Title 27—Alcohol, Tobacco Products and Firearms--Volume 1
PART 25—BEER
§ 25.1   Production and removal of beer.
The regulations in this part relate to beer and cereal beverages and cover the location, construction, equipment, operations and qualifications of breweries and pilot brewing plants.
§ 25.2   Territorial extent.
This part applies to the several States of the United States and the District of Columbia.
§ 25.3   Forms prescribed.
(a) The appropriate TTB officer is authorized to prescribe all forms required by this part, including bonds, applications, notices, reports, returns, and records. All of the information called for in each form shall be furnished as indicated by the headings on the form and the instructions on or pertaining to the form. In addition, information called for in each form shall be furnished as required by this part. The form will be filed in accordance with the instructions for the form.
(b) Forms prescribed by this part are available for printing through the TTB Web site ( https://www.ttb.gov ) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
§ 25.4   Related regulations.
Regulations relating to this part are listed below:
§ 25.5   OMB control numbers assigned under the Paperwork Reduction Act.
(a) Purpose. This section collects and displays the control numbers assigned to information collection requirements by the Office of Management and Budget contained in 27 CFR Part 25 under the Paperwork Reduction Act of 1980, Pub. L. 96-511.
(b) Display, OMB control number 1512-0045. OMB control number 1512-0045 is assigned to the following sections in 27 CFR Part 25: §§ 25.23, 25.25, 25.52, 25.61, 25.62, 25.64, 25.66, 25.67, 25.68, 25.71, 25.72, 25.73, 25.74, 25.75, 25.76, 25.77, 25.78, 25.81, 25.85, 25.103, 25.114, 25.141, 25.142, 25.144, 25.158, 25.167, 25.184, 25.213, 25.222, 25.225, 25.272, 25.273, 25.277, 25.282, 25.299.
(c) Display, OMB control number 1512-0052. OMB control number 1512-0052 is assigned to the following sections in 27 CFR Part 25: §§ 25.296(b), 25.297.
(d) Display, OMB control number 1512-0079. OMB control number 1512-0079 is assigned to the following section in 27 CFR Part 25: § 25.65.
(e) Display, OMB control number 1512-0141. OMB control number 1512-0141 is assigned to the following sections in 27 CFR Part 25: §§ 25.281, 25.282, 25.286.
(f) Display, OMB control number 1512-0333. OMB control number 1512-0333 is assigned to the following sections in 27 CFR Part 25: §§ 25.42, 25.142, 25.186, 25.192, 25.195, 25.196, 25.211, 25.252, 25.264, 25.276, 25.284, 25.291, 25.292, 25.293, 25.294, 25.295, 25.296(a), 25.300, 25.301.
(g) Display, OMB control number 1512-0457. OMB control number 1512-0457 is assigned to the following section in 27 CFR Part 25: § 25.165.
(h) Display, OMB control number 1512-0467. OMB control number 1512-0467 is assigned to the following sections in 27 CFR Part 25: §§ 25.122, 25.160, 25.163, 25.164, 25.165, 25.166, 25.167, 25.168, 25.175, 25.224, 25.284, 25.285, 25.298.
(i) Display, OMB control number 1512-0472. OMB control number 1512-0472 is assigned to the following sections in 27 CFR Part 25: §§ 25.111, 25.112, 25.113, 25.114, 25.117, 25.118, 25.119, 25.121, 25.126, 25.127, 25.131, 25.132, 25.133, 25.134.
(j) Display, OMB control number 1512-0478. OMB control number 1512-0478 is assigned to the following sections in 27 CFR Part 25: §§ 25.24, 25.35, 25.141, 25.142, 25.143, 25.145, 25.192, 25.196, 25.231, 25.242, 25.251, 25.263.
§ 25.6   Delegations of the Administrator.
The regulatory authorities of the Administrator contained in this part are delegated to appropriate TTB officers. These TTB officers are specified in TTB Order 1135.25, Delegation of the Administrator's Authorities in 27 CFR Part 25, Beer. You may obtain a copy of this order by accessing the TTB Web site ( https://www.ttb.gov ) or by mailing a request to the Alcohol and Tobacco Tax and Trade Bureau, National Revenue Center, 550 Main Street, Room 8970, Cincinnati, OH 45202.
§ 25.11   Meaning of terms.
When used in this part, where not otherwise distinctly expressed or manifestly incompatible with the intent thereof, terms have the meanings given in this section.
Administrator. The Administrator, Alcohol and Tobacco Tax and Trade Bureau, Department of the Treasury, Washington, DC.
Appropriate TTB officer. An officer or employee of the Alcohol and Tobacco Tax and Trade Bureau (TTB) authorized to perform any functions relating to the administration or enforcement of this part by TTB Order 1135.25, Delegation of the Administrator's Authorities in 27 CFR Part 25, Beer.
Balling. The percent by weight of dissolved solids at 60 °F. present in wort and beer, usually determined by a balling saccharometer.
Bank. Any commercial bank.
Banking day. Any day during which a bank is open to the public for carrying on substantially all its banking functions.
Barrel. When used as a unit of measure, the quantity equal to 31 U.S. gallons. When used as a container, a consumer package or keg containing a quantity of beer listed in § 25.156, or other size authorized by the appropriate TTB officer.
Beer. Beer, ale, porter, stout, and other similar fermented beverages (including saké and similar products) of any name or description containing one-half of one percent or more of alcohol by volume, brewed or produced from malt, wholly or in part, or from any substitute for malt. Standards for the production of beer appear in § 25.15.
Bonded premises of a distilled spirits plant. The bonded premises of a distilled spirits plant as described in part 19 of this chapter. This term includes premises described in the preceding sentence even if the distilled spirits plant proprietor, as authorized under the exemption set forth in § 19.151(d) of this chapter, has not provided a bond for the premises.
Bonded wine premises. Bonded wine premises established under part 24 of this chapter. This term includes premises described in the preceding sentence even if the proprietor, as authorized under the exemption set forth in § 24.146(d) of this chapter, has not provided a bond for the premises.
Bonded winery. The premises of a bonded winery as described in part 24 of this chapter. This term includes premises described in the preceding sentence even if the proprietor, as authorized under § 24.146(d) of this chapter, has not provided a bond for the premises.
Bottle. A bottle, can or similar container.
Bottling. The filling of bottles, cans, and similar containers.
Brewer. Any person who brews beer (except a person who produces only beer exempt from tax under 26 U.S.C. 5053(e)) and any person who produces beer for sale.
Brewery. The land and buildings described in the Brewer's Notice, Form 5130.10, where beer is to be produced and packaged.
Brewing. The production of beer for sale.
Business day. The 24-hour cycle of operations in effect at the brewery and described on the Brewer's Notice, Form 5130.10.
Calendar quarter. A 3-month period during the year as follows: January 1 through March 31; April 1 through June 30; July 1 through September 30; and October 1 through December 31.
Cereal beverage. A beverage, produced either wholly or in part from malt (or a substitute for malt), and either fermented or unfermented, which contains, when ready for consumption, less than one-half of 1 percent of alcohol by volume.
Commercial bank. A bank, whether or not a member of the Federal Reserve System, which has access to the Federal Reserve Communications System (FRCS) or Fedwire. The “FRCS” or “Fedwire” is a communications network that allows Federal Reserve System member banks to effect a transfer of funds for their customers (or other commercial banks) to the Treasury Account at the Federal Reserve Bank of New York.
Concentrate. Concentrate produced from beer by the removal of water under the provisions of subpart R of this part. The processes of concentration of beer and reconstitution of beer are considered authorized processes in the production of beer.
Director of the service center. A Director of an Internal Revenue Service Center.
District Director. A district director of internal revenue.
Electronic fund transfer or EFT. Any transfer of funds made by a brewer's commercial bank, either directly or through a correspondent banking relationship, via the Federal Reserve Communications System (FRCS) or Fedwire to the Treasury Account at the Federal Reserve Bank of New York.
Executed under penalties of perjury. Signed with the prescribed declaration under the penalties of perjury as provided on or with respect to the return, claim, form, or other document or, when no form of declaration is prescribed, with the declaration: “I declare under the penalties of perjury that this ____________ (insert type of document such as statement, report, certificate, application, claim, or other document), including the documents submitted in support thereof, has been examined by me and, to the best of my knowledge and belief, is true, correct and complete.”
Fiscal year. The period which begins October 1 and ends on the following September 30.
Gallon. The liquid measure containing 231 cubic inches.
Losses. Known quantities of beer lost due to breakage, casualty, or other unusual cause.
Package. A bottle, can, keg, barrel, or other original consumer container.
Packaging. The filling of any package.
Person. An individual, trust, estate, partnership, association, company, or corporation.
Racking. The filling of kegs or barrels.
Removed for consumption or sale. Except when used with respect to beer removed without payment of tax as authorized by law, (a) the sale and transfer of possession of beer for consumption at the brewery, or (b) any removal of beer from the brewery.
Secretary of the Treasury or Secretary. The Secretary of the Treasury or a delegate of the Secretary.
Service center. An Internal Revenue Service Center in any of the Internal Revenue regions.
Shortage. An unaccounted for discrepancy (missing quantity) of beer disclosed by physical inventory.
This chapter. Title 27, Code of Federal Regulations, Chapter I (27 CFR Chapter I).
Treasury account. The Department of the Treasury's General Account at the Federal Reserve Bank of New York.
U.S.C. The United States Code.
Wort. The product of brewing before fermentation which results in beer.
§ 25.15   Materials for the production of beer.
(a) Beer must be brewed from malt or from substitutes for malt. Only rice, grain of any kind, bran, glucose, sugar, and molasses are substitutes for malt. In addition, you may also use the following materials as adjuncts in fermenting beer: honey, fruit, fruit juice, fruit concentrate, herbs, spices, and other food materials.
(b) You may use flavors and other nonbeverage ingredients containing alcohol in producing beer. Flavors and other nonbeverage ingredients containing alcohol may contribute no more than 49% of the overall alcohol content of the finished beer. For example, a finished beer that contains 5.0% alcohol by volume must derive a minimum of 2.55% alcohol by volume from the fermentation of ingredients at the brewery and may derive not more than 2.45% alcohol by volume from the addition of flavors and other nonbeverage ingredients containing alcohol. In the case of beer with an alcohol content of more than 6% by volume, no more than 1.5% of the volume of the beer may consist of alcohol derived from added flavors and other nonbeverage ingredients containing alcohol.
§ 25.21   Restrictions on location.
A brewery may not be established or operated in any dwelling house or on board any vessel or boat, or in any building or on any premises where the revenue will be jeopardized or the effective administration of this part will be hindered.
§ 25.22   Continuity of brewery.
Brewery premises will be unbroken except that they may be separated by public passageways, streets, highways, waterways, carrier rights-of-way, or partitions. If the brewery premises are separated, the parts will abut on the dividing medium and be adjacent to each other. If the brewer has facilities for loading, or for case packing or storage which are located within reasonable proximity to the brewery, the appropriate TTB officer may approve these facilities as part of the brewery if the revenue will not be jeopardized.
§ 25.23   Restrictions on use.
(a) Use of brewery in production of beer or cereal beverage. A brewery may be used only for the following purposes involving the production of beer or cereal beverages:
(1) For producing, packaging and storing beer, cereal beverages, vitamins, ice, malt, malt syrup, and other by-products of the brewing process, or soft drinks and other nonalcoholic beverages;
(2) For processing spent grain, carbon dioxide, and yeast; and
(3) For storing packages and supplies necessary or connected to brewery operations.
(b) Other authorized uses. A brewer may use a brewery for other purposes, not involving the production of beer or cereal beverage, upon approval from the appropriate TTB officer, if the purposes:
(1) Require the use of by-products or waste from the production of beer;
(2) Utilize buildings, rooms, areas, or equipment not fully employed in the production or packaging of beer;
(3) Are reasonably necessary to realize the maximum benefit from the premises and equipment and reduce the overhead of the brewery;
(4) Are in the public interest because of emergency conditions;
(5) Involve experiments or research projects related to equipment, materials, processes, products, by-products, or waste of the brewery; or
(6) Involve operation of a tavern on brewery premises in accordance with § 25.25.
(c) Application. Except as provided in § 25.25 for operation of a tavern on brewery premises, a brewer desiring to use a brewery for other purposes shall submit to the appropriate TTB officer , an application listing the purposes. The appropriate TTB officer will approve the application if the use for other purposes will not jeopardize the revenue or impede the effective administration of this part and is not contrary to specific provisions of law.
§ 25.24   Storage of beer.
(a) Taxpaid beer. Beer of a brewer's own production on which the tax has been paid or determined may not be stored in the brewery, except as provided in § 25.25 or § 25.213. Beer produced by other brewers may be stored at the brewery under the following conditions:
(1) Taxpaid beer will be segregated in such a manner as to preclude mixing with nontaxpaid beer;
(2) If required by part 1 of this chapter, the brewer shall have a wholesalers or importers basic permit under the Federal Alcohol Administration Act, and keep records of the taxpaid beer as a wholesaler or importer under part 31 of this chapter.
(3) Taxpaid beer may be stored in packages;
(4) Taxpaid beer may not be relabeled;
(5) Taxpaid beer may not be shown on required brewery records; and
(6) The appropriate TTB officer may require physical segregation of taxpaid beer, or marking to show the status of taxpaid beer, if necessary to protect the revenue.
(b) Untaxpaid beer. Packaged beer on which tax has not been paid or determined may be stored in any suitable location in the brewery.
§ 25.25   Operation of a tavern on brewery premises.
(a) General. A brewer desiring to operate a tavern as an alternate use of brewery premises, shall submit a Brewer's Notice, Form 5130.10 containing the information required by paragraph (b) of this section. If the appropriate TTB officer finds that the operation of the tavern on brewery premises will not jeopardize the revenue or impede the effective administration of this part and is not contrary to specific provisions of law, the approval of the Brewer's Notice, Form 5130.10 shall constitute approval of the alternate use of brewery premises, in lieu of the application required by § 25.23. As used in this section, “tavern” means a portion of brewery premises where beer is sold to consumers. Food, and/or taxpaid wine, and/or taxpaid distilled spirits may also be sold at a tavern operated on brewery premises. Taxpaid beer produced by other brewers may be received, stored and sold on brewery premises in accordance with § 25.24.
(b) Brewer's Notice. In preparing the Brewer's Notice, Form 5130.10, the applicant shall show the following information, in addition to the information required by the form:
(1) The applicant shall identify the portion of the brewery which will be operated as a tavern by providing a diagram or narrative description of the boundaries of the tavern. The diagram or description shall identify areas of the brewery which are accessible to the public and areas which are not. The applicant shall describe security measures to be used to segregate public areas from non-public areas.
(2) The applicant shall describe in detail the method to be used for measuring beer for the purposes of tax determination.
(3) The applicant shall identify the tanks which will periodically contain tax-determined beer, and any other areas where tax-determined beer will be stored.
(c) Procedures. The following procedures shall apply to operation of a tavern on brewery premises:
(1) The brewery shall have a suitable method for measurement of the beer, such as a meter or gauge glass. Tax determination shall consist of the measurement of the beer and the preparation of the brewer's record of tax determination, required by § 25.292(a)(8). The taxes shall be determined prior to the time that the beer is dispensed into a container for consumption.
(2) If the brewer uses one or more tanks for tax determination, the following procedures shall apply:
(i) Each such tank shall be durably marked with the words “tax-determination tank”;
(ii) The taxes shall be determined each time beer is added to a tax-determination tank; and
(iii) The brewer may never simultaneously pump into and out of a tax-determination tank.
(3) A brewer qualified under this section may store, on brewery premises, tax-determined beer which is intended for sale at a tavern operated on brewery premises, in accordance with this section. The prohibition of § 25.24 shall not apply to such tax-determined beer.
(4) Beer consumed by employees and visitors in the brewery's tavern shall be beer on which the tax has been paid or determined.
§ 25.31   Brewery buildings.
Brewery buildings shall be arranged and constructed to afford adequate protection to the revenue and to facilitate inspection by appropriate TTB officers.
§ 25.35   Tanks.
Each stationary tank, vat, cask or other container used, or intended for use, as a receptacle for wort, beer or concentrate produced from beer shall:
(a) Be durably marked with a serial number and capacity; and
(b) Be equipped with a suitable measuring device. The brewer may provide meters or other suitable portable devices for measuring contents of tanks or containers in lieu of providing each tank or container with a measuring device.
§ 25.36   Empty container storage.
Empty barrels, kegs, bottles, other containers, or other supplies stored in the brewery will be segregated from filled containers.
§ 25.41   Measuring system required.
The brewer shall accurately and reliably measure the quantity of beer transferred from the brewery cellars for bottling and for racking. The brewer may use a measuring device, such as a meter or gauge glass, or any other suitable method.
§ 25.42   Testing of measuring devices.
(a) General requirements. If a measuring device such as a meter or gauge glass is used to measure beer, the brewer shall periodically test the measuring device and adjust or repair it, if necessary. The brewer shall keep records of tests available for inspection by appropriate TTB officers. Records of tests will include:
(1) Date of test;
(2) Identity of meter or measuring device;
(3) Result of test; and
(4) Corrective action taken, if necessary.
(b) Requirements for beer meters. The allowable variation for beer meters as established by testing may not exceed ±0.5 percent. If a meter test discloses an error in excess of the allowable variation, the brewer shall immediately adjust or repair the meter. Adjustments will reduce the error to as near zero as practicable.
(c) Authority to require tests. If the appropriate TTB officer has reason to believe that the accuracy or reliability of a measuring device is not being properly maintained, he or she may require the brewer to test the measuring device and, if necessary, adjust or repair the measuring device.
§ 25.51   Right of Entry and Examination.
An appropriate TTB officer may enter, during normal business hours, a brewery or other place where beer is stored and may, when the premises are open at other times, enter those premises in the performance of official duties. Appropriate TTB officers may make inspections as the appropriate TTB officer deems necessary to determine that operations are conducted in compliance with the law and this part. The owner of any building or place where beer is produced, made, or kept, or person having charge over such premises, who refuses to admit an appropriate TTB officer acting under 26 U.S.C. 7606, or who refuses to permit an appropriate TTB officer to examine beer must, for each refusal, forfeit $500.
§ 25.52   Variations from requirements.
(a) Exceptions to construction, equipment and methods of operations —(1) General. The appropriate TTB officer may approve details of construction, equipment or methods of operations, in lieu of those specified in this part. The brewer shall show that it is impracticable to conform to the prescribed specification, and that the proposed variance:
(i) Will afford the protection to the revenue intended by the specifications in this part;
(ii) Will not hinder the effective administration of this part, and
(iii) Is not contrary to any provision of law.
(2) Application. A brewer who proposes to employ methods of operations or construction or equipment other than as provided in this part shall submit an application to the appropriate TTB officer. The application will describe the proposed variation and state the need for it. The brewer shall submit drawings or photographs if necessary to describe the proposed variation.
(3) Approval by appropriate TTB officer. The appropriate TTB officer may approve the use of an alternate method or procedure if:
(i) The brewer shows good cause for its use;
(ii) It is consistent with the purpose and effect of the procedure prescribed by this part and provides equal security to the revenue;
(iii) It is not contrary to law; and
(iv) It will not cause an increase in cost to the Government and will not hinder the effective administration of this part.
(4) Exceptions. The appropriate TTB officer may not authorize an alternate method or procedure relating to the giving of any bond, or to the assessment, payment, or collection of tax.
(5) Conditions of approval. A brewer may not employ an alternate method or procedure until the appropriate TTB officer has approved its use. The brewer shall, during the terms of the authorization of an alternate method or procedure, comply with the terms of the approved application.
(b) Emergency variations from requirements —(1) Application. When an emergency exists, a brewer may apply to the appropriate TTB officer for a variation from the requirements of this part relating to construction, equipment, and methods of operation. The brewer shall describe the proposed variation and set forth the reasons for using it.
(2) Approval. The appropriate TTB officer may approve an emergency variation from requirements if:
(i) An emergency exists;
(ii) The variation from the requirements is necessary;
(iii) It will afford the same security and protection to the revenue as intended by the specific regulations;
(iv) It will not hinder the effective administration of this part; and
(v) It is not contrary to law.
(3) Conditions of approval. A brewer may not employ an emergency variation from the requirements until the appropriate TTB officer has approved its use. Approval of variations from requirements are conditioned upon compliance with the conditions and limitations set forth in the approval.
(c) Automatic termination of approval. If the brewer fails to comply in good faith with the procedures, conditions or limitations set forth in the approval, authority for the variation from requirements is automatically terminated and the brewer is required to comply with prescribed requirements of regulations.
(d) Withdrawal of approval. The appropriate TTB officer may withdraw approval of an alternate method or procedure, approved under paragraph (a) or (b) of this section, if the appropriate TTB officer finds that the revenue is jeopardized or the effective administration of this part is hindered by the approval.
§ 25.53   Submissions of samples of fermented products.
The appropriate TTB officer may, at any time, require you to submit samples of:
(a) Cereal beverage, saké, or any fermented product produced at the brewery,
(b) Materials used in the production of cereal beverage, saké, or any fermented product; and
(c) Cereal beverage, saké, or any fermented product, in conjunction with the filing of a formula.
§ 25.55   Formulas for fermented products.
(a) For what fermented products must a formula be filed? You must file a formula for approval by TTB if you intend to produce:
(1) Any fermented product that will be treated by any processing, filtration, or other method of manufacture that is not generally recognized as a traditional process in the production of a fermented beverage designated as “beer,” “ale,” “porter,” “stout,” “lager,” or “malt liquor.” For purposes of this paragraph:
(i) Removal of any volume of water from beer, filtration of beer to substantially change the color, flavor, or character, separation of beer into different components, reverse osmosis, concentration of beer, and ion exchange treatments are examples of non-traditional processes for which you must file a formula.
(ii) Pasteurization, filtration prior to bottling, filtration in lieu of pasteurization, centrifuging for clarity, lagering, carbonation, and blending are examples of traditional processes for which you do not need to file a formula.
(iii) If you have questions about whether or not use of a particular process not listed in this section requires the filing of a formula, you may request a determination from TTB in accordance with paragraph (f) of this section.
(2) Any fermented product to which flavors or other nonbeverage ingredients (other than hop extract) containing alcohol will be added.
(3) Subject to paragraph (f) of this section, any fermented product to which coloring or natural or artificial flavors will be added.
(4) Subject to paragraph (f) of this section, any fermented product to which fruit, fruit juice, fruit concentrate, herbs, spices, honey, maple syrup, or other food materials will be added.
(5) Saké, including flavored saké and sparkling saké.
(b) Are separate formulas required for different products? (1) You must file a separate formula for approval for each different fermented product for which a formula is required.
(2) You may file a formula for a beer base to be used in the production of one or more other fermented products. The beer base must conform to the standards set forth in § 25.15.
(c) When must I file a formula? (1) Except as provided in paragraph (c)(2) of this section, you may not produce a fermented product for which a formula is required until you have filed and received approval of a formula for that product.
(2) You may, for research and development purposes (including consumer taste testing), produce a fermented product without an approved formula, but you may not sell or market this product until you receive approval of the formula for it.
(d) How long is my formula approval valid? Your formula approved under this section remains in effect until: you supersede it with a new formula; you voluntarily surrender the formula; TTB cancels or revokes the formula; or the formula is revoked by operation of law or regulation.
(e) Are my previously approved statements of process valid? Your statements of process approved before January 3, 2006 are considered approved formulas under this section, provided that any finished product that could be made under the statement of process would be in compliance with the provisions of this part. You do not need to submit a formula for approval if a statement of process that remains valid covers the product.
(f) Determinations by TTB regarding specific processes and ingredients. (1) The appropriate TTB officer may determine whether or not use of a process not listed in paragraph (a)(1) of this section requires you to file a formula for approval. The appropriate TTB officer may also exempt the use of a particular coloring, flavoring, or food material from the formula filing requirement of paragraph (a)(3) or paragraph (a)(4) of this section upon a finding that the coloring, flavoring, or food material in question is generally recognized as a traditional ingredient in the production of a fermented beverage designated as “beer,” “ale,” “porter,” “stout,” “lager,” or “malt liquor.”
(2) You may request a determination from TTB on whether or not the use of a process not listed in paragraph (a)(1) of this section will require the filing of a formula or whether the use of a particular coloring, flavoring, or food material may be exempted from the formula filing requirement of paragraph (a)(3) or paragraph (a)(4) of this section. You should mail your request to the Assistant Director, Alcohol Labeling and Formulation Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW, Box 12, Washington, DC 20005.
(i) When requesting a determination as to whether a process is subject to the formula filing and approval requirement, the request must include:
(A) A detailed description of the proposed process;
(B) Evidence establishing that the proposed process is generally recognized as a traditional process in the production of a fermented beverage designated as “beer,” “ale,” “porter,” “stout,” “lager,” or “malt liquor”; and
(C) An explanation of the effect of the proposed process on the production of a fermented product.
(ii) When requesting an exemption from the formula filing requirement in paragraph (a)(3) or paragraph (a)(4) of this section regarding coloring, flavoring, or food material ingredients, the request must include the following information:
(A) A description of the proposed ingredient;
(B) Evidence establishing that the proposed ingredient is generally recognized as a traditional ingredient in the production of a fermented beverage designated as “beer,” “ale,” “porter,” “stout,” “lager,” or “malt liquor”; and
(C) An explanation of the effect of the proposed ingredient in the production of a fermented product.
§ 25.56   Filing of formulas.
(a) What are the general requirements for filing a formula? (1) You must file your formula in writing. Your formula must identify each brewery where the formula applies by including each brewery name, address, and registry number.
(2) You must serially number each formula, commencing with “1” and continuing in numerical sequence.
(3) You must date and sign each formula.
(4) You must file two copies of each formula with TTB.
(b) Where do I file a formula? File your formula with the Assistant Director, Alcohol Labeling and Formulation Division, Alcohol and Tobacco Tax and Trade Bureau, 1310 G Street NW, Box 12, Washington, DC 20005.
§ 25.57   Formula information.
(a) Ingredient information. (1) For each formula you must list each separate ingredient and the specific quantity used, or a range of quantities used. You may include optional ingredients in a formula if they do not impact the labeling or identity of the finished product.
(2) For fermented products containing flavorings you must list for each formula: The name of the flavor; the product number or TTB drawback number and approval date of the flavor; the name and location (city and State) of the flavor manufacturer; the alcohol content of the flavor; and the point of production at which the flavor was added (that is, before, during, or after fermentation).
(3) For formulas that include the use of flavors and other nonbeverage ingredients containing alcohol, you must explicitly indicate:
(i) The volume and alcohol content of the beer base;
(ii) The maximum volumes of the flavors and other nonbeverage ingredients containing alcohol to be used;
(iii) The alcoholic strength of the flavors and other nonbeverage ingredients containing alcohol;
(iv) The overall alcohol contribution to the finished product provided by the addition of any flavors or other nonbeverage ingredients containing alcohol. You are not required to list the alcohol contribution of individual flavors and other nonbeverage ingredients containing alcohol. You may state the total alcohol contribution from these ingredients to the finished product; and
(v) The final volume and alcohol content of the finished product.
(b) Process information. For each formula you must describe in detail each process used to produce a fermented beverage.
(c) Alcohol content. For each formula you must state the alcohol content of the fermented product after fermentation and the alcohol content of the finished product.
(d) Beer base formulas. You must refer in your formula to any approved formula number that covers the production of any beer base used in producing the formula product. If the beer base was produced by another brewery of the same ownership, you must also provide the name and address or name and registry number of that brewery.
(e) Additional information. The appropriate TTB officer may at any time require you to file additional information concerning a fermented product, ingredients, or processes, in order to determine whether a formula should be approved or disapproved or whether the approval of a formula should be continued.
§ 25.58   New and superseding formulas.
(a) New formulas. Except as otherwise provided in paragraph (b) of this section, you must file a new formula (with a new formula number) for approval by TTB if you—
(1) Create an entirely new fermented product that requires a formula;
(2) Add new ingredients to an existing formulation;
(3) Delete ingredients from an existing formulation;
(4) Change the quantity of an ingredient used from the quantity or range of usage in an approved formula;
(5) Change an approved processing, filtration, or other special method of manufacture that requires the filing of a formula; or
(6) Change the contribution of alcohol from flavors or ingredients that contain alcohol.
(b) Superseding formulas. You may file a superseding formula, instead of a new formula, if you have made any change listed in paragraphs (a)(2) through (a)(6) of this section and that change is not of a type that would require a holder of a certificate of label approval to file a new application for label approval on TTB Form 5100.31.
(1) A superseding formula replaces an existing formula, and you should file one only if you do not intend to use the existing formula any more. A superseding formula must be filed with TTB for approval. When TTB approves a superseding formula, TTB will cancel your previous formula.
(2) You may use the same formula number for a superseding formula that you used for the formula the superseding formula replaces, but you must annotate the formula number to indicate it is a superseding formula number. (For example, “Formula 2, superseding.”)
(c) When you file a new or superseding formula with TTB, you must follow the procedures and other requirements of §§ 25.56 and 25.57.
§ 25.61   General requirements for notice.
(a) Establishment. Operations as a brewer may be conducted only by a person who has given notice as a brewer under this subpart. A person may not commence the business of a brewer until the appropriate TTB officer approves the brewery and the brewer's notice, including all documents made part of that notice.
(b) Brewer's Notice, Form 5130.10. Each person must, before commencing business as a brewer, give notice on Form 5130.10. Each person continuing business as a brewer as provided in § 25.71 must give notice on Form 5130.10. Each notice will be executed under penalties of perjury, and all written statements, affidavits, and other documents submitted in support of the notice will be made part of the notice.
(c) Additional information. The appropriate TTB officer may at any time require the brewer to furnish, as part of the notice, additional information which is necessary to protect and insure collection of the revenue.
§ 25.62   Data for notice.
(a) Required information. The brewer shall prepare the notice on Form 5130.10 and shall include the following information:
(1) Serial number.
(2) Purpose for which filed.
(3) Name and principal business address of the brewer and the location of the brewery if different from the business address.
(4) Statement of the type of business organization and of the persons interested in the business, supported by the information listed in § 25.66.
(5) Description of brewery, as specified in § 25.68.
(6) A list of trade names which the brewer intends to use in doing business or in packaging beer.
(7) [Reserved]
(8) The name and address of the owner of the land or buildings comprising the brewery, and of any mortgagee or other encumbrancer of the land or buildings comprising the brewery.
(9) The 24-hour cycle of operations at the brewery which is to be the brewer's business day.
(10) The process by which the brewer intends to render beer unfit for beverage use when beer is to be removed for use in manufacturing under §§ 25.191-25.192.
(11) Statement showing ownership or controlling interests in other breweries which will establish eligibility for the transfer of beer without payment of tax between breweries of the same ownership, as authorized in § 25.181.
(12) The date of the notice and the name and signature of the brewer or person authorized to sign on behalf of the brewer.
(13) A statement whether the brewer is required to furnish a bond under § 25.91.
(b) Incorporation by reference. If any of the information required by paragraph (a)(4) of this section is on file with a TTB office in connection with the qualification of any other premises operated by the brewer, that information, if accurate and complete, may be incorporated into the brewer's notice by reference.
§ 25.63   Notice of registration.
The Brewer's Notice, Form 5130.10, when approved by the appropriate TTB officer, will constitute the notice of registration of the brewery. The appropriate TTB officer will not approve the notice until the notice and all incorporated documents are complete, accurate, and in compliance with the requirements of this part. A person may not operate a brewery until the notice required by this subpart has been approved by the appropriate TTB officer.
§ 25.64   Maintenance of notice file.
The brewer shall maintain the approved Brewer's Notice, Form 5130.10, and all incorporated documents at the brewery premises, in complete and current condition, readily available for inspection by an appropriate TTB officer.
§ 25.65   Power of attorney.
The brewer shall execute and file a Form 1534 (5000.8) for each person authorized to sign or act on behalf of the brewer. The Form 1534 (5000.8) is not required for persons whose authority is furnished in the Brewer's Notice, Form 5130.10.
§ 25.66   Organizational documents.
The supporting information required by paragraph (a)(4) of § 25.62 includes, as applicable, the following:
(a) Corporate documents. (1) Corporate charter or a certificate of corporate existence or incorporation;
(2) List of directors and officers, showing their names and addresses;
(3) Extracts or digests of minutes of meetings of board of directors, authorizing certain individuals to sign for the corporation; and
(4) Statement showing the number of shares of stock or other evidence of ownership, authorized and outstanding, and the voting rights of the respective owners or holders.
(b) Articles of partnership. Copy of the articles of partnership or association, if any, or certificate of partnership or association if required to be filed by any State, county, or municipality.
(c) Statement of interest. (1) Names and addresses of all persons having 10 percent or more stock in the corporation, or other legal entity, and the nature and amount of the stockholding or other interest of each, whether the interest appears in the name of the interested party or in the name of another person. If a corporation is wholly owned or controlled by another corporation, those persons of the parent corporation who meet the above standards are considered to be the persons interested in the business of the subsidiary, and the names thereof need be furnished only upon request of the appropriate TTB officer; or
(2) In the case of an individual owner or partnership, the name and address of each person holding an interest in the brewery, whether the interest appears in the name of the interested party or in the name of another for that person.
(d) Availability of additional corporate documents. The originals of documents required to be submitted under this section, and additional documents such as the articles of incorporation, bylaws, and State certificates authorizing the brewer to operate in the State where located (if other than the State in which the brewery is incorporated) shall be made available to any appropriate TTB officer upon request. In the case of multiplant brewers, these documents may be made available at the brewer's home brewery. Each brewer's notice filed by multiplant brewers will state the location where these corporate documents may be inspected.
§ 25.67   [Reserved]
§ 25.68   Description of brewery.
(a) The Brewer's Notice, Form 5130.10, will include a description of (1) each tract of land comprising the brewery, and (2) a listing of each brewery building by its designated letter or number, giving the approximate ground dimensions and the purpose for which ordinarily used.
(b) The description of the land will be in sufficient detail to enable appropriate TTB officers to determine the boundaries of the brewery.
§ 25.71   Amended or superseding notices.
(a) Requirement for amended notice. (1) When there is a change with respect to the information shown in the Brewer's Notice, Form 5130.10, the brewer shall within 30 days of the change (except as otherwise provided in this subpart) submit an amended notice setting forth the new information. Changed notices will be submitted in skeleton form, with unchanged items marked “No change since Form 5130.10, Serial No. ______.”
(2) The appropriate TTB officer may require immediate filing of an amended Form 5130.10 if the accuracy of existing documents has been affected by any change.
(b) Requirement for superseding notice. (1) The appropriate TTB officer may require a brewer to file a new and complete notice, superseding those previously filed, in conjunction with the filing of a new bond. This superseding notice will become effective on the date of the brewer's bond or on the date of the brewer's bond continuation certificate.
(2) If the information required by § 25.62(a) (4), (5), (6), (7), (9), and (10) is on file as part of an approved Form 5130.10 and is current, the brewer may incorporate by reference those documents as part of any superseding notice.
§ 25.72   Change in proprietorship.
(a) General. If there is a change in the proprietorship of a brewery, the outgoing brewer shall comply with the requirements of § 25.85. The successor brewer shall, before beginning operations, qualify in the same manner as the proprietor of a new brewery. The successor brewer shall file a new notice and bond in his or her own name, except that the successor brewer is not required to file a bond if the brewer is exempt from bond requirements under § 25.91(e). Beer on hand may be transferred without payment of tax to the successor brewer and will be accounted for by that brewer.
(b) Fiduciary. (1) If the successor to the brewer is an administrator, executor, receiver, trustee, assignee or other fiduciary, the fiduciary may in lieu of filing a new notice and bond, file an amended notice and furnish a consent of surety extending the terms of the predecessor's bond or continuation certificate. A fiduciary is not required to furnish a consent of surety under this paragraph if the brewer is exempt from bond requirements under § 25.91(e).
(2) The fiduciary shall furnish the appropriate TTB officer a certified copy of the court order or other document showing qualification as fiduciary. The effective date of the qualifying documents filed by a fiduciary will be the same as the date of the order, or the date therein specified for the fiduciary to assume control. If the fiduciary was not appointed by the court, the date of the appointment will be the effective date of the qualifying documents filed by the fiduciary.
§ 25.73   Change in partnership.
(a) New notice required. The withdrawal of one or more members of a partnership or the taking in of a new partner, whether active or silent, constitutes a change in proprietorship. Unless exempted by paragraph (b) of this section, the death, bankruptcy or adjudicated insolvency of one or more partners results in a dissolution of the partnership and a change in proprietorship. The successor shall qualify the brewery in the same manner as the proprietor of a new brewery.
(b) Continuing partnership. A surviving partner or partners may continue to operate the brewery for purposes of liquidation and settlement under the following conditions:
(1) Under the laws of the State where the partnership was formed, the partnership is not terminated on death or insolvency of a partner(s); and
(2) Under the laws of the State where the partnership was formed, the surviving partner(s) has the exclusive right to control and possession of the partnership assets for the purpose of liquidation and settlement; and
(3) If the brewer has filed a bond, a consent of surety is filed in which the surety and the surviving partner(s) agree to remain liable on the bond.
(c) Settlement of partnership. If the surviving partner(s) acquires the business on completion of the settlement of the partnership, that partner(s) must qualify in his or her own name from the date of acquisition. The partner(s) must give a new brewer's notice on Form 5130.10 and a new bond on Form 5130.22, except that the partner(s) is not required to file a bond if the brewer is exempt from bond requirements under § 25.91(e).
§ 25.74   Change in stockholders.
Changes in the list of stockholders furnished under the provisions of § 25.66(c)(1) shall be submitted annually by the brewer on July 1 or on any other date approved by the appropriate TTB officer. When the sale or transfer of capital stock results in a change in the control or management of the business, notification of the change will be made within 30 days in accordance with § 25.71.
§ 25.75   Change in officers and directors.
When there is any change in the list of officers or directors furnished under the provisions of § 25.66(a)(4), the brewer shall submit, within 30 days of the change, an amended notice on Form 5130.10. If the brewer has shown to the satisfaction of the appropriate TTB officer that certain corporate officers listed on the original notice have no responsibilities in connection with the operations covered by the notice, the appropriate TTB officer may waive the requirements for submitting applications for amended notice to cover changes of those corporate officers. In the case of multiplant brewers, new brewers notices need not be filed for those breweries in which the lists of officers and directors are incorporated by reference in their brewer's notices under § 25.62(b).
§ 25.76   [Reserved]
§ 25.77   Change in location.
When there is a change in location of the brewery, the brewer shall file an amended form TTB F 5130.10, and also shall file a new bond on form TTB F 5130.22 as required under § 25.91 or a consent of surety on form TTB F 5000.18 as required under § 25.92, extending the terms of an existing bond or continuation certificate to cover operations at the new location.

 The brewer is not required to file a new bond or consent of surety if the brewer is exempt from bond requirements under § 25.91(e).
§ 25.78   Change in premises.
Except as authorized in § 25.81, when the brewery is to be extended or curtailed, the brewer shall file an amended Form 5130.10. The additional facilities covered by the extension may not be used for the proposed purposes, and the portion to be curtailed may not be used for other than the previously approved purposes, prior to approval of Form 5130.10.
§ 25.79   Change in bond status.
A brewer must file an amended Brewer's Notice, Form 5130.10, if the brewer's bond status changes because either:
(a) A brewer has not furnished any bond and has become required to furnish a bond as provided under § 25.95(b); or
(b) A brewer has furnished a bond, has become exempt from bond requirements under § 25.91(e), and chooses to terminate all bond coverage as provided under § 25.106.
§ 25.81   Alternation of brewery and bonded or taxpaid wine premises.
(a) General. A brewer operating a contiguous bonded winery or taxpaid wine bottling house may, as provided in this section, alternate the use of each premises by extension or curtailment.
(b) Qualifying documents. The brewer shall file and receive approval of the following qualifying documents:
(1) Form 5120.25 and Form 5130.10 to cover the curtailment and extension of the premises to be alternated.
(2) Special diagrams, in duplicate, delineating the brewery premises and the bonded or taxpaid wine premises as they will exist both during extension and curtailment. The diagrams will clearly depict all areas, buildings, floors, rooms, equipment and pipelines which are to be subject to alternation in their relative operating sequence.
(3) Evidence of existing bond, consent of surety, continuation certificate, or a new bond to cover the proposed alternation of premises, except to the extent no bond is required under § 24.146 of this chapter or § 25.91(e).
(c) Brewer's responsibility. After approval of qualifying documents, the brewer may alternate the designated premises pursuant to a letterhead notice submitted to the appropriate TTB officer. The notice will contain the information required by paragraph (d) of this section. Prior to the effective date and hour of the alternation, the brewer shall
(1) Remove all beer on brewery premises to be alternated to bonded or taxpaid wine premises, or
(2) Remove all wine from bonded to taxpaid wine premises to be alternated to brewery premises.
(d) Information for notice. The notice required by paragraph (c) of this section will contain the following information:
(1) Plant name and address;
(2) Serial number;
(3) Effective date and hour of proposed change;
(4) Whether premises are to be curtailed or extended;
(5) Purpose of curtailment or extension;
(6) Identification of the special diagram depicting the premises as they exist when curtailed or extended; and
(7) Date of execution and signature of brewer.
(e) Separation of premises. The appropriate TTB officer may require that the portion of brewery or bonded or taxpaid wine premises extended or curtailed under this section be separated, in a manner satisfactory to the appropriate TTB officer, from the remaining portion of the brewery or bonded or taxpaid premises.
§ 25.85   Notice of permanent discontinuance.
When a brewer desires to discontinue business permanently, he or she must file a notice on Form 5130.10. The brewer must state the purpose of the notice as “Discontinuance of business” and give the date of the discontinuance. When all beer has been lawfully disposed of, appropriate TTB officer will approve the Form 5130.10 and return a copy to the brewer. The brewer shall file a report on Form 5130.9 showing no beer or cereal beverage on hand and marked “Final Report.”
§ 25.91   Requirement for bond.
(a) General. Except as provided in paragraph (e) of this section, every person intending to commence the business of a brewer shall file a bond, Form 5130.22, as prescribed in this subpart, covering operations at the brewery, at the time of filing the original Brewer's Notice, Form 5130.10. Every brewer intending to continue the business of a brewer shall, once every 4 years, or as provided in § 25.95, execute and file a new bond, or continuation certificate as provided in § 25.97.
(b) Conditions of the bond. The Brewer's Bond, Form 5130.22, will be conditioned upon the brewer faithfully complying with all provisions of law and regulations relating to the activities covered by the bond, and upon paying all taxes imposed by 26 U.S.C. Chapter 51 and all interest and penalties incurred or fines imposed for violations of those provisions.
(c) Additional information. The appropriate TTB officer shall require, in connection with any brewer's bond, a statement executed under the penalties of perjury, as to whether the principal or any person owning, controlling, or actively participating in the management of the business of the principal has been convicted of or has compromised any offense set forth in § 25.101(a)(1), or has been convicted of any offense set forth in § 25.101(a)(2). In the event the above statement contains an affirmative answer, the applicant shall submit a statement describing in detail the circumstances surrounding the conviction or compromise.
(d) Bond required before beginning business. A person may not begin business or continue business as a brewer until first receiving notice that the appropriate TTB officer has approved the bond, continuation certificate, or consent of surety, as required by this part.
(e) Bond exemption. A brewer who pays tax on a deferred basis under § 25.164 is not required to provide a bond to cover operations and withdrawals of beer during any portion of a calendar year for which the brewer is eligible to use an annual or quarterly return period under § 25.164(c)(2) or (c)(3). A brewer is considered to be paying tax on a deferred basis for purposes of the preceding sentence even if the brewer does not pay tax during every return period as long as the brewer intends to pay tax in a future period. See §§ 25.62 and 25.79 for rules governing applying for this bond exemption. See § 25.95 for rules governing when an existing brewer who has not provided a bond under this paragraph must obtain bond coverage.
§ 25.92   Consent of surety.
A brewer may change the terms of any bond filed under this part by filing a consent of surety. Consents of surety will be executed on Form 5000.18 by the brewer and the surety on the bond, with the same formality and proof of authorization as required for the execution of a bond.
§ 25.93   Penal sum of bond.
(a) General. Except as provided in paragraph (a)(3) of this section, a brewer must furnish a bond of a penal sum as prescribed in this section.
(1) Brewers who pay taxes using semimonthly periods. In the case of a brewer who pays taxes using semimonthly return periods under § 25.164(c)(1), the penal sum of the brewers bond must be equal to 10 percent of the maximum amount of tax calculated at the rates prescribed by law which the brewer will become liable to pay during a calendar year during the period of the bond on beer:
(i) Removed for transfer to the brewery from other breweries owned by the same brewer;
(ii) Removed without payment of tax for export or for use as supplies on vessels and aircraft;
(iii) Removed without payment of tax for use in research, development, or testing; and
(iv) Removed for consumption or sale.
(2) Brewers who pay taxes using quarterly or annual return periods. In the case of a brewer who pays taxes using annual or quarterly return periods under § 25.164(c)(2) or (c)(3), the penal sum of the brewers bond is $1,000 and covers the beer described in paragraph (a)(1)(i)-(iv) of this section.
(3) Brewers who are exempt from bond requirements. This section does not apply to a brewer who is exempt from bond requirements under § 25.91(e).
(b) Concentrate. A brewer who concentrates beer under subpart R of this part shall calculate the penal sum of the bond by computing 10 percent of the amount of tax at the rates prescribed by law, on the maximum quantity of beer used in the production of concentrate during a calendar year. The brewer shall add this amount to the penal sum calculated under paragraph (a) of this section to determine the total penal sum of the brewer's bond.
(c) Maximum and minimum penal sums. The maximum penal sum of the bond (or total penal sum if original and strengthening bonds are filed) is not to exceed $150,000 when the tax on beer is to be prepaid, or $500,000 when the tax is to be deferred as provided in § 25.164. The minimum penal sum of a bond is $1,000.
§ 25.94   Strengthening bonds.
(a) Requirement. When the penal sum of the brewer's bond (calculated as provided in § 25.93) in effect is not sufficient, the principal may prepay the tax on beer as provided in subpart K of this part, or give a strengthening bond in sufficient penal sum if the surety is the same as on the bond in effect. If the surety is not the same, a new bond covering the entire liability is required.
(b) Restrictions. A strengthening bond may not in any way release a former bond or limit a bond to less than the full penal sum.
(c) Date of execution. Strengthening bonds will show the current date of execution and their effective date.
§ 25.95   Superseding bonds and new bonds for existing brewers.
(a) Superseding bonds. The appropriate TTB officer may at any time, at his or her discretion, require a new bond that supersedes the existing bond. A superseding bond is required immediately in the case of insolvency of a surety. Executors, administrators, assignees, receivers, trustees, or other persons acting in a fiduciary capacity must execute a superseding bond or obtain a consent of surety on all bonds in effect. When the interests of the Government so demand, or in any case when the security of the bond becomes impaired for any reason, the principal will be required to give a superseding bond. When a bond is found to be not acceptable by the appropriate TTB officer, the principal will be required immediately to obtain a satisfactory superseding bond or discontinue business.
(b) New bonds for existing brewers —(1) General. Subject to paragraph (b)(2) of this section, if an existing brewer has not furnished a bond covering operations and withdrawals of beer because the brewer was exempt from bond requirements under § 25.91(e), the brewer must furnish a bond as provided in this subpart beginning in any portion of a calendar year following the first date on which the aggregate amount of tax due from the brewer during the calendar year exceeds $50,000. When furnishing the bond, the brewer must also file an amended Brewer's Notice, Form 5130.10, as provided in § 25.79 to change the brewer's bond status.
(2) Grace period for new bonds for existing brewers —(i) Bonds covering operations. Except as provided in paragraph (b)(2)(ii) of this section, an existing brewer who must furnish a bond as provided in paragraph (b)(1) of this section will be treated as having furnished the required bond if the brewer submits the bond on Form 5130.22 no later than 30 days following the first date on which the aggregate amount of tax due from the brewer during the relevant calendar year exceeds $50,000. Except as provided in paragraph (b)(2)(ii) of this section, the brewer will be treated as having furnished the required bond for the purposes of this paragraph until TTB approves or disapproves the bond.
(ii) Bonds covering tax-deferred removals. The grace period specified in paragraph (b)(2)(i) of this section does not apply to beer removed for consumption or sale on deferred payment of tax. A brewer that must furnish a bond under paragraph (b)(1) of this section may not remove beer for consumption or sale on deferred payment of tax until TTB approves the bond.
§ 25.96   Superseding bond.
When the principal submits a new bond to supersede a bond or bonds in effect, the appropriate TTB officer, after approving the superseding bond, will issue a notice of termination for the superseded bond under the provisions of this subpart. Superseding bonds will show the current date of execution and their effective date.
§ 25.97   Continuation certificate.
If the contract of surety between the brewer and the surety on an expiring bond or continuation certificate is continued in force for a succeeding period of not less than 4 years from the expiration date of the bond or continuation certificate, the brewer may submit, in lieu of a new bond, a Brewer's Bond Continuation Certificate on Form 5130.23, executed under the penalties of perjury, by the brewer and the surety attesting to continuation of the bond. Each continuation certificate will constitute a bond and all provisions of law and regulations applicable to bonds on Form 5130.22 given under this part, including the disapproval of bonds, are applicable to continuation certificates.
§ 25.98   Surety or security.
(a) Bond coverage. Bonds required by this part will be given with corporate surety or collateral security.
(b) Corporate surety. Surety bonds may be given only with surety companies holding certificates of authority from the Secretary as acceptable sureties on Federal bonds, subject to the limitations set forth in the current revision of Treasury Department Circular 570, Companies Holding Certificates of Authority as Acceptable Sureties on Federal Bonds and as Acceptable Reinsuring Companies.
(c) Availability of Circular 570. Treasury Department Circular 570 is published in the Federal Register annually on the first business day in July, and supplemental changes are published periodically thereafter (see https://www.federalregister.gov ). The most recent circular and any supplemental changes to it may be viewed on the Bureau of the Fiscal Service website (see https://fiscal.treasury.gov ).
(d) More than one corporate surety. A bond may be executed by two or more corporate sureties. Each corporate surety may limit its liability in terms on the face of the bond in a specified amount. This amount may not exceed the limitations set forth for corporate security by the Secretary which are set forth in the current revision of Treasury Department Circular 570. The sum of the liabilities for the sureties will equal the required penal sum of the bond.
(e) Deposit of collateral securities in lieu of corporate surety. Bonds or notes of the United States, or other obligations which are unconditionally guaranteed as to both interest and principal by the United States, may be pledged and deposited by principals as collateral security in lieu of corporate surety in accordance with 31 CFR part 225.
(f) Bond guaranteed by deposit of cash or cash equivalent. As an alternative to the corporate surety bond under paragraph (b) of this section, a person can file a bond that guarantees payment of the liability by submitting cash or its equivalent (including a money order, cashier's check, or personal check). Cash or its equivalent must be no less than the penal sums of the required bonds. Bonds described in this paragraph will be released if there are no outstanding liabilities when the bond is terminated. Cash equivalents must be payable to the Alcohol and Tobacco Tax and Trade Bureau.
§ 25.99   Filing powers of attorney.
Each bond, continuation certificate, and each consent of surety will be accompanied by a power of attorney authorizing the agent or officer to execute the document. The power of attorney will be prepared on a form provided by the surety company and executed under the corporate seal of the company. If the power of attorney submitted is other than a manually signed original, it will be accompanied by a certificate of its validity.
§ 25.101   Disapproval of bonds or consents of surety.
(a) Reasons for disapproval. The appropriate TTB officer may disapprove a bond or consent of surety if the individual, firm, partnership, corporation, or association giving the bond or consent of surety, or if any of the above entities owning, controlling or actively participating in the management of a business giving a bond as a brewer, has been previously convicted in a court of competent jurisdiction of:
(1) Any fraudulent noncompliance with any provision of law of the United States if it related to internal revenue or customs taxation of distilled spirits, wines or beer, or if the offense shall have been compromised with the individual, firm, partnership, corporation, or association on payment of penalties or otherwise; or
(2) Any felony under a law of any State or the District of Columbia, or the United States, prohibiting the manufacture, sale, importation, or transportation of distilled spirits, wines, beer, or other intoxicating liquor.
(b) Appeal of disapproval. If the bond or consent of surety is disapproved, the person giving the bond or consent of surety may appeal the disapproval to the appropriate TTB officer, who will grant a hearing in the matter if requested by the applicant or brewer, and whose decision will be final.
§ 25.102   Termination of surety's liability.
The liability of a surety on a bond required by this part will be terminated only as to liability arising on or after:
(a) The effective date of a superseding bond;
(b) The date of approval of the discontinuance of business of the brewer;
(c) Following the giving of notice by the surety; or
(d) In the case of a brewer who applies to terminate a surety bond under § 25.106, the date that TTB approves the brewer's application under that section.
§ 25.103   Notice by surety for relief from liability under bond.
A surety may, at any time, in writing, notify the principal and the appropriate TTB officer that the surety desires after a specified date (not less than 60 days after the date of service on the principal) to be relieved of any liability under the bond which is incurred by the principal after the date named in the notice. The surety shall include proof of service of the notice on the principal with the notice filed with the appropriate TTB officer. The notice will become effective on the date named, unless the surety withdraws the notice, in writing. The surety on the bond remains liable under the bond with respect to any liability incurred by the principal while the bond is in effect.
§ 25.104   Termination of bonds.
(a) General. Brewer's bonds may be terminated as to liability for future removals or receipts under the following circumstances:
(1) Pursuant to application of the surety as provided in § 25.103;
(2) On approval of a superseding bond as provided in § 25.95;
(3) When a brewer discontinues business as provided in § 25.85; or
(4) When an existing brewer who becomes exempt from bond requirements terminates the bond as provided in § 25.106.
(b) Notification. On termination of the surety's liability under a bond, the appropriate TTB officer will notify the principal and sureties.
§ 25.105   Release of collateral security.
Bonds, notes, and other obligations of the United States, pledged and deposited as security in connection with bonds required by this part will be released in accordance with 31 CFR part 225. When the appropriate TTB officer determines there is no outstanding liability against the bond and that it is no longer necessary to hold the security, he or she shall fix the date or dates on which a part or all of the security will be released. At any time prior to the release of the security, the appropriate TTB officer may, for proper cause, extend the date of release of the security for an additional length of time as may be appropriate.
§ 25.106   Application to terminate bond by existing brewer who becomes exempt from bond requirements.
If a brewer has held a bond and becomes exempt from bond requirements under § 24.91(e), the brewer may apply to TTB to terminate the bond. To apply, the brewer must file an amendment to the Brewer's Notice, Form 5130.10, as provided in § 25.79. The brewer must accurately state in the submission to TTB that the brewer:
(a) Will withdraw beer for deferred payment of tax under § 25.164;
(b) Reasonably expects to be liable for not more than $50,000 in taxes with respect to beer imposed by 26 U.S.C. 5051 and 7652 for the current calendar year (see definition of “Reasonably expects” in § 25.164(c)(4)(ii)); and
(c) Was liable for not more than $50,000 in such taxes in the preceding calendar year.
§ 25.111   Definitions.
For purposes of this subpart, the following terms have the meanings indicated:
Dealer. A person who sells, or offers for sale, any alcohol product (distilled spirits, wines, and/or beer) fit for beverage use.
Retail dealer in liquors. A dealer who sells, or offers for sale, distilled spirits, wines, or beer to any person other than a dealer.
Wholesale dealer in liquors. A dealer who sells, or offers for sale, distilled spirits, wines, or beer to another dealer.
§ 25.112   Dealer registration.
Every brewer who sells, or offers for sale, any alcohol product (distilled spirits, wines, or beer) fit for beverage use must register as a dealer in accordance with part 31 of this chapter. However, the Brewer's Notice, TTB Form 5130.10, filed under subpart G of this part, and approval of that notice by the appropriate TTB officer, will constitute the brewer's registration as a dealer at the brewery. Every brewer registered as a dealer under this subpart will be classified as a wholesale dealer in liquors (see § 31.32 of this chapter) and as such may also operate as a retail dealer in liquors without additional registration. Registration covers all sales from the same location, including sales of wine, spirits, or other brewers' beer. As provided in § 31.52 of this chapter, the brewer is subject to no additional registration for making sales of wine or beer at the customer's place of business. Otherwise, a brewer who conducts business as a dealer at a location other than the brewery must register and keep records in accordance with part 31 of this chapter.
§ 25.113   Amending the dealer registration.
Every brewer registered as a dealer under this subpart must maintain a current and accurate Brewer's Notice, TTB Form 5130.10. Whenever there is a change to any of the information provided in the approved Brewer's Notice, the brewer must amend the notice within the time period specified in subpart G of this part. An amendment to the Brewer's Notice, Form 5130.10, will also serve as an amendment of the brewer's dealer registration under this subpart. The brewer's dealer registration will also terminate when brewery operations under the Brewer's Notice terminate.
§ 25.114   Dealer records.
Every dealer is required to maintain records of transactions. Beer transactions that appear in the records required by subpart U of this part will meet the brewer's recordkeeping requirements as a dealer. For other transactions not covered in the brewery records, such as retail sales of wine or distilled spirits in a restaurant at the brewery, or operations as a wholesale dealer in wine or distilled spirits, the brewer must keep the records specified for dealers in part 31 of this chapter.
§ 25.141   Barrels and kegs.
(a) General requirements. The brewer's name or trade name and the place of production (city and, if necessary for identification, State) shall be permanently marked on each barrel or keg. If the place of production is clearly shown on the bung or on the tap cover, or on a label securely affixed to each barrel or keg, the place of production need not be permanently marked on each barrel or keg. No statement as to payment of internal revenue taxes may be shown.
(b) Breweries of same ownership. (1) If two or more breweries are owned or operated by the same person, firm, or corporation (as defined in § 25.181), the place of production:
(i) May be shown as the only location on the bung, or on the tap cover, or on a separate label attached to the keg;
(ii) May be included in a listing of the locations of breweries qualified under this part if the place of production is not given less emphasis than any of the other locations; or
(iii) Need not be shown if the brewer's principal place of business is shown in lieu of any other location. The brewer's principal place of business will be the location of a brewery operated by the brewer and qualified under this part.
(2) If the location of two or more breweries is shown on the keg, bung, tap cover, or on a separate label attached to the keg (paragraph (b)(1)(ii)), or if the brewer's principal place of business is shown in lieu of the actual place of production (paragraph (b)(1)(iii)), the brewer shall indicate the actual place of production by printing, coding or other markings on the keg, bung, tap cover, or on a separate label attached to the keg. The coding system employed will permit an appropriate TTB officer to determine the place of production (including street address if two or more breweries are located in the same city) of the beer. The brewer must notify the appropriate TTB officer prior to employing a coding system.
(c) Label approval required. Labels or tap covers used by brewers shall be covered by certificates of label approval, Form 5100.31, when required by part 7 of this chapter.
§ 25.142   Bottles.
(a) Label requirements. Each bottle of beer shall show by label or otherwise the name or trade name of the brewer, the net contents of the bottle, the nature of the product such as beer, ale, porter, stout, etc., and the place of production (city and, when necessary for identification, State). No statement as to payment of internal revenue taxes may be shown.
(b) Breweries of same ownership. (1) If two or more breweries are owned or operated by the same person, firm, or corporation (as defined in § 25.181), the place of production:
(i) May be shown as the only location on the label;
(ii) May be included in a listing of the locations of breweries qualified under this part if the place of production is not given less emphasis than any of the other locations; or
(iii) Need not be shown if the brewer's principal place of business is shown in lieu of any other location. The brewer's principal place of business will be the location of a brewery operated by the brewer and qualified under this part.
(2) If the location of two or more breweries is shown on the label (paragraph (b)(1)(ii)), or if the brewer's principal place of business is shown on the label in lieu of the actual place of production (paragraph (b)(1)(iii)), the brewer shall indicate the actual place of production by printing, coding or other markings on the label, bottle, crown or lid. The coding system employed will permit an appropriate TTB officer to determine the place of production (including street address if two or more breweries are located in the same city) of the beer. The brewer must notify the appropriate TTB officer prior to employing a coding system.
(c) Distinctive names. If the brewer's name, trade name or brand name includes the name of a city which is not the place where the beer was produced, the appropriate TTB officer may require the brewer to state the actual place of production on the label.
(d) Tolerances. The statement of net contents shall indicate exactly the volume of beer within the bottle except for variations in measuring as may occur in filling conducted in compliance with good commercial practice. The barrel equivalent of bottles filled during a consecutive three month period, calculated on the basis of the brewer's fill test records, may not vary more than 0.5 percent from the barrel equivalent of bottles filled during the same period, calculated on the basis of the stated net contents of the bottles. The brewer is liable for the tax on the entire amount of beer removed, without benefit of tolerance, when the fill of bottles and cans exceeds the tolerance for the three month period, or when filling is not conducted in compliance with good commercial practice.
(e) Label approval required. Labels used by brewers shall be covered by certificates of label approval, Form 5100.31, when required by part 7 of this chapter.
(f) Short-fill bottles. A brewer may dispose of taxpaid short-fill bottles of beer to employees for their use but not for resale. These bottles need not be labeled, but if labeled they need not show an accurate statement of net contents.
§ 25.143   Cases.
(a) Brewer's name. The brewer's name or trade name will be shown on each case or other shipping container of bottled beer. A brewer may use unmarked cases to hold:
(1) Cartons of beer, if the visible portion of the cartons shows the required name; or
(2) Bottles or cans with plastic carriers, if the visible portion of the bottles or cans shows the required name.
(b) Other information. The brewer may show on a case or shipping container the place of production (city and, when necessary for identification, State), and the addresses of other breweries owned by the same person, firm, or corporation (as defined in § 25.181). If only one address is shown, it will be that of the producing brewery, or of the brewer's principal place of business.
§ 25.144   Rebranding barrels and kegs.
(a) A brewer may not use a barrel or keg which bears the name of more than one brewer, and except as provided in § 25.231, may not use a barrel or keg bearing the name of a brewer other than the producing brewer.
(b) A brewer who purchases or otherwise obtains barrels or kegs from another brewer shall permanently remove or durably cover the original marks and brands after notifying the appropriate TTB officer of the proposed action. A brewer may use the barrels or kegs obtained without removing or covering the original marks and brands if the brewer:
(1) Adopts a trade name substantially identical to the name appearing on the barrels or kegs; or
(2) Succeeds to a brewer who has discontinued business, in which case the brewer may add marks or brands, in accordance with § 25.141, which indicate ownership.
§ 25.145   Tanks, vehicles, and vessels.
(a) Each brewer who transfers beer to another brewery of the same ownership (as defined in § 25.181), or who exports beer without payment of tax, as provided in § 25.203, shall plainly and durably mark each tank, tank car, tank truck, tank ship, barge, or deep tank of a vessel in accordance with paragraph (b) of this section. These marks may be placed on a label securely affixed to the route board of the container.
(b) The brewer shall mark each container with—
(1) The designation “Beer”;
(2) The brewer's name;
(3) The address of the brewery from which removed;
(4) The address of the brewery to which transferred or the marks required for exportation in part 28 of this chapter, as applicable;
(5) The date of shipment; and
(6) The quantity, expressed in barrels.
§ 25.151   Rate of tax.
All beer, brewed or produced, and removed for consumption or sale, is subject to the tax prescribed by 26 U.S.C. 5051, for every barrel containing not more than 31 gallons, and at a like rate for any other quantity or for the fractional parts of a barrel as authorized in § 25.156.
§ 25.152   Reduced rate of tax for certain brewers.
(a) General. Section 5051(a)(2) of Title 26 U.S.C. provides for a reduced rate of tax on the first 60,000 barrels of beer removed for consumption or sale by a brewer during a calendar year. To be eligible to pay the reduced rate of tax, a brewer:
(1) Shall brew or produce the beer at a qualified brewery in the United States;
(2) May not produce more than 2,000,000 barrels of beer per calendar year; and
(3) May not be a member of a “controlled group” of brewers whose members together produce more than 2,000,000 barrels of beer per calendar year.
(b) Definitions. For the purpose of determining eligibility for payment of the reduced rate of tax on beer, terms have the following meanings:
(1) Controlled group. A related group of brewers as defined in 26 U.S.C. 5051(a)(2)(B). Controlled groups include, but are not limited to:
(i) Parent-subsidiary controlled groups as defined in 26 CFR 1.1563-1(a)(2);
(ii) Brother-sister controlled groups as defined in 26 CFR 1.1563-1(a)(3); and
(iii) Combined groups as defined in 26 CFR 1.1563-1(a)(4). Stock ownership in a corporation need not be direct and 51% constructive ownership, defined in 26 CFR 1.1563-3, may be acquired through:
(A) An option to purchase stock;
(B) Attribution from partnerships;
(C) Attribution from estate or trusts;
(D) Attribution from corporations; or
(E) Ownership by spouses, children, grandchildren, parents, and grandparents.
(2) Production of beer. The production of beer as recorded in the brewer's daily records and reported in the Brewer's Report of Operations, Form 5130.9. For the purpose of determining compliance with the 2,000,000 barrel limitation, production of beer by a brewer or a controlled group of brewers includes both beer produced at qualified breweries within the United States and beer produced outside the United States.
(c) Brewers operating more than one brewery. Brewers who operate more than one brewery shall include the combined production of beer at all their breweries when determining eligibility under the 2,000,000 barrel limitation. The reduced rate of tax applies to the first 60,000 barrels of beer removed for consumption or sale in a calendar year by the brewer; the brewer shall apportion the 60,000 barrels among the breweries in the manner described in the notice as provided by § 25.167(b)(3).
(d) Controlled groups of brewers. Members of a controlled group of brewers shall include the combined production of beer by all member brewers when determining eligibility under the 2,000,000 limitation. The reduced rate of tax applies to the first 60,000 barrels of beer removed for consumption or sale in a calendar year by the controlled group of brewers; the controlled group of brewers shall apportion the 60,000 barrels among member brewers in the manner described in each brewer's notice as provided by § 25.167(b)(3).
§ 25.153   Persons liable for tax.
The tax imposed by law on beer (including beer purchased or procured by one brewer from another) shall be paid by the brewer of the beer at the brewery where produced. The tax on beer transferred to a brewery from other breweries owned by the same brewer in accordance with subpart L of this part shall be paid by the brewer at the brewery from which the beer is removed for consumption or sale.
§ 25.155   Types of containers.
Beer may be removed from a brewery for consumption or sale only in barrels, kegs, bottles, and similar containers, as provided in this part. A container which the appropriate TTB officer determines to be similar to a bottle or can will be treated as a bottle for purposes of this part. A container which the appropriate TTB officer determines to be similar to a barrel or keg and which conforms to one of the sizes prescribed for barrels or kegs in § 25.156 will be treated as such for purposes of this part.
§ 25.156   Determination of tax on keg beer.
(a) In determining the tax on beer removed in kegs, a barrel is regarded as a quantity of not more than 31 gallons. The authorized fractional parts of a barrel are whole barrels, halves, thirds, quarters, sixths, and eighths, and beer may be removed in kegs rated at those capacities. The following keg sizes are also authorized at the stated barrel equivalents:
(b) If any barrel or authorized size keg contains a quantity of beer more than 2 percent in excess of its rated capacity, tax will be determined and paid on the actual quantity of beer (without benefit of any tolerance) contained in the keg.
(c) The quantities of keg beer removed subject to tax will be computed to 5 decimal places. The sum of the quantities computed for any one day will be rounded to 2 decimal places and the tax will be calculated and paid on the rounded sum.
§ 25.157   Determination of tax on bottled beer.
The quantities of bottled beer removed subject to tax shall be computed to 5 decimal places in accordance with the table and instructions in § 25.158. The sum of the quantities computed for any one day will be rounded to 2 decimal places and the tax will be calculated and paid on the rounded sum.
§ 25.158   Tax computation for bottled beer.
Barrel equivalents for various case sizes are as follows:
(a) For U.S. measure bottles.
(b) For metric measure bottles.
(c) For other case sizes. If beer is to be removed in cases or bottles of sizes other than those listed in the above tables, the brewer shall notify the appropriate TTB officer in advance and request to be advised of the fractional barrel equivalent applicable to the proposed case size.
§ 25.159   Time of tax determination and payment; offsets.
(a) Time and payment. The tax on beer will be determined at the time of its removal for consumption or sale, and will be paid by return as provided in this part.
(b) Offsets. During any business day, the quantity of beer returned to the same brewery from which removed is to be taken as an offset against or deducted from the total quantity of beer removed for consumption or sale from that brewery on the day that the beer is returned.
(c) Offsets not allowed. An offset or deduction for returned beer will not be allowed if:
(1) The brewer was indemnified by insurance or otherwise in respect of the tax; or
(2) The brewer does not issue credit to the customer for the tax on the returned beer within 30 days of the return of the beer. If the tax is not timely credited after the offset or deduction is taken, the brewer shall make an increasing adjustment on the next tax return.
§ 25.160   Tax adjustment for brewers who produce more than 2,000,000 barrels of beer.
Each brewer who has paid tax on beer by return, Form 5000.24, at the reduced rate of tax during a calendar year, but whose production (or the production of a controlled group of brewers of which the brewer is a member) exceeds 2,000.000 barrels of beer in that calendar year, is no longer eligible to pay tax on beer at the reduced rate of tax for any beer removed that calendar year for consumption or sale. The brewer shall make a tax adjustment for the payment of additional tax no later than the return period in which production (or the production of a controlled group of brewers of which the brewer is a member) exceeds 2,000,000 barrels of beer. The adjustment will be determined by multiplying the difference between the higher and lower rates of tax applicable to beer by the number of barrels removed by the brewer that year at the reduced rate of tax. The brewer shall make tax adjustments for all breweries where tax was paid at the lower rate that year, and shall include interest payable from the date on which tax was paid at the lower rate. In the case of a controlled group of brewers whose production exceeds 2,000,000 barrels of beer, all member brewers who paid tax at the lower rate shall make tax adjustments as determined in this section.
§ 25.163   Method of tax payment.
A brewer shall pay the tax on beer by return on TTB F 5000.24, as provided in §§ 25.164, 25.164a, 25.173, and 25.175. In paying the tax, a fractional part of a cent will be disregarded unless it amounts to one-half cent or more, in which case it will be increased to one cent.
§ 25.164   Deferred payment return periods—annual, quarterly, and semimonthly.
(a) Requirement for filing. This section governs payment of tax on a deferred basis. Each brewer must pay the tax on beer (unless prepaid) by return on Form 5000.24. The brewer must file Form 5000.24 as a return regardless of whether tax has been prepaid as provided in § 25.175 during the return period. The brewer must file a return on Form 5000.24 for each return period even though no beer was removed for consumption or sale.
(b) Payment of tax. The brewer must include for payment with the return the full amount of tax required to be determined (and which has not been prepaid) on all beer removed for consumption or sale during the period covered by the return.
(c) Return periods —(1) Semimonthly return period. Except in the case of a taxpayer who qualifies for annual or quarterly return periods as provided in paragraphs (c)(2) or (c)(3) of this section, all taxpayers must use semimonthly return periods for deferred payment of tax. The semimonthly return periods run from the brewer's business day beginning on the first day of each month through the brewer's business day beginning on the 15th day of that month, and from the brewer's business day beginning on the 16th day of the month through the brewer's business day beginning on the last day of the month, except as otherwise provided in § 25.164a.
(2) Annual return period. Subject to paragraph (b)(4) of this section, a taxpayer who reasonably expects to be liable for not more than $1,000 in taxes with respect to beer imposed by 26 U.S.C. 5051 and 7652 in the current calendar year, and that was liable for not more than $1,000 in such taxes in the preceding calendar year, may choose to use an annual return period. However, the taxpayer may not use the annual return period procedure for any portion of the calendar year following the first date on which the aggregate amount of tax due from the taxpayer during the calendar year exceeds $1,000, and any tax which has not been paid on that date will be due on the 14th day after the last day of the quarterly or semimonthly period in which that date occurs.
(3) Quarterly return period. A taxpayer may choose to use a quarterly return period if the taxpayer was not liable for more than $50,000 in taxes with respect to beer imposed by 26 U.S.C. 5051 and 7652 in the preceding calendar year and if that taxpayer reasonably expects to be liable for not more than $50,000 in such taxes during the current calendar year. In such a case the last day for paying the tax and filing the return will be the 14th day after the last day of the calendar quarter. However, the taxpayer may not use the quarterly return period procedure for any portion of the calendar year following the first date on which the aggregate amount of tax due from the taxpayer during the calendar year exceeds $50,000, and any tax that has not been paid on that date will be due on the 14th day after the last day of the semimonthly period in which that date occurs.
(4) Additional rules for annual and quarterly return periods. The following additional rules apply to the annual and quarterly return period procedure under this section:
(i) A “taxpayer” is an individual, corporation, partnership, or other entity that is assigned a single Employer Identification Number as defined in 26 CFR 301.7701-12;
(ii) “Reasonably expects” means that there is no existing or anticipated circumstance known to the taxpayer (such as an increase in production capacity) that would cause the taxpayer's tax liability to exceed the prescribed limit;
(iii) A taxpayer with multiple locations must combine the beer tax liability for all locations to determine eligibility for the return procedures;
(iv) A taxpayer who has both domestic operations and import transactions must combine the beer tax liability on the domestic operations and the imports to determine eligibility for the return procedures;
(v) The controlled group rules of 26 U.S.C. 5061(e), which concern treatment of controlled groups as one taxpayer, do not apply for purposes of determining eligibility for the return procedures. However, a taxpayer who is eligible for the return procedures, and who is a member of a controlled group that owes $5 million or more in beer excise taxes per year, is required to pay taxes by electronic fund transfer (EFT). Payments via EFT must be transmitted in accordance with section 5061(e);
(vi) A new taxpayer is eligible to use the return procedures in the first year of business simply if the taxpayer reasonably expects to be liable for not more than $1,000 (in the case of the annual return procedure) or $50,000 (in the case of the quarterly return procedure) in beer taxes during that calendar year; and
(vii) If a taxpayer becomes ineligible to use a return procedure prescribed in paragraph (c)(2) or (c)(3) of this section because the taxpayer's liability exceeds $1,000 or $50,000, respectively, during a taxable year, that taxpayer may resume using that return procedure only after a full calendar year has passed during which the taxpayer's liability did not exceed $1,000 or $50,000, as the case may be. A taxpayer may not use an annual or quarterly return procedure during any calendar year in which the taxpayer reasonably expects to be liable for more than $1,000, in the case of the annual return procedure, or $50,000, in the case of the quarterly return procedure, in beer taxes.
(d) Time for filing returns and paying tax. Except as otherwise provided in § 25.164a for semimonthly tax returns, the brewer must file the tax return, TTB F 5000.24, for each return period, and make remittance as required by this section, not later than the 14th day after the last day of the return period. If the due date falls on a Saturday, Sunday, or legal holiday, the return and remittance are due on the immediately preceding day that is not a Saturday, Sunday, or legal holiday, except as otherwise provided in § 25.164a(c).
(e) Timely filing. (1) When the brewer sends the semimonthly, quarterly, or annual tax return, Form 5000.24, by U.S. mail, in accordance with the instructions on the form, as required by this section, with remittance as provided for in this section, or without remittance as provided for in § 25.165, the date of the official postmark of the United States Postal Service stamped on the cover in which the return and remittance were mailed is considered the date of delivery of the return and the date of delivery of the remittance, if enclosed with the return. When the postmark on the cover is illegible, the burden is on the brewer to prove when the postmark was made.
(2) When the brewer sends the semimonthly, quarterly, or annual return with or without remittance by registered mail or by certified mail, the date of registry or the date of the postmark on the sender's receipt of certified mail will be treated as the date of delivery of the return and of the remittance, if enclosed with the return.
§ 25.164a   Special September rule for taxes due by semimonthly return.
(a) Division of second semimonthly period. (1) General. Except as otherwise provided in paragraph (a)(2) of this section, the second semimonthly period for the month of September is divided into two payment periods, from the 16th day through the 26th day, and from the 27th day through the 30th day. The brewer shall file a return, TTB F 5000.24, and make remittance, for the period September 16-26, no later than September 29. The brewer shall file a return on TTB F 5000.24, and make remittance, for the period September 27-30, no later than October 14.
(2) Taxpayment not by electronic fund transfer. In the case of taxes for which remittance by electronic fund transfer (EFT) is not required by § 25.165, the second semimonthly period of September is divided into two payment periods, from the 16th day through the 25th day, and from the 26th day through the 30th day. The brewer shall file a return on TTB F 5000.24, and make remittance, for the period September 16-25, no later than September 28. The brewer shall file a return on TTB F 5000.24, and make remittance, for the period September 26-30, no later than October 14.
(b) Amount of payment—Safe harbor rule. (1) General. Taxpayers are considered to have met the requirements of paragraph (a)(1) of this section if the amount paid no later than September 29 is not less than 11/15ths (73.3 percent) of the tax liability incurred for the semimonthly period beginning on September 1 and ending on September 15, and if any underpayment of tax is paid by October 14.
(2) Taxpayment not by EFT. Taxpayers are considered to have met the requirements of paragraph (a)(2) of this section if the amount paid no later than September 28 is not less than 2/3rds (66.7 percent) of the tax liability incurred for the semimonthly period beginning on September 1 and ending on September 15, and if any underpayment of tax is paid by October 14.
(c) Weekends and holidays. If the required taxpayment due date for the period September 16-25 or September 16-26, as applicable, falls on a Saturday or legal holiday, the return and remittance are due on the immediately preceding day. If the required due date falls on a Sunday, the return and remittance are due on the immediately following day.
(d) Example: Payment of tax for the month of September. (1) Facts. X, a brewer required to pay taxes by electronic fund transfer, incurred tax liability in the amount of $30,000 for the first semimonthly period of September. For the period September 16-26, X incurred tax liability in the amount of $45,000, and for the period September 27-30, X incurred tax liability in the amount of $2,000.
(2) Payment requirement. X's payment of tax in the amount of $30,000 for the first semimonthly period of September is due no later than September 29 (§ 25.164(d)). X's payment of tax for the period September 16-26 is also due no later than September 29 (§ 25.164a(a)(1)). X may use the safe harbor rule to determine the amount of payment due for the period of September 16-26 (§ 25.164a(b)). Under the safe harbor rule, X's payment of tax must not be less than $21,990.00, that is, 11/15ths of the tax liability incurred during the first semimonthly period of September. Additionally, X must pay the tax in the amount of $2,000 for the period September 27-30 no later than October 14 (§ 25.164a(a)(1)). X must also pay the underpayment of tax, $23,010.00, for the period September 16-26, no later than October 14 (§ 25.164a(b)).
§ 25.165   Payment of tax by electronic fund transfer.
(a) Eligible brewers. (1) Each taxpayer who was liable, during a calendar year, for a gross amount equal to or exceeding five million dollars in beer taxes combining tax liabilities incurred under this part and parts 26 and 27 of this chapter, shall use a commercial bank in making payment by electronic fund transfer (EFT) of beer taxes during the succeeding calendar year. Payment of beer taxes by cash, check, or money order, as described in § 25.163, is not authorized for a taxpayer who is required by this section to make remittances by EFT. For purposes of this section, the dollar amount of tax liability is defined as the gross tax liability on all taxable removals, determined in accordance with § 25.159, and importations (including beer brought into the United States from Puerto Rico or the Virgin Islands) during the calendar year, without regard to any drawbacks, credits, or refunds, for all premises from which such activities are conducted by the taxpayer. Overpayments are not taken into account in summarizing the gross tax liability.
(2) For the purposes of this section, a taxpayer includes a controlled group of corporations, as defined in 26 U.S.C. 1563, and implementing regulations in 26 CFR 1.1563-1 through 1.1563-4, except that the words “at least 80 percent” shall be replaced by the words “more than 50 percent” in each place it appears in subsection (a) of 26 U.S.C. 1563, as well as in the implementing regulations. Also, the rules for a “controlled group of corporations” apply in a similar fashion to groups which include partnerships and/or sole proprietorships. If one entity maintains more than 50% control over a group consisting of corporations and one, or more, partnerships and/or sole proprietorships, all of the members of the controlled group are one taxpayer for the purpose of determining who is required to make remittances by EFT.
(3) A taxpayer who is required by this section to make remittances by EFT shall make a separate EFT remittance and file a separate return, Form 5000.24, for each brewery from which beer is removed upon determination of tax.
(b) Requirements. (1) On or before January 10 of each calendar year, except for a taxpayer already remitting the tax by EFT, each taxpayer who was liable for a gross amount equal to or exceeding five million dollars in beer taxes combining tax liabilities incurred under this part and parts 26 and 27 of this chapter, during the previous calendar year, shall notify, in writing the appropriate TTB officer. The notice shall be an agreement to make remittances by EFT.
(2) For each return filed in accordance with this part, the taxpayer shall direct the taxpayer's bank to make an electronic fund transfer in the amount of the taxpayment to the Treasury Account as provided in paragraph (e) of this section. The request shall be made to the bank early enough for the transfer to be made to the Treasury Account by no later than the close of business on the last day for filing the return, prescribed in §§ 25.164 or 25.175. The request shall take into account any time limit established by the bank.
(3) If a taxpayer was liable for less than five million dollars in beer taxes during the preceding calendar year, combining tax liabilities incurred under this part and parts 26 and 27 of this chapter, the taxpayer may choose either to continue remitting the tax as provided in this section or to remit the tax with the return as prescribed by § 25.164. Upon filing the first return on which the taxpayer chooses to discontinue remitting the tax by EFT and to begin remitting the tax with the tax return, the taxpayer shall notify the appropriate TTB officer by attaching a written notification to Form 5000.24, stating that no taxes are due by EFT because the tax liability during the preceding calendar year was less than five million dollars, and that the remittance will be filed with the tax return.
(c) Remittance. (1) Each taxpayer shall show on the return, Form 5000.24, information about remitting the tax for that return by EFT and shall file the return with TTB, in accordance with the instructions on Form 5000.24.
(2) Remittances shall be considered as made when the taxpayment by electronic fund transfer is received by the Treasury Account. For purposes of this section, a taxpayment by electronic fund transfer shall be considered as received by the Treasury Account when it is paid to a Federal Reserve Bank.
(3) When the taxpayer directs the bank to effect an electronic fund transfer message as required by paragraph (b)(2) of this section, any transfer data record furnished to the taxpayer, through normal banking procedures, will serve as the record of payment, and will be retained as part of required records.
(d) Failure to make a taxpayment by EFT. The taxpayer is subject to a penalty imposed by 26 U.S.C. 5684, 6651, or 6656, as applicable, for failure to make a taxpayment by EFT on or before the close of business on the prescribed last day for filing.
(e) Procedure. Upon the notification required under paragraph (b)(1) of this section, the appropriate TTB officer will issue to the taxpayer a TTB Procedure entitled “Payment of Tax by Electronic Fund Transfer.” This publication outlines the procedure a taxpayer is to follow when preparing returns and EFT remittances in accordance with this part. U.S. Customs and Border Protection (CBP) will provide the taxpayer with instructions for preparing EFT remittances for payments to be made to CBP.
§ 25.166   Payment of reduced rate of tax.
(a) By return, Form 5000.24. A brewer who is eligible to pay the reduced rate of tax on beer may, upon filing the notice required by § 25.167, pay the reduced rate of tax on beer by return for deferred payment of tax as provided in § 25.164 or by prepayment return as provided in § 25.175. Payment of reduced rate of tax on beer by return, Form 5000.24, may commence with any tax return filed during a calendar year and will continue until the brewer has taxpaid 60,000 barrels of beer at the lower rate of tax, or taxpaid the number of barrels of beer apportioned under § 25.167(b)(3) for that calendar year.
(b) By claim for refund of tax. A brewer, eligible to pay the reduced rate of tax on beer during a calendar year, but who has not paid the reduced rate of tax by return during that year, may file a claim using form TTB F 5620.8, for refund of tax excessively paid on beer during that year. Claims for refund of tax will be filed as provided in § 25.285.
§ 25.167   Notice of brewer to pay reduced rate of tax.
(a) Requirement to file notice. Every brewer who desires to pay the reduced rate of tax on beer authorized by 26 U.S.C. 5051(a)(2) by tax return, Form 5000.24, shall prepare a notice containing the information required by paragraph (b) of this section. The brewer shall file this notice with the appropriate TTB officer for the first return period (or prepayment return) during which the brewer pays tax on beer at the reduced rate. The brewer shall file the notice each year in which payment of the reduced rate of tax on beer is made by return.
(b) Information to be furnished. Each notice described in paragraph (a) of this section will contain the following information:
(1) A statement that the brewer will not or is not likely to produce more than 2,000,000 barrels of beer in the calendar year for which the notice is filed.
(2) A statement that the brewer is not a member of a controlled group of brewers, or if the brewer is a member of a controlled group of brewers, a statement that the controlled group will not or is not likely to produce more than 2,000,000 barrels of beer in the calendar year for which the notice is filed.
(3) If the brewer operates more than one brewery, a statement of the locations of all the breweries and a statement of how the 60,000 barrel limitation for the reduced rate of tax will be apportioned among the breweries. If the brewer is a member of a controlled group of brewers, a statement of the names and locations of all other brewers in the group and a statement of how the 60,000 barrels limitation will be apportioned among the brewers in the group.
(c) Perjury statement. Each notice described in this section will be executed by the brewer under penalties of perjury as defined in § 25.11.
§ 25.168   Employer identification number.
The employer identification number (defined at 26 CFR 301.7701-12) of the taxpayer who has been assigned the number will be shown on each return on Form 5000.24, filed under this part. Failure of the taxpayer to include the employer identification number on Form 5000.24 may result in imposition of the penalty specified in § 70.113 of this chapter. A brewer shall apply for an employer identification number on IRS Form SS-4 as provided in § 25.169.
§ 25.169   Application for employer identification number.
(a) Form SS-4. The taxpayer must obtain an employer identification number (EIN) by filing an application with the Internal Revenue Service (IRS) on IRS Form SS-4. Form SS-4 is available from the local IRS Service Center, from the IRS District Director, the IRS Web site at https://www.irs.gov or from TTB's National Revenue Center. The taxpayer may file this form with IRS by mail, telephone, or fax by following the instructions on the form.
(b) Time limit. If the taxpayer has not already received, or applied for, an EIN at the time that the first return on TTB Form 5000.24, Excise Tax Return, is filed, the taxpayer must apply for an EIN not later than seven days from the date of filing the Form 5000.24.
(c) One EIN only. Each taxpayer must obtain and use only one EIN, regardless of the number of places of business for which the proprietor is required to file a tax return under this subpart.
§ 25.173   Brewer in default.
(a) When a remittance in payment of taxes on beer is not paid upon presentment of check or money order tendered, or when the brewer is otherwise in default in payment of tax under § 25.164, beer may not be removed for consumption or sale or taken from the brewery for consumption or sale until the tax has been prepaid as provided in § 25.175. The brewer shall continue to prepay while in default and thereafter until the appropriate TTB officer finds the revenue will not be jeopardized by deferred payment of tax as provided in § 25.164.
(b) Any remittance made while the brewer is required to prepay under this section will be in cash or in the form of a certified, cashier's or treasurer's check drawn on any bank or trust company incorporated under the laws of the United States, or under the law of any State, Territory, or possession of the United States, or in the form of a money order as provided in § 70.61 of this chapter (payment by check or money order), or will be made in the form of an electronic fund transfer as provided by §§ 25.164 and 25.165.
§ 25.174   Bond not sufficient.
When a brewer has filed a bond and the penal sum of the brewer's bond is in less than the maximum amount, the brewer shall prepay the tax on any withdrawal which would cause the outstanding liability for tax to exceed the limits of coverage of the bond. Prepayments will be made in accordance with § 25.175.
§ 25.175   Prepayment of tax.
(a) General. When a brewer has filed a bond and a brewer is required to prepay tax under § 25.173, or if the penal sum of the bond, Form 5130.22, is insufficient for deferral of payment of tax on beer to be removed for consumption or sale, or if a brewer is not entitled to defer the tax under the provisions of this subpart, the brewer shall prepay the tax before any beer is removed for consumption or sale, or taken out of the brewery for removal for consumption or sale.
(b) Method of prepayment. (1) Prepayment will be made by forwarding a tax return, Form 5000.24, with remittance, covering the tax on beer.
(2) If a brewer is required by § 25.165 to make payment of tax by electronic fund transfer, the brewer shall prepay the tax before any beer can be removed for consumption or sale by completing the return and by forwarding it, in accordance with the instructions on the form. At the same time, the brewer shall direct his or her bank to make remittance by EFT.
(3) For the purpose of complying with this section, the term forwarding means depositing in the U.S. mail, properly addressed in accordance with the instructions on the form.
§ 25.177   Evasion of or failure to pay tax; failure to file a tax return.
Sections 5671, 5673, 5684, 6651, and 6656 of Title 26 United States Code provide penalties for evasion or failure to pay tax on beer or for failure to file a tax return.
§ 25.181   Eligibility.
A brewer may remove beer without payment of tax for transfer to any other brewery of the same ownership. These removals include a removal from a brewery owned by one corporation to a brewery owned by another corporation if (a) one corporation owns the controlling interest in the other corporation, or (b) the controlling interest in each corporation is owned by the same person. Beer removed under this section may, while in transit, be reconsigned to another brewery of the same ownership or be returned to the shipping brewery.
§ 25.182   Kinds of containers.
A brewer may transfer beer without payment of tax from one brewery to another brewery belonging to the same brewer (a) in the brewer's packages or (b) in bulk containers, subject to limitations and conditions as may be imposed by the appropriate TTB officer. The brewer shall mark, brand or label containers as provided by subpart J of this part.
§ 25.183   Determination of quantity transferred.
The shipping brewer shall determine the quantity of beer shipped at the time of removal from the consignor brewery, and the receiving brewer shall determine the quantity of beer received at the time of receipt at the consignee brewery. The brewer shall equip the consignor and consignee breweries with suitable measuring devices to allow accurate determination of the quantities of beer to be shipped and received in bulk conveyances.
§ 25.184   Losses in transit.
(a) Liability for losses. The brewery to which beer is transferred is liable for the tax on beer lost in transit. If beer is reconsigned while in transit or returned to the shipping brewery, the brewery to which the beer is reconsigned or returned is liable for the tax on beer lost in transit.
(b) Losses allowable without claim. If loss of beer being transferred does not exceed two percent of the quantity shipped, the brewer is not required to file a report of loss or a claim for allowance of the loss if there are no circumstances indicating that the beer, or any portion of the beer lost, was stolen or otherwise diverted to an unlawful purpose.
(c) Losses requiring claim. If loss of beer during transit exceeds two percent of the quantity shipped, the brewer shall submit a claim under penalties of perjury for remission of the tax on the entire loss. The brewer shall prepare and submit the claim as provided in § 25.286.
(d) Losses requiring immediate report. The brewer shall report to the appropriate TTB officer a loss by fire, theft, casualty or any other unusual loss as soon as it becomes known.
§ 25.185   Mingling.
Beer transferred without payment of tax from one brewery to another brewery belonging to the same brewer may be mingled with beer of the receiving brewery. The brewer may handle the beer transferred in accordance with the requirements of this part relating to beer produced in the receiving brewery.
§ 25.186   Record of beer transferred.
(a) Preparation of invoice. When beer is transferred between breweries without payment of tax, the shipping brewer shall prepare a serially numbered invoice or commercial record, in duplicate, covering the transfer. The invoice will be marked “transfer without payment of tax” and will contain the following information:
(1) Name and address of shipping brewer;
(2) Date of shipment;
(3) Name and address of receiving brewer;
(4) For cases, the number and size of cases and the total barrels;
(5) For kegs, the number and size of kegs and the total barrels;
(6) For shipments in bulk containers, the type of container, identity of the container and the total barrels.
(b) Reconsignment of beer. When beer is reconsigned in transit to another brewery of the same ownership, the shipping brewer shall (1) prepare a new invoice showing reconsignment to another brewery and shall void all copies of the original invoice, or (2) shall mark all copies of the original invoice with the words “Reconsigned to ______,” followed by the name and address of the brewery to which the beer is reconsigned.
(c) Disposition of invoice. On shipment of the beer, the shipping brewer shall send the original copy of the invoice to the receiving brewer, and shall retain the other copy for the brewery records. On receipt of the beer, the receiving brewer (including a brewer to whom beer was returned or reconsigned in transit) shall note on the invoice any discrepancies in the beer received, and retain the invoice in the brewery records.
(d) Preparation of records and report. The shipping brewer shall use the invoice showing beer removed to another brewery without payment of tax in preparing daily records under § 25.292 and in preparing the Brewer's Report of Operations, Form 5130.9. The receiving brewer (including a brewer to whom beer was returned or reconsigned in transit) shall use the invoice showing beer received from another brewery without payment of tax in preparing daily records under § 25.292 and in preparing the Brewer's Report of Operations, Form 5130.9.
§ 25.191   General.
A brewer may remove sour or damaged beer, or beer which the brewer has deliberately rendered unfit for beverage use, from the brewery without payment of tax for use in manufacturing. Unfit beer may be removed under this section for use as distilling material at alcohol fuel plants qualified under subpart X of part 19 of this chapter.
§ 25.192   Removal of sour or damaged beer.
(a) Containers. The brewer shall remove sour or damaged beer (1) in casks or other packages, containing not less than one barrel each and unlike those ordinarily used for packaging beer, or (2) in tanks, tank cars, tank trucks, tank ships, barges, or deep tanks of a vessel. The brewer shall mark the nature of the contents on each container.
(b) Beer meter. The brewer shall remove sour or damaged beer without passing it through the meter (if any) or racking machine.
(c) Records and reports. The brewer shall record the removal of sour or damaged beer in daily records under § 25.292 and on the Brewer's Report of Operations, Form 5130.9.
§ 25.195   Removals for analysis.
A brewer may remove beer, without payment of tax, to a laboratory for analysis to determine the character or quality of the product. Beer may be removed for analysis in packages or in bulk containers. The brewer shall record beer removed for analysis in daily records under § 25.292 and on the Brewer's Report of Operations, Form 5130.9.
§ 25.196   Removals for research, development or testing.
(a) A brewer may remove beer, without payment of tax, for use in research, development, or testing (other than consumer testing or other market analysis) of processes, systems, materials, or equipment relating to beer or brewery operations. Beer may be removed for research, development or testing in packages or in bulk containers.
(b) The brewer shall mark each barrel, keg, case, or shipping container with the name and address of the brewer and of the consignee, the identity of the product, and the quantity of the product. If necessary to protect the revenue, the appropriate TTB officer may require a brewer to mark each container with the words “Not for Consumption or Sale.” If beer is removed in a bulk conveyance, the brewer shall place the marks on the route board of the conveyance.
(c) The brewer shall record beer removed for research, development, or testing in daily records under § 25.292 and on the Brewer's Report of Operations, Form 5130.9.
§ 25.201   Removal by pipeline.
A brewer may remove beer from the brewery, without payment of tax, by pipeline to the bonded premises of a distilled spirits plant which is authorized to produce distilled spirits and which is located contiguous to the brewery.
§ 25.203   Exportation without payment of tax.
A brewer may remove beer without payment of tax (a) for exportation, (b) for use as supplies on vessels and aircraft, or (c) for transfer to and deposit in foreign-trade zones for exportation or for storage pending exportation, in accordance with part 28 of this chapter. Beer may be removed from a brewery in bottles, kegs, or in bulk containers.
§ 25.205   Production.
(a) Any adult may produce beer, without payment of tax, for personal or family use and not for sale. An adult is any individual who is 18 years of age or older. If the locality in which the household is located requires a greater minimum age for the sale of beer to individuals, the adult shall be that age before commencing the production of beer. This exemption does not authorize the production of beer for use contrary to State or local law.
(b) The production of beer per household, without payment of tax, for personal or family use may not exceed:
(1) 200 gallons per calendar year if there are two or more adults residing in the household, or
(2) 100 gallons per calendar year if there is only one adult residing in the household.
(c) Partnerships except as provided in § 25.207, corporations or associations may not produce beer, without payment of tax, for personal or family use.
§ 25.206   Removal of beer.
Beer made under § 25.205 may be removed from the premises where made for personal or family use including use at organized affairs, exhibitions or competitions such as homemaker's contests, tastings or judging. Beer removed under this section may not be sold or offered for sale.
§ 25.207   Removal from brewery for personal or family use.
Any adult, as defined in § 25.205, who operates a brewery under this part as an individual owner or in partnership with others, may remove beer from the brewery without payment of tax for personal or family use. The amount of beer removed for each household, without payment of tax, per calendar year may not exceed 100 gallons if there is one adult residing in the household or 200 gallons if there are two or more adults residing in the household. Beer removed in excess of the above limitations will be reported as a taxable removal.
§ 25.211   Beer returned to brewery.
(a) General. Beer, produced in the United States, on which the brewer has paid or determined the tax may be returned to any brewery of the brewer. Upon return of the beer to the brewery, the brewer shall determine the actual quantity of beer received, expressed in barrels. For cases or bottles, the label may be used to determine the quantity. When kegs or cases containing less than the original contents are received, the brewer shall determine the actual quantity of beer by weight or by other accurate means. The brewer shall determine the balling and alcohol content of returned keg beer unless the keg is equipped with tamper-proof fittings. The quantity of beer returned may be established by weighing individual packages and subtracting package weight, or by weighing accumulated beer and subtracting tare weight of dumpsters, pallets, packages and the like.
(b) Disposition of returned beer. The brewer may dispose of beer returned under this subpart in any manner prescribed for beer which has never left the brewery. If returned beer is again removed for consumption or sale, tax will be determined and paid without respect to the tax which was determined or paid at the time of prior removal of the beer.
(c) Records. For beer returned to the brewery under this subpart, the brewer's daily records under § 25.292 will show:
(1) Date;
(2) Quantity of beer returned;
(3) If the title to the beer has passed, the name and address of the person returning the beer; and
(4) Name and address of the brewery from which the beer was removed, if different from the brewery to which returned.
(d) Supporting records. The records of returned beer will be supported by invoices, credit memoranda or other commercial papers, and will differentiate between beer returned to the brewery from which removed and beer returned to a brewery different from the one from which removed.
§ 25.212   Beer returned to brewery from which removed.
If beer on which the tax has been determined or paid is returned to the brewery from which removed, the brewer shall take the quantity of beer as an offset or deduction against the quantity of beer removed for consumption or sale from the brewery on that business day, as provided in § 25.159
§ 25.213   Beer returned to brewery other than that from which removed.
(a) Refund or adjustment of tax. If beer on which the tax has been determined or paid is returned to a brewery of the brewer other than the one from which removed, the brewer may make a claim for refund or relief of tax or may make an adjustment to the beer tax return, for the tax on the beer returned to the brewery. The brewer may not take an offset for beer returned to the brewery other than the one from which removed. Procedures for filing claims for refund or relief of tax or for making adjustments to the beer tax return are contained in subpart T of this part.
(b) Notice. A brewer need not file notice of intention to return beer to a brewery other than the one from which removed unless required by the appropriate TTB officer. When a notice is required, the brewer shall serially number each notice and execute it under penalties of perjury as defined in § 25.11. The brewer must file it with the appropriate TTB officer. The notice will contain the following information:
(1) The number and sizes of kegs and the actual quantity of beer, in barrels; or the number of cases and the number and sizes of bottles within the cases and the actual quantity of beer, in barrels;
(2) The name and address of the brewery from which the beer was removed;
(3) A statement that the tax on the beer has been fully paid or determined and the rate at which the tax on the beer was paid or determined; and
(4) If the title to the beer has passed, the name and address of the person returning the beer.
(c) Return of beer. If the brewer is required to file a notice of intention to return beer to the brewery, the brewer may bring the beer onto the brewery premises prior to filing the notice. The brewer shall segregate the returned beer from all other beer at the brewery and clearly identify it as returned beer. The returned beer will be retained intact for inspection by an appropriate TTB officer until the notice has been filed and disposition authorized.
§ 25.221   Voluntary destruction of beer.
(a) On brewery premises. (1) A brewer may destroy, at the brewery, beer on which the tax has not been determined or paid.
(2) A brewer operating a tavern on brewery premises under § 25.25 may destroy taxpaid or tax-determined beer stored on brewery premises, in accordance with the requirements of § 25.225.
(b) Destruction without return to brewery. A brewer may destroy beer on which the tax has been paid or determined at a location other than any of the breweries operated by the brewer, upon compliance with this subpart.
§ 25.222   Notice of brewer.
(a) Beer to be destroyed. When a brewer possesses beer which has been taxpaid or tax determined and which the brewer wishes to destroy at a location other than at any of the brewer's breweries, the brewer shall give written notice of intention to destroy the beer. The brewer must submit this notice to the appropriate TTB officer.
(b) Execution of notice. The brewer shall serially number each notice and execute each notice under penalties of perjury as defined in § 25.11. The brewer shall specify the date on which the beer is to be destroyed; this date may not be less than 12 days from the date the notice is mailed or delivered to the appropriate TTB officer.
(c) Information to be furnished. The notice will contain the following information:
(1) The number and sizes of kegs and the actual quantity of beer, in barrels; or the number of cases and the number and sizes of bottles within the cases, and the actual quantity of beer in barrels. When kegs containing less than the actual contents are to be destroyed, the brewer shall determine the actual content of beer by weight or by other accurate means.
(2) The date on which the beer was received for destruction.
(3) A statement that the tax on the beer has been fully paid or determined and the rate at which the tax on the beer was paid or determined.
(4) If the title of the beer has passed, the name and address of the person returning the beer.
(5) The location at which the brewer desires to destroy the beer and the reason for not returning the beer to the brewery.
§ 25.223   Destruction of beer off brewery premises.
(a) Destruction without supervision. A brewer may destroy beer without supervision if the appropriate TTB officer does not advise the brewer before the date specified in the notice that destruction of the beer is to be supervised.
(b) Destruction with supervision. The appropriate TTB officer may require that an appropriate TTB officer verify the information in the notice of destruction or witness the destruction of the beer. The appropriate TTB officer may also require a delay in the destruction of the beer or, if the place of destruction is not readily accessible to an appropriate TTB officer, may require that the beer be moved to a more convenient location. In this case, the brewer may not destroy the beer except under the conditions imposed by the appropriate TTB officer.
§ 25.224   Refund or adjustment of tax.
(a) Claim for refund or relief of tax. The tax paid by a brewer on beer produced in the United States and destroyed in accordance with this subpart may be refunded to the brewer. If the tax has not been paid, the brewer may be relieved of liability for the tax. Claims for refund or relief of tax will be filed as provided in subpart T of this part.
(b) Adjustments to the excise tax return. A brewer may make an adjustment (without interest) to the excise tax return, Form 5000.24, covering the tax paid on beer produced in the United States and destroyed in accordance with this subpart. Procedures for making adjustments to tax returns are contained in subpart T of this part.
§ 25.225   Destruction of taxpaid beer which was never removed from brewery premises.
(a) General. A brewer operating a tavern on brewery premises under § 25.25 may destroy taxpaid or tax-determined beer which was never removed from brewery premises, in accordance with the recordkeeping requirements of paragraph (b) of this section, and with the benefit of the tax refund provisions of paragraph (c) of this section.
(b) Recordkeeping. (1) When taxpaid or tax-determined beer which was never removed from brewery premises is destroyed, the brewer shall prepare a record of the quantity of beer destroyed, and the reason for, date of, and method of, destruction. The brewer may prepare this record on Form 2635 (5620.8) for submission as a claim under § 25.283.
(2) When required by the appropriate TTB officer, the brewer shall notify the appropriate TTB officer prior to the intended destruction, in accordance with procedures established by the appropriate TTB officer.
(c) Refund of tax. After destruction is completed, the brewer may file a claim for refund or credit of tax, in accordance with § 25.283(c).
§ 25.231   Finished beer.
(a) A brewer may obtain beer in barrels and kegs, finished and ready for sale from another brewer. The purchasing brewer may furnish the producing brewer barrels and kegs marked with the purchasing brewer's name and location. The producing brewer shall pay the tax as provided in subpart K of this part.
(b) A brewer may not purchase taxpaid or tax determined beer from another brewer in bottles or cans which bear the name and address of the purchasing brewer.
§ 25.232   Basic permit.
A brewer who engages in the business of purchasing beer for resale is required to possess a wholesaler's or importer's basic permit under the provisions of section 3(c) of the Federal Alcohol Administration Act and part 1 of this chapter.
§ 25.241   Production.
Brewers may produce cereal beverage and remove it without payment of tax from the brewery. The method of production shall insure that the alcohol content of the cereal beverage will not increase while in the original container after removal from the brewery. The brewer shall keep cereal beverage separate from beer, and shall measure the quantity of cereal beverage transferred for packaging in accordance with § 25.41.
§ 25.242   Markings.
(a) Designation. When bottled or packaged, cereal beverage may be designated “Cereal Beverage,” “Malt Beverage,” “Near Beer,” or other distinctive name. If designated “Near Beer,” those words will be printed identically in the same size or style of type, in the same color of ink, and on the same background.
(b) Barrels and kegs. A brewer may remove cereal beverage in barrels and kegs if the sides are durably painted at each end with a white stripe not less than 4 inches in width and the heads are painted in a solid color, with conspicuous lettering in a contrasting color reading “Nontaxable under section 5051 I.R.C.” The brewer shall also legibly mark the brewer's name or trade name and the address on the container.
(c) Bottles. Bottle labels shall show the name or trade name and address of the brewer, the distinctive name of the beverage, if any, and the legend “Nontaxable under section 5051 I.R.C.” Other information which is not inconsistent with the requirements of this section may be shown on bottle labels.
(d) Cases. The brewer shall mark cases or shipping containers to show the nature of the product and the name or trade name and address of the brewer.
§ 25.251   Authorized removals.
(a) Brewer's yeast. A brewer may remove brewer's yeast, in liquid or solid form containing not less than 10 percent solids (as determined by the methods of analysis of the American Society of Brewing Chemists), from the brewery in barrels, tank trucks, in other suitable containers, or by pipeline.
(b) Containers. Containers will bear a label giving the name and location of the brewery and including the words “Brewer's Yeast.”
(c) Pipeline. If brewer's yeast is removed by pipeline, the pipeline will be described in the Brewer's Notice, Form 5130.10. The premises where the brewer's yeast is received is subject to inspection by an appropriate TTB officer during ordinary business hours.
(d) Other articles. A brewer may remove malt, malt syrup, wort, and other articles from the brewery.
(e) Methods of Analysis of the American Society of Brewing Chemists, Seventh Edition (1976). In reference to paragraph (a) of this section, this incorporation by reference was approved by the Director of the Federal Register on March 23, 1981, and is available for inspection or at the National Archives and Records Administration (NARA). For information on the availability of this material at NARA, call 202-741-6030, or go to: https://www.archives.gov/federal-register/cfr/ibr-locations.html. This publication is available from the American Society of Brewing Chemists, 40 Pilot Knob Road, St. Paul, Minnesota 55121.
§ 25.252   Records.
(a) Production. The brewer shall keep records of the production of malt syrup, wort, and other articles which are removed from the brewery. The record shall include the quantities and kinds of materials used, and in the case of wort and concentrated wort, the balling.
(b) Removals. The brewer shall keep records of removals of brewer's yeast, malt and other articles from the brewery. The record shall include the quantity and date of removal of each lot, and the name and address of the consignee. These records may consist of invoices or shipping documents.
(c) Inspection. All records under this section shall be available for inspection at the brewery by an appropriate TTB officer during normal business hours.
§ 25.261   General.
(a) Authorized processes. A brewer may, in accordance with this subpart—
(1) Produce concentrate from beer,
(2) Reconstitute beer from concentrate,
(3) Transfer concentrate from one brewery to another brewery of the same ownership, and
(4) Remove concentrate without payment of tax for exportation, or for transfer to and deposit in a foreign-trade zone for exportation or for storage pending exportation in accordance with part 28 of this chapter.
(b) Brewery treatment of concentrate. Beer reconstituted from concentrate in accordance with this subpart shall (except with respect to the additional labeling of reconstituted beer under § 25.263) be treated the same as beer which has not been concentrated and reconstituted.
§ 25.262   Restrictions and conditions on processes of concentration and reconstitution.
(a) Conditions on concentration. A brewer may not employ any process of concentration which separates alcohol spirits from any fermented substance.
(b) Conditions on reconstitution —(1) The process of reconstitution of beer will consist of the addition to the concentrate of carbon dioxide and water only.
(2) A brewer may not employ any process of concentration or reconstitution unless the beer upon reconstitution will, without the addition of any substance other than carbon dioxide and water, possess the taste, aroma, color, and other characteristics of beer which has not been concentrated.
(3) The process of reconstitution shall provide for the addition of sufficient water to restore the concentrate to a volume not less than, and an alcohol content not greater than, that of the beer used to produce the concentrate.
§ 25.263   Production of concentrate and reconstitution of beer.
(a) Operations at brewery. A brewer may concentrate beer or reconstitute beer only at a brewery.
(b) Marking of containers. Containers of concentrate transferred to other breweries of the same ownership, and containers of concentrate removed for export shall be marked, branded and labeled in the same manner as prescribed for containers of beer in subpart J of this part. All containers shall be identified as containers of beer concentrate.
(c) Mingling with beer. A brewer may not mingle concentrate with unconcentrated beer. A brewer may mingle reconstituted beer with other beer at the brewery.
(d) Additional labeling. Barrels, kegs, and bottles containing beer produced from concentrate will show by label or otherwise the statement “PRODUCED FROM . . . CONCENTRATE,” the blank to be filled in with the appropriate class designation of the beer (beer, lager, ale, stout, etc.) from which the concentrate was made. The statement will be conspicuous and readily legible and, in the case of bottled beer, will appear in direct conjunction with, and as a part of, the class designation. All parts of the class designation will appear in lettering of substantially the same size and kind.
(e) Records and reports. Brewers producing concentrate and brewers reconstituting beer from concentrate shall keep the records and reports required by subpart U of this part.
§ 25.264   Transfer between breweries.
(a) Authorized transfers. A brewer may remove from the brewery, without payment of tax, concentrate produced from beer for transfer to any other brewery of the same ownership (within the limits of ownership described in § 25.181).
(b) Record of concentrate transferred. When transferring concentrate between breweries, the shipping brewer shall prepare for each conveyance a serially numbered invoice or commercial record covering the transfer. The invoice will be clearly marked to indicate that concentrate produced from beer is being transferred. The invoice will contain the following information:
(1) Name and address of shipping brewer;
(2) Date of shipment;
(3) Name and address of receiving brewer;
(4) The number of containers transferred, the balling, percentage of alcohol by volume, and the total barrels of concentrate; and
(5) A description of the beer from which the concentrate was produced including the number of barrels, balling, and percentage of alcohol by volume.
(c) Disposition of invoice. On shipment of the concentrate, the shipping brewer shall send the original copy of the invoice to the receiving brewer and shall retain a copy for the brewery records. On receipt of the concentrate, the receiving brewer shall note on the invoice any discrepancies in the concentrate received and retain the invoice in the brewery records.
§ 25.271   General.
(a) Establishment. A person may establish and operate a pilot brewing plant off the brewery premises for research, analytical, experimental, or developmental purposes relating to beer or brewery operations. Pilot brewing plants will be established as provided in this subpart.
(b) Authorized removals. Beer may be removed from a pilot brewing plant only for analysis or organoleptic examination.
(c) Transfers between brewery and pilot brewing plant. Subject to subpart L of this part, beer may be transferred to a pilot brewing plant from a brewery of the same ownership, and beer may be transferred without payment of tax from a pilot brewing plant to a brewery of the same ownership.
(d) Other regulations applicable. The provisions of subparts A, B, F, I, K, and of §§ 25.63, 25.64, and 25.21 are applicable to pilot brewing plants established under this subpart. Also, the provisions of §§ 25.72-25.75, 25.77, 25.92 and 25.94-25.105 relating to bonds, and consents of surety, and of §§ 25.131-25.134 are applicable to bonds and consents of surety given, and to changes in the proprietorship, location, and premises of pilot brewing plants established under this subpart.
§ 25.272   Application.
(a) Form of application. Any person desiring to establish a pilot brewing plant under the subpart shall file an application with the appropriate TTB officer. The application will be in writing and will include the following:
(1) Name and address of the applicant;
(2) Description of the premises and equipment to be used in the operations;
(3) Nature, purpose, and extent of the operations; and
(4) A statement that the applicant agrees to comply with all provisions of this part applicable to the operations to be conducted.
(b) Additional information. The appropriate TTB officer may at any time before or after approval of an application, require the submission of additional information necessary for administration of this part or for protection of the revenue.
(c) Authorization of operations. The appropriate TTB officer may authorize the operation of a pilot brewing plant if it is determined that the plant will be operated solely for one or more of the purposes specified in § 25.271, and that operations will not jeopardize the revenue.
(d) Withdrawal of authorization. The appropriate TTB officer may withdraw authorization to operate a pilot brewing plant if in his or her judgment, the revenue would be jeopardized by the operations of the plant.
(e) Commencement of operations. A person may not begin operation of a pilot brewing plant until the appropriate TTB officer has approved the application required by this section.
§ 25.273   Action on application.
If the appropriate TTB officer approves the application for a pilot brewing plant, he or she will note approval on the application and forward a copy to the applicant. The applicant must file the copy of the approved application at the premises, available for inspection by an appropriate TTB officer.
§ 25.274   Bond.
(a) Requirement. Except as provided in paragraph (d) of this section, any person requesting authorization to establish a pilot brewing plant under this subpart shall execute and file a brewer's bond, Form 5130.22. A person may not begin operation of a pilot brewing plant until receiving notice from the appropriate TTB officer of the approval of the bond. Operations may continue only as long as an approved bond is in effect.
(b) Penal sum. The penal sum of a bond covering the premises of a pilot brewing plant will be an amount equal to the potential tax liability of the maximum quantity of beer on hand, in transit to the plant, and unaccounted for at any one time, computed by multiplying the quantity of beer in barrels by the rate of tax in 26 U.S.C. 5051. The penal sum of the bond (or total penal sum if original and strengthening bonds are filed) may not exceed $50,000 or be less than $500.
(c) Conditions of bonds. The bond will be conditioned that the operator of the pilot brewing plant shall pay, or cause to be paid, to the United States according to the laws of the United States and the provisions of this part, the taxes, including penalties and interest for which the operator shall become liable, on all beer brewed, produced, or received on the premises.
(d) Bond exemption. A person is not required to provide a bond under this section if the person is a brewer qualified under this part and if, under § 25.91(e), the person is exempt from bond requirements applicable to brewers.
§ 25.275   [Reserved]
§ 25.276   Operations and records.
(a) Commencement of operations. A person may commence operation of a pilot brewing plant upon receipt of the approved application and any required bond.
(b) Reports. The operator of a pilot brewing plant is not required to file the Brewer's Report of Operations, Form 5130.9.
(c) Records. The operator of a pilot brewing plant must maintain records which, in the opinion of the appropriate TTB officer, are appropriate to the type of operation being conducted. These records will include information sufficient to account for the receipt, production, and disposition of all beer received or produced on the premises, and the receipt (and disposition, if removed) of all brewing materials. These records will be available for inspection by an appropriate TTB officer.
§ 25.277   Discontinuance of operations.
When operations of a pilot brewing plant are to be discontinued, the operator shall notify the appropriate TTB officer stating the purpose of the notice and giving the date of discontinuance. When operations have been completed and all beer at the premises has been disposed of and accounted for, the appropriate TTB officer will note approval on the notice and return a copy to the operator.
§ 25.281   General.
(a) Reasons for refund or adjustment of tax or relief from liability. The tax paid by a brewer on beer produced in the United States may be refunded, or adjusted on the tax return (without interest) or, if the tax has not been paid, the brewer may be relieved of liability for the tax on:
(1) Beer returned to any brewery of the brewer subject to the conditions outlined in subpart M of this part;
(2) Beer voluntarily destroyed by the brewer subject to the conditions outlined in subpart N of this part;
(3) Beer lost by fire, theft, casualty, or act of God subject to the conditions outlined in § 25.282.
(b) Refund of beer tax excessively paid. A brewer may be refunded the tax excessively paid on beer subject to the conditions outlined in § 25.285.
(c) Rate of tax. Brewers who have filed the notice required by § 25.167 and who have paid the tax on beer at the reduced rate of tax shall make claims for refund or relief of tax, or adjustments on the tax return, based upon the lower rate of tax. However, a brewer may make adjustments or claims for refund or relief of tax based on the higher rate of tax if the brewer can establish to the satisfaction of the appropriate TTB officer that the tax was paid or determined at the higher rate of tax.
§ 25.282   Beer lost by fire, theft, casualty, or act of God.
(a) General. The tax paid by any brewer on beer produced in the United States may be adjusted (without interest) on the excise tax return, may be refunded or credited (without interest) or, if the tax has not been paid, the brewer may be relieved of liability for the tax if, before transfer of title to the beer to any other person, the beer is lost, whether by theft or otherwise, or is destroyed or otherwise rendered unmerchantable by fire, casualty, or act of God. The tax liability on excessive losses of beer from transfer between breweries of the same ownership may be remitted as provided in § 25.286.
(b) Unmerchantable beer. When beer is rendered unmerchantable by fire, casualty, or act of God, refund, credit or adjustment of tax, or relief from liability of tax will not be allowed unless the brewer proves to the satisfaction of the appropriate TTB officer that the beer cannot be salvaged and returned to the market for consumption or sale.
(c) Beer lost or destroyed. When beer is lost or destroyed, whether by theft or otherwise, the appropriate TTB officer may require the brewer to file a claim for relief from the tax and to submit proof as to the cause of the loss.
(d) Beer lost by theft. When it appears that beer was lost by theft, the tax shall be collected unless the brewer proves to the satisfaction of the appropriate TTB officer that the theft occurred before removal from the brewery and occurred without connivance, collusion, fraud, or negligence on the part of the brewer, consignor, consignee, bailee, or carrier, or the employees or agents of any of them.
(e) Notification of appropriate TTB officer. (1) A brewer who sustains a loss of beer before transfer of title of the beer to another person and who desires to adjust the tax on the excise tax return or to file a claim for refund or for relief from liability of tax, must, on learning of the loss of beer, immediately notify in writing the appropriate TTB officer of the nature, cause, and extent of the loss, and the place where the loss occurred. Statements of witnesses or other supporting documents must be furnished if available.
(2) A brewer possessing unmerchantable beer and who desires to adjust the tax on the excise tax return or to file a claim for refund or for relief from liability must notify in writing the appropriate TTB officer, of the circumstances by which the beer became unmerchantable, and must state why the beer cannot be salvaged and returned to the market for consumption or sale.
(f) Additional information. The appropriate TTB officer may require the brewer to submit additional evidence necessary to verify the tax adjustment or for use in connection with a claim.
§ 25.283   Claims for refund of tax.
(a) Beer returned to brewery or voluntarily destroyed at a location other than a brewery. Claims for refund of tax on beer returned to a brewery under the provisions of § 25.213 or voluntarily destroyed at a location other than a brewery shall include:
(1) The name and address of the brewer filing the claim, the address of the brewery from which the beer was removed, and the address of the brewery to which the beer was returned, as applicable;
(2) The quantity of beer covered by the claim and the rate(s) of tax at which the beer was tax paid or determined;
(3) The amount of tax for which the claim is filed;
(4) The reason for return or voluntary destruction of the beer and the related facts;
(5) Whether the brewer is indemnified by insurance or otherwise in respect of the tax, and if so, the nature of the indemnification;
(6) The claimant's reasons for believing the claim should be allowed;
(7) The date the beer was returned to the brewery, if applicable;
(8) The name of the person from whom the beer was received;
(9) A statement that the tax has been fully paid or determined; and
(10) A reference to the notice (if required) filed under §§ 25.213 or 25.222.
(b) Beer lost, destroyed, or rendered unmerchantable. Claims for refund of tax on beer lost, whether by theft or otherwise, or destroyed or otherwise rendered unmerchantable by fire, casualty, or act of God shall contain:
(1) Information required by paragraphs (a)(1), (2), (3), (5), and (6) of this section;
(2) A statement of the circumstances surrounding the loss;
(3) When applicable, the reason the beer rendered unmerchantable cannot be returned to the market for consumption or sale;
(4) Date of the loss, and if lost in transit, the name of the carrier;
(5) A reference incorporating the notice required by § 25.282; and
(6) When possible, affidavits of persons having knowledge of the loss, unless the affidavits are contained in the notice given under § 25.282.
(c) Voluntary destruction of taxpaid beer which was never removed from brewery premises. Claims for refund or credit of tax on beer voluntarily destroyed under the provisions of § 25.225, shall include:
(1) Information required by paragraphs (a)(1), (a)(2), (a)(3), (a)(5), and (a)(9) of this section; and
(2) The information contained in the record required by § 25.225(b).
(d) Additional evidence. The appropriate TTB officer may require the submission of additional evidence in support of any claim filed under this section.
(e) Filing of claim. Claim for refund of tax shall be filed on Form 2635 (5620.8). Claims shall be filed within 6 months after the date of the return, loss, destruction, or rendering unmerchantable. Claims will not be allowed if filed after the prescribed time or if the claimant was indemnified by insurance or otherwise in respect of the tax.
§ 25.284   Adjustment of tax.
(a) Adjustment of tax in lieu of refund. In lieu of filing a claim for refund of tax as provided in § 25.283, a brewer may make an adjustment (without interest) to the excise tax return, Form 5000.24, for the amount of tax paid on beer returned to the brewery, voluntarily destroyed, lost, destroyed, or rendered unmerchantable.
(b) Beer returned to brewery other than from which removed. An adjustment may be made on the excise tax return for the amount of tax paid on beer returned to the brewery under § 25.213. The adjustment will be made on the tax return filed for the brewery to which the beer was returned. The adjustment may not be made prior to the return of beer to the brewery. If the brewer is required to file a notice under § 25.213, the adjustment may not be made until the appropriate TTB officer authorizes disposition of the beer.
(c) Beer voluntarily destroyed. An adjustment may be made on the excise tax return for the amount of tax paid on beer voluntarily destroyed under subpart N of this part. The adjustment will be made on the tax return filed for the brewery from which the beer was removed. The adjustment may not be made prior to the destruction of the beer.
(d) Beer lost, destroyed or rendered unmerchantable. An adjustment may be made on the excise tax return for the amount of tax paid on beer lost, destroyed, or rendered unmerchantable under § 25.282. The adjustment will be made on the tax return filed for the brewery from which the beer was removed. A brewer may not make an adjustment prior to notification required under § 25.282(e). When beer appears to have been lost due to theft, the brewer may not make an adjustment to the tax return until establishing to the satisfaction of the appropriate TTB officer that the theft occurred before removal from the brewery and occurred without connivance, collusion, fraud, or negligence on the part of the brewer, consignor, consignee, bailee, or carrier, or the employees or agents of any of them.
(e) Condition of adjustments. (1) All adjustments will be made within 6 months of the return, destruction, loss, or rendering unmerchantable of the beer.
(2) Adjustment of the tax paid will be made without interest.
(3) An adjustment may not be taken if the brewer was indemnified by insurance or otherwise in respect of the tax.
(f) Records. When brewers make adjustments on the excise tax return in lieu of filing a claim, they shall keep the following records;
(1) For beer returned to the brewery or voluntarily destroyed, the records required by §§ 25.283(a)(1), (2), (4), (5), (7), (8), and (10).
(2) For beer lost, destroyed, or rendered unmerchantable, the records required by § 25.283 (a)(1), (2), (5), (b) (2), (3), (4), (5), and (6).
§ 25.285   Refund of beer tax excessively paid.
(a) Eligibility. A brewer who, under the provisions of § 25.152, is eligible to pay the reduced rate of tax on beer prescribed by 26 U.S.C. 5051 (a)(2), but who did not pay tax at the reduced rate by return, form TTB F 5000.24, during the calendar year for which the brewer was eligible, may file a claim for refund of tax excessively paid on beer for that year. The brewer shall file the claim for refund to tax on form TTB F 5620.8 within the period of limitation prescribed in 26 U.S.C. 6511(a). For rules relating to the period of limitation on filing claims, see §§ 70.82 and 70.83.
(b) Calculation of refund. The brewer shall file the claim based on the quantity of beer eligible to be taxpaid at the lower rate of tax, but which was paid at the higher rate of tax, subject to a maximum of 60,000 barrels of beer per calendar year or the limitation as determined in § 25.152(d). The brewer shall exclude from the claim the quantity of beer removed that calendar year on which a credit or refund at the higher rate of tax has been taken.
(c) Information to be furnished. Each claim for refund of tax filed under this section shall include the following information:
(1) Name and address of the brewer.
(2) Quantity of beer covered by the claim as determined in paragraph (b) of this section.
(3) Amount of tax paid in excess.
(4) A statement of the exact number of barrels of beer which the brewer produced during the calendar year.
(5) A statement that the brewer is not a member of a controlled group of brewers (as defined in § 25.152(b)(1) or, if the brewer is a member of a controlled group of brewers, a list of the names and addresses of all the members of the controlled group of brewers and a statement of the combined number of barrels of beer produced by all members of the controlled group in the calendar year.
(6) If the brewer is a member of a controlled group of brewers, a statement of how the 60,000 barrel limitation for the reduced rate of tax is to be apportioned among the members of the controlled group of brewers.
§ 25.286   Claims for remission of tax on beer lost in transit between breweries.
(a) Filing of claim. Claims for remission of tax on beer lost in transit between breweries of the same ownership shall be prepared on form TTB F 5620.8 by the brewer or the brewer's authorized agent and submitted with the form TTB F 5130.9 of the receiving brewery for the reporting period in which the shipment is received. When the loss is by casualty, the claim will be submitted with the form TTB F 5130.9 for the reporting period in which the loss is discovered. When, for valid reason, the required claim cannot be submitted with form TTB F 5130.9, the brewer shall attach a statement to form TTB F 5130.9 stating the reason why the claim cannot be filed at the time and stating when it will be filed. A claim will not be allowed unless filed within 6 months of the date of the loss.
(b) Information to be shown. The claim will show the following information:
(1) The date of the shipment;
(2) The quantity of beer lost (number and size of packages and their equivalent in barrels), and the rate(s) of tax at which the beer would have been removed for consumption or sale;
(3) The percent of loss;
(4) The specific cause of the loss;
(5) The nature of the loss (leakage, breakage, casualty, etc.);
(6) Information as to whether the claimant has been indemnified by insurance or otherwise in respect to the tax, or has any claim for indemnification; and
(7) For losses due to casualty or accident, statements from the carrier or other persons having personal knowledge of the loss, if available.
§ 25.291   Records.
(a) General. (1) The records to be maintained by brewers include:
(i) All individual transaction forms, records, and summaries specifically required by this part;
(ii) All supplemental, auxiliary, and source data used in the compilation of required forms, records, and summaries, and for preparation of reports, returns, and claims; and
(iii) Copies of notices, reports, returns, and approved applications and other documents relating to operations and transactions.
(2) The records required by this part may consist of the brewer's commercial documents, rather than records prepared expressly to meet the requirements of this part, if those documents contain all the details required by this part, are consistent with the general requirements of clarity and accuracy, and do not result in difficulty in their examination.
(b) Entries. (1) Each entry required by this part to be made in daily records will be made not later than the close of the business day next succeeding the day on which the transaction occurs.
(2) When the brewer prepares transaction or business records concurrently with the individual operation or transaction and these records contain all the required information with respect to the operation or transaction, entries in daily records may be made not later than the close of business the third business day succeeding the day on which the operation or transaction occurs.
(c) Content. (1) All entries in the daily records required by this subpart will show the date of the operation or transaction.
(2) Daily records will accurately and clearly reflect the details of each operation or transaction and, as applicable, contain all data necessary to enable—
(i) Brewers to prepare summaries, reports, and returns required by this part, and
(ii) Appropriate TTB officers to verify removals of beer and cereal beverages, to verify claims, and to ascertain if there has been compliance with law and regulations.
(d) Format. (1) The brewer's copies of prescribed forms which bear all required details will be utilized as daily records.
(2) When a form is not prescribed, the records required by this subpart will be those commercial records used by the brewer in the accounting system and will bear all required details.
(3) The brewer shall maintain daily records required by this part so they clearly and accurately reflect all mandatory information. When the format or arrangement of the daily records is such that the information is not clearly or accurately shown, the appropriate TTB officer may require a format or arrangement which will clearly and accurately show the information.
§ 25.292   Daily records of operations.
(a) Daily records. A brewer shall maintain daily records of operations which show by quantity the following:
(1) Each kind of material received and used in the production of beer and cereal beverage (including the balling and the quantity of each type of material used in the production of wort or concentrated wort).
(2) Beer and cereal beverage produced (including water added after production is determined).
(3) Beer and cereal beverage transferred for and returned from bottling.
(4) Beer and cereal beverage transferred for and returned from racking.
(5) Beer and cereal beverage bottled.
(6) Beer and cereal beverage racked.
(7) Cereal beverage removed from the brewery.
(8) Beer removed for consumption or sale. For each removal, the record will show the date of removal, the person to whom the beer was shipped or delivered (not required for sales in quantities of one-half barrel or less for delivery at the brewery), and the quantities of beer removed in kegs and in bottles.
(9) Beer removed without payment of tax. For each removal, the record will show the date of removal, the person to whom the beer was shipped or delivered, and the quantities of beer removed in kegs, bottles, tanks, tank cars, tank trucks, tank ships, barges or deep tanks of vessels.
(10) Packaged beer used for laboratory samples at the brewery.
(11) Beer consumed at the brewery.
(12) Beer returned to the brewery from which removed.
(13) Beer returned to the brewery after removal from another brewery owned by the brewer.
(14) Beer reconditioned, used as material, or destroyed.
(15) Beer received from other breweries or received from pilot brewing plants.
(16) Beer and cereal beverage lost due to breakage, theft, casualty, or other unusual cause.
(17) Brewing materials sold or transferred to pilot brewing plants (including the name and address of the person to whom shipped or delivered) and brewing materials used in the manufacture of wort, wort concentrate, malt syrup, and malt extract for sale or removal.
(18) Record of tests of measuring devices.
(19) Beer purchased from other brewers in the purchasing brewer's barrels and kegs and such beer sold to other brewers.
(b) Daily summary records. A brewer shall maintain daily summaries of the following transactions:
(1) Beer and cereal beverage bottled;
(2) Beer and cereal beverage racked;
(3) Beer removed for consumption or sale;
(4) Beer returned to the brewery from which removed;
(5) Beer returned to the brewery after removal from another brewery owned by the brewer; and
(6) Brewing materials, beer and cereal beverage in process, and finished beer and cereal beverage on hand.
§ 25.293   Record of ballings and alcohol content.
The brewer shall maintain a record of the ballings of the wort produced, and of the ballings and the alcohol content of beer and cereal beverage transferred for bottling and racking, between breweries in bulk conveyances, and to pilot brewing plants. Records showing ballings and alcohol content need not be consolidated and averaged daily unless the brewer so desires.
§ 25.294   Inventories.
(a) The brewer shall take a physical inventory of beer and cereal beverage at least once each calendar month. The brewer may take this inventory within 7 days of the close of the calendar month for which made.
(b) The brewer shall make a record of inventories of beer or cereal beverage which will show the following:
(1) Date taken;
(2) Quantity of beer and cereal beverage on hand;
(3) Losses, gains, and shortages; and
(4) Signature, under penalties of perjury of the brewer or person taking this inventory.
(c) The brewer shall retain inventory records and make them available for inspection by an appropriate TTB officer.
§ 25.295   Record of unsalable beer.
A brewer having unsalable beer in packages or tanks in the brewery may destroy, recondition, or use the beer as material. The brewer shall report the quantity of the beer destroyed, reconditioned, or used as materials, in daily records and on Form 5130.9. If the unsalable beer consists of rejects from the packaging operations, the beer may be destroyed without being included in the packaging production records, and, when so destroyed, will be so reported in the brewer's daily records and on Form 5130.9. When reject bottled beer is to be consumed at the brewery or sold to brewery employees, or is cased or otherwise accumulated pending other disposition, the quantity will be included in the packaging production and be so reported in the brewer's daily records and on Form 5130.9.
§ 25.296   Record of beer concentrate.
(a) Daily records. A brewer who produces concentrate or reconstitutes beer shall maintain daily records which accurately reflect the balling, quantity, and alcohol content of—
(1) Beer entered into the concentration process;
(2) Concentrate produced;
(3) Concentrate transferred to other breweries;
(4) Concentrate exported;
(5) Concentrate received;
(6) Concentrate used in reconstituting beer; and
(7) Beer reconstituted.
(b) Summary report of operations. A brewer who produces concentrate or reconstitutes beer shall report by specific entries on Form 5130.9, the quantity of beer entered into the concentration process, and the quantity of beer reconstituted from concentrate. In addition, the brewer shall prepare on Form 5130.9, a summary accounting of all concentrate operations at the brewery for the reporting period. This summary accounting will show, in barrels of 31 gallons with fractions rounded to 2 decimal places:
(1) Concentrate on hand beginning of the reporting period;
(2) Concentrate on hand end of the reporting period;
(3) Concentrate produced;
(4) Concentrate received; and
(5) Specific disposition of concentrate such as “used in reconstitution,” “removed for export,” “removed to foreign-trade zone,” or “transferred to other breweries.”
§ 25.297   Report of Operations, Form 5130.9 or Form 5130.26.
(a) Monthly report of operations. Except as provided in paragraph (b) of this section, each brewer shall prepare and submit a monthly report of brewery operations on Form 5130.9.
(b) Quarterly report of operations. (1) For calendar quarters commencing on or after January 1, 2015, a brewer who was liable for not more than $50,000 in taxes with respect to beer imposed by 26 U.S.C. 5051 and 7652 in the preceding calendar year and reasonably expects to be liable for not more than $50,000 in such taxes during the current calendar year shall file quarterly Form 5130.9 or Form 5130.26 (or any successor forms). For purposes of this section, “reasonably expects” means that the brewer was liable for not more than $50,000 in taxes the previous calendar year and that there is no other existing or anticipated circumstance known to the brewer (such as an increase in production capacity) that would cause the brewer's liability to increase beyond that level in the current calendar year.
(2) If a brewer determines that it will be liable for more than $50,000 in taxes with respect to beer imposed by 26 U.S.C. 5051 and 7652 during the current calendar year, the brewer shall file Form 5130.9 monthly beginning with the first month during which the tax liability exceeds $50,000, and shall concurrently file Form 5130.9 for any previous month of that quarter. When filing the first monthly report, a brewer shall state on the form that it will be liable for more than $50,000 in taxes for the current calendar year and will henceforth submit monthly filings. The brewer shall then continue to file Form 5130.9 for each subsequent month of that calendar year.
(3) The appropriate TTB officer may at any time require a brewer who is filing Form 5130.9 or Form 5130.26 quarterly to file such report monthly on Form 5130.9 if there is a jeopardy to the revenue.
(c) Retention. The brewer shall retain a copy of Form 5130.9 or Form 5130.26 (or any successor form) as part of the brewery records.
§ 25.298   Excise tax return, Form 5000.24.
All entries on the excise tax return, Form 5000.24, will be fully supported by accurate and complete records. The brewer shall file a copy of Form 5000.24 as a part of the records at the brewery.
§ 25.299   Execution under penalties of perjury.
When a return, form, or other document is required by this part or in the instruction on or with the return, form, or other document to be executed under the penalties of perjury, as defined in § 25.11, it will be so executed and will be signed by the brewer or other duly authorized person.
§ 25.300   Retention and preservation of records.
(a) Place of maintenance. Records required by this part will be prepared and kept by the brewer at the brewery where the operation or transaction occurs and will be available for inspection by any appropriate TTB officer during business hours.
(b) Reproduction of original records. Whenever any record, because of its condition, becomes unsuitable for its intended or continued use, the brewer shall reproduce the record by a process under § 25.301. The reproduced record will be treated and considered for all purposes as though it were the original record, and all provisions of law applicable to the original are applicable to the reproduction.
(c) Retention of records. Records required by this part will be preserved for a period of not less than three years from the date thereof or the date of the last entry required to be made thereon, whichever is later. The appropriate TTB officer may require records to be kept for an additional period not exceeding three years in any case where such retention is deemed necessary or advisable for the protection of the revenue.
(d) Data Processing. (1) Notwithstanding any other provision of this section, record data maintained on data processing equipment may be kept at a location other than the brewery if the original transaction (source) records required by §§ 25.292-25.298 are kept available for inspection at the brewery.
(2) Data which has been accumulated on cards, tapes, discs, or other accepted record media will be retrievable within five business days.
(3) The applicable data processing program will be made available for examination if requested by an appropriate TTB officer.
§ 25.301   Photographic copies of records.
(a) General. Brewers may record, copy, or reproduce records required by this part. Brewers may use any process which accurately reproduces the original record and which forms a durable medium for reproducing and preserving the original record.
(b) Copies of records treated as original records. Whenever records are reproduced under this section, the reproduced records will be preserved in conveniently accessible files, and provisions will be made for examining, viewing and using the reproduced record the same as if it were the original record, and it will be treated and considered for all purposes as through it were the original record. All provisions of law and regulations applicable to the original are applicable to the reproduced record. As used in this section, “original record” means the record required by this part to be maintained or preserved by the brewer, even though it may be an executed duplicate or other copy of the document.