proprietor of more than one distilled spirits plant engaged in bottling operations, the label may include the addresses of all such plants immediately following the name (or trade name) of the bottler. The following additional rules apply to name and address labeling under this section:
(a) Where distilled spirits are bottled by or for the distiller of the spirits, the label may state, in lieu of the words “Bottled by”, “Packed by”, or “Filled by”, followed by the bottler's name (or trade name) and address or addresses, the words “Distilled by”, followed immediately by the name (or trade name) under which the particular spirits were distilled, or by any trade name shown on the distiller's permit covering the premises where the particular spirits were distilled, and the address (or addresses) of the distiller;
(b) Where “straight whiskies” of the same type produced in the same State by two or more different distillers are combined (either at time of bottling or at a warehouseman's bonded premises for further storage) and are subsequently bottled and labeled as “straight whisky”, that “straight whisky” must be labeled as provided in the introductory paragraph of this section. However, where that combined “straight whisky” is bottled by or for the distillers of the whiskies, the label may contain, in lieu of the wording specified in that introductory paragraph, the words “Distilled by”, followed immediately by the name (or trade name) of each distiller that distilled a portion of the “straight whisky”, the address of each of the distilled spirits plants where a portion of the “straight whisky” was distilled, and the percentage of “straight whisky” distilled by each distiller (with a tolerance of plus or minus 2 percent). In addition, where “straight whisky” is made up of a mixture of “straight whiskies” of the same type distilled at two or more distilled spirits plants of the same proprietor located within the same State, and where that “straight whisky” is bottled by or for that proprietor, the label for the “straight whisky” may contain, in lieu of the wording specified in the introductory paragraph of this section, the words “Distilled by” followed by the name (or trade name) of the proprietor and the address of each of the distilled spirits plants that distilled a portion of the “straight whisky”;
(c) Where distilled spirits are bottled by or for the proprietor of a distilled spirits plant, the label may state, in lieu of the words “Bottled by”, “Packed by”, or “Filled by” followed by the bottler's name (or trade name) and address, the words “Blended by”, “Made by”, “Prepared by”, “Manufactured by”, or “Produced by” (whichever is appropriate to the process involved), followed by the name (or trade name) and the address (or addresses) of the distilled spirits plant proprietor;
(d) In the case of labels of distilled spirits bottled for a retailer or other person who is not the proprietor of the distilled spirits plant where the distilled spirits were distilled, the label may also state the name and address of that retailer or other person, preceded immediately by the words “Bottled for”, “Distributed by”, or other similar statement; and
(e) The label may state the address of the proprietor's principal place of business in lieu of the place where the bottling, distilling or processing operation occurred, provided that the address where the bottling, distilling, or other operation occurred is indicated by printing, coding, or other markings, on the label or on the bottle. The coding system employed must permit TTB to determine where the operation stated on the label occurred. Prior to using such a label or bottle coding system, the proprietor must send a notice to the appropriate TTB officer explaining the coding system.
§ 19.519   Labels for export spirits.
(a) Required information. If a proprietor bottles spirits for export, the bottles must have a securely affixed label showing:
(1) The kind (class and type) of spirits;
(2) The percentage of alcohol by volume (ABV) of the spirits;
(3) The net contents, unless the markings on the bottle indicate such contents; and
(4) The name (or trade name) of the bottler.
(b) Additional information. The bottler may place additional information on the export label if it is not inconsistent with the information required under paragraph (a) of this section.
(c) Language. The export label information may appear in the language of the country to which the spirits are to be exported provided that the proprietor maintains on file an English translation of that information. The export label may state the net contents and percentage of alcohol by volume in the units of measurement of the foreign country, provided that the proprietor maintains a record of the equivalent units as required for labels of spirits bottled for domestic consumption.
(d) Waiver. The appropriate TTB officer may waive the requirement to show any information required by this section, other than the kind of spirits, upon a showing that the country to which the spirits are to be exported prohibits the showing of such information. In regard to kind (class and type) of spirits, the appropriate TTB officer may waive the designation required by § 5.63(a)(2) of this chapter, only to the extent that the label need not bear the word “diluted” for distilled spirits bottled below the minimum bottling proof, and provided that this is in accordance with the rules of the country to which the product is to be exported.
§ 19.520   Spirits for shipment to Puerto Rico.
Spirits removed for shipment to Puerto Rico with benefit of drawback or without payment of tax in accordance with part 28 of this chapter are subject to the provisions of part 5 of this chapter in regard to labeling and standards of fill for bottles.
§ 19.523   Affixing closures.
Each bottle or other container of spirits having a capacity of one gallon (3.785 liters) or less must have a closure or other device securely affixed to the container prior to withdrawal from bond or customs custody. The closure or other device must be constructed in such a manner as to require breaking in order to gain access to the contents of the container.
§ 19.525   Reclosing.
A proprietor may reclose bottles of distilled spirits filled on bonded premises as provided in subpart N of this part. A proprietor may also reclose bottles of distilled spirits to which closures or other devices have been affixed as provided in § 19.498.
§ 19.571   Records in general.
Each proprietor of a distilled spirits plant must maintain records that accurately reflect the operations and transactions occurring at the plant. This subpart specifies the types of records that a proprietor must maintain. In general, a proprietor is responsible for recording activities and transactions related to the three primary operational accounts at a plant: production, storage, and processing. A proprietor's records must show receipts in each account, movement from one account to another, transfers in bond, and withdrawals of spirits, denatured spirits, articles, or wines. The types of records that a proprietor must keep include:
(a) All individual transaction forms, records, and summaries that are specifically required by this part;
(b) All supplemental, auxiliary, and source data that a proprietor uses to compile required forms, records, and summaries, and to prepare reports, returns and claims; and
(c) Copies of notices, reports, returns, and approved applications and other documents relating to operations and transactions.
§ 19.572   Format of records.
As a general rule, the provisions of this subpart do not require proprietors to keep their records in any particular format or medium. For example, a proprietor may keep required records on paper, on microfilm or microfiche, or on a computer or other electronic medium, so long as the records are readily retrievable in hardcopy format for review by TTB officers as necessary. The required records may consist of documents created in the ordinary course of business, rather than documents created expressly to meet the requirements of this part, provided that those documents:
(a) Contain all of the relevant information required under this part;
(b) Are consistent with the general standards of clarity and accuracy; and
(c) Can be readily understood by TTB personnel.
§ 19.573   Location of required records.
A proprietor may keep the records required by this part at the distilled spirits plant where operations or transactions occur or at a central recordkeeping location maintained by the proprietor. If a proprietor keeps the required records at any location other than the distilled spirits plant where operations or transactions occur, the proprietor must provide a letterhead notice to the Director, National Revenue Center, of the location where the records are kept.
§ 19.574   Availability of records.
The records required by this part must be available for inspection by the appropriate TTB officer during normal business hours. If a proprietor keeps the records at a location other than the distilled spirits plant where operations or transactions occur, the proprietor upon request must make them available at the distilled spirits plant premises undergoing a TTB audit or inspection. The records must be produced within two days of the request except that data accumulated on cards, tapes, discs, or other accepted record media must be retrievable within five business days. Applicable data processing programs must be made available for examination if requested by any authorized TTB officer.
§ 19.575   Retention of records.
A proprietor must retain any records required by this part for a period of not less than three years from the date of the record or the date of the last entry required to be made, whichever is later. However, the appropriate TTB officer may require a proprietor to keep records for an additional period not exceeding three years in any case where such retention is deemed appropriate for the protection of the revenue.
§ 19.576   Preservation of records.
A proprietor must maintain required records in a manner that will ensure their readability and availability for inspection. Whenever the condition of any record will render it unsuitable for its intended or continued use, the proprietor must create an accurate and legible reproduction of the original record. TTB will treat the reproduced record as an original record, and all of the provisions of law that would apply to the original record also will apply to the reproduced record.
§ 19.577   Documents that are not records.
The term “records” as used in this subpart does not include qualifying documents required under subpart D of this part, or bonds required under subpart F of this part. Approved active formulas, plant registrations and similar records are permanent in nature and must be maintained in a permanent file.
§ 19.578   Financial records and books of account.
See § 70.22 of this chapter for information regarding TTB examination of financial records and books of account.
§ 19.580   Time for making entries in records.
(a) Daily record entries. A proprietor must make entries required by this part in records on a daily basis for each transaction or operation and not later than the close of the next business day after the transaction or operation occurred. However, if a proprietor prepares supplemental or auxiliary records when an operation or transaction occurs and those records contain all of the required information, the proprietor may make entries into the daily records not later than the close of business on the third business day following the day on which the transaction or operation occurred.
(b) Tax records. A proprietor must enter the tax determination and the taxable removal of distilled spirits in the proprietor's records on the day on which tax determination and taxable removal occurs.
§ 19.581   Details of daily records.
The daily records required by this part must include the following information:
(a) The date of each operation or transaction;
(b) For spirits, the kind and the quantity in proof gallons;
(c) For denatured spirits, the formula number and the quantity in wine gallons;
(d) For distilling materials produced on the premises, the kind and the quantity in wine gallons. For chemical byproducts containing spirits, articles, spirits residues, and distilling material received on the premises, the kind, the percent of alcohol by volume, and the quantity in wine gallons;
(e) For wines, the kind, the quantity in wine gallons and the percent of alcohol by volume;
(f) For alcoholic flavoring materials, the kind, formula number (if any), and the quantity in proof gallons;
(g) For containers (other than those bearing lot identification numbers) or cases, the type, serial number, and the number of containers (including identifying marks on bulk conveyances), or cases. However, a proprietor may withdraw spirits in cases without recording the serial numbers of the cases, unless the appropriate TTB officer requires such recording. A proprietor must record package identification numbers, number of packages, and proof gallons per package on deposit records in the storage account reflecting production gauges or filling of packages from tanks; however, the proprietor need show only the lot identification, number of packages, and proof gallons per package for transactions in packages of spirits unless package identification numbers are specifically required by this part;
(h) For materials intended for use in the production of spirits, the kind and the quantity, with liquids recorded in gallons and other nonliquid materials recorded by weight;
(i) For each receipt or removal of material, spirits, denatured spirits, articles, spirits residues, and wine, the name and address of the consignee or consignor, and, if any, the plant number or industrial use permit number of such person;
(j) The serial number of any tank used;
(k) On the transaction record, the rate of duty paid on imported spirits;
(l) Identification of imported spirits, spirits from Puerto Rico, and spirits from the Virgin Islands, or a showing that a distilled spirits product contains such spirits; and
(m) Identification of spirits that are to be used exclusively for fuel use.
§ 19.582   Conversion from metric to U.S. units.
When liters are converted to wine gallons, the proprietor must multiply the quantity in liters by 0.264172 to determine the equivalent quantity in wine gallons. If cases contain the same quantity of spirits of the same proof in metric bottles, the proprietor must convert the cases to U.S. units by multiplying the liters in one case by the number of cases to be converted, as follows:
(a) If the conversion from liters to U.S. units is made before multiplying by the number of cases, the quantity in U.S. units must be rounded to the sixth decimal; or
(b) If the conversion is made after multiplying by the number of cases, the quantity in U.S. units must be rounded to the nearest hundredth. Once converted to wine gallons, the proprietor must determine the proof gallons of spirits in cases as provided in § 30.52 of this chapter.
§ 19.584   Materials for the production of distilled spirits.
A proprietor must maintain daily records of materials produced or received for, or used in, the production of distilled spirits. This includes records covering:
(a) Receipt and use of fermenting material or other nonalcoholic materials for the production of distilled spirits;
(b) Receipt and use of spirits, denatured spirits, articles, and spirits residues for redistillation;
(c) Distilling materials produced, received for production, and used in the production of distilled spirits;
(d) Receipt of beer from brewery premises without payment of tax, and receipt of beer removed from brewery premises upon determination of tax as authorized by 26 U.S.C. 5222(b);
(e) Distilling material destroyed in, or removed from the premises before distillation, including residue of beer returned to the producing brewery;
(f) The quantity of fusel oils or other chemicals removed from the production system, including the disposition thereof, with the name of the consignee, if any, together with the results of alcohol content tests performed on those fusel oils or chemicals; and
(g) The kind and quantity of distillates removed from the production system pursuant to § 19.307.
§ 19.585   Production and withdrawal records.
(a) Production of spirits. The following rules apply to the maintenance of production records:
(1) A proprietor must maintain daily production account records of the kind and quantity of distilled spirits produced. The records must show the gauge of spirits in each receiving tank and the production gauge (in proof gallons) of spirits removed from each tank. If packages are filled according to the production gauge for immediate withdrawal from bond, the proprietor must record the details of the individual packages filled;
(2) A proprietor must maintain daily records of spirits lost or destroyed prior to the production gauge; and
(3) A proprietor must maintain production account records in a manner that will ensure the tracing of spirits through the distilling system to the mash or other material from which the spirits were produced and that will clearly establish the identity of the spirits.
(b) Withdrawals from production. A proprietor must maintain daily records of the distilled spirits withdrawn from the production account. This includes withdrawals for:
(1) Taxpayment;
(2) Use of the United States;
(3) Hospital, scientific or educational use;
(4) Export;
(5) Transfer to a foreign trade zone;
(6) Transfer to customs bonded manufacturing warehouse;
(7) Use as supplies on vessels and aircraft;
(8) Use in wine production;
(9) Transfer in bond to other bonded premises;
(10) Transfer to storage operations;
(11) Transfer to processing operations; and
(12) Research, development, or testing.
§ 19.586   Byproduct spirits production records.
Each proprietor who manufactures substances other than spirits in a process that produces spirits as a byproduct must maintain daily production records of:
(a) The kind and quantity of materials received and used in production;
(b) The kind and quantity of spirits produced and disposed of; and
(c) The kind and quantity of other substances produced.
§ 19.590   Storage operations.
(a) Receipts. A proprietor must maintain daily records of the kind and quantity of distilled spirits or wines received in the storage account. The proprietor must use copies of gauge records, transfer records, and tank records of wines or spirits to record spirits or wines received into storage. Receipts into storage include:
(1) Receipts of spirits or wines for deposit into storage;
(2) Receipts by transfer in bond;
(3) Receipts of spirits from customs custody; and
(4) Receipts of spirits returned to bond.
(b) Storage activities. A proprietor must maintain daily records of the activities and operations within the storage account at the plant, including records regarding:
(1) The mingling of spirits;
(2) Spirits in tanks;
(3) Spirits or wines filled into packages from tanks and retained for storage;
(4) Spirits of less than 190° of proof or wines transferred from one tank to another;
(5) The transfer of spirits or wine from one package to another; and
(6) The addition of oak chips to spirits and the addition of caramel to brandy or rum.
(c) Withdrawals from storage. A proprietor must maintain daily records of the kind and quantity of distilled spirits or wines withdrawn from the storage account, including records regarding:
(1) Taxpayment;
(2) Use by the United States;
(3) Hospital, scientific or educational use;
(4) Export;
(5) Transfer to a foreign trade zone;
(6) Transfer to a customs bonded manufacturing warehouse;
(7) Use as supplies on vessels and aircraft;
(8) Transfer to a bonded winery;
(9) Transfer to a customs bonded warehouse;
(10) Use for research, development, or testing;
(11) Transfer to processing operations;
(12) Transfer to production operations;
(13) Transfer in bond to other bonded premises;
(14) Destruction; and
(15) Loss.
§ 19.591   Package summary records.
(a) General. A proprietor must keep current summary records for each kind of spirits or wine in packages that show the spirits or wine deposited in, withdrawn from, and remaining in, the storage account. A proprietor must keep separate records for domestic spirits, imported spirits, Virgin Islands spirits, Puerto Rican spirits, and wine. A proprietor may keep package records for spirits according to the season or the year in which the packages were filled with spirits.
(b) Arrangement of records. The proprietor must prepare and arrange separately package summary records:
(1) For domestic spirits, alphabetically by State and by the plant number and name of the producer or warehouseman;
(2) For imported spirits, alphabetically by the country of origin and by the name of the producer;
(3) For Puerto Rican or Virgin Islands spirits, by the name of the producer in Puerto Rico or the Virgin Islands; and
(4) For wine, by the kind and the tax rate imposed by 26 U.S.C. 5041.
(c) Details of records. Package summary records must show the following details:
(1) The date on which each of the summarized transactions occurred;
(2) For spirits, the number of packages and the proof gallons covered by the summary record;
(3) For wine, the number of packages and the wine gallons covered by the summary record;
(4) Any gains or shortages disclosed by inventory or when an account is closed; and
(5) The gallon balances on summary records for spirits and wines remaining in the account at the end of each month.
(d) Consolidation. A proprietor must consolidate package summary records at the end of each month, or for lesser periods when required by the appropriate TTB officer, to show, for all types of containers and kinds of spirits, the total proof gallons received in, withdrawn from, and remaining in the storage account.
§ 19.592   Tank record of wine and spirits of less than 190° of proof.
A proprietor must keep a record for each tank (including each bulk conveyance) containing wine or spirits of less than 190° of proof. The record must show deposits into, withdrawals from, and the balance remaining in, each tank in the storage account. A proprietor must prepare a new record each time wine or spirits are deposited into an empty tank and must make entries each day that transactions occur. Tank records must show the following details:
(a) The identification of the tank;
(b) The tank record serial number, beginning with “1” for each record initiated on or after January 1 of each calendar year;
(c) The date of each transaction;
(d) For spirits, the kind of spirits and, as applicable,—
(1) For domestic spirits, the plant number and name of the producer, or, for blended rums or brandies, the plant number and name of the warehouseman;
(2) For imported spirits, the country of origin and the name and plant number of the warehouseman;
(3) For Puerto Rican or Virgin Island spirits, the name of the producer;
(4) The number and average proof gallon content of packages of spirits dumped in the tank, or a notation indicating the deposit of spirits in the tank by pipeline; and
(5) If subject to age labeling requirements under part 5 of this chapter, the age of the youngest spirits in years, months and days, each time that spirits are deposited;
(e) For wine, the kind and the tax rate imposed by 26 U.S.C. 5041;
(f) The wine gallons of wine, or proof gallons of spirits, deposited into the tank;
(g) The wine gallons of wine, or proof gallons of spirits, withdrawn from the tank;
(h) Any related transaction form or record and its serial number for deposits and withdrawals;
(i) The wine gallons of wine, or proof gallons of spirits, remaining in the tank, recorded at the end of each month; and
(j) Any gain or loss disclosed by inventory or on emptying of the tank.
§ 19.593   Tank summary record for spirits of 190° or more of proof.
(a) General. A proprietor must keep a tank summary record for spirits of 190° or more of proof held in storage tanks. The record must show the proof gallons deposited into, withdrawn from, and remaining in the tanks in the storage account. The proprietor must prepare a separate tank summary record for each kind of spirits of 190° or more of proof. The proprietor must make an entry for each day on which a transaction occurs, and the entry must summarize the individual transactions shown on the deposit records.
(b) Arrangement of records. The proprietor must prepare and arrange the tank summary records as follows:
(1) For domestic spirits, by the name of the producer or warehouseman;
(2) For imported spirits, by the name of the warehouseman who received the spirits from customs custody; and
(3) For spirits from Puerto Rico or the Virgin Islands, by the name of the producer in Puerto Rico or the Virgin Islands.
(c) Details of records. Tank summary records must show the following details:
(1) The kind of spirits;
(2) The date of the transactions summarized;
(3) The proof gallons deposited;
(4) The proof gallons withdrawn;
(5) The proof gallons remaining in tanks; and
(6) Any gain or loss disclosed by inventory or on emptying of the tanks covered by the tank summary record.
§ 19.596   Processing records in general.
A proprietor who processes spirits must maintain daily records of transactions and operations in the processing account relating to:
(a) The manufacture of distilled spirits products;
(b) Finished products;
(c) The denaturation of spirits; and
(d) The manufacture of articles.
§ 19.597   Manufacturing records.
(a) Receipts. A proprietor must maintain daily records of the spirits, wines, and alcoholic flavoring materials received into the processing account for the manufacture of distilled spirits products. Total receipts must be summarized showing the amount of:
(1) Spirits received from storage or production at the same plant;
(2) Spirits received from other plants by transfer in bond;
(3) Spirits received from customs custody;
(4) Spirits received by return to bond;
(5) Wines received from the storage at the same plant;
(6) Wines received by transfer in bond; and
(7) Alcoholic flavoring materials received.
(b) Additional receipt information. The records described in paragraph (a) of this section must also show the name and plant number of the producer or processor (or the warehouseman in the case of blended beverage rums or brandies or spirits of 190° of more of proof received from storage) for domestic spirits, the name of the importer and the country of origin for imported spirits, and the name and address of the producer for wines and alcoholic flavoring materials.
(c) Usage. A proprietor must maintain daily records of the spirits, wines, and alcoholic flavoring materials and other ingredients used in the manufacture of distilled spirits products as provided in § 19.598.
(d) Bottling or packaging. A proprietor must maintain daily records of the bottling or packaging of each batch of spirits as provided in § 19.599.
(e) Other dispositions. A proprietor must maintain daily records of all other dispositions of spirits, wines and alcoholic flavoring materials, including, but not limited to, records regarding the following:
(1) Spirits, wines, and alcoholic flavoring materials removed from the distilled spirits plant premises;
(2) Transfers in bond;
(3) Spirits transferred to the production account for redistillation;
(4) Redistillation of spirits, including the production of gin or vodka by other than original and continuous distillation;
(5) Voluntary destruction of spirits or wines; and
(6) Losses of spirits, wines and alcoholic flavoring materials.
§ 19.598   Dump/batch records.
A proprietor who processes, mixes, or blends spirits in the processing account must maintain “dump/batch” records setting forth detailed information regarding the processing of the spirits. The dump/batch records must contain each of the following items of information that applies to the processing in question:
(a) Serial number of the record or batch number;
(b) Name and distilled spirits plant number of the producer;
(c) Kind and age of the spirits used, together with a notation, if applicable, that the spirits—
(1) Were treated with oak chips;
(2) Contain added caramel;
(3) Were imported; or
(4) Are from Puerto Rico or the Virgin Islands;
(d) Serial number of the tank or container to which ingredients are added for use;
(e) Serial or identification number of the tank or container from which spirits are removed;
(f) Quantity by ingredient of other alcoholic ingredients used, showing wine in wine gallons, the percentage of alcohol by volume and proof, and alcoholic flavoring materials in proof gallons;
(g) Serial number of the source transaction record (for example, the record for spirits previously dumped);
(h) Date of each transaction;
(i) Quantity, by ingredient (other than water), of nonalcoholic ingredients used;
(j) Formula number;
(k) Quantity of ingredients used in the batch that have been previously dumped, reported on dump records, and held in tanks or containers;
(l) Total quantity in proof gallons of all alcoholic ingredients used;
(m) Identification of each record to which spirits are transferred;
(n) Quantity of each lot transferred;
(o) Date of each transfer;
(p) Total quantity in proof gallons of the product transferred;
(q) Batch gain or loss; and
(r) For each batch to be tax determined in accordance with § 19.247, the effective tax rate.
§ 19.599   Bottling and packaging records.
A proprietor who bottles or packages spirits must prepare a “bottling and packaging” record for each lot of spirits bottled or packaged. The bottling and packaging record must contain the following information:
(a) Bottling tank number;
(b) Serial number of the record (which must commence with “1” at the start of each calendar or fiscal year, or be a unique identifying number that is not repeated);
(c) Formula number (if any) under which the batch was produced;
(d) Serial number of the dump/batch record from which the spirits were received;
(e) Kind of distilled spirits product (including age, if claimed);
(f) Details of the tank gauge (including proof, wine gallons, proof gallons, and, if applicable, obscuration);
(g) The date the bottles or packages were filled;
(h) The size of the bottles or packages filled, the number of bottles per case, and the number of cases or packages filled;
(i) Serial numbers by brand name of the cases or other containers filled;
(j) Proof of the spirits bottled or packaged (if different from the proof recorded under paragraph (f) of this section);
(k) Total quantity bottled, packaged, or otherwise disposed of in bulk;
(l) Losses or gains of the distilled spirits product; and
(m) If labeled as bottled in bond, a statement to that effect.
§ 19.600   Alcohol content and fill test record.
A proprietor must maintain a record of the results of all tests of alcohol content and quantity (fill) conducted. The record must include information that will enable TTB officers to determine whether the proprietor is complying with the requirements of § 19.356. The record of alcohol content and fill tests must contain, at a minimum, the following information:
(a) Date and time of the test;
(b) Bottling tank number;
(c) Serial number of the bottling record;
(d) Bottling line designation;
(e) Size of bottles filled;
(f) Number of bottles tested;
(g) Labeled alcohol content;
(h) Alcohol content found by the test;
(i) Percentage of variation from 100 percent fill; and
(j) Corrective action taken, if any.
§ 19.601   Finished products records.
(a) Bottling and packaging. A proprietor must maintain daily transaction records and a daily summary record of the quantity of finished products bottled or packaged within the processing account at the distilled spirits plant. These records must show:
(1) The beginning and ending quantity of bottled or packaged spirits on hand;
(2) The quantity of spirits bottled or packaged; and
(3) Inventory overages.
(b) Disposition of finished products. A proprietor must also maintain daily records of the disposition of finished products from the processing account at the distilled spirits plant. These disposition records must show any spirits:
(1) Transferred in bond (packages);
(2) Withdrawn tax determined;
(3) Withdrawn free of tax for U.S., hospital, scientific, or educational use;
(4) Withdrawn without payment of tax for addition to wine;
(5) Withdrawn for exportation, for vessels and aircraft supplies and for transfer to a customs bonded warehouse;
(6) Transferred to the production account for redistillation;
(7) Withdrawn for research, development or testing (including government samples);
(8) Voluntarily destroyed;
(9) Dumped for further processing;
(10) Recorded losses or shortages of finished product; and
(11) Disposed of as samples of the finished product.
§ 19.602   Redistillation records.
If a proprietor redistills spirits in the processing account (as in the production of gin or vodka by redistillation), the proprietor must prepare a record of the redistillation. The record must show the kind and quantity of the spirits entered into the distilling system and the kind and quantity of the spirits removed from the distilling system upon completion of the process.
§ 19.603   Liquor bottle records.
A proprietor must maintain records of the receipt, use, and disposition of liquor bottles.
§ 19.604   Rebottling, relabeling, and reclosing records.
(a) If a proprietor dumps spirits for rebottling, the proprietor must prepare in accordance with § 19.599 a bottling and packaging record that covers the rebottling operation.
(b) If a proprietor relabels or recloses bottled products in accordance with § 19.363, the proprietor must maintain records of the operation that reflect the following:
(1) The identity of the spirits relabeled or reclosed;
(2) The date of the transaction;
(3) The serial numbers of any cases involved; and
(4) The total number of bottles.
§ 19.606   Denaturation records.
(a) General. A processor that is authorized to denature spirits must maintain daily records of denaturation showing the following information:
(1) Spirits that are received for, and used in, denaturation;
(2) Spirits, denatured spirits, recovered denatured spirits, spirits residues, and articles that are redistilled in the processing account for denaturation;
(3) Kind and quantity of denaturants received and used in denaturation of spirits or otherwise disposed of;
(4) Conversion of denatured alcohol formulas in accordance with § 19.392;
(5) Denatured spirits produced, received, stored in tanks, filled into containers, removed, or otherwise disposed of;
(6) Recovered denatured spirits or recovered articles received, restored, or redenatured;
(7) Packages of denatured spirits filled, with a separate record for each formula number and filed in numerical order according to the serial number or lot identification number of the packages;
(8) Losses of denatured spirits; and
(9) Disposition of denatured spirits.
(b) Record of denaturation. Each time that a proprietor denatures spirits, the proprietor must prepare a record that shows the formula number, the tank in which denaturation takes place, the proof gallons of the spirits before denaturation, the quantity of each denaturant used (in gallons, or in pounds or ounces), and the wine gallons of denatured spirits produced.
§ 19.607   Article manufacture records.
Each processor qualified to manufacture articles must maintain daily manufacturing and disposition records, arranged by the name and authorized Use Code of the article, in the manner provided in part 20 of this chapter.
§ 19.611   Records of tax determination in general.
(a) Taxable withdrawals. Except as otherwise provided in this part, a proprietor must gauge and determine the tax on spirits when they are withdrawn from bond. When spirits are withdrawn from bond, the proprietor must also prepare a record of the tax determination in accordance with paragraph (b) of this section.
(b) Form of record. A serially numbered invoice or shipping document, signed or initialed by an agent or employee of the proprietor, will constitute the record of tax determination. Although neither the proof gallons nor the effective tax rate must be shown on the record of tax determination, each invoice or shipping document must contain information sufficient to enable TTB officers to determine the total proof gallons and, if applicable, each effective tax rate and the proof gallons removed at each effective tax rate. For purposes of this part, the total proof gallons calculated from each invoice or shipping document constitutes a single withdrawal.
§ 19.612   Summary records of tax determinations.
Each proprietor that withdraws distilled spirits on determination of tax, but before payment of tax, must maintain a daily summary record of tax determinations. The summary record must show for each day on which tax determinations occur:
(a) The serial numbers of the records of tax determination, the total proof gallons rounded to the nearest tenth proof gallon on which tax was determined at each effective tax rate, and the total tax; or
(b) The serial numbers of the records of tax determination, the total tax for each record of tax determination, and the total tax.
§ 19.613   Average effective tax rate records.
(a) Daily record. For each distilled spirits product to be tax determined using an average effective tax rate in accordance with § 19.249, the proprietor must prepare a daily summary record showing:
(1) The serial number of the batch record of each batch of the product that will be bottled or packaged, in whole or in part, for domestic consumption;
(2) The proof gallons in each such batch derived from distilled spirits, eligible wine, and eligible flavors; and
(3) The tax liability of each such batch determined as follows—
(i) Proof gallons of all distilled spirits (exclusive of distilled spirits derived from eligible flavors), multiplied by the tax rate prescribed in 26 U.S.C. 5001;
(ii) Wine gallons of each eligible wine, multiplied by the tax rate which would be imposed on the wine under 26 U.S.C. 5041(b)(1), (2), or (3) but for its removal to bonded premises; and
(iii) Proof gallons of all distilled spirits derived from eligible flavors, to the extent that those distilled spirits exceed 2.5 percent of the proof gallons in the product, multiplied by the tax rate prescribed in 26 U.S.C. 5001.
(b) Monthly records. At the end of each month during which the product is manufactured, the proprietor must:
(1) Determine the total proof gallons and total tax liability for each summary record prescribed by paragraph (a) of this section;
(2) Add the sums derived under paragraph (b)(1) of this section to the like sums determined for each of the preceding 5 months; and
(3) Divide the total tax liabilities by the total proof gallons.
§ 19.614   Inventory reserve records.
(a) General. For each eligible distilled spirits product to be tax determined in accordance with § 19.250, the proprietor must establish an inventory reserve account, in accordance with this section.
(b) Deposit records. For each batch of the bottled or packaged product, the proprietor must enter into the inventory reserve account a deposit record, which may be combined with the bottling and packaging record required by § 19.599, showing:
(1) The name of the product;
(2) The bottling and packaging record serial number;
(3) The date the bottling or packaging was completed;
(4) The total proof gallons bottled and packaged; and
(5) The effective tax rate of the product computed in accordance with § 19.246.
(c) Depletions. The inventory reserve account for each product must be depleted in the same order in which the deposit records were entered into the account. The proprietor must record a depletion for each disposition (for example, a taxable removal, an exportation, or an inventory shortage or breakage) by entering on the deposit record:
(1) The transaction date;
(2) The transaction record serial number;
(3) The proof gallons disposed of; and
(4) The proof gallons remaining. If any depletion exceeds the quantity of product remaining on the deposit record, the proprietor must deplete the remaining quantity, close the deposit record, and then deplete the remainder of the transaction from the next deposit record.
§ 19.615   Standard effective tax rate records.
For each product to be tax determined using a standard effective tax rate in accordance with § 19.248, a proprietor must prepare a record of the standard effective tax rate computation showing, for one proof gallon of the finished product, the following information:
(a) The name of the product;
(b) The least quantity of each eligible flavor that will be used in the product, in proof gallons, or 0.025 proof gallon, whichever is less;
(c) The least quantity of each eligible wine that will be used in the product, in proof gallons;
(d) The greatest effective tax rate applicable to the product, calculated in accordance with § 19.246 with the values indicated in paragraphs (a) and (b) of this section; and
(e) The date on which the use of the standard effective tax rate commenced.
§ 19.616   Records of samples.
(a) Required records. A proprietor must maintain records of all samples taken under §§ 19.434 and 19.435. The sample record must show the:
(1) The date that the samples were taken;
(2) The account from which taken;
(3) The purpose for which taken;
(4) The size and number of samples taken;
(5) The kind of spirits;
(6) The disposition of each sample (for example, destroyed, returned to containers or the distilling system, retained for library purposes); and
(7) The name and address of the recipient of the sample if a sample is to be analyzed or tested elsewhere than at the distilled spirits plant where taken.
(b) Sample schedule. When a proprietor takes samples pursuant to an established schedule, the proprietor may maintain the schedule as the required record if it contains the information required by paragraphs (a)(2) through (a)(7).
§ 19.617   Destruction records.
Each time that a proprietor voluntarily destroys spirits, denatured spirits, articles, or wines, the proprietor must prepare a record of the destruction that sets forth:
(a) The identification of the spirits, denatured spirits, articles, or wines, including kind, quantity, elements of gauge, name and permit number of the producer, warehouseman or processor, and identity and type of container;
(b) The date, time, place and manner of the destruction;
(c) A statement that the spirits had, or had not, previously been withdrawn and returned to bond; and
(d) The name and title of any representative of the proprietor who accomplished or supervised the destruction.
§ 19.618   Gauge record.
When a gauge record is required by this part, the proprietor must prepare the gauge record in a manner that shows:
(a) The serial number of the gauge record, which must either:
(1) Commence with “1” at the start of each calendar or fiscal year, or
(2) Be a unique identifying number that is not repeated.
(b) From the following, the applicable circumstances requiring the gauge—
(1) Production gauge and entry for deposit in the storage or processing account at the distilled spirits plant where the spirits were produced;
(2) Packaging of spirits or wine filled from a tank in the storage account at the same distilled spirits plant;
(3) Transfer from the processing or storage account to the production account for redistillation;
(4) Repackaging of spirits of 190° or more of proof; or
(5) Gauge on return to bond in production or processing operations of spirits, denatured spirits, recovered spirits, recovered denatured spirits, articles, recovered articles, or spirits residues;
(c) The date of the gauge;
(d) Any related form or record (identification, serial number and date);
(e) The kind of spirits or formula number for denatured spirits;
(f) The proof of distillation (not required for denatured spirits, spirits for redistillation, or spirits of 190° or more of proof);
(g) When containers are to be filled, the type and number of containers;
(h) The age of the spirits;
(i) The name and distilled spirits plant number of the producer or warehouseman; and
(j) The following gauge data—
(1) Package identification, tank number, volumetric or weight gauge details, proof, and wine gallons;
(2) Cooperage identification (“C” for charred, “REC” for recharred, “P” for plain, “PAR” for paraffined, “G” for glued, or “R” for reused, and “PS” if a barrel has been steamed or water soaked before filling);
(3) Entry proof for whiskey;
(4) Proof gallons per filled package; and
(5) Total proof gallons of spirits or wine gallons of denatured spirits, recovered denatured spirits, articles, spirits residues, or wine.
§ 19.619   Package gauge record.
When this part or part 28 of this chapter requires a proprietor to gauge packages of spirits, the proprietor must prepare a package gauge record in a manner that shows:
(a) The date the record is prepared;
(b) The identity of the related transaction form or record, and its serial number;
(c) The name and distilled spirits plant number of the producer or processor. For blended rums or brandies the proprietor must enter the name and plant number of the blending warehouseman. For spirits of 190° or more of proof, the proprietor must enter the name and plant number of the producer or warehouseman, as appropriate and, where the packages have already been marked, the name and distilled spirits plant number marked thereon. For imported spirits, the proprietor must enter the name of the warehouseman who received the spirits from customs custody and the name of the importer. For Virgin Islands or Puerto Rican spirits, the proprietor must enter the name of the producer in the Virgin Islands or Puerto Rico;
(d) The proof of distillation for spirits not over 190° of proof; and
(e) For each package—
(1) The serial or identification number;
(2) The designation for wooden barrels (“C” for charred, “REC” for recharred, “P” for plain, “PAR” for paraffined, “G” for glued, “R” for reused, and “PS” if a barrel has been steamed or water soaked before filling);
(3) The kind of spirits;
(4) The gross weight determined at the time of the original gauge or regauge or at the time of shipment;
(5) The present tare on regauge;
(6) The net weight for filling gauge or regauge;
(7) The proof;
(8) The proof gallons for regauge;
(9) The original proof gallons; and
(10) The receiving weights, when a material difference appears on receipt after transfer in bond of weighed packages.
§ 19.620   Transfer record—consignor's responsibility.
When this part requires a consignor proprietor to prepare a transfer record covering spirits, denatured spirits, or wines shipped in bond from its distilled spirits plant, the transfer record must include:
(a) The serial number of the transfer record, which must either:
(1) Commence with “1” at the start of each calendar or fiscal year, or
(2) Be a unique identifying number that is not repeated.
(b) The serial number and date of form TTB F 5100.16 (not required for wine spirits withdrawn without payment of tax for use in wine production);
(c) The name and distilled spirits plant number of the consignor proprietor;
(d) The name and distilled spirits plant number or bonded wine cellar number of the consignee;
(e) The account from which the spirits or wines were removed for transfer (that is, the production, storage, or processing account);
(f) A description of the spirits, denatured spirits, or wine, including—
(1) The name and plant number of the producer, warehouseman, or processor (not required for denatured spirits or wine). For imported spirits transferred in bond between distilled spirits plants, the transfer record must show the name and plant number of the warehouseman or processor who received the spirits from customs custody. For Virgin Islands or Puerto Rican spirits, the transfer record must show the name of the producer in the Virgin Islands or Puerto Rico. For spirits of different producers or warehousemen that have been mixed in the processing account, the transfer record must show the name of the processor;
(2) The kind of spirits or wines. For denatured spirits, the transfer record must show the kind and formula number. For alcohol, the transfer record must show the material from which it was produced. For bulk spirits and for alcohol in packages, the transfer record must show the kind and proof. For other spirits and wines, the transfer record must show the kind designation as specified in part 4 or part 5 of this chapter, as appropriate;
(3) The age (in years, months, and days) and year of production;
(4) The number of packages or cases with their lot identification numbers or serial numbers and dates of fill;
(5) The type of container (if the spirits, denatured spirits or wines are to be transferred by pipeline, the transfer record must show “P/L”);
(6) The proof gallons for distilled spirits, or wine gallons for denatured spirits or wine; and
(7) For distilled spirits products that contain eligible wine or eligible flavors, the transfer record must show the elements necessary to compute the effective tax rate as follows—
(i) Proof gallons of distilled spirits (exclusive of distilled spirits derived from eligible flavors);
(ii) Wine gallons of each eligible wine and the percentage of alcohol by volume of each; and
(iii) Proof gallons of distilled spirits derived from eligible flavors;
(g) A notation to indicate when spirits are being transferred in bond from a production facility to another distilled spirits plant;
(h) The identification of the conveyance;
(i) The identity of the seals, locks, or other devices affixed to the conveyance or package (permanent seals affixed to a conveyance that remain intact need not be recorded on the transfer record when a permanent record is maintained);
(j) The date of transfer; and
(k) The signature and title of the consignor, with a penalty-of-perjury statement as prescribed in § 19.45.